Vistaprint 2007 Annual Report Download - page 137

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growth and earning per share growth (excluding share-based compensation) targets are exceeded by significant
margins. If either revenue growth or earnings per share performance falls short of target levels by a determined margin,
the actual bonus payout is zero. Although each executive officer is eligible to receive an award under the plan, the
granting of the awards to any individual or the officers as a group is entirely at the discretion of our Compensation
Committee.
As with base salary levels, named executive officers directly reporting to the CEO have the same target cash
bonus levels and their performance measures are the same, which results in identical actual payouts for each
named executive officer other than the CEO. This approach is intended to align executive compensation for
named executive officers with the same financial goals and to promote teamwork.
Equity-Based Compensation
Overview and Background
The equity award program is the primary vehicle for offering long-term incentives and is a key retention
tool. We currently use two equity-based compensation vehicles: time-based vesting share options and time-based
vesting restricted share units. In general, grants made to named executive officers are in the form of share
options. The Committee believes that granting share options is the best way to motivate the named executive
officers to manage the company in a manner that is consistent with our long term interests and those of our
shareholders, as share options will generate returns for executives only if our share price increases. However,
because of the change to the accounting treatment of share-based compensation that resulted in all share option
grants made after July 1, 2005 bearing non-cash compensation charge and because the Compensation Committee
believes it is important to use compensation vehicles that are most valued by employees, the Compensation
Committee also may grant restricted share units to named executive officers.
Executives and employees may be granted equity compensation both at the time of hire and annually as part
of a retention grant program. In fiscal 2007, named executive officers received share options as part of the annual
retention program. New executive hires are generally offered a mix of both share options and restricted share
units at the time of hire. The Compensation Committee has determined that all non-executive employees are
eligible to receive restricted share units at the time of hire. Non-executive employees are also eligible to receive
additional restricted share unit grants as part of the annual retention grant program.
While share prices may reflect corporate performance over the long-term, the Compensation Committee
recognizes that other factors, such as general economic conditions and varying attitudes among investors toward
the stock market, in general, and specific industries and/or companies in particular, may significantly affect share
prices at any point in time. Accordingly, the annual base salary and cash bonus components of the executive
compensation program emphasize current company performance and the realization of defined financial
objectives that are independent of short-term fluctuations in share price, which may be affected by general stock
market conditions and other factors beyond the control of our named executive officers.
Share Awards Granted
Share Options for Executives
Equity compensation is a significant portion of each named executive officer’s total direct compensation
package. Share options are granted to our named executive officers based on assessment of past performance, the
importance of retaining their services, the potential for their performance to help us attain long-term goals, and
competitive peer group data. The Compensation Committee worked with Pearl Meyer to analyze the competitive
practices of the primary peer group to determine individual share option awards. Share options are granted with
an exercise price equal to the closing price of the Company’s common shares on the date of grant and vest
ratably over a four year period.
Proxy Statement
21