DEF 14A of Lemonade, Inc.
Filed Apr 24, 2024 · FY20230001691421-24-000047
Proposal 1: Election of Directors
Proposal 1: Election of Directors We currently have six (6) directors on our Board. At the Annual Meeting, two (2) Class I Directors, Daniel Schreiber and Mwashuma Nyatta, are to be elected to hold office until the Annual Meeting of Stockholders to be held in 2027 and until each such director’s respective successor is elected and qualified or until each such director’s earlier death, resignation or removal. The proposal regarding the election of directors requires the approval of a plurality of the votes cast. This means that the two nominees receiving the highest number of affirmative “FOR” votes will be elected as Class I Directors. Votes withheld and broker non-votes are not considered to be votes cast and, accordingly, will have no effect on the outcome of the vote on this proposal. As set forth in our Amended and Restated Certificate of Incorporation, the Board of Directors is currently divided into three classes with staggered, three-year terms. At each annual meeting of stockholders, the successors to directors whose terms then expire will be elected to serve from the time of election and qualification until the third annual meeting following election. The current class structure is as follows: Class I, whose current term expires at the Annual Meeting and whose subsequent term, if elected, will expire at the 2027 Annual Meeting of Stockholders; Class II, whose current term expires at the 2025 Annual Meeting of Stockholders and whose subsequent term will expire at the 2028 Annual Meeting of Stockholders; and Class III, whose current term expires at the 2026 Annual Meeting of Stockholders and whose subsequent term will expire at the 2029 Annual Meeting of Stockholders. The current Class I Directors are Daniel Schreiber and Mwashuma Nyatta; the current Class II Directors are Shai Wininger and Dr. Samer Haj-Yehia; and the current Class III Directors are Michael Eisenberg and Debra Schwartz. Our Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws provide that the authorized number of directors may be changed from time to time by the Board of Directors. Any additional directorships resulting from an increase in the number of directors will be distributed among the three classes so that, as nearly as possible, each class will consist of one-third of the directors. The division of our Board of Directors into three classes with staggered three-year terms may delay or prevent a change of our management or a change in control of our Company. Our directors may be removed only for cause by the affirmative vote of the holders of at least two-thirds of our outstanding capital stock entitled to vote in the election of directors. If you submit a proxy but do not indicate any voting instructions, the persons named as proxies will vote the shares of common stock represented thereby for the election as Class I Directors of the person whose name and biography appears below. In the event that any of Mr. Schreiber and Mr. Nyatta should become unable to serve, or for good cause will not serve, as a director, it is intended that votes will be cast for a substitute nominee designated by the Board of Directors or the Board may elect to reduce its size. The Board of Directors has no reason to believe that any of Mr. Schreiber and Mr. Nyatta will be unable to serve if elected. Each of Mr. Schreiber and Ms. Nyatta has consented to being named in this proxy statement and to serve if elected.
Daniel Schreiber
Daniel Schreiber Daniel Schreiber has served as our Co-Founder, Chief Executive Officer, and Chairman of our board of directors since our founding in June 2015. Prior to co-founding Lemonade in 2015, Mr. Schreiber served as President and a member of the board of directors of Powermat Technologies Ltd., a wireless charging solutions and technology company, from 2011 to 2015. From 2003 to 2011, he served as Senior Vice President of Marketing and Vice President of Marketing and Business Development at SanDisk and M-Systems (which was acquired by SanDisk in 2006), respectively. In 1997, Mr. Schreiber co-founded and acted as the Chief Executive Officer of Alchemedia Inc., an internet security software company acquired by Finjan Software in 2002. Prior to that, Mr. Schreiber practiced corporate commercial law at Herzog, Fox & Neeman, and was a member of the Israeli Bar Association. He holds a Bachelor of Laws with First Class Honors from King’s College London. We believe Mr. Schreiber is qualified to serve on our board of directors due to his perspective and experience from serving as a Co-Founder and Chief Executive Officer, as well as his experience leading technology companies. Mwashuma (Shu) Nyatta has served as a member of our board of directors since November 2018. Mr. Nyatta is also an independent board member for a number of private companies. In May 2022, Mr. Nyatta founded Bicycle Capital, a growth equity investment firm, and serves as its founder and managing partner. Prior to Bicycle, he was a Managing Partner at SoftBank, which he joined in 2015. At SoftBank, he invested in and sat on the boards of multiple high-growth companies across varied industries and geographies. Prior to SoftBank, Mr. Nyatta served as a Vice President at J.P. Morgan from 2011 to 2015. Mr. Nyatta has passed the Series 63 Uniform Securities Agent State Law Exam and the Series 79 Investment Banking Representative Exam, both administered by FINRA. He holds a Bachelor of Arts in Economics from Harvard College, as well as a Master of Science in Anthropology with Distinction from Oxford University, where he was a Rhodes Scholar. We believe Mr. Nyatta is qualified to serve on our board of directors due to his experience in the finance field and his service as a director at numerous companies. Continuing members of the Board of Directors:
Class II Directors (terms to expire at the 2025 Annual Meeting)
Class II Directors (terms to expire at the 2025 Annual Meeting) The current members of the Board of Directors who are Class II Directors are as follows:
Class II Directors (terms to expire at the 2025 Annual Meeting)
| Name | Age | Served as a Director Since | Position with Lemonade | | Shai Wininger | 50 | 2015 | Co-Founder, President and Director | | Dr. Samer Haj-Yehia | 54 | 2023 | Director |
Class II Directors (terms to expire at the 2025 Annual Meeting)
The principal occupations and business experience, for at least the past five years, of each Class II Director are as follows:
Shai Wininger
Shai Wininger Shai Wininger has served in various roles, including as our Co-Founder, Co-Chief Executive Officer, Secretary, Treasurer, and Chief Technology Officer, since our founding in June 2015. Mr. Wininger has served as our President since January 1, 2024, and is a member of our board of directors since June 2015. Prior to co-founding Lemonade in 2015, Mr. Wininger founded Fiverr Ltd. in 2009, and as the Chief Technology Officer, managed the engineering, design, and product departments. Prior to 2010, Mr. Wininger served in senior management capacities for companies including: from 2005 to 2010, Mobideo Aerospace, an industrial grade analytics and control platform; from 2003 to 2005, Handsmart Software, a mobile licensing platform for content driven, mobile apps; and from 1999 to 2003, Trimus Inc., a virtual reality web browser. Mr. Wininger also served as a resident faculty member of Computer Graphics at The Neri Bloomfield Academy of Design and Education from 2002 to 2007 in Haifa, Israel. We believe Mr. Wininger is qualified to serve on our board of directors due to his visionary perspective, technical acumen, and experience in founding and leading technology companies.
Dr. Samer Haj-Yehia
Dr. Samer Haj-Yehia Dr Samer Haj-Yehia has served as a member of our board of directors since November 2023. Until October 2023, he was the Group Executive Chairman of Bank Leumi, Israel’s largest and oldest bank. Under his leadership since 2019, Leumi became the largest and most efficient bank in Israel, grew its income and profitability, and underwent technological transformation and innovation. While in the US, Dr. Haj-Yehia practiced investment management, trading, and fintech innovation at leading financial institutions, including at Fidelity. He also served as a member of public and government committees, teaches finance and fintech at Reichman University, and is a guest speaker at international conferences. Dr. Haj-Yehia holds a Ph.D. in economics from MIT, and an MBA (summa cum laude), LLB, MA (magna cum laude) in economics, and BA (magna cum laude) in accounting, all from Hebrew University. He is a CFA charterholder. We believe Dr. Samer Haj-Yehia is qualified to serve on our board of directors due to his extensive executive and board experience at various conglomerates across multiple industries in Israel and the US.
Class III Directors (terms to expire at the 2026 Annual Meeting)
Class III Directors (terms to expire at the 2026 Annual Meeting) The current members of the Board of Directors who are Class III Directors are as follows:
Class III Directors (terms to expire at the 2026 Annual Meeting)
| Name | Age | Served as a Director Since | Position with Lemonade | | Michael Eisenberg | 52 | 2015 | Lead Independent Director | | Debra Schwartz | 45 | 2023 | Director |
Class III Directors (terms to expire at the 2026 Annual Meeting)
The principal occupations and business experience, for at least the past five years, of each Class III Director are as follows:
Michael Eisenberg
Michael Eisenberg Michael Eisenberg has served as a member of our board of directors since July 2015. Mr. Eisenberg is a Partner at Aleph, an early stage venture capital fund that invests in Israeli entrepreneurs, which he joined in July 2013. In addition to his role on our board of directors, Mr. Eisenberg serves as a member of the board of several private companies. He holds a Bachelor of Arts in Political Science from Yeshiva University. We believe Mr. Eisenberg is qualified to serve on our board of directors due to his technology investment experience and his service as a director at numerous companies.
Debra Schwartz
Debra Schwartz Debra Schwartz has served as a member of our board of directors since November 2023. She is currently the Chief Financial Officer of H1, a leading healthcare data technology company whose mission is to connect the world to the right doctors. She previously served as CFO at Cameo, the celebrity video shoutout pioneer, and at Bustle Digital Group, the digital media provider. Ms. Schwartz spent more than a decade as an equity analyst with Goldman Sachs and Credit Suisse, and holds an MBA from Harvard University, and a BA/BS from the University of Pennsylvania. We believe Ms. Schwartz is qualified to serve on our board of directors as she is a seasoned financial leader skilled at enabling companies to innovate, grow and scale.
2023 Performance Highlights and Pay for Performance
(1) Refer to "Management's Discussion and Analysis - Results of Operations" included in our Annual Report on Form 10-K for the year ended December 31, 2023 that accompanies this Proxy Statement. •Gross written premium increased by $182.7 million, or 33%, to $738.4 million for the year ended December 31, 2023 as compared to the year ended December 31, 2022. The increase was primarily due to a 12% increase in net added customers driven by the success of our digital advertising campaigns and partnerships. We also continued to expand our geographic footprint and product offerings. In addition, we saw a 7% increase in premiums per customer year primarily due to an increasing prevalence of multiple policies per customer, growth in the overall average policy value, and continued shift in the mix of underlying products toward higher value policies. •Total revenue increased $173.1 million, or 67% to $429.8 million due primarily to the increase in gross written premium, an increase in ceding commission on earned premiums ceded to third party reinsurers and an increase in commissions and other income mainly from premiums placed with third-party insurance companies, an increase in investment income and increased installment fees. •Loss and Loss Adjustment Expenses, net increased $113.1 million, or 68%, to $280.4 million for the year ended December 31, 2023 compared to the year ended December 31, 2022. The increase was primarily in line with growth in premium, increase in net retained losses due to change in participation under the proportional reinsurance contract and increased claims costs due to impact of inflation. In order to align pay with performance, a significant portion of our NEOs’ compensation is delivered in the form of equity awards which depend on our actual performance. For fiscal year 2023, approximately 79% of our NEOs’ total target compensation was in the form of equity awards, which vest based on service period.
2023 Compensation Highlights
2023 Compensation Highlights Consistent with our compensation philosophy, key compensation decisions for 2023 included the following: •Base Salaries. The 2023 base salaries for our NEOs remained consistent with the 2022 base salaries, or was increased in order to appropriately position compensation in relation to the market median, based on the market analysis of our independent compensation consultant, as described further below. •Equity Compensation. In 2023, we granted approximately 79% of our NEOs’ target direct compensation as equity-based compensation in the form of stock options and restricted stock units (RSUs). We believe that equity compensation specifically, stock options and RSUs, effectively align the interests of our executives with those of our stockholders by directly linking compensation to the value of our common stock. Stock options require an increase in stockholder value in order for our NEOs to realize any value.
Compensation Governance and Best Practices
| What We Do | | What We Do Not Do | | | ✓ | Equity compensation grants to promote executive retention and reward long-term value creation | × | Do not grant uncapped cash incentives or guaranteed equity compensation | | ✓ | Fully independent directors on Compensation Committee | × | Do not provide compensation-related tax gross ups | | ✓ | Clawback policy in place | × | Do not provide significant perquisites | | ✓ | Engage an independent compensation consultant to advise our Compensation Committee | × | Do not permit hedging or pledging of Company securities |
Role of Compensation Consultant
Role of Compensation Consultant In order to design a competitive executive compensation program that will continue to attract top executive talent and reflect our compensation philosophy, our Compensation Committee has retained Aon's Human Capital Solutions Practice, a division of Aon plc (Aon), as an independent compensation consultant to provide executive compensation advisory services, help evaluate our compensation philosophy and objectives and provide guidance in administering our executive compensation program. The Compensation Committee has evaluated Aon's independence pursuant to the requirements of NYSE and SEC rules and has determined that Aon does not have any conflicts of interest in advising the Compensation Committee. Aon did not provide any other services to the Company in 2023 for which the amount of fees exceeded $120,000. In 2023, our Board selected our peer group as follows:
Role of Compensation Consultant
| Alteryx, Inc. | Everbridge, Inc. | Nerdwallet, Inc. | Upwork, Inc. | | AppFolio, Inc. | Fastly, Inc. | Pager Duty, Inc. | Varonis Systems, Inc. | | Appian Corporation | Fiverr International, Inc. | Palomar Holdings, Inc. | Vertex, Inc. | | Blend Labs, Inc. | Goosehead Insurance | Q2 Holdings, Inc. | Yext, Inc. | | Domo, Inc. | LendingClub Corporation | Rapid7, Inc. | Zuora, Inc. | | Duck Creek Technologies | MeridianLink, Inc. | Root, Inc. | | | Enova International, Inc. | Momentive Global, Inc. | Upstart Holdings, Inc. | |
Role of Compensation Consultant
In March 2023, Aon provided an analysis of data derived from (i) members of our peer group and (ii) the Radford Global Compensation Database survey, the constituent companies of which were not provided to the Compensation Committee. For 2023, the Compensation Committee used Aon analysis to help structure a competitive executive compensation program, position executive compensation by considering market data, and make individual compensation decisions based on comparable positions at companies with which we compete for talent. While the Compensation Committee does not establish compensation levels solely based on a review of competitive data or benchmark to any particular level, it believes such data is a useful tool in its deliberations as our compensation policies and practices must be competitive in the marketplace for us to be able to attract, motivate and retain qualified executive officers.
Cash Incentive Compensation
Cash Incentive Compensation We currently do not provide annual cash incentive compensation to our NEOs.
Equity Compensation
Equity Compensation We view equity-based compensation as a critical component of our balanced total compensation program. Equity-based compensation creates an ownership culture among our employees that provides an incentive to contribute to the continued growth and development of our business and aligns the interests of our executives with those of our stockholders. We do not currently have any formal policy for determining the number of equity-based awards to grant to named executive officers. Our Compensation Committee believes it is essential to provide equity-based compensation to our executive officers in order to link the interests and risks of our executive officers with those of our stockholders, reinforcing our commitment to ensuring a strong linkage between company performance and pay. In 2023, we granted equity-based compensation to our NEOs in the form of stock options and restricted stock units. The Board in 2023 also gave our NEOs, excluding the Co-CEOs, the choice to receive stock options or a restricted stock grant of equivalent value. In 2023, we made the following equity grants to our NEOs:
Equity Compensation
| Name | Number of Shares Underlying Stock Options | Restricted Stock Units | | Daniel Schreiber | 117,200 | — | | Shai Wininger | 117,200 | — | | Tim Bixby | 160,200 | 67,000 | | Adina Eckstein | 47,100 | 98,500 | | John Peters | — | 45,700 | | Maya Prosor | 183,700 | — |
Equity Compensation
These grants were approved by the Compensation Committee and the Board following consideration of the factors set forth above under “Determination of Executive Compensation. Each of the stock option and restricted stock unit awards granted in 2023 vest in 16 equal quarterly installments, subject to continued service (refer to Summary Compensation Table and Grants of Plan-Based Awards in 2023). We maintain an equity incentive plan, the 2020 Incentive Award Plan, referred to below as the 2020 Plan, in order to facilitate the grant of cash and equity incentives to directors, employees (including our named executive officers), and consultants of our company and certain of its affiliates and to enable our company and certain of its affiliates to obtain and retain services of these individuals, which is essential to our long-term success. The maximum number of shares of common stock reserved under the 2020 Plan is (i) 3,650,000 shares of our common stock, (ii) any shares which, as of the 2020 Plan’s effective date, are available for issuance under the 2015 Plan, or are subject to awards under the 2015 Plan which are forfeited or lapse unexercised and (iii) an annual increase on the first day of each year beginning in 2021 and ending in and including 2030, equal to the lesser of (A) 5% of the outstanding shares of all classes of our common stock on the last day of the immediately preceding fiscal year and (B) such lesser amount as determined by our Board. We also maintain the Lemonade, Inc. Amended and Restated 2015 Incentive Share Option Plan (the “2015 Plan”). Following our IPO, we do not make any new grants of awards under the 2015 Plan. Any unvested stock options granted pursuant to the 2015 Plan remain outstanding and continue to vest in accordance with their terms. The 2015 Plan, and together with the 2020 Plan, the Equity Plans, provide our and our Israeli subsidiary’s employees (including the named executive officers), consultants, non-employee directors, and other service providers and those of our affiliates the opportunity to participate in the equity appreciation of our business through the receipt of options to purchase shares of our common stock. We believe that such stock options encourage a sense of proprietorship and stimulate interest in our development and financial success. As part of the Metromile Acquisition, we assumed the Metromile 2011 Incentive Stock Plan (“2011 Plan”) and Metromile 2021 Incentive Stock Plan (“2021 Plan”) (collectively referred to as “Assumed Plans”). We also assumed 404,207 equity awards granted under the respective Assumed Plans, which equity awards will be settled in the Company’s common stock. The remaining unallocated shares reserved under both the 2011 and 2021 Plan were cancelled and no new awards will be granted under these Assumed Plans. As of December 31, 2023, stock options covering an aggregate of 9,595,257 shares and restricted stock units of 3,568,735 of our common stock were outstanding under the Equity Plans.
Severance and Change in Control Arrangements
Severance and Change in Control Arrangements We are party to employment arrangements with each of our NEOs, which provide for severance benefits and payments upon certain terminations without cause or resignations for good reason. Our Compensation Committee believes that these types of arrangements are necessary to attract and retain executive talent and are a customary component of executive compensation. In particular, such arrangements can mitigate a potential disincentive for our NEOs when they are evaluating a potential acquisition of the Company and can encourage retention through the conclusion of the transaction. The payments and benefits provided under our severance and change in control arrangements are designed to be competitive with market practices. A description of these arrangements, as well as information on the estimated payments and benefits that our NEOs would have been eligible to receive as of December 31, 2023, are set forth in “Potential Payments Upon Termination or Change in Control” below.
Other Policies and Considerations
Other Policies and Considerations Clawback Policy. We believe in maintaining best practices for our executive compensation program. Consistent with that belief, our board of directors has adopted a compensation recovery (or “clawback” policy) as required by Rule 10D-1 under the Securities Exchange Act of 1934, as amended, and the corresponding listing standards of the NYSE, which provides for the mandatory recovery from current and former officers of incentive-based compensation that was erroneously awarded during the three fiscal years preceding the date that the company is required to prepare an accounting restatement, including to correct an error that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period. The amount required to be recovered is the excess of the amount of incentive-based compensation received over the amount that otherwise would have been received had it been determined based on the restated financial measure. Derivatives Trading, Hedging, and Pledging Policies. Our Insider Trading Policy provides that no employee, officer, or director may acquire, sell, or trade in any interest or position relating to the future price of Company securities, such as a put option, a call option or a short sale, or engage in hedging transactions. In addition, our Insider Trading Policy provides that no employee, officer, or director to may pledge Company securities as collateral to secure loans. This prohibition means, among other things, that these individuals may not hold Company securities in a “margin” account, which would allow the individual to borrow against their holdings to buy securities. Section 409A. The Compensation Committee takes into account whether components of the compensation for our executive officers will be adversely impacted by the penalty tax imposed by Section 409A of the Code, and aims to structure these components to be compliant with or exempt from Section 409A to avoid such potential adverse tax consequences. Section 162(m). Section 162(m) of the Code disallows a tax deduction to public companies for compensation in excess of $1 million paid to “covered employees”, which generally includes all NEOs. While the Compensation Committee may take the deductibility of compensation into account when making compensation decisions, the Compensation Committee will award compensation that it determines to be consistent with the goals of our executive compensation program even if such compensation is not deductible by us. “Golden Parachute” Payments. Sections 280G and 4999 of the Code provide that certain executive officers and other service providers who are highly compensated or hold significant equity interests may be subject to an excise tax if they receive payments or benefits in connection with a change in control of the Company that exceeds certain prescribed limits, and that we, or a successor, may forfeit a tax deduction on the amounts subject to this additional tax. While the Compensation Committee may take the potential forfeiture of such tax deduction into account when making compensation decisions, it will award compensation that it determines to be consistent with the goals of our executive compensation program even if such compensation is not deductible by us. We do not provide any tax gross-ups to cover excise taxes under Section 4999 in connection with a change in control. Accounting for Share-Based Compensation. We follow Financial Accounting Standard Board Accounting Standards Codification Topic 718, Compensation — Stock Compensation (“ASC Topic 718”), for our share-based compensation awards. ASC Topic 718 requires companies to measure the compensation expense for all share-based payment awards made to employees and directors, including stock options, 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 NEOs may never realize any value from their awards.
Summary Compensation Table
Summary Compensation Table The following table sets forth information concerning the compensation of our named executive officers for the years ended December 31, 2023, December 31, 2022 and December 31, 2021.
Summary Compensation Table
| Name and Principal Position | Year | Salary (1) | Bonus | Options (2) | Stock Awards (2) | All Other Compensation(1) | Total | | Daniel Schreiber, Co-Founder and Co-Chief Executive Officer | 2023 | $392,732 | $— | $1,209,932 | $— | $119,189(3) | $1,721,853 | | | 2022 | $375,225 | $— | $7,541,200 | $— | $119,376 | $8,035,801 | | | 2021 | $359,128 | $— | $21,031,500 | $— | $121,369 | $21,511,997 | | Shai Wininger, Co-Founder, Co-Chief Executive Officer and President | 2023 | $392,732 | $— | $1,209,932 | $— | $148,885(4) | $1,751,549 | | | 2022 | $375,225 | $— | $7,541,200 | $— | $159,088 | $8,075,513 | | | 2021 | $359,128 | $— | $21,031,500 | $— | $121,369 | $21,511,997 | | Tim Bixby, Chief Financial Officer and Treasurer | 2023 | $685,000 | $— | $1,762,966 | $1,217,390 | $13,200(5) | $3,678,556 | | | 2022 | $450,000 | $— | $2,825,421 | $— | $8,700 | $3,284,121 | | | 2021 | $450,000 | $— | $— | $— | $8,700 | $458,700 | | Adina Eckstein, Chief Operating Officer | 2023 | $360,186 | $— | $486,244 | $1,718,305 | $70,968(6) | $2,635,703 | | | 2022 | $375,225 | $848,747 | $752,559 | $— | $74,641 | $2,051,172 | | John Peters, Chief Insurance Officer | 2023 | $212,500 | $— | $— | $782,641 | $10,218(5) | $1,005,359 | | | 2022 | $410,000 | $— | $332,403 | $— | $8,700 | $751,103 | | | 2021 | $410,000 | $— | $1,022,992 | $— | $8,700 | $1,441,692 | | Maya Prosor, Chief Business Officer | 2023 | $400,000 | $— | $2,061,784 | $— | $— | $2,461,784 |
Summary Compensation Table
| (1) For 2023, compensation amounts received in non-U.S. currency have been converted into U.S. dollars using an exchange rate of 3.69 New Israeli Shekel (“NIS”) per dollar (which was the average exchange rate for 2023). For 2022, compensation amounts received in non-U.S. currency have been converted into U.S. dollars using an exchange rate of 3.4 NIS per dollar (which was the average exchange rate for 2022). For 2021, compensation amounts received in non-U.S. currency have been converted into U.S. dollars using an exchange rate of 3.4 NIS per dollar (which was the average exchange rate for 2021). | | (2) Amounts reflect the full grant-date fair value of stock options and RSUs granted during 2021, 2022 and 2023 computed in accordance with ASC Topic 718, rather than the amounts paid to or realized by the named individual. |
Summary Compensation Table
| (3) For 2023, amount reflects (i) a contribution of $23,604 by the company to an Israeli pension plan, (ii) a contribution of $724 by the company as recuperation pay, (iii) a payment of $0 for unused vacation days, (iv) a company-paid car allowance and related expenses of $21,826, (v) a contribution of $32,715 by the company to an Israeli severance fund, (vi) a contribution of $10,504 by the company to an Israeli disability fund, (vii) a contribution of $29,455 by the company for an Israeli education fund and (viii) health benefits of $361. | | (4) For 2023, amount reflects (i) a contribution of $25,528 by the company to an Israeli pension plan, (ii) a contribution of $724 by the company as recuperation pay, (iii) a payment of $0 for unused vacation days, (iv) a company-paid car allowance and related expenses of $49,600, (v) a contribution of $32,715 by the company to an Israeli severance fund, (vi) a contribution of $10,504 by the company to an Israeli disability fund, (vii) a contribution of $29,455 by the company for an Israeli education fund and (viii) health benefits of $359. | | (5) For 2023, amount reflects standard 401(k) matching contributions accrued and paid for in 2023. | | (6) For 2023, amount reflects (i) a contribution of $23,412 by the company to an Israeli pension plan, (ii) a contribution of $698 by the company as recuperation pay, (iii) a payment of $0 for unused vacation days, (iv) a company-paid car allowance and related expenses of $1,858, (v) a contribution of $30,003 by the company to an Israeli severance fund, (vi) a contribution of $10,800 by the Company to an Israeli disability fund, (vii) a contribution of $3,835 by the Company for an Israeli education fund and (viii) health benefits of $362. |
Grants of Plan-Based Awards in 2023
Grants of Plan-Based Awards in 2023 The following table provides supplemental information relating to grants of plan-based awards made during 2023 to help explain information provided above in our Summary Compensation Table. This table presents information regarding all grants of plan-based awards occurring during 2023.
Grants of Plan-Based Awards in 2023
| Name | Grant Date | All Other Stock Awards: Number of Shares of Stock or Units (#) | All Other Options Awards: Number of Securities Underlying Options (#) (1) | Exercise or Base Price of Options and Awards | Grant Date Fair Value of Stock Options and Awards (2) | | Daniel Schreiber | 08/11/23 | — | 117,200 | $15.13 | $1,209,932 | | Shai Wininger | 08/11/23 | — | 117,200 | $15.13 | $1,209,932 | | Tim Bixby | 02/07/23 | 67,000 | — | $18.17 | $1,217,390 | | | 02/07/23 | — | 66,000 | $18.17 | $790,479 | | | 08/11/23 | — | 94,200 | $15.13 | $972,487 | | Adina Eckstein | 02/07/23 | 75,000 | — | $18.17 | $1,362,750 | | | 08/11/23 | 23,500 | — | $15.13 | $355,555 | | | 08/11/23 | — | 47,100 | $15.13 | $486,244 | | John Peters | 02/07/23 | 30,000 | — | $18.17 | $545,100 | | | 08/11/23 | 15,700 | — | $15.13 | $237,541 | | Maya Prosor | 02/07/23 | — | 100,000 | $18.17 | $1,197,695 | | | 08/11/23 | — | 83,700 | $15.13 | $864,089 |
Grants of Plan-Based Awards in 2023
| (1) This amount reflects the number of time-vesting stock options granted, which vest in 16 equal quarterly installments over four years subject to continued service. | | (2) Amounts reflect the grant-date fair value in accordance with ASC Topic 718. We provide information regarding the assumptions used to calculate these values in Note 17 to the consolidated financial statements included in in our Annual Report on Form 10-K for the year ended December 31, 2023. |
Outstanding Equity Awards at Fiscal Year-End
Outstanding Equity Awards at Fiscal Year-End The following table summarizes the number of shares of common stock underlying outstanding equity incentive plan awards for each named executive officer as of December 31, 2023.
Outstanding Equity Awards at Fiscal Year-End
| | | | | Option Awards | | Stock Awards | | | Name | Grant Date | Number of Securities Underlying Unexercised Options (#)Exercisable | Number of Securities Underlying Unexercised Options (#)Unexercisable | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units That Have Not Vested ($)(1) | | Daniel Schreiber | 8/11/23 | 7,325 | 109,875 | $15.13 | 8/11/33 | — | — | | | 8/15/22(2) | 156,250 | 343,750 | $30.89 | 8/15/32 | — | — | | | 4/21/21(3) | — | — | $89.75 | 4/21/31 | — | — | | Shai Wininger | 8/11/23 | 7,325 | 109,875 | $15.13 | 8/11/33 | — | — | | | 8/15/22(2) | 156,250 | 343,750 | $30.89 | 8/15/32 | — | — | | | 4/21/21(3) | — | — | $89.75 | 4/21/31 | — | — | | Tim Bixby | 2/7/23 | — | — | $0.00 | | 50,248 | 810,500 | | | 2/7/23 | 16,500 | 49,500 | $18.17 | 2/7/33 | — | — | | | 8/11/23 | 5,888 | 88,312 | $15.13 | 8/11/33 | — | — | | | 4/5/22(2) | 79,690 | 132,810 | $27.35 | 4/5/32 | — | — | | | 12/1/19(4) | 354,300 | — | $23.69 | 9/25/29 | — | — | | Adina Eckstein | 2/7/23 | — | — | $0.00 | | 56,248 | 907,280 | | | 8/11/23 | — | — | $0.00 | | 22,031 | 355,360 | | | 8/11/23 | 2,944 | 44,156 | $15.13 | 8/11/33 | — | — | | | 4/5/22(2) | 21,228 | 35,372 | $27.35 | 4/5/32 | — | — | | | 2/16/21(5) | — | — | $0.00 | | 1,250 | 20,163 | | | 7/21/21(5) | — | — | $0.00 | | 8,750 | 141,138 | | | 12/24/19(4) | 20,000 | — | $23.69 | 9/25/29 | — | — | | | 6/7/20(4) | 52,500 | 7,500 | $24.47 | 6/6/30 | — | — | | | 7/21/21(4) | 5,625 | 4,375 | $92.20 | 7/21/31 | — | — | | | 12/6/21(2) | 15,000 | 15,000 | $44.57 | 12/6/31 | — | — | | | 12/6/21(2) | 2,652 | 2,648 | $44.57 | 12/6/31 | — | — | | John Peters | 2/7/23 | — | — | $0.00 | | 22,500 | 362,925 | | | 8/11/23 | — | — | $0.00 | | 14,718 | 237,401 | | | 4/5/22(2) | 9,378 | 15,622 | $27.35 | 4/5/32 | — | — | | | 3/8/17(6) | 50,000 | — | $2.65 | 3/7/27 | — | — | | | 3/28/18(4) | 45,000 | — | $5.26 | 3/27/28 | — | — | | | 2/6/19(4) | 50,000 | — | $11.61 | 2/5/29 | — | — | | | 3/19/20(7) | 46,875 | 3,125 | $24.36 | 3/18/30 | — | — | | | 3/10/21(6) | 6,875 | 3,125 | $94.07 | 3/10/31 | — | — | | | 12/6/21(6) | 12,504 | 12,496 | $44.57 | 12/6/31 | — | — | | Maya Prosor | 8/11/23 | 5,232 | 78,468 | $15.13 | 8/11/33 | — | — | | | 2/7/23 | 25,000 | 75,000 | $18.17 | 2/7/33 | — | — |
Outstanding Equity Awards at Fiscal Year-End
| (1) Represents the fair market value per share of our common stock of $16.13 on December 31, 2023, multiplied by the number of shares that had not vested as of that date. | | (2) The stock options vest in 16 equal quarterly installments over four years, subject to continued service. | | (3) The stock options vest in 16 equal quarterly installments over four years, subject to continued service. such that the stock options will be vested in full on April 21, 2025 (the “2025 Full Vest Date”) that the exercisability of the stock options will be subject to the following conditions: (i) 25% of each stock option grant, to the extent vested, will become exercisable if the average closing price during any 30 consecutive calendar day period occurring between the grant date and the 2025 Full Vest Date for the Company’s common stock equals or exceeds $126, (ii) 25% of each stock option grant, to the extent vested, will become exercisable if the average closing price during any 30 consecutive calendar day period occurring between the grant date and the 2025 Full Vest Date for the Company’s common stock equals or exceeds $162, (iii) 25% of each stock option grant, to the extent vested, will become exercisable if the average closing price during any 30 consecutive calendar day period occurring between the grant date and the 2025 Full Vest Date for the Company’s common stock equals or exceeds $198, and (iv) 25% of each stock option, to the extent vested, will become exercisable if the average closing price during any 30 consecutive calendar day period occurring between the grant date and the 2025 Full Vest Date for the Company’s common stock equals or exceeds $234; provided, further, that in the event any portion of the stock option grant has not become exercisable as of the 2025 Full Vest Date, such portion of such stock option grant shall be automatically forfeited. | | (4) 25% of the stock options vested upon the first anniversary of the grant date, and the remaining 75% vest in 12 equal quarterly installments thereafter, subject to continued service through each vesting date. | | (5) The restricted stock units vest in 16 equal quarterly installments over four years, subject to continued service. | | (6) 25% of the restricted shares vested upon the first anniversary of the grant date, and the remaining 75% of the restricted shares vest in 12 equal quarterly installments thereafter, subject to continued service through each vesting date. The vesting will accelerate upon the occurrence of a “Change of Control” (as defined in the applicable stock purchase agreement). This award included 100,000 restricted shares and Mr. Peters sold 31,463 of such vested restricted shares prior to December 31, 2020. | | (7) 25% of the stock options vest upon the first anniversary of the grant date, and the remaining 75% vest in 12 equal quarterly installments thereafter, subject to continued service through each vesting date. The vesting will accelerate upon the occurrence of a Transaction (as defined in the 2015 Plan) if Mr. Peters is not offered employment with the successor company on substantially similar terms to his employment with the Company or if he is terminated without Cause (as defined in Mr. Peters' employment agreement, described below) within 12 months following the Transaction. |
Option Exercises and Stock Vested in Fiscal 2023
Option Exercises and Stock Vested in Fiscal 2023
Option Exercises and Stock Vested in Fiscal 2023
| | Option Awards | | Stock Awards | | | | Number of Shares Acquired on Exercise | Value Realized on Exercise (1) | Number of Shares Acquired on Vesting | Value Realized on Vesting (2) | | Daniel Schreiber | — | $— | — | $— | | Shai Wininger | — | $— | — | $— | | Tim Bixby | — | $— | 16,752 | $273,770 | | Adina Eckstein | — | $— | 27,721 | $446,500 | | John Peters | 15,000 | $226,700 | 8,482 | $140,539 | | Maya Prosor | — | $— | — | $— | | Jorge Espinel | — | $— | — | $— |
Option Exercises and Stock Vested in Fiscal 2023
| (1) Amounts do not represent proceeds from any sale of any common stock acquired upon exercise, but is determined by multiplying the number of shares acquired upon exercise by the difference between the per share exercise price of the option and the closing price of a share of our common stock on NYSE at each time of exercise. | | (2) Amounts are calculated by multiplying the number of shares vested by our closing stock price on the vesting date. |
Potential Payments Upon Termination or Change in Control
Potential Payments Upon Termination or Change in Control
Estimated Potential Payments
Estimated Potential Payments The following table summarizes the payments that would be made to our NEOs upon the occurrence of certain qualifying terminations of employment or a change in control, in any case, occurring on December 31, 2023. Amounts shown do not include (i) accrued but unpaid base salary through the date of termination or (ii) other benefits earned or accrued by the NEO during his employment that are available to all salaried employees, such as accrued vacation.
Estimated Potential Payments
| Name | Benefit (3) | Termination Without Cause of For Good Reason / Cause (no Change in Control) | Change in Control (No Termination)(1) | Termination Without Cause or for Good Reason / Cause in connection with Change in Control | | Daniel Schreiber | Cash | $196,366(2) | $— | $392,732(7) | | | Equity Acceleration (3) | $14,650(4) | $— | $109,875(6) | | | Continued Healthcare and other Perquisites | $— | $— | $— | | | Total | $211,016 | $— | $502,607 | | Shai Wininger | Cash | $196,366(2) | $— | $392,732(7) | | | Equity Acceleration (3) | $14,650(4) | $— | $109,875(6) | | | Continued Healthcare and other Perquisites | $— | $— | $— | | | Total | $211,016 | $— | $502,607 | | Tim Bixby | Cash | $342,500(2) | $— | $685,000(7) | | | Equity Acceleration (3) | $146,881(4) | $— | $898,812(6) | | | Continued Healthcare and other Perquisites | $12,749(5) | $— | $25,497(8) | | | Total | $502,130 | $— | $1,609,309 | | Adina Eckstein | Cash | $180,093(2) | $— | $360,186(7) | | | Equity Acceleration (3) | $265,000(4) | $— | $1,478,178(6) | | | Continued Healthcare and other Perquisites | $— | $— | $— | | | Total | $445,093 | $— | $1,838,364 | | John Peters | Cash | $106,250(2) | $— | $212,500(7) | | | Equity Acceleration (3) | $92,167(4) | $— | $600,326(6) | | | Continued Healthcare and other Perquisites | $12,744(5) | $— | $25,489(8) | | | Total | $211,161 | $— | $838,315 | | Maya Prosor | Cash | $200,000(2) | $— | $400,000(7) | | | Equity Acceleration (3) | $16,497(4) | $— | $99,582(6) | | | Continued Healthcare and other Perquisites | $12,656(5) | $— | $25,311(8) | | | Total | $229,153 | $— | $524,893 |
Estimated Potential Payments
| (1) Assumes awards are not assumed or substituted in connection with the change in control. | | (2) Amount represents payment of (i) annual base salary for a period of 6 months and (ii) fifty percent of target annual bonus for the year in which termination occurs. | | (3) With respect to options, the value of equity acceleration was calculated by (i) multiplying the number of accelerated shares of common stock underlying the options by $16.13, the closing trading price of our common stock on December 31, 2023 and (ii) subtracting the exercise price for the options. | | (4) Amount represents the value of accelerating six months vesting of all outstanding equity awards held by the named executive officer as of December 31, 2023. For the named executive officers other than Mr. Peters, the exercise price of the outstanding stock options was greater than the fair market value as of December 31, 2023, and as a result, the value would be zero. | | (5) Amount represents payment of the Company's share of the premiums for participation in the Company's health plans pursuant to COBRA for the six-month period following termination. | | (6) Amount represents the value of accelerating outstanding equity awards held by the named executive officer as of December 31, 2023. For the named executive officers other than Mr. Peters, the exercise price of the outstanding stock options was greater than the fair market value as of December 31, 2023, and as a result, the value would be zero. | | (7) Amount represents payment of (i) annual base salary for the period of 12 months and (ii) one hundred percent of target annual bonus for the year in which termination occurs. | | (8) Amount represents payment of the Company's share of the premiums for participation in the Company's health plans pursuant to COBRA for the twelve-month period following termination. |
Director Compensation
Director Compensation
2023 Director Compensation
2023 Director Compensation
2023 Director Compensation
| Name | Fees Earned or Paid in Cash | Stock Awards (1) | All Other Compensation | Total | | Michael Eisenberg | $— | $— | $— | $— | | Dr. Samer Haj-Yehia | $6,128 | $175,002 | $— | $181,130 | | Silvija Martincevic | $39,986 | $149,994 | $— | $189,980 | | Irina Novoselsky | $48,872 | $149,994 | $— | $198,866 | | Mwashuma Nyatta | $42,500 | $149,994 | $— | $192,494 | | Debra Schwartz | $5,014 | $175,002 | $— | $180,016 |
2023 Director Compensation
| (1) Amounts reflect the full grant-date fair value of restricted stock units awards granted during 2023 computed in accordance with ASC Topic 718, rather than the amounts paid to or realized by the named individual. We provide information regarding the assumptions used to calculate the value of all stock options and awards made to our directors in Note 17 to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023. |
2023 Director Compensation
The table below shows the aggregate numbers of unvested stock awards held as of December 31, 2023 by each non-employee director.
2023 Director Compensation
| Name | Unvested Stock Awards Outstanding at 2023 Fiscal Year End | | Michael Eisenberg | — | | Dr. Samer Haj-Yehia | 10,924 | | Silvija Martincevic | — | | Irina Novoselsky | — | | Mwashuma Nyatta | 11,906 | | Debra Schwartz | 10,924 |
2023 Director Compensation
Pursuant to our Non-Employee Director Compensation Policy, each non-employee director who is initially elected or appointed following our IPO will receive an annual cash fee of $20,000, earned on a quarterly basis. Each audit committee member will receive either an additional annual cash fee of $20,000 for service as the chair of our audit committee or an additional annual cash fee of $7,500 for service on our audit committee, each earned on a quarterly basis. Each compensation committee member will receive either an additional annual cash fee of $10,000 for service as the chair of our compensation committee or an additional annual cash fee of $5,000 for service on our compensation committee, each earned on a quarterly basis. Each nominating and corporate governance committee member will receive either an additional annual cash fee of $7,500 for service as the chair of our nominating and corporate governance committee or an additional annual cash fee of $3,500 for service on our nominating and corporate governance committee, each earned on a quarterly basis. Each director will also receive an initial restricted stock unit award upon the commencement of such director’s service with a grant date value of $175,000, which will vest in three equal annual installments on the first three anniversaries of such director’s start date. Following each annual shareholders meeting, each director will receive an annual restricted stock unit award with a grant date value of $150,000 which will vest on the first anniversary of the date of grant. In each of these cases, awards are subject to the non-employee director continuing in service through each applicable vesting date, and subject to accelerated vesting upon a change in control (as defined in the 2020 Plan).
CEO Pay Ratio
CEO Pay Ratio As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(u) of Regulation S-K, we are required to disclose the total compensation paid to our median paid employee and ratio of our Chief Executive Officer’s annual total compensation to the annual total compensation of our other employees. The annual total compensation for 2023 for our Chief Executive Officer was $1,721,853, as reported in the Summary Compensation Table. The annual total compensation for 2023 for our median employee, identified as discussed below, was $95,483 calculated in accordance with the rules applicable to the Summary Compensation Table. Based on this information, for 2023, the ratio of the annual total compensation of our Chief Executive Officer to the median of the annual total compensation of our other employees was approximately 18 to 1.
Methodology, Assumptions and Estimates Used in Determining our Pay Ratio Disclosure
Methodology, Assumptions and Estimates Used in Determining our Pay Ratio Disclosure We selected December 31, 2023 as the date for establishing the employee population used in identifying the median employee and used calendar year 2023 as the measurement period. We identified the median employee using the consistently applied compensation measure that closely approximates the annual target total direct compensation of our employees. Specifically, we identified the median employee by aggregating, for each employee as of December 31, 2023: (1) annual base pay and (2) the grant date fair value for equity awards granted in 2023. In identifying the median employee, we converted compensation amounts paid in foreign currencies based on the applicable year-to-date average exchange rate as of December 29, 2023 and annualized the compensation values of individuals that joined our Company during 2023. We captured all full-time, part-time, seasonal and temporary employees, consisting of approximately 1,258 individuals. We did not exclude workers in non-U.S. countries and did not make any cost-of-living adjustments. The annual total compensation of the median employee and the annual total compensation of the CEO were calculated in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K. The pay ratio reported above is a reasonable estimate calculated in a manner consistent with SEC rules based on our internal records and the methodology described above. Because the SEC rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their employee populations and compensation practices, the pay ratio reported above should not be used as a basis for comparison between companies by other companies. In addition, we expect the Company’s annually reported pay ratio may vary significantly year over year, given the size of the Company and the potential variability in Company employee compensation.
Pay Versus Performance
Pay Versus Performance As required by Item 402(v) of Regulation S-K, we are providing the following information regarding the relationship between executive compensation and our financial performance for each of the last three completed calendar years. In determining the “Compensation Actually Paid” ("CAP") to our NEOs, we are required to make various adjustments to amounts that have been previously reported in the Summary Compensation Table in previous years, as the SEC’s valuation methods for this section differ from those required in the Summary Compensation Table. Due to the valuation component of CAP, the dollar amounts do not reflect the actual amounts of compensation earned or paid during the year. The Pay Versus Performance ("PVP) table below summarizes compensation values both previously reported in our Summary Compensation Table, as well as the adjusted values required in this section for the fiscal years ended December 31, 2020, 2021, 2022 and 2023. Note that for our NEOs other than Daniel Schreiber and Shai Wininger, compensation is reported as an average.
Pay Versus Performance
| Year | Summary Compensation Table Total for Mr. Schreiber ($) (1) | Summary Compensation Table Total for Mr. Wininger ($) (1) | Compensation Actually Paid to Mr. Schreiber ($) (1) (2) | Compensation Actually Paid to Mr. Wininger ($) (1) (3) | Average Summary Compensation Table Total for Non-PEO NEO's ($) (4) | Average Compensation Actually Paid to Non-PEO NEOs ($) (4) (5) | Value of Initial Fixed $100 Investment Based on: | | Net Income ($ in millions) (7) | In Force Premium (IFP) ($ in millions) (8) | Adjusted EBITDA ($ in millions) (9) | | | | | | | | | Total Shareholder Return ($) | Peer Group Total Shareholder Return ($) (6) | | | | | (a) | (b) | (b) | (c) | (c) | (d) | (d) | (f) | (g) | (h) | (i) | (l) | | 2023 | $1,721,853 | $1,751,549 | $2,061,930 | $2,091,626 | $2,445,351 | $2,218,409 | $20 | $153 | $(236.9) | $747 | $(173) | | 2022 | $8,035,801 | $8,075,513 | $795,789 | $835,501 | $1,589,734 | $(1,160,121) | $17 | $141 | $(297.8) | $625 | $(225) | | 2021 | $21,511,997 | $21,511,997 | $2,941,997 | $2,941,997 | $2,019,580 | $(8,638,137) | $52 | $139 | $(241.3) | $380 | $(184) | | 2020 | $373,744 | $— | $373,744 | $— | $763,716 | $15,919,657 | $151 | $123 | $(122.3) | $213 | $(98) |
Pay Versus Performance
(1) Daniel Schreiber and Shai Wininger served as Co-CEOs in 2021, 2022 and 2023. Daniel Schreiber served as the sole CEO in 2020.
Relationship of Compensation Actually Paid and Performance Measures
Relationship of Compensation Actually Paid and Performance Measures The following charts describe the relationship of CAP to the performance measures listed in the PvP Table above. Generally, CAP has low correlation with the financial measures for the years shown in the charts below. Lemonade places significant emphasis on equity compensation, which is sensitive to stock price changes. Due to the sensitivity of CAP to stock price changes, the timing of the grants and the changes in stock price thereafter significantly influence the Compensation Actually Paid each year, as determined under Item 402(v) of Regulation S-K.