DEF 14A of Par Technology Corp
Filed Apr 23, 2024 · FY20230001140361-24-021362
PROPOSAL 1 – ELECTION OF DIRECTORS
PROPOSAL 1 – ELECTION OF DIRECTORS PAR’s Board of Directors is set at seven (7) directors. At the Annual Meeting shareholders will vote on the seven (7) director nominees named below to serve until the 2025 annual meeting of shareholders and until his or her successor is duly elected and qualified or, earlier, until his or her death, resignation, or removal. All director nominees have been nominated by the Board based on the recommendation of the Nominating and Corporate Governance Committee. The Board has no reason to believe that any of the director nominees are unable or unwilling to serve, and each director nominee has consented to be named in this proxy statement and to serve if elected. Each director nominee is currently serving as a director of the Company and each director nominee was elected by our shareholders at the 2023 annual meeting of shareholders other than Linda M. Crawford who was appointed to the Board effective December 5, 2023. As reflected in the biographies of the director nominees below, our directors bring a diverse mix of highly relevant and complementary skills, experiences, and backgrounds, which facilitates strong oversight of PAR’s management and strategy.
Directors Nominees
Directors Nominees The following provides summary information about the Company’s directors, who are also the director nominees.
Directors Nominees
| | | | | Board Committees | | | | Name | Age | Director Since | Independent* | Audit | Comp | NCG | | LINDA M. CRAWFORD | 60 | 2023 | | | | | | KEITH E. PASCAL | 59 | 2021 | | | | | | DOUGLAS G. RAUCH | 72 | 2017 | | • | • | | | CYNTHIA A. RUSSO | 54 | 2015 | | | • | • | | NARINDER SINGH | 50 | 2021 | | | • | • | | SAVNEET SINGH Chief Executive Officer and President, PAR Technology Corporation | 40 | 2018 | | | | | | JAMES C. STOFFEL | 78 | 2017 | | • | | • |
Directors Nominees
| | Committee Chair | Audit: | Audit Committee | NCG: | Nominating and Corporate Governance Committee | | • | Committee Member | Comp: | Compensation Committee | | |
Directors Nominees
| * Independence is determined by the listing standards of the New York Stock Exchange (NYSE) and our Corporate Governance Guidelines. |
Directors Nominees
| + | Audit Committee Financial Expert. |
Directors Nominees
| | The Board of Directors unanimously recommends a vote FOR the election to the Board of each director nominee. |
Directors Nominees
| Savneet Singh Director Since: 2018 Age: 40 CEO and President, PAR Technology Corporation Committee Memberships: • None | Business and Other Experience Mr. Singh joined the Company’s Board of Directors in April 2018 and has served as the Chief Executive Officer and President of the Company and President of ParTech, Inc. since March 2019. Mr. Singh previously served as the Interim Chief Executive Officer and President of the Company and Interim President of ParTech, Inc. from December 2018 until March 2019. Since June 2018, Mr. Singh has been a partner of CoVenture, LLC, a multi-asset manager with funds in venture capital, direct lending, and crypto currency. From 2017 to 2018, Mr. Singh served as the managing partner of Tera-Holdings, LLC, a holding company of niche software businesses that he co-founded. In 2009, Mr. Singh co-founded GBI, LLC (f/k/a Gold Bullion International, LLC (GBI)), an electronic platform that allows investors to buy, trade and store physical precious metals. During his tenure at GBI, from 2009 to 2017, Mr. Singh served as GBI’s chief operating officer, its chief executive officer, and its president. Key Qualifications As an entrepreneur, investor and board member of public companies, Mr. Singh brings unique insight and a strategic perspective to the Company’s business and strategies. Other Public Company Boards Current: None Prior: • CDON AB (NASDAQ Nordic: CDON) • Blockchain Power Trust (TSXV: BPWR.UN; TEP.DB) • Sharp Spring, Inc. (NASDAQ: SHSP) • Osprey Technology Acquisition Corp. (NYSE: SFTW.U) |
Directors Nominees
| Linda M. Crawford Director Since: 2023 Age: 60 Independent Committee Memberships: • None * | Business and Other Experience Ms. Crawford has served as a director since December 2023, She currently acts as an advisor to several venture backed companies (since March 2022) and serves on the Board of directors of Verint Systems Inc., a provider of customer engagement solutions, and Equilar, an information services firm with products focused on compensation. She retired from her position as CEO of Helpshift, Inc., a company focused on AI driven customer support solutions for B2C companies, in 2020 following her appointment to that role in 2017. She also served as the Chief Customer Officer of Optimizely, Inc., a SaaS company focused on customer experience, from 2016 to 2017. Prior to Optimizely, Ms. Crawford spent nearly a decade at Salesforce in several executive positions, including Executive Vice President and Chief Executive Officer of the Sales Cloud Products division. Prior to Salesforce, Ms. Crawford held executive positions at Siebel Systems, the company credited for creating the CRM industry. Ms Crawford served as a director of ChannelAdvisor Corporation from 2021 to 2022 and previously served on the board of Demandware, Inc., a software technology company providing cloud-based unified e-commerce solutions to retailers, which was acquired by Salesforce in 2016. Key Qualifications The Board has concluded that Ms. Crawford’s extensive experience in key executive positions at leading software companies, including those offering AI and cloud-based solutions, driving innovation, employee and customer success gives her the qualifications and skills to serve as a director. Other Public Company Boards Current: Verint Systems Inc. (Nasdaq: VRNT) Prior: • ChannelAdvisor Corporation (NYSE: ECOM) • Demandware, Inc. (NYSE: DWRE) | | * Ms. Crawford’s committee assignments will be determined following the Annual Meeting. | |
Directors Nominees
| Keith E. Pascal Director Since: 2021 Age: 59 Independent Committee Memberships: • None | Business and Other Experience Mr. Pascal has served as Vice President and Secretary of Act III Holdings, LLC, a Boston-based investment fund and of Act III Management LLC, a service company to the restaurant, hospitality, and entertainment industries since March 2018. In addition, Mr. Pascal is the Founder, and since 2008 has served as President of 12:51:58 MW LLC, a provider of an enterprise software platform for global restaurant and retail operators. From January 2015 to March 2018, Mr. Pascal worked for Panera Bread, a chain store of bakery-café fast casual restaurants, where he served as a consultant and was named Chief Concept Officer in November 2017. Mr. Pascal served as CEO of Goji, a developer of high-tech cooking technology, from 2010 to 2012, as the CEO of Torex Retail PLC Hospitality Division from 2006 to 2008, and is the Founder and served as CEO of Savista, a point-of-sale software and business process outsourcing company serving the global restaurant industry, from 1999 to 2006. Mr. Pascal started his career in operations at McDonald’s Corp. Key Qualifications Mr. Pascal brings to the Board over 30 years of restaurant operations experience and senior leadership experience, with both private and public national restaurant chains, and significant experience in the restaurant industry, as both an investor and as a director. He offers valuable financial expertise and public company governance experience as a member of the board of another public company. Other Public Company Boards Current: None Prior: BJ’s Restaurants, Inc. (NASDAQ: BJRI) |
Directors Nominees
| Douglas G. Rauch Director Since: 2017 Age: 72 Independent Committee Memberships: • Nominating and Corporate Governance (Chair) • Audit • Compensation | Business and Other Experience Mr. Rauch spent 31 years with Trader Joe’s Company, a national chain of neighborhood grocery stores, the last 14 years as a President until his retirement in June 2008. Since June 2015, Mr. Rauch has served as the Founder/President of Daily Table, an innovative non-profit retail solution to bring affordable nutrition to the food insecure in Boston’s inner city. He previously served as CEO of Conscious Capitalism, Inc., a nonprofit organization, from August 2011 to July 2017, where he continues to serve as director emeritus. Since February 2020, Mr. Rauch has served as a director of Sprouts Farmers Market, Inc., a grocery store offering affordable, fresh, natural and organic products, where he serves as the Chair of the Audit Committee. From October 2009 to October 2019, Mr. Rauch served as a trustee at the Olin College of Engineering and he serves as a director or as an advisory board member of several for profit and non-profit companies. Key Qualifications Mr. Rauch brings to the Board extensive knowledge and operational experience in the food service/grocery industry and brings important insights and perspectives on technology solutions to the restaurant and retail space. He has created and led the implementation of key business operational strategies, and offers valuable financial expertise and senior leadership experience, including a strong understanding of employee health and culture issues. He also brings public company governance experience as a member of the board and board committee of another public company. Other Public Company Boards Current: Sprouts Farmers Market, Inc. (NASDAQ: SFM) Prior: None |
Directors Nominees
| Cynthia A. Russo Director Since: 2015 Age: 54 Independent Committee Memberships: • Audit (Chair) • Compensation • Nominating and Corporate Governance | Business and Other Experience Ms. Russo has more than 25 years’ experience in financial and operations management with global, growth technology companies. Since June 2019, Ms. Russo has served as a director of Verra Mobility Corporation, a provider of smart mobility technology solutions and services throughout the United States, Australia, Canada and Europe, where she serves on the Audit and Compensation Committees. Ms. Russo is also a director of Verifone, Inc., a world leader in payment and commerce solutions, where she serves as the Audit Committee Chair. Ms. Russo currently serves as CFO Operating Partner for K1 Investment Management at two of their portfolio companies: Canvas Solutions, Inc. (GoCanvas), a global SaaS provider of field operations and inspections solutions, since September 2023, and SimPRO Holdings, Inc. (Simpro), a global SaaS business providing field service management solutions, since November 2023. Ms. Russo served as a director and Chair of the Audit Committee of UserTesting, Inc., an on-demand human insight platform that enables organizations to deliver a better customer experience, from 2021 to January 2023, when it was sold to Thoma Bravo and Sunstone Partners. From March 2021 to September 2022, Ms. Russo served as Interim Chief Financial Officer of Optoro, Inc., an end-to-end reverse logistics technology solution for all stages of a returns lifecycle. Ms. Russo previously served as Executive Vice President and Chief Financial Officer of Cvent, Inc. (NASDAQ: CVT), a cloud-based enterprise event management platform, from September 2015 to September 2018. Prior to that, Ms. Russo served as Executive Vice President and CFO of MICROS Systems, Inc., a global, public enterprise information system software, hardware and services company for retail and hospitality industries (NASDAQ: MCRS). During her 19 years at MICROS, Ms. Russo served in a variety of senior financial roles until MICROS Systems’ acquisition by Oracle in September 2014. Key Qualifications Ms. Russo’s more than 30-year career as a certified public accountant provides the Board substantial knowledge regarding financial and risk management matters, including cybersecurity risks, as well as valuable operational and senior leadership expertise. She brings public company governance experience as a member of boards and board committees of other public companies. She is a certified public accountant and certified internal auditor. Other Public Company Boards Current: Verra Mobility Corporation (NASDAQ: VRRM) Prior: UserTesting, Inc. (NYSE: USER) |
Directors Nominees
| Narinder Singh Director Since: 2021 Age: 50 Independent Committee Memberships: • Compensation • Nominating and Corporate Governance | Business and Other Experience Mr. Singh is the Co-founder of LookDeep Inc., and has served as its Chief Executive Officer since March 2019. Mr. Singh is also a Co-founder, and he served as a director of Appirio Inc., a leader in delivering cloud innovation to companies through emerging technologies, from September 2006 until its acquisition by Wipro Limited in November of 2016. At Appirio, Mr. Singh also served as President and Chief Strategy Officer of Topcoder, a division of Appirio and a crowdsourcing design, development, and data science community with more than one million members. Prior to working at Appirio, Mr. Singh worked at SAP SE in the Office of the CEO as a part of the Corporate Strategy Group from July 2004 to September 2006. While at SAP SE, Mr. Singh led initiatives on sales, maintenance, and competitive strategies. From November 1998 to March 2004, Mr. Singh led research and development, sales, and marketing activity as Vice President and General Manager at webMethods focusing on integration, BPM/workflow technologies. Mr. Singh began his career with Accenture (NYSE:ACN) in September 1995 at its Center for Strategic Technology and worked there until November 1998. Mr. Singh holds a Bachelor of Science from Northwestern University, an MBA from the Wharton School of Business and a Masters in Translation Medicine from University of California, San Francisco and Berkley. Mr. Singh also serves on the board of directors of the Sikh Coalition, a not-for-profit association. Key Qualifications Mr. Singh brings to the Board significant leadership experience in the technology industry, including experience with software development and the execution of go-to-market strategies. He has been recognized for his leadership by the New York Times, and was named one of San Francisco Business Times 40 under 40. Mr. Singh has appeared on CNN, C-Span, and the Daily Show to discuss topics ranging from immigration policy, job creation, and inclusion in the aftermath of mass violence, he represented Appirio at the World Economic Forum, and he has testified before the U.S. House of Representatives, Science Committee on innovation. Mr. Singh brings financial expertise and a strong understanding of the issues facing both mature and start-up companies. He has valuable experience in addressing a variety of complex issues ranging from corporate strategy, organizational structure, governance, transformational change, operational performance improvement, and acquisition integration. Other Public Company Boards Current: None Prior: None |
Directors Nominees
| James C. Stoffel Director Since: 2017 Chairman Since: 2023 Lead Director: 2020-2023 Age: 78 Independent Committee Memberships: • Compensation (Chair) • Audit • Nominating and Corporate Governance | Business and Other Experience Since 2006 Mr. Stoffel has been a senior advisor to private equity and board member of multiple public companies. From 2011 to 2019 he also served as Co-Founding General Partner of Trillium International, a private equity firm focused on growth equity investments in technology companies. From 1997 to 2005, Mr. Stoffel held various senior executive positions at Eastman Kodak Company, including as Senior Vice President, Chief Technical Officer; director of Research and Development; and Vice President, director Electronic Imaging Products Research and Development. Prior to Eastman Kodak Company, Mr. Stoffel had a 20-year career with Xerox Corporation, serving as Vice President of Corporate Research and Technology; Vice President and General Manager of Advanced Imaging Business Unit; Vice President and Chief Engineer; and other executive positions. Mr. Stoffel served on the board of directors of Aviat Networks, Inc. from 2007 to 2023, where he chaired the Compensation Committee and served as the lead independent director from July 2010 to February 2015. From 2003 until his retirement in October 2018, Mr. Stoffel served on the board of directors of Harris Corporation (now L3 Harris Technologies, Inc.). Key Qualifications Mr. Stoffel brings to the Board extensive senior leadership experience, and more than 25-years of technology expertise. Mr. Stoffel’s financial, investment and capital markets expertise and insight, and his extensive public company board experience, provides the Board with valuable perspectives, capabilities, and knowledge critical to strategy, management, and corporate governance. Other Public Company Boards Current: None Prior: • Aviat Networks, Inc. (NASDAQ: AVNW) • Harris Corporation (NYSE: HRS, now L3 Harris Technologies, Inc. (NYSE: LHX)) |
DIRECTOR COMPENSATION
DIRECTOR COMPENSATION
2023 Director Compensation
2023 Director Compensation Compensation for our non-employee directors in 2023 consisted of a mix of cash and equity. In June 2023, the Compensation Committee was provided with an analysis of non-employee director compensation, including a review of director compensation of the Company’s peer group. The peer group of companies consisted of the same comparator group used to evaluate executive compensation and is described below in “Compensation Discussion and Analysis – Market Data and Considerations for Determining NEO Pay.” Based on the Director Compensation Report, which included pay positioning relative to the market using PAR’s peer group, the Compensation Committee recommended to the Board of Directors that it consider adjustments to the compensation structure for non-employee directors to become closer to the 50th percentile of the Company’s peer group. Based on the Compensation Committee’s recommendation, the Board resolved to increase the equity retainer of our non-employee directors, effective June 1, 2023.
2023 Director Compensation
| Position | Director Compensation effective June 1, 2023 | | Cash Compensation | | | Director | $40,000 | | Chairman* | $18,000 | | Audit Committee, Chair | $20,000 | | Audit Committee, Member | $10,000 | | Compensation Committee, Chair | $15,000 | | Compensation Committee, Member | $7,500 | | Nominating & Corporate Governance Committee, Chair | $10,000 | | Nominating & Corporate Governance Committee, Member | $5,000 | | Annual Equity Compensation (grant date fair value) | $175,000 |
2023 Director Compensation
| * As of June 1, 2023, the role of Lead Independent Director was eliminated and replaced with the role of an independent Chairman. |
2023 Director Compensation
Cash retainers are paid to our non-employee directors in arrears. Our non-employee directors do not receive additional fees for Board or committee meeting attendance. However, we do reimburse our non-employee directors for reasonable expenses incurred to attend Board and committee meetings. Each non-employee director received an annual award of restricted stock units having a grant date fair value of $175,000. The number of shares subject to each non-employee director’s 2023 annual grant was based on the closing price of our common stock on June 1, 2023 ($34.31), the grant date, which resulted in a grant of 5,100 time vesting restricted stock units (“RSUs”). These restricted stock units vest on the earlier of either June 1, 2024 or the date of the Annual Meeting, subject to continued service through that date. The 2023 grants were made under the 2015 Equity Incentive Plan. The 2023 compensation earned by or paid to our non-employee directors was as follows:
2023 Director Compensation
| Name of Director | Fees Earned or Paid in Cash ($)(1) | Stock Awards ($)(2) | Total ($) | | Linda M. Crawford | 2,935 | — | 2,935 | | Keith E. Pascal | 40,000 | 174,981 | 214,981 | | Douglas G. Rauch | 67,500 | 174,981 | 242,481 | | Cynthia A. Russo | 72,500 | 174,981 | 247,481 | | Narinder Singh | 52,500 | 174,981 | 227,481 | | James C. Stoffel | 88,000 | 174,981 | 262,981 |
2023 Director Compensation
| (1) Compensation is prorated for the number of days served on the Board and, as applicable, service in any particular role or on any particular committee. |
2023 Director Compensation
| (2) This column includes the aggregate grant date fair value computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 (FASB ASC Topic 718) with respect to stock awards made to non-employee directors in 2023. The methodologies used in the valuation of the RSUs are discussed in Note 11 to the Company’s Consolidated Financial Statements included in the 2023 Annual Report. Each non-employee director had 5,100 unvested restricted stock units outstanding at December 31, 2023 with the grant date fair value set forth in this column. |
Compensation Discussion and Analysis
| • | Pay-for-Performance. The majority of executive compensation is variable and comes from our performance-based short-term cash incentive (“STI”) and long-term equity incentive (“LTI”) programs. The STI and LTI programs are structured to create strong ties between compensation and performance. STI bonuses are tied to the achievement of performance targets linked to established financial measures and behaviors that reinforce our core values of ownership, focus, speed and winning together. LTI awards seek to incentivize better shareholder value over time. |
Compensation Discussion and Analysis
| • | Competitive Compensation. We provide compensation opportunities that are competitive with the compensation levels and practices of our peers. However, we do not target any specific percentile relative to the compensation of our peers or other market data. Instead, we seek to attract, retain and incentivize top performers in a highly competitive global market for talent by aligning their interests with the interests of our shareholders. |
Compensation Discussion and Analysis
Role of the Compensation Committee and CEO The Compensation Committee establishes and approves the annual compensation and pay elements of our NEOs and certain other senior officers. Our CEO partners with the Compensation Committee to set performance priorities, establish target compensation ranges, and assess the performance of our other NEOs (based on market data and other insight provided by our compensation consultant (described below)). Our CEO does not make recommendations regarding his own compensation. At least annually, the Compensation Committee: reviews and approves corporate goals and objectives relevant to the compensation of our CEO; evaluates our CEO’s performance in light of those goals and objectives; and, based on this evaluation, determines and approves our CEO’s compensation, (including its cash and equity incentive components). In determining the incentive components of our CEO’s compensation, the Committee considers: the Company’s performance and relative shareholder return; the value of similar incentive awards to chief executive officers at comparable companies; awards that have been given historically to the Company’s CEO; and the recommendations of our compensation consultant (discussed below). Role of the Compensation Consultant The Compensation Committee engaged FW Cook as its independent compensation consultant to provide information and advice concerning executive compensation for 2023. FW Cook was asked to include an annual analysis of executive compensation compared to peer company practice and data. The Compensation Committee determined that FW Cook has the appropriate independence and necessary skills, knowledge, industry expertise, and experience to provide such services. FW Cook also had the necessary resources to provide a comprehensive approach to executive and non-employee director compensation analysis, planning and strategy. In late 2022, FW Cook conducted an executive compensation study and provided the Compensation Committee with an analysis of the Company’s executive compensation and program design for 2023. That analysis included peer group compensation data for our NEOs and analysis of other compensation matters as requested by the Compensation Committee. During 2023, the Compensation Committee, in conjunction with FW Cook and management, assessed our compensation policies and practices. Our Board and our Compensation Committee aim to structure our executive and non-executive compensation programs to incentivize the creation and preservation of shareholder value and discourage excessive or unnecessary risk taking. Considerations in the compensation risk assessment included: the balance between short-term and long-term incentives; the diversity of metrics used to assess performance and payouts under our incentive programs; capped incentive award payout opportunities; and the scope of our Clawback and Forfeiture Policy. Market Data and External Pay Considerations In its oversight of the compensation practices for our CEO and the other NEOs, the Compensation Committee reviews industry and peer compensation data specific to comparable technology companies to confirm that executive compensation is within an appropriate competitive range. The Compensation Committee considers this external pay comparison data as a market check on its compensation decisions but not for tying any component of our executive compensation to any specific level relative to our peers or other compensation data. With input from FW Cook, the Compensation Committee selected a peer group of 17 companies to guide its compensation decisions for 2023 executive compensation. The selected peer group adds seven companies and removes five companies compared to the prior year’s peer group and consists of the following companies:
Compensation Discussion and Analysis
| Peer Group | | | | Alteryx, Inc. | Big Commerce Holdings, Inc. | ChannelAdvisor Corporation | | Domo, Inc.(1) | E2open Parent Holdings, Inc. | Everbridge, Inc.(1) | | EVO Payments, Inc.(1) | Fastly, Inc. | Flywire Corporation(1) | | Harmonic, Inc.(1) | Olo, Inc.(1) | PagerDuty, Inc.(1) | | PROS Holdings, Inc. | SPS Commerce Inc. | Sumo Logic, Inc. | | Upland Software, Inc. | Zuora, Inc. | |
Compensation Discussion and Analysis
| (1) New addition to the peer group for 2023. All other companies were also in the 2022 peer group. |
Compensation Discussion and Analysis
The peer companies were selected by the Compensation Committee based primarily on maintaining a close balance of smaller and larger companies compared to the Company’s annual revenues and market capitalization. To achieve this goal, the Compensation Committee focused its search on peer companies with the following characteristics (based on information available at the time of selection in September 2022):
Compensation Discussion and Analysis
The Compensation Committee also considered FW Cook’s assessment of the strength of comparability relative to a variety of business characteristics, including headcount, operating cash flow, revenue growth, product offerings, end markets, market peer indices and length of time since an initial public offering. Furthermore, certain companies were excluded from consideration if they had a CEO who was also a founder or had unusual compensation programs without a normal annual grant cadence. The composition of the peer group is reviewed annually, with adjustments made as appropriate to maintain comparability and reflect any mergers, acquisitions or significant changes among the peer group companies. Five companies that were in the 2022 peer group were not selected for the 2023 peer group: Bottomline Technologies, Inc., QAD Inc., Shift4 Payments, Inc., American Software, Inc. and Agilysis, Inc. because the companies were either acquired or the Compensation Committee determined that their compensation practices were not as comparable as those of the peer group companies chosen. 2023 NEO Compensation Design The Compensation Committee’s actions with respect to our NEOs’ 2023 base salaries and STI and LTI awards (including performance targets and financial measures) reflect a deliberative process intended to ensure that the objectives of our compensation programs are based on pay-for-performance principles. Specifically, the STI and LTI programs seek to attract, retain, and reward top performers within competitive compensation ranges. Decisions regarding 2023 NEO compensation included consideration of each of our NEO’s individual experience, expertise, skills, responsibilities, commitment, and current and anticipated sustained contributions to the Company’s corporate goals and objectives. The 2023 NEO compensation decisions also considered prior compensation adjustments, prior award accumulation, contractual commitments (if any), and the competitiveness of our 2023 NEO compensation relative to market data. Base Salary. The Compensation Committee chose not to increase Mr. Singh’s base salary in 2023 and approved 4% base salary increases for the other NEOs. The salary levels and any corresponding increases were approved to maintain salaries at a competitive level for retention purposes and fairly match the NEO’s ability to perform his or her duties and responsibilities. In making these decisions, the Compensation Committee considered (i) the salary amount relative to peer group data, (ii) its subjective assessment of the NEO’s performance, experience, and breadth of responsibilities, and (iii) the recommendation of FW Cook. For 2023, our Compensation Committee set base salaries as follows:
Compensation Discussion and Analysis
| NEO | 2022 STI target as percentage of base salary | 2023 STI target as percentage of base salary | Percent Change | | Savneet Singh | 100% | 100% | — | | Bryan A. Menar | 50% | 65% | 30% | | Cathy A. King | 50% | 50% | — | | Raju Malhotra | 87.5% | 87.5% | — | | Michael D. Nelson | 40% | 40% | — |
Compensation Discussion and Analysis
At the beginning of 2023, the Compensation Committee reviewed the Company’s annual operating plan, selected financial measures and set STI performance targets. Following the end of 2023, the Compensation Committee determined management’s level of achievement measured against the established STI performance targets. The following tables set forth the performance targets for the NEO’s 2023 STI awards, actual results of the selected financial measures and payout percentages (as a percentage of the NEO’s base salary). Failure to achieve the threshold performance level would result in no STI award payout, and no additional payment would be made for performance exceeding the maximum performance level. For performance between the threshold and target performance levels or between the target and maximum performance levels, the payout percentage is interpolated between the levels on a straight-line basis. Mr. Singh’s performance targets and achievement levels for 2023 were:
Compensation Discussion and Analysis
| | Payout Percent | Relative Weight | Weighted Payout | | ARR | 98.70% | 50.00% | 49.35% | | Non-GAAP Adjusted EBITDA (Total Company) | 50.70% | 50.00% | 25.35% | | Combined Payout as a Percent of STI Target | | | 74.70% |
Compensation Discussion and Analysis
| | Payout Percent | Relative Weight | Weighted Payout | | ARR | 98.70% | 50.00% | 49.35% | | Non-GAAP Adjusted EBITDA (R/R Segment) | 62.50% | 50.00% | 31.25% | | Combined Payout as a Percent of STI Target | | | 80.60% |
Compensation Discussion and Analysis
| NEO | Base Salary | STI Target Percent of Base Salary | STI Target Amount | Payout as a Percent of STI Target Amount | STI Payout | | Savneet Singh | $620,000 | 100.0% | $620,000 | 74.7% | $463,140 | | Bryan A. Menar | $416,000 | 65.0% | $270,400 | 80.6% | $217,942 | | Cathy King | $416,000 | 50.0% | $208,000 | 80.6% | $167,648 | | Raju Malhotra | $416,000 | 87.5% | $364,000 | 80.6% | $293,384 | | Michael D. Nelson | $338,000 | 40.0% | $135,200 | 117.9% | $159,401 |
Compensation Discussion and Analysis
Performance targets presented in the preceding tables include adjustments approved by the Compensation Committee in June 2023 due to an unanticipated change in Company strategy related to the operations of MENU Technologies A.G. Citing that the change in strategy presented potential valuable long-term market opportunities, and recognizing the objectives of the selected 2023 financial measures to align the Company’s corporate goals and objectives on the most impactful drivers of shareholder return, the Compensation Committee reduced the ARR target by $2.0 million, setting the ARR target at a level more than 19% higher than achieved ARR in 2022, and reduced the Non-GAAP Adjusted EBITDA (R/R Segment) target by $2.8 million, noting the change in strategy triggered unexpected, non-recurring costs. Management’s ability to achieve the adjusted targets required extraordinary efforts, and actual results for 2023 fell short of these targets. The adjustments did not result in the payout of an STI award where no payment would have otherwise been made without adjustments to the targets. If the adjustments had not been made, the unmodified STI award payout would have been 45.7% of target for Messrs. Singh, Menar and Malhotra and Ms. King versus an actual payout at 74.7% to Mr. Singh and at 80.6% of target to Messrs. Menar and Malhotra and Ms. King. The adjustments did not impact the STI award payout for Mr. Nelson. Chief Product and Technology Officer Performance Incentive In 2023 Mr. Malhotra was eligible to earn a supplemental cash performance bonus of $1,000,000, subject to the achievement of a performance target established by the Compensation Committee for the performance period ending December 31, 2023. The performance target was ARR exceeding 15% of the forecasted amount, or $157 million of ARR. ARR for 2023 was $136.1 million, resulting in no payment to Mr. Malhotra. Long-Term Incentive Compensation We may grant equity awards, including stock options, restricted stock, and restricted stock units under the 2015 Equity Incentive Plan. The number of shares of our common stock subject to a LTI award is based on the LTI target amount and the closing price of our common stock on the date of grant. Pursuant to the terms of our Equity Grant Policy, the grant date of our annual LTI awards is the third full NYSE trading day following disclosure of our annual financial results for the prior fiscal year. Vesting of any performance-based awards is subject to the Compensation Committee’s certification that the applicable performance targets linked to the financial measures for the relevant performance period were achieved. The following LTI awards were granted to our NEOs in 2023:
Compensation Discussion and Analysis
| NEO | Time Vesting RSUs(1) | Performance Vesting RSUs(2) | | Savneet Singh | 72,585 | 108,877 | | Bryan A. Menar | 16,750 | — | | Cathy King | 16,750 | — | | Raju Malhotra | 41,876 | — | | Michael D. Nelson | 2,372 | — |
Compensation Discussion and Analysis
| (1) The time-vesting RSUs vest ratably in one-third increments on March 1, 2024, March 1, 2025 and March 1, 2026, subject to continued employment through the applicable vesting dates. |
Compensation Discussion and Analysis
| (2) The performance-vesting RSUs ratably vest over a three-year period, with three measurement periods. The three measurement periods all begin on January 1, 2023, and one measurement period ends on each of December 31, 2023, 2024 and 2025. |
Compensation Discussion and Analysis
CEO LTI Awards To closely align our CEO’s compensation with the interests of our shareholders and PAR’s business strategy, 60% of the CEO’s 2023 LTI award is performance-vesting RSUs (PRSUs). The PRSUs ratably vest over a three-year period with three equally weighted measurement periods. Each measurement period began on January 1, 2023. As illustrated below, the first measurement period ended on December 31, 2023 (i.e., one year), the second measurement period ends on December 31, 2024 (i.e., two years), and the third measurement period ends on December 31, 2025 (i.e., three years). PRSUs are earned based on relative TSR compared to the Information Technology sector of the Russell 2000 Index companies. The Compensation Committee chose three measurement periods to require continued TSR success during the entirety of the overall performance period in order to earn the full PRSU award.
Compensation Discussion and Analysis
| | Threshold | Target | Maximum | | Relative TSR Ranking Compared to Selected Comparators from the Russell 2000 Index (IT Sector Sub-Set) | 25th | 50th | 75th | | Percentage of Shares Earned | 50% | 100% | 200% |
Compensation Discussion and Analysis
| Total Target PRSUs granted | 108,877 | | First Performance Period Target Shares | 36,292 | | Relative TSR Ranking | 90th | | Actual Percentage of Shares Earned | 200% | | 2023 Earned PRSUs | 72,584 |
Compensation Discussion and Analysis
| | Threshold | Target | Maximum | Level of achievement | | Level of Achievement as a percent of target (%) | 80% | 100% | 120% | 99.6% | | Payout as a percent of Target PRSUs (%) | 60% | 100% | 130% | 99.1% | | Number of Vested PRSUs | | | | |
Compensation Discussion and Analysis
Other NEO Fiscal Year 2021 (FY 2021) LTI Awards On March 18, 2021 Mr. Menar was granted 1,944 restricted stock units, of which 972 were RSUs subject to time-based vesting; and 972 were PRSUs eligible to vest in one-third increments, or a target of 324 PRSUs per year, on each of March 31, 2022, March 31, 2023, and March 31, 2024, subject to achievement of performance targets linked to the financial measures for the applicable performance period, the third and final of which concluded on December 31, 2023. The performance measure for the third performance period was total shareholder return relative to the Information Technology sector of the Russell 2000 Index companies, and the performance and payout schedule was as follows:
Compensation Discussion and Analysis
| | Threshold | Target | Maximum | Level of achievement | | Total Shareholder Return Relative to Select Comparator Companies (percentile) | 25th | 50th | 75th or above | 40.6th | | Payout as a percent of Target PRSUs | 50% | 100% | 160% | 81.1% | | Number of Vested PRSUs | 162 | 324 | 518 | 263 |
Compensation Discussion and Analysis
The level of achievement of total shareholder return relative to select comparator companies for the third performance period was 40.6th percentile, resulting in the vesting of 81.1%, or 263, of the target PRSUs covering Mr. Menar’s third performance period. On August 12, 2021, Mr. Malhotra was granted 1,578 PRSUs. The PRSUs vest ratably in equal one-third increments based on the level of achievement of the performance targets linked to the first performance period. Thereafter, the balance of the PRSUs vest on the first anniversary and second anniversary of the initial vesting date at the level of achievement of the performance targets for the first performance period. The performance targets and achievement levels for the performance period were:
Compensation Discussion and Analysis
For performance between the threshold and target performance levels, the payout percentage was interpolated between the levels on a straight-line basis.
Compensation Discussion and Analysis
| | Payout Percent | Relative Weight | Weighted Payout | | FY 2021 Punchh LARR | 87% | 75% | 65% | | FY 2021 Punchh CARR | 70% | 25% | 18% | | Combined Weighted Payout as a Percent of Target | | | 83% |
Compensation Discussion and Analysis
As shown above, Mr. Malhotra achieved performance of 93.4% of the goal for FY 2021 Punchh LARR and 85.7% or the goal for FY 2021 Punchh CARR, resulting in a combined weighted payout at 83% level of achievement. Therefore, the first tranche vested at 83% on March 1, 2022; the second tranche vested at 83% on March 1, 2023; and, the final tranche vested at 83% on March 1, 2024, in each case, subject to Mr. Malhotra’s continued employment through such vesting date. Mr. Malhotra’s position was eliminated, effective February 9, 2024. However, the requirement for continued employment through the vesting date was suspended with respect to the final tranche in consideration for Mr. Malhotra’s agreement to a release of claims in favor of the Company. PAR Government Retention Bonuses In 2023, Mr. Nelson participated in an employee retention program used by PAR Government as a tool to recruit and retain certain of its employees and those of its subsidiaries (the “PGSC Retention Bonus”). The PGSC Retention Bonus is generally available to all employees of PAR Government and its subsidiaries who are not covered by the Service Contract Act. The PGSC Retention Bonus is a percentage of an employee’s eligible total cash compensation paid in a fiscal year. The PGSC Retention Bonus is established annually by PAR Government’s senior management and is payable if the employee remains employed through and including the payment date in the immediately following year (generally in early March). The payment is reduced by the amount, if any, of the employer contribution for the employee to the profit-sharing component of the Company’s retirement plan. Clawback and Forfeiture Policy Our Clawback and Forfeiture Policy provides for the recoupment of erroneously awarded cash and equity incentive compensation paid to the Company’s executive officers, including named executive officers, Section 16 officers and any other officers designated by the Board (“Covered Officers”) in the event the Company is required to prepare an accounting restatement of its financial statements due to the Company’s material noncompliance with any financial reporting requirement under the securities laws. The Policy is intended to comply with, and shall be interpreted and administered consistent with, Rule 10D-1 of the Exchange Act and NYSE 303A.14. Further, the Policy extends to injurious conduct by Covered Officers and other employees identified by the Board (“Covered Persons”) and provides for the recovery of additional forms of compensation in the event the Compensation Committee determines that a Covered Person has engaged in injurious conduct, including gross or intentional misconduct, embezzlement, theft, fraud or a breach of a fiduciary duty. Stock Ownership Guidelines To strengthen the alignment of our executive officers’ interests with those of our shareholders, the Company has established stock ownership guidelines mandating that executive officers (including our NEOs) and other officers identified by the Compensation Committee (“Covered Officers”) own an amount of the Company’s stock valued as a multiple of his or her annual base salary. The Covered Officers are required to attain the mandated ownership levels outlined in the table below within five years of becoming subject to the guidelines.
Compensation Discussion and Analysis
The Compensation Committee assesses the stock ownership of the Covered Officers on an annual basis. Each Covered Officer had achieved compliance with the necessary ownership requirement as of the last measurement date, except for Mr. Nelson, who was still within the initial five-year grace period. Unless a Covered Officer satisfies the stock ownership guidelines, the Covered Officer must retain at least 50% of the net shares of stock acquired upon the vesting of any incentive equity awards granted by the Company, after deducting the number of shares of stock that would be needed to pay applicable taxes. Employment Arrangements in Effect for 2023 We have written employment agreements with Messrs. Singh, and Nelson that set forth the terms of their employment. An employment agreement was also in effect for 2023 with Mr. Malhotra, but his employment was terminated in February 2024 as explained below. Those employment agreements include: initial base salaries; eligibility for short-term incentive compensation; eligibility for long-term incentive compensation; severance entitlements (described further in Potential Payments Upon Termination below); and, certain restrictive covenants. Mr. Menar’s and Ms. King’s compensation is determined by the Compensation Committee. Savneet Singh. On May 9, 2023, Mr. Singh and the Company entered into an amended and restated employment letter (the “Employment Letter”) pursuant to which Mr. Singh continues to serve as the Chief Executive Officer and President of the Company. On May 15, 2023, pursuant to the terms of the Employment Letter, Mr. Singh was granted 72,585 RSUs and 108,877 PRSUs subject to his continued employment through and including the vesting dates. The RSUs vest annually in equal installments on March 1, 2024, March 1, 2025, and March 1, 2026. The PRSUs will vest annually in equal installments, subject to the achievement of the performance targets, including the percentage of achievement, applicable to each 12-month performance period ending on December 31, 2023, December 31, 2024 and December 31, 2025 and linked to a completed performance period, to the extent of achievement, on the first day of the last month of the fiscal quarter in which the Committee shall have certified performance. Under the terms of the Employment Letter, as well as the award agreements governing the 20,000 RSUs granted on March 4, 2022 and the 72,585 RSUs granted on May 15, 2023, the vesting terms of Mr. Singh’s time-based equity awards may be shortened in the event of a change of control of the Company and/or Mr. Singh’s termination of employment by the Company without cause or his resignation for good reason. Additionally, the Employment Letter provides for a company-paid long-term disability (“LTD”) policy payable in the amount of 60% of his base salary, which payment is reduced by payments made to Mr. Singh under the Company’s LTD plan, and a company-paid life insurance policy in the amount of $5,000,000. Payments for premiums on the life insurance policy were discontinued in an amendment to the Employment Letter in March 2024. Raju Malhotra. Effective October 4, 2021, Mr. Malhotra and the Company entered into an employment agreement pursuant to which Mr. Malhotra serves as Chief Product and Technology Officer of the Company. Mr. Malhotra’s employment agreement provides for an annual base salary of $400,000, subject to adjustment by the Compensation Committee, and a supplemental cash bonus opportunity of up to $1,000,000 subject to the achievement of ARR performance targets through the end of the fiscal year ended December 31, 2023 to be established by the Compensation Committee. As described above, the performance targets for the supplemental cash bonus were not met and no payment was made. Effective February 9, 2024, Mr. Malhotra’s employment with the Company was terminated, and on February 26, 2024, Mr. Malhotra delivered a release of claims in favor of the Company. In consideration of his release, Mr. Malhotra received certain separation payments and benefits as set forth in the Form 8-K/A filed by the Company with the SEC on March 1, 2024. Michael D. Nelson. On October 28, 2021, Mr. Nelson and PAR Government entered into an employment agreement pursuant to which Mr. Nelson serves as the President of PAR Government. Mr. Nelson's employment agreement provides for an annual base salary of $325,000, subject to adjustment by the Compensation Committee; and participation in the Company’s incentive compensation plans as in effect from time to time. Mr. Nelson participates in our STI and LTI programs under the terms set by the Compensation Committee. Benefits In addition to any benefits provided in their employment agreements, our NEOs are eligible to participate in the same benefit plan programs as all other Company employees, including: medical insurance; dental insurance; vision insurance; group life insurance; voluntary benefits; short-term disability coverage; long-term disability coverage; partial reimbursement of health club/gym membership fees; the Company’s 401(k) retirement plan (“retirement plan”); and our employee stock purchase plan. Our retirement plan allows U.S. employees that meet eligibility requirements to contribute pre-tax (401(k)) or post-tax (Roth 401(k)) earnings up to the applicable annual IRS limits. Except for certain excluded employees of PAR Government, the Company matches 50% of each participating eligible employee’s annual contributions to the retirement plan, up to 6% of such employee’s compensation for such fiscal year. Company matching contributions are subject to a three-year vesting period. The retirement plan also has a deferred profit-sharing component. Contributions to the profit-sharing component of the retirement plan are made at the discretion of the Board. No profit-sharing contributions were made to the plan in 2023. Deferred Compensation We sponsor a non-qualified deferred compensation plan for a select group of highly compensated employees. Participants may make voluntary deferrals of their salary and/or cash bonus to the plan. All amounts contributed to or deferred under the non-qualified deferred compensation plan may be nominally invested in one or more designated investment options. Distributions of amounts under the deferred compensation plan may be made in a lump sum amount or in annual installments upon specific events at the election of the employee. None of our NEOs made any contributions to the plan in 2023. The Board has the sole discretion to make employer contributions to the plan, although it did not make any such employer contributions in 2023.
Compensation Tables
| Name and Principal Position | Year(1) | Salary ($)(2) | Bonus ($)(3) | Stock Awards ($)(4) | Option Awards ($) | Non- Equity Incentive Plan Compensation ($)(5) | Non-Qualified Deferred Compensation Earnings ($) | All Other Compensation ($)(6) | Total ($) | | Savneet Singh, CEO and President | 2023 | 620,000 | — | 8,555,929 | — | 463,140 | — | 18,559 | 9,657,628 | | | 2022 | 611,346 | — | 766,800 | — | 750,200 | — | 26,753 | 2,155,099 | | | 2021 | 569,231 | — | — | — | 548,852 | — | 6,371 | 1,124,454 | | Bryan A. Menar, Chief Financial Officer, Vice President | 2023 | 412,923 | — | 599,985 | — | 217,942 | — | 10,710 | 1,241,560 | | | 2022 | 379,713 | — | 468,515 | — | 242,000 | — | 10,231 | 1,100,459 | | | 2021 | 292,211 | — | 366,433 | — | 143,603 | — | 9,212 | 811,459 | | Cathy A. King Chief Legal Officer and Corporate Secretary | 2023 | 412,923 | — | 599,985 | — | 167,648 | — | 13,464 | 1,194,020 | | | 2022 | 377,615 | — | 518,510 | — | 242,000 | — | 11,692 | 1,149,817 | | Raju Malhotra, Chief Product and Technology Officer | 2023 | 412,923 | — | 1,499,998 | — | 293,384 | — | 7,546 | 2,213,851 | | | 2022 | 400,000 | 250,000 | 1,499,976 | — | 423,500 | — | 9,960 | 2,583,436 | | | 2021 | 248,347 | — | 99,966 | — | 245,231 | — | 764 | 594,308 | | Michael D. Nelson, President, PAR Government | 2023 | 335,500 | 14,292 | 84,965 | — | 159,401 | — | 11,142 | 605,300 | | | 2022 | 325,000 | 13,910 | 64,986 | — | 143,130 | — | 10,446 | 557,472 | | | 2021 | 25,000 | 136,140 | — | — | — | — | 96 | 160,096 |
Compensation Tables
| 14. | Mr. Malhotra’s potential payments upon termination are based on his employment agreement with the Company, effective October 4, 2021, and his outstanding equity award agreements. Upon termination of his employment for any reason, Mr. Malhotra would receive his accrued but unpaid base salary, accrued but unused sick time ($11,200), unreimbursed business expenses and nonforfeitable benefits under the terms of any welfare benefit plan or retirement benefit plan maintained by the Company. |
Compensation Tables
| 18. | Mr. Nelson’s potential payments upon termination are based on his employment agreement with PAR Government, dated October 28, 2021. Upon termination of his employment for any reason, Mr. Nelson would receive his accrued but unpaid base salary, accrued but unused vacation ($21,666), unreimbursed business expenses and nonforfeitable benefits under the terms of any welfare benefit plan or retirement benefit plan maintained by the Company. |
CEO Pay Ratio
CEO Pay Ratio As set forth in the Summary Compensation Table, our CEO’s annual total compensation for 2023 was $9,657,628. Our median employee’s annual total compensation for 2023 was $71,306 resulting in a CEO pay ratio of 135:1. For purposes of determining the 2023 CEO pay ratio our “median employee” for 2023 was identified using the following methodology and material assumptions, adjustments, and estimates:
CEO Pay Ratio
| • | We identified the individuals employed by the Company and its consolidated subsidiaries as of December 31, 2023, including full-time, part-time, seasonal and temporary workers for a total of 2,019 employees (excluding the CEO). |
CEO Pay Ratio
| • | As permitted by the SEC rules, we excluded 95 employees located outside the United States. The countries in which such excluded employees are located are: |
CEO Pay Ratio
| ○ | Australia – 14 employees |
CEO Pay Ratio
| ○ | Guam – 3 employees |
CEO Pay Ratio
| ○ | Northern Mariana Islands – 41 employees |
CEO Pay Ratio
| ○ | Spain – 22 employees |
CEO Pay Ratio
| ○ | Switzerland – 6 employees |
CEO Pay Ratio
| ○ | United Arab Emirates – 6 employees |
CEO Pay Ratio
| ○ | United Kingdom – 3 employees |
CEO Pay Ratio
| • | We annualized compensation for all full-time and part-time employees who were employed for less than the full fiscal year 2023. |
CEO Pay Ratio
| • | We reviewed the Company’s payroll records and ranked all included Company employees high to low based on their IRS Form W–2 Box 5 compensation (or country equivalent wages) as of December 31, 2023. For employees receiving their compensation in a currency other than USD, we converted their compensation into USD using the exchange rate as of December 31, 2023. |
CEO Pay Ratio
| • | We calculated the annual total compensation of our median employee for 2023 using the same rules that apply to reporting the annual total compensation of our NEOs, including our CEO, in the Summary Compensation Table. |
CEO Pay Ratio
The CEO pay ratio information is being provided for the purposes of compliance with the pay ratio disclosure requirement and is intended to be a reasonable estimate calculated in a manner consistent with the SEC rules. Neither the Company’s Compensation Committee nor the Company’s management used the CEO pay ratio in making compensation recommendations or decisions. Given the different methodologies that various public companies use to determine their estimates of pay ratio, including the different assumptions, exclusions, estimates and methodologies allowed under the SEC rules, and differing employment and compensation practices among companies, our reported pay ratio should not be used as a basis of comparison between the Company and other companies.
Pay Versus Performance
Pay Versus Performance As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(v) of Regulation S-K of the Exchange Act, we are providing the following information about the relationship between executive “compensation actually paid” and certain financial performance of the Company. For further information concerning the Company’s pay for performance philosophy and how the Company aligns executive compensation with the Company’s performance, refer to Compensation Discussion and Analysis above.
Pay Versus Performance
| | | | | | | Value of Initial Fixed $100 Investment Based on: | | | | Year | Summary Compensation Table Total for the PEO1 2 | Compensation Actually Paid to the PEO(3) | Average Summary Compensation Table Total for the Non-PEO NEOs(2) | Average Compensation Actually Paid to the Non-PEO NEOs(3) | Total Shareholder Return(4) | Peer Group Total Shareholder Return(5) | Net Income(6) | Non-GAAP Adjusted EBITDA(7) | | 2023 | $9,657,628 | $15,184,662 | $1,310,110 | $1,858,109 | $141.64 | $131.92 | ($69,752) | ($25,783) | | 2022 | $2,155,099 | ($7,771,695) | $1,347,796 | $649,506 | $84.81 | $103.62 | ($69,319) | ($18,845) | | 2021 | $1,124,454 | $1,928,070 | $516,345 | $1,617,502 | $171.67 | $162.45 | ($75,799) | ($17,793) | | 2020 | $8,220,228 | $55,524,053 | $447,781 | $1,024,510 | $204.26 | $142.50 | ($36,562) | ($12,453) |
Pay Versus Performance
| 1. | Savneet Singh served as the sole principal executive officer (“PEO”) of the Company for 2020, 2021, 2022, and 2023. |
Pay Versus Performance
| 2. | The dollar amounts reported as total compensation for the Company’s PEO and the average of the amounts reported for the Company’s named executive officers (NEOs) as a group (excluding I PEO) for each corresponding year are the amounts reported in the “Total” column of the Summary Compensation Table. Refer to “Executive Compensation – Executive Compensation Tables – 2023 Summary Compensation Table” of this Proxy Statement and the Company’s proxy statements for 2020, 2021, and 2022. The names of each of the NEOs (excluding the PEO) included for purposes of calculating the average amounts in each applicable year are as follows: (i) for 2023, Bryan A. Menar, Cathy King, Raju Malhotra, and Michael Nelson; (ii) for 2022, Bryan A. Menar, Cathy King, Raju Malhotra, and Michael Nelson; (iii) for 2021, Bryan A. Menar, Raju Malhotra, Michael Nelson, and Matthew R. Cicchinelli; and (iv) for 2020, Bryan A. Menar and Matthew R. Cicchinelli. |
Pay Versus Performance
| 3. | The dollar amounts reported as “compensation actually paid” to the PEO and the average amount reported as “compensation actually paid” to the NEOs as a group (excluding the PEO), are computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual amount of compensation earned by or paid to such PEOs and NEOs during the applicable year. The valuation methodologies and assumptions used when calculating the equity values included in compensation actually paid are not materially different than those used when calculating the amounts included in the Summary Compensation Table. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to the PEOs’ total reported compensation and non-PEO NEOs’ for each year to determine the compensation actually paid: |
Pay Versus Performance
| Year | Name of PEO | Reported Summary Compensation Table Total | [Less] Reported Value of Equity Awards | [Plus] Fair Value at Fiscal Year- End of Outstanding and Unvested Option Awards and Stock Awards Granted in Fiscal Year | [Plus] Change in Fair Value of Outstanding and Unvested Option Awards and Stock Awards Granted in Prior Fiscal Years | [Plus] Fair Value at Vesting of Option Awards and Stock Awards Granted in Fiscal Year that Vested During Fiscal Year | [Plus] Change in Fair Value as of Vesting Date of Option Awards and Stock Awards Granted in Prior Fiscal Years for Which Applicable Vesting Conditions Were Satisfied During Fiscal Year | [Less] Fair Value as of Prior Fiscal Year- End of Option Awards and Stock Awards Granted in Prior Fiscal Years that Failed to Meet Applicable Vesting Conditions During Fiscal Year | [Equals] Compensation Actually Paid | | 2023 | PEO | $9,657,628 | $8,555,929 | $12,147,740 | $1,222,917 | $712,306 | $0 | $0 | $15,184,662 | | 2023 | Average for Non-PEO NEOs | $1,310,110 | $696,233 | $846,287 | $278,859 | $119,086 | $0 | $0 | $1,858,109 |
Pay Versus Performance
| 4. | Cumulative TSR is calculated by dividing (a) the sum of (i) the cumulative amount of dividends on our common stock for the measurement period (if any), assuming dividend reinvestment, and (ii) the difference between the Company’s share price at the end and the beginning of the measurement period by (b) the Company’s share price at the beginning of the measurement period. |
Pay Versus Performance
| 5. | Represents the weighted peer group TSR, weighted according to the respective companies’ stock market capitalization at the beginning of each period for which a return is indicated. The peer group used for this purpose is the Russell 2000 Technology Index. |
Pay Versus Performance
| 6. | The dollar amounts reported represent the amount of net income reflected in the Company’s audited financial statements for the applicable year (in thousands). |
Pay Versus Performance
| 7. | The dollar amounts reported represent the amount of adjusted EBITDA reflected in the Company’s audited financial statements for the applicable year (in thousands). |
Description of Certain Relationships between Information Presented in the Pay Versus Performance Table
Description of Certain Relationships between Information Presented in the Pay Versus Performance Table As described in more detail above in the Compensation Discussion and Analysis, our executive compensation programs reflect a variable pay-for-performance philosophy. While we use multiple performance measures to align executive compensation with our performance, all of those performance measures are not presented in the Pay Versus Performance table. Moreover, we generally seek to incentivize long-term term performance, and therefore do not specifically align our performance measures with compensation that is actually paid (as computed in accordance with SEC rules) for a particular year. In accordance with the SEC rules, we are providing the following descriptions of the relationships between information presented in the Pay Versus Performance table. Compensation actually paid is significantly influenced by changes in our stock price and has thus varied from year to year. In particular, compensation actually paid in 2023 was heavily influenced by our stock price increasing 67% from the beginning to the end of the year, which in turn had a meaningful positive impact on the value of our NEOs’ equity awards that year (including an increase of the estimated earnout level of in-progress relative TSR PRSUs). Most Important Performance Measures As described in greater detail in the Compensation Discussion and Analysis, our executive compensation programs reflect a variable pay-for-performance philosophy. The metrics that we use for both long-term and short-term incentive awards are selected with the goal of incentivizing our NEOs to increase the value of our enterprise for our shareholders. The most important financial performance measures we used to link executive compensation actually paid to our NEOs, for the most recently completed fiscal year, to our performance are as follows: Most Important Financial Performance Measures
Description of Certain Relationships between Information Presented in the Pay Versus Performance Table
| Non-GAAP Adjusted EBITDA | | Annual Recurring Revenue (ARR) | | Government Segment Net Income Before Taxes |