Logitech 2010 Annual Report Download - page 95
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85
ENglISH
The following table outlines our objectives for each of the principal components of executive compensation.
Element of Compensation Objective
Base salary •Reward individuals’ current contributions to the company
•Compensate individuals for their expected day-to-day
performance
Short-term cash incentive awards •Align executive compensation with annual and semi-annual
performance
•Make a significant portion of the executive’s yearly cash
compensation variable and subject to the achievement of
company business goals.
•Motivate and reward the executive for above-target performance
Long-term equity incentive awards •Support retention of the executive
•Directly align executive and shareholder interests
•Provide a direct incentive for future performance
Pay Mix
In determining how we allocate an executive’s total compensation package among base salary, short-term
cash incentives and long-term equity incentives, we emphasize compensation elements that reward performance
against measures that correlate closely with increases in shareholder value. Accordingly, a significant portion of our
executive compensation is at-risk, including the short-term cash incentive awards and the majority of our long-term
equity incentive awards. Our CEO and other executive officers have a higher percentage of at-risk compensation
(and thus greater upside potential and downside risk) relative to Logitech’s other employees. We believe this is
appropriate because our executive officers have the greatest influence on Logitech’s performance.
The charts below indicate the percentage of total compensation costs in fiscal year 2010 represented by
base salary, short-term cash incentives (bonus payments), and long-term equity incentive awards for Guerrino
De Luca, Gerald Quindlen and all other named executive officers. All underlying amounts are taken from the
Summary Compensation Table.
Guerrino De Luca
Short-term
cash incentive
awards
57.5%
Base salary
35%
Equity
incentive
awards
7.5%
Gerald Quindlen
Short-term
cash incentive
awards
37%
Base salary
23%
Equity incentive
awards
40%
All Other Named Executive Officers
Short-term cash
incentive awards
28%
Base salary
28%
Equity
incentive awards
44%
Base salary
Base salary is the fixed portion of executive pay and is set to reward individuals’ current contributions to
Logitech and compensate them for their expected day-to-day performance.