Vistaprint 2011 Annual Report Download - page 123

In general, we grant equity compensation to our executive officers in the form of share options and
restricted share units that vest 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 the long-term interests of both the company and our shareholders, with equity awards
generating returns for our executives and employees as our share price increases. Our share options and
restricted share units also provide us with an important retention tool, as the equity grants vest over a four-
year period only if the officer continues to be employed by us on each vest date. The exercise price of all
share options we grant is 100% of the fair market value on the date of grant.
In fiscal 2011, we granted equity compensation awards to Mr. Keane, our Chief Executive Officer whose
role did not change during the year, that were designed to result in total cash and equity compensation in the
75th to 80th percentile range of our primary peer group, in line with the philosophy described above. However,
Ms. Blake, Ms. Cebula and Messrs. Ruotolo and Teunissen, who were promoted to new executive roles within
the fiscal year, received special equity compensation awards in connection with their promotions that resulted
in total compensation that was above the market in comparison with our peer companies. These special equity
awards were designed to recognize and reward each executive for his or her work that led to the promotion
and to retain each executive and align his or her interests with those of our shareholders over the long term.
Because Mr. Giannetto resigned as an executive officer in March 2011, he did not receive any equity
compensation awards during fiscal 2011.
Timing of Equity Grants
We grant equity awards to our executive officers annually in conjunction with our review of their
individual performance and the independent consultant’s compensation study. We generally conduct this review
at the regularly scheduled meeting of the Compensation Committee held in the fourth quarter of each fiscal
year. Accordingly, grants made in fiscal 2011 were approved at the May 2011 Compensation Committee
meeting. We typically make restricted share unit grants to employees who are not executive officers during our
first fiscal quarter after the conclusion of our performance review cycle in July of each year.
Long-Term Cash Incentive Compensation
The Compensation Committee grants long-term cash incentive awards to our executive officers pursuant
to four-year award agreements under the Performance Incentive Plan for Covered Employees approved by our
shareholders in November 2009. The long-term cash incentive awards reflect our pay-for-performance culture
and philosophy and are intended to enhance our ability to manage the number of shares available under our
equity compensation plans and to balance the focus on stock price appreciation created through equity awards
with cash awards based on the achievement of financial metrics that drive long-term company and shareholder
value creation.
Each long-term cash incentive award under the plan has a performance cycle of four fiscal years, and
each executive officer is eligible to receive 25% of his or her target total award for each fiscal year in the
performance cycle. At the beginning of each four-year performance cycle, the Compensation Committee
develops performance goals for each fiscal year within that specific cycle. We granted long-term cash incentive
awards to our named executive officers in fiscal 2010 and fiscal 2011 with performance goals based on
Vistaprint’s achievement of EPS targets expressed as dollar values in the low, medium and upper ranges. The
Compensation Committee uses the same definition of EPS for purposes of the long-term cash incentive awards
as it does for the annual cash incentive awards described above. We measure performance on an annual basis
and make payments for each fiscal year in the performance cycle based on the level of goal achievement for
that fiscal year. Actual payout levels can range from 0% to 250% of target award depending on the year.
Fiscal 2011 long-term cash incentives
2010-2013 Awards Granted in Fiscal Year 2010. Under the long-term cash incentive awards that the
Compensation Committee granted in fiscal 2010, each named executive officer is eligible to receive 25% of
his or her total award for each of our fiscal years ending June 30, 2010, 2011, 2012 and 2013 based on our
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