| Item 5.02. | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
CEO Transition
On June 22, 2022, the Board of Directors (the “Board”) of Pinterest, Inc. (the “Company”) appointed William Ready as the Chief Executive Officer of the Company, to succeed Benjamin Silbermann, the Company’s Chief Executive Officer and President, effective as of June 29, 2022 (the date he commences his employment, the “Effective Date”).
On June 22, 2022, the Board also increased the size of the Board from nine to ten directors, and appointed William Ready as a Class III director, effective as of the Effective Date. Mr. Ready will serve as a Class III director with a term expiring at the Company’s annual meeting of stockholders to be held in 2025 and until his successor is duly elected and qualified, or his earlier death, resignation or removal.
William Ready, age 42, was the president of commerce, payments & next billion users at Google from January 2020 until June 2022. Prior to joining Google, Mr. Ready was PayPal’s executive vice president and chief operating officer from October 2016 through July 2019, and continued as executive vice president through December 2019 during the transition until he departed PayPal. Prior to that, he was PayPal’s senior vice president, global head, product & engineering from July 2015 to September 2016 and he continued to lead Braintree operations while in various roles at PayPal following PayPal’s acquisition of Braintree in December 2013. From October 2011 to December 2013, he was the chief executive officer of Braintree, a mobile and web payment systems company acquired by PayPal. Prior to Braintree, Mr. Ready was executive in residence at Accel Partners, a leading Silicon Valley venture capital and growth equity firm. Mr. Ready also served as president of iPay Technologies from 2008 to 2011. He also worked as a strategy consultant for McKinsey & Company, where he advised leading financial technology companies. Mr. Ready is currently a senior advisor and limited partner of Silversmith Capital Partners and a director of Williams-Sonoma and ADP.
The Company and Mr. Ready entered into an employment offer letter in connection with his appointment as Chief Executive Officer and director (the “Offer Letter”). Pursuant to the Offer Letter, Mr. Ready is eligible for the following compensation, (i) an annual base salary of $400,000 and (ii) a stock option award to purchase 8,553,172 shares of the Company’s Class A common stock (the “Option Award”) to be granted in connection with his appointment. The Option Award will have an exercise price equal to the closing price of the Company’s Class A common stock on the date of grant and will vest and become exercisable on quarterly basis over a four-year period, subject to Mr. Ready providing continued services to the Company as the Chief Executive Officer on each applicable vesting date.
In addition, provided that Mr. Ready purchases shares of the Company’s Class A common stock on the open market with an aggregate value of $5 million (the “Investment Shares”) within 60 days following commencement of his employment (or such other period as mutually agreed with the Company) (the “Purchase Period”), Mr. Ready will be granted restricted shares of the Company’s Class A common stock having a target value of $20 million, with the actual number of shares to be determined by dividing the target value by the average closing price of the Company’s Class A Common Stock over the 30 trading days ending on the last day of the Purchase Period (the “RSA Award”). The RSA Award will vest on a quarterly basis over the four-year period following Mr. Ready’s commencement of employment, subject to Mr. Ready providing continued services to the Company as the Chief Executive Officer and continuing to hold the Investment Shares on each applicable vesting date.
The Company and Mr. Ready also entered into an Executive Severance and Change in Control Agreement on June 23, 2022, in connection with his appointment as Chief Executive Officer (the “Executive Severance Agreement”). Pursuant to the terms of the Executive Severance Agreement, if Mr. Ready is terminated by the Company without “cause” or he resigns for “good reason” (each as defined the Executive Severance Agreement), Mr. Ready will be entitled to the following severance and benefits: (i) a cash payment in an amount equal to (x) 24 months of his base salary reduced by (y) one month for each full month that he has been employed by the Company at the time of such termination, up to a maximum reduction of 12 months (such number of months, the “Severance Period”), less applicable tax withholdings, (ii) a cash payment equal to the cost of Company-paid health insurance continuation coverage during the Severance Period, less applicable tax withholdings, and (iii) Mr.Ready’s outstanding equity awards will vest and become exercisable as of the termination date, as applicable, as if he had remained in service for the duration of the Severance Period. To the extent that any such termination of service occurs within 90 days prior to, or 12 months following a change in control of the Company, all of Mr. Ready’s outstanding equity awards will become fully vested and exercisable, as applicable. The foregoing severance payments and benefits are subject to Mr. Ready’s execution of a general release of claims against the Company and his compliance with certain restrictive covenants. In addition, these payments and benefits are subject to a “best net after-tax” provision in the event that the benefits would trigger excise tax penalties and loss of deductibility under Sections 280G and 4999 of the U.S. Internal Revenue Code.
