Our executive compensation program is closely aligned with our business strategy and is intended to attract, retain, and motivate talented executives, while compensating them for the achievement of measurable corporate performance goals. To reinforce the alignment of executive incentive compensation with the interests of our stockholders, the Compensation Committee has adopted the following practices (see Executive Compensation Practices under Proposal No. 3 for further details).

Our Board prides itself on a commitment to high ethical standards and sound governance practices. For more details, please see Corporate Governance under Proposal No. 1 or visit our website to view our Corporate Governance Guidelines (defined below).

All directors serve a one-year term and are subject to re-election each year. The Board has nominated fiveseven individuals, who currently serve as our directors, for election at the Meeting. Each of these individuals up for election has consented to being named as a nominee for election as a director and has agreed to serve if elected.

Ms. Larabee holds a B.A. in Psychology from Moorhead State University and a Masters in Business Administration from Golden Gate University. She also completed the Stanford University Graduate School of Business Executive Program. Ms. Larabee is a member of the National Association of Corporate Directors and was named a NACD Board Leadership Fellow in November 2012.

During his tenure with Dell, Mr. Ahern proved himself as an innovative problem solver with strong leadership skills and a drive for exceptional results. Under Mr. Ahern’s leadership, his teams effectively grew revenue in various international markets, enhanced internal reporting and inventory management systems, and developed operational processes to align regional distribution, effectively growing revenue and improving operational efficiencies.

Mr. Ahern holds a B.S. in Business Administration from Dublin City University.

According to our bylaws, the Board must consist of not less than three nor more than thirteen members. Our Board is currently comprised of fiveseven members. The positions of Chairperson of the Board and CEO are held by separate persons.

Mr. Ahern, the CEO, serves on the Board. His main focus is to provide leadership to the Company in accomplishing the directives established by the Board. In that role, he is responsible for the general administration, oversight, care, and management of the business of the Company and its subsidiaries, with full authority over all officers, managers, and employees.

Ms. Larabee, the Chairperson of the Board, is considered the lead independent director, and her role, along with the Board, is to provide independent oversight of the CEO, to direct the business and affairs of the Company for the benefit of its stockholders, and to balance the interests of the Company’s diverse constituencies including stockholders, customers, and employees.

Meetings of the Board are chaired by Ms. Larabee. As Chairperson, Ms. Larabee sets the agenda for such meetings. The independent directors may also meet from time to time without the presence of Mr. Ahern as they determine appropriate.

Our directors are appointed for a one-year term to hold office until the next annual meeting of our stockholders,Meeting, and until their successors are elected and qualified, their death, or until removed from office in accordance with our bylaws.

The Board reviews the independence of our directors on the basis of standards adopted by the NASDAQ Stock Market (“NASDAQ”). As a part of this review, the Board considers transactions and relationships between the Company, on the one hand, and each director, members of the director’s immediate family, and other entities with which the director is affiliated, on the other hand. The purpose of such a review is to determine which, if any, of such transactions or relationships are inconsistent with a determination that the director is independent under NASDAQ rules. As a result of this review, the Board has determined that each of our directors other than Mr. Ahern (our CEO) is an “independent director” within the meaning of applicable NASDAQ standards.

We have granted restricted stock units (“RSUs”) to our non-employee directors concurrent with their appointment to the Board and annually thereafter. These RSU awards typically vest at the end of each fiscal year.

The table below summarizes the compensation paid (fees) or granted (stock-based compensation) to our non-employee directors for the year ended December 31, 2018:2019:

The Board has also adopted a code of business conduct and ethics (the “Code of Ethics”) that is applicable to our directors, officers (including our principal executive officer, principal financial officer, and principal accounting officer or controller), and employees. The Code of Ethics contains general guidelines for conducting our business consistent with the highest standards of business ethics, and is intended to qualify as a “code of ethics” under applicable securities regulations.

Our Board has overall responsibility for the oversight of our risk management. Day-to-day risk management is the responsibility of management, which has implemented processes to identify, assess, manage, and monitor risks that face us. Our Board, either as a whole or through its committees, regularly discusses with management our major risk exposures, their potential impact on us, and the steps we take to monitor and control such exposures.

In conjunction with our Board’s general risk oversight responsibility, the Board delegates certain risk oversight duties to Board committees as follows:

The Board has adopted a policy which prohibits our directors, officers, and other employees from engaging in short-term or speculative transactions involving our securities, such as publicly traded options, short sales, puts and calls, hedging transactions, and holding our securities in a margin account (the “Transaction Policy”).

The Board believes that it is inappropriate for our directors, officers, other employees, or our subsidiaries to hedge or monetize transactions to lock in the value of holdings in our securities. Such transactions, while allowing the holder to own our securities without the full risks and rewards of ownership, potentially separate the holder’s interests from those of our stockholders. The objective of the Transaction Policy is to prohibit direct or indirect engagement in hedging against future declines in the market value of any of our securities through the purchase of financial instruments designed to offset such risk.

None of our directors, officers, other employees, or our subsidiaries may, at any time, directly or indirectly, engage in any kind of hedging transaction that could reduce or limit such person’s holdings, ownership, or interest in or to any of our Common Stock or other securities, including, without limitation, outstanding stock options, deferred stock, restricted stock units, or other compensation awards, the value of which are derived from, referenced to, or based on the value or market price of our securities. Prohibited transactions include the purchase by directors, officers, or other employees of financial instruments, including, without limitation, prepaid variable forward contracts, instruments for short sale or purchase or sale of call or put options, equity swaps, collars, or units of exchangeable funds, that are designed to or that may reasonably be expected to have the effect of hedging or offsetting a decrease in the market value of any of our securities.

Additionally, any executive officer or director must seek approval of the Board prior to any pledge of our securities, such approval to be included in the minutes of the meetings or consent resolution of the Board; provided, that only a pledge or loan of our securities that does not involve a prepaid variable forward contract or similar transaction will be considered.

As of the date of this Proxy Statement, all of the members of the Boardour directors and ourexecutive officers were in compliance with the Transaction Policy.

None of our directors or executive officers, nor any proposed nominee for election as a director, nor any person who beneficially owns, directly or indirectly, more than 5% of any class of our voting securities, nor any members of the immediate family (including spouse, parents, children, siblings, and in-laws) of any of the foregoing persons had or has any material interest, directly or indirectly, in any transaction during 20182019 or in any presently proposed transaction which, in either case, has materially affected or will materially affect us.

We make a concerted effort to review potential transactions with our executive officers and directors from the standpoint of whether any related party transaction issues would be involved, and consider any such issues, including the approval, ratification, and disclosures relating to such transactions, on a case-by-case basis.

Corporate social responsibility has long been an integral part of our business and corporate culture. Environmental, social and governance initiatives (“ESG”) issues have been woven into our culture since our inception. As sustainability “best practices” evolve over time, so will our ESGEnvironmental, Social and Governance (“ESG”) initiatives and respective disclosures.

In 2018, we created a “Sustainability Working Group” consisting of dedicated internal resources and external advisors to address ESG factors related to us. The goal of the Sustainability Working Group is to improve our long-term performance utilizing ESG factors material to our business. Our framework for ESG factor evaluation and disclosure is informed by potential opportunities and risks for our business, views of our stockholders, and leading ESG ratings agencies, and leading ESG reporting frameworks. Among the ESG reporting frameworks, we primarily utilized the Sustainability Accounting Standard Board's (“SASB”) Sustainability Accounting Standards relevant for our industry (SASB industry classification: Apparel, Accessories and Footwear and the Multiline and Specialty Retailers and Distributors). We also consider The Task Force on Climate-Related Financial Disclosures (“TCFD”) framework. We determined that many of the topics in those standards represent trends and uncertainties that may materially impact our operational performance or financial condition.

In addition to considering the ESG impacts on our business, the views of our stockholders, the leading ESG frameworks, and ESG ratings agencies, we considered the ESG perspectives of other stakeholders, including but not limited to our employees, customers, and the communities in which we operate.

Our sustainability disclosures will evolve over time as our business continues to grow. AtDuring the second quarter of 2020, we plan to launch our first Sustainability web page to be included as part of ZAGG.com, which will provide more granular details on our ESG initiatives. For the purposes of this time,report, our Board, management, and Sustainability Working Group identified the following topics for high-level disclosure: Supply Chain, Products and Packaging, Cybersecurity, Employee Diversity and Inclusion, Political/Lobbying Contributions, and Employee Transportation Incentives.

We annually engage in internal verification activities to identify, assess and manage the risks of human trafficking in our product supply chain. We require each manufacturer to sign an agreement stating that it will only use subcontractors or independent contractors who are compliant with and agree to our Manufacturer’s Code of Conduct.

We regularly review our product packaging for environmental impact and cost. In 2018 and 2019, we made several modifications to our packaging across several brands. We plan to continue to consider packaging modifications for other product offerings and their respective environmental impacts moving forward.

In 2018, we invested in the packaging of our warranty mailer program. We offer a limited lifetime replacement program for our glass products. If the glass scratches or breaks, even through normal daily use, we will replace it for a $5.99 shipping and handling cost. The previous warranty process included a complete retail packaged glass replacement, packing slip, and return envelope, packed in a heavy card stock outbound shipping envelope. The new warranty mailer process eliminates the need for a packing slip and uses a different envelope that is 37% less paper, reducing costs as well as the environmental impact.

The implementation of a streamlined, environmentally-friendlyenvironmentally friendly warranty replacement system not only led to a significant reduction in material used, but also reduced Carbon Dioxide (“CO2”) emissions. In 2018 alone, this new system reduced material usage by approximately 180,394 pounds, a 43.1% weight reduction. CO2 emissions from pre-consumer freight were reduced by over 447 tons. In addition, 89.6% of the materials used in the new system are recyclable, as opposed to only 64.1% of the materials used previously.

We continually monitor and address cybersecurity risk. We have taken action to ensure data privacy and security for our customers on our e-commerce platform as well as require regular cybersecurity training for our employees.

New employees are required to complete cybersecurity training upon hire and all other employees are required to complete cybersecurity training on cybersecurity. A company-widean annual basis. The cybersecurity training program that started in the first quarter of 2018 received a 100% completion rate as of the end of the fourth quarter of 2018. The topics included theinclude General Data Protection Regulation which was adopted by European Union in May 2018 to protect personal data for all individuals,requirements, email security, strong password creation and usage and phishing. The phishing training has provided tangible results; the initialresults. Our phishing click rate was baselined at 18%has been steady between 8.4% and 8.7%, but followingwhich is industry leading and well below the training programs the click rate decreased to approximately 8%industry average of 13%.

In 2020, we will continue to review password policies across the organization. Our IT department will begin looking into and testing passwordless policies by using FIDO2 keys and Authenticator apps to eliminate a significant attack vector while also simplifying the user login experience. Conditional Access Policies are also being implemented to enhance the requirements necessary to access company resources and services. These new policy requirements will help reduce or eliminate completely the effectiveness of certain attack schemes including phishing and vishing. We recently implemented a SIEM platform, which has been instrumental in early 2019 which we believe will bolsterconsolidating system events and security logs. This has dramatically improved our cybersecurity defenses.incident hunting measures and improved overall security analytics for our security team.

We have a responsibility to create a workplace where our employees can thrive. We foster an inclusive culture where our employees can fully contribute their skills and talents. We want our employees to be valued and supported both at work and in their communities. We strive to maintain an environment of mutual respect, free of discrimination or harassment asharassment. At ZAGG, we seek to enable and support our employees by fostering transparency, collaboration and community.

We have made no material political or lobbying contributions.

Corporate sustainability is an integral part of our culture. We encourage our employees to limit their carbon footprint by providing transportation incentives.

The table below presents the number of employees who qualified for the public transit incentive, carpool incentive, and zero or low-emissions vehicle incentive by participating office since 2016.2017.

Each director is expected to devote sufficient time, energy and attention to ensure diligent performance of his or her duties and to attend all the Board, committee and stockholders’ meetings. For the fiscal year ended December 31, 2018,2019, there were four regular meetings of the Board. Ms. Larabee and Messrs. Ahern, Maurer, Birch, and Stubbs each attended, in person or by telephone, all of the regular meetings of the Board and the committees on which he or she served (in each case during the period in which he or she served). Mr. Heiner attended the February and April meetings of the Board and committees on which he served. Mr. Birch attended the October Board meeting, which was the last Board meeting for the fiscal year in conjunction with his appointment as a director on the Board and the meetings of the committees on which he served.

Our Corporate Governance Guidelines set forth a policy which encourages directors to attend our annual meetings of stockholders.Meeting. Four of our directors attended the 2018 annual meeting of stockholders.2019 Meeting.

The table below shows membership for each of the standing Board committees as of December 31, 2018:2019:

P. Scott Stubbs, Cheryl A. Larabee, Daniel R. Maurer, E. Todd Heiner (resigned effective July 2018), and Michael T. Birch (appointed in October 2018) served on the Audit Committee in 2018.2019. The Board has determined that P. Scott Stubbs and Cheryl A. Larabee are “audit committee financial experts” within the meaning established by the SEC. The primary responsibility of the Audit Committee is to assist the Board in fulfilling its oversight responsibility by reviewing and appraising:

The Audit Committee also has responsibility for reviewing and making recommendations to our independent directors regarding related person transactions with the Company and any other potential conflicts of interest of the Board members and our executive officers. In addition, the Audit Committee has oversight of cybersecurity, and ensuring that the Company is appropriately addressing security risks in our IT, network, and computer ecosystem.

The Report of the Audit Committee is set forth later in this Proxy Statement.

The primary responsibilities of the Nominating, Governance, and GovernanceSustainability Committee are to:

Cheryl A. Larabee, Daniel R. Maurer, E. Todd Heiner (resigned effective July 2018), Michael T. Birch (appointed in October 2018) and P. Scott Stubbs served on the Nominating and Governance Committee in 2018. The policy of the Nominating and Governance Committee is to consider stockholder recommendations for candidates to serve as our directors properly submitted in accordance with our bylaws. In evaluating thosestockholder recommendations, the Nominating, Governance, and GovernanceSustainability Committee seeks to achieve a balance of knowledge, experience, and capability on the Board and to address the membership criteria described below. Any stockholder wishing to recommend a candidate for consideration by the Nominating, Governance, and GovernanceSustainability Committee should submit a recommendation in writing indicating the candidate’s qualifications and other relevant biographical information (including without limitation, name, age, business and residence address, principal occupation, class and number of shares of the Company held by the candidate) and provide confirmation of the candidate’s consent to serve as a director. This information should be addressed to the Nominating, Governance, and GovernanceSustainability Committee c/o Secretary at the following address:

As contemplated by our Corporate Governance Guidelines, the Nominating, Governance, and GovernanceSustainability Committee reviews the appropriate skills and characteristics required of directors in the context of the current composition of the Board, at least annually.

The criteria considered by the Nominating, Governance, and GovernanceSustainability Committee in evaluating director nominees include, without limitation, the following:

The above criteria are not exhaustive and the Nominating, Governance, and GovernanceSustainability Committee may consider other qualifications and attributes that it believes are appropriate in evaluating the ability of an individual to serve as a director. Additionally, different factors may assume greater or lesser significance at particular times and the needs of the Board may vary in light of its composition and the Nominating, Governance, and GovernanceSustainability Committee’s perceptions about future issues and needs.

The Nominating, Governance, and GovernanceSustainability Committee does not have a formal policy regarding diversity, but as described above considers a broad range of attributes and characteristics in identifying and evaluating nominees for election to the Board. The Nominating, Governance, and GovernanceSustainability Committee assesses the appropriate size of the Board, and whether any vacancies on the Board are expected due to retirement or otherwise. In the event that vacancies are anticipated, or otherwise arise, the Nominating, Governance, and GovernanceSustainability Committee considers various potential candidates for directors. Candidates may come to the attention of the Nominating, Governance, and GovernanceSustainability Committee through various means, including current directors, stockholder recommendations, or other referrals. Candidates are evaluated at meetings of the Nominating, Governance, and GovernanceSustainability Committee, and may be considered at any point during the year.

There have been no material changes to the procedures by which stockholders may recommend nominees to the Board since we last provided this disclosure.

Our Board and management value the opinions and feedback of our stockholders, and we are committed to ongoing engagement with, and listening to, our stockholders. Our stockholder engagement team consists of our CFO, our general counsel, ICR, an external investor relations firm, Aon, a professional services firm, and the Chairperson of our Compensation Committee.

In response to discussions with stockholders, the Compensation Committee has made a number of enhancements to our executive compensation program. The Compensation Committee will continue to closely monitor the executive compensation program in an effort to align the interests of our executive officers with the interests of our stockholders and to address material concerns raised by stockholders.

Stockholders and other interested parties who wish to communicate with the Board on these or other matters may contact us at IR@zagg.com or by mail at ZAGG Inc, Attention: Secretary, 910 West Legacy Center Way, Suite 500, Midvale, Utah 84047.

In addition to Chris Ahern, our CEO and director, whose biographical information is set forth above, the following individuals currently serve as our executive officers.

KPMG also provided to the Audit Committee the written disclosures required by applicable requirements of the PCAOB regarding KPMG’s communications with the audit committee concerning independence, and the Audit Committee discussed with KPMG that firm’s independence. The Audit Committee also considered all non-audit services provided by KPMG and verified that each was compatible with their independence.

Based upon the Audit Committee’s discussion with management and KPMG, and the Audit Committee’s review of the representation of management and the report of KPMG to the Audit Committee, the Audit Committee recommended that the Board include the audited financial statements in our Annual Report on Form 10-K for the year ended December 31, 2018,2019, filed with the SEC.

Michael T. Birch

For the years ended December 31, 20182019 and 2017,2018, we incurred fees to KPMG. Audit fees include the annual audit, the audit of the effectiveness of internal control over financial reporting, quarterly reviews, audit for business acquisitions, and accounting consultations. The increasedecrease in total audit fees from 20172018 to 20182019 is primarily relateddue to work incurred during 2018 regarding the acquisitionshigher audit fees in connection with acquisition of Gear4 and HALO.in 2018 compared to acquisition of HALO in 2019. Audit-related services incurred in 2019 primarily consisted of due diligence services in connection with acquisitionsthe acquisition of Gear4 and HALO and a subscription fee for an online accounting research tool. Tax fees include U.S., foreign, and state income tax preparation and tax consultation. The Audit Committee believes KPMG’s independence has not been impaired by their non-audit services.

A summary of fees incurred to KPMG in 20182019 and 20172018 appears below:

Consistent with the vote of our stockholders, our Board has determined to submit the approval of our executive compensation annually to our stockholders on a non-binding basis. This proposal, commonly known as a “say-on-pay” proposal, gives stockholders the opportunity to express their views on the compensation of our NEOs. The vote is not intended to address any specific item of compensation, but rather the overall compensation of our NEOs.

Our executive compensation program is designed to attract, motivate, and retain a talented team of executives. We seek to accomplish this goal in a way that rewards performance that is aligned with our stockholders’ long-term interests. We believe that our executive compensation program satisfies this goal and is strongly aligned with the long-term interests of our stockholders.

As depicted below, our executive compensation program received significant support from stockholders in the 2016, 2017, 2018, and 20182019 vote.

In accordance with the requirements of Section 14A of the Exchange Act, we are including in this Proxy Statement a separate resolution, subject to a non-binding stockholder vote, to approve the compensation of our NEOs as disclosed in this Proxy Statement. Accordingly, the following resolution is submitted for stockholder vote at the Meeting:

stockholders. When determining target executive pay, the Compensation Committee attempts to ensure that compensation is closely aligned with our overall strategy and that it motivates executives to achieve superior performance, which hopefully leads to better stockholder returns.

Our executive compensation in 20182019 was comprised of three primary elements:

The relative mix of 20182019 target compensation for NEOs is presented in the chart below: