DEF 14A of Sezzle Inc.
Filed Apr 23, 2024 · FY20230001662991-24-000129
Board of Directors
Board of Directors
Board of Directors
| | | Committee Membership | | | | Name | Director Since | Compensation | Nominating and Corporate Governance | Audit and Risk | | Mike Cutter | 2020 | ☑ | ☑* | ☑ | | Paul Lahiff | 2019 | ☑* | ☑ | ☑* | | Paul Paradis | 2018 | | | | | Paul Purcell | 2019 | ☑ | ☑ | ☑ | | Karen Webster | 2024 | ☑ | ☑ | ☑ | | Charles Youakim | 2016 | | | |
Board of Directors
*Indicates committee chair.
About Sezzle
About Sezzle Sezzle is a purpose-driven payments company on a mission to financially empower the next generation. Launched in 2017, Sezzle has built a digital payments platform that allows merchants to offer their consumers a flexible alternative to traditional credit. Sezzle aims to enable consumers to take control over their spending, be more responsible, and gain financial freedom. Sezzle's vision is to create a digital ecosystem benefiting all of our stakeholders—including merchants, partners, consumers, employees, communities, and investors—while continuing to drive ethical and sustainable growth.
Key Performance Highlights
Key Performance Highlights 1.UMS is defined as the total value of sales made by merchants based on the purchase price of each confirmed sale where a consumer has selected the Sezzle Platform as the applicable payment option. UMS does not represent revenue earned by us, is not a component of our income, nor is included within our financial results prepared in accordance with U.S. GAAP. 2.Active Consumers is defined as unique consumers who have placed an order with us within the last twelve months. 3.Active Subscribers is defined as unique consumers who have an active subscription for either Sezzle Premium or Sezzle Anywhere.
Our Board of Directors and Corporate Governance
Our Board of Directors and Corporate Governance Our directors, their respective ages as of April 15, 2024, and certain other information are as follows:
Our Board of Directors and Corporate Governance
| Name | Age | Director Since | Position | Committee Membership | | Mike Cutter | 58 | 2020 | Independent Non-Executive Director | Audit and Risk Committee (Member), Compensation Committee (Member), and Nominating and Corporate Governance Committee (Chair) | | Paul Lahiff | 71 | 2019 | Independent Non-Executive Director | Audit and Risk Committee (Chair), Compensation Committee (Chair), and Nominating and Corporate Governance Committee (Member) | | Paul Paradis | 40 | 2018 | Co-Founder, Executive Director, and President | — | | Paul Purcell | 49 | 2019 | Independent Non-Executive Director | Audit and Risk Committee (Member), Compensation Committee (Member), and Nominating and Corporate Governance Committee (Member) | | Karen Webster | 67 | 2024 | Independent Non-Executive Director | Audit and Risk Committee (Member), Compensation Committee (Member), and Nominating and Corporate Governance Committee (Member) | | Charles Youakim | 47 | 2016 | Co-Founder, Executive Chairman, and Chief Executive Officer | — |
Director Biographies
Director Biographies
Director Biographies
| | Mike Cutter Independent Non-Executive Director | | | Mr. Cutter has served as a member of our Board of Directors since June 2020. Prior to serving as a director, Mr. Cutter served as an advisor to the Board from May 2019 until joining as a member of the Board of Directors. Mr. Cutter has more than 33 years’ experience in a wide range of financial services businesses in Australia, New Zealand, Asia and Europe. Most recently from 2015 to 2019 he served as the Group Managing Director for the information services business Equifax ANZ. Prior to that he held various CEO, CRO, Product and Operations roles with GE, ANZ, Wesfarmers, Halifax/BankOne and NAB. Mr. Cutter is a Graduate of the Australian Institute of Company Directors (GAICD) and a Senior Fellow of the Financial Services Institute of Australia and has previously served on the board of directors of the Women’s Cancer Foundation, Ovarian Cancer Institute, the Australian Finance Congress, the National Insurance Brokers Association and the Australian Retail Credit Association. In addition to his role with Sezzle, Mr. Cutter is currently a director for Pepper Money Australia New Zealand, the Chair of Arteva Premium Funding, the Chair of Panthera Finance, a Board Advisor to Revolut Australia and serves as a Director for Kadre Consulting. Mr. Cutter has a Bachelor of Science (Hons) from Hertfordshire University. We believe Mr. Cutter is well-qualified to serve as a member of our Board of Directors due to his experiences in the financial services industry across varied geographical locations. | | Age: 58 Director since 2020 Committees: •Compensation •Nominating and Corporate Governance (Chair) •Audit and Risk | |
Director Biographies
| | Paul Lahiff Independent Non-Executive Director | | | Mr. Lahiff has served as a member of our Board of Directors since May 2019. Mr. Lahiff was previously Chief Executive Officer of Mortgage Choice and prior to that, Chief Executive Officer of Permanent Trustee and Heritage Bank. He previously held roles on the Boards of directors with Sunsuper, Thorn Group, New Payments Platform Australia, RFi, Cuscal and Cancer Council NSW. Mr. Lahiff holds a Bachelor of Agricultural Science from the University of Sydney and is a graduate of the Australian Institute of Company Directors. Mr. Lahiff is the Chairman of Harmoney, NESS Superannuation, and UBank. We believe Mr. Lahiff is well-qualified to serve as a member of our Board of Directors due to his senior management experience and prior and other director roles. | | Age: 71 Director since 2019 Committees: •Compensation (Chair) •Nominating and Corporate Governance •Audit and Risk (Chair) | |
Director Biographies
| | Paul Paradis Executive Director and President | | | Mr. Paradis co-founded Sezzle and has served as a member of our Board of Directors since May 2018. Mr. Paradis has served as President since July 2020 and, prior to serving as President, Mr. Paradis was our Chief Revenue Officer starting in May 2016. Mr. Paradis has extensive experience in sales and marketing. He began his career in sales with the Minnesota Timberwolves. He left the Timberwolves to attain his MBA from the Carlson School of Management at the University of Minnesota, where he focused on marketing and strategy. After graduating from the Carlson School of Management, Mr. Paradis spent six years leading sales and marketing at Dashe & Thomson and the Abreon Group, boutique management consultancies focused on IT transformation adoption. Mr. Paradis left the Abreon Group in 2016 when he co-founded Sezzle. At Sezzle, Mr. Paradis oversees sales, account management, strategic partnerships, and customer and merchant support. Mr. Paradis has a Bachelor of Arts in Political Science from Davidson College and an MBA from the University of Minnesota. Mr. Paradis does not currently hold any other directorships. We believe Mr. Paradis is well-qualified to serve as a member of our Board of Directors due to his experience from serving as co-founder and President at Sezzle, in addition to his experience in IT transformation. | | Age: 40 Director since 2018 Committees: None. | |
Director Biographies
| | Paul Purcell Independent Non-Executive Director | | | Mr. Purcell has served as a member of our Board of Directors since April 2019. Mr. Purcell has invested in financial services companies (public and private markets) for over 20 years. He retains a specific specialization in emerging financial innovation as well as non-bank financial services. He has been the Chief Investment Officer of Jupiter Management since January 1, 2019 and prior to assuming that position led the sourcing and origination of investments at Continental Investors since 1999. Mr. Purcell is a frequent panelist at industry conferences and has published several articles on the trends and developments in the emerging commerce and financial services marketplaces. Before joining Continental Investors, Mr. Purcell was a co-founder of Continental Advisors, a manager of two sector-based hedge funds. He was also Manager of Internet Marketing at the Chicago Board Options Exchange (CBOE). Mr. Purcell is a graduate of the University of San Diego where he is a member of the Board of Trustees. He currently serves on the board of directors of AeroPay, GigWage, Prizeout, thedrop.com, Winestyr, CarHop, and What’s Next Media. We believe Mr. Purcell is well-qualified to serve as a member of our Board of Directors due to his various experiences in the financial services industry and his service as a director at numerous companies. | | Age: 49 Director since 2019 Committees: •Compensation •Nominating and Corporate Governance •Audit and Risk | |
Director Biographies
| | Karen Webster Independent Non-Executive Director | | | Karen Webster was appointed and has served as a member of the Board of Directors since February 2024. Ms. Webster is the founder and has served as Chief Executive Officer of What’s Next Media & Analytics LLC since July 2009 and has been a consultant and managing director of Berkeley Research Group, LLC since 2023. Ms. Webster also has been a co-founder and executive of Market Platform Dynamics LLC since 2004. Ms. Webster has a Master of Science in Strategy and Marketing from Johns Hopkins University. We believe Ms. Webster is well-qualified to serve as a member of our Board of Directors due to her senior management experience and her expertise in the payments industry. | | Age: 67 Director since 2024 Committees: •Compensation •Nominating and Corporate Governance •Audit and Risk | |
Director Biographies
| | Charles Youakim Chairman and Chief Executive Officer | | | Mr. Youakim is our co-founder, Executive Chairman, and Chief Executive Officer of Sezzle. Mr. Youakim is a serial technology entrepreneur with over ten years of experience in growing fintech companies from inception to large-scale businesses. Mr. Youakim began his career as an engineer and software developer. After successfully advancing in his early career, he returned to business school where he was able to focus on expanding his knowledge of finance, marketing, and business strategy. In 2010, after completing business school, Mr. Youakim founded his first payments company, Passport Labs, Inc. (“Passport”). Passport became a leader in software and payments for the transportation industry. At Passport, Mr. Youakim led the construction and the original technology and led the company as it disrupted the industry through the introduction of white label systems and payment wallets. Passport is the technology behind enterprise transportation installations like ParkChicago, ParkBoston, and the GreenP in Toronto. Mr. Youakim co-founded Sezzle in 2016 and also planned much of the business’ technology architecture. Mr. Youakim has a degree in Mechanical Engineering from the University of Minnesota and an MBA from the Carlson School of Management at the University of Minnesota. Mr. Youakim does not currently hold any other directorships. We believe Mr. Youakim is well-qualified to serve as a member of our Board of Directors due to his perspective and experience from serving as co-founder and Chief Executive Officer of Sezzle, as well as his experience leading other technology companies. | | Age: 47 Director since 2016 Committees: None. | |
Director Compensation
Director Compensation Under our bylaws, the Board of Directors establishes the fees for non-executive directors based on recommendations of the Compensation Committee. The Board of Director’s policy is to compensate non-executive directors at competitive market rates to attract and retain individuals of high caliber and quality, having regard to fees paid and/or equity awards granted for comparable companies and the size, complexity, and spread of our operations. We have entered into an individual appointment letter or agreement with each of our non-executive directors. Unless otherwise provided in such letter or agreement, our compensation structure for non-executive directors is to provide annual compensation in an amount equal to $60,000 for serving as a member of the Board of Directors, $15,000 for serving as the Chair of the Audit and Risk Committee, $7,500 for serving as either the Chair of the Compensation Committee or Chair of the Nominating and Corporate Governance Committee, $7,500 for serving as a member of the Audit and Risk Committee, and $3,750 for serving as a member of the Compensation Committee or Nominating and Corporate Governance Committee. In addition, in 2023 each member of the Board of Directors was issued 2,632 in equity awards (in the form of restricted stock awards or restricted stock units). Mr. Lahiff earned $15,000 for serving as lead independent director in 2023. The fees earned by the non-executive directors for the year ended December 31, 2023 are as set forth below:
Director Compensation
| Name | Fees earned or paid in cash(1) | Stock awards(2) | Option awards(3) | Non-equity incentive plan compensation | Nonqualified deferred compensation earnings | All other compensation(4) | Total | | Mike Cutter | $75,000 | $46,292 | $— | $— | $— | $22,500 | $143,792 | | Paul Lahiff | 105,000 | 46,292 | — | — | — | 22,500 | 173,792 | | Kathleen Pierce-Gilmore(5) | 25,000 | — | — | — | — | 2,500 | 27,500 | | Paul Purcell | 75,000 | 46,292 | — | — | — | 7,500 | 128,792 | | Karen Webster(6) | — | — | — | — | — | — | — |
Director Compensation
(1)On August 17, 2023 the Board of Directors implemented the Compensation Committee and Nominating and Corporate Governance Committee. Prior to this date, members of the Remuneration and Nomination Committee were compensated $7,500 on an annual basis, and the Chair of the Committee was compensated $15,000 annually. (2)Restricted stock units totaling 2,632 were issued on June 14, 2023 to both Mr. Cutter and Mr. Lahiff. Restricted stock awards totaling 2,632 were issued on June 14, 2023 to Continental Investment Partners, LLC. Mr. Purcell may be deemed to beneficially own such awards as a manager of Continental Investment Partners, LLC. The grant date fair value of the equity awards issued to the non-executive directors was A$25.90, or US$17.59 (converted at AUD:USD of 1.47259:1.00). (3)As of December 31, 2023, the following non-executive directors had stock options outstanding with respect to the following number of shares: Mr. Cutter – 6,579; and Mr. Lahiff – 5,264. The amounts reported in this column reflect the accounting cost for these awards in the year of grant and do not correspond to the actual economic value that may be received by the director upon the sale of any of the underlying shares of common stock. (4)Amounts represent a stipend paid to each director for Company-related travel expenses and to support educational resources for each director. (5)Ms. Gilmore resigned from the Board of Directors on April 24, 2023. (6)Ms. Webster was appointed to the Board of Directors on February 5, 2024.
ITEMS 1–6: Election of Directors
ITEMS 1–6: Election of Directors Our Board of Directors is currently comprised of six members. Clause 3.3 of the Bylaws provides that each Director shall be elected at each Annual Meeting of Stockholders and shall hold office until the next Annual Meeting of Stockholders and until his or her successor has been duly elected and qualified or until his or her earlier resignation or removal. All Directors seek re-election in accordance with the Certificate of Incorporation and the By-laws.
Summary Compensation Table
Summary Compensation Table The following table sets forth the compensation paid to, received by, or earned during each of fiscal year 2023 and 2022 by each of our named executive officers.
Summary Compensation Table
| Name and principal position | Year | Salary | Bonus | Stock awards(1)(2) | Option awards | Nonequity incentive plan compensation(3) | All other compensation(4) | Total ($) | | Charles Youakim, Executive Chairman and Chief Executive Officer | 2023 | $514,423 | $— | $1,168,691 | $— | $260,000 | $325 | $1,943,439 | | | 2022 | 250,000 | — | — | — | — | 56,687 | 306,687 | | Paul Paradis, Executive Director and President | 2023 | 351,923 | — | 719,739 | — | 140,000 | 13,135 | 1,224,797 | | | 2022 | 266,347 | — | — | — | — | 5,990 | 272,337 | | Karen Hartje, Chief Financial Officer | 2023 | 327,884 | — | 577,412 | — | 85,000 | 20,018 | 1,010,314 | | | 2022 | 266,347 | — | — | — | — | 16,670 | 283,017 |
Summary Compensation Table
(1)Amounts reported represent the grant date fair value, computed in accordance with FASB ASC Topic 718, of restricted stock units (“RSUs”) granted under the 2021 Equity Incentive Plan, disregarding the effects of estimated forfeitures. (2)The amounts reported in this column reflect the accounting cost for these awards and do not correspond to the actual economic value that may be received by the applicable officer upon the sale of any of the underlying shares of common stock. (3)Amounts reported represent Profit-sharing Incentive Plan ("PSIP") cash awards earned by the respective officer for the year ended December 31, 2023. (4)Amounts reported partially reflect the value of matching contributions made by the Company in 2022 and 2023 under its 401(k) retirement plan. Amounts also reflect the payment by the Company during 2022 of an aggregate of $56,037 to Mr. Youakim, reflecting legal fees (and associated tax gross-ups) attributable to counsel provided to him in his personal capacity in relation to the Company’s merger negotiations with ZipCo Limited in the first half of 2022. Although reported in this column as compensation paid to Mr. Youakim, the Company considers the cost of these services to be a business expense and not a personal benefit to Mr. Youakim.
Outstanding Equity Awards at Fiscal Year-End 2023
Outstanding Equity Awards at Fiscal Year-End 2023 The following table sets forth information regarding outstanding option awards and unvested stock awards held by each of the named executive officers on December 31, 2023.
Outstanding Equity Awards at Fiscal Year-End 2023
| | Option Awards | | | | | Stock Awards | | | | | Name | Number of securities underlying unexercised options (#) exercisable | Number of securities underlying unexercised options (#) unexercisable | Equity incentive plan awards: Number of securities underlying unexercised unearned options (#) | Option exercise price ($) | Option expiration date | Number of shares or units of stock that have not vested (#) | Market value of shares or units of stock that have not vested ($) | Equity incentive plan awards: Number of unearned shares, units or other rights that have not vested (#) | Equity incentive plan awards: Market or payout value of unearned shares, units or other rights that have not vested ($) | | Charles Youakim | 13,159 | — | — | 31.92(1) | 7/26/2029 | — | — | 52,632(4) | 1,080,009 | | Paul Paradis | 13,159 | — | — | 31.92(1) | 7/26/2029 | — | — | 31,579(4) | 648,001 | | Karen Hartje | 13,159 | — | — | 31.92(1) | 7/26/2029 | — | — | 21,053(4) | 432,008 | | | 45,658 | — | — | 1.90(2) | 8/25/2028 | — | — | — | — | | | 10,281 | — | — | 61.65(3) | 1/1/2030 | — | — | — | — |
Outstanding Equity Awards at Fiscal Year-End 2023
(1)Reflects stock options that vested as to 25% of the shares subject to the award on the one-year anniversary of the date of grant (July 27, 2020), with the remaining shares vesting in equal monthly installments over a 36-month period thereafter. (2)Reflects stock options granted to Ms. Hartje in connection with her commencement of employment with the Company that vested as to 25% of the shares subject to the award on the one-year anniversary of the date of grant (August 26, 2018), with the remaining shares vesting in equal monthly installments over a 36-month period thereafter. (3)Reflects LTIP Options that vested based on the satisfaction of both a time and performance-based vesting condition for the year ended December 31, 2020. The vesting conditions were not met for 2021 or 2022. (4)Reflects Long-term Incentive Plan awards issued on April 10, 2023 for Ms. Hartje and June 14, 2023 for Messrs. Youakim and Paradis. The awards, in the form of Restricted Stock Units, vest over a four year period, with 25% of the award vesting on January 1, 2024 and the remaining vesting on a quarterly basis thereafter. The value of the awards is calculated using $20.52, the closing trading price of our common stock on December 31, 2023.
Potential Payments Upon Termination of Employment
Potential Payments Upon Termination of Employment Each of our named executive officers is entitled to severance and other benefits upon a termination of employment in certain circumstances, as described below. The employment of our named executive officers may be terminated: (i) at any time upon mutual written agreement of the parties; (ii) by us immediately and without prior notice for cause (as defined in the named executive officer’s employment agreement); (iii) immediately upon death or disability; (iv) by us other than for cause with advance written notice of at least 12 months (six months, in the case of Ms. Hartje); or (v) by the named executive officer, other than due to death or disability, with advance written notice of at least 12 months (six months, in the case of Ms. Hartje). In lieu of providing the written notice described above, the Company may elect to make a payment to the named executive officer equal to the regular compensation that the named executive officer would have earned over the applicable notice period. In addition, in the event that a named executive officer’s employment is terminated by the Company in connection with, or within the three-year period following, a change of control (as defined in the Company’s employee stock option plan), all stock options held by the named executive officer under such plan will immediately vest and become exercisable.