| Avery Morehas served as a member of our Board of Directors since 2006. Mr. More was the sole seed investor in the Company through his fund, ORR Partners I, L.P., and has participated in all successive rounds. Mr. More joined Menlo Ventures in 2013 as a venture partner, and focuses on investments in technology companies. Prior to joining Menlo Ventures, Mr. More was the president and chief executive officer of CompuCom Systems Inc. from 1989 to 1993. Mr. More currently serves on the board of directors of Vidyo, Inc., Takipi, BuzzStream, AppDome, and HolistiCyber Ltd. Mr. More has specific attributes that qualify him to serve as a member of our Board, including his historical knowledge of our company and his experience as a director of other private and public technology companies.
Marcel Gani has served as a member of our Board of Directors since 2015. From 2005 to 2009, Mr. Gani lectured at Santa Clara University, where he taught classes on accounting and finance. In 1997, Mr. Gani joined Juniper Networks, Inc. where he served as chief financial officer and executive vice president from December 1997 to December 2004, and as chief of staff from January 2005 to March 2006. Prior to joining Juniper, Mr. Gani served as chief financial officer at various companies, including NVIDIA Corporation, Grand Junction Networks, Primary Access Corporation and Next Computers. Mr. Gani served as corporate controller at Cypress Semiconductor from 1991 to 1992. Prior to joining Cypress Semiconductor, Mr. Gani worked at Intel Corporation from 1978 to 1991. Mr. Gani holds a B.A. in Applied Mathematics from Ecole Polytechnique Federal and an M.B.A. from University of Michigan, Ann Arbor. Mr. Gani serves on the board of directors of Infinera, where he is a member of the audit committee and the chairman of the Compensation Committee. Mr. Gani brings valuable financial and business experience to our Board through his years of experience as a chief financial officer with public companies and experience as a director of other public companies.
Tal Payne has served as a member of our Board of Directors since 2015. Tal Payne brings over 15 years of financial management experience, serving as Chief Financial Officer in Check Point Software Technologies Ltd. (“Check Point”), an Israeli multinational provider of software and combined hardware and software products for IT security, since joining in 2008 and as Chief Financial and Operations Officer since 2015. Ms. Payne oversees Check Point’s global operations and finance, including investor relations, legal, treasury, purchasing and facilities. Prior to joining Check Point, Ms. Payne served as Chief Financial Officer at Gilat Satellite Networks Ltd., where she held the role of Vice President of Finance for over five years. Ms. Payne began her career as a CPA in public accounting at PricewaterhouseCoopers. Ms. Payne holds a B.A. in Economics and Accounting and an Executive M.B.A., both from Tel Aviv University. Ms. Payne is a certified public accountant. Ms. Payne brings valuable financial and business experience to our Board through her years of experience as a chief financial officer with publicly traded companies.
The Board of Directors recommendssince 2015.From 2005 to 2009, Mr. Gani lectured at Santa Clara University, where he taught classes on accounting and finance. In 1997, Mr. Gani joined Juniper Networks, Inc. where he served as chief financial officer and executive vice president from December 1997 to December 2004, and as chief of staff from January 2005 to March 2006. Prior to joining Juniper, Mr. Gani served as chief financial officer at various companies, including NVIDIA Corporation, Grand Junction Networks, Primary Access Corporation and Next Computers. Mr. Gani served as corporate controller at Cypress Semiconductor from 1991 to 1992. Prior to joining Cypress Semiconduc-tor, Mr. Gani worked at Intel Corporation from 1978 to 1991. Mr. Gani holds a vote FORB.A. in Applied Mathematics from Ecole Polytechnique Federal and an M.B.A. from University of Michigan, Ann Arbor. Mr. Gani serves on the electionboard of eachdirectors of Infinera Corp., where he is a member of the threeAudit Committee and the chairman of the Compensation Committee. Mr. Gani brings valuable financial and business experience to our Board through his years of experience as a chief financial officer with public companies and experience as a director nominees.of other public companies.
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| has served as a member of our Board of Directors since 2015. Tal Payne brings over 15 years of financial management experience, serving as Chief Financial Officer in Check Point Software Technologies Ltd. (“Check Point”), an Israeli multinational pro-vider of software and combined hardware and software products for IT security, since joining the company in 2008 and as Chief Financial and Operations Officer since 2015. Ms. Payne oversees Check Point’s global operations and finance, including investor relations, legal, trea-sury, purchasing and facilities. Prior to joining Check Point, Ms. Payne served as Chief Financial Officer at Gilat Satellite Networks Ltd., where she held the role of Vice President of Finance for over five years. Ms. Payne began her career as a CPA in public accounting at Pricewaterhouse-Coopers. Ms. Payne holds a B.A. in Economics and Accounting and an Executive M.B.A., both from Tel Aviv University. Ms. Payne is a certified public accountant. Ms. Payne brings valuable financial and business experience to our Board through her years of experience as a chief financial officer with publicly traded companies. Ms. Payne currently also serves on the board of ironSource. | | |
| has served as a member of our Board of Directors since 2010. Since 2006, Mr. Cheifetz has served as a Partner at Lightspeed Venture Partners, a venture capital firm, where he focuses on investment activity in Israel in areas of interest, including the Internet, media, mobile, communications, software, semiconductors, renewable energy and healtcare. Prior to joining Lightspeed Venture Partners, Mr. Cheifetz was a partner with Star Ventures from 2003 to 2006. Before joining Star Ventures, Mr. Cheifetz was a serial entrepreneur and the founder, CEO and Chairman of several privately held software companies, most of which have been acquired. Mr. Chiefetz holds a B.Sc. in Applied Mathematics from Tel Aviv University and a M.Sc. in Applied Mathematics and Computer Science from the Weizmann Institute of Science. Mr. Cheifetz’s historical knowledge of our company and extensive experience in working with technology companies qualify him to serve as a member of our Board.
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| has served as a member of our Board of Directors since 2010. Mr. Inbar has been a venture partner at Viola Ventures, an Israeli-based venture capital firm that invests primarily in early stage companies in the fields of Software, Communications, Semiconductors, Internet, Media, and Consumer Electronics, since 2006. Previously, Mr. Inbar served as the President of ECI Telecom Ltd., a global telecom networking infrastructure provider, from November 1999 to December 2005 and as its Chief Executive Officer from February 2000 to December 2005. Mr. Inbar has served on the board of directors of Alvarion Ltd. (formerly Nasdaq: ALVR), a company that sells broadband wireless and Wi Fi products, from September 2009 until September 2013 and was a member of its audit and compensation committees and served as chairman of its nominating and governance committee. Mr. Inbar served as chairman of the board of C nario Ltd., a global provider of digital signage software. Mr. Inbar served on the board of directors of Archimedes Global Ltd. from 2008 until 2018, a company which provides health insurance and health provision in Eastern Europe, and serves on the board of directors of MaccabiDent Ltd., the largest chain of dental service clinics in Israel. In 2012, Mr. Inbar joined the board of directors of Comverse Technology Inc. (formerly Nasdaq: CNSI), where he was a member of the audit committee and corporate governance committee until and thereafter at Xura ltd until August 2016, when the company was sold and turned into Mavenir Ltd. Mr. Inbar currently serves on the Board of Musico, a next generation music software solution since 2016. In 2017 Mr. Inbar was appointed as chairman of Cellwize wireless Technologies pty Ltd. a provider of software Orchestration and automation solutions to tier -1 MNO’s deploying 5G networks. Mr. Inbar holds a B.A. in Economics and Business Administration from Bar-Ilan University, Israel. Mr. Inbar’s historical knowledge of our company and extensive experience in working with technology companies qualify him to serve as a member of our Board.
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| (a director effective June 1, 2021) is the former CEO and Chairman of SaaS Company Clear Standards, Inc. an energy management and sustainability software company. She also served as CEO of Key Supercomputer, focused on seismic analytics, applying AI machine learning technology to pinpoint reserves using predictive and prescriptive analytics, from 2008-2010 and as CEO of NCI, a food manufacturer creating Nutraceutical and Functional Food products, from 1991-1994. In addition, Ms. Atkins is a highly acclaimed public company Board Director and author. Ms. Atkins has served on some of the world’s most visible global public company boards. For 20 years, she has worked behind the scenes at companies like Schneider, Lucent, Vonage, SunPower Corp, Paychex and NASDAQ Inc. Ms. Atkins started her business career as an entrepreneur co-founding several successful high tech, energy and consumer companies including Ascend Communications. Ms. Atkins is an effective operational leader, having served as CEO three times and she has a strong global and operational perspective encompassing the full range of experience from growth to restructuring and is a recognized ESG and Governance thought leader. Her corporate board experience covers industries including Technology, Energy Management, Solar, Industrial Automation, Manufacturing, Automotive, and Logistics. Ms. Atkins brings the knowledge of leveraging next gen digital technologies, is an innovative entrepreneur for tech enablement for the future of work for manufacturing 4.0 initiatives (i.e. applying industrial Internet of Things, or IIoT, for preventative maintenance in the Industrial, Automotive, and Aerospace sectors). Ms. Atkins has a global, broad perspective on energy from her role as Lead Director at SunPower, the renewable solar company, and Schneider, the energy efficiency infrastructure monitoring and industrial automation process control company, where she served from 2005-2012 and 2011 – 2019, respectively. Her areas of experience include Artificial Intelligence, Seismic Analytics, Internet of Things (IoT), using technology to digitize processes driving accuracy and productivity, Cyber Security, Mobile and SaaS. Ms. Atkins currently serves on the public boards of Wynn Resorts and SL Green, as well as on the private company board for Volvo Car Corporation. Ms. Atkins holds a degree in liberal arts from the University of Massachusetts, Magna Cum Laude. |
  Directors and Corporate Governance Board Composition
Our Board of Directors currently consists of seven members.
In accordance with the amended and restated certificate of incorporation and the amended and restated bylaws, our Board of Directors is divided into three classes with staggered terms. At each annual meeting of stockholders, the successors to directors whose terms then expire will be elected to serve.
Directors for a particular class will be elected for terms expiring at the third annual meeting of stockholders following their election. As a result, only one class of directors will be elected at each annual meeting of our stockholders, with the other classes continuing for the remainder of their respective terms. Each director’s term continues until the election and qualification of his or her successor, or his or her earlier death, resignation or removal.
Board Independence
Under the listing requirements and Nasdaq rules, independent directors must comprise a majority of a listed company’s board of directors. Our Principles of Corporate Governance (the “Principles”) provide that an “independent” director is a director who meets the Nasdaq definition of independence. The Principles also provide that, under applicable Nasdaq rules, the members of each of the Audit and Compensation Committees are subject to additional, heightened independence criteria applicable to directors serving on these committees. Our Board of Directors has undertaken a review of its composition, the composition of its committees and the independence of each director (both generally, and, where applicable, under heightened independence criteria applicable to certain committees). Based upon information requested from and provided by each director concerning his background, employment and affiliations, including family relationships, our Board of Directors has determined, based on the recommendation of our nominatingNominating and corporate governance committee,Corporate Governance Committee, that each of Messrs. Avida, Cheifetz, Gani, Inbar, and More and Zafrir, Ms. Atkins and Payne is “independent” under Nasdaq rules. In making the independence determinations, our Board of Directors assessed the current and prior relationships that each non-employee director has with us and all other relevant facts and circumstances, including the beneficial ownership of our capital stock by each non-employee director and affiliated persons and entities and any payments made to and from entities affiliated with the directors. Based on these assessments, for each director deemed to be independent, our Board of Directors made a determination that, because of the nature of the director’s relationships or the amounts involved, the director had no relationships with the Company or our management that, in the judgment of the Board, would impair the director’s independence.
Leadership Structure
Guy Sella serves as Chief Executive Officer and Chairman of the Board. Our Board of Directors believes that the current board leadership structure, coupled with a strong emphasis on board independence, provides effective independent oversight of management while allowing the Board and management to benefit from Mr. Sella’s demonstrated senior leadership skills, expertise from years of experienceAs described in electronics industries, and his experience and familiarity with our business as Chief Executive Officer. Independent directors and management sometimes have different perspectives and roles in strategy development. Our independent directors bring experience, oversight and expertise from outside of our Company, while Mr. Sella brings company-specific experience and expertise. The Board of Directors believes that Mr. Sella’s combined role enables strong leadership, creates clear accountability and enhances our ability to communicate our message and strategy clearly and consistently to stockholders. The Board does not currently have a lead independent director or a standing presiding director, althoughCorporate Governance Guidelines, the independent directors of themeet in executive sessions without management present at every regular Board may designate a director to lead the meetings of the independent directors, as appropriate.
Executive Sessions of Independent Directors
In ordermeeting to promote open discussion among independent directors.
Leadership Structure and succession planning
In 2019, we separated the roles of Board Chairman and CEO. In August 2019, Mr. Zafrir became the Chairman of our Board of Directors. On February 19, 2020, Mr. Lando assumed the role as the Company’s CEO on a permanent basis and was appointed to serve as a member of the Board of Directors. Mr. Lando was identified by the Company as the best candidate to lead the continued growth and innovative spirit of our Company, along with the support and guidance of Mr. Zafrir as independent Chairman and all of the other independent Board members.
 The Board believes that its current leadership structure best serves the objectives of the Board’s independent oversight of management, the ability of the Board to carry out its roles and responsibilities on behalf of the shareholders, and the Company’s overall corporate governance. | The Board also believes that the current separation of the Chairman and CEO roles allows the CEO to focus his time and energy on operating and managing the Company and enables him to leverage the experience and perspectives of the Chairman of the Board and the other experienced Board members. The Board and the Nominating and Corporate Governance Committee periodically review the leadership structure and may make changes in the future. |
Board Diversity and Refreshment
The Board conducts regular renewal and refreshment assessment. As part of such assessment, while the Board has not adopted a formal policy with regard to the consideration of diversity in identifying director nominees, the Nominating & Governance Committee endeavors to include women and minority director candidates for consideration. The Nominating & Governance Committee regularly reviews the composition of our Board and assesses the skills and characteristics of our directors with a view towards enhancing the composition of our Board to support the Company’s evolving strategy.
The Board evaluates its diversity of occupational and personal backgrounds and viewpoints as part of its annual re-nomination process. Each of our director nominees has achieved a high level of success in his or her career, including extensive experience in technology companies and venture capital firms, as well as historical knowledge of our company for those that have served several years on our Board. Based on their experiences, each has been directly involved in the challenges related to setting the strategic direction and managing the financial performance, personnel, and processes of large, complex organizations. Each has had exposure to effective leaders and has developed the ability to judge leadership qualities. The Nominating and Corporate Governance Committee consults with other members of the Board and management in identifying and evaluating candidates for director.
The Company values diversity on a company-wide basis and seeks to achieve a diversity of occupational and personal backgrounds and viewpoints in its executive management team and on the Board of Directors. In 2021, we appointed Ms. Atkins to our Board of Directors (effective June 1, 2021). The Company aspires to increase the presence of women and ethnically diverse persons in executive and management positions in connection with our sustainability strategy regarding the promotion of gender parity and equal pay. To this end, the Company has already more than doubled the total number of women employees at all levels during the past three fiscal years.
Additionally, the Board believes that diversity with respect to tenure is important in order to provide the Company with balanced views and insights from Board members who have a policy of conducting executive sessions of independent directors duringdeep acquaintance with the Company’s history as well as a fresh perspective from new Board members. In each regularly scheduled meeting of the Board.past three years a new Board member joined our Board, with Mr. Nadav Zafrir joining in 2019 as Chairman of the Board, Mr. Zvi Lando, our CEO, joining as a member of the Board in 2020 and most recently, Ms. Atkins, joining our Board effective as of June 1, 2021 in order for her to maintain no more than four board commitments simultaneously and to replace Mr. Dan Avida who resigned from our Board in September of 2020.
*includes Ms. Betsy Atkins appointed as a member of the Board effective June 1, 2021.
Principles of Corporate Governance
The Company is committed to robust corporate governance, ethical conduct, sustainability and accountability of our senior executives and board members. Our Principles of Corporate Governance are available under “Corporate Governance” on our website at http://investors.solaredge.com.
Corporate Governance Highlights
Board and Committee Practices * Includes Ms. Betsy Atkins who has been appointed to the Board effective as of June 1, 2021.
Accountability and Other Governance Practices
Board oversight of incentive structure for executives
Our Compensation Committee annually reviews and approves incentive structure,targets,and objectives in alignment with the Company's business strategy | Financial and specific performance-based incentive targets are set by our Compensation Committee to reward financial and operational performance that advances the Company's short- and long-term strategic goals |
Sustainability ”With a core business that is inherently focused on mitigating climate change by making solar power more affordable and more efficient, sustainable development has always been at the core of our thinking and planning.” In 2020, the Company made significant progress in our Environmental, Social and Governance (ESG) performance and disclosure. At the start of the year, SolarEdge’s senior management embarked upon a comprehensive strategic process which resulted in a clear definition of key stakeholder groups, a list of material sustainability topics intended to represent the Company’s most important impacts on stakeholders, and a strategy framework with 2025 goals and targets. This process was conducted with the support of an expert external advisor and involved our senior executives and other senior managers within the Company. The Board of Directors of SolarEdge approved and endorsed this strategy which represents an important component in the pursuit of SolarEdge’s business growth objectives
| Our social purpose: | | Our social mission: | | | | | | | | | | | | | | To power the future of energy so we can all enjoy better living and a cleaner, greener future. | | Shaping the future of sustainable energy production, energy storage and e-mobility through innovation. | | Innovation, excellence and integrity. | | | | | | | | | | | | Our sustainability material topics: | | Affordable Clean Energy | | Product Development and Innovation | | | Responsible Employer | | Resource Efficiency | | Community Investment | | Human Rights | | Smart Energy Solutions | | Product Sustainability | | Climate Resilience | | Ethical Sourcing & Supplier Management | | | Ethical and Compliant Conduct | | | | | | | | | | | | |
In order to increase and enhance transparency for the benefit of our stakeholders, in 2020, we significantly expanded our Environmental, Soc ial and Governance (ESG) reporting and disclosure: 10 We published our second annual Sustainability Report,prepared for the first time consistent with the leading global sustainability disclosure standards,GRI(Global Reporting Initiative) and also SASB (Sustainability Accounting Standards Board) intended to align the Company's disclosure with leading corporations around the world and with the expectations of investors and other stakeholders
We published three newly developed position statements: | | | | | |  Our Approach to Compliance, describing the importance of operating our business in line with ethical standards of conduct to the Company's business.Our Approach to Human Rights, describing the Company's commitment to conduct our business in a manner that aims to respect the rights and dignity of all people. Our Approach to Environmental Stewardship and Climate Resilience, describing how the Company seeks to minimizes the negative impacts of our operations on the environment. | |
We commenced work on additional ESG position statements to further clarify our stand on topics of importance to our stakeholders. For information regarding our sustainability strategy, see our 2019 Sustainability Report, available through the Sustainability page of our website.
Code of Business Conduct and Ethics
We have adopted a code of business conduct and ethics that applies to all of our officers and employees, including our Chief Executive Officer and Chief Financial Officer and those officers and employees responsible for financial reporting. We have also adopted a code of business conduct and ethics that applies to our directors. Our codes of business conduct and ethics are posted on the investor relations section of our website at http://investors.solaredge.com.investors.solaredge.com. We intend to disclose future amendments to our codes of business conduct and ethics, and any waivers of their provisions that we grant to our executive officers and directors, on our website within four business days following the date of the amendment or waiver. In 2021, we currently plan to publish a Supplier Code of Conduct to expressly establish our expectations regarding the behavior and practices of suppliers with whom we work.
Board Meetings
During 2018,2020, the Board of Directors held sevennine meetings. Each director attended at least 75%100% of the aggregate of the total number of meetings of the Board of Directors held during the period such director served and each of our directors attended at least 75% of the aggregate of the total number of the meetings held by any of the committees of the Board of Directors on which such director served during such period.
The Board’s Role in Risk Oversight
The Board of Directors oversees the Company’s risk management process. The Board oversees a Company-wide approach to risk management, designed to enhance stockholder value, support the achievement of strategic objectives and improve long-term organizational performance. The Board determines the appropriate level of risk for the Company generally, assesses the specific risks faced by the Company and reviews the steps taken by management to manage those risks. The Board’s involvement in setting the Company’s business strategy facilitates these assessments and reviews, culminating in the development of a strategy that reflects both the Board’s and management’s consensus as to appropriate levels of risk and the appropriate measures to manage those risks. Pursuant to this structure, risk is assessed throughout the enterprise, focusing on risks arising out of various aspects of the Company’s strategy and the implementation of that strategy, including financial, legal/compliance, operational/strategic, health and safety, and compensation risks. The Board also considers risk when evaluating proposed transactions and other matters presented to the Board, including material acquisitions and financial matters.
While the Board maintains the ultimate oversight responsibility for the risk management process, its committees oversee risk in certain specified areas. In particular, the Audit Committee reviews and discusses the Company’s practices with respect to risk assessment and risk management. The Audit Committee also focuses on the adequacy and effectiveness of the Company’s internal controls. In 2019, the Company appointed a Senior Director of Risk Management and Internal Audit and expanded its internal audit team in order to support audit continuity by a function that is deeply acquainted with the Company. The Audit Committee receives regular reports from the Company’s Senior Director of Risk Management and Internal Audit on the Company’s internal system of audit and financial controls, enterprise risk information, and the periodic report of internal audit activities. In addition, the Audit Committee oversees the Company’s compliance program with respect to legal and regulatory requirements, including the Company’s codes of conduct and policies and procedures for monitoring compliance. The Compensation Committee oversees the assessment of the risks related to the Company’s compensation policies and programs applicable to its officers and other employees. Management regularly reports on applicable risks to the relevant committee or the Board, as appropriate, including reports on significant Company projects, with additional review or reporting on risks being conducted as needed or as requested by the Board and its committees.
 Board Committees Audit Committee
Our Board of Directors has established an audit committee,Audit Committee, which operates under a written charter that is available on our website at http://investors.solaredge.com and that satisfies the applicable standards of the SEC and the listing requirements of Nasdaq.. The audit committee’sAudit Committee’s responsibilities include, but are not limited to: · | appointing, compensating, retaining, evaluating, terminating and overseeing our outside auditor; |
· | at least annually, reviewing the independence of our outside auditor; |
· | reviewing with our independent registered public accounting firm the matters required to be reviewed by applicable auditing requirements; |
· | approving in advance all audit and permissible non-audit services to be performed by our independent registered public accounting firm; |
· | meeting to review and discuss with management and the outside auditor the annual audited and quarterly financial statements of the Company and the independent auditor’s reports related to the financial statements; |
11Appointing, compensating, retaining, evaluating, terminating and overseeing our outside auditor;
At least annually, reviewing the independence of our outside auditor;· | receiving reports from management regarding, and reviewing and discussing the adequacy and effectiveness of, the Company’s disclosure controls and procedures; |
Reviewing with our independent registered public accounting firm the matters required to be reviewed by applicable auditing requirements;· | establishing and overseeing procedures for the confidential anonymous submission of concerns regarding questionable accounting, internal controls, auditing and federal securities law matters; |
Approving in advance all audit and permissible non-audit services to be performed by our independent registered public accounting firm;· | establishing and periodically reviewing policies and procedures for the review, approval, and ratification of related person transactions; and |
Meeting to review and discuss with management and the outside auditor the annual audited and quarterly financial statements of the company and the independent auditor’s reports related to the financial statements;· | Receiving reports from management regarding, and reviewing and discussing the adequacy and effectiveness of, the company’s disclosure controls and procedures;Establishing and overseeing procedures for the confidential, anonymous submission of concerns regarding questionable accounting, internal controls, auditing and federal securities law matters; Establishing and periodically reviewing policies and procedures for the review, approval, and ratification of related person transactions; and Overseeing the preparation of the report of the audit committee that SEC rules require to be included in our annual proxy statement. |
Our audit committee that sec rules require to be included in our annual proxy statement.
Our Audit Committee, which met fiveeight times in the year ended December 31, 2018,2020, consists of Marcel Gani, Tal Payne and Doron Inbar, with Marcel Gani serving as chairman. The composition of our Audit Committee complies with allthe applicable requirements of the SEC and the listing requirements of NASDAQ.Nasdaq. All of our Audit Committee members meet the additional, heightened independence criteria applicable to directors serving on the Audit Committee under NASDAQthe Nasdaq rules and SEC rules. Our Board of Directors has determined that Marcel Gani and Tal Payne each qualify as an “audit committee“Audit Committee financial expert” as defined by applicable SEC rules and has the requisite financial sophistication as defined under the applicable NASDAQ Global Select MarketNasdaq rules and regulations.
Compensation Committee
Our Board of Directors has established a Compensation Committee, which operates under a written charter that is available on our website at http://investors.solaredge.com and that satisfies the applicable standards of the SEC and the listing requirements of Nasdaq.. The Compensation Committee’s responsibilities include, but are not limited to:
· | overseeing our overall compensation philosophy, policies, and programs; |
Overseeing our overall compensation philosophy, policies, and programs; · | reviewing and approving corporate goals and objectives relevant to the compensation of our Chief Executive Officer, evaluating the Chief Executive Officer’s performance in light of those goals and objectives, approving grants of equity awards to the Chief Executive Officer and recommending to the independent directors the Chief Executive Officer’s compensation level based on this evaluation; |
Reviewing and approving corporate goals and objectives relevant to the compensation of our chief executive officer, evaluating the chief executive officer’s performance in light of those goals and objectives, approving grants of equity awards to the chief executive officer and recommending to the independent directors the chief executive officer’s compensation level based on this evaluation;· | overseeing the evaluation of other executive officers and approving equity awards to these officers, and setting their compensation based upon the recommendation of the Chief Executive Officer; |
Overseeing the evaluation of other executive officers and approving equity awards to these officers, and setting their compensation based upon the recommendation of the chief executive officer;· | reviewing and approving the design of other benefit plans pertaining to executive officers; |
Reviewing and approving the design of other benefit plans pertaining to executive officers;· | reviewing and approving employment agreements and other similar arrangements between us and our executive officers; and |
Reviewing and approving employment agreements and other similar arrangements between us and our executive officers;· | overseeing preparation of the report of the Compensation Committee to the extent required by SEC rules to be included in our annual meeting proxy statement. |
Overseeing preparation of the report of the compensation committee to the extent required by SEC rules to be included in our annual meeting proxy statement; andOverseeing the company’s strategies and policies related to human capital management, including with respect to matters such as diversity and inclusion.
Our Compensation Committee, which met four times during the year ended December 31, 2018,2020, consists of Avery More, Dan AvidaNadav Zafrir, and Doron Inbar, with Avery More serving as chairman. The composition of our Compensation Committee meets the requirements for independence under the applicable rules and regulations of the SEC and the Nasdaq Global Select Market. Each member of the Compensation Committee is also a non-employee director, as defined pursuant to Rule 16b-3 promulgated under the Exchange Act, and an outside director, as defined pursuant to Section 162(m) of the Internal Revenue Code of 1986, as amended.Act. Compensation Committee Interlocks and Insider Participation
During 2020, our Compensation Committee consisted of Avery More, Doron Inbar, and Dan Avida who was replaced by Nadav Zafrir following Mr. Avida’s resignation. None of the members of our Compensation Committee is, or was during the year ended December 31, 2018,2020, an officer or employee of the Company. None of our executive officers currently serves, or in the past year has served, as a member of the Board of Directors or compensation committee of any entity that has one or more executive officers serving on our Board of Directors or Compensation Committee. Nominating and Corporate Governance Committee
Our Board of Directors has established a nominatingNominating and corporate governance committee,Corporate Governance Committee, which operates under a written charter that is available on our website at http://investors.solaredge.com and that satisfies the applicable standards of the SEC and the listing requirements of Nasdaq. The nominatingNominating and corporate governance committee’sCorporate Governance Committee’s responsibilities include, but are not limited to: · | developing and recommending to the Board criteria for identifying and evaluating director candidates and periodically reviewing these criteria; |
· | identifying individuals qualified to become members of our Board of Directors, consistent with criteria approved by our Board of Directors; |
Developing and recommending to the board criteria for identifying and evaluating director candidates and periodically reviewing these criteria; · | assessingIdentifying individuals qualified to become members of our board of directors, consistent with criteria approved by our board of directors;Assessing the contributions and independence of incumbent directors in determining whether to recommend them for reelection to the board; Developing and recommending to our board of directors in determining whether to recommend them for reelection to the Board; |
· | developing and recommending to our Board of Directors a set of corporate governance guidelines and principles; |
· | establishing procedures for the consideration of Board candidates recommended by the Company’s stockholders; |
· | recommending to the Board candidates to be elected by the Board to fill vacancies and newly created directorships and candidates for election or reelection at each annual stockholders’ meeting; |
· | periodically reviewing the Board’s leadership structure, size, composition, and functioning; |
· | overseeing succession planning for positions held by executive offices; |
· | overseeing the evaluation of the Board and its committees; and |
· | annually reviewing the compensation of directors for service on the Board and its committees and recommend changes in compensation to the Board, as appropriate. |
Our nominating and corporate governance committee,guidelines and principles;
Establishing procedures for the consideration of board candidates recommended by the company’s stockholders; Recommending to the board candidates to be elected by the board to fill vacancies and newly created directorships and candidates for election or reelection at each annual stockholders’ meeting; Periodically reviewing the board’s leadership structure, size, composition, and functioning; Overseeing succession planning for positions held by executive offices; Overseeing the evaluation of the board and its committees; Annually reviewing the compensation of directors for service on the board and its committees and recommend changes in compensation to the board, as appropriate; and Overseeing and making recommendations to the board regarding sustainability matters.
Our Nominating and Corporate Governance Committee, which met twice during the year ended December 31, 2018,2020, consists of Avery More, Nadav Zafrir and Yoni Cheifetz, and Dan Avida, with Avery More serving as chairman. The composition of our nominating and corporate governance committee meets the requirements for independence under the applicable rules of the Nasdaq Global Select Market.
Policy Regarding Stockholder Recommendations
The Company identifies new director candidates through a variety of sources. The nominatingNominating and corporate governance committeeCorporate Governance Committee will consider director candidates recommended by stockholders in the same manner it considers other candidates, as described below.
Stockholders seeking to recommend candidates for consideration by the nominatingNominating and corporate governance committeeCorporate Governance Committee should submit a recommendation in writing describing the candidate’s qualifications and other relevant biographical information and provide confirmation of the candidate’s consent to serve as director. Please submit this information to the Corporate Secretary at 1 Hamada Street, Herziliya Pituach, Israel, 4673335.
Stockholders may also propose director nominees by adhering to the advance notice procedure described under “Stockholder Proposals” elsewhere in this Proxy Statement.
Stockholder Engagement and Communication Policy
Understanding the issues that are important to our stockholders is critical in ensuring that we address their interests in a meaningful and effective way. The Company engages with our stockholders on a regular basis to discuss a range of topics, including our performance, strategy, risk management, executive compensation, sustainability, diversity and corporate governance. We recognize the value of taking our stockholders’ views into account. Dialogue and engagement with our stockholders helps us understand how they view us and set goals and expectations for our performance.
The Company’s engagement with its stockholders takes many forms and is a year-round activity. The Company’s CEO and CFO participateChief Financial Officer participates in numerous investor conferences and conductconducts non deal roadshows in various locations in and outside of the U.S. These meetings provide an opportunity for us to maintain an active dialogue with our stockholders to ensure their perspectives are thoughtfully considered. During 2020 our Chief Financial Officer and other members of our Investment Relations team engaged in various meetings and conferences with stockholders representing over 45% of our outstanding shares, 60% of our outstanding shares excluding employees and Directors and approximately 67% of our institutional shareholdings as of the record date. Our CFO routinely reports feedback received from stockholders to our executive management and Board.
We further communicate with stockholders and other stakeholders through various media, including our annual report and SEC filings, proxy statement, press releases, and through our website. We hold conference calls for our quarterly earnings releases, which are open to all. These calls are available in real-time and as archived webcasts on our website. In November 2019, we held an Investor Analyst Day with presentations from our Chairman of the Board, CEO, Chief Financial Officer and additional senior executives The Company encourages stockholders to participate in the Company’s annual shareholderstockholder meetings, as it provides a valuable opportunity to discuss the Company, its corporate governance, and other important matters.
Any stockholder of the Company or any other interested party wishing to communicate with the Board may write to the Board at Board of Directors, c/o Corporate Secretary, 1 HaMada Street, Herziliya Pituach 4673335, Israel, or by email at investors@solaredge.com.investors@solaredge.com. The Corporate Secretary will maintain a log of such communications and transmit as soon as practicable such communications to the identified director addressees, unless there are safety or security concerns that mitigate against further transmission of the communication, as determined by the Corporate Secretary. The Board or individual directors so addressed will be advised of any communication withheld for safety or security reasons as soon as practicable.
In addition, any person wishing to communicate with the Company’s independent directors may do so by writing to them, c/o Corporate Secretary, 1 HaMada Street, Herziliya Pituach 4673335, Israel, or by email at investors@solaredge.com. Director Qualifications
The nominatingNominating and corporate governance committeeCorporate Governance Committee and the Board believe that candidates for director should have certain minimumidentified particular qualifications, including, without limitation: | · | demonstrated business acumen and leadership, and high levels of accomplishment; |
| · | ability to exercise sound business judgment and to provide insight and practical wisdom based on experience; |
| · | commitment to understand the Company and its business, industry, and strategic objectives; |
| · | integrity and adherence to high personal ethics and values, consistent with our Code of Business Conduct and Ethics; |
| · | commitment to enhancing stockholder value; |
| · | willingness to act in the interest of all stockholders; and |
| · | for non-employee directors, independence under Nasdaq listing standards and other applicable rules and regulations. |
Other requirements, such as industry experience or experience in a particular business discipline,attributes, skills and experiences that are expectedimportant to contribute to the Board’s overall effectiveness and meet the needs of the Board of Directors and its committees, may be considered. The Company values diversity on a company-wide basis and seeks to achieve a diversity of occupational and personal backgroundsrepresented on the Board as a whole, in light of Directors, but has not adoptedthe Company’s current needs and business priorities:
Leadership and Executive Experience in Public Companies- We believe that directors who have significant practical experience, demonstrated business acumen and leadership, and high levels of accomplishment will possess the ability to exercise sound business judgment and to provide insight and practical wisdom to help us analyze, shape, and oversee the execution of important operational and policy issues while understanding the legal and regulatory demands required from a specific policy regarding Board diversity. The Board evaluatespublic company;
Extensive Knowledge of the Company’s Business – We design and manufacture both hardware and software technological solutions for the smart energy market while constantly developing and growing our business. Our director’s commitment to understanding the Company and its diversitybusiness, industry, and strategic objectives is significant for their contribution to our strategic planning and business discussions.
High Level of occupationalFinancial Expertise - Accurate financial reporting, robust auditing and personal backgroundsfamiliarity with new accounting principles and practices are important for us as parta public traded company. We therefore seek to have a number of its annual re-nomination process. Eachdirectors who qualify as Audit Committee financial experts. We further expect all of our director nominees has achieved an extremely high leveldirectors to be financially knowledgeable in order to understand and advise on our financial reporting, internal control and investment activities.
Broad International Exposure - We currently have a presence in 28 countries around the world. Our products have been installed in 133 countries around the world. Due to the global nature of success in his career, including extensive experience inour business, we deem it critical for our directors to be able to provide valuable business and cultural perspective on our international operations.
Innovation and Technology – Our products reflect a focus on innovation and we are continuously searching to improve and enhance the capabilities of our technology departments. It is important for us to have directors who share the desire for technological innovation, who have themselves led technology companies and venture capital firms, as well as historical knowledgewho want to be a part of our company from their many years serving on our Board. In these positions, each has been directly involvedleading the path for continuous innovation in the challenges relating to setting the strategic direction and managing the financial performance, personnel, and processesarea of large, complex organizations. Each has had exposure to effective leaders and has developed the ability to judge leadership qualities. The nominating and corporate governance committee consults with other memberssmart energy. In light of the Boardimportance of protection of infrastructure from security threats including cyber, we look to our board members for their experience in this area.
Independence - For non-employee directors, independence under Nasdaq listing standards and management in identifyingother applicable rules and evaluating candidates for director.regulations.
The table below summarizes the specific skills and attributes most valued by the Nominating and Governance Committee in connection with annual assessment and/or appointment decision-making for each director or nominee listed below. Therefore, the absence of a particular skill for a director does not mean the director does not possess that attribute. PROPOSAL NO. 2—RATIFICATION OF APPOINTMENT OF INDEPENDENTREGISTERED PUBLIC ACCOUNTING FIRM FOR 2019 Leadership and Executive Experience Knowledge of the Company’s Business Financial Expertise Broad International Exposure Innovation and Technology Independence Corporate Governance & ESG Experience Nadav Zafrir Zivi Lando Yoni Cheifetz Marcel Gani Doron Inbar Avery More Tal Payne Betsy Atkins Board Composition (%) 100 87 37 100 63 87 37
Proposal No. 2 Ratification of Appointment of Independent Registered Public Accounting Firm for 2021
The Audit Committee of the Board of Directors has selected EYErnst & Young LLP (EY) to be the Company’s independent registered public accounting firm for the year ending December 31, 2019,2021, and recommends that the stockholders vote for ratification of such appointment. EY has been engaged as our independent registered public accounting firm since 2006.2007. As a matter of good corporate governance, the Audit Committee has requested that the Board of Directors to submit the selection of EY as the Company’s independent registered public accounting firm for 20192021 to the stockholders for ratification. In the event of a negative vote on suchour stockholders do not approve this ratification proposal, the Audit Committee will reconsider its selection. TheyEven if the selection is ratified, the Audit Committee may select another independent registered public accounting firm if it determines that doing so would be in the best interests of the Company. A representative of EY is expected to be present at the virtual Annual Meeting. The representative of EY will have the opportunity to make a statement at the Annual Meeting if they desirehe or she desires to do so, and will be available to respond to appropriate questions.
The following table sets forth the aggregate fees for professional services rendered by EY for the audit of our financial statements for the year ended December 31, 20172019 and the year ended December 31, 2018,2020, and the aggregate fees for other services rendered by EY during those periods:
| | | Calendar 2017 | | | Calendar 2018 | | | | | In thousands of Dollars | | | Audit fees(1) | | | 535 | | | | 815 | | | Audit related fees (2) | | | - | | | | 336 | | | Tax fees(3) | | | 97 | | | | 171 | | | Total audit and related fees | | | 632 | | | | 1,322 | |
| | 2019 ($) | 2020 ($) | | Audit fees (1) | 1,149,000 | 1,251,200 | | Audit related fees | 10,000 | 250,000 (2) | | Tax fees (3) | 158,000 | 203,765 | | Total audit and related fees | 1,317,000 | 1,704,965 |
| (1) | “Audit fees” are fees for audit services for each of the years shown in this table, including fees associated with the annual audit (including audit of our internal control over financial reporting for the year ended December 31, 20172019 and for the year ended December 31, 2018)2020), reviews of our quarterly financial results submitted on Form 10-Q, Korean and Italian statutory audit services and consultations on various accounting issues. issues. |
| (2) | ”“Audit related fees”Related Fees” are fees for financialrelated to assurance and tax due diligencerelated services provided in connection with respect to our acquisitionsthe issuance of the Company’s Convertible Senior Notes issued on September 25, 2020 in Korea and Italy.an aggregate principle amount of $632.5 million. |
| (3) | Represents professional services rendered for tax compliance, tax advice, tax planning, and review of our Israeli tax returns. |
Our Board of Directors adopted a written policy for the pre-approval of certain audit and non-audit services which EY provides. The policy balances the need to ensureprotect the independence of EY, while recognizing that in certain situations EY may possess both the technical expertise and knowledge of the Company to best advise the Company on issues and matters in addition to accounting and auditing. In general, the Company’s independent registered public accounting firm cannot be engaged to provide any audit or non-audit services unless the engagement is pre-approved by the audit committee.Audit Committee. Certain services may also be pre-approved by the Chairman of the audit committeeAudit Committee under the policy. All of the fees identified in the table above were approved in accordance with SEC requirements and, following our initial public offering, pursuant to the policies and procedures described above.pre-approval policy.
All of the services of EY, described above, for year ended December 31, 2017 and the year ended December 31, 2018, were pre-approved by the audit committee.
The Board of Directors recommends a vote FOR the ratification of the appointment of EY for 2019.2021. |
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PROPOSAL NO. 3—SAY–ON-PAYProposal No. 3Say–On-Pay
In accordance with Section 14A of the Exchange Act, we are providing our stockholders with the opportunity to vote, on an advisory (non-binding) basis, to approve the compensation of our named executive officers as disclosed in this Proxy Statement (referred to as “Say-on-Pay” vote). As described below in the "Compensation“Compensation Discussion and Analysis"Analysis” section of this Proxy Statement, the Compensation Committee'sCommittee’s goals in setting executive compensation are to motivate our executives to maximize stockholder value, provide compensation that varies based on performance, and attract and retain managerial talent, without promoting unreasonable risk-taking. To achieve these goals, our executive compensation structure emphasizes performance-based compensation, including annual incentive compensation and stock-based awards.
We urge stockholders to read the "Compensation“Compensation Discussion and Analysis"Analysis” below, which describes in more detail how our executive compensation policies and procedures operate and are designed to achieve our compensation objectives, as well as the Summary Compensation Table and other related compensation tables and narrative following the Compensation Discussion and Analysis, which provide detailed information on the compensation of our named executive officers. The Board of Directors and the Compensation Committee believe that the policies and procedures articulated in the "Compensation“Compensation Discussion and Analysis"Analysis” are effective in achieving our goals and that the compensation of our named executive officers reported in this Proxy Statement reflects and supports these compensation policies and procedures.
In accordance with Section 14A of the Exchange Act, and as a matter of good corporate governance, stockholders will be asked at the Annual Meeting to approve the following advisory resolution:
RESOLVED, that the stockholders of the Company approve, on an advisory basis, the compensation of the Company’s named executive officers described in the Compensation Discussion and Analysis and disclosed in the Summary Compensation Table and the related compensation tables, notes and narrative in the Proxy Statement for the Company’s 20192021 Annual Meeting of Stockholders.
This advisory Say-on-Pay vote is non-binding; however, our Board of Directors and Compensation Committee will review and consider the voting results carefully when making future decisions regarding our executive compensation programs.
After careful consideration, the Board of Directors has adopted a policy of providing for annual “Say-on-Pay” advisory votes. Unless the Board of Directors modifies its policy on the frequency of holding “Say-on-Pay” votes, , the next “Say-on-Pay” advisory vote will be included in our 20202022 proxy statement.
The Board of Directors recommends a vote FOR the approval of our executive compensation on an advisory basis. |
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENTSecurity Ownership Of Certain Beneficial Owners And Management
The following table sets forth certain information regarding the beneficial ownership of our common stock as of March 23, 2019April 5, 2021 (unless indicated otherwise below), for: | · | each person known to us to beneficially own 5% or more of the outstanding shares of our common stock; |
Each person known to us to beneficially own 5% or more of the outstanding shares of our common stock; | · | each member of our Board of Directors and director nominees; |
Each member of our board of directors and director nominees;Each of our named executive officers; and | · | each of our named executive officers; and |
The members of our board of directors and our executive officers as a group.
| · | the members of our Board of Directors and our executive officers as a group. |
We have determined beneficial ownership in accordance with the rules of the SEC. Except as indicated by the footnotes below, we believe, based on the information furnished to us, that the persons and entities named in the table below have sole voting and investment power with respect to all shares of our common stock that they beneficially own, subject to applicable community property laws.
Applicable percentage ownership in the following table is based on 47,501,36251,976,095 shares of common stock outstanding as of April 11, 2019,5, 2021, unless otherwise indicated in the footnotes below. In computing the number of shares of common stock beneficially owned by a person or entity and the percentage ownership of that person or entity, we deemed to be outstanding all shares of common stock subject to options or other convertible securities held by that person or entity that are currently exercisable or exercisable within 60 days of April 11, 2019.5, 2021. We did not deem these shares outstanding, however, for the purpose of computing the percentage ownership of any other person. Unless otherwise indicated, the address of each beneficial owner listed in the table below is c/o SolarEdge Technologies, Inc., 1 HaMada Street, Herziliya Pituach 4673335, Israel.
| | | Shares Beneficially Owned | | | Name of Beneficial Owner | | Shares | | | % | | | 5% Stockholders: | | | | | | | | BlackRock, Inc. (1) | | | 4,421,944 | | | | 9.3 | % | | NN Group N.V. (2) | | | 3,711,081 | | | | 7.8 | % | | Menora Mivtachim Holdings Ltd. (3) | | | 2,980,531 | | | | 6.3 | % | | | | | | | | | | | | Directors and Named Executive Officers: | | | | | | | | | | Guy Sella(4) | | | 1,298,560 | | | | 2.7 | % | | Ronen Faier(5) | | | 156,485 | | | | * | | | Zvi Lando(6) | | | 232,818 | | | | * | | | Yoav Galin(7) | | | 317,603 | | | | * | | | Rachel Prishkolnik(8) | | | 59,150 | | | | * | | | Dan Avida(9) | | | 246,515 | | | | * | | | Yoni Cheifetz(10) | | | 44,021 | | | | * | | | Marcel Gani(11) | | | 34,012 | | | | * | | | Doron Inbar(12) | | | 176,235 | | | | * | | | Avery More(13) | | | 582,291 | | | | 1.2 | % | | Tal Payne (14) | | | 22,902 | | | | * | | | All directors and executive officers as a group (13 individuals)(15) | | | 3,736,851 | | | | 7.9 | % |
| | Shares Beneficially Owned | | Name of Beneficial Owner 5% Stockholders: | Shares | % | | BlackRock, Inc. (1) | 5,998,029 | 11.5% | | FMR LLC (2) | 3,012,306 | 5.8% | | Directors, Director Nominees and Named Executive Officers: | | | | Zvi Lando (3) | 66,037 | * | | Ronen Faier (4) | 71,595 | * | | Yoav Galin (5) | 187,130 | * | | Rachel Prishkolnik (6) | 11,066 | * | | Uri Bechor (7) | 8,337 |
| | | | | | Nadav Zafrir (8) | 3,160 | * | | Yoni Cheifetz (9) | 26,923 | * | | Marcel Gani (10) | 27,033 | * | | Doron Inbar (11) | 26,923 | * | | Avery More (12) | 83,230 | * | | Tal Payne (13) | 26,923 | * | All directors and executive officers as a group (14 individuals) (14) | 842,671 | 1.6% |
——————*Represents beneficial ownership of less than 1%. * | Represents beneficial ownership of less than 1%. |
| (1) | Based solely on a Schedule 13G/A filed with the SEC by BlackrockBlackRock, Inc., on February 7, 2019.5, 2021. The Schedule 13G/A contains information as of December 31, 2018. Blackrock2020. BlackRock, Inc. reports having sole dispositive power to dispose or to direct the disposition of over all of the5,998,029 shares reported above.and sole voting power over 5,747,529 shares. The address of the reporting persons is 55 East 52nd Street, New York, NY 10055. |
| (2) | Based solely on a Schedule 13G/A13G filed with the SEC by NN Group N.V.,FMR LLC and Abigail P. Johnson on January 24, 2019.February 8, 2021. The Schedule 13G/A13G contains information as of December 31, 2018. NN Group N.V.2020. The filing reflects securities beneficially owned or deemed to be so owned, by FMR LLC, certain of its subsidiaries and affiliates, and other companies. Ms. Jonson is a director, and the chairman and chief executive officer, of FMR LLC. FMR LLC and Ms. Johnson report having sole dispositive power over 3,012,306 shares. FMR LLC further reports having sole voting power to dispose or to direct the disposition of over all of the shares reported above.1,552,831 shares. The address of the reporting persons is Schenkkade 65, 2595 AS, The Hague, The Netherlands. 245 Summer Street, Boston, Massachusetts 02210 |
| (3) | Based solely on a Schedule 13G/A filed with the SEC by Menora Mivtachim Holdings Ltd., on February 13, 2019. Schedule 13G/A contains information as of December 31, 2018. Menora Mivtachim Holdings Ltd. reports having shared dispositive power over all of the shares reported above. The address of the reporting persons is Menora House, 23 Jabotinsky St., Ramat Gan 5251102, Israel.
|
(4) | Consists of 526,72022,060 shares of common stock owned of record by Mr. Sella, 757,662 shares of common stock issuable upon exercise of options exercisable within 60 days of April 11, 2019, and 14,178Lando, 3,435 shares of common stock issuable upon settlement of restricted stock units which will vest and settle within 60 days of April 11, 2019. 5, 2021 and 40,542 shares of common stock issuable upon exercise of options exercisable within 60 days of April 5, 2021. |
(5)(4) | Consists of 32,45942,273 shares of common stock owned of record by Mr. Faier, 119,483 shares of common stock issuable upon exercise of options exercisable within 60 days of April 11, 2019, and 4,5432,397 shares of common stock issuable upon settlement of restricted stock units which will vest and settle within 60 days of April 11, 2019. 5, 2021 and 26,925 shares of common stock issuable upon exercise of options exercisable within 60 days of April 5, 2021. |
(6)(5) | Consists of 32,45975,035 shares of common stock owned of record by Mr. Lando, 195,816 shares of common stock issuable upon exercise of options exercisable within 60 days of April 11, 2019, and 4,543Galin, 2,043 shares of common stock issuable upon settlement of restricted stock units which will vest and settle within 60 days of April 11, 2019. 5, 2021 and 110,052 shares of common stock issuable upon exercise of options exercisable within 60 days of April 5, 2021. |
(7)(6) | Consists of 250,7593,242 shares of common stock owned of record by Mr. Galin, 62,495 shares of common stock issuable upon exercise of options exercisable within 60 days of April 11, 2019, and 4,349Ms. Prishkolnik, 2,193 shares of common stock issuable upon settlement of restricted stock units which will vest and settle within 60 days of April 11, 2019. 5, 2021 and 5,631 shares of common stock issuable upon exercise of options exercisable within 60 days of April 5, 2021. |
(8)(7) | Consists of 19,7664,967 shares of common stock owned of record by Ms. Prishkolnikk, 36,086 shares of common stock issuable upon exercise of options exercisable within 60 days of April 11, 2019, and 3,298Mr. Bechor, 1,312 shares of common stock issuable upon settlement of restricted stock units which will vest and settle within 60 days of April 11, 2019. 5, 2021 and 2,058 shares of common stock issuable upon exercise of options exercisable within 60 days of April 5, 2021. |
(9)(8) | Consists of 20,8741,949 shares of common stock owned of record by Mr. Avida, 2,028Zafrir, and 1,211 shares of common stock issuable upon settlement of restricted stock units which will vest and settle within 60 days of April 11, 2019, 200,000 shares of common stock held by Opus Capital Venture Partners L.P.’s investment committee consists of Carl Showalter, Dan Avida, Gill Cogan and Joseph Cutts and 23,613 shares of common stock held by The Zarbu Revocable Trust, c/o Dan Avida.5, 2021. |
(10)(9) | Consists of 41,99325,712 shares of common stock owned of record by Mr. Cheifetz, and 2,0281,211 shares of common stock issuable upon settlement of restricted stock units which will vest and settle within 60 days of April 11, 2019. 5, 2021. |
(11)(10) | Consists of 20,87416,712 shares of common stock owned of record by Mr. Gani, 2,0281,211 shares of common stock issuable upon settlement of restricted stock units which will vest and settle within 60 days of April 11, 2019,5, 2021, 5,555 shares of common stock held directly by Marcel Gani 2002 Living Trust and 5,5553,555 shares of common stock held directly by ALGA Partners LLC. Mr. Gani, in his capacity as trustee, has voting and investment power over the shares owned by the Marcel Gani 2002 Living Trust. Mr. Gani, in his capacity as manager, has voting and investment power over the shares owned by ALGA Partners LLC. |
(12)(11) | Consists of 20,87425,712 shares of common stock owned of record by Mr. Inbar, 153,333 shares of common stock issuable upon exercise of options exercisable within 60 days of April 11, 2019, and 2,0281,211 shares of common stock issuable upon settlement of restricted stock units which will vest and settle within 60 days of April 11, 2019. 5, 2021. |
(13)(12) | Consists of 95,07261,019 shares of common stock owned of record by Mr. More, 2,0281,211 shares of common stock issuable upon settlement of restricted stock units which will vest and settle within 60 days of April 11, 2019, 469,8505, 2021, 20,000 shares of common stock held by ORR Partners I GP, LP, a limited partnership controlled by Avery More Family 2020 DT Investment LLC and 15,3411,000 shares held by Avery More'sMore’s wife, Jerralyn Smith More, as to which Avery More disclaims any ownership interest. |
(14)(13) | Consists of 20,87425,712 shares of common stock owned of record by Ms. Payne, and 2,028 shares of common stock issuable upon settlement of restricted stock units which will vest and settle within 60 days of April 11, 2019. |
(15) | Consists of 2,124,216 shares of common stock, 1,564,400 shares of common stock issuable upon exercise of options exercisable within 60 days of April 11, 2019, and 48,2351,211 shares of common stock issuable upon settlement of restricted stock units which will vest and settle within 60 days of April 11, 2019.5, 2021.
|
| (14) | Consists of 618,034 shares of common stock, 20,306 shares of common stock issuable upon settlement of restricted stock units which will vest and settle within 60 days of April 5, 2021, and 204,334 shares of common stock issuable upon exercise of options exercisable within 60 days of April 5, 2021. |
Executive Officers
Biographical information for the executive officers of the Company is set forth below. Biographical information for Mr. Lando can be found under “Nominees for election or reelection, as applicable, as Class III Directors” on page 13
Ronen Faier | joined SolarEdge in 2011 as our Chief Financial Officer. Prior to joining SolarEdge, Mr. Faier served from 2008 to 2010 as the chief financial officer of Modu Ltd, a privately owned Israeli company. Between 2004 and 2007, Mr. Faier held several senior finance positions, including chief financial officer at M-Systems prior to its acquisition by SanDisk Corporation in 2006. Previously, Mr. Faier served as corporate controller of VocalTec Communications Ltd. Mr. Faier holds a CPA (Israel) license, an MBA (with Honors) from Tel Aviv University and a B.A. in Accounting and Economics from the Hebrew University in Jerusalem. | | | | | Uri Bechor | joined SolarEdge in 2019 as our Chief Operating Officer. Prior to joining SolarEdge, Mr. Bechor was at Flex Ltd., a multinational electronics contract manufacturer for 22 years where he served as Senior Vice President, Global Operations, Europe and the Americas and General Manager at Flex International Ltd. Mr. Bechor, in his previous position, oversaw more than forty manufacturing sites and was responsible for revenues of more than $10 billion. | | | | | Rachel Prishkolnik | joined SolarEdge in 2010 as our Vice President, General Counsel and Corporate Secretary. Prior to joining So-larEdge, Mrs. Prishkolnik served as the vice president, general counsel & corporate secretary of Gilat Satellite Net-works Ltd. At Gilat she held various positions beginning as legal counsel in 2001 and becoming corporate secretary in 2004 and vice president, general counsel in 2007. Prior to Gilat, she worked at the law firm of Jeffer, Mangels, Butler & Marmaro LLP in Los Angeles. Before that, Mrs. Prishkolnik worked at Kleinhendler & Halevy (currently Gross GKH Law Offices) in Tel Aviv. Mrs. Prishkolnik holds an LLB law degree from the Faculty of Law at the Tel Aviv University and a B.A. from Wesleyan University (College of Social Studies) in Connecticut. She is licensed to practice law and is a member of the Israeli Bar. |
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Yoav Galin | co founded SolarEdge in 2006 and has served since our founding as our Vice President, Research & Development where he is responsible for leading the execution of our technology strategy, building and managing the tech-nology team and overseeing research and development of SolarEdge’s innovative PV power harvesting products. Prior to joining SolarEdge, Mr. Galin served for 11 years at the Electronics Research Department (ERD). During this period, Mr. Galin held various research and development and management positions, including his last position at the ERD where he led a project and its development team of over 30 hardware and software engineers. He was also responsible for overseeing the research and development of future technologies. Mr. Galin holds a B.S. in Electrical Engineering from Tel Aviv University. | | | | | Meir Adest | co-founded SolarEdge in 2006 and has served since 2007 as our Vice President, Core Technologies where he is re-sponsible for SolarEdge’s certification and research of future technologies. He was appointed to serve as our Chief Information Officer in 2018 and appointed as Chief Product & Information Officer in 2020. Prior to co-founding So-larEdge, Mr. Adest spent 7 years at the Electronics Research Department (‘‘ERD’’), one of Israel’s national labs, which is tasked with developing innovative and complex systems, where he held a number of positions and managed large-scale techno-operational projects. Mr. Adest holds a B.Sc in mathematics, physics, and computer science from the Hebrew University in Jerusalem. | | | | | Shuli Ishai | joined SolarEdge in 2020 as our Vice President of Global Human Resources. Ms. Ishai brings a wealth of experience to her role, previously serving as Executive Vice President of HR and MIS at Stratasys, Chief Resource Officer at Netafim, and Corporate Vice President of HR at Nice. Ms. Ishai holds a BA and an MA in Art History from Tel Aviv University and an MA in Organizational Behavior from Tel Aviv University. | | | | | Yogev Barak | joined SolarEdge in 2020 as our Chief Marketing Officer. Mr. Barak brings to SolarEdge over twenty-five years of experience in international marketing and B2B product management, including executive management positions at HP and Applied Materials. In his most recent role, Mr. Barak served as the Head of Strategy, Marketing, Products and Business Management at HP Indigo. Mr. Barak holds a B.Sc. in Electrical Engineering from Tel Aviv University. |
COMPENSATION DISCUSSION AND ANALYSIS Executive Compensation Compensation Discussion And Analysis
We invest our resources to grow our business both organically and non-organically in a manner that we believe will increase shareholder value. As our Company continues to grow significantly, our Compensation Committee oversees our compensation guidelines and practices in order to attract new talent, support and reward the achievement of our financial goals and promote the attainment of other key business objectives.
Executive Summary—2020 Business Highlights and Link to Pay Decisions  Record revenues of $1.46 billion Market capitalization $16.5 billion as of December 31, 2021 Total shareholder return 213% GAAP net income $140.3 million Non-GAAP* net income $224.4 million $222.7 million in cash from operating activities GAAP diluted earnings per share $ 2.66 Non-GAAP* diluted earnings was $4.11 per share Employee base increased by 30% *Please see Appendix A to this proxy statement for a reconciliation of non-GAAP measures to the nearest GAAP measure.
Although fiscal 2020 presented unprecedented challenges resulting in financial results below the goals set by the Company at the beginning of the year, the Company quickly adjusted its cost structure in response to the pandemic induced economic slowdown and ended the year with record revenues while continuing to invest in its long term growth strategies. As part of our efforts to mitigate the effects of COVID-19, in March 2020, our senior executives elected to waive the base salary increase which came into effect on January 1, 2020 and returned to their 2019 base salary levels. In addition, our CEO elected to reduce his salary by 15%. A month later in April 2020, our senior executives and CEO voluntarily further reduced their base salaries by an additional 20%. These reductions remained in place through December 31, 2020. The actions of our senior executives, including our CEO contributed to allowing the Company to protect its workforce and avoid the need for salary reductions for any of its non-executive employees as well as avoid general layoffs related to the global pandemic, instead seeing a 30% increase in our workforce during 2020.
The main objectives of our executive pay-for-performance compensation program are to: motivate our executives to maximize stockholder value;
provide compensation that varies based on performance; and
attract and retain managerial talent, without promoting unreasonable risk-taking.
Compensation Governance Highlights
In addition to aligning pay with performance of the Company, our executive compensation program is intended to be consistent with corporate governance best practices. This is demonstrated by the following elements in our executive officer compensation arrangements:
robust selling restrictions;
restrictions on hedging and pledging the Company’s common stock;
use of objective, performance criteria in our incentive plans;
advice from independent compensation consultants retained by the Compensation Committee; and
no specific retirement benefit plans designed solely for senior executives or related entitlements such as executive benefits and perquisites, tax gross-ups, etc.
The Company’s performance in the year ended December 31, 2018 was significantly better than the year ended December 31, 2017 in most parameters. Our revenues grew 54.4% from $607.0 million in the year ended December 31, 2017 to $937.2 in the year ended December 31, 2018. Although our gross margins reduced from 35.4% in the year ended December 31, 2017 to 34.1 % in the year ended December 31, 2018, our net profits grew 53.1% from $84.2 million for the year ended December 31, 2017 to $128.8 million for the year ended December 31, 2018. In addition, the Company generated $189.1 million in cash from operating activities for the year ended December 31, 2018, compared to $136.7 in the same period ending December 31, 2017. In the year ended December 31, 2018, we entered into the Uninterruptible Power Supply (“UPS”) market by acquiring the assets of Gamatronic Electronics Ltd. and acquired Kokam Co. Ltd., a leading provider of lithium-ion cells, batteries and energy storage solutions. The Company grew from 1,007 full time employees at year end 2017 to 1,737 full time employees as of December 31, 2018. In addition, we established new subsidiaries in Taiwan and South Korea.
Compensation awarded to our named executive officers (“NEOs”) for 20182020 was in line with our pay-for-performance criterionobjectives. Approximately over 85% of the CEO’s target total direct compensation (consisting of base salary, target annual incentive opportunity and target long-term equity incentive opportunity), and 75% of target total direct compensation, on average, for each of our other NEOs was “at-risk”, meaning that it was contingent upon the achievement of certain financial results as detailed herein or subject to time-based vesting which takes into account our performance relative to our peers and our positive financial results.is dependent on continued service.
Company Named Executive Officers
Our NEOs for the year ended December 31, 2018,2020, which consist of our chief executive officer, our chief financial officer, and the next three most highly-compensated executives, are:
| · | Guy Sella, our Chief Executive Officer and Chairman of the Board; |
Zvi Lando, our Chief Executive Officer and board member; | · | Ronen Faier, our Chief Financial Officer; |
| · | Zvi Lando, our Vice President, Global Sales; |
Uri Bechor, our Chief Operations Officer; | · | Yoav Galin, our Vice President, ResearchRachel Prishkolnik, our Vice President, General Counsel and Corporate Secretary; and Development; and |
| · | Rachel Prishkolnik, our Vice President, General Counsel and Corporate Secretary. |
Yoav Galin, our Vice President, Research and Development.
This Compensation Discussion and Analysis describes compensation for services rendered by our NEOs during the year ended December 31, 20182020 and the tables and narratives that follow contain information regarding compensation for services rendered by our NEOs during fiscal 2016, the six monthsyears ended December 31, 2016, the year ended December 31, 20172018, 2019 and the year ended December 31, 2018.2020.
Compensation Objectives and Guiding Principles
The primary objectives of our senior executive compensation program are as follows:
Pay for Financial Performance: Under our annual cash incentive plan, the Compensation Committee determines a set of financial parameters related to revenues, gross margins and profitability of the Company. If these parameters are not met at a level of at least 70% and profitability is not achieved, the executives are not entitled to compensation under the plan.
Pay for Business Performance and Department Goals: Motivate, recognize, and reward superiorbusiness performance and individual contributions. based on specific goals in line with the business plan approved by the Board of Directors.
Alignment of Interests: We seek to align the interests of our senior executives with those of our stockholders. stockholders through a heavy emphasis on equity-based awards and stock ownership guidelines.
Attraction, Motivation, and Retention of Talent: Our senior executive compensation programs are designed to help us attract, motivate, and retain key management talent who drive profitability and the creation of stockholder value.
Elements of Compensation
The following table describes each element of our senior executive compensation program and how these elements help us to achieve our compensation objectives:
2020 compensation structure 
| Compensation Element | Form | Objective | Rationale / Key Characteristics | Base Salary | Cash | Retention
Attraction Performance | • Fixed compensationcompensation. • Intended to be commensurate with each senior executive’s position and level of responsibilityresponsibility. • Evaluated annually or as necessary in response to organizational/business changes, individual performance, market data, etc., but not automatically increasedincreased. | Annual Cash Incentive Compensation | Cash | Performance Alignment of Interests Motivation | • Tied to Company performance. Also, for all NEOs other thanand contingent upon the CEO, individualCompany’s financial performance, including revenues, gross margin and profitability. • Designed to reward achievement of challenging annual performance goals that we consider important contributors to stockholder valuevalue. • Performance goals and targets are established by the Compensation Committee at the beginning of each calendar yearyear. • The Compensation Committee approves annual cash incentive award payouts based on the level of achievement of these pre-established goalsgoals. | Long-Term Incentives | Stock Options | Performance Alignment of Interests Retention
Motivation | • As options have no value unless the value of our common stock increases, it alignsthese awards align the interests of senior executives with those of our stockholders and motivatesstockholders. • Options motivate such executives to perform in a manner that drives sustainable increases in the value of our common stock • The multi-year vesting encourages retention as recipients need to remain employed in order for vesting to occurstock.
| Restricted Stock Units | Performance Alignment of Interest Interests Retention Motivation | • Variable compensation designed to reward contributions to our long-term strategic, financial, and operational success, motivate future performance, align the interests of senior executives with those of stockholders, and retain key senior executives through the term of the awardsawards. • Four year vesting, with increased value dependent on the stock price on each vesting date. | Other Compensation and Benefits | N/A | Attraction Retention | • NEOs receive benefits that are generally available to all salaried employees in Israel, where the NEOs are located. This includes contributions to an education fund and to a fund known as Manager’s Insurance, which provides a combination of retirement plan, insurance, and severance pay benefits to Israeli employees. • NEOs receive benefits that we generally make available to all salaried employees, including participation in the Employee Stock Purchase Plan. | Change–in- ControlChange-in-Control Arrangements | Equity | Attraction Retention | • Each of our NEOs has a clause in the NEO’s employment agreement that entitles the NEO to immediate vesting of equity in the event of a qualifying termination within one year following a change in control (“double-trigger” equity vesting). • Keep management’s highest priority onAligns management with stockholder interests in the face of events that may result in a change-in-control and not on potential individual implications of any such eventsevents. • Reasonable change-in-control protections for our senior executives are necessary in order for us to attract and retain qualified employeesemployees. • We periodically review the necessity and design of our senior executive severance and change-in-control arrangementsarrangements. |
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Implementing Compensation Objectives
In making compensation decisions, we review the performance of the Company and each senior executive. We also consider the senior executive’s level of responsibility, the importance of the senior executive’s role in achieving our corporate objectives, and the senior executive’s long-term potential, while taking into account his or her current target compensation, value of outstanding equity awards, and stock ownership levels, and our stock selling restrictions for senior executives. Finally, we weigh competitive practices, relevant business and organizational changes, retention needs, and internal pay equity.
Compensation Peer Group
In order to attract, retain, and motivate the best management talent, we believe that we must provide a target compensation packageopportunity that is competitive relative to our peers. In connection therewith,Therefore, the Compensation Committee considers practices of specific companies that we identified as our peers for executive compensation in 2018 (the“20182020 (the “2020 Peer Group”), as well as size-appropriate technology industry survey data.
EachIn the months prior to the start of each new year, the Compensation Committee reviews the market data with the assistance of its externalindependent compensation consultant and makes changes, as appropriate, in order to ensure it continues to appropriately reflect the Company’s size, industry, and scope of operations.operations when considering the appropriate compensation for our executives.
For 2018, working withOur substantial growth in 2019, in terms of revenues (over 50% growth year-over-year) as well as in terms of geographical expansion, product offering and non-organic expansion following the acquisitions of SolarEdge Critical Power, Kokam Co. Ltd, SolarEdge e-Mobility and SolarEdge Automation Machines prompted us to adjust our peer group substantially when we considered compensation for 2020. When reviewing the peer group in 2019 to determine if any changes were appropriate to the peer group to be used to inform 2020 target total direct compensation we noted that our revenue projection of $1.23 billion approximated the 75th percentile of the pre-existing peer group, market cap was well above-median $3.7 billion versus the peer median of $2.2 billion ) and operating income was near the 75th percentile. This positioning led the Compensation Committee to conduct a full review of the composition of the Company’s peer group for 2020.
With the assistance of Frederic W. Cook & Co., Inc. (“FW Cook”), an independent consultant retained by the Compensation Committee, approved the 2018 Peer Group, as described below,Compensation Committee searched for new peers, based on multiple factors, including business similarities and broadly comparable financial profiles (e.g.(e.g. revenue, market capitalization, enterprise value, and growth profiles). The 2018Compensation Committee sought to make changes to the peer group composition to bring the median revenue and market cap size closer to the Company’s size at the time. Following the annual peer group review process, we removed four companies that fell below the Committee’s targeted market cap and/or revenue range, and added seven companies from broadly-similar industries that were more representative of our size at the time. Even with these changes, our revenue run rate, market cap, and operating income were still above the median of the revised peer group, which was used to inform 2020 pay decisions.
  Performance Peer Group used for establishing 2018 senior executive target compensation was as follows: 2019 Peer Group (16) 2020 Peer Group (19) Brooks Automation, Inc. Brooks Automation, Inc. Cree, Inc. Cree, Inc. Mellanox Technologies Ltd. Mellanox Technologies Ltd. MKS Instruments Inc. MKS Instruments Inc. Netgear Inc. Netgear Inc. Ormat Technologies Ltd. Ormat Technologies Ltd. Pattern Energy Group LP Pattern Energy Group LP Power Integrations, Inc. Power Integrations, Inc. Silicon Laboratories Inc. Silicon Laboratories Inc. Generac Holdings Inc. Generac Holdings Inc. Verint Systems Inc Verint Systems Inc. Finisar Corporation Finisar Corporation 3D Systems Corporation First Solar, Inc. Veeco Instruments, Inc. John Bean Technologies Corporation Advanced Energy Industries Inc., Cray Inc., Generac Holdings Inc., Gigamon Inc. Curtiss-Wright Corporation Infinera Corporation., Mellanox Technologies Ltd., MKS Instruments Inc., Ormat Technologies Ltd., Photronics Inc., Powell Industries Inc., Stratasys Ltd., Silver Spring, Sun Power Cypress Semiconductor Corporation Sunrun Inc., Veeco Instruments Inc., Verint Systems Inc., Vicor Corporation and Xperi Corporation (formerly Tessera Technologies Inc.). This peer group was expanded and modified to accommodate for certain companies no longer being publicly traded and to add other peers that were found to meet the aforementioned factors for our peer group. Enphase Energy, Inc. When the Compensation Committee evaluated the 2018 Peer Group, our revenues were positioned at approximately the 40th percentile compared to the group for the trailing quarter and 50th percentile for the 2017 estimate, our operating income was at approximately the 75th percentile, and our market capitalization was at approximately the 40th percentile.Entegris, Inc.
Teradyne, Inc . 2020 Pay Positioning
After reviewing the peer groupmarket data described above, wethe Compensation Committee determined the approximate range within which to target total direct compensation (the sum of base salary, target annual incentive, and the grant date fair value of long-term incentives) for our senior executives for 2018.2020. Within that range, we incorporated flexibility to respond to and adjust for the evolving business environment and our specific hiring and retention needs. For some NEOs, achieving the targeted median-range pay positioning meant making a larger increase to target pay opportunity than in the past. This is because our 2019 target pay opportunity was found to be below-median (especially our base salaries), and the gap to competitive pay amounts was exacerbated by our tremendous growth and its impact on peer group and survey market compensation data, which increased materially compared to when the Compensation Committee set target compensation levels pay 2019.
In general for 2018, we2020, the Compensation Committee set base salary and short- andshort-and long-term incentive compensation opportunities for our senior executives, including the NEOs, at or near the median of the peer group proxy and survey data. As described below, individualIndividual levels varied from the targeted position for each of the elements of target total direct compensation based on the Compensation Committee’s overall subjective evaluation of individual performance, senior executive responsibilities relative to benchmark position responsibilities, and individual skill set and experience.
In November 2018, the Compensation Committee evaluated the equity compensation of the CEO and other senior executives as part of a study performed by FW Cook for the evaluation of executive salaries and other compensation for 2019. In connection therewith, the Compensation Committee considered the 2018 Peer GroupEffective March 1, 2020, in light of the growthexpected economic downturn caused by the COVID-19 global pandemic, our NEOs waived their base salary increases that became effective January 1, 2020 and reverted to base salaries effective in 2019. In addition, our CEO elected to reduce his salary by 15%. In April 2020, our NEOs and CEO voluntarily reduced their base salaries by an additional 20% which reductions were in effect until the end of the Company and as each year, reviewed the market data with the assistance of its external compensation consultant and made appropriate changes in order to ensure it continues to appropriately reflect the Company’s size, industry, and scope of operations.2020.
*Positioning Relative to Peers | | | 100th percentile Percentile Rank | | Market Capitalization | 100th percentile Percentile Rank | *Based on 2019 consensus per Standard Poor’s IIQ June 30, 2019 - the time of the 2020 peer group evaluation | | 50th percentile Percentile Rank | |
For establishing appropriate benchmarks for the NEO compensation for 2019, working with FW Cook, the Compensation Committee approved the 2019 Peer Group, as described below, based on multiple factors, including business similarities and broadly comparable financial profiles (Revenue 69th
e.g.Market Capitalization 56th revenue, market capitalization, enterprise value, and growth profiles). The 2019 Peer Group used for establishing 2019 senior executive target compensation was as follows: 3D Systems Corporation; Advanced Energy Industries Inc.; Brooks Automation, Inc.; Cree, Inc.; Finisar Corporation; Generac Holdings Inc.; Infinera Corporation; Mellanox Technologies Ltd.;, MKS Instruments Inc.; Netgear Inc.; Ormat Technologies Ltd.; Pattern Energy Group LP; Power Integrations, Inc.; Silicon Laboratories Inc.; Veeco Instruments, Inc., Verint Systems Inc.. This peer group was expanded and modified since the 2018 Peer Group to take into account the changes in financial parameters given the significant growth of the Company, both in revenues, net income in business scope due to acquisitions. The modifications were also made to accommodate for certain companies no longer being publicly traded and to add other peers that were found to meet the aforementioned factors for our peer group.
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Results of 20182020 Advisory Vote to Approve Executive Compensation
At our 20182020 annual meeting of stockholders, 84%82% of the votes cast were in favor of our advisory resolution regarding the compensation of our NEOs. TheOur Board and Compensation Committee believes this affirmsvalue the feedback received from our stockholders. Our Compensation Committee reviewed the result of the stockholders’ supportadvisory vote on executive compensation and reached out for feedback from our stockholders about ways to improve our executive compensation program. In response to investor feedback, the Company revised its executive compensation strategy for 2021 to better align executive compensation with performance by allocating a portion of the equity compensation to performance-based awards that vest based on achievement of pre-defined financial measures relating to the earnings per share of the year-end financial results of the Company. The Company’s pay-for-performance philosophyBoard has also adopted a compensation recovery or clawback policy. Because our discussions with respectinvestors occurred in response to executive compensation. Nothe advisory resolution at our 2020 annual meeting of stockholders as a means to better understand their views on our compensation program, the changes we implemented were made toafter the compensation program for NEOs as a direct response to2020 had already been established. Additional information concerning the result of the vote.Company’s 2021 pay structure will be provided in our 2022 Proxy Statement. The Compensation Committee will continue to consider feedback from stockholders and the results of future advisory votes on executive compensation. compensation in making executive compensation decisions.
Role of Compensation Committee and Management
The Compensation Committee has primary responsibility for overseeing the design and implementation of our senior executive compensation programs. The Compensation Committee, with input from the other independent directors, evaluates the performance of the CEO. The Compensation Committee then recommends CEO compensation to the independent directors for approval. The CEO and the Compensation Committee together review the performance of our other senior executives, and the Compensation Committee determines their compensation based on recommendations from the CEO. The executives do not play a role in their own individual compensation determinations.
Role of Compensation Consultants
With respect to decisions for 20182020 target compensation of the NEOs, competitive review of senior executive and non-employee director compensation programs and peer group review for 2018,2020, the Compensation Committee retained FW Cook to review market trends and advise the Compensation Committee. FW Cook is the sole compensation consultant offor the Compensation Committee.
Our Compensation Committee has concluded that no conflicts of interest exist with respect to FW Cook’s provision of services after considering the following six factors: (i) the provision of other services to us by FW Cook; (ii) the amount of fees FW Cook received from us as a percentage of theits total revenue of FW Cook;revenue; (iii) the policies and procedures of FW Cook that are designed to prevent conflicts of interest; (iv) any business or personal relationship of the FW Cook consultants with a member of the Compensation Committee; (v) any of our stock owned by the FW Cook consultants; and (vi) any business or personal relationship of the FW Cook consultants or FW Cook with any of our executive officers.
The Compensation Committee is directly responsible for the appointment, compensation, and oversight of FW Cook. FW Cook reported directly to the Compensation Committee, although the Compensation Committee instructed FW Cook to work with management to compile information and to gain an understanding of the Company and any Company-related issues for consideration by the Compensation Committee, including market trends.
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Compensation-Related Governance Policies
Stock Ownership and Holding Guidelines
All of our employees, including the NEOs, are subject to our Insider Trading Policy which forbids employees to trade in the Company’s stock, or any derivatives thereof, while holding non-public material information or during the Company’s set “black-out periods”. In addition, the Company’s board of directors has adopted Stock Ownership and Holding Guidelines that apply to the Company’s board of directors, the CEO, and his direct reports.executive team. As per the current guidelines, the CEO and his direct reportsexecutive team are required to attain and maintain stock equal to four times the annualized base salary for the CEO and two times the annualized base salary for all CEO direct reports.executive team. Non-employee members of the Board are required to attain and maintain stock equal to five times their annualized cash retainer. Executives and directors who are covered by the policy are required to hold 50% of the “net profit shares” resulting from stock option exercises and/or vesting of other stock-based awards until they reach their applicable stock ownership level. “Net profit shares” refers to the number of shares actually held by the executive or director after covering withholding tax requirements and/or stock option exercise costs with a portion of the shares resulting from such exercise or vesting event. Once covered by the policy, executives and members of the Board are expected to continuously accumulate qualifying equity until they meet the minimum stock ownership requirement. Once an individual has achieved the required stock ownership level, he/she must maintain stock ownership at or above the required level. As of the Record Date, all of the executives and directors subject to this policy are in compliance.
Compensation of the Named Executive Officers
In determining target total compensation for our NEOs for 2018,2020, we evaluated the financial and operational performance of the Company and considered each senior executive’s contributions relative to that performance. As part of the annual senior executive compensation review, the Compensation Committee reviewed independent market data as well as then-current pay levels of the Company’s senior executives, the Company’s pay philosophy and corporate performance, and the individual performance of the Company’s senior executives.
For a discussion of the Company’s performance for the year ended December 31, 2018,2020, see “Executive Compensation — 2018 ResultsSummary—2020 Business Highlights and Key Events and Impact on Compensation”Link to Pay Decisions” above. Base salaries in 2018 for the CEO and each of the NEOs were the same as in 2017 and were not adjusted for the NEOs since August 2016. When the Compensation Committee reviewed executive compensation in December 2017, it was determined, based on a report provided by FW Cook, that the base salaries were within market level medians and therefore in 2018 they remained unchanged.
When evaluating executive compensation again in the last quarter of 2018 with respect to compensation of executives for 2019,2020, the Compensation Committee engaged FW Cook and updated the Peer Group of the Company in order to take into account the growth of the Company, both in revenues, operating income and changes in market cap. In their report, FW Cook found that the base salariessalary of each of the NEOs were allwas below median market median levels. As such, and taking into account the increased levels of responsibility for each of the NEOs, the salaries were increased effective January 1, 2019.2020. The increase in salaries for 2019,2020, reflecting a 18.0-31.0%10.3%-20.2% increase in base salaries for all of our NEOs (except for Mr. Lando’s base salary which did not increase in January 2020), were made following a discussion with FW Cook, and according to their recommendations.recommendations and in order to put the NEOs at median market levels based on the adjusted Peer Group. FW Cook updated its compensation analysis as applied to the Company’s peer group and considered the Company’s organic and non-organic growth since August 2016, and made its recommendations based upon that updated analysis. Specifically, the Compensation Committee took into account the growth of the Company, in revenues, global presence and including recent activities of management involving business development and acquisitions, including the additionongoing development of three new businesses (UPS, lithium ion batteries and e-Mobility) to their respective management roles and the increase in responsibilities accompanied therewith. As mentioned above, in anticipation of an economic downturn due to COVID-19, in March 2020 our senior executives elected to return to their 2019 base salary levels and our CEO elected to reduce his salary by 15%. In April 2020, our senior executives and CEO elected to further reduce their base salaries by an additional 20%.
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The base salaries of our NEOs were approved by the Compensation Committee in U.S. Dollars. As per such approval, payments are actually made in New Israeli Shekel based on the exchange rate used at the time of the approval. As such, while the actual monthly payment of base salaries of our NEOs did not change between August 2016 and through December 31, 2018, the U.S. Dollar amount reflected in the below disclosure reflects the rate of exchange as of December 2017 and as such, reflects a base salary change that is merely a result of a fluctuation in the exchange rate of U.S. Dollar to New Israeli Shekel. The following table sets forth the 2017-20192019-2020 base salaries for the NEOs:
| Name and Principal Position | Annual base salary effective December 31, 2019 ($) | Annual base salary effective December 31, 2019 ($) | Percentage change | Annual base salary effective March 1, 2020 ($)* | Percentage change | Annual base salary effective April 1, 2020 ($)* | Percentage change | | Zvi Lando – Chief Executive Officer | 625,000 | 625,000 | 0% | 531,500 | -15.0% | 425,200 | -20.0% | | Ronen Faier - Chief Financial Officer | 420,000 | 505,000 | 20.2% | 420,000 | -16.8% | 336,000 | -20.0% | | Uri Bechor - Chief Operations Officer | 435,000 | 480,000 | 10.3% | 435,000 | -9.4% | 348,000 | -20.0% | | Rachel Prishkolnik – Vice President, General Counsel and Corporate Secretary | 380,000 | 425,000 | 11.8% | 380,000 | -10.6% | 304,000 | -20.0% | | Yoav Galin – Vice President, Research and Development | 380,000 | 425,000 | 11.8% | 380,000 | -10.6% | 304,000 | -20.0% |
* In anticipation of an economic downturn due to COVID-19, in March 2020 our senior executives elected to return to their 2019 base salary levels and our CEO elected to reduce his salary by 15%. In April 2020, our senior executives and CEO elected to further reduce their base salaries by an additional 20%. These reductions were in effect through December 31, 2020.
| December 2017 and November 2018 Base Salary Decisions | | | | | | | | | | | Name and Principal Position | | Annual base salary Effective 2017-2018 ($) | | | Annual base salary Effective Jan. 2019($) | | | Percentage change | | | Guy Sella - Chief Executive Officer and Chairman of the Board | | | 611,000 | | | | 750,000 | | | | 22.7 | % | | | | | | | | | | | | | | | | Ronen Faier - Chief Financial Officer | | | 350,000 | | | | 420,000 | | | | 20.0 | % | | | | | | | | | | | | | | | | Zvi Lando - Vice President, Global Sales | | | 350,000 | | | | 420,000 | | | | 20.0 | % | | | | | | | | | | | | | | | | Yoav Galin – Vice President, Research and Development | | | 322,000 | | | | 380,000 | | | | 18.0 | % | | | | | | | | | | | | | | | | Rachel Prishkolnik – Vice President, General Counsel and Corporate Secretary | | | 290,000 | | | | 380,000 | | | | 31.0 | % |
Annual Cash Incentive Compensation
For 2018,2020, each NEO was eligible to receive an annual incentive compensation payment based on achievement of pre‑establishedpre-established performance goals. For Mr. Sella,all of the NEOs, any earnouts under the annual cash incentive compensation program are contingent upon the Company achieving a minimum level of performance with respect to certain pre-established financial parameters. If the general score for the financial parameters is not at least 70% and profitability is not achieved, no annual cash incentive compensation is awarded to the NEOs. For 2020, the performance goals established for our CEO were entirely based entirely upon Company‑Company related financial, operational, and strategic objectives, and were 65% comprised of 70% financial achievement, 7% operations, 17% strategy,“Financial Goals” – Solar Revenue Targets, Non-solar Revenue Targets, Net Income and 6% scalability and infrastructure. Specifically, the financial achievement parameters of the minimum required for bonus payments were contingent upon the Company meeting at least 70% of its financial parameters and having a positive net income. The financial parameters were comprised of revenue, net income and gross marginSolar Business Gross Margin targets. The compensation committee measured the achievementremaining 35% of the targetsour CEO’s target bonus was based upon the Company’s solar business results so as noton goals related to take into account the acquisitions which were not taken into account when the performance goals were established.Operations (11%), Product & Strategy (14%), and Building Scalability (10%).
For the remaining NEOs, the performance goals detailed below were weighted 50% based upon 50% Company‑Company related financial,Financial Goals, operational, and strategic objectives (which were the same objectives as for theour CEO and as detailed in the table below), and 50% weighted based upon individual performance. The Company exceeded the achievement threshold setperformance, with any bonus earnout contingent upon reaching a general score for the financial goals related to revenuesFinancial Goals of at least 70% and profitability targets and was slightly below the gross margin target.positive net income. The Company reached higher than the minimum achievementFinancial Goals required for bonus payments by achieving annual calendar revenues in solar businessSolar Revenue of $914.3$1.36 billion, Solar Business Gross Margin of 34.3%, Non-Solar Revenues of 102.8 million and a net incomeNet Income of $136.0 million in solar business.$191.4 million. The Company reached a gross margin of 35.0% for the solar business thus yielding only a portion of the entitlement under this financial parameter. The non-financial performance goalsOperation, Strategy and Scalability & Infrastructure Goals for the CEO relaterelated to specific targets decided uponset by usthe Compensation Committee in accordance with the Company’s plans for the year to follow. For example, for 2018,2020, these goals included increasingcompleting the Company’s manufacturing production capabilities by 35%, finishingin the north of Israel, Sella 1, initiating plans for our own production expansion of lithium ion cells and batteries in Kokam, and beginning mass production, development of certain new inverter lines,the Company’s own residential and commercial battery, advancement of manufacturing systems, initiation of cost reduction activities, development of a full suite of home energynew solar products and establishmentspecific parameters relating to the enhancement of business for the sale of UPSour non-solar organizations and products.
The 20182020 bonus structure and achievement against the Company‑Company related financial, operational, and strategic objectives (“Company Objectives”) is summarized as follows:
Goal Type| | Goal Type | Percentage of Total | 2020 Achievement vs. Goals (Corporate Performance) | 2020 Goal Achievement | 
| Revenue for the Solar business | 30% | $1.36 billion in revenue in solar business vs. $1.7 billion Goal | 24.0% | | Net Income | 10% | $191.4M million in net income vs. $263.5M Goal | 7.3% | | Gross Margin | 18% | 34.3% in Gross Margin in solar business vs. 35.0% Goal | 17.6% | | Non- solar business | 7% | Targets relating to revenues and loss of acquired non-solar businesses (Critical Power, e-Mobility and storage) | 2.8% | | | Strategy | 14% | Goals which included the development of the Company’s own residential and commercial battery, larger scale inverter development and building the Company’s e-Mobility organization and production capabilities. | 10.7% | | | Scalability & Infrastructure | 10% | Goals which focused on completing the Company’s manufacturing facility in the north of Israel, “Sella 1” and beginning mass production as well as initiating the expansion of the Kokam manufacturing facility, “Sella 2”. | 9.4% | | | Operations | 11% | Goals included increasing manufacturing capacity and certain cost reduction initiatives | 7.4% | | | Total | 100% |
| 79.2% of Target Corporate Performance Achieved*
|
| Percentage
| 2018 Achievement vs. Goals
| Revenue | 35% | $914.3M in Revenue in solar business vs. $720M Goal (+27.0%) | Net Income | 14% | $136.0M in Net Income in solar business vs. $90M Goal (+51.1%) | Gross Margin | 21% | 35.0% in Gross Margin in solar business vs. 36.0% Goal (-2.8%) | Strategy | 17% | Targets which included building a UPS business unit and establishing a means of battery manufacturing | Scalability & Infrastructure | 6% | Targets which focused on developing a new manufacturing facility and advanced laboratories | Operations | 7% | Targets included increasing manufacturing capacity by more than 35% and completion of new inverter models | Total | 100% | 114.3% of Target Achieved |
*Following the assessment of the achievement of the above parameters, the Compensation Committee of the Board of Directors determined to provide an additional 5% achievement of the goals in light of the challenges overcome during the global pandemic, bringing the total achievement level of Corporate Performance to 84.2%.
In addition to the aforementioned corporate performance goals detailed above, which were weighted based upon 50% Company‑related financial, operational, and strategic objectives,for each NEO other than(except for the CEO hasCEO), each NEO had additional individual pre-determined performance goals relating to their respective specific areas of responsibility and contribution to the Company.Company, which comprised the remaining 50% of their 2020 bonus determination. The individual performance goals are specific goals predetermined for each NEO and relate to the goals for the success and growth of the Company for the forthcoming year. Individual performance goals may be expressed in terms of overall Company performance or the performance of a division, a business unit or an individual, or in any other manner determined appropriate by the Compensation Committee. Each NEO has a certain target bonus that is preapproved by the Compensation Committee and is equal to eight months of such NEO’s monthly base salary. NEOs can achieve beyond their target bonus if the performance goals are exceeded and at the discretion of the Compensation Committee. Each of the NEOs received a bonus under the compensation plan that had been preapproved by the Compensation Committee and after review by the Compensation Committee of the specific performance goals and determination of their level of achievement. Each NEO has a certain target bonus that is preapproved by the Compensation Committee and is equal to eight months of such NEO’s monthly Base Salary. NEOs can achieve beyond their target bonus if the performance goals are exceeded and at the discretionThe results of the Compensation Committee.Committee’s evaluations goal attainment for the NEOs are summarized below:
Mr. Lando 26The Compensation Committee determined that Mr. Lando attained 84.2% of the Corporate performance Goals (as detailed in the table above) which are considered all of Mr. Lando’s personal performance goals.
Mr. Faier The Compensation Committee determined that Mr. Faier attained 47.59% of the 50% of his individual personal performance goals for 2020. His primary measurable targets included, managing the Company’s business plan and financial risks, maintaining or improving specific financial parameters including gross margin and operating expense measures. In addition, Mr. Faier’s personal performance goals included, overseeing operations of the Kokam business including the expansion of the Kokam manufacturing facility.
Mr. Bechor The Compensation Committee determined that Mr. Bechor attained 46.28% of the 50% of his individual personal performance goals for 2020. His primary measurable targets included, deployment of automated assembly lines for production as well as meeting specific measurements of production capacity and inventory levels. In addition, Mr. Bechor’s personal performance goals included, among others, certain cost reduction plans and goals related to the ramp up of Sella 1 as well as the expansion of the Kokam manufacturing facilities.
Ms. Prishkolnik The Compensation Committee determined that Ms. Prishkolnik attained 50% of the 50% of her individual personal performance goals are specificfor 2020. Her primary measurable targets included, management of corporate governance matters, management of the Company’s intellectual property portfolio, strategy and litigation. In addition, Ms. Prishkolnik’s personal performance goals to each NEO and relate toincluded, support of the Company’s global legal commercial needs.
Mr. Galin The Compensation Committee determined that Mr. Galin attained 39.85% of the 50% of his individual personal performance goals for 2020. His primary measurable targets included, developing the successnext generation optimizer, a residential battery and growthutility scale inverter as well as development of automated assembly lines. In addition, Mr. Galin’s personal performance goals included further improvement of the Company’s monitoring platform as well as specific parameters defined to support the Company’s research and development in its non-solar businesses.
 CEO Base monthly Salary X 100% X Company Objectives (financial* + operations + infrastructure + strategy) NEOs Monthly salary X 67% X (Company Objectives *50% + personal achievements score*50%)
*Any bonus payment for the forthcoming year. Specifically, for our Vice PresidentCEO or NEOs is contingent upon the Company meeting at least 70% of Researchits Financial Goals and Development the goals include the development of certain new products and for our Vice President of Global Sales, the goals include the penetration of sales in certain new geographic regions. having a positive net income
For 2018,2020, Mr. SellaLando was awarded $674,897$526,516 which represents 114%110.3% of his Base Salarybase salary for calendar 2018;year 2020; Mr. Faier was awarded $241,714$302,034 which represents 72%76.3% of his Base Salarybase salary for calendar 2018; Mr. Landoyear 2020; Ms. Prishkolnik was awarded $235,741$261,010 which represents 70%74.0% of his Base Salaryher base salary for calendar 2018;year 2020; Mr. Galin was awarded $210,688$232,252 which represents 68%65.9% of his Base Salarybase salary for calendar 2018year 2020 and Ms. PrishkolnikMr. Bechor was awarded $198,292$282,884 which represents 71%73.4% of her Base Salaryhis base salary for calendar 2018. Payments were made to the NEOS in New Israel Shekels converted from US Dollars on the payment date.year 2020. These performance-based cash bonuses werewill be paid in March 2019April 2021 for achievement of business objectives established by the Compensation Committee for calendar year 2018.
| NEO | | 2018 Bonus Target | | | 2018 Actual Bonus | | | 2018 Actual Bonus as % of Target* | | | Guy Sella | | $ | 611,000 | | | $ | 674,897 | | | | 110.5 | % | | Ronen Faier | | $ | 234,000 | | | $ | 241,714 | | | | 103.3 | % | | Zvi Lando | | $ | 234,000 | | | $ | 235,741 | | | | 100.7 | % | | Yoav Galin | | $ | 215,000 | | | $ | 210,688 | | | | 98.0 | % | | Rachel Prishkolnik | | $ | 193,000 | | | $ | 198,292 | | | | 102.7 | % |
* Percentage of Actual Bonus as Percentage of Target is slightly lower than the Actual Bonus entitlement in U.S Dollars due to the fact that Actual Bonuses were calculated and paid2020 based on the salaries approved to be effective as of January 1, 2020. Payments will be made to the NEOs monthlyin New Israel Shekels converted from US Dollars on the payment date. This is different than in past years in which payments were calculated based on the New Israeli Shekel (NIS) base salary at year end.paid to the executives. Given the devaluation of the US Dollar in 2020, payment based on this calculation would have led to a higher payment in US Dollars to the NEOs (approximately 7% higher).
| NEO | 2020 Bonus Target ($) | 2020 Actual Bonus ($) | 2020 Actual Bonus as % of Target* | | Zvi Lando | 625,000 | 526,516 | 84.2% | | Ronen Faier | 336,667 | 302,034 | 89.7% | | Uri Bechor | 320,000 | 282,884 | 88.4% | | Rachel Prishkolnik | 283,333 | 261,010 | 92.1% | | Yoav Galin | 283,333 | 232,252 | 82.0% |
Equity Compensation
In December 2017,November 2019, the Compensation Committee evaluated the equity compensation of the CEOMr. Lando and other senior executives for 20182020 as part of the study performed by FW Cook.its independent consultant. In order to align NEO compensation with the median of the 20182020 Peer Group (with adjustments as necessary based on the Compensation Committee’s overall subjective evaluation of individual performance, senior executive responsibilities relative to benchmark position responsibilities, and individual skill set and experience), and in order to maintain a performance based compensation program that aligns the NEOs with the interests of shareholders and also provides them with long term incentives, the Compensation Committee approved annual long-term incentive grants for Mr. Lando and the CEO and other NEOs (as well as the other senior executives) consisting of 50%66% RSUs and 50%34% options. We believe this mix of options and RSUs is appropriate because it provides a balance between incentive (given that stock options only provide value to the grantee in the event that our stock price increases following the date of grant) and retention (given that RSUs only become payable based upon continued service over time). All of the equity grants have a four-year vesting period. The options granted in 2020 have a ten yearten-year term and were granted at an exercise price of $38.05$101.81 which was equal to the fair market value of the shares as ofclosing share price on the date of the grant. The rationale of granting options to senior executives is to create more leverage and greater wealth creation opportunity that can materially impact financial and stock price performance, consistent with typical market practice, and aligning senior executives with the interests of the Company. The options have strong performance orientation since they only provide value if the stock price increases. The time-vested RSUs, which are granted to all of the Company’s employees, offer more certainty in value delivery (while still being stockholder-aligned) thereby driving executive retention. 27 As was done
Based on investor feedback, for 2018,2021 the Compensation Committee alignedchanged the long term incentives for 2019 with the 2019 Peer Group (with adjustments as necessary based on the Compensation Committee’s overall subjective evaluationmix of individual performance, senior executive responsibilities relativeequity compensation granted to benchmark position responsibilities, and individual skill set and experience),its executives in order to maintain abetter tie executive compensation to performance by reintroducing performance based compensation programstock units that alignsvest based on achievement of pre-defined financial measures, namely earning per share or EPS targets defined by the NEOs compensation with the interests of shareholders and also provides them with long term incentives. The Compensation Committee approved annual long-term incentive grants for the CEO and other NEOs (as well as the other senior executives) consisting of 50% RSUs and 50% options. 2021.
During 2018,2020, we were party to employment agreements with Messrs. Sella,Lando, Faier, Lando, Galin, Bechor and Ms. Prishkolnik. Each of these employment agreements provideprovides for employment of the NEO on an “at‑“at will” basis and provideprovides for a base salary, vacation, sick leave, payments to a pension and severance fund, as well as to an Israeli recreational fund and recuperation pay, in accordance with Israeli law. On May 16, 2017, our Compensation Committee approved the amendment of the employment agreements of our executive officers in order to standardize all executive management agreements. Following the amendment, all executive management employment agreements provide for double-trigger equity vesting following a change of control event. See the sections below entitled “Executive Compensation Table NarrativeNarrative-Employment Agreements” -Employment Agreements”and “Potential Payments and Acceleration of Equity upon Termination or Termination in Connection with a Change in ControlControl” ” for more information. The employment agreement entered into with Mr. Bechor upon his commencement of employment reflects these standardized provisions.
Our CEO and the remaining NEOs receive benefits that we generally make available to all salaried employees in Israel, where the NEOs are located. These include contributions to an education fund and to a fund known as Manager’s Insurance, which provides for a combination of retirement plan, insurance, and severance pay benefits to Israeli employees. See the section below entitled “Executive“Executive Compensation Table Narrative--EmploymentNarrative--Employment Agreements” for more information. Executives do not receive any special perquisites not extended to other employees of the Company.
Clawback Policy
In early 2021, our Board of Directors approved a Clawback Policy under which, in the event that the Company is required to prepare an accounting restatement of its financial statements due to the Company’s material noncompliance with any financial reporting requirement under the securities laws the Compensation Committee may cancel all or any portion of any outstanding incentive compensation, including annual bonuses and other short-and long-term cash, equity and equity-based incentive awards, which is in excess of the compensation the Company’s current and former officers as determined by the Board from time to time in accordance with Rule 16a-1 under the Securities Exchange Act of 1934 would have earned for the relevant fiscal period(s) had the accounting restatement not occurred.
Tax Deductibility of Compensation
For 2017 and prior years, Section 162(m) of the Internal Revenue Code (the Code) generally limited the deductibility of compensation to $1 million per year per person for certain of our named executive officers,NEOs, unless compensation in excess of the limit qualified as “performance based compensation.” Following the changes to the tax laws effective as of January 1, 2018 that eliminateeliminated the exception for “performance based compensation,”compensation”, we expect we will beare unable to deduct compensation payable to Named Executive OfficersNEOs in excess of $1,000,000.$1,000,000 per year per NEO under US corporate income tax law.
While our Compensation Committee considers the impact of this tax treatment, the primary factor influencing program design is the support of our business objectives. Generally, whether incentive compensation will be deductible under Section 162(m) of the Code will be a consideration, but not the decisive consideration, with respect to our Compensation Committee’s compensation determinations. Accordingly, our Compensation Committee retains flexibility to structure our compensation programs in a manner that is not tax deductible in order to achieve a strategic result that our Compensation Committee determines to be more appropriate.
28Employee, Officer and Director Hedging
Under our Insider Trading Policy, officers, directors, and all other employees of, or consultants or contractors to, the Company or its subsidiaries, as well as their immediate families, and members of their households other than household employees are discouraged from using Company securities as collateral for loans or in margin accounts. They are also discouraged from engaging in transactions involving publicly-traded options, such as puts and calls, or other derivative securities with respect to the Company’s securities. The Company discourages these practices to avoid the appearance of impropriety due to speculative, short-term interest, the potential for profit from poor Company performance, and the risk of transactions in Company securities outside specified window periods.
 COMPENSATION COMMITTEE REPORT
Compensation Committee Report
This report shall not be deemed incorporated by reference or by any general statement incorporating by reference this Proxy Statement into any filing under the Securities Act of 1933, as amended, or under the Securities Exchange Act of 1934, as amended, except to the extent the Company specifically incorporates this report by reference, and shall not otherwise be deemed filed under such Acts.
The Compensation Committee has reviewed and discussed with management and its independent consultant, the Compensation Discussion and Analysis below,above, and based on the reviewsuch reviews and discussions, recommended to our board that thisthe Compensation Discussion and Analysis be included in this Proxy Statement.
The Compensation Committee, | | The Compensation Committee,
Avery More, Chairman
Dan AvidaAvery More, Chairman
Nadav Zafrir Doron Inbar |
Our compensation programs are designed to balance risk and reward in relation to the Company’s overall business strategy. Management assessed, and the Compensation Committee reviewed, our senior executive and broad-based compensation and benefits programs. Based on this assessment, we have concluded that our compensation policies and practices do not create risks that are reasonably likely to have a material adverse effect on us. Among the program attributes that discourage inappropriate risk-taking are: | · | the balance between annual and long-term compensation, including the fact that a significant portion of compensation is delivered in the form of equity incentives that vest over several years; |
| · | the use of multiple financial metrics for performance-based annual cash incentive awards and the use of individual goals under our annual cash incentive program; |
| · | the Compensation Committee’s ability to modify annual cash incentives to reflect the quality of earnings, individual performance, and other factors that it believes should influence compensation; and |
| · | our management stock-selling restrictions encourage a longer-term perspective and align the interests of senior executives and the Board, as applicable, with other stockholders. |
29The balance between annual and long-term compensation, including the fact that a significant portion of compensation is delivered in the form of equity incentives that vest over several years;
The use of multiple financial metrics for performance-based annual cash incentive awards and the use of individual goals under our annual cash incentive program;The compensation committee’s ability to modify annual cash incentives to reflect the quality of earnings, individual performance, and other factors that it believes should influence compensation; Our management stock-selling restrictions encourage a longer-term perspective and align the interests of senior executives and the board, as applicable, with other stockholders; and We maintain a clawback policy applicable to our executive team which provides for the recoupment of incentive based compensation in the event of a financial restatement.
Summary Compensation Table
The following table summarizes the compensation of our NEOs for the year ended December 31, 2018,2020, the year ended December 31, 2017,2019, and the Stub Period, and fiscal years 2016.year ended December 31, 2018.
| Name and Principal Position | | Year | | Salary
($)(1) | | | Option Awards ($)(2) | | | Stock Awards ($)(2) | | | Non-Equity Incentive Plan Compensation ($)(1)(3) | | | All Other
Compensation
($)(1) | | | Total
($) | | Guy Sella - Chief Executive Officer and Chairman of the Board | | 2018 | | | 595,267 | | | | 1,363,073 | | | | 1,449,971 | | | | 674,897 | | | | 94,973 | (4) | | | 4,178,181 | | | 2017 | | | 600,221 | | | | 1,002,437 | | | | 986,343 | | | | 645,219 | | | | 94,261 | (5) | | | 3,328,481 | | | 2016SP | | | 274,135 | | | | 499,793 | | | | 505,551 | | | | 503,073 | | | | 42,801 | (6) | | | 1,825,353 | | | 2016 | | | 483,192 | | | | 641,051 | | | | 903,240 | | | | 714,528 | | | | 72,435 | (7) | | | 2,814,446 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Ronen Faier – Chief Financial Officer | | 2018 | | | 340,926 | | | | 410,801 | | | | 436,966 | | | | 241,714 | | | | 53,689 | (8) | | | 1,484,097 | | | 2017 | | | 343,763 | | | | 325,242 | | | | 320,010 | | | | 241,153 | | | | 53,725 | (9) | | | 1,283,893 | | | 2016SP | | | 158,355 | | | | 162,157 | | | | 164,028 | | | | 203,923 | | | | 24,931 | (10) | | | 713,395 | | | 2016 | | | 283,315 | | | | 256,420 | | | | 361,296 | | | | 260,841 | | | | 42,666 | (11) | | | 1,204,538 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Zvi Lando – Vice President, Global Sales | | 2018 | | | 340,926 | | | | 410,801 | | | | 436,966 | | | | 235,741 | | | | 56,137 | (12) | | | 1,480,571 | | | 2017 | | | 343,763 | | | | 325,242 | | | | 320,010 | | | | 248,474 | | | | 56,302 | (13) | | | 1,293,791 | | | 2016SP | | | 158,355 | | | | 162,157 | | | | 164,028 | | | | 195,864 | | | | 25,932 | (14) | | | 706,337 | | | 2016 | | | 288,503 | | | | 256,420 | | | | 361,296 | | | | 247,065 | | | | 46,329 | (15) | | | 1,199,614 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Yoav Galin – VP Research and Development | | 2018 | | | 313,868 | | | | 410,801 | | | | 436,966 | | | | 210,688 | | | | 52,303 | (16) | | | 1,424,626 | | | 2017 | | | 316,480 | | | | 325,242 | | | | 320,010 | | | | 209,731 | | | | 52,195 | (17) | | | 1,223,658 | | | 2016SP | | | 145,584 | | | | 162,157 | | | | 164,028 | | | | 178,415 | | | | 24,220 | (18) | | | 674,405 | | | 2016 | | | 262,299 | | | | 256,420 | | | | 361,296 | | | | 235,933 | | | | 42,256 | (19) | | | 1,158,204 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Rachel Prishkolnik -VP General Counsel and Corporate Secretary | | 2018 | | | 281,399 | | | | 248,155 | | | | 527,173 | | | | 198,292 | | | | 46,718 | (20) | | | 1,301,737 | |
| Name and Principal Position | Year | Salary ($)(1) | Bonus ($)(1)(2) | Option Awards ($)(3) | Stock Awards ($)(3) | Non-Equity Incentive Plan Compensation ($)(1)(4) | All Other Compensation ($)(1) | Total ($) |
Zivi Lando – Chief Executive Officer | 2020 | 477,133 | - | 1,019,977 | 1,979,899 | 526,516 | 76,185 (5) | 4,079,710 | | 2019 | 505,986 | - | 548,644 | 549,986 | 397,747 | 79,000 (6) | 2,081,363 | | 2018 | 340,926 | - | 410,801 | 436,966 | 235,741 | 56,137 (7) | 1,480,571 | | | | | | | | | | |
Ronen Faier – Chief Financial Officer | 2020 | 395,739 | - | 411,349 | 798,598 | 302,034 | 63,573 (8) | 1,971,293 | | 2019 | 437,246 | - | 548,644 | 549,986 | 282,782 | 69,869 (9) | 1,888,527 | | 2018 | 340,926 | - | 410,801 | 436,966 | 241,714 | 53,689 (10) | 1,484,097 | | | | | | | | | | |
Rachel Prishkolnik – VP General Counsel and Corporate Secretary | 2020 | 352,668 | - | 327,384 | 635,498 | 261,010 | 55,694 (11) | 1,632,254 | | 2019 | 395,605 | - | 436,436 | 437,487 | 257,310 | 60,808 (12) | 1,587,646 | | 2018 | 281,399 | - | 248,155 | 527,173 | 198,292 | 46,718 (13) | 1,301,737 | | | | | | | | | | |
Yoav Galin – VP Research and Development | 2020 | 352,668 | - | 327,384 | 635,498 | 232,252 | 58,336 (14) | 1,606,138 | | 2019 | 395,605 | - | 436,436 | 437,487 | 254,600 | 67,757 (15) | 1,591,885 | | 2018 | 313,868 | - | 410,801 | 436,966 | 210,688 | 52,303 (16) | 1,424,626 | | | | | | | | | | |
Uri Bechor – Chief Operating Officer | 2020 | 385,526 | - | 327,384 | 635,498 | 282,884 | 63,044 (17) | 1,694,336 | | 2019 | 145,745 | 287,191 | - | 850,045 | 94,391 | 23,100 (18) | 1,400,472 |
| (1) | We paid the amounts reported for each NEO in New Israeli Shekels. We have translated amounts paid in New Israeli Shekels into U.S. dollars at the foreign exchange rate published by the Bank of Israel as of the date of payment. |
| (2) | Represents the cash payment for a sign on bonus earned in connection with commencement of employment. |
| (3) | The amounts in this column represent the aggregate grant date fair value of the equity-based awards granted to our NEOs, computed in accordance with FASB ASC Topic 718. We provide information regarding the assumptions used to calculate the value of the equity-based awards in Note 2u2z to the audited consolidated financial statements included in our Annual Report on Form 10-K10-K/A filed on February 28, 2019. There can be no assurance that these awards will vest or will be exercised (in which case no value will be realized by the individual), or that the value upon exercise will approximate the aggregate grant date fair value. The values reported in the table for performance-based restricted stock units granted in fiscal 2016 were calculated assuming that all applicable performance goals would be achieved. |
(3) | Represents the cash bonuses earned pursuant to our annual cash incentive program. For more information, see the discussion in the CD&A under the caption Annual Cash Incentive. |
(4) | Includes a $49,586 contribution by the Company to Mr. Sella’s severance fund and $45,387 in aggregate Company contributions to pension and Israeli recreational funds and a recuperation allowance. |
(5) | Includes a $49,996 contribution by the Company to Mr. Sella’s severance fund and $44,265 in aggregate Company contributions to pension and Israeli recreational funds and a recuperation allowance. |
(6) | Includes a $22,835 contribution by the Company to Mr. Sella’s severance fund and $19,966 in aggregate Company contributions to pension and Israeli recreational funds and a recuperation allowance. |
(7) | Includes a $40,250 contribution by the Company to Mr. Sella’s severance fund and $32,185 in aggregate Company contributions to pension and Israeli recreational funds and a recuperation allowance. |
(8) | Includes a $27,179 contribution by the Company to Mr. Faier’s severance fund and $26,511 in aggregate Company contributions to pension and Israeli recreational funds and a recuperation allowance. |
(9) | Includes a $27,404 contribution by the Company to Mr. Faier’s severance fund and $26,321 in aggregate Company contributions to pension and Israeli recreational funds and a recuperation allowance. |
(10) | Includes a $12,674 contribution by the Company to Mr. Faier’s severance fund and $12,257 in aggregate Company contributions to pension and Israeli recreational funds and a recuperation allowance. |
(11) | Includes a $22,772 contribution by the Company to Mr. Faier’s severance fund and $19,894 in aggregate Company contributions to pension and Israeli recreational funds and a recuperation allowance. |
(12) | Includes a $28,399 contribution by the Company to Mr. Lando’s severance fund and $27,738 in aggregate Company contributions to pension and Israeli recreational funds and a recuperation allowance. |
(13) | Includes a $28,633 contribution by the Company to Mr. Lando’s severance fund and $27,669 in aggregate Company contributions to pension and Israeli recreational funds and a recuperation allowance. |
(14) | Includes a $13,191 contribution by the Company to Mr. Lando’s severance fund and $12,741 in aggregate Company contributions to pension and Israeli recreational funds and a recuperation allowance. |
(15) | Includes a $24,032 contribution by the Company to Mr. Lando’s severance fund and $22,297 in aggregate Company contributions to pension and Israeli recreational funds and a recuperation allowance. |
(16) | Includes a $26,145 contribution by the Company to Mr. Galin’s severance fund and $26,158 in aggregate Company contributions to pension and Israeli recreational funds and a recuperation allowance. |
(17) | Includes a $26,363 contribution by the Company to Mr. Galin’s severance fund and $25,832 in aggregate Company contributions to pension and Israeli recreational funds and a recuperation allowance. |
(18) | Includes a $12,127 contribution by the Company to Mr. Galin’s severance fund and $12,093 in aggregate Company contributions to pension and Israeli recreational funds and a recuperation allowance.
|
(19) | Includes a $21,850 contribution by the Company to Mr. Galin’s severance fund and $20,406 in aggregate Company contributions to pension and Israeli recreational funds and a recuperation allowance |
(20) | Includes a $22,608 contribution by the Company to Ms. Prishkolnik’s severance fund and $24,110 in aggregate Company contributions to pension and Israeli recreational funds and a recuperation allowance. |
2018 Grants of Plan-Based Awards| Name | | Equity Award Grant Date | | Estimated Future Payouts under Non-Equity Incentive Plan Awards | | | All Other Stock Awards: Number of Shares of Stock or Units | | | All Other Option Awards: Number of Securities Underlying Options | | | Exercise or Base Price of Option Awards ($/Share) | | | Grant Date Fair Value of Stock & Option Awards ($)(1) | | | | | Threshold ($) | | | Target ($)(2) | | | Maximum ($) | | | | | | | | | | Guy Sella | | | | | | | | 611,000 | | | | | | | | | | | | | | | | | | 01/02/2018 | | | | | | | | | | | | | | | | | | 65,436 | | | | 38.05 | | | | 1,365,373 | | | 01/02/2018 | | | | | | | | | | | | | | | 38,107 | | | | | | | | | | | | 1,449,971 | | Ronen Faier | | | | | | | | | 234,000 | | | | | | | | | | | | | | | | | | | | | | | 01/02/2018 | | | | | | | | | | | | | | | | | | | 19,721 | | | | 38.05 | | | | 408,782 | | | 01/02/2018 | | | | | | | | | | | | | | | 11,484 | | | | | | | | | | | | 436,966 | | Zvi Lando | | | | | | | | | 234,000 | | | | | | | | | | | | | | | | | | | | | | | 01/02/2018 | | | | | | | | | | | | | | | | | | | 19,721 | | | | 38.05 | | | | 408,782 | | | 01/02/2018 | | | | | | | | | | | | | | | 11,484 | | | | | | | | | | | | 436,966 | | Yoav Galin | | | | | | | | | 215,000 | | | | | | | | | | | | | | | | | | | | | | | 01/02/2018 | | | | | | | | | | | | | | | | | | | 19,721 | | | | 38.05 | | | | 408,782 | | | 01/02/2018 | | | | | | | | | | | | | | | 11,484 | | | | | | | | | | | | 436,966 | | Rachel Prishkolnik | | | | | | | | | 193,000 | | | | | | | | | | | | | | | | | | | | | | | 01/02/2018 | | | | | | | | | | | | | | | | | | | 11,913 | | | | 38.05 | | | | 246,936 | | | 01/02/2018 | | | | | | | | | | | | | | | 8,800 | | | | | | | | | | | | 335,981 | | | 10/07/2018 | | | | | | | | | | | | | | | 5,034 | | | | | | | | | | | | 191,191 | |
(1) | The amounts in this column represent the aggregate grant date fair value of the equity based awards granted to our NEOs, computed in accordance with FASB ASC Topic 718. We provide information regarding the assumptions used to calculate the value of these equity based awards in Note 2u to the audited consolidated financial statements included in our Annual Report on Form 10-K filed on February 28, 2019.19, 2021. There can be no assurance that these awards will vest or will be exercised (in which case no value will be realized by the individual), or that the value upon exercise will approximate the aggregate grant date fair value. |
| (4) | Represents the cash bonuses earned pursuant to our annual cash incentive program. For more information, see the discussion in the CD&A under the caption Annual Cash Incentive Compensation. |
| (5) | Includes a $39,745 contribution by the Company to Mr. Lando’s severance fund and $36,440 in aggregate Company contributions to pension and Israeli recreational funds and a recuperation allowance. |
| (6) | Includes a $42,149 contribution by the Company to Mr. Lando’s severance fund and $36,851 in aggregate Company contributions to pension and Israeli recreational funds and a recuperation allowance. |
| (7) | Includes a $28,399 contribution by the Company to Mr. Lando’s severance fund and $27,738 in aggregate Company contributions to pension and Israeli recreational funds and a recuperation allowance. |
| (8) | Includes a $32,965 contribution by the Company to Mr. Faier’s severance fund and $30,608 in aggregate Company contributions to pension and Israeli recreational funds and a recuperation allowance |
| (9) | Includes a $35,185 contribution by the Company to Mr. Faier’s severance fund and $34,684 in aggregate Company contributions to pension and Israeli recreational funds and a recuperation allowance |
| (10) | Includes a $27,179 contribution by the Company to Mr. Faier’s severance fund and $26,510 in aggregate Company contributions to pension and Israeli recreational funds and a recuperation allowance. |
| (11) | Includes a $29,377 contribution by the Company to Ms. Prishkolnik’s severance fund and $26,317 in aggregate Company contributions to pension and Israeli recreational funds and a recuperation allowance. |
| (12) | Includes a $32,110 contribution by the Company to Ms. Prishkolnik’s severance fund and $28,698 in aggregate Company contributions to pension and Israeli recreational funds and a recuperation allowance. |
| (13) | Includes a $22,608 contribution by the Company to Ms. Prishkolnik’s severance fund and $24,110 in aggregate Company contributions to pension and Israeli recreational funds and a recuperation allowance. |
| (14) | Includes a $29,377 contribution by the Company to Mr. Galin’s severance fund and $28,959 in aggregate Company contributions to pension and Israeli recreational funds and a recuperation allowance. |
| (15) | Includes a $34,409 contribution by the Company to Mr. Galin’s severance fund and $33,348 in aggregate Company contributions to pension and Israeli recreational funds and a recuperation allowance. |
| (16) | Includes a $26,145 contribution by the Company to Mr. Galin’s severance fund and $26,158 in aggregate Company contributions to pension and Israeli recreational funds and a recuperation allowance. |
| (17) | Includes a $32,114 contribution by the Company to Mr. Bechor’s severance fund and $30,930 in aggregate Company contributions to pension and Israeli recreational funds and a recuperation allowance. |
| (18) | Includes a $10,959 contribution by the Company to Mr. Bechor’s severance fund and $12,141 in aggregate Company contributions to pension and Israeli recreational funds and a recuperation allowance. |
2020 Grants of Plan-Based Awards | Name | | Estimated Future Payouts under Non- Equity Incentive Plan Awards | All Other Stock Awards: Number of Shares of Stock or Units | All Other Option Awards: Number of Securities Underlying Options | Exercise or Base Price of Option Awards ($/Share) | Grant Date Fair Value of Stock & Option Awards ($)(1) | | | | | Zivi Lando | | | 625,000 | | | | | | 01/02/2020
| | | | | 19,011 | 101.81 | | | 01/02/2020 | | | | 19,447 | | | 1,979,899 | | | | | | | | | | | | Ronen Faier | | | 336,667 | | | | | | | 01/02/2020 | | | | | 7,667 | 101.81 | 411,349 | | 01/02/2020 | | | | 7,844 | | | 798,598 | | | | | | | | | | | | Rachel Prishkolnik | | | 283,333 | | | | | | | 01/02/2020 | | | | | 6,102 | 101.81 | 327,384 | | 01/02/2020 | | | | 6,242 | | | 635,498 | | | | | | | | | | | | Yoav Galin |
| | 283,333 | | | | | | | 01/02/2020 | | | | | 6,102 | 101.81 | | | 01/02/2020 | | | | 6,242 | | | 635,498 | | | | | | | | | | | | Uri Bechor | | | 320,000 | | | | | | | 01/02/2020 | | | | | 6,102 | 101.81 | | | 01/02/2020 | | | | 6,242 | | | 635,498 |
| (1) | The amounts in this column represent the aggregate grant date fair value of the equity-based awards granted to our NEOs, computed in accordance with FASB ASC Topic 718. We provide information regarding the assumptions used to calculate the value of these equity-based awards in Note 2z to the audited consolidated financial statements included in our Annual Report on Form 10-K/A filed on February 19, 2021. There can be no assurance that these awards will vest or will be exercised (in which case no value will be realized by the individual), or that the value upon exercise will approximate the aggregate grant date fair value. |
| (2) | The Non-Equity Incentive Plan does not include any thresholds or a maximum cap for the Non-Equity Awards. Incentive Awards; provided, however, that the Named Executive Officers would not be entitled to any payment if each of the Financial Goals under the plan were not achieved at 70% and a positive net income had not been achieved. |
Executive Compensation Table Narrative
Employment Agreements
We or SolarEdge Technologies, Ltd., our Israeli subsidiary, are party to the following employment agreements: (1) an employment agreement with Mr. Sella,Lando effective as of September 1, 2007,May 17, 2009, pursuant to which he serveswas appointed to serve as our (and SolarEdge Technologies Ltd.’s) Chief Executive Officer and Chairman’s Global Vice President of Sales. Beginning August 26, 2019, Mr. Lando was appointed as CEO of the Board,Company and the Compensation Committee approved an increase in his base salary but no other amendments were made to his Employment Agreement; (2) an employment agreement with Mr. Faier, effective as of December 1, 2010, pursuant to which he serves as SolarEdge Technologies Ltd.’s Chief Financial Officer,Officer; (3) an employment agreement with Mr. LandoMs. Prishkolnik, effective as of May 17, 2009,November 1, 2010, pursuant to which heshe serves as SolarEdge Technologies Ltd.’s Global Vice President of Sales,our VP General Counsel and Corporate Secretary; (4) an employment agreement with Mr. Galin effective as of June 1, 2006 pursuant to which he serves as our Vice President, Research and Development; and (5) an employment agreement with Ms. Prishkolnik,Mr. Bechor effective Novemberas of September 1, 2010,2019, pursuant to which shehe serves as our VP General Counsel and Corporate Secretary. Chief Operating Officer.
Each of these employment agreements provideprovides for employment of the NEO on an “at-will” basis. In all cases, either party may terminate the agreement by providing 60 or 90 days prior written notice other than Mr. Bechor’s employment agreement that entitles him to 180 days prior written notice, provided, however, that we may terminate the agreements immediately and without prior notice and make a payment in lieu of advance notice, in accordance with applicable law. In addition, we may also terminate the agreements immediately upon written notice in the event of “cause” (as defined therein) which may include a conviction of a crime of moral turpitude, a material breach of fiduciary duties towards the company or its parent company, engagement in competing activities, or a material breach of confidentiality and non-disclosure obligations towards the company or its parent company; a material breach of the employment agreement or other circumstances under which severance pay may be denied from such employee under the applicable Israeli law.
The agreements provide for a base salary, vacation, sick leave, payments to a pension and severance fund as well as an Israeli recreational fund and recuperation pay in accordance with Israeli law. Pursuant to the agreements, we have effected a manager’s insurance policy for each NEO pursuant to which we make contributions on behalf of each NEO as well as the required statutory deductions from salary and any other amounts payable under the agreements on behalf of each NEO to the relevant authorities in accordance with Israeli law. For all NEOs, we contribute 8.33% of each NEOsNEO’s base salary toward the policy for the severance pay component, 5%6.5% for the savings and risk component, (or 6% in the case of a pension fund, with such amount to be allocated to a provident fund or pension plan), 7.5% for the educational fund component, up to approximately $4,000 per year and up to 2.5% for disability insurance. In all cases we deduct 5% of each NEO’s base salary to be paid on behalf of the NEO toward the policy (or 5.5%, in the event an NEO chooses to allocate his payments to a pension plan) and 2.5% for the educational fund component.
On February 5, 2016, Amendment no. 12 of the Supervision of Financial Services (Provident Funds) Law, 5765-2005 and the corresponding Integrated Extension Order For Compulsory Pension came into effect pursuant to which as of July 1, 2016 employee and employer contribution rates for pension and manager’s insurance funds increased for all of our employees including our NEOs. As of July 1, 2016, Employee pension fund contributions increased to 5.75% and employer pension fund contributions increased to 6.25% and as of January 1, 2017, employee pension fund contributions increased to 6.00% and employer pension fund contributions increased to 6.50%. In the event that an employee has a manager’s insurance fund the employer shall be required to allocate a portion of its contributions to purchase disability insurance to insure 75% of an employee’s salary which allocation shall not decrease the severance component of the employer’s contributions below 5% or increase total employer contributions above 7.5%. In all cases we deduct 6% of each NEO’s base salary to be paid on behalf of the NEO toward the policy and 2.5% for the educational fund component.
 33
Outstanding Equity Awards at December 31, 20182020
The following table provides information regarding outstanding equity awards held by each of our NEOs as of December 31, 2018,2020, including the applicable vesting dates. | | Stock Awards | | Name | Number of Securities Underlying Unexercised Options Exercisable | Number of Securities Underlying Unexercised Options Unexercisable | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock that have not Vested | Market Value of Shares or Units of Stock that have not Vested ($)* |
| | | Option Awards | | | Stock Awards | | | Name | | Number of
Securities
Underlying
Unexercised
Options
Exercisable | | | Number of
Securities
Underlying
Unexercised
Options
Unexercisable | | | Option
Exercise
Price
($) | | | Option
Expiration
Date | | | Number of
Shares or
Units of
Stock that
have not
Vested | | | Market
Value of
Shares or
Units of
Stock that
have not
Vested
($)* | | | Guy Sella | | | 12,499 | | | | — | | | $ | 5.01 | | | October 29, 2024 | | | | — | | | | — | | | | | | 564,754 | | | | — | | | $ | 5.01 | | | December 22, 2024 | | | | — | | | | — | | | | | | 39,000 | | | | 9,000 | (1) | | $ | 25.09 | | | August 19, 2025 | | | | — | | | | — | | | | | | 30,832 | | | | 23,981 | (2) | | $ | 17.14 | | | August 23, 2026 | | | | — | | | | — | | | | | | 55,215 | | | | 70,992 | (3) | | $ | 14.85 | | | February 14, 2027 | | | | — | | | | — | | | | | | 12,269 | | | | 53,167 | (4) | | $ | 38.05 | | | January 2, 2028 | | | | — | | | | — | | | | | | — | | | | — | | | | — | | | — | | | | 6,750 | (5) | | $ | 236,925 | | | | | | — | | | | — | | | | — | | | — | | | | 12,763 | (6) | | $ | 447,981 | | | | | | — | | | | — | | | | — | | | — | | | | 38,396 | (7) | | $ | 1,347,700 | | | | | | — | | | | — | | | | — | | | — | | | | 30,962 | (8) | | $ | 1,086,766 | | | Ronen Faier | | | 58,333 | | | | — | | | $ | 5.01 | | | October 29, 2024 | | | | — | | | | — | | | | | | 15,600 | | | | 3,600 | (1) | | $ | 25.09 | | | August 19, 2025 | | | | — | | | | — | | | | | | 10,003 | | | | 7,781 | (2) | | $ | 17.14 | | | August 23, 2026 | | | | — | | | | — | | | | | | 17,914 | | | | 23,034 | (3) | | $ | 14.85 | | | February 14, 2027 | | | | — | | | | — | | | | | | 3,697 | | | | 16,024 | (4) | | $ | 38.05 | | | January 2, 2028 | | | | — | | | | — | | | | | | — | | | | — | | | | — | | | — | | | | 2,700 | (5) | | $ | 94,770 | | | | | | — | | | | — | | | | — | | | — | | | | 4,141 | (6) | | $ | 145,349 | | | | | | — | | | | — | | | | — | | | — | | | | 12,458 | (7) | | $ | 437,276 | | | | | | — | | | | — | | | | — | | | — | | | | 9,331 | (8) | | $ | 327,518 | | | Zvi Lando | | | 11,666 | | | | — | | | $ | 2.01 | | | January 25, 2021 | | | | — | | | | — | | | | | | 68,333 | | | | — | | | $ | 2.46 | | | January 26, 2022 | | | | — | | | | — | | | | | | 66,667 | | | | — | | | $ | 5.01 | | | October 29, 2024 | | | | — | | | | — | | | | | | 3,600 | | | | 3,600 | (1) | | $ | 25.09 | | | August 19, 2025 | | | | — | | | | — | | | | | | 10,003 | | | | 7,781 | (2) | | $ | 17.14 | | | August 23, 2026 | | | | — | | | | — | | | | | | 17,914 | | | | 23,034 | (3) | | $ | 14.85 | | | February 14, 2027 | | | | — | | | | — | | | | | | 3,697 | | | | 16,024 | (4) | | $ | 38.05 | | | January 2, 2028 | | | | — | | | | — | | | | | | — | | | | — | | | | — | | | — | | | | 2,700 | (5) | | $ | 94,770 | | | | | | — | | | | — | | | | — | | | — | | | | 4,141 | (6) | | $ | 145,349 | | | | | | — | | | | — | | | | — | | | — | | | | 12,458 | (7) | | $ | 437,276 | | | | | | — | | | | — | | | | — | | | — | | | | 9,331 | (8) | | $ | 327,518 | | | Yoav Galin | | | 12,499 | | | | — | | | $ | 5.01 | | | October 29, 2024 | | | | — | | | | — | | | | | | 4,800 | | | | 3,600 | (1) | | $ | 25.09 | | | August 19, 2025 | | | | — | | | | — | | | | | | 10,003 | | | | 7,781 | (2) | | $ | 17.14 | | | August 23, 2026 | | | | — | | | | — | | | | | | 17,914 | | | | 23,034 | (3) | | $ | 14.85 | | | February 14, 2027 | | | | — | | | | — | | | | | | 3,697 | | | | 16,024 | (4) | | $ | 38.05 | | | January 2, 2028 | | | | — | | | | — | | | | | | — | | | | — | | | | — | | | — | | | | 2,700 | (5) | | $ | 94,770 | | | | | | — | | | | — | | | | — | | | — | | | | 4,141 | (6) | | $ | 145,349 | | | | | | — | | | | — | | | | — | | | — | | | | 12,458 | (7) | | $ | 437,276 | | | | | | — | | | | — | | | | — | | | — | | | | 9,331 | (8) | | $ | 327,518 | | | Rachel Prishkolnik | | | 6,250 | | | | — | | | $ | 5.01 | | | October 29, 2024 | | | | — | | | | — | | | | | | 2,800 | | | | 2,100 | (1) | | $ | 25.09 | | | August 19, 2025 | | | | — | | | | — | | | | | | 5,827 | | | | 4,533 | (2) | | $ | 17.14 | | | August 23, 2026 | | | | — | | | | — | | | | | | 10,435 | | | | 13,418 | (3) | | $ | 14.85 | | | February 14, 2027 | | | | — | | | | — | | | | | | 2,233 | | | | 9,680 | (4) | | $ | 38.05 | | | January 2, 2028 | | | | — | | | | — | | | | | | — | | | | — | | | | — | | | — | | | | 1,576 | (5) | | $ | 55,318 | | | | | | — | | | | — | | | | — | | | — | | | | 2,412 | (6) | | $ | 84,661 | | | | | | — | | | | — | | | | — | | | — | | | | 7,257 | (7) | | $ | 254,721 | | | | | | — | | | | — | | | | — | | | — | | | | 7,175 | (8) | | $ | 251,843 | | | | | | — | | | | — | | | | — | | | — | | | | 5,034 | (9) | | $ | 176,693 | |
| Zvi Lando | 2,223 | — | $17.14 | August 23, 2026 | — | — | | 10,237 | 2,560 (1) | $14.85 | February 14, 2027 | — | — | | 9,861 | 6,163 (2) | $38.05 | January 2, 2028 | — | — | | 27,665 | 15,562 (3) | $36.15 | January 2, 2029 | — | — | | 19,011 | 15,447 (4) | $101.81 | January 2, 2030 | — | — | | — | — | — | — | 1,385 (5) | $441,981 | | — | — | — | — | 3,589 (6) | $1,145,322 | | — | — | — | — | 8,558 (7) | $2,731,029 | | — | — | — | — | 15,801 (8) | $5,042,415 |
| Ronen Faier | 5,119 | 2,560 (1) | $14.85 | February 14, 2027 | — | — | | 7,396 | 6,163 (2) | $38.05 | January 2, 2028 | — | — | | 27,665 | 15,562 (3) | $36.15 | January 2, 2029 | — | — | | 7,667 | 6,230 (4) | $101.81 | January 2, 2030 | — | — | | — | — | — | — | 1,385 (5) | $441,981 | | — | — | — | — | 3,589 (6) | $1,145,322 | | — | — | — | — | 8,558 (7) | $2,731,029 | | — | — | — | — | 6,374 (8) | $2,034,071 |
| Rachel Prishkolnik | 1,491 | 1,491 (1) | $14.85 | February 14, 2027 | — | — | | 3,723 | 3,723 (2) | $38.05 | January 2, 2028 | — | — | | 22,007 | 12,379 (3) | $36.15 | January 2, 2029 | — | — | | 6,102 | 4,958 (4) | $101.81 | January 2, 2030 | — | — | | — | — | — | — | 807 (5) | $257,530 | | — | — | — | — | 2,760 (6) | $880,771 | | — | — | — | — | 2,517 (9) | $803,225 | | — | — | — | — | 6,808 (7) | $2,172,569 | | — | — | — | — | 5,072 (8) | $1,618,577 |
| Yoav Galin | 12,499 | — | $5.01 | October 29, 2024 | — | — | | 8,400 | — | $25.09 | August 19, 2025 | — | — | | 17,784 | — | $17.14 | August 23, 2026 | — | — | | 40,948 | 2,560 (1) | $14.85 | February 14, 2027 | — | — | | 19,721 | 6,613 (2) | $38.05 | January 2, 2028 | — | — | | 22,007 | 12,379 (3) | $36.15 | January 2, 2029 | — | — | | 6,102 | 4,958 (4) | $101.81 | January 2, 2030 | — | — | | — | — | — | — | 1,385 (5) | $441,981 | | — | — | — | — | 3,589 (6) | $1,145,322 | | — | — | — | — | 6,808 (7) | $2,172,569 | | — | — | — | — | 5,072 (8) | $1,618,577 |
| Uri Bechor | 6,102 | 4,958 (4) | $101.81 | January 2, 2030 | — | — | | — | — | — | — | 8,179 (10) | $2,610,082 | | — | — | — | — | 5,072 (8) | $1,618,577 |
 | * | The market value of shares or units of stock that have not vested is based on the number of shares or units of stock that have not vested multiplied by the closing price of our common stock on the last trading day of the year ended December 31, 2018 ($35.10)2020 ($319.12). |
| (1) | The shares subject to the stock option vest over a four‑year period commencing August 31, 2015, with 1/16 of the shares vesting quarterly thereafter. |
(2) | The shares subject to the stock option vest over a four‑year period commencing August 31, 2016, with 1/16 of the shares vesting quarterly thereafter. |
(3) | The shares subject to the stock option vest over a four‑four year period commencing February 28, 2017, with 1/16 of the shares vesting quarterly thereafter. |
(4)(2) | The shares subject to the stock option vest over a four‑four year period commencing February 28, 2018 with 1/16 of the shares vesting quarterly thereafter. |
(5)(3) | The shares subject to the RSUstock option vest over a four-yearfour year period commencing on August 31, 2015,February 28, 2019 with 1/16 of the shares vesting quarterly thereafter. |
(6)(4) | The shares subject to the RSUstock option vest over a four-yearfour year period commencing on August 31, 2016,February 28, 2020 with 1/16 of the shares vesting quarterly thereafter. |
(7)(5) | The shares subject to the RSU vest over a four-year period commencing on February 28, 2017, with 1/16 of the shares vesting quarterly thereafter. |
(8)(6) | The shares subject to the RSU vest over a four-year period commencing on February 28, 2018, with 1/16 of the shares vesting quarterly thereafter. |
| (7) | The shares subject to the RSU vest over a four-year period commencing on February 28, 2019, with 1/16 of the shares vesting quarterly thereafter. |
| (8) | The shares subject to the RSU vest over a four-year period commencing on February 28, 2020, with 1/16 of the shares vesting quarterly thereafter. |
| (9) | The shares subject to the RSU vest over a four-year period commencing on November 30, 2018, with 1/16 of the shares vesting quarterly thereafter. |
| (10) | The shares subject to the RSU vest over a four-year period commencing on November 30, 2019, with 1/16 of the shares vesting quarterly thereafter. |
Option Exercises and Stock Vested Table
The following table provides information regarding option exercises and stock vested during the year ended December 31, 20182020 for each NEO.
| | Stock Awards | | Name: | Number of Shares Acquired on Exercise | Value Realized upon Exercise ($)(1) | Number of Shares Acquired on Vesting | Value Realized on Vesting ($)(2) | | Zivi Lando | 66,980 | $5,270,952 | 17,632 | $3,449,409 | | Ronen Faier | 93,471 | $15,984,109 | 15,456 | $2,976,914 | | Rachel Prishkolnik | 24,122 | $2,816,893 | 11,920 | $2,307,265 | | Yoav Galin | - | - | 14,377 | $2,760,675 | | Uri Bechor | - | - | 3,896 | $1,039,730 |
| | | Option Awards | | | Stock Awards | | | Name | | Number of Shares Acquired on Exercise | | | Value Realized upon Exercise ($)(1) | | | Number of Shares
Acquired on Vesting | | | Value Realized on
Vesting ($)(2) | | | Guy Sella | | | 416,666 | | | $ | 19,351,225 | | | | 40,503 | | | $ | 1,947,615 | | | Ronen Faier | | | 70,000 | | | $ | 2,752,541 | | | | 13,656 | | | $ | 656,804 | | | Zvi Lando | | | 72,000 | | | $ | 3,543,415 | | | | 13,656 | | | $ | 656,804 | | | Yoav Galin | | | 59,967 | | | $ | 2,010,596 | | | | 13,656 | | | $ | 656,804 | | | Rachel Prishkolnik | | | 12,550 | | | $ | 485,797 | | | | 8,360 | | | $ | 401,867 | |
(1) The value realized on exercise is calculated as the difference between (A) either (i) the actual sales price of the shares underlying the options exercised if the shares were immediately sold upon exercise or (ii) the closing price of the shares underlying options exercised if the shares were not immediately sold after exercise and (B) the applicable exercise price of the options.
(2) The value realized on vesting is calculated by multiplying (A) the closing price of a common share on the vesting date and (B) the number of shares acquired on vesting before withholding taxes.
| (1) | The value realized on exercise is calculated as the difference between (A) either (i) the actual sales price of the shares underlying the options exercised if the shares were immediately sold upon exercise or (ii) the closing price of the shares underlying options exercised if the shares were not immediately sold after exercise and (B) the applicable exercise price of the options. |
| (2) | The value realized on vesting is calculated by multiplying (A) the closing price of a common share on the vesting date and (B) the number of shares acquired on vesting before withholding taxes. |
35
Potential Payments and Acceleration of Equity upon Termination or Termination in Connection with a Change in Control
Severance Pursuant to the terms of the employment agreements with the NEOs, as well as in accordance with Israeli law, upon a termination of the NEO’s employment, each NEO is entitled to the payments we have made on behalf of each NEO to the Manager’s Insurance Policy.
Equity Acceleration Pursuant to the terms of their respective employment agreements, if within twelve months following the occurrence of a “change in control” an NEO is terminated without “cause” or if an NEO terminates his or her employment due to “justifiable reasons” (each such term as defined in the NEO’sNEOs employment agreements), the NEO will be entitled to full acceleration of any unvested shares of restricted stock or stock options held by him at the time of such termination. Furthermore, in the event of a “Transaction” (as defined in our 2007 Global Incentive Plan (the “2007 Plan”)), all outstanding equity held by each NEO will accelerate to the extent such awards are not assumed or substituted by a successor corporation in connection with such transaction. 
Potential Payments as of December 31, 20182020
The following tables show the value of the potential payments and benefits our named executive officers would receive in various scenarios involving a termination of their employment or a change in control or other qualifying corporate transaction, assuming a December 31, 20182020 triggering date and, where applicable, using a price per share for our common stock of $35.10$319.12 (the closing price of a share of our common stock as of the last trading day of the year ended December 31, 2018)2020)1.
Name: Guy Sella | | Termination upon Death of Employee | | | | | | Voluntary Termination by Employee After Provision of Requisite Notice | | | Termination by Company After Provision of Requisite Notice | | | Termination w/o Cause or for Good Reason | | | Termination w/o Cause or for Good Reason within 12 months of Change in Control | | | Base Salary | | | - | | | | - | | | | 143,076 | | | | 143,076 | | | | 143,076 | | | | 143,076 | | | Israeli Social Benefits | | | - | | | | - | | | | 25,080 | | | | 25,080 | | | | 25,080 | | | | 25,080 | | | Unvested Options/RSUs (1) | | | - | | | | - | | | | 627,565 | | | | 627,565 | | | | 627,565 | | | | 5,077,749 | | | Accrued Vacation Pay | | | 425,223 | | | | 425,223 | | | | 425,223 | | | | 425,223 | | | | 425,223 | | | | 425,223 | | | TOTAL | | | 425,223 | | | | 425,223 | | | | 1,220,944 | | | | 1,220,944 | | | | 1,220,944 | | | | 5,671,128 | |
| (1) | The value realized is based on the difference between the exercise price of the stock options and the closing price of our common stock on the last trading day of the year ended December 31, 2018, and, in the case of RSUs, the number of RSUs that would have vested multiplied by the closing price of our common stock on the last trading day of the year ended December 31, 2018.
|
1The potential payments detailed in the tables below are displayed in USD, whereas the Company pays its NEOs’ salaries in New Israeli Shekels (NIS), and therefore, actual payments may change due to exchange rate fluctuations.
Name: Ronen Faier | | Termination upon Death of Employee | | | | | | Voluntary Termination by Employee After Provision of Requisite Notice | | | Termination by Company After Provision of Requisite Notice | | | Termination w/o Cause or for Good Reason | | | Termination w/o Cause or for Good Reason within 12 months of Change in Control | | | Base Salary | | | - | | | | - | | | | 54,629 | | | | 54,629 | | | | 54,629 | | | | 54,629 | | | Israeli Social Benefits | | | - | | | | - | | | | 10,052 | | | | 10,052 | | | | 10,052 | | | | 10,052 | | | Unvested Options/RSUs (1) | | | - | | | | - | | | | 209,973 | | | | 209,973 | | | | 209,973 | | | | 1,647,134 | | | Accrued Vacation Pay | | | 97,687 | | | | 97,687 | | | | 97,687 | | | | 97,687 | | | | 97,687 | | | | 97,687 | | | TOTAL | | | 97,687 | | | | 97,687 | | | | 372,341 | | | | 372,341 | | | | 372,341 | | | | 1,809,502 | |
| (1) | The value realized is based on the difference between the exercise price of the stock options and the closing price of our common stock on the last trading day of the year ended December 31, 2018, and, in the case of RSUs, the number of RSUs that would have vested multiplied by the closing price of our common stock on the last trading day of the year ended December 31, 2018.
|
Name: Zvi Lando | | Termination upon Death of Employee | | | | | | Voluntary Termination by Employee After Provision of Requisite Notice | | | Termination by Company After Provision of Requisite Notice | | | Termination w/o Cause or for Good Reason | | | Termination w/o Cause within 12 months of Change in Control(2) | | | Base Salary | | | - | | | | - | | | | 54,629 | | | | 54,629 | | | | 54,629 | | | | 54,629 | | | Israeli Social Benefits | | | - | | | | - | | | | 10,421 | | | | 10,421 | | | | 10,421 | | | | 10,421 | | | Unvested Options/RSUs (1) | | | - | | | | - | | | | 209,973 | | | | 209,973 | | | | 209,973 | | | | 1,647,134 | | | Accrued Vacation Pay | | | 154,106 | | | | 154,106 | | | | 154,106 | | | | 154,106 | | | | 154,106 | | | | 154,106 | | | TOTAL | | | 154,106 | | | | 154,106 | | | | 429,129 | | | | 429,129 | | | | 429,129 | | | | 1,866,290 | |
| (1) | The value realized is based on the difference between the exercise price of the stock options and the closing price of our common stock on the last trading day of the year ended December 31, 2018, and, in the case of RSUs, the number of RSUs that would have vested multiplied by the closing price of our common stock on the last trading day of the year ended December 31, 2018.
|
Name: Yoav Galin | | Termination upon Death of Employee | | | | | | Voluntary Termination by Employee After Provision of Requisite Notice | | | Termination by Company After Provision of Requisite Notice | | | Termination w/o Cause or for Good Reason | | | Termination w/o Cause or for Good Reason within 12 months of Change in Control | | | Base Salary | | | - | | | | - | | | | 75,440 | | | | 75,440 | | | | 75,440 | | | | 75,440 | | | Israeli Social Benefits | | | - | | | | - | | | | 14,745 | | | | 14,745 | | | | 14,745 | | | | 14,745 | | | Unvested Options/RSUs (1) | | | - | | | | - | | | | 209,973 | | | | 209,973 | | | | 209,973 | | | | 1,647,134 | | | Accrued Vacation Pay | | | 322,544 | | | | 322,544 | | | | 322,544 | | | | 322,544 | | | | 322,544 | | | | 322,544 | | | TOTAL | | | 322,544 | | | | 322,544 | | | | 622,702 | | | | 622,702 | | | | 622,702 | | | | 2,059,863 | |
| (1) | The value realized is based on the difference between the exercise price of the stock options and the closing price of our common stock on the last trading day of the year ended December 31, 2018, and, in the case of RSUs, the number of RSUs that would have vested multiplied by the closing price of our common stock on the last trading day of the year ended December 31, 2018.
|
| | Termination upon Death of Employee | | | | | | Voluntary Termination by Employee After Provision of Requisite Notice | | | Termination by Company After Provision of Requisite Notice | | | Termination w/o Cause or for Good Reason | | | Termination w/o Cause or for Good Reason within 12 months of Change in Control | | | | Zivi Lando | | Termination upon Death of Employee ($) | Termination for Cause ($) | Resignation by the Employee or Termination without Cause by the Company ($) | Termination w/o Cause within 12 months of Change in Control ($) | | Base Salary | | | - | | | | - | | | | 45,091 | | | | 45,091 | | | | 45,091 | | | | 45,091 | | - | 144,635 | 144,635 | | Israeli Social Benefits | | | - | | | | - | | | | 8,983 | | | | 8,983 | | | | 8,983 | | | | 8,983 | | - | 22,023 | 22,023 | | Unvested Options/RSUs (1) | | | - | | | | - | | | | 138,062 | | | | 138,062 | | | | 138,062 | | | | 1,197,384 | | | | Equity Grants Vesting (1)(2) | | - | 3,234,952 | 19,632,279 | | Accrued Vacation Pay | | | 56,876 | | | | 56,876 | | | | 56,876 | | | | 56,876 | | | | 56,876 | | | | 56,876 | | 347,648 | 347,648 | | TOTAL | | | 56,876 | | | | 56,876 | | | | 249,012 | | | | 249,012 | | | | 249,012 | | | | 1,308,334 | | | | Total | | 347,648 | 3,749,258 | 20,146,585 |
| (1) | The value realized is based on the difference between the exercise price of the stock options and the closing price of our common stock on the last trading day of the year ended December 31, 2018,2020, and, in the case of RSUs, the number of RSUs that would have vested multiplied by the closing price of our common stock on the last trading day of the year ended December 31, 2018.2020. |
Each of our non-employee directors is eligible to receive compensation for their service on our Board of Directors consisting of annual cash retainers and equity awards. For the year 2018, our compensation committee received a report from FW Cook which included a revision to the peer group and recommendations for slight modifications to the compensation of our directors. The table below reflects the compensation of our directors in effect in 2018, which was paid in four equal quarterly installments. Directors serving as chairs of committees do not receive additional compensation for serving as general members of the committees they chair.
| (2) | The NEO is entitled to continued vesting of outstanding equity awards during any required notice period. |
Position
1 | The potential payments detailed in the tables below are displayed in USD, whereas the Company pays its NEOs’ salaries in New Israeli Shekels (NIS), and therefore, actual payments may change due to exchange rate fluctuations. | |
| | |
Board Member | | | 50,000 | |
Audit Committee Chair | | | 25,000 | |
Compensation Committee Chair | | | 17,500 | |
Nominating and Corporate Governance Committee Chair | | | 10,000 | |
Audit Committee Non-Chair Member | | | 10,000 | |
Compensation Committee Non-Chair Member | | | 7,500 | |
Nominating and Corporate Governance Committee Non-Chair Member | | | 5,000 | |
The modification reflected above for 2018 included an increase in the cash retainer by $10,000 for board members from $40,000 to $50,000, an increase in the Audit Committee chair retainer by $5,000 from $20,000 to $25,000 and an increase in the Compensation Committee chair retainer by $2,500 from $15,000 to $17,500, for an average $35,000 increase per director and a total program value increase from $ $167,750 to $202,750.
The equity awards for our non-employee directors in 2018 consisted of (i) an initial equity award in the form of restricted stock units, granted upon the individual’s initial appointment to our Board of Directors, with a grant date value of $150,000, and (ii) an annual equity award in the form of restricted stock units with a grant date value of $125,000 for 2018, subject to proration for directors whose commencement of Board service is in the midst of a particular year. The initial restricted stock unit awards vest in equal annual installments over three years and annual restricted stock unit awards vest in full after one year (or the balance of the year in which the award is granted, in the case of pro-rated annual awards), subject in each case to continued Board service through the applicable vesting date.| Ronen Faier | Termination upon Death of Employee ($) | Termination for Cause ($) | Resignation by the Employee or Termination without Cause by the Company ($) | Termination w/o Cause within 12 months of Change in Control ($) |
| Base Salary | - | - | 120,840 | 120,840 |
| Israeli Social Benefits | - | - | 18,816 | 18,816 |
Equity Grants Vesting (1)(2) | - | - | 2,849,836 | 14,620,989 |
| Accrued Vacation Pay | 208,206 | 208,206 | 208,206 | 208,206 |
| Total | 208,206 | 208,206 | 3,197,698 | 14,968,851 |
For the year 2019, our compensation committee received a report from FW Cook which included a revision to the peer group and recommendations for slight modifications to the compensation of our directors. The modifications adopted for the 2019 compensation of directors included an increase in the cash retainer by $5,000, from $50,000 to $55,000 for board members, an increase in the audit committee member retainer by $2,500, from $10,000 to $12,500 and an increase in the annual equity award by $30,000, from $125,000 to $155,000.
Our directors are reimbursed for travel, food, lodging, and other expenses directly related to their activities as directors. Our directors are also entitled to the protection provided by the indemnification provisions in our by-laws. Our Board of Directors may revise the compensation arrangements for our directors from time to time.
The following table sets forth the total cash and equity compensation paid to our non‑employee directors for their service on our board of directors and committees of our board of directors during the year ended December 31, 2018. Mr. Sella is not eligible to receive any additional compensation for serving on our board of directors. His compensation for serving as our Chief Executive Officer is disclosed in the “Summary Compensation Table” above.
| Name | | Fees Earned or Paid in Cash ($) | | | Stock Awards ($) (1) | | | Total ($) | |
| Dan Avida (2) | | | 62,500 | | | | 125,000 | | | | 187,500 | |
| Yoni Cheifetz | | | - | | | | 125,000 | | | | 125,000 | |
| Marcel Gani | | | 82,500 | | | | 125,000 | | | | 207,500 | |
| Doron Inbar | | | 67,500 | | | | 125,000 | | | | 192,500 | |
| Avery More | | | 77,500 | | | | 125,000 | | | | 202,500 | |
| Tal Payne | | | 60,000 | | | | 125,000 | | | | 185,000 | |
——————
| (1) | Represents the grant date fairThe value of 2,028 restricted stock units granted to each director on May 23, 2018, calculated in accordance with U.S. GAAP. All units will become fully vested on May 22, 2019. The grant date fair valuerealized is based on $61.65 per share,the difference between the exercise price of the stock options and the closing price of our sharecommon stock on the grant date. Aslast trading day of the year ended December 31, 2018, each director held 2,028 unvested restricted2020, and, in the case of RSUs, the number of RSUs that would have vested multiplied by the closing price of our common stock units.on the last trading day of the year ended December 31, 2020. |
| (2) | The NEO is entitled to continued vesting of outstanding equity awards during any required notice period. |
| Rachel Prishkolnik | Termination upon Death of Employee ($) | Termination for Cause ($) | Resignation by the Employee or Termination without Cause by the Company ($) | Termination w/o Cause within 12 months of Change in Control ($) |
| Base Salary | - | - | 109,332 | 109,332 |
| Israeli Social Benefits | - | - | 16,637 | 16,637 |
Equity Grants Vesting (1)(2) | - | - | 2,034,580 | 11,813,070 |
| Accrued Vacation Pay | 154,606 | 154,606 | 154,606 | 154,606 |
| Total | 154,606 | 154,606 | 2,315,155 | 12,093,645 |
| (1) | The value realized is based on the difference between the exercise price of the stock options and the closing price of our common stock on the last trading day of the year ended December 31, 2020, and, in the case of RSUs, the number of RSUs that would have vested multiplied by the closing price of our common stock on the last trading day of the year ended December 31, 2020. |
| (2) | The NEO is entitled to continued vesting of outstanding equity awards during any required notice period. |
| Yoav Galin | Termination upon Death of Employee ($) | Termination for Cause ($) | Resignation by the Employee or Termination without Cause by the Company ($) | Termination w/o Cause within 12 months of Change in Control ($) |
| Base Salary | - | - | 109,332 | 109,332 |
| Israeli Social Benefits | - | - | 17,208 | 17,208 |
Equity Grants Vesting (1)(2) | - | - | 2,634,228 | 12,469,923 |
| Accrued Vacation Pay | 527,152 | 527,152 | 527,152 | 527,152 |
| Total | 527,152 | 527,152 | 3,287,920 | 13,123,615 |
| (1) | The value realized is based on the difference between the exercise price of the stock options and the closing price of our common stock on the last trading day of the year ended December 31, 2020, and, in the case of RSUs, the number of RSUs that would have vested multiplied by the closing price of our common stock on the last trading day of the year ended December 31, 2020. |
| (2) | The NEO is entitled to continued vesting of outstanding equity awards during any required notice period. |
| Uri Bechor | Termination upon Death of Employee ($) | Termination for Cause ($) | Resignation by the Employee or Termination without Cause by the Company ($) | Termination w/o Cause within 12 months of Change in Control ($) |
| Base Salary | - | - | 237,014 | 237,014 |
| Israeli Social Benefits | - | - | 37,784 | 37,784 |
Equity Grants Vesting (1)(2) | - | - | 849,464 | 5,306,082 |
| Accrued Vacation Pay | 38,883 | 38,883 | 38,883 | 38,883 |
| Total | 38,883 | 38,883 | 1,163,145 | 5,619,763 |
| (1) | The value realized is based on the difference between the exercise price of the stock options and the closing price of our common stock on the last trading day of the year ended December 31, 2020, and, in the case of RSUs, the number of RSUs that would have vested multiplied by the closing price of our common stock on the last trading day of the year ended December 31, 2020. |
| (2) | The NEO is entitled to continued vesting of outstanding equity awards during any required notice period. |
2020 CEO Pay Ratio
Under the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(u) of Regulation S-K, we are required to disclose the annual total compensation of our median employee, the annual total compensation of our Chairman and CEO, Mr. Guy Sella,Zvi Lando, and the ratio of these two amounts. The 20182020 annual total compensation of the median compensated of all our employees who were employed as of December 31, 2018,2020, other than Mr. Sella,Lando, was $86,318.$82,965. Mr. Sella’s 2018Lando’s 2020 annual total compensation was $4,178,181,$4,079,710, and the ratio of these two amounts was 48.449.2 to 1. Our pay ratio is a reasonable estimate calculated in a manner consistent with SEC rules based on our payroll and employment records and the methodology described below.
To identify the “median employee,” we utilized the 20182020 base salary earned during the year and target annual cash incentive for the 20182020 performance year, which we annualized for any permanent employee who did not work for the entire year.
Earnings of our employees outside the U.S. were converted to U.S. dollars using annual average currency exchange rates.
Using the measure described above, we identified a “median employee” who is a full-time employee located in Israel and calculated the median employee’s annual total compensation for our pay ratio in accordance with applicable SEC rules for calculating Summary Compensation Table compensation.
SolarEdge is a global company, with operations worldwide and with its executive officers and a majority of its employees located in Israel, the country in which our headquarters office is located. Because the SEC rules for identifying our median employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their employee populations and compensation practices, the pay ratio reported by other companies may not be comparable to the pay ratio for our Company, as other companies have headquarterheadquarters offices in different countries, have different employee populations and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their pay ratios.
TRANSACTIONS WITH RELATED PERSONSDirector Compensation
Each of our non-employee directors is eligible to receive compensation for their service on our Board of Directors consisting of annual cash retainers and equity awards. For the year 2020, our compensation committee received a report from its independent consultants which included a revision to the peer group and recommendations for modifications to the compensation of our directors. The table below reflects the compensation of our directors in effect in 2020, which was paid in quarterly or semi-annual installments Directors serving as chairs of committees do not receive additional compensation for serving as general members of the committees they chair. In the second quarter of 2020, our Board members voluntarily elected to reduce their annual retainer by 20%, which reduction was in effect until the end of fiscal 2020.
| Position | Annual Retainer Effective January 1, 2020 ($) | Annual Retainer Effective April 1, 2020 |
| Chairman of the Board | 60,000 | 48,000 |
| Board Member | 55,000 | 44,000 |
| Audit Committee Chair | 32,500 | 26,000 |
| Compensation Committee Chair | 22,500 | 18,000 |
| Nominating and Corporate Governance Committee Chair | 15,000 | 12,000 |
| Audit Committee Non-Chair Member | 12,500 | 10,000 |
| Compensation Committee Non-Chair Member | 7,500 | 6,000 |
| Nominating and Corporate Governance Committee Non-Chair Member | 5,000 | 4,000 |
The equity awards for our non-employee directors in 2020 consisted of (i) an initial equity award in the form of restricted stock units, granted upon the individual’s initial appointment to our Board of Directors, as applicable, with a grant date value of $150,000, and (ii) an annual equity award in the form of restricted stock units with a grant date value of $155,000 for 2020, subject to proration for directors whose commencement of Board service is in the midst of a particular year. The initial restricted stock unit awards vest in equal annual installments over three years and annual restricted stock unit awards vest in full after one year (or the balance of the year in which the award is granted, in the case of pro-rated annual awards), subject in each case to continued Board service through the applicable vesting date.
Our directors are reimbursed for travel, food, lodging, and other expenses directly related to their activities as directors. Our directors are also entitled to the protection provided by the indemnification provisions in our by-laws. Our Board of Directors may revise the compensation arrangements for our directors from time to time.
The following table sets forth the total cash and equity compensation paid to our non employee directors for their service on our board of directors and committees of our board of directors during the year ended December 31, 2020. Mr. Lando is not eligible to receive any additional compensation for serving on our board of directors. His compensation for serving as the Company’s Chief Executive Officer is disclosed in the “Summary Compensation Table” above.
| Name | Fees Earned or Paid in Cash ($) | Stock Awards ($) | Total ($) |
| Nadav Zafrir | 101,083 | 155,008 (1) | 256,091 |
Dan Avida (2) | 43,875 | 155,008 (1) | 198,883 |
Yoni Cheifetz (3) | - | 155,008 (1) | 155,008 |
| Marcel Gani | 74,375 | 155,008 (1) | 229,383 |
| Doron Inbar | 63,750 | 155,008 (1) | 218,758 |
| Avery More | 78,625 | 155,008 (1) | 233,633 |
| Tal Payne | 57,375 | 155,008 (1) | 212,383 |
| (1) | Represents the grant date fair value of 1,211 restricted stock units granted to each director on May 18, 2020, calculated in accordance with U.S. GAAP. All units will become fully vested on May 17, 2021. The grant date fair value is based on $128.0 per share, the closing price of our share on the grant date subject to continued service through such date. As of December 31, 2020, each director held 1,211 unvested restricted stock units except for Mr. Zafrir who held 2,392 unvested estricted stock units. |
| (2) | Mr. Avida resigned as a member of our Board as of September 1, 2020. The stock award granted to him in 2020 was cancelled upon his resignation. |
| (3) | Mr. Cheifetz has waived his right to receive cash fees. |
Transactions with Related Persons
Review, Approval, or Ratification of Transactions with Related Persons
The audit committeeAudit Committee of our Board of Directors has primary responsibility for reviewing and approving transactions with related persons. Our audit committeeAudit Committee charter provides that the audit committeeAudit Committee shall review and approve in advance any related person transactions.
We adopted a formal written policy providing that our executive officers, directors, nominees for election as directors, beneficial owners of more than 5% of any class of our voting stock, any member of the immediate family of any of the foregoing persons, and any firm, corporation or other entity in which any of the foregoing persons is employed, is a general partner or principal or in a similar position, or in which such person has a 5% or greater beneficial ownership interest, are not permitted to enter into a related person transaction with us without the consent of our audit committee,Audit Committee, subject to the exceptions described below. In approving or rejecting any proposed “related person” transaction, our audit committeeAudit Committee considers the relevant facts and circumstances available and deemed relevant to our audit committee,Audit Committee, including whether the transaction is on terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances and the extent of the related person’s interest in the transaction. Our audit committeeAudit Committee has determined that certain transactions will not require audit committeeAudit Committee approval, including certain employment arrangements of executive officers, director compensation, transactions with another company at which a related person’s only relationship is as a non-executive employee or beneficial owner of less than 5% of that company’s shares, and transactions where a related person’s interest arises solely from the ownership of our common stock and all holders of our common stock and all holders of our common stock received the same benefit on a pro rata basis.
Fiscal Year ended December 31, 20182020 Transactions with Related Person
DuringSince the beginning of the last fiscal year, ended December 31, 2018, we hadthere have been no, and there are no currently proposed, transactions with aany “related person” that requiresrequire disclosure under Item 404 of Regulation S-K.
REPORT OF THE AUDIT COMMITTEE
Report Of The Audit Committee
This report of the Audit Committee is required by the SEC and, in accordance with the SEC’s rules, will not be deemed to be part of or incorporated by reference by any general statement incorporating by reference this Proxy Statement into any filing under the Securities Act of 1933, as amended, or under the Securities Exchange Act of 1934, as amended, except to the extent that the Company specifically incorporates this information by reference, and will not otherwise be deemed “soliciting material” or “filed” under either the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.
The principal purpose of the Audit Committee is to represent and assist the Board of Directors in discharging its oversight responsibility relating to: (i) the accounting and financial reporting processes of the Company and its subsidiaries, including the audits of the Company’s financial statements and the integrity of the financial statements; (ii) the Company’s compliance with legal and regulatory requirements; (iii) the outside auditor’s qualifications, independence and performance; and (iv) the design, implementation, and performance of the Company’s internal audit function. The Audit Committee is responsible for the appointment, compensation, retention, and oversight of work of the Company’s independent auditor. The Audit Committee’s function is more fully described in its charter and summarized starting on page 1120 of this Proxy Statement.
Our management is responsible for the preparation, presentation, and integrity of our financial statements, for the appropriateness of the accounting principles and reporting policies that we use, and for establishing and maintaining adequate internal control over financial reporting. EY, our independent registered public accounting firm, was responsible for performing an independent audit of our consolidated financial statements included in our 20182020 Annual Report on Form 10-K for the year ended December 31, 2018,2020 and its subsequent amendment on Form 10K/A, and expressing an opinion on the conformity of those financial statements with generally accepted accounting principles.
The Audit Committee has reviewed and discussed with management our audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2018.2020.
The Audit Committee has also reviewed and discussed with EY the audited financial statements in our Annual Report on Form 10-K /A for the year ended December 31, 2018.2020. In addition, the Audit Committee discussed with EY those matters required to be discussed under applicable standards of the Public Company Accounting Oversight Board (the “PCAOB”). and the SEC. Additionally, EY provided to the Audit Committee, the written disclosures and the letter required by applicable requirements of the PCAOB regarding EY’s communications with the Audit Committee concerning independence. The Audit Committee also discussed with EY its independence from the Company.
Based upon the review and discussions described above, the Audit Committee recommended to the Board of Directors that the audited financial statements be included in our Annual Report on Form 10-K for the year ended December 31, 20182020 for filing with the SEC.
THE AUDIT COMMITTEE
Marcel Gani (Chairman)
Tal Payne
Doron Inbar
DELINQUENT SECTION 16(a)
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE REPORTS Section 16(a) of the Exchange Act and SEC rules require our directors, executive officers, and persons who own more than 10% of any class of our common stock to file reports of their ownership and changes in ownership of our common stock with the SEC. Based solely on our review of the reports filed during the year ended December 31, 2018 and on written representations from such reporting persons,2020, we determined that all required reports have been properly and timely filed other than one form 4 filing for Mr. Ronen Faier, five form 4 filings for Mr. Guy Sella, five form 4 filings for Mr. Meir Adest, three form 4 filings for Mr. Lior Handelsman, three form 4 filings for Mr. Zvi Lando, two form 4 filings for Ms. Rachel Prishkolnik, one form 4 filing for Mr. Yoav Galin and one form 4 filing for Mr. Avery More,the following Form 4s, due to administrative errors and due to the fact that the Company’s headquarters in Israel work Sundays through Thursdays.Thursdays: one for Mr. Nadav Zafrir, four for Mr. Avery More, one for Mr. Dan Avida, three for Mr. Doron Inbar, one for Mr. Marcel Gani, one for Ms. Tal Payne, one for Mr. Yoni Cheifetz, one for Mr. Meir Adest, one for Mr. Ronen Faier, three for Mr. Zvi Lando, four for Mr. Lior Handelsman, three for Ms. Rachel Prishkolnik, two for Mr. Yoav Galin and one for Mr. Uri Bechor. The Company continues to take measures to ensure thatprevent these delays will not continue in the future.
Stockholder Proposals for the 2022 Annual Meeting
Rule 14a-8 Proposals. Stockholder proposals for inclusion under Rule 14a-8 in the Company’s 20202022 proxy statement for the proxy relating to our 20202022 annual meeting of stockholders (the “2022 Annual Meeting”) must be received by the Company at the principal executive offices of the Company no later than the close of business on December 25, 2019. 23, 2021. Such proposals also must comply with the other rules of the Securities and Exchange Commission relating to Rule 14a-8 stockholders’ proposals, which (among other things) provide that to be eligible to submit a proposal, a stockholder must have continuously held at least $2,000 in market value, or 1%, of the Company’s securities entitled to vote on the proposal at the 2020 Annual Meeting, for at least one year by the date the proposal is submitted.proposals.
Advance Notice Proposals and Nominations. In addition, any stockholder seeking to bring business before the 20202022 Annual Meeting outside of Rule 14a-8 of the Exchange Act or to nominate a director under the advance notice provisions of our Amended and Restated Bylaws (the “Bylaws”) must provide timely notice of such proposal of business or nomination to the Company’s Corporate Secretary. Specifically, written notice of any such proposed business or nomination must be received bydelivered to the Company’s Corporate Secretary at our principal executive offices no earlier than the close of business on February 6, 20201, 2022 and no later than the close of business March 7, 2020. 3, 2022.
In the event that the date of our 20202022 Annual Meeting is more than 30 days before or more than 30 days after the anniversary date of our 20192021 Annual Meeting of Stockholders, timely notice by the stockholder must be so delivered not earlier than the close of business on the 120th day prior to the 20202022 annual meeting and not later than the close of business on the later of the 90th day prior to the 20202022 annual meeting or the 10th day following the date on which public announcement of the date of such meeting is first made by the Company.
A stockholder’s notice to the Corporate Secretary of the Company must be in proper written form and must include the information and consents required by our Bylaws related to the stockholder giving the notice, the beneficial owner (if any) on whose behalf the nomination or proposal is made, and each person whom the stockholder proposes to nominate for election as a director, or the business desired to be brought before the meeting.
A copy of the full text of the Bylaw provisions discussed above may be obtained by writing to the Corporate Secretary of the Company at 1 Hamada Street Herziliya Pituach, Israel, 4673335.
DIRECTORS’ ATTENDANCE AT ANNUAL STOCKHOLDER MEETINGSDirectors’ Attendance At Annual Stockholder Meetings
The Company encourages members of its Board to attend its annual stockholder meetings. TwoThree members of the Company’s Board attended the Company’s 20182020 annual stockholder meeting.
OTHER BUSINESSOther Business
The Board does not presently intend to bring any other business before the Annual Meeting, and, so far as is known to the Board, no matters are to be brought before the Annual Meeting except as specified in the Notice of the Annual Meeting. As to any business that may properly come before the Annual Meeting, however, it is intended that proxies will be voted in respect thereof in accordance with the judgment of the persons voting such proxies.
Whether or not you expect to attend the virtual meeting, please vote by telephone or via the Internet or by completing, dating, signing, and promptly returning the proxy card if you request and receive (or requested and received) a form of proxy, so that your shares may be represented at the meeting.
WHERE YOU CAN FIND MORE INFORMATIONWhere You Can Find More Information
The Company files annual, quarterly, and current reports, proxy statements, and other information with the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended.
We make available free of charge on or through our Internet website, http://investors.solaredge.com, our reports and other information filed with or furnished to the SEC and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. The SEC’s Internet website, www.sec.gov, also contains reports, proxy statements, and other information about issuers, like us, who file electronically with the SEC.
WE WILL PROVIDE, WITHOUT CHARGE, ON THE WRITTEN REQUEST OF ANY STOCKHOLDER, A COPY OF OUR ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2018 AND FOR THE YEAR ENDED DECEMER 31, 2017,2020, INCLUDING THE FINANCIAL STATEMENTS AND THE FINANCIAL STATEMENT SCHEDULES REQUIRED TO BE FILED WITH THE SEC PURSUANT TO RULE 13A-1. STOCKHOLDERS SHOULD DIRECT SUCH REQUESTS TO THE COMPANY’S SECRETARY AT SOLAREDGE TECHNOLOGIES, INC., 1 HAMADA STREET, HERZILIYA PITUACH 4673335, ISRAEL, OR BY EMAIL AT INVESTORS@SOLAREDGE.COM.INVESTORS@SOLAREDGE.COM.
42
APPENDIX A
Reconciliation of GAAP Net Income and Diluted EPS to NON-GAAP Net Income
and Diluted EPS
U.S. dollars in thousands (except share and per share data)
| | Reconciliation of GAAP to Non-GAAP Net income Year ended |
December 31, 2020
| December 31, 2019 |
| Net income attributable to Solaredge Technologies Inc. (GAAP) | 140,322 | 146,549 |
| Cost of product adjustment | 313 | 1,556 |
| Stock-based compensation | 67,309 | 41,889 |
| Amortization and depreciation of acquired assets | 11,777 | 10,764 |
| Acquisition related expenses | ---- | 949 |
| Assets disposal | 1,207 | 622 |
| Other operating (income) expenses | (3,429) | 30,696 |
| Notes due 2025 | 3,185 | ---- |
| Non cash interest | 4,887 | 3,645 |
| Currency fluctuation related to lease standard | 2,274 | 2,591 |
| Deferred taxes | (3,434) | (6,037) |
| Net income attributable to Solaredge Technologies Inc. (Non-GAAP) | 224,411 | 233,224 |
| | Reconciliation of GAAP to Non-GAAP Net income Year ended |
| December 31, 2020 | December 31, 2019 |
| Net diluted earnings per share (GAAP) | 2.66 | 2.90 |
| Cost of product adjustment | ---- | 0.02 |
| Nonvested PSUs | ---- | ---- |
| Stock-based compensation | 1.20 | 0.68 |
| Amortization and depreciation of acquired assets | 0.21 | 0.22 |
| Acquisition related expenses | ---- | 0.02 |
| Assets disposal | 0.03 | 0.01 |
| Other operating (income) expenses | (0.07) | 0.59 |
| Notes due 2025 | 0.02 | ---- |
| Non cash interest | 0.08 | 0.07 |
| Currency fluctuation related to lease standard | 0.05 | 0.05 |
| Deferred taxes | (0.07) | (0.12) |
| Net diluted earnings per share (Non-GAAP) | 4.11 | 4.44 |
*** Exercise Your Right to Vote ***
Important Notice Regarding the Availability of Proxy Materials for the
Shareholder Meeting to Be Held on June 05, 2019
SOLAREDGE TECHNOLOGIES, INC. | | Meeting Information |
| | Meeting Type: Annual Meeting
|
| | For holders as of: April 11, 2019 |
| | Date: June 05, 2019 Time: 9:00 AM EDT mtgtime
Location: Office of Gibson, Dunn & Crutcher LLP
200 Park Avenue
New York, NY 10166
|
SOLAREDGE TECHNOLOGIES, INC.
1 HAMADA ST.
HERZLIYA PITUACH 4673335
ISRAEL
| | You are receiving this communication because you hold shares in the above named company.
|
| This is not a ballot. You cannot use this notice to vote these shares. This communication presents only an overview of the more complete proxy materials that are available to you on the Internet. You may view the proxy materials online at www.proxyvote.com or easily request a paper copy (see reverse side).
|
| | We encourage you to access and review all of the important information contained in the proxy materials before voting. |
| | See the reverse side of this notice to obtain proxy materials and voting instructions. |
- Before You Vote -
How to Access the Proxy Materials
Proxy Materials Available to VIEW or RECEIVE:
1. 2019 Notice and Proxy Statement 2. Annual Report on Form 10-K
How to View Online:
Have the information that is printed in the box marked by the arrow → 
(located on the following page) and visit: www.proxyvote.com.How to Request and Receive a PAPER or E-MAIL Copy:
If you want to receive a paper or e-mail copy of these documents, you must request one. There is NO charge for requesting a copy. Please choose one of the following methods to make your request:
1) BY INTERNET: www.proxyvote.com
2) BY TELEPHONE: 1-800-579-1639
3) BY E-MAIL*: sendmaterial@proxyvote.com
* If requesting materials by e-mail, please send a blank e-mail with the information that is printed in the box marked by the arrow → (located on the following page) in the subject line.
Requests, instructions and other inquiries sent to this e-mail address will NOT be forwarded to your investment advisor. Please make the request as instructed above on or before May 22, 2019 to facilitate timely delivery.
- How To Vote -
Please Choose One of the Following Voting Methods
Vote In Person: Many shareholder meetings have attendance requirements including, but not limited to, the possession of an attendance ticket issued by the entity holding the meeting. Please check the meeting materials for any special requirements for meeting attendance. At the meeting, you will need to request a ballot to vote these shares.
Vote By Internet: To vote now by Internet, go to www.proxyvote.com. Have the information that is printed in the box marked by the arrow → available and follow the instructions.
Vote By Mail: You can vote by mail by requesting a paper copy of the materials, which will include a proxy card.
The Board of Directors recommends you vote FOR each of the following nominees:
1. Election of Directors:
Nominees
1A Dan Avid
1B Yoni Cheifetz
1C Doron Inbar
The Board of Directors recommends you vote FOR proposals 2 and 3.
2. | Ratification of appointment of EY as independent registered public accounting firm for the year ending December 31, 2019. |
3. | Approval of an advisory and non-binding basis, the compensation of our named executive officers (the "Say-on-Pay Proposal"). |
NOTE: Such other business as may properly come before the meeting or any adjournment or postponement thereof.
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:Meeting
to be held on June 1, 2021:
The 20192021 Notice and Proxy Statement and 2020 Annual Report on Form 10-K
are available at www.proxyvote.comwww.proxyvote.com.
SOLAREDGE TECHNOLOGIES, INC.
Hamada 1,
Herzliya Pituach, Israel
Annual Meeting of Shareholders
June 1, 2021, 9:00 PDT
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Ronen FaierZvi Lando and Rachel Prishkolnik and each of them, with full power of substitution and power to act alone, as proxies to vote all the shares of Common Stock which the undersigned would be entitled to vote if personally present and acting at the Annual Meeting of Shareholders of SolarEdge Technologies, Inc., to be held virtually at the offices of Gibson, Dunn & Crutcher at 200 Park Avenue, New York, New York 10166,www.virtualshareholdermeeting.com/SEDG2021 on June 5, 2019,1, 2021, and at any adjournments or postponements thereof.
In their discretion, the proxies are authorized to vote upon such other business as may properly come before the Annual Meeting of Shareholders or any adjournment or postponement thereof.thereof (including, if applicable, on any matter which the Board of Directors did not know would be presented at the Annual Meeting of Shareholders by a reasonable time before the proxy solicitation was made or for the election of a person to the Board of Directors if any nominee named in Proposal 1 becomes unable to serve or for good cause will not serve).
This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy, when properly executed, will be voted in accordance with the Board of Directors' recommendations.
Address change/comments:
(If you noted any Address Changes and/or Comments above, please mark corresponding box on the reverse side.)
(Continued(Continued and to be signed on reverse side.)
| |
Before The Meeting - Go to www.proxyvote.com |
| |
SOLAREDGE TECHNOLOGIES,TECHNOWGIES, INC. 1 HAMADAHAIMDA ST. HERZLIYA PITUACH 4673335 ISRAEL | VOTE BY INTERNET - www.proxyvote.com
Use the Internet to transmit your voting instructions and for electronic delivery of information up untilinformation. Vote by 11:59 P.M. (ET)p.m. Eastern Time on June 4, 2019 the day before the meeting date.May 31, 2021. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. |
| |
| ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS
If you would likeDuring The Meeting - Go to reducewww.virtualshareholdermeeting.com/SEDG2021
|
| |
| You may attend the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronicallymeeting via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and when prompted, indicatevote during the meeting. Have the information that you agree to receive or access proxy materials electronicallyis printed in future years.the box marked by the arrow available and follow the instructions. |
| |
| VOTE BY PHONE - 1-800-690-6903 |
| Use any touch-tone telephone to transmit your voting instructions up until 11:instructions. Vote by11:59 P.M. (ET)p.m. Eastern Time on June 4, 2019 the day before the meeting date.May 31, 2021. Have your proxy card in hand when you call and then follow the instructions. |
| |
| VOTE BY MAIL |
| Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. |
| |
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: | KEEP THIS PORTION FOR YOUR RECORDS |
| DETACH AND RETURN THIS PORTION ONLY |
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
SOLAREDGE TECHNOLOGIES, INC. | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | | | |
| The Board of Directors recommends you vote FOR each
| | | | | | | | |
| of the following nominees: | | | | | | |
1. | Election of Directors:
| | | | | | |
| | | | | | | | | | | | | | | | |
| 1. | | NomineesElection of Directors | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | Against | Abstain | | | | | | |
| | |
| | | | | | | | | | | | |
| | | 1.a
| | | | ☐ | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | 1.b | | Avery More | | ☐ | ☐ | ☐ | | | | | | |
| | | | | | | | | | | | | | | |
| | | 1.c | | Zvi Lando | | ☐ | ☐ | ☐ | | | | | | |
| | | | | | | | | | | | | | | |
| The Board of Directors recommends you vote FOR Proposals 2 and 3. | | | | For | Against | Abstain | | | |
1A | | | | | | | | | | | | | ☐
| ☐
| ☐
| | | |
1B | Yoni Cheifetz
2.
| ☐
| ☐
Ratification of appointment of EY as independent registered public accounting firm for the year ending December 31, 2021. | ☐
| ☐ | ☐ | ☐ | |
| | | | | | | | |
| 3. | | Approval of, on an advisory and non-binding basis, the compensation of our named executive officers (the "Say-on-Pay Proposal"). | | ☐ | ☐ | ☐ | |
| | | | | | | | |
| NOTE: Such other business as may properly come before the meeting or any adjournment or postponement thereof. | |
1C | Doron Inbar
| ☐
| ☐
| ☐
| | | |
| | | | | | | |
The Board of Directors recommends you vote FOR proposals 2 and 3.
| For
| Against
| Abstain
| | | |
2. | Ratification of appointment of EY as independent registered public accounting firm for the year ending December 31, 2019.
| ☐
| ☐
| ☐
| | | |
3. | Approval of an advisory and non-binding basis, the compensation of our named executive officers (the "Say-on-Pay Proposal"). | ☐
| ☐
| ☐
| | | |
| For address change/comments, mark here.
(see reverse for instructions)
| | | ☐ | | | |
| | | | | | | |
| Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. | | | | | | |
| | | | | |
| | | | | |
Signature [PLEASE SIGN WITHIN BOX] | | | | | |
