Logitech 2010 Annual Report Download - page 94

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Effect of realized compensation on future pay decisions
The Compensation Committee considers actual realized compensation received in determining if our
compensation programs are meeting their objectives of pay-for-performance and retention. The Compensation
Committee generally does not reduce compensation plan targets based on realized compensation, as we do not want
to create a disincentive for exceptional performance. However, the possible cash compensation increases and the
amount of equity incentive awards may be adjusted based on actual realized compensation.
Other factors
For newly hired executives, in addition to market compensation for the position, consideration is given to the
base salary of the individual at his or her prior employment and any unique personal circumstances that motivated
the executive to leave that prior position and join Logitech.
In determining Mr. De Luca’s and Mr. Quindlen’s 2010 compensation the Compensation Committee reviewed
and considered the same data as for other named executive officers, as discussed above, but also considered the
following:
• Mr. De Luca’s and Mr. Quindlen’s fiscal year 2009 base salary, target bonus and equity incentive
compensation; and
• Mr. De Luca’s and Mr. Quindlen’s total equity incentive position and the total intrinsic value of vested
and unvested equity incentives held by them.
Timing of compensation decisions
Executive cash compensation (base salary plus target bonus) is typically reviewed at the Compensation
Committee’s March meeting in an effort to align cash compensation changes to the fiscal year, which begins in
April. Compensation increases are not automatic each year and typically are largely dependent upon relative pay
rates for the industry and Company and individual performance. However, in fiscal year 2010 base salary and target
bonus opportunities for named executive officers were frozen over those in fiscal year 2009 due to economic and
market conditions. At the March meeting the Committee typically considers the equity incentive award grant for the
Chairman and the CEO, although the Committee has recently determined that, for fiscal year 2011, the Committee
will consider equity incentive awards for the Chairman and the CEO at the same time as those for other executive
officers, as part of the Company’s annual employee equity incentive grant cycle. However, the Committee may also
make executive compensation decisions at other times during the fiscal year in the event of an executive new hire
or promotion or other reasons.
ELEMENTS OF COMPENSATION / EXECUTIVE COMPENSATION PRACTICES
The principal components of our executive compensation programs are:
• Base salary.
• Short-term cash incentive awards.
• Long-term equity incentive awards.
Our executive officers are also eligible to participate in our health and benefits plans, retirement savings
plans, and our employee share purchase plans, which are generally available to our employees. We also provide
limited perquisites, as described below.