DEF 14A of Logitech International S.A.
Filed Jul 25, 2023 · FY20230001032975-23-000054
Identification and Evaluation of Nominees for Directors
Identification and Evaluation of Nominees for Directors Our Nominating and Governance Committee uses a variety of methods for identifying and evaluating nominees for director. Our Nominating and Governance Committee regularly assesses the appropriate size and composition of the Board of Directors, the needs of the Board of Directors and the respective Committees of the Board of Directors, and the qualifications of candidates in light of these needs. Candidates may be identified through search firms and also may come to the attention of the Nominating and Governance Committee through shareholders, management, or current members of the Board of Directors. The evaluation of these candidates may include information provided to the Committee, discussions with persons familiar with the candidate, an interview of the candidate or other actions the Committee deems appropriate, and typically includes the use of paid third parties to review candidates to ensure the nominees have appropriate qualifications and skills.
Executive Compensation Highlights
Executive Compensation Highlights Enhancements to Our Compensation Program In response to our shareholder engagement process (beginning with feedback we received in 2019 as discussed further below), we committed to move all executive officers' equity compensation to 100% PSUs. Due to the requirements and limitations of our Group Management Team Compensation Budget under our Articles of Incorporation and Swiss corporate law, we achieved that in fiscal year 2023. In the interim we took the following actions: •In fiscal year 2021, we shifted our CEO's equity compensation to 100% PSUs. •In fiscal year 2022, we changed the vesting of the service-based restricted stock units ("RSUs") granted to our executive officers (other than the CEO who no longer received RSUs) to 3-year cliff vesting rather than the 4-year annual vesting used in awards granted in fiscal year 2021. •Beginning in fiscal year 2023, we shifted the equity compensation of our remaining executive officers to 100% PSUs. Commitment to ESG Beginning in fiscal year 2022, and continuing through our current fiscal year 2024, we have incorporated an ESG scorecard that counts towards 10% of our annual incentive plan. The ESG scorecard is assessed as a composite based on five dimensions: net carbon reduction, carbon labeling, renewable electricity, design for sustainability principles, and external metric reporting. See 2023 Performance Results and Bonus Decisions below for details of these five dimensions for fiscal year 2023.
Executive Compensation Highlights
| OUR RESPONSE TO SHAREHOLDER FEEDBACK | | | | WHAT WE HEARD | OUR ACTIONS | WHY | | Some of our shareholders indicated they prefer that our CEO's long-term incentive awards be performance-based. | Granted our CEO 100% PSUs since fiscal year 2021 and eliminated use of service-based RSUs for our CEO. | To further strengthen the alignment with shareholders' interests and the pay-for-performance connection. | | Some of our shareholders indicated they are concerned with the use of service-based long-term incentive awards that vest in less than 3 years or without performance criteria. | Granted our CEO 100% PSUs since fiscal year 2021. Beginning in fiscal year 2023, all executive officers were granted 100% PSUs and the use of service-based RSUs in the annual grant was eliminated for all executive officers. As an interim measure in fiscal year 2022, we granted our executive officers (other than the CEO who did not receive service-based RSUs) 60% PSUs with the remaining 40% granted as service-based RSUs with 3-year cliff-vesting. | To align with our CEO and to further strengthen the alignment with shareholders' interests and the pay-for-performance connection. | | Some of our shareholders indicated they prefer one-off or replacement awards to be granted with performance conditions. | As a general practice we do not grant one-off awards without performance conditions. However, we do consider one-off awards when we hire executives to replace forfeited equity from their prior employer as permitted under Swiss corporate law. | As a Swiss company, our compensation practices are in compliance with Swiss corporate law which allows replacement of forfeited compensation on a like-for-like value basis. | | Some of our shareholders are concerned that the absolute level of compensation for our CEO is too high. | Each year the Compensation Committee engages compensation consultants to provide information and analysis on our compensation program and to assist them in assessing the levels of overall compensation and each element of compensation for our CEO and other executive officers. | While the compensation levels and pay mix may differ from Swiss standards, the compensation levels of our CEO and other executive officers are in line with the tech market in Silicon Valley, where we compete for executive talent, and with our compensation peer group. |
Executive Compensation Highlights
| Named Executive Officer | FY 2023 Base Salary Increase from FY 2022 | FY 2023 Annual Bonus as a Percentage of Target Bonus | FY 2021-2023 PSU Vesting Level | FY 2023 Annual PSU Awards (Grant Date Approved Value(1)) | | Bracken Darrell | —% | —% | 198% | $7,500,000 | | Charles Boynton | n/a | 13% | n/a | n/a | | Prakash Arunkundrum | 5% | 25% | 198% | $1,700,000 | | Samantha Harnett | 11% | 25% | 198% | $1,700,000 | | Nate Olmstead | 7% | 13% | 198% | $1,900,000 |
Executive Compensation Highlights
(1)Reflects equity grant value approved by the Compensation Committee for each executive officer which may differ from the stock awards value reflected in the "Summary Compensation Table for Fiscal Year 2023" below. This Grant Date Approved Value was converted to a number of shares based on the accounting grant date fair value, rounded up to the nearest whole share, to determine the stock awards value. Emphasis on Performance-Based Compensation The annual compensation of our executive officers varies from year to year based on our corporate financial and operational results and individual performance. Our executive compensation program emphasizes “variable” performance-based pay over “fixed” pay and seeks to balance short-term and long-term incentives as well as performance-based and service-based incentives. In fiscal year 2023, the overwhelming majority (90%) of the target total direct compensation of our CEO consisted of performance-based pay, including cash eligible to be earned based on achievement of pre-established performance criteria under our annual bonus plan and performance-based equity awards granted as long-term incentives for which value is based on achievement of pre-established performance criteria. Fixed pay, primarily consisting of base salary, made up only 10% of our CEO’s target total direct compensation in fiscal year 2023. The following chart shows the percentages of target performance-based pay versus target "fixed" pay and the composition of long-term equity incentives awarded to our CEO for fiscal year 2023:
Executive Compensation Best Practices
| ü | Compensation Committee Independence – Our Board of Directors maintains a Compensation Committee comprised solely of independent directors. | | ü | Independent Compensation Committee Advisors – The Compensation Committee engages and retains its own independent advisors and reviews their independence annually. | | ü | Annual Compensation Review – The Compensation Committee conducts an annual review of our executive compensation philosophy and strategy, including a review of the compensation peer group and other information used for comparative purposes. | | ü | Compensation-Related Risk Assessment – The Compensation Committee conducts an annual evaluation of our compensation programs, policies, and practices, to ensure that they are designed to reflect an appropriate level of risk-taking but do not encourage our employees to take excessive or unnecessary risks that could have a material adverse impact on the Company. | | ü | Emphasize Performance-based Incentive Compensation – The Compensation Committee designs our executive compensation program to use performance-based short-term and long-term incentive compensation awards to align the interests of our executive officers with the interests of our shareholders. Beginning in fiscal year 2023, all executive officers were granted 100% PSUs and the use of service-based RSUs in the annual equity grant was eliminated for all executive officers. | | ü | Emphasize Long-Term Equity Compensation – The Compensation Committee uses equity awards to deliver long-term incentive compensation opportunities to our executive officers. These equity awards vest or may be earned over multi-year periods, which better serves our long-term value creation goals and retention objectives. | | ü | Limited Executive Perquisites – We generally do not provide perquisites or other personal benefits to our executive officers. The executive officers participate in our health and welfare benefit programs on the same basis as all of our employees. | | ü | Stock Ownership Policy – We maintain a stock ownership policy for our directors and executive officers which requires each of them to own a specified amount of our registered shares as a multiple of their base salary or annual board retainer. | | ü | Compensation Recovery Policy – We have adopted a policy that provides for the recoupment of bonus and other incentive compensation and equity compensation from our executive officers resulting from fraud or intentional misconduct of an executive officer or if the executive officer knew of the fraud or misconduct. When the final Nasdaq listing standards with respect to no-fault compensation recovery as required by the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”) are effective, we will update our policy to reflect those rules. | | ü | “Double-Trigger” Change of Control Arrangements in Equity Award Agreements – The post-employment equity compensation arrangements for our executive officers are based on a “double-trigger” arrangement that provides for acceleration of vesting of equity only in the event of (i) a change in control of the Company and (ii) a qualifying termination of employment. As noted below, we do not provide any cash payment related to termination of employment or change of control. | | ü | Prohibition on Hedging and Pledging – Under our Insider Trading Policy, we prohibit our executive officers from hedging any Company securities owned by them and from pledging any Company securities owned by them as collateral for a loan. | | ü | Succession Planning – Our Board of Directors reviews on an annual basis our succession strategies and plans for our most critical positions. |
Executive Compensation Best Practices
| û | No Severance or Change of Control Arrangements – To comply with Swiss corporate law we have no severance or change of control arrangements (other than acceleration of vesting of equity awards as provided in our equity award agreements) for our executive officers. | | û | No Special Retirement Programs – Other than our Section 401(k) plan generally available to all employees in the U.S., we do not offer defined benefit or contribution retirement plans or arrangements for our executive officers. | | û | No Tax “Gross-Ups” or Payments – We do not provide any “gross-ups” or tax payments in connection with any compensation element for our executive officers, other than for our standard relocation benefits. This means we do not provide any excise tax “gross-up” or tax reimbursement in connection with any change of control payments or benefits. | | û | No Unearned Dividends – We do not pay dividends or dividend equivalents on unvested or unearned restricted stock unit or performance-based restricted stock unit awards. | | û | No Stock Option Repricing – We do not reprice options to purchase our registered shares without shareholder approval. | | û | No Stock Option Awards – We do not grant stock option awards to our executive officers. |
Shareholder Engagement
Compensation Committee and other members of the Compensation Committee are also periodically involved in shareholder outreach and participated in such discussions in fiscal year 2022. The Compensation Committee considers this feedback when designing our compensation programs and making compensation decisions. In response to investor feedback since 2019, we have: ▪Continued to structure our compensation program to support a strong pay-for-performance alignment; ▪Changed the mix of long-term equity awards for our CEO to 100% PSUs with three-year cliff vesting beginning with fiscal year 2021; ▪Changed the mix of long-term equity awards for the rest of our executive officers to 100% PSUs with three-year cliff vesting beginning with fiscal year 2023; ▪As an interim measure, changed the vesting of service-based RSUs granted to our executive officers in fiscal year 2022 (other than the CEO who did not receive service-based RSUs) to 3-year cliff vesting; and ▪Added a strategic ESG component to our annual incentive plan in fiscal year 2022. In fiscal year 2023 we reached out to our top 20 institutional shareholders, representing over one-third of our outstanding shares. Following the changes we instituted in the prior years following shareholder feedback, we did not receive further compensation topics to address. We will continue to engage with our shareholders to gain valuable insights into the governance and compensation issues about which they care most and consider the results from this year’s and future advisory and binding votes on executive compensation. For more information regarding our annual Say-on-Pay proposal for fiscal year 2023 and our binding votes on aggregate compensation, see Proposal 2 – Advisory Vote to Approve Executive Compensation, Proposal 11 – Approval of Compensation for the Board of Directors for the 2023 to 2024 Board Year and Proposal 12 – Approval of Compensation for the Group Management Team for Fiscal Year 2025.
Role of the Compensation Committee
•The recommendations of our CEO (except with respect to his own compensation) as described below. The Compensation Committee did not weigh these factors in any predetermined or formulaic manner in making its decisions. The members of the Compensation Committee considered this information in light of their individual experience, knowledge of the Company, knowledge of each executive officer, knowledge of the competitive market, and business judgment in making their decisions regarding executive compensation and our executive compensation program. As part of this process, our Chairperson of the Board works closely with the Compensation Committee in determining the compensation of our CEO. The non-employee members of the Board of Directors evaluate the performance of our CEO each year and the Compensation Committee incorporates that evaluation in its decisions regarding their base salary adjustments, target annual cash bonus opportunities, actual cash bonus payments, and long-term incentives in the form of equity awards. None of our officers, including our CEO, is present during any of the decision making regarding his or her own compensation.
Role of Compensation Consultants
Role of Compensation Consultants Pursuant to its charter, the Compensation Committee has the authority to engage its own compensation consultants and other advisors, including legal counsel, as it determines in its sole discretion, to assist in carrying out its responsibilities. The Compensation Committee makes all determinations regarding the engagement, fees, and services of these advisors, and any such advisor reports directly to the Compensation Committee. The Compensation Committee may replace its compensation consultants or hire additional advisors at any time. In fiscal year 2023, pursuant to this authority, the Compensation Committee engaged Compensia, Inc., a U.S. compensation consulting firm, and PwC Switzerland (which acquired in fiscal year 2022 the Swiss compensation consulting firm that our Compensation Committee historically used). The Compensation Committee engages compensation consultants to provide information, analysis, and other assistance relating to our executive compensation program on an ongoing basis. The nature and scope of the services provided to the Compensation Committee by the independent compensation consultants in fiscal year 2023 were as follows: •reviewed and recommended updates to the compensation peer group; •provided advice with respect to compensation best practices and market trends for executive officers and members of our Board of Directors;
Role of Compensation Consultants
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Role of Compensation Consultants
•conducted an analysis of the levels of overall compensation and each element of compensation for our executive officers; •conducted an analysis of the levels of overall compensation and each element of compensation for the members of our Board of Directors; •conducted a compensation risk assessment; •assisted in our equity compensation strategy; and •provided legislative updates and ad hoc advice and support on compensation matters throughout the year. The independent compensation consultants attend Compensation Committee meetings regularly and as requested and also communicate with the Compensation Committee outside of meetings. The compensation consultants report to the Compensation Committee rather than to management, although they typically meet with members of management, including our CEO and members of our executive compensation staff, for purposes of understanding proposals that management may make to the Compensation Committee. The Compensation Committee has assessed the independence of the compensation consultants taking into account, among other things, the six independence-related factors as set forth in Exchange Act Rule 10C-1 issued by the SEC under the Dodd–Frank Wall Street Reform and Consumer Protection Act and the enhanced independence standards and factors set forth in the applicable listing standards of the Nasdaq Stock Market, and has concluded that its relationship with each independent compensation consultant and the work of each of them on behalf of the Compensation Committee has not raised any conflict of interest. In addition to the services mentioned above, Compensia has not provided any other services to us and has not received compensation other than with respect to the services described above. PwC provided accounting consulting services to the Company and received total fees less than $120,000 for such additional services during our fiscal year 2023.
Compensation Peer Group
Compensation Peer Group As part of its deliberations, the Compensation Committee considers competitive market data on executive compensation levels and practices and a related analysis of such data. This data is drawn from a select group of peer companies developed by the Compensation Committee, as well as compensation survey data. For fiscal year 2023, at the direction of the Compensation Committee, Compensia evaluated the existing compensation peer group and used the criteria set forth in the following table to objectively identify companies for inclusion in the group:
Compensation Peer Group
| Criteria | Rationale | | Industry | We compete for talent with companies in the following industries: • Technology • Consumer Products | | Financial Scope | Our executive officer compensation should be similar to senior managers at companies that have comparable financial characteristics including revenue and market capitalization. | | Other Factors | As appropriate, we utilize additional refinement criteria (objective or subjective) such as revenue growth, profitability, valuation, headcount, or business model. U.S. publicly traded companies. Although we are a Swiss company, we compete for executive management talent with technology companies in the United States, and particularly in the high-technology area of Silicon Valley. |
Compensation Peer Group
Based on these criteria, the Compensation Committee selected the following peer group of 20 publicly-traded companies, which it subsequently approved and then used as a reference when making compensation decisions with respect to setting compensation for fiscal year 2023:
Compensation Peer Group
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Compensation Peer Group
| Arista Networks | Juniper Networks | Sensata Technologies | | Ciena | Keysight Technologies | Skyworks Solutions | | Citrix Systems | NCR | Teradyne | | Electronic Arts | NetApp | Trimble Navigation Limited | | F5 Networks | Nuance Communications | Vertiv Holdings | | Garmin Ltd. | Pure Storage | Zebra Technologies Corporation | | Hubbell | Qorvo | |
Compensation Peer Group
Cadence, Synopsys and Marvell Technology were removed from our peer group because they no longer fell within the selection criteria for market capitalization. FLIR Systems was removed because it was acquired. These companies were replaced by Hubbell, NCR, Sensata Technologies and Vertiv Holdings because they were better aligned with our selection criteria. The following table sets forth the revenue and market capitalization of the fiscal year 2023 compensation peer group as of January 2022 as compared to the same data for Logitech:
Compensation Peer Group
| (in millions) | Revenue | Market Capitalization | | 75th Percentile | $4,984 | $25,128 | | 50th Percentile | $4,527 | $16,850 | | 25th Percentile | $3,466 | $10,945 | | Logitech | $5,787 | $13,667 | | Percentile Rank | 87% | 41% |
Compensation Peer Group
The table reflects available revenue information for four quarters as of January 28, 2022 and 30-day average market capitalization as of January 28, 2022, as provided by Compensia. The market analysis provided by Compensia, and considered by the Compensation Committee in its review of our executive officers’ compensation, compares Logitech to multiple sources of data: the compensation peer group described above and a broad custom survey of similarly sized technology companies. The broad technology survey data, which is necessary to provide market data where we do not have publicly disclosed information from our peers, consists of 60 companies that participated in the Radford Global Technology Survey with comparable revenue and market profile to the compensation peer group. The Compensation Committee believes that information regarding the compensation practices at other companies is useful in at least two respects. First, the Compensation Committee recognizes that our compensation policies and practices must be competitive in the marketplace. Second, this information is useful in assessing the reasonableness and appropriateness of individual executive compensation elements and of our overall executive compensation packages. This information is only one of several factors (as described above) that the Compensation Committee considers, however, in making its decisions with respect to the compensation of our executive officers.
Compensation Peer Group
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Compensation Peer Group
| Compensation Elements |
Compensation Peer Group
The three primary elements of our executive compensation programs are (1) base salary, (2) annual cash bonus opportunities, and (3) long-term incentives in the form of equity awards, as described below:
Compensation Peer Group
| | Base Salary | Annual cash bonuses | Long-term incentives/equity awards | | What this compensation element rewards | Individual performance, level of experience, and contributions. | Achievement of pre-established short-term corporate performance objectives, as well as management objectives and individual contributions. | Achievement of pre-established 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. | | Purpose and Key Features of Element | Provides competitive level of fixed compensation determined by the market value of the position, with actual base salaries established based on the facts and circumstances of each executive officer and each individual position. | Performance levels are established to motivate our executive officers to achieve or exceed performance objectives. For fiscal year 2023, payouts for corporate performance objectives could range from 0% to 200%, depending on actual achievement. | Provide a variable “at risk” pay opportunity that aligns executive and shareholder interests through annual equity awards that vest or are earned 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 executives on the creation and maintenance of long-term shareholder value. Vesting requirements promote retention. | | Form of Payment | Cash | Cash | Our CEO receives 100% PSUs with vesting following a three-year performance period. Beginning fiscal year 2023, all of our NEOs received 100% PSUs and received no service-based RSUs. | | Performance Measures | | 45% Revenue (constant currency) 45% Non-GAAP Operating Income 10% ESG Scorecard | Primary Metric: three-year weighted average Revenue growth (constant currency) Modifier: three-year relative Total Shareholder Return ("TSR") versus Russell 3000 Gate: three-year cumulative Non-GAAP Operating Income |
Compensation Peer Group
Each of these compensation elements is discussed in greater detail below, including a description of the particular element, how each element fits into our overall executive compensation program, and a discussion of the amounts of compensation paid to our executive officers in fiscal year 2023 under each of these elements. Our executive officers also participate in the standard employee benefit plans available to most of our employees.
Compensation Peer Group
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Annual Cash Bonuses
Annual Cash Bonuses We use annual bonuses to motivate our executive officers to achieve our short-term financial and operational objectives while making progress towards our longer-term growth and other goals. Consistent with our executive compensation philosophy, these annual bonuses are intended to help us to deliver a competitive total compensation opportunity to our executive officers. Annual cash bonuses are entirely performance-based, are not guaranteed, and may vary materially from year-to-year. Typically, the Compensation Committee establishes cash bonus opportunities pursuant to a formal cash bonus plan that measures and rewards our executive officers for our actual corporate and their individual performance over our fiscal year. The cash bonus plan is designed to pay above-target bonuses when we exceed our annual corporate objectives and below-target bonuses or no bonus when we do not achieve these objectives. In fiscal year 2023, the Compensation Committee determined cash bonus opportunities for our executive officers pursuant to the cash bonus plan for fiscal year 2023 under the Logitech Management Performance Bonus Plan (the “Bonus Plan”). Under the Bonus Plan, the Compensation Committee had the authority to select the performance measures and related target levels applicable to the annual cash bonus opportunities for our executive officers.
Annual Cash Bonuses
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Annual Cash Bonuses
For fiscal year 2023, the target annual cash bonus opportunities for each of our executive officers under the Bonus Plan, expressed as a percentage of his or her annual base salary, were as follows (with Mr. Boynton’s actual opportunity pro-rated based on his length of service during the fiscal year):
Annual Cash Bonuses
| Named Executive Officer | Annual Base Salary | Target Bonus Opportunity (as a percentage of base salary) | Target Bonus Opportunity ($) | | Bracken Darrell | $1,000,000 | 125% | $1,250,000 | | Charles Boynton | $600,000 | 90% | $540,000 | | Prakash Arunkundrum | $525,000 | 80% | $420,000 | | Samantha Harnett | $525,000 | 80% | $420,000 | | Nate Olmstead | $560,000 | 80% | $448,000 |
Annual Cash Bonuses
In setting the amount of the target annual cash bonus opportunities, the Compensation Committee takes into account competitive market data, the individual’s role and contribution to performance, as well as the other factors described above. Corporate Performance Objectives For purposes of the Bonus Plan, the Compensation Committee continued to use Revenue (constant currency) and Non-GAAP Operating Income as corporate performance measures for fiscal year 2023. The Compensation Committee believed these performance measures were appropriate for our business because they provided a balance between growing our business, generating revenue, managing our expenses, and increasing profitability, which it believes most directly influences long-term shareholder value. The Compensation Committee established target performance levels for each of these measures at levels that it believed to be challenging, but attainable, through the successful execution of our Board-approved annual operating plan. Beginning in fiscal year 2022, we have incorporated an ESG scorecard that will be assessed as a composite based on five metrics: net carbon reduction, labeling the carbon footprint of our products, renewable electricity, design for sustainability principles, and external metric reporting. For purposes of the Bonus Plan, the corporate performance measures and their weightings were to be calculated as follows:
Annual Cash Bonuses
| 45% REVENUE (CC) | Net Sales measured in “constant currency” (CC), which excludes the impact of currency exchange rate fluctuations. The target constant currency sales are calculated by translating sales in each local currency at the forecast exchange rate for that currency at the beginning of the performance period. The actual revenue in the performance period is translated in each local currency using the same forecast exchange rate to determine the performance achievement against the performance target. For additional information regarding “constant currency” sales, please refer to the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report. | | 45% NON-GAAP OPERATING INCOME | GAAP Operating Income from continuing operations, excluding share-based compensation expense, amortization and impairment of intangible assets, purchase accounting effect on inventory, acquisition-related costs, change in fair value of contingent consideration for business acquisition, restructuring charges (credits), gain (loss) on investment, investigation and related expenses, pension curtailment losses (gains), non-GAAP income tax adjustment and other items. | | 10% ESG SCORECARD | A composite ESG metric based on five metrics: net carbon reduction, carbon labeling of our products, renewable electricity, design for sustainability principles, and external metric reporting. |
Annual Cash Bonuses
For any bonus payment to be made under the fiscal year 2023 Bonus Plan, the threshold performance requirements had to be met for each of the corporate performance measures. For the financial metrics, in the event of actual performance between the threshold and target, and target and maximum performance levels, the payment amount was to be calculated ratably between each designated segment determined by straight-line interpolation. The ESG
Annual Cash Bonuses
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Annual Cash Bonuses
scorecard is assessed by the Compensation Committee against pre-determined standards for each item and a composite score is determined between 0% and 200%. Individual Performance In addition to the corporate performance objectives, the result earned under the corporate performance objectives can be adjusted up or down by 25 percentage points for our executive officers, other than our CEO, based on each executive officer’s individual performance and other factors including diversity, equity and inclusion as reviewed and assessed by our CEO and determined by the Compensation Committee. 2023 Performance Results and Bonus Decisions For fiscal year 2023, the Compensation Committee established the following threshold, target and maximum performance and payment levels for each of the corporate performance measures under the Bonus Plan and determined that our actual achievement with respect to the corporate financial objectives under the Bonus Plan was as follows:
Annual Cash Bonuses
| Fiscal Year 2023 Annual Incentive Plan | | | | | | | Measure | Weight | Threshold | Target | Maximum | Actual | | Revenue CC | 45% | $5,040M | $5,570M | $5,836M | $4,718M | | Performance Level | | 90% | 100% | 105% | 85% | | Payment Level | | 25% | 100% | 200% | 0% | | Non-GAAP Operating Income | 45% | $757M | $865M | $973M | $594M | | Performance Level | | 88% | 100% | 113% | 69% | | Payment Level | | 50% | 100% | 200% | 0% | | ESG Scorecard | 10% | 50% | 100% | 200% | 133% | | Overall Result | | | | | 13% |
Annual Cash Bonuses
The actual achievement under the Bonus Plan produced a funding percentage, based on the corporate performance measures, at a 13% level. Based on its review of our overall corporate performance, and taking into account the CEO’s recommendations with respect to individual performance for the executive officers, other than himself, the Compensation Committee approved bonus payments as follows for our executive officers for fiscal year 2023:
Annual Cash Bonuses
| Named Executive Officer | Target Annual Cash Bonus Opportunity | Actual Annual Cash Bonus Payment | Percentage of Target Annual Cash Bonus Opportunity | | Bracken Darrell | $1,250,000 | $— | —% | | Charles Boynton | $540,000 | $10,386 | 13% | | Prakash Arunkundrum | $420,000 | $105,000 | 25% | | Samantha Harnett | $420,000 | $105,000 | 25% | | Nate Olmstead | $448,000 | $58,240 | 13% |
Annual Cash Bonuses
The Compensation Committee determined that the bonus amounts reflected the decline in our results during fiscal year 2023 and the resilience of our performance against our ESG scorecard. •Mr. Darrell opted to receive no bonus. •Mr. Boynton’s bonus of $10,386 reflected our corporate funding percentage of 13% and was a prorated amount based on his start date. The target cash bonus opportunity indicated is an annualized amount. •Mr. Arunkundrum’s bonus of $105,000 reflected his continued success in driving the Company’s ESG priorities both in environmental sustainability and cost management.
Annual Cash Bonuses
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Annual Cash Bonuses
•Ms. Harnett's bonus of $105,000 reflected her increasing levels of responsibility throughout the year including major projects in strategy and board meeting process improvements. •Mr. Olmstead’s bonus of $58,240 reflected the corporate funding percentage of 13%. The annual cash bonuses paid to our executive officers for fiscal year 2023 are set forth in the “Summary Compensation Table for Fiscal Year 2023” below.
Long-Term Incentive Compensation
Long-Term Incentive Compensation We use long-term incentive compensation in the form of equity awards to motivate our executive officers by providing them with the opportunity to build an equity interest in the Company and to share in the potential appreciation of the value of our registered shares. We use PSU awards that may be settled for our registered shares as the principal vehicle for delivering long-term incentive compensation opportunities to our executive officers. Fiscal year 2022 was the last year we granted service-based RSUs to our executive officers; our CEO has received 100% PSUs since fiscal year 2021. The Compensation Committee views equity awards, whether the awards are subject to service-based vesting requirements or are to be earned based on the attainment of specific performance objectives, as inherently variable since the grant date fair value of these awards may not necessarily be indicative of their value when, and if, our registered shares underlying these awards are ever earned or vested. The Compensation Committee further believes these awards enable us to attract and retain key talent in our industry and align our executive officers’ interests with the long-term interests of our shareholders. The Compensation Committee primarily uses PSUs and historically used service-based RSUs because they are less dilutive than stock options. In fiscal year 2023, the Compensation Committee approved equity awards for our executive officers in recognition of our financial results and each executive officer’s individual performance for fiscal year 2022 and expected future contributions. In determining the amount of each executive officer’s equity award, the Compensation Committee took into consideration the factors described above. The Compensation Committee considers the dilutive effect of our long-term incentive compensation practices, and the overall impact that these equity awards, as well as awards to other employees, will have on shareholder value. The Compensation Committee also considered the existing equity holdings of each executive officer, including the current economic value of their unvested equity awards and the ability of these unvested holdings to satisfy our retention objectives. The equity awards granted to our executive officers in fiscal year 2023 were as follows:
Long-Term Incentive Compensation
| | Performance Share Units | | | Named Executive Officer | Number of Shares | Grant Date Approved Value(1) | | Bracken Darrell | 102,390 | $7,500,000 | | Charles Boynton | n/a | n/a | | Prakash Arunkundrum | 23,209 | $1,700,000 | | Samantha Harnett | 23,209 | $1,700,000 | | Nate Olmstead | 25,939 | $1,900,000 |
Long-Term Incentive Compensation
(1)Reflects equity grant value approved by the Compensation Committee for each executive officer which may differ from the stock awards value reflected in the "Summary Compensation Table for Fiscal Year 2023" below. This Grant Date Approved Value was converted to a number of shares based on the accounting grant date fair value, rounded up to the nearest whole share, to determine the stock awards value. The equity award granted to our CEO in fiscal year 2022 was composed of 100% PSUs and the equity awards for our other executive officers in fiscal year 2022 were composed of 60% PSUs and 40% service-based RSUs that may be settled for our registered shares. In fiscal year 2023, we shifted to 100% PSUs for all executive officers.
Long-Term Incentive Compensation
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Long-Term Incentive Compensation
Performance-Based Units The target number of PSU awards granted to our executive officers in fiscal year 2023 is determined at the beginning of a three-year performance period and the number of shares that will vest at the end of the three-year period will range from 0% to 200% of the target number of shares depending on our corporate performance, as measured by:
Long-Term Incentive Compensation
| PRIMARY METRIC Three-year weighted average Revenue growth measured in constant currency. | MODIFIER Logitech's relative TSR rank against the Russell 3000 over the three-year performance period. •Reduces the vesting level if our TSR is below the median. •Enhances the vesting level if our TSR exceeds the median. | GATE Requires achievement of a minimum level of cumulative Non-GAAP Operating Income over the three-year performance period for any award to vest. |
Long-Term Incentive Compensation
The total number of shares that may vest at the end of the three-year period is capped at 200% of the target number of shares. The Compensation Committee believes that measuring our performance with multiple metrics provides a more complete picture of our performance. The Compensation Committee believes the primary metric of weighted average Revenue growth (constant currency) will motivate top-line performance while the Non-GAAP Operating Income "gate" provides balance on bottom-line operational rigor. The modifying metric of relative TSR is well aligned to shareholders' interest as it focuses on relative share performance against other companies in the Russell 3000 index. For purposes of the PSUs, relative TSR reflects (i) the aggregate change in the 30-day average closing price of Logitech shares against the companies in the Russell 3000 (the "TSR Peer Group"), and (ii) the value (if any) returned to shareholders in the form of dividends or similar distributions, assumed to be reinvested in shares when paid, each at the beginning and the end of a three-year performance period. The Compensation Committee changed the TSR Peer Group from the Nasdaq 100 to the Russell 3000 for grants made starting in fiscal year 2021 to provide a more appropriate broad-based index to compare Logitech performance against the whole market rather than a larger cap index like the Nasdaq 100 of which Logitech is not a member. The vested percentage attributable to weighted average Revenue growth (constant currency) and a TSR Percentile Rank between Threshold and Target, or between Target and Maximum, is determined by straight-line interpolation.
Long-Term Incentive Compensation
| 80 | 2023 General Annual Meeting Invitation, Proxy Statement |
Long-Term Incentive Compensation
PSUs Vesting in Fiscal Year 2023 The PSUs granted in June 2020 completed the three-year measurement period on March 31, 2023 and vested on May 15, 2023 at 198% of target.
Long-Term Incentive Compensation
| Fiscal Years 2021-2023 PSUs (granted June 15, 2020 and vested May 15, 2023) | | | | | | Measure | Threshold | Target | Maximum | Actual | | Primary Metric: | | | | | | 3-Year Weighted Average Revenue Growth (CC) | 0% | 5% | 9% | 23.0% | | Vesting Level | 0% | 100% | 200% | 200% | | Modifier: | | | | | | 3-Year relative TSR vs Russell 3000 (percentile rank) | 25th and below | 50th | 75th and above | 48th | | Modifier Factor on Vesting Level Achieved Under Primary Metric | -20% | No Adjustment | +20% | -1% | | Gate: | | | | | | 3-Year cumulative Non-GAAP Operating Income | | $1,056M | | $2,765M | | Overall Result (capped at 200%) | | | | 198% |
Long-Term Incentive Compensation
Our average stock price at the beginning of the period was $39.92 and our ending average stock price was $56.34 (assuming dividends were reinvested). Therefore, our TSR over the performance period from April 1, 2020 through March 31, 2023 was 41.1% and our stock performed at the 48th percentile relative to the companies in the Russell 3000, which resulted in a modifier of -1%. Restricted Stock Unit Awards The service-based RSU awards granted to our executive officers (other than our CEO) in fiscal year 2022 were subject to a service-based vesting requirement and have a three-year cliff vesting period (this means that all the shares subject to the RSU will vest at the end of the three-year vesting period), based on the continued service of the executive officer on the vesting date. The equity awards granted to our executive officers in fiscal year 2023 are set forth in the “Summary Compensation Table for Fiscal Year 2023” and the “Grants of Plan-Based Awards Table for Fiscal Year 2023” below.
Compensation Recovery Policy
Compensation Recovery Policy In June 2010, the Compensation Committee adopted a policy regarding the recovery of compensation paid to an executive officer or the principal accounting officer of the Company (a “clawback”). Under the terms of the policy we may recover bonus amounts, equity awards or other incentive compensation awarded or paid within the prior three years to a covered officer if the Compensation Committee determines the compensation was based on any performance goals that were met or exceeded as a result, in whole or in part, of the officer’s fraud or misconduct, or the officer knew at the time of the existence of fraud or misconduct that resulted in performance goals being met or exceeded, and a lower amount would otherwise have been awarded or paid to the officer. In addition, under the policy Logitech may recover gains realized on the exercise of stock options or on the sale of vested shares by an executive officer or the principal accounting officer if, within three years after the date of the gains or sales, Logitech discloses the need for a significant financial restatement, other than a financial restatement solely because of revisions to U.S. GAAP, and the Compensation Committee determines that the officer’s fraud or misconduct caused or partially caused the need for the restatement, or the covered officer knew at the time of the existence of fraud or misconduct that resulted in the need for such restatement. In addition, our 2006 Stock Incentive Plan and our Management Performance Bonus Plan provide that awards under the plans are suspended or forfeited if the plan participant, whether or not an executive officer: •has committed an act of embezzlement, fraud or breach of fiduciary duty; •makes an unauthorized disclosure of any Logitech trade secret or confidential information; or •induces any customer to breach a contract with Logitech. Any decision to suspend or cause a forfeiture of any award held by an executive officer under the 2006 Stock Incentive Plan or the Management Performance Bonus Plan is subject to the approval of the Board of Directors. The Compensation Committee will amend the policy when necessary to comply with the Nasdaq listing standards adopted to comply with the final SEC rules regarding clawback policies required by the Dodd-Frank Act.
Equity Award Grant Practices
Equity Award Grant Practices Determination of long-term equity incentive awards The Compensation Committee is responsible for approving which executive officers should receive equity incentive awards, when the awards should be made, the vesting schedule, and the number of shares or other rights to be granted. Long-term equity incentive awards to executive officers may be granted only by the Compensation Committee or the full Board of Directors. The Compensation Committee regularly reports its activity, including approvals of grants, to the Board.
Equity Award Grant Practices
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Equity Award Grant Practices
Timing of grants Long-term equity incentive award grants to executive officers are typically and predominantly approved at regularly scheduled, predetermined meetings of the Compensation Committee. These meetings are generally scheduled at least 18 months in advance and take place before the regularly scheduled, predetermined meetings of the full Board. On limited occasions, grants may be approved at an interim meeting of the Compensation Committee or by written consent, for the purpose of approving the hiring and compensation package for newly hired or promoted executives or for other special circumstances. In fiscal year 2023, grants were made to non-executive officer employees through written consents of the Compensation Committee or regularly scheduled monthly approval by the CEO pursuant to authority delegated to him by the Compensation Committee. We do not have any program, plan, or practice to select equity compensation grant dates in coordination with the release of material non-public information, nor do we time the release of information for the purpose of affecting value. We do not backdate options or grant options retroactively.
Compensation Committee
| Summary Compensation Table for Fiscal Year 2023 |
Compensation Committee
| Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($)(1) | Option Awards ($) | Non-equity Incentive Plan Compensation ($)(2) | Changes in Nonqualified Deferred Compensation Earnings ($) | All Other Compensation ($)(3) | Total ($) | | Bracken Darrell | FY23 | 1,038,462 | — | 7,500,068 | — | — | — | 14,554 | 8,553,084 | | President and Chief Executive Officer | FY22 | 999,231 | — | 7,633,104 | — | 1,850,000 | — | 14,855 | 10,497,190 | | | FY21 | 973,654 | — | 7,598,281 | — | 2,437,500 | — | 16,670 | 11,026,105 | | Charles Boynton(4) | FY23 | 92,308 | — | — | — | 10,386 | — | 3,078 | 105,772 | | Chief Financial Officer | FY22 | n/a | n/a | n/a | n/a | n/a | n/a | n/a | n/a | | | FY21 | n/a | n/a | n/a | n/a | n/a | n/a | n/a | n/a | | Prakash Arunkundrum | FY23 | 544,327 | — | 1,700,059 | — | 105,000 | — | 13,119 | 2,362,505 | | Chief Operating Officer | FY22 | 500,000 | — | 1,567,717 | — | 620,000 | — | 11,960 | 2,699,677 | | | FY21 | 497,981 | — | 1,563,304 | — | 800,000 | — | 12,063 | 2,873,348 | | Samantha Harnett | FY23 | 543,462 | — | 1,700,059 | — | 105,000 | — | 13,312 | 2,361,833 | | Chief Legal Officer | FY22 | 473,462 | — | 1,463,202 | — | 589,000 | — | 12,068 | 2,537,732 | | | FY21 | 318,750 | — | 1,065,150 | — | 552,500 | — | 5,957 | 1,942,357 | | Nate Olmstead(4) | FY23 | 580,327 | — | 1,900,032 | — | 58,240 | — | 12,886 | 2,551,485 | | former Chief Financial Officer | FY22 | 524,231 | — | 1,619,974 | — | 621,600 | — | 12,889 | 2,778,694 | | | FY21 | 498,788 | 75,000 | 1,615,371 | — | 800,000 | — | 12,063 | 3,001,222 |
All Other Compensation Table
| Grants of Plan-Based Awards Table for Fiscal Year 2023 |
All Other Compensation Table
| Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table |
Compensation Mix
| Outstanding Equity Awards at Fiscal Year 2023 Year-End Table |
Compensation Mix
| Stock Vested Table for Fiscal Year 2023 |
Compensation Mix
| Pension Benefits Table for Fiscal Year 2023 |
Compensation Mix
| Non-qualified Deferred Compensation Table for Fiscal Year 2023 |
Compensation Mix
| Narrative Disclosure to Non-Qualified Deferred Compensation Table |
Compensation Mix
| Payments upon Termination or Change in Control |
Tables of Potential Payments Upon Termination or Change in Control
Tables of Potential Payments Upon Termination or Change in Control The table below estimates the amount of compensation that would be paid in the event of an involuntary termination of employment of a named executive officer without cause after a change in control, assuming that each of the terminations was effective as of March 31, 2023, subject to the terms of the PSU and RSU award agreements with each of the listed executive officers. Since December 2015, we do not have any cash payment related to termination of employment or change of control in compliance with applicable Swiss regulations. As of March 31, 2023, no compensation amounts were payable to any named executive officer in the event of a mutual agreement to terminate employment, whether upon retirement or otherwise.
Tables of Potential Payments Upon Termination or Change in Control
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Tables of Potential Payments Upon Termination or Change in Control
The price used for determining the value of accelerated vesting of outstanding and unvested equity awards in the tables below was the closing price of Logitech’s shares on the Nasdaq Global Select Market on March 31, 2023, the last business day of the fiscal year, of $58.06 per share.
POTENTIAL PAYMENTS UPON INVOLUNTARY TERMINATION AFTER CHANGE IN CONTROL
POTENTIAL PAYMENTS UPON INVOLUNTARY TERMINATION AFTER CHANGE IN CONTROL
POTENTIAL PAYMENTS UPON INVOLUNTARY TERMINATION AFTER CHANGE IN CONTROL
| Name | Value of Accelerated Equity Awards(1) ($) | | Bracken Darrell | 18,284,564 | | Charles Boynton | — | | Prakash Arunkundrum | 3,096,909 | | Samantha Harnett | 1,512,452 | | Nate Olmstead | 4,011,329 |
POTENTIAL PAYMENTS UPON INVOLUNTARY TERMINATION AFTER CHANGE IN CONTROL
(1)Represents, as of March 31, 2023, the aggregate market value of shares underlying all unvested service-based RSUs and PSUs, in each case held by the named executive officer as of March 31, 2023 that are subject to acceleration according to the terms of an equity award agreement. For the PSUs granted on June 15, 2020 based on non-GAAP Operating income, WACCR and relative TSR, as of March 31, 2023 the performance condition was at a level which would have produced a payout percentage of 198%; therefore, 198% of such value was attributed to the shares subject to such PSUs.
POTENTIAL PAYMENTS UPON INVOLUNTARY TERMINATION AFTER CHANGE IN CONTROL
| Pay Ratio |
POTENTIAL PAYMENTS UPON INVOLUNTARY TERMINATION AFTER CHANGE IN CONTROL
For fiscal year 2023: ▪the median of the annual total compensation of all employees of our company (other than our CEO) was $49,260; and ▪the annual total compensation of Mr. Bracken Darrell, our President and Chief Executive Officer, was $8,553,084. Based on this information, for fiscal year 2023 the ratio of the annual total compensation of Mr. Darrell to the median of the annual total compensation of all employees was 174 to 1. This ratio is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K under the Securities Exchange Act of 1934. As permitted by SEC rules, to identify our median employee, we selected base pay, which we calculated as annual base pay using a reasonable estimate of the hours worked during fiscal year 2023 for hourly employees and using annual salary levels for our remaining employees, as the compensation measure to be used to compare the compensation of our employees as of January 31, 2023 for the ten-month period from April 1, 2022 through January 31, 2023. We annualized base pay for any permanent employees who commenced work during fiscal year 2023. We did not include any contractors or other non-employee workers in our employee population. Using this approach, we selected the individual at the median of our employee population, who was an employee based in Taiwan. We then calculated annual total compensation for this individual using the same methodology we use for our Named Executive Officers as set forth in our "Summary Compensation Table for Fiscal Year 2023". We determined that such individual’s annual total compensation for the fiscal year ended March 31, 2023 was $49,260. During fiscal year 2023, Mr. Darrell served as our President and Chief Executive Officer. We determined Mr. Darrell’s annual total compensation for the fiscal year ended March 31, 2023 was $8,553,084, as reported in our "Summary Compensation Table for Fiscal Year 2023."
POTENTIAL PAYMENTS UPON INVOLUNTARY TERMINATION AFTER CHANGE IN CONTROL
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POTENTIAL PAYMENTS UPON INVOLUNTARY TERMINATION AFTER CHANGE IN CONTROL
| Pay Versus Performance |
POTENTIAL PAYMENTS UPON INVOLUNTARY TERMINATION AFTER CHANGE IN CONTROL
As required by pay versus performance Rule 402(v) of Regulation S-K adopted by the SEC in 2022 (“PVP Rules”), we are providing the following information about the relationship between executive “compensation actually paid” and certain financial performance measures of the Company. For further information concerning the Company’s pay-for-performance philosophy and how we align executive compensation with our performance, refer to our “Compensation Discussion and Analysis” (or “CD&A”). In the below pay versus performance table, we provide information about compensation of our principal executive officer (“PEO”) and other named executive officers (“NEOs”) for each of the last three fiscal years (the “Covered Years”). Additionally, we provide information about the results for certain financial performance measures during the Covered Years. Although the PVP Rules require us to disclose “compensation actually paid,” these amounts do not necessarily reflect compensation that our NEOs actually earned or were paid in the Covered Years. Instead, “compensation actually paid” reflects a calculation computed in accordance with the PVP Rules, including adjusted values relating to the fair value of unvested and vested equity awards during the Covered Years determined based on either year-end or vesting date stock prices, various accounting valuation assumptions, and projected performance modifiers. “Compensation actually paid” generally fluctuates due to stock price achievement and varying levels of projected and actual achievement of performance goals. The PVP Rules require that we: –show information about our cumulative TSR, the cumulative TSR of a peer group or index (we have chosen to use the S&P 500 Information & Technology Index), and our U.S. GAAP net income for the Covered Years. –designate one “company-selected measure” as the financial performance measure that is most important to link pay to performance in fiscal year 2023. For fiscal year 2023, we have selected U.S. GAAP revenue, on a constant currency basis, because, as discussed in our CD&A, revenue, on a constant currency basis, continues to be viewed as a core driver of our performance and stockholder value creation and, accordingly, was utilized as a component in both our bonus program and the fiscal year 2023 performance-based equity awards. Please refer to our CD&A for information on how we calculate revenue in constant currency.
POTENTIAL PAYMENTS UPON INVOLUNTARY TERMINATION AFTER CHANGE IN CONTROL
| | | | | | Value of Initial Fixed $100 Investment | | | | | | | | Average | Average | Based On: | | | | | | Summary | | Summary | Compensation | | Peer Group | | Company- | | | Compensation | Compensation | Compensation | Actually | Total | Total | | Selected | | | Table | Actually Paid | Table Total | Paid | Shareholder | Shareholder | Net | Measure: | | Year | Total for PEO | for PEO | for Non-PEO NEOs | for Non-PEO NEOs | Return | Return | Income | Revenue | | | (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | | FY23 | $8,553,084 | $6,564,384 | $1,845,399 | $1,119,341 | $141 | $192 | $364,575,000 | $4,718,000,000 | | FY22 | $10,497,190 | $4,327,581 | $2,672,034 | $848,535 | $175 | $201 | $644,513,000 | $5,549,000,000 | | FY21 | $11,026,105 | $46,128,115 | $2,605,642 | $7,743,659 | $245 | $167 | $947,257,000 | $5,179,000,000 |
POTENTIAL PAYMENTS UPON INVOLUNTARY TERMINATION AFTER CHANGE IN CONTROL
(a) Bracken Darrell served as the Company’s PEO for fiscal years 2021, 2022 and 2023. The amounts reported in column (a) are the total compensation reported in the Summary Compensation Table for the applicable year for Mr. Darrell. (b) Amounts reported in column (b) are the “compensation actually paid” to Mr. Darrell, as computed in accordance with the PVP Rules, based on Mr. Darrell’s total compensation reported in the Summary Compensation Table for the indicated fiscal years and adjusted under the PVP Rules as shown in the table below:
POTENTIAL PAYMENTS UPON INVOLUNTARY TERMINATION AFTER CHANGE IN CONTROL
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POTENTIAL PAYMENTS UPON INVOLUNTARY TERMINATION AFTER CHANGE IN CONTROL
| PEO | | | | | | | | FY21 | FY22 | FY23 | | | Summary Compensation Table - Total Compensation | $11,026,105 | $10,497,190 | $8,553,084 | | - | Grant Date Fair Value of Stock Awards and Option Awards Granted in Fiscal Year | $7,598,281 | $7,633,104 | $7,500,068 | | + | Fair Value at Fiscal Year End of Outstanding and Unvested Stock Awards and Option Awards Granted in Fiscal Year | $13,670,581 | $4,589,186 | $6,074,799 | | + | Change in Fair Value of Outstanding and Unvested Stock Awards and Option Awards Granted in Prior Fiscal Years | $27,169,702 | $(3,575,389) | $2,218,627 | | + | Fair Value at Vesting of Stock Awards and Option Awards Granted in Fiscal Year That Vested During Fiscal Year | $— | $— | $— | | + | Change in Fair Value as of Vesting Date of Stock Awards and Option Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year | $1,860,008 | $449,698 | $(2,782,058) | | - | Fair Value as of Prior Fiscal Year End of Stock Awards and Option Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year | $— | $— | $— | | = | Compensation Actually Paid | $46,128,115 | $4,327,581 | $6,564,384 |
POTENTIAL PAYMENTS UPON INVOLUNTARY TERMINATION AFTER CHANGE IN CONTROL
Equity Award Valuations: Equity values are calculated in accordance with FASB ASC Topic 718. (c) Prakash Arunkundrum, Samantha Harnett, and Nate Olmstead served as the Company’s other NEOs for fiscal years 2021, 2022 and 2023. In addition, Charles Boynton served as an NEO in fiscal year 2023. Amounts reported in column (c) are the average of the total compensation reported in the Summary Compensation Table for the applicable fiscal year for the Company’s NEOs other than the PEO. (d) Amounts reported in column (d) are the “compensation actually paid” to the NEOs other than the PEO in the indicated fiscal year (as shown in footnote (c) above), as computed in accordance with the PVP Rules, based on the average total compensation for such NEOs reported in the Summary Compensation Table for the indicated fiscal years and adjusted under the PVP Rules as shown in the table below (based on the averages for each category):
POTENTIAL PAYMENTS UPON INVOLUNTARY TERMINATION AFTER CHANGE IN CONTROL
| NEO Average | | | | | | | | FY21 | FY22 | FY23 | | | Summary Compensation Table - Total Compensation | $2,605,642 | $2,672,034 | $1,845,399 | | - | Grant Date Fair Value of Stock Awards and Option Awards Granted in Fiscal Year | $1,414,608 | $1,550,298 | $1,325,038 | | + | Fair Value at Fiscal Year End of Outstanding and Unvested Stock Awards and Option Awards Granted in Fiscal Year | $2,772,831 | $977,514 | $1,073,235 | | + | Change in Fair Value of Outstanding and Unvested Stock Awards and Option Awards Granted in Prior Fiscal Years | $3,406,056 | $(809,850) | $(140,940) | | + | Fair Value at Vesting of Stock Awards and Option Awards Granted in Fiscal Year That Vested During Fiscal Year | $— | $— | $— | | + | Change in Fair Value as of Vesting Date of Stock Awards and Option Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year | $373,738 | $(440,865) | $(333,315) | | - | Fair Value as of Prior Fiscal Year End of Stock Awards and Option Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year | $— | $— | $— | | = | Compensation Actually Paid | $7,743,659 | $848,535 | $1,119,341 |
POTENTIAL PAYMENTS UPON INVOLUNTARY TERMINATION AFTER CHANGE IN CONTROL
Equity Award Valuations: Equity values are calculated in accordance with FASB ASC Topic 718. (e) Our TSR is calculated by assuming that a $100 investment was made in our stock on the day prior to the first fiscal year reported above and that all dividends were reinvested until the last day of each reported Covered Year.
POTENTIAL PAYMENTS UPON INVOLUNTARY TERMINATION AFTER CHANGE IN CONTROL
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POTENTIAL PAYMENTS UPON INVOLUNTARY TERMINATION AFTER CHANGE IN CONTROL
(f) Peer group TSR is calculated by assuming that a $100 investment was made in the Standard & Poor’s 500 Information & Technology Index, an independently prepared index that includes companies in the IT industry, on the day prior to the first fiscal year reported above and that all dividends were reinvested until the last day of each reported fiscal year. (g) The PVP Rules require the disclosure of our U.S. GAAP net income for each year. The dollar amounts reported reflect the amount of net income disclosed in the Company’s audited financial statements for the applicable year. (h) As discussed above, we believe that revenue, on a constant currency basis, is the appropriate company-selected measure.
Relationship Between Pay and Performance
| Compensation of Non-Employee Directors |
NON-EMPLOYEE DIRECTOR COMPENSATION TABLE FOR FISCAL YEAR 2023
NON-EMPLOYEE DIRECTOR COMPENSATION TABLE FOR FISCAL YEAR 2023
NON-EMPLOYEE DIRECTOR COMPENSATION TABLE FOR FISCAL YEAR 2023
| Name | Fees Earned in Cash ($)(1) | Stock Awards ($)(2) | Total ($) | | Patrick Aebischer | 279,319 | 205,200 | 484,519 | | Wendy Becker(3) | 550,754 | 205,200 | 755,954 | | Edouard Bugnion | 292,257 | 205,200 | 497,457 | | Riet Cadonau | 32,893 | — | 32,893 | | Guy Gecht | 302,257 | 205,200 | 507,457 | | Neil Hunt | 35,744 | — | 35,744 | | Christopher Jones | 247,303 | 205,200 | 452,503 | | Marjorie Lao | 290,678 | 205,200 | 495,878 | | Neela Montgomery | 285,415 | 205,200 | 490,615 | | Kwok Wang Ng | 252,522 | 205,200 | 457,722 | | Michael Polk(3) | 318,572 | 205,200 | 523,772 | | Deborah Thomas | 311,730 | 205,200 | 516,930 | | Sacha Zahnd | 255,592 | 205,200 | 460,792 |
NON-EMPLOYEE DIRECTOR COMPENSATION TABLE FOR FISCAL YEAR 2023
(1)Amounts in Swiss Francs were converted using the 12-month average (April 2022 to March 2023) exchange rate of 1 Swiss Franc to 1.052583 U.S. Dollars. (2)Amounts shown do not reflect compensation actually received by the directors. Instead, the amount shown is the aggregate grant date fair value of stock-related awards granted in fiscal year 2023 computed in accordance with ASC Topic 718 -- Compensation -- Stock Compensation, disregarding forfeiture assumptions. The grant date fair value used to calculate the aggregate value for fiscal year 2023 was CHF 47.04 per share for the September 14, 2022 grants (3)Wendy Becker and Michael Polk elected to receive all or a portion of their Board fees in shares.
NON-EMPLOYEE DIRECTOR COMPENSATION TABLE FOR FISCAL YEAR 2023
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NON-EMPLOYEE DIRECTOR COMPENSATION TABLE FOR FISCAL YEAR 2023
The following table presents additional information with respect to the equity awards held as of March 31, 2023 by members of the Board of Directors who were not executive officers as of fiscal year-end. The market value for service-based RSUs is determined by multiplying the number of shares subject to the award by the closing price of Logitech shares on the Nasdaq Global Select Market on the last trading day of the fiscal year.
OUTSTANDING EQUITY AWARDS FOR NON-EMPLOYEE DIRECTORS AT FISCAL YEAR 2023 YEAR-END
OUTSTANDING EQUITY AWARDS FOR NON-EMPLOYEE DIRECTORS AT FISCAL YEAR 2023 YEAR-END
OUTSTANDING EQUITY AWARDS FOR NON-EMPLOYEE DIRECTORS AT FISCAL YEAR 2023 YEAR-END
| | | Option Awards | | | | Stock Awards | | | Name | Grant Date (M/D/Y) | Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#) | Option Exercise Price / Share ($) | Market Value of Unexercised Options ($) | Number of Shares or Units of Stock That Have Not Vested (#) (1) | Market Value of Shares or Units of Stock That Have Not Vested ($) | | Patrick Aebischer | 9/14/2022 | — | — | — | — | 4,170 | 241,769 | | Wendy Becker | 9/14/2022 | — | — | — | — | 4,170 | 241,769 | | Edouard Bugnion | 9/14/2022 | — | — | — | — | 4,170 | 241,769 | | Riet Cadonau(2) | N/A | — | — | — | — | — | — | | Guy Gecht | 9/14/2022 | — | — | — | — | 4,170 | 241,769 | | Neil Hunt(2) | N/A | — | — | — | — | — | — | | Christopher Jones | 9/14/2022 | — | — | — | — | 4,170 | 241,769 | | Marjorie Lao | 9/14/2022 | — | — | — | — | 4,170 | 241,769 | | Neela Montgomery | 9/14/2022 | — | — | — | — | 4,170 | 241,769 | | Kwok Wang Ng | 9/14/2022 | — | — | — | — | 4,170 | 241,769 | | Michael Polk | 9/14/2022 | — | — | — | — | 4,170 | 241,769 | | Deborah Thomas | 9/14/2022 | — | — | — | — | 4,170 | 241,769 | | Sascha Zahnd | 9/14/2022 | — | — | — | — | 4,170 | 241,769 |
OUTSTANDING EQUITY AWARDS FOR NON-EMPLOYEE DIRECTORS AT FISCAL YEAR 2023 YEAR-END
(1)The shares subject to these stock awards vest in full on the first anniversary of the grant date or, if earlier and only if the director is not re-elected as a director at such annual general meeting, the date of the next annual general meeting following the grant date. If the non-employee director ceases to provide service prior to the applicable vesting date (for reasons other than death or disability), all unvested stock awards are forfeited. If a non-employee director dies or has a separation of service due to disability, all shares subject to the stock award will vest. (2)Riet Cadonau and Neil Hunt did not stand for re-election as a director at the Annual General Meeting in September 2022.
OUTSTANDING EQUITY AWARDS FOR NON-EMPLOYEE DIRECTORS AT FISCAL YEAR 2023 YEAR-END
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OUTSTANDING EQUITY AWARDS FOR NON-EMPLOYEE DIRECTORS AT FISCAL YEAR 2023 YEAR-END
| Compensation Tables Audited Under Swiss Law |