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Check the appropriate box:
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| ☐ | Preliminary Proxy Statement | |
| Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | |
| Definitive Proxy Statement | |
| Definitive Additional Materials | |
| Soliciting Material Pursuant to | |
TWITTER, INC.
(Name of Registrant as Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box):
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| ☒ | No fee required. | |||
| Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. | |||
(1) | Title of each class of securities to which transaction applies:
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(2) | Aggregate number of securities to which transaction applies:
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(3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
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(4) | Proposed maximum aggregate value of transaction:
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| ☐ | Fee paid previously with preliminary materials. | |||
| Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. | |||
(1) | Amount Previously Paid:
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(2) | Form, Schedule or Registration Statement No.:
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(3) | Filing Party:
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Proxy Statement Notice of 2017 Annual Meeting of Stockholders May 22, 2017 ◾ SAN FRANCISCO
TWITTER, INC.
1355 MARKET STREET, SUITE 900
SAN FRANCISCO, CALIFORNIA 94103
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held at 2:10:00 p.m.a.m. Pacific Time on Wednesday, June 3, 2015Monday, May 22, 2017
Dear Stockholders of Twitter, Inc.:
The 20152017 annual meeting of stockholders (the “Annual Meeting”) of Twitter, Inc., a Delaware corporation (“Twitter”), will be held onWednesday, June 3, 2015Monday, May 22, 2017 at 2:10:00 p.m.a.m. Pacific Time, at Yerba Buena Center for the Arts, YBCA ForumTwitter’s San Francisco offices located at 701 Mission1355 Market Street, San Francisco, California 94103, for the following purposes, as more fully described in the accompanying proxy statement:
1. To elect two Class II directors to serve until our 2018 annual meeting of stockholders and until their successors are duly elected and qualified;
| 1. | To elect three Class I directors to serve until our 2020 annual meeting of stockholders and until their successors are duly elected and qualified; |
2. To approve, on an advisory basis, the frequency of future stockholder advisory votes on the compensation of our named executive officers;
| 2. | To approve, on an advisory basis, the compensation of our named executive officers(“Say-on-Pay”); |
3. To ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for our fiscal year ending December 31, 2015; and
| 3. | To ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for our fiscal year ending December 31, 2017; |
4. To transact such other business as may properly come before the Annual Meeting or any adjournments or postponements thereof.
| 4. | To consider a stockholder proposal regarding a report on users owning the Twitter platform, if properly presented at the Annual Meeting; and |
| 5. | To transact such other business as may properly come before the Annual Meeting or any adjournments or postponements thereof. |
Our board of directors has fixed the close of business on April 10, 2015March 30, 2017 as the record date (the “Record Date”) for the Annual Meeting. Only stockholdersStockholders of record on April 10, 2015as of the Record Date are entitled to notice of and to vote at the Annual Meeting. Further information regarding voting rights and the matters to be voted upon is presented in the accompanying proxy statement.
This proxy statement and our annual report can be accessed directly at the following Internet address:
http://www.viewproxy.com/twitter/2015.Twitter/2017. You will be asked to enter the control number located on your proxy card.
YOUR VOTE IS IMPORTANT. Whether or not you plan to attend the Annual Meeting, we urge you to submit your vote via the Internet, telephone or mail.
We appreciate your continued support of Twitter and look forward to either greeting you in person at the Annual Meeting or receiving your proxy.
By order of the Board of Directors,
Richard Costolo
Jack Dorsey
Chief Executive Officer and Director
San Francisco, California
April 20, 20157, 2017
TABLE OF CONTENTS
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Board Leadership Structure and Role of |
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Stockholder Recommendations and Nominations to the Board of Directors |
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Corporate Governance Guidelines and Code of Business Conduct and Ethics |
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PROPOSAL NO. 3 RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM |
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Fees Paid to the Independent Registered Public Accounting Firm |
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| TWITTER, INC. / 2017 Proxy Statement | i | |
TABLE OF CONTENTS
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PROXY STATEMENT
FOR 2017 ANNUAL MEETING OF STOCKHOLDERS
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TWITTER, INC.
PROXY STATEMENT
FOR 20152017 ANNUAL MEETING OF STOCKHOLDERS
To Be Held at 2:10:00 p.m.a.m. Pacific Time on Wednesday, June 3, 2015Monday, May 22, 2017
This proxy statement and the enclosed form of proxy are furnished in connection with the solicitation of proxies by our board of directors for use at the 20152017 annual meeting of stockholders of Twitter, Inc., a Delaware corporation (“Twitter”), and any postponements, adjournments or continuations thereof (the “Annual Meeting”). The Annual Meeting will be held on Wednesday, June 3, 2015Monday, May 22, 2017 at 2:10:00 p.m.a.m. Pacific Time, at Yerba Buena Center for the Arts, YBCA ForumTwitter’s San Francisco offices located at 701 Mission1355 Market Street, San Francisco, California 94103. The Notice of Internet Availability of Proxy Materials (the “Notice”) containing instructions on how to access this proxy statement and our annual report is first being mailed on or about April 20, 20157, 2017 to all stockholders entitled to vote at the Annual Meeting.
| TWITTER, INC. / 2017 Proxy Statement | 1 | ||
QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS AND OUR ANNUAL MEETING
QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS AND OUR ANNUAL MEETING
The information provided in the “question and answer” format below is for your convenience only and is merely a summary of the information contained in this proxy statement. You should read this entire proxy statement carefully. Information contained on, or that can be accessed through, our website is not intended to be incorporated by reference into this proxy statement and references to our website address in this proxy statement are inactive textual references only.
What matters am I voting on?on and how does the board of directors recommend that I vote?
You will be voting on:
| PROPOSAL
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TWITTER BOARD OF DIRECTORS | PAGE REFERENCE | ||
(Proposal No. 1) The election of | FOR each nominee | 25 |
| (Proposal No. 2) The approval, on an advisory basis, | FOR | 27 |
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| FOR | 28 | ||
(Proposal No. 4) A stockholder proposal regarding a report on users owning the | AGAINST | 31 |
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Other than the four items of business described in this proxy statement, we are not aware of any other business to be acted upon at the Annual Meeting. You may be asked to consider any other business that properly comes before the Annual Meeting. |
How does the board of directors recommend I vote on these proposals?
Our board of directors recommends a vote:
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Who is entitled to vote?
Holders of our common stock as of the close of business on April 10, 2015,March 30, 2017, the date our board of directors has set as the record date (the “Record Date”), may vote at the Annual Meeting. As of the record date,Record Date, there were 654,381,146729,753,976 shares of our common stock outstanding. In deciding all matters at the Annual Meeting, each stockholder will be entitled to one vote for each share of our common stock held by them on the record date.Record Date. We do not have cumulative voting rights for the election of directors.
Registered Stockholders. of Record
If shares of our common stock are registered directly in your name with our transfer agent, you are considered the stockholder of record with respect to those shares, and the Notice was provided to you directly by us. As the stockholder of record, you have the right to grant your voting proxy directly to the individuals
-1-
listed on the proxy card or to vote
in person at the Annual Meeting. Throughout this proxy statement, we refer to these registered stockholders as “stockholders of record.”
Street Name Stockholders.
If shares of our common stock are held on your behalf in a brokerage account or by a bank or other nominee, you are considered to be the beneficial owner of shares that are held in “street name,” and the Notice was forwarded to you by your broker, bank or other nominee, who is considered the stockholder of record with respect to those shares. As the beneficial owner, you have the right to direct your broker, bank or other nominee as to how to vote your shares. Beneficial owners are also invited to attend the Annual Meeting. However, since a beneficial owner is not the stockholder of record, you may not vote your shares of our common stock in person at the Annual Meeting unless you follow your broker’sbroker, bank or other nominee’s procedures for obtaining a legal proxy. If you request a printed copy of our proxy materials by mail, your broker, bank or other nominee will provide a voting instruction form for you to use. Throughout this proxy statement, we refer to stockholders who hold their shares through a broker, bank or other nominee as “street name stockholders.”
| 2 | TWITTER, INC. / 2017 Proxy Statement |
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QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS AND OUR ANNUAL MEETING
How many votes are needed for approval of each proposal?
| PROPOSAL
| VOTE NEEDED FOR APPROVAL AND EFFECT OF ABSTENTIONS AND BROKERNON-VOTES | |
(Proposal No. | Our amended and restated bylaws (the “Bylaws”) provide for majority voting and our Corporate Governance Guidelines set forth the related director resignation policy for our director nominees. Our Bylaws state that to be elected in an uncontested election, a Abstentions will have no effect on the outcome of this proposal. Brokernon-votes will have no effect on the outcome of this proposal. | |
(Proposal No. 2) The approval, on an advisory basis, of theSay-on-Pay. | The affirmative vote of a majority of the shares of our common stock present in person or by proxy at the Annual Meeting and entitled to vote Abstentions are considered votes |
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Because this proposal is an advisory vote, the result will not be binding on our board of directors or our company. Our board of directors and our compensation committee will consider the outcome of the vote when determining |
| (Proposal No. | The affirmative vote of a majority of the shares of our common stock present in person or by proxy at the Annual Meeting and entitled to vote thereon. Abstentions are considered votes present and entitled to vote on this proposal, and thus, will have the same effect as a vote “Against” the proposal. Brokernon-votes will have no effect on the outcome of this proposal. |
| TWITTER, INC. / 2017 Proxy Statement | 3 | ||
QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS AND OUR ANNUAL MEETING
| PROPOSAL | VOTE NEEDED FOR APPROVAL AND EFFECT OF ABSTENTIONS AND BROKERNON-VOTES | |
(Proposal No. 4) A stockholder proposal regarding a report on users owning the Twitter platform, if properly presented at the Annual Meeting. | The affirmative vote of a majority of the shares of our common stock present in person or by proxy at the Annual Meeting and entitled to vote thereon. Abstentions are considered votes present and entitled to vote on this proposal, and thus, will have the same effect as a vote “Against” the proposal. Brokernon-votes will have no effect on the outcome of this proposal. |
What is a quorum?
A quorum is the minimum number of shares required to be present at the Annual Meeting to properly hold an annual meeting and conduct business under our amended and restated bylawsBylaws and Delaware law. The presence, in person or by proxy, of a majority of all issued and outstanding shares of our common stock entitled to vote at the Annual Meeting will constitute a quorum at the Annual Meeting. Abstentions, withholdagainst votes and brokernon-votes are counted as shares present and entitled to vote for purposes of determining a quorum.
How do I vote?
If you are a stockholder of record, there are four ways to vote:
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| by completing and mailing your proxy card (if you received printed proxy materials); or |
| by written ballot at the Annual Meeting. |
If you are a street name stockholder, you will receive voting instructions from your broker, bank or other nominee. You must follow the voting instructions provided by your broker, bank or other nominee in order to direct your broker, bank or other nominee on how to vote your shares. Street name stockholders should generally be able to vote by returning a voting instruction form, or by telephone or on the Internet.
However, the availability of telephone and Internet voting will depend on the voting process of your broker, bank or other nominee. As discussed above, if you are a street name stockholder, you may not vote your shares in person at the Annual Meeting unless you obtain a legal proxy from your broker, bank or other nominee.
Can I change my vote?
Yes. If you are a stockholder of record, you can change your vote or revoke your proxy any time before the Annual Meeting by:
| entering a new vote by Internet or by telephone; |
| completing and returning a later-dated proxy card; |
| notifying the Secretary of Twitter, Inc., in writing, at Twitter, Inc., 1355 Market Street, Suite 900, San Francisco, California 94103; or |
| completing a written ballot at the Annual Meeting. |
If you are a street name stockholder, your broker, bank or other nominee can provide you with instructions on how to change your vote.
What do I need to do to attend the Annual Meeting in person?
You are invited to attend the Annual Meeting if you are a registered stockholder of record or a street name stockholder as of the record date.Record Date. In order to enter the Annual Meeting, you must present a form of photo identification acceptable to us, such as a valid driver'sdriver’s license or passport, as well as proof of share ownership. Please note that since a street name stockholder is not the stockholder of record, you may not vote your shares in person at the Annual Meeting unless you follow your broker'sbroker, bank or other nominee’s procedures for obtaining a legal proxy.
Please note that seating is limited.limited and we ask that you please allow ample time forcheck-in. Seating will begin at 1:9:00 p.m.a.m. and the Annual Meeting will begin at 2:10:00 p.m. Use of cameras, recording devices, computers and other personal electronic devices will not be permitted at the Annual Meeting. Photography and video are prohibited at the Annual Meeting.
Please allow ample time for check-in.a.m. Parking in the area is limited. Please consider using public transportation.
For security reasons, stockholders should be prepared to pass through metal detectors prior to entering the Annual Meeting. Please note that large bags and packages will not be allowed at the Annual Meeting. Persons will be subject to search.
| 4 | TWITTER, INC. / 2017 Proxy Statement |
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QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS AND OUR ANNUAL MEETING
What is the effect of giving a proxy?
Proxies are solicited by and on behalf of our board of directors. Richard Costolo,Jack Dorsey (our Chief Executive Officer), Anthony Noto (our Chief Financial Officer and Chief Operating Officer) and Vijaya Gadde (our General Counsel and Secretary) have been designated as proxy holders by our board of directors. When proxies are properly dated, executed and returned, the shares represented by such proxies will be voted at the Annual Meeting in accordance with the instructions of the stockholder. If no specific instructions are given, however, the shares will be voted in accordance with the recommendations of our board of directors as described above. If any matters not described in this proxy statement are properly presented at the Annual Meeting, the proxy holders will use their own judgment to determine how to vote the shares. If the Annual Meeting is adjourned, the proxy holders can vote the shares on the new Annual Meeting date as well, unless you have properly revoked your proxy instructions, as described above.
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Why did I receive a Notice of Internet Availability of Proxy Materials instead of a full set of proxy materials?
In accordance with the rules of the Securities and Exchange Commission (“SEC”), we have elected to furnish our proxy materials, including this proxy statement and our annual report, primarily via the Internet. The Notice containing instructions on how to access our proxy materials is first being mailed on or about April 20, 20157, 2017 to all stockholders entitled to vote at the Annual Meeting.
Stockholders may request to receive all future proxy materials in printed form by mail or electronically bye-mail by following the instructions contained in the Notice. We encourage stockholders to take advantage of the availability of our proxy materials on the Internet to help reduce the environmental impact and the costs of our annual meetings of stockholders.
How are proxies solicited for the Annual Meeting?
Our board of directors is soliciting proxies for use at the Annual Meeting. All expenses associated with this solicitation will be borne by us. We will reimburse brokers, orbanks and other nominees for reasonable expenses that they incur in sending our proxy materials to you if a broker, bank or other nominee holds shares of our common stock on your behalf. In
addition, our directors and employees may also solicit proxies in person, by telephone, or by other means of communication. Our directors and employees will not be paid any additional compensation for soliciting proxies.
How may my brokerage firm or other intermediary vote my shares if I fail to provide timely directions?
Brokerage firms and other intermediaries holding shares of our common stock in street name for their customers are generally required to vote such shares in the manner directed by their customers. In the absence of timely directions, your broker, bank or other nominee will have discretion to vote your shares on our sole “routine” matter: the proposal to ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm. Your broker, bank or other nominee will not have discretion to vote on the election of directors, the advisory vote onSay-on-Payor on the frequency of future stockholder advisory votes on the compensation of our named executive officers,proposal, which are “non-routine”“non-routine” matters, absent direction from you.
Where can I find the voting results of the Annual Meeting?
We will announce preliminary voting results at the Annual Meeting. We will also disclose voting results on a Current Report on Form8-K that we will file with the SEC within four business days after the Annual Meeting. If final voting results are not available to us in time to file a Current Report on Form8-K within four business days after the Annual Meeting, we will file a Current Report on Form8-K to publish preliminary results and will provide the final results in an amendment to the Current Report on Form8-K as soon as they become available.
I share an address with another stockholder, and we received only one paper copy of the proxy materials. How may I obtain an additional copy of the proxy materials?
We have adopted aan SEC approved procedure called “householding,“householding.” which the SEC has approved. Under this procedure, we deliver a single copy of the Notice and, if applicable, our proxy materials to multiple stockholders who share the same address unless we have received contrary instructions from one or more of such stockholders. This procedure reduces our printing costs, mailing costs, and fees. Stockholders who participate in householding will continue to be able to access and receive
| TWITTER, INC. / 2017 Proxy Statement | 5 | ||
QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS AND OUR ANNUAL MEETING
separate proxy cards. Upon written or oral request, we will deliver promptly a separate copy of the Notice and, if applicable, our proxy materials to any stockholder at a shared address to which we delivered a single copy of any of these materials. To receive a separate copy, or, if a stockholder is receiving multiple copies, to request that we only send a single copy of the Notice and, if applicable, our proxy materials, such stockholder may contact us at the following address:as follows:
Twitter, Inc.
Attention: Investor Relations
1355 Market Street, Suite 900
San Francisco, California 94103
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Tel: (415)222-9670
Street name stockholders may contact their broker, bank or other nominee to request information about householding.
What is the deadline to propose actions for consideration at next year’s annual meeting of stockholders or to nominate individuals to serve as directors?
Stockholder Proposals
Stockholders may present proper proposals for inclusion in our proxy statement and for consideration at next year’s annual meeting of stockholders by submitting their proposals in writing to our Secretary in a timely manner. For a stockholder proposal to be considered for inclusion in our proxy statement for our 20162018 annual meeting of stockholders, our Secretary must receive the written proposal at our principal executive offices not later than December 22, 2015.8, 2017. In addition, stockholder proposals must comply with the requirements of Rule14a-8 regarding the inclusion of stockholder proposals in company-sponsored proxy materials. Stockholder proposals should be addressed to:
Twitter, Inc.
Attention: Secretary 1355
1355 Market Street, Suite 900
San Francisco, California 94103
Our amended and restated bylawsBylaws also establish an advance notice procedure for stockholders who wish to present a proposal before an annual meeting of stockholders but do not intend for the proposal to be included in our proxy statement. Our amended and restated bylawsBylaws provide that the only business that may be conducted at an annual meeting of stockholders is business that is (i) specified in our proxy materials with respect to such meeting, (ii) otherwise
properly brought before such meeting by or at the direction of our board of directors, or (iii) properly brought before such meeting by a stockholder of record entitled to vote at the annual meeting who has delivered timely written notice to our Secretary, which notice must contain the information specified in our amended and restated bylaws.Bylaws. To be timely for our 20162018 annual meeting of stockholders, our Secretary must receive the written notice at our principal executive offices:
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In the event that we hold our 20162018 annual meeting of stockholders more than 30 days before or more than 60 days after theone-year anniversary of the Annual Meeting, notice of a stockholder proposal that is not intended to be included in our proxy statement must be received no earlier than the close of business on the 120th day before our 20162018 annual meeting of stockholders and no later than the close of business on the later of the following two dates:
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If a stockholder who has notified us of his, her or its intention to present a proposal at an annual meeting does not appear to present his, her or its proposal at such annual meeting, we are not required to present the proposal for a vote at such annual meeting.
Recommendation or Nomination of Director Candidates
You may proposerecommend director candidates for consideration by our nominating and corporate governance committee.committee if you have held one percent (1%) of the fully diluted capitalization of the company for at least twelve (12) months prior to the date of the submission of the recommendation. Any such recommendations must comply with our amended and restated certificate of incorporation, Bylaws and applicable laws, rules and regulations, should include the nominee’s name and qualifications for membership on our board of directors, and should be directed to our Secretary at the address set forth above. For additional information regarding stockholder recommendations for director candidates, see the section titled “Board of Directors and Corporate Governance—Stockholder Recommendations forand Nominations to the Board of Directors.”
| 6 | TWITTER, INC. / 2017 Proxy Statement |
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QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS AND OUR ANNUAL MEETING
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In addition, our amended and restated bylawsBylaws permit stockholders to nominate directors for election at an annual meeting of stockholders. To nominate a director, the stockholder must provide the information required by our amended and restated bylaws.Bylaws. In addition, the stockholder must give timely notice to our Secretary in accordance with our amended and restated bylaws,Bylaws, which, in general, require that the notice be received by our Secretary within the time periods described above under “Stockholder Proposals” for stockholder proposals that are not intended to be included in a proxy statement.
Availability of Bylaws
A copy of our amended and restated bylaws,Bylaws, which were approved by our board of directors and stockholders in October 2013 and as most recently amended and approved by our board of directors in March 2017, is available on our website at http://investor.twitterinc.com. You may also contact our Secretary at the address set forth above for a copy of the relevant bylawBylaw provisions regarding the requirements for making stockholder proposals and nominating director candidates.
| TWITTER, INC. / 2017 Proxy Statement | 7 | ||
BOARD OF DIRECTORS
AND CORPORATE GOVERNANCE
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BOARD OF DIRECTORS AND CORPORATE GOVERNANCEBoard of Directors and Corporate Governance
Our business affairs are managed under the direction of our board of directors, which is currently composed of eightten members. All of our directors, other than Mr. Costolo,Dorsey, our chief executive officer,Chief Executive Officer, and Mr. Kordestani, our Executive Chairman, are independent within the meaning of the listing standards of the New York Stock Exchange.Exchange (the “NYSE”). Our board of directors is divided into three staggered classes of directors.directors each serving a staggered three-year term. At each annual meeting of stockholders, a class of directors will beis elected for a three-year term to succeed the class whose term is then expiring.
The following table sets forth the names, ages as of March 31, 2015,2017, and certain other information for each of the members of our board of directors with terms expiring at the annual meetingAnnual Meeting (who are also nominees for election as a director at the annual meeting)Annual Meeting) and for each of the continuing members of our board of directors:directors. Peter Fenton, a current member of our board of directors, will not be standing forre-election at the Annual Meeting. Full biographical information is below.
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Jack Dorsey |
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Richard Costolo |
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| Chief Executive Officer and Director |
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CLASS
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Directors with Terms expiring at the Annual Meeting/Nominees(1)
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Omid R. Kordestani
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Continuing Directors
| ||||||||||||||||||||||||||||||||||||||||||||||||||
Martha Lane Fox(4)
|
II
|
43
|
Director
|
|
2016
|
|
|
2018
|
|
|
—
|
|
X
|
|
|
|
| |||||||||||||||||||||||||||||||||
David Rosenblatt(5)
|
II
|
49
|
Director
|
|
2010
|
|
|
2018
|
|
|
—
|
|
X
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||
Evan Williams
|
II
|
45
|
Director
|
|
2007
|
|
|
2018
|
|
|
—
|
|
X
| |||||||||||||||||||||||||||||||||||||
Debra Lee(6)
|
II
|
62
|
Director
|
|
2016
|
|
|
2018
|
|
|
—
|
|
X
|
|
|
| ||||||||||||||||||||||||||||||||||
Jack Dorsey
|
III
|
40
|
Chief Executive
|
|
2007 |
|
|
2019 |
|
|
— |
| ||||||||||||||||||||||||||||||||||||||
Hugh Johnston(7)
|
III
|
55
|
Director
|
|
2016
|
|
|
2019
|
|
|
—
|
|
X
|
| ||||||||||||||||||||||||||||||||||||
(1) |
|
| (2) | Ms. Scardino |
| (3) | Mr. Taylor joined the board of directors on July 1, 2016 and the compensation committee on |
|
|
| (5) | Mr. Rosenblatt will become Chairperson of the compensation committee effective immediately following the Annual Meeting replacing Mr. Fenton. |
| (6) | Ms. Lee joined the board of directors and the nominating and corporate governance committee on May 15, 2016, and, effective following the 2016 annual meeting of stockholders, served as Chairperson of such committee. |
| (7) | Mr. Johnston joined the board of directors on April 6, 2016 and the audit committee on April 6, 2016, and, effective following the 2016 annual meeting of stockholders, served as Chairperson of such committee. |
Legend: (L) Lead independent director |
Chair |
Member |
Audit committee financial expert
| 8 | TWITTER, INC. / 2017 Proxy Statement |
| ||
BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
Considerations in Evaluating Director Nominees
Board of Directors Experience ✓ Finance and Accounting ✓ Technology Industry ✓ Digital and Social Media ✓ Operation of Global Organizations ✓ Mergers and Acquisitions ✓ Risk Management ✓ Computer Science ✓ Strategic Transformation ✓ International Tax ✓ Intellectual Property ✓ Executive Leadership and Talent Development ✓ Customer Perspective ✓ Company Senior Leadership ✓ Public Company Board Membership ✓ Public Policy ✓ Brand Marketing |
Considerations in Evaluating Director Nominees
Our nominating and corporate governance committee uses a variety of methods for identifying and evaluating director nominees. In its evaluation of director candidates, our nominating and corporate governance committee will consider the current size and composition of our board of directors and the needs of our board of directors and the respective committees of our board of directors. Additional qualifications that our nominating and corporate governance committee considers include, without limitation, issues of character, ethics, integrity, judgment, diversity of experience, independence, area of expertise, strategic vision, length of service, potential conflicts of interest, management, accounting and finance expertise and other commitments.
Nominees must also have the ability to offer advice and guidance to our management based on past experience in positions with a high degree of responsibility and be leaders in the companies or institutions with which they are affiliated. Director candidates must understand the fiduciary
responsibilities that are required of directors and have sufficient time available in the judgment of our nominating and corporate governance committee to perform all board of director and applicable committee responsibilities. Members of our board of directors are expected to prepare for, attend, and participate in all board of director and applicable committee meetings. Other than the foregoing, there are no stated minimum criteria for director nominees, although our nominating and corporate governance committee may also consider such other factors as it may deem, from time to time, are in our and our stockholders’ best interests.
Our board of directors believes that our board of directors should be a diverse body. Our Corporate Governance Guidelines require our nominating and corporate governance committee to consider a broad range of backgrounds, experiences and diversity (in all aspects of that word). After completing its review and evaluation of director candidates, our nominating and corporate governance committee recommends to our full board of directors the director nominees for selection.
The experiences, qualifications and skills of each of the members of our board of directors with terms expiring at the Annual Meeting (who are also nominees for election as a director at the Annual Meeting) and for each of the continuing members of our board of directors that the board of directors considered in the nomination of such director are included below the directors’ individual biographies on the following pages. The board of directors concluded that each nominee should serve as a director based on the specific experience and attributes listed below and the direct personal knowledge of each nominee’s previous service on the board of directors, including the insight each nominee brings to the board of directors’ functions and deliberations.
In 2016, our nominating and corporate governance committee retained the services of an executive search firm to assist it in identifying potential new candidates to join our board of directors.
|
| TWITTER, INC. / 2017 Proxy Statement | 9 | |
BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
Nominees for Director
OMID R. KORDESTANI
Executive Chairman, Twitter, Inc.
Director since 2015
Age 53
Committees:None
Omid R. Kordestanihas served as the Executive Chairman of our board of directors since October 2015. From August 2014 to August 2015, Mr. Kordestani served as Senior Vice President and Chief Business Officer at Google Inc. From May 1999 to April 2009, Mr. Kordestani served as Senior Vice President of Global Sales and Business Development at Google Inc. From 1995 to 1999, Mr. Kordestani served as Vice President of Business Development at Netscape Communications Corporation. Prior to joining Netscape Communications Corporation, Mr. Kordestani held positions in business development, product management and marketing at The 3DO Company, Go Corporation and Hewlett-Packard Company. Mr. Kordestani holds a B.S. in Electrical Engineering from San Jose State University and an M.B.A. from Stanford University.
Skills and Expertise:
| ✓ | Global business leadership, operational and organizational experience, corporate strategy experience and management experience as former Senior Vice President and Chief Business Officer of Google Inc. |
| ✓ | First-hand experience in successfully leading and managing large, complex global sales, support and service organizations in the technology industry. |
Other Public Company Board Service: Vodafone Group PLC, a multinational telecommunications company (March 2013 – October 2014)
MARJORIE SCARDINO
Former Chief Executive Officer of Pearson PLC
Director since 2013
Age 70
Committees:Audit Committee and Compensation Committee
Marjorie Scardinohas served as a member of our board of directors since December 2013. From January 1997 to December 2012, Ms. Scardino served as Chief Executive Officer and as a member of the board of directors of Pearson PLC, a publishing and education company. From 1985 to 1997, Ms. Scardino served in several roles at The Economist Group, a media company, including as Chief Executive Officer.
Ms. Scardino served on the board of directors of Nokia Corporation, a telecommunications company, from 2001 to April 2013. Ms. Scardino holds a B.A. in Psychology from Baylor University and a J.D. from the University of San Francisco School of Law.
Skills and Expertise:
| ✓ | Global business leadership, operational experience, and management experience as former Chief Executive Officer of Pearson PLC and The Economist Group. |
| ✓ | Over 25 years of leadership experience running some of the world’s preeminent multinational publishing and media companies. |
| ✓ | Outside board experience as a director of several large, complex global public companies. |
Other Public Company Board Service:International Airlines Group, an airline group (December 2013 – Present), PureTech Health PLC, a biotech company (June 2015 – Present), Nokia Corporation, a communications and information technology company (2001 – April 2013) and Pearson PLC, a publishing and educational company (1997 – December 2012)
| 10 | TWITTER, INC. / 2017 Proxy Statement |
| ||
BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
Nominees for Director
BRET TAYLOR
Co-Founder and Chief Executive Officer of Quip, Inc.
Director since 2016
Age 36
Committees:Compensation Committee
Bret Taylor has served as a member of our board of directors since July 2016. Since September 2012, Mr. Taylor has served as the Chief Executive Officer andco-founder of Quip, Inc., a productivity software company. From August 2009 to July 2012, Mr. Taylor served as Chief Technology Officer of Facebook, Inc. From October 2007 to August 2009, Mr. Taylor served as the Chief Executive Officer of FriendFeed, Inc., a social network. From June 2007 to September 2007, Mr. Taylor served as anentrepreneur-in-residence at Benchmark, a venture capital firm, where heco-founded Friendfeed, Inc. Prior to June 2007, Mr. Taylor served as Group Product Manager at Google Inc., where heco-created Google Maps and the Google Maps API.
Mr. Taylor holds a B.S. and a Master’s Degree in Computer Science from Stanford University.
Skills and Expertise:
| ✓ | Global business leadership, operational experience, and experience developing technology as Chief Executive Officer of Quip, Inc. |
| ✓ | In-depth knowledge of the technology sector. |
| ✓ | Extensive knowledge of our technologies and product offerings. |
| ✓ | Outside board experience as a director of a large, complex global public company. |
Other Public Company Board Service:TASER International, Inc., a protection technologies company (June 2014 – Present)
MARTHA LANE FOX
Founder and Chairperson of Lucky Voice Group Ltd.
Chairperson of MakieWorld Ltd.
FormerCo-Founder and Managing Director of lastminute.com
Crossbench Peer in House of Lords
Director since 2016
Age 43
Committees:Audit Committee and Nominating and Corporate Governance Committee
Martha Lane Foxhas served as a member of our board of directors since April 2016. Since August 2005, Ms. Lane Fox has served as the founder and chairperson of Lucky Voice Group Ltd., a private karaoke company, and since September 2012 as the chairperson of MakieWorld Ltd., a 3D printing and game company. From 1998 to 2003, Ms. Lane Fox was theco-founder and managing director of lastminute.com, a travel and leisure website, and remained on the board of directors until 2005. Since March 2013, Ms. Lane Fox has served as a crossbench peer in the United Kingdom House of Lords.
Since September 2015, Ms. Lane Fox has served as the founder and chair of doteveryone.org.uk, an organization advancing the understanding and use of Internet enabled technologies, and in September 2014 was appointed Chancellor of Open University. From July 2007 to April 2015, Ms. Lane Fox served on the board of directors of Marks and Spencer PLC, a retail company, and has served on various private company boards. Ms. Lane Fox holds a B.A. in Ancient History and Modern History from University of Oxford.
Skills and Expertise:
| ✓ | Global business leadership, operational experience, and management experience as formerco-founder and managing director of lastminute.com. |
| ✓ | Outside board experience as a director of several large, complex global public companies, as well as several private companies. |
| ✓ | Valuable experience in technology and consumer industries. |
| ✓ | Government insights as crossbench peer in the United Kingdom House of Lords. |
Other Public Company Board Service: Marks and Spencer PLC, a multinational retailer (July 2007 – April 2015)
| TWITTER, INC. / 2017 Proxy Statement | 11 | ||
BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
Continuing Directors
DAVID ROSENBLATT
Chief Executive Officer of 1stdibs.com, Inc.
Director since 2010
Age 49
Committees:Compensation Committee and Nominating and Corporate Governance Committee
David Rosenblatthas served as a member of our board of directors since December 2010. Since November 2011, Mr. Rosenblatt has served as Chief Executive Officer of 1stdibs.com, Inc., an online luxury marketplace. From October 2008 to May 2009, Mr. Rosenblatt served as President of Global Display Advertising at Google.Google Inc. Mr. Rosenblatt joined Google in March 2008 in connection with Google’s acquisition of DoubleClick, Inc., a provider of digital marketing technology and services. Mr. Rosenblatt joined DoubleClick in 1997 as part of its initial management team and served in several executive positions during his tenure, including as Chief Executive Officer from July 2005 to March 2008 and President from 2000 to July 2005. Mr. Rosenblatt currently serves on the boards of directors of IAC/InterActiveCorp, a media and Internet company, and a number of privately held companies. Mr. Rosenblatt holds a B.A. in East Asian Studies from Yale University and an M.B.A. from Stanford University. Mr. Rosenblatt was selected to serve on our
Skills and Expertise:
| ✓ | Global business leadership and extensive financial and management expertise as Chief Executive Officer of 1stdibs.com, Inc. |
| ✓ | Offers us a unique perspective with respect to building and managing a global brand in rapidly-changing industries. |
| ✓ | Outside board experience as a director of a large, complex global public company, as well as several private companies, which provides us with important perspectives in an evaluation of our practices and processes. |
Other Public Company Board Service:IAC/ InterActiveCorp, a media and internet company (December 2008 – Present)
EVAN WILLIAMS
Co-Founder and Chief Executive Officer of directors becauseMedium and Chief Executive Officer of his operating and management experience with a range of Internet and technology companies, particularly his experience with companies that focused on monetizing large online audiences.The Obvious Corporation
Director since 2007
Age 45
Committees:None
Evan Williamsis one of our founders and has served as a member of our board of directors since May 2007. From October 2008 to October 2010, Mr. Williams served as our President and Chief Executive Officer, from July 2009 to March 2010, as our Chief Financial Officer and from February 2008 to October 2008, as our Chief Product Officer. Since April 2011, Mr. Williams has served asCo-Founder and Chief Executive Officer of Medium, an online publishing platform, and since October 2006, as Chief Executive Officer of The Obvious Corporation, a technology systems innovator. Mr. Williams was selected to serve on our board of directors because of the perspective
Skills and Expertise:
| ✓ | Global business leadership, operational experience, and experience developing technology asCo-Founder and Chief Executive Officer of Medium and Chief Executive Officer of The Obvious Corporation. |
| ✓ | In-depth knowledge of the technology sector. |
| ✓ | Extensive knowledge of our technologies and product offerings. |
| ✓ | Mr. Williams is one of our largest stockholders, owning approximately 5.98% of the outstanding shares of our common stock, directly aligning his interests with those of all of our stockholders. |
Other Public Company Board Service:None
| 12 | TWITTER, INC. / 2017 Proxy Statement |
| ||
BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
Continuing Directors
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he brings as one
DEBRA LEE
Chairperson and Chief Executive Officer of our foundersBET Networks
Director since 2016
Age 62
Committees:Nominating and as one of our largest stockholders, as well as his extensive experience with technology companies.Corporate Governance Committee (Chair)
Peter CherninMs. Lee has served as a member of our board of directors since November 2012.May 2016. Since June 2009, Mr. CherninJanuary 2006, Ms. Lee has served as ChairmanChairperson and Chief Executive Officer of Chernin Entertainment, LLC,BET Networks, a filmmedia and television production company,entertainment subsidiary of Viacom, Inc. that owns and The Chernin Group LLC, which is involvedoperates BET Networks and several other ventures. Ms. Lee has held a number of executive positions with BET Networks since she joined in strategic opportunities in media, technology and entertainment. Since October 2010, Mr. Chernin has served as Chairman1986 before becoming Chairperson and Chief Executive Officer of CA Media, LP, which buildsin January 2006, including President and manages media, technology and entertainment businesses throughout the Asia Pacific region. From October 1996Chief Executive Officer from June 2005 to June 2009, Mr. Chernin served in several roles at News Corporation, most recently asJanuary 2006, President and Chief Operating Officer from 1995 to 2005 and served as Chairman and Chief Executive Officer of The Fox Group, a subsidiary of News Corporation. Mr. Chernin currently serves on the boards of directors of American Express Company, a diversified financial services company, and Pandora Media, Inc., an online music streaming company. Mr. Chernin previously served on the boards of directors of various companies in the media industry and the technology industry, including News Corporation, DirecTV, Inc., E*Trade Financial Corporation and Gemstar-TV Guide International, Inc. Mr. Chernin holds a B.A. in English Literature from the University of California, Berkeley. Mr. Chernin was selected to serve on our board of directors because of his operating and management experience at global media companies, his expertise in online and mobile markets and other new technologies and his service on the boards of directors of numerous other companies.
Peter Currie has served as a member of our board of directors since November 2010. Since April 2004, Mr. Currie has served as President of Currie Capital LLC, a private investment firm. Mr. Currie previouslyalso served as Executive Vice President and Chief Administrative Officer of Netscape Communications Corporation, a software company,General Counsel, and as Executive Vice President and Chief Financial Officer of McCaw Cellular Communications, Inc., a wireless communications company. Mr. Currie currently serves on the boards of directors of Schlumberger Limited, a petroleum industry services company, New Relic, Inc., a software company, and a number of privately held companies. Mr. Currie previously served on the boards of directors of Clearwire Corporation, CNET Networks, Inc., Safeco Corporation and Sun Microsystems, Inc. Mr. Currie currently serves as President of the board of trustees of Phillips Academy. Mr. CurrieGeneral Counsel.
Ms. Lee holds a B.A. in Economics and French Literature from Williams CollegeBrown University, a J.D. from Harvard Law School and an M.B.A.M.P.P. from StanfordKennedy School of Government at Harvard University. Mr. Currie was selected to serve on our
Skills and Expertise:
| ✓ | Global business leadership, operational experience, and experience developing technology as Chairperson and Chief Executive Officer of BET Networks. |
| ✓ | Over 25 years of leadership experience running one of the world’s top media companies. |
| ✓ | Offers us a unique perspective with respect to building and managing a global brand in rapidly-changing industries. |
| ✓ | Outside board experience as a director of several large, complex global public companies, which provides us with important perspectives in an evaluation of our practices and processes. |
Other Public Company Board Service: Marriott International, Inc., a worldwide operator, franchisor, and licensor of directors becausehotels and timeshare properties under numerous brand names (2004 – Present), WGL Holdings, Inc., an energy company (November 2000 – Present) and Revlon, Inc., a cosmetics, skin care, fragrance, and personal care company (January 2006 – June 2015)
JACK DORSEY
Co-Founder and Chief Executive Officer of his strong financialTwitter, Inc. and operational expertise as a result of his service on the boards of directors of numerous other companies and experience serving in senior operating roles in high-growth, technology-driven companies.Square, Inc.
Director since 2007
Age 40
Committees:None
Jack Dorseyis one of our founders and has served as the Chairman of our board of directorsChief Executive Officer since October 2008September 2015 and as a member of our board of directors since May 2007. Mr. Dorsey served as our interim Chief Executive Officer from July 2015 to September 2015 and as our President and Chief Executive Officer from May 2007 to October 2008. Mr. Dorsey served as the Chairperson of our board of directors from October 2008 to September 2015. Since February 2009, Mr. Dorsey has served asCo-Founder and Chief Executive Officer of Square, Inc., a provider of payment processing services. Mr. Dorsey currently serves on the boards of directors
Skills and Expertise:
| ✓ | Global business leadership, operational experience, and experience developing technology asco-founder and Chief Executive Officer of Twitter and Square, Inc. |
| ✓ | In-depth knowledge of the technology sector and experience in developing transformative business models. |
| ✓ | Unmatched familiarity with and knowledge of our technologies and product offerings. |
| ✓ | Offers us a unique perspective with respect to building and managing a global brand in rapidly-changing industries. |
| ✓ | Outside board experience as a director of a large, complex global public company. |
Other Public Company Board Service: The Walt Disney Company, a multinational media and entertainment company (December 2013 – Present) and Square, Inc. Mr. Dorsey was selected to serve on our board of directors because of the perspective and experience he brings as one of our founders and as one of our largest stockholders, as well as his extensive experience with technology companies.
Richard Costolo has served as our Chief Executive Officer since October 2010 and as a member of our board of directors since September 2009. From September 2009 to October 2010, Mr. Costolo served as our Chief Operating Officer. From June 2007 to June 2009, Mr. Costolo served as Group Product Manager at Google Inc., a provider of Internet-related products and services. From October 2003 to May 2007, Mr. Costolo served as Co-Founderpayments processing services company (February 2009 – Present)
| TWITTER, INC. / 2017 Proxy Statement | 13 | ||
BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
Continuing Directors
HUGH JOHNSTON
Vice Chairman and Chief ExecutiveFinancial Officer of FeedBurner,PepsiCo, Inc., an RSS subscription feed provider, which was acquired by Google in 2007. Mr. Costolo holds a B.S. in Computer Science from the University of Michigan, Ann Arbor. Mr. Costolo was selected to serve on our board of directors because of his extensive background as a founder and an executive of companies in the technology industry and the perspective and experience he brings as our Chief Executive Officer.
Director since 2016
Age 55
Committees:Audit Committee (Chair)
Peter Fenton Hugh Johnstonhas served as a member of our board of directors since February 2009. Since September 2006,April 2016. Mr. FentonJohnston has been Vice Chairman and Chief Financial Officer of PepsiCo, Inc., a global food and beverage company, since July 2015 and March 2010, respectively. Mr. Johnston served as a General Partner of Benchmark, a venture capital firm. From October 1999Executive Vice President at PepsiCo from March 2010 to May 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 Yelp, Inc., a local directoryJuly 2015. He joined PepsiCo in 1987 and user review service, Hortonworks, Inc., an enterprise data
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management platform, New Relic, Inc., a software analytics company, Zendesk, Inc., a customer service platform, andhas held a number of privately held companies.increasing leadership roles, including Executive Vice President, Global Operations from 2009 to 2010 and President, Pepsi-Cola North America Beverages from 2007 to 2009. Mr. Fenton holdsJohnston left PepsiCo, Inc. from August 1999 through March 2002 to pursue a B.A. in Philosophy and an M.B.A. from Stanford University.general management role as Vice President, Retail at Merck Medco, leading the company’s retail pharmacy card business. Mr. Fenton was selected to serve on our board of directors because of his extensive experience in the venture capital industry and his knowledge of technology companies.
Marjorie Scardino has served as a member of our board of directors since December 2013. From January 1997 to December 2012, Ms. Scardino served as Chief Executive Officer and as a member of the board of directors of Pearson plc, a publishing and education company. From 1985 to 1997, Ms. Scardino served in several roles at The Economist Group, a media company, including as Chief Executive Officer. Ms. Scardino currently serves on the board of directors of International Airlines Group, an airline group, andJohnston served on the board of directors of Nokia Corporation,AOL Inc., a telecommunicationsglobal media technology company, from 2001September 2012 to April 2013. Ms. ScardinoJune 2015. Mr. Johnston holds a B.A. in PsychologyB.S. from BaylorSyracuse University and a J.D.an M.B.A. from the University of San Francisco School of Law. Ms. Scardino was selected to serve on our board of directors because of her operatingChicago.
Skills and management experience withExpertise:
| ✓ | Global business leadership and extensive financial and management expertise as Vice Chairman and Chief Financial Officer of PepsiCo, Inc. |
| ✓ | Financial expertise and significant audit and financial reporting knowledge. |
| ✓ | Outside board experience as a director of AOL Inc. |
Other Public Company Board Service: AOL, Inc., a multinational mass media companies, and her service on the boards of directors of public companies.company (September 2012 – June 2015)
Our common stock is listed on the New York Stock Exchange.NYSE. Under the listing standards of the New York Stock Exchange,NYSE, independent directors must comprise a majority of a listed company’s board of directors. In addition, the listing standards of the New York Stock ExchangeNYSE require that, subject to specified exceptions, each member of a listed company’s audit, compensation, and nominating and corporate governance committees be independent. Under the listing standards of the New York Stock Exchange,NYSE, a director will only qualify as an “independent director” if, in the opinion of that listed company’s board of directors, that director has no material relationship with the listed company (either directly or as a partner, stockholder or officer of an organization that has a relationship with the company) and such director does not have a relationship that would interferespecified relationships with the exercise of independent judgment in carrying out the responsibilities of a director.company.
AuditIn addition, audit committee members must also satisfy the additional independence criteria set forth in Rule10A-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the listing standards of the New York Stock Exchange.NYSE. Compensation committee members must also satisfy the additional independence criteria set forth in Rule10C-1 under the Exchange Act and the listing standards of the New York Stock Exchange.NYSE.
Our board of directors has undertaken a review of the independence of our directors. Based on information provided by each director concerning his or her background, employment and affiliations, our board of directors has determined that Ms.Mses. Lane Fox, Lee and Scardino, and Messrs. Chernin, Currie, Dorsey, Fenton, Johnston, Rosenblatt, Taylor and Williams, do not have a material relationship that would interfere with the exercisecompany (either directly or as a partner, stockholder or officer of independent judgment in carrying outan organization that has a relationship with the responsibilities of a directorcompany) and that each of these directors is “independent” as that term is defined under the listing standards of the New York Stock Exchange.NYSE. In the case of Messrs. Chernin and Currie, former members of our board of directors who served as directors in 2016, such former directors had no material relationship with the company and were independent during the time they served on our board of directors. In making these determinations, our board of directors considered the current and prior relationships that eachnon-employee director has with our company and all other facts and circumstances our board of directors deemed relevant in determining their independence, including in assessing the beneficial ownershipmateriality of our capital stock by each non-employeea director’s relationship with the company, considering the issue from the standpoint of the organizations with which the director has an affiliation, and the transactions involving them described in the section titled “Related PartyPerson Transactions.”
| 14 | TWITTER, INC. / 2017 Proxy Statement |
| ||
BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
Board Leadership Structure and Role of Our Lead Independent Director
Board Leadership Structure and Role of ourOur Lead Independent Director
We believe that the structure of our board of directors and its committees provides strong overall management of our company. Our
Separate Executive Chairman and Chief Executive Officer Roles. We have maintained separate Executive Chairman of ourthe board of directors and our Chief Executive Officer roles aresince October 2015, and we treat those positions as separate and distinct, with the distinct responsibilities as detailed in the examples below.
RESPONSIBILITIES OF EXECUTIVE CHAIRMAN | RESPONSIBILITIES OF CHIEF EXECUTIVE OFFICER | |
• Provide guidance, advice and mentorship to the Chief Executive Officer and other executive officers. • Involvement in key corporate matters, such as recruiting, major transactions, and broader business, customer and government relationships. • Monitor the content, quality and timeliness of information sent to our board of directors. • Preside over, set agenda for and chair board meetings. • Coordinate with chairs of board of directors committees. • Assist the nominating and corporate governance committee with (i) the board of director’s annual evaluation and self-assessment and (ii) board of directors composition and evolution planning, including review of committee memberships. | • Develop, set and drive the strategic direction, imperatives and priorities of our company. • Oversee the general management and operation of our company. • Oversee the attainment of our strategic, operational and financial goals and strategic and operational planning. • Responsible for the guidance, development and oversight of senior management. • Chief spokesperson to our employees, users, partners and stockholders. |
Lead Independent Director. Each of the directors, other than Messrs. Dorsey and Kordestani, are independent. The board of directors believes that the independent directors provide effective oversight of management. In addition, our independent directors have appointed a Lead Independent Director. This structure enables each person to focus on different aspects of company leadership. Our Chief Executive officer is responsible for setting the strategic direction of our company, the general management and operation of the business and the guidance and oversight of senior management. The Chairman of our board of directors monitors the content, quality and timeliness of information sent to our board of directors and is available for consultation with our board of directors regarding the oversight of our business affairs.
Mr. Currie,Ms. Scardino as our Lead Independent Director, is empowered to, among other things, preside over meetings ofa position she has held since May 2016 (replacing Mr. Currie, our independent directors, approve information to be sent to our board of directors if requested to do so by our board of directors, approve proposed meeting agendas and schedules and call meetings of our board of directors orformer Lead Independent Director). As Lead Independent Director, Ms. Scardino’s responsibilities include:
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RESPONSIBILITIES OF LEAD INDEPENDENT DIRECTOR |
• Preside over meetings of our independent directors. • Approve information to be sent to our board of directors if requested to do so by our board of directors. • Advise the Executive Chairman as to the quality, quantity, and timeliness of the flow of information from management that is necessary for the independent directors to perform their duties effectively and responsibly. • Approve proposed meeting agendas and schedules. • Call meetings of our board of directors or independent directors. • Act as the principal liaison between the independent directors and the Executive Chairman on sensitive issues. • Additional duties as our board of directors may otherwise determine and delegate to assist the board of directors in the fulfillment of its responsibilities. |
We believe this structure of a separate Executive Chairman of our board of directors and Chief Executive Officer, combined with a Lead Independent Director, enables each person to focus on different aspects of company leadership and reinforces the independence of our board of directors as a whole and results in an effective balancing of responsibilities, experience and independent perspective that meets the current business strategy and corporate governance needs and oversight responsibilities of our board of directors.
| TWITTER, INC. / 2017 Proxy Statement | 15 | ||
BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
Board Meetings and Committees
We have an active and engaged board of directors that is committed to fulfilling its fiduciary duty to act in good faith in the best interests of our company and all of our stockholders. During our fiscal year ended December 31, 2014,2016, our board of directors held eight13 meetings (including regularly scheduled and special meetings), and acted by written/ electronic consent 7 times, and each director attended at least 75% of the aggregate of (i) the total number of meetings of our board of directors held during the period for which he or she has been a director and (ii) the total number of meetings held by all committees of our board of directors on which he or she served during the periods that he or she served.
Although we do not have a formal policy regarding attendance by members of our board of directors at annual meetings of stockholders, we encourage, but do not require, our directors to attend. FourSix directors attended our 2014 Annual Meeting2016 annual meeting of Stockholders.stockholders.
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 of the committees of our board of directors is described below. Members will serve on these committees until their resignation or until as otherwise determined by our board of directors.
Audit CommitteeAUDIT COMMITTEE
Our audit committee consists of Messrs. Currie and Fenton and Ms.Johnston and Mses. Lane Fox and Scardino, with Mr. CurrieJohnston serving as Chairman.Chairperson. Mr. Currie, the former Chairperson of our audit committee did not stand for re-election at the 2016 annual meeting of stockholders and was replaced by Mr. Johnston as the Chairperson of the audit committee on such date. Each of our audit committee members meets the requirements for independence for Audit Committeeaudit committee members under the listing standards of the New York Stock ExchangeNYSE and SEC rules and regulations. Each member of our audit committee also meetsregulations, and the financial literacy and sophistication requirements of the listing standards of the New York Stock Exchange.NYSE. In addition, our board of directors has determined that Mr. Johnston is, and Mr. Currie iswas, an audit committee financial expert within the meaning of Item 407(d) of RegulationS-K under the Securities Act of 1933, as amended. Among other responsibilities, our audit committee:
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| helps to ensure the independence and performance of the independent registered public accounting firm; |
| discusses the scope and results of the audit with the independent registered public accounting firm, and reviews, with management and the independent registered public accounting firm, our interim and year- end operating results; develops procedures for employees to submit concerns anonymously about questionable accounting or audit matters; reviews our policies on risk assessment and risk management; reviews related person transactions; and approves or, as required,pre-approves, all audit and all permissiblenon-audit services, other than de minimisnon- audit |
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Our audit committee operates under a written charter that satisfies the applicable rules and regulations of the SEC and the listing standards of the New York Stock Exchange.NYSE. A copy of the charter of our audit committee is available on our website at http://investor.twitterinc.com. During 2014,fiscal 2016, our Audit Committeeaudit committee held eight meetings and acted by written/electronic consent one time.7 meetings.
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Compensation CommitteeCOMPENSATION COMMITTEE
Our compensation committee consists of Messrs. Chernin, Fenton, Rosenblatt and Rosenblatt,Taylor and Ms. Scardino, with Mr. Fenton serving as Chairman. Ms. ScardinoChairperson. Mr. Rosenblatt will joinbecome Chairperson immediately following the compensation committee on May 1, 2015,Annual Meeting, replacing Mr. Chernin.Fenton. Each of our compensation committee members meets the requirements for independence for Compensation Committeecompensation committee members under the listing standards of the New York Stock ExchangeNYSE and SEC rules and regulations, including Rule 10C-1 under the Exchange Act.regulations. Each member of our compensation committee is also anon-employee director as defined pursuant tounder Rule16b-3 promulgated under the Exchange Act, and an outside director as defined pursuant tounder Section 162(m) of the Internal Revenue Code.Code of 1986, as amended (the “Code”). Among other responsibilities, our compensation committee:
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| 16 | TWITTER, INC. / 2017 Proxy Statement |
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BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
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Our compensation committee operates under a written charter that satisfies the applicable rules and regulations of the SEC and the listing standards of the New York Stock Exchange.NYSE. A copy of the charter of our compensation committee is available on our website at http://investor.twitterinc.com. During 2014,fiscal 2016, our Compensation Committeecompensation committee held four8 meetings and acted by writtenwritten/electronic consent eight11 times.
Nominating and Corporate Governance CommitteeNOMINATING AND CORPORATE GOVERNANCE COMMITTEE
Our nominating and corporate governance committee consists of Messrs. Chernin, CurrieMses. Lane Fox and Lee and Mr. Rosenblatt, with Mr. CurrieMs. Lee serving as Chairman, eachChairperson. Mr. Chernin, the former Chairperson of our nominating and corporate governance committee did not stand forre-election at the 2016 annual meeting of stockholders and was replaced by Ms. Lee as the Chairperson of the nominating and corporate governance on such date. Each of our nominating and corporate governance committee members meets the requirements for independence under the listing standards of the New York Stock ExchangeNYSE and SEC rules and regulations. Mr. Chernin will serve as Chairman of our nominating and corporate governance committee beginning on May 1, 2015.
Among other responsibilities, our nominating and corporate governance committee:
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Our nominating and corporate governance committee operates under a written charter that satisfies the applicable listing standards of the New York Stock Exchange.NYSE. A copy of the charter of our nominating and corporate governance committee is available on our website at http://investor.twitterinc.com. During 2014,fiscal 2016, our nominating and corporate governance committee held four1 meeting and acted by written/electronic consent 3 times.
MAJORITY VOTING WITH DIRECTOR RESIGNATION POLICY
Our Bylaws provide for majority voting and our Corporate Governance Guidelines set forth the related director resignation policy for our director nominees. Our Bylaws state that to be elected in an uncontested election, a nominee must receive a majority of the votes cast with respect to such nominee (e.g., the number of shares voted “For” a nominee must exceed the number of shares voted “Against” for that nominee). Under our Corporate Governance Guidelines, each nominee submits, in advance of their nomination, an irrevocable resignation that will become effective if (i) the nominee fails to receive the required vote at the Annual Meeting and (ii) the board of directors accepts the resignation. The nominating and corporate governance committee promptly considers whether to accept the resignation of any nominee who fails to receive the required number of votes for election and submits such recommendation for consideration by the board of directors. In deciding whether to accept or reject the resignation, the nominating and corporate governance committee and the board of directors will consider any factors they deem relevant. Any nominee who tenders his or her resignation pursuant to our Corporate Governance Guidelines may not participate in the nominating and corporate governance committee recommendation or board of directors action regarding whether to accept the resignation offer.
Through this policy, the board of directors seeks to be accountable to all stockholders and respects the rights of stockholders to express their views through their votes for nominees. However, the board of directors also deems it important to preserve sufficient flexibility to make sound evaluations based on the relevant circumstances in the event a nominee fails to receive a majority of the votes cast with respect to such nominee. For example, the board of directors may wish to assess whether the sudden resignation of one or more directors would materially impair the effective functioning of the board of directors. The board of directors’ policy is intended to allow the board of directors to react to situations that could arise if the resignation of multiple
| TWITTER, INC. / 2017 Proxy Statement | 17 | ||
BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
directors would prevent a key committee from achieving a quorum or if a resignation would otherwise impair the functioning of the committee. The policy also would allow the board of directors to assess whether a director was targeted for reasons unrelated to his or her performance as a director at the company. The policy requires that our nominating and corporate governance committee and our board of directors act promptly to consider a director nominee’s resignation.
Full details of our majority voting with director resignation policy for nominees are set forth in our Bylaws and our Corporate Governance Guidelines, available at http://investor.twitterinc.com.
Notwithstanding the foregoing, if the number of nominees exceeds the number of directors to be elected at the end of the applicable notice period set forth in Section 2.4 of Article II of our Bylaws (e.g., a contested election) the majority voting with director resignation policy shall not apply and instead nominees shall be elected by a plurality vote of the shares of our common stock present in person or by proxy at an annual meeting and entitled to vote thereon. A plurality vote means that the nominees who receive the highest number of votes cast “For” are elected as directors. In such an election you may vote “For” or “Withhold” on each of the nominees for election as a director. Abstentions would have no effect on the outcome of this type of election. Brokernon-votes would have no effect on the outcome of this type of election.
BOARD AND COMMITTEE PERFORMANCE EVALUATIONS
Our board of directors and each of its committees conduct annual self-evaluations to determine whether they are functioning effectively and whether any changes are necessary to improve their performance. The nominating and corporate governance committee is responsible for establishing the evaluation criteria and implementing the process for the evaluation. Every year, with the assistance of our outside counsel, we conduct interviews of each director to obtain his or her assessment of the effectiveness of the board of directors and the committees, director performance and board of directors dynamics. The Executive Chairman and our General Counsel then report the results of these interviews at meetings of the nominating and did not act by written consent.corporate governance committee and our board of directors, where the results are discussed. In addition, the chair of each committee guides an annual committee self-evaluation discussion among the committee members. The results of the committee self-evaluations are also reported to our board of directors for review and discussion.
Compensation Committee Interlocks and Insider Participation
None of the members of our compensation committee during the last fiscal year is or has been an officer or employee of our company. None of our executive officers currently serves, or in the past fiscal year has served, as a member of the board of directors or compensation committee (or other board committee performing equivalent functions) of any entity that has one or more of its executive officers serving on our board of directors or compensation committee.
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Considerations in Evaluating Director Nominees
Our nominating and corporate governance committee uses a variety of methods for identifying and evaluating director nominees. In its evaluation of director candidates, our nominating and corporate governance committee will consider the current size and composition of our board of directors and the needs of our board of directors and the respective committees of our board of directors. Some of the qualifications that our nominating and corporate governance committee considers include, without limitation, issues of character, integrity, judgment, diversity of experience, independence, area of expertise, corporate experience, length of service, potential conflicts of interest and other commitments. Nominees must also have the ability to offer advice and guidance to our Chief Executive Officer based on past experience in positions with a high degree of responsibility and be leaders in the companies or institutions with which they are affiliated. Director candidates must have sufficient time available in the judgment of our nominating and corporate governance committee to perform all board of director and committee responsibilities. Members of our board of directors are expected to prepare for, attend, and participate in all board of director and applicable committee meetings. Other than the foregoing, there are no stated minimum criteria for director nominees, although our nominating and corporate governance committee may also consider such other factors as it may deem, from time to time, are in our and our stockholders’ best interests.
Although our board of directors does not maintain a specific policy with respect to board diversity, our board of directors believes that our board of directors should be a diverse body, and our nominating and corporate governance committee considers a broad range of backgrounds and experiences. In making determinations regarding nominations of directors, our nominating and corporate governance committee may take into account the benefits of diverse viewpoints. Our nominating and corporate governance committee also considers these and other factors as it oversees the annual board of director and committee evaluations. After completing its review and evaluation of director candidates, our nominating and corporate governance committee recommends to our full board of directors the director nominees for selection.
In 2014, our Corporate Governance and Nominating Committee retained the services of an executive search firm to assist it in identifying potential new candidates to join our board of directors.
Stockholder Recommendations and Nominations to the Board of Directors
Our nominating and corporate governance committee will consider candidates for director recommended by stockholders holding at least one percent (1%) of the fully diluted capitalization of the company continuously for at least twelve (12) months prior to the date of the submission of the recommendation, so long as such recommendations comply with our amended and restated certificate of incorporation, amended and restated bylawsBylaws and applicable laws, rules and regulations, including those promulgated by the SEC. Our nominating and corporate governance committee will evaluate such recommendations in accordance with its charter, our amended and restated bylaws,Bylaws, our policies and procedures for director candidates, as well as the regular director nominee criteria described above. This process is designed to ensure that our board of directors includes members with diverse backgrounds, skills and experience, including appropriate financial and other expertise relevant to our business. Eligible stockholders wishing to recommend a candidate for nomination should contact our General Counsel or our Legal Department in writing.writing at Twitter, Inc., 1355 Market Street, Suite 900, San Francisco, California 94103. Such recommendations must include information about the candidate, a statement of support by the recommending stockholder, evidence of the recommending stockholder’s ownership of our common stock and a signed letter from the candidate confirming willingness to serve on our board of directors. Our nominating and corporate governance committee has discretion to decide which individuals to recommend for nomination as directors.
Under our bylaws,Bylaws, stockholders may also nominate persons for our board of directors. Any nomination must comply with the requirements set forth in our bylawsBylaws and should be sent in writing to our General Counsel or our Legal Department at Twitter, Inc., 1355 Market Street, Suite 900, San Francisco,
| 18 | TWITTER, INC. / 2017 Proxy Statement |
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BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
Stockholder Recommendations and Nominations to the Board of Directors
California 94103. To be timely for our 20162018 annual meeting of stockholders, our General Counsel or Legal Department must receive the nomination no earlier than February 5, 2016January 22, 2018 and no later than March 6, 2016.
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February 21, 2018.
Communications with the Board of Directors
Interested parties wishing to communicate with our board of directors or with an individual member or members of our board of directors may do so by writing to our board of directors or to the particular member or members of our board of directors, as applicable, and mailing the correspondence to our General Counsel at Twitter, Inc., 1355 Market Street, Suite 900, San Francisco, California 94103.
Each communication should set forth (i) the name and address of the stockholder, as it appears onin our books,records, and if the shares of our common stock are held by a nominee, the name and address of the beneficial owner of such shares, and (ii) the number of shares of our common stock that are owned of record by the record holder and beneficially by the beneficial owner.
Our General Counsel, in consultation with appropriate members of our board of directors as necessary, will review all incoming communications and, if appropriate, all such communications will be forwarded to the appropriate member or members of our board of directors, or if none is specified, to the Executive Chairman of our board of directors.
We regularly monitor developments in the area of corporate governance and review our processes and procedures in light of such developments. As part of those efforts, we review federal laws affecting corporate governance, as well as rules adopted by the SEC and the NYSE. We believe that we have in place corporate governance procedures and practices that are designed to enhance our stockholders’ interests.
Corporate Governance Strengths
We are committed to good corporate governance, which promotes the long-term interests of our stockholders and strengthens our board of directors and management accountability and helps build public trust in Twitter. Highlights of our corporate governance practices include the following:
| ✓ | Over 75% of directors are independent |
| ✓ | Separate CEO and Executive Chairman |
| ✓ | Lead independent director |
| ✓ | Enacted our majority voting with director resignation policy for election of directors as a result of our stockholder outreach requests |
| ✓ | Commitment to board of directors refreshment |
| ✓ | 100% independent committee members |
| ✓ | Succession planning process |
| ✓ | Strict anti-hedging, anti-short sale and anti-pledging policies |
| ✓ | Robust Code of Business Conduct and Ethics and Corporate Governance Guidelines |
| ✓ | Director participation in orientation and continuing education |
| ✓ | Annual board of director and committee self-evaluations |
| ✓ | Robust stockholder outreach program |
| ✓ | Periodic reviews of committee charters, Code of Business Conduct and Ethics and Corporate Governance Guidelines |
| ✓ | Robust director nominee selection process |
| ✓ | Risk oversight by full board and committees |
| ✓ | AnnualSay-on-Pay vote |
| ✓ | Roll-out of performance-based equity incentives |
| TWITTER, INC. / 2017 Proxy Statement | 19 | ||
BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
Corporate Governance Overview
STOCKHOLDER OUTREACH
We believe that effective corporate governance should include regular, constructive conversations with our stockholders. During the past fiscal year, certain members of our board and members of our executive team have continued to engage with stockholders directly. Our board has also directed our management team to seek and encourage feedback from stockholders about our corporate governance practices by conducting additional stockholder outreach and engagement throughout the year. As a result, our management team reached out to our top institutional investors collectively holding approximately 23% of our shares outstanding and met with institutional investors holding approximately 18% of our shares outstanding to discuss our corporate governance and executive compensation programs and to answer questions and elicit feedback. These engagement efforts with our stockholders allowed us to better understand our stockholders’ priorities and perspectives, and provided us with useful input concerning our compensation and corporate governance practices. This effort generated important feedback for our compensation committee and the board of directors, and was taken into account when making decisions regarding compensation changes for our Named Executive Officers’ compensation. It also influenced actions by our board of directors on other corporate governance matters. A summary of the feedback received and the actions taken is set forth below:
WHAT WE HEARD | WHAT WE DID | |
Increase portion of performance-based compensation | We continued to phase in PRSUs for our executive team, including certain of our Named Executive Officers, as more fully described in the section titled “Executive Compensation—Compensation Discussion and Analysis—Executive Summary—Our Investor Outreach Program and Resulting Compensation Changes” | |
Board refreshment and diversity | Appointed four new highly qualified directors to the board of directors during 2016 Doubled the number of diverse directors from 2 in 2015 to 4 in 2016 after these appointments | |
Implement majority voting requirement | Amended our Bylaws and Corporate Governance Guidelines to implement majority voting with a director resignation policy for the Annual Meeting | |
Improve disclosures within the proxy | Provided additional clarity and transparency within the proxy on compensation matters and our corporate governance practices, including: • Thephase in of PRSUs; • Theseparate roles of our Executive Chairman, Chief Executive Officer and Lead Independent Director; • Managementsuccession planning; • Theexperience of our directors and our corporate strengths and policies; and • Ourstockholder engagement process. |
| 20 | TWITTER, INC. / 2017 Proxy Statement |
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BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
Corporate Governance Overview
While we do not expect that we will always be able to address all of our stockholders’ feedback, we seek to optimize our corporate governance by continually refining our relevant policies, procedures and practices to align the needs of the company with evolving regulations and best practices, issues raised by our stockholders, and otherwise as circumstances warrant. We believe that our actions advanced our compensation practices and governance in a manner responsive to the input we received from our stockholders and in a manner appropriate for our company. We will continue to review our compensation and governance practices and engage in significant dialogue with our stockholders going forward.
Corporate Governance Guidelines and Code of Business Conduct and Ethics
Our board of directors has adopted our Corporate Governance Guidelines in October 2013 (as most recently amended and approved by our board of directors in March 2017) that addressaddresses items such as the qualifications and responsibilities of our directors and director candidates and corporate governance policies and standards applicable to us in general. as:
• director qualifications; • director independence; • director responsibilities; • executive sessions and leadership roles; • conflicts of interest; • board of directors committees; • director access to management and advisors; • director compensation; | • director orientation and continuing education; • leadership development and succession planning; • CEO evaluation; • stockholder communications with the board of directors; and • performance evaluation of the board of directors and its committees. |
In addition, our board of directors has adopted aour Code of Business Conduct and Ethics thatin October 2013 (as most recently amended and approved by our board of directors in October 2016) which applies to all of our employees, officers and directors, including our Chief Executive Officer, Chief Financial Officer, Chief Operating Officer, and other executive and senior financial officers. officers, that addresses items such as:
• our core values; • corporate opportunities; • fair dealing; • compliance with laws and policies; | • protection and use of assets and intellectual property; • public communications and financial reporting; |
• confidentiality; • financial integrity and responsibility; | • reporting violations of law and policies; • accountability; and • no retaliation. |
The full text of our Corporate Governance Guidelines and our Code of Business Conduct and Ethics is posted on the Corporate Governance portion of our website at http://investor.twitterinc.com/. We will post any amendments to our Corporate Governance Guidelines, Code of Business Conduct and Ethics orand any waivers of our Code of Business Conduct and Ethics for directors and executive officers on the same website.
Risk is inherent with every business, and we face a number of risks, including strategic, financial, business and operational, legal and compliance, and reputational. We have designed and implemented processes to manage risk in our operations.such risks. Management is responsible for theday-to-day management of risks the company faces, while our board of directors, as a whole and assisted by its committees, has responsibility for the oversight of risk management. In its risk oversight role, our board of directors has the responsibility to satisfy itself that the risk management processes designed and implemented by management are appropriate and functioning as designed.
Our board of directors believes that open communication between management and our board of directors is essential for effective risk management and oversight. Our board of directors meets with our Chief Executive Officer and other members of the senior management team at quarterly meetings of our board of directors, where, among other topics, they discuss strategy and risks facing the company, as well at such other times as they deemed appropriate.
| TWITTER, INC. / 2017 Proxy Statement | 21 | ||
BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
Risk Management
While our board of directors is ultimately responsible for risk oversight, our board committees assist our board of directors in fulfilling its oversight responsibilities in certain areas of risk. Our audit committee assists our board of directors in fulfilling its oversight responsibilities with respect to risk, management in the areas of internal control over financial reporting and disclosure controls and procedures, legal and regulatory compliance, and discusses with management and the independent auditor guidelines and policies with respect to risk assessment and risk management. Our audit committee also reviews our major financial risk exposures and the steps management has taken to monitor and control these exposures. Our audit committee also monitors certain key risks on a regular basis throughout the fiscal year, such as risk associated with internal control over financial reporting and liquidity risk. Our nominating and corporate governance committee assists our board of directors in fulfilling its oversight responsibilities with respect to the management of risk associated with board organization, membership and structure, and corporate governance. Our compensation committee assesses risks created by the incentives inherent in our compensation policies. Finally,summarized below. In addition, our full board of directors reviews strategic and operational risk in the context of reports from the management team, receives reports on all significant committee activities at each regular meeting, and evaluates the risks inherent in significant transactions.
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BOARD/COMMITTEE | PRIMARY AREAS OF RISK OVERSIGHT | |
Full Board of Directors | Strategic, financial, business and operational, legal and compliance, and reputational risks and exposures associated with our business strategy, cyber security, privacy, product innovation and product road map, policy matters, significant litigation and regulatory exposures, significant transactions and other current matters that may present material risk to our financial performance, operations, infrastructure, plans, prospects or reputation, acquisitions and divestitures. | |
Audit Committee | Risks and exposures associated with financial matters, particularly financial reporting, disclosure controls and procedures, legal and regulatory compliance, financial risk exposures, liquidity risk, tax, accounting, disclosure, internal control over financial reporting, investment guidelines and credit matters, our programs and policies relating to legal compliance and strategy, and our operational infrastructure, particularly reliability, business continuity and capacity. Discussions with management and the independent auditor, guidelines and policies with respect to risk assessment and risk management. | |
Compensation Committee | Risks and exposures associated with leadership assessment, executive compensation programs and arrangements, including overall incentive and equity plans. | |
Nominating and Corporate Governance Committee | Risks and exposures associated with board organization, membership and structure, succession planning, corporate governance and overall board effectiveness. |
Management Succession Planning
Our board of directors believes that the directors and the Chief Executive Officer, should collaborate on succession planning and that the entire board should be involved in the critical aspects of the succession planning process, including establishing selection criteria that reflect our business strategies, identifying and evaluating potential internal candidates, reviewing the company’s leadership pipeline and talent strategies, and making management succession decisions. Management succession is discussed by the directors in board of directors meetings and in executive sessions of the board of directors.
The nominating and corporate governance committee has the primary responsibility to develop succession plans for the company’s management team, which it then presents and makes recommendations on to the full board of directors. Our board of directors’ and our nominating and corporate governance committee’s involvement in our annual succession planning process is outlined in our Corporate Governance Guidelines and the charter of our nominating and corporate governance committee available at http://investor.twitterinc.com.
Directors become familiar with potential successors for management positions through various means, including the comprehensive annual talent review further described below, board dinners and presentations and informal meetings.
| 22 | TWITTER, INC. / 2017 Proxy Statement |
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BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
Management Succession Planning
KEY OFFICER SUCCESSION PLANNING
In light of the critical importance of executive leadership to our success, we have a succession planning process. This process is focused on key leaders, including our Chief Executive Officer. Periodically, the full board of directors reviews these succession plans and any findings and recommendations as to succession in the event of each key officer’s termination of employment for any reason (including death or disability).
CEO SUCCESSION PLANNING
Our Chief Executive Officer provides an annual review to the board of directors assessing our key officers and their potential. This review includes a discussion about development plans for the company’s key officers to help prepare them for future succession, contingency plans and our Chief Executive Officer’s recommendation as to his successor.
In December 2013, our board of directors, upon the recommendation of our compensation committee, adopted our Outside Director Compensation Policy for the compensation of ournon-employee directors. Our non-employeenon- employee directors will receive compensation in the form of equity granted under the terms of our 2013 Equity Incentive Plan (the “2013 Plan”) and cash, as described below:below.
Equity CompensationDirectors may be reimbursed for their reasonable expenses for attending board and committee meetings. Directors who are also our employees receive no compensation for their service as directors.
During 2016, only Mr. Dorsey and Mr. Kordestani were employees. See the section titled “Executive Compensation” for additional information about their compensation.
. EQUITY COMPENSATION
On the date of each annual meeting of stockholders, each of ournon-employee directors is granted restricted stock units (“RSUs”) having a grant date fair value equal to $225,000, computed in accordance with FASB ASCFinancial Accounting
Standards Board (“FASB”), Accounting Standards Codification (“ASC”), Topic 718. The shares of our common stock underlying the RSUs vest in quarterly installments beginning the first quarter following the date of grant (on the same day of the month as the date of grant) but will vest in full on the date of the next annual meeting of stockholders if not fully vested on such date, subject to continued service through each vesting date. If, as
To date, allnon-employee directors who held unvested equity awards would have been subject to accelerated vesting if their services had been terminated in connection with a change of the date of an annual meeting of stockholders, one of our non-employee directors holds an equity award to acquire shares of our common stock that is not fully vested, the value of the new RSUs granted at such annual meeting of stockholders to such non-employee director will be reduced in accordance with the terms of our Outside Director Compensation Policy.control.
CASH COMPENSATION
Cash Compensation. Each of ournon-employee directors receives a quarterly fee of $12,500 in cash for serving on our board of directors. In addition, members of the three standing committees of our board of directors are entitled to the following quarterly cash fees:
Board Committee |
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Audit Committee |
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Compensation Committee |
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| $2,500 |
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Nominating and Corporate Governance Committee |
| $3,750 |
| $2,500 |
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However, if a non-employee director held unvested equity awards with respect to shares of our common stock that were outstanding as of December 2, 2013, such director is not entitled to cash fees until the first month after he or she is fully vested in such equity awards.
BOARD COMMITTEE
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CHAIRPERSON FEE
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MEMBER FEE
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Audit Committee
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$7,500
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$2,500
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Compensation Committee
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$5,000
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$2,500
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Nominating and Corporate Governance Committee
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Ournon-employee directors may elect to receive any cash fees that they would otherwise be entitled to receive under our Outside Director Compensation Policy in the form of additional RSUs. Such election must be made no later than two weeks prior to the date of the annual meeting of stockholders on which the annual grant of RSUs described above will be made and the value of the RSUs granted at such annual meeting of stockholders will be increased by the amount of fees that would have otherwise been paid in cash.
Our 2013 Plan contains maximum limits on the size of the equity awards that can be granted to each of our non-employeenon- employee directors in any fiscal year, but those maximum limits do not reflect the intended size of any potential grants or a commitment to make any equity award grants to ournon-employee directors in the future.
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| TWITTER, INC. / 2017 Proxy Statement | 23 | ||
BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
Director Compensation
Compensation for 2014
COMPENSATION FOR 2016
The following table provides information regarding the total compensation that was earned by each of ournon-employee directors in 2014.2016.
Director |
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Jack Dorsey (2) |
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| — |
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| — |
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| — |
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Peter Chernin (3) |
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| — |
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| — |
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| — |
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Peter Currie (4) |
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| 39,583 |
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| 93,750 |
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| 133,333 |
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Peter Fenton |
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| 80,000 |
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| 225,000 |
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| 305,000 |
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David Rosenblatt (5) |
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| 23,333 |
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| 75,000 |
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| 98,333 |
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Marjorie Scardino (6) |
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| 20,000 |
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| 75,000 |
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| 95,000 |
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Evan Williams |
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| 50,000 |
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| 225,000 |
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| 275,000 |
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DIRECTOR
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FEES EARNED
| STOCK
| TOTAL
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Peter Fenton (2)
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—
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305,000
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305,000
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Marjorie Scardino (3)
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70,000
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225,000
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295,000
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Bret Taylor (4)
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45,833
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206,250
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252,083
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Martha Lane Fox (5)
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50,000
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225,000
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275,000
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David Rosenblatt (6)
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70,000
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225,000
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295,000
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Evan Williams
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275,000
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—
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275,000
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Debra Lee (7)
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65,000
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225,000
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290,000
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Hugh Johnston (8)
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—
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305,000
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305,000
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Peter Currie (9)
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—
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—
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—
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Peter Chernin (10)
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—
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—
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—
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(1) | The amounts reported represent the total value of RSUs earned pursuant to our Outside Director Compensation Policy. Such value does not take into account any estimated forfeitures related to service-based vesting conditions. The |
| As of December 31, |
(3) | As of December 31, |
(4) | As of December 31, |
(5) | As of December 31, |
| (6) | As of December 31, 2016, Mr. Rosenblatt held 7,807 RSUs which vest in quarterly installments such that the RSUs will vest in full on the earlier of the date of our Annual Meeting or May 25, 2017, subject to continued service through each such vesting date. As of December 31, 2016, Mr. Rosenblatt held an option to purchase a total of |
| As of December 31, |
| (8) | As of December 31, |
| (9) | Mr. Currie did not stand forre-election at the 2016 annual meeting of stockholders held on May 25, 2016. |
| (10) | Mr. Chernin did not stand forre-election at the 2016 annual meeting of stockholders held on May 25, 2016. |
| 24 | TWITTER, INC. / 2017 Proxy Statement |
| ||
Directors may be reimbursed for their reasonable expenses for attending board and committee meetings. Directors who are also our employees receive no additional compensation for their service as directors. During 2014, only Mr. Costolo was an employee. See the section titled “Executive Compensation” for additional information about his compensation.
-15-
ELECTION OF DIRECTORS
ELECTION OF DIRECTORS
Our board of directors is currently composed of eightten members. In accordance with our amended and restated certificate of incorporation, our board of directors is divided into three staggered classes of directors. At the Annual Meeting, twothree Class III directors will be elected for a three-yearthree- year term to succeed the same class whose term is then expiring.
Each director’s term continues until the election and qualification of his or her successor, or such director’s earlier death, resignation, or removal. Any increase or decrease inFollowing the Annual Meeting, we expect to reduce the number of authorized directors will be distributed amongto nine to eliminate the three classes so that, as nearly as possible, each class will consistvacancy resulting following the expiration of one-thirdthe term of our directors. This classification of our board of directors may have the effect of delaying or preventing changes in control of our company.Mr. Fenton.
Our nominating and corporate governance committee has recommended, and our board of directors has approved, David RosenblattOmid R. Kordestani, Marjorie Scardino and Evan WilliamsBret Taylor as nominees for election as Class III directors at the Annual Meeting. If elected, each of Messrs. RosenblattKordestani and WilliamsTaylor and Ms. Scardino will serve as Class III directors until our 20182020 annual meeting of stockholders and until their successors are duly elected and qualified.qualified, or until their earlier death, resignation, or removal. Each of the nominees is currently a director of our company.company; however, Mr. Taylor is standing for election by stockholders for the first time. For information concerning the nominees, please see the section titled “Board of Directors and Corporate Governance.”
If you are a stockholder of record and you sign your proxy card or vote by telephone or over the Internet but do not give instructions with respect to the voting of directors, your shares will be voted “FOR” the election of Messrs. RosenblattKordestani and Williams.Taylor and Ms. Scardino. We expect that each of Messrs. RosenblattKordestani and WilliamsTaylor and Ms. Scardino will accept such nomination; however, in the event that a director nominee is unable or declines to serve as a director at the time of the Annual Meeting, the proxies will be voted for any nominee designated by our board of directors to fill such vacancy. If you are a street name stockholder and you do not give voting instructions to your broker, bank or nominee, your broker, bank or other nominee will leave your shares unvoted on this matter.
Our Bylaws provide for majority voting and our Corporate Governance Guidelines set forth the related director resignation policy for our director nominees. Our Bylaws state that to be elected in an uncontested election, a nominee must receive a majority of the votes cast with respect to such nominee (e.g., the number of shares voted “For” a nominee must exceed the number of shares voted “Against” for that nominee). Abstentions will have no effect on the outcome of this proposal. Brokernon-votes will have no effect on the outcome of this proposal.
Under our Corporate Governance Guidelines, each nominee submits, in advance of their nomination, an irrevocable resignation that will become effective if (i) the nominee fails to receive the required vote at the Annual Meeting and (ii) the board of directors accepts the resignation. The nominating and corporate governance committee promptly considers whether to accept the resignation of any nominee who fails to receive the required number of votes for election and submits such recommendation for consideration by the board of directors. In deciding whether to accept or reject the resignation, the nominating and corporate governance committee and the board of directors will consider any factors they deem relevant. Any nominee who tenders his or her resignation pursuant to our Corporate Governance Guidelines may not participate in the nominating and corporate governance committee recommendation or board of directors action regarding whether to accept the resignation offer.
Through this policy, the board of directors seeks to be accountable to all stockholders and respects the rights of stockholders to express their views through their votes for nominees. However, the board of directors also deems it important to preserve sufficient flexibility to make sound evaluations based on the relevant circumstances in the event a nominee fails to receive a majority of the votes cast with respect to such nominee. For example, the board of directors may wish to assess whether the sudden resignation of one or more directors would materially impair the effective functioning of the board of directors. The board of directors’ policy is intended to allow the board of directors to react to situations that could arise if the resignation of multiple directors would prevent a key committee from achieving a quorum or if a resignation would otherwise impair the functioning of the committee. The policy also would allow the board of directors to assess whether a director was targeted for reasons unrelated to his or her performance as a director
| TWITTER, INC. / 2017 Proxy Statement | 25 | ||
PROPOSAL NO. 1 ELECTION OF DIRECTORS
at the company. The policy requires that our nominating and corporate governance committee and our board of directors act promptly to consider a director nominee’s resignation.
Full details of our majority voting with director resignation policy for nominees are set forth in our Bylaws and our Corporate Governance Guidelines, available at http://investor.twitterinc.com.
Notwithstanding the foregoing, if the number of nominees exceeds the number of directors to be elected at the end of the applicable notice period set forth in Section 2.4 of Article II of our Bylaws (e.g., a contested election) the majority voting with director resignation policy shall not apply and instead nominees shall be elected by a plurality vote of the shares of our common stock present in person or by proxy at an annual meeting and entitled to vote thereon. The election of directors at the Annual Meeting is not a contested election, and therefore majority voting will apply.
THE BOARD OF DIRECTORS
RECOMMENDS A VOTE “FOR”
EACH OF THE NOMINEES
NAMED ABOVE.
| 26 | TWITTER, INC. / 2017 Proxy Statement |
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PROPOSAL NO. 2 ADVISORY VOTE ON NAMED
EXECUTIVE OFFICER COMPENSATION
ADVISORY VOTE ON NAMED EXECUTIVE OFFICER COMPENSATION
The Dodd-Frank Act and Section 14A of the Exchange Act enable our stockholders to approve, on an advisory, ornon-binding, basis the compensation of our named executive officers as disclosed pursuant to Section 14A of the Exchange Act. This proposal, commonly known as a“Say-on-Pay” proposal, gives our stockholders the opportunity to express their views on our named executive officers’ compensation as a whole. This vote is not intended to address any specific item of compensation or any specific named executive officer, but rather the overall compensation of all of our named executive officers and the philosophy, policies and practices described in this proxy statement. We currently hold ourSay-on-Pay vote every year.
TheSay-on-Pay vote is advisory, and therefore is not binding on us, our board of directors or our compensation committee. TheSay-on-Pay vote will, however, provide information to us regarding investor sentiment about our executive compensation philosophy, policies and practices, which the compensation committee will be able to consider when determining executive compensation for the remainder of the current fiscal year and beyond. Our board of directors and our compensation committee value the opinions of our stockholders and to the extent there is any significant vote against the named executive officer compensation as disclosed in this proxy statement, we will endeavor to communicate with stockholders to better understand the concerns that influenced the vote, consider our stockholders’ concerns and the compensation committee will evaluate whether any actions are necessary to address those concerns.
We believe that the information provided in the “Executive Compensation” section of this proxy statement, and in particular the information discussed in “Executive Compensation—Compensation Discussion and Analysis” below, demonstrates that our executive compensation program was designed appropriately and is working to ensure management’s interests are aligned with our stockholders’ interests to support long-term value creation. Accordingly, we ask our stockholders to vote “FOR” the following resolution at the Annual Meeting:
“RESOLVED, that the stockholders approve, on an advisory basis, the compensation paid to the named executive officers, as disclosed in the proxy statement for the Annual Meeting pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the compensation discussion and analysis, compensation tables and narrative discussion, and other related disclosure.”
The approval, on an advisory basis, of theSay-on-Payrequires the affirmative vote of a plurality votemajority of the shares of our common stock present in person or by proxy at the Annual Meeting and entitled to vote thereon to be approved. Broker thereon. Abstentions will have the effect of a vote AGAINST the proposal and brokernon-votes will have no effect on this proposal.effect.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR”
EACH OF THE NOMINEES NAMED ABOVE.
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ADVISORY VOTE ON THE FREQUENCY OF
FUTURE ADVISORY VOTES ON NAMED EXECUTIVE OFFICER COMPENSATION
The Dodd-Frank Act and Section 14A ofAlthough the Exchange Act enablevote isnon-binding, our stockholders to indicate their preference at least once every six years regarding how frequently we should solicit a non-binding advisory vote on the compensation of our named executive officers as disclosed in our proxy statement. Accordingly, we are asking our stockholders to indicate whether they would prefer an advisory vote every one, two or three years. Alternatively, stockholders may abstain from casting a vote.
After considering the benefits and consequences of each alternative, our board of directors recommends that the advisory vote on the compensation of our named executive officers be submitted to the stockholders every yearand expects that the first such advisory vote will be held at our 2016 annual meeting of stockholders. In formulating its recommendation, our board of directors considered that compensation decisions are made annually and that an annual advisory vote on executive compensation will allow stockholders to provide more frequent and direct input on our compensation philosophy, policies and practices.
Vote Required
The alternative among one year, two years or three years that receives the highest number of votes from the holders of shares of our common stock present in person or by proxy and entitled to vote at the Annual Meeting will be deemed to be the frequency preferred by our stockholders. Abstentions and broker non-votes will have no effect on this proposal.
While our board of directors believes that its recommendation is appropriate at this time, the stockholders are not voting to approve or disapprove that recommendation, but are instead asked to indicate their preference, on an advisory basis, as to whether the non-binding advisory vote on the approval of our named executive officer compensation should be held every year, two years or three years.
Our board of directors and our compensation committee value the opinions of our stockholders in this matter and, to the extent there is any significant vote against the named executive officer compensation as disclosed in favor of one time period over another,this proxy statement, we will take into accountendeavor to communicate with stockholders to better understand the outcome of thisconcerns that influenced the vote, when making future decisions regarding the frequency of holding future advisory votes onconsider our stockholders’ concerns and the compensation of our named executive officers. However, because this is an advisory vote and therefore not binding on our board of directors or our company, our board of directors may decide that it is in the best interests of our stockholders that we hold an advisory vote on the compensation of our named executive officers more or less frequently than the option preferred by our stockholders. The results of the votecommittee will not be construedevaluate whether any actions are necessary to create or imply any change or addition to the fiduciary duties of our board of directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE TO HOLD FUTURE ADVISORY VOTES ON NAMED EXECUTIVEOFFICER COMPENSATION EVERY “ONE YEAR”address those concerns.
THE BOARD OF DIRECTORS
RECOMMENDS A VOTE “FOR”
THE APPROVAL, ON AN
ADVISORY BASIS, OF OUR
NAMED EXECUTIVE OFFICER
COMPENSATION.
| TWITTER, INC. / 2017 Proxy Statement | 27 | ||
PROPOSAL NO. 3 RATIFICATION OF APPOINTMENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
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RATIFICATION OF APPOINTMENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Our audit committee has appointed PricewaterhouseCoopers LLP (“PwC”), an as our independent registered public accounting firm, to audit our consolidated financial statements for our fiscal year ending December 31, 2015.2017. During our fiscal yearyears ended December 31, 2014,2016 and December 31, 2015, PwC served as our independent registered public accounting firm.
At the Annual Meeting, our stockholders are being asked to ratify the appointment of PwC as our independent registered public accounting firm for our fiscal year ending December 31, 2017. Our audit committee is submitting the appointment of PwC to our stockholders because we value our stockholders’ views on our independent registered public accounting firm and as a matter of good corporate governance. Notwithstanding the appointment of PwC and even if our stockholders ratify the appointment, our audit committee, in its discretion, may appoint another independent registered public accounting firm at any time during our fiscal year if our audit committee believes that such a change would be in the best interests of our company and our stockholders. At the Annual Meeting, our stockholders are being asked to ratify the appointment of PwC as our independent registered public accounting firm for our fiscal year ending December 31, 2015. Our audit committee is submitting the appointment of PwC to our stockholders because we value our stockholders’ views on our independent registered public accounting firm and as a matter of good corporate governance. Representatives of PwC will be present at the Annual Meeting, and they will have an opportunity to make a statement and will be available to respond to appropriate questions from our stockholders.
If our stockholders do not ratify the appointment of PwC, our board of directors may reconsider the appointment.
Fees Paid to the Independent Registered Public Accounting Firm
The following table presents fees for professional audit services and other services rendered to our company by PwC for our fiscal years ended December 31, 20132015 and 2014.2016.
|
| 2013 |
|
| 2014 |
| ||
|
| (In Thousands) |
| |||||
Audit Fees (1) |
| $ | 3,495 |
|
| $ | 4,212 |
|
Audit-Related Fees (2) |
| $ | 733 |
|
| $ | 514 |
|
Tax Fees (3) |
| $ | 574 |
|
| $ | 773 |
|
All Other Fees (4) |
| $ | 179 |
|
| $ | 9 |
|
Total Fees |
| $ | 4,981 |
|
| $ | 5,508 |
|
2015
|
2016
| |||||||||
(IN THOUSANDS)
| ||||||||||
| Audit Fees (1) | $ | 4,976 | $ | 5,630 | ||||||
| Audit-Related Fees (2) | $ | 726 | $ | 395 | ||||||
| Tax Fees (3) | $ | 1,397 | $ | 1,692 | ||||||
| All Other Fees (4) | $ | 35 | $ | 18 | ||||||
| Total Fees | $ | 7,134 | $ | 7,735 | ||||||
|
|
|
| |||||||
(1) | Audit Fees consist of fees for professional services rendered in connection with the audit of our annual consolidated financial statements, including audited financial statements presented in our Annual Report on Form10-K and services that are normally provided by the independent registered public |
(2) | Audit-Related Fees consist of fees for professional services for assurance and related services that are reasonably related to the performance of the audit or review of our consolidated financial statements and are not reported under “Audit Fees.” These services include accounting consultations concerning financial accounting and reporting standards, due diligence procedures in connection with |
(3) | Tax Fees consist of fees for professional services for tax compliance, tax advice and tax planning. These services include consultation on tax matters and assistance regarding federal, state and international tax compliance. |
(4) | All Other Fees consist of fees for permitted products and services other than those that meet the criteria above. |
In our fiscal year ended December 31, 2014,2016, there were no other professional services provided by PwC, other than those listed above, that would have required our audit committee to consider their compatibility with maintaining the independence of PwC.
Audit Committee Policy onPre-Approval of Audit and PermissibleNon-Audit Services of Independent Registered Public Accounting Firm
Our audit committee has established a policy governing our use of the services of our independent registered public accounting firm. Under this policy, our audit committee is required topre-approve all audit andnon-audit
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services performed by our independent registered public accounting firm in order to ensure that the provision of such services does not impair the public accountants’ independence. All services provided by PwC for our fiscal years ended December 31, 20132015 and 20142016 werepre-approved by our audit committee.committee in accordance with this policy.
| 28 | TWITTER, INC. / 2017 Proxy Statement |
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PROPOSAL NO. 3 RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The ratification of the appointment of PwC as our independent registered public accounting firm requires the affirmative vote of a majority of the shares of our common stock present in person or by proxy at the Annual Meeting and entitled to vote thereon. Abstentions will have the effect of a vote AGAINST the proposal and brokernon-votes will have no effect.
THE BOARD OF DIRECTORS
RECOMMENDS A VOTE “FOR”
THE RATIFICATION OF THE
APPOINTMENT OF
PRICEWATERHOUSECOOPERS
LLP.
| TWITTER, INC. / 2017 Proxy Statement | 29 | ||
STOCKHOLDER PROPOSALS
Proposal No. 4 is a proposal we received from two of our stockholders, James McRitchie (lead filer) and Steffen Sauerteig(co-filer). If Messrs. McRitchie or Sauerteig, the proponents of this proposal, or their representatives who are qualified under state law, are present at our Annual Meeting and submit the proposal for a vote, then the proposal will be voted upon. Proposal No. 4, including supporting statements, is included exactly as submitted to us by Messrs. McRitchie
and Sauerteig, the proponents of the proposal. The board of directors’ recommendation on the proposal is presented in our statement of opposition to the proposal. We will promptly provide you with the address, and, to our knowledge, the number of voting securities held by Messrs. McRitchie and Sauerteig, the proponents of Proposal No. 4, upon receiving a written or oral request directed to: Twitter, Inc. 1355 Market Street, Suite 900, San Francisco, California 94103, Attention: Investor Relations.
| 30 | TWITTER, INC. / 2017 Proxy Statement |
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PROPOSAL NO. 4 STOCKHOLDER PROPOSAL
REGARDING A REPORT ON USERS OWNING THE
TWITTER PLATFORM
STOCKHOLDER PROPOSAL REGARDING A
REPORT ON USERS OWNING THE TWITTER
PLATFORM
Supporting Statement by Stockholder Proponent
Proposal 4—Exit to Democratic User Ownership
As Twitter users and stockholders, we see how vital the platform is for global media. We are among millions of users that value Twitter as a platform for democratic voice. And in 2016, we’ve seen Twitter’s future in the balance, from challenges of hate speech and abuse to the prospect of a buyout.
That is why we want the company to consider more fully aligning its future with those whose participation make it so valuable: its users. As of today, 3,300 individuals signed a petition athttp://wearetwitter.global urging Twitter to build democratic user ownership.
For successful enterprises like the Green Bay Packers, REI, and the Associated Press, their popularity, resilience, and profitability is a result of their ownership structure. Examples of online companies include successful startups like Managed by Q, which allocates equity to office cleaners, and Stocksys United, a stock-photo platform owned by its photographers.
We believe these models point the way forward for Twitter, Inc., overcoming challenges to thrive as a cooperative platform.
A community-owned Twitter could result in new and reliable revenue streams, since we, as users, could buy in asco-owners, with a stake in the platform’s success. Without the short-term pressure of the stock markets, we can realize Twitter’s potential value, which the current business model has struggled to do for many years. We could set more transparent accountable rules for handling abuse. We couldre-open the platform’s data to spur innovation. Overall, we’d all be invested in Twitter’s success and sustainability. Such a conversion could also ensure a fairer return for the company’s existing investors than other options, Therefore,
RESOLVED: Stockholders request that Twitter, Inc. engage consultants with significant experience in corporate governance, preferably including conversion of companies to
cooperatives or employee ownership, to prepare a report on the nature and feasibility of selling the platform to its users via a cooperative or similar structure with broad-based ownership and accountability mechanisms. The requested report shall be available to stockholders and investors by October 1, 2017, prepared at reasonable cost and omitting proprietary information.
Vote for Exit to Democratic User Ownership—Proposal 4
The Company’s Statement of Opposition
Our board of directors has considered the proposal that Twitter engage consultants “to prepare a report on the nature and feasibility of selling the platform to its users via a cooperative or similar structure” and, for the reasons described below, believes that the proposal is not in the best interests of Twitter and our stockholders.
Our board of directors and management are constantly seeking to maximize long-term stockholder value and do so by evaluating all opportunities to strengthen and focus our business. For example, in 2016, we focused on positioning Twitter for long-term sustainable growth and making progress toward profitability under accounting principles generally accepted in the United States of America (“GAAP”). Specifically, we clearly identified who we are—the best and fastest place to see what’s happening in the world and what people are talking about. We built and shipped product features that directly improved our key audience growth and engagement metrics. We also simplified the organization to be what we believe is more focused and efficient, and eliminated investment innon-core areas of our business, like Vine, which we shut down in early 2017, and Fabric, which we sold in early 2017. As a result of this focus, we saw accelerating rates of growth on a year-over-year basis for daily active usage for three quarters in a row.
We believe that preparing a report on the nature and feasibility of selling the “platform,” and doing so only to “its users,” would be a misallocation of resources and a distraction to our board of directors and management—resources and management time that could otherwise be used to build the long-term value of Twitter. The proposal would have Twitter explore the sale of the “platform” to one specific group of people, “its users”, “via a cooperative or similar structure.” The proposal has pinpointed a very specific type of transaction and ownership structure and the board of directors does not believe that the course of action suggested in the proposal would enhance the value of the
| TWITTER, INC. / 2017 Proxy Statement | 31 | ||
PROPOSAL NO. 4 STOCKHOLDER PROPOSAL REGARDING A REPORT ON USERS OWNING THE
TWITTER PLATFORM
“platform” or Twitter. Further, limiting exploration of strategic transactions that may enhance stockholder value to one narrow option would not be in accordance with the board of directors’ responsibilities to take actions that are in the best interests of Twitter and its stockholders. We believe Twitter is on track to continue building on the long-term value of Twitter for all of our stockholders as a publicly held corporation and not as a “cooperative or similar structure” owned solely by “its users”. As a publicly traded company, our users are also free to become stockholders of Twitter without any need to change the structure of the company.
For the foregoing reasons, our board of directors believes that this proposal is not in the best interests of Twitter or our stockholders, and unanimously recommends that you vote “AGAINST” this proposal.
The approval of the stockholder proposal regarding a report on users owning the Twitter platform requires the affirmative vote of a majority of the shares of our common stock present in person or by proxy at the Annual Meeting and entitled to vote thereon. Abstentions will have the effect of a vote AGAINST the proposal and brokernon-votes will have no effect.
THE BOARD OF DIRECTORS
RECOMMENDS A VOTE
“AGAINST” THE STOCKHOLDER
PROPOSAL REGARDING A
REPORT ON USERS OWNING THE
TWITTER PLATFORM
| 32 | TWITTER, INC. / 2017 Proxy Statement |
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REPORT OF THE AUDIT COMMITTEE
The audit committee is a committee of the board of directors comprised solely of independent directors as required by the listing standards of the New York Stock ExchangeNYSE and rules and regulations of the SEC. The audit committee operates under a written charter approved by Twitter’s board of directors, which is available on Twitter’s web site at http://investor.twitterinc.com. The composition of the audit committee, the attributes of its members and the responsibilities of the audit committee, as reflected in its charter, are intended to be in accordance with applicable requirements for corporate audit committees. The audit committee reviews and assesses the adequacy of its charter and the audit committee’s performance on an annual basis.
With respect to Twitter’s financial reporting process, Twitter’s management is responsible for (1) establishing and maintaining internal controls and (2) preparing Twitter’s consolidated financial statements. Twitter’s independent registered public accounting firm, PricewaterhouseCoopers LLP (“PwC”), is responsible for performing an independent audit of Twitter’s consolidated financial statements and starting in 2014, of Twitter’s internal control over financial reporting in accordance with the auditing standards of the Public Company Accounting Oversight Board (United States) and to issue a report thereon. It is the responsibility of the audit committee to oversee these activities. It is not the responsibility of the audit committee to prepare Twitter’s financial statements. TheseThose are the fundamental responsibilities of management. In the performance of its oversight function, the audit committee has:
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Based on the audit committee’s review and discussions with management and PwC, the audit committee recommended to the board of directors that the audited financial statements be included in the Annual Report on Form10-K for the fiscal year ended December 31, 20142016 for filing with the Securities and Exchange Commission.Commission (“SEC”).
Respectfully submitted by the members of the audit committee of the board of directors:
Peter CurrieHugh Johnston (Chair)
Peter Fenton
Marjorie Scardino
Martha Lane Fox
This report of the audit committee is required by the Securities and Exchange Commission (“SEC”)SEC and, in accordance with the SEC’s rules, will not be deemed to be part of or incorporated by reference by any general statement incorporating by reference this proxy statement into any filing under the Securities Act of 1933, as amended (“Securities Act”), or under the Securities Exchange Act of 1934, as amended (“Exchange Act”), except to the extent that we specifically incorporate this information by reference, and will not otherwise be deemed “soliciting material” or “filed” under either the Securities Act or the Exchange Act.
| TWITTER, INC. / 2017 Proxy Statement | 33 | ||
-20-
The following table identifies certain information about our executive officers as of March 31, 2015.2017. Our executive officers are appointed by, and serve at the discretion of, our board of directors. There are no family relationships among any of our directors or executive officers.
NAME |
AGE |
|
|
| |
| |||||
Jack Dorsey
|
| Chief Executive Officer and Director | |||
|
|
| Executive Chairman
| ||
Anthony Noto | 48 | Chief Financial Officer and Chief Operating Officer | |||
| |||||
Vijaya Gadde
|
| 42
|
| ||
|
| General Counsel and Secretary | |||
|
|
|
| ||
|
|
| |||
Richard Costolo
Jack Dorseyis one of our founders and has served as our Chief Executive Officer since October 2010September 2015 and as a member of our board of directors since September 2009. From September 2009 to October 2010,May 2007. Mr. CostoloDorsey served as our interim Chief Operating Officer. From JuneExecutive Officer from July 2015 to September 2015 and as our President and Chief Executive Officer from May 2007 to JuneOctober 2008. Mr. Dorsey served as the Chairperson of our board of directors from October 2008 to September 2015. Since February 2009, Mr. CostoloDorsey has served as Group Product Manager at GoogleCo-Founder and Chief Executive Officer of Square, Inc., a provider of Internet-related productspayment processing services. Mr. Dorsey currently serves on the boards of directors of The Walt Disney Company and services. From October 2003 to May 2007, Mr. CostoloSquare, Inc.
Omid R. Kordestanihas served as Co-Founderthe Executive Chairman of our board of directors since October 2015. From August 2014 to August 2015, Mr. Kordestani served as Senior Vice President and Chief ExecutiveBusiness Officer at Google Inc. From May 1999 to April 2009, Mr. Kordestani served as Senior Vice President of FeedBurner,Global Sales and Business Development at Google Inc., an RSS subscription feed provider, which was acquired by Google From 1995 to 1999, Mr. Kordestani served as Vice President of Business Development at Netscape Communications Corporation. Prior to joining Netscape Communications Corporation, Mr. Kordestani held positions in 2007.business development, product management and marketing at The 3DO Company, Go Corporation and Hewlett-Packard Company. Mr. CostoloKordestani holds a B.S. in Computer ScienceElectrical Engineering from theSan Jose State University of Michigan, Ann Arbor.and an M.B.A. from Stanford University.
Anthony Notohas served as our Chief Financial Officer since August 2014 and as our Chief Operating Officer since November 2016. Mr. Noto served asCo-Head of Goldman Sachs’ Technology, Media and Telecom Investment Banking group from September 2011 to May 2014. From October 2010 to June 2014, Mr. Noto served as a Managing Director in the Technology, Media and Telecom Investment Banking Group at Goldman, Sachs & Co. Mr. Noto served as Co-Head of Goldman Sachs’ Technology, Media and Telecom Investment Banking group from September 2011 to May 2014. From February 2008 to September 2010, Mr. Noto served as the CFO of the National Football League. Mr. Noto holds a B.S. in Mechanical Engineering from the United States Military Academy and a M.B.A. from the Wharton School of the University of Pennsylvania.
Adam Bain has served as our President, Global Revenue & Partnerships since September 2010. From September 1999 to September 2010, Mr. Bain served in several roles at News Corporation, a diversified media company, including as Executive Vice President of Products & Technology and as President of its advertising arm, Fox Audience Network, Inc. Mr. Bain holds a B.A. in English Journalism from Miami University.
Vijaya Gaddehas served as our General Counsel and Secretary since August 2013, as our head of communications from July 2015 to August 2016 and served as our Director, Legal from July 2011 to August 2013. Ms. Gadde is also a member of the Board of Trustees of New York University School of Law. From October 2010 to July 2011, Ms. Gadde served as Senior Director and Associate General Counsel, Corporate, at Juniper Networks, Inc., a provider of network infrastructure products and services. From October 2000 to April 2010, Ms. Gadde was an attorney at Wilson Sonsini Goodrich & Rosati, P.C. Ms. Gadde holds a B.S. in Industrial and Labor Relations from Cornell University and a J.D. from New York University School of Law.
| 34 | TWITTER, INC. / 2017 Proxy Statement |
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Alex Roetter has served as our Senior Vice President of Engineering since February 2015 and as our Vice President, Engineering from March 2013 to February 2015. From October 2010 through March 2013, Mr. Roetter served in various other engineering roles at Twitter. From 2009 through 2010, Mr. Roetter was the Director of Engineering at Laufer Wind Group, a company developing radar technology for renewable energy applications. From 2002 to 2008, Mr. Roetter was a software engineer at Google Inc., where he worked on the founding team for AdSense and later on a variety of systems and ads quality projects. Mr. Roetter holds a B.S. and M.S. in Computer Science from Stanford University.
Kevin Weil has served as our Senior Vice President of Product since February 2015 and as our Vice President, Product from October 2014 to February 2015. From May 2009 to October 2014, Mr. Weil served in various other product development roles at Twitter. Mr. Weil holds a B.S. in Physics and Mathematics from Harvard University and an M.S. in Physics from Stanford University.
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Compensation Discussion and Analysis
This Compensation Discussion and Analysis (“CD&A”) includes a detailed discussion of compensation for the followingour current and former executive officers during the fiscal year ended December 31, 2014, which we refer to as our2016 who were Named Executive Officers:Officers (“Named Executive Officers”).
Named Executive Officers for 2016 | Executive Compensation Highlights | |||
Jack Dorsey Anthony Noto Omid Kordestani Vijaya Gadde Adam Bain Adam Messinger | Chief Executive Officer | |||
| Chief Financial Officer | |||
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| General Counsel and Secretary Former Chief Operating Officer (1) Former Chief Technology Officer | •No CEO Compensation. As a testament to his commitment to and belief in Twitter’s long-term value creation potential, our CEO, Jack Dorsey, declined all compensation for 2016. •Investor Outreach. We reached out to our top institutional investors collectively holding approximately 23% of our shares outstanding and met with institutional investors holding approximately 18% of our shares outstanding for feedback on our compensation program and implemented changes as a result, including enhanced CD&A disclosure and continued implementation of our performance-based equity program. •Performance-Based Equity. We continued to phase in a performance-based equity compensation program as we strive over the long-term to provide 50% of each executive officer’s equity compensation in the form of performance-based equity. Performance-based equity for 2016 paid out at approximately 70% of target. •No Annual Time-Based RSU Grants. We only granted time-based RSUs to executives who were promoted with significant expansion of scope of role and responsibilities. •Cash Compensation Below Market. Our cash compensation for executive officers continues to remain below market. •Equity Stakes Tie Executives to Performance. Approximately 97.9% of the compensation of our Named Executive Officers is equity based. •Double Trigger Change in Control Requirements on Equity Awards. We do not provide our executive officers with single trigger change in control acceleration on equity awards. •No Excise TaxGross-Ups.We do not provide any Named Executive Officer with a“gross-up” or other reimbursement payment for any tax liability that he or she might owe as a result of the application of Section 280G, 4999, or 409A of the Code. •Good Compensation Governance. We continue to disallow hedging and pledging of our securities, 280G tax gross ups and single trigger change of control provisions. | ||
(2) Resigned December 22, 2016. Table of Contents This CD&A is organized into four sections: Page 36 - Executive Summary Page 39 -Our Compensation-Setting Process Page 41 - Elements of Pay and 2016 Compensation Decisions Page 45 -Other Compensation Information |
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| TWITTER, INC. / 2017 Proxy Statement | 35 | ||
EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
* In August 2014, Mr. Gupta assumed a new role within Twitter and Mr. Noto was appointed CFO.
This CD&A is organized into four sections:
Section 1—Executive Summary
Section 2—Company Overview and Strategy. Twitter is the best and fastest place to see what is happening and what people are talking about all around the world. Each and every day, instances of breaking news, entertainment, sports, politics, big events and everyday interests happen first on Twitter. Twitter is where the full story unfolds with all the live commentary and where live events come to life unlike anywhere else. Our Compensation-Setting Processprimary service can be accessed on a variety of mobile devices, at twitter.com and via SMS.
Section 3—ElementsIn 2016, we focused on positioning Twitter for long-term sustainable growth and making progress toward GAAP profitability. Specifically, we clearly identified who we are—the best and fastest place to see what’s happening in the world and what people are talking about. We built and shipped product features that directly improved our key audience growth and engagement metrics. We also simplified the organization to be what we believe is more focused and efficient, and eliminated investment innon-core areas of Payour business, like Vine, which we shut down in early 2017, and 2014 Compensation DecisionsFabric, which we sold in early 2017. We saw accelerating rates of growth on a year-over-year basis for daily active usage, or DAU, for three quarters in a row. Our advertising business saw increasing competition for advertiser spending and we believe that advertising revenue growth will continue to lag that of audience growth.
Section 4—Other Compensation Information
Executive Summary
In 2017, our strategy is focused on building and shipping product changes more rapidly to make Twitter safer. We intend to invest in our core use case and in new product areas—such as live streaming video, among others—that further strengthen Twitter’s mission isunique position as the best and fastest place to give everyonesee and talk about what’s happening in the powerworld. We intend to createcontinue integrating new, dynamic, and share ideaspersonalized content as we recognized the importance of simplifying and information instantly without barriers.creating a single destination for people to discover what’s happening on Twitter. We offeralso plan to simplify and differentiate our revenue products to drive sustainable long-term revenue growth by working to strengthen our unique value proposition, especially in live and services for users,video, that gives advertisers developers and platform and data partners. Our goal isthe ability to reach the largest daily audiencemost engaging audiences in the world throughright context at the right time. We intend to apply the same focused approach that drove renewed monthly and daily usage growth in 2016 to simplify our information sharingportfolio and distribution platform products. We believe our audience is not limited tobuying process for advertisers.
Compensation Goals. To execute on our users on the Twitter platform, but rather extends to a larger global audience. In order to achieve our goal,strategy, we must attract and retain expert employees who are experts both within and outside of their domain andexecutives who are agile enough to quickly innovate on our business strategy
and constantly enhance our product offerings. Our executive compensation program is designed to help us realize these objectives.
Specifically, the goals of our executive compensation program are to:
Challenges. We operate in a highly competitive market and industry and face challenges in hiring and retaining leadership due to a number of factors, including:
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| Highly Competitive Technology Industry: We are a unique platform, a widely recognized brand and |
| • | Extremely Competitive Employee Retention Environment: In the technology industry, there is substantial and continuous competition for leadership with the experience and aptitude to motivate and lead product, engineering, sales, G&A and operations teams who are familiar with the technology industry. Our headquarters are located in the San Francisco Bay Area, where competition for leadership is particularly intense. Further, our brand name and successes have made our employees and executives more attractive as candidates for employment with other |
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| 36 | TWITTER, INC. / 2017 Proxy Statement |
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EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
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| companies, and they are subject to significant ongoing recruiting efforts by other companies in the technology industry. |
| • | Business Transformation: In 2016, we refined our strategy and built and shipped product features that directly improved our key audience growth and engagement metrics. We also simplified the organization to be what we believe is |
| • | Executive Background: Typically, we hire experienced executives with |
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Compensation Decisions in 2016. In response to our rapidly evolving business and in a year that we had significant changes to our senior leadership team in order to align with the skills needed to deliver on our long-term vision, we made the following compensation decisions in 2014:2016:
Base Salary: We made competitive adjustments to the base salaries for certain members of our executive team, including certain Named Executive Officers. While we believe that compensation for the executive team should be more heavily weighted towards long term
| • | Base Salary: We made competitive adjustments to the base salaries for certain members of our executive team, including certain Named Executive Officers. While we believe that compensation for the executive team should be more heavily weighted towards long-term equity |
| • | Performance-Based Cash Compensation: With the exception of our former Chief Operating Officer, who participated in a sales incentive plan, our Named Executive Officers do not participate in a performance-based cash |
compensation plan nor have we offered discretionary cash bonuses. We believe that until we reach sustainable profitability on a GAAP basis, performance-based compensation opportunities for our Named Executive Officers should continue to be in the form of long-term equity incentives. This approach allows us to conserve cash resources and tie most of the annual compensation opportunities for our Named Executive Officers to our performance in the form of equity awards whose value is linked to stockholder value and, beginning in 2016, a portion of which is tied directly to company performance. |
| • | Equity Grants Generally: Our executive compensation program continues to be heavily weighted towards equity compensation, in particular in the form of RSUs. In 2016, we granted equity compensation in the form of RSUs and performance-based RSUs (“PRSUs”) to our Named Executive Officers (other than Mr. Dorsey who declined all compensation and Mr. Kordestani whose 2016 PRSUs were granted pursuant to his employment letter dated October 13, 2015), to recognize significant changes in job scope and responsibilities. When granting the RSUs and PRSUs we took into account the yearly weighting of the RSUs and PRSUs during the phase in period, as well as total direct compensation (“TDC”) projections, in order to determine the number of RSUs and PRSUs granted as well as the vesting schedule. For all of the Named Executive Officers, the vesting schedules of additional grants were customized to limit incremental compensation at above market levels in near years where the gap to target TDC may be smaller which serves to further promote retention and long-term focus. |
| • | Performance-Based Equity: In response to our belief in apay-for-performance culture and the feedback we received from investors during our outreach efforts, we announced in early February 2016 that we started to phase in a performance-based equity compensation program for our executive officers in the form of PRSUs. The intent of the program is to further tie executive compensation to our financial performance by shifting the proportion of equity compensation over time from solely time-based equity compensation towards a combination of time-based and performance-based equity compensation. We are targeting a long-term goal of having 50% of the equity awards held by our executive officers and Named Executive Officers to be in the form of PRSUs. The compensation committee is currently targeting 15%, 30% and 50% of our executives total equity compensation vesting for 2017, 2018 and 2019 to be in the form of PRSUs to the extent that PRSUs can be granted without having an executive exceed our TDC targets in each of those years. |
| TWITTER, INC. / 2017 Proxy Statement | 37 | ||
EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
-22-
need to align more appropriately with market competitive levels and accordingly, increase the salary component of overall compensation because a base salary is a necessary and customary element of compensation required to attract and retain highly-qualified executive officers. Although base salaries for all of our Named Executive Officers remain significantly under market compared to our peers, we expect that we will continue to adjust base salaries over time.
Performance-Based Cash Compensation: With the exception of our President of Revenue who participates in a sales incentive plan, our executive team, including our other Named Executive Officers, does not participate in a performance-based cash compensation plan. We believe that unless and until we reach sustainable profitability on a GAAP basis, performance-based compensation opportunities for our executive officers should continue to be in the form of long term equity incentives. This approach allows us to conserve cash resources but tie a significant portion of the annual compensation opportunities for our executive officers to our performance in the form of equity awards, the value of which is linked to our stock performance.
Equity: Our executive compensation program continues to be heavily weighted towards equity, in particular in the form of restricted stock units (RSUs). In 2014, we granted RSUs to a majority of our Named Executive Officers that will not begin to vest until the fourth quarter of 2017, and subject to, in each case, continued employment with us at the time of vesting. We implemented this change in vesting in an effort to promote retention and provide incentives to drive our growth over the long-term.
Change in Control and Severance Benefits: To properly motivate and incent our executive team in the event of a change in control and to the possibility of an involuntary termination or a termination with “good reason,” we revised our Change in Control and Severance Policy in the second quarter of 2014 to provide certain executive officers, including our Named Executive Officers, severance and other benefits in the event of an involuntary termination outside the context of a Change in Control. We believe that these revisions further our interest in encouraging retention among our key executive officers and make us more competitive with our peers.
| • | Change of Control and Severance Benefits: We believe that in order to properly motivate and incentivize our executive team in the event of a change of control and to the possibility of a termination without “cause” or a termination with “good reason,” a standardized “double trigger” change of control and severance policy is critical. In 2016, we reviewed our Change of Control and Involuntary Termination Protection Policy versus the protections at our compensation peers and determined that the current policy continues to further our interest in encouraging retention among our key executive officers and remains competitive with our compensation peers. However, in connection with this review and Mr. Noto’s increased responsibilities, the compensation committee approved an amendment to Mr. Noto’s Severance Policy to increase the lump sum severance payment from 50% of his annual base salary to 100% of his annual base salary in the event that Mr. Noto is involuntarily terminated for any reason (including by him for “good reason”) other than “cause,” death or disability and not in the context of a change of control. The material terms of this arrangements are set forth in “Executive Compensation—Compensation Tables—Potential Payments Upon Termination or Change of Control” below. |
We evaluate our executive compensation programs, including our mix of cash and equity compensation, on an annual basis or as circumstances require based on our business objectives and the competitive environment for
talent. For the remainder of 2015, we anticipate emphasizing pay-for-performance and long-term incentive compensation for our executive officers while increasingWe will continue to increase cash compensation opportunities, where appropriate, in order to move closer to market relative to the competitive landscape.landscape and continue ourphase-in of our performance-based equity program.
Our Investor Outreach Program and Resulting CompensationChanges
We value the feedback of our stockholders. Following our 2016 annual meeting of stockholders, we continued our engagement initiative with our larger institutional stockholders to better understand their perspectives on our executive compensation practices and related governance topics. In 2016, our management team reached out to our top institutional investors collectively holding approximately 23% of our shares outstanding and met with institutional investors holding approximately 18% of our shares outstanding. This effort supplemented ongoing communications between our management and stockholders regarding our financial performance, and expanded upon the outreach to stockholders prior to and in connection with our 2016 annual meeting of stockholders. Our objectives were to gain a better understanding of stockholders’ views on our executive compensation practices and on executive compensation best practices generally, as well as related governance topics. The Twitter participants in these meetings included our head of Compensation, head of Investor Relations, Deputy General Counsel and other members of our investor relations teams.
Our stockholder outreach efforts generated important feedback for our compensation committee and the full board of directors. A summary of the feedback received and the actions taken is set forth below:
WHAT WE HEARD | WHAT WE DID | |||
Stockholders were pleased that we had launched a PRSU program that fosterspay-for-performance | We continued to roll out the PRSU program, setting targets for 2017 operational performance and adding a relative total stockholder return target | |||
Requests for additional disclosure around thephase-in of PRSUs to Named Executive Officers | We included additional disclosure in this CD&A, in the section titled “Executive Compensation—Compensation Discussion and Analysis—Elements of Pay and 2016 Compensation Decisions—Equity Compensation” on page 42 | |||
Requests for our board of directors to consider implementing stock ownership requirements | Our board of directors determined to consider this request at a later date given the total ownership stakes of each of our Named Executive Officers and directors and the lack of any significant sales of our stock (as further described in the section titled “Security Ownership of Certain Beneficial Owners and Management” on page 60) | |||
Feedback regarding our corporate governance practices | Additional details on the feedback regarding our corporate governance practices appears in the section titled “Board of Directors and Corporate Governance—Corporate Governance Overview—Stockholder Outreach” |
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EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
The compensation committee and the board of directors are committed to maintaining apay-for-performance alignment in our executive compensation programs and will continue to solicit feedback from our stockholders regarding our programs and practices.
Our Compensation-Setting Process
We have been undergoing a period of exponentialrapid growth, development and developmentchange both as a private and public company in a highly competitive business and technological environment whichthat dictates that we consider a number of factors in determining individual compensation arrangements with executives, including our Named Executive Officers, at the time we hire them:them, including:
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Role of Our Compensation Committee.Our compensation committee is composed entirely of independent directors, and is responsible for overseeing our executive compensation program. Our compensation committee approves ongoing compensation arrangements for our executive officers, including our Named Executive Officers (other than our CEO) and makes recommendations to the full board of directors regarding our CEO’s compensation. In making its determination for compensation for our Named Executive Officers, our compensation committee considers the following factors: numerous factors, including:
There is no predetermined formula for weighting these factors;
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instead,factors. Instead, our Compensation Committeecompensation committee considers all of this information in light of our business objectives. Our compensation committee operates under a written charter adopted approved by our board of directors. The charter is available on our website.website at http://investor.twitterinc.com.
Role of Management.Management.Each year, or as needed, our CEO, together with senior HR management, reviews our executive compensation practices against our peer groupcompensation peers (described below), competitors for talent and market data. At the compensation committee’s request, our CEO then makes recommendations for target compensation opportunities for executive officers (other than himself). Our compensation committee believes that our CEO’s input for the compensation opportunities for other executives is highly valuable because of his daily involvement with the other members of our executive team and our business. No executive officer participates directly in the final deliberations or determinations regarding his or her own compensation package, except for our CEO who requested that his base salary remain at $14,000 per year for 2014.package. Our senior management team also provides input on, and helps negotiate, initial compensation packages for our newly hired executives. Our compensation committee seeks input from senior management during the process of searching for, and negotiating compensation packages, with new senior level hires and coordinates with our Chief Financial Officer and Chief Accounting Officer in determining the financial and accounting implications of our executive compensation programs and hiring decisions. Our CEO, Mr. Dorsey, requested that he forego all compensation for 2016 and our board of directors followed that request.
Role of the Compensation Consultant. Our compensation committee has the authority to engage its own advisors to assist in carrying out its responsibilities. In 2014,2016, our compensation committee did not formally engaged an outside consulting firm; however, it will from time to time requestrequested that management engage with Compensia, Inc., a national compensation consulting firm, to advise on matters relating to our peer groupcompensation peers selection as well as to provide support and specific analyses with regard to compensation data and formulation of recommendations for executive compensation. The compensation committee intends to periodically review the need to independently retain a compensation consultant.
| TWITTER, INC. / 2017 Proxy Statement | 39 | ||
EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
Use of Comparative Market Data. We established our peer groupcompensation peers in October 2013 in conjunction with our initial public offering. Each year the compensation committee reviews the current compensation peers along with the selection criteria for applicability in making the next year’s compensation decisions. The below peer group, which wascompensation peers, used to inform 20142016 compensation decisions, waswere selected using four general selection parameters. The criteria are software (primary) and broad technology (secondary) companies located in the United States which are between one half (0.5x) and two and one half (2.5x) times our size in revenue with a market capitalization of one third (0.3x) to three (3.0x) times our market capitalization with a preference for companies with high growth and high market capitalization to revenue multiples. We also consider cash and equity compensation data for Facebook, given we directly compete for key talent with Facebook, in order to better represent the current competitive and talent environment. In making 2016 peer group determinations, the compensation committee reviewed the recommendations provided by Compensia based on the criteria described above and removed Groupon, due to industry; Tesla, due to industry and financials; and Yahoo, due to sale of business, and to add Autodesk, Electronic Arts and Red Hat . Accordingly, the compensation peers used to inform 2016 compensation decisions were:
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Netflix | ServiceNow | Yelp |
Our compensation committee intends to annuallycontinue to review our peer groupcompensation peers and the underlying criteria annually to assess that it remains appropriate for review and comparison purposes. We also participate in surveys of market compensation practices in our industry and broadly across all industries, and undertake specialized studies of competitive market practices using the most relevant published survey sources and public filings.
When determining 20142016 executive officer compensation opportunities, management presented information to the compensation committee based on peer groupcompensation peers and
market survey data. Our compensation committee considered this information in making its decision but did not engage in strict benchmarking to a fixed percentile. Instead, our compensation committee relied on the expertisebusiness experience of its members and on the recommendations of management to craft pay executivecompensation packages that are appropriate for our particular executives taking into consideration the factors described above. We believe that the total compensation opportunities of our executive officers, including our Named Executive Officers, waswere competitive with market practices for similarly situated executives of our peer groupcompensation peers.
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EXECUTIVE COMPENSATION
Compensation Discussion and other market competitors.Analysis
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Elements of Pay and 20142016 Compensation Decisions
Our executive compensation program is comprised of three components, listed in order of importance:
PAY COMPONENT |
OBJECTIVE |
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BENEFIT TO STOCKHOLDERS | ||
| Provides a long-term incentive for executives to focus on |
Vesting schedule encourages retention Performance-based grants encourage pay for performance | Value at time of vesting is based on long-term growth of Twitter’s stock price and/or starting in 2016, meeting corporate performance objectives of Twitter | |||
| Base Salary |
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| Provides a measure of stable fixed compensation for performance ofday-to-day services |
Amount reflects individual’s performance and scope of responsibilities, as well as the competitive market for executive talent | Our base salary levels remain comparatively low as we try to conserve cash resources but at levels that are competitive to help us attract and retain talented executives | |||
| Benefits and Perquisites |
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| Provides for the health and welfare of our executives and their families, for protection from unexpected loss, as well as the opportunity to save for retirement |
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We believe that awarding a significant portion of remunerationpay in the form of at-risk compensation that is directly linked to our stock price motivates our executive team to focus on growing our business over the long term therebyand aligning our executives’ interests with those of our stockholders. We do not use specific formulas or weightings in determining the allocation
of the various pay elements; rather, each of our Named Executive Officer’s compensation has been individually designed to provide a combination ofat-risk and fixed and at-risk compensation that is tied to achievement of Twitter’s short-andshort- and long-term objectives.
The following chart sets forth the relative weight of 20142016 compensation attributable to equity-basedequity compensation and base salary for our Named Executive Officers.Officers on average as a group (excluding our CEO who declined all compensation).
| TWITTER, INC. / 2017 Proxy Statement | 41 | ||
EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
Equity Compensation.
.Phase-in of RSUs and PRSUs.Due to the size and vesting status of our executive team’s existing equity awards, and our desire to incent our executive team to focus on long-term business objectives, the compensation committee, upon recommendation from our senior management, adopted a “gap to target” TDC approach to vesting. Under this approach, we only issue new time vested equity awards when a material gap to targeted TDC exists based on the value of existing awards, including the value of PRSUs at target, and the schedule by which the existing awards vest. The issuance of equity to fill the gap is notautomatic--the compensation committee considers multiple factors, such as business and individual performance, when granting new awards. Each of our Named Executive Officers, with the exception of Mr. Dorsey who declined all compensation and Mr. Kordestani whose 2016 PRSUs were granted pursuant to his employment letter dated October 13, 2015, received equity awards in 2016 to recognize the material change in the scope and responsibility of his or her respective job that occurred in 2016. The same gap to target TDC philosophy
was applied based on the benchmark compensation target for the new role. The compensation committee is currently targeting 15%, 30% and 50% of our executives total equity compensation vesting for 2017, 2018 and 2019 to be in the form of PRSUs to the extent that PRSUs can be granted without having an executive exceed our TDC targets in each of those years. Based on the amount of existing equity vesting each year, including PRSUs at target, the compensation committee granted an award which vesting schedule is customized to fill the gap to target TDC in each year. If an executive’s TDC is above target in one year, no shares are awarded to vest in that given year. We believe this approach limits the amount of incremental compensation received above target TDC and will promote long-term retention by allowing for multiple years between the grant date and the vesting start date before an executive can begin to realize value on his or her equity award. An illustration of how we calculate the gap and determine vesting in any new grants follows in a hypothetical example where we are targeting $5 million per year in TDC for an executive who has a current forecasted TDC in future years as indicated in the first row:
2017
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Forecasted TDC with existing equity
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$300K
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Value of Proposed RSU Grant
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$140K
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$1.5M
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Vesting Schedule
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25% per quarter,
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Value of Proposed PRSU Grant at Target (1 year performance period) (% of total equity)
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Total Target TDC with Proposed Equity Grant
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RSUs.
For 2016, the majority of the compensation opportunities for each of our executive officers, including each of our Named Executive Officers, is delivered through RSU awards. We use equity compensation to align our Named Executive Officers' financial interests with those of our stockholders and to attract top leadership talent. The time vesting component of ourAs RSU awards encourages retentionhave value to the recipient even in the absence of stock price appreciation, RSUs help us retain and incentivize employees during periods of market volatility, and also result in our granting fewer shares of common stock than through stock options of equivalent grant date fair value. Our RSU awards typically vest over the long-term.a four-year period and we believe that, like stock options, they help incentivize our executives to build value that can be sustained over time. In addition to the initial equity grant that each executive officer receives as part of his or her new hire package, the compensation committee may grant our executive officers additional equity
awards each year as business needs dictate given the nature of our rapidly changing business. When determining the number of RSUs to issue under both new hire and ongoing awards, we useassess the value of the awards based on a projectedvariety of potential future stock price growth scenarioprices to attempt to mitigate the risk of materially over-compensating our executives if our stock price increases significantly. We also factor in the weighting of the split between RSUs and PRSUs based on our phase in approach of performance-based equity over time. The size of awards that have been granted to our executive team, including our Named Executive Officers, have not been determined based on a specific formula, but rather on our board of directors’ or compensation committee’s discretionarybusiness judgment regarding the appropriate level of compensation for the position as compared to those in our peer groupcompensation peers or those companies that we consider direct
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EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
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direct competitors for talent; the critical nature of the position and the anticipated potential future impact,impact; the size of each executive’s base salary due to the fact that we do not have a cash based bonus program,program; and the sizevested and vesting schedule of priorunvested equity grants. We do, onheld by executives. On occasion, we issue options to purchase shares of Twitter stock, either in the form of incentive stock options ornon-qualified stock options, to incentincentivize those executives who have a direct impact on our financial growth through agrowth.
PRSUs.
For 2016 we started to award long-term performance-based award.
Duecompensation in the form of PRSUs to our executive officers (other than Mr. Dorsey who declined all compensation and Mr. Kordestani whose 2016 PRSUs were granted pursuant to his employment letter dated October 13, 2015). Subject to the size and vesting statusterms of the 2013 Plan, the PRSUs were eligible to vest based upon our executive team’s existing equity awards, and our desire to incent our executive team to focus on the long-term business objectives, theachievement of certain performance targets over aone-year performance period. The compensation committee upon recommendation fromset the performance targets for the performance period in early Q1 2016 and assessed achievement against those performance targets in February 2017. Given that this is our senior management, adopted a gap to market approach to vesting. Under this approach, RSU awards issued in 2014 are intended to commence vesting when the executive would first experience a material decrease in the realized value of his or her compensation based on the value and vesting terms of his or her existing equity awards (other than awards granted in the connection with a promotion) asinitial roll out of the dateprogram, we chose a one year performance period to assess the new grants are being approved. Forimpact of the equity awards grantedplan on performance. We intend to our Named Executive Officersreassess the performance metrics and performance period in 2014, each vesting schedule was determined on an individual basis and for the majority of our executives, including our Named Executive Officers, the vesting start date commences in the fourth quarter of 2017 and ends in the fourth quarter 2019. We believe this approach will promote long-term retention by allowing for multiple years between the grant date grant and the vesting start date before an executive can begin to realize value on his or her equity award.future years.
For more information relating to the granting of these RSU and PRSU awards, including the vesting schedules, see “—2014 the section titled “Executive Compensation—Compensation Tables—Grants of Plan-Based Awards Table”in Fiscal Year 2016” table below.
20142016 Equity Grants. Our CEO
Jack Dorsey. Mr. Dorsey declined all compensation for 2016 (including equity awards).
Anthony Noto. In recognition of Mr. Noto’s increased scope and responsibility including his leadership on our Live initiatives and subsequent promotion to COO in November 2016 and his gap to targeted TDC based on the COO role, he was granted a total of 1,258,750 RSUs and 22,500 PRSUs at target for performance year 2016. 52,500 RSUs vested quarterly over 2016, 207,500 RSUs will vest quarterly over
2017, 248,750 RSUs will vest quarterly over 2018, 425,000 RSUs will vest quarterly over 2019 and 325,000 RSUs will vest quarterly over 2020.
Omid Kordestani. Pursuant to Mr. Kordestani’s original employment letter dated October 13, 2015, we granted him 100,000 PRSUs at target for performance year 2016. Mr. Kordestani did not receive any equityadditional grants in 2014 because our Compensation Committee believed that his existing equity ownership position sufficiently aligns his interests with those2016.
Vijaya Gadde. In recognition of our stockholders.
Our other named executive officers receivedMs. Gadde’s increased scope and responsibility and her gap to targeted TDC based on the following RSU grants in 2014:
Anthony Noto. As inducement to join our company as our chief financial officer, Mr. NotoGeneral Counsel role, she received a grant of 1,500,000600,000 RSUs and a grant20,000 PRSUs at target for performance year 2016. 140,000 RSUs vested quarterly over 2016, 140,000 RSUs will vest quarterly over 2017, 200,000 RSUs will vest quarterly over 2018 and 120,000 RSUs will vest quarterly over 2019.
Adam Bain. In recognition of 500,000 Non-Qualified Stock Options, each with a grant date fair value as set forthMr. Bain’s promotion to COO in the “Summary Compensation Table” below. The RSUsSeptember 2015 and Non-Qualified Stock Options vest 25%his gap to targeted TDC based on the first day of the month following Mr. Noto’s twelve month employment anniversary and 6.25% are subject to quarterly vesting thereafter based on continued employment over the remainder of the vesting period. The vesting schedule of Mr. Noto’s equity was subsequently modified such that 8/48th of the grant is fully vested as of March 1, 2015 to reflect the pro-rated portion of the first vesting attributable to his length of service at Twitter and all other quarterly vesting events remained unchanged.
Alex Roetter. Mr. RoetterCOO role, he received a grant of 160,0001,850,000 RSUs with a grantand 40,000 PRSUs at target for performance year 2016. 527,500 RSUs vested quarterly over 2016, 527,500 RSUs were scheduled to vest quarterly over 2017, 465,000 RSUs were scheduled to vest quarterly over 2018 and 330,000 RSUs were scheduled to vest quarterly over 2019. Mr. Bain resigned from the company on November 30, 2016 and all unvested equity was forfeited as of his date fair valueof termination, including the aforementioned grants vesting in 2017 – 2019 and PRSUs.
Adam Messinger. In recognition of Mr. Messinger’s appointment as set forthour head of engineering, product development (other than the product teams related to monetization efforts), and design in the “Summary Compensation Table” below. These RSUs are subjectaddition to quarterly vestinghis role as Chief Technology Officer in January 2016 and his gap to targeted TDC based on continued employment over 9 quarters starting October 1, 2017. Mr. Roetter also received an additional equity grantthe head of 200,000 RSUs with a grant date fair value as set forth below in recognition of his promotionengineering, product development (other than the product teams related to VP Engineering. These RSUs are subject to quarterly vesting based on continued employment over 8 quarters starting January 1, 2015.
Kevin Weil. Mr. Weilmonetization efforts), and design role, he received a grant of 60,0001,250,000 RSUs and 25,000 PRSUs at target for performance year 2016. 360,000 RSUs vested quarterly over 2016, 360,000 RSUs were scheduled to vest quarterly over 2017, 320,000 RSUs were scheduled to vest quarterly over 2018 and 210,000 RSUs were scheduled to vest quarterly over 2019. Mr. Messinger resigned from the company on December 22, 2016 and all unvested equity was forfeited as of his date of termination, including the aforementioned grants vesting in 2017 – 2019 and PRSUs.
| TWITTER, INC. / 2017 Proxy Statement | 43 | ||
EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
Performance-Based Restricted Stock Units for 2016. For fiscal 2016, the compensation committee granted PRSUs, as described above, to our executive officers that would vest based on our performance during the fiscal year compared topre-established target levels for two equally weighted measures—GAAP revenue and Adjusted EBITDA. The compensation committee believed that these metrics and this weighting were appropriate to influence executive performance in achieving certain annual corporate
performance goals that further our strategy and that are used by investors to evaluate our financial performance. The compensation committee believes that targets for performance-based equity compensation should be rigorous and challenging and therefore set the targets indicated below. No vesting of the PRSUs would occur until a minimum performance threshold was achieved and the PRSUs had a maximum vesting payout capped at 2x target outlined below.
| MEASURE
| WEIGHTING
|
TARGET (100% VESTING)
|
ACTUAL PERFORMANCE
| ACTUAL VESTING
| ||||||||||||||||
2016 GAAP Revenue
|
|
50
|
%
|
$
|
2,864 million
|
|
$
|
2,530 million
|
|
0%
| ||||||||||
2016 Adjusted EBITDA
|
|
50
|
%
|
$
|
690 million
|
|
$
|
751 million
|
|
142%
| ||||||||||
For these purposes, “2016 GAAP Revenue” is defined as our GAAP revenues, as may be adjusted for certain acquisitions. “2016 Adjusted EBITDA” is defined as net loss (income) adjusted to exclude stock-based compensation expense, depreciation and amortization expense, interest and other expenses, provision (benefit) for income taxes and restructuring charges, but excluding recorded costs resulting from any business acquired by us (other than acquisitions with a grant date fair valuetotal deal consideration as approved by the board of
directors or one of its committees and set forth in a definitive agreement (not including new stock based awards granted to target’s continuing employees) of less than $50 million).
The following table sets forth the “Summary Compensation Table” below. These RSUs are subjecttotal PRSUs granted to quarterly vesting based on continued employment over 9 quarters starting October 1, 2017. Mr. Weil also received an additional equity grantour Named Executive Officers at target and the number of 240,000 RSUs withPRSUs that vested as a grant date fair value as set forth belowresult of our performance against our targets in recognition of his promotion to VP Product. These RSUs are subject to quarterly vesting based on continued employment over 8 quarters starting January 1, 20152016:
Vijaya Gadde. Ms. Gadde received a grant of 145,000 RSUs with a grant date fair value as set forth in the “Summary Compensation Table” below. These RSUs are subject to quarterly vesting based on continued employment over 9 quarters starting October 1, 2017.
| NAMED EXECUTIVE OFFICER1
|
PRSU GRANT FOR 2016 (AT THRESHOLD)
| PRSU GRANT (AT TARGET)
| PRSU GRANT (AT MAXIMUM)
| PRSU GRANT (ACTUAL)
| ||||||||||||||||
Anthony Noto
|
|
0
|
|
|
22,500
|
|
|
45,000
|
|
|
15,984
|
| ||||||||
Omid Kordestani
|
|
0
|
|
|
100,000
|
|
|
200,000
|
|
|
71,040
|
| ||||||||
Vijaya Gadde
|
|
0
|
|
|
20,000
|
|
|
40,000
|
|
|
14,208
|
| ||||||||
| 1 | Messrs. Bain and Messinger were awarded PRSUs with 2016 targets, but those PRSUs did not vest as Messrs. Bain and Messinger resigned prior to the date on which the compensation committee determined the performance of the company’s performance against targets. |
Base Salary. Our compensation committee believes base salaries are a necessary and customary element of compensation in order to attract and retain highly qualified executive officers. Salary.The salaries of our executive team, including our Named Executive Officers, have remained significantly below market due to the fact that until October 2013, we were a privately-held company with the potential for significant equity upside coupled with our desire to maintain internal pay equity between executive officers and other senior level individuals. InStarting in 2014, our
-26-
compensation committee agreed that the base salarysalaries for our executive team, including our Named Executive Officers, should gradually increase to market competitive levels that are market competitive. In keeping with this philosophy, our compensation committee limited the amount ofand accordingly in 2014, we raised base salary increasesalaries to the lesser of 80% of market target or 150% of current base. FollowingIn 2016, we made further adjustments both in recognition of certain Named Executive Officer promotions as well as to continue to close the 2014 salarygap on market normative
levels of base pay; even with the 2016 increases, we believe that the salaries for our executive teamofficers still remain well below our compensation peers. For 2014, Mr. Costolo requested to receive a base salary of $14,000 per year. Mr. Noto did not receive a base salary increase due to fact that he commenced employment in June 2014. The following table shows the base salary rates in effect prior to the effective date of the 2014 increase and the newfor 2016 (Mr. Dorsey declined a base salary rates for 2014, effective as of September 1, 2014 (November 1, 2014 for Kevin Weil)2016):
| NAME | 2016 BASE SALARY RATE ($) | ||||
Jack Dorsey | — | ||||
Omid R. Kordestani | 50,000 | ||||
Anthony Noto | 500,000 | ||||
Vijaya Gadde | 500,000 | ||||
Adam Bain | 500,000 | ||||
Adam Messinger | 500,000 | ||||
Name |
|
| 2014 Old Base |
|
| 2014 New Base |
| ||
Richard Costolo |
|
| 14,000 |
|
|
| 14,000 |
| |
Anthony Noto |
|
| — |
|
|
| 250,000 |
| |
Alex Roetter |
|
| 220,000 |
|
|
| 375,000 |
| |
Kevin Weil |
|
| 210,000 |
|
|
| 375,000 |
| |
Vijaya Gadde |
|
| 245,000 |
|
|
| 370,000 |
| |
Mike Gupta |
|
| 250,000 |
|
|
| 250,000 |
| |
| 44 | TWITTER, INC. / 2017 Proxy Statement |
| ||
EXECUTIVE COMPENSATION Compensation Discussion and AnalysisBenefits. Our executive team,
Benefits.Twitter executives, including ourthe Named Executive Officers, are eligible to participate in various employee benefitthe same benefits plans such asand programs that all other Twitter employees in the same geographies they are based. These plans include medical, dental, and vision care plans, flexible spending accounts for health and dependent care, life, accidental death and dismemberment, disability, and travel insurance, employee assistance programs, employee stock purchase plan and paid time off. Twitter executives participate in the same benefits plans and programs that all other Twitter employees based in the US do.
In addition, we maintain a tax qualified 401(k) retirement savings plan that contains both apre-tax and anafter-tax Roth savings feature for the benefit of eligible U.S. employees, including our Named Executive Officers. In 2014,2016, we providedimplemented a one-time 401(k)discretionary employer matching contribution program by which the company will make a contribution of $.50 for every dollar an employee contributes in either thepre-tax orpost-tax Roth account up to a maximum company contribution of $1,500 for all employees,per year per eligible employee, including our Named Executive Officers, who were regular US employeesOfficers. In order to receive the company contribution, the employee must be employed as of December 31 2014, pro-rated forof the numberapplicable plan year and have at least 6 months of days employed in 2014 if hired between January 1 and December 31, 2014. This one-timecontinuous service. We believe that a company contribution was to introduce the 401(k) company matching feature which will be implemented in 2015 to encourageencourages all USeligible U.S. employees to contribute to long-term retirement planning.savings. The 20142016 contribution was fully vested as of the December 31 contribution date and is deductible by us.
Perquisites. Consistent with the practices of many companies in our peer group, we provide limited perquisites, mainly in the form of personal security, to several of our Named Executive Officers. We believe that the personal safety of our Named Executive Officers is paramount to Twitter and believe that the cost of the security measures are appropriate and necessary. With respect to Mr. Dorsey, we paid for the costs of security personnel. None of the security related costs constitute taxable income to our Named Executive Officers.
Other Compensation Information
Employment Arrangements.Arrangements.Each of our Named Executive Officers has entered into a written,at-will employment offer letter with us. For a summary of the material terms and conditions of these employment offer letters, see "Offer Letter Agreements."the section titled “Executive Compensation—Compensation Discussion and Analysis—Other Compensation Information—Executive Officer Employment Letters.”
Post-Employment Compensation.Compensation.Each of our Named Executive Officers participates in aour Change inof Control and SeveranceInvoluntary Termination Protection Policy (the “Severance
Policy”), which provides standardized payments and benefits to the Named Executive Officers in the event of an involuntary termination without “cause” by Twitter or termination for “good reason” by the participant, whether or not in connection with a Change in Control, during normal coursechange of business in ordercontrol, to make these benefits consistent among the executives who have these arrangements. Our compensation committee approves all plan participants and the level of benefit applicable to each plan participant. In the case of a change in control event, weWe believe that these arrangementsthe change of control benefits in the Severance Policy assist to maximize stockholder value and maintain executive focus in the immediate period prior to, during and after the change inof control event. To that end, the Severance Policy includes a “double” trigger provision meaning that both a change in control and termination of employment must occur for the participant to receive the benefit. The material terms of these post-employment arrangements are set forth in “Potential“Executive Compensation—Compensation Tables—Potential Payments Upon Termination or Change inof Control” below.
Accounting Treatment. We recognize anon-cash charge to earnings for accounting purposes for equity awards over their vesting period.awards. We expect that our compensation committee will continue to review and consider the accounting impact of equity awards in addition to considering the impact for dilution and overhang when deciding the amounts and terms of equity grants.
-27-
Deductibility of Executive Compensation.Compensation.Section 162(m) of the Internal Revenue Code of 1986, as amended, or the Code, may limit the amount that we may deduct from our federal income taxes for compensation paid to certain of our executive officers to one million dollars per executive officer per year, unless certain requirements are met. Code Section 162(m) provides an exception from this deduction limit for certain forms of performance-based compensation.compensation and for certain compensation paid during a transition period after our initial public offering. While our compensation committee isthey are mindful of the benefit of the full deductibility of compensation, our board of directors and compensation committee believe that we should not be constrained by the requirements of the Code Section 162(m) exception where those requirements would impair our flexibility in compensating our executive officers in a manner that can best promote our corporate objectives. Therefore, our board of directors and compensation committee have not adopted a policy that would require that all compensation be deductible. We intend to continue to compensate our executive officers in a manner consistent withdeductible, though it does consider the best interestsdeductibility of Twitter and our stockholders.compensation.
Taxation of Parachute Payments and Deferred Compensation.Compensation.We do not provide, and have no obligation to provide, any executive officer, including any Named Executive Officer, with a “gross-up”“gross-up” or other reimbursement payment for any tax liability that he or she might owe as a result of the application of Section 280G, 4999, or 409A of
| TWITTER, INC. / 2017 Proxy Statement | 45 | ||
EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
the Code. Sections 280G and 4999 of the Code provide that executive officers and directors who hold significant equity interests and certain other service providers may be subject to an excise tax if they receive payments or benefits in connection with a change inof control that exceed certain limits prescribed by the Code, and that the employer may forfeit a deduction on the amounts subject to this additional tax. Section 409A of the Code also may impose significant taxes on a service provider in the event that he or she receives deferred compensation that does not comply with the requirements of Section 409A of the Code. We have structured our compensation arrangements with the intention of complying with or otherwise being exempt from the requirements of Section 409A of the Code.
Hedging and Pledging Policies.We have established an Insider Trading Policy, which, among other things, prohibits short sales, engaging in transactions in publicly-traded options (such as puts and calls) and other derivative securities relating to our common stock. This prohibition extends to any hedging or similar transaction designed to decrease the risks associated with holding our securities. In addition, our Named Executive Officers are prohibited from pledging any of our securities as collateral for a loan and from holding any of our securities in a margin account.
Compensation Risk Assessment. Our management team and compensation committee each play a role in evaluating and mitigating any risk that may exist relating to our compensation plans, practices and policies for all employees, including our Named Executive Officers. Each year, management performs an assessment of our compensation plans and practices and, for 2014, concluded that our compensation program does not create risks that are reasonably likely to have a material adverse effect on the company. The objective of the assessment is to identify any compensation plans or practices that may encourage employees to take unnecessary risk that could threaten the company. No such plans or practices were identified. The risk assessment process included, among other things, a review of our cash and equity incentive-based compensation plans to ensure that they are aligned with our company performance goals and the overall compensation to ensure an appropriate balance between fixed and variable pay components and between short- and long-term incentives. Our compensation committee has reviewed this report and agreed with management’s conclusions.
Executive Officer Employment Letters.
Richard Costolo
Jack Dorsey. We entered into an executive employment letter dated October 1, 2013June 11, 2015 with Richard Costolo,Mr. Dorsey, our Chief Executive Officer. The letter has no specific term and provides forat- will employment. At the time Mr. Dorsey was appointed Chief Executive Officer, he declined all compensation and therefore, is not currently subject to our Severance Policy.
Omid Kordestani. We entered into an executive employment letter dated October 13, 2015 with Mr. Kordestani, our Executive Chairman. The letter has no specific term and provides forat-will employment. The letter supersedes all existing agreements and understandings Mr. Costolo may have concerning his employment relationship with us. The letter also provides that Mr. Costolo’s annualKordestani’s base salary is $14,000.initially $50,000 per year and outlines his initial grants of 800,000non-qualified stock options and 400,000 PRSUs. Thenon-qualified stock options vest 25% on the first day of the month following hisone-year employment anniversary and then quarterly thereafter for the remaining 12 quarters, subject to his continued employment on each vesting date. The PRSUs will have performance periods over four fiscal years beginning with our 2016 fiscal year, with performance targets to be set for each performance period in advance of the end of the applicable performance period, and, achievement determined in the first quarter following each completed fiscal year.
Mr. Kordestani’s letter also specifies his severance arrangement if he is involuntarily terminated or terminates for “good reason” either in isolation or in connection with a change of control event, as described in the section titled “Executive Compensation—Compensation Tables—Potential Payments Upon Termination or Change of Control.”
Anthony Noto
. We entered into an executive employment letter dated June 30, 2014 with Anthony Noto, our Chief Operating Officer and Chief Financial Officer. The letter has no specific term and provides forat-will employment. The letter provides that Mr. Noto’s current base salary iswas initially $250,000 (subsequently increased to $500,000) and outlines his initial grants of 1,500,000 RSUs and 500,000non-qualified stock options,
-28-
each vesting 25% on the first day of the month following hisone-year employment anniversary (with 8/48th of the grant vesting as of March 1, 2015) and then quarterly thereafter for the remaining 12 quarters. Mr. Noto’s letter also specifies his severance arrangement if he is involuntarily terminated or terminates for “good reason” either in isolation or in connection with a Change in Controlchange of control event, as described in the section titled “Potential“Executive Compensation—Compensation Tables—Potential Payments Upon Termination or Change inof Control.”
Mike Gupta
We entered into an executive employment letter dated October 1, 2013 with Mike Gupta, our former Chief Financial Officer. The letter has no specific term and provides for at-will employment. The letter supersedes all existing agreements and understandings Mr. Gupta may have concerning his employment relationship with us. The letter also provides that Mr. Gupta’s current annual base salary is $250,000. Mr. Gupta stepped down from the role of CFO on August 11, 2014 and remains employed with us as Senior Vice President, Strategic Investments, with no change to his current executive employment letter.
Alex Roetter
We entered into an executive employment letter dated July 28, 2010 with Alex Roetter, our Senior Vice President of Engineering. The letter has no specific term and provides for at-will employment. The letter supersedes all existing agreements and understandings Mr. Roetter may have concerning his employment relationship with us. The letter also provides that Mr. Roetter’s then annual base salary was $150,000. For Mr. Roetter’sNoto’s current base salary, see the section titled “Executive Compensation—Compensation Discussion &and Analysis—Elements of Pay and 2016 Compensation Decisions—Base Salary.”
Kevin Weil
We entered into an executive employment letter dated May 26, 2009 with Kevin Weil, our Senior Vice President of Product. The letter has no specific term and provides for at-will employment. The letter supersedes all existing agreements and understandings Mr. Weil may have concerning his employment relationship with us. The letter also provides that Mr. Weil’s then annual base salary was $120,000. For Mr. Weil’s current base salary, see Compensation Discussion & Analysis—Base Salary.
Vijaya Gadde
. We entered into an executive employment letter dated October 1, 2013 with Vijaya Gadde, our General Counsel and Secretary. The letter has no specific term and provides forat-will employment. The letter supersedes all existing agreements and understandings Ms. Gadde may have concerning her employment relationship with us. The letter also provides that Ms. Gadde’s annual base salary iswas initially $250,000 as of the effective date of the employment letter.letter (subsequently increased to $500,000). For Ms. Gadde’s current base salary, see the section titled “Executive Compensation—Compensation Discussion &and Analysis—Elements of Pay and 2016 Compensation Decisions—Base Salary.”
Adam Bain. We entered into an executive employment letter dated August 19, 2010 with Adam Bain, our former Chief Operating Officer. The letter has no specific term and provides forat-will employment. The letter supersedes all existing agreements and understandings Mr. Bain may have concerning his employment relationship with us. The letter also provided that Mr. Bain’s annual base salary was initially $200,000 (subsequently increased to $500,000). Mr. Bain
| 46 | TWITTER, INC. / 2017 Proxy Statement |
| ||
EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
resigned from the company on November 30, 2016. Accordingly, he was not paid severance and is no longer subject to our Severance Policy.
Adam Messinger. We entered into an executive employment letter dated October 17, 2011 with Adam Messinger, our former Chief Technology Officer. The letter has no specific term and provides forat-will employment. The letter supersedes all existing agreements and understandings Mr. Messinger may have concerning his employment relationship with us. The letter also provided that Mr. Messinger’s annual base salary was initially $200,000 (subsequently increased to $500,000). Mr. Messinger resigned from the company on December 22, 2016. Accordingly, he was not paid severance and is no longer subject to our Severance Policy.
Compensation-Related Risk.
We have undertaken a risk review of our employee compensation planspolicies and arrangementspractices in which our employees (including our executive officers) participate, to determine whether these planspolicies and arrangementspractices have any features that might create undue risks or encourage unnecessary and
excessive risk-taking that could threaten our value. In our review, we considered numerous factors and design elements that manage and mitigate risk, without diminishing the effect of the incentive nature of compensation, including, but not limited to, the following:
| a commission-based incentive program for sales employees that only results in payout based on measurable financial or business critical metrics; |
|
|
|
|
Based on our review, we concluded that any potential risks arising from our employee compensation programs,policies and practices, including our executive compensation programs, are not reasonably likely to have a material adverse effect on Twitter. Our compensation committee has reviewed this assessment and agreed with management’s conclusions.
-29-
COMPENSATION COMMITTEE REPORTCompensation Committee Report
The Compensation Committee has reviewed and discussed with management the Compensation Discussion and Analysis provided above. Based on its review and discussions, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement and Twitter’s Annual Report on Form10-K for the year ended December 31, 2014.2016.
Compensation Committee
Peter Fenton (Chair)
Peter Chernin*
David Rosenblatt
Marjorie Scardino
* Ms. Scardino will replace Mr. Chernin as a member of the Bret Taylor
| TWITTER, INC. / 2017 Proxy Statement | 47 | ||
EXECUTIVE COMPENSATION
Compensation Committee on May 1, 2015
Tables
-30-
2016 Summary Compensation Table for Fiscal Year 2014
Name and Principal Position |
| Year |
| Salary |
| Bonus |
| Option |
| Stock |
| All Other |
| Total |
|
Richard Costolo |
| 2014 |
| 13,892 |
| — |
| — |
| — |
| 161,507 |
| 175,399 |
|
Chief Executive Officer |
| 2013 |
| 130,250 |
| — |
| — |
| — |
| — |
| 130,250 |
|
|
| 2012 |
| 200,000 |
| — |
| 2,903,783 |
| 8,401,957 |
| — |
| 11,505,740 |
|
Anthony Noto(6) |
| 2014 |
| 124,038 |
| — |
| 9,545,000 |
| 63,075,000 |
| 24,060 |
| 72,768,098 |
|
Chief Financial Officer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mike Gupta(7) |
| 2014 |
| 248,077 |
| — |
| — |
| — |
| 15,157 |
| 263,234 |
|
Senior Vice President, Strategic Investments and Former Chief Financial Officer |
| 2013 |
| 241,667 |
| — |
| — |
| 24,398,000 |
| — |
| 24,639,667 |
|
Alex Roetter(8) |
| 2014 |
| 276,712 |
| — |
| — |
| 18,759,600 |
| 27,397 |
| 19,063,709 |
|
Senior Vice President of Engineering |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kevin Weil(9) |
| 2014 |
| 252,056 |
| 2,500 |
| — |
| 12,733,800 |
| 15,997 |
| 13,004,353 |
|
Senior Vice President of Product |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vijaya Gadde |
| 2014 |
| 283,981 |
| — |
| — |
| 7,555,950 |
| 15,157 |
| 7,855,088 |
|
General Counsel |
| 2013 |
| 219,583 |
| 7,500 |
| — |
| 14,904,900 |
| — |
| 15,131,983 |
|
| NAME AND PRINCIPAL POSITION
| YEAR
| SALARY
| BONUS
| OPTION
| STOCK
|
ALL OTHER COMPENSATION
| TOTAL
| ||||||||||||||||||||||||||||
Jack Dorsey | 2016 | — | — | — | — | 56,551 | 56,551 | ||||||||||||||||||||||||||||
Chief Executive Officer
|
| 2015
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
|
| 68,506
|
|
| 68,506
|
| ||||||||||||||
Anthony Noto(6) | 2016 | 496,154 | — | — | 23,278,425 | 1,500 | 23,776,079 | ||||||||||||||||||||||||||||
Chief Financial Officer and Chief | 2015 | 250,000 | — | — | — | 151,281 | 401,281 | ||||||||||||||||||||||||||||
Operating Officer
|
| 2014
|
|
| 124,038
|
|
| —
|
|
| 9,545,000
|
|
| 63,075,000
|
|
| 24,060
|
|
| 72,768,098
|
| ||||||||||||||
Omid Kordestani(7) | 2016 | 50,000 | — | — | 1,800,000 | — | 1,850,000 | ||||||||||||||||||||||||||||
Executive Chairman
|
| 2015
|
|
| 9,615
|
|
| —
|
|
| 12,352,000
|
|
| —
|
|
| —
|
|
| 12,361,615
|
| ||||||||||||||
Vijaya Gadde(8) | 2016 | 498,000 | — | — | 9,348,000 | 1,500 | 9,847,500 | ||||||||||||||||||||||||||||
General Counsel and Secretary |
|
2015 |
|
|
370,000 |
|
|
— |
|
|
— |
|
|
— |
|
|
1,500 |
|
|
371,500 |
| ||||||||||||||
|
2014
|
|
|
283,981
|
|
|
—
|
|
|
—
|
|
|
7,555,950
|
|
|
15,157
|
|
|
7,855,088
|
| |||||||||||||||
Adam Bain(9) | 2016 | 465,385 | 445,058 | — | 28,433,000 | — | 29,343,443 | ||||||||||||||||||||||||||||
Former Chief Operating Officer
| |||||||||||||||||||||||||||||||||||
Adam Messinger(10) | 2016 | 484,231 | — | — | 19,175,000 | — | 19,659,231 | ||||||||||||||||||||||||||||
Former Chief Technology Officer
| |||||||||||||||||||||||||||||||||||
(1) | Mr. Dorsey was appointed Chief Executive Officer on July 1, 2015. At his own recommendation to the compensation committee, Mr. |
(2) | Amounts disclosed in this column relate to |
(3) | Amounts disclosed in this column relate to grants of |
(4) | Amounts disclosed in this column relate to grants of RSUs and PRSUs made under our |
(5) | Amounts disclosed in this column include (i) |
(6) | Mr. Noto was hired on June 30, 2014 and appointed as our Chief Financial Officer on August 12, |
|
|
| 48 | TWITTER, INC. / 2017 Proxy Statement |
| ||
EXECUTIVE COMPENSATION
Compensation Tables
| Mr. |
|
|
| (8) | Ms. Gadde was also awarded PRSUs for fiscal years 2017—2019, which are not reflected in this table due to fact that the grant date fair value of the award has not been established because the performance targets have not yet been set or determined. |
| (9) | Mr. Bain resigned as Chief Operating Officer on November 30, 2016 and all outstanding unvested equity awards as of his date of resignation were cancelled, including the unvested portion of the outstanding award value shown in the table above. |
| (10) | Mr. Messinger resigned as Chief Technology Officer on December 22, 2016 and all outstanding unvested equity awards as of his date of resignation were cancelled, including the unvested portion of the outstanding award value shown in the table above. |
| TWITTER, INC. / 2017 Proxy Statement | 49 | ||
EXECUTIVE COMPENSATION
Compensation Tables
-31-
Grants of Plan-Based Awards in 2014Fiscal Year 2016
The following table sets forth information regarding grants of plan-based equity awards made to our Named Executive Officers during 2014.fiscal year 2016. We did not grant any plan-based cash awards or stock options to our Named Executive Officers during 2014.fiscal year 2016.
Name |
|
| Grant Date |
|
| Number of |
| Number of Securities Underlying Options (#) |
| Exercise or Base Price of Option Awards ($/Sh) |
| Grant Date |
|
Richard Costolo |
| — |
|
| — |
| — |
| — |
| — |
| |
Anthony Noto |
| 07/01/2014 | (2) |
| 1,500,000 |
| — |
| — |
| 63,075,000 |
| |
|
| 07/01/2014 | (2) |
|
|
| 500,000 |
| 42.05 |
| 9,545,000 |
| |
Mike Gupta |
| — |
|
| — |
| — |
| — |
| — |
| |
Alex Roetter |
| 09/12/2014 | (3) |
| 360,000 |
| — |
| — |
| 18,759,600 |
| |
Kevin Weil |
| 09/12/2014 | (3) |
| 60,000 |
| — |
| — |
| 3,126,600 |
| |
|
| 11/21/2014 |
|
| 240,000 |
| — |
| — |
| 9,607,200 |
| |
Vijaya Gadde |
| 09/12/2014 | (3) |
| 145,000 |
| — |
| — |
| 7,555,950 |
| |
NAME
| GRANT DATE
| ESTIMATED FUTURE PAYOUTS UNDER
|
ALL OTHER STOCK UNITS (#)
| GRANT DATE
| ||||||||||||||||||||||||||
THRESHOLD (#)
| TARGET (#)
| MAXIMUM (#)
| ||||||||||||||||||||||||||||
Jack Dorsey
|
| —
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
| ||||||||||||
Anthony Noto |
|
4/7/2016
|
(2)
|
|
0
|
|
|
22,500
|
|
|
45,000
|
|
|
382,050
|
| |||||||||||||||
|
| 4/7/2016
| (3)
|
| 318,750
|
|
| 5,412,375
|
| ||||||||||||||||||||||
|
| 11/21/2016
| (3)
|
| 940,000
|
|
| 17,484,000
|
| ||||||||||||||||||||||
Omid Kordestani
|
|
2/24/2016
|
(2)
|
|
0
|
|
|
100,000
|
|
|
200,000
|
|
|
1,800,000
|
| |||||||||||||||
Vijaya Gadde |
|
2/10/2016 |
(3) |
|
600,000 |
|
|
8,988,000 |
| |||||||||||||||||||||
|
2/24/2016
|
(2)
|
|
0
|
|
|
20,000
|
|
|
40,000
|
|
|
360,000
|
| ||||||||||||||||
Adam Bain |
|
2/10/2016
|
(3)
|
|
1,850,000
|
|
|
27,713,000
|
| |||||||||||||||||||||
|
2/24/2016
|
(2)
|
|
0
|
|
|
40,000
|
|
|
80,000
|
|
|
720,000
|
| ||||||||||||||||
Adam Messinger |
|
2/10/2016
|
(3)
|
|
1,250,000
|
|
|
18,725,000
|
| |||||||||||||||||||||
|
2/24/2016
|
(2)
|
|
0
|
|
|
25,000
|
|
|
50,000
|
|
|
450,000
|
| ||||||||||||||||
(1) | Reflects grant date fair value of |
(2) | Reflects the award of |
(3) | Reflects the award of |
| 50 | TWITTER, INC. / 2017 Proxy Statement |
| ||
EXECUTIVE COMPENSATION
Compensation Tables
-32-
Outstanding Equity Awards at 2014 2016 FiscalYear-End
The following table lists all outstanding equity awards held by our Named Executive Officers as of December 31, 2014.2016. These equity amounts have been adjusted, as applicable, to reflect, (i) athree-for-one forward stock split completed in May 2010 and (ii) atwo-for-one forward stock split completed in May 2011. See “the section titled “Executive Compensation—Compensation Tables—Potential Payments onUpon Termination or Change-in-Control”Change of Control” for information regarding the impact of certain employment termination scenarios on outstanding equity awards.
|
|
|
| Option Awards |
| Stock Awards | ||||||||||
Name |
| Grant Date (1) |
|
| Number of (#) |
| Number of (#) |
|
| Option |
| Option |
| Number of |
| Market Value of |
Richard Costolo | 9/4/2009 | (4) |
| 4,025,606 |
| — |
|
| 0.4283 |
| 09/03/2019 |
| — |
| — | |
| 11/23/2010 | (5) |
| 4,110,284 |
| — |
|
| 1.8300 |
| 11/23/2020 |
| — |
| — | |
| 4/12/2012 | (6) |
| 48,554 |
| 339,886 |
|
| 14.4200 |
| 04/11/2022 |
| — |
| — | |
| 4/12/2012 | (7) |
| — |
| — |
|
| — |
| — |
| 509,828 |
| 18,287,530 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Anthony Noto | 7/1/2014 | (8) |
| — 500,000 500,000
|
| 500,000 |
|
| 42.05 |
| 06/30/2024 |
| — |
| — | |
| 7/1/2014 | (9) |
| — |
| — |
|
| — |
| — |
| 1,500,000 |
| 53,805,000 53,805,000 53,805,000 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Mike Gupta | 1/24/2013 | (10) |
| — |
| — |
|
| — |
| — |
| 225,000 |
| 8,070,750 | |
| 3/8/2013 | (11) |
| — |
| — |
|
| — |
| — |
| 281,250 |
| 10,088,438 | |
| 8/9/2013 | (12) |
| — |
| — |
|
| — |
| — |
| 300,000 |
| 10,761,000 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Alex Roetter | 7/28/2011 | (13) |
| — |
| — |
|
| — |
| — |
| 6,250 |
| 224,188 | |
| 2/10/2012 | (14) |
| — |
| — |
|
| — |
| — |
| 31,250 |
| 1,120,938 | |
| 9/27/2012 | (15) |
| — |
| — |
|
| — |
| — |
| 21,875 |
| 784,656 | |
| 3/8/2013 | (16) |
| — |
| — |
|
| — |
| — |
| 126,563 |
| 4,539,815 | |
| 8/9/2013 | (17) |
| — |
| — |
|
| — |
| — |
| 375,000 |
| 13,451,250 | |
| 9/12/2014 | (18) |
| — |
| — |
|
| — |
| — |
| 200,000 |
| 7,174,000 | |
| 9/12/2014 | (19) |
| — |
| — |
|
| — |
| — |
| 160,000 |
| 5,739,200 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Kevin Weil | 7/7/2009 | (20) |
| 16,000 |
| — |
|
| 0.1989 |
| 07/06/2019 |
| — |
| — | |
| 1/26/2011 | (21) |
| 24,904 |
| 3,334 |
|
| 2.2750 |
| 01/25/2021 |
| — |
| — | |
| 1/26/2011 | (22) |
| 540 |
| — |
|
| 2.2750 |
| 01/25/2021 |
| — |
| — | |
| 3/8/2013 | (23) |
| — |
| — |
|
| — |
| — |
| 70,313 |
| 2,522,127 | |
| 8/9/2013 | (24) |
| — |
| — |
|
| — |
| — |
| 103,125 |
| 3,699,094 | |
| 8/9/2013 | (25) |
| — |
| — |
|
| — |
| — |
| 360,000 |
| 12,913,200 | |
| 9/12/2014 | (19) |
| — |
| — |
|
| — |
| — |
| 60,000 |
| 2,152,200 | |
| 11/21/2014 | (18) |
| — |
| — |
|
| — |
| — |
| 240,000 |
| 8,608,800 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Vijaya Gadde | 7/28/2011 | (26) |
| — |
| — |
|
| — |
| — |
| 19,688 |
| 706,209 | |
| 8/9/2012 | (27) |
| — |
| — |
|
| — |
| — |
| 6,563 |
| 235,415 | |
| 3/8/2013 | (28) |
| — |
| — |
|
| — |
| — |
| 36,563 |
| 1,311,515 | |
| 8/9/2013 | (29) |
| — |
| — |
|
| — |
| — |
| 202,500 |
| 7,263,675 | |
| 10/23/2013 | (30) |
| — |
| — |
|
| — |
| — |
| 305,938 |
| 10,973,996 | |
| 9/12/2014 | (19) |
| — |
| — |
|
| — |
| — |
| 145,000 |
| 5,201,150 | |
OPTION AWARDS
| STOCK AWARDS
| ||||||||||||||||||||||||||||||||||
NAME
| GRANT
| NUMBER OF
| NUMBEROF
| OPTION ($) (2)
| OPTION
| NUMBER
| MARKET OF STOCK NOT
| ||||||||||||||||||||||||||||
Jack Dorsey
|
|
5/11/2011
|
(5)
|
|
2,000,000
|
|
|
—
|
|
|
3.115
|
|
|
05/10/2021
|
|
|
—
|
|
|
—
|
| ||||||||||||||
Anthony Noto
|
|
7/1/2014
|
(6)
|
|
281,250
|
|
|
218,750
|
|
|
42.05
|
|
|
06/30/2024
|
|
|
—
|
|
|
—
|
| ||||||||||||||
|
7/1/2014
|
(7)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
656,250
|
|
|
10,696,875
|
| |||||||||||||||
|
4/7/2016
|
(8)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
266,250
|
|
|
4,339,875
|
| |||||||||||||||
|
11/21/2016
|
(9)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
940,000
|
|
|
15,322,000
|
| |||||||||||||||
Omid Kordestani
|
|
10/29/2015
|
(10)
|
|
200,000
|
|
|
600,000
|
|
|
29.06
|
|
|
10/29/2025
|
|
|
—
|
|
|
—
|
| ||||||||||||||
Vijaya Gadde
|
|
3/8/2013
|
(11)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,063
|
|
|
66,227
|
| ||||||||||||||
|
8/9/2013
|
(12)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
60,750
|
|
|
990,225
|
| |||||||||||||||
|
10/23/2013
|
(13)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
83,438
|
|
|
1,360,039
|
| |||||||||||||||
|
9/12/2014
|
(14)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
145,000
|
|
|
2,363,500
|
| |||||||||||||||
|
2/10/2016
|
(15)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
460,000
|
|
|
7,498,000
|
| |||||||||||||||
Adam Bain
|
|
9/24/2010
|
(16)
|
|
1,664,025
|
|
|
—
|
|
|
0.845
|
|
|
5/31/2017
|
|
|
—
|
|
|
—
|
| ||||||||||||||
|
11/23/2010
|
(17)
|
|
373,000
|
|
|
—
|
|
|
1.83
|
|
|
5/31/2017
|
|
|
—
|
|
|
—
|
| |||||||||||||||
|
4/12/2012
|
(18)
|
|
217,526
|
|
|
—
|
|
|
14.42
|
|
|
5/31/2017
|
|
|
—
|
|
|
—
|
| |||||||||||||||
Adam Messinger
|
|
4/12/2012
|
(19)
|
|
18,188
|
|
|
—
|
|
|
14.42
|
|
|
3/22/2017
|
|
|
—
|
|
|
—
|
| ||||||||||||||
(1) | Each of the outstanding equity awards was granted pursuant to our 2007 Plan or 2013 Plan. |
(2) |
|
-33-
(3) | This column represents the fair market value of the shares of our common stock underlying the RSUs and PRSUs as of December 31, |
| (4) | Excludes PRSUs for the 2016 fiscal year performance period as described in the section titled “Executive Compensation—Compensation Discussion and Analysis—Elements of Pay and 2016 Compensation Decisions—Equity Compensation” on page 42. Excludes PRSUs for Messrs. Noto and Kordestani and Ms. Gadde for which performance targets have not yet been set or determined for fiscal years 2017—2019. |
| (5) | All of the shares of common stock subject to this option were fully vested as of May 9, 2015. 25% of the shares of our common stock subject to this option vested on May 9, 2012, and the balance vested in 36 successive equal monthly installments. |
| (6) | 16.67% of the shares of our common stock subject to this option vested on March 1, 2015, 8.33% of the shares of our common stock subject to this option vested on July 1, 2015, and the balance vests in twelve equal quarterly installments beginning on October 1, 2015, subject to continued service through each such vesting date. |
| (7) | 16.67% of the shares of our common stock underlying the RSUs vested on March 1, 2015, 8.33% of the shares of our common stock underlying the RSUs vested on July 1, 2015, and the balance vests in twelve equal quarterly installments beginning on October 1, 2015, subject to continued service through each such vesting date. |
| (8) | 50% of the shares of our common stock underlying 52,500 RSUs vested on May 1, 2016, and then 25% vest quarterly thereafter for the remaining two quarters; 25% of the shares of our common stock underlying 7,500 RSUs vest on February 1, 2017, and then vest quarterly |
| TWITTER, INC. / 2017 Proxy Statement | 51 | ||
EXECUTIVE COMPENSATION
Compensation Tables
| thereafter for the remaining three quarters; 25% of the shares of our common stock underlying 33,750 RSUs vest on February 1, 2018, and then vest quarterly thereafter for the remaining three quarters; and 25% of the shares of our common stock underlying 225,000 RSUs vest on February 1, 2019, and then vest quarterly thereafter for the remaining three quarters, subject to continued service through each such vesting date. |
| (9) | 25% of the shares of our common stock underlying 200,000 RSUs vest on February 1, 2017 and then 25% quarterly thereafter for the remaining three quarters; 25% of the shares of our common stock underlying 215,000 RSUs vest on February 1, 2018, and then 25% quarterly for the remaining three quarters; 25% of the shares of our common stock underlying 200,000 RSUs vest on February 1, 2019 and then 25% quarterly for the remaining three quarters; and 25% of the shares of our common stock underlying 325,000 RSUs vest on February 1, 2020 and then 25% quarterly for the remaining three quarters, subject to continued service through each such vesting date. |
| (10) | 25% of the shares of our common stock underlying this option vested on November 1, 2016, and the balance vests in twelve equal quarterly installments beginning on February 1, 2017, subject to continued service through each such vesting date. |
| (11) | 25% of the shares of our common stock underlying the RSUs vested on March 1, 2014, and the balance vests in twelve equal quarterly installments beginning on June 1, 2014, subject to continued service through each such vesting date. |
| (12) | 20% of the shares of our common stock underlying the RSUs vested on August 1, 2014. Beginning on November 1, 2014, an additional 1/20th of the total number of shares of our common stock underlying the RSUs vested in quarterly installments, and beginning November 1, 2015, an additional 3/40th of the total number of shares of our common stock underlying the RSUs vest in quarterly installments, subject to continued service through each such vesting date. |
| (13) | 25% of the shares of our common stock underlying the RSUs vested on September 1, 2014, and the balance vests in twelve equal quarterly installments beginning on December 1, 2014, subject to continued service through each such vesting date. |
| (14) | 11.11% of the shares of our common stock underlying the RSUs vest in nine equal quarterly installments beginning on October 1, 2017, subject to continued service through each such vesting date. |
| (15) | 25% of the shares of our common stock underlying 280,000 RSUs vested on May 1, 2016, and then 12.5% of the shares of our common stock underlying 280,000 RSUs vest quarterly thereafter for the remaining 6 quarters; 25% of the shares of our common stock underlying 200,000 RSUs vest on February 1, 2018, and then quarterly thereafter for the remaining 3 quarters; 25% of the shares of our common stock underlying 120,000 RSUs vest on February 1, 2019, and then quarterly thereafter for the remaining 3 quarters, subject to continued service through each such vesting date. |
| (16) | All of the shares of our common stock subject to this option were fully vested as of September |
| All of the shares of our common stock subject to this option were fully vested as of November 22, 2014. 25% of the shares of our common stock subject to this option vested on November 22, 2011, and the balance vested in |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| All of the shares of our common stock subject to this option were fully vested as of |
-34-
|
|
| All of the shares of our common stock subject to this option were fully vested as of |
| 52 | TWITTER, INC. / 2017 Proxy Statement |
| ||
|
|
EXECUTIVE COMPENSATION Compensation Tables |
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Exercises and Stock Vested in 20142016
The following table sets forth the number of shares of common stock acquired during 20142016 by our Named Executive Officers upon the exercise of stock options and the vesting of restricted stock unitRSU and PRSU awards and the value realized upon such exercise or vesting. These unit amounts have been adjusted, as applicable, to reflect (i) the three-for-one forward stock split completed in May 2010 and (ii) the two-for-one forward stock split completed in May 2011.
|
| Options Awards |
|
| Stock Awards |
| ||||||||||
Name |
|
| Number of Shares Acquired on Exercise (#)(1) |
|
| Value Realized on Exercise ($)(2) |
|
| Number of |
|
| Value |
| |||
Richard Costolo |
| — |
|
|
| — |
|
|
| 72,832 — |
|
|
| 3,564,398 |
| |
Anthony Noto |
| — |
|
|
| — |
|
|
| — |
|
|
| — |
| |
Mike Gupta |
| — |
|
|
| — |
|
|
| 539,668 |
|
|
| 23,822,609 |
| |
Alex Roetter |
| 15,625 |
|
|
| 533,873 |
|
|
| 409,275 |
|
|
| 18,985,636 |
| |
Kevin Weil |
| 310,000 |
|
|
| 10,918,285 |
|
|
| 221,562 |
|
|
| 9,411,679 |
| |
Vijaya Gadde |
| — |
|
|
| — |
|
|
| 326,350 |
|
|
| 15,681,830 |
| |
OPTIONS AWARDS
| STOCK AWARDS
| |||||||||||||||||||
NAME
| NUMBER
| VALUE REALIZED
| NUMBER
| VALUE ($)(4)
| ||||||||||||||||
Jack Dorsey
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
| ||||||||
Anthony Noto
|
|
—
|
|
|
—
|
|
|
443,484
|
|
|
8,565,495
|
| ||||||||
Omid Kordestani
|
|
—
|
|
|
—
|
|
|
71,040
|
|
|
1,157,952
|
| ||||||||
Vijaya Gadde
|
|
—
|
|
|
—
|
|
|
365,521
|
|
|
6,111,812
|
| ||||||||
Adam Bain
|
|
—
|
|
|
—
|
|
|
675,073
|
|
|
11,350,619
|
| ||||||||
Adam Messinger
|
|
27,768
|
|
|
94,691
|
|
|
457,881
|
|
|
7,617,690
|
| ||||||||
(1) | Reflects the aggregate number of shares of common stock underlying the stock options that were exercised in |
(2) | Calculated by multiplying (i) |
-35-
disposition price if the shares are disposed of in a disqualified disposition, minus the exercise price, by (ii) the number of shares of common stock acquired upon exercise. |
(3) | Reflects the aggregate number of shares of common stock underlying |
(4) | Calculated by multiplying (i) the fair market value of common stock on the vesting date, which was determined using the closing price on the |
Pension Benefits
Aside from our 401(k) 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.
Non-Qualified Deferred Compensation
We do not maintain any nonqualified deferred compensation plans or arrangements under which our Named Executive Officers are entitled to participate.
Hedging Policy
Our directors and executive officers are prohibited from hedging their ownership of Twitter stock, including trading in options, puts, calls, or other derivative instruments related to Company stock or debt.
Potential Payments Upon Termination or Change inof Control
All of our Named Executive Officers participate in our Severance Policy, which provides standardized payments and benefits to the Named Executive Officers in the event of an involuntary termination by Twitter or termination for “good reason” by the participantInvoluntary Termination (as defined below) either in connection with a change in controlChange of Control (as defined below) or during normal course of business in order to make these benefits consistent among the executives who have these arrangements. The compensation committee approves all plan participants under the Severance Policy and the level of benefit applicable to each plan participant. In the case of a change in controlChange of Control event, we believe that these arrangements
| TWITTER, INC. / 2017 Proxy Statement | 53 | ||
EXECUTIVE COMPENSATION
Compensation Tables
assist to maximize stockholder value and maintain executive focus in the immediate period prior to, during and after the change in controlChange of Control event. We do not have any requirement to make payments simply based on the occurrence of a Change of Control (“single trigger” provisions). The Severance Policy also includesdoes include a “double” trigger provision meaning that both a change in controlChange of Control and termination of employment must occur for the participant to receive the benefit. The material terms of these post-employment arrangements are set forth below, but generally each of our Named Executive Officers who signs and does not revoke aour standard separation agreement and release of claims, which currently includesnon-solicitation,non- disparagement and confidentiality conditions in connection with an involuntary terminationInvoluntary Termination of employment would be entitled to benefits, as specified in the participation agreement between that eligible employee and Twitter, as follows: (i) a lump sum severance payment equal to 100% of such eligible employee’s annual base salary whether or not such qualifying employment termination is in connection with a changeChange of control,Control, and a lump sum severance payment equal to 100% of such eligible employee’s annual base salary not in connection with a Change of Control, (ii) payment for up to 12 months under the Consolidated Omnibus Budget Reconciliation Act of COBRA1985 (“COBRA”) premiums to continue health insurance coverage for such eligible employee and his or her eligible dependents that were covered under our healthcare plan in connection with a changeChange of control,Control, and 6 months of such premiums upon a qualifying employment termination not in connection with a changeChange of control,Control, and (iii) acceleration of vesting of 50% (or 100% in the case of our CEOCOO/CFO and CFO)Executive Chairman) of the shares underlying all unvested equity awards held by such eligible employee immediately prior to such involuntary terminationInvoluntary Termination in connection with a changeChange of control,Control, and at least 12.5% for all eligible employees (including Twitter’s CEOCOO/CFO and CFO)Executive Chairman) for a qualifying employment termination not in connection with a changeChange of control.Control. The compensation committee reviews the equity acceleration percentage for each participant and will adjust as and when necessary to align with peer company practices.
-36-
NAME
| % OF BASE
| % OF
| % OF BASE
|
% OF ACCELERATED UPON
| ||||||||||||||||
Jack Dorsey
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
| ||||||||
Anthony Noto
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
12.5
|
%
| ||||||||
Omid Kordestani
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
12.5
|
%
| ||||||||
Vijaya Gadde
|
|
100
|
%
|
|
50
|
%
|
|
100
|
%
|
|
12.5
|
%
| ||||||||
Adam Bain
|
|
100
|
%
|
|
50
|
%
|
|
100
|
%
|
|
12.5
|
%
| ||||||||
Adam Messinger
|
|
100
|
%
|
|
50
|
%
|
|
100
|
%
|
|
12.5
|
%
| ||||||||
Name |
|
| % of Base Salary Upon Termination as a result of a CIC |
| % of Accelerated Vesting Upon Termination as a result of a CIC |
| % of Base Salary Upon Termination not in connection with a CIC |
| % of Accelerated Vesting Upon Termination not in connection with a CIC |
Richard Costolo |
| 100% |
| 100% |
| 100% |
| 12.5% | |
Anthony Noto |
| 100% |
| 100% |
| 50% |
| 12.5% | |
Mike Gupta |
| 100% |
| 100% |
| 100% |
| 17% | |
Alex Roetter |
| 100% |
| 50% |
| 100% |
| 12.5% | |
Kevin Weil |
| 100% |
| 50% |
| 100% |
| 12.5% | |
Vijaya Gadde |
| 100% |
| 50% |
| 100% |
| 12.5% | |
Specific to Mike Gupta,Jack Dorsey, as he elected to take no compensation for 2016 and has no unvested equity, he is ineligible to receive any benefits under the Severance Policy.
Specific to Adam Bain, upon his termination as Chief Operating Officer on August 8, 2014 we entered into an Amended & Restated Change in ControlNovember 30, 2016, he received no additional compensation under the Severance Policy Participation Agreement which providesexcept for the following separation benefits upon a voluntary termination on or before February 28, 2015 as follows: 50%pro- rata amount of base salary earned through the date of termination and therefore is not included in the termination table below.
Specific to Adam Messinger, upon a voluntary termination; 12.5%his termination as Chief Technology Officer on December 22, 2016, he received no additional compensation under the Severance Policy except for thepro- rata amount of accelerated vesting upon a voluntary termination;base salary earned through the
date of termination and six (6) months of COBRA benefit.therefore is not included in the termination table below.
“Involuntary Termination”Termination” means a termination of employment by Twitter other than for Cause, death or Disabilitydisability or a termination of employment by the employee for Good Reason.
“Good Reason”Reason” means termination of employment within thirty (30) days following the “notice and cure period” in the next paragraph following the occurrence of one or more of the following events, without the employee’s express written consent: (a) a material adverse change in the nature or scope of the employee’s authority, powers, functions, duties, responsibilities, or reporting relationship (including ceasing
| 54 | TWITTER, INC. / 2017 Proxy Statement |
| ||
EXECUTIVE COMPENSATION
Compensation Tables
to directly report to the chief executive officer or board of directors of a publicly traded entity, as applicable); (b) a material reduction by Twitter in the employee’s rate of annual base salary; (c) the failure of the CompanyTwitter to continue any material compensation plan in which the employee is participating, unless the employee is permitted to participate in other plans providing the employee with substantially comparable compensation-related benefits, or the taking of any action by Twitter which would adversely affect the employee’s participation in or materially reduce the employee’s compensation-related benefits under any such plan; or (d) the failure of Twitter to obtain from any successor or transferee of Twitter an express written and unconditional assumption of Twitter’s obligations under the Severance Policy.
Employment may be terminated by the employee for Good Reason only if an event or circumstance set forth in the Good Reason definitions as specified in (a) through (d) above shall have occurred and the employee provides Twitter with written notice thereof within ninety (90) days after the employee has knowledge of the occurrence or existence of such event or circumstance, which notice shall specifically identify the event or circumstance that the employee believes constitutes Good Reason, Twitter fails to correct the circumstance or event so identified within thirty (30) days after the receipt of such notice, and the employee resigns after the expiration of the cure period referenced in the preceding clause.
“Cause”Cause” means (a) the unauthorized use or disclosure of Twitter’s confidential information or trade secrets, which use or disclosure causes material harm to the Company;Twitter; (b) the breach of any agreement between the employee and Twitter; (c) the failure to comply with the Company’sTwitter’s written policies or rules, including its code of conduct; (d) the conviction of, or plea of “guilty” or “no contest” to, a felony under the laws of the United States or any state thereof; (e) gross negligence or willful misconduct in the performance of the employee’s duties; (f) the continuing failure to perform assigned duties after receiving written notification of the failure from the board of directors (or for Eligible Employeeseligible employees other than the Chief Executive Officer, from the Chief Executive Officer); or (g) the failure to cooperate in good faith with a governmental or internal investigation of Twitter or its directors, officers or employees, if Twitter has requested cooperation; provided, however, that “Cause” will not be deemed to exist in the event of subsections (b), (c) or (f) above unless the employee has been provided with (i) 30 days’ written notice by the Boardboard of directors or the act or
omission constituting “Cause” and (ii) 30 days’ opportunity to cure such act or omission, if capable of cure.
“Change of Control”Control” means the occurrence of any of the following events:
A. Change in Ownership of Twitter. A change in the ownership of Twitter which occurs on the date that any one person, or more than one person acting as a group (“Person”Person”), acquires ownership of the stock of Twitter
-37-
that, together with the stock held by such Person, constitutes more than fifty percent (50%) of the total voting power of the stock of Twitter; provided, however, that the acquisition of additional stock by any one Person who is considered to own more than fifty percent (50%) of the total voting power of the stock of Twitter will not be considered a Change of Control; or
B. Change in Effective Control of Twitter. If Twitter has a class of securities registered pursuant to Section 12 of the Exchange Act, a change in the effective control of Twitter which occurs on the date that a majority of members of the board of directors is replaced during any 12 month period by directors whose appointment or election is not endorsed by a majority of the members of the board of directors prior to the date of the appointment or election. For purposes of this clause (B), if any Person is considered to be in effective control of Twitter, the acquisition of additional control of Twitter by the same Person will not be considered a Change of Control; or
C. Change in Ownership of a Substantial Portion of Twitter’s Assets. A change in the ownership of a substantial portion of Twitter’s assets which occurs on the date that any Person acquires (or has acquired during the 12 month period ending on the date of the most recent acquisition by such person or persons) assets from Twitter that have a total gross fair market value equal to or more than 50% of the total gross fair market value of all of the assets of Twitter immediately prior to such acquisition or acquisitions; provided, however, that for purposes of this subsection, the following will not constitute a change in the ownership of a substantial portion of Twitter’s assets: (i) a transfer to an entity that is controlled by Twitter’s stockholders immediately after the transfer, or (ii) a transfer of assets by Twitter to: (a) a stockholder of Twitter (immediately before the asset transfer) in exchange for or with respect to Twitter’s stock, (b) an entity, fifty percent (50%) or
| TWITTER, INC. / 2017 Proxy Statement | 55 | ||
EXECUTIVE COMPENSATION
Compensation Tables
more of the total value or voting power of which is owned, directly or indirectly, by Twitter, (c) a Person, that owns, directly or indirectly, fifty percent (50%) or more of the total value or voting power of all the outstanding stock of Twitter, or (d) an entity, at least fifty percent (50%) of the total value or voting power of which is owned, directly or indirectly, by a Person.
Notwithstanding the foregoing, a transaction will not be deemed a Change of Control unless the transaction qualifies as a change inof control event within the meaning of Section 409A.409A of the Code.
The table below outlines the estimated amount of payments and benefits that we would provide to our Named Executive Officers assuming that their employment was terminated as
of December 31, 20142016 (including in connection with a change in control)Change of Control) and the price per share of common stock was $35.87,$16.30, the closing market price on December 31, 201430, 2016 (the last trading day of 2014)2016). None of our Named Executive Officers are currently entitled to retirement benefits or additional benefits upon voluntary termination, death or disability.
The employment of the Named Executive Officers did not actually terminate on December 31, 2014,2016, nor did Twitter incur a change in controlChange of Control on December 31, 2014.2016. As a result, the Named Executive Officers did not receive any of the amounts shown in the table below. The actual amounts to be paid to a Named Executive Officer in connection with a termination event or a change in controlChange of Control event can only be determined at the time of such termination event.
| 56 | TWITTER, INC. / 2017 Proxy Statement |
| ||
EXECUTIVE COMPENSATION
Compensation Tables
-38-
Each Named Executive Officer is entitled to receive amounts earned during the term of employment regardless of the manner of termination. These amounts include accrued base salary and other employee benefits to which the Named Executive Officer was entitled on the date of termination, and are not shown in the table below.
Executive |
|
| Payment Elements |
| Qualifying |
| Termination |
| Voluntary Termination ($) | ||
Richard Costolo |
| Salary |
| 14,000 |
|
| 14,000 |
|
| — | |
|
| Stock Options |
| 7,290,555 |
|
| 911,319 |
|
| — | |
|
| Restricted Stock Units |
| 18,287,530 |
|
| 2,285,941 |
|
| — | |
|
| Health Coverage(2) |
| 19,926 |
|
| 9,963 |
|
| — | |
|
| Total |
| 25,612,011 |
|
| 3,221,223 |
|
| — | |
Anthony Noto |
| Salary |
| 250,000 |
|
| 125,000 |
|
| — | |
|
| Stock Options |
| — |
|
| — |
|
| — | |
|
| Restricted Stock Units |
| 53,805,000 |
|
| 6,725,605 |
|
| — | |
|
| Health Coverage(2) |
| 19,926 |
|
| 9,963 |
|
| — | |
|
| Total |
| 54,074,926 |
|
| 6,860,568 |
|
| — | |
Mike Gupta |
| Salary |
| 250,000 |
|
| 250,000 |
|
| 125,000 | |
|
| Stock Options |
| — |
|
| — |
|
| — | |
|
| Restricted Stock Units |
| 28,920,188 |
|
| 4,916,132 |
|
| 3,615,024 | |
|
| Health Coverage(2) |
| 19,926 |
|
| 19,926 |
|
| 9,963 | |
|
| Total |
| 29,190,114 |
|
| 5,186,058 |
|
| 3,749,987 | |
Alex Roetter |
| Salary |
| 375,000 |
|
| 375,000 |
|
| — | |
|
| Stock Options |
| — |
|
| — |
|
| — | |
|
| Restricted Stock Units |
| 16,517,024 |
|
| 4,129,256 |
|
| — | |
|
| Health Coverage(2) |
| 19,926 |
|
| 9,963 |
|
| — | |
|
| Total |
| 16,911,950 |
|
| 4,514,219 |
|
| — | |
Kevin Weil |
| Salary |
| 375,000 |
|
| 375,000 |
|
| — | |
|
| Stock Options |
| 56,003 |
|
| 14,001 |
|
| — | |
|
| Restricted Stock Units |
| 14,947,711 |
|
| 3,736,928 |
|
| — | |
|
| Health Coverage(2) |
| 15,667 |
|
| 7,834 |
|
| — | |
|
| Total |
| 15,394,381 |
|
| 4,133,763 |
|
| — | |
Vijaya Gadde |
| Salary |
| 370,000 |
|
| 370,000 |
|
| — | |
|
| Stock Options |
| — |
|
| — |
|
| — | |
|
| Restricted Stock Units |
| 12,845,980 |
|
| 3,211,495 |
|
| — | |
|
| Health Coverage(2) |
| 15,021 |
|
| 7,510 |
|
| — | |
|
| Total |
| 13,231,001 |
|
| 3,589,005 |
|
| — | |
EXECUTIVE
| PAYMENT ELEMENTS
|
INVOLUNTARY TERMINATION
| INVOLUNTARY
| VOLUNTARY
| ||||||||||||||||
Jack Dorsey
|
Salary
|
|
—
|
|
|
—
|
|
|
—
|
| ||||||||||
Stock Options
|
|
—
|
|
|
—
|
|
|
—
|
| |||||||||||
PRSUs (1)
|
|
—
|
|
|
—
|
|
|
—
|
| |||||||||||
RSUs
|
|
—
|
|
|
—
|
|
|
—
|
| |||||||||||
Health Coverage (2)
|
|
—
|
|
|
—
|
|
|
—
|
| |||||||||||
Total
|
|
—
|
|
|
—
|
|
|
—
|
| |||||||||||
Anthony Noto
|
Salary
|
|
500,000
|
|
|
500,000
|
|
|
—
|
| ||||||||||
Stock Options
|
|
—
|
|
|
—
|
|
|
—
|
| |||||||||||
PRSUs (1)
|
|
5,664,250
|
|
|
708,031
|
|
|
—
|
| |||||||||||
RSUs
|
|
30,358,750
|
|
|
3,794,844
|
|
|
—
|
| |||||||||||
Health Coverage (2)
|
|
22,509
|
|
|
11,255
|
|
|
—
|
| |||||||||||
Total
|
|
36,545,509
|
|
|
5,014,130
|
|
|
—
|
| |||||||||||
Omid Kordestani
|
Salary
|
|
50,000
|
|
|
50,000
|
|
|
—
|
| ||||||||||
Stock Options
|
|
—
|
|
|
—
|
|
|
—
|
| |||||||||||
PRSUs (1)
|
|
6,520,000
|
|
|
815,000
|
|
|
—
|
| |||||||||||
RSUs
|
|
—
|
|
|
—
|
|
|
—
|
| |||||||||||
Health Coverage (2)
|
|
22,509
|
|
|
11,255
|
| ||||||||||||||
Total
|
|
6,592,509
|
|
|
876,255
|
|
|
—
|
| |||||||||||
Vijaya Gadde
|
Salary
|
|
500,000
|
|
|
500,000
|
|
|
—
|
| ||||||||||
Stock Options
|
|
—
|
|
|
—
|
|
|
—
|
| |||||||||||
PRSUs (1)
|
|
1,956,000
|
|
|
489,000
|
|
|
—
|
| |||||||||||
RSUs
|
|
6,138,996
|
|
|
1,534,749
|
|
|
—
|
| |||||||||||
Health Coverage (2)
|
|
16,998
|
|
|
8,499
|
|
|
—
|
| |||||||||||
Total
|
|
8,611,994
|
|
|
2,532,248
|
|
|
—
|
| |||||||||||
Adam Bain (3)
|
Salary
|
|
—
|
|
|
—
|
|
|
—
|
| ||||||||||
Stock Options
|
|
—
|
|
|
—
|
|
|
—
|
| |||||||||||
PRSUs(1)
|
|
—
|
|
|
—
|
|
|
—
|
| |||||||||||
RSUs
|
|
—
|
|
|
—
|
|
|
—
|
| |||||||||||
Health Coverage (2)
|
|
—
|
|
|
—
|
|
|
—
|
| |||||||||||
Total
|
|
—
|
|
|
—
|
|
|
—
|
| |||||||||||
Adam Messinger (4)
|
Salary
|
|
—
|
|
|
—
|
|
|
—
|
| ||||||||||
Stock Options
|
|
—
|
|
|
—
|
|
|
—
|
| |||||||||||
PRSUs (1)
|
|
—
|
|
|
—
|
|
|
—
|
| |||||||||||
RSUs
|
|
—
|
|
|
—
|
|
|
—
|
| |||||||||||
Health Coverage (2)
|
|
—
|
|
|
—
|
|
|
—
|
| |||||||||||
Total
|
|
—
|
|
|
—
|
|
|
—
|
| |||||||||||
| TWITTER, INC. / 2017 Proxy Statement | 57 | ||
EXECUTIVE COMPENSATION
Compensation Tables
(1) |
|
(2) | Represents six months of Twitter-paid insurance coverage under |
| (3) | Mr. Bain voluntarily terminated his employment on November 30, 2016 and therefore was not employed with us as of December 31, 2016. Due to the voluntary |
| (4) | Mr. Messinger voluntarily terminated his employment on December 22, 2016 and therefore was not employed with us as of December 31, 2016. Due to the voluntary nature of Mr. Messinger’s termination, no termination benefits were received. |
| 58 | TWITTER, INC. / 2017 Proxy Statement |
| ||
EQUITY COMPENSATION PLAN INFORMATION
-39-
EQUITY COMPENSATION PLAN INFORMATION
The following table gives information about shares of our common stock that may be issued upon the exercise of options, warrants and rights under all of our existing equity compensation plans as of December 31, 2014,2016, including our Twitter, Inc. Employee Stock Purchase Plan.Plan (the “Purchase Plan”). No warrants are outstanding under any of the foregoing plans. We refer to these plans and grants collectively as our Equity“Equity Compensation Plans.”
Plan Category |
|
| (a) Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights |
|
| (b) Weighted Average Exercise Price of Outstanding Options, Warrants and Rights |
|
| (c) Number of Securities Remaining Available for Future Issuance Under equity Compensation Plans (Excluding Securities reflected in Column (a)) |
|
Equity compensation plans approved by security holders |
| 78,070,829 | (1) |
| $3.59 | (2) |
| 112,926,670 | (3) | |
Equity compensation plans not approved by security holders (4) |
| 1,409,630 |
|
| $2.18 |
|
| 0 |
| |
Total |
| 79,480,459 |
|
| $3.48 |
|
| 112,926,670 |
| |
PLAN CATEGORY
| (A) NUMBER OF
| (B) WEIGHTED
|
(C) NUMBER OF FUTURE ISSUANCE UNDER EQUITY (EXCLUDING
| ||||||||||||
Equity compensation plans approved by security holders
|
|
55,319,218
|
(1)
|
$
|
8.87
|
(2)
|
|
146,224,356
|
(3)
| ||||||
Equity compensation plans not approved by security holders (4)
|
|
1,485,093
|
|
$
|
2.04
|
| |||||||||
Total
|
|
56,804,311
|
|
$
|
7.70
|
|
|
146,224,356
|
| ||||||
(1) | This amount includes the following shares that may be issued under the 2007 Equity Incentive Plan (“2007 Plan”), 2013 Plan |
|
|
|
|
|
|
| Indicates a weighted average price for |
(3) | As of December 31, |
(4) | Includes |
| TWITTER, INC. / 2017 Proxy Statement | 59 | ||
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information with respect to the beneficial ownership of shares of our common stock as of March 31, 2015the Record Date for:
| each of our directors and nominees for director; |
|
|
|
|
|
|
-40-
We have determined beneficial ownership in accordance with the rules of the SEC, and thus it represents sole or shared voting or investment power with respect to our securities. Unless otherwise indicated below, to our knowledge, the persons and entities named in the table have sole voting and sole investment power with respect to all shares that they beneficially owned, subject to community property laws where applicable.
We have based our calculation of the percentage of beneficial ownership on 653,140,575729,753,976 shares of our common stock outstanding as of March 31, 2015.the Record Date. We have deemed shares of our common stock subject to stock options that are currently exercisable or exercisable within 60 days of March 31, 2015the Record Date or issuable pursuant to RSUs and PRSUs which are subject to vesting conditions expected to occur within 60 days of March 31, 2015the Record Date to be outstanding and to be beneficially owned by the person holding the stock option, RSU or RSUPRSU for the purpose of computing the percentage ownership of that person. We did not deem these shares outstanding, however, for the purpose of computing the percentage ownership of any other person.
Unless otherwise indicated, the address of each beneficial owner listed in the table below is c/o Twitter, Inc., 1355 Market Street, Suite 900, San Francisco, California 94103. The information provided in the table is based on our records, information filed with the SEC and information provided to us, except where otherwise noted.
Name of Beneficial Owner |
|
| Number of |
|
| Percentage of |
| ||
Named Executive Officers and Directors: |
|
|
|
|
|
|
|
| |
Richard Costolo (1) |
|
| 8,040,091 |
|
|
| 1.22% |
| |
Anthony Noto (2) |
|
| 206,596 |
|
|
| * |
| |
Vijaya Gadde (3) |
|
| 92,121 |
|
|
| * |
| |
Alexander Roetter (4) |
|
| 51,138 |
|
|
| * |
| |
Kevin Weil (5) |
|
| 268,199 |
|
|
| * |
| |
Jack Dorsey (6) |
|
| 23,824,886 |
|
|
| 3.64% |
| |
Peter Chernin (7) |
|
| 112,500 |
|
|
| * |
| |
Peter Currie (8) |
|
| 362,916 |
|
|
| * |
| |
Peter Fenton (9) |
|
| 17,885,077 |
|
|
| 2.74% |
| |
David Rosenblatt (10) |
|
| 350,000 |
|
|
| * |
| |
Marjorie Scardino (11) |
|
| 4,018 |
|
|
| * |
| |
Evan Williams (12) |
|
| 51,107,193 |
|
|
| 7.82% |
| |
All executive officers and directors as a group (13 persons) (13) |
|
|
|
|
|
|
|
| |
NAME OF BENEFICIAL OWNER
| NUMBER OF
|
PERCENTAGE OF SHARES
| ||||||||
Named Executive Officers and Directors:
| ||||||||||
Jack Dorsey (1)
|
|
17,468,426
|
|
|
2.39
|
%
| ||||
Omid R. Kordestani (2)
|
|
464,886
|
|
|
*
|
| ||||
Anthony Noto (3)
|
|
1,056,581
|
|
|
*
|
| ||||
Vijaya Gadde (4)
|
|
429,749
|
|
|
*
|
| ||||
Adam Bain
|
|
0
|
|
|
*
|
| ||||
Adam Messinger
|
|
0
|
|
|
*
|
| ||||
Debra Lee (5)
|
|
15,614
|
|
|
*
|
| ||||
Bret Taylor (6)
|
|
8,293
|
|
|
*
|
| ||||
Peter Fenton (7)
|
|
3,750,643
|
|
|
*
|
| ||||
Martha Lane Fox (8)
|
|
15,614
|
|
|
*
|
| ||||
Hugh Johnston (9)
|
|
21,165
|
|
|
*
|
| ||||
Marjorie Scardino (10)
|
|
29,966
|
|
|
*
|
| ||||
David Rosenblatt (11)
|
|
343,236
|
|
|
*
|
| ||||
Evan Williams (12)
|
|
43,675,288
|
|
|
5.98
|
%
| ||||
All executive officers and directors as a group (12 persons) (13)
|
|
67,279,461
|
|
|
9.18
|
%
| ||||
Other 5% Stockholders:
| ||||||||||
The Vanguard Group (14)
|
|
44,177,825
|
|
|
6.05
|
%
| ||||
| 60 | TWITTER, INC. / 2017 Proxy Statement |
| ||
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
* | Represents beneficial ownership of less than one percent (1%) of the outstanding shares of our common stock. |
(1) |
|
|
|
|
|
|
|
| Consists of (i) |
|
|
-41-
|
|
| Consists of |
| Consists of (i) |
| (4) | Consists of (i) 374,499 shares held of record by |
| (5) | Consists of (i) 11,710 shares held of record by |
| (6) | Consists of (i) 5,529 shares held of record by |
| (7) | Consists of |
| (8) | Consists of (i) 11,710 shares held of record by Ms. Lane Fox and |
| Consists |
| (10) | Consists of (i) 26,062 shares held of record by Ms. Scardino and (ii) 3,904 shares issuable upon vesting of RSUs within 60 days of the Record Date. |
| (11) | Consists of (i) 39,332 shares held of record by Mr. Rosenblatt, (ii) 300,000 shares issuable pursuant to outstanding stock options which are exercisable within 60 days of |
|
|
| Consists of (i) |
(13) | Consists of (i) |
| (14) | According to the information reported by The Vanguard Group (“Vanguard”) on a Schedule 13G filed with the SEC on February 13, 2017, Vanguard beneficially owns an aggregate of 44,177,825 shares, which consists of (i) 484,837 shares as to which Vanguard has sole voting power, (ii) 93,475 shares as to which Vanguard has shared voting power, (iii) 43,600,013 shares as to which Vanguard has sole dispositive power and (iv) 577,812 shares as to which Vanguard has shared dispositive power. |
| TWITTER, INC. / 2017 Proxy Statement | 61 | ||
-42-
RELATED PERSON TRANSACTIONS
We describe below transactions and series of similar transactions, since the beginning of our last fiscal year, to which we were a party or will be a party, in which:
| the amounts involved exceeded or will exceed $120,000; and |
|
|
We have entered into change in control agreements with certain
The sister of Vijaya Gadde, our General Counsel and Secretary, is employed by us as Manager, Strategic Publisher Management. Her annual salary and other cash compensation is approximately $185,000, and she receives benefits consistent with other employees serving in Control and Severance Policy that, among other things, provides for certain severance and change in control benefits. See the section titled and “Executive Compensation—Potential Payments upon Termination or Change in Control.”
We have entered into indemnification agreements with our directors and executive officers. The indemnification agreements and our certificatesame capacity. In addition, she received a grant of incorporation and bylaws require us to indemnify our directors and executive officers to5,530 RSUs during the fullest extent permitted by Delaware law.year ended December 31, 2016.
Other than as described above, since January 1, 2014,2016, we have not entered into any transactions, nor are there any currently proposed transactions, between us and a related partyperson where the amount involved exceeds, or would exceed, $120,000, and in which any related person had or will have a direct or indirect material interest. We believe the terms of the transactions described above were comparable to terms we could have obtained inarm’s-length dealings with unrelated third parties.
Policies and Procedures for Related PartyPerson Transactions
Our audit committee has the primary responsibility for reviewing and approving or ratifying related partyperson transactions. We have a formal written policy providing that a related partyperson transaction is any transaction between us and an executive officer, director, nominee for director, beneficial owner of more than 5% of any class of our capital stock, or any member of the immediate family of any of the foregoing persons, in which such party has a direct or indirect material interest and the aggregate amount involved exceeds $120,000. In reviewing any related partyperson transaction, our audit committee is to consider the relevant facts and circumstances available to our audit committee, including, whether the transaction is on terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances, and the extent of the related party’sperson’s interest in the transaction. Our audit committee has determined that certain transactions will be deemed to bepre-approved by our audit committee, including certain executive officer and director compensation, transactions with another company at which a related party’sperson’s only relationship is as anon-executive employee, director or beneficial owner of less than 10% of that company’s shares and the aggregate amount involved does not exceed the greater of $200,000 or 2% of the company’s total revenues, transactions where a related party’sperson’s interest arises solely from the ownership of our common stock and all holders of our common stock received the same benefit on a pro rata basis, and transactions available to all employees generally. If advance approval of a transaction is not feasible, the chair of our audit committee may approve the transaction and the transaction may be ratified by our audit committee in accordance with our formal written policy.
| 62 | TWITTER, INC. / 2017 Proxy Statement |
| ||
-43-
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires that our executive officers and directors, and persons who own more than 10% of our common stock, file reports of ownership and changes of ownership with the SEC. Such directors, executive officers and 10% stockholders are required by SEC regulation to furnish us with copies of all Section 16(a) forms they file.
SEC regulations require us to identify in this proxy statement anyone who filed a required report late during the most recent fiscal year. Based on our review of forms we received, or written representations from reporting persons stating that they were not required to file these forms, we believe that during our fiscal ended December 31, 2014,2016, all
Section 16(a) filing requirements were satisfied on a timely basis.basis, except with respect to the following failures to timely file (i) a Form 4 for Robert Kaiden (filed with the SEC on June 8, 2016), (ii) a Form 4/A for Adam Bain (filed with the SEC on November 4, 2016) to report a previously omitted sale and (iii) a Form 4/A for Vijaya Gadde (filed with the SEC on November 4, 2016) to report a previously omitted sale.
Fiscal Year 20142016 Annual Report and SEC Filings
Our financial statements for our fiscal year ended December 31, 20142016 are included in our Annual Report on Form10-K, which we will make available to stockholders at the same time as this proxy statement. This proxy statement and our annual report are posted on our website at
http://investor.twitterinc.com and are available from the SEC at its website at http://www.sec.gov. You may also obtain a copy of our annual report without charge by sending a written request to Twitter, Inc., Attention: Investor Relations, 1355 Market Street, Suite 900, San Francisco, California 94103.
* * *
The board of directors does not know of any other matters to be presented at the Annual Meeting. If any additional matters are properly presented at the Annual Meeting, the persons named in the enclosed proxy card will have discretion to vote the shares of our common stock they represent in accordance with their own judgment on such matters.
It is important that your shares of our common stock be represented at the Annual Meeting, regardless of the number of shares that you hold. You are, therefore, urged to vote by telephone or by using the Internet as instructed on the enclosed proxy card or execute and return, at your earliest convenience, the enclosed proxy card in the envelope that has also been provided.
THE BOARD OF DIRECTORS
San Francisco, California
April 7, 2017
|
| TWITTER, INC. / 2017 Proxy Statement | 63 | |
| ||||
| ||||
-44-
TWITTER, INC.
Annual Meeting of Stockholders June 3, 2015
May 22, 2017 at 2:10:00 PMAM PDT
This Proxy is solicited on behalf of the Board of Directors of Twitter, Inc.
The stockholder(s) hereby appoint(s) Richard Costolo,Jack Dorsey, Anthony Noto and Vijaya Gadde, or any of them, as proxies, each with the power to appoint his or her substitute, and hereby authorize(s) them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of common stock of TWITTER, INC. that the stockholder(s) is/are entitled to vote at the Annual Meeting of Stockholders to be held at 2:10:00 PMAM PDT on June 3, 2015,May 22, 2017, at Yerba Buena Center for the Arts, YBCA Forum, 701 MissionTwitter, Inc.’s San Francisco offices located at 1355 Market Street, San Francisco, California 94103 and any adjournment or postponement thereof.
This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted in accordance with the Board of Directors’ recommendations.
CONTINUED AND TO BE MARKED, DATED AND SIGNED ON THE OTHER SIDE
pPLEASE DETACH ALONG PERFORATED LINE AND MAIL IN THE ENVELOPE PROVIDED.p
Important Notice Regarding the Availability of Proxy Materials
for the Annual Meeting:
The Notice and Proxy Statement and Annual Report are available at
http://www.viewproxy.com/twitter/2015.Twitter/2017
The Board of Directors recommends you vote FOR the following nominees for director: | ||||||||||
| 1. | Election of Directors | |||||||||
Nominees: | FOR | AGAINST | ABSTAIN | |||||||
01 Omid R. Kordestani | ☐ | ☐ | ☐ | |||||||
02 Marjorie Scardino | ☐ | ☐ | ☐ | |||||||
03 Bret Taylor | ☐ | ☐ | ☐ | |||||||
DO NOT PRINT IN THIS AREA (Shareholder Name & Address Data) |
| ☐ | Change of Address — Please print new address below | |||||||||
Please mark your votes like this ☒ | ||||||||
| The Board of Directors recommends you vote FOR the following proposal: | ||||||||
FOR | AGAINST | ABSTAIN | ||||||
| 2. | To approve, on an advisory basis, the compensation of our named executive officers. | ☐ | ☐ | ☐ | ||||
| The Board of Directors recommends you vote FOR the following proposal: | ||||||||
| 3. | Ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for our fiscal year ending December 31, 2017. | ☐ | ☐ | ☐ | ||||
| The Board of Directors recommends you vote AGAINST the following proposal: | ||||||||
| 4. | A stockholder proposal regarding a report on users owning the Twitter platform. | ☐ | ☐ | ☐ | ||||
NOTE:Such other business as may properly come before the meeting and any adjournment or postponement thereof. | ||
| I plan to attend the meeting ☐ | ||
| Date: | ||
| Signature | ||
| Signature (if held jointly) | ||
| NOTE: This proxy should be marked, dated and signed by each stockholder exactly as such stockholder’s name appears hereon, and returned promptly in the enclosed envelope. When shares are held jointly, each holder should sign. When signing as an executor, administrator, attorney, trustee or guardian please give full title as such. If the signatory is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If the signatory is a partnership, please sign in the partnership name by authorized person. | ||
| CONTROL NUMBER | ||||||||||||
|
Please mark your votes like this xp The Board of Directors recommends you vote FOR the following nominees for director: 1. Election of Directors Nominees: FOR ALL WITHHOLD FOR ALL FOR ALL EXCEPT 01 David Rosenblatt 02 Evan Williams ooo INSTRUCTIONS: To withhold authority to vote for any individual, mark, “For All Except” and write the nominee’s name(s) on the line below. Address Change/Comments: (If you noted any Address Changes and/or Comments above, please mark box.) o t The Board of Directors recommends you vote 1 YEAR for the following proposal: 1 year 2 years 3 years ABSTAIN 2. To approve, on an advisory basis, the frequency of future stockholder oooo advisory votes on the compensation of our named executive officers. The Board of Directors recommends you vote FOR the following proposal: FOR AGAINST ABSTAIN 3. Ratification of the appointment of PricewaterhouseCoopers LLP as the Company’s ooo independent registered public accounting firm for the fiscal year ending December 31, 2015. NOTE: Such other business as may properly come before the meeting and any adjournment or postponement thereof. I plan to attend the meeting o Date:______________________________________________________ __________________________________________________________ Signature __________________________________________________________ Signature (if held jointly) NOTE: This proxy should be marked, dated and signed by each stockholder exactly as such stockholder's name appears hereon, and returned promptly in the enclosed envelope. When shares are held jointly, each holder should sign. When signing as an executor, administrator, attorney, trustee or guardian please give full title as such. If the signatory is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If the signatory is a partnership, please sign in the partnership name by authorized person. CONTROL NUMBER PLEASE DETACH ALONG PERFORATED LINE AND MAIL IN THE ENVELOPE PROVIDED.p
| CONTROL NUMBER | ||||||
|
PROXY VOTING INSTRUCTIONS
Please have your 11-digit control number ready when voting by Internet or Telephone INTERNET Vote Your Shares on the Internet: Go to www.cesvote.com Have your proxy card available when you access the above website. Follow the prompts to vote your shares. TELEPHONE Vote Your Shares by Phone: Call 1 (888) 693-8683 Use any touch-tone telephone to vote your Shares. Have your proxy card available when you call. Follow the voting instructions to vote your shares. MAIL Vote Your Shares by Mail: Mark, sign, and date your proxy card, then detach it, and return it in the postage-paid envelope provided.
|
|
| ||||||
| INTERNET | TELEPHONE | |||||||
| Vote Your Shares on the Internet: | Vote Your Shares by Phone: Call 1 (866)804-9616 | Vote Your Shares by Mail: | ||||||
Go towww.AALvote.com/TWTR Have your proxy card available when you access the above website. Follow the prompts to vote your shares. | Use any touch-tone telephone to vote your shares. Have your proxy card available when you call. Follow the voting instructions to vote your shares. | Mark, sign, and date your proxy card, then detach it, and return it in the postage-paid envelope provided. |
