Vistaprint 2009 Annual Report Download - page 144

Long-Term Incentive Program
Overview and Background
The Long-Term Incentive Program, or LTIP, is the primary vehicle for focusing our executives on long-
term performance and aligning their interests with those of our shareholders. We may grant executives and
employees long-term incentive compensation, in the form of cash-based and equity-based compensation, both at
the time of hire and annually as part of a retention grant program.
Share Options and Restricted Share Units for Executives
In general, equity compensation grants made to the named executive officers are in the form of share
options and restricted share units. The value of the equity grants made to named executive officers is determined
by evaluating the peer group analysis and identifying the grant value required to ensure that total target direct
cash and equity compensation is in the 70-80th percentile range under scenarios of exceptional performance
relative to the historical performance of the comparison peer group. Share options are granted at 100% of fair
market value on the date of grant. Both share options and restricted share units vest ratably over a four year
period.
The Compensation Committee believes that granting equity awards is an effective way to motivate our
executives to manage the company in a manner that is consistent with our long term interests and those of our
shareholders, with equity awards generating returns for our executives and employees as our share price
increases. Because our share options and restricted share units vest over four years, these incentive vehicles also
provide us with an important retention tool, as the equity grants vest only if the officer continues to be employed
by us on each vest date. To reflect the more balanced risk profile of our restricted share units, the Committee
granted fewer total shares under share options and restricted share units than the Committee would have if it had
granted only share options.
Equity compensation is a significant portion of each named executive officer’s total direct compensation
package. The Compensation Committee grants share options and restricted share units to our named executive
officers based on its assessment of the officers’ 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 DolmatConnell to analyze the market practices of the primary peer group
to determine competitive equity awards.
Restricted Share Units for Employees
The framework for providing restricted share units to employees follows a similar methodology to equity
grants to executives and is based upon market practices for our industry, size and geographic locations. Time-
vested restricted share units are intended to align the employees’ interests with those of our shareholders and
serve as a retention tool. The restricted unit awards vest ratably over a four year period.
Timing of Grants
We grant equity awards to our named executive officers annually in conjunction with our review of their
individual performance and the independent consultant’s compensation study. The intent is to conduct this
review at the regularly scheduled meeting of the Compensation Committee, held in conjunction with the
quarterly Supervisory Board meeting in the fourth quarter of each fiscal year. Accordingly, fiscal 2009 grants
were made at the May 2009 Compensation Committee meeting. Restricted share unit grants to employees who
are not named executive officers typically are made during our performance review cycle which concludes in
June each year.
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