iRobot 2015 Annual Report Download - page 45

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Proxy Statement
In March 2014 we began granting PSUs and in March 2015, we again granted our PSUs to our named
executive officers, using a mix of 50% restricted stock units, 25% PSUs and 25% stock options. The
compensation and talent committee believes a mix in our long-term equity awards between stock options,
restricted stock units and PSUs aligns the incentives of our executives with the interests of our stockholders and
the long-term performance of the Company by directly tying a significant portion of the value that may be
realized from our equity compensation to the performance of the Company and to an increase in our stock price.
Long-Term Equity Components
Stock Options
25%
Performance-
Based
50%
PSUs
25%
RSUs
50%
Time-
Based
50%
The compensation and talent committee expects the mix of long-term equity vehicles to evolve, as needed,
in coming years to continue to best align and support our longer-term business strategy.
The Company’s and the compensation and talent committee’s goals for selecting metrics for the PSU
component of the long-term incentive program include:
• Alignment with business strategy;
• Alignment with stockholder interest in improving long-term business fundamentals;
• Correlation with total stockholder return; and
• Complementary to our short-term incentive metrics.
After a thoughtful process and consideration of various metrics, the compensation and talent committee
determined that operating income percent (with a threshold requirement for a minimum amount of revenue)
continued to be the optimal initial metric for our PSU component. We believe operating income percent is an
excellent measure of the underlying profitability of the enterprise and it has historical correlation with total
stockholder return. Operating income percent is also a regularly reported financial measure, is understood by our
investor base, and can be reasonably forecasted over the relevant performance period. We believe operating
income percent in our long-term incentives coupled with the revenue component of our short-term incentives
provides strong executive focus on important short- and long-term business drivers.
For the PSUs granted in 2014 and 2015, the number of shares actually earned at the end of the three-year
period will range from 0% to 100% of the target number of PSUs granted based on the Company’s performance
Notice of Annual Meeting of Stockholders and iRobot 2016 Proxy Statement
37