iRobot 2007 Annual Report Download - page 19

COMPENSATION AND OTHER INFORMATION
CONCERNING DIRECTORS AND OFFICERS
Compensation Discussion & Analysis
Overview
Our compensation philosophy is based on a desire to balance retention of executive talent with pay for
performance-based incentive compensation, which is designed to reward our named executive officers for
continued service and our sustained financial and operating performance. We believe that the compensation of
our named executive officers should align our executives’ interests with those of our stockholders and focus
executive behavior on the achievement of both near-term corporate targets as well as long-term business
objectives and strategies. It is the responsibility of the compensation committee of our board of directors to
administer our compensation practices to ensure that they are competitive and include incentives that are
designed to appropriately drive our performance, including our revenue and earnings growth. Our compensa-
tion committee reviews and approves all of our executive compensation policies, including executive officer
salaries, bonuses and equity awards.
Objectives of Our Compensation Programs
Our compensation programs for our executive officers are designed to achieve the following objectives:
• to provide competitive compensation that attracts, motivates and retains the best talent and the highest
caliber executives to serve us and help us to achieve our strategic objectives;
• to align management’s interest with our success;
• to connect a significant portion of the total potential cash compensation paid to executives to our annual
financial performance or the division, region or segment of our business for which an executive has
management responsibility by basing cash incentive compensation on corresponding financial targets;
• to align management’s interest with the interests of stockholders through long-term equity
incentives; and
• to provide management with performance goals that are directly linked to our annual plan for growth
and profit.
We believe that the compensation of our named executive officers should reflect their success as a
management team, rather than as individuals, in attaining key operating objectives — such as revenue growth
and gross profit improvement — as well as longer-term strategic objectives — such as invention and product
development.
We also believe that their compensation should not be based on the short-term performance of our stock,
whether favorable or unfavorable, but rather that the price of our stock will, in the long-term, reflect our
operating performance, and ultimately, the management of the company by our named executive officers. We
seek to have the long-term performance of our stock reflected in executive compensation through our stock
option and other equity incentive programs.
Methodologies for Establishing Executive Compensation
The compensation committee, which is comprised entirely of independent directors, reviews the compen-
sation packages for our named executive officers, including an analysis of all elements of compensation
separately and in the aggregate. In determining the appropriate compensation levels for our chief executive
officer, the compensation committee meets outside the presence of all our executive officers. With respect to
the compensation levels of all other named executive officers, the compensation committee meets outside the
presence of all executive officers except our chief executive officer and our chairman. Mr. Angle, our chief
executive officer, annually reviews each other named executive officer’s performance with the compensation
committee.
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Proxy Statement