Vistaprint 2007 Annual Report Download - page 136

Download and view the complete annual report

Please find page 136 of the 2007 Vistaprint annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 156

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156

comparison peer group consisted of publicly traded firms based upon annual revenue, industry, rate of growth,
and market capitalization comparable to those of VistaPrint at the time of review. The Compensation Committee
also analyzed and reviewed the results of a second, “aspirational” comparison peer group in order to understand
the compensation practices of companies that may in the future be comparable if we continued to experience
significant growth. The Compensation Committee considered the findings and recommendations of Pearl Meyer
as it determined named executive officer compensation for fiscal 2007 and based its determination of
compensation packages upon the review of the primary peer group of similar sized firms. The Compensation
Committee believes that our executive compensation program provides an overall level of compensation that is
competitive with the level of compensation of companies of similar size, complexity, revenue and growth
potential, and that the executive compensation program also reflects the desired caliber, level of experience and
performance of our executive team.
Compensation Components for Executives
The principal elements of our executive compensation program for named executive officers consist of base
salary, cash bonus, non-qualified share options and restricted share units. Named executive officers also
participate in the standard health and welfare benefits applicable to all of our employees, including matching
contributions to a defined contribution (401(k)) retirement plan, health insurance benefits, and contributions
toward life and disability insurance premiums. We also reimburse the CEO for the expense of an executive level
health club membership.
The Compensation Committee has established a “pay-for-performance” model for our named executive
officers. Target cash compensation (base salary plus target cash bonus) approximates the 30th to 40th percentiles
of the primary peer group. If the established quarterly and annual targets are exceeded, actual cash compensation
(base salary plus actual cash bonus) can approach the 45th to 55th percentile of this peer group. Total direct
compensation levels (base salary plus target cash bonus plus target annual equity incentives), target the 70th to
80th percentiles of the peer group. Outstanding long term performance could result in actual compensation in the
90th percentile or above.
Cash Compensation
Base Salary
The Compensation Committee established base salary compensation levels for named executive officers
based on external market data and overall compensation philosophy. To establish base salaries for fiscal 2007,
the Committee reviewed Pearl Meyer’s recommendations with respect to the salary compensation of officers
with comparable qualifications, experience and responsibilities at companies in the primary peer group. The
Committee set the CEO’s base salary based on its analysis of the primary peer group data. The Committee also
reviewed peer data for base salary levels for each of the executive officers. The Committee has chosen to take an
egalitarian approach to setting the cash compensation levels for the named executive officers directly reporting to
the CEO, such that all named executive officers receive the same base salary. This approach was chosen for
several reasons: to create a sense of team, to demonstrate that we value the contribution of each of our executive
leaders, and for simplicity.
Incentive Bonuses
The cash incentive bonus plan is designed to reward executives for the achievement of quarterly and annual
financial goals, specifically, revenue growth and earnings per share growth. Revenue growth and earnings per share
growth targets are set annually as part of our comprehensive strategic planning and budgeting process. The
Compensation Committee believes the goals are highly challenging yet achievable. Target bonus levels are set by the
Compensation Committee based on analysis of primary peer group data and based on our pay-for-performance
philosophy. Bonuses are based 50% on the achievement of target revenue growth and 50% based on the achievement
of earnings per share growth. The plan allows for a maximum payout of 250% of the target bonus if both revenue
20