UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant ☒
Filed by a Party other than the Registrant ☐
Check the appropriate box:
☐ | 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 under §240.14a-12 |
Cars.com Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
☒ | No fee required. | |
☐ | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. | |
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| (2) | Aggregate number of securities to which transaction applies: |
| (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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| (5) | Total fee paid: |
☐ | 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: |
| (2) | Form, Schedule or Registration Statement No.: |
| (3) | Filing Party: |
| (4) | Date Filed: |
Cars.com Inc.
300 S. Riverside Plaza, Suite 1000
Chicago, Illinois 60606
Notice of 20182021 Annual Meeting of Stockholders
We are pleased to invite you to the 20182021 Annual Meeting of Stockholders (the “Annual Meeting”) of Cars.com Inc. (the “Company”“Company,” “our,” “us” or “we”), which will take place at 9:00 a.m., Central Time, on Friday, May 18, 2018 at the offices of Latham & Watkins LLP, 330 N. Wabash Avenue, Suite 2800, Chicago, Illinois 60611.Wednesday, June 9, 2021. This will be the Company’s first annualyear’s meeting of stockholders since the separation from its former parent, TEGNA Inc.is a virtual meeting at:
Date:Wednesday, June 9, 2021
Time:9:00 a.m., on May 31, 2017.Central Time
The proxy statement forVirtual Meeting Site: http://www.virtualshareholdermeeting.com/CARS2021.
If you plan to attend the Annual Meeting, and accompanyingplease note the procedures described under “How can I participate in the Annual Meeting?” on page 3 of the proxy card is first being mailed to stockholders on or about April 13, 2018.statement.
The purposes of the Annual Meeting are to:
| 1. | elect a board of |
| 2. | ratify the appointment of Ernst & Young LLP, an independent registered public accounting firm, as our independent certified public accountants for fiscal year |
| 3. | approve on a non-binding advisory basis the compensation of our Named Executive Officers (as defined below); and |
4. | transact any other business that may properly come before the meeting or any |
Only stockholders of record atas of the close of business on March 21, 2018April 12, 2021 are entitled to receive notice of, to attend and to vote at the Annual Meeting. If you plan
We have elected to attendtake advantage of Securities and Exchange Commission (“SEC”) rules that allow companies to furnish their proxy materials over the Annual Meeting in person, please note the admission procedures described under “How Can I Attend the Annual Meeting?”Internet. Beginning on page 4or about April 30, 2021, a Notice of Internet Availability of Proxy Materials (the “Notice”) will be mailed to our stockholders of record as of April 12, 2021. In addition, the proxy statement.statement, the proxy or voting instruction card, and our 2020 Annual Report to Stockholders are available at www.proxyvote.com. As more fully described in the Notice, all stockholders may choose to access these materials electronically or may request printed or emailed copies.
It is extremely important that your shares be represented and voted at the Annual Meeting. Whether or not you plan to attend the Annual Meeting, please vote as soon as possible. You are urged to date, sign and returnfollow the accompanying proxy cardinstructions in the envelope provided to you, or to use the telephone (if you are a stockholder of record) or internet method of voting described on your proxy card even if you plan to attendvote by mail, telephone or via the Annual Meeting, so that if you are unable to attend
the Annual Meeting, your shares can be voted.Internet. Voting now will not limit your right to change your vote or to attend the Annual Meeting. If you should be presentattend and vote electronically at the Annual Meeting, and desire toyour vote in person, you may withdraw your proxy.will replace any earlier vote. If your shares are held in the name of a broker, bank or other holder of record, follow the voting instructions you received from the holder of record in order to vote your shares. Please note the voting procedures described under “How can I vote my shares?” on page 4 of the proxy statement.
| By order of the Board of Directors |
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| James F. Rogers |
| Chief Legal Officer and Secretary |
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April |
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Chicago, Illinois |
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If you have any questions or require any assistance with voting your shares, please contactImportant Notice Regarding the Availability of Proxy Materials for the Annual
Meeting of Stockholders to be Held on June 9, 2021:
Our Proxy Statement and 2020 Annual Report are available on our Investor Relations website (https://investor.cars.com) and at www.proxyvote.com
You may also request paper copies of these proxy solicitor atmaterials free of charge by following the contact listed below:
MacKenzie Partners, Inc.
Toll-free at: (800) 322-2885
Collect at: (212) 929-5500
Email: proxy@mackenziepartners.cominstructions for requesting such materials contained in the Notice.
Neither the Securities and Exchange CommissionSEC nor any state securities regulatory agency has passed upon the adequacy or accuracy of the disclosure in this document. Any representation to the contrary is a criminal offense.
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Compensation Discussion and Analysis | 33 | |
Our Compensation Philosophy | 33 | |
Role of the Compensation Committee, Management, Compensation Consultants and Peer Groups | 35 | |
Stockholder Engagement | 36 | |
Elements of Our Executive Compensation Practices | 37 | |
Executive Compensation Policies and Arrangements | 42 | |
Compensation Committee Report | 44 | |
Named Executive Officer Compensation | 45 | |
Equity Compensation Plan Information | 54 | |
Security Ownership | 55 | |
Security Ownership of Directors, Named Executive Officers and Executive Officers | 55 | |
Security Ownership of Certain Other Beneficial Owners | 56 | |
Transactions with Related Persons | 57 | |
Our Independent Registered Public Accounting Firm | 57 | |
Fees of Independent Registered Public Accounting Firm | 58 | |
Report of the Audit Committee | 59 | |
Proposal 2: Ratification of Appointment of Independent Registered Public Accounting Firm |
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Cars.com is a leading two-sided digital automotive marketplace creating meaningful connections between buyers and sellers. We empower consumers with resources and information to guide them in making informed car buying decisions around the 4Ps of Automotive Marketing™ (Product, Price, Place and Person). Providing partners with digital solutions and data-driven intelligence, Cars.com helps dealers improve sales and better manage their business.
We generate revenue primarily through the sale of digital advertising products for dealers and Original Equipment Manufacturers (OEMs). Cars.com’s dedicated and experienced salesforce provides deep market expertise and unmatched service at scale. We also generate revenue through the company’s affiliate sales channel.
Cars.com has evolved into one of the largest digital automotive marketplaces, providing best-in-class digital solutions to more than 21,000 dealer customers across the country and driving 400 million consumer site visits per year. We are transforming the online car shopping experience through trusted editorial content, on-the-lot mobile features, approximately 4.9 million new and used vehicle listings, innovative pricing tools, and the largest database of consumer reviews in the industry.
Our strategy is rooted in the understanding that car shopping can be an overwhelming process that most consumers need help navigating. Cars.com is focused on curating a better shopping experience by helping people decide what car to buy, where to buy it, how much to pay and who to deal with. In doing so, we help dealers create meaningful, high-quality connections with in-market car shoppers, improving turn and enabling growth.
We are pursuing a strategic plan to position us as the leading online automotive marketplace for consumers, and enabler of the local dealer retail system by offering the most innovative digital solutions that drive sales and efficiencies for our partners. Cars.com strives to achieve this goal and increase value for stockholders through four key pillars of our roadmap to growth:
grow audience and connections;
convert affiliate opportunities;
maintain data and attribution leadership; and
provide innovative and relevant digital solutions to every segment of our dealer population.
Since becoming an independent public company in June 2017, our team has been rapidly driving forward to integrate new capabilities and additional talent across the business to execute on these key pillars. We continue to focus on accelerating organic growth, advancing progress as a digital solutions provider to dealers through the acquisitions of Dealer Inspire and Launch Digital Marketing completed in February 2018, strengthening the retail experience, deepening dealer connections and improving clarity of attribution while generating additional cash flow and enhancing stockholder value.
We have assembled experts on both our management team and Board of Directors who reflect a range of relevant disciplines and have deep knowledge of online marketplaces, finance, digital marketing, product development, technology and the automotive industry.
Today, we have the highest brand recognition in the industry among third-party sites in our category. Consumers know and trust the Cars.com brand and our unbiased content which provides more than 6 million consumer reviews and salesperson profiles designed to create a uniquely personalized car shopping experience. Celebrating our 20th anniversary in 2018, we are well positioned to enter new markets, continue transforming the car shopping experience and become the leading automotive marketplace for car buyers and sellers.
Meeting Date | Time | Location | Record Date |
| 9:00 a.m., Central Time |
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Additional InformationInformation
Admission to the Annual Meeting | •Admission to the Annual Meeting is restricted to stockholders and/or their designated representatives. •
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Proxy Materials | • •The proxy statement, the proxy or •All stockholders may choose to access these materials electronically or may request printed or emailed copies at no charge. |
How to Vote |
•Stockholders who received the Notice may vote their shares electronically at www.proxyvote.com, by telephone after accessing the • •If you
•Please note the voting procedures described under “How can I vote my shares?” on page 4 of the proxy statement. |
Our Board of Directors unanimously recommends that you vote “FOR” the election of each and all of the director nominees in Proposal 1 and “FOR” Proposal 2 on the accompanying proxy card or by telephone (if you are a stockholder of record) or via the internet as set forth on the proxy card.
The two proposals will be presented at the Annual Meeting for your vote. When voting by telephone (if you are a stockholder of record) or via the internet, you will be instructed as to how you may cast your vote on these proposals. If you received a printed copy of your proxy materials, space is provided on the accompanying proxy card to vote for or to withhold authority to vote for any or all of the director candidates in Proposal 1, and for, against or abstain from voting on Proposal 2.
Questions and Answers Aboutabout the Meeting and Voting
Why am I receivingbeing provided these proxy materials?
We are providing these proxy materials to holders of shares of the Company’sCars.com Inc. common stock, par value $0.01 per share, in connection with the solicitation of proxies by our Board of Directors for the forthcoming 20182021 Annual Meeting of Stockholders to be held on May 18, 2018June 9, 2021 at 9:00 a.m., Central Time, and at any postponement(s) or adjournment(s) thereof. The proxy materials include our Notice of Annual Meeting of Stockholders, this proxy statement and our 20172020 Annual Report on Form 10-K.Report. These materials also include theaccompanying proxy card for the Annual Meeting. Proxy cards are being solicited on behalf of our Board of Directors.Board. The proxy materials include detailed information about the matters that will be discussed and voted on at the Annual Meeting and provide updated information about our Company that you should consider in order to make an informed decision when voting your shares. The
Why did I receive a notice in the mail regarding the Internet availability of the proxy materials instead of a full set of printed proxy materials?
In accordance with the “Notice and Access” rules adopted by the SEC, we are first being furnisheddelivering proxy materials to many stockholders via the Internet instead of mailing printed copies of the proxy materials to each stockholder. Using this method of distribution, we sent a Notice of Internet Availability of Proxy Materials to our stockholders on or about April 13, 2018.30, 2021. This Notice contains instructions for accessing and viewing our proxy materials via the Internet, voting your shares electronically and, if desired, requesting electronic or paper copies. Stockholders who have previously elected not to receive materials via the Internet will receive a copy of our proxy materials by mail.
How can I attendparticipate in the Annual Meeting?
Admission to the Annual Meeting is restricted to stockholders of record as of March 21, 2018April 12, 2021 and/or their designated representatives.
AllFor stockholders of record (i.e., shares held through the Company’s transfer agent, EQ Shareowner Services) as of the close of business on April 12, 2021 to participate in the virtual Annual Meeting, follow the instructions below:
Between 10 and 15 minutes before the 9:00 a.m. Central time start on June 9, 2021 visit http://www.virtualshareholdermeeting.com/CARS2021.
Under “Registration”, enter the first 13 digits of the control number received on the notice or proxy card.
Enter your name, email address, and indicate whether you are an individual, or representing a company or institution.
Use the “Vote” button to cast a vote.
For stockholders whose shares are held through an intermediary (i.e., shares held through a bank or broker or other nominee), to participate in the virtual Annual Meeting, follow the instructions below:
Contact your bank, broker or other nominee.
Use your control number provided by Broadridge in order to register for, attend and vote at the virtual Annual Meeting. Once you have this control number to participate in the Annual Meeting, please follow the steps set forth above for stockholders of record.
If you own shares through one of the other brokerage firms that does not use Broadridge, you can participate in the virtual meeting, by contacting your brokerage firm and asking for a “legal
proxy.” The brokerage firm will contact Broadridge, and Broadridge will then issue a 16-digit control number to that firm to forward to you. You must contact your brokerage firm by June 4, 2021 to facilitate this request. |
Will I be able to ask a question at the Annual Meeting?
We will hold a question-and-answer session with management immediately following the conclusion of the business to be conducted at the Annual Meeting.
You may submit a question at any time during the meeting by visiting http://www.virtualshareholdermeeting.com/CARS2021 . The Chair of the meeting has broad authority to conduct the Annual Meeting in an orderly manner, including establishing rules of conduct. A copy of the rules of conduct will be requiredavailable online at the Annual Meeting.
What if I have technical difficulties or trouble accessing the virtual meeting website during the check-in time or during the Annual Meeting?
Technicians will be available to show valid picture identification. If your shares are inassist you if you experience technical difficulties accessing the name of your broker or bank, you will also need to bring evidence of your stock ownership, such as your most recent brokerage account statement or a copy of your voting instruction form.virtual meeting website. If you do not have valid picture identificationencounter any difficulties accessing the virtual meeting during the check-in or proof of your stock ownership, you will not be admitted to the Annual Meeting. For security purposes, packages and bags will be inspected and you may be required to check these items. Please arrive early enough to allow yourself adequatemeeting time, to clear security.please call 1-844-986-0822 (domestic) or 303-562-9302 (international) for assistance.
How many shares must be present to hold the Annual Meeting?
The representation, in personvirtually or by proxy, of a majority of the issued and outstanding shares of common stock entitled to vote at the Annual Meeting constitutes a quorum. Under our Amended and Restated Certificate of Incorporation, our Amended and Restated Bylaws and Delaware law, abstentions and “broker non-votes” are counted as present in determining whether the quorum requirement is satisfied. A broker non-vote occurs when a nominee holding shares for a beneficial owner does not vote on a particular proposal because the nominee does not have discretionary voting power for that particular item and has not received instructions from the beneficial owner.
How can I vote my shares?
As of April 12, 2021, 68,633,229 shares of our common stock, par value $0.01 per share, were outstanding. Our common stock constitutes our only outstanding class of voting securities. As a holder of our common stock, you are entitled to one vote for each share held.
If you are a stockholder of record, you may vote by proxy in three convenient ways: by telephone (1‑800-690-6903), via the internetInternet (www.proxyvote.com) or by completing, signing and returning the enclosed proxy card in the pre-paid envelope provided.provided if you received a paper copy of the proxy card. Simply follow the instructions provided on the enclosed proxy card. Stockholders of record may also vote their shares at the Annual Meeting by casting a ballot as instructed during the Annual Meeting.
If your shares are held in street name, please refer to the voting instructions provided by your bank, broker or other nominee to direct it how to vote your shares. Your vote is important. Follow the instructions from your nominee included with our proxy materials or contact your nominee to request a proxy form. To vote in person at the Annual Meeting, you must obtain a legal proxy from your nominee. Whether or not you plan to attend the Annual Meeting, we urge you to vote using your voting instruction card to ensure that your vote is counted.
What is a proxy?
It is your legal designation of another person to vote matters transacted at the Annual Meeting based upon the stock you own. That other person is called a proxy. If you designate someone as your proxy
in a written document, that document also is called a proxy or a proxy card. The form ofOur proxy card accompanying this proxy statement
designates each of Becky Sheehan,Sonia Jain, our Chief Financial Officer, and Jim Rogers, our Chief Legal Officer, as proxies for the Annual Meeting.
If I submit a proxy, how will my shares be voted?
By giving us your proxy, you authorize the individuals named as the proxies on the proxy card to vote your shares in accordance with the instructions you provide. You may vote for“FOR ALL”, or “WITHHOLD ALL” or “FOR ALL EXCEPT” to withhold authority to vote for any or all of the director candidates and you may vote for, against or abstain on Proposal 2.1; “FOR”, “AGAINST”, or “ABSTAIN” on Proposals 2 and 3. If you vote by telephone (if you are a stockholder of record) or via the internet,Internet, you must indicate how you wish to vote on each item.
If you sign and return a proxy card without indicating your instructions, your shares will be voted:
“FOR” theelection of all eight of the director nominees, as described in this proxy statement; and
• | “FOR” the election of all eleven of the nominees to our board of directors, as described in this proxy statement. |
“FOR” the ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for fiscal year 2018.2021.
“FOR” a non-binding advisory resolution approving our executive compensation.
The individuals named as proxies on the proxy card to vote your shares will also have the discretionary authority to vote your shares, to the extent permitted by Rule14 (a)-4(c)Rule14a-4(c) under the Exchange Act, on any matter that is properly brought before the Annual Meeting. As of the date of this Proxy Statement, we knew of no other matters to be presented at the Annual Meeting.
If you are a beneficial owner of shares and do not instruct your bank, broker or other nominee how you want to vote, your shares may not be voted by a record holder and will not be considered as present and entitled to vote on any matter to be considered at the Annual Meeting. Accordingly, we urge you to give instructions to your bank, broker or other nominee as to how you wish your shares to be voted so you may participate in the stockholder voting on these important matters.
What is the difference between a stockholder of record and a stockholder who holds shares in street name?
If your shares are registered in your name, you are a stockholder of record. When you properly vote in accordance with the instructions provided in the accompanyingproxy card, you are instructing the named proxies to vote your shares in the manner you indicate on your proxy.
If your shares are held in the name of your broker or other institution, which is usually the case if you hold your shares in a brokerage or similar account, your shares are held in street name. Your broker or other institution or its respective nominee is the stockholder of record for your shares. As the holder of record, only your broker, other institution or nominee is authorized to vote or grant a proxy for your shares. Accordingly, if you wish to vote your shares in person,at the Annual Meeting, you must contact your broker or other institution to obtain a “legal proxy” granting you the authority to do so. When you properly vote in accordance with the instructions provided in theaccompanying proxy card, you are giving your broker, other institution or nominee instructions on how to vote the shares they hold for you.
May my broker vote my shares for me?
Brokers and other nominees holding shares in street name for their customers are generally required to vote such shares in the manner instructed by their customers. In the absence of timely instruction from you, your broker or other nominee will have discretion to vote your shares on “routine” matters. Therefore, in the absence of timely instructions from you, your broker or other nominee may vote your shares on the ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for fiscal year 20182021 (Proposal 2), which is considered a routine matter.
However, if you do not instruct your broker or other nominee on how to vote your shares regarding
the election of directors (Proposal 1) or regarding the non-binding advisory resolution approving our executive compensation (Proposal 3), then your shares may not be voted on this matterthese matters because itneither is not considered a routine matter. We urge you to instruct your broker or other nominee about how you wish your shares to be voted.
What are abstentions and broker non-votes?
An abstention occurs when a stockholder of record (which may be a broker or other nominee if you hold your shares in street name) is present at a meeting (or deemed present) but marks “Abstain” on one or more proposals.
A broker non-vote occurs when a broker or other nominee who holds shares for another does not vote on a particular item because the nominee does not have discretionary voting authority for that item and has not received instructions from the beneficial owner of the shares.
What is the record date and what does it mean?
The record date for the Annual Meeting is March 21, 2018.April 12, 2021. The record date is established by our Board of Directors as required by law and our Amended and Restated Bylaws. Owners of record of common stock at the close of business on the “record date” are entitled to receive notice of the Annual Meeting and to vote at the Annual Meeting and any adjournments or postponements of the meeting.
No stockholders becoming owners of record after the record date will be entitled to vote at the Annual Meeting or any adjournment or postponement thereof.
What happens if I execute my proxy, but do not provide instructions on how I wish to vote?
If you execute yourProperly signed proxy but do not provide instructions with respectcards received by the Corporate Secretary before the close of voting at the Annual Meeting will be voted according to the election of any director nominee in Proposal 1, yourinstructions provided. If a signed proxy card is returned without stockholder direction on a matter, the shares will be voted in accordance withas recommended by the recommendation of our Board of Directors (“FOR” the election of each of the director nominees).
If you execute your proxy, but do not provide instructions on how you wish to vote on Proposal 2, your vote will be cast in accordance with the recommendation of our Board of Directors (“FOR” the ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for fiscal year 2018).Board.
What matters will be voted on at the Annual Meeting, and what are the Board of Directors’Board’s recommendations on the proposals?
We are seeking your input on the composition of our Boardboard of Directors anddirectors, on the ratification of the appointment of our auditor and a non-binding advisory resolution approving the compensation of our Named Executive Officers (Proposals 1, 2 and 2,3, respectively).
We recommendThe Board recommends you vote vote:
“FOR” the election of alleach of the eleven director nominees recommended by our Board of Directors as described in this proxy statement.nominees.
We recommend you vote “FOR” the ratification of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year 2018.2021.
“FOR” a non-binding advisory resolution approving our Named Executive Officer compensation.
So far as our Board of Directors iswe are aware, only the above matters will be acted upon at the Annual Meeting. If any other matters properly come before the Annual Meeting, the accompanying proxy may be voted on such other matters in accordance with the best judgment of the person or persons voting the proxy.
How many votes are needed to approve the proposals, and what is the effect of broker non-votes or abstentions?
Proposal 1: Election of Directors
In order to be elected as a director, a director nominee must receive the affirmative vote of a majority of the votes cast for the election of directors. If a director nominee does not receive this majority vote, he or she isthey are not elected. elected.
As discussed above, if your broker holds your shares, your broker is not entitled to vote your shares on this proposal without your instruction. Votes withheld and broker non-votes will have no effect on the outcome of the election of directors. For additional information on how your shares will be voted, see “If I submit a proxy, how will my shares be voted?” above.
Proposal 2: Ratification of Appointment of Independent Registered Public Accounting Firm
The affirmative vote of the holders of a majority of the shares represented in personvirtually or by proxy is required to ratify the appointment of Ernst & Young LLP, an independent registered public accounting firm, as the Company’s independent certified public accountants for fiscal year 2018.2021. Votes may be cast in favor of“For” or against “Against” this proposal, or a stockholder may abstain from voting. Abstentions will have the effect of a negative vote. If you are a beneficial owner of shares registered in the name of your broker or other nominee and you fail to provide instructions to your broker or nominee as to how to vote your shares on Proposal 2, your broker or nominee will have the discretion to vote your shares on Proposal 2. Therefore, we do not expect any broker non-votes on Proposal 2. However, if you do not provide voting instructions and your broker or nominee fails to vote your shares, this will have the effect of a negative vote.
Proposal 3: Non-Binding Advisory Vote Approving the Compensation of our Named Executive Officers
The non-binding advisory resolution approving the compensation of our Named Executive Officers is advisory and is not binding on the Company, the Board or the Compensation Committee. However, the Compensation Committee will consider the outcome of the vote on this proposal when making future executive compensation decisions. Approval of this proposal requires a majority of the shares represented virtually or by proxy. Votes may be cast “For” or “Against’ this proposal or a stockholder may “abstain” from voting. Abstentions will have the effect of a negative vote.
As discussed above, if your broker holds your shares, your broker is not entitled to vote your shares on this proposal without your instruction. Broker non-votes will have no effect on the outcome of this proposal.
Other Items
If any other item requiring a stockholder vote should come before the meeting, the vote required will be determined in accordance with applicable law, the rules of the New York Stock Exchange (the “NYSE”), our Amended and Restated Certificate of Incorporation and our Amended and Restated Bylaws.
For additional information on how your shares will be voted, see “If I submit a proxy, how will my shares be voted?” above.
May I revoke my proxy or change my vote?
If your shares are registered in your name, you may revoke your proxy and change your vote prior to the completion of voting at the Annual Meeting by:
submitting a valid, later-dated proxy card in a timely manner;
submitting a later-dated vote by telephone (if you are stockholder of record)(1-800-690-6903) or via the internetInternet (www.proxyvote.com) in a timely manner;
giving written notice of such revocation to the Company’s Corporate Secretary prior to or at the Annual Meeting or by voting in person at the Annual Meeting; or
attending and voting at the Annual Meeting (although attendance at the meeting will not by itself revoke a proxy).
If your shares are held in street name (i.e., held of record by a broker, bank or other nominee) and you wish to revoke a proxy, you should contact your bank, broker or nominee and follow its procedures for changing your voting instructions. You also may vote in person at the Annual Meeting if you obtain a legal proxy from your bank or broker.
Proxies and ballots identifying the vote of individual stockholders will be kept confidential from our management and directors, except as necessary to meet legal requirements in cases where stockholders request disclosure or in a contested proxy solicitation.
All proxies, ballots and vote tabulations that identify stockholders are confidential. An independent tabulator will inspect and tabulate your proxy whether you vote by mail, by telephone (if you are a stockholder of record) or via the internet. Your vote will not be disclosed to anyone other than the independent tabulator without your consent, except as described above.
Where can I find the voting results of the Annual Meeting?
The preliminary voting results will be published in a Current Report on Form 8-K, which the Company is required to file with the SEC within four business days following the Annual Meeting. The final voting results, which are tallied and certified by independent inspectors,an Inspector of Elections, will be published as soon as possible thereafter.
Who is paying for the preparation and mailing of the proxy materials, and how will solicitations be made?
The Company will pay the expenses of soliciting proxies.proxies including the cost of preparing and mailing, as applicable, the Notice of Internet Availability of Proxy Materials and this Notice of Annual Meeting of Stockholders and Proxy Statement. Proxies may be solicited on our behalf by directors, officers or employees in person or by telephone, mail, electronic transmission, facsimile transmission or telegram. The Company will request brokerage houses and other custodians, nominees, and fiduciaries to forward soliciting material on our behalf to stockholders, and the Company will reimburse such institutions for their out-of-pocket expenses incurred. The Company has hired MacKenzie Partners, Inc. to assist in the solicitation of proxies for a fee of up to $80,000, plus out-of-pocket expenses. In connection with its retention, MacKenzie Partners, Inc. has agreed to provide consulting and analytic services upon request.
In addition to mail and email, proxies may be solicited directly, in person or by telephone, mail, electronic transmission, facsimile transmission or telegram, by certain of our directors, officers and employees without special compensation, other than reimbursement for expenses.
What does it mean if I receive more than one packageNotice of proxy materialsInternet Availability of Proxy Materials from the Company?
If you receive more than one package of proxy materialsNotice from the Company, this means that you have multiple accounts holding shares. These may include accounts with our transfer agent, Wells FargoEQ Shareowner Services, shares held by the administrator of our employee stock purchase plan and accounts with a broker, bank or other holder orof record. In order to vote all of the shares held by you in multiple accounts, you will need to vote the shares held in each account separately. Please follow the voting instructions provided on each proxy card that you receive to ensure that all of your shares are voted.
Can stockholders and other interested parties communicate directly with the Board of Directors?Board?
Yes. We invite stockholders and other interested parties to communicate directly and confidentially with the Board, of Directors, the non-managementnon-executive directors as a group or any individual director by writing to any of these groups or individuals at c/o Cars.com Inc., Attention: Chairman of the Board, 300 S. Riverside Plaza, Suite 1000, Chicago, Illinois 60606. The Chairman of our Board of Directors will relay the communication to the full Board, of Directors, director group or individual director as appropriate. See “Article 2: “Corporate Governance – Committees of the Board of Directors – Communications With–Communications with All Interested Parties.”
How can I obtain a stockholder list?
A list of stockholders entitled to vote at the Annual Meeting will be open to examination by any stockholder, for any purpose germane to the Annual Meeting, during normal business hours for a period of ten10 days prior to the Annual Meeting and during the Annual Meeting.
What is “householding”?
We have adopted a procedure approved by the SEC called “householding.” Under this procedure, stockholders of record who have the same address and last name who have elected towill receive only one Notice or, if paper copies of our proxy materialsare requested, will receive only one copy of our 20172020 Annual Report on Form 10-K and this proxy statement unless one or more of these stockholders notifies us that they wish to receive multiple copies. This procedure will reduce our printing costs and postage fees. If any stockholder residing at such an address wishes to receive a separate Notice or copy of our 20172020 Annual Report on Form 10-K or this proxy statement or would like to receive separate copies of our future Notices or annual reports ofor proxy statements, he or she may contact our Corporate Secretary at Cars.com Inc., 300 S. Riverside Plaza, Suite 1000, Chicago, ILIllinois 60606 or by calling our Corporate Secretary at (312) 601-5000.
Proposal 1: ElectionElection of Directors
The director nominees have the relevant skills and experience and are best positionedaccordingly well-positioned to serve our Company and our stockholders. Accordingly, our Board of Directors unanimously recommends that you vote on the accompanying proxy card or by telephone (if you are a stockholder of record) or via the internet as set forth on the proxy card “FOR” the election of each and all of the director nominees to serve as directors until the 2019 Annual Meeting of Stockholders, or, in each case, until their successors are elected and qualified.nominees.
Properly executed proxies will be voted as marked. Unmarked proxies will be voted in favor of electing the persons named below (each of whom is now a director) as directors to serve until the Company’s 20192022 Annual Meeting of Stockholders and until their successors are duly elected and qualified.
It is expected that all director nominees proposed by our Board of Directors will be able to serve on the Boardboard of Directorsdirectors if elected. However, if before the election one or more director nominees are unable to serve or for good cause will not serve (a situation that we do not anticipate), the proxy holders will vote the proxies for the remaining director nominees and for substitute director nominees chosen by the Board of Directors (unless the Board of Directors reduces the number of directors to be elected). If any substitute director nominees are designated, we will file an amended proxy statement that, as applicable, identifies the substitute director nominees, discloses that such director nominees have consented to being named in the revised proxy statement and to serve on the Board of Directors if elected, and includes certain biographical and other information about such substitute director nominees required by the rules of the SEC.
If you have any questions or require any assistance with voting your shares, please contact our proxy solicitorCorporate Secretary at the contact listed below:
MacKenzie Partners,Cars.com Inc.
Toll-free at: (800) 322-2885
Collect at: (212) 929-5500
Email: proxy@mackenziepartners.com
, 300 S. Riverside Plaza, Suite 1000, Chicago, Illinois 60606 or by calling our Corporate Secretary at (312) 601-5000.
Our Boardbusiness and affairs are managed under the direction of Directors was recruited and constituted in May 2017 in preparation for the Company’s separation from its former parent. In the nine months since Cars.com has been an independent publicly traded company, our Board of Directors has already helpedDirectors. The Board is currently composed of eleven directors, ten of whom are independent. In evaluating the nominees for the Board, the Board and the Environmental, Social and Governance Committee (the “ESG Committee”), which was previously named the Nominating and Corporate Governance Committee, took into account the qualities they seek for directors, as discussed below under “Board Governance” and the directors’ individual qualifications, skills, and experience in conjunction with the objective of having a Board with diverse backgrounds that enable the directors to effectively and productively contribute to the Board’s oversight of the Company.
Our Board represents a wide range of backgrounds, reflecting our commitment to racial, ethnic and gender diversity. We believe our diversity of experiences, perspectives, and skills contributes to the Board’s effectiveness in managing risk and providing guidance that positions the Company make significant progressfor long-term success in advancing its objectives of recapturing affiliatea dynamically changing business improving operations, strengthening and enhancingenvironment. We believe that diverse representation expands the management team and making an important and strategic acquisition. Our Board of Directors believes there is more work to be done and continues to be keenly focused on creating stockholder value. To that end, our Board of Directors, composedBoard’s understanding of the director nominees, has the requisite expertise to achieve this important objective, including the financial acumen, risk management experienceneeds and audit, tax and accounting expertise that any successful company needs. But, crucially, our directors also have the skills we need to oversee the executionviewpoints of our strategy to restore traffic to at or above leadership levels, aggressively pursue the conversion of affiliate territoriescustomers, partners, employees, governments, and invest in digital dealer solutions for the benefit of our dealer customers. other stakeholders.
Our directors have significant combined experience serving companies that have built industry-leading online brands, including:
Rightmove, the United Kingdom’s number onenumber-one online real estate company;
SurveyMonkey, the world’s largest online survey company;
Ascential, a global business-to-business mediae-commerce analytics company;
Travelport,The Weather Channel Companies, a travel commerce platform for the travelleading weather-focused media and hospitality industry;technology company;
Martha Stewart Living Omnimedia, a diversified media and merchandising company;
Orbitz Worldwide, (sold to Expedia in 2015), an online travel agency; and
HomeAway, (sold to Expedia in 2015) an internet marketplace for vacation rentals.
Our Board of Directors has deep experience in online marketing and ecommerce, with severale-commerce, including directors holdinghaving experience in executive positions with specific responsibility for digital customer strategies and online brand positioning at Best Buy, Office Depot, Kohl’s and Best Buy.AT&T and in the automotive industry as a dealer owner-operator, a previous Chief Marketing Officer at AutoNation, Inc. and founder of Cars.com Inc.
Finally, our Board of Directors has an extensive background in capital markets and mergers and acquisitions. In addition toSeveral directors have first-hand experience of consolidation, M&Awith mergers, acquisitions, consolidations and divestitures within various companies, and one of our directors was a Senior Managing Director in the M&A group at theThe Blackstone Group, one of the world’s leading investment firms.
Our Board of Directors is well positionedwell-positioned to ultimately deliver on our goal of becoming the leading onlinelargest digital automotive marketplace and platform powering innovative solutions and frictionless omni-channel experiences for buyers and sellers.
Name | Age | Principal Occupation |
Scott Forbes (Chairman) |
| Chairman, |
Jerri DeVard |
| Founder, Black Executive |
Jill Greenthal |
| Senior Advisor, |
Thomas Hale |
| President, SurveyMonkey Inc. |
Michael Kelly | 63 | CEO, Kelly Newman Ventures, LLC |
Donald A. McGovern, Jr. |
| Board member of 180 Life Sciences; Retired Vice Chairman, Global Assurance, PricewaterhouseCoopers LLP |
Greg Revelle |
| Chief Marketing Officer, Kohl’s Corp. |
Jenell R. Ross | 51 | President, Bob Ross Auto Group |
Bala Subramanian |
| Chief Digital Officer, |
T. Alex Vetter |
| President and |
Bryan Wiener | 50 | CEO, Profitero, Ltd. |
Below are summaries of the principal occupation, business experience, background, and key skills and qualifications of each of the director nominees. The key skills and qualifications are not intended to be an exhaustive list of each director nominee’s skills or contributions to the Board, of Directors, but rather the specific skills and qualifications that led to the conclusion that such person should serve as a director of the Company.
Scott Forbes (Chairman)
Director Independent Age: | 63
| •Chairman, Through his significant board and leadership experience across online marketplaces, and the travel, real estate and •Chair, Compensation Committee; Member, •Other Public Company Board Service: Senior Independent Director and Chairman •Recent Past Public Company Board Service:
Scott has He previously served as Chairman of Rightmove plc, the UK’s number one online real estate He also previously served as
Scott holds a BS in Accounting from Rutgers University.
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Jerri DeVard
Director Independent Age:
| •Founder, Black Executive Through her extensive marketing leadership experience at large global brands, Jerri brings in-depth knowledge of strategic, operational and financial aspects of integrated and online marketing along with expertise in brand management, customer engagement and •Member, Compensation Committee; •Other Public Company Board Service: Root, Inc. (2020- Present),Under Armour, Inc. (2017 – Present) •Recent Past Public Company Board Service: The ServiceMaster Company, LLC (2016 – 2018), Belk Inc. (2010 – 2016), Gurwitch Products, LLC (2009 – 2011), Tommy Hilfiger Corporation (2004 – 2006) •Recent Past Public Company Advisory Board Service: PepsiCo Inc. (2002 – 2012)
Jerri has more than 30 years of extensive
From March 2014 until May 2016, Jerri also served as the Vice President and Chief Marketing Officer of The ADT Corporation, a leading provider of home and business security services. She led ADT’s marketing efforts and oversaw all strategic, operational and financial aspects of its integrated marketing programs, which included brand advertising, digital marketing, communications, lead generation, sponsorships and more. From July 2012 to March 2014, Jerri was Principal of DeVard Marketing Group, a firm specializing in advertising, branding, communications and traditional/
Jerri holds an MBA in Marketing from Atlanta University Graduate School of Business and a BA in Economics from Spelman College, where she served as a member of the board of trustees from 2005 to 2014. | |
Thomas Hale
Director Independent Age:
| •President, SurveyMonkey Inc. With his leadership positions at multiple successful online companies, Tom brings comprehensive experience with web marketplaces, subscription businesses, and product and technology operations, as well as financial expertise and significant management, leadership and operational experience. •Member, Audit Committee; •Recent Past Public Company Board Service: ReachLocal, Inc. (2014 – 2016), Intralinks Holdings, Inc. (2008 – 2017) Tom is the President of SurveyMonkey, Inc. (Nasdaq: SVMK), the world’s largest online survey company. Before joining SurveyMonkey in July 2016, he served as the Chief Operating Officer from July 2010 to April 2015 of HomeAway, Inc., an internet marketplace for vacation rentals, where he managed the engineering, product, design and IT/operations teams and led the company through its initial public offering and subsequent acquisition by Expedia. During his tenure at HomeAway, he transformed the company from an advertising venue into a payments-enabled marketplace serving both the peer-to-peer consumer and the business-to-business property manager markets. Prior to joining HomeAway, Tom served as the Chief Product Officer of Linden Lab, a privately held American internet company, where he redesigned the consumer experience of Second Life, the largest Tom currently serves on the board of directors of NoiseAware, a leading noise monitoring technology company, and previously served as a member of the board of directors of ReachLocal, Inc., a public business-to-business digital marketing services firm, before its sale to Gannett Company, Inc., and of Intralinks Holdings, Inc., a public global technology provider of enterprise content management solutions, before its sale to Synchronoss Technologies, Inc. Tom holds a BA |
Michael Kelly
Director Independent Age: 63 | •Co-Founder, Kelly Newman Ventures, LLC As an entrepreneur and media executive, Mike is an expert at delivering quality content to consumers across many different platforms. In addition to his past success in leading traditional and new media companies, he brings a deep knowledge of the digital space and connections with advertisers. •Member, Audit Committee; Compensation Committee •Other Public Company Board Service: Seeen plc (2019 – Present) •Recent Past Public Company Board Service: Bankrate (2012 - 2017); MediaMind (2010 – 2011) Mike is the Co-Founder of Kelly Newman Ventures, LLC, an advisory and investment firm, and has served as its CEO since its formation in September 2016. He is currently serving as a director on the board of Entertainment AI plc, a UK-based media company. Previously, he served as the President and CEO of The Weather Channel Companies, a leading weather-focused media and technology company. He devised and led the digital transformation of The Weather Channel, launching its mobile and tablet applications that grew to over 75 million users during his tenure. The total consumer audience almost tripled and market value of the company rose by over $1 billion. Prior to that, Mike served as the President of AOL Media Networks, a division of Time Warner, Inc. Mike and his team created one of the first data-driven digital advertising platforms of scale, acquired and integrated ten companies ($1.2 billion) and grew revenues from $600 million to $2.2 billion annually. Before AOL, he served as President of the Global Marketing group at Time Warner and prior to that he was the Founder and CEO of American Town Network, LLC. Mike was also on the launch team and became Publisher of Entertainment Weekly magazine, achieving 30% revenue CAGR for 10 straight years. Mike has served as an advisor to numerous investment firms, consultants and companies, including Veronis Suhler Stevenson. Mike served on the board and was the compensation committee chair at publicly-traded Bankrate until its sale in 2017. He also served as the chairman of Unruly Media, a UK tech company that was acquired by NewsCorp in 2015. He currently serves on the board of directors of Seeen plc, a UK-based media company, Quantcast Corporation, an American technology company that specializes in audience measurement and real-time programmatic advertising, American Town Network, LLC, which operates AmericanTowns.com, a content platform for local businesses and communities, Dianomi, a UK-based financial services marketing company, and Sliide, a UK-based mobile technology company and on the board of advisors of Celtra Inc., a mobile advertising company. Mike is also on the board of the American Advertising Federation and the board of councilors of the Carter Center in Atlanta and is a founding member of The Kelly Gang. Mike holds a BA in Political Science from the University of Illinois at Urbana-Champaign. |
Donald A. McGovern, Jr.
Director since 2017 Independent Age:
| •Retired Vice Chairman, Global Assurance, PricewaterhouseCoopers LLP (PwC) Through decades of leadership at PwC and public and private company board experience, Don brings wide-ranging operational, financial, accounting, audit, •Chairman, Audit Committee; Member, Compensation Committee •Other Public Company Board Service: 180 Life Sciences (2020 – Current) •Recent Past Public Company Board Service: CRH, •Recent Past Private Company Board Service: Don has deep operational, financial and accounting experience, having retired from
Don is also a member of the Don holds an MBA from DePaul University and a BA in History and Political Science from Marquette University. |
Greg Revelle
Director Independent Age:
| •Chief Marketing Officer, Kohl’s Corp. With senior leadership experience in marketing at each of Kohl’s, Best Buy and AutoNation, Greg brings expertise in digital transformation, brand positioning, media, customer strategy and traffic generation, as well as sophisticated analytics capabilities and automotive marketing experience. •Member, Audit Committee; Compensation Committee •Recent Past Other Board Service: The Advertising Council (2016 – 2017) Greg is the Senior Executive Vice President and Chief Marketing Officer of Kohl’s Corp., where he is responsible for Kohl’s marketing organization, including the overall marketing Prior to joining Kohl’s in 2017, Greg was the Chief Marketing Officer of Best Buy Company, Inc. Greg holds an MBA from Harvard Business School and a BA in Finance and Economics from Princeton University. | |
Jenell R. Ross
Independent Age: 51 | •President, Bob Ross Auto Group in Centerville, Ohio (dealership includes three franchises: Buick, GMC and Mercedes-Benz.) Jenell brings valuable insights to the Board through her years of leadership in the automotive industry and the many public, civic and charity boards on which she is involved. Her real-world experience as a successful dealer owner-operator further enhances the perspectives of our Board. Jenell has the distinction of being the only African American woman who owns Mercedes-Benz and Buick-GMC dealerships. •Member, Audit Committee; Environmental, Social and Governance Committee •Other Public Company Board Service: Hub Group, Inc. (2020 – Present) •Other Private Company Board Service: University of Dayton, Board of Trustees (2005-Present); Dayton Chamber of Commerce, Minority Business Partnership (2010-Present); Will Allen Foundation (2012-Present); Norma J. Ross Memorial Foundation, Founder (2010 – Present) •Recent Past Private Company Board Service: Federal Reserve Bank of Cleveland (Cincinnati Branch) (2018-2020); State of Ohio Motor Vehicle Dealer Board (2012-2016); American International Automobile Dealers Association (2001-2014, chair 2013); Inaugural Board of the Dayton Performing Arts Alliance (2012-2014) Since 2010, Jenell has been President of the Bob Ross Auto Group, a franchised dealer for Mercedes-Benz, Buick and GMC. Jenell is the only second generation African American woman automobile dealer in the country and the Bob Ross Auto Group’s Mercedes-Benz dealership is the first African American-owned Mercedes-Benz dealership in the world. Under her leadership, the Bob Ross Group has continued to rank as a leader in Buick, GMC and Mercedes-Benz sales and customer service. Jenell holds a BA in Sociology from Emory University. She has completed the General Motors Dealer Management Development Program and is a graduate of the National Automobile Dealers Association Dealer Candidate Academy. |
Bala Subramanian
Director Independent Age:
| •Chief Digital Officer, From his experience at AT&T, Best Buy and T-Mobile, Bala brings digital, technology and strategy expertise across business development, corporate digital transformation, best-in-class customer experiences, technology team management and investment oversight. •Member, Audit Committee; Compensation Committee Bala is an experienced technology and digital executive with over From 2017 to 2018, Bala served as the Chief Digital Officer of Best Buy Company, Inc., a specialty retailer of consumer electronics, personal computers, entertainment software and appliances, where he From 2008 to 2012, Bala served as Vice President, Technology Strategy and Enterprise Architecture of T-Mobile USA, Inc., one of the largest providers of wireless voice and data communications services in the United States. He held various leadership and technology strategist roles at T-Mobile from 2000 to 2008, including Senior Director, Systems Engineering & Strategy. During his time at T-Mobile, Bala was responsible for all aspects of architecture and technology strategy for the company. Prior to 2000, Bala held various positions at Omnipoint Communications Services, Inc., Ericsson, Inc. and DSC Communications, Inc. Bala holds an MBA from The Fuqua School of Business at Duke University, an MS from the University of Oklahoma and a Bachelor of Engineering from University of Madras. |
T. Alex Vetter
Director President and CEO Age:
| •President and
•Recent Past Private Company Board Service: RepairPal, Inc. (2014 – Alex co-founded Cars.com and has served as President and Alex is passionate about empowering users and leveraging technology to drive the future of automotive retail and enable businesses to keep local at the center of digital Prior to serving as multiple functional areas. From 2006 until 2014, Prior to Cars.com, Alex served as Manager of Business Development of Classified Ventures from 1997 to 1998, and as Business Development Manager of Tribune Interactive/Tribune Media Services from 1996 to 1997. Alex holds a
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Bryan Wiener
Director since 2018 Independent Age: 50 | •CEO, Profitero As a 25-year advertising industry veteran, Bryan specializes in successfully transforming and growing companies in highly-disruptive environments. •Member, Compensation Committee; Environmental, Social and Governance Committee •Recent Past Public Company Board Service: Comscore (2017 – 2019) Bryan is an entrepreneur and business-builder who has spent the past 25 years driving growth amid chaotic markets undergoing rapid technological transformation. He is currently serving as the CEO of Profitero, a leading global enterprise eCommerce SaaS analytics platform. Prior to Profitero, he was the former CEO and director at Comscore, Inc., a global leader in cross-platform audience and advertising measurement. Prior to that, Bryan was Chairman and before that CEO of award-winning advertising agency 360i. In 2004, he co-founded and was co-CEO of Innovation Interactive, the parent company of both 360i and SaaS provider Ignition One, which he grew and then sold to Dentsu, Inc., a global advertising holding company, in 2010, and continued to lead within Dentsu until his departure in 2018. During his tenure, he pioneered a new kind of agency designed to help brands capitalize on change, leveraging deep expertise in data, technology and innovation. Bryan scaled the company from fewer than 40 to more than 1,000 employees worldwide and partnered with some of the largest and most iconic brands in the world. From 2014 to 2015, Bryan concurrently served as chairman of Expion, a social content marketing software company, that was successfully acquired by Sysomos. He also previously held a series of senior management positions at public companies, including serving as president of Net2Phone Global Services, LLC, a subsidiary of Net2Phone, Inc., the early VoIP software company, where he led a two-year, $75 million EBITDA turnaround. Prior to Net2Phone, Bryan served as general manager at theGlobe.com, one of the first-ever social media companies. Bryan currently serves on the advisory board of the S.I. Newhouse School of Public Communications at Syracuse University. Bryan holds an MBA from the Stern School of Business at New York University and a BA from Syracuse University. |
Stockholder ApprovalApproval Required
In order to be elected as a director, each director nominee must receive the affirmative vote of a majority of the votes cast for the election of directors. If a director nominee does not receive this majority vote, he or she is not elected.
OURTHE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE “FOR” THE ELECTION OF EACH AND ALL OF THE DIRECTOR NOMINEES TO THE BOARD OF DIRECTORS.
If you have any questions or require any assistance with voting your shares, please contact our proxy solicitorCorporate Secretary at the contact listed below:Cars.com Inc., 300 S. Riverside Plaza, Suite 1000, Chicago, Illinois 60606 or by calling our Corporate Secretary at (312) 601-5000.
MacKenzie Partners, Inc.
Toll-free at: (800) 322-2885
Collect at: (212) 929-5500
Email: proxy@mackenziepartners.com
Director Independence
Our Board of Directors’Board’s categorical standards of director independence are consistent with NYSE listing standards and are available in the Company’s Corporate Governance Guidelines on our website at investor.cars.com under “Governance – Governance Documents.” Our Board of Directors has determined that Scott,all ten non-executive directors (Scott, Jerri, Jill, Tom, Mike, Don, Greg, Jenell, Bala and BalaBryan) meet these standards and are independent directors for purposes of the NYSE listing standards. Our Board of Directors does not consider Alex, our Chief Executive Officer, to be independent. All current members of the Audit Committee, Compensation Committee, and Nominating and Corporate GovernanceESG Committee are independent.
We expect directors to attend all meetings of ourthe Board of Directors and the committees on which they serve. OurThe Board of Directors held threeseven meetings in 2017 following the separation of our Company from our former parent, TEGNA. All2020. During fiscal year 2020 all incumbent directors attended at leastover 75% of the aggregate number of meetings of the Board of Directors and the committees on which they served during fiscal year 2017.served. Seven directors attended the 2020 annual meeting of stockholders.
Board Leadership Structure
Our Board of Directors has no policy regarding the separation of the offices of Chairman of the Board of Directors and Chief Executive Officer. Currently, theThe roles of Chairman of the Board of Directors and Chief Executive OfficerCEO are separate. We believe this structure: (i) promotes balance between the Board of Directors’Board’s independent authority to oversee our business, on the one hand, and the Chief Executive OfficerCEO and our management team who manage the business on a day-to-day basis, on the other hand; and (ii) allows the Chief Executive OfficerCEO to focus his time and energy on operating and managing the Company and to leverage the experiences and perspectives of the Chairman of the Board of Directors. If our Board of Directors chooses to combine these roles in the future, a Lead Director will be appointed annually by the independent directors.Board.
The duties of the Chairman ofinclude:
ensuring that the Board of Directors include:is effective in discharging its responsibility for setting and implementing the Company’s direction and overall strategy;
presiding over all meetings of the Board of Directors and all executive sessions of non-managementnon- executive directors;
serving as liaison on board-wide issuesbusiness matters between the Chief Executive OfficerCEO and the non-managementnon-executive directors, although Company policy also provides that all directors shall have direct and complete access to the Chief Executive OfficerCEO and other members of senior management at any time as they deem necessary or appropriate, and vice versa;
in consultation with the Chief Executive Officer,CEO, reviewing and approving agendas and materials for meetings of the Board of Directors;Board;
reviewing and approving meeting schedules to assure there is sufficient time for discussion of all agenda items;
calling meetings of the non-managementnon- executive directors, if desired; and
being available when appropriate for consultation and direct communication if requested by stockholders.
Our Corporate Governance Guidelines provide that the independent directors meet in regularly scheduled executive sessions without management, which our directors have regularly done.
Our Board of Directors believes that an appropriate balance of skills, attributes and experience is important for an effective board of directors. The Nominating and Corporate GovernanceESG Committee is responsible for establishing director qualification criteria and identifying the key competencies, skills and desired areas of expertise for the Board of Directors as a whole. When evaluating potential directors for nomination to the Board, of Directors, the Nominating and Corporate GovernanceESG Committee considers: (i) whether the candidate has demonstrated, by significant accomplishment in his or her field, an ability to contribute meaningfully to the Board of Directors’Board’s oversight of the business and affairs of the Company; (ii) the candidate’s reputation for honesty and ethical conduct in his or her personal and professional activities; (iii) the candidate’s specific experience and skills, relevant industry background and knowledge in light ofrelevant to the perceivedstrategic needs of the Company (including, in particular, knowledgeCompany; (iv) diversity of automotiveexperience and automotive marketing, customer engagement experience, e-commerce industriesperspectives, including diversity with respect to race, gender, sexual orientation, ethnicity, background and familiarity with information technology generally);areas of expertise, and (iv)(v) other factors it deems relevant. The Nominating and Corporate GovernanceESG Committee also takes into accountbelieves that diversity, background, and experience are all relevant to the strategic requirements of a successful business and seeks directors who represent a mix of backgrounds and experiences that will enhance the quality of the Board of Directors’Board’s discussions and decision-making process.
The ESG Committee regularly reviews and evaluates the Board’s composition to determine whether the Board requires skills or experience not currently represented on the Board. In 2020 the ESG Committee retained a third-party search firm to assist in identifying and evaluating candidates meeting the profile of a director with relevant auto industry experience that would also add further diversity on the Board. As a result of that proactive search, the Board appointed Jenell as a director in April 2021.
In the event that, as part of its ongoing review and evaluation, the Board determines that it requires any additional directors, the Company’s bylaws permit the Board to expand the size of the Board of Directors and appoint persons to fill any resulting vacancies without the need for stockholder action.
The ESG Committee will consider candidates for our Board recommended by our stockholders for election at the Annual Meeting. Nominations of candidates for our Board of Directors by our stockholders for consideration at the Annual Meeting are subject to the deadlines and other requirements described under “Miscellaneous - Stockholder Proposals.”
Alex Vetter has been with our Company since the launch of Cars.com in 1998. Jill Greenthal, who joined our Board of Directors in connection with the separation of our Company from our former parent, TEGNA, had served on the board of TEGNA prior to the separation. The other members of our Board of Directors were identified by a nationally recognized search firm first retained by TEGNA prior to the separation to assist in seeking qualified director candidates to join our Board of Directors in connection with the separation or as soon thereafter as practicable. The search firm was provided a range of capabilities and experience that are most relevant to our business and board and charged with identifying prospective candidates offering such skills and experiences. The range included: prior public company board experience; extensive experience in the automotive marketplace field and online marketplaces; broad consumer and business-to-business marketing experience; product and technology experience; financial expertise; and experience relevant to the Company’s advertising business and its strategic efforts in digital marketing, social media and mobile content. The search firm also evaluated personal characteristics, such as a demonstrable passion for the Company’s business, diversity reflective of the communities the Company serves, and capacity to be an active board member. Prior to the separation, prospective candidates identified by the search firm were interviewed by executives of TEGNA and certain other members of TEGNA’s board of directors. After the separation, members of the Nominating and Corporate Governance Committee, selected members of the Board of Directors and our chief executive officer interviewed prospective candidates.
Committees of the Board of Directors
Our Board of Directors has three standing committees: the Audit Committee, the Compensation Committee, and the Nominating and Corporate GovernanceESG Committee. The charter of each standing committee is available, free of charge, on our Investor Relations website at investor.cars.com under “Governance – Governance Documents.”
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Audit Committee
The Audit Committee assists our Board of Directors in its oversight of the integrity of our financial statements and the qualifications, independence and performance of our independent auditor. The Audit Committee has discretion to appoint annually our independent auditor, to evaluate its independence and performance and to set clear hiring policies for the independent auditor’s employees or former employees.
The Audit Committee’s responsibilities include the following:
the accounting and financial reporting processes of the Company;
the integrity of the financial statements of the Company;
the independent auditor’s qualifications, performance, compensation and independence;
the design, implementation and performance of the Company’s internal audit function;
the compliance by the Company with legal and regulatory requirements;
reviewing and approving or ratifying related person transactions between us or our subsidiaries and related persons; and
Company policies with respect to risk assessment and risk management.
The current members of the Audit Committee are Don (Chair), Jill, Tom, Greg and Bala, each of whom our Board of Directors has determined to be “independent” under the NYSE corporate governance rules and Rule 10A-3(b)(1)(iv)(A) under the Securities Exchange Act. Our Board of Directors has determined that each member of the Audit Committee meets the NYSE’s financial literacy requirements and that Don qualifies as an “audit committee financial expert” under SEC rules. The Audit Committee met five times in 2017 following the separation of our Company from our former parent, TEGNA.
Compensation Committee
The Compensation Committee discharges our Board of Directors’ responsibilities relating to compensation of the Company’s directors, executivesEnvironmental, Social and senior officers and has overall responsibility for the Company’s compensation plans, policies and programs. The Compensation Committee’s duties and responsibilities include reviewing and approving on an annual basis corporate goals and objectives
relevant to compensation of the Chief Executive Officer and other senior officers, including members of the Cars.com executive team and other officers of the Company.
The current members of the Compensation Committee are Scott (Chair), Jerri, Don, Greg and Bala. Our Board of Directors has determined that each member of the Compensation Committee meets the independence requirements of the SEC as well as those of the NYSE. The Compensation Committee met five times during 2017 following the separation of our Company from our former parent, TEGNA.
The Compensation Committee has primary responsibility for administering our Omnibus Incentive Compensation Plan and in that role, is responsible for approving equity grants to the Company’s senior officers. The Compensation Committee has delegated to the Chair of the Compensation Committee (and any other member of the Compensation Committee designated in writing by the Chair of the Compensation Committee, acting together) the authority for approving equity grants to employees with a grant date value of $50,000 or less (inclusive of any other grants to the same individual in a calendar year). This provides flexibility for equity grants to be made to employees below the senior leadership level who are less familiar to the Compensation Committee.
The Compensation Committee also oversees the organization plan and senior officer succession planning in consultation with the nominating and corporate governance committee.
Under its charter, the Compensation Committee may, in its sole discretion, retain or obtain advice of a compensation consultant, independent legal counsel or other adviser. The Compensation Committee is directly responsible for the appointment, compensation and oversight of any such consultant, counsel or adviser, and the Company shall provide appropriate funding for payment of reasonable compensation to any such consultant, counsel or adviser, as determined by the Compensation Committee. In selecting a consultant, counsel or adviser, the Compensation Committee evaluates its independence.
During 2017, the Compensation Committee retained Meridian Compensation Partners, LLC (“Meridian”) as its sole consultant to advise it on executive compensation matters. Prior to and following the separation of our Company from our former parent, TEGNA, Meridian provided executive compensation services and advice to TEGNA, for which Meridian received customary fees. Meridian’s work for TEGNA included providing guidance regarding the treatment of equity compensation awards and related matters associated with the separation. Meridian’s extensive familiarity with the Company’s executive compensation programs in place upon the separation was a key factor in its retention. After considering factors used by the Compensation Committee to evaluate independence, the Compensation Committee determined that Meridian is an independent compensation consultant in accordance with applicable SEC and NYSE rules.
Meridian participates in Compensation Committee meetings as requested by the Chair of the Compensation Committee and communicates directly with the Chair of the Compensation Committee outside of meetings. Since its retention following the separation, Meridian has provided the following services to the Compensation Committee:
participated in Compensation Committee executive sessions without management present to assist in analyzing executive compensation practices and trends, the appropriate relationship between pay and performance and other relevant compensation-related matters;
advised regarding market trends and best practices in connection with the adoption of the Company’s 2017 Change-in-Control Severance Plan and Executive Severance Plan;
consulted with management and the Compensation Committee regarding market data used as a reference for pay decisions;
participated in the design of the Company’s 2017 equity award program and recommended policy and plan changes commencing in 2017; and
advised regarding the Company’s director compensation program.
The Nominating and Corporate Governance Committee assists our Board of Directors in fulfilling its oversight responsibilities relating to our corporate governance matters, including:Scott Forbes
assisting the Board of Directors by identifying individuals qualified to become members thereof, consistent with criteria approved by the board of Directors;
advising, educating and making recommendations to the Board of Directors on corporate governance matters;
recommending board of director committee appointments and chairs;
overseeing executive management succession planning in consultation with the Compensation Committee; and
leading the Board of Directors in its annual review of the performance of management and of the Board of Directors itself and its committees.
The current members of the Nominating and Corporate Governance Committee are Chair
X
Jerri DeVard
X
X
Jill (Chair), Scott, Jerri and Greenthal
X
Chair
Tom all of whom have been determined by the Board of Directors to be “independent” under the NYSE corporate governance rules. The Nominating and Corporate Governance Committee met four times in 2017 following the separation of our Company from our former parent, TEGNA.Hale
The Board of Director’s Role in Risk Oversight
Our business faces various risks, including strategic, financial, legal, operational and accounting risks. Identifying, managing and mitigating our exposure to these risks and effectively overseeing this process are critical to our operational decision-making and annual planning processes. While management is responsible for the day-to-day management and mitigation of risk, our Board of Directors has ultimate responsibility for risk oversight. Management reviews and discusses risks with the Board of Directors as part of the business and operating review conducted at each of the regular meetings of the Board of Directors.X
While the Board of Directors has primary responsibility for overseeing the Company’s risk management, each committee of the Board of Directors also considers risk within its area of responsibility. Each committee regularly reports back to the Board of Directors on its risk oversight activities, and also oversees risks arising from related-party transactions. The Audit Committee has primary oversight of our financial reporting, internal control and compliance risks. At least quarterly, the Audit Committee meets separately with our internal auditor and representatives from our independent auditor. In addition, management regularly reports to the Audit Committee on litigation and regulatory developments and our compliance with the Sarbanes-Oxley Act of 2002, as amended, and other corporate compliance policies. The Compensation Committee reviews risks arising from our executive compensation programs. The Nominating and Corporate Governance Committee oversees risks related to our governance structure and succession planning. See “Article 8: Certain Relationships and Related-Persons Transactions” for further discussion of the nominating and corporate governance committee’s role in the review and approval of related-party transactions.Mike Kelly
Communications With All Interested PartiesX
If a stockholder or any interested party has any concern, question or complaint regarding any accounting, auditing or internal controls matter, any issues arising under our Code of Conduct or any other matter that he or she wishes to communicate with the Board of Directors, the non-managementX
Don McGovern
Chair
X
Greg Revelle
X
X
Jenell Ross
X
X
Bala Subramanian
X
X
Alex Vetter
Bryan Wiener
X
X
Audit Committee
The Audit Committee assists our Board in its oversight of the integrity of our financial statements and the qualifications, independence and performance of our independent auditor. The Audit Committee has discretion to appoint annually our independent auditor, to evaluate its independence and performance and to set clear hiring policies for the independent auditor’s employees or former employees.
The Audit Committee’s responsibilities include the following:
the accounting and financial reporting processes of the Company;
the integrity of the financial statements of the Company;
the independent auditor’s qualifications, performance, compensation and independence;
the design, implementation and performance of the Company’s internal audit function;
the compliance by the Company with legal and regulatory requirements;
reviewing and approving or ratifying related person transactions between us or our subsidiaries and related persons; and
Company policies with respect to risk assessment and management, including financial, data privacy and security (including cybersecurity), business continuity, and operational risks.
The current members of the Audit Committee are Don (Chair), Jill, Tom, Mike, Greg, Jenell and Bala, each of whom our Board has determined to be “independent” under the NYSE corporate governance rules and Rule 10A-3(b)(1) under the Securities Exchange Act. Jill was re-elected to the Audit Committee in March of 2021 and Jenell was appointed in April of 2021. Our Board has determined that each member of the Audit Committee meets the NYSE’s financial literacy requirements and that Don qualifies as an “audit committee financial expert” under SEC rules. The Audit Committee met nine times in 2020.
Compensation Committee
The Compensation Committee discharges our Board’s responsibilities relating to compensation of the Company’s directors, executives, and senior officers and has overall responsibility for oversight of the
Company’s compensation plans, policies, and programs. The Compensation Committee’s duties and responsibilities include reviewing and approving on an annual basis corporate goals and objectives relevant to compensation of the CEO and other members of the executive team as well as approving all grants of equity-related compensation. The Compensation Committee, together with the ESG Committee, reviews the Company’s Organization and Succession Plan at least annually.
The current members of the Compensation Committee are Scott (Chair), Jerri, Mike, Don, Greg, Bala, and Bryan. Our Board has determined that each member of the Compensation Committee meets the independence requirements of the SEC as well as those of the NYSE. The Compensation Committee met four times in 2020. The Compensation Committee also held one joint meeting with the ESG Committee in 2020.
The Compensation Committee has primary responsibility for administering our Omnibus Incentive Compensation Plan and in that role is responsible for approving equity grants to employees.
The Compensation Committee also oversees the organization plan and senior officer succession planning in consultation with the ESG Committee.
Under its charter, the Compensation Committee may, in its sole discretion, retain or obtain advice of a compensation consultant, independent legal counsel, or other adviser. The Compensation Committee is directly responsible for the appointment, compensation and oversight of any such consultant, counsel or adviser, and the Company shall provide appropriate funding for payment of reasonable compensation to any such consultant, counsel or adviser, as determined by the Compensation Committee. In selecting a consultant, counsel, or adviser, the Compensation Committee evaluates its independence.
During 2020, the Compensation Committee retained Meridian Compensation Partners, LLC (“Meridian”) as its consultant to advise it on executive compensation matters for which Meridian received customary fees. Meridian’s work included providing guidance regarding the treatment of equity compensation awards and related matters. After considering factors used by the Compensation Committee to evaluate independence, the Compensation Committee determined that Meridian is an independent compensation consultant in accordance with applicable SEC and NYSE rules.
Meridian participates in Compensation Committee meetings as requested by the Chair of the Compensation Committee and communicates directly with the Chair of the Compensation Committee outside of meetings. Meridian has provided the following services to the Compensation Committee:
participated in Compensation Committee executive sessions without management present to assist in analyzing executive compensation practices and trends, the appropriate relationship between pay and performance, and other relevant compensation-related matters;
advised regarding market trends and best practices;
consulted with management and the Compensation Committee regarding market data used as a reference for pay decisions;
participated in the design of the Company’s 2020 equity award programs and short-term incentive plan; and
advised regarding the Company’s director compensation program.
Environmental, Social and Governance Committee
The ESG Committee assists our Board in fulfilling its oversight responsibilities relating to our environmental, social and governance (“ESG”) matters, including:
assisting the Board by identifying individuals qualified to become directors consistent with criteria approved by the Board;
advising, educating and making recommendations to the Board on corporate governance matters;
reviewing Company policies, practices and positions relating to ESG issues in order to further its corporate citizenship and sustainability responsibilities, including issues related to the environment, climate change, human rights, labor rights, and diversity and inclusion, considering the impact on internal and external stakeholders;
recommending Board committee appointments and chairs;
overseeing executive management succession planning in consultation with the Compensation Committee; and
leading the Board in its annual review of the performance of management and of the Board itself and its committees.
The ESG Committee, together with the Compensation Committee reviews the Company’s Organization and Succession Plan at least annually.
The current members of the ESG Committee are Jill (Chair), Scott, Jerri, Tom, Jenell and Bryan, all of whom have been determined by the Board to be “independent” under the NYSE corporate governance rules. Jenell was appointed to the ESG Committee in April of 2021. The ESG Committee met three times in 2020. The ESG Committee also held one joint meeting with the Compensation Committee in 2020.
The Board’s Role in Risk Oversight
Our business faces various risks, including strategic, financial, legal, operational, and accounting risks. Identifying, managing and mitigating our exposure to these risks and effectively overseeing this process is critical to our operational decision-making and annual planning processes. While management is responsible for the day-to-day management and mitigation of risk, our Board has the ultimate responsibility for risk oversight. Management reviews and discusses risks with the Board as part of the business and operating review conducted at each of the regular meetings of the Board.
While the Board has primary responsibility for overseeing the Company’s risk management, each committee of the Board also considers risk within its area of responsibility. Each committee regularly reports back to the Board on its risk oversight activities and invites the Board to committee meetings for the discussion of risks that the chair of that committee believes will benefit non-committee member directors. The Audit Committee has primary oversight of our risk assessment and financial risk management, including financial reporting, internal control and compliance risks and also oversees risks arising from related-party transactions, data privacy and security (including cybersecurity), business continuity and operations. At least quarterly, the Audit Committee meets separately with our internal auditor and representatives from our independent auditor. In addition, management regularly reports to the Audit Committee on litigation and regulatory developments, our compliance with the Sarbanes-Oxley Act of 2002, as amended, cybersecurity and other corporate compliance policies. The Compensation Committee reviews risks arising from our compensation programs generally, and our executive compensation programs in particular. The ESG Committee oversees risks related to our governance structure, succession planning and our policies, practices and positions to further our ESG responsibilities.
Compensation and Risk
The Company has undertaken a risk review of the Company’s employee compensation plans and arrangements in which our employees (including our executive officers) participate, to determine whether these plans and arrangements have any features that might create undue risks or encourage unnecessary and excessive risk-taking that could threaten the value of the Company. 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 the following:
a commission-based incentive program for sales employees that results in payout based only on measurable financial or business-critical metrics;
annual bonuses with a portion for executive employees that are funded based on Company performance and are paid based on a combination of quantitative and/or qualitative factors and individual performance; and
our practice of awarding long-term equity grants to our executives upon hire and annually in order to directly tie the executive’s expectation of compensation to their contributions to the long-term value of the Company.
Based on our review, we concluded that any potential risks arising from our employee compensation programs, including our executive programs, are not reasonably likely to have a material adverse effect on the Company.
Communications with All Interested Parties
If a stockholder or any interested party has any concern, question or complaint regarding any accounting, auditing, or internal controls matter, any issues arising under our Code of Conduct or any other matter that he or she wishes to communicate with the Board, the non-executive directors as a group, or any individual director, the stockholder or interested party may write to any of these groups or individuals at c/o Cars.com Inc., Attention: Chairman of the Board, 300 S. Riverside Plaza, Suite 1000, Chicago, Illinois 60606. The Chairman of our Board of Directors will relay the communication to the full Board, of Directors, director group, or individual director as appropriate. From time to time, the Board of
Directors may change the process for stockholder communication with the Board of Directors or its members. Refer to our website at investor.cars.com under “Governance” for any changes in this process.
Whistleblower Hotline
The Board of Directors has established a means for employees, customers, suppliers, stockholders and other interested parties to submit confidential and anonymous reports of suspected or actual violations of our Code of Conduct or other matters. Any employee, stockholder, or other interested party may call the hotline and submit a report. The hotline is operational 24 hours a day, seven days a week. Information on our hotline is available in our Ethics Reporting Guidelines, which are available on our website at investor.cars.com under “Governance.“Governance,” our Code of Conduct, our Employee Handbook, our annual employee training and our employee intranet.
Availability of Corporate Governance Documents
Our Corporate Governance Guidelines, Code of Conduct, Ethics Reporting Guidelines, and other corporate policies may be viewed on our website at investor.cars.com under “Governance.” In addition, these documents are available in print to any stockholder who requests them by writing to Investor Relations at the Company’s headquarters.
Compensation Committee Interlocks and Insider Participation
Scott, Jerri, Mike, Don, Greg, Bala and GregBryan are the members of the Compensation Committee. No Compensation Committee member has ever been an officer or employee of the Company. No executive officer of the Company currently serves, or during the past year has served, as a member of the board of directors of any other entity that has one or more executive officers serving on our Board of Directors or Compensation Committee.
Director Share Ownership and Retention Policy
Our non-employeenon-executive directors are subject to minimum share ownership and share retention requirements. Under these requirements, our non-employeenon-executive directors are expected to hold shares of our common stock with a value of three times the annual cash retainer (the current requirement is $225,000). Our non-employee
non‑executive directors are expected to hold at least 50% of the shares received from Cars.comthe Company as compensation until the stock ownership requirements are met.
Environmental, Social and Corporate Governance
Corporate responsibility at the Company is driven by our desire to build a culture and business that cares about our people, our customers, our community and our planet. Upholding the highest standards of integrity, inclusion and responsible business operating practices is one of our highest priorities. Our long-term approach is to integrate best practices and emerging norms in the areas of environmental consciousness, social responsibility, ethics, diversity and inclusion, corporate governance, and data privacy into our strategy and actions as a company.
To meet the expectations of our stakeholders and to earn and maintain their trust, we continue to update our sustainability and social responsibility policies and processes. We manage our business with ESG criteria as important operational considerations, including the following:
Tying a portion of 2021 executive incentive compensation to the Company’s ESG strategy by creating individual plans of action with specific ESG goals;
Talent development and retention policies;
Workforce/labor policies including an Employee Code of Conduct, a whistleblower policy, and an anti-harassment policy;
Policies to ensure appropriate focus on data security and privacy;
Sustainability practices that reduce overall energy consumption and GHG emissions, including the transition in 2021 to an external cloud services provider, thereby reducing the emissions from our data warehousing activities;
Additional volunteer opportunities to serve the communities in which we operate and the furthering of our partnership with the National Association of Minority Automobile Dealers to provide technologies and tools to help their businesses;
Company policies with respect to risk assessment and risk management, including financial, data privacy and security (including cybersecurity), business continuity, and operational risks; and
Responsible corporate governance mechanisms that protect stockholder rights and increase board transparency and accountability.
The ESG Committee has primary responsibility for these activities generally, including assuring that the three standing committees of the Board fulfill their responsibility to oversee risk management of ESG issues within the specific areas of their competence.
Please visit our Corporate Responsibility page at investor.cars.com/ESG for more information.
Compensation of Non-EmployeeNon-Executive Directors
Under the Cars.com OutsideCompany’s Non-Executive Director Compensation Program, each of our non-employeenon-executive directors receives the following for the applicable director compensation year:
an annual cash retainer of $75,000, payable quarterly;quarterly, which was temporarily reduced by 20% ($15,000) per quarter for two quarters in 2020 in response to the COVID-19 pandemic (plus, commencing in 2021, an additional $1,000 per meeting if the number of meetings of any one committee exceeds eight meetings per year);
an annual equity award in the form of restricted stock units (“RSUs”) with a grant date value equal to $150,000 (increased to $180,000 commencing in 2021), which award will vest on the terms described in the table below and be eligible for dividend equivalents which would be deemed to be reinvested in shares of our common stock; and
in the table below and be eligible for dividend equivalents that would be deemed to be reinvested in shares of our common stock; and |
an additional annual cash retainer fee of $20,000, payable quarterly, to committee chairs, which was temporarily reduced by 20% ($4,000) per quarter for two quarters in 2020 due to the COVID-19 pandemic, and an additional annual equity award to the independent Chairman of the Board in the form of RSUs with a grant date value equal to $75,000, to the independent Chairman of the Board of Directors, which award will vest on the terms described below and be eligible for dividend equivalents.
Commencing with the 2018 equity awards, non-employeeNon-executive directors have beenare generally afforded the option to defer receipt of their equity awards after their vesting date. Distribution of the 2017 equity awards to non-employee directors is generally automatically deferred until the termination of service of the directors.
20172020 Director Compensation Table
The following table shows the compensation paid to our non-employeenon-executive directors for their service on the Board of Directors during the fiscal year ending on December 31, 2017.2020. Alex, our President and Chief Executive Officer,CEO, did not receive additional compensation for his service on our Board of Directors.the Board. Alex’s compensation is described in the “2017“2020 Summary Compensation Table.”
Name | Fees Earned or Paid in Cash ($) (1) |
| Stock Awards ($) (2) |
| Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | Nonqualified Deferred Compensation Earnings ($) | All Other Compensation ($) | Total ($) |
| |||
Scott Forbes |
| 55,417 |
|
| 525,027 |
| - | - | - | - |
| 580,444 |
|
Jerri DeVard |
| 43,750 |
|
| 150,008 |
| - | - | - | - |
| 193,758 |
|
Jill Greenthal |
| 55,417 |
|
| 150,010 |
| - | - | - | - |
| 205,427 |
|
Thomas Hale |
| 43,750 |
|
| 150,008 |
| - | - | - | - |
| 193,758 |
|
Donald A. McGovern, Jr. |
| 55,417 |
|
| 150,008 |
| - | - | - | - |
| 205,425 |
|
Greg Revelle |
| 43,750 |
|
| 150,008 |
| - | - | - | - |
| 193,758 |
|
|
|
|
|
Name | Fees Earned or Paid in Cash ($)(1) |
| Stock Awards ($)(2) |
| Total ($) |
| ||||
Scott Forbes |
| 85,500 |
|
| 225,002 |
|
| 310,502 |
| |
Jerri DeVard |
| 67,500 |
|
| 150,001 |
|
| 217,501 |
| |
Jill Greenthal |
| 85,500 |
|
| 150,001 |
|
| 235,501 |
| |
Thomas Hale |
| 67,500 |
|
| 150,001 |
|
| 217,501 |
| |
Mike Kelly |
| 67,500 |
|
| 150,001 |
|
| 217,501 |
| |
Don McGovern |
| 85,500 |
|
| 150,001 |
|
| 235,501 |
| |
Greg Revelle |
| 67,500 |
|
| 150,001 |
|
| 217,501 |
| |
Bala Subramanian |
| 67,500 |
|
| 150,001 |
|
| 217,501 |
| |
Bryan Wiener |
| 67,500 |
|
| 150,001 |
|
| 217,501 |
| |
|
|
|
|
|
|
|
|
|
|
|
(1) | Reflects annual cash retainer of $75,000, which was temporarily reduced to $15,000 per quarter for two quarters in 2020, and an additional annual cash retainer of $20,000, which was likewise temporarily reduced to $4,000 per quarter for two quarters in 2020, for service as a committee chair, if applicable, all paid quarterly. |
| ||||||||
(2) | On May 18, 2020, an annual equity award in the form of 27,076 RSUs was granted to each non-executive director based on a grant date value equal to $150,000. Scott received an additional annual equity award of 13,538 RSUs based on a grant date value equal to $75,000 for serving as the independent chair. Each of these RSUs will vest on the earlier of May 14, 2021 or the day preceding the 2021 Annual Meeting of Stockholders. Directors were entitled to convert their RSUs to Restricted Stock Awards (“RSAs”) and make an 83(b) election with respect to such RSAs. Jerri, Tom, Don and Greg made such elections converting their RSUs to RSAs, with such RSAs having the same vesting schedule as the RSUs. |
|
Deferred Compensation Plan
In connection with the separation from our former parent, TEGNA, we adopted the Cars.com Deferred Compensation Plan (the “DCP”), and we, under the DCP, assumed liabilities of TEGNA under its deferred compensation plan relating to Jill, who became a director of Cars.com. Under the DCP, Jill had been given the opportunity to defer all or a portion of her compensation from TEGNA (including cash compensation and equity awards). The amounts Jill deferred were deemed invested in the investment options specified under the plan as designated by her, provided that deferrals of RSUs payable in our common stock are deemed to be invested in our common stock and will be paid in shares of our common stock. Amounts that she elected to defer into the DCP are generally paid at the time and in the form she elected.30
Our ExecutiveExecutive Officers
Our executive team strikes a critical balance between company veterans and new expertise. Both Alex, our Chief Executive Officer, and John Clavadetscher, our Chief Revenue Officer, haveCEO, helped build Cars.com from launch, serving the companyCompany for almostover 20 years. More recentOther members of the team include Becky Sheehan,Sonia Jain, our Chief Financial Officer, Doug Miller, our Chief Revenue Officer and Jim Rogers, our Chief Legal Officer. OtherAdditional members of our executive team have experience in digital product development, online brand strategy, growth marketing and redesigning customer experience at leading online companies including Twitter, TicketmasterOrbitz, Vivid Seats, Belly, Enova, and Avant, an online lending company.and others have automotive experience with leading OEMs and operating dealerships. Our executive team has the right skills to help us connect car buyers and car sellers more intelligently and efficiently, and to position Cars.com Inc. as the leading online automotive marketplacedigital solutions provider for auto dealers, automobile manufacturers, buyers and sellers.
Prior to joining Cars.com in 2017, Becky was Executive Vice President and Chief Financial Officer of FTD, a company that sells flowers and gifts and whose brands include ProFlower and Interflora, where she also served in the office of the Chief Executive Officer. Revenues at FTD more than doubled, through organic expansion and acquisitions, during her tenure.
Prior to joining Cars.com in 2016, Jim served as Senior Vice President and General Counsel of Orbitz Worldwide. He oversaw legal, compliance, corporate communications and government relations at the company, including during its merger with Expedia, a process which included successfully overcoming federal regulator objections.
John has been an integral part of the Cars.com team since 1999. Since joining the first Cars.com product management team, he has held increasingly significant leadership positions in the Cars.com sales function during his tenure. He helped build the teams, systems and processes that accelerated our sales and grew our revenue, while adding significant value to our advertisers, consumers and owners.
More informationInformation on Alex, who is also a member of our Board, of Directors, can be found above under “Proposal 1: Election of Directors – Meet the Director Nominees – T. Alex Vetter.” More informationInformation on Becky,Sonia, Doug and Jim and John can be found below.
Sonia Jain
Chief Financial Officer Age: 41 | Sonia has served as Chief Financial Officer since July 2020. She leads accounting, finance and analytics, treasury, investor relations, and strategic planning. Prior to joining Cars.com, Sonia spent 10 years in various finance roles with Outerwall and Redbox, an innovative consumer-facing media and technology Company now owned by Apollo Global Management. She served as the Chief Financial Officer of Redbox from 2016 to 2020 and as a board member in 2020. During her tenure at Redbox, Sonia helped launch Redbox On Demand, a digital streaming service, and Redbox Entertainment, a division that acquires and produces new content. She also drove improved business performance through pricing strategy and content curation. Sonia previously worked at both Morgan Stanley and McKinsey. She holds an MBA from Harvard Business School and a BSE and MS in Electrical Engineering from Princeton University and the Massachusetts Institute of Technology, respectively. |
James F. Rogers
Chief Legal Officer Age: 68 | Jim has served as Chief Legal Officer since October 2016. He is responsible for the legal aspects of the Company’s securities and corporate governance, and as such leads the Company’s compliance and ethics, cybersecurity and privacy functions. He also manages the legal aspects of the Company’s M&A, commercial and contract, intellectual property, executive compensation, and labor and employment activities. Jim has helped Cars.com achieve a number of important milestones, including spinning off as an independent, publicly traded company, acquiring Dealer Inspire, establishing a $900 million credit facility and later refinancing the facility and issuing senior notes, as well as advancing the Company’s risk management, compliance and ESG programs. Prior to joining Cars.com, Jim served as the Senior Vice President and General Counsel for Orbitz Worldwide, Inc., a global online travel company. Jim was also the Senior Vice President and General Counsel for TLC Vision Corporation, a private equity-backed vision care company. Before joining TLC Vision Corporation, he was a partner with Latham & Watkins LLP. Early in his career Jim clerked for the Hon. Ruth Bader Ginsburg and for the Hon. Charles Clark. Jim holds a JD from Columbia Law School, an MPA in Economics and Public Policy from Princeton University and a BA in Economics from Yale University. |
Doug Miller
Chief Revenue Officer Age: 50 | Doug has served as Chief Revenue Officer since July 2018. He oversees the Company’s sales channels and revenue operations, building on customer relationships with local automotive dealers as well as major dealer groups, national brands and OEMs. Doug is leading the transformation of the go-to-market organization to help expand the Company from a listings model to a business where media, digital solutions and data all work together to support customers’ goals and growth of the business. Prior to joining Cars.com, Doug served as Chief Revenue Officer at online consumer marketplace LivingSocial, where he helped grow the company from a small start-up to a global enterprise with nearly $2 billion in sales. Previously, Doug held executive positions at Expedia, Ticketmaster and Citysearch. Doug holds a BA in Sociology from Hamilton College in Clinton, NY. |
Compensation Discussion and Analysis
The Compensation Committee is committed to the close alignment of our executive pay programs with Company and individual performance and our stockholders’ interests, while ensuring we can attract and retain key talent in the organization. In this section, we describe the material components of our executive compensation program for the following individuals, who were “Named Executive Officers” (or “NEOs”) of Cars.com Inc. during the fiscal year ended December 31, 2020:
Position with Cars.com Inc. | |
Alex Vetter | Chief Executive Officer |
Sonia Jain (1) | Chief Financial Officer |
Jandy Tomy (2) | Vice President, Treasurer – former interim Chief Financial Officer |
Becky Sheehan (3) | Former Chief Financial Officer |
Jim Rogers | Chief Legal Officer |
Doug Miller | Chief Revenue Officer |
(1)Sonia was hired as Chief Financial Officer on July 6, 2020.
(2)Jandy served as interim Chief Financial Officer from January 10, 2020 to July 5, 2020.
(3)Becky resigned the position of Chief Financial Officer, effective January 10, 2020.
The Compensation Discussion and Analysis is organized into four sections:
Our Compensation Philosophy
Role of the Compensation Committee, Management, Compensation Consultants and Peer Groups
Elements of Our Executive Compensation Practices
Executive Compensation Policies and Arrangements
Our executive compensation program is designed to attract, motivate, retain and fairly reward highly skilled executives who bring the business acumen necessary to achieve our long-term business objectives. We pay for performance and design executive compensation programs that reward short- and long-term performance and align the financial interests of executive officers with those of our stockholders. To that end, the compensation packages provided to our executives include both cash- and equity-based components. We evaluate performance and compensation levels to ensure that:
We maintain our ability to attract and retain outstanding employees in executive positions
Executive compensation remains competitive with the compensation paid to similarly situated executives at comparable companies
Compensation programs are applied in an internally consistent manner
What We Do in Our Compensation Programs
Establish, communicate and monitor measurable goals and objectives
Review total compensation when making executive compensation decisions
Establish maximum award levels for short- and long-term incentive plans
Obtain advice of an independent compensation consultant
Assess our programs against peer companies and best practices
Require executives to pre-clear all stock transactions
Avoid incentives that encourage excessive risk
Annually assess risk associated with our compensation program
Require adherence to our executive stock ownership and holding guidelines
Subject incentive compensation of executives to our clawback policy
Engage with stockholders regarding perspectives on executive compensation
What We Do Not Do in Our Compensation Programs
No tax gross-ups on change in control
No single-trigger change-in-control payments
No dividends or dividend equivalents on unearned or unvested share units
No hedging transactions or short sales involving Company stock
No pledging of Company stock as collateral or depositing or holding Company stock in a margin account
No executive perquisite programs
Role of the Compensation Committee, Management, Compensation Consultants and Peer Groups
Role of the Compensation Committee
Our Compensation Committee is responsible for establishing the compensation of our NEOs and other senior officers.
The Compensation Committee oversees (i) administration of the Company’s executive compensation plan, policies and programs, including corporate goals and objectives relating to compensation, short-term bonus (incentive) plans and long-term equity compensation plans, (ii) approval of grants of equity awards, and (iii) senior officer organization and succession planning.
The Compensation Committee is appointed by the Board. For the purposes of this Compensation Discussion and Analysis, we refer to the Compensation Committee as the “Committee.”
Role of Executive Officers
Management participates in the review and refinement of our executive compensation program. The CEO meets with the Committee to discuss compensation packages for the executive team and to review the performance of the Company and each executive, other than himself, and makes recommendations with respect to the appropriate base salary, annual cash bonus and grants of long-term equity awards. After considering these recommendations and other considerations discussed below, the Committee determines the annual compensation package for each executive.
Role of Compensation Consultants
The Committee retained Meridian, an independent compensation consulting firm, to assist in the review of our 2020 compensation plans, the outcomes of our compensation practices and insights into peer group pay practices for positions held by the NEOs.
We also use non-customized surveys or other data from compensation consulting firms. A more detailed description of the compensation peer group review and use of survey and other data provided by compensation consultants is included below in the section titled “Role of Peer Groups, Surveys and Benchmarking.”
Role of Peer Groups, Surveys and Benchmarking
We consider multiple sources of data to evaluate the fairness of potential rewards associated with our compensation structures and whether they meet our compensation objectives. We also consider how our compensation practices compare to market practices among relevant companies in terms of size, industry and geography. Among other factors considered are the following, when available, regarding compensation for executives:
Data from base salary, bonus and equity compensation surveys that include companies of a similar size, based on market capitalization and revenues;
Compensation data for executive officer positions for comparable companies based upon current and prior proxy statements and other SEC filings of relevant companies, including direct industry competitors and non-industry companies with which we commonly compete for talent (including both regional and national competitors).
The Committee may consider competitive market compensation of peer group companies but does not attempt to maintain a certain target percentile within the peer group or otherwise rely solely on such data. The Committee strives to incorporate flexibility into the compensation programs and processes to respond to and adjust for its evolving business and the value delivered by the executive officers.
2020 Peer Groups
For 2020, with the assistance of Meridian, the Committee utilized a compensation peer group in order to assess alignment and competitiveness of the compensation of our NEOs with industry peers regarding pay levels, performance criteria and pay structure and design. The 2020 peer group includes 16 companies. With the exception of CarGurus, Inc., which was added for 2020, all of the companies listed below were utilized in 2019, 2018 and 2017. No firm was removed from the list in 2020. In connection with the Compensation Committee’s approval of executive officer base salary, incentives and equity compensation discussed below in the sections titled “Elements of Our Executive Compensation Practices,” data regarding compensation practices for comparable executive officer positions at the following peer companies were considered:
Executive Officer Peer Group | |
CarGurus, Inc. | J2 Global, Inc. |
Carvana Co. | LogMeIn, Inc. |
Cornerstone OnDemand, Inc. | Match Group, Inc. |
CoStar Group, Inc. | Shutterstock, Inc. |
Endurance International Group Holdings, Inc. | TripAdvisor, Inc. |
Gogo Inc. | TrueCar, Inc. |
Groupon, Inc. | Yelp Inc. |
Grubhub Inc. | Zillow Group, Inc. |
Maintaining a strong relationship with our stockholders to understand their perspectives is an important part of the Company’s success and can increase corporate accountability, improve decision making and help create long-term value. Our senior management team, including the President and Chief Executive Officer, the Chief Financial Officer, and Head of Investor Relations, as well as our Chairman of the Board regularly engage in meaningful dialogue with our stockholders through in-person and teleconference meetings, earnings calls and other channels of communication. The Company engages in proactive outreach to stockholders to discuss and receive input, provide additional information, and address questions about our business strategy, executive compensation programs, corporate governance, ESG integration and other topics of interest to our stockholders. These engagement efforts allow us to better understand our stockholders’ priorities and perspectives and provide us with useful input concerning these topics.
Elements of Our Executive Compensation Practices
As described below, the key elements of our compensation package for NEOs are base salary, short-term (annual) cash incentive plan (“STIP”) awards, equity-based awards, and our benefits programs.
Pay Elements | Objective | Benefit to Stockholders |
Base Salary | Provides NEOs with competitive level of fixed compensation Reflects individual performance and scope of responsibilities, as well as the competitive market for executive talent | Competitive salaries help us attract and retain talented executives |
STIP | Rewards executives for achieving annual company and individual goals | Focused on meeting key short-term business objectives and performance metrics |
Equity-Based Awards | Provides equity awards for NEOs to focus on long-term stockholder value creation | Award value is based on long-term growth of the Company’s stock price Assists in retention of key executives |
Pay Mix, Awards, and Targets
Each executive officer’s compensation has been individually designed to provide a combination of fixed and at-risk compensation that is tied to achievement of the Company’s short- and long-term objectives.
Equity grants represent a significant portion of our executives’ total direct compensation (sum of base salary, STIP and equity-based awards). This helps to align our NEOs’ interests with those of our stockholders. We intend to continue our practice of awarding equity to our executives as it reaffirms our philosophy of paying for performance and aligning compensation directly to long-term value and growth of the Company.
The following charts show the weight of each element of compensation relative to target direct compensation for our CEO and the other NEOs, in the aggregate:
In 2020, 90% of aggregate CEO target direct compensation was variable compensation. Of that amount, 13% was in the form of the STIP cash-based award and the remaining 87% was in the form of Long-Term Incentive Plan equity-based awards with multi-year vesting periods.
In 2020, 76% of aggregate NEO (other than CEO) target direct compensation was variable compensation. Of that amount, 27% was in the form of the STIP cash-based award and the remaining 73% was in the form of Long-Term Incentive Plan equity-based awards with multi-year vesting periods.
Base Salary
We offer base salaries that provide fixed compensation to executives for performance of day-to-day services. Each NEO’s base salary is generally reviewed annually to determine whether an adjustment is warranted or required based on the competitive market, the economic environment and the individual’s performance.
In determining base salaries for our NEOs, the Committee considers a number of factors, including:
• | The scope of responsibilities, prior experience and qualifications; |
• | Past individual performance; |
• | Base salary and total compensation relative to other executives in similar positions; |
• | Competitive market conditions and market data; and |
• | Recommendations of the CEO, other than with respect to his own compensation. |
The Committee approved salaries increases for certain of our NEOs for 2020.
Name | 2019 Annual Base Salary ($) | 2020 Annual Base Salary ($) |
Alex Vetter | 566,500 | $650,000 |
Sonia Jain | - | $480,000 |
Jandy Tomy | 276,750 | $285,000 |
Jim Rogers | 360,500 | $360,500 |
Doug Miller | 400,000 | $412,000 |
The 2020 salary of Becky Sheehan, our former CFO, was $515,000 when she resigned her employment with us on January 10, 2020.
Short Term Incentive Plan (STIP) Awards
We offer our NEOs the opportunity to earn STIP awards based on achieved performance against Committee-approved performance goals. The Committee, in its sole discretion with respect to the CEO and in collaboration with the CEO for all other NEOs, determines whether and to what extent STIP awards shall be paid to each NEO.
Overview of 2020 STIP Awards
In 2020 our NEOs participated in our STIP program. The Committee set each NEO’s 2020 target STIP award opportunity (expressed as a percentage of base salary) based on a number of factors, including the NEO’s scope of duties and responsibilities, internal pay equity considerations and competitive market conditions and data. The cash payout under this program was based on the following Committee-approved performance factors: (i) the Company Performance Factor (CPF), which related to achieved performance against two equally weighted performance metrics, Adjusted EBITDA (as defined in the Company’s Credit Agreement) and Revenue, and (ii) the Individual Performance Factor (IPF), which related to each NEO’s performance.
Based on achieved performance against the two financial metrics, an NEO may earn between 0% and 200% of the NEO’s target STIP opportunity. The threshold payout for Adjusted EBITDA was set at 12.5% of the NEO’s target STIP opportunity and the threshold payout for Revenue was set at 25% of the NEO’s target STIP opportunity. As described below, the amount earned under the financial metrics is subject to adjustment based on an NEO’s IPF.
Impact of COVID on 2020 STIP Calculation
Building off our strong financial and business performance in the fourth quarter of 2019, we began the year with impressive Q1 2020 results. By the middle of March, however, the COVID-19 crisis began to have a significant and unavoidable impact on our industry, customers, employees and consumers with a disproportionate amount of that impact being in the second quarter. Recognizing the severity with which the crisis would impact our customers, we issued financial support in the form of discounts for the second quarter to help our customers during a period of reduced auto sales and cash flow and to signal our commitment to the dealer community. At the same time, we negotiated significant cost-reductions with many of our vendors, negotiated additional flexibility in our debt covenants and made material expense reductions.
In response to the exogenous and unanticipated economic impacts caused by the pandemic, the Committee determined that it should maintain the STIP performance targets it had adopted earlier in year, but judge performance against those targets without regard to the second quarter, the period when the Company issued discounts to customers. The Committee concluded that the Company had performed exceptionally in response to the pandemic and wanted to measure such performance objectively, which was best achieved by looking outside the period directly impacted by the customer discounts.
Accordingly, the Committee determined to modify the calculation for Revenue and Adjusted EBITDA for 2020 to exclude the results of the second quarter and annualize the results of the other three quarters in calculating the CPF based on the targets the Committee had originally approved. The Committee recognized that this would not entirely eliminate the financial effect of the pandemic on the Company but felt that this adjustment would strike an appropriate balance. Recognizing that the Company’s performance, while admirable in light of the pandemic, was still below what had originally been anticipated, the Committee determined that the revised results should not lead to a CPF in excess of 100%, and ultimately concluded that 95% was the appropriate level for 2020.
Determination of 2020 STIP Awards
Using the modified annualized Revenue and Adjusted EBITDA calculations described above, the table below shows target, threshold and maximum goals for each financial metric, 2020 results achieved against these goals and the CPF payout calculation (expressed as a percentage of target STIP opportunity) for each financial metric. This calculation would have resulted in an aggregate CPF calculation of 127.9%, but the plan adopted by the Committee capped the CPF at 100%, and the Committee ultimately determined to set the CPF at 95%.
Financial Metrics | Goal Weighting | Threshold $ (Payout %) | Target $ | Maximum $ | 2020 Results $(1) | Performance Payout % |
|
| 37.5% | 100% | 200% |
|
|
Revenue ($ in millions) | 50.0% | $556.5 (25%) | $618.3 | $680.1 | $594.0 | 45.1% |
Adjusted EBITDA ($ in millions) | 50.0% | $149.4 (12.5%) | $166.0 | $182.6 | $176.9 | 82.8% |
(1) | 2020 results for Revenue and Adjusted EBITDA modified to exclude the results of the second quarter and annualize the results of the other three quarters. |
In general, based on an NEO’s individual performance, the CEO recommends to the Committee (other than for himself) the NEO’s IPF, which may range between 0% to 150%. The Committee determines the CEO’s IPF. For 2020, the Committee determined to award bonuses to each NEO at target, resulting in an IPF of slightly more than 105%, in recognition of his or her leadership and execution during the unprecedented challenge and uncertainty engendered by the COVID-19 crisis. Note that for Sonia, the terms of her offer letter dictated a 100% CPF, resulting in an IPF of 100% to yield a bonus at target.
Based on such payout percentages, the Compensation Committee approved the following determination of each NEO’s 2020 cash award under the STIP:
Name(1) | 2020 Annual STIP Target (%) of Base Salary | 2020 Annual STIP Target ($) | 2020 CPF % | 2020 IPF % | 2020 STIP Award ($) |
Alex Vetter | 110% | $669,075 | 95.00% | 105.263% | $669,075 |
Sonia Jain(2) | 100% | $234,769 | 100.00% | 100.0% | $234,769 |
Jandy Tomy | 50% | $138,938 | 95.00% | 105.0% | $138,590 |
Jim Rogers | 50% | $180,250 | 95.00% | 105.263% | $180,250 |
Doug Miller | 110% | $446,600 | 95.00% | 105.263% | $446,600 |
(1) | Becky Sheehan was ineligible for a 2020 STIP payout as a result of her termination of employment on January 10, 2020. |
(2) | Sonia’s award is prorated from her July 6 hire date at 100% of target, pursuant to the terms of her offer letter. |
Long-Term Incentive Plan (LTIP) – Equity Awards
The LTIP awards are designed to drive achievement of long-term operational and financial goals and increased stockholder value, as well as to attract and retain key talent over a sustained time period. Target long-term incentive awards are based on a percentage of base salary or a fixed dollar amount. In 2020, the Committee set each NEO’s LTIP target value based on the NEO’s role and responsibilities, internal equity considerations, competitive market conditions and data and target direct compensation.
In the first quarter of 2020, the Committee approved grants of RSUs to each NEO. Although the Committee had granted performance-based RSUs (“PSUs”) to the NEOs in 2018 and 2019, in light of the Company’s ambitious strategic transformation and the competitive dynamics for attracting, retaining and rewarding the talent essential to achieving its strategic plan, the Committee determined that RSU awards would best address the primary objectives that the Committee felt were appropriate. Further the Committee recognized the need to ensure that the NEOs held sufficient equity as a proportion of aggregate compensation.
The Committee and Meridian conducted an extensive benchmarking and analysis of CEO pay in advance of setting CEO compensation for periods beginning in 2020. Based on analysis of the full peer group and the most relevant subset of peer data as well as the successful achievement of the Company’s strategic goals under the CEO’s leadership, the Committee determined that the most appropriate allocation of LTIP awards beginning in 2020 should be composed of two distinct grants. For 2020, 50% of the award value was issued as RSUs and 50% was issued as Non-Qualified Stock Options.
2020 Restricted Stock Units (RSUs)
The number of RSUs granted was determined by dividing the allocated value of each grant by the closing share price of a share of Cars.com Inc. common stock on the date of grant. The 2020 RSUs vest ratably over a three-year period. Generally, an NEO must be employed through each vesting date to avoid forfeiting any unvested RSUs. RSUs that vest on each vesting date are settled in shares of common stock, less shares that may be withheld by the Company for payment of taxes. The following table shows the number of RSUs granted to our NEOs in 2020.
Name | Number of Securities Underlying RSUs Granted in 2020 |
Alex Vetter | 462,963 |
Sonia Jain | 164,668 |
Jandy Tomy | 55,556 |
Becky Sheehan | 0 |
Jim Rogers | 100,139 |
Doug Miller | 156,408 |
2020 Non-Qualified Stock Options (NQSO)
The Stock Options issued to Alex represent 50% of his Target LTIP amount. The number of Stock Options issued was determined by Meridian using the Black-Sholes option pricing model using a 30-day average stock price. The Options have a 10 year-expiration and will vest 100% on March 1st, 2023 if Alex continues in employment through that date.