Vistaprint 2014 Annual Report Download - page 129

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25
• The options have an exercise price of $50.00 per share, which was significantly higher than the closing price of
Vistaprint’s ordinary shares on NASDAQ on the grant dates.
• Robert Keane, our Chief Executive Officer, has an additional share price hurdle before he can realize any returns
from his premium-priced options, which is that, in addition to the vesting schedule described below, he can exercise
his options only on dates when the high price per share of Vistaprint’s ordinary shares on NASDAQ is at least
$75.00.
• To emphasize long-term performance, the options vest over seven years. They have an eight-year term.
• Our Supervisory Board has passed resolutions that, until fiscal 2016 at the earliest, Vistaprint shall not grant any
additional long-term incentive award in any form (including equity or long-term cash awards) to Mr. Keane or any
additional share options to our other current executive officers.
Discontinuation of certain pay practices. Some of our major shareholders consider the inclusion of excess parachute
payment tax gross-up provisions in our executive retention agreements with our executives to be a problematic pay
practice. Accordingly, our Compensation Committee decided that, after August 1, 2012, we will no longer include such
tax gross-up provisions in the executive retention agreements that we enter into with our future executives.
Compensation Committee Approach
In determining the compensation of our executive officers, our Compensation Committee takes into account the
analysis and recommendations of the Committee’s independent compensation consultant (currently Towers Watson),
data from the “primary” comparison peer group described below, published compensation survey data, and detailed
tally sheets summarizing our executive officers’ current and historical compensation. The Compensation Committee
generally seeks to pay our executives total compensation (including base salary, annual cash incentive, and long-term
incentive awards) at the 75th percentile of our primary peer group for extraordinary performance and then applies its
own discretion to take into account any other factors it may deem relevant in any given fiscal year, such as general
economic conditions, the internal equity of compensation among our executives, each executive’s experience and
role, and individual performance. The Committee does not assign specific weights to particular factors but considers
them together in determining compensation. The Committee also reviews forecasts of compensation trends that may
be applicable to us in the future using a second “aspirational” comparison peer group that assumes annual revenues,
industry, growth rates, and market capitalizations comparable to Vistaprint in the future if Vistaprint were to achieve
its current business objectives.
With Towers Watson’s assistance, our Compensation Committee engages in a rigorous process each year to develop
a “primary” comparison peer group consisting of publicly traded firms that have characteristics that are currently
comparable to Vistaprint or comparable to where Vistaprint expects to be in the near future. Through a multi-step
process, the Committee considers a robust number of companies for inclusion in our peer group, including the
consideration of, among other attributes, each company’s ownership structure, industry groupings (including Global
Industry Classification Standards), annual revenue, and other financial metrics, as well as comparable companies
identified on the Dow Jones and Institutional Shareholder Services lists. For fiscal 2014, the initial financial criteria for
the primary comparison peer group included annual revenue in the range of $1.1 billion to $3.0 billion, and market
capitalization between $1.5 billion and $4.0 billion. The Compensation Committee also considered companies with
high growth and in the same general industry as Vistaprint. Each year, the Compensation Committee updates the peer
group selection criteria and the members of the primary peer group to add new companies that meet the criteria and
remove companies that no longer meet the criteria or that were acquired or ceased doing business. For fiscal 2014,
the primary peer group consisted of the following 23 companies:
Proxy Statement