iRobot 2013 Annual Report Download - page 27

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determine alignment of pay and performance result in substantial differences in Company performance and how compensation is
valued and delivered to executives. Technology and technology/consumer products perform and pay reasonably different from
home builders, retailers and furniture distributors/manufacturers. The compensation committee takes all of these unique dynamics
into account annually when reviewing our peer group firms.
The following selection criteria, developed in conjunction with the compensation committee, which are thoroughly reviewed
and adjusted (as needed), were used to develop the comparative peer group used in assessing the competitiveness of our executive
compensation for purposes of fiscal 2013 compensation actions:
• Companies with revenues within a similar range and generally similar market capitalization;
• Companies within comparable industries that focus on high-tech products (e.g., information technology, consumer
durables, consumer services, aerospace/defense, capital goods, electronics equipment, instruments and components,
healthcare technology, etc.);
• Companies with highly-engineered products and complex technologies with multiple industry applications;
• Technology companies whose products contain both hardware and software components; and
• Companies with moderate to high sales growth and opportunity.
• Other criteria also considered include:
• Companies classified as “disruptive innovation;”
• Companies with products with brand recognition and/or disposable income “luxury” goods; and
• Companies with moderate margins and levels of research and development expense.
Due to changes in revenues, Esterline Technologies Group, Intuitive Surgical, Inc. and Trimble Navigation Ltd were
removed from the peer group, and Leapfrog Enterprises, Inc. and Netgear, Inc. were added to the 2013 peer group. The resulting
peer group consisted of the following 15 firms:
Accuray Incorporated Orbital Sciences Corporation
AeroVironment, Inc. Plantronics, Inc.
American Science and Engineering, Inc. SeaChange International, Inc.
Bruker Corporation Synaptics Incorporated
Cognex Corporation Tivo, Inc.
Leapfrog Enterprises, Inc. Universal Electronics, Inc.
Mercury Systems, Inc. Voxx International Corp.
Netgear, Inc.
These 15 companies, at the time of the analysis, had median annual revenues of $463 million and a median market
capitalization of $598 million, compared to our 2013 annual revenue of $487 million and year-end market capitalization of $1.0
billion.
We 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 2013, the compensation committee considered many factors in addition to the
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 compensation levels of each individual and of the named executive officers as a group,
• relative levels of pay among the executive officers,
• the amount of each component of compensation in the context of the executive officer's total compensation and other
benefits,
Proxy Statement