Logitech 2005 Annual Report Download - page 30

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Long Term Incentives
Logitech provides for stock option grants as part of its executive compensation package. It does so because
it believes that a portion of executive compensation should be linked to increasing shareholder value. Stock
options have value for an employee only if the Company’s share price increases above the exercise price of the
option and the employee remains employed by the Company for the duration of the option vesting period. As
with base salary, the stock options granted to Executive Officers are reviewed and recommended to the Board by
the Compensation Committee based on grant levels for comparable positions in the industry, individual
performance and the anticipated value of the Executive Officer’s future contribution to the Company.
Executive Officers are also eligible to participate in the Company’s Employee Share Purchase Plan, under
which employees may purchase registered shares with up to 10% of their earnings at the lower of 85% of the fair
market value at the beginning or the end of each offering period. There are two offering periods, each consists of
a six-month period during which payroll deductions of employee participants are accumulated under the share
purchase plan.
The Chief Executive Officer is not present at any deliberations or upon the vote of the Board to approve his
salary or equity compensation.
Non-Executive Director Compensation
The compensation of Logitech’s non-executive Directors is established by the Board Compensation
Committee (refer to section 3.5 above). The Board Compensation Committee reviews aggregate data on non-
executive Director compensation of comparable companies in setting compensation for Logitech’s non-executive
Directors.
Under the Company’s current policy, each non-executive Director receives options to purchase 20,000 of
the Company’s registered shares upon their election to the Board and options to purchase 10,000 registered
shares upon their re-election to the Board. These options are granted at the fair market value at the date of grant
and become exercisable over 3 years in equal annual increments. In addition, non-executive Directors are paid an
annual retainer of $25,000, or CHF 35,000 and receive $2,000, or CHF 2,500 for each board or committee
meeting attended. All Directors are reimbursed for expenses in connection with attendance at Board and
Committee meetings.
Executive Directors do not receive any compensation for their service on the Board of Directors.
5.2 Compensation of Directors and Executive Officers
The following table sets forth the compensation Logitech paid to non-executive Directors and Executive
Officers in all capacities for the fiscal year ended March 31, 2005 (in thousands except share and per share
amounts):
Compensation Options
Granted
(1)
Exercise
Price
Expiration
Year
Share
Option
Value
(2)
Other
(3)Name of Group Salary Bonus
All non-executive Directors as a group
(6 individuals) (4) .................. $ 275 $ — 40,000 $47.01 2015 $ 761 $—
All Executive Officers as a group
(8 individuals) ..................... $2,474 $1,990 305,000 $45.77 to $47.16 2015 $6,223 $ 62
(1) Total options granted to non-executive Directors and Executive Officers represent 27% of the options
granted by Logitech in fiscal year 2005. The remainder of the options was granted to 486 of Logitech’s
other employees.
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