DEF 14A of Dropbox, Inc.
Filed Apr 15, 2025 · FY20240001467623-25-000047
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Availability of Bylaws A copy of our bylaws is available via the SEC’s website at http://www.sec.gov. You may also contact our Corporate Secretary at the address set forth above for a copy of the relevant bylaw provisions regarding the requirements for making stockholder proposals and nominating director candidates.
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| Dropbox, Inc. Proxy Statement and Notice of 2025 Annual Meeting of Stockholders | 5 |
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Our business affairs are managed under the direction of our board of directors. Our board of directors consists of ten directors, nine of whom qualified as “independent” under the listing rules of the Nasdaq Stock Market (“Nasdaq”). Until the outstanding shares of our Class B common stock represent less than a majority of the combined voting power of our common stock, we will have a single class of directors who are each elected for one-year terms and until their successors are duly elected and qualified. When the outstanding shares of our Class B common stock represent less than a majority of the combined voting power of our common stock, we will have a classified board of directors consisting of three classes of approximately equal size, each serving staggered three-year terms. Our directors will be assigned by the then-current board of directors to a class. In determining the composition of our board, our board of directors and nominating and corporate governance committee are committed to ensuring that our directors maintain effective and independent oversight of our business and that they capably represent the interests of our stockholders. In addition, our nominating and corporate governance committee strives to maintain a balance of tenure on our board. Long-serving directors bring valuable experience and institutional knowledge, while newer directors contribute fresh perspectives and viewpoints. The following charts provide summary information about our continuing directors and director nominees with respect to independence and tenure. For additional information regarding our criteria for evaluating director nominees, see the section titled “Considerations in Evaluating Director Nominees.”
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| 7 of 8 | | Director nominees who are independent |
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| 5.8 Years | | Average tenure of director nominees |
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| 6 | Dropbox, Inc. Proxy Statement and Notice of 2025 Annual Meeting of Stockholders |
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Nominees for Director The following provides summary information about each of our director nominees as of March 31, 2025:
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| | ANDREW W. HOUSTON | | | AGE: 42 DIRECTOR SINCE: 2007 COMMITTEES: None CHAIR OF THE BOARD EXPERIENCE: Mr. Houston is one of our co-founders and has served as a member of our board of directors and our Chief Executive Officer since June 2007. Mr. Houston also currently serves as a member of the board of directors of Meta Platforms, Inc. Mr. Houston holds a B.S. in Electrical Engineering and Computer Science from the Massachusetts Institute of Technology. Mr. Houston was selected to serve on our board of directors because of the perspective and experience he brings as our Chief Executive Officer and as one of our co-founders. |
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| | LISA CAMPBELL | | | AGE: 61 DIRECTOR SINCE: 2019 COMMITTEES: Audit; Nominating & Corporate Governance INDEPENDENT DIRECTOR EXPERIENCE: Ms. Campbell has served as a member of our board of directors since August 2019. From July 2021 to August 2024, Ms. Campbell served as Chief Marketing Officer and Partner for OneTrust. From August 2017 to July 2021, Ms. Campbell served as Chief Marketing Officer and Senior Vice President of Business Strategy for Autodesk, Inc. From January 2015 to August 2017, Ms. Campbell served as Vice President, Industry Strategy and Marketing – Manufacturing at Autodesk, and she served as its Vice President, Industry Strategy and Marketing – Architecture, Engineering and Construction from February 2012 through January 2015. She has also held other senior positions at Autodesk, including managing its Global eCommerce business and Autodesk.com, and managing its Geospatial Business and infrastructure business. Prior to joining Autodesk in 2003, Ms. Campbell served in executive-level marketing positions at Evolve (now Oracle), Sterling Software Inc., and Digital Equipment Corporation. Ms. Campbell currently serves as a member of the board of directors for Dynatrace, Inc., an application performance management software company, Similarweb Ltd., a digital data and analytics company, and another privately held technology company. Ms. Campbell holds an M.B.A. from Babson College and a B.A. in Mathematics and Computer Science from Boston College. She was selected to serve on our board of directors because of her valuable expertise in business, industry, and marketing strategy. |
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| Dropbox, Inc. Proxy Statement and Notice of 2025 Annual Meeting of Stockholders | 7 |
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| | PAUL E. JACOBS, Ph.D | | | AGE: 62 DIRECTOR SINCE: 2016 COMMITTEES: Nominating & Corporate Governance (Chair) INDEPENDENT DIRECTOR EXPERIENCE: Dr. Jacobs has served as a member of our board of directors since April 2016. Since August 2023, Dr. Jacobs has served as Chief Executive Officer of Globalstar, Inc., or Globalstar, a telecom infrastructure provider. From April 2018 to May 2024, Dr. Jacobs served as Chief Executive Officer of VIREWIRX, Inc., formerly XCOM Labs, Inc., a wireless technology company. From March 2014 to March 2018, Dr. Jacobs served as Executive Chair for Qualcomm Incorporated, a semiconductor and telecommunications equipment company, or Qualcomm. From March 2009 to March 2018, Dr. Jacobs served as Chair of the board of directors for Qualcomm. From July 2005 to March 2014, Dr. Jacobs served as Chief Executive Officer for Qualcomm. Dr. Jacobs currently serves as a member of the board of directors of Globalstar and Arm Holdings plc, a microchip design company. Dr. Jacobs holds a Ph.D. in Electrical Engineering and Computer Science, an M.S. in Electrical Engineering, and a B.S. in Electrical Engineering and Computer Science from the University of California, Berkeley. Dr. Jacobs was selected to serve on our board of directors because of his extensive business, operations, and management experience. | | | WARREN JENSON | | | AGE: 68 DIRECTOR SINCE: 2025 COMMITTEES: Audit INDEPENDENT DIRECTOR EXPERIENCE: Warren Jenson has served as a member of our board of directors since January 2025. Mr. Jenson most recently acted as President and Chief Financial Officer of Nielsen Holdings plc, a firm specializing in audience measurement, data, and analytics, where he served from April 2023 to December 2024. From February 2012 to April 2023, Mr. Jenson worked at LiveRamp Holdings, Inc. (formerly known as Acxiom), a software-as-a-service company that provides identity and data connectivity services, where he most recently served as President, Chief Financial Officer and Executive Managing Director of International. Mr. Jenson has also held numerous C-suite positions with Electronic Arts (EA), Amazon.com, Delta Airlines, and NBC. Mr. Jenson currently serves as a member of the board of directors of DigitalOcean Holdings, Inc., a cloud service provider, Ripple Labs, Inc., a provider of cryptocurrency solutions for businesses, and Jobcase, Inc., an online job marketplace and social platform. Mr. Jenson has a B.S. in Accounting and a Master of Accountancy – Business Taxation from Brigham Young University. Mr. Jenson was selected to serve on our board of directors because of his breadth of experience leading and scaling companies through periods of transition and his track record of operational excellence. |
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| 8 | Dropbox, Inc. Proxy Statement and Notice of 2025 Annual Meeting of Stockholders |
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| | ANDREW MOORE, Ph.D | | | AGE: 60 DIRECTOR SINCE: 2023 COMMITTEES: Audit INDEPENDENT DIRECTOR EXPERIENCE: Dr. Moore has served as a member of our board of directors since December 2023. Since March 2023, Dr. Moore has served as the Founder and CEO of Lovelace AI, a startup AI company building products for national security. From January 2019 to January 2023, Dr. Moore served as General Manager and VP of Google Cloud Artificial Intelligence & Industry Solutions at Google LLC, a wholly owned subsidiary of Alphabet Inc., or Google. From September 2014 to January 2019, Dr. Moore served as the Dean of the School of Computer Science and as Professor of Computer Science and Robotics at Carnegie Mellon University. From October 2011 to July 2014, Dr. Moore served as VP of Engineering, Google Commerce at Google and from January 2006 to October 2011, he served as a Founding Director of Google’s Pittsburgh Engineering office. Prior to joining Google, Dr. Moore was an assistant professor and also professor of Computer Science and Robotics at Carnegie Mellon University from 1993-2006. Dr. Moore holds a Ph.D. in Computer Science and a B.A. in Mathematics and Computer Science from the University of Cambridge. Mr. Moore was selected to serve on our board of directors because of his deep academic experience, product knowledge, and engineering leadership. |
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| | ABHAY PARASNIS | | | AGE: 50 DIRECTOR SINCE: 2022 COMMITTEES: Talent and Compensation INDEPENDENT DIRECTOR EXPERIENCE: Mr. Parasnis has served as a member of our board of directors since March 2022. Since May 2022, Mr. Parasnis has served as Chief Executive Officer of Typeface Inc., a company that provides enterprise AI solutions. From July 2015 to February 2022, Mr. Parasnis served as Chief Technology Officer of Adobe Inc., or Adobe, during which time Mr. Parasnis also held additional titles, including Executive Vice President from January 2016 to February 2022, Chief Strategy Officer from February 2020 to December 2020, and Chief Product Officer from December 2020 to February 2022. Prior to joining Adobe, Mr. Parasnis served in executive level positions with Kony, Inc., Oracle Corporation and Microsoft Corporation. Mr. Parasnis also serves as a member of the board of directors of Schneider Electric SE, a French digital automation and energy management company traded on the Euronext (Paris) exchange. Mr. Parasnis holds a B.S. in Electronics & Telecommunications from the College of Engineering Pune in Pune, India and an Advanced Diploma in Computer Science from the National Institute of Information Technology. Mr. Parasnis was selected to serve on our board of directors because of his extensive technical, product, and operational expertise and his experience leading and growing a multi-product portfolio. |
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| Dropbox, Inc. Proxy Statement and Notice of 2025 Annual Meeting of Stockholders | 9 |
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| | KAREN PEACOCK | | | AGE: 52 DIRECTOR SINCE: 2019 COMMITTEES: Talent and Compensation INDEPENDENT DIRECTOR EXPERIENCE: Ms. Peacock has served as a member of our board of directors since August 2019. From July 2020 to October 2022, Ms. Peacock served as Chief Executive Officer for Intercom, Inc., or Intercom, a corporation that develops and markets business messaging and communication software, and from May 2017 to July 2020, Ms. Peacock served as Chief Operating Officer for Intercom. From January 2016 to March 2017, Ms. Peacock served as Senior Vice President, Small Business at Intuit Inc., or Intuit, and from 2014 to January 2016, she served as VP, General Manager of Intuit’s Employee Management Solutions division. Ms. Peacock has also held other senior roles at Intuit, including Vice President of Marketing and Product Management. Prior to joining Intuit in 2002, Ms. Peacock was Director of Product Management at Allegis Corporation and prior to that, was a management consultant with the Boston Consulting Group. Ms. Peacock holds an M.B.A. from Stanford Graduate School of Business and a B.A. in Applied Mathematics from Harvard University. She was selected to serve on our board of directors because of her valuable expertise in business, industry, and her extensive experience in executive-level operational roles. |
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| | MICHAEL SEIBEL | | | AGE: 42 DIRECTOR SINCE: 2020 COMMITTEES: Talent and Compensation INDEPENDENT DIRECTOR EXPERIENCE: Mr. Seibel has served as a member of our board of directors since December 2020. Mr. Seibel is Partner Emeritus at Y Combinator, an accelerator and investment company for early-stage technology companies, where he previously was a Partner from October 2014 to March 2025, and served as Managing Director of YC Early Stage. From February 2012 to August 2012, Mr. Seibel served as Chief Executive Officer of Socialcam, Inc., a social media company, and from June 2007 to October 2011, Mr. Seibel served as Chief Executive Officer of Justin.tv (now known as Twitch.tv), an online video broadcasting company. Mr. Seibel currently serves on the board of directors of Reddit, Inc., a community and discussion platform. Mr. Seibel holds a B.A. in Political Science from Yale University. Mr. Seibel was selected to serve on our board of directors because of his financial and managerial experience. |
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| 10 | Dropbox, Inc. Proxy Statement and Notice of 2025 Annual Meeting of Stockholders |
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Non-Continuing Directors The following provides summary information about our non-continuing directors:
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| | DONALD W. BLAIR | | | AGE: 66 DIRECTOR SINCE: 2007 COMMITTEES: Audit (Chair) LEAD INDEPENDENT DIRECTOR EXPERIENCE: Mr. Blair has served as a member of our Board of Directors since December 2017. From November 1999 to October 2015, Mr. Blair served as Executive Vice President and Chief Financial Officer for NIKE, Inc., or NIKE, a global footwear and apparel company. Prior to joining NIKE, for fifteen years, Mr. Blair served in a number of senior executive-level corporate and operating unit financial assignments for PepsiCo, Inc., or PepsiCo, a food and beverage company, including Chief Financial Officer for PepsiCo Japan (based in Tokyo) and Pepsi-Cola International’s Asia Division (based in Hong Kong). Mr. Blair served as a member of the board of directors for Corning Incorporated, a global manufacturing company, from July 2014 to May 2024. Mr. Blair holds an M.B.A. and a B.S. in Economics from the University of Pennsylvania. Mr. Blair was selected to serve on our board of directors because of his extensive financial expertise, and business management and governance experience. |
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| | SARA MATHEW | | | AGE: 69 DIRECTOR SINCE: 2021 COMMITTEES: Audit; Talent and Compensation (Chair) INDEPENDENT DIRECTOR EXPERIENCE: Ms. Mathew has served as a member of our board of directors since July 2021. From January 2010 to October 2013, Ms. Mathew served as Chief Executive Officer of Dun and Bradstreet Corporation, or Dun and Bradstreet, a commercial data analytics company, as its President and Chief Operating Officer from March 2007 to January 2010 and as its Chief Financial Officer from August 2001 to March 2007. Ms. Mathew also served as a member of the board of directors of Dun and Bradstreet from January 2008 to October 2013, including as Chair from July 2010 to October 2013. Prior to joining Dun and Bradstreet, Ms. Mathew served for eighteen years in a number of executive-level finance positions for the Procter & Gamble Company, or P&G, a consumer goods company. Ms. Mathew currently serves as a member of the board of directors of State Street Corporation, a financial services company. Ms. Mathew previously served as a member of the board of directors of Carnival Corporation & plc, a global leisure travel company, Federal Home Loan Mortgage Company, a government-sponsored mortgage securitization company, XOS, Inc., a manufacturer of electric trucks, Reckitt Benckiser, a consumer products company, Avon Products, Inc. a beauty, household and personal care products manufacturer, Campbell Soup Company, Inc., a consumer food company, and Shire PLC, a biopharmaceutical company. Ms. Mathew holds an M.B.A. from Xavier University, a graduate degree in accounting from the Institute of Cost and Works Accountants from India, and a B.S. in physics, mathematics and chemistry from the University of Madras. Ms. Mathew was selected to serve on our board of directors because of her experience leading multi-national enterprises and valuable financial, strategy and operational expertise. |
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| Dropbox, Inc. Proxy Statement and Notice of 2025 Annual Meeting of Stockholders | 11 |
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Director Independence Under the listing rules of Nasdaq, independent directors must comprise a majority of a listed company’s board of directors. In addition, Nasdaq rules require that, subject to specified exceptions, each member of a listed company’s audit, talent and compensation, and nominating and corporate governance committees be independent. Under Nasdaq rules, a director will only qualify as an “independent director” if, in the opinion of the company’s board of directors, the director does not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. Our board of directors has undertaken a review of the independence of each director. Based on information provided by each director concerning his or her background, employment, and affiliations, our board of directors has determined that Drs. Jacobs and Moore, Messrs. Blair, Jenson, Parasnis and Seibel, and Mss. Campbell, Mathew and Peacock do not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director and that each of these directors is “independent” as that term is defined under Nasdaq listing rules. In making these determinations, our board of directors considered the current and prior relationships that each non-employee director has with our company and all other facts and circumstances our board of directors deemed relevant in determining their independence, including the beneficial ownership of our capital stock by each non-employee director, and the transactions involving them, if any, described in the section titled “Certain Relationships and Related Party Transactions.” Board Leadership Structure and Role of the Lead Independent Director Mr. Houston currently serves as both the chair of our board of directors and as our Chief Executive Officer. As our co-founder, Mr. Houston is best positioned to identify strategic priorities, lead critical discussion, and execute our business plans. Our board of directors has adopted Corporate Governance Guidelines that provide that one of our independent directors should serve as our lead independent director at any time when the chair of our board of directors is not independent, including when our Chief Executive Officer serves as the chair of our board of directors. Because Mr. Houston is our chair and is not an “independent” director as defined in Nasdaq’s listing rules, our board of directors has determined that it is advisable and in the best interests of stockholders to have a lead independent director to, among other things, preside over meetings of the independent directors and help set the agenda for board meetings. Mr. Blair has served as lead independent director since March 2020. In light of Mr. Blair's departure from the board, our board of directors has appointed Ms. Peacock to serve as lead independent director to succeed Mr. Blair following the end of his term at the Annual Meeting. Our lead independent director presides over periodic meetings of our independent directors, consults with Mr. Houston on the agenda for meetings of the board, serves as a liaison between Mr. Houston and our independent directors, and performs such additional duties as our board of directors may otherwise determine and delegate. The lead independent director’s responsibilities include: •presiding over all meetings of the board of directors at which the chair is not present; •calling separate meetings of the independent directors and determining the agenda and serving as chair of meetings of independent directors; •reporting to our Chief Executive Officer and chair regarding feedback from executive sessions; and •serving as spokesperson for the company if requested. Only independent directors serve on the audit committee, the talent and compensation committee, and the nominating and corporate governance committee of our board of directors. Our independent directors meet at least quarterly in executive sessions chaired by the lead independent director, which include discussions and recommendations regarding guidance to be provided to the Chief Executive Officer, and such topics as the independent directors may determine. As a result of the board of directors’ committee system and the existence of a majority of independent directors, combined with a strong lead independent director with significant responsibilities and the company’s robust corporate governance policies and procedures, the board of directors believes it maintains effective oversight of our business operations, including independent oversight of our financial statements and risk management, executive compensation, selection of director candidates, and corporate governance programs. We believe that the leadership structure of our board of directors, including the role of a strong lead independent director, as well as the robust independent committees of our board of directors is appropriate and enhances our board of directors’ ability to effectively carry out its roles and responsibilities on behalf of our stockholders. Mr. Houston’s combined role leverages his deep involvement with the company’s business, and his history as a co-founder of the company with knowledge of the company’s development and culture enables strong leadership, creates clear accountability and enhances our ability to communicate our message and strategy clearly and consistently to stockholders.
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| 12 | Dropbox, Inc. Proxy Statement and Notice of 2025 Annual Meeting of Stockholders |
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Board Committees Our board of directors has established an audit committee, a talent and compensation committee, and a nominating and corporate governance committee. The composition and responsibilities of each of the committees of our board of directors is described below. Members will serve on these committees until their resignation or until as otherwise determined by our board of directors.
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| Director | Audit | Talent and Compensation | Nominating and Corporate Governance | | Andrew W. Houston | | | | | Donald W. Blair | | | | | Lisa Campbell | | | | | Paul E. Jacobs, Ph.D | | | | | Warren Jenson | | | | | Sara Mathew | | | | | Andrew Moore, Ph.D | | | | | Abhay Parasnis | | | | | Karen Peacock | | | | | Michael Seibel | | | | | Number of Meetings | 5 | 5 | 3 | | Committee member | Committee chair | Financial expert | |
Employee Training
| Principle | Description | | Pay Mix | Our director compensation policy consists of a balance of cash and equity, with an emphasis on equity over cash, in order to better align the interests of our directors with that of our stockholders. | | Total Compensation Limit | Our director compensation policy includes a maximum annual limit of $1,200,000 of cash compensation and equity awards that may be paid, issued, or granted to a non-employee director in any fiscal year. The maximum limit does not reflect the intended size of any potential compensation or equity awards to our non-employee directors. Any cash compensation paid or equity awards granted to a person for his or her services as an employee, or for his or her services as a consultant (other than as a non-employee director), will not count for purposes of the limitation. For purposes of this limitation, the value of equity awards is based on the grant date fair value (determined in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”)). | | Regular Review | With advice from Compensia, our talent and compensation committee regularly reviews the amount and form of director compensation to ensure consistency with prudent governance practices and comparability with our peer group. | | Board Leadership Compensation | Our director compensation policy provides additional compensation for leadership positions on the board of directors, including lead independent director and committee chair roles, to account for the added time and effort associated with these positions. |
Role of Compensation Consultant
Role of Compensation Consultant The talent and compensation committee engages an external compensation consultant to assist the committee by providing information, analysis, and other advice relating to our executive compensation program and the decisions resulting from its annual executive compensation review. The compensation consultant reports directly to the talent and compensation committee and its chair and serves at the discretion of the talent and compensation committee, which reviews the engagement annually. For 2024, the talent and compensation committee retained Compensia to serve as its compensation advisor to advise on executive and director compensation matters, including competitive market pay practices for our executive officers, and data analysis and selection of the compensation peer group. During 2024, Compensia attended talent and compensation committee meetings and provided the following services: •Consulted with the talent and compensation committee chair and other members between talent and compensation committee meetings; •Provided competitive market data based on the compensation peer group for our executive officer positions, and evaluation of how the compensation we pay our executive officers compares both to our performance and to how the companies in our compensation peer group compensate their executives; •Provided competitive market data based on the compensation peer group for non-employee directors, and evaluation of how the compensation we pay our non-employee directors compares to companies in our compensation peer group; •Reviewed and analyzed base salary levels, annual incentive bonus opportunities, and long-term equity incentive compensation opportunities of our executive officers; •Assessed executive compensation trends within our industry, and updates on corporate governance and regulatory issues and developments; •Reviewed our executive compensation disclosure; •Assessed compensation risk to determine whether our compensation policies and practices are reasonably likely to have a material adverse impact on the company; and •Supported on other ad hoc matters throughout the year. Compensia did not provide any services to us other than the consulting services to the talent and compensation committee. The talent and compensation committee regularly reviews the objectivity and independence of the advice provided by its compensation consultant on executive compensation matters. The talent and compensation committee has evaluated Compensia’s engagement, and based on the six factors for assessing independence and identifying potential conflicts of interest that are set forth in Rule 10C-1(b)(4) of the Exchange Act, Rule 5605(d)(3)(D) of the Nasdaq Marketplace Rules, and such other factors as were deemed relevant under the circumstances, has determined that its relationship with Compensia and the work of Compensia on behalf of the talent and compensation committee did not raise any conflict of interest, and that Compensia is independent as defined in Rule 5605(a)(2) of the Nasdaq Marketplace Rules.
Competitive Positioning
Competitive Positioning For purposes of assessing our executive compensation against the competitive market, the talent and compensation committee reviews and considers the compensation levels and practices of a select group of peer companies. This compensation peer group consists of technology companies that are similar to us in terms of revenue, market capitalization, geographical location, and industry sector. The companies in the compensation peer group for 2024 were approved in August 2023 on the basis of their similarity to us, as determined using the following criteria, each as of July 2023: •revenue – approximately 0.4x to approximately 2.5x our last four fiscal quarter revenue of approximately $2.4 billion (approximately $949 million to $5.9 billion); •market capitalization – approximately 0.2x to approximately 5.0x our market capitalization of approximately $9.3 billion (approximately $1.9 billion to $46.6 billion); •industry sector – internet software and services, software, communication equipment, and certain SaaS companies not classified as such; and •relevance – software-as-a-service model or product similarity. In selecting the 2024 compensation peer group, we chose companies that resulted in us being near the median of the group as of July 2023, in terms of both revenue and market capitalization.
Competitive Positioning
| 2023 Compensation Peer Group | Changes to Peer Group | 2024 Compensation Peer Group | | Affirm Holdings | Added: | Affirm Holdings | | AppLovin | Elastic | AppLovin | | Box | Informatica | Box | | Citrix Systems | Zoom Communications | DocuSign | | DocuSign | | Dolby Laboratories | | Dolby Laboratories | | Elastic | | Etsy | | Etsy | | F5 | | F5 | | GoDaddy | | GoDaddy | | HubSpot | | HubSpot | | Nutanix | | Informatica | | Okta | Removed: | Nutanix | | Paycom Software | Citrix Systems | Okta | | Pinterest | Zendesk | Paycom Software | | Pure Storage | | Pinterest | | RingCentral | | Pure Storage | | Roku | | RingCentral | | Splunk | | Roku | | Teradata | | Splunk | | Zendesk | | Teradata | | | | Zoom Communications |
Competitive Positioning
The compensation practices of the compensation peer group were the primary guide used by the talent and compensation committee in 2024 to compare the competitiveness of each compensation element and target total direct compensation (base salary, target annual cash bonus opportunities, and long-term equity incentive compensation). To analyze the compensation practices of our compensation peer group, Compensia gathered data from public filings of the peer group companies, as well as from the Radford Global Technology Survey. This market data was then used as a reference point for the talent and compensation committee to assess our current compensation levels in the course of its
Competitive Positioning
| Dropbox, Inc. Proxy Statement and Notice of 2025 Annual Meeting of Stockholders | 39 |
Competitive Positioning
deliberations on compensation forms and amounts. The talent and compensation committee does not engage in formal benchmarking against other companies’ compensation programs or practices to establish our compensation levels or make specific compensation recommendations with respect to our executive officers, including our named executive officers. The talent and compensation committee reviews our compensation peer group each year and adjusts its composition if warranted, taking into account changes in both our business and the businesses of the companies in the peer group.
Compensation Setting
| •Our executive compensation program objectives; •Our performance against the financial, operational, and strategic objectives established by the talent and compensation committee and our board of directors; •Each individual executive officer’s knowledge, skills, experience, qualifications, and tenure relative to other similarly-situated executives at the companies in our compensation peer group; •The scope of each executive officer’s role and responsibilities compared to other similarly-situated executives at the companies in our compensation peer group; •The prior performance of each individual executive officer, based on a subjective assessment of their contributions to our overall performance, ability to lead their business unit or function, and work as part of a team, all of which reflect our core values; | •The potential of each individual executive officer to contribute to our long-term financial, operational, and strategic objectives; •Our Chief Executive Officer’s compensation relative to that of our executive officers, and compensation parity among our executive officers; •Our financial performance and profile relative to our compensation peers; •The compensation practices of our compensation peer group and the positioning of each executive officer’s compensation in a ranking of peer company compensation levels based on an analysis of competitive market data; and •The recommendations of our Chief Executive Officer with respect to the compensation of other executive officers. |
Annual Cash Bonuses
Annual Cash Bonuses In January 2024, the talent and compensation committee, with input from management, adopted our 2024 annual cash bonus plan (the “2024 Cash Bonus Plan”), which was designed to provide financial incentives for us to meet or exceed the pre-established target levels for revenue and operating margin established under our 2024 annual operating plan. The 2024 Cash Bonus Plan is funded based on our actual achievement against the pre-established target levels for the applicable corporate performance measure.
Target Annual Cash Bonus Opportunities
Target Annual Cash Bonus Opportunities Under the 2024 Cash Bonus Plan, cash bonus payments were based upon an eligible percentage of each participant’s base salary. In March 2024, the talent and compensation committee reviewed and approved the target annual cash bonus opportunities of our executive officers, taking into consideration the recommendations of our Chief Executive Officer (except with respect to his own target annual cash bonus opportunity) as well as the other factors described in “Compensation-Setting Process—Compensation Setting” above. Based on this review, the talent and compensation committee decided to make no adjustment to the 2023 target annual cash bonus opportunity (as a percentage of base salary) of each of our named executive officers. The 2024 target annual cash bonus opportunities for our named executive officers were:
Target Annual Cash Bonus Opportunities
| Named Executive Officer | Target Annual Cash Bonus Opportunity (as a Percentage of Base Salary) | 2024 Target Annual Cash Bonus Opportunity ($)(1) | | Andrew W. Houston | 100% | 756,489 | | Timothy Regan | 85% | 476,000 | | Bart E. Volkmer | 75% | 390,000 | | Eric Cox | 100% | 500,000 |
Target Annual Cash Bonus Opportunities
(1) Target annual cash bonus amount for Mr. Houston is prorated for his salary changes in 2024.
Target Annual Cash Bonus Opportunities
| 42 | Dropbox, Inc. Proxy Statement and Notice of 2025 Annual Meeting of Stockholders |
Target Annual Cash Bonus Opportunities
Potential annual cash bonus payments for our executive officers under the 2024 Cash Bonus Plan ranged from zero to 187.5% of their target annual cash bonus opportunity.
Target Annual Cash Bonus Opportunities
| Individual Bonus Target % of Salary | | | Corporate Performance 0% - 125% | | | Individual Performance 0% -150% | | Bonus Payout 0% - 187.5% of Target | | | | | | | | | | | | | Revenue (67% weight) | | | Non-GAAP Operating Margin (33% weight) | | | | |
Corporate Performance Measure
Corporate Performance Measure The talent and compensation committee approved annual revenue (weighted 67%) and non-GAAP operating margin (weighted 33%) as components of the corporate performance measure under the 2024 Cash Bonus Plan because we believe incorporating both annual revenue and non-GAAP operating margin aligns with our emphasis on driving profitable growth. For purposes of the 2024 Cash Bonus Plan, “annual revenue” was calculated by excluding the impact of foreign exchange from our annual revenue reflected in our audited financial statements for the 2024 fiscal year. For purposes of the 2024 Cash Bonus plan, “non-GAAP operating margin” was calculated by excluding the impact of stock-based compensation expense, acquisition-related and other expenses, amortization of acquired intangible assets, workforce reduction expenses, and net gains and losses on real estate assets. These adjustments were made to provide a clearer view of our core operating performance for the year. In January 2024, the talent and compensation committee set the target performance levels under the 2024 Cash Bonus Plan at (i) $2,565 million for annual revenue and (ii) 33.1% for non-GAAP operating margin. In addition, the talent and compensation committee approved the performance matrix for funding the 2024 Cash Bonus Plan (as described below), with a 10% reduction to actual payouts to our named executive officers if the company’s stock-based compensation expense exceeded $360 million for the 2024 fiscal year. With respect to the annual revenue component, the bonus funding was 0% if we did not achieve annual revenue at the threshold revenue performance level of $2,488 million. At 97% of the target revenue performance level, the annual revenue bonus funding percentage was 75%. For annual revenue above the 97% of target performance level and below 98% the target performance level, the annual revenue bonus funding percentage increased linearly up to an annual revenue bonus funding percentage of 95%. For revenue performance ± 2% of the target revenue number, the annual revenue bonus funding percentage increased linearly from 95% to 105%. For revenue performance from 102% of the target revenue performance level to 103% of the target revenue performance level, the annual revenue bonus funding percentage increased linearly up to 125%. The maximum annual revenue bonus funding percentage is 125%. With respect to the non-GAAP operating margin component, the bonus funding was 0% if we did not achieve non-GAAP operating margin at the threshold performance level of 29.8%. At the threshold non-GAAP operating margin performance level, the non-GAAP operating margin bonus funding percentage was 75%. For non-GAAP operating margin above the threshold performance level, the non-GAAP operating margin bonus funding percentage increased linearly up to the maximum non-GAAP operating margin bonus funding percentage of 125%.
Individual Performance Factor
Individual Performance Factor In determining the amount of annual cash bonus payments under the 2024 Cash Bonus Plan, the talent and compensation committee considered an evaluation of each bonus eligible executive officer’s individual performance for the year. Generally, this evaluation involved, in the case of our Chief Executive Officer, an evaluation of his performance by the talent and compensation committee and, in the case of our other executive officers, an evaluation by our Chief Executive Officer. These evaluations were based on an overall subjective assessment of each executive officer's performance based on company priorities for the year, and no single factor was determinative in setting bonus payout levels, nor was the impact of any individual factor on the bonus quantifiable. Dropbox operates in a highly competitive industry and we set a high bar for performance expectations for each one of our named executive officers. Our named executive officers are evaluated based on their overall performance, impact, and results.
2024 Annual Cash Bonus Decisions
2024 Annual Cash Bonus Decisions In March 2025, the talent and compensation committee, based on its evaluation, determined the size of the bonus pool based on our performance during 2024 and determined the cash bonus payments for our bonus eligible executive officers, including our named executive officers, pursuant to the 2024 Cash Bonus Plan. The talent and compensation committee reviewed our actual annual revenue performance for 2024 and determined that, for purposes of the calculation used for the 2024 Cash Bonus Plan, we had achieved annual revenue of $2,545 million, which was 99% of our annual revenue target for the year. In addition, the talent and compensation committee determined that we had achieved non-GAAP operating margin of 36.1% (for purposes of the calculation used for the 2024 Cash Bonus Plan) compared to our target of 33.1% for the year. Our revenue and non-GAAP operating margin performances resulted in a corporate performance measure of 104.5%. Management subsequently reviewed our actual annual revenue and non-GAAP operating margin performance and determined that a portion of our results were driven by cost savings related to our workforce reduction in October 2024. As a result, management recommended that the talent and compensation committee exercise its discretion to cap the bonus funding percentage for the corporate performance measure at 100% of target. The talent and compensation committee approved management's proposal, resulting in a bonus funding percentage of 100% with respect to the corporate performance measure. Our Chief Executive Officer evaluated the achievement of each other bonus eligible executive officer and formulated a recommendation for each such executive officer’s annual cash bonus payment for consideration by the talent and compensation committee. These recommendations were based on our Chief Executive Officer’s subjective assessment of each individual’s contributions taking into account company priorities for the year. In the case of our Chief Executive Officer, the talent and compensation committee evaluated our financial and operational performance for 2024 and formulated a recommended annual cash bonus payment for him based on the subjective assessment of his performance. Based on these evaluations, the talent and compensation committee approved the annual cash bonus payments for our named executive officers for 2024 in the table below, including adjustments for the named executive officer's individual
2024 Annual Cash Bonus Decisions
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2024 Annual Cash Bonus Decisions
performance factor. Since stock-based compensation expense did not exceed $360 million for the 2024 fiscal year, there was no reduction to the annual cash bonus payments.
2024 Annual Cash Bonus Decisions
| Named Executive Officer | Target Annual Cash Bonus Payment ($) | Annual Cash Bonus Payment ($) | Percentage of Target Annual Cash Bonus Actually Paid | | Andrew W. Houston | 756,489 | 551,480 | 73% | | Timothy Regan | 476,000 | 623,000 | 131% | | Bart E. Volkmer | 390,000 | 284,000 | 73% | | Eric Cox | 500,000 | 365,000 | 73% |
2024 Annual Cash Bonus Decisions
The annual cash bonus payments made to our named executive officers for 2024 are set forth in the “Summary Compensation Table for Fiscal Year 2024” below.
Long-Term Equity Incentive Compensation
Long-Term Equity Incentive Compensation We view long-term equity incentive compensation as a critical element of our executive compensation program. The realized value of these equity awards bears a direct relationship to our stock price, and, therefore, these awards are an incentive for our executive officers to create value for our stockholders. Equity awards also help us retain qualified executive officers in a competitive market. The amount and forms of the equity awards granted to our executive officers are determined after considering the factors described in “Compensation-Setting Process—Compensation Setting” above. The size of the equity awards is also intended to be competitive and result in target total direct compensation opportunities that we believe are reasonable and appropriate taking into consideration the factors described in the preceding sentence. In March 2024, the talent and compensation committee approved equity grants in the form of restricted stock unit awards (“RSUs”) to Messrs. Regan and Volkmer, each of which were effective April 1, 2024. Mr. Cox received a new hire award, which was granted effective January 1, 2024. Differentiation was made among our executive officers based on the talent and compensation committee’s review of the competitive market data for their respective positions, internal equity, past performance, and expected future contributions. Mr. Houston did not receive an equity grant in 2024 in light of his significant ownership position in the company and the Co-Founder Grant he received in 2017. The equity awards granted to our named executive officers in 2024 were as follows:
Long-Term Equity Incentive Compensation
| Named Executive Officer | RSUs(1) | Aggregate Grant Date Fair Value ($) | | Andrew W. Houston | — | — | | Timothy Regan | 207,180 | 5,034,474 | | Bart E. Volkmer | 145,026 | 3,524,132 | | Eric Cox | 377,883 | 11,139,991 |
Long-Term Equity Incentive Compensation
(1)The time-based RSU awards granted to Messrs. Regan, Volkmer and Cox vest over a four-year period in equal quarterly installments. The equity awards granted to our named executive officers during 2024 are set forth in the “Summary Compensation Table for Fiscal Year 2024” and under “Grants of Plan-Based Awards in 2024” below.
Practices with Regard to Timing of Equity Awards
Practices with Regard to Timing of Equity Awards Our board and the talent and compensation committee of our board does not take material nonpublic information into account when determining the timing and terms of equity grants. We do not have a policy or practice to time equity grants based on the release of material non-public information. We did not grant stock options to any of our named executive officers in 2024 and have never granted stock appreciation rights.
Compensation Recovery Policy
Compensation Recovery Policy In August 2023, the talent and compensation committee adopted a compensation recovery ("clawback") policy in compliance with Nasdaq and SEC requirements. Consistent with the requirements, for compensation received after October 2, 2023 and during the applicable covered period (which generally includes the three completed fiscal years prior to the restatement date), the clawback policy requires the company to recover excess incentive-based compensation from current and former executives that is granted, earned or vested based upon the attainment of a financial reporting measure in the event of an accounting restatement due to material non-compliance with any financial reporting requirement under U.S. securities laws that was in excess of what would have been received had the incentive-based compensation been determined based on the restated amounts. Employment Arrangements We have entered into written employment letters with our Chief Executive Officer and each of our other executive officers. Each of these arrangements was approved on our behalf by the talent and compensation committee or our board of directors. In filling each of our executive positions, our board of directors or the talent and compensation committee, as applicable, recognized that we would need to develop competitive compensation packages to attract qualified candidates in a dynamic labor market. At the same time, our board of directors and the talent and compensation committee were sensitive to the need to integrate new executive officers into the executive compensation structure, balancing both competitive and internal equity considerations. Each of our employment arrangements provides for “at will” employment (meaning that either we or the executive officer may terminate the employment relationship at any time with or without cause) and sets forth the initial compensation arrangements for the executive officer, including an initial base salary, participation in our employee benefit programs, an equity award recommendation, and, in some cases, sign-on bonuses and reimbursement or payment of relocation expenses. These employment arrangements also prohibit the executive officer from engaging directly or indirectly in competition with us during their employment, diverting our customers to a competitor, or disclosing our confidential information or business practices, and recruiting or soliciting any of our employees for a period after their employment. Our executive officers are also eligible to enter into change in control and severance agreements with the company. These post-employment compensation terms are discussed in “Post-Employment Compensation” below. Post-Employment Compensation We have entered into change in control and severance agreements with each of our executive officers, including each of our named executive officers. These agreements provide these individuals with certain protection in the event of their termination of employment under specified circumstances, including following a change in control of the company. We believe that these protections were necessary to induce these individuals to accept a demanding position with the company and help retain them. These arrangements provide reasonable compensation to an executive officer if they leave
Taxation of Parachute Payments and Deferred Compensation
Taxation of Parachute Payments and Deferred Compensation We do not provide, and have no obligation to provide, any of our named executive officers with a “gross-up” payment for any tax liability he or she might owe because of the application of Sections 280G, 4999 or 409A of the Code. If any of the payments or benefits provided for under the change in control and severance agreements or otherwise payable to a named executive officer would constitute “parachute payments” within the meaning of Section 280G of the Code and could be subject to the related excise tax, he or she would receive either full payment of such payments and benefits or such lesser amount that would cause no portion of the payments and benefits being subject to the excise tax, whichever results in the greater after-tax benefits to our named executive officer.
Accounting for Stock-Based Compensation
restricted stock units and restricted stock awards, based on the grant date “fair value” of these awards. This calculation is performed for accounting purposes and reported in the compensation tables below, even though our executive officers may realize no value from their awards. ASC Topic 718 also requires companies to recognize the compensation cost of their share-based payment awards in their income statements over the period that an executive officer is required to render service in exchange for the option or other award. We estimated the grant date fair value of Mr. Houston’s Co-Founder Grant using a model based on multiple stock price paths developed through the use of a Monte Carlo simulation that incorporates into the valuation the possibility that the Stock Price Targets may not be satisfied. The average grant date fair value of the Co-Founder Grant was estimated to be $10.60 per share, and we will recognize total stock-based compensation expense of $109.6 million over the requisite service period of each tranche, which ranged from 2.9 to 6.9 years, using the accelerated attribution method. As of December 31, 2024, Mr. Houston's Co-Founder Grant has been fully recognized, and no further stock-based compensation expense related to the Co-Founder Grant remains. The fair value of the Co-Founder Grant, whereby vesting is contingent on meeting certain market conditions was estimated using the following assumptions:
Michael Seibel
Compensation Risk Assessment Our management regularly assesses and discusses with the talent and compensation committee our compensation programs, policies, and practices for our employees as they relate to our risk management. In this regard, we undertake a risk review of our employee compensation programs, policies, and practices (including our executive compensation program) each year to determine whether these programs, policies, and practices contain features that might create undue risks or encourage unnecessary and excessive risk-taking that could threaten our value. Based upon this review, we believe that any risks arising from such programs, policies, and practices are not reasonably likely to have a material adverse effect on us. Our employees’ base salaries are fixed in amount and thus we do not believe that they encourage excessive risk-taking. While performance-based cash bonuses and sales commissions focus on achievement of short-term or annual goals, which may encourage the taking of short-term risks at the expense of long-term results, we believe that our compensation policies and the risk mitigation features of our cash bonus plans help mitigate this risk and our performance-based cash bonuses and sales commissions are limited, representing a small portion of the total compensation opportunities available to most non-executive employees. We also believe that our performance-based cash bonuses and sales commissions appropriately balance risk and the desire to focus our employees on specific short-term goals important to our success, and do not encourage unnecessary or excessive risk-taking. A significant proportion of the compensation provided to most of our employees involves long-term incentive compensation in the form of equity awards that we believe are important to help further align our employees’ interests with those of our stockholders. These equity awards directly tie their expectations of compensation to their contributions to the long-term value of our company. We do not believe that these equity awards encourage unnecessary or excessive risk-taking given their multi-year vesting schedules and since their ultimate value is tied to our stock price.
Michael Seibel
| Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($)(1) | Non-equity Incentive Plan Compensation ($)(2) | All Other Compensation ($)(3) | Total ($) | | Andrew W. Houston Chief Executive Officer and Co-Founder | 2024 | 756,250 | — | — | 551,480 | 398,775(4) | 1,706,505 | | | 2023 | 625,000 | — | — | 485,000 | 429,577(4) | 1,539,577 | | | 2022 | 625,000 | — | — | 500,000 | 21,000(4) | 1,146,000 | | Timothy Regan Chief Financial Officer | 2024 | 560,000 | — | 5,034,474(1) | 623,000 | 6,000 | 6,223,474 | | | 2023 | 560,000 | — | 4,761,200(1) | 348,000 | 6,000 | 5,675,200 | | | 2022 | 518,333 | — | 4,692,710(1) | 270,000 | 6,000 | 5,487,043 | | Bart E. Volkmer Chief Legal Officer | 2024 | 520,000 | — | 3,524,132(1) | 284,000 | 6,000 | 4,334,132 | | | 2023 | 508,570 | — | 3,438,639(1) | 287,000 | 6,000 | 4,240,209 | | | 2022 | 475,000 | — | 3,128,474(1) | 245,000 | 6,000 | 3,854,474 | | Eric Cox Chief Commercial Officer | 2024 | 500,000 | — | 11,139,991 | 365,000 | 6,000 | 12,010,991 | | | 2023 | 20,833 | — | — | — | — | 20,833 | | | 2022 | — | — | — | — | — | — |
Amount of Payments Upon Termination at 2024 Year-End
Amount of Payments Upon Termination at 2024 Year-End The following table describes the payments that would have been provided to each of our named executive officers in the event that they were involuntarily terminated by Dropbox without cause or resigned for good reason outside of a change in control context, assuming such termination occurred on December 31, 2024.
Amount of Payments Upon Termination at 2024 Year-End
| Name | Base Salary Component ($) | Cash Bonus Component ($) | Value of Accelerated Equity Awards ($)(1) | Value of Benefits ($) | Total ($) | | Andrew W. Houston | 400,000 | — | — | 15,711 | 415,711 | | Timothy Regan | 280,000 | — | 1,510,351 | 15,777 | 1,806,128 | | Bart E. Volkmer | 260,000 | — | 1,927,426 | 15,777 | 2,203,203 | | Eric Cox | 250,000 | — | 709,455 | 15,777 | 975,231 |
Amount of Payments Upon Termination at 2024 Year-End
(1)Value based on a per share price of $30.04, which was the closing price for a share of our Class A common stock, as reported on December 31, 2024, the last trading day of the year. The following table describes the payments that would have been provided for each of our named executive officers upon termination of employment in connection with a change in control of Dropbox as described above, assuming such termination had occurred on December 31, 2024.
Amount of Payments Upon Termination at 2024 Year-End
| Name(1) | Base Salary Component ($) | Cash Bonus Component ($) | Value of Accelerated Equity Awards ($)(2) | 280G Gross-up ($) | Value of Benefits ($) | Total ($) | | Andrew W. Houston | 800,000 | 756,489 | —(3) | — | 31,423 | 1,587,912 | | Timothy Regan | 560,000 | 476,000 | 11,001,639 | — | 31,553 | 12,069,193 | | Bart E. Volkmer | 520,000 | 390,000 | 7,709,706 | — | 31,553 | 8,651,259 | | Eric Cox | 500,000 | 500,000 | 8,513,696 | — | 31,553 | 9,545,250 |
Amount of Payments Upon Termination at 2024 Year-End
(1)All of our named executive officers are subject to a better-after-tax provision whereby Dropbox would either pay such person (i) the full amount of their severance benefits or, alternatively (ii) an amount of certain severance benefits otherwise payable to them such that the severance benefits will not be subject to the tax imposed by Section 4999 of the Code, whichever produces the better after-tax result for such named executive officer. (2)Unless otherwise noted, the value is based on a per share price of $30.04, which was the closing price for a share of our Class A common stock as reported on December 31, 2024, the last trading day of the year. (3)Excludes 8,266,666 shares of Class A common stock underlying RSAs subject to Mr. Houston’s Co-Founder Grant. See “Potential Payments on Termination or Change in Control—Certain Equity Awards” above for additional information regarding the terms of Mr. Houston’s Co-Founder Grant in connection with a change in control.
Amount of Payments Upon Termination at 2024 Year-End
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Amount of Payments Upon Termination at 2024 Year-End
CEO Pay Ratio In accordance with Item 402 of Regulation S-K under the Securities Act (“Item 402”), below is the ratio of the total compensation of the median employee of the company to the annual total compensation of the CEO (the “Pay Ratio Disclosure”).
Amount of Payments Upon Termination at 2024 Year-End
| $1,706,505 | $228,805 | 7:1 | | CEO Total Annual Compensation | Median Employee Total Compensation | CEO Pay Ratio |
Amount of Payments Upon Termination at 2024 Year-End
In order to identify our median employee, we examined the total compensation in 2024 of all employees globally, including those employed on a full-time, part-time, seasonal or temporary basis by the company as of December 31, 2024, and then such compensation is converted into U.S. dollars. We did not annualize compensation for employees who were not employed for the entire 2024 fiscal year. We chose total compensation to use as our consistently applied compensation measure. Total compensation includes each employee’s base salary, bonuses, sales commissions paid and the grant date fair market value of equity awards granted during the 12-month period from January 1, 2024 through December 31, 2024. Our CEO had annual total compensation for 2024, calculated using the requirements of Item 402 for purposes of the Pay Ratio Disclosure, of $1,706,505. The annual total compensation of the median employee of the company for 2024, calculated using the same requirements under Item 402 for purposes of the Pay Ratio Disclosure, which included base pay, incentive compensation, the grant date fair value of equity grants and the company’s matching contribution to that employee’s 401(k) plan, was $228,805. Accordingly, the ratio of the annual total compensation of the CEO to the annual total compensation of the median employee of the company was 7:1. The Pay Ratio Disclosure presented above is a reasonable estimate calculated in a manner consistent with Item 402. Because the SEC’s final regulations for identifying the median employee, calculating annual total compensation and determining the pay ratio allow companies to use different methodologies, exemptions, estimates and assumptions, the company’s Pay Ratio Disclosure may not be comparable to that reported by other companies.
Amount of Payments Upon Termination at 2024 Year-End
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Amount of Payments Upon Termination at 2024 Year-End
Pay Versus Performance In accordance with Item 402, below is the comparison of the total compensation actually paid to company performance (the “Pay Versus Performance Disclosure”). For further information concerning our variable pay-for-performance philosophy and how we align executive compensation with the company’s performance, refer to “Executive Compensation – Compensation Discussion and Analysis.”
Amount of Payments Upon Termination at 2024 Year-End
| (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | | Year | Summary Compensation Table Total for PEO ($)(1) | Compensation Actually Paid to PEO ($)(2) | Average Summary Compensation Table Total for Non-PEO NEOs ($)(3) | Average Compensation Actually Paid to Non-PEO NEOs ($)(4) | Value of Initial Fixed $100 Investment Based On: | | Net Income ($M)(7) | Revenue ($M)(8) | | | | | | | Total Company Shareholder Return ($)(5) | Peer Group Total Shareholder Return ($)(6) | | | | 2024 | 1,706,505 | -16,215,315 | 7,182,866 | 7,498,844 | 167.73 | 301.44 | 452.3 | 2,545 | | 2023 | 1,539,577 | 19,457,888 | 2,515,311 | 1,165,036 | 164.60 | 221.06 | 453.6 | 2,541 | | 2022 | 1,146,000 | -22,783,000 | 3,473,372 | 528,487 | 124.96 | 132.79 | 553.2 | 2,357 | | 2021 | 1,515,269 | 25,163,611 | 2,832,378 | 1,261,953 | 137.02 | 206.76 | 335.8 | 2,149 | | 2020 | 1,268,889 | 39,123,889 | 10,219,177 | 10,392,482 | 123.90 | 149.98 | -256.3 | 1,915 |
Amount of Payments Upon Termination at 2024 Year-End
(1) The dollar amounts reported in column (b) are the amounts of total compensation reported for Mr. Houston, our Chief Executive Officer (“PEO”), for each corresponding year in the “Total” column of the applicable “Summary Compensation Table.” Refer to “Executive Compensation – Summary Compensation Table.” (2) The dollar amounts reported in column (c) represent the amount of “compensation actually paid” to Mr. Houston, as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual amount of compensation earned by or paid to Mr. Houston during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to Mr. Houston’s total compensation for each year to determine the compensation actually paid:
Amount of Payments Upon Termination at 2024 Year-End
| Year | Reported Summary Compensation Table Total for PEO ($) | Reported Value of Equity Awards ($)(a) | Equity Award Adjustments ($)(b) | Compensation Actually Paid to PEO ($) | | 2024 | 1,706,505 | 0 | -17,921,820 | -16,215,315 | | 2023 | 1,539,577 | 0 | 17,918,311 | 19,457,888 | | 2022 | 1,146,000 | 0 | -23,929,000 | -22,783,000 | | 2021 | 1,515,269 | 0 | 23,648,342 | 25,163,611 | | 2020 | 1,268,889 | 0 | 37,855,000 | 39,123,889 |
Amount of Payments Upon Termination at 2024 Year-End
(a)The grant date fair value of equity awards represents the total of the amounts reported in the “Stock Awards” column in the “Summary Compensation Table” for the applicable year. (b)The equity award adjustments for each applicable year include the addition (or subtraction, as applicable) of the following: (i) the year-end fair value of any equity awards granted in the applicable year that are outstanding and unvested as of the end of the applicable year; (ii) the amount of change as of the end of the applicable year (from the end of the prior fiscal year) in fair value of any awards granted in prior years that are outstanding and unvested as of the end of the applicable year; (iii) for awards that are granted and vest in the same applicable year, the fair value as of the vesting date; (iv) for awards granted in prior years that vest in the applicable year, the amount equal to the change as of the vesting date (from the end of the prior fiscal year) in fair value; (v) for awards granted in prior years that are determined to fail to meet the applicable vesting conditions during the applicable year, a deduction for the amount equal to the fair value at the end of the prior fiscal year; and (vi) the dollar value of any dividends or other earnings paid on stock or option awards in the applicable year prior to the vesting date that are not otherwise reflected in the fair value of such award or included in any other component of total compensation for the applicable year. The valuation assumptions used to calculate fair values did not materially differ from those disclosed at the time of grant. Fair values were computed as of the end of the respective fiscal year, other than with regards to fair values of awards that vest in each covered
Amount of Payments Upon Termination at 2024 Year-End
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Amount of Payments Upon Termination at 2024 Year-End
year, which are valued as of the applicable vesting date. The amounts deducted or added in calculating the equity award adjustments are as follows:
Amount of Payments Upon Termination at 2024 Year-End
| Year | Year End Fair Value of Equity Awards ($) | Year over Year Change in Fair Value of Outstanding and Unvested Equity Awards ($) | Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year ($) | Year over Year Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year ($) | Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year ($) | Value of Dividends or other Earnings Paid on Stock or Option Awards not Otherwise Reflected in Fair Value or Total Compensation ($) | Total Equity Award Adjustments ($) | | 2024 | 0 | -17,921,820 | 0 | 0 | 0 | 0 | -17,921,820 | | 2023 | 0 | 17,918,311 | 0 | 0 | 0 | 0 | 17,918,311 | | 2022 | 0 | -23,929,000 | 0 | 0 | 0 | 0 | -23,929,000 | | 2021 | 0 | 8,238,085 | 0 | 15,410,257 | 0 | 0 | 23,648,342 | | 2020 | 0 | 37,855,000 | 0 | 0 | 0 | 0 | 37,855,000 |
Amount of Payments Upon Termination at 2024 Year-End
(3) The dollar amounts reported in column (d) represent the average of the amounts reported for the company’s named executive officers (“NEOs”) as a group (excluding Mr. Houston) in the “Total” column of the “Summary Compensation Table” in each applicable year. The names of each of the NEOs (excluding Mr. Houston) included for purposes of calculating the average amounts in each applicable year are as follows: (i) for 2024, Tim Regan, Bart Volkmer, and Eric Cox; (ii) for 2023, Timothy Young, Tim Regan, Bart Volkmer, and Eric Cox; (iii) for 2022, Timothy Young, Tim Regan and Bart Volkmer; (iv) for 2021, Timothy Young, Tim Regan, Bart Volkmer, and Olivia Nottebohm; and (v) for 2020, Timothy Young, Tim Regan, Bart Volkmer, Olivia Nottebohm, and Ajay Vashee. (4) The dollar amounts reported in column (e) represent the average amount of “compensation actually paid” to the NEOs as a group (excluding Mr. Houston), as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual average amount of compensation earned by or paid to the NEOs as a group (excluding Mr. Houston) during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to average total compensation for the NEOs as a group (excluding Mr. Houston) for each year to determine the compensation actually paid, using the same methodology described above in Note 2:
Amount of Payments Upon Termination at 2024 Year-End
| Year | Average Reported Summary Compensation Table Total for Non-PEO NEOs ($) | Average Reported Value of Equity Awards($) | Average Equity Award Adjustments ($)(a) | Average Compensation Actually Paid to Non- PEO NEOs ($) | | 2024 | 7,182,866 | 6,566,199 | 6,882,177 | 7,498,844 | | 2023 | 2,515,311 | 2,049,960 | 699,685 | 1,165,036 | | 2022 | 3,473,372 | 2,607,061 | -337,824 | 528,487 | | 2021 | 2,832,378 | 1,946,253 | 375,828 | 1,261,953 | | 2020 | 10,219,177 | 9,424,859 | 9,598,164 | 10,392,482 |
Amount of Payments Upon Termination at 2024 Year-End
(a)The amounts deducted or added in calculating the total average equity award adjustments are as follows:
Amount of Payments Upon Termination at 2024 Year-End
| Year | (a) | (b) | (c) | (d) | (e) | (f) | Total Average Equity Award Adjustments ($)(a) | | | Average Year End Fair Value of Equity Awards ($) | Year over Year Average Change in Fair Value of Outstanding and Unvested Equity Awards ($) | Average Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year ($) | Year over Year Average Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year ($) | Average Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year ($) | Average Value of Dividends or other Earnings Paid on Stock or Option Awards not Otherwise Reflected in Fair Value or Total Compensation ($) | | | 2024 | 5,703,394 | 62,853 | 1,382,982 | -267,053 | 0 | 0 | 6,882,177 | | 2023 | 2,271,117 | 586,030 | 460,877 | 299,187 | -2,917,528 | 0 | 699,685 | | 2022 | 2,038,975 | -2,637,402 | 479,292 | -218,688 | 0 | 0 | -337,824 | | 2021 | 1,455,584 | 1,400,515 | 385,547 | 648,906 | 3,514,724 | 0 | 375,828 | | 2020 | 9,833,673 | 796,740 | 307,618 | 148,905 | 1,488,772 | 0 | 9,598,164 |
Amount of Payments Upon Termination at 2024 Year-End
(a)The total average equity award adjustment is calculated by adding the values in columns (a), (b), (c), (d), and (f) less (e). Due to rounding, the total average equity award may not equal the total obtained by adding and subtracting the applicable columns.
Amount of Payments Upon Termination at 2024 Year-End
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Amount of Payments Upon Termination at 2024 Year-End
(5) Cumulative total shareholder return (“TSR”) is calculated as the difference between the company’s share price at the end and the beginning of the measurement period divided by the company’s share price at the beginning of the measurement period. (6) The peer group used for this purpose is the following published industry index: Nasdaq Computer Index. (7) The dollar amounts reported represent the amount of net income reflected in the company’s audited financial statements for the applicable year. (8) Annual revenue was calculated to exclude the impact of foreign exchange from our annual revenue reflected in our audited financial statements for the applicable fiscal year by applying the prior year weighted average exchange rate to the applicable period’s results.
Analysis of the Information Presented in the Pay versus Performance Table
Analysis of the Information Presented in the Pay versus Performance Table As described in more detail in the section “Executive Compensation – Compensation Discussion and Analysis,” the company’s executive compensation program reflects a variable pay-for-performance philosophy. While the company utilizes several performance measures to align executive compensation with company performance, not all of those company measures are presented in the “Pay Versus Performance” table. Moreover, the company generally seeks to incentivize long-term performance, and therefore does not specifically align the company’s performance measures with compensation that is actually paid (as computed in accordance with Item 402(v) of Regulation S-K) for a particular year. In accordance with Item 402(v) of Regulation S-K, the company is providing the following descriptions of the relationships between information presented in the “Pay Versus Performance” table.
Compensation Actually Paid and Cumulative TSR
Compensation Actually Paid and Cumulative TSR As demonstrated by the following graph, the amount of compensation actually paid to Mr. Houston decreased between 2020 and 2022, increased between 2022 and 2023, and then decreased again in 2024. The average amount of compensation actually paid to the company’s NEOs as a group (excluding Mr. Houston) decreased between 2020 and 2022 and increased between 2022 and 2024. During that five-year period, total shareholder return has been positive. The variance in compensation actually paid over the five year period is because a significant portion of compensation actually paid is comprised of equity awards, and in the case of Mr. Houston, vesting of equity awards is contingent upon achieving stock price targets as described in more detail in the section “Executive Compensation – Compensation Discussion and Analysis”.
Compensation Actually Paid and Cumulative TSR
| 60 | Dropbox, Inc. Proxy Statement and Notice of 2025 Annual Meeting of Stockholders |
Compensation Actually Paid and Net Income
Compensation Actually Paid and Net Income As demonstrated by the following graph, the amount of compensation actually paid to Mr. Houston decreased between 2020 and 2022, increased between 2022 and 2023, and then decreased again in 2024. Meanwhile, the company's net income stabilized at a strong position over the same period. The average amount of compensation actually paid to the company’s NEOs as a group (excluding Mr. Houston) decreased between 2020 and 2022 and increased between 2022 and 2024, while the company's net income stabilized at a strong position over the same period. We do not use net income as a performance measure in our short or long-term incentive programs and as further discussed in the section “Executive Compensation – Compensation Discussion and Analysis”, a majority of the total compensation for the company’s NEOs is in the form of equity and therefore tied to stock price performance.
Compensation Actually Paid and Revenue
Compensation Actually Paid and Revenue As demonstrated by the following graph, the amount of compensation actually paid to Mr. Houston decreased between 2020 and 2022, increased between 2022 and 2023, and decreased again in 2024. Meanwhile, the company's revenue increased over the same period. The average amount of compensation actually paid to the company’s NEOs as a group (excluding Mr. Houston) decreased between 2020 and 2022 and increased between 2022 and 2024, while the company’s revenue increased over the same period. The company has determined that revenue is the financial performance measure that, in the company’s assessment, represents the most important financial measure used by the company to link compensation actually paid to the company’s NEOs, for the most recently completed fiscal year, to company performance. As further discussed above in the section “Executive Compensation – Compensation Discussion and Analysis”, revenue represents two-thirds of the corporate multiplier of the short-term incentive plan.