Logitech 2011 Annual Report Download - page 103

91
ENglISH
COMPENSATION REPORT 2011
INTRODUCTION
This Compensation Report contains information on Logitech compensation philosophy and practices, the
background for decisions, and the results of decisions with respect to Logitech’s named executive officers and its
Board members.
This Compensation Report has been designed to comply with the proxy statement rules under U.S. securities
laws as well as Swiss regulations and best corporate governance practices. This Report is an integrated part of our
Annual Report, Invitation and Proxy Statement for our 2011 Annual General Meeting.
Compensation Discussion and Analysis
EXECUTIVE SUMMARY
Despite its disappointing conclusion, due to weakness in our EMEA retail region, fiscal year 2011 was
otherwise a strong year overall with 20% growth in sales, 82% growth in operating income and net income that
nearly doubled compared with fiscal year 2010. We delivered solid sales growth in both the Americas and Asia
Pacific, with strong sales growth in China. Sales for our LifeSize videoconferencing division in the fourth quarter
of fiscal year 2011 grew nearly 90% over the fourth quarter of fiscal year 2010, the first full fiscal quarter after we
acquired LifeSize.
The following are key developments in fiscal year 2011 relating to compensation:
• Base Salary Actions. Given the improvement in both the overall economy and in Logitech’s financial
performance, as well as the market trend with regard to salary increases, we resumed merit increases to
base salaries in fiscal year 2011 for our broad-based employee population and named executive officers,
which had generally been frozen in fiscal year 2010. For fiscal year 2012, based on Logitech’s financial
performance exiting fiscal year 2011, only one of our named executive officers, Mr. Bardman, received
a base salary increase.
• Changes to Bonus Plan Performance Measures. In fiscal year 2011 the Compensation Committee
adopted revenue and operating income performance measures for Logitech’s annual cash incentive
bonus plans. This was a return to the performance measures used in prior fiscal years. These metrics
address both ‘‘top line’’ (revenue) and ‘‘bottom line’’ (operating income) corporate financial goals, both
of which the Compensation Committee believes are critical to driving long-term shareholder value.
• Bonus Plan Payments. The performance-based cash payments earned by our named executive officers
in fiscal year 2011 under the annual cash incentive bonus plan were lower, in aggregate, than the bonuses
earned in fiscal year 2010 due to lower performance against plan than compared with fiscal year 2010.
On the basis of our full year performance against our original plan, both revenue and operating income
met or exceeded the Board-approved targets for fiscal year 2011, resulting in an average bonus payout
against target of 103%.