DEF 14A of Asure Software Inc
Filed Apr 8, 2024 · FY20230000884144-24-000031
ITEM 1 - ELECTION OF DIRECTORS
ITEM 1 - ELECTION OF DIRECTORS The first proposal to be voted on at the Annual Meeting is the election of directors. Our board of directors currently consists of seven members, each with a term expiring at the Annual Meeting. Our board has nominated our seven incumbent directors for election at the Annual Meeting as follows:
ITEM 1 - ELECTION OF DIRECTORS
| • | Benjamin Allen | • | Grace Lee | | • | W. Carl Drew | • | Bradford Oberwager | | • | Daniel Gill | • | Bjorn Reynolds | | • | Patrick Goepel | | |
ITEM 1 - ELECTION OF DIRECTORS
Directors are elected annually and serve a one-year term or until their successors are duly elected and qualified. Each of our director nominees has consented to being named in this proxy statement and has consented to serve as a director of the Company if elected. There are no family relationships among our directors and executive officers. The Board of Directors recommends voting “FOR” each director nominee. Generally, the Nominating and Governance Committee recommends director nominations and reviews nominees against the skills and characteristics that are required of our board members. The Nominating and Governance Committee focuses on a candidate’s expertise in the Company’s industry and experience in technology, business, legal matters, and finance. We look at a candidate’s education, skills, business experience, administration experience, and other appropriate factors given the current needs of the board and the Company. Our goal is to maintain a balance among board members of industry knowledge, experience, and ability to map out successful strategies for the Company’s business. Nominees for the board should have the highest personal and professional ethics, integrity, and values and be committed to representing the long-term interests of stockholders. They should be forward-thinking, possess critical analysis skills, and exhibit independence and practical judgment on issues. Evaluation of candidates for all nominees, whether submitted by a board member or a stockholder, generally involves reviewing background materials, internal discussions among committee members, and interviewing selected candidates as appropriate. Upon selecting a qualified candidate, the Nominating and Governance Committee recommends the candidate for the board’s consideration. Our board handled the duties delegated to our Nominating and Governance Committee in calendar year ended December 31, 2023. In recommending the nominees for election at this Annual Meeting, the board, acting through our Nominating and Governance Committee, evaluated our directors against the criteria stated above and found that all of our directors contribute to the board through their expertise and experience and diversity of backgrounds. Additionally, the board, acting as our Nominating and Governance Committee, noted that one of our director nominees is female, which is approximately 14% of our board. Additionally, approximately 14% of our board is ethnically diverse. Stockholders may recommend a candidate for our board by writing to the attention of the Secretary, Asure Software, Inc., 405 Colorado Street, Suite 1800, Austin, Texas 78701, specifying the candidate’s name and qualifications for board membership. All recommendations are submitted to the Nominating and Governance Committee. For the board to consider a candidate for nomination at the 2025 Annual Meeting, stockholders must submit a written recommendation by March 19, 2025, but not earlier than February 21, 2025. Each submission must, among other things, include: (a) all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors, or is otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (including such person’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected); (b) as to the stockholder giving the notice (i) the name and address, as they appear on the Corporation’s books, of such stockholder and (ii) the class and number of shares of the Company which are beneficially owned by such stockholder and also which are owned of record by such stockholder; and (c) as to the beneficial owner, if any, on whose behalf the nomination is made, (i) the name and address of such person and (ii) the class and number of shares of the Company which are beneficially owned by such person. Recommended candidates may be required to provide additional information, including the number of shares of common stock of the Company beneficially owned. While our board of directors has not adopted a formal diversity policy or specific standards with regard to the selection of director nominees, the board of directors believes it is important to consider diversity of race, ethnicity, gender, age, education, cultural background, and professional experiences in evaluating board candidates. The full board then selects and recommends candidates for nomination as directors for stockholders to consider and vote upon at the Annual Meeting. The board reviews and considers any candidates submitted by a stockholder or stockholder group in the same manner as all other candidates. Each nominee has consented to serve until the next annual stockholder meeting, if elected, or until his or her successor is elected and qualified. If any director is unable to stand for re-election after distribution of this proxy statement, the board may reduce its size or designate a substitute. If the board designates a substitute, proxies voting on the original director candidate will be cast for the substituted candidate. Proxies cannot be voted for a greater number of persons than the number of nominees named on the enclosed form of proxy. A plurality of the votes cast in person or by proxy by the holders of common stock represented at the Annual Meeting is required to elect a director. The seven nominees receiving the highest number of affirmative votes of the shares which are present or represented by proxy at the Annual Meeting and entitled to vote for the election of director will be elected to our board.
BIOGRAPHICAL INFORMATION REGARDING NOMINEES
BIOGRAPHICAL INFORMATION REGARDING NOMINEES The following table sets forth certain information concerning the director nominees:
BIOGRAPHICAL INFORMATION REGARDING NOMINEES
| Nominee | Age | Present Office(s) Held in Our Company | Director Since | | Patrick Goepel(1) | 62 | Chairman of the Board and Chief Executive Officer | 2009 | | Benjamin Allen(2)(3)(4) | 59 | None | 2020 | | W. Carl Drew(2)(3) | 64 | None | 2020 | | Daniel Gill(2)(5) | 60 | Lead Independent Director | 2017 | | Grace Lee(2)(4)(6) | 56 | None | 2020 | | Bradford Oberwager(2)(4) | 54 | None | 2018 | | Bjorn Reynolds(2)(3)(6) | 48 | None | 2020 |
BIOGRAPHICAL INFORMATION REGARDING NOMINEES
(1)Chairman of the Board (2)Independent board member as determined by the board of directors of the Company (3)Audit Committee Member (4)Compensation Committee Member (5)Lead Independent Director (6)Nominating and Governance Committee Member The following information regarding the principal occupations and other employment of the nominees during the past five years and their directorships in certain companies is as reported by the respective nominees. Benjamin Allen joined our board of directors in August 2020. Mr. Allen served as CEO of WorldAware, a technology company, from June 2017 to July 2020 during which time he led the successful sale of WorldAware to GardaWorld, a global security company, in July 2020. Before that, he served as President for Marsh USA, an insurance company, from March 2013 to June 2017 and as Chief Innovation Officer of Marsh & McLennan Agency LLC, a subsidiary of Marsh from May 2011 to March 2013. He also served as President and CEO of Kroll, Inc., a professional services company, from March 2008 to January 2011. Prior to Kroll's acquisition of ONTRACK, he served as president and CEO of ONTRACK Data International, Inc. (Nasdaq: ONDI). Mr. Allen began his career with human capital management (“HCM”) provider Ceridian where he advanced from sales to national leadership positions including marketing, operations, and IT. Mr. Allen received his BA in Finance from Washington State University. As a technologist turned CEO, with a background in HCM, Mr. Allen brings a unique skillset having successfully grown several tech-businesses. This background and experience makes Mr. Allen well-qualified to serve as a director. W. Carl Drew joined our board of directors in April 2020. Mr. Drew has served as President, Chief Operating Officer, and Chief Financial Officer of Harvard Maintenance, a building services company, since August 2014. Mr. Drew retired from Harvard Maintenance in 2023. He has broad experience in building world-class accounting and finance teams, developing the strategic planning and analysis functions, integrating cross-discipline process improvements, and leading and managing strategic mergers and acquisitions. Prior to joining Harvard Maintenance, Mr. Drew has served as Chief Financial Officer of several private and public companies, including CompuPay, Inc., a payroll services company, from 2006 to 2013; Interval International, Inc. from 1998 to 2006; and Pollo Tropical, Inc. from 1996 to 1998. He began his career as a CPA at Ernst and Young (formerly Ernst and Whinney) in the computer audit field. Mr. Drew’s leadership experience and his skills relating to financial statements and accounting makes him well-qualified to serve as a director. Mr. Drew is an audit committee financial expert. Daniel Gill has served as a director since June 2017 and was appointed Lead Independent Director in August 2020. Mr. Gill is a founding managing partner of Silver Oak Services Partners, a private equity limited partnership with over $600M of capital under management, which focuses exclusively on business, consumer, and healthcare services companies. Prior to the formation of Silver Oak Services Partners in November 2005, Mr. Gill was a founding partner and managing director of Willis Stein & Partners, a private equity limited partnership with approximately $3B of capital under management. Mr. Gill and four other partners formed the firm in 1995 after successful careers together at CIVC, a subsidiary of Bank of America (formerly Continental Bank). Prior to CIVC, Mr. Gill worked in the Corporate Finance Department of Kidder, Peabody & Co. Mr. Gill received an M.B.A. from the University of Chicago, Graduate School of Business and holds a B.A. degree in Economics from Bucknell University. Mr. Gill brings to our board strong leadership experience combined with strategic and financial expertise. In addition, Mr. Gill brings extensive advisory experience as he currently sits on the board of directors of over ten companies and has previously served on the boards of an additional nineteen companies including iSystems, which was acquired by Asure in 2017. Patrick Goepel was elected to our board of directors in August 2009. He was subsequently appointed as Interim Chief Executive Officer on September 15, 2009, and became Chief Executive Officer as of January 1, 2010. On August 11, 2020, he was elected Chairman of our board of directors. Prior to joining Asure, he served as Chief Operating Officer of Patersons Global Payroll. Previously, he was the President and Chief Executive Officer of Fidelity Investment’s Human Resource Services Division from 2006 to 2008; President and Chief Executive Officer of Advantec from 2005 to 2006; and Executive Vice President of Business Development and US Operations at Ceridian from 1994 to 2005. A former board member of iEmployee, Mr. Goepel currently serves on the board of directors of APPD Investments, Clearfield, Inc., Summit Hosting Holdco, LLC and SafeGuard World International, Ltd. Mr. Goepel brings to our board extensive knowledge and experience in the Company’s industry; deep knowledge of the Company’s day-to-day operations, strategic priorities, and markets; and extensive experience as a board member of private emerging growth companies. Grace Lee joined our board of directors in August 2020. Ms. Lee is the Executive Vice President, Chief Human Resources and Diversity Officer for Lumentum Holdings, joining there in August 2021, where she is responsible for the strategic leadership of global Human Resources, Diversity, Equity and Inclusion. Prior to that, she was the senior vice president and the Chief Human Resources and Diversity Officer at Cubic Corporation since October 2018. Prior to joining Cubic, she held similar roles at Charles River Laboratories, a publicly traded biotechnology company, from June 2016 to October 2018; Beckman Coulter, a Danaher operating company, from November 2014 to June 2016; TTM Technologies from November 2010 to November 2014; and IMI Severe Service (now IMI Critical Engineering) from July 2007 to November 2010. Ms. Lee received her master’s degree in human resources from Cornell University’s ILR School, her master’s degree in Global Leadership from the University of San Diego School of Business, and her bachelor’s degree in Communications from the University of the Philippines. She has been recognized as one of the top 50 chief diversity officers from the National Diversity Council. Ms. Lee brings significant HCM depth to our board of directors. Bradford Oberwager has served as a director since November 2018. Mr. Oberwager serves as Executive Chairman of both Linden Lab, the original Metaverse virtual world and Tilia.io a fintech company focused on virtual world payments. He is also founder and Chairman of Sundia Corporation, a consumer packaged goods business that he founded in December 2004. Previously, Mr. Oberwager founded and ran Jyve, a Silicon Valley based technology company revolutionizing labor, staffing, and merchandising, which was acquired by Advantage Solutions in 2021. He also owned and was CEO of Bare Snacks from December 2010 to September 2014 and which was listed on the Inc. 500 list for 2010 and 2011 and acquired in 2018 by PepsiCo. Mr. Oberwager received his BS in Finance from Georgetown University and his MBA in Strategic and Entrepreneurial Management from the Wharton School of Business, University of Pennsylvania. Mr. Oberwager brings financial expertise combined with strategic experience and strong leadership skills. Mr. Oberwager is a co-founder and director of five companies and has founded and successfully sold three businesses.
BIOGRAPHICAL INFORMATION REGARDING NOMINEES
Bjorn Reynolds joined our board of directors in April 2020. Mr. Reynolds is the founder of SafeGuard World International, Ltd., a US based international payroll services and PEO company and a licensee of our Asure HCM software, and has served as its Chief Executive Officer since its inception in January 2006. Mr. Reynolds is a highly experienced leader in the global payroll industry. Mr. Reynolds was nominated for the EY Entrepreneur of the Year 2018 award, recognized in 2016 as Payroll World’s Top 50 Most Influential People in Payroll, and received Workforce Management’s “Game Changer” award in 2012 for outstanding innovation in the HR market. Between 2000 and 2005, Mr. Reynolds served as a director of sales and marketing of Ceridian. From 1997 to 2000, Mr. Reynolds served as branch manager of HFC Bank (part of the Global HSBC Group). Mr. Reynold’s management and leadership experience, along with his deep knowledge of the global payroll industry, makes him well-qualified to serve as a director.
NON-EMPLOYEE DIRECTOR COMPENSATION TABLE
NON-EMPLOYEE DIRECTOR COMPENSATION TABLE The following table sets forth information concerning the compensation paid to the non-employee directors for the year ended December 31, 2023 (includes amounts that were earned in calendar year ended December 31, 2022, and paid in 2023) (whole dollars):
NON-EMPLOYEE DIRECTOR COMPENSATION TABLE
| Name | Fees Earned or Paid in Cash | Stock Awards | Option Awards | Total | | Daniel Gill(a) | $50,000 | $85,500 | $— | $135,500 | | Bradford Oberwager(a) | $50,000 | $85,500 | $— | $135,500 | | Bjorn Reynolds(a) | $45,000 | $85,500 | $— | $130,500 | | W. Carl Drew(a) | $51,558 | $85,500 | $— | $137,058 | | Benjamin Allen(a) | $45,000 | $85,500 | $— | $130,500 | | Grace Lee(a) | $47,500 | $85,500 | $— | $133,000 |
NON-EMPLOYEE DIRECTOR COMPENSATION TABLE
(a)On March 6, 2023, Mr. Drew, Mr. Reynolds, Ms. Lee, Mr. Allen, Mr. Gill, and Mr. Oberwager were each granted restricted stock units of 6,000 shares of our common stock. These restricted stock units vested on March 6, 2024. The amounts in this column represent the fair value of the restricted stock units as of the grant date as computed in accordance with FASB ASC Topic 718 (“ASC 718”) and SEC disclosure rules, excluding the impact of estimated forfeitures related to service-based vesting. Refer to Note 9, “Stockholders’ Equity, Employee Benefit Plans and Share-Based Compensation” in the Notes to the Consolidated Financial Statements included in our Form 10-K filed on February 26, 2024, for the relevant assumptions used to determine the valuation of our awards. The grant date fair value does not necessarily correspond to the actual economic value that may be realized for these awards. The following table shows the aggregate number of stock and option awards outstanding for each of our non-employee directors as of December 31, 2023 (whole shares):
NON-EMPLOYEE DIRECTOR COMPENSATION TABLE
| Name | Restricted Stock Unit Awards(1) | Option Awards(2) | | Daniel Gill | 6,000 | 10,000 | | Bradford Oberwager | 6,000 | 1,932 | | Bjorn Reynolds | 6,000 | 5,831 | | W. Carl Drew | 6,000 | 5,000 | | Benjamin Allen | 6,000 | 15,000 | | Grace Lee | 6,000 | 15,000 |
NON-EMPLOYEE DIRECTOR COMPENSATION TABLE
(1)None of the restricted stock units were vested as of December 31, 2023. (2)Includes 9,310 vested options held by Mr. Gill, 1,242 vested options held by Mr. Oberwager, 5,141 vested options held by Mr. Reynolds, 4,310 vested options held by Mr. Drew, and 14,310 vested options held by Mr. Allen and Ms. Lee as of December 31, 2023. Pursuant to our non-employee director compensation policy adopted in 2020, an annual retainer of $45,000 is paid to each independent director and while our non-employee director compensation policy does not provide for stock option or other equity award grants, our board of directors expects to make annual equity grants to our independent directors. No additional fees are paid for attendance at meetings. During 2023, we also paid the following additional annual retainers for service as committee chairs and for our Lead Independent Director:
NON-EMPLOYEE DIRECTOR COMPENSATION TABLE
| Lead Independent Director | $5,000 | per annum | | Audit Committee Chair | $5,000 | per annum | | Compensation Committee Chair | $5,000 | per annum | | Nominating and Governance Committee Chair | $2,500 | per annum |
NON-EMPLOYEE DIRECTOR COMPENSATION TABLE
For 2024, we will continue to pay each non-employee director an annual retainer of $45,000 and pay annual retainers for service as our committee chairs and for our Lead Independent Director as conveyed in the table above. The board also expects to issue equity grants to its directors for their service to the board. Mr. Goepel, as a director who is also our employee, does not receive any separate cash or equity compensation for his service as a director.
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS The following table provides information as of December 31, 2023 with respect to shares of our common stock that we may issue under our existing equity compensation plans (share amounts in thousands):
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
| | A | B | C | | | Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants, and Rights | Weighted Average Exercise Price of Outstanding Options, Warrants, and Rights | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column A) | | Equity Compensation Plan Approved by Stockholders(1) | 2,220 | $4.60 | 1,733 | | Equity Compensation Plans Not Approved by Stockholders(2) | — | — | — | | Total | 2,220 | $4.60 | 1,733 |
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
(1) Consists of stock options, restricted stock units, and performance stock units (adjusted for performance by a probability factor of 1.87) as of December 31, 2023. (2) Our stockholders have previously approved our existing equity compensation plan. The Board of Directors recommends voting “FOR” approval of the amendment to the Asure Software, Inc. Employee Stock Purchase Plan to increase the number of shares of common stock authorized for issuance under the Employee Stock Purchase Plan by 400,000 shares.
SUMMARY COMPENSATION TABLE
SUMMARY COMPENSATION TABLE The following table shows the compensation awarded or paid to, or earned by, our Chief Executive Officer and our two most highly compensated executive officers serving in such capacity on December 31, 2023. We refer to these employees collectively as our “named executive officers.”
SUMMARY COMPENSATION TABLE
| Name and Principal Position | Year | Salary | Bonus(a) | Stock Awards(b) | Option Awards(b) | Non-Equity Incentive Plan Compensation | All Other Compensation(c) | Total | | Patrick Goepel | 2023 | $425,750 | $816,000 | $1,361,815 | $— | $— | $29,700 | $2,633,265 | | Chief Executive Officer | 2022 | $351,200 | $425,000 | $— | $263,218 | $— | $27,450 | $1,066,868 | | Eyal Goldstein | 2023 | $400,750 | $614,400 | $1,225,634 | $— | $— | $80,340 | $2,321,124 | | Chief Revenue Officer | 2022 | $326,200 | $500,000 | $— | $116,986 | $— | $75,390 | $1,018,576 | | John Pence | 2023 | $370,750 | $497,280 | $817,089 | $— | $— | $29,700 | $1,714,819 | | Chief Financial Officer | 2022 | $322,033 | $259,000 | $— | $175,478 | $— | $27,450 | $783,962 |
SUMMARY COMPENSATION TABLE
(a)Constitutes annual performance-based bonuses paid to the named executive officer pursuant to the Company’s performance-based cash bonus program in which each of our named executive officers participates and includes amounts earned in 2022 but paid in 2023 and earned in 2023 but paid in 2024. (b)The amounts reported in this column represent the aggregate value of the restricted stock units, performance stock units (adjusted for performance by a probability factor of 1.87) and stock option awards granted based on their grant date fair value, as determined in accordance with the share-based payment accounting guidance under ASC 718. Refer to Note 9, “Stockholders’ Equity,” in the Notes to the Consolidated Financial Statements appearing in our annual report on Form 10-K filed on February 26, 2024 for the relevant assumptions used to determine the valuation of our stock awards. (c)Amounts in this column include the dollar value of any non-elective safe harbor contributions made by the Company to the 401(k) account of the named executive officer during the calendar year, a discretionary profit sharing contribution per executive officer earned in the year reported, but paid in the following year and living expenses for Mr. Goldstein’s apartment in Austin, Texas of approximately $51,000 and $47,000 during calendar years 2023 and 2022, respectively.
OUTSTANDING EQUITY AWARDS AT YEAR END TABLE
OUTSTANDING EQUITY AWARDS AT YEAR END TABLE The following table sets forth information concerning unexercised options and stock awards for each of the named executive officers listed in the Summary Compensation Table, outstanding as of December 31, 2023:
OUTSTANDING EQUITY AWARDS AT YEAR END TABLE
| | | Option Awards | | | | Stock Awards | | | Name | Grant Date | Number of Securities Underlying Unexercised Options Exercisable | Number of Securities Underlying Unexercised Options Unexercisable | Option Exercise Price | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested | Market Value of Shares or Units of Stock That Have Not Vested | | Patrick Goepel | 6/30/2020(1) | 150,000 | — | $6.43 | 6/30/2025 | | | | | 5/13/2021(2) | 51,669 | 8,331 | $7.86 | 5/13/2026 | | | | | 3/16/2022(4) | 52,513 | 37,487 | $6.74 | 3/16/2027 | | | | | 1/1/2023(5) | — | — | $— | | 50,000 | $476,000 | | | 1/1/2023(6) | — | — | $— | | 100,000 | $952,000 | | Eyal Goldstein | 9/2/2019 | 10,000 | — | $6.44 | 9/2/2024 | | | | | 6/30/2020(1) | 60,000 | — | $6.43 | 6/30/2025 | | | | | 5/13/2021(2) | 51,669 | 8,331 | $7.86 | 5/13/2026 | | | | | 12/27/2021(3) | 66,674 | 33,326 | $7.72 | 12/27/2026 | | | | | 3/16/2022(4) | 23,335 | 16,665 | $6.74 | 3/16/2027 | | | | | 1/1/2023(5) | — | — | $— | | 45,000 | $428,400 | | | 1/1/2023(6) | — | — | $— | | 90,000 | $856,800 | | John Pence | 11/10/2020(1) | 75,000 | — | $6.95 | 11/10/2025 | | | | | 5/13/2021(2) | 51,669 | 8,331 | $7.86 | 5/13/2026 | | | | | 3/16/2022(4) | 35,009 | 24,991 | $6.74 | 3/16/2027 | | | | | 1/1/2023(5) | — | — | $— | | 30,000 | $285,600 | | | 1/1/2023(6) | — | — | $— | | 60,000 | $571,200 |
OUTSTANDING EQUITY AWARDS AT YEAR END TABLE
(1)Option vests and becomes exercisable in respect of 33% of the shares underlying the option on the first anniversary of the grant date and in respect of 2.78% of the shares underlying the option monthly thereafter, in each case, subject to the executive’s continued service to the Company through the applicable vesting date. (2)Represents grant of non-qualified stock options issued to Mr. Goepel, Mr. Goldstein, and Mr. Pence on May 13, 2021, which non-qualified stock options vest 33% on the first anniversary of the grant date and the remaining shares vest over a period of two years in equal quarterly installments, with the last such vesting date being the third anniversary of the grant date. (3)Represents grant of non-qualified stock options issued to Mr. Goldstein on December 27, 2021, which non-qualified stock options vest 33% on the first anniversary of the grant date and the remaining shares vest over a period of two years in equal quarterly installments, with the last such vesting date being the third anniversary of the grant date. (4)Represents grant of non-qualified stock options issued to Mr. Goepel, Mr. Goldstein, and Mr. Pence on March 16, 2022, which non-qualified stock options vest 33% on the first anniversary of the grant date and the remaining shares vest over a period of two years in equal monthly installments, with the last such vesting date being the third anniversary of the grant date. (5)Represents grant of restricted stock units that vest 33% on the first anniversary of the grant date and the remaining shares vest over a period of two years in equal quarterly installments, with the last such vesting date being the third anniversary of the grant date. The market value of the restricted stock units reported in these columns is based on the closing market price of our stock on December 31, 2023, which was $9.52. (6)Represents grant of performance stock units, which shall be paid in restricted stock units at a conversion rate of 1 performance stock unit equals 1 restricted stock unit. The number of restricted stock units into which the performance stock units convert will be a sliding scale between 0% to 200% of the target amount based on the achievement of certain performance metrics. The restricted stock units will vest 1/3 on the conversion date, 1/3 vest on January 2, 2025, and the remaining 1/3 vest on January 2, 2026. The market value of the restricted stock units reported in these columns is based on the closing market price of our stock on December 31, 2023, which was $9.52.
PAY VERSUS PERFORMANCE DISCLOSURE
PAY VERSUS PERFORMANCE DISCLOSURE The following table presents, for each of the three most recent years:
PAY VERSUS PERFORMANCE DISCLOSURE
| ◦total compensation, as calculated in the Summary Compensation Table (“SCT”), for our CEO (“Principal Executive Officer” or “PEO”) and an average for our other Named Executive Officers (“Non-PEO NEOs”); | | ◦compensation actually paid (“CAP”) to the PEO and Non-PEO NEOs, an SEC prescribed calculation which adjusts total compensation for the items described below and which does not equate to realized compensation; | | ◦our cumulative total shareholder return since the last trading day before the earliest year presented; and | | ◦our net income. |
Pay Versus Performance Table
Pay Versus Performance Table Included in the table below is the annual compensation paid to our executives and our financial performance for each of the three previous years.
Pay Versus Performance Table
| Year | Summary Compensation Table Total for PEO(1) | Compensation Actually Paid to PEO(3) | Average Summary Compensation Table Total for Non-PEO Named Executive Officers(2) | Average Compensation Actually Paid to Non-PEO Named Executive Officers(3) | Value of Initial Fixed $100 Investment Based On: Total Shareholder Return(4) | Net (Loss) Income (in thousands) | | (a) | (b) | (c) | (d) | (e) | (f) | (g) | | 2023 | $2,633,265 | $3,549,603 | $2,017,972 | $2,765,159 | $101.93 | $(9,214) | | 2022 | $1,066,868 | $1,339,783 | $901,269 | $1,196,313 | $119.28 | $(14,466) | | 2021 | $794,062 | $1,266,074 | $894,685 | $1,192,339 | $110.28 | $3,193 |
Pay Versus Performance Table
(1)For the years 2023, 2022 and 2021, this is the total compensation, as disclosed in the Summary Compensation Table above, for Mr. Goepel, our Principal Executive Officer (“PEO”). (2)For the years 2023, 2022 and 2021, this is the average total compensation, as disclosed in the Summary Compensation Table above, for Mr. Goldstein and Mr. Pence, our non-PEO Named Executive Officers. (3)Compensation Actually Paid is the Summary Compensation Table total for the PEO (column (b) above) and Average Summary Compensation Table total for the Non-PEO NEOs (column (d) above), as applicable, with the following adjustments to the value of equity adjusted as follows pursuant to Item 402(v)(2)(iii)(C) of Regulations S-K:
Pay Versus Performance Table
| | 2023 | 2022 | 2021 | 2023 | 2022 | 2021 | | | | | | Non-PEO | Non-PEO | Non-PEO | | | PEO | PEO | PEO | (Average) | (Average) | (Average) | | SCT Total Compensation | $2,633,265 | $1,066,868 | $794,062 | $2,017,972 | $901,269 | $894,685 | | Subtract: Grant date fair value of equity awards granted during the covered year | (1,361,815) | (263,218) | (210,511) | (1,021,361) | (146,232) | (378,164) | | Add: Fair value as of end of covered year of equity awards granted during covered year that were outstanding and unvested as of end of covered year | 1,428,000 | 345,674 | 161,273 | 1,071,000 | 192,042 | 326,608 | | Add: Change in fair value from end of prior year to end of current year for equity awards granted in prior years that were outstanding and unvested at end of current year | 6,982 | 8,862 | (39,133) | 8,384 | (1,561) | (16,934) | | Add: Fair value as of vesting date of equity awards that were granted and vested in same year | — | — | — | — | — | — | | Add: Change in fair value from end of prior year to vesting date of equity awards granted in prior years that vested in covered year | 843,171 | 181,597 | 560,383 | 689,164 | 250,795 | 366,144 | | Subtract: Fair value at end of prior year of equity awards granted in prior years that failed to vest (forfeited) in covered year | — | — | — | — | — | — | | Add: Dollar amount of dividends or other earnings paid on equity awards in covered year prior to vesting date that are not included in total compensation for covered year | — | — | — | — | — | — | | Compensation Actually Paid | $3,549,603 | $1,339,783 | $1,266,074 | $2,765,159 | $1,196,313 | $1,192,339 |
Pay Versus Performance Table
(4)The value is based on a fixed investment of one hundred dollars in our common stock measured from the market close on December 31, 2020 (the last trading day of 2020) through and including the end of the fiscal year for each year reported in the table.
Analysis of the Information Presented in the Pay Versus Performance Table
Analysis of the Information Presented in the Pay Versus Performance Table Our board and Compensation Committee generally seek to align the interests of stockholders with our named executive officers by incentivizing long-term performance and through the use of short-term cash incentives. Therefore, we do not specifically align our performance measures with “compensation actually paid” (as computed in accordance with Item 402(v) of Regulation S-K) for a particular year and the Compensation Committee did not consider this information in making its executive compensation decisions. Instead our executives were paid in the years presented above based on the achievement of annual corporate goals, which are focused on driving recurring revenue and adjusted EBITDA generation. Adjusted EBITDA is a non-GAAP financial metric to encourage activities that support long-term performance of total stockholder return, our executives are compensated at least annually with service-based restricted stock units or stock options to ensure that their interests are aligned with those of our stockholders. In accordance with Item 402(v) of Regulation S-K, we are providing the following descriptions of the relationships between information presented in the Pay Versus Performance table. Compensation Actually Paid and Net Income (Loss) The Company does not look to net (loss) income as a performance measure for its executive compensation program and instead looks at other financial metrics, such as recurring revenue and adjusted EBITDA (which is a non-GAAP number) to evaluate the Company’s performance. From 2021 to 2023 the Company went from having net income of $3,193,000 (which included $18,845,000 of extraordinary gains) to a net loss of $14,466,000 in 2022, and to a net loss of $9,214,000 in 2023. Without the extraordinary gains, the Company would have had a net loss of $15,652,000 in 2021. Compensation actually paid for both our PEO and non-PEO NEOs increased between 2021 and 2023. The increase in compensation actually paid to our named executive officers from 2023 over 2021 generally reflects cash bonuses for the achievement of annual corporate and strategic objectives. The increase in compensation actually paid to our named executive officers compared to the summary compensation table primarily reflects the increase in the value of our common stock as compared to the grant date fair value of their equity awards. Compensation Actually Paid and Cumulative TSR We utilize several performance measures to align executive compensation with the Company’s performance, but historically have not used financial performance measures such as total shareholder return. As described under the Narrative to Summary Compensation Table section of this Proxy Statement, part of the compensation our NEOs are eligible to receive consists of annual performance-based cash bonuses and equity awards that are designed to provide appropriate incentives to our executives to achieve defined annual corporate goals. The Board believes that the key performance measurements are recurring revenue growth and adjusted EBITDA generation and we align our performance metrics and payment of incentives to our NEOs based on these metrics, which the Company believes are the primary drivers that would impact the Company’s enterprise valuation and therefore, ultimately, total stockholder return.