DEF 14A of Sezzle Inc.
Filed Apr 30, 2025 · FY20240001662991-25-000081
Director Biographies
Director Biographies
Director Biographies
| | Kyle Brehm Independent Non-Executive Director | | | Mr. Brehm has been an officer and tax attorney at the law firm of Fredrikson & Byron P.A. since November 2019. Prior to this, Mr. Brehm was a director at PricewaterhouseCoopers LLP and was a member of the board of directors and treasurer of eQuality-Pathways to Potential, a non-profit organization organized in Minneapolis, MN, from 2012 until 2022. Mr. Brehm has a Bachelor of Arts from St. John’s University, a Juris Doctor (JD) degree from University of Minnesota Law School and an MBA from the University of Minnesota-Carlson School of Management. We believe Mr. Brehm is well-qualified to serve as a member of our Board of Directors. Mr. Brehm has relevant legal and tax experience that provides valuable insight to the Company and the industry which it operates. | | Age: 40 Director since 2024 Committees: •Compensation •Nominating and Corporate Governance •Audit and Risk | |
Director Biographies
| | Stephen East Independent Non-Executive Director | | | Stephen East currently sits on the Board of Toll Brothers, Inc. (NYSE: TOL) and previously was one of the country’s preeminent Wall Street Housing analysts. He is widely recognized as an influential expert on the single-family new construction industry and Consumer Behavior. With 30+ years of wide-ranging research and industry experience, Stephen is well-known for his focus on strategy, managerial talent, capital structure and housing-related macroeconomics. Stephen retired from Wells Fargo after serving as a Managing Director and Senior Consumer Analyst, heading the Equity Research team that covered the Homebuilding and Building Products sectors. Prior to joining Wells Fargo, he was recruited by Evercore ISI and spent four years there as a Partner and Senior Managing Director heading the firm’s Housing research effort. Prior to joining Evercore ISI, he spent nearly two decades in equity research and investment management, including roles as Director of Research. He also spent six years in industry at Monsanto. Stephen was II ranked for numerous years, including multiple years ranked No. 1 in the annual Institutional Investor analyst survey for Homebuilding & Building Products. He was also recognized by StarMine as a top analyst. Mr. East is an active member of various industry trade groups, including ULI and NAHB and has been a frequent speaker at real estate industry conferences and media outlets. Stephen has been a commissioner on his local Planning & Zoning Commission for more than 10 years, while also volunteering on his local Crisis Response Team. Stephen is a CFA Charterholder and is a Financial Expert as defined by the Sarbanes-Oxley Act of 2002. He currently sits on the Audit & Risk and Executive Compensation committees and is Chair of the Public Debt & Equity Securities committee of Toll Brothers Board. Stephen earned an MBA from the University of Missouri and a BS in Finance from Arkansas State University, which he attended on an athletic scholarship. We believe that Mr. East is a valuable asset to our Board of Directors due to his financial acumen and extensive experience in the capital markets and corporate governance at public companies. | | Age: 61 Director since 2024 Committees: •Compensation (Chair) •Nominating and Corporate Governance (Chair) •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: 41 Director since 2018 Committees: None. | |
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: 68 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: 48 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. The fees earned by the non-executive directors for the year ended December 31, 2024, including stock and option awards, are as set forth below:
Director Compensation
| Name(1) | Fees earned or paid in cash(2) | Stock awards(3) | Option awards(4) | Non-equity incentive plan compensation | Nonqualified deferred compensation earnings | All other compensation(5) | Total | | Kyle Brehm | $37,500 | $42,165 | $— | $— | $— | $2,463 | $82,128 | | Mike Cutter(6) | 43,932 | — | 78,482 | — | — | 12,998 | 135,412 | | Stephen East | 45,000 | 42,165 | — | — | — | 748 | 87,913 | | Paul Lahiff(7) | 68,057 | 78,499 | — | — | — | 26,322 | 172,878 | | Paul Purcell(8) | 32,500 | 78,499 | — | — | — | 3,250 | 114,249 | | Karen Webster | 75,000 | 78,499 | — | — | — | 8,672 | 162,171 |
Director Compensation
(1)The Company’s current non-executive directors, Kyle Brehm, Stephen East, and Karen Webster, were appointed to the Board of Directors in 2024 and received no director compensation for the year ended December 31, 2023. (2)Fees earned or paid in cash represent compensation for serving as a member of the Board of Directors and as Chair and/or member of the Audit and Risk Committee, Compensation Committee, and Nominating and Corporate Governance Committee. (3)Stock awards issued to Messrs. Brehm and East were granted on July 18, 2024, each receiving 3,000 Restricted Stock Units ("RSUs"). The awards vest over a four-year term, with 25% of the awards issued to Messrs. Brehm and East vesting April 1, 2025, and the remaining awards vesting on a quarterly basis thereafter. The value of the award issued to Messrs. Brehm and East was determined using $14.06 (the fair value of the Company's common stock on the grant date). Mr. Lahiff, Mr. Purcell, and Ms. Webster were each issued 6,900 Restricted Stock Units on April 1, 2024. The awards vest over a four-year term, with 25% of the awards vesting on April 1, 2025 and the remaining awards vesting on a quarterly basis thereafter. The per share value of the awards issued on April 1, 2024 was $11.38 (the fair value of the Company's common stock on the grant date). In connection with Mr. Lahiff's resignation from the Board, on July 20, 2024, in recognition of Mr. Lahiff's service to the Company, the Company accelerated the vesting of the award whereby 25% of the RSUs vested on the date of resignation and the remaining awards outstanding were forfeit. (4)Mr. Cutter was issued 7,452 options on April 1, 2024. The awards vest over a four-year term with 25% of the options vesting on April 1, 2025 and the remaining awards vesting on a quarterly basis thereafter. The value of the award issued to Mr. Cutter was determined on the grant date using the Black-Scholes valuation method. In connection with Mr. Cutter's resignation from the Board, on July 18, 2024, in recognition of Mr. Cutter's service to the Company, the Company accelerated the vesting of the award whereby 25% of the options vested on the date of resignation and the remaining awards outstanding were forfeit. (5)Amounts represent a stipend paid to each director for Company-related travel expenses and to support educational resources for each director. (6)Mr. Cutter resigned from the Board of Directors on July 18, 2024. (7)Mr. Lahiff resigned from the Board of Directors on July 20, 2024. (8)Mr. Purcell resigned from the Board of Directors on June 6, 2024.
PROPOSAL ONE: Election of Directors
PROPOSAL ONE: Election of Directors Our Board of Directors is currently comprised of five 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 election in accordance with the Certificate of Incorporation and the Bylaws.
Delinquent Section 16(a) Reports
Delinquent Section 16(a) Reports Section 16(a) of the Securities Exchange Act of 1934 requires our executive officers and directors, and persons who own more than 10% of our common stock, to file reports of ownership and changes in ownership with the SEC. The SEC has designated specific due dates for these reports and we must identify in this proxy statement those persons who did not file these reports when due. We assist our directors and officers by completing and filing reports on their behalf. Based solely on our review of copies of the reports filed with the SEC and the written representations of our directors and executive officers, we believe that each person who at any time during the year ended December 31, 2024 was a director or an executive officer of the Company, or held more than 10% of our common stock, complied with all reporting requirements for fiscal year 2024, other than: •One Form 3 for Stephen East omitting 7,800 shares of common stock that Mr. East owned when he joined the Board of Directors of the Company on July 18, 2024, and one Form 4 reporting a gift of 600 shares of common stock transferred by Mr. East on December 3, 2024. This omission and transaction of Mr. East were due to an administrative error on the part of the Company and subsequently reported on Form 5 on January 31, 2025. •One Form 3 for Kyle Brehm omitting 3,000 shares of common stock that Mr. Brehm owned when he joined the Board of Directors of the Company on July 18, 2024. This omission was due to an administrative error on the part of the Company and the Form 3 was subsequently amended to include the omitted shares of common stock on October 7, 2024. •Direct holdings of 588,356 shares of common stock and indirect holdings of 505,266 shares of common stock of Mr. Paradis were inadvertently omitted from certain Form 4s filed by the Company between January 3, 2025 and the original Form 4s. These omissions were due to an administrative error on the part of the Company and the Form 4s were amended to include the omitted shares of common stock on January 3, 2025.
Summary Compensation Table
Summary Compensation Table The following table sets forth the compensation paid to, received by, or earned during each of fiscal year 2024 and 2023 by each of our named executive officers.
Summary Compensation Table
| Name and principal position | Year | Salary | Bonus | Stock awards(1)(2) | Option awards(1)(2) | Nonequity incentive plan compensation(3) | All other compensation(4) | Total ($) | | Charles Youakim, Executive Chairman and Chief Executive Officer | 2024 | $536,510 | $— | $463,920 | $682,642 | $540,750 | $291 | $2,224,113 | | | 2023 | 514,423 | — | 1,168,691 | — | 260,000 | 325 | 1,943,439 | | Paul Paradis, Executive Director and President | 2024 | 362,783 | — | 914,560 | — | 274,238 | 20,714 | 1,572,295 | | | 2023 | 351,923 | — | 719,739 | — | 140,000 | 13,135 | 1,224,797 | | Karen Hartje, Chief Financial Officer | 2024 | 342,058 | — | 914,560 | — | 155,000 | 20,816 | 1,432,434 | | | 2023 | 327,884 | — | 577,412 | — | 85,000 | 20,018 | 1,010,314 |
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”) and unrestricted stock earned by each executive officer during fiscal years 2024 and 2023. The RSUs and unrestricted stock were 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. Stock award amounts disclosed for 2024 include unrestricted stock earned for the fiscal year 2024 and issued March 20, 2025 under the Profit-sharing Incentive Plan ("PSIP"), totaling $463,920 for Mr. Youakim and $231,960 for both Mr. Paradis and Ms. Hartje. (3)Amounts reported represent PSIP cash awards earned by the respective officer. (4)Amounts primarily reflect the value of matching contributions made by the Company in 2023 and 2024 under its 401(k) retirement plan, as well as other fringe benefits.
Outstanding Equity Awards at Fiscal Year-End 2024
Outstanding Equity Awards at Fiscal Year-End 2024 The following table sets forth information regarding outstanding option awards and unvested stock awards held by each of the named executive officers on December 31, 2024.
Outstanding Equity Awards at Fiscal Year-End 2024
| | Option Awards | | | | | Stock Awards | | | | | Name | Number of securities underlying unexercised options (#) exercisable | Number of securities underlying unexercised options (#) unexercisable | Equity incentive plan awards: Number of securities underlying unexercised unearned options (#) | Option exercise price ($) | 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 | 78,954 | — | — | 5.32(1) | 7/27/2029 | — | — | 177,636(5) | 7,572,623 | | | — | — | 64,818 | 11.38(4) | 4/1/2034 | — | — | — | — | | Paul Paradis | 78,954 | — | — | 5.32(1) | 7/27/2029 | — | — | 106,578(5) | 4,543,420 | | | — | — | — | — | — | — | — | 60,000(6) | 2,557,800 | | Karen Hartje | 273,948 | — | — | 0.32(2) | 8/26/2028 | — | — | 71,064(5) | 3,029,458 | | | 78,954 | — | — | 5.32(1) | 7/27/2029 | — | — | 60,000(6) | 2,557,800 | | | 61,686 | — | — | 8.68(3) | 4/15/2031 | — | — | — | — |
Outstanding Equity Awards at Fiscal Year-End 2024
(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 time- and performance-based vesting conditions for the year ended December 31, 2020. The vesting conditions were not met for 2021 or 2022. (4)Reflects Long-term Incentive Plan options issued to Mr. Youakim on April 1, 2024 under the Company's LTIP program. The options vest over a four-year period, with 25% of the award vesting on April 1, 2025 and the remaining vesting on a quarterly basis thereafter. (5)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 $42.63, the closing trading price of our common stock on December 31, 2024. (6)Reflects Long-term Incentive Plan awards issued on April 1, 2024 to Mr. Paradis and Ms. Hartje in the form of Restricted Stock Units. The awards vest over a four-year period, with 25% of the award vesting on April 1, 2025 and the remaining vesting on a quarterly basis thereafter. The value of the awards is calculated using $42.63, the closing trading price of our common stock on December 31, 2024.
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.