Logitech 2012 Annual Report Download - page 124

• Organizational Changes. The past 12 months have seen significant changes in our executive officer
group. Mr. Quindlen, Logitech’s former President & Chief Executive Officer, resigned from Logitech
effective July 27, 2011. Upon Mr. Quindlen’s departure, Mr. De Luca, Logitech’s Chairman of the Board
and former Chief Executive Officer, was appointed to the role of acting President and Chief Executive
Officer. In April 2012, Logitech appointed Bracken Darrell to the role of President with the expectation
that he will succeed Mr. De Luca as Chief Executive Officer in January 2013. As part of our fiscal year
2013 Q1 restructuring, Mr. Heid’s role as Senior Vice President of Worldwide Sales and Marketing
was eliminated and he left the Company. As part of that same restructuring, Mr. Labrousse’s roles as
Executive Vice President of the Products Group and President of Logitech Europe were eliminated, he
ceased to be an executive officer and he assumed the role of Senior Vice President, Consumer Computing
Platform Group.
• No Vesting of Prior Performance-Based Stock Units. In fiscal year 2012, Logitech’s performance
resulted in a total shareholder return, or TSR, that was below the overall market. As a result, executive
officers received no shares, and therefore no actual delivered value, from the performance-based stock
units, or PSUs, granted June 2009 whose two- year performance period ended in fiscal year 2012,
because the minimum TSR performance threshold was not met. We believe this appropriately reflects
our pay for performance philosophy and our focus on aligning our executive officers’ compensation
with providing above average performance for our shareholders.
• Effective Compensation Program Design. The Compensation Committee believes the design of our
executive compensation programs has and will continue to meet our goal of providing our executives
with market competitive compensation packages that provide for above market rewards when Logitech
outperforms our internal goals, and limited rewards when Logitech’s performance does not meet those
goals. The balance we have built between fixed compensation (base salary), short-term incentives
(annual incentive bonus program), and long-term incentives (equity) ensures that, while our executives
received no short-term incentives in fiscal year 2012, they received market competitive base salaries,
and have every opportunity to receive significant rewards from their long-term incentives if they are
able to deliver above market performance in the coming years. Looking forward, we fully expect
Logitech’s leadership team to drive a turnaround of the Company’s performance that will reward both
our shareholders and the executives who help to deliver improved results.
EXECUTIVE COMPENSATION OBJECTIVES AND PHILOSOPHY
Logitech’s executive compensation programs have been designed to:
• be competitive with comparable companies in our industry and in the region where the executive
is based;
• maintain a balance between fixed and variable compensation and place a significant portion of total
compensation at risk based on the Company’s performance, while maintaining controls over inappropriate
risk-taking;
• align executive compensation with shareholders’ interests by tying a significant portion of compensation
to increasing share value;
• support a performance-oriented environment that rewards superior performance; and
• reflect the Compensation Committee’s assessment of an executive’s role and past performance through
base salary and short-term cash incentives, and his or her potential for future contribution to Logitech
through long-term equity incentive awards.
An important component of Logitech’s executive compensation philosophy is to pay executives at or near
the median of other companies that compete for similar executive talent, and that individual performance and
importance to Logitech should be reflected in the compensation of each executive. However, while compensation is
a central part of attracting, retaining and motivating the best executives and employees, we believe it is not the sole
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