UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
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2021
Proxy Statement
Annual Meeting of Stockholders
In 2020, we received several awards recognizing our culture, workplace and commitments to responsible business Achieved designation by Modern Retail Awards for Most Responsible Retailer 100% rating for equality and inclusion for the 13th consecutive year Corporate Equality Index Member of the Dow Jones Sustainability World Index Recognized by Forbes as one of the World’s Best Employers Recognized as pioneers for action on climate change in CDP’s A List
Letter to Our Stockholders |
Dear Fellow Stockholders:
A year marked by numerous challenges, including a global pandemic and civil unrest, presented eBay with unparalleled opportunities to show up for our customers, employees and communities. We are proud that our shared values of transparency, responsibility and performance have supported eBay’s mission to empower people and create economic opportunity throughout 2020. As your Board of Directors, we are focused on creating value for you – our stockholders – in increasingly competitive markets and during these unsettled times. Drawing heavily on your input, we are working to realize the vision for a tech-led reimagination of eBay, a marketplace that can compete and win well into the future.
Renewed Focus and Reimagination
A transformational period since the start of 2020 saw the sale of StubHub and the agreement to transfer eBay Classifieds to Adevinta, and now eBay moves forward with renewed focus on our core Marketplaces business. During 2020 we also brought eBay alum and leading e-commerce executive Jamie Iannone back to the company as CEO and aligned with Jamie and his management team on our strategic direction toward a tech-led reimagination of eBay. The full eBay Board unanimously supported Jamie’s selection as CEO, and we believe Jamie is the ideal CEO to lead eBay’s next chapter of growth and success. We are also extremely optimistic that our Marketplaces strategies will position eBay for long-term growth and maximize value for you.
$4.1B | $9.2B | +13% | $5.6B | Vision |
Successful closing of the sale of StubHub for $4.1 billion in 2020 exhibiting swift execution to obtain pre-pandemic valuation | Agreed to the transfer of eBay Classifieds to Adevinta for $9.2 billion and watched the expected value of the combined companies appreciate | Increased the rate | Capital returned to stockholders in 2020, including $5.1 billion in stock buybacks and nearly $450 million in cash dividends | Click here to view Jamie Iannone’s letter to stockholders |
Valuing Stockholder Perspectives
The Board actively seeks stockholder input through numerous channels throughout the year as illustrated in the graphic below, and Board decisions are informed by investor perspectives. Feedback received from our investors influenced the development of the company’s current capital allocation objectives, while the company’s strategic vision became the focus of heightened discussions with stockholders throughout 2019 and 2020. Outcomes of these discussions included commitments to portfolio and operational reviews. The Board also takes your feedback into account by reviewing your votes at our annual meeting. For example, in 2019, we made it easier for stockholders to call special meetings after a significant minority of stockholders indicated they did not support our previous ownership requirement with their votes at the 2018 annual meeting.
Spring Summer Fall Winter Proxy season engagement to update stockholders and obtain feedback on corporate governance and other matters on the Annual Meeting agenda. Review proxy season feedback and votes from the Annual Meeting. Respond to stockholders as appropriate. Annual ESG engagement by a cross-functional management team to obtain stockholder input on corporate governance, sustainability, executive compensation, DE&I, risk management and compliance. Board reviews the outcomes of stockholder ESG engagement with management and considers proactive changes based on feedback.
“ The Board salutes our founder Pierre Omidyar for his vision, leadership and 25 years of service, as we remain focused on realizing his vision of empowering people and creating economic opportunity in the years ahead. – PAUL S. PRESSLER, CHAIR OF THE BOARD | ||
Director Succession
Pierre Omidyar Founder and Director Emeritus 100% Positive Feedback Member since 1995 Location United States
The Board is committed to rigorous self-evaluation and to refreshing its membership with skills and experience that align with our long-term strategic vision. At the 2020 Annual Meeting, long-serving directors, Board Chair Tom Tierney and Audit Committee Chair Fred Anderson, both retired from the Board. As a result of thoughtful succession planning, Paul Pressler assumed the role of Chair of the Board, Perry Traquina became Audit Committee Chair and Adriane Brown stepped into Paul’s former role as Chair of the Compensation Committee. In September 2020, our founder Pierre Omidyar and director Jesse Cohn left the Board upon the conclusion of our previously announced director search to add additional technology and financial expertise. We thank each of the directors who departed the Board in 2020 for their tremendous contributions.
Upon his retirement, we recognized Pierre with the honorary title of Founder and Director Emeritus. And with eBay’s 25-year milestone, we would be remiss not to take a moment to celebrate the remarkable journey from the sale of a broken laser pointer in 1995 to $100 billion in GMV in 2020. Through the dotcom bubble, its crash, a great recession, ever-changing dynamics in the e-commerce market and now a global pandemic, eBay remains one of the best ideas on the Internet and firmly rooted in the principles of the Power of All of Us, including a commitment to creating economic opportunity for all and the belief that people are basically good.
A broken laser pointer (Pierre’s first sale) Introduced “Buy It Now” Launched “The Power of All of Us” $50 Billion Annual GMV eBay for Charity Reaches $1 Billion 1995 1998 2000 2004 2004 2006 2010 2011 2019 2020 $100 billion GMV 19 million sellers eBay Goes Public 10 Million Sellers 1 Billion Items Sold Annually 100 Million Active Buyers eBay’s 25th Anniversary 185 million buyers 12,000+ employees
Strength from Diversity
We believe Board leadership is enhanced by the range of perspectives represented on the Board, and our recruiting priorities reflect a commitment to refreshment and diversity. The Board’s nominees include our CEO and 12 independent, highly qualified directors, who together have the diverse experience and expertise necessary to oversee the strategic and operational direction of the Company and management’s execution of our plans. Of these nominees, 12 have been added to the board since 2015. Average tenure is approximately five years, and four women have joined the Board in recent years. Each of our Board members is dedicated, engaged and committed to fostering an atmosphere of collegiality that invites robust discussion to support eBay’s overarching objective of creating stockholder value over the long term.
New Independent Directors Carol Hayles and Mohak Shroff add valuable financial and technology expertise 5 Women Directors 8 Technology Executives 3 Racially Diverse 3 Financial Experts
Sustainable Values
eBay exists to empower people and create economic opportunity. As Board members we, and the thousands of eBay employees, deeply share the sentiment that the company’s purpose links us to something bigger than any one of us. To ensure the achievement of our long-term business goals, we focus our sustainability initiatives on the matters that are material to our business and where we can be most impactful to our stakeholders. We have measurable and transparent goals to evaluate our progress and to hold ourselves accountable to important milestones – such as 100% renewable energy by 2025, maintaining gender pay equity, and raising significant amounts for philanthropic causes. In 2021, with the support of the Corporate Governance and Nominating Committee, which oversees our Impact programs, the company formed a senior management ESG Council designed to further link a sustainability mindset with our strategic planning and business operations.
eBay Impact Report Diversity, Equity & Inclusion Report
Engaging Virtually
This year will be our second virtual annual meeting. This format offers the key features of an in-person meeting without putting anyone at risk of COVID-19. Although this decision was driven by the public health crisis, we hope it will also improve your ability to attend and participate while saving stockholders the time and expense of travel. In the virtual meeting, participants will join via a website where they can listen to the speakers, view any presentations, submit questions and comments, hear the company’s responses, and vote their shares electronically.
Thank you for your investment in eBay. We are proud to represent stockholder interests in this great company and look forward to meeting with you at the 2021 Annual Meeting of Stockholders.
Tuesday June 15, 2021 8:00 a.m. (PST) Link To Virtual Meeting Live Q &A with our CEO and Board Chair
Sincerely, Your Board of Directors Anthony J. Bates Adriane M. Brown Diana Farrell Logan D. Green Bonnie S. Hammer E. Carol Hayles Jamie J. Iannone Kathleen C. Mitic Matthew J. Murphy Paul S. Pressler Mohak Shroff Robert H. Swan Perry M. Traquina
eBay exists to empower people and create economic opportunity.
$100B | $10.3B | 185M | 60% | 1.7B |
Gross Merchandise Volume (GMV)* | Revenue* | Global Active Buyers** | Revenue from International Operations* | Approximate number of live listings** |
$100M+ Response to COVID-19 For details, please see page 29. Employees Communities Customers
Our purpose links us to something bigger than ourselves. The good that emerges is impact—and that’s what we deliver, every day. | Economic Opportunity Champions of inclusive commerce, eBay Seller School assists sellers in transforming their business, and we help small businesses grow globally, including through eBay’s Retail Revival and Up and Running programs. | eBay for Charity eBay hosts one of world’s largest and most active fundraising platforms, partnering with charity organizations to help them reach their fundraising goals. | ||||||
eBay Foundation eBay Foundation applies its resources and the eBay platform, along with engaged eBay employees, to help create a more equitable global economy. | Sustainable Commerce Circular commerce has been a part of our eBay brand since we were founded 25 years ago. We continually strive to integrate best practices at our facilities to reduce our environmental footprint. | Trusted Marketplace eBay created a trusted, transparent marketplace that’s based on the strong ethical values we follow as a business. | ||||||
Goals: We are continuously working to quantify, track and manage our environmental footprint. Renewable Energy Source 100 percent renewable energy in our electricity supply by 2025 for eBay-controlled data centers and offices. Carbon Emissions Achieve 50% absolute reduction in Scope 1 and 2 GHG emissions by 2025 and 75% reduction by 2030 from our 2016 baseline.
* GMV, Revenue, and Revenue from International Operations represent FY 2020. ** Global Active Buyers and Approximate number of live listings as of the end of Q4 2020. |
Notice of Annual Meeting of Stockholders
To our Stockholders:
NOTICE IS HEREBY GIVEN that theThe 2021 Annual Meeting of Stockholders of eBay Inc., a Delaware corporation, will be heldconducted virtually on Thursday, May 18, 2017 at 8:00 a.m. Pacific Time at 2025 Hamilton Avenue, San Jose, California 95125.the Internet. There will be no in-person meeting.
Date and Time Tuesday, June 15, 2021 8:00 a.m. Pacific Time | Web Address www.virtualshareholdermeeting.com/ EBAY2021 | Record Date You are eligible to vote if you were a |
Proposals Requiring Your Vote
Description | Board’s Voting Recommendation | For Further Details | |||
| Election of |
| FOR each director nominee | Page 3 | |
2 | Ratification of appointment of independent auditors |
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| FOR | Page 44 | ||
4, 5 | Stockholder proposals, if properly presented |
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Stockholders as of the record date will also transact on such other business as may properly come before the Annual Meeting or any adjournment or postponement of the Annual Meeting. The items of business are described more fully in the accompanying proxy statement.Proxy Statement. We will be providing access to our proxy materials over the Internetinternet under the Securities and Exchange Commission’sCommission (“SEC”) “notice and access” rules. As a result, on or about April 3, 2017,26, 2021, we are mailing to many of our stockholders a notice instead of a paper copy of the proxy statementProxy Statement and our 20162020 Annual Report.
Your vote is important. Regardless of whether you plan to participate in the Annual Meeting, we hope you will vote as soon as possible. You may cast your vote over the Internet, by telephone, by mail or during the Annual Meeting.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE STOCKHOLDER
MEETING TO BE HELD ON MAY 18, 2017: THE PROXY STATEMENT AND THE ANNUAL REPORT ARE AVAILABLE AT
https://investors.ebayinc.com/annuals.cfm
This proxy statement will also be available in interactive form at https://iiwisdom.com/ebay-2017.
By Order of the Board of Directors
Marie Oh Huber
Secretary
Table of Contents
Proxy Statement Summary
This summary highlights information contained elsewhere in this Proxy Statement. This summary does not contain all of the information that you should consider, and you should read the entire Proxy Statement carefully before voting.
Meeting Information
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How to Vote
YOUR VOTE IS IMPORTANT. You are eligible to vote if you were a stockholder at the close of business on March 20, 2017 (the “Record Date”). Even if you plan to attend the meeting, please vote as soon as possible using any of the following methods. In all cases, you should have your notice, or if you requested to receive printed proxy materials, your proxy card or voting instruction form on hand and follow the instructions:
Phone | ||||
You can vote your shares online at www.proxyvote.com | You can vote your shares by calling +1 (800) 690-6903. | Date and |
By Order of the Board of Directors
Marie Oh Huber
Secretary
Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting to be Held on June 15, 2021: the Proxy Statement and the Annual Report are Available at Proposals Requiring Yourhttps://investors.ebayinc.com/financial-information/annual-reports/default.aspx
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Table of Contents
New in this Special Meeting Threshold page 19 Board Sustainability Oversight page 25 Response to COVID-19 page 29 Management ESG Council page 30 ESG Performance Goals page 46 | N E W Adopted or modified in recent years in response to stockholder feedback or as part of ongoing assessment of governance best practices. Forward-Looking Statements. Certain statements in this proxy statement, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements may appear throughout this proxy statement. These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward- looking statements. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events, or otherwise. Information on our website should not be deemed incorporated into or part of this proxy statement. |
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Proposal 1 | Election of Directors |
At the Annual Meeting, 13 directors will be elected to serve for a one-year term.
The nominees are currently members of the Board, and each of the nominees has been elected previously by stockholders, except for E. Carol Hayles and Mohak Shroff, who joined the Board on September 10, 2020. Each of the nominees has consented to serving as a nominee and being named as a nominee in this Proxy Statement and to serving as a director if elected. Twelve of 13 of the nominees are currently independent directors under the listing standards of The Nasdaq Stock Market and our Corporate Governance Guidelines. If elected at the Annual Meeting, each of the nominees will serve a one-year term until our 2022 Annual Meeting and will hold office until his or her successor is elected and qualified, or until his or her earlier death, resignation, retirement, or removal.
Our bylaws provide that in the event of an uncontested election, each director shall be elected by the affirmative vote of a majority of the votes cast with respect to such director—i.e., the number of shares voted “FOR” a director nominee must exceed the number of votes cast “AGAINST” that nominee. The Company has a resignation policy that would apply to any nominee who does not receive the vote required for election. For more details, please see Corporate Governance – Governance Policies and Practices – Majority Vote Standard for Election of Directors and Director Resignation Policy for Uncontested Elections.
The Board recommends a vote FOReach of the director nominees. |
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Board of Directors / 2021 Board Nominees
Summary Information
Other | |||||||
Committees | Public | ||||||
Company | |||||||
Name and Principal Occupation | Age | Director Since | AC | CC | RC | CGNC | Boards |
Anthony J. Bates INDEPENDENT Chief Executive Officer, Genesys | 54 | 2015 | 1 | ||||
Adriane M. Brown INDEPENDENT Managing Partner, Flying Fish Ventures | 62 | 2017 | o | 2 | |||
Diana Farrell INDEPENDENT Former President and Founding CEO, JPMorgan Chase Institute | 56 | 2017 | 0 | ||||
Logan D. Green INDEPENDENT Chief Executive Officer and Co-Founder, Lyft | 37 | 2016 | 1 | ||||
Bonnie S. Hammer INDEPENDENT Vice Chairman, NBCUniversal | 70 | 2015 | 1 | ||||
E. Carol Hayles INDEPENDENT Former Chief Financial Officer, CIT Group, Inc. | 60 | 2020 | 2 | ||||
Jamie Iannone President and Chief Executive Officer, eBay Inc. | 48 | 2020 | 0 | ||||
Kathleen C. Mitic INDEPENDENT Co-Chief Executive Officer and Co-Founder, SomethingElse | 51 | 2011 | o | 2 | |||
Matthew J. Murphy INDEPENDENT President and Chief Executive Officer, Marvell Technology | 48 | 2019 | 1 | ||||
Paul S. Pressler INDEPENDENT Chair of eBay Board; Operating Advisor, Clayton, Dubilier & Rice | 64 | 2015 | 0 | ||||
Mohak Shroff INDEPENDENT Head of Engineering, LinkedIn | 42 | 2020 | 0 | ||||
Robert H. Swan INDEPENDENT Former Chief Executive Officer, Intel Corporation | 60 | 2015 | o | 0 | |||
Perry M. Traquina INDEPENDENT Former Chairman and CEO, Wellington Management Company | 65 | 2015 | o | 2 |
AC | Audit Committee | CC | Compensation CommitteeRC | Risk Committee | CGNC | Corporate Governance and Nominating Committee | |
o | Committee Chair | Member |
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2021 Board Nominees / Board of Directors
Nomination Process
Our Corporate Governance and Nominating Committee and Board have evaluated each of the director nominees recommended by our Board against the factors and principles eBay uses to select director nominees. Based on this evaluation, our Corporate Governance and Nominating Committee and the Board have concluded that it is in the best interests of eBay and its stockholders for each of the proposed nominees to serve as a director of eBay. The Board believes that all of these nominees have a strong track record of being responsible stewards of stockholders’ interests and bring extraordinarily valuable insight, perspective, and expertise to the Board. Additional reasons that the Board recommends supporting the election of the director nominees include:
· | All of the nominees have high-level managerial experience in relatively complex organizations. |
· | Each nominee has highly relevant professional experience in the management, technology, and innovation fields. |
· | The Board believes each nominee is an individual of high character and integrity and is able to contribute to strong board dynamics. |
· | Each of these nominees has experience and expertise that complement the skill sets of the other nominees. |
· | Each nominee is highly engaged and able to commit the time and resources needed to provide active oversight of eBay and its management. During 2020, our Board held ten meetings, and each Board member attended at least 75% of the aggregate number of meetings of the Board and the committees on which he or she served. None of the nominees serves on the boards of more than two other public companies, and each of the nominees who is currently an executive officer of a publicly traded company does not serve on any other boards beyond eBay and the Board of his or her own company. |
In addition to these attributes, in each individual’s biography set forth below, we have highlighted specific experience, qualifications, and skills that led the Board to conclude that each individual should serve as a director of eBay. For additional information regarding the Corporate Governance and Nominating Committee’s approach to Board refreshment and nominations, please see Corporate Governance – Board Composition and Independence – Director Nomination Process.
Diversity
Our director nominees exhibit the following diverse mix of characteristics:
Tenure 1 4 Age 1 4 Gender and Ethnicity 5 Women >8 years <4 years >65 years <50 years 8 4-8 years 5 Years Average 8 50-65 years 46% Diversity 3 Ethnic Minorities Skills and Experience Technology Industry Management 8/13 11/13 E-Commerce/Retail Entrepreneurship 5/13 2/13 Public Policy Strategy 1/13 10/13 Transactions/M&A Product, Marketing and Media 2/13 5/13 Leadership Investment/Finance
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Board of Directors / 2021 Board Nominees
Anthony J. Bates Age: 54 Director Since: 2015 Committees: · Compensation Committee · Risk Committee | Other Public Company Boards: · VMware, Inc. (since 2016) | |
Experience
Mr. Bates is CEO of Genesys, which provides customer-experience and call-center technology. He was Vice Chairman of the board of Social Capital Hedosophia Holdings Corp. (“Social Capital,” a special purpose acquisition company) from 2017 to 2019. From May 2017 through June 2018, Mr. Bates held the position of Chief Executive Officer of Growth at Social Capital. He also has been a member of the board of directors of VMware, Inc. since 2016, where he is chair of the Mergers & Acquisitions committee. He was formerly a member of the board of directors of GoPro, Inc.
Mr. Bates was President of GoPro, a technology company that manufactures action cameras, from 2014 to 2016, and helped with the initial public offering of the company. Before joining GoPro, Mr. Bates was the Executive Vice President of Microsoft Corp.’s Business Development and Evangelism group, responsible for the company’s relationships with key original equipment manufacturers (OEMs), strategic innovation partners, independent software vendors and developers. Mr. Bates also led Microsoft’s corporate strategy team.
Mr. Bates was also the President of Microsoft’s Skype Division and the Chief Executive Officer of Skype, Inc. prior to its acquisition in October of 2011. Preceding Skype, Mr. Bates held senior positions with both Cisco Systems, Inc. and MCI Internet. Mr. Bates previously served as a member of the boards of YouTube, Inc. and LoveFilm.
Director Qualifications
· | Technology and Retail Industry Experience: Executive leadership in the technology industry, including the management of worldwide operations, sales, service and support areas. Technical skills, as evidenced by his 10 patents in network innovations and his 12 requests for comments published with the Internet Engineering Task Force. Retail industry experience from his prior employment at GoPro, a consumer products company, YouTube, and LoveFilm, a provider of DVD-by-mail and streaming video on demand. |
· | Management, Leadership and Strategy Experience: Current serves on board of VMware, Inc.; formerly on board of Social Capital Hedosophia Holdings Corp.; and formerly President and a board member of GoPro. Former Executive Vice President, Business Development and Evangelism at Microsoft Corporation, former Chief Executive Officer of Skype Inc. and former Senior Vice President of Cisco Systems, Inc. |
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2021 Board Nominees / Board of Directors
Adriane M. Brown Age: 62 Director Since: 2017 Committees: · Compensation Committee (Chair) · Risk Committee | Other Public Company Boards: · Axon Enterprise, Inc. (since 2020) · American Airlines Group, Inc. (since 2021) | |
Experience
Ms. Brown joined Flying Fish Ventures, as a Venture Partner in November 2018 and became a Managing Partner of the venture capital firm in February 2021. Prior to that, Ms. Brown served as President and Chief Operating Officer for Intellectual Ventures (“IV”), an invention and investment company that commercializes inventions, from January 2010 through July 2017, and served as a Senior Advisor until December 2018. Before joining IV, Ms. Brown served as President and Chief Executive Officer of Honeywell Transportation Systems. Over the course of 10 years at Honeywell, she held leadership positions serving the aerospace and automotive markets globally. Prior to Honeywell, Ms. Brown spent 19 years at Corning, Inc., ultimately serving as Vice President and General Manager, Environmental Products Division, having started her career there as a shift supervisor.
Ms. Brown serves on the boards of directors of American Airlines Group, Inc., Axon Enterprise, Inc., Washington Research Foundation, and the Pacific Science Center. Ms. Brown previously served on the boards of directors of Allergan Plc and Raytheon Company until 2020.
Ms. Brown holds a Doctorate of Humane Letters and a bachelor’s degree in environmental health from Old Dominion University, and is a winner of its Distinguished Alumni Award. She also holds a master’s degree in management from the Massachusetts Institute of Technology where she was a Sloan Fellow.
Director Qualifications
· | Leadership and Strategy Experience: Leadership of global technology and commercial businesses at Honeywell Transportation, Corning, Allergan and Raytheon. Experience driving business strategy, growth and development, innovation and R&D, manufacturing and sales, and customer service and expansion. |
· | Investment/Finance, Management and Technology Industry Experience: President and Chief Operating Officer for IV from January 2010 to July 2017. During her tenure at IV, the company delivered more than $3 billion in revenue, invented technology enabling 14 companies and joint ventures, acquired 50 customers and established Global Good and Research, a global health invention and innovation project. |
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Board of Directors / 2021 Board Nominees
Diana Farrell Age: 56 Director Since: 2017 Committees: · Corporate Governance and Nominating Committee · Risk Committee | Other Public Company Boards: · None | |
Experience
Ms. Farrell is the retired Founding President and Chief Executive Officer of the JPMorgan Chase Institute. From 2014 to 2020, she was the President and Chief Executive Officer of the institute. Previously, Ms. Farrell was a Senior Partner at McKinsey & Company where she was the Global Head of the McKinsey Center for Government and the McKinsey Global Institute.
Ms. Farrell served in the White House as Deputy Director of the National Economic Council and Deputy Assistant to the President on Economic Policy for 2009-2010. During her tenure, she led interagency processes and stakeholder management on a broad portfolio of economic and legislative initiatives. Ms. Farrell coordinated policy development and stakeholder engagement for economic recovery, innovation and competition, and she led financial policy initiatives including the passage of major legislation. She also served as a member of the President’s Auto Recovery Task Force.
Ms. Farrell serves on the boards of directors of The Urban Institute and the National Bureau of Economic Research. In addition, Ms. Farrell is a Trustee of the Trilateral Commission and a Trustee Emeritus of Wesleyan University, and she serves as Co-Chair of the World Economic Forum’s Council on the Future of Fiscal and Monetary Policy. Ms. Farrell is a member of the Council on Foreign Relations, the Bretton Woods Committee, the National Academies of Science’s Committee on National Statistics, the Aspen Economic Strategy Group and the Economic Club of New York.
Ms. Farrell holds an M.B.A. from Harvard Business School and has a B.A. from Wesleyan University, where she was awarded a Distinguished Alumna award.
Director Qualifications
· | Policy Experience: Previously global head of the McKinsey Global Institute and McKinsey Center for Government, a leading economic advisor to the President of the United States. Member of several economic and international policy groups and a trustee leading economic think tanks. |
· | Financial Expertise: Former Chief Executive Officer and founding President of the JPMorgan Chase Institute. Led research on global capital markets at McKinsey Global Institute, and interagency process on financial policy as Deputy Director of the National Economic Council. |
· | Leadership and Strategy Experience: Former Senior Partner at McKinsey & Company and Deputy Director of the National Economic Council. Service on non-profit boards and leadership of economic and policy organizations. |
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2021 Board Nominees / Board of Directors
Logan D. Green Age: 37 Director Since: 2016 Committees: · Compensation Committee | Other Public Company Boards: · Lyft, Inc. (since 2019) | |
Experience
Mr. Green has served as the Chief Executive Officer and Co-Founder of Lyft, Inc., a rideshare company, since 2012, where he is also a member of the Board of Directors. Lyft grew out of Zimride, a rideshare company previously co-founded by Mr. Green in 2007. Zimride was acquired by Enterprise Rent-A-Car. Mr. Green received his B.A. in Business Economics from the University of California, Santa Barbara.
Director Qualifications
· | Technology and E-Commerce Industry, Leadership, Management, Strategy and Entrepreneurship Experience: CEO and Co-Founder of Lyft, a publicly traded, on-demand transportation company. |
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Board of Directors / 2021 Board Nominees
Bonnie S. Hammer Age: 70 Director Since: 2015 Committees: · Corporate Governance and Nominating Committee | Other Public Company Boards: · IAC/InteractiveCorp (since 2014) | |
Experience
Ms. Hammer is Vice Chairman, NBCUniversal. Previously, Ms. Hammer served as Chairman, NBCUniversal Content Studios, where she oversaw Universal Television, Universal Content Productions and NBCUniversal International Studios. Prior to her tenure as Chairman of Content Studios, Ms. Hammer was Chairman, Direct-to-Consumer and Digital Enterprises, where she built the brand identity and greenlit the initial content slate for Peacock, NBCUniversal’s streaming service. Prior to this role, Ms. Hammer served as Chairman of NBCUniversal Cable Entertainment from February 2013 to January 2019. In this capacity, Ms. Hammer had executive oversight over a number of leading cable brands (the USA, Syfy, E! Entertainment, Bravo, Oxygen and Universal Kids networks), as well as Universal Cable Productions, which created original scripted content for cable, broadcast and streaming platforms, and Wilshire Studios, which produced original reality programming.
Prior to her tenure as Chairman of NBCUniversal Cable Entertainment, Ms. Hammer served as Chairman of NBCUniversal Cable Entertainment and Cable Studios from November 2010. In this capacity, Ms. Hammer had executive oversight over well-known cable brands (the USA, Syfy, E! Entertainment, Chiller, Cloo and Universal HD networks), as well as Universal Cable Productions and Wilshire Studios. Prior to joining NBCUniversal in May 2004, Ms. Hammer served as President of Syfy from 2001 to 2004 and held other senior executive positions at Syfy and USA Network from 1989 to 2000. Earlier in her career, she was an original programming executive at Lifetime Television Network from 1987 to 1989.
Ms. Hammer also serves on the board of directors of IAC/InteractiveCorp. In addition to her for-profit affiliations, Ms. Hammer currently sits on the Board of Governors for the Motion Picture & Television Fund Foundation and serves on the strategic planning committee for Boston University’s College of Communication.
Ms. Hammer holds a bachelor’s degree in communications and a master’s degree in media and new technology from Boston University. In 2017, Boston University awarded her an Honorary Doctorate of Humane Letters.
Director Qualifications
· | Product, Marketing and Media Experience: Industry leader in media for over 40 years, with expertise in network programming, production, marketing, and multiplatform branding. |
· | Leadership, Strategy and Management Experience: Vice Chairman, NBCUniversal and previous executive roles including oversight of NBCUniversal’s innovative streaming service, prominent cable brands and production studios. |
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2021 Board Nominees / Board of Directors
E. Carol Hayles Age: 60 Director Since: 2020 Committees: · Audit Committee | Other Public Company Boards: · Blucora, Inc. (since 2018) · Webster Financial Corporation (since 2018) | |
Experience
Ms. Hayles was Executive Vice President and Chief Financial Officer of CIT Group Inc., a financial services company from November 2015 to May 2017, during which time she was responsible for overseeing all financial operations. She served as Controller and Principal Accounting Officer of CIT Group Inc. from July 2010 to November 2015, where she was responsible for managing the financial accounting and reporting functions, including SEC and regulatory reporting.
Prior to CIT, Ms. Hayles spent 24 years in various finance roles at Citigroup, Inc., most recently as Deputy Controller. She began her career at PricewaterhouseCoopers LLP in Toronto, Canada. She was a Canadian Chartered Accountant from 1985 to 2009, and she received her BBA from York University in Toronto.
Director Qualifications
· | Investment/Finance, Management, Transactions/M&A and Leadership Experience: Chief Financial Officer of CIT Group and executive role with Citigroup. |
www.ebayinc.com 11
Board of Directors / 2021 Board Nominees
Jamie Iannone Age: 48 Director Since: 2020 Committees: · None | Other Public Company Boards: · None | |
Experience
Mr. Iannone has been President and Chief Executive Officer of eBay since April 2020.
Earlier in 2020, Mr. Iannone served as Chief Operating Officer of Walmart eCommerce, where he also was responsible for Store No. 8, Walmart’s incubation hub. Since 2014, Mr. Iannone held leadership roles at Walmart Inc. including CEO of SamsClub.com and Executive Vice President of membership and technology, Sam’s Club, a $57 billion business. In those roles, Mr. Iannone grew the SamsClub.com business and Sam’s Club’s membership base.
Before Walmart Inc., Mr. Iannone was Executive Vice President of Digital Products at Barnes & Noble, Inc., where he was responsible for all NOOK devices, software, accessories and retail integration and experiences; books and digital content; and third-party partnerships.
Mr. Iannone held various roles at eBay from 2001 to 2009, including leading Product Marketing, Search, and Buyer Experience.
He previously worked at Epinions.com and Booz Allen Hamilton. Mr. Iannone also served on the Board of Directors of The
Children’s Place.
He earned a Bachelor of Science in operations research, engineering and management systems from Princeton University and a Master of Business Administration from the Stanford Graduate School of Business.
Director Qualifications
· | Technology Industry, Management, Strategy and Leadership Experience: Executive with three large, innovative global technology companies: eBay, Walmart, and Barnes and Noble. Board experience at The Children’s Place. |
· | E-Commerce and Retail Industry Experience: Leader with an array of online and offline retail businesses, including eBay, SamsClub.com, Sam’s Club, Barnes and Noble, The Children’s Place, and Epinions.com. |
· | Product and Media Experience: Delivered innovative product experiences in executive roles at eBay, SamsClub.com and Sam’s Club, and Barnes and Noble. Led media partnerships, books, digital content, and NOOK software at Barnes and Noble. |
12 ebay / 2021 Proxy Statement
2021 Board Nominees / Board of Directors
Kathleen C. Mitic Age: 51 Director Since: 2011 Committees: · Compensation Committee · Corporate Governance and Nominating Committee (Chair) | Other Public Company Boards: · RH (f/k/a Restoration Hardware Holdings, Inc.) (since 2013) · TCV Acquisition Corp. (since 2021) | |
Experience
Ms. Mitic is Co-CEO and Co-Founder of SomethingElse, a direct-to-consumer beverage company. From 2012 to 2017, Ms. Mitic was the Chief Executive Officer and Co-Founder of Sitch, a startup building mobile consumer products.
From 2010 to 2012, Ms. Mitic served as Director of Platform and Mobile Marketing at Facebook, where she was responsible for developing and growing global developer and partner products. Prior to joining Facebook, Ms. Mitic served as Senior Vice President, Product Marketing at Palm, expanding the company product lines and international footprint through its acquisition by Hewlett-Packard in 2010.
Prior to Palm, Ms. Mitic spent 15 years in leadership positions at various consumer technology companies. These experiences include at NetDynamics (acquired by Sun Microsystems) where she launched the industry’s first application server, at Four11 where she built the email service RocketMail (now Yahoo! Mail) and at Yahoo! where she served as Vice President and General Manager.
Ms. Mitic currently serves on the boards of directors of RH (formerly known as Restoration Hardware Holdings, Inc.) and TCV Acquisition Corp. She also serves on the board of directors of Headspace, a health and wellness technology company, DVx Ventures, and the non-profit organization Lean In.
Ms. Mitic received her B.A. from Stanford University and her M.B.A. from Harvard Business School.
Director Qualifications
· | Product, Marketing and Media Experience: Expertise in global products, marketing and media through work leading Global Platform and Mobile Marketing at Facebook, Inc. and the Global Products Marketing group at Palm, Inc., and as Vice President and General Manager at Yahoo! Inc. |
· | Technology Industry, Entrepreneurship and Leadership Experience: Consumer-facing executive positions in technology industry (listed above) for over twenty years. Entrepreneurial experience building and operating technology companies as Co-Founder and Co-Chief Executive Officer of Sitch, Inc. and former Vice President and General Manager of Yahoo! Inc. |
www.ebayinc.com 13
Board of Directors / 2021 Board Nominees
Matthew J. Murphy Age: 48 Director Since: 2019 Committees: · Audit Committee · Risk Committee | Other Public Company Boards: · Marvell Technology Group Ltd. (since 2016) | |
Experience
Mr. Murphy is President and Chief Executive Officer of Marvell Technology Group Ltd. (“Marvell”), a semiconductor company. He has led Marvell since joining in July 2016 and also serves as a member of Marvell’s board of directors. In his role as CEO, Mr. Murphy is responsible for leading new technology development, directing ongoing operations and driving Marvell’s growth strategy.
Prior to joining Marvell, Mr. Murphy worked for Maxim Integrated Products, Inc., a company that designs, manufactures and sells analog and mixed-signal integrated circuits. He advanced there through a series of business leadership roles over two decades. Most recently, he served as Executive Vice President of Business Units and Sales & Marketing, overseeing all product development and go-to-market activities. Prior to that, he served as the Senior Vice President of the Communications and Automotive Solutions Group and Vice President of Worldwide Sales and Marketing.
Mr. Murphy is a recipient of a Silicon Valley Business Journal 2019 C-Suite award for CEO of a Large Public Company, and was a “40 Under 40” honoree in 2011. In 2018, Institutional Investor named him All-America Executive Team Best CEO in the semiconductor category. He also served as the Chairman of the Semiconductor Industry Association (SIA) in 2018.
Mr. Murphy earned a B.A. from Franklin & Marshall College, and is also a graduate of the Stanford Executive Program. He serves on the boards of directors of the SIA and Global Semiconductor Alliance.
Director Qualifications
· | Technology Industry, Product, Leadership, Management and Strategy Experience: Chief Executive Officer of Marvell, management and executive positions with Maxim Integrated Products, Inc., and board membership at Global Semiconductor Alliance and Semiconductor Industry Association. |
14 ebay / 2021 Proxy Statement
2021 Board Nominees / Board of Directors
Paul S. Pressler Chair of the Board Age: 64 Director Since: 2015 Committees: · Compensation Committee · Corporate Governance and Nominating Committee | Other Public Company Boards: · None | |
Experience
Mr. Pressler has been an Operating Advisor of Clayton, Dubilier & Rice, LLC, a private equity investment firm, since 2020. He was previously a partner of Clayton, Dubilier & Rice from 2009 to 2020. Previously, Mr. Pressler was Chairman of David’s Bridal, Inc. from 2012 to 2018, AssuraMed Holding, Inc. from 2010 to 2013 and SiteOne Landscape Supply, Inc. from to 2013 to 2017. Mr. Pressler served as President and Chief Executive Officer of The Gap, Inc. for five years, from 2002 to 2007. Before that, he spent 15 years in senior leadership roles with The Walt Disney Company, including Chairman of the global theme park and resorts division, President of Disneyland, and President of The Disney Stores.
Mr. Pressler currently serves on the board of directors of Wilsonart, Inc. and MOD Super Fast Pizza, LLC.
Mr. Pressler received his B.S. from the State University of New York at Oneonta.
Director Qualifications
· | Investment/Finance Experience and Transactions/M&A Expertise: Operating Advisor and former partner at private equity firm Clayton, Dubilier & Rice since 2009. |
· | Leadership, Management, Retail Industry and Strategy Experience: Formerly Chairman of David’s Bridal, Chairman of SiteOne Landscape Supply, Chairman of AssuraMed, President and Chief Executive Officer of The Gap, and 15 years in senior leadership at The Walt Disney Company, including President of The Disney Stores. |
www.ebayinc.com 15
Board of Directors / 2021 Board Nominees
Mohak Shroff Age: 42 Director Since: 2020 Committees: · None | Other Public Company Boards: · None | |
Experience
Mr. Shroff is Sr. Vice President and Head of Engineering at LinkedIn. His teams are responsible for building, scaling, and protecting LinkedIn. In his time at LinkedIn, he has played several key roles, from serving as head of product engineering, to working with the infrastructure and monetization teams, to leading Project Inversion.
Prior to joining LinkedIn in 2008, Mr. Shroff served as key technical leader on the Ariba Supplier Network engineering team. Mr. Shroff holds a BS in computer science from University of Texas at Austin.
Director Qualifications
· | Technology Industry, Product, Management, Strategy and Leadership Experience: Executive and technology leader with LinkedIn. |
16 ebay / 2021 Proxy Statement
2021 Board Nominees / Board of Directors
Robert H. Swan Age: 60 Director Since: 2015 Committees: · Audit Committee · Risk Committee (Chair) | Other Public Company Boards: · None | |
Experience
Mr. Swan is the former CEO of Intel Corporation (“Intel”), a multinational technology company. He first served as Intel’s Executive Vice President and Chief Financial Officer from 2016 and added interim CEO to his duties in June 2018 to January 2019, then served as a director and CEO from January 2019 to February 2021. Mr. Swan served as an Operating Partner of General Atlantic, a leading global growth equity firm. From 2006 to 2015, Mr. Swan served as Senior Vice President, Finance and Chief Financial Officer at eBay, where he oversaw all aspects of the Company’s finance function, including controllership, financial planning and analysis, tax, treasury, audit, mergers and acquisitions, and investor relations. Prior to eBay, Mr. Swan served as Chief Financial Officer at Electronic Data Systems Corp., TRW Inc., and Webvan Group, Inc. He also served as Chief Operating Officer and CEO of Webvan Group. He previously served on the board of directors of Applied Materials, Inc. from 2009 to 2016, and AppDynamics from 2016 to 2017.
Mr. Swan began his career at General Electric, where he spent 15 years in numerous senior finance roles, including divisional Chief Financial Officer for GE Transportation Systems, GE Healthcare Europe, and GE Lighting.
Mr. Swan received his B.S. from the University at Buffalo and his M.B.A. from the State University of New York at Binghamton.
Director Qualifications
· | Investment/Finance and Transactions/M&A Expertise: Former Chief Financial Officer of Intel, eBay and Electronic Data Systems. |
· | Leadership, Management, Strategy Experience and Technology and E-Commerce/Retail Industry Experience: Former Chief Executive Officer of Intel and executive roles at eBay, Intel, and Electronic Data Systems. |
www.ebayinc.com 17
Board of Directors / 2021 Board Nominees
Perry M. Traquina Age: 65 Director Since: 2015 Committees: · Audit Committee (Chair) · Corporate Governance and Nominating Committee | Other Public Company Boards: · Morgan Stanley (since 2015) · The Allstate Corporation (since 2016) | |
Experience
Mr. Traquina is the former Chairman, Chief Executive Officer, and Managing Partner of Wellington Management Company LLP, a global investment management firm. Mr. Traquina held this position for a decade until his retirement from the firm in 2014. During his 34-year career at Wellington, he was an investor for 17 years and a member of the management team for the other half of his time at the firm.
Mr. Traquina received his B.A. from Brandeis University and his M.B.A. from Harvard University.
Director Qualifications
· | Investment/Finance Experience: More than 34 years of leadership at Wellington Management Company LLP. |
· | Leadership and Management Experience: Former Chairman, CEO, and Managing Partner of Wellington Management Company LLP, and current service on boards of directors of Morgan Stanley and The Allstate Corporation. |
18 ebay / 2021 Proxy Statement
eBay is committed to transparency and accountability, as demonstrated by the following governance features:
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Proxy Statement Summaryrefreshment
Corporate Governance
The Board of Directors (the “Board”) of eBay Inc. (“eBay” or the “Company”) is responsible for (1) providing advice and oversight of the strategic and operational direction of the Company; and (2) overseeing the Company’s executive management, each to ensure the Company operates in ways that support the long-term interest of our stockholders and the stakeholders we serve. The following is a list of governance provisions that demonstrate eBay’s commitment to transparency and accountability:
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Leadership Structure
Separate Board Chair and CEO roles
| Board Oversight and Engagement
ü Oversight of sustainability ü Strong stockholder engagement practices |
Clawback policy
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2017Stockholder Rights
Our Board is committed to good corporate governance and believes in maintaining policies and practices that serve the interests of all stockholders, including governance provisions that protect and empower stockholders.
ü Special Meetings – Stockholders representing 20% or more of eBay common stock can call a special meeting of stockholders. N E W
ü Annual Election of Board of Directors – All directors are elected annually by the stockholders, and stockholders can remove directors with or without cause.
ü Majority Voting for Election of Board of Directors – We have adopted a majority voting standard for the election of directors in uncontested elections.
ü Proxy Access for Director NomineesNominations – We have adopted a proxy access bylaw provision that allows an eligible stockholder or group of stockholders to nominate candidates for election to the Board that are included in our proxy statement and ballot.
ü Majority Voting for Charter and Bylaw Amendments – Our charter and bylaw provisions do not have supermajority voting provisions. Stockholders can approve binding charter and bylaw amendments with a majority vote.
ü Independent Board Leadership – We have separated the roles of Chair of the Board and CEO, and the Chair of the Board is an independent director. When our Board Chair is not independent, we require a Lead Independent Director with robust responsibilities.
ü Stockholder Engagement – Stockholders can communicate directly with the Board and/or individual directors. In addition, management and members of the Board regularly engage with stockholders to solicit their views on important issues such as corporate governance and executive compensation.
N E W Adopted or modified in recent years in response to stockholder feedback or as part of ongoing assessment of governance best practice.
Name and Primary Occupation | Age | Director since | Independent | Committee Memberships* | Other Public Boards | |||||
Fred D. Anderson Jr. Co-Founder, Elevation Partners Co-Founder, NextEquity Partners | 72 | 2003 | YES | Audit (Chair) | 1 | |||||
Edward W. Barnholt Former President and CEO, Agilent Technologies, Inc. | 73 | 2005 | YES | Compensation (Chair) | 2 | |||||
Anthony J. Bates Former President, GoPro, Inc. | 49 | 2015 | YES | Compensation | 2 | |||||
Logan D. Green Co-Founder and CEO, Lyft Inc. | 33 | 2016 | YES | Corporate Governance | None | |||||
Bonnie S. Hammer Chairman, NBCUniversal Cable Entertainment | 66 | 2015 | YES | Compensation | 1 | |||||
Kathleen C. Mitic Founder and CEO, Sitch, Inc. | 47 | 2011 | YES | Compensation Governance (Chair) | 1 | |||||
Pierre M. Omidyar Founder, eBay | 49 | 1996 | YES | None | 1 | |||||
Paul S. Pressler Partner, Clayton, Dubilier & Rice, LLC Interim CEO and Chairman, David’s Bridal | 60 | 2015 | YES | Audit Governance | 1 | |||||
Robert H. Swan Chief Financial Officer, Intel Corporation | 56 | 2015 | NO | None | None | |||||
Thomas J. Tierney Chairman, eBay Inc. Chairman and Co-Founder, The Bridgespan Group | 63 | 2003 | YES | Compensation Governance | None | |||||
Perry M. Traquina Former Chairman, CEO, and Managing Partner, Wellington Management Company LLP | 60 | 2015 | YES | Audit Governance | 2 | |||||
Devin N. Wenig President and CEO, eBay | 50 | 2015 | NO | None | None |
* Audit = Audit Committee; Compensation = Compensation Committee;www.ebayinc.com 19
Corporate Governance = / Board Composition and Independence
Board Composition and Independence
The Board has developed a set of guiding principles relating to Board membership. The Board believes that in light of the rapidly changing environment in which the Company operates, the Board must be comprised of members with highly relevant professional experience. In addition, although the Board does not have term limits, the Board believes that a certain amount of director turnover is to be expected and is desirable.
Ongoing Assessment of Composition
Commitment to Board Refreshment
Our Board has shown an ongoing commitment to Board refreshment and to having highly qualified, independent perspectives in the boardroom. Of our 13 current directors, 12 were added since 2015. Our directors have an average tenure of 5 years. This experience balances the institutional knowledge of our longer-tenured directors with the fresh perspectives brought by our newer directors. A goal of our board refreshment is enhancing the diversity of skills and experience of the Board.
Nominating Process
The Corporate Governance and Nominating Committee considers nominee recommendations from a variety of sources, including nominees recommended by stockholders. The Corporate Governance and Nominating Committee has from time to time retained an executive search firm to help facilitate the screening and interview process of director nominees, as it did for the search process that identified directors Hayles and Shroff in 2020. The Corporate Governance and Nominating Committee expects that qualified candidates will have high-level managerial experience in a relatively complex organization or be accustomed to dealing with complex problems, and will be able to represent the interests of the stockholders as a whole rather than special interest groups or constituencies.
Director Selection Principles
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Proxy Statement Summary
Executive Compensation
FollowingThe Corporate Governance and Nominating Committee considers a number of factors in determining the 2015 Spin-Offslate of PayPal (the “Spin-Off”), we conducted an extensive review ofdirector nominees for election to the Company’s compensation philosophy and executive compensation program for 2016Board that it recommends to determine whether they continuedthe Board, with each candidate being reviewed relative to be properly aligned with our business goals, culture, and importantly, stockholder interests. Following this review, the Compensation Committee and our CEO remained committed to our existing executive compensation program, which is designed to align with our business goals and culture, serves the long-term interests of our stockholders and is highly performance based. We believe that our pay-for-performance driven executive compensation program ensures that our executives’ compensation is tied to delivering results that support the Company’s business strategy and objectives.
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The goals of our executive compensation program are to:
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We achieve these objectives primarily by employing the following elements of pay for our executive officers:
Our executive officers also participate in our broad-based retirement savings and benefit programs and receive limited perquisites.
For 2016, we chose to continue to use a mix of equity and cash compensation vehicles to compensate our executive officers. We also decided to increase the weight of performance-based restricted stock units (“PBRSUs”) and eliminate the use of stock options. Our incentive compensation is dependent on financial targets that the Compensation Committee believes correlate with operating performance over one- and multi-year performance periods and long-term stock performance.
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principles.
ü The Board should be composed of directors chosen on the basis of their character, integrity, judgment, skills, background, and experience of particular relevance to the Company.
ü Directors should have high-level managerial experience in a relatively complex organization or be accustomed to dealing with complex problems.
ü Directors should also represent the balanced, best interests of the stockholders as a whole, rather than special interest groups or constituencies.
ü Each director should be an individual of the highest character and integrity, with the ability to work well with others and with sufficient time available to devote to the affairs of the Company in order to carry out the responsibilities of a director.
ü In addressing the overall composition of the Board, characteristics such as gender, race, age, international background, and expertise should be considered.
ü The Board should be composed of directors who are highly engaged with our business.
ü The Board should include individuals with highly relevant professional experience.
20 ebay / 2021 Proxy Statement Summary
The following chart shows the breakdown of 2016 compensation for our CEO, Devin Wenig,Board Composition and illustrates the predominance of equity incentives and performance-based components in our executive compensation program.
DEVIN WENIGIndependence / Corporate Governance
Diversity of Skills and Experience
In planning for succession, the Corporate Governance and Nominating Committee considers the overall mix of skills and experience of the Board and the types of skills and experience desirable for future Board members, in light of the Company’s business and long-term strategy. Experiences, qualifications, skills and attributes prioritized by the committee include the following.
+ Retail and e-commerce industry experience + Strategy experience in either established or growth markets + Investment and finance experience + Leadership experience, including public company governance + Entrepreneurship + Transactional experience, including mergers and acquisitions |
We believe our compensation practices align with and support the goals of our executive compensation program and demonstrate our commitment to sound compensation and governance practices.
Management experience, including talent and culture development
Product, marketing and media experience
+ Global business experience + Sustainable business practices experience + Financial expertise, including expertise gained as a
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4Further Diversity Priorities (Gender and Race)
In addition to skills and experience, the Corporate Governance and Nominating Committee considers gender, race, age and national origin in evaluating potential Board members. When searching for new directors, the Corporate Governance and Nominating Committee actively seeks out women and individuals from underrepresented groups to include in the pool from which Board nominees are chosen.
Stockholder Nominations and Proxy Access
Stockholders wishing to submit recommendations or director nominations pursuant to the advance notice procedures set forth in our bylaws for our 2022 Annual Meeting of Stockholders should submit their recommendations or nominations to the Corporate Governance and Nominating Committee in care of our Corporate Secretary. Such nominations should be in accordance with the time limitations, procedures, and requirements described under the heading “May I propose actions for consideration at next year’s Annual Meeting or nominate individuals to serve as directors?” in the section entitled “Questions and Answers About the Proxy Materials and Our 2021 Annual Meeting.”
Our “Proxy Access” bylaw provision permits an eligible stockholder or group of up to 20 stockholders to nominate candidates for election to our Board. Proxy access candidates will be included in our proxy statement and ballot. The proxy access bylaw provision provides that holders of at least 3% of eBay common stock, which can comprise up to 20 stockholders, holding such stock continuously for at least three years, can nominate two individuals or 20% of the Board, whichever is greater, for election at an annual meeting of stockholders. Our bylaws provide details regarding the time frames and procedures that must be followed and other requirements that must be met to nominate directors through this process.
www.ebayinc.com 21
Corporate Governance / Board Composition and Independence
Corporate GovernanceDirector Independence
Overview
The Board is responsible for (1) providing advice and oversight of the strategic and operational direction of the Company and (2) overseeing the Company’s executive management, each to ensure the Company operates in ways that support the long-term interest of our stockholders and the other stakeholders we serve. To do this effectively, the Board has adopted clear and specific governance guidelines (“Corporate Governance Guidelines”) that, along with our Bylaws, Board committee charters, and our Code of Business Conduct and Ethics (“Code of Business Conduct”), provide the framework for the governance of the Company.
The following is a list of governance provisions that demonstrate eBay’s commitment to transparency and accountability:
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Our Corporate Governance Guidelines, the charters of our principal Board committees, and our Code of Business Conduct can be found on our investor relations website athttps://investors.ebayinc.com/corporate-governance.cfm. Any changes in these governance documents will be reflected in the same location on our website. Information contained on our investor relations website is not part of this Proxy Statement.
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The rules of The NASDAQNasdaq Stock Market require listed companies to have a board of directors with at least a majority of independent directors. These rules have both objective tests and a subjective test for determining who is an “independent director.”
Objective | The objective tests state, for example, that a director is not considered independent if he or she is an employee of the Company, or is a partner in, or a controlling stockholder or executive officer of, an entity to which the Company made, or from which the Company received, payments in the current or any of the past three fiscal years that exceed 5% of the recipient’s consolidated gross revenue for that year. | |
Subjective test | The subjective test requires our Board to affirmatively determine that a director does not have a relationship that would interfere with the director’s exercise of independent judgment in carrying out his or her responsibilities. |
On a quarterly basis, each
Each member of our Board is required to complete a questionnaire designedprovide information to provide informationsupplement the Company’s own due diligence to assist the Board in determining whether the director is independent under the listing standards of The NASDAQNasdaq Stock Market and our Corporate Governance Guidelines, and whether members of our Audit Committee and Compensation Committee satisfy additional SecuritiesSEC and Exchange Commission (“SEC”) and NASDAQNasdaq independence requirements.
Corporate Governance
Our Board has adopted guidelines setting forth certain categories of transactions, relationships, and arrangements that it has deemed immaterial for purposes of making its determination regarding a director’s independence, and does not consider any such transactions, relationships, and arrangements in making its subjective determination.
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Our Board has determined that each12 of the following directors isour 13 Directors are independent under the listing standards of The NASDAQNasdaq Stock Market and under eBay’s Corporate Governance Guidelines:Guidelines. Jamie Iannone, who joined the Board and became our President and Chief Executive Officer on April 27, 2020, is not an independent director.
In accordance with the rules of The Nasdaq Stock Market, the Board limits membership on the Audit Committee, the Compensation Committee, and the Corporate Governance and Nominating Committee to independent directors.
Our Corporate Governance Guidelines require any director who has previously been determined to be independent to inform the ChairmanChair of the Board and our Corporate Secretary of any change in his or her principal occupation or status as a member of the board of any other public company, including retirement, or any change in circumstance that may cause his or her status as an independent director to change.
Board Leadership Structure and Effectiveness / Corporate Governance
Board Leadership Structure and Effectiveness Board Leadership |
In accordance with our Bylaws,bylaws, our Board elects our ChairmanChair of the Board and appoints our CEO. Our Corporate Governance Guidelines require that the roles of ChairmanChair of the Board and CEO be held by separate individuals and require the appointment of a lead independent director if the ChairmanChair of the Board is not an independent director. Mr. Tierney has served as our Chairman of the Board since July 2015. The Board believes that the separation of the offices of the ChairmanChair of the Board and CEO is appropriate at this time as it aids in the Board’s oversight of management and it allows our CEO to focus primarily on his management responsibilities. Director Pressler has served as our Chair of the Board since June 2020.
All directors are elected annually. We do not have a classified board.
Committee Structure
The Board has threefour principal committees: the Audit Committee, the Compensation Committee, and the Corporate Governance and Nominating Committee and the Risk Committee.
The purpose of the Board committees is to help the Board effectively and efficiently fulfill its responsibilities, but they do not displace the oversight of the Board as a whole. Each committee meets regularly and has a written charter that has been approved by the Board. In addition, a member of each committee periodically reports to the Board on any significant matters discussed by the committee.
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During 2016, our Board held five meetings, and each Board member attended at least 75% of the aggregate of all of the Board meetings and committee meetings for the committees on which such director served.
Corporate Governance
Audit Committee
Each member of the Audit Committee is independent in accordance with the audit committee independence requirements of the listing rules of The NASDAQ Stock Market and the applicable rules and regulations of the SEC. Our Board has determined that Mr. Anderson is an “audit committee financial expert” as defined by the SEC.
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Corporate Governance
The Audit Committee also has primary responsibility for the oversight of risks facing our business. See “Corporate Governance – Our Corporate Governance Practices – Risk Oversight – Audit Committee’s Role in Risk Oversight.”
You can view our Audit Committee Charter on the corporate governance section of our investor relations website athttps://investors.ebayinc.com/corporate-governance.cfm.
Compensation Committee
The members of our Compensation Committee are all independent in accordance with the rules and regulations of The NASDAQ Stock Market, the Exchange Act and Section 162(m) of the Internal Revenue Code.
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The Compensation Committee Charter permits the Compensation Committee to, in its discretion, delegate all or a portion of its duties and responsibilities to a subcommittee of the Compensation Committee.
Additional disclosure regarding the role of the Compensation Committee in compensation matters, including the role of consultants in compensation decisions, can be found under “Compensation Discussion and Analysis — Compensation Decisions for 2016” and “Compensation Discussion and Analysis — Further Considerations for Setting Executive Compensation — Role of Consultants in Compensation Decisions” below.
You can view our Compensation Committee Charter on the corporate governance section of our investor relations website athttps://investors.ebayinc.com/corporate-governance.cfm.
Compensation Committee Interlocks and Insider Participation. All members of the Compensation Committee during 2016 were independent directors, and no member was an employee or former employee of eBay. No Compensation Committee member had any relationship requiring disclosure under Item 404 of Regulation S-K promulgated by the SEC. During 2016, none of our executive officers served on the Compensation Committee (or its equivalent) or board of directors of another entity whose executive officer served on our Compensation Committee or Board.
Corporate Governance
Corporate Governance and Nominating Committee
All members of our Corporate Governance and Nominating Committee are independent under the listing standards of The NASDAQ Stock Market. Mr. Green joined the Corporate Governance and Nominating Committee in March 2017.
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Director Nominations.The Corporate Governance and Nominating Committee considers nominee recommendations from a variety of sources, including nominees recommended by stockholders. The Corporate Governance and Nominating Committee has from time to time retained an executive search firm to help facilitate the screening and interview process of director nominees. The Corporate Governance and Nominating Committee expects that qualified candidates will have high-level managerial experience in a relatively complex organization or be accustomed to dealing with complex problems, and will be able to represent the interests of the stockholders as a whole rather than special interest groups or constituencies.
Among other factors, the Corporate Governance and Nominating Committee considers each candidate relative to the following attributes:
The Corporate Governance and Nominating Committee also considers the interplay of a candidate’s background and expertise with that of other Board members, and the extent to which a candidate may be a desirable addition to any committee of the Board. The Corporate Governance and Nominating Committee also values diversity as a factor in selecting nominees to serve on the Board.
Our Corporate Governance Guidelines provide that the Corporate Governance and Nominating Committee should consider diversity (including gender and race), age, international background, and expertise in evaluating potential Board members. When searching for new directors, the Corporate Governance and Nominating Committee actively seeks out qualified women and individuals from minority groups to include in the pool from which Board nominees are chosen. Finally, the Corporate Governance and Nominating Committee also takes into account the set of guiding principles relating to Board membership described in “Our Corporate Governance Practices — Succession Planning” below.
Corporate Governance
You can view our Corporate Governance and Nominating Committee Charter on the corporate governance section of our investor relations website athttps://investors.ebayinc.com/corporate-governance.cfm.
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Our Board is committed to good corporate governance and believes in maintaining policies and practices that serve the interests of all stockholders, including governance provisions that protect and empower stockholders, including:
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We have a practice of regularly engaging with stockholders to seek their feedback on our corporate governance practices and our executive compensation program. After we file our proxy statement, we engage with our largest stockholders about important topics to be addressed at our annual meeting. In the fall, we conduct an additional cycle of stockholder engagement where we focus on our corporate governance practices and executive compensation program, as well as anything else resulting from matters voted on at our annual meeting. Following each round of stockholder engagement, we provide an overview of the discussions and feedback to the applicable Committees, which is also discussed with the Board.
Corporate Governance |Our Corporate Governance Practices
Gender Pay Equity and Global Diversity & Inclusion.At our 2016 annual meeting, stockholders considered a stockholder proposal to publish a report on gender pay equity. Prior to receiving this stockholder proposal, we had begun the process of conducting an extensive global study of gender pay equity that considered the main components of compensation, including salary, bonus and stock. While the proposal did not pass, it garnered significant support. In October 2016, we publicly disclosed key findings of our pay equity study, including that women earn the same as men in the U.S. in terms of salary. As part of our fall governance outreach, we updated our stockholders on the results of our gender pay equity study. In addition, in March 2017, we publicly disclosed our first Global Diversity & Inclusion report since the Spin-Off of PayPal and the sale of our Enterprise segment. The report included both quantitative information on our global gender diversity and U.S. racial and ethnic diversity and qualitative information on our strategic approach, programs and initiatives.
Our Corporate Governance Practices
We believe that strong corporate governance practices that provide meaningful rights to our stockholders and ensure Board accountability are key to our relationship with our stockholders. To help our stockholders understand our commitment to this relationship and our governance practices, the Board has adopted a set of Corporate Governance Guidelines to set a framework within which the Board will conduct its business. Our Corporate Governance Guidelines are summarized below along with certain other of our governance practices.
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Executive Sessions among Independent Directors. At least several times a year, the independent directors meet in executive session. The Chairman leads these discussions.
Outside Advisors. The Board and each of its committees may retain outside advisors of its choosing at the Company’s expense. Neither the Board nor any committee is required to obtain management’s consent to retain outside advisors.
Board of Directors Chair of the Board: Paul S. Pressler (Independent) | |||
Audit Committee Chair: Perry M. Traquina All Members Independent | Compensation Chair: Adriane M. Brown All Members Independent | Corporate Governance Chair: Kathleen C. Mitic All Members Independent | Risk Committee Chair: Robert H. Swan All Members Independent |
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Corporate Governance / Board Leadership Structure and Effectiveness
Audit Committee
Each member of the Audit Committee is independent in accordance with the audit committee independence requirements of the listing rules of The Nasdaq Stock Market and the applicable rules and regulations of the SEC. Our Board has determined that each of Messrs. Traquina and Swan and Ms. Hayles is an “audit committee financial expert” as defined by SEC rules.
Members | Key Responsibilities |
Perry M. Traquina (Chair) Carol Hayles Matthew Murphy Robert Swan Meetings in 2020: 9 | · Meets with our independent auditors to review the results of the annual audit and to discuss our financial statements · Oversees the independence of the independent auditors, evaluates, together with the Board, the independent auditors’ performance, and reviews and approves the fees of the independent auditors · Receives and considers the independent auditors’ comments as to controls, adequacy of staff, and management performance and procedures in connection with audit and financial controls · Considers conflicts of interest and reviews all transactions with related persons involving executive officers or Board members that are reasonably expected to exceed specified thresholds · Receives periodic updates on our legal and ethical compliance programs · Reviews and discusses with management our financial risk exposures, including credit and counterparty risks, market risk, asset and liability risk, liquidity risk, foreign currency risk, and investment policy and risk, and the steps we have taken to detect, monitor, and actively manage such exposures · Reviews and evaluates the compensation and performance of the Head of Internal Audit, reviews and approves the internal audit plan, receives regular reports on internal audit activities and meets directly with the Head of Internal Audit without other members of management present |
You can view our Audit Committee Charter on the corporate governance section of our investor relations website at
https://investors.ebayinc.com/corporate-governance/governance-documents.
Compensation Committee
The members of our Compensation Committee are all independent in accordance with the rules and regulations of The Nasdaq Stock Market and the Exchange Act and Section 162(m) of the Internal Revenue Code.
Members | Key Responsibilities |
Adriane M. Brown Anthony J. Bates Logan Green Kathleen C. Mitic Paul S. Pressler Meetings in 2020: 8 | · Reviews and approves the compensation of our CEO and our other executive officers · Oversees global compensation strategy for all employees and broad-based equity plans · Reviews and approves the Compensation Discussion and Analysis · Assesses on an annual basis the independence of its compensation consultants and other compensation advisers · Reviews risk assessment of our compensation programs to ensure that our compensation programs do not incent employees to take unacceptable risk |
The Compensation Committee Charter permits the Compensation Committee to, in its discretion, delegate all or a portion of its duties and responsibilities to a subcommittee of the Compensation Committee. You can view our Compensation Committee Charter on the corporate governance section of our investor relations website at https://investors.ebayinc.com/corporate-governance/governance-documents.
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Board Leadership Structure and Effectiveness / Corporate Governance
Corporate Governance and Nominating Committee
All members of our Corporate Governance and Nominating Committee are independent under the listing standards of The Nasdaq Stock Market.
Members | Key Responsibilities |
Kathleen C. Mitic (Chair) Diana Farrell Bonnie S. Hammer Paul S. Pressler Perry M. Traquina Meetings in 2020: 4 | · Makes recommendations to the Board as to the appropriate size of the Board and Board committees · Reviews the qualifications of candidates for the Board · Makes recommendations to the Board on potential Board and Board committee members · Assesses the responsibilities of key Board committees and makes recommendations to the Board · Establishes procedures for the oversight of the evaluation of the Board and management · Reviews correspondence received from stockholders and receives reports on stockholder feedback obtained through outreach program · Oversees the Company’s policies and programs concerning responsible business and philanthropy and sustainability reporting N E W · Reviews the Company’s political spending and related activities |
The Corporate Governance and Nominating Committee takes into account the set of guiding principles relating to Board membership described in “Board Composition and Independence.”
You can view our Corporate Governance and Nominating Committee Charter on the corporate governance section of our investor relations website at https://investors.ebayinc.com/corporate-governance/governance-documents.
Risk Committee
The Risk Committee Charter requires a majority of the committee members to be independent under the listing standards of the Nasdaq Stock Market. Currently, all members of our Risk Committee are independent under the Nasdaq Stock Market listing standards.
Members | Key Responsibilities |
Adriane M. Brown Diana Farrell Matthew Murphy Meetings in 2020: 3 | · Oversees the Company’s management of key risks such as information security and regulatory compliance (including privacy, anti-money laundering and foreign assets control), as well as the guidelines, policies and processes for monitoring and mitigating such risks · Reviews and discusses with management the Company’s enterprise risk management function and structure, and the guidelines, policies and processes for risk assessment and risk management · Reviews and discusses with management the tone and culture within the Company regarding risk, including open risk discussions, and integration of risk management into the Company’s behaviors, decision making, and processes · Receives reports from the Company’s corporate audit and compliance staff on the results of risk management reviews and assessment |
Absent exigent circumstances, all Board members are expected to attend eBay’s annual meeting of stockholders in person or by telephone or video call. All
You can view our Risk Committee Charter on the corporate governance section of our directors serving oninvestor relations website at https://investors.ebayinc.com/corporate-governance/governance-documents.
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Corporate Governance / Board Leadership Structure and Effectiveness
Board and Committee Effectiveness
We believe in strong corporate governance practices that provide meaningful rights to our stockholders and ensure Board accountability. Our Corporate Governance Guidelines set forth a framework within which our Board at the timeconducts its business and demonstrates our commitment to good governance and a productive relationship with our stockholders. Principle features of our last annual meetingCorporate Governance Guidelines are summarized below along with certain other of stockholders, which was held in April 2016, attended that meeting.our governance practices.
|
Engaged Independent Oversight Annual Governance Review Review and update corporate governance practices in context of Board operations and stakeholder feedback Annual Self-Evaluation Formal Board and committee self-evaluations conducted by independent Chairs Feedback incorporated into Board practices Stockholder Outreach Regular fall and spring governance outreach with significant stockholders Board Annual Self-Evaluations It is important that the Board and its committees are performing effectively and in the best interests of the Company and its stockholders. The Board and each committee perform an annual self-assessment toannually evaluate its effectiveness in fulfilling its obligations. As part of this annual self-assessment,self-evaluation, directors are able to provide feedback on the performance of other directors. The ChairmanChair of the BoardCorporate Governance and Nominating Committee leads the Board in its review of the results of the annual self-assessmentself-evaluation. Self-Evaluation Questionnaire Provides director feedback on the Board and takes further actioneach of the Committees as needed. Inwell as each director Results Analyzed Results of the self-evaluations are analyzed and discussed with Corporate Governance and Nominating Committee Individual Discussions The Chair of our Corporate Governance and Nominating Committee engages with individual directors as appropriate Summary of Results Summary of Board and Committee self- evaluation results provided to full Board Ongoing Feedback Directors are encouraged to provide ongoing feedback in addition to the Companyannual self-evaluation Feedback Incorporated Policies and practices updated as appropriate as a result of the annual self-evaluation and ongoing feedback Review of Process Our Corporate Governance and Nominating Committee periodically reviews the self-evaluation process Director Recruitment Seek directors with diverse perspectives and expertise relevant to our long-term business strategy Emphasis on adding directors with diverse backgrounds to the Board Diverse, Independent Board with Mix of Tenures All directors except our CEO are independent Board includes five female and three racially diverse directors Directors possess wide range of expertise to foster diverse perspectives Director Education eBay provides membership in the National Association of Corporate Directors to all directors and sponsors attendance at additional educational programs Directors provided updates on relevant eBay compliance training Incorporation of Feedback Board membersOperations Robust oversight of corporate strategy Executive sessions scheduled for each regular Board meeting Director product showcases Open access to assist them in remaining currentsenior management and information Access to third-party advisors Frequent informal Board calls Substantial opportunity to engage with exemplary boardemployees at company-wide events Engagement with management outside of Board meetings through working groups Accountability to Stockholders Proxy access for director candidates nominated by stockholders Majority voting standard for uncontested director elections Annual director elections All directors are expected to attend the Annual Meeting of Stockholders, and committeewith the exception of now- retired Directors Anderson and Omidyar, all attended the 2020 Annual Meeting Governance Principles Independent Chair Stock ownership guidelines for directors Prohibition on stock hedging and pledging Commitment to strong governance practices and developmentsrecognition of the importance of strong governance to value creation and risk oversight
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Board Oversight and Stockholder Engagement / Corporate Governance
Board Oversight and Stockholder Engagement
Strategy Oversight
One of the Board’s key responsibilities is overseeing the Company’s strategy, and the Board has deep experience and expertise in corporate governance.
the area of strategy development and insights into the most important issues facing the Company. Setting the strategic course of the Company involves a high level of constructive engagement between management and the Board. The Board also has developed a set of guiding principles relating to Board membership. The Board believes that in light of the rapidly changing environment in whichregularly discusses eBay’s key priorities, taking into consideration and adjusting the Company’s businesses operate,long-term strategy with global economic, customer and other significant trends, as well as changes in the Board must add members with highly relevant professional experience. In addition,e-commerce industry and the Board believes that a certain amount of director turnover is to be expected and desirable, and while it does not have term limits, the Board believes that up to nine to 12 years will generally be the expected time commitment from any individual director.
Corporate Governance |Our Corporate Governance Practices
regulatory landscape.
| At least annually, the Board conducts an extensive review of the Company’s long-term strategic plans, its annual operating plan and capital structure. |
· | Throughout the year and at almost every Board meeting, the Board receives information and updates from management and actively engages with senior leaders with respect to the Company’s strategy, including the strategic plans for our businesses and the competitive environment. |
· | eBay’s independent directors also hold regularly scheduled executive sessions without Company management present, at which strategy is discussed. |
· | The Board also regularly discusses and reviews feedback on strategy from our stockholders and stakeholders. |
Management Succession Planning and Workforce Culture
The Board recognizes the importance of effective executive leadership to eBay’s success. We conduct a review process at least annually that includes succession plans for our senior leadership positions. These succession plans are reviewed and approved by ourthe Board. In conducting its review, the Board considers, among other factors, organizational and operational needs, competitive challenges, leadership/management potential and development, and emergency situations.
Board Connection to eBay Workforce Culture
The Board is intently focused on fostering a culture of leadership, development and excellence
Our workforce culture is linked to eBay’s mission of empowering people and creating economic opportunity for all. This shared purpose has influenced our culture for 25 years and motivates our employees every day. We are rooted in core beliefs of empowering our community, innovating boldly, delivering with impact, being for everyone and acting with integrity. The Board views eBay’s workforce culture as an asset and oversees eBay’s employee engagement and other workforce development programs.
Culture & Employee Engagement | Board Connection | |
Management Accessibility and Engagement
· Regular rhythm of employee “All Hands” meetings with the CEO and senior leaders · Learning sessions with the initiative and business leaders Learning and Development · Strong culture of 360 feedback, professional development with opportunities for stretch assignments, leader and instructor-led training and self-directed learning · Company-wide program on doing business with integrity led by eBay C-Suite ethical leadership training for people managers; expanded “tone from the top” program | Succession Planning · Robust succession planning at most senior level Oversight of Development Programs · People program accomplishment review · Annual People (human capital management) review with Chief People Officer Engagement with Employees · Participation in employee “All Hands” meetings, including International Women’s Day and Conscious Inclusion programs |
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Corporate Governance / Board Oversight and Stockholder Engagement
Enterprise Risk is inherent with every business, and how well a business manages risk can ultimately determine its success. We face a number of risks, includingSustainability Oversight
eBay faces economic, financial, legal and regulatory, operational and other risks, such as the impact of competition. Management is responsible forcompetition and sustainability risks, including social, environmental and reputational factors that are integral to the day-to-day managementstrength of the risksour brands. The Board recognizes that our ability to manage risk can influence whether we face, while theachieve our strategic and operating objectives. The Board, as a whole and through its committees, has responsibility for the oversight of risk management.management, while management is responsible for the day-to-day management of the risks that we face. In its risk oversight role, the Board is responsible for satisfying itself that the risk management framework and supporting processes as implemented by management are adequate and functioning as designed. The Board also influences risk management by fostering a corporate culture of integrity and risk awareness.
Audit Committee’s Role in Risk Oversight.While the
Board is ultimatelyof Directors Ultimately responsible for risk oversight at eBay,and direct oversight of major risks Human capital management Strategic and competitive Operational planning and execution Determines risk oversight responsibilities of its committees Risk Committee Assists the Board has delegatedin its oversight of the Enterprise Risk Management (“ERM”) program for key risks such as information security and regulatory compliance (including privacy, anti-money laundering and foreign assets control). Audit Committee Oversight of financial risks facing the Company’s businesses, including tax, credit, market, liquidity and investment policy risk. Oversight of ethics and compliance program and responsibility for review of related party transactions. Compensation Committee Promotes appropriate level of risk taking by management through the design and administration of our compensation programs. Oversight of management’s global compensation and employee retention strategies. Corporate Governance and Nominating Committee Influences culture of the board and tone from the top through Board composition recommendations. Oversight of eBay sustainability initiatives, including eBay Impact. Senior Management Guides programs and reports to Board and committees on strategies and progress Promotes a workforce culture of risk awareness Determines with Board appropriate risk tolerances ERM Program With oversight from the Risk Committee, identifies, assesses, prioritizes and manages our major risk exposures. Internal Audit Reporting directly to the Audit Committee, supplies independent assurance of design and effectiveness of risk management. eBay Impact With oversight from the primary responsibilityCorporate Governance and Nominating Committee, team of key functional leaders implementing policies and programs for the oversight of risks facing our businesses. The Audit Committee’s charter provides that it will reviewsustainability and discuss with management our major risk exposures, including financial, operational, privacy, security, cybersecurity, competition, legal,philanthropy. Business Functions, Operations and regulatory risks,Commerce Platforms Our People, Culture and the steps we have taken to detect, monitor,Beliefs
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Board Oversight and actively manage such exposures, as well as management’s risk assessmentStockholder Engagement / Corporate Governance
Risk Management and Sustainability
Our risk management policies. The Audit Committee reviews with our General Counsel any significant legal, compliance,framework, including ERM and regulatory matters that could have a material impact on our financial statements or our business, including material notices to or inquiries received from governmental agencies. We also haveImpact sustainability programs, is embedded an enterprise risk management (“ERM”) program across our core businesses, aligned with oversight of our Company-wide initiative involvingcompany-wide initiatives by the Audit Committee,Board and its committees as illustrated above. Our approach to risk management and other personnel. The ERM framework is designed to identify, assess, prioritize and manage our major risk exposures which could affect our ability to execute on our corporate strategy and fulfill our business objectives. The ERM program is designed toThese programs enable the Audit CommitteeBoard to establish a mutual understanding with management of the effectiveness of the Company’s risk management practices and capabilities, to review the Company’s risk exposure and risk tolerance, and to elevate certain key risks for oversight at the Board level.
Management’s Role in Risk Oversight.Our Vice President, Internal Audit is responsible for
Management collaborates internally, with oversight from the Board, and periodically engages independent advisors to update risk assessments. Key risks encompassed by the ERM program include, without limitation, information security, data privacy, human capital management and regulatory compliance (including privacy, anti-money laundering and foreign assets control). As a result of our internal audit function and our risk governance framework, which includesmost recent sustainability risk assessment, monitoring,eBay’s Impact team focuses its efforts on several key areas, including Economic Opportunity, Sustainable Commerce, Culture & Workforce and reporting. The Vice President, Internal Audit reports directly to the Audit Committee, and the Audit Committee reviews and evaluates the compensation and performancemaintaining a Trusted Managed Marketplace.
Key members of the Vice President, Internal Audit and provides the Vice President, Internal Audit with direct access to the Audit Committee. The Vice President, Internal Audit facilitates the Audit Committee’smanagement, as appropriate, periodically review and approval of the internal audit plan and provides regular reporting on audit activities. In addition, through consultation with management, the Vice President, Internal Audit periodically assesses the major risks facing eBay and coordinates with the executives responsible for such risks through the risk governance process. The Vice President, Internal Audit periodically reviews with the AuditRisk Committee the major risks facing eBay and the steps management has taken to detect, monitor, and actively manage those risks within the agreed risk tolerance. Likewise, the Corporate Governance and Nominating Committee receives periodic updates on eBay sustainability initiatives. The executiveexecutives responsible for managing a particular risk may(in the case of cybersecurity risks, our Chief Technology Officer and Chief Information Security Officer) also report to the Audit CommitteeBoard or its committees, as appropriate, on how the risk is being managed and progress towards agreed mitigation goals.
In addition to the general oversight responsibility that has been delegated to the Audit Committee, other committees review the risks within their areas of responsibility and expertise. For example, the Compensation Committee reviews the risks associated with our compensation policies and practices and our succession planning process.
Corporate Governance |Our Corporate Governance Practices
Risk AssessmentManagement works across the organization to help our business groups and functions prioritize risk management as part of Compensation Policiesthe company’s strategy. Through the combination of the ERM program and Practices.our Impact sustainability efforts, we believe that our risk management framework appropriately addresses the spectrum of risks facing our businesses, including but not limited to each of the material issues identified by the Sustainability Accounting Standards Board as being applicable to companies in our industry.
Spotlight on eBay’s Response to COVID-19 We have assessed N E W
eBay responded to the compensation policies and practices forglobal pandemic in 2020 by allocating over $100 million to relief efforts to support our employees, customers and concluded that they do not createbroader stakeholder communities as outlined below. The Board’s oversight of the risks that are reasonably likely to have a material adverse effect onpresented by the Company. This analysis was presented todynamic environment included the Audit Committee and the Compensation Committee, both of which agreed with this conclusion.
Corporate Hotline. We have established a corporate hotline that is operated by a third party and allows any employee to confidentially and anonymously (where legally permissible) lodge a complaint about any accounting, internal control, auditing, or other matters of concern.following activities:
· | Board-level discussion of the pandemic in the context of strategy, capital allocation and operational planning |
· | Risk Committee reviews of management’s strategies to detect, monitor and manage risks to employees and cybersecurity resulting from the pandemic |
· | Audit Committee discussion of financial risks stemming from the impact on our customers |
· | Corporate Governance and Nominating Committee discussion of the activities of eBay Foundation |
· | Compensation Committee discussion of the impacts of COVID-19 on executive compensation |
Employees | Communities | Customers | ||
ü Increased flexibility to balance personal and professional responsibilities ü Expanded our Employee Assistance Program for mental health support and provided mental health support training for managers ü Invested in additional care benefits ü Gave employees additional day of ü Made assistance payments to all employees to support individual needs and wellbeing | ü Advocated for small business relief ü eBay Foundation granted $15 million to support small businesses, untapped communities and broader COVID-19 relief efforts ü Matched up to $1M in donations made to Feeding America, Direct Relief and Opportunity Fund through eBay for Charity ü Offered U.S. shoppers the opportunity to buy Gifts That Give Back to support relief efforts ü Partnered with the NHS and DHSC in the U.K. to pilot new platform to supply primary care and social care providers access to PPE for free | ü Deferred fees for hundreds of thousands of eBay sellers to support their cash flow needs ü Provided eBay Store subscribers with up to 100,000 extra listings for free ü Extended protections for Seller Performance Standards ü Invited brick-and-mortar retailers to keep their businesses going on eBay through small business accelerator program “Up & Running,” which launched adaptations in over 25 markets worldwide ü Blocking or quickly removing items that make false health claims or offer products at inflated prices – over 50 million listings globally to date |
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Corporate Governance / Board Oversight and Stockholder Engagement
eBay Impact
Many of our Impact sustainability initiatives involve cross-company collaboration on goal setting, impact measurement and reporting, which is published annually on the eBay Impact website. To advance our strategies, manage environmental, social and governance (“ESG”) risks and capitalize on opportunities, eBay has formed the ESG Council, which is composed of key members of our management team and engages with numerous critical partners across the company. N E W This Council is chaired by our Chief Sustainability Officer and is key to eBay executing on our company’s low-carbon transition plan, which is currently focused on achieving 100% renewable energy in our electricity supply by 2025. We also published our first Task Force for Climate-Related Financial Disclosure report this year, addressing the investor need for increased disclosure on climate risks and opportunities. For more information please visit our eBay Impact website at https://www.ebayinc.com/impact/.
Our purpose links us to something bigger than ourselves. The good that emerges is impact.
Economic Opportunity | Champions of inclusive commerce, eBay Seller School assists sellers in transforming their business, and we help small businesses grow globally, including through eBay’s Retail Revival and Up and Running programs. | From 2011 to 2018, the number of eBay’s commercial sellers in less-advantaged communities grew 26% percent compared to a 0.9% decrease in the overall number of business enterprises in those communities. | ||
eBay for Charity | eBay hosts one of world’s largest and most active fundraising platforms, partnering with charity organizations to help them reach their fundraising goals. | In 2020, for the third year in a row, eBay for Charity broke our previous records, raising a total of nearly $123 million globally in charitable donations through the eBay marketplace. | ||
eBay Foundation | eBay Foundation leverages its voice and resources to amplify the work of those addressing and removing barriers to entrepreneurship. We also support our employees with meaningful giving and volunteering opportunities. | To date, eBay Foundation has provided over $65 million in total giving, which has supported over 1,800 unique grantees. In 2020, eBay Foundation increased the employee matching gifts cap to $5,000 per employee and engaged 43% of employees in one or more program. | ||
Sustainable Commerce | Circular commerce has been a part of our eBay brand since we were founded 25 years ago. We continually strive to integrate best practices at our facilities to reduce our environmental footprint. | Through the sale of pre-owned apparel and electronics, eBay has helped avoid over 3.1 million metric tons of carbon emissions since 2016. In 2019, eBay continued to make progress on our environmental goals, achieving 64% renewable energy globally and in 2020, earned inclusion in the CDP Climate A List for the first time. | ||
Trusted Marketplace | eBay created a trusted, transparent marketplace that’s based on the strong ethical values we follow as a business. | eBay earned a 100% rating on the Human Rights Campaign Foundation’s Corporate Equality Index 2020—our 13th year on the Index. eBay was also recognized by the US Department of Homeland Security for its partnership with the Intellectual Property Rights Center, as part of their “E-Commerce Working Group” efforts to combat the sale and distribution of counterfeit and dangerous goods on the Internet. | ||
Goals: We are working to better understand, track and quantify our environmental footprint. | ||||
Renewable Energy Source 100 percent renewable energy in our electricity supply by 2025 for eBay-controlled data centers and offices. | Carbon Emissions Achieve 50% absolute reduction in Scope 1 and 2 GHG emissions by 2025 and 75% reduction by 2030 from our 2016 baseline. | |||
Diversity, Equity & Inclusion Highlights
eBay is committed to being a richly diverse, truly equitable and fearlessly inclusive place for the world to work, grow, buy and sell. Diversity, Equity and Inclusion (DE&I) goes well beyond a moral necessity – it’s the foundation of our business model and critical to our ability to thrive in an increasingly competitive global landscape. To accomplish this lofty goal, we focus our energy and resources across three global and strategic areas: our workforce (who and how we hire), workplace (how do we build a more inclusive environment) and marketplace (how do we better serve the needs of our buyers and sellers as well as the communities we serve). Equity is at the forefront of all we do as we deliver across each of these strategic areas. In our most recent Diversity, Equity and Inclusion report (for calendar year 2020), we shared the results of our fifth gender pay equity study, which found that we have 100% gender pay equity in the US and 99.7% globally.
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Board Oversight and Stockholder Engagement / Corporate Governance
Stockholder Engagement
Why We Engage
Our directors and management are committed to maintaining a robust dialogue with stockholders. We routinely engage with stockholders throughout the year in order to:
· | Provide transparency into our business, our performance and our governance and compensation practices |
· | Discuss with our stockholders the issues that are important to them, hear their expectations for us and share our views |
· | Assess emerging issues that may affect our business, inform our decision making, enhance our corporate disclosures and help shape our practices |
After we file our proxy statement, we engage with our largest stockholders about important topics to be addressed at our annual meeting. In the fall, we conduct an additional cycle of stockholder ESG engagement. Following each round of stockholder engagement, we provide an overview of the discussions and feedback to the applicable Board committees, which is also discussed with the Board. Since January 2020, we have offered to meet on ESG matters with nearly 50 investors representing more than 50% of our outstanding shares, which resulted in approximately 30 conference calls with investors representing more than 35% of our outstanding shares.
How We Engage
Board The Chair of the Board and other directors are available for engagement with large stockholders, including participating in joint corporate governance and investor relations meetings. The Board receives feedback from management’s engagement with stockholders through a cadence of management reports throughout the year. | Outcomes from Stockholder Engagement Stockholder feedback is thoughtfully considered and has led to modifications in our governance practices, executive compensation program and disclosure. Some of the actions we have taken that are informed by stockholder feedback over the last several years include: · Refreshed Board membership to include investor-recommended nominees in 2019 · Instituted eBay’s first-ever dividend program and expanded return of capital through disciplined stock buybacks · Initiated a strategic portfolio review that resulted in the sale of StubHub and agreement to sell eBay Classifieds · Conducted review, resulting in a three-year plan for significant margin expansion · Reorganized our executive leadership team and launched other important strategic and business initiatives · Reduced the threshold for calling a special meeting from 25 percent to a 20 percent standard · Adopted a mainstream proxy access bylaw · Increased stock ownership requirement for chief executive officer · Committed to enhancing the Board’s oversight of eBay’s political spending governance | |
Investor Relations We provide institutional investors with many opportunities to provide feedback to our Board and management. We participate in: ü Webcast events ü One-on-one meetings ü Investor conferences throughout the year To learn more about our engagement, you may visit our investor relations website at https://investors.ebayinc.com. | ||
ESG Team We engage with governance representatives of our major stockholders through conference calls that occur during and outside of the proxy season. Members of eBay’s corporate governance, investor relations, sustainability, corporate compliance, DE&I and executive compensation teams discuss, among other matters, company performance, emerging governance practices, the reasons behind a stockholder’s voting decisions at prior meetings, executive compensation programs and sustainable business practices. | ||
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Corporate Governance / Governance Policies and Practices
Governance Policies and Practices
Contacting the Board or Individual Directors
Stockholders may contact the Board, individual directors or groups of directors (such as all of our independent directors) at the following address:
c/o Corporate Secretary, eBay Inc., 2025 Hamilton Avenue, San Jose, California 95125
The Corporate Governance and Nominating Committee has delegated responsibility for initial review of stockholder communications to our Corporate Secretary. This process assists the Board in reviewing and responding to stockholder communications in an appropriate manner. The Corporate Governance and Nominating Committee has instructed our Corporate Secretary to review correspondence directed to the Board and its principal committees. It is at her discretion to determine whether to forward items solely related to complaints by users with respect to ordinary course of business, customer service and satisfaction issues, or matters she deems to be of a commercial or frivolous nature or otherwise inappropriate for the Board’s or its committees’ consideration.
Governance Documents
Our Corporate Governance Guidelines, the charters of our principal Board committees, and our Code of Business Conduct can be found on our investor relations website at https://investors.ebayinc.com/corporate-governance/governance-documents. Any changes in these governance documents will be reflected in the same location on our website. Information contained on our investor relations website is not part of this Proxy Statement.
Majority Vote Standard for Election of Directors
Our bylaws provide that in the event of an uncontested election, each director shall be elected by the affirmative vote of a majority of the votes cast with respect to such director—i.e., the numbers of shares voted “FOR” a director nominee must exceed the number of votes cast “AGAINST” that nominee. “ABSTAIN” votes will be counted as present for purposes of this vote but are not counted as votes cast. Broker non-votes will not be counted as present and are not considered votes on the proposal. As a result, abstentions and broker non-votes will have no effect on the vote for Proposal 1: Election of Directors.
Director Resignation Policy for Uncontested Elections
If a nominee who is serving as a director (an “Incumbent Director”) fails to receive the required number of votes for election in accordance with our bylaws in an uncontested election, under Delaware law, the Incumbent Director would continue to serve on the Board as a “holdover director” until his or her successor is elected and qualified, until he or she is re-nominated after consideration by the Corporate Governance and Nominating Committee as described further below or until his or her earlier death, resignation, retirement, or removal pursuant to our bylaws. Our Corporate Governance Guidelines provide that, in considering whether to nominate any Incumbent Director for election, the Board will take into account whether the Incumbent Director has tendered an irrevocable resignation that is effective upon the Board’s acceptance of such resignation in the event the director fails to receive the required vote to be elected, as described above. Each of our Incumbent Directors has tendered an irrevocable resignation. In the case of a proposed nominee who is not an Incumbent Director, the Board will take into account whether he or she has agreed to tender such a resignation prior to being nominated for election.
In the case of an uncontested election, if a nominee who is an Incumbent Director does not receive the required vote for election, the Corporate Governance and Nominating Committee or another committee of the Board will decide whether to accept or reject such director’s resignation (if the director has tendered such a resignation), or whether to take other action, within 90 days after the date of the certification of the election results (subject to an additional 90-day period in certain circumstances). In reaching its decision, the Corporate Governance and Nominating Committee will review factors it deems relevant, which may include any stated reasons for “AGAINST” votes, whether the underlying cause or causes of the “AGAINST” votes are curable, criteria considered by the Corporate Governance and Nominating Committee in evaluating potential candidates for the Board, the length of service of the director, the size and holding period of such director’s stock ownership in the Company, and the director’s contributions to the Company. The Corporate Governance and Nominating Committee’s
32 ebay / 2021 Proxy Statement
Governance Policies and Practices / Corporate Governance
decision will be publicly disclosed in a filing with the SEC. If a nominee who was not already serving as a director fails to receive the required votes to be elected at the Annual Meeting, he or she will not become a member of the Board. All of the director nominees are currently serving on the Board and each director nominee has submitted an irrevocable resignation of the type described above.
Stock Ownership Guidelines
Our Board has adopted stock ownership guidelines to better align the interests of our directors and executive officers with the interests of our stockholders and further promote our commitment to sound corporate governance. Under these guidelines, our executive officers are required to achieve ownership of eBay common stock valued at three times their annual base salary (six times in the case of our CEO). For the executive officers, these guidelines are initially calculated using the executive officer’s base salary as of the date the person is first appointed as an executive officer. These guidelines are then recalculated each January 1st immediately following the third anniversary of the most recent calculation. In addition, these guidelines will also be recalculated as of the date on which an executive officer’s pay grade changes. Our directors (except for our CEO) are required to achieve ownership of eBay common stock valued at three times the amount of the annual retainer payable to directors.
Each of our executive officers is required to retain 50% of any shares received (net of any shares sold or withheld to pay any applicable exercise price or satisfy tax withholding obligations) as the result of the exercise, vesting or payment of any eBay equity awards granted to the executive officer until the stock ownership guidelines are met. Each of our non-employee directors is required to retain 25% of the shares received (net of any shares sold or withheld to pay any applicable exercise price or satisfy tax obligations) as the result of the exercise, vesting or payment of any eBay equity awards granted to the director until the stock ownership guidelines are met. Our stock ownership guidelines can be found on our investor relations website at https://investors.ebayinc.com/corporate-governance/governance-documents.
The ownership levels of our executive officers and directors as of April 1, 2021 are set forth in the section entitled “Security Ownership of Certain Beneficial Owners and Management.”
Hedging and Pledging Policy
The Company’s insider trading policy prohibits directors, executive officers, and other employees from entering into any hedging or monetization transactions relating to our securities or otherwise trading in any instrument relating to the future price of our securities, such as a put or call option, futures contract, short sale, collar, or other derivative security. The policy also prohibits directors and executive officers from pledging eBay common stock as collateral for any loans.
Clawbacks
In 2012, we implemented changes to the eBay Incentive Plan and the Company’s equity incentive plans to provide that awards made under those plans are subject to a clawback provision. In January 2014, the terms of the clawback were adopted by the Compensation Committee subject to amendment to comply with the SEC rules to be issued in accordance with the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, or the Dodd-Frank Act.
Conflicts of Interest/Code of Business Conduct
We expect our directors, executive officers, and other employees to conduct themselves with the highest degree of integrity, ethics, and honesty. Our credibility and reputation depend uponon the good judgment, ethical standards, and personal integrity of each director, executive officer, and employee. Our Code of Business Conduct requires that directors, executive officers, and other employees disclose actual or potential conflicts of interest and recuse themselves from related decisions. In order to better protect us and our stockholders, we regularly review our Code of Business Conduct and related policies to ensure that they provide clear guidance to our directors, executive officers, and employees.
The Company also has practices that address potential conflicts in circumstances where a non-employee director is a control person of an investment fund that desires to make an investment in or acquire a company that may compete with one of the Company’s businesses. Under those circumstances, the director is required to notify the Company’s CEO and General Counsel of the proposed transaction, and the Company’s senior management then assesses the nature and degree to which the investee company is competitive with the Company’s businesses, as well as the potential overlaps between the Company and the investee company. If the Company’s senior management determines that the competitive situation and potential overlaps between eBay and the investee company are acceptable, approval of the transaction by the Company would be conditioned upon the director agreeing to certain limitations (including refraining from joining the board of directors of the
www.ebayinc.com 33
Corporate Governance / Governance Policies and Practices
investee company or conveying any confidential or proprietary material between the Company and the investee company, abstaining from being the primary decision-maker for the investment fund with respect to the investee company, and recusing himself/herself from portions of Company Board meetings that contain competitive information reasonably pertinent to the investee company). All transactions by investment funds in which a non-employee director is a control person also remain subject in all respects to the Board’s written policy for the review of related person transactions, discussed under the section entitled “Certain Transactions with Directors and Officers” below.
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Stockholders wishing to submit recommendations or director nominations pursuant to the advance notice procedures set forth in our Bylaws for our 2018 Annual Meeting of Stockholders should submit their proposals to the Corporate Governance and Nominating Committee in care of our Corporate Secretary. Such submissions should be in accordance with the time limitations, procedures, and requirements described under the heading “May I propose actions for consideration at next year’s Annual Meeting or nominate individuals to serve as directors?Officers.” in the section entitled “Questions and Answers about the Proxy Materials and our 2017 Annual Meeting” below.
Proxy Access for Director Nominations. In March 2016, our Board adopted a “Proxy Access for Director Nominations” bylaw provision, which permits an eligible stockholder or group of up to 20 stockholders to nominate candidates for election to our Board. Proxy access candidates will be included in our proxy statement and ballot. The proxy access bylaw provision provides that holders of at least 3% of eBay common stock, which can comprise up to 20 stockholders, holding such stock continuously for at least three years, can nominate two individuals or 20% of the Board, whichever is greater, for election at an annual
Corporate Governance |Our Corporate Governance Practices
stockholders meeting. Our Bylaws provide details regarding the time frames and procedures that must be followed and other requirements that must be met to nominate directors through this process.
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Stock Ownership Guidelines. Our Board has adopted stock ownership guidelines to better align the interests of our directors and executive officers with the interests of our stockholders and further promote our commitment to sound corporate governance. Under these guidelines, our executive officers are required to achieve ownership of eBay common stock valued at three times their annual base salary (seven times in the case of our CEO). Our non-employee directors are required to achieve ownership of eBay common stock valued at three times the amount of the annual retainer payable to directors as of the later of (i) July 1, 2016 or (ii) the year the director is first elected to the Board. Thereafter, these guidelines will be recalculated each June 1 (based on the value of each director’s annual retainer payable for that year). Our stock ownership guidelines can be found on our investor relations website at https://investors.ebayinc.com/corporate-governance.cfm.
The ownership levels of our executive officers and directors as of March 20, 2017 are set forth in the section entitled “Security Ownership of Certain Beneficial Owners and Management” below.
Hedging and Pledging Policy. The Company’s insider trading policy prohibits directors, executive officers, and other employees from entering into any hedging or monetization transactions relating to our securities or otherwise trading in any instrument relating to the future price of our securities, such as a put or call option, futures contract, short sale, collar, or other derivative security. The policy also prohibits directors and executive officers from pledging eBay common stock as collateral for any loans.
Clawbacks. In 2012, we implemented changes to the eBay Incentive Plan and the Company’s equity incentive plans to provide that awards made under those plans are subject to a clawback provision. In January 2014, the terms of the clawback were adopted by the Compensation Committee subject to amendment to comply with the SEC rules to be issued in accordance with the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, or the Dodd-Frank Act.
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Stockholders may contact the Board or individual directors at the following address:
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The Corporate Governance and Nominating Committee has delegated responsibility for initial review of stockholder communications to our Corporate Secretary. This process assists the Board in reviewing and responding to stockholder communications in an appropriate manner. The Corporate Governance and Nominating Committee has instructed our Corporate Secretary to review correspondence directed to the Board and its principal committees. It is at her discretion to determine whether to forward items solely related to complaints by users with respect to ordinary course of business, customer service and satisfaction issues, or matters she deems to be of a commercial or frivolous nature or otherwise inappropriate for the Board’s or its committees’ consideration.Hotline
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We have takenestablished a numbercorporate hotline that is operated by a third party and allows any employee to confidentially and anonymously (where legally permissible) submit a complaint about any accounting, internal control, auditing, or other matters of steps to ensure continued independence of our outside auditors. Our independent auditors report directly to the Audit Committee, and we limit the use of our auditors for non-audit services. The fees for services provided by our auditors in 2016 and 2015 and our policy on pre-approval of non-audit services are described under “Proposal 4 — Ratification of Appointment of Independent Auditors” below.
Security Ownership of Certain Beneficial Owners and Managementconcern.
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information known to us with respect to beneficial ownership of our common stock as of March 20, 2017 by (1) each stockholder known to us to be the beneficial owner of more than 5% of our common stock, (2) each director and nominee for director, (3) each of the executive officers named in the 2016 Summary Compensation Table below, and (4) all executive officers and directors as a group. Unless otherwise indicated below, the address for each of our executive officers and directors is c/o eBay Inc., 2025 Hamilton Avenue, San Jose, California 95125.
Shares Beneficially Owned (1) | ||||||||
Name of Beneficial Owner | Number | Percent | ||||||
Pierre M. Omidyar (2) | 70,368,858 | 6.52 | % | |||||
The Vanguard Group (3) | 66,983,234 | 6.21 | % | |||||
BlackRock, Inc. (4) | 60,506,773 | 5.61 | % | |||||
Devin N. Wenig (5) | 1,295,040 | * | ||||||
Scott F. Schenkel (6) | 262,319 | * | ||||||
Harry A. Lawton (7) | 71,010 | * | ||||||
Stephen Fisher (8) | 122,941 | * | ||||||
Raymond J. Pittman (9) | 120,889 | * | ||||||
Fred D. Anderson Jr. (10) | 21,616 | * | ||||||
Edward W. Barnholt (11) | 20,116 | * | ||||||
Anthony J. Bates (12) | 14,686 | * | ||||||
Logan D. Green (13) | 1,000 | * | ||||||
Bonnie S. Hammer (14) | 12,417 | * | ||||||
Kathleen C. Mitic (15) | 22,286 | * | ||||||
Paul S. Pressler (16) | 22,916 | * | ||||||
Robert H. Swan (17) | 352,405 | * | ||||||
Thomas J. Tierney (18) | 34,108 | * | ||||||
Perry M. Traquina (19) | 18,666 | * | ||||||
All directors and executive officers as a group of (20 persons) (20) | 73,324,080 | 6.78 | % |
Security Ownership of Certain Beneficial Owners and Management |Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires our directors, executive officers, and holders of more than 10% of our common stock to file reports regarding their ownership and changes in ownership of our securities with the SEC and to furnish us with copies of all Section 16(a) reports that they file.
We believe that during the fiscal year ended December 31, 2016, our directors, executive officers, and holders of more than 10% of our common stock complied with all applicable Section 16(a) filing requirements, except for a late Form 4 filed on March 4, 2016 to report a purchase of common stock shares on the open market for Mr. Pressler.
In making this statement, we have relied upon a review of the copies of Section 16(a) reports furnished to us and the written representations of our directors, executive officers, and holders of more than 10% of our common stock.
Certain Transactions with Directors and Officers
Certain Transactions with Directors and Officers
Our Audit Committee reviews and approves the Code of Business Conduct, which applies to our directors, officers, and employees and reviews our programs that are designed to ensure compliance with the Code of Business Conduct. The Audit Committee also reviews and approves all transactions with related persons that are required to be disclosed in this section of our Proxy Statement. The charter of our Audit Committee and our Code of Business Conduct and Ethics may be found on our investor relations website athttps://investors.ebayinc.com/corporate-governance.cfmcorporate-governance/governance-documents/.
Our Board has adopted a written policy for the review of related person transactions. For purposes of the policy, a related person transaction includes transactions in which (1) the amount involved is more than $120,000, (2) eBay is a participant, and (3) any related person has a direct or indirect material interest. The policy defines a “related person” to include directors, nominees for director, executive officers, beneficial holders of more than five percent5% of eBay’s outstanding common stock and their respective family members. Pursuant to the policy, all related person transactions must be approved by the Audit Committee or, in the event of an inadvertent failure to bring the transaction to the Audit Committee for pre-approval, ratified by the Audit Committee. In the event that a member of the Audit Committee has an interest in a related person transaction, the transaction must be approved or ratified by the disinterested members of the Audit Committee. In deciding whether to approve or ratify a related person transaction, the Audit Committee will consider the following factors:
· | Whether the terms of the transaction are (a) fair to eBay and (b) at least as favorable to eBay as would apply if the transaction did not involve a related person; |
· | Whether there are demonstrable business reasons for eBay to enter into the transaction; |
· | Whether the transaction would impair the independence of an outside director under eBay’s director independence standards; and |
· | Whether the transaction would present an improper conflict of interest for any director or executive officer, taking into account the size of the transaction, the overall financial position of the related person, the direct or indirect nature of the related person’s interest in the transaction and the ongoing nature of any proposed relationship, and any other factors the Audit Committee deems relevant. |
We have entered into indemnification agreements with each of our directors and executive officers. These agreements require us to indemnify such individuals, to the fullest extent permitted by Delaware law, for certain liabilities to which they may become subject as a result of their affiliation with eBay.
Since January 1, 2016,2020, there were no related person transactions, and we are not aware of any currently proposed related person transactions, that would require disclosure under SEC rules.
The Compensation Committee is responsible for reviewing and making recommendations to the Board regarding compensation paid to all directors who are not employees of eBay, or any parent, subsidiary, or affiliate of eBay, for their Board and committee services.
Except for Mr. Omidyar, eBay’s founder and member of the Board until September 2020, annual compensation to continuing non-employee directors consisted of (a) RSUs with a grant date value equal to $250,000 or, for a non-employee director serving as the Chair of the Board, $350,000, in each case rounded up to the nearest whole share, granted at the time of the annual meeting and (b) an annual cash retainer of $80,000 plus additional fees for chair and committee service paid in quarterly installments (or, at the non-employee director’s discretion, paid in additional common stock of an equivalent value rounded up to the nearest whole share). Effective in September 2020, the annual equity award and retainer are pro-rated in the event that a director serves for a portion of a year. The annual equity award is granted on the date of the director’s appointment unless the director is appointed more than 9 months since the last annual meeting (in which case, the director will receive cash in lieu of a grant).
We previously issued Deferred Stock Units (“DSUs”) as equity compensation for our non-employee directors. Since January 1, 2017, RSUs have been granted in lieu of DSUs as compensation for non-employee directors. DSUs granted prior to August 1, 2013 are payable in Company common stock or cash (at our election) following the termination of a non-employee director’s service on the Board. DSUs granted on or after August 1, 2013 are payable solely in Company common stock following the termination of a non-employee director’s service on the Board. In the event of a change in control of eBay, any equity awards granted to our non-employee directors will accelerate and become fully vested.
The following table sets forth annual retainers paid to our non-employee directors who serve as Chair of the Board; the Chairs of the Audit, Compensation, Corporate Governance and Nominating, and Risk Committees; and the members of those Committees. Directors with an interest and background in technology who meet regularly with our senior technologists and report significant matters to the Board do not receive any additional compensation for such service.
2020 | |||
Role | Annual Retainer | ||
All Independent Directors | $ | 80,000 | |
Board Chair | $ | 100,000 | |
Lead Independent Director (if applicable) | $ | 25,000 | |
Committee Chairs | |||
Audit | $ | 25,000 | |
Compensation | $ | 15,000 | |
Corporate Governance & Nominating | $ | 15,000 | |
Risk | $ | 15,000 | |
Committee Members | |||
Audit | $ | 18,000 | |
Compensation | $ | 15,000 | |
Corporate Governance & Nominating | $ | 10,000 | |
Risk | $ | 10,000 |
www.ebayinc.com 35
Proposals Requiring Your Vote |Proposal 1 — ElectionCompensation of Directors / 2020 Director Compensation Table
Proposals Requiring Your Vote2020 Director Compensation Table
The following table and footnotes summarize the total compensation paid by the Company to non-employee directors for the fiscal year ended December 31, 2020.
Name (a) | Fees Earned or ($)(b) | Stock Awards ($)(c)(1) | Option Awards ($)(d) | All Other |
Total |
Fred D. Anderson Jr.(2) | 92,250 | — | — | — | 92,250 |
Anthony J. Bates | 105,000 | 250,000 | — | — | 355,000 |
Adriane M. Brown | 108,041 | 250,000 | — | — | 358,041 |
Jesse A. Cohn(3) | 75,604 | 250,000 | — | — | 325,604 |
Diana Farrell | 92,500 | 250,000 | — | — | 342,500 |
Logan D. Green | 91,250 | 250,000 | — | — | 341,250 |
Bonnie S. Hammer | 93,750 | 250,000 | — | — | 343,750 |
E. Carol Hayles(4) | 5,385 | 200,000 | — | — | 205,385 |
Kathleen C. Mitic | 120,000 | 250,000 | — | — | 370,000 |
Matthew J. Murphy | 87,000 | 250,000 | — | — | 337,000 |
Pierre M. Omidyar(5) | — | — | 28,927 | 28,927 | |
Paul S. Pressler | 144,423 | 350,000 | — | — | 494,423 |
Mohak Shroff(6) | 4,396 | 200,000 | — | — | 204,396 |
Robert H. Swan | 109,500 | 250,000 | — | — | 359,500 |
Thomas J. Tierney(7) | 153,750 | — | — | — | 153,750 |
Perry M. Traquina | 114,250 | 250,000 | — | — | 364,250 |
(1) | In connection with the non-employee director’s service to the Company, the non-employee director was granted RSUs. The number of RSUs granted represents the quotient of (A) $250,000 (and an additional $100,000 with respect to the additional award to Mr. Pressler, the non-employee director serving as Chair of the Board) divided by (B) the Company’s closing stock price on the date of grant, rounded up to the nearest whole RSU. 100% of the RSUs vest on the earlier of: (i) the one-year anniversary of the date of grant or (ii) the date of the Company’s first annual meeting of stockholders that occurs after the date of grant, provided the non-employee director continues to provide service to the Company through such date. The stock awards granted to Ms. Hayles and Mr. Shroff reflect a pro-rated annual RSU award they received when they joined the Board of Directors. |
(2) | Mr. Anderson retired from the Board in June 2020. The cash fees paid to Mr. Anderson reflect a pro-rated payment of the annual retainer for the period of 2020 during which he provided service to the Company. |
(3) | Mr. Cohn resigned from the Board in September 2020. The cash fees paid to Mr. Cohn reflect a pro-rated payment of the annual retainer for the period of 2020 during which he provided service to the Company. |
(4) | Ms. Hayles was appointed to the Board in September 2020. |
(5) | Mr. Omidyar retired from the Board in September 2020. |
(6) | Mr. Shroff was appointed to the Board in September 2020. |
(7) | Mr. Tierney retired from the Board in June 2020. The fees earned by Mr. Tierney reflect a pro-rated payment of the annual retainer for the period of 2020 during which he provided service to the Company. |
Fees Earned or Paid in Cash (Column (b))
The amounts reported in the Fees Earned or Paid in Cash column reflect the cash fees earned by each non-employee director in 2020, which includes fees with respect to which the following directors elected to receive shares in lieu of cash.
36 Proposal 1 — Electionebay / 2021 Proxy Statement
2020 Director Compensation Table / Compensation of Directors
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Name Fees Forgone ($) Shares Received (#) Stock Awards (Column (c))
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At the Annual Meeting, 12 directors will be elected to serve for a one-year term until our 2018 Annual Meeting and until their successors are elected and qualified.
Our Board is currently composed of 12 members, 10 of whom are currently independent directors under the listing standards of The NASDAQ Stock Market.
The termamounts reported in the Stock Awards column reflect the aggregate grant date fair value of officeRSUs granted in 2020. The grant date fair value of each ofRSU was calculated using the nominees standing for election at the Annual Meeting expires at the upcoming Annual Meeting. All of the nominees are currently members of the Board and each of the nominees has been elected previously by the stockholders except Logan D. Green, who joined the Board in June 2016. Mr. Green was recommended as a nominee by the Chairfair value of our Corporate Governance and Nominating Committee and our CEO. Each of the nominees has consented to serving as a nominee and being named as a nominee in this Proxy Statement and to serving as a director if elected. If elected at the Annual Meeting, each of the nominees will serve a one-year term until our 2018 Annual Meeting and until his or her successor is elected and qualified, or until his or her earlier death, resignation, or removal.
Majority Vote Standard for Election of Directors. Our Bylaws provide that in the event of an uncontested election, each director shall be elected by the affirmative vote of a majority of the votes cast with respect to such director—i.e., the numbers of shares voted “FOR” a director nominee must exceed the number of votes cast “AGAINST” that nominee. “ABSTAIN” votes will be counted as present for purposes of this vote but are not counted as votes cast. Broker non-votes will not be counted as present and are not entitled to votecommon stock on the proposal. As a result, abstentions and broker non-votes will have no effect on the vote for this proposal.
Director Resignation Policy for Uncontested Elections. If a nominee who is serving as a director (an “Incumbent Director”) fails to receive the required number of votes for re-election in accordance with our Bylaws in an uncontested election, under Delaware law the Incumbent Director would continue to serve on the Board as a “holdover director” until his or her successor is elected and qualified, or until his or her earlier resignation or removal pursuant to our Bylaws. Our Corporate Governance Guidelines provide that, in considering whether to nominate any Incumbent Director for re-election, the Board will take into account whether the Incumbent Director has tendered an irrevocable resignation that is effective upon the Board’s acceptance of such resignation in the event the director fails to receive the required vote to be re-elected, as described above. Each of our Incumbent Directors has tendered an irrevocable resignation. In the case of a proposed nominee who is not an Incumbent Director, the Board will take into account whether he or she has agreed to tender such a resignation prior to being nominated for re-election.
In the case of an uncontested election, if a nominee who is an Incumbent Director does not receive the required vote for re-election, the Corporate Governance and Nominating Committee or another committee of the Board will decide whether to accept or reject such director’s resignation (if the director has tendered such a resignation), or whether to take other action, within 90 days after the date of the certification of the election results (subject to an additional 90-day periodgrant calculated in certain circumstances). In reaching its decision, the Corporate Governance and Nominating Committee will review factors it deems relevant, which may include any stated reasons for “AGAINST” votes, whether the underlying cause or causes of the “AGAINST” votes are curable, criteria considered by the Corporate Governance and Nominating Committee in evaluating potential candidates for the Board, the length of service of the director, the size and holding
Proposals Requiring Your Vote |Proposal 1 — Election of Directors
period of such director’s stock ownership in the Company, and the director’s contributions to the Company. The Corporate Governance and Nominating Committee’s decision will be publicly disclosed in a filingaccordance with the SEC. If a nominee who was not already servingFinancial Accounting Standards Board’s Accounting Standards Codification Topic 718, Compensation— Stock Compensation. Each non-employee director (other than Mr. Omidyar) providing service as a director fails to receivethrough June 29, 2020, the required votes to be elected at thedate of our 2020 Annual Meeting, he or she will not becomewas granted 4,873 RSUs with a membervalue of $250,000 on such date (or, in the case of Mr. Pressler, our Chair of the Board. AllBoard, 6,822 RSUs with a value of $350,000 on such date). On October 15, 2020, Ms. Hayles and Mr. Shroff received a pro-rated annual award of 3,898 RSUs with a value of $200,000. Such RSUs become fully vested upon the earlier of (i) the first anniversary of the director nominees are currently serving ongrant date, and (ii) the Board and each director nominee has submitted an irrevocable resignationfirst annual meeting of the type described above.stockholders of the Company that occurs after the grant date.
As of December 31, 2020, each individual who served as a non-employee director during 2020 held the aggregate numbers of DSUs and RSUs as set forth below. There were no outstanding options held by non-employee directors as of December 31, 2020.
Name | DSUs Held as of (#) | Total RSUs (#) |
Anthony J. Bates | 5,810 | 4,873 |
Adriane M. Brown | — | 4,873 |
Diana Farrell | — | 4,873 |
Logan D. Green | — | 4,873 |
Bonnie S. Hammer | 3,711 | 4,873 |
E. Carol Hayles | — | 3,898 |
Kathleen C. Mitic | 25,212 | 4,873 |
Matthew J. Murphy | — | 4,873 |
Paul S. Pressler | 1,128 | 6,822 |
Mohak Shroff | — | 3,898 |
Robert H. Swan | 836 | 4,873 |
Perry M. Traquina | 6,198 | 4,873 |
All Other Compensation (Column (e))
The amount reported in the All Other Compensation column for Mr. Omidyar consists of that portion of the premiums paid by eBay for health insurance coverage for the benefit of Mr. Omidyar. Other than this benefit, the Company provides no other reportable compensation or benefits to non-employee directors.
www.ebayinc.com 37
Proposal 2 |
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The Corporate Governance and Nominating Committee considers a number of factors and principles in determining the slate of director nominees for election to the Company’s Board that it recommends to the Board, as discussed in the section titled “Corporate Governance – Board of Directors and Committees – Corporate Governance and Nominating Committee,” above. In particular, the Board considers the following factors and principles to evaluate and select nominees:
Our Corporate Governance and Nominating Committee and Board have evaluated each of the director nominees against the factors and principles eBay uses to select director nominees. Based on this evaluation, our Corporate Governance and Nominating Committee and the Board have concluded that it is in the best interests of eBay and its stockholders for each of the proposed nominees listed below to serve as a director of eBay. The Board believes that all of these nominees have a strong track record of being responsible stewards of stockholders’ interests and bring extraordinarily valuable insight, perspective, and expertise to the Board. Additional reasons that the Board recommends supporting the election of the director nominees include:
In addition to these attributes, in each individual’s biography set forth below, we have highlighted specific experience, qualifications, and skills that led the Board to conclude that each individual should serve as a director of eBay.
Proposals Requiring Your Vote |Proposal 1 — Election of Directors
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Proposals Requiring Your Vote |Proposal 2 — Advisory Vote to Approve Named Executive Officer Compensation
Proposal 2 — Advisory Vote to Approve Named Executive Officer Compensation
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In accordance with the requirements of Section 14A of the Exchange Act, we are asking stockholders to approve, on an advisory basis, the compensation of our named executive officers as described in the Compensation Discussion and Analysis, compensation tables, and related narrative discussion of such compensation included in this Proxy Statement
As discussed in the Compensation Discussion and Analysis, the Compensation Committee of the Board is committed to an executive compensation program that is aligned with our business goals, culture, and stockholder interests. We believe a competitive compensation program that is highly performance-based is key to delivering long-term stockholder returns.
Our executive compensation program is designed to:
To achieve these objectives, our executive compensation program has three principal components: long-term equity compensation, an annual cash incentive, and base salary. The Compensation Committee seeks to have our named executive officers’ total compensation heavily weighted to variable, performance-based compensation by delivering a majority of compensation in the form of performance-based restricted stock units and annual cash incentives. Performance-based restricted stock units are granted based on our achievement of financial performance goals over a two-year performance period. Under our annual cash incentive plan, 75% of each named executive officer’s target bonus for 2016 was based on Company financial performance with the remaining 25% based on individual performance; there is no payout for individual performance unless thresholds for Company performance are met. We also granted time-based restricted stock units, the value of which depends on the performance of the Company’s stock.
The Compensation Committee believes that the goals of our executive compensation program are appropriate and that the program is properly structured to achieve those goals. We have engaged in ongoing discussions with our investors, who generally support those goals and the program, and we believe our stockholders as a whole should support them as well.
We are asking our stockholders to indicate their support for the compensation of our named executive officers as described in this Proxy Statement. This proposal, commonly known as a “say-on-pay” proposal, gives our stockholders the opportunity to express their views on the compensation of our named executive officers. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and the philosophy, policies, and practices described in this Proxy Statement. Accordingly, we ask our stockholders to vote “FOR” the following resolution at the Annual Meeting:
“RESOLVED, that the Company’s stockholders approve, on an advisory basis, the compensation of the named executive officers, as disclosed in the Company’s Proxy Statement for the 2017 Annual Meeting of Stockholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, the 2016 Summary Compensation Table, and the other related tables and disclosures.”
While the say-on-pay vote is advisory, and therefore not binding on the Company, the Board and the Compensation Committee value the opinions of our stockholders and will take into account the outcome of this vote in considering future compensation arrangements. It is expected that the next say-on-pay vote will occur at the 2018 annual meeting.
Proposals Requiring Your Vote |Proposal 3 — Advisory Vote to Approve the Frequency with which the Advisory Vote to Approve Named Executive Officer Compensation Should Be Held
Proposal 3 — Advisory Vote to Approve the Frequency with which the Advisory Vote to Approve Named Executive Officer Compensation Should Be Held
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We are asking stockholders to indicate how frequently we should seek an advisory vote on the compensation of our named executive officers (i.e., the frequency of a say-on-pay vote). This proposal is commonly known as a “say-on-frequency” proposal. Stockholders may indicate whether they would prefer an advisory vote on executive compensation every year, every two years, or every three years, or they may abstain from voting on this proposal. We have historically solicited an advisory vote on executive compensation every year, and the Board believes that continuing to hold such a vote every year is advisable for a number of reasons, including the following:
Stockholders are not voting to approve or disapprove the Board’s recommendation. Instead, you may cast your vote on your preferred voting frequency by choosing any of the following four options with respect to this proposal: “every year,” “every two years,” “every three years,” or “abstain.” For the reasons discussed above, we are asking our stockholders to vote for a frequency of “every year.”
The say-on-frequency vote is advisory and therefore not binding on the Company, the Board, or the Compensation Committee. The Board and the Compensation Committee value the opinions of our stockholders and will take into account the outcome of this vote in considering the frequency with which the advisory vote on compensation of our named executive officers will be held in the future.
Proposals Requiring Your Vote |Proposal 4 — Ratification of Appointment of Independent Auditors
Proposal 4 — Ratification of Appointment of Independent Auditors
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The Audit Committee is responsible for the appointment, compensation, retention, and oversight of the independent auditors retained to audit our consolidated financial statements. We have appointed PricewaterhouseCoopers LLP (“PwC”) as our independent auditors for the fiscal year ending December 31, 2017.2021. PwC has auditedserved as our historical consolidated financial statements for all annual periodsauditors since our incorporation in 1996.1997. In order to assure continuing auditor independence, the Audit Committee periodically considers whether there should be a regular rotation of the independent audit firm. Further, in conjunction with the mandated rotation of the independent audit firm’s lead engagement partner, the Audit Committee will continue to be directly involved in the selection and evaluation of PwC’s lead engagement partner. The Board and the Audit Committee believe that the continued retention of PwC to serve as our independent auditors is in the best interests of eBay and our stockholders. We expect that representatives of PwC will be present at the Annual Meeting, will have an opportunity to make a statement if they wish, and will be available to respond to appropriate questions.
Our Bylawsbylaws do not require the stockholders to ratify the appointment of PwC as our independent auditors. However, we are submitting the appointment of PwC to our stockholders for ratification as a matter of good corporate practice. If the stockholders do not ratify the appointment, the Audit Committee will reconsider whether or not to retain PwC. Even if the appointment is ratified, the Audit Committee, in its discretion, may change the appointment at any time during the year if it determines that such a change would be in the best interests of eBay and our stockholders.
The Board and the Audit |
38 ebay / 2021 Proxy Statement
Audit and Other Professional Fees / Audit Matters
Audit and Other Professional Fees
During the fiscal years ended December 31, 20162020 and December 31, 2015,2019, fees for services provided by PwC were as follows (in thousands):
Year Ended December 31, | ||||||||||||
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2016 | 2015 | |||||||||||
Audit Fees (1) | $ | 9,362 | $ | 15,951 | ||||||||
Audit Fees | $19,481 | $14,722 | ||||||||||
Audit-Related Fees | 1,609 | 1,447 | — | — | ||||||||
Tax Fees | 70 | 280 | 4,500 | 2,450 | ||||||||
All Other Fees (2) | 512 | 2,360 | ||||||||||
All Other Fees(1) | 588 | 596 | ||||||||||
Total | $ | 11,553 | $ | 20,038 | $24,569 | $17,768 |
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For |
“Audit Fees” consist of fees incurred for services rendered for the audit of eBay’s annual financial statements, review of financial statements included in eBay’s quarterly reports on Form 10-Q, other services normally provided in connection with statutory and regulatory filings, for attestation services related to compliance with the Sarbanes-Oxley Act of 2002, and services rendered in connection with securities offerings. “Audit-Related Fees” consist of fees incurred for due diligence procedures in connection with acquisitions and divestitures and consultation regarding financial accounting and reporting matters. “Tax Fees” consist of fees incurred for transfer pricing consulting services, tax planning and advisory services, and tax compliance services. “All Other Fees” consist of fees incurred for permitted services not included in the category descriptions provided above with respect to “Audit Fees,” “Audit-Related Fees,” and “Tax Fees,” and include fees for consulting services, compliance-related services, and software licenses, as well as the lease payments described above.
Proposals Requiring Your Vote |Proposal 4 — Ratification of Appointment of Independent Auditors
The Audit Committee has determined that the non-audit services rendered by PwC were compatible with maintaining its independence. All such non-audit services were pre-approved by the Audit Committee pursuant to the pre-approval policy set forth below.
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The Audit Committee has adopted a policy requiring the pre-approval of any non-audit engagement of PwC. In the event that we wish to engage PwC to perform accounting, technical, diligence, or other permitted services not related to the services performed by PwC as our independent registered public accounting firm, our internal finance personnel will prepare a summary of the proposed engagement, detailing the nature of the engagement, the reasons why PwC is the preferred provider of such services, and the estimated duration and cost of the engagement. This information will be provided to our Audit Committee or a designated Audit Committee member, who will evaluate whether the proposed engagement will interfere with the independence of PwC in the performance of its auditing services and decide whether the engagement will be permitted.
On an interim basis, any non-audit engagement may be presented to the Chair of the Audit Committee for approval and to the full Audit Committee at its next regularly scheduled meeting.
We have taken a number of steps to ensure continued independence of our outside auditors. Our independent auditors report directly to the Audit Committee, and we limit the use of our auditors for non-audit services. The fees for services provided by our auditors in 2019 and 2020 and our policy on pre-approval of non-audit services are described above.
www.ebayinc.com 39
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Audit Matters / Audit Committee Report
We constitute the Audit Committee of the Board. The Audit Committee’s responsibility is to provide assistance and guidance to the Board in fulfilling its oversight responsibilities to eBay’s stockholders with respect to:
· | eBay’s corporate accounting, reporting and financial controls practices; |
· | eBay’s compliance with legal and regulatory requirements; |
· | The independent auditors’ qualifications and independence; |
· | The performance of eBay’s internal audit function and independent auditors; |
· | The quality and integrity of eBay’s financial statements and reports; |
· | Reviewing and approving all audit engagement fees and terms, as well as all non-audit engagements with the independent auditors; and |
· | Producing this report. |
The Audit Committee members are not professional accountants or auditors, and these functions are not intended to replace or duplicate the activities of management or the independent auditors. Management has primary responsibility for preparing the financial statements and designing and assessing the effectiveness of internal control over financial reporting. Management and the internal auditing departmentaudit function are responsible for maintaining appropriate accounting and financial reporting principles and policies and internal controls and procedures that provide for compliance with accounting standards and applicable laws and regulations.
PwC, eBay’s independent auditors, areis responsible for planning and carrying out an audit of eBay’s financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”) and eBay’s internal control over financial reporting, expressing an opinion on the conformity of eBay’s audited financial statements with generally accepted accounting principles (“GAAP”) as well as the effectiveness of eBay’s internal control over financial reporting, reviewing eBay’s quarterly financial statements prior to the filing of each quarterly report on Form 10-Q, and other procedures.
During 20162020 and in early 2017,2021, in connection with the preparation of eBay’s Annual Report on Form 10-K for the year ended December 31, 2016,2020, and in fulfillment of our oversight responsibilities, we did the following, among other things:
· | Discussed with PwC the overall scope of and plans for their audit; |
· | Reviewed, upon completion of the audit, the financial statements to be included in the Form 10-K and management’s report on internal control over financial reporting and discussed the audited financial statements and eBay’s internal control over financial reporting with senior management; |
· | Conferred with PwC and senior management of eBay regarding the scope, adequacy, and effectiveness of internal accounting and financial reporting controls (including eBay’s internal control over financial reporting) in effect; |
· | Instructed PwC that the independent auditors are ultimately accountable to the Board and the Audit Committee, as representatives of the stockholders; |
· | Discussed with PwC, both during and after completion of their audit processes, the results of their audit, including PwC’s assessment of the quality and appropriateness, not just acceptability, of the accounting principles applied by eBay, the reasonableness of significant judgments, the nature of significant risks and exposures, the adequacy of the disclosures in the financial statements, as well as other matters required to be communicated under generally accepted auditing standards, including the matters required by applicable accounting standards; and |
· | Obtained from PwC, in connection with the audit, a timely report relating to eBay’s annual audited financial statements describing all critical accounting policies and practices used, all alternative treatments of financial information within GAAP that were discussed with management, ramifications of the use of such alternative disclosures and treatments, the treatment preferred by PwC, and any material written communications between PwC and management. |
40 Proposals Requiring Your Vote |ebay /Proposal 4 — Ratification of Appointment of Independent Auditors 2021 Proxy Statement
Audit Committee Report / Audit Matters
Our Audit Committee held nine meetings in 2016.2020. Throughout the year, we conferred with PwC, eBay’s internal audit team,function, and senior management in separate executive sessions to discuss any matters that the Audit Committee, PwC, the internal audit team,function, or senior management believed should be discussed privately with the Audit Committee. We have direct and private access to both the internal and externalindependent auditors of eBay.
We have discussed with PwC the matters required to be discussed by the statement on Auditing Standards No. 16 (Communication with Audit Committees).applicable requirements of the PCAOB and the SEC. The Audit Committee has also received the written disclosures and thea letter from PwC required by the applicable Public Company Accounting Oversight BoardPCAOB requirements for independent accountant communications with audit committees concerning auditor independence, and has discussed the independence of PwC with that firm. We have concluded that PwC’s provision to eBay and its affiliates of the non-audit services reflected under “Audit-Related Fees,” “Tax Fees,” and “All Other Fees” above is compatible with PwC’s obligation to remain independent.
We have also established procedures for the receipt, retention, and treatment of complaints received by eBay regarding accounting, internal accounting controls, or auditing matters and for the confidential anonymous submission by eBay employees of concerns regarding questionable accounting or auditing matters.
After reviewing the qualifications of the current members of the Audit Committee, and any relationships they may have with eBay that might affect their independence from eBay, the Board determined that each member of the Audit Committee meets the independence requirements of The NASDAQNasdaq Stock Market and of Section 10A of the Exchange Act, that each member is able to read and understand fundamental financial statements, and that Mr. AndersonMessrs. Swan and Traquina and Ms. Hayles each qualifies as an “audit committee financial expert” under the applicable rules promulgated pursuant to the Exchange Act. The Audit Committee operates under a written charter adopted by the Board. The current Audit Committee Charter is available on the corporate governance section of eBay’s investor relations website at https://investors.ebayinc.com/corporate-governance.cfm.corporate-governance/governance-documents/. Any future changes in the Audit Committee charter or key practicesCharter will also be reflected on the website.
Based on ourthe reviews and discussions described above, we recommended to the Board, and the Board approved, the inclusion of the audited financial statements in eBay’s Annual Report on Form 10-K for the year ended December 31, 2016,2020, which eBay filed with the SEC on February 6, 2017.4, 2021. We have also approved the appointment of PwC as our independent auditors for the fiscal year ending December 31, 2017.
AUDIT COMMITTEE2021.
Audit Committee E. Carol Hayles Matthew J. Murphy Robert H. Swan Perry M. Traquina |
Proposals Requiring Your Vote |Proposal 5 — Stockholder Proposal regarding Right to Act by Written Consent
www.ebayinc.com Proposal 5 — Stockholder Proposal regarding Right to Act by Written Consent41
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John Chevedden, whose address is 2215 Nelson Avenue, Redondo Beach, California, has advised the Company that he intends to present the following stockholder proposal at the 2017 Annual Meeting. Mr. Chevedden has indicated that he holds no fewer than 100 shares of eBay common stock.
The text of the stockholder proposal and supporting statement appear exactly as received by eBay unless otherwise noted. All statements contained in the stockholder proposal and supporting statement are the sole responsibility of the proponent. The stockholder proposal may contain assertions about the Company or other matters that we believe are incorrect, but we have not attempted to refute all of those assertions.
The stockholder proposal will be voted on at the 2017 Annual Meeting only if properly presented by or on behalf of the proponent. Adoption of this proposal requires the affirmative vote of a majority of the shares present in person or represented by proxy. Abstentions will be counted as present for purposes of this vote and therefore will have the same effect as a vote against this stockholder proposal. Broker non-votes will not be counted as present and are not entitled to vote on this proposal.
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The Board has carefully considered this proposal and does not believe that it is in the best interests of eBay and its stockholders. The Board therefore recommends a voteAGAINST this proposal.
Proposals Requiring Your Vote |Proposal 5 — Stockholder Proposal regarding Right to Act by Written Consent
eBay regularly engages with and solicits the feedback of its stockholders and is proud of its track record of responsiveness to stockholders. The Board is committed to good corporate governance and believes in maintaining policies and practices that serve the interests of all stockholders. We understand that corporate governance is not static – we monitor and evaluate trends and developments in corporate governance and compare and evaluate them against our current practices. The Board recognizes that some stockholders may view the ability to act by written consent as an important right. However, the Board believes that eBay’s existing Bylaw provision that provides stockholders with the right to call special meetings offers a transparent and equitable mechanism for stockholders to raise matters for consideration by the Company, whereas this proposal’s written consent right would enable a limited group of stockholders to act without the same required transparency to all stockholders.
The Board recommends that stockholders vote against this proposal because it believes the written consent process, as set forth in this proposal, is less transparent and less democratic than holding a stockholders meeting, and thus deprives stockholders of a forum for discussion or opportunity to ask questions about proposed actions. Matters that are so important as to require stockholder approval should be communicated in advance so they can be considered and voted upon by all stockholders. This proposal would allow a group of stockholders to take action by written consent without prior communication to all stockholders of the proposed action or reasons for the action. The Board believes that, if implemented, this proposal would disenfranchise stockholders who will not have the opportunity to participate in the process.
eBay’s stockholders have the right to call a special meeting at a twenty-five percent threshold, which is the most common threshold among S&P 500 companies that provide their stockholders with that right. This threshold is half of what would be necessary for stockholders to act by written consent under this proposal. Therefore, any coalition of stockholders proposing to act by written consent could call a special meeting. This right to call a special meeting, along with our established stockholder communication and engagement practices, provides stockholders with opportunities to raise important matters and propose actions for stockholder consideration outside the annual meeting process.
Stockholder meetings offer important protections and advantages that are absent from the written consent process under this proposal. The protections and advantages of stockholder meetings include:
In contrast, adoption of this proposal would make it possible for the holders of a bare majority of shares of eBay common stock outstanding to take significant corporate actions without any prior notice to the Company, the Board or the other eBay stockholders – actions that may have important ramifications for both eBay and its stockholders. This approach would effectively disenfranchise all of those stockholders who do not have (or are not given) the opportunity to participate in the written consent.
Proposals Requiring Your Vote |Proposal 5 — Stockholder Proposal regarding Right to Act by Written Consent
The Board also believes that eBay’s strong corporate governance practices make adoption of this proposal unnecessary. In addition to giving stockholders the right to call special meetings, eBay has many other governance provisions that protect and empower stockholders, including:
In summary, the Board believes the adoption of this proposal is unnecessary because of eBay’s commitment to good corporate governance, the right of stockholders to call special meetings and the ability of stockholders to nominate directors through proxy access. The Board also believes that this written consent proposal would circumvent the protections, procedural safeguards and advantages provided to all stockholders by stockholder meetings.
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Unless you specify otherwise, the Board intends the accompanying proxy to be voted against this item.
Our Executive Officers
Executive officers are appointed annually by the Board and serve at the discretion of the Board. Set forth below is information regarding our executive officers as of March 20, 2017.April 26, 2021.
Jamie Iannone Age: | Position: | |||||||
| President and Chief Executive Officer | Biography Mr. |
Andy Cring Age: 51 Position: Interim Chief Financial Officer Biography Mr. Cring has served eBay as Interim Chief Financial Officer since September 2019. Prior to that, he was eBay’s Vice President, Global Financial Planning, beginning in 2013. Before joining eBay, Mr. Cring was Senior Vice President for Global Financial Planning and Analysis at Yahoo! for three years and was in the Finance group at General Electric for 16 years. |
Cornelius Boone Age: 41 Position: Senior Vice President, Chief | Biography Mr. |
42 ebay / 2021 Proxy Statement
Our Executive Officers
Marie Oh Huber Age: 59 Position: Senior Vice President, Chief
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Mr. Lawton currently serves on the Board of Directors of Buffalo Wild Wings.
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| Julie Loeger Age: 57 Position: Senior Vice President, Chief | Biography Julie A. Loeger serves eBay as Senior Vice President, Chief Growth Officer. She assumed her current role in January 2021. Prior to joining eBay, Ms. Loeger spent 29 years at Discover, a financial company, most recently as Executive Vice President, President – U.S. Cards, a position she held since 2018. At Discover, Ms. Loeger held leadership positions in many areas, including Rewards, Portfolio Marketing, Acquisition, Brand Management and Product |
Pete Thompson Age: 52 Position: Senior Vice President, Chief Product Officer Biography Mr. | ||||||||
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www.ebayinc.com 43
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Message from theExecutive Compensation Committee
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In accordance with the requirements of Section 14A of the Exchange Act, we are asking stockholders to approve, on an advisory basis, the compensation of our named executive officers as described in the Compensation Discussion and Analysis, |Executive Summarycompensation tables, and related narrative discussion of such compensation included in this Proxy Statement.
As discussed in the Compensation Discussion and Analysis,
Following the 2015 Spin-Off of PayPal, we conducted an extensive reviewCompensation Committee of the Company’s compensation philosophy andBoard is committed to an executive compensation program for 2016 to determine whether they continued to be properlythat is aligned with our business goals, culture, and importantly, stockholder interests. FollowingWe believe a competitive compensation program that is highly performance-based is key to delivering long-term stockholder returns.
The Compensation Committee believes that the goals of our executive compensation program are appropriate and that the program is properly structured to achieve those goals, particularly in light of our annual evaluation of, and periodic refinements to the program. We have engaged in ongoing discussions with our investors, who generally support those goals and the program, and we believe our stockholders as a whole should support them as well.
We are asking our stockholders to indicate their support for the compensation of our named executive officers as described in this review,Proxy Statement. This proposal, commonly known as a “say-on-pay” proposal, gives our stockholders the opportunity to express their views on the compensation of our named executive officers. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and the philosophy, policies, and practices described in this Proxy Statement. Accordingly, we ask our stockholders to vote “FOR” the following resolution at the Annual Meeting:
“RESOLVED, that the Company’s stockholders approve, on an advisory basis, the compensation of the named executive officers, as disclosed in the Company’s Proxy Statement for the 2021 Annual Meeting of Stockholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, the 2020 Summary Compensation Table, and the other related tables and disclosures.”
While the say-on-pay vote is advisory, and therefore not binding on the Company, the Board and the Compensation Committee value the opinions of our stockholders and will take into account the outcome of this vote in considering future compensation arrangements. It is expected that the next say-on-pay vote will occur at the 2022 Annual Meeting.
The Board recommends a vote FOR this proposal. |
44 ebay / 2021 Proxy Statement
Compensation Discussion and Analysis / Executive Compensation
Compensation Discussion and Analysis
This Compensation Discussion and Analysis describes the compensation of our CEO remained committed“named executive officers” (“NEOs”) for 2020:
Jamie Iannone, President and Chief Executive Officer (“CEO”)(1) Andrew J. Cring, Interim Chief Financial Officer (“Interim CFO”) Jae Hyun Lee, Senior Vice President, International Peter B. Thompson, Senior Vice President, Chief Product Officer Kristin A. Yetto, Senior Vice President, Chief People Officer(2) Scott F. Schenkel, former Interim Chief Executive Officer (“Interim CEO”)(3) Wendy Jones, former Senior Vice President, Global Operations(4) |
(1) | Mr. Iannone was appointed by the Board of Directors in April 2020. |
(2) | Ms. Yetto stepped down from her role in January 2021 and then served as a senior advisor until March 2021. |
(3) | Mr. Schenkel served as the Interim CEO from September 2019 until April 2020 and after such time, served as a senior advisor to Mr. Iannone until June 2020. Prior to serving as Interim CEO, Mr. Schenkel was our CFO. |
(4) | Ms. Jones departed the Company in December 2020. |
Executive Summary
Within our existing executive compensation program, which is designedwe strive to align with our business goals and culture, serves the long-term interests of our stockholders and is highly performance based.our executives. We also believe in creating incentives that reflect our pay-for-performance driven executivephilosophy, both in periods of success and during years where our financial performance falls short of our targets. In our view, our compensation program ensurespractices, including incentive compensation, play an important role in reinforcing our performance-driven culture. 2020 was an extraordinary year with the global pandemic influencing changes in consumer behavior that positively impacted the e-commerce market. Due in large part to the strategies of and execution by our executives’ compensation is tied to delivering results that supportmanagement team, the Company’s business strategyCompany seized this opportunity and objectives.significantly exceeded short-term and long-term financial performance targets. Notable achievements of the management team in 2020 include:
· | Designed and implemented eBay’s $100+ million response to COVID-19 to support our employees, customers and communities |
| · | Responded to intense consumer demand, delivering our highest site availability in the last six years while more than 100 days in 2020 exceeded peak 2019 traffic levels |
· | Drove remarkable results in our portfolio review, including the sale of StubHub to viagogo and the agreement to transfer eBay Classifieds to Adevinta |
· | Enabled more GMV growth in 2020 than during the prior seven years combined, delivering 17% growth for the year for a total of $100 billion |
· | Despite the unprecedented operating environment, continued to execute against key growth strategies, keeping our Managed Payments and Advertising initiatives on-track to drive revenue growth that outpaced GMV (19% revenue growth for the year) |
Consistent with our pay-for-performance philosophy, our incentive compensation programs rewarded our NEOs for this success. As discussed in more detail below, payouts for our 2019-2020 long-term, performance-based equity program and 2020 annual cash incentive plan were above target. These payouts correlate with shareholder value creation, with the price of eBay stock appreciating significantly during 2020, as well as over the course of the 2019-2020 performance cycle.
www.ebayinc.com 45
Executive Compensation / Compensation Discussion and Analysis
CEO Transition
Following the departure of our prior CEO, an independent committee of the Board led the search to identify the right candidate to lead the Company’s next chapter of growth and success, which concluded with the appointment of new CEO, Jamie Iannone, in April 2020. Mr. Iannone’s new-hire compensation package includes customary elements of our compensation program (salary, annual cash incentive and target long-term equity incentives), as well as one-time, transition compensation components. Notably, a significant portion of Mr. Iannone’s one-time, new-hire equity was granted in the form of total shareholder return performance stock units (“TSR PSUs”). For details of Mr. Iannone’s 2020 compensation, please see 2020 NEO Target Compensation – Determining 2020 Compensation for Our New CEO.
Prior to Mr. Iannone being named CEO, Mr. Schenkel (previously our CFO) served as Interim CEO starting in September 2019. For discussion of the Board’s determinations regarding Mr. Schenkel’s 2020 compensation as Interim CEO, please see 2020 NEO Target Compensation – Target Value of Equity Awards, Target Cash Incentive Award, and Salary for Other NEOs.
Following a period of transition, during which time Mr. Schenkel served in a Senior Advisor capacity, the Company provided Mr. Schenkel with severance contractually required by his offer letter agreement, which we entered into with Mr. Schenkel in 2014 when he became our CFO at the time of our separation for PayPal Holdings, Inc. We discuss the terms of Mr. Schenkel’s severance arrangement below in Severance and Change in Control Arrangements with Executive Officers and Clawbacks. As discussed below under Compensation Program Updates, in connection with Mr. Iannone’s appointment, we amended the Company’s SVP and Above Standard Severance Plan (“Standard Severance Plan”) to include our CEO.
Compensation Program Updates
During a period of evolution, including leadership transitions, our compensation plans provided flexibility to make decisions to address the changes in our business. Consistent with best practices, we continue to evaluate plan designs annually to determine their appropriateness.
PBRSUs. For the 2020-2021 PBRSU performance cycle, the Compensation Committee removed the modifier related to our Managed Payments initiative (“Payments Modifier”) from the design of performance-based restricted stock units (“PBRSUs”). When we included the Payments Modifier, we intended this change to be temporary. Now that the Managed Payments initiative has launched, we believe that there is no need to retain the Payments Modifier because continued growth related to the initiative will be measured in the other performance metrics retained in our incentive programs. A consequence of the removal of the Payments Modifier is that the maximum payout of the 2020-2021 PBRSU performance cycle is 240% compared to 330% for the 2019-2020 PBRSU performance cycle that included the Payments Modifier.
Severance Arrangements. In connection with Mr. Iannone joining eBay, the Compensation Committee added the CEO position as a participant under our Standard Severance Plan. Following a transition period, upon a qualifying separation event, the treatment of Mr. Iannone’s outstanding equity awards would be determined pursuant to the Standard Severance Plan, which significantly reduces the percentage of outstanding equity awards that would vest compared to the arrangements the Company had with Mr. Schenkel and our prior CEO.
ESG Performance Goals. N E W Beginning in 2021, the qualitative assessment of individual performance within our annual cash incentive plan (“eIP”), which accounts for 25% of the incentive opportunity for our NEOs, will include sustainability and Diversity, Equity and Inclusion factors. This change follows our new CEO’s initiative to influence a collective recommitment to our DNA and creates a meaningful incentive for our NEOs to inspire employees to live our Beliefs of empowering our community, innovating boldly, delivering with impact, being for everyone and acting with integrity.
Our Compensation Program
The goalsobjectives of our executive compensation program are to:
ü | align compensation with our business objectives, performance and stockholder interests, |
ü | motivate executive officers to enhance short-term results and long-term stockholder value, |
ü | position us competitively among the companies against which we recruit and compete for talent, and |
ü | enable us to attract, reward and retain executive officers and other key employees who contribute to our long-term success. |
46 motivateebay / executive officers to enhance short-term results 2021 Proxy Statement
Compensation Discussion and long-term stockholder value,
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We achieve these objectives primarily by employing the followingcore elements of pay for our executive officers:compensation programs as illustrated in the graphic below.
Executive Compensation Program Components Long-term Equity Incentives include our RSU and PBRSU programs which align executive incentives with the long-term interests of our stockholders Time-based Restricted Stock Units (RSUs) promote retention since executives must remain with the Company in order to enjoy the growth in equity value Performance-based Restricted Stock Units (PBRSUs) hold executives accountable for the long-term performance of the Company and time-based vesting at the end of the performance period focuses the executive on stock performance Annual Cash Incentive (eIP) aligns executive compensation
How We Pay Our CEO
The following graphics illustrate the predominance of equity incentives and performance-based components in Mr. Iannone’s 2020 target pay mix in our core compensation program. In addition to annual and long-term incentives in line with our core compensation program, in 2020, Mr. Iannone also received the one-time, new-hire compensation as outlined below in 2020 NEO Target Compensation – Determining 2020 Compensation for Our New CEO. These one-time, new-hire components are not reflected in the graphics below.
Base Salary Annual Cash 7% 32% 13% 48% Incentive (eIP) Mr. Iannone’s compensation is highly weighted to Company performance. Over 93% of his compensation is based on Company performance goals or is otherwise at-risk based on the price of Company stock. RSUs PBRSUs 61% Performance-Based
2020 Target Compensation (USD$ in thousands) | |
Base Salary | 1,000 |
Annual Cash Incentive (eIP) | 2,000* |
Equity Awards | 12,000 |
* Mr. Iannone’s offer letter agreement provided for a minimum 2020 eIP payout of $1,500,000.
www.ebayinc.com 47
OurExecutive Compensation / Compensation Discussion and Analysis
Incentive Compensation Correlates with Performance
In 2020, we continued to compensate our executive officers also participate in our broad-based retirement savings and benefit programs and receive limited perquisites.
For 2016, we chose to continue to useusing a mix of equity and cash compensation vehicles to compensate our executive officers. We also decided to increase the weight of performance-based restricted stock units (“PBRSUs”) and eliminate the use of stock options.vehicles. Our incentive compensation is dependent ontied to financial targets that the Compensation Committee believes correlate with operating performance over one- and multi-year performance periods and long-term stock performance. Performance targets are generally set in a manner consistent with the current year budget and multi-year strategic plan.
Plan | Performance Metrics | Compensation Committee Rationale |
Annual Cash Incentive (eIP) | ·FX-neutral revenue (threshold) ·Non-GAAP net income ·Individual performance | ·A minimum revenue threshold must be met before any incentive is paid ·Non-GAAP net income is directly affected by management decisions and provides the most widely followed measure of financial performance |
PBRSUs | ·FX-neutral revenue ·Non-GAAP operating margin dollars ·ROIC Modifier ·Payments Modifier (for 2019-2020 cycle) | ·Key drivers of our long-term success and stockholder value, and directly affected by management decisions ·Incentivizes profitable growth and efficient use of capital ·Incentivizes achievement of establishment and acceleration of payments intermediation |
38Annual Cash Incentive Plan Financial Goals and Plan Performance
The following graphs show the goals and results achieved for the 2020 performance period under the financial component of our eIP, which accounted for 75% of our NEOs’ award opportunities. In 2020, the eIP’s financial performance goals were adjusted to exclude the impacts of the StubHub business that was sold to viagogo in February 2020 and for the eBay Classifieds business, which we agreed to transfer to Adevinta in July 2020, as both business were classified as discontinued operations in our financial statements during 2020.
Threshold FX-neutral revenue (threshold) ($ billions) $8.011B $10.271B Non-GAAP net income ($ billions) Threshold Target Maximum $2.452B $1.700B $1.790B $1.933B
2020 eIP Financial Results
As discussed above, driven by the impacts of the pandemic and management performance, the Company dramatically exceeded financial expectations in 2020. FX-Neutral revenue surpassed the threshold requirement of the eIP by more than $2 billion, and Non-GAAP net income performance was more than 25% greater than the maximum performance hurdle. As a result, the financial component of the eIP paid out at 200% of target.
Historical eIP Payouts
The graphic below shows the payouts (as a percentage of target award values) for the financial component of the eIP for the prior three plan years. eIP payouts have remained tightly correlated to performance. Specifically, in 2018, the eIP financial component paid out at 78% when the FX-neutral revenue threshold was achieved and non-GAAP net income was below target. In both 2017 and 2019, the eIP financial component paid out at 122% when the FX-neutral revenue thresholds and non-GAAP net income targets were exceeded.
Average payout for 2019 122% prior three 2018 78% years 107% 2017 122%
48 ebay / 2021 Proxy Statement
Compensation Discussion and Analysis |/ Executive SummaryCompensation
PBRSU Financial Goals and Performance
The following graphs show the goals and results achieved for the 2019-2020 performance period, which were used to calculate the performance vesting of PBRSUs at the end of the two-year performance period. Like the eIP performance goals, the PBRSU performance goals were adjusted to exclude the StubHub and eBay Classifieds businesses.
$20.76B $20.16B $18.7B $21.10B FX-neutral revenue ($ billions) Threshold Target Maximum $6.37B Non-GAAP operating margin dollars ($ billions) 24.6% Return on invested capital (modifier) (%) 17% 21.7% 26% $5.6B $5.90B $6.37B Payments Modifier -40pts 45pts >+45pts
2019-2020 PBRSU Financial Results
The Company’s financial performance dramatically exceeded expectations over the course of the 2019-2020 PBRSU performance period. Both FX-neutral revenue and Non-GAAP operating margin surpassed the maximum performance levels required by the Compensation Committee to earn the maximum 200% base payout. In addition, performance relative to the measures for both the return on invested capital modifier and the Payments Modifier yielded upward adjustments to the base payout percentage. As a result, the final payout percentage for this cycle of PBRSUs was 316% of the target awards.
Please note that due to transitions in our senior management team in 2020, not all NEOs received a 316% payout with respect to the 2019-2020 PBRSU cycle. Mr. Iannone joined the Company in 2020 and therefore did not receive an award of 2019-2020 PBRSUs. Because PBRSUs are only awarded to Senior Vice Presidents and above, Mr. Cring as a Vice President of the Company does not participate in the PBRSU program. Pursuant to Mr. Schenkel’s severance arrangement, he received cash compensation for the target value of his 2019-2020 PBRSUs. Pursuant to our Standard Severance Plan, Ms. Jones received cash compensation equal to half of her 2019-2020 PBRSUs payout, and the other half was forfeited under time-vesting restrictions.
Historical PBRSU Payouts
Throughout the history of the PBRSU program, payouts have remained tightly correlated to performance. The graphic below shows the payouts for the three PBRSU cycles prior to the recently completed 2019-2020 PBRSU cycle, specifically a 117% payout for the 2016-2017 PBRSU cycle when both target FX-neutral revenue and non-GAAP operating margin target goals were exceeded, and 86% payouts for the 2017-2018 and 2018-2019 cycles when the Company fell short of both target goals.
Average payout for 2018-2019 86% three prior 2017-2018 86% cycles 2016-2017 117% 96%
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Executive Compensation / Compensation Discussion and Analysis
Say-on-Pay Results and Stockholder Engagement
In 2020, our stockholders once again overwhelmingly approved our executive compensation program through the “say-on-pay” vote, with approximately 88% of the votes cast in favor. This is in line with the high stockholder support our executive compensation program received in both 2019 and 2018, each time with 90% or more of the votes cast in favor of the program. |
Say-on-Pay 88% 2020 2019 2018 88% 90% 93%
We regularly review the Company’s compensation philosophy and executive compensation program to assess whether they continue to be properly aligned with our business goals, culture and, importantly, stockholder interests. We also engage with our stockholders at least twice a year to solicit feedback on our compensation philosophy and executive compensation program. In 2020, the Compensation Committee reviewed our programs on three occasions, including at our March meeting in connection with the appointment of Mr. Iannone. After conducting these reviews and considering the feedback received from stockholders, we determined that the Company’s executive compensation philosophy, compensation objectives, and overall program continue to be appropriate. With the introduction of the modifications approved during 2020 and 2021 (described above), the Compensation Committee determined that the core elements of our executive compensation program should remain in place for 2021.
Our Compensation Practices
We believe our compensation practices align with and support the goals of our executive compensation program and demonstrate our commitment to sound compensation and governance practices.
What We Do | What We Don’t Do |
ü Align executive compensation with the interests of our stockholders · Pay-for-performance emphasized ·Majority of total compensation comprises performance-based compensation ·Equity/cash compensation ratio significantly favors equity · Meaningful stock ownership requirements ü Avoid excessive risk-taking ·Robust clawback policy ·Multiple performance measures, caps on incentive payments, and overlapping two-year performance periods for PBRSU awards ü Adhere to compensation best practices ·Compensation benchmarked at or around the 50th percentile of peer group ·Independent compensation consultant engaged ·Limited perquisites for executive officers that are not available to all employees | No tax gross-ups for change in control benefits No automatic “single- trigger” acceleration of equity awards upon a change in control No repricing or buyout of underwater stock options without stockholder approval No hedging and pledging transactions |
CD&A Roadmap
Our Compensation Discussion and Analysis is presented as follows:
1 | Elements of Our Executive Compensation Program provides a description of our executive compensation practices, programs, and processes. |
2 | 2020 NEO Target Compensation discusses how we determine the mix of the elements in our compensation program to achieve our total target compensation. |
3 | 2020 Compensation Design and Determinations explains executive compensation decisions relating to the performance-based pay of our executive officers in 2020. |
4 | Further Considerations for Setting Executive Compensation discusses the role of the Company’s compensation consultant, peer group considerations, and the impact of accounting and tax requirements on compensation. |
5 | Severance and Change in Control Arrangements with Executive Officers and Clawbacks discusses the Company’s severance and change in control plans and other arrangements with executive officers. |
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Compensation Discussion and Analysis / Executive Compensation
Elements of Our Executive Compensation Program |
The following chart showsprovides a summary of the breakdowncore elements of 2016our 2020 executive compensation program.
Cash Short-Term Incentives Long-Term Incentives (Equity) Compensation Elements Performance Metrics Performance and Vesting Periods Why We Pay Base Salary o Assessment and Target Positioning Strategy o N/A o Rewards executives’ current contributions to the Company o Reflects the scope of executives’ roles and responsibilities Annual Cash Incentive Awards Threshold company performance measures: o FX-neutral revenue (threshold) o Non-GAAP net income (threshold) If BOTH thresholds are met, then payout based on o Total non-GAAP net income (75%) o Individual performance (25%) o Annual o Aligns executive compensation with annual Company and individual performance o Motivates executives to enhance annual results Equity Incentive Awards Time-based RSUs: o Time-based vesting only PBRSUs: o FX-neutral revenue o Non-GAAP operating margin dollars o Return on invested capital modifier o Payments modifier (for 2019-2020 PBRSU performance period) TSR PSUs (for Mr. Iannone only): o Total Shareholder Return relative to S&P 500 Time-based RSUs: o Quarterly vesting over a four-year period subject to continued employment PBRSUs: o For CEO and CFO: 100% PBRSU awards granted will vest more than 14 months following the end of the applicable two-year performance o For other NEOs: One-half of the PBRSUs vest in March following the end of the applicable performance period, and the other half of the award vests in March of the following year, more than 14 months following the completion of the performance period o Half earned over a two-year performance period and the other half earned over a three-year performance period o Aligns executive incentives with the long-term interests of our stockholders o Positions award guidelines at target level with the median of the market levels paid to peer group executives o Recognizes individual executive’s recent performance and potential future contributions o Retains executives for the long term o Provides a total compensation opportunity with payouts varying based on our operating and stock price performance o Directly links Mr. Iannone’s performance over two and three-year periods to the creation of stockholder value
We chose a mix of equity and cash compensation vehicles to compensate executive officers based on sustainable long-term value drivers of Company performance over one- and multi-year periods and individual contributions to the Company.
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Executive Compensation / Compensation Discussion and Analysis
Our executive officers were also eligible to receive a comprehensive set of benefits:
· | health and welfare benefits plans; |
· | employee stock purchase plan; |
· | limited personal use of the corporate airplane (CEO and CFO only; with reimbursement required by the CFO and voluntarily provided by the CEO); |
· | broad-based 401(k) retirement savings plan and a VP and above deferred compensation plan (each plan is available to U.S.-based employees only); and |
· | certain other limited perquisites (such as IT and security services for our CEO). |
We provide certain executive officers with limited perquisites and other personal benefits not available to all employees that we believe are reasonable and consistent with our overall compensation program and philosophy. These benefits are provided to enable the Company to attract and retain these executive officers. We periodically review the levels of these benefits provided to our executive officers.
The Compensation Committee encouraged Mr. Iannone (and Mr. Schenkel in the interim CEO position) to use the corporate airplane for personal travel to reduce possible security concerns. The Company does not grant bonuses to cover, reimburse, or otherwise “gross-up” any income tax owed for personal travel on the corporate airplane.
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Compensation Discussion and Analysis / Executive Compensation
2020 NEO Target Compensation |
When making compensation decisions for our CEO, Devin Wenig,NEOs, the Compensation Committee evaluated each individual based on his or her leadership, competencies, innovation, and illustratesboth past and expected future contributions toward the predominance of equity incentivesCompany’s financial, strategic, and performance-based componentsother priorities. The Company’s performance was reflected in our executive compensation program.
DEVIN WENIGprogram, holding leadership accountable for Company performance.
Long-Term Equity Incentive Compensation
The value of annual equity awards is determined within guidance that the Compensation Committee reviews on an annual basis for each position. This guidance is based on our desired pay positioning relative to companies with which we compete for talent. The midpoint of the guidance, or the median target award, reflects the 50th percentile of the competitive market.
In 2020, the Compensation Committee reviewed equity award guidance by position based on the following:
· | equity compensation practices of technology companies in our peer group, as disclosed in their public filings (see page 65 for our 2020 peer group), and |
| · | equity compensation practices for comparable technology companies that are included in proprietary third-party surveys. |
As discussed
The Compensation Committee is also cognizant of dilution of our shareholders resulting from equity compensation, and it carefully considers share usage each year and sets an upper limit on the number of shares that can be used for equity compensation, including awards to executive officers and the overall employee population.
Each executive officer’s individual contribution and impact, projected level of contribution and impact in the future, and competitive positioning are considered using a score card when determining individual awards. The score card evaluates each executive with respect to factors, including business unit performance (or in the case of our CEO, Company performance), organizational development, and strategic and operational excellence. The retention value of current year awards and the total value of unvested equity from previous awards are also considered.
Based on CEO assessments and the score card evaluation, the Compensation Committee approved individual compensation arrangements for each NEO based on the factors and guidelines described above and in this section.
Annual Cash Incentive Compensation
The Compensation Committee also assesses annual cash incentive award opportunities against data from public filings of our peer group companies and general industry data for comparable technology companies that are included in proprietary third-party surveys, and it approves target annual cash incentive opportunities for our NEOs at approximately the 50th percentile based on that data. The Compensation Committee reviews market data annually, and periodically adjusts incentive opportunities to the extent necessary where our practices are inconsistent with such market data.
Base Salary
The Compensation Committee reviews market data annually and approves each executive officer’s base salary for the year. Increases, if any, generally become effective on or around April 1st of the year. We assess competitive market data on base salaries from public filings of our peer group companies and general industry data for comparable technology companies that are included in proprietary third-party surveys. When considering the competitive market data, we also recognize that the data is historical and does not necessarily reflect those companies’ current pay practices. We assess each executive officer’s base salary against the 50th percentile of the salaries paid to comparable executives at peer group companies and also consider individual performance, levels of responsibility, expertise, and prior experience in our evaluation of base salary adjustments.
Determining 2020 Compensation for Our New CEO
In 2020, we appointed our new CEO, Jamie Iannone, to lead the Company’s next chapter of growth and success. The Compensation Committee focused on developing a compelling compensation arrangement for Mr. Iannone that is consistent with our pay for performance philosophy and that would reward Mr. Iannone for creating shareholder value in both the short and long term. The Compensation Committee considered many factors in setting the various components of Mr. Iannone’s new- hire compensation arrangements, including the belief that Mr. Iannone’s track record of innovation, execution, and operational excellence would drive Company performance.
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Executive Compensation / Compensation Discussion and Analysis
Mr. Iannone’s 2020 compensation package includes customary elements of our compensation program (salary, annual cash incentive and $12,000,000 in equity incentives consisting of 40% RSUs and 60% PBRSUs). In addition, Mr. Iannone’s 2020 compensation package includes transition compensation components, including $5,000,000 in cash compensation (paid over two years) and $11,000,000 in equity awards. These components were designed to entice Mr. Iannone to join eBay, to deliver take-home compensation in the first years of Mr. Iannone’s tenure approximating that of a CEO in our peer group and to compensate for value he forfeited when leaving his prior employer. RSUs represent $6,500,000 of Mr. Iannone’s transition equity and, notably, $4,500,000 was granted in the form of TSR PSUs. The TSR PSUs are a new form of award designed specifically for Mr. Iannone to provide a strong incentive based on performance goals relating to eBay’s total shareholder return performance relative to that of the S&P 500 index. We discuss the design of each of these compensation elements in more detail below under 2020 Incentive Compensation Design and Determinations.
The graphic below details Mr. Iannone’s target annual compensation for 2020 without regard to the one-time, transition equity or cash awards.
Name | 2020 Base Salary | Year- ($) | 2020 Target | Year-Over- Award ($) | 2020 Target Value of ($) | Year-Over- |
Mr. Iannone | $1,000,000 | N/A | 200% | N/A | $12,000,000 | N/A |
Target Value of Equity Awards, Target Cash Incentive Award, and Salary for Other NEOs
The Compensation Committee considered many factors in approving the various components of the other NEOs’ compensation, including those set forth below, using a score card as described above. In evaluating performance against these factors, the Compensation Committee assigned no specific weighting to any one of the factors, instead evaluating individual performance in a holistic manner:
· | Performance against target financial results for the NEO’s business unit or function |
· | Defining business unit or function strategy and executing against relevant goals |
· | Recognition of the interconnection between the eBay business units and functions and the degree to which the NEO supported and drove the success of other business units or functions and the overall business |
· | Driving innovation and execution for the business unit or function |
· | Organization development, including hiring, developing, and retaining the senior leadership team of the business unit or function |
· | Achievement of strategic or operational objectives, including control of costs in an environmentally and socially responsible manner |
The Compensation Committee reviewed and approved the target value of equity awards, target annual cash incentive award, and salary for our NEOs based on available market data as well as Company and individual performance.
With the Board’s appointment of Mr. Schenkel to the Interim CEO role and Mr. Cring to the Interim CFO role, the Compensation Committee focused on incentivizing them for leading the Company during the transition while remaining committed to the philosophy of tying compensation to Company performance. With respect to Mr. Schenkel and Mr. Cring, starting in October 2019, we implemented a special pay structure in the form of monthly performance bonuses designed to align their cash compensation to their interim roles ($125,000 for Mr. Schenkel and $70,000 for Mr. Cring).
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Compensation Discussion and Analysis / Executive Compensation
The Compensation Committee limits the use of out-of-cycle compensation for executive officers to extraordinary circumstances only. In recognition of Mr. Cring serving as interim CFO for the full 2020 fiscal year, the Compensation Committee approved an adjustment to the amount of the monthly performance bonuses for 2020 to recognize the actual Company and individual performance under the eIP. The adjustment to the 2020 monthly performance bonuses was a one-time payment of $432,000.
The following table shows target compensation for our NEOs other than Mr. Iannone:
Name | 2020 Annual Base Salary | Year- ($) | 2020 Target Award | Year-Over- Year Change for Target Annual Cash Incentive Award ($) | 2020 Target Value of ($) | Year-Over- Year Change for Target Value of Equity Awards ($) | ||||||||||||||||
Mr. Cring | $ | 455,000 | (1) | 3.4% | 55% | No Change | $ | 2,500,000 | (2) | 79% | (3) | |||||||||||
Mr. Lee | $ | 692,550 | (4) | 2.6% | 75% | No Change | $ | 5,500,000 | (5) | 29% | ||||||||||||
Mr. Thompson | $ | 645,000 | 3.2% | 65% | No Change | $ | 5,000,000 | (5) | 25% | (6) | ||||||||||||
Ms. Yetto | $ | 695,000 | 3.0% | 75% | No Change | $ | 4,500,000 | (5) | 50% | (7) | ||||||||||||
Mr. Schenkel | $ | 750,000 | (1) | No Change | 100% | No Change | $ | 10,000,000 | (5)(8) | 83% | ||||||||||||
Ms. Jones | $ | 620,000 | 3.3% | 75% | No Change | $ | 3,500,000 | (5) | 66% |
(1) | Does not include monthly performance bonuses. |
(2) | Reflects 100% RSUs since Mr. Cring is not eligible for the PBRSU program due to his position as a VP. |
(3) | In 2019. Mr. Cring received a supplemental grant of RSUs in the amount of $3,000,000 in recognition of the additional responsibilities of the Interim CFO position. The year over year value increase does not reflect this one-time award in 2019. |
(4) | Mr. Lee’s base salary is reported in U.S. dollars on an FX-neutral basis. |
(5) | For the PBRSU portion of the award, if performance targets are met, 50% of the achieved portion of the award will vest on March 15, 2021 and the remaining 50% of the achieved portion of the award will vest on March 15, 2022. |
(6) | In 2019, Mr. Thompson received a new hire grant of RSUs in the amount of $4,000,000 that was a one-time award, in addition to his target Annual award of $4,000,000. The year over year value increase does not reflect this one-time award in 2019. |
(7) | In 2019. Ms. Yetto received a supplemental grant of PBRSUs in the amount of $1,500,000 and supplemental grant of RSUs in the amount of $1,500,000 to recognize the critical nature of the Chief People Officer role. The year over year value increase does not reflect these one-time awards in 2019. |
(8) | In 2019. Mr. Schenkel received a supplemental grant of PBRSUs in the amount of $4,000,000 and RSUs in the amount of $4,000,000 in recognition of the additional responsibilities of the Interim CEO position. The year over year value increase does not reflect these one-time awards in 2019. |
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Executive Compensation / Compensation Discussion and Analysis
2020 Compensation Design and Determinations |
Our executive compensation program is highly performance-based, with payouts for elements under the performance-based program dependent on meeting financial and operational targets over one- and multi-yeardesignated performance periods. For 2016,2020, we selected financial metrics and targets that the Compensation Committee believes incentivize our management team to achieve our strategic objectives and drive the Company’s financial performance and long-term stock performance, including FX-neutral revenue, non-GAAP operating margin dollars, return on invested capital, payment intermediation usage and non-GAAP net income.
In 2016, we made great progress against our key strategic priorities to drive the best choice, the most relevance, and the most powerful selling platform. To drive the best choice
New-Hire Compensation Design for our consumers, we actively managed inventory, marketed around key retail moments, and launched integrations with partners to help enable small- and medium-sized merchants scale their businesses on eBay. We developed and began to roll out new consumer experiences to deliver a relevant shopping experience that is built on our structured data re-platforming effort. We also made a number of platform improvements that are designed to build the most powerful selling platform, including launching our Seller Hub product, releasing a revamped set of seller APIs, and improving our listing flows.Mr. Iannone
The following charts showCompensation Committee was deliberate in the Company’s 2016 financial resultscreation of a new-hire compensation arrangement that impactedwould reward Mr. Iannone for creating shareholder value. In addition to the Company’s executivecore elements of our compensation program.
2015-2016 Performance-Based Restricted Stock Unit (“PBRSU”) Program
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program, the Compensation Discussion and Analysis |Executive Summary
2016 Annual Cash Incentive Award (the eBay Incentive Plan (eIP))
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We believe our compensation practices align with and support the goals of our executive compensation program and demonstrate our commitmentone-time, transition awards to sound compensation and governance practices.
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Compensation Discussion and Analysis |IntroductionMr. Iannone:
IntroductionTSR PSUs.
This Compensation DiscussionA TSR PSU award was granted valued at a target value of $4,500,000, 50% of which may be earned over a two- year performance period and Analysis is presented as follows:
This Compensation Discussion and Analysis describes the compensation of our “named executive officers” (“NEOs”) for 2016:
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We conducted an extensive review of the Company’s compensation philosophyS&P 500 index and executive compensation program for 2016 to assess whether theyMr. Iannone’s continued to be properly aligned with our business goals, culture and, importantly, stockholder interests. After conducting this review and considering the feedback received during the Company’s regular engagement with stockholders by management of the Company and members of the Board, we determined that the Company’s executive compensation philosophy, compensation objectives, and overall program continued to be appropriate. In addition, we decided to increase the weight of PBRSUs and eliminate stock options from the mix of equity for our executive officers.
In 2016, our stockholders once again overwhelmingly approved our executive compensation programemployment through the “say on pay” vote, with 93%end of the votes cast in favor. As a result, the Compensation Committee did not make any specific changeseach performance period. The number of TSR PSUs earned will be equal to the Company’s executive compensation program in responsetarget number of TSR PSUs granted multiplied by the applicable vesting percentage correlated to the 2016 “say on pay” vote.
➊ Elements of Our Executive Compensation Program
The goals of our executive compensation program are to:
To achieve these goals, we have three principal components of our executive compensation program: equity compensation, an annual cash incentive, and base salary. We seek to ensure that total compensation for our executive officersthe measurement period is heavily weighted to variable, performance-based compensation by delivering a majority of compensation inbelow the form of PBRSUs and annual cash incentives.
Compensation Discussion and Analysis |Elements of Our Executive Compensation Program
The Compensation Dashboard below provides a snapshot of the key elements of our 2016 executive compensation program and describes why each element is provided. Additional information about these key elements is included in the sections following the dashboard.
COMPENSATION DASHBOARD
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We chose a mix of equity and cash compensation vehicles to compensate executive officers based on long-term value drivers of Company performance over one- and multi-year periods and individual contributions to the Company. Our executive officers also were eligible to participate in our broad-based retirement savings (which include a 401(k) program open to all employees in the United States and an unmatched deferred compensation program available to vice presidents and above in the United States) and benefit programs and received limited perquisites.
Compensation Discussion and Analysis |Elements of Our Executive Compensation Programthreshold level specified below.
Performance Levels | Relative TSR Percentile | Applicable Vesting Percentage |
| Below 25th | 0% |
Threshold | 25th | 50% |
Target | 50th | 100% |
Maximum | 75th or above | 200% |
Beginning in 2016, we decided
RSUs. An RSU award was granted at a value of $6,500,000. This RSU award vests over two years, 50% on the first anniversary of the date of grant and 50% on the second anniversary of the date of grant, subject to increaseMr. Iannone’s continued employment.
New-Hire Cash. The Company paid a 2020 equity transition/buyout payment of $3,500,000, subject to repayment upon Mr. Iannone’s termination of employment for cause or resignation other than for good reason within one year after his hire. On the weightfirst anniversary of PBRSUs and eliminate stock options fromMr. Iannone’s hire date, the mixCompany will pay an equity transition/bonus payment of equity$1,500,000, subject to repayment upon Mr. Iannone’s termination of employment for our executive officers.cause or resignation other than for good reason prior to the second anniversary of his hire date, less 1/24th for every full month of active employment following his hire date.
For 2016, once the valuediscussion of the Compensation Committee’s determinations in granting these awards, please see 2020 NEO Target Compensation – Determining 2020 Compensation for Our New CEO above.
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Compensation Discussion and Analysis / Executive Compensation
2020 Long-Term Equity Incentive Awards
In 2020, our NEOs received equity-related compensation as part of the Company’s standard annual equity incentive awards has been set for each executive officer,award. In general, the formula used to allocate the annual target equity awards is as follows:
Annual Equity Awards: Value
The value of annual equity awards is determined within guidelines that the Compensation Committee approves on an annual basis for each position. These guidelines are based on our desired pay positioning relative to companies with which we compete for talent. The midpoint of the guidelines, or the median target award, reflects the 50th percentile of the competitive market.
In 2016, the Compensation Committee approved equity award guidelines by position based on the following:60% PBRSUs 40% Time-based RSUs
The Compensation Committee is also cognizant of dilution resulting from equity compensation, and so it carefully considers share usage each year and sets an upper limit on the number of shares that can be used for equity compensation, including awards to executive officers and the overall employee population.Time-based RSUs
Each executive officer’s individual contribution and impact, projected levelofficer receives a portion of contribution and impact inhis or her annual equity award as a grant of RSUs that vest on a quarterly basis over a four-year period subject to continued employment. For newly hired executive officers, 25% of the future, and competitive positioning are considered when determining individual awards. The retention valueinitial grant of current year awardsRSUs vest on the first anniversary of the date of grant and the total value of unvested equity from previous awards are also considered. The individual awards can be higher or lower thanremainder vest on a quarterly schedule. This vesting schedule is aligned with market practice and helps enable the median target award by an amount ranging from zeroCompany to three times the median target award. The Compensation Committee limits the use of special equity-related compensation for executive officers to extraordinary circumstances only. In 2016, none of our NEOs received equity-related compensation beyond the standard annual equity award.remain competitive in attracting talent.
PBRSU Program
Plan Design and Performance Periods.The PBRSU Program is a key component of the annual equity compensation for each executive officer. At the beginning of each performance period, executive officers receive PBRSU grants that are subject to performance- and time-based vesting requirements.
Compensation Discussion and Analysis |Elements of Our Executive Compensation Program
Performance Period and Vesting
Each PBRSU cycle has a two-year performance period. The performance goals for each cycle are approved by the Compensation Committee at the beginning of the performance period. Each executive officer is awarded a target number of shares subject to the PBRSU award at the beginning of the performance period. PBRSU awards granted in 2020 are based on the 2020-2021 performance cycle. |
The post-performance-period vesting feature subjects 100% of the CEO and CFO PBRSU awards to at least three years of stock price volatility before the shares vest.
If the Company’s actual performance exceeds or falls short of the target performance goals, the actual number of shares subject to the PBRSU award will be increased or decreased formulaically.
Under the PBRSU program, under which PBRSUs are awarded to executives at the level of Senior Vice President and above, 100% of any PBRSU awards granted to ourthe CEO and CFO will vest, if at all, more than 14 months following the end of the applicable two-year performance period. This provision subjects 100% of the CEO and CFO PBRSU awards to a full three years of stock price volatility before the shares vest. For all executive officersSVPs other than the CEO and CFO, one-half of the PBRSUs vest in March following the end of the applicable performance period, and the other half of the award vests in March of the following year, more than one full year14 months following the completion of the performance period. The Compensation Committee believes that the post-performance periodpost- performance-period vesting feature of the PBRSUs provides an important mechanism that helps to retain executive officers and align their interests with long-term stockholder value.
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Executive Compensation / Compensation Discussion and Analysis
Performance Measures and Rationale.Rationale
As discussed above, the number of shares subject to a target PBRSU award are adjusted based on whether the Company’s actual performance exceeds or falls short of the target performance goals for the applicable performance period.
Compensation Discussion and Analysis |Elements of Our Executive Compensation Program
The following table outlines the performance measures for the 2015-20162019-2020 and 2016-20172020-2021 performance periods and the rationale for their selection: