DEF 14A of Upwork, Inc, Apr 23, 2024

DEF 14A of Upwork, Inc

Filed Apr 23, 2024 · FY20230001140361-24-021188

Open on EDGAR

  1. Core Elements of 2023 Executive Compensation

    | Element | | Objectives | | Cash | Annual Base Salary | ● Attract and retain top talent through market-competitive salary levels that are commensurate with our executives’ roles, responsibilities, and expected contributions to our business | | Short-Term Incentives | Annual Performance Bonus | ● Incentivize achievement of annual business objectives and reward short-term performance ● Align compensation with business strategy through use of performance metric based on revenue growth, which was considered our most important financial objective for 2023 when compensation was set in February 2023 ● Hold executives accountable for personal performance with +/- 20% individual performance adjustment(1) | | Long-Term Incentives | Performance-based Performance Stock Units, which we refer to as PSUs | ● Align the economic interests of our executives with long-term interests of our stockholders ● Incentivize achievement of annual business objectives and reward long-term performance ● Motivate long-term sustainable value creation ● Promote retention of top talent ● Align compensation with business strategy through use of performance metric based on revenue growth, which was considered our most important financial objective for 2023 when PSUs were granted in February 2023 | | | Time-based Restricted Stock Units, which we refer to as RSUs | ● Align the economic interests of our executives with long-term interests of our stockholders ● Motivate long-term sustainable value creation ● Promote retention of top talent |

  2. Fall 2023 Stockholder Engagement

    Overall, our stockholders expressed support for our broad executive compensation philosophy, policies, and practices. However, we learned through this engagement that our stockholders were primarily concerned with the design and structure of our short- and long-term incentive compensation programs. Specifically, nearly all the stockholders with which we spoke who voted against our Say-on-Pay proposal in 2023 attributed their votes to the single, overlapping performance metric shared by our 2022 short- and long-term incentive programs and what they viewed as a short performance period for the PSU awards in our long-term incentive program.

  3. Fall 2023 Stockholder Engagement

    | Topic | | What We Heard | Actions Taken in Response | | Executive Compensation (2024 Program Changes) | Short-Term Incentive Compensation Program Design | ● Prefer differentiation in company performance metrics between short- and long-term incentive programs ● Support addition of profitability metric to short-term incentive program | ✓ Differentiated metrics between 2024 short-term and long-term incentive programs ○ Added adjusted EBITDA as performance metric (weighted 50%) for 2024, incentivizing single-year achievement of both revenue and profitability | | | Long-Term Incentive Compensation Program Design | ● Prefer multi-year performance period for PSU program ● Prefer differentiation in company performance metrics between short- and long-term incentive programs ● Support addition of profitability metric to long-term incentive program ● Support for 2023 increase in allocation of PSU awards in our long-term incentive program—to 50% in 2023 from 40% in 2022—for our non-CEO Named Executive Officers | ✓ Introduced multi-year performance goals for 2024 PSU awards, measuring performance at the end of years 2025 and 2026 rather than at the end of 2024 ✓ Differentiated metrics between 2024 short-term and long-term incentive programs ○ Added year-over-year revenue growth and adjusted EBITDA margin as performance metrics for 2024 PSU awards, incentivizing sustainable, multi-year growth | | | Dilution | ● Some expressed concern about dilution given recent stock performance | ✓ Refreshed equity grant approach by reducing equity receivership and award amounts | | Sustainability and Impact | Disclosures | ● Complimentary of strong disclosure in our proxy statement and Impact Report ● Enthusiasm about progress to date, including our use of the SASB Professional & Commercial Services and Software & IT Services industry standards, Task Force on Climate-related Financial Disclosures (TCFD) recommendations, and our disclosure of EEO-1 data | ✓ Continued to disclose detailed information on sustainability and impact initiatives, including in our fifth Impact Report published in April 2024 ✓ Disclosed the results of our 2022 pay equity audit | | Corporate Governance | Classified Board and Supermajority Voting Provisions | ● Generally understood the board of directors’ position on maintaining a classified structure at this time but would like us to continue assessing the feasibility of transitioning to annual voting for all directors as we mature as a public company ● Prefer removing the supermajority voting requirement for charter and bylaw amendments | ✓ Our board of directors expressed its commitment to evolving our corporate governance practices to ensure they are aligned with our maturity as a public company and the best interests of our stockholders |

  4. Benefits and Competitive Compensation

    Benefits and Competitive Compensation We strive to offer market-competitive compensation and benefits to attract and retain employees for the long term. We engage independent compensation consultants to benchmark our employee compensation with external sources to ensure fair and equitable pay practices. We provide total rewards that are designed to attract and retain world-class employees through a total compensation package that includes equity-based awards to align employee compensation with long-term stockholder interests. Knowing our employees have diverse needs and life priorities, we also provide comprehensive benefits and services to those eligible, which include core benefits such as medical, dental, vision, and disability insurance, in addition to benefits tailored to the specific needs of our employees, such as mental health, fertility, family back-up care, and adoption support. We offer a health savings account with company contributions, family and medical leave, flexible working schedules, paid holidays, and flexible vacation policies. We sponsor a 401(k) plan that includes a matching contribution, offer financial coaching through a third-party provider, and maintain an employee stock purchase plan that enables eligible employees to purchase shares of our stock at a discount through payroll deductions.

  5. Director Nominees

    Director Nominees Information about the nominees for election as directors at the Annual Meeting is set forth below as of March 31, 2024.

  6. Class III Director Nominees

    Class III Director Nominees

  7. Class III Director Nominees

    | Hayden Brown | | | | Biography President and Chief Executive Officer, Upwork Inc., since January 2020 Numerous product leadership roles, Upwork Inc., beginning in March 2014, including Senior Vice President, Product and Design, from 2016 to April 2019, and Chief Marketing and Product Officer, from April 2019 to December 2019 Director of Marketplace and numerous product leadership roles, oDesk Corporation, our predecessor, from 2011 to March 2014 Vice President of Corporate Development, LivePerson, Inc., an online messaging, marketing, and analytics company, from 2010 to 2011 Director of Corporate Strategy and M&A, Microsoft Corporation, a technology company, during 2010 Senior Strategy Manager, Microsoft Corporation, from 2007 to 2010 Business Analyst, McKinsey & Company, a global management consulting firm A.B, Politics, Princeton University Board Experience Upwork Inc., since December 2019 Qualifications Ms. Brown brings to our board of directors her extensive leadership experience, including as our President and Chief Executive Officer, and her institutional knowledge of our company, understanding of our company culture, and familiarity with developing and executing our strategic priorities. | | Age: 42 Director Since: December 2019 President and Chief Executive Officer, Upwork Inc. Upwork Board Committees: None Other Public Company Boards: None | |

  8. Class III Director Nominees

    | 24 | 2024 Proxy Statement | |

  9. Class III Director Nominees

    | Gregory C. Gretsch | INDEPENDENT | | | Biography Founding Partner and Managing Director, Jackson Square Ventures, a venture capital firm, since 2011 Managing Director, Sigma Partners, a venture capital firm, since 2001 B.B.A., Management Information Systems, University of Georgia Board Experience Upwork Inc., since March 2014 Member of boards of directors of several private companies oDesk Corporation, our predecessor, from 2004 to March 2014 Responsys, Inc., a marketing software company, from 2001 to 2014 Qualifications Mr. Gretsch brings to our board of directors his significant entrepreneurial, management, and leadership experience as a founder and former executive of several startup technology companies, and his background analyzing, investing in, and serving on the boards of directors of other technology companies. | | Age: 57 Director Since: March 2014 Founding Partner and Managing Director, Jackson Square Ventures Upwork Board Committees: Audit Compensation Other Public Company Boards: None | |

  10. Class III Director Nominees

    | Anilu Vazquez-Ubarri | INDEPENDENT | | | Biography Chief Operating Officer, TPG Inc., a global private investment firm, since September 2023 Partner, TPG Inc., since July 2019 Chief Human Resources Officer, TPG Inc., from 2018 to September 2023 Chief Diversity Officer and Global Head of Talent, The Goldman Sachs Group, Inc., a multinational bank and financial services company, from 2014 to 2018 Various roles, The Goldman Sachs Group, Inc., from 2007 to 2014 Associate in executive compensation and employee benefits group, Shearman & Sterling LLP, a global law firm J.D., Fordham University School of Law A.B., cum laude, History and Latin American Studies, Princeton University Board Experience Upwork Inc., since November 2020 TPG Inc., since August 2021 Greenhouse Software, Inc., a hiring software company TPG Pace Beneficial II Corp., a special purpose acquisition company, from March 2021 to December 2021 Qualifications Ms. Vazquez-Ubarri brings to our board of directors valuable knowledge of human resources and employment aspects of executive management, as well as operational and risk management experience from her roles at global investment entities. She also brings her experience handling talent and diversity issues directly for multinational organizations. | | Age: 47 Director Since: November 2020 Board Member, Partner, and Chief Operating Officer, TPG Inc. Upwork Board Committees: Compensation Other Public Company Boards: TPG Inc. | |

  11. Class III Director Nominees

    | | 2024 Proxy Statement | 25 |

  12. Continuing Directors

    Continuing Directors Information about our directors who are serving terms that end following the Annual Meeting is set forth below as of March 31, 2024.

  13. Class I Directors

    Class I Directors

  14. Class I Directors

    | Thomas Layton (Chair) | INDEPENDENT | | | Biography Chief Executive Officer, Metaweb Technologies, Inc., a data infrastructure company, from 2007 to 2010 Chief Executive Officer, OpenTable, Inc., an online restaurant reservation company, from 2001 to 2007 M.B.A., Stanford Graduate School of Business B.S., University of North Carolina at Chapel Hill Board Experience Chairperson of Upwork Inc., since March 2014 Member of boards of directors of several private companies oDesk Corporation, our predecessor, from 2006 to March 2014, including service as chairperson from 2011 to March 2014 Qualifications Mr. Layton brings to our board of directors extensive leadership experience, gained from his experience advising and managing technology companies. Moreover, he brings historical knowledge, operational expertise, and continuity to our board of directors. | | Age: 61 Director Since: March 2014 Former Chief Executive Officer, OpenTable, Inc. Upwork Board Committees: Nominating and Governance (Chair) Other Public Company Boards: None | |

  15. Class I Directors

    | Kevin Harvey | INDEPENDENT | | | Biography Founder and General Partner, Benchmark Capital, a venture capital firm, since 1995 B.S., Engineering, Rice University Board Experience Upwork Inc., since March 2014 Proofpoint, Inc., a cybersecurity company, from 2002 to August 2021 oDesk Corporation, our predecessor, from 2006 to March 2014 Qualifications Mr. Harvey brings to our board of directors his significant experience investing in and serving on the boards of directors of other technology companies, as well as his management and leadership experience as a founder and former executive of multiple startup technology companies. | | Age: 59 Director Since: March 2014 Founder and General Partner, Benchmark Capital Upwork Board Committees: Nominating and Governance Other Public Company Boards: None | |

  16. Class I Directors

    | 26 | 2024 Proxy Statement | |

  17. Class I Directors

    | Elizabeth Nelson | INDEPENDENT | | | Biography Executive Vice President and Chief Financial Officer, Macromedia, Inc., a software company, from 1996 to 2005 M.B.A., Finance, Wharton School at the University of Pennsylvania B.S., Foreign Service, Georgetown University NACD CERT Certificate in Cybersecurity Oversight Board Experience Upwork Inc., since February 2015 PhenomeX Inc., a functional cell biology company, from September 2019 to October 2023 Virgin Group Acquisition Corp. II, a special purpose acquisition company, from March 2021 to June 2022 Nokia Corporation, a telecommunications company, from 2012 to April 2021 Zendesk, Inc., a software development company, from 2013 to May 2019 Pandora Media, Inc., an audio entertainment company, from 2013 to 2017 Macromedia, Inc., during 2005 Qualifications Ms. Nelson brings to our board of directors her extensive experience in advising technology companies and a deep understanding of the financial, accounting, and operational aspects of executive management from her prior experience as an executive of numerous public and private technology companies. | | Age: 63 Director Since: February 2015 Former Executive Vice President and Chief Financial Officer, Macromedia, Inc. Upwork Board Committees: Audit (Chair) Nominating and Governance Other Public Company Boards: None | |

  18. Class II Directors

    Class II Directors

  19. Class II Directors

    | Leela Srinivasan | INDEPENDENT | | | Biography Chief Executive Officer, Parity, a sports marketing startup created for elite women athletes, brands, and fans to combat gender pay inequities in professional sports, since May 2023 Chief Marketing Officer, Checkout Ltd, a global payments provider also known as Checkout.com, from September 2021 to March 2023 Chief Marketing Officer, SurveyMonkey, an online agile experience management company, from April 2018 to September 2021 Chief Marketing Officer, Lever, Inc., a recruiting software company, from 2015 to 2018 Vice President of Marketing, OpenTable, Inc., an online restaurant reservation company, from 2014 to 2015 Marketing positions, LinkedIn Corporation, a professional networking company, from 2010 to 2014 Management consulting positions, Bain & Company, a global management consulting firm Sales positions, Business Wire, a Berkshire Hathaway company and press release distribution and regulatory disclosure company M.B.A., Tuck School of Business at Dartmouth M.A., History and English Literature, University of Edinburgh Board Experience Upwork Inc., since July 2019 Member of board of advisors, Tuck School of Business at Dartmouth Member of the board of directors, Empowered by Light, a nonprofit installing solar energy in communities without power around the world Qualifications Ms. Srinivasan brings to our board of directors her extensive leadership, executive, and business-to-business marketing experience gained across multiple organizations, including SurveyMonkey. Ms. Srinivasan’s experience spans multiple relevant aspects of marketing including product marketing, field marketing, online/digital marketing, corporate communications, global customer programs, advertising, campaigns, events, and corporate and employer branding. In her prior roles, she spent roughly a decade in HR technology. | | Age: 50 Director Since: July 2019 Chief Executive Officer, Parity Upwork Board Committees: Audit Other Public Company Boards: None | |

  20. Class II Directors

    | | 2024 Proxy Statement | 27 |

  21. Class II Directors

    | Gary Steele | INDEPENDENT | | | Biography Executive Vice President and General Manager of Splunk, Cisco Systems, Inc., a worldwide technology company, since March 2024 Chief Executive Officer, Splunk Inc., a data platform for security and observability, from April 2022 to March 2024 Chief Executive Officer, Proofpoint, Inc., a cybersecurity company, from 2002 to March 2022 Chief Executive Officer, Portera Systems Inc., a software company, from 1997 to 2002 Vice President and General Manager of the Middleware and Data Warehousing Product Group, Sybase, Inc., an enterprise and mobile software company Business development, marketing, and engineering roles at Sun Microsystems, Inc. and Hewlett-Packard Company, computer, computer software, and information technology companies B.S., Computer Science, Washington State University Board Experience Upwork Inc., since August 2018 Member of boards of directors of two privately held companies Splunk Inc., from April 2022 to March 2024 Proofpoint, Inc., from 2002 to March 2022, including service as chairperson from 2018 to 2021 Qualifications Mr. Steele brings to our board of directors valuable business experience managing a public company, expertise in cybersecurity, and extensive knowledge of advising technology companies. | | Age: 61 Director Since: August 2018 Executive Vice President and General Manager of Splunk, Cisco Systems, Inc. Upwork Board Committees: Compensation (Chair) Other Public Company Boards: None | |

  22. Class II Directors

    | 28 | 2024 Proxy Statement | |

  23. 2023 Director Compensation

    2023 Director Compensation The following table provides information for 2023 regarding all compensation awarded to, earned by, or paid to each person who served as a director for some portion or all of 2023, other than Ms. Brown, our CEO. Ms. Brown is not included in the table below as she is an employee and received no compensation for her service as a director during 2023. The compensation received by Ms. Brown as an employee is shown in the “Executive Compensation—2023 Summary Compensation Table” below.

  24. 2023 Director Compensation

    | Name | Fees Earned or Paid in Cash ($)(1) | Stock Awards ($)(2) | Total ($)(2) | | Thomas Layton(3) | 8,500 | 309,077 | 317,577 | | Gregory C. Gretsch(4) | 32,500 | 247,265 | 279,765 | | Kevin Harvey(5) | 4,300 | 247,265 | 251,565 | | Elizabeth Nelson(6) | 94,300 | 190,604 | 284,904 | | Leela Srinivasan(7) | 72,500 | 190,604 | 263,104 | | Gary Steele(8) | 7,500 | 247,265 | 254,765 | | Anilu Vazquez-Ubarri(9) | 62,500 | 190,604 | 253,104 |

  25. 2023 Director Compensation

    | (1) The amounts reported in this column for certain members of our board of directors may be lower than those of the other members of our board of directors because of the different compensation arrangements based on elections to receive fees or awards in cash or equity or based on additional fees payable on account of committee membership, as further described in “—Non-Employee Director Compensation Arrangements.” |

  26. 2023 Director Compensation

    | (2) The amounts reported in these columns represent the aggregate grant date fair value of RSUs awarded to directors in 2023 computed in accordance with Financial Accounting Standard Board Accounting Standards Codification Topic 718, which we refer to as ASC 718. The number of RSUs that a director receives is calculated by dividing the target value of the RSU award by the 30-day trailing average trading price. Accordingly, the amounts reported in this column do not reflect the actual economic value realized by the director, which will vary depending on the performance of our common stock. Members of our board of directors may elect to receive a portion of their compensation in cash consideration in lieu of RSUs, as further described in “—Non-Employee Director Compensation Arrangements.” |

  27. 2023 Director Compensation

    | (3) As of December 31, 2023, Mr. Layton held 29,393 unvested RSUs, which included the Annual Award, the Non-Executive Chairperson Fee, and the General Board Service Fee (RSU), as further described in (and which vest in accordance with the vesting schedule described under) “—Non-Employee Director Compensation Arrangements.” |

  28. 2023 Director Compensation

    | (4) As of December 31, 2023, Mr. Gretsch held 25,757 unvested RSUs, which included both the Annual Award and the General Board Service Fee (RSU), as further described in (and which vest in accordance with the vesting schedule described under) “—Non-Employee Director Compensation Arrangements.” |

  29. 2023 Director Compensation

    (9)“Diverse,” “female,” “underrepresented minority,” and “LGBTQ+” as defined in the Nasdaq listing standards. (10)Age and tenure as of March 31, 2024. Tenure does not include service on the board of directors of Elance or oDesk prior to the combination of the two companies in March 2014. All other demographics are based on each director’s self-identification.

  30. 2023 Director Compensation

    | 30 | 2024 Proxy Statement | |

  31. 2023 Director Compensation

    | (5) As of December 31, 2023, Mr. Harvey held 25,757 unvested RSUs, which included both the Annual Award and the General Board Service Fee (RSU), as further described in (and which vest in accordance with the vesting schedule described under) “—Non-Employee Director Compensation Arrangements.” |

  32. 2023 Director Compensation

    | (6) As of December 31, 2023, Ms. Nelson held 22,424 unvested RSUs, which represented the Annual Award, and a stock option to purchase 295,000 shares of common stock. The RSUs are further described in (and vest in accordance with the vesting schedule described under) “—Non-Employee Director Compensation Arrangements.” The stock option was fully vested and exercisable as of December 31, 2023, and expires on February 25, 2025. |

  33. 2023 Director Compensation

    | (7) As of December 31, 2023, Ms. Srinivasan held 22,424 unvested RSUs, which represented the Annual Award, as further described in (and which vest in accordance with the vesting schedule described under) “—Non-Employee Director Compensation Arrangements.” |

  34. 2023 Director Compensation

    | (8) As of December 31, 2023, Mr. Steele held 25,757 unvested RSUs, which included both the Annual Award and the General Board Service Fee (RSU), and a stock option to purchase 150,527 shares of common stock. The RSUs are further described in (and vest in accordance with the vesting schedule described under) “—Non-Employee Director Compensation Arrangements.” The stock option was fully vested and exercisable as of December 31, 2023, and expires on August 19, 2028. |

  35. 2023 Director Compensation

    | (9) As of December 31, 2023, Ms. Vazquez-Ubarri held 22,424 unvested RSUs, which represented the Annual Award, as further described in (and which vest in accordance with the vesting schedule described under) “—Non-Employee Director Compensation Arrangements.” |

  36. Non-Employee Director Compensation Arrangements

    Non-Employee Director Compensation Arrangements In April 2022, our board of directors approved an amended and restated non-employee director compensation program. Our current amended and restated non-employee director compensation program is as follows:

  37. Equity Compensation—Initial Award

    Equity Compensation—Initial Award Upon initial appointment or election to our board of directors, each new non-employee director appointed or elected to our board of directors will be granted RSUs under our 2018 Equity Incentive Plan, which we refer to as the 2018 Plan, with a total value of $400,000 based on a 30-day trailing average trading price, which we refer to as the Initial Award. The grant date fair value of the Initial Award shall not exceed $1,000,000 in a calendar year when combined with the aggregate grant date fair value of any other equity award(s) and cash compensation received by such non-employee director for service on our board of directors for such calendar year. The Initial Award will be granted effective on the date of the non-employee director’s initial appointment or election to our board of directors, which we refer to as the Initial Award Grant Date. The Initial Award will vest with respect to one-third of the total number of RSUs subject to the Initial Award each year beginning with the date that is the one-year anniversary of the Initial Award Grant Date, in each case, so long as the non-employee director continues to provide services as a non-employee director to us through such date. The final annual installment of the Initial Award will fully vest on the earlier of (i) the date immediately prior to our annual meeting of stockholders in the last full year of the vesting of the Initial Award and (ii) the date that is the last day of the last full year of the vesting of such grant, in each case, so long as the non-employee director continues to provide services as a non-employee director to us through such date. The Initial Award will accelerate in full immediately prior to the consummation of a “corporate transaction” (as defined in the 2018 Plan).

  38. Cash or Equity Compensation Election—Annual Award

    Cash or Equity Compensation Election—Annual Award Each non-employee director will automatically be entitled to an annual award of a $185,000 cash payment or RSUs with a total value of $185,000 based on a 30-day trailing average trading price, which we refer to as the Annual Award. The Annual Award will be payable in the form of RSUs or, at a non-employee director’s election, in cash. The initial Annual Award, to the extent payable in RSUs and consistent with the applicable election made, will be granted automatically on the date of the non-employee director’s initial appointment or election to our board of directors, which we refer to as the Initial Annual Award Grant Date, and will be pro-rated for partial quarters served. Subsequently, the Annual Award, to the extent payable in RSUs, will be granted automatically on the date of our annual meeting of stockholders for each year thereafter, which we refer to as the Annual Award Grant Date. The Annual Award will fully vest, or in the case of cash will be paid, on the earlier of (i) the date immediately prior to our next annual meeting of stockholders and (ii) the date that is one year following the Initial Annual Award Grant Date or Annual Award Grant Date, as the case may be, so long as the non-employee director continues to provide services as a non-employee director to us through such date. The Annual Award will be paid, in the case of cash, or settled, in the case of RSUs, in the same calendar year in which the Annual Award vests.

  39. Cash or Equity Compensation Election—Annual Award

    | | 2024 Proxy Statement | 31 |

  40. Cash or Equity Compensation Election—Annual Award

    The Annual Award (regardless of the form of payment) will accelerate in full immediately prior to the consummation of a “corporate transaction” (as defined in the 2018 Plan).

  41. Cash or Equity Compensation Election—Board Service Fees

    Cash or Equity Compensation Election—Board Service Fees The following table sets forth annual compensation payable, which we refer to as a Fee, to each non-employee director for general service as a member of the board of directors, which we refer to as the General Board Service Fee, and for any service in a general board leadership position:

  42. Cash or Equity Compensation Election—Board Service Fees

    | 2023 Board Service Fees | | | General board service fee | $55,000 | | Non-executive chairperson fee | $60,000 | | Lead independent director fee(1) | $15,000 |

  43. Cash or Equity Compensation Election—Board Service Fees

    | (1) As an independent director served as our chairperson for the entirety of 2023, no lead independent director fee was payable for 2023. |

  44. Cash or Equity Compensation Election—Board Service Fees

    Each Fee is pro-rated for partial quarters served and payable in cash or, at a non-employee director’s election, in the form of RSUs. If the non-employee director elects to receive the Fee in cash, which we refer to as the Fee (Cash), it will be paid quarterly in arrears (with the first such payment in any event occurring on the last day of the first calendar quarter following the date of the director’s appointment or election to our board of directors), in each case, so long as the non-employee director continues to provide services in the applicable capacity to us through such date. If the non-employee director elects to receive the Fee in RSUs, which we refer to as the Fee (RSU), the initial Fee (RSU) will be granted automatically on the date of the director’s initial appointment or election to our board of directors and each subsequent Fee (RSU) will be granted automatically on the date of our annual meeting of stockholders for each year thereafter. The number of shares subject to the applicable Fee (RSU) will be based on a 30-day trailing average trading price (which will be pro-rated for partial quarters served in the relevant capacity). The Fee (RSU) will vest and settle quarterly (with the first such vesting and settlement date occurring on the last day of the first calendar quarter following the date of the non-employee director’s appointment or election to our board of directors), in each case, so long as the non-employee director continues to provide services in the applicable capacity to us through such date. The Fee (regardless of the form of payment) will accelerate in full immediately prior to the consummation of a “corporate transaction” (as defined in the 2018 Plan). The final quarterly installment of each Fee (Cash) or Fee (RSU), as applicable, will fully vest on the earlier of (i) the date immediately prior to our next annual meeting of stockholders and (ii) the date that is the last day of the last full quarter of the vesting of such grant, in each case, so long as the non-employee director continues to provide services in the applicable capacity to us through such date.

  45. Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Registered Public Accounting Firm

    | (8) Consists of (i) 9,308,765 shares of common stock, (ii) 707,236 shares of common stock subject to stock options that are exercisable within 60 days of March 31, 2024, and (iii) 208,042 shares of common stock subject to RSUs that vest within 60 days of March 31, 2024 held by our executive officers and directors as a group (other than Mr. Bottoms, as he was appointed as an executive officer after March 31, 2024). |

  46. 2023 Say-on-Pay Vote and Stockholder Feedback

    2023 Say-on-Pay Vote and Stockholder Feedback We consider stockholder perspectives as a key factor in our compensation decision-making process. During 2023, some stockholders expressed concerns with our executive pay programs as evidenced by lower support for our Say-on-Pay vote than in prior years. Following this vote, we undertook robust stockholder outreach to seek feedback on our executive compensation program. In addition to prior outreach efforts, in fall 2023, we contacted stockholders representing approximately 44% of shares outstanding and engaged with stockholders representing approximately 21% of shares outstanding. Our compensation committee chair participated directly in several of these stockholder conversations. Consistent themes we heard from stockholders were that they wanted Upwork to use a broader set of financial performance metrics, differentiated between the short- and long-term incentive programs, and to use a longer performance period in our PSU program.

  47. 2024 Compensation Program Updates Informed by Stockholder Feedback

    2024 Compensation Program Updates Informed by Stockholder Feedback Based on both Upwork’s broader strategic evolution and stockholder feedback, we made improvements to the design of both our annual and long-term incentive programs beginning in 2024 to increase the focus on profitable growth, use a broader set of performance metrics aligned with our strategy, and ensure strong alignment with long-term stockholder value creation. We have updated the performance metrics in our short-term incentive program to include both revenue and adjusted EBITDA, each weighted at 50%, and have included an incentive to achieve strong GSV growth as a potential modifier. We have also re-designed our long-term incentive program to reinforce multi-year performance achievement by incorporating performance milestones for PSU awards that measure year-over-year revenue growth and annual adjusted EBITDA margin in each of the second (2025) and third (2026) year after grant. Our changes to the executive compensation program are responsive to stockholder feedback to use a broader and differentiated set of financial metrics and longer performance periods in the PSU program. We remain focused on aligning performance metrics and goals with our current business strategy and ensuring strong continued alignment with our pay-for-performance philosophy.

  48. Committee Refreshment

    | Topic | What We Heard | Actions Taken in Response | | Short-Term Incentive Compensation Program Design | ● Prefer differentiation in company performance metrics between short- and long-term incentive programs ● Support addition of profitability metric to short-term incentive program | ✓ Differentiated metrics between 2024 short-term and long-term incentive programs ○ Added adjusted EBITDA as performance metric (weighted 50%) for 2024, incentivizing single-year achievement of both revenue and profitability | | Long-Term Incentive Compensation Program Design | ● Prefer multi-year performance period for PSU program ● Prefer differentiation in company performance metrics between short- and long-term incentive programs ● Support addition of profitability metric to long-term incentive program ● Support for 2023 increase in allocation of PSU awards in our long-term incentive program—to 50% in 2023 from 40% in 2022—for our non-CEO Named Executive Officers | ✓ Introduced multi-year performance goals for 2024 PSU awards, measuring performance at the end of years 2025 and 2026 rather than at the end of 2024 ✓ Differentiated metrics between 2024 short-term and long-term incentive programs ○ Added year-over-year revenue growth and adjusted EBITDA margin as performance metrics for 2024 PSU awards, incentivizing sustainable, multi-year growth |

  49. Committee Refreshment

    The new performance metrics incorporated into our short- and long-term incentive programs align with our strategic objectives and evolving business, incentivize long-term performance, and tie executive compensation to stockholder value creation. In addition, measuring the performance of metrics in each of the second and third year following the PSU grant motivates long-term performance.

  50. Committee Refreshment

    | | 2022 | 2023 | 2024 | | Short-Term Incentives | Performance Period: 1 year Metric: ● Compensation Program Revenue (100%) | Performance Period: 1 year Metrics: ● Compensation Program Revenue (100%) ● Individual Performance Adjustment (+/- 20%)(1) | Performance Period: 1 year Metrics: ● Revenue (50%) ● Adjusted EBITDA (50%) ● GSV modifier ● Individual Performance Adjustment (+/- 20%)(1) | | Long-Term Incentives | PSU / RSU Mix: ● CEO: 60% / 40% ● Other NEOs: 40% / 60% PSU Performance Period: 1 year | PSU / RSU Mix: ● CEO: 60% / 40% ● Other NEOs: 50% / 50%(2) PSU Performance Period: 1 year | PSU / RSU Mix: ● CEO: 60% / 40% ● Other NEOs: 50% / 50% PSU Performance Period: Multi-Year ● Measure performance in each of 2025 and 2026, with up to 50% of maximum PSUs vesting based on performance during each year | | | PSU Metric: ● Compensation Program Revenue (100%) | PSU Metric: ● Compensation Program Revenue (100%) | PSU Metrics: ● Year-over-year revenue growth percentage ● Adjusted EBITDA margin | | | RSU Vesting: 4-year quarterly | RSU Vesting: 4-year quarterly | RSU Vesting: 4-year quarterly |

  51. Committee Refreshment

    | (1) The individual performance adjustment is not applicable to our CEO. | | (2) Ms. Gessert did not receive a 2023 PSU award given her employment start date of April 25, 2023. |

  52. Committee Refreshment

    | Compensation Objectives | | Attract, motivate, incentivize, and retain employees at the executive level who contribute to our long-term success | | Provide competitive compensation packages to our executives | | Reward the achievement of our business objectives | | Align the economic interests of our employees with those of our stockholders by focusing on long-term incentive compensation in the form of equity awards that correlate with the growth of sustainable long-term value for our stockholders |

  53. Committee Refreshment

    We structure the annual compensation of our Named Executive Officers using three principal elements: annual base salary, a short-term incentive compensation opportunity in the form of an annual performance bonus, and long-term incentive compensation opportunities in the form of equity awards.

  54. Committee Refreshment

    | Annual Base Salary | Short-Term Incentives | Long-Term Incentives | | | | Annual Performance Bonus | Performance-Based PSUs | Time-Based RSUs | | | Performance-based incentives | | |

  55. Committee Refreshment

    | ● | Short-term incentives. Short-term incentives can be earned through participation in our annual performance bonus plan. The annual performance bonus plan provides payments if our Named Executive Officers produce short-term company performance results that meet or exceed certain pre-established annual financial targets determined from time to time by us and approved by the compensation committee. The annual performance bonus plan provides that this annual performance bonus may then be increased or decreased by up to 20% based on a Named Executive Officer’s (other than Ms. Brown, to whom the individual performance adjustment does not apply) individual performance in 2023 as determined in the discretion of Ms. Brown. |

  56. Committee Refreshment

    | ● | Long-term incentives. We grant PSU awards and RSU awards to our Named Executive Officers, the value of which depends on both our short-term and long-term financial performance, which influences the value of our common stock, thereby incentivizing our Named Executive Officers to build sustainable long-term value for the benefit of our stockholders. |

  57. Committee Refreshment

    | What We Don’t Do | | | No “single-trigger” change in control arrangementsX | We do not maintain any arrangements that require single-trigger change in control payments or acceleration of equity awards to our Named Executive Officers upon a change in control of Upwork | | No executive retirement plansX | We do not offer our Named Executive Officers any executive-specific retirement benefits | | No hedging transactionsX | Our insider trading policy prohibits our Named Executive Officers and directors from entering into hedging transactions involving Upwork securities | | No pledging transactionsX | Our insider trading policy prohibits our Named Executive Officers and directors from pledging Upwork securities without pre-approval by our compliance officer, which may be granted only in the case of collateral for a loan where the pledging person has clearly demonstrated an ability to repay the loan without resort to the pledged securities | | No excise tax reimbursements or “gross ups” for change-in-control paymentsX | We do not provide our Named Executive Officers with any excise tax gross ups or other payment or reimbursement of excise taxes on severance in connection with a change in control of Upwork | | No excessive perquisitesX | Limited perquisites for Named Executive Officers that are not available to all employees |

  58. Committee Refreshment

    | ● | the potential of each individual Named Executive Officer to contribute to our long-term financial, operational, and strategic objectives; |

  59. Committee Refreshment

    | ● | the compensation practices of the companies in our compensation peer group and in selected broad-based compensation surveys and the positioning of each Named Executive Officer’s compensation in a ranking of peer company compensation levels based on an analysis of competitive market data; and |

  60. Committee Refreshment

    These factors provide the framework for compensation decision-making and final decisions regarding the compensation opportunity for each Named Executive Officer. No single factor is determinative in setting compensation levels, nor is the impact of any individual factor on the determination of pay levels quantifiable. The compensation committee does not engage in formal benchmarking against other companies’ compensation programs or practices to establish our compensation levels or make specific compensation decisions with respect to our Named Executive Officers. The compensation committee believes that overreliance on benchmarking can result in compensation that is unrelated to the value delivered by our Named Executive Officers because compensation benchmarking does not take into account the specific performance of the Named Executive Officers or our relative size and performance. Instead, in making its determinations, and in consultation with its compensation consultant, the compensation committee reviews compensation information for a representative group of peer companies to the extent that the executive positions at these companies are considered comparable to our executive officers’ positions and informative of the competitive environment. The compensation committee also reviews broad-based compensation surveys to understand market compensation levels. These principles and processes apply to both cash and equity-based compensation granted under our executive compensation program. Role of Management In discharging its responsibilities, the compensation committee works with members of our management, including our CEO. Our management assists the compensation committee by providing information on corporate and individual performance and management’s perspective on compensation matters. The compensation committee solicits and reviews our CEO’s proposals with respect to program structures, as well as our CEO’s recommendations for adjustments to annual cash compensation, long-term incentive compensation opportunities, and other compensation-related matters for our Named Executive Officers (except with respect to her own compensation) based on our CEO’s evaluation of their performance for the prior fiscal year. At the beginning of each fiscal year, our CEO reviews the performance of our other Named Executive Officers based on their overall performance and performance against business objectives established for them for the prior fiscal year and then shares these evaluations with, and makes recommendations to, the compensation committee for each element of compensation as described above. The annual business objectives for each Named Executive Officer are developed through mutual discussion and agreement between our CEO and our other Named Executive Officers and are also reviewed with our board of directors. The compensation committee reviews and discusses our CEO’s recommendations and considers them as one factor in determining and approving our Named Executive Officers’ compensation. Our CEO also attends meetings of our board of directors and the compensation committee at which executive compensation matters are addressed, except for discussions involving her own compensation. In addition, with respect to our other Named Executive Officers, our CEO determines the level of individual performance adjustment to each Named Executive Officer’s annual performance bonus payout as described below in “—Compensation Elements—Annual Performance Bonus—Individual Performance Adjustment.” Competitive Positioning The compensation committee believes that peer group comparisons are useful guides to measure the competitiveness of our executive compensation program and related policies and practices. To assess our executive compensation against the competitive market, the compensation committee reviews and considers the compensation levels and practices of a select group of peer companies. This compensation peer group consists of technology companies that are similar to us in terms of revenue, market capitalization, and industry focus. The competitive data drawn from this compensation peer group is only one of several factors that the compensation committee considers, however, in making its compensation decisions for our Named Executive Officers.

  61. Committee Refreshment

    In February 2023, the compensation committee used the compensation peer group set forth below to analyze the compensation of our Named Executive Officers and make its initial compensation decisions for the year. This compensation peer group, which was developed in July 2022 with the assistance of the compensation committee’s independent compensation consultant after conducting a thorough review of our then-compensation peer group, was composed of publicly traded technology companies against which we compete for executive talent. In evaluating the companies comprising the compensation peer group, the compensation consultant specifically considered and weighed the following primary criteria, among other factors:

  62. Committee Refreshment

    | Primary Criteria for Compensation Peer Group Selection—July 2022 | | | Public Company Status/Location | Publicly traded companies primarily headquartered in the United States and traded on a major U.S. stock exchange | | Industry | Software and internet companies with a focus on online marketplaces | | Revenue | Similar revenue to ours—within a range of approximately 0.5x to approximately 2.0x our revenue (based on the then-last four fiscal quarters) of approximately $531 million (approximately $265 million to approximately $1.1 billion) | | Market Capitalization | Similar market capitalization to ours—within a range of approximately 0.33x to approximately 3.0x our then 30-day market capitalization of approximately $2.5 billion (approximately $920 million to approximately $8.3 billion) |

  63. Committee Refreshment

    | 2023 Compensation Peer Group | | | | Alteryx | Cvent Holdings | Q2 Holdings | | AppFolio | Everbridge | Redfin | | Appian | Fastly | Revolve Group | | Asana | Fiverr International | Shutterstock | | Blackline | LegalZoom.com | Smartsheet | | CarGurus | LivePerson | ZipRecruiter | | Chegg | Magnite | |

  64. Committee Refreshment

    One company, Paylocity, was removed from our compensation peer group because its market capitalization was no longer within our targeted market capitalization range, and two companies, Anaplan and Stamps.com, were removed because they had been, or were in the process of being, acquired. The following three companies were added to our compensation peer group on the basis of their similarity to us in size, revenue, market capitalization, and industry sector: Cvent Holdings, LegalZoom.com, and ZipRecruiter. The following table shows our total revenue and market capitalization compared to the median for our 2023 compensation peer group at the time of approval by our compensation committee:

  65. Committee Refreshment

    | | Upwork | 2023 Peer Group Median | | Total Revenue ($ millions)(1) | 531 | 532 | | Market Capitalization ($ millions)(2) | 2,460 | 2,716 |

  66. Committee Refreshment

    The compensation committee used data drawn from the companies in our compensation peer group, as well as data from a custom data set of small- and mid-cap U.S.-based software companies drawn from the Radford Global Technology Survey database, to evaluate the competitive market when determining the target total compensation packages for our Named Executive Officers, including annual base salary, target annual performance bonus opportunities, and long-term incentive compensation opportunities. All of the compensation peer group companies that participate in the Radford Global Technology Survey were included in the custom data set. This compensation peer group was used by the compensation committee as a reference for understanding the competitive market for executive positions in our industry sector to set 2023 compensation for our Named Executive Officers. The compensation committee reviews our compensation peer group at least annually and makes adjustments to its composition if warranted, taking into account changes in both our business and the businesses of the companies in the peer group.

  67. Committee Refreshment

    | ● | review, research, and updating of our compensation peer group; |

  68. Committee Refreshment

    | ● | an analysis of competitive market data for our executive positions, including our Named Executive Officer positions, and an evaluation of how the compensation we pay our executives compares both to our performance and to how the companies in our compensation peer group and/or selected broad-based compensation surveys compensate their executives; |

  69. Committee Refreshment

    | ● | review and an analysis of the base salary levels, annual bonus opportunities, and long-term incentive compensation opportunities of our executives, including our Named Executive Officers; |

  70. Committee Refreshment

    | ● | an analysis of the competitive market strategy for our equity compensation award program; |

  71. Committee Refreshment

    | ● | a review of best practices in equity compensation, including a burn rate analysis and strategies to mitigate the equity burn rate and reduce dilution and better use equity to execute on our equity compensation goals; |

  72. Committee Refreshment

    | ● | an analysis of competitive market data based on compensation peer group data and the broader technology sector for the Chief Financial Officer position; |

  73. Committee Refreshment

    | ● | an analysis of long-term incentive performance design considerations; |

  74. Committee Refreshment

    | ● | a review and an analysis of competitive market data for our executive severance and change-in-control agreements; |

  75. Committee Refreshment

    | ● | an analysis of competitive market data for the non-employee members of our board of directors and evaluation of how the compensation we pay the non-employee members of our board of directors compares to how the companies in our compensation peer group compensate the non-employee members of their boards of directors; |

  76. Committee Refreshment

    | ● | a target annual bonus opportunity equal to 80% of her base salary; and |

  77. Committee Refreshment

    | ● | an RSU award to acquire 600,000 shares of our common stock (which was determined as the number of shares equal to $9,000,000 divided by the greater of (i) $15.00 and (ii) the average daily closing price of our common stock for the 30-day period ending on the trading day immediately prior to the date of grant, rounded down to the nearest whole share), with such award vesting with respect to 25% of the total number of shares subject to the award on May 18, 2024 and an additional 6.25% of the total number of shares subject to the award vesting on each quarterly anniversary thereafter, subject to Ms. Gessert’s continued service to Upwork on each applicable vesting date. |

  78. Committee Refreshment

    Ms. Gessert also entered into a Severance Agreement (as defined below) providing for certain severance payments and benefits in the event of certain involuntary terminations of employment, including an involuntary termination of employment in connection with a change in control of our company, as well as our standard form of indemnification agreement, employee invention assignment and confidentiality agreement, and employee dispute resolution agreement. For a description of the payments and benefits available under Ms. Gessert’s Severance Agreement, see “—Potential Payments upon Termination or Change in Control” below. The compensation arrangements reflected in the Gessert Offer Letter were negotiated on our behalf by Ms. Brown and our Vice President, Total Rewards and approved by our board of directors. In establishing Ms. Gessert’s initial compensation arrangements, we took into consideration the requisite experience and skills that a qualified candidate would need to manage a growing business like ours in a dynamic and ever-changing environment, the competitive market for similar positions at companies in our 2023 compensation peer group, the value of equity holdings that Ms. Gessert forfeited upon leaving her prior employer, and our existing executive compensation structure, balancing both competitive and internal equity considerations. For a summary of the material terms and conditions of the Gessert Offer Letter, see “—Other Compensation Elements—Employment Arrangements” below. Compensation Elements Annual Base Salary

  79. Committee Refreshment

    The base salaries paid to our Named Executive Officers during 2023 are set forth in the “2023 Summary Compensation Table” below. Short-Term Incentive Compensation 2023 Short-Term Incentive Program Overview

  80. Committee Refreshment

    | Compensation Element | Performance Criteria | Performance and Vesting Periods | Objectives | | Annual Performance Bonus | ● Compensation Program Revenue ● Individual Performance Adjustment(1) | ● One-year performance period | ● Incentivize achievement of annual business objectives and reward short-term performance ● Align compensation with business strategy through use of performance metric based on revenue growth, which was considered our most important financial objective for 2023 when compensation was set in February 2023 ● Hold executives accountable for personal performance with +/- 20% individual performance adjustment(1) |

  81. Committee Refreshment

    We use an annual performance bonus plan to motivate our employees, including our Named Executive Officers (other than Mr. Gilpin, our former Chief Sales Officer, who participated in a separate sales compensation plan described in “—Sales Compensation Plan for Mr. Gilpin” below), to achieve our annual business goals as reflected in our annual operating plan. Typically, our compensation committee approves our annual bonus plan, including the performance criteria, during the first quarter of the year. In February 2023, the compensation committee approved the 2023 performance criteria, bonus pool, and other terms under our annual performance bonus plan, the Upwork Inc. Performance Bonus Plan, which we refer to as the 2023 Performance Bonus Plan, to provide annual bonus awards for our employees, including certain of our Named Executive Officers, and set the target annual bonus opportunities for the members of our leadership team, including our Named Executive Officers, who were participants in the 2023 Performance Bonus Plan. The compensation committee served as the administrator of the 2023 Performance Bonus Plan. Our board of directors and the compensation committee have the authority to amend or terminate the plan at any time and for any reason, provided that any amendment, suspension, or termination of the plan will not, without a participant’s consent, alter or impair any rights or obligations under any earned award of such participant. Target Annual Bonus Opportunities In February 2023, the compensation committee reviewed the target annual bonus opportunity of Ms. Brown, our only Named Executive Officer who was a participant in the 2023 Performance Bonus Plan at such time, after considering a competitive market analysis prepared by its compensation consultant, as well as the other factors described above in “—Compensation-Setting Process—Setting Target Total Compensation.” Following this review, the compensation committee determined to maintain Ms. Brown’s percentage target annual bonus opportunity at the 2022 level. Recognizing that the combination of maintaining Ms. Brown’s 2022 target annual bonus opportunity percentage and increasing her base salary positioned her target total cash compensation opportunity at levels that were competitive within the marketplace, the compensation committee determined that the target annual bonus opportunity was appropriate and incentivized retention and motivation in a highly competitive and challenging market for skilled and seasoned executive officers. In March 2023, in connection with her appointment as our Chief Financial Officer in April 2023, the compensation committee approved an initial target annual bonus opportunity for Ms. Gessert equal to 80% of her annual base salary. See “—Compensation-Setting Process—Initial Compensation Arrangements for Ms. Gessert” above for more information. Ms. Gessert’s 2023 target annual bonus opportunity amount was pro-rated based on her employment start date as described below in “—Annual Bonus Payments.” The following table sets forth the 2023 target annual bonus opportunities for each participating Named Executive Officer:

  82. Committee Refreshment

    | Named Executive Officer | 2022 Target Annual Bonus as Percentage of Base Salary | 2023 Target Annual Bonus as Percentage of Base Salary | 2023 Target Annual Bonus Opportunity(1) | | Hayden Brown(1) | 100% | 100% | $570,000 | | Erica Gessert(2) | N/A | 80% | $300,667 |

  83. Committee Refreshment

    | (1) Ms. Brown’s target annual bonus opportunity was effective January 1, 2023. | | (2) Ms. Gessert’s target annual bonus opportunity was established in March 2023 in connection with her appointment as our Chief Financial Officer in April 2023, and she was eligible for a 2023 annual bonus award that was pro-rated based on her employment start date. |

  84. Committee Refreshment

    The compensation committee consistently reviews an array of potential performance measures to determine the appropriate metrics to drive and evaluate the strategic success of our business. The compensation committee selected Compensation Program Revenue as the sole company performance measure for the 2023 Performance Bonus Plan because in February 2023 when the compensation committee approved our 2023 executive compensation program, our primary strategic focus was revenue growth. This focus was reinforced by stockholder feedback that revenue growth was the most important metric for our business. See “—2024 Annual Bonus Plan Refinements” for an explanation of changes made to our short-term incentive compensation program effective for 2024 in response to stockholder feedback. Corporate Performance Calculation Mechanics For purposes of the 2023 Performance Bonus Plan, the compensation committee determined that Compensation Program Revenue performance would be determined as a percentage achievement, which we refer to as Revenue Achievement Percentage, of our Compensation Program Revenue target for 2023 of $683,000,000, calculated by linear interpolation between the performance levels set forth in the following table:

  85. Committee Refreshment

    If the threshold performance level for Compensation Program Revenue was not met during the Performance Period, then the Named Executive Officer would receive no bonus, regardless of individual performance. In addition, 200% was the cap on Revenue Achievement Percentage in the event Compensation Program Revenue exceeded the highest performance level during the Performance Period. The target level for Compensation Program Revenue under the 2023 Performance Bonus Plan was 16% greater than the target level for Compensation Program Revenue in our 2022 plan and 18% greater than our actual fiscal year 2022 Compensation Program Revenue. The threshold level for the 2023 Performance Bonus Plan represented an approximate 8% increase from the Compensation Program Revenue actually achieved in 2022. These targets reflect the compensation committee’s approach of setting aggressive targets consistent with our challenging strategic objectives and that it believes are achievable with diligent efforts within external market conditions. Individual Performance Adjustment In 2023, in consultation with its independent compensation consultant, our compensation committee added an individual performance adjustment to the 2023 Performance Bonus Plan to hold our employees, including our Named Executive Officers other than our CEO, accountable for personal performance and reward excellence. This individual performance adjustment component was designed to be budget-neutral such that the aggregate bonus payments to all employees remained the same as it would have been absent the individual performance adjustment component. Under this component, following the calculation of each eligible Named Executive Officer’s Target Bonus Amount (the product of the participant Named Executive Officer’s target annual bonus opportunity multiplied by the applicable Revenue Achievement Percentage), each eligible Named Executive Officer’s bonus payout may be increased or decreased by up to 20% based on such Named Executive Officer’s individual performance in 2023.

  86. Committee Refreshment

    This individual performance component is not applicable to our CEO who is ultimately responsible for, and therefore whose performance is measured solely on, company performance. Ms. Brown’s actual bonus was therefore to be determined on the basis of the formula set forth below, without application of the individual performance adjustment. Annual Bonus Plan Formula The following formula was used to calculate the annual bonuses paid to participants under the 2023 Performance Bonus Plan:

  87. Committee Refreshment

    | Bonus Payment | = | 2023 Base Salary | × | 2023 Target Annual Bonus Opportunity | × | Revenue Achievement Percentage | +/- | Individual Performance Adjustment |

  88. Committee Refreshment

    | ● | “2023 Base Salary” meant the amount of base salary actually earned and paid to the participant during 2023 (on a pre-tax basis), excluding (i) bonuses, commissions, overtime pay, or the value of any equity securities, or any employee benefits or other compensation paid to the participant (for example, the Section 401(k) plan employer match) and (ii) any compensation paid to the participant in respect of inactive employment by us (for example, a leave of absence). |

  89. Committee Refreshment

    | Named Executive Officer(1) | Target Annual Bonus Opportunity (as Percentage of Base Salary) | Target Annual Bonus(2) | Revenue Achievement Percentage | Individual Performance Adjustment | Earned Annual Bonus Award(2) | Earned Annual Bonus Award (as Percentage of Base Salary)(2) | | Hayden Brown | 100% | $570,000 | 54% | N/A | $307,800 | 54% | | Erica Gessert | 80% | $300,667 | 54% | +13% | $183,467 | 49% |

  90. Committee Refreshment

    | (1) Mr. Gilpin was not a participant in the 2023 Performance Bonus Plan as he participated in a separate sales compensation plan, as described below in “—Sales Compensation Plan for Mr. Gilpin.” | | (2) Target annual bonus opportunity and actual earned annual bonus award for Ms. Gessert were pro-rated for her employment start date of April 25, 2023. The amount in the last column for Ms. Gessert is calculated as a percentage of the base salary Ms. Gessert earned during 2023, rather than her annual base salary rate. |

  91. Committee Refreshment

    Sales Compensation Plan for Mr. Gilpin As noted above, our former Chief Sales Officer, Mr. Gilpin, did not participate in our 2023 Performance Bonus Plan and instead participated in a separate sales compensation plan. Under this plan, Mr. Gilpin’s annual cash incentive for 2023 was based on his ability to manage our sales organization to (i) achieve our annual enterprise revenue quota and reward him for growing our enterprise accounts for the year and (ii) achieve our annual enterprise subscription quota and reward him for our sales team’s enterprise bookings efforts for the year. Each of these performance incentives was weighted 50% for purposes of Mr. Gilpin’s 2023 annual cash incentive compensation. In 2023, Mr. Gilpin’s target annual cash incentive opportunity was $428,480, which was equal to 100% of his 2023 annual base salary. In addition, each performance incentive included an additional multiplier if either enterprise revenue or enterprise bookings for the year exceeded his annual quota.

  92. Committee Refreshment

    In addition, in the event that the sales organization exceeded our annual enterprise revenue quota or annual enterprise bookings quota, as the case may be, in addition to his quarterly cash incentive payment, Mr. Gilpin was eligible to receive an additional payment equal to ten times (10x) attainment over the quota for the applicable annual enterprise revenue or enterprise bookings quota, as the case may be, for each performance incentive, which we refer to as the Accelerated Payment. There was no cap on the Accelerated Payment (which was payable after the end of the year) in addition to the quarterly payments described above. Further, in the event that the sales organization attained between 50% and 100% of our annual enterprise revenue quota or annual enterprise bookings quota, as the case may be, Mr. Gilpin’s payment was subject to a decelerator equal to two times (2x) of each dollar not generated toward the applicable annual enterprise revenue or enterprise bookings quota, as the case may be. As previously disclosed, Mr. Gilpin transitioned from his role as our Chief Sales Officer into a Sales Advisor effective May 3, 2023, and his employment with us terminated effective June 30, 2023. As a result, Mr. Gilpin was no longer eligible to participate in or receive any incentive compensation under the sales compensation plan for periods following May 3, 2023. Mr. Gilpin earned an annual cash incentive payment under his sales compensation plan in 2023 in the aggregate amount of $49,801, representing approximately 12% of his 2023 target annual cash incentive opportunity. The annual bonuses and sales compensation awarded to our Named Executive Officers for 2023 are set forth in the “2023 Summary Compensation Table” below. Bonus for Interim Role In addition to his role as our former Chief Sales Officer, Mr. Gilpin served as the interim leader of our Enterprise business unit from December 2022 until he transitioned out of his executive role on May 3, 2023. As consideration for the expanded responsibilities taken on by Mr. Gilpin in this interim role, he received a quarterly cash bonus of $20,000 per quarter, pro-rated based on the days in each quarter in which Mr. Gilpin served in this interim leadership role. As a result, Mr. Gilpin received aggregate bonus payments with respect to this interim role of $30,813 in 2023. 2024 Annual Bonus Plan Refinements In 2023, we adjusted our overall business strategy to pursue durable and profitable growth. To reinforce this strategy, we have adopted a new performance metric structure for our 2024 short-term incentive program. Company performance in 2024 will be assessed against revenue and adjusted EBITDA performance goals set by the compensation committee. To encourage management efforts to promote activity on our marketplace, we have also enabled a bonus funding modifier for the achievement of strong GSV growth, and an individual performance adjustment will continue to apply. See “—Executive Summary—Executive Compensation Program Progression and Stockholder Engagement” above for more information.

  93. Committee Refreshment

    Long-Term Incentive Compensation 2023 Long-Term Incentive Program Overview

  94. Committee Refreshment

    | Compensation Element | Performance Criteria | Performance and Vesting Periods | Objectives | | Performance-Based PSUs | ● Compensation Program Revenue ● Service-based vesting | ● One-year performance period ● Vesting: ○ 25% of Earned PSUs (as defined below) vest following one-year performance period ○ Remainder of Earned PSUs vest quarterly over following three-year period subject to continued service | ● Align the economic interests of our executives with long-term interests of our stockholders ● Incentivize achievement of annual business objectives and reward long-term performance ● Motivate long-term sustainable value creation ● Promote retention of top talent ● Align compensation with business strategy through use of performance metric based on revenue growth, which was considered our most important financial objective for 2023 when PSUs were granted in February 2023 | | Time-Based RSUs | ● Service-based vesting | ● Vesting over a four-year period subject to continued service | ● Align the economic interests of our executives with long-term interests of our stockholders ● Motivate long-term sustainable value creation ● Promote retention of top talent |

  95. Committee Refreshment

    We view long-term incentive compensation in the form of equity awards as a critical element of our executive compensation program, and overall Named Executive Officer compensation is weighted significantly in favor of equity compensation. We use equity awards to incentivize and reward our Named Executive Officers for long-term corporate performance based on the value of our common stock and, thereby, to align the interests of our Named Executive Officers with those of our stockholders. The realized value of these equity awards bears a direct relationship to our stock price, and, therefore, these awards are an incentive for our Named Executive Officers to create long-term value for our stockholders. Equity awards also help us retain and reward qualified executives in a competitive market. Typically, we have granted equity awards to our Named Executive Officers as part of the compensation committee’s annual review of our executive compensation program. For 2023, the compensation committee elected to grant long-term incentive compensation in the following forms:

  96. Committee Refreshment

    | ● | RSU awards with time-based vesting requirements that may be settled for shares of our common stock; and |

  97. Committee Refreshment

    | ● | PSU awards with both performance-based and time-based vesting requirements that, if earned, may be settled for shares of our common stock. See “—2023 Equity Awards” for more information. |

  98. Committee Refreshment

    The compensation committee grants RSU awards because they enable us to incentivize and retain our Named Executive Officers using fewer shares of our common stock than would be necessary if we used stock options. We grant PSU awards because they must be earned through the satisfaction of pre-established company performance targets, thereby compensating our executives for achieving our most important business objectives and further aligning the economic interests of our executives with those of our stockholders.

  99. Committee Refreshment

    | ● | the retention value of the equity compensation held by the Named Executive Officer; |

  100. Committee Refreshment

    | ● | a competitive market analysis prepared by its compensation consultant; |

  101. Committee Refreshment

    | ● | the recommendations of our CEO (except with respect to her own equity awards); |

  102. Committee Refreshment

    | ● | the amount of equity compensation held by the Named Executive Officer (including the current economic value of his or her unvested equity and the ability of these unvested holdings to satisfy our retention objectives); and |

  103. Committee Refreshment

    2023 Equity Awards The following table sets forth the equity awards granted to our Named Executive Officers in 2023:

  104. Committee Refreshment

    | Named Executive Officer | RSU Awards (Shares) | PSU Awards (Target Shares) | PSU Awards (Maximum Shares) | PSU Awards (Target Shares) as Percentage of Total Long-Term Incentive Opportunity | | Hayden Brown | 293,333 | 440,000 | 880,000 | 60% | | Erica Gessert(1) | 600,000 | — | — | — | | Eric Gilpin(2) | 40,000 | 40,000 | 80,000 | 50% |

  105. Committee Refreshment

    | (1) Ms. Gessert was awarded her RSU award in connection with her appointment as our Chief Financial Officer in April 2023. | | (2) Mr. Gilpin forfeited his 2023 RSU and PSU awards in connection with the termination of his employment on June 30, 2023. |

  106. Committee Refreshment

    In 2023, the compensation committee increased the target values of Ms. Brown’s RSU and PSU awards compared to 2022 to incentivize her retention in a competitive market for executive talent and motivate the achievement of our long-term business objectives. The compensation committee reduced the target values of Mr. Gilpin's RSU and PSU awards for 2023 from their 2022 levels due to various factors, including sales business unit and individual performance considerations and prevailing market conditions. Such changes to the target grant date values of equity awards for 2023 were made in consultation with the compensation committee’s independent compensation consultant. The equity awards granted to our Named Executive Officers during 2023 are set forth in the “2023 Summary Compensation Table” and the “2023 Grants of Plan-Based Awards Table” below. 2023 RSU Awards In February 2023, the compensation committee approved RSU awards for Ms. Brown and Mr. Gilpin. These RSU awards vest over a four-year period, with 1/16th of the total number of shares subject to the award vesting on each quarterly anniversary after February 18, 2023, subject to the Named Executive Officer’s continued service with us on each applicable vesting date. The RSU awards are subject to acceleration as described in “—Potential Payments upon Termination or Change in Control” below. In March 2023, in connection with her appointment as our Chief Financial Officer in April 2023, the compensation committee approved an RSU award for Ms. Gessert. This RSU award vests over a four-year period, with 25% of the total number of shares subject to the award vesting on May 18, 2024 and an additional 6.25% of the total number of shares subject to the award vesting on each quarterly anniversary date thereafter, subject to her continued service with us on each applicable vesting date. This RSU award is subject to acceleration as described in “—Potential Payments upon Termination or Change in Control” below. The number of shares of our common stock subject to each RSU award was determined by dividing (i) the intended dollar value of each award by (ii) the greater of (a) $15.00 and (b) the average of the closing sale prices of our common stock for the 30-day period ending on the last trading day immediately preceding the grant date, rounding down to the nearest whole share.

  107. Committee Refreshment

    2023 PSU Awards In February 2023, the compensation committee approved PSU awards for Ms. Brown and Mr. Gilpin. Ms. Gessert did not receive a 2023 PSU award given her employment start date of April 25, 2023. The target number of PSUs comprised 60% of the total long-term incentive compensation opportunity of our CEO, Ms. Brown, and 50% of the total long-term incentive compensation opportunity of Mr. Gilpin (up from 40% in 2022 for Mr. Gilpin). The target number of shares of our common stock subject to each PSU award was determined by dividing (i) the intended dollar value of each award by (ii) the greater of (a) $15.00 and (b) the average of the closing sale prices of our common stock for the 30-day period ending on the last trading day immediately preceding the grant date, rounding down to the nearest whole share. The 2023 PSU awards had both a performance-based vesting requirement and a time-based vesting requirement, as described below.

  108. PSU Performance Requirement

    PSU Performance Requirement The compensation committee selected Compensation Program Revenue(15) as the performance measure for the 2023 PSU awards. The number of PSUs that could become subject to each award, which we refer to as the Earned PSUs, were to be earned on the basis of the achievement of certain pre-established Compensation Program Revenue targets for our fiscal year ended December 31, 2023, which we refer to as the Performance Period.

  109. PSU Performance Requirement

    | 2023 Compensation Program Revenue | = | 2023 Total Revenue | - | 2023 Costs of Talent Services to Deliver Managed Services |

  110. PSU Performance Requirement

    This is the same definition of “Compensation Program Revenue” as used to determine bonuses under our 2023 Performance Bonus Plan, as described above. The computation of Compensation Program Revenue target achievement was to be determined in our sole discretion, as approved by the compensation committee. The Compensation Program Revenue metric uses a net revenue calculation for our managed services revenue to account for clients that may switch mid-year to using our managed services offering so that the achievement of Earned PSUs is not impacted by the differing GAAP reporting standards for revenue from our other offerings, which are reported on a “net” basis under GAAP, and revenue from our managed services offering, which is reported on a “gross” basis under GAAP. As a result, PSU recipients are not able to achieve Earned PSUs solely as a result of a client changing from our marketplace offering to our managed services offering mid-year. The compensation committee consistently reviews an array of potential performance measures to determine the appropriate metrics to drive and evaluate the strategic success of our business. The compensation committee selected Compensation Program Revenue as the sole company performance measure for the 2023 PSU awards because in February 2023 when the compensation committee approved our 2023 executive compensation program, our primary strategic focus was revenue growth. This focus was reinforced by stockholder feedback that revenue growth was the most important metric for our business. See “—2024 Equity Award Refinements” for an explanation of changes made to our long-term incentive compensation program effective for 2024 in response to stockholder feedback. (15) Compensation Program Revenue is not a financial measure prepared in accordance with GAAP. For more information on how we compute this non-GAAP financial measure and a reconciliation to the most directly comparable financial measure prepared in accordance with GAAP, please refer to “Appendix A: Reconciliation of Non-GAAP Financial Measures” to this Proxy Statement.

  111. PSU Performance Requirement

    | | 2024 Proxy Statement | 65 |

  112. PSU Performance Calculation Mechanics

    PSU Performance Calculation Mechanics The various performance levels for our 2023 Compensation Program Revenue during the Performance Period were to be determined by linear interpolation between the following performance levels:

  113. PSU Performance Calculation Mechanics

    | Compensation Program Revenue During Performance Period | Percentage of PSUs to Become Earned PSUs | | $625,000,000 and below | 0% | | $665,600,000 | 83% | | $683,000,000 (Target) | 100% | | $694,700,000 | 112% | | $741,100,000 and above | 200% |

  114. PSU Performance Calculation Mechanics

    If the threshold performance level for Compensation Program Revenue was not met during the Performance Period, then the Named Executive Officer would receive zero Earned PSUs. In addition, 200% was the cap on Earned PSUs in the event Compensation Program Revenue exceeded the highest performance level during the Performance Period. The target level for Compensation Program Revenue under our 2023 PSU program was 16% greater than the target level for our 2022 PSU program and 18% greater than our actual fiscal year 2022 Compensation Program Revenue. The threshold level for the 2023 PSU program represented an approximate 8% increase from the Compensation Program Revenue actually achieved in 2022. These targets reflect the compensation committee’s approach of setting aggressive targets consistent with our challenging strategic objectives and that it believes are achievable with diligent efforts within external market conditions.

  115. PSU Time-Based Vesting Requirement

    PSU Time-Based Vesting Requirement Following the Performance Period, all Earned PSUs were then subject to an additional time-based vesting requirement, such that the Earned PSUs would be settled only to the extent vested in accordance with the time-based vesting requirements described below. As soon as reasonably practicable following the completion of the Performance Period, the compensation committee was to determine and certify in writing the Compensation Program Revenue level attained during the Performance Period and the number of Earned PSUs, which we refer to as the Certification Date. Under the time-based vesting requirement, 25% of the Earned PSUs were to vest on the one-year anniversary of the vesting commencement date, February 18, 2023, and thereafter an additional 1/16th of the Earned PSUs will vest on each quarterly anniversary thereafter, subject to the Named Executive Officer’s continuous service with us on each applicable vesting date. In the aggregate, the Performance Period and the time-based vesting requirement require four years of service for the Earned PSUs to vest fully. For the avoidance of doubt, no units subject to the PSU awards would vest prior to the Certification Date, and no units subject to the PSU awards would be eligible to vest following the Certification Date unless they were Earned PSUs.

  116. Certification of 2023 PSU Performance

    Certification of 2023 PSU Performance On the Certification Date, which was February 18, 2024, the compensation committee determined and certified in writing that we had attained Compensation Program Revenue for 2023 in the amount of $651.3 million (calculated in the manner described above). Based on this Compensation Program Revenue performance, 54% of the target units subject to the PSU awards were eligible to become Earned PSUs. The following table sets forth the number of Earned PSUs with respect to 2023 PSU awards for each Named Executive Officer and the number of such Earned PSUs that vested on the one-year anniversary of the vesting commencement date for the 2023 PSU awards:

  117. Certification of 2023 PSU Performance

    | Named Executive Officer(1) | Earned PSUs (# of units)(2) | | Hayden Brown | 237,600 |

  118. Certification of 2023 PSU Performance

    | (1) Mr. Gilpin forfeited his 2023 PSU awards in connection with the termination of his employment on June 30, 2023. | | (2) The Earned PSUs vested 25% on February 18, 2023 and 1/16th of the Earned PSUs shall vest on each quarterly anniversary thereafter. |

  119. Certification of 2023 PSU Performance

    | 66 | 2024 Proxy Statement | |

  120. Certification of 2023 PSU Performance

    2024 Equity Award Refinements In a continuing effort to align our executive compensation program with our evolving business strategy over time and to be responsive to stockholders’ feedback that encouraged the use of multi-year performance metrics, we have adjusted the structure for our 2024 PSU awards granted under our long-term incentive program. In 2024, we have granted PSU awards that will measure year-over-year revenue growth percentage and annual adjusted EBITDA margin percentage in each of 2025 and 2026 against goals set by the compensation committee at the time of grant, with up to 50% of the maximum number of PSUs granted in 2024 vesting based on performance in each of the performance periods, subject to the recipient’s continued service to our company through the applicable vesting date. The year 2024 is not a measurement period for the PSUs granted in 2024, reflecting our continued transition in PSU program design. The compensation committee believes that revenue growth percentage and adjusted EBITDA margin percentage are important factors in long-term stockholder value creation as taken together they hold our executive officers accountable for driving sustainable growth, balancing increases in revenues with associated increases in costs. We believe these awards will create a strong incentive to deliver consistent growth at a profitable level that aligns with our strategic focus and supports long-term stockholder value creation. See “—Executive Summary—Executive Compensation Program Progression and Stockholder Engagement” above for more information. 2021 CEO Performance Award In January 2021, the compensation committee granted our CEO an option to purchase up to 1,500,000 shares of our common stock at a per share exercise price of $38.80, which we refer to as the CEO Performance Award. Vesting of the CEO Performance Award is subject to both (i) the achievement of certain pre-established per share stock price targets and (ii) a four-year service-based vesting requirement. For a detailed analysis of the reasons for and terms and conditions of the CEO Performance Award, see our definitive proxy statement filed with the SEC on April 19, 2022 in the section entitled “Compensation Discussion and Analysis—Long-Term Incentive Compensation—Chief Executive Officer Performance Award.” The performance-based vesting requirement of the CEO Performance Award requires the achievement of highly rigorous stock price thresholds based on a 90-day volume-based weighted average price, starting at $60 per share. As of December 31, 2023, none of these stock price thresholds had been met, and no portion of the CEO Performance Award had been earned or vested. The last 90-day measurement period ends on April 18, 2026.

  121. Certification of 2023 PSU Performance

    | CEO Performance Award | Number of Shares | | Unvested at December 31, 2023 | 1,500,000 | | Granted | — | | Vested (or Earned) | — | | Unvested at December 31, 2022 | 1,500,000 | | Granted | — | | Vested (or Earned) | — | | Unvested at December 31, 2021 | 1,500,000 | | Granted | — | | Vested (or Earned) | — | | Granted at January 18, 2021 | 1,500,000 |

  122. Certification of 2023 PSU Performance

    | | 2024 Proxy Statement | 67 |

  123. Certification of 2023 PSU Performance

    Other Compensation Elements Health and Welfare Benefits Our Named Executive Officers are eligible to participate in the same employee benefit plans, and generally on the same terms and conditions, as all other U.S. full-time employees. These benefits include medical, dental, and vision insurance, business travel insurance, an employee assistance program, mental health benefits, health and dependent care flexible spending accounts, basic life insurance, accidental death and dismemberment insurance, short-term and long-term disability insurance, commuter benefits, and reimbursement for mobile phone coverage. We also sponsor a Section 401(k) retirement plan, which we refer to as the Section 401(k) Plan, that provides eligible employees, including our Named Executive Officers, with an opportunity to save for retirement on a tax-advantaged basis. U.S. employees who have attained at least 18 years of age are generally eligible to participate in the Section 401(k) Plan as of the first day of the calendar month. Participants may make pre-tax or post-tax contributions to the Section 401(k) Plan, subject to the statutorily prescribed annual limits on contributions under the Internal Revenue Code, which we refer to as the Code. Currently, we match 50% of a participant’s contributions to the Section 401(k) Plan in cash, subject to an annual maximum limit of $5,000 per employee. An employee’s interest in our match of a participant’s contributions is 100% vested after one year of service. An employee’s interest in his or her pre-tax or post-tax deferrals is 100% vested when contributed. We design and adjust our employee benefits programs to be affordable and competitive in relation to the market as well as compliant with applicable laws and practices. Perquisites and Other Personal Benefits Currently, we do not view perquisites or other personal benefits as a significant component of our executive compensation program. Accordingly, we do not provide significant perquisites or other personal benefits to our Named Executive Officers except as generally made available to our employees or in situations where we believe it is appropriate to assist an individual in the performance of his or her duties, to make him or her more efficient and effective, and for recruitment and retention purposes. During 2023, none of our Named Executive Officers received perquisites or other personal benefits that were, in the aggregate, equal to $10,000 or more for any individual, except our CEO for whom we established a personal cybersecurity program for which we incurred costs of $29,750, which includes a $14,750 gross up for taxes payable as a result of the cybersecurity services. The personal cybersecurity program for our CEO provides cybersecurity awareness training and personal cybersecurity services. This security program is not limited to providing security services at business facilities and includes providing cybersecurity services at her residence and for personal devices. We do not consider any of these security services to be a personal benefit, but rather, reasonable and necessary expenses that directly result from her role as our CEO, and we believe these cybersecurity costs are reasonable and for our and our stockholders’ benefit. Employment Arrangements We entered into written employment offer letters with each of our Named Executive Officers when they joined us, which employment offer letters were amended and restated in May 2018 in the case of Ms. Brown and Mr. Gilpin. Subsequently, Ms. Brown executed an addendum to her amended and restated employment offer letter to reflect her promotion to Chief Marketing and Product Officer effective April 1, 2019, and thereafter entered into an amended and restated offer letter dated December 8, 2019, to reflect the terms of her employment as our President and CEO effective January 1, 2020. Collectively, these amended and restated offer letters of our Named Executive Officers are referred to in this section as the Offer Letters. We believe that these arrangements were necessary to secure the continued service of these individuals in a highly competitive job market. Each of these Offer Letters provides for “at will” employment (meaning that either we or the Named Executive Officer may terminate the employment relationship at any time with or without cause and with or without notice) and generally sets forth the Named Executive Officer’s then-current annual base salary, an indication of eligibility for participation in our annual performance bonus plan (or separate sales compensation plan in the case of Mr. Gilpin), and eligibility to participate in our employee benefit plans, including our health insurance plan and disability insurance plan, as established from time to time. These Offer Letters also provide that each Named Executive Officer will be eligible to enter into a change in control and severance agreement, which we refer to as a Severance Agreement, based on his or her position within our company. These agreements specify the severance payments and benefits that he or she will be eligible to receive in connection with certain terminations of employment from our company. These post-employment compensation arrangements are discussed in “—Post-Employment Compensation” and “—Potential Payments upon Termination or Change in Control” below.

  124. Certification of 2023 PSU Performance

    | 68 | 2024 Proxy Statement | |

  125. Certification of 2023 PSU Performance

    In addition, each of our Named Executive Officers executed our standard confidential information and invention assignment agreement and employee dispute resolution agreement upon the commencement of their employment.

  126. Post-Employment Compensation

    Post-Employment Compensation We have entered into a Severance Agreement with each of our Named Executive Officers, which provides for certain protections in the event of certain involuntary terminations of employment, including a termination of employment in connection with a change in control of our company, in exchange for a general release of claims and compliance with a non-disparagement covenant for a period of 24 months following separation from us. Each Severance Agreement is in effect for three years, with automatic renewals for new three-year periods unless notice is given by us to the Named Executive Officer three months prior to the date on which the agreement would otherwise renew. We believe these Severance Agreements provide reasonable compensation in the form of severance pay and certain limited benefits to the Named Executive Officer if his or her employment with us is terminated under certain circumstances to facilitate his or her transition to new employment. Further, we seek to mitigate any potential employer liability and avoid future disputes or litigation by requiring a departing Named Executive Officer to sign a separation and release agreement in a form prescribed by us providing for a general release of all claims as a condition to receiving post-employment compensation payments or benefits. We believe that these agreements help maintain our Named Executive Officers’ continued focus on their assigned duties to maximize stockholder value if there is a potential change in control transaction and mitigate the risk of subsequent disputes or litigation. The terms and conditions of these agreements were approved by our board of directors after an analysis of competitive market data in consultation with the compensation committee’s compensation consultant and are periodically reassessed to confirm that they remain appropriate as compared against competitive market practices. Under the Severance Agreements, all payments and benefits in the event of a change in control of our company are payable only if there is a connected loss of employment by a Named Executive Officer (a so-called “double-trigger” arrangement). We use this double-trigger arrangement to protect against the loss of retention value following a change in control and to avoid windfalls, both of which could occur if vesting of either equity or cash-based awards accelerated automatically as a result of the transaction alone. In the event of a change in control of our company, to the extent Section 280G or 4999 of the Code is applicable to a Named Executive Officer, such individual is entitled to receive either a:

  127. Post-Employment Compensation

    Mr. Gilpin’s outstanding equity awards continued to vest through his last date of employment, and the portion that was unvested at such time was forfeited upon the termination of his employment. Confidentiality, Non-Competition, and Non-Solicitation Agreements Our Named Executive Officers have each entered into agreements containing confidentiality, non-competition, and non-solicitation covenants. Under these agreements, our Named Executive Officers have agreed to refrain from (i) disclosing our proprietary information in perpetuity, (ii) competing with us or soliciting our clients or customers during the period of their employment, and (iii) soliciting our employees or consultants for a period of 12 months following the termination of their employment (to the extent permitted by applicable law). Other Compensation Policies Stock Ownership Guidelines We have adopted Stock Ownership Guidelines designed to encourage our executive officers and members of our board of directors to achieve and maintain a meaningful ownership stake in our company, thereby aligning their interests with those of our stockholders and promoting a long-term perspective in their management of our company. Our executive officers and the members of our board of directors are expected to accumulate shares of our common stock toward target ownership levels that are based on a multiple of their respective base salary or annual retainer, as the case may be. Shares underlying unexercised or unvested equity awards are not considered owned for purposes of the Stock Ownership Guidelines. Currently, the market value of the qualifying shares that each executive officer or member of our board of directors is required to own is as follows:

  128. Post-Employment Compensation

    The minimum level of ownership is expected to be achieved within five years of the date the applicable individual becomes covered by the Stock Ownership Guidelines, and each such individual is expected to continuously hold a sufficient number of shares of our common stock to satisfy the ownership level thereafter for the duration the individual is covered by the Stock Ownership Guidelines. Compliance is evaluated by the compensation committee annually, as of fiscal year-end. If, following the compliance deadline, an individual covered by the Stock Ownership Guidelines has not satisfied the applicable ownership level called for by the Stock Ownership Guidelines, then he or she must retain ownership of shares based on a retention ratio that is equal to 50% of the “net profit shares” as follows: each time he or she exercises a stock option, vests in a restricted stock award, or has an RSU award settled for shares of our common stock, he or she is expected to retain 50% of the shares remaining after payment of the option exercise price and taxes owed upon exercise, 50% of the newly vested shares of restricted stock after the payment of applicable taxes, and 50% of the shares received on settlement of the RSU award after the payment of applicable taxes, in each case until the ownership level required by the Stock Ownership Guidelines is met.

  129. Post-Employment Compensation

    As of December 31, 2023, each of our executive officers, including our Named Executive Officers, and the non-employee members of our board of directors was either in compliance with the applicable ownership levels required by the Stock Ownership Guidelines or had not been covered by the Stock Ownership Guidelines for five years. Clawback Policy We maintain a compensation recovery policy, which we refer to as our Clawback Policy, covering (i) our executive officers and all employees who are officers for purposes of Section 16 of the Exchange Act, including current and former executive officers and Section 16 officers, each of whom we refer to as a Covered Executive, and (ii) each of our employees that has been granted one or more performance stock unit(s), each of which we refer to as a Covered PSU Recipient. Mandatory Clawback In accordance with SEC and Nasdaq rules, if it is determined that we are required to prepare an accounting restatement due to our material noncompliance with any financial reporting requirement under the securities laws (including any required accounting restatement to correct an error in previously issued financial statements that is not material to the previously issued financial statements but that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period), our Clawback Policy provides that our compensation committee must require that each Covered Executive reimburse or forfeit to us the amount of incentive-based compensation received during the three most recently completed fiscal years, which we refer to as a Clawback Period, that exceeds the amount of incentive-based compensation such Covered Executive would have received had the original grant or payment of incentive-based compensation been determined based on the restated financial results. Incentive-based compensation includes any compensation that is granted, earned, or vested based wholly or in part on the attainment of any financial reporting measure. Discretionary Clawback In addition to the mandatory clawback required by SEC and Nasdaq rules, our Clawback Policy provides our compensation committee the authority to recoup additional compensation from Covered Executives in certain circumstances, as well as compensation from Covered PSU Recipients. If our compensation committee determines that a Covered Executive or Covered PSU Recipient engaged in fraud or intentional misconduct that materially contributed to the requirement to prepare an accounting restatement, the compensation committee may require such Covered Executive or Covered PSU Recipient to reimburse or forfeit to us up to 100% of any incentive-based compensation and up to 100% of any other grant or award under our 2018 Plan received during the applicable Clawback Period. The compensation committee may exercise this discretionary authority even if a Covered Executive’s or Covered PSU Recipient’s fraud or intentional misconduct did not result in an award or payment greater than that which would have been awarded absent the violation. Our prior compensation recoupment policy applies with respect to incentive-based compensation received prior to October 2, 2023, the effective date of the Nasdaq listing rules applicable to compensation recoupment. For a description of this policy, see “Executive Compensation—Other Compensation Policies—Clawback Policy” in our 2023 proxy statement filed with the SEC on April 28, 2023. Hedging, Derivative Securities Transactions, Short Selling, and Pledging Our Insider Trading Policy provides that covered persons, including the members of our board of directors, our executive officers, and other employees and independent contractors who have been identified as having regular access to material nonpublic information about us in the ordinary course of their duties, may not:

  130. Post-Employment Compensation

    Rule 10b5-1 Plans Certain of our executive officers and non-employee directors have in the past adopted written plans that comply with the requirements of Rule 10b5-1 under the Exchange Act, known as Rule 10b5-1 plans, in which they have contracted with a broker to buy or sell shares of our common stock on a periodic basis. Under a Rule 10b5-1 plan, a broker executes trades pursuant to parameters established by the executive officer or non-employee director when entering into the plan, without further direction from them. The executive officer or non-employee director may amend or terminate the plan in specified circumstances. In 2023, we revised our Insider Trading Policy to ensure that Rule 10b5-1 plans entered into by our executive officers, non-employee directors, and other employees comply with the amendments to Rule 10b5-1 adopted by the SEC in December 2022. Tax and Accounting Considerations The compensation committee takes the applicable tax and accounting requirements into consideration in designing and overseeing our executive compensation program. Deductibility of Executive Compensation Section 162(m) of the Code disallows public companies a tax deduction for federal income tax purposes for remuneration in excess of $1 million paid to certain current and former executive officers who are “covered employees.” The Tax Cuts and Jobs Act of 2017 repealed exceptions to the deductibility limit that were previously available for “performance-based compensation,” including equity awards, effective for taxable years after December 31, 2017, subject to certain grandfathering rules. While the compensation committee considers the deductibility of awards as one factor in determining executive compensation, the compensation committee also looks at other factors in making its decisions, as noted above, and retains the flexibility to award compensation that it determines to be consistent with the goals of our executive compensation program even if the awards are not deductible by us for tax purposes. Further, no assurances can be given that any compensation paid by us will be deductible under Section 162(m) even if so intended. Accounting for Stock-Based Compensation The compensation committee considers accounting implications when designing compensation plans and arrangements for our executive officers and other employees. Chief among these is ASC 718, the standard that governs the accounting treatment of certain stock-based compensation. Among other things, ASC 718 requires us to record a compensation expense in our income statement for all equity awards granted to our executive officers and other employees. This compensation expense is based on the grant date “fair value” of the equity award and, in most cases, will be recognized ratably over the award’s requisite service period (which, generally, will correspond to the award’s vesting schedule). This compensation expense is also reported in the compensation tables below, even though recipients may never realize any value from their equity awards. Compensation Risk Considerations The compensation committee, with the assistance of its compensation consultant, periodically reviews our various compensation programs and related policies and practices and believes that the mix and design of the elements of such programs do not encourage our employees, including our executive officers, to take, or reward our employees for taking, inappropriate or excessive risks and accordingly are not reasonably likely to have a material adverse effect on us. In particular, in conducting our review, we consider compensation program attributes that help to mitigate risk, including:

  131. Post-Employment Compensation

    | ● | the mix of cash and equity compensation; |

  132. Post-Employment Compensation

    | ● | the balance of short-term and long-term performance focus; |

  133. Post-Employment Compensation

    | ● | our annual bonus plans being subject to the achievement of financial performance metrics and offering upside leverage that is within reasonable market norms and provide for uncapped payouts. |

  134. Submitted by the Compensation Committee

    | Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($)(1) | Option Awards ($)(1) | Non-Equity Incentive Plan Compensation ($)(2) | All Other Compensation ($) | Total ($) | | Hayden Brown President and Chief Executive Officer | 2023 | 570,000 | — | 8,594,663 | — | 307,800 | 35,678(3) | 9,508,141 | | | 2022 | 550,000 | — | 7,455,075 | — | 462,000 | 7,652(4) | 8,474,727 | | | 2021 | 500,000 | — | 4,626,440 | 28,780,212(5) | 995,000 | 7,652(6) | 34,909,304 | | Erica Gessert Chief Financial Officer | 2023 | 375,833(7) | — | 4,950,000 | — | 183,467(7) | 5,619(8) | 5,514,919 | | Eric Gilpin Former Chief Sales Officer | 2023 | 214,240(9) | 30,813(10) | 937,600 | — | 49,801 | 220,358(11) | 1,452,812 | | | 2022 | 412,000 | — | 2,788,552 | — | 269,568 | 7,871(12) | 3,477,991 | | | 2021 | 365,000 | — | 593,087 | — | 520,739 | 7,775(13) | 1,486,601 |

  135. Submitted by the Compensation Committee

    | (1) Outstanding equity awards with a grant date prior to August 30, 2018, the date the 2018 Plan became effective, were granted under our 2014 Equity Incentive Plan, which we refer to as the 2014 Plan. Outstanding equity awards with a grant date after August 30, 2018, were granted under the 2018 Plan. The vesting of all awards is subject to continued service on each vesting date, in addition to any additional vesting terms described below. |

  136. Involuntary Terminations Outside a Change in Control

    | Pay Versus Performance | | | | | | | | | | | | | | | Value of Initial Fixed $100 Investment Based on: | | | | | Year(1) | Summary Compensation Table Total for PEO(2) ($) | Compensation Actually Paid to PEO(3) ($) | Average Summary Compensation Table Total for Non-PEO NEOs(2) ($) | Average Compensation Actually Paid to Non-PEO NEOs(4) ($) | Upwork Total Stockholder Return(5) ($) | Peer Group Total Stockholder Return(6) ($) | Net Income (Loss)(7) ($ in thousands) | Company- Selected Measure: Compensation Program Revenue(8) ($ in thousands) | | 2023 | 9,508,141 | 13,594,420 | 3,483,866 | 4,257,285 | 139 | 176 | 46,887 | 651,320 | | 2022 | 8,474,727 | (25,586,673) | 4,573,989 | (3,208,187) | 98 | 108 | (89,885) | 580,569 | | 2021 | 34,909,304 | 29,693,025 | 2,116,323 | 1,991,129 | 320 | 178 | (56,240) | 470,926 | | 2020 | 848,412 | 25,983,464 | 2,441,919 | 4,223,757 | 324 | 140 | (22,867) | 344,924 |

  137. Tabular List of Financial Performance Measures for 2023

    | ● | The CEO Pay Ratio was 41 to 1. This ratio is a reasonable estimate calculated in a manner consistent with SEC rules. |