Washington, D.C. 20549
ZUORA, INC.
We will hold the Annual Meeting for the following purposes, which are more fully described in the Proxy Statement for our Annual Meeting (Proxy Statement):
We will also consider any other business that properly comes before the Annual Meeting or any adjournment or postponement thereof. At this time, we are not aware of any other matters to be submitted for consideration at the Annual Meeting.
Thank you for your ongoing support and continued interest in Zuora.
Proxy Statement for 20202021 Annual Meeting of Stockholders
INFORMATION ABOUT SOLICITATION AND VOTING
The accompanying proxy statement is solicited on behalf of the Board of Directors of Zuora, Inc. for use at our 20202021 Annual Meeting of Stockholders (Annual Meeting), and any adjournment or postponement thereof, to be held virtually at http://www.viewproxy.com/Zuora/2020/vmwww.virtualshareholdermeeting.com/ZUO2021 on Tuesday, June 23, 202022, 2021 at 9:30 a.m. Pacific Time. Stockholders who plan to attend the Annual Meeting must pre-register for the meeting as described below. As part of our effort to maintain a safe and healthy environment for our directors, members of management and stockholders who wish to attend the Annual Meeting, in light of the current coronavirus (COVID-19) pandemic, we believe that hosting a virtual meeting this year is in the best interest of us and our stockholders.
The Notice of Internet Availability of Proxy Materials, this Proxy Statement for the Annual Meeting (Proxy Statement), and the accompanying form of proxy were first distributed and made available on the Internet to stockholders on or about May 12, 2020.11, 2021. The Notice of Internet Availability of Proxy Materials provides instructions on how to vote online or by telephone and includes instructions on how to receive a paper copy of the proxy materials by mail.
In this Proxy Statement, we refer to Zuora, Inc. as “Zuora,” “we” or “us.”
INTERNET AVAILABILITY OF PROXY MATERIALS
In accordance with rules of the U.S. Securities and Exchange Commission (SEC), we are using the Internet as our primary means of furnishing proxy materials to stockholders. Consequently, most stockholders will not receive paper copies of our proxy materials. We will instead send these stockholders a Notice of Internet Availability of Proxy Materials with instructions for accessing the proxy materials, including our Proxy Statement and Annual Report, and voting via the Internet. The Notice of Internet Availability of Proxy Materials also provides information on how stockholders may obtain paper copies of our proxy materials if they so choose. We believe this makes the proxy distribution process more efficient, less costly, and helps in conserving natural resources.
Our Proxy Statement and our Annual Report on Form 10-K for the fiscal year ended January 31, 20202021 can be accessed directly at http://www.viewproxy.com/Zuora/2020www.proxyvote.com
GENERAL INFORMATION ABOUT THE MEETING
Purpose of the Annual Meeting
You are receiving this Proxy Statement because our Board of Directors is soliciting your proxy to vote your shares at the Annual Meeting with respect to the proposals described in this Proxy Statement. This Proxy Statement includes information that we are required to provide to you pursuant to the rules and regulations of the SEC and is designed to assist you in voting your shares.
Registration Required to AttendAttending the Annual Meeting
In order to participate in the Annual Meeting that will be held virtually over the Internet, you must register at http://www.viewproxy.com/Zuora/2020 by 11:59 p.m. Pacific Time on Sunday, June 21, 2020. You will need to enter your name, phone number, mailing address as it appears on your Notice or proxy card, and email address. Beneficial owners who would like to vote at the Annual Meeting will also need to provide a legal proxy by either uploading it at the time of registration using the link on the registration site or emailing it to VirtualMeeting@viewproxy.com. For more information on stockholders of record and beneficial owners, see the “Voting Rights; Required Vote” section below.
If you have registeredare invited to attend the Annual Meeting you will receive an email prior to the Annual Meeting providing you with the password to attend the Annual Meeting. If you are a beneficial holder and you provided your legal proxy by uploading it to the registration site or by emailing it to VirtualMeeting@viewproxy.com, the email containing the password will also contain the virtual control number that you will use to vote your shares at www.AALVote.com/ZUO during the Annual Meeting.
Location of the Annual Meeting
The Annual Meeting will be held virtually at http://www.viewproxy.com/Zuora/2020/vmtaking place on Tuesday, June 23, 202022, 2021 at 9:30 a.m. Pacific Time. Only stockholders who have timely registered and obtained a password to enter the meetingThe Annual Meeting will be allowed to attend.
If you have properly registered, you may entera completely “virtual meeting” of stockholders and the Annual Meeting by logging into http://www.viewproxy.com/Zuora/2020/vm using the password you will receive in an email prior to the Annual Meeting. The Annual Meeting live audio webcast will begin promptly at 9:30 ama.m. Pacific TimeTime. You will be able to attend the Annual Meeting as well as vote and submit your questions during the live webcast of the Annual Meeting by visiting www.virtualshareholdermeeting.com/ZUO2021 and entering the 16-digit control number included in our Notice of Internet Availability of Proxy Materials, on Tuesday, June 23, 2020.your proxy card, or in the instructions that accompanied your proxy materials. We encourage you to access the meeting prior to the start time. Online check-in will begin at 9:0015 a.m. Pacific Time, and you should allow ample time for the check-in procedures.
Further instructions on how to attend the Annual Meeting via live audio webcast, including how to vote your shares electronically at the Annual Meeting, are posted on http://www.viewproxy.com/Zuora/2020 under Frequently Asked Questions (FAQ).
Stockholders will have the opportunity to submit written questions at the time they register for the Annual Meeting and at the meeting.
Record Date; Quorum
Only holders of record of our Class A common stock and Class B common stock at the close of business on April 29, 2020,28, 2021, the Record Date, will be entitled to vote at the Annual Meeting. At the close of business on the Record Date, we had 99,651,841111,254,560 shares of Class A common stock and 16,045,73310,939,972 shares of Class B common stock outstanding and entitled to vote.
In order to hold the Annual Meeting, there must be a quorum, which means that the holders of a majority of the voting power of the shares of our Class A common stock and Class B common stock (voting together as a single class) entitled to vote at the Annual Meeting as of the Record Date must be present at the Annual Meeting. Your shares are counted as present at the Annual Meeting if you are presentattend and vote in personyour shares at the Annual Meeting or if you have properly submitted a proxy.
For ten days prior to the Annual Meeting, a list of registered stockholders eligible to vote at the Annual Meeting will be available for examination by our stockholders for any purpose relevant to the meeting at our principal executive offices at 101 Redwood Shores Parkway, Redwood City, California 94065. If, dueThe list of registered stockholders will also be available to the COVID-19 pandemic, our principal executive offices are closedstockholders during the ten days prior to the Annual Meeting a stockholder may send a written request tothrough our Corporate Secretary at CorporateSecretary@Zuora.com, and we will arrange a way for the stockholder to inspect the list.virtual meeting platform.
Voting Rights; Required Vote
In deciding all matters at the Annual Meeting, each share of Class A common stock represents one vote and each share of Class B common stock represents ten votes. We do not have cumulative voting rights for the election of directors. You may vote all shares owned by you as of the Record Date, including (a) shares held directly in your name as the stockholder of record and (b) shares held for you as the beneficial owner in street name through a broker, bank, trustee, or other nominee.
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, Computershare Trust Company, N.A., then you are considered the stockholder of record with respect to those shares. As a stockholder of record, you may vote your shares at the Annual Meeting provided you have properly pre-registered for the meeting, or prior to the Annual Meeting through the Internet, by telephone, or, if you request or receive paper proxy materials, by filling out and returning the proxy card.
Beneficial Owner: Shares Registered in the Name of a Broker or Nominee. 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 on how to vote the shares held in your account, and your nominee has enclosed or provided voting instructions for you to use in directing it on how to vote your shares. However, the organization that holds your shares is considered the stockholder of record for purposes of voting at the Annual Meeting. BecauseAs a beneficial holder, you are not the stockholder of record youand therefore may not vote your shares at the Annual Meeting unless you request and obtain a legal proxy from the organization that holds your shares giving you the right to vote the shares at the Annual Meeting. You will then need to upload the proxy to http://www.viewproxy.com/Zuora/2020 or email the proxy to VirtualMeeting@viewproxy.com at the time you register to attend the Annual Meeting in order to receive the virtual control number which will allow you to vote your shares at the Annual Meeting.
TheEach Class IIIII director will be elected by a plurality of the number of votes cast, which means that the individualtwo individuals nominated for election to our Board of Directors at the Annual Meeting receiving the highest number "FOR"“FOR” votes will be elected. You may vote "FOR" the nominee or "WITHHOLD"“FOR ALL” nominees, “WITHHOLD ALL” authority to vote for any nominee, or “FOR ALL EXCEPT” the nominee.nominee you specify. Ratification of the appointment of KPMG LLP as our independent registered public accounting firm for the fiscal year ending January 31, 20212022 will be obtained if the number of votes cast “FOR” the proposal at the Annual Meeting exceeds the number of votes “AGAINST” the proposal. Approval, on a non-binding advisory basis, of the compensation of our Named Executive Officers will be obtained if the number of votes cast "FOR"“FOR” the proposal at the Annual Meeting exceeds the number of votes "AGAINST"“AGAINST” the proposal. The non-binding advisory vote on the frequency of future non-binding advisory votes on the compensation of our Named Executive Officers will provide stockholders with the opportunity to choose among four options with respect to this proposal. You may vote for holding the non-binding advisory vote to approve the compensation of our Named Executive Officers every "ONE YEAR," "TWO YEARS," "THREE YEARS," or vote for "ABSTAIN." The frequency receiving the greatest number of votes cast by stockholders will be deemed to be the preferred frequency option of our stockholders. Abstentions (shares present at the Annual Meeting and marked “abstain”) are counted for purposes of determining whether a quorum is present and have no effect on the outcome of the matters voted upon.
Broker non-votes occur when shares held by a broker for a beneficial owner are not voted because the broker did not receive voting instructions from the beneficial owner and lacked discretionary authority to vote the shares. A broker is entitled to vote shares held for a beneficial owner on “routine” matters without instructions from the beneficial owner of those shares. Absent instructions from the beneficial owner of such shares, a broker is not entitled to vote shares held for a beneficial owner on “non-routine” matters. At our Annual Meeting, only the ratification of KPMG LLP as our independent registered public accounting firm for the fiscal year ending January 31, 2021,2022, is considered a routine matter. The other proposals presented at the Annual Meeting are non-routine matters. Broker non-votes are counted for purposes of determining whether a quorum is present and have no effect on the outcome of the matters voted upon. Accordingly, we encourage you to provide voting instructions to your broker, whether or not you plan to attend the Annual Meeting.
Board of Directors' Voting Recommendations
Our Board of Directors recommends that you vote “FOR” the“FOR ALL” Class IIIII director nomineenominees named in this Proxy Statement (Proposal No. 1), “FOR” the ratification of the appointment of KPMG LLP as our independent registered public accounting firm for the fiscal year ending January 31, 20212022 (Proposal No. 2), "FOR"and “FOR” the approval, on a non-binding advisory basis, of the compensation of our Named Executive Officers, as disclosed in this Proxy Statement (Proposal No. 3), and to hold future non-binding advisory votes on the compensation of our Named Executive Officers every "ONE YEAR" (Proposal No. 4). None of our directors or executive officers has any substantial interest in any matter to be acted upon, other than Proposal No. 3 and elections to office with respect to the directordirectors so nominated.
Voting Instructions; Voting of Proxies
If you are a stockholder of record, you may:
•vote at the Annual Meeting—in order to do so, you will need to visit www.AALVote.com/ZUOwww.virtualshareholdermeeting.com/ZUO2021 while the polls are open (you will need the virtual control number included on your Notice or proxy card);
•vote through the Internet—in order to do so, please follow the instructions shown on your proxy card for submitting your proxy by Internet;
•vote by telephone—in order to do so, please use the telephone number on your proxy card; or
•vote by mail—if you request or receive a paper proxy card and voting instructions by mail, simply complete, sign and date the enclosed proxy card and promptly return it in the envelope provided or, if the envelope is missing, please mail your completed proxy card to Proxy Tabulation Dept.Vote Processing, c/o Alliance Advisors LLC, 200 Broadacres Drive, 3rd Floor, Bloomfield, NJ 07003.Broadridge, 51 Mercedes Way, Edgewood, NY 11717. Your completed, signed and dated proxy card must be received prior to the Annual Meeting.
Unless you plan to vote at the virtual Annual Meeting, your vote must be received by 11:59 p.m. Pacific Time on Monday, June 22, 2020,21, 2021, in order for it to be included in the ballots cast for the proposals presented in this Proxy Statement. Submitting your proxy through the Internet or, if you request or receive a paper proxy card, by mail will not affect your right to vote during the virtual Annual Meeting, should you properly register and decide to attend the Annual Meeting.
If you are a beneficial owner, i.e., not the stockholder of record, please refer to the voting instructions provided by your nominee on how to direct your nominee to vote your shares. IfBecause you wish toare not the stockholder of record, you may not vote your shares electronically at the Annual Meeting unless you will needrequest and obtain a valid proxy from the organization that holds your shares giving you the right to have provided a legal proxy atvote the time you registered for the meeting by either uploading it to http://www.viewproxy.com/Zuora/2020 or emailing it to VirtualMeeting@viewproxy.com. If you have properly submitted a legal proxy, you may voteshares at the Annual Meeting by visiting www.AALVote.com/ZUO while the polls are open (you will need the virtual control number assigned to you in your registration confirmation email).Meeting.
FourThree proposals will be presented at the Annual Meeting. For Proposal No. 1, you may vote “FOR" the nominee“FOR ALL” nominees to our boardBoard of directors or “WITHHOLD"Directors, “WITHHOLD ALL” authority to vote for any of the nominee.nominees or “FOR ALL EXCEPT” the nominee you specify. For Proposal No. 2, you may vote “FOR” or “AGAINST” or “ABSTAIN” from voting. For Proposal No. 3, you may vote "FOR"“FOR” or "AGAINST"“AGAINST” or "ABSTAIN" from voting. For Proposal No. 4, you may vote "ONE YEAR," "TWO YEARS," "THREE YEARS," or "ABSTAIN"“ABSTAIN” from voting. Your vote is important. Whether or not you plan to attend the Annual Meeting, we urge you to vote by proxy to ensure that your vote is counted.
If you indicate a choice on your proxy card on a particular proposal to be acted upon, the shares will be voted as you indicated. If you are a stockholder of record and you return a signed proxy card but do not indicate how you wish to vote, the proxy holders will vote your shares in the manner recommended by our Board of Directors on all matters presented in this Proxy Statement and as the proxy holders may determine in their discretion with respect to any other matters properly presented for a vote at the Annual Meeting. If you do not return the proxy card, your shares will not be voted and will not be deemed present for the purpose of determining whether a quorum exists.
If you receive more than one proxy card, your shares are registered in more than one name or are registered in different accounts.accounts, you will receive a proxy card for each such registered name or account. To make certain all of your shares are voted, please follow the instructions included on each proxy card and vote each proxy card through the Internet or by mail. If you requested or received paper proxy materials and you intend to vote by mail, please complete, sign and return each proxy card you received to ensure that all of your shares are voted.
Expenses of Soliciting Proxies
We will pay the expenses of soliciting proxies, including preparation, assembly, printing and mailing of this Proxy Statement, the proxy and any other information furnished to stockholders. Following the original mailing of the soliciting materials, we and our agents, including directors, officers, and other employees, without additional compensation, may solicit proxies by mail, email, telephone, facsimile, by other similar means or in person. In addition, we will request brokers, custodians, nominees and other record holders to forward copies of the soliciting materials to persons for whom they hold shares and to request authority for the exercise of proxies. In such cases, we, upon the request of the record holders, will reimburse such holders for their reasonable expenses. If you choose to access the proxy materials or vote through the Internet or by telephone, you are responsible for any Internet or phone access charges you may incur.
Revocability of Proxies
A stockholder of record who has given a proxy may revoke it at any time before it is exercised at the Annual Meeting by:
•delivering to our Corporate Secretary by mail a written notice stating that the proxy is revoked;
•signing and delivering a proxy bearing a later date;
•voting again through the Internet or telephone; or
•voting at the Annual Meeting while the polls are open by visiting www.AALVote.com/ZUOwww.virtualshareholdermeeting.com/ZUO2021 (note that attendance at the Annual Meeting will not, by itself, revoke a proxy).
Please note, however, that if your shares are held of record by a broker, bank or other nominee and you wish to revoke a proxy, you must contact that firm to revoke any prior voting instructions.
Voting Results
Voting results will be tabulated and certified by the inspector of elections appointed for the Annual Meeting. The preliminary voting results will be announced at the Annual Meeting. The final results will be tallied by the inspector of elections and will be published in a Current Report on Form 8-K, which we expect to file with the SEC within four business days of the Annual Meeting.
CORPORATE GOVERNANCE
We are strongly committed to good corporate governance practices. These practices provide an important framework within which our Board of Directors and management can pursue our strategic objectives for the benefit of our stockholders.
Corporate Governance Guidelines
Our Board of Directors has adopted Corporate Governance Guidelines that set forth expectations for directors, director independence standards, board committee structure and functions, and other policies for the governance of Zuora. Our Corporate Governance Guidelines are available without charge on our website at https://investor.zuora.com/governance/governance-documents. Our Nominating and Corporate Governance Committee (Governance Committee) reviews the Corporate Governance Guidelines periodically, and changes are recommended to our Board of Directors as warranted.
Global Code of Business Conduct and Ethics
We are committed to ethical business practices and, accordingly, we have adopted a Global Code of Business Conduct and Ethics (Code of Conduct) that applies to all the members of our Board of Directors, officers and employees. Our Code of Conduct is available on our website at https://investor.zuora.com/governance/governance-documents. We intend to disclose future amendments to certain portions of the Code of Conduct or waivers of such provisions granted to executive officers and directors on our website, as permitted under applicable New York Stock Exchange and SEC rules.
Board Leadership Structure
Our Board of Directors believes it is important to have flexibility in selecting our chairman and board leadership structure. Accordingly, our Corporate Governance Guidelines allow for the positions of chairman and chief executive officer to be held by the same person. The Board of Directors believes that it is currently in the best interest of Zuora and its stockholders for Tien Tzuo to serve in both roles. Mr. Tzuo co-founded and has led Zuora since November 2007. Our Board of Directors believes that Mr. Tzuo’s strategic vision for our business, his in-depth knowledge of our platform and operations and the software technology industry, and his experience as our Chief Executive Officer since 2007 make him well qualified to serve as both our Chairman and Chief Executive Officer.
Our Corporate Governance Guidelines provide that, when the positions of chairperson and chief executive officer are held by the same person, our Board of Directors will designate a “lead independent director” by a majority vote of the independent directors. Magdalena Yesil has served as our Lead Independent Director since March 2018. The responsibilities of our Lead Independent Director include: scheduling and setting the agenda for meetings of the Board in consultation with the Chairman, serving as chairperson of Board meetings when the Chairman is not present, presiding at executive sessions of independent directors, serving as a liaison between the Chairman and the independent directors, consulting with the Chairman regarding the information sent to our Board of Directors in connection with its meetings, having the authority to call meetings of our Board of Directors and meetings of the independent directors, being available under appropriate circumstances for consultation and direct communication with stockholders, encouraging dialogue between the independent directors and management, and performing such other functions and responsibilities as requested by our Board of Directors from time to time. Our Board of Directors believes the role of Lead Independent Director provides an appropriate balance in Zuora's leadership to the combined role of Chairman and Chief Executive Officer, and that the responsibilities assigned to the Lead Independent Director help ensure a strong, independent and active Board.
Independence of Directors
The listing rules of the New York Stock Exchange generally require that a majority of the members of a listed company’s board of directors be independent. In addition, the listing rules generally require that, subject to specified exceptions, each member of a listed company’s audit, compensation, and nominating and corporate governance committees be independent.
In addition, audit committee members must also satisfy the independence criteria set forth in Rule 10A-3 under the Securities Exchange Act of 1934, as amended (Exchange Act). In order to be considered independent for purposes of Rule 10A-3, a member of an audit committee of a listed company may not, other than in his or her capacity as a member of the audit committee, the board of directors, or any other board committee, accept, directly or indirectly, any consulting, advisory, or other compensatory fee from the listed company or any of its subsidiaries, or be an affiliated person of the listed company or any of its subsidiaries.
Our Board of Directors conducts an annual review of the independence of our directors. In its most recent review, our Board of Directors determined that Omar P. Abbosh, Sarah R. Bond, Peter Fenton, Kenneth A. Goldman, Timothy Haley, Jason Pressman, Michelangelo Volpi, and Magdalena Yesil, representing sixall of our seven current directors other than our CEO Tien Tzuo, are “independent directors” as defined under the applicable rules, regulations, and listing standards of the New York Stock Exchange and the applicable rules and regulations promulgated by the SEC. Our Board of Directors has also determined that all members of our Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee are independent and satisfy the relevant SEC and New York Stock Exchange independence requirements for such committees.
Michelangelo VolpiPeter Fenton has not been nominated for re-election at the Annual Meeting. Mr. VolpiFenton has served on our Board since November 2011,December 2007, and we are grateful for his long-standing dedication and contributions to our company.
Committees of Our Board of Directors
Our Board of Directors has established an Audit Committee, a Compensation Committee, and a Nominating and Corporate Governance Committee. The composition and responsibilities of each committee are described below. Each of these committees has a written charter approved by our Board of Directors. Copies of the charters for each committee are available on our website at https://investor.zuora.com/governance/governance-documents. Members serve on these committees until their resignations or until otherwise determined by our Board of Directors.
Audit Committee
Our Audit Committee is currently composed of Mr. Goldman (Chair), Mr. Fenton and Mr. Volpi. If Mr. Pressman is elected as a Class II director atPressman. Effective immediately following the Annual Meeting, heMs. Bond will replace Mr. VolpiFenton and begin serving as a member of the Audit Committee as of the time he is elected.Committee. Each member and prospective member of our Audit Committee is independent under New York Stock Exchange listing standards and SEC rules and regulations. Each member and prospective member of our Audit Committee is financially literate as required by New York Stock Exchange listing standards. Our Board of Directors has also determined that simultaneous service by Mr. Goldman on the Audit Committees of four other public companies does not impair his ability to serve on our Audit Committee. In addition, our Board of Directors has determined that Mr. Goldman is an “Audit Committee financial expert” as defined in SEC regulations. Our Audit Committee is responsible for, among other things:
•selecting a firm to serve as the independent registered public accounting firm to audit our consolidated financial statements;
•ensuring the independence of the independent registered public accounting firm;
•discussing the scope and results of the audit with the independent registered public accounting firm and reviewing, with management and that firm, our interim and year-end operating results;
•establishing procedures for employees to anonymously submit concerns about questionable accounting or audit matters;
•considering the adequacy of our internal controls and internal audit function;
•overseeing our internal audit function, including reviewing and approving our internal audit plan, responsibilities, budget and staffing;
•reviewing proposed waivers of our Code of Conduct for directors, executive officers, and employees (with waivers for directors or executive officers to be approved by the Board of Directors);
•reviewing material related party transactions or those that require disclosure; and
•approving or, as permitted, pre-approving all audit and non-audit services to be performed by our independent registered public accounting firm.
Compensation Committee
Our Compensation Committee is composed of Mr. Haley (Chair) and Mr. Pressman. The composition of our Compensation Committee meets the requirements for independence under New York Stock Exchange listing standards and SEC rules and regulations. Each member of the Compensation Committee is also a "non-employee director"“non-employee director” for purposes of Rule 16b-3 under the Exchange Act. Our Compensation Committee is responsible for, among other things:
•reviewing and approving the selection of our peer companies for compensation and assessment purposes;
•reviewing and approving the compensation of our executive officers, other than our chief executive officer whose compensation is approved by our Board of Directors;
•evaluating the performance of our chief executive officer in light of our goals and objectives;
•reviewing the results of stockholder votes on compensation matters;
•reviewing and recommending to our Board of Directors the compensation of our directors;
•administering our stock and equity incentive plans;
•reviewing and approving, or making recommendations to our Board of Directors with respect to, incentive compensation and equity plans;
•overseeing the annual risk assessment of our compensation programs as generally applicable to employees to identify any potential material risks that may be created by such programs; and
•reviewing our overall compensation philosophy.
Nominating and Corporate Governance Committee
Our Nominating and Corporate Governance Committee is composed of Ms. Yesil (Chair) and Mr. Haley. TheEffective immediately following the Annual Meeting, Mr. Abbosh will begin serving as a member of the Governance Committee.The composition of our Nominating and Corporate Governance Committee meets the requirements for independence under New York Stock Exchange listing standards and SEC rules and regulations. Our Nominating and Corporate Governance Committee is responsible for, among other things:
•identifying and recommending candidates for membership on our Board of Directors;
•recommending directors to serve on board committees;
•reviewing any stockholder proposals that relate to corporate governance matters;
•reviewing and recommending any changes as appropriate to our Corporate Governance Guidelines, Code of Conduct and policies;
reviewing and making recommendations regarding our policies and practices related to corporate social responsibility and environmental sustainability matters;
•reviewing succession plans for senior management positions, including the chief executive officer;
•evaluating, and overseeing the process of evaluating, the performance of our Board of Directors and individual directors;
•overseeing our programs relating to corporate responsibility and sustainability, including environmental, social, and corporate governance matters; and
•assisting our Board of Directors on corporate governance matters.
Our Board of Directors’ Role in Risk Oversight
Our Board of Directors, as a whole, has responsibility for risk oversight, although the committees of our Board of Directors oversee and review risk areas that are particularly relevant to them. The risk oversight responsibility of our Board of Directors and its committees is supported by our management reporting processes. Our management reporting processes are designed to provide our Board of Directors and our personnel responsible for risk assessment with visibility into the identification, assessment and management of critical risks and management’s risk mitigation strategies. These areas of focus include competitive, economic, operational, financial (accounting, credit, investment, liquidity and tax), legal, regulatory, cybersecurity, privacy, compliance and reputational risks, and more recently, riskrisks related to the current COVID-19 pandemic. Our Board of Directors reviews strategic and operational risk in the context of discussions, question and answer sessions, and reports from the management team at each regular Board meeting, receives reports on all significant committee activities at each regular Board meeting, and evaluates the risks inherent in significant transactions. Our Audit Committee assists our Board in fulfilling its oversight responsibilities with respect to risk management.
Each committee of our Board of Directors meets with key management personnel and representatives of outside advisors to oversee risks associated with their respective principal areas of focus. Our Audit Committee reviews our major financial risk exposures, our internal controls over financial reporting, our disclosure controls and procedures and legal and regulatory compliance, and, among other things, discusses with management and our independent auditor risk assessment and risk management matters. Our Audit Committee also reviews matters relating to cybersecurity and data privacy and security and reports to our Board of Directors regarding such matters. Our Compensation Committee evaluates our major compensation-related risk exposures and the steps management has taken to monitor or mitigate such exposures. Our Nominating and Corporate Governance Committee assesses risks relating to our corporate governance practices and the independence of our Board of Directors and reviews and discusses the narrative disclosure regarding our Board of Directors’ leadership structure and role in risk oversight. We believe this division of responsibilities is an effective approach for addressing the risks we face and that our Board leadership structure supports this approach.
Board and Committee Meetings and Attendance
Our Board of Directors and its committees meet regularly throughout the year, and also hold special meetings from time to time. During the fiscal year ended January 31, 20202021 (fiscal 2020)2021), our Board of Directors met fourfive times, the Audit Committee met teneight times, the Compensation Committee met four times, and the Nominating and Corporate Governance Committee met threefour times. During fiscal 2020,2021, each member of our Board of Directors attended at least 75% of the aggregate of all meetings of our Board of Directors and of all meetings of committees of our Board of Directors on which such member served that were held during the period in which such director served.
Executive Sessions
The non-employee directors meet in regularly scheduled executive sessions without management to promote open and honest discussion. Our Lead Independent Director, Ms. Yesil, is the presiding director at these meetings.
Compensation Committee Interlocks and Insider Participation
The members of our Compensation Committee during fiscal 2020 included2021 were Mr. Haley and Mr. Pressman. None of the members of our Compensation Committee in fiscal 20202021 were at any time during fiscal 20202021 or at any other time an officer or employee of Zuora or any of our subsidiaries. In addition, during fiscal 2020,2021, none of our executive officers served as a member of the board of directors, or as a member of the compensation or similar committee, of any entity that has one or more executive officers who served on our Board of Directors or Compensation Committee.
Board Attendance at Annual Stockholders’ Meeting
Our policy is to invite and encourage each member of our Board of Directors to be present at our annual meetings of stockholders. TwoFour members of our Board of Directors who were then serving on the Board of Directors attended the 20192020 annual meeting of stockholders.
Communication with Directors
Stockholders and interested parties who wish to communicate with our Board of Directors, non-management members of our Board as a group, a committee of our Board of Directors, or one or more individual members of our Board (including our Chairman or Lead Independent Director, if any) may do so by sending written communications addressed to: Corporate Secretary, Zuora, Inc., 101 Redwood Shores Parkway, Redwood City, California 94065. All stockholder communications we receive that are addressed to our Board of Directors will be reviewed and compiled by our Corporate Secretary and provided to the members of our Board of Directors, as appropriate. If the correspondence is not addressed to a particular director, such correspondence will be forwarded, depending on the subject matter, to the Chair of the Audit Committee, Compensation Committee, or Nominating and Corporate Governance Committee. Sales materials, abusive, threatening or otherwise inappropriate materials and items unrelated to the duties and responsibilities of our Board of Directors will not be provided to our directors.
Derivatives Trading, Hedging, and Pledging Policies
We have adopted a policy prohibitingOur Insider Trading Policy prohibits our employees, including our executive officers, and members of our Board of Directors from speculating in our equity securities, including the use of short sales, “sales against the box” or any equivalent transaction involving our equity securities. In addition, they may not engage in any other hedging transactions, such as “cashless” collars, forward sales, equity swaps and other similar or related arrangements, with respect to the securities that they hold. Finally, no employee, including an executive officer, or member of our Board of Directors, may acquire, sell, or trade in any interest or position relating to the future price of our equity securities.
WeOur Insider Trading Policy also have adopted a policy prohibitingprohibits the pledging of our common stock by our employees, including our executive officers, and members of our Board of Directors, unless it can be demonstrated that the pledgee has the financial capacity to repay the loan without resort to the pledged securities, subject to approval by our compliance officer.
Corporate Responsibility and Sustainability
We recognize the importance of a thoughtful approach to corporate citizenship and sustainability. Our Governance Committee is responsible for overseeing our programs relating to corporate responsibility and sustainability, including environmental, social, and corporate governance matters. As we continue to develop our strategies and practices in these areas, we are also committed to maintaininggrowing our programs to best meet the needs of the stakeholders we serve. Our current program includes:
•Employee Culture and improving our current programs, which include the following:
Community Involvement. Our culture is a critical component of our success. Our employees, whom we refer to as “ZEOs”, are the lifeblood of our company and we strive to create an environment where they feel empowered and inspired to contribute to our mission to power the Subscription Economy. Our culture focuses on fostering a collaborative, fun, high performance and inclusive environment where ZEOs can achieve individual and team objectives and key results. We drive social good throughprovide opportunities for our commitmentZEOs to corporate citizenshipgrow in both formal and informal learning environments, as well as create a strong emphasis on internal mobility growth opportunities.
We encourage our ZEOs to give back to the communities in which we operate.causes that matter to them. In 2015, we2017, Zuora became a member of the Pledge 1% movement, which encourages individuals and organizations to give back to their communities in a more formal way through pledges of product, equity, profit or time, and we are committed to donate employee volunteer hours as well as sharesleveraging our employees' time and talent to make the communities where we live and work stronger. To facilitate our Pledge 1% initiative, we have empowered our employees with the tools and resources they need to create local Z-Philanthropy chapters at our offices worldwide. Through our Z-Philanthropy chapters, ZEOs in our offices across the globe step up to lead giving and volunteering efforts throughout the year and create lasting partnerships with local nonprofits through these employee-led groups. In addition to the sustained efforts of our common stock to support underserved communities. local Z-Philanthropy chapters, we host an annual Global Week of Giving where ZEOs worldwide participate in volunteer and fundraising events.
In 2019, we also launched Zuora.org, which is a part of our company and not a separate legal entity, to facilitate our charitable efforts.entity. To date, our employees have donated thousands of volunteer hours and we have issued 47,303121,267 shares of our Class A common stock to the Zuora Impact Fund, a donor-advised fund managed by the Tides Foundation, and planwe expect to contribute additional shares in the future. This fund issues grants to organizations committed to providing workforce development and supporting inclusive economies.
During fiscal 2021, we made contributions to over 50 different funds or organizations under the Zuora Impact Fund, including to the Australian Red Cross Society, the United Nations Foundation, Rise Against Hunger, NAACP Legal Defense and Education Fund and Black Lives Matter Global Network Project. In addition to supporting our global ZEOs passions around volunteering, we support the work of our ZEOs in their communities through grantmaking and ZEOs can apply for grants up to $5,000 to support nonprofit organizations. Additionally, our Zuora Impact Fund Committee, composed of a group of ZEOs from across the world, helps Zuora in its donation determinations.•Diversity & Inclusion. Diversity and inclusion are key to our success in building our corporate vision, which we call "The World Subscribed" - that one day every company will be a part of the Subscription Economy.success. We seek and embrace employees who bring diverse backgrounds, perspectives, and experiences to our “ZEO”ZEO culture. Our commitment to developing a diverse and thriving workforce and inclusive ZEO culture begins at the top, with our Founder and CEO Tien Tzuo, and the entire executive team. As of the date of this Proxy Statement, our executive management team is composed of 40% women, and 40% who reflectself-identify as coming from certain underrepresented groups. In addition, our diverse society. We have designed our talent processes to be a level playing field for all,Board of Directors is made up of highly skilled individuals from recruitingthe technology and hiring to promotions and talent development conversations. A
cornerstonebusiness sectors. Women represent 25% of our ZEO culture is that our employees work best when they are each able to bring their true selves to work without judgment. We treat allBoard of Directors, and 37% of our employeesBoard of Directors identify as members of certain underrepresented groups.
In fiscal 2021, we created a standalone Diversity & Inclusion (D&I) department, led by our recently hired Chief Diversity Officer, Valerie Jackson, to help us increase our diversity by weaving inclusion into all aspects of how we work with respecteach other, build and dignitydeliver products and requireexperiences to customers, and contribute to our employees to conduct themselves similarly. We prohibit discrimination and harassment in any form. We have robustlocal communities. Our ZEO employee resource groups (ERGs) play a key role in this effort. Our ERGs are ZEO-founded and led groups and open to all ZEOs. Current D&I-focused ERGs, which are aimed at elevating the experiences and interests of key underrepresented groups in our officesworkforce, include Out at Zuora, supporting LGBTQ+ ZEOs and allies; Zuora Familia, supporting our Hispanic and Latinx ZEOs; Zuora Black Network, supporting our Black ZEOs around the worldworld; ZAAPI, supporting our Asian-American Pacific Islander ZEOs; and Z-Women, our largest ERG, supporting women ZEOs.
While our ERGs are a critical component of increasing belonging and inclusion among ZEOs, increasing education is equally critical for strengthening inclusive processes and behaviors in our workforce. At the end of fiscal 2020, we launched our first global unconscious bias training module and plan to build on that are employee-led and focus on activities that build communities, encourage professional mentorship, and support our employees’ shared identities and experiences.foundation in fiscal 2022.
•Environmental Sustainability. As a technology software company, we have a reasonably light environmental footprint. We have implemented severala variety of initiatives relating to the sustainable use of resources, including implementingusing technological tools and centralized printers to encourage lower paper consumption, encouraging our employees to recycle and compost, offering reusable dishware and utensils and providing filtered water dispensers to discourage consumption of bottled water in most of our breakrooms, and providing electric car charging stations for employee use at our corporate headquarters, and disposingheadquarters. We have also partnered with an e-waste vendor that has a mission of repurposing old computers and other electronic equipment with an electronic waste vendor so that such equipment is responsibly recycled, repurposed or donated.electronics and donating them to communities in need. Air travel was greatly reduced during fiscal 2021 due to the COVID-19 pandemic, and we continue to promote teleconferencing in lieu of travel whenever practicable. In addition, our employee-led resource group, ZEOs4Sustainability, helps drive employee-led environmental sustainability efforts.efforts such as teaching ZEOs how to recycle and compost at home, how to eat for a sustainable future, and how to grow their own food.
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Our Code of Conduct requires our employees and directors to avoid situations where their personal interests may, or may appear to, conflict with our interests. In addition, our directors, if appropriate, are required to recuse themselves from Board discussions when their participation could be perceived as creating such a conflict.
Our Audit Committee is responsible for reviewing and approving all related party transactions, except for transactions involving any member of the Audit Committee, which are reviewed by the Nominating and Corporate Governance Committee. Related parties include each of our directors and executive officers, certain of our stockholders and the immediate family members of any of the foregoing. We have adopted written policies and procedures regarding the identification of related parties and transactions, and the approval process for such transactions. The Audit Committee will consider each proposed transaction in light of the specific facts and circumstances presented, including but not limited to the risks, costs, and benefits to us and the availability from other sources of comparable products or services.
From the beginning of fiscal 20202021 through the date of this Proxy Statement, there have been no transactions, and there are currently no proposed transactions, involving an amount in excess of $120,000 in which Zuora has been (or will be) a participant and in which any executive officer, director, five percent beneficial owner of our common stock or member of the immediate family of any of the foregoing persons had (or will have) a direct or indirect material interest, except the compensation arrangements described in this Proxy Statement for our Named Executive Officers and directors.
Indemnification Agreements
We have entered into indemnification agreements with each of our directors and executive officers. The indemnification agreements and our restated bylaws require us to indemnify our directors to the fullest extent not prohibited by Delaware law. Subject to certain limitations, our restated bylaws also require us to advance expenses incurred by our directors and officers. For more information regarding these agreements, see the section titled “Executive Compensation–Limitations on Liability and Indemnification Matters.”
NOMINATION PROCESS AND DIRECTOR QUALIFICATIONS
Nomination to the Board of Directors
Candidates for nomination to our Board of Directors are selected by our Board of Directors based on the recommendation of the Nominating and Corporate Governance Committee in accordance with the Committee’s charter, our restated certificate of incorporation and restated bylaws, our Corporate Governance Guidelines and the criteria approved by our Board of Directors regarding director candidate qualifications. In recommending candidates for nomination, the Nominating and Corporate Governance Committee considerswill consider candidates recommended by directors, officers, employees, stockholders and others, using the same criteria to evaluate all candidates. Evaluations of candidates generally involve a review of background materials, internal discussions and interviews with selected candidates as appropriate. In addition, the Committee may engage consultants or third-party search firms to assist in identifying and evaluating potential nominees.
Additional information regarding the process for properly submitting stockholder nominations for candidates for membership on our Board of Directors is set forth below under “Stockholder Proposals to Be Presented at Next Annual Meeting.”
Director Qualifications
With the goal of developing a diverse, experienced and highly qualified Board of Directors, the Nominating and Corporate Governance Committee is responsible for developing and recommending to our Board of Directors the desired qualifications, expertise and characteristics of members of our Board of Directors, including any specific minimum qualifications that the Committee believes must be met by a committee-recommendedCommittee-recommended nominee for membership on our Board of Directors and any specific qualities or skills that the committeeCommittee believes are necessary for one or more of the members of our Board of Directors to possess.
Because the identification, evaluation and selection of qualified directors is a complex and subjective process that requires consideration of many intangible factors and will be significantly influenced by the particular needs of our Board of Directors from time to time, our Board of Directors has not adopted a specific set of minimum qualifications, qualities or skills that are necessary for a nominee to possess, other than those that are necessary to meet U.S. legal, regulatory and the New York Stock Exchange listing requirements and the provisions of our restated certificate of incorporation, restated bylaws, Corporate Governance Guidelines, and charters of the committees of our Board of Directors. Neither
As of the date of this Proxy Statement, we meet California state laws to have (i) at least one director who self-identifies as a member of an underrepresented community (as defined by such law) and (ii) based on the current size of our Board of Directors, norat least two female directors. In addition, based on our NominatingBoard size, we currently expect to meet additional California state law requirements to have three female directors by the end of calendar year 2021 and Corporate Governance Committee has a formal policy with regard totwo directors who self-identify as members of an underrepresented community by the considerationend of diversity in identifying nominees. calendar year 2022.
When considering nominees, the Nominating and Corporate Governance Committee may take into consideration many factors including, among other things, a candidate’s independence, integrity, diversity, skills, financial and other expertise, breadth of experience, knowledge about our business or industry, and ability to devote adequate time and effort to responsibilities of our Board of Directors in the context of its existing composition.composition as well as legal requirements, including the California state requirements regarding Board diversity discussed above. Through the nomination process, the Nominating and Corporate Governance Committee seeks to promote board membership that reflects a diversity of business experience, expertise, viewpoints, personal backgrounds and other characteristics that are expected to contribute to our Board of Directors’ overall effectiveness. The brief biographical description of each director set forth in Proposal No. 1 below includes a summary of the individual experience, qualifications, attributes and skills of each of our directors that led to the conclusion that each director should serve as a member of our Board of Directors at this time.
PROPOSAL NO. 1:
ELECTION OF DIRECTORSDIRECTORS
Our Board of Directors currently consists of seveneight directors and is divided into three classes. Each class serves for three years, with the terms of office of the respective classes expiring in successive years. Mr. Volpi,Goldman and Mr. Tzuo are the Class III directors standing for election at the Annual Meeting. Mr. Fenton, a current Class IIIII director, has not been nominated for re-election and Mr. Pressman is the only Class II director that will be standing for election at the Annual Meeting.re-election. Effective immediately prior to the election of directors at the Annual Meeting, the Class IIIII director vacancy on our Board of Directors will be eliminated and the exact number of authorized directors on the Board of Directors will be reduced to sixseven directors, composed of two authorized Class I directors, onethree authorized Class II directordirectors and threetwo authorized Class III directors. The terms of office of directors in Class IIII and Class III do not expire until the annual meetings of stockholders held in 20212022 and 2022,2023, respectively. At the recommendation of our Nominating and Corporate Governance Committee, our Board of Directors proposes that Mr. Pressman,Goldman and Mr. Tzuo, who isare currently serving as a directordirectors in Class II,III, each be elected as a Class IIIII director for a three-year term expiring at the 20232024 annual meeting of stockholders and until hissuch director's successor is duly elected and qualified or until hissuch director's earlier death, resignation, disqualification, or removal.
Shares represented by proxies will be voted “FOR” the nominee“FOR ALL” nominees named below, unless the proxy is marked to withhold authority to so vote. If Mr. Pressmanany nominee for any reason is unable to serve or for good cause will not serve, the proxies may be voted for such substitute nominee as the proxy holder might determine. Mr. PressmanEach nominee has consented to being named in this Proxy Statement and to serve if elected. Proxies may not be voted for more than one director.two directors. Stockholders may not cumulate votes for the election of directors.
NomineeNominees to Our Board of Directors
The table below includes information regarding Jason Pressman, our Class II director nominee to the Board of Directors, including his age, occupationnominees and lengththeir ages, occupations and lengths of service on our Board of Directors as of April 29, 2020. In addition, his biographical description is set forth below the table.
|
| | | | | | |
Name of Nominee | | Age | | Position | | Director Since |
Class II Nominee: | | | | | | |
Jason Pressman(1)
| | 46 | | Director | | September 2008 |
_____________________
| |
(1) | Member of the Compensation Committee. If elected, Mr. Pressman will also serve as a member of the Audit Committee effective immediately following the Annual Meeting. |
Jason Pressman has served as a member of our Board of Directors since September 2008. Mr. Pressman is a Managing Director at Shasta Ventures, a venture capital firm, where he has worked since 2005. Prior to Shasta Ventures, Mr. Pressman served as a Vice President of Strategy28, 2021, and Operations at Walmart.com, a subsidiary of Wal-Mart Stores, Inc., a worldwide retailer, from 2000 to 2004. Mr. Pressman currently serves on the boards of directors of a number of private companies. Mr. Pressman holds a B.S. in Finance from the University of Maryland, College Park and an M.B.A. from Stanford University. We believe Mr. Pressman is qualified to serve on our Board of Directors based on his operations and strategy experience gained from the retail industry and his corporate finance expertise gained in the venture capital industry serving on the boards of directors of various technology companies.
Continuing Directors
The directors who are serving for terms that end following the Annual Meeting and their ages, occupations and length of service on our Board of Directors as of April 29, 2020current (or prospective) committee membership are provided in the table below and in the additional biographical descriptions set forth in the text below the table.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | Committee Membership | | |
Name of DirectorNominee | | Age | | Position | | Audit | Comp | Governance | | Director Since |
Class I Directors:III Nominees: | | | | | | | | | | |
Timothy Haley(1)(2) Kenneth A. Goldman | | 6571 | | Director | | October 2010 |
Magdalena Yesil(1)* C | | 61 | | Director | | May 2017 |
Class III Directors: | | | | | | |
Peter Fenton(3)
| | 47 | | Director | | December 2007 |
Kenneth A. Goldman(3)
| | 70 | | Director | | February 2016 |
Tien Tzuo | | 5253 | | Chairman of the Board of Directors and Chief Executive Officer | | | | | | November 2007 |
_____________________
| |
* | Lead independent director |
| |
(1) | Member of the Nominating and Corporate Governance Committee |
| |
(2) | Member of the Compensation Committee |
| |
(3) | Member of the Audit Committee |
Peter Fenton has served as a member of our Board of Directors since December 2007. Since 2006, Mr. Fenton has served as a General Partner of Benchmark Capital Partners, a venture capital firm. From 1999 to 2006, Mr. Fenton served as a Managing Partner at Accel Partners, a venture capital firm. Mr. Fenton currently serves on the boards of directors of Cloudera, Inc., Elastic N.V., New Relic, Inc., and several private companies. Mr. Fenton previously served on the boards of directors of Twitter, Inc. from February 2009 to May 2017, Zendesk, Inc. from March 2015 to November 2017, Hortonworks, Inc. (now a wholly owned subsidiary of Cloudera, Inc.) from July 2011 to January 2019, and Yelp, Inc. from September 2006 to March 2019. Mr. Fenton holds a B.A. in Philosophy and an M.B.A. from Stanford University. We believe Mr. Fenton is qualified to serve on our Board of Directors based on his extensive experience in the venture capital industry, his knowledge of technology companies, and his service on the boards of directors of various public and private companies.C = Committee Chair
Kenneth A. Goldman has served as a member of our Board of Directors since February 2016. Mr. Goldman has served as the President of Hillspire LLC, a wealth management service provider, since September 2017. From October 2012 to June 2017, Mr. Goldman served as the Chief Financial Officer of Yahoo! Inc. Prior to this, Mr. Goldman was the Senior Vice President and Chief Financial Officer of Fortinet Inc., a provider of threat management technologies, from 2007 to 2012. From 2006 to 2007, Mr. Goldman served as Executive Vice President and Chief Financial Officer of Dexterra, Inc., a mobile enterprise software company. From 2000 until 2006, Mr. Goldman served as Senior Vice President of Finance and Administration and Chief Financial Officer of Siebel Systems, Inc. Mr. Goldman served on the Financial Accounting Standards Board's (FASB) primary Advisory Council from December 1999 to December 2003. From January 2015 to December 2017, Mr. Goldman served for a three-year term as a member of the Public Company Accounting Oversight Board's (PCAOB) Standing Advisory Group. In July 2008,2018, Mr. Goldman was appointed for a three-year term to the Sustainability Accounting Standards Board (SASB) Foundation, an independent nonprofit responsible for the funding and oversight of SASB. Mr. Goldman currently serves on the boards of directors of Fortinet, Inc., GoPro, Inc., NXP Semiconductor N.V., and RingCentral, Inc. Mr. Goldman previously served on the board of directors of TriNet Group, Inc., RingCentral, Inc. and several private companies.from August 2009 to August 2020. In addition, he is a Trustee Emeritus on the board of trustees of Cornell University. Mr. Goldman holds a B.S. in
Electrical Engineering from Cornell University and an M.B.A. from Harvard Business School. We believe Mr. Goldman is qualified to serve on our Board of Directors based on his experience serving on the boards of directors of numerous companies, his extensive executive experience, and his prior experience as a member of the FASB's Advisory Council and the PCAOB’s Standing Advisory Group. He provides our Board of Directors with a high level of expertise and significant leadership experience in the areas of finance, accounting, and audit oversight.
Tien Tzuo has served on our Board of Directors and as our Chief Executive Officer since November 2007 and as the Chairman of our Board of Directors since December 2017. Prior to joining us, Mr. Tzuo served as Chief Strategy Officer at salesforce.com, inc., a provider of customer relationship management software, from 2005 to 2008, and as Chief Marketing Officer from 2003 to 2005. Mr. Tzuo currently serves on the boards of directors of Vonage Holdings Corp. and Network for Good, Inc. He holds a B.S. in Electrical Engineering from Cornell University and an M.B.A. from Stanford University. We believe that Mr. Tzuo is qualified to serve on our Board of Directors based on the industry perspective and experience that he brings as our founder, Chairman of our Board of Directors, and Chief Executive Officer.
Continuing Directors
The directors who are serving for terms that end following the Annual Meeting and their ages, occupations and length of service on our Board of Directors as of April 29, 2021 are provided in the table below and in the additional biographical descriptions set forth in the text below the table.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | Committee Membership | | |
Name of Director | | Age | | Position | | Audit | Comp | Governance | | Director Since |
Class I Directors: | | | | | | | | | | |
Timothy Haley | | 65 | | Director | | | C | X | | October 2010 |
Magdalena Yesil(1) | | 61 | | Director | | | | C | | May 2017 |
Class II Directors: | | | | | | | | | | |
Omar P. Abbosh(2) | | 55 | | Director | | | | | | July 2020 |
Sarah R. Bond(3) | | 42 | | Director | | | | | | July 2020 |
Jason Pressman | | 47 | | Director | | X | X | | | September 2008 |
_____________________
C = Committee Chair
X = Committee Member
(1)Lead independent director
(2)Mr. Abbosh will be joining the Governance Committee effective immediately following the Annual Meeting.
(3)Ms. Bond will be joining the Audit Committee effective immediately following the Annual Meeting.
Omar P. Abbosh has served as a member of our Board of Directors since July 2020. Since June 2020, Mr. Abbosh has served as Corporate Vice President, Cross Industry Solutions at Microsoft Corporation, a multinational technology company. Previously, he served as Chief Executive Officer, Communications, Media & Technology, at Accenture plc, a professional services firm, from July 2018 to November 2019. From March 2015 to July 2018, Mr. Abbosh served as Accenture's Chief Strategy Officer and from September 2008 to March 2015, he served as Accenture's Managing Director, Resources UK & Ireland, and Senior Managing Director, Growth & Strategy, Resources. From 1989 to 2008, Mr. Abbosh held various other leadership roles at Accenture in strategy, corporate development and consulting. Mr. Abbosh holds a B.A. and an M.A. in Electronic and Software Engineering from the University of Cambridge and an M.B.A. from INSEAD in Fontainebleau, France. We believe Mr. Abbosh is qualified to serve on our Board of Directors based on his extensive business, corporate development and industry experience, including his expertise in strategic global alliances and partnerships.
Sarah R. Bond has served as a member of our Board of Directors since July 2020. Since June 2020, Ms. Bond has served as Corporate Vice President, Gaming Ecosystem at Microsoft Corporation, a multinational technology company. Since joining Microsoft in April 2017, she has held several senior roles, including Corporate Vice President, Gaming Partnerships & Business Development. From September 2015 to April 2017, she served as Senior Vice President, Strategy & Emerging Business at T-Mobile US, Inc., a wireless network operator, and held various other senior roles at T-Mobile since March 2011. From September 2006 to March 2011, Ms. Bond held various leadership roles with McKinsey & Company, focused on consumer digital businesses. She currently serves on the board of directors of Chegg, Inc. Ms. Bond holds a B.A. from Yale University and an M.B.A. from Harvard University. We believe Ms. Bond is qualified to serve on our Board of Directors based on her broad business, industry and technology experience, including her background with disruptive technologies in the traditional software, gaming and telecommunications industries.
Timothy Haley has served as a member of our Board of Directors since October 2010. Mr. Haley is a Managing Director at Redpoint Ventures, a venture capital firm, which he co-founded in 1999. Prior to co-founding Redpoint Ventures, Mr. Haley was a Managing Director of Institutional Venture Partners, a venture capital firm. From 1986 to 1998, Mr. Haley was the President of Haley Associates, an executive recruiting firm in the high technology industry. Mr. Haley currently serves on the boards of directors of Netflix, Inc., 2U, Inc., and several private companies. Mr. Haley is also on the Board of Trustees of Santa Clara University. Mr. Haley holds a B.A. in Philosophy from Santa Clara University. We believe Mr. Haley is qualified to serve on our Board of Directors based on his strategic and financial experience. He has evaluated, invested in, and served as a board member of numerous companies. His executive recruiting background also provides our Board of Directors with insight into talent selection and management.
Tien TzuoJason Pressman has served on our Board of Directors and as our Chief Executive Officer since November 2007 and as the Chairmana member of our Board of Directors since December 2017.September 2008. Mr. Pressman is a Managing Director at Shasta Ventures, a venture capital firm, where he has worked since 2005. Prior to joining us,Shasta Ventures, Mr. TzuoPressman served as Chiefa Vice President of Strategy Officerand Operations at salesforce.com, inc.Walmart.com, a subsidiary of Wal-Mart Stores, Inc., a provider of customer relationship management software,worldwide retailer, from 20052000 to 2008, and as Chief Marketing Officer from 2003 to 2005.2004. Mr. TzuoPressman currently serves ason the boards of directors of a board membernumber of Network for Good, Inc., and the Network for Good Donor Advised Fund. Heprivate companies. Mr. Pressman holds a B.S. in Electrical EngineeringFinance from Cornellthe University of Maryland, College Park and an M.B.A. from Stanford University. We believe that Mr. TzuoPressman is qualified to serve on our Board of Directors based on his operations and strategy experience gained from the retail industry perspective and experience that he brings as our founder, Chairmanhis corporate finance expertise gained in the venture capital industry serving on the boards of our Boarddirectors of Directors, and Chief Executive Officer.various technology companies.
Magdalena Yesil has served as a member of our Board of Directors since May 2017. She is the Executive Chair of Informed, Inc., an artificial intelligence software company serving the financial services industry, since April 2016. In 2010, Ms. Yesil co-founded Broadway Angels, an angel investment group. Ms. Yesil was also an early investor in salesforce.com, inc., and was a founding member of that company’s board of directors, where she served for more than five years. She was a General Partner at U.S. Venture Partners, a venture capital firm, from 1998 to 2006. Ms. Yesil founded MarketPay Associates, L.L.C., a software company, and served as its Chief Executive Officer and President from 1996 to 1997. She also co-founded and served as Vice President of Marketing and Technology of CYCH, Inc. (f/k/a CyberCash, Inc.), a secure electronic payment company. Ms. Yesil currently serves on the boards of directors of Smartsheet Inc., SoFi Social Finance Inc., and severalcertain other private companies.and non-profit entities. Ms. Yesil also served on the board of directors of RPX Corporation from March 2017 to June 2018. Ms. Yesil holds a B.S. in Industrial Engineering and Management Science and an M.S. in Electrical Engineering from Stanford University. We believe Ms. Yesil is qualified to serve on our Board of Directors based on her extensive experience as an investor in the technology industry and a founder of multiple technology companies, as well as her public and private company board experience.
There are no family relationships among our directors and executive officers.
Non-Employee Director Compensation Arrangements
Our Compensation Committee, after considering the information, analysis and recommendation provided by our independent compensation consultant, Compensia, Inc. (Compensia), including data regarding compensation paid to non-employee directors by companies in our compensation peer group (as described in “Compensation Discussion and Analysis - Peer Group Companies for Competitive Positioning”), evaluates the appropriate level and form of compensation for non-employee members of our Board of Directors and recommends changes to our Board of Directors when appropriate.
The compensation of our non-employee directors for fiscal 20202021 is described below. Messrs. Fenton, Haley and Pressman and Volpihave waived all cashcompensation for service as a director while the venture capital funds with which they are affiliated are Zuora stockholders, and equityaccordingly they did not receive any compensation payable to them for their service on our Board of Directors during fiscal 2020.2021. We do not pay management directors for service on our Board of Directors.
Non-Employee Director Cash Compensation
Each non-employee director was entitled to receive an annual cash retainer for service on our Board of Directors and each Committee during fiscal 20202021 as follows:
|
| | | | | | | | | | |
Director Position | | FY20FY21 Annual Cash Retainer ($) |
Board of Directors: | | |
| Lead Independent Director(1) | | 15,000 |
|
| Member | | 30,000 |
|
Committee Chairperson: | | |
| Audit Committee | | 20,000 |
|
| Compensation Committee | | 10,500 |
|
| Nominating and Corporate Governance Committee | | 7,500 |
|
Committee Member: | | |
| Audit Committee | | 7,500 |
|
| Compensation Committee | | 5,000 |
|
| Nominating and Corporate Governance Committee | | 3,500 |
|
_____________________
| |
(1) | The Lead Independent Director retainer is in addition to the retainer for service as a member of the Board of Directors. |
(1) The Lead Independent Director retainer is in addition to the retainer for service as a member of the Board of Directors.
A non-employee director may annually elect to receive RSUs in lieu of cash compensation by making an irrevocable election on or prior to January 31 of each calendar year. The number of shares receivable upon such election is calculated by dividing the total amount of cash compensation payable to such director for such fiscal year by the closing price of our Class A common stock on February 1 of such fiscal year. These RSUs fully vest on January 31 following the year of grant, so long as the non-employee director continues to serve on our Board of Directors through such date, or, if earlier, upon the consummation of a corporate transaction (as defined in our 2018 Equity Incentive Plan (2018 Plan)).
Non-Employee Director Equity Compensation
In addition to the cash compensation described above, each non-employee director was entitled to receive RSUs under our 2018 Plan during fiscal 2020,2021, as follows:
Initial Appointment RSU Grant. Each new non-employee director appointed to our Board of Directors would have beenwas granted RSUs (Initial Appointment RSUs) on the date of his or her appointment with an aggregate value of $275,000 based on the closing price of our Class A common stock on the date of grant. The aggregate value of the Initial Appointment RSUs may be increased by our Chief Executive Officer in his sole discretion, provided that
such value, when combined with other equity or cash compensation received by such new non-employee director, may not exceed $900,000 in the calendar year of initial appointment. Initial Appointment RSU awards vest with respect to one-third of the total number of RSUs subject to such award each year beginning on the anniversary of the date of grant, so long as the non-employee director continues to provide services to us through each such vesting date. In addition, Initial Appointment RSUs fully vest upon the consummation of a corporate transaction (as defined in our 2018 Plan).
Annual RSU Grant. Each non-employee director who served on the Board of Directors for at least six months prior to the date of each annual meeting of stockholders, and who continued to serve on our Board of Directors following such annual meeting, was automatically granted RSUs (Annual RSUs) on the date of such annual meeting having an aggregate value of $150,000 based on the closing price of our Class A common stock on the date of grant. The Annual RSUs fully vest on the earlier of (i) the date of the following year’s annual meeting of stockholders and (ii) the anniversary of the date of grant, provided the non-employee director continues to provide services to us through such vesting date. In addition, the Annual RSUs fully vest upon the consummation of a corporate transaction (as defined in our 2018 Plan).
Each non-employee director serving on our Board of Directors on June 18, 2019,23, 2020, the date of our 20192020 annual meeting, and who did not waive his or her right to compensation, was granted RSUs (2019(2020 RSUs) having an aggregate value of $150,000 based on the closing price of our Class A common stock on the date of grant. The 20192020 RSUs will fully vest on June 18, 2020.22, 2021.
Pursuant to the terms of our 2018 Plan, none of the equity awards described above may exceed $650,000 in a calendar year (or $900,000 in the calendar year of a non-employee director’s initial service on our Board of Directors), when combined with the cash compensation received by such non-employee director for service on our Board of Directors.
Fiscal 20202021 Director Compensation
The following table provides information for fiscal 20202021 regarding all compensation awarded to, earned by or paid to each person who served as a director for some portion or all of fiscal 2020,2021, other than Mr. Tzuo, the Chairman of our Board of Directors and Chief Executive Officer. Mr. Tzuo is not included in the table below, as he is an employee and receives no compensation for his service as director. The compensation received by Mr. Tzuo as an employee is set forth in the "Executive Compensation"“Executive Compensation” section below.
| | Name | | Fees Earned or Paid in Cash ($)(1) | | Stock Awards ($)(1)(2) | | Total ($) | Name | | Fees Earned or Paid in Cash ($)(1) | | Stock Awards ($)(1)(2) | | Total ($) |
Omar P. Abbosh(3) | | Omar P. Abbosh(3) | | 15,897 | | | 274,994 | | | 290,891 | |
Sarah R. Bond(4) | | Sarah R. Bond(4) | | 15,897 | | | 274,994 | | | 290,891 | |
Peter Fenton | | — |
| | — |
| | — |
| Peter Fenton | | — | | | — | | | — | |
Kenneth A. Goldman(3) | | 50,000 |
| | 149,991 |
| | 199,991 |
| |
Kenneth A. Goldman(5) | | Kenneth A. Goldman(5) | | 50,000 | | | 149,991 | | | 199,991 | |
Timothy Haley | | — |
| | — |
| | — |
| Timothy Haley | | — | | | — | | | — | |
Jason Pressman | | — |
| | — |
| | — |
| Jason Pressman | | — | | | — | | | — | |
Michelangelo Volpi | | — |
| | — |
| | — |
| |
Magdalena Yesil(4) | | 52,500 |
| | 149,991 |
| | 202,491 |
| |
Michelangelo Volpi(6) | | Michelangelo Volpi(6) | | — | | | — | | | — | |
Magdalena Yesil(7) | | Magdalena Yesil(7) | | 52,500 | | | 149,991 | | | 202,491 | |
_____________________
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(1) | Messrs. Fenton, Haley, Pressman and Volpi waived all cash and equity compensation payable to them for their service on our Board of Directors during fiscal 2020. |
| |
(2) | The amounts reported in this column represent the aggregate grant date fair value of RSU awards for Class A common stock made to directors in fiscal 2020, as computed in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 718 (ASC 718). These amounts reflect the accounting cost for these RSUs and do not represent the actual economic value that may be realized by the director. For information on the assumptions used to calculate the grant date fair value of the RSU awards, refer to Note 17 to our consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended January 31, 2020. |
| |
(3) | As of January 31, 2020, Mr. Goldman held RSUs for 9,578 shares of our Class A common stock and options to purchase 75,000 shares of Class B common stock. The RSUs will fully vest on June 18, 2020. The stock option, which was granted before our initial public offering (IPO), vests over a four-year period at the rate of 1/16th of the shares underlying the option vesting quarterly following the February 1, 2016 vesting commencement date and expires up to ten years after the date of grant. The stock option is early exercisable and, in the event of a change in control, all of the unvested shares subject to the stock option will become immediately vested and exercisable as of the date immediately prior to the change in control. As of January 31, 2020, 15,625 shares of Class B common stock underlying the stock option were unvested. For Mr. Goldman's other holdings, please see footnote 9 to the table under "Security Ownership of Certain Beneficial Owners and Management" below. |
(1)Messrs. Fenton, Haley, Pressman and Volpi waived all cash and equity compensation payable to them for their service on our Board of Directors during fiscal 2021.
(2) The amounts reported in this column represent the aggregate grant date fair value of RSU awards for Class A common stock made to directors in fiscal 2021, as computed in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 718, Compensation – Stock Compensation (ASC 718). These amounts reflect the accounting cost for these RSUs and do not represent the actual economic value that may be realized by the director. For information on the assumptions used to calculate the grant date fair value of the RSU awards, refer to Note 16 to our consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended January 31, 2021.
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(4) | As of January 31, 2020, Ms. Yesil held RSUs for 9,578 shares of our Class A common stock and options to purchase 101,561 shares of Class B common stock. The RSUs will fully vest on June 18, 2020. The stock option, which was granted prior to our IPO to purchase up to 125,000 shares of our Class B common stock, vests over a four-year period at the rate of 1/16th of the shares underlying the stock option quarterly following the May 23, 2017 vesting commencement date and expires up to ten years after the date of grant. The stock option is early exercisable and also provides that, in the event of a change in control, all of the unvested shares subject to the stock option will become immediately vested and exercisable as of the date immediately prior to the change in control. As of January 31, 2020, 46,872 shares of Class B common stock underlying the stock options were unvested. |
(3)As of January 31, 2021, Mr. Abbosh held RSUs for 23,070 shares of our Class A common stock. The RSUs will vest as to 1/3 of the total number of shares underlying the award on each of July 21, 2021, July 21, 2022, and July 21, 2023.
(4) As of January 31, 2021, Ms. Bond held RSUs for 23,070 shares of our Class A common stock. The RSUs will vest as to 1/3 of the total number of shares underlying the award on each of July 21, 2021, July 21, 2022, and July 21, 2023.
(5)As of January 31, 2021, Mr. Goldman held RSUs for 11,244 shares of our Class A common stock and options to purchase 75,000 shares of Class B common stock. The RSUs will fully vest on June 22, 2021. The stock option, which was granted before our initial public offering (IPO) to purchase up to 150,000 shares of our Class B common stock, vests over a four-year period at the rate of 1/16th of the shares underlying the option quarterly following the February 1, 2016 vesting commencement date and expires up to ten years after the date of grant. The stock option is early exercisable and, in the event of a change in control, all of the unvested shares subject to the stock option will become immediately vested and exercisable as of the date immediately prior to the change in control. As of January 31, 2021, the stock option was fully vested. For Mr. Goldman's other holdings, please see footnote 9 to the table under “Security Ownership of Certain Beneficial Owners and Management” below.
(6) Mr. Volpi served on our Board of Directors during fiscal 2021 until immediately prior to the election of directors at our 2020 annual meeting of stockholders held on June 23, 2020.
(7) As of January 31, 2021, Ms. Yesil held RSUs for 9,578 shares of our Class A common stock and options to purchase 101,561 shares of Class B common stock. The RSUs will fully vest on June 18, 2020. The stock option, which was granted prior to our IPO to purchase up to 125,000 shares of our Class B common stock, vests over a four-year period at the rate of 1/16th of the shares underlying the stock option quarterly following the May 23, 2017 vesting commencement date and expires up to ten years after the date of grant. The stock option is early exercisable and also provides that, in the event of a change in control, all of the unvested shares subject to the stock option will become immediately vested and exercisable as of the date immediately prior to the change in control. As of January 31, 2021, 15,624 shares of Class B common stock underlying the stock options were unvested.
Fiscal 2022 Director Compensation Changes
For fiscal 2022, Compensia conducted an independent review and benchmarking of our non-employee director compensation program on behalf of our Compensation Committee. Based on such benchmarking, our Compensation Committee recommended modifications to the compensation for our non-employee directors to generally align with the median of the competitive market. Our Board of Directors approved the following modifications to be effective beginning February 1, 2021:
The initial appointment RSU grant for non-employee directors was increased from a fair value of $275,000 to $400,000 and the annual RSU grant for non-employee directors was increased from a fair value of $150,000 to $175,000. The cash retainer fees were increased as described below:
•Lead Independent Director - increased from $15,000 to $16,000
•Compensation Committee chair - increased from $10,500 to $12,800
•Governance Committee chair - increased from $7,500 to $7,900
•Audit Committee member - increased from $7,500 to $9,300
•Governance Committee member - increased from $3,500 to $4,000
There were no other significant changes to the terms of the compensation for non-employee directors, including no changes to vesting, proration and deferral.
Our Board of Directors recommends that you vote “FOR"“FOR ALL” nominees
in the election of the nominee for Class II directorIII directors
PROPOSAL NO. 2:
RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC
PUBLIC ACCOUNTING FIRM
Our Audit Committee has selected KPMG LLP as our independent registered public accounting firm to perform the audit of our consolidated financial statements for our fiscal year ending January 31, 20212022 (fiscal 2021)2022). KPMG LLP has audited our financial statements since 2011.
Our Audit Committee recommends that stockholders vote for ratification of its selection of KPMG LLP as our independent registered public accounting firm for the fiscal year ending January 31, 2021,2022, which ratification requires the affirmative vote of a majority of the voting power of the shares present at the virtual Annual Meeting or represented by proxy at the Annual Meeting and voting "FOR"“FOR” or "AGAINST"“AGAINST” the matter. In the event that KPMG LLP is not ratified by our stockholders, the Audit Committee will review its future selection of KPMG LLP as our independent registered public accounting firm.
Representatives of KPMG LLP will be present at the Annual Meeting and will have an opportunity to make a statement at the Annual Meeting, if they desire to do so, and to respond to appropriate questions.
Independent Registered Public Accounting Firm Fees and Services
We regularly review the services and fees from our independent registered public accounting firm. These services and fees are also reviewed with our Audit Committee annually. In accordance with standard policy, KPMG LLP periodically rotates the individuals who are responsible for our audit.
In addition to performing the audit of our consolidated financial statements, KPMG LLP provided various other services during the fiscal years ended January 31, 20192020 and 2020.2021. Our Audit Committee has determined that KPMG LLP’s provision of these services, which are described below, does not impair KPMG LLP's independence from us. During the fiscal years ended January 31, 20192020 and 2020,2021, fees for services provided by KPMG LLP were as follows:
| | | | FY2019 | | FY2020 | | FY2020 | | FY2021 |
Audit fees(1) | | $ | 1,173,000 |
| | $ | 2,049,700 |
| Audit fees(1) | | $ | 2,049,700 | | | $ | 2,006,000 | |
Audit-related fees(2) | | Audit-related fees(2) | | — | | | 83,000 | |
Tax fees(2)(3) | | 28,000 |
| | 34,300 |
| | 34,300 | | | 27,700 | |
Other fees(3)(4) | | 1,780 |
| | 1,780 |
| | 1,780 | | | 1,780 | |
Total fees | | $ | 1,202,780 |
| | $ | 2,085,780 |
| Total fees | | $ | 2,085,780 | | | $ | 2,118,480 | |
Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Registered Public Accounting Firm
Our Audit Committee’s policy is to pre-approve all audit and permissible non-audit services provided by the independent registered public accounting firm, the scope of services provided by the independent registered public accounting firm and the fees for the services to be performed. In addition, the Audit Committee has established procedures by which the Chairperson of the Audit Committee may pre-approve such services up to $50,000 per service matter or project, subject to ratification by the Audit Committee at its next regularly scheduled quarterly meeting following such approval. Services that require pre-approval include audit services, audit-related services, tax services and other services. Pre-approval is detailed as to the particular service or category of services and is generally subject to a specific budget. The independent registered public accounting firm and management are required to periodically report to the Audit Committee regarding the extent of services provided by the independent registered public accounting firm in accordance with this pre-approval, and the fees for the services performed to date.
All of the services relating to the fees described in the table above were approved by our Audit Committee.
Our Board of Directors recommends that you vote “FOR” the ratification of the appointment of KPMG LLP as our independent registered public accounting firm for fiscal 20212022
PROPOSAL NO. 3:
In accordance with the rules of the SEC, we are providing stockholders with an opportunity to make a non-binding, advisory vote on the compensation of our Named Executive Officers. This non-binding advisory vote is commonly referred to as a "say on pay"“say-on-pay” vote. The non-binding advisory vote on the compensation of our Named Executive Officers, as disclosed in this Proxy Statement, will be determined by the vote of a majority of the voting power of the shares present at the virtual Annual Meeting or represented by proxy at the Annual Meeting and voting "FOR“FOR” or "AGAINST"“AGAINST” on the matter.
As an advisory vote, this proposal is not binding. However, our Board of Directors and Compensation Committee, which is responsible for designing and administering our executive compensation program, value the opinions expressed by stockholders in their vote on this proposal and will consider the outcome of the vote when making future compensation decisions for our Named Executive Officers.
Our Board of Directors recommends that you vote “FOR” the approval, on a non-binding