UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
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CHECK THE APPROPRIATE BOX: | ||
☐ | Preliminary Proxy Statement | |
☐ | Confidential, | |
☑ | Definitive Proxy Statement | |
☐ | Definitive Additional Materials | |
☐ | Soliciting Material |
Bloom Energy CorporationCorp.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Thanother than the Registrant)
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Notice and Proxy
Statement 2022
© 2022 Bloom Energy, Inc. All rights reserved.
Bloom Energy An unwavering passion for creating | ||
empowers businesses and communities to responsibly take charge of their energy. | Resilient Uniterrupted power | Predictable Certain power price | Sustainable Addressing both the |
Dear Stockholder,
It is my pleasure to invite you to our annual meeting of stockholders. The meeting is scheduled for 9:00 a.m. Pacific Time on Wednesday, May 12, 2021.
This year, in light of the COVID-19 pandemic, we will again be conducting the annual meeting online for the safety of our stockholders, directors and employees.
The Annual Meeting live webcast can be found at www.virtualshareholdermeeting.com/BE2021. See page 80 for more information on how to participate in the virtual annual meeting.
Strong 2020 Performance
2020 was a year of tremendous challenge for the world, our country and our company. Despite the challenges of 2020, we executed well on the annual goals laid out in our strategic plan, and implemented a framework that positions Bloom for future growth and to remain at the forefront of innovation in the energy sector. Among our accomplishments:
Dear Stockholder, It is my pleasure to invite you to our annual meeting of stockholders. I am delighted to report that 2021 was a record year for Bloom Energy. We executed and delivered | ||||
So, let me highlight several things that reflect our progress and our exceptional performance this year: ● We reached nearly $1 billion in total revenue. ● Despite global supply chain challenges, we shipped record volumes of ● Our year-over-year-backlog grew nearly 228 percent by number of Energy Server systems ordered and ● Through collaborations with EPC and financing partners, we simplified our business model by transferring ownership of our Energy Servers on shipment, which in turn improves the predictability of our revenue and improves our margins. ● We solidified our partnership in the Republic of Korea with SK ecoplant with their equity investment in Bloom Energy and their commitment to acquire a minimum guaranteed 500 megawatts of Energy Servers through 2024. ● To support our growth targets, we secured a 164,000 square-foot manufacturing facility in California, which will provide one gigawatt of annual stack and column manufacturing capability when fully utilized. This plant supports the two gigawatts of annual assembly capacity we have in Delaware. ● Our cash balances reached $615 million as of the end of 2021, with $396 million as unrestricted cash. | ||||
Leading Energy Sector Decarbonization As the From the onset, decarbonization was at the core of our To that end, all our product solutions advance decarbonization starting with our core product offering, the Bloom Energy Server. With its resiliency and reliability, the Bloom Energy Server protects against the | ||||
Resilient People, Resilient Culture, Resilient Solutions
If I were to describe Bloom in one word, it would be resilient, which is reflected in our people, culture, employees, products and services.
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Letter to Our Stockholders
Leading the Energy Industry TransformationLETTER TO OUR STOCKHOLDERS
This same Bloom Energy is at the forefront of innovation in the energy sector, addressing the critical needServer provides for resiliency, predictability and sustainability today - on the pathway to low and zero carbon energy. Theeven greater decarbonization given its fuel flexibility of our currently availableand carbon capture capabilities. The Bloom Energy Server platform provides customers withcan run on biofuels or hydrogen or can be upgraded later as those fuels become more available and economical. In addition, the ability to run ourBloom Energy ServersServer running on natural gas biogashas a very pure CO2 anode exhaust that enables carbon capture and allows its utilization and sequestration. The Bloom Energy Server running on natural gas can seamlessly transition to a net-zero emission solution when required by markets and customers.
Decarbonizing the marine industry is another critical area to address. A modified Bloom Energy Server can provide sustainable, reliable and efficient power to help meet carbon-reduction mandates from the International Maritime Organization, obsoleting the dirty fuels that are used today. We received key industry certifications and made progress with our development partners Samsung Heavy Industries and Chantiers de l’Atlantique.
Finally, we officially launched our Bloom Electrolyzer, using the same energy conversion platform as the Bloom Energy Server. Our award winning electrolyzer is the most efficient on the market and will produce more hydrogen blends today. Ourwith less electricity. This advantage is unique to the solid oxide platform also allows uswhere our efficiency advantage will range from 15% to deliver45% depending on the application. We are distinctly positioned to scale and meet market demand as our electrolyzer is built on a near-term commitmentmature platform, shares a common supply chain and the manufacturing capacity is ready.
Continuous innovation is core to achieveour company’s success and value creation potential. We are capitalizing on the power of our flexible and scalable technology to quickly adapt our direct energy conversion platform for new applications and cost-effective hydrogen solutions – both in front of and behindmarkets as they develop. One such area is the meter – within thewaste-to-energy sector. Demand for renewable natural gas-fed power generation and transportation industries.renewable fuels is continuing to outpace supply. Our solutions in this high-growth sector serve customers’ need for clean baseload electricity; tap into the steep growth in waste collection and aggregation driven by local mandates; and capitalize on the market incentives for making low-carbon intensity fuels. In 2021, we announced our first biogas project, installing the Bloom Energy Server at a dairy farm in California. Our Energy Server captures the methane gas released from manure to create electricity. This demonstrates our Energy Servers’ expansive capability to provide on-site, resilient electricity from multiple fuel sources while eliminating harmful emissions.
As we move into the year ahead, we plan to assess and develop additional international markets that value our product pathway to decarbonization and build on our successful approach to developing ecosystem partner relationships, like those with SK ecoplant in the Republic of Korea, to scale our presence efficiently and effectively.
The Year AheadA Talented and Diverse Team Committed to Our Core Values
Our success is linked directly to our talented and engaged employees who believe in our mission and embrace our core values. In 2021, we asked our team to BE Bold, BE Inspired and BE Agile. Our team responded by executing on new innovative products, developing new partnerships to enable scale, pursuing new territories and delivering on customer expectation – all of which enabled us to achieve record financial and operating results. As we focus on execution in the years ahead, we will continue to make Bloom Energy a rewarding place to work, where the safety, health and well-being of our employees comes first, and where individualism and diversity, equity and inclusion are celebrated and our united sense of mission and purpose are self-evident.
We have assembled a dream team of leaders to commercialize our offerings in hydrogen generation, power generation with renewable fuels and marine transportation. These talented executives led divisions in the same verticals for market-leading companies. Today, they are at Bloom Energy because they are confident that we will disrupt these multibillion-dollar markets with our groundbreaking products. We will continue to invest in hiring and continuously developing talent.
Delivering on our Mission
As we look to the year ahead,future, we believe the tailwinds for our value proposition has never been more compelling.business are significant. The impactsdemand for cost-predictable, reliable, resilient and clean energy solutions is growing. We recognize that solving the climate crisis and delivering energy security is at a critical juncture and we intend to both accept the responsibility and seize the opportunity by offering solutions that empower businesses and communities to take charge of climate changetheir energy and to choose how and when they fully decarbonize.
We are being felt worldwideexecuting on our strategic plan with the talent, technology and are exposingresources to capitalize on opportunities in the fragilities of the grid. Policymakers heremarketplace.
So what powers us at home and abroad are calling for actions thatBloom Energy? It is our American-made technology is well-suited to address.
As we are on the verge of emerging from the COVID-19 crisis, I truly believe we are a stronger and better company today than when the crisis started last winter. We have a strong leadership team, a strengthened balance sheet, new solutions, new markets and multiple pathways to low and zero carbon energy. And, our private-sector energy solution, combined with public policy imperatives have created a powerful moment of opportunity for which Bloom Energy is exceedingly well-positioned, moving us further along the road to achieving ourfoundational mission to make clean, reliable andenergy affordable energy for everyone in the world.
The world will be a better place when we succeed in our mission.
On behalf of the entire Bloom Energy Board of Directors, I thank you for your continued interest in and support of our company.
Sincerely,
KR Sridhar
Founder, Chairman and Chief Executive Officer
March 31, 20212022
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Notice of Annual Meeting of Stockholders
Date and Time May | Location Online Meeting at | Who Only stockholders of record as of the close of business on March |
Voting Items
Proposals to be voted on at the 20212022 Annual Meeting:
Proposal | Board Vote Recommendation | For Further Details | |||
1. | To elect the | FOReach director nominee | Page | ||
2. | |||||
To approve, on an advisory basis, the compensation of our named executive officers, as described in the Proxy Statement. | FOR One Year | Page 73 | |||
3. | To approve an amendment to our restated certificate of incorporation to increase the authorized shares of preferred stock from 10,000,000 to 20,000,000, and to increase the total authorized shares of capital stock from 1,210,000,000 to 1,220,000,000. | FOR | Page | ||
4. | To approve an amendment to the choice of forum provisions in our restated certificate of incorporation to, among other things, align with the bylaws. | FOR | Page 76 | ||
5. | To approve an amendment and restatement of the Bloom Energy Corporation 2018 Employee Stock Purchase Plan to increase the number of shares authorized for issuance thereunder by 10,000,000 shares. | FOR | Page 78 | ||
6. | To ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending December 31, | FOR | Page |
Stockholders will also transact any other business that may be properly brought before the 20212022 Annual Meeting or any adjournment, continuation or postponement thereof.
To attend the meeting online, vote, view the stockholder list or submit questions, stockholders will need to go to the Annual Meeting website noted and log in using the control number provided on their proxy card, Notice of Internet Availability or voting instruction form. The foregoing proposals are more fully described in the Proxy Statement accompanying this Notice.
Your vote as a Bloom Energy stockholder is very important. Holders of Class A common stock are entitled to one vote per share. Holders of Class B common stock are entitled to ten votes per share. If you are a registered holder and have questions regarding your stock ownership, you may contact our transfer agent, American Stock Transfer & Trust Company, through its website at www.astfinancial.com or by phone at 1-800-937-5449.
In the event of a technical malfunction or other situation that the meeting chair determines may affect the ability of the meeting to satisfy the requirements for a meeting of stockholders to be held by means of remote communication under the Delaware General Corporation Law, or that otherwise makes it advisable to adjourn the meeting, the chair of the meeting will convene the meeting at 9:30 a.m. Pacific Time on the date specified above and at our address at 4353 North First Street, San Jose, CA 95134200 Christina Pkwy, Newark, DE 19713 solely for the purpose of adjourning the meeting to reconvene at a date, time and physical or virtual location announced by the meeting chair. Under either of the foregoing circumstances, we will post information regarding the announcement on the investors page of our website at investor.bloomenergy.comhttps://investor.bloomenergy.com..
All stockholders of record as of the close of business on March 15, 2022 may attend the 2022 Annual Meeting online. On or about March 31, 2022, we will mail to most of our stockholders a Notice of Internet Availability of Proxy Materials containing instructions on how to access our proxy materials, including our Proxy Statement and Annual Report. Whether or not you expect to attend the 2022 Annual Meeting online, we encourage you to read the Proxy Statement and vote through the internet or by telephone or request and submit your proxy card or voting instruction form as soon as possible so that your shares may be represented at the meeting.
By Order of the Board of Directors
Shawn M. Soderberg
Executive Vice President, General Counsel and Secretary
March 31, 20212022
How to Vote
INTERNET Before the Annual Meeting:
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TELEPHONE 1-800-690-6903 |
Mark, sign, date and promptly mail | ||||||
All stockholders of record as of the close of business on March 16, 2021 may attend the 2021 Annual Meeting online. Whether or not you expect to attend the 2021 Annual Meeting online, we encourage you to read the Proxy Statement and vote through the internet or by telephone or request and submit your proxy card or voting instruction form as soon as possible so that your shares may be represented at the meeting.
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting to be held on May 12, 2021.
The Notice and Proxy Statement and Annual Report on Form 10-K are available at www.proxyvote.com.
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting to be held on May 11, 2022. |
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SIGNIFICANT INFORMATION IN THIS SECTION | ||
Board Membership Criteria | 24 | |
Our Board | 26 | |
Director Skills and Experience | 29 | |
Director Independence | 34 | |
Board Leadership Structure | 34 | |
Stockholder Engagement | 40 | |
Related-Party Transactions | 43 |
Certain statements in this Proxy Statement, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives and expected operating results, statements regarding our environmental and other sustainability plans and goals, and the assumptions upon which those statements are based, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements may appear throughout this report. These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties, which may cause actual results to differ materially from the forward-looking statements. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events, or otherwise. Website references throughout this document are provided for convenience only, and the content on the referenced websites is not incorporated by reference into this document. |
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Proxy Statement SummaryWho We Are
This proxy statement (the “Proxy Statement”)Company Overview
Bloom Energy’s mission is being furnished to make clean, reliable energy affordable for everyone in the stockholdersworld. We empower businesses and communities to responsibly take charge of their energy and choose their path to decarbonization. Our leading solid oxide Energy Server for distributed generation of electricity and hydrogen is changing the future of energy.
Our fuel-flexible Bloom Energy Corporation,Servers can use a Delaware corporation (“Bloom”, “we”, “us” or “our”), in connection with the solicitationvariety of proxies byfuels to create resilient, sustainable, and cost-predictable power at significantly higher efficiencies than traditional, combustion-based resources. The same energy conversion platform that powers our Board of Directors (the “Board”) for use at our 2021 annual meeting of stockholders (the “2021 Annual Meeting”). The record dateEnergy Servers can be used to produce clean hydrogen, which is increasingly recognized as a critically important tool necessary for the Annual Meeting is March 16, 2021 (the “Record Date”). Only stockholders of record at the close of business on that date may vote at the 2021 Annual Meeting or any postponement or adjournment thereof. On or about March 31, 2021, we will mail to most of our stockholders a Notice of Internet Availability of Proxy Materials (the “Notice”) containing instructions on how to access our proxy materials, including our Proxy Statement and Annual Report on Form 10-K for the year ended December 31, 2020 (the “Annual Report”).
The 2021 Annual Meeting will be held online via live webcast at www.virtualshareholdermeeting.com/BE2021 on Wednesday, May 12, 2021 at 9:00 a.m. Pacific Time. This year’s question and answer session will include questions submitted in advance of, and questions submitted live during, the 2021 Annual Meeting. You may submit a question in advancefull decarbonization of the 2021 Annual Meeting at www.proxyvote.com after logging in with your control number. You will also be able to vote your shares electronically at the annual meeting. Questions may be submitted during the 2021 Annual Meeting through www.virtualshareholdermeeting.com/BE2021.energy economy.
We have adopted a virtual format for our 2021 Annual Meeting to make participation accessible for stockholders from any geographic location with internet connectivity. In addition, in light of continued concerns regarding the COVID-19 pandemic,At Bloom Energy, we believe it is best to adherelook forward to a virtual format for 2021net-zero future, and even today, our future-proof technology delivers reliable, low-carbon power. The value we provide to protect the healthour customers is optionality and well-being of our stockholderschoice to ensure energy resiliency and employees. We hope to resume holding in-person stockholder meetings next year.security, cost predictability, and sustainability.
For additional information on the 2021 Annual Meeting and your vote, please see the “User’s Guide” toward the back of this Proxy Statement.
Here are highlights of important information you will find in this Proxy Statement. As it is only a summary, please review the complete Proxy Statement before you vote.
Summary of Stockholder Voting Matters
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Proxy Statement SummaryWho We Are
Our Board atA Resilient, Energy Conversion Platform Designed for a GlanceNet-Zero Future
The Board has nominated Michael Boskin, John T. Chambers and L. John DoerrThere are many factors driving demand for election as Class III directors to hold office untilour technology across the 2024 Annual Meetingenergy landscape. Some of Stockholders. For detailed information about each director’s background, qualifications and skill sets, please see “Our Board” later in this Proxy Statement.
Director | Committees | Other Current Public | |||||||||
Name and Primary Occupation | Age | Since | AC | CC | N/GC | Company Boards | |||||
Michael Boskin IND Professor of Economics and Hoover Institution Senior Fellow, Stanford University | 75 | 2019 | 1 | ||||||||
John T. Chambers IND Founder and Chief Executive Officer at JC2 Ventures and former Chairman and CEO of Cisco | 71 | 2018 | 0 | ||||||||
L. John Doerr IND General Partner of Kleiner Perkins | 69 | 2002 | 5 | ||||||||
General Colin L. Powell Former U.S. Secretary of State | 83 | 2009 | 1 | ||||||||
Scott Sandell IND Managing General Partner at New Enterprise Associates, Inc. | 56 | 2003 | 3 | ||||||||
KR Sridhar Founder, Chairman and Chief Executive Officer of Bloom Energy | 60 | 2002 | 0 | ||||||||
Mary K. Bush IND President of Bush International, LLC | 72 | 2017 | 3 | ||||||||
Jeffrey Immelt IND Venture Partner at New Enterprise Associates, Inc. and former Chairman and CEO of General Electric | 65 | 2019 | 3 | ||||||||
Eddy Zervigon IND CEO of Quantum Xchange | 52 | 2007 | 1 |
these include:
● | are powered by a range of fuels from certified low-leak natural gas to biogas and hydrogen. At a time where global uncertainty has reestablished calls for energy independence, these servers can be migrated from one fuel to another over time to further enable customer choice on the balance of affordability and emissions. In addition, we are a pioneer in our commitment to use low-leak certified gas across our entire customer fleet. Responsibly sourced gas is certified to have a lower than average methane leak rate than typical natural gas. The Bloom Energy Server also enables carbon capture when using natural gas and allows for its utilization or sequestration, which provides those customers looking to advance their net-zero carbon emissions goals with another benefit beyond resiliency, reliability and cost-predictability. | ||||||||
● | |||||||||
● | Hydrogen is key to a net-zero future. Hydrogen is a truly clean alternative for fossil fuels. We believe that we are uniquely positioned for the growing hydrogen economy. Using the same solid oxide energy conversion platform as our Energy Server, the Bloom Electrolyzer enables scalable and cost-effective hydrogen solutions. Our modular design makes the Bloom Electrolyzer ideal for applications across gas, utilities, nuclear, solar, wind, ammonia and heavy industries. Because it operates at high temperatures, the Bloom Electrolyzer produces hydrogen more efficiently than low-temperature PEM and alkaline electrolyzers. As electricity accounts for up to 80 percent of the cost of hydrogen from electrolysis, using less electricity increases the economics of hydrogen production and helps bolster adoption. Critical for a net-zero economy, green hydrogen can be produced by the Bloom Electrolyzer when powered by 100 percent renewable electricity. | ||||||||
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Proxy Statement Summary
Corporate Governance Highlights
Proxy Statement Summary
Transition from Emerging Growth Company Status to Large Accelerated Filer
Beginning on January 1, 2020, we transitioned from our status as an emerging growth company to a large accelerated filer. This requires us to make additional disclosure in this Proxy Statement, including:
Executive Compensation Highlights
Our 2020 compensation plans and payouts for our named executive officers reflect our overarching philosophy of pay-for-performance. Highlights of our compensation program include:
As shown below, approximately 50% of the target total compensation awarded to our CEO and 30% awarded to our other named executive officers (other than Mr. Cameron) was at-risk in the form of our cash annual incentive and performance-based equity, both of which were eligible to be earned based on our level of achievement of rigorous financial goals.
Proxy Statement Summary
In addition, the Compensation Committee seeks to ensure that we maintain sound governance and compensation policies and practices. In designing and overseeing our executive compensation program, we strive to employ best practices and regularly assess our policies and practices.
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Company Overview
With roots in NASA’s space program, we were born from innovation. We created the first large-scale, commercially viable solid oxide fuel-cell based power generation platform that delivers highly reliable, clean, resilient and cost-effective power to businesses, essential services and critical infrastructure. Our technology, invented in the United States and manufactured by American workers, is the most advanced on-site power generation technology on the market today. Our Energy Servers convert natural gas, biogas, or hydrogen into electricity at high efficiency and without combustion, significantly reducing environmental impacts.
Our enterprise customers are among the largest multinational corporations who are leaders in adopting new technologies. We also have strong relationships with some of the largest utility companies in the United States and around the world.
Driving Resilience
Catastrophic weather events in 2020 resulted in $95 billion in damages and widespread power outages that left hundreds of thousands in the dark for days, and even weeks. As overtaxed electric grids across the nation buckled under the strain, our Energy Servers delivered clean, resilient, uninterrupted energy to power our customers through these outages.
In 2020, our solutions were notably deployed at critical moments to power pop-up field hospitals in California amid the COVID-19 pandemic and to support mission critical energy in the face of hurricanes in Louisiana with our partners.
Time and time again, our microgrids – islands of energy resiliency – have helped fortify critical infrastructure systems to ensure uninterrupted power, providing energy when the grid is not available. In fact, we have deployed more than 100 microgrids that have supported our customers’ critical load through more than 1,700 power disruptions since 2018.
Financial Highlights
Total Acceptances | ||||||
increase | Despite the
This performance represents a broad range of verticals including hospitals and healthcare, retail, utilities and energy, cloud services and data centers, | |||||
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Product & Service Revenue | ||||||
22.4% increase | We achieved record revenue of $972.2 million in 2021 compared with $794.2 million in 2020, an increase of 22.4% year-over-year. | 28.6% increase | We achieved product revenue of $663.5 million and service revenue of $144.2 million, an increase of 28.6% year-over-year. | |||
Backlog | EPS | |||||
| We achieved |
| Earnings per share on a GAAP basis was ($0.95) in 2021 compared with ($1.14) in 2020, |
Business Highlights
In 2020,2021 was a year of notable success. We delivered on our commitments, overcame the continued challenge of COVID-19 and supply chain disruptions, and executed at a high level. We believe that the financial strength of our company has never been more secure, as we operated through myriad challengescontinue to innovate and significantly advanceddeliver new technologies that will drive a net-zero transition. We have also made progress in growing our business better positioning us to achieve near- and long-term success.internationally. We added talent across the senior executive team, strengthened our financial position, unveiled our strategic growth plans, advanced our technology roadmap, and drove manufacturing and service improvements. As a result of these actions, we believe we are well-positionedwell positioned to capitalize on our intellectual property, history of innovation, manufacturing prowess,capacity, and the strength and flexibility of our Bloom Energy Serverssolid oxide platform to drive long-term, sustainable value for all of our stakeholders, including our customers, partners, employees, stockholders, and the communities we serve.
Underscoring our commitmentWe continue to growth and success, the leadership and management team made a number of critically important decisions that delivereddeliver on our purpose advancedand advance our mission, and set a strategic pathway for a better energy future for the world.mission. The following business highlights reflect some of the important progress we believe we have made during 2020:
in 2021:
Balance Sheet Improvement and Financial Strength: During the fourth quarter of | |
● | Strong Market Growth: We brought two new products to the market, identified new applications for our technology, and expanded our customer footprint to new geographies. These actions led to another record year for revenue and acceptances, as revenues grew to nearly $1 billion. Our backlog is up 228% year-over-year based on system orders and our pipeline is stronger than it has ever been. |
● | Pushing the Boundaries: We made several announcements showcasing our innovation and the growing demand for our technology: |
– | We announced the commercial availability of both hydrogen-powered Energy Servers and electrolyzers that produce clean hydrogen. Our 100-kilowatt hydrogen-powered Energy Server pilot project in the Republic of Korea commenced operations in April 2021 and our electrolyzer was successfully installed in Gumi, South Korea and has been producing hydrogen since January 2022. | |
– | Bloom and the Department of Energy’s Idaho National Laboratory established an agreement to test the use of nuclear energy to create zero carbon hydrogen using our electrolyzer. | |
– | Leveraging Heliogen’s concentrated solar technology and Bloom’s Electrolyzer, Heliogen and Bloom Energy successfully demonstrated an economical pathway to scalable green hydrogen production. |
2022 PROXY STATEMENT | 9 |
WHO WE ARE
– | We launched our first dairy farm biogas project at Bar 20 Dairy Farms in Kerman, California. | |
– | We received verification as an alternative power source for vessels as part of the American Bureau of Shipping’s New Technology Qualification service and quickly entered the maritime industry working with Chantiers de l’Atlantique and MSC to launch the world’s first cruise ship operating on solid oxide fuel cell technology. | |
– | In December 2021, the Bloom Electrolyzer was named Emerging Technology of the Year at the 23rd annual S&P Global Platts Global Energy Awards. |
● | International Momentum: The Republic of Korea now represents a very strong and growing market; our largest market outside of the United States. SK ecoplant, a subsidiary of the SK Group, serves as the primary distributor of our systems in the Republic of Korea. In October 2021, we announced an expansion of our existing partnership with SK ecoplant, representing a minimum of 500MW of power from Bloom through 2024, the creation of hydrogen innovation centers in the United States and the Republic of Korea to advance green hydrogen commercialization, and the closing of initial equity investment in Bloom Energy in December 2021. |
● | We announced plans with Conrad Energy and Electricity North West (Construction and Maintenance) Limited to collaborate on the development, construction, and operation of behind-the-meter (BtM) projects to bring our Energy Server with its conversion platform to the UK market. |
● | We have additional projects in development in Europe, Southeast Asia and Australia and we will introduce our solutions into those markets based on their decarbonization demands and readiness. |
With a clear focus on our purpose, commitment to executing on the growth levers of our strategic plan and the financial resources to make prudent investments in our business, we believe we are on the pathway to growth. Our diverse and talented management team shares a history of innovation and leadership in technology that moves us closer to the promise of a clean energy future and nearer to achieving our mission of making reliable, resilient and lower cost power available to all.
The health and well-being of our people, our communities and our planet matter greatly to Bloom.Bloom Energy. While our commitment is firmly established, our formal processes, strategies and governance concerning Environmental, Social and Governance (“ESG”) matters are in their early stages.continue to evolve. We are actively engaged in a dialogue with investorsstockholders and stakeholders around their interest in corporate responsibility and sustainability, including discussions concerning ESG performance.
We continueare also committed to reviewtransparency around our ESG initiatives. We issued our first Task Force on Climate-related Financial Disclosures (“TCFD”), Sustainability Accounting Standards Board (“SASB”) and update our governance practices and have, for example, updated our Corporate Governance Guidelines to reflect our interestGlobal Reporting Initiative aligned Sustainability Report in candidates who express diversity across demographics such as gender, race, ethnic and national background, geography, age and sexual orientation. Further, in2021. In April 2021,2022, we plan to publish our firstsecond Sustainability Report, which will be available on our website at www.bloomenergy.com,.and provides more information regarding our Scope 1 and 2, workforce diversity reporting, pay equity, and other topics. Please note that our 20212022 Sustainability Report is not a part of our proxy solicitation materials.
We are evolving bothcontinue the evolution of our Board oversight and management processes to more fully and formally incorporate ESG data and analysis into our strategy development, risk management and operations. Our sustainability governance structure involves numerous participants engaging in information-sharing and decision-making, capitalizing on the depth and breadth of expertise throughout Bloom.
Board Oversight of ESG
TheOur Board of Directors (the “Board”), both as a whole and through its independent committees, oversees our strategy, ESG efforts and risk management processes. All Board committees have active oversight of one or more key ESG components. In 2020, the Board delegated to the Nominating, Governance & Public Policy Committee (the “Nominating Committee”) oversight of sustainabilityESG matters including climate-related risks and opportunities,in general in recognition of the importance of ESG matterstheir relevance to our business.business and that the Nominating Committee was already chartered with corporate governance matters, non-financial regulatory matters and policy. The Audit Committee, with its oversight of risk management processes and financial matters, and the Compensation and Organizational Development Committee (the “Compensation Committee”), which oversees human capital matters shares(including diversity and inclusion), share relevant information and analysis with the Nominating Committee. Information and analysis from each of the committees are takenThe full Board takes into account by the full Boardwork of these committees in considering and providing guidance on our strategy and objectives for the short-, medium-short, medium and long-term,long term, including on climate and other sustainability-related strategy and objectives. Management regularly provides the Nominating Committee with background on emerging ESG trends, relevant disclosure standards,evolving external reporting frameworks, and the importance of ESG management to the business.
Executive Leadership, Management GovernanceOrganizational Structure andfor Managing ESG Strategy
Our CEO is responsible for approving our ESG goals and strategies based on the Board’s guidance and directives, and for overseeing the execution of those strategies. Our senior-level executives are responsible for assisting the CEO in formulating our strategies and setting our priorities and objectives based on information and analysis from management in each functional area. Our executive leadership team, which includes all of thewhom are members of the ESG Committee (discussed below), typically meets weekly with the CEO to engage around various risk management areas of the business. Through these formal and informal processes of executive interactions, risks and opportunities can be continuously raised, evaluated and factored into ongoing strategy development.business, including ESG topics.
In 2020, we formalized senior executive involvement related to climate and environmental, health and safety matters with the establishment of a newOur management-level ESG Committee which is intended to be our central source for ESG risk identification, data analysis and policy, program and strategy formulation. The ESG Committee provides a platform for our leadership to understand, staff, resource and manage ESG-related risks and opportunities. The ESG Committee is comprisedcomposed of the senior-most leaders of each of our functional areas, and its initial responsibilities include:areas. The ESG Committee reports into the Nominating Committee on a regular basis.
2022 PROXY | |
ESG at Bloom
Below is a graphical illustration of our ESG management and oversight structure.
ESG AT BLOOM
ESG Risk Management
Our ESG Committee is well positioned to identify and develop a response to ESG-related risks as they are encountered, and the formalized committee structure adds a level of transparency and accountability in the ongoing management of such risks. The director of sustainability and senior director of EH&S are tasked with coordinating dedicated cross-functional groups in their development of risk responses and programming once ESG-related risks are identified. The ESG Committee evaluates related risks for significance and recommends to the CEO strategies for responding to and managing the risks.
Climate-related risks are a high priority for us due to their likelihood, impact and velocity, and are part of our sustainability-related governance framework. Climate risks are considered and addressed, as needed, in the budgeting process for product, services and electricity costs, primarily related to the ESG risks of market and technology shift, policy and legal and physical risks.
Climate Related Risks and Opportunities
We take climate change risk seriously. While our products and technologies can help customers respond to current climate risks and mitigate future effects by reducing GHG emissions, we understand that our business is subject to those same risks. We expect climate considerations to drive fundamental shifts in the energy industry for years to come.
Global warming and resulting extreme weather are having significant economic, environmental and social impacts in the United States and around the world. These and anticipated future impacts have resulted in a wide array of market and regulatory responses, and will continue to do so. Our business can be impacted by climate change, and by those market and regulatory responses, in a variety of ways. We closely follow the impacts of climate change on the energy system and its customers, as well as the regulatory, policy and voluntary measures taken in response to those impacts, so that we may understand and respond to changing conditions that may affect our company, our customers and our investors and business partners.
The direct impacts of climate change on energy systems, including the increased risk they pose to energy service disruption, may provide increased opportunity for our extremely reliable and resilient energy generation. New or more stringent international accords, national or state legislation or regulation of greenhouse gas emission may increase demand for our bioenergy and hydrogen-based products, but they may also make it more expensive or impractical to deploy natural gas-fueled Energy Servers in some markets notwithstanding their enhanced environmental performance relative to combustion-based technologies, or may cause the loss of regulatory or policy incentives for those deployments.
We have undertaken a TCFD-based assessment of climate risks and opportunities by looking at the following areas: market and technology shifts, reputation, policy and legal and physical risks. The following is a list of the climate risks and opportunities that we have identified. We are taking steps to address each of them, as further described in our TCFD-aligned Sustainability Report.
Market & Technology Shifts
Risk: Market & Technology Shifts Acceleration of renewable energy procurement goals may occur. | Opportunity: Market & Technology Shifts Increased customer interest in delivery of reliable, resilient, renewable and/or zero-carbon baseload power creates opportunities for our innovative product offerings and expands market opportunities to new utility scale applications. The focus on rapid decarbonization in the transportation sector expands market opportunities into transportation fuel, including electricity and hydrogen. |
2022 PROXY STATEMENT | 13 |
ESG AT BLOOM
Reputation | |
Risk: Reputation As the energy transition intensifies, industry, non-governmental organizations and policymakers may develop opposing viewpoints. | Opportunity: Reputation We believe we are well positioned as a thought leader on critical resilience and mitigation efforts. Continued delivery of community impact projects can provide a platform for stakeholder engagement with the potential for reputational enhancement. Pilot activity can demonstrate new operating models applicable beyond Bloom Energy. |
Policy and Legal | |
Risk: Policy and Legal In some jurisdictions, local utility companies or the municipality have denied our request for utility service connection or have required us to alter the operating profile of certain projects. We may be subject to a heightened risk of regulation and a potential loss of certain enabling incentives. Our projects may also become subject to carbon pricing. | Opportunity: Policy and Legal New federal and state incentives for biogas, hydrogen and carbon capture and utilization and storage (“CCUS”) related energy projects are possible. The blending of renewable hydrogen into natural gas infrastructure is also being tested actively by several gas utilities domestically. |
Physical Risks | |
Risk: Physical Risks We rely on a limited number of third-party suppliers for some of the raw materials and components for our Energy Servers. Our supply chain could be disrupted by severe weather events. Our offices and manufacturing facilities could be impacted by climate-driven severe weather. Similarly, our equipment in operation could be impacted by physical climate risks. | Opportunity: Physical Risks Climate-driven severe weather (including wildfires, hurricanes and winter storms) is expected to continue to intensify, straining grid operations and incentivizing resilient power solutions like our microgrids. |
Sustainability Performance
Our business, the Energy Server platform and our product roadmap are designed to support the global energy transition to low/no-carbon energy solutions. Bloom Energy offers solutions that are designed to significantly lower harmful criteria pollutants and reduce global greenhouse gas emissions. Our Energy Server, which offers reliable based-load power, can displace less efficient energy equipment, including combustion-based power producers and on-site stationary internal combustion engines. In addition to criteria pollutants, the Bloom Energy Server offers lower greenhouse gas emissions by displacing a less efficient marginal grid.
Our commitment to the environment not only extends to the communities where our products operate, but also the communities in which we manufacture our products. Our manufacturing facilities are committed to resource efficiency, responsible design, material management and recycling. We design our products to consume minimal water and operate at a high-power density, which optimizes land use. Our 2021 sustainability report details more about our programs and performance, but we have highlighted several key impacts and initiatives below.
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ESG AT BLOOM
DESIGNED WITH SUSTAINABILITY IN MIND
2021 Impact and Program Highlights
● | In 2021, we established an ISO 14001-informed Environmental Management System (EMS) that provides the framework for managing its environmental impacts. |
● | We continued our strong end-of-life product management performance by maintaining our impressive 98% recycling rate of materials by weight. |
● | We avoided nearly 100 tonnes of hazardous waste through our innovative and circular end-of-life program for our desulphurization units, where we recycle material into copper compounds that can be reused. |
● | Our weighted average Bloom Energy Server lifetime efficiency increased slightly to almost 56%, and we held our projected median time to refurbishment constant at approximately 5.5 years. |
● | Our continued global expansion helped increase our weighted average avoided global greenhouse gas emissions from our Bloom Energy Server fleet by almost 4.5%. Our 2021 avoided emissions rate was over 31% vs. grid alternatives. |
● | Due to our non-combustion technology and low levels of criteria pollutant release, our projects saved local health systems throughout the United States $35-76 million in estimated health system costs. |
● | Our projects avoided over 400 billion gallons of water withdrawals from the power system in drought-stricken California, where more than 55% of Bloom’s installed base of Energy Servers is located. |
● | We calculated our first eco-efficiency metric, demonstrating that the manufacture of the Bloom fuel cells only uses 0.33% of the energy the Energy Servers will subsequently produce, which means the fuel cells generate 300 times the amount of energy over a 5.5-year life span than it takes to manufacture them. |
● | We continued to work with suppliers to enhance our conflict minerals program, increasing our supplier response rate from 82% to 88%. |
2022 PROXY STATEMENT | 15 |
ESG AT BLOOM
Taking Care of Our Employees
We recognize that our achievements are possible because of our talented, diverse team members, who live and work around the world. We are dedicated to creating a workplace where our employees feel valued and engaged in meaningful work. In order to attract and retain our employees, we strive to maintain an inclusive, diverse and safe workplace, with opportunities for our employees to grow and develop in their careers, supported by strong compensation, benefits and health and wellness programs. It is also vital that we continue to encourage and nurture our employees’ engagement and connection to our culture and mission.
Connecting Employees and Bloom’s Purpose
Now, more than ever before, people are looking for purposeful and fulfilling work. At Bloom Energy, we recognize the importance of communicating our mission clearly, living our core values and connecting our employees to our purpose. We are proud of the results achieved through our intense focus placed on retaining talent in a hyper-competitive job market.
This means addressing climate change and its impacts; changing the future of energy by leading the world’s energy transition and how we power the world; underscoring the important role our employees have in advancing our mission and making the world a better place; and doing the right thing for the greater good of our society and our stakeholders.
We recently enhanced our talent program through the introduction of a comprehensive Talent Management System designed to link performance to business results, enabling each employee to make a direct connection between their role and contributions and the success of Bloom Energy.
Promoting Diversity, EquityInclusion and Inclusion
Diversity
Since our inception,founding, we have supportedbeen committed to advancing inclusion and diversity equityacross our organization. We endeavor to foster a workplace that values each person and inclusion. Fromcontribution and promotes an environment of positive engagement and productivity. We recognize that having a multi-faceted team—with a wide array of knowledge, skills, experience and viewpoints—fuels our visionary CEO, KR Sridhar, to our manufacturing plant employees, a large percentageinnovation and growth. One of our greatest strengths is the talent and uniqueness of our employees, and we believe diverse leaders serve as role models for our inclusive workforce.
As of December 31, 2021, we had more than 1,700 employees worldwide, of which approximately 1,400 were located in the United States, 270 were located in India and 40 were located in other countries. We are proud that 60% of our employee population is from underrepresented communities.ethnically diverse and 21% is female. This includes our Executive Management Team, which includes 33% ethnic minorities and 40% women. Our Executive Management Team is comprised of four ethnically diverse individuals and three women. Our Board is also diverse, with 44% of the Board is composed ofpositions filled by ethnic minorities, including a female African-American member. 33%In addition, 30% of our executive managementsenior leadership team, is composedthose with the title of ethnicdirector and above, are women.
To attract, retain and diversify our exceptionally talented team, we continue to evolve our hiring strategies, track our progress and hold ourselves accountable to advancing global diversity. These efforts are led by our Human Resources department and overseen by the Board, but are imbedded in the hiring practices of every department tin the organization. Our talent acquisition strategy centers on recruiting candidates from underrepresented groups through increased advertising and outreach. For example, our 2021 University intern program resulted in representation of 50% women, 45% underrepresented minorities and 40%10% veterans. In addition, we take pride in the fact that over 9% of our United States employee population are women.veterans as of year-end 2021.
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ESG AT BLOOM
Our continued engagement with organizations that work with diverse communities has been vital to our efforts to increase women and minority representation in our workforce. For example, our “Careers at Bloom Silicon Valley” Campaign targets recruiting diverse talent from underserved communities for hourly manufacturing roles. We recognizeactively engage local community leaders to gain access to untapped underserved communities and to attract talent that is generally not easily accessible. We are building a diverse leadership translatestalent slate of future generation leaders through our progressive outreach programs.
Compensation and Benefits
Our talent strategy is integral to our business success and we design competitive and innovative compensation and benefits programs to help meet the needs of our employees. In addition to salaries, these programs (which vary by country/region) include annual bonuses, stock awards, an employee stock purchase plan, a diversity of experiences, viewpoints401(k) plan, healthcare and ultimately, more informed decisions. Our mission of providing clean, reliableinsurance benefits, health savings and affordable energy to everyone is achieved only when every voice is heardflexible spending accounts, paid time off, parental leave, flexible work schedules, an extensive mental health program, fitness center and valued.financial planning and education.
Employee Health, Safety and Training
We are committed to continuing to foster the diversityhealth, safety and wellness of our workforce,employees. Our “Design for Safety” initiatives focus on prevention and are actively developingcontinuous improvement through interactive training programs with employees, hands-on audits, monthly team meetings, and strategies to support this commitment. deep-dive investigations when incidents do arise so we can learn and improve.
We recently initiated a Talent Acquisition Strategy, the goalmanage occupational health and safety via our Injury and Illness Prevention Program (“IIPP”). The IIPP is our EH&S standard and applies across our business. We track all safety incidents electronically and require submittal of which isan incident report within 24 hours that includes identification of immediate, short-term and long-term corrective actions, as well as root causes. We review quarterly and annual data on incidents to identify trends and attracttarget resources for improvement.
As the world still grapples with the COVID-19 pandemic, we remain committed to providing for the health and safety of our employees. We follow stringent CDC and local guidelines as they continue to evolve.
Business Ethics and Compliance
At Bloom Energy, we endeavor to create a slateculture of candidates from underrepresented groups through increasing investmentsethical decision making. Acting ethically builds loyalty, trust and respect with our employees, business partners, customers and the communities we serve. Each of the countries where we do business has its own laws, regulations and customs. We strive to comply with the law, wherever we live or work.
Global Code of Business Conduct and Ethics
Our Global Code of Business Conduct and Ethics (“Code of Conduct”) applies to Bloom Energy Corporation and its subsidiaries and their employees, corporate officers and directors, as well as contractors assigned to work at Bloom Energy. The Code of Conduct is available in advertisingall applicable languages and outreach. We have establishedaddresses a University Program in which we partnerrange of ethics and compliance issues Bloom faces around the world. It summarizes key compliance policies and helps put Bloom’s ethical principles into practice. The Audit Committee, on behalf of the Board, oversees compliance with university diversity groupsthe Code of Conduct, including the Societyconsideration of Women Engineers, Societyactual and potential conflicts of Hispanic Engineersinterest, the review and National Societyapproval of Black Engineers, to name a few. Additionally, we are partnering with several historically Black collegesrelated party transactions and universities to hire internsthe review and employees. approval of procedures for handling complaints regarding accounting or auditing matters.
We are committed to beingcomplying with our Code of Conduct and obeying all applicable laws where we do business.
Our Code of Conduct is available on our website at https://investor.bloomenergy.com under the “Corporate Governance” tab. We intend to satisfy the disclosure requirement under Item 5.05 of Form 8-K regarding amendment to, or waiver from, a military-friendly employer and have partnered with several veteran organizations and agencies to identify and hire talent. Currently, our veteran population represents 9.3%provision of our total U.S. employee population. Further, in recognitionCode Conduct by posting such information on our website at the address specified above within four business days of our military hiring efforts, in 2018 we received the Pro Patria Award from the Employer Support of the Guarded and Reserve (“ESGR”). This award recognizes employers who have demonstrated the greatest support to Guard and Reserve employees through their leadership and practices, and is the highest-level award that may be bestowed by an ESGR State Committee.
Supporting Employee Well-Being
Compensation and Benefits
We provide our employees with robust total compensation packages that include competitive salaries, bonuses and opportunities for equity ownership. We review and enhance the benefits portion of the package periodically, seeking to improve our competitiveness across health and income replacement programs. For example, we recently introduced a new program to facilitate access to mental health care, in terms of cost and ease of access.
Employee Health and COVID-19 Safety Measures
We have been going above and beyond to protect employees during the COVID-19 pandemic. Employee safety is our top priority. Among other things, we are providing daily temperature checks and health checks at entrances; clothany such amendment or surgical masks to all workers; modified work areas to ensure social distancing; regular COVID-19 testing; frequent cleaning and disinfecting of all areas; closed or modified breakrooms to reduce risk of transmission; and state of the art air filtration systems that have been FDA-verified to kill the COVID-19 virus. We have also established rigorous quarantine protocols. As evidence of these efforts, our workplace positivity rate is far lower than those of the counties in which we operate.
Employee Safety and Training
Our management seeks to provide a safe working environment. We believe in the principle ‘safety first’ and that most incidents are preventable. We strive to foster an environment that integrates safety throughout our operations to reduce or eliminate illness and injuries among our workforce.
To support this, we have established well-defined safety, health and environmental policies and procedures and offer ongoing training. We have focused on prevention programs and driving continuous improvement via ‘Design for Safety’ initiatives during product development, interactive training programs with all employees, hands-on audits, employee engagement through monthly team meetings, and relentless focus on deep-dive investigations ensuring we learn and improve from incidents that occur.waiver.
2022 PROXY |
Keeping Jobs Local - While Improving the Communities in Which We OperateESG AT BLOOM
Global Business Partner Standards
We choose business partners who share our mission, and we intend to only work with those who agree that our shared success is based on acting ethically and lawfully. Following the law is not enough. Our technology has a global reach, but atbusiness partners are asked to adhere to our core, we are all about improvingGlobal Business Partner Standards, which include expectations around legal compliance, ethical business conduct, human rights and expanding operations nationallyanti-trafficking, supply chains, worker health and serving our local communities. In Delaware, where we have our Newark manufacturing facility, we invested $6.6 million last year alonesafety and environmental impact.
Whistleblower Protection
We provide an external channel for employees, contractors and business partners to prepare for future growth. At the heightask questions and report concerns or potential violation of the pandemic, we added 57 new roleslaw, our Code of Conduct or our policies. Our Ethics Helpline is hosted by an independent third party and allows reporters to remain anonymous, where permitted by local law. We do not allow retaliation against anyone who, in Delaware, bringing the employee number to 397. We invested in the Newark community by building a training facility and entering into a partnership with the Delaware Office of Work-Based Learning at Delaware Tech to bolster workforce development.
Additionally, our products are providing clean energy solutions to the residents of Delaware and helping the state achieve new standards for clean energy. The Delaware Division of Energy and Climate has put in place limits on the amount of harmful emissions generated by the local electricity industry. Utility companies like the Delmarva Power Plant, encouraged by the Renewable Energy Portfolio Standards Act (”REPSA”), have had to increase their renewable and alternative energy sources to power local communities. Our Newark manufacturing facility’s collaboration with the Delmarva Power Plant helps power thousands of homes with clean energy produced by fuel cells made by Delawareans.
Our fuel cell technology is helping the Delmarva Power Plant achieve reduced emissions and meet the required 25% of alternative energy sources mandated by REPSA. We have succeeded in decreasing CO2emissions by 50% and nearly eliminated smog-forming particulate emissions. More importantly, we are providing clean energy to more than 22,000 homes in the state.
Supporting Our Communities
Our mission is to make clean, reliable power affordable for everyone in the world because we know that allows our communities to be safe, prosperous, healthy and resilient. Community impact is what motivates us every day to provide the highest quality products and solutions possible.
Assisting Vulnerable Communities
2020 was a difficult year for manygood faith, discloses any actual or suspected violations of the communities we serve, but we responded by being adaptable, flexiblelaw, our Code of Conduct or policies, or participates in an investigation.
The Audit Committee receives a regular report from executive management that summarizes the number and innovative in creating solutions in the facetypes of emergencies. Our rapid deployment of engineeringissues submitted to us through our Ethics Helpline and manufacturing resources has aided vulnerable communities in multiple ways during the COVID-19 pandemic as well as extreme weather events.
Ventilator Refurbishment. In March 2020, when the country came to a standstill in the fight against the spread of COVID-19, we voluntarily launched an initiative to refurbish ventilators at our San Jose, California and Newark, Delaware facilities. We knew that we could put our manufacturing, engineering and operational expertise to work and successfully refurbished more than 1,300 ventilators that were supplied to state emergency management departments and healthcare facilities in California, Delaware and Pennsylvania.
Rapid Deploy Microgrids. When a field hospital was set up in Sacramento, California to expand the state’s hospital capacity and house COVID-19 patients, we and our installation and utility project partners were able to deploy a microgrid in three days. The Bloom microgrid provided essential reliable, AlwaysON power to serve the critical medical needs of Californians. Similar microgrids were rapidly deployed to a hospital in Louisiana and a hospital system in Vallejo, California, providing vital power to a field hospital set up to accommodate patient overflow. Importantly, these facilities could not have utilized traditional temporary diesel power solutions due to the impact on patient respiratory health, reinforcing the importance of our products’ air quality impacts on vulnerable populations every day.
Redirecting Excess Power. On top of the challenges with COVID-19, California continues to deal with grid instability from climate-driven extreme weather as well as wildfires. But 2020 saw blackouts due to record heat as well. Our fuel cell technology at approximately 500 sites has been generating 265 megawatts of clean and reliable power in the state. Our customers agreed to export the excess power generated at their sites to the grid to provide additional generation capacity. Thanks to their generosity, we managed to power nearly 15,000 homes in communities facing the adverse effects of the pandemic.
Mobile COVID-19 Testing. To help keep our employees and neighbors safe, we partnered with El Camino Health to set up a mobile COVID-19 testing facility for Bay Area organizations, businesses and schools. Using the University of Illinois’ innovative Shield T3 COVID testing system, the mobile unit offers rapid, accurate and inexpensive testing, providing critically needed tests for area businesses, schools and disadvantaged communities. One in six tests purchased by us and participating organizations was used to help the Valley Medical Center Foundation purchase a mobile medical bus to vaccinate homebound seniors, people with disabilities, farmers and others who might not be easily served.management’s responses.
ITEM 1 | Election of Directors | The Board recommends a vote FOR each nominee See page 23 for additional information |
Why the Board recommends you support our nominees
ITEM 2 | Say on Pay | The Board recommends a vote FOR this proposal See page 73 for addition information |
Why the Board recommends you support this proposal
● | The Compensation Committee, with the assistance of an independent compensation consultant, has designed our compensation program to attract, retain and motivate highly-qualified executives and align their long-term interests with our stockholders |
● | A majority of target compensation for our named executives is delivered in cash and equity incentives tied to specific financial and operating performance measures designed to drive long-term stockholder value |
● | The Compensation Committee granted a special equity award in the form of a time-based RSU award and two separate PSU awards to Dr. Sridhar (collectively, the “CEO Performance Award”). The CEO Performance Award is designed to ensure Dr. Sridhar’s retention, recognize his contributions to Bloom Energy and incentivize outperformance of performance operating metrics and key financial goals, and is intended to replace his ongoing annual equity awards for a five-year time period |
ITEM 3 | Increase in Authorized Preferred Stock | The Board recommends a vote FOR this proposal See page 74 for addition information |
Why the Board recommends you support this proposal
● | In 2021, we expanded our successful power generation partnership with SK ecoplant to help us establish market leadership in the hydrogen economy, and as part of that deal, SK ecoplant purchased all 10,000,000 shares of our authorized preferred stock |
● | The proposal would replenish our authorized preferred stock (increasing the authorization from 10,000,000 to 20,000,000 shares), which will provide us with flexibility in structuring future additional strategic partnerships or using for other corporate purposes |
2022 PROXY STATEMENT | 19 |
ITEM 4 | Amend Restated Certificate of Incorporation to Align the Choice of Forum Provisions with the Bylaws | The Board recommends a vote FOR this proposal See page 76 for addition information |
Why the Board recommends you support this proposal
● | In 2020, we amended our Amended and Restated Bylaws (the “Bylaws”) to add an exclusive forum provision that provides that the Delaware Court of Chancery shall serve as the sole and exclusive forum for certain legal actions, and that if the Delaware Court of Chancery does not have jurisdiction, the federal district court for the District of Delaware will |
● | Our Restated Certificate of Incorporation (the “Restated Certificate”) currently contains an exclusive forum provision that provides that the Delaware Court of Chancery shall serve as the sole and exclusive forum for certain legal actions, but does not contain the additional provision contained in the Bylaws regarding the alternative forum of the federal district court for the District of Delaware and some other non-substantive language that is in the Bylaws |
● | Seeking approval to align our corporate documents and also include a savings clause |
ITEM 5 | Increase in ESPP Share Pool | The Board recommends a vote FOR this proposal See page 78 for addition information |
Why the Board recommends you support this proposal
● | Our 2018 Employee Stock Purchase Plan (the “ESPP”) is a broad-based plan that promotes employee stock ownership and helps us to attract, motivate and retain top talent at reasonable cost to stockholders by allowing employees to purchase Class A common stock at a discount |
● | The current number of Class A shares authorized for issuance under the ESPP is 10,202,023 |
● | The proposal would increase the ESPP share pool available for issuance from 4,179,771 to 14,179,771 Class A shares, which we believe is reasonable as it represents additional stockholder dilution of only 5.7% |
ITEM 6 | Independent Auditor Ratification | The Board recommends a vote FOR this proposal See page 81 for addition information |
Why the Board recommends you support this proposal
● | Our Audit Committee undertakes a robust annual review before engaging the independent auditor, considering factors such as the auditor’s independence, performance, quality, candor, capability, expertise and appropriateness of fees |
● | Following this review, our Audit Committee reappointed Deloitte & Touche LLP as our independent auditor for 2022, and they have served in this capacity since September 2020 |
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Our Board at a Glance (see Board bios beginning on page 26)
Director Since | Committees | Other Current Public Company Boards | |||||||||
Name and Primary Occupation | Age | AC | CC* | NC | |||||||
Mary K. Bush IND President of Bush International, LLC | 73 | 2017 | 3 | ||||||||
KR Sridhar Founder, Chairman and Chief | 61 | 2002 | 0 | ||||||||
Jeffrey Immelt IND Venture Partner at New Enterprise | 66 | 2019 | 4 | ||||||||
Eddy Zervigon IND CEO of Quantum Xchange | 53 | 2007 | 1 | ||||||||
Michael Boskin IND Professor of Economics and Hoover | 76 | 2019 | 1 | ||||||||
John T. Chambers IND Founder and Chief Executive Officer | 72 | 2018 | 1 | ||||||||
* | Since Mr. Sandell is retiring and not standing for re-election, the Board will appoint a new Chair as of the date of the 2022 Annual Meeting. |
AC | Audit Committee | Chair | IND Independent |
CC | Compensation and Organizational Development Committee | Member | |
NC | Nominating, Governance and Public Policy Committee | Financial Expert |
Board Composition(see more on Board diversity beginning on page 25)
2022 PROXY STATEMENT | 21 |
proxy statement highlights
Compensation Highlights (see CD&A beginning on page 49)
Our 2021 compensation plans and payouts for our named executive officers reflect our overarching philosophy of pay-for-performance. Highlights of our compensation program include:
EMPHASIS ON PERFORMANCE-BASED INCENTIVES: | |
● A majority of the target compensation opportunity provided to our named executive officers is awarded in the form of cash incentives and equity awards for which the realized value varies based on the achievement of certain operating and financial metrics. | |
CEO PERFORMANCE AWARD: | |
● The CEO Performance Award is designed to ensure Mr. Sridhar’s retention, recognize his contributions to Bloom Energy and incentivize outperformance of performance operating metrics and key financial goals, and is intended to replace his ongoing annual equity awards for a five-year time period. | |
CHALLENGING PERFORMANCE OBJECTIVES: | |
● The Compensation Committee sets rigorous goals for our annual bonus plan that will be achieved only if we perform at a high level. Based on our performance in 2021, our named executive officers each earned a bonus of between 100% and 131.25% of their target bonuses for the year. | |
PERFORMANCE-BASED APPROACH TO LONG-TERM INCENTIVES: | |
● PSUs represent 40% of the target value granted to our named executive officers other than our CEO. The remaining long-term incentive value was granted in the form of time-based vesting RSUs. Based on our results in 2021, our named executive officers earned 75% of the target number of shares granted in 2021. The shares earned vest annually over three years. | |
NEW CHANGE IN CONTROL SEVERANCE AGREEMENTS: | |
● The Compensation Committee approved new Employment, Change in Control and Severance Agreements (the “CiC Agreements”) with certain of our executive officers, including with each of our named executive officers, to encourage their continued attention, dedication and continuity with respect to their roles and responsibilities without the distraction that may arise from the possibility or occurrence of a change of control of Bloom Energy. | |
As shown below, approximately 74.6% of the target total compensation awarded to our CEO and approximately 42.7% awarded to our other named executive officers (not including Mr. Brooks, who was hired in June 2021) was at-risk in the form of our cash annual incentive and performance-based equity, both of which were eligible to be earned based on our level of achievement of rigorous financial goals.
Fiscal 2021 CEO Pay Mix | Fiscal 2021 Pay Mix: Other NEOs | |
22 |
Our Amended and RestatedThe Bylaws (the “Bylaws”) provide that the Board is divided into three classes of directors with staggered three-year terms. As a result, only one class of directors is elected at each annual meeting of our stockholders, with the other classes continuing for the remainder of their respective three-year terms. Each director’s term will continue until the election and qualification of his or her successor, or his or her earlier death, resignation or removal.
The Board presently has nineseven members. The Board is currently comprised of three Class I directors, three Class II directors and three Class III directors. The authorized number of directors may be changed by resolution of the Board. Stockholders last electedScott Sandell, a Class I director, is retiring from the Board and will not be standing for re-election to the Board at this meeting, which will leave us with six members. This would leave us with one Class I director, three Class II directors and two Class III directors. Effective as of this meeting and subject to election by the stockholders, the Board has moved Mary K. Bush from Class II to Class I so that she will stand for re-election at this meeting. Immediately prior to the 2022 Annual Meeting, the authorized number of directors on the Board will be reduced to six, and each class will be comprised of two directors.
Class I directors Messrs. Powell, Sandell, andMr. Sridhar at the 2019 Annual Meeting of Stockholders and the Class II directors, Messrs. Immelt and Zervigon and Ms. Bush at the 2020 Annual Meeting of Stockholders.
Class III directors Dr. Boskin, Messrs. Chambers and Doerr are standing for election to the Board at this meeting. TheMr. Sridhar, our Founder, Chairman and CEO, has served on the Board appointed Dr. Boskin in November 2019, Mr. Chambers in August 2018 and Mr. Doerr in Maysince 2002, and Ms. Bush was initially appointed to the Board in 2017, and each washas been recommended to the Board to serve another three-year term by the Nominating Committee. The nominees’ and other directors’ biographies are available beginning on page 2126 of this Proxy Statement.
Each nominee has consented to be named a nominee in the Proxy Statement and to continue to serve as a director, if elected. If any nominee becomes unavailable to serve for any reason before the election, which is not anticipated, your proxy authorizes us to vote for another person nominated by the Board or the Board may reduce its size. There are no arrangements or understandings between any director and any other person pursuant to which he or she is or was to be selected as a director. There are no family relationships among our directors or executive officers.
Vote Required
The election of directors will be made by a plurality of votes cast at the 20212022 Annual Meeting. That means the threetwo nominees receiving the highest number of votes will be elected. Because directors need only be elected by a plurality of the vote in an uncontested election, broker non-votes and withhold votes will not affect whether any particular nominee has received sufficient votes to be elected in such cases.
Our nominees have considerable professional and business experience. The recommendation of the Board is based on its carefully considered judgment that the qualifications and experience of our nominees make them well qualified to serve on the Board and give the Board as a group the appropriate skills to exercise its oversight responsibilities. For each of the three director nominees standing for election as well as for the remainder of the Board, the following pages sets forth certain biographical information, including a description of their principal occupation and business experience, and the primary qualifications, attributes and skills that the Nominating Committee considered in recommending the director nominees.
2022 PROXY |
Corporate Governance
Director Nominations and Board Composition
Ensuring that the Board is composed of directors who possess highly relevant skills, professional experience and backgrounds, bring diverse viewpoints and perspectives and effectively represent the long-term interests of stockholders is a top priority of the Board and the Nominating Committee.
NomineesThe Nominating Committee seeks directors who possess extraordinary leadership qualities, high personal and professional integrity and ethics, diversity of thought, experience and background with demonstrated experience in strategy, risk management and driving change and growth. The Nominating Committee is responsible for director are selectedreviewing the appropriate skills and experience required of directors in light of current business conditions, short- and long-term strategic initiatives and existing competencies on the basis of, among other things, independence, integrity, ethnic and gender diversity, skills, financial and other expertise, breadth of experience, knowledge about our business or industry, willingness and ability to devote adequate time and effort to Board responsibilities in the context of the existing composition, other areas that are expected to contribute to the Board’s overall effectiveness and the needs of the Board, and its committees. Given our limited operating history, asfor making recommendations regarding the size and composition of the Board. As we continue to growscale our business and evolve our strategy wewith the transitioning energy industry, the Nominating Committee will continue to refresh the relevant skill sets and experience desired in our Board members.
members and will continue to evaluate the appropriate size of the Board.
In evaluating potential candidates for the Board, the Nominating Committee considers the following factors, which are set forth in our Corporate Governance Guidelines:
a majority of directors on the Board should be independent directors; | ||
candidates should be capable of working in a collegial manner with persons of different educational, business and cultural backgrounds, and should possess skills and expertise that complement the attributes of the existing directors; | ||
candidates should represent a diversity of viewpoints, backgrounds, experiences and other demographics, including diversity with respect to demographics such as gender, race, ethnic and national background, geography, age and sexual orientation; | ||
candidates should demonstrate notable or significant achievement and possess senior-level business experience that would benefit Bloom; | ||
candidates should be individuals of the highest character and integrity; | ||
candidates should be free from any conflict of interest that would interfere with their ability to properly discharge their duties as a director or would violate any applicable law or regulation; | ||
candidates for the Audit Committee and the Compensation Committee should have the enhanced independence and financial literacy and expertise that may be required under law, rules, regulations and listing standards of the New York Stock Exchange (“NYSE”); | ||
candidates should be capable of devoting the necessary time to discharge their duties, taking into account memberships on other boards and other responsibilities; and | ||
candidates should be able to represent the interests of all stockholders. |
Stockholder Nominations
Any stockholder may nominate a person for election as a director by complying with the procedures set forth in the Bylaws. See the section later in this Proxy Statement entitled “Stockholder Proposals and Nominations.”
Process of Selecting Directors
The Nominating Committee is responsible for establishing criteria, identifying, evaluating and recommending candidates to the Board candidates for Board membership. The Nominating Committee works very closely with the Chairman and other members of the Board in the identification and evaluation process. The Nominating Committee may also use outside consultants to assist in identifying candidates. The Bylaws provide that the size of the Board is set by the Board, reflecting the Board’s current view of its optimal size. When formulating its Board membership recommendations, the Nominating Committee considers advice and recommendations from stockholders, management and others as it deems appropriate. The Nominating Committee considers candidates for the Board recommended by stockholders using the same criteria in evaluating the candidate as it would any other Board nominee candidate. Once a nominee is identified, the Board then determines whether a nominee’s background, experience, personal characteristics and skills will advance the Board’s goal of sustaining a Board with a diversity of skills, experiences, backgrounds and perspectives that can oversee and help advance our evolving and growing business and strategic priorities.
24 |
Corporate Governance
The Nominating Committee also evaluates whether an incumbent director should be nominated for re-election to the Board upon expiration of such director’s term, based upon factors established for new director candidates, as well as:
the extent to which the director’s judgment, skills, qualifications and experience (including that gained due to tenure on the Board) continue to contribute to the success of the Board; | ||
feedback from the annual Board evaluation; | ||
attendance and participation at, and preparation for, Board and committee meetings; | ||
independence; | ||
outside board and other affiliations, including any actual or perceived conflicts of interest; and | ||
such other factors as the Nominating Committee deems appropriate. |
Board Diversity and Refreshment; Director Tenure Board Refreshment and Diversity
We believe it is in the best interests of Bloom and our stockholders to maintain a mix of longer-tenured, experienced directors and institutional knowledge and newer directors with fresh perspectives. In furtherance of this objective, the Board appointed two new directors to the Board as recently as November 2019, Dr. Boskin and Mr. Immelt.
We do not impose director tenure limits or a mandatory retirement age. The Board believes that our longer-tenured directors with their deep institutional knowledge have a unique perspective, bring critical skills to the Board and are well-positioned to guide us as we continue to grow and evolve. The Board believes that longer-tenured directors have a better understanding of Bloom and its evolution, and are better able to leverage those learnings so Bloom can continue to grow and evolve. Accordingly, while director tenure is taken into consideration when making nomination decisions, the Board believes that imposing limits on director tenure would deprive the Board of the valuable contributions of its most experienced members.
If each director nominee is elected to the Board after the 2021 Annual Meeting, our non-employee directors will have served an average of 8.4 years. Given that Bloom was the first solid oxide fuel cell company to reach commercial scale, given previous challenges we have had to overcome and given that the energy industry is rapidly evolving, we believe that at this stage of our growth, a longer tenure is in the best interests of our stockholders. The Board believes the current average tenure of 8.4 years for its non-employee directors reflects the balance the Board seeks between different perspectives brought by longer serving directors and new directors.
The Board and the Nominating Committee value diversity of backgrounds, age, education, experience, perspectives and leadership in different fields when identifying nominees, and we assess the effectiveness of our efforts in pursuing diversity in connection with our annual evaluations. In 2020, the Board expanded our Corporate Governance Guidelines’ definition of diversity to include gender and ethnicity. Representation of gender, ethnic, geographic, cultural or other diverse perspectives expands the Board’s understanding of our customers, partners, employees, investors and other stakeholders. Presently, we have one woman director and fourthree ethnically diverse directors.
The Board is focused on combining the right mix of skills, experience and perspectives to support our strategic growth levers, obtaining operational leverage for scale and international expansion. The Nominating Committee continues to focus on Board refreshment to align the Board’s long-term composition with its long-term strategy. During 2020, the Nominating Committee, through the Board evaluation process, undertook a review of the collective qualifications, skills, attributes and experiences it desires on the Board. The purpose of the review was to consider the qualifications, skills, attributes and experiences the Board believes are aligned with oversight of the short- and long-term strategies including the growth levers, operational scale and international expansion and related risks and opportunities.
Although we do not have a separate diversity policy, the Board and the Nominating Committee aim to further refresh Board membership in the coming year, with a particular focus on adding directors who can contribute to the gender diversity on the Board as well as the Board’s energy domain knowledge and technical experience.
The Board is committed to ongoing and thoughtful refreshment of its membership, yet also believes in the best interests of Bloom and our stockholders to maintain a mix of longer-tenured, experienced directors with institutional knowledge and newer directors with fresh perspectives. If each director nominee is elected to the Board after the 2022 Annual Meeting, one-third of our directors will be newer directors having been appointed in 2019 or later.
We do not impose director tenure limits or a mandatory retirement age. The Board believes that our longer-tenured directors, with their deep historical and institutional knowledge, have a unique perspective of Bloom Energy, which is invaluable insight as we continue to grow and evolve. The Board believes that longer-tenured directors have a better understanding of Bloom Energy and its evolution, and are better able to leverage that knowledge/history as we continue to grow and evolve. Accordingly, while director tenure is taken into consideration when making nomination decisions, the Board believes that imposing strict limits on director tenure would deprive the Board of the valuable perspectives of its most experienced members.
If each director nominee is elected to the Board after the 2022 Annual Meeting, our directors will have served an average of 8.4 years. Given that Bloom was the first solid oxide fuel cell company to reach commercial scale, along with the complexity of our business and the fact that the energy industry and our business are rapidly evolving, we believe that a mix of long- and short-tenured directors promotes an appropriate balance of views and insights and allows the Board as a whole to benefit from the historical and institutional knowledge that longer-tenured directors possess and the fresh perspectives contributed by newer directors. The Board believes the current average tenure of 8.4 years for its directors is consistent with the balance the Board seeks between different perspectives brought by longer serving directors and new directors.
The Board is focused on combining the right mix of tenure, skills, experience and diverse perspectives to support our growth and obtain operational leverage to scale, bringing to production a number of new products and delivering on international expansion. The Nominating Committee continues to focus on Board refreshment to align the Board’s long-term composition with its long-term strategy.
Stockholder Nominations
Any stockholder may nominate a person for election as a director candidates.by complying with the procedures set forth in the Bylaws. See the section later in this Proxy Statement entitled “Stockholder Proposals and Nominations.”
2022 PROXY |
Corporate Governance
Class IIII Directors Standing for Election at the 20212022 Annual Meeting
Mary K. Bush
Background
Director Qualifications:
Dr. Boskin is recognized internationally for his research on world economic growth, tax and budget theory and policy, U.S. saving and consumption patterns and the implications of changing technology and demography on capital, labor and product markets. In addition to his background in public policy, he brings to the Board significant economic, financial and energy expertise, including through his experience on the board of a publicly traded energy company and a publicly traded technology company. Dr. Boskin’s experience as CEO of his consultancy firm and as a director of another large, complex global organization also provides the Board with important perspectives in its evaluation of our governance practices and processes. In addition, his prior service on a public company audit committee supports the development of the Audit Committee function as we mature as a public company.
Corporate Governance
Background
Director Qualifications:
Mr. Chambers’ experience in leading and scaling Cisco Systems as its CEO and Chairman for over 20 years, building and implementing strategic growth plans as well as his experience with early stage companies, provides valuable perspective to the Board in growing and scaling an organization, particularly in the areas of operations, sales, human capital management, recruitment and executive compensation. Mr. Chambers’ international experience and relationships and his skill in promoting innovative new products and technology are valuable to the Board as we continue to expand globally.
Background
Director Qualifications:
Mr. Doerr, through Kleiner Perkins, was the first investor in Bloom, and he brings valuable institutional knowledge to the Board given his long-standing history with Bloom and extensive knowledge of the management team and our operations. His public company board experience and understanding of governance practices has helped us in our transition from a private to a public company. His deep technology expertise and experience in developing, scaling and managing technology companies and their management make him well-suited to serve on the Board and the Compensation Committee.
Corporate Governance
Class I Directors – Terms Expiring at the 2022 Annual Meeting of Stockholders
Background
Director Qualifications:
General Powell’s senior leadership positions at the highest levels of the U.S. government and philanthropic enterprises, as well as his extensive experience in building organizations and recruiting, developing, motivating and managing human capital, provides a valuable perspective to the Board, particularly in the areas of leadership, human capital management, executive compensation, governance and strategic planning and operations. Additionally, his experience on the board of the global leader in customer relationship management gives him significant insight into business development strategies and branding for the digital age.
Background
Director Qualifications:
Mr. Sandell brings valuable institutional knowledge to the Board given his long-standing history with us and extensive knowledge of the management team and our operations. Mr. Sandell’s technical background, operations experience with a wide range of technology companies and international experience has been instrumental in helping us develop and implement our supply chain and manufacturing operations and expand customer relationships. Mr. Sandell’s service on a number of public and private company boards lends a valuable breadth and depth of expertise to the Board on all aspects of scaling an organization and business models for new technologies. In addition, his background provides an important perspective to the Board and the Compensation Committee and Nominating Committee on best practices in human capital management, executive compensation and governance. Mr. Sandell’s extensive network from his role in the venture capital industry and related organizations provides the Board a wealth of knowledge regarding emerging technologies and practices.
Corporate Governance
Background
Director Qualifications:
As a founder of Bloom who has guided our growth and development as both CEO and Chairman for almost 20 years, Mr. Sridhar has proven, unparalleled and in-depth knowledge of our technology, operations, markets, regulatory environment, customers, employees and competition. Mr. Sridhar’s depth and breadth of technological and scientific expertise and experience with technological innovation bring invaluable insight to the Board concerning our products and development strategies. In addition, his knowledge and strategic vision for the energy industry aids the Board in its strategic planning. Mr. Sridhar provides management’s perspective in Board discussions and brings important insight regarding our strategy and operations to the Board’s deliberations.
Corporate Governance
Class lI Directors – Terms Expiring at the 2023 Annual Meeting of Stockholders
President of Bush International, LLC | |||
Age: 73 | Director Since: INDEPENDENT Committee Membership: Audit (Chair & Financial Expert) | ||
Public Company Boards: Discover Financial Services | Director Qualifications: Ms. Bush’s senior executive and leadership roles in international public and private financial institutions bring to the Board extensive experience and knowledge in capital markets and finance and accounting, particularly in areas of accounting principles, financial reporting rules and regulations and oversight of the financial reporting process at public companies. These prior roles also provide Ms. Bush with wide-ranging experience with U.S. and foreign governments and financial regulatory systems and risk management, all of which make Ms. Bush uniquely qualified as Chair of the Audit committee. Ms. Bush’s public company board experience provides governance expertise to the Board concerning public company governance practices and ESG oversight. In addition, Ms. Bush’s significant experience in global business and financial markets is extremely valuable to us as we expand our business globally and seek customer financing options in tandem with our global expansion. |
Background
President of Bush International, LLC, an advisor to U.S. corporations and foreign governments on international capital markets, strategic business and economic and governance matters since 1991 | |
Held several Presidential appointments, including the U.S. Government’s representative on the International Monetary Fund Board and Director of Sallie Mae Bank | |
Former head of the Federal Home Loan Bank System during the aftermath of the Savings and Loan crisis and was advisor to the Deputy Secretary of the U.S. Treasury Department | |
Earlier in her career, managed global banking and corporate finance relationships at New York money center banks, including Citibank, N.A., Banker’s Trust Company and JPMorgan Chase Bank, N.A | |
Appointed by the Secretary of the Treasury to the U.S. Treasury Advisory Committee on the Auditing Profession in 2007 | |
Appointed by President George W. Bush as Chair of the congressionally-chartered HELP Commission on reforming foreign aid in 2006 | |
Director of Briggs & Stratton, Inc. from 2004 to March 2009, of United Continental Holdings, Inc. from 2006 to 2010, of the Pioneer Family of Mutual Funds from 1997 to 2012 and of Marriott International, Inc. from 2008 to 2020 | |
Member of Kennedy Center’s Community Advisory Board | |
Chairman of the Capital Partners for Education, a not-for-profit organization that mentors |
KR Sridhar
Founder, Chief Executive Officer and Chairman of Bloom Energy | Age: 61 Director Since: Committee Membership: None Public Company Boards: None | Director Qualifications: As a founder of Bloom who has guided our growth and development as both CEO and Chairman for over 20 years, Mr. Sridhar has proven, unparalleled and in-depth knowledge of our technology, operations, markets, regulatory environment, customers, employees and competition. Mr. Sridhar’s depth and breadth of technical and scientific expertise in the areas of chemistry and physics and his experience with technological and manufacturing innovation bring invaluable insight to the Board concerning our products and development strategies. With over 20 years at Bloom Energy, Mr. Sridhar brings significant senior leadership, industry knowledge and human capital management experience. In addition, his knowledge and strategic vision for the energy industry and our product development aids the Board in its strategic planning. Mr. Sridhar provides management’s perspective in Board discussions and brings important insight regarding our strategy and daily operations to the Board’s deliberations. |
Background
● | Founder of Bloom and has served as Chief Executive Officer and Chairman of the Board since March 2002 |
● | Prior to founding Bloom, served as director of the Space Technologies Laboratory at the University of Arizona, where he was also a professor of Aerospace and Mechanical Engineering |
● | Has served as an advisor to NASA and has led major consortia of industry, academia and national labs |
● | Currently serves as a strategic limited partner at Kleiner Perkins |
● | Served on many technical committees, panels and advisory boards, and has several publications and patents |
Director Qualifications:
Ms. Bush’s senior executive roles; extensive experience and knowledge in finance and accounting, particularly in areas of accounting principles, financial reporting rules and regulations and oversight of the financial reporting process at public companies; and wide-ranging experience with government and regulatory systems, provide important skills and qualifications to the Board, especially as Chair of the Audit Committee and with respect to risk management. Ms. Bush’s public company board experience provides governance expertise to the Board concerning current governance practices. In addition, Ms. Bush’s significant experience in global business and financial markets is extremely valuable to us as we look to expand our customer financing options in tandem with our global expansion.
Corporate Governance
Class lI Directors – Terms Expiring at the 2023 Annual Meeting of Stockholders
Jeffrey Immelt
Former Chairman and CEO of General Electric | |||
Age: 66 | Director Since: INDEPENDENT Committee Membership: | ||
Compensation Public Company Boards: Twilio Inc. | Director Qualifications: Mr. Immelt brings to the Board more than 30 years of public company senior executive and boardroom experience, including nearly 20 years at the helm of GE, a world-leading, technologically innovative global enterprise, where he helped reshape and modernize its global business and financing strategy. Mr. Immelt’s experience and insights in all aspects of running a multinational business, including in diverse areas such as operations, sales and marketing, human capital management, executive compensation and product and service management and related business models, are invaluable as we endeavor to scale our business, diversify our product portfolio, develop new partnerships and business models and expand our markets, both in the United States and globally. Given GE’s energy business, Mr. Immelt provides valuable expertise regarding the energy sector and its regulatory and competitive landscape and evolving ESG landscape, particularly as to climate change. |
Background
Background
Venture partner at NEA since January 2018 | |
Former Chairman and CEO of General Electric (“GE”), a diversified industrial company, for 16 years, from 2001 to 2017, where he revamped the company’s strategy, global footprint, workforce and culture |
● | During his tenure, he led several innovative transformations that doubled industrial earnings, reshaped the portfolio, re-established market leadership, grew a strong share position in essential industries and quadrupled emerging market revenue |
Named one of the “World’s Best CEOs” three times by Barron’s | |
GE was named “America’s Most Admired Company” by Fortune magazine and one of “The World’s Most Respected Companies” in polls by Barron’s and the Financial Times during his tenure | |
Recipient of 15 honorary degrees and numerous awards for business leadership | |
Chaired the President’s Council on Jobs and Competitiveness under the Obama Administration | |
Member of The American Academy of Arts & Sciences |
Director Qualifications:Eddy Zervigon
Background
Corporate Governance
Class lII Directors – Terms Expiring at the 2024 Annual Meeting of Stockholders Michael Boskin
Background
John T. Chambers
Background
CORPORATE GOVERNANCE Director Skills and Experience As we discuss above under “ strategy and risk management.
CORPORATE GOVERNANCE Our Board and Governance Structure Corporate Governance The Board is responsible for providing governance and oversight over the strategy, operations and management of Bloom Energy and to represent and protect the interests of our stockholders. The Board oversees senior management to whom it has delegated the authority to manage the day-to-day operations. The Board has adopted Corporate Governance Guidelines, Committee Charters and a Global Code of Business Conduct and Ethics, which, together with the Restated Certificate and Bylaws, form the governance framework for the Board and its Committees. The Board has also adopted Director and Executive Stock Ownership Policy and a Policy on Recoupment and Forfeiture of Executive Compensation (the “Clawback Policy”). The Board reviews annually its corporate governance documents and revises them when the Board believes it is in the best interests of Bloom Energy and stockholders to do so, including in response to feedback from stockholders, changing regulatory and governance requirements, the Board and committee’s self-assessment and evolving best practices. The following sections provide an overview of our corporate governance structure, director independence, our Board leadership structure and the risk oversight and responsibilities of the Board and each of its committees. How We Determined Our
Our governance practices are designed to support our mission to make clean, resilient, reliable and affordable energy, and to support our ability to capitalize on the market opportunity arising from the global transition to resilient and clean energy and distributed generation. Our governance practices are designed to optimize success based on the nature of our technology and the market environment we face. Our Bloom Energy Server is an innovative, new technology in a rapidly evolving area of the energy The Board, after careful deliberations and in view of The As a final note, we do not consider Bloom Energy to be a controlled corporation under NYSE rules. Although Mr. Sridhar, our CEO, does have voting agreements in place with other stockholders that, in previous years, gave him more than 50% of the voting power, those voting agreements could be eliminated at any time by the counterparty stockholder by converting their respective Class B common stock to Class A common stock, which could have the effect of reducing Mr. Sridhar’s voting power below 50%. As of the Record Date, the voting agreements between Mr. Sridhar and certain stockholders covered 12,753,442 shares of Class B common stock (inclusive of Mr. Sridhar’s shares), which represents approximately 39.93% of the outstanding voting power of our common stock (see “Voting Agreements” on page 87 for additional details).
CORPORATE GOVERNANCE
Corporate Governance Highlights Many of our corporate governance practices are aligned with the Investor Stewardship Group’s (ISG) Corporate Governance Framework for U.S. Listed Companies, as shown in the table below.
CORPORATE GOVERNANCE Under NYSE listing standards, a director will qualify as an “independent director” only if the director does not have a disqualifying relationship and, in the opinion of that listed company’s board of directors, that director does not have a material relationship with the listed company, either directly or indirectly, that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. The Nominating Committee and the Board perform an annual review of the independence of each director and nominee. At least annually, the Nominating Committee receives a report on all commercial, consulting, legal, charitable or other business relationships that a director or the In making its independence determination with respect to our non-employee directors ordinary vendor relationships we have with certain companies for which they serve as non-employee directors. With respect to the members of the Compensation Committee and Audit Committee, the Nominating Committee and full Board considered the heightened independence requirements under the NYSE listing standards. common stock. In addition, the Nominating Committee and the Board considered that two of its members Based on the information provided by each director concerning his or her background, employment and affiliations, and the report discussed above, the Board has determined that none of our non-employee directors has a material relationship with us, either directly or indirectly, that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director and that Mr. Sandell and John Doerr were independent during the period they served on the Board, and General Powell was not independent during the period he served on the Board. Mr. Sridhar is not independent due to his role as our CEO. We believe that independent board oversight and leadership is essential for the Board to effectively perform its functions. Our Corporate Governance Guidelines and the Bylaws provide the Board with the flexibility to choose the appropriate Board leadership structure based on what it believes is in the best interest of Bloom Energy and its stockholders at a given point in time. Our Governance Guidelines and Bylaws do not require the separation of the offices of the Chairperson and the Chief Executive Mr. Sridhar, our founder and CEO, has also historically served and is currently serving as Chairman of the
CORPORATE GOVERNANCE independence of the Board (as of the annual meeting, all of our current directors other than the CEO will be independent) and the strong leadership and meaningful responsibilities of the lead independent director. As CEO, Mr. Sridhar’s direct involvement in our operations enables him to communicate knowledgeably, timely and openly with the rest of the Board regarding short- and long-term objectives, identification of strategic priorities and execution of these strategies. This helps the Board focus on important strategic objectives, yet also We believe it is important that the Board retain flexibility to determine whether the CEO and Chairman roles should be separate or combined based upon the Board’s assessment of our needs. The Board will continue to evaluate the appropriateness of this leadership structure and whether it continues to be in the best interest of Bloom Energy and its stockholders. Lead Independent Director The lead independent director is elected annually by the independent directors of the Board. Mr. Immelt currently serves as our lead independent As described in our Corporate Governance Guidelines, our lead independent director
Information Regarding the Board and its Committees The Board held Independent directors meet in executive session without any members of our management present at almost every regularly scheduled Board meeting. The lead independent director chairs each of these executive sessions. These executive sessions promote an open discussion of matters in a manner that is independent of the Chairman and CEO. It is our policy to encourage our directors to attend annual meetings of stockholders, and we expect that all directors will attend the To support effective corporate governance, our Board delegates certain responsibilities to its committees, who regularly report on their activities to the Board. These committees have the authority to engage legal counsel or other advisors or consultants as they deem appropriate to carry out their responsibilities. The Board has three standing committees: the Audit Committee, the Compensation Committee and the Nominating Committee. Only independent directors serve on the Board committees. In our efforts to continually refresh the Board and its committees, during fiscal 2021, with the resignation of John Doerr from the Board and Compensation Committee, Mr. Immelt joined the Compensation Committee and left the Audit Committee, which had four members, inclusive of Mr. Immelt.
CORPORATE GOVERNANCE
The Board has adopted written charters for each of its committees, and copies of the charters are available on our website at www.bloomenergy.com in the Corporate Governance section of our Investors page. Each of the committee charters is reviewed annually by the respective committee, which may recommend appropriate changes for approval by the Board.
Board’s Role and Responsibilities Strategy The Board has oversight responsibility for management’s establishment and execution of corporate strategy. The Board is deeply engaged and involved in overseeing our long-term strategy, including, among other areas, the focus of our product development in light of the evolving energy landscape and drive to decarbonization, market opportunities and related policy and regulation, our manufacturing capacity and footprint and how we adapt our business model to enable scale and focus. Sustainability is a core part of our business, and so environmental and climate-related topics are inherently part of the full Board’s discussion on long-term planning, financial risk, regulatory and policy issues and other changes occurring in the energy industry. Elements of our strategy are discussed at every regularly scheduled Board meeting guided by our current priorities, as well as achieving long-term, profitable growth. The Board also engages with the executive management team and leaders of our product and market areas and regularly reviews the strategic and operational priorities, the competitive environment and regulatory and policy trends. The Board, at its meetings, regularly discusses its capital allocation plans, its performance against its budget and potential actions to take for alignment on strategic priorities. Risk Oversight The Board’s oversight of risk is an integral component of the Board’s oversight and engagement on strategic matters. The Board is responsible for overseeing our risk The full Board has primary responsibility for evaluating strategic and operational risk management. The Audit Committee is responsible for overseeing our major financial and legal risk exposures, which span a variety of areas, including litigation, legal and regulatory compliance, financial reporting and controls, credit and liquidity, capital allocation, IT,
CORPORATE GOVERNANCE 2021 Focus Areas
In light of the evolving energy industry, the Board spent significant time on our strategy to drive decarbonization as part of our product solutions and the introduction of new products, enter into new product markets and territories, and review new or developing regulation and policy. This included a review of climate related shifts in technology and customer, stockholder and other stakeholder expectations. In addition, in light of our growth, the Board focused on our development of new production capacity, new business models and strategic partnerships.
technology.
Our investor relations website at
The Board has adopted Corporate Governance Guidelines that provide the framework for our corporate governance, along with
Board and Committee Evaluations The Board and its principal committees perform an annual self-assessment to (i) foster a culture of accountability for performance and continuous improvement and (ii) identify forward-looking needs for skills and experience of Board members so that the Board is able to meet its strategic objectives. The annual evaluation process provides the Board with valuable insight regarding areas where the Board believes it functions effectively, and where it can improve. The Chairman of the Nominating Committee, together with the lead independent director, The Board and committee evaluation process for
Director Orientation We provide an orientation process for new directors that includes background material, meetings with senior management and visits to our facilities. The orientation is designed to assist new directors in developing knowledge related to Bloom Energy and the industry in order to allow them to optimize their service on the Board. This orientation process may include presentations by senior management to familiarize new directors with our strategic plans, our technology, products and manufacturing, supply chain and install operations, our significant accounting, financial and risk management issues, our compliance program and our Code of Conduct. Director Education The Board encourages all directors to stay abreast of developing trends for directors from the variety of sources available. The Nominating Committee has established a policy regarding reimbursement of directors for reasonable costs associated with the directors’ participation in continuing education programs related to their service as directors. Director education is also integrated into the Board and committee meeting calendars. Members of management and subject matter experts participate in director education sessions, which provide an opportunity for our directors to stay current with respect to our business, emerging corporate governance topics or other issues pertaining to their service on the Board. Stock Ownership Policy To align the interests of our directors and stockholders, our non-employee directors are required to own our shares equal in value to at least four times the annual retainer. Each director must retain 100% of all net settled shares received from the vesting, delivery or exercise of equity awards granted under our equity award plans or programs. Stock deferred under the Deferred Compensation Plan (as described below) for non-employee directors also counts toward the minimum ownership requirement. Each of our directors complied with our stock ownership policy as of the end of 2021. For additional information regarding our Stock Ownership Policy as it applies to our executive officers, please see the section entitled “Compensation Discussion and Analysis – Additional Information – Stock Ownership Policy.” Stockholder Communications with Our Board of Directors Stockholders and other interested parties may communicate with the Board, the lead independent director, the independent directors as a group or individual directors by sending a communication to: Bloom Energy Corporation Each communication should specify the intended recipient(s). The Office of the Corporate Secretary will initially process the communications and forward appropriate material to applicable members of the Board.
CORPORATE GOVERNANCE
The Board has adopted a written related-party transactions policy which, along with the charter of the Audit Committee, requires that any transaction with a related party that must be reported under the applicable SEC rules must be reviewed and approved or ratified by the Audit Committee, unless the related party is, or is associated with, a member of the Audit Committee, in which event the transaction must be reviewed and approved by the Nominating Committee. Our related-party transactions policy applies to transactions, arrangements or relationships in which we are a participant, in which the amount involved exceeds $120,000, and in which a related party has or will have a direct or indirect material interest. A related party would include: (i) any of our directors, nominees for director or executive officers, (ii) any immediate family member of a director, nominee for director or executive officer, and (iii) any person, and his or her immediate family members, or entity that is known by us to be a beneficial owner of 5% or more of any of our outstanding equity securities at the time the transaction occurred or existed. The Audit Committee has determined that, barring additional facts or circumstances, a related person does not have a direct or indirect material interest in the following categories of transactions:
Bloom personnel in the Legal and Finance departments review transactions involving related persons that are not included in one of the preceding categories. If they determine that a related person could have a significant interest in such a transaction, the transaction is forwarded to the Audit Committee for review. In determining whether to approve or reject a related-party transaction, the Audit Committee considers the relevant and available facts, including the impact on a director’s independence if the related party is a director, immediate family member of a director or an entity with which a director is affiliated, the terms of the transaction and any other relevant information and considerations. The Audit Committee will approve only those transactions with related parties that, in light of known circumstances, are in or are not inconsistent with the best interest of Bloom and its stockholders, as the Audit Committee determines in the good faith exercise of its discretion. The Audit Committee may impose such conditions as it deems appropriate on Bloom or the related party in connection with the approval of the proposed transaction. In October 2021, we entered into a transaction with SK ecoplant in which SK ecoplant purchased 10 million redeemable convertible preferred stock at a purchase price of $25.50 per share for an aggregate purchase price of $255 million. In addition, we and SK ecoplant executed an amendment to the Joint Venture Agreement, an amendment and restatement to our Preferred Distribution Agreement and a new Commercial Cooperation Agreement regarding initiatives pertaining to the hydrogen market and general market expansion for the Bloom Energy Server and Bloom Energy Electrolyzer. These agreements were approved by the Board. These transactions did not constitute a related-party transaction that required approval by the Audit Committee. In light of the close relationship between the parties and SK ecoplant’s ownership of 10 million shares of redeemable convertible preferred stock, the Audit Committee will review future agreements between the parties.
Non-Employee Director Compensation Program Our directors play a critical role in guiding our strategic direction and overseeing the management of Bloom, which requires considerable time commitments and responsibilities. The Board believes it is in our best interest and in the best interests of our stockholders to Role of Compensation Consultant The Compensation Committee has retained the services of Compensia, Inc. (“Compensia”), an independent compensation consultant, to assist the Compensation Committee in evaluating and refining our Board
Annual Cash Compensation The following is a summary of the cash compensation that we provide to our Qualifying Directors on an annual basis. Such cash compensation is paid in quarterly installments. In addition, all of our directors are reimbursed for reasonable expenses incurred in attending Board and committee meetings, including reasonable expenses for travel, meals and lodging.
Equity Compensation In May
Table of CORPORATE GOVERNANCE
On May 12, Upon the passing of General Powell, the Board approved the acceleration of his unvested RSUs and extension to the time for which his estate may exercise his outstanding and unexercised stock options, which are all fully vested. Non-Employee Director Deferred Compensation Plan In November 2019, the Board
Mr. Sandell
The following table provides information for all compensation awarded to or earned by our Qualifying Directors for the year
Information about Our Executive Officers There are no arrangements or understandings between any executive officer and any other person pursuant to which he or she is or was to be selected as an officer. There are no family relationships between any of our executive officers or directors. Information about our executive officers as of the Record Date is set forth below:
Background
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Background Gregory Cameron has served as our Executive Vice President and Chief Financial Officer since April 2020. Prior to joining Bloom Energy, Mr. Cameron was an officer at General Electric, a diversified industrial company. Over his 26-year career there, Mr. Cameron had a strong history of driving change, fostering positive transitions and conquering challenges through sound fiscal and business direction. Mr. Cameron served as President and Chief Executive Officer, Global Operations-GE Company from 2018 through 2019, and as President and Chief Executive Officer, Global Legacy Solutions-GE Capital from 2016 through 2018. Prior to 2016, he served in various senior roles with General Electric, including as Chief Financial Officer, Americas-GE Capital from 2009 through 2016. Mr. Cameron holds a bachelor’s degree in Economics from St. Lawrence University.
Background Venkat Venkataraman has served as our Executive Vice President of Engineering and Chief Technology Officer since December 2003. He has authored or co-authored several patents in the areas of solid oxide fuel cell technology, fuel processing and heat integration and control systems. He built global engineering, services, IT and installation teams to support the growth of the business. His recent focus is on decarbonization using carbon capture and Mr. Venkataraman is retiring and his last day of service will be June 30, 2022.
INFORMATION ABOUT OUR EXECUTIVE OFFICERS
Background
Background Shawn M. Soderberg has served as our Executive Vice President, General Counsel and Secretary since January 2016. Prior to joining Bloom Energy, Ms. Soderberg was the Executive Vice President, General Counsel and Secretary of Bio-Rad Laboratories, a global medical technology provider for the life science and clinical diagnostics industries from 2013 to 2016. Prior to that, Ms. Soderberg was the Senior Vice President, General Counsel and Secretary of Aricent Group, a global design and software engineering services and product company, from 2006 to 2013; Managing Director and General Counsel of H&Q Asia Pacific, a private equity firm, from 2000 to 2006; Vice President, General Counsel and Secretary of Oak Technology, a semiconductor and embedded solutions provider for the optical storage and the digital home entertainment market, from 1996 to 2000; and General Counsel of Microtec Research, Inc., a software provider for embedded systems, from 1994 to 1996. Ms. Soderberg holds a bachelor’s degree in Accounting from the University of Santa Clara, a J.D. from Seattle University School of Law and an LL.M. in Taxation from New York University.
Background
INFORMATION ABOUT OUR EXECUTIVE OFFICERS
We have a diverse senior management team that brings proven track records of success in business, operating skill and excellence in leadership. As we continue to grow our business, we recognize that diverse leadership translates to a variety of experiences, viewpoints and, ultimately, more informed decisions. We believe the various skill sets and experiences of our senior management team will be invaluable as we endeavor to scale our business and expand our markets, both in the United States and globally. The following individuals, in addition to the executive officers discussed above, complete our senior management team:
Background
Carl Guardino has served as Executive Vice President, Government Affairs and Policy since August 2020. Prior to joining Bloom Energy, Mr. Guardino was the longtime President and CEO of the Silicon Valley Leadership Group, a prominent public policy trade association that represents more than 350 of Silicon Valley’s most respected
Background
Sharelynn Moore has served as Executive Vice President and Chief Marketing Officer since August 2020. Ms. Moore was brought to Bloom Energy to lead our growth efforts. Her responsibilities include market strategy, new business development, product management and all marketing and communications. Prior to joining Bloom Energy, Ms. Moore served as Senior Vice President of Networked Solutions at Itron, a leader in the Industrial Internet of Things (“IIoT”), where she had responsibility for Itron’s largest business segment, as well as Itron’s IIoT technology and smart city strategy. During an 18-year career at Itron, Ms. Moore held leadership roles with increasing levels of responsibility across marketing, communications, public affairs and product management functions.
Background Sonja Wilkerson has served as Executive Vice President and Chief People Officer since January 2019. Ms. Wilkerson has more than 30 years of Human Resources leadership experience and most recently served as Senior Vice President of Human Resources at Infinera Corporation, an optical networking company, where she successfully developed talent strategies to drive organizational effectiveness through the integration of people, technologies, processes and
Compensation Discussion and Analysis This Compensation Discussion and Analysis describes our executive compensation program for our named executive officers, including our executive compensation policies and practices, how and why the Compensation Committee arrived at the compensation decisions for our named executive officers, and the key factors the Compensation Committee considered in making those decisions. Our named executive officers for
Executive Summary
We continue to make critically important decisions to deliver on our purpose, advance our mission and set a For a more detailed description of Bloom and other financial and business highlights, please see the section above entitled “Who We Are”.
Our
Compensation Philosophy and Objectives Our mission is to make clean, reliable and affordable energy for everyone in the world. Our compensation philosophy and programs are designed to attract, retain and motivate talented employees who will help us realize this vision, contributing at a high level
We seek to achieve these objectives by providing compensation that is competitive with the practices within our market for talent and by linking compensation to both our overall performance and individual performance. In evaluating our performance and determining the compensation of our named executive officers, the Compensation Committee considers our financial performance and achievement of goals incorporated in our short- and long-term incentive plans. In addition, the Compensation Committee considers non-financial achievements that support our long-term growth, including attracting and retaining a diverse and talented leadership team, developing new and improved products, navigating a complex regulatory environment, and adding and expanding significant market partnership. The Compensation Committee also has the ability to exercise judgment to account for extraordinary or non-recurring events, including extreme market conditions. In addition, the Compensation Committee seeks to ensure that we maintain sound governance and compensation policies and practices. In designing and overseeing our executive compensation program, we strive to employ best practices and regularly assess our policies and practices.
Pay-for-Performance Philosophy Consistent with our philosophy of aligning executive pay with our short-term and long-term performance, and to align the interests of management and stockholders, our compensation program is designed to provide the majority of executive compensation in the form of at-risk cash and equity incentives and long-term vesting stock awards. This approach ensures that the compensation opportunity for our named executive officers is aligned with the interests of our stockholders and focused on sustained stockholder value creation. The Board believes that the achievement of profitability is important for Bloom Energy and attempts to align at risk cash and equity incentives with performance targets that will drive profitability. As shown below, approximately
Executive Compensation
Fiscal 2021 Chief Executive Officer Compensation
Rationale for CEO Performance Award Recognizing that
CEO Performance Award to Mr. Sridhar for the following reasons: The CEO Performance Award consists of the opportunity to earn up to a target of two million shares of our Class A common stock, which was equal to approximately 1.2% of outstanding shares of our common stock on the day prior to the grant date. If Mr. Sridhar achieves the maximum performance under the CEO Performance Award, he will earn 3.2 million shares of our common stock, which would be equal to approximately 1.9% of outstanding shares of our common stock on the day prior to the grant date. The reported accounting value of the CEO Performance Award is $31.6 million, or $6.3 million, when annualized over the five-year intended time horizon of the grant. In With respect to the PSU Award described below that is to be earned, if at all, based on our revenue growth and gross margin (the “Revenue/Growth Margin Award”), the Compensation Committee selected top-line and bottom-line corporate financial performance metrics that it believed would be effective and appropriate indicators of whether we were on track to achieving our long-term financial objectives and which were consistent with the metrics that we have used in prior years to evaluate our progress and growth. It also spread out the desired achievement of these goals over a multi-year period in recognition of the steady and incremental nature of the progress we would need to create sustainable value creation for our stockholders over the long-term.
As to both of Mr. Sridhar’s PSU awards, the Board believes that the achievement of profitability is important for Bloom Energy and The CEO Performance Award is designed to retain Mr. Sridhar’s continued leadership over Bloom Energy over the Executive Compensation Program Design Our current executive compensation program is intended to align executive compensation with our business objectives and to enable us to attract, retain and reward executive officers who contribute to our long-term success and, by extension, that of our stockholders. The material elements of our executive compensation program for
The Compensation Committee does not have a set formula by which it determines how much of the executive’s compensation is fixed (i.e., base salary) rather than variable or “at risk” (i.e., performance-based equity and non-equity incentives, periodic or “spot” bonuses). We do not provide fringe benefits such as a car allowance or other perquisites to our executive officers. The executive officers participate in our standard health and welfare programs, including group health and life insurance, dental insurance and vision insurance that all other employees participate in. They are also eligible to participate in a 401(k) retirement savings plan and, other than Mr. Sridhar who is not currently eligible, are offered an opportunity to participate in the Consideration of 2021 Say-on-Pay Vote At the 2021 Annual Meeting, approximately 99% of the votes cast were in favor of the advisory vote to approve executive compensation. In light of the strong support, the Compensation Committee did not make any changes to our compensation programs directly as a result of the vote. We will continue to consider our stockholders’ input in all facets of our business, including executive compensation.
Compensation Decision-Making Process Determination of Compensation Awards The Compensation Committee’s goal is generally to target elements of compensation within a competitive range, using a balanced approach that does not use rigid percentiles to target pay levels for each compensation element. For
The Compensation Committee does not assign relative weights or rankings to any of these factors and does not solely use any quantitative formula, target percentile or multiple for establishing compensation among the executive officers or in relation to the competitive market data. Role of the Committee The Compensation Committee is responsible for overseeing our executive compensation program and all related policies and practices. The Compensation Committee operates pursuant to a formal written charter approved by the Board, which is available on our website at https://investor.bloomenergy.com/. At least annually, the Compensation Committee reviews our executive compensation program and formulates recommendations for the consideration and approval by the Board of the various elements of our named executive officers’ compensation, as well as any employment arrangements with our named executive officers. The Compensation Committee is responsible for taking action with respect to compensation that will attract and retain the highest quality executives that will clearly articulate the relationship of corporate performance to executive compensation and that will reward executives for our progress. The Compensation Committee meets regularly during the fiscal year both with and without the presence of our CEO and other named executive officers. The Compensation Committee also discusses compensation issues with our CEO (except with respect to his own compensation) and other members of the Board between its formal meetings. Role of Management The compensation of all of our named executive officers is determined by the Compensation Committee. In discharging its responsibilities, the Compensation Committee also works with members of our management, including our CEO. Our management assists the compensation committee by providing information on corporate and individual performance, competitive market data and management’s perspective and recommendations on compensation matters. Our CEO attends the Compensation Committee meetings and discusses with the Compensation Committee the compensation and performance of all executive officers, other than himself. Our CEO bases his recommendations in part upon his review of the performance of our executive officers. The Compensation Committee may exercise its discretion in modifying any recommended compensation adjustments or awards to such named executive officers. The Compensation Committee reviews and discusses these recommendations and proposals with our CEO and uses them as one factor in determining and approving the compensation for our executive officers. Role of the Consultant The Compensation Committee relies on its independent compensation consultant to provide advice on matters relating to the compensation of our executives and non-employee directors. Compensia, a national compensation consulting firm, served in this capacity during
A representative of Compensia attended Compensation Committee meetings in
Compensia reports directly to the Compensation Committee and provided no services to us other than the consulting services to the Compensation Committee. The Compensation Committee reviews the objectivity and independence of the advice provided by Compensia. In Role of Competitive Market Data As part of its annual compensation review process, the Compensation Committee generally reviews an analysis prepared by Compensia of market pay practices for positions similar to the positions of our named executive officers and other key executives, adjusted to take into account differences, if any, in the scope of the executive officers’ responsibilities compared to their counterparts in positions with similar titles in comparable companies. In
The companies used for comparison purposes (our “peer group”) for
Principal Elements of Compensation Base Salary Base salaries for our executive officers are intended to provide a level of compensation sufficient to attract and retain an effective management team when considered in combination with the other components of our executive compensation program. The Compensation Committee reviews and reassesses the base salaries of our named executive officers following the completion of each fiscal year. In determining base salaries for our named executive officers for
Non-Equity Incentive Plan We provide our senior
For 2021, the
target was paid in July 2021, while the final annual calculation resulted in a true-up payment. Our actual
Executive Compensation In light of these factors and based on an assessment of our overall performance, the Compensation target for the fiscal year 2021. The cash incentives earned by the named executive officers also included the following individual performance modifiers, resulting in the following combined modifiers:
Based on our achievement during the year, our named executive officers earned the following cash incentive bonuses based on company and individual performance in
Cash Bonus Program The Compensation Committee may award spot or other bonuses to reward extraordinary performance, the achievement of corporate goals, for retention purposes, relocation or for other reasons. In Equity Compensation In
officers other than our CEO. The combination of RSU and PSU awards set forth in the table below The RSU awards granted vest over three years, with a third vesting on the one-year anniversary of the grant date and the remaining vesting quarterly thereafter. In
38,978 shares, he was granted an additional award of 36,000 RSUs for retention purposes that vests fully on December 21, 2022, subject to his continuous service through the vesting date.
Performance-Based In The Compensation Committee approved threshold and target non-GAAP gross margin goals equal to 25% and 28%, respectively, and approved threshold and target cash flow from operations goals of $0 and $50 million, respectively, as the financial targets for our 2021 PSUs. In January 2022, the Compensation Committee approved a payout percentage equal to 75% of target for the annual PSU awards in 2021. This result reflected the impact of an adjustment to our gross margin results approved by the Compensation Committee due to the unanticipated, non-recurring global supply chain disruptions that negatively impacted our operating income by approximately $61 million during 2021. This adjustment increased our non-GAAP gross margin performance from 21.7% to 28%, which is the maximum goal of 28% for the 2021 PSUs and resulted in a payout equal to 150% of target for the gross margin component of the PSUs. Our actual cash flow from operations was below the threshold level of performance required for a payout. Earned PSUs will vest in equal one-third installments approximately
In
The tranches are weighted 34%, 33% and 33% of the target number of shares granted. Any shares not earned will be forfeited. KR Sridhar – CEO Awards As noted above, the CEO Performance Award contains both a time-based RSU award and two
Executive Compensation PSU Awards The units subject to the performance metrics include two distinct performance components: Revenue/Gross Margin Award. 30% of the target units subject to the CEO Performance Award are eligible to be earned in four equal annual increments, commencing in 2022 and ending in 2025 based on the achievement of revenue growth and gross margin goals Stock Price Hurdle Award. 50% of the target units subject to the CEO Performance Award are eligible to be earned based on the achievement of certain pre-established per share stock price targets through the sixth through ninth anniversaries of the date of grant (the “Performance Vesting Requirement”) and pre-established service-based vesting requirements (the “Service Vesting Requirements”). For this portion of the Stock Price Hurdle Award to vest for any units, both the Performance Vesting Requirement and the Service Vesting Requirement must be met with respect to such units. Revenue/Gross Margin Award For each year beginning with 2022 and ending with 2025, Mr. Sridhar is eligible to earn a target of 150,000 units pursuant to the Revenue/ Gross Margin Award (an amount equal to 7.5% of the CEO Performance Award) based on a formula that generates a number of points determined by comparing the sum of (i) our actual revenue CAGR less our revenue CAGR target (weighted 60%) and (ii) our actual gross margin less our gross margin target (weighted 40%) for each such year. Based on the number of points derived from this formula, Mr. Sridhar can earn between 0% to 300% of the target number of 150,000 units each year. Upon vesting, the Revenue/Gross Margin Award may be settled by issuing that number of shares of our common stock that equal the number of units that have vested. The points derived from the formula are evaluated on the following scale:
Stock Price Hurdle Award The units subject to the Stock Price Hurdle Award are divided into four equal tranches where performance will be deemed achieved in the event our average closing price for a 30-day period exceeds a stock price hurdle (as a multiple of our 30 day trailing average closing stock price on the grant date, which was $19.31) prior to the expiration date for the tranche. Each tranche vests on the later of achievement of the stock price hurdle or a specified minimum vesting date, as set forth in the table below. If the stock price hurdle for a tranche is not achieved by the applicable expiration date, the tranche is forfeited.
Upon vesting, the Stock Price Hurdle Award may be settled by issuing that number of shares of our Class A common stock that equal the number of units that have vested.
Executive Compensation RSU Award The time-based RSU award
Other Details of CEO Performance Award Service Requirement Vesting of the CEO performance award is contingent upon Mr. Sridhar’s continued service as our Chief Executive Officer, a different C-Suite level executive role, or as the Executive Chair of the Board as of each vesting date. Compensation Recovery (“Clawback”) Policy The CEO Performance Award is subject to our Clawback Policy. Termination of Employment (other than in Connection with a Change in Control) If Mr. Sridhar’s employment is terminated for “cause” (as defined in the award agreement) or he resigns for other than “good reason” (as defined in the award agreement), all of the shares of common stock subject to the CEO Performance Award will be forfeited. Upon a termination of employment other than for “cause” or upon Mr. Sridhar’s resignation for “good reason” (as defined in the award agreement), (i) the vesting will accelerate as to that number of units subject to the RSU Award that would have vested within 12 months of the date of termination and (ii) the Revenue/Gross Margin Award and Stock Price Hurdle Award will remain outstanding and eligible to vest for a period of 12 months following the date of termination (subject to the achievement of the applicable performance goals). Termination of Employment in Connection with a Change in Control If Mr. Sridhar’s employment is terminated without “cause” (as defined in the award agreement), or he resigns for good reason (as defined in the award agreement) in connection with a change in control of Bloom Energy, all of the unvested units subject to his RSU award will accelerate in full. Treatment of PSU Awards on a Change in Control With respect to his Revenue/Gross Margin Award, all of the unvested units tied to the market price of our common stock will be eligible to vest based on the acquisition price (with earned units vesting upon the close of the acquisition). All of the unvested units tied to the revenue and gross margin goals will be evaluated based on the acquisition stock price relative to a threshold and target stock price range between $48.16 and $120.40, respectively, as outlined in the table below.
With respect to his Stock Price Hurdle Award, (A) each unvested tranche for which the transaction price equals or exceeds the applicable stock price hurdle shall vest as of immediately prior to the change in control and (B) if the transaction price is between two stock price hurdles, the number of PSUs Any portion that does not vest shall automatically be forfeited following the closing of the change in control. Termination of Employment in Connection with Death or Disability In the event of Mr. Sridhar’s termination of employment due to death or disability, the remaining
Executive Compensation Post-Vesting Holding Period All after-tax vested shares of Class A common stock earned from the PSUs of the CEO Performance Award will be subject to
Additional Information Policy Prohibiting Insider Trading, Hedging and Use of Shares as Collateral To prevent unlawful activity and avoid even the appearance of impropriety, we have adopted a strict Insider Trading Policy that applies to our executive officers, as well as our directors, employees and consultants. This policy requires that our executive officers, directors and other designated insiders only transact in our securities during an open trading window and only after obtaining pre-clearance from our General Counsel or pursuant to a Rule 10b5-1 trading plan. Further, this policy prohibits engaging in certain short-term or speculative transactions in our securities such as put, calls and short sales. This policy also prohibits hedging, trading in a margin account or pledging our securities. Deferred Compensation Plan
Executive Change in Control and Severance Arrangements During 2021, the Compensation Committee reviewed our approach to executive severance in the context of market practice and our compensation objectives. The Compensation Committee considers maintaining a stable and effective management team to be essential to protecting the best interests of Bloom Energy and its stockholders. Accordingly, during 2021, we entered into CiC Agreements with certain of our executive officers, including each of our named executive officers, to encourage their continued attention, dedication and continuity with respect to their roles and responsibilities without the distraction that may arise from the possibility or occurrence of a change of control of Bloom Energy.
Details of the change-in-control and
detail below under “Potential Payments on Termination or Change in Control
401(k) Plan We maintain a qualified 401(k) retirement savings plan that allows eligible participants to defer up to 60% of eligible compensation, subject to applicable annual limits in the Internal Revenue Code, as amended (the “Code”). We do not match any contributions made by our employees, including executives, but have the discretion to do so. Stock Ownership Policy To help ensure a strong alignment between executives and stockholder interests, we have adopted an equity ownership policy. We require the executive management team to have an equity ownership interest in accordance with the following schedule by the fifth anniversary of becoming subject to these guidelines:
Executive Compensation
Shares that count towards satisfaction of this policy include: (i) shares of Class A Common Stock that are owned outright by him or her or his or her immediate family members residing in the same household; (ii) shares held in trust for the benefit of the executive officer or non-employee director or his or her family; (iii) Prior to the compliance date or until the target dollar value is achieved, and separate from any other post-vest holding requirement that may be imposed for any specific award, (i) each executive officer subject to the guidelines must retain 85% of all net settled shares received from the vesting, delivery or exercise of equity awards granted under our equity award plans or programs and (ii) each non-employee director must retain 100% of all net settled shares received from the vesting, delivery or exercise of equity awards granted under our equity award plans or programs. For purposes of the guidelines, net settled shares means all shares remaining after the sale of shares by the executive officer or non-employee director to pay any taxes due with respect to the shares received and, in the case of options, the exercise price, and all applicable transaction costs. Equity Awards and Grant Administration The Board has designated the Compensation Committee as the administrator of the 2018 Equity Incentive Plan (“2018 Plan”). The Compensation Committee, among other things, selects award recipients under the 2018 Plan, approves the form of grant agreements, determines the terms and restrictions applicable to the equity awards and adopts sub-plans for particular locations, if and as required. The exercise price of all stock options granted under our equity plans is the closing price of our Class A common stock on the date of grant. In accordance with the 2018 Plan, the Compensation Committee has delegated to our CEO and Because we believe equity awards are an important part of our compensation program, we also grant equity awards on an annual basis to key employees, including our executive officers. The Compensation Committee generally approves these annual equity grants in April of each year. In addition, the Compensation Committee may consider additional grants to key employees for retention purposes on an ad hoc basis.
Policy on Recoupment and Forfeiture of Incentive Compensation The Board has adopted a
In addition to the above, the Board may, in its sole discretion, require the forfeiture of any unpaid cash or equity-based incentive compensation award made or granted, whether vested (but unexercised) or unvested, to the above-listed individuals if they are terminated from their employment for “cause” or have engaged in any conduct that results in material harm to Bloom’s business or reputation or that of any of its affiliates. When the SEC adopts final clawback policy rules under the Dodd-Frank Wall Street Reform and Consumer Protection Act, we will review our Clawback Policy and conform provisions, if and as necessary, to comply with such rules. Tax Considerations Following the enactment of the Tax Cuts and Jobs Act, compensation in excess of $1 million earned by our executive officers who are subject to Section 162(m) of the Code is not deductible. The Compensation Committee has the discretion to approve, and we will continue to pay, compensation that will not be deductible for federal income tax purposes. Consistent with our compensation philosophy, we currently expect that we will continue to structure our executive compensation program so that a significant portion of total executive compensation is linked to the performance of Bloom.
Compensation Committee Report The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis with management. Based on its review and discussions with management, the Compensation Committee has recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement. Submitted by the following members of the Compensation Committee:
Scott Sandell (Chair)
COMPENSATION COMMITTEE REPORT
The following table presents summary information regarding the total compensation earned by our CEO, CFO and the three additional most highly compensated executive officers (together, our “named executive officers”) for service to us during
COMPENSATION COMMITTEE REPORT
The following table presents, for each of our named executive officers, information regarding
Mr. Brooks’ payout is pro-rated based on his start date.
COMPENSATION COMMITTEE REPORT
COMPENSATION COMMITTEE REPORT 2021 Outstanding Equity Awards at Fiscal Year-End The following table presents, for each of our named executive officers, information regarding outstanding equity awards held as of December 31, 2021.
COMPENSATION COMMITTEE REPORT
COMPENSATION COMMITTEE REPORT
COMPENSATION COMMITTEE REPORT
The following table presents, for each of our named executive officers, the number of shares acquired and the value realized upon the exercise of stock options and the vesting of RSU awards and PSU awards during
2021 Non-Qualified Deferred Compensation Table
In January 2021, we established the Deferred Compensation Plan for certain executives, which group includes each of our named executive officers that applied in 2021 from February 1, 2021 until December 31, 2021. We do not make matching contributions under the Deferred Compensation Plan. The following table shows the contributions and earnings during fiscal 2021, and account balance as of December 31, 2021, for participating named executive officers under the Deferred Compensation Plan.
Table of Contents
Aside from our 401(k) retirement savings plan, we do not maintain any pension plan or arrangement under which our named executive officers are entitled to participate or receive post-retirement benefits. Pay Ratio Disclosure As required by SEC rules, we are providing the following information to explain the relationship between the annual total compensation of Mr. Sridhar, who served as our CEO in 2021, and the annual total compensation of the median employee, excluding our CEO. As of December 1, 2021, we employed 1,699 people in seven countries, inclusive of officers, executives, full-time, part-time and hourly employees. We selected December 1, 2021 to identify the median employee. This date is within the final three months of our last completed fiscal year, and was also the date used for determining the foreign exchange rate to U.S. dollar for employees paid in other currencies. We excluded 52 employees based in five non-U.S. countries. These employees were excluded under the de minimis exemption, allowing us to exclude up to 5% of our total employees who are non-U.S. employees. We applied this de minimis exemption when identifying the median employee by excluding five countries: 12 employees in Japan, 26 employees in South Korea, seven employees in the United Arab Emirates, three employees in Taiwan and four employees in China. SEC rules allow us to select a methodology for identifying our median employee in a manner that is most appropriate based on our size, organizational structure and compensation plans, policies and procedures. For our consistently applied compensation measure, we collected cash compensation paid from January 1, 2021 to December 31, 2021 for all active employees as of December 1, 2021. This included annual base compensation, actual corporate bonus and commissions paid to employees in 2021. We annualized the compensation of all permanent full-time and part-time employees. We believe that this measure reasonably reflects the annual compensation of our employees. Cost of living adjustments were not made. For 2021, we identified the median employee to be a full-time employee in the United States paid in U.S. Dollars, whose total earnings were $82,853. Mr. Sridhar’s annual total compensation for 2021, as reported in the 2021 Summary Compensation Table, was $34,210,000 Based on this information, for 2021, the ratio of the compensation of the CEO to the median annual total compensation of all other employees was estimated to be 413 to 1. Using the same median employee and comparing to Mr. Sridhar’s total compensation for 2020, the ratio of the compensation of the CEO to the median annual total compensation of all other employees was estimated to be 83 to 1. This discrepancy year over year was in large part due to the one-time large “front-loaded” equity grants to our CEO in 2021. In upcoming years, we expect the pay ratio disclosure to be more in line with 2020 than 2021.
COMPENSATION COMMITTEE REPORT
Potential Payments on Termination or Change in Control Overview of Potential Payments
COMPENSATION COMMITTEE REPORT Calculation of Potential Payments The following table shows potential payments
In accordance with the requirements of Section 14A of the Exchange Act and the related rules of the SEC, our stockholders have the opportunity to vote to approve, on an advisory basis, the compensation of our named executive officers as disclosed in the Compensation Discussion and Analysis and the tabular disclosures of this Proxy Statement. This proposal, commonly known as a “say-on-pay” proposal, provides our stockholders with the opportunity to express their views on the compensation of our named executive officers. As described in the section entitled “Compensation Discussion and Analysis,” we believe that the skill, talent, judgment and dedication of our executive officers are critical factors affecting our long-term value. The goals of our executive compensation programs are to fairly compensate our executives, attract and retain highly-qualified executives able to contribute to our long-term success, encourage performance consistent with clearly defined corporate goals and align our executives’ long-term interests with those of our stockholders. The specific goals that our current executive compensation programs reward are focused on financial and operational objectives, including specific revenue, The Board is asking our stockholders to indicate their support for the compensation of our named executive officers as described in this Proxy Statement. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and the philosophy, policies, practices and objectives described in this Proxy Statement. Accordingly, the Board recommends that our stockholders vote “FOR” the following resolution at the “RESOLVED: That the stockholders approve, on an advisory basis, the compensation of the named executive officers, as disclosed in the Proxy Statement for the As an advisory vote, this say-on-pay proposal is not binding upon us, the Board or the Compensation Committee. However, we, the Board and the Compensation Committee, which are responsible for overseeing, reviewing and administering our executive compensation programs, value the opinions expressed by our stockholders, and will continue to consider our stockholders’ concerns in evaluating future compensation options for our named executive officers.
Stockholders. Vote Required Approval of Proposal Overview The Board adopted resolutions approving and submitting to a vote of the stockholders, an amendment to Article IV, Section 1.1 of the Restated Certificate that would increase the authorized number of shares of preferred stock from 10,000,000 to 20,000,000 and make a corresponding increase to the total number of shares of authorized capital stock from 1,210,000,000 to 1,220,000,000, which the Board is authorized to issue from time to time (the “Article IV Amendment”). No change is being proposed to the number of authorized shares of Class A common stock or Class B common stock. The complete text of Article IV, Section 1.1, as amended, would read as follows: 1.1. The total number of shares of all classes of stock that the Company has authority to issue is Purpose of the Article IV Amendment The Restated Certificate currently authorizes the Board to issue up to 10,000,000 shares of preferred stock. As of December 31, 2021, 10,000,000 shares of preferred stock were issued and outstanding, leaving no shares of preferred stock available for issuance in the future. As previously reported, in 2021, we expanded our successful power generation partnership with SK ecoplant to help us establish market leadership in the hydrogen economy, and as part of that deal, the Board designated all 10,000,000 shares of authorized preferred stock as Series A Redeemable Convertible Preferred Stock and issued those shares to SK ecoplant under a securities purchase agreement (the “Preferred Stock Transaction”). As a result, we currently do not have any authorized shares of preferred stock remaining available to use for future strategic partnerships, mergers and acquisitions, capital raising activities and other legitimate general corporate purposes. If approved, the Article IV Amendment would replenish the authorized but unissued shares of preferred stock to the level in effect prior to the Preferred Stock Transaction. Although we haves no current plans, agreements, arrangements or intentions to issue any preferred stock, the Board believes that authorizing additional shares is advisable and in the best interest of our stockholders and Bloom Energy. The ability to issue these additional shares of preferred stock in the future will provide us with additional financial and management flexibility in structuring capital raising transactions, acquisitions, financings, joint ventures and strategic partnerships, as well as other general corporate transactions. The Board would be able to issue these additional shares of preferred stock from time to time as appropriate and opportune situations arise. Effect of the Article IV Amendment The Article IV Amendment will not have any immediate effect on the rights of existing stockholders. However, the additional authorized shares of preferred stock will be undesignated, and the Restated Certificate generally will permit the Board to designate and issue preferred stock with such rights and preferences as it sees fit without requiring future stockholder approval, except as may be required by the Restated Certificate, as it may be amended or restated from time to time, and applicable rules and regulations. Any such future designation and issuance of the additional authorized shares could decrease our common stockholders’ and any then-existing preferred stockholders’ percentage of total capital stock ownership and, depending upon the price at which those preferred shares are issued, as compared to the price paid by other stockholders, could be dilutive.
PROPOSAL 3 APPROVAL OF AN AMENDMENT TO THE CERTIFICATE OF INCORPORATION TO INCREASE THE AUTHORIZED SHARES As noted above, we do not have any current plans, agreements, arrangements or intentions with respect to the issuance of the additional authorized shares of preferred stock. However, increasing the authorized shares of preferred stock could have an anti-takeover effect because the issuance of preferred stock could dilute certain rights of a person seeking to obtain control of us or to change our management, thereby making it more difficult to, or discouraging in the first place, any attempt to acquire control of Bloom Energy. We have not proposed the Article IV Amendment with the intention of using the additional preferred stock for anti-takeover purposes, and as of the date of this proxy statement, we are unaware of any pending or threatened efforts to acquire control of Bloom Energy. If the Article IV Amendment is approved, we intend to file a certificate of amendment to the Restated Certificate with the Secretary of State of the State of Delaware, and the Amendment will become effective at the time of that filing. Vote Required Approval of Proposal 3 requires the affirmative vote of a majority of the voting power of all of the outstanding shares of capital stock entitled to vote on the proposal. Abstentions and broker non-votes will have the same effect as a vote against the proposal.
Overview The Board adopted resolutions approving and submitting to a vote of the stockholders an amendment to Article XI (the “Article XI Amendment”) of the Restated Certificate to align the current choice of forum provision in the Restated Certificate with the parallel choice of forum provisions in Article XI of the Bylaws. The complete text of Article XI, as amended, would read as follows: 1. Forum.Unless the Company consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware (or, if the Court of Chancery does not have jurisdiction, the federal district court for the District of Delaware) shall, to the fullest extent permitted by law, Subject to the foregoing paragraph, unless the Company consents in writing to the selection of an alternative forum, the federal district courts of the United States of America shall, to the fullest extent permitted by law, be the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act of 1933, as amended. Any person or entity purchasing or otherwise acquiring or holding any interest in any security of the Corporation shall be deemed to have notice of and consented to the provisions of this paragraph. 2. Enforceability. If any provision of this Article XI shall be held to be invalid, illegal or unenforceable as applied to any person or entity or circumstance for any reason whatsoever, then, to the fullest extent permitted by law, the validity, legality and enforceability of such provision in any other circumstance and of the remaining provisions of this Article XI (including, without limitation, each portion of any sentence of this Article XI containing any such provision held to be invalid, illegal or unenforceable that is not itself held to be invalid, illegal or unenforceable) and the application of such provision to other persons or entities or circumstances shall not in any way be affected or impaired thereby. Effect of the Article XI Amendment Like the corresponding provisions in the Bylaws, Article XI of the Restated Certificate currently provides that the Delaware Court of Chancery shall serve as the sole and exclusive forum for certain legal actions (unless we consent otherwise in writing). The proposed revisions in the Article XI Amendment are intended to align Article XI of the Restated Certificate with the parallel provisions in Article XI of the Bylaws. Specifically, in addition to a number of non-substantive conforming changes, the Article XI Amendment clarifies that in the event the Delaware Court of Chancery does not have jurisdiction over an action or proceeding, the federal district court for the District of Delaware shall serve as the sole and exclusive forum for such action or proceeding. The Article XI Amendment also incorporates from the Bylaws a provision that designates the federal district courts of the United States of America as the sole and exclusive forum for any actions arising under the Securities Act of 1933, as amended (but, for the avoidance of doubt, would not apply to actions arising under the Securities Exchange Act of 1934, as amended). These changes would not impact the rights of our stockholders as each provision is already effective through the parallel choice of forum provisions in Article XI of the Bylaws. The Board believes it advisable and in the best interest of our stockholders and Bloom Energy to align the current choice of forum provision in the Restated Certificate with the parallel provisions in the Bylaws to avoid having different potentially applicable provisions.
PROPOSAL 4 APPROVAL OF AN AMENDMENT TO THE CERTIFICATE OF INCORPORATION TO ALIGN THE CHOICE OF FORUM PROVISIONS In addition to the changes described above to align with the Bylaws, the Article XI Amendment also includes a new, administrative provision providing that, in the event a court were to find any specific provision Article XI to be invalid, illegal or unenforceable, the validity, legality and enforceability of any remaining provisions of Article XI would not be affected or impaired. This change is intended to keep some of the safeguards of Article XI in place should any portion of Article XI be deemed invalid, illegal or unenforceable and would have no immediate effect on the rights of our stockholders. If the Article XI Amendment is approved, we intend to file a certificate of amendment to the Restated Certificate with the Secretary of State of the State of Delaware, and the Article XI Amendment will become effective at the time of that filing. Vote Required Approval of Proposal 4 requires the affirmative vote of at least two-thirds of the voting power of all of the outstanding shares of capital stock entitled to vote on the proposal. Abstentions and broker non-votes will have the same effect as a vote against the proposal.
Overview The Board has unanimously approved the adoption of the amendment and restatement of the ESPP to increase the number of shares authorized for issuance thereunder by 10,000,000 shares (from 10,202,023 shares to 20,202,023 shares). We adopted the ESPP for the benefit of eligible employees of Bloom and its designated affiliates in order to allow them to purchase shares of our Class A common stock at a discounted price. We believe that the ESPP is in the best interest of stockholders, as it: enhances broad-based employee stock ownership; enables Bloom to attract, motivate and retain the best employees with a market-competitive benefit; and does so at a reasonable cost to stockholders. We are proposing an increase in the number of shares authorized and reserved for issuance under the ESPP to enable us to continue providing this benefit to new and current employees. No other changes are being made to the ESPP. Importantly, approval of the amendment and restatement of the ESPP will not extend the term of the ESPP nor the “evergreen” provision contained therein. The adoption of the amendment and restatement of the ESPP by our Board is subject to the approval of our stockholders. Purpose. Our Board believes that Bloom’s interests are best advanced by aligning stockholder and employee interests. The ESPP is intended to provide Bloom’s and its subsidiaries’ eligible employees with an opportunity to participate in Bloom’s success by permitting them to acquire an ownership interest in Bloom through periodic payroll deductions that will be applied towards the purchase of shares of our Class A common stock at a discount from the market price. Dilution. As of March 15, 2022, there were 4,179,771 shares of Class A common stock available for future awards under the ESPP, not including the 10,000,000 shares for which we are seeking stockholder approval. The proposed additional 10,000,000 shares of Class A common stock represents potential dilution of approximately 5.7% as of December 31, 2021 (potential dilution for this purpose is determined by dividing the 10,000,000 additional shares by the total number of shares of our Class A and Class B common stock outstanding as of December 31, 2021). Burn rate. We also monitor how rapidly we are depleting our share reserve under the ESPP by tracking the number of shares actually purchased and issued under the ESPP on an annual basis. The number of shares purchased under the 2018 ESPP in each of fiscal 2019, 2020 and 2021 was 1,718,433, 1,937,825 and 1,945,305, respectively. Although the Compensation Committee and the Board considered the historical number of purchased shares, the actual number of shares that will be purchased under the 2018 ESPP in any year will depend on a number of factors, including, for example, the number of participants, each participant’s contribution rate and our stock price. Expected duration of share pool. Based upon the typical levels of participation in the ESPP over the last several years, we expect the additional 10,000,000 shares will be sufficient to cover purchases under the plan for at least the next six years. The following description of the ESPP is a summary of its principal provisions and is qualified in its entirety by reference to the plan document, a copy of which is appended to this proxy statement as Appendix B. To the extent that there is a conflict between this summary and the actual terms of the ESPP, the terms of the ESPP will govern. References to “common stock” below mean our Class A common stock, par value $0.0001 per share. Description of the ESPP Purpose. The purpose of the ESPP is to provide our eligible employees and designated affiliates with a means of acquiring an equity interest in Bloom Energy and to enhance such employees’ sense of participation in our affairs. The ESPP is intended to qualify as an employee stock purchase plan under Section 423 of the Code. However, sub-plans that do not meet the requirements of Section 423 of the Code may be established for the benefit of eligible employees of non-U.S. affiliates of Bloom. Effective Date, Term. The ESPP originally became effective on July 24, 2018. The amendment and restatement of the ESPP will become effective upon the approval of stockholders at the 2022 Annual Meeting. The ESPP will continue until the earliest to occur of (a) termination by the Board or the Compensation Committee (which termination may be effected at any time), (b) issuance of all of the common stock reserved for issuance, or (c) July 24, 2028.
PROPOSAL 5 APPROVAL OF AN AMENDMENT OF OUR 2018 ESPP TO INCREASE THE NUMBER OF SHARES AUTHORIZED FOR ISSUANCE Eligibility. Generally, our employees and designated affiliates are eligible to participate in the ESPP, provided that, unless prohibited by applicable law, the Compensation Committee may exclude one or more of the following categories of employees: (i) employees who do not meet eligibility requirements the Compensation Committee may choose to impose and (ii) individuals who provide services to Bloom or any of its designated affiliates as independent contractors who are reclassified as common law employees for any reason except for federal income and employment tax purposes. Further, an employee will not be eligible to participate if, before commencing participation or as a result of participating, that employee holds or would hold 5% or more of the total combined voting power or value of all classes of stock of Bloom or any affiliate. Further, no employee’s right to purchase common stock under the ESPP may accrue at a rate which exceeds the lesser of $25,000 per year of the fair market value of the common stock or 2,500 shares of common stock (or such lesser number of shares as approved by the Compensation Committee) on any one purchase date. As of March 1, 2022, the date the last offering period began, approximately 1,742 employees were eligible to participate in the ESPP. Administration, Amendment and Termination.The ESPP is administered by the Compensation Committee. The Compensation Committee has the full power and authority to promulgate any rules and regulations which it deems necessary or advisable for the proper administration of the ESPP, to interpret the provisions and supervise the administration of the ESPP, to make factual determinations relevant to ESPP entitlements and to take all action in connection with the administration of the ESPP as it deems necessary or advisable. Every finding, decision and determination made by the Compensation Committee is, to the full extent permitted by law, final and binding upon all parties. The Compensation Committee may amend, suspend or terminate the ESPP at any time; provided, however, that stockholder approval must be sought for any amendment which requires stockholder approval pursuant to section 423 of the Code or other applicable law. Number of Shares of Class A Common Stock Available under the ESPP. Subject to adjustment as provided below, if this proposal is approved by stockholders, 20,202,023 shares of Class A common stock will be approved for issuance pursuant to the ESPP. In addition, on January 1 of each calendar year until January 1, 2028, the number of shares of common stock reserved for issuance will automatically increase by the number of shares equal to 1% of the total outstanding shares of our common stock and common stock equivalents as of the immediately preceding December 31 (rounded to the nearest whole share), or such lesser number as approved by our Board or Compensation Committee. In no case, however, will more than 33,333,333 shares of Class A common stock be issued over the term of the ESPP. Shares issued under the ESPP may be from authorized but unissued common stock, shares held in treasury or any other proper source as determined by the administrator. If the number of outstanding shares is changed by a stock dividend, recapitalization, stock split, reverse stock split, subdivision, combination, reclassification or similar change in our capital structure, without consideration, then the Compensation Committee will adjust the number and class of common stock that may be delivered under the ESPP, the purchase price per share and the number of shares of common stock covered by each option under the ESPP which has not yet been exercised. Enrollment and Contributions.Eligible employees may elect to participate in the ESPP by providing a payroll deduction authorization instructing Bloom to withhold a specified percentage of the employee’s salary by a date specified by the Compensation Committee prior to an offering period. Unless the Compensation Committee determines otherwise, “Offering Periods” are 24 months and commence on each February 15 and August 15, and each Offering Period consists of four six-month purchase periods. Unless an eligible employee files a new form or withdraws from the ESPP, the employee’s deductions and purchases will continue at the same rate for future offerings under the ESPP for so long as the employee remains eligible to participate in the ESPP. An eligible employee may authorize a salary deduction of any whole percentage up to a maximum of 15% of the employee’s compensation (as defined in the ESPP). Subject to any limitations imposed by the administrator, eligible employees can increase, decrease or discontinue their deductions and corresponding participation in the ESPP for subsequent Offering Periods by submitting a new authorization form. If a participant elects to discontinue payroll deductions but does not elect to withdraw his or her funds from the ESPP, funds deducted prior to such election to discontinue participation will be used to purchase shares on the purchase date. Purchase of Shares.On the last business day of each purchase period, each participating employee’s payroll deductions are used to purchase shares for the employee at a 15% discount from the lesser of the (i) closing price of the common stock on the last business day of the purchase period or (ii) closing price of the common stock on the first day of the offering period. As of the Record Date, the fair market value of our common stock was $21.20 per share. Withdrawal; Termination of Participation. Shares will be purchased automatically on the last day of each purchase period for a participating employee who remains an eligible participant. Participation generally ends upon termination for any reason, and in such event, accumulated contributions will be returned without interest. During an Offering Period, an employee may withdraw from participation in the ESPP at any time in accordance with procedures established by the Compensation Committee. Upon a participant’s withdrawal from the ESPP, all accumulated payroll deductions for the participant made prior to termination are returned, without interest, and no shares are purchased for that employee’s account. Eligible employees who withdraw from an offering may participate in subsequent offerings in accordance with the terms and conditions established by the Compensation Committee. Corporate Transactions. In the event of certain corporate transactions, the Offering Period for each outstanding right to purchase common stock will be shortened by setting a new purchase date and will end on the new purchase date, which will be a date on or prior to the consummation of the corporate transaction, as determined by the Board or Compensation Committee, and the ESPP will terminate on the consummation of such transaction. Non-Transferability. Rights granted under the ESPP may not be transferred by a participant and may be exercised during a participant’s lifetime only by the participant.
PROPOSAL 5 APPROVAL OF AN AMENDMENT OF OUR 2018 ESPP TO INCREASE THE NUMBER OF SHARES AUTHORIZED FOR ISSUANCE Plan Benefits. Because participation in the ESPP is voluntary and we are unable to predict the future value of our common stock, we cannot currently determine the benefits or amounts that will be received in the future by any person or group under the ESPP. The following table sets forth the number of shares purchased under the ESPP from inception through 2021 by our named executive officers and the specified groups set forth below.
SEC Registration We intend to file with the U.S. Securities and Exchange Commission in the second half of 2022 a registration statement on Form S-8 covering the new shares reserved for issuance under the ESPP. Certain U.S. Federal Income Tax Consequences The rules concerning the federal income tax consequences with respect to the purchase of shares under the ESPP are quite technical. Moreover, the applicable statutory provisions are subject to change, as are their interpretations and applications, which may vary in individual circumstances. Therefore, the following is designed to provide a general understanding of the U.S. federal income tax consequences with respect to such purchases. In addition, the following discussion does not set forth any gift, estate, social security or state or local tax consequences that may be applicable and is limited to the U.S. federal income tax consequences to individuals who are citizens or residents of the United States, other than those individuals who are taxed on a residence basis in a foreign country. The ESPP, and the right of participants to make purchases thereunder, is intended to qualify under the provisions of Section 423 of the Code. Under these provisions, no income generally will be taxable to a participant until the shares purchased under the ESPP are sold or otherwise disposed of. Upon sale or other disposition of the shares, the participant will generally be subject to tax in an amount that depends upon how long the shares have been held by the participant. If the shares are sold or otherwise disposed of more than two years after the first day of the applicable offering period in which such shares were acquired and more than one year after the applicable date of purchase, the participant will recognize ordinary income equal to the lesser of (1) the excess of the fair market value of the shares at the time of such sale or disposition over the purchase price, or (2) an amount equal to 15% (or such lesser discount as the Committee may establish) of the fair market value of the shares as of the first day of the applicable offering period in which such shares were acquired. Any additional gain will be treated as long-term capital gain. If the shares are sold or otherwise disposed of before the expiration of the aforementioned periods (a “disqualifying disposition”), the participant will recognize ordinary income equal to the excess of (1) the fair market value of the shares on the date the shares are purchased over (2) the purchase price. Any additional gain or loss on such sale or disposition will be capital gain or loss, which will be long-term if the shares are held for more than one year. We generally are not entitled to a deduction for amounts taxed as ordinary income or capital gain to a participant except to the extent of ordinary income recognized by participants upon a disqualifying disposition. Vote Required Approval of Proposal 4 requires the affirmative vote of a majority of the votes cast for or against this proposal. Abstentions and broker non-votes are not deemed to be votes cast and, therefore, are not included in the tabulation of the voting results on this proposal and will not affect the outcome of the vote.
Engagement of Deloitte & Touche LLP The Audit Committee is directly responsible for the appointment, compensation, retention, and oversight of the independent accountants. The Audit Committee has appointed Deloitte as our independent registered public accounting firm to audit our consolidated financial statements for the year ending December 31, 2022. Deloitte has served as our independent registered public accounting firm since September 2020. Deloitte served as our independent accountants for 2021 and reported on our consolidated financial statements for that fiscal year. The Audit Committee annually reviews Deloitte’s independence and performance in determining whether to retain Deloitte or engage another independent registered public accounting firm as our independent accountants. As part of that annual review, the Audit Committee considers, among other things, the following:
Based on this evaluation, the Audit Committee believes that Deloitte is independent and well-qualified to serve as our independent registered public accounting firm. Further, the Audit Committee and the Board believe it is in the best interests of Bloom Energy and our stockholders to retain Deloitte as our independent registered public accounting firm for fiscal 2022. Representatives of Deloitte will be present during the 2022 Annual Meeting. They will have the opportunity to make a statement if they desire to do so and to respond to appropriate questions. Stockholders are not required to ratify the appointment of Deloitte as our independent registered public accounting firm. However, we are submitting the appointment for ratification as a matter of good corporate practice. If stockholders fail to ratify the appointment, the Audit Committee will consider whether or not to appoint Deloitte. Even if the appointment is ratified, the Audit Committee may direct the appointment of a different independent registered public accounting firm at any time during the year if it determines that such a change would be in our stockholders’ best interests. Change in Our Certifying Accountant in 2020 On September 3, 2020, the Audit Committee of the Board engaged Deloitte
AUDIT MATTERS
The audit reports of PwC on our consolidated financial statements as of and for the fiscal years ended December 31, 2019 and 2018 did not contain any adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope or accounting principles. During our fiscal years ended December 31, 2019 and 2018 and through September 3, 2020, (i) there were no disagreements with PwC on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedures, which disagreements, if not resolved to the satisfaction of PwC, would have caused PwC to make reference to the subject matter of the disagreement in its report on our consolidated financial statements for such periods, and (ii) there were no reportable events of the type described in Item 304(a)(1) (v) of Regulation S-K, except for the material weakness identified in our internal control over financial reporting related to not designing and maintaining an effective control environment with a sufficient complement of resources with an appropriate level of accounting knowledge, expertise and training to evaluate the accounting implications of complex or non-routine transactions commensurate with its financial reporting requirements, which was disclosed in Management’s Report on Internal Control over Financial Reporting in Item 9A of the Annual Report on Form 10-K for the fiscal year ended December 31, 2019 and in Item 4 of the Form 10-Q for the quarterly periods ended March 31, 2020 and June 30, 2020.
During the year ended December 31, 2020, our management, with the oversight of the Audit Committee, engaged in efforts to remediate the material weakness identified and previously disclosed. We completed these remediation measures in the fourth quarter ended December 31, 2020, including testing of the design and concluding on the effectiveness of all impacted controls.
During our fiscal years ended December 31, 2019 and 2018 and through September 3, 2020, other than the consultations discussed in the paragraph immediately below, neither we nor anyone acting on its behalf consulted with Deloitte regarding either: (i) the application of accounting principles to a specified transaction, either completed or proposed; or the type of audit opinion that might be rendered on our financial statements, and neither a written report nor oral advice was provided to us that Deloitte concluded was an important factor considered by us in reaching a decision as to the accounting, auditing or financial reporting issue; or (ii) any matter that was either the subject of a disagreement or a reportable event. In December 2019, we engaged Deloitte to provide advisory services regarding the accounting treatment for the Managed Services Agreements and similar arrangements. Deloitte provided oral advice and recommendations, including written comments on our memorandums, for management’s consideration on our policies and procedures, transaction documentation, restatement disclosures, and the proposed accounting treatment of planned transactions. In March 2020, we engaged Deloitte to provide advisory services regarding the adoption of the new lease accounting standards pertaining to the Managed Services Agreements. Deloitte provided oral advice and recommendations, including written comments on our memorandums, on our draft accounting policies and procedures related to the adoption of the new accounting standard.
Vote Required The affirmative vote of a majority of the votes cast for or against is required to approve the proposal. Brokers have the discretion to vote shares held in brokerage accounts on the ratification of the appointment of the independent registered public accounting firm, without specific voting instructions from the beneficial owner. Abstentions have no effect on the outcome of the proposal.
Principal Accountant Fees and Services The following table provides information regarding the fees paid to Deloitte
All services described above were pre-approved by the Audit Committee in accordance with the policies and procedures described below. In connection with the audit of our fiscal year The Audit Committee has determined that the rendering of services other than audit services by Deloitte in Pre-Approval Policies and Procedures The Audit Committee follows certain procedures for the pre-approval of audit and non-audit services rendered by our independent registered public accounting Report of the Audit Committee of the Board of Directors During 2021, only non-employee directors comprised the Audit Committee. The Board determined that each member of the Audit Committee is independent under the NYSE listing standards. The principal purpose of the Audit Committee is to assist the Board in its oversight responsibilities pertaining to our accounting practices, system of internal controls, audit processes and financial reporting processes. In accordance with applicable law, the Audit Committee has ultimate authority and responsibility for selecting, compensating, evaluating, and, when appropriate, replacing our independent audit firm. The Audit Committee is also responsible for overseeing the retention and performance of our internal auditor. The Audit Committee is responsible for Our management is responsible for establishing and maintaining adequate internal financial controls, the preparation and presentation of our consolidated financial statements and that they are complete and accurate and prepared in accordance with generally accepted accounting principles. Deloitte, our independent registered public accounting firm, is responsible for performing an independent audit of the consolidated financial statements and expressing an opinion on the conformity of those consolidated financial statements with generally accepted accounting principles and on management’s assessment of our internal control over financial reporting.
In fulfilling its oversight responsibilities, the Audit Committee has:
Based on these reviews and discussions, the Audit Committee has recommended to the Board that the audited consolidated financial statements be included in our Annual Report on Form 10-K for the year ended December 31, 2022. Submitted by the following members of the Audit Committee: Mary K. Bush (Chair) Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters We have determined beneficial ownership in accordance with the rules of the SEC. Except as indicated by the footnotes below, to our knowledge, based on the information furnished to us, the persons and entities named in the table below have sole voting and investment power with respect to all shares of Class A and Class B common stock that they beneficially own, subject to applicable community property laws. We have deemed shares of our Class A and Class B common stock subject to options, warrants, rights or conversion privileges that are currently exercisable or exercisable within 60 days of March We have based percentage ownership and voting power of our Common Stock on 15, 2022. The following table presents information regarding those stockholders known to us to beneficially own more than 5% of our outstanding shares of Class A or Class B common stock.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
Directors and Executive Officers
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
Our CEO entered into voting agreements with certain of our stockholders. These voting agreements
Delinquent Section 16(a) Reports Section 16(a) of the Exchange Act and SEC rules require our directors and executive officers and any persons who beneficially own more than 10% of our common stock (collectively “Reporting Persons”) to file reports of their ownership and changes in beneficial ownership of common stock with the SEC. As a matter of practice, we assist our executive officers and a majority of our non-employee directors in preparing their initial ownership reports and reporting ownership changes, and we typically file these reports on their behalf. Based solely upon a review of such filings with the SEC, and written representations that no Form 5 was required, we believe that all of our Reporting Persons complied with the reporting requirements of Section 16(a) of the Exchange Act during Griffiths and Ms. Soderberg.
Equity Compensation Plan Information
Stockholder Proposals and Nominations Rule 14a-8 Stockholder Proposals To be considered for inclusion in the proxy materials for the Stockholder Nominations and Other Proposals The Bylaws provide that, in order for a stockholder to propose other business, including nominations for directors, for consideration at the annual meeting (and not for inclusion in our proxy materials), such stockholder’s notice must be delivered to, or mailed and received by, our Corporate Secretary at the address described above no later than the close of business on the 90th day and no earlier than the close of business on the 120th day prior to the first anniversary of the last annual meeting of stockholders, with certain exceptions. Such notice must include the information, and otherwise satisfy the requirements set forth in, the Bylaws. For the Adjournment of the In the event there are not sufficient votes to approve any proposal contained in this Proxy Statement at the time of the Questions and Answers about These Proxy Materials, the Annual Meeting and Voting Why am I being provided these proxy materials? We are providing you these proxy materials in connection with the solicitation of proxies by the Board for use at the What is the Notice of Internet Availability of Proxy Materials? This year, we will again be using the “Notice and Access” method of providing proxy materials to stockholders via the internet. We believe that this process provides stockholders with a convenient and quick way to access the proxy materials and vote, while allowing us to conserve natural resources and reduce the costs of printing and distributing the proxy materials. On or about March 31, At the close of business on the Record Date, there were Who can vote at the Only stockholders holding Class A or Class B common stock at the close of business on the Record Date, which is March If your shares are held in street name and your voting instruction form or Notice indicates that you may vote those shares through the How can I participate in the This year’s annual meeting will be accessible through the internet. We have adopted a virtual format for the To participate in, submit questions and vote at the Whether or not you participate in the
This year’s question and answer session will include questions submitted in advance of, and questions submitted live during, the We encourage you to access the More information regarding the agenda and rules of conduct for the How many votes do I have? You have one vote for each share of Class A common stock and ten votes for each share of Class B common stock you owned as of the close of business on the Record Date. The holders of Class A common stock and Class B common stock will vote together on each matter presented at the How does our dual class structure affect me? Because of the ten-to-one voting ratio between our Class B and Class A common stock, the holders of our Class B common stock collectively control a majority of the combined voting power of our common stock. The Class B common stock is convertible into Class A common stock at any time at the option of the holder. In addition, the Class B common stock will automatically convert into Class A common stock immediately prior to the close of business on the fifth anniversary of our IPO (July 2023), and may automatically convert earlier than such date upon certain circumstances as described in What am I voting on? You are being asked to vote on the following:
How does the Board of Directors recommend I vote on these proposals? The Board recommends that you vote “FOR” the election of How do I vote my shares? Stockholder of Record: Shares Registered in Your Name If on the Record Date your shares were registered directly in your name with our transfer agent, American Stock Transfer & Trust, then you are considered the stockholder of record with respect to those shares. As a stockholder of record, you may vote during the
Before the To vote through the internet: Go to www.proxyvote.com to complete an electronic proxy card. You will be asked to provide the control number from your Notice. Your internet vote must be received by 11:59 p.m. Eastern Time on May To vote by telephone: Dial toll-free 1-800-690-6903 using a touch-tone phone and follow the recorded instructions. You will be asked to provide the control number from the To vote by mail: If you received your proxy materials via the U.S. mail, you may complete, sign and return the accompanying proxy card in the postage-paid envelope provided. If you return your signed proxy card to us and we receive it before the During the To vote through the internet at the Beneficial Owner: Shares Registered in the Name of Broker or Bank If on the Record Date your shares were held in an account with a brokerage firm, bank or other nominee, then you are the beneficial owner of the shares held in street name. As a beneficial owner, you have the right to direct your nominee how to vote the shares held in your account. However, the organization that holds your shares is considered the stockholder of record for purposes of voting at the How will my shares be voted if I return a blank proxy card? If you are a stockholder of record and return a signed and dated proxy card or otherwise submit a proxy without indicating voting selections, your shares will be voted, as applicable, “FOR” the election of each How will my shares be voted if I do not provide my broker or bank with voting instructions, and what is a “broker non-vote”? If you are a beneficial owner of shares held in street name and you do not instruct your broker, bank or other nominee how to vote your shares, your broker, bank or other nominee may still be able to vote your shares in its discretion on certain matters. Brokers, banks, and other securities intermediaries may use their discretion to vote your “uninstructed” shares with respect to matters considered to be “routine,” but not with respect to “non-routine” matters. In this regard, Proposals 1 through If you are a beneficial owner of shares held in street name, in order to ensure your shares are voted in the way you would prefer, you mustprovide voting instructions to your broker, bank or other nominee by the deadline provided in the materials you receive from your broker, bank or other nominee. How many votes are needed to approve the proposal? Proposal
Proposal
Proposal 3: The approval of an amendment to our restated certificate of incorporation to increase the authorized shares of preferred stock, as described in the Proxy Statement, requires the affirmative vote of a majority of the voting power of all of the outstanding shares of capital stock entitled to vote on the proposal. You may vote “FOR,” “AGAINST” or “ABSTAIN” on this proposal. Abstentions and broker non-votes will have the same effect as a vote against the proposal. The Board unanimously recommends that you vote your shares “FOR” Proposal 3. Proposal 4: The approval of an amendment to the choice of forum provisions in our restated certificate of incorporation to, among other things, align with the bylaws, as described in the Proxy Statement, requires the affirmative vote of at least two-thirds (2/3) of the voting power of all of the outstanding shares of capital stock entitled to vote on the proposal. You may vote “FOR,” “AGAINST” or “ABSTAIN” on this proposal. Abstentions and broker non-votes will have the same effect as a vote against the proposal. The Board unanimously recommends that you vote your shares “FOR” Proposal 4. Proposal 5: Proposal 6: The ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the year ending December 31, Who is making this solicitation? The Board is soliciting these proxies and the cost of such solicitation will be borne by Bloom, including the charges and expenses of persons holding shares in their name as nominee incurred in connection with forwarding proxy materials to the beneficial owners of such shares. In addition to the use of the mail, proxies may be solicited by our officers, directors and employees in person, by telephone or by email. Those individuals will not be additionally compensated for the solicitation but may be reimbursed for reasonable out-of-pocket expenses incurred in connection with the solicitation. What is the quorum requirement? A quorum of stockholders is necessary to hold a valid What does it mean if I receive more than one proxy card? If you receive more than one proxy card, your shares are registered in more than one name or are registered in different accounts. Please complete, sign and return each proxy card to ensure that all of your shares are voted. Can I change my vote or revoke my proxy? Stockholder of Record: Shares Registered in Your Name Yes. You can revoke your proxy at any time before the closing of the polls at the
Your most recently submitted proxy card or telephone or internet proxy is the one that is counted.
USER’S GUIDE
Beneficial Owner: Shares Registered in the Name of Broker or Bank If your shares are held by your broker, bank or other nominee, you may change your vote by submitting new voting instructions to your bank, broker or other nominee.
How can I find out the results of the voting at the We intend to announce preliminary voting results at the What is “householding” and how does it affect me? We have adopted a procedure approved by the SEC called “householding.” Under this procedure, we send only one proxy statement and one annual report to eligible stockholders who share a single address, unless we have received instructions to the contrary from any stockholder at that address. This practice is designed to reduce our printing and postage costs and benefits the environment. Stockholders who participate in householding will continue to receive separate proxy cards. We do not use householding for any other stockholder mailings. If you share an address with another stockholder and receive only one set of proxy materials but would like to request a separate copy of these materials now or in the future, please contact our mailing agent, Broadridge, by calling 1-800-540-7095 or by writing to Broadridge, Householding Department, 51 Mercedes Way, Edgewood, New York, 11717, and we will deliver these materials promptly. Broadridge is acting as our mailing agent and vote tabulator and is not soliciting proxies on our behalf. Similarly, you may also contact Broadridge using these methods if you receive multiple copies of the proxy materials and would prefer to receive a single copy in the future. If you own shares through a bank, broker or other nominee, you should contact the nominee concerning householding procedures. Are votes confidential? Who counts the votes? Proxy instructions, ballots and voting tabulations that identify individual stockholders are handled in a manner that protects your voting privacy. We will not disclose the proxy instructions or ballots of individual stockholders, except:
A representative from Broadridge will serve as the inspector of election. The Board does not intend to bring any other matters before the By Order of the Board of Directors Shawn M. Soderberg
2022 Appendix A – Unaudited Reconciliations Bloom Energy Corporation Unaudited Reconciliations from GAAP to Non-GAAP (In Thousands) Gross Profit and Gross Margin to Gross Profit Excluding Stock-Based Compensation and Gross Margin Excluding Stock-Based Compensation Gross profit and gross margin excluding stock-based compensation (“SBC”) are supplemental measures of operating performance that do not represent and should not be considered alternatives to gross profit or gross margin, as determined under GAAP. These measures remove the impact of stock-based compensation. We believe that gross profit and gross margin excluding stock-based compensation supplement the GAAP measures and enable us to more effectively evaluate our performance period-over-period. A reconciliation of gross profit and gross margin excluding stock-based compensation to gross profit and gross margin, the most directly comparable GAAP measures, and the computation of gross margin excluding stock-based compensation are as follows:
Operating Loss to Operating Income (Loss) Operating income (loss) excluding
Appendix B – Bloom Energy Corporation 2018 Employee Stock Purchase Plan
Subject to Section 14, a total of 20,202,023 shares of Common Stock is reserved for issuance under this Plan. In addition, on January 1 of each calendar year beginning on January 1, 2023 and ending with a final increase on January 1, 2028, the aggregate number of shares of Common Stock reserved for issuance under the Plan shall be increased automatically by the number of shares equal to one percent (1%) of the total number of outstanding shares of Common Stock, Class B common stock of the Company, and common stock equivalents (including options, restricted stock units, warrants and preferred stock on an as converted basis) outstanding on the immediately preceding December 31 (rounded down to the nearest whole share); provided, that the Board or the Committee may in its sole discretion reduce the amount of the increase in any particular year. Subject to Section 14, no more than 33,333,333 shares of Common Stock may be issued over the term of this Plan. The number of shares initially reserved for issuance under this Plan and the maximum number of shares that may be issued under this Plan shall be subject to adjustments effected in accordance with Section 14. Any or all such shares may be granted under the Section 423 Component.
APPENDIX B –
APPENDIX B – BLOOM ENERGY CORPORATION 2018 EMPLOYEE STOCK PURCHASE PLAN
APPENDIX B – BLOOM ENERGY CORPORATION 2018 EMPLOYEE STOCK PURCHASE PLAN
For purposes of this Subsection (a), the Fair Market Value of Common Stock shall be determined in each case as of the beginning of the Offering Period in which such Common Stock is purchased. Employee stock purchase plans not described in Section 423 of the Code shall be disregarded. If a Participant is precluded by this Subsection (a) from purchasing additional Common Stock under the Plan, then his or her Contributions shall automatically be discontinued and shall automatically resume at the beginning of the earliest Purchase Period that will end in the next calendar year (if he or she then is an eligible employee), provided that when the Company automatically resumes such Contributions, the Company must apply the rate in effect immediately prior to such suspension.
APPENDIX B – BLOOM ENERGY CORPORATION 2018 EMPLOYEE STOCK PURCHASE PLAN
APPENDIX B – BLOOM ENERGY CORPORATION 2018 EMPLOYEE STOCK PURCHASE PLAN
APPENDIX B – BLOOM ENERGY CORPORATION 2018 EMPLOYEE STOCK PURCHASE PLAN
APPENDIX B – BLOOM ENERGY CORPORATION 2018 EMPLOYEE STOCK PURCHASE PLAN
BLOOM ENERGY CORPORATION VOTE BY INTERNET Before The Meeting- Go to www.proxyvote.com or scan the QR Barcode above Use the Internet to transmit your voting instructions and for electronic delivery of information. Vote by 11:59 P.M. Eastern Time on May During The Meeting- Go to www.virtualshareholdermeeting.com/ You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions. Vote by 11:59 P.M. Eastern Time on May VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Annual Report and Notice and Proxy Statement are available at www.proxyvote.com.
The undersigned hereby appoints KR Sridhar and Shawn M. Soderberg, and each of them, as proxy holders with full power of substitution and authority to act in the absence of the other, each to vote with respect to shares of the Class A common stock and Class B common stock for which proxies will be solicited for use in connection with the This proxy, when properly executed, will be voted in the manner directed herein. If the proxy is executed, but no direction is made, this proxy will be voted in accordance with the Board of Continued and to be signed on reverse side |