DEF 14A of Cricut, Inc., Apr 3, 2024

DEF 14A of Cricut, Inc.

Filed Apr 3, 2024 · FY20230001828962-24-000037

Open on EDGAR

  1. Nominees for Director

    Nominees for Director Ashish Arora has served as our Chief Executive Officer and as the Chief Executive Officer of Cricut Holdings since February 2012. Mr. Arora has also served as a member of our board of directors since March 2021 and as a member of the board of managers of Cricut Holdings since February 2012. From July 2009 to February 2012, he served as the General Manager, Digital Home – Software Platforms and Products for Logitech International S.A., a global manufacturer of computer peripherals and other devices. Mr. Arora holds a B.S. in Electronics Engineering from Thapar Institute of Engineering and Technology and an M.B.A. from the University of Kansas Graduate School of Business. We believe Mr. Arora is qualified to serve as a member of our board of directors because of his perspective and experience as our Chief Executive Officer and his extensive experience in business development and project management. Jason Makler has served as our Chair since March 2021, as a member of the board of directors since March 2021 and as a member of the board of managers of Cricut Holdings since September 2011. Mr. Makler has served as a Corporate Analyst for Petrus Asset Management Company, a division of Petrus Trust Company, LTA, or its predecessors, since March 2002. Mr. Makler holds a B.B.A. in Accounting from the University of Texas at Austin and an M.B.A. from Yale University. We believe Mr. Makler is qualified to serve as a member of our board of directors because of his perspective as a representative of our largest beneficial owner and his extensive financial background and expertise. Len Blackwell has served as a member of the board of directors since March 2021 and as a member of the board of managers of Cricut Holdings since March 2013. Mr. Blackwell has served as Chairman of Paranet Solutions, a managed services and IT consulting firm, since February 2019, and as President of Continuous Asset Management, LLC, since January 2020. Mr. Blackwell has also served as Chairman of Heart + Paw, LLC, since November 2022. Mr. Blackwell previously served as Managing Director at Sorenson Capital, a private equity firm, from August 2006 to December 2019. Mr. Blackwell served as Chairman of RTC Aerospace, a manufacturer of precision flight-critical components, from August 2017 to January 2020, and served as a board member from October 2016 until February 2022. Mr. Blackwell served as a board member and subsequently as Chairman of International Development LLC, a lighting products company, from December 2011 until its sale in June 2017. Mr. Blackwell holds a B.A. in Economics from Duke University and is a Chartered Financial Analyst (CFA) charter holder. We believe Mr. Blackwell is qualified to serve as a member of our board of directors because of his extensive leadership experience in multiple industries and his experience in the private equity industry. Steven Blasnik has served as a member of the board of directors since March 2021 and as a member of the board of managers of Cricut Holdings since February 2018. Mr. Blasnik has served as a Director at the Petrus Trust Company, LTA since April 2008 and as Senior Advisor to Petrus Asset Management Company, the investment management division of Petrus Trust Company, LTA, since March 2019. Mr. Blasnik served as President of Petrus Asset Management Company from April 2008 to March 2019. Mr. Blasnik also served as a member of the board of directors of Perot Systems Corp. from September 1994 to November 2009. Mr. Blasnik holds a B.S.E. in Mechanical and Aerospace Engineering from Princeton University and a J.D. from Harvard Law School. We believe Mr. Blasnik is qualified to serve as a member of our board of directors because of his perspective as a representative of our largest beneficial owner and his extensive financial background and expertise. Russell Freeman has served as a member of the board of directors since March 2021 and as a member of the board of managers of Cricut Holdings since September 2015. Since January 2014, Mr. Freeman has served as the Chief Executive Officer of Hillwood Energy and its subsidiary, HKN Energy, for which he also serves as a board member. Mr. Freeman has served on the board of managers of GuideIT, LLC since February 2013. Mr. Freeman has also served as Vice Chairman for the Petrus Trust Company, LTA, since March 2010, and previously served as its Chief Financial Officer from April 2011 to April 2019. Mr. Freeman previously served as Chief Operating Officer of Perot Systems Corp. from August 2007 to November 2009, and Chief Financial Officer from August 2000 to August 2007. Mr. Freeman holds a B.B.A. in Accounting from Texas Tech University. We believe Mr. Freeman is qualified to serve as a member of our board of directors because of his perspective as a representative of our largest beneficial owner and his extensive financial background and expertise. Melissa Reiff has served as a member of the board of directors since March 2021 and as a member of the board of managers of Cricut Holdings since February 2021. Ms. Reiff served as Chairwoman of the board of directors of The Container Store Group, Inc., or TCS, the nation’s originator and leader of the storage and organization category of retail, from August 2019 until August 2021, as Chief Executive Officer from July 2016 until her retirement in February 2021, as President and Chief Operating Officer from March 2013 to June 2016 and as President from early 2006 to February 2013. Ms. Reiff joined TCS in 1995 as Vice President of Sales and Marketing, and assumed the role of Executive Vice President of Stores and Marketing in 2003. She has served on the boards of directors of TCS since August 2007 and Etsy, Inc. since April 2015, where she is also a member of the compensation committee. She is a member of the Dallas chapter of the American Marketing Association, International Women’s Foundation and C200. She also serves on the board of Southern Methodist University’s Cox School of Business Executive Board and is a sustaining member of the Junior League of Dallas. Ms. Reiff holds a B.S. in Political Science and Law from Southern Methodist University. We believe Ms. Reiff is qualified to serve as a member of our board of directors because of her particular knowledge and experience in retail, marketing, merchandising, operations, communication and leadership, as well as her experience as a CEO and director of public companies. Billie Williamson has served as a member of the board of directors since March 2021 and as a member of the board of managers of Cricut Holdings since August 2020. Ms. Williamson has over three decades of experience auditing public companies as an employee and partner of Ernst & Young LLP, a global accounting firm, where she served most recently as Senior Assurance Partner from March 1998 to December 2011. She also served as Ernst & Young’s Americas Inclusiveness Officer, a member of its Americas Executive Board, which functions as the Board of Directors for Ernst & Young dealing with strategic and operational matters, and a member of the Ernst & Young U.S. Executive Board responsible for partnership matters for the firm. Ms. Williamson currently serves as a member of the board of directors of Cushman & Wakefield plc since July 2018, and Pentair plc since May 2014. She previously served as a member of the board of directors of numerous public companies including Exelis, Inc., Annie’s Inc., Janus Capital Group Inc., from June 2015 to May 2017, CSRA, Inc. from November 2015 to May 2018, XL Group plc, Pharos Capital BDC, Inc. from January 2018 to March 2020, and Kraton Corporation from September 2018 to March 2022, as well as on the board of directors of a number of private company boards. She also serves on the board of Southern Methodist University’s Cox School of Business Executive Board. Ms. Williamson holds a B.B.A. in Accounting from the Southern Methodist University’s Cox School of Business.

  2. Nominees for Director

    We believe Ms. Williamson is qualified to serve as a member of our board of directors because of her extensive board service for both public and private companies and her financial knowledge and expertise.

  3. Considerations in Evaluating Director Nominees

    Considerations in Evaluating Director Nominees Our board of directors uses a variety of methods for identifying and evaluating potential director nominees. In its evaluation of director candidates, including the current directors eligible for re-election, our board of directors will consider the current size and composition of our board of directors and the needs of our board of directors and the respective committees of our board of directors and other director qualifications. While our board has not established minimum qualifications for board members, some of the factors that our board of directors considers in assessing director nominee qualifications include, without limitation, issues of character, integrity, judgment, corporate experience, diversity of experience, independence, area of expertise, length of service, potential conflicts of interest, and other commitments. If our board of directors determines that an additional or replacement director is required, then the board may take such measures as it considers appropriate in connection with its evaluation of a director candidate, including candidate interviews, inquiry of the person or persons making the recommendation or nomination, engagement of an outside search firm to gather additional information, or reliance on the knowledge of the members of the committee, board or management. After completing its review and evaluation of director candidates, our board of directors determines the selection of director candidates for nomination to our board.

  4. Director Compensation

    Director Compensation

  5. Outside Director Compensation Policy

    Outside Director Compensation Policy In March 2021, we adopted, and our stockholders approved, an Outside Director Compensation Policy. Under the Outside Director Compensation Policy, each non-employee director will receive the cash and equity compensation for board services described below. Each non-employee director that is employed by Petrus or any of its affiliates has agreed to waive his or her right to receive any cash or equity compensation for services as a non-employee director for our 2023 and 2024 fiscal years. Mr. Blackwell has also agreed to waive his right to receive any equity compensation for our 2023 and 2024 fiscal years, but will be paid cash compensation in accordance with our Outside Director Compensation Policy for his service as a non-employee director. Cash Compensation Our Outside Director Compensation Policy provides that all non-employee directors serving on the audit and compensation committees are entitled to receive the following cash compensation for their services on such committees: • $25,000 retainer per year for the chairman of the audit committee or $10,000 retainer per year for each other member of the audit committee; and • $20,000 retainer per year for the chairman of the compensation committee or $10,000 retainer per year for each other member of the compensation committee. Each non-employee director who serves as the chair of a committee will receive only the additional annual fee as the chair of the committee and will not receive the additional annual fee as a member of the committee. All cash payments to non-employee directors will be paid quarterly in arrears on a prorated basis. Equity Compensation Each person who first becomes a non-employee director will receive, on the first trading date on or after the date on which the person first becomes a non-employee director, an initial award of restricted stock units ("RSUs") covering a number of shares of our Class A common stock having a grant date fair value (determined in accordance with GAAP) equal to $450,000, rounded to the nearest whole share. Each initial award will vest as to 1/5th of the underlying shares on each of the first five anniversaries of the date the individual became a non-employee director, subject to continued service through each relevant vesting date. If the person was a member of our board of directors and also an employee, becoming a non-employee director due to termination of employment will not entitle the non-employee director to an initial award. On the date of each of our annual stockholder meetings, each non-employee director who is continuing as a director following our annual stockholder meeting automatically will be granted an annual award of RSUs having a grant date fair value (determined in accordance with GAAP) of $125,000, rounded to the nearest whole share. Each annual award will vest as to 1/4th of the underlying shares on each of the first four quarterly vesting dates after the award’s grant date (except that the fourth quarterly vesting date of each annual award will occur no later than the day before the date of the annual stockholder meeting following the date the annual award was granted), subject to continued service through each relevant vesting date. In the event of a change in control of our company, all equity awards granted to a non-employee director (including those granted pursuant to our Outside Director Compensation Policy) will fully vest and become immediately exercisable (if applicable) and, with respect to equity awards with performance-based vesting, all performance goals or other vesting criteria will be deemed achieved at 100% of target levels and all other terms and conditions met, unless specifically provided otherwise under the applicable award agreement or other written agreement between the non-employee director and us. Reimbursements Our Outside Director Compensation Policy also provides for the reimbursement of our non-employee directors for reasonable, customary and documented travel expenses to attend meetings of our board of directors and committees of our board of directors. Annual Director Compensation Limit In any fiscal year, no non-employee director may be paid, issued or granted cash compensation and equity awards with a total value greater than $850,000, with the value of an equity award based on its grant date fair value for purposes of this limit, which is the annual director limit. Any cash compensation paid or equity awards granted to a non-employee director while he or she was an employee or consultant (other than a non-employee director) will not count toward the annual director limit. Minimum Stock Ownership In addition, our Outside Director Compensation Policy includes minimum equity ownership guidelines that require each non-employee director to hold equity interests that cover at least 25,000 shares. Each non-employee director must satisfy this requirement by the second anniversary of the later of (i) the effective date of our initial public offering or (ii) the date such individual becomes a non-employee director, and subsequently must continue to meet the requirement at all times while the individual remains a non-employee director. For purposes of this requirement, a non-employee director’s equity interests means shares (including unvested shares and shares covered by any other equity awards (other than options), whether such equity awards are vested or unvested) that are (i) directly owned by the non-employee director or his or her immediate family members residing in the same household, (ii) beneficially owned by the non-employee director, but held in trust, limited partnerships, or similar entities for the sole benefit of the non-employee director or his or her immediate family members residing in the same household and (iii) held in retirement or deferred compensation accounts for the benefit of the non-employee director or his or her immediate family members residing in the same household. Compensation for our non-employee directors is not limited to the equity awards and cash payments set forth in our Outside Director Compensation Policy. Our non-employee directors will remain eligible to receive equity awards and cash or other compensation outside of the Outside Director Compensation Policy, as may be provided from time to time at the discretion of our board of directors.

  6. 2023 Director Compensation

    2023 Director Compensation The following table sets forth information regarding the total compensation awarded to, earned by or paid to our non-employee directors for their service on our board of directors, for the fiscal year ended December 31, 2023. Directors who are also our employees receive no additional compensation for their service as directors. During 2023, CEO, Ashish Arora was an employee and executive officer of the company and therefore, did not receive compensation as a director. See “Executive Compensation” for additional information regarding Mr. Arora’s compensation.

  7. 2023 Director Compensation

    | Name | Fees Paid or Earned in Cash ($) | Stock Awards ($)(1) | All Other Compensation ($)(2) | Total ($) | | Len Blackwell | 10,000 | — | | — | | Steven Blasnik | — | — | | — | | Russell Freeman | — | — | | — | | Jason Makler | — | — | | — | | Melissa Reiff | 10,000 | 124,997 | 45,144 | 180,141 | | Billie Williamson | 25,000 | 124,997 | 59,604 | 209,601 |

  8. 2023 Director Compensation

    (1) Represents the aggregate grant-date fair value of incentive units granted to our directors during 2023 computed in accordance with FASB ASC Topic 718, rather than the amounts paid or realized by the directors. We provide information regarding the assumptions used to calculate the value of incentive units granted in Note 11 to our consolidated financial statements included in our annual report on Form 10-K filed on March 5, 2024. (2) The amounts in the "All Other Compensation" column consist of the value of amounts paid and adjustments made as required by our 2021 Equity Incentive Plan and related agreements in connection with our special dividends paid in 2023. The following table lists all outstanding equity awards held by non-employee directors as of December 31, 2023:

  9. 2023 Director Compensation

    | Name | Number of Shares Underlying Outstanding Stock Awards | | Len Blackwell | — | | Steven Blasnik | — | | Russell Freeman | — | | Jason Makler | — | | Melissa Reiff | 27,409 | | Billie Williamson | 29,460 |

  10. ELECTION OF DIRECTORS

    ELECTION OF DIRECTORS Our board of directors currently consists of seven directors. At the annual meeting, seven directors will be elected for a one-year term and until their respective successors are duly elected and qualified or until their earlier death, resignation or removal.

  11. Our Compensation-Setting Process

    Our Compensation-Setting Process In 2023, our executive compensation program primarily was administered by our board of directors and compensation committee. Our Chief Executive Officer and other members of our management team have provided input at the direction of the board of directors or the compensation committee. In setting 2023 executive compensation, our board of directors and compensation committee exercised their judgment to set a total compensation package for these executive officers that was competitive based on the executive officer’s performance and position as measured against our board members’ experience with other public and private companies at similar stages. We did not engage a compensation consultant or benchmark our executive compensation to any specific percentile. Our board of directors and compensation committee approved 2023 compensation opportunities for our executive officers that would reward them for past and expected future contributions and provide incentives to remain with our company and drive growth in the value of our business. We continue to believe that it is important to grant employees equity awards in order to incentivize them to achieve our objectives. In our evolution as a public company, we are focused on tying compensation to our executives with value to our stockholders. We plan to balance these considerations by granting more performance-vesting awards like the 2022 LTIP awards (see the “2022 LTIP Awards” discussion below) and fewer time-vesting equity awards. Nevertheless, we continue to view time-based equity awards as critical to ensure market competitiveness and expect to continue their use as part of our overall compensation program.

  12. Bonus

    Bonus We provide cash bonus opportunities to our executive officers to motivate them to achieve our annual financial and operational objectives. Typically, near the beginning of each fiscal year, we adopt a cash bonus plan for that fiscal year, which identifies the participants in the plan and establishes the target bonus opportunity for each participant, the performance metrics to be used to determine the amount of any bonuses paid, and the associated target goals for each performance metric. In 2023, we adopted a bonus plan, or our 2023 bonus plan, for our named executive officers. Under our 2023 bonus plan, each named executive officer was able to earn a cash bonus based on our achievement of 2023 annual targets for the particular performance criteria selected for the named executive officer from the following: Q4 subscription gross profit, net revenue not from subscriptions, and operating income. The target goals for these performance criteria, as well as our actual achievement in 2023, were as follows:

  13. Bonus

    | Performance Criteria | Minimum Threshold | Target Goal | Actual Achievement | | Q4 Subscription Gross Profit(1) | $60 million | $64.86 million | $67.86 million | | Net revenue, Non-Subscriptions(2) | $610 million | $674.35 million | $461.20 million | | Operating Income(3) | $80 million | $107.38 million | $70.00 million |

  14. Bonus

    (1) “Q4 Subscription Gross Profit” means global subscription gross profit (net revenue minus COGS) in the fourth quarter of 2023 calculated using GAAP standards as reported in our financial statements. (2) “Net Revenue, Non-Subscription” means annual global revenue recognized from the sale of machines, accessories and materials net of discounts and customer rebates. (3) “Operating Income” means net revenue less cost of goods sold and operating expenses. Mr. Arora Mr. Arora’s bonus opportunity under our 2023 bonus plan was based on the following three components: Q4 subscription gross profit, net revenue not from subscriptions, and operating income. These components were structured similarly to the bonus opportunities for our other named executive officers (as described below) and would be equal to the percentage of the target goal that was actually achieved, with each of these three performance criteria weighted equally. Mr. Arora’s target bonus opportunity for this component was equal to 100% of his weighted average salary for the year, which was $490,272, and was subject to a maximum cap of 138% of payout. In addition, Mr. Arora had another bonus opportunity related to these three criteria, under which the three performance criteria were weighted equally, with the amount of the bonus for each performance criteria determined as follows (aggregating to an additional potential for $840,000):

  15. Bonus

    | Performance Criteria | Achievement (as Percentage of Target Goal) | Bonus | | Q4 Subscription Gross Profit | Less than 100% | None | | | Target of 100% | $186,666 | | | Maximum of 110% | $280,000 | | Net Revenue not from Subscriptions | Less than 100% | None | | | Target of 100% | $186,667 | | | Maximum of 110% | $280,000 | | Operating Income | Less than 100% | None | | | Target of 100% | $186,667 | | | Maximum of 110% | $280,000 |

  16. Bonus

    Messrs. Shill and Olsen The bonuses under our 2023 bonus plan for Messrs. Shill and Olsen were based on achievement of the following performance criteria, which were weighted as follows:

  17. Bonus

    | Named Executive Officer | Q4 Subscription Gross Profit | Net Revenue, Non-Subscriptions | Operating Income | | Kimball Shill | 33.33% | 33.33% | 33.33% | | Donald B. Olsen | 33.33% | 33.33% | 33.33% |

  18. Bonus

    The target bonus opportunities for these named executive officers were (i) $160,687 for Mr. Shill and (ii) $102,487 for Mr. Olsen. The amount of these named executive officers’ bonuses for each metric was independently calculated based on the percentage of the target goal that was actually achieved, as long as the actual achievement was over the threshold disclosed in the table above. In addition, the 2023 bonus plan included an accelerator that increased the amount of the bonus payout for a performance metric if we achieved 120% or more of the target goal for that performance metric, up to a maximum accelerator of 12%. For example, the amount of the bonus (calculated as described above) would be increased by (i) 5% if we achieved 120% of the target goal, up to (ii) 12% if we achieved 130% of the target goal. The result of the program design was a maximum payout of 138% if fully achieved. Actual Performance and Bonus Amounts Following the end of 2023, we determined that we achieved (i) approximately $67.86 million of Q4 subscription gross profit (approximately 105% of target), (ii) approximately $461.20 million of net revenue not from subscriptions (less than the threshold for such category), and (iii) approximately $70.00 million of operating income (less than the threshold for such category). Based on these results, our named executive officers received the following payouts for 2023. For Mr. Arora, this amount listed below includes payouts under both of his components under the 2023 bonus plan:

  19. Bonus

    | Named Executive Officer | Bonus | | Ashish Arora | $400,875 | | Kimball Shill | $56,041 | | Donald B. Olsen | $35,743 |

  20. Equity Compensation

    Equity Compensation We provide equity awards to our executive officers to incentivize and reward strong long-term corporate performance and to align their interests with those of our stockholders. As we discussed in last year’s CD&A, we expect to continuously review and assess our executive equity compensation program in order to incentivize and motivate our executives to achieve our business objectives and to provide compensation that strengthens the alignment between their interests and those of our stockholders. 2022 LTIP Awards As discussed in last year's CD&A, in addition to the annual equity awards, in January 2022, the compensation committee granted Messrs. Arora, Shill and Olsen and certain other of our key employees awards of performance-based RSUs because it believed that performance should be a significant factor in our overall equity compensation program, in order to (i) provide greater incentive for these key employees to drive our long-term growth and thereby create additional stockholder value and (ii) promote long-term retention of these key employees. Mr. Arora’s award covered 1,970,000 RSUs, Mr. Shill's award covered 275,000 RSUs, and Mr. Olsen’s award covered 190,000 RSUs. We had earmarked a total of 7 million shares to be awarded under the 2022 LTIP, approximately 95% of which were granted in January and April 2022. As disclosed in our annual report on Form 10-K for the year ended December 31, 2023, we determined it was not probable any LTIP performance conditions would be achieved, so no stock-based compensation was recorded for the LTIP during the year ended December 31, 2023. Despite that fact, our Compensation Committee has no plans to change the LTIP performance conditions or otherwise amend the LTIP awards. In the future, we may implement other performance-based, programs like the 2022 LTIP, as we feel it is appropriate for incentivizing our key employees toward achieving certain objectives. We do not expect to implement performance-based programs like this every year. 2023 Annual Equity Awards In March 2023, we granted our named executive officers awards of RSUs. The 2023 annual equity awards were provided in the form of RSUs because we believe that full value awards, such as RSUs, better align the interest of executives with stockholders. RSUs never become underwater regardless of any future fluctuation in the market price of our Class A common stock, which means that, in the event of a decline in the market price, our named executive officers would continue to be incentivized to create stockholder value and the awards would continue to promote retention (since our named executive officers would still receive value from these awards). The number of RSUs covered by these awards were: (i) 800,000 RSUs for Mr. Arora, (ii) 140,000 RSUs for Mr. Shill, and (iii) 70,000 RSUs for Mr. Olsen. The number of RSUs granted was determined by our compensation committee after taking into consideration the factors described in the section above titled “Our Compensation-Setting Process,” including the compensation committee’s assessment of the market for public and private companies and our named executive officers’ past and expected future contributions. Each RSU award vests in four equal annual installments beginning on February 15, 2024, subject to the applicable named executive officer’s continued service with us. In connection with the special cash dividends we paid in 2023, pursuant to the underlying award agreements, our named executive officers received dividend equivalents in the form of additional RSUs. For more information, see the section titled "Related Person Transactions."

  21. Employment Arrangements; Post-Employment Compensation

    Employment Arrangements; Post-Employment Compensation In March 2021, we entered into an amended employment agreement with Mr. Arora that does not have a specific term and provides for Mr. Arora’s at-will employment, and written, at-will employment letters with each of our other executive officers. The amended employment agreement provides for accelerated vesting of Mr. Arora’s equity awards upon a change in control, as described below in the section titled “Potential Payments Upon Termination or Change in Control.” We provided this vesting acceleration provision to Mr. Arora in order to maintain the benefit that he historically received for his equity awards and to align his equity interests with those of our investors. In March 2021, we adopted an Executive Change in Control and Severance Plan, or our Executive Severance Plan, pursuant to which our executive officers and certain other key employees are eligible to receive severance benefits in the event of a qualifying termination in connection with a change in control, as specified in and subject to the employee signing a participation agreement under our Executive Severance Plan. This Executive Severance Plan was designed to attract, retain, and reward senior level employees. The Executive Severance Plan generally will be in lieu of any other severance payments and benefits to which such participant was entitled prior to signing the participation agreement, except as specifically provided under that employee’s participation agreement under the Executive Severance Plan. We believe that these protections serve our retention objectives by helping our named executive officers and other key employees maintain continued focus and dedication to their responsibilities to maximize stockholder value, including in the event of a transaction that could result in a change in control of our company. For more information, see the section titled “Potential Payments Upon Termination or Change in Control” beginning on page 31 of this proxy statement. In addition, shares of restricted Class B common stock that our named executive officers received in conversion of their incentive unit awards in connection with the corporate reorganization that occurred at the time of our IPO will fully vest if the executive officer’s employment is terminated due to his death or by us due to his disability.

  22. Tax Considerations

    Tax Considerations We have not provided any of our named executive officers with a gross-up or other reimbursement for tax amounts the individual might pay pursuant to Code Sections 280G, 4999 or 409A. Code Sections 280G and 4999 provide that named executive officers, directors who hold significant stockholder interests and certain other service providers could be subject to significant additional taxes if they receive payments or benefits in connection with a change in control of our company that exceeds certain limits, and that we or our successor could lose a deduction on the amounts subject to the additional tax. Code Section 409A also imposes significant taxes on the individual in the event that an executive officer, director or other service provider receives “deferred compensation” that does not meet the requirements of Code Section 409A. Under Code Section 162(m), we are subject to limits on the deductibility of executive compensation. Deductible compensation is limited to $1 million per year for the chief executive officer and certain of our current and former highly compensated executive officers (collectively “covered employees”). While we cannot predict how the deductibility limit may impact our compensation program in future years, we intend to maintain an approach to executive compensation that strongly links pay to performance. In addition, although we have not adopted a formal policy regarding tax deductibility of compensation paid to our named executive officers, we may consider tax deductibility under Code Section 162(m) as a factor in its compensation decisions.

  23. Summary Compensation Table for Fiscal 2023

    Summary Compensation Table for Fiscal 2023 The following table sets forth information regarding the compensation reportable for our named executive officers for fiscal 2023 and prior years where applicable, as determined under SEC rules.

  24. Summary Compensation Table for Fiscal 2023

    | Name and Principal Position | Year | Salary ($) | Stock Awards (1) ($) | Option Awards(1) ($) | Non-Equity Incentive Plan Compensation (2) ($) | All Other Compensation (3) ($) | Total ($) | | Ashish Arora | 2023 | 490,272 | 8,192,000 | — | 400,875 | 9,142,333 | 18,225,481 | | Chief Executive Officer | 2022 | 473,753 | 48,814,900 | — | 329,449 | 7,606 | 49,625,708 | | | 2021 | 463,760 | 34,307,314 | 3,388,796 | 876,836 | 14,561 | 39,051,268 | | Kimball Shill | 2023 | 321,375 | 1,433,600 | — | 56,041 | 970,692 | 2,781,707 | | Chief Financial Officer | 2022 | 288,000 | 9,145,750 | — | 36,346 | 933 | 9,471,029 | | Donald B. Olsen | 2023 | 256,217 | 716,800 | — | 35,743 | 478,817 | 1,487,577 | | Executive VP, General | 2022 | 246,376 | 5,273,100 | — | 24,839 | 798 | 5,545,113 | | Counsel, Secretary | 2021 | 237,667 | 688,800 | 125,314 | 103,595 | 800 | 1,156,176 |

  25. Summary Compensation Table for Fiscal 2023

    (1) The amounts in the “Stock Awards” column and “Option Awards” column reflect the aggregate grant-date fair value of RSUs and stock options granted to our named executive officers during 2022 and incentive units in Cricut Holdings granted to our named executive officers during each of 2021 and 2020 computed in accordance with FASB ASC Topic 718, rather than the amounts paid or realized by the named executive officer. We provide information regarding the assumptions used to calculate the value of all stock options and RSUs and incentive unit awards made to our named executive officers in Note 12 to our consolidated financial statements included in our annual report on Form 10-K filed on March 5, 2024. As disclosed in Note 12, as of December 31, 2023, we determined it was not probable any LTIP performance conditions would be achieved, so no stock-based compensation was actually recorded for the LTIP during the year ended December 31, 2023 (2) The amounts in the “Non-Equity Incentive Plan Compensation” column reflect the annual cash bonuses earned by our named executive officers in each of 2023, 2022 and 2021 under our 2023 bonus plan, 2022 bonus plan and 2021 bonus plan, respectively. For additional information on our bonus incentive compensation program, see the sections titled “Elements of Executive Pay and 2023 Compensation—Bonus.” (3) The amounts in the “All Other Compensation” column for 2023 include (i) matching contributions made to the respective named executive officers’ accounts under our 401(k) plan ($11,646 for Mr. Arora), (ii) life insurance premiums paid by us in the respective year for the benefit of the named executive officer; and (iii) the value of amounts paid and adjustments made as required by our 2021 Equity Incentive Plan and related agreements in connection with our special dividends paid in 2023 ($9,129,100 for Mr. Arora, $969,650 for Mr. Shill and $477,987 for Mr. Olsen).

  26. Grants of Plan-Based Awards for Fiscal 2023

    Grants of Plan-Based Awards for Fiscal 2023 The following table sets forth information, for each of our named executive officers, concerning grants of plan-based awards made during fiscal 2023.

  27. Grants of Plan-Based Awards for Fiscal 2023

    | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | | | All Other Stock Awards: Number of Shares of Stock or Units(2) (#) | Grant Date Fair Value of Stock and Option Awards(3) ($) | | Name | Grant Date | Threshold ($) | Target ($) | Maximum ($) | | | | Ashish Arora | — | 186,666 | 560,000 | 840,000 | — | — | | | — | 129,432 | 490,272 | — | — | — | | | 3/21/2023 | — | — | — | 800,000 | 8,192,000 | | Kimball Shill | — | 42,421 | 160,687 | — | — | — | | | 3/21/2023 | — | — | — | 140,000 | 1,433,600 | | Donald B. Olsen | — | 27,057 | 102,487 | — | — | — | | | 3/21/2023 | — | — | — | 70,000 | 716,800 |

  28. Grants of Plan-Based Awards for Fiscal 2023

    (1) Reflects target and maximum dollar amounts payable under the 2023 bonus plan and other bonus opportunities for performance during 2023, as described above in “Compensation Discussion and Analysis—Executive Pay and 2023 Compensation.” “Threshold” refers to the minimum amount payable for a certain level of performance; “Target” refers to the amount payable if specified performance targets are reached; and “Maximum” refers to the maximum payout possible. For Mr. Arora, two entries are included for the two components of his bonuses. The 2023 bonus plan did not include a maximum cap on the payout. The actual amounts paid under the 2023 bonus plan are shown in the Summary Compensation Table above. (2) RSUs granted on March 21, 2023 vest in four equal annual installments beginning on February 15, 2024. (4) Reflects the aggregate grant-date fair value of RSUs and stock options granted to our named executive officers during 2023 computed in accordance with FASB ASC Topic 718, rather than the amounts paid or realized by the named executive officer. We provide information regarding the assumptions used to calculate the value of all stock options and RSUs and incentive unit awards made to our named executive officers in Note 12 to our consolidated financial statements included in our annual report on Form 10-K filed on March 5, 2024. As disclosed in Note 12, as of December 31, 2023, we determined it was not probable any LTIP performance conditions would be achieved, so no stock-based compensation was actually recorded for the LTIP during the year ended December 31, 2023.

  29. Outstanding Equity Awards at Fiscal 2023 Year-End

    Outstanding Equity Awards at Fiscal 2023 Year-End The following table sets forth information regarding outstanding equity awards held by our named executive officers as of December 31, 2023.

  30. Outstanding Equity Awards at Fiscal 2023 Year-End

    | | | Option Awards | | | | | Stock Awards | | | | | Name | Grant Date(1) | 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 ($)(2) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#)(3) | Market Value of Shares of Units of Stock That Have Not Vested ($)(4) | 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($) | | Ashish Arora | 3/24/2021 | 227,729 | | | $18.65 | 3/24/2026 | | | | | | | 3/24/2021 | 372,721 | | | $18.65 | 3/24/2026 | | | | | | | 3/24/2021 | 510,097 | | | $18.65 | 3/24/2026 | | | | | | | 3/24/2021 | 196,253 | 65,418 | | $18.65 | 3/24/2026 | | | | | | | 3/24/2021 | 175,116 | 58,372 | | $18.65 | 3/24/2026 | | | | | | | 3/24/2021 | 211,697 | 70,566 | | $18.65 | 3/24/2026 | | | | | | | 3/24/2021 | 248,190 | 82,730 | | $18.65 | 3/24/2026 | | | | | | | 8/17/2020 | | | | | | 66,641 | 439,164 | | | | | 8/17/2020 | | | | | | 54,447 | 358,806 | | | | | 8/17/2020 | | | | | | 42,283 | 278,645 | | | | | 3/1/2020 | | | | | | 365,516 | 2,408,750 | | | | | 5/1/2021 | | | | | | 833,463 | 5,492,521 | | | | | 4/22/2022 | | | | | | 167,337 | 1,102,751 | | | | | 1/8/2022 | | | | | | | | 1,970,000 | | | | 3/21/2023 | | | | | | 861,538 | 5,677,535 | | | | Kimball Shill | 3/24/2021 | 2,278 | 760 | | $18.65 | 3/24/2031 | | | | | | | 3/24/2021 | 18,636 | 6,212 | | $18.65 | 3/24/2031 | | | | | | | 8/17/2020 | | | | | | 18,791 | 123,833 | | | | | 3/1/2020 | | | | | | 4,241 | 27,948 | | | | | 5/1/2021 | | | | | | 55,779 | 367,584 | | | | | 4/1/2022 | | | | | | 83,668 | 551,372 | | | | | 4/22/2022 | | | | | | 83,668 | 551,372 | | | | | 1/8/2022 | | | | | | | | 275,000 | | | | 3/21/2023 | | | | | | 150,769 | 993,568 | | | | Donald B. Olsen | 3/24/2021 | 5,694 | 1,898 | | $18.65 | 3/24/2031 | | | | | | | 3/24/2021 | 4,659 | 1,553 | | $18.65 | 3/24/2031 | | | | | | | 3/1/2020 | | | | | | 10,604 | 69,880 | | | | | 8/17/2020 | | | | | | 4,698 | 30,960 | | | | | 5/1/2021 | | | | | | 16,734 | 110,277 | | | | | 4/22/2022 | | | | | | 50,201 | 330,825 | | | | | 1/8/2022 | | | | | | | | 190,000 | | | | 3/21/2023 | | | | | | 75,385 | 496,787 | | |

  31. Outstanding Equity Awards at Fiscal 2023 Year-End

    (1) Except as shown below, awards vest 25% annually over four years commencing on the grant date, in each case subject to continued employment through each vesting date and potentially subject to accelerated vesting as described below in the section entitled “Potential Payments upon Termination or Change in Control.” IPO option grants dated March 24, 2021 have the same vesting terms as the corresponding incentive unit award (i.e., 25% annually over four years commencing on July 1, 2019, March 1, 2021 and August 17, 2021, respectively), in each case subject to continued employment through the vesting date and potentially subject to accelerated vesting as described below in the section entitled “Potential Payments upon Termination or Change in Control.” Awards granted on May 1, 2021 vest 25% annually over four years commencing on May 15, 2021, in each case subject to continued employment through each vesting date and potentially subject to accelerated vesting as described below in the section entitled “Potential Payments upon Termination or Change in Control.” (2) Option exercise price was reduced by $1.35 per share as required by our 2021 Equity Incentive Plan and related agreements in connection with our special dividends paid in 2023. (3) The total number of shares or units of stock in this column includes dividend equivalents as required by our 2021 Equity Incentive Plan and related agreements in connection with our special dividends paid in 2023. (4) Market value of restricted stock and RSUs that have not vested is computed by multiplying (i) 6.59, the closing price on the Nasdaq of our Class A common stock on December 29, 2023, the last trading day of our fiscal year, by (ii) the number of shares of stock underlying the applicable award.

  32. Option Exercises and Stock Vested for Fiscal 2023

    Option Exercises and Stock Vested for Fiscal 2023 The following table sets forth the number of shares of restricted stock that vested, and the associated value realized, upon the vesting during fiscal 2023 by each of our named executive officers. None of our named executive officers exercised stock options during fiscal 2023.

  33. Option Exercises and Stock Vested for Fiscal 2023

    | | Stock Awards | | | Name | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(1) | | Ashish Arora | 1,394,383 | 13,576,255 | | Kimball Shill | 173,573 | 1,555,284 | | Donald B. Olsen | 50,871 | 478,098 |

  34. Option Exercises and Stock Vested for Fiscal 2023

    (1) Reflects the number of shares that vested, multiplied by the closing market price of our Class A common stock as reported on the Nasdaq on the vesting date.

  35. Pension Benefits and Nonqualified Deferred Compensation

    Pension Benefits and Nonqualified Deferred Compensation We do not provide a pension plan for our employees, and none of our named executive officers participated in a nonqualified deferred compensation plan during fiscal 2023.

  36. Potential Payments upon Termination or Change in Control

    Potential Payments upon Termination or Change in Control Equity Awards The time-based incentive unit awards held by our named executive officers, which converted into restricted stock in connection with the corporate reorganization occurring in connection with our IPO, will fully vest if the named executive officer’s employment is terminated due to his death or by us due to his disability. In addition, the Post-Corporate Reorganization Unvested Shares that Mr. Arora received with respect to his performance incentive unit awards granted in August 2020 are subject to certain treatment upon a change in control as set forth in the section titled “—CEO’s Cricut Holdings Performance Equity Awards.” Employment Agreement with Ashish Arora We entered into an amended employment agreement with Mr. Arora in 2021. The amended employment agreement provides that if a “change in control” (as defined in our 2021 Equity Incentive Plan) occurs before the termination of Mr. Arora’s employment with us, then immediately prior to such change in control, his equity awards that are subject only to time-based vesting conditions will become fully vested and exercisable (if applicable) and with respect to his equity awards that are subject to performance-based vesting, all performance goals or other vesting criteria will be deemed achieved at 100% of target levels and all other terms and conditions met, in each case unless specifically provided otherwise under the applicable equity award agreement or other written agreement between Mr. Arora and us or any of our subsidiaries or parents, as applicable. Executive Change in Control and Severance Plan We have adopted an Executive Change in Control and Severance Plan (the “Executive Severance Plan”) under which our executive officers and certain other key employees will be eligible to receive severance benefits, as specified in and subject to the employee signing a participation agreement under our Executive Severance Plan. The severance payments and benefits under the Executive Severance Plan generally are in lieu of any other severance payments and benefits to which a participant was entitled before signing his or her participation agreement, except as specifically provided under the participation agreement. Messrs. Arora, Shill, and Olsen are participants under our Executive Severance Plan eligible for the rights to the applicable payments and benefits described below. In the event of a “termination” of the participant's employment by us for a reason other than “cause” or the participant’s death or “disability” or by the participant for “good reason” (as such terms are defined in our Executive Severance Plan), in either case, occurring within a period beginning three months prior to and ending 18 months following a “change in control” (as defined in our Executive Severance Plan), the participant will be entitled to the following payments and benefits: • a lump sum payment equal to 12 months of the participant’s annual base salary plus 100% of the participant’s target annual bonus as in effect for the fiscal year in which the termination of employment occurs; and • 100% accelerated vesting of all outstanding equity awards, and, with respect to equity awards with performance-based vesting, all performance goals or other vesting criteria will be deemed achieved at 100% of target levels for the relevant performance period(s), unless otherwise determined by the applicable agreement governing the equity award with performance-based vesting. The receipt of the payments and benefits provided for under the Executive Severance Plan described above is conditioned on the participant signing and not revoking a separation and release of claims agreement and such release becoming effective and irrevocable no later than the 60th day following the participant’s involuntary termination of employment. In addition, if a participant fails to comply with certain non-disparagement provisions in the Executive Severance Plan or any confidentiality, proprietary information, and inventions agreement applicable to the participant, the participant will not be entitled to receive any further payments and benefits under the Executive Severance Plan and will be required to return to us any payments and benefits under the Executive Severance Plan that he or she already received. If any of the payments or benefits provided for under our Executive Severance Plan or otherwise payable to a participant would constitute “parachute payments” within the meaning of Section 280G of the Code and could be subject to the related excise tax, a participant will receive either full payment of such payments and benefits or such lesser amount that would result in no portion of the payments and benefits being subject to the excise tax, whichever results in the greater amount of after-tax benefits to them. No participant is entitled to any tax gross-up payments with respect to “parachute payments.” Potential Payments The tables below list the estimated amount of compensation payable to each of the named executive officers for the events listed. The amounts shown assume that such termination was effective as of December 31, 2023, and include all components of compensation, benefits and perquisites payable under the arrangements discussed above. Estimated amounts for equity awards are based on the closing price of our Class A common stock on the Nasdaq on December 29, 2023, which was $6.59 per share, after the payment of any applicable exercise price. The actual amounts for all named executive officers to be paid out can only be determined at the time of such executive’s separation.

  37. Potential Payments upon Termination or Change in Control

    | Ashish Arora | Change in Control on 12/31/2023 ($) | Involuntary Not for Cause or Voluntary for Good Reason (Change in Control) Termination 12/31/2023 ($) | Disability or Death on 12/31/2023 ($) | | Executive Benefits and Payments | — | — | — | | Compensation: | — | — | — | | Base Salary | — | 495,000 | — | | Short-Term Cash Incentive Plan | — | — | — | | Equity Awards | 17,131,054 | 17,131,054 | 17,131,054 | | Total Executive Benefits and Payments | 17,131,054 | 17,626,054 | 17,131,054 |

  38. Potential Payments upon Termination or Change in Control

    | Kimball Shill | Involuntary Not for Cause or Voluntary for Good Reason (Change in Control) Termination 12/31/2023 ($) | Disability or Death on 12/31/2023 ($) | | Executive Benefits and Payments | | | | Compensation: | | | | Base Salary | 324,500 | | | Short-Term Cash Incentive Plan | | | | Equity Awards | 2,392,380 | 2,392,380 | | Total Executive Benefits and Payments | 2,716,880 | 2,392,380 |

  39. Potential Payments upon Termination or Change in Control

    | Donald B. Olsen | Involuntary Not for Cause or Voluntary for Good Reason (Change in Control) Termination 12/31/2023 ($) | Disability or Death on 12/31/2023 ($) | | Executive Benefits and Payments | | | | Compensation: | | | | Base Salary | 258,700 | | | Short-Term Cash Incentive Plan | | | | Equity Awards | 957,540 | 957,540 | | Total Executive Benefits and Payments | 1,216,240 | 957,540 |

  40. CEO Pay Ratio

    CEO Pay Ratio In accordance with SEC rules, we are providing the ratio of the annual total compensation of our CEO to the annual total compensation of our median employee (excluding our CEO). The fiscal year 2023 annual total compensation of our CEO was $18,225,481. The fiscal year 2023 annual total compensation of our median compensated employee was $103,108, and the ratio of these amounts was 177 to 1. Under SEC rules, we are required to identify our median employee only once every three years and calculate annual total compensation for that employee each year. This year, we are using the same median employee in our pay ratio calculation who we disclosed in our 2023 Proxy Statement. Based on our review of our current employee population and employee compensation arrangements as compared to the previous year, including a general review of current median compensation of our worldwide workforce as compared to our median employee, we believe there have been no changes that would significantly impact the pay ratio disclosure. To identify the median employee, we examined the compensation of our full- and part-time employees (other than our CEO) as of the last day of our fiscal year. The consistently applied compensation measure used for this purpose was total taxable wages (as shown in Form W-2, box 1 for our US employees and the equivalent compensation for our non-US employees). We converted all employee compensation, on a country-by-country basis, to U.S. dollars based on the applicable year-end exchange rate. We did not annualize salaries or make any cost-of-living adjustments in identifying the median employee nor did we use the de minimis exemption allowed by SEC rules to exclude any of our employee population. Using this median employee, we calculated the annual total compensation for such employee for 2023 using the same methodology that we used for our NEOs as set forth in the Summary Compensation Table. 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. 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. Accordingly, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies have different employee populations and compensation practices and may use different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.

  41. Pay versus Performance Table

    Pay versus Performance Table The following table sets forth additional compensation information of our Principal Executive Officer (PEO) and our non-PEO NEOs along with total shareholder return, net income, and total revenue performance results for our fiscal years ending in 2023, 2022, and 2021:

  42. Pay versus Performance Table

    | | | | | | Value of Initial Fixed $100 Investment Based on: | | | | | Year(1) | Summary Compensation Table Total for PEO(1) | Compensation Actually Paid to PEO(1)(2) | Average Summary Compensation Table Total for non-PEO NEOs(1) | Average Compensation Actually Paid to non-PEO NEOs(1)(2) | Total Shareholder Return(3) | Peer Group Total Shareholder Return(3) | Net Income(4) | Revenue(4) | | 2023 | $18,225,481 | $17,520,173 | $2,134,642 | $2,659,834 | $41.30 | $112.69 | $53,636,000 | $765,147,000 | | 2022 | $49,625,708 | $(63,878,402) | $5,091,958 | $(1,716,524) | $52.08 | $94.68 | $60,666,000 | $886,296,000 | | 2021 | $39,051,268 | $106,457,022 | $2,010,146 | $3,844,882 | $124.10 | $110.71 | $140,473,000 | $1,306,227,000 |

  43. Pay versus Performance Table

    (1) NEOs included in the above compensation columns reflect the following:

  44. Pay versus Performance Table

    | Year | PEO | Non-PEO NEOs | | 2023 | Ashish Arora | Kimball Shill, Don Olsen | | 2022 | Ashish Arora | Kimball Shill, Martin F. Petersen, Donald B. Olsen | | 2021 | Ashish Arora | Martin F. Petersen, Gregory Rowberry, Donald B. Olsen |

  45. Pay versus Performance Table

    (2) We have made adjustments to the Summary Compensation Table totals - as prescribed by the relevant SEC rules to calculate the amounts disclosed above as "compensation actually paid." These adjustments are disclosed in the table below: 2023 "Compensation Actually Paid" to PEO and the Average Compensation Actually Paid to non-PEOs reflects the following adjustments from Total compensation reported in the Summary Compensation Table:

  46. Pay versus Performance Table

    | | PEO | Average non-PEO | | Total Reported in 2023 Summary Compensation Table (SCT) | $18,225,481 | $2,134,642 | | Less, value of Stock Awards reported in SCT | $(8,192,000) | $(1,075,200) | | Plus, Year-End value of Awards Granted in Fiscal Year that are Unvested and Outstanding* | $5,272,000 | $691,950 | | Plus, Change in Fair Value of Prior Year awards that are Outstanding and Unvested | $1,637,880 | $896,255 | | Plus, FMV of Awards Granted this Year and that Vested this Year | $— | $— | | Plus, Change in Fair Value (from prior year-end) of Prior Year awards that Vested this year | $540,812 | $12,187 | | Less Prior Year Fair Value of Prior Year awards that Failed to vest this year | $— | $— | | Total Adjustments | $(705,308) | $525,192 | | Compensation Actually Paid for Fiscal Year 2023 | $17,520,173 | $2,659,834 |

  47. Pay versus Performance Table

    * In accordance with the SEC rules, the fair values of unvested and outstanding equity awards to our NEOs were remeasured as of the end of each fiscal year, and as of each vesting date, during the years displayed in the table above. We approached the determination of fair value in the same way as we historically have determined fair value and fair values as of each measurement date were determined using valuation assumptions and methodologies (including expected term, volatility, dividend yield, and risk-free interest rates) that are generally consistent with those used to estimate fair value at grant under US GAAP. Other than as disclosed below, all other valuation assumptions are materially consistent with the grant date assumptions. See Note 12 to the Consolidated Financial Statements of the Form 10-K filed on March 5, 2024 for additional details on the valuation assumptions used at grant for the most-recently disclosed fiscal year. The valuation assumptions used to calculate option fair values differed from those disclosed at the time of grant primarily due to difference in the expected life of the awards, which necessarily leads to updated assumptions with respect to volatility and the risk free rate. For the service based restricted stock and RSUs, the fair value is based on our stock price as of the measurement date. For PSUs with performance conditions other than stock price, the fair value is based on our stock price as of the measurement date and our estimate as of the measurement date of the probability and timing of the achievement of the set performance condition. (3) Our peer group is the S&P Mid Cap 400 Index as reflected in our 2023 Annual Report on Form 10-K pursuant to Item 201(e) of Regulation S-K. Each year reflects what the cumulative value of $100 would be if it was invested based on the closing price on the date of our IPO, March 25, 2021 and all dividends were reinvested. (4) Net Income and Total Revenue, which is our company-selected measure, reflect the numbers reported in our financial statements. Tabular List of Performance Measures The following performance measures reflect the Company’s most important performance measures in effect for 2023, as further described and defined in the Compensation Discussion and Analysis under 2023 Financial Achievements.

  48. Pay versus Performance Table

    | Most Important Performance Measures for 2023 | | Total Revenue | | Q4 Subscription Gross Profit | | Net Revenue Minus Subscriptions | | Operating Income |

  49. Pay versus Performance Descriptive Disclosure

    Pay versus Performance Descriptive Disclosure The following graphs illustrate the relationship between the compensation actually paid to our PEO and the average of the compensation actually paid to our other NEOs, and our cumulative TSR, net income and total revenue for the last three completed fiscal years. Total shareholder return in the above chart, in the case of both the Company and our Peer Companies as noted in footnote 3 of the above Pay versus Performance Table, reflects the cumulative return of $100 as if invested on March 25, 2021, including reinvestment of any dividends.