DEF 14A of Pinterest, Inc.
Filed Apr 10, 2024 · FY20230001506293-24-000055
pvp
| CEO pay ratio | 49 | | Pay versus performance | 49 | | Equity compensation plan information | 53 | | Audit matters | 54 | | Proposal 3: Ratification of selection of independent auditor | | | Principal accountant fees and services | 54 | | Pre-approval policies and procedures | 55 | | Audit committee report | 55 | | Security ownership of certain beneficial owners and management | 56 | | Delinquent section 16(a) reports | 59 | | Other matters | 60 | | Related party transactions | 60 | | Stockholder proposals for the 2025 annual meeting of stockholders | 60 | | Voting and annual meeting information | 61 | | Appendix A — Information regarding Non-GAAP financial measures | 66 |
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| What we do | | | fully independent compensation committee independent compensation consultant to the compensation committee annual review of the compensation program, best practices and market trends majority of executive compensation tied to stock value | annual review of succession plans for key officers “double trigger” termination required for vesting in equity in connection with change in control annual stockholder non-binding advisory vote on our compensation program (say-on-pay) clawback policy in the event of a financial restatement or misconduct minimum stock ownership requirement | | What we don’t do | | | pension and executive retirement plans significant perquisites to executive officers supplemental executive benefits “single trigger” vesting in equity upon change in control | employee and director hedging and pledging of our equity securities tax gross-ups on change in control payments dividends or equivalents on unvested equity awards |
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| Cash compensation ($)(1) | | | | Annual retainer | | 50,000 | | Additional annual retainer for non-Executive Chair | | 40,000 | | Additional annual retainer for lead independent director | | 37,500 | | Additional annual retainers for committee service | Chair | Member | | Audit Committee | 25,000 | 12,500 | | Compensation Committee | 20,000 | 10,000 | | Governance Committee | 10,000 | 5,000 | | Equity compensation ($)(2) | | | | Initial grant of RSUs(3) | | 400,000 | | Annual grant of RSUs(4) | | 260,000 |
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(1)Paid in quarterly installments on a prospective basis, pro-rated for directors whose service commences during the year. (2)Amounts represent the approximate grant date fair value of RSUs that will be settled in shares of Class A common stock. All awards granted pursuant to the Non-Employee Director Compensation Policy vest, in addition to the schedules below, upon a change in control of the company. (3)Award vests, subject to the director’s continued service, in equal annual installments on the first three anniversaries of the director’s commencement of service. Applies only to directors appointed after the IPO which was in April 2019. (4)Award vests, subject to the director’s continued service, in full on the earlier of the first anniversary of the grant date or the day prior to the company’s next annual meeting. Evan Sharp and Bill Ready do not receive any additional compensation for their services as a director. In connection with Mr. Sharp’s transition from an executive officer of the company to an advisor on October 15, 2021, and in accordance with the previously disclosed terms of his consulting agreement, his then outstanding equity awards continue to vest while he serves as a director and advisor. Benjamin Silbermann receives compensation for his services as non-Executive Chair, as described below.
Stock ownership guidelines for non-employee directors
| Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1)(2) | All Other Compensation ($) | Total ($) | | Andrea Wishom | 97,500 | 259,988 | — | 357,488 | | Benjamin Silbermann(3) | 33,260 | — | — | 33,260 | | Evan Sharp(4) | — | — | — | — | | Fredric G. Reynolds | 75,000 | 259,988 | — | 334,988 | | Gokul Rajaram | 60,000 | 259,988 | — | 319,988 | | Jeffrey Jordan | 55,000 | 259,988 | — | 314,988 | | Jeremy Levine | 60,000 | 259,988 | — | 319,988 | | Leslie Kilgore | 76,250 | 259,988 | — | 336,238 | | Marc Steinberg | 62,500 | 259,988 | — | 322,488 | | Salaam Coleman Smith | 67,500 | 259,988 | — | 327,488 | | Scott Schenkel(5) | 18,173 | 399,996 | — | 418,169 |
Pay mix
Pay mix The majority of our executive compensation is delivered in the form of equity awards. For details, see the "2023 Summary compensation table" below. We believe that this pay mix, including equity compensation in the form of time-based restricted stock units (“RSUs”), restricted stock awards (“RSAs”) and stock options generally vesting over two to four years, effectively supports our compensation objectives, including achievement of our long-term mission, motivating and paying for team and company performance, and aligning our executives’ interests with those of our stockholders.
Linking pay with performance
Linking pay with performance As described above, the majority of our NEOs’ target total direct compensation is linked to the value of our stock, which reflects the value we create over the long term. Following each annual review cycle, our named executive officers are eligible to receive periodic equity grants. While we use time-based RSUs, RSAs and stock options for such grants, when determining the amount of such awards, the compensation committee generally considers the company’s performance against various financial, operational and strategic objectives as well as each named executive officer’s individual contribution to that performance. In assessing executive performance, the compensation committee considers both the objectives the executive helped the company achieve as well as how they helped achieve those objectives, including whether they demonstrated leadership behaviors consistent with our values.
Governance
| What we do | | | fully independent compensation committee independent compensation consultant to the compensation committee annual review of the compensation program, best practices and market trends majority of executive compensation tied to stock value annual review of succession plans for key executive officers | “double trigger” termination required for vesting in equity in connection with change in control annual stockholder non-binding advisory vote on our compensation program (say-on-pay) clawback policy in the event of a financial restatement or misconduct minimum stock ownership requirement | | What we don’t do | | | pension and executive retirement plans significant perquisites to executive officers supplemental executive benefits “single trigger” vesting in equity upon change in control | employee and director hedging and pledging of our securities tax "gross-ups" on change in control payments dividends or equivalents on unvested equity awards |
Competitive positioning
Competitive positioning For purposes of comparing our executive compensation against the competitive market and to guide compensation levels and practices, the compensation committee developed a peer group for 2023 in consultation with its external compensation consultant. In developing the peer group, the compensation committee’s goal was to include companies that would be relevant and useful for compensation decision-making, recognizing the individual qualifications and marketability of our NEOs. This resulted in a peer group comprised of: •29 publicly traded companies, mainly headquartered in the San Francisco Bay Area; •in internet and software-related industries; •with revenue from 0.33 to 6.0x Pinterest’s last four quarters’ revenue of $2.7 billion; and •with market capitalization from 0.25x to 4.0x Pinterest’s 30-trading day average market capitalization of $12.8 billion.
Competitive positioning
| 38 | Pinterest 2024 Proxy Statement |
Competitive positioning
For 2023, the compensation peer group consisted of the following companies:
Competitive positioning
| Arista Networks, Inc. | Expedia Group, Inc. | Tripadvisor, Inc. | | Autodesk, Inc. | Lyft, Inc. | Twilio Inc. | | Block, Inc. | Match Group, Inc.* | Twitter, Inc. | | Coinbase Global, Inc.* | Okta, Inc. | Uber Technologies, Inc. | | Crowdstrike Holdings, Inc. | Palo Alto Networks Inc. | VMware, Inc. | | DocuSign, Inc. | Qualtrics International Inc.* | Workday, Inc. | | DoorDash, Inc. | SoFi Technologies, Inc.* | Yelp Inc. | | Dropbox, Inc. | Snap Inc. | Zillow Group, Inc. | | eBay Inc. | Splunk Inc. | Zoom Video Communications, Inc. | | Electronic Arts Inc. | Spotify Technology SA | |
Competitive positioning
* Based on the factors described above, the companies marked with an asterisk were added to the peer group for 2023. Activision, Adobe, Airbnb, Intuit and ServiceNow were removed from the 2022 peer group. The above compensation peer group for 2023 was approved by the compensation committee in August 2022, with input from the compensation committee's external compensation consultant. As described above, compensation decisions are not based solely on competitive market data. Rather, the market data serves as one point of reference to aid in understanding the competitive market for executive positions in our industry. When making compensation decisions, the compensation committee does not specifically target compensation for our NEOs at a certain percentile of compensation data for other individuals with similar roles at the peer companies. Instead, the committee considers all of the data, including individual compensation data where available, as well as the many qualitative factors unique to each of our NEOs, including their responsibilities, qualifications, knowledge, performance, and marketability, which are not adequately reflected in percentile-based data. In addition to publicly available compensation data, the committee may also review compensation survey data for the peer group and broader groups for supplemental, secondary reference. The compensation committee reviews our compensation peer group at least annually and adjusts its composition as warranted, taking into account changes in our business and that of the companies in our peer group, as well as changes in our executives.
Long-term equity incentive compensation
Long-term equity incentive compensation Consistent with our compensation philosophy and focus on our long-term mission and value creation, the majority of our NEOs’ target total direct compensation has historically been delivered in the form of RSUs, RSAs and stock options generally vesting over two to four years subject to continued service. In establishing the amount and terms of these awards, the compensation committee generally considers the factors described above in the section titled "Compensation-setting process." NEOs may receive larger awards upon hire or in connection with a promotion or significant change in responsibilities and do not necessarily receive awards every year. Julia Brau Donnelly received a grant of 523,772 RSUs with a grant date fair value of $15.0 million in connection with her appointment as our CFO and pursuant to her employment agreement. Ms. Donnelly’s RSUs vest in equal installments on a quarterly basis over two years, subject to her continued employment on each applicable vesting date. Malik Ducard received a grant of 151,114 RSUs with a grant date fair value of $3.7 million after considering his past performance and expected future contributions as well as the total unrealized value of his outstanding equity awards and their vesting terms relative to our compensation peer group data. Mr. Ducard’s RSUs vest in equal installments on a quarterly basis in 2024, subject to his continued employment on each applicable vesting date. Sabrina Ellis received a grant of 725,222 RSUs with a grant date fair value of $20.8 million in connection with her appointment as our CPO and pursuant to her employment agreement. Ms. Ellis’s RSUs vest in equal installments on a quarterly basis over two years, subject to her continued employment on each applicable vesting date.
Perquisites and other personal benefits
| What we do We have entered into executive severance and change in control agreements ("severance agreements") with each of our named executive officers. The terms of the severance agreements for each of our NEOs are the same, other than Mr. Ready, who has a separate severance and change in control agreement. The severance agreements generally provide severance payments and partial vesting of equity if the NEO’s employment is terminated without cause (and, in the case of Mr. Ready’s agreement, if he resigns for good reason) as well as “double-trigger” change in control payments and full vesting of equity in the event that the NEO’s employment is terminated without cause or the executive resigns for good reason within a specified period before and after a change in control of the company. None of our NEOs has a right to a “gross-up” or other reimbursement payment for any tax liability as a result of the application of Sections 280G or 4999 of the Internal Revenue Code. |
Perquisites and other personal benefits
| Why we do it We believe that having reasonable and competitive post-employment compensation arrangements is essential to attracting and retaining highly qualified executives as well as facilitating their transition from the company when appropriate. These severance arrangements are designed to provide reasonable compensation to executives who leave the company under certain circumstances to facilitate their transition to new employment. In addition, they are designed to align the interests of our NEOs and our stockholders in the event of a potential change in control of the company by helping our executives maintain focus on pursuing corporate transactions that are in the best interests of our stockholders regardless of whether those transactions may result in their own job loss. We seek to mitigate any potential employer liability and avoid future disputes or litigation by requiring a departing executive to sign a separation and release agreement acceptable to us as a condition to receiving post-employment compensation. |
Perquisites and other personal benefits
The compensation committee does not consider the specific amounts payable under these post-employment compensation arrangements when establishing the annual compensation of our NEOs. We believe, however, that these arrangements are an important component of competitive executive compensation packages. For a description of the terms of the Plan and the severance agreements, as well as an estimate of the potential payments payable under these arrangements, see “Potential payments upon termination or change in control” below. Other compensation policies and practices
Employment arrangements
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 by our board of directors and 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 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 relocation assistance. Our executive officers are also eligible for severance in certain situations . These post-employment compensation terms are discussed in “Post-employment compensation arrangements", above.
Accounting considerations
Accounting considerations In approving the amount and form of compensation for our named executive officers, the compensation committee considers the impact of FASB ASC Topic 718, which requires us to measure and recognize the compensation expense for all share-based payment awards made to our employees and directors, including stock options as well as RSUs and RSAs that may be settled for shares of our Class A and Class B common stock, based on the grant date fair value of these awards. Compensation committee report The compensation committee has reviewed and discussed with management the Compensation Discussion and Analysis contained in this Proxy Statement. Based on their review and discussion, the compensation committee has recommended to the board that the Compensation Discussion and Analysis be included in this Proxy Statement and incorporated into the company’s 2023 annual report on Form 10-K.
Andrea Wishom
| 2023 Summary compensation table |
Andrea Wishom
| Name and Principal Position | Year(1) | Salary ($) | Bonus ($) | Stock Awards ($)(2) | Option Awards ($)(3) | All Other Compensation ($)(4) | Total ($) | | Bill Ready Chief Executive Officer | 2023 | 516,667 | — | — | | 6,000 | 522,667 | | | 2022 | 203,030 | — | 21,532,700 | 100,815,383 | 100,622(5) | 122,651,735 | | Julia Brau Donnelly Chief Financial Officer | 2023 | 320,455 | 1,000,000(6) | 14,995,592 | | 211,420(7) | 16,527,467 | | Todd Morgenfeld Former Chief Financial Officer and Head of Business Operations | 2023 | 200,000 | — | 3,788,823(8) | | 471,753(9) | 4,460,576 | | | 2022 | 393,417 | — | — | — | 6,000 | 399,417 | | | 2021 | 360,500 | — | 1,650,351(10) | — | 2,000 | 2,012,851 | | Malik Ducard Chief Content Officer | 2023 | 516,667 | — | 3,673,581 | — | 6,000 | 4,196,248 | | Sabrina Ellis Chief Product Officer | 2023 | 377,273 | — | 20,763,106 | — | — | 21,140,379 | | Wanji Walcott Chief Legal & Business Affairs Officer | 2023 | 516,667 | 750,000(11) | 9,071,390 | | 6,000 | 10,344,056 | | | 2022 | 53,030 | 500,000(12) | — | — | — | 553,030 |
Andrea Wishom
| 2023 Grants of plan-based awards table |
Andrea Wishom
| Outstanding equity awards at fiscal 2023 year-end table |
Andrea Wishom
| 2023 Option exercises and stock vested table |
Pay-versus-performance
| Year | Summary Compensation Table Total for First PEO ($)(1) | Summary Compensation Table Total for Second PEO ($)(1) | Compensation Actually Paid to First PEO ($)(2) | Compensation Actually Paid to Second PEO ($)(2) | Average Summary Compensation Table Total for Non-PEO NEOs ($)(1)(3) | Average Compensation Actually Paid to Non-PEO NEOs ($)(2)(3) | Value of Initial Fixed $100 Investment Based On: | | Net Income (Loss) ($) (in thousands) (5) | | | | | | | | | Total Stockholder Return ($)(4) | Peer Group Total Stockholder Return ($)(4) | | | 2023 | — | 522,667 | — | 74,249,630 | 11,333,745 | 13,760,300 | 199 | 142 | (35,610) | | 2022 | 202,028 | 122,651,735 | (13,866,816) | 153,878,150 | 411,737 | (11,364,015) | 123 | 104 | (96,047) | | 2021 | 199,100 | — | (32,587,745) | — | 11,394,930 | (25,236,449) | 173 | 180 | 316,438 | | 2020 | 199,100 | — | 81,738,645 | — | 4,047,470 | 49,261,185 | 294 | 181 | (128,323) |
Compensation Actually Paid Versus Company TSR
Compensation Actually Paid Versus Company TSR
Compensation Actually Paid Versus Company Net Income
Compensation Actually Paid Versus Company Net Income
Compensation Actually Paid Versus Company Net Income
| 52 | Pinterest 2024 Proxy Statement |
Compensation Actually Paid Versus Company Net Income
Equity compensation plan information The following table provides information as of December 31, 2023, with respect to the shares of our common stock that may be issued under our 2009 Stock Plan and 2019 Omnibus Incentive Plan.
Compensation Actually Paid Versus Company Net Income
| Plan Category | Securities to be Issued upon Exercise of Outstanding Options, Warrants and Rights (#) | Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights ($) | Securities Remaining Available for Future Issuance under Equity Compensation Plans (#) | | Plans approved by security holders(1) | 55,696,642(2) | 18.16(3) | 145,335,295(4) | | Plans not approved by security holders | — | — | — |
Compensation Actually Paid Versus Company Net Income
(1)The 2019 Omnibus Incentive Plan provides that the number of shares reserved and available for issuance under the 2019 Omnibus Incentive Plan will automatically increase on each January 1, commencing on January 1, 2020 through and including January 1, 2029, in an amount equal to 5% of the total number of shares of Class A and Class B common stock outstanding on the immediately preceding December 31. (2)Includes 312 shares of Class A common stock and 466,668 shares of Class B common stock issuable upon vesting of RSUs awarded under our 2009 Stock Plan and 3,854,748 shares of Class B common stock issuable upon exercise of outstanding options granted under our 2009 Stock Plan. Each share of our Class B common stock is convertible at any time at the option of the holder into one share of our Class A common stock. Each share of our Class B common stock will convert automatically into one share of our Class A common stock upon any transfer, whether or not for value, except certain transfers to entities, including certain charities and foundations, to the extent the transferor retains sole dispositive power and exclusive voting control with respect to the shares of Class B common stock, and certain other transfers described in our certificate of incorporation. Upon the death or permanent incapacity of each holder of Class B common stock who is a natural person, the Class B common stock held by that person or his or her permitted estate planning entities will convert automatically into Class A common stock. However, shares of Class B common stock held by Benjamin Silbermann or his permitted estate planning entities or other permitted transferees will not convert automatically into Class A common stock until a time that is between 90 and 540 days after his death or permanent incapacity, as determined by the board of directors. In addition, all shares of Class B common stock will automatically convert into shares of Class A common stock on (i) April 23, 2026, the seven-year anniversary of our IPO, except with respect to shares of Class B common stock held by any holder that continues to beneficially own at least 50% of the number of shares of Class B common stock that such holder beneficially owned immediately prior to completion of our IPO; and (ii) a date that is between 90 and 540 days, as determined by the board of directors, after the death or permanent incapacity of Mr. Silbermann. Includes 43,709,052 shares of Class A common stock issuable upon vesting of RSUs and 923,130 shares of Class A common stock issuable upon vesting of RSAs awarded under our 2019 Omnibus Incentive Plan as well as 9,189,065 shares of Class A common stock issuable upon exercise of outstanding options granted under our 2019 Omnibus Incentive Plan. (3)Excludes RSAs and RSUs as they have no exercise price. (4)Reflects shares available for future issuance under the 2019 Omnibus Incentive Plan (excluding shares underlying outstanding awards).
Compensation Actually Paid Versus Company Net Income
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Compensation Actually Paid Versus Company Net Income
Audit matters
Compensation Actually Paid Versus Company Net Income
| Proposal 3 Ratification of selection of independent auditor |
Compensation Actually Paid Versus Company Net Income
The audit committee has sole responsibility for the appointment, compensation and oversight of our independent registered public accounting firm. At the annual meeting, you are being asked to ratify the audit committee’s selection of Ernst & Young LLP (“EY”) to serve as our independent auditor for the year ending December 31, 2024. EY has served as our independent auditor since 2013. The audit committee believes that the continued retention of EY as our independent auditor is in the best interests of Pinterest and its stockholders. Representatives of EY are expected to be present at the annual meeting. They will have an opportunity to make a statement if they desire to do so and are expected to be available to respond to appropriate stockholder questions. The board, upon recommendation of the audit committee, is submitting the selection of EY to stockholders for ratification as a matter of good corporate governance. If stockholders do not ratify the selection of EY, the audit committee will review its future selection of our independent auditor in light of that result. Even if the selection is ratified, the audit committee may, in its discretion, appoint a new independent auditor at any time during the year if it determines that such a change would be in the best interests of the company and its stockholders.
Compensation Actually Paid Versus Company Net Income
| The board recommends a vote FOR the ratification of Ernst & Young LLP |
Compensation Actually Paid Versus Company Net Income
Principal accountant fees and services The following table represents aggregate fees for EY services for the years ended December 31, 2023 and 2022 (in thousands):
Compensation Actually Paid Versus Company Net Income
| | 2023 | 2022 | | Audit fees(1) | 4,847 | 4,483 | | Audit-related fees(2) | — | — | | Tax fees(3) | 861 | 1,222 | | All other fees(4) | — | — | | Total fees | 5,708 | 5,705 |
Compensation Actually Paid Versus Company Net Income
(1)Consist of fees for services rendered in connection with the annual audit of our consolidated financial statements and audit of internal control over financial reporting, reviews of our quarterly condensed consolidated financial statements, services provided in connection with statutory and regulatory filings, and consultations on accounting matters directly related to the audit. (2)There were no audit-related fees for the years ended December 31, 2023 and 2022. (3)Consist of fees for services rendered for tax compliance, tax advice and tax planning. (4)Consist of fees for all other services not included in the categories set forth above.
Compensation Actually Paid Versus Company Net Income
| 54 | Pinterest 2024 Proxy Statement |
Compensation Actually Paid Versus Company Net Income
Audit matters Pre-approval policies and procedures It is the policy of the audit committee to pre-approve, typically near the beginning of each fiscal year, all audit and permissible non-audit services to be provided by the independent auditor during that fiscal year. The audit committee also may pre-approve particular services during the fiscal year on a case-by-case basis. The audit committee has delegated to the chair of the audit committee the authority to pre-approve such specific services on a case-by-case basis for which the aggregated estimated fees do not exceed $200,000. The audit committee or its chair, as applicable, considers whether the provision of any non-audit services is compatible with maintaining the independence of our independent auditor and solicits the input of management and the independent auditor on this issue. The audit committee pre-approved all of the services reported in the table above, pursuant to the policies and procedures described above, and the audit committee determined that all non-audit services provided to the company by EY were compatible with the maintenance of EY’s independence in the conduct of its auditing functions. Audit committee report The audit committee has reviewed and discussed with management the audited financial statements for the fiscal year ended December 31, 2023. The audit committee has discussed with EY, our independent registered public accounting firm, the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (“PCAOB”) and the SEC. The audit committee has also received the written disclosures and the letter from EY required by applicable requirements of the PCAOB regarding the firm’s communications with the audit committee concerning independence and has discussed with EY the firm’s independence. Based on the foregoing, the audit committee has recommended to the board that the audited financial statements be included in our 2023 annual report on Form 10-K.