Vistaprint 2009 Annual Report Download - page 142

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compensation of the named executive officers as compared to two peer groups of companies. DolmatConnell
developed, with Compensation Committee oversight, a “primary” comparison peer group consisting 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. DolmatConnell also developed a second “aspirational” comparison peer group,
consisting of companies whose annual revenues, growth rates and market capitalizations would be comparable to
Vistaprint in the future if Vistaprint achieved its current business objectives. The Compensation Committee
reviewed the analysis of the aspirational peer group in order to forecast future compensation trends that may be
applicable to us if we experience growth rates that are in line with our expectations. The Compensation Committee
considered the findings and recommendations of DolmatConnell as it determined named executive officer
compensation for fiscal 2009 and based its determination of compensation packages upon the review of the primary
peer group of similar sized firms. The primary peer group consists of: Akamai Technologies, Ariba, Blue Nile,
Digital River, Ennis, Equinix, Fair Isaac, Global Payments, GSI Commerce, Monster Worldwide, Netflix, Open
Text, priceline.com, RealNetworks, SAVVIS, Schawk, United Online and ValueClick.
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, annual cash incentive and a Long-Term Incentive Program, or LTIP. The base salary and annual cash
incentive 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, while the
LTIP focuses on longer term objectives. In fiscal 2009, the elements of compensation comprising the LTIP
consisted of stock options and restricted share units. Beginning in fiscal 2010, we are adding to the LTIP long-
term incentive cash awards under our Performance Incentive Plan for Covered Employees. Named executive
officers also participate in the standard health and welfare benefits applicable to our employees in their
geographic home locations.
The Compensation Committee has established a “pay-for-performance” model for our named executive
officers, with the total compensation package for fiscal 2009 weighted toward equity compensation. For fiscal
2009, target cash compensation (base salary plus target cash incentive) for our named executive officers
approximates the 25th to 50th percentiles of the primary peer group. Total direct compensation levels (base
salary plus target cash incentive plus annual equity incentives) approximate the 50th to 75th percentiles of the
peer group. As outlined by our compensation philosophy, the named executive officers have a significant portion
of their compensation at risk through our annual cash incentive plan and the LTIP, which are based on financial
goals that the Compensation Committee believes are highly challenging but achievable.
Cash Compensation
Base Salary
Base salary is used to recognize the experience, skills, knowledge and responsibilities of all employees,
including our executives. The Compensation Committee established base salary compensation levels for named
executive officers based on external market data and our overall compensation philosophy. To establish base
salaries for fiscal 2009, the Committee reviewed DolmatConnell’s recommendations with respect to the salary
compensation of officers with comparable qualifications, experience and responsibilities at companies in the
primary peer group. In addition to external market data, the Committee also considered the executive’s role in the
organization, experience within the role, individual performance and internal equity in determining individual
base salary levels. The Committee does not assign specific weights to particular factors but considers them
together in determining base salaries.
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