Logitech 2012 Annual Report Download - page 138

Overview of Factors Considered by Committee
The Compensation Committee considers a variety of factors when determining total executive
compensation, including:
• Competitive considerations.
• Subjective elements, such as the scope of the executive’s role, experience and skills, the individual’s
performance during the prior fiscal year and potential for future contribution to Logitech.
• The performance of Logitech in the prior fiscal year.
• Logitech’s performance relative to the Company’s compensation peer group and the overall
technology industry.
• Accrued and realized gains from past equity incentive awards.
Competitive considerations
We attempt to compensate our executive officers competitively relative to industry peers. Both peer group
and broader industry compensation survey data is used by our Compensation Committee when setting Logitech’s
executive compensation, as well as to assist the Compensation Committee in the evaluation of the design of bonus
plan and equity compensation programs.
Prior to the start of fiscal year 2012, the Compensation Committee asked the Committee’s independent
compensation consultant, Radford, to review the composition of Logitech’s compensation peer group,
which was established in partnership with Fred W. Cook Consulting in March 2008, and re-evaluated by
Fred W. Cook in March 2010, to ensure the companies included remained appropriate for Logitech’s use in executive
compensation benchmarking.
In February 2011, Radford evaluated the current compensation peer group and made recommendations based
on the criteria of (i) involvement in the PC-based consumer electronics industry, or (ii) revenues approximately
equal to Logitech’s and a presence near Silicon Valley in the San Francisco Bay Area. Although Logitech is a Swiss
company, Logitech primarily competes for executive management talent with technology companies in the United
States, and particularly in the high-technology area of Silicon Valley. As a result, our compensation peer group
consists primarily of U.S. public technology companies.
While the composition of the new compensation peer group remains substantially the same as our prior
peer group, Radford recommended, and the Committee approved, the removal of 6 companies whose revenues
were significantly above or below our target annual revenue range of $1 billion to $3 billion, and the addition of
5 companies who met our peer company criteria. Additionally, over the past 18 months, 4 of the companies in our
prior peer group were removed due to acquisition. For fiscal year 2012, the compensation peer group consisted of:
Activision Blizzard, Inc. Electronic Arts, Inc. Plantronics
Agilent Technologies, Inc. Intuit, Inc. Polycom, Inc.
Analog Devices, Inc. Lexmark International, Inc. SanDisk Corporation
Autodesk, Inc. NetApp, Inc. Take-Two Interactive
BMC Software, Inc. Nuance Communications, Inc. VeriFone Systems, Inc.
Brocade Communications Systems, Inc. NVIDIA Corporation
The Committee believes the updated compensation peer group is more representative of the companies with
which Logitech competes for talent and, accordingly, benchmarks its compensation against. The peer group used
in fiscal year 2012 has average annual revenues, net income and market capitalization that are closer to Logitech’s
current financial performance, than the peer group established in March 2008.
At the time the fiscal year 2012 executive compensation review was performed, in March 2012, Logitech
ranked at approximately the 40th percentile among the peer group for revenues, at approximately the 20th percentile
for market capitalization and below the 25th percentile for operating income.
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