DEF 14A of Stride, Inc., Oct 26, 2023

DEF 14A of Stride, Inc.

Filed Oct 26, 2023 · FY20230001140361-23-049694

Open on EDGAR

  1. www.proxyvote.com

    | Equity Awards | 62 | | Potential Value of Termination and Change in Control Payments and Benefits | 62 | | CEO Pay Ratio | 64 | | Pay-Versus-Performance Disclosure | 65 | | GENERAL MATTERS | 69 | | Delinquent Section 16(a) Reports | 69 | | Stockholder Proposals and Nominations | 69 | | Delivery of Documents to Stockholders Sharing an Address | 69 | | Other Matters | 70 | | APPENDIX A – RECONCILIATION OF NON-GAAP FINANCIAL MEASURES | 71 |

  2. ELECTION OF DIRECTORS

    ELECTION OF DIRECTORS

  3. Summary

    Summary The Board currently consists of ten members, each of whose term expires at the Annual Meeting. Each of our ten directors has been nominated for election for a term expiring at the 2024 annual meeting of stockholders. The ten nominees are: Aida M. Alvarez, Craig R. Barrett, Robert L. Cohen, Steven B. Fink, Robert E. Knowling, Jr., Allison Lawrence, Liza McFadden, James J. Rhyu, Ralph Smith and Joseph A. Verbrugge. Each of the nominees has agreed to serve as a director if elected, and the Company believes that each nominee will be available to serve. The following charts highlight the balance in age and tenure and the gender and ethnic diversity of our director nominees. Also highlighted is the wide range of backgrounds and experience of the director nominees. The Board believes that this balance in age and tenure, mix of diversity and wide range of backgrounds and experience will help bring broad and valuable perspectives to the Board that will lead to a well-functioning Board.

  4. Summary

    | Key | | | Senior Leadership | Experience serving in a senior leadership role of a complex organization | | Public Company Board | Experience as a board member of another publicly traded company | | Current or Former CEO | Experience serving as a current or former Chief Executive Officer (“CEO”) | | Financial Expertise | Experience or expertise in finance, accounting, financial management or financial reporting | | Technology | Experience or expertise in the technology industry | | Education / Public Policy Expertise | Knowledge of or experience in education or public policy | | International | Experience with global business operations or with doing business internationally |

  5. Information Regarding Nominees

    Information Regarding Nominees The names and ages of the nominees, their principal occupations and employment during the past five years, and other information regarding them are as follows.

  6. OUR BOARD RECOMMENDS YOU VOTE “FOR” EACH OF THE NOMINEES

    OUR BOARD RECOMMENDS YOU VOTE “FOR” EACH OF THE NOMINEES

  7. OUR BOARD RECOMMENDS YOU VOTE “FOR” EACH OF THE NOMINEES

    | AIDA M. ALVAREZ Age: 74 Director Since: 2017 Nominating and Corporate Governance Committee Independent | Professional Experience: | | | Ms. Alvarez currently serves as Chair Emerita of the Latino Community Foundation and as a board member of California Competes, a non-profit entity focused on issues in higher education, equity and the economy. As Administrator of the U.S. Small Business Administration, she was a member of President Clinton’s Cabinet from 1997 to 2001. Previously, Ms. Alvarez served as the Director of the Office of Federal Housing Enterprise Oversight from 1993 to 1997, where she was charged with financial oversight of the secondary housing market, the Federal National Mortgage Association (“Fannie Mae”) and the Federal Home Loan Mortgage Corporation (“Freddie Mac”). Prior to that, she worked for the New York City Health and Hospitals Corporation, Bear Stearns & Company, Inc. and the First Boston Corporation. She has served on the boards of directors of Fastly, Inc. since August 2019; Bill.com since May 2022 and HP Inc. since February 2016. From 2006 to June 2016, Ms. Alvarez served on the board of directors of Wal-Mart Stores Inc., and from 2004 to 2014, served on the boards of directors of MUFG Americas Holdings Corporation (formerly UnionBanCal Corporation) and MUFG Union Bank N.A. (formerly Union Bank N.A.). From 2014 to 2019, she served on the board of directors of Zoosk, Inc., and from 2011 to November 2022, on the board of Oportun Financial Corp. (formerly Progress Financial Corporation). | | | Attributes, Skills and Qualifications: | | | Ms. Alvarez holds a B.A. from Harvard College. Ms. Alvarez was selected as a director because of her financial expertise, government experience and ability to bring diverse perspectives to the Board. |

  8. OUR BOARD RECOMMENDS YOU VOTE “FOR” EACH OF THE NOMINEES

    | CRAIG R. BARRETT Age: 84 Director Since: 2010 Chair of the Board Independent | Professional Experience: | | | Dr. Barrett served as Chief Executive Officer of Intel Corporation from 1998 until 2005, and was also Chairman of the Board of Intel from 2005 to 2009. He previously served in various roles at Intel Corporation, including Chief Operating Officer, since joining Intel in 1974. Prior to Intel Corporation, Dr. Barrett was a member of the Department of Materials Science and Engineering faculty of Stanford University. Dr. Barrett currently serves as President and Chairman of BASIS Charter Schools, Inc.; Vice Chair of the Science Foundation Arizona; Chairman of the Carnegie Institution for Science; and is the Chairman of XGS Energy (formerly Geothermic Solutions Inc.). | | | Attributes, Skills and Qualifications: | | | Dr. Barrett holds a B.S., M.S. and Ph.D. in Materials Science from Stanford University. Dr. Barrett was selected to serve as Chair of the Board and as a director because of his deep knowledge and experience in information technology innovation, as well as his global, operational and leadership experience as Chairman and Chief Executive Officer of Intel Corporation. He also brings a unique perspective to the Board from his tenure as a professor and his volunteer work and support of numerous educational organizations. |

  9. OUR BOARD RECOMMENDS YOU VOTE “FOR” EACH OF THE NOMINEES

    | ROBERT L. COHEN Age: 58 Director Since: 2019 Audit Committee Nominating and Corporate Governance Committee Independent | Professional Experience: | | | Mr. Cohen currently serves in various roles including strategic advisor, investor and board observer to high growth education technology companies including 2U Inc. Mr. Cohen served as President and Chief Operating Officer of 2U through January 2016. He was appointed President in November 2013 and Chief Operating Officer in April 2012. In addition, Mr. Cohen was 2U’s founding Chief Financial Officer beginning in June 2008. From 2001 to 2008, Mr. Cohen held several senior roles at The Princeton Review, including Executive Vice President of Strategic Development and Executive Vice President and General Manager of K12 Services. From 1983 to 2001, Mr. Cohen founded and operated the largest network of franchises of The Princeton Review before selling them back to that company. From May 2020 to October 2021, Mr. Cohen served on the board of directors of Straive (f/k/a SPiGlobal). | | | Attributes, Skills and Qualifications: | | | Mr. Cohen attended Princeton University. He was selected as a director because of his deep knowledge and experience in the education technology industry, as well as his operational and leadership experience as Chief Operating Officer of 2U. |

  10. OUR BOARD RECOMMENDS YOU VOTE “FOR” EACH OF THE NOMINEES

    | STEVEN B. FINK Age: 72 Director Since: 2003 Audit Committee Chair Compensation Committee Independent | Professional Experience: | | | Mr. Fink is the Co-Chairman of Heron International. He served as a director of Nobel Learning Communities, Inc. from 2003 to 2011 and as Chairman of the Board of Life Storage, LLC from 2013 to 2016. In addition, Mr. Fink is a member of the boards of The Jackson Laboratory, City of Hope, St. Helena Hospital, OLE Health Foundation and the Herb Ritts Foundation. From 1999 to 2009, Mr. Fink served as a director of Leapfrog Enterprises, Inc. and was its Chairman from 2004 to 2009. From 2000 to 2008, Mr. Fink was the Chief Executive Officer of Lawrence Investments, LLC. Mr. Fink has also previously served as Chairman and Chief Executive Officer of Anthony Manufacturing, Chairman and Managing Director of Knowledge Universe and Chairman and Chief Executive Officer of Nextera Enterprises, Inc. | | | Attributes, Skills and Qualifications: | | | Mr. Fink holds a B.S. in Psychology from the University of California, Los Angeles and a J.D. and an L.L.M. from New York University. Mr. Fink was selected as a director based on his significant experience in operations and financial oversight gained as serving as director or chairman for various public and private companies, in addition to his membership on various company audit committees which enables him to contribute significantly to the financial oversight, risk oversight and governance of the Company. |

  11. OUR BOARD RECOMMENDS YOU VOTE “FOR” EACH OF THE NOMINEES

    | ROBERT E. KNOWLING, JR. Age: 68 Director Since: 2018 Compensation Committee Chair Audit Committee Independent | Professional Experience: | | | Mr. Knowling serves as Chairman of Eagles Landing Partners, which specializes in helping senior management formulate strategy, lead organizational transformations and re-engineer businesses. From 2002 to 2005, he served as Chief Executive Officer of the NYC Leadership Academy, an independent non-profit corporation created by Chancellor Joel I. Klein and Mayor Michael R. Bloomberg that is chartered with developing the next generation of principals in the New York City public school system. Mr. Knowling has also held roles as Chief Executive Officer of Telwares, Chairman and Chief Executive Officer of SimDesk Technologies, Inc. and Chairman, President and Chief Executive Officer of Covad Communications. He was awarded the Wall Street Project’s Reginald Lewis Trailblazers Award by President Clinton and the Reverend Jesse Jackson in 1999. Mr. Knowling serves on the board of directors for Rite Aid Corporation, CECO Environmental Corp., Rocket Software and Stream Companies. He also previously served on the board of directors of Citrix Systems Inc. from 2020 to September 2022, Heidrick & Struggles, Inc. from 2001 to 2015, Convergys Corporation from 2017 to 2018 and Roper Technologies, Inc. from 2008 to 2021. | | | Attributes, Skills and Qualifications: | | | Mr. Knowling holds a B.A. in theology from Wabash College and an M.B.A. from Kellogg School of Management, Northwestern University. He was selected as a director based on his experience in public education, public company leadership roles, technology and organizational development. |

  12. OUR BOARD RECOMMENDS YOU VOTE “FOR” EACH OF THE NOMINEES

    | ALLISON LAWRENCE Age: 42 Director Since: 2023 Compensation Committee Independent | Professional Experience: | | | Ms. Lawrence serves as president of eCommerce in the tools and storage division at Stanley Black & Decker, Inc., where she has held progressive leadership roles since joining in 2003, most recently as business president, vice president and chief of staff to the chief executive officer. Ms. Lawrence leads the strategic expansion of online sales, direct-to consumer, digital media and merchandising initiatives at Stanley Black & Decker, Inc. Ms. Lawrence also currently serves on the national board for A Better Chance, a non-profit organization dedicated to substantially increasing the number of well-educated young leaders of color who can assume leadership positions. Lawrence also serves as vice chair of the board of Hartford Hospital, one of the largest teaching hospitals in New England. | | | Attributes, Skills and Qualifications: | | | Ms. Lawrence holds a Bachelor of Science degree in marketing from Oklahoma State University. She also earned a Master of Business Administration from the University of Texas at Dallas. She was selected as a director because of her expertise in brand development, digital media and eCommerce. |

  13. OUR BOARD RECOMMENDS YOU VOTE “FOR” EACH OF THE NOMINEES

    | LIZA MCFADDEN Age: 61 Director Since: 2017 Nominating and Corporate Governance Committee Chair Independent | Professional Experience: | | | Ms. McFadden founded LIZA and Partners LLC which provides consulting services for nonprofits and foundations. She is the inaugural recipient of the Women Who Mean Business Award in her hometown of Tallahassee for her community service and serves on the boards of Reading Partners, the Florida State Parks Foundation, Village Square and the Suwannee River Area Council Boy Scouts of America. Previously, she was President and Chief Executive Officer of the Barbara Bush Foundation for Family Literacy from 2012 to 2018. She is a former high school teacher, Florida Department of Education administrator and served in Governor Jeb Bush’s administration. Additionally, Ms. McFadden was appointed by President George W. Bush to serve on the National Institute for Literacy Board. | | | Attributes, Skills and Qualifications: | | | Ms. McFadden holds an M.A. from Florida State University and a B.A. from Fitchburg State University. She was selected as a director because of her expertise in educational policy and programming for adults and children as well as her experience in working with local and state governments. |

  14. OUR BOARD RECOMMENDS YOU VOTE “FOR” EACH OF THE NOMINEES

    | JAMES J. RHYU Age: 53 Director Since: 2021 Stride, Inc. Chief Executive Officer | Professional Experience: | | | Mr. Rhyu joined us in June 2013, serving as the Company’s Chief Financial Officer until April 2020. In April 2020, he was appointed the Company’s President, Corporate Strategy, Marketing and Technology. In January 2021, Mr. Rhyu was appointed and currently serves as Chief Executive Officer. Prior to joining the Company, Mr. Rhyu served as Chief Financial Officer and Chief Administrative Officer of Match.com, a subsidiary of publicly traded IAC/InterActiveCorp, since June 2011. In those roles, he was responsible for overseeing a broad range of functions, including finance, human resources, legal, information technology and operations, certain international operations and product development. Prior to his roles at Match.com, Mr. Rhyu was a Senior Vice President of Finance at Dow Jones & Company from January 2009 until May 2011, where he ran the global financial function. Previously, Mr. Rhyu served for three years as the Corporate Controller of Sirius XM Radio Inc. and its predecessor company, XM Satellite Radio, as well as serving in the same role for Graftech International. Mr. Rhyu also served six years as an auditor with Ernst & Young LLP in the United States and South America. | | | Attributes, Skills and Qualifications: | | | Mr. Rhyu holds a B.S. from the Wharton School of Business at the University of Pennsylvania and an M.B.A. from the London Business School. |

  15. OUR BOARD RECOMMENDS YOU VOTE “FOR” EACH OF THE NOMINEES

    | RALPH SMITH Age: 75 Director Since: 2023 Nominating and Corporate Governance Committee Independent | Professional Experience: | | | Mr. Smith currently serves as the Managing Director of The Campaign for Grade-Level Reading (“CGLR”), which he launched in May 2010 as a project of the Annie E. Casey Foundation. The CGLR supports a national network of 350+ communities in developing and implementing plans to ensure early school success for children of economically challenged families. From 1994 to 2016, Mr. Smith served on the senior management team at the Annie E. Casey Foundation (“AECF”), first as Director of Planning and Development, then Senior Vice President, and Executive Vice President. At AECF, Mr. Smith led a comprehensive effort to assist local communities committed to improving economic and educational outcomes for families and children in disinvested communities across the nation. He also previously served on the board of directors of LeapFrog Enterprises, Inc. from 2005 to 2009. From 1983-1990, Mr. Smith served as Special Counsel and then as Chief of Staff and Chief Operating Officer for the School District of Philadelphia. From 1991-1993, he served as a senior advisor to Philadelphia’s mayor, focusing on children and family policy. Mr. Smith was a tenured member of the law faculty at the University of Pennsylvania, where he taught education law and policy, corporations, and securities regulation from 1975 to 1997. | | | Attributes, Skills and Qualifications: | | | Mr. Smith holds Bachelor of Arts degree from Loyola University of Los Angeles and a law degree from the University of California, Los Angeles. Mr. Smith was selected as a director because of his leadership experience in education and improving access to educational resources. |

  16. OUR BOARD RECOMMENDS YOU VOTE “FOR” EACH OF THE NOMINEES

    | JOSEPH A. VERBRUGGE Age: 54 Director Since: 2022 Compensation Committee Independent | Professional Experience: | | | Mr. Verbrugge has, since June 2022, served as Chief Commercial Officer of Sirius XM Holdings Inc. (“Sirius XM”), where he oversees all commercial activities focused on marketing, subscription revenue, automotive and streaming partnerships and retail product development and sales for various SiriusXM brands. Mr. Verbrugge has held various senior roles at SiriusXM since 2004, including Executive Vice President, Sirius XM Digital Subscriptions. He serves as a member of the board of directors of SiriusXM Canada, Inc. (previously, Toronto: XSR), and since July 2020 also serves as a member of the Board of Advisors for Georgetown University’s McDonough School of Business. From 1997 to 2004, Mr. Verbrugge worked as a management consultant with The Dealy Strategy Group LLC, where he advised senior leaders of media, technology and services companies on strategy, operations and transactions. | | | Attributes, Skills and Qualifications: | | | Mr. Verbrugge holds a doctorate in philosophy in management studies from University of Oxford, an M.B.A. from Georgetown University and a B.A. from the University of Michigan. Mr. Verbrugge was selected as a director because of his leadership experience in marketing, partnership development, strategy, operations and human resources. |

  17. Compensation of Non-Employee Directors

    Compensation of Non-Employee Directors In fiscal 2023, pursuant to our Amended Non-Employee Directors Compensation Plan (“Directors Compensation Plan”), our non-employee directors were eligible to receive annual cash retainers for service on our Board and assigned committees and restricted stock awards. Mr. Davis, our then Executive Chair, and Mr. Rhyu, our CEO, received no additional compensation for their service on our Board. Pursuant to the terms of the Directors Compensation Plan, each non-employee director receives an annual cash retainer of $70,000, the Lead Independent Director, if applicable, receives an additional $25,000, the non-executive Chair of the Board, if applicable, receives an additional $100,000 and each non-employee director receives an additional amount for each committee on which the non-employee director serves, as shown below:

  18. Compensation of Non-Employee Directors

    | | Additional Cash Retainer | | | Committee | Chair | Member | | Audit Committee | $35,000 | $10,000 | | Compensation Committee | $15,000(1) | $5,000 | | Nominating and Corporate Governance Committee | $10,000(2) | $5,000 |

  19. Compensation of Non-Employee Directors

    | (1) Effective July 28, 2023, the Board increased the annual cash retainer for the chair of the Compensation Committee to $25,000. |

  20. Compensation of Non-Employee Directors

    | (2) Effective July 28, 2023, the Board increased the annual cash retainer for the chair of the Nominating and Corporate Governance Committee to $15,000. |

  21. Compensation of Non-Employee Directors

    In December 2022, each non-employee director received an annual restricted stock award valued at $200,000 as of the grant date, with the shares of our Common Stock underlying such awards vesting fully on the earlier of (a) one year from the date of grant, or (b) the date of the next annual meeting of our stockholders occurring after the date of grant. In addition, the restricted stock awards vest on an accelerated basis upon a non-employee director’s termination of service by reason of death, disability or upon a change in control of the Company. The annual cash retainer, including the committee fees, and the annual restricted stock awards may be deferred in the form of deferred stock units under our Deferred Compensation Plan for Non-Employee Directors (“Directors Deferred Compensation Plan”). In connection with their appointment to the Board on March 27, 2023, Ms. Lawrence and Mr. Smith each received an annual restricted stock award equivalent to $200,000, prorated for the period from the date of appointment to December 31, 2023. They will also be eligible for the cash compensation as provided in our Directors Compensation Plan.

  22. Fiscal 2023 Director Compensation Table

    Fiscal 2023 Director Compensation Table The following table sets forth the compensation paid to our non-employee directors for their services during fiscal 2023, including amounts that were deferred under the Directors Deferred Compensation Plan:

  23. Fiscal 2023 Director Compensation Table

    | Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1) | Total ($) | | Aida M. Alvarez(2) | 75,000 | 200,000 | 275,000 | | Craig R. Barrett(3) | 153,750 | 200,000 | 353,750 | | Robert L. Cohen(4) | 87,500 | 200,000 | 287,500 | | Steven B. Fink(5) | 110,000 | 200,000 | 310,000 | | Victoria D. Harker(6) | 42,500 | — | 42,500 | | Robert E. Knowling, Jr.(7) | 100,583 | 200,000 | 300,583 | | Allison Lawrence(8) | 19,792 | 139,739 | 159,531 | | Liza McFadden(9) | 82,500 | 200,000 | 282,500 | | Ralph Smith(10) | 9,896 | 149,625 | 159,521 | | Joseph A. Verbrugge(11) | 72,500 | 259,021 | 331,521 |

  24. Fiscal 2023 Director Compensation Table

    | (1) Represents the aggregate grant date fair values of stock awards computed in accordance with Financial Accounting Standards Board Accounting Standards Codification (“FASB ASC”) Topic 718. On December 9, 2022, each non-employee director who held such position at the beginning of the calendar year, was eligible to receive a restricted stock award as discussed above. Ms. McFadden, Mr. Knowling and Mr. Verbrugge elected to receive their awards in deferred stock units under the Directors Deferred Compensation Plan. Additionally, Ms. Lawrence elected to receive her initial award in deferred stock units, Mr. Smith elected to receive his initial award partially in deferred stock units, and Mr. Verbrugge elected to receive his initial award partially in deferred stock units. Mr. Smith has also elected to receive a portion of his board compensation in deferred stock units. |

  25. Fiscal 2023 Director Compensation Table

    | (2) As of June 30, 2023, Ms. Alvarez held 6,171 unvested restricted shares. |

  26. Fiscal 2023 Director Compensation Table

    | (3) As of June 30, 2023, Mr. Barrett held 6,171 unvested restricted shares. |

  27. Fiscal 2023 Director Compensation Table

    | (4) As of June 30, 2023, Mr. Cohen held 6,171 unvested restricted shares. |

  28. Fiscal 2023 Director Compensation Table

    | (5) As of June 30, 2023, Mr. Fink held 6,171 unvested restricted shares. |

  29. Fiscal 2023 Director Compensation Table

    | (6) Ms. Harker was not nominated for reelection at the Company’s 2022 Annual Meeting of Stockholders reflecting her desire to cease service on our Board on December 9, 2022. The amount shown represents a pro-rated portion of Ms. Harker’s annual retainer based on her partial year of service. As of June 30, 2023, Ms. Harker held no unvested equity awards. |

  30. Fiscal 2023 Director Compensation Table

    | (7) As of June 30, 2023, Mr. Knowling held 6,171 unvested deferred stock units. |

  31. Fiscal 2023 Director Compensation Table

    | (8) As of June 30, 2023, Ms. Lawrence held 3,535 unvested deferred stock units. |

  32. Fiscal 2023 Director Compensation Table

    | (9) As of June 30, 2023, Ms. McFadden held 6,171 unvested deferred stock units. |

  33. Fiscal 2023 Director Compensation Table

    | (10) As of June 30, 2023, Mr. Smith held 884 unvested restricted shares and 2,907 unvested deferred stock units. |

  34. Fiscal 2023 Director Compensation Table

    | (11) As of June 30, 2023, Mr. Verbrugge held 6,171 unvested deferred stock units. |

  35. Fiscal 2023 Director Compensation Table

    Please see the Security Ownership of Certain Beneficial Owners and Management table below for additional information on the beneficial ownership of our Common Stock by each of our directors.

  36. Compensation Discussion and Analysis

    | Section | Page | | Executive Summary | 36 | | What Guides our Program | 42 | | Compensation-Setting Process | 44 | | Fiscal 2023 Executive Compensation Program in Detail | 47 | | Severance and Change in Control Arrangements | 52 | | Other Executive Compensation Practices and Policies | 53 |

  37. Fiscal 2023 Business Highlights

    | • | Strong Operating Performance. We set rigorous goals for the financial performance metrics under our Executive Bonus Plan and long-term incentive performance awards and delivered solid results for the year. The following table illustrates our strong financial performance for fiscal 2023 (in millions). |

  38. Fiscal 2023 Executive Compensation Program

    Fiscal 2023 Executive Compensation Program Our executive compensation program for fiscal 2023 largely retained the same design used in fiscal 2022, except that the Committee decided to adjust the performance-based metrics under the long-term incentive compensation plan, as described further below under “Long-Term Incentive Compensation.”

  39. Fiscal 2023 Executive Compensation Program

    | • | Market Driven Base Salary Increases. Our executives received base salary increases based on an assessment of pay levels in our compensation peer group and to ensure internal equity alignment and, in the case of Ms. Blackman, due to her promotion. |

  40. Fiscal 2023 Executive Compensation Program

    | • | Annual Bonus Payouts Tied to Strong Financial Performance. For purposes of our Executive Bonus Plan, our executive officers’ performance for fiscal 2023 was, consistent with the fiscal 2022 design, measured based on the attainment of two metrics: revenue and Adjusted EBITDA (with each metric equally weighted). Bonus payments to our executive officers were to be paid at 50% of an individual’s target bonus if threshold performance was achieved, target bonus was to be earned if target performance was achieved, and there was the ability to earn up to 200% of target bonus if the maximum outperform performance level was achieved. Results between performance levels were to be interpolated linearly. Performance on both metrics, revenue and Adjusted EBITDA, exceeded the target performance level for fiscal 2023. |

  41. Fiscal 2023 Executive Compensation Program

    | • | Long-Term Incentives Weighted Towards Performance-Based Awards. With respect to our long-term incentive compensation awards, 60% of the total annual equity award value granted to our NEOs was granted as performance stock unit (“PSU”) awards tied to three-year performance metrics related to financial performance (operating income) and stock price growth, and the remaining 40% was granted as restricted stock awards (“RSAs”) with back-loaded, semi-annual vesting over three years, consistent with fiscal 2022. As with our Executive Bonus Plan, threshold, target and outperform performance levels were established with award earning potential for our executive officers at 50%, 100%, and 200% of the target award payouts, respectively. |

  42. Good Governance Practices

    | What We Do | | What We Don’t Do | | | ✔ | Pay for Performance. A significant portion of our executive officers’ target total compensation is not guaranteed but is linked to our financial and operational performance. In fiscal 2023, in the case of our CEO, 61% of his potential compensation (defined as target total compensation) was performance-based, while 39% was retention-oriented. As for our other NEOs (excluding our Executive Chair), on average, 57% of their potential compensation was performance-based, while 43% was retention-oriented. | ✘ | No Guaranteed Bonuses or Equity Awards. We do not pay guaranteed bonuses and have no guaranteed equity-based awards. This ensures that we are able to base all compensation awards (other than retention-based equity awards) on measurable performance factors and operational results. | | ✔ | Align Compensation to Growth in Stockholder Value. A portion of our multi-year performance-based compensation program is tied to growth in our stock price which directly aligns to stockholder interests. | ✘ | No Excessive Executive Perquisites. We provide nominal perquisites to our executive officers, which are limited to supplemental long-term disability and life insurance premiums, the opportunity to receive a Company-paid physical examination and, when appropriate, reimbursement of relocation expenses and temporary housing expenses. | | ✔ | Establish Performance Goals Aligned to Business Strategy. Our Executive Bonus Plan and long-term equity incentive program utilize performance-based goals that the Committee believes are rigorous and challenging. | ✘ | No Tax Reimbursements or Gross-Ups. We do not provide income tax gross-ups for personal or broad-based benefits nor excise tax gross-ups for change in control payments or benefits. | | ✔ | Target Pay Competitively. We seek to target compensation within a competitive range of our compensation peer group and seek to deliver greater compensation only for superior performance. | ✘ | No Pension or Supplemental Retirement Plans. We do not provide retirement benefits to our executive officers that reward longevity rather than contributions to Company performance. | | ✔ | Use Meaningful Vesting Conditions to Promote Retention. Performance-based equity awards under our long-term equity incentive program are earned and vest only to the extent that the applicable performance targets are attained and remain subject to additional time-based vesting thereafter to encourage retention if the performance period is less than three years. Generally, time-based RSAs vest over three years, with greater vesting in years two and three to further promote retention. | ✘ | No Repricing of Stock Options without Stockholder Approval. Our 2016 Equity Incentive Award Plan expressly prohibits repricing of options, and we can only do so with stockholder approval. |

  43. Pay Versus Performance

    Pay Versus Performance Our performance assessment framework and executive compensation program is designed to link pay and performance in the following ways:

  44. Pay Versus Performance

    | Metric | Determination and Link to Performance | Purpose | | Base Salary | Evaluated annually by the Committee and reviewed in light of market pay practices, retention, internal parity, experience and critical skills. | Provide an annual income necessary to retain our executive officers. | | Executive Bonus Plan | Annual performance determines payouts. Ties a meaningful portion of target annual cash compensation to attaining pre-established performance goals. | Focus our executive officers on attaining financial and strategic performance objectives from year to year. | | Long-Term Incentives | Time-based restricted stock awards: Encourage retention of our executive officers by vesting over three years. Performance-based restricted stock unit awards: Performance targets are established based on meaningful and rigorous metrics that drive stockholder value. No awards will be earned if performance fails to achieve threshold performance level. | Enhance retention of key executive officers who drive consistent performance. Motivate and reward our executive officers for achievement of long-term goals that increase stockholder value. | | Other Compensation | Our executive officers may participate in benefit programs on the same terms as our other employees, such as health and welfare benefit plans, a 401(k) plan, life insurance, and executive life and disability plans. Our executive officers may elect to participate in a non-qualified deferred compensation plan providing tax-efficient savings but receive no additional Company contributions. Premiums for executive life and disability insurance benefits are paid by the Company. | Provides benefits having high perceived values and offers tax advantages. |

  45. Role of Compensation Consultant

    Role of Compensation Consultant The Committee’s charter gives it the authority to retain and approve fees and other terms of engagement for compensation consultants and other advisors to assist it in performing its duties. In fiscal 2023, the Committee continued to retain Compensia, a national compensation consulting firm, as its compensation consultant. Compensia’s work for the Committee included, among other services, a review and update of the compensation peer group, a subsequent executive compensation market analysis based on an assessment of the compensation practices of the companies in the compensation peer group and companies in adjacent industries, a review and analysis of the compensation of the non-employee members of our Board and a review and report on the risk profile of our executive compensation program. Compensia also provides the Committee with assessments of the Company’s executive compensation practices and makes recommendations based on best practices. In addition, Compensia meets on a frequent basis with the Chair of the Committee to discuss a host of compensation matters, including, but not limited to, compensation strategy, trends and to review the policies and viewpoints of the major proxy advisory firms. Compensia reports directly to the Committee, which will annually review its performance, independence and fees. In fiscal 2023, the Committee assessed Compensia’s independence and concluded that Compensia’s work for the Committee did not raise any conflict of interest.

  46. Assessing Competitive Market Data

    Assessing Competitive Market Data The Committee believes that peer group comparisons are useful guides to measure the competitiveness of our executive compensation program and related policies and practices. To assess our executive compensation against the competitive market, the Committee reviews and considers the compensation levels and practices of a select group of peer companies. For purposes of reviewing and updating the compensation peer group for fiscal 2023, Compensia engaged in discussions with the Committee about the peer selection process and additional discussions with management. In evaluating the composition of our compensation peer group for fiscal 2023, the Committee considered the following primary factors which are intended to identify a reasonable group of peers from a number of related industry sectors for consideration in our unique situation, where there are, at present, no other publicly traded providers of online and blended schools in the kindergarten through 12th grade market:

  47. Assessing Competitive Market Data

    | • | Industry and business focus – companies in the education services, software and human resources or employment services sectors; |

  48. Assessing Competitive Market Data

    | • | Revenue – companies with revenue ranging from approximately 0.4x to approximately 3.0x the Company’s last four quarters revenue (which produced a target range of approximately $650 million to $4.9 billion); |

  49. Assessing Competitive Market Data

    | • | Market capitalization – companies with market capitalizations ranging from approximately 0.25x to approximately 7.0x the Company’s market capitalization (which produced a target range of approximately $365 million to $10.2 billion); |

  50. Assessing Competitive Market Data

    | • | Companies with subscription business models; |

  51. Assessing Competitive Market Data

    | • | Companies in industries suggested by members of the executive team; |

  52. Assessing Competitive Market Data

    | • | Companies in the gaming/artificial intelligence industries; and |

  53. Assessing Competitive Market Data

    | • | Companies that are peers of companies that have selected Stride as a peer. |

  54. Assessing Competitive Market Data

    Based on these criteria and the informed judgment of the Committee, six companies were removed from the then-current compensation peer group (Stitch Fix, WW International, CornerStone OnDemand, Houghton Mifflin Harcourt Company, j2 Global and Proofpoint) and six companies were added to the peer group (Avaya Holdings, iHeartMedia, Teradata, TrueBlue, Yelp and Ziff Davis) to better align with the Company’s ongoing business focus. Accordingly, the Committee approved the following compensation peer group for fiscal 2023:

  55. Assessing Competitive Market Data

    | 2U | Graham Holdings Company | Strategic Education | | ACI Worldwide | iHeartMedia | Teradata | | Adtalem Global Education | Kforce | TrueBlue | | Avaya Holdings | Laureate Education | Yelp | | Blackbaud | Perdoceo Education | Ziff Davis | | Chegg | Scholastic | |

  56. Assessing Competitive Market Data

    At the beginning of fiscal 2023, Compensia used this peer group to prepare an analysis for the Committee that compared the compensation levels of our executive officers to comparable executive positions at the companies in the peer group. The Committee used data drawn from the companies in our compensation peer group to evaluate the competitive market when reviewing and adjusting the target total direct compensation packages for our NEOs, other than our Executive Chair, including annual base salary, target annual bonus opportunities and long-term incentive compensation opportunities, for fiscal 2023. The Committee did not review the Executive Chair’s compensation package for market competitiveness, given his anticipated retirement at the end of September 2022. The Committee reviews our compensation peer group regularly and makes adjustments to its composition annually, taking into account changes in both our business and the businesses of the companies in the peer group.

  57. Base Salary

    Base Salary The base salaries for our NEOs are generally set at levels deemed necessary to attract and retain individuals with superior talent, while taking into account the target total direct compensation package provided to each NEO. Base salaries are reviewed annually by the Committee and are adjusted from time to time as deemed necessary in conjunction with recommendations made by our CEO, to ensure that our executive compensation program remains aligned with our compensation objectives and retention of critical talent. Compensation adjustments for our CEO are recommended by the Committee and reviewed and approved by the independent members of our Board. In considering base salary adjustments for fiscal 2023 in August 2022, the Committee reviewed a competitive market assessment of executive compensation levels prepared by Compensia, which showed that the base salary level of our CEO was below the 50th percentile of our compensation peer group, and the base salary level of our other NEOs, on average, approximated the 60th percentile of our compensation peer group. The Committee also reviewed tally sheets which detailed the historical pay for each NEO. The Compensation Committee recommended, and the independent members of our Board approved, an increase to the base salary of our CEO to bring it further into line with the 60th percentile of our compensation peer group. Our other NEOs also received increases in base salary to ensure internal equity alignment and, in the case of Ms. Blackman, due to her promotion, to bring her base salary further into line with the 50th percentile of our compensation peer group. Mr. Davis did not receive a base salary increase during fiscal 2023 due to his anticipated retirement. The annual base salaries of our NEOs for fiscal 2023 as set in August 2022 were as follows:

  58. Annual Incentive Compensation

    Annual Incentive Compensation Our Executive Bonus Plan is designed to ensure that a meaningful portion of our NEOs’ target total cash compensation is “at risk.” For the fiscal 2023 Executive Bonus Plan, the Committee selected two corporate performance management objectives (“PMOs”) – revenue and Adjusted EBITDA – for the plan which are the key metrics for gauging our profitability and growth, which ultimately enhances stockholder value. Target Annual Bonus Opportunities Target annual bonus opportunities for our NEOs are reviewed by the Committee annually and set at levels that, when combined with base salary levels, are intended to provide market-competitive target total cash compensation opportunities. Following its review of a competitive market assessment of executive compensation levels prepared by Compensia, the Committee approved, or in the case of our CEO recommended to the independent members of our Board for approval, an increase to Ms. Blackman’s and Mr. Ottolenghi’s target annual bonus opportunity, as set forth in the table below, and determined to leave the target annual bonus opportunities of our other NEOs (other than Mr. Davis) at their fiscal 2022 levels. In the case of Ms. Blackman, the increase reflected her promotion to CFO in July 2022. The Committee did not approve a target annual bonus opportunity for Mr. Davis for fiscal 2023 due to his anticipated retirement. The target annual bonus opportunities for our NEOs for fiscal 2023 as set in August 2022 were as follows (Mr. Davis was not eligible for an annual bonus due to his retirement):

  59. Annual Incentive Compensation

    | Named Executive Officer | Fiscal 2023 Target Annual Bonus Opportunity (as a percentage of base salary) | Fiscal 2022 Target Annual Bonus Opportunity (as a percentage of base salary) | | James J. Rhyu | 150% | 150% | | Nathaniel Davis | N/A | 150% | | Donna Blackman | 100% | 50% | | Vincent W. Mathis | 80% | 80% | | Les Ottolenghi | 80% | 60% |

  60. Annual Incentive Compensation

    Goal Setting Process and Rationale The Committee spends considerable time evaluating the appropriate corporate PMOs to be included in our Executive Bonus Plan each fiscal year. After such evaluation for fiscal 2023, the Committee determined that it was appropriate to continue to use revenue and Adjusted EBITDA, each equally weighted, as the corporate PMOs for the fiscal 2023 Executive Bonus Plan, consistent with the approach in fiscal 2022.

  61. Annual Incentive Compensation

    | Category | Corresponding Metric | | Profitability | Adjusted EBITDA | | Growth | Revenue |

  62. Annual Incentive Compensation

    In setting performance levels for each metric, the Committee remained committed to establishing rigorous performance goals to ensure alignment of realized pay amounts with our actual corporate performance. After careful consideration, the Committee set the target performance levels for the revenue and Adjusted EBITDA metrics at $1,780.0 million and $286.6 million, respectively. For fiscal 2023, the threshold performance level for the revenue metric was set at our actual results for fiscal 2022, while the threshold performance level for the Adjusted EBITDA metric was set just below our fiscal 2022 actual results in recognition of the impact of inflation on structural costs. Payouts under the fiscal 2023 Executive Bonus Plan for our NEOs were based solely on the achievement of these corporate PMOs, which the Committee determined was appropriate to focus the efforts of our NEOs on improving Company performance and increasing stockholder value. Fiscal 2023 Executive Bonus Plan Formula: Performance Results The corporate PMOs under our fiscal 2023 Executive Bonus Plan are set forth in the table below. Each PMO provided our NEOs with the opportunity to earn an above target award for that PMO in the event the Company exceeds the pre-established performance level for the PMO, but also provided for no awards below minimum thresholds of performance. Achievement of a PMO at the threshold level resulted in a payout at 50% of the target level, and achievement at the “outperform” level resulted in a payout at 200% of the target level. Performance between levels was extrapolated on a straight-line basis. In July 2023, the Committee reviewed our achievement against these corporate PMOs, with the results as follows (in millions):

  63. Annual Incentive Compensation

    | Metric | Weighting | Performance Level (Threshold) | Performance Level (Target) | Performance Level (Outperform) | Actual Results | Payment Percentage | | Revenue(1) | 50% | $1,686.7 | $1,780.0 | $1,958.0 | $1,837.4 | 132% | | Adjusted EBITDA(2) | 50% | $272.3 | $286.6 | $315.3 | $296.2 | 134% | | Overall Weighted Payment Percentage | | | | | | 133% |

  64. Annual Incentive Compensation

    | (1) For purposes of the fiscal 2023 Executive Bonus Plan, “revenue” may be adjusted at the Committee’s discretion for any unusual, non-recurring event that were separately identified and quantified in our financial statements. No adjustments were made to revenue for purposes of determining results under the fiscal 2023 Executive Bonus Plan. |

  65. Annual Incentive Compensation

    | (2) For purposes of the fiscal 2023 Executive Bonus Plan, “Adjusted EBITDA” means earnings before interest, taxes, depreciation and amortization, less stock-based compensation, and subject to adjustment in the Committee’s discretion for any acquisition-related charges and/or any unusual, non-recurring gain or loss that was separately identified and quantified in our financial statements. A reconciliation of this non-GAAP financial measure to the most directly comparable GAAP financial measure is provided in Appendix A. |

  66. Annual Incentive Compensation

    Fiscal 2023 Executive Bonus Plan Payments The following table sets forth, for each NEO, the Committee’s approved annual bonus award under our fiscal 2023 Executive Bonus Plan based upon performance against the corporate PMOs.

  67. Annual Incentive Compensation

    | Named Executive Officer | Revenue Achievement (50% Weighting) | Adjusted EBITDA Achievement (50% Weighting) | Percentage of Target Annual Bonus Earned (%) | Bonus Amount ($) | | James J. Rhyu | 132% | 134% | 133% | $1,695,886 | | Donna Blackman | 132% | 134% | 133% | $698,306 | | Vincent W. Mathis | 132% | 134% | 133% | $532,043 | | Les Ottolenghi | 132% | 134% | 133% | $505,440 |

  68. Long-Term Incentive Compensation

    Long-Term Incentive Compensation We believe that providing long-term incentive compensation opportunities in the form of equity awards promotes our philosophy of aligning executive pay with the long-term interests of our stockholders. Consistent with our redesigned long-term incentive compensation program launched in fiscal 2022, the Committee weighted the fiscal 2023 long-term incentive compensation awards for our NEOs to be 60% performance-based and continued the use of three-year performance metrics for our performance-based long-term incentive awards, and 40% time-based restricted stock awards. Fiscal Year 2023 Long-Term Incentive Awards The Committee considered various factors in determining award levels for each NEO, including competitive market data drawn from our compensation peer group, analysis prepared by Compensia, and our executive retention objectives. The following table sets forth the target award values for our NEOs for fiscal 2023 and the resulting number of shares of Common Stock subject to each type of award. Mr. Davis did not receive any equity awards in fiscal 2023 due to his retirement. The awards granted to our CEO were recommended by the Committee and reviewed and approved by the independent members of our Board.

  69. Long-Term Incentive Compensation

    | Named Executive Officer | Target Annual Equity Award Value(1) | Time-Based Shares - RSAs (#)(3) | Performance-Based Shares - PSUs(1) | | | | | | | Threshold (#) | Target (#) | Outperform (#) | | James J. Rhyu | $7,000,000 | 77,860 | 58,395 | 116,790 | 233,580 | | Donna Blackman(2) | $2,500,000 | 27,800 | 20,855 | 41,710 | 83,420 | | Vincent W. Mathis | $1,500,000 | 16,680 | 12,510 | 25,020 | 50,040 | | Les Ottolenghi | $1,250,000 | 13,900 | 10,425 | 20,850 | 41,700 |

  70. Long-Term Incentive Compensation

    | (1) The Committee determined the number of shares underlying the RSAs and target number of PSUs by dividing the target award value shown in the table above by the fair market value of our common stock on August 12, 2022, the date on which the RSAs were granted. The PSUs were not granted by the Committee until September 6, 2022, but the target award value in the table above was still divided by the fair market value of our common stock on August 12, 2022 to determine the number of PSUs awarded, consistent with the methodology for the RSAs. As a result, the aggregate target award value reflected in the table above differs from the grant date fair values reported in the Summary Compensation Table below. |

  71. Long-Term Incentive Compensation

    | (2) With respect to Ms. Blackman, the value of her fiscal 2023 equity award represented both an amount (i) reflecting her promotion to CFO in July 2022 and (ii) an amount consistent with our annual equity awards. |

  72. Long-Term Incentive Compensation

    | (3) The RSAs granted to our NEOs for fiscal 2023 vest subject to our standard vesting schedule, which is semi-annually over a three-year period, with 20% of the shares of our Common Stock subject to the awards vesting in the first year and 40% vesting in each of the next two years following the grant date. |

  73. Long-Term Incentive Compensation

    Fiscal Year 2023 PSU Award Performance Metrics. As set forth in the table below, the PSU awards granted to our NEOs for fiscal 2023 are to be earned based on two performance metrics: operating income, a metric tied to financial performance, and stock price performance associated with established levels of compound annual growth rate (“CAGR”), as the Committee believes this combination best reflect a means for monitoring our executive officers’ execution of our long-term strategy aimed at delivering greater value to stockholders and ensuring a strong alignment between management and our stockholders. Each metric is to be measured at the end of a three-year performance period and weighted equally. Any earned shares will be immediately vested upon the attainment of the performance metric at the end of the three-year performance period. For each metric, below threshold performance will result in no vesting for the corresponding portion of the PSUs.

  74. Long-Term Incentive Compensation

    | Metric | Weighting | Performance Level (Threshold) 50% Payout | Performance Level (Target) 100% Payout | Performance Level (Outperform) 200% Payout | | FY 2025 Operating Income | 50% | $156.6 million | $172.3 million | $203.6 million | | Stock Price CAGR | 50% | 10% CAGR | 20% CAGR | 40% CAGR |

  75. Long-Term Incentive Compensation

    | • | Operating Income Metric (50% weighting). For purposes of the PSUs, operating income is defined as operating income as determined in accordance with GAAP, excluding the stock-based compensation expense associated with any long-term equity incentive |

  76. Long-Term Incentive Compensation

    awards granted by the Committee during fiscal 2023. In addition, operating income may, at the Committee’s discretion, exclude any acquisition related charges (which would include amortization subsequent to an acquisition transaction) and any other unusual, non-recurring gain or loss that is separately identified in our financial statements. Operating income will be measured over fiscal year 2025 for purposes of the fiscal 2023 PSUs. Financial achievement falling between the specified levels will be interpolated linearly between performance levels for the operating income metric. For the fiscal 2023 PSUs, the Committee initially retained gross margin percentage as the financial performance metric. However, in October 2022, the Committee determined it was necessary to re-evaluate whether gross margin percentage was the optimal performance metric to incentivize management and align their interests with those of our stockholders. The Committee reviewed a market and peer group analysis prepared by Compensia, the Committee’s independent compensation consultant, which indicated that operating income is a performance metric commonly used by our peers and by technology companies in their executive compensation programs. In addition, the use of operating income in our long-term incentive program avoids duplicating metrics used in our short-term incentive (annual bonus) plan, which helps to further diversify the performance metrics used to measure and reward executive and Company performance in our compensation programs. Following this review, the Committee determined that operating income would replace gross margin percentage as a performance metric for the fiscal 2023 PSU awards, effective October 28, 2022.

  77. Long-Term Incentive Compensation

    | • | Stock Price CAGR Metric (50% weighting). The other metric used for PSUs granted to NEOs is related to our stock price CAGR as measured at the end of the three-year performance period. The starting point for these calculations will be equal to the average closing stock price over the 20 calendar days preceding the grant date of the award. Performance against the stock price portion of the PSU award will be assessed as of September 15, 2025 (or the next following date if September 15, 2025 is a non-trading day) and will be based on the average closing stock price over the preceding 20 calendar days. Achievement falling between the specified levels will be interpolated linearly between performance levels for the stock price CAGR metric, measured at 2.5% intervals between performance levels. |

  78. Severance and Change in Control Arrangements

    Severance and Change in Control Arrangements We consider severance arrangements to be an integral part of the overall compensation package for our executive officers. We provide severance to attract and retain individuals with superior ability and managerial talent and to provide our executive officers with appropriate protections due to their vulnerability to terminations of employment due to a change in control, merger or other acquisition of the Company and encourage our executive officers to focus their attention on their work duties and responsibilities in all situations. We believe that providing our NEOs with severance payments and benefits upon certain terminations of employment are key retention tools that help us remain competitive with the companies in our compensation peer group, provide our executive officers with incentives to focus on the best interests of our stockholders in the context of a potential change in control and appropriately protect our executive officers in the event of an involuntary termination of employment without creating a windfall due solely to a change in control. We are party to an employment letter with Mr. Rhyu (that was most recently amended and restated on February 25, 2022). For more information about this employment arrangement and the severance provisions thereunder, see “Employment Letter Agreement with Mr. Rhyu” below. Our other NEOs (other than Mr. Davis, who retired in September 2022) are generally entitled to receive severance payments and benefits upon a qualifying termination of employment under the Company’s severance guidelines and individual change in control severance agreements, as described under “Severance Guidelines for Other Named Executive Officers” and “Change in Control Arrangements with Other Named Executive Officers,” respectively, below.

  79. Equity Award Grant Policy

    Equity Award Grant Policy We do not have any program, plan, or practice to time the grant of equity awards to our employees in coordination with the release of material non-public information. We generally grant awards at the time employment commences and annually in connection with our annual compensation review process. Neither our Board nor the Committee seek to time the grant of equity awards based on potential movement of our stock price.

  80. Fiscal 2023 Summary Compensation Table

    Fiscal 2023 Summary Compensation Table The following table shows the compensation we paid to our NEOs for services rendered during fiscal 2023, 2022, and 2021.

  81. Fiscal 2023 Summary Compensation Table

    | Name | Fiscal Year | Base Salary ($) | Bonus ($) | Stock Awards ($)(1) | Nonequity Incentive Plan Compensation ($)(2) | All Other Compensation ($)(3) | Total ($) | | James J. Rhyu Chief Executive Officer | 2023 | $880,769 | — | $7,146,186 | $1,695,886 | $14,892 | $9,737,733 | | | 2022 | $784,615 | — | $5,056,893 | $1,834,683 | $15,803 | $7,691,994 | | | 2021 | 628,404 | — | $2,499,642 | $1,575,123 | $12,941 | $4,716,110 | | Nathaniel A. Davis Former Executive Chair | 2023 | $153,846 | — | — | — | $25,697 | $179,543 | | | 2022 | $500,000 | — | $999,853 | $1,146,677 | $13,696 | $2,660,226 | | | 2021 | $769,365 | — | $2,999,828 | $2,236,521 | $11,843 | $6,017,557 | | Donna Blackman Chief Financial Officer | 2023 | $534,423 | — | $2,551,925 | $698,306 | $13,192 | $3,797,846 | | Vincent W. Mathis Executive Vice President, General Counsel and Secretary | 2023 | $518,077 | — | $1,530,933 | $532,043 | $15,818 | $2,596,871 | | | 2022 | $466,154 | — | $1,263,865 | $574,867 | $14,698 | $2,319,584 | | | 2021 | $443,846 | — | $799,638 | $712,000 | $11,538 | $1,967,022 | | Les Ottolenghi Chief Information and Technology Officer | 2023 | $491,154 | — | $1,275,777 | $505,440 | $8,280 | $2,280,651 | | | 2022 | $420,000 | $37,500 | $758,389 | $385,283 | $7,128 | $1,608,300 |

  82. Fiscal 2023 Summary Compensation Table

    | (1) This column represents the aggregate grant date fair value of stock awards computed in accordance with FASB ASC Topic 718, excluding the effect of estimated forfeitures. For the portion of the performance-based stock awards granted during fiscal 2023 tied to gross margin percentage, amounts are shown based on the probable outcome of the performance condition as determined at the date of grant, which was determined to be the target level of performance. For the portion of the performance-based stock awards granted during fiscal year 2023 tied to stock price CAGR, amounts are shown based on fair value determined using a Monte Carlo simulation model and the following assumptions: the Company’s Common Stock price at the date of grant of $38.77; a three-year continuously compounded equivalent risk-free rate of 3.49%; an expected stock price volatility of 55%; a dividend yield of 0%; and an expected term of approximately three years. |

  83. Fiscal 2023 Summary Compensation Table

    For the portion of the performance-based stock awards granted during fiscal 2022 tied to gross margin percentage, amounts are shown based on the probable outcome of the performance condition as determined at the date of grant, which was determined to be the target level of performance. For the portion of the performance-based stock awards granted during fiscal year 2022 tied to stock price CAGR, amounts are shown based on fair value determined using a Monte Carlo simulation model and the following assumptions: the Company’s Common Stock price at the date of grant of $35.62; a three-year continuously compounded equivalent risk-free rate of 0.44%; an expected stock price volatility of 55%; a dividend yield of 0%; and an expected term of approximately three years. The grant date fair values of the performance-based stock awards granted in fiscal 2021 were calculated based on the probable outcome of the applicable performance condition as determined at the date of grant, which was determined to be the target level of performance in each case. Refer to Note 9, “Equity Incentive Plan,” to the consolidated audited financial statements in our Annual Report on Form 10-K for the fiscal year ended June 30, 2023 for a discussion of the relevant assumptions used to determine the grant date fair value of these awards. On October 28, 2022, the Compensation Committee voted to change the metric related to the performance-based stock awards granted during fiscal 2023. Instead of being measured against gross margin percentage, recipients would earn these awards based on operating income metrics. This resulted in a change to the fair market value from $38.77 to $33.16 per share. The revised values above for each NEO would be as follows: Mr. Rhyu: $9,410,137, Ms. Blackman: $3,680,850, Mr. Mathis: $2,526,690, and Mr. Ottolenghi: $2,222,167. If “maximum” performance is assumed for the performance-based stock awards granted to our NEOs during fiscal 2023, the total grant date value (as revised for the change in metric above) of such performance-based stock awards for each NEO would be as follows: Mr. Rhyu: $5,955,122, Ms. Blackman: $2,126,793, Mr. Mathis: $1,275,770, and Mr. Ottolenghi: $1,063,142.

  84. Fiscal 2023 Summary Compensation Table

    | (2) All amounts are reported in the fiscal year earned, regardless of when they are paid. |

  85. Fiscal 2023 Summary Compensation Table

    | (3) The amounts in this column for fiscal year 2023 consist of 401(k) plan matching contributions, Company-paid life insurance, long-term disability premiums and, with respect to Mr. Davis only, vacation payouts. |

  86. Fiscal 2023 Grants of Plan-Based Awards Table

    Fiscal 2023 Grants of Plan-Based Awards Table The following table provides information regarding grants of plan-based awards to our NEOs during fiscal 2023. The equity awards described in the following table were granted under our 2016 Equity Incentive Award Plan. Mr. Davis did not receive any grants of plan-based awards in fiscal 2023.

  87. Fiscal 2023 Grants of Plan-Based Awards Table

    | Name | Grant Date | Estimated Possible Payouts under Nonequity Incentive Plan Awards(1) | | | Estimated Possible Payouts under Equity Incentive Plan Awards | | | All Other Stock Awards: Number of Shares of Stock (#) | Grant Date Fair Value of Stock Awards ($)(5) | | | | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | | James J. Rhyu Chief Executive Officer | — | 637,500 | 1,275,000 | 2,550,000 | — | — | — | — | — | | | 9/6/2022(2) | | — | — | 29,198 | 58,395 | 116,790 | — | 2,263,974 | | | 9/6/2022(3) | | — | — | 29,198 | 58,395 | 116,790 | — | 2,082,366 | | | 8/12/2022(4) | | — | — | — | — | — | 77,860 | 2,799,846 | | Donna Blackman Chief Financial Officer | — | 262,500 | 525,000 | 1,050,000 | — | — | — | — | — | | | 9/6/2022(2) | | — | — | 10,428 | 20,855 | 41,710 | — | 808,548 | | | 9/6/2022(3) | | — | — | 10,428 | 20,855 | 41,710 | — | 743,689 | | | 8/12/2022(4) | | — | — | — | — | — | 27,800 | 999,688 | | Vincent W. Mathis Executive Vice President, General Counsel and Secretary | — | 200,000 | 400,000 | 800,000 | — | — | — | — | — | | | 9/6/2022(2) | | — | — | 6,255 | 12,510 | 25,020 | — | 485,013 | | | 9/6/2022(3) | | — | — | 6,255 | 12,510 | 25,020 | — | 446,107 | | | 8/12/2022(4) | | — | — | — | — | — | 16,680 | 599,813 | | Les Ottolenghi Chief Information and Technology Officer | — | 190,000 | 380,000 | 760,000 | — | — | — | — | — | | | 9/6/2022(2) | | — | — | 5,213 | 10,425 | 20,850 | — | 404,177 | | | 9/6/2022(3) | | — | — | 5,213 | 10,425 | 20,850 | — | 371,756 | | | 8/12/2022(4) | | — | — | — | — | — | 13,900 | 499,844 |

  88. Fiscal 2023 Grants of Plan-Based Awards Table

    | (1) Represents the threshold target and maximum incentive awards payable under our Executive Bonus Plan based on fiscal 2023 base salaries for each NEO. For additional information regarding our Executive Bonus Plan, see “Fiscal 2023 Executive Compensation Program in Detail —Target Annual Bonus Opportunities” above. |

  89. Fiscal 2023 Grants of Plan-Based Awards Table

    | (2) Represents PSUs that will be earned based on the attainment of gross margin percentage objectives for the three-year performance period. On October 28, 2022, the Compensation Committee voted to change the metric related to the performance-based stock awards granted during fiscal 2023. Instead of being measured against gross margin percentage, recipients would earn these awards based on operating income metrics. This resulted in a change to the fair market value from $38.77 to $33.16 per share. The revised values above for each NEO would be as follows: Mr. Rhyu: $1,936,378, Ms. Blackman: $691,552, Mr. Mathis: $414,832, and Mr. Ottolenghi: $345,693. |

  90. Fiscal 2023 Grants of Plan-Based Awards Table

    | (3) Represents PSUs that will be earned based on the attainment of stock price CAGR objectives for the three-year performance period. |

  91. Fiscal 2023 Grants of Plan-Based Awards Table

    | (4) Represents RSAs vesting semi-annually over a three-year period, with 20% vesting in the first year and 40% vesting in each of the next two years following the grant date. |

  92. Fiscal 2023 Grants of Plan-Based Awards Table

    | (5) This column represents the aggregate grant date fair value of stock awards computed in accordance with FASB ASC Topic 718, excluding the effect of estimated forfeitures. See footnote 1 to the Summary Compensation Table above for more information. |

  93. Fiscal 2023 Outstanding Equity Awards at Fiscal Year-End Table

    Fiscal 2023 Outstanding Equity Awards at Fiscal Year-End Table The following table provides information regarding outstanding equity awards held by our NEOs as of June 30, 2023. The section titled “Long-Term Incentive Compensation” in the Compensation Discussion and Analysis above provides additional information regarding the outstanding equity awards granted in fiscal 2023 set forth in this table. The payout and market values below are based upon the price per share of our Common Stock on June 30, 2023 of $37.23. Mr. Davis did not hold any equity awards as of June 30, 2023.

  94. Fiscal 2023 Outstanding Equity Awards at Fiscal Year-End Table

    | | Stock Awards | | | | | Name | Equity Incentive Plan Awards: Amount of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) | | James J. Rhyu Chief Executive Officer | | | 136,500(1) | 5,081,895 | | | 42,110(2) | 1,567,755 | — | — | | | 42,110(3) | 1,567,755 | — | — | | | 58,395(4) | 2,174,046 | — | — | | | 58,395(5) | 2,174,046 | — | — | | Donna Blackman Chief Financial Officer | | | 26,364(6) | 981,532 | | | 1,680(2) | 62,546 | — | — | | | 1,680(3) | 62,546 | — | — | | | 20,855(4) | 776,432 | — | — | | | 20,855(5) | 776,432 | — | — | | Vincent W. Mathis Executive Vice President, General Counsel and Secretary | | | 29,139(7) | 1,084,845 | | | 10,525(2) | 391,846 | — | — | | | 10,525(3) | 391,846 | — | — | | | 12,510(4) | 465,747 | — | — | | | 12,510(5) | 465,747 | — | — | | Les Ottolenghi Chief Information and Technology Officer | | | 32,186(8) | 1,198,285 | | | 6,315(2) | 235,107 | — | — | | | 6,315(3) | 235,107 | — | — | | | 10,425(5) | 388,123 | — | — | | | 10,425(4) | 388,123 | — | — |

  95. Fiscal 2023 Outstanding Equity Awards at Fiscal Year-End Table

    | (1) Mr. Rhyu’s outstanding RSAs vest as follows, subject to his continued employment through the applicable vesting date: |

  96. Fiscal 2023 Outstanding Equity Awards at Fiscal Year-End Table

    | • | 4,918 restricted shares represent performance-based restricted stock granted to Mr. Rhyu in fiscal 2021. The shares were deemed earned in early fiscal 2022. 4,918 shares vested on August 6, 2023; |

  97. Fiscal 2023 Outstanding Equity Awards at Fiscal Year-End Table

    | • | 2,219 shares vested on August 12, 2023; |

  98. Fiscal 2023 Outstanding Equity Awards at Fiscal Year-End Table

    | • | 13,461 restricted shares represent performance-based restricted stock granted to Mr. Rhyu in fiscal 2021. The shares were deemed earned in January 2022. 13,461 shares will vest on January 26, 2024; |

  99. Fiscal 2023 Outstanding Equity Awards at Fiscal Year-End Table

    | • | 6,072 shares vested on July 26, 2023 and 6,072 shares will vest on January 26, 2024; |

  100. Fiscal 2023 Outstanding Equity Awards at Fiscal Year-End Table

    | • | 11,228 shares vested on August 13, 2023 and 22,456 shares will vest semi-annually in two equal installments beginning on February 13, 2024; and |

  101. Fiscal 2023 Outstanding Equity Awards at Fiscal Year-End Table

    | • | 7,786 shares vested on August 12, 2023 and 62,288 shares will vest semi-annually in four equal installments beginning on February 12, 2024. |

  102. Fiscal 2023 Outstanding Equity Awards at Fiscal Year-End Table

    | (2) Represents PSUs that will be earned based on the attainment of gross margin percentage measured at the end of fiscal 2024. The number of shares reflected in the table above is based on target achievement levels. |

  103. Fiscal 2023 Outstanding Equity Awards at Fiscal Year-End Table

    | (3) Represents PSUs that will be earned based on the attainment of stock price growth measured at the beginning of fiscal 2025. The number of shares reflected in the table above is based on target achievement levels. |

  104. Fiscal 2023 Outstanding Equity Awards at Fiscal Year-End Table

    | (4) Represents PSUs that will be earned based on the attainment of operating income measured at the end of fiscal 2025. The number of shares reflected in the table above is based on target achievement levels. |

  105. Fiscal 2023 Outstanding Equity Awards at Fiscal Year-End Table

    | (5) Represents PSUs that will be earned based on the attainment of stock price growth measured at the beginning of fiscal 2026. The number of shares reflected in the table above is based on target achievement levels. |

  106. Fiscal 2023 Outstanding Equity Awards at Fiscal Year-End Table

    | (6) Ms. Blackman’s outstanding RSAs vest as follows, subject to her continued employment through the applicable vesting date: |

  107. Fiscal 2023 Outstanding Equity Awards at Fiscal Year-End Table

    | • | 448 shares vested on August 13, 2023 and 896 shares will vest semi-annually in two equal installments beginning on February 13, 2024; and |

  108. Fiscal 2023 Outstanding Equity Awards at Fiscal Year-End Table

    | • | 2,780 shares vested on August 12, 2023 and 22,240 shares will vest semi-annually in four equal installments beginning on February 12, 2024. |

  109. Fiscal 2023 Outstanding Equity Awards at Fiscal Year-End Table

    | (7) Mr. Mathis’ outstanding RSAs vest as follows, subject to his continued employment through the applicable vesting date: |

  110. Fiscal 2023 Outstanding Equity Awards at Fiscal Year-End Table

    | • | 3,934 restricted shares represent performance-based restricted stock granted to Mr. Mathis in fiscal 2021. The shares were deemed earned in early fiscal 2022. 3,934 shares vested on August 5, 2023; |

  111. Fiscal 2023 Outstanding Equity Awards at Fiscal Year-End Table

    | • | 1,775 shares vested on August 12, 2023; |

  112. Fiscal 2023 Outstanding Equity Awards at Fiscal Year-End Table

    | • | 2,806 shares vested on August 13, 2023 and 5,612 shares will vest semi-annually in two equal installments beginning on February 13, 2024; and |

  113. Fiscal 2023 Outstanding Equity Awards at Fiscal Year-End Table

    | • | 1,668 shares vested on August 12, 2023 and 13,344 shares will vest semi-annually in four equal installments beginning on February 12, 2024. |

  114. Fiscal 2023 Outstanding Equity Awards at Fiscal Year-End Table

    | (8) Mr. Ottolenghi’s outstanding RSAs vest as follows, subject to his continued employment through the applicable vesting date: |

  115. Fiscal 2023 Outstanding Equity Awards at Fiscal Year-End Table

    | • | 14,624 shares will vest semi-annually in two equal installments beginning on December 15, 2023; |

  116. Fiscal 2023 Outstanding Equity Awards at Fiscal Year-End Table

    | • | 1,684 shares vested on August 13, 2023 and 3,368 shares will vest semi-annually in two equal installments beginning on February 13, 2024; and |

  117. Fiscal 2023 Outstanding Equity Awards at Fiscal Year-End Table

    | • | 1,390 shares vested on August 12, 2023, and 11,120 shares will vest semi-annually in four equal installments beginning on February 12, 2024. |

  118. Fiscal 2023 Option Exercises and Stock Vested Table

    Fiscal 2023 Option Exercises and Stock Vested Table The following table provides information about the value realized by our NEOs as a result of the vesting of RSAs during the fiscal year ended June 30, 2023. None of our NEOs exercised any stock options during the fiscal year ended June 30, 2023.

  119. Fiscal 2023 Option Exercises and Stock Vested Table

    | | Stock Awards | | | Name | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting(1) ($) | | James J. Rhyu | 79,826 | 3,179,256 | | Nathaniel A. Davis | 346,025 | 12,867,409 | | Donna Blackman | 11,452 | 430,055 | | Vincent W. Mathis | 20,445 | 809,080 | | Les Ottolenghi | 18,540 | 685,016 |

  120. Fiscal 2023 Option Exercises and Stock Vested Table

    | (1) Represents the value of vested shares calculated by multiplying (i) the gross number of shares acquired on vesting by (ii) the closing market price of our Common Stock on the date of vesting. |

  121. Fiscal 2023 Non-Qualified Deferred Compensation Table

    Fiscal 2023 Non-Qualified Deferred Compensation Table The following table sets forth certain information with respect to amounts deferred by the NEOs during the fiscal year ended June 30, 2023, under our Deferred Compensation Plan, which is discussed in more detail in the Compensation Discussion and Analysis above.

  122. Fiscal 2023 Non-Qualified Deferred Compensation Table

    | Name | Executive Contributions in Last Fiscal Year ($)(1) | Company Contributions in Last Fiscal Year ($) | Aggregate Earnings / (Losses) in Last Fiscal Year ($) | Aggregate Withdrawals / Distributions ($) | Aggregate Balance at Last FYE ($) | | James J. Rhyu | 268,276 | — | 147,554 | (46,743) | 1,247,115 | | Nathaniel A. Davis | — | — | — | — | — | | Donna Blackman | 157,826 | — | 8,834 | — | 187,294 | | Vincent W. Mathis | — | — | 8,689 | — | 221,102 | | Les Ottolenghi | — | — | — | — | — |

  123. Fiscal 2023 Non-Qualified Deferred Compensation Table

    | (1) All contributions have been previously reported within the Summary Compensation Table. |

  124. Potential Payments upon Termination or Change in Control

    Potential Payments upon Termination or Change in Control We have entered into an employment agreement with Mr. Rhyu (that was most recently amended and restated by an amended and restated employment letter dated February 25, 2022) that provides for severance payments and benefits upon certain terminations of employment, including enhanced benefits following a change in control of the Company. Our remaining NEOs (other than Mr. Davis) are also entitled to certain payments and benefits upon certain terminations of employment, including enhanced benefits following a change in control of the Company. The terms and conditions of such payments and benefits, and the circumstances in which they will be paid or provided to our NEOs (other than Mr. Davis), are described in more detail below. In connection with Mr. Davis’ retirement as Executive Chair and as a member of the Board on September 30, 2022, and our election not to renew the term of his employment agreement, Mr. Davis’ outstanding time-based equity awards became fully vested as of the date of his retirement, pursuant to the terms of his employment agreement. Such benefits were contingent on Mr. Davis executing (and not revoking) a general release of claims in favor of the Company. Consistent with the terms of his employment agreement, Mr. Davis did not receive any cash severance payments or other severance benefits in connection with his retirement. The table below sets forth each of Mr. Davis’ unvested time-based equity awards that became fully vested upon his retirement on September 30, 2022 and the value of each award on such date. Such time-based equity awards were the only equity awards Mr. Davis held on the date of his retirement.

  125. Potential Payments upon Termination or Change in Control

    | Grant Date | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting(1) ($) | | 08/14/2020 | 14,535 | 599,278 | | 08/14/2020 | 13,114 | 540,690 |

  126. Potential Payments upon Termination or Change in Control

    | (1) Represents the value of vested shares calculated by multiplying (i) the gross number of shares acquired on vesting by (ii) the closing market price of our Common Stock on October 3, 2022. |

  127. CEO Pay Ratio

    CEO Pay Ratio As required by Item 402(u) of Regulation S-K, we are providing the following information regarding the relationship of the median of the annual total compensation of all our employees (except our CEO) and the annual total compensation of our CEO, Mr. Rhyu. We consider the pay ratio specified below to be a reasonable estimate, calculated in a manner intended to be consistent with Item 402(u) of Regulation S-K. There were no changes to our employee population or employee compensation arrangements from fiscal 2022 to fiscal 2023 that we reasonably believe would result in a significant change to our pay ratio disclosure. As the median employee identified for purposes of our fiscal 2022 disclosure is no longer with the Company, as permitted by Instruction 2 to Item 402(u) of Regulation S-K, we used another employee whose compensation was substantially similar to the original median employee, based on the compensation measure used to select the original median employee, as our median employee for fiscal 2023. We identified the median employee from among those employees who were employed by us on June 17, 2021, excluding our CEO, based on annual base salaries for fiscal 2021, which we believe is reasonably representative of our employees’ total compensation for the fiscal year. We included all employees, whether employed on a full-time, part-time or seasonal basis, which yielded a total employee population of 7,348. We did not make any cost-of-living or other adjustments to employee compensation. For the median employee, we calculated the annual total compensation for fiscal 2023 for such employee using the same methodology we used for our NEOs as set forth in the Fiscal 2023 Summary Compensation Table. For fiscal 2023, the annual total compensation for our median employee was $61,847, and the annual total compensation for our CEO was $9,737,733, resulting in a pay ratio of 157 to 1.

  128. Pay-Versus-Performance Table

    | Year | Summary Compensation Table Total for PEO 1(1) | Compensation Actually Paid to PEO 1(2) | Summary Compensation Table Total for PEO 2(1) | Compensation Actually Paid to PEO 2(2) | Average Summary Compensation Table Total for Non-PEO Named Executive Officers(3) | Average Compensation Actually Paid to Non-PEO Named Executive Officers(4) | Value of Initial Fixed $100 Investment Based On: | | Net Income(7) | Company- Selected Measure: Revenue(8) | | | | | | | | | Total Stockholder Return(5) | Peer Group Total Stockholder Return(6) | | | | (a) | (b1) | (c1) | (b2) | (c2) | (d) | (e) | (f) | (g) | (h) | (i) | | 2023 | $9,737,733 | $9,252,934 | N/A | N/A | $2,213,728 | $1,834,039 | $137 | $50 | $126,867,000 | $1,837,358,000 | | 2022 | $7,691,994 | $10,589,204 | N/A | N/A | $2,268,304 | $4,323,405 | $150 | $62 | $107,130,000 | $1,686,666,000 | | 2021 | $4,716,110 | $7,778,721 | $6,017,557 | $4,382,370 | $6,273,179 | $6,051,428 | $118 | $103 | $71,451,000 | $1,536,760,000 |

  129. Pay-Versus-Performance Table

    | (2) The Compensation Actually Paid to our PEOs reflects the following adjustments required by applicable SEC rules from total compensation reported in the Summary Compensation Table: |

  130. Pay-Versus-Performance Table

    | (4) The Compensation Actually Paid to our NEOs (excluding PEOs) on average reflects the following adjustments required by applicable SEC rules from total compensation reported in the Summary Compensation Table: |