Vistaprint 2014 Annual Report Download - page 128

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EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
Executive Overview
Our success depends on our ability to attract and retain top talent in a competitive marketplace, and to motivate
that talent to achieve outstanding short- and long-term performance. Accordingly, our Compensation Committee, which
oversees the compensation program of our executive officers, designed an executive compensation program that is
intended to:
• provide an overall level of compensation that is competitive with the compensation levels of companies of similar
size, complexity, revenue, and growth potential to Vistaprint;
• reflect the desired caliber, level of experience, and performance of our executive team; and
• pay commensurate with Vistaprint’s performance, with total compensation weighted heavily toward performance-
based compensation that is tied to operating or stock performance.
Shareholder engagement. At our 2011 annual general meeting of shareholders, our shareholders voted in favor of
our executive compensation program for fiscal 2011 by a slim margin, with 50.4% of votes cast in favor of the
compensation program. By contrast, at our 2012 and 2013 annual general meetings of shareholders, our executive
compensation program for each fiscal year received more than 97% approval from our shareholders. We believe that
two major contributing factors to this dramatic increase in our shareholder approval levels were the collaborative
process in which we reached out to our major shareholders and our decision, based on shareholder feedback at the
2011 annual general meeting, not to provide excess parachute payment tax gross-up provisions in future agreements
with our executives, as described below. Based on our shareholders’ feedback in the collaborative outreach process
and our compensation philosophy, in fiscal 2012 we redesigned the long-term incentive compensation of our executive
officers to emphasize premium-priced share options, as described below. In 2013 and 2014, we conducted similar
collaborative processes in which we reached out to our major shareholders to update them on our ongoing executive
compensation program, which has not changed significantly from fiscal 2012.
No pay increase for Robert Keane. For fiscal 2014, the Compensation Committee did not increase Mr. Keane’s
compensation over his fiscal 2013 levels in order to maintain his annual cash compensation level at the 50th percentile
of our primary peer group as described below.
Pay for performance. The total compensation package for our executive officers is weighted heavily toward
compensation based on Vistaprint’s operating and share price performance. For fiscal 2014, our Chief Executive Officer
had 92% of his total compensation at risk through our cash and equity incentive programs, including an annualized
portion of his multi-year, premium-priced share options. Our annual and long-term cash incentive programs are
dependent on Vistaprint’s revenue and earnings per share performance, while our equity incentive programs are
dependent on the performance of our share price. Attainment of the annual and long-term cash incentives are based
on financial goals that the Compensation Committee believes are highly challenging, but achievable. For fiscal 2014,
the annual cash incentive payout, as calculated under the executive officers' award agreements, would have been
106.9%, but the Committee determined that Vistaprint's overall performance in 2014 did not support that payout.
Therefore, the Committee exercised its negative discretion to reduce the percentage to 98.2%, which was the same
payout percentage for the 2014 bonuses paid to Vistaprint's non-executive employees and which the Committee
believes better reflects the company's performance.
Redesign of our long-term compensation program. Based on our pay-for-performance compensation philosophy,
feedback from the Committee’s independent compensation consultant (Towers Watson), and our shareholders’
suggestions from the outreach process described above, the Compensation Committee redesigned the long-term
incentive component of our executive compensation program in late fiscal 2012. As a result of this redesign, we granted
to our executive officers multi-year, premium-priced share options designed to increase the emphasis on Vistaprint’s
long-term performance and our growth strategy using share price as the primary performance metric, and we did not
grant any long-term cash incentive awards to our executive officers for fiscal 2013 or 2014. The Compensation
Committee believes that the premium-priced share options provide strong alignment of performance-based
compensation with long-term shareholder value creation, significant downside risk for the executives if Vistaprint
performs poorly, and significant upside potential if Vistaprint performs well, through the following features: