DEF 14A of A10 Networks, Inc.
Filed Mar 27, 2024 · FY20230001140361-24-015636
Nominees for Director
Nominees for Director Dhrupad Trivedi joined A10 Networks, Inc. in December 2019 as president and chief executive officer. Mr. Trivedi was also appointed as a member of our board of directors in December 2019 and as Chairperson of the board in September 2020. From March 2013 to November 2019, Mr. Trivedi served as President, Network Solutions – Industrial IT/IOT and Cybersecurity at Belden Inc. (NYSE: BDC), a manufacturer of networking, connectivity, and cable products, where he also served as a corporate vice president from January 2010 to March 2013. Prior to this, he held multiple general management and corporate development roles at JDS Uniphase Corporation. Mr. Trivedi holds a Ph.D. in electrical engineering from the University of Massachusetts, Amherst, a master’s degree in electrical engineering from the University of Alabama and an MBA in finance from Duke University. Mr. Trivedi brings global leadership experience across multiple businesses and is passionate about driving leading technology businesses to win by creating value for customers. Tor R. Braham has served as a member of our board of directors since March 2018. He is currently also a director of Viavi Solutions Inc. (Nasdaq: VIAV), a network and service enablement and optical coatings company. Mr. Braham is also Of Counsel to the law firm of King, Holmes, Paterno and Soriano, LLP. He previously served as a member of the board of directors of Yahoo! Inc., a provider of web services from April 2016 to June 2017, Altaba, Inc., a publicly traded investment company from June 2017 to December 2021, NetApp, Inc. (Nasdaq: NTAP), a computer storage and data management company, from September 2013 to March 2016, Sigma Designs, Inc. (“Sigma”), an integrated circuit provider for the home entertainment market, from June 2014 to August 2016, Live Oak Acquisition Corp (NYSE: DNMR) from February 2020 to December 2020, and Live Oak Acquisition Corp II (NYSE: LOKB), from December 2020 to October 2021. Mr. Braham served as Managing Director and Global Head of Technology Mergers and Acquisitions for Deutsche Bank Securities Inc., an investment bank, from 2004 until November 2012. From 2000 to 2004, he served as Managing Director and Co-Head of West Coast U.S. Technology, Mergers and Acquisitions for Credit Suisse First Boston, an investment bank. Prior to that role, Mr. Braham served as an investment banker with Warburg Dillon Read LLC and as an attorney at Wilson Sonsini Goodrich & Rosati. Mr. Braham has specific attributes that qualify him to serve as a member of our board of directors, including his extensive financial experience and knowledge of the technology industry gained through his service as an investment banker and lawyer to technology companies, as well as his service on public and private company boards. Peter Y. Chung has served as a member of our board of directors since June 2013. Mr. Chung is a Managing Director and Chief Executive Officer of Summit Partners, L.P., where he has been employed since 1994. He is currently a director of MACOM Technology Solutions Holdings, Inc. (Nasdaq: MTSI) as well as several privately-held companies. Mr. Chung previously served as a member of the board of directors of Acacia Communications, Inc. Mr. Chung has an M.B.A. from the Stanford University Graduate School of Business and an A.B. in Economics from Harvard University. Mr. Chung has specific attributes that qualify him to serve as a member of our board of directors, including his experience in investment banking, private equity and venture capital investing and in the communications technology sector, as well as his prior service on public and private company boards. Eric Singer has served as a member of our board of directors since July 2019 and as our lead independent director since September 2021. Mr. Singer has served as the Chief Executive Officer of Immersion Corporation (Nasdaq: IMMR), a developer and licensor of touch feedback technology, since January 2023, as a member of their board of directors since March 2020, and as executive chairman since August 2020. Mr. Singer has served as a member of the board of directors of Universal Electronics (NASDAQ: UEIC) since December 2023. Mr. Singer was the founder and Managing Member of VIEX Capital Advisors, LLC, a securities investment firm from 2014 until December 2022. In addition to a long track record as a successful investor in technology companies, Mr. Singer has substantial experience serving on public boards, assisting them in creating and expanding shareholder value. Mr. Singer previously served on the boards of directors of Quantum Corporation (Nasdaq: QMCO), a video data storage and management company, Numerex Corp., a provider of managed machine-to-machine enterprise solutions enabling the Internet of Things, RhythmOne plc and YuMe, Inc., each a provider of brand video advertising software and audience data, Support.com, Inc., a provider of tech support and support center services, Meru Networks, Inc., a Wi-Fi network solutions company, PLX Technology, Inc., a PCI Express and ethernet semiconductor company, and Sigma, among other companies. Mr. Singer has a B.A. from Brandeis University. Mr. Singer has specific attributes that qualify him to serve as a member of our board of directors, including his extensive financial and operating experience and knowledge of the technology industry gained through his service on numerous public and private company boards. Dana Wolf has served as a member of our board of directors since June 2022. Ms. Wolf is currently the Chief Executive Officer / co-founder and member of the board of directors of YeshID, an identity and access management provider. From August 2017 to November 2021 she served as Senior Vice President of Product & Marketing at Fastly Inc. (NYSE: FSLV), a global edge cloud network provider. From August 2013 to August 2017, she was the Head of Product for the cloud security product lines at OpenDNS, Inc. (acquired by Cisco Systems, Inc. (Nasdaq: CSCO)), a company providing domain name system resolution services. Ms. Wolf has over 18 years of experience in the security space, holding both product and engineering leadership roles at both Rapid7 Inc. (Nasdaq: RPD), a cyber security analytics and automation services company, and RSA Security LLC, a computer and network security company with a focus on protecting and managing online identities and digital assets. Ms. Wolf holds a B.A. from Lawrence University in Mathematics, Computer Science and Theatre and an M.B.A. (High Tech) from Northeastern University. Ms. Wolf has specific attributes that qualify her to serve as a member of our board of directors, including her extensive experience in the cyber security industry and cloud-based businesses.
Compensation Committee
| • | evaluating director compensation and making recommendations to the board of directors regarding such compensation; |
Considerations in Evaluating Director Nominees
Considerations in Evaluating Director Nominees Our nominating and corporate governance committee uses a variety of methods for identifying and evaluating director nominees. In its evaluation of director candidates, our nominating and corporate governance committee will consider the current size and composition of our board of directors and the needs of our board of directors and the respective committees of our board of directors. Some of the qualifications that our nominating and corporate governance committee considers include, without limitation, issues of character, integrity, judgment, diversity (including, but not limited to, diversity of gender, ethnicity, race, international background and life experience), independence, area of expertise, corporate experience, length of service, potential conflicts of interest and other commitments. Nominees must also have the ability to offer advice and guidance to our Chief Executive Officer based on past experience in positions with a high degree of responsibility and be leaders in the companies or institutions with which they are affiliated. Director candidates must have sufficient time available in the judgment of our nominating and corporate governance committee to perform all board of director and committee responsibilities. Members of our board of directors are expected to prepare for, attend, and participate in all board of director and applicable committee meetings. Other than the foregoing, there are no stated minimum criteria for director nominees, although our nominating and corporate governance committee may also consider such other factors as it may deem, from time to time, are in our and our stockholders’ best interests. Although our board of directors does not maintain a specific policy with respect to board diversity, our board of directors believes that our board should be a diverse body, and our nominating and corporate governance committee considers a broad range of backgrounds and experiences. In making determinations regarding nominations of directors, our nominating and corporate governance committee takes into account the benefits of diverse viewpoints. Our nominating and corporate governance committee also considers these and other factors as it oversees the annual board of director and committee evaluations. After completing its review and evaluation of director candidates, our nominating and corporate governance committee recommends to our full board of directors the director nominees for selection. The Company is committed to diversity at all levels, including with our directors, and our nominating and corporate governance committee is committed to considering diversity, including gender diversity, in identifying future candidates for nomination to the board. Sixty percent of our directors self-identify as being from one or multiple diverse groups.
Director Compensation
Director Compensation
Director Compensation
Director Compensation The following table provides information regarding the total compensation that was paid by the Company to each of our non-employee directors in 2023. None of our non-employee directors were granted option awards in 2023.
Director Compensation
| Director | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1)(2) | Total ($) | | Tor R. Braham | 71,310 | 199,995 | 271,305 | | Peter Y. Chung | 70,143 | 199,995 | 270,138 | | Eric Singer | 82,143 | 199,995 | 282,138 | | Dana Wolf | 47,976 | 166,658 | 214,634 |
Director Compensation
| (1) The aggregate number of shares of our common stock subject to stock awards outstanding at December 31, 2023, for each non-employee director is as below. There were no outstanding stock options held by non-employee directors as of December 31, 2023: |
Director Compensation
| Name | Aggregate Number of Stock Awards Outstanding at December 31, 2023 (#) | | Tor R. Braham | 14,104 | | Peter Y. Chung | 14,104 | | Eric Singer | 14,104 | | Dana Wolf | 22,069 |
Director Compensation
| (2) The amount reported in the Stock Awards column is the aggregate grant date fair value of the stock award, computed in accordance with equity compensation provisions of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718. As required by the rules of the SEC, the amount shown excludes the impact of estimated forfeitures related to service-based vesting conditions. Note that the amount reported in this column does not correspond to the actual economic value that may be received by the director from the award. |
ELECTION OF DIRECTORS
ELECTION OF DIRECTORS Our board of directors is currently composed of five members. At the Annual Meeting, each of the five recommended nominees, if elected, will serve for a one-year term. Each director’s term continues until the election and qualification of his or her successor, or such director’s earlier death, resignation, or removal.
Financial Summary and Compensation Highlights
| • | Our 2023 fiscal year adjusted EBITDA margin was 28.3% of revenue, which did not meet the minimum threshold corporate performance goals under our 2023 Executive Cash Incentive Plan. As a result, no bonuses were earned based on the adjusted EBITDA portion of our corporate performance, which accounts for 50% of the payout under the 2023 Executive Cash Incentive Plan. |
Financial Summary and Compensation Highlights
| • | 87% of our CEO’s and 71% of our other current named executive officers’ 2023 long-term equity incentive awards were performance-based with rigorous performance goals and targets. |
Compensation Program Risk Assessment
| • | our executive compensation is periodically benchmarked by our independent compensation consultant to our peers; |
Compensation Program Risk Assessment
| • | annual cash incentives under the Executive Cash Incentive Plan are capped at 140% of target; |
Compensation Program Risk Assessment
| • | our Executive Cash Incentive Plan preserves discretion to permit our compensation committee to elect not to pay otherwise achieved bonus amounts for any reason; and |
Compensation Program Risk Assessment
| • | a meaningful component of compensation is equity grants with extended vesting periods designed to ensure that our executives value and focus on our long-term performance. |
2023 Executive Cash Incentive Plan
2023 Executive Cash Incentive Plan Our approach to annual incentive compensation supports our pay-for-performance philosophy and aligns individual payouts with the goals set forth in our annual operating plan. Under the Executive Cash Incentive Plan, executives are eligible for cash awards based on our attainment of performance goals established by the compensation committee as part of our annual operating and strategic planning process. Unless otherwise determined by our compensation committee, to earn an actual award a participant must be employed by the Company (or an affiliate of the Company) through the date the bonus is paid.
2023 Corporate Goals and Individual Performance Factors
2023 Corporate Goals and Individual Performance Factors The 2023 Executive Cash Incentive Plan is funded based upon corporate financial performance based on two objectives: Revenue and adjusted net earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”). Each performance objective has an established threshold, target and maximum performance objective which corresponds to payout levels of 60%, 100% and 140% of target incentives, respectively. Our 2023 financial goals are based on our operating plan approved by our board of directors whose intent was to reward participants for growing the business and increasing profitability at a faster pace than our peers. The achievement percentage for each corporate objective is subject to linear interpolation between established goals. Each participant’s calculated cash incentive award is then adjusted by an individual performance multiplier. In no event may the participant’s annual incentive opportunity exceed 140% of the target incentive opportunity. No payment will be made for achievement below the threshold performance levels.
2023 Corporate Goals and Individual Performance Factors
| | | 2023 Performance Objectives | | | | Performance Measures | Weighting | Threshold | Target | Maximum | | Revenue | 50% | $280.3M | 297M | $320M | | Adjusted EBITDA | 50% | $81M | $84M | $90M | | Potential Payout Level (as a % of Target) | | 60% | 100% | 140% |
2023 Long-Term Equity Incentive Compensation
2023 Long-Term Equity Incentive Compensation The compensation committee believes that a significant emphasis on performance-based restricted stock unit awards (“PSUs”) enhance the pay-for-performance aspect of the compensation program and also further align the interests of executive management with our stockholders. Accordingly, on February 21, 2023, the compensation committee approved equity awards for certain of our NEOs with 60% of the target award value consisting of PSUs, and 40% of the award value consisting of RSUs covering the following target number of shares of our common stock:
2023 Long-Term Equity Incentive Compensation
| | 2023 PSUs | 2023 RSUs | | Dhrupad Trivedi | 158,835 | 105,890 | | Brian Becker | 20,251 | 13,501 | | Scott Weber | 11,912 | 7,942 | | Matthew Bruening | 31,767 | 21,178 |
2023 PSU Awards
2023 PSU Awards One-half (1/2) of the shares of our common stock subject to the PSU award will become eligible to vest upon the achievement of each of the two distinct stock price targets as set forth below (the “Performance Milestones”) subject to continued service to the Company (the “Eligible Portion”). The Eligible Portion will vest in three installments, with the first one-half (1/2) of the Eligible Portion to vest within thirty (30) days of achievement of the respective Performance Milestone and an additional one-quarter (1/4) of the Eligible Portion to vest on each of the first and second anniversaries of achievement of the Performance Milestone, subject in each case to continued service on each such date. $17.50 Performance Milestone: One-half (1/2) of the shares of the Company’s common stock subject to the PSU award will become an Eligible Portion upon the achievement of $17.50 or greater 100-Day Volume Weighted Average Stock Price (“VWAP”) occurring in the period beginning on the date of grant of the PSU award and ending on the four (4) year anniversary of such date (the “Performance Period”). $19.00 Performance Milestone: One-half (1/2) of the shares of the Company’s common stock subject to the PSU award will become an Eligible Portion upon the achievement of $19.00 or greater VWAP during the Performance Period. On the date of grant of the PSU awards, the VWAP was $14.79. As of December 31, 2023, none of the PSU award Performance Milestones were met.
2023 RSU Awards
2023 RSU Awards The RSUs comprised the remaining 40% of the annual equity awards to each of the above-named executive officers and vest in three equal, annual installments with a first vest date of February 1, 2024, subject in each case to the NEO’s continued service through each vesting date.
2023 New Hire Awards
2023 New Hire Awards In September 2023, in connection with her joining the company, our compensation committee approved the grant to Ms. Thomas of time-based RSUs covering 25,840 shares of our common stock and PSUs covering 25,840 shares of our common stock. Ms. Thomas’ PSU award includes both performance-based vesting and service-based vesting and will become eligible to vest upon the achievement of the $17.50 or greater VWAP during the Performance Period (the “Thomas Performance Milestone”), as well as continued service to the Company. Upon achievement of the Thomas Performance Milestone, the vesting of the shares of the Company’s common stock subject to the PSU Award will occur in three equal installments, with the first one-third (1/3rd) of the shares of the Company’s common stock subject to the PSU Award to vest within thirty (30) days of achievement of the Thomas Performance Milestone and an additional one-third (1/3rd) to vest on each of the first and second anniversaries of achievement of the Thomas Performance Milestone, subject in each case to continued service on each such date. On the date of grant of the PSU award, the VWAP was $14.48. As of December 31, 2023, the Thomas Performance Milestone has not been met. Ms. Thomas’ RSU award is scheduled to vest in four equal, annual installments with a first vest date of September 5, 2024, subject in each case to Ms. Thomas’ continued service through each vesting date.
2024 Equity Awards
2024 Equity Awards On January 30, 2024, after considering current peer practice, the compensation committee approved equity awards for certain of our NEOs with 60% of the target award value consisting of PSUs, and 40% of the award value consisting of RSUs covering the following target number of shares of our common stock.
2024 Equity Awards
| | 2024 PSUs | 2024 RSUs | | Dhrupad Trivedi | 198,821 | 132,549 | | Brian Becker | 25,405 | 16,937 | | Karen Thomas | 6,627 | 4,419 | | Scott Weber | 14,580 | 9,720 |
2024 Equity Awards
The vesting and performance objectives of the 2024 PSUs and RSUs are substantially similar in nature to the 2023 awards, with different VWAP targets ($15.23 and $16.71) for the PSUs. The grant amounts and % of PSUs/RSUs reflects peer practice as recommended by our compensation consultant, Pearl Meyer. On the date of grant the 2024 Equity Awards, the VWAP was $13.61.
The Decision-Making Process
The Decision-Making Process The Role of the Compensation Committee. The compensation committee oversees the executive compensation program for our NEOs. The compensation committee is comprised of independent, non-employee members of the board of directors. The compensation committee works very closely with its independent consultant and management to examine the effectiveness of the Company’s executive compensation program throughout the year. The compensation committee makes all final compensation and equity award decisions regarding our NEOs, except for the CEO, whose compensation is determined by the independent members of the full board of directors, based upon recommendations of the compensation committee. The Role of Management. In order to decide how to compensate our executive officers, our compensation committee considers the recommendations of our CEO regarding compensation for the respective executive officers that report to him based on our results and each executive officer’s contribution toward these results and overall performance. Our CEO does not make recommendations as to his own compensation. The Role of the Independent Consultant. The compensation committee may choose to engage an independent compensation consultant to provide expertise on competitive pay practices, program design, and an objective assessment of any inherent risks of any programs. For pay decisions in 2023, the compensation committee retained the services of Pearl Meyer & Partners, LLC (“Pearl Meyer”) as its independent compensation consultant. Pearl Meyer was engaged to support the compensation committee’s efforts to review compensation and make recommendations for year-end and 2023 target levels of executive compensation. The compensation committee utilized similar methodology to determine 2024 target levels of executive compensation. The compensation committee determined that Pearl Meyer was independent during 2023. The Role of Competitive Market Data. Our compensation committee also decides how to compensate our executive officers, including our CEO, by considering competitive market data. For purposes of setting target compensation levels for 2023, we used information from Radford-AON to help us determine the appropriate level of overall target compensation for our executive officers. In making its determinations, the compensation committee reviewed information summarizing the compensation paid at peer group companies and more broad-based compensation surveys. The companies in the fiscal 2023 peer group were developed based on similarity in size and operations within the industries in which we operate and were as follows:
Fiscal 2023 Summary Compensation Table
Fiscal 2023 Summary Compensation Table The following table provides information regarding the compensation paid to, or earned by, our named executive officers (each, an “NEO” and together, the “NEOs”) for each of our fiscal years ended December 31, 2023, 2022 and 2021.
Fiscal 2023 Summary Compensation Table
| Name and Principal Position | Year | Salary ($) | Bonus $ | Stock Awards($)(1) | Non-Equity Incentive Plan Compensation ($) | All Other Compensation ($)(2) | Total ($) | | Dhrupad Trivedi Chief Executive Officer & President | 2023 | 672,917 | — | 3,896,752 | — | 7,451 | 4,577,120 | | | 2022 | 645,833 | — | 2,999,996 | 800,000 | 7,451 | 4,453,280 | | | 2021 | 591,667 | — | 1,699,993 | 840,000 | 3,590 | 3,135,250 | | Brian Becker Chief Financial Officer | 2023 | 319,167 | — | 496,829 | — | 6,311 | 822,307 | | | 2022 | 309,167 | — | 449,997 | 159,030 | 5,855 | 924,049 | | | 2021 | 297,917 | — | 399,998 | 210,000 | 3,963 | 911,878 | | Matthew Bruening Former Executive Vice President Worldwide Sales & Marketing | 2023 | 353,750 | — | 779,350 | — | 7,451 | 1,140,551 | | | 2022 | 338,333 | — | 749,999 | 426,360 | 7,451 | 1,522,143 | | | 2021 | 320,000 | 50,000 | 599,998 | 448,000 | 4,951 | 1,422,949 | | Karen Thomas(3) Executive Vice President Worldwide Sales & Marketing | 2023 | 130,303 | — | 752,784 | — | 1,687 | 884,774 | | Scott Weber General Counsel and Corporate Secretary | 2023 | 300,000 | — | 292,251 | — | 7,451 | 559,702 | | | 2022 | 160,227 | — | 402,243 | 65,439 | 3,328 | 631,237 |
Fiscal 2023 Summary Compensation Table
| (1) The amounts reported in the Stock Awards column represent the grant date fair value of the stock award as computed in accordance with FASB ASC Topic 718. As required by SEC rules, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions. Note that the amount reported in this column does not correspond to the actual economic value that may be received by the NEO from the award. The assumptions that we used to calculate these amounts are discussed in Note 8 to our audited financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023. There were no stock options granted to our NEOs in fiscal year 2023. |
Fiscal 2023 Summary Compensation Table
| (2) The amounts reported in this column represent life insurance premiums paid on behalf of the executive, 401(k) matching contributions and non-cash gifts. |
Fiscal 2023 Summary Compensation Table
| (3) Ms. Thomas was appointed as our Executive Vice President, Worldwide Sales and Marketing in September 2023. |
Grants of Plan-Based Awards in 2023
Grants of Plan-Based Awards in 2023 The following table shows information regarding cash incentive and equity awards granted to our NEOs during our fiscal year ended December 31, 2023.
Grants of Plan-Based Awards in 2023
| | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards | | | Estimated Future Payouts Under Equity Incentive Plan Awards | | | All Other Stock Awards: Number of Shares of Stock or Units (#)(4) | Grant Date Fair Value of Stock and Option Awards ($)(5) | | Name | Grant Date | Plan Name(1) | Threshold ($)(2) | Target ($)(2) | Maximum ($)(2) | Threshold (#)(3) | Target (#)(3) | Maximum (#)(3) | | | | Dhrupad Trivedi | 2/21/2023 | Bonus Plan | 435,000 | 725,000 | 945,000 | — | — | — | — | — | | | 2/21/2023 | 2014 EIP | — | — | — | 79,418 | 158,835 | 158,835 | — | 2,338,051 | | | 2/21/2023 | 2014 EIP | — | — | — | — | — | — | 105,890 | 1,558,701 | | Brian Becker | 2/21/2023 | Bonus Plan | 105,600 | 176,000 | 246,400 | — | — | — | — | — | | | 2/21/2023 | 2014 EIP | — | — | — | 10,126 | 20,251 | 20,251 | — | 298,095 | | | 2/21/2023 | 2014 EIP | — | — | — | — | — | — | 13,501 | 198,735 | | Matthew Bruening(6) | 2/21/2023 | Bonus Plan | 213,000 | 355,000 | 497,000 | — | — | — | — | — | | | 2/21/2023 | 2014 EIP | — | — | — | 15,884 | 31,767 | 31,767 | — | 467,610 | | | 2/21/2023 | 2014 EIP | — | — | — | — | — | — | 21,178 | 311,740 | | Karen Thomas | 9/7/2023 | Bonus Plan | 80,000 | 133,333 | 186,667 | — | — | — | — | — | | | 9/7/2023(7) | 2023 Plan | — | — | — | 24,840 | 24,840 | 24,840 | — | 361,422 | | | 9/21/2023(7) | 2023 Plan | — | — | — | 1,000 | 1,000 | 1,000 | — | 14,970 | | | 9/7/2023(8) | 2023 Plan | — | — | — | — | — | — | 24,840 | 361,422 | | | 9/21/2023(8) | 2023 Plan | — | — | — | — | — | — | 1,000 | 14,970 | | Scott Weber | 2/21/2023 | Bonus Plan | 72,000 | 120,000 | 168,000 | — | — | — | — | — | | | 2/21/2023 | 2014 EIP | — | — | — | 5,956 | 11,912 | 11,912 | — | 175,345 | | | 2/21/2023 | 2014 EIP | — | — | — | — | — | — | 7,942 | 116,906 |
Grants of Plan-Based Awards in 2023
| (1) Awards granted under the “Bonus Plan” represent cash incentives granted under our 2023 Executive Cash Incentive Plan. Awards granted under the “2014 Plan” represent awards granted under our 2014 Equity Incentive Plan. Awards granted under the “2023 Plan” represent awards granted under our 2023 Stock Incentive Plan. |
Grants of Plan-Based Awards in 2023
| (2) Our non-equity incentive plan awards, and how they were determined, are based on corporate performance; 50% revenue and 50% adjusted EBITDA, as discussed above in the “Compensation Discussion and Analysis.” The amounts listed in this table represent the threshold, target and maximum amounts that would have been earned under the 2023 Executive Cash Incentive Plan assuming each NEO met the minimum thresholds, the target and the maximum of both revenue and adjusted EBITDA portions of the bonus that was awarded to the individual for fiscal year 2023. The actual corporate performance portion earned for revenue or adjusted EBITDA is not dependent on achieving the minimum threshold levels for both revenue and adjusted EBITDA. |
Grants of Plan-Based Awards in 2023
| (3) With the exception of the awards granted to Ms. Thomas (see footnote (7) below), the amounts shown represent shares potentially issuable pursuant to performance-based restricted stock units (or PSUs) granted under our 2014 Equity Incentive Plan, as discussed above in the “Compensation Discussion and Analysis”. These awards have both performance-based vesting and service-based vesting. One-half (1/2) of the shares of our common stock subject to the PSU award will become eligible to vest (the “Eligible Portion”) upon the achievement of each of the two stock price targets as follows (the “Performance Milestones”): $17.50 and $19.00, as well as continued service to the Company. The service-based vesting of any Eligible Portion is scheduled to occur in three installments, with the first one-half (1/2) of the Eligible Portion to vest within thirty (30) days of achievement of the respective Performance Milestone and an additional one-fourth (1/4) to vest on each of the first and second anniversaries of achievement of the respective Performance Milestone, subject in each case to the NEO’s continued service on each such date. The stock price achievements will be determined based on the 100-Day Volume Weighted Average Stock Price, as reported by Bloomberg L.P. or such other source the plan administrator deems reliable, for each trading day occurring in the trailing, one hundred (100) calendar days ending with (and inclusive of) the date of achievement during the period beginning on the grant date of the PSU award and ending on the four (4) year anniversary of the grant date. In the event that we terminate the NEO’s employment without cause, excluding death or disability, or the NEO resigns for good reason at any time during the period beginning on the date that we enter into an agreement resulting in our change in control and ending on the date 12 months after the change in control, the Eligible Portion of the award will vest in full. |
Grants of Plan-Based Awards in 2023
| (4) With the exception of the awards granted to Ms. Thomas (see footnote (8) below), these restricted stock units (RSUs) are scheduled to vest in three equal annual installments on the first, second- and third-year anniversaries of February 1, 2023, subject in each case to the NEO's continued service to the Company through each applicable vesting date. In the event that we terminate the NEO’s employment without cause, excluding death or disability, or the NEO resigns for good reason at any time during the period beginning on the date that we enter into an agreement resulting in our change in control and ending on the date 12 months after the change in control, the award will accelerate vesting in full as provided under the terms of the NEO’s Change in Control and Severance Agreement or the terms of the specific award agreement related to such award. |
Grants of Plan-Based Awards in 2023
| (5) Amounts reported in this column represent the grant date fair value of RSU and PSU awards, calculated in accordance with FASB ASC Topic 718. |
Grants of Plan-Based Awards in 2023
| (6) Mr. Bruening resigned in December 2023 and forfeited all the non-equity incentive plan compensation under the 2023 Executive Cash Incentive Plan as well as his RSUs and PSUs granted in 2023. |
Grants of Plan-Based Awards in 2023
| (7) The amount shown represents shares potentially issuable pursuant to performance-based restricted stock units (or PSUs) granted under our 2023 Stock Incentive Plan, as discussed above in the “Compensation Discussion and Analysis”. This award has both performance-based vesting and service-based vesting. The shares of the Company’s common stock subject to the PSU award will become eligible to vest upon the achievement of the $17.50 stock price target (the “Thomas Performance Milestone”), as well as continued service to the Company. Upon achievement of the Thomas Performance Milestone, the shares of the Company’s common stock subject to the PSU award will vest in three equal installments, with the first one-third (1/3rd) of such shares of the Company’s common stock subject to the PSU award to vest within thirty (30) days of achievement of the Thomas Performance Milestone and an additional one-third (1/3rd) to vest on each of the first and second anniversaries of achievement of the Thomas Performance Milestone, subject in each case to the NEO’s continued service on each applicable vesting date. The stock price achievement will be determined based on the 100-Day Volume Weighted Average Stock Price, as reported by Bloomberg L.P. or such other source the plan administrator deems reliable, for each trading day occurring in the trailing, one hundred (100) calendar days ending with (and inclusive of) the date of achievement during the period beginning on the grant date of the PSU award and ending on the four (4) year anniversary of the grant date. In the event that we terminate the NEO’s employment without cause, excluding death or disability, or the NEO resigns for good reason at any time during the period beginning on the date that we enter into an agreement resulting in our change in control and ending on the date 12 months after the change in control, the portion of the award for which any milestone has been met will vest in full. |
Grants of Plan-Based Awards in 2023
| (8) These restricted stock units (RSUs) are scheduled to vest in four equal annual installments on the first, second, third, and fourth anniversaries of September 5, 2023, subject in each case to the NEO's continued service to the Company through each applicable vesting date. In the event that we terminate the NEO’s employment without cause, excluding death or disability, or the NEO resigns for good reason at any time during the period beginning on the date that we enter into an agreement resulting in our change in control and ending on the date 12 months after the change in control, the award will accelerate vesting in full as provided under the terms of the NEO’s Change in Control and Severance Agreement or the terms of the specific award agreement related to such award. |
Outstanding Equity Awards at 2023 Year-End
Outstanding Equity Awards at 2023 Year-End The following table sets forth information regarding outstanding stock options and stock awards held by our NEOs as of December 31, 2023. The closing price per share on the NYSE of our common stock as of December 29, 2023 (the last business day of 2023) was $13.17 per share, which was used as the value of our common stock in the calculations.
Outstanding Equity Awards at 2023 Year-End
| | | Stock Awards | | | | | Name | Grant Date(1) | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights that Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights that Have Not Vested ($) | | Dhrupad Trivedi | 12/12/2019(1)(2)(3) | 125,001 | 1,646,263 | — | — | | | 2/2/2021(1)(2)(4) | 16,966 | 223,442 | — | — | | | 1/25/2022(1)(2)(5) | 41,754 | 549,900 | — | — | | | 1/25/2022(1)(6) | 32,475 | 427,696 | 97,424 | 1,283,074 | | | 2/21/2023(1)(2)(7) | 105,890 | 1,394,571 | — | — | | | 2/21/2023(1)(8) | — | — | 158,835 | 2,091,857 | | Brian Becker | 7/20/2020(1)(9) | 812 | 10,694 | — | — | | | 2/2/2021(1)(2)(4) | 3992 | 52,575 | — | — | | | 1/25/2022(1)(2)(5) | 6,263 | 82,484 | — | — | | | 1/25/2022(1)(6) | 4,871 | 64,151 | 14,613 | 192,453 | | | 2/21/2023(1)(2)(7) | 13,501 | 177,808 | — | — | | | 2/21/2023(1)(8) | — | — | 20,251 | 266,706 | | Karen Thomas | 9/7/2023(2)(10)(11) | 24,840 | 327,143 | — | — | | | 9/7/2023(10)(12) | — | — | 24,840 | 327,143 | | | 9/21/2023(2)(10)(11) | 1,000 | 13,170 | — | — | | | 9/21/2023(10)(12) | — | — | 1,000 | 13,170 | | Scott Weber | 7/1/2022(1)(2)(13) | 11,190 | 147,372 | — | — | | | 7/1/2022(1)(14) | — | — | 14920 | 196,496 | | | 2/21/2023(1)(2)(7) | 7,942 | 104,596 | — | — | | | 2/21/2023(1)(8) | 11,912 | 156,881 | 11,912 | 156,881 |
Outstanding Equity Awards at 2023 Year-End
| (1) Each of the outstanding stock option awards, RSU awards and PSU awards was granted under our 2014 Equity Incentive Plan. |
Outstanding Equity Awards at 2023 Year-End
| (2) In the event that we terminate the NEO’s employment without cause, excluding death or disability, or the NEO resigns for good reason at any time during the period beginning on the date that we enter into an agreement resulting in our change in control and ending on the date 12 months after the change in control, the award will accelerate vesting in full as provided under the terms of the NEO’s Change in Control and Severance Agreement or the terms of the specific award agreement related to such award. |
Outstanding Equity Awards at 2023 Year-End
| (3) All three performance milestones of this PSU have been met, therefore, one third (1/3rd) of shares subject to the respective milestone is scheduled to vest in equal, annual installments over a three-year period commencing on the one-year anniversaries of January 28, 2021, March 12, 2021 and August 5, 2021, subject in each case to NEO remaining a service provider through the applicable vesting date. |
Outstanding Equity Awards at 2023 Year-End
| (4) One third (1/3) of the shares of our common stock subject to the RSU award is scheduled to vest in three successive, equal, yearly installments commencing on the one-year anniversary of February 2, 2021, subject in each case to NEO remaining a service provider through the applicable vesting date. |
Outstanding Equity Awards at 2023 Year-End
| (5) One third (1/3) of the shares of our common stock subject to the RSU award is scheduled to vest in three successive, equal, yearly installments commencing on the one-year anniversary of February 1, 2022, subject in each case to NEO remaining a service provider through the applicable vesting date. |
Outstanding Equity Awards at 2023 Year-End
| (6) The first of three performance milestones (the “$17.25 Performance Milestone”) of this PSU was met on January 23, 2023 and one third (1/3) of shares subject to the $17.25 Performance Milestone has vested and the remaining two-thirds (2/3rds) are scheduled to vest in equal, annual installments on the first and second anniversaries of the achievement of the $17.25 Performance Milestone, subject to continued service to the Company. The remaining two-thirds (2/3rds) of the shares of our common stock subject to the PSU award will become eligible to vest upon the achievement of the remaining stock price targets as follows (the “Performance Milestones”): $18.00 and $18.75, as well as continued service to the Company, with vesting of any portion for which the Performance Milestone is achieved to be scheduled to occur in three equal installments, with the first installment to vest within 30 days of the date of achievement of the Performance Milestone and the balance of the installments on the 1st and 2nd anniversaries of achievement of the corresponding Performance Milestone, subject in each case to NEO remaining a Service Provider through the applicable vesting date. The stock price achievement will be determined based on the average of the volume weighted average price (VWAP), as reported by Bloomberg L.P. or such other source the |
Outstanding Equity Awards at 2023 Year-End
Administrator deems reliable, for each trading day occurring in the trailing, one hundred (100) calendar days ending with (and inclusive of) the date of determination (the “100-Day Stock Price”) during the period beginning on the grant date of the PSU Award and ending on the four (4) year anniversary of the grant date (the “Performance Period”). In the event that we terminate the NEO’s employment without cause or the NEO resigns for good reason at any time during the period beginning on the date that we enter into an agreement resulting in our change in control and ending on the date 12 months after the change in control, the portion of the award for which any milestone has been met will vest in full.
Outstanding Equity Awards at 2023 Year-End
| (7) One third (1/3) of the shares of our common stock subject to the RSU award is scheduled to vest in three successive, equal, yearly installments commencing on the one-year anniversary of February 1, 2023, subject in each case to NEO remaining a Service Provider through the applicable vesting date. |
Outstanding Equity Awards at 2023 Year-End
| (8) One half (1/2) of the shares of our common stock subject to the PSU award will become eligible to vest upon the achievement of certain stock price targets as follows (the “Performance Milestones”): $17.50 and $19.00, as well as continued service to the Company, with vesting of any portion for which the Performance Milestone is achieved to be scheduled to occur in three installments, with the first fifty percent (50%) installment to vest within 30 days of the date of achievement of the Performance Milestone and the balance of the installments of twenty-five percent (25%) each, to vest on the 1st and 2nd anniversaries of achievement of the corresponding Performance Milestone, subject in each case to NEO remaining a Service Provider through the applicable vesting date. The stock price achievement will be determined based on the average of the 100-Day Stock Price during the Performance Period. In the event that we terminate the NEO’s employment without cause or the NEO resigns for good reason at any time during the period beginning on the date that we enter into an agreement resulting in our change in control and ending on the date 12 months after the change in control, the portion of the award for which any milestone has been met will vest in full. |
Outstanding Equity Awards at 2023 Year-End
| (9) One quarter (1/4th) of the shares of our common stock subject to the RSU award is scheduled to vest in four successive, equal, yearly installments commencing on the one-year anniversary of August 5, 2020, subject in each case subject to NEO remaining a service provider through the applicable vesting date. |
Outstanding Equity Awards at 2023 Year-End
| (10) Each of the outstanding RSU awards and performance-based restricted stock units (“PSU”) awards was granted under our 2023 Stock Incentive Plan. |
Outstanding Equity Awards at 2023 Year-End
| (11) One quarter (1/4) of the shares of our common stock subject to the RSU award is scheduled to vest in four successive, equal, yearly installments commencing on the one-year anniversary of September 5, 2023, subject in each case to NEO remaining a Service Provider through the applicable vesting date. |
Outstanding Equity Awards at 2023 Year-End
| (12) The shares of the Company’s common stock subject to the PSU award will become eligible to vest upon the achievement of the $17.50 stock price target (the “Thomas Performance Milestone”), as well as continued service to the Company. Upon achievement of the Thomas Performance Milestone, the shares of the Company’s common stock subject to the PSU award will vest in three equal installments, with the first one-third (1/3rd) of the shares of the Company’s common stock subject to the PSU award to vest within thirty (30) days of achievement of the Thomas Performance Milestone and an additional one-third (1/3rd) to vest on each of the first and second anniversaries of achievement of the Thomas Performance Milestone, subject in each case to the NEO’s continued service on each applicable vesting date. Achievement of the Thomas Performance Milestone will be determined based on the average of the 100-Day Stock Price during the Performance Period. In the event that we terminate the NEO’s employment without cause or the NEO resigns for good reason at any time during the period beginning on the date that we enter into an agreement resulting in our change in control and ending on the date 12 months after the change in control, the portion of the award for which any milestone has been met will vest in full. |
Outstanding Equity Awards at 2023 Year-End
| (13) One quarter (1/4) of the shares of our common stock subject to the RSU award is scheduled to vest in four successive, equal, yearly installments commencing on the one-year anniversary of July 5, 2022, subject in each case to NEO remaining a service provider through the applicable vesting date. |
Outstanding Equity Awards at 2023 Year-End
| (14) The shares of our common stock subject to the PSU award will become eligible to vest upon the achievement of the $18.00 stock price target (the “Weber Performance Milestone”), as well as continued service to the Company. Upon achievement of the Weber Performance Milestone, the shares of the Company’s common stock subject to the PSU award will vest in three installments, with the first fifty percent (50%) of the shares of the Company’s common stock subject to the PSU award to vest within thirty (30) days of achievement of the Weber Performance Milestone and an additional twenty-five percent (25%) to vest on each of the first and second anniversaries of achievement of the Weber Performance Milestone, subject in each case to the NEO’s continued service on each applicable vesting date. Achievement of the Weber Performance Milestone will be determined based on the average of the 100-Day Stock Price during the Performance Period. In the event that we terminate the NEO’s employment without cause or the NEO resigns for good reason at any time during the period beginning on the date that we enter into an agreement resulting in our change in control and ending on the date 12 months after the change in control, the portion of the award for which any milestone has been met will vest in full. |
Option Exercises and Stock Vested in 2023
Option Exercises and Stock Vested in 2023 The following table sets forth the number of shares of common stock acquired during 2023 by our NEOs upon the exercise of stock options and the vesting of stock awards and the value realized upon such exercise or vesting.
Option Exercises and Stock Vested in 2023
| Name | Option Awards— Number of Shares Acquired on Exercise (#) | Option Awards— Value Realized on Exercise ($)(1) | Stock Awards— Number of Shares Acquired on Vesting (#) | Stock Awards— Value Realized on Vesting ($)(2) | | Dhrupad Trivedi | — | — | 249,920 | 3,746,231 | | Brian Becker | — | — | 27,583 | 427,247 | | Karen Thomas | — | — | — | — | | Scott Weber | — | — | 3,730 | 52,742 | | Matthew Bruening | — | — | 68,825 | 1,044,457 |
Option Exercises and Stock Vested in 2023
| (1) The value realized upon exercise was determined by multiplying (i) the number of shares exercised by (ii) the difference between the exercise price per share and the closing price per share on the NYSE of our common stock on the day of exercise. |
Option Exercises and Stock Vested in 2023
| (2) The value realized upon vesting was determined by multiplying (i) the number of shares of our common stock acquired on vesting by (ii) the closing price per share on the NYSE of our common stock on the day of vesting. |
Pension Benefits & Nonqualified Deferred Compensation
Pension Benefits & Nonqualified Deferred Compensation We do not provide a pension plan for our employees, and none of our NEOs participated in a nonqualified deferred compensation plan during 2023.
Potential Payments Upon Termination or Change in Control
Potential Payments Upon Termination or Change in Control The following table provides an estimate of the payments and benefits that would be provided in the circumstances described above for each of the NEOs, assuming the triggering event took place on December 29, 2023 and based on the $13.17 closing price per share of our common stock on the NYSE on that date. A number of factors may affect the nature and amount of any potential payments or benefits, and as a result, the payments and benefits actually paid (if any) may be different. For example, a triggering event may occur on a date other than December 29, 2023, the price per share of our common stock on the date of the triggering event may be higher or lower than $13.17 or the assumptions relied upon in the estimate of potential payments and benefits below may not reflect the actual circumstances of the triggering event. Accordingly, there is no guarantee that a triggering event would produce the same or similar results as those estimated below.
CEO Pay Ratio
CEO Pay Ratio Presented below is the ratio of annual total compensation of our Chief Executive Officer to the annual total compensation of our median employee. The ratio is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K under the Exchange Act. SEC rules for identifying the median employee allow companies to apply various methodologies and assumptions and, as a result, the pay ratio reported by us may not be comparable to the pay ratio reported by other companies. As determined in accordance with SEC rules, the fiscal year 2023 annual total compensation was $4,577,120 for our Chief Executive Officer, as reported in the “Summary Compensation Table” above. We estimate that the fiscal year 2023 annual total compensation for the median of all employees, excluding our Chief Executive Officer, was $161,090. The resulting ratio of our Chief Executive Officer’s annual total compensation to that of the median of all employees, excluding our Chief Executive Officer, for fiscal year 2023 is 28.41 to 1. As permitted by SEC rules, to identify our median employee, we elected to use the annual total compensation of each employee for fiscal year 2023. For these purposes, annual total compensation included annual base salary or hourly wages, cash incentives, commissions, 401(k) company match, comparable cash elements of compensation in non-U.S. jurisdictions and grant date fair market value of equity compensation granted in fiscal year 2023. We utilized internal human resources records with all foreign currencies converted to U.S. dollars. With the exception of the 401(k) match, all amounts were annualized for permanent employees who did not work for the entire year. We identified the employee with the median compensation calculated as described above. We calculated annual total compensation for the median employee using the same methodology used to calculate the “Total” column of the “Summary Compensation Table.” We selected the median employee from among our global population of employees as of the end of fiscal year 2023. We did not exclude any employees whether pursuant to the de minimis exemption for foreign employees or any other permitted exclusion.
Pay versus Performance
Pay versus Performance Below are the tables and related footnotes for PVP:
Pay versus Performance
| | Dhrupad Trivedi | | Non-CEO NEOs | | Value of Initial Fixed $100 Investment Base On: | | | | | Year | Summary Compensation Table Total for CEO | Compensation Actually Paid to CEO(2) | Average Summary Compensation Table Total for Non-CEO NEOs(4) | Average Compensation Actually Paid to Non-CEO NEOs(3)(4) | The Company Total Shareholder Return | Peer Group Total Shareholder Return(1) | Net Income (millions) | 100-Day Volume Weighted Average Stock Price(5) | | 2023 | 4,577,120 | 2,500,784 | 861,834 | (729,343) | 98.25% | 108.06% | $40.0 | $12.40 | | 2022 | 4,453,280 | 4,364,958 | 944,728 | 482,296 | 146.05% | 21.81% | $46.9 | $16.73 | | 2021 | 3,135,250 | 7,250,200 | 1,121,976 | 1,943,908 | 142.08% | 105.92% | $94.9 | $15.07 | | 2020 | 1,003,890 | 3,421,078 | 963,386 | 438,341 | 43.52% | 74.45% | $17.8 | $7.74 |
Pay versus Performance
| (1) The Company’s peer group Total Shareholder Return is based on NYSE Technology Index, which is one of the indexes used for purposes of our 10-K performance graph. |
Pay versus Performance
| (2) The following represents the adjustments made to the Summary Compensation Table totals to derive the compensation actually paid to Mr. Trivedi in his role as CEO. Mr. Trivedi served as the CEO through the entire reporting period. |
Pay versus Performance
| Adjustments | 2023 | 2022 | 2021 | 2020 | | Amounts reported in “Stock Awards” column of Summary Compensation Table | 3,896,752 | 2,999,996 | 1,699,993 | — | | Fair value of outstanding and unvested stock awards that were granted in the current year: | 2,854,663 | 3,237,507 | 2,156,627 | — | | Change in fair value for stock awards outstanding and unvested at the end of the current year that were granted in a prior year: | (635,675) | 17,739 | 2,940,000 | 2,165,313 | | Fair value of stock awards granted and vested in the current year: | — | — | 553,941 | — | | Change in fair value for stock awards vested in the current year that were granted in a prior year: | (398,572) | (343,571) | 164,375 | 251,875 |
Pay versus Performance
| (3) The following represents the average adjustments made to the Summary Compensation Table totals for our non-CEO named executive officers to derive the average compensation actually paid for our non-CEO named executive officers. Note that the table below and the amount of average compensation actually paid for our non-CEO named executive officers for 2020 has been adjusted from last year’s disclosure to correct an inadvertent error. |
Pay versus Performance
| Adjustments | 2023 | 2022 | 2021 | 2020 | | Amounts reported in “Stock Awards” column of Summary Compensation Table | 1,430,284 | 475,557 | 499,998 | 519,585 | | Fair value of outstanding and unvested stock awards that were granted in the current year: | 293,936 | 419,947 | 634,307 | 408,087 | | Change in fair value for stock awards outstanding and unvested at the end of the current year that were granted in a prior year: | (53,083) | 1,649 | 520,860 | 147,107 | | Fair value of stock awards granted and vested in the current year | — | — | 162,920 | — | | Change in fair value for stock awards vested in the current year that were granted in a prior year: | (33,872) | (71,765) | 3,843 | 1,279 | | Fair value of stock awards forfeited in the current year that were granted in a prior year: | (367,872) | (336,707) | — | (561,933) |
Pay versus Performance
| (4) The named executive officers included in the non-CEO named executive average for each year are as follows: |
Pay versus Performance
| 2023 | Messrs. Becker, Bruening and Weber and Ms. Thomas. | | 2022 | Messrs. Becker, Bruening, Cochran, and Weber. | | 2021 | Messrs. Becker, Bruening, and Cochran. | | 2020 | Messrs. Becker, Bruening, Cochran, Reiss, and Constantino. |
Pay versus Performance
| (5) Represents 100-Day Volume Weighted Average Stock Price (“VWAP”) as of December 31 of each applicable year. The VWAP metric is used for purposes of determining achievement of our 2023 PSU awards, which are eligible to vest upon the achievement of two distinct VWAP targets during the performance period beginning on the date of grant of the 2023 PSU award and ending on the four (4) year anniversary of such date. |
Pay versus Performance
As discussed in the Compensation Discussion and Analysis, our 100-Day Volume Weighted Average Stock Price is a performance goal in our long-term equity incentive compensation plan, and adjusted EBITDA and revenue are performance goals in our 2023 Executive Cash Incentive Plan. Though TSR and net income are not directly tied to the performance-based compensation paid to the NEOs, the 100-Day Volume Weighted Average Stock Price and the revenue performance measures are components of TSR and net income and, as such, TSR and net income results indirectly impact the compensation actually paid to our NEOs. A comparison of our TSR and the TSR of the reported peer group shows that our TSR for 2023, 2022 and 2021 is displayed below. The following metrics represent the three most important financial performance measures used by the Company in setting NEO compensation for the most recent fiscal year:
Pay versus Performance
| 100-Day Volume Weighted Average Stock Price | | Revenue | | Adjusted EBITDA |