Logitech 2011 Annual Report Download - page 120

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eligible to participate in the Company’s employee share purchase plans, which allow eligible employees to purchase
Logitech shares at a 15% discount from the market price of Logitech’s shares at the beginning or end of each six-
month offering period.
Health and welfare, and other local benefits. Health and welfare and other local benefits are offered to
employees based on the market practices and local law requirements of the various jurisdictions in which employees
are based. In a limited number of jurisdictions we offer defined benefit or defined contribution pension plans or
required severance benefits for employees.
Compensation Philosophy – Non-Executive Compensation
The key features of Logitech’s compensation philosophy for employees below the executive level are as
follows:
• Basesalaryshouldbeatapproximatelythemedianforcomparablecompaniesintheindustryandinthe
region where the employee is based.
• The totallevel ofat-riskcompensationshouldincreasewiththelevelof theemployee,toreflectthe
relative impact of the employee on the Company’s performance.
• High-performingemployeesshouldreceivesignificantlyhigherpotentialcompensationintheformof
equity incentive awards in order to help retain and motivate these employees.
• OtherthanforthecompensationofemployeesintheCompany’ssalesorganization,theperformance
measures under the Company’s short-term incentives in the form of cash bonuses, profit sharing, or
long-term equity incentive awards, should be based on the performance of the entire Logitech group,
or the performance of the Logitech group plus the performance of the employee’s department or unit,
rather than on the performance of the individual employee. This is primarily to encourage collaboration
among the Company’s employees.
• ForemployeesintheCompany’ssalesorganization,compensationshouldincludecommissionsbased
on the employee’s sales performance against sales quotas or targets. Approximately 30% to 40% of a
salesperson’s total target compensation is based on commissions. The Company believes this direct
linking of salesperson compensation to individual performance helps drive sales performance and
reflects competitive market practice.
• Equity incentive compensation is an important component of employee compensation. This reflects
market practice, especially in California’s Silicon Valley, where the Company has a significant presence,
but the Company also believes that equity incentive compensation is a key differentiator in attracting
and retaining employees in employment markets outside of the United States where, historically, equity
incentive compensation was not or is not common.
Compensation for employees below the executive level is established based on guidelines developed by the
Company’s compensation & benefits department, market practices, and assessment of individual performance
and potential for future contribution to Logitech by the employee’s manager and the Company’s human resources
department. The Compensation Committee of the Board provides oversight of compensation below the executive
level, reviews the yearly short-term incentive program design and performance measures, reviews and approves
the yearly long-term equity incentive award budget, and reviews and approves all long-term equity incentive award
grants.