DEF 14A of Clear Secure, Inc.
Filed Apr 22, 2024 · FY20230001193125-24-105016
Director Nominees
Director Nominees The Board has nominated eight director candidates. Of the eight nominees, six are independent director nominees. All director nominees have been nominated for a one-year term to expire at the 2025 annual meeting of the Company’s stockholders and once their successors have been elected and qualified. Our director nominees collectively have significant experience in business leadership, finance and accounting, law, management, investment, operational and strategic planning, and unmatched institutional knowledge of the Company. Our Board believes that the Company and its stockholders benefit from the combination of the diverse perspectives, institutional knowledge, and the collective deep business and investment experience of the director nominees. Detailed information about each nominee’s background, skills and qualifications can be found under “Proposal 1 — Election of Directors.”
Director Nominees
| Director Nominees | | | | Caryn Seidman Becker | Jeffery H. Boyd | Shawn Henry | | Kenneth Cornick | Tomago Collins | Kathryn A. Hollister | | Michael Z. Barkin | | Adam J. Wiener |
Director Compensation
Director Compensation The following table describes the components of our non-executive directors’ compensation program in effect for the year ended December 31, 2023:
Director Compensation
| COMPENSATION ELEMENT(1) | COMPENSATION | | Annual Cash Retainer | $35,000 | | One-Time New Director Equity Award(2) | $350,000 | | Annual Equity Retainer(3) | $175,000 | | Independent Lead Director Fee | $30,000 | | Audit Committee Chair Fee | $20,000 | | Compensation Committee Chair Fee | $12,000 | | Nominating and Governance Committee Chair Fee | $8,000 |
Director Compensation
| (1) A director who is also a Company employee receives no additional compensation for serving as a director. |
Director Compensation
| (2) On the date of initial appointment or election to the Board, a director will receive a grant of restricted stock units (“RSUs”) determined by dividing the value of the one-time new director equity award by the closing market price of Class A Common Stock on the date of grant, subject to vesting in three equal installments on each of the first three anniversaries of the date of grant. |
Director Compensation
| (3) Each director receives an annual grant of RSUs determined by dividing the value of the annual equity retainer by the closing market price of Class A Common Stock on the date of grant (which is the date of the annual meeting), subject to vesting on the earlier of (i) the one year anniversary of grant date or (ii) the next annual meeting date. Such compensation is made pursuant to the Clear Secure, Inc. 2021 Omnibus Incentive Plan (the “2021 Omnibus Incentive Plan”). |
Director Compensation
Director Compensation Table The table below summarizes the total compensation paid to or earned for the 2023 fiscal year by each person who served as a non-executive director. Ms. Seidman Becker and Mr. Cornick, who are employees of the Company, receive no separate compensation for service as directors and therefore are not listed in the table below.
Director Compensation
| Name | Fees Earned or Paid in Cash ($)(1) | Stock Awards ($)(2)(3) | Total ($) | | Michael Z. Barkin | 55,000 | 174,989 | 229,989 | | Jeffery H. Boyd | 73,000 | 174,989 | 247,989 | | Tomago Collins | 35,000 | 174,989 | 209,989 | | Shawn Henry | 17,500 | 350,002 | 367,502 | | Kathryn A. Hollister | 35,000 | 174,989 | 209,989 | | Adam J. Wiener | 47,000 | 174,989 | 221,989 |
Director Compensation
| (1) These amounts represent retainer, committee and board fees earned during the fiscal year ended December 31, 2023. The amounts reported do not include any reasonable out-of-pocket expenses incurred in attending meetings for which the Company reimburses each non-executive director. |
Director Compensation
| (2) This column reflects the grant date fair market value of 7,056 RSUs granted on June 14, 2023 to each non-executive director (other than Mr. Henry), as calculated in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718. With respect to Mr. Henry, this column reflects the grant date fair value of 14,113 RSUs granted on June 14, 2023, as calculated in accordance with FASB ASC Topic 718. The assumptions used by the Company in calculating the grant date fair values are set forth in Note 15 to our financial statements included in our 2023 Form 10-K. |
Director Compensation
| (3) For each non-executive director, the aggregate number of RSUs held as of December 31, 2023 is as follows: Michael Z. Barkin, 7,056 RSUs; Jeffery H. Boyd, 7,056 RSUs; Tomago Collins, 10,820 RSUs; Shawn Henry, 14,113 RSUs; Kathryn A. Hollister, 10,820 RSUs; and Adam J. Wiener, 7,056 RSUs. |
PROPOSAL 1 – ELECTION OF DIRECTORS
PROPOSAL 1 – ELECTION OF DIRECTORS At the recommendation of our Nominating and Corporate Governance Committee, our Board proposes that each of the eight director nominees named below be elected as a director for a term to expire at the 2025 annual meeting of stockholders and until such director’s successor is duly elected and qualified or until such director’s earlier death, resignation, disqualification, or removal. Each director will be elected by a plurality of the votes cast. Shares represented by proxies will be voted “FOR” the election of each of the nominees named below, unless the proxy is marked to withhold authority to so vote. If any nominee for any reason is unable to serve or for good cause will not serve, the proxies may be voted for such substitute nominee as the proxy holder might determine. Each nominee has consented to being named in this Proxy Statement and to serve if elected. Stockholders may not cumulate votes for the election of directors.
Director since June 6, 2021
Director since June 6, 2021 Committee Memberships: None Other Public Company Directorships: The Home Depot, Inc. (NYSE: HD) Caryn Seidman Becker has served as Chairman and Chief Executive Officer since 2010. Over the past 14 years, she has grown CLEAR into a global, customer-obsessed brand serving 56 airports, over 20 million members and a growing list of B2B partners across the travel, health and sports industries. From day one as Chief Executive Officer, Ms. Seidman Becker has pursued her vision of using identity to create a more frictionless world, with an obsession to deliver amazing customer experience. Today, CLEAR is a trusted brand using their platform across industries from travel to sports to health care. With over 3,000 full time employees across the United States, CLEAR is shaping the future of how we work, live and travel. Prior to CLEAR, from 2002 to 2009, she started and was the Managing Partner of Arience Capital, an over $1 billion value-oriented asset management firm focused on investing in companies across a broad spectrum of industries including consumer, technology, aerospace and defense and turnarounds. Prior to Arience Capital, she served as Managing Director at Iridian Asset Management, an investment advisor firm, and Assistant Vice President at Arnhold and S. Bleichroeder, an investment bank. Ms. Seidman Becker has served as a director of The Home Depot, Inc. (NYSE: HD), a home improvement retailer, since 2022. She previously served as a director of Lemonade, Inc. (NYSE: LMND), an insurance company, from 2018 to 2022, and a director and member of the audit committee of CME Group, Inc. (NASDAQ: CME), a public financial market company, from 2009 to 2012. Ms. Seidman Becker is an active member of the community and sits on the Board of Trustees for the Partnership for New York City and is a Board Member of New York-Presbyterian Hospital, the 9/11 Memorial & Museum and The School for Ethics and Global Leadership. She holds a Bachelor of Science degree in Political Science from the University of Michigan. We believe Ms. Seidman Becker is qualified to serve as a member of our Board because of her experience co-founding, building and leading our business since its relaunch, her insight into corporate matters as our Chief Executive Officer and her extensive leadership background. KENNETH CORNICK – AGE 51
Director since June 6, 2021
Director since June 6, 2021 Committee Memberships: None Other Public Company Directorships: None Kenneth Cornick has served as our President since 2010 and Chief Financial Officer since 2020 and from our inception to 2017. In addition, Mr. Cornick serves as a member of our Board. Mr. Cornick co-founded CLEAR with Ms. Seidman Becker in 2010. Prior to CLEAR, he was a Partner at Arience Capital from 2003 to 2009. Mr. Cornick holds a Bachelor of Arts degree from Bowdoin College and serves on the Board of Trustees of LREI, a progressive independent school in New York City, and Center ID Corp., an expense management software company. We believe Mr. Cornick is qualified to serve as a member of our Board because of his experience co-founding, building and leading our business since its relaunch and his insight into financial matters as our Chief Financial Officer. MICHAEL Z. BARKIN – AGE 46
Director since June 6, 2021
Director since June 6, 2021 Committee Memberships: Audit (Chair), Compensation Michael Z. Barkin serves as a member of our Board. Mr. Barkin previously served as Executive Vice President and Chief Financial Officer from 2013 to 2022 and Vice President of Strategy and Development from 2012 to 2013 of Vail Resorts, Inc. (NYSE: MTN), an American mountain resort company (“Vail Resorts”). Prior to joining Vail Resorts, he was a Principal at KRG Capital Partners, a private equity investment firm (“KRG”), where he was a member of the investment team from 2006 to 2012. At KRG, Mr. Barkin was responsible for managing new acquisitions and had portfolio company oversight across multiple sectors. Prior to KRG, he worked at Bain Capital Partners, a private equity investment firm, and Bain & Company, a strategy and consulting firm. Mr. Barkin has served as the Board Chair of Evolve Vacation Rental Network, Inc., a vacation rental management platform, since August 2023. Mr. Barkin currently serves as a Trustee of the Museum of Contemporary Art in Denver. Mr. Barkin holds a Bachelor of Arts degree from Williams College and a Masters in Business Administration from Stanford University. We believe Mr. Barkin is qualified to serve as a member of our Board because of his experience in business model transformation, organizational scaling, risk management, capital allocation and financial planning. JEFFERY H. BOYD – AGE 67
Director since June 6, 2021
Director since June 6, 2021 Committee Memberships: Nominating and Corporate Governance (Chair) Other Public Company Directorships: Oscar Health, Inc. (NYSE: OSCR), The Home Depot, Inc. (NYSE: HD) Jeffery H. Boyd serves as a member of our Board and is our Lead Independent Director. Mr. Boyd served as Chief Executive Officer and President of Booking Holdings Inc. (NASDAQ: BKNG) (formerly known as The Priceline Group, Inc.), an online travel company (“Booking”), from 2002 to 2013, as Interim Chief Executive Officer from April 2016 to December 2016, as Chairman of the Board from 2016 to 2020 and as a Director from 2001 to 2021. Mr. Boyd also served as Booking’s President and Co-Chief Executive Officer from August 2002 to November 2002, its Chief Operating Officer from 2000 to 2002, and its Executive Vice President, General Counsel and Secretary from January 2000 to October 2000. Mr. Boyd has also served as the chairman of the board of directors of Oscar Health, Inc. (NYSE: OSCR), a health insurance company, since 2021 and a member of the board of directors of The Home Depot, Inc. (NYSE: HD), a home improvement retailer, since 2016, among other director positions. Mr. Boyd holds a Bachelor of Arts degree from St. Lawrence University and a Juris Doctor from Cornell Law School. We believe Mr. Boyd’s extensive experience in health care, e-commerce, sales and digital marketing, as well as his proven leadership, corporate governance and strategic management skills, makes him particularly qualified to serve as a member of our Board. TOMAGO COLLINS – AGE 52
Director since June 29, 2021
Director since June 29, 2021 Committee Memberships: Audit, Nominating and Corporate Governance Other Public Company Directorships: Republic Services Group, Inc. (NYSE: RSG) Tomago Collins serves as a member of our Board. Mr. Collins served as the Executive Vice President of Communications and Business Development at Kroenke Sports & Entertainment from 2020 to April 2024 and prior to that, served as Kroenke Sports & Entertainment’s Vice President of Communications from 2010 to 2020. Mr. Collins brings more than 30 years’ experience in the sports, entertainment, media and real estate investment industries. Mr. Collins has worked in the Kroenke organization since 2003 in various senior and advisory roles with sports teams (including the Los Angeles Rams, Arsenal Football Club and Denver Nuggets), sports and entertainment venues (including Ball Arena, SoFi Stadium and Emirates Stadium) and with print, broadcast and digital ventures (including Altitude Sports & Entertainment). Mr. Collins has served on the board of Republic Services Group, Inc. (NYSE: RSG) since 2013, where he also serves on the audit committee and the sustainability and corporate responsibility committee, as well as the board of Four Seasons Hotels and Resorts since 2021, and previously served as a member of the boards of Williams Rowland Acquisition Corp. (NYSE: WRAC) from 2021 to 2023, Arctos NorthStar Acquisition Corp. (NYSE: ANAC) from 2021 to 2023, and AutoNation, Inc. from 2014 to 2019. He also serves as a board member for the Global Down Syndrome Foundation since 2013 and is a member of the Yale School of Public Health Leadership Council since 2021. Mr. Collins holds a Bachelor of Arts from Yale University. We believe Mr. Collins is qualified to serve on our Board because of his experience in the sports, media and entertainment industries, as well as his experience serving on other public company boards. SHAWN HENRY – AGE 62
Director since June 14, 2023
Director since June 14, 2023 Committee Memberships: Audit Other Public Company Directorships: ShoulderUp Technology Acquisition Corp. (NYSE: SUAC) Shawn Henry serves as a member of our Board. Mr. Henry was an early employee of, and has served as Chief Security Officer of CrowdStrike Holdings, Inc. (NASDAQ: CRWD), an American cybersecurity technology company, since 2012, and also previously served as President of CrowdStrike Services from 2012 to 2022. Mr. Henry served for 24 years as an FBI special agent, rising through the executive ranks. Prior to joining CrowdStrike, he oversaw half of the FBI’s investigative operations as Executive Assistant Director, including all FBI criminal and cyber investigations worldwide, international operations, and the FBI’s critical incident response to major investigations and disasters, from 2010 to 2012. Mr. Henry also managed computer crime investigations spanning the globe, established the National Cyber Investigative Joint Task Force, and received the Presidential Rank Award for Meritorious Executive for his leadership in enhancing the FBI’s cyber capabilities. Mr. Henry has served as a director of ShoulderUp Technology Acquisition Corp. (NYSE: SUAC) since 2019, and now serves as Chairman of the Board. He holds a B.B.A. from Hofstra University, an M.S. in Criminal Justice Administration from Virginia Commonwealth University, and is a graduate of the Homeland Security Executive Leadership Program of the Naval Postgraduate School. We believe Mr. Henry is qualified to serve on our Board because of his extensive experience in security and technology, as well as his proven leadership and strategic management skills. KATHRYN A. HOLLISTER – AGE 64
Director since June 29, 2021
Director since June 29, 2021 Committee Memberships: Audit, Compensation Other Public Company Directorships: Endava PLC (NYSE: DAVA) Kathryn A. Hollister serves as a member of our Board. Ms. Hollister served as the Chief Strategy Officer of Deloitte’s global tax and legal practice of 45,000 professionals from 2015 until 2019. Ms. Hollister worked at Deloitte from 1984 until 2020 in a variety of leadership roles, including Partner and Managing Partner of the U.S. business tax service line, and served both public and private clients. Ms. Hollister has served as director of Endava PLC (NYSE: DAVA), a global provider of technology services, since 2022, serving as Chair for the Remunerations Committee since October 2023, and previously served as a director of First Solar, Inc. (NASDAQ: FSLR) from 2021 to 2022. She previously served as a member of the US board of directors of Deloitte LLP from 2008 to 2015, and a member of the global board of directors of Deloitte Touche Tohmatsu from 2010 to 2015. In the community, Ms. Hollister has served multiple academic and charitable organizations, including her current service on the Board of Trustees of Duke University, and the Boards of Directors of UC Health Foundation and UC Health LLC. A licensed/inactive lawyer, and a certified public accountant (non-practicing), in Ohio, Ms. Hollister holds a Bachelor of Arts degree from Duke University and a Juris Doctor from the University of Cincinnati College of Law. We believe Ms. Hollister is qualified to serve as a member of our Board because of her experience in executive leadership, overseeing risk management, executive compensation and succession, financial governance and regulatory issues. ADAM J. WIENER – AGE 45
Relationship Between Pay and Performance
Relationship Between Pay and Performance We strive to design our executive compensation program to balance the goals of attracting, motivating, rewarding, and retaining our executive officers, including our NEOs, with the goal of promoting the interests of our stockholders. To ensure this balance and to motivate and reward individual initiative and effort, we seek to ensure that our program is designed so that a meaningful portion of our executive officers’ annual compensation is both “at-risk” and variable in nature. In fiscal year 2023, the majority of the target total direct compensation available to our NEOs consisted of variable pay in the form of a target annual cash bonus opportunity and long-term incentive compensation in the form of restricted stock unit (“RSU”) and/or performance stock unit (“PSU”) awards that may be settled for shares of our Class A Common Stock. These variable pay elements ensured that a substantial portion of our NEOs’ compensation opportunities for fiscal year 2023 was contingent (rather than fixed) in nature, with the amounts ultimately payable subject to variability above or below target levels commensurate with our actual performance. In fiscal year 2023, with the assistance of the independent compensation consultant, our Compensation Committee approved the transition, starting in fiscal year 2024, from front-loaded equity awards (i.e., equity grants covering multiple years of target equity award value) granted periodically to smaller equity awards granted annually (i.e., covering one year of target equity award value) for eligible members of senior management. The Compensation Committee believes that this shift will provide compensation that is retentive and drives performance, while enhancing the Compensation Committee’s ability to annually review and adjust executive compensation based on company and individual performance, and better reflects public company practice. We began making annual grants to some of our NEOs in February 2024, as described under “Compensation Elements” below, and expect to have all eligible members of senior management transitioned onto this program in the coming years. As we continue to mature as a public company, we believe that the compensation elements provided to all of our executive officers, including our NEOs, will continue to emphasize “at-risk” and variable pay that should enable us to provide a balanced set of incentives for our executive officers to meet our business objectives and drive long-term growth.
Executive Compensation-Related Policies and Practices
| • | Maintain an Independent Compensation Committee with Independent Compensation Consultant. The Compensation Committee consists solely of independent directors who establish our compensation practices. Our Compensation Committee utilizes the services of an independent compensation consultant to assist in determining whether the elements of our executive compensation program are reasonable and consistent with our objectives. |
Executive Compensation-Related Policies and Practices
| • | Multi-Year Vesting Requirements. The equity awards granted to our NEOs vest over multi-year periods, consistent with current market practice and our retention objectives. |
Executive Compensation-Related Policies and Practices
| • | “Double-Trigger” Change in Control Arrangements. Standard grants of unvested RSUs and PSUs held by our NEOs provide for “double-trigger” vesting. That is, in the event of a change in control, if the grantee is involuntarily terminated without cause or resigns for good reason (as defined in the award agreement), within three months before or 12 months after the change in control, then the equity awards will become fully vested. Also see the description of the terms of the Founder PSUs below, which have different provisions because of their stock price-based structure. |
Executive Compensation-Related Policies and Practices
| • | No Excise Tax Reimbursement Payments on Change in Control Compensation Arrangements. We do not have agreements to provide our NEOs any “golden parachute” excise tax reimbursement payments (or “gross-ups”) on payments or benefits contingent upon a change in control of the Company. |
Executive Compensation Philosophy and Objectives
| • | Align higher individual performance with greater plan payouts relative to others based on their respective achievements |
Executive Compensation Philosophy and Objectives
| • | Provide long-term incentive awards to foster an ownership mentality and align employees with long-term value creation |
Executive Compensation Philosophy and Objectives
| • | Create an appropriate balance between achieving short-term results and creating long-term sustainable value to stockholders that reinforces and strengthens the linkage between pay and performance |
Executive Compensation Philosophy and Objectives
| • | Provide competitive compensation packages with an appropriate mix of fixed and at-risk compensation to attract and retain top talent who thrive in a results-driven environment |
Executive Compensation Philosophy and Objectives
Through fiscal year 2023, the Compensation Committee, with the assistance of its independent compensation consultant, structured the compensation of our executive officers, including our NEOs, using three principal elements: base salary, annual cash incentives, and long-term incentive compensation opportunities in the form of equity awards.
Compensation Setting Process
| • | the review, analysis, and updating of our compensation peer group; |
Compensation Setting Process
| • | the review and analysis of the base salary levels, target bonus opportunities, and long-term incentive compensation opportunities of our executive officers, including our NEOs, against competitive market data based on the companies in our compensation peer group and selected broad-based compensation surveys; |
Compensation Setting Process
| • | assisting with reviewing and developing incentive programs; |
Compensation Setting Process
During the 2023 fiscal year, the independent compensation consultant provided no services to the Company other than those provided to the Compensation Committee. The Compensation Committee charter requires the Compensation Committee to consider the NYSE independence factors before receiving advice from an advisor, despite the fact that such independence rules are not applicable to controlled companies. For the fiscal year 2023, the Compensation Committee concluded that ClearBridge Compensation Group LLC satisfies the independence requirements of the NYSE rules. In addition, the Compensation Committee believes that the independent compensation consultant’s work did not raise any conflicts of interest during the fiscal year 2023. In reaching this conclusion, the Compensation Committee considered the same rules regarding advisor independence. Competitive Positioning At the request of our Compensation Committee, in November 2022, the independent compensation consultant, with the assistance of management, developed a compensation peer group consisting of a blend of consumer-facing, technology-based and subscription-based companies that were of relevant revenue, market capitalization, and industry focus. Based on this compensation peer group, the independent compensation consultant conducted competitive market analyses. This information and analysis were made available to the Compensation Committee as it was making compensation decisions for our fiscal year 2023. In evaluating and selecting the companies comprising the compensation peer group, we considered the following primary criteria:
Compensation Setting Process
Our Compensation Committee believes that peer group comparisons are useful guides to measure the competitiveness of our executive compensation program and related policies and practices. The Compensation Committee reviews our compensation peer group at least annually and makes adjustments to its composition if warranted, taking into account changes in both our business and the businesses of the companies in the peer group. Based on this review in advance of fiscal year 2024, the Compensation Committee removed Coupa Software Incorporated and KnowBe4, Inc. due to their acquisition, and added Five9, Inc. and Commvault Systems, Inc. due to their relevance from a business and size perspective.
Compensation Elements
Compensation Elements The principal elements of our fiscal year 2023 executive compensation program are described in detail below. Base Salary Base salary represents the fixed portion of the compensation of our executive officers and is an important element of compensation intended to attract and retain highly talented individuals and motivate top-tier performance through individual contributions. Generally, we use base salary to provide each executive officer, including each NEO, with a specified level of cash compensation during the year with the expectation that they will perform their responsibilities to the best of their ability and in our best interests. The amounts generally are based on level of responsibility and experience, market data, as well as desired pay mix. The Compensation Committee conducts an annual review of peer group and other data to ensure the NEOs’ target total compensation opportunities are aligned with the Company’s compensation philosophy. Based on this review, the base salaries for each of our NEOs as of the end of the fiscal year 2023, Ms. Seidman Becker, and Messrs. Cornick, Levine, Patterson, Jr., and Moshkani, were as follows: $550,000, $500,000, $450,000, $600,000, and $550,000, respectively. These amounts reflect adjustments made to the base salaries for each of our Chairman and Chief Executive Officer and President and Chief Financial Officer at the beginning of the 2023 fiscal year to maintain competitive market positioning. Annual Cash Incentives Annual incentives are designed to link executive compensation directly to Company and individual performance by providing incentives and rewards based upon business performance and an individual’s contributions during the applicable fiscal year. Annual cash incentives earned for performance in the 2023 fiscal year were determined by performance against goals established by the Compensation Committee under the Annual Incentive Plan (“AIP”). Under the 2023 AIP, eligible members of management were provided an opportunity to earn an annual cash award. Pursuant to the 2023 AIP, the cash bonuses of our NEOs were to be weighted 70% on financial performance and 30% on individual performance for the 2023 fiscal year. The financial performance measures were Total Bookings and Operating Cash Flow. Total Bookings represent our total revenue plus the change in deferred revenue during the period. We define Total Bookings in any particular period to reflect sales to new and renewing CLEAR Plus subscribers plus any accrued billings to partners. The Compensation Committee and management believe that Total Bookings is an important measure of the current health and growth of the business and views it as a leading indicator. For purposes of our 2023 AIP, Operating Cash Flow is our net cash provided by (used in) operating activities, less stock based compensation expense. The Compensation Committee and management believe that given the upfront subscription nature of our business, Operating Cash Flow (as defined for this purpose) is a meaningful indicator of the margin structure of the business. Target Award Opportunities Each employee eligible for an annual incentive award was assigned a target award equal to a percentage of that employee’s base salary. The Compensation Committee reviews the target annual incentive award levels of the NEOs at least annually. Target annual incentive opportunities for 2023 were based upon the applicable employee’s position, responsibilities, and historical and expected future contributions to the Company, as well as peer group and other data. In connection with the Compensation Committee’s standard annual review of the market competitiveness of the NEOs’ target total compensation opportunities to ensure alignment with the Company’s compensation philosophy, the Compensation Committee approved increasing the target annual incentive opportunity of each of Ms. Seidman Becker and Mr. Cornick to 100% and 90% of salary, respectively, for fiscal year 2023. In addition, in connection with Mr. Moshkani’s expanded role as EVP, CLEAR Verified, effective August 2023, the Compensation Committee approved an increase of his target annual incentive opportunity to 80% of his salary for fiscal year 2023. Annual Incentive Payouts The table below summarizes the target annual incentive opportunity for eligible NEOs and actual fiscal year 2023 annual incentive payouts under the AIP, as determined by the Compensation Committee.
Compensation Elements
| Name(1) | 2023 Fiscal Year Base Salary | Target Incentive (% of Base Salary) | Actual 2023 Fiscal Year AIP as a % of Target | Actual 2023 Fiscal Year Annual Incentive Award | | Caryn Seidman Becker | $550,000 | 100% | 118% | $646,745 | | Kenneth Cornick | $500,000 | 90% | 118% | $529,155 | | Kasra Moshkani(2) | $550,000 | 55% | 99% | $300,000 | | Richard N. Patterson, Jr. | $600,000 | 17% | 78% | $80,000 |
Compensation Elements
| (1) Although Mr. Levine left the Company prior to the date of AIP payout and therefore is not included in the table, in recognition of his service for the 2023 fiscal year, the Compensation Committee approved a bonus payment to him of $75,000. Mr. Feldman did not participate in the AIP, and therefore is excluded from the table; Mr. Feldman’s offer letter provided for specific monthly bonuses for the initial period of his employment in lieu of participation in the AIP. See “Executive Compensation—Narrative Disclosure to Summary Compensation Table.” |
Compensation Elements
| (2) Mr. Moshkani’s 2023 AIP actual amounts reflect a prorated target of 80% for approximately four months, and 40% for approximately eight months prior to taking on the expanded role of EVP, CLEAR Verified. |
Compensation Elements
Performance Targets & Achievement Levels Financial Component: For the fiscal year ended December 31, 2023, the AIP financial performance objectives consisted of rigorous Total Bookings and Operating Cash Flow targets, each weighted at 50% of the overall financial component, with potential payouts under this component ranging from 0-150% of target (with 50% payout at threshold performance level and no payout below threshold performance level). The Compensation Committee believed these metrics were appropriate because, in their view, they were the best indicators of our successful execution of our annual operating strategy and they provided a strong emphasis on growth while managing expenses, which would most directly influence the creation of sustainable long-term stockholder value. The Compensation Committee, with guidance from the independent compensation consultant, approved threshold, target, and maximum achievement levels for each of the financial performance metrics. To the extent that performance for Operating Cash Flow was below the threshold performance level, there would be no annual incentive payout (regardless of Total Bookings or individual performance). In addition, for the 2023 AIP the potential payment for both financial metrics was capped at the maximum performance level. Achievement levels between threshold and maximum would result in varying payment percentages.
Compensation Elements
| Financial Metrics (Weighting) | 2023 Fiscal Year Payout Results | | Total Bookings (50%) | 103.2% of target | | Operating Cash Flow (50%) | 104.1% of target |
Compensation Elements
Based on the performance against these pre-determined financial performance objectives, the calculated result of the financial component of the AIP, giving effect to the payment provisions of the 2023 AIP, was 103.7%. The Compensation Committee determines the actual payout made to each NEO, based on a combination of the financial payout result and individual performance described below. Individual Component: In addition to the financial component, 30% of the target annual cash incentive opportunities for our NEOs in 2023 were based on an assessment of their overall individual performance for the 2023 fiscal year as measured against his or her individual performance goals. Once the 2023 AIP is funded pursuant to the Company’s financial performance, the individual component allows for further differentiation to recognize an individual’s performance, with potential payouts for any NEO’s individual component for 2023 ranging from 0-200% of target. In addition, the overall annual incentive payout may be adjusted down based on an NEO’s individual performance. Individual performance goals are not intended to be formulaic, but rather to serve as the framework upon which the executive officer’s overall performance may be evaluated. Such performance goals are established with reference to each individual executive officer’s position or function within CLEAR, and may also include goals related to the demonstration of leadership and effective decision-making, effective communication, promotion of our strategic and organizational initiatives and values, commitment to excellence and work ethic, successful completion of major projects and organization capability building. Long-Term Incentive Compensation We view long-term incentive compensation in the form of equity awards as a critical element of our executive compensation program. Equity awards generally have been granted to newly hired and promoted eligible employees, including our NEOs. Specifically, new hire awards have historically been made shortly after an eligible employee’s start date and generally vest 25% after 1.5 years, with the remaining 75% vesting after three years, and subsequent awards for continuing executive officers generally vest in equal annual installments over three years. Special long-term incentive awards also may be (and are) granted off-cycle to recognize substantial achievements, to strengthen retention or in connection with promotions, among other things. See below for a discussion of our transition to an annual grant program. The realized value of equity awards bears a direct relationship to our stock price, whether the vesting is time-based or performance-based, and, therefore, our Compensation Committee believes these awards are an incentive for our executive officers to create value for our stockholders over a multi-year period. Equity awards also help us retain our executive officers in a highly competitive market. Our long-term incentive equity awards consist of RSUs and PSUs. We believe that RSUs are an appropriate form of long-term incentive because they combine a tie to our stock price with incentives for key personnel even during times of adverse market conditions. In order to ensure sufficient incentives tied to performance, certain PSUs that have been granted to our NEOs, and those granted as part of our go-forward annual equity award program, are contingent on meeting corporate financial performance goals. The PSUs granted to our co-founders, Ms. Caryn Seidman Becker and Mr. Kenneth Cornick (the “Co-Founders”), at the time of our IPO (the “Founder PSUs”) are contingent on our meeting stock price performance targets, as described further in “Executive Compensation—Outstanding Equity Awards at Fiscal Year End.” To date, the Compensation Committee has not applied a rigid formula in determining the size of equity awards. The Compensation Committee determines the amount of the equity award for each executive officer, including each NEO, after taking into consideration their role and responsibilities, an analysis of market compensation data (including at the companies in our compensation peer group), the current economic value of their unvested equity and the ability of these unvested holdings to satisfy our retention objectives, our contemplated equity budget and potential award ranges for our employees, including our executive officers, the projected impact of the proposed awards on our earnings, the proportion of our total shares outstanding used for annual employee long-term incentive compensation awards (our “burn rate”), the potential voting power dilution to our stockholders (our “overhang”), the recommendations of our Chief Executive Officer (except with respect to her own equity award), and other relevant factors. 2023 Fiscal Year Grants In September 2023, Mr. Moshkani received a one-time promotion grant of RSUs made in connection with his expanded role as EVP, CLEAR Verified, with a target value of $1,000,000, that will vest ratably in three equal tranches on the first three anniversaries of grant. Mr. Feldman joined the Company in May 2023 and received a new hire award (consisting of RSUs and PSUs) with a total target value of $5,750,000, of which $3,250,000 of the target value was granted in RSUs and $2,500,000 of the target value was granted in PSUs. In connection with Mr. Feldman’s departure in September 2023, all of these awards were forfeited. 2023 Fiscal Year Performance Achievement In July 2021 Mr. Moshkani received a new hire award that included 24,193 PSUs, which are eligible to vest on June 21, 2024 based on the achievement of revenue performance goals, including contribution margin, for the 2023 fiscal year. In February 2024 the Compensation Committee certified the achievement of these goals and, as such, it is expected that the 24,193 PSUs will vest in June 2024, subject to Mr. Moshkani’s continued employment. New Annual Grant Program – 2024 Fiscal Year Grants In preparation for making 2024 equity compensation decisions, our Compensation Committee reviewed our NEOs’ outstanding equity awards, including the retention value of unvested awards, market data, including equity award practices of our peer companies, as well as other factors. As noted above, after careful review and consideration, the Compensation Committee, with the assistance of the independent compensation consultant, determined to shift away from equity awards granted periodically (generally granted every three years), and begin granting equity awards to eligible members of senior management annually (at reduced target values reflective of annual grants). The Compensation Committee believes that this shift will provide compensation that is retentive and drives performance, while enhancing the Compensation Committee’s ability to annually review and adjust executive compensation based on company and individual performance, and better reflects public company practice. The Compensation Committee began making annual grants to certain NEOs in February 2024, and will continue to transition the remainder of eligible members of senior management over the coming years. As such, in February 2024, our Compensation Committee approved an annual grant for Mr. Moshkani with a target value of $2,000,000, consisting of 50% time-based RSUs and 50% PSUs. The time-based RSUs will vest ratably in equal installments on each of the first three anniversaries of grant, and the PSUs will cliff vest upon the achievement of pre-approved financial metrics (which may result in payouts between 0% and 150% of target) over a three-year performance period.
Compensation Elements
Also in 2024, the Compensation Committee elected to start providing annual equity incentives to our Co-Founders. This decision followed a lengthy review by the Compensation Committee in consultation with the independent compensation consultant, including reviews of the market competitiveness of compensation pay levels for the Co-Founders and the annualized target value of the Founder PSUs. Based on that assessment, the Co-Founders’ annualized target compensation (inclusive of the annualized target value of the Founder PSUs) was below the market median of their respective peer group matches. The Compensation Committee determined that it was important and to the benefit of the Company to increase the market competitiveness of the Co-Founders’ total annual compensation opportunities, and to do so with equity compensation to both further align the Co-Founders’ opportunities with members of senior management who are shifting to annual equity incentives and further align their interests with our other stockholders. As a result, in February 2024, the Compensation Committee approved time-based RSU grants for Ms. Seidman Becker and Mr. Cornick with grant date values of $5,000,000 and $3,750,000, respectively. These time-based RSU awards will vest ratably in equal tranches on the first three anniversaries of the date of grant. In determining the type of long-term incentives to grant, the Compensation Committee, in consultation with their independent compensation consultant, reviewed the annualized target value of the Founder PSUs, the rigor of the Founder PSU goals (i.e., goals have not yet been met, and therefore continue to provide meaningful incentives with the possibility of meeting the goals through the first half of 2026), long-term incentive mix for other CLEAR executives who are shifting to an annual program (i.e., a combination of time-vested RSUs and PSUs), and peer long-term incentive practices. As a result of this assessment, the Compensation Committee determined that the Founder PSUs continue to provide significant performance incentives, and therefore the 2024 annual grants to the Co-Founders would be time-based RSUs to provide a mix of long-term incentive opportunities. See below under “Executive Compensation—Founder PSUs” for more information.
Summary Compensation Table
Summary Compensation Table The following table shows the compensation earned for the fiscal years ended December 31, 2023, 2022 and 2021, by our NEOs.
Summary Compensation Table
| Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($)(1) | Nonequity Incentive Plan Compensation ($)(2) | All Other Compensation(3) | Total ($) | | Caryn Seidman | 2023 | 550,000 | — | — | 646,745 | — | 1,196,745 | | Becker | 2022 | 424,999 | — | — | 246,279 | — | 671,278 | | Chairman and Chief Executive Officer | 2021 | 425,000 | — | 39,797,012 | 119,000 | — | 40,341,012 | | Kenneth Cornick | 2023 | 500,000 | — | — | 529,155 | 2,000 | 1,031,155 | | President and Chief Financial Officer | 2022 | 424,999 | — | — | 246,279 | 2,000 | 673,278 | | | 2021 | 425,000 | — | 29,821,502 | 119,000 | 2,000 | 30,367,502 | | Matthew Levine(4) | 2023 | 450,000 | — | — | 75,000 | 2,000 | 527,000 | | Former General Counsel, Chief Privacy Officer and Secretary | 2022 | 428,124 | — | 3,779,182 | 180,000 | — | 4,387,306 | | Kasra Moshkani(4) | 2023 | 550,000 | — | 1,000,000 | 300,000 | 2,000 | 1,852,000 | | Executive Vice President, CLEAR Verified | 2022 | 525,000 | — | 499,998 | 305,514 | 2,000 | 1,332,512 | | Richard N. | 2023 | 600,000 | — | — | 80,000 | 2,000 | 682,000 | | Patterson, Jr. | 2022 | 600,000 | — | — | 135,527 | 2,000 | 737,527 | | Chief Information Security Officer | 2021 | 600,000 | — | 1,450,000 | 95,000 | 2,000 | 2,147,000 | | Jonathan Feldman(5) | 2023 | 204,166 | 166,665(6) | 5,749,991 | — | 250,000(7) | 6,370,822 | | Former Executive Vice President, Powered by CLEAR | | | | | | | |
Summary Compensation Table
| (1) This column reflects the aggregate grant date fair value of Company RSUs and PSUs granted to the NEOs in the applicable year, without any reduction for risk of forfeiture, as calculated in accordance with FASB ASC Topic 718 on the date of grant. The assumptions used by the Company in calculating the grant date fair values are set forth in Note 15 to our financial statements included in our 2023 Form 10-K. See more information regarding grants during fiscal year 2023 as set forth in the “Grants of Plan-Based Awards” table below. The grant date value reported for PSUs granted in 2023 and 2022 assumes 100% achievement, which is the maximum. For the 2022 figures, a portion of the awards reflected for Mr. Levine represents awards granted in 2021 subject to performance-based vesting; because the performance metrics were not set until 2022, they are reflected in this table as 2022 compensation in accordance with the accounting treatment of the award. For the 2021 figures, this column includes the Founder PSUs. The grant date fair value of the Founder PSUs was determined using a Monte Carlo simulation approach, which utilizes multiple input variables to |
Summary Compensation Table
| estimate the probability of meeting the performance objectives established for the award. In addition, for Mr. Patterson, the 2021 figure represents $1,450,000 for an award granted in December 2020 subject to performance-based vesting; because the performance metrics were not set until early 2021, they are reflected in this table as 2021 compensation in accordance with the accounting treatment of the award. |
Summary Compensation Table
| (2) Reflects payments under our AIP for the applicable year, determined based on achievement against predetermined financial metrics of the Company and individual performance, as described in the Compensation Discussion & Analysis. |
Summary Compensation Table
| (3) Except as otherwise described, this column reflects 401(k) matching contributions paid by the Company. Excludes perquisites that in the aggregate are less than $10,000. |
Summary Compensation Table
| (4) Mr. Levine and Mr. Moshkani were not named executive officers for 2021 and so compensation for 2021 is not included. |
Summary Compensation Table
| (5) Amounts in this table reflect the portion of the fiscal year in which Mr. Feldman was employed. |
Summary Compensation Table
| (6) Reflects monthly bonus payments pursuant to Mr. Feldman’s offer letter described below. |
Summary Compensation Table
| (7) Amount reflects severance payments required pursuant to Mr. Feldman’s offer letter described below. See “Potential Payments upon Termination of Employment or Change in Control” for more information. |
Grants of Plan-Based Awards
Grants of Plan-Based Awards The table below presents information regarding Company equity awards granted under the Company’s 2021 Omnibus Incentive Plan and annual cash incentive opportunities under our AIP for the fiscal year ended December 31, 2023 to each NEO.
Grants of Plan-Based Awards
| Name | Year | Grant Date(1) | Estimated Future Payouts Under Non-Equity Incentive Plan Awards | | | Estimated Future Payouts Under Equity Incentive Plan Awards | | | All Other Stock Awards: Number of Shares of Stock or Units (#) | Grant Date Fair Value of Stock and Option Awards(2) | | | | | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | | Caryn Seidman Becker | 2023 | (3) | $275,000 | $550,000 | $907,500 | | | | | | | Kenneth Cornick | 2023 | (3) | $225,000 | $450,000 | $742,500 | | | | | | | Matthew Levine | 2023 | (3) | $90,000 | $180,000 | $297,000 | | | | | | | Kasra Moshkani | 2023 | (3) | $150,082 | $300,164 | $495,271 | | | | | | | | 2023 | 10/1/23(4) | | | | | | | 52,521 | 1,000,000 | | Richard N. Patterson, Jr. | 2023 | (3) | $51,000 | $102,000 | $168,300 | | | | | | | Jonathan Feldman | 2023 | 5/1/2023(5) | | | | | | | 133,910 | 3,249,996 | | | 2023 | 6/1/2023(6) | | | | 15,300 | 30,600 | 30,600 | | 750,006 | | | 2023 | 6/1/2023(6) | | | | 35,700 | 71,399 | 71,399 | | 1,749,989 |
Grants of Plan-Based Awards
| (1) The grant date is presented in accordance with Topic 718 where applicable. |
Grants of Plan-Based Awards
| (2) This column reflects the aggregate grant date fair value of the RSU awards granted to each NEO in the 2023 fiscal year without any reduction for risk of forfeiture as calculated in accordance with Topic 718 as of the date of grant. |
Grants of Plan-Based Awards
| (3) This row reflects the possible payouts under the Company’s AIP for performance in fiscal year 2023. Each of the eligible NEOs is assigned a target bonus which is a percentage of the NEO’s base salary for such fiscal year. The amounts actually paid by the Company in February 2024 for performance in fiscal year 2023 are disclosed in the Non-Equity Incentive Plan Compensation column of the Summary Compensation Table above. For more information regarding our AIP, please see “Compensation Discussion & Analysis—Compensation Elements—Annual Cash Incentives.” As described above, Mr. Feldman was not eligible for the AIP for 2023. |
Grants of Plan-Based Awards
| (4) This row reflects the number of RSUs awarded in fiscal year 2023. This grant of RSUs to Mr. Moshkani will vest in three equal installments on October 1, 2024, 2025 and 2026, subject to continued employment requirements. |
Grants of Plan-Based Awards
| (5) This row reflects the number of RSUs awarded in fiscal year 2023. 25% of this grant of RSUs to Mr. Feldman would vest on November 1, 2024 and 75% would vest on May 1, 2026, subject to continued employment requirements. All these equity awards were forfeited upon his departure from the Company. |
Grants of Plan-Based Awards
| (6) This row reflects the threshold, target and maximum number of PSUs awarded in fiscal year 2023. With respect to Mr. Feldman, up to 30,600 PSUs would vest upon the later of October 31, 2024 or the certification of the achievement against pre-determined performance goals measured as of October 31, 2024, subject to continued employment requirements, and up to 71,399 PSUs would vest upon the later of April 30, 2026 or the certification of the achievement against pre-determined performance goals measured as of December 31, 2025, subject to continued employment requirements. All these equity awards were forfeited upon his departure from the Company. |
Outstanding Equity Awards at Fiscal Year End
Outstanding Equity Awards at Fiscal Year End The following tables provide information about the outstanding equity awards held by our NEOs as of December 31, 2023.
Outstanding Equity Awards at Fiscal Year End
| Name | Grant Type | Number of Shares or Units That Have Not Vested | Market Value of Shares or Units That Have Not Vested(1) | Equity Incentive Plan Awards: Number of Unearned Shares or Units That Have Not Vested | Equity Incentive Plan Awards: Market Value of Unearned Shares or Units That Have Not Vested ($)(1) | | Caryn Seidman Becker | PSUs(2) | — | — | 2,405,831 | 49,680,41 | | Kenneth Cornick | PSUs(2) | — | — | 1,802,786 | 37,227,531 | | Matthew Levine | RSUs(3) | 85,623 | 1,768,115 | — | — | | Kasra Moshkani | RSUs(4) | 165,425 | 3,416,026 | — | — | | | PSUs(5) | 24,193 | 499,585 | 19,157 | 395,592 | | Richard N. Patterson, Jr. | — | — | — | — | — | | Jonathan Feldman | — | — | — | — | — |
Outstanding Equity Awards at Fiscal Year End
| (1) Calculated using the closing price of Class A Common Stock on the NYSE on December 29, 2023 of $20.65 per share. |
Outstanding Equity Awards at Fiscal Year End
| (2) Represents the one-time grant of the Founder PSUs at the time of the IPO and is the maximum number of shares that could vest assuming full achievement of the stock price goals in the award. See below under “Founder PSUs” for more information regarding the vesting conditions. |
Outstanding Equity Awards at Fiscal Year End
| (3) With respect to Mr. Levine, this row reflects an award of 8,327 RSUs (from an original award of 24,980 RSUs) granted in January 2021, 3,331 RSUs (from an original award of 9,992 RSUs) granted in March 2021, and 73,965 RSUs (from an original award of 110,947 RSUs) granted in November 2022. Each RSU award vests ratably over a three-year period on the anniversary of the date of grant. Excludes PSUs granted to Mr. Levine in January and March 2021 with a performance period that ended on December 31, 2023, which were forfeited due to not meeting the performance conditions. |
Outstanding Equity Awards at Fiscal Year End
| (4) With respect to Mr. Moshkani, this row reflects a new hire award of 112,904 RSUs (from an original award of 145,162 RSUs) granted in July 2021, which vests on June 21, 2024, and a promotion grant of 52,521 RSUs granted in October 2023, which will vest ratably on October 1, 2024, 2025, and 2026. Mr. Moshkani’s new hire award included performance-based awards discussed in note 5 of this table. |
Outstanding Equity Awards at Fiscal Year End
| (5) With respect to Mr. Moshkani, this row reflects an award of 24,193 PSUs granted as part of the new hire award discussed in note 4 of this table, all of which PSUs will vest on June 21, 2024, subject to continued employment, due to the achievement of revenue performance goals for the 2023 fiscal year, and 19,157 PSUs granted in June 2022, which will be eligible for vesting on June 1, 2025, based on bookings performance as of December 31, 2024, subject to continued employment. |
Outstanding Equity Awards at Fiscal Year End
Founder PSUs. The Founder PSUs granted in connection with our IPO are eligible for vesting between the second and fifth anniversaries of the closing of our IPO, with vesting subject to sustained stock price performance between 1.5 and 3.0 times the IPO price of $31. The Founder PSUs were granted under the 2021 Omnibus Incentive Plan based on the following terms:
Outstanding Equity Awards at Fiscal Year End
| • | Achievement of a price hurdle depends on the average volume-weighted average price per share (or VWAP) for the trading days during any 180-day period ending within the applicable measurement period as follows (and each price hurdle may be met only once): |
Outstanding Equity Awards at Fiscal Year End
| Price Hurdle (Multiple of IPO Price) | Measurement Period (From IPO Closing) | Portion of PSUs Eligible to Vest | | 1.5x | Second anniversary to fifth anniversary | 1/3 | | 2.0x | Third anniversary to fifth anniversary | 1/3 | | 3.0x | Fourth anniversary to fifth anniversary | 1/3 |
Outstanding Equity Awards at Fiscal Year End
| • | As of the fifth anniversary of the closing of our IPO, if the 180-day VWAP stock price falls between two price hurdles, then additional Founder PSUs will vest on a pro-rated basis based on straight-line interpolation between the two price hurdles. Any remaining unearned Founder PSUs will be forfeited. |
Outstanding Equity Awards at Fiscal Year End
| • | Upon an involuntary termination without cause or resignation for good reason, or death or disability, or if a Co-Founder’s executive role ends but the Co-Founder remains on the Board, the Founder PSUs remain eligible for vesting based on the above performance criteria for up to two years following the Co-Founder’s cessation of service (but no later than the fifth anniversary of the closing of our IPO). Upon a change in control, if the transaction price falls between two price hurdles, then an applicable portion of the Founder PSUs will vest on a pro-rated basis based on straight-line interpolation between the two price hurdles. |
Outstanding Equity Awards at Fiscal Year End
No Hedging or Pledging of Company Stock. Directors, executive officers and employees, including their designees, are prohibited from purchasing any financial instruments (including prepaid variable forward contracts, equity swaps, collars and exchange funds) or otherwise engaging in transactions that are designed to or have the effect of hedging or offsetting any decrease in the market value of the Company’s equity securities that are (1) granted to the director, officer or employee by the Company as part of such director’s, officer’s or employee’s compensation; or (2) held, directly or indirectly, by the director, officer or employee. In addition, directors, officers and employees of the Company are prohibited from purchasing securities of the Company on margin and may not purchase securities of the Company on margin or pledge, or otherwise grant a security interest in, securities of the Company in margin accounts.
Stock Vested
Stock Vested The table below shows RSUs that vested during fiscal year 2023.
Stock Vested
| Name | RSUs | | | | Number of Shares Acquired on Vesting | Value Realized on Vesting(1) | | Caryn Seidman Becker | — | — | | Kenneth Cornick | — | — | | Matthew Levine | 48,640 | 942,011 | | Kasra Moshkani | — | — | | Richard N. Patterson, Jr. | 74,940 | 1,600,718 | | Jonathan Feldman | — | — |
Stock Vested
| (1) Calculated using the closing price of Class A Common Stock on the NYSE on the applicable vesting date. |
Potential Payments upon Termination of Employment or Change in Control
Potential Payments upon Termination of Employment or Change in Control The following discussion sets forth a quantification of estimated severance and other benefits payable to the NEOs under various circumstances regarding the termination of their employment and change in control situations (other than Mr. Feldman, who departed the Company in September 2023 and received a severance payment equal to six months of his salary, or $250,000, as required by his offer letter described above, as a result of his involuntary termination without cause). In calculating these amounts, we have taken into consideration or otherwise assumed the following:
Potential Payments upon Termination of Employment or Change in Control
| • | Termination of employment and/or change in control occurred after the close of business on December 31, 2023. |
Potential Payments upon Termination of Employment or Change in Control
| • | We have valued equity awards (including for purposes of the per share price paid in a change in control) using the closing market price of our Class A Common Stock of $20.65 on the NYSE on December 29, 2023, the last trading day of fiscal year 2023. |
Potential Payments upon Termination of Employment or Change in Control
| • | In the event of termination of employment, the payment of certain amounts may be delayed, depending upon the terms of each specific award agreement and the applicability of Code Section 409A. In quantifying aggregate termination payments, we have not taken into account the timing of the payments and we have not discounted the value of payments that would be made over time, except where otherwise disclosed. |
Potential Payments upon Termination of Employment or Change in Control
| • | We have assumed that all performance objectives for performance-based awards (excluding the Founder PSUs which are market-based awards tied to stock price) are achieved. |
Potential Payments upon Termination of Employment or Change in Control
In the event of a voluntary termination of employment, a retirement, disability or termination by the Company for “Cause,” no NEO would have been entitled to any payments, excluding any vested benefits. In the event of a termination of employment by the Company without “Cause” or a termination of employment by the NEO for “Good Reason,” Mr. Kasra Moshkani’s offer letter provides him with severance equal to three months of his annual base salary, which is a value at December 31, 2023 of approximately $137,500. In the event of a termination of employment due to death, Mr. Matthew Levine’s November 2022 award agreement provides for vesting of 73,965 RSUs (with an assumed value at December 31, 2023 of $1,527,377), and Mr. Kasra Moshkani’s October 2023 award agreement provides for vesting of 52,521 RSUs (with an assumed value at December 31, 2023 of $1,084,559). All of the unvested RSUs held by the NEOs (other than the Founder PSUs) provide for “double-trigger” vesting. That is, in the event of a change in control, if the grantee is involuntarily terminated without cause or resigns for good reason (as defined in the award agreement), within three months before or 12 months after the change in control, then the equity awards will become fully vested. Also see the description of the terms of the Founder PSUs above, whose value upon a change in control would depend on the stock price at such time. In the event of such an occurrence on December 31, 2023 (based on a stock price of $20.65 per share), Ms. Seidman Becker and Messrs. Cornick, Levine, Moshkani, and Patterson, Jr. would have been entitled to vesting of equity awards with a value of: $0, $0, $1,768,115, $2,811,618, and $0, respectively.
CEO Pay Ratio
CEO Pay Ratio We are providing the following information about the relationship of the median annual total compensation of our employees and the total compensation of Ms. Caryn Seidman Becker, our Chairman and Chief Executive Officer as of December 31, 2023, as required by the SEC’s pay ratio disclosure rules. To identify our median employee, we first determined our employee population as of December 31, 2023. We included 4,234 employees (excluding Ms. Seidman Becker) located in the U.S., representing all full-time, part-time, seasonal and temporary employees employed in the U.S. by the Company on that date. We excluded 18 Israel-based employees and 8 Argentina-based employees from our employee population, which represented all of our non-U.S. employees as of December 31, 2023, as they collectively constituted less than 5% of our total employees. To determine the median employee, we measured each employee’s annual compensation using W-2 payment information, which included base salary, overtime payments, short and long-term incentives, and sales incentives. Compensation for full-time employees who were employed for less than the full fiscal year (i.e., full-time employees who were hired during the course of the 2023 fiscal year) was not annualized. Once we identified the median employee, we determined that employee’s total compensation, including any perquisites and other benefits, in the same manner that we determined the total compensation of our NEOs for purposes of the Summary Compensation Table above. Using these guidelines, for the 2023 fiscal year, our Chairman and Chief Executive Officer had annual total compensation of $1,196,745 and the median employee, a full-time Ambassador, had annual total compensation of $31,082. The resulting ratio was 39:1. Because the SEC rules for identifying the median employee and calculating the pay ratio allow companies to use different methodologies, to apply certain exclusions and to make reasonable estimates and assumptions that reflect their compensation practices, the pay ratio provided above may not be comparable to the pay ratio reported by other companies, as other companies may have different employment and compensation practices and may use different methodologies, exclusions, estimates and assumptions in calculating their own pay ratio.
Pay Versus Performance
Pay Versus Performance As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and by SEC disclosure rules, we are providing the following information about the relationship between executive compensation and certain financial performance of the Company. The following table sets forth information with respect to the alignment between the Company’s executive compensation and its financial performance.
Pay Versus Performance
| Year | SCT Total for PEO (1) | Compensation Actually Paid to PEO (1)(2) | Average SCT Total for Other NEOs (1) | Average Compensation Actually Paid to Other NEOs (1)(2) | Value of Initial Fixed $100 Investment Based on: | | Net Income (Loss) | Operating Cash Flow (4) | | | | | | | Company TSR | Peer Group TSR (3) | | | | 2023 | $1,196,745 | ($11,353,672) | $2,092,595 | ($1,484,650) | $54 | $88 | $49,888,000 | $225,033,000 | | 2022 | $671,278 | ($8,029,810) | $1,609,024 | ($582,839) | $69 | $63 | ($115,436,000) | $168,310,000 | | 2021 | $40,341,012 | $59,745,791 | $24,580,335 | $30,194,630 | $78 | $97 | ($115,171,000) | $69,707,000 |
Pay Versus Performance
| (1) The PEO was Caryn Seidman Becker for all years in the table. The other NEOs were Kenneth Cornick (all years), Richard N. Patterson, Jr. (2022 and 2023), Matthew Levine (2022 and 2023), Kasra Moshkani (2022 and 2023), Sam Hall (2021 and 2022) and Jonathan Feldman (2023). Information prior to 2021 is not included because we were not a public reporting company until June 2021. |
Pay Versus Performance
| (2) The table below summarizes the adjustments required to be made to the amounts reported in the Summary Compensation Table for the applicable year in accordance with Item 402(v) of Regulation S-K in order to determine the amounts shown in the table above as being “Compensation Actually Paid.” The fair value of the equity awards on different measurement dates was updated for stock price and, for the Founder PSUs which value was determined by a Monte Carlo simulation, updated volatility and other inputs on the measurement date. |
Pay Versus Performance
| Adjustments | 2023 | | 2022 | | 2021 | | | | PEO | Other NEOs* | PEO | Other NEOs* | PEO | Other NEOs* | | Total Compensation from SCT | 1,196,745 | 2,092,595 | $671,278 | $1,609,024 | $40,341,012 | $24,580,335 | | Adjustments for stock and option awards | | | | | | | | (Subtraction): Deduction for Amounts Reported under the “Stock Awards” Columns in the Summary Compensation Table for applicable fiscal year | — | (3,125,000) | — | (855,836) | (39,797,012) | (24,078,494) | | Addition: Fair value at year end of awards granted during the covered fiscal year that are outstanding and unvested at year end | — | 216,912 | — | 800,512 | 39,030,594 | 21,960,130 |
Pay Versus Performance
| Adjustments | 2023 | | 2022 | | 2021 | | | | PEO | Other NEOs* | PEO | Other NEOs* | PEO | Other NEOs* | | Addition (Subtraction): Year-over-year change in fair value at year end of awards granted in any prior fiscal year that are outstanding and unvested at year end | (12,550,417) | (2,182,965) | (8,701,088) | (1,769,137) | — | — | | Addition: Vesting date fair value of awards granted and vesting during such year | — | — | — | — | — | — | | Addition (Subtraction): Change as of the vesting date (from the end of the prior fiscal year) in fair value of awards granted in any prior fiscal year for which vesting conditions were satisfied during such year | — | (169,336) | — | (367,403) | 20,171,198 | 7,732,659 | | (Subtraction): Fair value at end of prior year of awards granted in any prior fiscal year that fail to meet the applicable vesting conditions during such year | — | (191,856) | — | — | — | — | | Addition: Dividends or other earnings paid on stock or option awards in the covered year prior to vesting if not otherwise included in the total compensation for the covered year | — | — | — | — | — | — | | Compensation Actually Paid (as calculated) | ($11,353,672) | ($1,484,650) | ($8,029,810) | ($582,839) | $59,745,791 | $30,194,630 |
Pay Versus Performance
| * Amounts presented are averages for the entire group of other NEOs. |
Pay Versus Performance
| (3) The Peer Group TSR represents the published S&P Software & Services Select Industry Index used by the Company for the performance graph required by Regulation S-K Item 201(e) in the 2023 Form 10-K. |
Pay Versus Performance
| (4) Operating Cash Flow means the net cash provided by (used in) operating activities, as set forth in our financial statements. |
Pay Versus Performance
Performance Measures For the fiscal year 2023, the most important performance measures the Company used to link compensation actually paid to its NEOs and company performance were:
Pay Versus Performance
| Total Stockholder Return | Operating Cash Flow | Total Bookings |
Pay Versus Performance
Relationship Between Pay and Performance The following reflect the relationships between (i) the Company’s compensation actually paid (“CAP”) to our PEO and the average of CAP to our Other NEOs in fiscal years 2021, 2022, and 2023, (ii) our cumulative TSR and our peer group TSR during the period from June 30, 2021 through December 31, 2023, assuming an investment of $100 as of market close on June 30, 2021, and (iii) our net income and Operating Cash Flow for the fiscal years 2021, 2022 and 2023. Table above reflects TSR at each point in time, actual TSR between the periods fluctuates.
Board of Directors
Board of Directors A. Except as otherwise provided in this Certificate of Incorporation and the DGCL, the business and affairs of the Corporation shall be managed by or under the direction of the Board. Except as otherwise provided for or fixed pursuant to the provisions of Article IV.E relating to the rights of the holders of any series of Preferred Stock to elect additional directors, the total number of directors constituting the whole Board shall be determined from time to time exclusively by the Board; provided, that the number of directors shall not be less than three persons nor more than twenty persons. B. During any period when the holders of any series of Preferred Stock have the right to elect additional directors as provided for or fixed pursuant to the provisions of Article IV.E (“Preferred Stock Directors”), upon the commencement, and for the duration, of the period during which such right continues: (i) the then total authorized number of directors shall automatically be increased by such specified number of Preferred Stock Directors, and the holders of the related Preferred Stock shall be entitled to elect the Preferred Stock Directors pursuant to the provisions of the Board’s designation for the series of Preferred Stock, and (ii) each such Preferred Stock Director shall serve until such Preferred Stock Director’s successor shall have been duly elected and qualified, or until such Preferred Stock Director’s right to hold such office terminates pursuant to such provisions, whichever occurs earlier, subject to his or her earlier death, resignation, disqualification or removal. Except as otherwise provided by the Board in the resolution or resolutions establishing such series, whenever the holders of any series of Preferred Stock having such right to elect Preferred Stock Directors are divested of such right pursuant to the provisions of such stock, the terms of office of all such Preferred Stock Directors elected by the holders of such Preferred Stock, or elected to fill any vacancies resulting from the death, resignation, disqualification or removal of such Preferred Stock Directors, shall forthwith terminate and the total and authorized number of directors shall be reduced accordingly. C. Subject to the rights of the holders of any one or more series of Preferred Stock then outstanding, if required by applicable law, an annual meeting of the stockholders of the Corporation for the election of directors and such other matters as may be properly brought before the meeting shall be held at such date and time as may be fixed by the Board at such place, if any, within or without the State of Delaware as may be fixed by the Board and all as stated in the notice of the meeting. Directors shall be elected at such annual meeting of stockholders in the manner provided in the By-Laws, and each director elected shall hold office until the succeeding annual meeting after such director’s election and until such director’s successor is duly elected and qualified, or, if earlier, until such director’s death, resignation, disqualification or removal from office. D. Subject to the rights of the holders of any one or more series of Preferred Stock then outstanding, any newly created directorship on the Board that results from an increase in the total number of directors and any vacancy occurring on the Board (whether by death, resignation, disqualification, removal or other cause) shall be filled by the affirmative vote of a majority of the directors then in office (even if less than a quorum), by a sole remaining director or by the stockholders; provided, however, that following the occurrence of a Triggering Event, any newly created directorship on the Board that results from an increase in the number of directors and any vacancy occurring on the Board shall be filled only by a majority of the directors then in office (even if less than a quorum), or by a sole remaining director (and not by stockholders). Any director elected to fill a vacancy or newly created directorship shall hold office until the next election of the class for which such director shall have been chosen and until his or her successor shall be elected and qualified, or until his or her earlier death, resignation, disqualification or removal. E. Except for Preferred Stock Directors, any or all of the directors may be removed at any time either with or without cause by the affirmative vote of a majority in voting power of all outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class; provided, however, that following the occurrence of a Triggering Event, any such director or all such directors may be removed only by the affirmative vote of the holders of at least 66 2/3% of the voting power of the then outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class. ARTICLE VI.