Logitech 2014 Annual Report Download - page 108

outperforms both our internal goals and the overall market, and limited rewards when Logitech’s performance does
not meet these objectives. Overall, our Compensation Committee has developed executive compensation programs
that it believes will provide an incentive to drive a turnaround of the Company’s performance that will reward our
shareholders and, as a result of these programs, will reward 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 by balancing annual and long-term performance;
• provide a balance between short-term and long-term objectives and results;
• align executive compensation with shareholders’ interests by tying a significant portion of compensation
to increasing share value;
• support a performance-oriented culture; 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 through long-
term equity incentive awards.
Logitech’s executive compensation philosophy is to pay executives at or near the median of other companies
that compete for similar executive talent, based on our compensation peer group and survey data, 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 or exclusive reason why exceptional executives or employees choose to join and stay at Logitech,
or why they work hard to achieve results for shareholders. In this regard, both the Compensation Committee and
management believe that providing a working environment and opportunities in which executives and employees
can develop, express their individual potential, and make a difference are also a key part of Logitech’s success in
attracting, motivating, and retaining executives and employees.
EXECUTIVE COMPENSATION PRACTICES
Logitech has employed a number of executive compensation practices that reflect its compensation philosophy:
• As shown in the chart below under the heading “Pay Mix”, the majority of executive officers’ potential
compensation is designed to be performance-based, using a variety of performance measures, including
measuring Logitech’s performance against Board-established fiscal and other targets for annual
incentive cash bonuses, and relative total shareholder return for performance-based equity awards.
• Logitech has clawback provisions that apply to its annual incentive cash plan and its equity awards
plans, which provide for the recovery of compensation by Logitech in certain events described below
under the heading “Recovery of compensation for restatement and misconduct”.
• Logitech does not allow executives or any of its employees to trade in derivatives of Logitech securities
or pledge equity awards.
• Logitech does not maintain any special vesting acceleration or payment arrangements that would be
triggered solely by a “change in control” of Logitech.
• Logitech does not provide special retirement benefits designed solely for executive officers.
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