iRobot 2009 Annual Report Download - page 20

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• 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 awards of restricted stock units, 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, including a
termination 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 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 (described below) that 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.
The compensation committee reviewed the base salaries for each of our executive officers, taking into
account 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. With respect to each of our executive officers, other
than Mr. Angle, Mr. Angle provided a detailed evaluation and recommendation related to base salary
adjustments, if any. However, due to the macroeconomic conditions, which included a great amount of
uncertainty during the compensation committee’s evaluation of executive compensation during the first fiscal
quarter of 2009, it was determined that executive officers would not receive salary adjustments during 2009, a
policy applied across-the-board to our workforce.
In light of the considerations discussed above, for fiscal year 2009, the annual base salaries of our chief
executive officer, chief financial officer, president, home robots, president, government & industrial robots, and
senior vice president and general counsel were $378,769, $350,012, $325,000, $325,000 and $284,875,
respectively, which are the same levels of base salaries paid to our executive officers in 2008, except for the
president, home robots, who started on March 30, 2009. We believe that the base salaries paid to our executive
officers during our fiscal year 2009 helped to achieve our executive compensation objectives, compare
favorably to our peer group and, in light of our overall compensation program, are within our target of
providing total compensation at the market median.
Cash Incentive Compensation
The compensation committee believes that some portion of overall cash compensation for executive
officers should be “at risk,” i.e., contingent upon successful achievement of significant financial and business
objectives and implementation of our business strategy. For our named executive officers, including our chief
executive officer, the granting of cash incentive payments is based on an evaluation of achievement against
predetermined financial and operational metrics in accordance with our Senior Executive Incentive Compensa-
tion Plan that was adopted by the compensation committee. Target cash incentives for named executive
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