Logitech 2015 Annual Report Download - page 80

Compensation Report for Fiscal Year 2015
– Proxy Statement | 70
2015 Annual General Meeting Invitation, Proxy Statement
Compensation Element What This Element Rewards
Purpose and Key Features of
Element
Long-term incentives/equity
awards
• Achievement of corporate performance
objectives designed to enhance long-
term shareholder value and attract,
retain, motivate, and reward executive
officers over extended periods
for achieving important corporate
objectives.
• Provide a variable “at risk” pay
opportunity that aligns executive and
shareholder interests through annual
equity awards that vest over multiple
years.
• Because the ultimate value of these
equity awards is directly related to the
market price of our registered shares,
and the awards are only earned over
an extended period of time subject to
vesting, they serve to focus management
on the creation and maintenance of long-
term shareholder value.
• Performance-based equity links
compensation to key financial metrics,
such as growth and profitability, that
requires strong performance for target
or any substantial vesting to occur, and
provides an extraordinary payout if
performance significantly exceeds that
of the objective or the benchmark group.
• Vesting requirements promote retention.
Our executive officers also participate in the standard
employee benefit plans available to most of our employees.
In addition, during fiscal year 2015, our executive officers
were eligible for post-employment (severance or change
in control or both) payments and benefits under certain
circumstances. Each of these compensation elements is
discussed in greater detail below, including a description
of the particular elements and how each element fits into
our overall executive compensation and a discussion
of the amounts of compensation paid to our executive
officers in fiscal year 2015 under each of these elements.
Base Salary
We believe that a competitive base salary is a necessary
element of our executive compensation program, so
that we can attract and retain a stable management
team. Base salaries for our executive officers are also
intended to be competitive with those received by other
individuals in similar positions at the companies with
which we compete for talent, as well as equitable across
the executive team.
Generally, we establish the initial base salaries of our
executive officers through arm’s-length negotiation at the
time we hire the individual executive officer, taking into