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
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 Pursuant to §240.14a-12 |
PAYMENTUS HOLDINGS, 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 all boxes that apply):
☒ | No fee required. |
☐ | Fee paid previously with preliminary materials. |
☐ | Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11. |
PAYMENTUS HOLDINGS, INC.
11605 NORTH COMMUNITY HOUSE ROAD
SUITE 300
CHARLOTTE, NORTH CAROLINA 28277
NOTICE OF 20232024 ANNUAL MEETING OF STOCKHOLDERS
To Be Held at 1:00 p.m., Eastern Time, on Friday, June 2, 20237, 2024
Dear Fellow Stockholders:
We are pleased to invite you to attend the 20232024 annual meeting of stockholders of Paymentus Holdings, Inc., to be held on Friday, June 2, 20237, 2024 at 1:00 p.m., Eastern Time. The annual meeting will be conducted virtually via live audio webcast in order to allow our stockholders to participate from any location and to reduce the environmental impact of the meeting. We are committed to ensuring that stockholders are afforded the same rights and opportunities to participate as they would at an in-person meeting. You will be able to attend the annual meeting virtually by visiting www.virtualshareholdermeeting.com/PAY2023,PAY2024, where you will be able to listen to the meeting live, submit questions and vote online.
We are holding the annual meeting to act upon the following matters, as more fully described in the accompanying proxy statement:
to elect three Class IIIII directors to hold office until our 20262027 annual meeting of stockholders and until their respective successors are elected and qualified or until their earlier death, resignation or removal;
to ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for our fiscal year ending December 31, 2023;
to approve an amendment to our Amended and Restated Certificate of Incorporation to limit the liability of certain officers of the company as permitted by Delaware law;2024; and
to transact other business that may properly come before the annual meeting or any adjournments or postponements thereof.
Our board of directors has fixed the close of business on April 6, 202311, 2024 as the record date for the annual meeting. Only stockholders of record on April 6, 202311, 2024 are entitled to notice of and to vote at the annual meeting. Further information regarding voting rights and the matters to be voted upon is presented in the accompanying proxy statement.
Important Notice Regarding the Availability of Proxy Materials for the 20232024 Annual Meeting of Stockholders to Be Held on Friday, June 2, 2023.7, 2024. We are mailing to our stockholders a Notice of Internet Availability of Proxy Materials, or the Notice, containing instructions on how to access over the Internet our proxy statement for our annual meeting and our annual report to stockholders. The Notice provides instructions on how to vote and includes instructions on how to receive a copy of our proxy materials and annual report by mail or e-mail. The Notice, our proxy statement and our annual report to stockholders can be accessed directly at the following Internet address: www.proxyvote.com, using the 16-digit control number located on the Notice or, if you requested to receive a printed copy of the proxy materials, your accompanying proxy card.
YOUR VOTE IS IMPORTANT. Whether or not you plan to attend the annual meeting, we urge you to submit your vote via the Internet, telephone or mail as soon as possible to ensure your shares are represented. For additional instructions on voting by telephone or the Internet, please refer to your proxy card. Returning the proxy does not deprive you of your right to attend the annual meeting and to vote your shares at the annual meeting.
On behalf of the directors, management and employees of Paymentus, thank you for your continued support of and ownership in our company.
By order of the Board of Directors, |
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Dushyant Sharma |
Chairman, President and Chief Executive Officer |
Charlotte, North Carolina |
April |
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PAYMENTUS HOLDINGS, INC.
PROXY STATEMENT
FOR THE 20232024 ANNUAL MEETING OF STOCKHOLDERS
To be held at 1:00 p.m., Eastern Time, on Friday, June 2, 20237, 2024
The information provided in the “question and answer” format below is for your convenience only and is merely a summary of the information contained in this proxy statement. You should read this entire proxy statement carefully.
QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS AND OUR ANNUAL MEETING
Why am I receiving these materials?
This proxy statement and the form of proxy are furnished in connection with the solicitation of proxies by our board of directors for use at the 20232024 annual meeting of stockholders of Paymentus Holdings, Inc., a Delaware corporation, and any postponements, adjournments or continuations thereof. The annual meeting will be held on Friday, June 2, 20237, 2024 at 1:00 p.m., Eastern Time. The annual meeting will be conducted virtually via live audio webcast. You will be able to attend the annual meeting virtually by visiting www.virtualshareholdermeeting.com/PAY2023,PAY2024, where you will be able to listen to the meeting live, submit questions and vote online during the meeting.
The Notice of Internet Availability of Proxy Materials, or Notice, containing instructions on how to access this proxy statement, the accompanying notice of annual meeting and form of proxy, and our annual report, is first being sent or given on or about April 21, 202324, 2024 to all stockholders of record as of April 6, 2023.11, 2024. The proxy materials and our annual report can be accessed as of April 21, 202324, 2024 by visiting https://ir.paymentus.com/financials/sec-filings. If you receive a Notice, then you will not receive a printed copy of the proxy materials or our annual report in the mail unless you specifically request these materials. Instructions for requesting a printed copy of the proxy materials and our annual report are set forth in the Notice.
What proposals will be voted on at the annual meeting?
The following proposals will be voted on at the annual meeting:
the election of three Class IIIII directors to hold office until our 20262027 annual meeting of stockholders and until their respective successors are elected and qualified or until their earlier death, resignation or removal; and
the ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for our fiscal year ending December 31, 2023; and
the approval of an amendment to our Amended and Restated Certificate of Incorporation to limit the liability of certain officers of the company as permitted by Delaware law.2024.
As of the date of this proxy statement, our management and board of directors were not aware of any other matters to be presented at the annual meeting.
How does the board of directors recommend that I vote on these proposals?
Our board of directors recommends that you vote your shares:
“FOR ALL” the director nominees named in this proxy statement; and
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“FOR” the ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for our fiscal year ending December 31, 2023; and2024.
“FOR” the amendment to our Amended and Restated Certificate of Incorporation to limit the liability of certain officers of the company as permitted by Delaware law.-1-
With respect to any other matter that properly comes before the annual meeting, the proxy holders will vote in accordance with their judgment on such matter.
Who is entitled to vote at the annual meeting?
Holders of our Class A and Class B common stock as of the close of business on April 6, 2023,11, 2024, the record date for the annual meeting, are entitled to notice of and to vote at the annual meeting and any postponement or adjournment of the meeting.
How many shares can be voted at the annual meeting?
As of the record date, there were [●]21,847,685 shares of our Class A common stock outstanding and [●]102,278,291 shares of our Class B common stock outstanding. Our Class A common stock and Class B common stock will vote as a single class on all matters described in this proxy statement for which your vote is being solicited. Stockholders are not permitted to cumulate votes with respect to the election of directors. Each share of Class A common stock is entitled to one vote on each matter properly brought before the annual meeting, and each share of Class B common stock is entitled to ten votes on each matter properly brought before the annual meeting. Our Class A common stock and Class B common stock are collectively referred to in this proxy statement as our common stock.
Through their ownership of Class B common stock, can Accel-KKR and our founder and chief executive officer determine the outcome of the proposals?
Yes. Our Class B common stock has ten votes per share and our Class A common stock has one vote per share. Because of the ten-to-one voting ratio between our Class B common stock and Class A common stock, as of the record date, Accel-KKR, or AKKR, and our founder and chief executive officer collectively controlled approximately [●]%over 99% of the voting power of our outstanding common stock and therefore are able to control all matters submitted to our stockholders for approval at the annual meeting.
What is the difference between holding shares as a stockholder of record and as a beneficial owner?
As summarized below, there are some distinctions between shares held of record and those owned beneficially, or in “street name.”
Stockholders of Record
If your shares are registered directly in your name with our transfer agent, American Stock Transfer &Equiniti Trust Company, LLC, then you are considered the stockholder of record with respect to those shares, and the Notice was sent directly to you by us. As a stockholder of record, you have the right to grant your voting proxy directly to the individuals listed on the proxy card or to vote on your own behalf at the annual meeting. We have enclosed a proxy card for you to use.use if you receive printed proxy materials. Throughout this proxy statement, we refer to these holders as “stockholders of record.”
Beneficial Owners, or “Street Name” Stockholders
If your shares are held in a brokerage account or by a broker, bank or other nominee, then you are considered the beneficial owner of shares held in street name, and the Notice was forwarded to you by your
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broker, bank or other nominee, which is considered the stockholder of record with respect to those shares. As a beneficial owner, you have the right to direct your broker, bank or other nominee on how to vote the shares held in your account by following the instructions that your broker, bank or other nominee sent to you. If you do not provide voting instructions, your shares may constitute broker non-votes with respect to Proposal No. 1 and Proposal No. 3.1. If you wish to participate in the meeting and your shares are held in street name, you must obtain, from the broker, bank
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or nominee that holds your shares, the information required, including a 16-digit control number, in order for you to be able to participate in, and vote at, the annual meeting. Throughout this proxy statement, we refer to these holders as “street name stockholders.”
What are broker non-votes and abstentions?
A “broker non-vote” occurs when a bank, broker or other nominee holding shares for a beneficial owner does not vote on a particular proposal because that holder does not have discretionary voting power for that particular proposal and has not received instructions from the beneficial owner. If you are a street name stockholder, your bank, broker or other nominee holder of record is permitted to vote your shares on the ratification of the independent registered public accounting firm, which is a routine matter, even if the record holder does not receive voting instructions from you. Absent instructions from you, the record holder may not vote on any non-routine matter, including for example, a director election, a charter amendment, a matter relating to executive compensation or any stockholder proposal. In that case, without your voting instructions, a broker non-vote will occur. You should consult your bank, broker or other nominee holder if you have questions about this.
An “abstention” will occur at the annual meeting with respect to a proposal if your shares of common stock are deemed to be present at the annual meeting, either because you virtually attend the annual meeting or because you have properly completed and returned a proxy, but you provide explicit instructions to decline to vote on the proposal by indicating that you wish to “ABSTAIN” from voting on such proposal. Under Delaware law (under which we are incorporated), abstentions are counted as shares present and entitled to vote at the annual meeting, but they are not considered votes cast.
Is there a list of registered stockholders entitled to vote at the annual meeting?
A list of registered stockholders entitled to vote at the annual meeting will be made available for examination by any stockholder for any purpose germane to the meeting for a period of at least ten days prior to the meeting between the hours of 9:00 a.m. and 5:00 p.m., Eastern Time, at our principal executive offices located at 11605 North Community House Road, Suite 300, Charlotte, North Carolina 28277 by contacting our corporate secretary.
How many votes are needed for approval of each proposal?
Proposal No. 1—Election of directors
Each director is elected by a plurality of the voting power of the shares present virtually or represented by proxy at the annual meeting and entitled to vote on the election of directors.votes cast. A plurality means that the nominees with the largest number of FOR votes are elected as directors. You may (1) vote “FOR ALL” director nominees named herein, (2) “WITHHOLD ALL” votes for all such director nominees or (3) vote “FOR ALL EXCEPT,” which is a vote for all director nominees other than any nominees with respect to whom your vote is specifically withheld by indicating such in the space provided on the proxy. Because the outcome of this proposal will be determined by a plurality vote, any shares not voted FOR a particular nominee, whether as a result of choosing to WITHHOLD authority to vote or a broker non-vote, will have no effect on the outcome of the election.
Proposal No. 2—Ratification of independent registered public accounting firm
The ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for our fiscal year ending December 31, 20232024 requires the affirmative vote of a majority of the
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voting power of the shares cast. You may vote “FOR” or “AGAINST” this proposal, or you may indicate that you wish to “ABSTAIN” from voting on this proposal. Abstentions will be counted for purposes of determining the presence or absence of a quorum. However, abstentions are not considered votes cast for or against a proposal, and thus will have no effect on the outcome of the vote on this proposal. Because this is a routine proposal, we do not expect any broker non-votes on this proposal.
Proposal No. 3—Amendment to our Amended and Restated Certificate of Incorporation
The amendment to our Amended and Restated Certificate of Incorporation requires the affirmative vote of a majority of the outstanding shares of our common stock entitled to vote thereon. You may vote “FOR” or “AGAINST” this proposal, or you may indicate that you wish to “ABSTAIN” from voting on this proposal. Abstentions and broker non-votes will have the same effect as votes “AGAINST” the proposal.-3-
What is the quorum requirement for the annual meeting?
A quorum is the minimum number of shares required to be present or represented by proxy at the annual meeting for the meeting to be properly held under our Amended and Restated Bylaws and Delaware law. The presence, virtually or by proxy, of holders of a majority of the voting power of our stock issued and outstanding and entitled to vote will constitute a quorum to transact business at the annual meeting. Abstentions, choosing to withhold authority to vote and broker non-votes are counted as present and entitled to vote for purposes of determining a quorum. If there is no quorum, the chairperson of the meeting may adjourn the meeting to another time or place.
How do I vote and what are the voting deadlines?
Stockholders of Record
If you are a stockholder of record, you may vote in one of the following ways:
by Internet at www.proxyvote.com, 24 hours a day, seven days a week, until 11:59 p.m., Eastern time, on June 1, 20236, 2024 (have your Notice or proxy card in hand when you visit the website);
by toll-free telephone at 1-800-690-6903, 24 hours a day, seven days a week, until 11:59 p.m., Eastern time, on June 1, 20236, 2024 (have your Notice or proxy card in hand when you call);
by completing, signing and mailing your proxy card (if you received printed proxy materials), which must be received by 11:59 p.m., Eastern time, on June 1, 2023;6, 2024; or
by attending the annual meeting virtually by visiting www.virtualshareholdermeeting.com/PAY2023,PAY2024, where you may vote during the meeting (have your Notice or proxy card in hand when you visit the website).
Submitting your proxy by Internet, by telephone or by mail will in no way limit your right to vote at the annual meeting if you later decide to attend virtually. Even if you currently plan to virtually attend the annual meeting, we recommend that you also submit your proxy as described above so that your vote will be counted if you later decide not to attend the annual meeting.
Street Name Stockholders
If you are a street name stockholder, then you will receive voting instructions from your broker, bank or other nominee. The availability of Internet and telephone voting options will depend on the voting process of your broker, bank or other nominee. We therefore recommend that you follow the voting instructions in the materials you receive. If your voting instruction form or Notice indicates that you may vote your shares through the proxyvote.com website, then you may vote those shares at the annual meeting with the control number indicated on that voting instruction form or Notice. Otherwise, you may not vote your shares at the annual meeting unless you obtain a legal proxy from your broker, bank or other nominee.
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What if I do not specify how my shares are to be voted or fail to provide timely directions to my broker, bank or other nominee?
Stockholders of Record
If you are a stockholder of record and you submit a proxy, but you do not provide voting instructions, your shares will be voted:
“FOR ALL” director nominees named in this proxy statement; and
“FOR” the ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for our fiscal year ending December 31, 2023; and2024.
“FOR” the amendment to our Amended and Restated Certificate of Incorporation to limit the liability of certain officers of the company as permitted by Delaware law.-4-
In addition, if any other matters are properly brought before the annual meeting, the persons named as proxies will be authorized to vote or otherwise act on those matters in accordance with their judgment.
Street Name Stockholders
Brokers, banks and other nominees holding shares of common stock in street name for customers are generally required to vote such shares in the manner directed by their customers. In the absence of timely directions, your broker, bank or other nominee will have discretion to vote your shares on our sole routine matter: the proposal to ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for our fiscal year ending December 31, 2023.2024. Your broker, bank or other nominee will not have discretion to vote on any other proposals, including the election of directors, and the amendment to our Amended and Restated Certificate of Incorporation, which areis considered a non-routine matters,matter, absent direction from you. In the event that your broker, bank or other nominee votes your shares on our sole routine matter, but is not able to vote your shares on the non-routine matters,matter, then those shares will be treated as broker non-votes with respect to the non-routine proposals.proposal. Accordingly, if you own shares through a nominee, such as a broker or bank, please be sure to instruct your nominee how to vote to ensure that your shares are counted on each of the proposals.
Can I change my vote or revoke my proxy after I return my proxy card?
Stockholder of Record
If you are a stockholder of record, you can change your vote or revoke your proxy before the annual meeting by:
entering a new vote by Internet or telephone prior to 11:59 p.m., Eastern time, on June 1, 2023;6, 2024;
completing and returning a later-dated proxy card, which must be received prior to 11:59 p.m., Eastern time, on June 1, 2023;6, 2024;
delivering a written notice of revocation to our corporate secretary at Paymentus Holdings, Inc., 11605 North Community House Road, Suite 300, Charlotte, North Carolina 28277, Attention: Corporate Secretary, which must be received by 11:59 p.m., Eastern time, on June 1, 2023;6, 2024; or
virtually attending and voting at the annual meeting (although attendance at the annual meeting will not, by itself, revoke a proxy).
Street Name Stockholders
If you are a street name stockholder, then your broker, bank or other nominee can provide you with instructions on how to change your vote or revoke your proxy.
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What do I need to do to attend the annual meeting?
We will be hosting the annual meeting via live audio webcast only. The live audio webcast of the annual meeting will be available for listening by the general public, but participation in the annual meeting, including voting shares and submitting questions, will be limited to stockholders. Attendees will be required to comply with the meeting guidelines and procedures available at www.virtualshareholdermeeting.com/PAY2023.PAY2024.
Stockholders of Record
If you were a stockholder of record as of the record date, then you may attend the annual meeting virtually, and will be able to submit your questions during the meeting and vote your shares electronically during the meeting by visiting www.virtualshareholdermeeting.com/PAY2023.PAY2024. To attend and participate in the annual meeting, you will need the 16-digit control number included on your Notice or proxy card. If you lose your
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control number, you may join the annual meeting as a “Guest” but you will not be able to vote or ask questions. The annual meeting live audio webcast will begin promptly at 1:00 p.m., Eastern Time. We encourage you to access the meeting prior to the start time. Online check-in will begin at 12:45 p.m., Eastern Time, and you should allow ample time for the check-in procedures.
Street Name Stockholders
If you were a street name stockholder as of the record date and your voting instruction form or Notice indicates that you may vote your shares through the proxyvote.com website, then you may access and participate in the annual meeting with the control number indicated on that voting instruction form or Notice. Otherwise, street name stockholders should contact their bank, broker or other nominee and obtain a legal proxy in order to be able to attend and participate in the annual meeting.
Can I ask questions at the annual meeting?
You may submit questions via the Internet during the annual meeting by participating in the webcast at www.virtualshareholdermeeting.com/PAY2023.PAY2024. We will answer timely submitted questions on a matter to be voted on at the annual meeting before voting is closed on the matter. Following adjournment of the formal business of the annual meeting, we will address appropriate general questions from stockholders regarding our company, giving priority to questions with broader stockholder interest. Questions received during the annual meeting will be presented as submitted, uncensored and unedited, except that we may, in our discretion, omit certain personal details for data privacy protection issues and edit profanity or other inappropriate language. If we receive substantially similar questions, we will group those questions together and provide a single response to avoid repetition. Additional information regarding the submission of questions during the annual meeting can be found in our guidelines and procedures, available at www.virtualshareholdermeeting.com/PAY2023.PAY2024.
As noted above, if you lose your control number, you may join the annual meeting as a “Guest” but you will not be able to vote or ask questions.
How can I get help if I have trouble checking in or listening to the annual meeting online?
Online check-in to the annual meeting webcast will begin at 12:45 p.m., Eastern Time. You should allow ample time to log in to the meeting webcast and test your computer audio system. During online check-in and continuing through the duration of the annual meeting, we will have technicians standing by to assist you with any technical difficulties you may have accessing the annual meeting. If you encounter difficulties accessing the virtual meeting during the check-in or meeting time, please call the technical support number that will be posted on the virtual meeting log-in page.
What is the effect of giving a proxy?
Proxies are solicited by and on behalf of our board of directors. Sanjay Kalra, our chief financial officer, and Andrew Gerber, our general counsel and secretary, have been designated as proxy holders for the annual meeting
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by our board of directors. When proxies are properly dated, executed and returned, the shares represented by such proxies will be voted at the annual meeting in accordance with the instructions of the stockholder. If the proxy is dated and signed, but no specific instructions are given, the shares will be voted in accordance with the recommendations of our board of directors on the proposals as described above. If any other matters are properly brought before the annual meeting, then the proxy holders will use their own judgment to determine how to vote your shares. If the annual meeting is postponed or adjourned, then the proxy holders can vote your shares on the new meeting date, unless you have properly revoked your proxy, as described above.
Who will count the votes?
We have retained Broadridge Financial Solutions to tabulate the votes and serve as the independent inspector of election for the annual meeting.
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How are proxies solicited for the annual meeting and who is paying for such solicitation?
Our board of directors is soliciting proxies for use at the annual meeting by means of the proxy materials. We will bear the entire cost of proxy solicitation, including the preparation, assembly, printing, mailing and distribution of the proxy materials. If you choose to access the proxy materials or vote over the Internet, however, you are responsible for Internet access charges you may incur. Copies of solicitation materials will also be made available upon request to brokers, banks and other nominees to forward to the beneficial owners of the shares held of record by such brokers, banks or other nominees, and we will reimburse the reasonable out-of-pocket expenses they incur in doing so. The original solicitation of proxies may be supplemented by solicitation by telephone, electronic communications or other means by our directors, officers or employees. No additional compensation will be paid to these individuals for any such services, although we may reimburse such individuals for their reasonable out-of-pocket expenses in connection with such solicitation. At our discretion, we may engage a proxy solicitation firm to assist us with the solicitation process, for which we will bear the costs of any such engagement.
Where can I find the voting results of the annual meeting?
We will disclose voting results on a Current Report on Form 8-K that we will file with the U.S. Securities and Exchange Commission, or SEC, within four business days after the meeting. If final voting results are not available to us in time to file a Form 8-K, we will file a Form 8-K to publish preliminary results within four business days after the meeting and will provide the final results in an amendment to the Form 8-K as soon as they become available.
Why did I receive a Notice of Internet Availability instead of a full set of proxy materials?
In accordance with the rules of the SEC, we have elected to furnish our proxy materials, including this proxy statement and our annual report, primarily via the Internet. We believe that this process expedites stockholders’ receipt of the proxy materials, lowers the costs of the annual meeting and helps conserve natural resources. As a result, we are mailing to our stockholders a Notice instead of a paper copy of the proxy materials, except for those stockholders who requested to receive paper copies. The Notice contains instructions on how to access our proxy materials on the Internet, how to vote on the proposals, how to request printed copies of the proxy materials and our annual report, and how to request to receive all future proxy materials in printed form by mail or electronically by e-mail. We encourage stockholders to take advantage of the availability of the proxy materials on the Internet to help reduce our costs and the environmental impact of our annual meetings. We may, at our discretion, voluntarily choose to mail or deliver a paper copy of the proxy materials, including our proxy statement and annual report, to one or more stockholders.
Can I access the proxy statement and annual report on the Internet?
Yes. As noted above, we are furnishing our proxy materials to our stockholders via the Internet, except for those stockholders who have elected to receive paper copies. We highly recommend that you receive electronic
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delivery of our proxy statements, annual reports and other stockholder communications. This helps reduce the use of paper and reduces our printing, postage and other costs.
This proxy statement, the form of proxy card and our annual report are available at www.proxyvote.com. If you are a stockholder of record who has requested to receive paper copies of the proxy materials and would like to access our future proxy statements and annual reports electronically instead of receiving paper copies in the mail, there are several ways to do this. You can mark the appropriate box on your proxy card or follow the instructions if you vote by telephone or the Internet. If you choose to access future proxy statements and annual reports on the Internet, you will receive a Notice in the mail next year with instructions containing the Internet address for those materials. Your choice will remain in effect until you advise us otherwise. If you have Internet access, we hope you make this choice.
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What does it mean if I receive more than one Notice or more than one set of printed proxy materials?
If you receive more than one Notice or more than one set of printed proxy materials, then your shares may be registered in more than one name and/or may be registered in different accounts. Please follow the voting instructions on each Notice or each set of printed proxy materials, as applicable, to ensure that all of your shares are voted.
I share an address with another stockholder, and we received only one copy of the Notice or proxy statement and annual report. How may I obtain an additional copy of the Notice or proxy statement and annual report?
We have adopted a procedure approved by the SEC called “householding,” under which we can deliver a single copy of the Notice and, if applicable, the proxy statement and annual report, to multiple stockholders who share the same address unless we receive contrary instructions from one or more stockholders. This procedure reduces our printing and mailing costs. Stockholders who participate in householding will continue to be able to access and receive separate proxy cards. Upon written or oral request, we will deliver promptly a separate copy of the Notice and, if applicable, the proxy statement and annual report, to any stockholder at a shared address to which we delivered a single copy of these documents. To receive a separate copy, or, if you are receiving multiple copies, to request that we only send a single copy of next year’s Notice or proxy statement and annual report, as applicable, you may contact us as follows:
Paymentus Holdings, Inc.
Attention: Investor Relations
11605 North Community House Road, Suite 300
Charlotte, North Carolina 28277
Tel: (888) 440-4826
Street name stockholders may contact their broker, bank or other nominee to request information about householding.
Who should I contact if I have questions?
If you are a holder of our common stock through a brokerage account and you have any questions or need assistance in voting your shares, you should contact the broker or bank where you hold the account.
If you are a registered holder of our common stock and you have any questions or need assistance in voting your shares, please call our Investor Relations department at (888) 440-4826.
As an additional resource, the SEC website has a variety of information about the proxy voting process at www.sec.gov/spotlight/proxymatters.shtml.
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NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS PROXY STATEMENT, AND, IF GIVEN OR MADE, SUCH INFORMATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. UNDER NO CIRCUMSTANCES DOES THE DELIVERY OF THIS PROXY STATEMENT CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN OUR AFFAIRS SINCE THE DATE OF THIS PROXY STATEMENT.
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BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
Composition of the Board
Our board of directors currently consists of seveneight directors, six of whom are independent under the listing standards of the New York Stock Exchange, or the NYSE. Our board of directors is divided into three classes with staggered three-year terms. Thus, at each annual meeting of stockholders, a class of directors will be elected for a three-year term to succeed the class whose term is then expiring.
The following table sets forth the names, ages as of April 6, 2023,11, 2024, and certain other information for each of our directors and director nominees:
Name | Class | Age | Position(s) | Director Since | Current Term Expires | Expiration of Term for Which Nominated | Class | Age | Position(s) | Director Since | Current Term Expires | Expiration of Term for Which Nominated | ||||||||||||||||||||||||||||||||||||
Nominees for Director | ||||||||||||||||||||||||||||||||||||||||||||||||
Jody Davids(1) | II | 67 | Director | 2022 | 2023 | 2026 | ||||||||||||||||||||||||||||||||||||||||||
Adam Malinowski | II | 36 | Director | 2019 | 2023 | 2026 | ||||||||||||||||||||||||||||||||||||||||||
Gary Trainor(1) | II | 70 | Director | 2011 | 2023 | 2026 | ||||||||||||||||||||||||||||||||||||||||||
Dushyant Sharma | III | 55 | Chairman | 2011 | 2024 | 2027 | ||||||||||||||||||||||||||||||||||||||||||
Jason Klein(1) | III | 51 | Director | 2011 | 2024 | 2027 | ||||||||||||||||||||||||||||||||||||||||||
Arun Oberoi | III | 69 | Director | 2023 | 2024 | 2027 | ||||||||||||||||||||||||||||||||||||||||||
Continuing Directors | ||||||||||||||||||||||||||||||||||||||||||||||||
William Ingram | I | 66 | Director | 2021 | 2025 | — | I | 67 | Director | 2021 | 2025 | — | ||||||||||||||||||||||||||||||||||||
Robert Palumbo(2)(3) | I | 57 | Lead Independent Director | 2011 | 2025 | |||||||||||||||||||||||||||||||||||||||||||
Dushyant Sharma | III | 54 | Chairman | 2011 | 2024 | — | ||||||||||||||||||||||||||||||||||||||||||
Jason Klein(3) | III | 50 | Director | 2011 | 2024 | — | ||||||||||||||||||||||||||||||||||||||||||
Robert Palumbo(1)(3) | I | 58 | Lead Independent Director | 2011 | 2025 | — | ||||||||||||||||||||||||||||||||||||||||||
Jody Davids(2) | II | 68 | Director | 2022 | 2026 | — | ||||||||||||||||||||||||||||||||||||||||||
Adam Malinowski | II | 37 | Director | 2019 | 2026 | — | ||||||||||||||||||||||||||||||||||||||||||
Gary Trainor(2) | II | 72 | Director | 2011 | 2026 | — |
(1) | Member of compensation committee |
(2) | Member of audit committee |
Member of nominating and corporate governance committee |
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Nominees for Director—Class III
Dushyant Sharma, our founder, has served as president, chief executive officer and a member of our board of directors since our inception, and has also served as our chairman since December 2013. Before founding Paymentus, Mr. Sharma cofounded Derivion Corporation, a SaaS-based electronic billing company, in 1998. Derivion was acquired in 2001 by Metavante Corporation, a banking and payment technologies provider. Mr. Sharma continued employment with Metavante from May 2001 to November 2004. Mr. Sharma holds a Bachelor of Engineering in Computer Science and Engineering from Marathwada University in India. We believe Mr. Sharma’s extensive background in billing and payment technologies, as well as his experience serving as our chief executive officer, qualify him to serve on our board of directors.
Jason Klein has served as a member of our board of directors since September 2011. Mr. Klein is a Senior Advisor at Accel-KKR, or AKKR, a private equity firm, and Co-CEO of Red Iron Group, an investment firm. He was previously a Managing Director at AKKR and joined the firm during its inaugural fund in May 2005. He has served on the boards of many companies and currently serves on the boards of several of AKKR’s and Red Iron Group’s private portfolio companies. Mr. Klein holds an M.B.A. in Finance and Strategic Management from the Wharton School at the University of Pennsylvania and a B.S. in Finance and Accounting from The Pennsylvania State University. Mr. Klein is a Certified Public Accountant (inactive) and holds the Chartered Financial Analyst designation. We believe Mr. Klein’s experience in the areas of corporate strategy, finance, business transactions and software investments, as well as his extensive experience serving on other boards of directors, qualify him to serve on our board of directors.
Arun Oberoi has served as a member of our board of directors since April 2023. Mr. Oberoi is the former executive vice president, global sales and services, of Red Hat, a provider of enterprise open source software
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solutions, where he served from 2012 to 2021. Prior to Red Hat, Mr. Oberoi was chief executive officer of Viridity Software from 2010 to 2012 and chief executive officer of Aveksa from 2008 to 2010. He served as an executive vice president of global sales and technical services of Micromuse (acquired by IBM in 2006) from 2004 to 2008. Prior to joining Micromuse, Mr. Oberoi held a series of senior executive positions at Hewlett-Packard, including vice president and general manager, worldwide corporate accounts and industries and as vice president and general manager, worldwide software sales and marketing. Mr. Oberoi serves on the board of directors and the audit committee of Schrodinger, Inc., a Nasdaq-listed software company enabling the discovery of therapeutics and materials. He also serves on the boards of Deeplite, an AI optimization software company, and Proofpoint, a cybersecurity software company which is a portfolio company of Thoma Bravo, L.P., as well as serving as a member and chairman of the supervisory board of SUSE S.A., an open source hybrid cloud infrastructure software company and a portfolio company of EQT Partners. Mr. Oberoi received his bachelor’s degree from Delhi University and has an M.B.A. from the Kellogg School of Management at Northwestern University. We believe Mr. Oberoi’s extensive experience serving in corporate senior executive positions of technology and software companies, as well as his board experience with publicly traded and private companies, qualify him to serve on our board of directors.
Continuing Directors—Class I
William Ingram has served as a member of our board of directors since February 2021. Mr. Ingram served from December 2015 to March 2020 as the chief financial officer and treasurer of Avalara, Inc., a provider of software for automated tax compliance that was listed on the NYSE. Prior to joining Avalara, Mr. Ingram served as interim chief financial officer of Khan Academy, a provider of online learning resources, from April 2015 to December 2015. Mr. Ingram also held various executive roles at Leap Wireless International, Inc., the parent company of Cricket Wireless, a wireless telecommunications provider, including executive vice president and chief of strategy, from August 2007 to March 2014, and with the acquiring company, AT&T, from March 2014 to January 2015. Mr. Ingram currently serves on the board of directors and as chair of the audit committee and member of the human capital and compensation committee of CCC Intelligent Solutions Holdings Inc., a Nasdaq-listed provider of technologies and applications for the property and casualty insurance industry. He served on the board of directors of Avalara from January 2020 until its acquisition in October 2022. Mr. Ingram holds a B.A. in Economics from Stanford University and an M.B.A. from Harvard Business School. We believe Mr. Ingram’s experience in the areas of corporate strategy, finance and business transactions, as well as his experience working with other public technology and software companies, qualify him to serve on our board of directors.
Robert Palumbo has served as a member of our board of directors since September 2011 and as our lead independent director since May 2021. Mr. Palumbo has served as managing director and founding partner of AKKR since November 2004, and currently serves on the boards of several of AKKR’s private portfolio companies. Mr. Palumbo holds an A.B. from Princeton University. We believe Mr. Palumbo’s experience in the areas of corporate strategy, finance, investment banking, business transactions and software investments, as well as his experience working with other technology and software companies, qualify him to serve on our board of directors.
Continuing Directors—Class II
Jody Davids has served as a member of our board of directors since April 2022. Ms. Davids currently serves as a director of Premier, Inc., a Nasdaq-listed, technology-driven healthcare improvement company, and as a member of its audit and compliance committee and its nominating and governance committee. She previously served as senior vice president and global chief information officer of PepsiCo, Inc., a NYSE-listed company that has a global portfolio of food and beverage brands, from April 2016 to October 2019. Prior to that role, she served as chief information officer of Agrium, Inc., a NYSE-listed and Toronto Stock Exchange-listed company that is a global producer and marketer of nutrients for agricultural and industrial markets, from April 2014 to April 2016. Ms. Davids served in various executive and consulting roles with Agrium, Best Buy, Inc., a NYSE-listed company, and Cardinal Health, Inc., a NYSE-listed
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company, from 2000 to 2014. She serves as a director and member of the audit, technology and markets committees of Midcontinent Independent System Operator (MISO) and as a board member of Movista, Inc. Ms. Davids holds a B.A. in Human Resources Management and Business and an M.B.A. from San Jose State University. We believe that Ms. Davids’ strong background in information technology and cybersecurity risk management and her leadership experience serving in corporate senior executive positions of other publicly traded companies, qualify her to serve on our board of directors.
Adam Malinowski has served as a member of our board of directors since April 2019. Mr. Malinowski has served as an investment professional at AKKR since August 2010, and currently serves on the boards of several of AKKR’s private portfolio companies. Mr. Malinowski holds a B.S. in Business Administration and a B.A. in Economics from the University of California, Berkeley. We believe Mr. Malinowski’s experience in the areas of corporate strategy, finance, business transactions and software investments qualifies him to serve on our board of directors.
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Gary Trainor has served as a member of our board of directors since September 2011, and served as our executive chairman from September 2011 to September 2013. Mr. Trainor has served as executive chairman of PeopleGuru, an HCM software and services company, since April 2022, EasyWorkforce, a workforce management software company, since September 2020, Mindmarker Corporation, a learning software platform company, since August 2020, and Flores & Associates, a national benefits administrator, since April 2020, as well as chief executive officer of CFH Strategic Investment I, LLC, a family office, since March 2018. Mr. Trainor previously served as chief executive officer of Viventium Software from December 2014 to March 2018 and Infinisource (now iSolved Benefit Services) from September 2011 to January 2014, both SaaS-based human capital management software providers. Earlier in his career, Mr. Trainor served as division president at First Data and ADP. Mr. Trainor holds an M.B.A. from Fairleigh Dickinson University and a B.A. in Business Administration from Rutgers University. We believe Mr. Trainor’s extensive industry and management experience, including at other SaaS companies, qualifies him to serve on our board of directors.
Continuing Directors—Class I
William Ingram has served as a member of our board of directors since February 2021. Mr. Ingram served from December 2015 to March 2020 as the chief financial officer and treasurer of Avalara, Inc., a provider of software for automated tax compliance that was listed on the NYSE. Prior to joining Avalara, Mr. Ingram served as interim chief financial officer of Khan Academy, a provider of online learning resources, from April 2015 to December 2015. Mr. Ingram also held various executive roles at Leap Wireless International, Inc., the parent company of Cricket Wireless, a wireless telecommunications provider, including executive vice president and chief of strategy, from August 2007 to March 2014, and with the acquiring company, AT&T, from March 2014 to January 2015. Mr. Ingram currently serves on the board of directors and as chair of the audit committee and member of the human capital and compensation committee of CCC Intelligent Solutions Holdings Inc., a provider of technologies and applications for the property and casualty insurance industry that is listed on Nasdaq. He served on the board of directors of Avalara from January 2020 until its acquisition in October 2022. Mr. Ingram holds a B.A. in Economics from Stanford University and an M.B.A. from Harvard Business School. We believe Mr. Ingram’s experience in the areas of corporate strategy, finance and business transactions, as well as his experience working with other public technology and software companies, qualify him to serve on our board of directors.
Robert Palumbo has served as a member of our board of directors since September 2011. Mr. Palumbo has served as managing director and founding partner of Accel-KKR, or AKKR, since November 2004, and currently serves on the boards of several of AKKR’s private portfolio companies. Mr. Palumbo holds an A.B. from Princeton University. We believe Mr. Palumbo’s experience in the areas of corporate strategy, finance, investment banking, business transactions and software investments, as well as his experience working with other technology and software companies, qualify him to serve on our board of directors.
Continuing Directors—Class III
Dushyant Sharma, our founder, has served as president, chief executive officer and a member of our board of directors since our inception, and has also served as our chairman since December 2013. Before founding Paymentus, Mr. Sharma cofounded Derivion Corporation, a SaaS-based electronic billing company, in 1998. Derivion was acquired in 2001 by Metavante Corporation, a banking and payment technologies provider. Mr. Sharma continued employment with Metavante from May 2001 to November 2004. Mr. Sharma holds a Bachelor of Engineering in Computer Science and Engineering from Marathwada University in India.
Jason Klein has served as a member of our board of directors since September 2011. Mr. Klein is a Senior Advisor at AKKR. He was previously a Managing Director at AKKR and joined the firm during its inaugural fund in May 2005. He has served on the boards of many companies and currently serves on the boards of several of AKKR’s private portfolio companies. Mr. Klein holds an M.B.A. in Finance and Strategic Management from the Wharton School at the University of Pennsylvania and a B.S. in Finance and Accounting from The
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Pennsylvania State University. Mr. Klein is a Certified Public Accountant (inactive) and holds the Chartered Financial Analyst designation. We believe Mr. Klein’s experience in the areas of corporate strategy, finance, business transactions and software investments, as well as his extensive experience serving on other boards of directors, qualify him to serve on our board of directors.
Controlled Company
Under the NYSE’s corporate governance rules, a listed company of which more than 50% of the voting power for the election of directors is held by an individual, a group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements of the NYSE, including the NYSE’s requirements to have a majority of independent directors on the board, an independent compensation committee and an independent nominating/corporate governance committee. AKKR controls a majority of the voting power represented by our capital stock. As a result, we are a “controlled company” within the meaning of the corporate governance rules of the NYSE and are permitted not to comply with the NYSE’s corporate governance requirements described above. Even though we are not required to comply with these corporate governance requirements, we currently have chosen to do so. However, in the event we elect to rely on certain of the exemptions provided to controlled companies in the future, you may not have the same protections afforded to stockholders of companies that are subject to all of these corporate governance requirements. If we cease to be a “controlled company” and our shares continue to be listed on the New York Stock Exchange, we will be required to comply with these corporate governance provisions within the applicable transition periods.
Director Independence
Our Class A common stock is listed on the NYSE. For as long as we remain a controlled company, we are not required under NYSE listing rules to maintain a board comprised of a majority of independent directors as determined affirmatively by our board; however, we have chosen to do so. Under NYSE listing rules, a director will only qualify as an independent director if that listed company’s board of directors affirmatively determines that the director has no material relationship with such listed company (either directly or as a partner, stockholder or officer of an organization that has a relationship with such listed company). In addition, the NYSE listing rules require that, subject to specified exceptions, each member of our audit, compensation and nominating and corporate governance committees be independent.
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Audit committee members must also satisfy the additional independence criteria set forth in Rule 10A-3 under the Securities Exchange Act of 1934, as amended, or the Exchange Act, and NYSE listing rules applicable to audit committee members. Compensation committee members must also satisfy the additional independence criteria set forth in Rule 10C-1 under the Exchange Act and NYSE listing rules applicable to compensation committee members.
Our board of directors has undertaken a review of the independence of each of our directors. Based on information provided by each director concerning his or her background, employment and affiliations, our board of directors has determined that Ms. Davids and Messrs. Ingram, Klein, Malinowski, Palumbo and Trainor, representing six of our seveneight directors, do not have any material relationship with us (either directly or as a partner, stockholder or officer of an organization that has a relationship with us) and that each of these directors is an “independent director” as defined under the listing standards of the NYSE. Dushyant Sharma is not considered an independent director because of his position as our president and chief executive officer.officer, and Arun Oberoi is not considered an independent director due to his prior consulting relationship with us, which was terminated in April 2023.
In making these determinations, our board of directors considered the current and prior relationships that each independent director has with our company and all other facts and circumstances that our board of directors deemed relevant in determining their independence, including the beneficial ownership of our capital stock by each independent director, and the transactions involving them described in the section titled “Related Person Transactions.” In determining that Mr. Palumbo is independent, our board of directors considered his role as a director of another portfolio company of AKKR and the fact that we have entered into agreements with such other AKKR portfolio company deemed immaterial at this time to each of our company, AKKR and Mr. Palumbo.
There are no family relationships among any of our directors or executive officers.
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Board Leadership Structure and Role of Lead Independent Director
Our business and affairs are managed under the direction of our board of directors. We are party to a stockholders agreement with AKKR and Mr. Sharma, Ashigrace LLC, or Ashigrace, which is an entity under the control of Mr. Sharma, and certain trusts affiliated with Mr. Sharma, which we collectively refer to as the Sharma parties. The stockholders agreement contemplates that our board of directors may have up to nine members and provides that, for so long as AKKR or certain of its permitted transferees holds more of our outstanding common stock than the Sharma parties, AKKR will have the right to nominate (a) five directors to our board of directors for so long as AKKR beneficially owns at least 10% of our outstanding common stock and (b) two directors to our board of directors for so long as AKKR beneficially owns at least 5% but less than 10% of our outstanding common stock. Moreover, after such time as AKKR ceases to hold more of our outstanding common stock than the Sharma parties, AKKR will continue to have the right to nominate two directors to our board of directors until such time as AKKR ceases to beneficially own at least 5% of our outstanding common stock. In addition, for so long as the Sharma parties own at least 5% of our outstanding common stock or Mr. Sharma serves as our chief executive officer, the Sharma parties will have the right to nominate Mr. Sharma to our board of directors. Messrs. Klein, Malinowski and Palumbo were nominated to our board of directors by AKKR, and Mr. Sharma was nominated by the Sharma parties pursuant to the stockholders agreement.
Mr. Sharma currently serves as both our chairman and as our chief executive officer. Our board of directors has adopted corporate governance guidelines that provide that one of our independent directors will serve as our lead independent director at any time when our board of directors does not have an independent chairperson. Because Mr. Sharma is our chairman and also our chief executive officer, our board of directors has appointed Mr. Palumbo to serve as our lead independent director. As lead independent director, Mr. Palumbo presides over periodic meetings of our independent directors, serves as a liaison between Mr. Sharma and our independent directors and performs such additional duties as our board of directors may otherwise determine or delegate.
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As a result of the board of directors’ committee system and the existence of a majority of independent directors, the board of directors maintains effective oversight of our business operations, including independent oversight of our financial statements, executive compensation, selection of director candidates and corporate governance programs. We believe that the leadership structure of our board of directors, including Mr. Palumbo’s role as lead independent director, as well as the independent committees of our board of directors, is appropriate and enhances our board of directors’ ability to effectively carry out its roles and responsibilities on behalf of our stockholders, while Mr. Sharma’s combined role enables strong leadership, creates clear accountability and enhances our ability to communicate our message and strategy clearly and consistently to stockholders.
Role of Board in Risk Oversight Process
Risk is inherent with every business, and we face a number of risks, including strategic, financial, business and operational, legal and compliance and reputational. We have designed and implemented processes to manage risk in our operations. Management, including our executive team, chief information security officer, or CISO, chief compliance officer and legal department, is responsible for the day-to-day management of risks the company faces, while our board of directors, as a whole and assisted by its committees, has responsibility for the oversight of risk management. Our board reviews strategic and operational risk in the context of discussions, question and answer sessions, and reports from the management team at each regular board meeting, receives reports on all significant committee activities at each regular board meeting, and evaluates the risks inherent in significant transactions.
In addition, our board has tasked designated standing committees with oversight of certain categories of risk management. Our audit committee assists our board in fulfilling its oversight responsibilities with respect to risk management in the areas of internal control over financial reporting and disclosure controls and procedures, legal and regulatory compliance and conflicts of interest, and also, among other things, discusses with management and the independent
auditor guidelines and policies with respect to risk assessment and risk management. In addition, our audit committee is designated to oversee risks related to information technology and cybersecurity matters and to regularly communicate with our CISO.CISO regarding such matters. Our compensation committee, with the assistance of its outside advisor Compensia, Inc., or Compensia, assesses risks relating to our executive compensation plans and arrangements, and whether our compensation policies and programs have the potential to encourage excessive risk taking. Our nominating and corporate governance committee assesses risks relating to our corporate governance practices, the independence of the board and potential conflicts of interest.our environmental, social and governance (ESG) strategy, policies, commitments and initiatives.
Our board of directors believes its current leadership structure supports the risk oversight function of the board.
Board Committees
Our board of directors has established the following standing committees of the board: audit committee, compensation committee and nominating and corporate governance committee. The composition and responsibilities of each of the committees of our board of directors is described below.
Audit Committee
The current members of our audit committee are Ms. Davids and Messrs. Ingram and Trainor. Mr. Ingram is the chairperson of our audit committee. Our board of directors has determined that each member of the audit committee meets the requirements for independence of audit committee members under the rules and regulations of the SEC and the listing standards of the NYSE, and that each member of our audit committee meets the financial literacy requirements of the listing standards of the NYSE.
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Our board of directors has determined that each of Messrs. Ingram and Trainor is an audit committee financial expert within the meaning of Item 407(d) of Regulation S-K. Our audit committee is responsible for, among other things:
selecting, retaining, compensating, evaluating, overseeing and, where appropriate, terminating our independent registered public accounting firm;
reviewing and approving the scope and plans for the audits and the audit fees and approving all non-audit and tax services to be performed by the independent auditor;
evaluating the independence and qualifications of our independent registered public accounting firm;
reviewing our financial statements, and discussing with management and our independent registered public accounting firm the results of the annual audit and the quarterly reviews;
reviewing and discussing with management and our independent registered public accounting firm the quality and adequacy of our internal controls and our disclosure controls and procedures;
discussing with management our procedures regarding the presentation of our financial information, and reviewing earnings press releases and guidance;
overseeing the design, implementation and performance of our internal audit function, if any;
setting hiring policies with regard to the hiring of employees and former employees of our independent auditor and overseeing compliance with such policies;
reviewing, approving and monitoring related party transactions as specified in our related person transactions policy;
reviewing and monitoring compliance with our code of business conduct and ethics, or the Code of Ethics, and reviewing conflicts of interest of our board members and officers;
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adopting and overseeing procedures to address complaints regarding accounting, internal accounting controls and auditing matters, including confidential, anonymous submissions by our employees of concerns regarding questionable accounting or auditing matters;
reviewing and discussing with management and our independent auditor the adequacy and effectiveness of our legal, regulatory and ethical compliance programs;
overseeing risks related to information technology and cybersecurity matters and regularly communicating with our CISO; and
reviewing and discussing with management and our independent auditor our guidelines and policies to identify, monitor and address enterprise risks.
Our audit committee operates under a written charter that satisfies the applicable rules and regulations of the SEC and the listing standards of the NYSE. A copy of the charter of our audit committee is available on our website at https://ir.paymentus.com/governance/governance-documents. During 2022,2023, our audit committee held sixnine meetings.
Compensation Committee
The current members of our compensation committee are Messrs. Palumbo and Klein. Mr. Palumbo is the chairperson of our compensation committee. Our board of directors has determined that each member of our compensation committee meets the requirements for independence for compensation committee members under the rules and regulations of the SEC and the listing standards of the NYSE. Our compensation committee is responsible for, among other things:
reviewing and approving the compensation for our executive officers, including our chief executive officer;
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reviewing, approving and administering our employee benefit and equity incentive plans;
establishing and reviewing the compensation plans and programs of our employees, and ensuring that they are consistent with our general compensation strategy;
reviewing, approving and monitoring ordinary course compensation of any immediate family member of a related person that would constitute a related person transaction as specified in our related person transactions policy;
approving, the creation or revision ofadministering and monitoring compliance with any clawback policy; and
determining non-employee director compensation.
Our compensation committee operates under a written charter that satisfies the applicable rules and regulations of the SEC and the listing standards of the NYSE. A copy of the charter of our compensation committee is available on our website at https://ir.paymentus.com/governance/governance-documents. During 2022,2023, our compensation committee held fiveeight meetings.
Nominating and Corporate Governance Committee
The current members of our nominating and corporate governance committee are Messrs. Palumbo and Ingram. Mr. Palumbo is the chairperson of our nominating and corporate governance committee. Our board of directors has determined that each member of our nominating and corporate governance committee meets the requirements for independence for nominating and corporate governance committee members under the listing standards of the NYSE. Our nominating and corporate governance committee is responsible for, among other things:
reviewing and assessing, and making recommendations to our board of directors regarding, desired qualifications, expertise and characteristics sought of board members;
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identifying, evaluating, selecting or making recommendations to our board of directors regarding nominees for election to our board of directors, subject to the director nomination rights in our stockholders agreement described in the section titled “—Board Leadership Structure and Role of Lead Independent Director;”
developing policies and procedures for considering stockholder nominees for election to our board of directors;
reviewing our succession planning process for our chief executive officer and any other members of our executive management team;
reviewing and making recommendations to our board of directors regarding the composition, organization and governance our board of directors and its committees;
overseeing and monitoring our strategy, policies, commitments and initiatives with respect to ESG matters;
reviewing and making recommendations to our board of directors regarding our corporate governance guidelines and corporate governance framework;
overseeing director orientation for new directors and continuing education for our directors;
overseeing the evaluation of the performance of our board of directors and its committees, including through periodic self-evaluations of our board of directors and its committees; and
administering policies and procedures for communications with the non-management members of our board of directors.
Our nominating and corporate governance committee operates under a written charter that satisfies the applicable listing standards of the NYSE. A copy of the charter of our nominating and corporate governance
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committee is available on our website at https://ir.paymentus.com/governance/governance-documents. During 2022,2023, our nominating and corporate governance committee held one meeting.
Attendance at Board and Stockholder Meetings
During 2022,2023, our board of directors held four meetings, and each director attended at least 75% of the aggregate of (1) the total number of meetings of the board of directors held during the period for which he or she has been a director and (2) the total number of meetings held by all committees on which he or she served during the periods that he or she served.
Although we do not have a formal policy regarding attendance by members of our board of directors at the annual meetings of stockholders, we encourage, but do not require, directors to attend. SixAll of our directors attended our 20222023 annual meeting.
Executive Sessions of Independent Directors
To encourage and enhance communication among independent directors, and as required under applicable NYSE rules, our corporate governance guidelines provide that the independent directors will meet in executive sessions without management directors or management present on a regular basis.periodic basis, no less often than once per year. These executive sessions are chaired by Mr. Palumbo, our lead independent director.
Compensation Committee Interlocks and Insider Participation
During 2022,2023, the members of our compensation committee were Messrs. Klein and Palumbo. None of the members of our compensation committee is or has been an officer or employee of our company. None of our executive officers currently serves, or in the past fiscal year has served, as a member of the board of directors or compensation committee (or other board committee performing equivalent functions) of any entity that has one or more executive officers serving on our board of directors or compensation committee.
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Considerations in Evaluating Director Nominees
Our nominating and corporate governance committee uses a variety of methods for identifying and evaluating potential director nominees, subject to the director nomination rights in our stockholders agreement. In its evaluation of director candidates, including the current directors eligible for re-election, our nominating and corporate governance committee will consider the current size and composition of our board of directors, the needs of our board of directors and the respective committees of our board of directors, the qualifications and characteristics set forth in the stockholders agreement and other director qualifications. While our board has not established minimum qualifications for board members, some of the factors that our nominating and corporate governance committee considers in assessing director nominee qualifications include, without limitation, issues of character, professional ethics and integrity, judgment, business experience and diversity, and with respect to diversity, such factors as race, ethnicity, gender, differences in professional background, age and geography, as well as other individual qualities and attributes that contribute to the total mix of viewpoints and experience represented on our board. Although our board of directors does not maintain a specific policy with respect to board diversity, our board of directors believes that the board should be a diverse body, and the nominating and corporate governance committee considers a broad range of perspectives, backgrounds and experiences.
If our nominating and corporate governance committee determines that an additional or replacement director is required, then the committee may take such measures as it considers appropriate in connection with its evaluation of a director candidate, including candidate interviews, inquiry of the person or persons making the recommendation or nomination, engagement of an outside search firm to gather additional information, or reliance on the knowledge of the members of the committee, board or management.
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After completing its review and evaluation of director candidates, our nominating and corporate governance committee recommends to our full board of directors the director nominees for selection. Our nominating and corporate governance committee has discretion to decide which individuals to recommend for nomination as directors, and our board of directors has the final authority in determining the selection of director candidates for nomination to our board.
Stockholder Recommendations and Nominations to our Board of Directors
Our nominating and corporate governance committee will consider recommendations and nominations for candidates to our board of directors from stockholders in the same manner as candidates recommended to the committee from other sources, so long as such recommendations and nominations comply with our Amended and Restated Certificate of Incorporation, Amended and Restated Bylaws, stockholders agreement, all applicable company policies and all applicable laws, rules and regulations, including those promulgated by the SEC. Our nominating and corporate governance committee will evaluate such recommendations in accordance with its charter, our bylaws and corporate governance guidelines and the director nominee criteria described above.
Under our corporate governance guidelines, a stockholder that wants to recommend a candidate to our board of directors should direct the recommendation in writing by letter to our corporate secretary at Paymentus Holdings, Inc., 11605 North Community House Road, Suite 300, Charlotte, North Carolina 28277, Attention: Corporate Secretary. Such recommendation must include the candidate’s name, age, home and business contact information, detailed biographical data, relevant qualifications, a signed letter from the candidate confirming willingness to serve and to be named in our proxy statement, information regarding any relationships between the candidate and us and evidence of the recommending stockholder’s ownership of our capital stock. Such recommendation must also include a statement from the recommending stockholder in support of the candidate. Stockholder recommendations must be received by December 31st of the year prior to the year in which the recommended candidate(s) will be considered for nomination. Our nominating and corporate governance committee has discretion to decide which individuals to recommend for nomination as directors.
Under our Amended and Restated Bylaws, stockholders may also directly nominate persons for our board of directors. Any nomination must comply with the requirements set forth in our Amended and Restated Bylaws
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and the rules and regulations of the SEC and should be sent in writing to our corporate secretary at the address above. To be timely for our 20242025 annual meeting of stockholders, nominations must be received by our corporate secretary in compliance with the deadlines discussed below under “Other Matters—Stockholder Proposals or Director Nominations for 20242025 Annual Meeting.”
Communications with the Board of Directors
Stockholders and other interested parties wishing to communicate directly with our lead independent director or our non-management directors as a group may do so by writing and sending the correspondence to our general counsel, chief financial officer or legal department by mail to our principal executive offices at Paymentus Holdings, Inc., 11605 North Community House Road, Suite 300, Charlotte, North Carolina 28277. Our general counsel, chief financial officer or legal department, in consultation with appropriate directors as necessary, will review all incoming communications and screen for communications that (1) are solicitations for products and services, (2) relate to matters of a personal nature not relevant for our stockholders to act on or for our board to consider or (3) are of a type that are improper or irrelevant to the functioning of our board or our business, for example, mass mailings, job inquiries and business solicitations. If appropriate, our general counsel, chief financial officer or legal department will route such communications to the appropriate director(s) or, if none is specified, then to the chairperson of the board or the lead independent director. These policies and procedures do not apply to communications to non-management directors from our officers or directors who are stockholders or to stockholder proposals submitted pursuant to Rule 14a-8 under the Exchange Act.
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Insider Trading Policy
We have adopted an insider trading policy governing the purchase, sale and other transfers of our common stock by our directors, officers and employees that we believe is reasonably designed to promote compliance with insider trading laws, rules and regulations and the NYSE listing standards. Our insider trading policy also sets forth detailed requirements regarding the adoption of trading plans under Exchange Act Rule 10b5-1. The full text of our insider trading policy is available on our website at https://ir.paymentus.com/governance/governance-documents and as an exhibit to our Annual Report on Form 10-K for the year ended December 31, 20222023 filed with the SEC on March 3,5, 2024.
Compensation Clawback Policy
In October 2023, our board of directors adopted a new Policy for the Recovery of Erroneously Awarded Compensation, or the Clawback Policy. The Clawback Policy requires us to claw back erroneously awarded incentive compensation received by covered employees (current and former executive officers) during the three fiscal years that precede the date we are required to prepare an accounting restatement due to material noncompliance with a financial reporting requirement. We did not have an accounting restatement in the year ended December 31, 2023. A copy of the Clawback Policy is included as an exhibit to our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on March 5, 2024.
Policy Prohibiting Hedging or Pledging of Securities
Under our insider trading policy, our employees, including our executive officers, and the members of our board of directors are prohibited from, directly or indirectly, among other things, (1) engaging in short sales, (2) trading in publicly-traded options, such as puts and calls, and other derivative securities with respect to our securities (other than stock options, restricted stock units and other compensatory awards issued to such individuals by us), (3) purchasing financial instruments (including prepaid variable forward contracts, equity swaps, collars and exchange funds), or otherwise engaging in transactions that hedge or offset, or are designed to hedge or offset, any decrease in the market value of equity securities granted to them by us as part of their compensation or held, directly or indirectly, by them, (4) pledging any of our securities as collateral for any loans and (5) holding our securities in a margin account.
Corporate Governance Guidelines and Code of Business Conduct and Ethics
Our board of directors has adopted corporate governance guidelines. These guidelines address, among other items, the qualifications and responsibilities of our directors and director candidates, the structure and composition of our board of directors and corporate governance policies and standards applicable to us in general. In addition, our board of directors has adopted the Code of Ethics that applies to all of our employees, officers and directors, including our chief executive officer, chief financial officer and other executive and senior financial officers. The full text of our corporate governance guidelines and the Code of Ethics are available on
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our website at https://ir.paymentus.com/governance/governance-documents. We will post amendments to the Code of Ethics or any waivers of the Code of Ethics for directors and executive officers on the same website.
Director Compensation
The compensation paid to Mr. Sharma in 20222023 in respect of his employment is included under “Summary Compensation Table for Fiscal 2022”2023” in the section titled “Executive Compensation.” No compensation was paid or provided to Messrs. Klein, Malinowski, Palumbo and Trainor in 2022.2023.
In February 2021, our compensation committee retained Compensia, Inc., or Compensia, an independent third-party compensation consultant, to provide our board of directors and its compensation committee with an analysis of publicly available market data and assistance in determining compensation to be provided to our non-employee
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directors following our initial public offering. Based on the discussions with and assistance from Compensia, in connection with our initial public offering in May 2021, we adopted an outside director compensation policy for our non-employee directors. Our board of directors or any committee of our board of directors that has been designated appropriate authority to administer our outside director compensation policy may amend, alter, suspend or terminate such policy at any time and for any reason. The Board,
Our board, upon the recommendation of the compensation committee, approved and adopted a revised outside director compensation policy, effective February 13, 2023. Except as set forth below, no material changes were made to theThe revised outside director compensation policy.policy added a provision for cash compensation for service on short term, ad hoc board committees, and removed the initial award of restricted stock units for new non-employee directors.
Cash Compensation
TheOur outside director compensation policy provides for the following cash compensation program for our non-employee directors:
$30,000 per year for service as a non-employee director;
$15,000 per year for service as lead independent director;
$20,000 per year for service as chairperson of the audit committee;
$10,000 per year for service as a member of the audit committee;
$12,000 per year for service as chairperson of the compensation committee;
$6,000 per year for service as a member of the compensation committee;
$8,000 per year for service as chairperson of the nominating and corporate governance committee; and
$4,000 per year for service as a member of the nominating and corporate governance committee.
Under the revised outside director compensation policy, inIn the event that a short-term or ad-hocad hoc committee is formed by the Board,board, the committee chairperson shall be paid a quarterly retainer of $2,000 and each other committee member shall be paid a quarterly retainer of $1,000, payable in each case at the end of each fiscal quarter during which the ad hoc committee existed.
Each non-employee director who serves as a committee chair receives the cash retainer fee as the chair of the committee but not the cash retainer fee as a member of that committee. The non-employee director who serves as the lead independent director receives the cash retainer fee for services provided in such role as well as the cash retainer fee as a non-employee director. These fees to our non-employee directors are paid quarterly in arrears on a prorated basis. However, our outside director compensation policy provides that any non-employee director who served as a director at any time prior to December 31, 2020 will not be eligible to receive the cash retainer fees described above. Accordingly, Messrs. Klein, Malinowski, Palumbo and Trainor have not been paid any cash retainer fees under our outside director compensation policy for service on our board of directors.
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Under our outside director compensation policy, we will reimburse our non-employee directors for reasonable travel expenses to attend meetings of our board of directors and its committees.
Equity Compensation
Initial Award
Pursuant to our previous outside director compensation policy, each person who first became a non-employee director after the effective date of such policy in May 2021 was entitled to receive, on the first trading day on or after the date that the person first became a non-employee director, an initial award, or the Initial Award, of restricted stock units covering shares of our Class A common stock with a value of $340,000. Such value was equivalent to the fair market value of the shares subject to such Initial Award on its grant date (provided that any resulting fractional shares were rounded down to the nearest whole share). The Initial Award was scheduled to vest as to one-third of the shares subject to the Initial Award on each of the one-, two- and three-year anniversaries of its grant date, in each case subject to continued services with us through the applicable vesting date. The revised outside director compensation policy that became effective in February 2023 eliminated the grant of any additional Initial Awards, and such grants are no longer made.
Annual Award
Pursuant to our previous outside director compensation policy, on the first trading day immediately following our annual meeting of our stockholders, each non-employee director automatically was granted an award of restricted stock units covering shares of our Class A common stock with a value of $170,000, or the Annual Award. If such director joined our board of directors after the date of the annual meeting that occurred immediately prior to such annual meeting, then the Annual Award granted to such director was prorated based on the number of whole months that the individual served as an director prior to such Annual Award’s grant date during the 12-month period immediately preceding such annual meeting (with any resulting fractional share rounded down to the nearest whole share).
Under our revised outside director compensation policy that became effective in February 2023, each non-employee director automatically will receive an annual award, or the Annual Award, of restricted stock units covering shares of our Class A common stock with a value of $170,000 on the earlier of June 15 or the first trading day immediately after the date of each annual meeting of our stockholders. A non-employee director joining the Boardboard after the date of grant of the most recent Annual Award is entitled to a prorated grant on the date such individual becomes a director with a value of $170,000 multiplied by the number of days of service expected prior to the next Annual Award (assuming the
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next Annual Award date will be the anniversary date of the most recent Annual Award) divided by 365. The value of the Annual Award is equivalent to the fair market value of the shares subject to such Annual Award on its grant date (provided that any resulting fractional shares will be rounded down to the nearest whole share).
Each Annual Award is scheduled to vest as to all of the shares subject to the Annual Award on the one-year anniversary of its grant date, subject to continued service with us through the applicable vesting date.
Notwithstanding the above terms, our outside director compensation policy provides that any non-employee director who served as a director at any time prior to December 31, 2020 is not eligible to receive any equity awards under our outside director compensation policy, including Annual Awards. Accordingly, Messrs. Klein, Malinowski, Palumbo and Trainor have not been granted equity awards pursuant to our outside director compensation policy for service on our board of directors.
Change in Control
In the event of our change in control, as defined in our 2021 Equity Incentive Plan, or the 2021 Plan, each non-employee director’s then outstanding equity awards covering shares of our common stock granted to him or
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her while a non-employee director will accelerate vesting in full, provided that he or she remains a non-employee director through the date of our change in control.
Other Award Terms
The Initial Awards and Annual Awards have been granted under and are subject to the terms and conditions of the 2021 Plan (or its successor plan, as applicable) and form of award agreement under such plan.
Director Compensation Limits
Our previous outside director compensation policy providedprovides that in any fiscal year, a non-employee director may be paid cash compensation and granted equity awards with an aggregate value of no more than $550,000 (with the value of equity awards based on the grant date fair value determined in accordance with U.S. Generally Accepted Accounting Principles, or GAAP, for purposes of this limit), with such limit increased to $750,000 for the first fiscal year of his or her service as a non-employee director. Under the revised outside director compensation policy, the $550,000 annual limit was retained, but the increased limit of $750,000 for the first fiscal year of the non-employee director’s service has been removed.. Equity awards granted or other compensation provided to a non-employee director for his or her services as an employee or consultant (other than a non-employee director) do not count toward this annual limit. This maximum limit provision does not reflect the intended size of any potential grants or a commitment to make grants to our non-employee directors in the future.
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Director Compensation for Fiscal 20222023
The following table sets forth information regarding the total compensation awarded to, earned by or paid to our non-employee directors for their service on our board of directors for the fiscal year ended December 31, 2022.2023. Directors who are also our employees receive no additional compensation for their service as directors. During 2022,2023, Mr. Sharma was an employee and executive officer of the company and therefore did not receive compensation as a director. See the section titled “Executive Compensation” for additional information regarding Mr. Sharma’s compensation.
Name | Fees Earned or Paid in Cash ($) | Stock Awards ($) | Total ($) | |||||||||
Jody Davids(1)(3) | 28,111 | 354,151 | 373,262 | |||||||||
William Ingram(2)(3) | 56,350 | 169,994 | 226,334 | |||||||||
Jason Klein(4) | — | — | — | |||||||||
Adam Malinowski(4) | — | — | — | |||||||||
Robert Palumbo(4) | — | — | — | |||||||||
Gary Trainor(4) | — | — | — |
Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(6) | Total ($) | |||||||||
William Ingram(1)(4) | 54,000 | 169,991 | 223,991 | |||||||||
Jody Davids(2)(4) | 40,000 | 169,991 | 209,991 | |||||||||
Arun Oberoi(3)(4) | 20,333 | 188,616 | 208,949 | |||||||||
Jason Klein(5) | — | — | — | |||||||||
Adam Malinowski(5) | — | — | — | |||||||||
Robert Palumbo(5) | — | — | — | |||||||||
Gary Trainor(5) | — | — | — |
(1) |
|
The amount reported in the “Fees Earned or Paid in Cash” column for Mr. Ingram represents a $30,000 retainer for board service and a $24,000 retainer for committee service. |
(2) | The amount |
(3) | Mr. Oberoi was appointed to our board of directors in April 2023. The amount reported in the “Fees Earned or Paid in Cash” column represents a $20,333 retainer for board service, which reflects a prorated amount for his partial year of service on the board of directors in 2023. |
(4) | Under our outside director compensation policy, |
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Messrs. Klein, Malinowski, Palumbo and Trainor did not receive director compensation in |
(6) | We provide information regarding the assumptions used to calculate the value of all restricted stock units granted to our directors in Note 11—Stock-Based Compensation to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023. |
The following table lists all outstanding equity awards held by non-employee directors as of December 31, 2022:2023:
Name | Number of Shares Underlying Outstanding Options | Number of Outstanding Restricted Stock Units | Number of Shares Underlying Outstanding Options | Number of Outstanding Restricted Stock Units | ||||||||||||
Jody Davids | — | 19,408 | — | 29,994 | ||||||||||||
William Ingram | 26,195 | 11,409 | 26,195 | 17,689 | ||||||||||||
Arun Oberoi | — | 19,977 |
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ELECTION OF CLASS IIIII DIRECTORS
Our board of directors currently consists of seveneight directors and is divided into three classes with staggered three-year terms. At the annual meeting, three Class IIIII directors will be elected for a three-year term to succeed the same class whose term is then expiring. Each director’s term continues until the expiration of the term for which such director was elected and until such director’s successor is elected and qualified or until such director’s earlier death, resignation or removal.
Nominees
Our nominating and corporate governance committee has recommended, and our board of directors has approved, Jody Davids, Adam MalinowskiDushyant Sharma, Jason Klein and Gary TrainorArun Oberoi as nominees for election as Class IIIII directors at the annual meeting. If elected, each of Ms. DavidsMessrs. Sharma, Klein and Messrs. Malinowski and TrainorOberoi will serve as a Class IIIII director until the 20262027 annual meeting of stockholders and until his or her respective successor is elected and qualified or until his or her earlier death, resignation or removal. For more information concerning the nominees, please see the section titled “Board of Directors and Corporate Governance.”
Ms. DavidsMessrs. Sharma, Klein and Messrs. Malinowski and TrainorOberoi have agreed to serve as directors if elected, and management has no reason to believe that they will be unavailable to serve. In the event a nominee is unable or declines to serve as a director at the time of the annual meeting, proxies will be voted for any nominee designated by the present board of directors to fill the vacancy.
Vote Required
Each director is elected by a plurality of the voting power of the shares present virtually or represented by proxy at the meeting and entitled to vote on the election of directors.votes cast. Because the outcome of this proposal will be determined by a plurality vote, any shares not voted FOR a particular nominee, whether as a result of choosing to WITHHOLD authority to vote or a broker non-vote, will have no effect on the outcome of the election.
Board Recommendation
OUR BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR ALL” OF THE DIRECTOR NOMINEES NAMED ABOVE.
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RATIFICATION OF APPOINTMENT OFJody Davids
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Our audit committee has appointed PricewaterhouseCoopers LLP as our independent registered public accounting firm to audit our consolidated financial statements for our fiscal year ending December 31, 2023. PricewaterhouseCoopers LLP served as our independent registered public accounting firm for the fiscal year ended December 31, 2022. PricewaterhouseCoopers LLP has audited our financial statements for each of the years ended December 31, 2018 through 2022.
At the annual meeting, we are asking our stockholders to ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for our fiscal year ending December 31, 2023. Our audit committee is submitting the appointment of PricewaterhouseCoopers LLP to our stockholders because we value our stockholders’ views on our independent registered public accounting firm and as a matter of good corporate governance. Notwithstanding the appointment of PricewaterhouseCoopers LLP, and even if our stockholders ratify the appointment, our audit committee, in its discretion, may appoint another independent registered public accounting firm at any time during our fiscal year if our audit committee believes that such a change would be in the best interests of our company and our stockholders. If our stockholders do not ratify the appointment of PricewaterhouseCoopers LLP, then our audit committee may reconsider the appointment. One or more representatives of PricewaterhouseCoopers LLP are expected to be present at the annual meeting, and they will have an opportunity to make a statement and are expected to be available to respond to appropriate questions from our stockholders.
Fees Paid to the Independent Registered Public Accounting Firm
The following table presents fees for professional audit services and other services rendered to us by PricewaterhouseCoopers LLP for our fiscal years ended December 31, 2022 and 2021.
2022 | 2021 | |||||||
Audit Fees(1) | $ | 1,385,000 | $ | 1,795,000 | ||||
Audit-Related Fees(2) | — | 124,300 | ||||||
Tax Fees(3) | — | — | ||||||
All Other Fees(4) | 900 | 1,092 | ||||||
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Total Fees | $ | 1,385,900 | $ | 1,920,392 | ||||
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— | 29,994 |
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Auditor Independence
In 2022, there were no other professional services provided by PricewaterhouseCoopers LLP, other than those listed above, that would have required our audit committee to consider their compatibility with maintaining the independence of PricewaterhouseCoopers LLP.
Audit Committee Policy on Pre-Approval of Audit and Permissible Non-Audit Services of Independent Registered Public Accounting Firm
Pursuant to its charter, the audit committee must review and approve, in advance, the scope and plans for the audits and the audit fees and approve in advance (or, where permitted under the rules and regulations of the SEC, subsequently) all non-audit services to be performed by the independent auditor that are not otherwise prohibited by law or regulations and any associated fees. All services provided by PricewaterhouseCoopers LLP for our fiscal years ended December 31, 2022 and 2021 were pre-approved by our audit committee. The chairperson of the audit committee and one or more members of the audit committee to which such authority is delegated by the audit committee may pre-approve all audit and permissible non-audit and tax services, as long as (1) this pre-approval is presented to the full committee at scheduled meetings and (2) fees for any individual services or set of related services approved pursuant to such delegation do not exceed $100,000.
Vote Required
The ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for our fiscal year ending December 31, 2023 requires the affirmative vote of a majority of the voting power of the shares cast. Abstentions will have no effect on the outcome of the vote on this proposal.
Board Recommendation
OUR BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE RATIFICATION OF THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR OUR FISCAL YEAR ENDING DECEMBER 31, 2023.
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AMENDMENT TO OUR AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
At the annual meeting, we are asking our stockholders to approve an amendment to our Amended and Restated Certificate of Incorporation, or the charter, to provide for exculpation from liability for our officers for certain breaches of fiduciary duties, similar to the protections currently available for our directors, as permitted under Delaware law.
Proposed Charter Amendment
The proposed charter amendment, marked to show the proposed changes, would amend Section 1 of Article X of the charter to read in its entirety as follows:
“To the fullest extent permitted by the DGCL as the same exists or as may hereafter be amended from time to time, a director or officer of the Company shall not be personally liable to the Company or its stockholders for monetary damages for breach of fiduciary duty as a director or officer. If the DGCL is amended to authorize corporate action further eliminating or limiting the personal liability of directors or officers, then the liability of a director or officer of the Company shall be eliminated or limited to the fullest extent permitted by the DGCL, as so amended.”
Purpose of the Charter Amendment
Effective August 1, 2022, the State of Delaware, where we are incorporated, adopted amendments to Section 102(b)(7) of the Delaware General Corporation Law, or the DGCL, to allow a Delaware corporation to exculpate its officers from personal liability for monetary damages for certain breaches of fiduciary duty as an officer. Prior to the DGCL amendment, Delaware corporations were permitted to exculpate directors from personal liability for monetary damages associated with breaches of the duty of care, but that protection did not extend to a Delaware corporation’s officers. Consequently, stockholder plaintiffs have employed a tactic of bringing certain claims that would otherwise be exculpated if brought against directors, against individual officers to avoid dismissal of such claims. The DGCL amendment was adopted to address inconsistent treatment between officers and directors and address rising litigation and insurance costs for Delaware companies and their stockholders.
Our board of directors desires to amend the charter to add provisions consistent with the DGCL amendment and believes the charter amendment, adding the authorized liability protection for certain officers, consistent with the protection currently afforded our directors in the charter, is necessary in order to (i) continue to attract and retain experienced and qualified officers and (ii) address rising litigation and insurance costs for our company and stockholders. The charter amendment would allow for the exculpation of certain officers only in connection with direct claims brought by stockholders, including class actions, but would not eliminate officers’ monetary liability for breach of fiduciary duty claims brought by the company itself or for derivative claims brought by stockholders in the name of the company. As is currently the case with directors under our charter, the charter amendment would not limit the liability of officers for any breach of the duty of loyalty to the company or its stockholders, any acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of the law, or any transaction from which the officer derived an improper personal benefit.
Effectiveness of the Charter Amendment
If the charter amendment is approved by the stockholders at the annual meeting, it will become effective upon the filing of the charter amendment with the Secretary of State of the State of Delaware. In accordance with the DGCL, however, our board of directors may elect to abandon the charter amendment without further action
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by the stockholders at any time prior to the effectiveness of the filing of the charter amendment with the Secretary of State of the State of Delaware, notwithstanding stockholder approval of the charter amendment.
Vote Required
The amendment to our Amended and Restated Certificate of Incorporation requires the affirmative vote of a majority of outstanding shares of our common stock entitled to vote thereon. Abstentions and broker non-votes will have the same effect as votes “AGAINST” the proposal.
Board Recommendation
OUR BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE AMENDMENT TO OUR AMENDED AND RESTATED CERTIFICATE OF INCORPORATION.
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The audit committee is a committee of the board of directors currently comprised of three directors, all of whom meet the independence requirements for audit committee members under the NYSE listing rules and the rules and regulations of the SEC. The audit committee operates under a written charter adopted by the board of directors. This written charter is reviewed annually for changes, as appropriate. With respect to our financial reporting process, management is responsible for (1) establishing and maintaining internal controls and (2) preparing our consolidated financial statements. Our independent registered public accounting firm, PricewaterhouseCoopers LLP, is responsible for performing an independent audit of our consolidated financial statements. It is the responsibility of the audit committee to oversee these activities. It is not the responsibility of the audit committee to prepare our financial statements. These are the fundamental responsibilities of management. In the performance of its oversight function, the audit committee has:
reviewed and discussed the audited consolidated financial statements with management and PricewaterhouseCoopers LLP;
discussed with PricewaterhouseCoopers LLP the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board, or PCAOB, and the SEC; and
received the written disclosures and the letter from PricewaterhouseCoopers LLP required by the applicable requirements of the PCAOB regarding the independent accountant’s communications with the audit committee concerning independence, and has discussed with PricewaterhouseCoopers LLP its independence.
Based on the review and discussions noted above, the audit committee recommended to the board of directors that the audited consolidated financial statements be included in the Annual Report on Form 10-K for the fiscal year ended December 31, 2022 for filing with the SEC.
Respectfully submitted by the members of the audit committee of the board of directors:
William Ingram (Chair)
Arun Oberoi
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ELECTION OF CLASS III DIRECTORS
Our board of directors currently consists of eight directors and is divided into three classes with staggered three-year terms. At the annual meeting, three Class III directors will be elected for a three-year term to succeed the same class whose term is then expiring. Each director’s term continues until the expiration of the term for which such director was elected and until such director’s successor is elected and qualified or until such director’s earlier death, resignation or removal.
Nominees
Our nominating and corporate governance committee has recommended, and our board of directors has approved, Dushyant Sharma, Jason Klein and Arun Oberoi as nominees for election as Class III directors at the annual meeting. If elected, each of Messrs. Sharma, Klein and Oberoi will serve as a Class III director until the 2027 annual meeting of stockholders and until his respective successor is elected and qualified or until his earlier death, resignation or removal. For more information concerning the nominees, please see the section titled “Board of Directors and Corporate Governance.”
Messrs. Sharma, Klein and Oberoi have agreed to serve as directors if elected, and management has no reason to believe that they will be unavailable to serve. In the event a nominee is unable or declines to serve as a director at the time of the annual meeting, proxies will be voted for any nominee designated by the present board of directors to fill the vacancy.
Vote Required
Each director is elected by a plurality of the votes cast. Because the outcome of this proposal will be determined by a plurality vote, any shares not voted FOR a particular nominee, whether as a result of choosing to WITHHOLD authority to vote or a broker non-vote, will have no effect on the outcome of the election.
Board Recommendation
OUR BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR ALL” OF THE DIRECTOR NOMINEES NAMED ABOVE.
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ELECTION OF CLASS III DIRECTORS
Our board of directors currently consists of eight directors and is divided into three classes with staggered three-year terms. At the annual meeting, three Class III directors will be elected for a three-year term to succeed the same class whose term is then expiring. Each director’s term continues until the expiration of the term for which such director was elected and until such director’s successor is elected and qualified or until such director’s earlier death, resignation or removal.
Nominees
Our nominating and corporate governance committee has recommended, and our board of directors has approved, Dushyant Sharma, Jason Klein and Arun Oberoi as nominees for election as Class III directors at the annual meeting. If elected, each of Messrs. Sharma, Klein and Oberoi will serve as a Class III director until the 2027 annual meeting of stockholders and until his respective successor is elected and qualified or until his earlier death, resignation or removal. For more information concerning the nominees, please see the section titled “Board of Directors and Corporate Governance.”
Messrs. Sharma, Klein and Oberoi have agreed to serve as directors if elected, and management has no reason to believe that they will be unavailable to serve. In the event a nominee is unable or declines to serve as a director at the time of the annual meeting, proxies will be voted for any nominee designated by the present board of directors to fill the vacancy.
Vote Required
Each director is elected by a plurality of the votes cast. Because the outcome of this proposal will be determined by a plurality vote, any shares not voted FOR a particular nominee, whether as a result of choosing to WITHHOLD authority to vote or a broker non-vote, will have no effect on the outcome of the election.
Board Recommendation
OUR BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR ALL” OF THE DIRECTOR NOMINEES NAMED ABOVE.
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RATIFICATION OF APPOINTMENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Our audit committee has appointed PricewaterhouseCoopers LLP as our independent registered public accounting firm to audit our consolidated financial statements for our fiscal year ending December 31, 2024. PricewaterhouseCoopers LLP served as our independent registered public accounting firm for the fiscal year ended December 31, 2023. PricewaterhouseCoopers LLP has audited our financial statements for each of the years ended December 31, 2018 through 2023.
At the annual meeting, we are asking our stockholders to ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for our fiscal year ending December 31, 2024. Our audit committee is submitting the appointment of PricewaterhouseCoopers LLP to our stockholders because we value our stockholders’ views on our independent registered public accounting firm and as a matter of good corporate governance. Notwithstanding the appointment of PricewaterhouseCoopers LLP, and even if our stockholders ratify the appointment, our audit committee, in its discretion, may appoint another independent registered public accounting firm at any time during our fiscal year if our audit committee believes that such a change would be in the best interests of our company and our stockholders. If our stockholders do not ratify the appointment of PricewaterhouseCoopers LLP, then our audit committee may reconsider the appointment. One or more representatives of PricewaterhouseCoopers LLP are expected to be present at the annual meeting, and they will have an opportunity to make a statement and are expected to be available to respond to appropriate questions from our stockholders.
Fees Paid to the Independent Registered Public Accounting Firm
The following table presents fees for professional audit services and other services rendered to us by PricewaterhouseCoopers LLP for our fiscal years ended December 31, 2023 and 2022.
2023 | 2022 | |||||||
Audit Fees(1) | $ | 1,405,000 | $ | 1,385,000 | ||||
Audit-Related Fees(2) | — | — | ||||||
Tax Fees(3) | — | — | ||||||
All Other Fees(4) | 2,000 | 900 | ||||||
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Total Fees | $ | 1,407,000 | $ | 1,385,900 | ||||
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(1) | “Audit Fees” consist of fees billed for professional services rendered in connection with the |
(2) | “Audit-Related Fees” consist of fees billed for professional services for assurance and related services that are reasonably related to the |
(3) | No services for tax compliance, tax advice or tax planning were provided by PricewaterhouseCoopers LLP in fiscal years 2023 and 2022. |
(4) | “All Other Fees” consist of access to online accounting research software applications and disclosure checklist software. |
Auditor Independence
In 2023, there were no other professional services provided by PricewaterhouseCoopers LLP, other than those listed above, that would have required our audit committee to consider their compatibility with maintaining the independence of PricewaterhouseCoopers LLP.
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Audit Committee Policy on Pre-Approval of Audit and Permissible Non-Audit Services of Independent Registered Public Accounting Firm
Pursuant to its charter, the audit committee must review and approve, in advance, the scope and plans for the audits and the audit fees and approve in advance (or, where permitted under the rules and regulations of the SEC, subsequently) all non-audit services to be performed by the independent auditor that are not otherwise prohibited by law or regulations and any associated fees. All services provided by PricewaterhouseCoopers LLP for our fiscal years ended December 31, 2023 and 2022 were pre-approved by our audit committee. The chairperson of the audit committee and one or more members of the audit committee to which such authority is delegated by the audit committee may pre-approve all audit and permissible non-audit and tax services, as long as (1) this pre-approval is presented to the full committee at scheduled meetings and (2) fees for any individual services or set of related services approved pursuant to such delegation do not exceed $100,000.
Vote Required
The ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for our fiscal year ending December 31, 2024 requires the affirmative vote of a majority of the voting power of the shares cast. Abstentions will have no effect on the outcome of the vote on this proposal.
Board Recommendation
OUR BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE RATIFICATION OF THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR OUR FISCAL YEAR ENDING DECEMBER 31, 2024.
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The audit committee is a committee of the board of directors currently comprised of three directors, all of whom meet the independence requirements for audit committee members under the NYSE listing rules and the rules and regulations of the SEC. The audit committee operates under a written charter adopted by the board of directors. This written charter is reviewed annually for changes, as appropriate. With respect to our financial reporting process, management is responsible for (1) establishing and maintaining internal controls and (2) preparing our consolidated financial statements. Our independent registered public accounting firm, PricewaterhouseCoopers LLP, is responsible for performing an independent audit of our consolidated financial statements. It is the responsibility of the audit committee to oversee these activities. It is not the responsibility of the audit committee to prepare our financial statements. These are the fundamental responsibilities of management. In the performance of its oversight function, the audit committee has:
reviewed and discussed the audited consolidated financial statements with management and PricewaterhouseCoopers LLP;
discussed with PricewaterhouseCoopers LLP the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board, or PCAOB, and the SEC; and
received the written disclosures and the letter from PricewaterhouseCoopers LLP required by the applicable requirements of the PCAOB regarding the independent accountant’s communications with the audit committee concerning independence, and has discussed with PricewaterhouseCoopers LLP its independence.
Based on the review and discussions noted above, the audit committee recommended to the board of directors that the audited consolidated financial statements be included in the Annual Report on Form 10-K for the fiscal year ended December 31, 2023 for filing with the SEC.
Respectfully submitted by the members of the audit committee of the board of directors:
William Ingram (Chair)
Jody Davids
Gary Trainor
This report shall not be deemed to be “soliciting material” or to be “filed” with the SEC or subject to Regulation 14A promulgated by the SEC or to the liabilities of Section 18 of the Exchange Act, and shall not be deemed incorporated by reference into any prior or subsequent filing by Paymentus under the Exchange Act or the Securities Act of 1933, as amended, or the Securities Act, except to the extent Paymentus specifically requests that the information be treated as “soliciting material” or specifically incorporates it by reference.
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The following table sets forth certain information about our executive officers as of April 11, 2024.