DEF 14A of Soundthinking, Inc.
Filed Apr 29, 2024 · FY20230001193125-24-122179
ELECTION OF DIRECTORS
ELECTION OF DIRECTORS Under our amended and restated certificate of incorporation, the Board is divided into three classes, with only one class of directors being elected in each year and each class, Class I, Class II and Class III, serving a three-year term. Each director serves until the expiration of the term for which such director was elected or appointed, or until such director’s earlier death, resignation or removal. At each annual meeting of stockholders, the successors to directors whose terms then expire will be elected to serve from the time of election and qualification until the third annual meeting following election. Vacancies on the Board may be filled only by persons elected by a majority of the remaining directors. A director elected by the Board to fill a vacancy in a class, including vacancies created by an increase in the number of directors, shall serve for the remainder of the full term of that class and until the director’s successor is duly elected and qualified. Our directors are currently divided among the three classes as follows:
ELECTION OF DIRECTORS
| • | Class I, which consists of William J. Bratton and Deborah A. Grant, whose terms will expire at the Annual Meeting; |
ELECTION OF DIRECTORS
| • | Class II, which consists of Pascal Levensohn and Roberta Jacobson, whose terms will expire at the 2025 annual meeting of stockholders; and |
ELECTION OF DIRECTORS
| • | Class III, which consists of Ralph A. Clark, Marc Morial and Ruby Sharma, whose terms will expire at the 2026 annual meeting of stockholders. |
ELECTION OF DIRECTORS
Our Board currently consists of seven members, two of whom are in the class whose term of office expires at the upcoming Annual Meeting. We expect that any additional directorships resulting from any future increase in the number of directors will be distributed among the three classes so that, as nearly as possible, each class will consist of one third of the directors. The division of our Board into three classes with staggered three-year terms may delay or prevent a change of our management or a change in control. Upon the recommendation of the Nominating and Corporate Governance Committee, the Board has considered and nominated Mr. Bratton and Ms. Grant to serve as Class I directors. Each of the nominees is currently a director of the Company who was previously elected by the stockholders. Our management has no reason to believe that any nominee will be unable or, if elected, will decline to serve. If elected at the Annual Meeting, each of these nominees would serve until the 2027 annual meeting of stockholders and until her or his successor has been duly elected, or if sooner, until the director’s death, resignation or removal. In the event that any of these nominees should become unavailable for election due to any presently unforeseen reason, proxies will be voted for a substitute as designated by the Board, or alternatively, the Board may leave a vacancy on the Board or reduce the size of the Board.
Our Board of Directors
Our Board of Directors The following table sets forth, for the Class I nominees (Mr. Bratton and Ms. Grant) and our other directors who will continue in office after the Annual Meeting, their ages and position/office held with us as of the date of this Proxy Statement:
Our Board of Directors
| Name | Age | Position/Office Held With SoundThinking | | Class I directors, whose terms will expire at the Annual Meeting | | | | William J. Bratton(3) | 76 | Director | | Deborah A. Grant(2)(3) | 62 | Director | | Class II directors, whose terms will expire at the 2025 annual meeting of stockholders | | | | Pascal Levensohn(1) | 63 | Director, Chair of the Board | | Roberta Jacobson(2)(3) | 64 | Director | | Class III directors, whose terms will expire at the 2026 annual meeting of stockholders | | | | Ralph A. Clark | 65 | President and Chief Executive Officer | | Marc Morial(1)(2) | 66 | Director | | Ruby Sharma(1) | 57 | Director |
Our Board of Directors
| (1) Member of the Audit Committee. |
Our Board of Directors
| (2) Member of the Nominating and Corporate Governance Committee of the Board (the “Nominating and Corporate Governance Committee”). |
Our Board of Directors
| (3) Member of the Compensation and Human Capital Committee of the Board (the “Compensation and Human Capital Committee”). |
Our Board of Directors
The biographies of each of our nominees for election to the Board as Class I directors, and all other directors are set forth below, including the offices held, other business directorships and the class and term of each director nominee and director. Each of the biographies highlights specific experience, qualifications, attributes and skills that led us to conclude that such person should serve as a director. We believe that, as a whole, our Board possesses the requisite skills and characteristics, leadership traits, work ethic and independence to provide effective oversight. No director or executive officer is related by blood, marriage, or adoption to any other director or executive officer. No arrangements or understandings exist between any director and any other person pursuant to which such person was selected as a director or nominee.
Class I Director Nominees for Election at the Annual Meeting
Class I Director Nominees for Election at the Annual Meeting William J. Bratton has served as a member of our Board since November 2017 and previously served as a member of our Board from April 2013 until December 2013. Since September 2016, Mr. Bratton has served as Senior Managing Director of Teneo Holdings, a global CEO advisory firm, and as Executive Chairman of its Teneo Risk division. From January 2014 until September 2016, Mr. Bratton served a second term as Commissioner of the New York City Police Department (“NYPD”), by appointment. From November 2012 to December 2013, Mr. Bratton served as Chief Executive Officer of the Bratton Group LLC, a New York City-based public safety and law enforcement consulting firm, which has consulted extensively in the United States and Latin America on policing, public safety and rule-of-law initiatives. From September 2010 to November 2012, Mr. Bratton served as Chairman of Kroll Advisory Solutions (“Kroll”), a global security solutions and specialized law enforcement company, the successor to Altegrity Risk International where he served as Chairman from November 2009 to November 2012. From October 2002 to October 2009, Mr. Bratton served as Chief of the Los Angeles Police Department (“LAPD”). From 1996 until his appointment as LAPD Chief, Mr. Bratton worked in the private sector, including as Senior Consultant to Kroll’s Public Services Safety Group and Crisis and Consulting Management Group. From 1994 to 1996, Mr. Bratton served his first term as Commissioner of the NYPD by appointment. Mr. Bratton has also served as head of a number of other police agencies including commissioner of the Boston Police Department, Chief of Police of the New York City Transit Police Department, Superintendent of the Massachusetts Metropolitan District Commission of Police and Chief of Police for the Massachusetts Bay Transportation Authority. Mr. Bratton is the Vice Chairman of the Homeland Security Advisory Council and serves as a director of Mission Ready Solutions, Inc., a provider of government contracting solutions. He holds a bachelor’s degree in law enforcement from Boston State College/University of Massachusetts, and is a graduate of the FBI National Executive Institute and the Senior Executive Fellows Program at Harvard’s John F. Kennedy School of Government. Our Board believes that Mr. Bratton’s significant experience in law enforcement both in the United States and abroad and his insight in criminal justice system operations qualify him to serve on our Board. Deborah A. Grant is the President and CEO of Corporate Playbook Consulting, LLC, a company that provides leaders with strategic direction to elevate diversity, inclusion, philanthropy and culture in the workplace, which she founded in October 2016. From October 2013 to February 2017, Ms. Grant served as President of the GE Foundation and from September 2002 to February 2017, she served as Global Chief Diversity Officer at General Electric Company, where she worked for 30 years. Ms. Grant also created and hosts Dining with Deb, an innovative dining experience that brings together professional women across racial, religious and political lines to drive meaningful connections. Ms. Grant was appointed to and served on the Federal Communications Commission’s Advisory Committee on Diversity and Digital Empowerment. Ms. Grant also serves as an independent director at Daniel J. Edelman Holdings. Ms. Grant holds a B.A. in sociology from Louisiana State University and an M.P.A. from Southern University in Baton Rouge, Louisiana. Our Board believes that Ms. Grant’s experience in executive leadership and human capital matters qualify her to serve on our Board.
THE BOARD OF DIRECTORS RECOMMENDS
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH NAMED NOMINEE.
Class II Directors Continuing in Office Until the 2025 Annual Meeting of Stockholders
Class II Directors Continuing in Office Until the 2025 Annual Meeting of Stockholders Pascal Levensohn has served as a member of our Board since 2007 and currently serves as Chair of the Board. Mr. Levensohn is currently the Senior Managing Director of Dolby Family Ventures, a venture investing organization, and has served in this position since 2014. Since 1996, Mr. Levensohn has also served as the founder and Manager of Levensohn Venture Partners LLC, a venture capital firm, as the Chief Executive Officer of Levensohn Global LLC, a consulting firm, and as the Senior Strategic Advisor for Silicon Castles GmbH, an investment firm. He is currently the director of several private companies. From April 2007 until April 2011, Mr. Levensohn served on the board of directors of the National Venture Capital Association. He is a member of the Council on Foreign Relations. Mr. Levensohn holds an A.B. in Government from Harvard University. Our Board believes that Mr. Levensohn’s experience investing in technology businesses and his service on numerous boards of directors qualify him to serve on our Board. Ambassador Roberta Jacobson is a senior advisor at DGA/Albright Stonebridge Group, a global business strategy firm based in Washington, D.C. and served a 100-day term as the National Security Council’s coordinator for the southern border of the United States from January 2021 to April 2021. From November 2020 to January 2021, Ambassador Jacobson served as a volunteer Agency Review Team member for the Biden Administration presidential transition team to directly support transition efforts related to the U.S. Department of State. From May 2016 to May 2018, Ambassador Jacobson served as U.S. ambassador to Mexico. From July 2011 to May 2016, Ambassador Jacobson served as the State Department’s acting assistant secretary and then assistant secretary for Western Hemisphere affairs. Ambassador Jacobson holds a B.A. from Brown University and a Master of Arts degree in Law and Diplomacy from Tufts University Fletcher School of Law and Diplomacy. Our Board believes that Ambassador Jacobson’s experience in international business and diplomatic affairs qualifies her to serve on our Board.
Class III Directors Continuing in Office Until the 2026 Annual Meeting of Stockholders
Class III Directors Continuing in Office Until the 2026 Annual Meeting of Stockholders Ralph A. Clark has served as our President and Chief Executive Officer and as a member of our Board since August 2010. From September 2005 until July 2010, Mr. Clark served as Chief Executive Officer of GuardianEdge Technologies, Inc., an endpoint data security firm. Prior to that, Mr. Clark served as Vice President, Finance of Adaptec, Inc. following Adaptec’s acquisition of Snap Appliances, Inc., where he had been Chief Financial Officer. Mr. Clark is a member of the board of directors of Trinet Group, Inc., a provider of comprehensive human resources for small and medium-size businesses. Mr. Clark is also a member of the board of directors of Glowforge, a private company manufacturer of 3D laser printers. Mr. Clark also has held various positions at start-up companies, served in executive sales and marketing roles at IBM and worked as an investment banker at Goldman Sachs and Merrill Lynch. Mr. Clark holds a B.S. in economics from the University of the Pacific and an M.B.A. from Harvard Business School. Our Board believes that Mr. Clark’s significant business experience from both inside and outside our industry and his role as our Chief Executive Officer qualify him to serve on our Board. Marc Morial has served as a member of our Board since September 2015. Since 2003, Mr. Morial also has served as the President and Chief Executive Officer of the National Urban League, a civil rights organization dedicated to economic empowerment in order to elevate the standard of living in historically underserved urban communities. From 1994 to 2002, Mr. Morial served as the Mayor of New Orleans, Louisiana. Prior to serving as Mayor of New Orleans, Mr. Morial held other various positions in public office and nonprofit management. Mr. Morial has a B.A. in economics from the University of Pennsylvania and a J.D. from Georgetown University. Our Board believes that Mr. Morial’s experience in serving underserved urban communities, local governments and community organizations qualifies him to serve on our Board. Ruby Sharma has served as a member of our Board since December 2021. From September 2018 to December 2022, she has served as Managing Partner of RNB Strategic Advisors, a strategic advisory firm. From 2004 to 2017, Ms. Sharma served as Senior Partner and from 2002 to 2004 as Senior Manager at Ernst & Young LLP. From 1999 to 2002, Ms. Sharma served as Senior Manager at Arthur Andersen LLP. From 1996 to 1998, Ms. Sharma served as Senior Manager at Grant Thornton GmbH. Ms. Sharma holds a B.A. in Economics from Delhi University. Ms. Sharma is a Fellow Chartered Accountant of the Institute of Chartered Accountants in England and Wales and completed an Executive Program at Northwestern University Kellogg School of Management. Our Board believes that Ms. Sharma’s significant experience in accounting and auditing matters qualifies her to serve on our Board.
INFORMATION REGARDING THE BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
INFORMATION REGARDING THE BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
Compensation and Human Capital Committee
| • | reviewing and recommending to our Board the compensation of our directors; |
EXECUTIVE AND DIRECTOR COMPENSATION
EXECUTIVE AND DIRECTOR COMPENSATION
Say-on-Pay Results and Stockholder Engagement
| What We Heard | How We Responded | | Desire to see expanded disclosure of our executive compensation program including goals, weighting and the maximum opportunity provided under our annual bonus program. | We expanded our disclosure in this Proxy Statement to provide greater insight into our executive compensation program including the goals used to determine the annual bonus payout for our named executive officers. We have taken steps to formalize our bonus program structure and in January 2024, our Compensation and Human Capital Committee adopted a short-term incentive plan that uses: |
Say-on-Pay Results and Stockholder Engagement
| What We Heard | How We Responded | | | • financial goals tied to metrics comprising revenue, Adjusted EBITDA margin and revenue attrition from existing clients that are aligned with our growth and profitability; • strategic goals tied to our achievement of “Great Places to Work” certification and a Net Promoter Score for our flagship ShotSpotter gunshot detection product offering, reflecting our commitment to outstanding customer success and satisfaction, and aligned with our commitment to our people, customers and operations; and • a clear weighting structure and thresholds, targets and maximum payout levels for achievement of each of our financial and strategic goals. | | Desire for our Board to adopt a clawback policy | We adopted our Incentive Compensation Recoupment Policy in November 2023, which applies to all executive incentive compensation that is granted, earned or vested based on the Company’s attainment of financial reporting measures. | | Desire for implementation of stock ownership guidelines | We adopted our Stock Ownership Guidelines in November 2023 for our non-employee directors and executive officers to align members of our executive team with shareholders through meaningful ownership levels. | | Desire to have performance-based equity included in our long-term incentive (“LTI”) program | We have incorporated performance-based equity awards into our 2024 LTI program by using a combination of time-vesting RSUs and RSUs with “at-risk” performance-vesting requirements (“PSUs”), based on revenue and Adjusted EBITDA performance goals for fiscal year 2026, which will vest based on the achievement of these criteria in 2027. Assuming the PSUs vest based on the achievement of these criteria at target, the split between RSUs and PSUs is 50/50 for each of the NEOs. |
Summary of 2023 Compensation Actions
| • | Annual Performance Bonus Payouts Aligned to Company Performance We paid performance-based bonuses at 72% to 85% of the target bonus eligibility to our NEOs based on the average of the Compensation and Human Capital Committee’s determination of each executive officer’s attainment of applicable individual performance goals and the committee’s determination of the Company’s 60% achievement of its performance goals, as discussed under “Annual Bonus Plan” below. |
Summary of 2023 Compensation Actions
| • | Granted Equity Awards Aligned to Shareholders We continued to grant equity awards in the form of stock options and RSUs to our NEOs to incentivize and reward for stockholder value creation and have incorporated performance-based equity awards into our LTI program, beginning in 2024. The Compensation and Human Capital Committee believes that these awards strongly aligned our NEOs’ interests with those of our stockholders by providing a continuing financial incentive to maximize long-term value for our stockholders and by encouraging the retention of our NEOs. The vesting periods for our equity grants that are solely subject to time-based vesting to our NEOs generally vest over three or four years. |
Summary of 2023 Compensation Actions
| • | Designed Program to be Majority Incentive We structured 90% of our Chief Executive Officer’s (Mr. Clark’s) target compensation and 77% of the average of the other named executive officers’ (Mr. Stewart’s and Ms. Golzadeh’s) target compensation as variable or at-risk pay, consisting of an annual performance bonus and equity awards. “Target compensation” consists of base salary, target performance bonus opportunity and equity awards granted in 2023. |
Key Executive Compensation Design Principles
| What We Do | What We Don’t Do | | Pay for performance – structure a substantial portion of pay to be “at risk” and based on Company performance. | No tax gross-ups. | | Bonuses are dependent on the executive officer’s individual performance and the Company’s achievement of performance goals tied to revenue and Adjusted EBITDA goals and strategic goals aligned with our focus on our people, customers and operations. | No fringe benefits or perquisites that are not available to all employees. | | Retain independent compensation consultant for guidance in making compensation decisions. The compensation consultant advises our Compensation and Human Capital Committee on market practices, including identifying a reasonable peer group of companies and their compensation practices, so that our Compensation and Human Capital Committee can regularly assess our individual and total compensation programs against these peer companies, the general marketplace and other industry data points. | No hedging or pledging of Company stock. | | Annual review of compensation – the Compensation and Human Capital Committee with the assistance of its independent consultant reviews the Company’s executive program annually, considering best practices. | No guaranteed bonus or base salary increases. | | Equity awards granted to our executive officers vest over multi-year periods, consistent with current market practice and our retention objectives. | | | Our Compensation and Human Capital Committee selects our peers based on quantitative and qualitative criteria, including industry, revenue and market capitalization. | | | Our Board adopted Stock Ownership Guidelines that require minimum ownership of our common stock by our non-employee directors and executive officers. | | | Our Board adopted a Clawback policy consistent with Nasdaq rules requiring repayment of incentive compensation as a result of financial restatement. | |
Compensation Program Objectives and Elements
| Element of Compensation | Objectives | Governance and Process | | Annual Performance Bonus (at-risk cash or Bonus RSU Awards, as described below) | Motivates and rewards for the achievement of key annual financial goals. | Target bonus opportunities are generally reviewed annually and determined based upon positions that have similar impact on the organization as well as competitive market data. Actual bonus amounts are dependent upon the achievement of specific corporate objectives approved and communicated by the Compensation and Human Capital Committee at the beginning of the year. Actual bonus amounts are determined after the end of the year following the certification of financial and business results. | | Equity (long term at-risk equity) | Motivates and rewards for long-term Company performance; aligns executives’ interests with stockholder interests and changes in stockholder value. Attracts highly qualified executives and encourages their continued employment over the long-term. | Equity opportunities are generally reviewed annually and may be granted during the first half of the year or as appropriate during the year for new hires, promotions, or other special circumstances, such as to encourage retention, or as a reward for significant achievement. |
Compensation Program Objectives and Elements
We do not have any formal policies for allocating compensation among cash and equity-based compensation, but our general practice is to weigh more heavily towards equity-based compensation than total cash compensation provided to our executives, when viewed over a multiple year period. In any particular year, the ratio of awarded equity-based compensation to total compensation may vary because the Compensation and Human Capital Committee considers various factors in awarding equity including the amount of unvested equity remaining for each individual executive, the potential compensation that would be realized by the executives for their equity after modeling different potential future stock prices and vesting of their unvested awards, and the dilutive impact to our stockholders of granting new equity awards to our executives. We are strongly committed to a pay for performance culture which includes using cash incentives to reward in-year execution as well as long-term incentives that increase in value as the stock price improves. We also provide the opportunity for our named executive officers to enroll in benefits that are available to all our employees, including retirement benefits under the Company’s 401(k) plan and participation in employee health and welfare benefit plans.
Role of Compensation Consultant
Role of Compensation Consultant The Compensation and Human Capital Committee has the sole authority to retain compensation consultants to assist in its evaluation of executive compensation, including the authority to approve the consultant’s reasonable fees and other retention terms. In 2023, we retained Aon Reward Solutions (“Aon”) as an independent compensation consultant to conduct market research and analysis to assist the Compensation and Human Capital Committee in developing appropriate compensation and incentives for our executive officers and non-employee directors for 2023, to advise the Compensation and Human Capital Committee, to provide ongoing recommendations regarding material executive officer and non-employee director compensation decisions, to review compensation proposals from management, and ensure that our compensation programs remain competitive in attracting and retaining talented executives. Aon reports directly to the Compensation and Human Capital Committee, which maintains the authority to direct its work and engagement. Aon interacts with management to gain access to company information that is required to perform its services and to understand the culture and policies of our organization. Prior to engaging Aon, our Compensation and Human Capital Committee considered the independence factors set forth in Nasdaq listing standards. Aon’s engagement with respect to 2023 executive compensation decisions included conducting a review of the design and competitive positioning of our compensation programs for our Chief Executive Officer, other executive officers and non-employee directors in preparation for making compensation decisions for 2023, reviewing our aggregate long-term incentive practices, and updating its prior compensation study regarding equity grant practices. As part of the in-depth review for 2023 compensation, Aon provided the Compensation and Human Capital Committee with the following services, which the Compensation and Human Capital Committee used to make decisions related to compensation for 2023:
Role of Compensation Consultant
| • | reviewed and provided an analysis of the compensation arrangements for all our NEOs, including the design and structure of our annual cash incentive bonus plan and equity-based incentive compensation program; |
Role of Compensation Consultant
| • | advised on the design and structure of our cash and equity incentive compensation programs; |
Role of Compensation Consultant
| • | prepared an analysis of our share usage under our equity incentive plan; |
Role of Compensation Consultant
| • | updated the Compensation and Human Capital Committee on emerging trends and best practices in the area of executive and Board compensation; |
Role of Compensation Consultant
| • | assisted with shareholder outreach; |
Role of Compensation Consultant
| • | provide recommendations and assisted with developing our peer group; |
Role of Compensation Consultant
| • | provided compensation data for similarly situated executive officers at companies in our peer group; and |
Role of Compensation Consultant
| • | reviewed and provided recommendations on the compensation program for our non-employee directors. |
Role of Compensation Consultant
In determining whether to engage Aon, the Compensation and Human Capital Committee considered the following factors: (i) the amount of fees paid to the compensation consultant, as a percentage of the firm’s total revenue; (ii) the provision of other services to us by the compensation consultant; (iii) the compensation consultant’s policies and procedures that are designed to prevent conflicts of interest; (iv) any business or personal relationship of the individual compensation advisors with any member of the Compensation and Human Capital Committee; (v) any business or personal relationship of the compensation consultant or the individual compensation advisors employed by the firm with any of our executive officers or any members of the Compensation and Human Capital Committee; and (vi) any shares of our common stock owned by the compensation consultant or the individual compensation advisors employed by the firm.
Peer Group and Market Data
Peer Group and Market Data In making 2023 compensation decisions, the Compensation and Human Capital Committee reviewed market data, with the assistance of Aon, for each named executive officer’s position, compiled by Aon, from the following peer group of companies for 2023:
Peer Group and Market Data
| American Software, Inc. | Latch, Inc. | | Asure Software, Inc. | LiveVox Holdings, Inc. | | AudioEye, Inc. | Mitek Systems, Inc. | | Axon Enterprise, Inc. | ON24, Inc. | | ChannelAdvisor Corp. | OneSpan Inc. | | CoreCard Corporation | Smith Micro Software, Inc. | | Digimarc Corporation | SoundHound AI, Inc. | | eGain Corporation | Upland Software, Inc. | | Everbridge, Inc. | Veritone, Inc. | | IronNet, Inc. | |
Peer Group and Market Data
The 2023 peer group was recommended by Aon and selected based on the following parameters:
Peer Group and Market Data
| • | publicly traded technology companies, with a focus on software companies that are security oriented; |
Peer Group and Market Data
| • | companies with revenue generally between $20 million to $190 million; and |
Peer Group and Market Data
| • | companies with 30-day market capitalization, as of July 29, 2022, of $100 million to $1.1 billion. |
Factors Used in Determining Executive Compensation
| • | a range of market data reference points; |
Factors Used in Determining Executive Compensation
| • | its compensation consultant’s recommendations; |
Annual Bonus Plan
Annual Bonus Plan Our named executive officers are eligible to receive performance-based cash bonuses, which are designed to provide appropriate incentives to our executives to achieve defined performance goals and to reward our executives for individual achievement toward these goals. The performance-based bonus each named executive officer is eligible to receive is generally based on the extent to which such officer achieves his or her individual goals and to which we achieve the corporate goals that our Board or Compensation and Human Capital Committee establishes and is paid annually. Annually, the Compensation and Human Capital Committee of our Board reviews the officer’s performance and the Company’s performance, as well as other criteria, and determines the actual bonus payout to be awarded to each of our eligible executive officers. The following table displays the goals for fiscal year 2023 and whether such goals were achieved:
Annual Bonus Plan
| Financial and Strategic Goals | Actual Results | Achievement | | $94 million in revenue | $92.7 million in revenue | ☐ | | Adjusted EBITDA of $23.7 million | Adjusted EBITDA of $14.3 million | ☐ | | Net Promoter Score for our flagship ShotSpotter gunshot detection product offering of 56+ | Net Promoter Score for our flagship ShotSpotter gunshot detection product offering of 60+ | ☒ | | Great Place to Work certification | Certification Earned | ☒ | | GAAP Revenue Attrition <1% | GAAP Revenue Attrition <1% | ☒ |
Annual Bonus Plan
“GAAP Revenue Attrition” for 2023 means, for all customers with contracts in effect at December 31, 2022 (including contracts that had expired as of such date but were later renewed with a coverage period including January 1, 2023), the difference between (a) revenues recognized by the Company in 2023 as a result of price increases pursuant to such contracts or amendments thereto and (b) revenues that would have been recognized by the Company pursuant to such contracts in 2023 but were not recognized due to contract termination or cancellation, price decrease, or gap in paid service. GAAP Revenue Attrition is a measure used by management internally to understand and evaluate our ability to retain our existing customers and in connection with developing future operating plans, making strategic decisions and considering initiatives focused on cultivating new markets for our solutions. We believe GAAP Revenue Attrition also provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and Board. For 2023, our named executive officers were eligible to earn annual cash bonuses at target percentages of their respective base salaries equal to 100% for Mr. Clark, 55% for Mr. Stewart and 46% for Ms. Golzadeh based on the achievement of certain individual and corporate performance objectives approved by our Board. In September 2023, the Compensation and Human Capital Committee granted restricted stock units with performance- and service-based vesting requirements (“Bonus RSU Awards”) in lieu of cash for: (i) 21,470 shares of our common stock to Mr. Clark and (ii) 9,542 shares of our common stock to Mr. Stewart, each under the 2017 Plan. These awards were intended to be equivalent to the annual bonus maximum opportunity with the number of shares vesting based upon performance achievement against the annual bonus goals. The Compensation and Human Capital Committee reviewed each named executive officer’s attainment of their individual performance goals and the Company’s achievement against our performance goals and based on the level of individual and corporate achievement, the Compensation and Human Capital Committee approved bonus payments for 2023 for Mr. Clark, Mr., Stewart and Ms. Golzadeh as set forth in the table below:
Annual Bonus Plan
| Name | Target Bonus (% of Salary) | Target Bonus Eligibility ($)(#)(1) | Individual Attainment (%) | Company Attainment (%)(2) | Total Weighted Attainment (%) | 2023 Bonus Award ($)(#)(2) | | Ralph A. Clark | 100% | 21,470 RSUs | 84% | 60% | 72% | 15,458 RSUs | | Alan R. Stewart | 55% | 9,542 RSUs | 110% | 60% | 85% | 8,111 RSUs | | Nasim Golzadeh | 46% | $145,000 | 100% | 60% | 80% | $116,000 |
Annual Bonus Plan
| (1) The number of RSU shares was determined by dividing the maximum annual bonus amounts Mr. Clark and Mr. Stewart are eligible to earn by $20.96, which is the average closing price of our common stock, as reported on Nasdaq, over the 20-trading-day period ending on September 11, 2023, with the average closing price rounded to the nearest whole cent and the resulting number of shares rounded to the nearest whole share. The Bonus RSU Awards vest in a single installment on February 15, 2025, subject to Mr. Clark’s and Mr. Stewart’s continuous service as an officer of the Company through such date; provided, however, that if, such officer’s employment is termination other than for cause, such officer will receive 100% acceleration of vesting, subject to timely execution of a general release of claims in our favor. |
Annual Bonus Plan
| (2) The Company’s 2023 goal attainment percentage is based on achieving three of the five financial and strategic goals described as follows. |
Annual Bonus Plan
| Financial and Strategic Goals | Actual Results | Achievement | | $94 million in revenue | $92.7 million in revenue | ☐ | | Adjusted EBITDA of $23.7 million | Adjusted EBITDA of $14.3 million | ☐ | | Net Promoter Score for our flagship ShotSpotter gunshot detection product offering of 56+ | Net Promoter Score for our flagship ShotSpotter gunshot detection product offering of 60+ | ☒ | | Great Place to Work certification | Certification Earned | ☒ | | GAAP Revenue Attrition <1% | GAAP Revenue Attrition <1% | ☒ |
Annual Bonus Plan
The following table sets forth our named executive officers’ 2023 target bonus, 2023 payout and 2023 payout as a percentage of their 2023 target bonus: As noted under “Say-on-Pay Results and Stockholder Engagement” for 2024 we have taken steps to formalize our bonus program structure. See “Executive Compensation Program Changes for 2024” below for more detail.
Equity Compensation
Equity Compensation We believe that our ability to grant equity-based awards is a valuable and necessary compensation tool that aligns the long-term financial interests of our executive officers with the financial interests of our stockholders. In addition, we believe that our ability to grant equity-based awards helps us to attract, retain and motivate executive officers and encourages them to devote their best efforts to our business and financial success. Vesting of equity awards is generally tied to continuous service with us and serves as an additional retention measure. Our executive officers generally are awarded an initial new hire grant upon commencement of employment, as well as annual grants. In 2023, the Compensation and Human Capital Committee chose to use stock options and RSUs for our LTI equity program. For 2023, 75 to 80% of the total LTI award value was delivered in stock options and 15 to 25% was delivered in RSUs with time-based vesting. Additionally, certain of our NEOs received Bonus RSU Awards in 2023, as described in “Annual Bonus Plan” above. Each of our named executive officers currently holds stock options under our 2005 Equity Incentive Plan (the “2005 Plan”) and/or 2017 Equity Incentive Plan (the “2017 Plan”) that were granted subject to the general terms of the applicable plan and the applicable forms of stock option agreement thereunder. The specific vesting terms of each named executive officer’s stock options are described below under “Outstanding Equity Awards as of December 31, 2023.” We currently grant equity awards pursuant to the 2017 Plan. As noted under “Say-on-Pay Results and Stockholder Engagement” beginning for 2024 we have incorporated performance-based equity awards into our LTI program with a combination of time-vesting RSUs and RSUs withs “at-risk” PSUs. See “Executive Program Compensation Changes for 2024” below for more detail.
Executive Compensation Program Changes for 2024
| • | A more formulaic Annual Bonus Plan that includes the following financial (75% of total opportunity) and strategic goals (25%): |
Executive Compensation Program Changes for 2024
Each of the financial goals is measured independently on a scale ranging from threshold to target to maximum with payouts ranging from 50% of target payout at threshold to 150% of target payout at maximum. The strategic goals are assessed on an achieved or not achieved basis.
Executive Compensation Program Changes for 2024
| • | Introduced the PSUs whereby 50% of the total target long-term incentive opportunity is subject to achievement of performance conditions, with the remaining 50% subject to time-based vesting. The company is no longer granting stock options to the NEOs. The time-vested restricted stock vesting monthly over three years. The PSUs vest at the end of three years based on performance on the following financial goals: |
Executive Compensation Program Changes for 2024
Each of the financial goals is measured independently on a scale ranging from threshold to target to maximum with payouts ranging from 50% of target payout at threshold to 200% of target payout at maximum. For performance below threshold no award payout is made. We acknowledge that the financial metrics in the PSUs overlap with the annual bonus plan but feel they are unique as the PSU goals are aligned to our performance in 2026 while the annual bonus plan goals are aligned to our performance in 2024. In addition, we feel these goals represent the key focus for us over the mid-term.
Executive Compensation Program Changes for 2024
| • | Mr. Clark’s long-term incentive opportunity was reduced from $4.25 million in 2023 to $3.2 million in 2024. |
Summary Compensation Table
Summary Compensation Table The following table sets forth information regarding the compensation awarded to or earned by our named executive officers listed below during the years ended December 31, 2023 and 2022.
Summary Compensation Table
| * | Year | Salary ($) | Bonus ($) | Stock Awards ($)(1) | Option Awards ($)(2) | Non-Equity Incentive Plan Compensation ($)(3) | All Other Compensation ($)(4) | Total ($) | | Ralph A. Clark | 2023 | 450,000 | — | 2,311,023 | 1,939,265 | — | 7,800 | 4,708,087 | | President and Chief Executive Officer | 2022 | 450,000 | — | 1,003,052 | 2,995,621 | 337,500 | 14,014 | 4,800,187 | | Alan R. Stewart | 2023 | 360,000 | — | 663,187 | 484,818 | — | 7,800 | 1,515,805 | | Chief Financial Officer | 2022 | 360,000 | — | 501,513 | 499,276 | 158,400 | 10,240 | 1,529,429 | | Nasim Golzadeh | 2023 | 315,000 | — | 499,994 | 484,818 | 116,000 | 7,800 | 1,423,612 | | Managing Director, Technologic and Executive Vice President, Investigative Solutions | 2022 | 308,750 | — | 501,513 | 499,276 | 113,400 | 8,247 | 1,431,186 |
Summary Compensation Table
| (1) The amounts reported here do not reflect the actual economic value realized by our named executive officers. In accordance with SEC rules, this column represents the grant date fair value of shares underlying restricted stock unit awards, calculated in accordance with ASC 718. Assumptions used in the calculation of |
Summary Compensation Table
| the grant date fair value of the restricted stock units are set forth in Note 14, “Equity Incentive Plans” to our audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023. |
Summary Compensation Table
| (2) The amounts reported here do not reflect the actual economic value realized by our named executive officers. In accordance with SEC rules, this column represents the grant date fair value of shares underlying stock options, calculated in accordance with ASC 718. Assumptions used in the calculation of the grant date fair value of the stock options are set forth in Note 14, “Equity Incentive Plans” to our audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023. |
Summary Compensation Table
| (3) The amounts reported in the “Non-Equity Incentive Plan Compensation” represent amounts paid in 2023 and 2024 for the achievement of pre-established corporate performance goals during 2022 and 2023, see “Annual Bonus Plan” above. There are no amounts reported under “Non-Equity Incentive Plan Compensation” for Mr. Clark and Mr. Stewart for 2023 since in September 2023, Mr. Clark and Mr. Stewart were granted RSUs to replace their cash bonus. In January 2024, the Compensation and Human Capital Committee determined that Mr. Clark and Mr. Stewart earned 15,458 and 8,111 of such RSU awards, respectively. These amounts are shown under the “Stock Awards” column for Mr. Clark and Mr. Stewart. See “Annual Bonus Plan” above. |
Summary Compensation Table
| (4) Amounts reported in this column represent 401(k) Company match pursuant to the Company’s 401(k) Plan available to all employees, life insurance premiums paid by us on behalf of the executive officer and home office taxable reimbursements. |
Outstanding Equity Awards as of December 31, 2023
Outstanding Equity Awards as of December 31, 2023 The following table provides information regarding outstanding equity awards held by our named executive officers as of December 31, 2023.
Outstanding Equity Awards as of December 31, 2023
| | | Option Awards | | | | | Stock Awards | | | Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock that Have Not Vested (#) | Market Value of Shares or Units of Stock that Have Not Vested ($) | | Ralph A. Clark | 3/27/2017 | 18,000 | | | 3.06 | 3/27/2027 | | | | | 3/6/2020 | 29,863 | 1,992(1 | )(3) | 34.07 | 3/5/2030 | | | | | 3/6/2020 | | | | | | 1,147(4) | 29,294(9) | | | 3/9/2021 | 20,809 | 9,460(1 | )(3) | 37.26 | 3/9/2031 | | | | | 3/9/2021 | | | | | | 5,663(5) | 144,633(9) | | | 2/17/2022 | 87,686 | 103,634(1 | )(3) | 26.50 | 2/16/2032 | | | | | 2/17/2022 | | | | | | 21,292(6) | 543,798(9) | | | 2/27/2023 | 20,519 | 77,977(1 | )(3) | 32.89 | 2/27/2033 | | | | | 2/27/2023 | | | | | | 49,407(7) | 1,261,855(9) | | | 9/13/2023 | | | | | | 15,458(8) | 394,797(9) | | Alan R. Stewart | 3/6/2020 | 12,840 | 857(1 | )(3) | 34.07 | 3/5/2030 | | | | | 3/6/2020 | | | | — | | 493(4) | 12,591(9) | | | 3/9/2021 | 4,238 | 1,927(1 | )(3) | 37.26 | 3/9/2031 | | | | | 3/9/2021 | | | | — | | 3,469(5) | 88,598(9) | | | 2/17/2022 | 14,614 | 17,273(1 | )(3) | 26.50 | 2/16/2032 | | | | | 2/17/2022 | | | | — | | 10,646(6) | 271,899(9) | | | 2/27/2023 | 5,129 | 19,495(1 | )(3) | 32.89 | 2/27/2033 | | | | | 2/27/2023 | | | | | | 12,352(7) | 315,470(9) | | | 9/13/2023 | | | | | | 8,111(8) | 207,155(9) |
Outstanding Equity Awards as of December 31, 2023
| | | Option Awards | | | | | Stock Awards | | | Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock that Have Not Vested (#) | Market Value of Shares or Units of Stock that Have Not Vested ($) | | Nasim Golzadeh | 3/7/2019 | 50,000 | (2 | )(3) | 44.95 | 3/6/2029 | | | | | 3/6/2020 | 20,079 | 1,340(1 | )(3) | 34.07 | 3/5/2030 | | | | | 3/6/2020 | | | | | — | 321(4) | 8,198(9) | | | 3/9/2021 | 2,697 | 1,226(1 | )(3) | 37.26 | 3/9/2031 | | | | | 3/9/2021 | | | | | — | 2,205(5) | 56,316(9) | | | 2/17/2022 | 14,614 | 17,273(1 | )(3) | 26.50 | 2/16/2032 | | | | | 2/17/2022 | | | | | — | 10,646(6) | 271,899(9) | | | 2/27/2023 | 5,129 | 19,495(1 | )(3) | 32.89 | 02/27/2033 | | | | | 2/27/2023 | | | | | — | 12,352(7) | 315,470(9) |
Outstanding Equity Awards as of December 31, 2023
| (1) 1/48th of the shares subject to the stock option vest each month following the grant date. |
Outstanding Equity Awards as of December 31, 2023
| (2) The shares subject to the stock option vest over a four-year period as follows: 25% of the shares underlying the options vested March 7, 2020 and thereafter 1/48th of the shares vest each month, subject to continued service with us through each vesting date. |
Outstanding Equity Awards as of December 31, 2023
| (3) Stock option is subject to accelerated vesting upon a qualifying termination of the executive’s employment with us, as described below under “Potential Payments and Benefits upon Termination or Change in Control.” |
Outstanding Equity Awards as of December 31, 2023
| (4) Represents RSUs. The RSUs vest as follows: 6.25% of the RSUs shall vest quarterly, starting June 6, 2020, subject to continued employment on each such vesting date. |
Outstanding Equity Awards as of December 31, 2023
| (5) Represents RSUs. The RSUs vest as follows: 6.25% of the RSUs shall vest quarterly, starting March 9, 2021, subject to continued employment on each such vesting date. |
Outstanding Equity Awards as of December 31, 2023
| (6) Represents RSUs. The RSUs vest as follows: 6.25% of the RSUs shall vest quarterly, starting February 17, 2022, subject to continued employment on each such vesting date. |
Outstanding Equity Awards as of December 31, 2023
| (7) Represents RSUs. The RSUs vest as follows: 6.25% of the RSUs shall vest quarterly, starting February 27, 2023, subject to continued employment on each such vesting date. |
Outstanding Equity Awards as of December 31, 2023
| (8) In January 2024, the Compensation and Human Capital Committee determined that Mr. Clark and Mr. Stewart earned 15,458 and 8,111 of the Bonus RSU Awards, respectively. The earned Bonus RSU Awards vest on February 15, 2025, subject to Mr. Clark’s and Mr. Stewart’s continuous service as an officer of the Company through such date; provided, however, that if, such officer’s employment is terminated other than for cause, such officer will receive 100% acceleration of vesting, subject to timely execution of a general release of claims in our favor. See “Annual Bonus Plan” above. |
Outstanding Equity Awards as of December 31, 2023
| (9) The market value is based on the closing price of our common stock as of December 29, 2023, the last trading day of the month, of $25.54 per share. |
Potential Payments and Benefits upon Termination or Change in Control
Potential Payments and Benefits upon Termination or Change in Control The offer letter agreements with each of Mr. Clark, Mr. Stewart and Ms. Golzadeh provide that if we terminate such named executive officer for any reason other than for cause, death or disability, such named executive officer would be entitled to receive the following severance benefits:
Potential Payments and Benefits upon Termination or Change in Control
| • | payment of such officer’s then-current base salary for a period of six months following the termination date; and |
Potential Payments and Benefits upon Termination or Change in Control
| • | acceleration of six months of vesting of then-unvested options (or, for Ms. Golzadeh only, options and RSUs) held by such executive officer. |
Potential Payments and Benefits upon Termination or Change in Control
In addition, if we terminate such named executive officer other than for cause, death or disability, or such named executive officer resigns his or her position with us for good reason, immediately prior to or within 12 months of a change in control, then the named executive officer shall also be entitled to receive 100% acceleration of vesting of then-unvested options or held by such named executive officer upon such qualifying termination. Payment of any severance benefits is conditioned on the named executive officer’s timely execution of a general release of claims in our favor. The acceleration of vesting provisions as described above only govern the options (or, for Ms. Golzadeh only, options and RSUs) held by such executive officer as of the date of their respective offer letter agreements. The Bonus RSU Awards discussed under “Annual Bonus Plan” above vest in a single installment on February 15, 2025, subject to Mr. Clark’s and Mr. Stewart’s continuous service as an officer of the Company through such date; provided, however, that if Mr. Clark’s or Mr. Stewart’s employment is terminated other than for cause, he will receive 100% acceleration of vesting, subject to timely execution of a general release of claims in our favor. For other options and RSUs granted to each named executive officer other than (i) the Bonus RSU Awards and (ii) options or RSUs, as applicable, granted to such executive officer as of the date of their respective offer letter agreements, any vesting acceleration of then-unvested options or RSUs is subject to the terms of the applicable award agreement and/or determination of the Board prior to a change in control.
Non-Employee Director Compensation
Non-Employee Director Compensation The following table sets forth information regarding cash and non-cash compensation earned by or paid to our non-employee directors during the fiscal year ended December 31, 2023:
Non-Employee Director Compensation
| Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1)(3) | Total ($) | | William J. Bratton | 45,000 | 124,983 | 169,983 | | Deborah A. Grant | 53,000 | 124,983 | 177,983 | | Roberta Jacobson | 48,000 | 124,983 | 172,983 | | Pascal Levensohn(2) | — | 227,861 | 227,861 | | Marc Morial | 57,500 | 124,983 | 182,483 | | Ruby Sharma | 60,000 | 124,983 | 184,983 |
Non-Employee Director Compensation
| (1) The amounts reported do not reflect the amounts actually received by our non-employee directors. Instead, these amounts reported reflect the aggregate grant date fair value of all RSUs granted to our non-employee directors during fiscal year ended December 31, 2023, as computed in accordance with ASC 718. As required by SEC rules, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions. Assumptions used in the calculation of these amounts are included in Note 14 to our financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023. These amounts do not necessarily correspond to the actual value recognized or that may be recognized by the non-employee directors. |
Non-Employee Director Compensation
| (2) Mr. Levensohn elected to receive $75,000 of his cash compensation for his service during 2023 in 3,414 RSUs. During 2023, Mr. Levensohn received an award of 561 RSUs with a grant date fair value of $18,451.29, an award of 832 RSUs with a grant date fair value of $18,154.24, an award of 1,020 RSUs with a grant date fair value of $20,491.80, an award of 1,001 RSUs with a grant date fair value of $20,770.75, and an award of a grant made on the date of the 2023 annual meeting of 6,849 RSUs with a grant date fair value of $149,993.10. |
Non-Employee Director Compensation
| (3) As of December 31, 2023, the aggregate number of shares underlying RSU awards outstanding held by our non-employee directors listed above were as follows: Mr. Bratton, 5,707 shares; Ms. Grant, 5,707 shares; Ambassador Jacobson, 5,707 shares; Mr. Levensohn, 6,849 shares; Mr. Morial, 5,707 shares and Ms. Sharma, 5,707 shares. As of December 31, 2023, the aggregate number of shares underlying outstanding options held by our non-employee directors were as follows: Mr. Morial, 11,765 shares. |
Non-Employee Director Compensation Policy
Non-Employee Director Compensation Policy In accordance with our policy for the compensation of our non-employee directors (the “Non-Employee Director Compensation Policy”), the Board Chair was entitled to receive a retainer at an annualized rate of $65,000 and each other non-employee director was entitled to receive a board service retainer at an annualized rate of $40,000 during 2023. The chairs of our Audit Committee, our Compensation and Human Capital Committee and our Nominating and Corporate Governance Committee were entitled to receive committee chair service retainers at the annualized rate of $20,000, $10,000 and $7,500, respectively, during 2023. Non-Chair members of our Audit Committee, Compensation and Human Capital Committee and Nominating and Corporate Governance Committee were entitled to receive committee service retainers at the annualized rate of $10,000, $5,000 and $3,000, respectively, during 2023. We also reimburse all reasonable out-of-pocket expenses incurred by non-employee directors in attending meetings of our Board or any committee thereof. In accordance with the Non-Employee Director Compensation Policy, Mr. Levensohn elected to receive all cash compensation for his service in 2023 in RSUs in accordance with the policy. In addition to cash compensation, under the Non-Employee Director Compensation Policy, each non-employee director was eligible to receive RSU awards pursuant the 2017 Plan. Each non-employee director appointed during 2023 was eligible to receive a RSU (an “Initial Award”) with an aggregate grant date fair value of $125,000, prorated for his or her days of service in the year of appointment until the next annual meeting of stockholders. On the date of each annual meeting of stockholders, each non-employee director in office immediately following such annual meeting was eligible to receive an RSU (an “Annual Award”) with an aggregate grant date fair value totaling $125,000, except that the Chair was entitled to receive an Annual Award with additional fair market value of $25,000. However, if the Chair of the Board was also the chair of any committee, the dollar value of the Initial Award or Annual Award shall be reduced by any cash compensation received as a result of such director’s chair role of such committee. Accordingly, each non-employee member of the Board received an Annual Award immediately following our meeting of stockholders with a grant date fair value of $125,000. Each Initial Award and Annual Award vests on the earlier of (i) the first anniversary of the date of grant and (ii) the date of the Company’s first annual meeting of stockholders following such grant date provided that such director is providing service to the Company as a member of the Board as of such date. In addition, the vesting of all RSUs granted under the Non-Employee Director Compensation Policy will accelerate in full upon a Change in Control (as defined in the 2017 Plan) or immediately prior to the effectiveness of a non-employee director’s resignation or removal (and contingent upon the effectiveness of a Change in Control) in the event that the non-employee director is required to resign his or her position as a non-employee director as a condition of the Change in Control or the non-employee director is removed from his or her position as a non-employee director in connection with the Change in Control. All awards made pursuant to the Non-Employee Director Compensation Policy are subject to the limitations on compensation payable to non-employee directors set forth in the 2017 Plan.
Pay Versus Performance
Pay Versus Performance As required by Section 953(a) of the Dodd-Frank Act and Item 402(v) of Regulation S-K, we are providing the following disclosure about the relationship between executive compensation actually paid for our principal executive officer, or PEO and average compensation actually paid to non-PEO named executive officers, or Non-PEO NEOs and certain financial performance of the Company. As a smaller reporting company, we are permitted and have elected to provide scaled pay versus performance disclosure. For further information regarding our compensation philosophy and how we seek to align executive compensation with the Company’s performance, please refer to the “Executive Compensation” section above. The following table presents the pay versus performance information for our named executive officers. The amounts set forth below have been calculated in accordance with Item 402(v) of Regulation S-K. Use of the term “compensation actually paid” is required by the SEC’s rules and, as a result of the calculation methodology required by the SEC, such amounts differ from compensation actually received by the individuals and the compensation decisions described in this Proxy Statement:
Pay Versus Performance
| Year | Summary Compensation Table Total for PEO ($)(1) | Compensation Actually Paid to PEO ($)(2) | Average Summary Compensation Table Total for Non-PEO NEOs ($)(3) | Average Compensation Actually Paid to Non-PEO NEOs ($)(4) | Value of Initial Fixed $100 Investment Based On Total Stockholder Return ($)(5) | Net Income (Loss) ($)(6) | | (a) | (b) | (c) | (d) | (e) | (f) | (g) | | 2023 | 4,708,087 | 3,010,978 | 1,469,708 | 1,232,663 | 68 | (2,718,000) | | 2022 | 4,800,187 | 7,136,331 | 1,480,307 | 1,994,023 | 90 | 6,385,000 | | 2021 | 2,156,301 | 1,763,580 | 987,997 | 820,561 | 78 | (4,431,000) |
Pay Versus Performance
| (1) The dollar amounts reported in column (b) are the amounts of total compensation reported for Mr. Clark (our Chief Executive Officer, or PEO) for 2023 and 2022 in the “Total” column of the Summary Compensation Table. Refer to “Executive Compensation—Summary Compensation Table” in this Proxy Statement. |
Pay Versus Performance
| (2) The dollar amounts reported in column (c) represent the amount of “compensation actually paid” to Mr. Clark, as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual amount of compensation earned by or paid to Mr. Clark during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to Mr. Clark’s total compensation for each year to determine the compensation actually paid: |
Pay Versus Performance
| Year | Reported Summary Compensation Table Total for PEO ($) | Reported Value of Equity Awards(a) ($) | Equity Award Adjustments(b) ($) | Compensation Actually Paid to PEO ($) | | 2023 | 4,708,087 | (4,250,287) | 2,553,178 | 3,010,978 | | 2022 | 4,800,187 | (3,998,672) | 6,334,816 | 7,136,331 | | 2021 | 2,156,301 | (1,350,272) | 1,141,356 | 1,947,385 |
Pay Versus Performance
| (a) The grant date fair value of equity awards represents the total of the amounts reported in the “Stock Awards” and “Option Awards” columns in the Summary Compensation Table for the applicable year. |
Pay Versus Performance
| (b) The equity award adjustments for each applicable year include the addition (or subtraction, as applicable) of the following: (i) the year-end fair value of any equity awards granted in the applicable year that are outstanding and unvested as of the end of the year; (ii) the amount of change as of the end of the applicable year (from the end of the prior fiscal year) in fair value of any awards granted in prior years that are outstanding and unvested as of the end of the applicable year; (iii) for awards that are granted and vest in same applicable year, the fair value as of the vesting date; (iv) for awards granted in prior years that vest in the applicable year, the amount equal to the change as of the vesting date (from the end of the prior fiscal year) in fair value; and (v) for awards granted in prior years that are determined to fail to meet the applicable vesting conditions during the applicable year, a deduction for the amount equal to the fair value at the end of the prior fiscal year. The valuation assumptions used to calculate fair values did not materially differ from |
Pay Versus Performance
| those disclosed at the time of grant. The amounts deducted or added in calculating the equity award adjustments are as follows: |
Pay Versus Performance
| Fiscal Year | Fiscal Year End Fair Value of Equity Awards Granted in the Fiscal Year ($) | Change in Fair Value from the End of the Prior Fiscal Year to the End of the Fiscal Year of Unvested Equity Awards Granted in Prior Fiscal Years that were Outstanding and Unvested at the End of the Fiscal Year ($) | Fair Value as of Vesting Date of Equity Awards Granted in the Fiscal Year that Vested in the Fiscal Year ($) | Change in Fair Value from the End of the Prior Fiscal Year to the Vesting Date of Equity Awards Granted in Prior Fiscal Years that Vested in the Fiscal Year ($) | Fair Value at the End of the Prior Fiscal Year of Equity Awards that Failed to Meet Vesting Conditions in the Fiscal Year ($) | Total Equity Award Adjustments ($) | | 2023 | 3,729,617 | (1,126,494) | 609,009 | (658,954) | — | 2,553,178 | | 2022 | 5,048,119 | 256,676 | 1,155,307 | (125,286) | — | 6,334,816 | | 2021 | 1,036,457 | (216,127) | 277,895 | 43,131 | — | 1,141,356 |
Pay Versus Performance
| (3) The dollar amounts reported in column (d) represent the average of the amounts reported for our Non-PEO NEOs as a group in the “Total” column of the Summary Compensation Table in each applicable year. The Non-PEO NEOs included for purposes of calculating the average amounts in each applicable year are as follows: (i) for 2023 and 2022, Mr. Stewart and Ms. Golzadeh; and (ii) for 2021, Mr. Stewart and Gary Bunyard. |
Pay Versus Performance
| (4) The dollar amounts reported in column (e) represent the average amount of “compensation actually paid” to our Non-PEO NEOs as a group, as computed in accordance with Item 402(v) of Regulation S-K for each applicable year. The dollar amounts do not reflect the actual average amount of compensation earned by or paid to our Non-PEO NEOs as a group during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to average total compensation for our Non-PEO NEOs as a group for each year to determine the compensation actually paid, using the same methodology described above in Note (2): |
Pay Versus Performance
| Year | Average Reported Summary Compensation Table Total for Non-PEO NEOs ($) | Average Reported Value of Equity Awards ($) | Average Equity Award Adjustments(a) ($) | Average Compensation Actually Paid to Non-PEO NEOs ($) | | 2023 | 1,469,708 | (1,066,408) | 829,363 | 1,232,663 | | 2022 | 1,480,307 | (1,000,789) | 1,514,505 | 1,994,023 | | 2021 | 987,997 | (425,009) | 348,840 | 911,828 |
Pay Versus Performance
| (a) The amounts deducted or added in calculating the total average equity award adjustments are as follows: |
Pay Versus Performance
| Fiscal Year | Average Fiscal Year End Fair Value of Equity Awards Granted in the Fiscal Year ($) | Average Change in Fair Value from the End of the Prior Fiscal Year to the End of the Fiscal Year of Unvested Equity Awards Granted in Prior Fiscal Years that were Outstanding and Unvested at the End of the Fiscal Year ($) | Average Fair Value as of Vesting Date of Equity Awards Granted in the Fiscal Year that Vested in the Fiscal Year ($) | Average Change in Fair Value from the End of the Prior Fiscal Year to the Vesting Date of Equity Awards Granted in Prior Fiscal Years that Vested in the Fiscal Year ($) | Average Fair Value at the End of the Prior Fiscal Year of Equity Awards that Failed to Meet Vesting Conditions in the Fiscal Year ($) | Total Average Equity Award Adjustments ($) | | 2023 | 1,112,621 | (264,074) | 152,218 | (171,403) | — | 829,363 | | 2022 | 1,188,160 | 100,518 | 270,581 | (44,754) | — | 1,514,505 | | 2021 | 337,894 | (86,286) | 82,799 | (14,433) | — | 348,840 |
Pay Versus Performance
| (5) Cumulative TSR is calculated by dividing the sum of the cumulative amount of dividends for the measurement period, assuming dividend reinvestment, and the difference between the Company’s share price at the end and the beginning of the measurement period by the Company’s share price at the beginning of the measurement period. |
Pay Versus Performance
| (6) The dollar amounts reported represent the amount of net income (loss) reflected in the Company’s audited financial statements for the applicable year. |
Analysis of the Information Presented in the Pay Versus Performance Table
Analysis of the Information Presented in the Pay Versus Performance Table In accordance with Item 402(v) of Regulation S-K, we are providing the following descriptions of the relationships between information presented in the Pay Versus Performance table above.
Compensation Actually Paid and Net Income
Compensation Actually Paid and Net Income The chart below shows the relationship between the compensation actually paid to our PEO and the average compensation actually paid to our Non-PEO NEOs, on the one hand, to the Company’s net income, on the other. Compensation Actually Paid and Cumulative TSR The chart below shows the relationship between the compensation actually paid to our PEO and the average compensation actually paid to our Non-PEO NEOs, on the one hand, to the Company’s cumulative total stockholder return, or TSR, over the three years presented in the table, on the other. All information provided above under the “Pay Versus Performance” heading will not be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing, except to the extent the Company specifically incorporates such information by reference.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
| • | each of our named executive officers (as such term is defined in “Executive and Director Compensation” below); |