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PROXY STATEMENT TABLE OF CONTENTS
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. 1)
Filed by the Registrantý | ||
Filed by a Party other than the Registranto | ||
Check the appropriate box: | ||
o | Preliminary Proxy Statement | |
o | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | |
ý | Definitive Proxy Statement | |
o | Definitive Additional Materials | |
o | Soliciting Material under §240.14a-12 |
IAC/InterActiveCorp | ||||
(Name of Registrant as Specified In Its Charter) | ||||
(Name of Person(s) Filing Proxy Statement, if other than the Registrant) | ||||
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o | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. | |||
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(4) | Date Filed: |
May 10, 20173, 2019
Dear Stockholder:
You are invited to attend the Annual Meeting of Stockholders of IAC/InterActiveCorp, which will be held on Wednesday, June 21, 2017,12, 2019, at 9:00 a.m., local time.Eastern Time. This year's Annual Meeting will be a completely virtual meeting, conducted solely online. Stockholders will be able to attend the Annual Meeting by visitingwww.virtualshareholdermeeting.com/IACI2017IACI2019.. We believe hosting a virtual meeting will allow for greater stockholder attendance at the Annual Meeting by enabling stockholders thatwho might not otherwise be able to travel to a physical meeting to attend online and participate from any location around the world.
At the Annual Meeting, stockholders will be asked to: (1)to elect twelve directors (2) vote on two advisory proposals regarding executive compensation and (3) ratify the appointment of Ernst & Young LLP as IAC's independent registered public accounting firm for the 20172019 fiscal year. IAC's Board of Directors believes that the proposals being submitted for stockholder approval are in the best interests of IAC and its stockholders and recommends a vote consistent with the Board's recommendation for each proposal.
It is important that your shares be represented and voted at the Annual Meeting regardless of the size of your holdings. Whether or not you plan to participate in the Annual Meeting online, please take the time to vote online, by telephone or, if you receive a printed proxy card, by returning a marked, signed and dated proxy card. If you participate in the Annual Meeting online, you may also vote your shares online at that time if you wish, even if you have previously submitted your vote.
Sincerely, | ||
Barry Diller Chairman and Senior Executive |
555 WEST 18TH STREET NEW YORK, NEW YORK 10011 212.314.7300www.iac.com
IAC/INTERACTIVECORP
555 West 18th Street
New York, New York 10011
NOTICE OF 20172019 ANNUAL MEETING OF STOCKHOLDERS
To the Stockholders:
IAC/InterActiveCorp ("IAC") is making this proxy statement available to holders of our common stock and Class B common stock in connection with the solicitation of proxies by IAC's Board of Directors for use at the Annual Meeting of Stockholders to be held on Wednesday, June 21, 2017,12, 2019, at 9:00 a.m., local time.Eastern Time. This year's Annual Meeting will be a completely virtual meeting, conducted solely online. Stockholders will be able to attend the Annual Meeting by visitingwww.virtualshareholdermeeting.com/IACI2017IACI2019. At the Annual Meeting, stockholders will be asked to:
1. elect twelve members of IAC's Board of Directors, each to hold office for a one-year term ending on the date ofuntil the next succeeding annual meeting of stockholders or until such director's successor shall have been duly elected and qualified (or, if earlier, such director's removal or resignation from IAC's Board of Directors);
2. hold an advisory vote on executive compensation (the "say on pay vote");
3. hold an advisory vote on the frequency of holding the say on pay vote in the future;
4. ratify the appointment of Ernst & Young LLP as IAC's independent registered public accounting firm for the 20172019 fiscal year; and
5.3. transact such other business as may properly come before the meeting and any related adjournments or postponements.
IAC's Board of Directors has set April 27, 201726, 2019 as the record date for the Annual Meeting. This means that holders of record of our common stock and Class B common stock at the close of business on that date are entitled to receive notice of the Annual Meeting and to vote their shares at the Annual Meeting and any related adjournments or postponements.
Only stockholders and persons holding proxies from stockholders may attend the Annual Meeting. To participate in the Annual Meeting online atwww.virtualshareholdermeeting.com/IACI2017IACI2019, you will need the 16-digitsixteen-digit control number included on your Notice of Internet Availability of Proxy Materials, your proxy card or the instructions that accompanied your proxy materials.
By order of the Board of Directors, | ||
Gregg Winiarski Executive Vice President, General Counsel and Secretary |
May 10, 20173, 2019
PROXY STATEMENT
TABLE OF CONTENTS
Section | Page Number | |||
---|---|---|---|---|
Questions and Answers About the Annual Meeting and Voting | 1 | |||
Proposal 1—Election of Directors | ||||
Proposal and Required Vote | ||||
Information Concerning Director Nominees | ||||
Corporate Governance | ||||
The Board and Board Committees | 14 | |||
Proposal 2— | ||||
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| ||||
Audit Committee Matters | ||||
Audit Committee Report | ||||
Fees Paid to Our Independent Registered Public Accounting Firm | ||||
Audit and Non-Audit Services Pre-Approval Policy | ||||
Information Concerning IAC Executive Officers Who Are Not Directors | ||||
Compensation Discussion and Analysis | ||||
Compensation and Human Resources Committee Report | ||||
Compensation Committee Interlocks and Insider Participation | ||||
Executive Compensation | ||||
Overview | ||||
Summary Compensation Table | ||||
Grants of Plan-Based Awards in | ||||
Outstanding Equity Awards at | ||||
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Estimated Potential Payments Upon Termination or Change in Control of IAC | ||||
Pay Ratio Disclosure | 36 | |||
Director Compensation | 37 | |||
Equity Compensation Plan Information | ||||
| 39 | |||
Security Ownership of Certain Beneficial Owners and Management | ||||
Section 16(a) Beneficial Ownership Reporting Compliance | ||||
Certain Relationships and Related Person Transactions | ||||
Review of Related Person Transactions | ||||
Relationships Involving Significant Stockholders, Named Executives and Directors | 44 | |||
Relationships Involving | ||||
Annual Reports | ||||
Stockholder Proposals and Director Nominees for Presentation at the | ||||
Householding | ||||
Notice of Internet Availability of Proxy Materials | ||||
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i
PROXY STATEMENT
QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING AND VOTING
The Notice, our proxy materials and our 20162018 Annual Report on Form 10-K are being mailed on or about May 10, 20173, 2019 to stockholders of record at the close of business on April 27, 201726, 2019 and this proxy statement and our 20162018 Annual Report on Form 10-K will be available atwww.proxyvote.com beginning on May 10, 2017.3, 2019. If you received a Notice by mail but would rather receive printed copies of our proxy materials, please follow the instructions included in the Notice. You will not receive a Notice if you have previously elected to receive printed copies of our proxy materials.
At the close of business on April 27, 2017,26, 2019, there were 72,963,88478,373,755 shares of IAC common stock and 5,789,499 shares of Class B common stock outstanding and entitled to vote.outstanding. Holders of IAC common stock are entitled to one vote per share and holders of Class B common stock are entitled to ten votes per share.
You may examine a list of the stockholders of record at the close of business on April 27, 201726, 2019 for any purpose germane to the Annual Meeting during normal business hours during the 10-day period preceding the date of the meeting at IAC's corporate headquarters, located at 555 West 18th Street, New York, New York 10011.
The election of each of Edgar Bronfman, Jr., Chelsea Clinton, Barry Diller, Michael D. Eisner, Bonnie S. Hammer, Victor A. Kaufman, Joseph Levin, David Rosenblatt and Alexander von
Furstenberg as directors requires the affirmative vote of a plurality of the total number of votes cast by the holders of shares of IAC common stock and Class B common stock voting together as a single class (hereinafter collectively referred to as IAC"IAC capital stock)stock"), with each share of
common stock and Class B common stock representing the right to one and ten vote(s), respectively.
The election of each of Bryan Lourd, Alan G. Spoon and Richard F. Zannino as directors requires the affirmative vote of a plurality of the total number of votes cast by the holders of shares of IAC common stock voting as a separate class.
The Board recommends that our stockholders voteFOR the election of each of the director nominees.
The approval, on an advisory basis, of the say on pay proposal requires the affirmative vote of the holders of a majority of the voting power of shares of IAC capital stock present at the Annual Meeting in person or represented by proxy and voting together. As an advisory vote, the outcome is not binding upon the Company.
The Board recommends a voteFOR the advisory vote on executive compensation.
The approval, on an advisory basis, of the frequency of holding the say on pay vote in the future requires the affirmative vote of the holders of a majority of the voting power of shares of IAC capital stock present at the Annual Meeting in person or represented by proxy and voting together. However, if no choice receives a majority of votes, then the option that receives the highest number of votes cast by stockholders will be considered by the Board as the stockholders' recommendation as to the frequency of holding future say on pay votes.
As an advisory vote, the votes cast in connection with this proposal are not binding upon the Company. While the Board is making a recommendation with respect to this proposal, IAC stockholders are being asked to vote for one of the choices specified above, and not whether they agree or disagree with the Board's recommendation.
The Board recommends a vote for holding the say on pay vote onceEVERY THREE YEARS at IAC's Annual Meeting of Stockholders.
The ratification of the appointment of Ernst & Young LLP as IAC's independent registered public accounting firm for the 20172019 fiscal year requires the affirmative vote of the holders of a majority of
the voting power of shares of IAC capital stock present at the Annual Meeting in person or represented by proxy and voting together.
The Board recommends that our stockholders voteFOR the ratification of the appointment of Ernst & Young LLP as IAC's independent registered public accounting firm for the 20172019 fiscal year.
If any other matters are properly presented at the Annual Meeting for consideration, the three IAC officers who have been designated as proxies for the Annual Meeting (Joanne Hawkins, Glenn H. Schiffman and Gregg Winiarski) will have the discretion to vote on those matters for stockholders who have submitted their proxy.
You may also participate in the Annual Meeting online atwww.virtualshareholdermeeting.com/IACI2017IACI2019 and vote your shares online at that time, even if you have previously submitted your vote. To do so, you will need the 16-digitsixteen-digit control number included on your Notice, your proxy card or the instructions that accompanied your proxy materials.
For IAC shares held in street name, holders may submit a proxy online or by telephone before the date of the Annual Meeting if their broker, bank and/or other holder of record makes these methods available. If you submit a proxy online or by telephone,DO NOTrequest and return a printed proxy card from IAC or from your broker, bank and/or other holder of record. If you hold your shares through a broker, bank and/or other holder of record, follow the voting instructions you receive from your broker, bank and/or other holder of record.
Non-Discretionary Items. The election of directors and the two advisory proposals related to executive compensation areis a non-discretionary itemsitem and mayNOT be voted on by your broker, bank and/or other holder of record absent specific voting instructions from you. If you do not provide your bank, broker and/or other holder of record does not receive specificwith voting instructions, from you, a "broker non-vote" will occur in the case of your shares of IAC common stock will be represented by "broker non-votes" for this proposal.
Discretionary Items. The ratification of Ernst & Young LLP as IAC's independent registered public accounting firm for the 20172019 fiscal year is a discretionary item. Generally, brokers, banks and other holders of record that do not receive voting instructions from you may vote on this proposal in their discretion.
To change your vote or revoke your proxy before the date of the Annual Meeting, follow the instructions provided on your Notice, proxy card or proxy materials to do so online or by telephone, or send a written notice or a new proxy card to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, New York 11717.
If you hold your IAC shares through a broker, bank and/or other holder of record, follow the instructions that you receive from your broker, bank and/or other holder of record if you wish to change your vote or revoke your proxy.
Following the initial mailing of the Notice and proxy materials, IAC will request brokers, banks and other holders of record to forward copies of these materials to persons for whom they hold shares of IAC common stock and to request authority for the exercise of proxies. In such cases, IAC, upon the request of these holders, will reimburse these parties for their reasonable expenses.
PROPOSAL 1—ELECTION OF DIRECTORS
At the upcoming Annual Meeting, a board of twelve directors will be elected, each to hold office until the next succeeding annual meeting of stockholders or until such director's successor shall have been duly elected and qualified (or, if earlier, such director's removal or resignation from IAC's Board of Directors). Information concerning director nominees, all of whom are incumbent directors of IAC and have been recommended by the Nominating Committee for re-election, appears below. Although management does not anticipate that any of the persons named below will be unable or unwilling to stand for election, in the event of such an occurrence, proxies may be voted for a substitute designated by the Board.
The election of each of Edgar Bronfman, Jr., Chelsea Clinton, Barry Diller, Michael D. Eisner, Bonnie S. Hammer, Victor A. Kaufman, Joseph Levin, David Rosenblatt and Alexander von Furstenberg as directors requires the affirmative vote of a plurality of the total number of votes cast by the holders of shares of IAC capital stock voting together as a single class.
The Board has designated Bryan Lourd, Alan G. Spoon and Richard F. Zannino as nominees for those positions on the Board to be elected by the holders of IAC common stock voting as a separate class. The election of each of them as directors requires the affirmative vote of a plurality of the total number of votes cast by the holders of shares of IAC common stock voting as a separate class.
Both the Nominating Committee and the full Board recommend that our stockholders voteFOR the election of all director nominees.
Information Concerning Director Nominees
Background information about each director nominee is set forth below, including information regarding the specific experiences, characteristics, attributes and skills considered in connection with the nomination of each director nominee, all of which the Nominating Committee and the Board believe provide the Company with the perspective and judgment needed to guide, monitor and execute its strategies.
Edgar Bronfman, Jr., age 61,63, has been a director of IAC (and its predecessors) since February 1998. Mr. Bronfman has served as a Managing Partner of Accretive, LLC, a private equity firm, since 2014. Since late 2017, Mr. Bronfman has also served as Chairman of Waverley Capital LLC, a media-focused venture capital firm, of which he is also a Co-Founder and General Partner. Mr. Bronfman previously served as Chairman of Warner Music Group from August 2011 to January 2012. Prior to this time, Mr. Bronfman served as Chief Executive Officer and President of Warner Music Group from July 2011 to August 2011 and as Chairman and Chief Executive Officer of Warner Music Group from March 2004 to July 2011. Mr. Bronfman also served as a member of the board of directors of Warner Music Group from March 2004 to May 2013. Prior to joining Warner Music Group, Mr. Bronfman served as Chairman and Chief Executive Officer of Lexa Partners LLC, which he founded, from April 2002. Mr. Bronfman was appointed Executive Vice Chairman of Vivendi Universal, S.A. in December 2000. Mr. Bronfman resigned from his position as an executive officer and Vice Chairman of the board of directors of Vivendi Universal, S.A. in March 2002 and December 2003, respectively. Prior to December 2000, Mr. Bronfman served as President and Chief Executive Officer of The Seagram Company Ltd., a post he had held since June 1994, and from 1989 to June 1994 he served as the President and Chief Operating Officer of Seagram. Mr. Bronfman served as a member of the board of Accretive Health, Inc., a provider of revenue cycle and physician advisory services to healthcare providers, from its initial public offering in 2010 through February 2016. In addition to his not-for-profitfor-profit affiliations, Mr. Bronfman serves as Chairman of the Board of Endeavor Global, Inc. and is currently a member of the Board of NYU Elaine A. and Kenneth G. Langone Medical Center and The Council
on Foreign Relations. In nominating Mr. Bronfman, the Board considered his experience as a member of senior management of various public and global companies, which the Board believes gives him particular insight into business strategy and leadership, marketing, consumer branding and
international operations, as well as a high level of financial literacy and insight into the media and entertainment industries. The Board also considered Mr. Bronfman's private equity experience, which the Board believes gives him particular insight into investments in, and the development of, early stage companies.companies, and mergers and acquisitions.
Chelsea Clinton, age 36,39, has been a director of IAC since September 2011. Since March 2013, Ms. Clinton has served as Vice Chair of the Clinton Foundation, where her work emphasizes improving global and domestic health, creating service opportunities and empowering the next generation of leaders. Prior to assuming this role, Ms. Clinton served as a memberalso currently teaches at Columbia University's Mailman School of the board of directors of the Clinton Foundation from September 2011.Public Health. Ms. Clinton has also served as a member of the board of directors of the Clinton Health Access Initiative since September 2011.2011 and previously served as a member of the board of directors of the Clinton Foundation from September 2011 to February 2013. From March 2010 through May 2013, Ms. Clinton served as an Assistant Vice Provost at New York University, where she focused on interfaith initiatives and the university's global expansion program. From November 2011 to August 2014, Ms. Clinton also worked as a special correspondent for NBC News. Prior to these efforts, Ms. Clinton worked as an associate at McKinsey & Company, a consulting firm, from August 2003 to October 2006, and as an associate at Avenue Capital Group, an investment firm, from October 2006 to November 2009. Ms. Clinton has served as a member of the boardboards of directors of Expedia Group, Inc. (formerly Expedia, Inc.) since March 2017.2017 and Nurx, a telemedicine start-up company, since June 2018. In addition to her for-profit affiliations, Ms. Clinton also currently serves on the boards of directors of The School of American Ballet, the Africa Center, the Weill Cornell Medical College, Clover Health and CloverColumbia University's Mailman School of Public Health, and as Co-Chair of the Advisory Board of the Of Many Institute at New York University. In nominating Ms. Clinton, the Board considered her broad public policy experience and keen intellectual acumen, which together the Board believes continue to bring a fresh and youthful perspective to IAC's businesses and initiatives.
Barry Diller, age 75,77, has been a director and Chairman and Senior Executive of IAC since December 2010. Mr. Diller previously served as a director and Chairman and Chief Executive Officer of IAC (and its predecessors) from August 1995 to November 2010. Mr. Diller also serves as Chairman and Senior Executive of Expedia Group, Inc., which position he has held since August 2005. Prior to joining the Company, Mr. Diller was Chairman of the Board and Chief Executive Officer of QVC, Inc. from December 1992 through December 1994. From 1984 to 1992, Mr. Diller served as Chairman of the Board and Chief Executive Officer of Fox, Inc. Prior to joining Fox, Inc., Mr. Diller served for ten years as Chairman of the Board and Chief Executive Officer of Paramount Pictures Corporation. Mr. Diller served as Chairman (in a non-executive capacity) of the board of directors of Live Nation Entertainment, Inc. (and its predecessor companies, Ticketmaster Entertainment and Ticketmaster) ("Live Nation")) from August 2008 to October 2010, and continued to serve as a member of the board of directors of Live Nation through January 2011. Mr. Diller also served as Chairman and Senior Executive of TripAdvisor, Inc., an online travel company ("TripAdvisor"), from December 2011 to December 2012, served as a member of the board of directors of TripAdvisor from December 2011 through April 2013 and has served as a special advisor to the Chief Executive Officer of TripAdvisor sincefrom April 2013.2013 to March 2017. Mr. Diller is also currently a member of the board of directors of The Coca-Cola Company and served as a member of the board of directors of Graham Holdings Company (formerly The Washington Post Company) from November 2013 to January 2017.during the past five years. In addition to his for-profit affiliations, Mr. Diller is a member of The Business Council and serves on the Dean's Council of The New York University Tisch School of the Arts, the Board of Councilors for the School of Cinema-Television at the University of Southern California's School of Cinematic ArtsCalifornia and the ExecutiveAdvisory Board forof the Medical Sciences of University of California, Los Angeles,Peter G. Peterson Foundation, among other not-for-profit affiliations. The Board nominated Mr. Diller because he has been Chairman and Senior Executive since 2010 and prior to that time, served as Chairman and Chief
Executive Officer of the Company since 1995, and as a result, possesses a great depth of knowledge and experience regarding the Company and its businesses. In addition, the Board noted Mr. Diller's ability to exercise influence (subject to the Company's organizational documents and Delaware law) over the outcome of matters involving the Company that require stockholder approval given the fact that he and certain members of his family collectively have sole voting and/or investment power over all of shares of IAC Class B common stock outstanding, which shares represent a significant percentage of the voting power of IAC capital stock.
Michael D. Eisner, age 75,77, has been a director of IAC since March 2011. Mr. Eisner has served as Chairman of The Tornante Company, LLC, a privately held company that invests in, acquires, incubates and operates media and entertainment companies ("Tornante"), since 2005. Mr. Eisner currently serves as Chairman of the board of directors of the Portsmouth Community Football Club Limited, a League One English football club, which Tornante acquired in August 2017. Mr. Eisner also previously served as Chairman of two Tornante portfolio companies, The Topps Company, a leading creator and marketer of sports cards, distinctive confectionery and other entertainment products (from October 2007 to April 2013), and Vuguru, a studio focusing on the production of groundbreaking programming for the internet and other digital platforms (from October 2009 to December 2014, when Tornante acquired that portion of Vuguru that it did not already own). Prior to founding Tornante, Mr. Eisner served as Chairman and Chief Executive Officer of The Walt Disney Company from 1984. In addition to his for-profit affiliations, Mr. Eisner serves on the boards of directors of Denison University, The Aspen Institute, the Yale School of Architecture Dean's Council and The Eisner Foundation. In nominating Mr. Eisner, the Board considered his experience with Tornante, which the Board believes gives him particular insight into investments in, and the development and operation of, media and entertainment companies that focus on programming and content for emerging platforms. The Board also considered Mr. Eisner's experience as the Chairman and Chief Executive Officer of The Walt Disney Company, which the Board believes gives him particular insight into business strategy and leadership, marketing and consumer branding, as well as a high level of financial literacy and insight into the media and entertainment industries.
Bonnie S. Hammer, age 66,68, has been a director of IAC since September 2014. Since January 2019, Ms. Hammer has served as Chairman of NBCUniversal Direct-to-Consumer and Digital Enterprises, in which capacity she is leading the development and execution of NBCUniversal's new OTT service. Prior to this role, Ms. Hammer served as Chairman of NBCUniversal Cable Entertainment sincefrom February 2013.2013 to January 2019. In this capacity, Ms. Hammer hashad executive oversight over a number of leading cable brands (USA Network,(the USA, Syfy, E! Entertainment, Bravo, Oxygen Sprout and Chiller)Universal Kids networks), as well as Universal Cable Productions, which generatescreates original scripted content for cable, broadcast and broadcast networks,streaming platforms, and Wilshire Studios, which generatesproduces original reality programming. Prior to her tenure as Chairman of NBCUniversal Cable Entertainment, Ms. Hammer served as Chairman of NBCUniversal Cable Entertainment and Cable Studios from November 2010. In this capacity, Ms. Hammer had executive oversight over certain leading cable brands (USA,(the USA, Syfy, E! Entertainment, Chiller, Cloo and Universal HD)HD networks), as well as Universal Cable Productions and Wilshire Studios. The networks led by Ms. Hammer are industry frontrunners, consistently generating innovative consumer social and digital experiences reflective of their brands. Prior to joining NBCUniversal in May 2004, Ms. Hammer served as President of Syfy from 2001 to 2004 and held other senior executive positions at Syfy and USA Network from 1989 to 2000. Before that time, she was an original programming executive at Lifetime Television Network from 1987 to 1989. Ms. Hammer has served as a member of the board of directors of eBay, Inc. since January 20152015. In addition to her for-profit affiliations, Ms. Hammer currently sits on the Board of Governors for the Motion Picture & Television Fund (MPTF) Foundation and also currently serves on the strategic planning committee for Boston University's College of Communication, her alma mater, and as a member of The Board of Governors for the Motion Picture & Television Fund (MPTF) Foundation.from which Ms. Hammer received an honorary doctorate degree in 2017. In nominating Ms. Hammer, the Board considered her experience as the Chairman of both NBCUniversal Direct-to-Consumer and Digital Enterprises and NBCUniversal
Cable Entertainment, as well as her prior roles with NBCUniversal Media, LLC, USA Network and Lifetime Television Network, which the Board believes give her particular insight into business strategy and leadership, as well as a high level of financial literacy and a seasoned insight into the media and entertainment industries, particularly pay television network programming and production and multiplatform branding.
Victor A. Kaufman, age 73,75, has been a director of IAC (and its predecessors) since December 1996 and has been Vice Chairman of IAC (and its predecessors) since October 1999. Mr. Kaufman also servesserved as Vice Chairman of Expedia Group, Inc., which position he has held since from August 2005.2005 to June 2018 and continues to serves as a member of its board of directors. Previously, Mr. Kaufman served in the Company's Office of the Chairman from January 1997 to November 1997 and as the Company's Chief Financial Officer from November 1997 to October 1999. Prior to joining the Company, Mr. Kaufman served as Chairman and Chief Executive Officer of Savoy Pictures Entertainment, Inc. from March 1992 and as a director of Savoy from February 1992. Mr. Kaufman was the founding Chairman and Chief Executive Officer of Tri-Star Pictures, Inc. and served in such capacities from 1983 until December 1987, at which time he became President and Chief Executive
Officer of Tri-Star's successor company, Columbia Pictures Entertainment, Inc. He resigned from these positions at the end of 1989 following the acquisition of Columbia by Sony USA, Inc. Mr. Kaufman joined Columbia in 1974 and served in a variety of senior positions at Columbia and its affiliates prior to the founding of Tri-Star. Mr. Kaufman also served as Vice Chairman of the board of directors of Live Nation from August 2008 through January 2010, and continued to serve as a member of the board of directors of Live Nation from January 2010 through December 2010. In addition, Mr. Kaufman served as a member of the board of directors of TripAdvisor from December 2011 to February 2013. In nominating Mr. Kaufman, the Board considered the unique knowledge and experience regarding the Company and its businesses that he has gained through his involvement with the Company in various roles since 1996, as well as his high level of financial literacy and expertise regarding mergers, acquisitions, investments and other strategic transactions.
Joseph Levin, age 37,39, has been a director and Chief Executive Officer of IAC since June 2015. Prior to his appointment as Chief Executive Officer of IAC, Mr. Levin served as Chief Executive Officer of IAC Search & Applications, overseeing the desktop software, mobile applications and media properties that comprised IAC's former Search & Applications segment, from January 2012. From November 2009 to January 2012, Mr. Levin served as Chief Executive Officer of Mindspark Interactive Network, an IAC subsidiary, that builds, markets and delivers a wide range of consumer software products, and previously served in various capacities at IAC in strategic planning, mergers and acquisitions and finance since joining IAC in 2003. Prior to joining IAC, Mr. Levin worked in the Technology Mergers & Acquisitions group for Credit Suisse First Boston (now Credit Suisse) advising public and private technology and e-commerce companies on a variety of transactions. Mr. Levin has served on the boardboards of directors of Match Group, Inc., Groupon, Inc. and ANGI Homeservices Inc. since October 2015, and Groupon, Inc. since March 2017 and September 2017, respectively, and currently serves as Chairman of the boards of Match Group, Inc. and ANGI Homeservices Inc. Mr. Levin previously served on the boards of directors of LendingTree, Inc. from August 2008 through November 2014 and The Active Network, beginning prior2014. In addition to its 2011 initial public offering through its sale in December 2013.his for-profit affiliations, Mr. Levin serves on the Undergraduate Executive Board of Wharton School. In nominating Mr. Levin, the Board considered the unique knowledge and experience regarding the Company and its businesses that he has gained through his various roles with the Company since 2003, most recently his role as Chief Executive Officer of IAC, as well as his high level of financial literacy and expertise regarding mergers, acquisitions, investments and other strategic transactions.
Bryan Lourd, age 56,58, has been a director of IAC since April 2005. Mr. Lourd has served as a partner and Managing Director of Creative Artists Agency ("CAA") since October 1995. CAA is among the world's leading entertainment agencies and is based in Los Angeles, California, with offices in Nashville, New York, London and Beijing.Beijing, among other locations. He is a graduate of the University of Southern California. In connection with the nomination of Mr. Lourd, the Board considered his extensive experience as a principal of CAA, which the Board believes gives him particular insight into
business strategy and leadership, as well as unique and specialized experience regarding the entertainment industry and marketing.
David Rosenblatt, age 49,51, has been a director of IAC since December 2008. Mr. Rosenblatt currently serves as the Chief Executive Officer of 1stdibs.com, Inc., an online marketplace for design, including furniture, art, jewelry and fashion. Mr. Rosenblatt previously served as President, Global Display Advertising, of Google, Inc. from October 2008 through May 2009. Mr. Rosenblatt joined Google in March 2008 in connection with Google's acquisition of DoubleClick, Inc., a provider of digital marketing technology and services. Mr. Rosenblatt joined DoubleClick in 1997 as part of its initial management team and held several executive positions during his tenure, including Chief Executive Officer of DoubleClick from July 2005 through March 2008 and President of DoubleClick from 2000 through July 2005. Mr. Rosenblatt has also served as a member of the boards of directors of Twitter (sincesince January 2011)2011 and Narrative Science, Inc., a leading provider of natural language communications technology that helps organizations analyze and transform data into narrative reports (since April 2010).Farfetch UK Limited, the world's largest digital marketplace for luxury fashion, since July 2017. In connection with the nomination of Mr. Rosenblatt, the Board considered his
extensive and unique experience in the online advertising and digital marketing technology and services industries, as well as his management experience with DoubleClick, Google and 1stdibs.com, Inc., which the Board believes give him particular insight into business strategy and leadership, as well as a deep understanding of the internet sector.industry.
Alan G. Spoon, age 65,67, has been a director of IAC (and its predecessors) since February 2003. Mr. Spoon has served as General Partner and Partner Emeritus of Polaris Partners since January 2015 andfrom 2011 to 2018. He previously served as Managing General Partner of Polaris Partners from 2000 to 2010. Polaris Partners is a private investment firm that provides venture capital and management assistance to development stage information technology and life sciences companies. Mr. Spoon was Chief Operating Officer and a director of The Washington Post Company (now known as Graham Holdings Company) from March 1991 through May 2000 and served as President from September 1993 through May 2000. Prior to his service in these roles, he held a wide variety of positions at The Washington Post Company, including President of Newsweek from September 1989 to May 1991. Mr. Spoon has served as a member of the board of directors of Danaher Corporation since July 1999, CableOne since July 2015 and Match Group, Inc. since November 2015 and as Chairman of the board of directors of Fortive Corporation since July 2016. In his not-for-profit affiliations, Mr. Spoon was a member of the Board of Regents at the Smithsonian Institution (formerly Vice Chairman) and is now a member of the MIT Corporation (and its Executive Committee), where he. He also serves as a member of the board of directors of edX, (ana not-for-profit online education platform).platform sponsored by Harvard and the MIT Corporation. In nominating Mr. Spoon, the Board considered his extensive private and public company board experience and public company management experience, all of which the Board believes give him particular insight into business strategy, leadership and marketing in the media industry. The Board also considered Mr. Spoon's private equity experience and engagement with the MIT Corporation, which the Board believes gives him particular insight into trends in the internet and technology industries, as well as into acquisition strategy and financing.
Alexander von Furstenberg, age 47,49, has been a director of IAC since December 2008. Mr. von Furstenberg currently serves as Chief Investment Officer of Ranger Global Advisors, LLC, a family office focused on value-based investing ("Ranger"), which he founded in June 2011. Prior to founding Ranger, Mr. von Furstenberg founded Arrow Capital Management, LLC, a private investment firm focused on global public equities, where he served as Co-Managing Member and Chief Investment Officer since 2003.from 2003 to 2011. Mr. von Furstenberg has served as member of the board of directors of Expedia Group, Inc. since December 2015, Liberty Expedia Holdings, Inc. since November 2016 and La Scogliera, an Italian financial holding company and bank, since December 2016, and served as a member of the board of directors of W.P. Stewart & Co. Ltd., a Bermuda based asset management firm, during the past five years.2016. Since 2001, he has acted as Chief Investment Officer of Arrow Finance, LLC (formerly known as Arrow Investments, Inc.), the private investment office that serves his family. Mr. von Furstenberg also serves as a partner and Co-Chairman of Diane von Furstenberg Studio, LLC. In addition to the philanthropic work accomplished through his positionfor-profit
affiliations, Mr. Von Furstenberg serves as a director of The Diller-von Furstenberg Family Foundation Mr. von Furstenberg also serves onand as a member of the board of directors of Friends of the High Line. In nominating Mr. von Furstenberg, the Board considered his private investment and public board experience, which the Board believes give him particular insight into capital markets and investment strategy, as well as a high level of financial literacy. Mr. von Furstenberg is Mr. Diller's stepson.
Richard F. Zannino, age 58,60, has been a director of IAC since June 2009. Since July 2009, Mr. Zannino has been a Managing Director at CCMP Capital Advisors, LLC, a private equity firm, where he also serves as a member of the firm's Investment Committee and as co-head of the firm's consumer retail investment efforts.sector. Mr. Zannino has also served as a member of the boards of directors of The Estée Lauder Companies, Inc. (sincesince January 2010),2010 and Ollie's Bargain Outlet (sincesince July 2015)2015 and served as a member of the boards of directors of Francesca's Collections (duringand Jamieson Wellness during the past five years).years. Mr. Zannino previously served as Chief Executive Officer and a member of the board of directors of Dow Jones & Company from February 2006 to December 2007, when Mr. Zannino resigned from these positions upon the acquisition of Dow
Jones by News Corp. Prior to this time, Mr. Zannino served as Chief Operating Officer of Dow Jones from July 2002 to February 2006 and as Executive Vice President and Chief Financial Officer of Dow Jones from February 2001 to June 2002. Prior to his tenure at Dow Jones, Mr. Zannino served in a number of executive capacities at Liz Claiborne from 1998 to January 2001, and prior to that time served as Executive Vice President and Chief Financial Officer of General Signal and in a number of executive capacities at Saks Fifth Avenue. In addition to his not-for-profitfor-profit affiliations, Mr. Zannino currently serves as a memberVice Chairman of the Board of Trustees of Pace University. In connection with the nomination of Mr. Zannino, the Board considered his extensive public company management experience, which the Board believes gives him particular insight into business strategy, leadership and marketing, as well as a high level of financial literacy. The Board also considered Mr. Zannino's private equity experience, which the Board believes gives him particular insight into acquisition and investment strategy and financing.
Leadership Structure. The Company's business and affairs are overseen by its Board of Directors, which currently has twelve members. There are three management representatives on the Board and, of the nine remaining current directors, eight are independent. The Board has standing Audit, Compensation and Human Resources and Nominating Committees, each comprised solely of independent directors, as well as an Executive Committee. For more information regarding director independence and our Board Committees, see the discussion under "Director Independence"Director Independence beginning on page 1312 and The Board and Board Committees beginning on page 15.14. All of our directors play an active role in Board matters, are encouraged to communicate among themselves and directly with the Chairman and Senior Executive and Chief Executive Officer and have full access to Company management at all times.
Our independent directors meet in scheduled executive sessions without management present at least twice a year and may schedule additional meetings as they deem appropriate. We do not have a lead independent director or any other formally appointed leader for these sessions. The independent membership of our Audit, Compensation and Human Resources and Nominating Committees ensures that directors with no ties to Company management are charged with oversight for all financial reporting and executive compensation related decisions made by Company management, as well as for recommending candidates for Board membership. At each regularly scheduled Board meeting, the Chairperson of each of these committees (as and if applicable) provides the full Board with an update of all significant matters discussed, reviewed, considered and/or approved by the relevant committee since the last regularly scheduled Board meeting.
Mr. Diller currently serves as both our Chairman and Senior Executive and has held both positions since December 2010. Effective June 24, 2015, Mr. Levin assumed the role ofcurrently serves as our Chief Executive Officer of IAC.and has held this position since June 2015. This leadership changestructure provides the Company with the benefit of Mr. Diller's continued oversight of the Company's strategic goals and vision, coupled with the benefit of a full-timefull time Chief Executive Officer dedicated to focusing on the day-to-day management and continued growth of the Company and its operating businesses. At this time, the Company believes that this leadership structure is the most appropriate one for the Company and its stockholders.
Risk Oversight. Company management is responsible for assessing and managing the Company's exposure to various risks on a day-to-day basis, which responsibilities include the creation of appropriate risk management programs and policies. Company management has developed and implemented guidelines and policies to identify, assess and manage significant risks facing the Company. In developing this framework, the Company recognized that leadership and success are impossible without taking risks; however, the imprudent acceptance of risks or the failure to appropriately identify and mitigate risks could adversely impact stockholder value. The Board is responsible for overseeing Company management in the execution of its responsibilities and for
assessing the Company's approach to risk management. The Board exercises these responsibilities periodically as part of its meetings and through discussions with Company management, as well as through the Board's Audit and Compensation and Human Resources Committees, which examine various components of financial and compensation-related risks, respectively, as part of their responsibilities. Information security is a key component of risk management at IAC and our Chief Information Security Officer briefs the Audit Committee each quarter (and where appropriate, the Board) on the information security programs of the Company and its various businesses and related priorities and controls. In addition, an overall review of risks is inherent in the Board's consideration of the Company's long-term strategies and in the transactions and other matters presented to the Board, including significant capital expenditures, acquisitions and divestitures and financial matters. The Board's role in risk oversight of the Company is consistent with the Company's leadership structure, with the Chairman and Senior Executive, Chief Executive Officer and other members of senior management having responsibility for assessing and managing the Company's risk exposure, and the Board and its committees providing oversight in connection with those efforts.
Compensation Risk Assessment. We periodically conduct risk assessments of our compensation policies and practices for our employees, including those related to our executive compensation programs. The goal of these assessments is to determine whether the general structure of the Company's compensation policies and programs and the administration of these programs pose any material risks to the Company. The findings of any risk assessment are discussed with the Compensation and Human Resources Committee.Committee and, where appropriate, the full Board of Directors. Based upon our assessments, we believe that our compensation policies and programs do not encourage excessive or unnecessary risk-taking and are not reasonably likely to have a material adverse effect on the Company.
Director Independence. Under the Marketplace Rules of The Nasdaq Stock Market, LLC (the "Marketplace Rules"), the Board has a responsibility to make an affirmative determination that those members of the Board who serve as independent directors do not have any relationships that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. In connection with the independence determinations described below, the Board reviewed information regarding transactions, relationships and arrangements relevant to independence, including those required by the Marketplace Rules. This information is obtained from director responses to questionnaires circulated by Company management, as well as from Company records and publicly available information. Following these determinations, Company management monitors those transactions, relationships and arrangements that were relevant to such determinations, as well as periodically solicits updated information potentially relevant to independence from internal personnel
and directors, to determine whether there have been any developments that could potentially have an adverse impact on the Board's prior independence determinations.
In February 2017,early 2019, the Board determined that each of Messrs. Bronfman, Eisner, Lourd, Rosenblatt, Spoon and Zannino and Mses. Clinton and Hammer is independent. In connection with these determinations, the Board considered that in some cases in the ordinary course of business, IAC and its businesses sell products and services to, purchase products and services from, co-invest with, develop and produce projects withacquire assets or businesses from (or sell them to) and/or make donations to entities at which certain directors are employed or serve as directors, or over which certain directors otherwise exert control. Furthermore, the Board considered whether there were any payments made to (or received from) such entities by IAC and its businesses. No relationships or payments considered were determined to be of the type that would: (i) preclude a finding of director independence under the Marketplace Rules or (ii) otherwise interfere with the exercise of independent judgment in carrying out the responsibilities of a director.
Of the remaining incumbent directors, Messrs. Diller, Kaufman and Levin are executive officers of the Company and Mr. von Furstenberg is Mr. Diller's stepson. Given these relationships, none of these directors is independent.
In addition to the satisfaction of the director independence requirements set forth in the Marketplace Rules, members of the Audit and Compensation and Human Resources Committees have
also satisfied separate independence requirements under the current standards imposed by theapplicable SEC rules and the Marketplace Rules for audit committee members and by the SEC, the Marketplace Rules and the Internal Revenue Service for compensation committee members.
Director Nominations. The Nominating Committee identifies, reviews and evaluates individuals qualified to become Board members and recommends candidates to the Board. While there are no specific requirements for eligibility to serve as a director of IAC, in evaluating candidates, the Nominating Committee will consider (regardless of how the candidate was identified or recommended) whether the professional and personal ethics and values of the candidate are consistent with those of IAC, whether the candidate's experience and expertise would be beneficial to the Board, whether the candidate is willing and able to devote the necessary time and energy to the work of the Board and whether the candidate is prepared and qualified to represent the best interests of IAC's stockholders. While the Board does not have a formal diversity policy, the Nominating Committee also considers the overall diversity of the experiences, characteristics, attributes, skills and backgrounds of candidates relative to those of other Board members and those represented by the Board as a whole to ensure that the Board has the right mix of skills, expertise and background.
The Board does not have a formal policy regarding the consideration of director nominees recommended by stockholders, as to date IAC has not received any such recommendations. However, the Board would consider such recommendations if made in the future. Stockholders who wish to make such a recommendation should send the recommendation to IAC,IAC/InterActiveCorp, 555 West 18th Street, New York, New York 10011, Attention: Corporate Secretary. The envelope must contain a clear notation that the enclosed letter is a "Director Nominee Recommendation." The letter must identify the author as a stockholder, provide a brief summary of the candidate's qualifications and history, together with an indication that the recommended individual would be willing to serve (if elected), and must be accompanied by evidence of the sender's stock ownership. Any director recommendations will be reviewed by the Corporate Secretary and the Chairman, and if deemed appropriate, forwarded to the Nominating Committee for further review. If the Nominating Committee believes that the candidate fits the profile of a director described above, the recommendation will be shared with the entire Board.
Communications with the IAC Board. Stockholders who wish to communicate with IAC's Board of Directors or a particular director may send any such communication to IAC,IAC/InterActiveCorp, 555 West 18th Street, New York, New York 10011, Attention: Corporate Secretary. The mailing envelope must
contain a clear notation indicating that the enclosed letter is a "Stockholder—Board Communication" or "Stockholder—Director Communication." All such letters must identify the author as a stockholder, provide evidence of the sender's stock ownership and clearly state whether the intended recipients are all members of the Board or a particular director or directors. The Corporate Secretary will then review such correspondence and forward it to the Board, or to the specified director(s), if appropriate.
The Board and Board Committees
The Board. The Board met fivefour times and acted by written consent three timestwice during 2016. During 2016, all2018. All then incumbent directors attended at least 75% of the meetings of the Board and the Board committees on which they served.served during 2018. Directors are not required to attend annual meetings of IAC stockholders. One memberTwo members of the Board of Directors attended IAC's 20162018 Annual Meeting of Stockholders.
The Board currently has four standing committees: the Audit Committee, the Compensation and Human Resources Committee, the Nominating Committee and the Executive Committee.
Board Committees. The following table sets forth the members of each Board committee and the number of meetings held by each such committee, and times that each such committee took action by written consent, during 2016. Unless otherwise indicated, each2018. Each committee member identified below served in the capacities set forth in the table for all of 2016.2018.
Name | Audit Committee | Compensation and Human Resources Committee | Nominating Committee | Executive Committee | Audit Committee | Compensation and Human Resources Committee | Nominating Committee | Executive Committee | ||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Edgar Bronfman, Jr.(1). | — | — | X | X | — | — | X | X | ||||||||||||||||||
Chelsea Clinton(1) | — | — | — | — | — | — | — | — | ||||||||||||||||||
Barry Diller | — | — | — | X | — | — | — | X | ||||||||||||||||||
Michael D. Eisner(1) | — | — | X | — | — | — | X | — | ||||||||||||||||||
Bonnie S. Hammer(1) | — | Chair | (2) | — | — | — | Chair | — | — | |||||||||||||||||
Victor A. Kaufman | — | — | — | X | — | — | — | X | ||||||||||||||||||
Joseph Levin | — | — | — | — | — | — | — | — | ||||||||||||||||||
Bryan Lourd(1) | X | — | — | — | X | — | — | — | ||||||||||||||||||
David Rosenblatt(1) | — | Chair | (2) | — | — | — | X | — | — | |||||||||||||||||
Alan G. Spoon(1) | Chair | — | — | — | Chair | — | — | — | ||||||||||||||||||
Alexander von Furstenberg | — | — | — | — | — | — | — | — | ||||||||||||||||||
Richard F. Zannino(1) | X | — | — | — | X | — | — | — | ||||||||||||||||||
Number of Meetings | 8 | 1 | 0 | 0 | 8 | 1 | 0 | 0 | ||||||||||||||||||
Number of Written Consents | 0 | 6 | 1 | 1 | 0 | 5 | 1 | 5 |
Audit Committee. The Audit Committee functions pursuant to a written charter adopted by the Board of Directors, the most recent version of which is attachedwas filed as Appendix A to to thisthe Company's 2017 Annual Meeting proxy statement. The Audit Committee is appointed by the Board to assist the Board with a variety of matters described in the charter, which include monitoring: (i) the integrity of IAC's financial statements, (ii) the effectiveness of IAC's internal control over financial reporting, (iii) the qualifications and independence of IAC's independent registered public accounting firm, (iv) the performance of IAC's internal audit function and independent registered public accounting firm, (v) IAC's risk assessment and risk management policies as they relate to financial and other risk exposures and (vi) the compliance by IAC with legal and regulatory requirements. In fulfilling its purpose, the Audit Committee maintains free and open communication among its members, the Company's independent registered public accounting firm, the Company's internal audit function and Company management. The formal report of the Audit Committee is set forth on page 18.16.
The Board has previously concluded that Mr. Spoon is an "audit committee financial expert," as such term is defined in applicable SEC rules and the Marketplace Rules.
Compensation and Human Resources Committee. The Compensation and Human Resources Committee functions pursuant to a written charter adopted by the Board of Directors, the most recent version of which is attachedwas filed as Appendix B to thisthe Company's 2017 Annual Meeting proxy statement. The Compensation and Human Resources Committee is appointed by the Board to assist the Board with all matters relating to the compensation of the Company's executive officers and has overall responsibility for approving and evaluating all compensation plans, policies and programs of the Company as they relate to the Company's executive officers. The Compensation and Human Resources Committee may form and delegate authority to subcommittees and may delegate authority to one or more of its members. The
Compensation and Human Resources Committee may also delegate to one or more of the Company's executive officers the authority to make grants of equity-based compensation to eligible individuals (other than directors or executive officers) to the extent allowed under applicable law. For additional information on IAC's processes and procedures for the consideration and determination of executive compensation and the related roles of the Compensation and Human Resources Committee, Company management and consultants, see the discussion under "CompensationCompensation Discussion and Analysis"Analysis generally beginning on page 21.20. The formal report of the Compensation and Human Resources Committee is set forth on page 28.26.
Nominating Committee. The Nominating Committee functions pursuant to a written charter adopted by the Board of Directors, the most recent version of which is attachedwas filed as Appendix C to thisthe Company's 2017 Annual Meeting proxy statement. The Nominating Committee is appointed by the Board to assist the Board by: (i) identifying, reviewing and evaluating individuals qualified to become Board members, (ii) recommending director nominees for the next annual meeting of stockholders (and nominees to fill vacancies on the Board as necessary) and (iii) making recommendations with respect to the compensation and benefits of directors.
Executive Committee. The Executive Committee has all the power and authority of the Board of Directors of IAC, except those powers specifically reserved to the Board by Delaware law or IAC's organizational documents.
PROPOSAL 2—ADVISORY VOTE ON EXECUTIVE COMPENSATION (THE SAY ON PAY VOTE)
As required pursuant to Section 14 of the Exchange Act of 1934, as amended (the "Exchange Act"), we are seeking a non-binding advisory vote from our stockholders to approve the compensation of our named executives for 2016. This proposal, which we refer to as the "say on pay vote," is not intended to address any specific item of compensation, but rather our overall compensation program and policies relating to our named executives.
As described in detail under the caption Compensation Discussion and Analysis, beginning on page 21, our executive officer compensation program is designed to provide the level of compensation necessary to attract, retain, motivate and reward talented and experienced executives and to motivate them to achieve short-term and long-term goals, thereby enhancing stockholder value and creating a successful company.
We believe that our executive officer compensation program, with its balance of short-term and long-term incentives, rewards sustained performance that is aligned with long-term stockholder interests. Accordingly, we believe that the compensation paid to our named executives in 2016 pursuant to our executive officer compensation program was fair and appropriate and are asking our stockholders to voteFOR the adoption of the following resolution:
"RESOLVED, that the Company's stockholders approve, on an advisory basis, the compensation of the Company's named executives for 2016, as disclosed in this proxy statement, pursuant to the U.S. Securities and Exchange Commission's compensation disclosure rules, including the Compensation Discussion and Analysis, the Executive Compensation tables and the related narrative discussion."
The approval, on an advisory basis, of the say on pay vote proposal requires the affirmative vote of the holders of a majority of the voting power of shares of IAC capital stock present at the Annual Meeting in person or represented by proxy and voting together. The vote is advisory in nature and therefore not binding on us or our Board. However, our Board and Compensation and Human Resources Committee value the opinions of all of our stockholders and will consider the outcome of this vote when making future compensation decisions for our named executives. Following its 2011 Annual Meeting of Stockholders, the Company decided to seek a say on pay vote every three years. Accordingly, the Company last sought a say on pay vote at its 2014 Annual Meeting of Stockholders.
The Board recommends that our stockholders voteFOR the advisory vote on executive compensation.
PROPOSAL 3—ADVISORY VOTE ON THE FREQUENCY OF HOLDING THE SAY ON PAY VOTE
Section 14 of the Exchange Act also requires us to seek a non-binding advisory vote from our stockholders regarding the frequency of holding the advisory vote on executive compensation in the future. In casting your advisory vote, you may indicate whether you prefer that we seek an advisory vote every one, two or three years. You may also abstain from voting on this matter.
After thoughtful consideration, our Compensation and Human Resources Committee and the Board believe that holding an advisory vote on executive compensation every three years is the most appropriate policy for the Company and its stockholders at this time. Our Board and the Compensation and Human Resources Committee believe that a triennial vote more closely mirrors the long-term nature of a significant portion of our executive officer compensation program and will discourage short-term thinking and, as a result, stockholder analysis of our performance and compensation practices would be more fully informed when viewed over a three-year period. Moreover, allowing more time in between the advisory votes on executive compensation would provide a greater opportunity for our Board and Compensation and Human Resources Committee to engage in meaningful analysis of any compensation issues and consideration of any stockholder concerns.
The approval, on an advisory basis, of the frequency of holding the say on pay vote proposal requires the affirmative vote of the holders of a majority of the voting power of shares of IAC capital stock present at the Annual Meeting in person or represented by proxy and voting together. However, if no choice receives a majority of votes, then the option on the frequency of the advisory vote that receives the highest number of votes cast by stockholders will be considered by the Board as the recommendation of our stockholders as to the frequency of holding future say on pay votes. The vote is advisory in nature and therefore not binding on us or our Board. However, our Board values the opinions of all of our stockholders and will consider the outcome of this vote when making future decisions on the frequency with which we will hold an advisory vote on executive compensation.
The Board recommends that our stockholders vote for holding the say on pay vote onceEVERY THREE YEARS.
Section 14 of the Exchange Act requires us to seek a non-binding advisory vote from our stockholders on the frequency of seeking the say on pay vote every six years. Accordingly, we last sought this non-binding advisory vote at our 2011 Annual Meeting of Stockholders and the next such vote is scheduled to be held at the Company's 2023 Annual Meeting of Stockholders.
PROPOSAL 4—RATIFICATION OF APPOINTMENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Subject to stockholder ratification, the Audit Committee of the Board of Directors has appointed Ernst & Young LLP as IAC's independent registered public accounting firm for the fiscal year ending December 31, 2017.2019.
The Audit Committee annually evaluates the performance of Ernst & Young LLP has servedand determines whether to continue to retain such firm or consider the retention of another firm. In appointing Ernst & Young LLP as IAC's independent registered public accounting firm for many years and is considered by2019, the Audit Committee considered: (i) the firm's performance as the Company's independent registered public accounting firm, (ii) the fact that firm has audited the financial statements of the Company management(and its predecessors) since 1996, (iii) the firm's independence with respect to the services to be well qualified.performed for the Company and (iv) the firm's strong and considerable qualifications and general reputation for adherence to professional auditing standards. In addition, in conjunction with the mandated rotation of the lead engagement partner every five years, the Audit Committee is directly involved in the selection of the new lead engagement partner.
A representative of Ernst & Young LLP is expected to be present at the Annual Meeting and will be given an opportunity to make a statement if he or she so chooses and will be available to respond to appropriate questions.
Ratification of the appointment of Ernst & Young LLP as IAC's independent registered public accounting firm requires the affirmative vote of the holders of a majority of the voting power of the shares of IAC capital stock present at the Annual Meeting in person or represented by proxy and voting together.
The Board recommends that our stockholders voteFOR the ratification of the appointment of Ernst & Young LLP as IAC's independent registered public accounting firm for the fiscal year ending December 31, 2017.
Table of Contents2019.
The Audit Committee functions pursuant to a written charter adopted by the Board of Directors, the most recent version of which is attachedwas filed as Appendix A to thisthe Company's 2017 Annual Meeting proxy statement. The Audit Committee charter governs the operations of the Audit Committee and sets forth its responsibilities, which include providing assistance to the Board of Directors with the monitoring of: (i) the integrity of IAC's financial statements, (ii) the effectiveness of IAC's internal control over financial reporting, (iii) the qualifications and independence of IAC's independent registered public accounting firm, (iv) the performance of IAC's internal audit function and independent registered public accounting firm, (v) IAC's risk assessment and risk management policies as they relate to financial and other risk exposures and (vi) the compliance by IAC with legal and regulatory requirements. It is not the duty of the Audit Committee to plan or conduct audits or to determine that IAC's financial statements and disclosures are complete, accurate and have been prepared in accordance with generally accepted accounting principles and applicable rules and regulations. These areManagement is responsible for the responsibilitiesCompany's financial reporting process, including systems of Company management and IAC'sinternal control over financial reporting. The independent registered public accounting firm.accountants are responsible for performing an independent audit of the Company's consolidated financial statements and the effectiveness of the Company's internal control over financial reporting in accordance with the standards of the Public Company Accounting Oversight Board, and to issue a report thereon. The Audit Committee's responsibility is to engage the independent auditor and otherwise to monitor and oversee these processes.
In fulfilling its responsibilities, the Audit Committee has reviewed and discussed the audited consolidated financial statements of IAC included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 20162018 with IAC's management and Ernst & Young LLP.LLP, IAC's independent registered public accounting firm.
The Audit Committee has discussed with Ernst & Young the matters required to be discussed by PCAOB Auditing Standard 1301, "Communications with Audit Committees." In addition, the Audit Committee has received the written disclosures and letter from Ernst & Young required by applicable requirements of the Public Company Accounting Oversight Board regarding Ernst & Young's communications with the Audit Committee concerning independence and has discussed with Ernst & Young its independence from IAC and its management.
In reliance on the reviews and discussions referred to above, the Audit Committee recommended to the Board of Directors that the audited consolidated financial statements of IAC for the fiscal year ended December 31, 2016 be included in IAC's Annual Report on Form 10-K for the year ended December 31, 20162018 for filing with the SEC.
Members of the Audit Committee
Alan G. Spoon (Chairperson)
Bryan Lourd
Richard F. Zannino
Fees Paid to Our Independent Registered Public Accounting Firm
The following table sets forth fees for all professional services rendered by Ernst & Young LLP to IAC for the years ended December 31, 20162018 and 2015:2017:
| 2016 | 2015 | 2018 | 2017 | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Audit Fees | $ | 2,321,475 | (1) | $ | 5,919,000 | (2) | $ | 2,366,000 | (1) | $ | 2,797,750 | (2) | ||
Audit-Related Fees(3) | $ | 50,000 | $ | 50,000 | $ | 50,000 | $ | 50,000 | ||||||
| | | | | | | | | | | | | | |
Total Audit and Audit-Related Fees | $ | 2,371,475 | $ | 5,969,000 | $ | 2,416,000 | $ | 2,847,750 | ||||||
Tax Fees(4) | $ | 13,750 | $ | 1,250,000 | — | $ | 14,800 | |||||||
| | | | | | | | | | | | | | |
Total Fees | $ | 2,385,225 | $ | 7,219,000 | $ | 2,416,000 | $ | 2,862,550 | ||||||
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Excludes 2018 Audit Fees in the total aggregate amount of $2,920,000 and $2,071,000 incurred and paid directly by Match Group, Inc. ("Match Group").
and ANGI Homeservices Inc., respectively.
Excludes 2017 Audit Fees for services described in (i), (ii), (iii) and (v) above in the total aggregate amount $3,980,000 were either allocatedof $2,954,700 and $2,611,000 incurred and paid directly by the Company to Match Group, (based on Match Group's revenue as a percentage of IAC's total revenue) or paid by IACInc. and reimbursed by Match Group.ANGI Homeservices Inc., respectively.
Audit and Non-Audit Services Pre-Approval Policy
The Audit Committee has a policy governing the pre-approval of all audit and permitted non-audit services performed by IAC's independent registered public accounting firm in order to ensure that the provision of these services does not impair such firm's independence from IAC and its management. Unless a type of service to be provided by IAC's independent registered public accounting firm has received general pre-approval, it requires specific pre-approval by the Audit Committee. Any proposed services in excess of pre-approved cost levels also require specific pre-approval by the Audit Committee. In all pre-approval instances, the Audit Committee considers whether such services are consistent with SEC rules regarding auditor independence.
All Tax services require specific pre-approval by the Audit Committee. In addition, the Audit Committee has designated specific services that have the pre-approval of the Audit Committee (each of which is subject to pre-approved cost levels) and has classified these pre-approved services into one of three categories: Audit, Audit-Related and All Other (excluding Tax). The term of any pre-approval is 12twelve months from the date of the pre-approval, unless the Audit Committee specifically provides for a different period. The Audit Committee revisesreviews the list of pre-approved services from time to time.time and will revise it as and if appropriate. Pre-approved fee levels for all services to be provided by IAC's independent registered public accounting firm are established periodically from time to time by the Audit Committee.
Pursuant to the pre-approval policy, the Audit Committee may delegate its authority to grant pre-approvals to one or more of its members, and has currently delegated this authority to its Chairperson. The decisions of the Chairperson (or any other member(s) to whom such authority may be delegated) to grant pre-approvals must be presented to the full Audit Committee at its next scheduled meeting. The Audit Committee may not delegate its responsibilities to pre-approve services to Company management.
INFORMATION CONCERNING IAC EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS
Background information about IAC's current executive officers who are not director nominees is set forth below. For background information about IAC's Chairman and Senior Executive, Barry Diller, Chief Executive Officer, Joseph Levin, and Vice Chairman, Victor A. Kaufman, see the discussion under "InformationInformation Concerning Director Nominees"Nominees beginning on page 7.6.
Glenn H. Schiffman, age 47,49, has served as Executive Vice President and Chief Financial Officer of IAC since April 2016.2016 and served as Chief Financial Officer of ANGI Homeservices Inc. from September 2017 to March 2019. Prior to joining IAC, Mr. Schiffman served as Senior Managing Director at Guggenheim Securities, the investment banking and capital markets business of Guggenheim Partners, since March 2013. Prior to his tenure at Guggenheim Securities, Mr. Schiffman was a partner at The Raine Group, a merchant bank focused on advising and investing in the technology, media and telecommunications industries, from September 2011 to March 2013. Prior to joining The Raine Group, Mr. Schiffman served as Co-Head of the Global Media group at Lehman Brothers from 2005 to 2007 and Head of Investment Banking Asia-Pacific at Lehman Brothers (and subsequently Nomura) from April 2007 to January 2010, as well as Head of Investment Banking, Americas from January 2010 to April 2011 for Nomura. Mr. Schiffman's roles at Nomura followed Nomura's aquisitionacquisition of Lehman's Asia business in 2008. In his not-for-profit affiliations, Mr. Schiffman is a member of the National Committee on United States-China Relations and serves as a Member of the Board of Visitors for the Duke University School of Medicine. Mr. Schiffman has served on the boardboards of directors of Match Group, Inc. and ANGI Homeservices Inc. since September 2016.2016 and June 2017, respectively.
Mark Stein, age 49,51, has served as Executive Vice President and Chief Strategy Officer of IAC since January 2016 and prior to that time, served as Senior Vice President and Chief Strategy Officer of IAC from September 2015. Mr. Stein previously served as both Senior Vice President of Corporate Development at IAC (from January 2008) and Chief Strategy Officer of IAC Search & Applications, the desktop software, mobile applications and media properties that comprised IAC's former Search & Applications segment (from November 2012). Prior to his service in these roles, Mr. Stein served in several other capacities for IAC and its businesses, including as Chief Strategy Officer of Mindspark Interactive Network from 2009 to 2012, and prior to that time as Executive Vice President of Corporate and Business Development of IAC Search & Media. Mr. Stein has served on the boardboards of directors of Match Group, Inc. and ANGI Homeservices Inc. since November 2015.2015 and September 2017, respectively.
Gregg Winiarski, age 46,48, has served as Executive Vice President, General Counsel and Secretary of IAC since February 2014 and previously served as Senior Vice President, General Counsel and Secretary of IAC from February 2009 to February 2014. Mr. Winiarski previously served as Associate General Counsel of IAC from February 2005, during which time he had primary responsibility for all legal aspects of IAC's mergers and acquisitions and other transactional work. Prior to joining IAC in February 2005, Mr. Winiarski was an associate with Skadden, Arps, Slate, Meagher & Flom LLP, a global law firm, from 19961997 to February 2005. Prior to joining Skadden, Mr. Winiarski was a certified public accountant with Ernst & Young in New York. Mr. Winiarski has served on the boardboards of directors of Match Group, Inc. and ANGI Homeservices Inc. since October 2015.
Table of Contents2015 and June 2017, respectively.
COMPENSATION DISCUSSION AND ANALYSIS
Our executive officers whose compensation is discussed in this compensation discussion and analysis (the "CD&A"), and to whom we refer to as our named executive officersexecutives in this CD&A (the "NEOs") are:
Our executive officer compensation program is designed to increase long-term stockholder value by attracting, retaining, motivating and rewarding leaders with the competence, character, experience and ambition necessary to enable the Company to meet its growth objectives.
Although IAC is a publicly traded company, we attempt to foster an entrepreneurial culture, and attract and retain senior executives with entrepreneurial backgrounds, attitudes and aspirations. Accordingly, when attempting to recruit and retain our executive officers, as well as other executives who may become executive officers at a later time, we compete not only with other public companies, but also with earlier stage companies, companies funded by private equity and venture capital firms and professional firms. We structure our compensation program so that we can compete in this varied marketplace for talent, with an emphasis on variable, contingent compensation and long-term equity ownership.
While we consider market data in establishing broad compensation programs and practices and may periodically benchmark the compensation associated with particular executive positions, we do not definitively rely on competitive survey data or any benchmarking information in establishing executive compensation. The Company makes decisions based on a host of factors particular to a given executive's situation, including its firsthand experience with the competition for recruiting executives and its understanding of the current environment, and believes that over-reliance on survey data, or a benchmarking approach, is too rigid and stale for the dynamic and fast changing marketplace for talent in which we compete.
Similarly, we believe that arithmetic approaches to measuring and rewarding short-term performance often fail to adequately take into account the multiple factors that contribute to success at the individual executive and business level. In any given period, the Company may have multiple objectives, and these objectives and(and their relative importance,importance) often change as competitive and strategic landscapes shift. Accordingly, we have historically avoided the use of strict formulas in our
annual bonus program, believing that they often over-compensate or under-compensate a given performance level. We instead rely primarily on an approach that, while based on clear objectives, is not formulaic and allows for the exercise of discretion in setting final bonus amounts.
In addition, we are of the view that long-term incentive compensation in the form of equity awards aligns the interests of executives with the interests of our long-term shareholders,stockholders, and to further this important goal, equity awards play a prominent role in our overall compensation program. The form of equity awards has changed from time to time over the years. We have used non-qualified stock options as the predominant equity incentive vehicle for our executives for many years. We use this equity incentive instrument primarily for the sake of simplicity given that the value from stock option awards is directly dependent on appreciation in the Company's stock price and
therefore provides an objectively measurable goal, and a belief that it would, in general, make the Company more competitive in recruiting talented executives and employees. From time to time, however, executives have been awardedIn 2019, we introduced performance-based restricted stock units in additionunit awards for our executive officers. We made this change to or in lieureduce the dilutive impact of equity awards made to our executives (relative to stock option awards, depending on individual circumstances, and in 2016 twooptions), while still aligning the interests of our executives was awarded restricted stock units (as described below).with those of our shareholders. We will continue to evaluate the appropriate form of equity-based incentive awards as market conditions evolve.
We believe that the Company's executive officer compensation program puts the substantial majority of compensation at risk, rewards both individual executive and corporate performance in a targeted fashion, pays amounts appropriate to attract and retain those key individuals necessary to grow the Company and aligns the interests of our key executives with the interests of our stockholders. We continuously evaluate our program and make changes as we deem appropriate. We presented a "Say-on-Pay" item to stockholders in 2017, which called for an advisory, non-binding vote regarding the compensation of our named executive officers in 2016 as described in the 2017 Annual Meeting proxy statement. On this item, over 97% of the votes cast were in favor of the resolution. In light of strong stockholder support, we concluded that no revisions were necessary to our executive officer compensation program as a direct result of that advisory vote.
The Compensation and Human Resources Committee of the Company's Board of Directors (for purposes of this CD&A, the "Committee") has primary responsibility for establishing the compensation of the Company's executive officers. All compensation decisions referred to throughout this CD&A have been made by the Committee, based (in part) on recommendations from Mr.Messrs. Diller and Mr. Levin (as described below). The Committee currently consists of Ms. Hammer (Chairperson) and Mr. Rosenblatt.
The executive officers participate in structuring Company-wide compensation programs and in establishing appropriate bonus and equity pools. In early 2017, Messrs.2019, Mr. Diller and Levin met with the Committee and discussed theirhis views of corporate and individual executive officer performance for 20162018 for Messrs. Kaufman,Levin, Schiffman, Stein and Winiarski, and theirhis recommendations for annual bonuses for thosethese executive officers. Messrs. Diller and Levin had previously discussed Mr. Levin's views of the individual performance of each of Messrs. Schiffman, Stein and Winiarski, and those views were incorporated into Mr. Diller's recommendations. Mr. Diller also discussed Mr. Levin's performance, and his views on his own performance with the Committee. Following these discussions, the Committee met in an executive sessionssession to discuss these recommendations. After consideration of these recommendations, the Committee ultimately determined the annual bonus amount for each executive officer.
In establishing a given executive officer's compensation package, each individual component is evaluated independently and in relation to the package as a whole. Prior earning histories and outstanding long-term compensation arrangements are also reviewed and taken into account. However, we do not believe in any formulaic relationship or targeted allocation between these elements. Instead, each individual executive's situation is evaluated on a case-by-case basis each year, considering the variety of relevant factors at that time.
From time to time, the Committee has solicited the advice of consulting firms and engaged legal counsel. No such consulting firms or legal counsel were engaged during 2016.2018.
In addition, from time to time, the Company may solicit survey or peer compensation data from various consulting firms. In 2016,2018, the Company engaged Mercer (US) Inc.Compensation Advisory Partners ("CAP") to provide comparative market data in connection with the Company's own analysis of its equity compensation practices, but neither MercerCAP nor any other compensation consultant engaged by the Company had any role in determining or recommending the amount or form of executive compensation for 2016.2018.
Our compensation packages for executive officers primarily consist of salary, annual bonuses, IAC equity awards and, in certain instances, perquisites and other benefits.
SalarySalary.
We typically negotiate a new executive officer's starting salary upon arrival, based on the executive's prior compensation history, prior compensation levels for the particular position within the Company, the Company's New York City location, salary levels of other executive officers within the Company and salary levels available to the individual in alternative opportunities. Salaries can increase based on a number of factors, including the assumption of additional responsibilities and other factors whichthat demonstrate an executive officer's increased value to the Company. No executive officer's salary was adjusted during 2016.2018.
Annual Bonuses
General. We establishOur bonus levels through a two-pronged process. First, at the beginning of each year, the Committee setsprogram is designed to reward performance objectives, which historically have been tied to the achievement of EBITDA (as defined below), revenue or share price performance targets during the forthcoming year,on an annual basis and maximum bonus amounts. In general, these performance targetsannual bonuses are minimum acceptable performance conditions, but with respect to which there is substantial uncertainty when we establish them. The establishment of performance targets and maximum bonus amounts is undertaken primarily to satisfy the requirements of Section 162(m)discretionary. Because of the Internal Revenue Code, as amended. Satisfaction of one or morevariable nature of the performance targets established bybonus program, and because in any given year bonuses can make up the Committee allowssignificant majority of an executive officer's cash compensation, the bonus program provides a strong incentive for our executive officers to achieve annual corporate objectives. We generally pay bonuses shortly after year-end following finalization of financial results for the payment of bonuses that will be deductible by the Company for federal income tax purposes, should any bonuses be awarded to the Company's named executive officers. However, satisfaction of the applicable performance targets does not obligate the Committee to approve any specific bonus amount for any executive officer, and the Committee has historically reduced the maximum bonus amount based on a discretionary assessment of Company and, to a lesser extent, individual performance.prior year.
In making its determinations regarding individual annual bonus amounts, the Committee considers a variety of factors, such as growth in profitability or achievement of strategic objectives by the Company, and, to a lesser extent, an individual's performance and contribution to the Company. The Committee does not quantify the weight given to any specific element or otherwise follow a formulaic calculation. Rather, the Committee engages in an overall assessment of appropriate bonus levels based on a subjective interpretation of all relevant criteria. This process is designed to permit the Company to deduct the bonus compensation paid to executives for income tax purposes.
The definition of EBITDA used for establishing Section 162(m) performance objectives comes from IAC's 2013 Stock and Annual Incentive Plan, and is as follows: "EBITDA" means for any period, operating profit (loss) plus, if applicable: (i) depreciation, (ii) amortization and impairment of intangibles, (iii) goodwill impairment, (iv) non-cash compensation expense, (v) restructuring charges, (vi) non cash write-downs of assets, (vii) charges relating to disposal of lines of business, (viii) litigation settlement amounts and (ix) costs incurred for proposed and completed acquisitions.
20162018 Bonuses. For 2016, the Committee predicated the payment of bonuses to executive officers on attaining: (i) EBITDA in any of the four consecutive calendar quarters beginning with the second quarter of 2016 at least equal to EBITDA in the corresponding calendar quarter twelve months before, (ii) revenue in any of the four consecutive calendar quarters beginning with the second quarter of 2016 at least equal to revenue in the corresponding calendar quarter twelve months before or (iii) share price growth of at least 5% over $42.39 (the closing price of the Company's common stock on February 10, 2016) on any 20 trading days during the period beginning on February 11, 2016 through December 31, 2016. Two of the targets were met. After concluding that the threshold performance targets for the payment of bonuses had been achieved, the Committee then exercised its right to reduce bonus amounts for each individual executive officer from the maximum level established. In setting actual bonus levels,2018, the Committee considered a variety of factors, including:
Company focusedended the year with $2.1 billion of cash and cash equivalents on cost-cutting efforts throughouta consolidated basis, which we believe positions us for long-term growth as we continue to invest in our businesses and identify new opportunities for expansion.
While the factors noted above were the primary ones considered in setting bonus award amounts, the Committee also considered each executive officer's role and responsibilities, the relative contributions made by each executive officer during the year and the relative size of the bonuses paid to the other executive officers. With respect to 20162018 bonuses for our NEOs, the Committee considered the following: (i)following with respect toto: (i) Mr. Diller, his continued role in providing strategic direction for the Company overall, (ii) with respect to Mr. Levin, his continuing focus on managing the day-to-day business operations of the Company including stepping in as acting Chief Executive Officer of Vimeo and participating in the development of strategic initiatives for the Company, (iii) with respect to Mr. Kaufman,Schiffman, his participationrole in strategicthe successful completion of financing transactions and a number of acquisitions and dispositions, as well as his continuing role in the day-to-day oversight of the business operations of the Company, (iv) with respect to Mr. Schiffman, his new role as Executive Vice President and Chief Financial Officer and his oversight of cost-cutting initiatives, (v) with respect to Mr. Stein, participating in the development of strategy for several of the Company's businesses, and (vi) with respect to Mr. Winiarski, his role in managing the successful completion of a number of acquisitions and dispositions, including his involvement in the Company's financing efforts and his ongoing oversight of businessesthe Company's litigation, regulatory and investments.compliance efforts.
As noted above, in setting individual bonus amounts, the Committee did not quantify the weight assigned to any specific factor, nor did it apply a formulaic calculation. In setting bonus amounts, the Committee generally considered the Company's overall performance, the amount of bonus for each NEO relative to other Company executives and the recommendations of the Chairman and Senior Executive and the Chief Executive Officer. In addition, the Committee considered achievements in 20162018 as compared to achievements and bonus levels in prior years.
Executive officer bonuses tend to be highly variable from year-to-year depending on the performance of the Company and, in certain circumstances, individual executive officer performance. Accordingly, we believe our executive officer bonus program provides strong incentives to reach the Company's annual goals.
Long-Term Incentives
General. Due to our entrepreneurial philosophy, we believe that providing a meaningful equity stake in our business is essential to create compensation opportunities that can compete, on a risk-adjusted basis, with entrepreneurial employment alternatives. In addition, we believe that ownership shapes behavior, and that by providing compensation in the form of equity awards, we align
executive officer incentives with stockholder interests in a manner that we believe drives superior performance over time.
While there is currently no formal stock ownership or holding requirement for executive officers, our executive officers generally have historically held a significant portion of their stock awards (net of tax withholdings) well beyond the relevant vesting dates.
In establishing equity awards for an executive officer for any given period, the amount of outstanding unvested and/or unexercised equity awards, as well as previously earned or exercised equity awards, is reviewed and evaluated on an individual-by-individual basis. In setting award levels, the predominant considerations are providing the executive officer with effective retention incentives, appropriate reward for past performance, incentives for strong future performance and competitive conditions. The annual corporate performance factors relevant to setting bonus amounts, while considered, are generally less relevant in determining the type and level of equity awards, as the awards
tend to be more forward looking, and are a longer-term retention and reward instrument relative to our annual bonuses.
The Company's usual practice is to schedule the Committee meetings at which awards are to be madegranted well in advance, without regard to the timing of the release of earnings or other material information.
20162018 Equity Awards. In February 2016,March 2018, the Committee granted 200,00080,000 stock options to Mr. Levin, 150,000 stock options to Mr. Stein and 100,000 stock options to Mr. Winiarski. The options vest 25% a year, on the first four anniversaries of the grant date, and haveSchiffman with an exercise price equal toof $152.53, the closing price of the Company's common stock on the grant date. Also in February 2016, Mr. Levin received 100,000 restricted stock units, vesting in one lump sum installment on the third anniversary of the grant date, and Mr. Kaufman received a restricted stock unit award with a dollar valuewhich will vest 50% on each of $350,000 in accordance withFebruary 15, 2021 and February 15, 2022; provided, that the termsvesting of his employment agreement, vesting in thirds on50% of these options is also subject to the first three anniversaries of the grant date. In April 2016, upon joining the Company, Mr. Schiffman received 200,000 stock optionsrequirement that vest 25% a year, on the first four anniversaries of the grant date, and have an exercise price equal to the closing price per share of the Company's common stock onduring any twenty consecutive days during which the grant date. Mr. Diller did not receiveaward is outstanding equals or exceeds $200 per share. This performance condition has been met. In addition, following vesting, these options shall only be exercisable after February 15, 2022.
No other executive officer received an equity award in 2016,2018, as the Committee granted him one millionconsidered outstanding equity awards then held by each other executive officer and the amount realizable from those awards based the Company's stock options in 2015, withprice at the time of the Committee noting at that timemeeting, and the significant appreciation in the Company's history of granting Mr. Dillerstock price since the last time equity awards once every few years (andwas awarded to the Committee's intention to remain consistent with that approach).
We believe these awards provide meaningful retention and performance incentives for our executive officers.
20172019 Equity Awards. In February 2017,During the first quarter of 2019, the Committee granted 300,000awarded performance-based restricted stock optionsunits ("PSUs") to Mr. Levin, 150,000 stock optionsour executive officers. A base number of PSUs was communicated to each executive, who had the choice between two types of Messrs. Schiffman and Stein, and 100,000PSUs (or a combination of the two choices): (i) the base number of PSUs, with vesting conditioned upon IAC's stock options to Mr. Winiarski. The options vest 25% a year, on the first four anniversariesprice increasing by at least 20% ($267.00) within 3 years of the grant date and have an exerciseor (ii) twice the base number of PSUs, with vesting conditioned upon IAC's stock price equal to the closing priceincreasing by at least 50% ($333.75) within 5 years of the Company's common stock on the grant date. Also in February 2017, Mr. Kaufman receivedIf the stock price target is not achieved by the end of the 3-or 5-year window, no PSUs will vest. However, once the stock price target is met, the award will vest and the executive officer will be required to hold the underlying shares until the earlier of the first anniversary of the vesting date or the end of the original 3 or 5-year term. The awards also provided the opportunity for a restrictedportion of each award to vest upon termination of employment, subject to the stock unit award with a dollar valueprice target being met within the original 3- or 5-year term of $350,000 in accordance with the termsaward. Each executive officer elected to receive 50% of his employment agreement, vesting in thirds onaward as 3-year PSUs and 50% of his award as 5-year PSUs, as follows:
Name | Number of 3-Year PSUs | Number of 5-Year PSUs | |||||
---|---|---|---|---|---|---|---|
Barry Diller | 11,851 | 23,703 | |||||
Joseph Levin | 22,471 | 44,943 | |||||
Glenn H. Schiffman | 8,988 | 17,977 | |||||
Mark Stein | 4,494 | 8,988 | |||||
Gregg Winiarki | 4,491 | 8,988 |
The Committee believes that the first three anniversariesnew PSUs properly align incentives with those of the grant date.our stockholders, and serve as a good mechanism to link executive compensation to long-term Company performance while encouraging an appropriate amount of risk taking and fostering a culture of high performance.
New Employment Agreement for Mr. Schiffman.Stein. Effective April 7, 2016June 28, 2018 (the "Effective Date"), IAC and Mr. SchiffmanStein, the Company's Chief Strategy Officer, entered into an employment agreement (the "Employment Agreement"), pursuant to which Mr. Schiffman became the Company's Executive Vice President and Chief Financial Officer.. The Employment Agreement has a scheduled term of one (1) year from the Effective Date and provides for automatic renewals for successive one (1) year terms absent written notice
from IAC or Mr. SchiffmanStein ninety (90) days prior to the expiration of the then current term.
The Employment Agreement provides that Mr. SchiffmanStein will be eligible to receive an annual base salary (currently $600,000)$550,000), discretionary annual cash bonuses, equity awards and such other employee benefits as may be reasonably determined by the Committee. Upon joining IAC, Mr. Schiffman was granted 200,000 IAC stock options that vest 25% a year, on the first four anniversaries of the grant date, subject to Mr. Schiffman's continued employment with IAC, and have an exercise price equal to the closing price of the Company's common stock on the Effective Date (the "2016 Options").
Upon certain involuntary terminationsa termination of Mr. Schiffman'sStein's employment by IAC without "cause" (and other than by reason of death or disability), Mr. Stein's resignation for "good reason" or the timely delivery of a non-renewal notice by IAC (a "Qualifying Termination"), and subject to the execution and non-revocation of a release and compliance with the restrictive covenants set forth below: (i) IAC will continue to pay Mr. SchiffmanStein his annual base salary for one (1) yeara period of twelve months following such termination (the "Severance Period"), (ii) the 2016 Options shall vest as of such date of termination, (iii) all other IAC equity awards (including any cliff vesting awards, which shall be pro-rated as though such awards had an annual vesting schedule) held by Mr. SchiffmanStein on the date of the Qualifying Termination that would have otherwise vested during the one (1) year period following such terminationSeverance Period shall vest as of the date of such termination, and (iv)(iii) all vested and outstanding IAC stock options held by Mr. SchiffmanStein as of the date of such terminationQualifying Termination (including any stock options that vested pursuant to the acceleration rights described above), shall remain outstanding and exercisable for eighteen (18) months from the date of such termination.
Pursuant to his agreement, Mr. SchiffmanStein is bound by a covenant not to compete with IAC's businesses during the term of his employment and for twelve (12) months after certain involuntary terminationsduring the Severance Period and covenants not to solicit IAC's employees or business partners during the term of his employment and for eighteen (18) months after such a termination.Qualifying Termination. In addition, Mr. SchiffmanStein agreed not to use or disclose any confidential information of IAC or its affiliates.
The Company's equity awards for senior executive officers generally include a so-called "double-trigger" change of control provision, which provides for the acceleration of the vesting of outstanding equity awards in connection with a change of control only when an award holder suffers an involuntary termination of employment during the two (2) year period following such change of control. The Committee believes that providing for the acceleration of the vesting of equity awards after an involuntary termination will assist in the retention of our executive officers through a change of control transaction. For purposes of this discussion and the discussion below under the heading "Severance," we use the term "involuntary termination" to mean both a termination by the Company without "cause" and a resignation by the executive for "good reason" or similar construct.
We generally provide executive officers with some amount of salary continuation and the acceleration of the vesting of some equity awards in the event of an involuntary termination of employment. Because we tend to promote our executive officers from within, after competence and commitment have generally been established, we believe that the likelihood of the vesting of equity awards being accelerated is typically low, and yet we believe that through providing this benefit we increase the retentive effect of our equity program, which serves as our most important retention incentive. The Company generally does not provide for the acceleration of the vesting of equity awards in the event an executive voluntarily resigns from the Company.
General. We provide Mr.Messrs. Diller and Levin with various non-cash benefits as part of histheir overall compensation program.packages. Under certain limited circumstances, other executive officers have also received non-cash benefits. The value of these benefits is calculated under appropriate rules and is taken into account as a component of compensation when establishing overall compensation levels. The value of all non-cash
value of all non-cash benefits is reported under the "AllAll Other Compensation"Compensation column in the Summary Compensation Table on page 2927 pursuant to applicable SEC rules. Our executive officers do not participate in any deferred compensation or retirement programs other than the Company's 401(k) plan. Other than a tax gross-up onrelated to certain relocation benefits provided to Mr. Schiffman in connection with his moving to the New York City metropolitan area to assume the role of Executive Vice President and Chief Financial Officer, we did not gross-up any benefits provided to any executive officer in 2016.2018. Other than those described specifically below, our executive officers do not partake in any benefit programs, or receive any significant perquisites, distinct from the Company's other employees.
Mr. Diller. Pursuant to Company policy, Mr. Diller is required to travel, both for business and personal purposes, on corporate aircraft. In addition to serving general security interests, this means of travel permits him to travel non-stop and without delay, to remain in contact with the Company while he is traveling, to change his plans quickly in the event Company business requires and to conduct confidential Company business while flying, be it telephonically, by e-mail or in person. These interests are similarly furthered on both business and personal flights, as Mr. Diller typically provides his services to the Company while traveling in either case. Nonetheless, the incremental cost to the Company of his travel for personal purposes is reflected as compensation to Mr. Diller from the Company, and is taken into account in establishing his overall compensation package. ForIn certain years and for certain personal use of Company-owned aircraft, Mr. Diller reimburseshas reimbursed the Company at the maximum rate allowable under applicable rules of the Federal Aviation Administration. See the disclosure under the caption "Relationships Involving Significant Stockholders, Named Executives and Directors—Relationships Involving Mr. Diller" on page 45.
Additionally, the Company provides Mr. Diller with access to certain automobiles for business and personal use. We also provide certain Company-owned office space and IT equipment for use by certain individuals who work for Mr. Diller personally. These uses are valued by the Company at their incremental cost to the Company or, in the case of the use of office space (where there is no discernible incremental cost), at the cost used for internal allocations of office space for corporate purposes.
Mr. Levin. Pursuant to Company policy, Mr. Levin is encouraged to travel, both for business and personal purposes, on corporate aircraft for the same reasons as set forth above for Mr. Diller. The incremental cost to the Company of his travel for personal purposes is reflected as compensation to Mr. Levin from the Company, and is taken into account in establishing his overall compensation package.
Mr. Kaufman. Mr. Kaufman is entitled to use corporate aircraft chartered by the Company for a certain amount of personal travel annually. However, Mr. Kaufman reimburses the Company for the Company's incremental cost of such travel and/or pays the relevant third parties directly, and therefore the value of such travel is not treated as compensation to Mr. Kaufman. Typically, Mr. Kaufman's spouse accompanies him on personal and business flights at no incremental cost to the Company.
Mr. Schiffman. As part of the agreement for Mr. Schiffman to move to the New York City metropolitan area to accept the position of Executive Vice President and Chief Financial Officer, the Company agreed to compensate Mr. Schiffman for various costs of relocating from Austin, Texas, including airfare forTexas. The majority of these costs were incurred during 2016; however certain trips between the New York City metropolitan area and Austin, Texas until his family joined him in the New York City metropolitan area during the third quarter of 2016, the payment of certain brokerage fees in connection with the disposition of his home,housing costs of temporary housing, moving expenses and associated tax gross-ups.gross-ups were incurred during 2017 and 2018. We do not expect these amounts to be recurring, and though the applicable compensation disclosure rules require us to disclose the value of these items as compensation, we did not take them into account in determining the other components of Mr. Schiffman's compensation, as we view them as a cost to the Company in facilitating Mr. Schiffman's move to the New York City metropolitan area.
Whenever possible, we endeavor to structure our compensation program so that the compensation we pay is deductible by the Company for federal income tax purposes. Because of the use of performance conditions in connection with our equity awards and annual bonuses, and the fact that no salaries are in excess of one million dollars, these three components are generally deductible by the Company. However, under applicable rulesUnder Section162(m) of the Internal Revenue Service,Code of 1986, as amended (the "Code"), compensation paid to certain current and former NEOs in excess of $1 million is generally not tax deductible. Prior to the personal use of corporate aircraft leads to a disallowanceenactment of the deductionTax Cuts and Jobs Act of 2017 (the "Tax Act"), this limitation did not apply to compensation paid to the chief financial officer or to compensation based on achievement of pre-determined objective performance goals if certain airplane and related costs.requirements were met. Historically, the Committee has structured certain compensation with the intention of complying with
the performance-based compensation exemption from Section 162(m) of the Code. A number of requirements must be met for particular compensation to qualify, however, and there can be no assurance that any compensation awarded would be fully deductible under all circumstances. In addition, in appropriate circumstances the Committee may approve elements of compensation for certain executive officers that are not fully deductible.
The exemption from the deduction limit for performance-based compensation set forth in Section 162(m) of the Code has been repealed, effective for taxable years beginning after December 31, 2017, such that compensation in excess of $1 million paid to our current named executive officers, including our Chief Financial Officer, and certain former named executive officers, will not be deductible unless it qualifies for transition relief applicable to certain arrangements in place as of November 2, 2017. Despite the Committee's efforts to structure certain compensation to be exempt from Section 162(m) of the Code and therefore not subject to its deduction limits, there can be no assurance that this compensation will be fully deductible because of ambiguities and uncertainties as to the application and interpretation of Section 162(m) of the Code and the regulations issued thereunder, including the uncertain scope of the transition relief under the legislation repealing the exemption from the deduction limit set both in Section 162(m) of the Code. In addition, the Committee reserves the right to modify compensation that was initially intended to be exempt from Section 162(m) of the Code if it determines that such modifications are consistent with the Company's best interests.
COMPENSATION AND HUMAN RESPOURCES COMMITTEE REPORT
The Compensation and Human Resources Committee has reviewed the Compensation Discussion and Analysis and discussed it with Company management. In reliance on its review and the discussions referred to above, the Compensation and Human Resources Committee recommended to the Board that the Compensation Discussion and Analysis be included in IAC's 20162018 Annual Report on Form 10-K and this proxy statement.
Members of the Compensation and Human Resources Committee
Bonnie S. Hammer (Chairperson)
David Rosenblatt
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The membership of the Compensation and Human Resources Committee consisted of Ms. Hammer and Mr. Rosenblatt during 2016.2018. Neither of them has ever been an officer or employee of IAC at any time during their respective service on the committee.
The Executive Compensation section of this proxy statement sets forth certain information regarding total compensation earned by our named executives in 2016,2018, as well as Company equity awards madegranted to our named executives in 2016,2018, Company equity awards held by our named executives on December 31, 20162018 and the dollar value realized by our named executives upon the vesting and exercise of equity awards during 2016.2018.
Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($)(1) | Option Awards ($)(2) | All Other Compensation ($)(3) | Total ($) | Year | Salary ($) | Bonus ($) | Stock Awards ($)(1) | Option Awards ($)(2) | All Other Compensation ($)(3) | Total ($) | ||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Barry Diller | 2016 | $ | 500,000 | $ | 2,000,000 | — | — | $ | 1,184,234 | $ | 3,684,234 | 2018 | $ | 500,000 | $ | 3,000,000 | — | — | $ | 503,245 | $ | 4,003,245 | ||||||||||||||||||||||
Chairman and Senior | 2015 | $ | 500,000 | — | — | $ | 14,220,000 | $ | 1,136,025 | $ | 15,856,025 | 2017 | $ | 500,000 | $ | 2,000,000 | — | — | $ | 683,658 | $ | 3,183,658 | ||||||||||||||||||||||
Executive | 2014 | $ | 500,000 | $ | 2,200,000 | — | — | $ | 967,978 | $ | 3,667,978 | 2016 | $ | 500,000 | $ | 2,000,000 | — | — | $ | 1,184,234 | $ | 3,684,234 | ||||||||||||||||||||||
Joseph Levin | 2016 | $ | 1,000,000 | $ | 2,500,000 | $ | 4,037,000 | $ | 2,580,000 | $ | 358,980 | $ | 10,475,980 | 2018 | $ | 1,000,000 | $ | 5,000,000 | — | — | $ | 315,554 | $ | 6,315,554 | ||||||||||||||||||||
Chief Executive Officer | 2015 | $ | 1,000,000 | $ | 1,250,000 | — | $ | 8,066,000 | (4) | $ | 340,622 | $ | 10,656,622 | 2017 | $ | 1,000,000 | $ | 4,000,000 | — | $ | 7,662,000 | $ | 378,729 | $ | 13,040,729 | |||||||||||||||||||
(since June 2015) | ||||||||||||||||||||||||||||||||||||||||||||
Victor A. Kaufman | 2016 | $ | 100,000 | $ | 100,000 | $ | 349,968 | — | $ | 16,796 | $ | 566,764 | ||||||||||||||||||||||||||||||||
Vice Chairman | 2015 | $ | 100,000 | $ | 100,000 | $ | 349,972 | — | $ | 16,796 | $ | 566,768 | ||||||||||||||||||||||||||||||||
2014 | $ | 100,000 | $ | 100,000 | $ | 349,947 | — | $ | 18,083 | $ | 568,030 | 2016 | $ | 1,000,000 | $ | 2,500,000 | $ | 4,037,000 | $ | 2,580,000 | $ | 358,980 | $ | 10,475,980 | ||||||||||||||||||||
Glenn H. Schiffman | 2016 | $ | 420,000 | $ | 1,750,000 | — | $ | 2,942,000 | $ | 225,586 | $ | 5,337,586 | ||||||||||||||||||||||||||||||||
Glenn H. Schiffman(4) | 2018 | $ | 600,000 | $ | 3,500,000 | — | $ | 4,315,200 | $ | 149,612 | $ | 8,564,812 | ||||||||||||||||||||||||||||||||
Executive Vice President and | 2017 | $ | 600,000 | $ | 2,500,000 | — | $ | 3,831,000 | $ | 46,059 | $ | 6,977,059 | ||||||||||||||||||||||||||||||||
Chief Financial Officer | 2016 | $ | 420,000 | $ | 1,750,000 | — | $ | 2,942,000 | $ | 225,586 | $ | 5,337,586 | ||||||||||||||||||||||||||||||||
(since April 2016) | ||||||||||||||||||||||||||||||||||||||||||||
Mark Stein | 2016 | $ | 550,000 | $ | 1,000,000 | — | $ | 1,935,000 | $ | 7,950 | $ | 3,492,950 | 2018 | $ | 550,000 | $ | 2,000,000 | — | — | $ | 8,250 | $ | 2,558,250 | |||||||||||||||||||||
Executive Vice President and | 2017 | $ | 550,000 | $ | 1,500,000 | — | $ | 3,831,000 | $ | 24,213 | $ | 5,905,213 | ||||||||||||||||||||||||||||||||
Chief Strategy Officer | 2016 | $ | 550,000 | $ | 1,000,000 | — | $ | 1,935,000 | $ | 7,950 | $ | 3,492,950 | ||||||||||||||||||||||||||||||||
(since January 2016) | ||||||||||||||||||||||||||||||||||||||||||||
Gregg Winiarski | 2016 | $ | 500,000 | $ | 1,250,000 | — | $ | 1,290,000 | $ | 7,950 | $ | 3,047,950 | 2018 | $ | 500,000 | $ | 2,000,000 | — | — | $ | 8,250 | $ | 2,508,250 | |||||||||||||||||||||
Executive Vice | 2015 | $ | 500,000 | $ | 1,500,000 | — | $ | 1,476,000 | $ | 7,950 | $ | 3,483,950 | 2017 | $ | 500,000 | $ | 1,750,000 | — | $ | 2,554,000 | $ | 8,100 | $ | 4,812,100 | ||||||||||||||||||||
President, General | 2014 | $ | 500,000 | $ | 1,000,000 | — | $ | 2,447,500 | $ | 7,800 | $ | 3,955,300 | ||||||||||||||||||||||||||||||||
Counsel and Secretary | ||||||||||||||||||||||||||||||||||||||||||||
President and General | 2016 | $ | 500,000 | $ | 1,250,000 | — | $ | 1,290,000 | $ | 7,950 | $ | 3,047,950 | ||||||||||||||||||||||||||||||||
Counsel |
| Barry Diller | Joseph Levin | Victor A. Kaufman | Glenn H. Schiffman | Mark Stein | Gregg Winiarski | Barry Diller | Joseph Levin | Glenn H. Schiffman | Mark Stein | Gregg Winiarski | ||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Personal use of Company aircraft(a) | $ | 1,113,542 | $ | 351,030 | — | — | — | — | $ | 433,793 | $ | 282,257 | $ | 52,624 | — | — | |||||||||||||||||||
Parking garage | — | — | $ | 10,796 | — | — | — | ||||||||||||||||||||||||||||
Taxable gift | — | $ | 25,047 | — | — | — | |||||||||||||||||||||||||||||
Relocation costs and related tax reimbursements(b) | — | — | — | $ | 225,586 | — | — | — | — | $ | 88,738 | — | — | ||||||||||||||||||||||
401(k) plan Company match | $ | 7,950 | $ | 7,950 | $ | 6,000 | — | $ | 7,950 | $ | 7,950 | $ | 8,250 | $ | 8,250 | $ | 8,250 | $ | 8,250 | $ | 8,250 | ||||||||||||||
Miscellaneous(c) | $ | 62,742 | — | — | — | — | — | $ | 61,202 | — | — | — | — | ||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
$ | 1,184,234 | $ | 358,980 | $ | 16,796 | $ | 225,586 | $ | 7,950 | $ | 7,950 | $ | 503,245 | $ | 315,554 | $ | 149,612 | $ | 8,250 | $ | 8,250 | ||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
of costs relating to the use by such individuals of the Company's information technology technical support and certain communications equipment and (iv) costs incurred for Mr. Diller's personal use of other car services.equipment.
Grants of Plan-Based Awards in 20162018
The table below provides information regarding all IAC stock options and RSUs granted to our named executives in 2016.2018. No IAC RSUs were granted to our named executives in 2018.
Name | Grant Date | All Other Stock Awards: Number of Shares of Stock or Units (#) | All Other Option Awards: Number of Securities Underlying Options (#)(1) | Exercise or Base Price of Option Awards ($/Sh)(2) | Grant Date Fair Value of Stock and Option Awards ($) | Grant Date | All Other Option Awards: Number of Securities Underlying Options (#)(1) | Exercise or Base Price of Option Awards ($/Sh)(2) | Grant Date Fair Value of Stock and Option Awards ($)(3) | ||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Barry Diller | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||
Joseph Levin | 2/10/16 | — | 200,000 | $ | 40.37 | $ | 2,580,000 | (3) | — | — | — | — | |||||||||||||||||
2/10/16 | 100,000 | (4) | — | — | $ | 4,037,000 | (5) | ||||||||||||||||||||||
Victor A. Kaufman | 2/10/16 | 8,669 | (4) | — | — | $ | 349,968 | (5) | |||||||||||||||||||||
Glenn H. Schiffman | 4/7/2016 | — | 200,000 | $ | 45.78 | $ | 2,942,000 | (3) | 3/2/18 | 80,000 | $ | 152.53 | $ | 4,315,200 | |||||||||||||||
Mark Stein | 2/10/16 | — | 150,000 | $ | 40.37 | $ | 1,935,000 | (3) | — | — | — | — | |||||||||||||||||
Gregg Winiarski | 2/10/16 | — | 100,000 | $ | 40.37 | $ | 1,290,000 | (3) | — | — | — | — |
Named Executive | Expected Volatility | Risk-Free Interest Rate | Expected Term | Dividend Yield | ||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Joseph Levin | 30.27 | % | 1.317 | % | 6.07 years | — | ||||||
Glenn H. Schiffman | 30.18 | % | 1.333 | % | 6.16 years | — | ||||||
Mark Stein | 30.27 | % | 1.317 | % | 6.07 years | — | ||||||
Gregg Winiarski | 30.27 | % | 1.317 | % | 6.07 years | — |
Outstanding Equity Awards at 20162018 Fiscal Year-End
The table below provides information regarding IAC equity awards held by our named executives on December 31, 2016.2018. The market value of all RSU awards is based on the closing price of IAC common stock on December 30, 201631, 2018 ($64.79)183.04).
| Option Awards | Stock Awards(1) | |||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Name | Number of securities underlying unexercised options (#) | Number of securities underlying unexercised options (#) | Option exercise price ($) | Option expiration date | Number of shares or units of stock that have not vested (#) | Market value of shares or units of stock that have not vested ($) | |||||||||||||
| (Exercisable) | (Unexercisable) | | | | | |||||||||||||
Barry Diller | 300,000 | — | $ | 31.89 | 4/20/21 | — | — | ||||||||||||
375,000 | (2) | 125,000 | (2) | $ | 67.45 | 3/29/25 | — | — | |||||||||||
375,000 | (2) | 125,000 | (2) | $ | 84.31 | 3/29/25 | — | — | |||||||||||
Joseph Levin | 100,000 | — | $ | 60.00 | 2/2/22 | — | — | ||||||||||||
112,500 | — | $ | 45.78 | 2/2/22 | — | — | |||||||||||||
100,000 | — | $ | 66.30 | 8/1/24 | — | — | |||||||||||||
300,000 | (3) | 100,000 | (3) | $ | 77.26 | 6/24/25 | — | — | |||||||||||
100,000 | (2) | 100,000 | (2) | $ | 40.37 | 2/10/26 | — | — | |||||||||||
75,000 | (2) | 225,000 | (2) | $ | 76.00 | 2/14/27 | — | — | |||||||||||
— | — | — | — | 120,834 | $ | 22,117,455 | |||||||||||||
Glenn H. Schiffman | 95,000 | (2) | 100,000 | (2) | $ | 45.78 | 4/7/26 | — | — | ||||||||||
37,500 | (2) | 112,500 | (2) | $ | 76.00 | 2/14/27 | — | — | |||||||||||
— | 80,000 | (4) | $ | 152.53 | 3/2/28 | — | — | ||||||||||||
Mark Stein | 100,000 | — | $ | 60.00 | 2/2/22 | — | — | ||||||||||||
150,000 | (5) | 50,000 | (5) | $ | 70.88 | 9/17/25 | — | — | |||||||||||
75,000 | (2) | 75,000 | (2) | $ | 40.37 | 2/10/26 | — | — | |||||||||||
37,500 | (2) | 112,500 | (2) | $ | 76.00 | 2/14/27 | — | — | |||||||||||
— | — | — | — | 12,500 | $ | 2,288,000 | |||||||||||||
Gregg Winiarski | 175,000 | — | $ | 45.78 | 2/2/22 | — | — | ||||||||||||
44,005 | — | $ | 47.06 | 5/3/23 | — | — | |||||||||||||
125,000 | — | $ | 71.55 | 3/28/24 | — | — | |||||||||||||
75,000 | (2) | 25,000 | (2) | $ | 61.68 | 2/11/25 | — | — | |||||||||||
50,000 | (2) | 50,000 | (2) | $ | 40.37 | 2/10/26 | — | — | |||||||||||
25,000 | (2) | 75,000 | (2) | $ | 76.00 | 2/14/27 | — | — |
| Option Awards | Stock Awards(1) | |||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Name | Number of securities underlying unexercised options (#) | Number of securities underlying unexercised options (#) | Option exercise price ($) | Option expiration date | Number of shares or units of stock that have not vested (#) | Market value of shares or units of stock that have not vested ($) | |||||||||||||
| (Exercisable) | (Unexercisable) | | | | | |||||||||||||
Barry Diller | 300,000 | — | $ | 31.89 | 4/20/21 | — | — | ||||||||||||
125,000 | (2) | 375,000 | (2) | $ | 67.45 | 3/29/25 | — | — | |||||||||||
125,000 | (2) | 375,000 | (2) | $ | 84.31 | 3/29/25 | — | — | |||||||||||
Joseph Levin | 250,000 | — | $ | 19.03 | 12/17/19 | — | — | ||||||||||||
100,000 | — | $ | 60.00 | 2/2/22 | — | — | |||||||||||||
112,500 | — | $ | 45.78 | 2/2/22 | — | — | |||||||||||||
50,000 | (2) | 50,000 | (2) | $ | 66.30 | 8/1/24 | — | — | |||||||||||
50,000 | (3) | 350,000 | (3) | $ | 77.26 | 6/24/25 | — | — | |||||||||||
— | 200,000 | (2) | $ | 40.37 | 2/10/26 | — | — | ||||||||||||
— | — | — | — | 330,432 | $ | 21,408,689 | |||||||||||||
Victor A. Kaufman | 200,000 | — | $ | 30.90 | 3/30/21 | — | — | ||||||||||||
— | — | — | — | 14,215 | $ | 920,991 | |||||||||||||
Glenn H. Schiffman | — | 200,000 | (2) | $ | 45.78 | 4/7/26 | — | — | |||||||||||
Mark Stein | 14,323 | — | $ | 20.05 | 1/31/18 | — | — | ||||||||||||
75,000 | — | $ | 16.28 | 12/17/18 | — | — | |||||||||||||
100,000 | — | $ | 60.00 | 2/2/22 | — | — | |||||||||||||
87,500 | — | $ | 45.78 | 2/2/22 | — | — | |||||||||||||
25,000 | (4) | 175,000 | (4) | $ | 70.88 | 9/17/25 | — | — | |||||||||||
— | 150,000 | (2) | $ | 40.37 | 2/10/26 | — | — | ||||||||||||
— | — | — | — | 94,346 | $ | 6,112,677 | |||||||||||||
Gregg Winiarski | 50,000 | — | $ | 21.60 | 2/16/20 | — | — | ||||||||||||
200,000 | — | $ | 30.90 | 3/30/21 | — | — | |||||||||||||
175,000 | — | $ | 45.78 | 2/2/22 | — | — | |||||||||||||
33,003 | (2) | 11,002 | (2) | $ | 47.06 | 5/3/23 | — | — | |||||||||||
62,500 | (2) | 62,500 | (2) | $ | 71.55 | 3/28/24 | — | — | |||||||||||
25,000 | (2) | 75,000 | (2) | $ | 61.68 | 2/11/25 | — | — | |||||||||||
— | 100,000 | (2) | $ | 40.37 | 2/10/26 | — | — | ||||||||||||
— | — | — | — | 5,313 | $ | 344,229 |
| | Market Value of Unvested RSUs as of 12/31/16 ($) | | | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Number of Unvested RSUs as of 12/31/16 (#) | | | | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Vesting Schedule (#) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The table below provides information regarding the number of shares acquired by our named executives upon the exercise of IAC stock options
Estimated Potential Payments Upon Termination or Change in Control of IAC Overview Certain of our employment agreements, equity award agreements and/or omnibus stock and annual incentive plans entitle our named executives to continued base salary payments, the acceleration of the vesting of IAC equity awards and/or extended post-termination exercise periods for IAC stock options upon certain terminations of employment (including certain terminations during specified periods following a change in control of IAC). Certain amounts that would have become payable to our named executives upon the events described above (as and if applicable), assuming that the relevant event occurred on December 31,
Mr. Diller. No payments would have been made to Mr. Levin. Upon a termination without cause (and other than by reason of death or disability) or resignation for good reason (a "Qualifying Termination") on December 31,
In addition, upon a termination of Mr. Levin's employment due to his death on December 31, 2018, pursuant to the terms of his employment agreement: (i) his designated beneficiary would have been Mr.
For Mr. Schiffman, "good reason" Upon a
In addition, under the Equity and Bonus Compensation Agreement, dated August 24, 1995, between the Company and Mr. Diller, we agreed that to the extent any payment or distribution by the Company to or for the benefit of Mr. Diller (whether under the terms of the related agreement or otherwise) would be subject to the excise tax imposed by §4999 of the Code, or any interest or penalties are incurred by Mr. Diller with respect to such excise tax, then Mr. Diller would be entitled to a gross-up payment covering the excise taxes and related interest and penalties. Given the payments Mr. Diller would have received upon an assumed change in control of IAC on December 31, 2018, the Company does not believe that any excise tax would be imposed or that any gross-up would be required.
In accordance with Item 402(u) of Regulation S-K of the We last identified our median employee in the For the fiscal year ended December 31, As discussed above, we are using the median employee identified in our 2018 Proxy Statement to determine our Pay Ratio disclosure. In making our determination of the median employee in our 2018 Proxy Statement, we first identified our total number of employees as of October 1, 2017 (6,795 in total, 5,362 of which
The 2019 Pay Ratio disclosure set forth above is a reasonable estimate calculated in a manner consistent with applicable SEC rules, based on the methodologies and assumptions described above. SEC rules for identifying the median employee and determining the related pay ratio permit companies to use a wide range of methodologies, estimates and assumptions. As a result, the pay ratios reported by
Non-Employee Director Compensation Arrangements. The Nominating Committee has primary responsibility for establishing non-employee director compensation arrangements, which have been designed to provide competitive compensation necessary to attract and retain high quality non-employee directors and to encourage ownership of In addition, these arrangements also provided that each non-employee director receive a grant of IAC RSUs with a dollar value of $250,000 upon his or her initial election to the Board and annually thereafter upon re-election on the date of IAC's annual meeting of stockholders, the terms of which provide for: (i) vesting in three equal installments commencing on the anniversary of the grant date, (ii) cancellation and forfeiture of unvested RSUs in their entirety upon termination of Deferred Compensation Plan for Non-Employee Directors. Under IAC's Deferred Compensation Plan for Non-Employee Directors, non-employee directors may defer all or a portion of their Board and Board committee fees. Eligible directors who defer all or any portion of these fees can elect to have such deferred fees applied to the purchase of share units, representing the number of shares of IAC common stock that could have been purchased on the relevant date, or credited to a cash fund. If any dividends are paid on IAC common stock, dividend equivalents will be credited on the share units. The cash fund will be credited with deemed interest at an annual rate equal to the weighted average prime lending rate of JPMorgan Chase & Co. After a director ceases to be a member of the Board, he or she will receive: (i) with respect to share units,
2018 Employee Director Compensation. Compensation earned for services performed by one of our employee directors in 2018 is as follows:
Equity Compensation Plan Information Securities Authorized for Issuance Under Equity Compensation Plans. The following table summarizes information, as of December 31, 2018, regarding IAC equity compensation plans pursuant to which grants of IAC stock options, IAC RSUs or other rights to acquire shares of IAC common stock may be made from time to time.
The number of shares ultimately needed to settle equity awards denominated in shares of our subsidiaries can vary from the estimated numbers disclosed above as a result of both movements in our stock price and determinations of the fair value of the relevant subsidiaries that differ from our estimated determinations of the fair value of such subsidiaries as of December 31, 2018.
The following table presents, as of April Unless otherwise indicated, the beneficial owners listed below may be contacted at IAC's corporate headquarters located at 555 West 18th Street, New York, New York 10011. For each listed person, the number of shares of IAC common stock and percent of such class listed includes vested IAC stock options and assumes the conversion
parent holding company of MS Management, which beneficially owns the IAC holdings listed in the table above in its capacity as an investment
Section 16(a) of the Exchange Act requires the Company's directors,
Review of Related Person Transactions The Audit Committee has a formal, written policy that requires an appropriate review of all related person transactions by the Audit Committee, as required by Marketplace Rules governing conflict of interest transactions. For purposes of this policy, as amended, consistent with the Marketplace Rules, the terms "related person" and "transaction" are determined by reference to Item 404(a) of Regulation S-K under the Securities Act of 1933, as amended ("Item 404"). During Relationships Involving Significant Stockholders, Named Executives and Directors Relationships Involving Mr. Diller. Pursuant to an amended and restated governance agreement between IAC and Mr. Diller, for so long as Mr. Diller serves as IAC's Chairman and Senior Executive, he currently generally has the right to consent to limited matters in the event that IAC's ratio of total debt to EBITDA (as defined in the governance agreement) equals or exceeds four to one over a continuous twelve-month period.
Relationships Involving Other Directors. In June 2010, Mr. Bronfman was part of a trial in the Trial Court in Paris involving six other individuals, including the former Chief Executive Officer, Chief Financial Officer and Chief Operating Officer of Vivendi Universal. The other individuals faced various criminal charges and civil claims relating to Vivendi, including Vivendi's financial disclosures, the appropriateness of executive compensation and trading in Vivendi stock. Mr. Bronfman previously served as the Vice Chairman of Vivendi and faced a charge and claims relating to certain trading in Vivendi stock in January 2002. At the trial, the public prosecutor and the lead civil claimant both took the position that Mr. Bronfman should be acquitted. In January 2011, the court found Mr. Bronfman guilty of the charge relating to his trading in Vivendi stock, found him not liable to the civil claimants and imposed a fine of 5 million euros and a suspended sentence of fifteen months. Mr. Bronfman appealed the Trial Court decision to the Paris Court of Appeal. In November 2013, Mr. Bronfman participated in a re-trial before a new judicial panel as part of his appeal of the Paris Trial Court's 2011 ruling. In May 2014, the new judicial panel rendered its decision, affirming the Paris Trial Court's finding that Mr. Bronfman was guilty of the charge, but stated that its finding would appear only in French judicial records (and not in Mr. Bronfman's public record), removed the suspended sentence imposed by the Paris Trial Court and suspended 2.5 million euros of the original fine of 5 million euros. The new judicial panel affirmed the Paris Trial Court's finding that Mr. Bronfman was not liable to the civil claimants. Mr. Bronfman appealed the verdict. On April 20, Relationships Involving Overview. Since the completion of the spin-off of Expedia in August 2005 (the "Expedia Spin-Off"), IAC and Expedia (now known as Expedia Group, Inc. ("Expedia Group")) have been related parties since Cost Sharing Arrangements. Mr. Diller currently serves as Chairman and Senior Executive of both IAC and Aircraft Arrangements. Each of IAC and Expedia Group currently has a 50% ownership interest in two aircraft that may be used by both companies (the "Aircraft"). In the event Mr. Diller ceases to serve as Chairman of either IAC or Expedia Group, each of IAC and Expedia Group will have a put right (to the other party) with respect to its owned interest in the aircraft that it does not primarily use (with such determination to be based on relative usage over the twelve months preceding such event), in each case, at fair market value for the relevant aircraft. Members of the flight crew for the Aircraft are employed by an entity in which each of IAC and Expedia Group has a 50% ownership interest. IAC and Expedia In February 2019, an aircraft previously jointly-owned by both companies was sold, with each company receiving 50% of the $7.5 million in net proceeds. On April Commercial Agreements. In connection with and following the Expedia Spin-Off, certain IAC businesses entered into commercial agreements with certain Expedia
Upon written request to the Corporate Secretary, IAC/InterActiveCorp, 555 West 18th Street, New York, New York 10011, IAC will provide without charge to each person solicited a printed copy of IAC's
Eligible stockholders who intend to have a proposal considered for inclusion in IAC's proxy materials for presentation at the The SEC has adopted rules that permit companies and intermediaries (such as brokers) to send one Notice or one set of Once you have received notice that your broker or IAC will be householding your materials, householding will continue until you are notified otherwise or you revoke your consent. You may request a separate Notice or set of printed proxy materials by sending a written request to Investor Relations, IAC/InterActiveCorp, 555 West 18th Street, New York, New York 10011, by calling 1.212.314.7400 or by e-mailingir@iac.com. Upon request, IAC undertakes to deliver such materials promptly. If at any time: (i) you no longer wish to participate in householding and would prefer to receive a separate Notice or set of our printed proxy materials, as applicable, or (ii) you and another stockholder sharing the same address wish to participate in householding and prefer to receive one Notice or set of our printed proxy materials, as applicable, please notify your broker if you hold your shares in street name or IAC if you are a stockholder of record. You can notify us by sending a written request to Investor Relations, IAC/InterActiveCorp, 555 West 18th Street, New York, New York 10011, by calling 1.212.314.7400 or by e-mailingir@iac.com.
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting to be held on June The New York, New York
VOTE BY INTERNET Before The Meeting - Go to www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. IAC/INTERACTIVECORP ATTN: JOANNE HAWKINS 555 WEST 18TH STREET NEW YORK, NY 10011 During The Meeting - Go to www.virtualshareholdermeeting.com/
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com.
VOTE BY INTERNET Before The Meeting - Go to www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. IAC/INTERACTIVECORP ATTN: JOANNE HAWKINS 555 WEST 18TH STREET NEW YORK, NY 10011 During The Meeting - Go to www.virtualshareholdermeeting.com/
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com.
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