DEF 14A of Pagaya Technologies Ltd.
Filed Oct 25, 20240001140361-24-044284
ELECTION OF CLASS II DIRECTORS
ELECTION OF CLASS II DIRECTORS Our Board currently consists of nine directors. Our Articles of Association provide that our Board may consist of not less than three and up to ten directors. Under our Articles of Association, our directors (other than our external directors, if any, as discussed below) are divided into three classes, as nearly equal in number as possible. At each annual general meeting of our shareholders, the election or reelection of directors following the expiration of the term of office of the directors of that class of directors is for a term of office that expires on the third annual general meeting following such election or reelection, such that each year the term of office of one class of directors expires. If Proposal 1 is approved by the Company’s shareholders, the classification of the Board of Directors will be phased out over the next three Annual Meetings, such that (i) at the Annual Meeting, each of the Directors in Class II will be elected to hold office for a term of two years, which will expire at the time of the 2026 Annual Meeting; and (ii) at the 2025 Annual Meeting and all Annual Meetings thereafter each of the directors up for election will be elected to hold office for a term of one year. If Proposal 1 is not approved by the Company’s shareholders, the term of office of one Class of Directors will continue to expire each year, and at each Annual Meeting of Shareholders the successors to the Directors of the Class whose term is expiring at that time will continue to be elected to hold office for a term of three years. Accordingly, the term of office of the persons elected as Directors in Class II at this year’s Annual Meeting will expire at the time of the 2027 Annual Meeting. Each director serves through the term of his or her class, except in the event of his or her earlier death, resignation, removal or termination otherwise. The term of each of our Class II directors, Avi Zeevi, Tami Rosen and Dan Petrozzo, expires at the Annual Meeting. Our Class I directors, Harvey Golub, Mircea Ungureanu and Nicole Torraco, are serving terms that expire at the 2026 annual general meeting of shareholders, and our Class III directors, Gal Krubiner, Avital Pardo and Yahav Yulzari, are serving terms that expire at the 2025 annual general meeting of shareholders. Except as indicated herein, there are no arrangements or understandings between any director for directorship and any other person pursuant to which such director was selected as director. Upon recommendation of our Nominating and Corporate Governance Committee, our Board nominated each of Avi Zeevi, Tami Rosen and Dan Petrozzo for reelection at the Annual Meeting as a Class I Director to serve until the 2026 annual general meeting of shareholders, and until their successors have been duly elected and qualified, or until their office is vacated in accordance with our Amended Articles of Association or the Israel Companies Law. Each director nominee has consented to being named in this Proxy Statement and to serve if elected and has advised us that they have the qualifications and time required for the performance of their duties as a director, and that there are no legal restrictions preventing them from assuming such office. Avi Zeevi and Dan Petrozzo each qualify as an independent director under the Nasdaq listing standards. Tami Rosen is a member of the Company’s management team and thus does not qualify as an independent director under the Nasdaq listing standards. In accordance with the Israel Companies Law, each of Avi Zeevi, Tami Rosen and Dan Petrozzo has certified to us that they meet all the requirements of the Israel Companies Law for election as a director of a public company, and possesses the necessary qualifications and has sufficient time to fulfill their duties as a director of Pagaya, taking into account the size and particular needs of Pagaya. Avi Zeevi is currently the chair of each of the Audit and Finance Committee (also known simply as the “Audit Committee”), the Compensation Committee and the Nominating and Corporate Governance Committee. Dan Petrozzo is currently the chair of the Risk Committee and a member of the Audit Committee and the Compensation Committee. Tami Rosen is currently a member of the Risk Committee. Each of Mr. Zeevi and Mr. Petrozzo satisfies the independence requirements under Nasdaq listing standards and Rule 10A-3(b)(1) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Biographical information concerning each of the director nominees is provided below.
Nominees for Election to the Board as Director
Nominees for Election to the Board as Director Avi Zeevi, 73, has served as a director of the Company since 2016. Mr. Zeevi has also served as chairman of the board of directors of Payoneer since 2008 (NASDAQ: PAYO). Mr. Zeevi is a FinTech entrepreneur and investor. He co-founded the Viola group—a private equity investment group with over $4.5 billion of assets under management, in 2000, and is co-founder and general partner of Viola Ventures, a venture capital firm. Mr. Zeevi is also a co-founder and the chairman of the investment committee of Viola FinTech. Mr. Zeevi has more than 40 years of experience as an entrepreneur, executive and investor. Mr. Zeevi has experience in the global financial industry through his involvement in several FinTech companies including: MINT Systems, Decalog and Actimize, where he served as an active chairman from 2001 until it was sold to NICE Systems (NASDAQ: NICE). Mr. Zeevi also serves as a chairman of Personetics Technologies Ltd. And a director of EverC Ltd., Shift Time Inc., Duetti Inc., Symphera Ltd. and Bounce Technologies Ltd. He also serves as a director in companies/entities within Viola group and entities affiliated with Viola group. Furthermore, Mr. Zeevi is also the Chairman of the investment committee of Israel Legacy Partners, a private equity fund focused on long-term investments in family companies. Mr. Zeevi is a board member at The Center for Educational Technology (CET) which is dedicated to the advancement of the education system in Israel, in the Jewish world and around the globe, and a board member at Bat Sheva Dance Company. He is also a member of the Board of Governors of the Technion, the Israel Institute of Technology. Mr. Zeevi received his B.Sc in Industrial Engineering from Technion, Israel Institute of Technology. Tami Rosen, 53, joined Pagaya in 2021 as the Chief People Officer. In April 2024, Ms. Rosen was appointed to the Board of Directors, as well as named Chief Development Officer and the Chair of Pagaya’s new strategic Advisory Board. As the Company’s first C-Suite hire, Ms. Rosen was instrumental in helping to scale Pagaya’s business, support M&A activities, attract and retain top talent, and assist in Pagaya’s successful public offering. Prior to joining Pagaya, Ms. Rosen served in various senior executive roles at Apple, Goldman Sachs, Atlassian, and Luminar Technologies, including Chief People Officer at both Atlassian, a software company (in 2020) and Luminar Technologies, a global automotive technology company (from 2018 to 2020). She pioneered Wall Street's first LGBTQ+ Ally Program at Goldman Sachs and conceptualized Atlassian's 'TEAM Anywhere' program, revolutionizing remote work norms. At Pagaya, she spearheaded the ‘Culture of Learning’ initiative, which emphasizes continuous growth. Ms. Rosen received her undergraduate degree from Binghamton University in Law and Society. Dan Petrozzo, 60, has served as a director of the Company since 2018. Mr. Petrozzo is former Partner and Venture Partner at Oak HC/FT (from 2017 to 2024) where he focused on growth equity and early-stage venture opportunities in Fintech. He currently serves on the boards of Sure Inc. and Nokod Security Ltd. Previously, Mr. Petrozzo co-founded Verilume, a cloud computing company, which was sold to Intralinks in 2016. Mr. Petrozzo is a former partner at Goldman Sachs where he served as Global Head of Technology for Investments Management. He was also Chief Information Officer at Fidelity Investments and Co-Chief Information Officer at Morgan Stanley. He was also on the founding team at StorageApps, which was sold to Hewlett Packard. Mr. Petrozzo received his B.A. from Moravian College and his J.D. from Seton Hall University Law School.
Proposed Resolutions
Proposed Resolutions You are requested to adopt the following resolutions: “2.a. RESOLVED, that Avi Zeevi be elected as a director, to serve until the 2026 annual general meeting of shareholders if Proposal 1 is approved by the Company’s shareholders, or until the 2027 annual general meeting of shareholders if Proposal 1 is not approved by the Company’s shareholders, and until his successor has been elected and qualified, or until his office is vacated in accordance with the Company’s Articles of Association or the Israel Companies Law, 5759-1999; “2.b. RESOLVED, that Tami Rosen be elected as a director, to serve until the 2026 annual general meeting of shareholders if Proposal 1 is approved by the Company’s shareholders, or until the 2027 annual general meeting of shareholders if Proposal 1 is not approved by the Company’s shareholders, and until her successor has been elected and qualified, or until her office is vacated in accordance with the Company’s Articles of Association or the Israel Companies Law, 5759-1999; and “2.c. RESOLVED, that Dan Petrozzo be elected as a director, to serve until the 2026 annual general meeting of shareholders if Proposal 1 is approved by the Company’s shareholders, or until the 2027 annual general meeting of shareholders if Proposal 1 is not approved by the Company’s shareholders, and until his successor has been elected and qualified, or until his office is vacated in accordance with the Company’s Articles of Association or the Israel Companies Law, 5759-1999.” The affirmative vote of an Ordinary Majority is required to adopt each of the foregoing resolutions. Abstentions and broker non-votes are not considered to be votes cast and, accordingly, will have no effect on the outcome of the vote on these proposals. THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE ADOPTION OF EACH OF THE FOREGOING RESOLUTIONS.
CORPORATE GOVERNANCE
CORPORATE GOVERNANCE
External Directors
External Directors Under the Israel Companies Law, companies incorporated under the laws of the State of Israel that are “public companies,” including companies with shares listed on Nasdaq, are required to appoint at least two external directors. Pursuant to regulations promulgated under the Israel Companies Law, companies with shares traded on certain U.S. stock exchanges, including Nasdaq, which do not have a “controlling shareholder” may, subject to certain conditions, “opt out” from the Israel Companies Law requirements to appoint external directors and related Israel Companies Law rules concerning the composition of the audit committee and compensation committee of the board of directors. In accordance with these regulations, we have elected to “opt out” from the Israel Companies Law requirement to appoint external directors and related Israel Companies Law rules concerning the composition of the audit committee and compensation committee of our Board.
Continuing Directors
Continuing Directors
Class III Director Whose Term Continues Until the 2025 Annual General Meeting of Shareholders
Class III Director Whose Term Continues Until the 2025 Annual General Meeting of Shareholders Gal Krubiner, 36, has served as the Chief Executive Officer and a director since co-founding the Company in 2016. Mr. Krubiner brings extensive experience to the investments and wealth management industry with a specialization in innovative and sophisticated credit structured products. Prior to co-founding Pagaya, Mr. Krubiner focused on structuring and distributing sophisticated credit and asset-backed securities products with UBS AG from 2012 to 2016, as well as holding other positions specializing in investment, entrepreneurism, and financial markets. Mr. Krubiner earned a B.A. in Applied Science, Economics & Statistics from Tel-Aviv University. Avital Pardo, 39, has served as Chief Technology Officer and a director of the Company since co-founding the Company in 2016. Mr. Pardo was instrumental in designing the Company’s AI-based credit model and system. Prior to joining the Company, Mr. Pardo was one of the first employees at Fundbox and focused on the Algorithms from 2014 to 2015. Mr. Pardo earned a B.A. in Mathematics and Physics and a Master of Science, Mathematics from Hebrew University. Yahav Yulzari, 39, has served as Chief Revenue Officer and a director of the Company since co-founding the Company in 2016. Mr. Yulzari oversees the Company’s growth and global commercial activities. He is a former real estate entrepreneur. Prior to his entrepreneurship endeavors, Mr. Yulzari was a professional goalkeeper in the Israeli football league and he was on the national under 21 team.
Class I Directors Whose Terms Continue Until the 2026 Annual General Meeting of Shareholders
Class I Directors Whose Terms Continue Until the 2026 Annual General Meeting of Shareholders Harvey Golub, 85, has served as a director of Pagaya since 2018. Mr. Golub currently serves as the chairman of Dynasty Financial Partners and Marblegate Acquisition Corp, and as a member of the advisory board of Marblegate Asset Management LLC. He is also on the boards of the American Enterprise Institute and the Manhattan Institute for Policy Research, as well as a member of the board of trustees of Jupiter Medical Center and a member of the investment committee of the Maltz Jupiter Theater. Mr. Golub has over 35 years of experience guiding companies’ organizational visions and strategies. He was chairman and CEO of American Express and IDS Financial Services and a director of McKinsey & Co. He has also served as chairman on the boards of American International Group, Campbell Soup Company, and the Reader’s Digest Association, and a member of the boards of Dow Jones & Company, Hess Corporation, RHJ International and several private companies. Mr. Golub received his B.S. from New York University. Mircea Ungureanu, 47, has served as a director of the Company since 2020. He currently serves as Deputy Head of the Structured Products Group for GIC Private Limited (“GIC”), the sovereign wealth fund of the country of Singapore, which he joined in 2008. Mr. Ungureanu has over 20 years of experience in the finance and accounting fields. Prior to joining GIC, he was a senior portfolio and trading analyst at GMAC-RFC ResCap from 2002 to 2007. Mr. Ungureanu was also a senior auditor and assurance advisor at Ernst & Young from 1999 to 2002. Mr. Ungureanu received his B.S. in Statistics and B.B.A. in Finance from the University of Minnesota Duluth and his M.S.A. in Accountancy from the University of Notre Dame. Nicole Torraco, 46, has served as a director of the Company since 2023. Ms. Torraco most recently served as the Chief Strategy Officer at K&B Global, a management consulting company, in 2024. Prior to K&B Global, Ms. Torraco was the President of FITTLE, the financing arm of Xerox Corporation. While at FITTLE, Ms. Torraco served on Xerox’s Executive Committee and Enterprise Risk Management Committee, and was a Director on the Board of Xerox Financial Services LLC. Prior to leading FITTLE, Ms. Torraco served as Xerox’s Chief Strategy and M&A Officer. Before joining Xerox in 2018, she was a Principal at Onex Credit, a global debt securities investor, from 2010 to 2018. Ms. Torraco received her undergraduate degree from Harvard College and her Master of Business Administration from the Wharton School at the University of Pennsylvania. Ms. Torraco also has a Director Qualification from the American College of Corporate Directors (ACCD) and serves on the Board of Directors of Sharecare, a digital health company.
Compensation of Directors and Executive Officers
Compensation of Directors and Executive Officers For information concerning the total compensation earned during 2023 by our directors and five most highly-compensated office holders (as defined in the Israel Companies Law), including base salary, share-based compensation, directors’ fees (where applicable) and all other compensation, please see “Item 11. Executive Compensation” of our 2023 Annual Report.
DIRECTORS
DIRECTORS Background At the Annual Meeting, shareholders are being asked to approve the below framework for calculating 2024 cash bonuses for our Chief Executive Officer, Chief Technology Officer, Chief Business Officer and Chief Development Officer (collectively, our “Management Directors”). In particular, the Board of Directors proposes that the bonus framework for the Management Directors shall be based on three key performance indicators that the Company uses to measure its overall performance: Revenue, Gross Margin and Adjusted EBITDA. Revenue and Adjusted EBITDA are two metrics that the Company describes in its SEC filings, including the 2023 Annual Report, and Gross Margin, which is a GAAP metric defined as gross profit divided by revenue for a given period, that the Company expects to use to evaluate profitability. In calculating the bonuses for our Management Directors in 2024, the Board recommends utilizing a formula that assigns Revenue a weight of 35%, Gross Margin a weight of 35%, and Adjusted EBITDA a weight of 30%. This reflects a notable shift in weighting, which includes a significant reduction in the weight assigned to Revenue, and increases the weights assigned to Gross Margin and Adjusted EBITDA. The Board further recommends that ultimate payouts be adjusted, in part, by a Company performance multiplier, which shall adjust the Company performance portion of a Management Director’s target bonus under the 2024 Short Term Incentive Program to reflect:
DIRECTORS
| • | a 0% payout for a given metric if actual Company performance is less than 75% of the target for such metric, |
DIRECTORS
| • | a 75% payout for a given metric if actual Company performance is greater than or equal to 75% and less than 100% of the target for such metric, |
DIRECTORS
| • | a 100% payout for a given metric if actual Company performance is greater than or equal to 100% and less than 125% of the target for such metric, |
DIRECTORS
| • | a 150% payout for a given metric if actual Company performance is greater than or equal to 125% and less than 150% of the target for such metric, |
DIRECTORS
| • | a 200% payout for a given metric if actual Company performance is greater than or equal to 150% of the target for such metric, |
DIRECTORS
| • | a 300% payout if (i) the Company were to meet or exceed targets for two of the three 3 metrics. |
DIRECTORS
In no event will the multiplier exceed 300%. In addition to the above formulaic bonus, the Board recommends that it be granted the authority, in accordance with the Company’s Compensation Policy, to award (i) our Chief Executive Officer, if so recommended by the Compensation Committee, a discretionary bonus of up to 25% of his annual base salary, and (ii) each of our other Management Directors, if so recommended by the Compensation Committee, a discretionary bonus of up to 25% of his or her annual base salary. The proposed framework for the cash bonuses of our Management Directors was approved by the Compensation Committee and the Board, after considering the factors specified in our Compensation Policy, including each of our Management Directors’ performance and contribution to the Company. The terms also reflect each of our Management Directors’ experience, a comprehensive compensation survey, and the terms of our Compensation Policy. Our Compensation Committee and Board approved the framework described above as they believe that, together with the current terms of each of our Management Directors’ compensation, it serves as an appropriate long-term retention and performance incentive, and advances the objectives of the Company, its work plan and its long-term strategy. All other employment terms for our Management Directors shall remain unchanged. For further information on the compensation terms of Messrs. Krubiner, Pardo and Yulzari and Ms. Rosen, please see “Item 11. Executive Compensation” of our 2023 Annual Report. You are requested to adopt the following resolutions: “4.a. RESOLVED, to approve the 2024 compensation framework for the Company’s Chief Executive Officer, as set forth in Proposal No. 4 of the proxy statement dated October 25, 2024; and “4.b. RESOLVED, to approve the 2024 compensation framework for the Company’s Management Directors other than its Chief Executive Officer, as set forth in Proposal No. 4 of the proxy statement dated October 25, 2024.”