UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington,WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant | ☒ |
Filed by a Party other than the Registrant | ☐ |
Check the appropriate box: | ||
☐ | Preliminary Proxy Statement | |
☐ | Confidential, | |
☒ | Definitive Proxy Statement | |
☐ | Definitive Additional Materials | |
☐ | Soliciting Material | |
Pursuant to § 240.14a-12 |
MAGNITE, INC.
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box): | ||
☒ | No fee |
☐ | Fee paid previously with preliminary materials | |
☐ | Fee computed on table | |
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Magnite, Inc.
1250 Broadway, 15th Floor6080 Center Drive, 4th FloorNew York, New Los Angeles, California 90045York 10001
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 28, 20217, 2022
The annual meeting of stockholders of Magnite, Inc. (the “company”) will be held on Monday,Tuesday, June 28, 2021,7, 2022, at 10:2:00 Pacificp.m. Eastern time, to consider and act upon the matters described below. In light of the ongoing coronavirus (COVID-19) pandemic, and out of an abundance of caution and appreciation for our stockholders, this year’s annual meeting will be a virtual meeting via live webcast on the Internet. You will be able to attend the annual meeting, view the list of our registered stockholders, vote and submit your questions during the meeting by visiting https://web.lumiagm.com/293659257 and entering the control number included on the Notice of Internet Availability or the proxy card or voting instruction form (if you received a printed copy of the proxy materials) that you receive. Beneficial owners should review the proxy materials and their voting instruction form or Notice of Internet Availability for information about how to vote in advance of and how to participate in the meeting. You will not be able to attend the annual meeting in person.
1.Election of three Class II directors to serve until the company’s 2025 annual meeting of stockholders and until their respective successors are duly elected and qualified.
2.Ratification of the selection of Deloitte and Touche LLP as the company’s independent registered public accounting firm for the current fiscal year.
3.Approval, on an advisory basis, of the compensation of the company’s named executive officers.
4.Transaction of such other business as may properly come before the meeting or any postponement or adjournment thereof.
Stockholders of record at the close of business on May 4, 2021April 14, 2022 will be entitled to notice of and to vote at the meeting or any postponement or adjournment thereof.
WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING ONLINE, IN ORDER TO ENSURE REPRESENTATION OF YOUR SHARES, PLEASE VOTE AS PROMPTLY AS POSSIBLE. YOU ARE URGED TO SUBMIT YOUR PROXY OR VOTING INSTRUCTIONS ELECTRONICALLY OR BY TELEPHONE BY FOLLOWING THE INSTRUCTIONS ON YOUR NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIALS OR, IF YOU RECEIVED A PRINTED COPY OF THE PROXY MATERIALS, ON YOUR PROXY CARD OR VOTING INSTRUCTION FORM. IF YOU REQUESTED A PRINTED COPY OF YOUR PROXY MATERIALS, YOU MAY ALSO VOTE BY MAIL BY SIGNING, DATING, AND RETURNING YOUR PROXY CARD OR VOTING INSTRUCTION FORM IN THE PRE-PAID ENVELOPE PROVIDED. VOTING NOW VIA PROXY WILL NOT LIMIT YOUR RIGHT TO CHANGE YOUR VOTE OR TO ATTEND THE ANNUAL MEETING ONLINE.
| By Order of the Board of Directors, |
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Aaron Saltz |
New York, New York
April 26, 2022
Los Angeles, CaliforniaMay 17, 2021
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This proxy statement contains forward-looking statements, including statements based upon or relating to our expectations, assumptions, estimates, and projections. In some cases, you can identify forward-looking statements by terms such as “may,” “might,” “will,” “objective,” “intend,” “should,” “could,” “can,” “would,” “expect,” “believe,” “design,” “anticipate,” “estimate,” “predict,” “potential,” “plan” or the negative of these terms, and similar expressions. Such forward-looking statements may include, but are not limited to, statements concerning acquisitions by the Company, including the acquisition of SpotX, Inc. (“SpotX,” and such acquisition the “SpotX Acquisition”), or SpringServe, LLC (“SpringServe” and such acquisition the “SpringServe Acquisition”), or the anticipated benefits thereof; statements concerning potential synergies from the Company’s acquisitions; statements concerning the potential impacts of the COVID-19 pandemic on our business operations, financial condition, and results of operations and on the world economy; our anticipated financial performance; anticipated benefits or effects related to our completed merger with Telaria, Inc. in April 2020 (“Telaria” and such merger the “Telaria Merger”); key strategic objectives, industry growth rates for ad-supported connected television (“CTV”) and the shift in video consumption from linear TV to CTV; anticipated benefits of new offerings; the impact of transparency initiatives we may undertake; the impact of our traffic shaping technology on our business; the effects of our cost reduction initiatives; scope and duration of client relationships; the fees we may charge in the future; business mix; sales growth; benefits from supply path optimization; the development of identity solutions; client utilization of our offerings; our competitive differentiation; our market share and leadership position in the industry; market conditions, trends, and opportunities; certain statements regarding future operational performance measures; and other statements that are not historical facts. These statements are not guarantees of future performance; they reflect our current views with respect to future events and are based on assumptions and estimates and subject to known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from expectations or results projected or implied by forward-looking statements. These risks include, but are not limited to:
We discuss many of theseSuch risks and additional factors that could cause actual results to differ materially from those anticipated by our forward-looking statements under the heading "Risk Factors" and elsewhere in filings we have made and will make from time to time with the Securities and Exchange Commission, or SEC, includinginclude those described throughout our 2021 Annual Report on Form 10-K forand particularly under the year ended December 31, 2020 and subsequent Quarterly Reports on Form 10-Q for 2021, including our Form 10-Q for the three months ended March 31, 2021. These forward-looking statements represent our estimates and assumptions only as of the date of the report in which they are included.heading “Risk Factors.” Unless required by federal securities laws, we assume no obligation to update any of these forward-looking statements, or to update the reasons actual results could differ materially from those anticipated, to reflect circumstances or events that occur after the statements are made. Without limiting the foregoing, any guidance we may provide will generally be given only in connection with quarterly and annual earnings announcements, without interim updates, and we may appear at industry conferences or make other public statements without disclosing material nonpublic information in our possession. Given these uncertainties, investors should not place undue reliance on these forward-looking statements.
InvestorsReaders should readcarefully review this proxy statement and the documents that we reference in this report and have filed or will file with the SEC completelythat disclose risks and with the understandinguncertainties that may affect our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.business.
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Magnite, Inc.
1250 Broadway, 15th Floor6080 Center Drive, 4th FloorNew York, New Los Angeles, California 90045York 10001
PROXY STATEMENT FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 28, 20217, 2022
This proxy statement is provided in connection with the solicitation of proxies by the board of directors (the “board of directors” or “board”) of Magnite, Inc. (the “company” or “Magnite”) for use at Magnite’s annual meeting of stockholders to be held on Monday,Tuesday, June 28, 20217, 2022 at 10:2:00 Pacificp.m. Eastern time, and at any postponement or adjournment thereof (the “Annual Meeting”). In light of the ongoing coronavirus (COVID-19) pandemic, and out of an abundance of caution and appreciation for our stockholders, the Annual Meeting will be a virtual meeting via live webcast on the Internet. You will be able to attend the Annual Meeting, view the list of our registered stockholders, vote and submit your questions during the meeting by visiting https://web.lumiagm.com/293659257 and entering the control number included in the Notice of Internet Availability or the proxy card or voting instruction form (if you received a printed copy of the proxy materials) that you receive. Beneficial owners should review the proxy materials and their voting instruction form or Notice of Internet Availability for information about how to vote in advance of and how to participate in the Annual Meeting. You will not be able to attend the annual meeting in person.
IMPORTANT NOTICE REGARDING INTERNET AVAILABILITY OF PROXY MATERIALS
This proxy statement and our Annual Report on Form 10-K for the year ended December 31, 20202021 (the “2020“2021 Annual Report”) are available on the Internet at www.proxyvote.com. These materials are also available on our corporate website at http://investor.magnite.com/. The other information on our corporate website does not constitute part of this proxy statement.
GENERAL INFORMATION ABOUT THE ANNUAL MEETING
You are invited to attend the Annual Meeting via live webcast,, and we request that you vote on the proposals described in this proxy statement as soon as possible. You can vote your shares without attending the Annual Meeting by appointing a proxy to vote your shares as explained below. Please note that if your shares are held of record by a broker, bank or other nominee, you should contact your bank, broker or other nominee (preferably at least several days before the Annual Meeting) and obtain a “legal proxy” in order to be able to attend, participate in, or vote at the Annual Meeting. See “Matters RelatedRelating to Virtual Annual Meeting” below for further instructions.
Notice of Internet Availability of Proxy Materials
In accordance with rules and regulations adopted by the Securities and Exchange Commission (the “SEC”), instead of mailing a printed copy of our proxy materials, we are furnishing proxy materials to our stockholders on the Internet and mailing printed copies of the proxy materials only to a limited number of our stockholders. If you are a stockholder of record and you have received a printed copy of these proxy materials by mail, you may simply complete, sign and return your proxy card by mail or follow the instructions on your proxy card to submit your proxy via the Internet or telephone. If you hold your shares in street name, which means your shares are held of record by a broker, bank, or other nominee, you will receive instructions from your broker, bank, or other nominee on how to vote your shares. Stockholders receiving a Notice of Internet Availability of Proxy Materials by mail will generally not receive a printed copy of the proxy materials unless they specifically request a printed copy in accordance with the instructions included in the Notice of Internet Availability of Proxy Materials. The Notice of Internet Availability of Proxy Materials provides instructions as to how to (i) access and review the information contained in the proxy materials, (ii) submit voting instructions via the Internet or telephone or by mail, and (iii) request a printed copy of the proxy materials. You may also participate in and vote at the Annual Meeting by visiting the following website: https://web.lumiagm.com/293659257. See “Matters RelatedRelating to Virtual Annual Meeting” below for further instructions. Even if you plan to participate in the Annual Meeting online, we recommend that you submit your proxy or voting instructions in advance to authorize the voting of your shares at the Annual Meeting so that your vote will be counted if you later are unable to attend the Annual Meeting online.
We intend to begin distributing our proxy materials to stockholders via paper copy mailing and the Notice of Internet Availability of Proxy Materials on or about May 27, 2021.April 26, 2022.
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Business to be Conducted at Annual Meeting; Recommendation of Board of Directors
Each properly submitted proxy will be voted in accordance with the stockholder’s instructions contained therein. If no choice is specified, properly executed proxies that have not been revoked will be voted in accordance with the recommendations of the board of directors as follows:
•FOR election of each of the Class II directors to serve until the company’s 2025 annual meeting of stockholders and until their respective successors are duly elected and qualified (see “Proposal 1 – Election of Directors”);
•FOR ratification of the selection of Deloitte and Touche LLP as the company’s independent registered public accounting firm for the current fiscal year (see “Proposal 2 – Ratification of the Selection of Deloitte and Touche LLP as Independent Registered Public Accounting Firm”); and
•FOR approval, on an advisory basis, of the compensation of the company’s named executive officers (see “Proposal 3 – Advisory Vote to Approve the Compensation of our Named Executive Officers”).
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As to any other business that may properly come before the Annual Meeting, the persons acting as proxies will vote, or otherwise act, in accordance with their judgment on such matter. Our board of directors does not presently know of any other business that may come before the Annual Meeting.
The company will pay all costs of proxy solicitation. In addition to solicitations by mail, our directors, officers and employees, without additional remuneration, may solicit proxies by telephone, facsimile and personal interviews, and we reserve the right to retain outside agencies for the purpose of soliciting proxies. Brokers, custodians, and fiduciaries will be requested to forward proxy soliciting materials to the owners of stock held in their names and, as required by law, we will reimburse them for their out-of-pocket expenses in this regard.
Matters Relating to Virtual Annual Meeting
Our board of directors annually considers the appropriate format of our annual meeting of stockholders. As part of our effort to maintain a safe and healthy environment for our directors, members of management and stockholders who wish to attend the Annual Meeting, and in light of the novel coronavirus disease, COVID-19 pandemic, our board of directors believes that hosting a virtual Annual Meeting is in our best interest and the best interest of our stockholders and enables increased stockholder attendance and participation during a time when many travel restrictions are in place and may limit attendance at our Annual Meeting.participation. Furthermore, our board of directors has determined that hosting a virtual annual meeting of stockholders will provide expanded access, improved communication, and cost savings. Hosting a virtual meeting enables increased stockholder attendance and participation since stockholders can participate from any location around the world. We intend that the virtual meeting format will provide stockholders a similar level of transparency to the traditional in-person meeting format and we take steps to ensure such an experience. Our stockholders will be afforded the same opportunities to participate at the virtual Annual Meeting as they would at an in-person annual meeting of stockholders.
The live audio webcast of the Annual Meeting will begin promptly at 10:2:00 a.m. Pacificp.m. Eastern time. Online access to the audio webcast will open 15 minutes prior to the start of the Annual Meeting to allow time for you to login and test your internet-connected device’s audio system. We encourage you to access the meeting in advance of the designated time. We will have technicians ready to assist you with any technical difficulties you may have accessing the virtual meeting or submitting questions. If you encounter any difficulties accessing the virtual meeting during the check-in or meeting time, please call the technical support number that will be posted on the virtual meeting log in page.
If you want to participate in and vote at the Annual Meeting, you will need will need the control number included on your Notice of Internet Availability of Proxy Materials or your proxy card or voting instruction form (if you received a printed copy of the proxy materials) or included in the email to you if you received the proxy materials by email in order to be able to vote your shares or submit questions during the Annual Meeting.
In addition, if you hold your shares in “street name” through an intermediary, such as a bank, broker or other nominee, in order to participate in and vote at the Annual Meeting you must first obtain, in advance, fromyour bank, broker or other nominee, a legal proxy reflecting the number of shares of the Company’s common stock that you held as of the record date, your name and email address, unless you previously obtained a legal proxy from your bank, broker or other nominee. You must then submit a request for registration to AST by email to proxy@astfinancial.com. Requests for registration must be labeled as “Legal Proxy” and be received by AST no later than 5:00 p.m. Eastern Time on June 20, 2021.May 27, 2022. Obtaining a legal proxy may take several days, or longer, and
stockholders are advised to register as far in advance as possible. Proxy holders registered with AST will receive a control number and may access the Annual Meeting as described in the paragraph above for stockholders of record.
Our virtual Annual Meeting allows stockholders to submit questions and comments before and during the Annual Meeting. Stockholders who have accessed the Annual Meeting with a control number may submit questions during the Annual Meeting that are pertinent to the Company and the items being brought before a vote at the Annual Meeting, as time permits and in accordance with our rules of procedure for the Annual Meeting. If you wish to submit a question, you may do so when you are logged into the virtual meeting platform with your control number by typing your question in the designated spot on the dashboard and clicking “Submit.” After the Annual Meeting, we will spend up to 15 minutes answering stockholder questions that comply with the rules of conduct for the Annual Meeting, which will be posted on the virtual meeting web portal. To the extent time doesn’t allow us to answer all of the appropriately submitted questions, we will answer them in writing on our investor relations website at http://investor.magnite.com/ soon after the meeting. If we receive substantially similar questions, we will group such questions together and provide a single response to avoid repetition.
Voting and Quorum Requirements
On May 4, 2021,April 14, 2022, the record date for the determination of stockholders entitled to notice of and to vote at the Annual Meeting, there were outstanding and entitled to vote an aggregate of 128,859,048132,194,776 shares of our common stock, constituting all of our voting stock. Holders of our common stock are entitled to one vote per share. The holders of a majority of the shares of our common stock outstanding on the record date and entitled to vote at the Annual Meeting, present via live webcast or by proxy, will constitute a quorum for the transaction of business at the Annual Meeting and any adjournments and postponements thereof. Shares of our common stock represented via live webcast or by proxy (including broker non-votes and shares that abstain or do not vote with respect to one or more of the matters presented for stockholder approval) will be counted for purposes of determining whether a quorum is present at the Annual Meeting.
You may vote FOR, AGAINST or ABSTAIN with respect to each director nominee (Proposal 1), ratification of the selection of Deloitte &and Touche LLP as our independent registered public accounting firm for the current fiscal year (Proposal 2), and approval of the compensation of the company’s named executive officers (Proposal 3).
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This is an uncontested election and our bylaws provide that a director nominee will be elected in an uncontested election only if the number of votes cast FOR the nominee’s election exceeds the number of votes cast AGAINST the nominee’s election, assuming a quorum is present. For the election of directors, shares of our common stock voted ABSTAIN and broker non-votes are not counted as votes cast and, therefore, will not be counted in determining the outcome of a director nominee’s election, but will count for purposes of determining whether a quorum is present.
The affirmative vote of a majority of the shares of our common stock present in person or represented by proxy and entitled to vote on the matter, assuming a quorum is present, is required to (i) ratify the selection of Deloitte &and Touche LLP as our independent registered public accounting firm for the current fiscal year (Proposal 2) and (ii) approve, on an advisory basis, the compensation of the company’s named executive officers (Proposal 3).
For each of Proposals 2 and 3, abstentions are considered shares present and entitled to vote on such matter. For each of Proposals 2 and 3, abstentions will have the same effect as votes AGAINST the matter.
Votes during the Annual Meeting will be tabulated by a representative of American Stock Transfer &and Trust Company, who will serve as the Inspector of Elections. Our intention is to announce the preliminary voting results at the Annual Meeting and to publish the final results within four business days after the Annual Meeting on a Form 8-K to be filed with the SEC and which we will make available on our website at http://investor.magnite.com/.
Broker Discretionary Voting
If you hold your shares in street name through a bank, broker, or other nominee, you should follow the instructions that you receive from your bank, broker, or other nominee regarding steps to take to instruct your bank, broker, or other nominee how to vote your shares. If you do not provide voting instructions, your bank, broker, or other nominee is permitted to use its own discretion and vote your shares only on routine matters. However, for non-routine matters, your bank, broker, or other nominee does not have discretionary authority to vote your shares. The election of directors (Proposal 1) and the approval, on an advisory basis, of the compensation of the company’s named executive officers (Proposal 3) are each considered a non-routine matter, so brokers are not permitted to vote your shares with respect to such matters without receiving voting instructions from you. The ratification of the selection of Deloitte &and Touche LLP as our independent registered public accounting firm for the current fiscal year (Proposal 2) is
considered a routine matter. If your broker exercises its discretion to vote on Proposal 2 at the Annual Meeting, your shares will be voted on such proposal in the manner directed by your broker, but your shares will constitute “broker non-votes” on each other proposal voted on at the Annual Meeting.
Broker non-votes will not be counted as votes cast with respect to the election of directors (Proposal 1) and, therefore, will not be counted in determining the outcome of a director nominee’s election. For ratification of the selection of Deloitte and Touche LLP as our independent registered public accounting firm for the current fiscal year (Proposal 2) and approval, on an advisory basis, of the compensation of the company’s named executive officers (Proposal 3), broker non-votes, if any, will not be counted in determining the outcome of those items.
Deadline for Voting Before the Annual Meeting
If you are a stockholder of record, your proxy must be received by telephone or the Internet by 11:59 p.m. Eastern Time on June 10, 20216, 2022 in order for your shares to be voted at the Annual Meeting. If you are a stockholder of record and you received a printed set of proxy materials, you also have the option of completing, signing, dating and returning the proxy card enclosed with the proxy materials before the Annual Meeting in order for your shares to be voted at the meeting. If you are a beneficial owner of shares of our common stock, please comply with the deadlines included in the voting instructions provided by the bank, broker or other nominee that holds your shares.
Changing or Revoking Your Vote
If you are a stockholder of record you may revoke a previously submitted proxy by (i) delivering a subsequently dated written revocation to our Secretary, (ii) providing subsequent Internet or telephone voting instructions, or (iii) delivering a subsequently dated proxy to our Secretary, in each case, by 11:59 p.m. Eastern Time on June 27, 2021.6, 2022. You may also revoke your proxy by voting during the Annual Meeting. If your shares are held through a bank or broker (i.e., in street name), you must contact your broker, bank or other nominee to find out how to change or revoke your voting instructions. Attendance at the Annual Meeting will not cause your previously executed proxy to be revoked unless you vote during the Annual Meeting or specifically request such revocation. Each stockholder may appoint only one proxy holder or representative to attend the meeting on his or her behalf.
Householding of Proxy Materials
Some banks, brokers, and other nominee record holders may participate in the practice of “householding” proxy materials. This means that only one copy of our proxy materials or the Notice of Internet Availability of Proxy Materials, as applicable, may have been sent to multiple stockholders in your household unless such stockholders have notified us of their desire to receive multiple copies of our proxy materials. We will promptly deliver a separate Notice of Internet Availability of Proxy Materials and, if applicable, a separate proxy statement and Annual Report, to you if you contact us by mail at Magnite, Inc., 6080 Center Drive, 4th1250 Broadway, 15th Floor, Los Angeles, California 90045,New York, New York 10001, Attention: Corporate Secretary or by telephone at (310) 207-0272.(212) 243-2769. If you want to receive separate copies of our proxy materials in the future, or if you are receiving multiple copies and would like to receive only one copy for your household, you should contact your bank, broker, or other nominee record holder, or you may contact us at the above address or phone number.
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PROPOSAL 1 — ELECTION OF DIRECTORS
Our board of directors is classified into three classes (designated Class I, Class II and Class III), with members of each class holding office for staggered three-year terms.There are currently three Class I directors, whose terms expire at the Annual Meeting; three Class II directors, whose terms expire at the 2022 annual meeting of stockholders; and threeAnnual Meeting; four Class III directors, whose terms expire at the 2023 annual meeting of stockholders; and four Class I directors, whose terms expire at the 2024 annual meeting of stockholders, in all cases subject to the election and qualification of their respective successors and to their earlier death, resignation or removal. Proxies cannot be voted for a greater number of persons than the nominees named.
On April 1, 2020, the company completed its merger with Telaria, Inc. (“Telaria”). Upon effectiveness of the Telaria Merger Telaria, Frank Addante and Lewis W. Coleman resigned from the company’sMarch 21, 2022, our board of directors approved the expansion of the board from nine to eleven directors, with one newly created directorship being allocated to Class I and Paul Caine, Doug Knopper, Rachel Lamone newly created directorship being allocated to Class III. Diane Yu was appointed to fill the Class I vacancy and James Rossman, each a Telaria director priorDavid Pearson was appointed to fill the Telaria Merger, were elected toClass III vacancy. On April 21, 2022, Mr. Pearson was appointed as the company’s board of directorsaudit committee chair, replacing Lisa Troe, who will continue to serve until their respective successors have been duly elected and qualified, or until any such new director’s earlier death, resignation or removal.
on the audit committee.
Our process for nominating director candidates is described below under the caption “Director Candidate Nominating Procedures.” Our board of directors, upon the recommendation of the board’s nominating &and governance committee, nominated each of Michael Barrett, Rachel Lam and Robert Frankenberg, Sarah Harden and James RossmanSpillane to stand for election as Class III directors at the Annual Meeting. Each nominee has indicated his or her willingness to serve if elected, but if he/she is unable or unwilling for good cause to serve, proxies may be voted for a substitute nominee designated by our board of directors or our board of directors may determine to reduce the size of the board. Each nominee, if elected, will hold office until the 20242025 annual meeting of stockholders, subject to the election and qualification of his respective successor and to his earlier death, resignation or removal.
The table below lists the nineeleven directors expected to continue in service following the Annual Meeting and their committee assignments. A summary of the background for each nominee and continuing director is set forth after the table. These background summaries include the specific experience, qualifications, attributes, and/or skills that, together with the general characteristics and qualifications described below under the caption “Director Candidate Nominating Procedures,” contributed to our board’s conclusion that the person should serve as a director of the company.
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Name | Age(1) | Position | Audit | Compensation | Nominating and Governance | Member | ||
Paul Caine | 57 | Chairman of the Board | | | | April 2020 | ||
Michael G. Barrett | 60 | CEO and Director | | | | March 2017 | ||
Robert J. Frankenberg | 74 | Lead Director | | X | | April 2014 | ||
Sarah P. Harden | 50 | Director | | X | | July 2019 | ||
Doug Knopper | 61 | Director | | Chair | X | April 2020 | ||
Rachel Lam | 54 | Director | X | | X | April 2020 | ||
David Pearson | 56 | Director | Chair | | | March 2022 | ||
James Rossman | 56 | Director | X | X | | April 2020 | ||
Robert F. Spillane | 71 | Director | X | | Chair | April 2014 | ||
Lisa L. Troe | 60 | Director | X | | X | February 2014 | ||
Diane Yu | 48 | Director | | | | March 2022 |
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(1)As of April 14, 2022
Director Nominees – Class III
Michael G. Barrett has been a member of our board of directors and has served as our Chief Executive Officer since March 2017. Mr. Barrett has also served as our President since March 2017, except for the period from April 2020 to June 2020. Mr. Barrett has served as the President of Ichabod Farm Ventures LLC, an investment company that he founded, since December 2012. From January 2014 to December 2015, he served as President and Chief Executive Officer of Millennial Media, Inc. From July 2012 to December 2012, Mr. Barrett served as Global Chief Revenue Officer and Executive Vice President at Yahoo! Inc. Prior to Yahoo!, from January 2012 to July 2012, Mr. Barrett served as Director at Google Inc., where he led the integration efforts following Google’s acquisition of AdMeld Inc., a global supply side platform solution for premium publishers. Mr. Barrett previously served as Chief Executive Officer at AdMeld from November 2008 to December 2011. Mr. Barrett also held senior positions at AOL, Fox Interactive Media and Disney Online. Mr. Barrett served on the board of directors of Media Math, a demand-side platform, from January 2013 to April 2020. Mr. Barrett brings to the board extensive experience in digital advertising and advertising technology, as well as significant executive management expertise.
Rachel Lam has been a member of our board of directors since April 2020. She previously served as a member of Telaria’s board since May 2013. Ms. Lam is the Co-Founder and Managing Partner of Imagination Capital, an early stage venture capital firm founded in 2017. She has served on the board of Porch Group, Inc., a Nasdaq listed company that provides software and services to home service companies, since August 2021, where she is also the chair of the nominating and governance committee, and on the board of Innovid, Inc., a NYSE listed company that operates a leading CTV advertising delivery and measurement platform, since December 2021. From 2003 to 2017, Ms. Lam served as Group Managing Director of the Time Warner Investments Group, the strategic investing arm of Time Warner Inc. She managed Time Warner’s investments in numerous digital media companies, and served on the board of directors of privately held Maker Studios and Bluefin Labs prior to their sales to the Walt Disney Company and Twitter, respectively. Ms. Lam received a B.S. in industrial engineering and operations research from U.C. Berkeley and an M.B.A. from Harvard Business School. Ms. Lam brings to the board extensive experience investing in early and late stage digital media and technology companies, as well experience in banking and mergers and acquisitions.
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Robert F. Spillane joined our board of directors in connection with our initial public offering in April 2014. From 1998 to 2017, Mr. Spillane was a Managing Principal at DigaComm, L.L.C., a private investment firm that leads early-stage venture capital transactions, primarily involving companies in technology and digital media. Mr. Spillane was formerly a Principal and President and CEO of the investment group DM Holdings, Inc., which was formed in 1991 to acquire Donnelley Marketing, Inc. from The Dun and Bradstreet Corporation. Donnelley Marketing was a leading direct marketing and information services company. Mr. Spillane served as President and CEO, and on the board of directors of Donnelley Marketing, Inc. Prior to joining DM Holdings, Mr. Spillane was the Executive Vice President of Diamandis Communications, Inc., then a leading consumer magazine publisher, formed in 1987 in a leveraged buyout of CBS Magazines from CBS Inc., and also served as a member of the Diamandis board of directors from 1987 to 1990. Prior to Diamandis, Mr. Spillane held various executive positions with CBS, Inc., including Senior Vice President Group Publisher, Vice President of Circulation, Vice President General Manager of the CBS Special Interest Magazine Group, and Vice President Sales and Marketing of Fawcett Books. His ten-year career at CBS culminated in service from 1985 to 1987 as Senior Vice President, Publishing of CBS Magazines. In that capacity, he was directly responsible for 10 magazines. From 1972 to 1977, Mr. Spillane held various positions with Chesebrough Ponds, Inc. Mr. Spillane also served on the board of directors of TVSM, Inc., a private media company, from 1992-1998. Mr. Spillane brings to the board expertise in the publishing and advertising businesses, as well as significant experience with operations and mergers and acquisitions.
Incumbent Directors – Class I
Robert J. Frankenberg joined our board of directors in connection with our initial public offering in April 2014. Mr. Frankenberg has owned NetVentures, a management consulting and investment firm focused on the high-tech industry, since 1996. He served on the board of directors of public company Nuance Communications from March 2000 to June 2018. He previously served as a member of the boards of directors of public companies Polycom from October 2013 to September 2016, Wave Systems from December 2011 to June 2015 and National Semiconductor until October 2011. He also serves on the boardboards of Veracity Networks, the Sundance Institute and Western Governor’s University (WGU) Development. Prior to its sale in 2004, Mr. Frankenberg chaired Kinzan, a leading provider of Internet services platforms. Mr. Frankenberg was the chairman, president, and CEO of Encanto Networks from June 1997 to July 2000 when the company’s major business was sold to Avaya. Encanto was a leading provider of eBusiness software and services to small business. From April 1994 to August 1996, Mr. Frankenberg was the Chairman/CEO of Novell, a networking software company. Prior to Novell, Mr. Frankenberg was the Vice President &and Group General Manager of Hewlett-Packard’s Personal Information Products Group, responsible for HP’s personal computer, server, networking, office software, calculator, and consumer product lines. Mr. Frankenberg joined Hewlett-Packard in 1969 as a manufacturing technician, later became a design engineer, software designer, project manager, engineering and marketing executive, and general manager. He became a corporate vice president in 1990 and general manager of the Personal Information Products Group in 1991. He served in the US Air Force from 1965 to 1969. Mr. Frankenberg previously served on various other boards, including for America OnLineOn Line (AOL), and holds several computer design patents. He brings to the board a deep knowledge of software, computer networks and systems, business operations, the technology industry, and public company governance and board service.
Sarah P. Harden joined our board of directors in July 2019. Ms. Harden brings more than two decades of experience in digital media, entertainment and direct-to-consumer video to the Company’s Board. Since January 2018, Ms. Harden has served as the Chief Executive Officer of Reese Witherspoon’s media company Hello Sunshine.Sunshine, which was acquired by Blackstone in August 2021. Prior to that, Ms. Harden held executive-level positions at Otter Media/The Chernin Group from 2013 to 2018, including President and Executive Vice President. Ms. Harden previously served as board member of privately held ESPN-Star Sports, Star China Media and The Moby Group and as a board director overseeing successful acquisitions and exits of private portfolio companies including Crunchyroll, Fullscreen, Roosterteeth, McBeard, Stagebloc and minority-invested company DLVR.Stagebloc. Ms. Harden received her MBA from Harvard Business School and graduated with honors with a B.A. in international relations from The University of Melbourne. Ms. Harden brings to the board extensive experience leading and growing digital video, media and entertainment companies.
James Rossman has been a member of our board of directors since April 2020. He previously served as a member of Telaria’s board from January 2011 until April 2020, and served as Chairman of Telaria’s board from August 2012 to May 2013. Mr. Rossman currently serves as an Operating Partner at Silver Lake. From November 2012 to April 2018, he served as Special Advisor to General Atlantic, a global growth equity firm. From April 2009 to June 2012, he served in various roles at AKQA Inc., a digital services company, including President and Chief Operating Officer. From April 2001 to March 2009, Mr. Rossman served in several roles at Digitas, Inc., an integrated advertising agency and a member of the Publicis Groupe, S.A. (as of 2007), including as Chief Operating Officer. Mr. Rossman received a B.A. in economics from Trinity College and an M.M.M. from the Kellogg School of Management at Northwestern University. Mr. Rossman brings significant experience in operating and managing media agencies and advertising technology companies.
Incumbent Directors – Class II
Michael G. BarrettDiane Yu has been a member of our board of directors and has served as our Chief Executive Officer since March 2017. Mr. Barrett has also served as our President since March 2017, except for the period from April 2020 to June 2020. Mr. Barrett has served as the President of Ichabod Farm Ventures LLC, an investment company that he founded, since December 2012. From January 2014 to December 2015, he served as President and Chief Executive Officer of Millennial Media, Inc. From July 2012 to December 2012, Mr. Barrett served as Global Chief Revenue Officer and Executive Vice President at Yahoo! Inc. Prior to Yahoo!, from January 2012 to July 2012, Mr. Barrett served as Director at Google Inc., where he led the integration efforts following Google’s acquisition of AdMeld Inc., a global supply side platform solution for premium publishers. Mr. Barrett previously served as Chief Executive Officer at AdMeld from November 2008 to December 2011. Mr. Barrett also held senior positions at AOL, Fox Interactive Media and Disney Online. Mr. Barrett served on the board of directors of Media Math, a demand-side platform, from January 2013 to April 2020. Mr. Barrett brings to the board extensive experience in digital advertising and advertising technology, as well as significant executive management expertise.
Rachel Lam has been a member of our board of directors since April 2020.March 2022. She previously served as a memberthe Chief Technology Officer of Telaria’s board since May 2013.Better Holdco, Inc., which operates Better.com, an online platform for mortgage origination and related services, from January 2021 to April 2022, and she currently serves as an advisor to Better. Ms. LamYu is the Co-Founder of FreeWheel Media, Inc., which provides a technology platform for the management and Managing Partnermonetization of Imagination Capital, an early stage venture capital firm founded in 2017. From 2003 to 2017, Ms. Lamdigital television advertising, and served as Group Managing Directorits Chief Technology Officer from 2007 to 2014, when FreeWheel was acquired by Comcast. Following the sale, Ms. Yu served as Chief Technology Officer of Comcast’s Advanced Advertising Division. Prior to co-founding FreeWheel, Ms. Yu spent over nine years at DoubleClick, where she served as the Time Warner Investments Group,Vice President of engineering from 2005 until 2007. She received her Bachelor’s degree from Peking University in 1995 and a Master’s degree in Mathematics from the strategic investing armUniversity of Time Warner Inc. She managed Time Warner's investmentsOhio in numerous digital media companies, and
served on the board of directors of privately held Maker Studios and Bluefin Labs prior to their sales to the Walt Disney Company and Twitter, respectively.1998. Ms. Lam currently serves on the board of directors of The Center for Reproductive Rights. Ms. Lam received a B.S. in industrial engineering and operations research from U.C. Berkeley and an M.B.A. from Harvard Business School. Ms. LamYu brings to the board extensive experience investing in earlybuilding, leading and late stagescaling engineering teams for large digital media andadvertising technology companies, as well experience in banking and mergers and acquisitions.companies.
Robert F. Spillane joined our board of directors in connection with our initial public offering in April 2014. From 1998 to 2017, Mr. Spillane was a Managing Principal at DigaComm, L.L.C., a private investment firm that leads early-stage venture capital transactions, primarily involving companies in technology and digital media. Mr. Spillane was formerly a Principal and President and CEO of the investment group DM Holdings, Inc., which was formed in 1991 to acquire Donnelley Marketing, Inc. from The Dun and Bradstreet Corporation. Donnelley Marketing was a leading direct marketing and information services company. Mr. Spillane served as President and CEO, and on the board of directors of Donnelley Marketing, Inc. Prior to joining DM Holdings, Mr. Spillane was the Executive Vice President of Diamandis Communications, Inc., then a leading consumer magazine publisher, formed in 1987 in a leveraged buyout of CBS Magazines from CBS Inc., and also served as a member of the Diamandis board of directors from 1987 to 1990. Prior to Diamandis, Mr. Spillane held various executive positions with CBS, Inc., including Senior Vice President Group Publisher, Vice President of Circulation, Vice President General Manager of the CBS Special Interest Magazine Group, and Vice President Sales and Marketing of Fawcett Books. His ten-year career at CBS culminated in service from 1985 to 1987 as Senior Vice President, Publishing of CBS Magazines. In that capacity, he was directly responsible for 10 magazines. From 1972 to 1977, Mr. Spillane held various positions with Chesebrough Ponds, Inc. Mr. Spillane also served on the board of directors of TVSM, Inc., a private media company, from 1992-1998. Mr. Spillane brings to the board expertise in the publishing and advertising businesses, as well as significant experience with operations and mergers and acquisitions.
Incumbent Directors – Class III
Paul Cainehas been a member and Chairman of our board of directors since April 2020. He previously served as the non-executive Chairman of Telaria from January 1, 2020 until April 2020 and as a member of Telaria’s board of directors from June 2014 until April 2020. He served as Telaria’s executive Chairman from July 2017 to December 31, 2019 and Telaria’s Interim Chief Executive Officer from February 2017
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to July 2017 and as the non-executive Chairman of the Board from July 2016 to February 2017. Mr. Caine has served as President, On Location at Endeavor Group Holdings, Inc. since January 2020. Mr. Caine has served as the Chairman and Executive Director of the Board of Engine Group, a global marketing company, since January 2018, and as CEO and Founder of PC Ventures, LLC, an investment and advisory firm since August 2017. Mr. Caine served as the Chief Global Revenue Officer for Bloomberg Media from June 2014 to July 2016. From April 2013 to January 2014 he served as Chief Executive Officer and a member of the board of directors of WestwoodOne, Inc., the largest independent national audio media company in the U.S. From 1989 to 2013, Mr. Caine served in various capacities at Time Inc., including Executive Vice President, Chief Revenue Officer and Group President Time Inc. from January 2011 until April 2013, Executive Vice President, President and Group Publisher, Style &and Entertainment Group from January 2010 to January 2011, and President, Style &and Entertainment Group from January 2008 to January 2010. From 2007 to 2011, Mr. Caine served on the board of directors of Nexcen Brands, Inc., a strategic brand management company with a focus on retail franchising, where he served as a member of the audit and governance committees. Mr. Caine received a B.A. in Telecommunications with a minor in Business from Indiana University. Mr. Caine brings to the board expertise in branding and multi-media advertising sales and marketing, as well extensive experience serving on the boards of directors of public and private companies.
Doug Knopper has been a member of our board of directors since April 2020. He previously served as a member of Telaria’s board of directors from October 2018 until April 2020. Mr. Knopper is the Co-Founder of FreeWheel Media, Inc. and served as its Co-Chief Executive Officer from February 2007 to September 2017. FreeWheel, which was acquired by Comcast in 2014, provides a technology platform for the management and monetization of digital television advertising. Prior to founding FreeWheel, Mr. Knopper served as the Chief Executive Officer of BitPass Inc. from 2005 to 2007 and as Senior Vice President/General Manager of DoubleClick Inc. from 2000 to 2005. Mr. Knopper received a B.A. from the University of Michigan and an M.B.A from Georgetown University. Mr. Knopper brings to the board deep expertise and business relationships in digital video advertising and CTV, as well as experience founding, building and leading advertising technology companies.
David Pearson has been a member of our board of directors since March 2022. He has served on the board of directors of Lee Enterprises Inc., a public media company listed on Nasdaq, since February 2020, and is also a member of Lee’s audit committee. He has also served on the board of directors of Potbelly Corporation, a Nadaq listed company, since April 2022, where he sits on the audit committee. Mr. Pearson was Chief Financial Officer of Vonage Holdings Corp., a public cloud technology company, from May 2013 until August 2020. Before Mr. Pearson joined Vonage, he spent over nine years with Deutsche Bank Securities as a Managing Director and Global Media & Telecom Group Head. Prior to joining Deutsche Bank, Mr. Pearson served in various roles at Goldman, Sachs & Co. in the Technology, Media & Telecommunications practice for over nine years, including as Managing Director from 2002 to 2003. Mr. Pearson started his career at Coopers & Lybrand and holds a M.B.A. from Harvard Business School and an A.B. in Political Science and Organizational Behavior from Brown University. Mr. Pearson brings to the board an expertise in capital markets, mergers and acquisitions and public company accounting, controls and financial reporting, as well as significant operational experience as a public company executive.
Lisa L. Troe has been a member of our board of directors since February 2014. She iswas a Senior Managing Director of Athena Advisors LLC, a businessan advisory firm she co-founded to provide services in 2014.securities litigation, public company accounting, financial reporting and disclosure, and other business needs and strategies, from January 2014 to June 2021. From 2005 through 2013, Ms. Troe was a Senior Managing Director at FTI Consulting, Inc. (NYSE: FCN), a global business advisory firm. From 1995 through 2005, Ms. Troe served on the staff of the U.S. Securities and Exchange Commission’s Pacific regional office, including seven years as an Enforcement Branch Chief and six years as the Regional Chief Enforcement Accountant. From 1980 through 1994, Ms. Troe’s career included accounting positions in public and private companies and with a Big Four public accounting firm. Ms. Troe is a director of Stem, Inc. (NYSE: STEM), a technology driven provider of energy storage systems management services that employs a proprietary AI-enabled software platform to optimize the value of energy savings by automatically switching between battery power, onsite generation and grid power. Ms. Troe is a director of
serves on three other public company boards: (i) HireRight GIS Group Holdings LLC,Corp., which provides employers with global background screening and other workforce solutions. Ms. Troe hassolutions, since March 2021; (ii) Stem, Inc., a global leader in AI-driven energy storage services, since April 2021; and (iii) Expro Group Holdings N.V., an oilfield services company, since October 2021. She served as a director on private company boards in multiple industries and as an independent member of a public company board special litigation committee of a public gaming industry manufacturing company.committee. Ms. Troe’s career includes accounting positions in public and private companies and with a Big Four public accounting firm. SheTroe is a CPA, holds a CERT certificate in cybersecurity issued by the Software Engineering Institute of Carnegie Mellon University, and is a member and Board Leadership Fellow of the National Association of Corporate Directors Board Leadership Fellow, CERT certified in cybersecurity by SEI of Carnegie Mellon University, a member of NACD and other professional organizations, and a CPA.Directors. Ms. Troe brings to the board an extensive background in public company governance and oversight, enterprise risk management, and public company accounting, financial reporting and disclosure. She has diverse experience with a wide range of industries, allowing her to bring additional perspective to our board.
Vote Required for Election of Directors
Our bylaws provide that, in an uncontested election, each director nominee must receive a majority of votes cast in order to be elected to our board of directors. A “majority of votes cast” means the number of shares voted FOR a director nominee exceeds the number of shares voted AGAINST that director nominee. Each of our director nominees currently serves on the board. If a nominee who currently serves as a director is not re-elected, Delaware law provides that the director would continue to serve on the board as a “holdover director.” Our Corporate Governance Guidelines provide that each incumbent director nominee who is not re-elected is expected to submit to the board his or her resignation from our board of directors and all committees thereof. The nominating &and governance committee, composed entirely of independent directors, will evaluate and make a recommendation to the board with respect to any submitted resignation and the board must decide whether to accept or reject the resignation, or to take other action, within 90 days following certification of the stockholder vote. No director may participate in the nominating &and governance committee or the board’s consideration of his or her own resignation.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE ELECTION OF EACH OF MICHAEL BARRETT, RACHEL LAM AND ROBERT FRANKENBERG, SARAH HARDEN AND JAMES ROSSMANSPILLANE AS CLASS III DIRECTORS.
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PROPOSAL 2 — RATIFICATION OF THE SELECTION OF DELOITTE &AND TOUCHE LLP
AS INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The audit committee of our board of directors has selected Deloitte &and Touche LLP (“Deloitte”) as our independent registered public accounting firm for the year ending December 31, 20212022, and has further directed that management submit the selection of Deloitte as our independent registered public accounting firm for ratification by the stockholders at the Annual Meeting. Deloitte has served as our independent registered public accounting firm since 2018. Although stockholder approval of the selection of Deloitte is not required by law, our board of directors believes it is advisable as a matter of good corporate governance to give stockholders an opportunity to ratify this selection. If this proposal is not ratified at the Annual Meeting, the audit committee may (but will not be required to) reconsider its selection of Deloitte. Even if the selection is ratified, the audit committee may in its discretion select a different independent registered public accounting firm at any time during the year if it determines that such a change would be appropriate.
Representatives of Deloitte are expected to be present at the Annual Meeting and will have the opportunity to make a statement if they desire to do so and will also be available to respond to appropriate questions from stockholders.
Independent Registered Public Accounting Firm Fees
The aggregate fees billed for audit and other services provided in the last two fiscal years by Deloitte are as follows:
Fee Category |
| 2021 |
| 2020 |
Audit Fees(1) | | $3,136,000 | | $1,985,000 |
Audit-Related Fees(2) | | — | | 62,876 |
Tax Fees(3) | | — | | — |
All Other Fees(4) | | 3,790 | | 253,320 |
Total | | $3,139,790 | | $2,301,196 |
Fee Category | 2020 | 2019 | |
Audit Fees(1) | $1,985,000 | $932,775 | |
Audit-Related Fees(2) | 62,876 | 325,289 | |
Tax Fees(3) | — | — | |
All Other Fees(4) | 253,320 | 3,790 | |
Total | $2,301,196 | $1,261,854 |
(1)Audit Fees cover professional services rendered for the audit of our annual financial statements and review of financial statements included in our quarterly reports on Form 10-Q, and services normally provided by the accountant in connection with statutory and regulatory filings or engagements.
(2)Audit-Related Fees cover assurance and related services that are reasonably related to the performance of audit or review of our financial statements and not reported as Audit Fees.
(3)Tax Fees cover tax compliance, advice, and planning services and consist primarily of review of consolidated federal income tax returns and foreign tax issues.
(4)All Other Fees in 2020 are related to license fees for accounting research software and Merger and Acquisition support. All Other Fees in 2021 related to license fees for accounting research software.
Pre-Approval Policy and Procedures
The audit committee has adopted policies and procedures relating to the pre-approval of all audit and non-audit services that are to be provided by our independent registered public accounting firm. The audit committee will not approve non-audit services that the independent registered public accounting firm is not permitted to perform under the rules of the SEC and Public Company Accounting Oversight Board.
On an annual basis, the independent registered public accounting firm will propose to the audit committee an audit plan and engagement letter describing the services the auditor expects to provide and related fees. The final engagement letter and fees agreed by the company acting pursuant to the direction of the audit committee, and all of the services covered by the final engagement letter, will be considered pre-approved by the audit committee.
The audit committee or the Chair of the audit committee acting by delegated authority will approve, if necessary, any changes in terms, conditions and fees under the engagement letter resulting from changes in the audit scope, company structure or other matters.
The audit committee has delegated to the Chair of the audit committee the authority to approve on a case-by-case basis any audit or non-audit services, in amounts up to $200,000 (1) per engagement, (2) per additional category of services, or (3) in excess of pre-
approvedpre-approved amounts for the specified service. The Chair then reports any services so approved to the audit committee at its next regularly scheduled meeting.
All services rendered for fiscal 20202021 and fiscal 20192020 were pre-approved by the audit committee in accordance with the audit committee’s pre-approval policies and procedures described above.
Vote Required for Ratification of the Selection of our Independent Registered Public Accounting Firm
Ratification of the selection of our independent registered public accounting firm requires the affirmative vote of a majority of the shares represented at the Annual Meeting, either in person or by proxy, and entitled to vote on the proposal. Abstentions will be considered as a vote “AGAINST” this proposal.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” THE RATIFICATION OF THE SELECTION OF DELOITTE AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.
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PROPOSAL 3 — ADVISORY VOTE TO APPROVE THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS
Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, or the Dodd-Frank Act, and Section 14A of the Exchange Act of 1934, as amended (the “Exchange Act”), the company’s stockholders are entitled to vote to approve, on an advisory basis, the compensation of the company’s named executive officers as disclosed in this proxy statement in accordance with SEC rules.
This vote is not intended to address any specific item of compensation, but rather the overall compensation of the company’s named executive officers and the philosophy, policies and practices described in this proxy statement. The compensation of the company’s named executive officers subject to the vote is disclosed in the executive compensation tables and the related narrative disclosure contained in this proxy statement. As discussed in those disclosures, the company believes that its compensation policies and decisions are focused on motivating employees through performance-based variable compensation while ensuring that executives are strongly aligned with the creation of long-term value for stockholder principles.stockholders. Compensation of the company’s named executive officers is designed to enable the company to attract and retain talented and experienced executives to successfully lead the company in a competitive environment.
Accordingly, the board of directors is asking the stockholders to indicate their support for the compensation of the company’s named executive officers as described in this proxy statement by casting a non-binding advisory vote “FOR” the following resolution:
“RESOLVED, that the compensation paid to the Company’s named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the compensation tables and narrative discussion, is hereby APPROVED.”
Because the vote is advisory, it is not binding on the board of directors or the company. Nevertheless, the views expressed by the stockholders, whether through this vote or otherwise, are important to management and the board of directors and, accordingly, the board of directors and the compensation committee intend to consider the results of this vote in making determinations in the future regarding executive compensation arrangements. The board of directors has adopted a policy of providing for annual advisory votes to approve executive compensation. Unless the board of directors modifies its policy on the frequency of holding such advisory votes, the next such advisory vote will occur in 2022.2023.
Vote Required for Approval, on an Advisory Basis, of the Compensation of our Named Executive Officers
Approval, on an advisory basis, of the compensation of our named executive officers requires the affirmative vote of a majority of the shares represented at the Annual Meeting, either in person or by proxy, and entitled to vote on the proposal. Abstentions will have the effect of a vote “AGAINST” this proposal.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” THE APPROVAL, ON AN ADVISORY BASIS, OF THE COMPENSATION OF THE COMPANY’S NAMED EXECUTIVE OFFICERS.
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CORPORATE GOVERNANCE
Corporate Governance Guidelines
Our board of directors has developed corporate governance practices to help it fulfill its responsibility to stockholders to oversee the work of management in the conduct of our business and to seek to serve the long-term interests of stockholders. The Company’s corporate governance practices are memorialized in our Corporate Governance Guidelines which direct our board’s actions with respect to, among other things, the composition and director qualifications of our board of directors, the composition of the standing committees of our board of directors, director orientation and continuing education, stockholder communications with our board of directors, succession planning and the annual performance evaluation of our board of directors. A current copy of our Corporate Governance Guidelines is available on our website at http://investor.magnite.com.
Director Independence
Our common stock is listed on the Nasdaq Global Select Market of The Nasdaq Stock Market LLC (“Nasdaq”), which requires that a majority of a listed company’s board of directors be independent. In addition, the rules of Nasdaq require that, subject to specified exceptions, each member of a listed company’s audit, compensation and nominating/corporate governance committees be independent. Under the rules of Nasdaq, a director will only qualify as an “independent director” if, in the opinion of the board of directors, that director does not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.
Our board of directors has undertaken a review of the independence of each director and considered whether each director has any material relationships with us. As a result of this review, our board of directors has determined that Mr. Frankenberg, Ms. Harden, Mr. Knopper, Ms. Lam, Mr. Pearson, Mr. Rossman, Mr. Spillane, Ms. Troe, and Ms. TroeYu are independent directors as defined under the listing requirements and rules of Nasdaq for purposes of service on the board of directors. Mr. Barrett is not considered independent because he currently serves as our Chief Executive Officer. Mr. Caine is not considered independent due to his previous service as Executive Chairman and Interim Chief Executive Officer of Telaria.
In addition to qualifying as “independent” under the listing requirements and rules of Nasdaq, members of the board’s audit committee and compensation committee members must also satisfy additional, heightened independence standards under applicable SEC rules and regulations and Nasdaq listing requirements. Our board of directors has determined that each member of our audit committee and compensation committee satisfies these heightened independence standards.
Board Leadership Structure
Our Corporate Governance Guidelines provide that our board of directors will determine in its discretion from time to time whether the roles of Chairman and Chief Executive Officer should be combined or separated. Our board believes that strong, independent board leadership is a critical aspect of effective corporate governance, and to promote open discussion among our non-management directors, our Corporate Governance Guidelines provide that, when the Chairman is a non-independent director, the independent directors will designate an independent director to act as Lead Director.
In April 2020, upon the completion of the Telaria Merger, Mr. Caine was appointed as Chairman of the board. The responsibilities of the Chairman include: (1) leading and presiding at board meetings; (2) assisting in establishing the agenda for each board meeting, with input from the Lead Director, as appropriate; (3) conferring regularly with CEO andCEO; (4) consulting with the CEO regarding board meeting schedules and agendas; (4)(5) presiding at executive sessions of the Board, other than sessions consisting solely of independent directors; (5)(6) consulting with committees of the board on matters within the scope of their responsibilities; (6)(7) facilitating communications between directors and between directors and senior management; (7)(8) providing feedback between the CEO and directors regarding strategic issues, board management, and potential conflicts; (8)(9) working with appropriate committees of the board to ensure adequate CEO and senior management succession plans are in place; and (9)(10) being available for consultation and communication with major stockholders upon request.
Pursuant to our bylaws, until April 1, 2022, Mr. Caine will serve as Chairman of the board so long as he continues to serve as a member of the board of directors. If Mr. Caine ceases to be a member of the board of directors prior to April 1, 2022, then the board of directors, acting by the affirmative vote of both a majority of the then-serving “Rubicon Project continuing directors” and a majority of the then-serving “Telaria continuing directors” (each as further described below under “—Board Size and Composition”), will elect one of its members to be the Chairman of the board.
Because Mr. Caine is not deemed independent, Robert J. Frankenberg has been appointed and currently serves in the role of Lead Director. The responsibilities of the Lead Director include: (1) presiding at meetings of independent directors; (2) if the Chairman is not present, presiding at board meetings and executive sessions of the board; (3) providing input to the CEO and Chairman with respect to the board agenda and schedule; (4) serving as liaison between the independent directors and the Chairman and/or Chief Executive Officer on sensitive matters; (5) being available for consultation and communication with major stockholders upon request; (6) calling meetings of independent directors; and (7) serving as designated director for reviewing stockholder communications.
Board Size and Composition
Our board of directors consists of nineeleven members. Pursuant to our bylaws, our board of directors will continue to consist of nine directors until at least April 1, 2022, the second anniversary of the completion of the Telaria Merger.
Until April 1, 2022, our board of directors will be comprised of four “Rubicon Project continuing directors” (currently, Robert J. Frankenberg, Sarah P. Harden, Robert F. Spillane and Lisa L. Troe) (or, in the event of a vacancy among the Rubicon Project continuing directors, a replacement director proposed by a majority of the remaining Rubicon Project continuing directors), each of whom shall meet the independence standards of Nasdaq, four “Telaria continuing directors” (currently, Paul Caine, Doug Knopper, Rachel Lam and James Rossman) (or, in the event of a vacancy among the Telaria continuing directors, a replacement Telaria continuing director proposed by a majority of the remaining Telaria continuing directors), at least three of whom shall meet the independence standards of Nasdaq, and our chief executive officer.
Board and Committee Meetings
In 2020,2021, our board of directors met 1916 times, the audit committee met 97 times, the compensation committee met 87 times, and the nominating &and governance committee met 48 times. During 2020,2021, each director attended at least 75% of the aggregate number of board meetings and meetings held by all committees on which the director then served during the time in which he or she served on our board of directors.
Directors are expected to attend the annual stockholders’ meeting absent unusual circumstances. All of our then-serving directors attended the 20202021 annual meeting.
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Board Committees
Our board of directors has established three standing committees – audit, compensation, and nominating &and governance – each of which operates under a written charter that has been approved by our board. Committee membership is indicated in the table above. A current copy of each committee’s charter is posted on the “Corporate Governance” section of our Investor Relations website at http://investor.magnite.com. Each committee reviews and evaluates, at least annually, the performance of the committee and its members and the adequacy of its charter.
Audit Committee
The audit committee is responsible for, among other things, providing assistance to the board of directors in fulfilling its oversight responsibilities regarding the integrity of our financial statements, our compliance with applicable legal and regulatory requirements, the integrity of our financial reporting processes, including our systems of internal accounting and financial controls, the performance of our internal audit function and our independent registered public accounting firm, and our financial policy matters.matters and company practices with respect to risk assessment and risk management. The audit committee approves the services performed by our independent registered public accounting firm and reviews their reports regarding our accounting practices and systems of internal control over financial reporting, as applicable. The audit committee also oversees the audit efforts and confirms the independence of our independent registered public accounting firm. Our board of directors has determined that each member of our audit committee satisfies the financial literacy requirements of the SEC and Nasdaq, and that each of Mr. Pearson, Ms. Troe, Ms. Lam, Mr. Rossman and Mr. Spillane qualifies as an “audit committee financial expert,” as defined in the SEC rules.
Compensation Committee
The compensation committee is responsible for, among other things, overseeing our overall compensation structure, policies and programs, and assessing whether our compensation structure establishes appropriate incentives for officers and employees. The compensation committee also reviews and approves corporate goals and objectives relevant to compensation of our Chief Executive
OfficerCEO and other executive officers, evaluates the performance of these officers in light of those goals and objectives, sets the compensation of these officers based on such evaluations and reviews, and, except with respect to his own compensation, based on the recommendation of the Chief Executive Officer,CEO, determines any employment-related agreements and any proposed severance arrangements or change in control or similar agreements with these officers. The compensation committee also administers the issuance of equity awards under our stock plans and is permitted to delegate such responsibility to our Chief Executive OfficerCEO with respect to employees other than executive officers. The compensation committee has delegated to our Chief Executive Officer authority to approve equity awards, subject to the following limitations: (1) no awards may be granted by the Chief Executive Officer to himself or herself, or to members of the board of directors or any executive officer; (2) no individual may be granted more than 100,000 shares in the aggregate in any rolling 365-day period; (3) no more than 250,000 shares may be granted in the aggregate to all recipients in any calendar quarter, or 1,000,000 shares in the aggregate in any calendar year; and (4) awards must be made on standard terms (e.g., four-year vesting) pursuant to the company’s standard award documents. The compensation committee is also responsible for the preparation of a report on executive compensation, when and as required by the SEC rules, to be included in our Annual Report and annual proxy statement. Our board of directors has determined that each member of our compensation committee qualifies as a “non-employee director,” within the meaning of Rule 16b-3 of the Exchange Act.
The compensation committee has the authority, in its sole discretion, to retain or obtain the advice of such consultants, outside counsel and other advisers as it determines appropriate to assist it in the full performance of its functions, at the company’s expense. Since December 2014, the compensation committee has engaged Semler Brossy Consulting Group, LLC (“Semler Brossy”) annually to act as its independent compensation consultant. During 2020,2021, Semler Brossy’s work with the compensation committee included analysis, advice, and recommendations on total compensation philosophy; peer groups and market assessment and analysis; compensation program design, including program goals, components, and metrics; equity usage and allocation; compensation trends in comparable business sectors and in the general marketplace for senior executives; regulatory factors; severance and change-in-control practices; and the compensation of the chief executive officer and the other named executive officers, including advice on the design of cash-based and equity-based compensation.
Semler Brossy provides analysis and advice regarding our executive compensation practices, including with respect to the amount and form of executive and non-employee director compensation. A representative of Semler Brossy attends meetings at which the compensation committee undertakes significant review of, and/or action with respect to, executive officer or non-employee director compensation. Semler Brossy also consults regularly with the chair of the compensation committee. Semler Brossy reports directly and solely to the compensation committee and performs compensation consulting services for the compensation committee at its request. Semler Brossy is not engaged to perform services directly for our management. The compensation committee has concluded that no conflict of interest exists with respect to its engagement of Semler Brossy nor are there other factors that would adversely impact Semler Brossy’s independence in advising the compensation committee under applicable SEC and Nasdaq rules. The compensation committee reached this conclusion after considering the following six factors, as well as Semler Brossy’s views regarding its independence and other information the compensation committee deemed relevant: (i) the provision of other services to us by Semler Brossy; (ii) the amount of fees received from us by Semler Brossy, as a percentage of the total revenue of Semler Brossy; (iii) the policies and procedures of Semler Brossy that are designed to prevent conflicts of interest; (iv) any business or personal relationship of the Semler Brossy consultants with a member of the compensation committee; (v) any of our stock owned by the Semler Brossy consultants; and (vi) any business or personal relationship of the Semler Brossy consultants or Semler Brossy with any of our executive officers.
Nominating &and Governance Committee
The nominating &and governance committee is responsible for, among other things, developing and recommending to the board of directors criteria for identifying and evaluating candidates for directorships and making recommendations to the board of directors regarding candidates for election or reelection to the board of directors at each annual stockholders’ meeting. In addition, the nominating &and governance committee is responsible for overseeing our Corporate Governance Guidelines and reporting and making recommendations to the board of directors concerning corporate governance matters. The nominating &and governance committee also is responsible for making recommendations to the board of directors concerning the structure, composition and function of the board of directors and its committees. Our board of directors has determined that each member of our nominating &and governance committee satisfies the requirements for independence under the rules and regulations of Nasdaq.
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Director Candidate Nominating Procedures
The process followed by the nominating &and governance committee to identify and evaluate director candidates includes requests for recommendations (which may include through retained third-party search firms, as well as less formal methods such as personal contacts), committee meetings from time to time to evaluate biographical information and material relating to potential candidates, and interviews of candidates by board members. In identifying and evaluating director candidates and determining whether to
nominate any particular candidate, the nominating &and governance committee considers the director candidates’ specific experience, qualifications, attributes and skills, together with the following general characteristics and qualifications, which are set forth in our Corporate Governance Guidelines:
board; and
While•knowledge of sustainability and Environmental, Sustainability and Governance (“ESG”) issues and the nominating & governance committee does not have a formal policy regarding board diversity, itevolving role of the Board in ESG oversight.
Diversity of ethnicity, gender, sexual orientation, cultural background and professional experience is a factor that the nominating &and governance committee takes into account in identifying director nominees. The nominating &and governance committee believes that diversity is important because different points of view and varied board member backgrounds and practical experience can contribute to the quality of the board’s operations and decision-making, and assesses board diversity, among other things, in its periodic assessment of the composition, operation, and effectiveness of the board.
The nominating &and governance committee does not assign specific weights to particular criteria, but does believe that the backgrounds and qualifications of our directors, considered as a group, should provide a composite mix of experience, knowledge and abilities that will facilitate our board’s fulfillment of its responsibilities.
Stockholders may recommend individuals to the nominating &and governance committee for consideration as potential director candidates and inclusion in our proxy statement for the 20222023 annual meeting of stockholders by submitting their names, together with appropriate biographical information and background materials. Such information should be sent to the Nominating &and Governance Committee, c/o Corporate Secretary, Magnite, Inc., 6080 Center Drive, 4th1250 Broadway, 15th Floor, Los Angeles, California 90045.New York, New York 10001. Assuming that appropriate biographical and background material has been provided on a timely basis, the nominating &and governance committee will evaluate stockholder-recommended candidates by following the same process, and applying the same criteria, as it follows for other candidates. If our board determines to nominate a stockholder-recommended candidate, then his or her name will be included in our proxy materials, including our proxy card, for the 20222023 annual meeting of stockholders.
Board Evaluation Process
Our board of directors and each of our standing committees conducts an annual self-evaluation to assess its performance. Each director participates in these evaluations and our General Counsel and the Chair of the nominating &and governance committee then review and discuss the results with the full board. In addition, as part of the process of considering directors for re-election to the board, individual directors are annually informally evaluated by the nominating &and governance committee on the basis of their attendance at meetings and their preparedness, participation, candor and overall contribution to the board, as well as other criteria that the nominating &and governance committee deems appropriate.
Communicating with the Independent Directors
Stockholders and other interested parties who wish to communicate on any topic with our board, or with a specific director or directors, including the Chairman or the independent directors as a group, may address such communications to our board of directors c/o Corporate Secretary, Magnite, Inc., 6080 Center Drive, 4th1250 Broadway, 15th Floor, Los Angeles, California 90045.New York, New York 10001.
Our board of directors will give appropriate attention to written communications that are submitted by stockholders, and will respond if and as appropriate. The Lead Independent Director, with the assistance of our General Counsel and Chief Financial Officer, is primarily responsible for reviewing communications from stockholders and for providing copies or summaries to the other directors as considered appropriate. In accordance with the procedures outlined in Magnite’s Corporate Governance Guidelines, communications (or summaries thereof) that relate to corporate governance, long-term corporate strategy, and other important substantive matters should be forwarded to the other directors, unless there
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is a compelling reason not to forward such communications. In general, the director who reviews such communications may decline to forward communications that relate to ordinary business affairs or personal grievances, or are repetitive or duplicative, unless there is a compelling reason to forward such communications.
Board’s Role in Risk Oversight
Our board of directors exercises oversight of risk management consistent with its duty to direct the management of the business and affairs of the company. The audit committee, pursuant to its charter, is responsible for reviewing company practices with respect to risk assessment and risk management. The audit committee works directly with members of senior management and the company’s internal audit staff to fulfill this responsibility and reports as appropriate to our board. Our board’s other committees also participate in risk oversight by considering risk aspects of matters within the scope of their responsibilities.
Oversight of risk is also effected by our board as a whole in various ways.
The day-to-day identification and management of risk is the responsibility of the company’s management. As the market environment, industry practices, regulatory requirements, and the company’s business evolve, it is expected that management and our board will respond with appropriate adaptations to risk management and oversight.
Our board believes that the process it has established to administer the board’s risk oversight function would be effective under a variety of leadership frameworks and, therefore, does not have a material effect on our choice of the board’s leadership structure described above under “Board Leadership Structure.”
Risk Assessment in Compensation Programs
The compensation committee annually assesses our executive and broad-based compensation and benefits programs on an overall basis to determine whether the programs’ provisions and operations create undesired or unintentional material risk. This risk assessment process takes into account numerous compensation terms and practices that we maintain that aid in controlling risk, including the mix of cash, equity, and near- and long-term incentive programs, the use of multi-year vesting periods for equity awards, and a variety of performance criteria for incentive compensation, the claw-back provisions that apply to our annual incentive cash plan and equity plan, and the cap on the maximum cash incentive awards that can be earned in a given year regardless of company performance. This risk assessment process also includes a review of program policies and practices, program analysis to identify risk and risk controls, and determinations as to the sufficiency of risk identification and risk control, the balance of potential risk to
potential reward, and the significance of the programs and their risks to company strategy. Although the compensation committee reviews all significant compensation programs, it focuses on those programs with variable payout, in particular assessing the ability of participants to directly affect payouts, and the controls on such situations.
Based on the foregoing, we believe that our compensation policies and practices do not create risks that are reasonably likely to have a material adverse effect on the company as a whole. We also believe that our incentive compensation programs do not encourage risk-taking beyond the organization’s ability to effectively identify and manage significant risks; are compatible with effective internal controls and our risk-management practices; and are adequately supported by the compensation committee’s oversight of our executive compensation programs.
Board’s Role in Oversight of Environmental, Social and Governance Matters
We believe that a sustainable business strategy that integrates Environmental, Social,environmental, social and Governance (“ESG”)governance (ESG) considerations is key to creating long-term value for our shareholdersstockholders and our other stakeholders. We have a long history of integrating ESG considerations into our mission, business strategy, and operations, and considering the impact we have on our communities. We are focused on addressing these issues, both risks and opportunities, through our corporate strategy. By operating our advertising platforms in a responsible manner, engaging and developing our diverse workforce, and reducing our environmental impact, we aim to provide more sustainable products and services that deliver long-term value for our clients, employees, communities, investors, and other stakeholders. Our board
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Since the Company’s last annual meeting of directors exercises oversight ofstockholders, we have taken several important steps to advance our ESG matters,strategy, including:
•Conducting our first ESG Priority Assessment to identify the ESG issues that are most impactful to our long-term strategy and our board, executive management teamstakeholders;
•Identifying Magnite’s initial ESG strategy that prioritizes Talent Engagement, Responsible Advertising & Data Governance, and employees are dedicatedEnergy & Environmental Efficiency;
•Establishing an internal ESG Committee to lead the development and continued advancementimplementation of anour ESG strategy and program; and
•Developing a roadmap to implement the strategy and identify near and long-term KPIs and goals.
ESG Leadership & Oversight
Both our Board of Directors and Executive Leadership Team are actively engaged in Magnite’s ESG strategy. To that end, this year,The Board has embraced the responsibility for overseeing our ESG programs and has had robust discussions covering a variety of ESG issues throughout the past year.
In 2021, we will be conductingformalized our internal ESG Committee. This committee consists of senior leaders across the organization representing key business areas, including people, legal, finance, marketing, product management, data operations, and others. The committee is responsible for developing and overseeing the implementation of Magnite’s ESG strategy and related programs, and for providing regular updates to the Executive Leadership Team and Board of Directors.
Process & Priorities
In 2021, we conducted our first sustainabilityESG materiality assessment to identify the topics that are most impactful ESG issues forto our companybusiness. This process took into consideration the priorities of our key stakeholders and our stakeholders.long-term strategic objectives. Through this process, we will identify several strategic focus areasidentified three ESG priorities:
Talent Engagement | Responsible Advertising & | Energy & |
We are dedicated to creating a unifying culture that supports an inclusive, equitable and sustainable work environment to drive employee engagement. | We maintain strong compliance and oversight processes to ensure transparency and responsible advertising on our platforms, while protecting core privacy principles in our collection and use of data. | We are committed to identifying |
We believe that we intend to integrateintegrating relevant ESG considerations into our long-term corporatebusiness strategy is key to delivering on our commitments to our stakeholders. We will continue to engage with our investors and other stakeholders to understand their ESG priorities, and we welcome stockholder perspectives and feedback on our ESG strategy.
For more information about our ESG strategy and business objectives over time.priorities, please visit our ESG website at https://www.magnite.com/esg/.
Human Capital Management
We recognize that our people are committed to fosteringour greatest asset in creating a truly healthy business that delivers great results for employees, clients, stakeholders and maintainingthe communities we touch. We firmly believe in a culture of transparency and trust, and aim to provide ample opportunity for all employees to ask questions, interface with leadership, and express their preferences. We strive to build a culture of excellence that is high-performing and results-oriented while emphasizing collaboration and innovation and promotes diversity, equity, and inclusion. Magnite’s core values of ‘See the big picture’, ‘Raise the bar’, ‘Empower others’, and ‘Own the results’ are guiding principles of the design and implementation of people-centric programs and initiatives across the organization.
As a global employer, we value the diversity of background and experiences that our employees contribute to our company. We strongly believe that a diverse, equitable, and inclusive workplace contributes to ensuring “the best” employee experience. We also believe that it is vital to attracting and retaining talent, which in turn is connected to our ability to create value for our stockholders. In recognition of this, in 20202021 we created thefurther developed our Magnify Council, an employee-led council focused on creating a more diverse, equitableevolving our talent engagement practices and inclusive organization on a global scale. These efforts include, among others, programsensuring we prioritize what matters most to develop diverse talent,employees. This includes driving opportunities for employee growth and supporting external partners that emphasize the global promotion ofdevelopment, enhancing diversity, equity and inclusion. For instance,inclusion initiatives, and investing in our communities based upon employee input.
Examples of how we highlight our cultural values through employee initiatives include:
•We seek individuals who are committed to seeing the big picture and being catalysts of change
•We ask our employees to empower others, make a sponsor ofdifference and ensure our company is an exciting place to work, not just a “job”
•We reward team and individual excellence and are committed to creating an exceptional workplace environment
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•We solicit feedback from our employees in annual engagement surveys
•We believe in continual feedback on performance. Our employees set goals at a regular cadence throughout the year and managers provide achievement ratings
•We have a partnership in place with She Runs It, an organization dedicated to the support and advancement of women in all facets of marketing, media and tech.tech, which includes complimentary memberships for all employees, and access to mentoring programs and ongoing programming
•We support community investment by matching employee donations to certified non-profits and track our impact via corporate donations, partnerships, and investments
•We strivereport DE&I and CSR measures via a bi-annual Transparency Scorecard
•We analyze voluntary employee turnover to buildunderstand and address trends
•We give equity to our employees to promote alignment and ownership
•We have a culture of excellence that is high-performingzero tolerance policy for discrimination and results-oriented while emphasizing transparency, collaboration and innovation. Examples of this mindset include:
harassment
Our employees, and the talent they bring to bear, are our most valuable resource. The global COVID-19 pandemic created unprecedented challenges at thefor our business and personal levels.our people. In response, we took a number of measures to protect the health and safety of our employees, including implementing a work-from-home policy, which we expect to continue in the foreseeable future for the majority of our employees, introducing quarterly mental health days, deploying a global employee assistance program and launching a digital platform with access to live wellness classes and discussions.
Board Diversity
We seek to have a board that represents diversity of ethnicity, gender, sexual orientation, cultural background and professional experience, and the nominating and governance committee takes these factors into account in identifying director nominees. The nominating and governance committee believes that diversity is important because different points of view and varied board member backgrounds and practical experience can contribute to the quality of the board’s operations and decision-making, and assesses board diversity, among other things, in its periodic assessment of the composition, operation, and effectiveness of the board.
Board Diversity Matrix (As of April 14, 2022) | ||||
Board Size: | ||||
Total Number of Directors | 11 | |||
| Female | Male | Non-Binary | Did not Disclose Gender |
Gender: | ||||
Directors | 4 | 7 | — | — |
Number of Directors who Identify in Any of the Categories Below: | ||||
African American or Black | — | — | — | — |
Alaskan Native or Native American | — | — | — | — |
Asian | 2 | — | — | — |
Hispanic or Latinx | — | — | — | — |
Native Hawaiian or Pacific Islander | — | — | — | — |
White | 2 | 7 | — | — |
Two or More Races or Ethnicities | — | — | — | — |
LGBTQ+ | — |
Code of Business Conduct and Ethics
Our board of directors has adopted a Code of Business Conduct and Ethics that applies to each of our directors, officers and employees. The full text of our Code of Business Conduct and Ethics is posted on the “Corporate Governance” section of our Investor Relations website at http://investor.magnite.com. We intend to post any amendment to our Code of Business Conduct and Ethics, and
any waivers of the Code for directors and executive officers, on the same website to the extent required by rules adopted by the SEC and Nasdaq.
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Policy Against Hedging
and Pledging
We recognize that hedging against losses in company shares may disturb the alignment between stockholders and employees that our equity awards are intended to build. Accordingly, we have incorporated prohibitions on various hedging activities within our Insider Trading Policy, which applies to directors, officers and certain employees who we have designated as insiders, as well as such persons’ family members, life partners, or owned or controlled entities. The policy prohibits all transactions that are designed to hedge or offset any decrease in the market value of our securities, including prepaid variable forward contracts, equity swaps, futures, collars, exchange funds, options, puts and calls. The policy also prohibits short salespledging shares of our securitiescommon stock as security as well as short sales and purchases or sales of puts or calls for speculative purposes.
Compensation Committee Interlocks and Insider Participation
Ms. Harden and Messrs. Knopper, Rossman, Frankenberg, Coleman and SpillaneFrankenberg served on the company’s compensation committee during the last completed fiscal year. At the closing of the Telaria Merger on April 1, 2020, Mr. Knopper and Mr. Rossman were appointed to the board of directors and commenced service on the compensation committee, Mr. Spillane ceased serving as a member of the compensation committee and Mr. Coleman resigned as a member of the board of directors and member of the compensation committee. None of the members of the compensation committee is or has at any time been an officer or employee of the company. There are no interlocking relationships (and there were no such interlocking relationships during 2020)2021) between our board of directors, executive officers or the compensation committee, on the one hand, and the board of directors, executive officers or the compensation committee of any other company, on the other hand.
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DIRECTOR COMPENSATION
Each member of our board of directors who is not employed by us or any of our subsidiaries, referred to as a non-employee director, is compensated for service on our board through a combination of annual cash retainers and equity awards. For purposes of our director compensation program, a non-employee director is a member of our board who is not, and has not been within the previous 180 days, either an employee of ours or any of our subsidiaries or a consultant performing material services to us or any of our subsidiaries. In order to align the interests of non-employee directors and stockholders, equity awards constitute a majority of total director compensation.
Directors are reimbursed for travel, food, lodging and other expenses directly related to their activities as directors, such as attendance at board or committee meetings. Directors are also entitled to the protection provided by their indemnification agreements and the indemnification provisions in our certificate of incorporation and bylaws, and they receive coverage under a director and officer insurance policy that we maintain.
2020 Market Assessment2021 Annual Cash Fees
In early 2020, in connection with the Telaria Merger, the compensation committee engaged Semler Brossy to perform a comprehensive review of non-employee director pay to ensure the programs were competitive and reflective of the larger, combined company going forward. Following the close of the merger in April 2020, the following changes were made: the membership cash retainer was increased to $50,000 (from $30,000) and the Chairman retainer for Mr. Caine’s role as non-employee Chairman was established at an additional $50,000 for his leadership role.
For 2020,2021, directors received annual cash retainer fees as described in the table below for board and committee service. The fees are paid in four equal quarterly advance installments and prorated for any partial year of board service.
Position | Retainer ($) | |
Board Member | | 50,000 |
Audit Committee Chair | | 20,000 |
Compensation Committee Chair | | 12,500 |
Nominating | | 7,500 |
Audit Committee Member | | 10,000 |
Compensation Committee Member | | 5,000 |
Nominating | | 3,500 |
Board Chairman | | 50,000 |
Lead Director | ||
| 15,000 |
2021 Market Assessment and 2022 Annual Cash Fees
In late 2021, the compensation committee engaged Semler Brossy to perform a comprehensive review of non-employee director pay to ensure the programs were competitive and reflective of the larger size of the company going forward. On November 18, 2021, our board of directors approved revised annual cash retainer fees, commencing January 1, 2022 as described in the table below for board and committee service
For 2022, directors will receive the following annual cash retainer fees for board and committee service. The fees are paid in four equal quarterly advance installments and prorated for any partial year of board service.
Position | Retainer ($) | |
Board Member | | 50,000 |
Audit Committee Chair | | 24,000 |
Compensation Committee Chair | | 15,000 |
Nominating and Governance Committee Chair | | 10,000 |
Audit Committee Member | | 12,000 |
Compensation Committee Member | | 7,500 |
Nominating and Governance Committee Member | | 5,000 |
Board Chairman | | 75,000 |
Lead Director | | 15,000 |
Equity Awards
EquityIn 2021, equity compensation for non-employee directors consistsconsisted of (i) an initial equity award with a calculated value of $375,000 for each newly-elected or appointed non-employee director, and (ii) annual awards with a calculated value of $125,000. On November 18, 2021, our board approved an increase in the value of annual awards to $170,000, commencing with the annual equity awards granted in 2022. For 2020,2021, equity awards for directors consisted solely of restricted stock units (“RSUs”) covering a number of shares determined by dividing the calculated value of the award by the closing20-day trailing average of the Company’s stock price of a share of our common stock on the grant date.
The initial equity award is granted on the date of appointment to the board or attainment of non-employee director status, unless the board or compensation committee specified another issuance date. Annual equity awards are issued on the date of each annual meeting or the date of attainment of non-employee director status. If no intervening annual meeting has been held, annual equity awards will be granted on a date specified by the compensation committee that is at least 30 calendar days after the first anniversary of
the prior year’s annual meeting. The first annual award for non-employee directors who join the board at any time other than the date of an annual meeting is subject to proration for the partial year of service ending on the date of the next annual meeting.
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Initial equity awards vest, subject to continued board service, in three equal annual increments, on the first, second, and third anniversaries of the date of commencement of board service or attainment of non-employee director status or, if earlier, upon (but effective immediately prior to) the occurrence of a change in control of Magnite. Annual equity awards vest, subject to continued board service, on the first anniversary of the date of grant or, if earlier, upon the occurrence of either (1) a change in control of Magnite (effective immediately prior thereto) or (2) the first regular annual meeting occurring in the year immediately following the year in which such annual equity awards were granted. In addition, if a non-employee director ceases board service for any reason other than removal for cause before vesting in full of equity awards, then the director’s awards vest with respect to a pro-rata portion of the underlying shares (up to but not exceeding the number of unvested shares remaining subject to such awards) determined based upon the period of board service. Vesting of equity awards will cease, and unvested equity awards will lapse, upon a recipient’s removal for cause from board service.
Director Equity Retention Guidelines
Under our equity retention guidelines implemented by the board in April 2016, each director is required to accumulate within five years from the later of the date the guidelines were implemented and the date of commencement of service for a new director, and thereafter to retain for the duration of board service, an amount of equity equal to five times the director’s base board cash compensation. Equity that counts toward the ownership requirement includes: (1) shares owned outright by the director or beneficially owned by the director by virtue of being held by a member of the director’s immediate family members residing in the same household or in a trust for the benefit of the director or his or her immediate family residing in the same household; (2) shares held in qualified plans or IRAs; (3) vested shares (or vested restricted stock units) deemed to be held in non-qualified plans; (4) the in-the-money portion of vested stock options (but not unvested stock options); and (5) unvested time-based restricted shares (or restricted stock units). Until the minimum level of company equity is achieved, a director is prohibited from selling or otherwise transferring beneficial ownership of more than one-half of: (a) the vested after-tax shares of our common stock obtained as a result of the vesting of any restricted stock or restricted stock unit award made after implementation of the equity retention guidelines; or (b) the shares of our common stock subject to the vested portion of any stock option award made after implementation of the equity retention guidelines, net of any shares surrendered or sold to cover exercise price and/or income tax resulting from the exercise.
2021 Director Compensation Table
The following table sets forth all compensation provided to our non-employee directors for 2020.2021. The compensation for Mr. Barrett, our Chief Executive Officer, is described in the “Executive Compensation” section below. Mr. Barrett did not receive any compensation for his services as a director in 2020. 2021.
Name | Fees Earned | Stock | Option | Total ($) |
Paul Caine | $106,250 | $144,963 | — | $251,213 |
Robert Frankenberg | $70,625 | $144,963 | — | $215,588 |
Sarah P. Harden | $55,625 | $144,963 | — | $200,588 |
Doug Knopper | $67,000 | $144,963 | — | $211,963 |
Rachel Lam | $64,375 | $144,963 | — | $209,338 |
David Pearson(5) | — | — | — | — |
James Rossman | $66,125 | $144,963 | — | $211,088 |
Robert F. Spillane | $68,625 | $144,963 | — | $213,588 |
Lisa L. Troe | $74,875 | $144,963 | — | $219,838 |
Diane Yu(5) | — | — | — | — |
(1)Consists of annual board retainer and fees for service as Chairman, a committee chair, committee member, or Lead Independent Director, as the case may be. See the narrative disclosure above for a description of such fees.
(2)In April 2020,accordance with the compensation committee approved a temporary 30% base salary reductionrules of the SEC, these amounts represent the aggregate grant date fair value of the stock awards and option awards granted to the non-employee directors during the fiscal year computed in accordance with ASC 718. Our equity awards valuation approach and related underlying assumptions for awards granted in 2021 are described in Note 2 “Organization and Summary of Significant Accounting Policies—Stock-Based Compensation” and Note 13 “Stock-Based Compensation” to the Board Cash Retainer in response to COVID-19 and the associated reductionConsolidated Financial Statements in our workforceAnnual Report on Form 10-K. The reported amounts do not necessarily reflect the value that may be realized by the non-employee director with respect to the awards, which will depend on future changes in stock value and cost-cutting initiatives.may be more or less than the amount shown. The Board Cash Retainers were reinstated in October 2020.number of shares granted to directors was determined by dividing the approved value of the award ($125,000) by the 20-day trailing average of the Company’s stock price on the grant date, and accordingly the grant date fair value of the stock awards may differ from the value of the approved award.
Name | Fees Earned | Stock | Option | Total ($) |
Frank Addante(5) | —
| — | — | — |
Paul Caine(6) | $85,000 | $125,000 | — | $210,000 |
Lewis W. Coleman(7) | — | — | — | — |
Robert Frankenberg | $59,500 | $125,000 | — | $184,500 |
Sarah P. Harden | $46,750 | $125,000 | — | $171,750 |
Doug Knopper(6) | $56,100 | $125,000 | — | $181,100 |
Rachel Lam(6) | $53,975 | $125,000 | — | $178,975 |
James Rossman(6) | $55,250 | $125,000 | — | $180,250 |
Robert F. Spillane | $57,375 | $125,000 | — | $182,375 |
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(3)Stock awards for 2021 consisted of an annual award of 3,936 restricted stock units granted on June 28, 2021 to each director serving on our board at such time. As of December 31, 2021, the aggregate number of shares of our common stock covered by unvested stock awards held by each of our non-employee directors was as follows:
Paul Caine | 3,936 | ||
Robert J. Frankenberg | 3,936 | ||
Sarah P. Harden | 22,818 | ||
Doug Knopper | 3,936 | ||
Rachel Lam | 3,936 | ||
David Pearson(5) | — | ||
James Rossman | 3,936 | ||
Robert F. Spillane | 3,936 | ||
Lisa L. Troe | 3,936 | ||
Diane Yu(5) | — |
(4)As of December 31, 2021, the aggregate number of shares of our common stock covered by stock options held by each of our non-employee directors was as follows:
Paul Caine | — |
Robert J. Frankenberg | 86,500 |
Sarah P. Harden | — |
Doug Knopper | — |
Rachel Lam | — |
David Pearson(5) | — |
James Rossman | — |
Robert F. Spillane | 86,500 |
Lisa L. Troe | 66,708 |
Diane Yu(5) | — |
(5)Mr. Addante resigned from the Board effective April 1, 2020, at the closing of the Telaria Merger.
(6)Pearson and Ms. Lam and Messrs. Caine, Knopper and RossmanYu were appointed to the Board, effective April 1, 2020, at the closing of the Telaria Merger.March 21, 2022.
(7) Mr. Coleman resigned from the Board effective April 1, 2020, at the closing of the Telaria Merger.
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REPORT OF THE AUDIT COMMITTEE
OF THE BOARD OF DIRECTORS
The audit committee of Magnite’s board of directors is composed of fourfive members and acts under a written charter that has been approved by Magnite’s board of directors. The members of the audit committee are independent directors, based upon standards set forth in applicable laws, rules, and regulations. The audit committee has reviewed and discussed the audited financial statements with management, and has discussed with Magnite’s independent registered public accounting firm, Deloitte &and Touche LLP (“Deloitte”) the matters required to be discussed by the applicable standards of the Public Company Accounting Oversight Board and the SEC.
The audit committee has also received the written disclosures and the letter from Deloitte required by the applicable requirements of the Public Company Accounting Oversight Board regarding Deloitte’s communications with the audit committee concerning independence, and has discussed with Deloitte its independence.
Management is responsible for the company’s financial reporting process and the system of internal controls, including internal control over financial reporting, and procedures designed to promote compliance with accounting standards and applicable laws and regulations. Deloitte is responsible for the audit of the consolidated financial statements. The audit committee’s responsibility is to monitor and oversee these processes and procedures.
The audit committee’s meetings facilitate communication among the members of the audit committee, management, the internal auditors, and Deloitte. The audit committee separately met with each of the internal auditors and Deloitte, with and without management, to discuss the results of their examinations and their observations and recommendations regarding Magnite’s internal controls. The audit committee also met separately with management.
Based on its discussions with management and the independent accounting firm, and its review of the representations and information provided by management and Deloitte, the audit committee recommended to Magnite’s board of directors that Magnite’s audited financial statements for the fiscal year ended December 31, 20202021 be included in Magnite’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020,2021, which was filed with the SEC on February 25, 2020.
23, 2022.
By order of the audit committee of the board of directors of Magnite,
| AUDIT COMMITTEE |
| David Pearson, Chair*
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*Mr. Pearson joined the audit committee on March 1, 2022.
The preceding Report of the Audit Committee shall not be deemed filed under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent the Company specifically incorporates this report by reference into a filing under either of such Acts. The report shall not be deemed soliciting material, or subject to Regulation 14A or 14C or the liabilities of Section 18 of the Exchange Act.
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EXECUTIVE OFFICERS
The table below sets forth certain information regarding our executive officers as of May 4,April 14, 2022. Mr. Buckley and Mr. Dove joined the company at the closing of the acquisition of SpotX, Inc. on April 30, 2021.
Name | Age | Position |
Michael G. Barrett | 60 | Chief Executive Officer and Director |
Sean Buckley | 34 | Chief Revenue Officer |
David L. Day | 60 | Chief Financial Officer |
J. Allen Dove | 52 | Chief Technology Officer |
Katie Evans | 36 | Chief Operating Officer |
Brian Gephart | 43 | Chief Accounting Officer |
Aaron Saltz | 41 | General Counsel and Secretary |
Adam Soroca | 49 | Chief Product Officer |
Michael G. Barrett. See “Proposal 1: Election of Directors” for Mr. Barrett’s biography.
Sean Buckleyhas served as our Chief Revenue Officer since January 2022. Prior to that, Mr. Buckley served as our Chief Revenue Officer, CTV, since May 2021. Previously, he served as the Chief Operating Officer for SpotX, Inc. from January 2020 to June 2021, Chief Revenue Officer from January 2017 to January 2020, SVP, Global Revenue from July 2014 to January 2017, and Vice President, Platform from June 2013 to July 2014. Mr. Buckley holds a B.S. in Business Administration from Northeastern University.
David L. Day has served as our Chief Financial Officer since May 2016 and served as our Chief Accounting Officer from March 2013 to August 2017. From May 2011 to March 2013, Mr. Day served as the Chief Accounting Officer at ReachLocal, Inc., a public company servicing small and medium-sized businesses as their digital ad agency. Prior to that, Mr. Day provided finance and accounting-related consulting services to technology and telecommunications companies and was co-founder of SignJammer Corporation, a start-up in the out-of-home advertising market, from 2008 to 2011. His career also includes experience as Vice President of Finance for Spot Runner, a technology-based ad agency for small and medium-sized business, Senior Vice President of Finance for Yahoo! Search Marketing, Senior Vice President of Finance and Corporate Controller of Overture, and public accounting experience with PricewaterhouseCoopers and Arthur Andersen. Mr. Day holds a B.S. in Accounting from Brigham Young University.
J. Allen Dove has served as our Chief Technology Officer since May 2021. Previously, he served as the Chief Technology Officer for SpotX, Inc. since March 2007. Prior to SpotX, Mr. Dove was a founder and Chief Technology Officer of ShadowLogic Inc., an information assurance and national security solutions engineering firm. He also served as the Chief Technology Officer of AppNet, Inc., a company publicly traded and subsequently acquired by Commerce One in April 2000.
Katie Evans has served as our Chief Operating Officer since September 2020. From April 1, 2020 through August 2020, Ms. Evans served as the Company’s General Manager, CTV. Previously, she served as Senior Vice President and Chief Operating Officer of Telaria from March 2017 to April 2020 and as Senior Vice President, Strategy &and Operations, from November 2015 to March 2017. Ms. Evans holds a B.S. in Business Administration from the University of Richmond.
Shawna HughesBrian Gephart has served as our Chief Accounting Officer since June 2020 and as our Chief People Officer since January 2021. From July 2018 through the closing of the Telaria Merger in April 2020, she served as Head of Global Human Resources. From 2015 to 2018, she served as Vice President of People Operations. Prior to joining the Company, Mr. Gephart served as the Chief Financial Officer and principal financial officer of Leaf Group, a diversified consumer internet company that builds enduring, creator-driven brands that reach passionate audiences in large and growing lifestyle categories, since May 2020, and as Chief Accounting Officer and principal accounting officer from June 20072019 to November 2015, Ms. HughesMay 2020. Prior to joining Leaf Group, Mr. Gephart served as Chief Accounting Officer of JH Capital Group, a diversified specialty finance company providing a wide array of solutions for consumers and businesses across a broad range of assets, from August 2017 to April 2019. Prior to joining JH Capital Group, Mr. Gephart was a Director at PricewaterhouseCoopers LLP specializing in the rolesCapital Markets & Accounting Advisory Services, from July 2011 to August 2017, where he advised a variety of Senior Director of International Accounting, Director of Revenue Accounting,private and Director of Diversitypublic companies on capital market transactions, mergers and Inclusion at Concur Technologies, Inc. Ms. Hughes holdsacquisitions and financial reporting and accounting matters. Mr. Gephart received a Bachelor of Sciencebachelor’s degree in International Business from George Fox University and a Master of Accounting from the University of Notre DameHillsdale College and an M.B.A. from DePaul University. Mr. Gephart is a Certified Public Accountant.
Thomas Kershaw has served as our Chief Technology Officer since October 2016. Previously, Mr. Kershaw served as Director of Product Management of Google from March 2013 to October 2016, and Senior Vice President and General Manager of the Iconectiv business unit of Ericsson, a communications technology company, from March 2008 to March 2013. Mr. Kershaw has also held executive positions at VeriSign, Clarent Corporation and Unisys, and was Chief Technical Officer of SS8 Networks.
Joseph Prusz has served as our Chief Revenue Officer since December 2017 and is responsible for maintaining and growing our revenue stream across all formats, channels, and inventory types. Prior to that, since joining the company in September 2008, Mr. Prusz had various roles of increasing responsibility in our sales department, including leading the Americas region and serving as Head of Mobile.
Aaron Saltzhas served as our General Counsel and Corporate Secretary since April 1, 2020. Previously, Mr. Saltz served as General Counsel of Telaria from November 2015 to April 2020 and as Vice President, Associate General Counsel from January 2013 to October 2015. Prior to Telaria, Mr. Saltz worked as an attorney in the mergers &and acquisitions department of Skadden, Arps, Slate, Meagher &and Flom LLP from 2005 to 2013. Mr. Saltz holds a B.A. from Cornell University and a J.D. from the Harvard Law School.
Adam Soroca has served as our Head of Global Buyer Team since our acquisition of nToggle, Inc. in July 2017. Mr. Soroca co-founded nToggle in September 2014 and served as its Chief Executive Officer and a member of the board of directors until nToggle’s sale to the company. Prior to founding nToggle, Mr. Soroca was the chief product officer at Millennial Media (via acquisition of Jumptap) from November 2013 to July 2014, where he oversaw the global product and operations teams. Prior to Millennial Media, from June 2005 to November 2013, Mr. Soroca was the chief product officer and a founding leadership team member at Jumptap, the leading mobile programmatic and audience platform. Mr. Soroca serves as an advisor at CoachUp, Inc., viisights and Chalk Digital. He pioneered bringing both audience data (DMP) and programmatic capabilities (DSP) to the mobile industry. He is a digital advertising entrepreneur and inventor, holding over 90 awarded patents spanning mobile advertising and search techniques. Mr. Soroca holds a B.A. in Economics and Computer Literacy from Middlebury College.
Election of Officers
Our executive officers are elected by, and serve at the discretion of, our board of directors. There are no family relationships among any of our directors or executive officers.
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EXECUTIVE COMPENSATION
CompensationDiscussion and Analysis
Introduction
This Compensation Discussion and Analysis describes the compensation arrangements we had for 20202021 with ourthe following “named executive officers,” as determined under the rules of the SEC and identified in the summary compensation table below.below:
Name | Position | |
Michael G. Barrett | | President and Chief Executive Officer |
Sean Buckley | | Chief Revenue Officer |
David L. Day | | Chief Financial Officer |
J. Allen Dove | | Chief Technology Officer |
Katie Evans | | Chief Operating Officer |
Executive Summary
Financial and Business Highlights. In 20202021,we continued to demonstrate strong financial and strategic operational performance, building upon significant work we have done in re-calibratingtransforming and accelerating the business over the past several years. Notable results include:
Compensation Highlights. Our compensation programs are designed to support creation of stockholder value while maintaining our ability to recruit and retain personnel. For 2020,2021, the compensation committee took the following key actions:
• Continued the performance-based equity program for Mr. Barrett’s annual grant in 2021 based on three-year relative total stockholder return (TSR) against the Russell 2000 index;
• Made a one-time special equity award (in the form of RSUs and PSUs) to the CEO to further support his retention and provide an additional retention-focused equity grantincentive to Ms. Evans shortlydrive the next phase of growth following the closing ofrecent transactions. For more information on this award, please refer to the Telaria transaction to recognize the criticality of her role in our success going forward;
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CEO Pay and Performance (2017-2020)(2017-2021). The compensation committee’s pay actions during Mr. Barrett’s tenure reflect his leadership, deep industry experience, and a recognition that he wasis the right chief executive to leadsuccessfully execute the company through the successful execution of the business turn-aroundcompany’s strategic vision and leadinglead the next phase of growth.
CEO One-Time Equity Award. Throughout the year, the compensation committee worked with Semler Brossy to develop a one-time special equity award for Mr. Barrett to further support the retention of Mr. Barrett and provide an additional incentive to drive the next phase of growth following the recent transactions. In August 2021, the compensation committee granted Mr. Barrett a one-time heavily performance-based equity award with an approved value of $12.0 million. The award consisted of (i) time-based RSUs, with a value of $4.0 million (with the number of shares issued calculated based on the 20-day trailing average from the date of grant) and (ii) PSUs, with a value of $8.0 million (with the number of shares issued calculated based on an estimated fair value as of the grant date), which will be earned only if rigorous share price hurdles are achieved over a five-year performance period. The compensation committee calibrated the size of the award to ensure that the one-time award was significantly performance-based, and when including the annual award received earlier in the year (which includes the relative TSR PSU vehicle), more than 50% of all equity received during fiscal year 2021 would be performance-based. The size of the award also considered the meaningful growth requirements over the performance period for all shares to be earned.
The compensation committee considered the following factors as it contemplated granting Mr. Barrett the one-time award:
• Mr. Barrett’s strong performance and a desire to incentivize and reward him for sustainable and market leading performance over the next five years;
• Mr. Barrett’s current level of compensation relative to the CEO compensation of our peer group;
• Mr. Barrett’s successful integration of legacy Telaria and the completion of the SpotX and SpringServe transactions;
• The percentage of Mr. Barrett’s roletotal equity holdings that remain unvested; and
• The necessity of providing an award that would be meaningful in size and design for retention purposes.
The one-time PSU award is consistent with a scaled company
2020 Compensation Actions in ResponseMagnite’s “pay for performance” philosophy to COVID-19. In April 2020,further incentivize Mr. Barrett to drive long-term stockholder value creation through meaningful stock price targets over the compensation committee approved a temporary 30% base salary reduction for the CEO and a temporary 30% Board Cash Retainer reduction for our Board of Directors in response to COVID-19 and the associated reduction in our workforce and cost cutting initiatives. The CEO’s base salary and Board Cash Retainers were reinstated in October 2020 after our business had largely recovered from the initial effects of COVID-19. The compensation committee will continue to monitor and assess the impactfive-year performance period. Highlights of the global pandemicaward include:
• Estimated fair value of $8.0 million (379,365 shares);
• Share price performance is measured over a five-year period ending August 26, 2026;
• Consists of three equal tranches that are earned based on achieving a 60-day trailing average share price of $60.00, $80.00 and may take action (if appropriate)$100.00, respectively;
• Vesting is backloaded so that any PSUs that satisfy the applicable share price hurdle(s) are subject to service-based vesting on the 3rd, 4th, and 5th anniversary of grant;
• The performance measurement does not start until one-year from grant to ensure outcomes align with overall performance shareholder experience,is sustained over the long-term; and our underlying compensation philosophy. No other adjustments or modifications were made
• The award is subject to forfeiture if the company’s incentive programs as a resultstock price conditions are not met during the performance period.
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NOTE: If hurdles are met before the 3rd anniversary, the earned shares will vest equally on the 3rd, 4th and 5th anniversary of the COVID-19 pandemic.grant date, subject to continued service through the grant date. If all hurdles are met after the 3rd anniversary and before the 4th anniversary, 1/3 will vest upon achievement with the remaining shares vesting equally on each of the 4th and 5th anniversary of the grant date, subject to continued service through each such date. If all hurdles are met after the 4th anniversary and before the 5th anniversary. 2/3 will vest upon achievement with the remaining shares vesting on the 5th anniversary of the grant date, subject to continued service through each such date.
The one-time award of RSUs were valued at approximately $4.0 million (136,939 shares) and vest one-third on each of the 2nd, 3rd, and 4th anniversary of the grant date.
Consideration of 20202021 Say on Pay Vote. At our 20202021 annual meeting of stockholders, stockholders showed support for our executive compensation program, with 91.6%86.9% of the votes cast approving the compensation paid to our named executive officers. After considering the results of the fiscal 20202021 Say-on-Pay advisory vote, the compensation committee determined that our practices remained appropriate.appropriate and did not make any changes to our compensation philosophy as a result of the vote. The Magnite compensation committee values the perspectives of our stockholders and continues to consider the results of Say-on -Pay votes and stockholder feedback when reviewing our executive compensation program.
Executive Compensation Governance. Our executive compensation program includes a number of features intended to reflect best practices in the market and help ensure that the program reinforces our stockholders’ interests. These features are described in more detail below in this Compensation Discussion and Analysis and include the following:
What We Do: | What We |
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Executive Compensation Philosophy and Objectives
The compensation committee conducts an annual review of our executive compensation program to help ensure that: (1) the program is designed to align the interests of our named executive officers with our stockholders’ interests by rewarding performance that is tied to creating stockholder value; and (2) the program provides a total compensation package for each of our named executive officers that we believe is competitive and necessary to attract and retain talent.
We accomplish these objectives by providing a total compensation package that includes three main components: base salary, annual performance-based cash awards and long-term equity-based awards. We believe that in order to attract and retain top executives, we need to provide them with compensation levels that reward their continued service. Some of the elements, such as base salaries and annual cash awards, are paid out on a short-term or current basis. Other elements, such as equity awards that are subject to multi-year vesting schedules and benefits provided upon certain terminations of employment, are paid out on a long-term basis. We believe this mix of short- and long-term elements allows us to achieve our goals of attracting, retaining and motivating our top executives. We also, in certain cases, provide our named executive officers with certain relocation and other benefits in connection with their joining us.
In structuring executive compensation packages, the compensation committee considers how each component promotes retention and motivates performance. Base salaries, severance and other termination benefits are primarily intended to attract and retain highly qualified executives. These elements of our executive compensation program are generally not dependent on performance. Annual cash bonus opportunities provide further incentives to achieve performance goals specified by the compensation committee and long-term equity awards provide incentives to help create value for our stockholders and continue employment with us through specified vesting dates.
Payment of our annual performance-based cash awards is solely contingent upon the achievement of financial performance metrics. The amount of compensation ultimately received for these awards varies with our annual financial performance, thereby providing additional incentives to achieve short-term or annual goals that we believe will maximize stockholder value over the long term.
We believe that by providing a significant portion of our named executive officers’ total compensation package in the form of equity-based awards, we are able to create an incentive to build stockholder value over the long-term and more closely align the interests of our named executive officers to those of our stockholders. Our annual equity awards to the named executive officers for 20202021 consisted of performance sharesPSUs (for the CEO only), stock options and restricted stock unit awards, which generally only vest if
the executive remains employed with us through the vesting date.
Compensation Determination Process
The compensation committee considers, determines, reviews, and revises all components of each named executive officer’s compensation. It may not delegate that responsibility. The compensation committee also has oversight of and consults with management regarding executive and non-executive employee compensation plans and programs, including administration of our equity incentive plans.
The compensation committee retains an independent executive compensation consultant, Semler Brossy Consulting Group, LLC, referred to as Semler Brossy, to provide input, analysis, and consultation about our executive compensation. During 2020,2021, Semler Brossy’s work with the compensation committee included analysis, advice, and recommendations on total compensation philosophy; peer groups and market assessment and analysis; compensation program design, including program goals, components, and metrics; equity usage and allocation; compensation trends in comparable business sectors and in the general marketplace for senior executives; regulatory factors; and the compensation of the chief executive officer and the other named executive officers, including advice on the design of cash-based and equity-based compensation.
Semler Brossy reports directly and solely to the compensation committee and performs compensation consulting services for the compensation committee at its request. Semler Brossy is not engaged to perform services directly for our management. The compensation committee has concluded that no conflict of interest exists with respect to its engagement of Semler Brossy nor are there other factors that would adversely impact Semler Brossy’s independence in advising the compensation committee under applicable SEC and Nasdaq rules. The compensation committee reached this conclusion after considering the following six factors, as well as Semler Brossy’s views regarding its independence and other information the compensation committee deemed relevant: (i) the provision of other services to us by Semler Brossy; (ii) the amount of fees received from us by Semler Brossy, as a percentage of the total revenue of Semler Brossy; (iii) the policies and procedures of Semler Brossy that are designed to prevent conflicts of interest; (iv) any business or personal relationship of the Semler Brossy consultants with a member of the compensation committee; (v) any of our stock owned by the Semler Brossy consultants; and (vi) any business or personal relationship of the Semler Brossy consultants or Semler Brossy with any of our executive officers.
Executive officers do not propose or seek approval for, or have any decision-making authority with respect to, their own compensation. Executive officers are also not present during any deliberations or determinations of their pay or performance. The chief executive officer makes recommendations to the compensation committee on the base salary, annual incentive cash targets, and equity awards for each named executive officer other than himself, based on his assessment of each executive officer’s performance during the year and other factors, including compensation survey data and input from Semler Brossy.
Performance reviews for the chief executive officer and other named executive officers include factors that may vary depending on the role of the individual officer, including strategic capability—how well the executive officer identifies and develops relevant business strategies and plans; execution—how well the executive officer executes strategies and plans; and leadership capability—how well the executive officer leads and develops the organization and its people. The compensation committee conducts an annual performance review of the chief executive officer to evaluate the company’s performance, his performance and the performance of the management team and considers this review in determining the chief executive officer’s base salary, annual performance-based cash incentive target, and equity awards.
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We have engaged in discussions regarding our compensation philosophy with several of our large stockholders, and we intend to engage in further compensation-related discussions from time to time at such stockholders’ request. Additionally, at our 2021 annual meeting, stockholders will have an opportunity to cast an advisory vote to approve the compensation programs of our named executive officers, referred to as the Say-On-Pay Vote.
Peer Group Compensation Assessment
The compensation committee works with Semler Brossy periodically to select a peer group of companies in our industry to assist the committee in making its compensation decisions. Although the compensation committee reviews and discusses the peer company compensation data provided by Semler Brossy to help inform its decision-making process, the compensation committee does not set compensation levels at any specific level or percentile against the peer group data. The peer company data is only one point of information taken into account by the compensation committee in making compensation decisions.
In July 2019,2020, following the successful integration of Telaria and prior to the announced Telaria transaction,acquisitions of SpotX and SpringServe, the compensation committee, with assistance from Semler Brossy, reviewed the current peer group companies of both legacy Rubicon Project and legacy Telaria. The Committee determined that for 2020 several peers2021, the peer group would contain peer companies from the two legacy peer groups as well as some new peer group companies to reflect the increased scope and scale of the combined Magnite. Five new companies were too large and had substantially different market multiples than the legacy Rubicon Project organization at the time. The assessment ledadded to the removal of five companies (AppFolio, Five, Qualys, QuinStreetpeer group that were not in either legacy peer group (Quotient Technology, LiveRamp, LivePerson, Eventbrite, and Quotient Technology) and the addition of three new companies (Cardlytics, EverQuote and Fluent)DHI Group). The added companies were selected based on several criteria, including being similar in size, favoring companies based in California or
New York, and having a reasonably comparable business.
Fiscal 2020 Peer Group
In early 2020, and following the announcement of the Telaria transaction, Semler Brossy determined that the peer group (excluding Telaria) continued to remain appropriate when establishing 2020 pay levels due to balanced relative positioning around median on several key metrics and recommended that the committee re-assess the peer group in July 2020 to reflect the go-forward combined company.
Fiscal 2021 Peer Group | ||
Brightcove | EverQuote | QuinStreet |
Cardlytics | Fluent | Quotient Technology |
ChannelAdvisor | LivePerson | SPS Commerce |
comScore | LiveRamp | TechTarget |
DHI Group | Marchex | TrueCar |
Digital Turbine | Model N | Upland Software |
Eventbrite | PROS Holdings | |
Current Executive Compensation Program Elements
The current elements of our executive compensation program are:
•base salaries;
•annual performance-based cash awards;
•equity-based incentive awards; and
•certain additional employee benefits.
We strive to achieve an appropriate mix between the various elements of our compensation program to meet our compensation objectives and philosophy; however, we do not apply any rigid allocation formula in setting our named executive officers’ compensation, and we may make adjustments to this approach for various positions after giving due consideration to prevailing circumstances.
As discussed throughout this Compensation Discussion and Analysis, the compensation policies and programs applicable to our named executive officers reflect our emphasis on aligning the interests of our executive officers with our stockholders’ interests in enhancing our value over the long term. Applying this philosophy, a significant portion of overall compensation opportunities offered to our named executive officers is in the form of (i) equity-based compensation with a value directly linked to our stock price and (ii) annual performance-based cash awards contingent upon achievement of measurable financial objectives.
Base Salaries
Base salaries for our named executive officers are designed to be competitive when compared with similarly situated executives within our peer group, and are based on a variety of factors, including level of responsibility, performance, and the recommendations of the chief executive officer for named executive officers other than the chief executive officer. Base salaries are reviewed annually or at the time of promotion or other changes in responsibilities. In determining whether to award base salary increases, the compensation committee considers our overall business outlook, our budget, the executive’s individual performance, historical compensation, market compensation levels for comparable positions, internal pay equity, and other factors, including any retention concerns.
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After consideration of the data from the peer group described above and the other factors described in the preceding paragraph, the compensation committee increased incumbent named executive officers’ base salaries in March 20202021 which are described in the table below. Mr. KershawBarrett, Mr. Day and Ms. Evans received a +17.6% increaseincreases of 9.1%, 9.5% and 7.3%, respectively, to reflect the increased scalesize and scope of his roletheir roles following the transactions and responsibility for the combined go-forward entity and Mr. Soroca received a +15.4% increase based on the market positioningdata for their respective roles. Messrs. Dove and a desire to achieve betterBuckley’s salaries were set upon their role assumption at Magnite following the acquisition of SpotX in April 2021, based on their previous base salaries, considerations of internal pay equity amongst other peers.alignment, and market data for their roles.
Name |
| 2020 Annual |
| 2021 Annual |
| Percent Increase |
Michael Barrett | | $550,000 | | $600,000 | | 9.1% |
David Day | | $430,000 | | $471,000 | | 9.5% |
Sean Buckley | | N/A | | $525,000 | | N/A |
J. Allen Dove | | N/A | | $525,000 | | N/A |
Katie Evans | | $400,000 | | $429,000 | | 7.3% |
Name | 2019 Annual Base Salary | 2020 Annual Base Salary | Percent Increase (%) | |||||||||
Michael Barrett | $ | 515,000 | $ | 550,000 | 6.8% | |||||||
David Day | $ | 400,000 | $ | 430,000 | 7.5% | |||||||
Thomas Kershaw | $ | 425,000 | $ | 500,000 | 17.6% | |||||||
Katie Evans | $ | 390,000 | $ | 400,000 | 2.6% | |||||||
Adam Soroca | $ | 325,000 | $ | 375,000 | 15.4% |
Annual Performance-Based Cash Awards
Our named executive officers are eligible to receive cash incentive payments under our Executive Cash Incentive Plan, referred to as the Executive Bonus Plan, which is administered by our compensation committee. The amount of cash incentive payments under the Executive Bonus Plan is determined based upon the achievement of pre-established corporate financial objectives that the compensation committee believed were challenging yet achievable.
For 2020,2021, given that the Telaria MergerSpotX acquisition occurred in Q2 2020,2021, and considering challenges setting goals during initial integration,prior to the consummation of the the transaction, the compensation committee approved the use of a bifurcatedsemi-annual structure for the 20202021 Executive Bonus Plan with independent goals set for each of the first half of the fiscal year (“1H20”1H21”) and second half of the fiscal year (“2H20”2H21”). The first half of 2020, 1H20,2021, 1H21, was measured from January to June, of 2020. The named executive officers were measured against legacy Rubicon Project 1H20 targets (or legacy Telaria 1H2020 targets for Ms. Evans),2021, with the first half bonus payoutpayouts based on H1 results.1H21 results (or legacy SpotX results in the case of Messrs. Buckley and Dove). The second half of 2020, 2H20,2021, 2H21, was measured from July to December, 20202021 with goals set in July 20202021, with the second half bonus payouts based on combined company2H2021 results. The company
For 2021, the compensation committee did not make any adjustments to the cash incentive program or outcomes due to COVID-19 but did consider the impact of COVID-19 when establishing goals for the 2H20.
In March 2020, the compensation committee approved modest increaseschanges to target annual bonuses for Mr. Day and Mr. Kershaw in orderany of the NEOs, except for Ms. Evans. Ms. Evans’ target bonus was adjusted from 75% of base salary to better internally70% of base salary to align memberswith those of the senior leadership team. The increases toexecutive team at the time. Given the simultaneous increase in Ms. Evans’ base salary, her target annualtotal cash levels were increased by 4.2%.
2021 target bonuses effective April 1, 2020, were as follows:
Name |
| 2020 Annual Target |
| 2021 Annual Target |
Michael Barrett | | 100% | | 100% |
David Day | | 70% | | 70% |
Sean Buckley | | N/A | | 100% |
J. Allen Dove | | N/A | | 70% |
Katie Evans | | 75% | | 70% |
Name | 2019 Annual Target % of Base Salary | 2020 Annual Target % of Base Salary |
Michael Barrett | 100% | 100% |
David Day | 65% | 70% |
Thomas Kershaw | 65% | 70% |
Katie Evans | 75% | 75% |
Adam Soroca | 70% | 70% |
1H20 legacy Rubicon Project1H21 (other than for Messrs. Buckley and Dove, as noted above) and 2H21 performance waswere both measured against twothree financial goals: total revenue, CTV revenue, and adjusted EBITDA less capital expenditures, referred to as capex, with each goal given equal weight. 2H20 Magnite performance was measured against three financial goals: revenue (weighted 35%), CTV revenue (weighted 15%) and adjusted EBITDA less capex (weighted 50%).capex. The compensation committee chose these financial metrics because they represent objectively determinable financial targets and focused the company on goals important to Magnite’s success afterfollowing the transaction.Telaria integration and SpotX and SpringServe transactions. For a description of how we calculate adjusted EBITDA, see the “Non-GAAP Financial Measures” section of the Management Discussion and Analysis of Financial Condition and Results of
Operations in Part II, Item 7 of the company’s Annual Report on Form 10-K. The compensation committee retains the discretion to reduce, but not increase, the amount of any bonus otherwise payable to our executive officers based on such factors as it deems appropriate.
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1H201H21 Annual Bonus Targets and Payout
In July 2020,2021, the compensation committee determined that for the first half of 2020, legacy Rubicon Project2021, Magnite achieved revenuetotal revenues of $65.6$136.0 million, CTV revenues of $28.0 million, and Adjusted EBITDA less capex of ($0.68 million),$15.9 million, resulting in a weighted payout percentage of 29.61%124.4% of each named executive officers'officers’ target annual bonuses for 1H20 (other than Ms. Evans),1H21 as follows:
Performance Goal | Metric | Threshold | Target | Maximum | 1H 2021 | |||||
Total Revenue | | 40% | | $107.7 million | | $126.7 million | | $145.7 million | | $136 million |
CTV Revenue | | 20% | | $23.9 million | | $29.8 million | | $34.3 million | | $28 million |
Adjusted EBITDA less Capital Expenditures | | 40% | | ($4.6) million | | $0.4 million | | $7.2 million | | $15.9 million |
Name |
| 1H21 |
| 1H 21 Bonus |
| 1H21 |
Michael Barrett | | $287,500 | | 124.4% | | $357,593 |
David Day | | $157,675 | | 124.4% | | $196,116 |
Sean Buckley1 | | $262,500 | | 100% | | $262,500 |
J. Allen Dove1 | | $105,767 | | 100% | | $105,767 |
Katie Evans | | $150,075 | | 124.4% | | $186,663 |
Performance Goal | Metric Weight | Threshold | Target | Maximum (150% payout) | 1H 2020 Actual Result |
Revenue | 50% | $62.2 million | $82.9 million | $103.6 million | $65.6 million (59.22% payout)
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Adjusted EBITDA less Capital Expenditures | 50% | ($6.39 million) | $0.5 million | $14.88 million | ($0.68 million) (0% payout)
|
Name | 1H20 | 1H 20 Bonus % Earned | 1H20 Bonus Paid | ||
Michael Barrett | $266,250 | 29.61% | $78,837 | ||
David Day | $140,250 | 29.61% | $41,528 | ||
Thomas Kershaw | $156,250 | 29.61% | $46,266 | ||
Katie Evans | $150,000 | 29.61% | $44,415 | ||
Adam Soroca | $121,875 | 29.61% | $36,087 |
Ms. Evans did not earn incentive compensation for H120 per1Messrs. Buckley and Dove joined Magnite following the termsacquisition of her incentive plan (whichSpotX in April 2021. Their 1H21 Bonus was established by the Telaria compensation committee prior to the merger andpaid based on achievement of Telaria standalone results). The compensation committee determined that it would be appropriate for Ms. Evans to receive the same 29.61% payout for 1H20 as members of the executive team that were on the Rubicon Project H120 plan in order to have consistency in payouts across the senior executive team.legacy SpotX results.
2H202H21 Annual Bonus Targets and Payout
In FebruaryJuly 2021, the compensation committee determined that for the second half of 2020,2021, the Company should increase the weighting on CTV revenue and total revenue to put more attention towards growth. In February 2022, the compensation committee determined that the company achieved revenue of $143.0$256.2 million, CTV revenue of $26.4$97.2 million and Adjusted EBITDA less capex of $28.6$94.2 million, resulting in a weighted payout percentage of 144.46%119.9% of each named executive officers’ target bonuses for 2H20,2H21, as follows: