DEF 14A of Yelp Inc
Filed Apr 25, 2024 · FY20230001345016-24-000023
Director Nominees
Director Nominees
Director Nominees
| | Diane Irvine INDEPENDENT CHAIR | | | | Director Since: | November 2011 | | | Committees: | Audit (Chair) | | | | Nominating & Corporate Governance |
Director Nominees
| | Fred D. Anderson, Jr. INDEPENDENT | | | | Director Since: | February 2011 | | | Committees: | Audit | | | | Compensation (Chair) |
Director Nominees
| | Christine Barone INDEPENDENT | | | | Director Since: | March 2020 | | | Committees: | Audit |
Director Nominees
| | Robert Gibbs INDEPENDENT | | | | Director Since: | May 2012 | | | Committees: | Audit | | | | Nominating & Corporate Governance (Chair) |
Director Nominees
| | Dan Jedda INDEPENDENT | | | | Director Since: | March 2024 |
Director Nominees
| | Sharon Rothstein INDEPENDENT | | | | Director Since: | March 2019 | | | Committees: | Compensation | | | | Nominating & Corporate Governance |
Director Nominees
| | Jeremy Stoppelman, CEO | | | | Director Since: | September 2005 |
Director Nominees
| | Chris Terrill INDEPENDENT | | | | Director Since: | March 2022 | | | Committees: | Nominating & Corporate Governance |
Director Nominees
| | Tony Wells INDEPENDENT | | | | Director Since: | October 2020 | | | Committees: | Compensation |
Director Nominees
The nominees represent a broad range of expertise, experience, viewpoints and backgrounds, as well as a mix of tenure of service on our Board. Please see “Information Regarding the Board of Directors and Corporate Governance—Board of Directors” on page 8 below for more information about the specific qualifications of the director nominees.
Board of Directors
Board of Directors Our business is managed under the direction of our Board, which is presently composed of nine directors. All of our directors other than our Chief Executive Officer, Jeremy Stoppelman, are independent within the meaning of the listing standards of the New York Stock Exchange (“NYSE”). The following table sets forth the names, ages as of April 15, 2024, and certain other information with respect to each of our nine nominees for election at the Annual Meeting: Legend: • Committee Chairperson | ● Committee Member
Summary of Director Experience and Qualifications
Summary of Director Experience and Qualifications The matrix below summarizes what our Board believes are desirable types of experience, qualifications, attributes and skills possessed by one or more of our directors as a result of their particular relevance to our business and structure. While all of these were considered by the Board and the Nominating and Corporate Governance Committee of the Board (the “Nominating Committee”) in connection with this year’s director nomination process, the following matrix does not encompass all experience, qualifications, attributes or skills of our directors.
Biographies of Our Board Members
Biographies of Our Board Members A brief biography of each nominee is set forth below. The biographies below also include information regarding the specific experience, qualifications, attributes or skills of each nominee or director that led the Nominating Committee to determine that such individual should serve as a member of the Board as of the date of this Proxy Statement. Please see “Proposal No. 1—Election of Directors” below for more information about the election of our directors.
Biographies of Our Board Members
| | | Fred D. Anderson, Jr. | | | | | Director Since: | February 2011 | | | | Committees: | Audit | | | | | Compensation (Chair) | | Fred D. Anderson, Jr. serves as Managing Director of NextEquity Partners, a firm he co-founded in July 2015, making venture capital investments in technology and digital media companies. Mr. Anderson previously served as Managing Director of Elevation Partners, a private equity investment fund he co-founded, from July 2004 to December 2021, when the fund was fully realized and liquidated. From March 1996 to June 2004, he served as Executive Vice President and Chief Financial Officer of Apple Inc., one of the world’s largest consumer electronics companies. Prior to joining Apple, Mr. Anderson was Corporate Vice President and Chief Financial Officer of Automatic Data Processing, Inc., an electronic transaction processing firm, from August 1992 to March 1996. Mr. Anderson currently serves on the board of trustees of Whittier College. Mr. Anderson holds a B.A. from Whittier College and an M.B.A. from the University of California, Los Angeles. | | | | | Qualifications | | | | | ✓ | Extensive financial expertise from CFO positions at large, global companies | | | | ✓ | Significant board and senior management experience at large, innovative technology companies | | | | ✓ | Deep experience in analyzing and executing sophisticated corporate transactions | | | | Other Public Company Board Service | | | | | + | eBay Inc. (July 2003 – June 2020) | | | | + | Move, Inc. (November 2006 – March 2012) | | | | + | Palm, Inc. (October 2007 – July 2010) | | | | + | Apple Inc. (June 2004 – September 2006) | | |
Biographies of Our Board Members
| | | Christine Barone | | | | | Director Since: | March 2020 | | | | Committees: | Audit | | Christine Barone has served as Chief Executive Officer of Dutch Bros Coffee, a drive-through coffee chain, since January 2024 and as President since February 2023. She previously served as Chief Executive Officer of True Food Kitchen, a health-driven and lifestyle brand, from August 2016 to February 2023. From February 2011 to August 2016, Ms. Barone served in various roles at Starbucks Corporation, a premier roaster, marketer and retailer of specialty coffees, most recently as Senior Vice President of Food, Evenings and Licensed Stores. Prior to joining Starbucks, Ms. Barone was a Principal at Bain & Company from September 2000 to February 2011. Ms. Barone holds a A.B. in Applied Mathematics from Harvard College and an M.B.A. from Harvard Business School. | | | | | Qualifications | | | | | ✓ | Extensive leadership experience in key restaurant category | | | | ✓ | Experience as a senior executive of major public companies | | | | Other Public Company Board Service | | | | | + | Dutch Bros Coffee (January 2024 – present) | | |
Biographies of Our Board Members
| | | Robert Gibbs | | | | | Director Since: | May 2012 | | | | Committees: | Audit | | | | | Nominating & Corporate Governance (Chair) | | Robert Gibbs has served as Partner at Bully Pulpit Interactive Media, Inc., a communications agency, since March 2020 and is a contributor on NBC and MSNBC television channels. He previously served as Executive Vice President, Global Chief Communications Officer of McDonald’s Corporation, a global food service retailer, from June 2015 to October 2019. Prior to joining McDonald’s, Mr. Gibbs was a Partner at The Incite Agency, a strategic communications firm he co-founded, from June 2013 to June 2015 and a contributor to cable news channel MSNBC from February 2013 to June 2015. Mr. Gibbs previously served as a senior campaign advisor to President Barack Obama for the 2012 presidential election from January 2012 to November 2012. From January 2009 to February 2011, he served as the 28th White House Press Secretary. Prior to January 2009, Mr. Gibbs was the Communications Director for then-U.S. Senator Obama and his 2008 presidential campaign. He was also the Press Secretary for then-U.S. Senator John Kerry’s 2004 presidential campaign and previously specialized in Senate campaigns, serving as Communications Director for the Democratic Senatorial Campaign Committee and for four individual Senate campaigns, including those of Mr. Obama in 2004 and U.S. Senator Fritz Hollings in 1998. Mr. Gibbs holds a B.A. in Political Science from North Carolina State University. | | | | | Qualifications | | | | | ✓ | Extensive media, communications and public policy experience | | | | ✓ | Leadership experience in key restaurant category | | |
Biographies of Our Board Members
| | | Diane Irvine, Chairperson | | | | | Director Since: | November 2011 | | | | Committees: | Audit (Chair) | | | | | Nominating & Corporate Governance | | Diane Irvine has served as Chairperson of the Board since September 2015. She previously served as Chief Executive Officer of Blue Nile, Inc., an online retailer of diamonds and fine jewelry, from February 2008 to November 2011, and as President from February 2007 to November 2011. She also served as Chief Financial Officer of Blue Nile from December 1999 to September 2007. From February 1994 to May 1999, Ms. Irvine served as Vice President and Chief Financial Officer of Plum Creek Timber Company, Inc., a timberland management and wood products company. From September 1981 to February 1994, Ms. Irvine served in various capacities, most recently as Partner, with Coopers & Lybrand LLP, an accounting firm. Ms. Irvine holds a B.S. in Accounting from Illinois State University and an M.S. in Taxation and a Doctor of Humane Letters from Golden Gate University. | | | | | Qualifications | | | | | ✓ | Extensive financial expertise | | | | ✓ | Significant public company board and senior management experience | | | | Other Public Company Board Service | | | | | + | Funko, Inc. (since August 2017) | | | | + | Farfetch Limited (August 2020 – December 2023) | | | | + | Casper Sleep Inc. (July 2019 – January 2022) | | | | + | XO Group Inc. (November 2014 – December 2018) | | | | + | Rightside Group, Ltd. (August 2014 – July 2017) | | | | + | CafePress Inc. (May 2012 – May 2015) | | | | + | Blue Nile, Inc. (May 2001 – November 2011) | | | | Other Board Service | | | | | + | D.A. Davidson Companies (since January 2018) | | |
Biographies of Our Board Members
| | | Dan Jedda | | | | | Director Since: | March 2024 | | Dan Jedda has served as Chief Financial Officer of Roku, Inc., a leading television streaming platform, since May 2023. From December 2020 to April 2023, he served as Chief Financial Officer at Stitch Fix, Inc., an online personal styling service. Prior to Stitch Fix, Mr. Jedda worked at Amazon.com, Inc. from June 2005 to December 2020, most recently as Vice President and Chief Financial Officer for Digital Video (including Amazon Studios), Digital Music and the Advertising and Corporate Development organizations. Mr. Jedda holds a B.S. in Accounting and Finance from the University of St. Thomas and an M.B.A. from the University of Minnesota. | | | | | Qualifications | | | | | ✓ | High-growth technology experience, including over 15 years at Amazon.com | | | | ✓ | Extensive financial expertise | | |
Biographies of Our Board Members
| | | Sharon Rothstein | | | | | Director Since: | March 2019 | | | | Committees: | Compensation | | | | | Nominating & Corporate Governance | | Sharon Rothstein has served as an Operating Partner at Stripes Group, a growth equity firm, since October 2018. Prior to joining Stripes Group, she served as Executive Vice President, Global Chief Marketing Officer of Starbucks Corporation from April 2013 to February 2018. From May 2009 to March 2013, Ms. Rothstein served as Senior Vice President of Marketing at Sephora, a specialty beauty retailer. Prior to joining Sephora, Ms. Rothstein held senior marketing and brand management positions with Godiva Chocolatier, Starwood Hotels and Resorts, Nabisco Biscuit Company and Procter & Gamble. Ms. Rothstein holds a Bachelor of Commerce from the University of British Columbia and an M.B.A. from the University of California, Los Angeles. | | | | | Qualifications | | | | | ✓ | Significant marketing expertise from positions at iconic consumer-facing companies | | | | ✓ | Leadership experience in key restaurant and hospitality categories | | | | Other Public Company Board Service | | | | | + | Block, Inc. (since January 2022) | | | | + | InterContinental Hotels Group PLC (since June 2020) | | | | + | Afterpay Limited (from June 2020 until its acquisition by Block, Inc. in January 2022) | | |
Biographies of Our Board Members
| | | Jeremy Stoppelman, CEO | | | | | Director Since: | September 2005 | | Jeremy Stoppelman is our co-founder and has served as our Chief Executive Officer since our inception in 2004. Prior to founding Yelp, Mr. Stoppelman held various engineering roles at PayPal, Inc., an online payment company, from February 2000 to June 2003, most recently serving as Vice President of Engineering. Prior to PayPal, Mr. Stoppelman was a software engineer at Excite@Home, an Internet company, from August 1999 to January 2000. He holds a B.S. in Computer Engineering from the University of Illinois Urbana-Champaign. | | | | | Qualifications | | | | | ✓ | Perspective gained from his experience as one of our co-founders and our Chief Executive Officer | | | | ✓ | Significant experience in the Internet industry | | |
Biographies of Our Board Members
| | | Chris Terrill | | | | | Director Since: | March 2022 | | | | Committees: | Nominating & Corporate Governance | | Chris Terrill most recently served as Executive Co-Chairman of Z-Work Acquisition Corp., a special purpose acquisition company investing in the work technology business, from February 2021 until its wind-down in December 2022. He has also served as an advisor to Range Ventures LLC, a Denver-area venture capital firm, since July 2020. Mr. Terrill previously served as Chief Executive Officer and director of ANGI Homeservices Inc. (now Angi Inc.), a digital marketplace for home services, from September 2017 to November 2018. Mr. Terrill served as Chief Executive Officer of HomeAdvisor, a wholly owned subsidiary of IAC Inc. that merged with Angie’s List in September 2017 to form ANGI Homeservices, beginning in May 2011. Prior to joining HomeAdvisor, he held senior marketing roles at Nutrisystem.com, Blockbuster.com and Match.com. Mr. Terrill holds a B.S. from the University of Texas at Austin and an M.B.A. from University of Houston. | | | | | Qualifications | | | | | ✓ | Leadership experience in key home services category | | | | ✓ | Significant marketing experience from senior positions at various companies | | | | Other Public Company Board Service | | | | | + | Anywhere Real Estate Inc. (since July 2016) | | | | + | Vacasa, Inc. (since November 2020) | | | | + | Z-Work Acquisition Corp. (February 2021 – December 2022) | | | | + | Terminix Global Holdings, Inc. (July 2021 – October 2022) | | | | + | Porch Group Inc. (January 2021 – April 2022) | | | | + | Angi Inc. (September 2017 – November 2018) | | |
Biographies of Our Board Members
| | | Tony Wells | | | | | Director Since: | October 2020 | | | | Committees: | Compensation | | Tony Wells has served as a Venture Partner at AZ-VC, Arizona’s largest venture capital fund, since April 2024. Mr. Wells previously served as Chief Media Officer of Verizon Communications Inc., one of the world’s leading providers of technology and communications services, from September 2021 to March 2023. From July 2020 to September 2021, he served as Chief Brand Officer of USAA, a family of companies that provides insurance, banking and other services to current and former members of the U.S. military and their families. Mr. Wells also served in several other senior marketing roles at USAA from November 2017 to July 2020, including Senior Marketing Officer for both USAA Bank and USAA Life Insurance Company. Prior to joining USAA, Mr. Wells served as Senior Vice President, Chief Marketing Officer for North America for Schneider Electric SA, an energy management and automation company, from October 2014 to November 2017. Mr. Wells also served in the chief marketing officer role at ADT Security Services and 24 Hour Fitness USA, Inc. His career has also spanned the automotive, home, financial services and retail industries at companies including Visa USA, Interpublic Group of Companies, SFX Sports Group, The Mills Corporation and Nissan North America. Mr. Wells served as an infantry officer in the U.S. Marine Corps, and holds a B.S. from the United States Naval Academy and a Certificate in Business Administration from The Johns Hopkins University Carey Business School. | | | | | Qualifications | | | | | ✓ | Extensive marketing, operations, data analytics and strategy experience | | | | ✓ | Leadership experience in multiple major business categories, including our key home services category | | | | Other Public Company Board Service | | | | | + | Nexstar Media Group, Inc. (since July 2023) | | |
Considerations in Evaluating Director Nominees
Considerations in Evaluating Director Nominees The Nominating Committee believes that candidates for director should have certain minimum qualifications, including being able to read and understand basic financial statements, being over 21 years of age and having the highest personal integrity and ethics. The Nominating Committee also considers such factors as possessing relevant expertise on which to be able to offer advice and guidance to management, having sufficient time to devote to the affairs of the Company, demonstrated excellence in his or her field, having the ability to exercise sound business judgment and having the commitment to rigorously represent the long-term interests of our stockholders. However, the Nominating Committee retains the right to modify these qualifications from time to time. Candidates for director are reviewed in the context of the current composition of the Board, the operating requirements of the Company and the long-term interests of the stockholders. In conducting this assessment, the Nominating Committee typically considers diversity, age, skills and such other factors as it deems appropriate given the current needs of the Board and the Company, to maintain a balance of knowledge, experience and capability. The Nominating Committee does not have a formal policy with respect to diversity; however, the Board and the Nominating Committee believe that it is essential that the Board members represent diverse viewpoints. Accordingly, the Nominating Committee may consider such factors as diversity of gender, race, professional experience, and differences in viewpoints and skills. In the case of incumbent directors being considered as candidates for reelection, the Nominating Committee reviews such directors’ overall service to the Company during their current term, including the number of meetings attended, level of participation, quality of performance and any other relationships and transactions that might impair such directors’ independence. In the case of new director candidates, the Nominating Committee also determines whether the nominee is independent for NYSE purposes, which determination is based upon NYSE listing standards, applicable SEC rules and regulations, our additional independence factors and the advice of counsel, if necessary. The Nominating Committee meets to discuss and consider candidates’ qualifications and then selects nominee(s) for recommendation to the Board by majority vote. To identify candidates for Board membership, the Nominating Committee uses its network of contacts to compile a list of potential candidates, but may also engage, if it deems appropriate, a professional search firm. For example, the Nominating Committee engaged Heidrick & Struggles, a nationally recognized director search firm, to assist with our ongoing Board refreshment process in 2023, as described below. The Nominating Committee also conducts any appropriate and necessary inquiries into the backgrounds and qualifications of possible candidates after considering the function and needs of the Board. At this time, the Nominating Committee does not have a policy with regard to the consideration of director candidates recommended by stockholders and will evaluate such candidates on a case-by-case basis. The Nominating Committee believes that it is in the best position to identify, review, evaluate and select qualified candidates for Board membership, based on the comprehensive criteria for Board membership approved by the Board.
Director Compensation
Director Compensation
2023 Director Compensation Arrangements
2023 Director Compensation Arrangements Our Compensation Committee periodically reviews and assesses non-employee director pay practices, typically with the assistance of an independent compensation consultant. In the first quarter of 2023, our Compensation Committee conducted a full evaluation of Board compensation in consultation with Compensia, Inc. (“Compensia”), an independent national compensation consulting firm that is engaged by, and reports directly to, the Compensation Committee. To provide a comparative framework for the Compensation Committee’s evaluation, Compensia provided a compensation analysis consisting of board compensation data from the same peer group used by the Compensation Committee for executive compensation purposes. After considering this market data, as well as the time and responsibility requirements of the various Board roles and committees, our Compensation Committee recommended, and the Board approved, the non-employee director compensation arrangements described below effective as of January 1, 2023 (the “2023 Director Compensation Program”). Prior to the Compensation Committee’s approval of the 2023 Director Compensation Program, there had been no changes to our non-employee director compensation program since those approved by the Compensation Committee in late 2019. The 2023 Director Compensation Program reflected the following changes to the annual cash fees provided under our previous non-employee director compensation program:
2023 Director Compensation Arrangements
| Board or Committee Role | 2022 | 2023 | | Non-employee director | $32,000 | $40,000 | | Chairperson of the Board | $30,000 | $45,000 | | Chairperson of the Nominating Committee | $7,000 | $7,500 |
2023 Director Compensation Arrangements
In addition, the 2023 Director Compensation Program made the following changes to the equity compensation provided under our previous non-employee director compensation program: (a) a change to the annual RSU award to increase the target grant value from $175,000 to $205,000 and structure vesting to occur after one year (or at the next annual stockholder meeting) rather than over four years; (b) a change to deliver the initial equity grant for new directors 100% in RSUs that vest annually over three years, rather than a combination of stock options and RSUs; and (c) elimination of the biennial option award covering 10,000 shares of our common stock. The changes to our non-employee director compensation program were intended to align closer with general market practices for non-employee director compensation and to acknowledge the time and responsibility requirements of the Board roles and committees. As an employee of Yelp, Mr. Stoppelman, our Chief Executive Officer, does not receive any additional compensation for his service on the Board.
Director Compensation for the Year Ended December 31, 2023
Director Compensation for the Year Ended December 31, 2023 The following table shows, for the year ended December 31, 2023, certain information with respect to the compensation of our non-employee directors.
Director Compensation for the Year Ended December 31, 2023
| Name | Fees Earned or Paid in Cash ($) | Stock Awards (2)(3)(4) ($) | Total ($) | | Diane Irvine | —(1) | 312,597(5) | 312,597 | | Fred D. Anderson, Jr. | —(1) | 263,303(6) | 263,303 | | Christine Barone | —(1) | 253,456(7) | 253,456 | | Robert Gibbs | —(1) | 259,697(8) | 259,697 | | George Hu | 45,000 | 205,005(9) | 250,005 | | Sharon Rothstein | 47,600 | 205,005(9) | 252,605 | | Chris Terrill | —(1) | 247,160(10) | 247,160 | | Tony Wells | 45,000 | 205,005(9) | 250,005 |
Director Compensation for the Year Ended December 31, 2023
(1) The indicated non-employee director elected to receive the following cash fees he or she was otherwise entitled to receive in the form of an RSU award of equivalent value (calculated as set forth under “—Director Compensation Arrangements—Cash Compensation” above): (a) Ms. Irvine, $107,600; (b) Mr. Anderson, $59,000; (c) Ms. Barone, $49,000; (d) Mr. Gibbs, $56,500; and (e) Mr. Terrill, $42,600. The number of shares issued in lieu of cash fees was calculated based on the average closing price of our common stock on the NYSE over the two calendar months prior to grant; as a result, the grant date fair value of such awards varies from the fees provided for under our 2023 Director Compensation Program as described above. (2) The amounts reported here do not reflect the actual economic value realized by our directors. In accordance with SEC rules, this column represents the aggregate grant date fair value of shares underlying stock awards granted during the year ended December 31, 2023, calculated in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 (“ASC 718”). The grant date fair values of RSU awards are calculated based on the closing price of our common stock on the date of grant. (3) The aggregate number of unvested shares subject to outstanding RSU awards held by each non-employee director as of December 31, 2023 was as follows: (a) 12,830 shares of common stock for Ms. Irvine; (b) 12,419 shares of common stock for Mr. Anderson; (c) 12,688 shares of common stock for Ms. Barone; (d) 12,388 shares of common stock for Mr. Gibbs; (e) 11,931 shares of common stock for Mr. Hu; (f) 11,931 shares of common stock for Ms. Rothstein; (g) 12,805 shares of common stock for Mr. Terrill; and (h) 12,367 shares of common stock for Mr. Wells. As discussed in footnote 1 to the table above, Mses. Irvine and Barone and Messrs. Anderson, Gibbs and Terrill each elected to receive the cash fees he or she was otherwise entitled to receive in 2023 in the form of an RSU award of equivalent value. (4) The aggregate number of shares subject to outstanding stock options held by each non-employee director as of December 31, 2023 was as follows: (a) 40,000 shares of common stock for Ms. Irvine; (b) 30,000 shares of common stock for Mr. Anderson; (c) 24,600 shares of common stock for Ms. Barone; (d) 40,000 shares of common stock for Mr. Gibbs; (e) 29,950 shares of common stock for Mr. Hu; (f) 29,950 shares of common stock for Ms. Rothstein; (g) 10,150 shares of common stock for Mr. Terrill; and (h) 21,550 shares of common stock for Mr. Wells. (5) Consists of: (a) $87,700, which represents the grant date fair value of the RSUs Ms. Irvine initially received in lieu of cash board fees for 2023; (b) $19,892, which represents the grant date fair value of the RSUs Ms. Irvine received in lieu of the incremental cash board fees she became entitled to following the adoption of the 2023 Director Compensation Program, adjusted to account for Mr. Gibbs’s replacement of Ms. Irvine as the Chairperson of the Nominating Committee as of March 10, 2023; and (c) $205,005, which represents the grant date fair value of Ms. Irvine’s Annual RSU Award. (6) Consists of: (a) $50,251, which represents the grant date fair value of the RSUs Mr. Anderson initially received in lieu of cash board fees for 2023; (b) $8,048, which represents the grant date fair value of the RSUs Mr. Anderson received in lieu of the incremental cash board fees he became entitled to following the adoption of the 2023 Director Compensation Program; and (c) $205,005, which represents the grant date fair value of Mr. Anderson’s Annual RSU Award. (7) Consists of: (a) $40,403, which represents the grant date fair value of the RSUs Ms. Barone initially received in lieu of cash board fees for 2023; (b) $8,048, which represents the grant date fair value of the RSUs Ms. Barone received in lieu of the incremental cash board fees she became entitled to following the adoption of the 2023 Director Compensation Program; and (c) $205,005, which represents the grant date fair value of Ms. Barone’s Annual RSU Award. (8) Consists of: (a) $42,970, which represents the grant date fair value of the RSUs Mr. Gibbs initially received in lieu of cash board fees for 2023; (b) $11,723, which represents the grant date fair value of the RSUs Mr. Gibbs received in lieu of the incremental cash board fees he became entitled to following the adoption of the 2023 Director Compensation Program, adjusted to account for Mr. Gibbs’s replacement of Ms. Irvine as the Chairperson of the Nominating Committee as of March 10, 2023; and (c) $205,005, which represents the grant date fair value of Mr. Gibbs’s Annual RSU Award. (9) The amount represents the grant date fair value of the Annual RSU Award received by each of Ms. Rothstein and Messrs. Hu and Wells. (10) Consists of: (a) $34,107, which represents the grant date fair value of the RSUs Mr. Terrill initially received in lieu of cash board fees for 2023; (b) $8,048, which represents the grant date fair value of the RSUs Mr. Terrill received in lieu of the incremental cash board fees he became entitled to following the adoption of the 2023 Director Compensation Program; and (c) $205,005, which represents the grant date fair value of Mr. Terrill’s Annual RSU Award.
ELECTION OF DIRECTORS
ELECTION OF DIRECTORS As recommended by the Nominating Committee, the Board’s nominees for election as directors are Fred D. Anderson, Jr., Christine Barone, Robert Gibbs, Diane Irvine, Dan Jedda, Sharon Rothstein, Jeremy Stoppelman, Chris Terrill and Tony Wells, whose terms expire at the Annual Meeting. If elected at the Annual Meeting, each of these nominees would serve until the 2025 Annual Meeting of Stockholders and until his or her successor has been duly elected and qualified, or, if sooner, until the director’s death, resignation or removal. Each of the nominees is currently a member of our Board. Mr. Jedda was appointed to the Board to fill a vacancy and has not previously been elected by our stockholders. The Nominating Committee recommended Mr. Jedda’s initial election to the Board in connection with its continuation of the refreshment process it began in late 2018, and his candidacy was recommended by a third-party search firm, as described above in the section titled “Information Regarding the Board of Directors and Corporate Governance—Corporate Governance—Board Composition—Board Refreshment.” Shares represented by executed proxies will be voted, unless otherwise directed, for the election of the nine nominees named above. If any nominee becomes unavailable for election as a result of an unexpected occurrence, shares that would have been voted for that nominee will instead be voted for the election of a substitute nominee proposed by the Board on the recommendation of the Nominating Committee. Each person nominated for election has agreed to serve if elected. Our management has no reason to believe that any nominee will be unable to serve.
2023 Pay Highlights
2023 Pay Highlights •We increased Mr. Saldanha’s base salary by 6% primarily based on internal pay equity considerations. We did not increase the base salary of any other named executive officer for 2023. •We increased the target total value of Mr. Eaton’s equity compensation opportunity by 13% primarily based on internal pay equity considerations. We did not increase the target total value of any other named executive officer’s equity compensation opportunity for 2023. •Performance-vesting RSUs (“Performance Equity Awards”) comprised 50% of the target total value of each named executive officer’s equity compensation opportunity. •We structured 50% of the Performance Equity Awards to vest based on the relative performance of our total stockholder return over a three-year period (the “TSR RSUs”), combining a longer-term performance period and relative performance metric. •The TSR RSUs require above-median performance for target payout and cap payout at target if absolute TSR is negative. •The remaining 50% of the Performance Equity Awards vest based on annual net revenue and adjusted EBITDA performance goals (the “Financial Performance RSUs”), which are key annual financial metrics aligned with our long-term strategy. •Our annual cash incentive program was based on pre-set corporate performance goals (the “Performance Bonus Plan”). •95% of the target total value of the direct compensation we awarded to our Chief Executive Officer was “at risk”; an average of 89% of the target total value of the direct compensation awarded to our other named executive officers was at risk.
Executive Compensation Governance
| ☑ | What We Do | | ✓ | Maintain a completely independent Compensation Committee | | ✓ | Retain an independent compensation consultant | | ✓ | Structure a substantial majority of total compensation as long-term equity awards | | ✓ | Set annual and long-term incentive targets based on clearly disclosed, objective performance measures | | ✓ | Grant performance-based long-term equity awards that constitute a meaningful portion of equity compensation | | ✓ | Employ our executive officers at will | | ✓ | Provide reasonable change in control and severance benefits that do not exceed the executive officer’s annual cash compensation (i.e., base salary + cash incentive amount, if any) at the time of termination | | ✓ | Maintain stock ownership guidelines for executive officers and directors | | ✓ | Subject incentive-based cash and equity compensation to a clawback policy | | ✓ | Engage with our stockholders and make changes to our compensation program when appropriate |
Executive Compensation Governance
| ☒ | What We Do Not Do | | ✗ | No guaranteed salary increases, guaranteed cash incentives or guaranteed equity compensation | | ✗ | No strict benchmarking of compensation | | ✗ | No “single-trigger” change in control cash payments or guaranteed equity acceleration | | ✗ | No excise tax “gross-ups” for change in control or termination benefits | | ✗ | No excessive perquisites or personal benefits | | ✗ | No pension arrangements, defined benefit retirement programs or non-qualified deferred compensation plans | | ✗ | No hedging, pledging or other inherently speculative transactions in our equity securities | | ✗ | No stock option exchanges or repricings without stockholder approval |
Pay-for-Performance Alignment
Pay-for-Performance Alignment Our 2023 executive compensation program was heavily weighted towards at-risk compensation. Our Compensation Committee believes that our combination of appropriate base salary, long-term equity awards, including Performance Equity Awards, and the Performance Bonus Plan appropriately align the interests of our executive team with our performance and the interests of our stockholders: •the value of the TSR RSUs depends on the performance of our total stockholder return over a three-year period relative to that of the other companies in the Russell 2000 Index, focusing management on longer-term performance and incorporating a relative performance metric; •the Financial Performance RSUs and cash incentive opportunities under the Performance Bonus Plan would have value only to the extent that we achieved certain predetermined performance goals, based on performance measures aligned with our long-term strategy; and •RSUs, including any Performance Equity Awards that become eligible to vest based on our performance, will not retain their expected value if our shares lose value. For the pay-versus-performance disclosure prescribed by SEC rules, which does not necessarily reflect the way our Compensation Committee views the alignment between our performance and our named executive officers’ compensation, see the section entitled “—Pay versus Performance” below. In late January 2023, our Compensation Committee approved a target total direct compensation mix (i.e., base salary + target cash incentive + target total value of equity compensation) for our named executive officers that reflected this alignment:
Base Salary
Base Salary We provide a base salary as a fixed source of compensation for our executive officers, allowing them a degree of certainty in the face of having a substantial portion of their compensation “at risk” in the form of equity awards with value generally contingent on stock price appreciation and, in the case of Performance Equity Awards, achievement of performance goals. Our Compensation Committee recognizes the importance of base salaries as an element of compensation that helps to attract and retain highly qualified executive talent. Our Compensation Committee does not apply specific formulas in setting initial salary levels or determining adjustments from year to year. Rather, our Compensation Committee may consider a range of factors, including: •the executive officer’s anticipated responsibilities and individual experience; •the value of the other elements of the executive officer’s compensation package; •internal pay equity among our executive officers; and •negotiations with the executive officer. In January 2023, our Compensation Committee approved a 2023 annual base salary for each named executive officer, as set forth in the following table:
Cash Incentive Compensation
Cash Incentive Compensation 2023 Annual Cash Incentive Opportunity. In 2022, our Compensation Committee adopted the Performance Bonus Plan, which provides the opportunity for our executive officers to earn annual cash incentives based on the achievement of designated corporate performance goals. The Compensation Committee believes that providing an annual cash incentive opportunity helps drive the achievement of key short-term performance goals as well as attract and retain talented individuals in the competitive market for technology executives. 2023 Target Cash Incentive Opportunity. To establish each named executive officer’s target cash incentive opportunity for 2023, which is expressed as a percentage of base salary, the Compensation Committee considered peer company practices from Compensia’s 2023 executive compensation analysis, the value of the other elements of the executive officer’s compensation package, and internal pay equity among our executive officers. Based on its consideration of these factors, our Compensation Committee determined to maintain a target cash incentive opportunity for each named executive officer equal to 50% of their respective base salaries. Although the target cash incentive opportunity for certain named executive officers was substantially lower than the opportunities for comparable executive officers at our peer companies — including for Mr. Stoppelman, whose target opportunity was below the 10th percentile for the chief executive officer position — our Compensation Committee determined that it would provide a sufficient short-term cash incentive while maintaining our emphasis on equity. The Compensation Committee also determined that each named executive officer’s target cash incentive opportunity should be the same to maintain internal pay equity. 2023 Performance Bonus Plan Goals and Achievement. For 2023, each named executive officer’s annual cash incentive was determined based on our level of achievement of two corporate performance goals — net revenue and adjusted EBITDA — which are key short-term business metrics aligned with our strategy. Payouts were capped at 200% of target. The Compensation Committee approved the threshold, target and stretch performance levels for each corporate performance goal in January 2023 with the conviction that they were appropriately challenging and demonstrated significant rigor, considering our financial forecasts and business outlook at the time as well as our historical performance. The performance levels for the 2023 corporate performance goals and the associated achievement of each goal are set forth in the following table:
Cash Incentive Compensation
| | Corporate Performance Goal | 2022 Result | Business Outlook(1) | Performance Levels(2) | | | | | | Weighting | | | | Threshold (25%) | Target (100%) | Stretch(3) | 2023 Result | Payout | | 50% | 2023 Net Revenue | $1.19B | $1.29B - $1.31B | $1.26B | $1.32B | $1.40B | $1.34B | 126.7% | | 50% | 2023 Adjusted EBITDA(4) | $270M | $290M - $310M | $270M | $310M | $350M | $330M | 138.4% | | Overall Payout | | | | | | | | 132.5% |
Cash Incentive Compensation
(1) Business outlook as announced on February 9, 2023. (2) Payouts for performance between these specified performance levels are linearly interpolated, with performance below the threshold performance level resulting in a 0% payout. Moreover, if the threshold performance level for one corporate performance goal was not achieved, the maximum payout percentage for the other corporate performance goal was capped at 100%, notwithstanding achievement in excess of such goal’s target performance level. (3) The maximum payout percentages for the 2023 net revenue goal and the 2023 adjusted EBITDA goal were 225% and 175%, respectively. (4) For purposes of our Performance Bonus Plan, adjusted EBITDA is defined as our non-GAAP adjusted EBITDA financial measure as reported in our periodic filings with the SEC (see Appendix A for a detailed definition of adjusted EBITDA and a reconciliation of this non-GAAP metric to net income). 2023 Cash Incentive Payout. The payouts under the Performance Bonus Plan for 2023 to the named executive officers were as follows:
Cash Incentive Compensation
| Name | 2023 Target Cash Incentive | | 2023 Actual Cash Incentive | | Percent of 2023 Target Cash Incentive | | Jeremy Stoppelman | | 250,000 | | 331,353 | 132.5% | | David Schwarzbach | | 250,000 | | 331,353 | 132.5% | | Sam Eaton(1) | £ | 187,083 | £ | 247,961 | 132.5% | | Jed Nachman | | 250,000 | | 331,353 | 132.5% | | Craig Saldanha | | 237,500 | | 314,785 | 132.5% |
Cash Incentive Compensation
(1) Mr. Eaton’s actual cash incentive for 2023 of £247,961 represents $316,225 based on the exchange rate in effect on the payment date. Craig Saldanha Earned Retention Bonus. In February 2022, in order to incentivize Mr. Saldanha to join the Company, the Compensation Committee approved a one-time cash retention bonus of $100,000, subject to Mr. Saldanha remaining employed by the Company for one year from his start date in February 2022. The retention bonus was earned and paid to Mr. Saldanha in February 2023 following his satisfaction of this requirement. The Compensation Committee believed this bonus was necessary and appropriate to help secure Mr. Saldanha’s employment by offsetting the compensation opportunities he would forfeit as a result of leaving his former employer.
Equity Compensation
Equity Compensation The primary component of our executive compensation program is equity awards. Our Compensation Committee believes this approach has allowed us to attract and retain key talent in our industry and aligned our executive team’s focus and contributions with our long-term interests and those of our stockholders. In determining the size, form and material terms of executive equity awards, our Compensation Committee may consider, among other things: •the executive officer’s total compensation opportunity; •the need to create a meaningful opportunity for reward predicated on the creation of long-term stockholder value; •equity awards granted to similarly situated executive officers at our peer group companies; •individual accomplishments; •any recent changes to the executive officer’s job duties; •the executive officer’s existing equity award holdings (including the unvested portion of such awards); •internal pay equity among our executive officers; •the cost associated with equity awards, including both stockholder dilution and compensation expense; and •feedback received from our stockholder outreach discussions. Equity Compensation Mix. We deliver equity compensation to our executive officers through a mix of Performance Equity Awards and service-vesting RSUs, with the target total value of each executive officer’s awards split evenly between them. This target mix reflects the most prevalent mix used by our peer group companies and the preferred combination expressed by our investors during our stockholder outreach discussions. In 2023, our Compensation Committee continued to believe that this target mix of Performance Equity Awards and RSUs would best incentivize each individual executive officer and awarded equity compensation with the target total value evenly split between Performance Equity Awards and RSUs to each named executive officer. All Performance Equity Awards are subject to the achievement of one or more performance goals, and Performance Equity Awards with one-year performance periods are also subject to our standard four-year vesting schedule for RSUs, allowing them to serve as a retention tool in addition to tying executive pay directly to Company performance. Because RSUs have value even in the absence of stock appreciation, RSUs help us retain and incentivize employees during periods of market volatility. RSUs typically vest in equal quarterly installments over four years and, as a result, our Compensation Committee believes they are also an effective tool to motivate our executive officers to build sustainable stockholder value. In addition, RSU awards cover fewer shares of common stock than stock option awards of equivalent grant date fair value, which helps manage the dilutive effect of our equity compensation program. Target Total Value of Equity Compensation. In January 2023, our Compensation Committee reviewed the then-current equity compensation opportunities and holdings of our named executive officers. Using the 2023 peer group equity compensation data as a general reference, and considering the factors described in the bullet points above, our Compensation Committee approved awards consisting of RSUs and Performance Equity Awards covering the following numbers of shares to our named executive officers:
Equity Compensation
| | Target Total Value(1) | Increase from 2022 Target Total Value | | Performance Equity Awards at Target Achievement Level(2) | | | Name | | | RSUs | Financial Metrics | 3-Year Relative TSR | | Jeremy Stoppelman | $8,500,000 | —% | 141,667 | 70,834 | 70,834 | | David Schwarzbach | $4,100,000 | —% | 68,334 | 34,167 | 34,167 | | Sam Eaton(3) | $4,100,000 | 13% | 68,334 | 34,167 | 34,167 | | Jed Nachman | $4,250,000 | —% | 70,834 | 35,417 | 35,417 | | Craig Saldanha | $3,000,000 | N/A(4) | 50,000 | 25,000 | 25,000 |
Equity Compensation
(1) “Target total value” of equity compensation represents the value used by our Compensation Committee to calculate the number of shares subject to each named executive officer’s equity awards at the target performance level, with the number of shares subject to each award calculated based on the closing price of our common stock on the grant date. This target total value differs from the value reflected in the Summary Compensation Table, which represents the aggregate grant date fair value of each named executive officer’s equity awards calculated in accordance with ASC 718. While the grant date fair value under ASC 718 for RSUs and the Financial Performance RSUs is also calculated based on the closing price of our common stock on grant date, the grant date fair value for the TSR RSUs is calculated using a Monte Carlo model. In addition, the grant date fair value for both the Financial Performance RSUs and the TSR RSUs is calculated assuming the probable outcome of the performance conditions. (2) The 2023 Performance Equity Awards covered the following numbers of shares at each achievement level:
Equity Compensation
| Name | Financial Performance RSUs | | | TSR RSUs | | | | | Threshold | Target | Maximum | Threshold | Target | Maximum | | Jeremy Stoppelman | 17,709 | 70,834 | 141,668 | 35,417 | 70,834 | 141,668 | | David Schwarzbach | 8,542 | 34,167 | 68,334 | 17,084 | 34,167 | 68,334 | | Sam Eaton | 8,542 | 34,167 | 68,334 | 17,084 | 34,167 | 68,334 | | Jed Nachman | 8,855 | 35,417 | 70,834 | 17,709 | 35,417 | 70,834 | | Craig Saldanha | 6,250 | 25,000 | 50,000 | 12,500 | 25,000 | 50,000 |
Equity Compensation
(3) The increase to Mr. Eaton’s target total equity value was primarily based on internal pay equity considerations. (4) Mr. Saldanha was newly hired in 2022 and received time-vesting RSUs valued at $4.0 million as part of his new hire package. Our Compensation Committee determined that the size of these awards would address our retention goals as well as provide sufficient incentive opportunities to motivate our executive officers to achieve our business objectives. The relative size of the awards reflects our Compensation Committee’s desire for pay parity, while recognizing the scope and importance of each role’s responsibilities. For Mr. Stoppelman, in particular, although his target total cash compensation continued to be well below the median for chief executive officers at our peer group companies, the Compensation Committee determined not to increase the target total value of his equity compensation from his 2022 target total equity value. TSR RSUs. In accordance with the preference of our investors, our Compensation Committee tied the vesting of 50% of the target total value of the 2023 Performance Equity Awards to our relative total stockholder return over a three-year period to focus management on longer-term performance. A percentage of the target number of shares subject to the TSR RSUs, ranging from zero to 200%, will vest based on the percentile rank of our total stockholder return relative to that of the other companies in the Russell 2000 Index over the period beginning January 1, 2023 and ending December 31, 2025 (the “TSR Goal”). The Compensation Committee will calculate the percentage of the target shares, if any, that will vest (the “Earned Shares”) based on our level of achievement of the TSR Goal, as follows:
Equity Compensation
| | Threshold | Target | Stretch | | Percentile Rank | 25th | 55th | 75th | | Percent of Target Shares Earned | 50% | 100% | 200% |
Equity Compensation
Our total stockholder return for the period, as well as the total stockholder return of the other companies in the Russell 2000 Index, will be calculated based on the average closing price of each company’s stock over the last 20 trading days of the performance period compared to the average closing price over the first 20 trading days of the performance period. In the event that our absolute total stockholder return for the performance period is below zero, the Earned Shares may not exceed 100% of the target shares. The Compensation Committee will make the final determination of our level of achievement of the TSR Goal, as well as the number of Earned Shares, as soon as administratively practicable following the end of the three-year performance period, but no later than March 15, 2026. The Earned Shares, if any, will fully vest (a) on February 20, 2026 if the Compensation Committee has made its determination on or prior to that date, or (b) on March 15, 2026, in each case subject to the applicable executive officer’s continued service as of such vesting date. Financial Performance RSUs. The Financial Performance RSUs, which represented the remaining 50% of the target total value of the 2023 Performance Equity Awards, were subject both to the achievement of performance goals for annual financial metrics and our standard four-year vesting schedule for RSUs. The one-year performance period reflects the predominant practice of companies in our industry due to the difficulty for such companies of developing durable longer-term financial goals or repeatable strategic goals. As in previous years, the performance goals for the Financial Performance RSUs were based on our annual net revenue and adjusted EBITDA, which are key short-term business metrics aligned with our strategy. A percentage of the target number of shares subject to the Financial Performance RSUs, ranging from zero to 200%, would become eligible to vest based on our level of achievement of the net revenue and adjusted EBITDA performance goals measured with reference to the threshold, target and stretch performance levels established for the 2023 Performance Bonus Plan. Our Compensation Committee was required to make the final determination of our level of achievement of the performance goals, as well as the number of shares subject to the Financial Performance RSUs that would become eligible to vest (which we refer to as the “Eligible Shares”), no later than March 15, 2024. The percentage of the target shares that would become Eligible Shares would be calculated in the same manner as the payout percentage under the 2023 Performance Bonus Plan. On March 15, 2024, the Eligible Shares, if any, would vest to the extent that the applicable executive officer had met the service-based vesting schedule as of such date. Thereafter, the Eligible Shares would continue vesting in accordance with the service-based vesting schedule, subject to the applicable executive officer’s continued service as of each such vesting date. On March 7, 2024, our Compensation Committee evaluated the level of achievement of the performance goals based on the Company’s reported financial results for the year ended December 31, 2023:
Equity Compensation
| | Actual Performance | Achievement Level | | Performance Goal | | | | 2023 Net Revenue | $1.34B | 126.7% | | 2023 Adjusted EBITDA | $330M | 138.4% |
Equity Compensation
Based on the Company’s performance in 2023, our Compensation Committee determined that 132.5% of the target shares subject to each executive officer’s respective Financial Performance RSUs would become Eligible Shares:
Equity Compensation
| Name | Eligible Shares | | Jeremy Stoppelman | 93,885 | | David Schwarzbach | 45,286 | | Sam Eaton | 45,286 | | Jed Nachman | 46,943 | | Craig Saldanha | 33,136 |
Equity Compensation
In accordance with the terms of the Financial Performance RSUs, 31.25% of these Eligible Shares vested on March 15, 2024. These shares represent the portion of the Eligible Shares that had met the service-based vesting schedule as of such date (i.e., the portion of such shares that would have vested on the four vesting dates in 2023 and the first quarter of 2024). The remaining Eligible Shares will continue vesting on a quarterly basis through the fourth quarter of 2026, subject to the applicable executive officer’s continued service as of each such vesting date.
Post-Employment and Change in Control Compensation
Post-Employment and Change in Control Compensation We maintain the Executive Severance Benefits Plan (the “Severance Plan”), which provides that our executive officers are eligible to receive certain cash severance upon an involuntary termination without cause, plus certain equity vesting acceleration if the involuntary termination occurs during the three months prior to a change in control or within the 12 months following a change in control, in each case subject to signing a release of claims and compliance with continuing obligations of confidentiality. For a summary of the material terms and conditions of the Severance Plan, see “Compensation Plans and Arrangements—Change in Control and Severance Arrangements—Severance Plan” below. Our Compensation Committee believed, based on the experience of its members, that such severance benefits are reasonable and allow our executive officers to focus on pursuing business strategies that, while in the best interests of our stockholders, may result in a disruption of their employment. Our Compensation Committee has also determined that the limited benefits upon which an involuntary termination not in connection with a change in control provided under the Severance Plan are in line with the benefits provided at the companies with whom we compete for talent and appropriate to encourage our executive officers to remain with us.
Summary Information Regarding 2024 Executive Compensation Program
| Name | Annual Base Salary | | Target Cash Incentive (% of Base Salary) | Target Total Equity Value(1) | | Target Total Compensation | | | | 2024 | % Change from 2023 | | 2024 | % Change from 2023 | 2024 | % Change from 2023 | | Jeremy Stoppelman | $600,000 | 20% | 50% | $7,650,045 | (10)% | $8,550,045 | (8)% | | David Schwarzbach | $550,000 | 10% | 50% | $3,690,036 | (10)% | $4,515,036 | (7)% | | Sam Eaton(2) | £430,290 | 15% | 50% | $3,690,036 | (10)% | $4,475,079 | (7)% | | Jed Nachman | $550,000 | 10% | 50% | $3,825,036 | (10)% | $4,650,036 | (7)% | | Craig Saldanha | $522,500 | 10% | 50% | $2,700,000 | (10)% | $3,483,750 | (6)% |
Summary Information Regarding 2024 Executive Compensation Program
| Name | RSUs | Financial Performance RSUs | | | TSR RSUs | | | | | | Threshold | Target | Maximum | Threshold | Target | Maximum | | Jeremy Stoppelman | 87,470 | 10,934 | 43,735 | 87,470 | 21,868 | 43,735 | 87,470 | | David Schwarzbach | 42,192 | 5,274 | 21,096 | 42,192 | 10,548 | 21,096 | 42,192 | | Sam Eaton | 42,192 | 5,274 | 21,096 | 42,192 | 10,548 | 21,096 | 42,192 | | Jed Nachman | 43,735 | 5,467 | 21,868 | 43,736 | 10,934 | 21,868 | 43,736 | | Craig Saldanha | 30,872 | 3,859 | 15,436 | 30,872 | 7,718 | 15,436 | 30,872 |
Role of Compensation Consultant
Role of Compensation Consultant Our Compensation Committee has the authority under its charter to engage its own advisors to assist in carrying out its responsibilities, and typically engages an independent compensation consultant to provide advice on current market practices and other compensation-related matters. We expect our Compensation Committee will continue this practice in the future to ensure that our executive compensation program is competitive and aligned with our strategy. As in past years, our Compensation Committee engaged Compensia to provide the executive compensation advisory services described below in preparation for its 2023 evaluation of our pay practices. From time to time, representatives of compensation consultants may attend meetings (or portions of meetings) of our Compensation Committee to present information and answer questions. The compensation consultant reports to our Compensation Committee rather than management, though representatives of the firm may meet with members of management and employees in our People Operations and Legal teams to collect data and obtain management’s perspective on compensation for our executive officers. Our Compensation Committee periodically assesses whether the work of its compensation advisors, including its compensation consultant, presents any conflict of interest, taking into consideration the independence factors required by the NYSE listing standards. Our Compensation Committee most recently evaluated Compensia’s independence in March 2024 and determined that Compensia’s work, including that of the individual compensation advisors it employs, as compensation consultant to our Compensation Committee has not created any conflict of interest and that it is satisfied with Compensia’s independence.
Role of Market Data
Role of Market Data To provide a comparative framework for its annual review of our executive compensation program, our Compensation Committee typically reviews the executive compensation practices of a public company peer group. Our Compensation Committee generally compiles our peer company group annually in the third quarter with the assistance of its independent compensation consultant. The compensation consultant then provides a compensation analysis to our Compensation Committee in the fourth quarter, which consists of executive compensation data from these companies’ most recent publicly available compensation disclosures. In some instances, our Compensation Committee may supplement publicly available data from the peer company group with relevant published survey sources. In the third quarter of 2022, in preparation for making executive compensation decisions for 2023, our Compensation Committee requested that Compensia develop an updated peer company group. Based on Compensia’s recommendations, our Compensation Committee approved the following peer company group:
Role of Market Data
| 1-800-FLOWERS.COM, Inc. (FLWS) | CarGurus, Inc. (CARG) | LendingClub Corp. (LC) | Revolve Group, Inc. (RVLV) | TripAdvisor, Inc. (TRIP) | | Angi Inc. (ANGI) | Cars.com Inc. (CARS) | LendingTree, Inc. (TREE) | Shutterstock, Inc. (SSTK) | Vacasa, Inc. (VCSA) | | Box, Inc. (BOX) | Envestnet, Inc. (ENV) | Overstock.com, Inc. (OSTK) | Squarespace, Inc. (SQSP) | Ziff Davis, Inc. (ZD) | | Bumble Inc. (BMBL) | Frontdoor, Inc. (FTDR) | Redfin Corporation (RDFN) | Stitch Fix, Inc. (SFIX) | ZipRecruiter, Inc. (ZIP) |
Role of Market Data
The companies included in the 2023 peer group were chosen based on generally meeting the industry, revenue, market capitalization and other criteria set forth in the table below as of August 2022. Our corresponding metrics are also included for comparison. Of the seven companies from our 2022 peer group that were not included in the 2023 peer group: •Cornerstone OnDemand, Inc., Mandiant, Inc., Proofpoint, Inc. and Stamps.com Inc. were removed because they were acquired (or were in the process of being acquired); •Groupon, Inc., was removed because it no longer met our market capitalization parameters; and •QuinStreet, Inc. and Quotient Technology Inc. were removed because they no longer met our revenue or market capitalization parameters.
Role of Market Data
| | Industries | Net Revenue Over Previous Four Quarters | Market Capitalization | Other Criteria (Preferred but Not Required) | | 2023 Peer Group Companies | Internet and Direct Marketing Retail | $636M – $2.4B | $599M – $6.7B | Positive revenue growth | | | Interactive Media and Services | | | | | | | $1.195B median | $2.1B median | Market cap >2.5x annual net revenue | | | Application and Systems Software | | | | | Yelp Inc. | Interactive Media and Services | $1.118B | $2.1B | 19% year-over-year revenue growth(1) | | | | | | Market cap 1.9x annual net revenue |
Role of Market Data
(1) For the four quarters ended June 30, 2022. Compensia subsequently provided a compensation analysis to our Compensation Committee consisting of a detailed market assessment and retention analysis for our named executive officers, as well as an overview of market trends. Our Compensation Committee reviewed Compensia’s analysis and market data to inform its evaluation of our executive compensation program for 2023; however, it did not benchmark to any particular level.
Other Compensation Policies
Other Compensation Policies Stock Ownership Guidelines. In December 2018, we adopted stock ownership guidelines for our executive officers and non-employee directors. The stock ownership guidelines require our Chief Executive Officer to attain ownership of the greater of (a) 30,000 shares or (b) shares valued at 3x his base salary, and require each of our other executive officers to attain ownership of the lesser of (w) shares valued at 1x his base salary or (x) 10,000 shares. Non-employee directors must attain ownership of the lesser of (y) 3x the director’s annual cash retainer for service on the Board, excluding committee fees, or (z) 2,000 shares. For purposes of our stock ownership guidelines, the calculation of an individual’s stock ownership includes the in-the-money value of vested, unexercised stock options, but does not include unvested RSUs or unearned Performance Equity Awards. Each executive officer and director must achieve this minimum position by the later of (x) December 5, 2021 or (y) three years after the individual became subject to the Stock Ownership Guidelines. Each of our named executive officers currently exceeds his ownership requirement under the Stock Ownership Guidelines and would continue to exceed his ownership requirement even excluding in-the-money vested, unexercised stock options. Equity Grant Timing. Equity awards for executive officers are typically approved by the Compensation Committee in the early part of each year as part of the Compensation Committee’s approval of our annual executive compensation program. The timing of our equity awards is not coordinated in a manner that intentionally benefits our executive officers; grant dates typically occur on dates determined in accordance with our policy regarding the timing of the grant of equity awards. This policy provides, among other things, that the grant date for equity awards approved by written consent will generally be the next of the following dates to occur on or after the date the consent is effective: the fifth business day of the month or tenth business day of the month. The grant date for equity awards approved at regularly scheduled meetings is typically the meeting date. On limited occasions, grant dates may occur later or outside of our annual grant cycle for new hires, promotions, retention and other purposes. Prohibition on Short Sales, Margin Purchases, Hedging and Pledging. Our Board has adopted an Insider Trading Policy that prohibits our employees and directors, among others, from engaging in the following transactions in the Company’s securities: •holding Yelp securities in a margin account or otherwise pledging Yelp securities as collateral; •short sales; •trading in puts, calls and other derivative securities; •other inherently speculative transactions in our equity securities; and •hedging, including through financial instruments such as prepaid variable forwards, equity swaps, collars and exchange funds. Prior to engaging in any transaction in the Company’s securities, certain individuals must first obtain pre-clearance of the transaction from the Company’s General Counsel, except with respect to trading pursuant to certain written plans, contracts, instructions or arrangements under Rule 10b5-1 that have been approved by the Company. These pre-clearance requirements apply to our executive officers and Board members, as well as (a) all employees at the vice president level and above, (b) employees on our Legal team and (c) such other employees as we may designate from time to time because of their access to sensitive Company information. Compensation Recovery Policies. In accordance with the new requirements of the SEC and NYSE listing standards, we adopted an Incentive Compensation Recoupment Policy (the “Clawback Policy”) in September 2023 that requires us to seek recovery of erroneously awarded incentive-based compensation received by our executive officers during any three-year period prior to the date the Company is required to prepare an accounting restatement due to material non-compliance with any financial reporting requirement under the securities laws, including any required accounting restatement that results from the correction of an error that is material to the previously issued financial statement(s), or that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period. In the event of a financial restatement, any executive officer of the Company would forfeit the amount of any incentive-based compensation paid during the three years preceding the date of the restatement that the Compensation Committee determines exceeds the amount the employee would have received had the revised financial statement(s) been used to determine the compensation, subject to certain exceptions. The Clawback Policy applies to incentive-based compensation received on or after October 2, 2023, as further described in the Clawback Policy. Our Clawback Policy is filed as an exhibit to our Annual Report. We also maintain a Policy for Recoupment of Incentive Compensation (the “Recoupment Policy”) that requires us to seek to recover certain incentive-based compensation from a current or former officer who is (or was at the relevant time) subject to Section 16 of the Exchange Act (an “Affected Officer”) if: (a) we are required to prepare an accounting restatement for any fiscal period commencing after the adoption of the Recoupment Policy due to material non-compliance with any financial reporting requirement and (b) it is determined that fraud, gross negligence or intentional misconduct by such Affected Officer contributed to the non-compliance underlying the restatement. The Recoupment Policy was adopted in January 2019 and applies to incentive-based compensation received prior to October 2, 2023.
Tax and Accounting Considerations
Tax and Accounting Considerations Deductibility of Executive Compensation. Under Section 162(m) (“Section 162(m)”) of the Internal Revenue Code (the “Code”), compensation paid to each of the Company’s “covered employees” that exceeds $1 million per taxable year is generally non-deductible unless the compensation qualifies for (i) certain grandfathered exceptions (including the “performance-based compensation” exception) for certain compensation paid pursuant to a written binding contract in effect on November 2, 2017 and not materially modified on or after such date or (ii) the reliance period exception for certain compensation paid by corporations that became publicly held on or before December 20, 2019. Although the Compensation Committee will continue to consider tax implications as one factor in determining executive compensation, the Compensation Committee also looks at other factors in making its decisions and retains the flexibility to provide compensation for the Company’s named executive officers in a manner consistent with the goals of the Company’s executive compensation program and the best interests of the Company and its stockholders, which may include providing for compensation that is not deductible by the Company due to the deduction limit under Section 162(m). The Compensation Committee also retains the flexibility to modify compensation that was initially intended to be exempt from the deduction limit under Section 162(m) if it determines that such modifications are consistent with the Company’s business needs. Taxation of “Parachute” Payments and Deferred Compensation. Sections 280G and 4999 of the Code provide that executive officers and directors who hold significant equity interests and certain other service providers may be subject to an excise tax if they receive payments or benefits in connection with a change in control that exceeds certain defined limits, and that the company, or a successor, may forfeit a deduction on the amounts subject to this additional tax. Section 409A of the Code also imposes additional significant taxes on the individual in the event that an executive officer, director or other service provider receives “deferred compensation” that does not meet the requirements of Section 409A of the Code. We have not historically, and did not in 2023, provide any executive officer, including any named executive officer, with a “gross up” or other reimbursement payment for any tax liability that he might owe as a result of the application of Sections 280G, 4999 or 409A of the Code, and we have not agreed, and are not otherwise contractually obligated to provide, any named executive officers with such a “gross up” or other reimbursement in connection with such taxes. Accounting Treatment. The accounting impact of our compensation programs is a factor that the Compensation Committee considers in determining the size and structure of our programs to ensure that our compensation programs are reasonable and in the best interests of the stockholders.
Compensation Risk Assessment
Compensation Risk Assessment As part of its annual review of our executive compensation program for 2023, as well as the compensation programs generally available to our employees, our Compensation Committee considered potential risks arising from our compensation policies and practices, as well as the management of these risks, in light of our overall business, strategy and objectives. Based on its review, the Compensation Committee concluded that our compensation programs are designed with an appropriate balance of risk and reward in relation to our overall business strategy and do not create risk that is reasonably likely to have a material adverse effect on the Company. In making this determination, the Compensation Committee considered our pay mix, base salaries, the attributes of our variable compensation programs, including our equity program, cash incentive opportunities and sales compensation plans, as well as our alignment with market pay levels and compensation program designs. The Compensation Committee believes the structure of our compensation program for executive officers does not encourage excessive or unnecessary risk-taking behavior. The base salary component does not encourage risk taking because it is a fixed amount. Although the cash incentive opportunity under the Performance Bonus Plan and the Financial Performance RSUs have short-term performance goals, the significant weighting of our executive compensation program towards long-term equity discourages short-term risk taking. Long-term equity awards (including Eligible Shares earned under Financial Performance RSUs) do not encourage unnecessary or excessive risk taking because the ultimate value of the awards is tied to our stock price and because awards are staggered and subject to long-term vesting schedules or performance periods to help ensure that executives have significant value tied to long-term stock price performance.
Summary Compensation Table
Summary Compensation Table The following table shows compensation awarded to, paid to or earned by our named executive officers for the years ended December 31, 2023, 2022 and 2021.
2023 Summary Compensation Table
2023 Summary Compensation Table
2023 Summary Compensation Table
| Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards(1) ($) | Non-Equity Incentive Plan Compensation(2) ($) | All Other Compensation ($) | Total ($) | | Jeremy Stoppelman | 2023 | 500,000 | — | 10,318,005 | 331,353 | 30,121(3) | 11,179,479 | | Chief Executive Officer | 2022 | 500,000 | — | 10,109,480 | 207,125 | 29,662 | 10,846,268 | | | 2021 | 500,000 | — | 9,516,849 | — | 27,827 | 10,044,676 | | David Schwarzbach | 2023 | 500,000 | — | 4,976,936 | 331,353 | 3,000(4) | 5,811,289 | | Chief Financial Officer | 2022 | 500,000 | — | 4,876,423 | 207,125 | 2,925 | 5,586,473 | | | 2021 | 450,000 | — | 4,078,672 | — | 1,575 | 4,530,247 | | Sam Eaton(5) | 2023 | 465,424 | — | 4,976,936 | 316,225 | — | 5,758,585 | | Chief Technology Officer | 2022 | 462,352 | — | 5,960,051 | 186,525 | — | 6,608,928 | | | 2021 | 500,000 | — | 3,860,801 | — | — | 4,360,801 | | Jed Nachman | 2023 | 500,000 | — | 5,159,017 | 331,353 | 17,564(6) | 6,007,933 | | Chief Operating Officer | 2022 | 500,000 | — | 5,054,740 | 207,125 | 113,672(7) | 5,875,538 | | | 2021 | 450,000 | — | 4,758,464 | — | 69,613(8) | 5,278,078 | | Craig Saldanha(9) | 2023 | 475,000 | 100,000 | 3,641,625 | 314,785 | 3,000(4) | 4,534,410 | | Chief Product Officer | 2022 | 398,077 | 625,000 | 3,583,558 | 186,413 | 800 | 4,793,848 |
2023 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 stock awards, calculated in accordance with ASC 718. The grant date fair values of RSU awards and Financial Performance RSUs are calculated based on the closing price of our common stock on the date of grant. Assumptions used in the calculation of the grant date fair value of the TSR RSUs are set forth in footnote 5 to the Grants of Plan-Based Awards Table below. The grant date fair value of the Performance Equity Awards assumes the probable outcome of the performance conditions (i.e., at 125.5% of target for the Financial Performance RSUs and 160.1% for the TSR RSUs). If the Performance Equity Awards were instead valued based on the maximum outcome of the performance conditions, the grant date fair values of such awards would increase as follows: from $6,067,995 to $8,500,080 for Mr. Stoppelman; from $2,926,916 to $4,100,040 for Mr. Schwarzbach; from $2,926,916 to $4,100,040 for Mr. Eaton; from $3,033,997 to $4,250,040 for Mr. Nachman; and from $2,141,625 to $3,000,000 for Mr. Saldanha. (2) The amounts reported here reflect payouts to the named executive officers under the Performance Bonus Plan for performance in 2023, which were paid in March 2024. (3) The amount reported consists of (a) $29,994 of incremental cost to the Company for assistance with personal matters provided by Mr. Stoppelman’s executive assistant and (b) $127 of incremental cost to the Company for certain online security services provided by the Company. See “—Compensation Discussion and Analysis—Executive Compensation Program Components—Employee Benefits” for more details. (4) The amount reported consists of Company-paid 401(k) plan matching contributions. These benefits were provided to the named executive officers on the same terms as provided to all of our regular full-time employees. (5) Mr. Eaton’s cash compensation was paid in British pounds. His base salary was converted using the average exchange rate for 2023 and his payout under the Performance Bonus Plan was converted using the exchange rate in effect on the payment date. (6) The amount reported consists of (a) $3,000 of Company-paid 401(k) matching contributions, (b) $14,500 of tax preparation payments paid pursuant to Mr. Nachman’s Repatriation Agreement and (c) $64 of incremental cost to the Company for certain online security services provided by the Company. (7) This amount reflects the addition of the following amounts to the amount previously reported: (a) $25,473 in tax equalization payments made on behalf of Mr. Nachman for 2022; and (b) $3,050 in payments related to the preparation of Mr. Nachman’s 2022 tax returns incurred after April 26, 2023, the date that our definitive proxy statement for our 2023 Annual Meeting of Stockholders was filed with the SEC. The tax equalization payments represent additional taxes on income imputed to Mr. Nachman as a result of our payment of certain other taxes on his behalf. (8) This amount reflects the addition of $1,550 to the amount previously reported, which represents payments related to the preparation of Mr. Nachman’s 2021 tax returns incurred after April 26, 2023. (9) Mr. Saldanha began his employment with the Company on February 14, 2022. Because Mr. Saldanha was not a named executive officer prior to 2022, SEC rules do not require his compensation for 2021 to be reported.
Pension Benefits
Pension Benefits Other than with respect to the 401(k) Plan, our employees, including our named executive officers, do not participate in any plan that provides for retirement payments and benefits, or payments and benefits that will be provided primarily following retirement.
Non-Qualified Deferred Compensation
Non-Qualified Deferred Compensation During the year ended December 31, 2023, our employees, including our named executive officers, did not contribute to, or earn any amounts with respect to, any defined contribution or other plan sponsored by us that provides for the deferral of compensation on a basis that is not tax-qualified.
Grants of Plan-Based Awards
Grants of Plan-Based Awards The following table shows certain information regarding grants of plan-based awards to our named executive officers during the year ended December 31, 2023.
Grants of Plan-Based Awards in the Year Ended December 31, 2023
Grants of Plan-Based Awards in the Year Ended December 31, 2023
Grants of Plan-Based Awards in the Year Ended December 31, 2023
| | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | | | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | | | All Other Stock Awards: Number of Shares of Stock or Units(3) (#) | Grant Date Fair Value of Stock and Option Awards ($) | | Name | Grant Date | Approval Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | | Jeremy Stoppelman | | | | | | | | | | | | | 1/25/23 | 1/25/23 | 62,500 | 250,000 | 500,000 | — | — | — | — | — | | | 1/25/23 | 1/25/23 | — | — | — | 17,709 | 70,834 | 141,668 | — | 2,665,838(4) | | | 1/25/23 | 1/25/23 | — | — | — | 35,417 | 70,834 | 141,668 | — | 3,402,157(5) | | | 1/25/23 | 1/25/23 | — | — | — | — | — | — | 141,667 | 4,250,010(6) | | David Schwarzbach | | | | | | | | | | | | | 1/25/23 | 1/25/23 | 62,500 | 250,000 | 500,000 | — | — | — | — | — | | | 1/25/23 | 1/25/23 | — | — | — | 8,542 | 34,167 | 68,334 | — | 1,285,875(4) | | | 1/25/23 | 1/25/23 | — | — | — | 17,084 | 34,167 | 68,334 | — | 1,641,041(5) | | | 1/25/23 | 1/25/23 | — | — | — | — | — | — | 68,334 | 2,050,020(6) | | Sam Eaton | | | | | | | | | | | | | 1/25/23 | 1/25/23 | 56,583 | 226,332 | 452,665 | — | — | — | — | — | | | 1/25/23 | 1/25/23 | — | — | — | 8,542 | 34,167 | 68,334 | — | 1,285,875(4) | | | 1/25/23 | 1/25/23 | — | — | — | 17,084 | 34,167 | 68,334 | — | 1,641,041(5) | | | 1/25/23 | 1/25/23 | — | — | — | — | — | — | 68,334 | 2,050,020(6) | | Jed Nachman | | | | | | | | | | | | | 1/25/23 | 1/25/23 | 62,500 | 250,000 | 500,000 | — | — | — | — | — | | | 1/25/23 | 1/25/23 | — | — | — | 8,855 | 35,417 | 70,834 | — | 1,332,919(4) | | | 1/25/23 | 1/25/23 | — | — | — | 17,709 | 35,417 | 70,834 | — | 1,701,079(5) | | | | | — | — | — | — | — | — | 70,834 | 2,125,020(6) | | Craig Saldanha | | | | | | | | | | | | | 1/25/23 | 1/25/23 | 59,375 | 237,500 | 475,000 | — | — | — | — | — | | | 1/25/23 | 1/25/23 | — | — | — | 6,250 | 25,000 | 50,000 | — | 940,875(4) | | | 1/25/23 | 1/25/23 | — | — | — | 12,500 | 25,000 | 50,000 | — | 1,200,750(5) | | | 1/25/23 | 1/25/23 | — | — | — | — | — | — | 50,000 | 1,500,000(6) |
Grants of Plan-Based Awards in the Year Ended December 31, 2023
(1) The amounts in this column represent the 2023 cash incentive opportunity under the Performance Bonus Plan. Please see “—Compensation Discussion and Analysis—Executive Compensation Components—Cash Incentive Compensation.” Mr. Eaton’s opportunity at each achievement level was converted from British pounds to U.S. dollars using the exchange rate in effect on January 1, 2023. (2) The amounts in this column represent shares of common stock subject to Performance Equity Awards granted pursuant to our 2012 Plan. Please see “—Compensation Discussion and Analysis—Executive Compensation Program Components—Equity Compensation.” (3) The amounts in this column represent shares of common stock subject to RSU awards granted pursuant to our 2012 Plan. Please see “—Compensation Discussion and Analysis—Executive Compensation Program Components—Equity Compensation.” (4) This amount represents the grant date fair value of the Financial Performance RSUs calculated in accordance with ASC 718 and assuming the probable outcome of the performance conditions. The grant date fair value of the Financial Performance RSUs is calculated based on the closing price of our common stock on the date of grant. (5) This amount represents the grant date fair value of the TSR RSUs calculated in accordance with ASC 718 and assuming the probable outcome of the performance conditions. We used a Monte Carlo model to determine the grant date fair value of the TSR RSUs, which requires assumptions and judgments about the variables used in the calculation. We used the following assumptions for the Monte Carlo model: Remaining Performance Period: 2.93 years Expected Volatility: 58.83% Compounded Risk-Free Interest Rate (2.93-year): 3.77% Compounded Dividend Yield: 0% (6) This amount represents the grant date fair value of the RSU award calculated in accordance with ASC 718 based on the closing price of our common stock on the date of grant.
Outstanding Equity Awards at Fiscal Year End
Outstanding Equity Awards at Fiscal Year End The following table shows certain information regarding outstanding equity awards at December 31, 2023 for the named executive officers.
Outstanding Equity Awards at December 31, 2023
Outstanding Equity Awards at December 31, 2023
Outstanding Equity Awards at 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 ($)(1) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights that Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights that Have Not Vested ($)(2) | | Jeremy Stoppelman | | | | | | | | | | | | 01/08/2015 | 32,600 | — | 53.83 | 01/08/2025 | — | — | — | — | | | 03/09/2016 | 426,200 | — | 20.47 | 03/09/2026 | — | — | — | — | | | 03/01/2017 | 347,650 | — | 34.66 | 03/01/2027 | — | — | — | — | | | 03/01/2017 | 305,950 | — | 34.66 | 03/01/2027 | — | — | — | — | | | 01/16/2018 | 288,000 | — | 43.58 | 01/16/2028 | — | — | — | — | | | 02/07/2019 | 272,700 | — | 36.25 | 02/07/2029 | — | — | — | — | | | 02/05/2021 | — | — | — | — | 29,855(3) | 1,413,336 | — | — | | | 02/22/2021 | — | — | — | — | 40,690(4) | 1,926,265 | — | — | | | 02/14/2022 | — | — | — | — | 60,164(3) | 2,848,164 | — | — | | | 02/14/2022 | — | — | — | — | 24,926(4) | 1,179,997 | — | — | | | 02/14/2022 | — | — | — | — | — | — | 120,328(5) | 5,696,328 | | | 01/25/2023 | — | — | — | — | 106,251(3) | 5,029,922 | — | — | | | 01/25/2023 | — | — | — | — | — | — | 141,668(6) | 6,706,563 | | | 01/25/2023 | — | — | — | — | — | — | 141,668(5) | 6,706,563 | | David Schwarzbach | | | | | | | | | | | | 03/06/2020 | 67,406 | 4,494(7) | 28.94 | 03/06/2030 | — | — | — | — | | | 03/06/2020 | — | — | — | — | 2,879(8) | 136,292 | — | — | | | 02/05/2021 | — | — | — | — | 12,795(3) | 605,715 | — | — | | | 02/22/2021 | — | — | — | — | 17,440(4) | 825,610 | — | — | | | 02/14/2022 | — | — | — | — | 29,021(3) | 1,373,854 | — | — | | | 02/14/2022 | — | — | — | — | 12,024(4) | 569,216 | — | — | | | 02/14/2022 | — | — | — | — | — | — | 58,042(5) | 2,747,708 | | | 01/25/2023 | — | — | — | — | | | — | — | | | 01/25/2023 | — | — | — | — | — | — | 68,334(6) | 3,234,932 | | | 01/25/2023 | — | — | — | — | — | — | 68,334(5) | 3,234,932 | | Sam Eaton | | | | | | | | | | | | 06/30/2014 | 7,100 | — | 76.68 | 06/30/2024 | — | — | — | — | | | 07/01/2015 | 2,950 | — | 42.44 | 07/01/2025 | — | — | — | — | | | 02/05/2021 | — | — | — | — | 19,192(3) | 908,549 | — | — |
Outstanding Equity Awards at 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 ($) | Option Expiration Date | Number of Shares or Units of Stock that Have Not Vested (#) | Market Value of Shares or Units of Stock that Have Not Vested ($)(1) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights that Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights that Have Not Vested ($)(2) | | | 02/22/2021 | — | — | — | — | 8,720(4) | 412,805 | — | — | | | 02/14/2022 | — | — | — | — | 25,786(3) | 1,220,709 | — | — | | | 02/14/2022 | — | — | — | — | 11,325(9) | 536,126 | — | — | | | 02/14/2022 | — | — | — | — | 10,682(4) | 505,686 | — | — | | | 02/14/2022 | — | — | — | — | — | — | 51,572(5) | 2,441,418 | | | 01/25/2023 | — | — | — | — | | | — | — | | | 01/25/2023 | — | — | — | — | — | — | 68,334(6) | 3,234,932 | | | 01/25/2023 | — | — | — | — | — | — | 68,334(5) | 3,234,932 | | Jed Nachman | | | | | | | | | | | | 01/08/2015 | 24,450 | — | 53.83 | 01/08/2025 | — | — | — | — | | | 03/09/2016 | 53,300 | — | 20.47 | 03/09/2026 | — | — | — | — | | | 03/01/2017 | 83,450 | — | 34.66 | 03/01/2027 | — | — | — | — | | | 01/16/2018 | 117,850 | — | 43.58 | 01/16/2028 | — | — | — | — | | | 02/07/2019 | 83,900 | — | 36.25 | 02/07/2029 | — | — | — | — | | | 02/05/2021 | — | — | — | — | 14,928(3) | 706,692 | — | — | | | 02/22/2021 | — | — | — | — | 20,346(4) | 963,180 | — | — | | | 02/14/2022 | — | — | — | — | 30,082(3) | 1,424,082 | — | — | | | 02/14/2022 | — | — | — | — | 12,462(4) | 589,951 | — | — | | | 02/14/2022 | — | — | — | — | — | — | 60,164(5) | 2,848,164 | | | 01/25/2023 | — | — | — | — | 53,126(3) | 2,514,985 | — | — | | | 01/25/2023 | — | — | — | — | — | — | 70,834(6) | 3,353,282 | | | 01/25/2023 | — | — | — | — | — | — | 70,834(5) | 3,353,282 | | Craig Saldanha | | | | | | | | | | | | 03/14/2022 | — | — | — | — | 64,711(10) | 3,063,419 | — | — | | | 01/25/2023 | — | — | — | — | 37,500(3) | 1,775,250 | — | — | | | 01/25/2023 | — | — | — | — | — | — | 50,000(6) | 2,367,000 | | | 01/25/2023 | — | — | — | — | — | — | 50,000(5) | 2,367,000 |
Outstanding Equity Awards at December 31, 2023
(1) Represents the market value of the unvested shares subject to each RSU based on the closing price of our common stock on December 30, 2023, which was $47.34 per share. (2) Represents the market value of the unvested shares subject to each Performance Equity Award based on a price of $47.34 per share. (3) 1/16th of the shares subject to this RSU vest on a quarterly basis over four years following the grant date. (4) 31.25% of the shares underlying this Performance Equity Award vested on March 15th of the calendar year following the grant date, with 6.25% of the shares vesting quarterly thereafter until fully vested. (5) Represents the maximum payout (i.e., 200% of the target shares) under the applicable TSR RSUs. The shares subject to this Performance Equity Award vest in the first quarter of third calendar year following the grant date based on the percentile rank of our total stockholder return relative to that of the other companies in the Russell 2000 Index over the period beginning January 1 of the calendar year of the grant date and ending December 31 two calendar years later. (6) Represents the maximum payout (i.e., 200% of the target shares) under the 2023 Financial Performance RSUs. 1/16th of the shares subject to this Performance Equity Award vest on a quarterly basis over four years following the grant date, subject to the achievement of net revenue and adjusted EBITDA performance goals for the year ended December 31, 2023. In March 2024, our Compensation Committee determined that 132.54% of the target shares subject to the 2023 Financial Performance RSUs would become Eligible Shares. (7) 25% of the shares underlying this option vested on February 14, 2021, with the remainder vesting on a monthly basis over the following 36 months. (8) 25% of the shares underlying this RSU vested on February 20, 2021, with the remainder vesting on a quarterly basis over the following three years. (9) The shares underlying this RSU vest quarterly over four years, as follows: 50% vested over the first year following the grant date; 25% vests over the second year following the grant date; and 12.5% vests in each of the third and fourth years following the grant date. (10) 25% of the shares underlying this RSU vested on February 20, 2023, with the remainder vesting on a quarterly basis over the following three years.
Option Exercises and Stock Vested
Option Exercises and Stock Vested The following table shows certain information regarding option exercises and stock vested during the year ended December 31, 2023.
Option Exercises and Stock Vested in the Year Ended December 31, 2023
Option Exercises and Stock Vested in the Year Ended December 31, 2023
Option Exercises and Stock Vested in the Year Ended December 31, 2023
| | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise(1) ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting(2) ($) | | Jeremy Stoppelman | 665,000 | 5,379,350 | 214,246 | 7,732,198 | | David Schwarzbach | — | — | 92,713 | 3,444,205 | | Sam Eaton | 18,850 | 179,829 | 93,523 | 3,480,786 | | Jed Nachman | — | — | 105,077 | 3,908,715 | | Craig Saldanha | — | — | 62,831 | 2,220,911 |
Option Exercises and Stock Vested in the Year Ended December 31, 2023
(1) The value realized is calculated as the difference between the closing price of our common stock on the date of exercise and the applicable exercise price of such options, multiplied by the number of shares underlying the options that were exercised. (2) The value realized equals the closing price of our common stock on each vesting date or, if the vesting date fell on a non-trading day, the closing price on the trading day immediately preceding the vesting date, multiplied by the number of shares that vested on that date.
Potential Payments Upon Termination or Change in Control
Potential Payments Upon Termination or Change in Control The following table sets forth quantitative estimates of the benefits that each of our named executive officers would be entitled to in connection with certain termination and change in control events pursuant to the terms of the Severance Plan. The table assumes that the qualifying termination or change in control event, as indicated, occurred on December 31, 2023.
Potential Payments Upon Termination or Change in Control
| | Lump Sum Cash Severance Payment | | Continuation of Benefits(3) ($) | Value of Equity Acceleration(4) ($) | Total ($) | | Name | Base Salary(1) ($) | Cash Incentive(2) ($) | | | | | Jeremy Stoppelman | | | | | | | Qualifying Termination(5) | 500,000 | 331,353 | 9,021 | — | 840,374 | | Qualifying Termination Upon Change in Control(6) | 500,000 | 250,000 | 9,021 | 28,153,855 | 28,912,877 | | David Schwarzbach | | | | | | | Qualifying Termination(5) | 500,000 | 331,353 | 27,816 | — | 859,168 | | Qualifying Termination Upon Change in Control(6) | 500,000 | 250,000 | 27,816 | 13,619,705 | 14,397,521 | | Sam Eaton | | | | | | | Qualifying Termination(5) | 476,312 | 315,654 | 2,269 | — | 794,236 | | Qualifying Termination Upon Change in Control(6) | 476,312 | 238,156 | 2,269 | 13,303,913 | 14,020,650 | | Jed Nachman | | | | | | | Qualifying Termination(5) | 500,000 | 331,353 | 27,177 | — | 858,529 | | Qualifying Termination Upon Change in Control(6) | 500,000 | 250,000 | 27,177 | 14,076,975 | 14,854,152 | | Craig Saldanha | | | | | | | Qualifying Termination(5) | 475,000 | 314,785 | 27,816 | — | 817,601 | | Qualifying Termination Upon Change in Control(6) | 475,000 | 237,500 | 27,816 | 8,389,169 | 9,129,485 |
Potential Payments Upon Termination or Change in Control
(1) Represents one year of each named executive officer’s base salary in effect as of December 31, 2023. The amounts indicated do not include the payment of any accrued salary or vacation that might be due upon termination of employment. With respect to Mr. Eaton, the amount reported represents his base salary of £374,165 converted based on the exchange rate in effect on December 31, 2023. (2) Represents each named executive officer’s actual 2023 cash incentive payment for a qualifying termination and each named executive officer’s target 2023 cash incentive payment for a qualifying termination during a Change in Control Period. (3) Represents 12 months of payments of premiums for continued health insurance coverage under COBRA or, with respect to Mr. Eaton, continued health coverage in the United Kingdom, assuming in each case that the executive officer timely elects to receive the benefits. Under the Severance Plan, we would continue to pay for such premiums for 12 months unless the executive officer earlier (a) becomes eligible for substantially equivalent health insurance coverage in connection with new employment or self-employment, or (b) loses eligibility for continuation of coverage under COBRA or our U.K. private health insurance, as applicable. With respect to Mr. Eaton, the amount reported is £1,782 converted to U.S. dollars based on the exchange rate in effect on December 31, 2023. (4) The value of unvested RSUs subject to accelerated vesting — including any shares subject to Performance Equity Awards that become Eligible Shares or Earned Shares as a result of the change in control — is calculated as the number of RSUs subject to accelerated vesting held by the applicable named executive officer multiplied by $47.34, the closing price of our common stock on December 29, 2023. Under the terms of the 2023 Financial Performance RSUs, the target number of shares subject to such awards would become Eligible Shares. Based on a Change in Control Price of $47.34, the percentile rank of our TSR relative to that of the other companies in the Russell 2000 Index was 90.93% for the 2023 TSR RSUs and 82.91% for the 2022 TSR RSUs, resulting in 200% of the target shares becoming Earned Shares in each case. The value of unvested options that are subject to accelerated vesting and have an exercise price of less than $47.34 is calculated as (a) the difference between $47.34 and the exercise price of the applicable option, multiplied by (b) the number of unvested options subject to accelerated vesting held by the applicable named executive officer. (5) Represents benefits payable under the Severance Plan upon an involuntary termination without cause or, with respect to Mr. Stoppelman, a constructive termination (as such terms are defined in the Severance Plan). (6) Represents benefits payable under the Severance Plan upon an involuntary termination without cause or a constructive termination that occurs during a Change in Control Period. In addition to the benefits described and quantified above, the 2012 Plan provides for an extended period of time during which an optionholder may exercise options following the optionholder’s termination of service, which time period we refer to as the post-termination exercise period. Generally, under the 2012 Plan, if an optionholder’s service relationship with us ends, the optionholder may exercise any vested options for up to three months after the date that the service relationship ends. However, if the optionholder’s service relationship with us ceases due to disability or death, the optionholder, or his or her beneficiary, may exercise any vested options for up to 12 months in the event of disability or 18 months in the event of death, after the date the service relationship ends. Accordingly, each of the named executive officers would be entitled to an extended post-termination exercise period in the event of a termination due to death or disability.
CEO Pay Ratio Disclosure
CEO Pay Ratio Disclosure As required by Section 953(b) of the Dodd-Frank Act and Item 402(u) of Regulation S-K, we are providing the following information about the relationship of the annual total compensation of our median employee and the annual total compensation of Jeremy Stoppelman, our Chief Executive Officer (“CEO”): For the year ended December 31, 2023, the median of the total annual compensation of all employees of our Company (other than our CEO) was $107,000. The annual total compensation of our CEO for purposes of determining the CEO pay ratio was $11,179,479, as reported in the “Total” column of the Summary Compensation Table. Based on this information, the ratio of the annual total compensation of our CEO to the median of the annual total compensation of all employees in 2023 was approximately 104 to 1. This pay ratio is a reasonable estimate calculated in a manner consistent with SEC rules based on our payroll and employment records and the methodology described below. The SEC rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions and to make reasonable estimates and assumptions that reflect their compensation practices. As such, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies may have different employment and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios. To identify the median of the annual total compensation of all our employees, as well as to determine the annual total compensation of the “median employee,” the methodology and the material assumptions, adjustments and estimates that we used were as follows: •We selected December 31, 2023, which is the last day of our most recently completed fiscal year, as the date upon which we would identify the median employee. •As of December 31, 2023, our employee population (other than the CEO) consisted of approximately 4,873 individuals, 4,021 of whom were located in the United States and 852 of whom were located outside of the United States, consisting of 441 employees in Canada, 92 in Germany, 307 in the United Kingdom, 10 in Ireland and two in Belgium. The pay ratio disclosure rules permit a company to exclude non-U.S. employees from the median employee calculation if non-U.S. employees in a particular jurisdiction account for five percent or less of the company’s total number of employees. Applying this de minimis exemption, we excluded all 92 of our employees located in Germany, the 10 employees located in Ireland and the two employees located in Belgium from our median employee calculation. Following the application of this exemption, the total number of employees used in our median employee calculation was 4,769 (4,021 from the United States, 441 from Canada and 307 from the United Kingdom). •We used total direct compensation for 2023 (i.e., total cash compensation + grant date fair value of equity awards granted in 2023 (with Performance Equity Awards valued based on target achievement)), as compiled from our payroll and stock administration records, as a consistently applied compensation measure to identify the “median employee” from our employees in the United States, Canada and the United Kingdom. We also annualized the compensation of all employees who joined Yelp mid-year during 2023. We converted amounts paid in Canadian dollars and British pounds into U.S. dollars using the exchange rate in effect on December 31, 2023. •Once we identified our median employee, we then determined that employee’s total compensation, including any perquisites, in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K.
Pay versus Performance
Pay versus Performance The following table sets forth the compensation of our CEO, who is our principal executive officer (“PEO”), and the average compensation of our other NEOs (“non-PEO NEOs”), both as reported in the Summary Compensation Table (“SCT”) and with certain adjustments to reflect the “compensation actually paid” to such individuals, as defined under SEC rules, for each of the periods presented below. The table also provides information on our TSR, the cumulative TSR of a peer group, net income (loss) and net revenue. For further information regarding how the Company aligns executive compensation with the Company’s performance, see “—Compensation Discussion and Analysis” above.
2023 Pay versus Performance Table
2023 Pay versus Performance Table
2023 Pay versus Performance Table
| Year | SCT Total for PEO(1) ($) | Compensation Actually Paid to PEO(2) ($) | Average SCT Total for Non-PEO NEOs(3) ($) | Average Compensation Actually Paid to Non-PEO NEOs(2) ($) | Value of Initial Fixed $100 Investment Based on: | | Net Income (loss)(6) (in thousands) ($) | Net Revenue(7) (in thousands) ($) | | | | | | | TSR(4) ($) | Peer Group TSR(4)(5) ($) | | | | 2023 | 11,179,479 | 25,370,720 | 5,528,054 | 11,737,842 | 135.92 | 158.16 | 99,173 | 1,337,062 | | 2022 | 10,846,268 | 4,646,548 | 5,716,196(8) | 4,390,457(9) | 78.50 | 119.91 | 36,347 | 1,193,506 | | 2021 | 10,044,676 | 11,916,503 | 4,402,783(8) | 5,120,825 | 104.05 | 153.85 | 39,671 | 1,031,839 | | 2020 | 7,960,242 | 5,013,409 | 2,953,943 | 2,497,058(10) | 93.80 | 123.29 | (19,424) | 872,933 |
2023 Pay versus Performance Table
(1) Jeremy Stoppelman served as our CEO in each of the reporting years. The dollar amounts reported are the amounts of total compensation reported for Mr. Stoppelman for each corresponding year in the “Total” column of the SCT. (2) Reflects the amount of compensation actually paid to Mr. Stoppelman and our non-PEO NEOs in the applicable year, calculated as indicated in the tables below in accordance with SEC rules. These dollar amounts do not reflect the actual amount of compensation earned by or paid to Mr. Stoppelman or our other NEOs during the applicable year. For information regarding the decisions made by our Compensation Committee with respect to Mr. Stoppelman’s and our other NEOs’ compensation for 2023, see “—Compensation Discussion and Analysis” above.
2023 Pay versus Performance Table
| | PEO 2023 ($) | PEO 2022 ($) | PEO 2021 ($) | PEO 2020 ($) | | Summary Compensation Table Total | 11,179,479 | 10,846,268 | 10,044,676 | 7,960,242 | | Less: Stock award value reported in the Summary Compensation Table for the covered year(a) | 10,318,005 | 10,109,480 | 9,516,849 | 7,921,304 | | Plus: Fair value as of the end of the covered year of all awards granted in covered year that are outstanding and unvested as of the end of the covered year | 15,658,203 | 6,251,323 | 9,129,234 | 6,197,265 | | Plus: Change in fair value as of the end of the covered year of any awards granted in any prior years that are outstanding and unvested as of the end of the covered year | 5,973,353 | (2,618,405) | 223,038 | (562,437) | | Plus: Fair value as of the vesting date of vested awards that are granted and vest in the covered year | 1,294,189 | 971,944 | 1,140,425 | 202,990 | | Plus: Change in fair value as of the vesting date of any awards granted in any prior years for which all applicable vesting conditions were satisfied at the end of or during the covered year | 1,583,500 | (695,102) | 895,979 | (863,347) | | Less: Fair value at the end of the prior year of awards granted in any prior year that fail to meet the applicable vesting conditions during the covered year | — | — | — | — | | Plus: Dollar value of any dividends or other earnings paid on stock or option awards in the covered year prior to the vesting date that are not otherwise included in the total compensation for the covered year | — | — | — | — | | Compensation Actually Paid(b) | 25,370,720(c) | 4,646,548 | 11,916,503 | 5,013,409 |
2023 Pay versus Performance Table
| | Non-PEO NEOs 2023 ($) | Non-PEO NEOs 2022 ($) | Non-PEO NEOs 2021 ($) | Non-PEO NEOs 2020 ($) | | Summary Compensation Table Total | 5,528,054 | 5,716,196(8) | 4,402,783(8) | 2,953,943 | | Less: Stock award value reported in the Summary Compensation Table for the covered year(a) | 4,688,629 | 4,868,693 | 3,922,236 | 2,517,915 | | Plus: Fair value as of the end of the covered year of all awards granted in covered year that are outstanding and unvested as of the end of the covered year | 7,115,278 | 3,932,525 | 3,673,443 | 2,198,119 | | Plus: Change in fair value as of the end of the covered year of any awards granted in any prior years that are outstanding and unvested as of the end of the covered year | 2,481,365 | (685,884) | 157,886 | (99,706) | | Plus: Fair value as of the vesting date of vested awards that are granted and vest in the covered year | 607,211 | 525,793 | 526,147 | 164,687 | | Plus: Change in fair value as of the vesting date of any awards granted in any prior years for which all applicable vesting conditions were satisfied at the end of or during the covered year | 694,562 | (229,481) | 282,803 | (202,070) | | Less: Fair value at the end of the prior year of awards granted in any prior year that fail to meet the applicable vesting conditions during the covered year | — | — | — | — | | Plus: Dollar value of any dividends or other earnings paid on stock or option awards in the covered year prior to the vesting date that are not otherwise included in the total compensation for the covered year | — | — | — | — | | Compensation Actually Paid(b) | 11,737,842(c) | 4,390,457(9) | 5,120,825 | 2,497,058(10) |
2023 Pay versus Performance Table
(a) The grant date fair value of equity awards represents the sum of the amounts reported in the “Stock Awards” and “Option Awards” columns in the SCT for each covered year. (b) The fair values set forth in the tables above are calculated in accordance with ASC 718 as of the end of the respective years, other than fair values of awards that vested in the covered year, which are valued as of the applicable vesting date. The assumptions used for purposes of calculating fair values of the TSR RSUs and the Performance Equity Awards granted in 2019 as of the end of the respective years are as follows:
2023 Pay versus Performance Table
| Award | Measurement Date | Remaining Performance Period | Expected Volatility | Compounded Risk-Free Interest Rate | Compounded Dividend Yield | | 2019 Performance Equity Awards | 12/31/2019 | 3.10 years | 45.32% | 1.61% | —% | | 2019 Performance Equity Awards | 12/31/2020 | 2.10 years | 61.42% | 0.13% | —% | | 2019 Performance Equity Awards | 12/31/2021 | 1.10 years | 41.87% | 0.42% | —% | | 2019 Performance Equity Awards | 12/31/2022 | 0.10 years | 34.55% | 4.07% | —% | | 2022 TSR RSUs | 12/31/2022 | 2.00 years | 44.01% | 4.31% | —% | | 2022 TSR RSUs | 12/31/2023 | 1.00 years | 29.04% | 4.67% | —% | | 2023 TSR RSUs | 12/31/2023 | 2.00 years | 39.10% | 4.13% | —% |
2023 Pay versus Performance Table
(c) Total does not sum due to rounding. (3) The non-PEO NEOs included in this calculation for each year are: 2023 — David Schwarzbach, Sam Eaton, Jed Nachman and Craig Saldanha 2022 — David Schwarzbach, Sam Eaton, Jed Nachman and Craig Saldanha 2021 — David Schwarzbach, Sam Eaton, Jed Nachman and Vivek Patel 2020 — David Schwarzbach, James Miln, Jed Nachman, Vivek Patel and Laurence Wilson (4) TSR is determined based on the value of an initial fixed investment of $100 on December 31, 2019. Cumulative TSR is calculated by dividing (a) the sum of (i) the cumulative amount of dividends for the measurement period, assuming dividend reinvestment, and (ii) the difference between the Company’s share price at the end and the beginning of the measurement period by (b) the Company's share price at the beginning of the measurement period. (5) The peer group TSR is based on the NYSE Arca Tech 100 Index, which is the industry index used in our Annual Report pursuant to Item 201(e) of Regulation S-K for the year ended December 31, 2023. (6) Net income (loss) as reported in the Company’s consolidated financial statements included in the Annual Report. (7) Net revenue as reported in the Company’s consolidated financial statements included in the Annual Report. (8) The previously reported amount has been adjusted to reflect the revised amount of total compensation reported for Mr. Nachman for the corresponding year in the 2023 SCT. See footnotes 7 and 8, as applicable, to the 2023 SCT for additional information. (9) The previously reported amount of $4,867,114 incorrectly reflected adjustments to the average SCT total compensation of our non-PEO NEOs that were calculated including Ms. Amara’s compensation. Ms. Amara was not a named executive officer in 2022. (10) The previously reported amount of $2,803,042 incorrectly reflected adjustments to the average SCT total compensation of our non-PEO NEOs that were calculated including Mr. Eaton’s compensation. Mr. Eaton was not a named executive officer in 2020.
Relationship Between Compensation Actually Paid and Financial Performance Measures
Relationship Between Compensation Actually Paid and Financial Performance Measures The following graphs further illustrate the relationship between the pay and performance figures included in the Pay versus Performance Table above. In addition, the first graph below illustrates the relationship between Company TSR and that of the NYSE Arca Tech 100 Index. The information provided under the “Pay versus Performance” heading is not deemed to be incorporated by reference into any filing of Yelp under the Securities Act or the Exchange Act, 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.