DEF 14A of PubMatic, Inc.
Filed Apr 18, 2024 · FY20230001140361-24-020519
ELECTION OF DIRECTORS
ELECTION OF DIRECTORS
INFORMATION ABOUT THE BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
INFORMATION ABOUT THE BOARD OF DIRECTORS AND CORPORATE GOVERNANCE We are committed to good corporate governance practices. These practices provide an important framework within which our Board of Directors and management can pursue our strategic objectives for the benefit of our stockholders.
Our Board of Directors
Our Board of Directors Our Board of Directors is currently composed of the individuals identified in Proposal No. 1. Six of our directors are independent within the meaning of the listing standards of the Nasdaq Global Market (“Nasdaq”). At the Annual Meeting, eight directors will be elected, each to serve until the 2025 annual meeting of stockholders and until his or her successor has been elected and qualified or until his or her earlier death, resignation, or removal. The members of our Board of Directors and their ages as of March 31, 2024 are provided in the table below. Additional biographical information for each nominee is set forth in the text below the table.
Our Board of Directors
| Name | Age | Position | Director Since | | Rajeev K. Goel | 46 | Chief Executive Officer, Director | 2006 | | Amar K. Goel | 47 | Chief Innovation Officer, Chairman, Director | 2006 | | Susan Daimler* | 46 | Director | 2020 | | Shelagh Glaser* | 59 | Director | 2022 | | Anton Hanebrink* | 47 | Director | 2023 | | Ramon Jones* | 54 | Director | 2023 | | Nick Mehta* | 46 | Director | 2023 | | Jacob Shulman* | 53 | Director | 2022 |
Our Board of Directors
| * Denotes Independent Director |
Our Board of Directors
| Rajeev K. Goel Chief Executive Officer, Director | Rajeev K. Goel is one of our co-founders and has served as our Chief Executive Officer since December 2008. He also has served as a member of our Board of Directors since September 2006. He served as our General Manager from 2006 to 2008. Before co-founding our Company, Mr. Goel served in various technical and business roles, including as a product marketing director at SAP AG, a publicly traded multinational enterprise software company, from 2005 to 2007. Mr. Goel was a Principal at Diamond Management and Technology Consultants, Inc., an information technology strategy consulting firm, from 2001 to 2005, and a co-founder and Vice President of Technology of Chipshot.com, an online retailer of custom-built golf equipment, from 1996 to 2000. Mr. Goel holds a B.A. in Economics, Political Science, and Spanish from The Johns Hopkins University and an M.S. in Computer and Information Technology from the University of Pennsylvania. Our Board of Directors believes that Mr. Goel possesses specific attributes that qualify him to serve as a director, including the historical knowledge, operational expertise, and continuity that he brings to our Board of Directors as our co-founder and Chief Executive Officer. | | Amar K. Goel Chief Innovation Officer, Chairman, Director | Amar K. Goel is our founder and has served as a member of our Board of Directors and Chairman since 2006. He has served as our Chief Innovation Officer since February 2021, and previously supported us in various roles since our founding. He currently works for the Company on a part-time basis. Since March 2021, Mr. Goel has served on the board of directors of Kredivo Holdings, a fintech |
Our Board of Directors
| | company focused on Southeast Asia. Since May 2021, Mr. Goel has also served as a co-founder and CEO of Bito Inc., a company focused on developer collaboration tools. Mr. Goel served as our Chief Executive Officer from 2006 to 2008. He served as Chairman of the board of directors of RevX, Inc., an Asia-focused mobile advertising company, from 2015 to 2018. Previously, he was the founder of Komli Media, Inc., an Asia-focused digital media platform company that was spun out of our Company, where he served as Chairman of the board of directors from 2008 to 2015 and Chief Executive Officer from 2006 to 2011 and again from December 2013 to September 2015. Mr. Goel also served in various sales roles at Microsoft Corporation, a software, services, and hardware company, from 2003 to 2006, and as a consultant at McKinsey & Co., a global management consulting firm, from 2000 to 2003. He was the co-founder, President, and Chief Executive Officer of Chipshot.com, an online retailer of custom-built golf equipment, from 1995 to 2000. Mr. Goel holds an A.B. in Economics and an M.S. in Computer Science from Harvard University. Our Board of Directors believes that Mr. Goel possesses specific attributes that qualify him to serve as a director, including the perspective and experience he brings as our founder and his operational expertise and experience with software and digital advertising. | | Susan Daimler Independent President, Zillow Group, Inc. PubMatic Committees: Compensation Committee Nominating and Corporate Governance Committee | Susan Daimler has served as a member of our Board of Directors since November 2020. Ms. Daimler currently serves as President of Zillow Group, Inc., a publicly traded real estate technology company, leading the Premier Agent, Zillow Home Loans, New Construction, and StreetEasy businesses as well as Zillow’s communications function. Ms. Daimler joined Zillow in October 2012 after its acquisition of Buyfolio, Inc., a co-shopping platform for real estate agents and home buyers, which she co-founded in 2009. Prior to Buyfolio, Ms. Daimler also co-founded the travel website SeatGuru, which was acquired by Expedia Group Inc. in 2007. She currently serves on the Board of Trustees at The Johns Hopkins University and previously served as the chairperson of the school’s Advisory Board to the Dean of Arts & Sciences. She earned a Bachelor of Arts in English from Johns Hopkins University. Our Board of Directors believes that Ms. Daimler possesses specific attributes that qualify her to serve as a director, including her extensive business operating experience. | | Shelagh Glaser Independent Chief Financial Officer, Synopsys, Inc. PubMatic Committees: Audit Committee | Shelagh Glaser has served as a member of our Board of Directors since June 2022. Ms. Glaser currently serves as the Chief Financial Officer of Synopsys Inc., an electronic design automation company, since December 2022. She previously served as the Chief Financial Officer of Zendesk, Inc., a software-as-a-service company, from May 2021 to December 2022. Prior to that, Ms. Glaser served in senior finance roles at Intel Corporation, a multinational technology company, including serving as its Corporate Vice President and Chief Financial Officer and Chief Operating Officer for the Data Platform Group from July 2019 to May 2021, and serving as its |
Our Board of Directors
| | Corporate Vice President and Chief Financial Officer and other senior roles at Client Computing Group from December 2013 to July 2019. Ms. Glaser holds a Bachelor of Arts in Economics from the University of Michigan and a Master’s in Business Administration from Carnegie Mellon University. Our Board of Directors believes that Ms. Glaser possesses specific attributes that qualify her to serve as a director, including her qualification as an “audit committee financial expert” as defined by SEC Rules, and her experience in leadership finance roles with other companies. | | Anton Hanebrink Independent Executive Vice President, Chief Corporate Strategy & Development Officer, Intuit Inc. PubMatic Committees: Audit Committee | Anton Hanebrink has served as a member of our Board of Directors since August 2023. Mr. Hanebrink has served as the Executive Vice President, Chief Corporate Strategy & Development Officer of Intuit Inc., a software-as-a-service company, since November 2016. Prior to Intuit, Mr. Hanebrink served in senior corporate strategy and development roles at Square, Inc., a financial services and mobile payment technology company, including serving as its Head of Corporate Development from October 2014 to November 2016, and Intuit, serving as Intuit’s Vice President of Corporate Strategy & Development from January 2011 to October 2014. Mr. Hanebrink holds a Bachelor of Science in Business Administration, Finance and Marketing, from Washington University and a Master’s in Business Administration from the Wharton School at the University of Pennsylvania. Our Board of Directors believes that Mr. Hanebrink possesses specific attributes that qualify him to serve as a director, including his qualification as an “audit committee financial expert” as defined by SEC Rules, and his experience in leadership in strategy and corporate development roles with other companies. | | Ramon Jones Independent Chief Marketing Officer, Nationwide Mutual Insurance Company PubMatic Committees: Nominating and Corporate Governance Committee | Ramon Jones has served as a member of our Board of Directors since December 2023. Mr. Jones currently serves as the Executive Vice President and Chief Marketing Officer of Nationwide Insurance, an insurance and financial services provider, a position he has held since November 2019. Mr. Jones has been with Nationwide Insurance since 2000, and has held several leadership positions during that time, including Senior Vice President, Marketing and Corporate Communication, from September 2016 to November 2019, and Regional Vice President, Western Regional Operations, from August 2012 to August 2016. Mr. Jones serves on the board of directors of the Columbus Regional Airport Authority and the Mount Carmel Foundation. Mr. Jones holds a Bachelor of Science in Finance from Villanova University and a Master’s in Business Administration from the Wharton School at the University of Pennsylvania. Our Board of Directors believes that Mr. Jones possesses specific attributes that qualify him to serve as a director, including his experience as a business executive leading the marketing function of a large company. |
Our Board of Directors
| Nick Mehta Independent Chief Executive Officer, Gainsight, Inc. PubMatic Committees: Compensation Committee | Nick Mehta has served as a member of our Board of Directors since August 2023. Mr. Mehta currently serves as the Chief Executive Officer of Gainsight, Inc., a software-as-a-service company, a position he has held since February 2013. He previously served in senior roles at Accel Partners, a venture capital firm, including serving as an Executive in Residence from May 2012 to February 2013, and LiveOffice, a software company, serving as its Chief Executive Officer prior to its acquisition by Symantec from May 2008 to May 2012. Mr. Mehta has served on the board of directors of F5 Networks, Inc. since January 2019, and Lead Edge Growth Opportunities, Ltd since March 2021. Mr. Mehta holds a Bachelor of Arts in Biochemistry and a Master of Science in Computer Science from Harvard University. Our Board of Directors believes that Mr. Mehta possesses specific attributes that qualify him to serve as a director, including his experience in the technology sector and as Chief Executive Officer of a technology company. | | Jacob Shulman Independent Chief Financial Officer, Tekion Corp. PubMatic Committees: Audit Committee | Jacob Shulman has served as a member of our Board of Directors since June 2022. Mr. Shulman currently serves as the Chief Financial Officer at Tekion Corp., a cloud-native automotive platform, which he joined in January 2024. He previously served as the Chief Financial Officer of JFrog Ltd., a software-as-a-service company, from May 2018 to December 2023, Chief Financial Officer of Mellanox Technologies, Ltd., a supplier of computer networking products, from November 2012 to May 2018, Vice President of Finance from March 2012 until November 2012 and Corporate Controller from June 2007 to March 2012. Mr. Shulman holds a Bachelor of Science in Economics and Accounting from Tel Aviv University and a Master of Business Administration from College of Management Academic Studies. Mr. Shulman has served as a member of the Board and as an Audit Committee Chair of Verbit Inc., a private company, since May 2021. Our Board of Directors believes that Mr. Shulman possesses specific attributes that qualify him to serve as a director, including his qualification as an “audit committee financial expert” as defined by SEC Rules, and his experience as leadership roles with other technology companies. |
Compensation Committee
| • | evaluating and providing input for non-employee director compensation arrangements for determination by the management team; |
Compensation Committee
| • | overseeing our compliance with regulatory requirements associated with the compensation of directors, officers, and employees. |
Considerations in Evaluating Director Nominees
Considerations in Evaluating Director Nominees Our Nominating and Corporate Governance Committee is responsible for identifying, considering and recommending candidates to the Board of Directors for board membership. A variety of methods are used to identify and evaluate director nominees, with the goal of maintaining and further developing a diverse, experienced and highly qualified Board of Directors. Candidates may come to our attention through current members of our Board of Directors, professional search firms, stockholders, or other persons. Our Nominating and Corporate Governance Committee will recommend to the Board of Directors for selection all nominees to be proposed by the Board of Directors for election by the stockholders, including approval or recommendation of a slate of director nominees to be proposed by the Board of Directors for election at each annual meeting of stockholders, and will recommend all director nominees to be appointed by the Board of Directors to fill interim director vacancies. During 2023, our Nominating and Corporate Governance Committee retained Russell Reynolds Associates to assist the Company in its search for new independent directors. During the year, Anton Hanebrink, Nick Mehta and Ramon Jones were identified by the Nominating and Corporate Governance Committee, with assistance for Russell Reynolds Associates, as candidates to serve as independent directors, and all were subsequently appointed to our Board of Directors during the course of 2023. Our Board of Directors encourages selection of directors who will contribute to the Company’s overall corporate goals. The Nominating and Corporate Governance Committee may from time to time review and recommend to the Board of Directors the desired qualifications, expertise and characteristics of directors, including such factors as business experience, diversity and personal skills in advertising, media and technology, finance, marketing, financial reporting and other areas that are expected to contribute to an effective Board of Directors. Exceptional candidates who do not meet all of these criteria may still be considered. In evaluating potential candidates for the Board of Directors, the Nominating and Corporate Governance Committee considers these factors in light of the specific needs of the Board of Directors at that time. In addition, under our Corporate Governance Guidelines, a director is expected to spend the time and effort necessary to properly discharge such director’s responsibilities. Accordingly, a director is expected to regularly attend meetings of the Board of Directors and committees on which such director sits, and to review prior to meetings material distributed in advance for such meetings. Thus, the number of other public company boards and other boards (or comparable governing bodies) on which a prospective nominee is a member, as well as his or her other professional responsibilities, will be considered. Also, under our Corporate Governance Guidelines, there are no limits on the number of terms that may be served by a director. However, in connection with evaluating recommendations for nomination for reelection, the Nominating and Corporate Governance Committee considers director tenure. We value diversity on a Company-wide basis but have not adopted a specific policy regarding Board diversity.
Non-Employee Director Compensation
Non-Employee Director Compensation Our Board of Directors has adopted a non-employee director compensation program which provides for the following compensation to non-employee directors: Annual Cash Compensation
Non-Employee Director Compensation
| (1) General Board Service Fee of $45,000 |
Non-Employee Director Compensation
| (2) Lead Independent Director Fee (in addition to General Board Service Fee, if a Lead Independent Director is appointed): $20,000 |
Non-Employee Director Compensation
| (3) Committee Chair Service Fee (in addition to General Board Service Fee; in lieu of Non-Chair Committee Member Service Fee set forth below): |
Non-Employee Director Compensation
| (a) Audit Committee chair: $20,000 |
Non-Employee Director Compensation
| (b) Compensation Committee chair: $15,000 |
Non-Employee Director Compensation
| (c) Nominating and Governance Committee chair: $7,000 |
Non-Employee Director Compensation
| (4) Non-Chair Committee Member Service Fee (in addition to General Board Service Fee; in lieu of Committee Chair Service Fee): |
Non-Employee Director Compensation
| (a) Audit Committee member: $10,000 |
Non-Employee Director Compensation
| (b) Compensation Committee member: $7,500 |
Non-Employee Director Compensation
| (c) Nominating and Governance Committee member: $3,500 |
Non-Employee Director Compensation
Each of the foregoing fees will be paid quarterly in arrears, in each case so long as the non-employee director continues to provide services in the applicable non-employee director capacity to us through such date and will be pro-rated (based on full calendar months served). Non-employee directors may elect to receive their cash fees in the form of deferred stock units. Any cash fees paid in the form of deferred stock units will settle on the earliest to occur of (i) the third anniversary of the annual stockholders meeting for the year in which such fees are payable, (ii) the date of a change of control, or (iii) the date of such non-employee director’s separation from service. Annual Equity Compensation Each non-employee director will be entitled to an annual equity award with an aggregate value of $175,000 (the “Annual Award”). The Annual Award will be payable in the form of restricted stock units and will vest on the earliest of (a) the date of the next annual meeting of our stockholders, (b) the date that is one year following the grant date, (c) the non-employee director’s death or disability, or (d) the date of a change in control. Non-employee directors may also elect to receive the Annual Award in the form of deferred stock units that settle on the earliest to occur of (i) the third anniversary of the grant date, (ii) the non-employee director’s death or disability, (iii) the date of a change of control, or (iv) the date of such non-employee director’s separation from service. Non-employee directors are also reimbursed for reasonable expenses incurred in serving as a director, including travel expenses for attending meetings of our Board of Directors. The following table sets forth the compensation earned by or paid to our non-employee directors for services provided during the fiscal year ended December 31, 2023. Employee directors receive no compensation for their service as directors.
Non-Employee Director Compensation
| Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1)(2)(3) | Option Awards ($) | Total ($) | | Cathleen Black | 46,550 | 175,000 | $— | 221,550 | | W. Eric Carlborg | — | 27,083 | $— | 27,083 | | Susan Daimler | 58,625 | 175,000 | $— | 233,625 | | Shelagh Glaser(4) | — | 235,832 | $— | 235,832 | | Anton Hanebrink | 18,288 | 131,850 | $— | 150,138 | | Ramon Jones | 3,031 | 72,917 | $— | 75,948 | | Nick Mehta | 17,456 | 131,850 | $— | 149,306 | | Jacob Shulman(5) | 55,000 | 175,000 | $— | 230,000 |
Non-Employee Director Compensation
| (1) The amounts reported in this column represent the aggregate grant date fair value of the stock awards granted to our directors during the year ended December 31, 2023, as computed in accordance with Financial Accounting Standards Board Accounting Standards Codification (FASB ASC) Topic 718. The amounts reported in this column reflect the accounting cost for these stock awards, and do not correspond to the actual economic value that may be received by our directors. |
Non-Employee Director Compensation
| (2) Equity awards for non-employee directors are payable in the form of restricted stock units (“RSU”), with each RSU being entitled to receive one share of our Class A common stock at the time of vesting for no consideration. |
Non-Employee Director Compensation
| (3) As of December 31, 2023, Ms. Daimler, Ms. Glaser, Mr. Hanebrink, Mr. Mehta, Mr. Jones, and Mr. Shulman held unvested RSUs covering 9,971, 9,971, 9,575, 9,575, 4,266 and 8,065 shares of our Class A common stock, respectively. None of our non-employee directors held stock options as of such date. |
Non-Employee Director Compensation
| (4) Ms. Glaser was awarded 3,466 RSUs in lieu of her annual cash compensation which vested on December 31, 2023, and 9,971 for her annual equity award. Ms. Glaser has deferred settlement of such RSUs until the earlier of (a) her death, (b) the date when she becomes disabled (as such term is defined in Section 409A of the Internal Revenue Code (the “Code”)), (c) the occurrence of a change in control (within the meaning of Section 409A of the Code), or (d) her separation from service from the Company (within the meaning of Section 409A of the Code). |
Non-Employee Director Compensation
| (5) Mr. Shulman was awarded 9,971 RSUs for his annual equity award. Mr. Shulman has deferred settlement of such RSUs until the earlier of (a) his death, (b) the date when he becomes disabled (as such term is defined in Section 409A of the Code), (c) the occurrence of a change in control (within the meaning of Section 409A of the Code), or (d) his separation from service from the Company (within the meaning of Section 409A of the Code). |
Executive Compensation Philosophy
| • | “At-risk” compensation focuses executives on achievement of short- and long-term goals. Our executive compensation program is primarily performance-based, rewarding short-term operating results through annual cash bonuses and long-term stockholder returns through equity awards that vest over four years. In 2023, a majority of the target amount of compensation (base salary, target annual cash incentives, and the target value of equity awards) of our CEO and other NEOs was variable (approximately 93% and 86%, respectively), based on financial or stock price performance. |
Executive Compensation Philosophy
| • | Short-term cash incentives are based on objective, measurable goals to drive the achievement of strong annual performance. Under the 2023 Executive Bonus Plan, which is applicable to all of our NEOs except Paulina Klimenko, and the 2023 Executive Bonus Plan for Paulina Klimenko ( (the “2023 Klimenko Bonus Plan” and, together with the 2023 Executive Bonus Plan, the “Bonus Plans”), our NEOs were eligible for target bonuses ranging from 65% to 100% of base salary that could be earned based entirely on achievement against semi-annual revenue and adjusted pre-tax net income goals. |
Executive Compensation Philosophy
| • | Equity awards comprise a majority of executive’s target compensation and align executives with the interests of stockholders. Long-term equity incentives were granted in the form of stock options and restricted stock units (“RSUs”), each subject to service-based vesting requirements. Stock options are inherently performance-based, as executives realize value only if there is stock price appreciation and such appreciation is maintained through the applicable exercise and sale dates, thereby ensuring alignment with stockholders. RSUs serve to retain and motivate executives during the vesting period, and to align executives’ interests with those of our stockholders. |
Positive Pay Practices
| What We Do | What We Don’t Do | | ✔ Grant compensation that is primarily at-risk and variable ✔ Subject short-term incentive compensation to measurable and rigorous financial goals ✔ Use an independent compensation consultant ✔ Provide a significant portion of our NEO’s compensation in equity compensation to align incentives with our shareholders ✔ Assess the risk-reward balance of our compensation programs to avoid excessive risk taking ✔ Maintain a Clawback Policy for our executive officers that requires recoupment of certain incentive-based compensation in the event we adjust or restate our financial statements ✔ Provide competitive compensation that is compared against an industry peer group | ✘ Reprice stock options ✘ Provide uncapped incentives ✘ Provide excessive perquisites ✘ Pay tax gross-ups on a change in control ✘ Guarantee annual increases in base salary or target bonus ✘ Provide “single trigger” change in control payments ✘ Provide excessive severance benefits ✘ Allow hedging or pledging of our stock by directors or employees |
Independent Consultant; Peer Group and Benchmarking
Independent Consultant; Peer Group and Benchmarking The Compensation Committee has the authority to directly retain the services of independent consultants and other experts to assist in fulfilling its responsibilities. The Compensation Committee has engaged Frederic W. Cook & Co., Inc. (“FW Cook”) to review our executive compensation programs and to assess the elements of our executive officers’ total compensation from a competitive standpoint. In 2023, the Compensation Committee assessed the independence of FW Cook pursuant to SEC rules and the corporate governance rules of the Nasdaq Global Market and concluded that no conflict of interest exists that would prevent FW Cook from independently advising the Compensation Committee. FW Cook assisted the Compensation Committee in defining a peer group of industry-relevant and similarly-sized companies, and in benchmarking our executive compensation program against the peer group. The peer group referenced by the Committee when setting 2023 target compensation for executives was developed considering a number of factors, including industry (primarily software companies) and scale and complexity (revenue, earnings and market capitalization), among other factors. The Compensation Committee approved the peer group, which was reviewed and updated during 2022: Appian, Domo, PagerDuty, and Paylocity were removed based on lack of compatibility for scale and complexity, and Cornerstone OnDemand and Switch were removed due to their acquisitions; InterDigital, Progress Software, and TechTarget were added to the group, which consisted of the following 14 companies.
Independent Consultant; Peer Group and Benchmarking
| Cerence | Momentive Global | Shutterstock | | Commvault Systems | Progress Software | Sprout Social | | InterDigital | Qualys | TechTarget | | LiveRamp | Rapid7 | Upland Software | | Magnite | Repay Holdings | |
Independent Consultant; Peer Group and Benchmarking
The peer company compensation disclosures and industry specific survey data are one reference point that the Compensation Committee uses to evaluate our executive compensation practices, including the target cash and equity compensation opportunities provided to our executives. While the Compensation Committee believes competitive data are a meaningful input for assessing compensation levels and practices, as discussed further below, a number of criteria are considered and there is no targeted benchmark level of compensation.
Annual Cash Incentive Bonuses
Annual Cash Incentive Bonuses For 2023, executives were eligible for bonuses under the Bonus Plans, which are formal incentive plans with pre-established goals and weightings, which were designed to reward achievements based upon corporate performance. All of our executives participated in the 2023 Executive Bonus Plan, other than Paulina Klimenko who was the only participant in the 2023 Klimenko Bonus Plan. All payments pursuant to the Bonus Plans are subject to continued employment in good standing through the payment date. The purpose of the Bonus Plans is to reward individuals that contribute to the Company’s success and to align our executives’ short-term compensation opportunity with the Company’s business objectives and performance expectations. For 2023, the Compensation Committee established target bonus opportunities for the NEOs which were expressed as a percentage of their respective base salaries. The table below shows the target annual cash bonus opportunity for each NEO as a percentage of his or her base salary and as a corresponding dollar amount:
Annual Cash Incentive Bonuses
| Name | 2023 Salary | 2023 Target Bonus (as % of Base Salary) | 2023 Target Bonus as a Dollar Amount | | Rajeev K. Goel | $610,000 | 100% | $610,000 | | Amar K. Goel | $285,000 | 72% | $205,000 | | Steven Pantelick | $506,000 | 70% | $354,000 | | Mukul Kumar | $274,000 | 65% | $178,000 | | Paulina Klimenko | $411,000 | 70% | $289,000 |
Annual Cash Incentive Bonuses
Per the Bonus Plans, each NEO was eligible to receive a cash bonus for each half of the fiscal year in the event we achieved certain financial goals, with earned bonuses paid after the end of the fiscal year. Annual bonus funding is determined via a two-step process:
Annual Cash Incentive Bonuses
| 1. | Baseline funding for the semi-annual period is determined using the square function of actual revenue achievement as a percent of the target goal (e.g., achievement of 110% of goal results in bonus funding of 110% x 110% = 121% of target payout). Threshold performance of 80% of goal is required before any bonuses fund. |
Annual Cash Incentive Bonuses
| 2. | The baseline funding for each semi-annual period is then increased or decreased based on adjusted pre-tax net income performance versus target. The ratio for the first half and second half of 2023 was $0.03 per dollar. Adjustments are allocated to individual bonuses on a pro-rata basis based on their target bonus amounts. |
Annual Cash Incentive Bonuses
Individual bonuses are capped at 250% of target, with actual payouts based on the funding formula described above. No bonus is paid if performance is below the threshold revenue level of 80% of target for each semi-annual period. The following table sets out the threshold amounts for each applicable performance metric (to the extent applicable) under the Bonus Plans, the target values, and the actual achievement for each half of calendar year 2023.
Annual Cash Incentive Bonuses
| Metric | First Half of 2023 | | | Second Half of 2023 | | | | | Threshold | Target | Actual | Threshold | Target | Actual | | Revenue | $86.4 | $108.0 | $118.7 | $113.6 | $142.0 | $148.3 | | Adjusted Pre-Tax Net Income (modifier) | — | $(5.6) | $2.4 | — | $30.6 | $40.2 | | Achievement (% Target) | | | 140.0% | | | 131.5% |
Annual Cash Incentive Bonuses
The Committee chose revenue and adjusted pre-tax net income as incentive criteria for the Bonus Plans because it views these to be the best measures of the Company’s performance in the short-term, with greater weighting on revenue due to the importance of continued growth. Adjusted pre-tax net income is defined as income before income taxes and excluding stock-based compensations costs. Adjusted Pre-Tax Net Income is a non-GAAP financial measure, a reconciliation of the differences to the most comparable GAAP financial measure is provided in “Appendix A-2-Reconciliation of Non-GAAP Measures”. The Compensation Committee set a revenue target of $108 million for the first half of 2023 and $142 million for the second half of 2023 (total annual target of $250 million) for the 2023 Executive Bonus Plan, which reflected a decrease of approximately 2.4% compared to fiscal year 2022 revenue of $256 million due to forecasted advertising market spend during 2023 and internal demand modeling. The Company achieved revenue of $267.0 million for the 2023 fiscal year, overperforming the annual target goal by 7% while at the same time increasing revenue from 2022 by 4%. The adjusted pre-tax net income target goal for the 2023 Executive Bonus Plan was $(5.6) million for the first half of 2023 and $30.6 million for the second half of 2023 (total annual target of $25.0 million). The Company achieved adjusted pre-tax net income of $42.7 million for the 2023 fiscal year, overperforming the annual target goal by 70.7%. Adjusted pre-tax net income in 2023 decreased from 2022 by 37%. The 2023 Klimenko Bonus Plan relied on the same revenue and adjusted pre-tax net income thresholds, target values and achievement results for the first half of calendar year 2023 as the 2023 Executive Bonus Plan. In the second half of 2023, the 2023 Klimenko Bonus Plan relied on the same pre-tax net income threshold, target value and achievement as the 2023 Executive Bonus Plan, but the revenue threshold, target value and achievement was based only on Company performance in the Americas, Europe, Middle East and Africa (EMEA), and Asia-Pacific (APAC) regions. Revenue achievement under the 2023 Klimenko Bonus Plan for the second half of 2023 was weighted 33% on revenue achievement in the Americas and weighted 67% on the combined revenue achievement in EMEA and APAC regions, taken together. Under the 2023 Klimenko Bonus Plan, the Company-wide revenue target remained $142.0 million, but specified that the revenue target for the Americas region during the second half of 2023 was $88.2 million and the revenue target for the combined EMEA and APAC regions was $53.8 million. Based on these results, the Compensation Committee determined that the bonus had been achieved and earned at 135% of target for the 2023 Executive Bonus Plan and 139% of target for the 2023 Klimenko Bonus Plan. For 2023, the Compensation Committee approved the following bonus payments to each of our NEOs in accordance with the established formulas under the Bonus Plans. The table below reflects the calculated payouts for 2023.
Annual Cash Incentive Bonuses
| | 2023 Bonus Calculations | | | | | | Annual Base Salary ($) | Target Bonus as % of Base Salary | Payout as % of Target | Payout ($) | | Rajeev K. Goel | $610,000 | 100% | 135 % | $823,993 | | Amar K. Goel | $285,000 | 72% | 135% | $276,916 | | Steven Pantelick | $506,000 | 70% | 135% | $478,186 | | Mukul Kumar | $274,000 | 65% | 135% | $240,444 | | Paulina Klimenko | $411,000 | 70% | 139% | $402,109 |
Long-Term Equity Incentives
Long-Term Equity Incentives Our Compensation Committee administers our long-term incentive compensation program and approves grants of equity awards to each of our executive officers which, for 2023, were granted in the form of stock options and RSUs. Stock options align executives’ realizable compensation with the creation of stockholder value and serve as an effective long-term incentive vehicle to retain talent and incentivize performance. Executives only realize value from options if our stock price increases following the grant date. RSUs support retention and provide alignment with stockholders’ interests during the vesting term. The Compensation Committee considered several factors when determining the size, mix, and material terms of the 2023 equity awards, including peer group data and the CEO’s recommendations (other than with respect to himself). For 2023, our NEOs were able to elect whether they wanted 25% of their equity awards in stock options with the remaining 75% in time-based RSUs, 50% of their equity awards in stock options with the remaining 50% in time-based RSUs, or 75% of their equity award in stock options with the remaining 25% in time-based RSUs. The intended grant value is converted to a number of shares using a 20-trading day average closing price including the date of grant, to mitigate effects of daily stock price volatility. The following table sets forth the intended grant value and the number of shares of common stock subject to the stock options and RSUs granted to each NEO during calendar year 2023.
Long-Term Equity Incentives
| | 2023 Annual Grants | | | | | | | Target Grant Value ($) | Percentage of Award in Options | Options (number of shares) | Percentage of Award in RSUs | RSUs (number of shares) | | Rajeev K. Goel | $7,000,000 | 25% | 369,198 | 75% | 368,680 | | Amar K. Goel | $1,850,000 | 75% | 292,722 | 25% | 32,479 | | Steven Pantelick | $2,900,000 | 25% | 152,954 | 75% | 152,739 | | Mukul Kumar | $1,300,000 | 25% | 68,565 | 75% | 68,469 | | Paulina Klimenko | $2,000,000 | 25% | 105,485 | 75% | 105,337 |
Long-Term Equity Incentives
Stock options vest over four years, with 1/48th of the options vesting each month, and RSUs vest over four years, with 1/16th of the shares vesting each quarter (vesting in initial quarters may be slightly different based on the grant date).
Additional Policies and Benefits
Additional Policies and Benefits Equity Grant Policies. Executives’ stock options are granted with an exercise price equal to the fair market value of our common stock, calculated based on the closing price on the date of grant. Equity grants to executives currently are made pursuant to our 2020 Equity Incentive Plan. We do not coordinate the grant of equity awards to the timing of releases of material non-public information. Restrictions on Hedging or Pledging. Our Insider Trading Policy prohibits our directors and officers from placing securities into a margin account, engaging in short sales of our securities, or purchasing any other financial instruments (including prepaid variable forward contracts, equity swaps, collars and exchange funds) that are designed to hedge or offset any decrease in the market value of our securities held directly or indirectly, except in limited circumstances that are approved by our Compliance Officer. Directors and officers are also prohibited from pledging securities as collateral for loans, except in limited circumstances that are approved by our Compliance Officer. Post-employment Compensation. The NEOs are entitled to certain severance and change in control benefits, the terms of which are described below under “—Potential Payments upon Termination or Change of Control.” These severance and change in control benefits are an essential element of the overall executive compensation package, and assist the Company in recruiting and retaining talented individuals and aligning the executive’s interests with the best interests of our stockholders.
Non-qualified Deferred Compensation Plan
Non-qualified Deferred Compensation Plan We maintain a Non-Qualified Deferred Compensation Plan (the “NQDCP”), which provides that executives who meet minimum compensation requirements are eligible to defer up to 50% of their salaries and up to 100% of their annual cash incentive and long-term equity incentive awards. To be eligible to participate in the NQDCP, an executive must be a member of a “select group of management or highly compensated employees” within the meaning of Sections 201, 301 and 401 of the Employee Retirement Income Security Act of 1974, as amended, as determined by the administrator of the NQDCP. In 2023, all of our Named Executive Officers were eligible to participate in the NQDCP. We have agreed to credit the participants’ contributions with earnings that reflect the performance of certain independent investment funds. We do not guarantee above-market interest on account balances. Benefits under the NQDCP are unsecured and are general assets of PubMatic. Participants are generally eligible to receive payment of their vested benefit(s) at the end of their elected deferral period, in installments over an elected deferral period, or upon termination of their employment with PubMatic for any reason, or at such other date as may be necessary to comply with Section 409A of the Internal Revenue Code. On a termination of a participant’s service, the death or disability of a participant, an unforeseeable emergency with respect to a participant, or a change in control of the Company, all amounts deferred by the applicable participant pursuant to the NQDCP will be paid out in full, along with any relating earnings, on the terms and conditions set forth in the NQDCP. Deferrals authorized by an executive and the related earnings are always 100% vested. Clawback Policy. In accordance with SEC and Nasdaq requirements, the Compensation Committee adopted an executive compensation recovery policy regarding the adjustment or recovery of certain incentive awards or payments made to current or former executive officers in the event that we are required to prepare an accounting restatement due to material noncompliance with any financial reporting requirement under the securities laws. In general, the policy provides that, unless an exception applies, we will seek to recover compensation that is awarded to an executive officer based on the Company’s attainment of a financial metric during the three-year period prior to the fiscal year in which the restatement occurs, to the extent such compensation exceeds the amount that would have been awarded based on the restated financial results. Other Benefits. The Company provides certain additional benefits to executive officers that are generally available to all employees, including medical, dental, vision and life insurance coverage, as well as 401(k) matching contributions; however, the Compensation Committee in its discretion may revise, amend or add to these benefits.
Summary Compensation Table
Summary Compensation Table The following table sets forth information regarding the total compensation, for services rendered in all capacities, that was paid or awarded to or earned by our named executive officers during the fiscal years ended December 31, 2023, 2022 and 2021.
Summary Compensation Table
| Name and Principal Position | Year | Salary ($) | Bonus ($)(1) | Stock Awards(2) ($) | Option Awards(2) ($) | Non-Equity Incentive Plan Compensation ($) | Total ($) | | Rajeev K. Goel, Chief Executive Officer | 2023 | 610,000 | — | 5,651,864 | 3,185,555 | 823,993 | 10,271,412 | | | 2022 | 575,000 | — | 4,722,926 | 1,604,323 | 541,833 | 7,444,082 | | | 2021 | 550,000 | — | 1,677,569 | 5,006,460 | 1,375,000 | 8,609,029 | | Amar K. Goel, Chief Innovation Officer | 2023 | 285,000 | — | 497,903 | 2,525,696 | 276,916 | 3,585,515 | | | 2022 | 266,000 | — | 1,257,886 | 427,269 | 195,060 | 2,146,215 | | | 2021 | 270,000 | — | 639,061 | 1,907,235 | 440,000 | 3,256,296 | | Steven Pantelick, Chief Financial Officer | 2023 | 506,000 | 1,000 | 2,343,661 | 1,319,155 | 478,186 | 4,648,002 | | | 2022 | 482,000 | — | 2,125,322 | 722,411 | 317,561 | 3,647,294 | | | 2021 | 468,000 | — | 1,437,917 | 1,489,538 | 805,000 | 4,200,455 | | Mukul Kumar, President of Engineering(2) | 2023 | 252,407 | — | 1,051,802 | 591,600 | 240,444 | 2,136,253 | | | 2022 | 233,000 | — | 944,590 | 320,865 | 142,000 | 1,640,455 | | | 2021 | 230,567 | — | 671,020 | 667,525 | 348,303 | 1,917,415 | | Paulina Klimenko, Chief Growth Officer(3) | 2023 | 411,000 | 1,000 | 1,614,816 | 909,757 | 402,109 | 3,338,682 |
Summary Compensation Table
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Summary Compensation Table
| (1) Mr. Pantelick and Ms. Klimenko each received a $1,000 bonus during 2023 for their tenure at the Company. All full-time employees of the Company are eligible for tenure bonuses of $1,000 on their tenth anniversary of employment with the Company, and annually thereafter. |
Summary Compensation Table
| (2) The amounts reported in this column represent the aggregate grant date fair value of the restricted stock units or stock options, as |
Summary Compensation Table
applicable, awarded to the named executive officer during each respective fiscal year as determined in accordance with Financial Accounting Standard Board Accounting Standards Codification Topic 718 (ASC 718) and recorded as stock-based compensation in our financial statements. The assumptions used in calculating the dollar amounts recognized for financial statement reporting purposes of the awards reported in this column are set forth in Note 10 to our consolidated financial statements contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023. These dollar amounts reflect the accounting cost for these awards and do not necessarily correspond to the actual economic value of the awards.
Summary Compensation Table
| (2) Mr. Kumar resides in Pune, India. Certain elements of his compensation are paid in Indian rupees and are converted for comparison purposes to U.S. dollars based on the conversion rate as of December 31, 2023. |
Summary Compensation Table
| (3) Ms. Klimenko was not a named executive officer prior to 2023. |
Grants of Plan-Based Awards for 2023
Grants of Plan-Based Awards for 2023 From time to time, we grant equity awards in the form of stock options and restricted stock units to our named executive officers, which are generally subject to vesting based on each named executive officer’s continued service with us. The following table provides information about awards granted in 2023 to each of our NEOs.
Grants of Plan-Based Awards for 2023
| Name | Grant Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards Target ($)(1) | | All Other Stock Awards: Number of Shares of Stock or Units (#) | All Other Option Awards: Number of Securities Underlying Options (#) | Exercise or Base Price of Option Awards ($/Share) | Grant Date Fair Value of Stock Options and Awards ($)(2) | | | | Target | Maximum | | | | | | Rajeev K. Goel | N/A | 610,000 | 1,525,000 | — | — | — | — | | | 1/31/2023 | — | — | — | 369,198 | 15.33 | 3,185,555 | | | 1/31/2023 | — | — | 368,680 | — | — | 5,651,864 | | Amar K. Goel | N/A | 205,000 | 512,500 | — | — | — | — | | | 1/31/2023 | — | — | — | 292,722 | 15.33 | 2,525,696 | | | 1/31/2023 | — | — | 32,479 | — | — | 497,903 | | Steven Pantelick | N/A | 354,000 | 885,000 | — | — | — | — | | | 1/31/2023 | — | — | — | 152,954 | 15.33 | 1,319,155 | | | 1/31/2023 | — | — | 152,739 | — | — | 2,341,489 | | | 11/30/2023 | — | — | 130 | — | — | 2,172 | | Mukul Kumar | N/A | 178,000 | 445,000 | — | — | — | — | | | 1/31/2023 | — | — | — | 68,565 | 15.33 | 591,600 | | | 1/31/2023 | — | — | 68,469 | — | — | 1,049,630 | | | 11/30/2023 | — | — | 130 | — | — | 2,172 | | Paulina Klimenko | N/A | 289,000 | 722,500 | — | — | — | — | | | 1/31/2023 | — | — | — | 105,485 | 15.33 | 909,757 | | | 1/31/2023 | — | — | 105,337 | — | — | 1,614,816 |
Grants of Plan-Based Awards for 2023
| (1) Amount represents the potential target annual cash incentive award under our 2023 Executive Bonus Plan, or in the case of Paulina Klimenko, the 2023 Klimenko Bonus Plan. No threshold payouts were established, and accordingly, the sub-column “Threshold ($)” is not applicable and has not been presented. Additional information regarding the 2023 Executive Bonus Plan and 2023 Klimenko Bonus Plan is set forth in “Compensation Discussion and Analysis—Elements of Executive Compensation—Annual Cash Incentive Bonuses.” |
Grants of Plan-Based Awards for 2023
| (2) Amounts represent the aggregate grant date fair values of the equity awards calculated in accordance with ASC Topic 718. All equity awards were granted under 2020 Equity Incentive Plan. The aggregate grant date fair value for the RSUs was based on the fair value of our common stock on the date of grant, which was determined as the closing market price per share of our Class A common stock on the date of grant. The aggregate grant date fair value for the stock options was based on the Black-Scholes option valuation methodology. This calculation is performed for accounting purposes and reported in the table and does not necessarily reflect the value that may be realized by the executive with respect to the awards. For additional information, refer to Notes 2 and 10 to our audited consolidated financial statements included in our 2023 Annual Report. |
Outstanding Equity Awards at 2023 Fiscal Year-End
Outstanding Equity Awards at 2023 Fiscal Year-End The following table presents, for each of our named executive officers, information regarding outstanding equity awards held as of December 31, 2023.
Outstanding Equity Awards at 2023 Fiscal Year-End
| | | Option Awards | | | | | Stock Awards | | | Name (a) | Grant Date (b) | Number of Securities Underlying Unexercised Options Exercisable (#) (c) | Number of Securities Underlying Unexercised Options Unexercisable (#) (d) | Option Exercise Price ($) (e) | Option Expiration Date (f) | Vesting Commencement Date (g) | Number of Shares or Units of Stock That Have Not Vested (5)(7)(#) (h) | Market Value of Shares or Units of Stock That Have Not Vested (1)($) (i) | | Rajeev K. Goel(8) | 07/08/2016(2) | 1,168,442 | — | 1.11 | 07/07/2026 | 08/01/2016 | — | — | | | 05/02/2017(3)(4) | 240,574 | — | 2.15 | 05/01/2027 | 02/01/2017 | — | — | | | 03/14/2018(3)(4) | 350,000 | — | 3.89 | 03/13/2028 | 01/01/2018 | — | — | | | 05/21/2019(3)(4) | 250,000 | — | 2.97 | 05/20/2029 | 01/01/2019 | — | — | | | 07/29/2020(3)(4) | 587,500 | 12,500 | 2.16 | 07/28/2030 | 01/01/2020 | — | — | | | 01/29/2021(5)(6) | 182,755 | 67,881 | 36.25 | 01/28/2031 | 01/01/2021 | — | — | | | 02/04/2022(5)(6) | 55,904 | 60,766 | 26.27 | 02/02/2032 | 01/01/2022 | — | — | | | 01/31/2023(5)(6) | 84,608 | 284,590 | 15.33 | 01/31/2033 | 01/01/2023 | — | — | | | 01/29/2021(9) | — | — | — | — | — | 10,551 | 172,087 | | | 02/04/2022(10) | — | — | — | — | — | 101,128 | 1,649,398 | | | 01/31/2023(10) | — | — | — | — | — | 299,552 | 4,885,693 | | Amar K. Goel | 05/02/2017(2)(3) | 6,250 | — | 2.15 | 05/01/2027 | 02/01/2017 | — | — | | | 03/14/2018(2)(3) | 75,400 | — | 3.89 | 03/13/2028 | 01/01/2018 | — | — | | | 05/21/2019(2)(3) | 95,000 | — | 2.97 | 05/20/2029 | 01/01/2019 | — | — | | | 07/29/2020(2)(3) | 48,958 | 1,042 | 2.16 | 07/28/2030 | 01/01/2020 | — | — | | | 01/29/2021(5)(6) | 69,622 | 25,859 | 36.25 | 01/28/2031 | 01/01/2021 | — | — | | | 02/04/2022(5)(6) | 14,889 | 16,183 | 26.27 | 02/02/2032 | 01/01/2022 | — | — | | | 01/31/2023(5)(6) | 67,082 | 225,640 | 15.33 | 01/31/2033 | 01/01/2023 | — | — | | | 01/29/2021(9) | — | — | — | — | — | 4,019 | 65,550 | | | 02/04/2022(10) | — | — | — | — | — | 26,934 | 439,294 | | | 01/31/2023(10) | — | — | — | — | — | 26,389 | 430,405 | | Steven Pantelick | 03/14/2018(3)(4) | 148,626 | — | 3.89 | 03/13/2028 | 01/01/2018 | — | — | | | 05/21/2019(3)(4) | 128,125 | — | 2.97 | 05/20/2029 | 01/01/2019 | — | — | | | 07/29/2020(3)(4) | 195,832 | 4,167 | 2.16 | 07/28/2030 | 01/01/2020 | — | — | | | 01/29/2021(5)(6) | 52,216 | 19,394 | 36.25 | 01/28/2031 | 01/01/2021 | — | — | | | 2/04/2022(5)(6) | 25,157 | 27,344 | 26.27 | 02/02/2032 | 01/01/2022 | — | — | | | 01/31/2023(5)(6) | 35,052 | 117,902 | 15.33 | 01/31/2033 | 01/01/2023 | — | — | | | 01/29/2021(9) | — | — | — | — | — | 9,043 | 147,491 | | | 02/04/2022(10) | — | — | — | — | — | 45,508 | 742,235 | | | 01/31/2023(10) | — | — | — | — | — | 124,100 | 2,024,071 | | Mukul Kumar | 05/02/2017(2)(3) | 135,000 | — | 2.15 | 05/01/2027 | 02/01/2017 | — | — | | | 03/14/2018(2)(3) | 85,000 | — | 3.89 | 03/13/2028 | 01/01/2018 | — | — | | | 05/21/2019(2)(3) | 65,000 | — | 2.97 | 05/20/2029 | 01/01/2019 | — | — | | | 07/29/2020(2)(3) | 107,708 | 2,292 | 2.16 | 07/28/2030 | 01/01/2020 | — | — | | | 1/29/2021(5)(6) | 24,367 | 9,051 | 36.25 | 01/28/2031 | 01/01/2021 | — | — | | | 2/04/2022(5)(6) | 11,181 | 12,153 | 26.27 | 02/02/2032 | 01/01/2022 | — | — | | | 01/31/2023(5)(6) | 15,713 | 52,852 | 15.33 | 01/31/2033 | 01/01/2023 | — | — | | | 01/29/2021(9) | — | — | — | — | — | 4,220 | 68,828 | | | 02/04/2022(10) | — | — | — | — | — | 20,226 | 329,886 | | | 01/31/2023(10) | — | — | — | — | — | 55,631 | 907,342 | | Paulina Klimenko | 07/29/2020(2)(3) | 24,275 | 2,083 | 2.16 | 07/28/2030 | 01/01/2020 | — | — | | | 01/29/2021(5)(6) | 26,688 | 9,913 | 36.25 | 01/28/2031 | 01/01/2021 | — | — | | | 02/04/2022(5)(6) | 14,442 | 15,698 | 26.27 | 02/02/2032 | 01/01/2022 | — | — | | | 01/31/2023(5)(6) | 24,174 | 81,311 | 15.33 | 01/31/2033 | 01/01/2023 | — | — | | | 01/29/2021(9) | — | — | — | — | — | 4,622 | 75,385 | | | 02/04/2022(10) | — | — | — | — | — | 26,125 | 426,099 | | | 01/31/2023(10) | — | — | — | — | — | 85,586 | 1,395,908 |
Outstanding Equity Awards at 2023 Fiscal Year-End
| (1) Market value based upon the closing price of a share of our Class A common stock on December 31, 2023. The reported amount does not necessarily reflect the value that may be realized by the individual because the awards vest over a specified period of time from the date of grant contingent upon continued employment and the actual amount received upon sale of shares will depend upon the fair market value of the shares at the times they are sold. |
Outstanding Equity Awards at 2023 Fiscal Year-End
| (2) Granted under our 2006 Stock Option Plan. |
Outstanding Equity Awards at 2023 Fiscal Year-End
| (3) Granted under our 2017 Equity Incentive Plan. |
Outstanding Equity Awards at 2023 Fiscal Year-End
| (4) Of the total award, 1/48th of the shares of Class B common stock underlying the stock option vest monthly beginning on the one-month anniversary of the vesting commencement date, subject to the optionee’s continued service through the applicable vesting date. |
Outstanding Equity Awards at 2023 Fiscal Year-End
| (5) Granted under our 2020 Equity Incentive Plan. |
Outstanding Equity Awards at 2023 Fiscal Year-End
| (6) Of the total award, 1/48th of the shares of Class A common stock underlying the stock option vest monthly beginning on the one-month anniversary of the vesting commencement date, subject to the optionee’s continued service through the applicable vesting date. |
Outstanding Equity Awards at 2023 Fiscal Year-End
| (7) The awards reported in this column (h) reflect the unvested RSUs awarded to our NEO’s in fiscal 2023, fiscal 2022 and fiscal 2021 under the 2020 Equity Incentive Plan. |
Outstanding Equity Awards at 2023 Fiscal Year-End
| (8) Includes, with respect to Mr. Goel’s stock options granted on May 21, 2019, 38,381 shares of Class B common stock, which, if exercised, would remain subject to a right of repurchase. |
Outstanding Equity Awards at 2023 Fiscal Year-End
| (9) Of the total award, 1/8th of the total number of RSUs granted vested on June 30, 2021, and then 1/16th of the total number of RSUs granted vested on each quarterly anniversary thereafter, subject to the recipient’s continued service through the applicable vesting date. |
Outstanding Equity Awards at 2023 Fiscal Year-End
| (10) Of the total award, 1/16th of the total number of RSUs granted vested on April 1 of the grant year, and then 1/16th of the total number of RSUs granted vested on each quarterly anniversary thereafter, subject to the recipient’s continued service through the applicable vesting date. |
Option Exercises and Stock Vested Table for 2023
Option Exercises and Stock Vested Table for 2023 The following table sets forth information with respect to the NEOs concerning the exercise of stock options and vesting of stock awards during the year ended December 31, 2023.
Option Exercises and Stock Vested Table for 2023
| | Option Exercises | | Stock Awards | | | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($)(1) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(2) | | Rajeev K. Goel | 30,000 | 375,300 | 124,624(3) | 1,659,073 | | Amar K. Goel | — | — | 22,080 | 321,142 | | Steven Pantelick | — | — | 58,039 | 849,204 | | Mukul Kumar | — | — | 26,177 | 383,276 | | Paulina Klimenko | 50,996 | 689,686 | 35,984 | 526,406 |
Option Exercises and Stock Vested Table for 2023
| (1) Based upon the closing price of a share of our Class A common stock on the date of exercise, which ranged from $15.00 per share to $17.05 per share, less the exercise price of the associated stock option multiplied by the number of shares of our Class A common stock exercised. |
Option Exercises and Stock Vested Table for 2023
| (2) Based upon the closing price of a share of Class A common stock on the date of vesting, which ranged from $12.10 per share to $18.28 per share, multiplied by the number of shares of our Class A common stock that vested. |
Option Exercises and Stock Vested Table for 2023
| (3) In connection with Mr. Goel’s 2021 RSU award, Mr. Goel made a deferral election pursuant to which settlement of all RSUs has been deferred until January 29, 2026. 10,550 of the shares listed were deferred until January 29, 2026. The value of such deferred RSUs is not included in the “Value Realized on Vesting” column. |
Non-qualified Deferred Compensation - Fiscal 2023
Non-qualified Deferred Compensation - Fiscal 2023 None of our NEOs deferred any portion of their compensation as part of our Non-qualified Deferred Compensation Plan during 2023. No withdrawals or distributions were made from the NQDCP in fiscal 2023. For additional information about our NQDCP, see “—Additional Policies and Benefits—Non-qualified Deferred Compensation Plan” above.
Potential Payments Upon Termination or Change in Control Table
Potential Payments Upon Termination or Change in Control Table The table below summarizes the payments and benefits available to each NEO under various termination scenarios, assuming the separation from service was on December 31, 2023.
Potential Payments Upon Termination or Change in Control Table
| Name and Termination Scenario | Cash Severance ($)(1) | Bonus Amounts ($)(2) | Equity Awards ($) | Benefits ($)(3) | Total Payout ($) | | Rajeev K. Goel Qualifying Termination CIC Qualifying Termination | 915,000 | 610,000 | 4,487,174 | 38,806 | 6,050,980 | | | 915,000 | 1,525,000 | 7,162,951 | 46,568 | 9,649,519 | | Amar K. Goel Qualifying Termination CIC Qualifying Termination | 285,000 | 205,000 | — | 32,653 | 522,653 | | | 285,000 | 410,000 | 1,171,120 | 40,817 | 1,906,937 | | Steven Pantelick Qualifying Termination CIC Qualifying Termination | 506,000 | 354,000 | — | 32,766 | 892,766 | | | 506,000 | 708,000 | 3,088,305 | 40,958 | 4,343,263 | | Mukul Kumar Qualifying Termination CIC Qualifying Termination | 274,000 | 178,000 | — | — | 452,000 | | | 274,000 | 356,000 | 1,390,283 | — | 2,020,283 | | Paulina Klimenko Qualifying Termination CIC Qualifying Termination | 411,000 | 289,000 | — | — | 700,000 | | | 411,000 | 578,000 | 2,006,550 | — | 2,995,550 |
Potential Payments Upon Termination or Change in Control Table
| (1) The cash severance amount included in the table above is equal to 18 months base salary (in the case of Rajeev K. Goel) and 12 months base salary (in the case of the Tier 1 Participants). |
Potential Payments Upon Termination or Change in Control Table
| (2) The bonus amounts included in the table above for a qualifying termination are equal to a pro-rata bonus amount (which is equal to the NEO’s full target bonus amount for 2023); the bonus amount included in the table above for a CIC qualifying termination is equal to (x) 150% of the target bonus amount (for Rajeev K. Goel) and 100% of the target bonus amount (for all Tier 1 Participants) plus (y) a pro-rata bonus amount (which is equal to the NEO’s full target bonus amount for 2023). |
Potential Payments Upon Termination or Change in Control Table
| (3) Rajeev K. Goel is entitled to continued coverage under our health, dental and vision plans for 15 months following a qualifying termination and for 18 months following a CIC qualifying termination and the Tier 1 Participants are entitled to continued coverage for 12 months following a qualifying termination and 15 months following a CIC qualifying termination. Amount represents the estimated value of such continued coverage as of December 31, 2023, as based on actual 2023 premiums. |
CEO Pay Ratio Disclosure
CEO Pay Ratio Disclosure Pursuant to the Exchange Act, we are required to disclose the ratio of the total annual compensation of our CEO, Rajeev K. Goel to the median of the total annual compensation of all of our employees (excluding our CEO). Once the median employee was identified based on the methodology described below, we calculated the median employee’s annual total compensation in accordance with the requirements of the Summary Compensation Table. Our median employee’s annual total compensation for 2023 was $54,068. This figure reflects, in part, the global nature of our employee base: as of December 31, 2023, 658 of our 948 employees were located in countries outside of the United States. Our CEO’s annual total compensation for 2023 was $10,271,412 as reported in the 2023 Summary Compensation Table and which, as discussed above, reflects industry trends and executive compensation levels from our peer companies. Therefore, our CEO to median employee pay ratio was 190:1 for 2023. We believe this ratio is a reasonable estimate calculated in a manner consistent with SEC rules. In determining the ratio of the annual total compensation of our CEO to the median of the annual total compensation of all our employees (excluding the CEO), we selected December 31, 2023 as the determination date for identifying the median employee for purposes of this disclosure. We selected annual total direct compensation as our consistently applied compensation measure, which we calculated as cash compensation from base wages and actual bonuses. We believe total cash compensation for all employees is an appropriate measure because we do not distribute annual equity awards to all employees. Compensation was annualized for our employees who were hired in 2023 and for employees on an unpaid leave of absence in 2023. Compensation for international employees was converted to U.S. dollar equivalents using a year-end exchange rate and no cost of living adjustments were made. This information is being provided for compliance purposes. Neither the Compensation Committee nor management used the pay ratio measure in making compensation decisions.
Pay Versus Performance Disclosure
Pay Versus Performance Disclosure In accordance with Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, and Item 402(v) of Regulation S-K, we are providing the following disclosure regarding the relationship between executive compensation actually paid to our principal executive officer (“PEO”) and Non-PEO NEOs and certain Company financial performance for the fiscal years listed below. The Compensation Committee did not consider the pay versus performance disclosure in making its pay decision for any of the fiscal years shown. For further information concerning the Company pay-for-performance philosophy and how the Company aligns executive compensation with the Company’s performance, refer to “Executive Compensation – Compensation Discussion and Analysis.” The following table summarizes the executive compensation included in the summary compensation table for the Company’s PEO and the other NEOs, the executive compensation actually paid to the Company’s PEO and other NEO’s (as determined pursuant to SEC disclosure rules) and certain financial performance measures of the Company and its peer group for the fiscal years ended December 31, 2023, 2022, 2021, and 2020 (each a “Covered Year”).
Pay Versus Performance Disclosure
| Year(1) | Summary Compensation Table (“SCT”) Total for PEO(2) (a) | Compensation Actually Paid to PEO(3) | Average Summary Compensation Table Total for Non-PEO NEOs(2) (b) | Average Compensation Actually Paid to Non-PEO NEOs(3) | Value of Initial Fixed $100 Investment Based On(4) | | Net Income (in millions) | Revenue (in millions)(5) | | | | | | | Total Shareholder Return | Peer Group Total Shareholder Return | | | | 2023 | $10,271,412 | $13,184,909 | $3,427,113 | $4,310,070 | $55 | $140 | $9 | $267 | | 2022 | $7,444,082 | ($4,325,656) | $2,430,191 | ($610,944) | $43 | $86 | $29 | $256 | | 2021 | $8,609,029 | $13,606,543 | $3,012,452 | $4,317,545 | $116 | $137 | $57 | $227 | | 2020 | $3,747,014 | $20,493,522 | $1,205,744 | $5,994,094 | $100 | $100 | $27 | $149 |
Pay Versus Performance Disclosure
| (1) Rajeev Goel served as the Company’s principal executive officer (“PEO”) for the entirety of fiscal years 2020, 2021, 2022, and 2023. For fiscal year 2023, The Company’s non-PEO NEOs were Amar Goel, Steven Pantelick, Paulina Klimenko, and Mukul Kumar. Mukul Kumar was also a non-PEO NEO in fiscal years 2021 and 2022. The Company’s non-PEO NEOs for fiscal years 2020, 2021 and 2022 were Amar Goel, Steven Pantelick and Jeffrey Hirsch. |
Pay Versus Performance Disclosure
| (2) Amounts reported in these columns represent (i) the total compensation reported in the Summary Compensation Table for the applicable year for our PEO and (ii) the average of the total compensation reported in the Summary Compensation Table for the applicable year for our non-PEO NEOs. |
Pay Versus Performance Disclosure
| (3) Amounts reported in these columns represent (i) the compensation actually paid to the PEO, based on his total compensation reported in the Summary Compensation Table for the indicated fiscal years and adjusted as shown in the table below and (ii) the compensation actually paid to the PEO, based on his total compensation reported in the Summary Compensation Table for the indicated fiscal years and adjusted as shown in the table below. |
Pay Versus Performance Disclosure
| (4) The Peer Group Total Shareholder Return (“TSR”) set forth in this table is based on Nasdaq US Benchmark Software & Computer Services Total Return Index. The comparison assumes $100 was invested for the period starting December 8, 2020, the first day the Company’s common stock began trading on the Nasdaq, through the end of the listed year in the Company and in Nasdaq US Benchmark software & Computer Services Total Return Index, respectively. Historical stock performance is not necessarily indicative of future stock performance. |
Pay Versus Performance Disclosure
| (5) The Company’s Revenue is a key driver of the Company’s performance and stockholder value creation and Revenue achievement was one of two factors under our Bonus Plan for calendar year 2023 (the other being Adjusted Pre-Tax Net Income). |
Pay Versus Performance Disclosure
For each Covered Year, in determining the Compensation Actually Paid to our PEO and the average Compensation Actually Paid to our other NEOs, we deducted and added back the following amounts from the total amounts of compensation reported in columns (a) and (b) for each Covered Year. Note that the dollar amounts shown in this table do not reflect the actual amount of compensation earned by or paid to our PEO or other NEOs during the applicable years.
Pay Versus Performance Disclosure
| | 2023 | | 2022 | | 2021 | | 2020 | | | | PEO | Average Other NEOs | PEO | Average Other NEOs | PEO | Average Other NEOs | PEO | Average Other NEOs | | Total Compensation, as reported in the “Summary Compensation Table” for the indicated fiscal year | $10,271,412 | $3,427,113 | $7,444,082 | $2,430,191 | $8,609,029 | $3,012,452 | $3,747,014 | $1,205,744 | | Minus Aggregate grant date fair value of the stock awards and option awards granted during the indicated fiscal year. Amounts shown are the amounts reported in the Summary Compensation Table | ($8,837,419) | ($2,713,598) | ($6,327,249) | ($1,858,288) | ($6,684,029) | ($2,123,485) | ($2,283,273) | ($443,490) | | Plus : Fair Value at Fiscal Year End of Outstanding and Unvested Equity Awards Granted in the Fiscal Year | $7,929,753 | $2,466,850 | $2,368,591 | $695,582 | $4,202,667 | $1,328,745 | $12,002,384 | $2,333,800 | | Plus (Minus) Change in Fair Value of Outstanding and Unvested Equity Awards Granted in Prior Fiscal Years | $1,087,734 | $303,766 | $(5,425,582) | ($1,286,001) | $2,362,649 | $541,431 | $5,698,762 | $2,529,876 | | Plus Fair Value at Vesting of Equity Awards Granted and Vested in the Fiscal Year | $1,918,950 | $626,917 | $926,258 | $272,002 | $1,606,640 | $494,374 | $755,463 | $146,895 | | Plus (Minus) Change in Fair Value as of the Vesting Date of Equity Awards Granted in Prior Fiscal Years that Vested in the Fiscal Year | $814,479 | $199,022 | ($3,311,757) | ($864,430) | $3,509,587 | $1,064,028 | $573,173 | $221,269 | | Minus Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Fiscal Year | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | | Plus Value of Dividends or Other Earnings Paid on Unvested Awards not Otherwise Reflected in Fair Values | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | | Compensation Actually Paid | $13,184,909 | $4,310,070 | ($4,325,656) | ($610,944) | $13,606,543 | $4,317,545 | $20,493,522 | $5,994,094 |
Pay Versus Performance Disclosure
For purposes of the above adjustments, the fair value of equity awards on the applicable date were determined in accordance with FASB’s ASC Topic 718, using valuation methodologies that are generally consistent with those used to determine the grant-date fair value for accounting purposes. The table below contains ranges of assumptions used in the valuation of outstanding equity awards for the relevant fiscal year(s). For more information, please see the notes to our financial statements in our Annual Report on Form 10-K and the footnotes to the Summary Compensation Table of this proxy statement.
Pay Versus Performance Disclosure
| | Fiscal Year 2023 | | Stock Options | | | Expected Term (years) | 0.5 - 9.1 | | Strike Price | $2.16 - $36.25 | | Volatility | 45.8% - 85.5% | | Dividend Yield | 0% | | Risk-Free Interest Rate | 3.3% - 5.4% |
Pay Versus Performance Disclosure
“Compensation actually paid,” as required under SEC rules, reflects cash compensation actually paid as well as adjusted values to unvested and vested equity awards during the years shown in the table based on year-end stock prices, various accounting valuation assumptions, and projected performance modifiers but does not reflect actual amounts paid out for those awards which can only be determined upon the ultimate sale of the stock underlying such awards. “Compensation actually paid” generally fluctuates due to stock price achievement and varying levels of projected and actual achievement of performance goals. The Company generally seeks to incentivize long-term performance, and therefore does not specifically align the Company’s performance measures with compensation that is actually paid (as computed in accordance with Item 402(v) of Regulation S-K) for a particular year. For a discussion of how our Compensation Committee assessed “pay-for-performance” and how our executive compensation program is designed to link executive compensation with the achievement of our financial and strategic objectives as well as stockholder value creation each year, see “Compensation Discussion and Analysis” in this proxy statement. The charts below display the relationship between “compensation actually paid” to our PEO and other NEOs in each of fiscal years 2023, 2022, 2021, and 2020 and (1) total shareholder return for both our common stock and the Nasdaq US Benchmark software & Computer Services Total Return Index (2) our revenue, and (3) our net income.