iRobot 2008 Annual Report Download - page 21

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substantial achievement of the fundamental revenue target, the company’s strengthened balance sheet and
overall organizational improvements, the extraordinary global economic conditions, the lack of any cash
incentive compensation paid pursuant to the 2007 Senior Executive Incentive Compensation Plan, and the
comparable cash incentive compensation of companies within our peer group. Based on these factors, the
compensation committee determined that our chief executive officer, chief financial officer, president,
government & industrial robots, senior vice president and general counsel and vice president, financial controls
and analysis should receive $105,714, $122,504, $153,380, $88,954 and $39,928, respectively, which
corresponds to 33.5%, 100.0%, 73.4%, 63.0% and 69.9%, respectively, of each executive’s total target cash
incentive compensation amount.
Because Mr. Leahy joined us in June 2008, after a substantial portion of the year had passed, and in
accordance with the terms of his employment offer letter, the compensation committee provided that his cash
incentive compensation would be paid at 100% of his threshold bonus amount.
In addition, pursuant to Ms. Greiner’s Employment Separation Agreement, a bonus payment of $102,913
was authorized by the compensation committee. Similarly, pursuant to Mr. Clear’s Transitional Services and
Departure Agreement, a bonus payment of $27,791 was approved for Mr. Clear.
Long-Term Incentives
Executive officers (and other employees) are eligible to receive restricted stock, stock option grants and
other stock awards that are intended to promote success by aligning employee financial interests with long-
term shareholder value. These stock-based incentives are based on various factors primarily relating to the
responsibilities of the individual officer or employee, their past performance, anticipated future contributions
and prior option grants. In general, our compensation committee bases its decisions to grant stock-based
incentives on recommendations of management and the compensation committee’s analysis of peer group
compensation information, with the intention of keeping the executives’ overall compensation, including the
equity component of that compensation, at a competitive level with the comparator companies reviewed by the
compensation committee in the technology and robotics industries. Our compensation committee also
considers the number of shares of common stock outstanding, the number of shares of common stock
authorized for issuance under its equity compensation plans, the number of options and shares held by the
executive officer for whom an award is being considered and the other elements of the officer’s compensation,
as well as our compensation objectives and policies described above. During fiscal year 2008, stock options
and deferred stock awards were granted to our named executive officers. As with the determination of base
salaries and short term incentive payments, the compensation committee exercises subjective judgment and
discretion in view of the above criteria.
Other Compensation
We also have various broad-based employee benefit plans. Our executive officers participate in these
plans on the same terms as other eligible employees, subject to any legal limits on the amounts that may be
contributed or paid to executive officers under these plans. We offer a 401(k) plan, which allows our
employees to invest in a wide array of funds on a pre-tax basis. We do not provide pension arrangements or
post-retirement health coverage for our named executive officers or other employees. We also maintain
insurance and other benefit plans for our employees. Executive officers receive higher life, accidental death
and dismemberment and disability insurance benefits than other employees. In addition, one executive officer
receives amounts allocable to use of our corporate apartment. We also enter into executive agreements with
our executive officers providing for certain severance benefits which may be triggered as a result of the
termination of such officer’s employment under certain circumstances. We offer no perquisites, other than the
use of our corporate apartment, that are not otherwise available to all of our employees.
Executive Agreements
We entered into executive agreements with each of our executive officers. The executive agreements
provide for severance payments equal to 50% of such officer’s annual base salary, as well as certain continued
health benefits, in the event that we terminate his or her employment other than for cause. In addition, these
19
Proxy Statement