On March 8, 2021,February 17, 2023, our compensation committee reviewed the Company’s performance against the pre-established metrics for fiscal year 2020.2022. The compensation committee determined that for fiscal year 2020,2022, EBITDA achieved $411.44$333.34 million or 21.90%200% payout incentive, FCF achieved $119.34 million or 230% payout incentive and FCFReported SaaS Net Revenue achieved $231.82$216.35 million or 165.7%7.5% of payout incentive, resulting in an overall achievementa total average weighted payout of 93.8%111.5%. There is not an Individual Performanceindividual performance component for the OPP. The resulting incentive payments for 20202022 OPP to NEOs are detailed in the table below:
Named Executive Officers | | | 20202022 OPP
Paid on
March 26,
2021
($) |
Joseph A. Walsh | | | $966,140 1,182,904 |
Paul D. Rouse | | | $332,554 407,166 |
Gordon Henry | | | $266,043 331,713 |
James McCusker | | | $266,043 331,713 |
John Wholey | | | $251,263
|
Debra Ryan
| | | N/A 331,713 |
Thryv Holdings, Inc. | 36 | 2023 Proxy Statement |
Long-Term Equity Incentive Compensation
Equity Awards in Fiscal Year 20202022
In fiscal year 2022, we granted our NEOs both time-vesting RSUs and PSUs. We believe that the use of PSUs and RSUs serves to retain the executives necessary to achieve our strategic plans and to motivate them to drive sustained increases in stockholder value.
NEO | Total Grant Date Value | PSUs (# of units) | RSUs (# of units) |
Joseph A. Walsh | $3,000,000 | 74,742 | 40,245 |
Paul D. Rouse | $2,500,000 | 62,285 | 33,538 |
Gordon Henry | $1,750,000 | 43,600 | 23,476 |
James McCusker | $1,750,000 | 43,600 | 23,476 |
John Wholey | $1,750,000 | 43,600 | 23,476 |
Time-vesting RSUs
In general, the RSUs, which represented 35% of the total grant, vest ratably, annually on each of January 3, 2023, 2024 and 2025. For Mr. Walsh, the RSUs vest over three years with the first one-third vesting on January 3, 2023 and 1/36th of the RSUs vesting on the 3rd of each month thereafter over the following 24 months.
PSUs
The PSUs, which represent 65% of the total grant date value, will vest, to the extent earned, at the conclusion of a three-year performance period, which runs from January 1, 2022 through December 31, 2024. The earnout of the PSUs is governed by the following performance measures, weights and funding formula:
Measure | Weight | Threshold | Target | Maximum |
| | Performance (as a % of Target) |
Relative TSR (“rTSR”) | 30% | 40th Percentile | 50th Percentile | 65th Percentile |
Absolute TSR (“aTSR”) | 30% | 8.0% | 10.0% | 12.5% |
SaaS Revenue CAGR | 40% | 20% | 26% | 32% |
| | Payout (as a % of Target) |
Payout | N/A | 50% | 100% | 150% |
Thryv Holdings, Inc. | 37 | 2023 Proxy Statement |
Performance against each of the aforementioned measures and the extent to which the PSUs have been earned and are eligible to vest and be settled will be assessed early in 2025 following the conclusion of the performance period. PSUs may be earned between 0% and 150% of the target award, depending on the Company’s performance relative to each of the performance measures. Performance below the threshold level of performance for each of the measures will result in no PSUs being earned relative to that measure. For performance achievement between threshold and target or between target and maximum, the percentage of PSUs that would vest under each measure will be subject to straight line interpolation. For performance achievement at or above the maximum level of performance achievement set forth above, a maximum of 150% of the PSUs may vest under each measure.
For the rTSR measure, the PSUs will be eligible to vest based on the Company’s TSR relative to the following performance peer group over the three-year performance period. The peer group for the 2022 rTSR PSUs consists of 21 companies with which we compete for products and services, and which are listed below:
Alteryx, Inc. | Blackbaud, Inc. | Box, Inc. | Constellation Software Inc, | Coupa Software Incorporated |
Datadog, Inc. | Digital Turbine, Inc. | Domo, Inc. | Dynatrace, Inc. | EngageSmart, Inc. |
EverCommerce Inc. | Five9, Inc. | GoDaddy, Inc. | HubSpot, Inc. | Informatica Inc. |
Lightspeed Commerce Inc. | Pegasystems Inc. | Sprout Social, Inc. | Squarespace, Inc. | Verint Systems Inc. |
Wix.com Ltd. | | | | |
Stock Ownership and Retention Guidelines
In August 2022, the compensation committee determinedadopted new stock ownership guidelines and retention requirements pursuant to which all NEOs, members of the Executive Committee, vice presidents and non-employee directors are expected to own common stock equal to the following amounts within five years:
Title | Ownership Threshold |
Chief Executive Officer | Six Times Base Salary |
Executive Committee | Three Times Base Salary |
Vice Presidents | One Times Base Salary |
Non-Employee Director | Three Times Annual Retainer |
Until such time as a participant has met the above guidelines, that ourparticipant may only sell a maximum of 50% of any compensatory equity awarded beginning in 2022.
The compensation committee regularly monitors compliance with these guidelines, and as of April 27, 2023, the majority of NEOs alreadywere in compliance with or making steady progress towards their respective ownership guideline. The guidelines may be amended from time to time in the discretion of the compensation committee.
Risk Assessment of Compensation Policies
During 2022 and early 2023, management reviewed existing incentive compensation programs in which NEOs participate in order to confirm that such programs do not create risks that are reasonably likely to have a significant equity stakematerial adverse effect on the Company. Lyons Benenson, the Company’s external compensation consultant, also reviewed the Company’s 2023 compensation philosophy, policies and program in order to conduct a risk assessment of the Company’s compensation arrangements. Based on the information furnished by management and Lyons Benenson’s understanding of the current program and arrangements, Lyons Benenson concluded that there is no undue risk in the Company from past non-qualified stock option awards, noneprogram.
Thryv Holdings, Inc. | 38 | 2023 Proxy Statement |
Option Repricing
On November 23, 2020Anti-Hedging and Anti-Pledging Policy
Under Thryv’s Insider Trading Policy, members of the board of directors and compensation committee, and on November 24, 2020, Mudrick Capital Management, L.P., the stockholder holding a majority of the outstanding shares of the capital stockall employees (including officers) of the Company, entitled to vote on the matter, approved 1) a one-time stock option repricing for certain previously granted and still outstanding options held by the Company’s employees; and 2) for certain officers, including the NEOs other than Ms. Ryan who was no longer employed by the Company, contingent upon each such officer’s written consent with respect toas well as certain of histheir family members and entities over which they exert control, are prohibited from engaging in any hedging transactions or her own previously grantedotherwise engaging in short sales of Thryv securities. Thryv’s Insider Trading Policy also prevents members of the board of directors and still outstanding options, (a) a one-time stock option repricing and (b) a delayed vesting schedule forcertain employees (including officers) from pledging securities in the Company.
Tax Considerations
In determining our variable compensation programs, we consider certain tax implications of particular forms of compensation, such options (the “Option Repricing”).
The relevant options were granted toas the applicable employees and officers on November 18, 2019, December 3, 2019 and February 19, 2020 (the “Subject Options”).
All applicable officers consented toimplications of Section 409A of the Option RepricingInternal Revenue Code governing deferred compensation arrangements. Although we consider the tax consequences of our compensation programs, the forms of compensation we utilize are determined primarily by their effectiveness in creating maximum alignment with our key strategic objectives and the Option Repricing became effective on the trading day following the twentieth calendar day following the commencementinterests of the mailing to the Company’s stockholders of the definitive Information Statement on Schedule 14C filed with the Securities and Exchange Commission, which effectiveness date was December 29, 2020.