iRobot 2014 Annual Report Download - page 28

Download and view the complete annual report

Please find page 28 of the 2014 iRobot annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 152

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152

22
levels for our executive officers in fiscal 2014, 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,
• for each named executive officer, other than the chief executive officer, the evaluations and recommendations of the chief
executive officer, and
• 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, while placing greater emphasis on 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 in 2014 consists of three primary elements: base salary, an annual cash incentive, and
long-term equity interests, primarily in the form of stock options, time vesting restricted stock units and performance share units.
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 participation in our 401(k) plan. We have also entered into executive agreements with our
executive officers that provide for certain severance benefits upon termination of employment, including a termination in
connection with a change in control of the Company.
Base Salary
In 2014, the compensation committee believes our executive officers, including our chief executive officer, are paid salaries
in line with their qualifications, experience and responsibilities. Salaries are structured so they are within the range of salaries paid
by the peer companies reviewed by the compensation committee in the technology and robotics industry. We generally aim to set
base salaries for each of our executives between the 40th and 60th percentiles 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 generally reviewed 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
takes 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.
We believe the base salaries paid to our executive officers during our fiscal year 2014 helped to achieve our executive
compensation objectives. In addition, we believe that the base salaries of our named executive officers, which range from 19% to
36% as a percentage of total compensation, are set at an appropriate level to keep a significant portion of executive compensation
at risk as part of our compensation philosophy.
In February 2015, and as part of the annual review process while taking into account the considerations discussed above, the
compensation committee also approved base salary adjustments for 2015 also noted in the table below.