NOTICE OF
2017 Annual Meeting
of Stockholders
and Proxy Statement
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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ETSY, INC.
(Name of registrant as specified in its charter)
(Name of person(s) filing proxy statement, if other than the registrant)
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Brooklyn, NY 11201 April 18, 2019 To our stockholders: I am pleased to invite you to attend Etsy, Inc.’s 2019 Annual Meeting of Stockholders to be held on Tuesday, June 4, 2019 at 9:00 a.m., Eastern Time. Our Annual Meeting will be a “virtual meeting” of stockholders, which will be conducted exclusively online via live webcast. By hosting our meeting virtually, we are able to expand access, improve communication, and lower costs. This approach also enables participation from our global community and aligns with our broader sustainability goals. Your vote is very important. Whether you plan to participate in the Annual Meeting or not, please be sure to vote. Voting instructions can be found on page 12 of the proxy statement. On behalf of the Board of Directors and the management team, thank you for your ongoing support of and continued interest in Etsy. Sincerely,
Josh Silverman President, CEO & Director
Notice of 2019 Annual Meeting of Stockholders Date: June 4, 2019 Time: 9:00 a.m. Eastern Time Place: ETSY.onlineshareholdermeeting.com Record Date: April 12, 2019 Meeting Agenda: Elect Jonathan D. Klein and Margaret M. Smyth as Class I directors to serve until our 2022 Annual Meeting of Stockholders and until their respective successors have been elected and qualified or until they resign, die, or are removed from the Board of Directors; Ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2019; Consider an advisory vote to approve executive compensation; and Transact any other business that may properly come before the Annual Meeting. Your vote is important. Whether or not you plan to attend the Annual Meeting, we encourage you to read the accompanying proxy statement and to submit your proxy or voting instructions as soon as possible. Even if you have voted by proxy, you may still vote during the Annual Meeting. Please note, however, that if your shares are held of record by a broker, bank, trustee, or nominee and you wish to vote during the Annual Meeting, you must follow the instructions from such broker, bank, trustee, or nominee.
Jill Simeone General Counsel and Secretary April | |||||
Important Notice Regarding the Availability of Proxy Materials for the 2019 Annual Meeting of Stockholders to be Held on June annual report to stockholders are available at http://www.proxyvote.com.
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This summary highlights the financial, compensation, and corporate governance information described in more detail elsewhere in this Proxy Statement.proxy statement. This summary does not contain all the information that you should consider, and you should read the entire proxy statement before voting.
About Etsy
Etsy is the globaltwo-sided marketplace for unique and creative goods. Our mission is to “Keep Commerce Human,” and we’re committed to using the power of business and technology to strengthen communities and empower people around the world. We connect creative entrepreneurs with thoughtful consumers looking for items that are intended to be special, reflect their sense of style, or represent a meaningful occasion.
As of December 31, 2018, our platform connected 2.1 million active Etsy sellers to 39.4 million active Etsy buyers, in nearly every country in the world. Our sellers are the heart and soul of Etsy, and our technology platform allows our sellers to turn their creative passions into economic opportunity. We have a seller-aligned business model: we make money when our sellers make money. We offer our sellers a marketplace with millions of buyers along with a range of seller tools and services that are specifically designed to help our creative entrepreneurs generate more sales and scale their businesses.
OUR STRATEGY
2016
| 1 | 2019 Proxy Statement | Etsy |
2018 Business Highlights
2018 Operational Highlights
In 2018, we successfully executed on our product, engineering, and marketing efforts:
We deliveredcontinued to launch new product enhancements and build upon prior launches to improve search results, bolster trust in the Etsy brand, and enhance seller tools. Some examples include:
We improved search relevance using context specific ranking (“CSR”) and reduced friction in the search experience by accelerating home and search page load times;
We made customer support improvements by introducing live chat and inbound phone support; and
We optimized Promoted Listings by using CSR to surface more relevant ads and launched a yeartool to better utilize seller’s budgets.
In July 2018, we increased our seller transaction fee from 3.5% to 5%, and now apply it to the cost of strong resultsshipping in 2016. Highlightsaddition to the cost of the item. Following the increase in the transaction fee, we were able to reinvest a portion of our performanceincremental revenue into marketing.
We continued to focus on utilizing our marketing efforts to drive new and existing buyers to Etsy, including running our first ever national television campaign in 2016 include:
• Gross merchandise sales grew by 19% year-over-year to $2.84 billion, with 30% of sales involving a buyer and/or seller outside of the U.S.US.
• Revenue rose by 33% year-over-year to a total of $365 million.
• Our active seller community grew to 1.72.1 million (up 12%9.4% from 2015)2017) and our active buyer community grew to 28.639.4 million (up 19%18.2% from 2015)2017).
Our vibrant community includes people buying and selling in
nearly every country in the world.
• We had several successful product launches including a new seller service, Pattern by Etsy, Google Shopping, and a partnership with Intuit.
*As of December 31, 2018
year-over-year
| 2 | 2019 Proxy Statement | Etsy |
• We laid
2018 Financial Highlights
Our operational success enabled us to achieve the groundwork for big steps forwardfollowing financial results:
Gross merchandise sales (“GMS”) grew by 20.8% year-over-year to $3.9 billion, up from $3.3 billion in 2017, with 35% of GMS coming from transactions where an Etsy Studiobuyer, an Etsy seller, or both, were located outside of the United States.
Revenue increased by 36.8% year-over-year to a total of $603.7 million, up from $441.2 million in 2017, led by Marketplace revenue growth of 35.2%.
Net income was $77.5 million compared with $81.8 million in 2017.
Non-GAAP Adjusted EBITDA was $139.5 million representing an increase of 74.4% year-over-year, compared to $80.0 million in 2017.Non-GAAP Adjusted EBITDA margin (i.e.,non-GAAP Adjusted EBITDA divided by revenue) was 23.1%, compared to 18.1% in 2017. See“Non-GAAP Financial Measures” for a reconciliation of Adjusted EBITDA to net income, the most directly comparable financial measure calculated in accordance with GAAP.
Our Impact Strategy
Etsy’s mission to “Keep Commerce Human” is rooted in our belief that, although automation and Shop Manager, leveragingcommoditization are parts of modern life, human creativity cannot be automated and human connection cannot be commoditized. This is what makes Etsy and our platform investmentsmarketplace distinct from mass retailers. Our mission guides our daily decisions, sets the path for our long-term success, and reinforces our commitment to make a positive economic, social, and ecological impact.
| 3 | 2019 Proxy Statement | Etsy |
We have developed an impact strategy that reflects this commitment, and in search, payments, machine learning,2018, we set a number of goals to help us achieve the positive economic, social, and marketing services.ecological impact we want to have on the world while advancing and complementing our business strategy. We describe our progress against some of the most critical goals here, and state new goals for 2019. You can read more about our impact strategy, and see how we align our impact reporting with Sustainability Accounting Standards Board (SASB) guidelines, in our Annual Report on Form10-K for the fiscal year ended December 31, 2018 that accompanies this proxy statement. We included progress against our impact metrics in our Form10-K for the first time as a way to better reflect their significance to Etsy and in order to respond to increased interest from our stakeholders in such reporting.
2018 GOAL | 2018 PROGRESS | 2019 GOAL | ||||
Economic Make creative entrepreneurship a path to economic security and personal empowerment | Ensure the economic opportunities Etsy creates meaningfully benefit a broad swath of our seller community | Commissioned Etsy’s first economic impact study, which found that, in 2018, Etsy sellers: • Contributed $5.37 billion • Created 1.52 million jobs in the • Generated more than $1.76 • Produced $3 billion in | Double US Etsy sellers’ economic output by 2023 | |||
Social Enable equitable access to the opportunities that we create | Meaningfully increase representation of underrepresented groups and ensure equity in Etsy’s workforce | • Increased our targeted recruiting • Increased the number of female • Commissioned a pay equity study | Approximately double the percentage of Black and Latinx employees in Etsy’s workforce by 2023 | |||
Ecological Impact Build long-term resilience by eliminating our carbon impacts and fostering responsible resource use | Power our operations with 100% renewable electricity by 2020 and reduce the intensity of our energy use by 25% by 2025 | • Procured 58% of our electricity from • Achieved a 25% reduction In energy | Stay on track to meet renewable power and energy intensity goals, and mitigate the ecological impact of our marketplace by offering carbon neutral shipping on 100% of transactions by 2020
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*As of December 31, 2016
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Culture and Engagement
We believe that our action-oriented, values-based, and purpose-driven work culture is a competitive advantage in attracting and retaining top talent. Etsy’s employees work hard every day to bring innovative ideas to Etsy to strengthen the experience for sellers and buyers in our marketplace. We are focused on maximizing our employees’ engagement, which is linked with high performance, retention, innovation, and growth.
In July 2018, Etsy conducted an engagement survey of all global employees:
82% of employees submitted a response
70% of respondents reported favorable employee engagement, which is in line with benchmark results for technology companies with a similar number of employees
We use the results of our engagement survey to guide the development of more dynamic programs that build knowledge and skills and connectedness between employees
We believe employee engagement comes from fulfilling work focused on serving the needs of our sellers and buyers and from ample personal and professional growth opportunities. To that end, we strive to offer competitive benefits, including the following examples:
We have a26-week gender-blind parental leave policy that is available to all Etsy employees globally. Through this policy we aim to support and enable parents to play equal roles in building successful companies and nurturing their families.
We offer our employees paid time off to volunteer so that they can support the causes and organizations they are passionate about.
Leadership and Corporate Governance
Executive Team
We believe that we have built a highly qualified and effective executive team. Each person brings fresh perspectives and deep expertise to their particular roles. We’re proud that Our executive officers are: Josh Silverman, President and Chief Executive Officer, leading Etsy in
Mike Fisher, Chief Technology Officer, leading our engineering teams Rachel Glaser, Chief Financial Officer, overseeing our global financial operations Kruti Patel Goyal, SVP, Product, leading our product teams Raina Moskowitz, SVP, People, Strategy and
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| 5 | 2019 Proxy Statement | Etsy | |||||
Director Nominees and Continuing Directors The following table provides summary information about each director nominee and continuing director. See pages | ||
Name | Age | Etsy Director Since | Independent | Audit Committee | Compensation Committee | Nominating and Corporate Governance | ||||||
Nominees for election at the 2017 Annual Meeting (Class II)
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M. Michele Burns
| 59
| 2014
| Yes
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Josh Silverman
| 48
| 2016
| Yes
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Fred Wilson (Lead Independent Director)
| 55
| 2007
| Yes
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Directors with terms expiring at the 2018 Annual Meeting (Class III)
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Chad Dickerson (Chair)
| 44
| 2011
| No
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Melissa Reiff
| 62
| 2015
| Yes
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Directors with terms expiring at the 2019 Annual Meeting (Class I)
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Jonathan D. Klein
| 56
| 2011
| Yes
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Margaret M. Smyth
| 53
| 2016
| Yes
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| NAME | AGE | ETSY DIRECTOR SINCE | INDEPENDENT | AUDIT COMMITTEE | COMPENSATION COMMITTEE | NOMINATING AND CORPORATE GOVERNANCE COMMITTEE | ||||||||||||||||||
Nominees for election at the 2019 Annual Meeting (Class I) |
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Jonathan D. Klein* |
| 58
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| 2011
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Margaret M. Smyth |
| 55
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| 2016
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| Yes
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Directors with terms expiring at the 2020 Annual Meeting (Class II) |
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M. Michele Burns |
| 61
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| 2014
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| Yes
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Josh Silverman |
| 50
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| 2016
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| No
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Fred Wilson (Chair) |
| 57
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| 2007
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Directors with terms expiring at the 2021 Annual Meeting (Class III) |
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Gary S. Briggs |
| 56
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| 2018
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Edith W. Cooper* |
| 57
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| 2018
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| Yes
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Melissa Reiff |
| 64
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| 2015
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Chair
Member
* Effective immediately after the 2019 Annual Meeting, Mr. Klein will rotate out of the role of Chair of the Compensation Committee and Ms. Reiff will step into the role of Chair. Mr. Klein will remain a member of the Compensation Committee. | ||||
DIRECTOR DASHBOARD
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| 6 | 2019 Proxy Statement | Etsy |
Corporate Governance We believe that effective corporate governance is not aone-size-fits-all approach. We carefully consider our corporate governance practices to ensure that they are appropriately tailored to our business and promote the long-term interests of our stockholders. For information about our stockholder outreach efforts on the topic of corporate governance, please see “Stockholder Engagement” below. Our corporate governance practices include:
Active role in
Independent director oversight of executive succession planning Policy of no pledging or hedging of Etsy shares for current employees and directors Stockholder Engagement We maintain active, year-round engagement In 2018, we launched a stockholder engagement program for the specific purpose of seeking feedback from Etsy investors to better understand their views regarding Etsy’s compensation program and practices and corporate governance structure. This new stockholder engagement program includes involvement and oversight from our Board and supplements the efforts of the management team, which has principal responsibility for investor relations. We proactively arrange calls and meetings with stockholders focused on corporate governance, environmental, social, and executive compensation issues of interest to investors. We believe that our engagement program provides stockholders with an effective channel for two-way dialogue with our Board of Directors.
In particular, in connection with our expanded stockholder engagement program, and in response to our 2018non-binding advisory vote on named executive officer compensation (our“say-on-pay” vote) and to a lower vote result for our only incumbent director nominee, we reached out to stockholders representing approximately 50% of Executive Compensation Matters Stockholders approved our 2018say-on-pay proposal with 59% of the votes cast in favor of the proposal, which was a significant departure from our 2017say-on-pay proposal that was approved by over 96% of the votes cast. Based on feedback from investors and others, the Compensation Committee believes the lowersay-on-pay vote last year was primarily due toone-time events inmid-2017 related to the turnaround of our business. In 2017, our Board of Directors made deliberate and important decisions to change our management team and redirect our business strategy. In order to induce Mr. Silverman to join Etsy The investors we spoke with acknowledged that they understood theseone-time steps were taken in light of the exigent circumstances related to our 2017 strategic and management transition. Investors also encouraged Etsy to continue to drive accountability and results through a robustpay-for-performance approach to executive compensation. Since 2017, we have not made additional front-loaded grants and have not modified our annual cash incentive program targets mid-year and, based on investor feedback, we do not intend to do so within our current executive compensation program. In addition,the Compensation Committee will consider including performance-based equity awards in our executive compensation program in the future. The Board of Directors and the Compensation Committee value the opinions of our stockholders and will continue to consider the voting outcome of futuresay-on-pay proposals and investor feedback received throughout the year when making compensation decisions for our executive officers. Corporate Governance Matters We also had discussions with investors regarding our corporate governance practices, including our classified board and supermajority vote provisions, which we believe negatively impacted the 2018 vote level for Melissa Reiff, our only incumbent director nominee. These corporate governance provisions are frequently adopted by newly public companies and were implemented by our Board of Directors at the time of our initial public offering in 2015. We are aware that these governance provisions can be unpopular with stockholders, so we do not maintain them lightly. These provisions are intended to provide value to Etsy and our investors by protecting our ability to
build for the future, particularly as a relatively new public company by providing the Board with defensive measures in the event of an unsolicited takeover attempt. We believe that these provisions are serving their intended purpose for Etsy and support our Board’s view that effective corporate governance is notone-size-fits-all. For example, 2017 was a transformational year for Etsy as we appointed a new Chief Executive Officer, Chief Financial Officer, Chief Technology Officer, and General Counsel. The new management team identified and began implementing a new business strategy and key initiatives that have turned around our business and generated total stockholder returns of 128% in 2018. The growth of our business has also created economic opportunity for our sellers and enabled Etsy to establish rigorous economic, social, and ecological impact goals while advancing and complementing our business strategy. We further believe that the turnaround of our business demonstrates clearly that our Board of Directors is highly active and engaged and has been willing to make hard decisions that it believes are in the best interests of our stakeholders and mitigates the theoretical concerns regarding poor accountability and entrenchment that are often cited as potential downsides to these governance provisions. In addition, we believe that we are still in the early innings of realizing our market opportunity to own special purchase occasions and that we have exciting work ahead, which demonstrates the ongoing value of these governance provisions to Etsy and our stakeholders. We want to protect our ability to build for the future with provisions that are important to us today. At the same time, the Board understands that governance structures that work well today may change over time. We value the candid feedback we’ve received from investors and note that no investor we met with last year suggested that we should promptly eliminate our classified board and supermajority vote provisions. We intend to continue to keep open minds and seek broad-based investor input about our corporate governance provisions. As a result of our 2018 investor discussions, our Board of Directors and Nominating & Corporate Governance Committee commit to reviewing and assessing our classified board and supermajority vote provisions annually to ensure that they remain appropriate and valuable to Etsy and our stockholders as we grow and mature as a public company. 2019 Engagement Program We plan to continue our stockholder engagement program in 2019 under the Board’s oversight to further enhance and deepen our relationship with our stockholders on corporate governance, environmental, social, executive compensation and other issues of interest to investors 2019 Investor Day We were also pleased to hold our first-ever Investor Day in March 2019 at our Brooklyn headquarters where we hosted over 100 analysts and investors in person and had over 300 financial community participants via webcast. Through informal follow-up discussions as well as a formal perception audit, we received positive feedback concerning the insights we provided regarding Etsy’s long-term strategy, insights into our buyer and seller communities, key operating initiatives, and multi-year financial targets. We look forward to continuing to build relationships with the investor community in 2019. Our discussions with investors have been productive and informative and have provided valuable feedback to our Board to help ensure that its decisions are aligned with stockholder objectives.
Executive Compensation Our 2018 executive compensation program was designed to be a straightforward and thoughtful pay-for-performance approach. We target a compensation mix for our named executive officers that is weighted heavily towards variable compensation, including short-term cash incentive and long-term equity incentive compensation, that is linked to company performance and stockholder interests. As described in our proxy statement for our 2018 Annual Meeting of Stockholders, our CEO, Mr. Silverman did not receive a long-term incentive grant in 2018 in light of the front-loaded equity grant he received in May 2017 that was intended to induce him to join Etsy and provide him with a meaningful equity stake in the company that would align his interests with those of our stockholders. For a detailed discussion of our executive compensation program, please see “Compensation Discussion and Analysis” below.
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We maintain the following practices that we believe help support the effectiveness of our executive compensation program. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| WHAT WE DO | WHAT WE DON’T DO | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
We Maintain a Fully (100%) Independent | We Do Not Provide our Executive Officers With Guaranteed Annual Base Salary Increases
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| 10 | 2019 Proxy Statement | Etsy |
Voting and Meeting Information
What is the purpose of this proxy statement?
We are sending you this proxy statement because the Board of Directors of Etsy, Inc. (which we refer to as “Etsy,” “we,” “us” or “our”) is inviting you to vote (by soliciting your proxy) at our 2019 Annual Meeting of Stockholders which will take place online on June 8, 20174, 2019 at 9:00 a.m., Eastern Time. You can attend the Annual Meeting by visiting ETSY.onlineshareholdermeeting.com, where you will be able to listen to the meeting live, submit questions, and vote online. We have decided to hold a virtual meeting because it improves stockholder access, encourages greater global participation, and aligns with our broader sustainability goals.
This proxy statement summarizes information that is intended to assist you in making an informed vote on the proposals described in this proxy statement.
Why did I receive aone-page notice in the mail regarding the internet availability of proxy materials instead of a full set of proxy materials?
We are providing access to our proxy materials over the internet, which reduces both the costs and the environmental impact of sending our proxy materials to stockholders. We mailed a Notice of Internet Availability (the “Notice”) to our stockholders (other than those who previously requested paper copies) on or about April 21, 2017.
18, 2019.
The Notice contains instructions on how to:
• access and view the proxy materials over the internet;
• vote; and
• request a paper ore-mail copy of the proxy materials.
In addition, if you received paper copies of our proxy materials and wish to receive all future proxy materials, proxy cards, and annual reports electronically, please follow the electronic delivery instructions on www.proxyvote.com. We encourage stockholders to take advantage of the availability of the proxy materials on the internet to help reduce the cost and environmental impact of the Annual Meeting.
What am I being asked to vote on?
You are being asked to vote on:
• The election of Jonathan D. Klein and Margaret M. Michele Burns, Josh Silverman, and Fred WilsonSmyth as Class III directors to serve until the 20202022 Annual Meeting of Stockholders and until their successors have been elected and qualified or until they resign, die, or are removed from the Board;
• The ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2017;2019; and
| 11 | 2019 Proxy Statement | Etsy | |||||
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How does the Board recommend that I vote? Our Board recommends that you vote:
Who is entitled to vote at the Annual Meeting? Stockholders as of the close of business on April |
How do I vote?
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electronically. If you choose to vote by proxy, you may do so:
Even if you plan to attend the virtual Annual Meeting at ETSY.onlineshareholdermeeting.com (following the instructions below), we recommend that you submit your proxy in advance via one of the methods above. This way, your shares of
If you want to vote your shares at the virtual Annual Meeting, you will need the control number included on your Notice or proxy card and should follow the instructions on the webcast. Note that there are additional instructions described below that will apply if you hold your shares with a broker, bank, trustee, or nominee. If on April 12, 2019, your Etsy shares | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Meeting, you will need to obtain a valid proxy from the broker, bank, trustee, or nominee that holds your shares giving you the right to vote the shares at the meeting. How can I attend the Annual You can attend the The Annual Meeting In order to enter the meeting, you will need the control number, which is included in the Notice or on your proxy card if you are a stockholder of record of shares of common stock, or included with your voting instruction card and voting instructions received from your broker, bank, trustee, or nominee if you hold your shares of common stock in “street name.” Can I ask questions at the Annual Meeting? Only stockholders of record as of the record date for the Annual Meeting and their proxy holders may submit questions or comments. You will be able to ask questions To help ensure that we have a productive and efficient meeting, and in fairness to all stockholders in attendance, you will also find posted our rules of conduct for the Annual Meeting when you log in prior to its start. In accordance with the rules of conduct, we ask that you limit your remarks to one brief question or comment that is relevant to the Annual Meeting or Etsy’s business and that remarks are respectful of your fellow stockholders and meeting participants. Questions may be grouped by
What if I need technical assistance accessing or participating in the virtual Annual Meeting? If you encounter any difficulties accessing the virtual Annual Meeting during thecheck-in or meeting time, please call the technical support number that will be posted on the What is the deadline for voting? If If your Etsy shares are held in an account with a broker, bank, trustee, or nominee, you should vote in accordance with the instructions from your broker, bank, trustee, or nominee. What happens if I do not vote? If you are a stockholder of record and do not vote by completing your proxy card, by telephone, through the internet, or online during the meeting, your shares will not be voted. If your Etsy shares are held in an account with a broker, bank, trustee, or nominee, and you do not instruct your broker, bank, trustee, or nominee how to vote your shares, your broker, bank, trustee, or nominee may still be able to vote your shares in its discretion. In this regard, brokers, banks, and other securities intermediaries may use their discretion to vote your “uninstructed” shares with respect to matters considered under applicable exchange rules to be “routine,” but not with respect to“non-routine” matters. Proposals No. 1 (Election of Directors) and No. 3(“Say-on-Pay” vote) are considered to be“non-routine” under applicable exchange rules, meaning that your broker may not vote your shares on those proposals in the absence of your voting instructions, which would result in a “brokernon-vote.” Proposal No. 2 (Ratification of Auditors), however, is considered to be a “routine” matter, meaning that if you do not return voting instructions to your broker by its deadline, your shares may be voted by your broker in its discretion on Proposal No. 2. See “How many votes are required to approve each proposal?” below for more information. Please instruct your broker bank, trustee, or nominee to ensure that your vote will be counted. What if I return a proxy card but do not make specific choices? If you submit a properly signed proxy card but do not provide any voting instructions, the persons named as proxies will vote in accordance with the recommendations of the Board, which are indicated above and with each proposal in this | ||||||||||
Can I change my vote or revoke my proxy? Yes. If your shares are registered directly in your name with our transfer agent, Computershare Trust Company, N.A., you may change your vote or revoke your proxy at any time prior to the final vote at the virtual Annual Meeting on June
attending and voting at the virtual Annual
Your most recent proxy submitted by proxy card, internet, or telephone is the one that will count. Your attendance at the virtual Annual Meeting by itself will not revoke your proxy if you do not also submit a proxy card or vote at the virtual Annual Meeting. If you hold shares in an account with a broker, bank, trustee, or nominee, you may change your vote by submitting new voting instructions to your broker, bank, trustee, or nominee in accordance with the instructions they provide to you. If you have obtained a valid proxy from your broker, bank, |
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trustee, or nominee giving you the right to vote your shares, you may change your vote by attending the virtual Annual Meeting and voting. How many votes are required to approve each proposal?
PROPOSAL VOTE REQUIRED TO EFFECT OF EFFECT OF BROKER 1. Election of Directors Each director is elected by a plurality of the votes cast. The director nominees receiving the highest number of “FOR” votes will be elected. 2. Ratification of Auditors Decided by a majority of the votes cast. This proposal will be approved if the number of votes cast “FOR” the proposal exceeds the number of votes cast “AGAINST” the proposal. 3. Advisory Vote on Executive Compensation(“Say-on-Pay” Vote) Decided by a majority of the votes cast. This proposal will be approved if the number of votes cast “FOR” the proposal exceeds the number of votes cast “AGAINST” the proposal. Who will count the votes? Representatives of Broadridge Financial Services, Inc. will tabulate the votes and act as inspectors of election. What is a quorum? A quorum is the minimum number of shares required to be present at the Annual Meeting for any business to be conducted. For our Annual Meeting, a majority of the shares entitled to vote must be present, either during the Annual Meeting, or represented by proxy. If a quorum is not present, we will not be able to conduct any business, and the Annual Meeting will be rescheduled for a later date. Instructions to “withhold” authority to vote in the election of directors, abstentions and brokernon-votes will be counted as present for determining whether or not a quorum is present. Where can I find the voting results of the Annual Meeting? We plan to announce preliminary voting results at the Annual Meeting and will report the final voting results in a current report on Form8-K within four business days of the Annual Meeting. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Who pays for the proxy solicitation expenses? We are soliciting proxies on behalf of our Board and will pay the related costs. As part of this process, we reimburse brokers and other custodians, nominees, and fiduciaries for theirout-of-pocket expenses for forwarding proxy materials to our stockholders. Our directors, officers, and employees may also solicit proxies in person, by telephone, or by other means of communication, and will not receive any additional compensation for soliciting proxies. In addition, we have retained Saratoga Proxy Consulting, LLC at a fee estimated to be approximately $15,000, plus taxes and reasonableout-of-pocket expenses, to assist in the solicitation of proxies. What does it mean if I receive more than one set of materials? If you receive more than one set of materials that means you hold your shares in more than one name or account. In order to vote all of your shares, you should sign and return all of the proxy cards you receive or follow the instructions for any alternative voting procedures on the proxy cards or the Notice you receive. |
How do I obtain a separate set of proxy materials or request a single set for my household? We have adopted a practice approved by the SEC called ‘‘householding.’’ This means that stockholders who have the same address and last name and do not participate in electronic delivery of proxy materials will receive only one copy of the Notice and our annual report and proxy statement unless one or more of these stockholders notifies us that they wish to continue receiving individual copies. This procedure reduces printing costs, postage fees, and the environmental impact. Each stockholder who participates in householding will continue to be able to access or receive a separate proxy card. If you prefer to receive a separate Notice, or if you currently receive multiple copies and would like to request “householding” of your communications, please contact Broadridge by phone at |
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| 16 | 2019 Proxy Statement | Etsy |
Election of Directors
Our Board has seveneight members. In accordance with our amended and restated certificate of incorporation, our Board is divided into three staggered classes of directors. At the Annual Meeting, threetwo Class III directors are standing for election, each for a three-year terms.
term.
The Board has nominated Jonathan D. Klein and Margaret M. Michele Burns, Josh Silverman, and Fred WilsonSmyth for election as Class III directors at the Annual Meeting.
Each director is elected by a plurality of the votes cast. The two director nominees receiving the highest number of “FOR” votes will be elected. If elected at the Annual Meeting, the nominees will serve until our 2022 Annual Meeting in 2020of Stockholders and until their successors have been elected and qualified or until they resign, die, or are removed from the Board. For information about the nominees and each director whose term is continuing after the Annual Meeting, please see “Information Regarding Director Nominees and Current Directors.”
The nominees have consented to serve as director, if elected. We have no reason to believe that any of the nominees will be unable or unwilling to serve as director. If, however, a nominee is unavailable for election, your proxy authorizes us to vote for a replacement nominee if the Board names one.
The Board of Directors recommends a vote “FOR” each of the director nominees named above.
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| 17 | 2019 Proxy Statement | Etsy |
INFORMATION REGARDING DIRECTOR NOMINEES AND CURRENT DIRECTORS
Information Regarding Director Nominees and Current Directors
Below is information regarding our director nominees and directors whose term isterms are continuing after the Annual Meeting.
| NAME | AGE | ETSY DIRECTOR SINCE | INDEPENDENT | COMMITTEE MEMBERSHIP | ||||
Nominees for election at the 2019 Annual Meeting (Class I) | ||||||||
Jonathan D. Klein* | 58 | 2011 | Yes | Compensation Committee (Chair) | ||||
Margaret M. Smyth | 55 | 2016 | Yes | Audit Committee (Chair) | ||||
Directors with terms expiring at the 2020 Annual Meeting (Class II) | ||||||||
M. Michele Burns | 61 | 2014 | Yes | Audit Committee
Nominating and | ||||
Josh Silverman | 50 | 2016 | No | |||||
Fred Wilson
(Chair) | 57 | 2007 | Yes | Audit Committee
Nominating and | ||||
Directors with terms expiring at the 2021 Annual Meeting (Class III) | ||||||||
Gary S. Briggs | 56 | 2018 | Yes | Compensation Committee | ||||
Edith W. Cooper* | 57 | 2018 | Yes | Compensation Committee | ||||
Melissa Reiff | 64 | 2015 | Yes | Compensation Committee | ||||
* Effective immediately after the 2019 Annual Meeting, Mr. Klein will rotate out of the role of Chair of the Compensation Committee and Ms. Reiff will step into the role of Chair. Mr. Klein will remain a member of the Compensation Committee. | ||||||||
| Name | Age | Etsy
| Independent | Committee Membership
| ||||
Nominees for election at the 2017 Annual Meeting (Class II) | ||||||||
M. Michele Burns | 59
| 2014
| Yes
|
Audit Committee (Chair)
Nominating and Corporate Governance Committee | ||||
Josh Silverman
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48
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2016
|
Yes
|
Compensation Committee
| ||||
Fred Wilson
(Lead Independent Director) |
55
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2007
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Yes
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Audit Committee Nominating and Corporate | ||||
Directors with terms expiring at the 2018 Annual Meeting (Class III) | ||||||||
Chad Dickerson
(Chair) |
44
|
2011
| No
| |||||
Melissa Reiff |
62 |
2015 |
Yes |
Compensation Committee | ||||
Directors with terms expiring at the 2019 Annual Meeting (Class I) | ||||||||
Jonathan D. Klein |
56 |
2011 |
Yes |
Compensation Committee (Chair) | ||||
Margaret M. Smyth |
53 |
2016 |
Yes |
Audit Committee |
| 18 | 2019 Proxy Statement | Etsy | ||
Nominees for Election to a Three-Year Term Expiring at the 2022 Annual Meeting of Stockholders
Jonathan D. Kleinis co-founder and deputy chairman of Getty Images, Inc., a global digital media company. Mr. Klein has served as a member of the board of directors of Getty Images, Inc. (and its predecessor company Getty Communications) since March 1995 and served as chief executive officer from inception in March 1995 to October 2015. Mr. Klein also serves as a member of the boards of directors of Jumia Technologies (Chairman of the Board) and numerousnon-profit organizations, including the Committee to Protect Journalists, the Groton School, where he serves as President, and Friends of the Global Fight Against HIV, Tuberculosis and Malaria, where he serves as chairman. Mr. Klein also serves on the board of directors of these private companies: Squarespace Inc., and Getty Investments.
Jonathan D. Klein should serve as a member of our Board due to his extensive experience withe-commerce and digital media companies and his experience as both a public company CEO and a director of a number of public and private companies.
Margaret M. Smyth has served as the U.S. chief financial officer of National Grid plc, a multinational energy company, since October 2014. Previously, Ms. Smyth was vice president of finance at ConEdison, Inc. from August 2012 through September 2014. Prior to that, Ms. Smyth served as vice president and chief financial officer of Hamilton Sundstrand, which is part of United Technologies Corp., a provider of products and services to the aerospace and building systems industries, from October 2010 to June 2011. Prior to that, she served as vice president and corporate controller of United Technologies Corp. from August 2007 to September 2010 and vice president and chief accounting officer of 3M Corporation from April 2005 to August 2007. Prior to that, Ms. Smyth served as a senior managing partner at Deloitte & Touche and Arthur Andersen. During the past five years, she served as a director of Martha Stewart Living Omnimedia and Vonage Holdings Corporation.
Margaret M. Smyth should serve as a member of our Board due to her expertise in public company finance, accounting, and strategic planning, including experience gained as a chief financial officer and chief accounting officer. In addition, she brings significant international experience and leadership through her service as an executive and director of global public companies.
Directors Continuing in Office Until the 2020 Annual Meeting of Stockholders
M. Michele Burns has served as the Center Fellow and Strategic Advisor to the Stanford Center on Longevity at Stanford University since August 2012. Ms. Burns served as the chief executive officer of the Retirement Policy Center sponsored by Marsh & McLennan Companies, Inc., an insurance brokerage and consulting firm, from October 2011 to February 2014; as chairman and chief executive officer of Mercer LLC (a subsidiary of Marsh & McLennan Companies, Inc.), a human resources consulting firm, from September 2006 to October 2011; as chief financial officer of Marsh & McLennan
| 19 | 2019 Proxy Statement | Etsy |
Companies, Inc. from March 2006 to September 2006; and as chief financial officer and chief restructuring officer of Mirant Corporation, an energy company, from May 2004 to January 2006. Ms. Burns joined Delta Airlines in January 1999 and served as chief financial officer from August 2000 until April 2004. She began her career at Arthur Andersen in 1981, serving ultimately as the Senior Partner, Southern Region Federal Tax Practice until December 1998. Ms. Burns is a member of the boards of directors of Cisco Systems, Inc.; Goldman Sachs Group,
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M. Michele Burns should serve as a member of our Board due to her expertise in corporate finance, accounting, governance, and strategy, including experience gained as the chief financial officer of public companies. She also brings expertise in global and operational management, including a background in organizational leadership and human resources, and experience as a public company director. Josh Silverman has served as our President and Chief Executive Officer since May 2017 and as a member of our Board since November 2016. Prior to joining Etsy as our President and CEO, he served as the Senior Operating Advisor at Hellman & Friedman, a private equity investment firm since January 2017. In 2016, Mr. Silverman served as Executive in Residence at Greylock Partners, a venture capital firm. Prior to that, Mr. Silverman served as President of Consumer Products and Services at American Express Company from June 2011 to December 2015. Before joining American Express, he was the CEO of Skype from February 2008 to September 2010. Mr. Silverman served as CEO of Shopping.com, an eBay company, from July 2006 to February 2008 and, prior to that, in various executive roles at eBay. Mr. Silverman was alsoco-founder and CEO of Evite, Inc. He serves on the board of directors of Shake |
Shack Inc. Josh Silverman should serve as a member of our Board due to his deep familiarity with our business through his tenure as CEO and his significant executive, operational, and marketing experience and expertise in building and leading online marketplaces and technology companies. Fred Wilson has served as the Chair of our Board since May 2017, and prior to that, as our lead independent director since October 2014. Mr. Wilson has been a venture capitalist for over 30 years. He is a founder and has served as partner of Union Square Ventures, a venture capital firm, since June 2003. Mr. Wilson also serves on the boards of directors of various private companies in connection with his role at Union Square Fred Wilson should serve as a member of our Board due to his extensive experience with technology and social media companies and his deep understanding of our business and operations through his tenure on the Board and as one of our early investors. Directors Continuing in Office Until the
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Gary S. Briggs should serve as a member of our Board because Edith W. Cooper served as Executive Vice President, Global Head, Human Capital Management of Goldman Sachs Group, Inc. from March 2008 to December 2017, and, prior to that, she held various leadership positions in Goldman Sachs’ Securities Division from 1996 to 2008. Ms. Cooper began her career in derivative sales at Bankers Trust and Morgan Stanley. She currently serves on the board of directors of Slack Technologies, Inc., the Museum of Modern Art, and Mt. Sinai Hospital. Edith W. Cooper should serve as a member of our Board due to her extensive expertise in the human resources field, including recruiting, talent development, and executive compensation, as well as her strong financial background. Melissa Reiff Melissa Reiff should serve as a member of our Board because of her significant operational experience and her expertise in retail, marketing, and merchandising, and her experience as a CEO and director of a public company.
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| 21 | 2019 Proxy Statement | Etsy |
Information Regarding the Board and Corporate Governance
Chad Dickerson serves as our Chair, President, and Chief Executive Officer and Fred Wilson serves as our lead independent director. The Board believeshas determined that our current leadership structurehaving an independent director serve as Chair of the Board is effective, efficient, and in the best interest of Etsy and our stockholders.
Under our corporate governance guidelines, our Board may separate or combine the roles of Chair and CEO when and if it believes it advisable and in the best interests of our stockholders at this time. Fred Wilson has served asour non-executive Chair since May 2017, providing independent leadership and enabling Josh Silverman, our CEO, to concentrate on Etsy’s business operations.
We believe that separating the positions of Chair and CEO ensures a greater role for the independent directors in the oversight of Etsy and its stockholders to do so. The Board believes that Chad Dickerson’s role as Chair promotes a number of important objectives. Since he is the director with the deepest familiarity with our business and is best positioned to lead the execution of our key strategies, his service as Chair adds a substantial strategic perspective while at the same time providing important continuity to Board leadership. Based on the demonstrated success of his service as Chair and the continued benefits of retaining Mr. Dickerson’s strategic perspective as Chair, the Board has concluded that his continuing service as Chair remains in the best interests of stockholders.
In addition, having Fred Wilson as our lead independent director strengthens the Board’s overall independence and oversight of our business and enhances the Board communication and effectiveness. Fred Wilson is an active lead independent director. As lead independent director, Fred Wilson’s responsibilities set forth under our corporate governance guidelines include:
• presiding at all meetings of the Board at which the Chair is not present, including executive sessions of the independent directors;
• serving as a liaison between the Chair and the independent directors;
• reviewing and approving meeting agendas, meeting schedules, and other information, as appropriate;
• calling meetingsparticipation of the independent directors as appropriate;
• if requested by major stockholders, ensuring his availabilityin setting agendas and establishing priorities and procedures for consultation and direct communication, as appropriate; and
• performing such other duties specified by the Board from time to time.
In addition, Mr. Wilson is involved in our CEO performance evaluation as well as overseeing, with the other memberwork of the Nominating and Corporate Governance Committee, our annual Board and Committee self-evaluations.
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Board. Our Bylaws and Corporate Governance Guidelines provide the Board with flexibility to One of the key functions of our Board is to provide informed oversight of our risk management The full Board oversees the management of risks relating to our business strategy and capital structure; our legal, regulatory, and ethical compliance program; risks relating to data privacy, technology, and information security, including cybersecurity; and our strategy and efforts relating to diversity and inclusion; The Audit Committee
The Compensation Committee oversees the management of risks associated with executive compensation policies and The Nominating and Corporate Governance Committee oversees the management of risks associated with corporate governance matters, such as director independence, conflicts of interest, composition and organization of our Board, Our Board assesses the independence of each director at least annually and has determined that, other than In addition, our Board has determined that each member of our Audit Committee, Compensation Committee, and | ||||||||||
Our Board met |
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All of our directors attended the 2018 Annual Meeting of Stockholders. Our Board has the following standing committees: Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee. Members of these Committees serve until their resignation or until otherwise determined by our Board. The |
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Audit Committee
As described in more detail in its charter, among other responsibilities, the Audit Committee:
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oversees the management of risks associated with financial reporting, accounting, and auditing matters, including our guidelines and policies with respect to risk assessment and risk management. |
Each member and prospective member of our Audit Committee can read and understand fundamental financial statements. Our Board has determined that Compensation Committee |
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| 2018 Meetings: | 6 | |
| Members: | Jonathan D. Klein (Chair) Gary S. Briggs Edith W. Cooper Melissa Reiff |
As described in more detail in its charter, among other responsibilities, our Compensation Committee:
• oversees and reviews our compensation philosophy and strategy;
• establishes goals and objectives relevant to compensation for the CEO and other senior officers and evaluates their performance against those goals;
• administers our incentive plans, including approving the terms and conditions orof awards;
• recommends the form and amount of compensation to be paid tonon-employee Board members;
• oversees human capital management, including our employee talent and development programs, includingretention and attrition, and periodically reviewing succession planning for key roles other than the CEO; and
• oversees the management of risks associated with our compensation policies, programs and practices, including an annual risk assessment to determine whether our compensation program encourages inappropriate risk-taking.
Effective immediately after the 2019 Annual Meeting, Mr. Klein will rotate out of the role of Chair of the Compensation Committee and Ms. Reiff will step into the role. Mr. Klein will remain a member of the Compensation Committee. Ms. Reiff’s experience in human capital management and executive compensation matters as a CEO of a public company makes her well suited for the role of Chair.
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A description of the role of the compensation consultant engaged by the Compensation Committee, scope of authority of the Compensation Committee, and the role of executive officers in determining executive compensation is on page Nominating and Corporate Governance Committee
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| 2018 Meetings: | 2 | |
| Members: | Fred Wilson (Chair) M. Michele Burns |
| 25 | 2019 Proxy Statement | Etsy |
As described in more detail in its charter, among other responsibilities, our Nominating and Corporate Governance Committee:
• reviews the composition and size of the Board and makes recommendations to the Board;
• recommends to the Board criteria for Board membership, including qualifications, qualities, skills, areas of expertise, and other relevant factors;
• reviews and recommends to the Board the director nominees;
• oversees the annual evaluation of the Board and each Committee;
• reviews the composition of each Board committeeCommittee and recommends members and chairs;
• reviews the structure and operations of our Board committees;Committees;
• reviews director orientation and continuing education offerings and makes recommendations, as needed; and
• oversees the management of risks associated with director independence, conflicts of interest, board composition and organization, and director succession planning.planning; and
periodically reviews our progress against our economic, social and ecological impact goals.
Compensation Committee Interlocks and Insider Participation
During 2016,2018, Gary S. Briggs, Edith W. Cooper, Fred Wilson, Jonathan D. Klein, and Melissa Reiff and Josh Silverman served on our Compensation Committee. No member of the Compensation Committee has everhad served as one of our officers or employees.employees at the time that they were a member of the Compensation Committee. During 2016,2018, none of our executive officers served as a member of the board of directors or as a member of a compensation committee of any other company that has an executive officer serving as a member of our Board or Compensation Committee.
Although the Nominating and Corporate Governance Committee has the authority to recommend prospective director candidates for the Board’s consideration, the Board retains the ultimate
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authority to nominate a candidate for election by the stockholders as a director or to fill any vacancy. Identifying and Evaluating Nominees When identifying and evaluating potential director nominees, including current members of the Board who are eligible forre-election, the Nominating and Corporate Governance Committee seeks a balance of knowledge, experience, and capability on the Board and may consider the following:
qualities such as character, judgment, independence, relationships, experience, length of service, and the like;
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Stockholder Recommendations and Nominees The Nominating and Corporate Governance Committee will consider stockholder recommendations, so long as they comply with applicable law, our Bylaws, and the procedures described below. Stockholder recommendations for candidates to the Board must be received in writing by December 31st of the year prior to the year in which the recommended candidates will be considered for nomination at the next Annual Meeting of Stockholders and sent to our headquarters, Etsy, Inc., 117 Adams Street, Brooklyn, NY 11201, to the attention of our General Counsel and Secretary. The recommendation must include the candidate’s name, home and business contact information, detailed biographical data and qualifications, information regarding any relationships between the candidate and Etsy within the last three years, and evidence of the recommending person’s ownership of Etsy stock. Recommendations must also include a statement from the recommending stockholder in support of the candidate that addresses the criteria for Board membership, personal references, and confirmation of the candidate’s willingness to serve. The Nominating and Corporate Governance Committee will review the qualifications of any candidate recommended by stockholders in accordance with the criteria described above. In addition, in the Nominating and Corporate Governance Committee’s discretion, its review may |
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| 27 | 2019 Proxy Statement | Etsy |
The following table discloses compensation received by ournon-employee directors during 20162018 pursuant to ournon-employee director compensation program.
Director
| Fees Earned or
| Stock
| Option Awards ($)(2)(3)
| Total Compensation ($)
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M. Michele Burns
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| 21,000
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| 96,362
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| 87,544
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| 204,906
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Jonathan D. Klein
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| 95,000
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| 48,176
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| 43,770
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| 186,946
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Melissa Reiff
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| 92,500
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| 48,176
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| 43,770
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| 184,446
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Josh Silverman(4)
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| 2,500
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| 157,951
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| 175,140
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| 335,591
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Margaret M. Smyth(5)
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| 8,000
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| 192,733
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| 167,362
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| 368,095
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Fred Wilson(6)
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| –
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| –
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| –
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| –
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Jim Breyer (former director)(7)
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| –
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| –
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| –
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| –
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Director Fees Earned or Paid in Cash ($)(1) Option Awards ($)(3)(4) Total Compensation ($) Gary S. Briggs M. Michele Burns Edith W. Cooper Jonathan D. Klein Melissa Reiff Margaret M. Smyth Fred Wilson
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(2) The value disclosed is the aggregate grant date fair value of 3,029 restricted stock units (“RSUs”) granted to each of M. Michele Burns, Jonathan D. Klein, Melissa Reiff, Margaret M. Smyth, and Fred Wilson, each as an incumbent director in 2018, and 4,541 RSUs granted to each of Gary S. Briggs and Edith W. Cooper, each as a new director in 2018, computed in accordance with FASB ASC Topic 718. Assumptions used in the calculation of the grant date fair value are set forth in Note 16—Stock-based Compensation in our Annual Report on Form10-K for the fiscal year ended December 31, 2018 that accompanies this proxy statement. The number of RSUs granted is calculated by Etsy using the average closing price of Etsy’s common stock on Nasdaq (rounded to the nearest hundredth) for the 30 trading days up to and including the grant date.
Etsy’s Audit Committee is comprised entirely of independent directors who meet the independence requirements of the Listing Rules of the Nasdaq Stock Market and the SEC. The Audit Committee The principal purpose of the Audit Committee is to assist the Board in its oversight of our accounting practices, system of internal controls, audit processes, and financial reporting processes. The Audit Committee is responsible for appointing and retaining our independent auditor and approving the audit andnon-audit services to be provided by the independent auditor. The Audit Committee’s function is more fully described in its charter. Management is responsible for preparing our financial statements and ensuring they are complete and accurate and prepared in accordance with generally accepted accounting principles. PricewaterhouseCoopers LLP (“PwC”), our independent registered public accounting firm, was responsible for performing an independent audit of our Consolidated Financial Statements and expressing an opinion on the conformity of those financial statements with generally accepted accounting principles and as to the effectiveness of our internal control over financial reporting. In performing its responsibilities, the Audit Committee has: reviewed and discussed with management our audited financial statements for the fiscal year ended December 31,
received the written disclosures and the letter from PwC required by the applicable PCAOB requirements for the independent accountant communications with audit committees concerning auditor independence, and has discussed with PwC its independence. Based on the 2018. Respectfully submitted by: Margaret M. Smyth (Chair) M. Michele Burns
Fred Wilson | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| 31 | 2019 Proxy Statement | Etsy |
Ratification of the Appointment of Independent
Registered Public Accounting Firm
The Audit Committee has appointed PwC as our independent registered public accounting firm for 20172019 and recommends that stockholders vote to ratify the appointment. Although we are not required by law to obtain such ratification from our stockholders, we believe it is good practice to do so. If our stockholders do not ratify the appointment of PwC, the Audit Committee may reconsider its appointment. The Audit Committee, in its discretion, may appoint a new independent registered public accounting firm at any time during the year if the Audit Committee believes that such a change would be in the best interests of Etsy and our stockholders.
PwC has audited our consolidated financial statements since 2012. A representative of PwC will be present at our Annual Meeting to respond to appropriate questions and to make a statement if they so desire.
This proposal is decided by a majority of the votes cast. This proposal will be approved if the number of votes cast “FOR” the proposal exceeds the number of votes cast “AGAINST” the proposal.
The following table presents fees for professional audit services and other services rendered to us by PwC for the fiscal years ended December 31, 20152018 and December 31, 2016.
Year Ended December 31,
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2015
| 2016
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Audit Fees
| $
| 1,094
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| $
| 3,097
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Audit-Related Fees
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| 50
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| 75
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Tax Fees
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| 115
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| 517
|
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Other Fees
|
| 43
|
|
| 87
|
| ||
Total Fees
| $
| 1,302
|
| $
| 3,776
|
| ||
| YEAR ENDED DECEMBER 31, | ||||||||
| 2018 | 2017 | |||||||
| (in thousands) | ||||||||
Audit Fees | $ | 3,108 | $ | 2,374 | ||||
Audit-Related Fees | 119 | 50 | ||||||
Tax Fees | 341 | 391 | ||||||
Other Fees | 111 | 71 | ||||||
Total Fees | $ | 3,679 | $ | 2,886 | ||||
| 32 | 2019 Proxy Statement | Etsy | ||
|
| |
| 33 | 2019 Proxy Statement | Etsy |
Below is information regarding each of our current executive officers. Our executive officers serve at the discretion of our Board and hold office until their successor has been elected and qualified or until they resign, die, or are removed from the Board. There are no family relationships among any of our directors or executive officers.
|
|
| ||
|
| |||
|
| |||
|
| |||
| ||||
| NAME | AGE | POSITION | ||
Josh Silverman
| 50 | President and Chief Executive Officer | ||
Mike Fisher | 50 | Chief Technology Officer | ||
Rachel Glaser | 57 | Chief Financial Officer | ||
Kruti Patel Goyal | 42 | SVP, Product | ||
Raina Moskowitz | 36 | SVP, People, Strategy and Services | ||
Jill Simeone | 52
| General Counsel and Secretary
| ||
|
| |||
directors of Shake Shack Inc.
Rachel Glaser has served as our Chief Financial Officer since May 2017. Prior to joining Etsy, she was Chief Financial Officer of Leaf Group, a diversified Internet company that owns and operates marketplace and media businesses, since April 2015. From January 2012 to March 2015, Ms. Glaser served as Chief Financial Officer of Move, Inc. (operator of Realtor.com®), an online network of websites for real estate search and home enthusiasts, and Ms. Glaser helped lead the sale of Move, Inc. to News Corporation, a diversified media and information services company, in November 2014. From April 2008 to November 2011, Ms. Glaser served as Chief Operating and Financial
Officer of MyLife.com, a subscription-based people search business, and from May 2005 to April 2008, she was the Senior Vice President of Finance at Yahoo! Inc. Between 1986 and 2005, Ms. Glaser held finance and operations positions of increasing responsibility at The Walt Disney Company and was Vice President of Operations and Business Planning for the Consumer Products group at the time of her departure. From August 2010 to July 2014, Ms. Glaser served on the board of directors of Sport Chalet, Inc., a full service specialty retailer. Since January 2018, Ms. Glaser has served on the board of The New York Times Company. Kruti Patel Goyal has served as our Senior Vice President, Product since August 2018. Ms. Patel Goyal joined Etsy in February 2011 and has held many senior leadership roles, including General Manager of Seller Services, leading our Business & Corporate Development function, leading our International team, and leading our Marketplace Integrity and Trust & Safety teams. Before joining Etsy, Ms. Patel Goyal worked in strategy and business development at Viacom, focused on digital media growth, and at (RED), a global marketing company that raises funds to fight AIDS in Africa. Ms. Patel Goyal began her career at Morgan Stanley and General Atlantic Partners with a focus on media, telecom and technology businesses. Raina Moskowitz has served as our Senior Vice President of
|
|
Jill Simeone has served as our General Counsel and Secretary since January 2017. Prior to joining Etsy, Ms. Simeone was the Vice President, Senior Counsel, and Assistant Secretary at American Express Global Business Travel, where she led the legal side of their mergers and acquisitions program from January 2016 to January 2017. Prior to that, she served as the General Counsel and Chief Compliance Officer at KCAP Financial, Inc., a publicly traded financial services company, from July 2013 to January 2016. Before joining KCAP Financial, she was an attorney at American Express advising on divestitures and investments in technology startups from January 2013 to June 2013. Prior to American Express, she served as the General Counsel at Roadify from January 2012 through December 2012. From
|
| |
| 35 | 2019 Proxy Statement | Etsy |
Compensation Discussion and Analysis
This Compensation Discussion and Analysis section is intended to provide our stockholders with a clear understanding of our compensation philosophy, objectives and practices; our compensation-setting process; our executive compensation program components; and the decisions made in 2016 with respect to the 2018 compensation of each of our Named Executive Officersnamed executive officers (“NEOs”). For 2016,2018, our NEOs were:
• Chad Dickerson, Chair,Josh Silverman, President and Chief Executive Officer;
• Kristina Salen, formerRachel Glaser, Chief Financial Officer (through March 2017);Officer;
• Linda Kozlowski, Chief Operation Officer (as of May 2016);
• John Allspaw,Mike Fisher, Chief Technology Officer; and
• Jordan Breslow, formerJill Simeone, General Counsel (until September 2016).and Secretary; and
This section should be read in conjunction with the compensation tables below, which provide a detailed view of the compensation paid to our NEOs in 2016.Linda Findley Kozlowski, Former Chief Operating Officer.
Executive Summary
Business Overview
2016 BusinessEtsy is the globaltwo-sided marketplace for unique and creative goods. Our mission is to “Keep Commerce Human,” and we’re committed to using the power of business and technology to strengthen communities and empower people around the world. We connect creative entrepreneurs with thoughtful consumers looking for items that are intended to be special, reflect their sense of style, or represent a meaningful occasion.
As of December 31, 2018, our platform connected 2.1 million active Etsy sellers to 39.4 million active Etsy buyers, in nearly every country in the world. Our sellers are the heart and soul of Etsy, and our technology platform allows our sellers to turn their creative passions into economic opportunity. We have a seller-aligned business model: we make money when our sellers make money. We offer our sellers a marketplace with millions of buyers along with a range of seller tools and services that are specifically designed to help our creative entrepreneurs generate more sales and scale their businesses.
2018 Performance Highlights
Highlights of our company performance in 2016 include:
• Gross merchandise sales—GMS grew by 19%20.8% year-over-year to $2.84$3.9 billion, up from $3.3 billion in 2017, with 30%35% of sales involving aGMS coming from transactions where an Etsy buyer, and/an Etsy seller, or sellerboth, were located outside of the US.United States.
| 36 | 2019 Proxy Statement | Etsy |
•
Revenue—Revenue roseincreased by 33%36.8% year-over-year to a total of $365 million.$603.7 million, up from $441.2 million in 2017, led by Marketplace revenue growth of 35.2%.
• Net income—Net income was $77.5 million compared with $81.8 million in 2017.
Non-GAAP Adjusted EBITDA—Non-GAAP Adjusted EBITDA was $139.5 million representing an increase of 74.4% year-over-year, compared to $80.0 million in 2017.Non-GAAP Adjusted EBITDA margin (i.e.,non-GAAP Adjusted EBITDA divided by revenue) was 23.1%, compared to 18.1% in 2017. See“Non-GAAP Financial Measures” for a reconciliation of Adjusted EBITDA to net income, the most directly comparable financial measure calculated in accordance with GAAP.
Active Sellers and Active Buyers—Our active seller community grew to 1.72.1 million (up 12%9.4% from 2015)2017) and theour active buyer community grew to 28.639.4 million (up 19%18.2% from 2015)2017).
2018 Executive Compensation Highlights
Our 2018 executive compensation program was designed to be a straightforward and thoughtful pay-for-performance approach. The principal components of compensation for our NEOs were determined considering the items described below under “Factors Used in Determining Executive Compensation.”
Compensation for our NEOs was reflective of our strong financial performance. Our 2018 annual cash incentive program resulted in an aggregate corporate performance percentage of 158% based on the strong achievement of GMS, Revenue and Adjusted EBITDA performance levels.
As described in our proxy statement for our 2018 Annual Meeting of Stockholders, our CEO, Mr. Silverman did not receive a long-term incentive grant in 2018 in light of the front-loaded equity grant he received in May 2017 that was intended to induce him to join Etsy and provide him with a meaningful equity stake in the company that would align his interests with those of our stockholders. Mr. Silverman’s offer letter states that he is not eligible to receive additional equity grants until May 2021.
Stockholder Outreach
Stockholders approved our 2018say-on-pay proposal with 59% of the votes cast in favor of the proposal, which was a significant departure from our 2017say-on-pay proposal that was approved with over 96% of the votes cast. In response to the 2018 say-on-pay vote, we conducted an extensive outreach initiative seeking feedback from Etsy investors to better understand their views regarding Etsy’s compensation program and practices. We reached out to stockholders representing approximately 50% of our common stock outstanding and held discussions with stockholders representing nearly 33% of our common stock outstanding (some investors declined our invitation to engage). Several meetings included a member of our Board of Directors—either a representative from the Compensation Committee or our Board Chair. Based on feedback from investors and others, the Compensation Committee (the “Committee”) believes the lowersay-on-pay vote last year was primarily due toone-time events inmid-2017 related to the turnaround of our business. In 2017, our Board of Directors made deliberate and important decisions to change our management team and redirect our business strategy. In order to induce Mr. Silverman to join Etsy as our Chief Executive Officer, he received aone-time front-loaded equity grant. This significant grant gave Mr. Silverman a meaningful equity stake in Etsy that aligned
| 37 | 2019 Proxy Statement | Etsy |
•
his interests with those of our stockholders. Mr. Silverman is not eligible to receive additional equity awards until May 2021. In addition, once the new management team was in place, the Committee made aone-time mid-year modification of our 2017 annual cash incentive program performance targets to better align the 2017 annual incentive program with the new business strategy and to incentivize the performance and retention of our executive officers and other participants, who were critical to the successful execution of Etsy’s new business strategy and turnaround.
The investors we spoke to acknowledged that they understood theseone-time steps were taken in light of the exigent circumstances related to our 2017 strategic and management transition. Investors also encouraged Etsy to continue to drive accountability and results through a robust pay for performance approach to executive compensation. Since 2017, we have not made additional front-loaded grants and have not modified our annual cash incentive program targets mid-year and, based on investor feedback, we do not intend to do so within our current executive compensation program. In addition,the Committee will consider including performance-based equity awards in our executive compensation program in the future.
The Board of Directors and the Committee value the opinions of our stockholders and will continue to consider the voting outcome of futuresay-on-pay proposals and investor feedback received throughout the year when making compensation decisions for our executive officers.
For a more detailed discussion of our stockholder engagement, please see “Proxy Statement Summary — Stockholder Engagement.”
Key Components and Design of the Executive Compensation Program
ELEMENT | TYPE | PRIMARY OBJECTIVE | REWARD REALIZED ON | |||
Base Salary | Fixed | Attract and Retain | Service | |||
Annual Cash Incentive | Variable | Short-Term Company and Individual Performance | Revenue, Adjusted EBITDA Margin, GMS, Individual Goals | |||
Long-Term Incentive | Variable | Stockholder Alignment and Long-term Value Creation | Stock Price | |||
We had several successful product launches including a new seller service, Pattern by Etsy, Google Shopping,also provide post-employment compensation payments and benefits and other benefits, such as health and wellness benefits, management coaching, skills workshops and training, and a partnership with Intuit.Section 401(k) plan and match. Our executive officers generally participate in the standard employee benefit plans and programs available to our other employees.
Base Salary
Base salary represents the fixed portion of the compensation of our executive officers, including our NEOs. Generally, although the Committee seeks to set base salaries at competitive levels, the actual positioning of executive officer base pay will also be based on the Committee’s assessment of the factors described in the section titled “Factors Used in Determining Executive Compensation.” The 2018 base salary decisions are described below as part of the holistic presentation of each NEO’s 2018 target total compensation.
| 38 | 2019 Proxy Statement | Etsy |
• We laid
Annual Cash Incentive Program
Overview
Our annual cash incentive program is intended to reward participants for the groundworkachievement of our short-term financial and operational objectives and their individual performance. For 2018, annual cash incentive award payments were based 70% on the achievement of corporate performance objectives and 30% on the achievement of individual performance objectives, except in the case of our CEO, whose annual cash incentive award payment was based 80% on the achievement of corporate performance objectives and 20% on the achievement of individual performance objectives, reflecting his greater responsibility for big steps forwardour overall performance.
Target Annual Cash Incentive Opportunities
The Committee reviews the target annual cash incentive award opportunities (which are expressed as a percentage of annual base salary) of our executive officers each year as part of its annual executive compensation review and makes adjustments after considering the factors described below in 2017“Factors Used to Determine Executive Compensation.” Generally, the Committee seeks to set the target annual cash incentive award opportunities of our executive officers so that target total cash compensation (the sum of annual base salary and the target annual cash incentive award opportunity) is at a competitive level, when considering our Compensation Peer Group (as defined below) but did not target a specific percentile of our Peer Group in 2018.
2018 Corporate Performance Objectives
In March 2018, the Committee selected revenue, adjusted EBITDA margin, and GMS as the corporate performance objectives for our 2018 annual cash incentive program, which is consistent with prior years. Targets for all three measures require meaningful year-over-year performance. The Committee selected revenue and adjusted EBITDA margin because it believes that these measures provide a balance between generating revenue, managing our expenses and growing our business, thereby directly influencing the creation of long-term value for our stockholders. The Committee selected GMS because it believes that it is an indicator of the success of Etsy Studiosellers, the satisfaction of Etsy buyers, the health of our ecosystem and Shop Manager, leveragingthe scale and growth of our platform investments in search, payments, machine learning,business, and, marketing services.
Financial Performance Measure
| Weighting
| Threshold
| Target
| Stretch
| Kicker
| |||||||||||||||
Revenue
|
| 40
| %
| $
| 533,889,205
|
| $
| 573,599,972
|
| $
| 600,073,817
|
| $
| 605,368,586
|
| |||||
Adjusted EBITDA Margin
|
| 20
| %
|
| 20.0
| %
|
| 23.1
| %
|
| 25.0
| %
|
| 25.5
| %
| |||||
GMS
|
| 40
| %
| $
| 3,709,114,463
|
| $
| 3,774,186,646
|
| $
| 3,871,794,922
|
| $
| 3,904,331,014
|
| |||||
| 39 | 2019 Proxy Statement | Etsy | ||
|
In March 2019, the Committee determined our actual performance with respect to the corporate performance measures for the 2018 annual cash incentive program resulted in an aggregate corporate performance percentage of 158% based on the following achievements:
For 2019, we will continue to use GMS, revenue, and adjusted EBITDA margin for our annual cash incentive program, as we continue to believe these are the performance metrics that best reflect the success of our business. GMS will be weighted 40% and revenue and adjusted EBITDA margin will each be weighted 30%.
In March 2019, the Committee also reviewed each NEO’s individual performance, considered our CEO’s recommendations with respect to the individual performance of our other NEOs, and determined a performance achievement percentage for each NEO. A portion of each NEO’s actual 2018 annual cash incentive payment was based on the evaluation of each NEO’s individual performance achievements, as described below.
The Long-Term Incentive Awards We view long-term incentive compensation in the form of equity awards as a critical element of our executive compensation Typically, the Committee grants stock options and/or RSUs to newly-hired executive officers, in connection with promotions, as a reward for superior performance and/or for retention purposes. In addition, our NEOs typically receive annual equity awards. Generally, when determining the type and
2018 NEO Compensation Decisions Below are summaries of the Committee’s decisions about 2018 compensation for each of our NEOs. As described below, when making the 2018 compensation decisions, the Committee focused primarily on the factors set forth in the section titled “Factors Used in Determining Executive Compensation” and the details noted below for each NEO. President and Chief Executive Officer Josh Silverman In 2018, Mr. Silverman received the following compensation and benefits: Base Salary: $400,000, increased from $375,000 in March 2018 in light of his job responsibilities and performance and peer group comparisons. In March 2019, the Committee increased Mr. Silverman’s base salary from $400,000 to $500,000 again in light of his job responsibilities and performance and peer group comparisons. Annual Incentive: Eligibility to participate in Etsy’s management cash incentive plan with a target bonus of 100% of base salary, based 80% on the achievement of corporate performance objectives and 20% on individual performance. The actual 2018 performance bonus paid was $640,000, reflecting 160% of target bonus. To determine the individual component of Mr. Silverman’s bonus, which was assessed at 168% of target, the Committee considered Mr. Silverman’s overall leadership of our organization and his performance with respect to developing and executing our 2018 operating plan priorities and delivering strong financial results. In particular, it acknowledged his success in improving the product experience, executing a revised fee structure, evolving internal infrastructure and processes, developing a 2019 operating plan and long-term strategy, staffing our senior leadership and engineering teams, improving diversity, and bringing our employee attrition rate below industry benchmark. In March 2019, the Committee determined that Mr. Silverman’s target bonus should remain at 100% of base salary. Long-Term Incentive: Mr. Silverman did not receive an equity award in 2018. In May 2017, the Committee granted Mr. Silverman an equity award, in the form of stock options and RSUs, that was purposefully front-loaded to induce Mr. Silverman to join Etsy and to provide Mr. Silverman with a meaningful equity stake in the company that would align his interests with those of our stockholders. As a result, Mr. Silverman’s offer letter states that he is not eligible to receive additional equity grants until May 2021. Chief Financial Officer Rachel Glaser In 2018, Ms. Glaser received the following compensation and benefits: Base Salary: $375,000. The Committee did not increase Ms. Glaser’s base salary from the level determined in connection with her May 2017 offer letter. In March 2019, the Committee
Annual Incentive: Eligibility to participate in Etsy’s management cash incentive plan with a target bonus of 75% of base salary, based 70% on the achievement of corporate performance objectives and 30% on individual performance. The actual 2018 performance bonus paid was $410,000, reflecting 146% of target bonus. To determine Ms. Glaser’s individual performance portion of her bonus, which was assessed at 115% of target, the Committee considered Ms. Glaser’s performance with respect to developing and executing our 2018 operating plan priorities and delivering strong financial results, and strengthening our finance organization, particularly in deepening its integration into the business. In addition, the Committee noted her leadership in the 2019 annual planning process, and enhanced forecasting and overall financial management. In March 2019, the Committee determined that Ms. Glaser’s target bonus should remain at 75% of base salary. Long-Term Incentive: In March 2018, we granted Ms. Glaser an equity award with a value of $1,250,000, 50% in stock options and 50% in RSUs. The Committee believed the mix of options and RSUs was appropriate in order to align with stockholder interests. The options and RSUs vest in eight equal semi-annual installments, beginning on October 1, 2018, provided she remains in service with us on each vesting date. Travel Reimbursement:Pursuant to Ms. Glaser’s offer letter, Ms. Glaser was entitled to a travel allowance, in connection with her relocation from Los Angeles, of up to $3,000 per month, grossed up for tax purposes, through April 2018 for her travel between New York and Los Angeles. In 2018, the Committee extended her travel allowance, without a taxgross-up, from May 2018 through April 2019. In 2019, the Committee extended this benefit in the form of a $36,000 travel allowance to cover travel between New York and Los Angeles from May 2019 through April 2020. Chief Technology Officer Mike Fisher In 2018, Mr. Fisher received the following compensation and benefits: Base Salary: $325,000. The Committee did not increase Mr. Fisher’s base salary in 2018 from the level determined in connection with his July 2017 offer letter. In March 2019, the Committee increased Mr. Fisher’s base salary from $325,000 to $400,000 in light of his job responsibilities and performance and peer group comparisons. Annual Incentive: Eligibility to participate in Etsy’s management cash incentive plan with a target bonus of 75% of base salary, based 70% on the achievement of corporate performance objectives and 30% on individual performance. The actual 2018 performance bonus paid was $360,000, reflecting 148% of target bonus. To determine Mr. Fisher’s individual performance percentage, which was assessed at 125% of target, the Committee considered Mr. Fisher’s overall leadership of our organization and his performance with respect to delivery of our 2018 financial plan while maintaining strong site availability. In addition, the Committee noted his success in leading our migration to the cloud, staffing our engineering teams, and bringing the engineering attrition rate below industry benchmark. In March 2019, the Committee determined Mr. Fisher’s target bonus should remain at 75% of base salary.
Long-Term Incentive: Mr. Fisher did not receive an equity award in 2018 in light of thesign-on equity awards he received in August 2017, which were intended to induce him to join the company and to align his interests with those of our stockholders. Travel Allowance:In 2019, the Committee provided Mr. Fisher with a $36,000 travel allowance to cover travel between New York and Ohio from May 2019 through April 2020. General Counsel and Secretary Jill Simeone In 2018, Ms. Simeone received the following compensation and benefits: Base Salary: $325,000. The Committee did not increase Ms. Simeone’s base salary from the level determined in January 2017. In March 2019, the Committee increased Ms. Simeone’s base salary from $325,000 to $355,000 in light of her job responsibilities and performance and peer group comparisons. Annual Incentive: Eligibility to participate in Etsy’s management cash incentive plan with a target bonus of 60% of base salary, based 70% on the achievement of corporate performance objectives and 30% on individual performance. The actual 2018 performance bonus paid was $290,000, reflecting 149% of target bonus. To determine Ms. Simeone’s individual performance percentage, which was assessed at 125% of target, the Committee considered Ms. Simeone’s overall leadership of our organization, particularly in strengthening the policy, advocacy, and legal teams through enhanced processes. The Committee also noted her strong performance as a trusted strategic advisor to the executive team and the Board. In March 2019, the Committee determined that Ms. Simeone’s 2019 target bonus should remain at 60% of base salary. Long-Term Incentive:In March 2018, we granted Ms. Simeone an equity award with a value of $1,000,000, 50% in stock options and 50% in RSUs. The Committee believed the mix of options and RSUs was appropriate in order to align with stockholder interests. The options and RSUs vest in eight equal semi-annual installments, beginning on October 1, 2018, provided she remains in service with us on each vesting date. Former Chief Operating Officer Linda Findley Kozlowski Overview: Ms. Kozlowski stepped down as our Chief Operating Officer effective January 2, 2019. She made valuable contributions throughout her tenure, particularly in leading Etsy through the management and strategic transitions, and her key role in driving our organizational redesign and product roadmap. As a result, the Committee believed that it was important for her to stay at Etsy throughyear-end. In September 2018, Etsy entered into a retention letter agreement with Ms. Kozlowski addressing the terms of her remaining service to Etsy and her departure. The letter agreement provided certain retention benefits to Ms. Kozlowski to induce her to remain in her role through January 2019, as described below.
Compensation Decisions: Below is a summary of Ms. Kozlowski’s 2018 compensation and benefits: Base Salary: $350,000. The Committee did not increase Ms. Kozlowski’s base salary from the level determined in March 2017. Annual Incentive: None. The Committee determined to maintain the target annual cash bonus opportunity for Ms. Kozlowski at 75%. However, Ms. Kozlowski did not receive an annual cash incentive payment for 2018 due to her departure prior to the payment date. Long-Term Incentive: In March 2018, Ms. Kozlowski received an aggregate equity award with a value of $1,750,000, 50% in stock options and 50% in RSUs. The Committee believed the mix of options and RSUs was appropriate in order to align with stockholder interests.One-eighth of the stock options and RSUs vested on October 1, 2018. The unvested portion of the stock options and RSUs were forfeited in connection with her departure from Etsy, as described below. Retention: In September 2018, Etsy and Ms. Kozlowski entered into a retention agreement that provided for certain compensation and benefits as an inducement for Ms. Kozlowski’s continued services as our COO through January 2, 2019: Continuation of her base salary for six months; Reimbursement of COBRA premiums for up to six months; Aone-time lump-sum payment of $262,500; Accelerated vesting of 100% of the stock options and RSUs granted on June 1, 2016 and March 15, 2017; and Forfeiture of the unvested portion of the stock options and RSUs granted on March 15, 2018. In return for these benefits, Ms. Kozlowski provided a release and waiver of claims and agreed to comply with certainnon-solicitation,non-competition, confidentiality,non-disparagement, and cooperation provisions. Other Benefits Health & Wellness We provide health benefits to our Limited Perquisites and Other Personal Benefits Other than the travel benefits extended to Ms. Glaser and Mr. Fisher, we do not typically provide perquisites to our executive officers, including our NEOs, that are not available to employees generally. From time to time, however, we may provide such benefits for recruitment or retention purposes. 401(k) Plan Like other US employees, our NEOs may participate in a 401(k) Plan. Etsy matches 50% of
Post-Employment Compensation Arrangements We Maintaining competitive severance and change in control arrangements helps assure our executive officers that their severance payments and benefits are comparable to those of other executive officers with similar levels of responsibility and tenure. We also believe that the Plan will serve as an incentive for our executive officers to remain employed and focused on In addition, the Plan is intended to reduce the need to negotiate post-employment compensation arrangements on acase-by-case basis and helps to mitigate potential employer liability. For example, Plan participants are required to sign a separation and release agreement as a condition to receiving post-employment compensation payments or benefits. See “Potential Payments Upon Termination or Change of Control” below for
Executive Compensation Philosophy and Objectives Key Features of our
Our Guiding Philosophy Pay-for-Performance Philosophy We generally target a compensation mix for our
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| |
| Named Executive Officer | Base Salary Increases(1) | Actual Cash Incentive
| 2016 Grant of Stock Options (# of shares)(3) | 2016 Grant of RSUs (# of shares)(4) | ||||||||||||
Chad Dickerson
|
| –
|
|
| 132
| %
|
| 300,000
|
|
| –
|
| ||||
Kristina Salen(5)
|
| 6.25
| %
|
| 128
| %
|
| 93,248
|
|
| 47,425
|
| ||||
John Allspaw
|
| 3.5
| %
|
| 121
| %
|
| –
|
|
| –
|
| ||||
Linda Kozlowski
|
| –
|
|
| 131
| %
|
| 148,209
|
|
| 72,004
|
| ||||
Jordan Breslow(6)
|
| 9.1
| %
|
| –
|
|
| 93,248
|
|
| 47,425
|
| ||||
|
|
|
|
| |
|
| |
|
| |
|
| |
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| |
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| |
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If you have any questions about giving your proxy or require assistance, please contact our proxy solicitor at: info@saratogaproxy.com,(212)257-1311 or Saratoga Proxy Consulting, LLC, 520 8th Avenue, 14th Floor, New York, NY 10018. Other Business We do not know of any other business that may be presented at the Annual Meeting. If any other matters are properly presented at the Annual Meeting, the persons named on the proxy card will have discretion to vote on the matters in accordance with their best judgment.
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