iRobot 2008 Annual Report Download - page 19

• the competitiveness of the compensation packages relative to the selected benchmarks as highlighted by
the independent compensation consultant’s analysis.
The compensation committee determines compensation for our chief executive officer using the same
factors it uses for other executive officers, placing relatively less emphasis on base salary, and instead, creating
greater performance-based opportunities through long-term equity and short term cash incentive compensation,
which we believe better aligns our chief executive officer’s interests with our success and the interests of our
stockholders. In assessing the compensation paid to our chief executive officer, the compensation committee
relies on both information from our selected benchmarks and its judgment with respect to the factors described
above.
Elements of Compensation
Our executive compensation program consists of three primary elements: salary, long-term equity interest,
primarily in the form of stock options and restricted stock awards, and an annual cash incentive program based
on both corporate and, if appropriate, divisional performance. All of our executive officers also are eligible for
certain benefits offered to employees generally, including life, health, disability and dental insurance, as well
as to participate in our 401(k) plan. We also enter into executive agreements with our executive officers that
provide for certain severance benefits upon termination of employment following a change in control of the
Company.
Annual Cash Compensation
Base Salary. The compensation committee believes that our executive officers, including our chief
executive officer, are paid salaries in line with their qualifications, experience and responsibilities. Salaries are
structured so that they are at least comparable with salaries paid by the peer companies reviewed by the
compensation committee in the technology and robotics industry. We target base salaries for each of our
executives at the market median (50th percentile) in the technology and robotics industry and also take into
consideration many additional factors which we believe enable us to attract, motivate and retain our leadership
team in an extremely competitive environment. Salaries are reviewed generally on an annual basis.
Fiscal year 2007 demonstrated our ability to sustain growth while laying a strong foundation for
continued expansion. Under Mr. Angle’s leadership, we improved our results of operations, achieved record
revenues and gained momentum in areas of critical importance such as international market expansion and key
military programs. As a result, in 2008, Mr. Angle received salary compensation of $372,288. The increase in
Mr. Angle’s annual salary from $330,625 in 2007 to $378,769 was based on the compensation committee’s
consideration of the factors described above. Additionally, the decision to increase Mr. Angle’s base salary
was based on the compensation committee’s assessment that Mr. Angle’s 2007 salary was below the market
median salary for chief executive officers whose companies were included in the selected benchmarks and that
it would be appropriate to move towards more closely aligning Mr. Angle’s salary with the 50th percentile of
such benchmarks.
Fiscal year 2008 base salaries for our executive officers, other than Mr. Angle, were determined by the
compensation committee after considering the base salary level of the executive officers in prior years and
taking into account for each executive officer the amount of base salary as a component of total compensation.
Base salary levels for each of our executive officers, other than our chief executive officer, were also based
upon evaluations and recommendations made by our chief executive officer. These recommendations include
an assessment of the individual’s responsibilities, experience, individual performance and contribution to our
performance, and also generally take into account the competitive environment for attracting and retaining
executives consistent with our business needs.
In light of the considerations discussed above, for fiscal year 2008, the annual base salaries of our chief
executive officer, chief financial officer, president, government & industrial robots, senior vice president and
general counsel and vice president, financial controls and analysis were $378,769, $350,012, $325,000,
$284,875 and $230,000, respectively. In addition, the annual base salaries of our former officers including our
former chairman of the board and former chief financial officer were $330,625 and $278,200, respectively. We
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Proxy Statement