UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
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BLOOM ENERGY CORPORATIONBloom Energy Corporation
(Name of Registrant as Specified In Its Charter)
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Dear Stockholder,
It is my pleasure to invite you to our annual meeting of stockholders. The meeting is scheduled for 9:00 a.m. Pacific Time on Wednesday, May 12, 2021.
This year, in light of the COVID-19 pandemic, we will again be conducting the annual meeting online for the safety of our stockholders, directors and employees.
The Annual Meeting live webcast can be found at www.virtualshareholdermeeting.com/BE2021. See page 80 for more information on how to participate in the virtual annual meeting.
Strong 2020 Performance
2020 was a year of tremendous challenge for the world, our country and our company. Despite the challenges of 2020, we executed well on the annual goals laid out in our strategic plan, and implemented a framework that positions Bloom for future growth and to remain at the forefront of innovation in the energy sector. Among our accomplishments:
• | We delivered record revenue, increased our gross margins through reduced product and service costs, and strengthened our balance sheet by eliminating our short-term recourse debt, reducing our total recourse debt and increasing our cash balance. |
• | We added four exceptional new members to our management team who bring proven track records of success, operating skill and excellence in leadership. |
• | We completed the first installation of our fifth-generation Energy Server, the 7.5. |
• | We achieved cost reductions in our product, install and service offerings that allow us to deliver 9 cents/kWh for power, competitively positioning our Energy Server offering in the majority of the 50 states. |
• | Finally, leveraging our core technology, we established several strategic growth levers, which are the foundation for our future growth - hydrogen fuel cells, biogas fuel cells, electrolyzers, marine and carbon capture technology, and made developmental progress on these new applications for low and zero carbon energy. |
Resilient People, Resilient Culture, Resilient Solutions
If I were to describe Bloom in one word, it would be resilient, which is reflected in our people, culture, employees, products and services.
• | Our People and Partners – As the world’s first stationary solid oxide fuel cell provider to reach commercial scale, our path has not always been easy. However, from our inception, our employees have always had an unwavering focus on our mission – and 2020 was no different. In the midst of the COVID-19 pandemic, our resilient employees and partners navigated myriad local and global obstacles to continue to safely and effectively manufacture, install and service our Energy Servers so essential businesses would have power for their customers and communities. | ||
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2021 PROXY STATEMENT | 3 |
| Our Product and Technology – 2020 brought into sharp focus the need for resilient, predictable, clean and always-on power, and the continued power outages and disruptions we have experienced thus far in 2021 indicate that finding a solution is
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The
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Leading the Energy Industry Transformation
Bloom Energy is at the forefront of innovation in the energy sector, addressing the critical need for resiliency, predictability and sustainability today - on the pathway to low and zero carbon energy. The fuel flexibility of our currently available Energy Server platform provides customers with the ability to run our Energy Servers on natural gas, biogas and hydrogen blends today. Our platform also allows us to deliver on a near-term commitment to achieve scalable and cost-effective hydrogen solutions – both in front of and behind the meter – within the power generation and transportation industries.
The Year Ahead
As we look to the year ahead, our value proposition has never been more compelling. The impacts of climate change are being felt worldwide and are exposing the fragilities of the grid. Policymakers here at home and abroad are calling for actions that our American-made technology is well-suited to address.
As we are on the verge of emerging from the COVID-19 crisis, I truly believe we are a stronger and better company today than when the crisis started last winter. We have a strong leadership team, a strengthened balance sheet, new solutions, new markets and multiple pathways to low and zero carbon energy. And, our private-sector energy solution, combined with public policy imperatives have created a powerful moment of opportunity for which Bloom Energy is exceedingly well-positioned, moving us further along the road to achieving our mission to make clean, reliable and affordable energy for everyone in the world.
On behalf of the entire Bloom Energy Board of Directors, I thank you for your continued interest in and support of our company.
Sincerely,
KR Sridhar
Founder, Chairman and Chief Executive Officer
March 31, 2021
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Notice of Annual Meeting of Stockholders
Date and Time May 12, | |||
Location
Online Meeting at www.virtualshareholdermeeting. com/BE2021 | |||
Who Can Vote Only stockholders of record as of the close of business on March 16, | |||
Voting Items
Proposals to be voted on at the 2021 Annual Meeting:
Board Vote Recommendation | For Further Details | ||||
1. | To elect the three Class III directors named in the Proxy Statement. | Page 18 | |||
2. | To approve, on an advisory basis, the frequency of stockholder advisory votes on the compensation of our named executive officers. | ONE YEAR | Page 68 | ||
3. | To approve, on an advisory basis, the compensation of our named executive officers, as described in the Proxy Statement. | FOR | Page 69 | ||
4. | To ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2021. | FOR | Page 70 |
Stockholders will also transact any other business that may be properly brought before the 2021 Annual Meeting or any adjournment, continuation or postponement thereof.
To attend the meeting online, vote, view the stockholder list or submit questions, stockholders will need to go to the Annual Meeting website noted and log in using the control number provided on their proxy card, Notice of Internet Availability or voting instruction form. The foregoing proposals are more fully described in the Proxy Statement accompanying this Notice.
Your vote as a Bloom Energy stockholder is very important. Holders of Class A common stock are entitled to one vote per share. Holders of Class B common stock are entitled to ten votes per share. If you are a registered holder and have questions regarding your stock ownership, you may contact our transfer agent, American Stock Transfer & Trust Company, through its website at www.astfinancial.com or by phone at 1-800-937-5449.
In the event of a technical malfunction or other situation that the meeting chair determines may affect the ability of the meeting to satisfy the requirements for a meeting of stockholders to be held by means of remote communication under the Delaware General Corporation Law, or that otherwise makes it advisable to adjourn the meeting, the chair of the meeting will convene the meeting at 9:30 a.m. Pacific Time on the date specified above and at our address at 4353 North First Street, San Jose, CA 95134 solely for the purpose of adjourning the meeting to reconvene at a date, time and physical or virtual location announced by the meeting chair. Under either of the foregoing circumstances, we will post information regarding the announcement on the investors page of our website at investor.bloomenergy.com.
By Order of the Board of Directors
Shawn M. Soderberg
Executive Vice President, General Counsel and Secretary
March 31, 2021
How to Vote
Internet Before the Annual Meeting: www.proxyvote.com During the Annual Meeting: www.virtualshareholdermeeting.com/BE2021 | |||
Telephone 1-800-690-6903 | |||
Mark, sign, date and promptly mail the enclosed proxy card in the postage-paid envelope |
All stockholders of record as of the close of business on March 16, 2021 may attend the 2021 Annual Meeting online. Whether or not you expect to attend the 2021 Annual Meeting online, we encourage you to read the Proxy Statement and vote through the internet or by telephone or request and submit your proxy card or voting instruction form as soon as possible so that your shares may be represented at the meeting.
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting to be held on May 12, 2021.
The Notice and Proxy Statement and Annual Report on Form 10-K are available at www.proxyvote.com.
2021 PROXY STATEMENT | 5 |
Certain statements in this Proxy Statement, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives and expected operating results, statements regarding our environmental and other sustainability plans and goals, and the assumptions upon which those statements are based, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements may appear throughout this report. These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties, which may cause actual results to differ materially from the forward-looking statements. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events, or otherwise. Website references throughout this document are provided for convenience only, and the content on the referenced websites is not incorporated by reference into this document. |
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This proxy statement (the “Proxy Statement”) is being furnished to the stockholders of Bloom Energy Corporation, a Delaware corporation (“Bloom”, “we”, “us” or “our”), in connection with the solicitation of proxies by our Board of Directors (the “Board”) for use at our 2021 annual meeting of stockholders (the “2021 Annual Meeting”). The record date for the Annual Meeting is March 16, 2021 (the “Record Date”). Only stockholders of record at the close of business on that date may vote at the 2021 Annual Meeting or any postponement or adjournment thereof. On or about March 31, 2021, we will mail to most of our stockholders a Notice of Internet Availability of Proxy Materials (the “Notice”) containing instructions on how to access our proxy materials, including our Proxy Statement and Annual Report on Form 10-K for the year ended December 31, 2020 (the “Annual Report”).
The 2021 Annual Meeting will be held online via live webcast at www.virtualshareholdermeeting.com/BE2021 on Wednesday, May 12, 2021 at 9:00 a.m. Pacific Time. This year’s question and answer session will include questions submitted in advance of, and questions submitted live during, the 2021 Annual Meeting. You may submit a question in advance of the 2021 Annual Meeting at www.proxyvote.com after logging in with your control number. You will also be able to vote your shares electronically at the annual meeting. Questions may be submitted during the 2021 Annual Meeting through www.virtualshareholdermeeting.com/BE2021.
We have adopted a virtual format for our 2021 Annual Meeting to make participation accessible for stockholders from any geographic location with internet connectivity. In addition, in light of continued concerns regarding the COVID-19 pandemic, we believe it is best to adhere to a virtual format for 2021 to protect the health and well-being of our stockholders and employees. We hope to resume holding in-person stockholder meetings next year.
For additional information on the 2021 Annual Meeting and your vote, please see the “User’s Guide” toward the back of this Proxy Statement.
Here are highlights of important information you will find in this Proxy Statement. As it is only a summary, please review the complete Proxy Statement before you vote.
Summary of Stockholder Voting Matters
Voting Matters | Board Vote Recommendation | See Page | |
Item 1 – | Election of Directors | FOR each nominee | 18 |
Item 2 – | Advisory Approval of Frequency of Say on Pay Vote | ONE YEAR | 68 |
Item 3 – | 2020 Advisory Approval of Executive Compensation | FOR | 69 |
Item 4 – | Ratification of the Appointment of Independent Registered Accounting Firm | FOR | 70 |
2021 PROXY STATEMENT | 7 |
Proxy Statement Summary
The Board has nominated Michael Boskin, John T. Chambers and L. John Doerr for election as Class III directors to hold office until the 2024 Annual Meeting of Stockholders. For detailed information about each director’s background, qualifications and skill sets, please see “Our Board” later in this Proxy Statement.
Director | Committees | Other Current Public | |||||||||
Name and Primary Occupation | Age | Since | AC | CC | N/GC | Company Boards | |||||
Michael Boskin IND Professor of Economics and Hoover Institution Senior Fellow, Stanford University | 75 | 2019 | 1 | ||||||||
John T. Chambers IND Founder and Chief Executive Officer at JC2 Ventures and former Chairman and CEO of Cisco | 71 | 2018 | 0 | ||||||||
L. John Doerr IND General Partner of Kleiner Perkins | 69 | 2002 | 5 | ||||||||
General Colin L. Powell Former U.S. Secretary of State | 83 | 2009 | 1 | ||||||||
Scott Sandell IND Managing General Partner at New Enterprise Associates, Inc. | 56 | 2003 | 3 | ||||||||
KR Sridhar Founder, Chairman and Chief Executive Officer of Bloom Energy | 60 | 2002 | 0 | ||||||||
Mary K. Bush IND President of Bush International, LLC | 72 | 2017 | 3 | ||||||||
Jeffrey Immelt IND Venture Partner at New Enterprise Associates, Inc. and former Chairman and CEO of General Electric | 65 | 2019 | 3 | ||||||||
Eddy Zervigon IND CEO of Quantum Xchange | 52 | 2007 | 1 |
AC – Audit Committee | Chair | IND | Independent | |||||
CC – Compensation and Organizational Development Committee | Member | |||||||
N/GC – Nominating, Governance and Public Policy Committee | Financial Expert |
Voting Items
Proposals to be voted on at the Meeting:
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Table of ContentsBoard Composition
Corporate Governance Highlights
Key Changes Since the Beginning of 2020 | |
• | Expanded Corporate Governance Guidelines’ definition of diversity to include gender and ethnic diversity; |
• | Strengthened Corporate Governance Guidelines to reflect Board’s role in risk oversight of sustainability, including environmental, social and human capital matters, and political contributions and lobbying; |
• | Expanded Nominating Committee charter to include oversight of sustainability, including environmental, social and human capital matters; |
• | Independent directors designated Mr. Immelt to succeed Mr. Doerr as lead independent director; |
• | Adopted stock ownership guidelines for non-employee directors and executive vice presidents; |
• | Determined that 30% of equity grants made to our executive officers in 2020 would be tied to corporate performance; |
• | Determined that 40% of equity grants made to our executive officers in 2021 would be tied to corporate performance; and |
• | Prepared our first Sustainability Report, which will be posted on our corporate website in April 2021. |
Governance Highlights | |
• | The Board consists of a diverse group of professionals who bring significant leadership, distinct qualities and skill sets relevant to our business and strategy. We believe the current composition of the Board is diverse, which provides a wide range of perspectives and viewpoints, enabling them to effectively represent the long-term interests of our stockholders; |
• | The Board and its committees annually assess their performance through a self-evaluation by an independent third party, which includes a self-evaluation of each individual director’s performance; |
• | A clawback policy applicable to our CEO and our executive vice presidents; |
• | Anti-hedging and anti-pledging policy for employees and directors; |
• | We have three standing committees of the Board – Audit, Compensation and Organizational Development, and Nominating, Governance and Public Policy. All committees are composed entirely of independent directors; |
• | Executive sessions of independent directors are conducted regularly at Board and Board committee meetings; |
• | Strong lead independent director with robust authority and responsibility that is disclosed to stockholders; |
• | No restrictions on director access to officers and employees; |
• | Responded to investor feedback to simplify our quarterly reporting and our operating metrics, to provide investor sessions on our business and technology and to produce a Sustainability Report; and |
• | Members of our senior management team are responsible for implementation of our day-to-day risk management processes, while the Board, as a whole and through its committees, has responsibility for the oversight of overall risk management. |
2021 PROXY STATEMENT | 9 |
Forward-Looking StatementsProxy Statement Summary
Transition from Emerging Growth Company Status to Large Accelerated Filer
Beginning on January 1, 2020, we transitioned from our status as an emerging growth company to a large accelerated filer. This Proxy Statement contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements containedrequires us to make additional disclosure in this Proxy Statement, other than statements of historical fact, including statements regarding our future operating results and financial position, our business strategyincluding:
• | Expanded disclosure about our executive compensation practices in our Compensation Discussion and Analysis (beginning on page 47); |
• | Additional compensation tables, including “Grant of Plan-based Awards Table” (beginning on page 60); |
• | Conduct a vote every six years, on an advisory basis, on the frequency of our say-on-pay vote (specifically whether it will occur every one, two or three years); and |
• | Allow stockholders to approve, on an advisory basis, the compensation of our named executive officers. |
Executive Compensation Highlights
Our 2020 compensation plans and payouts for our objectives for future operations, are forward-looking statements. The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “predict,” “project,” “potential,” ”seek,” “intend,” “could,” “would,” “should,” “expect,” “plan”named executive officers reflect our overarching philosophy of pay-for-performance. Highlights of our compensation program include:
• | Emphasis on Performance-Based Incentives: A majority of the target compensation opportunity provided to our named executive officers is awarded in the form of cash incentives and equity awards for which the realized value varies based on our financial and operating performance. |
• | Challenging Performance Objectives: The Compensation and Organizational Development Committee (the “Compensation Committee”) sets rigorous goals for our annual bonus plan that will be achieved only if we perform at a high level. Based on our performance in 2020, our named executive officers earned a bonus between 130% and 137% of their targets for the year. |
• | Performance-Based Approach to Long-Term Incentives: Performance-based stock units (“PSUs”) represent 50% of the target long-term incentive value granted to our Chief Executive Officer (“CEO”) and 30% of the target value granted to our other named executive officers. The remaining long-term incentive value was granted in the form of time-based vesting restricted stock units (“RSUs”) (excluding Gregory Cameron, our Chief Financial Officer (“CFO”), who was granted stock options as part of his new hire awards). No PSUs that were granted in 2020 would be earned if our revenue and adjusted EBITDA performance fell below our targets for the year. Based on our strong results in 2020, our named executive officers (excluding Mr. Cameron) earned 147% of the target number of shares granted in 2020. |
As shown below, approximately 50% of the target total compensation awarded to our CEO and similar expressions are intended30% awarded to identify forward-looking statements. Forward-looking statementsour other named executive officers (other than Mr. Cameron) was at-risk in this the form of our cash annual incentive and performance-based equity, both of which were eligible to be earned based on our level of achievement of rigorous financial goals.
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Proxy Statement include, butSummary
In addition, the Compensation Committee seeks to ensure that we maintain sound governance and compensation policies and practices. In designing and overseeing our executive compensation program, we strive to employ best practices and regularly assess our policies and practices.
WHAT WE DO | WHAT WE DON’T DO | |
A significant portion of our executive compensation program is dependent upon variable, at-risk pay components based on operational performance metrics Prior to making executive compensation decisions we review peer company compensation data We ensure management acts and thinks like stockholders through stock ownership guidelines We seek third-party executive compensation advice for the Compensation Committee from an in dependent consulting firm that does not perform any other services for Bloom A clawback policy for our CEO and our executive vice presidents | No Supplemental Executive Retirement Plan No automatic single trigger equity award acceleration upon a change of control No golden parachute excise tax gross-ups Executive officers may not pledge our common stock as collateral for any obligation Executive officers may not engage in transactions intended to hedge or offset the market value of our common stock owned by them No perquisites to any of our executive officers |
2021 PROXY STATEMENT | 11 |
Company Overview
With roots in NASA’s space program, we were born from innovation. We created the first large-scale, commercially viable solid oxide fuel-cell based power generation platform that delivers highly reliable, clean, resilient and cost-effective power to businesses, essential services and critical infrastructure. Our technology, invented in the United States and manufactured by American workers, is the most advanced on-site power generation technology on the market today. Our Energy Servers convert natural gas, biogas, or hydrogen into electricity at high efficiency and without combustion, significantly reducing environmental impacts.
Our enterprise customers are not limited to, our plans and expectations regarding future business strategies, our expectations regarding future financial condition and results of operations, and our expectations regarding general business and economic conditionsamong the largest multinational corporations who are leaders in our markets, including the effectsadopting new technologies. We also have strong relationships with some of the globallargest utility companies in the United States and around the world.
Driving Resilience
Catastrophic weather events in 2020 resulted in $95 billion in damages and widespread power outages that left hundreds of thousands in the dark for days, and even weeks. As overtaxed electric grids across the nation buckled under the strain, our Energy Servers delivered clean, resilient, uninterrupted energy to power our customers through these outages.
In 2020, our solutions were notably deployed at critical moments to power pop-up field hospitals in California amid the COVID-19 pandemic and market volatility.to support mission critical energy in the face of hurricanes in Louisiana with our partners.
You should not rely upon forward-looking statements as predictionsTime and time again, our microgrids – islands of future events. Weenergy resiliency – have basedhelped fortify critical infrastructure systems to ensure uninterrupted power, providing energy when the forward-looking statements contained in this Proxy Statement primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, operating results and prospects. The outcome of the events described in these forward looking statements is subject to risks, uncertainties and other factors including those discussed in ITEM 1A - Risk Factors and elsewhere in our Annual Report on Form 10-K. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time and itgrid is not possible for us to predict all risks and uncertainties or the extent to which any factor or combination of factors may cause actual results to differ materially from those contained in any forward-looking statementsavailable. In fact, we may make in this Proxy Statement. We cannot assure youhave deployed more than 100 microgrids that the results, events and circumstances reflected in the forward-looking statements will be achieved or occur. Actual results, events or circumstances could differ materially and adversely from those described or anticipated in the forward-looking statements.have supported our customers’ critical load through more than 1,700 power disruptions since 2018.
The forward-looking statements made in this Proxy Statement relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Proxy Statement to reflect events or circumstances after the date of this Proxy Statement or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements.
In keeping with our mission to make clean, reliable, and affordable energy for everyone in the world, we accomplished the following during 2019:
Financial Highlights
Product and Installation Backlog Expands to Close to 2,000 Systems
Total Acceptances | |
11.1% increase | Despite the effect of the COVID-19 pandemic, we operated as an essential business and were able to grow acceptances to a record 1,326 systems, or 132.6 megawatts, in 2020. This represents an increase of 11.1% year-over-year, driven by new and existing customers, with the majority of the installations in the United States. An acceptance typically occurs when the system is turned on and producing full power. For orders where one of our partners performs the installation, our acceptance criteria are different. Those acceptances are generally achieved when the systems are shipped or delivered to our partner. Upon acceptance, the customer order is moved from product backlog and is recognized as revenue. This performance represents a broad range of verticals including hospitals and healthcare, retail, utilities and energy, cloud services and data centers, education institutions, food and beverage, government, technology, construction and transportation. |
Revenue | Operating Margin | |||
1.1% increase year-over-year | We achieved record revenue of $794.2 million in 2020 compared with $785.2 million in 2019, an increase of 1.1% year-over-year. | Increase of 19.4 percentage points year-over-year | We achieved operating margin of (10.2)% in 2020 compared with (29.6)% in 2019, an increase of 19.4 percentage points year-over-year. | |
Gross Margin | EPS | |||
Increase of 8.5 percentage points year-over-year | We achieved gross margin of 20.9% in 2020 compared with 12.4% in 2019, an increase of 8.5 percentage points year-over-year. | 57.3% improvement year-over-year | Earnings per share on a GAAP basis was ($1.14) in 2020 compared with ($2.67) in 2019, an improvement of 57.3% year-over-year. |
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2019 was a strong year for new bookings. We expanded our product and installation backlog to 1,983 systems at year-end, a 43.3% increase from the prior year. The majorityTable of our current backlog is domestic and includes U.S. commercial and industrial customers, utility scale projects, and international customers. Our goal is to maintain 9 to 12 months of product and install backlog at any point in time, and we are comfortably over that range as we enter the 2020 fiscal year.Contents
Total Acceptances
We grew acceptances to a record 1,194 systems in FY19, a 47.6% increase year-over-year, from new and existing customers, with the majority of the installations in the United States. This represents a broad range of verticals including healthcare, pharmaceutical, universities, utility scale projects, food and beverage retail, and even a sports venue.
Revenue
We achieved a record $785.2 million of revenue in FY19 compared to $632.6 million in FY18, an increase of 24.1% year-over-year.
EPS
EPS for FY19 on a GAAP basis was ($2.67) compared to ($5.14) in FY18, an improvement of 48.1% year-over-year.
Who We Are |
Business Highlights
Diverse, International Customer Base Supports Strong AcceptancesIn 2020, we operated through myriad challenges and significantly advanced our business, better positioning us to achieve near- and long-term success. We added talent across the senior executive team, strengthened our financial position, unveiled our strategic growth plans, advanced our technology roadmap, and drove manufacturing and service improvements. As a result of these actions, we believe we are well-positioned to capitalize on our intellectual property, history of innovation, manufacturing prowess, and the strength and flexibility of our Bloom Energy Servers to drive long-term, sustainable value for all of our stakeholders including our customers, partners, employees, stockholders and the communities we serve.
ForUnderscoring our US commercialcommitment to growth and industrial (C&I) sector,success, the leadership and management team made a number of critically important decisions that delivered on our purpose, advanced our mission, and set a strategic pathway for a better energy future for the world. The following business highlights reflect some of the important progress we continued to experience momentum in the data center, healthcare, retail, and utility sectors across our marketsbelieve we have made during FY19. Throughout the year, existing customers increased their footprint and deployed our technology at multiple locations.2020:
Outside the US, the Asia Pacific region remains a major market opportunity for Bloom, and we’ve demonstrated the strength of our technology and deepened our market penetration. In Korea, our flagship 8.35 MW power tower project achieved its first year of commercial operations and greatly exceeded its contractual obligations. We also had a string of wins in the utility sector in Korea, which will be commissioned in 2020. Outside Korea, we are encouraged by the demand we’re seeing in Japan and India as we continue to expand into other international markets. In India, we signed several significant projects, including a first-of-its-kind commercial real estate development in Bangalore as well as Bloom’s first commercial scale on-site biogas to electricity project in the country. In Japan, our systems continued to operate during typhoon Hagibis, one of the largest storms in decades to hit the country.
• | Balance Sheet Improvement and Financial Strength: During the fourth quarter of 2020, we completed the retirement of the 10% Senior Secured Notes due July 2024 and the conversion of the remainder of our 10% Convertible Promissory Notes due December 2021. After the retirement and conversion of these notes, we reduced our recourse debt by approximately $144 million. These reductions, and the decrease in comparable interest rate in connection with the issuance in August 2020 of the $230 million aggregate principal amount of our 2.50% Green Convertible Senior Notes due 2025, resulted in reduced annual debt service costs of approximately $47 million. Our cash balances have increased since last year, with total cash increasing $39.3 million to $416.7 million, with the unrestricted component up slightly more, with total unrestricted at $246.9 million, up $44.1 million versus 2019. With reduced debt, more cash, strong operating discipline and substantial progress, we believe we are now well-positioned for future growth. |
• | Investing for the Future: Faced with an uncertain operating environment, our management team made the critical decision to delay a planned expansion of our manufacturing facility in early 2020, instead electing to focus on increasing production in our existing facilities and reducing the cost of our current product through manufacturing innovation and improvements. This action enabled us to defer market expansion-related expenses and further manage our cash position. As a result of these decisions, we have reached a point where we will be making investments to increase manufacturing capacity in 2021. We are planning to secure an additional 200 megawatt fuel cell manufacturing line as part of our Bloom 7.5 introduction. This combined capacity will provide 400 megawatts of fuel cell, or over 1 gigawatt of electrolyzer capacity, that we can allocate based upon market demand. |
• | Unveiling the Growth Levers through Bloom’s Innovative Technology Roadmap: In December, we unveiled our technology roadmap that will accelerate growth by capitalizing on emerging market opportunities. We have introduced new applications that can serve an increasingly diverse and global customer base, which is focused on moving to a 100% zero-carbon future. The growth levers of our strategic plan build on the foundation of our fuel-flexible technology and include: hydrogen fuel cells and electrolyzers, biogas, carbon capture and marine power. |
• | Installing the First Bloom 7.5 Server: We completed the installation of our first Bloom 7.5 Server with a customer in December. The unit is performing as expected and we intend to increase production and the manufacturing of Bloom 7.5 throughout 2021. In 2022, we expect Bloom 7.5 will represent the majority of the systems we manufacture. |
• | Continuing History of Manufacturing Innovation: We have a long history of continuous improvement across all facets of our business. This year we made substantial progress on improving upon the ease and predictability of our installation process as part of our broader effort to simplify the business. The COVID-19 pandemic underscored the need to improve our processes, as it brought into focus a new set of impediments for our installation team along with those that we encounter in a world dealing with climate change. The first Bloom Energy Server pre-assembled for rapid installation on a skid, ready to deploy, was built at our factory in Delaware. By transferring a significant portion of the integration work and time from less predictable field conditions to a controlled factory environment, we expect to be able to reduce cost and time overruns. The ease of installing a skid in a customer location will enable us to offer simple standardized procedures to outsourced installation partners, thereby enabling us to scale up our operations—both geographically and in volume. It will also enable us to power customers on a short-term or emergency basis. |
With a clear focus on our purpose, commitment to executing on the growth levers of our strategic plan and the financial resources to make prudent investments in our business, we believe we are on the pathway to growth. Our diverse and talented management team shares a history of innovation and leadership in technology that moves us closer to the promise of a clean energy future and nearer to achieving our mission of making reliable, resilient and lower cost power available to all.
2021 PROXY STATEMENT | 13 |
Strong Market Opportunity for Microgrids As Power Outages Continue to Rise
California’s Public Safety Power Shutoffs (PSPS), which are planned power outages with the objective of reducing wildfires and improving public safety, have become the “new normal” for local companies and communities. It has been projected that the state’s utilities will continue to de-energize their power lines for the next ten years, or longer. The duration of these outages is long, with the average of nearly two full days (from October 2017 to present day). Additionally, the service territories that are designated as “high fire threat areas” are expected to expand as fire risk worsens over time.
To help our customers on the West Coast prepare for future wildfire seasons, we launched a new Quick-Deploy Microgrid Program for PSPS Readiness, which provides permanent AlwaysON Microgrids for their facilities. This program will enable customers to deploy a resilient microgrid infrastructure prior to the anticipated start of the 2020 wildfire season, as well as receive clean electricity at a predictable cost to mitigate the impact of utility rate increases.
We are also increasingly deploying our AlwaysON Microgrid technology on the East Coast, where there has been an increase in grid events as well. For example, our microgrids helped keep Home Depot stores open during the heat wave and storm in July 2019 that led to numerous power outages and plunged hundreds of thousands of New York and New Jersey electricity customers into darkness. We also announced an agreement with II-VI Incorporated to install a new microgrid at its Warren, New Jersey manufacturing facility and recently announced that we will be powering 40 Stop & Shop grocery stores with our AlwaysON Microgrid configuration in Massachusetts and New York, ensuring that their stores can better serve their local communities when needed most, such as during severe weather or winter storms.
Building Ships Powered by Solid Oxide Fuel Cells
Today, 80 percent of the world’s shipping fleet runs on heavy fuel oil, or bunker fuel. Replacing combustion-based power generation from bunker oil with electrochemical conversion of liquid natural gas (LNG) through fuel cells could have a profound impact on carbon emissions from marine transportation. As nations and ports develop their hydrogen infrastructure, fuel cell-powered ships could transition from natural gas fuel to hydrogen fuel and become zero-carbon and zero-smog emitters.
In September 2019, we announced a collaboration with Samsung Heavy Industries (SHI), a part of Samsung Group, to design and develop ships powered by Bloom Energy’s solid oxide fuel cell technology. Bloom Energy and SHI estimate that replacing oil-based power generation on large cargo ships, which require up to 100 megawatts of power per ship, could reduce annual greenhouse gas emissions from shipping by 45 percent. The modularity of Bloom Energy Servers makes them well suited to the space constraints of ships and SHI envisions Bloom Energy Servers displacing existing power generation sets, and therefore requiring no additional space, or even reducing the total space required for power generation.
New Collaboration to Turn Dairy Waste into Clean Energy in California
This year, we announced that we are working with California Bioenergy LLC (CalBio) to deploy a commercial solution for the conversion of dairy waste into renewable electricity. CalBio’s dairy digester technology combined with our solid oxide fuel cell technology will deliver an end-to-end solution for the capture of methane from cow manure to the generation of renewable electricity, which has been designed to power electric vehicles throughout the state.
Today, most California dairies are making plans to install digesters to capture biogas from their cow manure and are looking for a cleaner way to utilize this fuel. Biogas captured from cow manure contains approximately 65 percent methane, which has a 25 times greater impact on global warming than CO2 emissions, but is also a useful, renewable fuel.
There is an estimated 320 MW of economically viable dairy biogas in California. With significant deployments of dairy digesters occurring throughout the California dairy industry, there is need for an on-site power generation solution that uses the captured biogas to generate renewable electricity without combustion.
Bloom Refurbishes Ventilators to Help Combat COVID-19
In response to the COVID-19 pandemic and as the U.S. faced a critical shortage of ventilators, Bloom exercised its expertise and capabilities to begin refurbishing some of the thousands of out-of-service ventilators available in the U.S. Working with state agencies and customers – many of which are hospitals and medical device companies – to identify supplies of unused, out-of-service ventilators, Bloom repurposed some of its facilities in California and Delaware to refurbish the units to help COVID-19 patients experiencing critical respiratory failure.
Sustainability is a core valueThe health and well-being of our organization. It sits at the center ofpeople, our product’s value proposition,communities and extends into all aspects of our manufacturingplanet matter greatly to Bloom. While our commitment is firmly established, our formal processes, strategies and operations.governance concerning Environmental, Social and Governance (“ESG”) matters are in their early stages. We are actively engaged in a dialogue with investors around their interest in corporate responsibility and sustainability, including discussions concerning ESG performance.
We seekcontinue to minimizereview and update our environmental footprint with research and development designed to extend system operating life, while reducing consumption of new material in our Energy Servers. We’ve built recycling programs, which recover components for re-use at end-of-life,governance practices and have, dedicated facilitiesfor example, updated our Corporate Governance Guidelines to reflect our interest in candidates who express diversity across demographics such as gender, race, ethnic and national background, geography, age and sexual orientation. Further, in April 2021, we plan to publish our manufacturing locations in Delaware and California to inspect and dismantle components removed during scheduled maintenance. We have an audit program to identify opportunities for improvement with suppliers and also work to reduce packaging and minimize landfilledfirst Sustainability Report, which will be available on our website at www.bloomenergy.com. Please note that our 2021 Sustainability Report is not a part of our proxy solicitation materials.
In operation, Bloom’s Energy Servers uniquely address both the causesESG Management and consequences of climate change. Our projects lower carbon emissions by displacing less efficient grid alternatives. We improve air quality, often in vulnerable communities, by generating electricity without combustion, and our microgrid deployments provide critical resilience from grid instability, driven increasingly by climate-related extreme weather events. Our products achieve this all while using no water during operation and at very high power density, which optimizes land use.
We striveare evolving both Board oversight and management processes to providemore fully and formally incorporate ESG data and analysis into our stockholdersstrategy development, risk management and operations. Our sustainability governance structure involves numerous participants engaging in information-sharing and decision-making, capitalizing on the depth and breadth of expertise throughout Bloom.
Board Oversight of ESG
The Board, as a whole and through its committees, oversees our strategy, ESG efforts and risk management processes. All Board committees have active oversight of one or more key ESG components. In 2020, the Board delegated to the Nominating, Governance & Public Policy Committee (the “Nominating Committee”) oversight of sustainability matters, including climate-related risks and opportunities, in recognition of the importance of ESG matters to our business. The Audit Committee, with importantits oversight of risk management processes and financial matters, and the Compensation Committee, which oversees human capital matters, shares relevant information aboutand analysis with the Nominating Committee. Information and analysis from each of the committees are taken into account by the full Board in considering and providing guidance on our sustainability-related governancestrategy and performance. In an effort to provide comparable information, we have begun using the Sustainability Accounting Standards Board (SASB) Sustainable Industry Classification System (SAIC) Standardobjectives for the Fuel Cell industryshort-, medium- and long-term, including on climate and other sustainability-related strategy and objectives. Management provides the Nominating Committee with background on emerging ESG trends, relevant disclosure standards, and the importance of ESG management to guidethe business.
Executive Leadership, Management Governance Structure and ESG Strategy
Our CEO is responsible for approving our disclosure. Additionally, we’ve chosen to augmentESG goals and strategies based on the recommended reporting categoriesBoard’s guidance and directives, and for overseeing the execution of those strategies. Our senior-level executives are responsible for assisting the CEO in formulating our strategies and setting our priorities and objectives based on information and analysis from the Fuel Cell Industry Standard with disclosure across categoriesmanagement in each functional area. Our executive leadership team, which includes all of the SASB impact reporting framework. We have presented information regarding certainmembers of these categories below.
Environment
Greenhouse Gas (GHG) Emissions
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We report our greenhouse gas emissions utilizing the operational control boundary per the World Resource Institute’s GHG Protocol. We sell equipment in the US under several deal structures, oftenESG Committee, meets weekly with the involvement of a third party investor, but in all instances Bloom maintains operational controlCEO to engage around various risk management areas of the Energy Servers in the field. Emissions from the operationsbusiness. Through these formal and informal processes of manufactured products would oftenexecutive interactions, risks and opportunities can be Scope 3 to the manufacturer, but we have chosen the operational control boundary as the most transparent GHG accounting method, which ensures emissions responsibility is not shifted to financial institutions that might be less familiar with emissions accounting from their investment portfolios.
We have reported absolute Scope 1 emissions above, but each Bloom deployment also generates an implied carbon reduction as well. Establishing Bloom’s climate impact requires a comparison between its absolute emissionscontinuously raised, evaluated and the emissions from displaced alternatives. When a new, efficient distributed energy resource, such as Bloom Energy Server, is brought online, it reduces the amount of power required from energy sources that generate “on the margin” – meaning those units that are operating to meet the last unit of energy demand. Since Bloom’s carbon intensity is typically lower than the displaced (generally fossil powered) alternatives, the net impact is measurable emissions reductions.factored into ongoing strategy development.
In response2020, we formalized senior executive involvement related to climate and environmental, health and safety matters with the interest in Bloom’s emission impact inestablishment of a carbon constrained world, we publishednew management-level ESG Committee, which is intended to be our central source for ESG risk identification, data analysis and policy, program and strategy formulation. The ESG Committee provides a technical note onplatform for our leadership to understand, staff, resource and manage ESG-related risks and opportunities. The ESG Committee is comprised of the topic in Q4 2019. The note, titled How Bloom Reduces Emissions, highlighted approximately 2.33 million metric tonnessenior-most leaders of CO2 reduction globally since we began scaled commercial deployment in 2011 through 2019, equivalent to 18,900 acreseach of forest preservation or taking nearly one half of one million cars off the road for a year since 2011.
Air Qualityour functional areas, and its initial responsibilities include:
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Formulating and recommending policies and practices that align with our strategies, and advising on how ESG matters may impact other company policies and practices; | |
Overseeing reporting and disclosures regarding ESG matters; and | |
Advising the CEO and the Board of |
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Table of ContentsLbs.100% Reduction vs. Grid2019 Domestic SO2 Reduction
Based on comparison to EPA eGRID non-baseload emissions rates inclusive of line losses as a proxy for marginal emissions
ESG at Bloom |
The California Air Resources Board has certified Bloom Energy Servers asBelow is a Distributed Generation Technology due to their air quality emissions profile. This distinction is given to only the cleanest electricity generation technologies in California. As a partgraphical illustration of Bloom’s certification process with the California Air Resources Board to become a Distributed Generation technology, Bloom went through third-party validated testing of its ES5 Systems to determine that its criteria pollutant emissions were below the certified limits.our ESG management and oversight structure.
Bloom creates air quality benefit in the same way we create emissions benefit, through the displacement of fossil combustion power generators on the margin. In the How Bloom Reduces Emissions technical note, we modeled substantial fleet level historical criteria pollutant reductions (since we began scaled commercial deployment in 2011), including 5.05 million pounds of sulfur oxides (SOx), and 8.9 million lbs. of nitrogen oxides (NOx), equivalent to preventing approximately 5,200 lost work days and more than 30,000 days of restricted activity due to illness.
The health and environmental impacts of combustion related pollutants are both very significant and readily quantifiable. Calculations of the economic and health benefits associated with reducing particulate emissions have been found to exceed the economic and health benefits of reducing carbon emissions on a per ton basis.
Water & Wastewater Management
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Compared to U.S. thermo-electric power generation (excluding hydro) citied by the U.S. Geological Survey
ESG at Bloom |
Bloom systems withdraw water only during start-up and if the system trips and needs to restart. Otherwise Energy Servers require no water to be used during operation. Conversely, thermal power plants require significant amounts of water for cooling. In fact, the number one use of water in the U.S. is for cooling power plants. To produce one megawatt per hour for a year, thermoelectric power generation for the U.S. grid withdraws approximately 156 million gallons of water more than our platform. Since 2011, Bloom has saved 202 billion gallons of water, equal to more than 300,000 Olympic swimming pools.Our Employees
Approximately 60 percent of Bloom Energy Servers are deployed in California, where water stress is particularly acute. Increasingly lighter snowpack combined with California’s natural climate vulnerability will continue to stress water supply in a warming climate. Rising temperatures will increase demand for irrigation, placing a significant premium on reduced water consumption for industrial applications. Bloom’s Energy Servers avoid substantial water consumption from the industrial sectorPromoting Diversity, Equity and can benefit local watersheds and avoid thermal pollution into critical water sources.Inclusion
Business Model Innovation
2019 Average energy efficiency of fuel cells as thermal efficiency, by product applicationSince our inception, we have supported diversity, equity and technology type
Product Efficiency
Bloom’s Remote Monitoring and Control Center (RMCC) in San Jose monitorsinclusion. From our global installed fleet of Energy Servers and continuously gathers and analyzes operating data down to the individual stack level to evaluate health and optimize performance. For each Power Module (PM), we monitor 1,200 variables for a 300 kW Energy Server. We also have a mirror site in Mumbai, India, that provides both redundancy and resiliency of our RMCC operations as well as 24/7 hour coverage of our fleet.
Our fuel cells have a lifecycle similar to that of an aircraft engine. They start their lives as newly manufactured stacks in a Power Module and are installed at a customer site. They generate power for a certain period of time and, at some point, our RMCC determines that the PMs need to be removed and refurbished. Once removed, the PMs are sent to our Repair and Overhaul Center, where we harvest the majority of the materials to refurbish the unit and return it to the field for continued generation of power.
We have published a more detailed technical note on stack life titled A Primer to Understanding Fuel Cell Power Module Life available on the Bloom website.
Product End of Life Management
Bloom Energy Servers are designed with full product life cycle sustainability in mind, and we maximize the reuse of components within our systems. End-of-life units are returnedvisionary CEO, KR Sridhar, to our manufacturing operation where components are refurbished and reused in the latest generationplant employees, a large percentage of our Energy Serverspopulation is from underrepresented communities. 44% of the Board is composed of ethnic minorities, including a female African-American member. 33% of our executive management team is composed of ethnic minorities and excess materials40% are recycled.women. We recognize that diverse leadership translates to a diversity of experiences, viewpoints and, ultimately, more informed decisions. Our mission of providing clean, reliable and affordable energy to everyone is achieved only when every voice is heard and valued.
As a function of an approximately 30,000 lb. Bloom Energy Server, the weight of components that go to the landfill without a recycling or refurbishment stream comprises approximately 510 lbs., or less than approximately 2 percent of the total server weight. Typical components that go directly to landfill without chance for refurbishment or recycling are sealants, adhesives, gaskets, filters, tape (electrical, ceramic), and certain plastics.
Materials Sourcing
Bloom is committed to the creation and maintenance of a responsible supply chain and, as a newly public company, plans to file its first conflict minerals report with the SEC in 2020. We are focused on preventing any irresponsible smelting or refining activity of 3TG materials (tantalum, tin, tungsten, and gold) in our supply chain. Moving forward, we are committed to evolving our conflict minerals program beyond compliance.
Additionally, we expect the Bloom employees who interact with suppliers to adhere to the standards set out in the Global Business Partner Standards, which include specific guidance on supplier related anti-corruption practices, diligence, documentation, and legal circumvention.
Human and Social Capital
Employee Health & Safety
Bloom’s management is fully committed to providing a safe working environment. We believe in the principle of ‘safety first’ and that all incidents are preventable. We foster an environment with ongoing integration of safety into all activities to eliminate illness and injuries. To achieve this, the Company has established well-defined safety, health and environmental policies and procedures and ongoing training. We focus on prevention programs and driving continuous improvement via Design for Safety initiatives during development, interactive training programs with all employees, hands-on audits, employee engagement through monthly team meetings, and relentless focus on deep dive investigations ensuring that we learn and improve from incidents.
Employee Engagement, Diversity & Inclusion
The Company is focused on building an enduring, world-changing business, and is also committed to creating a world-class workforce. We are committed to full-spectrumcontinuing to foster the diversity inclusive of gender, ethnicity, race, sexual orientation, age, ability, veteran status, religion, culture, background,our workforce, and experiences.
Bloom Energy maintains an affirmative action programare actively developing programs and strategies to support this commitment. We recently initiated a Talent Acquisition Strategy, the goal of which is to identify and attract a slate of candidates from underrepresented groups through increasing investments in accordanceadvertising and outreach. We have established a University Program in which we partner with applicable laws, regulations, executive orders,university diversity groups including the Society of Women Engineers, Society of Hispanic Engineers and government directives. Bloom isNational Society of Black Engineers, to name a few. Additionally, we are partnering with several historically Black colleges and universities to hire interns and employees. We are committed to being a military-friendly employer and we were recognizedhave partnered with several veteran organizations and agencies to identify and hire talent. Currently, our veteran population represents 9.3% of our total U.S. employee population. Further, in recognition of our military hiring efforts, in 2018 withwe received the Pro Patria Award byfrom the Employer Support of the Guarded and Reserve (ESGR)(“ESGR”). This award recognizes employers who have demonstrated the greatest support to Guard and Reserve employees through their leadership and practices, and is the highest-level award that may be bestowed by an ESGR State Committee.
Community RelationsSupporting Employee Well-Being
BloomCompensation and Benefits
We provide our employees with robust total compensation packages that include competitive salaries, bonuses and opportunities for equity ownership. We review and enhance the benefits portion of the package periodically, seeking to improve our competitiveness across health and income replacement programs. For example, we recently introduced a new program to facilitate access to mental health care, in terms of cost and ease of access.
Employee Health and COVID-19 Safety Measures
We have been going above and beyond to protect employees during the COVID-19 pandemic. Employee safety is our top priority. Among other things, we are providing daily temperature checks and health checks at entrances; cloth or surgical masks to all workers; modified work areas to ensure social distancing; regular COVID-19 testing; frequent cleaning and disinfecting of all areas; closed or modified breakrooms to reduce risk of transmission; and state of the art air filtration systems that have been FDA-verified to kill the COVID-19 virus. We have also established rigorous quarantine protocols. As evidence of these efforts, our workplace positivity rate is far lower than those of the counties in which we operate.
Employee Safety and Training
Our management seeks to provide a safe working environment. We believe in the principle ‘safety first’ and that most incidents are preventable. We strive to foster an environment that integrates safety throughout our operations to reduce or eliminate illness and injuries among our workforce.
To support this, we have established well-defined safety, health and environmental policies and procedures and offer ongoing training. We have focused on supportingprevention programs and driving continuous improvement via ‘Design for Safety’ initiatives during product development, interactive training programs with all employees, hands-on audits, employee engagement through monthly team meetings, and relentless focus on deep-dive investigations ensuring we learn and improve from incidents that occur.
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ESG at Bloom |
Keeping Jobs Local - While Improving the vulnerable populations often impacted by centralized combustion power generation. Early collaborations with environmental justice groups are underway, and Bloom will continue to support community access to affordable, reliable, and resilient infrastructure.Communities in Which We Operate
Bloom’sOur technology has a global reach, but at our core, we are all about improving and expanding operations nationally and serving our local communities. In Delaware, where we have our Newark manufacturing facility, we invested $6.6 million last year alone to prepare for future growth. At the height of the pandemic, we added 57 new roles in Delaware, bringing the employee number to 397. We invested in the Newark community by building a training facility and entering into a partnership with the Delaware Office of Work-Based Learning at Delaware Tech to bolster workforce development.
Additionally, our products are providing clean energy solutions to the residents of Delaware and helping the state achieve new standards for clean energy. The Delaware Division of Energy Servers can formand Climate has put in place limits on the basisamount of resilient microgrids, whichharmful emissions generated by the local electricity industry. Utility companies like the Delmarva Power Plant, encouraged by the Renewable Energy Portfolio Standards Act (”REPSA”), have had to increase their renewable and alternative energy sources to power local communities. Our Newark manufacturing facility’s collaboration with the capability to separate themselves fromDelmarva Power Plant helps power thousands of homes with clean energy produced by fuel cells made by Delawareans.
Our fuel cell technology is helping the gridDelmarva Power Plant achieve reduced emissions and carry critical load during an outage,meet the frequency, duration and severityrequired 25% of which increase every year.alternative energy sources mandated by REPSA. We have deployedsucceeded in decreasing CO2emissions by 50% and nearly eliminated smog-forming particulate emissions. More importantly, we are providing clean energy to more than 89 microgrids to date globally and our systems have powered our customers through 1,200 power outages since 2018. We have made community micogrids a priority, which will provide energy services to critical infrastructure during an emergency. They also prevent22,000 homes in the need for backup diesel generators, which emit both carbon and criteria pollutants into surrounding communities.state.
Access & AffordabilitySupporting Our Communities
Bloom’sOur mission is to make clean, reliable andpower affordable energy for everyone in the world. We are focused on scaling manufacturing capabilityworld because we know that allows our communities to be safe, prosperous, healthy and volumeresilient. Community impact is what motivates us every day to continuously lower our service costprovide the highest quality products and in turn, lower the delivered cost of electricity. Our hardware costs have dropped by approximately 27 percent each time our cumulative production volume has doubled, which compares favorably to other energy technologies such as wind and solar.solutions possible.
The latest generation Energy Server delivers five times the electricity outputAssisting Vulnerable Communities
2020 was a difficult year for many of the first generationcommunities we serve, but we responded by being adaptable, flexible and innovative in a constant footprint. The next generation now under development will deliver 50 percent more power than the latest generationcreating solutions in the same footprint,face of emergencies. Our rapid deployment of engineering and we expectmanufacturing resources has aided vulnerable communities in multiple ways during the COVID-19 pandemic as well as extreme weather events.
Ventilator Refurbishment. In March 2020, when the country came to continue this trend of power density improvementsa standstill in the future. Asfight against the spread of COVID-19, we voluntarily launched an initiative to refurbish ventilators at our power density increases, total land useSan Jose, California and relatedNewark, Delaware facilities. We knew that we could put our manufacturing, engineering and operational expertise to work and successfully refurbished more than 1,300 ventilators that were supplied to state emergency management departments and healthcare facilities in California, Delaware and Pennsylvania.
Rapid Deploy Microgrids. When a field hospital was set up in Sacramento, California to expand the state’s hospital capacity and house COVID-19 patients, we and our installation and material costs are reduced, thereby loweringutility project partners were able to deploy a microgrid in three days. The Bloom microgrid provided essential reliable, AlwaysON power to serve the costcritical medical needs of electricity.Californians. Similar microgrids were rapidly deployed to a hospital in Louisiana and a hospital system in Vallejo, California, providing vital power to a field hospital set up to accommodate patient overflow. Importantly, these facilities could not have utilized traditional temporary diesel power solutions due to the impact on patient respiratory health, reinforcing the importance of our products’ air quality impacts on vulnerable populations every day.
The fuel costs to produce power go down as the amount of fuel required to produce the power is reduced. The higher the efficiency of an Energy Server, the lower the fuel use and associated fuel cost. The beginning-of-life efficiency percentagesRedirecting Excess Power. On top of the Bloom Energy Servers have increasedchallenges with COVID-19, California continues to deal with grid instability from the high-40sclimate-driven extreme weather as well as wildfires. But 2020 saw blackouts due to record heat as well. Our fuel cell technology at approximately 500 sites has been generating 265 megawatts of clean and reliable power in the first generationstate. Our customers agreed to export the excess power generated at their sites to the 60sgrid to provide additional generation capacity. Thanks to their generosity, we managed to power nearly 15,000 homes in communities facing the current generation. We expectadverse effects of the efficiency to improve further in succeeding generations.pandemic.
Mobile COVID-19 Testing. To help keep our employees and neighbors safe, we partnered with El Camino Health to set up a mobile COVID-19 testing facility for Bay Area organizations, businesses and schools. Using the University of Illinois’ innovative Shield T3 COVID testing system, the mobile unit offers rapid, accurate and inexpensive testing, providing critically needed tests for area businesses, schools and disadvantaged communities. One in six tests purchased by us and participating organizations was used to help the Valley Medical Center Foundation purchase a mobile medical bus to vaccinate homebound seniors, people with disabilities, farmers and others who might not be easily served.
2021 PROXY STATEMENT | 17 |
This proxy statement (the “Proxy Statement”) is being furnished to the stockholders of Bloom Energy Corporation, a Delaware corporation (the “Company”, “Bloom”, “we”, “us” or “our”), in connection with the solicitation of proxies by our Board of Directors (the “Board of Directors” or the “Board”) for use at our 2020 annual meeting of stockholders (the “2020 Annual Meeting”) to be held at the Hilton Santa Clara, 4949 Great America Parkway, Santa Clara, California 95054 on Thursday, May 12, 2020, at 9:00 a.m. PT, local time and at any and all adjournments, postponements or continuations of the meeting.
Questions and Answers about this Proxy Material and Voting
Internet AvailabilityTable of Proxy Materials
This year, we will again be using the “Notice and Access” method of providing proxy materials to stockholders via the Internet. We believe that this process provides stockholders with a convenient and quick way to access the proxy materials and vote, while allowing us to conserve natural resources and reduce the costs of printing and distributing the proxy materials. On or about April 2, 2020, we will mail to most of our stockholders a Notice of Internet Availability of Proxy Materials (the “Notice”) containing instructions on how to access our proxy materials, including our Proxy Statement and Annual Report on Form 10-K for the year ended December 31, 2019. The Notice also provides instructions on how to vote using the Internet or by telephone and includes instructions on how to request a paper copy of the proxy materials by mail.
At the close of business on the Record Date, there were 90,231,067 shares of the Company’s Class A common stock and 34,872,888 shares of the Company’s Class B common stock outstanding and entitled to vote. The Class A common stock and the Class B common stock are collectively referred to as the Common Stock in this Proxy Statement. The Proxy Statement and Annual Report on Form 10-K are available at www.proxyvote.com. We will provide to any stockholder without charge, upon written or oral request, a copy of our Proxy Statement and Annual Report on Form 10-K (without exhibits). Requests should be directed to Bloom Energy Corporation, 4353 North First Street, San Jose, California 95134, Attention: Corporate Secretary, or by calling (408) 543-1500.
Who can vote at the 2020 Annual Meeting?
Only stockholders of record at the close of business on March 16, 2020 (the “Record Date”) will be entitled to vote at the 2020 Annual Meeting. A list of stockholders entitled to vote at the meeting will be available for inspection at 4353 North First Street, San Jose, California 95134 between the hours of 9:00 a.m. and 5:00 p.m. local time, for at least ten days prior to the meeting and will also be available for inspection at the meeting.
How do I attend the 2020 Annual Meeting and vote in person?
Only stockholders of record on the close of business on the Record Date may attend the 2020 Annual Meeting. In order to be admitted to the meeting, you should be prepared to present valid photo identification, such as a driver’s license or passport, and proof of stock ownership as of the Record Date. If you hold your shares through a broker, bank or other nominee, you will need to bring proof of beneficial ownership as of the Record Date, such as your most recent account statement reflecting your Common Stock ownership prior to the Record Date, a copy of the voting instruction card provided by your broker, bank, or other nominee, or similar evidence of ownership. If you wish to vote in person, we will provide you with a ballot to use to vote at the 2020 Annual Meeting. If you are a beneficial owner and hold shares of Common Stock through a broker, bank or other nominee, you may not vote your shares of Common Stock in person at the 2020 Annual Meeting unless you obtain a legal proxy from the broker, bank or other nominee that holds your shares of Common Stock giving you the right to vote the shares of Common Stock at the 2020 Annual Meeting.
Even if you plan to attend the 2020 Annual Meeting, we recommend that you submit your proxy or voting instructions as described in the Proxy Statement so that your vote will be counted if you later decide not to attend the 2020 Annual Meeting. You may still attend the meeting and vote in person even if you have already voted by proxy.
How many votes do I have?
You have one vote for each share of Class A common stock and ten votes for each share of Class B common stock you owned as of the close of business on the Record Date. The holders of Class A common stock and Class B common stock will vote together on each matter presented at the 2020 Annual Meeting.
How does the Company’s dual class structure affect me?
Because of the ten-to-one voting ratio between our Class B and Class A common stock, the holders of our Class B common stock collectively control a majority of the combined voting power of our Common Stock.
The Class B common stock is convertible into Class A common stock at any time at the option of the holder. In addition, the Class B common stock will automatically convert into Class A common stock immediately prior to the close of business on the fifth anniversary of our initial public offering (July 2023), and may automatically convert earlier than such date upon certain circumstances as described in our Certificate of Incorporation.
What am I voting on?
You are being asked to vote on the following:
How does the Board of Directors recommend I vote on these proposals?
The Company’s Board recommends that you vote “FOR” the election of Mary K. Bush, Jeffrey Immelt and Eddy Zervigon as Class II directors and “FOR” the ratification of the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2020.
How do I vote my shares?
Stockholder of Record: Shares Registered in Your Name
If on March 16, 2020 your shares were registered directly in your name with our transfer agent, American Stock Transfer & Trust, then you are considered the stockholder of record with respect to those shares. As a stockholder of record, you may vote in person at the 2020 Annual Meeting, or vote by proxy over the telephone, through the Internet, or by using a proxy card that you may request or that we may elect to deliver to you at a later time. The method you use to vote will not limit your right to vote at the 2020 Annual Meeting if you decide to attend in person. Whether or not you plan to attend the Annual Meeting, we urge you to submit your proxy in advance. You may still attend the meeting and vote in person even if you have already voted by proxy.
To vote through the Internet: Go to www.proxyvote.com to complete an electronic proxy card. You will be asked to provide the control number from your Notice. Your Internet vote must be received by 11:59 p.m. Eastern Time on May 11, 2020, to be counted.
To vote by telephone: Dial toll-free 1-800-690-6903 using a touch-tone phone and follow the recorded instructions. You will be asked to provide the control number from the Notice. Your telephone vote must be received by 11:59 p.m. Eastern Time on May 11, 2020, to be counted.
To vote by mail: If you received your proxy materials via the U.S. mail, you may complete, sign and return the accompanying proxy card in the postage-paid envelope provided. If you return your signed proxy card to us and we receive it before the 2020 Annual Meeting, we will vote your shares as you direct.
To vote in person: Attend the 2020 Annual Meeting at the Hilton Santa Clara, 4949 Great America Parkway, Santa Clara, California 95054, and we will give you a ballot when you arrive.
Beneficial Owner: Shares Registered in the Name of Broker or Bank
If on March 16, 2020 your shares were held in an account with a brokerage firm, bank or other nominee, then you are the beneficial owner of the shares held in street name. As a beneficial owner, you have the right to direct your nominee how to vote the shares held in your account. However, the organization that holds your shares is considered the stockholder of record for purposes of voting at the meeting. Because you are not the stockholder of record, you may not vote your shares at the meeting unless you request and obtain a valid proxy from the organization that holds your shares giving you the right to vote the shares at the meeting. You should have received a voting instruction card and voting instructions with these proxy materials from your brokerage firm, bank or other agent rather than from us. Simply complete and mail the voting instruction card to ensure that your vote is counted. Internet or telephonic voting may also be available; however, that will depend on the voting process of your broker, bank or other nominee. Please see your voting instruction card for further details.
How will my shares be voted if I return a blank proxy card?
If you return a signed and dated proxy card or otherwise submit a proxy without indicating voting selections, your shares will be voted, as applicable, “FOR” the election of each Class II director nominee and “FOR” the ratification of the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2020. If any other matter is properly presented at the meeting, your proxyholder (one of the individuals named on your proxy card) will vote your shares using his or her best judgment.
How will my shares be voted if I do not provide my broker or bank with voting instructions, and what is a “broker non-vote”?
If you are a beneficial owner of shares held in street name and you do not instruct your broker, bank, or other nominee how to vote your shares, your broker, bank, or other nominee may still be able to vote your shares in its discretion on certain matters. Brokers, banks, and other securities intermediaries may use their discretion to vote your “uninstructed” shares with respect to matters considered to be “routine,” but not with respect to “non-routine” matters. In this regard, Proposal 1 is considered to be “non-routine,” meaning that your broker may not vote your shares on that proposal in the absence of your voting instructions. Proposal 2 is considered to be a “routine” matter, meaning that if you do not return voting instructions to your broker by its deadline, your shares may be voted by your broker in its discretion on Proposal 2. If a broker, bank or other nominee exercises their discretionary voting authority on Proposal 2, such shares will be considered present at the annual meeting for quorum purposes, counted in the voting results for Proposal 2 and a broker non-vote will occur as to Proposal 1.
If you are a beneficial owner of shares held in street name, in order to ensure your shares are voted in the way you would prefer, you must provide voting instructions to your broker, bank, or other nominee by the deadline provided in the materials you receive from your broker, bank, or other nominee.
How many votes are needed to approve the proposal?
Proposal 1: The election of directors requires a plurality vote of the shares of our Common Stock present in person or by proxy at the 2020 Annual Meeting. “Plurality” means that the nominees who receive the largest number of votes cast “for” such nominee are elected as directors. As a result, with respect to the election of the three Class II directors, the three nominees receiving the most “FOR” votes (among votes properly cast in person or by proxy) will be elected. “Withhold” votes, abstentions and broker non-votes will have no effect.
Proposal 2: The ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the year ending December 31, 2020, requires the affirmative vote of the holders of a majority of the voting power of the shares of stock entitled to vote that are present in person or represented by proxy at the meeting and are voted for or against the proposal. Abstentions will have no effect.
Who is making this solicitation?
The Company’s Board is soliciting these proxies and the cost of such solicitation will be borne by the Company, including the charges and expenses of persons holding shares in their name as nominee incurred in connection with forwarding proxy materials to the beneficial owners of such shares. In addition to the use of the mail, proxies may be solicited by our officers, directors and employees in person, by telephone or by email. Those individuals will not be additionally compensated for the solicitation but may be reimbursed for reasonable out-of-pocket expenses incurred in connection with the solicitation.
What is the quorum requirement?
A quorum of stockholders is necessary to hold a valid 2020 Annual Meeting. Our Bylaws provide that a quorum will be present if a majority of the voting power of all shares outstanding on the Record Date are represented at the 2020 Annual Meeting, present in person or by proxy. Your shares will be counted toward the quorum only if you submit a valid proxy or vote at the 2020 Annual Meeting, or if you are a beneficial owner of shares held in street name, if you submit your voting instructions or if your bank, broker or other nominee exercise its voting discretion over such shares. Abstentions and broker non-votes will be counted as shares present for the purposes of determining the presence of a quorum.
What does it mean if I receive more than one proxy card?
If you receive more than one proxy card, your shares are registered in more than one name or are registered in different accounts. Please complete, sign and return each proxy card to ensure that all of your shares are voted.
Can I change my vote or revoke my proxy?
Stockholder of Record: Shares Registered in Your Name
Yes. You can revoke your proxy at any time before the final vote at the 2020 Annual Meeting. You may revoke your proxy in any one of following ways:
Your most recently submitted proxy card or telephone or internet proxy is the one that is counted.
Beneficial Owner: Shares Registered in the Name of Broker or Bank
If your shares are held by your broker, bank, or other nominee, you may change your vote by submitting new voting instructions to your bank, broker or other nominee. Please note that if your shares are held of record by a bank, broker or other nominee and you decide to attend and vote at our annual meeting, your vote in person at the meeting will not be effective unless you present a legal proxy issued in your name from the record holder (your bank, broker or other nominee).
How can I find out the results of the voting at the 2020 Annual Meeting?
We intend to announce preliminary voting results at the 2020 Annual Meeting and publish final results in a Current Report on Form 8-K to be filed with the Securities and Exchange Commission (“SEC”) within four business days of the 2020 Annual Meeting.
What is “householding” and how does it affect me?
We have adopted a procedure approved by the SEC called “householding.” Under this procedure, we send only one proxy statement and one annual report to eligible stockholders who share a single address, unless we have received instructions to the contrary from any stockholder at that address. This practice is designed to reduce our printing and postage costs. Stockholders who participate in householding will continue to receive separate proxy cards. We do not use householding for any other stockholder mailings.
If you share an address with another stockholder and receive only one set of proxy materials but would like to request a separate copy of these materials, please contact our mailing agent, Broadridge, by calling 1-800-540-7095 or by writing to Broadridge, Householding Department, 51 Mercedes Way, Edgewood, New York, 11717. Broadridge is acting as our mailing agent and vote tabulator and is not soliciting proxies on our behalf. Similarly, you may also contact Broadridge if you receive multiple copies of the proxy materials and would prefer to receive a single copy in the future. If you own shares through a bank, broker, or other nominee, you should contact the nominee concerning householding procedures.
ContentsCorporate Governance
Changes to Our Corporate Governance
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We continue to consider additional changes to our corporate governance, including how best to promote diversity on our Board and to enhance oversight of the company’s environmental, social and governance undertakings, and how to further align our directors’ interest with our stockholders’ interest, including consideration of stock ownership requirements and other means.
Transition from Emerging Growth Company Status
As a company with less than $1.07 billion in revenue during our last completed fiscal year, we continue to qualify as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. We will remain an emerging growth company, or EGC, until the earliest to occur of: (1) the end of the first fiscal year in which our annual gross revenue is $1.07 billion or more; (2) the end of the first fiscal year in which we are deemed to be a “large accelerated filer,” as defined in the Securities Exchange Act of 1934, as amended (the “Exchange Act”); (3) the date on which we have, during the previous three-year period, issued more than $1.0 billion in non-convertible debt securities; and (4) the end of our 2023 fiscal year, during which the fifth anniversary of our IPO occurs. We may choose to take advantage of some, but not all, of the available benefits under the JOBS Act. We currently intend to take advantage of the exemptions discussed above until we no longer qualify as an EGC. We plan to provide all disclosures required for non-EGCs as soon as we transition out of EGC status.
Our Amended and Restated Bylaws (the “Bylaws”) provide that the Board is divided into three classes of directors with staggered three-year terms. As a result, only one class of directors is elected at each annual meeting of our stockholders, with the other classes continuing for the remainder of their respective three-year terms. Each director’s term will continue until the election and qualification of his or her successor, or his or her earlier death, resignation or removal.
The Board presently has nine members. The Board is currently comprised of three Class I directors, three Class II directors and three Class III directors. The authorized number of directors may be changed by resolution of the Board. Stockholders last elected the Class I directors, Messrs. Powell, Sandell, and Sridhar, at the 2019 Annual Meeting of Stockholders and the Class II directors, Messrs. Immelt and Zervigon and Ms. Bush, at the 2020 Annual Meeting of Stockholders.
Class III directors Dr. Boskin, Messrs. Chambers and Doerr are standing for election to the Board at this meeting. The Board appointed Dr. Boskin in November 2019, Mr. Chambers in August 2018 and Mr. Doerr in May 2002, and each was recommended to the Board by the Nominating Committee. The nominees’ and other directors’ biographies are available beginning on page 21 of this Proxy Statement.
Each nominee has consented to be named a nominee in the Proxy Statement and to continue to serve as a director, if elected. If any nominee becomes unavailable to serve for any reason before the election, which is not anticipated, your proxy authorizes us to vote for another person nominated by the Board or the Board may reduce its size. There are no arrangements or understandings between any director and any other person pursuant to which he or she is or was to be selected as a director. There are no family relationships among our directors or executive officers.
Vote Required
The election of directors will be made by a plurality of votes cast at the 2021 Annual Meeting. That means the three nominees receiving the highest number of votes will be elected. Because directors need only be elected by a plurality of the vote in an uncontested election, broker non-votes and withhold votes will not affect whether any particular nominee has received sufficient votes to be elected in such cases.
Our nominees have considerable professional and business experience. The recommendation of the Board is based on its carefully considered judgment that the qualifications and experience of our nominees make them well qualified to serve on the Board and give the Board as a group the appropriate skills to exercise its oversight responsibilities. For each of the three director nominees standing for election as well as for the remainder of the Board, the following pages sets forth certain biographical information, including a description of their principal occupation, business experience, and the primary qualifications, attributes and skills that the Nominating Committee considered in recommending the director nominees.
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Corporate Governance |
Board and Governance Highlights
Board Key Facts
Director Skills and ExperienceMembership Criteria
Ensuring that the Board of Directors is composed of directors who possess highly relevant skills, professional experience and backgrounds, bring diverse viewpoints and perspectives and effectively represent the long-term interests of stockholders, is a top priority of the Board and the Nominating Corporate Governance and Public Policy Committee (which we refer to herein as the “Nominating Committee”).
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Our Board at a Glance
Name and Primary Occupation | Class | Age | Director Since | Committees | Other Current Public Company Boards | |||
AC | CC | N/GC | ||||||
Mary K. Bush IND President of Bush International, LLC | II | 71 | 2017 | ●* | 4(1) | |||
Jeffrey Immelt IND Venture Partner at New Enterprise Associates, Inc. | II | 64 | 2019 | ●* | 1 | |||
Eddy Zervigon IND Special Advisor at Riverside Management Group | II | 51 | 2007 | ●* | ● | 1 | ||
Peter Teti(2) IND Senior Vice President, Private | II | 52 | 2015 | 0 | ||||
John T. Chambers IND Founder and Chief Executive Officer at JC2 Ventures | III | 70 | 2018 | ● | 0 | |||
L. John Doerr IND General Partner of Kleiner Perkins | III | 68 | 2002 | ● | 2 | |||
Michael Boskin IND Professor of Economics and Hoover Institution Senior Fellow, Stanford University | III | 74 | 2019 | ● | ● | 1 | ||
General Colin L. Powell Former U.S. Secretary of State | I | 82 | 2009 | 1 | ||||
Scott Sandell IND Managing General Partner at New Enterprise Associates, Inc. | I | 55 | 2003 | ● | ● | 0 | ||
KR Sridhar Founder, Chairman and Chief Executive Officer of Bloom Energy | I | 59 | 2002 | 0 | ||||
Process of Selecting Directors
Selection Process
The Nominating Committee is responsible for identifying, evaluating and recommending candidates to the Board of Directors for Board membership. The Nominating Committee may use outside consultants to assist in identifying candidates. When formulating its Board membership recommendations, the Nominating Committee considers advice and recommendations from stockholders, management, and others as it deems appropriate. The Nominating Committee considers candidates for the Board recommended by stockholders using the same criteria in evaluating the candidate as it would any other Board nominee candidate.
The Nominating Committee also evaluates whether an incumbent director should be nominated for re-election to the Board upon expiration of such director’s term, based upon factors established for new director candidates as well as the incumbent director’s qualifications, performance as a Board member, and such other factors as the Nominating Committee deems appropriate.
Board Membership CriteriaCommittee.
Nominees for director are selected on the basis of, among other things, independence, integrity, ethnic and gender diversity, skills, financial and other expertise, breadth of experience, knowledge about our business or industry, willingness and ability to devote adequate time and effort to Board of Directors responsibilities in the context of the existing composition, other areas that are expected to contribute to the Board of Directors’Board’s overall effectiveness and the needs of the Board of Directors and its committees. Given our limited operating history, as we continue to grow and evolve our strategy, we continue to refresh the relevant skill sets and experience desired in our Board members.
In evaluating potential candidates for the Board, the Nominating Committee considers the following factors, which are set forth in our Corporate Governance Guidelines:
a majority of directors on the Board should be independent |
• | candidates should be capable of working in a collegial manner with persons of different educational, business, and cultural backgrounds, and should possess skills and expertise that complement the attributes of the existing directors; |
• | candidates should represent a diversity of viewpoints, backgrounds, experiences, and other |
• | candidates should demonstrate notable or significant achievement and possess senior-level business experience that would benefit |
candidates |
• | candidates |
• | candidates for the Audit Committee and the Compensation Committee should have the enhanced independence and financial literacy and expertise that may be required under law, rules, regulations and listing standards of the |
• | candidates |
candidates |
Director Tenure, Board Refreshment and Diversity
We believe it is in the best interests of the Company and our stockholders to maintain a mix of longer-tenured experienced directors and newer directors with fresh perspectives. In furtherance of this objective, the Board appointed Dr. Boskin and Mr. Immelt to the Board in November 2019.
We do not impose director tenure limits or a mandatory retirement age. The Board believes that our longer-tenured directors have a unique perspective on the challenges we face. Accordingly, while director tenure is taken into consideration when making nomination decisions, the Board believes that imposing limits on director tenure would deprive the Board of the valuable contributions of its most experienced members.
The Board and the Nominating Committee value diversity of backgrounds, experience, perspectives and leadership in different fields when identifying nominees. Presently, 30% of our Board members are women, come from a diverse background, or both, and as of December 31, 2019, we were in compliance with new California requirements regarding the number of women who serve on our Board.
Stockholder Nominations
Any stockholder may nominate a person for election as a director by complying with the procedures set forth in our Bylaws or may recommend a director pursuant to SEC Rule 14a-8.the Bylaws. See the section later in this Proxy Statement captioned “Stockholderentitled “Stockholder Proposals and Nominations.”
Process of Selecting Directors
The Nominating Committee is responsible for identifying, evaluating and recommending candidates to the Board for Board membership. The Nominating Committee works very closely with the Chairman and other members of the Board in the identification and evaluation process. The Nominating Committee may also use outside consultants to assist in identifying candidates. The Bylaws provide that the size of the Board is set by the Board, reflecting the Board’s current view of its optimal size. When formulating its Board membership recommendations, the Nominating Committee considers advice and recommendations from stockholders, management, and others as it deems appropriate. The Nominating Committee considers candidates for the Board recommended by stockholders using the same criteria in evaluating the candidate as it would any other Board nominee candidate.
The Nominating Committee also evaluates whether an incumbent director should be nominated for re-election to the Board upon expiration of such director’s term, based upon factors established for new director candidates, as well as:
• | the extent to which the director’s judgment, skills, qualifications and experience (including that gained due to tenure on the Board) continue to contribute to the success of the Board; |
• | feedback from the annual Board evaluation; |
• | attendance and participation at, and preparation for, Board and committee meetings; |
• | independence; |
• | outside board and other affiliations, including any actual or perceived conflicts of interest; and |
• | such other factors as the Nominating Committee deems appropriate. |
2021 PROXY STATEMENT | 19 |
Corporate Governance |
Director Tenure, Board Refreshment and Diversity
We believe it is in the best interests of Bloom and our stockholders to maintain a mix of longer-tenured, experienced directors and institutional knowledge and newer directors with fresh perspectives. In furtherance of this objective, the Board appointed two new directors to the Board as recently as November 2019, Dr. Boskin and Mr. Immelt.
We do not impose director tenure limits or a mandatory retirement age. The Board believes that our longer-tenured directors with their deep institutional knowledge have a unique perspective, bring critical skills to the Board and are well-positioned to guide us as we continue to grow and evolve. The Board believes that longer-tenured directors have a better understanding of Bloom and its evolution, and are better able to leverage those learnings so Bloom can continue to grow and evolve. Accordingly, while director tenure is taken into consideration when making nomination decisions, the Board believes that imposing limits on director tenure would deprive the Board of the valuable contributions of its most experienced members.
If each director nominee is elected to the Board after the 2021 Annual Meeting, our non-employee directors will have served an average of 8.4 years. Given that Bloom was the first solid oxide fuel cell company to reach commercial scale, given previous challenges we have had to overcome and given that the energy industry is rapidly evolving, we believe that at this stage of our growth, a longer tenure is in the best interests of our stockholders. The Board believes the current average tenure of 8.4 years for its non-employee directors reflects the balance the Board seeks between different perspectives brought by longer serving directors and new directors.
The Board and the Nominating Committee value diversity of backgrounds, age, education, experience, perspectives and leadership in different fields when identifying nominees, and we assess the effectiveness of our efforts in pursuing diversity in connection with our annual evaluations. In 2020, the Board expanded our Corporate Governance Guidelines’ definition of diversity to include gender and ethnicity. Representation of gender, ethnic, geographic, cultural or other diverse perspectives expands the Board’s understanding of our stakeholders. Presently, we have one woman director and four ethnically diverse directors.
The Board is focused on combining the right mix of skills, experience and perspectives to support our strategic growth levers, obtaining operational leverage for scale and international expansion. The Nominating Committee continues to focus on Board refreshment to align the Board’s long-term composition with its long-term strategy. During 2020, the Nominating Committee, through the Board evaluation process, undertook a review of the collective qualifications, skills, attributes and experiences it desires on the Board. The purpose of the review was to consider the qualifications, skills, attributes and experiences the Board believes are aligned with oversight of the short- and long-term strategies including the growth levers, operational scale and international expansion and related risks and opportunities.
Although we do not have a separate diversity policy, the Board and the Nominating Committee aim to further refresh Board membership in the coming year, with a particular focus on gender and diverse director candidates.
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Corporate Governance
Class IIIII Directors Standing for Election at the 20202021 Annual Meeting
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Age: 75 | Committee | |||
Director Since: November 2019 | Public Company |
Background
• | Tully M. Friedman Professor of Economics and Wohlford Family Hoover Institution Senior Fellow at Stanford University, where he has been on the faculty since 1971 | |||
CEO and President of Boskin & |
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• | Chairman of the President’s Council of Economic Advisers from 1989 to 1993 | |||
• | Former director of ExxonMobil from 1996 to 2018 |
Director Qualifications:
Dr. Boskin is recognized internationally for his research on world economic growth, tax and budget theory and policy, U.S. saving and consumption patterns and the implications of changing technology and demography on capital, labor and product markets. In addition to his background in public policy, he brings to the Board significant economic, financial and energy expertise, including through his experience on the board of a publicly traded energy company and a publicly traded technology company. Dr. Boskin’s experience as CEO of his consultancy firm and as a director of another large, complex global organization also provides the Board with important perspectives in its evaluation of our governance practices and processes. In addition, his prior service on a public company audit committee supports the development of the Audit Committee function as we mature as a public company.
2021 PROXY STATEMENT | 21 |
Corporate Governance
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Class III Directors – Terms Expiring at the 2021 Annual Meeting of Stockholders
Founder and Chief Executive Officer at | |||||
Age: 71 | Committee Membership: Compensation | ||||
Director Since: August 2018 | Public Company Boards: None |
Background
Mr. Chambers is the founder
• | Founder and Chief Executive Officer at JC2 Ventures, a venture capital |
• | Executive Chairman of the board of Cisco Systems, Inc. (“Cisco”), a networking and information technology company, from July 2015 to December 2017 and as Chairman of the board of Cisco from November 2006 to July |
• | Cisco’s Chief Executive Officer from January 1995 until July 2015 and President from January 1995 to November |
• | Employed by Wang Laboratories, Inc., a former computer-based office information processing systems company, from 1982 to 1990, where, in his last role, he was the Senior Vice President of U.S. |
• | Chairman of the US-India Strategic Partnership Forum |
• | Appointed Global Ambassador of the French Tech by President Emmanuel Macron of |
Director Qualifications:
Mr. Chambers’ experience in leading and scaling Cisco Systems as its CEO and Chairman for over 20 years, building and implementing strategic growth plans as well as his experience with early stage companies, provides valuable perspective to the Board in growing and scaling an organization, particularly in the areas of operations, sales, human capital management, recruitment and executive compensation. Mr. Chambers’ international experience and relationships and his skill in promoting innovative new products and technology are valuable to the Board as we continue to expand globally.
Director Qualifications
Mr. Chambers’ experience in leading and scaling Cisco Systems as its CEO and Chairman, as well as his experience with early stage companies and building and implementing strategic growth plans, provides valuable perspective to the Board in growing and scaling an organization, particularly in the areas of operations, sales, human capital management, recruitment and compensation. Mr. Chambers’ international experience and relationships and his skill in promoting technological innovation are valuable to the Board as the Company continues to expand globally.
Committee Membership
Compensation
Public Company Boards
None
L. John Doerr
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General Partner of Kleiner Perkins | |||
Age: 69 | Committee Membership: Compensation | ||
Director Since: May 2002 | Public Company Boards: Alphabet, Inc. Amyris, Inc. Coursera, Inc. Doordash, Inc. QuantumScape Corporation |
Background
Mr. Doerr has been a
• | General Partner of Kleiner Perkins Caufield & Byers, a venture capital firm (together with its affiliates, “Kleiner Perkins”), since August | ||
• | Former director of Amazon.com, Inc., an e-commerce company, from June 1996 to | ||
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Director Qualifications:
Mr. Doerr, through Kleiner Perkins, was the first investor in Bloom, and he brings valuable institutional knowledge to the Board given his long-standing history with Bloom and extensive knowledge of the management team and our operations. His public company board experience and understanding of governance practices has helped us in our transition from a private to a public company. His deep technology expertise and experience in developing, scaling and managing technology companies and their management make him well-suited to serve on the Board and the Compensation Committee.
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Corporate Governance
Class I Directors – Terms Expiring at the 2022 Annual Meeting of Stockholders
General Colin L. Powell | |||
Former U.S. Secretary of State and Founder and Chairman Emeritus of the America’s Promise Alliance | |||
Age: 83 | Committee Membership: None | ||
Director Since: January 2009 | Public Company Boards: salesforce.com, inc. |
Background
General Powell served
• | Served as the | ||
• | Served 35 years in the U.S. Army, rising to the rank of Four-Star General and from 1989 to 1993 | ||
• | Chairman of the Board of Visitors of the Colin Powell School at the City College of New York | ||
• | Founder and Chairman Emeritus of the America’s Promise Alliance, a nonprofit organization advocating for the strength and well-being of America’s children and | ||
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Director Qualifications:
General Powell’s senior leadership positions at the highest levels of the U.S. government and philanthropic enterprises, as well as his extensive experience in building organizations and recruiting, developing, motivating and managing human capital, provides a valuable perspective to the Board, particularly in the areas of leadership, human capital management, executive compensation, governance and strategic planning and operations. Additionally, his experience on the board of the global leader in customer relationship management gives him significant insight into business development strategies and branding for the digital age.
Scott Sandell | |||
Managing General Partner at New Enterprise Associates, Inc. | |||
Age: | Committee Membership: Compensation (Chair) | ||
Director Since: August 2003 | Nominating/Governance | ||
Public Company Boards: Tuya Inc. | |||
Cloudflare, Inc. Coursera, Inc. |
Background
Mr. Sandell is Managing General Partner at global venture capital firm New Enterprise Associates, Inc. (“NEA”). As
• | Joined NEA in January 1996 and as has been a General Partner since September 2000 and served as Co-Managing General Partner from March 2015 to April 2017 | |
• | Served as head of the firm’s technology investing practice for 10 years and has led NEA’s China investing activities for over a |
• | Prior to joining NEA in 1996, |
• | Started career at |
• | Previously served on the boards of, among others, Data Domain, Inc., Fusion-io, Inc., Neoteris, Inc., NetIQ Corporation, Playdom, Inc., Spreadtrum Communications, Inc., Tableau Software Inc., WebEx Communications, Inc. |
• | Currently serves on the Board of Advisors for the Thayer School of Engineering at Dartmouth |
• | Former Chairman of the Board of the National Venture Capital Association, a trade organization for venture capital and private equity |
Director Qualifications:
Mr. Sandell brings valuable institutional knowledge to the Board given his long-standing history with us and extensive knowledge of the management team and our operations. Mr. Sandell’s technical background, operations experience with a wide range of technology companies and international experience has been instrumental in helping us develop and implement our supply chain and manufacturing operations and expand customer relationships. Mr. Sandell’s service on a number of public and private company boards lends a valuable breadth and depth of expertise to the Board on all aspects of scaling an organization and business models for new technologies. In addition, his background provides an important perspective to the Board and the Compensation Committee and Nominating Committee on best practices in human capital management, executive compensation and governance. Mr. Sandell’s extensive network from his role in the venture capital industry and related organizations provides the Board a wealth of knowledge regarding emerging technologies and practices.
2021 PROXY STATEMENT | 23 |
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Corporate Governance
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KR Sridhar |
Founder, Chief Executive Officer and Chairman of Bloom Energy | ||||
Age: 60 | Committee Membership: None | |||
Director Since: March 2002 | Public Company Boards: None |
Background
Mr. Sridhar is a founder
• | Founder of | |||
• | Prior to founding | |||
• | Has served as an advisor to NASA and has led major consortia of industry, academia and national | |||
• | Currently serves as a strategic limited partner at Kleiner Perkins | |||
• | Served on many technical committees, panels and advisory boards and has several publications and | |||
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Director Qualifications:
As a founder of Bloom who has guided our growth and development as both CEO and Chairman for almost 20 years, Mr. Sridhar has proven, unparalleled and in-depth knowledge of our technology, operations, markets, regulatory environment, customers, employees and competition. Mr. Sridhar’s depth and breadth of technological and scientific expertise and experience with technological innovation bring invaluable insight to the Board concerning our products and development strategies. In addition, his knowledge and strategic vision for the energy industry aids the Board in its strategic planning. Mr. Sridhar provides management’s perspective in Board discussions and brings important insight regarding our strategy and operations to the Board’s deliberations.
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Corporate Governance
Class lI Directors – Terms Expiring at the 2023 Annual Meeting of Stockholders
Mary K. Bush IND | |||
President of Bush International, LLC | |||
Age: 72 | Committee Membership: Audit (Chair & Financial Expert) | ||
Director Since: January 2017 | Public Company Boards: Discover Financial Services ManTech International Corporation T. Rowe Price Group, Inc. |
Background
• | President of Bush International, LLC, an advisor to U.S. corporations and foreign governments on international capital markets, strategic business, economic and governance matters since 1991 |
• | Held several Presidential appointments, including the U.S. Government’s representative on the International Monetary Fund Board and Director of Sallie Mae Bank |
• | Former head of the Federal Home Loan Bank System during the aftermath of the Savings and Loan crisis and was advisor to the Deputy Secretary of the U.S. Treasury Department |
• | Earlier in her career, managed global banking and corporate finance relationships at New York money center banks including Citibank, N.A., Banker’s Trust Company, and JPMorgan Chase Bank, N.A |
• | Appointed by the Secretary of the Treasury to the U.S. Treasury Advisory Committee on the Auditing Profession in 2007 |
• | Appointed by President George W. Bush as Chair of the congressionally-chartered HELP Commission on reforming foreign aid in 2006 |
• | Director of Briggs & Stratton, Inc. from 2004 to March 2009, of United Continental Holdings, Inc. from 2006 to 2010, of the Pioneer Family of Mutual Funds from 1997 to 2012 and of Marriott International, Inc. from 2008 to 2020 |
• | Member of Kennedy Center’s Community Advisory Board |
• | Chairman of the Capital Partners for Education, a not-for-profit organization that mentors young people through high school and college |
Director Qualifications:
Ms. Bush’s senior executive roles; extensive experience and knowledge in finance and accounting, particularly in areas of accounting principles, financial reporting rules and regulations and oversight of the financial reporting process at public companies; and wide-ranging experience with government and regulatory systems, provide important skills and qualifications to the Board, especially as Chair of the Audit Committee and with respect to risk management. Ms. Bush’s public company board experience provides governance expertise to the Board concerning current governance practices. In addition, Ms. Bush’s significant experience in global business and financial markets is extremely valuable to us as we look to expand our customer financing options in tandem with our global expansion.
2021 PROXY STATEMENT | 25 |
Corporate Governance
Jeffrey Immelt IND | |||
Former Chairman and CEO of General Electric Lead Independent Director | |||
Age: 65 | Committee Membership: Audit (Financial Expert) | ||
Director Since: November 2019 | Public Company Boards: Twilio Inc. Desktop Metal, Inc. Tuya Inc. |
Background
• | Venture partner at NEA since January 2018 |
• | Former Chairman and CEO of General Electric (“GE”), a diversified industrial company, for 16 years from 2001 to 2017 where he revamped the company’s strategy, global footprint, workforce and culture |
• | Named one of the “World’s Best CEOs” three times by Barron’s |
• | GE was named “America’s Most Admired Company” by Fortune magazine and one of “The World’s Most Respected Companies” in polls by Barron’s and the Financial Times during his tenure |
• | Recipient of 15 honorary degrees and numerous awards for business leadership |
• | Chaired the President’s Council on Jobs and Competitiveness under the Obama Administration |
• | Member of The American Academy of Arts & Sciences |
Director Qualifications:
Mr. Immelt brings to the Board more than 30 years of senior executive and boardroom experience, including nearly 20 years at the helm of GE, a world-leading, technologically innovative global enterprise where he helped reshape and modernize its global business and financing strategy. Mr. Immelt’s experience and insights in all aspects of running a multinational business, including in diverse areas such as operations, sales and marketing, human capital management, executive compensation, and product and service management and business models, will be invaluable as we endeavor to scale our business and expand our markets, both in the United States and globally. Given GE’s energy businesses, Mr. Immelt provides valuable expertise regarding the energy sector, the regulatory landscape and the competitive landscape.
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Corporate Governance
Eddy Zervigon IND | |||
CEO of Quantum Xchange | |||
Age: 52 | Committee Membership: Audit (Financial Expert) | ||
Director Since: October 2007 | Nominating/Governance (Chair) | ||
Public Company Boards: Maxar Technologies Inc. |
Background
• | CEO of Quantum Xchange, a cybersecurity company, since September 2020 |
• | Special Advisor at Riverside Management Group, a boutique merchant bank, since 2012 |
• | Previously, he was a Managing Director in the Principal Investments Group at Morgan Stanley & Co. LLC, a global financial services firm, from 1997 to 2012 |
• | Prior to joining Morgan Stanley, Mr. Zervigon was a Certified Public Accountant at Coopers & Lybrand (now PricewaterhouseCoopers LLP), a public accounting firm |
• | Served as a director of DigitalGlobe, Inc., a builder and operator of satellites for digital imaging, where he served as a member of the audit and compensation committees from 2004 to 2017 |
• | Previously served as a board member of MMCinemas, Impsat Fiber Networks, Inc., TVN Entertainment Corporation and Stadium Capital Management, LLC |
Director Qualifications:
Mr. Zervigon brings significant institutional knowledge regarding Bloom given his early involvement with us at our early growth stages through his position with Morgan Stanley and later as a director. Given Mr. Zervigon’s international financial and transactional experience as an investment banker, Mr. Zervigon has helped shepherd our transition from a private to a public company and provided valuable insights regarding growth strategies and business models. In addition, his accounting expertise as a CPA with PricewaterhouseCoopers LLP has provided critical experience, skills and qualifications to the Audit Committee. His public company board and governance experience contributes to his role as the Chair of the Nominating Committee.
2021 PROXY STATEMENT | 27 |
Corporate Governance
Director Skills and Experience
As we discuss above under “Director Tenure, Board Refreshment and Diversity” and below under “Information Regarding the Board and its Committees,” the Nominating Committee is responsible for assessing with the Board the appropriate skills, experiences and background that we seek in Board members in light of our business strategy and our current Board composition to provide effective oversight and represent the long-term interests of our stockholders. The Board will then determine whether a nominee’s background, experience and skills will advance the Board’s goal of creating and sustaining a board with broad and diverse experience and perspectives who can oversee our business. Listed below are the skills and experience we consider important for our directors to facilitate oversight of our business strategy.
Public Company Board Experience | Service on a public company board provides valuable and relevant governance experience, including an understanding of the legal and regulatory landscape in which public companies operate and the importance of the oversight responsibilities of the Board and its committees, and helps us maintain good corporate governance practices by providing insight into current U.S. public company board practices. | ||
Senior Leadership | Experience serving in executive positions, including as CEO, provides members of the Board with a practical understanding of enterprise structure, operations and management, including in core areas such as human resources, financial planning, risk management and compliance and the know how to identify and develop leadership in the management team, execute operationally and drive change and growth. | ||
Global Business/International | As we expand our reach globally, experience in entering and operating in new markets, including emerging markets, and the attendant business and cultural perspectives is critical to our success. | ||
Financial/Accounting/ Capital Markets | Our capital structure and operations include the use of debt instruments and financing arrangements as well as project finance activities for our customer’s use of our Energy Servers and other project development. It is critical for the Board and the Audit Committee to have a sophisticated understanding of the capital markets, financing and funding operations relevant to Bloom, energy project finance structures, and accounting and financial reporting processes to advise on, and oversee, our project finance activities and other risk management. | ||
Manufacturing/Operations | Because we develop and manufacture our Energy Servers, individuals with experience in manufacturing processes and operations, including supply chain management, are valuable additions to the Board. | ||
Sales and Marketing | As we seek to continue to grow our bookings and acceptances year over year and bring our Energy Servers to additional states, countries and markets, experience in the strategy and mechanics of sales and marketing enables the Board to effectively oversee the expansion of our business and development of our brand. | ||
Human Capital Management | We operate in a highly competitive employment market, and experience in attracting, motivating, developing and retaining qualified personnel and succession planning is particularly important to our future success. In addition, as a relatively new public company, experience in evolving compensation practices from private to public company status is critical to attracting and retaining personnel. |
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Corporate Governance
Government/Public Policy/Regulatory | The energy industry is heavily regulated, and Board members who have experience working within a regulatory framework bring valued experience and perspectives and assist the Board with its oversight responsibilities regarding Bloom’s legal and regulatory compliance and its engagement with regulatory authorities. Being able to anticipate changes in the regulatory scheme will better enable us to execute our strategic plan effectively. As a relatively new technology, government expertise at the federal and state level and experience developing and implementing policy will help us work constructively with governments around the world, which is critical as we attempt to develop legislation and a regulatory framework to enable adoption of our technology both in the United States and in select international markets. | |||
Energy | Individuals with energy industry experience are able to share with us their insight and experience with respect to strategic and operational matters related to a complex and constantly changing energy industry. This includes experience in both the retail and wholesale energy markets as we expand both in the United States and in select international markets. Knowledge of the competitive landscape and energy companies provides valuable perspective as we consider partnerships and alliances in our selling activities. | |||
Business Development | We continue to focus on growing our business in new states, new countries and new product markets as identified in our growth levers. Our development of relationships with strategic domestic and international partners is critical to growing and financing our business and undertaking both new project and product development, and individuals with existing experience and relationships in business development give us valuable insight into the challenges and risks of such collaborations and partnerships and overcoming the same. | |||
Emerging Technology/Business Model | As we have transitioned from a private company to a public company and developed and improved each generation of our Energy Server, and | |||
Technology/Science | Knowledge and experience in product development, materials science, chemistry and hardware development is crucial for our continuing development and innovation with | |||
Diversity | Candidates should represent a diversity of viewpoints, backgrounds, experiences, and other demographics, including cultures, age, gender and ethnic diversity. Four of our directors are gender and ethnically diverse. |
2021 PROXY STATEMENT | 29 |
Corporate Governance
Our Governance Philosophy
Our governance practices are designed to support our mission to make clean, resilient, reliable and affordable energy, and to support our ability to capitalize on the market opportunity arising from the global transition to resilient and clean energy and distributed generation. Our governance practices are designed to optimize success based on the nature of our technology and the market environment we face.
Our Bloom Energy Server is an innovative, new technology in a rapidly evolving area of the energy and utility industries, distributed generation. It takes time to integrate a new technology in a highly regulated industry. The energy industry has very long technology development and market adoption cycle times, which necessitates long-term planning and execution of a consistent strategy. In addition, the energy industry has many divergent companies involved in the ecosystem, exacerbating the length of the business cycle and pace of change. In addition, as a relatively newly public company with a disruptive product in an evolving industry that is subject to political and policy changes, we tend to experience short-term swings in our stock price that are unrelated to and do not necessarily reflect our long-term prospects and value.
The Board, after careful deliberations and in view of these business environment considerations, put in place our current governance structure to enable the management team to act with deliberation and to focus on delivering long-term value to stockholders and protect minority investors from the interests of potentially short-sighted investors who may seek to act opportunistically and not in the best interests of Bloom or stockholders generally or other stakeholders.
The following table highlights some of the key elements of our governance structure and explains how we believe they align with the long-term interests of our stockholders. As we value input from our stockholders, and recognizing that some of our stockholders may hold different views, we look forward to engaging on this topic as part of our robust and proactive stockholder engagement program (see “Stockholder Engagement” on page 37 for more information).
Provision | What this refers to | How this aligns with stockholder interests | ||
Dual class capital structure | Two classes of common stock, with Class A having 1 vote per share and Class B having 10 votes per share | Provides an environment for the first five years post-initial public offering (“IPO”), at which point the dual class sunsets automatically, in which our founder and CEO, Mr. Sridhar, can focus his and the management team’s attention on our long-term strategy and driving value for stockholders | ||
Classified board | Directors serve three-year terms, with one-third of the Board (instead of the entire Board) elected at each annual meeting | Provides stability and continuity, permitting directors to develop and share institutional knowledge and focus on the long term. Encourages stockholders to engage directly with the Board and the management team regarding significant corporate transactions | ||
Supermajority voting | Voting standard for most items is majority of votes cast, but two-thirds of the outstanding shares are needed to approve a limited number of items in our Restated Certificate of Incorporation | Protects against a small group of stockholders acting to amend our governing documents or to remove directors for reasons that may not be in the best interests of all stockholders | ||
Plurality voting to elect directors | Directors are elected by a plurality of votes cast (instead of a majority of votes cast), meaning the nominees with the most votes are elected | Avoids potential disruption to the Board and management team as a result of a “failed election” in which a nominee does not achieve the votes necessary to be elected | ||
Stockholders cannot call special meetings or act by written consent | Stockholders can propose business at each annual meeting (per our advance notice bylaws and Rule 14a-8), but cannot call a stockholder vote in between annual meetings | Protects against potential abuse by a limited number of stockholders who could act to further short-term special interests and avoids unnecessary diversion of Board and management time from executing on our long-term strategy |
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Corporate Governance
Under NYSE listing standards, a director will qualify as an “independent director” only if, the director does not have a disqualifying relationship and, in the opinion of that listed company’s board of directors, that director does not have a material relationship with the listed company, either directly or indirectly, that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.
At least annually, the Nominating Committee receives a report on all commercial, consulting, legal, charitable or other business relationships that a director or the directors immediate family members have with Bloom and its subsidiaries. This report includes all ordinary course transactions with entities with which the directors are associated. In determining independence, the Nominating Committee considers transactions, if any, identified in the report discussed above that affect director independence, including any transactions in which the amounts reported may be above the threshold contained in the director independence requirements, and in which a director has a direct or indirect material interest. The Nominating Committee will make its assessment and discuss the report and its assessment with the full Board, which in turn makes its assessment.
In making its independence determination with respect to our non-employee directors other than General Powell, the Board considered the relationships that each non-employee director has with us and all other facts and circumstances the Board deemed relevant in determining their independence, including the beneficial ownership of our capital stock by each non-employee director as well as the long tenure of certain of the directors. The Board determined that Mr. Doerr and Mr. Sandell’s independence from management had not been diminished by their years of service and beneficial stock ownership.
With respect to the members of the Compensation Committee and Audit Committee, the Board considered the heightened independence requirements under the NYSE listing standards. With respect to Mr. Doerr, the Board considered his role as a General Partner of Kleiner Perkins, a venture capital firm that held shares in Bloom during 2020. As of December 31, 2020, Kleiner Perkins no longer holds any shares of our Class A or Class B common stock. With respect to Mr. Sandell, the Board considered his role as Managing General Partner at NEA, a global venture capital firm that controlled approximately 7.9% of our Class A common stock and Class B common stock on a combined basis as of December 31, 2020, and approximately 28.9% of the voting power as of December 31, 2020. Please see the section entitled “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” below for more information regarding the beneficial ownership of our common stock as of the Record Date and to the section entitled “Related Party Transactions” below for more information regarding the notes that were held by Kleiner Perkins and NEA during 2020. The Board also considered Mr. Immelt’s role as a venture partner at NEA. Unlike Mr. Sandell, Mr. Immelt does not have beneficial ownership of the securities held directly or indirectly by NEA, nor is he a member of NEA’s management. With respect to Messrs. Doerr and Sandell, the Board also considered the voting agreements by and between Mr. Sridhar, certain affiliates of Kleiner Perkins, and Mr. Sridhar and certain affiliates of NEA. The Board noted that as the voting agreements are revocable by the affiliates of NEA and Kleiner Perkins at any time without the consent of Mr. Sridhar and will terminate automatically upon the conversion of such stockholders’ Class B Common Stock into Class A Common Stock, that the independence of Mr. Doerr and Mr. Sandell was not impacted. Please see the section entitled “Voting Agreements” below for more information.
In addition, the Board considered that two of its members sit on the board of companies with which we do business and determined that these relationships were not significant enough to affect their independence.
Based on the information provided by each director concerning his or her background, employment and affiliations, ourand the report discussed above, the Board of Directors has determined that none of our non-employee directors has a material relationship with the Company,us, either directly or indirectly, that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director and that, with the exception of General Powell, each of our non-employee directors is “independent” as that term is defined under the listing standards of the NYSE and the applicable rules and regulations of the SEC. In making its independence determination with respect to our non-employee directors other than General Powell, the Board of Directors considered the relationships that each non-employee director has with usSecurities and all other facts and circumstances our Board of Directors deemed relevant in determining their independence, including the beneficial ownership of our capital stock by each non-employee director. With respect to Mr. Doerr, the Board considered his role as a General Partner of Kleiner Perkins, a venture capital firm that controls 17.09% of our common stock. With respect to Mr. Sandell, the Board considered his role as Managing General Partner at NEA, a global venture capital firm that controls 20.19% of our common stock. Refer to “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” below for more information regarding the beneficial ownership of our common stock and to “Related Party Transactions” below for more information regarding notes held by Kleiner Perkins and NEA.Exchange Commission (“SEC”). The Board also considered Mr. Immelt’s role as a venture partner at NEA. Mr. Immelt does not have beneficial ownershipdetermined that all members of the securities held directly or indirectly by NEA, nor is he a member of NEA’s management. With respect to Messrs. DoerrAudit, Compensation and Sandell, the Board considered the voting agreements byNominating Committees are independent and among Mr. Sridhar, Mr. Doerr and certain affiliates of Kleiner Perkins, Mr. Sandell and certain affiliates of NEA, and others. The Board noted that the voting agreements are revocable by our stockholders atalso satisfy any time and will terminate automatically upon the conversion of such stockholders’ Class B Common Stock into Class A Common Stock. Refer to “Voting Agreements” below for more information. Finally, with respect to Dr. Boskin, the Board considered certain contributions made by the Company to Stanford University, where Mr. Boskin serves as the Tully M. Friedman Professor of Economics and Wohlford Family Hoover Institution Senior Fellow.committee specific independence requirements.
Mr. Sridhar is not independent due to his role as the Company’s Chief Executive Officer.our CEO. General Powell is not independent under NYSE listing rulesstandards given the compensation he received from us in 2018 under a consulting agreement. The Company hasWe have a long-standing consulting relationship with General Powell under which he assists the Companyus with our selling and marketing efforts. Since 2019, the amount General Powell receives under the consulting agreement has not exceeded $119,000.
Our Corporate Governance Guidelines and the Bylaws do not require the separation of the offices of the Chairperson and the Chief Executive Officer. However, when the positions of Chairperson and the Chief Executive Officer are held by the same person, the Board of Directorsindependent directors will designate a lead independent director. Thedirector to a term of at least one year. We believe that the position of an empowered lead independent director has been structured to serve as an effective balance to a combined Chief Executive Officer/Board chairperson role. The lead independent director has authority over Board governance and operations and presides over regular executive sessions held by the non-managementnon-employee directors.
2021 PROXY STATEMENT | 31 |
Corporate Governance
KR Sridhar, the Company’sour Founder and Chief Executive Officer,CEO, is also the Chairman of the BoardBoard. The Nominating Committee annually reviews and considers whether the Board’s leadership structure remains appropriate for us and makes recommendations regarding it to the Board. The Nominating Committee recommended Mr. Sridhar continue to serve as Chairman of Directors.the Board. The Board has carefully considered this recommendation and whether to separate the roles of Chairman and Chief Executive Officer,CEO, and has concluded that the Companywe and itsour stockholders are currently best served by having Mr. Sridhar perform both roles. As a founder of Bloom and our CEO for over 20 years, Mr. Sridhar is the director most familiar with our business and Mr. Sridhar’s direct involvement in our operations enables him to communicate knowledgeably, timely and openly with the rest of the Board regarding short- and long-term objectives, as
well asidentification of strategic priorities and execution of ourthese strategies. This ensures thathelps the Board of Directors focusesfocus on important strategic objectives, yet also understands the challenges the Company faceswe face on a day-to-day basis. Combining the roles of Chief Executive OfficerCEO and Chairman of the Board also provides a clear chain of command and single point of accountability to execute the Company’sour strategy and a unified public face of the CompanyBloom in its interactions with suppliers, partners, customers, and others, all of which is particularly valuable to a newlyrelatively new public company such as Bloom.
Lead Independent Director
The Lead Independent Director’s rolelead independent director is to encourage direct dialogue between allelected annually by the independent directors (particularly those with dissenting views) and management. John Doerrof the Board. Mr. Immelt currently serves as our lead independent director.director, and the independent directors selected him to replace Mr. Doerr in May 2020. Mr. Immelt brings governance expertise and operational and leadership experience having served as Chairman and CEO of GE for over 20 years. In addition, we believe Mr. Immelt brings a fresh perspective as our lead independent director having joined the Board in November 2019.
As lead independent director, Mr. Doerr:Immelt:
| presides over executive sessions of the Independent Directors;
|
• | approves the agenda and meeting schedules to assure there is sufficient time for discussion of all agenda items;
|
• | approves the information sent to the Board; |
• | meets regularly with the Chairman; |
• | serves as a liaison between the
|
• | consults with the
|
• | has the authority to call special meetings of the Board;
|
• | works with the Nominating Committee to guide the Board’s governance processes, including succession planning and the annual Board self–evaluation; |
• | is available under appropriate circumstances for consultation and direct communication with major stockholders; and
|
• | performs such other functions and responsibilities as requested by the Board from time to time. |
Information Regarding the Board and its Committees of Our Board
OurThe Board held ten meetings and acted two times by unanimous written consent during the fiscal year ended December 31, 2020. Additionally, from time to time between formal meetings, members of the Board may participate in update or status phone calls and briefings, which are not meetings of the Board and therefore not included in the total. Each director attended at least 75% of the aggregate number of Board meetings and meetings of committees on which he or she served during the portion of the last fiscal year for which he or she was a director or committee member. All members attended at least 90% of the aggregate number of Board and committee meetings.
It is our policy to encourage our directors to attend annual meetings of stockholders, and we expect that all directors will attend the 2021 Annual Meeting. In 2020, our meeting was held virtually due to heighted concerns around the COVID-19 pandemic. All of our directors attended our online virtual meeting in 2020.
The Board has three standing committees: the Audit Committee, the Compensation and Organizational Development Committee (“Compensation Committee”) and the Nominating Committee. Only independent directors serve on ourthe Board committees.
OurThe Board has adopted written charters for each of its committees, and copies of the charters are available on our website (www.bloomenergy.com) at www.bloomenergy.com in the corporate governanceCorporate Governance section of our investor relations webpage.Investors page. Each of the committee charters is reviewed annually by the respective committee, which may recommend appropriate changes for approval by ourthe Board. None of the material on our website is part of this proxy statement or is incorporated by reference herein.
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Corporate Governance
Audit Committee | 2020 Meetings: 9 | |||
Mary K. Bush (Chair) Members: Michael Boskin Jeffrey Immelt Eddy Zervigon | ||||
| The Audit Committee has adopted a written charter approved by | |||
Principal Responsibilities: | ||||
The duties of our Audit Committee include, among other things:
| ||||
• | selecting, appointing and setting the compensation of a qualified firm to serve as the independent registered public accounting firm to audit our financial statements;
| |||
• | reviewing the independence and performance of the independent registered public accounting firm;
| |||
• | discussing the scope and results of the audit with the independent registered public accounting firm, and review and discuss with management and the independent
| |||
• | establishing and overseeing procedures for employees to submit concerns anonymously about fraud or questionable accounting or audit matters;
| |||
• | reviewing our policies on risk assessment and risk management;
| |||
• | reviewing and monitoring our internal controls and internal audit functions; | |||
• | obtaining and reviewing a report by the independent registered public accounting firm at least annually, that describes our internal quality-control procedures, any material issues with such procedures, and any steps taken to deal with such issues;
| |||
• | approving | |||
• | establishing pre-approval policies and
| |||
• | reviewing | |||
Key Highlights in 2020: | ||||
Early in 2020, the Audit Committee helped management navigate and remediate the restatement of certain financial statements. For more information, see the section entitled “Audit Matters – Restatement and Remediation of Material Weakness.” During 2020, the Audit Committee oversaw the improvement of our capital structure as we reduced our outstanding debt and lowered the overall interest rate that applies to our outstanding debt. The Audit Committee also played a key oversight role in our first year of compliance with Sarbanes-Oxley. | ||||
The Audit Committee conducted an assessment of potential risks in light of the COVID-19 pandemic, including our overall cash management. In addition, the Audit Committee advised management on the successful transition from PricewaterhouseCoopers LLC to Deloitte & Touche LLP in September 2021. The Audit Committee also oversaw the filing of our first conflict mineral’s report. The Audit Committee approved revisions to its charter as we transitioned from an emerging growth company to a large accelerated filer as part of its annual review of the charter. | ||||
Governance: | ||||
The Board |
2021 PROXY STATEMENT | 33 |
Corporate Governance
Compensation and Organizational Development Committee | |
2020 Meetings: 4 |
Scott Sandell (Chair) Members: John T. Chambers L. John Doerr | |||
| The
Principal Responsibilities: The duties of our Compensation Committee include, among other things:
• evaluating the performance of our executive officers, including our CEO;
CEO;
• making recommendations to
• reviewing general policies relating to compensation and benefits of our
Key Highlights in 2020: During 2020, the Compensation Committee focused on transitioning executive pay to align with a more pay-for-performance philosophy, as the Compensation Committee awarded more performance-based equity to our executive officers, and updated the executive compensation peer group. The Compensation Committee worked with the Nominating Committee to formally adopt a Stock Ownership Policy applicable to certain members of senior management and the non-employee directors. The Compensation Committee also reviewed succession planning of our senior management team. The Compensation Committee reviewed the impact of COVID-19 on our employee population as well as workplace and safety issues related to the pandemic. In addition, the Compensation Committee oversaw the implementation of a broad-based equity and U.S. benefits strategy. The Compensation Committee also reviewed company-wide diversity statistics as part of our focus on an overall diversity and inclusion strategy. The Compensation Committee approved revisions to its charter as we transitioned from an emerging growth company to a large accelerated filer as part of its annual review of the charter. Governance: All members of the Compensation Committee are
Compensation Committee Interlocks and Insider Participation
None of the members of our Compensation Committee is or has been an officer or employee of Bloom. No member of the |
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Corporate Governance
Nominating, Governance and Public Policy Committee | ||
2020 Meetings: 4 |
Eddy Zervigon (Chair) Members:
Scott Sandell | |
The Nominating Committee has adopted a written charter approved by the Board that, among other things, specifies the scope of its rights and responsibilities relating to our corporate governance policies and practices applicable.
Principal Responsibilities: The duties of our Nominating Committee include, among other things:
individual directors;
• assessing the appropriateness of our stock ownership guidelines; • developing and making recommendations to
policies;
Key Highlights in 2020: During 2020, the Nominating Committee focused on improving our corporate governance structure, including working with the Compensation Committee to adopt a Stock Ownership Policy applicable to certain members of senior management and the non-employee directors. The Nominating Committee also oversaw the annual director evaluation process and updated the criteria for Board nominees. In addition, the Nominating Committee provided guidance in the preparation of our first Sustainability Report as we created a new oversight structure throughout Bloom for ESG-related matters. The Nominating Committee is now responsible for ESG oversight. The Nominating Committee assessed and made recommendations to the Board on COVID-19-related matters and their potential effects on corporate governance. The Nominating Committee approved revisions to its charter and the Corporate Governance Guidelines as we transitioned from an emerging growth company to a large accelerated filer as part of its annual review of these documents. Governance: All members of the Nominating Committee are |
2021 PROXY STATEMENT | 35 |
Corporate Governance
Board’s Role and Responsibilities
The Board’s Role in Risk Oversight
OurThe Board of Directors is responsible for overseeing our risk management and believes that evaluating our risk management practices and providing a thorough and strategic approach to risk oversight is critical. The Board of Directors exercises this oversight responsibility directly and through its committees. Any risk oversight that is not allocated to a committee remains with the Board. The charters of the committees define the areas of risk for which each committee is responsible. The oversight responsibility of the Board of Directors and its committees is informed by regular reports from our management team, including senior personnel who lead a variety of functions across the business, as well as input from external advisors, as appropriate. These reports are designed to provide timely visibility to the Board of Directors and its committees about the identification and assessment of key risks, our risk mitigation strategies and ongoing developments.
The full Board of Directors has primary responsibility for evaluating strategic and operational risk management. OurThe Audit Committee is responsible for overseeing our major financial legal, and regulatorylegal risk exposures, which span a variety of areas including litigation, legal and regulatory compliance, reputational and policy matters, financial reporting and controls, credit and liquidity, capital allocation, IT, tax, conflicts of interest and related party transactions, cybersecurity, and international operations. OurThe Audit Committee also oversees the steps our management has taken to address failures in compliance with established risk management policies and procedures, and to monitor and control these exposures, including policies and procedures for assessing and managing risk and related compliance efforts. OurThe Compensation Committee evaluates risks arising from compensation policies and practices and ensuresso they do not incentivize excessive risk taking, as well as risks related to human capital management such as workplace safety, recruiting, retention, attrition and succession planning. OurThe Nominating Committee evaluates risks arising from our corporate governance practices, leadership structure of the Board, of Directors, compensation of the Board, of Directorsstate and public policy developments.federal regulatory and legislative matters, stockholder activism and ESG-related matters. Each of our committees provides reports to the full Board on their oversight activities and elevates review of Directors regarding theserisk issues to the Board as appropriate.
Throughout 2020, the Board and other matters.its committees reviewed risks pertaining to the COVID-19 pandemic and received frequent updates on its impact to our employees, operations, working capital, partners and customers. In addition, the Board reviewed with management the various measures being taken to protect health and safety of our employees as well as steps being taken to ensure the continuity of our business as an essential business for our customers and the community.
BOARD OF DIRECTORS Has the primary responsibility for evaluating strategic and operational risk management |
AUDIT COMMITTEE
Financial statements and internal Compliance, regulatory
Credit and Ethics, related parties and conflicts of | COMPENSATION AND
Compensation Succession planning Human capital management | NOMINATING, GOVERNANCE
Governance Environmental and Public policy Social responsibility |
MANAGEMENT |
|
36 |
Corporate Governance
Bloom management engagesWe believe actively engaging with, and understanding the concerns and views of our stockholders, onis an important factor in developing sound corporate practices that support our business. Members of our management team annually participate in a regular basis on a wide range of topics of interest to our stakeholders.stockholder outreach and engagement program. We hold regular quarterly earnings release conference calls open to all investors, which include a question and answer session with our institutional investors and analysts.session. These calls are announced to the public in advance, and we provide an opportunity for investors to participate byvia audio or webcast. A recording of the earnings call webcast and Q&A is available for 30 days following the call. We also participate in investor conferences on a periodic basis, and currently plan to hold an investor day in New York City in 2020, whichannual Investor Day that showcases the broader management team. Additionally, we expect will become an annual event. We alsowould host interested investors and potential investors at our headquarters and manufacturing facilities for meetings with members of executive management.
How we engaged with investors | ||||
During
| ||||
• | We hosted our first annual Investor Day and launched a series of webinars focused on educating investors about our approach to opportunities in the various markets that we address. The first two of these webinars focused on the Marine and Hydrogen markets. | |||
What we discussed with our investors and how we responded | ||||
During our | ||||
•
| Among other things, the investment community asked us to simplify our | |||
• | We also discussed with investors, our future strategic plans, including the Bloom 7.5, hydrogen Energy Servers and | |||
•
| Our investors have expressed enthusiasm for more information regarding the ways in which our Energy Servers, and |
Our investor relations website at http://investor.bloomenergy.com contains links to announcements regarding our earnings release conference calls and other investor resources, and our external communications team, in cooperation with our investor relations team, posts information of interest to our investors on social media sites such as LinkedIn (https:(https://www.linkedin.com/company/bloom-energy/) and Twitter (@Bloom_Energy). Information posted on our investor relations website or social media sites is not incorporated by reference into this Proxy Statement or any of our public filings with the SEC.
2021 PROXY STATEMENT | 37 |
Board of Directors Meetings and Annual Meeting Attendance
The Board of Directors held four meetings and acted five times by unanimous written consent during the fiscal year ended December 31, 2019. Additionally, from time to time between formal meetings, members of the Board participate in update or status phone call and briefings, which are not meetings of the Board and therefore not included in the total. Each director other than Mr. Chambers attended at least 75% of the aggregate number of Board of Directors meetings and meetings of committees on which he or she served during the portion of the last fiscal year for which he or she was a director or committee member.
It is the Company’s policy to encourage our directors to attend annual meetings of stockholders, and we expect that all directors will attend the 2020 Annual Meeting. In 2019, all of our directors, other than Ms. Bush who had an unavoidable conflict, attended our annual meeting of stockholders in person.Corporate Governance
Corporate Governance Guidelines; Materials Available on Our Website
OurThe Board of Directors has adopted Corporate Governance Guidelines that provide the framework for our corporate governance, along with our Restated Certificate of Incorporation, the Bylaws, committee charters and other key governance practices and policies. Our Corporate Governance Guidelines cover a wide range of subjects, including the conduct of Board meetings, independence and selection of directors, Board membership criteria and Board committee composition.
The Corporate Governance Guidelines and the other corporate governance documents listed below are available in the Investor Relations section of our website at http://investor.bloomenergy.com by clicking on the “Corporate Governance/ Governance Documents���Documents” link thereunder.
Restated Certificate of Incorporation |
Amended and Restated Bylaws |
Corporate Governance Guidelines |
Global Code of Business Conduct and Ethics |
Audit Committee Charter |
Compensation Committee Charter |
Nominating Committee Charter |
The contents posted on our website are not incorporated by reference into this Proxy Statement or any of our filings with the SEC.
Global Code of Business Conduct and Ethics
OurThe Board of Directors has adopted a Global Code of Business Conduct and Ethics (“Code of Conduct”) that applies to all of our employees, officers, directors and contractors. We require all employees to read and agree to adhere to the Code of Conduct. We provide mandatory web-based training with respect to the Code of Conduct and provide additional web-based training on specific aspects of the Code of Conduct from time to time. The Audit Committee, on behalf of the Board, of Directors, oversees compliance with the Global Code of Business Conduct, and Ethics, including the consideration of actual and potential conflicts of interest, the review and approval of related party transactions and the review and approval of procedures for handling complaints regarding accounting or auditing matters. Our
We have established several different reporting channels employees may use to seek guidance or submit reports concerning compliance and ethics matters, including those related to accounting, internal controls and auditing matters. These reporting channels include our Ethics HotlineHelpline which may be accessed 24 hours a day either over the phone or by way of a secure internet site and provides a vehicle for those subject to our Global Code of Business Conduct and Ethics to submit to us or to ourthe Audit Committee confidential, anonymous reports of concerns regarding, among other matters, fraud or questionable accounting or auditing matters. The Audit Committee receives a regular report from executive management that summarizes the number and types of issues submitted to us through our Ethics HotlineHelpline and management’s responses with respect thereto.
Our Global Code of Business Conduct is available on our website at http://investor.bloomenergy.com under the “Corporate Governance” tab. We intend to satisfy the disclosure requirement under Item 5.05 of Form 8-K regarding amendment to, or waiver from, a provision of our Global Code of Business Conduct by posting such information on our website at the address specified above.above within four days of any such amendment or waiver.
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Corporate Governance
Board and Committee Evaluations
The Board and its principal committees perform an annual self-assessment to (i) foster a culture of accountability for performance and continuous improvement and (ii) identify forward-looking needs for skills and experience of Board members so that the Board is able to meet its strategic objectives. The annual evaluation process provides the Board with valuable insight regarding areas where the Board believes it functions effectively, and where it can improve. The Chairman of the Nominating Committee together with the lead independent director lead the Board’s self–assessment process. In order for a robust process, the Board engages an independent third party to facilitate its annual self-evaluation. Topics reviewed during the 20192020 evaluation process included Board composition (skills, experience, diversity), information regularly provided to the Board (pre-reading materials, director orientation materials), agendas and meetings (quantity and quality of information presented), Board dynamics and relationship with management, Board processes (how the Board engages on strategy, risk oversight, CEO succession and evaluation), Committeecommittee effectiveness in meeting responsibilities outlined in the committee charters, and individual director performance (strengths, contributions, opportunities for improvement).
The Board and Committeecommittee evaluation process for 20192020 was conducted as follows:
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Independent outside counsel |
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Results of the conversations with individual directors were shared with our |
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A presentation summarizing the results of the evaluation was then developed to facilitate Board and committee discussions. |
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The Board and each committee then discussed the evaluation results and agreed upon action items and a timeline for implementation of any recommended changes to the Board, its membership, its processes and the operations of its committees. |
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Based on feedback received from the directors in 2020, the Board continued to evolve its meeting agendas and |
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Corporate Governance
Meetings of non-Management Independent Directors
Non-employee, independent directors meet in executive session without any members of our management present at almost every regularly scheduled Board meeting. The lead independent director chairs each of these executive sessions. These executive sessions promote an open discussion of matters in a manner that is independent of the Chairman and CEO.
Director Orientation
We provide an orientation process for new directors that includes background material, meetings with senior management, and visits to Bloom Energyour facilities. This process may include presentations by senior management to familiarize new directors with Bloom Energy’sour strategic plans, itsour significant accounting, financial and risk management issues, itsour compliance program and its Globalour Code of Business Conduct and Ethics.Conduct.
Director Education
The Board encourages all directors to stay abreast of developing trends for directors from the variety of sources available. OurThe Nominating Committee has established a policy regarding reimbursement of directors for reasonable costs associated with the directors’ participation in continuing education programs related to their service as directors. Director education is also integrated into ourthe Board and committee meeting calendars. Members of management and subject matter experts participate in director education sessions, which provide an opportunity for our directors to stay current with respect to our business, emerging corporate governance topics, or other issues pertaining to their service on ourthe Board.
Stockholder Communications with Our Board of Directors
Stockholders and other interested parties may communicate with the Board, of Directors, the lead independent director, the independent directors as a group or individual directors by sending a communication to:
Bloom Energy Corporation
Office of the Corporate Secretary
4353 North First Street, 4th Floor
San Jose, California 95134
Each communication should specify the intended recipient(s). The Office of the Corporate Secretary will initially process the communications and forward appropriate material to applicable members of the Board.
Stock Ownership Policy
The Board believes it is important to link the interests of Directors.our directors and management to those of our stockholders. Accordingly, the Board has adopted a Stock Ownership Policy for our non-employee directors and executive officers who are designated as reporting officers under Section 16 or report directly to our CEO. For additional information regarding our Stock Ownership Policy, please see the section entitled “Compensation Discussion and Analysis – Additional Information – Stock Ownership Policy.”
Related PartyRelated-Party Transactions
OurThe Board of Directors has adopted a related partywritten related-party transactions policy which, along with the charter of ourthe Audit Committee, requires that any transaction with a related party that must be reported under the applicable SEC rules must be reviewed and approved or ratified by ourthe Audit Committee, unless the related party is, or is associated with, a member of the Audit Committee, in which event the transaction must be reviewed and approved by ourthe Nominating Committee.
Our related partyrelated-party transactions policy applies to transactions, arrangements or relationships in which we are a participant, in which the amount involved exceeds $120,000, and in which a related party has or will have a direct or indirect material interest. A related party is:would include: (i) any of our directors, nominees for director or executive officers, (ii) any immediate family member of a director, nominee for director or executive officer, and (iii) any person, and his or her immediate family members, or entity that is known by us to be a beneficial owner of 5% or more of any of our outstanding equity securities at the time the transaction occurred or existed.
In determining whether to approve or reject a related partyrelated-party transaction, the Audit Committee considers the relevant and available facts, including the impact on a director’s independence if the related party is a director, immediate family member of a director or an entity with which a director is affiliated, the terms of the transaction and any other relevant information and considerations. The Audit Committee will approve only those transactions with related parties that, in light of known circumstances, are in or are not inconsistent with, the best interest of the CompanyBloom and its stockholders, as the Audit Committee determines in the good faith exercise of its discretion. The Audit Committee may impose such conditions as it deems appropriate on the CompanyBloom or the related party in connection with the approval of the proposed transactiontransaction.
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Corporate Governance
Related PartyRelated-Party Transactions
As of December 31, 2019, $299.0 million2020, none of the Company’sour debt was still held by investors considered to be related parties.
OverMr. Doerr currently serves as a board member of Bloom. Mr. Doerr also serves as the General Partner of Kleiner Perkins and is a Managing Member in Foris Ventures, LLC. Until September 2020, Kleiner Perkins was also considered a greater than 5% beneficial owner of our Class A common stock and Class B common stock on a combined basis. During 2020, Kleiner Perkins and Foris Ventures both held convertible notes of Bloom that have since been retired, as described below.
Mr. Sandell currently serves as a board member of Bloom. Mr. Sandell also serves as the Managing General Partner of NEA. NEA is considered a greater than 5% beneficial owner of our Class A common stock and Class B common stock on a combined basis. During 2020, NEA held convertible notes of Bloom that have since been retired, as described below.
On March 31, 2020, we entered into an Amendment Support Agreement (the “Amendment Support Agreement”) with the beneficial owners of our outstanding 6% Convertible Notes (the “6% Convertible Notes”) due December 1, 2020 pursuant to which the maturity date of the outstanding 6% Convertible Notes was extended to December 1, 2021, the interest rate increased from 6% to 10%, and the strike price on the conversion feature was reduced to $8.00 per share from $11.25. The Amendment Support Agreement required that we repay at least $70.0 million of these 10% Convertible Promissory Notes due December 2021 (the “10% Convertible Notes”) on or before September 1, 2020, which we satisfied through a cash payment of $70.0 million on May 1, 2020. Kleiner Perkins and NEA both held 6% Convertible Notes for $6.9 million and $13.9 million, respectively.
On March 31, 2020, we issued an additional $30.0 million of new 10% Convertible Notes to Foris Ventures, LLC (principal: $10 million) and NEA (principal: $20 million). In August 2020, NEA, Foris Ventures, LLC, and Kleiner Perkins converted their 10% Convertible Notes of $33.9 million, $10.0 million and $6.9 million, into 4.2 million, 1.25 million and 0.9 million shares of Class B common stock, respectively.
In May 2020, a 7.5% term loan noteholder ceased to be considered a related party, as Mr. Teti ceased to be a member of the Board in May 2020. We repaid $2.1 million and $2.2 million of the non-recourse 7.5% term loan principal balance in the years ended December 31, 20132020 and 2014,2019, respectively, and we obtained $40.8paid $0.7 million and $4.1$3.0 million respectively,of interest in term loans due September 2028 from Alberta Investment Management Corporation (“Alberta”) to fund the purchase and installation of Energy Servers related to PPA IIIa. Peter Teti, who serves on our Board of Directors, is Senior Vice President of Private Equity, Relationship Investing and Special Opportunities for Alberta. The loan bears a fixed interest rate of 7.5% and the total debt balance was $38.3 million as ofyears ended December 31, 2019.2020 and 2019, respectively.
In September 2015, we issued $12.5 million in principal amount of our 6% Notes to Kleiner Perkins and $12.5 million in principal amount of our 6% Notes to NEA pursuant to a note purchase agreement. Between December 2015 and September 2016, we issued $160.0 million in 6% Notes which are held byDuring 2020, Canada Pension Plan Investment Board (“CPPIB”) as of December 31, 2019. In connection with this issuance, we agreed to issue upon the occurrence of certain conditions warrants to purchase up to a maximum of 312,888 shares of our Class B common stock. Upon completion of our IPO, the 312,888 warrants were net exercised for 312,575 shares of Class B Common stock.
Each of Kleiner Perkins, NEA and CPPIB iswas considered a stockholder of the CompanyBloom that beneficially ownsowned greater than 5% of our outstandingClass A common stock and Class B common stock on an as converteda combined basis. Such beneficial ownership includes, as applicable, shares issuable upon conversionAt the start of 2020, CPPIB held $239.9 million of 6% Convertible Notes that became the 10% Convertible Notes in March 2020. During 2020, CPPIB converted all their 10% Convertible Notes into (i) approximately 21.2 million shares of Class B common stock that were subsequently converted into our Class A common stock and shares issuable upon the exercise of warrants. Mr. Doerr is a general partner of Kleiner Perkins. Mr. Sandell is the managing general partner of NEA.
Since inception of the 6% Notes, we have recorded $2.0sold and (ii) received $70 million in accrued interest for 6% Notes held by KPCB, $1.7 million in accrued interest for 6% Notes held by NEA, $26.9 million in accrued interest for 6% Notes held by CPPIB, and $3.0 million in accrued interest for PPA IIIa, held by Alberta. In 2019, we paid the following amounts of principal and interest, as noted, to our related party debt holders: Kleiner Perkins 6% Notes: $6,933,524 (principal); $832,020 (interest); NEA 6% Notes: $0 (principal); $901,355 (interest); CPPIB 6% Notes: $0 (principal); $11,985,545 (interest); and Alberta PPA IIIa: $2,200,220 (principal); $3,003,899 (interest).
As the company makes cash payments for the interest accrued on a monthly basis, as of December 31, 2019, we had no accrued interest due to 6% Note holders. As of December 31, 2019, the total debt balance outstanding under the 6% Notes was $6.9 million for Kleiner Perkins and $13.9 million for NEA. As of December 31, 2019, the total debt balance outstanding under the 6% Notes held by CPPIB was $239.9 million and the total debt balance outstanding under PPA IIIa was $38.3 million.cash.
Non-Employee Director Compensation Program
Our directors play a critical role in guiding our strategic direction and overseeing the management of Bloom, which requires considerable time commitments and responsibilities. The Board believes it is in our best interest and in the best interests of the Company and itsour stockholders to adopt a compensation program for directors who are not Company employees or directors of Bloom designated to serve on the Board by investors pursuant to contractual rights (our “Qualifying Directors”). All of our directors, other than Peter Teti, whose initial appointment to the Board was pursuant to an arrangement with AIMCo, and KR Sridhar, our CEO and Chairman, are Qualifying Directors. Mr. Teti who did not stand for re-election in May 2020 was also not considered a Qualifying Director.
Role of Compensation Consultant
OurThe Compensation Committee has retained the services of Compensia, Inc. (“Compensia”), an independent compensation consultant, to assist the Compensation Committee in evaluating and refining our Board of Directors’ compensation program. Compensia provided advice regarding, among other things, peer group composition, a competitive market analysis and equity strategy. Compensia also provides advice on our executive compensation program. The Compensation Committee has assessed the independence of Compensia pursuant to the NYSE rules and the Companywe have concluded that the work performed by Compensia for the Compensation Committee did not raise any conflicts of interest.
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Corporate Governance
Annual Cash Compensation
The following is a summary of the cash compensation that we provide to our Qualifying Directors on an annual basis. Such cash compensation is paid in quarterly installments. In addition, all of our directors are reimbursed for reasonable expenses incurred in attending Board and committee meetings, including reasonable expenses for travel, meals and lodging.
General Board Service | |||
Board service | $ | 60,000 | |
Lead independent director | 20,000 | ||
Committee Service | |||
Audit Committee | |||
Chair* | 30,000 | ||
Member | 15,000 | ||
Compensation and Organizational Development Committee | |||
Chair | 20,000 | ||
Member | 10,000 | ||
Nominating, Governance and Public Policy Committee | |||
Chair | 15,000 | ||
Member | 5,000 |
General Board Service | ||||
Board service | $60,000 | |||
Lead independent director | 20,000 | |||
Committee Service | ||||
Audit Committee | ||||
Chair* | 30,000 | |||
Member | 15,000 | |||
Compensation and Organizational Development Committee | ||||
Chair | 20,000 | |||
Member | 10,000 | |||
Nominating, Governance and Public Policy Committee | ||||
Chair | 15,000 | |||
Member | 5,000 |
* | Ms. Bush receives $40,000 for her service as the Chair of the Audit Committee. This amount was established before we adopted our non-employee director compensation policy, and the Board determined that her compensation as Audit Committee Chair should remain at the previously established amount for as long as she serves in that capacity or until the Board determines otherwise. |
InThe Board last reviewed director compensation in May 2019,2019. At that time, upon the recommendation of Compensia, the Board of Directors reviewed the cash compensation that we paid to our Qualifying Directors and determined that no changes were advisable to the cash compensation program other than that Messrs. Doerr and Sandell, who had not previously received cash compensation, would move to the standard cash compensation arrangement beginning in the third quarter of 2019.program.
Equity Compensation
When the Company’s Class A common stock began trading in the public market in July 2018, each Qualifying Director appointed to the Board following the IPO was entitled to receive 13,333 RSUs, which vested annually over three years (the “Initial Awards”). On the date of each annual meeting thereafter, each Qualifying Director who had been serving on the Board and continued to serve on the Board after the annual meeting would be entitled to receive 5,000 RSUs, all of which would vest on the one-year anniversary of the grant date (the “Annual Award”); provided, that any Qualifying Director who received an initial award would not be eligible for an Annual Award until the Qualifying Director’s Initial Award was fully vested.
In May 2019, following a review of market data and on the recommendation of Compensia, our compensation consultant, the Compensation Committee recommended and the Board of Directors approved a change to the equity compensation program for its Qualifying Directors, determining that instead of the Annual Award described above, our Qualifying Directors would receive an annual grant of RSUs with a fair market value of $170,000 as of the date of grant.grant (the “Annual Award”). The RSU grantsAnnual Award would vest on the date of the next annual meeting of stockholders. Qualifying Directors who were appointed to the Board after May 2019the date of an annual meeting of stockholders would be entitled to receive a pro-rated grant of RSUs based on their start date as a director. There were no changes to the value of the Annual Award in 2020.
On May 15, 2019,12, 2020, each Qualifying Director who had been serving on the Board as of May 8, 2019,12, 2020, the date of the 20192020 Annual Meeting of Stockholders and who continued to serve on the Board following the 20192020 Annual Meeting was granted 12,73419,813 RSUs, which will vest as to 100% of the shares on the date of the 20202021 Annual Meeting, subject to the Qualifying Director’s continued service on the Board as of that date. Both Dr. Boskin and Mr. Immelt were appointed to the Board in November 2019, and each received a grant of 15,245 RSUs at that time, which was an amount based on $170,000 in fair market value of the Company’s Class A common stock as pro-rated based on their start dates.
2019 Director Equity Compensation Grants
Non-Employee Director Deferred Compensation Plan
In November 2019, the Board of Directors adopted a deferred compensation plan, which allows our non-employee directors to defer all or a portion of their Board compensation, including cash retainer fees and RSU grants, for distribution at a later date. All deferred compensation is paid in deferred RSUs that settle on the terms and conditions elected by the non-employee director. A copy
Ms. Bush and Mr. Zervigon both elected to defer the vesting of their RSU awards granted in 2020 that are expected to vest on the date of the Non-Employee Director Deferred Compensation Plan2021 Annual Meeting, such that each award will vest on the January 1st after his or her service on the Board terminates for any reason other than death. Mr. Sandell also elected to defer the vesting of his RSU award granted in 2020 that is filed as an exhibitexpected to ourvest on the date of the 2021 Annual ReportMeeting, such that the award will vest on Form 10-K forthe January 1st after the year ended December 31, 2019.in which the award is scheduled to vest.
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Corporate Governance
20192020 Director Compensation
The following table provides information for all compensation awarded to or earned by our Qualifying Directors for the year ending December 31, 2019.2020. Neither Mr. Teti nor Mr. Sridhar is a Qualifying Director and neither received compensation for his service as a director in 2019.2020. Mr. Teti did not stand for re-election at the 2020 Annual Meeting of Stockholders and resigned as director as of May 12, 2020. Please see the 20192020 Summary Compensation Table for information regarding Mr. Sridhar’s 20192020 compensation as the Company’s Chief Executive Officer.our CEO.
Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1) | All Other Compensation ($) | Total ($) | ||||
Kelly A. Ayotte(2) | 37,500 | — | — | 37,500 | ||||
Michael Boskin(5) | 20,000 | 84,762 | — | 104,762 | ||||
Mary K. Bush | 100,000 | 169,999 | — | 269,999 | ||||
John T. Chambers(3) | — | 204,996 | — | 207,996 | ||||
L. John Doerr(7) | 35,000 | 169,999 | — | 204,999 | ||||
Jeffrey Immelt(5) | 18,750 | 84,762 | — | 103,512 | ||||
Colin L. Powell(4) | 75,000 | 169,999 | 119,000 | 363,999 | ||||
Scott Sandell(7) | 50,000 | 169,999 | — | 219,999 | ||||
Eddy Zervigon | 82,500 | 169,999 | — | 252,499 |
Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1) | All Other Compensation ($) | Total ($) | ||||
Michael Boskin | 80,000 | 169,995 | — | 249,995 | ||||
Mary K. Bush | 100,000 | 169,995 | — | 269,995 | ||||
John T. Chambers | 70,000 | 169,995 | — | 239,995 | ||||
L. John Doerr | 77,253 | 169,995 | — | 247,248 | ||||
Jeffrey Immelt | 87,747 | 169,995 | — | 257,742 | ||||
Colin L. Powell(2) | 75,000 | 169,995 | 119,000 | 363,995 | ||||
Scott Sandell(3) | 85,000 | 169,995 | — | 254,995 | ||||
Eddy Zervigon | 90,000 | 169,995 | — | 259,995 |
(1) | The amounts reported represent the aggregate grant date fair value of |
As of December 31, 2019,
For the year ended December 31, |
(3) | Mr. Sandell elected to defer 100% of |
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Information about Our Executive Officers
Information about ourThere are no arrangements or understandings between any executive officersofficer and any other person pursuant to which he or she is set forth below:
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There are no family relationships between any of our executive officers or directors.
Information about our executive officers as of the Record Date is set forth below:
KR Sridhar Founder, Chairman, and Chief Executive Officer | Age: 60 | |
Background
Please see page 24 of this Proxy Statement for Mr. Sridhar’s biography.
Gregory Cameron Executive Vice President and Chief Financial Officer | Age: 52 | |
Background
Gregory Cameron has served as our Executive Vice President and Chief Financial Officer since April 2020. Prior to joining Bloom, Mr. Cameron was an officer at General Electric, a diversified industrial company. Over his 26-year career there, Mr. Cameron had a strong history of driving change, fostering positive transitions, and conquering challenges through sound fiscal and business direction. Mr. Cameron served as President and Chief Executive Officer, Global Operations-GE Company from 2018 through 2019 and as President and Chief Executive Officer, Global Legacy Solutions-GE Capital from 2016 through 2018. Prior to 2016, he served in various senior roles with General Electric, including as Chief Financial Officer, Americas-GE Capital from 2009 through 2016. Mr. Cameron holds a bachelor’s degree in Economics from St. Lawrence University.
Swaminathan (Venkat) Venkataraman Executive Vice President of Engineering and Chief Technology Officer | Age: 60 | |
Background
Venkat Venkataraman has served as our Executive Vice President of Engineering and Chief Technology Officer since December 2003. He has authored or co-authored several patents in the areas of solid oxide fuel cell technology, fuel processing and heat integration and control systems. His recent focus is on decarbonization using carbon capture and low cost electrolyzers for hydrogen production. Prior to joining Bloom, Mr. Venkataraman was a Principal Technologist at Aspen Technology, Inc., a provider of supply chain management software and professional services, from 1987 to 2003, where he led the commercial development of high end design, simulation and optimization software for the chemical and petrochemical industries. Mr. Venkataraman holds a bachelor’s degree in Chemical Engineering from the National Institute of Technology, Tiruchirappalli and a Ph.D. in Chemical Engineering from Clarkson University.
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INFORMATION ABOUT OUR EXECUTIVE OFFICERS
Susan Brennan Executive Vice President, Chief Operations Officer | Age: 58 | |
Executive CompensationBackground
The following isSusan Brennan has served as our Executive Vice President, Chief Operations Officer since November 2013. Prior to joining Bloom, Ms. Brennan served as Vice President of Manufacturing – Smyrna and Decherd at Nissan North America, Inc., an automobile company, from October 2008 to November 2013. She also previously served as Director of Global Manufacturing at Ford Motor Company, an automobile company, and in other corporate and manufacturing management roles at Ford Motor Company, Visteon Corporation, a discussionglobal automotive electronics supplier, and Douglas & Lomason Company, an automotive parts supplier. Ms. Brennan has served as a board member with Senior PLC since January 2016 and Romeo Power, Inc. since December 2020. Ms. Brennan holds a bachelor’s degree in Microbiology from the University of Illinois, Urbana-Champaign and an M.B.A. from the University of Nebraska, Omaha.
Shawn M. Soderberg Executive Vice President, General Counsel and Secretary | Age: 60 | |
Background
Shawn M. Soderberg has served as our Executive Vice President, General Counsel and Secretary since January 2016. Prior to joining Bloom, Ms. Soderberg was the Executive Vice President, General Counsel and Secretary of Bio-Rad Laboratories, a global medical technology provider for the life science and clinical diagnostics industries from 2013 to 2016. Prior to that, Ms. Soderberg was the Senior Vice President, General Counsel and Secretary of Aricent Group, a global design and software engineering services and product company, from 2006 to 2013; Managing Director and General Counsel of H&Q Asia Pacific, a private equity firm, from 2000 to 2006; Vice President, General Counsel and Secretary of Oak Technology, a semiconductor and embedded solutions provider for the optical storage and the digital home entertainment market, from 1996 to 2000; and General Counsel of Microtec Research, Inc., a software provider for embedded systems, from 1994 to 1996. Ms. Soderberg holds a bachelor’s degree in Accounting from the University of Santa Clara, a J.D. from Seattle University School of Law and an LL.M. in Taxation from New York University.
Chris White Former Executive Vice President, Global Sales | Age: 58 | |
Background
Chris White served as Executive Vice President and Chief Sales Officer from June 2019 to March 2021. Mr. White has more than 25 years of experience managing industries and market transformations. Prior to joining Bloom, Mr. White served as CEO of the compensation arrangementsAmericas at Signify (formerly Philips Lighting), a leader in connected LED lighting systems. Before joining Signify, Chris held several transformational executive roles including a 20-year tenure at Cisco Systems, multinational technology company. As Global Senior Vice President of our named executive officers. This discussion contains forward-looking statements that are basedInternet of Things (IoT) Sales, Strategy and Go-to-Market, he spearheaded Cisco’s market leadership and grew a $1 billion business in three years. He previously grew Cisco’s Sports and Entertainment group from a $20 million start-up to a $500 million business in less than five years. Mr. White holds a bachelor’s degree in Business (with Honors) from Kingston College at the University of London. Mr. White also serves on our current plans, considerations, expectationsthe Advisory Boards for Ingram Micro, Big Data Partners and determinations regarding future compensation programs. Actual compensation programs that we adopt may differ materially from currently planned programs as summarized in this discussion.the Paul Merage School of Business at the University of California, Irvine.
As an “emerging growth company”of March 5, 2021, Mr. White no longer serves as definedour Executive Vice President, Global Sales.
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INFORMATION ABOUT OUR EXECUTIVE OFFICERS
We have a diverse senior management team that brings proven track records of success in business, operating skill and excellence in leadership. As we continue to grow our business, we recognize that diverse leadership translates to a variety of experiences, viewpoints and, ultimately, more informed decisions. We believe the various skill sets and experiences of our senior management team will be invaluable as we endeavor to scale our business and expand our markets, both in the JOBS Act, we are not requiredUnited States and globally. The following individuals, in addition to includethe executive officers discussed above, complete our senior management team:
Glen Griffiths has served as Executive Vice President, Services, Quality, Reliability and EH&S since December 2014. Prior to joining Bloom, Mr. Griffiths served as the Chief Quality Officer of Hewlett Packard (“HP”), a global technology company, where he led HP’s Customer Experience and Quality Office. Mr. Griffiths developed and implemented a strategy that revitalized HP’s focus on customers and engaged HP employees to transform product and service quality across the entire company.
Carl Guardino has served as Executive Vice President, Government Affairs and Policy since August 2020. Prior to joining Bloom, Mr. Guardino was the longtime President and CEO of the Silicon Valley Leadership Group, a prominent public policy trade association that represents more than 350 of Silicon Valley’s most respected companies. Mr. Guardino has championed public policy at the local, state, and federal level for more than three decades.
Azeez Mohammed has served as Executive Vice President, International Business Development since November 2020. During a 21-year career at GE, Azeez served as a corporate officer and CEO and President of GE’s Power Conversion, Power Services and Energy Services business units, while conducting business across the Americas, Europe and the Middle East. In his last role at GE, he led a multi-billion dollar global electrification business with more than 8,000 employees and operations across 110 countries.
Sharelynn Moore has served as Executive Vice President and Chief Marketing Officer since August 2020. Prior to joining Bloom, Ms. Moore served as Senior Vice President of Networked Solutions at Itron, a leader in the Industrial Internet of Things (“IIoT”), where she had responsibility for Itron’s largest business segment, as well as Itron’s IIoT technology and smart city strategy. During an 18-year career at Itron, Ms. Moore held leadership roles with increasing levels of responsibility across marketing, communications, public affairs and product management functions.
Sonja Wilkerson has served as Executive Vice President and Chief People Officer since January 2019. Ms. Wilkerson has more than 30 years of Human Resources leadership experience and most recently served as Senior Vice President of Human Resources at Infinera Corporation, an optical networking company, where she successfully developed talent strategies to drive organizational effectiveness through the integration of people, technologies, processes and cultures. Prior to joining Infinera, Ms. Wilkerson worked at HP as VP of Human Resources.
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Compensation Discussion and Analysis
This Compensation Discussion and Analysis sectiondescribes our executive compensation program for our named executive officers, including our executive compensation policies and have elected to complypractices, how and why the Compensation Committee arrived at the compensation decisions for our named executive officers, and the key factors the Compensation Committee considered in making those decisions.
Our named executive officers for 2020 were:
• | KR Sridhar, Founder, CEO and Chairman |
• | Gregory Cameron, Executive Vice President and CFO |
• | Swaminathan Venkataraman, Executive Vice President of Engineering and Chief Technology Officer |
• | Susan Brennan, Executive Vice President and Chief Operating Officer |
• | Shawn M. Soderberg, Executive Vice President, General Counsel and Secretary |
• | Randy Furr, Former Chief Financial Officer |
2020 Management Changes. Mr. Furr resigned as CFO from Bloom effective as of March 31, 2020 and was replaced by Mr. Cameron effective as of April 1, 2020.
Executive Summary
2020 Business Highlights
2020 was a year unlike any other in modern history as we dealt with the scaled disclosure requirements availabledual challenges of the COVID-19 global pandemic and an uncertain economy. Against this backdrop, 2020 was a pivotal year for Bloom during which our management team and employees executed our business plan and delivered strong financial performance, solid operating results and a significantly improved balance sheet. Notably, our share price increased from a closing price of $7.47 on December 31, 2019 to emerging$28.66 as of the close on December 31, 2020. We believe we are well-positioned for growth companies.as we implement our technology road map and build applications for the Bloom Energy Server that address critical energy issues like resiliency, reducing carbon emissions and costs.
Executive Compensation Program OverviewFor a more detailed description of Bloom and other financial and business highlights, please see the section above entitled “Who We Are”.
2020 Compensation Highlights
Our 2020 compensation plans and payouts for our named executive officers reflect our overarching philosophy of pay-for-performance. Highlights of our compensation program include:
• | Emphasis on Performance-Based Incentives: A majority of the target compensation opportunity provided to our named executive officers is awarded in the form of cash incentives and equity awards for which the realized value varies based on the achievement of certain operating and financial metrics. |
• | Challenging Performance Objectives: The Compensation Committee sets rigorous goals for our annual bonus plan that will be achieved only if we perform at a high level. Based on our performance in 2020, our named executive officers each earned a bonus of between 130% and 137% of their targets for the year. |
• | Performance-Based Approach to Long-Term Incentives: PSUs represent 50% of the target long-term incentive value granted to our CEO and 30% of the target value granted to our other named executive officers. The remaining long-term incentive value was granted in the form of time-based vesting RSUs (excluding Mr. Cameron, who was granted stock options as part of his new hire awards). No PSUs granted in 2020 would be earned if our revenue and adjusted EBITDA performance fell below our targets for the year. Based on our strong results in 2020, our named executive officers (excluding Mr. Cameron) earned 147% of the target number of shares granted in 2020. |
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EXECUTIVE COMPENSATION
Compensation Philosophy and Objectives
Our mission is to make clean, reliable and affordable energy for everyone in the world. Our compensation philosophy and programs are designed to attract, retain and motivate talented employees who will help us realize this vision, contributing at a high level for a long-term time horizon. Compensation objectives include:
• | attracting and retaining the talent needed to grow our business; |
• | providing a strong incentive for executives and key employees to work toward the achievement of our goals, including sustained stockholder value creation; and |
• | ensuring that the interests of management and our stockholders are aligned. |
We seek to achieve these objectives by providing compensation that is competitive with the practices within our market for talent and by linking compensation to both our overall performance and individual performance.
In addition, the Compensation Committee seeks to ensure that we maintain sound governance and compensation policies and practices. In designing and overseeing our executive compensation program, we strive to employ best practices and regularly assess our policies and practices.
WHAT WE DO | WHAT WE DON’T DO | |
A significant portion of our executive compensation program is dependent upon stock price appreciation and other variable, at-risk pay components Prior to making executive compensation decisions we review peer company compensation data We ensure management acts and thinks like stockholders through stock ownership guidelines We seek third-party executive compensation advice for the Compensation Committee from an independent consulting firm that does not perform any other services for Bloom A clawback policy for our CEO and our executive vice presidents | No Supplemental Executive Retirement Plan No automatic single trigger equity award acceleration upon a change of control No golden parachute excise tax gross-ups Executive officers may not pledge our common stock as collateral for any obligation Executive officers may not engage in transactions intended to hedge or offset the market value of our common stock owned by them No perquisites to any of our executive officers |
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Pay-for-Performance Philosophy
Consistent with our philosophy of aligning executive pay with our short-term and long-term performance, and to align the interests of management and stockholders, our compensation program is designed to provide the majority of executive compensation in the form of at-risk cash and equity incentives and long-term vesting stock awards. This section provides a discussionapproach ensures that the compensation opportunity for our named executive officers is aligned with the interests of our stockholders and focused on sustained stockholder value creation. As shown below, approximately 50% of the target total compensation awarded to our CEO and 30% awarded to other named executive officers was at-risk in the form of our cash annual incentive and performance-based equity, both of which were eligible to be earned by Chief Executive Officerbased on our level of achievement of rigorous financial goals.
COVID-19 Considerations
The Compensation Committee typically meets in the first quarter of the fiscal year to determine key elements of compensation for our named executive officers, including any cash compensation adjustments, equity awards, and Chairmanthe performance goals of any cash- and/ or equity-based incentive plan. In February 2020, the Compensation Committee approved threshold, target and maximum revenue and non-GAAP operating income goals that would be used to determine the cash incentive payout for our two other most highly compensatednamed executive officers for the fiscal year ended December 31, 2019. We referfirst quarter.
Following this decision, we began to these individualsclosely monitor the impact of the COVID-19 pandemic on our business as well our “named executive officers.” For 2019,compensation programs. Due to uncertainty of the economic conditions both inside and outside of Bloom, and taking into consideration the recommendation of our CEO, the Compensation Committee determined to postpone any salary increases and equity grant decisions, including for our named executive officers, were:that would otherwise have been approved in early 2020. In addition, we suspended payment of the first quarter bonus, which would have been earned at 124% of target based on our actual financial results.
In June 2020, following discussions regarding our approach to compensation during the COVID-19 pandemic, the Compensation Committee approved the following:
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• | Annual equity awards for our named executive officers in a mix of RSUs and |
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In August 2020, the Board also approved the following decisions regarding our 2020 cash incentive plan:
• | Payment of the first and second quarter bonus at 125% of target |
• | A framework for the third quarter of 2020 cash incentive plan that would evaluate achievement based on a qualitative review of executive officer and company performance |
Taking into consideration the ongoing nature of the pandemic as well as our strong performance despite global macro uncertainty, the Compensation Committee believed that moving forward with the 2020 cash incentive plan, including payments for the first half of the year and the approval of annual equity awards, was appropriate and in the best interest of Bloom and its stockholders. This approach recognized the strong contributions of our employees, including our senior leadership, in navigating the COVID-19 pandemic. In evaluating the challenges facing our employees and the desire to maintain competitive compensation programs that adequately reward strong
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performance and contributions, the Compensation Committee considered that 40% of our workforce was designated essential workers in 2020. In addition, we prioritized the safety and wellness of employees during a period of high stress both locally and globally. We provided our employees regular COVID-19 testing beginning in the summer and enforced safety protocols above and beyond CDC and local guidelines.
In October 2020, the Compensation Committee approved a 100% payout under the 2020 cash incentive plan for the third quarter of 2020. This decision was based on a broad evaluation of our financial and operational performance. At the same time, based on the increasing stability in our business despite the ongoing pandemic, the Compensation Committee approved revenue and operating goals that would be used to determine the 2020 cash incentive plan payouts for the fourth quarter and full fiscal year performance periods.
During a period of extraordinary volatility and uncertainty, the Compensation Committee maintained an ongoing focus on ensuring that our compensation programs continued to support our objectives. Although our 2020 compensation programs deviated from our historical approach and plan at the outset of the year, the Compensation Committee believes that the decisions made during 2020, including the use of discretion to reward the strong contributions of our employees and our positive financial performance despite the ongoing pandemic, the introduction of PSUs based on our financial performance, and the return to more quantitative performance measurements in the fourth quarter of 2020, were successful in supporting our performance during the year and rewarding our leadership team’s ability to navigate Bloom through a challenging year.
Executive Compensation Program Design
Our current executive compensation program is intended to align executive compensation with our business objectives and to enable us to attract, retain and reward executive officers who contribute to our long-term success and, by extension, that of our stockholders. For 2019, theThe material elements of our executive compensation program were:for 2020 are described below.
Compensation Element | Designed to Reward | Relationship to Business Objectives | ||
Base Salary | Knowledge and experience, as well as past and present scope of responsibilities | Attracts and retains an effective management team | ||
Non-Equity Incentive Plan (i.e., based cash bonus) | Success in achieving quarterly and annual performance results | Helps create a “pay for performance” culture
Motivates and rewards our executives for achieving performance goals that contribute to our long-term success and that of our stockholders | ||
Equity Awards | Success in achieving long-term, sustainable results | Aligns executive goals and objectives with the interests of our stockholders
Focuses our executives on our long-term performance | ||
Periodic Bonuses (Cash and/or Equity) | Exceptional contribution to our business, outside of the performance targets set in the non-equity incentive plan program | Encourages |
The Compensation Committee does not have a set formula by which it determines how much of the executive’s compensation is fixed (i.e., base salary) rather than variable or “at risk” (i.e., performance basedperformance-based equity and non-equity incentives, periodic or “spot” bonuses). The Compensation Committee generally targets compensation levels at approximately the 50th 50th percentile of our executive compensation peer group, but also takes into account the scope and extent of each executive’s past and present role and responsibilities, his or her skills, knowledge and experience, and any additional relevant factors, including retention and performance incentives.
Bloom doesWe do not provide fringe benefits such as a car allowance or other perquisites to itsour executive officers. The executive officers participate in Bloom’sour standard health and welfare programs, including group health and life insurance, dental and vision insurance.insurance that all other employees participate in. They are also eligible to participate in a 401(k) retirement savings plan and, other than Mr. Sridhar who is not currently eligible, are offered an opportunity to participate in ourthe Bloom Energy Corporation 2018 Employee Stock Purchase Plan.Plan (the “2018 ESPP”). We do not match employee contributions to our 401(k) retirement savings plan but have the discretion to do so in the future.
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OversightTable of Executive Compensation ProgramContents
EXECUTIVE COMPENSATION
Executive officerCompensation Decision-Making Process
Determination of Compensation Awards
The Compensation Committee’s goal is generally to target elements of compensation decisions are made bywithin a competitive range, using a balanced approach that does not use rigid percentiles to target pay levels for each compensation element. For 2020, the Compensation Committee reviewed each element of compensation described below and set the target total direct compensation opportunities of our executive officers after taking into consideration the following factors:
• | a compensation analysis of competitive market data performed by Compensia; |
• | each executive officer’s scope of responsibilities; |
• | each executive officer’s skill set; |
• | each executive officer’s prior experience; |
• | each executive officer’s individual performance and contribution; |
• | each executive’s time in his or her position; |
• | the recommendations of our CEO; and |
• | general market conditions. |
The Compensation Committee. OurCommittee does not assign relative weights or rankings to any of these factors and does not solely use any quantitative formula, target percentile or multiple for establishing compensation among the executive officers or in relation to the competitive market data.
Role of the Committee
The Compensation Committee is responsible for establishingoverseeing our generalexecutive compensation philosophyprogram and settingall related policies and practices. The Compensation Committee operates pursuant to a formal written charter approved by the Board, which is available on our website at https://investor.bloomenergy.com/.
At least annually, the Compensation Committee reviews our executive compensation program and formulates recommendations for the consideration and approval by the Board of the various elements of our named executive officers’ compensation, as well as any employment arrangements with our named executive officers. The Compensation Committee is responsible for taking action with respect to compensation that will attract and retain the highest quality executives that will clearly articulate the relationship of corporate performance to executive compensation and that will reward executives for our progress.
The Compensation Committee meets regularly during the fiscal year both with and without the presence of our CEO and other named executive officers. The Compensation Committee also discusses compensation issues with our CEO (except with respect to his own compensation) and other members of the Board between its formal meetings.
Role of Management
The compensation of all of our named executive officers is determined by the Compensation Committee. In discharging its responsibilities, the Compensation Committee also works with members of our management, including our CEO. Our management assists the compensation levelscommittee by providing information on corporate and individual performance, competitive market data, and management’s perspective and recommendations on compensation matters.
Our CEO attends the Compensation Committee meetings and discusses with the Compensation Committee the compensation and performance of eachall executive officers, other than himself. Our CEO bases his recommendations in part upon his review of the performance of our executive officers. OurThe Compensation Committee has retainedmay exercise its discretion in modifying any recommended compensation adjustments or awards to such named executive officers. The Compensation Committee reviews and discusses these recommendations and proposals with our CEO and uses them as one factor in determining and approving the servicescompensation for our executive officers.
Role of Compensia, anthe Consultant
The Compensation Committee relies on its independent compensation consultant to assistprovide advice on matters relating to the compensation of our executives and non-employee directors. Compensia, a national compensation consulting firm, served in this capacity during 2020.
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A representative of Compensia attended Compensation Committee meetings in 2020 and provided the following assistance to the Compensation Committee:
• | Assisted in the review and updating of our compensation peer group |
• | Reviewed the competitiveness of compensation of our named executive officers including base salary, annual cash awards and long-term incentive awards |
• | Provided advice with respect to compensation best practices and market trends for our named executive officers and directors |
• | Reviewed and provided input on the Compensation Discussion and Analysis section of our Proxy Statement |
• | Assisted with the design of the short-term and long-term incentive compensation plans with appropriate performance goals and targets for our named executive officers and other executives |
• | Provided ad hoc advice and support throughout the year |
Compensia reports directly to the Compensation Committee in evaluating and refining our executive compensation program. In 2019, Compensia provided advice regarding, amongno services to us other things, peer group composition, a competitive market analysis, and equity strategy. Compensia also provides advice on our director compensation program.than the consulting services to the Compensation Committee. The Compensation Committee has assessedreviews the objectivity and independence of Compensia pursuant to NYSE rulesthe advice provided by Compensia. In 2020, the Compensation Committee considered the specific independence factors adopted by the SEC and the Company concludedNYSE and determined that theCompensia is independent and that its work performed by Compensia for the Compensation Committee did not raise any conflicts of interest.
Role of Competitive Market PositioningData
As part of its annual compensation review process, the Compensation Committee generally reviews an analysis prepared by Compensia of market pay practices for positions similar to the positions of our named executive officers and other key executives, adjusted to take into account differences, if any, in the scope of the executive officers’ responsibilities compared to their counterparts in positions with similar titles in comparable companies. The list of the fifteen companies used for comparison purposes (our “peer group”) for 2019 is as follows:
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TheIn September 2019, the Compensation Committee, with the assistance of Compensia, reviewed our executive compensation peer group. The executive compensation peer group approved by the Compensation Committee to support 2020 pay decisions was comprised of technology sector companies focusing on energy/alternative energy business, and companies with complex product and manufacturing operations. The peer group companies generally had revenue between $200M and $2B, a market capitalization between $1.5B and $12B, and are headquarteredAdditional factors that were considered in identifying peers included: