DEF 14A of DraftKings Inc.
Filed Mar 22, 2024 · FY20230001104659-24-037879
PROPOSAL NO. 1 — ELECTION OF DIRECTORS
PROPOSAL NO. 1 — ELECTION OF DIRECTORS Our shareholders will elect a board of ten directors at the Annual Meeting. Each of the directors is expected to hold office until the next annual meeting of our shareholders, or until his or her respective successor shall be duly elected and qualified. The affirmative vote of a plurality of the voting power represented at the Annual Meeting and entitled to vote on directors is necessary to elect a director. This means that the ten nominees who receive the most votes will be elected to the ten open directorships, even if they get less than a majority of the votes cast. Each nominee has consented to his or her nomination and has advised us that he or she intends to serve if elected. If at the time of the Annual Meeting one or more of the nominees have become unable to serve: (i) shares represented by proxies will be voted for the remaining nominees and for any substitute nominee or nominees; or (ii) the Board of Directors may, in accordance with our Bylaws, reduce the size of the Board of Directors or may leave a vacancy until a nominee is identified. Immediately prior to the consummation of the transactions contemplated by the definitive agreement and plan of merger, dated August 9, 2021, by and among the Company, DraftKings Holdings Inc. (formerly DraftKings Inc.), a Nevada corporation (“Old DK Parent”), Golden Nugget Online Gaming, Inc., a Delaware corporation, and certain other parties thereto, each of our nominees served on the board of directors of Old DK Parent, of which the Company is the successor registrant. The following is a brief biography of each nominee for director and a discussion of the specific experience, qualifications, attributes, or skills for each nominee.
PROPOSAL NO. 1 — ELECTION OF DIRECTORS
| Name | Position | Age | | Jason D. Robins | Chief Executive Officer and Chairman of the Board | 43 | | Harry Evans Sloan | Vice Chairman of the Board | 74 | | Matthew Kalish | President, DraftKings North America and Director | 42 | | Paul Liberman | President, Global Technology and Product and Director | 40 | | Woodrow H. Levin | Director | 45 | | Jocelyn Moore | Director | 47 | | Ryan R. Moore | Director | 50 | | Valerie Mosley | Director | 64 | | Steven J. Murray | Director | 55 | | Marni M. Walden | Director | 57 |
PROPOSAL NO. 1 — ELECTION OF DIRECTORS
Jason D. Robins is our Chief Executive Officer and Chairman of the Board. Mr. Robins co-founded the Company in December 2011 and served as its Chief Executive Officer from its inception, and has served as our Chief Executive Officer and Chairman of the Board since April 2020. Mr. Robins oversees the Company’s strategy and operations, while also driving financings and strategic initiatives. He has built a reputation for expanding DraftKings’ reach across numerous platforms through wide-ranging, forward-thinking strategic relationships. Mr. Robins has led efforts at DraftKings to work with policy makers and regulators to pass fantasy sports, sports betting and iGaming legislation. Mr. Robins also serves on the board of directors of Extend, Inc. (“Extend”), which is currently engaged in the business of providing extended warranty service contracts for consumer products. Mr. Robins also served on the board of directors of FirstMark Horizon Acquisition Corp., which was a special-purpose acquisition company formed for the purpose of effecting a merger or similar business combination with one or more businesses primarily within technology industries located in the United States, from September 2020 until the completion of its initial business combination with Starry, Inc. in March 2022. Mr. Robins was also a director of Horizon Acquisition Corporation II, which was a special-purpose acquisition company formed for the purpose of effecting a merger or similar business combination with one or more businesses primarily within technology industries located in the United States, from October 2020 until April 2023. Mr. Robins attended Duke University, where he received his B.S. in Economics and Computer Science and a minor in math. We believe Mr. Robins is qualified to serve on our Board due, among other things, to the perspective and experience he brings as our Chief Executive Officer and as a co-founder. Harry Evans Sloan has served on our Board since April 2020 and serves as Vice Chairman of DraftKings. Mr. Sloan is a media investor, entrepreneur and studio executive. Since 2011, Mr. Sloan has co-founded eight special purpose acquisition companies with his partners, including Jeff Sagansky and Eli Baker, raising aggregate gross proceeds of over $5 billion. Most recently, Mr. Sloan served as Chairman and Founder of Screaming Eagle Acquisition Corp. (NASDAQ: SCRM), which completed its $750 million IPO in January 2022. In December 2023, Screaming Eagle announced an agreement to combine with the studio business of Lions Gate Entertainment Corp. (NYSE: LGF), which comprises its Television Studio and Motion Picture Group segments and one of the world’s most valuable film and television libraries, to launch Lionsgate Studios Corp. The business combination values Lionsgate Studios Corp. at an enterprise value of approximately $4.6 billion. Mr. Sloan serves on the board of directors, compensation committee and strategic advisory committee of Lions Gate Entertainment Corp. Mr. Sloan served as Chairman and Founder of Soaring Eagle Acquisition Corp. (NASDAQ: SRNG), which completed its $1.725 billion IPO in February 2021 and three months later announced a merger with Boston-based Ginkgo Bioworks Inc., later renamed Ginkgo Bioworks Holdings, Inc. (NYSE: DNA), in a deal valued at $17.5 billion and serves on their board. Prior to Soaring Eagle, he served as Chief Executive Officer and Chairman of Flying Eagle Acquisition Corp., which raised $690 million in its initial public offering in March 2020, and, in December 2020, completed its initial business combination with Skillz Inc. (NYSE: SKLZ), a technology company that enables game developers to monetize their content through fun and fair multi-player competition. Mr. Sloan was a director of Skillz Inc. until August 2022. Prior to Flying Eagle Acquisition Corp., Mr. Sloan was a founding investor of Diamond Eagle Acquisition Corp., which raised $400 million in its initial public offering in May 2019 and in April 2020 completed its initial business combination with DraftKings Inc., a Delaware corporation. Prior to Diamond Eagle Acquisition Corp., Mr. Sloan was a founding investor of Platinum Eagle Acquisition Corp., which raised $325 million in its initial public offering in January 2018, completed its initial business combination in March 2019 with Target Logistics Management, LLC and RL Signor Holdings, LLC and changed its name to Target Hospitality Corp. (NASDAQ: TH). Target Hospitality Corp. is a vertically integrated specialty rental and hospitality services company. Prior to Platinum Eagle Acquisition Corp., Mr. Sloan was a founding investor of Double Eagle Acquisition Corp., which raised $500 million in its initial public offering in September 2015. Double Eagle Acquisition Corp. completed its business combination in November 2017, in which its wholly-owned subsidiary acquired 90% of the shares of Williams Scotsman International, Inc. In the transaction, Double Eagle Acquisition Corp. changed its name to WillScot Corporation and subsequently to WillScot Mobile Mini Holdings Corp. (NASDAQ: WSC). WillScot Mobile Mini Holdings Corp. is a specialty rental services market leader providing modular space and portable storage solutions to diverse end markets across North America. From October 2005 to August 2009, Mr. Sloan served as Chairman and Chief Executive Officer of Metro-Goldwyn-Mayer, Inc., a motion picture, television, home entertainment, and theatrical production and distribution company, and thereafter continued as non-executive chairman until December 2010. Throughout his entrepreneurial career, Mr. Sloan was responsible for the creation or sponsorship of three successful public companies in the media and entertainment industries: Lions Gate Entertainment Corp., an independent motion picture and television production company, New World Entertainment Ltd., an independent motion picture and television production company, and SBS Broadcasting, S.A., a European broadcasting group, operating commercial television, premium pay channels, radio stations and related print businesses in Western and Central and Eastern Europe, which he founded in 1990. He has also served on the board of ZeniMax Media Inc., an independent producer of interactive gaming and web content, since 1999. Mr. Sloan began his career as an entertainment lawyer with Sloan, Kuppin and Ament, a law firm he founded. He currently serves on the University of California, Los Angeles Anderson School of Management Board of Visitors, the Executive Board of the UCLA School of Theatre, Film and Television, the Harry and Florence Sloan Family Foundation, and the board of directors of the Pacific Council on International Policy. He is also an Associate Professor at the UCLA Anderson School of Management. Mr. Sloan received his J.D. from Loyola Law School and his B.A. from the University of California, Los Angeles. We believe Mr. Sloan is qualified to serve on our Board due, among other things, to his extensive experience as an international media investor, entrepreneur and studio executive and his ability to identify key investment opportunities with significant returns for his partners. Matthew Kalish is our President, DraftKings North America, and a director. Mr. Kalish co-founded the Company in December of 2011 and served as its Chief Revenue Officer from 2014 until December 2019.
PROPOSAL NO. 1 — ELECTION OF DIRECTORS
In December 2019, Mr. Kalish was appointed President, DraftKings North America. Mr. Kalish has served on our Board since April 2020. Mr. Kalish’s areas of responsibility have grown consistently to now oversee the performance of DraftKings’ Sportsbook, iGaming and Daily Fantasy Sports offerings, and he leads DraftKings’ operations, marketing and customer experience departments. Mr. Kalish focuses on developing and managing high-performing offerings and promotions that users love, and bringing those offerings to market in order to drive user base growth and loyalty. The innovation under Mr. Kalish’s guidance has helped DraftKings grow its customer base significantly. Under Mr. Kalish’s oversight, DraftKings has grown to offer a broad variety of sports and game variants in Daily Fantasy Sports, as well as highly competitive Sportsbook and iGaming offerings, which have resulted in DraftKings achieving a leadership position in the rapidly expanding U.S. real-money gaming landscape. Mr. Kalish’s passion for sports, analytics and game design has been instrumental in growing DraftKings from a small Boston start-up to a digital sports and entertainment enterprise. Mr. Kalish received his M.B.A. from Boston College and his B.A. in Computer Science and Economics from Columbia University. We believe Mr. Kalish is qualified to serve on our Board due, among other things, to the perspective and experience he brings as our President, DraftKings North America and as a co-founder. Paul Liberman is our President, Global Technology and Product, and a director. Mr. Liberman co-founded the Company in December 2011 and served as its Chief Operations Officer (“COO”) from 2015 to December 2019. In December 2019, Mr. Liberman was appointed President, Global Technology and Product. Mr. Liberman has served on our Board since April 2020. He oversees our product development while leading efforts in maintaining the Company’s current product offerings. He acted as the Chief Technology Officer of DK Crown Holdings Inc. (formerly DraftKings Inc.) (“DK DE”) from 2011 to 2013 and subsequently acted as its Chief Marketing Officer before becoming COO. Mr. Liberman’s data-driven mindset has been instrumental in growing DraftKings from a small Boston start-up to a digital sports and entertainment enterprise. Under his leadership, Mr. Liberman’s team has developed award-winning, stand-alone apps and product offerings including DraftKings’ DK Live and Leagues, DraftKings Daily Fantasy Sports app and, most recently, the DraftKings Sportsbook and iGaming platforms. Mr. Liberman also serves as an advisor to Extend, providing input and guidance on product and strategy. Mr. Liberman attended Worcester Polytechnic Institute where he received a B.S. in Electrical Engineering and minor in Computer Science. We believe Mr. Liberman is qualified to serve on our Board due, among other things, to the perspective and experience he brings as our President, Global Technology and Product and as a co-founder. Woodrow H. Levin is the founder and has served as Chief Executive Officer of Extend, which offers an API-first solution for merchants to offer extended warranties and protection plans, and 3.0 Capital GP, LLC, which is a multi-strategy crypto asset hedge fund. Mr. Levin has served on our Board since April 2020. Prior to founding Extend in November 2018 and 3.0 Capital GP, LLC in December 2017, Mr. Levin served as Vice President of growth at DocuSign, Inc., which allows organizations to digitally prepare, sign, act on, and manage agreements. In addition, Mr. Levin served as the founder and Chief Executive Officer of Estate Assist, Inc., from February 2014 to September 2015 (at which time it was acquired), which offers digital estate planning assistance and BringIt, Inc., from June 2009 to September 2012 (at which time it was acquired), which provides a virtual currency casino and arcade. Mr. Levin served as Director Emerging Business — Office of the CTO at International Game Technology, Inc., which manufactures and distributes slot machines and other gaming technology. Mr. Levin currently serves as a member of the board of directors of Extend (since November 2018). He received his J.D. from Chicago-Kent College of Law, Illinois Institute of Technology, and his B.A. from the University of Wisconsin. We believe Mr. Levin is qualified to serve on our Board due, among other things, to his extensive experience and knowledge as an executive for technology companies, and his service as a member of our Board. Jocelyn Moore has served on our Board since September 2020 and is currently Principal of Jocelyn Moore Consulting, LLC, a boutique corporate affairs advisory firm. She serves on the board of directors of OppFi, a publicly traded financial technology company (NYSE: OPFI), the board of directors of Omaze, a private fundraising platform that offers once-in-a-lifetime experiences and prizes to support world-changing nonprofits, and the board of directors of Pallas Advisors, a strategic advisory firm specializing in national security, defense, and innovation. In October 2021, Ms. J. Moore was appointed by the Biden administration to serve on the board of directors of the First Responder Network (FirstNet) Authority, a unique public-private partnership created after September 11th to provide a high-speed, nationwide, wireless broadband network for public safety. As Principal of Jocelyn Moore Consulting, LLC since May 2020, Ms. J. Moore has advised CEOs, executive teams, and boards of directors on strategic communications, crisis and risk management, regulatory affairs, corporate social responsibility, operations, organizational change, and diversity, equity, inclusion, and belonging. Ms. J. Moore also served on the board of directors and audit committee of Games & Esports Experience Acquisition Corp., a special-purpose acquisition company formed for the purpose of effecting a merger or similar business combination with one or more businesses primarily in the interactive media industry and operating within or adjacent to competitive gaming and esports, from June 2022 until approximately April 2023. From January 2022 until June 2023, Ms. J. Moore was Senior Managing Director, Corporate Affairs, and a member of the executive committee at Pretium. From June 2018 until April 2020, Ms. J. Moore was Executive Vice President of Communications and Public Affairs at the National Football League (“NFL”). As the NFL’s Global Chief Communications Officer, she was a member of the executive leadership team and responsible for managing the league’s corporate affairs. From July 2016 to June 2018, Ms. J. Moore was Senior Vice President of Public Policy and Government Affairs at the NFL. As Head of the NFL’s Washington, D.C. office, she led the league’s public policy agenda and managed the league’s political action committee. She serves as a director on several nonprofit boards: the West Virginia University Health System board of directors, where she is a member of the Quality & Patient Safety Committee; the University of Florida Foundation National board of directors, where she is as a member of the audit and nominating committees; and the DC Rape Crisis Center board of directors, where she is a member of the fundraising committee. Ms. J. Moore holds a B.A. in English and an M.Ed. in Student Personnel in Higher Education, both from the University of Florida. We believe Ms. J. Moore is qualified to serve on our Board due, among other things, to her experience and background in managing large-scale corporations, including experience in the front office of the NFL, as well as her service as a member of the board of directors of numerous entities.
PROPOSAL NO. 1 — ELECTION OF DIRECTORS
Ryan R. Moore co-founded Accomplice Management, LLC, a venture capital firm, in January 2015 and served as a General Partner there until December 2023. Mr. R. Moore is also a founding investor in several technology companies. Mr. R. Moore has served on our Board since April 2020. Mr. R. Moore began his career at SoftBank Capital Partners LP (“Softbank”), a venture capital firm. Later, he was a General Partner of GrandBanks Capital, which invested primarily in early stage technology companies. He joined Atlas Advisors, Inc., the predecessor to Accomplice, which focuses its investments on early-stage companies, where he was a Partner from August 2011 to December of 2014. Mr. R. Moore received his A.B. in Economics from Princeton University. We believe Mr. R. Moore is qualified to serve on our Board due, among other things, to his extensive investment experience and background, including experience in the eSports industry, as well as his service as a member of the board of directors of DK DE and numerous other companies. Valerie Mosley has served on our Board since September 2020. Ms. Mosley is the Founder of Upward Wealth, a fin-tech platform that helps hardworking under-resourced Americans know their worth and grow their wealth. Previously, from January 1992 until June 2012, Ms. Mosley served in multiple roles at Wellington Management Company, LLP (“Wellington Management”), a trillion-dollar global money management firm, including as Senior Vice President, Partner, Portfolio Manager and Investment Strategist. During her 20-year tenure at Wellington Management, she directly managed billions of dollars for clients. Ms. Mosley sat on several of the firm’s investment committees, the risk committee and chaired the firm’s Industry Strategy Group, charged with taking a long-term perspective to identify headwinds and tailwinds impacting industries. Ms. Mosley currently serves on the board of directors of Eaton Vance’s family of mutual funds, where she is chair of the governance committee and a member of the portfolio management committee; Envestnet, Inc. (NYSE: ENV), a wealth management services and technology company, where she is a member of the nominating and governance committee and compliance and information security committee; McLean Hospital, a world leader in Mental Health; and the Skoll Foundation Investment Committee. Ms. Mosley formerly served on the board of directors of Groupon, Inc. (NASDAQ: GRPN) from April 2020 to August 2022, an online marketplace company, where she was a member of the nominating committee. Ms. Mosley previously served on the board of directors of Caribou, a fin-tech company that refinances automobile loans. Since 2012, Ms. Mosley has advised and invested in companies that add value to investors and society through Valmo Ventures. Ms. Mosley holds a B.A. in History from Duke University and a M.B.A. from the Wharton School of Business at the University of Pennsylvania, with a specialty in finance, and has been recognized in financial circles as one of the outstanding leaders of her time. We believe Ms. Mosley is qualified to serve on our Board due, among other things, to her extensive investment experience and background, including her experience serving as a member of the boards and committees of several large U.S. public companies. Steven J. Murray is the Managing Partner of Revolution Growth III, LP (together with its affiliates, “Revolution”), a venture capital firm, where he has worked since January 2016. Mr. Murray has served on our Board since April 2020. Prior to joining Revolution, Mr. Murray worked for Softbank, a venture capital firm, from April 1996 to January 2016, where he most recently served as a Partner. Prior to joining Softbank, he worked for Deloitte & Touche LLP, where he specialized in high-growth technology based businesses. Mr. Murray currently serves as a member of the board of directors of a number of public and private Revolution portfolio companies, including: Glowforge Inc. (since August 2019), which manufactures 3D laser printers; Interactions Corporation (since June 2013), which uses artificial intelligence to create virtual assistant customer service products for companies; InVenture Capital Corporation d/b/a Tala (since March 2018), which provides financial products and services to underbanked individuals in developing nations; Orchard Technologies, Inc. (since June 2022), which is a direct to consumer based service to make easier the process to buy and sell homes; and ZephyrAI, Inc. (since December 2023), which harnesses real world medical data to transform precision medicine. From June 2013 until January 2021, Mr. Murray served as a member of the board of directors, audit committee and nominating and governance committee of Fitbit, Inc. (NYSE: FIT), which offers wireless-enabled wearable technology devices and activity trackers. From June 2018 to July 2022, Mr. Murray also served as a member of the board of directors and audit committee of BigCommerce Holdings Inc. (NASDAQ: BIGC), which offers a SaaS ecommerce Platform. From October 2022 to January 2024, Mr. Murray also served as member of the board of directors of Uptake Inc., which provides software and services to major industries to increase productivity, security, safety and reliability. Mr. Murray received his B.S. in Accounting from Boston College in 1990. We believe Mr. Murray is qualified to serve on our Board due, among other things, to his experience as a member of the board of directors of both public and private companies, including DK DE, and expertise in fundraising, management of high-growth companies and all levels of corporate governance.
PROPOSAL NO. 1 — ELECTION OF DIRECTORS
Marni M. Walden retired from Verizon Communications Inc. (NYSE: VZ) (“Verizon”), which provides wireless phone services, Internet access, global enterprise solutions and digital television services, in February 2018, where she most recently served as a Strategic Advisor from January 2018 to February 2018, and prior to that, served as President and Executive Vice President of Global Media and Telematics from March 2016 to January 2018, in which she built new revenue streams for Verizon and guided strategy for Verizon Media and the Connected Vehicle business, and as President and Executive Vice President of Product Innovation from May 2014 to March 2016, in which she led global strategy, venture and technology teams across all lines of business for Verizon. During her tenure at Verizon, as the company’s top-ranking female executive, Ms. Walden led multiple acquisitions and integrations including Yahoo, AOL, Fleetmatics, Telogis, Altel and RCC. Ms. Walden served as a director of DK DE from October 2018 to April 2020 and has served on the DraftKings board of directors since April 2020. Ms. Walden’s prior experiences include working for other wireless service providers including AT&T Inc. (NYSE: T), McCaw Communications, LLC and General Cellular Corporation. In addition, she served as chief operating officer, from January 2011 to May 2014, and separately as chief marketing officer, from October 2010 to January 2011, of Verizon Wireless, Inc. (f/k/a Cellco Partnership), a wireless telecommunications carrier. Ms. Walden currently serves as a member of the board of directors of Globetouch Inc. d/b/a Airlinq Inc. (since February 2017), which develops and deploys large scale connected applications around smart mobility and ecosystem monetization, and Persado Inc. (since June 2018), which uses artificial intelligence to generate language for digital marketing. Ms. Walden formerly served on the board of directors of Loon LLC from January 2019 to January 2021, which, prior to its liquidation, partnered with mobile network operators globally to expand the reach of their LTE service; ironSource Ltd. from May 2021 to November 2022, which assists mobile content creators in expanding businesses in the app economy; and 4C Insights, Inc. from April 2018 until July 2020, which provides a self-service intelligence platform for marketers. She also serves as an advisor to Goldman Sachs (NYSE: GS) and New Mountain Capital, as well as various private companies, including Transformco, Opensignal Limited. Inc., and Life Impact Solutions, Inc. d/b/a Mobilize Solutions. Ms. Walden attended California State University, Chico, where she majored in English and minored in Communications. We believe Ms. Walden is qualified to serve on our Board due, among other things, to her over 20 years of experience in telecommunications, technology and media, including her leadership roles at Verizon, where she gained extensive experience managing multi-billion dollar lines of business and leading transformative M&A activities and digital transformations, as well as her service as a member of the board of directors of DK DE and numerous other public and private companies. ***
Other Information about the Board of Directors
Other Information about the Board of Directors
Incentivizing Long-Term Performance
Incentivizing Long-Term Performance DraftKings delivered impressive financial results in 2023. For fiscal year 2023, we generated 64% year-over-year revenue growth, a significant increase in gross profit and positive Contribution Profit2 on a consolidated basis. Our executives have helped position DraftKings to generate positive Adjusted EBITDA in fiscal year 2024 as a result of the continued strong revenue growth and gross margin rate expansion, “Contribution Profit” is a non-GAAP measure that we define and calculate as Gross Profit before depreciation and amortization, acquisition amortization, stock-based compensation, and external marketing expense. coupled with marketing efficiencies and scale benefits across our fixed cost base. As such, our compensation programs continue to include performance measures to align executive actions with long-term shareholder interests.
2023 Compensation Program Actions
2023 Compensation Program Actions The Compensation Committee is appointed by the Board to discharge certain of the Board’s responsibilities relating to compensation, including administering the Company’s equity plans, approving equity grants to the CEO, recommending to the Board equity grants for other executive officers, determining the compensation of our CEO, and recommending to the Board the compensation of our other executive officers. As discussed above in “Compensation Philosophy and Program,” a significant part of the Compensation Committee’s role in determining compensation is aligning management’s interests with the Company’s business goals and long-term shareholder interests. In 2023, the Compensation Committee awarded annual bonuses and annual equity refresh awards to NEOs, calibrated to market data, criticality of role, and performance. No new LTIP was established, nor were adjustments made to base salaries or target bonus opportunities for any NEOs.
Review of Pay Relative to 2023 Peer Group
Review of Pay Relative to 2023 Peer Group The Compensation Committee believes that it is important to make decisions informed, in part, by the current practices of comparable public companies with which we compete for top executive talent. The Compensation Committee established our peer group for compensation decisions in 2023 with the assistance of its independent consultant Frederic W. Cook & Co., Inc. (“FW Cook”). FW Cook assessed each element of direct compensation (including base salary, annual bonus and equity incentives) to be provided to our NEOs against other publicly traded information technology, entertainment and gaming, internet and direct marketing and consumer discretionary companies that are of a comparable size to us in terms of revenue and market capitalization. When determining compensation for certain roles, we may index more to one industry than another. Individual compensation packages are determined by experience, performance, criticality to our business operations, the market for the specific role, and retention risks, among other factors. We believe firmly in pay for performance, and that our compensation package should strongly correlate to Company performance and delivering shareholder value. For a discussion of the factors considered in making 2023 compensation decisions, see “2023 Compensation Decisions” below. Our 2023 compensation decisions were reviewed with reference to the following peer group consisting of 19 companies (our “2023 Peer Group”):
Review of Pay Relative to 2023 Peer Group
| Peer Group for 2023 Compensation Decisions | | | | | | MongoDB | Chegg | Churchill Downs | Coupa Software | DocuSign | | Electronic Arts | Etsy | Roku* | HubSpot | Lyft | | Peloton | Okta | Light & Wonder | Snap | Take-Two | | The Trade Desk | PENN Entertainment | Zscaler | Zynga | |
Review of Pay Relative to 2023 Peer Group
In the Company’s definitive proxy statement filed with the SEC on March 24, 2023, the Company inadvertently stated that Roku was removed from its peer group during 2022. In fact, the Company removed Grubhub from its peer group during 2022. In July 2023, the Compensation Committee, with the assistance of FW Cook, re-evaluated the Company’s 2023 Peer Group in light of market movement and trends to ensure it was correctly sized, taking into consideration current and expected market capitalization and revenue. For 2024 compensation decisions, the Compensation Committee removed Coupa and Zynga from our peer group due to these companies being acquired.
Our 2023 Executive Compensation Best Practices
| What We Do | | What We Don’t Do | | | ✓ | Align executive compensation with corporate and individual performance | ✘ | No hedging or short sales of Class A Shares and no transactions involving derivative securities relating to Class A Shares without prior approval from the CLO | | ✓ | Balance short- and long-term incentives to motivate near-term performance, while simultaneously providing significant incentives for long-term results | ✘ | No excise tax “gross-ups” upon change in control | | ✓ | Tie pay to performance via annual bonus and equity awards | ✘ | No “single-trigger” benefits upon change in control | | ✓ | Engage an independent advisor reporting directly to the Compensation Committee | ✘ | No dividend equivalents paid on unvested RSUs or PSUs | | ✓ | Maintain executive holding requirement for certain shares awarded as compensation | ✘ | No discounting, reloading, or re-pricing of Company stock options (“options”) without shareholder approval | | ✓ | Evaluate the risk in our compensation programs | | | | ✓ | Maintain a clawback policy for the recovery of certain erroneously awarded incentive-based compensation | | |
Roles in Executive Compensation Determination and Governance
| Responsible Party | Primary Role and Responsibilities Relating to Compensation Decisions | | Compensation Committee (Composed of independent, non-employee directors) | • Oversees the executive compensation program, policies, and practices, taking into account business goals and strategies, legal and regulatory developments, and evolving best practices • Approves performance goals for purposes of compensation decisions for the NEOs • Conducts an annual evaluation of the CEO’s performance in light of the pre-determined performance goals and determines his compensation • Reviews and approves the CEO’s recommendations for compensation of the other NEOs and executives, making changes when deemed appropriate, and then recommends such compensation to the Board • Reviews our compensation risk assessment • Approves all changes to the composition of the peer group • Reviews and makes recommendations to the Board with respect to director compensation | | Independent Consultant to the Compensation Committee* (FW Cook) | • Provides the Compensation Committee with analysis and advice pertaining to CEO, executive, and director compensation program design, including industry survey analysis, explanation of current and developing best practices, and regulatory changes • Recommends a relevant group of peer companies and appropriate sources of survey data against which to compare the competitiveness and structure of CEO, executive, and director compensation • Analyzes peer companies’ CEO, executive, and director compensation to assist the Compensation Committee in determining the appropriateness and competitiveness of CEO, executive, and director compensation • Reviews any proposed changes to CEO, executive, and director compensation program design • Prepares our compensation risk assessment • Assists with compensation disclosure materials • Provides specific analysis and advice periodically as requested by the Compensation Committee | | Executives | • The CEO recommends to the Compensation Committee annual compensation for the other NEOs and executives based on his assessment of their performance • The CEO and the CLO work with the Compensation Committee chairperson to set agendas, prepare materials for Compensation Committee meetings, and generally attend meetings or portions of meetings, as appropriate, and prepare meeting minutes • The CEO also works with the Chief People Officer in the preparation of materials for Compensation Committee meetings • No member of management is present in Compensation Committee meetings when matters related to his or her individual compensation are under discussion, when the Compensation Committee is approving or deliberating on CEO compensation, or when the Compensation Committee meets in executive sessions |
Base Salary
Base Salary Base salary was the simplest of the three components. The analysis and data utilized to determine base salary revealed several insights, including: • the base salary paid to each NEO, other than the Founders, approximated the median of other executives in comparable leadership roles in the 2023 Peer Group; • 3 of the 19 companies within the 2023 Peer Group had executives that took a nominal (i.e., less than $100,000) salary in 2023; and • the acceptance of a lower base salary by our Founders demonstrated a desire to be a part of our organization for several years and a commitment to medium- and long-term company goals represented by equity versus the short-term goals represented by cash compensation. As noted above, in 2023, the Founders voluntarily agreed to continue to receive base salaries of $1. The base salaries for the other NEOs were the same as the base salaries received in 2022 and 2021. The 2022 and 2023 annual base salaries of our NEOs are displayed in the table below.
2023 Equity Compensation
2023 Equity Compensation 2.
2023 Annual Bonus
2023 Annual Bonus Annual bonuses are designed to incentivize our NEOs to achieve our annual financial objectives. Bonuses are not guaranteed; we must achieve a minimum threshold of GAAP Revenue and Adjusted EBITDA in order for our NEOs to be eligible to receive a bonus payout. In addition, each bonus is eligible to be earned from 0% to 200% of the target bonus based on a pre-approved set of GAAP Revenue and Adjusted EBITDA targets, equally weighted, which were approved in the first quarter of 2023 and are summarized below.
2023 Annual Bonus
| Unadjusted 2023 Annual Bonus Plan Payout Goals (Approved as of February 2023) (amounts in millions) | Minimum(1) | Median | Maximum | Actual Result | | GAAP Revenue | $2,916 | $2,991 | $3,290 | $3,665 | | Adjusted EBITDA(2) | $(425) | $(391) | $(323) | $(151) |
2023 Annual Bonus
(1) Refers to the minimum amount payable for a certain level of performance. If the minimum threshold is not reached, there will not be a bonus payout. (2) Adjusted EBITDA is defined under “Business Highlights” above. Adjusted EBITDA can become increasingly negative as we launch our product offerings in new jurisdictions, given the initial investment required to launch our product offerings in a new jurisdiction. The target amount for each executive was set initially based on their employment agreement and is reviewed annually by the Compensation Committee. When considering the NEO’s target bonus percentage and corresponding amounts, the Compensation Committee evaluated market data as well as internal compensation parity among the executive team. In 2023, our NEOs had the same target bonus amounts as in 2022. For 2023, we offered our NEOs the ability to elect to receive all or a portion, if any, of their earned annual bonus, once the Compensation Committee finalized the certification of the achievement of performance, in the form of fully vested RSUs. Due to the NEOs’ confidence in the Company’s outlook, each of the NEOs elected to receive all of their annual bonus for 2023, after any applicable withholdings and deductions pursuant to benefit plan contributions, in the form of fully vested RSUs, which were granted on March 19, 2024, based on the Compensation Committee’s final certification of the achievement of performance, which was approved on February 12, 2024. NEOs had to be employed on the day the annual bonus was paid to receive any portion of their annual bonus. In 2023, the Compensation Committee determined that the annual bonus program for members of our executive leadership team would include a modifier tied to ongoing Inclusion, Equity and Belonging (“IEB”) initiatives. The modifier, which was intended to be based on the achievement of the Company’s IEB goals in certain focus areas, was contemplated to provide for a full payout of the earned bonus, if the Compensation Committee determined that such goals were achieved, or a payment of 90% of the earned bonus if the Compensation Committee determined that the goals were not achieved. The Compensation Committee has since determined that this modifier is no longer necessary and will not be implemented, among other reasons, due to the Company’s progress with respect to such goals. The 2023 bonus results and the amounts paid out to executives pursuant to such bonus results are summarized in the table below:
2023 Annual Bonus
| | | | 2023 Bonus Payout | | | Executive | Target Bonus ($) | 2023 Bonus Results (% of Target) | Payable in Cash | Payable in RSUs(1) | | Robins | $975,000 | 200% | $— | $1,950,000 | | Kalish | $531,250 | 200% | $— | $1,062,500 | | Liberman | $531,250 | 200% | $— | $1,062,500 | | Dodge | $400,000 | 200% | $— | $800,000 | | Park | $425,000 | 200% | $— | $850,000 |
2023 Annual Bonus
(1) The amounts disclosed in this column are computed in accordance with Financial Accounting Standards Board’s Accounting Standards Codification Topic 718 (“FASB ASC Topic 718”), of fully vested RSUs that were paid to NEOs in respect of their earned 2023 bonuses. 3.
2023 Annual Equity Refresh Awards
2023 Annual Equity Refresh Awards In 2023, annual equity refresh awards were granted based on consideration of the market data provided by FW Cook and the evaluation of each NEO’s performance, contributions, and criticality to the Company. The awards for 2023 were granted in a mix of Time-based Restricted Stock Units (60%) and PSUs (40%). The Time-based Restricted Stock Units are subject to a four-year quarterly vesting schedule. Half of the PSUs vest subject to the Company’s fiscal year 2024 performance (the “2024 PSUs”), with 50% contingent upon the Company’s fiscal year 2024 Normalized Net Revenue3 and 50% contingent upon the Company’s fiscal year 2024 Normalized Adjusted EBITDA4 (collectively, the “2024 PSU Performance Metrics”), payable in early 2025. The other half of the PSUs vest subject to the Company’s fiscal year 2026 performance (the “2026 PSUs”), with 50% contingent upon the Company’s fiscal year 2026 Normalized Net Revenue and 50% contingent upon the Company’s fiscal year 2026 Normalized Adjusted EBITDA (collectively, the “2026 PSU Performance Metrics”), payable in early 2027. The equity grant amounts to our NEOs were calibrated to be competitive with those awarded by our 2023 Peer Group and differentiated based on role, criticality and performance. Normalized Adjusted EBITDA and Normalized Net Revenue targets were set on a same-state basis and, therefore, results from new states, positive or negative, will not be included in determination of achievement of performance targets (except for contributions from certain planned Sportsbook launches in Ohio and Maryland). In the event the Company consummates an acquisition of a company that is projected to have at least $20 million in revenues for the fiscal year in which closing occurs, prior to the end of the applicable performance period, the Normalized Adjusted EBITDA and Normalized Net Revenue targets will be equitably adjusted in accordance with the terms of the applicable award agreements, as determined in the sole discretion of the Board or a committee thereof. Importantly, eligible employees can only vest into their 2024 PSUs if Normalized Adjusted EBITDA for fiscal year 2024 is positive. In the event that positive Normalized Adjusted EBITDA is achieved for 3 “Net Revenue” is calculated as the Company’s revenue per U.S. GAAP as reported in its financial statements. “Normalized Net Revenue” is a non-GAAP measure that we define and calculate as Net Revenue excluding the in-state Net Revenue for all new states not currently operating Online SportsBooks or iGaming businesses as of the Date of Grant, except for Online Sportsbooks which are expected to launch within 12 months in Ohio and Maryland; and excluding for the in-state Net Revenue impact from launching the Golden Nugget branded products in states where DraftKings is currently operating Online Sportsbook or iGaming as of the Date of Grant. “Normalized Adjusted EBITDA” is a non-GAAP measure that we define and calculate as Adjusted EBITDA excluding the in-state “Contribution” impact from all new states not currently operating Online SportsBooks or iGaming businesses as of the Date of Grant, except for Online Sportsbooks which are expected to launch within 12 months in Ohio and Maryland; and excluding the in-state “Contribution” impact from launching the Golden Nugget branded products in states where DraftKings is currently operating Online Sportsbook or iGaming as of the Date of Grant. Contribution is defined as in-state gross profit less fully-allocated external marketing expense. fiscal year 2024, eligible employees can achieve anywhere between 25% and 200% of their granted amount of 2024 PSUs based on actual Normalized Net Revenue and Normalized Adjusted EBITDA performance relative to the relevant targets. 2026 PSU Performance Metrics are equally aggressive and represent continued Net Revenue growth from existing and new customers (driven by core initiatives around customer retention, an increase in our Sportsbook hold percentage, and improved promotional reinvestment) and Adjusted EBITDA margin expansion (driven by core initiatives around gross margin percentage improvement, increased advertising efficiency, and efficient management of corporate fixed costs). The number of Time-based Restricted Stock Units and target PSUs granted to the NEOs was determined by dividing the target award value by the 30-calendar day average closing stock price of the Class A Shares on the grant date of February 13, 2023, with a floor of $17.00. The Compensation Committee granted the following 2023 annual equity refresh awards to the NEOs:
2023 Annual Equity Refresh Awards
| Executive | Number of Time-based Restricted Stock Units | Number of Target 2024 PSUs | Number of Target 2026 PSUs | | Robins | 600,000 | 200,000 | 200,000 | | Kalish | 352,941 | 117,647 | 117,647 | | Liberman | 352,941 | 117,647 | 117,647 | | Dodge(1) | 200,001 | 63,529 | 63,529 | | Park | 225,882 | 75,294 | 75,294 |
2023 Annual Equity Refresh Awards
(1) Mr. Dodge’s annual equity refresh award includes 23,531 Time-based Restricted Stock Units, which vest monthly over a one-year period commencing April 23, 2023, with the remaining subject to the standard four-year quarterly vesting schedule.
Employment Agreements
Employment Agreements DraftKings entered into executive employment agreements with Jason Robins, Matthew Kalish and Paul Liberman in connection with the business combination agreement (the “Business Combination”) dated December 22, 2019, as amended on April 7, 2020. The employment agreement with Mr. Robins provides for a base salary of $650,000, subject to annual review and increase from time to time, and an annual target bonus of 150% of his annual base salary. The employment agreement with Mr. Kalish provides for a base salary of $425,000, subject to annual review and increase from time to time, and an annual target bonus of 125% of his annual base salary. The employment agreement with Mr. Liberman provides for a base salary of $425,000, subject to annual review and increase from time to time, and an annual target bonus of 125% of his annual base salary. The executives will be eligible to participate in benefits programs offered to employees and executives generally subject to satisfying eligibility requirements. Each of Messrs. Robins, Kalish and Liberman is entitled to an annual equity incentive award, which will be granted within the first three months of each fiscal year (or the first seven months for fiscal year 2020), with a minimum annual target value of $6,500,000 for Mr. Robins and $3,500,000 for each of Messrs. Kalish and Liberman. Half of the equity incentive award granted each year will consist of Time-based Restricted Stock Units, with vesting not less favorable than quarterly vesting over four years, and half will consist of PSUs, with a minimum vesting period of two years and a maximum opportunity equal to at least 300% of target. Upon a termination of employment without “cause” or for “good reason” (as those terms are defined in the employment agreements) within 18 months after, or three months before, a “change in control” (as defined in the employment agreements), Messrs. Robins, Kalish and Liberman will receive cash severance equal to two times the sum of his salary and target bonus, payable 60 days after termination, and continued benefits for 24 months. Additionally, equity awards will vest, with performance-based awards vesting at the target level. Upon a termination of employment without cause or for good reason that is not within 18 months after, and not three months before, a change in control, Messrs. Robins, Kalish and Liberman will receive cash severance equal to two times his salary, payable 60 days after termination, a pro rata bonus for the year of termination based on actual performance and continued benefits for 24 months. Additionally, equity awards will vest pro rata, based on actual performance for performance-based awards. Upon termination due to death or disability, equity awards will vest, based on actual performance for performance-based awards, and options will be exercisable for 12 months. Severance and termination benefits payable pursuant to the employment agreements generally are subject to the executive’s execution of a release of claims and compliance with post-closing covenants including non-competition and non-solicitation covenants that continue for 12 months following a termination of employment other than, in the case of the noncompetition covenant, a termination without cause or layoff as set forth in the Massachusetts Noncompetition Agreement Act. On February 14, 2023, the Company entered into letter agreements (the “FY2023 Base Salary Letter Agreements”) with each of Messrs. Robins, Kalish, and Liberman, pursuant to which each of the Founders agreed to a voluntary reduction in their respective base salaries to $1 for fiscal year 2023 (the “Base Salary Reductions”). The Base Salary Reductions did not modify any other rights under each of Messrs. Robins, Kalish and Liberman’s employment agreements that are determined by reference to their base salaries (other than to the extent otherwise described in such letter agreements), and such provisions continued to be applied based on the base salaries then in effect without giving effect to any Base Salary Reductions. Furthermore, the Base Salary Reductions did not reduce any Company employee benefits provided to Messrs. Robins, Kalish and Liberman that are determined by reference to their base salaries, except that life and disability insurance will not be provided to Messrs. Robins, Kalish and Liberman during the applicable Base Salary Reduction period. In February 2024, each of Messrs. Robins, Kalish and Liberman entered into letter agreements with the Company to voluntarily reduce their respective base salaries to $1 for fiscal year 2024, on substantially the same terms and conditions as the FY2023 Base Salary Letter Agreements. On August 5, 2021, the Company entered into an amended and restated executive employment agreement with Jason K. Park (the “Park Amended Employment Agreement”), and an amended executive employment agreement with R. Stanton Dodge (the “Dodge Amended Employment Agreement” and, together with the Park Amended Employment Agreement, the “Amended Employment Agreements”). The Amended Employment Agreements generally conform with the executive employment agreements previously entered into with certain of the Company’s executive officers in April 2020. The Park Amended Employment Agreement provides that Mr. Park’s base salary will continue at the level of $425,000, subject to annual review and increase from time to time, and that he will be eligible for an annual target bonus of 100% of his annual base salary. The Dodge Amended Employment Agreement provides that Mr. Dodge’s base salary will continue at the level of $500,000, subject to annual review and increase from time to time, and that he will be eligible for an annual target bonus of 80% of his annual base salary. Under the Amended Employment Agreements, each of Messrs. Park and Dodge is entitled to an annual equity incentive award, which will be granted within the first three months of each fiscal year, with a minimum annual target value of $2,500,000 for Mr. Park and $2,400,000 for Mr. Dodge. Half of the equity incentive award granted each year will consist of Time-based Restricted Stock Units, with vesting not less favorable than quarterly vesting over four years, and half will consist of PSUs, with a minimum vesting period of two years and a maximum opportunity equal to at least 300% of target. Upon a termination of employment without “cause” or for “good reason” (as those terms are defined in the Amended Employment Agreements) within 18 months after, or three months before, a “change in control” (as defined in the Amended Employment Agreements), each of Messrs. Park and Dodge will receive cash severance equal to one and a half times the sum of his salary and target bonus, payable 60 days after termination, and continued benefits for 18 months. Additionally, any unvested equity awards will vest, with performance-based awards vesting at the target level.
Employment Agreements
Under the Amended Employment Agreements, upon a termination of employment without cause or for good reason that is not within 18 months after, and not three months before, a change in control, each of Messrs. Park and Dodge will receive cash severance equal to one times his salary, payable 60 days after termination, a pro rata bonus for the year of termination based on actual performance and continued benefits for 12 months. Additionally, any unvested equity awards will vest pro rata, based on actual performance for performance-based awards. Upon termination due to death or disability, any unvested equity awards will vest, based on actual performance for performance-based awards, and options will be exercisable for 12 months. Severance and termination benefits payable pursuant to the Amended Employment Agreements generally are subject to an execution of a release of claims and compliance with post-closing covenants including non-competition and non-solicitation covenants that continue for 12 months following a termination of employment other than, in the case of the noncompetition covenant, a termination without cause or layoff as set forth in the Massachusetts Noncompetition Agreement Act.
Severance and Change-in-Control Benefits
Severance and Change-in-Control Benefits The severance and change-in-control benefits for our NEOs are provided under individual employment agreements and, in certain cases, equity award agreements. See “Executive Compensation and Other Information — Potential Payments Upon Termination or Change in Control” below for a description of the severance and change-in-control benefits each NEO would have been eligible to receive if a termination had occurred upon December 31, 2023.
Fiscal 2023 Summary Compensation Table
Fiscal 2023 Summary Compensation Table
Fiscal 2023 Summary Compensation Table
| Name and Principal Position | Fiscal Year | Salary ($) | Bonus ($)(1) | Stock Awards ($)(2)(3) | Non-Equity Incentive Plan Compensation ($)(4) | All Other Compensation ($)(5) | Total ($) | | Jason D. Robins, Chief Executive Officer | 2023 | $1 | $— | $16,140,000 | $1,950,000 | $2,667,990 | $20,757,991 | | | 2022 | 1 | — | 43,740,520 | 1,424,475 | 2,300,923 | 47,465,919 | | | 2021 | 112,500 | — | 11,299,574 | 1,950,000 | 666,650 | 14,028,724 | | Matthew Kalish President, DraftKings, North America | 2023 | 1 | — | 9,494,113 | 1,062,500 | 421,223 | 10,977,837 | | | 2022 | 1 | — | 39,984,506 | 776,156 | 104,169 | 40,864,832 | | | 2021 | 73,558 | — | 10,272,318 | 1,062,500 | 23,700 | 11,432,076 | | Paul Liberman President, Global Technology and Product | 2023 | 1 | — | 9,494,113 | 1,062,500 | 26,713 | 10,583,327 | | | 2022 | 1 | — | 39,983,964 | 776,156 | 155,751 | 40,915,872 | | | 2021 | 73,558 | — | 10,272,318 | 1,062,500 | 23,700 | 11,432,076 | | R. Stanton Dodge Chief Legal Officer | 2023 | 500,000 | — | 5,278,732 | 800,000 | 9,900 | 6,588,632 | | | 2022 | 500,000 | — | 13,486,028 | 584,400 | 9,150 | 14,579,578 | | | 2021 | 500,000 | — | 5,136,159 | 800,000 | 8,700 | 6,444,859 | | Jason K. Park Chief Financial Officer | 2023 | 425,000 | — | 6,076,225 | 850,000 | 25,825 | 7,377,050 | | | 2022 | 425,000 | 500,000 | 13,299,058 | 620,925 | 24,150 | 14,869,133 | | | 2021 | 425,000 | — | 5,136,158 | 850,000 | 23,700 | 6,434,858 |
Fiscal 2023 Summary Compensation Table
(1) The amount disclosed in this column for Mr. Park in fiscal year 2022 reflects the payment of a one-time cash bonus of $500,000. (2) The amounts disclosed in this column are computed in accordance with FASB ASC Topic 718 using the valuation methodology for equity awards set forth in Note 11 — Stock-Based Compensation included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023. (3) The amounts disclosed in this column for 2023 are comprised of the Time-based Restricted Stock Units and PSUs granted in 2023 pursuant to the annual equity refresh awards. The following chart describes the amounts of such awards granted to our NEOs based on the fair market values of such awards on the grant dates:
Fiscal 2023 Summary Compensation Table
| Name | Time-based Restricted Stock Units | PSUs | | Jason D. Robins | $9,684,000 | $6,456,000 | | Matthew Kalish | $5,696,468 | $3,797,645 | | Paul Liberman | $5,696,468 | $3,797,645 | | R. Stanton Dodge | $3,228,016 | $2,050,716 | | Jason K. Park | $3,645,735 | $2,430,490 |
Fiscal 2023 Summary Compensation Table
At the maximum levels of performance, the PSU values would be: $12,912,000 for Mr. Robins, $7,595,290 for Mr. Kalish, $7,595,290 for Mr. Liberman, $4,101,432 for Mr. Dodge, and $4,860,981 for Mr. Park. As discussed in more detail under “Compensation Discussion and Analysis — 2023 Compensation Decisions — 2023 Equity Compensation,” the price used to determine the number of Time-based Restricted Stock Units and PSUs awarded as part of the annual equity refresh program was the 30-calendar day average closing stock price of the Class A Shares leading up to the grant date, with a floor of $17.00. As a result, the value of the grant as disclosed in the Summary Compensation Table above, which was computed in accordance with FASB ASC Topic 718, is different than the amount contemplated when the program was approved. As described above under “Compensation Discussion and Analysis — 2023 Compensation Decisions — 2023 Annual Bonus”, in February 2024, the Compensation Committee offered our NEOs the ability to elect to receive all or a portion of earned annual bonus amounts for all NEOs in the form of fully vested RSUs. As a result of the NEOs’ confidence in the Company’s outlook, each of the NEOs elected to receive annual bonuses for 2023, after any applicable withholdings and deductions pursuant to benefit plan contributions, in the form of fully vested RSUs. This column presents the full value of the bonuses earned for each NEO. See the “— Fiscal 2023 Grants of Plan-Based Awards” table below for additional information regarding the 2023 annual bonuses received by the NEOs. For Mr. Robins, the amounts disclosed in this column include $1,114,762 for security costs, $1,112,973 for air travel costs, $9,900 for our matching contribution made under our 401(k) plan, $15,925 for financial planning services, $61,095 for the purchase of tickets, travel and accommodations to Company-sponsored events during the year, and $353,335 for tax reimbursements related to the aforementioned items, where applicable. For Mr. Kalish this includes $375,150 for security costs, $9,900 for our matching contribution made under our 401(k) plan, $15,925 for financial planning services and $20,248 for tax reimbursements for transportation related costs. For Mr. Liberman, the amounts disclosed in this column include $9,900 for our matching contribution made under our 401(k) plan, $12,740 for financial planning services, and $4,073 for tax reimbursements for transportation related costs. For Mr. Dodge, the amounts disclosed in this column includes $9,900 for our matching contribution made under our 401(k) plan. For Mr. Park, the amounts disclosed in this column include $9,900 for our matching contribution made under our 401(k) plan and $15,925 for financial planning services.
Fiscal 2023 Grants of Plan-Based Awards
Fiscal 2023 Grants of Plan-Based Awards
Fiscal 2023 Grants of Plan-Based Awards
| | | | Estimated Future Payouts Under Non-Equity Incentive Plans(1) | | | Estimated Future Payouts Under Equity Incentive Plans(2) | | | All Other Stock Awards: Number of Shares of Stock or Units (#)(3) | Grant Date Fair Value of Stock Awards ($)(4) | | Name | Award | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | | Jason D. Robins | RSUs | 2/13/2023 | — | — | — | — | — | — | 600,000 | 9,684,000 | | | PSUs | 2/13/2023 | — | — | — | 50,000 | 200,000 | 400,000 | — | 3,228,000 | | | PSUs | 2/13/2023 | — | — | — | 50,000 | 200,000 | 400,000 | — | 3,228,000 | | | Annual Incentive | | $487,500 | $975,000 | $1,950,000 | — | — | — | — | 1,950,000 | | Matthew Kalish | RSUs | 2/13/2023 | — | — | — | — | — | — | 352,941 | 5,696,468 | | | PSUs | 2/13/2023 | — | — | — | 29,412 | 117,647 | 235,294 | — | 1,898,823 | | | PSUs | 2/13/2023 | — | — | — | 29,412 | 117,647 | 235,294 | — | 1,898,823 | | | Annual Incentive | | $265,500 | $531,250 | $1,062,500 | — | — | — | — | 1,062,500 | | Paul Liberman | RSUs | 2/13/2023 | — | — | — | — | — | — | 352,941 | 5,696,468 | | | PSUs | 2/13/2023 | — | — | — | 29,412 | 117,647 | 235,294 | — | 1,898,823 | | | PSUs | 2/13/2023 | — | — | — | 29,412 | 117,647 | 235,294 | — | 1,898,823 | | | Annual Incentive | | $265,500 | $531,250 | $1,062,500 | — | — | — | — | 1,062,500 | | R. Stanton Dodge | RSUs | 2/13/2023 | — | — | — | — | — | — | 200,001 | 3,228,016 | | | PSUs | 2/13/2023 | — | — | — | 15,882 | 63,529 | 127,058 | — | 1,025,358 | | | PSUs | 2/13/2023 | — | — | — | 15,882 | 63,529 | 127,058 | — | 1,025,358 | | | Annual Incentive | | $200,000 | $400,000 | $800,000 | — | — | — | — | 800,000 | | Jason K. Park | RSUs | 2/13/2023 | — | — | — | — | — | — | 225,882 | 3,645,735 | | | PSUs | 2/13/2023 | — | — | — | 18,824 | 75,294 | 150,588 | — | 1,215,245 | | | PSUs | 2/13/2023 | — | — | — | 18,824 | 75,294 | 150,588 | — | 1,215,245 | | | Annual Incentive | | $212,500 | $425,000 | $850,000 | — | — | — | — | 850,000 |
Fiscal 2023 Grants of Plan-Based Awards
(1) Represents the annual incentive opportunity granted for performance during 2023 under DraftKings’ 2023 bonus plan. For 2023, we offered our NEOs the ability to elect to receive all or a portion, if any, of their earned annual bonus, once the Compensation Committee finalized the certification of the achievement of performance, in the form of fully vested RSUs. Due to the NEOs’ confidence in the Company’s outlook, each of the NEOs elected to receive their annual bonus for 2023, after any applicable withholdings and deductions pursuant to benefit plan contributions, in the form of fully vested RSUs. The RSUs were granted on March 19, 2024, based on the Compensation Committee’s final certification of the achievement of performance, which was approved on February 12, 2024. (2) Represents the equity awards granted to each NEO in the form of PSUs pursuant to the 2023 annual equity refresh program. The 2024 PSUs and the 2026 PSUs will vest to the extent that the 2024 PSU Performance Metrics and the 2026 PSU Performance Metrics are achieved, respectively. Recipients may only vest into their 2024 PSUs if Normalized Adjusted EBITDA for fiscal year 2024 is positive. (3) Represents the equity awards granted in the form of Time-based Restricted Stock Units, which, except for 23,531 Time-based Restricted Stock Units granted to Mr. Dodge, vest quarterly over a four-year period following February 13, 2023. For Mr. Dodge, 23,531 RSUs of the 200,001 Time-based Restricted Stock Units vest in equal monthly installments over the one year commencing on April 23, 2023. The aggregate grant date fair value of awards presented in this column is calculated in accordance with FASB ASC 718.
Fiscal 2023 Outstanding Equity Awards at Fiscal Year-End
Fiscal 2023 Outstanding Equity Awards at Fiscal Year-End The market value of unvested or unearned awards is calculated using a price of $35.25 per Class A Share, which was the closing price of a Class A Share on the NASDAQ on December 29, 2023 (the last trading day of 2023).
Fiscal 2023 Outstanding Equity Awards at Fiscal Year-End
| | Option Awards | | | | | Stock Awards | | | | | Name | Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Option (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Yet Vested (#) | Market Value of Shares or Units of Stock That Have Not Yet Vested ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units, or Other Rights That Have Not Yet Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares Units, or Other Rights That Have Not Yet Vested ($) | | Jason D. Robins | 117,004 | — | — | 4.70 | 6/4/2029 | — | — | — | — | | | 400,053 | — | — | 0.63 | 3/24/2026 | — | — | — | — | | | 6,512,289 | — | — | 3.28 | 5/3/2028 | — | — | — | — | | | 374,710(5) | — | — | 3.82 | 5/3/2027 | — | — | — | — | | | 280,190(5) | — | — | 3.28 | 4/18/2028 | — | — | — | — | | | 779,846(5) | — | — | 4.70 | 6/4/2029 | — | — | — | — | | | 327,461(5) | — | — | 0.63 | 2/18/2025 | — | — | — | — | | | 492,211(5) | — | — | 0.63 | 2/24/2026 | — | — | — | — | | | — | — | — | — | — | — | — | 460,606(2) | 16,236,362 | | | — | — | — | — | — | — | — | 1,381,818(3) | 48,709,085 | | | — | — | — | — | — | 883,871(1) | 31,156,453 | — | — | | | — | — | — | — | — | — | — | 400,000(4) | 14,100,000 | | Matthew Kalish | 1,133,561 | — | — | 3.28 | 5/3/2028 | — | — | — | — | | | 157,826 | — | — | 3.82 | 5/3/2027 | — | — | — | — | | | 242,101 | — | — | 3.28 | 4/18/2028 | — | — | — | — | | | 705,340 | — | — | 4.70 | 6/4/2029 | — | — | — | — | | | — | — | | | | — | — | — | — | | | — | — | — | — | — | — | — | 460,606(2) | 16,236,362 | | | — | — | — | — | — | — | — | 1,381,818(3) | 48,709,085 | | | — | — | — | — | — | — | — | 235,294(4) | 8,294,114 | | | — | — | — | — | — | 580,609(1) | 20,466,467 | — | — | | Paul Liberman | 110,200 | — | — | 4.70 | 6/4/2029 | — | — | — | — | | | 162,538 | — | — | 0.63 | 2/18/2025 | — | — | — | — | | | 191,226 | — | — | 0.63 | 8/27/2025 | — | — | — | — | | | 430,546 | — | — | 0.63 | 3/24/2026 | — | — | — | — | | | 15,757 | — | — | 3.28 | 4/18/2028 | — | — | — | — | | | 53,871(6) | — | — | 0.63 | 3/24/2026 | — | — | — | — | | | 258,370(6) | — | — | 3.28 | 4/18/2028 | — | — | — | — | | | 261,160(6) | — | — | 3.82 | 5/3/2027 | — | — | — | — | | | 575,750(6) | — | — | 4.70 | 6/4/2029 | — | — | — | — | | | 1,511,843(6) | — | — | 3.29 | 5/3/2018 | — | — | — | — | | | — | — | — | — | — | — | — | 460,606(2) | 16,236,362 | | | — | — | — | — | — | — | — | 1,381,818(3) | 48,709,085 | | | — | — | — | — | — | — | — | 235,294(4) | 8,294,114 | | | — | — | — | — | — | 580,609(1) | 20,466,467 | — | — | | R. Stanton Dodge | 2,234,761 | — | — | 2.95 | 11/7/2027 | — | — | — | — | | | 90,634 | — | — | 3.28 | 4/18/2028 | — | — | — | — |
Fiscal 2023 Outstanding Equity Awards at Fiscal Year-End
| | Option Awards | | | | | Stock Awards | | | | | Name | Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Option (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Yet Vested (#) | Market Value of Shares or Units of Stock That Have Not Yet Vested ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units, or Other Rights That Have Not Yet Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares Units, or Other Rights That Have Not Yet Vested ($) | | | 201,578 | — | — | 3.28 | 5/3/2028 | — | — | — | — | | | 265,220 | | — | 4.70 | 6/4/2029 | — | — | — | — | | | — | — | — | — | — | — | — | 121,212(2) | 4,272,723 | | | — | — | — | — | — | — | — | 363,636(3) | 12,818,169 | | | — | — | — | — | — | — | — | 117,646(4) | 4,147,022 | | | — | — | — | — | — | 297,974(1) | 10,503,584 | — | — | | Jason K. Park | — | — | — | — | — | — | — | 121,212(2) | 4,272,723 | | | — | — | — | — | — | — | — | 363,636(3) | 12,818,169 | | | — | — | — | — | — | — | — | 150,588(4) | 5,308,227 | | | — | — | — | — | — | 344,946(1) | 12,159,347 | — | — |
Fiscal 2023 Outstanding Equity Awards at Fiscal Year-End
Represents Time-based Restricted Stock Units under the annual equity refresh program described above, which were granted on the dates shown in the table below, and generally vest in equal quarterly installments over a four-year period from the date of grant.
Fiscal 2023 Outstanding Equity Awards at Fiscal Year-End
| Name | August 2020 | February 2021 | February 2022 | February 2023 | Total | | Jason D. Robins | 23,174 | 29,246 | 343,951 | 487,500 | 883,871 | | Matthew Kalish | 12,478 | 26,587 | 254,779 | 286,765 | 580,609 | | Paul Liberman | 12,478 | 26,587 | 254,779 | 286,765 | 580,609 | | R. Stanton Dodge | 7,131 | 12,230 | 127,389 | 151,224 | 297,974 | | Jason K. Park | 9,270 | 13,293 | 138,854 | 183,529 | 344,946 |
Fiscal 2023 Outstanding Equity Awards at Fiscal Year-End
(2) Represents PSUs granted pursuant to the 2022 Long-Term Equity Program, which provide an opportunity for recipients to receive Class A Shares based on the achievement of the 2024 PSU Performance Metrics in fiscal year 2024. Recipients may only vest into their 2024 PSUs if Normalized Adjusted EBITDA for fiscal year 2024 is positive. In the event that positive Normalized Adjusted EBITDA for fiscal year 2024 is achieved, awards can range from 25% of the target number of Class A Shares to 200% of the target number of Class A Shares underlying the 2024 PSUs. (3) Represents PSUs granted pursuant to the 2022 Long-Term Equity Program, which provide an opportunity for recipients to receive Class A Shares based on the achievement of the 2026 PSU Performance Metrics in fiscal year 2026. In the event that the threshold Normalized Adjusted EBITDA for fiscal year 2026 is achieved, awards of 2026 PSUs can range from 25% of the target number of Class A Shares to 200% of the target number of Class A Shares underlying the 2026 PSUs. Represents PSUs, which were granted in February 2023, as part of our annual equity refresh program, and provide an opportunity for recipients to receive Class A Shares based on the achievement of GAAP Revenue and Adjusted EBITDA targets in equal amounts. In the event that positive Normalized Adjusted EBITDA is achieved for fiscal year 2024, eligible employees can achieve anywhere between 25% and 200% of their granted amount of 2024 PSUs based on actual Normalized Net Revenue and Normalized Adjusted EBITDA performance relative to the relevant targets. 2026 PSU Performance Metrics are equally aggressive and represent continued Net Revenue growth from existing and new customers (driven by core initiatives around customer retention, an increase in our Sportsbook hold percentage, and improved promotional reinvestment) and Adjusted EBITDA margin expansion (driven by core initiatives around gross margin percentage improvement, increased advertising efficiency, and efficient management of corporate fixed costs). Indicates options held by the Robins Grantor Retained Annuity Trust of 2020, Robins September 2020 Grantor Retained Annuity Trust and/or Robins December 2021 Grantor Retained Annuity Trust, for which Mr. Robins has sole investment and voting power. (6) Indicates options held by the Paul Liberman 2015 Revocable Trust and/or Liberman Grantor Retained Annuity Trust of 2020, for which Mr. Liberman has sole investment and voting power. Represents time-based stock options. While the options expire 10 years from the date of the grant, generally, these options vest in installments over a four-year period from the date of grant.
Fiscal 2023 Option Exercises and Stock Vested
Fiscal 2023 Option Exercises and Stock Vested
Fiscal 2023 Option Exercises and Stock Vested
| | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | | Jason D. Robins | 635,864 | 18,543,265 | 2,642,765 | 68,443,799 | | Matthew Kalish | 689,489 | 19,969,333 | 2,494,622 | 67,191,441 | | Paul Liberman | 28,668 | 450,805 | 2,494,455 | 66,889,712 | | R. Stanton Dodge | 527,770 | 15,563,531 | 831,375 | 22,589,529 | | Jason K. Park | 523,187 | 17,238,478 | 840,109 | 23,075,335 |
Potential Payments Upon Termination or Change in Control
Potential Payments Upon Termination or Change in Control The severance benefits for our NEOs are provided under individual employment agreements and, in certain cases, equity award agreements. Upon any termination of employment, each NEO will be entitled to receive, within thirty days following termination, any accrued and vested payments and benefits that have not yet been paid, including unpaid base salary earned, accrued but unused vacation, and reimbursement for any unreimbursed business expenses (collectively, the “Accrued Benefits”). Additionally, depending on the type of termination, each NEO may be entitled to receive severance payments in addition to the Accrued Benefits. The narrative disclosure below describes the severance or change in control benefits that each NEO would be entitled to receive in addition to the Accrued Benefits (in the case of a termination of employment), and these severance benefits are quantified in the Potential Payments Upon Termination or Change in Control table below. Unless otherwise indicated, the narrative disclosure and the amounts estimated in the table assume that the relevant triggering event (a termination of employment or change in control, as applicable) occurred on December 29, 2023 and are based on the terms of the applicable employment agreements and equity award agreements that were in effect on that date. The terms “cause,” “good reason,” “disability,” and “change in control” in this section have the meanings provided in the applicable employment agreement or equity award agreement.
Estimate of Potential Payments Upon Termination or Change in Control
Estimate of Potential Payments Upon Termination or Change in Control The amounts estimated in the table below assume that the relevant triggering event (a termination of employment or change in control, as applicable) occurred on December 31, 2023 and are based on the terms of the applicable employment agreements and equity award agreements that were in effect on that date. The table assumes that any equity awards that vest in connection with the applicable triggering event that are subject to performance conditions are earned at the target level of performance within the applicable period except as may be noted otherwise, and values equity awards based on the closing price of a Class A Share on December 29, 2023 (the last trading day of 2023) of $35.25.
Estimate of Potential Payments Upon Termination or Change in Control
| Name | Type of Payment(1) | Termination for Death or Disability ($) | Termination for Cause or Without Good Reason ($) | Termination Without Cause or for Good Reason Absent a Change in Control ($) | Termination Without Cause or for Good Reason in Connection with a Change in Control ($) | | Jason D. Robins | Cash Severance | — | — | 3,250,000 | 3,250,000 | | | Stock Incentives | 31,156,453 | — | 1,577,880 | 110,201,899 | | | Other Benefits | — | — | 49,000 | 49,000 | | | Total | 31,156,453 | — | 4,876,880 | 113,500,899 | | Matthew Kalish | Cash Severance | — | — | 1,912,500 | 1,912,500 | | | Stock Incentives | 20,466,467 | — | 1,054,366 | 93,706,027 | | | Other Benefits | — | — | 49,000 | 49,000 | | | Total | 20,466,467 | — | 3,015,866 | 95,667,527 | | Paul Liberman | Cash Severance | — | — | 1,912,500 | 1,912,500 | | | Stock Incentives | 20,466,467 | — | 1,054,366 | 93,706,027 | | | Other Benefits | — | — | 49,000 | 49,000 | | | Total | 20,466,467 | — | 3,015,866 | 95,667,527 | | R. Stanton Dodge | Cash Severance | — | — | 1,300,000 | 1,350,000 | | | Stock Incentives | 10,503,584 | — | 541,174 | 31,741,497 | | | Other Benefits | — | — | 36,750 | 36,750 | | | Total | 10,503,584 | — | 1,877,924 | 33,128,247 | | Jason K. Park | Cash Severance | — | — | 1,275,000 | 1,237,500 | | | Stock Incentives | 12,159,347 | — | 628,167 | 34,558,466 | | | Other Benefits | — | — | 36,750 | 36,750 | | | Total | 12,159,347 | — | 1,939,917 | 35,832,716 |
Estimate of Potential Payments Upon Termination or Change in Control
The “Other Benefits” rows reflect the cost of continued coverage under the Consolidated Omnibus Budget Reconciliation Act.
PAY VERSUS PERFORMANCE
PAY VERSUS PERFORMANCE As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(v) of Regulation S-K, the following disclosure (the “Pay Versus Performance Disclosure”) describes the relationship between executive compensation and the Company’s performance with respect to select financial measures. For a complete description regarding the Company’s compensation program, please see “Compensation Discussion and Analysis.”
PAY VERSUS PERFORMANCE
| | Summary Compensation Table Total (in millions) | | Compensation “Actually Paid” Total (in millions)(b) | | Value of Initial Fixed $100 Investment Based on Total Shareholder Return | | | | | Year | PEO(a) | Average of Non-PEO NEOs(a) | PEO | Average of Non-PEO NEOs | DKNG | CDI(c) | Net Income (Loss) (in billions) | GAAP Revenue (in billions)(d) | | 2023 | $20.8 | $8.9 | $168.2 | $98.1 | $329 | $144 | $(0.8) | $3.7 | | 2022 | $47.5 | $27.8 | $(28.4) | $(12.7) | $106 | $105 | $(1.4) | $2.2 | | 2021 | $14.0 | $8.9 | $(67.4) | $(37.2) | $257 | $166 | $(1.5) | $1.3 | | 2020 | $236.8 | $126.6 | $584.7 | $226.7 | $435 | $133 | $(1.2) | $0.6 |
PAY VERSUS PERFORMANCE
(a) The NEOs for each year presented above comprised Jason Robins, who is the Company’s Principal Executive Officer (the “PEO”), and Matthew Kalish, Paul Liberman, R. Stanton Dodge and Jason K. Park (collectively, the “non-PEO NEOs”). (b) SEC rules require that certain adjustments be made to the totals set forth in the Summary Compensation Table included in this Proxy Statement (the “Summary Compensation Table”) in order to determine “compensation actually paid” for purposes of this Pay Versus Performance Disclosure. “Compensation actually paid” does not represent cash and/or equity value transferred to the applicable NEO, but rather is a value calculated under applicable SEC rules for purposes of this Pay Versus Performance Disclosure. In general, “compensation actually paid” is calculated as total compensation set forth in the Summary Compensation Table, as adjusted to include the fair market value of equity awards as of December 31 of the applicable year or, if earlier, the vesting date (rather than the grant date). None of the NEOs received any awards that failed to meet the applicable vesting conditions during 2023, received any dividends or participated in a defined benefit plan and there have been no amendments to the exercise price of options, so the following table does not include an adjustment for such items. The Company has not adjusted or amended the exercise price of options exercisable for Class A Shares held by the NEOs during 2023. The below table reflects the required adjustments to reconcile total compensation as set forth in the Summary Compensation Table to “Compensation actually paid” for purposes of the Pay Versus Performance Disclosure (in millions unless otherwise noted).
PAY VERSUS PERFORMANCE
| | Add Year-End Change in: | | | | | | | | | Year | NEO(s) | Summary Compensation Table Total | Subtract Stock Awards(i) | Granted Award Fair Value(ii) | Value of Prior Awards(iii) | Change in Value of Awards Granted and Vested in Year(iv) | Change in Value of Prior Awards that Vested in Year(v) | Compensation Actually Paid | | 2023 | PEO | $20.8 | $(16.1) | $80.9 | $40.9 | $4.0 | $37.7 | $168.2 | | | Average of Non- PEO NEOs | $8.9 | $(7.6) | $50.4 | $19.2 | $1.9 | $25.3 | $98.1 | | 2022 | PEO | $47.5 | $(43.7) | $26.6 | $(37.9) | $1.5 | $(22.4) | $(28.4) | | | Average of Non- PEO NEOs | $27.8 | $(26.7) | $16.5 | $(23.4) | $0.9 | $(7.8) | $(12.7) | | 2021 | PEO | $14.0 | $(11.3) | $4.7 | $(80.2) | $0.8 | $4.6 | $(67.4) | | | Average of Non- PEO NEOs | $8.9 | $(7.7) | $3.2 | $(45.2) | $0.6 | $3.1 | $(37.2) | | 2020 | PEO | $236.8 | $(231.2) | $173.1 | $38.5 | $231.0 | $136.4 | $584.7 | | | Average of Non- PEO NEOs | $126.6 | $(123.9) | $104.6 | $22.0 | $61.6 | $35.8 | $226.7 |
PAY VERSUS PERFORMANCE
(i) Deduction for the amounts reported in the “Stock Awards” column of the Summary Compensation Table. (ii) Increase in fair value, calculated in accordance with FASB ASC 718, as of the end of the reported fiscal year of equity awards granted in the reported fiscal year that were outstanding and unvested as of the end of the reported fiscal year. (iii) Change in fair value, calculated in accordance with FASB ASC 718, as of the end of the reported fiscal year from the end of the prior fiscal year, of equity awards granted in prior years that are outstanding and unvested as of the end of the reported fiscal year. (iv) Change in fair value, calculated in accordance with FASB ASC 718, as of the vesting date for awards that are granted and vest in the same reported fiscal year. (v) Change in fair value, calculated in accordance with FASB ASC 718, from the end of the prior fiscal year to the vesting date for awards granted in prior years that vest in the reported year. (c) The S&P Consumer Discretionary Index (“CDI”) is a comprehensive index of companies included in the S&P 500 that are classified as members of the consumer discretionary sector, which the Company deems an appropriate peer group for the purposes of its Pay Versus Performance Disclosure. (d) For 2023 compensation decisions, the Company focused on achievement of GAAP Revenue growth, as well as other metrics such as Adjusted EBITDA, through highly effective customer acquisition, retention, engagement, and monetization, enabled by innovative product offerings and technology enhancements across the Company’s product offerings.
Relationships Between Executive Compensation Actually Paid and Select Financial Performance Measures
Relationships Between Executive Compensation Actually Paid and Select Financial Performance Measures The charts below are based on the information provided in the above table to illustrate the relationships between the Company’s compensation actually paid to the PEO and the average compensation actually paid to the Company’s non-PEO NEOs, with (i) the Company’s cumulative total shareholder return (“TSR”), (ii) the Company’s net income (loss) and (iii) the Company’s GAAP Revenue, which the Company has selected as the most important financial performance measure used by the Company to link compensation actually paid to its NEOs for the most recently completed fiscal year and its performance.
CEO PAY RATIO
CEO PAY RATIO The following table shows the ratio of our CEO’s 2023 annual total compensation to the median 2023 annual total compensation of our other employees.
CEO PAY RATIO
| CEO 2023 Annual Total Compensation | Median Employee 2023 Annual Compensation | 2023 Ratio of CEO Pay to Median Employee Pay | | $20,757,991 | $79,014 | 263:1 |
CEO PAY RATIO
For 2023, we recalculated the median employee for purposes of the foregoing calculations, since the previous median employee is no longer employed by the Company. To identify our median employee, we reviewed the 2023 annual compensation (with base salary and bonus paid as our consistently applied compensation measure) of all our employees, including, without limitation, temporary and seasonal workers, our full- and part-time employees, both in and outside the U.S., other than the CEO, as of December 31, 2023. As permitted by SEC rules, independent contractors and leased workers who provide services to DraftKings but whose compensation is determined by an unaffiliated third party were excluded from our determination of the median employee. We calculated the annual total compensation of our median employee in the same way we calculate our NEOs’ annual total compensation in the Summary Compensation Table. In 2023, our median employee earned $60,353 in salary and $18,661 in other compensation elements, for annual total compensation of $79,014. The pay ratio is a reasonable estimate calculated in a manner consistent with SEC rules based on our payroll and employment records and the methodology described above. The SEC rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions and to make reasonable estimates and assumptions that reflect their compensation practices. As such, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies may have different employment and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.
DIRECTOR COMPENSATION
DIRECTOR COMPENSATION
Director Compensation Table
Director Compensation Table The following table provides information concerning the compensation of each non-employee director who served on DraftKings’ Board of Directors in 2023. DraftKings employees did not receive compensation for serving as directors.
Director Compensation Table
| Name | Stock Awards($)(1) | All Other Compensation ($)(2) | Total ($) | | Woodrow Levin | $249,964 | $— | $249,964 | | Shalom Meckenzie | $31,240 | $— | $31,240 | | Jocelyn Moore | $265,563 | $15,925 | $281,488 | | Ryan Moore | $272,443 | $— | $272,443 | | Valerie Mosley | $259,950 | $94,728 | $354,678 | | Steven Murray | $282,439 | $— | $282,439 | | Harry Sloan | $262,442 | $77,778 | $340,220 | | Marni Walden | $274,951 | $12,740 | $287,691 |
Director Compensation Table
(1) The amounts disclosed in this column are computed in accordance with FASB ASC Topic 718 using the valuation methodology for equity awards set forth in Note 11 — Stock-Based Compensation to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023. The aggregate number of unvested RSUs held as of December 31, 2023 by each individual that served as a non-employee director during the fiscal year ended December 31, 2023 was 6,339 other than Mr. Meckenzie who held no unvested RSUs. (2) For Ms. J. Moore, this includes $15,925 for financial planning services. For Ms. Mosley, this includes $15,925 for financial planning services, $56,288 for the purchase of tickets for Company-sponsored events during the year, and $22,515 for tax reimbursements related to the aforementioned items. For Mr. Sloan, this includes $55,556 for the purchase of tickets for Company-sponsored events during the year and $22,222 for tax reimbursements related to the aforementioned item. For Ms. Walden, this includes $12,740 for financial planning services.
Director Compensation Program
Director Compensation Program Our Board of Directors compensation program is designed to provide competitive compensation necessary to attract and retain high-quality non-employee directors and to encourage ownership of DraftKings stock to further align their interests with those of our shareholders. In 2023, our program provided the following compensation for non-employee directors: • An annual retainer of $45,000; • An annual retainer of $20,000 for the chair of the audit committee; $17,500 for the chair of the compensation committee; and $10,000 for the chair of each of the nominating and corporate governance committee, the compliance and risk committee and the transaction committee; • An annual retainer of $10,000 for members of the audit committee; $7,500 for members of the compensation committee; $5,000 for members of the nominating and corporate governance committee and the compliance and risk committee; and $10,000 for members of the transaction committee; and • An equity retainer with a value of $200,000 (based on the fair market value of a Class A Share on the grant date) payable in the form of RSUs, granted upon initial election to the Board and then each year at the annual shareholders meeting that vests at the sooner of the following annual shareholders meeting or the one-year anniversary of the grant. All retainers will be payable quarterly in arrears. The retainers are being delivered in equity until DraftKings is profitable.