Logitech 2011 Annual Report Download - page 107

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Base salary
Consistent with Logitech’s philosophy of tying pay to performance, our executive officers receive a relatively
small percentage of their overall compensation in the form of base pay, comprising approximately 25% of total
compensation in fiscal year 2011. Base salary is intended to recognize the executive’s current contributions to
Logitech and compensate them for their expected day-to-day performance. The Committee targets executive
salaries to be at or near the market median for comparable positions.
In setting base salary levels for fiscal year 2011, the Compensation Committee considered each executive’s
pay against similar roles amongst our peer companies, overall salary increase trends for executive officers, and
each executive’s performance over the past year.
In fiscal year 2010, the base salaries for our executive officers were frozen due to the uncertain economic and
market conditions as well as the industry trend to suspend salary increases.
In fiscal year 2011, given the improvement in both the overall economy and in Logitech’s financial performance,
as well as the market trend with regards to salary increases, we provided salary increases for most of our named
executive officers. The named executive officers whose salaries were at or above the median for our peer companies
(Mr. De Luca, Mr. Heid and Mr. Labrousse), based on data provided by the Committee’s independent compensation
consultant in March 2010, received increases below the average for our peer group, ranging from 0% to 4%. The
two executive officers (Mr. Quindlen and Mr. Bardman), whose salaries were below the market median, received
slightly larger increases of 5%. The table below summarizes the changes in base salary in fiscal year 2011.
Named Executive Officer 2011 Base Salary ($) 2010 Base Salary ($) Change 2011 to 2010
Gerald Quindlen .......................... 825,000 787,500 5%
Erik Bardman ............................ 420,000 400,000(1) 5%
Guerrino De Luca ......................... 550,000 550,000 0%
Werner Heid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 570,000 550,000 4%
Junien Labrousse . . . . . . . . . . . . . . . . . . . . . . . . . 700,000(2) 680,000 3%
(1) Mr. Bardman began employment approximately mid-way through FY10. His FY10 base salary is shown on
an annualized basis for ease of comparison with his FY11 base salary.
(2) Mr. Labrousse’s FY11 base salary was set by the Compensation Committee in U.S. dollars. Mr. Labrousse
subsequently relocated to Switzerland during FY11. The base salary actually earned by Mr. Labrousse in U.S.
dollars, as shown in the Summary Compensation Table, is different due to fluctuations in the U.S. dollar to
Swiss franc exchange rate.
Performance-based cash compensation
Logitech’s annual performance-based bonuses, under a program established under the Logitech Management
Performance Bonus Plan (Bonus Plan), compensate executives based on achievement against the key financial
metrics of adjusted revenue and operating income, each of which is equally weighted. These metrics address both
‘‘top line’’ (adjusted revenue) and ‘‘bottom line’’ (operating income) corporate financial goals, both of which the
Committee believes are critical to driving long-term shareholder value.
The Bonus Plan is designed to motivate and reward executives for above-target performance. These annual
performance-based bonuses represent a significant portion of each executive’s yearly cash compensation, ranging
from 40%-60% of annual targeted cash compensation. Payout under the incentive plan is variable, based on the
achievement against Logitech financial goals, and can range from 0% to 200% of the executive’s target incentive.
In fiscal year 2011, the Committee decreased the maximum payout under the plan from 300% to 200%, to reflect
market practice for our peer companies, who are identified under the heading “Competitive Considerations.”