DEF 14A of PayPal Holdings, Inc.
Filed Apr 9, 2024 · FY20230001193125-24-090908
2024 Director Nominees
2024 Director Nominees The following tables provide summary information about our director nominees. All our 2024 director nominees are independent except Mr. Chriss, our President and CEO. Directors are elected annually by a majority of votes cast. The Board of Directors recommends that you vote “FOR” the election of each of the 11 nominees. See page 13 of this proxy statement for the proposal.
2024 Director Nominees
| Directors | Name | Occupation | Diversity | Age | Director Since | Independent | Other Public Company Boards | Committee Memberships | | | | | | | | | | | | ARC | COMP | GOV | | | Rodney C. Adkins | President,3RAM Group LLC | D | 65 | 2017 | ● | 3 | ● | | ● | | | Alex Chriss | President and CEO, PayPal Holdings, Inc. | | 46 | 2023 | | - | | | | | | Jonathan Christodoro | Partner, Patriot Global Management, LP | | 47 | 2015 | ● | - | | ● | ● | | | John J. Donahoe | President and CEO, Nike, Inc. | | 63 | 2015 | | 1 | | | | | | David W. Dorman | Former Non-Executive Board Chair of CVS Health Corporation | | 70 | 2015 | ● | 1 | | | ● | | | Enrique Lores | President and CEO, HP Inc. | D | 58 | 2021 | ● | 1 | ● | | | | | Gail J. McGovern | President and CEO, American Red Cross | W | 72 | 2015 | ● | 1 | | ● | |
2024 Director Nominees
Independent Board Chair Committee Chair ARC = Audit, Risk and Compliance Committee (“ARC Committee”) COMP = Compensation Committee GOV = Corporate Governance and Nominating Committee W = Woman D = Diverse Ethnicity
2024 Director Nominees
| • 2024 Proxy Statement | 5 |
2024 Director Nominees
2024 Director Nominees
2024 Director Nominees
| Directors | Name | Occupation | Diversity | Age | Director Since | Independent | Other Public Company Boards | Committee Memberships | | | | | | | | | | | | ARC | COMP | GOV | | | Deborah M. Messemer | Former Major Market Managing Partner, KPMG | W | 66 | 2019 | ● | 2 | ● | | | | | David M. Moffett | Former CEO, Federal Home Loan Mortgage Corp. | | 72 | 2015 | ● | 3 | | | | | | Ann M. Sarnoff | Former Chair and CEO, WarnerMedia Studios & Networks Group | W | 62 | 2017 | ● | - | ● | | | | | Frank D. Yeary | Managing Member, Darwin Capital Advisors, LLC | | 60 | 2015 | ● | 2 | ● | | |
2024 Director Nominees
Independent Board Chair Committee Chair ARC = Audit, Risk and Compliance Committee (“ARC Committee”) COMP = Compensation Committee GOV = Corporate Governance and Nominating Committee W = Woman D = Diverse Ethnicity As previously disclosed, Belinda Johnson has informed the Company that she will not stand for re-election as a director at the Annual Meeting. The Board anticipates that it will reduce the size of the Board to 11 directors effective immediately before the Annual Meeting. In addition, the Company has announced that the Board intends to appoint Carmine Di Sibio as an independent director of the Company effective July 1, 2024. Mr. Di Sibio is currently Global Chair and CEO of EY (“EY”) and has previously announced that he will retire from EY in June 2024. In accordance with EY policy and practice, he is only able to join a public company board upon his retirement. Accordingly, Mr. Di Sibio is not a director nominee in this Proxy Statement. We are providing this disclosure to be transparent with our stockholders and to highlight our continued focus on board refreshment. See “Corporate Governance—New Director to be Appointed After Annual Meeting” for Mr. Di Sibio’s biography and additional information. The Board and the Corporate Governance and Nominating Committee (the “Governance Committee”) are committed to ensuring that the Board is composed of individuals who have highly relevant skills, professional experience and backgrounds, bring diverse viewpoints and perspectives and effectively represent the long-term interests of stockholders. Below is a snapshot of the diversity, skills and experience of our director nominees. For more information about our Board members, see “Director Experience, Expertise and Attributes” beginning on page 15 of this proxy statement.
2024 Director Nominees
| 6 | • 2024 Proxy Statement |
2024 Director Nominees
2024 Director Nominees Tenure1 Age Gender Ethnic Diversity 6 YRS average tenure of director nominees 62 YRS average age of director nominees 27% of director nominees are women 18% of director nominees are ethnically diverse 1-4 years 5-8 years < 60 years 61-65 years 66+ years Women Men Did Not Disclose Ethnically Diverse White Did Not Disclose
2024 Director Nominees
| (1) PayPal became an independent public company in July 2015. |
Executive Transition-Related Compensation
| | Go-Forward Compensation Arrangements | | | | Special, Non-Recurring New Hire Awards | | | NEO | Annual Base Salary Rate | Target Annual Incentive Plan Bonus as a Percentage of Annual Base Salary | Initial RSU Grant | Initial PBRSU Grant (at target) | Cash Sign- On Bonus | Make- Whole or Sign-On Incentive RSUs | | Alex Chriss President & Chief Executive Officer | $1,250,000 | 200% | $16,750,000 | $17,000,000 | N/A | $10,000,000 | | Jamie Miller EVP, Chief Financial Officer | $750,000 | 125% | $6,250,000 | $6,250,000 | $6,000,000(1) | $2,000,000 | | Michelle Gill EVP, General Manager – Small Business & Financial Services Group | $750,000 | 125% | $6,250,000 | $6,250,000 | $2,000,000(1) | $2,000,000 |
Executive Transition-Related Compensation
| 1 | 50% of the Cash Sign-On Bonus was payable in cash within the first two pay periods following the NEO’s start date, with the remaining 50% payable within two pay periods following the 6-month anniversary (each, an “installment”). If the NEO resigns or PayPal terminates the NEO’s employment for cause: (a) on or before the first anniversary of the payment date of the first installment, the NEO must repay 100% of the first installment; (b) after the first anniversary of the payment date of the first installment and on or before the second anniversary of the payment date of the first installment, the NEO must repay the first installment, less 1/24th of the first installment for every full month of the NEO’s active employment with PayPal following the NEO’s start date; and (c) on or before the first anniversary of the payment date of the second installment, the NEO must pay back 100% of the second installment. |
Executive Transition-Related Compensation
Mr. Chriss and Mses. Miller and Gill will not receive any equity grants during PayPal’s 2024 rewards cycle, apart from their Initial RSU Grants, Initial PBRSU Grants and Sign-On Incentive RSUs. To find additional details on new hire-related compensation, please see the CD&A section titled “Offer Letter Compensation for New NEOs” on page 53 of this proxy statement.
2024 Compensation Program Changes Informed by Investor Feedback
| Enhancement | Rationale | | Redesign the plan to fund the bonus pool based on company performance and determine employee payouts based on individual performance | Company-wide bonus pool and resulting employee bonus starting point to be based on company performance, strengthening pay and performance alignment; individual performance modifier will provide for better upwards or downwards differentiation when specifically warranted | | Update metrics to Non-GAAP Operating Income and Transaction Margin Dollars (from Revenue and Non-GAAP Operating Margin) | Will more closely align performance goals to current Company strategy, including additional focus on driving profitable growth Additionally, stock-based compensation expense will be included in non-GAAP financial metric reporting, including Non-GAAP Operating Income, beginning in 2024 | | Move to 100% cash compensation for short- term incentive program | Will align actual payout with intended value to be delivered and reduce burn rate |
2024 Compensation Program Changes Informed by Investor Feedback
| Enhancement | Rationale | | Move to relative total shareholder return (rTSR) metric, measured as compared to the S&P 500 (from FX-Neutral Revenue CAGR and Free Cash Flow CAGR), with the target for rTSR vs. the S&P 500 set at the 55th percentile | More closely aligns PBRSU payouts with long-term shareholder value while effectively motivating leaders to holistically execute during this transitional period while our strategy continues to evolve | | Three-year performance period using three discrete measurement periods of 12, 24, and 36 months in calculating payout; no vesting prior to end of the full three-year vesting period. If absolute TSR achievement is negative for the 36-month period, the maximum shares an executive could earn would be capped at 100% of the target number of shares | Will minimize the potential impact of short-term share price volatility, while maximizing retention value over the entire vesting period; designed to enhance the program’s durability and provide a holistic measure of long-term value creation during PayPal’s strategic pivot |
2023 Incentive Compensation Plan Outcomes
| Company Measure | Threshold (50% Payout)* | Target (100% Payout)* | Maximum (200% Payout)* | Actual Achieved | Actual Achieved (Percentage of Target Achieved) | | Revenue (in $ billions) | $27.52 | $28.42 | $29.32 | $29.77 | 200% | | Non-GAAP Operating Margin | 20.40% | 22.40% | 24.40% | 22.43% | 102% | | | Company Performance Score of the AIP | | | | 151% |
Share Authorization Approval
| • | Equity awards support our pay-for-performance philosophy; |
Director Nominees
Director Nominees The Governance Committee is responsible for recommending to the Board the qualifications for Board membership and for identifying, assessing and recommending qualified director candidates for the Board’s consideration. The Board’s membership qualifications and nomination procedures are set forth in the Governance Guidelines for the Board of Directors (“Governance Guidelines”). Nominees may be suggested by directors, management, stockholders or by a third-party firm. The Governance Committee and the Board have evaluated each of the director nominees and concluded that it is in the best interests of the Company and its stockholders for each of these individuals to continue to serve as a director. The Board believes that each director nominee has a strong track record of being a responsible steward of stockholders’ interests and brings extraordinarily valuable insight, perspective and expertise to the Board. To ensure that the Board continues to evolve and be refreshed in a manner that serves the changing business and strategic needs of the Company, the Governance Committee annually reviews with the Board the applicable skills, qualifications, expertise and characteristics of Board nominees in the context of the current Board composition and Company circumstances. The Governance Committee evaluates whether each director demonstrates several key attributes and provides significant and meaningful contributions to the Board. These factors include:
Director Nominees
| • | Highly relevant professional experience in payments, financial services, financial technology (“FinTech”), technology, innovation, global business, business development, strategy, legal, regulatory, government, cybersecurity, information security, finance, accounting, consumer, sales, marketing, brand management, talent (human capital) management and/or environmental and social risk management matters; |
Director Nominees
| • | Relevant senior leadership/CEO experience; |
Director Nominees
| • | Experience and expertise that complement the skill sets of the other director nominees; |
Director Nominees
| • | High degree of character and integrity and ability to contribute to strong Board dynamics; |
Director Nominees
| • | Highly engaged and able to commit the time and resources needed to provide active oversight of PayPal and its management; |
Director Nominees
| • | Sound business judgment; and |
Director Nominees
| • | Commitment to enhancing stockholder value. |
Director Nominees
In addressing the overall composition of the Board, the Governance Committee considers how each director contributes to the Board’s diversity in terms of gender, sexual orientation, race, ethnicity, nationality, cultural background and age, in addition to the skills, qualifications and expertise that they bring to the Board.
Director Nominees
| • 2024 Proxy Statement | 13 |
Director Nominees
Director Nominees Descriptions of Skills and Attributes We apply the following standards to determine whether a nominee possesses each of the skills and attributes chart below.
Director Nominees
| Experience, Expertise and Attributes | Definition | | Payments / Financial Services / FinTech | Experience developing business strategies that strengthen and enable financial services, including payment services and infrastructure, banking, and technology platforms. | | Technology / Innovation | Possesses knowledge and insights into developing or operating technology businesses, product development and new business models, and anticipating technological trends and driving innovation. | | Global Business | Demonstrated ability to drive growth in markets around the world, including an understanding of diverse competitive and operating environments, economic conditions, regulatory frameworks and cultures. | | Go to Market | Experience in developing strategies to grow sales and market share, executing marketing campaigns, building brand awareness and overall preference among customers, and enhancing the reputation of a business at significant scale. | | Senior Leadership | CEO or other significant senior leadership experience, with a practical understanding of organizations, processes, strategic planning and risk management to assess, develop and implement business strategy, planning, and operations. | | Business Development and Strategy | Experience driving growth through strategic partnerships or business combinations, including assessment of potential partners and targets for strategic and cultural fit, structuring and negotiating agreements, and integrating and streamlining operations. | | Regulatory / Governmental Risk Management and Compliance | Knowledge of and experience with navigating complex legal and regulatory issues, compliance obligations and governmental policies in multiple jurisdictions, including engagement with legislators and regulatory bodies. | | Cybersecurity / Information Security Risk Management | Operational management or oversight of cybersecurity, information security data privacy, or expertise and understanding of how those issues affect business operations, risk management or compliance. | | Finance / Accounting | Oversight or management of the capital structure, financing and investing activities, and financial reporting and internal controls of a sophisticated and complex global business. | | Environmental and Social Risk Management | An understanding of effective management and disclosure of risks and opportunities around environmental sustainability, social aspects of business models and activities, and key governance practices that align with stockholder value creation and stakeholder expectations. | | Human Capital Management | Experience managing or overseeing the business function that attracts, motivates, develops and retains qualified personnel in a competitive talent environment and fostering a corporate culture that encourages and promotes accountability, performance and belonging. | | Other Public Company Board Service | Insight into ensuring strong board and management accountability, protecting stockholder interests, overseeing enterprise risk and adhering to leading governance practices. |
Director Nominees
| 14 | • 2024 Proxy Statement |
Director Nominees
Director Nominees
Director Biographies
Director Biographies
Director Biographies
| | | | | | | | RODNEY C. ADKINS President of 3RAM Group LLC INDEPENDENT | Board Committees: • ARC • Governance | Director since: September 2017 | Age: 65 |
Director Biographies
Experience, Skills and Qualifications Relevant to Nomination Includes:
Director Biographies
| • | Extensive experience in the technology industry including leadership positions in multiple business units within IBM, including emerging technologies, strategy, global business operations, innovation, product development and brand management |
Director Biographies
| • | Significant experience in corporate finance, financial statements and accounting |
Director Biographies
| • | In-depth expertise in corporate governance matters as a board member of other public companies |
Director Biographies
| • | Expertise in supply chain, procurement and global trade |
Director Biographies
Other Public Company Boards:
Director Biographies
| • | United Parcel Service, Inc. since 2013 |
Director Biographies
| • | W.W. Grainger, Inc. since July 2014 |
Director Biographies
| • | Avnet, Inc. (Chair) since 2015 |
Director Biographies
Former Public Company Boards within Last Five Years:
Director Biographies
| • | PPL Corporation from August 2014 to May 2019 |
Director Biographies
Career Highlights:
Director Biographies
| • | President of 3RAM Group LLC, a privately held company specializing in capital investments, business consulting services and property management since January 2015 |
Director Biographies
| • | Spent over 30 years at International Business Machines Corporation (“IBM”) in various development and management roles, including Senior Vice President of Corporate Strategy from April 2013 to April 2014, Senior Vice President of Systems and Technology Group from October 2009 to April 2013, Senior Vice President of Development & Manufacturing from May 2007 to October 2009 and Vice President of Development of IBM Systems and Technology Group from December 2003 to May 2007 |
Director Biographies
| | | | | | | | ALEX CHRISS President and Chief Executive Officer of PayPal | Board Committees: • None | Director since: September 2023 | Age: 46 |
Director Biographies
Experience, Skills and Qualifications Relevant to Nomination Includes:
Director Biographies
| • | Extensive product, technology and global payments experience |
Director Biographies
| • | Deep expertise in leading high-growth businesses focused on customer-driven innovation |
Director Biographies
Other Public Company Boards:
Director Biographies
| • | None |
Director Biographies
Former Public Company Boards within Last Five Years:
Director Biographies
| • | None |
Director Biographies
Career Highlights:
Director Biographies
| • | President and Chief Executive Officer of PayPal since September 2023 |
Director Biographies
| • | Executive Vice President and General Manager, Small Business and Self-Employed, of Intuit Inc. from January 2019 to September 2023 |
Director Biographies
| • | Led a global organization responsible for delivering QuickBooks and Mailchimp to millions of customers and for more than half of Intuit’s revenue |
Director Biographies
| • | Led Intuit’s successful acquisition of Mailchimp, significantly expanding the capacity of Intuit’s platform and its customer base |
Director Biographies
| • | Senior Vice President and Chief Product Officer, Small Business organization of Intuit from January 2017 to December 2018 |
Director Biographies
| • | Managed the full suite of QuickBooks products, including payroll and payments platform segments |
Director Biographies
| • | Vice President and General Manager, Self-Employed segment of Small Business division of Intuit, Inc. from August 2013 to December 2016 |
Director Biographies
| • | Various positions of increasing responsibility at Intuit, Inc. from July 2004 to July 2013 including Business Leader and Director, Intuit Partner Platform |
Director Biographies
| • 2024 Proxy Statement | 17 |
Director Biographies
Director Biographies
Director Biographies
| | | | | | | | JONATHAN CHRISTODORO Partner at Patriot Global Management, LP INDEPENDENT | Board Committees: • Compensation • Governance | Director since: July 2015 | Age: 47 |
Director Biographies
Experience, Skills and Qualifications Relevant to Nomination Includes:
Director Biographies
| • | Extensive financial, strategic planning and investment banking experience advising public companies, including at the board level |
Director Biographies
| • | Significant experience as both a director and an investor in identifying and evaluating mergers and acquisitions and investment opportunities and portfolio companies across a range of industries, including technology |
Director Biographies
Other Public Company Boards:
Director Biographies
| • | None |
Director Biographies
Former Public Company Boards within Last Five Years:
Director Biographies
| • | Frontier Acquisition Corp. from February 2021 to March 2023 |
Director Biographies
| • | Pioneer Merger Corp. from November 2020 to January 2023 |
Director Biographies
| • | Sandridge Energy, Inc. from June 2018 to May 2021 |
Director Biographies
| • | Xerox Corporation from June 2016 to May 2021 |
Director Biographies
| • | Herbalife Ltd. from April 2013 to January 2021 |
Director Biographies
| • | Lyft, Inc. from May 2015 to March 2019 |
Director Biographies
Career Highlights:
Director Biographies
| • | Partner at Patriot Global Management, LP, an investment management firm since March 2019 |
Director Biographies
| • | Managing Director of Icahn Capital LP, the entity through which Carl C. Icahn manages investment funds from July 2012 to February 2017. |
Director Biographies
| • | Served in various investment and research roles from March 2007 to July 2012 |
Director Biographies
| • | Began his career as an investment banking analyst at Morgan Stanley, where he focused on merger and acquisition transactions across a variety of industries |
Director Biographies
| • | Served in the United States Marine Corps |
Director Biographies
| | | | | | | | JOHN J. DONAHOE President and Chief Executive Officer of Nike, Inc. INDEPENDENT BOARD CHAIR | Board Committees: • None | Director since: July 2015 | Age: 63 |
Director Biographies
Experience, Skills and Qualifications Relevant to Nomination Includes:
Director Biographies
| • | As eBay Inc. President and CEO, oversaw successful separation of PayPal from eBay Inc. and its establishment as an independent public company |
Director Biographies
| • | Expertise in commerce, technology, global strategy, operations and executive leadership |
Director Biographies
| • | Extensive track record of creating value, driving innovation and scaling large technology and consumer-facing companies |
Director Biographies
Other Public Company Boards:
Director Biographies
| • | Nike, Inc. since June 2014 |
Director Biographies
Former Public Company Boards within Last Five Years:
Director Biographies
| • | ServiceNow, Inc. from April 2017 to June 2020 |
Director Biographies
Career Highlights:
Director Biographies
| • | President and Chief Executive Officer of Nike, Inc. since January 2020 |
Director Biographies
| • | President and Chief Executive Officer of ServiceNow, Inc., a cloud computing company from April 2017 to December 2019 |
Director Biographies
| • | President and Chief Executive Officer of eBay Inc. from March 2008 to July 2015, and director of eBay Inc. from January 2008 to July 2015 |
Director Biographies
| • | President, eBay Marketplaces from March 2005 to January 2008 |
Director Biographies
| • | Worldwide Managing Director of Bain & Company from January 2000 to February 2005 |
Director Biographies
| 18 | • 2024 Proxy Statement |
Director Biographies
Director Biographies
Director Biographies
| | | | | | | | DAVID W. DORMAN Former Non-Executive Board Chair of CVS Health Corporation INDEPENDENT | Board Committees: • Compensation (Chair) • Governance | Director since: June 2015 | Age: 70 |
Director Biographies
Experience, Skills and Qualifications Relevant to Nomination Includes:
Director Biographies
| • | In-depth board chair and executive-level experience leading global companies in regulated industries including technology, telecommunications and health care |
Director Biographies
| • | Expertise in finance, mergers and acquisitions and investments, strategic planning |
Director Biographies
| • | Public company executive compensation, talent management and executive leadership expertise |
Director Biographies
Other Public Company Boards:
Director Biographies
| • | Dell Technologies, Inc., since September 2016 |
Director Biographies
Former Public Company Boards within Last Five Years:
Director Biographies
| • | CVS Health Corporation from March 2006 to May 2022 |
Director Biographies
Career Highlights:
Director Biographies
| • | Founding Partner of Centerview Capital Technology Fund, a private investment firm since July 2013 |
Director Biographies
| • | Board Chair of InfoWorks, a portfolio company of Centerview since January 2019 |
Director Biographies
| • | Board of Directors of CVS Health Corporation from March 2006 until May 2022 including Non-Executive Board Chair from March 2011 until May 2022 |
Director Biographies
| • | Lead Independent Director of the Board of Motorola Solutions, Inc. (formerly Motorola, Inc.), a leading provider of business and communication products and services from May 2011 until May 2015 |
Director Biographies
| • | Non-Executive Board Chair of Motorola, Inc. from May 2008 to January 2011 |
Director Biographies
| • | Senior Advisor and Managing Director to Warburg Pincus LLC, a global private equity firm from October 2006 to May 2008 |
Director Biographies
| • | President and a director of AT&T Corporation from November 2005 to January 2006 |
Director Biographies
| • | Board Chair and Chief Executive Officer of AT&T Corporation from November 2002 to November 2005 |
Director Biographies
| • | President of AT&T Corporation, from 2000 to 2002, and the Chief Executive Officer of Concert Communications Services, a former global venture created by AT&T Corporation and British Telecommunications plc from 1999 to 2000 |
Director Biographies
| • | Served as a Trustee for Georgia Tech Foundation, Inc. |
Director Biographies
| | | | | | | | ENRIQUE LORES President and CEO, HP Inc. INDEPENDENT | Board Committees: • ARC | Director since: June 2021 | Age: 58 |
Director Biographies
Experience, Skills and Qualifications Relevant to Nomination Includes:
Director Biographies
| • | Deep product and operational experience at the highest levels of the information technology industry |
Director Biographies
| • | Proven leader in consumer-facing business with extensive international business and leadership experience and global perspective |
Director Biographies
Other Public Company Boards:
Director Biographies
| • | HP Inc. since November 2019 |
Director Biographies
Former Public Company Boards within Last Five Years:
Director Biographies
| • | None |
Director Biographies
Career Highlights:
Director Biographies
| • | President and Chief Executive Officer of HP Inc., an information technology company since November 2019 |
Director Biographies
| • | President, Imaging and Printing Solutions, HP Inc. from November 2015 to October 2019 |
Director Biographies
| • | Spent over 30 years at The Hewlett-Packard Company in several positions of increasing responsibility ranging from Vice President, Imaging & Printing Group, EMEA to Senior Vice President & General Manager, Business Personal Systems and then Separation Leader from 1989 to 2015 |
Director Biographies
| • 2024 Proxy Statement | 19 |
Director Biographies
Director Biographies
Director Biographies
| | | | | | | | GAIL J. MCGOVERN President and Chief Executive Officer of the American Red Cross INDEPENDENT | Board Committees: • Compensation • Governance (Chair) | Director since: June 2015 | Age: 72 |
Director Biographies
Experience, Skills and Qualifications Relevant to Nomination Includes:
Director Biographies
| • | Extensive executive experience in strategic planning across a global organization operating in challenging environments, sales and marketing, customer relations and corporate finance |
Director Biographies
| • | Strong expertise in regulatory matters and government relations garnered through leadership positions in regulated industries |
Director Biographies
| • | Brings a strong perspective from the academic and nonprofit worlds aligned with PayPal’s mission and vision |
Director Biographies
Other Public Company Boards:
Director Biographies
| • | DTE Energy Company since June 2003 |
Director Biographies
Former Public Company Boards within Last Five Years:
Director Biographies
| • | None |
Director Biographies
Career Highlights:
Director Biographies
| • | President and Chief Executive Officer of the American Red Cross, a humanitarian organization since June 2008 |
Director Biographies
| • | Faculty member at the Harvard Business School from 2002 to 2008 |
Director Biographies
| • | President of Fidelity Personal Investments from 1998 to 2002 |
Director Biographies
| • | Executive Vice President, Consumer Markets Division at AT&T Corporation from 1997 to 1998 |
Director Biographies
| • | Serves as a trustee of The Johns Hopkins University School of Medicine |
Director Biographies
| | | | | | | | DEBORAH M. MESSEMER Former Major Market Managing Partner at KPMG INDEPENDENT | Board Committees: • ARC (Audit Committee Financial Expert) | Director since: January 2019 | Age: 66 |
Director Biographies
Experience, Skills and Qualifications Relevant to Nomination Includes:
Director Biographies
| • | More than 30 years of experience in finance, strategy, market development, regulation, governance and operations |
Director Biographies
| • | Strong leadership and people management experience as the Managing Partner of KPMG’s Bay Area and Northwest region, having led a team of over 3,000 employees |
Director Biographies
| • | Extensive expertise in financial reporting, due diligence, mergers and acquisitions and internal controls over financial reporting as Audit Engagement Partner or Senior Relationship Partner for companies in a variety of industries, including financial services and technology |
Director Biographies
Other Public Company Boards:
Director Biographies
| • | Allogene Therapeutics, Inc. since October 2018 |
Director Biographies
| • | TPG, Inc. since January 2022 |
Director Biographies
Former Public Company Boards within Last Five Years:
Director Biographies
| • | None |
Director Biographies
Career Highlights:
Director Biographies
| • | Served for over 35 years at KPMG, one of the world’s leading professional services firms, first in the audit practice, then as Audit Engagement Partner or Global Senior Relationship Partner for clients in a variety of industries, including financial services and technology. She was Managing Partner of KPMG’s Bay Area and Northwest region, responsible for leading teams in 10 offices across all functions from 2008 through her retirement in September 2018 |
Director Biographies
| • | Served on the Board of Directors of Carbon, Inc., a privately held company |
Director Biographies
| 20 | • 2024 Proxy Statement |
Director Biographies
Director Biographies
Director Biographies
| | | | | | | | DAVID M. MOFFETT Former Chief Executive Officer of Federal Home Loan Mortgage Corp. INDEPENDENT | Board Committees: • ARC (Chair) (Audit Committee Financial Expert) | Director since: June 2015 | Age: 72 |
Director Biographies
Experience, Skills and Qualifications Relevant to Nomination Includes:
Director Biographies
| • | Strong leadership experience and extensive global financial management and regulatory expertise as a former Chief Executive Officer and Chief Financial Officer of financial services companies |
Director Biographies
| • | More than 30 years of strategic finance, mergers and acquisitions, risk management and operational experience in banking and payment processing |
Director Biographies
Other Public Company Boards:
Director Biographies
| • | Columbia Seligman Premium Technology Growth Fund, Inc. since January 2024 |
Director Biographies
| • | Tri-Continental Corp. since January 2024 |
Director Biographies
| • | CSX Corporation since May 2015 |
Director Biographies
Former Public Company Boards within Last Five Years:
Director Biographies
| • | Genworth Financial, Inc. from December 2012 to May 2021 |
Director Biographies
Career Highlights:
Director Biographies
| • | Lead Independent Director of PayPal from July 2015 to December 2018 |
Director Biographies
| • | Chief Executive Officer of Federal Home Loan Mortgage Corp. (“Freddie Mac”) from September 2008 until his retirement in March 2009, and director of Freddie Mac from December 2008 to March 2009 |
Director Biographies
| • | Chief Financial Officer of Star Banc Corporation, a bank holding company, starting in 1993. During his tenure, he played an integral role in the acquisition of Firstar Corporation in 1998 and later U.S. Bancorp in 2001. Mr. Moffett remained Chief Financial Officer of U.S. Bancorp until 2007 |
Director Biographies
| • | Serves as a Trustee for Columbia Threadneedle Mutual Funds and University of Oklahoma Foundation and as a consultant to various financial services companies |
Director Biographies
| | | | | | | | ANN M. SARNOFF Former Chair and Chief Executive Officer of WarnerMedia Studios & Networks Group INDEPENDENT | Board Committees: • ARC | Director since: June 2017 | Age: 62 |
Director Biographies
Experience, Skills and Qualifications Relevant to Nomination Includes:
Director Biographies
| • | More than 30 years of diversified business experience through a variety of executive leadership roles at preeminent global media companies |
Director Biographies
| • | Expertise in driving consumer engagement with a large and diverse spectrum of globally-recognized brands |
Director Biographies
| • | Proven ability to develop innovative partnerships and technology-focused solutions across platforms |
Director Biographies
| • | Extensive technology experience across media and platforms |
Director Biographies
Other Public Company Boards:
Director Biographies
| • | None |
Director Biographies
Former Public Company Boards within Last Five Years:
Director Biographies
| • | None |
Director Biographies
Career Highlights:
Director Biographies
| • | Career Highlights Chair and Chief Executive Officer of WarnerMedia Studios & Networks Group, a global leader in entertainment and consumer products from August 2020 to April 2022 |
Director Biographies
| • | Chair and Chief Executive Officer of Warner Bros. Entertainment from August 2019 to August 2020 |
Director Biographies
| • | President of BBC Studios Americas from August 2015 to August 2019 |
Director Biographies
| • | Chief Operating Officer of BBC Worldwide North America from 2010 to July 2015 |
Director Biographies
| • | Served on the board of directors of HSN from December 2012 to December 2017. |
Director Biographies
| • | Board Chair of BritBox, a joint venture subscription streaming service launched in partnership with ITV in March 2017 |
Director Biographies
| • | Serves as vice chair of the boards of McDonough School of Business at Georgetown and The Shed, and serves as a member of the boards of directors of WTA Ventures and Cineworld Group PLC |
Director Biographies
| • 2024 Proxy Statement | 21 |
Director Biographies
Director Biographies
Director Biographies
| | | | | | | | FRANK D. YEARY Managing Member at Darwin Capital Advisors, LLC INDEPENDENT | Board Committees: • ARC | Director since: July 2015 | Age: 60 |
Director Biographies
Experience, Skills and Qualifications Relevant to Nomination Includes:
Director Biographies
| • | Notable career in investment banking and finance with financial strategy and global mergers and acquisitions expertise, including expertise in financial reporting and experience attracting and retaining strong senior leaders |
Director Biographies
| • | Tenure as Independent Chair at Intel enhances acumen in corporate governance and technology industry strategic oversight |
Director Biographies
| • | Extensive experience in corporate governance and stockholder engagement, including as a co-founder of CamberView Partners, a financial advisory firm providing independent, investor-led advice to public companies and their boards |
Director Biographies
| • | Role as a Vice Chancellor and as Chief Administration Officer of a large public research university provides strategic and financial expertise |
Director Biographies
Other Public Company Boards:
Director Biographies
| • | Intel Corporation (Chair) since March 2009 |
Director Biographies
| • | Mobileye Global, Inc. since October 2022 |
Director Biographies
Former Public Company Boards within Last Five Years:
Director Biographies
| • | None |
Director Biographies
Career Highlights:
Director Biographies
| • | Managing Member at Darwin Capital Advisors, LLC, a private investment firm since October 2018 and a Member since 2012 |
Director Biographies
| • | Executive Chair of CamberView Partners, LLC, a corporate advisory firm from 2012 to 2018 |
Director Biographies
| • | Vice Chancellor of the University of California, Berkeley, a public university, from 2008 to 2012, where he led and implemented changes to the university’s financial and operating strategy |
Director Biographies
| • | Spent 25 years in the finance industry, most recently as Managing Director, Global Head of Mergers and Acquisitions and as a member of the Management Committee at Citigroup Investment Banking |
Director Biographies
The Board and the Governance Committee believe that the combination of our director nominees’ qualifications, skills and experience will contribute to an effective Board and that, individually and collectively, the director nominees have the necessary qualifications to provide effective oversight of the business and quality advice and counsel to management. * * *
Director Biographies
| | THE BOARD RECOMMENDS A VOTE FOR EACH OF THE DIRECTOR NOMINEES. |
Director Biographies
| 22 | • 2024 Proxy Statement |
Director Biographies
Corporate Governance Corporate governance at PayPal is designed to promote the long-term interests of our stockholders, strengthen Board and management accountability, oversee risk assessment and management strategies, foster responsible decision-making and build public trust. We believe that strong corporate governance practices that provide meaningful rights to our stockholders and ensure Board and management accountability are essential to our long-term success.
2023 Director Compensation
2023 Director Compensation In late 2022, the Compensation Committee, after consultation with its independent compensation consultant, determined that the Company’s director compensation program continued to be aligned with market practices. Accordingly, no changes were made to the director compensation program for 2023. Each non-employee director of the Company was provided the following annual retainers following the first trading day after January 1, 2023:
2023 Director Compensation
| 2023 Annual Retainers: | | | All Non-Employee Directors | $80,000/year | | Non-Executive Board Chair | $87,500/year | | Lead Independent Director | $75,000/year | | ARC Committee Chair | $40,000/year | | Compensation Committee Chair | $25,000/year | | Governance Committee Chair | $20,000/year | | ARC Committee Member | $20,000/year | | Compensation Committee Member | $18,000/year | | Governance Committee Member | $10,000/year |
2023 Director Compensation
A non-employee director who served as the Non-Executive Board Chair and/or as the chair of a committee is entitled to receive the Non-Executive Board Chair annual retainer and/or committee chair annual retainer, as applicable, in addition to the non-employee director annual retainer. Board committee chairs, however, are not entitled to receive the committee member annual retainer in addition to the committee chair annual retainer. A non-employee director could elect to receive 100% of their annual retainer(s) in fully vested stock awards of PayPal common stock having a grant date fair value equal to the annual retainer(s), in lieu of cash. If, following the annual retainer payment date, a non-employee director is appointed or elected to serve as a member of the Board (or appointed to serve as a member of a committee or as a chair of a committee for which they were not a member or chair prior to such appointment), the non-employee director receives a prorated annual retainer, based on the number of days from the appointment or election date to December 31 of that year.
2023 Equity Awards
2023 Equity Awards In addition to the annual retainers, all non-employee directors received the following fully vested awards of PayPal common stock following the 2023 Annual Meeting of Stockholders.
2023 Equity Awards
| 2023 Equity Awards: | | | All Non-Employee Directors | $275,000 in PayPal common stock | | Non-Executive Board Chair | Additional $87,500 in PayPal common stock |
2023 Equity Awards
The number of shares of PayPal common stock subject to the equity award is determined by dividing the value of the annual equity award by the closing price of our common stock on the date of the annual stockholders meeting, rounded up to the nearest whole share.
2023 Equity Awards
| • 2024 Proxy Statement | 37 |
2023 Equity Awards
2023 Director Compensation
Deferred Compensation
Deferred Compensation Our non-employee directors are eligible to defer 5% to 100% of their annual retainers and equity awards pursuant to the PayPal Holdings, Inc. Deferred Compensation Plan (“DCP”), our non-qualified deferred compensation plan. The DCP allows participants to set aside tax-deferred amounts. The investment return on any deferred cash amounts is linked to the performance of a range of market-based investment choices made available pursuant to the DCP, and the investment return on any deferred equity awards is linked to the performance of PayPal common stock. Our non-employee directors can elect to begin distributions from the DCP following the termination of their services to PayPal or in a specified year (provided that a director’s DCP account will be distributed if the director’s service on the Board terminates prior to the specified year). Our non-employee directors can elect to receive their distributions as either a lump sum or annual installments over a period ranging from two to 15 years.
2023 Director Compensation Table
2023 Director Compensation Table The following table summarizes the total compensation earned by or paid to our non-employee directors for the fiscal year ended December 31, 2023.
2023 Director Compensation Table
| Name | Fees Earned or Paid in Cash(1) ($) | Stock Awards(2) ($) | All Other Compensation ($) | Total(3) ($) | | Rodney C. Adkins | 110,000 | 275,010 | — | 385,010 | | Jonathan Christodoro | 108,000 | 275,010 | — | 383,010 | | John J. Donahoe | 167,507 | 362,519 | — | 530,025 | | David W. Dorman | 115,002 | 275,010 | — | 390,012 | | Belinda J. Johnson | 100,012 | 275,010 | — | 375,022 | | Enrique Lores | 100,012 | 275,010 | — | 375,022 | | Gail J. McGovern | 118,000 | 275,010 | — | 393,010 | | Debbie M. Messemer | 100,000 | 275,010 | — | 375,010 | | David M. Moffett | 120,000 | 275,010 | — | 395,010 | | Ann M. Sarnoff | 100,012 | 275,010 | — | 375,022 | | Frank D. Yeary | 100,012 | 275,010 | — | 375,022 |
2023 Director Compensation Table
| (1) The amounts reported in the Fees Earned or Paid in Cash column reflect the annual cash retainer amounts earned by each non-employee director in 2023, which includes annual retainer amounts for which the following directors elected to receive fully vested shares of PayPal common stock in lieu of cash: |
2023 Director Compensation Table
| Name | Fees Forgone ($) | Shares Received (#) | | John J. Donahoe | 167,500 | 2,246 | | David W. Dorman | 115,000 | 1,542 | | Belinda J. Johnson | 100,000 | 1,341 | | Enrique Lores | 100,000 | 1,341 | | Ann M. Sarnoff | 100,000 | 1,341 | | Frank D. Yeary | 100,000 | 1,341 |
2023 Director Compensation Table
| (2) Amounts shown represent the grant date fair value of the equity awards granted on May 24, 2023 to our non-employee directors following our 2023 Annual Meeting of Stockholders, as computed in accordance with FASB ASC Topic 718. |
2023 Director Compensation Table
| (3) The amounts reported in the Fees Earned or Paid in Cash, Stock Awards and Total columns include amounts deferred under the DCP. |
2023 Director Compensation Table
| Name | Total DSUs Held (#) | Total Options Held (#) | | Jonathan Christodoro | 5,353 | — | | John J. Donahoe | 2,464 | — | | David W. Dorman | 9,488 | — | | Gail J. McGovern | 3,711 | — | | David M. Moffett | 49,001 | — | | Frank D. Yeary | 5,460 | — |
2023 Director Compensation Table
| • 2024 Proxy Statement | 39 |
2023 Director Compensation Table
Corporate Sustainability and Impact Oversight and Management Our Leadership Principles Put people First Work customer back Win together Build the next generation, unlocking their superpowers Provide and seek constructive feedback - clear is kind Choose inclusion and foster belonging Work customer back Focus on our customers greatest needs, sweating every detail Solve with tech and innovation Create simple and valuable customer experiences Win together Do the right thing Operate with velocity and an ownership mindset Deliver great end-to-end results Work as One PayPal Integrated with Our Values: Inclusion l Innovation l Collaboration l Wellness PayPal recognizes the importance of operating our business in a responsible and sustainable manner. We believe that effective prioritization and management of non-financial risks and opportunities are important to furthering the long-term interests of our business and play an important role in creating value for our stockholders, customers, employees and other stakeholders. Accordingly, we strive to maintain the highest standards of governance in these areas and provide regular, non-financial reporting on our progress and activities. As we continue to evolve our corporate sustainability and impact (“CSI”) efforts, we are committed to sharing progress through subsequent reports and updates. This Corporate Sustainability and Impact Oversight and Management section is a high-level overview of our programs and initiatives. For more in-depth information, see our latest annual Global Impact Report available at https://investor.pypl.com/csi-strategy.
Message from Our Compensation Committee
Message from Our Compensation Committee Dear PayPal Stockholders, As the Compensation Committee of PayPal, we are driven by the goal of maximizing value for our stockholders over the long term. We recognize that the creation of long-term stockholder value begins with attracting exceptionally talented leaders and aligning the incentives of those leaders with those of our stockholders. 2023 was a transformative year for PayPal as we focused on refreshing our culture of innovation and welcomed a new CEO, a new CFO, and several additional new executives to our leadership team. Throughout our leadership team transformation, our efforts have been, and continue to be, guided by (1) input from our stockholders, (2) our rigorous pay-for-performance philosophy, and (3) our commitment to an executive compensation program that is transparent, creates appropriate incentives, and aligns with stockholder interests. Executive Leadership Transitions and Related Compensation Decision-Making In February 2023, Dan Schulman announced his intention to retire from the role of President and CEO at year-end. After a rigorous search process, Alex Chriss joined PayPal as President and CEO in September, followed by our new CFO, Jamie Miller, who joined in November. Mr. Chriss joined PayPal from Intuit, and has extensive product, technology and global payments experience, which will enable him to drive growth across the PayPal platform for years to come. Ms. Miller was most recently Global CFO of EY, and brings a proven track record of driving strong financial results. In structuring the compensation for our new executives, the Compensation Committee focused on creating attractive compensation opportunities that would induce these talented, sought-after leaders to join PayPal while also providing the appropriate incentives to drive long-term value creation and retention and align Mr. Chriss and Ms. Miller’s interests with those of our stockholders. Both Mr. Chriss and Ms. Miller received an initial grant of restricted stock unit (“RSU”) and performance-based restricted stock unit (“PBRSU”) awards, consistent with the grants we make for our executive officers on an annual basis. In addition, Mr. Chriss was granted make-whole RSUs, which were important to successfully recruit him
Message from Our Compensation Committee
Message from Our Compensation Committee from his prior employer, where he forfeited significant equity greater in value than the target grant date value of his make-whole grant upon joining PayPal. Ms. Miller was also granted sign-on incentive RSUs to establish an ownership stake, aligning her interests with those of our stockholders. Neither will receive any equity awards in the 2024 rewards cycle beyond those described above. We believe these new leaders position PayPal for continued growth, and the incentives each were granted upon joining PayPal provide strong alignment with our long-term performance and the interests of our stockholders. In order to ensure the Board had sufficient time to conduct a rigorous search process, identify the best successor for Mr. Schulman, and facilitate an orderly CEO transition following the announcement of Mr. Schulman’s retirement, in February 2023, the Compensation Committee (1) guaranteed that Mr. Schulman would receive his base salary and 2023 Annual Incentive Plan bonus for 2023 and (2) approved Mr. Schulman’s annual long-term incentive award, which was designed to support a successful transition of Mr. Schulman’s CEO duties to his successor and to maintain Mr. Schulman’s alignment to the long term performance of PayPal. In determining the target value of Mr. Schulman’s long term incentive award, the Committee considered past performance against financial, strategic and operational objectives and our stockholders’ experience, and determined to reduce the target value from $24 million in 2022 to $18.7 million for 2023, reflecting our pay-for-performance philosophy. Mr. Schulman’s long term incentive award included performance-based restricted stock units (“PBRSUs”), restricted stock units (“RSUs”), and transition-related performance-based RSU awards, the latter of which were designed to vest contingent on Mr. Schulman’s successful completion of two performance conditions: 50% upon the new CEO’s start date and the other 50% in June 2024, in anticipation of Mr. Schulman completing the transition of his duties and stepping down from the Board of Directors in May 2024 at the end of his current term. Ultimately, Mr. Schulman facilitated a smooth and effective transition, enabling Mr. Chriss to onboard more quickly than anticipated and allowing Mr. Schulman to complete the transition and retire from the Board in December 2023. The Compensation Committee determined that it would be appropriate to accelerate the vesting of the performance-based RSUs granted with respect to the second performance condition to match the timing of Mr. Schulman’s retirement from the Board, as Mr. Schulman’s performance of his transition responsibilities had been completed. Stockholder Feedback and 2023 Say-on-Pay Vote The perspectives of our stockholders on our business and governance practices, including our executive compensation program, have always been a key input in our decision-making process. PayPal’s historically strong say-on-pay vote results demonstrate overall investor support for our program. Our 2023 say-on-pay vote, although supported by a substantial majority of our stockholders at 78% support, reflected a decrease in support compared to the prior year; this led the Compensation Committee to seek input from stockholders specifically regarding our compensation practices. In response to the 2023 Say-on-Pay vote, as well as our CEO search, we conducted robust outreach to stockholders in 2023 to solicit input on these key topics. Since our 2023 Annual Meeting, we sought meetings with investors representing approximately 50% of our common stock and successfully engaged with investors holding approximately 19% of our common stock. In these conversations, some of which included members of our Board, we were pleased to learn that stockholders broadly continue to support the fundamentals of our program and its alignment of pay and performance. Stockholders also provided input on the key criteria for our CEO search, and later expressed support for the hiring of Mr. Chriss, who brings extensive product and technology leadership experience, and conveyed that they understand the competitive market for talented executives in our industry. We discussed new-hire related compensation and the importance of tying those incentives closely to our strategy and long-term performance criteria. We also discussed enhancements that the Compensation Committee could make going forward. Stockholders shared diverse perspectives, but we noted themes including the opportunity to adopt different performance metrics to ensure continued alignment with our evolving strategy, such as placing more emphasis on profitability-linked metrics and exploring the potential inclusion of a relative TSR or return on capital metric. 2024 Compensation Program Enhancements Informed by Investor Feedback With investor feedback front of mind, the Compensation Committee determined to make several enhancements to both our annual and long-term incentive plans to strengthen pay for performance alignment, increase the focus on profitable growth, reduce burn rate and address historical challenges experienced in connection with setting long-term performance goals. In the annual incentive plan, starting with 2024 compensation, we have updated the underlying metrics from revenue and non-GAAP operating margin to non-GAAP operating income and transaction margin dollars. This will more closely align performance goals to our current strategy, including additional focus on driving profitable growth. We will also move to 100% cash compensation for the annual incentive plan, aligning payouts with intended rewards and reducing our burn rate. Additionally, beginning with first quarter 2024 results, non-GAAP operating income will include the impact of stock-based
Message from Our Compensation Committee
Message from Our Compensation Committee compensation expense, which will no longer be excluded from non-GAAP results. We believe this change to our financial reporting will introduce greater transparency, accountability, and discipline, while better aligning our own performance measures to the way that many investors already evaluate our business. In the long-term incentive plan, starting with the 2024 grant, our PBRSUs will be earned based on a relative total shareholder return metric, measured as compared to the S&P 500, instead of the FX-neutral revenue compound annual growth rate and free cash flow compound annual growth rate metrics. This will more closely align pay with long-term shareholder value, while effectively motivating leaders to successfully and holistically drive PayPal’s evolving strategy. Additionally, we will use a three-year performance period with three discrete measurement periods of 12, 24, and 36 months in calculating payouts to minimize the potential impact of short-term share price volatility; the PBRSU awards granted in 2024 will vest only at the end of the full three-year vesting period to maintain maximal retentive value and a focus on long-term value creation. The Path Forward The enhancements to our 2024 compensation program outlined above reflect the feedback we received from stockholders and will ensure continued strong pay-for-performance alignment. This past year has been pivotal for PayPal, and we have appreciated the opportunity to incorporate stockholder views as the Compensation Committee made critical compensation decisions. We look forward to continuing our dialogue with investors.
Leadership Changes and Related Compensation
Leadership Changes and Related Compensation Mr. Schulman’s announcement in February 2023 that he planned to retire on December 31, 2023 was a catalyst for our leadership team transformation in 2023. Mr. Schulman’s longstanding leadership at PayPal made a positive and lasting impact, and the Board was committed to identifying a successor with extensive product, technology, and global payments experience who would build on Mr. Schulman’s contributions and be a next generation leader, capable of driving growth across the PayPal platform for years to come. Largely in connection with the appointment of Mr. Schulman’s successor, we reconstituted our leadership team in late 2023 and early 2024. For a summary of each incoming NEO’s new hire compensation, see the section below titled “Offer Letter Compensation for New NEOs.” Additional details regarding Alex Chriss’ offer letter, Jamie Miller’s offer letter and Gabrielle Rabinovitch’s transition agreement are also available on PayPal’s Current Reports on Form 8-K filed on August 14, 2023, November 1, 2023, and December 22, 2023, respectively. For detailed information on each departing NEO’s severance, transition, or retirement benefits, as applicable, see the section below titled “Potential Payments Upon Termination or Change in Control Table – Executive Departure-Related Compensation.” Chief Executive Officer Transition Following a rigorous and thorough CEO search process conducted by the Board, PayPal identified Mr. Chriss as Mr. Schulman’s successor and entered into an offer letter with Mr. Chriss setting out the terms of his employment and compensation. In August 2023, PayPal announced that Mr. Chriss would become PayPal’s President and Chief Executive Officer and a member of the Board, effective September 27, 2023. Mr. Schulman’s last day of employment with PayPal was September 26, 2023, and he retired from the Board effective as of December 31, 2023. The PayPal Holdings, Inc. Executive Change in Control and Severance Plan, as amended and restated (the “Executive Severance Plan”) previously filed with the SEC on February 8, 2024 as Exhibit 10.05 to PayPal’s Annual Report on Form 10-K provides for certain retirement severance benefits in connection with a Qualifying Retirement (as defined in the Executive Severance Plan). Mr. Schulman’s retirement constituted a Qualifying Retirement under the Executive Severance Plan. On December 12, 2023, Mr. Schulman entered into a retirement agreement with PayPal (the “Schulman Retirement Agreement”), which documented his retirement benefits and the conditions to receive them. Chief Financial Officer Transition Following Mr. Jorgensen’s appointment as PayPal’s Chief Financial Officer effective August 3, 2022, on September 14, 2022, PayPal announced that Mr. Jorgensen was taking a leave of absence for health reasons. Mr. Jorgensen ceased serving as Chief Financial Officer effective March 7, 2023, and thereafter served as a senior advisor to PayPal through September 15, 2023. Mr. Jorgensen’s employment with PayPal terminated on September 15, 2023 and his separation constituted an involuntary termination by PayPal without Cause (as defined in the Executive Severance Plan), which qualified him for severance in accordance with the terms and conditions of the Executive Severance Plan. PayPal and Mr. Jorgensen entered into a separation agreement on March 3, 2023 (the “Jorgensen Separation Agreement”), which provided for the payment of severance benefits to Mr. Jorgensen under Appendix A of the Executive Severance Plan in exchange for a release of claims and other valuable consideration. Upon commencement of Mr. Jorgensen’s leave of absence, from September 14, 2022 until November 6, 2023, Ms. Rabinovitch served as PayPal’s acting Chief Financial Officer, in addition to her continuing duties as Senior Vice President, Investor Relations and Treasurer. Upon Ms. Miller’s appointment as PayPal’s Chief Financial Officer effective November 6, 2023, Ms. Rabinovitch ceased to serve as PayPal’s acting Chief Financial Officer, but otherwise continued to serve in her prior role through year-end. Following a transition period that began on January 1, 2024, during which Ms. Rabinovitch provided transition services to PayPal as an officer on a part-time basis, Ms. Rabinovitch’s employment with PayPal terminated on January 31, 2024, and her separation constituted an involuntary termination by PayPal without Cause (as defined in the Executive Severance Plan). The unique nature of Ms. Rabinovitch’s roles at PayPal, her leadership of our financial operations at two key transitional points – first as interim Chief Financial Officer for approximately 2 months and later as acting Chief Financial Officer for an additional period of approximately 14 months – in addition to her significant experience as head of Investor Relations and Treasurer, made it critical to obtain transition services from Ms. Rabinovitch through January 31, 2024. In lieu of paying Ms. Rabinovitch severance in accordance with the Executive Severance Plan, on December 21, 2023 PayPal entered into an individually negotiated transition agreement with Ms. Rabinovitch (the “Rabinovitch Transition Agreement”). On October 29, 2023, in connection with Ms. Miller’s appointment as PayPal’s Chief Financial Officer, PayPal entered into an offer letter with Ms. Miller setting forth the terms and conditions of her employment and compensation.
Leadership Changes and Related Compensation
Executive Summary Other NEO Transitions Following Mr. Chriss’ appointment to the CEO role, PayPal further strengthened its next generation leadership team by hiring seasoned leaders across several key roles, including Ms. Gill, whom PayPal brought on in November 2023 to serve as PayPal’s Executive Vice President, General Manager of the newly formed Small Business and Financial Services Group. Ms. Gill will be accountable for bringing together the ecosystem of products and services that help small business owners run and grow their businesses into a unified offering. On October 23, 2023, PayPal entered into an offer letter with Ms. Gill setting out the terms of her employment and compensation. In January 2024, Suzan Kereere joined PayPal as President, Global Markets. Following Ms. Kereere’s appointment, Ms. Alford, PayPal’s former Executive Vice President, Global Sales and Merchant Services, departed from PayPal on January 31, 2024. Her separation constituted an involuntary termination by PayPal without Cause (as defined in the Executive Severance Plan) and a Job Elimination (as defined in the Executive Long Term Incentive Program (“ELTIP”) contained in Appendix B of the Executive Severance Plan), which qualified Ms. Alford for severance in accordance with the terms and conditions of the Executive Severance Plan. PayPal and Ms. Alford entered into a separation agreement on January 8, 2024 (the “Alford Separation Agreement”), which provided for the payment of severance benefits to Ms. Alford under Appendix A of the Executive Severance Plan and the ELTIP, in exchange for a release of claims and other valuable consideration. In connection with a restructuring related to the leadership changes described above, Aaron Karczmer, PayPal’s Executive Vice President, Chief Enterprise Services Officer, will depart from PayPal on April 30, 2024. His separation constitutes a resignation by Mr. Karczmer due to Good Reason (as defined in the Executive Severance Plan), which qualifies Mr. Karczmer for severance in accordance with the terms and conditions of the Executive Severance Plan. PayPal and Mr. Karczmer entered into a separation agreement on February 7, 2024 (the “Karczmer Separation Agreement”), which provides for the payment of severance benefits to Mr. Karczmer under Appendix A of the Executive Severance Plan, in exchange for a release of claims and other valuable consideration.
Offer Letter Compensation for New NEOs
| NEO | Annual Base Salary Rate ($) | Target Annual Incentive Plan Bonus as a Percentage of Annual Base Salary | Initial RSU Grant ($)(1) | Initial PBRSU Grant (at target) ($)(2) | | Alex Chriss President & Chief Executive Officer | 1,250,000 | 200% | 16,750,000 | 17,000,000 | | Jamie Miller EVP, Chief Financial Officer | 750,000 | 125% | 6,250,000 | 6,250,000 | | Michelle Gill EVP, General Manager – Small Business & Financial Services Group | 750,000 | 125% | 6,250,000 | 6,250,000 |
Offer Letter Compensation for New NEOs
| (1) Initial RSU Grants follow PayPal’s standard 3-year vesting schedule. Amounts reflects grant date value. |
Offer Letter Compensation for New NEOs
| (2) Initial PBRSU Grants follow PayPal’s standard PBRSU vesting schedule, with their payout contingent on PayPal’s performance over the three-year performance period. The three-year period applicable to Mr. Chriss’ Initial PBRSU Grant began on January 1, 2023 (based on Mr. Chriss’ start date, which was earlier than that of Mses. Miller and Gill) and the three-year period applicable to Ms. Miller’s and Ms. Gill’s Initial PBRSU Grants began on January 1, 2024. Amounts reflect target grant date value and may differ from those reported in the Summary Compensation Table below. |
Offer Letter Compensation for New NEOs
| NEO | Cash Sign-On Bonus ($) | Make-Whole or Sign-On Incentive RSUs ($) | Total Non-Recurring, New Hire Awards ($) | | Alex Chriss President & Chief Executive Officer | N/A | 10,000,000(1) | 10,000,000 | | Jamie Miller EVP, Chief Financial Officer | 6,000,000(2) | 2,000,000(3) | 8,000,000 | | Michelle Gill EVP, General Manager – Small Business & Financial Services Group | 2,000,000(2) | 2,000,000(3) | 4,000,000 |
Offer Letter Compensation for New NEOs
| (1) Represents Make-Whole RSUs at grant date value, which vest as to 50% on the first anniversary of grant date and 50% on the second anniversary of the grant date, with acceleration upon a Qualifying Termination (as defined in the Executive Severance Plan) of employment. Mr. Chriss forfeited significant equity awards at his prior employer that were greater in value than the target grant date value of Mr. Chriss’ Make-Whole RSUs, which were intended to compensate Mr. Chriss for a portion of such forfeited awards. |
Offer Letter Compensation for New NEOs
| (2) 50% of the Cash Sign-On Bonus was payable in cash within the first two pay periods following the NEO’s start date, with the remaining 50% payable within two pay periods following the 6-month anniversary (each, an “installment”). If the NEO resigns or PayPal terminates the NEO’s employment for cause: (a) on or before the first anniversary of the payment date of the first installment, the NEO must repay 100% of the first installment; (b) after the first anniversary of the payment date of the first installment and on or before the second anniversary of the payment date of the first installment, the NEO must repay the first installment, less 1/24th of the first installment for every full month of the NEO’s active employment with PayPal following the NEO’s start date; and (c) on or before the first anniversary of the payment date of the second installment, the NEO must pay back 100% of the second installment. |
Offer Letter Compensation for New NEOs
| (3) Represents Sign-On Incentive RSUs at grant date value, which follow PayPal’s standard 3-year vesting schedule. |
2023 NEO Compensation Program Elements
| | Form of Payment | | Performance Period | Performance Criteria | Objectives | For More Information | | Salary | | Cash | Ongoing | Alignment of salary with performance is evaluated on an annual basis | • Compensates for expected day-to-day performance • Rewards individuals’ current contributions • Reflect scope of roles and responsibilities | Page 60 | | Annual Incentive Plan (“AIP”) | | PBRSUs | One year | Revenue and Non-GAAP Operating Margin | • Rewards successful annual performance • Motivates achievement of short-term performance goals designed to enhance value of PayPal • Significant equity portion to further align with stockholder interests | Page 61 | | | | Cash | One year | Individual Performance | | | | Long-Term Incentive Plan (“LTI”) | | PBRSUs | Three years | FX-Neutral Revenue Compound Annual Growth Rate (“CAGR”) and Free Cash Flow CAGR | • Rewards successful achievement of three-year performance goals designed to enhance long-term value of PayPal • Intended to satisfy long-term retention objectives | Page 67 | | | | RSUs | Vests over three years | Service-based vesting; ultimate value based on stock price performance | • Rewards the creation of long-term value • Recognizes potential future contributions • Intended to satisfy long-term retention objectives | Page 68 |
2023 Incentive Compensation Plan Outcomes
| Company Measure | Threshold (50% Payout)* | Target (100% Payout)* | Maximum (200% Payout)* | Actual Achieved | Actual Achieved (Percentage of Target Achieved) | | Revenue (in $ billions) | $27.52 | $28.42 | $29.32 | $29.77 | 200% | | Non-GAAP Operating Margin | 20.40% | 22.40% | 24.40% | 22.43% | 102% | | | Company Performance Score of the AIP | | | | 151% |
2023 Say-on-Pay Outcome and Stockholder Engagement
| New Hire Compensation for Joining Executives | • Supported hiring of Alex Chriss as PayPal’s CEO, recognizing his extensive product and technology leadership experience and understanding the competitive environment for talented executives • Understood the rationale for and structure of recent new-hire related awards, and encouraged that future new-hire related awards also include rigorous performance criteria clearly tied to PayPal’s go-forward strategy and have a reasonably long-term structure | | Incentive Program Metrics | • Interested in more emphasis on profitability-linked metrics • Encouraged including a relative TSR metric and/or return on capital metric in the long-term incentive program • Emphasized the importance of including stock-based compensation expense in non-GAAP metrics underlying the compensation program | | Disclosure | • Encouraged PayPal to continue providing thorough and transparent disclosure, especially with regard to individual performance evaluations that impact compensation | | Use of Equity for Compensation | • Understood the reasoning for PayPal’s broad-based equity incentive program and its position in PayPal’s culture and talent retention and acquisition strategies • Acknowledged the impact of a decline in share price on the number of shares needed to deliver market-competitive dollar values; nevertheless, encouraged thoughtful go-forward management of the burn rate |
2024 Compensation Program Changes Informed by Investor Feedback
| Enhancement | Rationale | | Redesign the plan to fund the bonus pool based on company performance and determine employee payouts based on individual performance | Company-wide bonus pool and resulting employee bonus starting point to be based on company performance, strengthening pay and performance alignment; individual performance modifier will provide for better upwards or downwards differentiation when specifically warranted | | Update metrics to Non-GAAP Operating Income and Transaction Margin Dollars (from Revenue and Non-GAAP Operating Margin) | Will more closely align performance goals to current Company strategy, including additional focus on driving profitable growth Additionally, stock-based compensation expense will be included in non-GAAP financial metric reporting, including non-GAAP Operating Income, beginning in 2024 | | Move to 100% cash compensation for short- term incentive program | Will align actual payout with intended value to be delivered and reduce burn rate |
2024 Compensation Program Changes Informed by Investor Feedback
| Enhancement | Rationale | | Move to relative total shareholder return (rTSR) metric, measured as compared to The S&P 500 (from FX-Neutral Revenue CAGR and Free Cash Flow CAGR), with the target for rTSR vs. the S&P 500 set at the 55th percentile | More closely aligns PBRSU payouts with long-term shareholder value while effectively motivating leaders to holistically execute during this transitional period while our strategy continues to evolve | | Three-year performance period using three discrete measurement periods of 12, 24, and 36 months in calculating payout; no vesting prior to end of the full three-year vesting period. If absolute TSR achievement is negative for the 36-month period, the maximum shares an executive could earn would be capped at 100% of the target number of shares | Will minimize the potential impact of short-term share price volatility, while maximizing retention value over the entire vesting period; designed to enhance the program’s durability and provide a holistic measure of long-term value creation during PayPal’s strategic pivot |
Key Compensation Policies and Practices
| What We Do | | | | Our AIP is entirely performance-based, and our NEOs are not guaranteed any minimum levels of payment under that plan. | | | | Pay for Performance | | More than 50% of our NEOs’ Target Total Direct Compensation is performance-based and tied to pre-established performance goals aligned with our short-term and long-term objectives. | | Rigorous performance goals | | We use objective performance-based Company goals that are designed to be rigorous in our incentive plans. | | Corporate sustainability and impact (“CSI”) considerations | | We incorporate CSI considerations, such as risk and compliance and Belonging, into our executive compensation program. | | Independent compensation consultant | | The Compensation Committee engages its own independent compensation consultant to advise on executive and director compensation matters. | | Annual compensation peer group review | | The Compensation Committee annually reviews the composition of our compensation peer group to evaluate whether the peer group remains appropriate in light of our size and industry. | | Annual say-on-pay vote | | We conduct an annual advisory say-on-pay vote on our NEO compensation. | | Stockholder engagement | | We are committed to ongoing engagement with our stockholders – including on executive compensation, corporate governance and CSI matters – through teleconferences, in-person meetings and correspondence. | | Annual compensation risk assessment | | We conduct an annual compensation risk assessment to evaluate whether our executive compensation program presents any risks that are reasonably likely to have a material adverse effect on PayPal. | | Clawback policies | | In 2023, we adopted a mandatory recovery policy to comply with Exchange Act Rule 10D-1 and the Nasdaq listing standards regarding recovery of erroneously awarded compensation in the event of an accounting restatement. In addition, the Compensation Committee can require forfeiture or reimbursement of incentive compensation paid or awarded to our NEOs in certain other circumstances under our other clawback policy. | | Robust stock ownership guidelines | | Our stock ownership guidelines require significant sustained ownership of PayPal common stock to align the long-term interests of our NEOs and non-employee directors with those of our stockholders and promote our commitment to sound corporate governance. | | Prohibition of hedging and pledging transactions | | Our insider trading policy, which applies to all Board members, executive officers and employees, prohibits the use of hedging and monetization transaction relating to our securities and the use of PayPal derivative securities as collateral in a margin account or for any loan or extension of credit. Board members and executive officers are prohibited, and all other employees are strongly discouraged, from pledging any PayPal securities as collateral for loans. | | Performance-based bonuses | | Our AIP is entirely performance-based, and our NEOs are not guaranteed any minimum levels of payment under that plan. | | What We Don’t Do | | | | No excise tax gross-ups on “change in control” payments | | We do not provide our NEOs with any excise tax gross-ups or other payment or reimbursement of excise taxes on severance in connection with a change in control of PayPal. | | No “single-trigger” CIC payments or acceleration of equity awards | | We do not make “single-trigger” change-in-control payments or maintain any plans that require single-trigger change-in-control acceleration of equity awards to our NEOs upon a change in control of PayPal. | | No tax gross-ups on perquisites | | We do not provide our NEOs with tax gross-ups on perquisites, other than in limited circumstances related to relocation and international business travel that are at our direction and deemed to benefit our business operations. | | No discounting of stock options or repricing of underwater options | | Our equity compensation plan expressly prohibits the discounting of the exercise price of stock options and the repricing of underwater stock options without stockholder approval. |
Executive Compensation Program Design
Executive Compensation Program Design Our key guiding principle for executive compensation is to closely align the compensation of our executives with the creation of long-term value for our stockholders. We do so by tying a significant portion of our executives’ Target Total Direct Compensation opportunity (composed of each NEO’s base salary, AIP target and LTI target) to PayPal’s performance. In designing our executive compensation program, the Compensation Committee prioritizes four goals: Transparency, Simplicity and Clarity Enable executives to directly link between Company and individual performance and their pay, and enable stockholders to directly link between returns on their investment and pay outcomes to Company performance. Winning the War For Talent Recognize the unique space in which we compete and prioritize nimble and aggressive compensation strategies to attract and retain key talent. One for Maintain unified goals and objectives of the annual Team short- and long-term incentive programs the entire executive leadership team to drive aligned operational decisions and Company performance. Individual Performance Deliver compensation commensurate with results, both on the upside and downside, and hold leaders accountable for their performance, including with respect to risk and compliance and Belonging within their respective organizations. Transparency, Simplicity and Clarity Enable executives to directly link between Company and individual performance and their pay, and enable stockholders to directly link between returns on their investment and pay outcomes to Company performance. Winning the War For Talent Recognize the unique space in which we compete and prioritize nimble and aggressive compensation strategies to attract and retain key talent. One Team Maintain unified goals and objectives of the annual short- and long-term incentive programs for the entire executive leadership team to drive aligned operational decisions and Company performance. Individual Performance Deliver compensation commensurate with results, both on the upside and downside, and hold leaders accountable for their performance, including with respect to risk and compliance and Belonging within their respective organizations. Transparency, Simplicity and Clarity Enable executives to directly link between Company and individual performance and their pay, and enable stockholders to directly link between returns on their investment and pay outcomes to Company performance. Winning the War For Talent Recognize the unique space in which we compete and prioritize nimble and aggressive compensation strategies to attract and retain key talent. One Team Maintain unified goals and objectives of the annual short- and long-term incentive programs for the entire executive leadership team to drive aligned operational decisions and Company performance. Individual Performance Deliver compensation commensurate with results, both on the upside and downside, and hold leaders accountable for their performance, including with respect to risk and compliance and Belonging within their respective organizations. When designing our executive compensation program, the Compensation Committee assessed competitive market data obtained from the public filings of our compensation peer group companies and general industry data for comparable technology and financial companies that are included in proprietary third-party compensation surveys. For more information, see “Our Structure for Setting Compensation.”
How We Determine Incentive Compensation
| • | performance against financial, strategic and operational objectives and performance measures; |
PayPal Annual Incentive Plan
PayPal Annual Incentive Plan The AIP provided each of our NEOs with the opportunity to earn annual incentive compensation based on Company performance and individual performance. For the 2023 AIP, the Compensation Committee determined that our executives’ annual incentives should be primarily tied to our overall Company performance, with individual performance accounting for 25% of each executive’s annual incentive. The majority of our NEOs’ AIP awards was in the form of PBRSUs, to be settled in shares of PayPal common stock based on Company achievement of the applicable performance criteria. The following table sets forth the 2023 target annual incentive opportunity (the “Target Incentive Amount”) for each participating NEO, which is expressed as a percentage of the NEO’s base salary.
PayPal Annual Incentive Plan
| NEO(1) | AIP Target as Percentage of Base Salary | | Alex Chriss(2) | 200% | | John Kim | 125% | | Daniel H. Schulman(3) | 200% | | Blake Jorgensen(3) | 125% | | Gabrielle Rabinovitch(3) | 125% | | Peggy Alford(3) | 125% | | Aaron Karczmer | 125% |
PayPal Annual Incentive Plan
| (1) Mses. Miller and Gill were not eligible to participate in the 2023 AIP based on their respective start dates with PayPal. Under the AIP, an individual must be employed by PayPal before October 1, 2023, to be eligible to participate in the AIP for fiscal year 2023. |
PayPal Annual Incentive Plan
| (2) Mr. Chriss’ AIP Target was established at the time he joined PayPal, and he was eligible for a prorated 2023 AIP bonus based on his start date relative to the performance period. |
PayPal Annual Incentive Plan
| (3) Messrs. Schulman and Jorgenson and Mses. Rabinovitch and Alford ceased to be eligible for the 2023 AIP in accordance with its terms upon their termination of employment with PayPal. For information on the compensation these NEOs received in connection with their termination of employment, see the section below titled “Potential Payments Upon Termination or Change in Control Table – Executive Departure-Related Compensation.” |
PayPal Annual Incentive Plan
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PayPal Annual Incentive Plan
2023 Compensation Framework and Decisions 75% of the Target Incentive Amount for each NEO was delivered in the form of PBRSUs with a one-year performance period, with the final payout determined based on Company performance for 2023.
PayPal Annual Incentive Plan
| NEO | Base Salary Used to Calculate PBRSU Target(1) ($) | PBRSU Target Incentive Amount ($) | PBRSU Target(2)(Shares) | | Alex Chriss | 328,767 | 493,151 | 8,225 | | John Kim | 750,000 | 703,125 | 8,827 | | Daniel H. Schulman(3) | 1,250,000 | 1,875,000 | 23,539 | | Blake Jorgensen(3) | 750,000 | 703,125 | 8,827 | | Gabrielle Rabinovitch(3) | 750,000 | 703,125 | 8,827 | | Peggy Alford(3) | 750,000 | 703,125 | 8,827 | | Aaron Karczmer | 750,000 | 703,125 | 8,827 |
PayPal Annual Incentive Plan
| (1) In accordance with the terms of the 2023 AIP, each then-serving NEO’s base salary and AIP Target as of April 1, 2023 was used to calculate the Target Incentive Amount applicable to the PBRSUs granted pursuant to the AIP. For Mr. Chriss, his starting base salary was used to calculate his Target Incentive Amount applicable to the PBRSUs, which was prorated based on his start date relative to the performance period. |
PayPal Annual Incentive Plan
| (2) The target number of PBRSUs was determined by dividing (i) the Target Incentive Amount allocated to the Company performance portion by (ii) the average closing price of PayPal common stock for a period of 30 consecutive trading days prior to the grant date (the “Average Closing Price”). The PBRSUs under the 2023 AIP were granted on February 15, 2023 to each of the then-serving NEOs and on October 15, 2023 to Mr. Chriss. |
PayPal Annual Incentive Plan
| (3) Messrs. Schulman and Jorgensen and Mses. Rabinovitch and Alford ceased to be eligible for the 2023 AIP in accordance with its terms upon their termination of employment with PayPal. For information on the compensation these NEOs received in connection with their termination of employment, see the section below titled “Potential Payments Upon Termination or Change in Control Table – Executive Departure-Related Compensation.” |
PayPal Annual Incentive Plan
The remaining 25% of the Target Incentive Amount for each NEO was determined based on individual performance, to be delivered in cash, in each case as described below.
PayPal Annual Incentive Plan
| NEO | Base Salary Used to Calculate Cash Incentive Amount(1) ($) | Target Cash ($) | | Alex Chriss(2) | 328,767 | 164,384 | | John Kim | 750,000 | 234,375 | | Daniel H. Schulman(3) | 1,250,000 | 625,000 | | Blake Jorgensen(3) | 750,000 | 234,375 | | Gabrielle Rabinovitch(3) | 750,000 | 234,375 | | Peggy Alford(3) | 750,000 | 234,375 | | Aaron Karczmer | 750,000 | 234,375 |
PayPal Annual Incentive Plan
| (1) In accordance with the terms of the AIP, each NEO’s base salary and AIP Target as of December 1, 2023 was used to calculate the Target Incentive Amount applicable to the cash portion of the AIP. |
PayPal Annual Incentive Plan
| (2) Mr. Chriss’ Target Cash was prorated based on his start date relative to the performance period. |
PayPal Annual Incentive Plan
| (3) Messrs. Schulman and Jorgensen and Mses. Rabinovitch and Alford ceased to be eligible for the 2023 AIP in accordance with its terms upon their termination of employment with PayPal. For information on the compensation these NEOs received in connection with their termination of employment, see the section below titled “Potential Payments Upon Termination or Change in Control Table – Executive Departure-Related Compensation.” |
PayPal Annual Incentive Plan
The actual amount of each participating NEO’s 2023 AIP award was determined by the following formula (and for Mr. Chriss, prorated based on his start date relative to the performance period, in accordance with the terms of the 2023 AIP applicable to employees hired during the performance period): Base Salary Target Incentive % AIP PAYOUT Individual Performance 25% Weight 0-200% Payout Company Performance 75% Weight Revenue 0-200% Payout Non-GAAP Operating Margin 0-200% Payout
PayPal Annual Incentive Plan
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PayPal Annual Incentive Plan
2023 Compensation Framework and Decisions Company Performance Measures When designing PayPal’s 2023 executive compensation program, the Compensation Committee evaluated a range of performance metrics for the purposes of PayPal’s incentive programs and considered input from management and its independent compensation consultant. The Compensation Committee determined that revenue and non-GAAP operating margin were the metrics best aligned to PayPal’s strategy entering 2023, and that achievement of goals associated with those measures would drive strong operational performance results and shareholder returns.
PayPal Annual Incentive Plan
| Measure | Weighting | Definition | Purpose | | Revenue | | Revenue, as reported in our Annual Report on Form 10-K. | The Compensation Committee believes that revenue is a key financial metric for the Company’s performance and driver of stockholder value creation. | | Non-GAAP Operating Margin | | “Non-GAAP Operating Margin,” as described in “Appendix A: Reconciliations of Non-GAAP Financial Measures” to this proxy statement. | The Compensation Committee believes that Non-GAAP Operating Margin is an important measure of our performance because it measures profitability, reflects the Company’s revenue growth and expense management discipline and is a key financial metric of core financial performance and business activities within our peer group. Non-GAAP Operating Margin is also a key financial metric that the Company uses internally to measure ongoing financial performance. |
PayPal Annual Incentive Plan
50% The minimum threshold for either revenue or Non-GAAP Operating Margin needed to be met to trigger any payments under the Company performance component of the AIP. Revenue and Non-GAAP Operating Margin were weighted equally to determine the payout of the Company performance component of the AIP. The maximum possible payout for the Company performance portion of the AIP was 200%. In January 2023, the Compensation Committee established threshold, target, and maximum performance goals for the revenue and Non-GAAP Operating Margin measures, based primarily on our approved budget and operating plan for the year and full year guidance provided to the investment community. The table below shows the performance goals for the AIP applicable to the NEOs and the actual performance achieved. The Compensation Committee believes that the goals established were rigorous and represented a high degree of operational performance. In addition, the 2023 targets for both revenue and Non-GAAP Operating Margin were set higher than the actual performance achieved in 2022.
PayPal Annual Incentive Plan
| Company Measure | Threshold (50% Payout)* | Target (100% Payout)* | Maximum (200% Payout)* | Actual Achieved | Actual Achieved (Percentage of Target Achieved) | | Revenue (in $ billions) | $27.52 | $28.42 | $29.32 | $29.77 | 200% | | Non-GAAP Operating Margin | 20.40% | 22.40% | 24.40% | 22.43% | 102% | | | Company Performance Score of the AIP | | | | 151% |
PayPal Annual Incentive Plan
| * Linear interpolation applies to revenue and Non-GAAP Operating Margin for results between specific goals. |
PayPal Annual Incentive Plan
Individual Performance Measures 25% of the target incentive amount for our NEOs was based on an individual performance score ranging from 0% to 200% (the “Individual Performance Score”). At the beginning of 2023, the Compensation Committee discussed with Mr. Schulman the key factors for determining awards under the AIP, as well as our then-serving NEOs’ expected contributions to that performance and their respective individual business objectives. Mr. Schulman briefed Mr. Chriss on the key individual performance factors applicable to the NEOs for the 2023 AIP as part of the transition of his responsibilities to Mr. Chriss. In early 2024, the Compensation Committee assessed the then-serving NEOs’ individual performance during 2023 against their respective objectives for the year.
PayPal Annual Incentive Plan
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PayPal Annual Incentive Plan
2023 Compensation Framework and Decisions The key accomplishments of the NEOs that were eligible for an AIP bonus are discussed below.
PayPal Annual Incentive Plan
| NEO(1) | Key Performance Against Objectives | | Alex Chriss | • Successfully onboarded into CEO role • Recruited top talent to fill several key leadership positions | | Aaron Karczmer | • Developed and led the end-to-end Servicing Transformation as a company-wide priority to enable the structural shift from being primarily transaction-focused to primarily customer-focused | | John Kim | • Oversaw product, design, and technology organizations, including planning, resource management, and operations • Oversaw end-to-end merchant and consumer product strategy, and continued development and optimization of supporting product capabilities across the consumer and merchant customer segments • Led the incubation of several new products including the launch of AI checkout, PayPal Complete Payments, Venmo Commerce and Cash Back rewards |
PayPal Annual Incentive Plan
| (1) Mses. Miller and Gill were not eligible for the 2023 AIP based on their start date with PayPal. Messrs. Schulman and Jorgensen and Mses. Rabinovitch and Alford ceased to be eligible for the 2023 AIP in accordance with its terms upon their termination of employment with PayPal. For information on the compensation these NEOs received in connection with their termination of employment, see the section below titled “Potential Payments Upon Termination or Change in Control Table – Executive Departure-Related Compensation.” |
PayPal Annual Incentive Plan
In determining the Individual Performance Score for each NEO, the Compensation Committee, with Mr. Chriss’ input, conducted a thorough review of each applicable NEO’s performance against their various business objectives, taking into account the relative importance of each objective to PayPal. Mr. Chriss then recommended to the Compensation Committee each NEO’s Individual Performance Score other than his own. The Compensation Committee made a final determination, in its sole discretion, as to the Individual Performance Score for each applicable NEO based on this review and Mr. Chriss’ recommendations. The Compensation Committee also reviewed Mr. Chriss’ performance and determined, in its sole discretion, the Individual Performance Score for Mr. Chriss. The Compensation Committee also included in its consideration each applicable NEO’s individual performance ratings based on (1) each NEO’s demonstrated commitment to PayPal’s Belonging strategy and goals, pursuant to the independent observation and judgment of PayPal’s people function leadership team; and (2) the risk and compliance reviews by, and independent observation and judgment of, PayPal’s risk and compliance officers, as well as its own observations and assessments of the performance of each NEO. In 2023, we continued our multi-year process to incorporate Belonging into our executive compensation program, and assessed the actions taken by our leaders with the intent to drive measurable outcomes over time. For 2023, PayPal’s focus was driving purposeful actions to yield more inclusive and diverse outcomes and engagement with respect to our employee population. The Compensation Committee assessed each NEO’s participation in our Belonging program based on demonstrable and objective actions taken by the NEO. In addition, the Compensation Committee assessed whether our Belonging program was producing the intended outcomes. The Compensation Committee believes that PayPal’s executive compensation program should appropriately support PayPal’s multi-year, long-term Belonging strategy. The Compensation Committee intends to continue incorporating Belonging considerations in the executive compensation program, with an increased focus on measurable outcomes resulting from our NEOs’ active engagement. Embedding Belonging in our Executive Compensation Program Our performance evaluation is based on each executive officer's commitment to building the foundation of a more inclusive and diverse culture as demonstrated through measurable actions across the employee lifecycle: Participation in training and learning journey for all employees Diverse pipeline hiring programs to broaden our candidate pool Sponsorship programs to coach, support, and enable advancements among employees broadly Focus on building broad and inclusive slates for critical role succession planning Business-specific actions to support retention and advancement Based upon evaluation of each individual’s performance achievements as well as assessment of demonstrated commitment to PayPal’s Belonging strategy and risk and compliance reviews, the Compensation Committee determined that each individual achieved target performance for the year.
PayPal Annual Incentive Plan
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PayPal Annual Incentive Plan
2023 Compensation Framework and Decisions
AIP Payments
AIP Payments The following table shows the AIP Payout for each participating NEO.(1)
AIP Payments
| NEO | Target PBRSUs (Shares)x | Company Performance Score | = | 2023 AIP PBRSU Payout (Shares) | + | Target Cash ($)x | Individual Performance Score | = | 2023 AIP Cash Payment ($) | | Alex Chriss | 8,225 | 151% | | 12,420 | | 164,384 | 100% | | 164,384 | | John Kim | 8,827 | 151% | | 13,329 | | 234,375 | 100% | | 234,375 | | Aaron Karczmer | 8,827 | 151% | | 13,329 | | 234,375 | 100% | | 234,375 |
AIP Payments
| (1) Mses. Miller and Gill were not eligible for the 2023 AIP based on their start date with PayPal. Messrs. Schulman and Jorgensen and Mses. Rabinovitch and Alford ceased to be eligible for the 2023 AIP in accordance with its terms upon their termination of employment with PayPal. For information on the compensation these NEOs received in connection with their termination of employment, see the section below titled “Potential Payments Upon Termination or Change in Control Table – Executive Departure-Related Compensation.” |
Long-Term Incentive Compensation
Long-Term Incentive Compensation Long-Term Incentive Award Target Values In making its determination on the LTI target values for our NEOs for 2023, the Compensation Committee set equity award guidelines and target levels for individual awards by position based on the following:
Long-Term Incentive Compensation
| • | equity compensation practices of technology companies in our compensation peer group, as disclosed in their public filings (see “Our Compensation Peer Group” below for our 2023 peer group) and in proprietary third-party compensation surveys; |
Long-Term Incentive Compensation
| • | individual performance and potential; |
Long-Term Incentive Compensation
| • | the Incentive Compensation Factors (see “How We Determine Incentive Compensation” above); |
Long-Term Incentive Compensation
| • | any changes to or expansion of scope of role and responsibilities; and |
Long-Term Incentive Compensation
| • | the need to retain qualified individuals in a highly competitive market for proven executive talent taking into account their prospective contributions to PayPal. |
Long-Term Incentive Compensation
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Long-Term Incentive Compensation
2023 Compensation Framework and Decisions The Compensation Committee determines each of our NEO’s target values based on information available at the beginning of the year (or, if later, at the time of appointment), including company and individual performance and potential and competitive market data. The 2023 LTI awards for our NEOs, other than for Mr. Schulman, as described below, (and excluding the awards described below in the section “Leadership Transition Awards”) were divided equally into (i) PBRSUs (assuming target performance) with a three-year performance period and (ii) service-based RSUs that vest over three years (with one-third of the RSUs vesting on the first anniversary of the grant date, and the remainder vesting ratably each subsequent quarter over the remaining vesting period). Based on the above guidelines, in January 2023, the Compensation Committee approved the target 2023 LTI awards for our then-serving NEOs, which are set forth in the following table. Mr. Chriss and Mses. Miller and Gill are not included in the below table as they joined PayPal during 2023; their new hire equity awards are described above in the section titled “Leadership Changes and Related Compensation.”
Long-Term Incentive Compensation
| NEO | Target LTI Grant Value ($)(1) | Target PBRSUs Value ($) (Shares)(2) | Service- Based RSUs ($) (Shares)(2) | CEO Transition Performance- Based RSU Awards ($) (Shares)(2) | | John Kim | $8,000,000 | $4,000,000 (50,676 shares) | $4,000,000 (50,676 shares) | | | Daniel H. Schulman | $18,700,000 | $6,000,000 (76,014 shares) | $6,000,000 (76,014 shares) | $6,700,000 (84,882 shares) | | Blake Jorgensen | — | — | — | | | Gabrielle Rabinovitch | $7,500,000 | $3,750,000 (47,509 shares) | $3,750,000 (47,509 shares) | | | Peggy Alford | $7,500,000 | $3,750,000 (47,509 shares) | $3,750,000 (47,509 shares) | | | Aaron Karczmer | $7,500,000 | $3,750,000 (47,509 shares) | $3,750,000 (47,509 shares) | |
Long-Term Incentive Compensation
| (1) Reflects the Target LTI Grant Value for awards granted to NEOs listed in the table in 2023. This table excludes the awards described below in the section “Leadership Transition Awards.” |
Long-Term Incentive Compensation
| (2) The target number of PBRSUs and number of service-based RSUs granted was determined by dividing the total grant value of the award by the Average Closing Price. The PBRSUs, service-based RSUs and CEO Transition Performance-Based RSU Awards listed in this table were granted on March 1, 2023 to the then-serving NEOs. |
Long-Term Incentive Compensation
In determining Mr. Schulman’s long term incentive compensation target value and design, the Board considered the following:
Long-Term Incentive Compensation
| Our performance against financial, strategic and operational objectives, and our stockholders’ experience | As a result of an assessment of our performance, our CEO’s LTI target value was reduced year-over-year, from $24M in 2022 to $18.7M in 2023, reflecting our pay-for-performance philosophy | | The need to ensure an orderly CEO transition | We granted Mr. Schulman two CEO Transition Performance-Based RSU Awards of equal value that were designed to vest contingent on Mr. Schulman’s successful completion of two performance conditions related to the recruitment and onboarding of a new CEO. One award vested upon the new CEO’s start date and the other was scheduled to vest in June 2024, in anticipation of and conditioned upon Mr. Schulman completing the transitioning of his duties and stepping down from the Board of Directors in May 2024 at the end of his current term. Ultimately, Mr. Schulman facilitated a smooth and effective transition, enabling Mr. Chriss to onboard more quickly than anticipated and allowing Mr. Schulman to complete the transition and depart from the Board in December 2023. The Compensation Committee determined that it would be appropriate to accelerate the vesting of the performance-based RSUs granted with respect to the second performance condition to match the timing of Mr. Schulman’s retirement from the Board, as Mr. Schulman’s performance of his transition responsibilities had been completed | | The need to maintain Mr. Schulman’s alignment to long-term performance and ensure his focus on execution during the remainder of his tenure | Mr. Schulman’s 2023 LTI included PBRSUs with a three-year performance period from January 1, 2023 through December 31, 2025, with metrics described below, and RSUs that would vest one-third each on the first, second and third anniversary of the grant date, assuming his employment ultimately terminated due to a Qualifying Retirement |
Long-Term Incentive Compensation
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Long-Term Incentive Compensation
2023 Compensation Framework and Decisions Performance-Based Restricted Stock Units (PBRSUs) In January 2023, the Compensation Committee approved the following structure for the multi-year PBRSUs granted in 2023 (the “2023-2025 PBRSUs”).
Long-Term Incentive Compensation
| • | Three-year performance period from January 1, 2023 through December 31, 2025, to emphasize the importance of long-term, sustained strategic growth. |
Long-Term Incentive Compensation
| • | Awards to be settled in shares of PayPal common stock, subject to the Compensation Committee’s approval of the level of achievement against the pre-established goals for two performance measures: “FX-Neutral” Revenue compound annual growth rate (“CAGR”) and Free Cash Flow CAGR. |
Performance Measures and Rationales
Performance Measures and Rationales The Compensation Committee believes that measuring CAGR over the three-year performance period is an appropriate performance measure as it is aligned with our long-term goal of growing revenue and free cash flow. The following table describes the two performance measures for the 2023-2025 PBRSUs and the Compensation Committee’s rationale for their selection.
Performance Measures and Rationales
| Measure | Weighting | Definition | Purpose | | FX-Neutral Revenue CAGR | | Revenue calculated on a fixed foreign exchange basis (referred to as “FX- Neutral”). | The Compensation Committee believes that the FX-Neutral Revenue measure makes our executive officers accountable for driving profitable growth while making appropriate tradeoffs between investments that increase future revenue growth and operating expense. | | Free Cash Flow CAGR | | “Free Cash Flow” as described in “Appendix A: Reconciliation of Non-GAAP Financial Measures” to this proxy statement. | The Compensation Committee believes that the Free Cash Flow measure reinforces the importance of PayPal’s cash generation capability so we can finance continued growth and investment requirements and remain well-positioned to take advantage of inorganic growth opportunities. |
Performance Measures and Rationales
50% PBRSU Mechanics and Targets Each year, in establishing performance goals for the new three-year performance period, the Compensation Committee considers a number of key factors, including PayPal’s:
Performance Measures and Rationales
| • | medium-term business plan; |
Performance Measures and Rationales
| • | strategic direction and initiatives; |
Performance Measures and Rationales
| • | historical performance and goals set for prior performance periods; and |
Performance Measures and Rationales
| • | potential extraordinary events that could have a disproportionate impact on the alignment of performance and compensation. |
Performance Measures and Rationales
The targets set by the Compensation Committee are intended to be rigorous and consistent with the medium-term outlook provided to the investment community and our medium-term business plan. The specific goals for the 2023-2025 PBRSUs are intended to be challenging but attainable to provide appropriate incentives for our executive officers to continue to grow our business. The Compensation Committee believes that achievement of maximum performance against the target levels would require sustained exceptional performance over the performance period. The two LTI performance measures are independent. If either threshold goal is met, awards will be earned with respect to that performance measure consistent with the weighting shown in the table above. If the performance threshold for a measure is not met, there will be no payment attributable to that performance measure. If neither performance threshold is met, no shares of PayPal common stock subject to the 2023-2025 PBRSUs will be awarded. We do not disclose the specific performance goals for the 2023-2025 PBRSUs in this proxy statement for competitive reasons. For each measure, performance at the threshold level will result in a payout of 50% of target, performance at the target level will result in a payout of 100% of target and performance at the maximum level will result in a payout of 200% of target. Linear interpolation is applied to performance between threshold, target and maximum levels. The performance targets and achievement levels for the 2021-2023 PBRSUs are shown below to provide insight into the rigor of the targets the Compensation Committee sets.
Performance Measures and Rationales
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Performance Measures and Rationales
2023 Compensation Framework and Decisions Settlement of Previously Awarded 2021-2023 PBRSUs The Compensation Committee set the targets for the 2021-2023 PBRSUs at the beginning of the performance period. The percentage of target achieved for the 2021-2023 PBRSUs was 0%. The following chart shows the minimum, target and maximum vesting levels for FX-Neutral Revenue CAGR and Free Cash Flow CAGR for the 2021-2023 PBRSUs, the actual results for each measure, and the corresponding percentage of target achieved. PayPal Performance Measure 0.0% 0.0% Threshold (50% Payout) Target (100% Payout) Actual Achieved (Percentage of Target Achieved) Maximum (200% Payout) Aggregate Percent of Target Achieved 0.0% FX-Neutral Revenue CAGR Free Cash Flow CAGR 15.5% 13.0% 17.5% 15.0% 18.5% 16.0% Accordingly, each of the NEOs did not earn any shares with respect to the 2021-2023 PBRSUs. Restricted Stock Units (RSUs) Our 2023 LTI awards also included service-based RSUs with a three-year vesting schedule. These RSU awards vest one-third on the first anniversary of the grant date, with the remainder vesting ratably each following quarter over the remaining vesting period, subject to the continued employment of the NEO. Service-based RSUs have value regardless of whether our stock price increases or decreases, and are designed to help secure and retain our executive officers and provide an appropriate incentive for them to remain with us during the vesting period. Leadership Transition Awards On April 15, 2023, Ms. Alford, Ms. Rabinovitch, Mr. Karczmer and Mr. Kim were granted service-based RSUs with a two-year vesting schedule, which vest in full on the second anniversary of their grant date, subject to the continued employment of the NEO with PayPal (the “Leadership Transition RSUs”). The number of shares subject to the Leadership Transition RSUs was determined by dividing (x) the Leadership Transition RSU Value set forth in the following table by (y) the average closing PayPal share price as reported on the NASDAQ Global Select Market for the period of 30 consecutive trading days ending on (and including) the last trading day prior to April 15, 2023 (the grant date), and rounding up to the nearest whole share. The Leadership Transition RSU Value of each NEO’s award was determined by the Compensation Committee to provide retention incentives to the recipients to remain employed with PayPal in the face of significant perceived continuing employment uncertainty driven by our planned CEO transition. In light of that transition, the Compensation Committee believed near-term stability within these NEOs’ roles until a new CEO was identified was particularly critical to minimizing disruption to our business and, ultimately, facilitating a more effective and efficient transition.
Performance Measures and Rationales
| NEO | Leadership Transition RSU Value ($) | | John Kim | 1,000,000 | | Gabrielle Rabinovitch | 2,000,000 | | Peggy Alford | 2,500,000 | | Aaron Karczmer | 3,000,000 |
Performance Measures and Rationales
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Performance Measures and Rationales
Other Compensation Elements
Our Compensation Peer Group
Our Compensation Peer Group Our compensation peer group is made up of technology companies and financial companies. This mix is intended to provide the Compensation Committee with insight into the differences across these two business sectors in which we generally compete for executive talent. In deciding whether a company should be included in our compensation peer group, the Compensation Committee generally considers the following screening criteria:
Our Compensation Peer Group
| • | revenue; |
Our Compensation Peer Group
| • | market capitalization; |
Our Compensation Peer Group
| • | historical growth rates; |
Our Compensation Peer Group
| • | primary line of business; |
Our Compensation Peer Group
| • | whether the company has a recognizable and well-regarded brand; and |
Our Compensation Peer Group
| • | whether we compete with the company for executive talent. |
Our Compensation Peer Group
Each member of the compensation peer group was chosen based on one or more of the factors listed above, but not all factors were relevant for every peer company. While some of the compensation peer group members may be significantly larger than PayPal in terms of revenue or market capitalization, the Compensation Committee has determined that such companies should be included in the peer group primarily because we compete with them for talent. Our compensation peer group for 2023 was composed of 10 technology companies and nine financial companies with which we generally compete for talent. Applying the criteria described above and in order to improve the comparability of our compensation peer group, in consultation with Compensia, the Compensation Committee removed Alphabet Inc., Amazon.com, Inc. and Meta Platforms, Inc. from our compensation peer group and added Capital One Financial Corporation, Shopify Inc. and Uber Technologies, Inc.
Our Compensation Peer Group
| 70 | • 2024 Proxy Statement |
Our Compensation Peer Group
Our Structure for Setting Compensation Peer Group Companies Technology Companies Financial Companies Adobe Inc. Apple Inc. Block, Inc. Intuit Inc. Netflix, Inc. Oracle Corporation Salesforce, Inc. ServiceNow, Inc. Shopify Inc. Uber Technologies, Inc. American Express Company Capital One Financial Corporation Discover Financial Services Fidelity National Information Services, Inc. Fiserv Inc. Global Payments Inc. JP Morgan Chase & Co. Mastercard Incorporated Visa Inc. In assessing our executive compensation program for 2023 and going forward, the Compensation Committee considered the compensation programs of our compensation peer group as well as our goals of rewarding performance and retaining core top talent. We also compare our performance against the performance of companies in our compensation peer group that we believe have relatively comparable business models. Our executive compensation program is generally designed to roughly parallel the programs of members of our compensation peer group because our employees have historically been recruited by these competitors.
Clawback Policy and Mandatory Recovery Policy
| • | any incentive compensation that was paid to or received by the covered employee (including gains realized through the exercise of stock options) during the 12-month period preceding the date on which we had actual knowledge of the triggering event or the full impact of the triggering event was known (or such longer period of time as may be required by any applicable statute or government regulation). |
Severance and Change in Control Provisions
Severance and Change in Control Provisions Executive Severance Plan PayPal maintains the Executive Severance Plan, which replaced and superseded all prior plans and agreements providing for severance payments and benefits, including those in prior individual agreements and severance plans. Under the Executive Severance Plan, each actively employed NEO is eligible to receive payments and benefits in the event of certain terminations of employment, including an involuntary termination of employment by PayPal without cause or by the executive for good reason. The Executive Severance Plan includes the ELTIP adopted by the Compensation Committee effective July 1, 2021, which provides additional severance benefits to NEOs, including equity vesting provisions and continued health benefits upon a qualifying retirement, job elimination, death or disability. No payments or benefits are provided under the Executive Severance Plan if there is a change in control of PayPal without an accompanying qualifying termination of employment (i.e., we do not provide any “single-trigger” change in control payments). We also do not provide any of our NEOs with any excise tax “gross-ups” or other payment or reimbursement of excise taxes on severance or other payments in connection with a change in control of PayPal. The Compensation Committee believes that the Executive Severance Plan is essential to fulfill PayPal’s objective of recruiting, developing and retaining key, high-quality management talent in a competitive market because these arrangements provide reasonable protection to executives in the event they are not retained under specific circumstances. The Executive Severance Plan is also intended to facilitate changes to the leadership team by setting terms for the termination of the employment of an NEO in advance, which allows for a smoother transition of responsibilities when it is deemed to be in PayPal’s best interest. The change in control provisions in the Executive Severance Plan are intended to allow our executives to focus their attention on our business operations despite the potentially disruptive impact of a proposed change-in-control transaction, to assess takeover bids objectively without regard to the potential impact on their individual job security and to allow for a seamless transition in the event of a change in control of PayPal. These considerations are especially important in light of the executives’ key leadership roles. See “Potential Payments Upon Termination or Change in Control” below for a description of these arrangements and the estimated payments and benefits payable under the Executive Severance Plan as of December 31, 2023. As noted above under the heading “Leadership Changes and Related Compensation” and below under the heading “Potential Payments Upon Termination or Change in Control Table—Executive Departure-Related Compensation”, each of Messrs. Schulman and Jorgensen and Mses. Rabinovitch and Alford terminated employment with PayPal before the Record Date and Mr. Karczmer’s employment with PayPal will terminate prior to the date of the 2024 Annual Meeting. Their severance entitlements are generally aligned with the Executive Severance Plan, with the exception of Ms. Rabinovitch’s and Mr. Schulman’s transition arrangements. Please refer to such sections for details on the severance that each of the NEOs who departed prior to the Record Date received and that Mr. Karczmer will receive and the circumstances of their separations.
Tax and Accounting Considerations
Tax and Accounting Considerations Section 162(m) of the Internal Revenue Code (as amended, “Section 162(m)”) generally limits tax deductibility of compensation paid by a public company to its chief executive officer, chief financial officer and certain other current and former executive officers in any year to $1 million in the year compensation becomes taxable to the executive officer. The Compensation Committee will award non-deductible compensation where it believes doing so is in our and our stockholders’ best interests, regardless of its deductibility. We account for stock-based compensation in accordance with FASB ASC Topic 718, which requires us to recognize compensation expense for share-based payments, including stock options, RSUs, PBRSUs, shares of common stock and other forms of equity compensation.
2023 Summary Compensation Table
2023 Summary Compensation Table The following table summarizes the total compensation paid to and received and earned by each of our NEOs for the fiscal year ended December 31, 2023 and, to the extent required under SEC rules, the fiscal years ended December 31, 2022 and December 31, 2021.
2023 Summary Compensation Table
| Name and Principal Position (a) | Year (b) | Salary ($)(c) | Bonus ($)(d) | Stock Awards ($)(e) | Option Awards ($)(f) | Non-Equity Incentive Plan Compensation ($)(g) | Change in Pension Value and Non-qualified Deferred Compensation Earnings ($)(h) | All Other Compensation ($)(i) | Total ($) | | Alex Chriss President & Chief Executive Officer | 2023 | 302,885 | — | 41,137,646 | — | 164,384 | — | 311,840 | 41,916,755 | | Jamie Miller EVP, Chief Financial Officer | 2023 | 100,962 | 3,000,000(1) | 8,825,116 | — | — | — | 3,462 | 11,929,539 | | Michelle Gill EVP, General Manager - Small Business & Financial Services Group | 2023 | 80,769 | 1,000,000(1) | 8,825,116 | — | — | — | 923 | 9,906,808 | | John Kim EVP, Chief Product Officer | 2023 | 750,000 | 1,000,000(2) | 12,034,764 | — | 234,375 | — | 13,200 | 14,032,339 | | Daniel H. Schulman Former President & Chief Executive Officer | 2023 | 947,115 | — | 20,020,698(3) | — | — | — | 1,171,141 | 22,138,954 | | | 2022 | 1,250,000 | — | 20,182,730 | — | 312,500 | — | 212,692 | 21,957,922 | | | 2021 | 1,122,115 | — | 29,920,381 | — | 625,000 | — | 402,857 | 32,070,353 | | Blake Jorgensen Former Chief Financial Officer | 2023 | 548,077 | 2,000,000(2) | 702,107(4) | — | — | — | 2,700,700 | 5,950,884 | | | 2022 | 302,885 | 4,000,000 | 10,336,008 | — | 73,684 | — | — | 14,712,576 | | Gabrielle Rabinovitch Former Acting Chief Financial Officer | 2023 | 750,000 | — | 10,949,045 | — | — | — | 234,375 | 11,933,420 | | | 2022 | 534,231 | 1,035,000 | 6,233,422 | — | 210,938 | — | — | 8,013,590 | | Peggy Alford Former EVP, Global Sales | 2023 | 750,000 | — | 10,288,003 | — | — | — | 247,575 | 11,285,578 | | | 2022 | 736,731 | — | 8,353,168 | — | 199,219 | — | 12,200 | 9,301,318 | | | 2021 | 674,423 | 250,000 | 9,377,300 | — | 325,000 | — | 11,600 | 10,638,323 | | Aaron Karczmer Former EVP, Chief Enterprise Services Officer | 2023 | 750,000 | — | 10,801,825 | — | 234,375 | — | 13,200 | 11,799,400 | | | 2022 | 736,731 | — | 8,353,168 | — | 187,500 | — | 12,200 | 9,289,599 | | | 2021 | 674,423 | — | 9,377,300 | — | 325,000 | — | 11,600 | 10,388,323 |
2023 Summary Compensation Table
| (1) This amount represents the portion of the Cash Sign-On Bonus offered to Mses. Miller and Gill (as applicable) that was paid in 2023. See the section titled “Offer Letter Compensation for New NEOs” in the CD&A for more information. |
2023 Summary Compensation Table
| (2) This amount represents the final portion of a Cash Sign-On Bonus offered to Messrs. Kim and Jorgensen (as applicable) in connection with the commencement of their employment with PayPal. |
2023 Summary Compensation Table
| (3) This amount represents the grant date value of equity awards granted to Mr. Schulman in 2023, as well as the incremental fair value, calculated in accordance with SEC disclosure rules, associated with modification to his 2023 AIP PBRSU award equal to $670,713, which was modified to be eligible for continued vesting in accordance with the Schulman Retirement Agreement. The modification value does not represent any newly granted awards. See the section titled “Executive Departure-Related Compensation” for more information. |
2023 Summary Compensation Table
| (4) This amount represents the grant date value of equity awards granted to Mr. Jorgensen in 2023, as well as the incremental fair value, calculated in accordance with SEC disclosure rules, associated with the modification to his 2023 AIP PBRSU award equal to $14,395, which was modified in accordance with the Jorgensen Separation Agreement. The modification value does not represent any newly granted awards. See “Executive Departure-Related Compensation” for additional details. |
2023 Summary Compensation Table
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2023 Summary Compensation Table
2023 Summary Compensation Table
2023 Grants of Plan-Based Awards Table
2023 Grants of Plan-Based Awards Table The following table sets forth information regarding grants of plan-based awards to each of our NEOs for the fiscal year ended December 31, 2023.
2023 Grants of Plan-Based Awards Table
| | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(2) | | | Estimated Future Payouts Under Equity Incentive Plan Awards(3) | | | All Other Stock Awards: Number of Shares of Stock or Units(4) (#)(j) | Grant Date Fair Value of Stock and Option Awards(5) ($)(m) | | Name | Approval Date (b) | Grant Date (c) | Threshold ($)(d) | Target ($)(e) | Maximum ($)(f) | Threshold (#)(g) | Target (#)(h) | Maximum (#)(i) | | | | Alex Chriss | | | | | | | | | | | | 2023 AIP – Cash | | | — | 164,384 | 328,768 | — | — | — | — | — | | 2023 AIP – PBRSUs | 8/10/23 | 10/15/23 | — | — | — | 2,056 | 8,225 | 16,450 | — | 458,544 | | 2023-2025 PBRSUs | 8/10/23 | 10/15/23 | — | — | — | 70,882 | 283,529 | 567,058 | — | 15,806,742 | | RSUs | 8/10/23 | 10/15/23 | — | — | — | — | — | — | 279,359 | 15,574,264 | | Supplemental New Hire Make Whole RSUs | 8/10/23 | 10/15/23 | — | — | — | — | — | — | 166,782 | 9,298,097 | | Dan Schulman | | | | | | | | | | | | 2023 AIP – Cash(6) | | | — | 625,000 | 1,250,000 | — | — | — | — | — | | 2023 AIP – PBRSUs(6) | 1/25/23 | 2/15/23 | — | — | — | 5,885 | 23,539 | 47,078 | — | 1,833,923(12) | | 2023-2025 PBRSUs | 2/28/23 | 3/1/23 | — | — | — | 19,004 | 76,014 | 152,028 | — | 5,638,719 | | RSUs | 2/28/23 | 3/1/23 | — | — | — | — | — | — | 76,014 | 5,611,353 | | CEO Transition PBRSUs(7) | 2/28/23 | 3/1/23 | — | — | — | — | — | — | 42,441 | 3,132,995 | | CEO Transition PBRSUs(8) | 2/28/23 | 3/1/23 | — | — | — | — | — | — | 42,441 | 3,132,995 | | Jamie Miller | | | | | | | | | | | | RSUs | 10/23/23 | 12/15/23 | — | — | — | — | — | — | 109,136 | 6,685,671 | | RSUs – Supplemental New Hire | 10/23/23 | 12/15/23 | — | — | — | — | — | — | 34,924 | 2,139,444 | | Gabrielle Rabinovitch | | | | | | | | | | | | 2023 AIP – Cash | | | — | 234,375 | 468,750 | — | — | — | — | — | | 2023 AIP – PBRSUs | 1/25/23 | 2/15/23 | — | — | — | 2,207 | 8,827 | 17,654 | — | 687,712 | | 2023-2025 PBRSUs | 2/28/23 | 3/1/23 | — | — | — | 11,877 | 47,509 | 95,018 | — | 3,524,218 | | 2023-2025 PBRSUs – Supplemental(9) | 9/27/22 | 3/1/23 | — | — | — | 3,959 | 15,837 | 31,674 | — | 1,174,789 | | RSUs | 2/28/23 | 3/1/23 | — | — | — | — | — | — | 47,509 | 3,507,114 | | RSUs – Leadership Transition Award | 3/23/23 | 4/15/23 | — | — | — | — | — | — | 26,855 | 2,055,213 | | Blake Jorgensen(10) | | | | | | | | | | | | 2023 AIP – Cash | | | — | 234,375 | 468,750 | — | — | — | — | — | | 2023 AIP – PBRSUs | 1/25/23 | 2/15/23 | — | — | — | 2,207 | 8,827 | 17,654 | — | 687,712(12) | | Peggy Alford | | | | | | | | | | | | 2023 AIP – Cash | | | — | 234,375 | 468,750 | — | — | — | — | — | | 2023 AIP – PBRSUs | 1/25/23 | 2/15/23 | — | — | — | 2,207 | 8,827 | 17,654 | — | 687,712 | | 2023-2025 PBRSUs | 2/28/23 | 3/1/23 | — | — | — | 11,877 | 47,509 | 95,018 | — | 3,524,218 | | RSUs | 2/28/23 | 3/1/23 | — | — | — | — | — | — | 47,509 | 3,507,114 | | RSUs – Leadership Transition Award | 3/23/23 | 4/15/23 | — | — | — | — | — | — | 33,568 | 2,568,959 |
2023 Grants of Plan-Based Awards Table
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2023 Grants of Plan-Based Awards Table
2023 Grants of Plan-Based Awards Table
2023 Grants of Plan-Based Awards Table
| | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(2) | | | Estimated Future Payouts Under Equity Incentive Plan Awards(3) | | | All Other Stock Awards: Number of Shares of Stock or Units(4) (#)(j) | Grant Date Fair Value of Stock and Option Awards(5) ($)(m) | | Name | Approval Date (b) | Grant Date (c) | Threshold ($)(d) | Target ($)(e) | Maximum ($)(f) | Threshold (#)(g) | Target (#)(h) | Maximum (#)(i) | | | | Michelle Gill | | | | | | | | | | | | RSUs | 10/23/23 | 12/15/23 | — | — | — | — | — | — | 109,136 | 6,685,671 | | RSUs – Supplemental New Hire | 10/23/23 | 12/15/23 | — | — | — | — | — | — | 34,924 | 2,139,444 | | Aaron Karczmer | | | | | | | | | | | | 2023 AIP – Cash | | | — | 234,375 | 468,750 | — | — | — | — | — | | 2023 AIP – PBRSUs | 1/25/23 | 2/15/23 | — | — | — | 2,207 | 8,827 | 17,654 | — | 687,712 | | 2023-2025 PBRSUs | 2/28/23 | 3/1/23 | — | — | — | 11,877 | 47,509 | 95,018 | — | 3,524,218 | | RSUs | 2/28/23 | 3/1/23 | — | — | — | — | — | — | 47,509 | 3,507,114 | | RSUs – Leadership Transition Award | 3/23/23 | 4/15/23 | — | — | — | — | — | — | 40,282 | 3,082,781 | | John Kim | | | | | | | | | | | | 2023 AIP – Cash | | | — | 234,375 | 468,750 | — | — | — | — | — | | 2023 AIP – PBRSUs | 1/25/23 | 2/15/23 | — | — | — | 2,207 | 8,827 | 17,654 | — | 687,712 | | 2023-2025 PBRSUs | 2/28/23 | 3/1/23 | — | — | — | 12,669 | 50,676 | 101,352 | — | 3,740,902 | | 2023-2025 -PBRSUs – New Hire(11) | 8/29/22 | 3/1/23 | — | — | — | 9,502 | 38,007 | 76,014 | — | 2,819,359 | | RSUs | 2/28/23 | 3/1/23 | — | — | — | — | — | — | 50,676 | 3,759,146 | | RSUs – Leadership Transition Award | 3/23/23 | 4/15/23 | — | — | — | — | — | — | 13,428 | 1,027,645 |
2023 Grants of Plan-Based Awards Table
| (1) The Compensation Committee approved the AIP design and performance measures with respect to the 2023 AIP PBRSUs granted to the NEOs on January 25, 2023. The 2023 Target Incentive Amounts for executives did not change as compared to the 2022 PayPal Annual Incentive Plan. The Compensation Committee ratified the Target Incentive Amounts for the NEOs on February 28, 2023. |
2023 Grants of Plan-Based Awards Table
| (2) The amounts shown represent potential non-equity incentive plan awards under the individual performance portion of the AIP. Maximum amounts represent 200% of the NEO’s target incentive amount under the AIP. Mr. Chriss’ target incentive amount was prorated based on the number of days during 2023 that he was employed by PayPal, in accordance with the terms of the AIP. For more information on the AIP, including actual payouts for the AIP, see the section titled “PayPal Annual Incentive Plan” in the CD&A. |
2023 Grants of Plan-Based Awards Table
| (3) The amounts shown in the “2023 AIP – PBRSUs” rows represent the AIP PBRSUs granted in 2023 under our 2015 Equity Incentive Award Plan (the “Equity Plan”) for the Company performance portion of the AIP. Amounts shown in the “Threshold” column represent 25% of the target number of shares, which represents the threshold performance of one of the two primary performance metrics. Awards are capped at the maximum of 200% of the target number of shares. For more information on the AIP, including actual payouts for the AIP, see the section titled “PayPal Annual Incentive Plan” in the CD&A. |
2023 Grants of Plan-Based Awards Table
| The amounts shown in the “2023-2025 PBRSUs” rows represent the 2023-2025 PBRSUs granted in 2023 under the Equity Plan. Amounts shown in the “Threshold” column represent 25% of the target number of shares, which represents the threshold performance of one of the two performance metrics. Awards are capped at the maximum of 200% of the target number of shares. The 2023-2025 PBRSUs will be earned and vest based on performance over the 2023-2025 performance period. See the section titled “Long-Term Incentive Compensation” in the CD&A for more information. |
2023 Grants of Plan-Based Awards Table
| (4) The amounts shown in the “RSUs” and “RSUs – Supplemental New Hire” rows represent service-based RSUs granted in 2023 under the Equity Plan that vest over three years, with one-third vesting on the first anniversary of the grant date, and the remainder vesting ratably each following quarter over the remaining vesting period, subject to continued employment. See the section titled “Long-Term Incentive Compensation” in the CD&A for more information. |
2023 Grants of Plan-Based Awards Table
| The amounts shown in the “Supplemental New Hire Make Whole RSUs” row for Mr. Chriss represent service-based RSUs granted in 2023 under the Equity Plan that vest over two years, with one-half vesting on each anniversary of the grant date. |
2023 Grants of Plan-Based Awards Table
| The amounts shown in the “RSUs—Leadership Transition Award” rows represent service-based RSUs granted in 2023 under the Equity Plan that cliff vest after two years, with the full award vesting on the second anniversary of the grant date. |
2023 Grants of Plan-Based Awards Table
| (5) Represents the grant date fair value determined in accordance with FASB ASC Topic 718. The grant date fair value was calculated by multiplying the closing price of the underlying common stock on the date of grant (or, if there is no closing price on such date, the closing price on the immediately preceding day with a reported closing price) by the number of stock awards granted. For the 2023 AIP PBRSUs and the 2023-2025 PBRSUs, the grant date fair value assumes the probable outcome of the performance conditions applicable to the awards. See “Stock Awards – Column (e)” under the “2023 Summary Compensation Table” for more information. The assumptions used by PayPal in calculating the grant date fair value of the stock awards are incorporated herein by reference to Note 15 to the consolidated financial statements contained in the 2023 Annual Report on Form 10-K. |
2023 Grants of Plan-Based Awards Table
| (6) In accordance with the Schulman Retirement Agreement, Mr. Schulman was eligible to receive severance benefits based on his target AIP bonus opportunity for the individual performance portion of the AIP and actual performance for the Company performance portion. |
2023 Grants of Plan-Based Awards Table
| (7) The amounts shown in this “CEO Transition PBRSUs” row represent the CEO Transition Performance-Based RSU Award that vested on September 27, 2023, upon Mr. Chriss’ start date with PayPal. |
2023 Grants of Plan-Based Awards Table
| (8) The amounts shown in this “CEO Transition PBRSUs” row represent the CEO Transition Performance-Based RSU Award that vested on December 11, 2023, based on the Compensation Committee’s determination that Mr. Schulman had effectively completed his CEO-related transition responsibilities. |
2023 Grants of Plan-Based Awards Table
| (9) The amounts shown in this “2023-2025 PBRSUs – Supplemental” row represent the PBRSUs granted to Ms. Rabinovitch in connection with her appointment as acting CFO. |
2023 Grants of Plan-Based Awards Table
| Ms. Rabinovitch forfeited all her 2023-2025 PBSRU awards (including the “2023-2025 PBRSUs” and “2023-2025 PBRSUs – Supplemental” awards) upon her separation with PayPal. |
2023 Grants of Plan-Based Awards Table
| (10) In accordance with the Jorgensen Separation Agreement, Mr. Jorgensen was eligible to receive severance benefits equal to a prorated portion of his AIP bonus (for both the individual and Company performance components), based on his full months of service during the AIP performance period. |
2023 Grants of Plan-Based Awards Table
| (11) The amounts shown in this “2023-2025—PBRSUs—New Hire” row represent a PBRSU award granted to Mr. Kim in connection with the commencement of his employment with PayPal. |
2023 Grants of Plan-Based Awards Table
| (12) These AIP PBRSUs were modified pursuant to the Schulman Separation Agreement and Jorgensen Separation Agreement (as applicable). The incremental fair value of the modifications, calculated in accordance with SEC disclosure rules, was equal to $670,713 for Mr. Schulman’s AIP PBRSUs and $14,395 for Mr. Jorgensen’s AIP PBRSUs. |
2023 Grants of Plan-Based Awards Table
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2023 Grants of Plan-Based Awards Table
2023 Outstanding Equity Awards at Fiscal Year-End Table
2023 Outstanding Equity Awards at Fiscal Year-End Table
2023 Outstanding Equity Awards at Fiscal Year-End Table The following table sets forth information regarding outstanding equity awards held by each of our NEOs as of December 31, 2023.
2023 Outstanding Equity Awards at Fiscal Year-End Table
| | Stock Awards | | | | | | Name | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested(1) ($) | Stock Award Grant Date | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested(1) ($) | | Alex Chriss | 279,359(2) | 17,155,436 | 10/15/23 | | | | | 166,782(3) | 10,242,083 | 10/15/23 | | | | | 12,420(4) | 762,712 | 10/15/23 | | | | | | | 10/15/23 | 283,529(5) | 17,411,516 | | Jamie Miller | 109,136(2) | 6,702,042 | 12/15/23 | | | | | 34,924(2) | 2,144,683 | 12/15/23 | | | | Michelle Gill | 109,136(2) | 6,702,042 | 12/15/23 | | | | | 34,924(2) | 2,144,683 | 12/15/23 | | | | John Kim | 22,111(2) | 1,357,837 | 10/15/22 | | | | | 22,111(2) | 1,357,837 | 10/15/22 | | | | | 50,676(2) | 3,112,013 | 3/1/23 | | | | | 13,428(12) | 824,613 | 4/15/23 | | | | | 13,329(4) | 818,534 | 2/15/23 | | | | | | | 3/1/23 | 50,676(5) | 3,112,013 | | | | | 3/1/23 | 38,007(5) | 2,334,010 | | Dan Schulman | 17,134(6) | 1,052,199 | 3/1/21 | | | | | 44,196(2) | 2,714,076 | 3/1/22 | | | | | 76,014(2) | 4,668,020 | 3/1/23 | | | | | 35,544(4) | 2,182,757 | 2/15/23 | | | | | | | 3/1/21 | 51,404(7) | 3,156,720 | | | | | 3/1/22 | 88,396(8) | 5,428,398 | | | | | 3/1/23 | 76,014(5) | 4,668,020 | | Gabrielle Rabinovitch | 1,094(9) | 67,183 | 3/1/21 | | | | | 333(9) | 20,450 | 3/1/21 | | | | | 596(9) | 36,600 | 9/15/21 | | | | | 3,835(9) | 235,507 | 3/1/22 | | | | | 382(9) | 23,459 | 3/1/22 | | | | | 9,168(9) | 563,007 | 6/15/22 | | | | | 9,213(9) | 565,770 | 10/15/22 | | | | | 47,509(9) | 2,917,528 | 3/1/23 | | | | | 26,855(9) | 1,649,166 | 4/15/23 | | |
2023 Outstanding Equity Awards at Fiscal Year-End Table
| • 2024 Proxy Statement | 79 |
2023 Outstanding Equity Awards at Fiscal Year-End Table
2023 Outstanding Equity Awards at Fiscal Year-End Table
2023 Outstanding Equity Awards at Fiscal Year-End Table
| | Stock Awards | | | | | | Name | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested(1) ($) | Stock Award Grant Date | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested(1) ($) | | | 13,329(4) | 818,534 | 2/15/23 | | | | | | | 3/1/21 | 1,095(7) | 67,244 | | | | | 3/1/21 | 334(7) | 20,511 | | | | | 9/15/21 | 1,789(7) | 109,862 | | | | | 3/1/22 | 9,208(8) | 565,463 | | | | | 3/1/22 | 921(8) | 56,559 | | | | | 6/15/22 | 18,337(8) | 1,126,075 | | | | | 3/1/23 | 47,509(10) | 2,917,528 | | | | | 3/1/23 | 15,837(10) | 972,550 | | Blake Jorgensen | 3,472(2) | 213,216 | 9/15/22 | | | | | 8,886(4) | 545,689 | 2/15/23 | | | | | | | 9/15/22 | 27,774(8) | 1,705,601 | | Peggy Alford | 5,711(11) | 350,713 | 3/1/21 | | | | | 15,345(2) | 942,336 | 3/1/22 | | | | | 47,509(2) | 2,917,528 | 3/1/23 | | | | | 33,568(12) | 2,061,411 | 4/15/23 | | | | | 13,329(4) | 818,534 | 2/15/23 | | | | | | | 3/1/21 | 17,135(7) | 1,052,260 | | | | | 3/1/22 | 36,832(8) | 2,261,853 | | | | | 3/1/23 | 47,509(5) | 2,917,528 | | Aaron Karczmer | 5,711(6) | 350,713 | 3/1/21 | | | | | 15,345(2) | 942,336 | 3/1/22 | | | | | 47,509(2) | 2,917,528 | 3/1/23 | | | | | 13,329(4) | 818,534 | 2/15/23 | | | | | 40,282(12) | 2,473,718 | 4/15/23 | | | | | | | 3/1/21 | 17,135(7) | 1,052,260 | | | | | 3/1/22 | 36,832(8) | 2,261,853 | | | | | 3/1/23 | 47,509(5) | 2,917,528 |
2023 Outstanding Equity Awards at Fiscal Year-End Table
| (1) Market value is calculated based on $61.41 per share, the closing price of PayPal’s common stock on December 29, 2023. |
2023 Outstanding Equity Awards at Fiscal Year-End Table
| (2) Becomes fully vested over three years, with one-third vesting on the first anniversary of the grant date, and the remainder vesting ratably each following quarter over the remaining vesting period, subject to the NEO’s continued employment. |
2023 Outstanding Equity Awards at Fiscal Year-End Table
| (3) One-half of the shares subject to these service-based RSUs will vest on the first anniversary of the grant date, with the remainder vesting on the second anniversary of the grant date, subject to the NEO’s continued employment. |
2023 Outstanding Equity Awards at Fiscal Year-End Table
| (4) Represents unvested PBRSUs granted under the 2023 AIP based on actual Company performance. These AIP PBRSUs were subject to the achievement of the performance goals over the one-year performance period from January 1, 2023 through December 31, 2023. Following the performance period, these RSUs became fully vested on February 15, 2024 based on Company performance. |
2023 Outstanding Equity Awards at Fiscal Year-End Table
| Mr. Chriss’ AIP PBRSUs were prorated based on his start date relative to the performance period, and Mr. Jorgensen’s AIP PBRSUs were prorated based on his full months of service during the AIP performance period, in accordance with the Jorgensen Separation Agreement. |
2023 Outstanding Equity Awards at Fiscal Year-End Table
| (5) The amounts reported in this row assume achievement of target performance goals for the 2023-2025 PBRSU awards granted in 2023, as performance for the 2023-2025 performance period is measured on a cumulative basis and is not determinable until the end of the three-year performance period. The PBRSU awards vest based on PayPal’s performance over the three-year performance period with respect to the FX-Neutral Revenue CAGR and Free Cash Flow CAGR goals. PBRSUs earned based on Company performance will become fully vested on March 1, 2026, subject to the NEO’s continued employment through the vesting date. |
2023 Outstanding Equity Awards at Fiscal Year-End Table
| (6) Becomes fully vested over three years, with one-third vesting on the first, second and third anniversaries of the date of grant, subject to the NEO’s continued employment. |
2023 Outstanding Equity Awards at Fiscal Year-End Table
| 80 | • 2024 Proxy Statement |
2023 Outstanding Equity Awards at Fiscal Year-End Table
2023 Outstanding Equity Awards at Fiscal Year-End Table
2023 Outstanding Equity Awards at Fiscal Year-End Table
| (7) The share amounts reported in this row assume achievement of target performance goals for the 2021-2023 PBRSUs granted in 2021, as performance for the 2021-2023 performance period is measured on a cumulative basis and is not determinable until the end of the three-year performance period. The PBRSU awards vest based on the Company’s performance over the three-year performance period with respect to the FX-Neutral Revenue CAGR and Free Cash Flow CAGR goals. The percentage of target achieved for the 2021-2023 PBRSUs was 0%, and no shares were earned or issued on the March 1, 2024 vesting date. |
2023 Outstanding Equity Awards at Fiscal Year-End Table
| (8) The amounts reported in this row assume achievement of target performance goals for the 2022-2024 PBRSU awards granted in 2022, as performance for the 2022-2024 performance period is measured on a cumulative basis and is not determinable until the end of the three-year performance period. The PBRSU awards vest based on the Company’s performance over the three-year performance period with respect to the FX-Neutral Revenue CAGR and Free Cash Flow CAGR goals. PBRSUs earned based on Company performance will become fully vested on March 1, 2025, subject to the NEO’s continued employment through the vesting date. |
2023 Outstanding Equity Awards at Fiscal Year-End Table
| (9) Represents unvested service-based RSUs that accelerated vesting upon Ms. Rabinovitch’s separation from PayPal on January 31, 2024, in accordance with the Rabinovitch Transition Agreement. |
2023 Outstanding Equity Awards at Fiscal Year-End Table
| (10) Represents PBRSUs that were forfeited upon Ms. Rabinovitch’s separation from PayPal on January 31, 2024, in accordance with the Rabinovitch Transition Agreement. |
2023 Outstanding Equity Awards at Fiscal Year-End Table
| (11) Represents unvested service-based RSUs that accelerated vesting upon Ms. Alford’s separation from PayPal on January 31, 2024, in accordance with the Alford Separation Agreement. |
2023 Outstanding Equity Awards at Fiscal Year-End Table
| (12) Represents the Leadership Transition RSUs that will become fully vested on the second anniversary of the grant date, subject to the NEO’s continued employment. |
2023 Option Exercises and Stock Vested Table
2023 Option Exercises and Stock Vested Table The following table sets forth the number of shares acquired, and the value realized, upon exercise of stock options and the vesting of stock awards by each of our NEOs for the fiscal year ended December 31, 2023. None of our NEOs exercised stock options during the fiscal year ended December 31, 2023.
2023 Option Exercises and Stock Vested Table
| | Stock Awards | | | Name | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting(1) ($) | | Alex Chriss | — | — | | Jamie Miller | — | — | | Michelle Gill | — | — | | John Kim | 22,114 | 1,232,856 | | Dan Schulman | 432,512 | 30,714,380 | | Gabrielle Rabinovitch | 45,681 | 3,171,566 | | Blake Jorgensen | 31,246 | 2,006,306 | | Peggy Alford | 72,893 | 5,272,942 | | Aaron Karczmer | 84,315 | 6,116,114 |
2023 Option Exercises and Stock Vested Table
| (1) Value realized for stock awards is calculated based on the closing price per share on each applicable vesting date. |
2023 Non-Qualified Deferred Compensation Table
2023 Non-Qualified Deferred Compensation Table All NEOs are eligible to participate in the DCP. In 2023, Mr. Karczmer elected to participate in the DCP. For more information, see the section titled “Deferred Compensation” in the CD&A.
2023 Non-Qualified Deferred Compensation Table
| Name | Executive Contributions in 2023 ($) | PayPal Contributions in 2023 ($) | Aggregate Earnings in 2023 ($) | Aggregate Withdrawals/ Distributions ($)(1) | Aggregate Balance as of December 31, 2023 ($) | | Aaron Karczmer | 150,000 | — | 12,853 | — | 162,853 |
2023 Non-Qualified Deferred Compensation Table
| (1) Mr. Karczmer first participated in the DCP in 2023. None of the earnings or balance as of December 31, 2023 were reported as compensation in a previous year. |
2023 Non-Qualified Deferred Compensation Table
The following table, footnotes, and narrative set forth our payment obligations pursuant to the compensation arrangements for each of our NEOs serving as of the Record Date, as well as Ms. Rabinovitch, under the circumstances described below, assuming that their employment was terminated or a change in control of PayPal occurred on December 31, 2023. Because our executive compensation program is heavily weighted towards equity-based compensation, a significant percentage of the compensation that would be received by our NEOs upon a termination of employment under the circumstances described below relates to the settlement of outstanding equity awards. See the 2023 Outstanding Equity Awards at Fiscal Year-End Table above for further information regarding outstanding equity awards granted to the NEOs in 2023 and in prior years.
2023 Non-Qualified Deferred Compensation Table
| • 2024 Proxy Statement | 81 |
2023 Non-Qualified Deferred Compensation Table
Potential Payments Upon Termination or Change in Control Table Please see the section below titled “Executive Departure-Related Compensation” for a description and quantitative summary of the amounts Messrs. Schulman and Jorgensen and Ms. Alford received in connection with their separations from PayPal prior to the Record Date, along with the “Leadership Changes and Related Compensation” section for further details regarding their separations. The section below titled “Executive Departure-Related Compensation” also includes a description and quantitative summary of the amounts Mr. Karczmer will receive in connection with his planned separation from PayPal on April 30, 2024.
2023 Non-Qualified Deferred Compensation Table
| Name | Voluntary Termination or Retirement ($)(a)(1) | Involuntary Termination Outside of Change in Control Period ($)(b)(1) | Involuntary Termination Within Change in Control Period ($)(c)(1) | Death or Disability ($)(d)(1) | | Alex Chriss | — | 46,280,841 | 46,257,902 | 44,809,035 | | Jamie Miller | — | 9,154,061 | 9,131,130 | 8,846,725 | | Michelle Gill | — | 9,169,874 | 9,141,973 | 8,846,725 | | John Kim | — | 10,590,255 | 10,554,573 | 10,259,027 | | Gabrielle Rabinovitch(2) | — | 11,951,284 | 11,951,279 | 11,716,844 | | Aaron Karczmer | — | 6,468,320 | 6,432,810 | 6,137,561 |
2023 Non-Qualified Deferred Compensation Table
| (1) Amounts do not take into account (i) potential reductions due to “best net pay” provision in the Executive Severance Plan, (ii) the value of the 2021-2023 PBRSUs, which were earned at 0% of target following the completion of the performance period on December 31, 2023, or (iii) the value of the AIP PBRSUs, which were earned at 151% of target following the completion of the AIP performance period on December 31, 2023. |
2023 Non-Qualified Deferred Compensation Table
| (2) Ms. Rabinovitch is included in this table even though she departed after fiscal year end and prior to the Record Date, because her actual severance entitlements were newly negotiated rather than the terms that would have applied under the Executive Severance Plan. Please see the section titled “Executive Transition Related Compensation” for a description and quantitative summary of the severance payments and transition benefits Ms. Rabinovitch received in connection with her termination of employment from PayPal. |
Retirement – Column (a)
| • | Eligibility for continued vesting of all outstanding equity awards. Any outstanding time-based restricted stock unit awards would be eligible to continue vesting in accordance with their original schedule; however, if any such awards were scheduled to vest more frequently than annually, each scheduled vesting date not falling on an anniversary of the grant date would be treated as though that vesting date were on the next following anniversary of the grant date. Any outstanding PBRSUs (other than PBRSUs awarded pursuant to an Annual Incentive Plan) would remain outstanding and eligible to vest, based solely on the achievement of the applicable Company performance targets for the applicable performance period. |
Involuntary Termination with a Change in Control – Column (c)
| • | Accelerated vesting of outstanding equity awards. If the termination occurs during a performance period with respect to an award of PBRSUs, such award will be deemed earned assuming achievement of target performance for purposes of determining the number of awards that will be treated as becoming immediately vested. |
Executive Departure-Related Compensation
Executive Departure-Related Compensation As noted above under the heading “Leadership Changes and Related Compensation”, in connection with their terminations of employment, each of Messrs. Schulman, Jorgensen and Karczmer and Mses. Rabinovitch and Alford entered into an agreement with PayPal documenting their respective severance benefits and the conditions to receiving such severance benefits, including timely execution and non-revocation of a release of claims in favor of PayPal and compliance with non-solicitation, non-disparagement, confidentiality, and other obligations (the “NEO Separation Agreements”). Severance payable under the NEO Separation Agreements is described in this section. Any estimated amounts are estimated using the following assumptions, unless otherwise noted below: (1) RSUs and PBRSUs are valued at $59.70 per share, which was our closing stock price on February 15, 2024, unless such RSUs and PBRSUs vested earlier than February 15, 2024, in which case they are valued at the closing share price on the vesting date (or if the vesting date is not a trading day, the trading day prior to the vesting date); (2) PBRSUs granted in 2021 and 2022 assumed at 0% achievement (based on actual and probable outcome, respectively), and PBRSUs granted in 2023 assumed at target achievement; (3) severance based on a pro-rata amount under the 2024 PayPal Annual Incentive Plan is estimated assuming that PayPal’s actual performance is equal to target performance, and (4) health-premium related benefits are calculated based on estimated COBRA rates for the applicable NEO (collectively, the “Assumptions”).
Executive Departure-Related Compensation
| 84 | • 2024 Proxy Statement |
Executive Departure-Related Compensation
Potential Payments Upon Termination or Change in Control Table Mr. Schulman Mr. Schulman was entitled to receive the following retirement benefits under the Schulman Retirement Agreement, subject to his compliance with its terms:
Executive Departure-Related Compensation
| Retirement Benefits Type | Amount ($)(1) | | Continued vesting of outstanding RSUs and PBRSUs in accordance with the terms of the ELTIP, excluding the CEO Transition Performance-Based RSU Awards | 12,737,473* | | Vesting of the CEO Transition Performance-Based RSU Awards in accordance with their terms(2) | 4,939,284 | | Payments for health benefits on each of March 1, 2024, March 1, 2025 and March 1, 2026 calculated to approximate prorated COBRA premium payments in accordance with the ELTIP for continued health, vision, and dental benefits | 25,739 | | Continued payments of Mr. Schulman’s base salary through December 31, 2023(3) | 328,767 | | Lump sum equal to the cash portion of Mr. Schulman’s 2023 bonus incentive under the 2023 AIP, with individual performance deemed achieved at the target level, with payment at or around when other participants of the 2023 AIP receive their 2023 AIP payout(3) | 625,000 | | Vesting of the AIP PBRSUs granted pursuant to the Company performance portion of the 2023 AIP in February 2024, based on actual performance through the full performance period(3) | 2,121,970 | | PayPal’s reimbursement of Mr. Schulman for up to $15,000 in legal fees with respect to the negotiation of the Schulman Retirement Agreement(3) | 15,000 | | TOTAL | 20,793,233* |
Executive Departure-Related Compensation
| (1) Amounts denoted with an asterisk (*) are estimates calculated based on the applicable Assumptions. Amounts that are not denoted by an asterisk are actual amounts. |
Executive Departure-Related Compensation
| (2) On March 1, 2023, PayPal granted Mr. Schulman a set of RSU awards designed to vest based on certain leadership transition milestones being met (each, a “CEO Transition Performance-Based RSU Award”) as described further in the Compensation Discussion and Analysis and the 2023 Grants of Plan-Based Awards Table. The first of the CEO Transition Performance-Based RSU Awards vested in full on September 27, 2023, when Mr. Chriss’ appointment took effect, and the second of the CEO Transition RSU Awards vested in full on December 11, 2023. |
Executive Departure-Related Compensation
| (3) Mr. Schulman’s guaranteed base salary payments for the remainder of 2023 (for the period after he ceased to be the CEO, starting September 27, 2023 through December 31, 2023), entitlement to a 2023 AIP bonus, and reimbursement of certain legal fees were not severance that Mr. Schulman was entitled to in connection with a Qualifying Retirement under the Executive Severance Plan. The Board determined in March 2023 that it was necessary to provide such guaranteed continued base salary payments and entitlement to a 2023 AIP bonus to ensure the Board had sufficient time to conduct a rigorous search process to identify the best successor for Mr. Schulman, to ensure that Mr. Schulman remained focused on execution of our financial, strategic and operating goals and to execute an orderly and effective CEO transition. |
Executive Departure-Related Compensation
Under the Schulman Retirement Agreement, Mr. Schulman was also required to reimburse PayPal an amount equal to $388,000 to offset a portion of his personal use of Company corporate aircraft in 2023. Mr. Jorgensen Mr. Jorgensen was entitled to receive the following severance under the Jorgensen Separation Agreement, subject to his compliance with its terms:
Executive Departure-Related Compensation
| Severance Type | Amount ($)1, 2 | | Lump sum equal to 1.5 times the sum of Mr. Jorgensen’s (i) base salary and (ii) target AIP bonus, generally payable within 60 days after September 15, 2023 | 2,531,250 | | Lump sum equal to the cash portion of Mr. Jorgensen’s 2023 bonus incentive under the 2023 AIP, with individual performance deemed achieved at the target level, pro-rated to reflect that he was employed by PayPal for 8 full months out of the 12 month performance period, with payment at or around when other participants of the 2023 AIP receive their 2023 AIP payout | 156,250 | | Vesting of the AIP PBRSUs granted pursuant to the Company performance portion of the 2023 AIP in February 2024, based on actual performance through the full performance period, pro-rated to reflect that he was employed by PayPal for 8 full months out of the 12 month performance period | 530,485 | | 12 months of continued vesting of all RSUs that were outstanding as of September 15, 2023 in accordance with their regular vesting schedule (but no longer subject to a continued employment requirement), except the RSU vesting schedule converted to annual vesting, i.e., any quarterly vests will be deemed to vest on the next anniversary of the grant date | 1,865,386* | | Up to 12 months of reimbursement of COBRA health premiums or payment of health premiums, at COBRA rates | 20,427* | | TOTAL | 5,103,798* |
Executive Departure-Related Compensation
| (1) Amounts denoted with an asterisk are estimates calculated based on the applicable Assumptions. Amounts that are not denoted by an asterisk are actual amounts. |
Executive Departure-Related Compensation
| (2) Under the Jorgensen Separation Agreement, Mr. Jorgensen remained employed with PayPal on garden leave from March 7, 2023 through September 15, 2023, during which time he agreed to provide any requested transition services to PayPal. Mr. Jorgensen’s equity continued to vest during this period and he received the last installment of his sign-on bonus as provided by his offer letter during this period. |
Executive Departure-Related Compensation
| • 2024 Proxy Statement | 85 |
Executive Departure-Related Compensation
Potential Payments Upon Termination or Change in Control Table Ms. Rabinovitch Ms. Rabinovitch was entitled to receive the following transition payments and severance under the Rabinovitch Transition Agreement, subject to her compliance with its terms:
Executive Departure-Related Compensation
| Transition Payment or Severance Type | Amount ($)(1) | | Lump sum cash payment from PayPal equal to $150,000 within 60 days following January 31, 2024, contingent on Ms. Rabinovitch providing satisfactory transition services during January 2024, as determined by PayPal | 150,000 | | Lump sum equal to the cash portion of Ms. Rabinovitch’s 2023 bonus incentive under the 2023 AIP, with individual performance deemed achieved at the target level, with payment at or around when other participants of the 2023 AIP receive their 2023 AIP payout | 234,375 | | Vesting of the AIP PBRSUs granted pursuant to the Company performance portion of the 2023 AIP in February 2024, based on actual performance through the full performance period | 795,728 | | Accelerated vesting on January 31, 2024 of Ms. Rabinovitch’s outstanding time-based RSUs and eligibility to continue vesting in Ms. Rabinovitch’s outstanding PBRSUs that were granted before March 1, 2023, on the same basis and to the same extent as determined for PayPal’s executive officers(2) | 6,072,327* | | TOTAL | 7,252,429* |
Executive Departure-Related Compensation
| (1) Amounts denoted with an asterisk are estimates calculated based on the applicable Assumptions. Amounts that are not denoted by an asterisk are actual amounts. |
Executive Departure-Related Compensation
| (2) Ms. Rabinovitch’s PBRSUs granted in March 2023 were forfeited on December 31, 2023. |
Executive Departure-Related Compensation
Ms. Alford Ms. Alford was entitled to receive the following severance under the Alford Separation Agreement, subject to her compliance with its terms:
Executive Departure-Related Compensation
| Severance Type | Amount ($)(1) | | Lump sum equal to 1.5 times the sum of Ms. Alford’s (i) base salary and (ii) target AIP bonus, generally payable within 60 days after January 31, 2024 | 2,531,250 | | Lump sum equal to the cash portion of Ms. Alford’s 2023 bonus incentive under the 2023 AIP, with individual performance deemed achieved at the target level, with payment at or around when other participants of the 2023 AIP receive their 2023 AIP payout | 234,375 | | Vesting of the AIP PBRSUs granted pursuant to the Company performance portion of the 2023 AIP in February 2024, based on actual performance through the full performance period | 795,728 | | An amount equal to Ms. Alford’s bonus under the 2024 PayPal Annual Incentive Plan on a prorated basis based on full months of service during the performance period, with individual performance based on 100% of the target bonus incentive and Company performance based on actual performance through the full performance period, with payment at or around when other participants of the 2024 PayPal Annual Incentive Plan receive their payout | 78,125* | | Accelerated vesting on January 31, 2024 of Ms. Alford’s outstanding service-based RSUs that were granted prior to July 1, 2021 | 350,370 | | Eligibility to continued vesting in all of Ms. Alford’s RSUs and PBRSUs that were outstanding as of January 31, 2024, in accordance with their regular vesting schedule and based on actual performance for PBRSUs through the full performance period (but no longer subject to a continued employment requirement), except that the vesting schedule for RSUs converted to ratable annual vesting (i.e., any RSUs scheduled to vest on a quarterly vest date are deemed to vest on the next anniversary of the grant date) | 8,592,681* | | Up to 12 months of subsidized COBRA health premiums (estimated to be $31,166) and an annual cash payment based on Ms. Alford’s COBRA premium rate on her separation date and the period during which Ms. Alford is eligible to continue vesting in any equity awards under the ELTIP (estimated to be $33,763, representing 13 months of potential continued vesting) | 64,929* | | TOTAL | 12,647,457* |
Executive Departure-Related Compensation
| (1) Amounts denoted with an asterisk are estimates calculated based on the applicable Assumptions. Amounts that are not denoted by an asterisk are actual amounts. |
Executive Departure-Related Compensation
| 86 | • 2024 Proxy Statement |
Executive Departure-Related Compensation
Potential Payments Upon Termination or Change in Control Table Mr. Karczmer Mr. Karczmer is entitled to receive the following severance under the Karczmer Separation Agreement, subject to his compliance with its terms:
Executive Departure-Related Compensation
| Severance Type | Amount ($)(1) | | Lump sum equal to 1.5 times the sum of Mr. Karczmer’s (i) base salary and (ii) target AIP bonus, generally payable within 30 days after April 30, 2024 | 2,531,250 | | An amount equal to Mr. Karczmer’s bonus under the 2024 PayPal Annual Incentive Plan on a prorated basis based on full months of service during the performance period, with individual performance based on 100% of the target bonus incentive and Company performance based on actual performance through the full performance period, with payment at or around when other participants of the 2024 PayPal Annual Incentive Plan receive their payout | 312,500* | | Eligibility to continued vesting for 12 months in Mr. Karczmer’s RSUs that were outstanding as of April 30, 2024 and eligibility to continued vesting for Mr. Karczmer’s PBRSUs granted March 1, 2022, in accordance with their regular vesting schedule and based on actual performance for PBRSUs through the full performance period (but no longer subject to a continued employment requirement), except that the vesting schedule for RSUs converted to ratable annual vesting (i.e., any RSUs scheduled to vest on a quarterly vest date are deemed to vest on the next anniversary of the grant date) | 4,083,182* | | Up to 12 months of reimbursement of COBRA health premiums or payment of health premiums, at COBRA rates | 31,006* | | TOTAL | 6,957,938* |
Executive Departure-Related Compensation
| (1) Amounts denoted with an asterisk are estimates calculated based on the applicable Assumptions. Amounts that are not denoted by an asterisk are actual amounts. |
Executive Departure-Related Compensation
| • 2024 Proxy Statement | 87 |
Executive Departure-Related Compensation
Pay versus Performance The following Pay versus Performance table sets forth information regarding PayPal’s performance and the “compensation actually paid” to our NEOs, as calculated in accordance with SEC disclosure rules. Amounts included as “compensation actually paid” do not represent the value of cash compensation and equity awards actually received by the NEOs, but rather is an amount calculated under SEC rules that includes, among other things, the year-over-year changes in the “fair value” of unvested equity-based awards. For discussion of how the Compensation Committee seeks to align pay with performance when making compensation decisions, please review the CD&A.
Executive Departure-Related Compensation
| Year 1 | Summary Compensation Table Total for PEO 2 (Chriss) ($) | Summary Compensation Table Total for PEO 2 (Schulman) ($) | Compensation Actually Paid to PEO 3 (Chriss)($) | Compensation Actually Paid to PEO 3 (Schulman) ($) | Average Summary Compensation Table Total for Non-PEO NEOs 2 ($) | Average Compensation Actually Paid to Non-PEO NEOs 3 ($) | Value of Initial Fixed $100 Investment Based On: 4 | | Net Income ($ millions) | Revenue 6 ($ millions) | | | | | | | | | Total Shareholder Return ($) | Peer Group Total Shareholder Return 5 ($) | | | | 2023 | 41,916,754 | 22,138,954 | 46,350,840 | 18,991,635 | 10,976,852 | 9,423,987 | 57 | 151 | 4,246 | 29,771 | | 2022 | 0 | 21,957,922 | 0 | -87,002,457 | 10,367,818 | -13,358,744 | 66 | 109 | 2,419 | 27,518 | | 2021 | 0 | 32,070,353 | 0 | 13,504,312 | 14,799,891 | 10,020,976 | 174 | 165 | 4,169 | 25,371 | | 2020 | 0 | 23,362,072 | 0 | 191,128,954 | 9,184,457 | 50,894,687 | 217 | 153 | 4,202 | 21,454 |
Executive Departure-Related Compensation
| 3 | To calculate compensation actually paid, adjustments were made to the amounts reported in the Summary Compensation Table for the applicable year. A reconciliation of the adjustments for Mr. Chriss, Mr. Schulman and for the average of the other NEOs is set forth following the footnotes to this table. |
Reconciliation of Compensation Actually Paid Adjustments
Reconciliation of Compensation Actually Paid Adjustments
Reconciliation of Compensation Actually Paid Adjustments
| Year | Summary Compensation Table Total 1 ($) | (Minus) Grant Date Fair Value of Stock Awards Granted in Fiscal Year 2 ($) | Plus Fair Value at Fiscal Year- End of Outstanding and Unvested Stock Awards Granted in Fiscal Year 3 ($) | Plus/(Minus) Change in Fair Value of Outstanding and Unvested Stock Awards Granted in Prior Fiscal Years 4 ($) | Plus Fair Value at Vesting of Stock Awards Granted in Fiscal Year that Vested During Fiscal Year 5 ($) | Plus/(Minus) Change in Fair Value as of Vesting Date of Stock Awards Granted in Prior Years for which Applicable Vesting Conditions Were Satisfied During Fiscal Year 6 ($) | (Minus) Fair Value as of Prior Fiscal Year-End of Stock Awards Granted in Prior Fiscal Years that Failed to Meet Applicable Vesting Conditions During Fiscal Year 7 ($) | Equals Compensation Actually Paid($) | | Mr. Chriss | | | | | | | | | | 2023 | 41,916,754 | (41,137,646) | 45,571,732 | 0 | 0 | 0 | 0 | 46,350,840 | | Mr. Schulman | | | | | | | | | | 2023 | 22,138,954 | (20,020,698) | 11,518,790 | (601,647) | 4,939,284 | 1,016,952 | 0 | 18,991,635 | | 2022 | 21,957,922 | (20,182,730) | 6,295,563 | (61,560,303) | - | (33,512,909) | - | (87,002,457) | | 2021 | 32,070,353 | (29,920,381) | 25,010,046 | (30,072,494) | - | 16,416,789 | - | 13,504,312 | | 2020 | 23,362,072 | (20,957,193) | 61,706,781 | 126,774,395 | - | 242,899 | | 191,128,954 | | Other NEOs (Average) 8 | | | | | | | | | | 2023 | 10,976,852 | (8,917,996) | 7,946,593 | (199,285) | 0 | (64,301) | (317,875) | 9,423,987 | | 2022 | 10,367,818 | (8,894,035) | 3,444,983 | (8,905,483) | - | (5,839,653) | (3,532,373) | (13,358,744) | | 2021 | 14,799,891 | (13,803,096) | 10,435,216 | (6,428,838) | - | 5,017,803 | - | 10,020,976 | | 2020 | 9,184,457 | (7,819,391) | 22,989,423 | 26,461,003 | - | 79,195 | - | 50,894,687 |
Reconciliation of Compensation Actually Paid Adjustments
| 1 | Represents Total Compensation as reported in the Summary Compensation Table for the indicated fiscal year. With respect to the other NEOs, amounts shown represent averages. |
Reconciliation of Compensation Actually Paid Adjustments
| 2 | Represents the grant date fair value of the stock awards granted during the indicated fiscal year, computed in accordance with the methodology used for financial reporting purposes. |
Reconciliation of Compensation Actually Paid Adjustments
| 3 | Represents the fair value as of the indicated fiscal year-end of the outstanding and unvested stock awards granted during such fiscal year, computed in accordance with the methodology used for financial reporting purposes. |
Reconciliation of Compensation Actually Paid Adjustments
| 4 | Represents the change in fair value during the indicated fiscal year of each stock award that was granted in a prior fiscal year and that remained outstanding and unvested as of the last day of the indicated fiscal year, computed in accordance with the methodology used for financial reporting purposes and, for awards subject to performance-based vesting conditions, based on the probable outcome of such performance-based vesting conditions as of the last day of the fiscal year. |
Reconciliation of Compensation Actually Paid Adjustments
| 5 | Represents the fair value at vesting of the stock awards that were granted and vested during the indicated fiscal year, computed in accordance with the methodology used for financial reporting purposes. |
Reconciliation of Compensation Actually Paid Adjustments
| 6 | Represents the change in fair value, measured from the prior fiscal year-end to the vesting date, of each stock award that was granted in a prior fiscal year and that vested during the indicated fiscal year, computed in accordance with the methodology used for financial reporting purposes. |
Reconciliation of Compensation Actually Paid Adjustments
| 7 | Represents the fair value as of the last day of the prior fiscal year of the stock awards that were granted in a prior fiscal year and which failed to meet the applicable vesting conditions in the indicated fiscal year, computed in accordance with the methodology used for financial reporting purposes. |
Reconciliation of Compensation Actually Paid Adjustments
| 8 | See footnote 1 in the Pay versus Performance table above for the NEOs included in the average for each year. |
Reconciliation of Compensation Actually Paid Adjustments
| • 2024 Proxy Statement | 89 |
Reconciliation of Compensation Actually Paid Adjustments
Relationship Between Pay and Performance
Proposal 6 – Bylaw Amendment: Stockholder Approval of Director Compensation
Proposal 6 – Bylaw Amendment: Stockholder Approval of Director Compensation The Bylaws of PayPal Holdings, Inc. are amended as follows: Article II, Section 1.12 is deleted and replaced in its entirety as follows: Compensation of Directors. The Board of Directors shall not have any authority to fix the compensation of directors. The compensation of directors the Corporation pays shall be fixed at $1 in a fiscal year; provided, however, the Corporation may pay, grant, or award compensation greater than $1 in a fiscal year if such compensation has been (1) disclosed to stockholders in advance of the fiscal year in which the Corporation will pay, grant, or award such compensation; (2) submitted to an approval vote of stockholders at an annual or special meeting of stockholders in advance of the fiscal year in which the Corporation will pay, grant, or award such disclosed compensation; and (3) approved by a majority of stockholder votes present in person or represented by proxies and entitled to vote cast in favor of the disclosed annual compensation at an annual or special meeting of stockholders in advance of the fiscal year in which the Corporation will pay, grant, or award such compensation, which majority shall include only stockholder votes of stockholders that are not directors of the Company.
PayPal’s Statement in Opposition
| The proposed bylaw amendment is not in the best interest of PayPal because: • PayPal’s director compensation program is reasonable and reflects market practice. • PayPal already provides opportunities for stockholders to express their views on director compensation. • The proponent’s requested director compensation scheme would place PayPal at an extreme disadvantage relative to other US public companies and hinder PayPal’s ability to maintain a qualified, high-performing Board of Directors. PayPal’s director compensation program is reasonable and reflects market practice As discussed under the section titled “Director Compensation,” the Compensation Committee of the Board of Directors, comprising solely independent directors, reviews and makes recommendations to the Board regarding compensation paid to non-employee directors for their Board and committee service. The Committee reviews the non-employee director compensation program on an annual basis, receiving input from the Committee’s independent compensation consultant regarding market practices and the competitiveness of the non-employee director compensation program in relation to the general market and the Company’s peer group. This process has resulted in an effective compensation program that enables the Company to attract and retain highly-qualified directors with the background, experience and skills needed to oversee the management of the Company, while remaining aligned with market practices for director compensation. Structurally, our program is broadly consistent with the practices of both our peers and other S&P 500 constituents. Further, the annual compensation paid to our directors, as set forth in the Director Compensation Table, is well within the range of amounts paid by our peers, as well as companies in the S&P 500 Technology and S&P 500 Financial Services indices. PayPal already provides opportunities for stockholders to express their views on director compensation PayPal’s established good governance processes provide ample opportunities for investors to express their views on director compensation. PayPal maintains an active stockholder engagement process with participation by members of our Board and facilitates regular communication of stockholder feedback to the full Board; investors to date have not raised the amount, structure, or form of our director compensation as a concern. Additionally, all of PayPal’s directors are subject to election on an annual basis, and investors who are concerned about director pay practices could emphasize any views shared in direct dialogue with the Company through a vote on the members of the Compensation Committee, without requiring a separate vote to signal the investor’s perspective. These two key communication pathways provide an effective venue for investors to share their views on director compensation. The proponent’s requested director compensation scheme would place PayPal at an extreme disadvantage relative to other US public companies and hinder PayPal’s ability to maintain a qualified, high-performing Board of Directors The proponent’s proposed bylaw amendment would completely upend the widely-accepted framework for director compensation at public companies and place PayPal at a significant disadvantage in attracting and retaining highly-qualified directors. First, the proposed regime would require advance approval of director compensation, creating enormous uncertainty each year for nominees and incumbent directors as to what, if any, compensation they might receive for their significant commitment of time and effort to serve on our Board, a commitment they would need to make before knowing how they will be compensated. Second, the vote would be binary and binding, leaving no room for any iterative and deliberative dialogue with investors regarding director compensation. Finally, directors – particularly those with the caliber and diversity of qualifications, experience and expertise we seek for our Board – typically have great flexibility as to which of the available board positions they might accept. For these reasons, highly-qualified directors who are sought by multiple public companies would be less willing to serve on PayPal’s Board because the proposal would result in (i) recurring uncertainty about the expected compensation for board service and (ii) the potential for a full year’s compensation for board service to be capped at $1, which is in stark contrast to a predictable, competitive director compensation program. Accordingly, if PayPal were shackled to the proponent’s mandatory advance director compensation framework, it would be materially disadvantaged in attracting the most qualified candidates, facing a significant and perennial obstacle to realizing long-term shareholder value. * * * Our Board has carefully considered the Proposal, and for the reasons set forth above, the Board believes that adoption of the proposed Bylaw amendment and resulting director compensation stockholder approval requirements would introduce significant uncertainty and compromise PayPal’s ability to attract and retain highly-qualified directors. Therefore, our Board believes that the Proposal is not in the best interests of PayPal and its stockholders. |