iRobot 2008 Annual Report Download - page 18

With the input of our human resources department and compensation consultants, the chief executive
officer makes recommendations to the compensation committee regarding base salary levels, target incentive
awards, performance goals for incentive compensation and equity awards for named executive officers, other
than Mr. Angle. In conjunction with the annual performance review of each named executive officer in January
of each year, the compensation committee carefully considers the recommendations of the chief executive
officer when setting base salary, bonus payments under the prior year’s incentive compensation plan, target
amounts and performance goals for the current year’s incentive compensation plan, and any other special
adjustments or bonuses. In addition, the compensation committee similarly determines equity incentive awards,
if any, for each named executive officer.
Our compensation plans are developed, in part, by utilizing publicly available compensation data and
subscription compensation survey data for national and regional companies in the technology, defense,
household durables and robotics industries. We believe that the practices of this group of companies provide
us with appropriate compensation benchmarks, because these companies have similar organizational structures
and tend to compete with us to attract executives and other employees. For benchmarking executive
compensation, we typically review the compensation data we have collected from the complete group of
companies, as well as a subset of the data from companies with revenues, numbers of employees and market
capitalizations similar to our profile.
With respect to 2008 base salary, cash incentive compensation, and long-term incentives, we reviewed
companies with similar-sized revenues of greater than $160 million and less than $630 million and market
capitalizations of between $275 million to $1.1 billion, in particular: Aerovironment, Inc., Argon ST, Inc.,
Audiovox Corp., Axsys Technologies, Inc., Ducommun Incorporated, Force Protection Inc., Gencorp Inc.,
Genesis Microchip Inc., Heico Corp., LoJack Corporation, National Presto Industries Inc., Plantronics Inc.,
Raven Industires Inc., Syntax-Brillian Corp., Tivo, Inc. and Universal Electronics Inc.
The compensation committee also engaged a consultant, DolmatConnell & Partners, to help evaluate peer
companies for cash compensation and long-term incentive purposes, analyze applicable compensation data and
determine appropriate compensation levels for our named executive officers.
We will annually reassess the relevance of our peer group and make changes when judged appropriate.
We believe that the use of benchmarking is an important factor in remaining competitive with our peers and
furthering our objective of attracting, motivating and retaining highly qualified personnel.
The compensation committee reviews all components of compensation for named executive officers. In
accordance with its charter, the compensation committee also, among other responsibilities, administers our
incentive compensation plan, and reviews and makes recommendations to management on company-wide
compensation programs and practices. In setting compensation levels for our executive officers in fiscal 2008,
the compensation committee considered many factors in addition to benchmarking described above, including,
but not limited to:
• the scope and strategic impact of the executive officer’s responsibilities,
• our past business and segment performance and future expectations,
• our long-term goals and strategies,
• the performance and experience of each individual,
• past salary levels of each individual and of the named executive officers as a group,
• relative levels of pay among the executive officers,
• the amount of base salary in the context of the executive officer’s total compensation and other
benefits,
• for each named executive officer, other than the chief executive officer, the evaluations and recommen-
dations of the chief executive officer, and
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