DEF 14A of Tucows Inc /Pa/
Filed May 10, 2024 · FY20230001437749-24-015838
ELECTION OF DIRECTORS
ELECTION OF DIRECTORS Our business is managed under the direction of our Board of Directors (“Board”). Our Second Amended and Restated Bylaws, as amended (the “Bylaws”), provide that our Board determines the number of directors from time to time, which is currently set at a maximum of eight. Our directors are all subject to annual election and serve until the election or appointment and qualification of their successors or their earlier death, resignation or removal. The current term of office of all of our directors expires upon election of their successors at the 2024 Annual Meeting. Our Board of Directors is presently composed of eight members. All director nominees have agreed to be named in this proxy statement and to serve if elected. Our Board expects that all of the nominees will be available for election and willing to serve as directors. In the event that any of the nominees become unavailable or unwilling to serve as a director, proxies received will be voted for substitute nominees to be designated by our Board or, in the event no such designation is made, proxies will be voted for a lesser number of nominees. Set forth below is biographical information for each nominee standing for election at the 2024 Annual Meeting. The following descriptions also outline the specific experience, qualifications, attributes, and skills that qualify each person to serve on our Board. The directors standing for election are:
ELECTION OF DIRECTORS
| Erez Gissin | Director since August 2001 |
ELECTION OF DIRECTORS
Mr. Gissin, 65, has served since 2010 as a managing partner in Helios Energy Investment, a renewable energy investment fund. From 2005 to 2010, Mr. Gissin served as the Chief Executive Officer of BCID Ltd., an investment company focusing on infrastructure development projects in China. From 2000 to 2005, Mr. Gissin served as the Chief Executive Officer of IP Planet Networks Ltd., an Israeli satellite communication operator providing internet backbone connectivity and solutions to Internet Service Providers. From 1995 to 2000, Mr. Gissin was Vice President, Business Development of Eurocom Communications Ltd., a holding company that controls several telecommunications services, equipment and internet companies in Israel. Mr. Gissin has a strong background in the internet communications industry and has gained significant institutional knowledge in his long tenure as one of our directors. Mr. Gissin also has significant leadership experience as the Chief Executive Officer of BCID Ltd. and IP Planet Networks Ltd. and has extensive financial acumen derived from his years of executive experience and PE fund management. All of these qualities qualify Mr. Gissin to be a director of Tucows.
ELECTION OF DIRECTORS
| Elliot Noss | Director since August 2001 |
ELECTION OF DIRECTORS
Mr. Noss, 61, is Tucows' President and Chief Executive Officer and has served in such capacity since the completion of our merger with Tucows Delaware in August 2001. From May 1999 until completion of the merger in August 2001, Mr. Noss served as President and Chief Executive Officer of Tucows Delaware. Before that, from April 1997 to May 1999, Mr. Noss served as Vice President of Corporate Services of Tucows Interactive Ltd., which was acquired by Tucows Delaware in May 1999. Mr. Noss’s lengthy service as our Chief Executive Officer has provided him with extensive knowledge of, and experience with, Tucows’ operations, strategy and financial position. In addition, Mr. Noss has widespread knowledge of the Internet and software industry generally that, coupled with his operational expertise, qualifies him to be a director of Tucows.
ELECTION OF DIRECTORS
| Jeffrey Schwartz | Director since June 2005 |
ELECTION OF DIRECTORS
Mr. Schwartz, 61, has served as a director of Dorel Industries since 1987 and as Executive Vice President and Chief Financial Officer since 2003. Mr. Schwartz is a graduate of McGill University in Montreal and has a degree in the field of business administration. Mr. Schwartz has a significant amount of public-company financial expertise, particularly in his executive experience as the chief financial officer of Dorel Industries, Inc. This executive experience, along with Mr. Schwartz’s service as one of our Audit Committee members (and as Chairperson of our Audit Committee since 2005), qualifies him to be a director of Tucows.
ELECTION OF DIRECTORS
| Allen Karp | Director since October 2005 and Chair Emeritus since September 2021 |
ELECTION OF DIRECTORS
Mr. Karp, 83, was with Cineplex Odeon Corporation in various positions from 1986 to 2005, retiring as Chairman and Chief Executive Officer in 2002 and as Chairman Emeritus in 2005. From 1966 to 1986, he practiced law at the law firm of Goodman and Carr LLP, where he was named partner in 1970. Mr. Karp was until recently a Director of Brookfield Real Estate Services Inc., where he also served on the Audit Committee and as the Chair of the Corporate Governance Committee. From 2004 to 2014, Mr. Karp was Chairman of the Board of Directors of IBI Group Inc., as well as Chairman of the Nominating, Governance and Compensation Committee. Mr. Karp is a past director of the Toronto International Film Festival Group, where he served as Chairman of the Board from 1999 to 2007 and served as Chairman of its Corporate Governance Committee from 2007 to 2012. Additionally, Mr. Karp has previously served as director of several other public corporations. Mr. Karp has extensive executive leadership skills, long-standing senior management experience, a strong ethics and compliance focus and audit committee experience. These skills and qualifications, in addition to his recent service on the boards of directors of other public companies, enable him to bring valuable perspectives to our Board, particularly with respect to corporate governance matters, and qualify him to be a director of Tucows.
ELECTION OF DIRECTORS
| Robin Chase | Chair since September 2021 and Director since October 2014 |
ELECTION OF DIRECTORS
Robin Chase, 65, is a transportation entrepreneur. She is co-founder and former CEO of Zipcar, founded in 2000, the world’s leading car sharing network; as well as co-founder of Veniam, founded in 2012, a network company that moves terabytes of data between vehicles and the cloud. In 2019, she co-founded her first nonprofit, NUMO, a global alliance to channel the opportunities presented by new urban mobility technologies to build cities that are sustainable and just. Her book is Peers Inc: How People and Platforms are Inventing the Collaborative Economy and Reinventing Capitalism. In addition to Ms. Chase’s position as Chair of the Tucows Board, she sits on the boards of World Resources Institute, and serves on the Dutch multinational DSM’s Sustainability Advisory Board. In the past, she served on the boards of Veniam and the Massachusetts Department of Transportation, the French National Digital Agency, the National Advisory Council for Innovation & Entrepreneurship for the US Department of Commerce, the Intelligent Transportations Systems Program Advisory Committee for the US Department of Transportation, the OECD’s International Transport Forum Advisory Board, the Massachusetts Governor’s Transportation Transition Working Group, and Boston Mayor’s Wireless Task Force. Ms. Chase lectures widely, has been frequently featured in the major media, and has received many awards in the areas of innovation, design, and environment, including the prestigious Urban Land Institute’s Nicols Prize as Urban Visionary, Time 100 Most Influential People, Fast Company Fast 50 Innovators, and BusinessWeek Top 10 Designers. Robin graduated from Wellesley College and MIT’s Sloan School of Management, was a Harvard University Loeb Fellow, and received an honorary Doctorate of Design from the Illinois Institute of Technology. Ms. Chase’s experience operating companies at the chief executive officer level along with her numerous experiences on these boards and councils qualify her to be a director of Tucows.
ELECTION OF DIRECTORS
| Marlene Carl | Director since September 2021 |
ELECTION OF DIRECTORS
Marlene Carl, 34, became Chief Financial Officer ("CFO) in 2021 at CHAPTERS group AG (formerly MEDIQON Group AG), a German publicly traded company focused on entrepreneurial and long-term investments in companies with scalable business models from a variety of sectors, including a number of software companies. Prior to joining CHAPTERS Group AG in 2020, Ms. Carl worked in financing for eight years focusing on digital infrastructure in Europe, from Fiber-to-the-Home (“FTTH”) roll-outs in rural areas to data center construction, for banks including Berenberg and NIBC Bank N.V., based in Hamburg, London and Frankfurt. Ms. Carl holds a Master of Science from Frankfurt School of Finance & Management with a focus on capital markets. Ms. Carl’s experience in investment management and infrastructure financing, including FTTH projects, qualify her to be a director of Tucows.
ELECTION OF DIRECTORS
| Lee Matheson | Director since September 2023 |
ELECTION OF DIRECTORS
Lee Matheson, 43, is a Partner at EdgePoint Investment Group Inc. Previously, Mr. Matheson was a co-founder of Broadview Capital Management Inc. and portfolio manager of the Broadview Dark Horse LP, a long/short fund focused on Canadian small cap securities. Mr. Matheson has extensive public company experience having served on the boards of Echelon Financial Holdings Inc. from 2018 to 2020; RDM Corporation from 2011 to 2017; AlarmForce Industries Inc. from 2016 to 2018; WesternOne Inc. from 2016 to 2018; Medworxx Solutions Inc. from 2013 to 2015, and Strad Inc. from 2019 to 2020. Mr. Matheson is currently a director of AutoCanada Inc. and Optiva Inc., and is a Chartered Financial Analyst Charterholder. Mr. Matheson’s experience in investment management, financing, and SaaS businesses qualify him to be a director of Tucows.
ELECTION OF DIRECTORS
| Gigi Sohn | Director since September 2023 |
ELECTION OF DIRECTORS
Gigi Sohn, 61, is the Executive Director of the American Association of Public Broadband (AAPB), a Benton Institute Senior Fellow and Public Advocate and a Distinguished Fellow at the Georgetown Law Institute for Technology Law & Policy. She is one of the nation’s leading public advocates for open, affordable and democratic communications networks. In October 2021, President Biden nominated her to serve on the Federal Communications Commission. From 2013 to 2016, Ms. Sohn was Counselor to the former Chairman of the Federal Communications Commission, Tom Wheeler. She spent the previous 12 years as Co-Founder and CEO of Public Knowledge, a leading communications and intellectual property policy advocacy organization serving the interests of consumers in Washington. Ms. Sohn was previously a Project Specialist in the Ford Foundation’s Media, Arts and Culture unit and Executive Director of the Media Access Project, the first public interest communications law firm. In 1997, President Clinton appointed Ms. Sohn to serve as a member of his Advisory Committee on the Public Interest Obligations of Digital Television Broadcasters. Ms. Sohn is a long-time advocate for LGBTQ+ equality and has served as President of the Gay and Lesbian Lawyers (now the LGBT Bar Association) of Washington, DC from 1994-1997 and was elected as the first openly LGBTQ+ member of the District of Columbia Bar Board of Governors. Ms. Sohn’s experience in telecommunications policy and regulation, and consumer interests qualify her to be a director of Tucows. The Board unanimously recommends a vote FOR the nominees listed above.
Director Compensation
Director Compensation Under the terms of our 2006 Amended and Restated Equity Compensation Plan (the “2006 Plan”), we make automatic formula grants of non-qualified stock options to our non-employee directors and members of committees of our Board as described below. All stock-based compensation for our non-employee directors is governed by our 2006 Plan or its predecessor, our 1996 Equity Compensation Plan (the “1996 Plan”). All options granted under the automatic formula grants vest after one year, have an exercise price equal to the fair market value per common share as determined by the per share price as of the close of business on the date of grant and have a five-year term. Options are granted to directors under the 2006 Plan as follows:
Director Compensation
| ● | on the date a non-employee director becomes a director, he or she is granted options to purchase 4,375 shares of our common stock; | | ● | on the date a director becomes a member of the Audit Committee, he or she is granted options to purchase 3,750 shares of our common stock; | | ● | on the date a director becomes a member of the Corporate Governance, Nominating and Compensation Committee, he or she is granted options to purchase 2,500 shares of our common stock; and | | ● | on each date on which we hold our annual meeting of shareholders, each non-employee director in office immediately before and after the annual election of directors receives an automatic grant of options to purchase 3,750 shares of our common stock. |
Director Compensation
Initial option grants become exercisable in full upon the completion of one (1) year of Board service measured from the date of grant. Annual option grants become exercisable in full upon the completion of Board service through the earlier of (i) one (1) year measured from the date of grant or (ii) the date of the annual shareholder meeting following the date of grant. All formula option grants become exercisable on an accelerated basis upon a change of control or the non- employee director’s termination of Board service by reason of death or disability. Directors who are employees receive no additional or special compensation for serving as directors. All annual fees are paid to our directors in quarterly installments. On each date on which we hold our annual meeting of shareholders, each non-employee director in office immediately before and after the annual election of directors receives an automatic grant of options to purchase shares of our common stock. The initial grant is set at 3,750 options. Each non-employee member of the Board will receive $30,000 annually, the Chairperson of the Board will additionally receive $15,000; each Chair of the Audit Committee and Corporate Governance, Nomination and Compensation Committee will additionally receive $7,500; and each member of the Audit Committee and Corporate Governance, Nomination and Compensation Committee will additionally receive $12,000. We also purchase directors and officer's liability insurance for the benefit of our directors and officers as a group in the amount of $30 million. We also reimburse our directors for their reasonable out-of-pocket expenses incurred in attending meetings of our Board or its committees. The table below shows all compensation paid to each of our non-employee directors during 2023. Each of the directors listed below served for the entire year except for Gigi Sohn and Lee Matheson, who joined in September, 2023.
Director Compensation
| Name | Fees earned or paid in cash ($) | Option awards ($)(1) (2) | Total ($) | | (a) | (b) | (d) | (h) | | Allen Karp | $54,000 | $27,211 | $81,211 | | Brad Burnham (3) | 22,500 | | 22,500 | | Erez Gissin | 42,000 | 27,211 | 69,211 | | Gigi Sohn | 11,455 | 51,065 | 62,520 | | Jeffrey Schwartz | 60,091 | 27,211 | 87,302 | | Lee Matheson | 10,000 | 51,065 | 61,065 | | Marlene Carl | 32,000 | 49,947 | 81,947 | | Robin Chase | 64,500 | 27,211 | 91,711 | | | $296,546 | $260,921 | $557,467 |
Director Compensation
| (1) The amounts reported in this column represent the aggregate grant date fair value of the option grants calculated in accordance with the FASB Accounting Standards Codification ("ASC") 718 and based on the Black-Scholes option-pricing model using the same assumptions that are set forth in “Note 16 – Stock Option Plans" of the Notes to the Consolidated Financial Statements including Part II, Item 8 of this proxy statement. Under the 2006 Plan, these options vest one year after the grant date and have a five-year term. |
Director Compensation
| (2) On September 7, 2023, each of our re-elected non-employee directors at the time were awarded automatic formula option grants with an exercise price of $19.78 and a grant date fair value of $7.26; directors newly elected to the Board at the Company's annual meeting, Ms. Sohn and Mr. Matheson, were awarded automatic formula option grants of 4,375 shares with an exercise price of $19.78 and a grant date fair value of $7.26 in connection with becoming a director. On November 2, 2023, Ms. Carl was awarded an automatic formula option grant of 3,750 with an exercise price of $16.47 and a grant date fair value of $6.06 in connection to Ms. Carl's appointment to the Audit Committee. On November 17, 2023, Ms. Sohn was awarded an automatic formula option grant of 2,500 options with an exercise price of $21.07 and a grant date fair value of $7.73 in connection with Ms. Sohn's appointment to the Corporate Governance, Nomination and Compensation Committee. On November 17, 2023, Mr. Matheson was awarded an automatic formula option grant of 2,500 options with an exercise price of $21.07 and a grant date fair value of $7.73 in connection with Mr. Matheson's appointment to the Corporate Governance, Nomination and Compensation Committee. The aggregate number of option awards outstanding at December 31, 2023 is as follows for each of the following non-employee directors: 22,500 for Mr. Karp; 22,500 for Mr. Gissin; 6,875 for Ms. Sohn; 22,500 for Mr. Schwartz; 6,875 for Mr. Matheson; 15,625 for Ms. Carl; and 22,500 for Ms. Chase. |
Director Compensation
| (3) Mr. Burnhan did not stand for re-election during the Company's 2023 meeting of the shareholders. |
Determining Total Compensation
Determining Total Compensation With respect to each NEO, in determining total compensation, the Corporate Governance, Nominating and Compensation Committee considers the Company’s compensation philosophy as outlined above, comparative market data and specific factors relative to each NEO’s responsibilities and performance. We do not specifically benchmark compensation for our NEOs in terms of picking a particular percentile relative to other people with similar titles at peer group companies. We believe that many subjective factors unique to each NEO’s responsibilities and performance are not adequately reflected or otherwise accounted for in a percentile-based compensation determination. In addition, in determining the appropriate level of total compensation for our NEOs, the Corporate Governance, Nominating and Compensation Committee (i) reviews and considers the performance of each NEO, and (ii) considers, for each NEO, the estimated amount of total compensation:
Annual Cash Incentive Bonuses
Annual Cash Incentive Bonuses We use annual cash incentive bonuses to communicate specific goals that are of primary importance during the coming year and motivate our senior officers and NEOs to achieve these goals. Each year, we assess if our corporate financial and strategic objectives are optimally aligned with our management incentive compensation plan to motivate and reward our senior executives, including our NEOs, to attain specific short-term performance objectives that, in turn, further our long- term business objectives. These objectives are based upon corporate or service-related targets, rather than individual objectives. In setting target payout levels under our management incentive compensation plan, our Corporate Governance, Nominating and Compensation Committee considers historical payouts, the total cost to the company should performance objectives be achieved and our retention needs. In Fiscal 2023, due to the Corporate Governance, Nominating and Compensation Committee's reassessment and the realignment of Tucows' operating segments in 2022, annual cash incentive bonuses were structured based on balanced scorecards for each business segment, including specific performance measures. Notably, bonuses were distributed semi-annually; of the first installment, 50% was paid in Company common stock, effectively meaning a quarter of the annual bonus was issued in stock. This procedure was unique to Fiscal 2023 and does not indicate a permanent policy shift. The Corporate Governance, Nominating and Compensation Committee determines the initial level of funding for the annual incentive bonus pools during the annual budgeting process and approves provisional quarterly payments, computed on a pro-rata basis, based on quarterly minimum year-to-date targets for our senior officers, including NEOs, taking into account the Company’s actual performance on a year-to-date basis. In Fiscal 2022, to ensure that our annual target remained the primary consideration, any quarterly payments were subject to a discretionary holdback percentage, which has historically been set at 25%. For Fiscal 2023, semi-annual payments will not be subject to a discretionary holdback percentage of 25%. The future holdback percentage could be adjusted for each semiannual period should circumstances warrant it. The Corporate Governance, Nominating and Compensation Committee retains the right to interpret, rescind, prescribe, amend or suspend payment under our management incentive compensation plan at any time. Changes made by the Corporate Governance, Nominating and Compensation Committee will however only be on a prospective basis so will not impact any semi-annual rights our NEO’s and senior officers may have up to the date of the change. The performance goals under our management incentive compensation plan consists of two components; namely, an incentive bonus and an overachievement bonus, each with established thresholds and maximum achievement levels. For the incentive bonus component, achievement of established targets for each NEO will equate to 100% of the bonus being paid. Where 75% of an established target is achieved (“floor level”) this will result in 50% of the bonus being paid. Below the floor level no bonus is payable. In those cases, where achievement is between the floor level and the established target, straight-line interpolation is applied from the established target levels.
Incentive Bonus program
Incentive Bonus program The table below summarizes the 2023 and 2024 incentive bonus opportunities for our NEOs.
Incentive Bonus program
| | 2024 | | 2023 | | | Named Officer | Target incentive Bonus Opportunity (1) | Basis for Target incentive Bonus for 2024 | Target incentive Bonus Opportunity (1) | Basis for Target incentive Bonus for 2023 | | Elliot Noss | $490,686 | 50% Ting targets, 20% Wavelo targets and 30% Tucows Domains targets | $362,859 | 50% Ting targets, 30% Wavelo targets and 20% Tucows Domains targets | | Davinder Singh | $181,176 | 50% Ting targets, 25% Wavelo targets and 25% Tucows Domains targets | $153,277 | 50% Ting targets, 15% Wavelo targets and 35% Tucows Domains targets | | Justin Reilly | $355,104 | 100% Wavelo targets | $347,343 | 100% Wavelo targets | | David Woroch | $181,176 | 100% Domain Services targets | $157,064 | 100% Domain Services targets | | Bret Fausett | $210,000 | 50% Ting targets, 25% Wavelo targets and 25% Tucows Domains targets | $158,828 | 50% Ting targets, 15% Wavelo targets and 35% Tucows Domains targets |
Incentive Bonus program
| (1) All dollar amounts below are shown U.S. dollars. Amounts payable in Canadian dollars for 2023 have been converted into U.S. dollars based upon the exchange rate of 1.3500 Canadian dollars for each U.S. dollar, the average OANDA exchange rate for 2023 as at December 31, 2023. Amounts payable in Canadian dollars during the 2023 fiscal year have been converted into U.S. dollars based upon the exchange rate of 1.338 Canadian dollars for each U.S. dollar, which represents the year-end exchange rate as at December 31, 2023 |
Incentive Bonus program
Our Corporate Governance, Nominating and Compensation Committee met in March 2024 and determined the achievement of the financial objectives applicable under the management incentive compensation plan for 2023 had been partially achieved. In connection with the Corporate Governance, Nominating and Compensation Committee’s annual review process, the Committee also approved a new set of performance goals under our management incentive compensation plan for Fiscal 2024 and decided not to increase the incentive bonus target opportunity for our NEOs.
Overachievement Bonus Program
Overachievement Bonus Program The Overachievement Bonus Program is designed to further incent our employees, senior management and NEOs to exceed the Company’s Adjusted EBITDA for compensation goals. In assessing our overall performance for Fiscal 2023, the Corporate Governance, Nominating and Compensation Committee deemed that no overachievement bonus should be payable for Fiscal 2023.
Equity-Based Awards
Equity-Based Awards We believe that equity-based awards encourage our NEOs to focus on the long-term performance of our business. Our Board grants equity awards to executives and other employees in order to enable them to participate in the long-term appreciation of our stock price. Additionally, we believe our equity awards provide an important retention tool for our NEOs, as they are subject to multi-year vesting. The equity awards can be Company Options and Subsidiary Options. To date, we have not adopted stock ownership guidelines for our NEOs. Historically, we have granted equity-based awards in the form of Company Options, including options granted at the commencement of employment and additional awards each year. The size of the initial option grant made to each NEO upon joining our company is primarily based on competitive conditions applicable to the NEO's specific position. For subsequent equity grants to our NEOs, our Corporate Governance, Nominating and Compensation Committee receives input from our CEO and the People Team leadership. The Company granted Ting Subsidiary Options to certain NEOs on January 16, 2023. the Ting Equity Compensation Plan (ECP) includes private subsidiary stock which have been established for the benefit of the employees, officers, directors and certain consultants of Ting. The Ting stock options were introduced in order to provide variable compensation that helps retain executives and ensures that our executives' interests are aligned with those stakeholders of the business to grow the long-term value. The maximum number of Ting common units that have been set aside for issuance under the plan is 10 million units, currently there are 100 million common units outstanding. Generally, options issued under the ECP vest over a four-year period and have a term not exceeding ten years. Compensation costs for awards of stock-based compensation settled in shares are determined based on the fair value of share-based instrument at the time of the grant and are recognized as expense over the vesting period of the share-based instrument. No Company Option grants have yet been awarded for Fiscal 2024. In connection with its annual review process, the Corporate Governance, Nominating and Compensation Committee approved, effective June 29, 2023, the following Company Option awards to our NEOs. These options vest in equal installments on each of the first four anniversaries of the grant date, generally subject to the NEO’s continued employment with us. In addition, we granted Subsidiary Options in Wavelo on November 9, 2022. The following table sets forth the number of Company Options granted in Fiscal 2023 and their corresponding aggregate grant date fair value as of December 31, 2023.
Severance and Change of Control Benefits
Severance and Change of Control Benefits Our Board believes that it is necessary to offer senior members of our executive team severance benefits to ensure that they remain focused on executing our strategic plans, including in the event of a proposed or actual acquisition. We have entered into employment agreements with our NEOs to provide them with additional severance benefits upon an involuntary termination of employment under specified circumstances prior to and following a change of control. The terms of these agreements are described below in "Potential Payments on Termination or Change in Control."
Benefits
| ● | long-term disability insurance; |
Compensation Risk Assessment
| ● | the balance between short- and long-term incentives; | | ● | use of qualitative as well as quantitative performance factors in determining compensation payouts, including minimum and maximum performance thresholds, funding that is based on actual results measured against pre-approved financial and operational goals and metrics that are clearly defined; | | ● | incentive compensation that includes a stock component where value is best realized through long-term appreciation of stockholder value; and | | ● | incentive compensation components that are paid or vest over an extended period. |
Summary Compensation Table
Summary Compensation Table The following Summary Compensation table provides a summary of the compensation earned by our NEOs, including our Chief Executive Officer, our Chief Financial Officer, and our next three most highly compensated executive officers for services rendered in all capacities during 2023. Specific aspects of this compensation are dealt with in further detail in the tables that follow. All dollar amounts below are shown in U.S. dollars. If necessary, amounts that were paid in Canadian dollars during Fiscal 2023 were converted into U.S. dollars based upon the exchange rate of 1.350 Canadian dollars for each U.S. dollar, which represents the average OANDA exchange rate for 2023.
Summary Compensation Table
| Name and Principal Position | Year | Salary ($) | Bonus (1)(2) ($) | Option Awards (3) ($) | All Other Compensation (4) ($) | Total ($) | | (a) | (b) | (c) | (d) | (e) | (f) | (g) | | Elliot Noss | 2023 | $444,275 | $383,666 | $53,815 | $210,815 | $1,094,128 | | President and Chief Executive Officer of Tucows and Ting | 2022 | 409,156 | 281,452 | 73,781 | 495,571 | 1,259,960 | | | 2021 | 397,112 | 242,240 | 125,719 | 8,379 | 773,450 | | Davinder Singh | 2023 | 281,859 | 157,828 | 55,815 | 16,920 | 512,421 | | Chief Financial Officer | 2022 | 269,447 | 137,816 | 73,781 | 176,012 | 657,056 | | | 2021 | 260,840 | 112,162 | 125,719 | 7,182 | 505,902 | | Justin Reilly | 2023 | 581,085 | 348,652 | - | 1,482 | 931,219 | | Chief Executive Officer, Wavelo | 2022 | 603,031 | 361,818 | 73,781 | 2,196,080 | 3,234,710 | | | 2021 | 317,128 | 114,166 | 100,575 | 1,197 | 533,066 | | David Woroch | 2023 | 287,894 | 161,002 | 55,815 | 7,041 | 511,752 | | Chief Executive Officer, Tucows Domains | 2022 | 282,553 | 144,308 | 147,561 | 6,701 | 581,124 | | | 2021 | 269,165 | 134,584 | 100,575 | 7,182 | 511,506 | | Bret Fausett | 2023 | 321,760 | 167,290 | 39,070 | 17,913 | 546,034 | | Chief Legal Officer and Vice President, Regulatory Affairs | 2022 | 286,436 | 120,578 | 73,781 | 73,164 | 553,959 | | | 2021 | 274,461 | 98,806 | 125,719 | - | 498,985 |
Summary Compensation Table
| (1) Represents bonus earned under our incentive programs during the fiscal years ended December 31, 2023, 2022 and 2021. |
Summary Compensation Table
Of the 2023 amount, the following amounts were paid in March 2024:
Summary Compensation Table
| Elliot Noss | $174,887 | | Davinder Singh | $74,942 | | Justin Reilly | $106,531 | | David Woroch | $84,585 | | Bret Fausett | $79,883 |
Summary Compensation Table
Of the 2022 amount, the following amounts were paid in February 2023:
Summary Compensation Table
| Elliot Noss | $107,611 | | Davinder Singh | $50,389 | | Justin Reilly | $233,839 | | David Woroch | $57,441 | | Bret Fausett | $45,773 |
Summary Compensation Table
Of the 2021 amount, the following amounts were paid in February 2022:
Summary Compensation Table
| Elliot Noss | $104,902 | | Davinder Singh | $48,646 | | Justin Reilly | $49,233 | | David Woroch | $59,539 | | Bret Fausett | $43,403 |
Summary Compensation Table
| (2) On August 14, 2023, the NEOs received grants of common stock of the Company in lieu of a portion of their cash bonuses. |
Summary Compensation Table
| (3) Represents the aggregate grant date fair value of such Company Options, calculated in accordance with FASB ASC 718. Please see “Note 16– Stock Option Plans” of the Notes to Consolidated Financial Statements included in Part II, Item 8 of the 2023 Annual Report, for a discussion of the assumptions underlying these calculations. |
Summary Compensation Table
| (4) Amounts reported in this column are comprised of the following items: |
Summary Compensation Table
| Name | Year | Additional Health Spending Credits ($) | Car Allowance ($) | One-Time Payment ($) | Subsidiary Stock Options (2) ($) | Retirement Allowance ($) | All Other Compensation ($) | | Elliot Noss | 2023 | $2,001 | $6,671 | $- | $201,700 | $- | $210,372 | | | 2022 | 1,154 | 6,656 | - | 487,761 | - | 495,571 | | | 2021 | 1,197 | 7,182 | - | - | - | 8,379 | | Davinder Singh | 2023 | - | 5,559 | - | 5,043 | 6,318 | 16,920 | | | 2022 | 1,154 | 5,547 | 96,147 | 73,164 | - | 176,012 | | | 2021 | 1,197 | 5,985 | - | - | - | 7,182 | | Justin Reilly | 2023 | 1,482 | - | - | - | - | 1,482 | | | 2022 | 1,154 | - | - | 2,194,926 | - | 2,196,080 | | | 2021 | 1,197 | - | - | - | - | 1,197 | | David Woroch | 2023 | 1,482 | 5,559 | - | - | - | 7,041 | | | 2022 | 1,154 | 5,547 | - | - | - | 6,701 | | | 2021 | 1,197 | 5,985 | - | - | - | 7,182 | | Bret Fausett | 2023 | - | - | - | 5,043 | 12,870 | 17,913 | | | 2022 | - | - | - | 73,164 | - | 73,164 | | | 2021 | - | - | - | - | - | - |
Executive Pay Ratio
Executive Pay Ratio In August 2015, pursuant to a mandate of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the SEC adopted a rule requiring annual disclosure of the ratio of the median employee’s annual total compensation to the total annual compensation of the principal executive officer (‟PEO”). The Company’s PEO is Mr. Noss. The annual total compensation for fiscal year 2023 for our PEO was $1,093,640, and for the median employee was $60,937. The resulting ratio of our PEO’s pay to the pay of our median employee for fiscal year 2022 is 18 to 1. The measurement was prepared as of December 31, 2023 based on active employees as at that date and total compensation for the annual period then ended. The Company utilized tax records to determine the total annual compensation based on gross employment income for each individual Form W-2 or equivalent for our international subsidiaries. Gross employment income includes salaries, bonus, company medical benefits, car allowance and benefits from exercise of stock options. We determined the compensation of our median employee, (i) by calculating the annual total compensation described above for each of our employees; (ii) ranking the annual total compensation of all employees except for the PEO from lowest to highest; and (iii) determining the Median Employee. The Median Employee’s Fiscal 2023 compensation was then determined in a manner consistent with the Summary Compensation Table above and compared to the PEO to derive the ratio.
Grants of Plan-Based Awards
Grants of Plan-Based Awards The following table sets forth information concerning Company plan-based awards granted to our NEOs in 2023:
Grants of Plan-Based Awards
| | | Estimated future payouts under non-equity incentive plan awards (1) | | | All other stock awards: Number of shares of stock or units | Exercise or base price of option awards ($) | Grant date fair value of stock and option awards (2) ($) | | Name | Grant Date | Threshold ($) | Target ($) | Maximum ($) | | | | | (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | | Elliot Noss | 6/29/2023 | $181,429 | $362,859 | $362,859 | 5,000 | $26.78 | $55,815 | | Davinder Singh | 6/29/2023 | 76,638 | 153,277 | 153,277 | 5,000 | 26.78 | 55,815 | | Justin Reilly | - | 173,672 | 347,343 | 347,343 | - | - | - | | David Woroch | 6/29/2023 | 78,532 | 157,064 | 157,064 | 5,000 | 26.78 | 55,815 | | Bret Fausett | 6/29/2023 | 79,414 | 158,828 | 158,828 | 3,500 | 26.78 | 39,070 |
Grants of Plan-Based Awards
| (1) The amounts represent the range of payouts under the 2023 Annual Cash Incentive Bonus plan assuming the achievement of corporate and individual performance targets as further described in "Annual Cash Incentive Bonuses." Amounts above reflect adjustment for any changes in base pay and resulting target bonus percentage during 2023. |
Grants of Plan-Based Awards
| (2) Represents the grant date fair value of such awards, calculated in accordance with FASB ASC 718. Please see “Note 16 – Stock Option Plans” of Notes to Consolidated Financial Statements included in Part II, Item 8 of the 2023 Annual Report, for a discussion of the assumptions underlying these calculations. |
Grants of Plan-Based Awards
The following table sets forth information concerning plan-based awards granted to our NEOs in 2023:
Grants of Plan-Based Awards
| Name | Grant date | All other option awards: Number of shares underlying Company options | Exercise or base price of option awards ($) | Grant date fair value of option awards (1) ($) | | Elliot Noss | 1/16/2023 | 2,000,000 | $6.00 | $201,700 | | Davinder Singh | 1/16/2023 | 50,000 | $6.00 | $5,043 | | Justin Reilly | | - | - | - | | David Woroch | | - | - | - | | Bret Fausett | 1/16/2023 | 50,000 | $6.00 | $5,043 |
Grants of Plan-Based Awards
| (1) Represents the grant date fair value of such awards, calculated in accordance with FASB ASC 718. Please see “Note 16 – Stock Option Plans” of Notes to Consolidated Financial Statements included in Part II, Item 8 of the 2023 Annual Report, for a discussion of the assumptions underlying these calculations. |
Grants of Plan-Based Awards
The following table sets forth information concerning Subsidiary plan-based awards granted to our NEOs in 2023:
Grants of Plan-Based Awards
| Name | Grant date | All other option awards: Number of shares underlying Subsidiary Options | Exercise or base price of Subsidiary Option awards | Grant date fair value of Subsidiary Option awards (1) | | Elliot Noss | 1/16/2023 | 2,000,000 | $6.00 | $201,700 | | Davinder Singh | 1/16/2023 | 50,000 | $6.00 | $5,043 | | Justin Reilly | | - | $- | $- | | David Woroch | | - | | - | | Bret Fausett | 1/16/2023 | 50,000 | $6.00 | $5,043 |
Grants of Plan-Based Awards
| (1) Represents the grant date fair value of such awards, calculated in accordance with FASB ASC 718. Please see “Note 16 – Stock Option Plans” of Notes to Consolidated Financial Statements included in Part II, Item 8 of the 2023 Annual Report, for a discussion of the assumptions underlying these calculations. |
Outstanding Equity Awards at Fiscal Year-End
Outstanding Equity Awards at Fiscal Year-End The following table sets forth information concerning stock options held by the named executive officers as of December 31, 2023:
Outstanding Equity Awards at Fiscal Year-End
| Name | Number of Securities Underlying Unexercised Company Options (#) Exercisable | Number of Securities Underlying Unexercised Company Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | | Elliot Noss | 4,500 | - | $64.10 | 6/4/2025 | | | 4,500 | - | 62.12 | 5/27/2026 | | | 3,375 | 1,125 | 60.01 | 5/27/2027 | | | 2,500 | 2,500 | 79.44 | 5/11/2028 | | | 1,250 | 3,750 | 41.97 | 6/16/2029 | | | - | 5,000 | 26.78 | 6/29/2030 | | | 16,125 | 12,375 | | | | Davinder Singh | 2,000 | - | $55.65 | 7/23/2024 | | | 2,250 | - | 64.10 | 6/4/2025 | | | 2,250 | - | 62.12 | 5/27/2026 | | | 1,687 | 563 | 60.01 | 5/27/2027 | | | 2,500 | 2,500 | 79.44 | 5/11/2028 | | | 1,250 | 3,750 | 41.97 | 6/16/2029 | | | - | 5,000 | 26.78 | 6/29/2030 | | | 11,937 | 11,813 | | | | Justin Reilly | | | | | | | 9,000 | - | $55.19 | 9/16/2026 | | | 1,687 | 563 | 60.01 | 5/28/2027 | | | 2,000 | 2,000 | 79.44 | 5/12/2028 | | | 1,250 | 3,750 | 41.97 | 6/17/2029 | | | 13,937 | 6,313 | | | | David Woroch | 2,250 | - | $64.10 | 6/4/2025 | | | 2,250 | - | 62.12 | 5/27/2026 | | | 1,687 | 563 | 60.01 | 5/27/2027 | | | 2,000 | 2,000 | 79.44 | 5/11/2028 | | | 2,500 | 7,500 | 41.97 | 6/16/2029 | | | - | 5,000 | 26.78 | 6/29/2030 | | | 10,687 | 15,063 | | | | Bret Fausett | 5,000 | - | $53.20 | 9/3/2024 | | | 561 | - | 64.10 | 6/5/2025 | | | 1,124 | - | 62.12 | 5/28/2026 | | | 843 | 281 | 60.01 | 5/28/2027 | | | 1,249 | 1,249 | 79.44 | 5/11/2028 | | | 625 | 1,875 | 41.97 | 6/16/2029 | | | - | 1,742 | 26.78 | 6/29/2030 | | | 9,402 | 5,147 | | |
Outstanding Equity Awards at Fiscal Year-End
The stock options grants listed in the above table were issued under our 2006 Plan. Under the 2006 Plan, these options primarily vest over a period of four years and have a 7-year term. These options are not exercisable for one year after the grant. Thereafter they become exercisable at the rate of 25% per annum, becoming fully exercisable after the fourth year. The following table sets forth information concerning subsidiary stock options held by the named executive officers as of December 31, 2023:
Outstanding Equity Awards at Fiscal Year-End
| Name | Number of Securities Underlying Unexercised Subsidiary Options (#) Exercisable | | Number of Securities Underlying Unexercised Subsidiary Options (#) Unexercisable | | Option Exercise Price ($) | Option Expiration Date | | | Wavelo | Ting | Wavelo | Ting | | | | Elliot Noss | 500,000 | - | 500,000 | - | $1.27 | 11/8/2029 | | | - | 945,945 | - | 1,054,055 | 6.00 | 1/15/2030 | | | 500,000 | 945,945 | 500,000 | 1,054,055 | | | | Davinder Singh | 75,000 | - | 75,000 | - | 1.27 | 11/8/2029 | | | - | 23,648 | - | 26,352 | 6.00 | 1/15/2030 | | | 75,000 | 23,648 | 75,000 | 26,352 | | | | Justin Reilly | 2,250,000 | - | 2,250,000 | - | 1.27 | 11/8/2029 | | | 2,250,000 | - | 2,250,000 | - | | | | Bret Fausett | 75,000 | - | - | - | 1.27 | 11/8/2029 | | | - | 23,648 | - | 1,352 | 6.00 | 1/15/2030 | | | 75,000 | 23,648 | - | 1,352 | | |
Outstanding Equity Awards at Fiscal Year-End
The stock option grants listed in the above table were issued under the Wavelo, Inc. 2022 Equity Compensation Plan ("Wavelo ECP") and the Ting, Inc. 2022 Equity Compensation Plan ("Ting ECP") adopted in 2022 and 2023 respectively. Under the Wavelo ECP, these options primarily vest over a period of three years and have a 7-year term. For the initial grants under the plan, the first 25% became exercisable within three months and vesting ratably monthly thereafter, after the third year. Under the Ting ECP, these options primarily vest over a period of four years and have a 7-year term.
Director Compensation
Director Compensation The required information regarding our director compensation is set forth in Part III, Item 10 “Directors, Executive Officers and Corporate Governance” of this proxy statement and is incorporated herein by reference.
Potential Payments on Termination or Change In Control
Potential Payments on Termination or Change In Control We have certain agreements that require us to provide compensation to our NEOs in the event of a termination of employment or a change in control of Tucows. These agreements are summarized following the table below and do not include any payment for termination for cause. The tables below show estimated compensation payable to each NEO upon various triggering events. Actual amounts can only be determined upon the triggering event.
Potential Payments on Termination or Change In Control
| Elliot Noss (1) | 2023 | Termination without Cause (Dollar amounts in U.S. dollars) | Change in Control (Dollar amounts in U.S. dollars) | | Compensation | | | | | Base Salary/Severance (2) | | $963,534 | $2,963,534 | | Bonus Plan (3) | | 832,083 | 832,083 | | Acceleration of Unvested Equity Awards (4) | | - | - | | Benefits (5) | | | | | Car Allowance | | 13,341 | 13,341 | | Healthcare Flexible Spending Account | | 4,002 | 4,002 | | | | $1,812,960 | $3,812,960 |
Potential Payments on Termination or Change In Control
| Davinder Singh (1) | 2023 | Termination without Cause (Dollar amounts in U.S. dollars) | Change in Control (Dollar amounts in U.S. dollars) | | Compensation | | | | | Base Salary/Severance (2) | | $321,178 | $- | | Bonus Plan (3) | | 179,845 | - | | Acceleration of Unvested Equity Awards (4) | | - | - | | Benefits (5) | | | | | Car Allowance | | 6,022 | - | | Healthcare Flexible Spending Account | | - | - | | | | $507,045 | $- |
Potential Payments on Termination or Change In Control
| Bret Fausett (1) | 2023 | Termination without Cause (Dollar amounts in U.S. dollars) | Change in Control (Dollar amounts inU.S. dollars) | | Compensation | | | | | Base Salary/Severance (2) | | $350,000 | $- | | Bonus Plan (3) | | 181,973 | - | | Acceleration of Unvested Equity Awards (4) | | - | - | | Benefits (5) | | | | | Car Allowance | | - | - | | Healthcare Flexible Spending Account | | - | - | | | | $531,973 | $- |
Potential Payments on Termination or Change In Control
| Justin Reilly (1) | 2023 | Termination without Cause (Dollar amounts in U.S. dollars) | Change in Control (Dollar amounts in U.S. dollars) | | Compensation | | | | | Base Salary/Severance (2) | | $484,238 | $- | | Bonus Plan (3) | | 290,543 | - | | Acceleration of Unvested Equity Awards (4) | | - | - | | Benefits (5) | | | | | Car Allowance | | - | - | | Healthcare Flexible Spending Account | | 1,235 | - | | | | $776,016 | $- |
Potential Payments on Termination or Change In Control
| | 2023 | Termination without Cause (Dollar amounts in U.S. dollars) | Change in Control (Dollar amounts in U.S. dollars) | | Compensation | | | | | Base Salary/Severance (2) | | $592,944 | $- | | Bonus Plan (3) | | 331,597 | - | | Acceleration of Unvested Equity Awards (4) | | - | - | | Benefits (5) | | | | | Car Allowance | | 11,118 | - | | Healthcare Flexible Spending Account | | 2,965 | - | | | | $938,624 | $- |
Potential Payments on Termination or Change In Control
| (1) For the purpose of the table we assumed an annual base salary at the executive’s level as of December 31, 2023. |
Potential Payments on Termination or Change In Control
| (2) Severance for Mr. Noss is compensation for one year plus one-month additional compensation for each completed year of service. Total compensation is capped at 24 months. For Messrs. Singh, Fausett, Reilly and Woroch, severance compensation is for six months plus one-month additional compensation for each completed year of service. Total compensation is capped at 24 months. |
Potential Payments on Termination or Change In Control
| (3) For the purpose of the table we assumed that the annual incentive bonus target as of December 31, 2023 had been achieved and that no overachievement bonus or special bonuses would be payable. |
Potential Payments on Termination or Change In Control
| (4) For purposes of the above table, we have assumed that if we terminate Mr. Noss without cause all his unvested options vest automatically and that for Messrs. Singh, Fausett, Reilly and Woroch, their options continue to vest through any severance period. On a change in control we have assumed that all unvested options for Mr. Noss vest automatically and that for Messrs. Singh, Fausett, Reilly and Woroch, their options continue to vest through and until the end of any severance period. Amounts disclosed in this table equal the closing market value of our common stock as of December 31, 2023, minus the exercise price, multiplied by the number of unvested shares of our common stock that would vest. The closing market value of our common stock on December 31, 2023 was $27.00. |
Potential Payments on Termination or Change In Control
| (5) Pay for unused vacation, extended health, matching registered retirement savings plan benefit, life insurance and accidental death and dismemberment insurance are standard programs offered to all employees and are therefore not reported. |
Pay Versus Performance
Pay Versus Performance The below table and related disclosure is provided in compliance with Item 402(v) of Regulation S-K (the “PvP disclosure rules”), which presents for the previous four fiscal years (i) the total and average total compensation set forth in the Summary Compensation Table (“SCT”) for the Chief Executive Officer and the named executive officers as a group (excluding the Chief Executive Officer), respectively, (ii) the total and average total “compensation actually paid” (as determined in accordance with the PvP disclosure rules) for the Chief Executive Officer (“Compensation Actually Paid to PEO”) and the named executive officers as a group (excluding the Chief Executive Officer) (“Average Summary Compensation Actually Paid to Non-PEO NEOs”), respectively, (iii) the Company’s cumulative Total Shareholder Return (“Cumulative TSR”) and the cumulative TSR (“Peer Group Cumulative TSR”) of our Item 402(v) peer group (“PvP Peer Group”) and (iv) Adjusted EBITDA.
Pay Versus Performance
| Unaudited | | | | | | | | | | | | | | | Value of Initial Fixed $100 Investment Based on: | | | | | Year (1) | Summary Compensation on Table Total for PEO | Compensation Actually Paid to PEO(2) | Average Summary Compensation on Table Total for Non-PEO NEOs(3) | Average Summary Compensation Actually Paid to Non-PEO NEOs(2) | Total Shareholder Return | Peer Group Total Shareholder Return(4) | Net Income (In Thousands) | Total Adjusted EBITDA (In Thousands)(5) | | (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | | 2023 | $1,094,128 | $2,009,475 | $625,357 | $983,846 | $44 | $119 | $(96,197) | $15,451 | | 2022 | 1,259,960 | 921,157 | 1,256,712 | 1,133,384 | 55 | 82 | (27,571) | 37,590 | | 2021 | 773,450 | 844,796 | 512,365 | 552,638 | 136 | 134 | 3,364 | 48,821 | | 2020 | 662,016 | 727,497 | 392,192 | 438,299 | 120 | 137 | 5,775 | 50,973 |
Pay Versus Performance
| (1) Mr. Noss served as Principal Executive Officer (“PEO”) for all three years. Messrs Singh, Reilly, Woroch and Fausett served as the Non-PEO NEOs for all three years. |
Pay Versus Performance
| (2) Represents Compensation Actually Paid (“CAP”) for our PEO and average CAP for our Non-PEO NEOs as a group, as computed in accordance with the PvP disclosure rules (determined as set forth below). The dollar amounts do not reflect the amounts of compensation ultimately earned or realized by our NEOs during the covered years. |
Pay Versus Performance
| Adjustment to Determine CAP for PEO | | | | | | Summary Compensation Table(a) | 2023 | 2022 | 2021 | 2020 | | SCT Total for PEO | $1,094,128 | $1,259,960 | $773,450 | $662,016 | | Subtract Grant Date Fair Value of Option Awards and Stock Awards Granted in Fiscal Year(b) | (273,800) | (561,542) | (125,719) | (90,315) | | Add Fair Value at Fiscal Year-End of Outstanding and Unvested Option Awards and Stock Awards Granted in Fiscal Year(c) | 522,180 | 525,790 | 142,214 | 128,144 | | Adjust for Change in Fair Value of Outstanding and Unvested Option Awards and Stock Awards Granted in Prior Fiscal Years(c) | 273,810 | (197,560) | 41,789 | 32,645 | | Adjust for Fair Value at Vesting of Option Awards and Stock Awards Granted in Fiscal Year That Vested During Fiscal Year(c) | 281,696 | - | - | - | | Adjust for Change in Fair Value as of Vesting Date of Option Awards and Stock Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year(c) | 111,462 | (105,491) | 13,062 | (4,994) | | Subtract Fair Value as of Prior Fiscal Year-End of Option Awards and Stock Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year(c) | - | - | - | - | | Add Value of Dividends or other Earnings Paid on Stock or Option Awards not Otherwise Reflected in Fair Value or Total Compensation | - | - | - | - | | TOTAL ADJUSTMENTS | 915,347 | (338,803) | 71,346 | 65,481 | | COMPENSATION ACTUALLY PAID | $2,009,475 | $921,157 | $844,796 | $727,497 |
Pay Versus Performance
| (a) We have not reported any amounts in our Summary Compensation Table with respect to “Change in Pension and Nonqualified Deferred Compensation” and, accordingly, the adjustments with respect to such items prescribed by the pay-versus-performance rules are not relevant to our analysis and no adjustments have been made. | | (b) The amounts reflect the aggregate grant-date fair value reported in the “Stock Awards” and “Option Awards” columns in the Summary Compensation Table for the applicable year, as well as the "Subsidiary Stock Options" column of the Other Compensation table breakdown. | | (c) In accordance with the requirements of Item 402(v) of Regulation S-K, the fair values of unvested and outstanding equity awards to our named executive officers were re-measured as of the end of each fiscal year, and as of each vesting date, during the years displayed in the table above. We approached the determination of fair value in the same way as we historically have determined fair value and fair values as of each measurement date were determined using valuation assumptions and methodologies (including expected term, volatility, and risk-free interest rates) that are generally consistent with those used to estimate fair value at the grant date under U.S. GAAP. See “Stock-based Compensation Expense” in the Notes to Consolidated Financial Statements contained in our 2023 Annual Report for additional details. |
Pay Versus Performance
| Adjustment to Determine CAP for Non-PEO Named Executive Officers as a Group | | | | | | Summary Compensation Table(a) | 2023 | 2022 | 2021 | 2020 | | Average SCT Total for Non-PEO Named Executive Officers | $625,357 | $1,256,712 | $512,365 | $392,192 | | Subtract Grant Date Fair Value of Option Awards and Stock Awards Granted in Fiscal Year(b) | (30,608) | (677,539) | (113,147) | (45,839) | | Add Fair Value at Fiscal Year-End of Outstanding and Unvested Option Awards and Stock Awards Granted in Fiscal Year(c) | 39,929 | 646,564 | 127,992 | 64,073 | | Adjust for Change in Fair Value of Outstanding and Unvested Option Awards and Stock Awards Granted in Prior Fiscal Years(c) | 133,551 | (94,589) | 20,622 | 8,159 | | Adjust for Fair Value at Vesting of Option Awards and Stock Awards Granted in Fiscal Year That Vested During Fiscal Year(c) | 3,801 | - | - | - | | Adjust for Change in Fair Value as of Vesting Date of Option Awards and Stock Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year(c) | 211,817 | 2,236 | 4,805 | 19,713 | | Subtract Fair Value as of Prior Fiscal Year-End of Option Awards and Stock Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year(c) | - | - | - | - | | Add Value of Dividends or other Earnings Paid on Stock or Option Awards not Otherwise Reflected in Fair Value or Total Compensation | - | - | - | - | | TOTAL ADJUSTMENTS | 358,489 | (123,328) | 40,273 | 46,107 | | COMPENSATION ACTUALLY PAID | $983,846 | $1,133,384 | $552,638 | $438,299 |
Pay Versus Performance
| (a) We have not reported any amounts in our Summary Compensation Table with respect to “Change in Pension and Nonqualified Deferred Compensation” and, accordingly, the adjustments with respect to such items prescribed by the pay-versus-performance rules are not relevant to our analysis and no adjustments have been made. | | (b) The amounts reflect the aggregate grant-date fair value reported in the “Stock Awards” and “Option Awards” columns in the Summary Compensation Table for the applicable year, as well as the "Subsidiary Stock Options" column of the Other Compensation table breakdown. | | (c) In accordance with the requirements of Item 402(v) of Regulation S-K, the fair values of unvested and outstanding equity awards to our named executive officers were re-measured as of the end of each fiscal year, and as of each vesting date, during the years displayed in the table above. We approached the determination of fair value in the same way as we historically have determined fair value and fair values as of each measurement date were determined using valuation assumptions and methodologies (including expected term, volatility, and risk-free interest rates) that are generally consistent with those used to estimate fair value at the grant date under U.S. GAAP. See “Stock-based Compensation Expense” in the Notes to Consolidated Financial Statements contained in our 2023 Annual Report for additional details. |
Pay Versus Performance
| (3) Amounts reflected in this column represents the average “Total Compensation” from the SCT and CAP for our Non-PEO NEOs as a group for the covered years. | | (4) The dollar amounts reported in column (g) represent the cumulative peer group TSR, weighted according to the respective companies’ stock market capitalization at the beginning of each period for which a return is indicated. The peer group used for this purpose is the following published industry index: RDG Internet Composite Index. |
Pay Versus Performance
| (5) We identified Adjusted EBITDA as our Company-Selected Measure that represents, in our view, the most important measure used to link CAP to performance. Adjusted EBITDA is a non-GAAP measure. |
Narrative to the Pay versus Performance Table
Narrative to the Pay versus Performance Table As discussed in our disclosures under the “Incentive bonus program” section of this proxy statement, Adjusted EBITDA was the only performance measure used directly in the calculation of compensation paid for Fiscal 2020, Fiscal 2021, Fiscal 2022 and Fiscal 2023. Beginning in Fiscal 2023, the Company has replaced Adjusted EBITDA incentive bonus targets with segment targets that are more individually aligned to each NEO's ability to impact Company performance and drive long-term EBITDA growth. The following graphic depicts the relationship of the CAP received by our PEO and other NEOs in Fiscal 2020, Fiscal 2021, Fiscal 2022 and Fiscal 2023 to the Company’s Cumulative TSR. It also compares the Company’s Cumulative TSR with its Peer Group’s Cumulative TSR.