Risk and with our individual directors through an established process for stockholder communication. For a stockholder communication directed to our BoardCompliance Oversight Committee | | Independence:
as a whole, stockholders and other interested parties may send such communication to the attention of our Board at cfo@appfolio.com or via U.S. Mail or Expedited Delivery Service to AppFolio, Inc., 50 Castilian Drive, Santa Barbara, California 93117, Attn: Board of Directors c/o Chief Financial Officer. For a stockholder communication directed to an individual director in his or her capacity as a member of our Board, stockholders and other interested parties may send such communication to the attention of the individual director at cfo@appfolio.com or via U.S. Mail or Expedited Delivery Service to AppFolio, Inc., 50 Castilian Drive, Santa Barbara, California 93117, Attn: [Name of Individual Director] c/o Chief Financial Officer.
We will review all incoming stockholder communications and promptly forward such communications to the director(s) to whom such communications are addressed. We will generally not forward communications that are unrelated to the duties and responsibilities of our Board, including communications that we determine to be primarily commercial in nature, product or service complaints or inquires, and materials that are patently offensive or otherwise inappropriate.
Compensation Committee Interlocks and Insider Participation
NoneEach of the members of our compensation committee is or has ever been an officer or employee of our company or any of its subsidiaries. Except as disclosed in the section of this Proxy Statement entitled “Related Party Transactions,” none of the members of our compensation committee had any relationship with our company requiring disclosure under Item 404 of Regulation S-K, nor is any such relationship currently contemplated. None of our executive officers currently serves, or in the past year has served, as a member of the Board of Directors or compensation committee (or other committee performing equivalent functions) of any entity that has one or more executive officers serving on our Board or compensation committee.
We have entered into an indemnification agreement with each of our directors, including each of the members of our compensation committee. See the section of this Proxy Statement entitled “Related Party Transactions” for additional information.
Director Compensation Policy
Under our Board approved director compensation policy, we pay our non-employee directors a cash retainer for service on our Board and for service on each committee on which the director is a member. The Chairperson of each committee receives a higher retainer for such service, although the Chairperson of our Board currently receives the same retainer as the other directors.
The fees we pay to our non-employee directors for service on our Board and for service on each committee are as follows (Chairperson annual retainers are in lieu of, and not in addition to, director annual retainers):
| | | | | | | Director Annual Retainer | | Chairperson Annual Retainer | | Board of Directors | $30,000 | | $30,000 | | Audit Committee | 7,500 | | 15,000 | | Compensation Committee | 5,000 | | 10,000 | | Nominating and Corporate Governance Committee | 5,000 | | 10,000 |
In addition, each non-employee director receives an annual restricted stock grant of our Class A Common Stock with a fair market value of $100,000. Each grant will vest in full on the one-year anniversary of the grant date, subject to the director’s continuous service. Restricted stock grants are expecteddetermined to be made annually, with the number of shares granted to be based on the fair market value of our Class A Common Stock on the grant date. All unvested shares of restricted stock granted to the non-employee directors pursuant to the policy will immediately vest in full upon a change-in-control transaction. All restricted stock grants to our non-employee directors are expected to be made pursuant to the 2015 Stock Incentive Plan, or the 2015 Plan. Noan independent director held outstanding stock awards or options as of December 31, 2018. See the section of this Proxy Statement entitled “Compensation Discussion and Analysis - Stock Incentive Plans - 2015 Stock Incentive Plan” for additional information.
Notwithstanding the foregoing, our non-employee directors who beneficially own 5% or more of the outstanding shares of our Class A Common Stock or Class B Common Stock will not be eligible to participate in our director compensation policy. Accordingly, Messrs. Bliss and Rauth are not currently eligible to receive compensation pursuant to our director compensation policy.
We have agreed to reimburse all of our non-employee directors for reasonable travel and out-of-pocket expenses incurred in connection with attending our Board and committee meetings as well as continuing director education.
under applicable NASDAQ listing standards.
Our directors who are also our employees receive no additional compensation for their service as directors,Risk and none of such directors serves on any of our standing Board committees. During 2018, and as of the date of this Proxy Statement, Messrs. Randall and Schauser were our employees. Director Compensation Table
The following table provides information regarding the total compensation that was granted or paid to each of our directors who was neither our employee nor a beneficial owner of 5% or more of the outstanding shares of our Class A Common Stock or Class B Common Stock (which directors were not entitled to compensation for their membership on our Board under our director compensation policy) during 2018:
| | | | | | | | | | | | | | | | | | | | | | Restricted Stock Awards | | | | Directors Eligible to Receive Compensation | | Fees Earned or Paid in Cash(1) | | Valuation(2) | | Shares(3) | | Total Compensation | | Janet Kerr | | $ | 52,500 |
| | $ | 100,000 |
| | 1,638 |
| | $ | 152,500 |
| | James Peters | | 50,000 |
| | 100,000 |
| | 1,638 |
| | 150,000 |
| | Andreas von Blottnitz | | 42,500 |
| | 100,000 |
| | 1,638 |
| | 142,500 |
|
| | (1) | Amounts in this column reflect the total cash retainer earned by each director for Board and committee service during 2018. |
| | (2) | Amounts shown in this column do not necessarily reflect the actual value realized or to be realized by the directors or the amount of stock-based compensation expense reported within our consolidated financial statements. Instead, these amounts reflect the total grant date fair market value of each restricted stock grant computed in accordance with the provisions of Financial Accounting Standards Board’s Accounting Standard Codification 718, or ASC 718. Assumptions used in the calculation of these amounts are included in Note 2 of the notes to our consolidated financial statements included in our 2018 Annual Report. As required by SEC rules and regulations, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions.
|
| | (3) | Amounts in this column reflect the aggregate number of shares of restricted stock granted to the directors during 2018 pursuant to our director compensation policy. Each of these shares of Class A Common Stock will vest in full on June 27, 2019, the one-year anniversary of the grant date, and are subject to repurchase until then. |
REPORT OF THE AUDIT COMMITTEE
The audit committee is a committee of the Board of Directors of AppFolio, Inc., or the Company, comprised solely of independent directors as required by the NASDAQ listing standards and the rules and regulations of the Securities and Exchange Commission, or the SEC. The audit committee operates under a written charter approved by the Board, which is available on our website. The composition of the audit committee, the experiences, qualifications, attributes or skills of its members, and the responsibilities of the audit committee, as reflected in its charter, are intended to be in accordance with applicable requirements for corporate audit committees. The audit committee reviews and assesses the adequacy of its charter and the audit committee’s performance on an annual basis.
With respect to the Company’s financial reporting process, the management of the CompanyCompliance Oversight Committee is responsible for, (1) establishingamong other things:
▪reviewing, understanding and maintaining internal controlsmonitoring the Company's applicable risk management and (2) preparing the Company’s consolidated financial statements. Our independent registered public accounting firm, PricewaterhouseCoopers LLP, or PwC, is responsible for auditing these financial statements. It is the responsibility of the audit committee to oversee these activities. It is not the responsibility of the audit committee to prepare our financial statements. These are the fundamental responsibilities of management. Inlegal compliance frameworks (the "frameworks"); ▪monitoring the performance of its oversight function,management with respect to adhering to the audit committee has:frameworks; ▪reviewing the means by which the Company monitors compliance with applicable legal and regulatory requirements and the Company's material legal and regulatory compliance risk exposures and the steps taken by management to monitor or mitigate such exposures; ▪reviewing the Company's privacy program and material privacy and data use risk exposures and the steps taken by the Company to monitor or mitigate such exposures; ▪reviewing the Company's cybersecurity program and cybersecurity risk exposures and the steps taken by the Company to monitor or mitigate such exposures; and ▪helping to set the tone and develop a culture within the Company regarding the importance and value of risk management and legal compliance. | | | | | | Meetings in 2021: 5 Members: Agnes Bundy Scanlan (Chair) Andreas von Blottnitz Janet Kerr Winifred Webb | | ▪ | Reviewed and discussed the audited financial statements with management and PwC; |
In addition, from time to time, special committees may be established under the direction of our Board when necessary to address specific issues. Members will serve on these committees until their resignation or until otherwise determined by our Board. Stockholder Nomination of Directors Stockholders may submit recommendations for director candidates to our Nominating and Corporate Governance Committee by sending the name and qualifications of the candidate(s) to AppFolio, Inc., 50 Castilian Drive, Santa Barbara, California 93117, Attn: Chief Legal Officer, and/or by email to stockholdervoting@appfolio.com. Our Chief Legal Officer will forward all recommendations to our Nominating and Corporate Governance Committee. Our Nominating and Corporate Governance Committee will review and consider any director candidate(s) recommended by our stockholders against the same criteria and pursuant to the same policies and procedures applicable to the evaluation of candidates proposed by directors, management, or any other party, so long as such directors have been nominated in accordance with the procedures set forth in our Governing Documents. We did not receive any director candidate recommendations from our stockholders in anticipation of the Annual Meeting. See the section titled “Additional Information - Procedures for Submitting Stockholder Proposals” for additional information.
| | ▪ | Discussed with PwC the matters required to be discussed by the PCAOB Auditing Standard No. 1301, "Communication with Audit Committees";
| | | | | | | | | | Directors and Corporate Governance |
| | ▪ | Received the written disclosures and the letter from PwC required by applicable requirements of the PCAOB, including Rule 3526 "Communication with Audit Committees Concerning Independence," regarding the independent accountant's communications with the audit committee concerning independence, and has discussed with PwC its independence. |
Based on the audit committee’s review and discussions with management and PwC, the audit committee recommended to the Board of Directors that the audited consolidated financial statements be included in the Annual Report on Form 10-K for the fiscal year ended December 31, 2018, for filing with the SEC.
Respectfully submitted by the members of the audit committee of the Board of Directors:
James Peters (Chairperson)
Janet Kerr | |
| | | | | | | | | | | | | Compensation Committee | | Independence: Each of the members has been determined to be an independent director under applicable SEC rules and regulations and applicable NASDAQ listing standards. Each member of our Compensation Committee is also a non-employee director, as defined by Rule 16b-3 promulgated under the Exchange Act, and an outside director, as defined by Section 162(m) of the Internal Revenue Code, or the Code. Chair Transition: Mr. Rauth served as Chairperson of our Compensation Committee during 2021. Mr. von Blottnitz succeeded Mr. Rauth as Chairperson effective January 13, 2022 in connection with Mr. Rauth's resignation from our Board. Our Compensation Committee is responsible for, among other things: ▪developing and reviewing the compensation programs and strategy applicable to our directors and senior executives, and overseeing our overall compensation philosophy; ▪recommending to our Board for approval each component of compensation paid to our directors and senior executives; ▪administering our cash and equity-based compensation plans applicable to all of our directors, senior executives and employees in accordance with the terms of our Compensation Committee’s charter; and ▪reviewing and discussing with management the disclosures regarding executive officer and director compensation to be included in our public filings, including our annual proxy statement.
| | | | | | | Meetings in 2021: 17 Members: Andreas von Blottnitz (Chair) Janet Kerr Alex Wolf | |
| | | | | | | | | | Directors and Corporate Governance |
| | | | | | | | | | | | | Nominating and Corporate Governance Committee | | Independence: Each of the members has been determined to be an independent director under applicable NASDAQ listing standards. Our Nominating and Corporate Governance Committee is responsible for, among other things: ▪assisting our Board in identifying individuals qualified to become members of our Board, consistent with criteria approved by our Board; ▪recommending to the Board director nominees for each committee of the Board; ▪developing and recommending to our Board such corporate governance guidelines and procedures as the committee determines is appropriate from time to time; ▪generally overseeing the Company's Environmental, Social and Governance activities; ▪overseeing the evaluation of our Board and of each committee of our Board; and ▪conducting and/or advising on Board education. | | | | | | | Meetings in 2021: 5 Members: Janet Kerr (Chair) Timothy Bliss Winifred Webb | |
| | | | | | | | | | | | | Risk and Compliance Oversight Committee | | Independence: Each of the members has been determined to be an independent director under applicable NASDAQ listing standards. Our Risk and Compliance Oversight Committee is responsible for, among other things: ▪reviewing, understanding and monitoring the Company's applicable risk management and legal compliance frameworks (the "frameworks"); ▪monitoring the performance of management with respect to adhering to the frameworks; ▪reviewing the means by which the Company monitors compliance with applicable legal and regulatory requirements and the Company's material legal and regulatory compliance risk exposures and the steps taken by management to monitor or mitigate such exposures; ▪reviewing the Company's privacy program and material privacy and data use risk exposures and the steps taken by the Company to monitor or mitigate such exposures; ▪reviewing the Company's cybersecurity program and cybersecurity risk exposures and the steps taken by the Company to monitor or mitigate such exposures; and ▪helping to set the tone and develop a culture within the Company regarding the importance and value of risk management and legal compliance. | | | | | | | Meetings in 2021: 5 Members: Agnes Bundy Scanlan (Chair) Andreas von Blottnitz Janet Kerr Winifred Webb | |
In addition, from time to time, special committees may be established under the direction of our Board when necessary to address specific issues. Members will serve on these committees until their resignation or until otherwise determined by our Board. Stockholder Nomination of Directors Stockholders may submit recommendations for director candidates to our Nominating and Corporate Governance Committee by sending the name and qualifications of the candidate(s) to AppFolio, Inc., 50 Castilian Drive, Santa Barbara, California 93117, Attn: Chief Legal Officer, and/or by email to stockholdervoting@appfolio.com. Our Chief Legal Officer will forward all recommendations to our Nominating and Corporate Governance Committee. Our Nominating and Corporate Governance Committee will review and consider any director candidate(s) recommended by our stockholders against the same criteria and pursuant to the same policies and procedures applicable to the evaluation of candidates proposed by directors, management, or any other party, so long as such directors have been nominated in accordance with the procedures set forth in our Governing Documents. We did not receive any director candidate recommendations from our stockholders in anticipation of the Annual Meeting. See the section titled “Additional Information - Procedures for Submitting Stockholder Proposals” for additional information.
| | | | | | | | | | Directors and Corporate Governance |
Director Qualifications Our Nominating and Corporate Governance Committee consults with other members of our Board and management in identifying and evaluating candidates for director. Our Nominating and Corporate Governance Committee and our Board believe candidates for director should have certain minimum qualifications. Consistent with the terms of our corporate governance guidelines, the current minimum selection criteria established by our Nominating and Corporate Governance Committee include, without limitation: ▪each director should be committed to enhancing long-term stockholder value and must possess a high level of integrity, personal and professional ethics, and sound business judgment; ▪each director should be free of any conflicts of interest that would violate applicable laws, rules, regulations or listing standards, conflict with any of our corporate governance policies or procedures, or interfere with the proper performance of his or her responsibilities; ▪each director should possess experience, skills and attributes that enhance his or her ability to perform duties on our behalf. In assessing these qualities, the Nominating and Corporate Governance Committee will consider such factors as (i) personal qualities, skills and attributes, (ii) expertise in specific business areas, including without limitation, accounting, marketing, strategy, financial reporting or corporate governance, and (iii) professional experience in the technology industry or similar industries. The Nominating and Corporate Governance Committee may also consider such other factors as it determines would reasonably be expected to contribute to the overall effectiveness of our Board; ▪each director should have the ability and willingness to devote the necessary time and effort to perform the duties and responsibilities of membership on our Board; and ▪each director should demonstrate an understanding that his or her primary responsibility is to serve the best interests of our stockholders, and not his or her personal interest or the interest of a particular group or stockholder. In recommending director nominees for appointment to our Board, our Nominating and Corporate Governance Committee also actively considers diversity characteristics, including diversity of professional experience, race, ethnicity, gender, age, education, cultural background, sexual orientation, and personal background. However, we have not adopted a formal policy regarding the consideration of specific diversity characteristic, and instead prefer to rely on the judgment of our highly-qualified committee in recommending candidates with the most appropriate mix of experiences, skills and expertise. Environmental, Social, and Governance at AppFolio We believe that we have a responsibility to benefit society, the environment, and the communities we live and work in. We take this responsibility seriously and engage in deliberate action to drive change for the better. | | | | | | | | | | | | | Environmental Commitment. | | We strive to create environmentally friendly workplaces, starting with sustainable construction and design. In accordance2021, we implemented sustainability requirements that all contractors who work in or around our buildings are required to follow. Examples of these requirements include recycling of all demolished or removed materials whenever possible, installation of energy efficient HVAC units, low power LED lighting and fixtures, and native, drought resistant landscaping. We have also established a "Green Committee," composed of employee volunteer members and an executive sponsor, that advocates for sustainable company practices and provides environmentally focused information to employees. Our Green Committee is responsible for a number of environmentally friendly changes made in 2021, including supplementing single use cutlery and dishes with SEC rulesreusable upgrades and regulations,the addition of composting in company kitchens and break rooms. The group also routinely meets with facilities’ leadership to discuss ways to reduce energy and water consumption. | |
| | | | | | | | | | Directors and Corporate Governance |
| | | | | | | | | | | | Diversity,
Equity, and Inclusion. | | We believe diversity is a driver of innovation and collective growth. Our commitment starts at the leadership level and cascades to our talented employees, to whom we look to lead and foster various initiatives. We strive to create an environment where everyone is valued for their uniqueness, while also feeling part of the larger whole. We work hard to make sure our employees’ voices are heard, from our practice of small, focused teams to setting annual company initiatives together as an organization. When we surveyed our workforce in 2021, of those who elected to share, 45% identified as women, 54% as men, and 1% as nonbinary (in each case, rounding to the nearest whole number). Our recruiting practices focus on attracting and hiring employees with diverse backgrounds, experiences, and approaches at all levels of the company. We have key partnerships with universities and professional organizations and provide ongoing education to our hiring teams that are focused on closing the diversity gap as we grow our organization. We also believe in compensating our employees fairly and equitably. We review the compensation of our workforce on a routine basis to ensure everyone is paid equally for equal work and close any unexplained gaps. | |
| | | | | | | | | | | | | Employee Development. | | We invest significant resources to develop the talent needed to remain at the forefront of innovation and make us an employer of choice. Employees throughout our organization have access to tailored training and learning programs that include programs for distinct audiences. Our annual engagement survey provides a platform for employees to provide anonymous feedback directly to their managers and our executives. Based on results from our 2021 engagement survey, the overall engagement of employees is greater than the technology industry average. | |
| | | | | | | | | | | | Societal
Impact. | | Connecting with and contributing to our communities is a long-standing tradition and important activity for our employees. Our team members are passionate about many causes and we encourage participation in them by providing eight hours of volunteer time off annually. In addition, throughout the year, we come together as a company to engage in community service through “AppFolio Gives Back,” where we donate time and funds to several charities that are selected by our employee-led Give Back Committee. | |
| | | | | | | | | | | | | Health, Safety, and Wellness. | | We are committed to providing a safe workplace for our employees and assisting them in maintaining a healthy work-life balance. We regularly solicit feedback to assess the well-being and needs of our employees and offer resources focused on mental health and physical wellness. In March 2020, in an effort to protect our employees and comply with applicable government orders in response to the COVID-19 pandemic, we transitioned our employees to a remote work environment. In July 2021, we reopened our office hubs to employees who wished to return to the workplace. Going forward, "Together @ AppFolio" is our approach to flexible yet still connected modern work. We believe that our employees thrive in a flexible, collaborative environment, with each department determining what is right for their respective teams when it comes to in-person and remote work as we drive toward our strategic objectives. To support our employees as they work outside of our office hubs, we have made available trainings and toolkits focused on helping employees be successful and healthy in a remote work environment. We have also enhanced our internal lifestyle programs, including virtual group fitness classes and increased supplemental time off to create additional space for employees to reset and recharge. | |
| | | | | | | | | | | | | Privacy Responsibilities. | | Our customers and employees entrust us with large amounts of confidential information, including personally identifiable information. We take this trust seriously and invest significant time, effort and resources protecting this highly sensitive information. We comply with industry best-practices, including encrypting sensitive data, utilization of a robust 24/7/365 security monitoring system, and regularly assessing product features for security vulnerabilities. In addition, we encrypt our customers' data and give them access control features to help them effectively protect their information. We have developed security protections and control policies to help ensure a secure environment for sensitive information, and we engage independent third-party experts to audit our adherence to these policies. We do not access, use or share customer data for any purpose other than providing, maintaining and improving our services and as otherwise required by law. | |
| | | | | | | | | | Directors and Corporate Governance |
Codes of Business Conduct and Ethics We have adopted a Code of Business Conduct and Ethics, with which our employees, officers and directors are required to comply. The purpose of our Code of Business Conduct and Ethics is to deter wrongdoing and promote, among other things, honest and ethical conduct and to ensure to the greatest possible extent that the Company’s business is conducted in a consistently legal and ethical manner. A copy of our Code of Business Conduct and Ethics, including any future amendments, can be found at the website: ethics.appfolio.com, and we expect that any waivers of requirements applicable to our executive officers or directors will be disclosed on our investor relations website, www.ir.appfolioinc.com, or in future filings with the SEC. Stockholder Communications with our Board Our stockholders have the ability to communicate with our Board as a whole and with our individual directors through an established process for stockholder communication. For a stockholder communication directed to our Board as a whole, stockholders and other interested parties may send such communication to the attention of our Board at stockholderquestions@appfolio.com or via U.S. Mail or Expedited Delivery Service to AppFolio, Inc., 50 Castilian Drive, Santa Barbara, California 93117, Attn: Board of Directors c/o Chief Legal Officer. For a stockholder communication directed to an individual director in his or her capacity as a member of our Board, stockholders and other interested parties may send such communication to the attention of the individual director at stockholderquestions@appfolio.com or via U.S. Mail or Expedited Delivery Service to AppFolio, Inc., 50 Castilian Drive, Santa Barbara, California 93117, Attn: [Name of Individual Director] c/o Chief Legal Officer. We will review all incoming stockholder communications and promptly forward such communications to the director(s) to whom such communications are addressed. We will generally not forward communications that are unrelated to the duties and responsibilities of our Board, including communications that we determine to be primarily commercial in nature, product or service complaints or inquires, and materials that are patently offensive or otherwise inappropriate. Compensation Committee Interlocks and Insider Participation Messrs. Rauth and von Blottnitz, and Ms. Kerr, each served on the Compensation Committee during the fiscal year ended December 31, 2021. Mr. Rauth resigned from our Board on January 13, 2022, and Mr. Wolf was elected by the Board to fill the vacancy. Messrs. von Blottnitz and Wolf and Ms. Kerr have each been determined to be an independent director under applicable SEC rules and regulations and applicable NASDAQ listing standards. None of the members of our Compensation Committee is or has ever been an officer or employee of our company or any of its subsidiaries. Except as disclosed in the section titled “Related Party Transactions,” none of the members of our Compensation Committee had any relationship with our company requiring disclosure under Item 404 of Regulation S-K, nor is any such relationship currently contemplated. None of our executive officers currently serves, or in the past year has served, as a member of a board of directors or compensation committee (or other committee performing equivalent functions) of any entity that has one or more executive officers serving on our Board or Compensation Committee. We have entered into an indemnification agreement with each of our directors, including each of the members of our Compensation Committee. See the section titled “Related Party Transactions” for additional information. Director Compensation Policy Under our director compensation policy, we pay our non-employee directors who beneficially own less than 5% of the outstanding shares of our Class A Common Stock or Class B Common Stock a cash retainer for service on our Board and for service on each committee on which the director is a member. The Chairperson of our Board and the Chairperson of each committee receives a higher retainer for such service. Eligible directors may elect not to receive any compensation for their service. During 2021, and as of the date of this Proxy Statement, the fees we pay to eligible non-employee directors for service on our Board and for service on each committee are as follows (Chairperson annual retainers are in lieu of, and not in addition to, director annual retainers): | | | | | | | | | | | | | | | | | Director Annual Retainer ($) | | Chairperson Annual Retainer ($) | | Board of Directors | 40,000 | | | 50,000 | | | Audit Committee | 10,000 | | | 50,000 | | | Compensation Committee | 10,000 | | | 50,000 | | | Nominating and Corporate Governance Committee | 10,000 | | | 50,000 | | | Risk and Compliance Oversight Committee | 10,000 | | | 50,000 | |
| | | | | | | | | | Directors and Corporate Governance |
In addition, eligible non-employee directors who do not elect to forego compensation for their service on our Board receive the following: ▪Annual equity award. An annual restricted stock award of our Class A Common Stock with a fair market value of $150,000 under our 2015 Stock Incentive Plan (the "2015 Plan"), with the number of shares granted based on the average closing price per share of our Class A Common stock for the twenty days preceding the grant date. ▪Initial equity award.New non-employee directors receive a one-time restricted stock award of our Class A Common Stock with a fair market value of $250,000 under the 2015 Plan, with the number of shares granted based on the average closing price per share of our Class A Common stock for the twenty days preceding the grant date. Each grant will vest in full on the one-year anniversary of the grant date, subject to the director’s continuous service. All unvested shares of restricted stock granted to the non-employee directors pursuant to the policy will immediately vest in full upon a change-in-control transaction. We have agreed to reimburse all of our non-employee directors for reasonable travel and out-of-pocket expenses incurred in connection with attending our Board and committee meetings as well as continuing director education. Our employee directors receive no additional compensation for their service as a director and may not serve on any of our Board committees. During 2021, and as of the date of this Proxy Statement, Mr. Randall was our only employee director. Director Compensation Table The following table provides information regarding the total compensation that was granted or paid to each of our directors who elected to receive compensation and was neither our employee nor a beneficial owner of 5% or more of the outstanding shares of our Class A Common Stock or Class B Common Stock (which directors were not entitled to compensation for their membership on our Board under our director compensation policy) during 2021: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Restricted Stock Awards | | | | Directors Eligible to Receive Compensation(1) | | Fees Earned or Paid in Cash ($)(2) | | Valuation ($)(3) | | Shares(4) | | Total Compensation ($) | | Andreas von Blottnitz | | 80,000 | | | 150,000 | | | 1,039 | | 230,000 | | | Agnes Bundy Scanlan | | 100,000 | | | 150,000 | | | 1,039 | | 250,000 | | | Janet Kerr | | 120,000 | | | 150,000 | | | 1,039 | | 270,000 | | | Winifred Webb | | 110,000 | | | 150,000 | | | 1,039 | | 260,000 | |
(1)Messrs. Bliss, Randall, and Schauser are not currently eligible to receive compensation pursuant to our director compensation policy. Mr. Wolf has elected not to receive compensation for his services on the Board. (2)Amounts in this column reflect the total cash retainer earned by each director for Board and committee service during 2021. (3)Amounts shown in this column do not necessarily reflect the actual value realized or to be realized by the directors or the amount of stock-based compensation expense reported within our consolidated financial statements. Instead, these amounts reflect the total grant date fair market value of each restricted stock grant computed in accordance with the provisions of Financial Accounting Standards Board’s Accounting Standard Codification 718, or ASC 718. Assumptions used in the calculation of these amounts are included in Note 2 of the notes to our consolidated financial statements included in our 2021 Annual Report. As required by SEC rules and regulations, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions. (4)Amounts in this column reflect the aggregate number of shares of restricted stock granted to the directors during 2021 pursuant to our director compensation policy. Each of these shares of Class A Common Stock will vest in full on the one-year anniversary of the grant date, and are subject to repurchase until then.
| | | | | | | | | | | | | | | Report of the Audit Committee will not be deemed to be part of or incorporated by reference by any general statement incorporating by reference this Proxy Statement into any filing under the Securities Act of 1933, as amended, or the Securities Act, or under the Securities Exchange Act of 1934, as amended, or the Exchange Act, except to the extent that we specifically incorporate this information by reference, and will not otherwise be deemed “soliciting material” or “filed” under either the Securities Act or the Exchange Act.
EXECUTIVE OFFICERS
The following table sets forth certain summary information concerning our executive officers as of April 1, 2019:
|
The Audit Committee is a committee of the Board comprised solely of independent directors as required by the NASDAQ listing standards and the rules and regulations of the SEC. The Audit Committee operates under a written charter approved by the Board, which is available on our website. The composition of the Audit Committee, the experiences, qualifications, attributes or skills of its members, and the responsibilities of the Audit Committee, as reflected in its charter, are intended to be in accordance with applicable requirements for corporate Audit Committees. The Audit Committee reviews and assesses the adequacy of its charter and the Audit Committee’s performance on an annual basis. With respect to our financial reporting process, our management is responsible for (1) establishing and maintaining internal controls and (2) preparing our consolidated financial statements. Our independent registered public accounting firm, PwC, is responsible for auditing these financial statements. It is the responsibility of the Audit Committee to oversee these activities. It is not the responsibility of the Audit Committee to prepare our financial statements. These are the fundamental responsibilities of management. In the performance of its oversight function, the Audit Committee has: ▪Reviewed and discussed the audited financial statements with management and PwC; ▪Discussed with PwC the matters required to be discussed by the PCAOB Auditing Standard No. 1301, "Communication with Audit Committees"; and ▪Received the written disclosures and the letter from PwC required by applicable requirements of the PCAOB, including Rule 3526 "Communication with Audit Committees Concerning Independence," regarding the independent accountant's communications with the Audit Committee concerning independence, and has discussed with PwC its independence. The Audit Committee discussed the auditors' review of our quarterly financial information with the auditors prior to the release of such information and the filing of our quarterly reports with the SEC. The Audit Committee also met and held discussions with management and PwC with respect to our audited year-end financial statements. Based on the Audit Committee’s review and discussions with management and PwC, the Audit Committee recommended to the Board that the audited consolidated financial statements be included in the 2021 Annual Report. In accordance with SEC rules and regulations, this report of the Audit Committee will not be deemed to be part of or incorporated by reference by any general statement incorporating by reference this Proxy Statement into any filing under the Securities Act of 1933, as amended, or the Securities Act, or under the Securities Exchange Act of 1934, as amended, or the Exchange Act, except to the extent that we specifically incorporate this information by reference, and will not otherwise be deemed “soliciting material” or “filed” under either the Securities Act or the Exchange Act. Respectfully submitted by the members of the Audit Committee of the Board: Winifred Webb (Chairperson) Andreas von Blottnitz Agnes Bundy Scanlan Janet Kerr
The following table sets forth certain summary information concerning our executive officers as of April 28, 2022: | | | | | | | | | | | | | | | | | | | Name | | Age | | Position | | Jason Randall | | 49 | | President, Chief Executive Officer and Director | | Fay Sien Goon | | 44 | | Chief Financial Officer | | Matt Mazza | | 46 | | Chief Legal Officer and Corporate Secretary | | Shane Trigg | | 46 | | General Manager, Real Estate | | Jonathan Walker | | 53 | | Chief Technology Officer and Founder |
During 2021, our finance team underwent a leadership change with the resignation of our former Chief Financial Officer, Ida Kane, on June 4, 2021, and subsequent hiring of our current Chief Financial Officer, Ms. Goon, on October 18, 2021. The biographies of each of our current executive officers contain information regarding each such person’s relevant business experience during the past five years or more. See the section titled “Proposal One: Election of Directors - Director Nominees and Continuing Directors” for biographical information regarding Mr. Randall. | | | | | | | | | | | | | | | | | | Fay Sien Goon has served as AppFolio's Chief Financial Officer since 2021. Prior to AppFolio, Ms. Goon was Chief Accounting Officer of ServiceNow, a global enterprise software company that delivers digital workflows, where she was employed from 2012 to 2021. As Chief Accounting Officer, she led the accounting and finance functions through numerous years of successful growth. Prior to joining ServiceNow, she spent 11 years at Ernst & Young, leading external audits of large public and pre-IPO technology companies. | | Fay Sien Goon | | | | | | | | Age: 44 Position: Chief Financial Officer | | | | Name | | Age | | Position | Executive Officers: | | | | | Jason Randall | | 46 | | President, Chief Executive Officer and Director | Ida Kane | | 49 | | Chief Financial Officer | Klaus Schauser | | 56 | | Chief Strategist, Founder and Director | Jonathan Walker | | 50 | | Chief Technology Officer and Founder |
| | | | | | | | | | | | | | | | | | Matt Mazza has served as AppFolio's Chief Legal Officer since 2021. Before becoming Chief Legal Officer, he had served as the Company's General Counsel and Chief Compliance Officer, as well as in other senior legal and compliance roles, since 2016. Prior to AppFolio, Mr. Mazza served as Senior Counsel for Deckers Brands, where he was responsible for a broad spectrum of legal affairs. He began his practice as a complex business and commercial litigator in 2003. Mr. Mazza received his J.D. from the University of California, Berkeley, and a B.A. from the University of California, Santa Barbara. | | Matt Mazza | | | | | Age: 46 Position: Chief Legal Officer and Corporate Secretary |
The biographies of each of our executive officers below contain information regarding each such person’s relevant business experience during at least the past five years.
See the section of this Proxy Statement entitled “Proposal One: Election of Directors - Director Nominees and Continuing Directors” for biographical information regarding Messrs. Randall and Schauser.
| | | | | | | | | | | | | | | | | | Ida KaneShane Trigg has served as our Chief Financial OfficerGeneral Manager, Real Estate since February 2015.April 2020. From 20102012 to 2015, Ms. Kane2020, Mr. Trigg served as Chief Financial Officera Senior Vice President, Commerce Cloud and Corporate Secretary of Rightscale, Inc.Senior Vice President, Marketing Cloud for Salesforce, a cloud-based customer relationship management provider. From 2004 to 2011, Mr. Trigg held various positions with MRI Software (formerly Intuit Real Estate Solutions, Inc), a cloud-based solution provider. From 2005 to 2009, Ms. Kane servedprovider of real estate and investment management software, last serving as Chief Financial Officer at thinkorswim Group Inc. (NASDAQ: SWIM), an online option tradingVP, Global Sales and investor education company, until its sale to TD Ameritrade Holding Corporation (NYSE: AMTD). Prior to joining thinkorswim Group Inc., Ms. Kane served as Chief Financial Officer and Vice President of Operations of a business unit of Franklin Covey Co. (NYSE: FC). Ms. KaneMarketing. Mr. Trigg received a B.S. in AccountingHuman Ecology from The Ohio State University and an M.B.A. from the University of Miami in Florida, and earned her CPA license (inactive) from the State of Florida.Notre Dame.
| | Shane Trigg | | | | | Age: 46 Position: General Manager, Real Estate |
| | | | | | | | | | | | | | | | | | Jonathan Walker co-founded AppFolio in 2006 and has served as our Chief Technology Officer since 2006.then. Prior to co-founding AppFolio, in 2004, Mr. Walker co-founded Versora, Inc., a provider of software products and professional integration services, and served as its Chief Technology Officer from 2004 to 2006. Prior to founding Versora, Inc., Mr. Walker served as Chief Technology Officer of Miramar Systems, Inc., a data migration solutions provider, until its acquisition by CA, Inc. (NASDAQ: CA) in 2004. Mr. Walker received a B.S. in Business and Economics from Westmont College. | | Jonathan Walker | | | | |
Age: 53
EXECUTIVE COMPENSATION
Compensation DiscussionPosition: Chief Technology Officer and AnalysisFounder
This Compensation Discussion and Analysis explains the compensation philosophy behind the elements that made up our named executive officer compensation program in 2018, or our NEO Compensation Program, and is intended to provide context for the considerations underlying the compensation paid to our NEOs in 2018. This Compensation Discussion and Analysis should be read together with the Summary Compensation Table and related compensation tables, notes and narrative discussion set forth below. This discussion is divided into the following parts:
| | I. | Named Executive Officers |
| | II. | Compensation Philosophy |
| | III. | Elements of our NEO Compensation Program |
| | IV. | Other Compensation-Related Topics |
I. Named Executive Officers
Our named executive officers, which we refer to as NEOs for purposes of this section, include our principal executive officer, our principal financial and accounting officer and our two other executive officers who were serving as executive officers as of December 31, 2018. For 2018, our NEOs were as follows:
Compensation Discussion and Analysis This Compensation Discussion and Analysis explains the compensation philosophy, programs, and processes that make up our named executive officer compensation program (our "NEO Compensation Program"), and is intended to provide context for the considerations underlying the compensation paid to our NEOs. This Compensation Discussion and Analysis should be read together with the Summary Compensation Table and related compensation tables, notes, and narrative discussion set forth below. Named Executive Officers Our named executive officers ("NEOs"), include our principal executive officer, our current and former principal financial officer, and three other individuals who were serving as executive officers as of December 31, 2021. Our 2021 NEOs are as follows: | | | | | | | | | | | | | Name | | Position | | Jason Randall | | President, Chief Executive Officer, and Director (Principal Executive Officer) | | Fay Sien Goon | | Chief Financial Officer (Principal Financial Officer) | | Matt Mazza | | Chief Legal Officer and Corporate Secretary | | Shane Trigg | | General Manager, Real Estate | | | | Name | | Position | Jason Randall | | President, Chief Executive Officer, and Director (Principal Executive Officer) | Ida Kane | | Chief Financial Officer (Principal Financial and Accounting Officer) | Klaus Schauser | | Chief Strategist, Founder and Director | | Jonathan Walker | | Chief Technology Officer and Founder | | Ida Kane | | Former Chief Financial Officer (Principal Financial Officer) |
Compensation Philosophy We recognize that there is significant competition for qualified executives within our industry, especially in California where our headquarters are located, and it can be particularly challenging for companies to recruit executive officers of the caliber necessary to achieve our short-term and long-term strategic objectives. The primary objective of our NEO Compensation Program is to provide a total compensation package designed to attract, motivate, and retain executive officers with the skills, energy, and commitment required to achieve our short-term and long-term strategic objectives, which we believe will positively impact long-term value. Our NEO Compensation Program provides a total compensation package, composed of a mix of cash and equity compensation, as well as time-based and performance-based compensation, that we believe fulfills the above objective. From time to time, we consider appropriate changes to our NEO Compensation Program and applicable performance metrics to reflect the evolving needs of our business. Guiding Principles of our NEO Compensation Program When evaluating our NEO Compensation Program each year, our Compensation Committee and Board are guided by the following principles: Attract, Motivate, and Retain our NEOs ▪Attract, motivate, and retain executive officers with the skill, energy, and commitment required to achieve our strategic objectives, which we believe will drive long-term value. ▪Retain our qualified executive officers by offering compensation that is generally competitive with other companies in our industry that are of a similar size and stage of growth. Align Interests with Stockholders ▪Align the interests of our executive officers with those of our stockholders by tying a significant portion of total compensation to the achievement of strategic objectives which we believe will drive long-term value. Reward Achievement through Performance-Based Compensation ▪Offer a significant portion of the total compensation opportunity in the form of performance-based compensation that is at-risk instead of guaranteed. ▪Ensure performance-based compensation is directly correlated to the achievement of our short-term and long-term strategic objectives, and provides meaningful incentives for achieving those objectives. ▪Ensure that the total compensation opportunity is appropriate for each executive given their respective scope of responsibilities and ability to impact results.
II. | | | | | | | | | Executive Compensation Philosophy |
Roles of our Compensation Committee and our Board of Directors Our Compensation Committee is comprised solely of independent directors under applicable SEC rules and regulations and NASDAQ Listing Rules. The Compensation Committee’s primary responsibility is to assist our Board in developing and reviewing our NEO Compensation Program and compensation considerations applicable to our directors. Specifically, the Compensation Committee is responsible for reviewing, and recommending to our Board for approval, the compensation and benefits paid to, and any other compensatory arrangements entered into with, our directors and senior executives, and for administering our cash and equity compensation plans. In discharging its responsibility to oversee the effective design of our NEO Compensation Program, the Committee regularly assesses each element of, and considers changes to, our NEO Compensation Program. All the members of our Board, other than Messrs. Randall and Schauser, are independent directors under applicable SEC rules and regulations and NASDAQ Listing Rules. Our Board provides final approval of the NEO Compensation Program. Both the Committee and our Board are comprised of several of our most significant stockholders, which makes them uniquely representative of the interests of our stockholders, providing even greater emphasis on aligning stockholder interests with those of management. We recognize that there is significant competition for qualified executives within our industry, especially in California where our headquarters are located, and it can be particularly challenging for companies to recruit executive officers of the caliber necessary to achieve our short-term and long-term strategic objectives. The primary objective of our NEO Compensation Program is to provide a total compensation package designed to attract, motivate and retain executive officers with the skills, energy and commitment required to achieve our short-term and long-term strategic objectives, which we believe will positively impact long-term value for our stockholders. Our NEO Compensation Program provides a total compensation package, composed of a mix of cash and equity compensation, as well as guaranteed and performance based compensation, that we believe is required and appropriate to attract, motivate and retain such executive officers. We promote a strong alignment of the interest of our executives with those of our stockholders by tying a significant portion of total compensation to the achievement of long-term strategic objectives which we believe will drive long-term value for our stockholders. From time to time, we consider appropriate changes to our NEO Compensation Program and applicable performance metrics to reflect the evolving needs of our business.
Guiding Principles of our NEO Compensation Program
When evaluating our NEO Compensation Program each year, the Compensation Committee, which we refer to as the Committee for purposes of this section, and our Board of Directors, or our Board, is generally guided by the following principles that they believe align closely with our compensation philosophy:
| | | Goal | How Our Program Achieves That Goal | Attract, Motivate and Retain our NEOs | Attract, motivate and retain executive officers with the skill, energy and commitment required to achieve our strategic objectives, which we believe will drive long-term value for our stockholders.
Retain our qualified executive officers by offering compensation that is generally competitive with other companies in our industry and geographic region that are of a similar size and stage of growth.
| Align Interests with Stockholders | Align the interests of our executive officers with those of our stockholders by tying a significant portion of total compensation to the achievement of long-term strategic objectives which we believe will drive long-term value for our stockholders. | Reward Achievement through Performance Based Compensation | Offer a significant portion of the total compensation opportunity in the form of performance based compensation that is at-risk instead of guaranteed.
Ensure performance based compensation is directly correlated to the achievement of our short-term and long-term strategic objectives, and provide meaningful incentives for achieving those objectives.
Ensure that the total compensation opportunity is appropriate for each executive given their respective scope of responsibilities and ability to impact results.
|
Roles of our Compensation Committee and our Board of Directors
The Committee is comprised solely of independent directors under applicable SEC rules and regulations and NASDAQ Listing Rules. The Committee’s primary responsibility is to assist our Board in developing and reviewing our NEO Compensation Program and compensation considerations applicable to our directors and senior executives, and overseeing our overall compensation philosophy. In particular, the Committee is responsible for reviewing and recommending to our Board for approval the compensation and benefits paid to, and any other compensatory arrangements entered into with, our directors and senior executives, and for administering our cash and equity compensation plans and the awards granted under those plans. In discharging its responsibility to ensure that our NEO Compensation Program is effectively designed in light of our compensation philosophy, the Committee regularly assesses each element of, and considers changes to, our NEO Compensation Program.
All of the members of our Board, other than Messrs. Randall and Schauser, are independent directors under applicable SEC rules and regulations and NASDAQ Listing Rules. Our Board works with the Committee to develop our NEO Compensation Program, reviews the recommendations made by the Committee and provides final approval of the elements of our NEO Compensation Program. Both the Committee and our Board are comprised of several of our most significant stockholders, which makes them uniquely representative of the interests of our stockholders, providing even greater emphasis on aligning stockholder interests with those of management.
III. Elements of our NEO Compensation Program
The key elements of our NEO Compensation Program include: ▪Base Salary ▪Short-Term Cash Incentive Plan ▪Long-Term Executive Cash Incentive Plan ▪Long-Term Equity Incentive Plan ▪Employee Benefits Base Salary Short-Term Cash Incentive PlanBase salary represents a fixed portion of the compensation of our NEOs and is an important element of compensation intended to attract and retain highly-talented individuals. Base salaries provide our NEOs with a guaranteed base level of income, which provides security and allows our NEOs the freedom to focus on strategic objectives. In setting base salaries, the Compensation Committee considers:
Long-Term Executive Cash Incentive Plan▪balancing the levels of guaranteed pay with at-risk pay to properly manage our compensation-related risk; and
Employee Benefits
▪our NEOs’ contributions to the achievement of our strategic objectives and overall Company performance.
Base Salarysalaries are also reviewed periodically in the context of factors such as title, skills, responsibility level, individual performance, business experience, total compensation opportunity, and equity ownership.
The following is an overview ofBoard increased the annual base salaries paidfor Ms. Kane and Messrs. Trigg, Walker and Mazza in connection with fiscal year 2021, and again in connection with fiscal year 2022 for Messrs. Trigg and Walker, to acknowledge their contribution to the business and increased level of responsibility due to our NEOs during 2018, includinggrowth. In 2022, the underlying philosophyBoard also increased Mr. Randall's base salary, which had not been changed in several years, to bring it in line with market ranges and considerations that provide the basis for incorporating this element into our NEO Compensation Program: | | | | | Base Salary
Guaranteed Cash Compensation
| Philosophy | Considerations | Performance Criteria | Retain our NEOs
Provide our NEOs with a guaranteed base level of income which provides current security and freedom to focus on long-term strategic objectives.
| Balance the levels of guaranteed pay with at-risk pay to properly manage our compensation-related risk.
In setting base salaries, review our NEOs’ contributions to the achievement of our strategic objectives, overall Company performance and other elements of our NEO Compensation Program.
| No specific performance criteria associated with payment.
Base salaries are reviewed periodically in the context of factors such as title, skills, responsibility level, individual performance, business experience, total compensation opportunity and equity ownership.
|
2018 Base Salaries
compensation of other NEOs. Ms. Goon’s annual base salary was established as part of her offer of employment. The following table sets forth the 20182021 and 2022 base salaries paid to our NEOs. There were no changes to NEO base salaries as compared to 2017, because we believe meaningful compensation opportunity has been provided through other elements of our NEO Compensation Program.NEOs: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name | | 2022 Base Salary ($) | | 2021 Base Salary ($) | | 2020 Base Salary ($) | | Percentage Adjustment 2022 v. 2021 (%) | | Percentage Adjustment 2021 v. 2020 | | Jason Randall | | 500,000 | | | 360,000 | | | 360,000 | | | 39 | | — | | Fay Sien Goon(1) | | 450,000 | | | 450,000 | | | — | | | — | | — | | Matt Mazza(2) | | 375,000 | | | 375,000 | | | — | | | — | | — | | Shane Trigg | | 440,000 | | | 420,000 | | | 400,000 | | | 5 | | 5 | | Jonathan Walker | | 375,000 | | | 350,000 | | | 325,000 | | | 7 | | 8 | | Ida Kane(3) | | — | | | 390,000 | | | 340,000 | | | — | | 15 |
(1)Ms. Goon joined the Company as Chief Financial Officer in October 2021 and received a prorated portion of her 2021 base salary. (2)Mr. Mazza became an executive officer in fiscal year 2021. (3)Ms. Kane resigned from her role as Chief Financial Officer in June 2021 and received a prorated portion of her 2021 base salary.
| | | | | | | | | Name | | 2018 Base Salary | Jason Randall | | $360,000 | Ida Kane | | $340,000 | Klaus Schauser | | $150,000 | Jonathan Walker | | $250,000Executive Compensation |
Short-Term Cash Incentive Plan In 2018,We provide annual performance-based cash bonuses for our Board, upon recommendationNEOs based on Company achievement of the Committee, adopted the 2018pre-established targets under our Short-Term Cash Incentive Plan (“STI Plan”). The Compensation Committee believes that the annual performance metrics used in connectionthe STI Plan, which are discussed below, align the interests of our NEOs with those of our stockholders by tying bonus payout to Company performance against key metrics. In designing the STI Plan for recommendation to the Board, the Compensation Committee considers the following:
▪Company performance objectives based on Board-approved annual targets derived from and aligned with our long-term strategic objectives, which itrelate to long-term growth; and ▪Use of threshold, target, and maximum bonus payout levels to strike an appropriate balance between compensation incentives and risk tolerance and taking. With respect to fiscal year 2021, we provided an additional performance-based cash bonus opportunity for over-performance relative to pre-established targets (the “Over Achievement Plan”), which the Compensation Committee believed would further result in focusing our NEOs on achieving results that would produce long-term value. 2021 Plan Targets With respect to fiscal year 2021, our Board established target cash bonusesbonus amounts under the STI Plan and Over Achievement Plan for each NEO based on achievement relative to a pre-established target related to a free cash flow metric for fiscal year 2018, orother than Ms. Goon, as set forth in the Performance Target, and, with respect to Mr. Walker only, based on achievement of individual pre-determined MBOs. The following is an overview of the at-risk, performance-based Short-Term Cash Incentive Plan for our NEOs in 2018, including the underlying philosophy and considerations that provide the basis for incorporating this element into our NEO Compensation Program:
| | | | | 2018 Short-Term Cash Incentive Plan
At-Risk, Performance-Based Cash Compensation
| Philosophy | Considerations | Performance Criteria | 2018 Pay for Performance | Attract, Motivate and Retain Executives
A significant cash bonus opportunity is considered a typical component of a competitive executive pay package for executives among companies in our industry and geographic region.
Reward Achievement through Performance Based Compensation
Establish appropriate performance objectives that we believe will incentivize our NEOs to lead our Company to achieve its short-term (one-year) strategic objectives, which align with, and are an integral part of, the long-term strategic objectives.
Align Interests with Stockholders
Align the interests of executives with those of our stockholders by tying bonus payout to Company performance.
| Company performance objectives based on Board-approved annual target derived from and aligned with our long-term strategic objectives, which related to long-term profitable growth.
Use threshold, target and maximum bonus payout levels to strike appropriate balance between compensation incentives and risks. | Cash bonus payment based entirely on our achievement relative to the Performance Target, except for Mr. Walker, whose cash bonus payment was based on both our achievement relative to the Performance Target, and on the achievement of individual MBOs.
The Performance Target is in line with the level of Company performance actually projected, based on our internal forecasts and Board-approved annual budget, and is designed to keep our Company on track to achieve our long-term strategic objectives.
| Performance Target: The Committee determined that 101% of the Performance Target was achieved. Accordingly, 101% of the target cash bonus amount was earned.
MBOs: With respect to Mr. Walker, the Committee determined that he achieved his MBOs significantly above the target level. Accordingly, 280% of the MBO portion of his bonus opportunity was earned.
|
Target Cash Bonus Amount
Our Board established a target cash bonus amount for each NEO for 2018, which wastable below. Such targets were determined by our Board by reference to a number of factors,items, including the executive’s responsibilities, base salary, our projected financial performance, and a review of compensation data in our industry. For 2018, each of our NEOs
| | | | | | | | | | | | | | | | | | | | | | Name | | Over Achievement Target Cash Bonus Amount ($) | | 2021 STI Plan Target Cash Bonus Amount ($) | | | Jason Randall | | 300,000 | | | 360,000 | | | | Fay Sien Goon(1) | | — | | | 450,000 | | | | Matt Mazza | | 150,000 | | | 200,000 | | | | Shane Trigg | | 200,000 | | | 420,000 | | | | Jonathan Walker | | 200,000 | | | 350,000 | | | | Ida Kane | | 200,000 | | | 390,000 | | |
(1)Ms. Goon joined the Company in October 2021 and was eligible to receive a cash bonus as set forth in the following table (base salary provided for reference): | | | | | | | Name | | Base Salary | | Target Cash Bonus Amount | | Jason Randall | | $360,000 | | $360,000 | | Ida Kane | | $340,000 | | $340,000 | | Klaus Schauser | | $150,000 | | $87,500 | Jonathan Walker(1) | | $250,000 | | $150,000 |
(1) Represents $100,000prorated portion of her total STI Plan target cash bonus with respect toamount, assuming achievement of theapplicable performance metrics.
2021 Performance TargetMetrics and $50,000 target cash bonus with respect to achievement of his MBOs.Payout Curves
Performance Target
Cash bonuses were earned under the 2018 Short-Term Cash Incentive2021 STI Plan and Over Achievement Plan based entirely on our achievement of a pre-established Performance Target, except with respect to Mr. Walker, whose bonus opportunity was also based in part on his individual achievement of pre-determined MBOs. The portion of the short-term cash bonus opportunity that relates to the Performance Target could be earned based on our Company’sCompany's actual performance relative to preset performance metrics. For the STI Plan: Performance Target. For 2018, we selected a metric that relatedmetrics for Messrs. Randall, Mazza and Walker and Mses. Kane and Goon were: ▪Revenue less cost of revenue (excluding depreciation and amortization) ("Net Revenue"); and ▪Net new property manager units added to free cash flow as our performance metric because our Board believed that it was importantplatform during 2021 ("Net New Units"). Performance metrics for Mr. Trigg were: ▪Net revenue attributable to focus on profitable growth. For 2018, the Performance Target was $26.9 million.AppFolio Property Manager business ("Real Estate Net Revenue"); and ▪Net New Units. For Messrs. Randall, Mazza and Walker and Mses. Kane and Goon, 75% of the 2021 STI Plan target cash bonus amount was tied to achievement of the Net Revenue target and, in the case of Mr. Trigg, the Real Estate Net Revenue target; 25% of the 2021 STI Plan target cash bonus amount was tied to achievement of the Net New Units target for all NEOs. Bonus amounts earned under the 2021 STI Plan were determined by a payout curve. For the Net Revenue and Real Estate Net Revenue performance metrics, no payment was earned if achievement was below 90% of target, and the Performance Target (threshold),maximum payment was capped if achievement was 150% of target or greater. For the Net New Units performance metric, no cash bonus could be earned. payment was earned if achievement was below 85% of target, and the maximum payment was capped if achievement was 150% of target or greater. For the Over Achievement Plan: The performance equalmetric for Messrs. Randall, Mazza, Trigg and Walker and Ms. Kane in connection with the Over Achievement Plan was net new residential property manager units added to our platform during 2021 ("2021 Net New Residential Units").
Bonus amounts earned under the Over Achievement Plan were determined by a payout curve. For the 2021 Net New Residential Units performance metric, no payment was earned if achievement was below 100% of the Performance Target (target), 100% of the target, cash bonus was achievable. For performance equal to or greater than 150% of the Performance Target (maximum), 150% of the target cash bonus was achievable. For performance between 90% and 150% of the Performance Target, the cash bonus was determined by reference to a sliding payout scale that was established by our Board. Our Board determined our actual achievement of the Performance Target by reference to our audited financial statements for 2018, as adjusted by our Board to reflect certain pre-determined items, including the impact of changes in accounting standards and M&A-related transaction activity, which our Board believes do not reflect the core performance of our business. In addition, achievement relative to the Performance Target was calculated without taking into account the impact of over-performance, and the resulting bonus payouts.maximum payment was capped if achievement was 130% of target or greater. Management by Objectives (MBOs)
The MBOs comprise a portion of the total short-term cash bonus opportunity for Mr. Walker. These objectives were individualized to Mr. Walker due to the nature of his role at our Company. For 2018, Mr. Walker’s MBOs related to objectives designed to promote certain financial management goals related to customer growth from new technology offerings.
Calculation of Actual Payout under the 2018 Short-Term Cash Incentive Plan2021 Payouts
Consistent with the application of the bonusperformance metrics and payout formulacurves described above, and after review of our 2021 Annual Report and consultation with appropriate members of our finance and accounting organization, our Board, upon completionthe recommendation of the 2018 annual audit and confirmation by our audit committee, our Board determined that we achieved 101% ofCompensation Committee, verified the Performance Target, or $26.93 million in 2018. As a result, each of our NEOs earned 101% offollowing: For the total short-term cash bonus opportunity based on achievement relative to the Performance Target.2021STI Plan: In addition, our Board determined that the MBOs were achieved by Mr. Walker significantly above the target level, which reflects the execution of his critical management objectives, significantly above expectations. Mr. Walker’s MBO had a threshold and target performance level, but no maximum performance level. With respect to the total short-term cash bonus opportunity that was based onNet Revenue achievement of his MBOs, he earned 280%104% of target; Real Estate Net Revenue achievement of 105% of target; and 2021 Net New Units achievement of 104% of target.
For the Over Achievement Plan: 2021 Net New Residential Units achievement of 116% of target. The target payout amount, as well as the actual payments made to each NEO pursuant to the 2018 Short-Term Cash Incentive2021 STI Plan and Over Achievement Plan are as follows: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name | | Objective | | Over Achievement Target Cash Bonus Amount ($) | | 2021 STI Plan Target Cash Bonus Amount ($) | | 2021 Aggregate Actual Payout ($) | | | Jason Randall | | Performance Target | | 300,000 | | | 360,000 | | | 1,098,000 | | | | Fay Sien Goon(1) | | Performance Target | | — | | | 450,000 | | | 120,205 | | | | Matt Mazza(2) | | Performance Target | | 150,000 | | | 200,000 | | | 433,565 | | | | Shane Trigg | | Performance Target | | 200,000 | | | 420,000 | | | 997,500 | | | | Jonathan Walker | | Performance Target | | 200,000 | | | 350,000 | | | 875,000 | | | | Ida Kane(3) | | Performance Target | | 200,000 | | | 390,000 | | | 195,000 | | |
(1)Ms. Goon joined the Company in October 2021 and received a prorated payment under the 2021 STI Plan. (2)Mr. Mazza received a prorated payment under each of the 2021 STI Plan and Over Achievement Plan due to a medical leave of absence taken in 2021. (3)Prorated amount paid to Ms. Kane in connection with her departure from the Company and calculated assuming 100% achievement of performance metrics. 2022 Plan Targets With respect to fiscal year 2022, our Board established target cash bonus amounts under the STI Plan, which was renamed the "Corporate Bonus Plan" this year, for each NEO, as set forth in the table below. Such targets were determined by a number of items, including the executive’s responsibilities, base salary, our projected financial performance, and a review of compensation data in our industry. | | | | | | | | | | | | | | | | Name | | 2022 Corporate Bonus Plan Target Cash Bonus Amount ($) | | | Jason Randall | | 500,000 | | | | Fay Sien Goon(1) | | 2,450,000 | | | | Matt Mazza | | 225,000 | | | | Shane Trigg | | 440,000 | | | | Jonathan Walker | | 375,000 | | | | Ida Kane(2) | | — | | |
(1)Ms. Goon's 2022 Corporate Bonus Plan target amount includes a bonus opportunity of $450,000 at target and a one-time bonus opportunity of $2,000,000 at target, which was part of Ms. Goon's offer of employment. (2)Ms. Kane resigned from her role as Chief Financial Officer in June 2021 and is not a participant in the 2022 Corporate Bonus Plan. 2022 Performance Metrics Cash bonuses are earned under the 2022 Corporate Bonus Plan based entirely on the Company's actual performance relative to preset performance metrics. Performance metrics for all NEOs are: ▪Net new residential units added to our platform during 2022 ("2022 Net New Residential Units"); ▪"Revenue"; and
| | | | | | | | | Name | | Objective | | Target Cash Bonus Amount | | 2018 Actual Payout | | Jason Randall | | Performance Target | | $360,000 | | $363,600 | | Ida Kane | | Performance Target | | $340,000 | | $343,400 | | Klaus Schauser | | Performance Target | | $87,500 | | $88,375 | | Jonathan Walker | | Performance Target | | $100,000 | | $101,000 | | | MBO | | $50,000 | | $140,000 |
▪Non-GAAP operating margin defined as GAAP operating margin less non-cash transactions and less one-time or non-recurring transactions ("Operating Margin"). 60% of the 2022 Corporate Bonus Plan target cash bonus amount is tied to achievement of the 2022 Net New Residential Units target; 20% of the 2022 Corporate Bonus Plan target cash bonus amount is tied to achievement of the Revenue target; and 20% of the 2022 Corporate Bonus Plan target cash bonus amount is tied to achievement of the Operating Margin target. Bonus amounts earned under the 2022 Corporate Bonus Plan are determined by a payout curve. For the 2022 Net New Residential Units performance metric, no payment is earned if achievement is below 80% of target, and the maximum payment is capped if achievement is 120% of target or greater. For the Revenue performance metric, no payment is earned if achievement is below 90% of target, and the maximum payment is capped if achievement is 110% of target or greater. For the Operating Margin performance metric, no payment is earned if Operating Margin is below 3.5% of target, and the maximum payment is capped if achievement is above 3.5% of target. Long-Term Executive Cash Incentive PlanPlans In February 2018, our Board, upon the recommendation of the Compensation Committee, adopted a long-term executive cash incentive plan and granted performance awards thereunder (the "2018 Long-Term Awards") to Mr. Randall and Ms. Kane. The 2018 Long-Term Awards were granted in lieu of additional equity incentive awards, and provide for cash payments to the recipients upon the achievement by the Company of long-term performance targets. The 2018 Long-Term Awards were granted with the intent to provide Mr. Randall and Ms. Kane with significant additional motivation to contribute to the Company's achievement of its long-term strategic objectives, which the Board believes will result in increased "economic value" on a per share basis ("EVPS"). Payout under the Long-Term Awards is based on surpassing a threshold increase in EVPS measured as of December 31, 2023, 2024 and 2025 (each, a "Measurement Period"). If the actual increase in EVPS at the end of a Measurement Period does not surpass the pre-set threshold, no bonuses will be due under the 2018 Long-Term Awards for such measurement year. However, if the actual increase in EVPS at the end of a Measurement Period surpasses the pre-set threshold, the bonuses due under the 2018 Long-Term Awards could be significant, as the maximum payout amount is uncapped. Payment of bonus amounts under the 2018 Long-Term Awards are contingent upon the recipient remaining continuously employed with the Company through the last day of the relevant Measurement Period, subject to limited exceptions. As such, Ms. Kane forfeited her 2018 Long-Term Award in connection with her resignation from the Company in 2021. In 2020, as part of Mr. Trigg's new hire compensation, our Board, upon recommendation of the Compensation Committee, adoptedgranted Mr. Trigg two long-term cash incentive awards that provided for cash payments to Mr. Trigg upon the achievement of specific real estate revenue and real estate adjusted pre-tax cash flow metrics measured at December 31, 2023 and 2025 (the "Real Estate Long-Term Executive Cash Incentive Plan,Awards"). In 2022, the Real Estate Long-Term Awards were canceled by the Board in connection with the grant to Mr. Trigg of alternative compensation, as discussed in this section "Compensation Discussion and Analysis", which it granted performance awards, or the is consistent with our evolved NEO Compensation Program philosophy, which favors consistency and internal alignment amongst compensation for our executives where appropriate. Long-Term Awards, pursuant to a Long-Term Executive Cash Incentive Award Offer entered into with Mr. Randall and Ms. Kane, or the Recipients. The Long-Term Executive CashEquity Incentive Plan is designed to reward Our 2015 Plan provides for the Recipients for their individual contributionsissuance of time and performance-based restricted stock units to our achievementexecutives, which may be settled for shares of oneour Class A Common Stock or more long-termcash. We believe that the issuance of restricted stock units align the interests of our executives with those of our stockholders by incentivizing our executives to build Company value that can be sustained over time, and helping to manage the dilutive effect of our equity compensation programs. Restricted stock units have value to recipients even in the absence of stock price appreciation, which helps us retain and incentivize employees during periods of market volatility, and also results in our granting fewer shares of common stock than through stock options with an equivalent grant date fair value.
Time-Based Restricted Stock Unit Grants
company performance objectives whichWith respect to fiscal year 2021, our Board, may adjust at its discretion under certain circumstances, over a specified period of time, or the Performance Period.
The following is an overviewupon recommendation of the at-risk, performance-based Long-Term Executive Cash Incentive PlanCompensation Committee, approved (i) time-based restricted stock unit grants for Ms. Goon valued at $6,600,000 in the aggregate on the date of grant, with $6,000,000 as part of her new hire equity compensation and $600,000 as part of her annual equity compensation, and (ii) time-based restricted stock unit grants for Mr. Mazza valued at $4,180,000 in the Long-Term Awards includingaggregate on the underlying philosophydate of grant, with $4,000,000 as part of his promotion equity compensation and considerations that provide$180,000 as part of his annual compensation. Ms. Goon’s new hire award and annual award vest annually over five years and four years, respectively, in equal installments, subject to her continued employment with us through the basisapplicable vesting date. Mr. Mazza’s awards vest annually over four years in equal installments, subject to his continued employment with us through the applicable vesting date.
With respect to fiscal year 2022, our Board, upon recommendation of the Compensation Committee, approved time-based restricted stock unit grants (i) for incorporating this element into our NEO Compensation Program:Ms. Goon valued at $1,200,000 in the aggregate on the date of grant as part of her annual equity compensation, (ii) for Mr. Walker valued at $2,400,000 in the aggregate on the date of grant as part of his annual equity compensation, (iii) for Mr. Trigg valued at $920,000 in the aggregate on the date of grant as part of his annual equity compensation, and (iv) for Mr. Mazza valued at $800,000 in the aggregate on the date of grant as part of his annual equity compensation. The foregoing time-based restricted stock unit grants vest quarterly over four years in equal installments, subject to continued employment with us through the applicable vesting date. | | | | | | | | | Long-Term Executive Cash Incentive Plan | 26 | 2022 Proxy Statement |
At-Risk, Performance-Based Cash Compensation
| | | | | | | | | Philosophy | Considerations | Performance Criteria | Pay for Performance | Retain Executives
Long-term focus provides greater retention benefits over time, and consistent leadership from a team with a long-term vision and commitment to our Company.
Reward Achievement through Performance BasedExecutive Compensation
Establish appropriate performance objectives that we believe will incentivize our NEOs to drive our Company to achieve our long-term strategic objectives.
Align Interests with Stockholders
Align the interests of executives with those of our stockholders by tying bonus payout to Company performance which we believe will positively impact long-term value for our stockholders.
| Establishes the terms upon which long-term cash incentive bonuses may become payable to the Recipients. The plan is not applicable to any other of our executive officers or employees.
Based on achievement of long-term Company performance targets to ensure the Recipients are focused on our long-term strategic objectives.
Granted in lieu of additional equity incentive awards; the Board currently does not intend to issue additional equity awards to the Recipients while this plan is in effect.
Payment of any cash bonus amount will be contingent upon the Recipient remaining continuously employed as our executive officer through the last day of the relevant Performance Period, subject to limited exceptions.
Recipients are provided with significant additional motivation to contribute to our achievement of our long-term strategic objectives, which we believe will increase our economic value per share and ultimately the value of the equity held by our stockholders, including Recipients themselves. | Designed to reward the Recipients for their contributions towards achieving profitable growth that results in increased "economic value" on a per share basis, or EVPS, over the next eight years.
Bonus payout is based on actual increase in EVPS measured as of December 31, 2023, 2024 and 2025, so long as such increase reflects the achievement of a threshold internal rate of return.
If the actual increase in EVPS at the end of any Performance Period reflects the achievement of a low internal rate of return, no cash bonuses will be paid pursuant to the Long-Term Awards for that Performance Period. However, if the actual increase in EVPS as of the end of any Performance Period reflects the achievement of a high internal rate of return, and therefore significant economic value added, the cash bonuses paid to the Recipients would be significant.
| Because bonus payout is dependent on our performance relative to an internal rate of return that results in increases in EVPS over a period of multiple years into the future, any bonus amounts that may become payable upon achievement of the pre-established performance objectives are highly speculative and we are currently unable to predict a reasonable range for the bonus amounts with any degree of certainty.
No accrual has yet been made under the plan, as a result of this uncertainty. |
Performance-Based Restricted Stock Unit Grants
2021 PRSU Awards
With respect to fiscal year 2021, our Board, upon recommendation of the Compensation Committee, approved performance-based restricted stock unit grants ("PRSU Awards") (i) for Ms. Goon valued at $2,400,000 on the date of grant (assuming 100% performance metric achievement) as part of her new hire equity compensation, (ii) for Mr. Trigg valued at $400,000 on the date of grant (assuming 100% performance metric achievement) as part of his annual equity compensation, and (iii) for Mr. Mazza valued at $270,000 on the date of grant (assuming 100% performance metric achievement) as part of his annual equity compensation. The aforementioned PRSU Awards vest fully in a single tranche based on the achievement of pre-established consolidated net revenue growth targets measured over a three-year period ending on December 31, 2023, assuming continued employment through such applicable vesting date. The actual number of shares of our Class A Common Stock to be issued in settlement of an applicable 2021 PRSU Award at the end of the measurement period will range from 0% to 100% of the shares subject to the applicable PRSU Award depending on achievement of the specific performance metrics. Achievement of performance metrics in excess of 100% of the target, with such over performance capped at 150%, will result in a performance-based cash bonus payment between 0% and 65% of the target value of the PRSU Award determined pursuant to a pre-established payout curve. For example, if the performance metric of a 2021 PRSU Award is achieved at 110% of target, then 100% of the shares subject to the PRSU Award would be issued to the recipient and a performance-based cash bonus payment equal to 20% of the target value of the PRSU Award would also be paid to the recipient. No payment is due under the 2021 PRSU Awards if achievement is below the threshold amounts for the performance metrics. Also during 2021, our Board, upon recommendation of the Compensation Committee, approved a PRSU Award, valued on the date of grant at $1,200,000, for Mr. Walker as part of his annual equity compensation (the "Walker Award"). The Walker Award vests based on the achievement of pre-established criteria on a pass/fail basis, as assessed by the Board and taking into consideration the recommendation of the CEO, with a performance measurement date of December 31, 2021. 2021 PRSU Award Payouts In February 2022, the Board, taking into consideration the recommendation of the CEO, determined that Mr. Walker satisfactorily achieved the pre-established criteria and earned 100% of the Walker Award. Mr. Trigg and Mr. Mazza were each granted, in prior years, a PRSU Award that vested based on the achievement of pre-established consolidated net revenue growth targets measured over a three year period ending December 31, 2021, assuming continued employment through the performance period. Such net revenue growth targets fell below the minimum thresholds, and Mr. Trigg and Mr. Mazza received no payment under their PRSU Awards. 2022 PRSU Awards With respect to fiscal year 2022, our Board, upon recommendation of the Compensation Committee, approved PRSU Awards (i) for Ms. Goon valued at $1,800,000 on the date of grant (assuming 100% performance metric achievement) as part of her annual equity compensation, (ii) for Mr. Walker valued at $3,600,000 on the date of grant (assuming 100% performance metric achievement) as part of his annual equity compensation, (iii) for Mr. Trigg valued at $1,380,000 on the date of grant (assuming 100% performance metric achievement) as part of his annual equity compensation, and (iv) for Mr. Mazza valued at $1,200,000 on the date of grant (assuming 100% performance metric achievement) as part of his annual equity compensation. With respect to fiscal year 2022, the Board shortened the measurement period for the PRSU Awards such that the 2022 PRSU Awards vest based on the achievement of pre-established Revenue and Operating Margin targets measured over a one-year period ending on December 31, 2022, assuming continued employment through the applicable vesting dates. One-third of the 2022 PRSU Awards vest on achievement of the performance metrics, with the remainder vesting quarterly over the following two years in equal installments. 80% of the 2022 PRSU Awards target share amount is tied to achievement of the Revenue target, and 20% of the 2022 PRSU Awards target share amount is tied to achievement of the Operating Margin target. The actual number of shares of our Class A Common Stock to be issued in settlement of a 2022 PRSU Award at the end of the measurement period will range from 0% to 150% as determined by a payout curve. For the Revenue performance metric, no payment is earned if achievement is below 90% of target, and the maximum payment is capped if achievement is 110% of target or greater. For the Operating Margin performance metric, no payment is earned if Operating Margin is below 3.5% of target, and the maximum payment is capped if achievement is above 3.5% of target. Employee Benefits
The following table provides summary information regardingOur executive officers, including our NEOs, are eligible to receive the keysame employee benefits that are generally available to all our NEOs during 2018:full-time employees. These benefits include our medical, dental and vision insurance and life and disability insurance plans. In structuring these benefit plans, we seek to provide an aggregate level of benefits that are comparable to those provided by similar companies.
| | | | | | | | | Employee Benefits | 27 | 2022 Proxy Statement |
Guaranteed Other Compensation
| | | | | | | | | Philosophy | Considerations | Performance Criteria | Attract and Retain Executives
Provide our NEOs with competitive broad-based employee benefits structured to attract and retain key executives.
| Generally reflect benefits provided to all of our full-time employees. | 401(k) plan for the benefit of our eligible employees, including our NEOs. In 2018, we increased the amount by which we match contributions made by participants in our 401(k) plan from (i) 50% of the first 4% of eligible compensation contributed by the employee to (ii) 50% of the first 6% of eligible compensation contributed by the employee. Employees who participate in the 401(k) plan are immediately vested in their own contributions while the employer match vests at a rate of 25% per year until they vest 100% after four years of service.
Medical, dental, vision and other welfare benefit plans for all full-time employees, with certain enhanced health-related reimbursement benefits for certain executives, including our NEOs.
Company-paid short and long-term disability insurance and life insurance for all full-time employees, with certain enhanced life insurance benefits for executives and vice presidents, including our NEOs.
Relocation expenses for new hires.
Executive Compensation |
In addition, our NEOs receive a supplemental medical reimbursement benefit that covers up to $10,000 annually of medical, dental, vision, and pharmacy expenses not covered under the Company's insurance plans, subject to certain exceptions. We also maintain a tax-qualified 401(k) retirement plan that provides eligible U.S. employees with an opportunity to save for retirement on a tax-advantaged basis. In 2021, we matched 50% of the first 6% of eligible compensation contributed by the employee. Such matching contributions are immediately and fully vested. Employment Agreements and Similar Arrangements We have entered into an employment agreement with Ms. Goon. We have not entered into an employment agreement with Messrs. Randall, Mazza, Trigg and Walker. We currently do notMs. Goon’s Employment Agreement
On September 15, 2021, we entered into an employment agreement with Ms. Goon to serve as our Chief Financial Officer, starting October 18, 2021. Her employment agreement provides for “at will” employment and sets forth the initial terms and conditions of Ms. Goon's employment, including an annual base salary, eligibility to participate in our employee benefit plans, eligibility to participate under the STI Plan (as discussed above under the section title "Short-Term Cash Incentive Plan"), a special one-time award under the Corporate Bonus Plan for 2022 with a target bonus opportunity of $2,000,000 (as discussed above under the section titled "Short-Term Cash Incentive Plan"), a one-time sign-on bonus of $500,000, and, subject to approval of the Board, eligibility to receive a grant of time-based restricted stock unit awards and PRSU Award (as discussed above under the section titled "Long-Term Equity Incentive Plan"). Ms. Goon’s employment agreement provides that if she is terminated by us for any reason other than for Cause or Ms. Goon resigns for Good Reason (other than in connection with a Corporate Transaction, as each term is defined in her employment agreement), then Ms. Goon will be entitled to receive a lump sum payment equal to twelve months of her then-current base salary, a prorated cash bonus award for the fiscal year in which such termination occurs, and twelve months of COBRA premiums. With respect to each outstanding time-based restricted stock unit award held by Ms. Goon (each a “Time-Vesting Award”), the portion of such Time-Vesting Award that would have vested had Ms. Goon remained employed with the Company for an additional twelve months will accelerate upon such qualifying termination, subject to limited exceptions. With respect to each outstanding PRSU Award held by Ms. Goon, each PRSU Award shall accelerate on a prorated basis based on the number of days employed during the applicable performance period and achievement of the applicable performance metrics determined by the Board based on estimated forecasts. In addition, if Ms. Goon’s employment agreementswith us is terminated other than for Cause, or other similar typesMs. Goon resigns for Good Reason, on or within twelve months following the consummation of arrangementsa Corporate Transaction, then all outstanding restricted stock unit awards held by Ms. Goon shall accelerate and become fully-vested. Kane’s Separation Agreement and General Release On June 4, 2021, we entered into a separation and release agreement with Ms. Kane. This agreement provided for severance benefits, including a lump sum payment of $1,000,000, less applicable withholding, Company-paid COBRA benefits through December 31, 2022 subject to certain limitations, reimbursement of certain brokerage fees up to $10,000, and an extension of the post-termination exercise period applicable to her previously-granted and vested stock options. In consideration of these severance payments and benefits, Ms. Kane released the Company to the fullest extent of the law, and the Company provided a limited release of Ms. Kane related to claims stemming from any of our NEOs.
unlawful activity during her employment.
Change in Control Provisions
The following are the only severance or change in control provisions that are applicable to our NEOs.
Optional Payments under Long-Term Awards
The 2018 Long-Term Awards provide that each Recipientthe recipient has the option to receive a one-time cash payment in lieu of the Long-Term Awardapplicable award in the event that:that (i) we undergo a "change in control",control," (ii) the Recipientrecipient has been continuously employed by us through the date of the change in control, and (iii) within one hundred and eighty (180) days after the change in control the Recipientrecipient is either involuntarily terminated by us, with or without cause, or voluntarily resigns from his or her employment with us. The amount of the cash bonus to be paid under these circumstances is dependent upon the year in which the change in control occurs (assuming the other conditions are met). If Under the change in control had occurred during 2018 each Recipient would have been entitled to a cash bonus, payable by our Company, of $1,000,000, which amount will increase by $1,000,000 per year for each year thereafter through 2022, with the amount payable in 2022 then continuing to be payable in 2023 with no additional increase. If a change in control occurs after a Performance Period ending December 31, 2023, 2024 or 2025, and the Recipient elects such one-time cash payment, in addition to such one-time payment, the Recipient will be entitled to retain any payments previously made to them under the Long-Term Awards, for any Performance Period preceding such change in control.
Aa "change in control" will occur if, at any point in time, a stockholder, or a group of affiliated stockholders, havehas total combined voting power greater than the total combined voting power of the NEOs and certain directors and certain other stockholders of the Company, and the affiliates of such directors and stockholders. The Board shall, in its sole discretion and at an appropriate time, determine if such pointa "change in timecontrol" has occurred.
Equity Award Acceleration
EachAs mentioned above, Ms. Goon’s employment agreement provides that if her employment with us is terminated other than for Cause, or Ms. Goon resigns for Good Reason, on or within twelve months following the consummation of our 2015 Stock Incentive Plan, or our 2015 Plan, and 2007 Stock Incentive Plan, or our 2007 Plan, provides for acceleration of equity awards under the plan under certain circumstances in connection with a change in control.
Pursuant to our 2015 Plan, if we are party to a merger or consolidation, sale of all or substantially all our assets or similar change in control transaction, as furtherCorporate Transaction (as each term is defined in our 2015 Plan,her employment agreement), then all outstanding restricted stock unit awards including any vesting provisions, may be assumed or substituted by the successor company. In the alternative, outstanding awards may be cancelled in connection with a cash payment. Outstanding awards that are not assumed, substituted or cashed out will accelerate in full and expire upon the closing of the transaction. Awards held by non-employee directors will immediately vest as to all or any portion of the shares subject to the awardMs. Goon shall accelerate and will become exercisable at such times and on such conditions as the Committee determines.fully-vested.
With respect to stock options and restricted stock awards previously granted under our 2007 Plan, our Board has the authority to provide that, in the event of a "change in control," as defined in our 2007 Plan, vesting of stock options and restricted stock will accelerate automatically, effective as of immediately prior to the change in control. Our Board has the discretion to provide other terms and conditions in individual equity award agreements that relate to the vesting of the stock options and restricted stock awards upon a change in control, or for the assumption of stock options or restricted stock awards in the event of a change in control. Outstanding stock options terminate upon a change in control except to the extent they are assumed upon a change in control.
Other Compensation-Related Topics
Role of Executive Officers in Executive Compensation Discussions The members of the Compensation Committee are in the best position to assist our Board in developing and reviewing our executive compensation programs and the compensation considerations applicable to our directors and executive officers, because each is an independent director under applicable SEC rules and regulations and NASDAQ Listing Rules, and a majority are significant stockholders of our Company.Rules. Nevertheless, the Compensation Committee may from time to time solicit the input of our CEO and CFO regarding compensation for our other executive officers, particularly with respect to salary, cash bonus opportunityopportunities and equity awards. While our CEO and CFO may participate in some deliberations regarding compensation for our other executive officers, they do not participate in, and are not present at, any deliberations regarding their own compensation. The Compensation Committee considers the information provided by our CEO and CFO in making recommendations regarding executive compensation to our Board. Compensation Risk Considerations In assessing our overall compensation philosophy and the elements of our executive compensation programs, we consider how our programs may encourage risk-taking by employees, taking into account a number of factors, including the following: The Committee and our Board are comprised of significant stockholders and stockholder representatives who have significant influence on our compensation practices, which results in an alignment of our compensation practices with the interests of our stockholders.
We favor long-term incentive compensation over short-term incentive compensation in order to promote achievement of our long-term corporate objectives.
Our Long-Term Executive Cash Incentive Plan is directly aligned with, and designed to enhance, stockholder value, with the performance objectives focused on increased economic value over time as measured on a per share basis.
We focus on limiting equity dilution through conservative use of equity compensation. While we continue to grant equity to certain senior management, no grants of equity-based awards were made to our NEOs in 2018 because of our overall focus on limiting dilution, and the significant incentives already provided to our NEOs under our short-term and long-term cash incentive plans.
Our executive compensation programs consist of both guaranteed pay and at-risk pay, and the Committee reviews this mix regularly.
We regularly review data regarding the executive compensation programs of other companies in our industry of a similar size and stage, as well as larger companies headquartered in California, to ensure alignment with our
executive compensation programs and market competitiveness. While we did not engage a compensation consultant in 2018, we did review and consider data from both targeted and broader-based compensation surveys in order to gain a broader perspective on overall market trends. However, we did not set a peer group for 2018, and thus did not benchmark executive compensation against a peer group for purposes of setting any specific element of compensation or total compensation.
Our performance based awards are earned based on the achievement of multiple Company strategic objectives over varying periods of time, as well as, in some cases, individual performance objectives.
By providing for potentially significant payouts to the Recipients, our Long-Term Executive Cash Incentive Plan encourages retention for so long as the Recipients perceive it to be reasonably possible to achieve the company performance objectives, as they may evolve over time. While such payouts could be substantial over time, they are limited to our two most senior executives, and will be closely correlated with increases in stockholder value.
Beginning this year, we are recommending that our stockholders choose to provide an advisory vote on our pay practices on an annual basis, and the Committee will consider the outcome of the vote when establishing our annual NEO Compensation Program.
Our Insider Trading Policy prohibits our NEOs and other executive officers from hedging the economic interest in our securities, and from pledging our securities.
We have not adopted formal stock ownership guidelines, but a significant portion of our Board and NEOs hold a substantial equity stake in our Company.
| | | | | | | | | | The Compensation Committee and our Board are comprised of significant stockholders and stockholder representatives who have significant influence on our compensation practices, which results in an alignment of our compensation practices with the interests of our stockholders. | | | We favor long-term incentive compensation over short-term incentive compensation to promote achievement of our long-term corporate objectives. | | | The 2018 Long-Term Awards granted to Mr. Randall are directly aligned with, and designed to enhance, stockholder value, with the performance objectives focused on increased economic value over time as measured on a per share basis. | | | We focus on limiting equity dilution through conservative use of equity compensation. While we continue to grant equity to certain senior management, we focus on limiting dilution by balancing equity compensation with other incentives provided to our NEOs under our short-term and long-term cash incentive plans. | | | Our executive compensation programs consist of both guaranteed pay and at-risk pay, and the Compensation Committee reviews this mix regularly. | | | We regularly review data regarding the executive compensation programs of other companies in our industry of a similar size and stage, as well as larger companies headquartered in California, to ensure alignment with our executive compensation programs and market competitiveness. While we have not engaged a compensation consultant, we did review and consider data from both targeted and broader-based compensation surveys in order to gain a broader perspective on overall market trends. However, we have not formally set a peer group, and thus did not formally benchmark executive compensation against a peer group for purposes of setting any specific element of compensation or total compensation. | | | Our performance-based awards are earned based on the achievement of multiple Company strategic objectives over varying periods of time. | | | By providing for potentially significant payouts to Mr. Randall, the 2018 Long-Term Awards encourage retention for so long as Mr. Randall perceives it reasonably possible to achieve the Company performance objectives, as they may evolve over time. While such payouts could be substantial over time, they are limited to our most senior executive, and will be closely correlated with increases in stockholder value. | | | Subject to limited exceptions and, with respect to our directors and NEOs, as may be disclosed below in the Section titled "Security Ownership of Certain Beneficial Owners and Management," our insider trading policy prohibits our NEOs, directors, and employees from hedging the economic interest in our securities, and from pledging our securities. | | | Our change in control arrangements are designed to attract and retain executives without providing excessive benefits. | |
Our Board believes that, although the majority of the compensation opportunity provided to our executives is at-risk pay that is determined based upon the achievement of our short-term and long-term strategic objectives, our executive compensation programs do not encourage excessive or unnecessary risk-taking. Our Board does not believe that our executive compensation programs are reasonably likely to have a material adverse effect on us.
Tax and Accounting Considerations Among the factors it considers when making executive compensation recommendations, the Compensation Committee considers the anticipated tax and accounting impact to us (and to our executives) of various payments, equity awards and other benefits. The Compensation Committee considers the impact of the provisions of Section 162(m) of the Code. That section generally limits the deductibility of compensation paid by a publicly-held company to "covered employees" for a taxable year to $1.0 million, except for certain "performance-based compensation" payable pursuant to written contracts that were in effect on November 2, 2017 and that are not modified in any material respect on or after that date. "Covered employees" generally include our CEO, CFO and other highly compensated executive officers. Thus, our tax deduction with regard to compensation of these officers is limited to $1.0 million per taxable year with respect to each such officer, except for cash and equity awards that were in effect on November 2, 2017, and qualified for the aforementioned exception to non-deductibility under Section 162(m) of the Code. With respect to cash incentive and equity awards that may not qualify for such exception and those that we may grant in the future, we do not anticipate that the $1.0 million deduction limitation set forth in Section 162(m) of the Code will have a material impact on our results of operations. The Compensation Committee also considers the impact of Section 409A of the Code, and in general, our executive plans and programs are designed to comply with the requirements of that section so as to avoid possible adverse tax consequences that may result from noncompliance. Although we reviewDevelopments and consider thechanges in accounting standards and tax and accounting laws, rules, and regulations thatlaw may impact our compensation decisions. As accounting standards and applicable tax laws develop, we may revise certain features of our executive compensation programs,program to appropriately align our executive compensation program with our overall executive compensation philosophy and objectives. However, we believe itthat these are only some of the many relevant considerations of setting executive compensation, and should not be permitted to compromise our ability to design and maintain compensation programs that are consistent with our compensation philosophy and objectives. Accordingly, we retain the discretion to pay compensation that is not in the best interests of our stockholders to restrict our Board’s and the Committee’s discretion and flexibility in developing appropriate executive compensation programs.tax deductible and/or could have adverse accounting consequences.
COMPENSATION COMMITTEE REPORTCompensation Committee Report
The compensation committeeCompensation Committee has reviewed and discussed with management the information included under the section of this Proxy Statement entitledtitled "Compensation Discussion and Analysis," including the Summary Compensation Table and related compensation tables, notes and narrative discussion. Based on such review and discussion, the compensation committeeCompensation Committee has recommended to the Board of Directors that the "Compensation Discussion and Analysis" disclosure, including the Summary Compensation Table and related compensation tables, notes and narrative discussion, be included in this Proxy Statement and incorporated into our Annual Report. Respectfully submitted by the members of the compensation committee of the Board of Directors:
William Rauth (Chairperson)
Janet Kerr
Andreas von Blottnitz
In accordance with SEC rules and regulations, this Compensation Committee Report will not be deemed to be part of or incorporated by reference by any general statement incorporating by reference this Proxy Statement into any filing under the Securities Act, of 1933, as amended, or the Securities Act, or under the Securities Exchange Act of 1934, as amended, or the Exchange Act, except to the extent that we specifically incorporate this information by reference, and will not otherwise be deemed “soliciting material” or “filed” under either the Securities Act or the Exchange Act.
Respectfully submitted by the members of the Compensation Committee of the Board of Directors:
Andreas von Blottnitz (Chairperson)
Janet Kerr
SUMMARY COMPENSATION TABLE
Summary Compensation Table The following table sets forth summary compensation information for our named executive officers for the years ended December 31, 2018, 20172021, 2020 and 2016.2019: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name and Title | | Year | | Salary ($) | | Bonus ($) | | Stock Awards(1) ($) | | Option Awards ($) | | Non-Equity Incentive Plan Compensation(2) ($) | | All Other Compensation(3) ($) | | Total
($) | | Jason Randall | | 2021 | | 360,000 | | | — | | | — | | | — | | | 1,098,000 | | | 3,382 | | | 1,461,382 | | | President and Chief Executive Officer | | 2020 | | 360,000 | | | — | | | — | | | — | | | 374,400 | | | 7,830 | | | 742,230 | | | | 2019 | | 360,000 | | | — | | | — | | | — | | | 302,400 | | | 450 | | | 662,850 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Fay Sien Goon(4) | | 2021 | | 93,967 | | | — | | | 12,000,403 | | | — | | | 120,205 | | | 11,010 | | (5) | 12,225,585 | | | Chief Financial Officer | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Matt Mazza(6) | | 2021 | | 375,000 | | | — | | | 6,450,400 | | | — | | | 433,565 | | | 11,459 | | | 7,270,424 | | | Chief Legal Officer and Corporate Secretary | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Shane Trigg | | 2021 | | 420,000 | | | 250,000 | | (7) | 2,700,110 | | | — | | | 997,500 | | | 175,013 | | (8) | 4,542,623 | | | General Manager, Real Estate | | 2020 | | 290,759 | | | — | | | 3,900,000 | | | — | | | 322,938 | | | 7,586 | | | 4,521,283 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Jonathan Walker | | 2021 | | 350,000 | | | — | | | 7,200,304 | | (9) | — | | | 875,000 | | | 9,204 | | | 8,434,508 | | | Chief Technology Officer and Founder | | 2020 | | 320,063 | | | — | | | — | | | — | | | 130,000 | | | 16,688 | | | 466,751 | | | | 2019 | | 300,000 | | | — | | | 400,000 | | | — | | | 84,000 | | | 9,950 | | | 793,950 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Ida Kane(10) | | 2021 | | 183,654 | | | — | | | — | | | 25,613 | | (11) | 195,000 | | | 1,075,559 | | (12) | 1,479,826 | | | Former Chief Financial Officer | | 2020 | | 340,000 | | | — | | | — | | | — | | | 353,600 | | | 21,547 | | | 715,147 | | | | 2019 | | 340,000 | | | — | | | — | | | — | | | 285,600 | | | 8,642 | | | 634,242 | |
(1)Amounts shown in this column do not necessarily reflect the actual value received or to be received by our named executive officers. Instead, these amounts reflect the total grant date fair market value of time-based restricted stock units and performance-based restricted stock units. As required by SEC rules and regulations, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions. Assumptions used in the calculation of these amounts are included in Note 2 of the notes to our consolidated financial statements included in our 2021 Annual Report. With respect to the performance-based restricted stock unit awards, amounts are based on the probable outcome of the applicable performance conditions, which is target level performance, calculated in accordance with ASC 718. Amounts shown in this column may be higher than prior years because 2022 equity grants were made to our NEOs in December 2021. As such, this column includes both 2021 stock awards and 2022 stock awards. See the section titled "Compensation Discussion and Analysis - Long Term Equity Incentive Plan" for more details. (2)Amounts shown in this column reflect the amounts earned and paid under our STI Plan and Over Achievement Plan based on our achievement relative to pre-established targets described in the section titled "Compensation Discussion and Analysis - Short-Term Cash Incentive Plan." (3)Amounts shown in this column represent our matching contributions under our 401(k) Plan, reimbursement of medical expenses pursuant to established health plans, and insurance premiums paid for the benefit of our named executive officers. (4)Amount shown in the Salary column for Ms. Goon represents the prorated annual salary earned by her for fiscal year 2021, reflecting that she joined the Company in October 2021. (5)Includes reimbursement of certain legal fees in connection with Ms. Goon's transition to AppFolio. (6)Mr. Mazza became an NEO commencing in fiscal year 2021 in connection with his appointment as Chief Legal Officer. (7)Mr. Trigg received a sign-on bonus when joining the Company in fiscal year 2020. The sign-on bonus was subject to a one-year clawback provision and is therefore included as part of his compensation in fiscal year 2021. (8)Includes $160,768 in moving expenses in connection with Mr. Trigg's relocation to Santa Barbara, California. (9)Per applicable accounting rules, the grant date fair market value of the Walker MBO Award was not determined until achievement of applicable performance conditions was certified by the Company. (10)Ms. Kane resigned in June 2021 and amounts in this table are prorated accordingly. (11)Amount shown in the Option Awards column for Ms. Kane represents the aggregate incremental fair value of Ms. Kane's vested options at the time of her separation from the Company, as a result of the extension of the post-termination exercise window of such options, computed as of the modification date in accordance with ASC 718. (12)Also included in Ms. Kane's other compensation is severance pay and other separation benefits as previously disclosed in our Form 8-K/A filing on June 4, 2021. These amounts include medical expense reimbursement, insurance premiums (including COBRA, of which $12,278 was paid in 2021 and the remaining value has been accrued for payments in 2022), brokerage fee reimbursement, 401K match payments, and severance, as described in the section titled "Employment Agreements and Similar Arrangements."
| | | | | | | | | | | | | | | | | | | | | | | | | Name and Title | | Year | | Salary | | Option Awards(1)(2) | | Non-Equity Incentive Plan Compensation(3) | | All Other
Compensation(4) | | Total | | Jason Randall | | 2018 | | $ | 360,000 |
| | $ | — |
| | $ | 363,600 |
| | $ | 549 |
| | $ | 724,149 |
| | President and Chief Executive Officer | | 2017 | | 288,000 |
| | 823,540 |
| | 269,355 |
| | 960 |
| | 1,381,855 |
| | | | 2016 | | 240,000 |
| | 1,449,469 |
| | 148,000 |
| | 786 |
| | 1,838,255 |
| | | | | | | | | | | | | | | | Ida Kane | | 2018 | | 340,000 |
| | — |
| | 343,400 |
| | 8,512 |
| | 691,912 |
| | Chief Financial Officer | | 2017 | | 316,000 |
| | 823,540 |
| | 259,409 |
| | 6,280 |
| | 1,405,229 |
| | | | 2016 | | 300,000 |
| | 1,811,837 |
| | 148,000 |
| | 6,059 |
| | 2,265,896 |
| | | | | | | | | | | | | | | Klaus Schauser(5) | | 2018 | | 150,000 |
| | — |
| | 88,375 |
| | 5,755 |
| | 244,130 |
| | Chief Strategist and Founder | | | | | | | | | | | | | | | | | | | | | | | | | | | Jonathan Walker(6) | | 2018 | | 250,000 |
| | — |
| | 241,000 |
| | 9,820 |
|
| 500,820 |
| | Chief Technology Officer and Founder | | 2017 | | 250,000 |
| | — |
| | 125,000 |
| | 8,446 |
| | 383,446 |
|
| | | | | | | | | (1) | Amounts shown in this column do not necessarily reflect the actual value received or to be received by our named executive officers or the amount of stock-based compensation expense reported within our consolidated financial statements. Instead, these amounts reflect the total grant date fair market value of the stock options computed in accordance with the provisions of ASC 718. Assumptions used in the calculation of these amounts are included in Note 2 of the notes to our consolidated financial statements included in the 2018 Annual Report. As required by SEC rules and regulations, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions.31 | 2022 Proxy Statement |
| | | | | | | | | (2) | No grants of equity-based awards were made to our named executive officers in 2018. Please refer to the section of this Proxy Statement entitled "Compensation Discussion and Analysis" for more information.Executive Compensation |
| | (3) | Amounts shown in this column reflect the amounts earned and paid under our 2018 Short-Term Cash Incentive Plan based on our achievement relative to a pre-established target related to free cash flow for fiscal year 2018. Our cash bonus program is described in the section of this Proxy Statement entitled "Compensation Discussion and Analysis - 2018 Short-Term Cash Incentive Plan." |
| | (4) | The amounts shown in this column represent our matching contributions under our 401(k) Plan, accidental death and dismemberment insurance premium benefits not available to all employees, and life insurance premiums paid for the benefit of our named executive officers. |
| | (5) | Mr. Schauser was not a named executive officer in 2017 or 2016 and, therefore, compensation information for those years has been excluded. |
| | (6) | Mr. Walker was not a named executive officer in 2016 and, therefore, compensation information for that year has been excluded. |
Grants of Plan-Based Awards The following table presents, for each of our named executive officers, information concerning grants of plan-based awards made during fiscal year 2018.2021. This information supplements the information about these awards set forth in the Summary Compensation Table above. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1)(2) | | Estimated Future Payouts Under Equity Incentive Plan Awards(3) | | All Other Stock Awards(4)(#) | | All Other Option Awards(4)(#) | | Exercise Price of Options
($) | | Grant Date Fair Value of Option and Stock Awards(5) ($) | | | | Name | | Grant Date | | Threshold ($) | | Target ($) | | Maximum ($) | Threshold (#) | | Target (#) | | Maximum (#) | | | Jason Randall | | 1/1/2021 | | 180,000 | | | 360,000 | | | 2,160,000 | | | — | | — | | — | | — | | | | | | — | | | | | | | 1/1/2021 | | 150,000 | | | 300,000 | | | 1,050,000 | | | — | | — | | — | | — | | | | | | — | | | | | Fay Sien Goon | | 10/18/2021 | | 225,000 | | | 450,000 | | | 2,700,000 | | | — | | — | | — | | — | | | | | | — | | | | | | | 10/18/2021 | | — | | | — | | | — | | | — | | — | | — | | 45,541 | | | | | | 6,000,000 | | | | | | | 10/18/2021 | | — | | | — | | | 1,560,000 | | (6) | 10,931 | | 18,217 | | 18,217 | | — | | | | | | 2,400,000 | | | | | | | 10/18/2021 | | — | | | — | | | — | | | — | | — | | — | | 4,555 | | | | | | 600,000 | | | | | | | 12/13/2021 | | — | | | — | | | — | | | — | | — | | — | | 9,752 | | | | | | 1,200,000 | | | | | | | 12/13/2021 | | — | | | — | | | — | | | 7,314 | | 14,627 | | 21,941 | | — | | | | | | 1,800,000 | | | | | Matt Mazza | | 1/1/2021 | | 100,000 | | | 200,000 | | | 1,200,000 | | | — | | — | | — | | — | | | | | | — | | | | | | | 1/1/2021 | | 75,000 | | | 150,000 | | | 525,000 | | | — | | — | | — | | — | | | | | | — | | | | | | | 1/19/2021 | | — | | | — | | | 175,500 | | (6) | 1,049 | | 1,747 | | 1,747 | | — | | | | | | 270,000 | | | | | | | 1/19/2021 | | — | | | — | | | — | | | — | | — | | — | | 1,165 | | | | | | 180,000 | | | | | | | 10/27/2021 | | — | | | — | | | — | | | — | | — | | — | | 30,827 | | | | | | 4,000,000 | | | | | | | 12/13/2021 | | — | | | — | | | — | | | — | | — | | — | | 6,501 | | | | | | 800,000 | | | | | | | 12/13/2021 | | — | | | — | | | — | | | 4,876 | | 9,752 | | 14,628 | | — | | | | | | 1,200,000 | | | | | Shane Trigg | | 1/1/2021 | | 210,000 | | | 420,000 | | | 2,520,000 | | | — | | — | | — | | — | | | | | | — | | | | | | | 1/1/2021 | | 100,000 | | | 200,000 | | | 700,000 | | | — | | — | | — | | — | | | | | | — | | | | | | | 1/19/2021 | | — | | | — | | | 260,000 | | (6) | 1,553 | | 2,588 | | 2,588 | | — | | | | | | 400,000 | | | | | | | 12/13/2021 | | — | | | — | | | — | | | — | | — | | — | | 7,476 | | | | | | 920,000 | | | | | | | 12/13/2021 | | — | | | — | | | — | | | 5,607 | | 11,214 | | 16,821 | | — | | | | | | 1,380,000 | | | | | Jonathan Walker | | 1/1/2021 | | 175,000 | | | 350,000 | | | 2,100,000 | | | — | | — | | — | | — | | | | | | — | | | | | | | 1/1/2021 | | 100,000 | | | 200,000 | | | 700,000 | | | — | | — | | — | | — | | | | | | — | | | | | | | 1/23/2021 | | — | | | — | | | — | | | 7,688 | | 7,688 | | 7,688 | | — | | | | | | 1,200,000 | | | | | | | 12/13/2021 | | — | | | — | | | — | | | — | | — | | — | | 19,503 | | | | | | 2,400,000 | | | | | | | 12/13/2021 | | — | | | — | | | — | | | 14,627 | | 29,254 | | 43,881 | | — | | | | | | 3,600,000 | | | | | Ida Kane | | 1/1/2021 | | 195,000 | | | 390,000 | | | 2,340,000 | | | — | | — | | — | | — | | | | | | — | | | | | | | 1/1/2021 | | 100,000 | | | 200,000 | | | 700,000 | | | — | | — | | — | | — | | | | | | — | | | | | | | 5/18/2017 | | — | | | — | | | — | | | — | | — | | — | | — | | 20,000 | | 27.95 | | 7,718 | | (7) | | | | | 2/24/2017 | | — | | | — | | | — | | | — | | — | | — | | — | | 37,905 | | 23.8 | | 8,030 | | (7) | | | | | 5/20/2016 | | — | | | — | | | — | | | — | | — | | — | | — | | 125,000 | | 13.43 | | 3,882 | | (7) | | | | | 5/20/2016 | | — | | | — | | | — | | | — | | — | | — | | — | | 100,001 | | 13.43 | | 3,106 | | (7) | | | | | 2/29/2016 | | — | | | — | | | — | | | — | | — | | — | | — | | 123,333 | | 11.7 | | 2,747 | | (7) | | | | | 2/1/2015 | | — | | | — | | | — | | | — | | — | | — | | — | | 4,144 | | 5.64 | | 33 | | (7) | | | | | 2/1/2015 | | — | | | — | | | — | | | — | | — | | — | | — | | 12,500 | | 5.64 | | 98 | | (7) | |
| | | | | | | | | | | | | | | | | | Estimated Possible Payouts Under Non-Equity Incentive Plan Awards(1)(2) | | Name | | Grant Date | | Threshold ($) | | Target ($) | | Maximum ($) | | Jason Randall | | 1/19/2018 | | 324,000 |
| | 360,000 |
| | 540,000 |
| | Ida Kane | | 1/19/2018 | | 306,000 |
| | 340,000 |
| | 510,000 |
| | Klaus Schauser | | 1/19/2018 | | 78,750 |
| | 87,500 |
| | 131,250 |
| Jonathan Walker(3) | | 1/19/2018 | | 90,000 |
| | 100,000 |
| | 150,000 |
| | | 1/19/2018 | | 50,000 |
| | 50,000 |
| | None |
|
| | | | | | | | | (1) | Amounts in the "Estimated Possible Payouts Under Non-Equity Incentive Plan Awards" columns relate to a cash incentive compensation opportunity under our 2018 Short-Term Cash Incentive Plan. For performance below 90% of the pre-established target related to free cash flow for fiscal year 2018, or the Performance Target, no cash bonus could be earned. For performance equal to 100% of the Performance Target, 100% of the target cash bonus was achievable. For performance equal to or greater than 150% of the Performance Target, 150% of the target cash bonus was achievable. For performance between 90% and 150% of the Performance Target, the cash bonus was to be determined by reference to a sliding payout scale that was established by our compensation committee. The actual amounts paid to our named executive officers are set forth in the Summary Compensation Table above, and the calculation of the actual amounts paid is discussed more fully in the section of this32 | 2022 Proxy Statement entitled "Compensation Discussion and Analysis - 2018 Short-Term Cash Incentive Plan." |
| | | | | | | | | (2) | In February 2018, our Board, upon recommendation of our compensation committee, adopted a Long-Term Executive Cash Incentive Plan which was designed to reward Mr. Randall and Ms. Kane for their individual contributions to our achievement of an increase in "economic value" on a per share basis, or EVPS, over time, which reflects an internal rate of return measured at December 31, 2023, 2024 and 2025. Because the actual amount of the cash bonuses to be paid under the Long-Term Executive Cash Incentive Plan, if any, is dependent on our performance relative to an internal rate of return that results in increases in EVPS over a period of multiple years into the future, any cash bonus amounts that may become payable upon achievement of the pre-established performance objectives are highly speculative and we are currently unable to predict a reasonable range for potential future payments under the plan with any degree of certainty. Please refer to the section of this Proxy Statement entitled "Compensation Discussion and Analysis - Long-Term Executive Cash Incentive Plan" for more information.Compensation |
(1)Amounts in the "Estimated Future Payouts Under Non-Equity Incentive Plan Awards" column relate to a cash incentive compensation opportunity under our STI Plan and Over Achievement Plan and the cash over achievement component of the 2021 PRSU Awards. The actual amounts paid to our named executive officers are set forth in the Summary Compensation Table above, and the calculation of the actual amounts paid is discussed more fully in the section titled "Compensation Discussion and Analysis - Short-Term Cash Incentive Plan." (2)Table does not include the 2018 Long-Term Awards granted to Mr. Randall and Ms. Kane, as amounts that may be earned under such awards are based on assumptions and estimates are subject to uncertainties and may fluctuate significantly. Please refer to the section titled "Compensation Discussion and Analysis - Long-Term Executive Cash Incentive Plans" for more information. (3)Represents PRSU Awards granted to Messrs. Mazza, Trigg and Walker, as well as Ms. Goon. Please refer to the section titled "Compensation Discussion and Analysis - Long-Term Equity Incentive Plan" for more information. (4)Represents time based restricted stock unit awards granted to Messrs. Mazza, Trigg and Walker, as well as Ms. Goon. Please refer to the section titled "Compensation Discussion and Analysis - Long-Term Equity Incentive Plan" for more information. (5)Amounts shown in this column do not necessarily reflect the actual value received or to be received by our named executive officers. Instead, these amounts reflect the total grant date fair market value of the time-based restricted stock unit awards or PRSU Awards, as applicable. As required by SEC rules and regulations, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions. Assumptions used in the calculation of these amounts are included in Note 2 of the notes to our consolidated financial statements included in our 2021 Annual Report. With respect to the PRSU Awards, amounts are based on the probable outcome of the applicable performance conditions, which is target level performance, calculated in accordance with ASC 718. (6)The PRSU awards granted to Messrs. Mazza and Trigg and Ms. Goon also include a cash over-achievement component upon achievement of greater than 100% of the applicable performance metrics. Please refer to the section titled "Compensation Discussion and Analysis - Long Term Equity Incentive Plan" for more information. (7)Amounts shown in the Grant Date Value of Stock and Option Awards column for Ms. Kane represent the aggregate incremental fair value of Ms. Kane's vested options at the time of her separation from the Company, as a result of the extension of the post-termination exercise window of such options, computed as of the modification date in accordance with ASC 718. | | | | | | | | | (3) | Reflects potential payouts under our 2018 Short-Term Cash Incentive Plan, which, for Mr. Walker, includes achievement relative to the Performance Target and individual MBOs. The Performance Target component of the bonus opportunity had a maximum payout of $150,000, while the MBO portion of the bonus opportunity had no maximum payout amount.33 | 2022 Proxy Statement |
Outstanding Equity Awards at Fiscal Year End The following table sets forth information about the outstanding equity awards held by each of our named executive officers as of December 31, 2018.2021: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Option Awards | | Stock Awards | | Name | | Grant Date | | Number of Securities Underlying Unexercised Options (#)
Exercisable | | Number of Securities Underlying Unexercised Options (#)
Unexercisable | | Number of Securities Underlying Unexercised Unearned Options
(#) | | Option Exercise Price
($) | | Option Expiration Date | | Number of Shares That Have Not Vested
(#) | | Market Value of Shares That Have Not Vested ($)(1) | | Equity Incentive Plan Awards: Number of Shares That Have Not Vested
(#) | | Equity Incentive Plan Awards: Market Value of Shares That Have Not Vested ($)(1) | | Jason Randall | | 5/18/2017 | | 20,000 | | — | |
| — | | | 27.95 | | | 5/17/2027 | | — | | | — | | | — | | | — | | | 2/24/2017 | | 38,280 | | — | |
| — | | | 23.80 | | | 2/23/2027 | | — | | | — | | | — | | | — | | | | 5/20/2016 | | 100,000 | | — | |
| — | | | 13.43 | | | 5/19/2026 | | — | | | — | | | — | | | — | | | | 5/20/2016 | | 80,001 |
| — | |
| — | |
| 13.43 | | | 5/19/2026 | | — | | | — | | | — | | | — | | | | 2/29/2016 | | 98,666 |
| — | | | — | | | 11.70 | | | 2/28/2026 | | — | | | — | | | — | | | — | | | | 12/3/2014 | | 29,297 |
| — | |
| — | | | 4.92 | | | 12/2/2024 | | — | | | — | | | — | | | — | | | | 12/3/2014 | | 25,000 |
| — | | | — | | | 4.92 | | | 12/2/2024 | | — | | | — | | | — | | | — | | | Fay Sien Goon | | 12/13/2021 | | — | | — | | | — | | | — | | | — | | | — | | | — | | | 14,627 | | (2) | 1,770,745 | | | 12/13/2021 | | — | | — | | | — | | | — | | | — | | | 9,752 | | (3) | 1,180,577 | | | — | | | — | | | | 10/18/2021 | | — | | — | | | — | | | — | | | — | | | 45,541 | | (4) | 5,513,193 | | | — | | | — | | | | 10/18/2021 | | — | | — | | | — | | | — | | | — | | | 4,555 | | (5) | 551,428 | | | — | | | — | | | | 10/18/2021 | | — | | — | | | — | | | — | | | — | | | — | | | — | | | 18,217 | | (6) | 2,205,350 | | | Matt Mazza | | 12/13/2021 | | — | | — | | | — | | | — | | | — | | | — | | | — | | | 9,752 | | (2) | 1,180,577 | | | 12/13/2021 | | — | | — | | | — | | | — | | | — | | | 6,501 | | (3) | 787,011 | | | — | | | — | | | | 10/27/2021 | | — | | — | | | — | | | — | | | — | | | 30,827 | | (7) | 3,731,917 | | | — | | | — | | | | 1/19/2021 | | — | | — | | | — | | | — | | | — | | | — | | | — | | | 1,747 | | (6) | 211,492 | | | | 1/19/2021 | | — | | — | | | — | | | — | | | — | | | 1,165 | | (8) | 141,035 | | | — | | | — | | | | 12/17/2019 | | — | | — | | | — | | | — | | | — | | | — | | | — | | | 1,398 | | (9) | 169,242 | | | | 11/15/2019 | | — | | — | | | — | | | — | | | — | | | 3,675 | | (10) | 444,896 | | | — | | | — | | | Shane Trigg | | 12/13/2021 | | — | | — | | | — | | | — | | | — | | | — | | | — | | | 11,214 | | (2) | 1,357,567 | | | 12/13/2021 | | — | | — | | | — | | | — | | | — | | | 7,476 | | (3) | 905,045 | | | — | | | — | | | | 1/19/2021 | | — | | — | | | — | | | — | | | — | | | — | | | — | | | 2,588 | | (6) | 313,303 | | | | 4/13/2020 | | — | | — | | | — | | | — | | | — | | | 25,178 | | (11) | 3,048,049 | | | — | | | — | | | | 4/13/2020 | | — | | — | | | — | | | — | | | — | | | — | | | — | | | 4,197 | | (9) | 508,089 | | | Jonathan Walker | | 12/13/2021 | | — | | — | |
| — | | | — | | | — | | | — | | | — | | | 29,254 | | (2) | 3,541,489 | | | 12/13/2021 | | — | | — | | | — | | | — | | | — | | | 19,503 | | (3) | 2,361,033 | | | — | | | — | | | | 12/17/2019 | | — |
| — | | | — | | | — | | | — | | | 2,796 | | (12) | 338,484 | | | — | | | — | | | | 5/20/2016 | | 10,001 |
| — | |
| — | | | 13.43 | | | 5/19/2026 | | — | | | — | | | — | | | — | | | | 5/20/2016 | | 288 |
| — | |
| — | | | 13.43 | | | 5/19/2026 | | — | | | — | | | — | | | — | | | | 2/29/2016 | | 12,333 | | — | | | — | | | 11.70 | | | 2/28/2026 | | — | | | — | | | — | | | — | | | | 12/3/2014 | | 14,425 | | — | | | — | | | 4.92 | | | 12/2/2024 | | — | | | — | | | — | | | — | | | | 12/3/2014 | | 12,500 | | — | | | — | | | 4.92 | | | 12/2/2024 | | — | | | — | | | — | | | — | | | Ida Kane | | 5/18/2017 | | 20,000 | | — | |
| — | | | 27.95 | | | 1/6/2023 | (13) | — | | | — | | | — | | | — | | | 2/24/2017 | | 37,905 | | — | |
| — | | | 23.80 | | | 1/6/2023 | (13) | — | | | — | | | — | | | — | | | | 5/20/2016 | | 125,000 | | — | |
| — | | | 13.43 | | | 1/6/2023 | (13) | — | | | — | | | — | | | — | | | | 5/20/2016 | | 100,001 |
| — | |
| — | |
| 13.43 | | | 1/6/2023 | (13) | — | | | — | | | — | | | — | |
(1)The amount in this column was calculated based on the closing price of our Class A Common Stock as of December 31, 2021, which was $121.06. (2)This amount represents a PRSU Award of our Class A Common Stock granted pursuant to the 2015 Plan. This award vests over three-years based on the achievement of pre-established financial metrics with a December 31, 2022 measurement date and is reflected in the table at the 100% performance level, subject to the executive's continued employment through the applicable vesting date. (3)This amount represents a time-based restricted stock unit award of our Class A Common Stock granted pursuant to the 2015 Plan. This award vests over four years in equal quarterly installments, commencing on May 10, 2022, subject to the executive's continued employment through the applicable vesting date. (4)This amount represents a time-based restricted stock unit award of our Class A Common Stock granted pursuant to the 2015 Plan. This award vests over five years in equal annual installments, commencing on November 10, 2022, subject to the executive's continued employment through the applicable vesting date. (5)This amount represents a time-based restricted stock unit award of our Class A Common Stock granted pursuant to the 2015 Plan. This award vests over four years in equal annual installments, commencing on November 10, 2022, subject to the executive's continued employment through the applicable vesting date. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Option Awards | | Stock Awards | | Name | | Grant Date | | Number of Securities Underlying Unexercised Options (#)
Exercisable | | Number of Securities Underlying Unexercised Options (#)
Unexercisable | | Number of Securities Underlying Unexercised Unearned Options (#) | | Option Exercise Price | | Option Expiration Date | | Number of Shares That Have Not Vested (#) | | Market Value of Shares
That Have Not Vested(1) | | Jason Randall | | 5/18/2017 | | | |
|
|
| 20,000 |
| (2) | $ | 27.95 |
| | 5/17/2027 | | | | | | | | 2/24/2017 | | | |
|
|
| 66,000 |
| (3) | $ | 23.80 |
| | 2/23/2027 | | | | | | | | 5/20/2016 | | 100,000 |
| |
|
|
| | | $ | 13.43 |
| | 5/19/2026 | | | | | | | | 5/20/2016 | | | |
|
|
| 100,001 |
| (4) | $ | 13.43 |
| | 5/19/2026 | | | | | | | | 2/29/2016 | | 98,666 |
|
| | | | | $ | 11.70 |
| | 2/28/2026 | | | | | | | | 12/3/2014 | | 37,500 |
|
|
|
| | | $ | 4.92 |
| | 12/2/2024 | | | | | | | | 12/3/2014 | | 12,500 |
|
| 12,500 |
| (5) | | | $ | 4.92 |
| | 12/2/2024 | | | | | | Ida Kane | | 5/18/2017 | | | |
|
|
| 20,000 |
| (2) | $ | 27.95 |
| | 5/17/2027 | | | | | | | | 2/24/2017 | | | |
|
|
| 66,000 |
| (3) | $ | 23.80 |
| | 2/23/2027 | | | | | | | | 5/20/2016 | | 125,000 |
| |
|
|
| | | $ | 13.43 |
| | 5/19/2026 | | | | | | | | 5/20/2016 | | | |
|
|
| 125,001 |
| (6) | $ | 13.43 |
| | 5/19/2026 | | | | | | | | 2/29/2016 | | 123,333 |
|
| | | | | $ | 11.70 |
| | 2/28/2026 | | | | | | | | 2/01/2015 | | 60,981 |
| (7) | | | | | $ | 5.64 |
| | 1/31/2025 | | | | | | | | 2/01/2015 | | 39,584 |
| (8) | | | | | $ | 5.64 |
| | 1/31/2025 | | | | | | | | 2/01/2015 | | — |
| |
|
| | | | $ | — |
| | | | 1,042 |
| (9) | $ | 61,707 |
| Klaus Schauser(10) | | — |
| | — |
| | — |
| | — |
| | — |
| | — | | — |
| | — |
| | Jonathan Walker | | 5/20/2016 | | 25,000 |
| |
|
|
| | | $ | 13.43 |
| | 5/19/2026 | | | | | | | | 5/20/2016 | | | |
|
|
| 25,001 |
| (11) | $ | 13.43 |
| | 5/19/2026 | | | | | | | | 2/29/2016 | | 24,666 |
|
| | | | | $ | 11.70 |
| | 2/28/2026 | | | | | | | | 12/3/2014 | | 50,000 |
|
|
|
|
| | | $ | 4.92 |
| | 12/2/2024 | | | | | | | | 12/3/2014 | | 12,500 |
|
| 12,500 |
| (5) | | | $ | 4.92 |
| | 12/2/2024 | | | | |
| | | | | | | | | (1) | The amounts in this column were calculated based on the closing price of our Class A Common Stock as of December 31, 2018, which was $59.22.34 | 2022 Proxy Statement |
| | | | | | | | | (2) | This amount represents performance stock options, or Performance Options, to purchase shares of our Class A Common Stock that are subject to vesting based on the achievement of an adjusted gross margin target for fiscal year 2019, reflected in the table at the maximum performance level.Executive Compensation |
(6)This amount represents a PRSU Award of our Class A Common Stock granted pursuant to the 2015 Plan. This award vests based on the achievement of pre-established financial metrics with a December 31, 2023 measurement date and is reflected in the table at the 100% performance level, subject to the executive's continued employment through the applicable vesting date. (7)This amount represents a time-based restricted stock unit award of our Class A Common Stock granted pursuant to the 2015 Plan. This award vests over four years in equal annual installments, commencing on November 10, 2022, subject to the executive's continued employment through the applicable vesting date. (8)This amount represents a time-based restricted stock unit award of our Class A Common Stock granted pursuant to the 2015 Plan. This award vests over four years in equal annual installments, commencing on February 10, 2021, subject to the executive's continued employment through the applicable vesting date. (9)This amount represents a PRSU Award of our Class A Common Stock granted pursuant to the 2015 Plan. This award vests based on the achievement of pre-established financial metrics with a December 31, 2022 measurement date and is reflected in the table at the 100% performance level, subject to the executive's continued employment through the applicable vesting date. (10)This amount represents a time-based restricted stock unit award of our Class A Common Stock granted pursuant to the 2015 Plan. This award vests over four years in equal annual installments, commencing on December 10, 2020, subject to the executive's continued employment through the applicable vesting date. (11)This amount represents a time-based restricted stock unit award of our Class A Common Stock granted pursuant to the 2015 Plan. This award vests over five years in equal annual installments, commencing on May 10, 2020, subject to the executive's continued employment through the applicable vesting date. (12)This amount represents a time-based restricted stock unit award of our Class A Common Stock granted pursuant to the 2015 Plan. This award vests over four years in equal annual installments, commencing on January 10, 2020, subject to the executive's continued employment through the applicable vesting date. (13)Expiration dates for Ms. Kane represent the extension of the post-termination exercise window of such vested options held by Ms. Kane at the time of her separation from the Company. | | | | | | | | | (3) | This amount represents Performance Options to purchase shares of our Class A Common Stock that are subject to vesting based on the achievement of a free cash flow performance target for fiscal year 2019, reflected in the table at the maximum performance level.35 | 2022 Proxy Statement |
| | | | | | | | | (4) | This amount represents Performance Options to purchase shares of our Class A Common Stock that were subject to vesting based on the achievement of a free cash flow performance target for fiscal year 2018, reflected in the table at the maximum performance level. In February 2019, our Board confirmed that the vesting conditions had been achieved and a total of 80,001 shares have now vested, which reflects achievement between target and maximum performance levels.Executive Compensation |
| | (5) | This amount represents options to purchase shares of our Class B Common Stock that vest monthly through December 3, 2020. |
| | (6) | This amount represents Performance Options to purchase shares of our Class A Common Stock that were subject to vesting based on the achievement of a free cash flow performance target for fiscal year 2018, reflected in the table at the maximum performance level. In February 2019, our Board confirmed that the vesting conditions had been achieved and a total of 100,001 shares have now vested, which reflects achievement between target and maximum performance levels. |
| | (7) | This amount represents options to purchase shares of our Class B Common Stock that vested as to 25% of the shares on February 1, 2016, the first anniversary of the grant date, and the remaining shares vest in 36 equal monthly installments thereafter. These options have the ability to be early exercised and therefore are included in the exercisable column. |
| | (8) | This amount represents options to purchase shares of our Class B Common Stock that vest in 48 equal monthly installments commencing on February 1, 2017. These options have the ability to be early exercised and therefore are included in the exercisable column. |
| | (9) | This amount represents shares of our Class B Common Stock that are subject to a restricted stock award that vested as to 25% of the shares on February 1, 2016, the first anniversary of the grant date, and the remaining shares vest in 36 equal monthly installments thereafter. |
| | (10) | Mr. Schauser did not hold any outstanding equity awards as of December 31, 2018. |
| | (11) | This amount represents Performance Options to purchase shares of our Class A Common Stock that were subject to vesting based on the achievement of a free cash flow performance target for fiscal year 2018, reflected in the table at the maximum performance level. In February 2019, our Board confirmed that the vesting conditions had been achieved and a total of 20,001 shares have now vested, which reflects achievement between target and maximum performance levels. |
Option Exercises and Stock Vested NoThe following table provides information regarding options were exercised by any ofand stock awards vested for our named executive officersNEOs during fiscal year 2018. The following table sets forth2021, including the number of shares acquired upon exercise or vesting and the value realized as determined based on applicable SEC rules.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Option Awards | | Equity Awards | | | Name | | Number of Shares Acquired on Exercise (#) | | Value Realized on Exercise ($)(1) | | Number of Shares Acquired on Vesting (#) | | Value Realized on Vesting ($)(2) | | | Jason Randall | | 8,203 | | 961,228 | | | — | | — | | | | Fay Sien Goon | | — | | — | | | — | | — | | | | Matt Mazza | | — | | — | | | 4,619 | | 680,431 | | | | Shane Trigg | | — | | — | | | 8,394 | | 1,146,009 | | | | Jonathan Walker | | 10,001 | | 1,171,286 | | | 8,620(3) | | 1,030,041 | | | | Ida Kane | | 224,273 | | 27,193,230 | | | — | | — | | |
(1)The value realized upon exercise of an option is the difference between the fair market value of the shares of the common stock received upon the exercise, valued on the exercise date, and the exercise price paid. (2)The value realized upon vesting of restricted stock units or RSUs, during fiscal year 2018 by eachis the fair market value of our named executive officers.the underlying shares of the common stock, valued on the vesting date. (3)This amount includes 7,688 shares earned under the Walker Award. Please refer to the section titled "Performance-Based Restricted Stock Unit Awards" for more information. | | | | | | | | | | | Stock Awards | | Name | | Number of Shares Acquired on Vesting (#) | | Value Realized on Vesting(1) ($) | | Jason Randall | | — |
| | — |
| | Ida Kane | | 6,250 |
| | $361,207 | | Klaus Schauser | | — |
| | — |
| | Jonathan Walker | | — |
| | — |
|
| | (1) | The value realized on vesting is calculated by multiplying the number of shares by the fair market value of the underlying shares on the applicable vesting date. |
Potential Payments upon Termination or Change in Control
We currently do not have employment agreements, severance agreements, change-in-control agreements or other similar types of arrangements that are uniqueOur obligations to make certain payments to our named executive officers except those that provide for acceleration of certain cash awards, as described abovein connection with a change in control or termination are discussed in the section of this Proxy Statement entitledsections titled "Compensation Discussion and Analysis - Change in Control.Control Provisions" and "Compensation Discussion and Analysis - Employment Agreements and Similar Arrangements." As set forth in that section, ifIf we had undergone a change in control as of December 31, 2018,2021, Mr. Randall and Ms. Kane would have each been entitled to an option to receive a one-time cash payment of $1,000,000,$4,000,000, payable by our Company. If we had terminated Ms. Goon without “cause” or Ms. Goon has resigned for “good reason” on December 31, 2021, she would be entitled to a severance payment equal to $557,960. In addition, Ms. Goon's outstanding equity awards would accelerate as described in the section titled "Compensation Discussion and Analysis - Employment Agreements and Similar Arrangements." None of our other named executive officers are entitled to receive any payments upon a change in control, except those related to the acceleration of their outstanding equity awards, which acceleration would occur on the same terms as applicable to all employees holding equity awards under our 2007 Plan (as defined below in the section titled "Equity Compensation Plan Information") and 2015 Plan.
CEO Pay Ratio
The following table presents (i) our median employee's fiscal year 2021 total compensation, (ii) the fiscal year 2021 total compensation of Mr. Randall, our CEO, and (iii) the ratio between the two. This ratio is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K under the Securities Exchange Act of 1934.
| | | | | | | | | | CEO annual total compensation | | $1,461,382 | | Median employee annual total compensation | | $112,319 | | Ratio of CEO to median employee compensation | | 13:1 |
EQUITY COMPENSATION PLAN INFORMATIONWe used the same median employee for fiscal year 2021 as for fiscal years 2019 and 2020 in our pay ratio calculation because there were no changes in our employee population or employee compensation arrangements in fiscal year 2021 that we reasonably believe would result in a significant change to our pay ratio disclosure.
In 2019, our median employee was determined based on total compensation (annualized base salary, equity-based compensation reflecting grant date fair value, and cash incentive compensation paid, where applicable), derived from our payroll and stock administration systems for our entire employee population, excluding our CEO, for the twelve months ending December 31, 2019. The SEC’s rules for identifying the median employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their employee populations and compensation practices. As a result, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies have different employee populations and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.
| | | | | | | | | | | | | | | Equity Compensation Plan Information |
Our Board and stockholders previously adopted the 2015 Plan, our Employee Stock Purchase Plan or the ESPP,(the "ESPP"), and the 2007 Stock Incentive Plan, or the 2007 Plan. Our Board and stockholders adopted the ESPP in June 2015. However, as of December 31, 2018,2021, the ESPP had not been implemented, and it is not expected to be implemented during 2019.2022. Our Board and stockholders adopted the 2007 Plan in February 2007, and the 2007 Plan expired by its terms in February 2017.
We expect to continue to issue equity awards pursuant to our 2015 Plan, a summary of which is set forth below. 2015 Stock Incentive Plan Plan Approval. Our Board and stockholders adopted the 2015 Plan in June 2015. Authorized Shares. We originally reserved an aggregate of 2,000,000 shares of our Class A Common Stock for issuance under the 2015 Plan. The number of shares reserved for issuance will increase automatically on January 1 of each calendar year beginning in 2016 and continuing through 2025 by the lesser of (i) the number of shares of our Class A Common Stock subject to awards granted under the 2015 Plan during the preceding calendar year, or (ii) the number of shares of our Class A Common Stock determined by our Board. The number of shares of our Class A Common Stock is also subject to adjustment in the event of a recapitalization, stock split, reclassification, stock dividend or other change in our capitalization. As of January 1, 2019,2022, 2,000,000 shares of our Class A Common Stock were reserved for issuance under the 2015 Plan. In addition, the following shares of our Class A Common Stock will be available for grant and issuance under the 2015 Plan: | | ▪ | shares subject to stock options or stock appreciation rights, or SARs, granted under the 2015 Plan that cease to be subject to the stock option or SAR for any reason other than exercise of the stock option or SAR; |
| | ▪ | shares subject to awards granted under the 2015 Plan that are subsequently forfeited or repurchased by us at the original issue price; |
| | ▪ | shares subject to awards granted under the 2015 Plan that otherwise terminate without shares being issued; |
| | ▪ | shares surrendered, canceled, or exchanged for cash or a different award (or combination thereof); and |
| | ▪ | shares subject to awards under the 2015 Plan that are used to pay the exercise price of an award or withheld to satisfy the tax withholding obligations related to any award. |
▪shares subject to stock options or stock appreciation rights ("SARs") granted under the 2015 Plan that cease to be subject to the stock option or SAR for any reason other than exercise of the stock option or SAR; ▪shares subject to awards granted under the 2015 Plan that are subsequently forfeited or repurchased by us at the original issue price; ▪shares subject to awards granted under the 2015 Plan that otherwise terminate without shares being issued; ▪shares surrendered, canceled, or exchanged for cash or a different award (or combination thereof); and ▪shares subject to awards under the 2015 Plan that are used to pay the exercise price of an award or withheld to satisfy the tax withholding obligations related to any award. Plan Administration.The 2015 Plan will be administered by our compensation committee,Compensation Committee, all of the members of which are independent directors under the applicable NASDAQ listing standards, or by our Board acting in place of our compensation committee.Compensation Committee. Our compensation committeeCompensation Committee will have the authority to construe and interpret the 2015 Plan, grant awards and make all other determinations necessary or advisable for the administration of the 2015 Plan. Awards and Eligible Participants. The 2015 Plan authorizes the award of stock options, SARs, restricted stock awards or RSUs,restricted stock units, performance awards and stock bonuses. The 2015 Plan provides for the grant of awards to our employees, directors, consultants and independent contractors, subject to certain exceptions. No person will be eligible to receive more than 500,000 shares of our Class A Common Stock under the 2015 Plan in any calendar year other than a new employee, who will be eligible to receive no more than 750,000 shares of our Class A Common Stock under the 2015 Plan in the calendar year in which the employee commences employment. No participant will be eligible to receive more than $2,000,000 in performance awards in any calendar year under the 2015 Plan. No more than 5,000,000 shares of our Class A Common Stock will be issued under the 2015 Plan pursuant to the exercise of incentive stock options. Stock Options. The 2015 Plan permits us to grant incentive stock options and non-qualified stock options. The exercise price of stock options will be determined by our compensation committee,Compensation Committee, and may not be less than 100% of the fair market value of our Class A Common Stock on the date of grant, subject to certain exceptions. Our compensation committeeCompensation Committee has the authority to reprice any outstanding stock option (by reducing the exercise price, or canceling the stock option in exchange for cash or another equity award) under the 2015 Plan without the approval of our stockholders. Stock options may vest based on the passage of time or the achievement of performance conditions in the discretion of our compensation committee.Compensation Committee. Our compensation committeeCompensation Committee may provide for stock options to be exercised only as they vest or to be immediately exercisable with any shares issued on exercise being subject to our right of repurchase that lapses as the shares vest. The maximum term of stock options granted under the 2015 Plan is 10 years.
Stock Appreciation Rights.SARs provide for a payment to the holder, in cash or shares of our Class A Common Stock, based upon the difference between the fair market value of our Class A Common Stock on the date of exercise and the stated exercise price on the date of grant, up to a maximum amount of cash or number of shares. SARs may vest based on the passage of time or the achievement of performance conditions in the discretion of our compensation committee.Compensation Committee. Our compensation committeeCompensation Committee has the authority to reprice any outstanding SAR (by reducing the exercise price, or canceling the SAR in exchange for cash or another equity award) under the 2015 Plan without the approval of our stockholders.
| | | | | | | | | | Equity Compensation Plan Information |
Restricted Stock Awards.A restricted stock award represents the issuance to the holder of shares of our Class A Common Stock, subject to the forfeiture of those shares due to failure to achieve certain performance conditions or termination of employment. The purchase price, if any, for the shares will be determined by our compensation committee.Compensation Committee. Unless otherwise determined by the administrator at the time of award, vesting will cease on the date the holder no longer provides services to us and unvested shares will be forfeited to or repurchased by us. Restricted Stock Units.RSUs Restricted stock units represent the right on the part of the holder to receive shares of our Class A Common Stock at a specified date in the future, subject to forfeiture of that right due to failure to achieve certain performance conditions or termination of employment. If a RSUrestricted stock unit has not been forfeited, then, on the specified date, we will deliver to the holder of the RSUrestricted stock unit shares of our Class A Common Stock, cash or a combination of cash and shares of our Class A Common Stock. Performance Awards.Performance awards cover a number of shares of our Class A Common Stock that may be settled upon achievement of performance conditions as provided in the 2015 Plan in cash or by issuance of the underlying common stock. These awards are subject to forfeiture prior to settlement due to failure to achieve certain performance conditions or termination of employment. Stock Bonuses.Stock bonuses may be granted as additional compensation for past or future service or performance and, therefore, no payment will be required for any shares awarded under a stock bonus. Unless otherwise determined by our compensation committeeCompensation Committee at the time of award, vesting will cease on the date the holder no longer provides services to us and unvested shares will be forfeited to us. Change in Control. If we are party to a merger or consolidation, sale of all or substantially all our assets or similar change-in-control transaction, outstanding awards, including any vesting provisions, may be assumed or substituted by the successor company. In the alternative, outstanding awards may be cancelled in connection with a cash payment. Outstanding awards that are not assumed, substituted or cashed out will accelerate in full and expire upon the closing of the transaction. Awards held by non-employee directors will immediately vest as to all or any portion of the shares subject to the award and will become exercisable at such times and on such conditions as our compensation committeeCompensation Committee determines. Amendment; Termination.The 2015 Plan will terminate 10 years from the date our Board approved it, unless it is terminated earlier by our Board. Our Board may amend, suspend or terminate the 2015 Plan at any time, subject to compliance with applicable law.law and certain limitations. Summary of Equity Compensation Plans The following table sets forth information regarding our stock incentive plans as of December 31, 2018:2021: | | | | | | | | | | | | | | | | | | | | | | | | | Plan Category | | Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and RSUs | | Weighted-Average Exercise Price of Outstanding Options(1) ($) | | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans | | Equity compensation plans approved by stockholders(2) | | 1,683,902 | (3) | 13.15 | | | 2,075,767 | (4) | | Equity compensation plans not approved by stockholders | | — | | — | | | — | | | Total | | 1,683,902 | | 13.15 | | | 2,075,767 | |
(1)The weighted-average exercise price is calculated based solely on the exercise prices of the outstanding options to purchase shares of our common stock. It does not reflect the shares of our common stock that will be issued upon the vesting of outstanding restricted stock units, which have no exercise price. (2)These plans consist of the 2007 Plan, the 2015 Plan and the ESPP. (3)Includes 110,736 shares of Class B Common Stock subject to outstanding awards granted under the 2007 Plan, all of which were outstanding options, and 1,573,166 shares of Class A Common Stock subject to outstanding awards granted under the 2015 Plan, of which 735,594 were outstanding options and 837,572 were outstanding restricted stock units. (4)Includes 1,575,767 shares of Class A Common Stock available for issuance under the 2015 Plan and 500,000 shares of Class A Common Stock available for issuance under the ESPP. The number of shares available for issuance under the 2015 Plan increases automatically on January 1st of each year during the term of the 2015 Plan by an amount equal to the number of shares granted under the 2015 Plan during the preceding year or such lesser number that is approved by our Board. Accordingly, effective as of January 1, 2021, the aggregate number of shares available for issuance under the 2015 Plan was 2,046,411 shares. In addition, the number of shares available for issuance under the ESPP increases automatically on January 1st of each year during the term of the ESPP by an amount equal to the number of shares issued or transferred pursuant to rights granted under the ESPP during the preceding year or such lesser number that is approved by our Board. No shares have been issued or transferred pursuant to rights granted under the ESPP and as a result, the number of shares available for issuance under the ESPP did not increase as of January 1, 2021.
| | | | | | | | | | | | | | Plan Category | | Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and RSUs | | Weighted-average Exercise Price of Outstanding Options(1) | | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans | | Equity compensation plans approved by stockholders(2) | | 2,187,632 |
| (3) | $ | 11.31 |
| | 2,314,123 |
| (4) | | Equity compensation plans not approved by stockholders | | — |
| | — |
| | — |
| | | Total | | 2,187,632 |
| | $ | 11.31 |
| | 2,314,123 |
| |
| | | | | | | | | (1) | The weighted-average exercise price is calculated based solely on the exercise prices of the outstanding options to purchase shares of our common stock. It does not reflect the shares of our common stock that will be issued upon the vesting of outstanding RSUs, which have no exercise price.38 | 2022 Proxy Statement |
| | | | | | | | | | | | (2) | These plans consist of the 2007 Plan, the 2015 Plan and the ESPP. |
| | (3) | Includes 532,978 sharesSecurity Ownership of Class B Common Stock subject to outstanding awards granted under the 2007 Plan, all of which were outstanding options,Certain Beneficial Owners and 1,654,654 shares of Class A Common Stock subject to outstanding awards granted under the 2015 Plan, of which 980,192 were outstanding options and 674,462 were outstanding RSUs.Management |
| | (4) | Includes 1,814,123 shares of Class A Common Stock available for issuance under the 2015 Plan and 500,000 shares of Class A Common Stock available for issuance under the ESPP. The number of shares available for issuance under the 2015 Plan increases automatically on January 1st of each year during the term of the 2015 Plan by an amount equal to the number of shares granted under the 2015 Plan during the preceding year or such lesser number that is approved by our Board. Accordingly, effective as of January 1, 2018, the aggregate number of shares available for issuance under the 2015 Plan was 2,000,000 shares. In addition, the number of shares available for issuance under the ESPP increases automatically on January 1st of each year during the term of the ESPP by an amount equal to the number of shares issued or transferred pursuant to rights granted under the ESPP during the preceding year or such lesser number that is approved by our Board. No shares have been issued or transferred pursuant to rights granted under the ESPP and as a result, the number of shares available for issuance under the ESPP did not increase as of January 1, 2018. |
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information with respect to the beneficial ownership of our Class A Common Stock and Class B Common Stock as of February 28, 2019,March 31, 2022, except as noted in the footnotes below, for: | | ▪ | each of our named executive officers; |
| | ▪ | all of our executive officers and directors as a group; and |
| | ▪ | each stockholder known by us to be the beneficial owner of more than 5% of outstanding shares of our Class A Common Stock or Class B Common Stock. |
▪each of our named executive officers; ▪each of our directors; ▪all of our executive officers and directors as a group; and ▪each stockholder known by us to be the beneficial owner of more than 5% of outstanding shares of our Class A Common Stock or Class B Common Stock. We have determined beneficial ownership in accordance with the rules of the SEC. Except as indicated by the footnotes below, we believe, based on information furnished to us and information filed with the SEC, that the persons and entities named in the table below have sole voting and investment power with respect to all shares of our Class A Common Stock or Class B Common Stock that they beneficially own, subject to applicable community property laws. Applicable percentage ownership is based on 15,862,11720,022,737 shares of Class A Common Stock and 18,071,60214,836,256 shares of Class B Common Stock outstanding at February 28, 2019.March 31, 2022. In computing the number of shares of common stock beneficially owned by a person and the percentage ownership of that person, we deemed to be outstanding all shares of common stock subject to options and RSUsrestricted stock units held by that person or entity that are currently exercisable or releasable or that will become exercisable or releasable within 60 days of February 28, 2019.March 31, 2022. We did not deem these shares outstanding, however, for the purpose of computing the percentage ownership of any other person. Unless otherwise indicated, the address of each beneficial owner listed in the table below is c/o AppFolio, Inc., 50 Castilian Drive, Santa Barbara, California, 93117. | | | | | | | | | | | | | | | | | | | | Shares Beneficially Owned | | | | | | Class A | | Class B | | % of Total Voting Power(1) | | Name of Beneficial Owner | | Shares | | % | | Shares | | % | | | 5% Stockholders: | | | | | | | | | | | Ashe Capital Management, LP(2) | | 1,600,246 |
| | 10.1 | % | | — |
| | * |
| | * |
| BlackRock, Inc.(3) | | 990,684 |
| | 6.2 | % | | — |
| | * |
| | * |
| Maurice Duca(4)(5)(6) | | 465,902 |
| | 2.9 | % | | 7,842,779 |
| | 43.4 | % | | 40.1 | % | Entities affiliated with IGSB(6) | | 13,072 |
| | * |
| | 4,848,902 |
| | 26.8 | % | | 24.7 | % | Entities affiliated with Oberndorf Enterprises LLC(7) | | 1,169,639 |
| | 7.4 | % | | — |
| | * |
| | * |
| The Vanguard Group(8) | | 1,818,858 |
| | 11.5 | % | | — |
| | * |
| | * |
| | Directors and Named Executive Officers: | | | | | | | | | | | Timothy Bliss(6)(9) | | 13,072 |
| | * |
| | 6,175,353 |
| | 34.2 | % | | 31.4 | % | Ida Kane(10) | | 348,334 |
| | 2.2 | % | | 152,501 |
| | * |
| | * |
| Janet Kerr(11) | | 18,827 |
| | * |
| | — |
| | * |
| | * |
| James Peters(12) | | 24,403 |
| | * |
| | — |
| | * |
| | * |
| Jason Randall(13) | | 278,667 |
| | 1.8 | % | | 92,083 |
| | * |
| | * |
| William Rauth(6)(14) | | 13,072 |
| | * |
| | 5,297,865 |
| | 29.3 | % | | 27.0 | % | Klaus Schauser(15) | | — |
| | * |
| | 4,694,585 |
| | 26.0 | % | | 23.9 | % | Andreas von Blottnitz(16) | | 20,403 |
| | * |
| | 491,950 |
| | 2.7 | % | | 2.5 | % | Jonathan Walker(17) | | 69,667 |
| | * |
| | 1,579,233 |
| | 8.7 | % | | 8.1 | % | All executive officers and directors as a group (9 people)(18) | | 773,373 |
| | 4.9 | % | | 13,634,668 |
| | 75.4 | % | | 69.8 | % |
| | | | | | | | | * | Represents beneficial ownership of less than one percent.39 | 2022 Proxy Statement |
| | | | | | | | | (1) | PercentageSecurity Ownership of total voting power represents voting power with respect to all shares of Class A Common StockCertain Beneficial Owners and Class B Common Stock, as a single class. The holders of shares of Class B Common Stock are entitled to ten votes per share, and holders of our shares of Class A Common Stock are entitled to one vote per share. Each share of Class B Common Stock is convertible, at any time at the option of the holder, into one share of Class A Common Stock.Management |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Shares Beneficially Owned | | | | | | Class A | | Class B | | % of Total Voting Power(1) | | Name of Beneficial Owner | | Shares | | % | | Shares | | % | | | 5% Stockholders: | | | | | | | | | | | | Ashe Capital Management, LP(2) | | 1,975,577 | | 9.9% | | — | | * | | 1.2% | | BlackRock, Inc.(3) | | 1,249,161 | | 6.2% | | — | | * | | * | | Brown Capital Management, LLC(4) | | 3,293,679 | | 16.4% | | — | | * | | 2.0% | | Capital Research Global Investors(5) | | 1,001,577 | | 5.0% | | — | | * | | * | | Maurice Duca(6)(7)(8) | | 330,064 | | 1.6% | | 6,532,996 | | 44.0% | | 39.0% | | Entities affiliated with IGSB(8) | | 13,072 | | * | | — | | * | | * | | Entities affiliated with Oberndorf Enterprises LLC(9) | | 66,890 | | * | | — | | * | | * | | The Vanguard Group(10) | | 1,700,290 | | 8.5% | | — | | * | | * | | Directors and Named Executive Officers: | | | | | | | | | | | | Timothy Bliss(8)(11) | | 13,072 | | * | | 1,536,531 | | 10.4% | | 9.1% | | Andreas von Blottnitz(12) | | 2,971 | | * | | 491,950 | | 3.3% | | 2.6% | | Agnes Bundy Scanlan (13) | | 2,795 | | * | | — | | * | | * | | Fay Sien Goon(14) | | 59,848 | | * | | — | | * | | * | | Janet Kerr(15) | | 17,048 | | * | | — | | * | | * | | Matt Mazza(16) | | 43,036 | | * | | — | | * | | * | | Jason Randall(17) | | 336,947 | | 1.7% | | 74,297 | | * | | * | | William Rauth(8)(18) | | 121,931 | | * | | 82,104 | | * | | * | | Klaus Schauser(19) | | 200,000 | | 1.0% | | 3,874,585 | | 26.1% | | 23.1% | | William Shane Trigg(20) | | 47,819 | | * | | — | | * | | * | | Jonathan Walker(21) | | 644,690 | | 3.2% | | 34,119 | | * | | * | | Winifred Webb(22) | | 4,177 | | * | | — | | * | | * | | Alex Wolf(23) | | 175,724 | | * | | — | | * | | * | | All executive officers and directors as a group (13 people)(24) | | 1,656,986 | | 8.3% | | 6,093,586 | | 41.1% | | 37.2% |
* Represents beneficial ownership of less than one percent. (1)Percentage of total voting power represents voting power with respect to all shares of Class A Common Stock and Class B Common Stock, as a single class. The holders of shares of our Class B Common Stock are entitled to ten votes per share, and holders of shares of our Class A Common Stock are entitled to one vote per share. Each share of Class B Common Stock is convertible, at any time at the option of the holder, into one share of Class A Common Stock. (2)This information is based solely on Amendment No. 7 to Schedule 13G filed on February 10, 2022. The 1,975,577 shares of Class A Common Stock are held in funds under the management and control of Ashe Capital Management L.P. Ashe Capital Management L.P. possesses sole voting and dispositive power over the shares and therefore the Class A Common Stock may be deemed to be beneficially owned by Ashe Capital Management L.P. The address for Ashe Capital Management L.P. is 530 Sylvan Ave., Suite 101, Englewood Cliffs, NJ 07632. (3)This information is based solely on Amendment No. 3 to Schedule 13G filed on February 3, 2022. The 1,249,161 shares of Class A Common Stock consist of (i) 1,232,985 shares with respect to which BlackRock, Inc. possesses sole power to vote and (ii) 1,249,161 shares with respect to which BlackRock, Inc. possesses sole dispositive power. The address for BlackRock, Inc. is 55 East 52nd Street, New York, NY 10055. (4)This information is based solely on Amendment No. 5 to Schedule 13G filed on February 14, 2022. The 3,293,679 shares of Class A Common Stock consists of (i) 2,131,325 shares of which Brown Capital Management, LLC possesses sole power to vote and (ii) 3,293,679 shares of which Brown Capital Management, LLC possesses sole dispositive power. The address for Brown Capital Management, LLC is 1201 N. Calvert Street, Baltimore, MD 21202. (5)This information is based solely on Amendment No. 2 to Schedule 13G filed on February 14, 2022, and consists of 1,001,577 shares of Class A Common Stock over which Capital Research Global Investors possesses sole voting and investment power. The address for Capital Research Global Investors is 333 South Hope Street, 55th Fl, Los Angeles, CA 90071. (6)The 330,064 shares of Class A Common Stock consist of (i) 13,072 shares of Class A Common Stock held by IGSB IVP III with respect to which, as indicated in footnote (8) below, Mr. Duca disclaims beneficial ownership except to the extent of his pecuniary interest; (ii) 9,805 shares of Class A Common Stock held by a single member limited liability company with respect to which Mr. Duca possesses sole voting and investment power; (iii) 194,037 shares of Class A Common Stock with respect to which Mr. Duca is the sole trustee and who, in that capacity, possesses sole voting and investment power; (iv) 78,397 shares of Class A Common Stock to which Mr. Duca possesses sole voting and investment power; and (v) 34,753 shares of Class A Common Stock to which Mr. Duca may be deemed to share, but as to which Mr. Duca disclaims, beneficial ownership. (7)The 6,532,996 shares of Class B Common Stock consist of (i) 3,947,398 shares of Class B Common Stock with respect to which Mr. Duca possesses sole voting and investment power; (ii) 29,595 shares of Class B Common Stock held by two single member limited liability companies with respect to which Mr. Duca possesses sole voting and investment power; (iii) 2,536,153 shares of Class B Common Stock of which Mr. Duca is the sole trustee and who, in that capacity, possesses sole voting and investment power; and (iv) 19,850 shares of Class B Common Stock with respect to which Mr. Duca may be deemed to share (but as to which Mr. Duca disclaims) beneficial ownership. The address for Mr. Duca is P.O. Box 5609, Santa Barbara, CA 93150. | | | | | | | | | (2) | This information is based solely on Amendment No. 2 to Schedule 13G filed on March 11, 2019. The 1,600,246 shares of Class A Common Stock are held in funds under the management and control of Ashe Capital Management L.P. Ashe Capital Management L.P. possesses sole voting and dispositive power over the shares and therefore the Class A Common Stock may be deemed to be beneficially owned by Ashe Capital Management L.P. The address for Ashe Capital Management L.P. is 530 Sylvan Ave., Suite 101, Englewood Cliffs, NJ 07632.
40 | 2022 Proxy Statement |
| | | | | | | | | (3) | This information is based solely on the Schedule 13G filed on February 8, 2019. ConsistsSecurity Ownership of 990,684 shares of Class A Common Stock over which BlackRock, Inc. possesses sole votingCertain Beneficial Owners and investment power. The address for BlackRock, Inc. is 55 East 52nd Street, New York, NY 10055.Management |
| | (4) | The 465,902 shares of Class A Common Stock consist of (i) 13,072 shares of Class A Common Stock held by IGSB IVP III with respect to which, as indicated in footnote (6) below, Mr. Duca disclaims beneficial ownership except to the extent of his pecuniary interest; (ii) 9,805 shares of Class A Common Stock held by Mr. Duca; (iii) 69,909 shares of Class A Common Stock with respect to which Mr. Duca is the sole trustee and who, in that capacity, possesses sole voting and investment power; and (iv) 373,116 shares of Class A Common Stock held by a limited liability company with respect to which Mr. Duca is the sole manager and possesses sole voting and investment power but as to which Mr. Duca disclaims beneficial ownership except to the extent of his pecuniary interest.
|
| | (5) | The 7,842,779 shares of Class B Common Stock consist of (i) 3,855,275 and 993,627 shares of Class B Common Stock owned by IGSB IVP III and IGSB Internal Venture Fund III, respectively, with respect to which, as indicated in footnote (6) below, Mr. Duca may be deemed to share, but with respect to which he disclaims, beneficial ownership; (ii) 1,926,140 shares of Class B Common Stock with respect to which Mr. Duca possesses sole voting and investment power; (iii) 1,058,056 shares of Class B Common Stock of which Mr. Duca is the sole trustee and who, in that capacity, possesses sole voting and investment power; and (iv) 9,681 shares of Class B Common Stock with respect to which Mr. Duca may be deemed to share (but as to which Mr. Duca disclaims) beneficial ownership. The address for Mr. Duca is P.O. Box 5609, Santa Barbara, CA 93150. |
| | (6) | The 13,072 shares of Class A Common Stock are held by IGSB IVP III. The Class B Common Stock consists of (i) 3,855,275 shares of Class B Common Stock held by IGSB IVP III, and (ii) 993,627 shares of Class B Common Stock held by IGSB Internal Venture Fund III. Investment Group of Santa Barbara ("IGSB") is the sole manager of IVP III and Venture Fund III. Messrs. Timothy K. Bliss, Maurice J. Duca and William R. Rauth are the managing members of IGSB and, in those capacities, may be deemed to share voting and dispositive power over, and, therefore, may be deemed to share beneficial ownership of the 13,072 shares of Class A Common Stock and 3,855,275 and 993,627 shares of Class B Common Stock owned by IGSB IVP III and IGSB Internal Venture Fund III, respectively. However, decisions regarding the voting, disposition and conversion of the Class A Common Stock and Class B Common Stock that are owned by IGSB IVP III and IGSB Internal Venture Fund III require the unanimous approval of Messrs. Bliss, Duca and Rauth. As a result, each of them disclaims beneficial ownership of those Class A and Class B Common Stock. The address for each of the entities affiliated with IGSB is P.O. Box 5609, Santa Barbara, CA 93150. |
| | (7) | This information is based solely on Amendment No. 2 to Schedule 13G filed on February 14, 2019. The 1,169,639 shares of Class A Common Stock consists of (i) 312,397 shares of Class A Common Stock held by William E. Oberndorf with respect to which Mr. Oberndorf has sole voting and dispositive power, (ii) 768,886(8)The 13,072 shares of Class A Common Stock are held by IGSB IVP III. Investment Group of Santa Barbara, or IGSB, is the sole manager of IGSB IVP III. Messrs. Timothy K. Bliss, Maurice J. Duca and William R. Rauth are the managing members of IGSB and, in those capacities, may be deemed to share voting and dispositive power over, and, therefore, may be deemed to share beneficial ownership of the 13,072 shares of Class A Common Stock. However, decisions regarding the voting, disposition and conversion of the Class A Common Stock that are owned by IGSB IVP III require the unanimous approval of Messrs. Bliss, Duca and Rauth. As a result, each of them disclaims beneficial ownership of those Class A Common Stock except to the extent of any pecuniary interests they may have therein. The address for each of the entities affiliated with IGSB is P.O. Box 5609, Santa Barbara, CA 93150. (9)This information is based solely on Amendment No. 5 to Schedule 13G filed on June 23, 2021. The 66,890 shares of Class A Common Stock consists of (i) 50,000 shares of Class A Common Stock held by Oberndorf Investments LLC with respect to which Oberndorf Investments LLC has sole voting and dispositive power , (iii) 70,616 shares of Class A Common Stock held by the Bill & Susan Oberndorf Foundation with respect to which the Bill & Susan Oberndorf Foundation has sole voting and dispositive power, (ii) 10,700 shares of Class A Common Stock held by Peter C. Oberndorf with respect to which Peter C. Oberndorf has shared voting and dispositive power, (iii) 850 shares of Class A Common Stock held by Peter C. Oberndorf with respect to which Peter C. Oberndorf has shared voting and dispositive power, (iv) 6,160 shares of Class A Common Stock held by William Oberndorf with respect to which William Oberndorf has shared voting and dispositive power, and (v) 30 shares of Class A Common Stock held by Caroline G. Oberndorf with respect to which Caroline G. Oberndorf has shared voting and dispositive power. Of these shares, 66,890 shares of Class A Common Stock may be deemed to be beneficially owned by William E. Oberndorf solely in his capacity as the sole controlling person of Oberndorf Investments LLC; 10,700 shares of Class A Common Stock held by Peter C. Oberndorf with respect to which Peter C. Oberndorf has shared voting and dispositive power, (v) 850 shares of Class A Common Stock held by Peter C. Oberndorf with respect to which Peter C. Oberndorf has shared voting and dispositive power, (vi) 6,160 shares of Class A Common Stock held by the William E. Oberndorf with respect to which William E. Oberndorf has sole voting and dispositive power, and (vii) 30 shares of Class A Common Stock held by Caroline G. Oberndorf with respect to which Caroline G. Oberndorf has shared voting and dispositive power. Of these shares, 768,886 shares of Class A Common Stock may be deemed to be beneficially owned by William E. Oberndorf solely in his capacity as the sole controlling person of Oberndorf Investments LLC; 70,616 shares of Class A Common Stock may be deemed to be beneficially owned by William E. Oberndorf solely in his capacity as a controlling person of the Bill & Susan Oberndorf Foundation; 10,700 shares of Class A Common Stock may be deemed to be beneficially owned by |
William E. Oberndorf solely in his capacity as an authorized signatory for the account of Peter C. Oberndorf;Oberndorf; 6,160 shares of Class A Common Stock may be deemed to be beneficially owned by William E. Oberndorf solely in his capacity as an authorized signatory for the account of William Oberndorf; and 30 Class A common shares may be deemed to be beneficially owned by William E. Oberndorf solely in his capacity as an authorized signatory for the account of Caroline G. Oberndorf. The address for the entities affiliated with Oberndorf Enterprises LLC is 615 Front Street, San Francisco, CA, 94111.
(10)This information is based solely on Amendment No. 5 to Schedule 13G filed on February 9, 2022. The 1,700,290 shares of Class A Common Stock consist of (i) 35,850 shares with respect to which The Vanguard Group possess shared power to vote, (ii) 1,648,309 shares with respect to which The Vanguard Group possesses sole dispositive power, and (iii) 51,981 shares with respect to which The Vanguard Group possesses shared dispositive power. The address for the Vanguard Group is 100 Vanguard Blvd., Malvern, PA 19355. (11)The 13,072 shares of Class A Common Stock are held by IGSB IVP III with respect to which, as indicated in footnote (8) above, Mr. Bliss disclaims beneficial ownership except to the extent of his pecuniary interest. Mr. Bliss possesses sole voting and investment power with respect to the 1,413,699 shares of Class B Common Stock and Mr. Bliss' spouse possesses sole voting and investment power with respect to 122,832 shares of Class B Common Stock. The address for Mr. Bliss is P.O. Box 5609, Santa Barbara, CA 93150. (12)Consists of (i) 491,950 shares of Class B Common Stock and (ii) 2,971 shares of Class A Common Stock. The 491,950 shares of Class B Common Stock consists of 429,450 shares of Class B Common Stock held by Oceanlink Investments Limited, which is managed by a Board of Directors that currently possesses shared voting and dispositive power with respect to these shares. Oceanlink Trust, of which Mr. von Blottnitz is a trustee and beneficiary, holds all of the equity interests of Oceanlink Investments Limited. Mr. von Blottnitz possesses shared power to revoke Oceanlink Trust. Mr. von Blottnitz possesses sole voting and investment power with respect to the remaining 62,500 shares of Class B Common Stock. Mr. von Blottnitz also holds 2,971 shares of Class A Common Stock with respect to which Mr. von Blottnitz possesses sole voting and dispositive power and that were granted pursuant to our director compensation policy, of which 1,039 are subject to repurchase until June 28, 2022. The address for Oceanlink Investments Limited is P.O. Box 621, Le Gallais Chambers, 54 Bath Street, St. Helier, Jersey, Channel Islands JE48YD. (13)Includes 2,795 shares of Class A Common Stock that were granted pursuant to our director compensation policy, of which 1,039 which are subject to repurchase until June 28, 2022. (14)Includes 610 shares of Class A Common Stock granted to Ms. Goon that will vest within 60 days of March 31, 2022. (15)Includes 17,048 shares of Class A Common Stock that were granted pursuant to our director compensation policy, of which 1,039 shares are subject to repurchase until June 28, 2022. (16)Includes 406 shares of Class A Common Stock granted to Mr. Mazza that will vest within 60 days of March 31, 2022. (17)Includes 336,947 shares of Class A Common Stock and 54,297 shares of Class B Common Stock underlying options granted to Mr. Randall that are exercisable within 60 days of March 31, 2022. (18)The 121,931 shares of Class A Common Stock consists of (i) 13,072 shares of Class A Common Stock held by IGSB IVP III with respect to which, as indicated in footnote (8) above, Mr. Rauth disclaims beneficial ownership, and (ii) 108,859 shares of Class A Common Stock with respect to which Mr. Rauth and/or his spouse possesses sole voting and investment power. Mr. Rauth and/or his spouse possess sole voting and dispositive power with respect to the 82,104 shares of Class B Common Stock. The address for Mr. Rauth is P.O. Box 5609, Santa Barbara, CA 93150. (19)Consists of (i) 200,000 shares of Class A Common Stock held by the 1206 Family Trust dated December 13, 2002, of which Mr. Schauser and his spouse serve as co-trustees, and (ii) 3,874,585 shares of Class B Common Stock held by the 1206 Family Trust dated December 13, 2002, of which Mr. Schauser and his spouse serve as co-trustees. (20)Includes 6,762 shares of Class A Common Stock granted to Mr. Trigg that will vest within 60 days of March 31, 2022. (21)Includes (i) 22,622 shares of Class A Common Stock and 7,194 shares of Class B Common Stock underlying options granted to Mr. Walker that will be exercisable within 60 days of March 31, 2022, (ii) 1,219 shares of Class A Common Stock granted to Mr. Walker that will vest within 60 days of March 31, 2022, and (iii) 571,802 shares of Class A Common Stock pledged as collateral to secure personal indebtedness pursuant to an exception to the Company's insider trading policy granted by the Chief Legal Officer. (22)Includes 4,177 shares of Class A Common Stock that were granted pursuant to our director compensation policy, of which 1,039 are subject to repurchase until June 28, 2022. (23)The 175,724 shares of Class A Common Stock consist of (i) 165,724 shares of Class A Common Stock with respect to which Mr. Wolf possesses sole voting and investment power and (ii) 10,000 shares of Class A common stock with respect to which Mr. Wolf may be deemed to share voting and dispositive power. However, Mr. Wolf disclaims beneficial ownership of these 10,000 shares except to the extent of any pecuniary interest he may have therein. The address for Mr. Wolf is P.O. Box 5609, Santa Barbara, CA 93150. (24)Includes (i) 4,156 and shares of Class A Common Stock that are subject to repurchase until June 28, 2022, (ii) 359,569 shares of Class A Common Stock and 81,221 Class B Common Stock underlying options that will be exercisable within 60 days of March 31, 2022, and (iii) 8,997 shares of Class A Common stock that will be vested within 60 days of March 31, 2022.
| | | | | | | | | (8) | This information is based solely on Amendment No. 2 to Schedule 13G filed on February 11, 2019. The 1,818,858 shares of Class A Common Stock consist of (i) 1,788,811 shares with respect to which The Vanguard Group possesses sole dispositive power and (ii) 30,047 shares with respect to which The Vanguard Group possesses sole voting power and shared dispositive power. The address for the Vanguard Group is 100 Vanguard Blvd., Malvern, PA 19355.
41 | 2022 Proxy Statement |
| | | | | | | | | (9) | The 13,072 sharesSecurity Ownership of Class A Common Stock are held by IGSB IVP III with respect to which, as indicated in footnote (6) above, Mr. Bliss disclaims beneficial ownership. The 6,175,353 shares of Class B Common Stock consist of (i) the 3,855,275Certain Beneficial Owners and 993,627 shares of Class B Common Stock owned by IGSB IVP III and IGSB Internal Venture Fund III, respectively, with respect to which, as indicated in footnote (6) above, Mr. Bliss may be deemed to share, but with respect to which he disclaims, beneficial ownership; and (ii) 1,326,451 shares of Class B Common Stock over which Mr. Bliss possesses sole voting and investment power. The address for Mr. Bliss is P.O. Box 5609, Santa Barbara, CA 93150.
Management |
| | (10) | Consists of (i) 51,936 shares of Class B Common Stock held directly by Ms. Kane, and (ii) 348,334 shares of Class A Common Stock and 100,565 shares of Class B Common Stock underlying options granted to Ms. Kane that will be vested and/or exercisable within 60 days of February 28, 2019. |
| | (11) | Includes 18,827 shares of Class A Common Common Stock that were granted pursuant to our director compensation policy, of which 1,638 shares are subject to repurchase until June 27, 2019. |
| | (12) | Includes 20,403 shares of Class A Common Stock that were granted pursuant to our director compensation policy, of which 1,638 shares are subject to repurchase until June 27, 2019. |
| | (13) | Includes 278,667 shares of Class A Common Stock and 52,083 shares of Class B Common Stock underlying options granted to Mr. Randall that will be vested and exercisable within 60 days of February 28, 2019. |
| | (14) | The 13,072 shares of Class A Common Stock are held by IGSB IVP III with respect to which, as indicated in footnote (6) above, Mr. Rauth disclaims beneficial ownership. The 5,297,865 shares of Class B Common Stock consist of (i) 3,855,275 and 993,627 shares of Class B Common Stock owned by IGSB IVP III and IGSB Internal Venture Fund III, respectively, with respect to which, as indicated in footnote (6) above, Mr. Rauth may be deemed to share, but with respect to which he disclaims, beneficial ownership; and (ii) 448,963 shares of Class B Common Stock with respect to which Mr. Rauth possesses sole voting and investment power. The address for Mr. Rauth is P.O. Box 5609, Santa Barbara, CA 93150. |
| | (15) | Consists of 4,694,585 shares of Class B Common Stock held by the 1206 Family Trust dated December 13, 2002, of which Mr. Schauser and his spouse serve as co-trustees. |
| | (16) | Consists of (i) 491,950 shares of Class B Common Stock and (ii) 20,403 shares of Class A Common Stock. The Class B Common Stock are held by Oceanlink Investments Limited, which is managed by a Board of Directors that currently possesses shared voting and dispositive power with respect to these shares. Oceanlink Trust, of which Mr. von Blottnitz is a trustee and beneficiary, holds all of the equity interests of Oceanlink Investments Limited. Mr. von Blottnitz possesses shared power to revoke Oceanlink Trust. Mr. von Blottnitz also holds 20,403 shares of Class A Common Stock with respect to which Mr. von Blottnitz possesses sole voting and dispositive power and that were granted pursuant to our director compensation policy, of which 1,638 are subject to repurchase until June 27, 2019. The address for Oceanlink Investments Limited is P.O. Box 621, Le Gallais Chambers, 54 Bath Street, St. Helier, Jersey, Channel Islands JE48YD. |
| | (17) | Consists of (i) 1,494,025 shares of Class B Common Stock held directly by Mr. Walker, (ii) 20,625 shares of Class B Common Stock held by Charles Schwab & Co., Inc. CUST FBO Jonathan Walker Roth Contributory IRA and (iii) 69,667 shares of Class A Common Stock and 64,583 shares of Class B Common Stock underlying options granted to Mr. Walker that will be vested and exercisable within 60 days of February 28, 2019. Mr. Walker possesses sole voting and dispositive power over each of these shares. |
| | (18) | Includes 4,914 shares of Class A Common Stock that are subject to repurchase until June 27, 2019. Includes 696,668 shares of Class A Common Stock and 217,231 Class B Common Stock underlying options that will be vested and exercisable within 60 days of February 28, 2019. |
Delinquent Section 16 Beneficial Ownership Reporting Compliance16(a) Reports Section 16 of the Exchange Act requires our directors, executive officers and persons who own more than 10% of our Class A Common Stock or Class B Common Stock, whichwhom we collectively refer to as our reporting"reporting persons," to report to the SEC on a timely basis their initiation status as a reporting person and any changes in their respective beneficial ownership of our registered equity securities. To our knowledge, based solely on a review of the copies of such reports furnished to us and written representations from our reporting persons, we believe that during 2018,2021 and through April 28, 2022, all of our reporting persons complied with all applicable SEC filing requirements under Section 16 of the Exchange, Act.except that Mr. Wolf filed a Form 3, in connection with Mr. Wolf's election to the Board, on January 27, 2022 that was due to be reported on January 24, 2022.
| | | | | | | | | | | | | | | Related Party Transactions |
RELATED PARTY TRANSACTIONS
Certain Relationships and Transactions Other than the transactions discussed below, and the various compensation arrangements described in the section of this Proxy Statement entitledtitled “Compensation Discussion and Analysis,” since January 1, 2018,2021, there was not, and there is not currently proposed, any transaction or series of similar transactions to which we were or will be a party for which the amount involved exceeds or will exceed $120,000 and in which any director, director nominee, executive officer, holder of more than 5% of Class A Common Stock or Class B Common Stock, or any member of the immediate family of any of the foregoing, had or will have a direct or indirect material interest. Amended and Restated Investors’ Rights Agreement We are party to an amended and restated investors’ rights agreement that provides, among other things, certain stockholders, including certain of our executive officers, directors and principal stockholders, with demand registration rights, piggyback registration rights, and Form S-3 registration rights. All registration rights will terminate on the earlier of (i) the date that is five years after our IPO, or (ii) as to any stockholder, the first date after our IPO on which such stockholder is able to dispose of all of its registrable securities without restriction under Rule 144. Limitation of Liability and Indemnification of Directors and Officers Our Governing Documents which became effective upon the completion of our IPO, provide that we will indemnify each of our directors and executive officers to the fullest extent permitted by Delaware law. In addition, as permitted by the laws of the State of Delaware, we have entered into indemnification agreements with each of our directors and executive officers. Under the terms of ourThese indemnification agreements we are requiredmay require us, among other things, to indemnify each of our directors and executive officers to the fullest extent permittedagainst liabilities that may arise by the lawsreason of the State of Delaware if the indemniteetheir status or service as directors or executive officers, so long as he or she acted in good faith and in a manner the indemniteehe or she reasonably believed to be in or not opposed to our best interests and, with respect to any criminal proceeding, had no reasonable cause to believe the indemnitee’shis or her conduct was unlawful. We must indemnifyThese indemnification agreements may require us to pay, and in some instances advance, certain expenses, damages and other payments incurred by our directors and executive officers against any and all (i) costs and expenses (including attorneys’ and experts’ fees, expenses and charges) actually and reasonably paid or incurred in connection with investigating, defending, being a witness in or participating in, or preparing to investigate, defend, be a witness in or participate in, and (ii) damages, losses, liabilities, judgments, fines, penalties (whether civil, criminal or other), excise taxes, and amounts paid or payable in settlement and all other charges paid or payable in connection with, in the case of either (i) or (ii), any threatened, pending or completed action, suit, proceeding, alternate dispute resolution mechanism, investigation or inquiry related to the fact that (a) such person is or was a director, officer, employee or agent of ours, or (b) such person is or was serving at our request as a director, officer, employee, member, manager, partner, trustee or agent of another corporation, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise. The indemnification agreements also require us, if so requested, to advance within 20 days of such request any and all costs and expenses that such director or executive officer incurs, provided that such person agrees to return any such advance if it is ultimately determined that such person is not entitled to be indemnified for such costs and expenses. Our Governing Documents also require that such person return any such advance if it is ultimately determined that such person is not entitled to indemnification by us as authorized by the laws of the State of Delaware. We are not required to provide indemnification under our indemnification agreements for certain matters, including: (i) indemnification in connection with certain proceedings or claims initiated or brought voluntarily by the director or executive officer, (ii) indemnification that is finally determined, under the procedures and subject to the presumptions set forth in the indemnification agreements, to be unlawful, (iii) indemnification related to disgorgement of profits made from the purchase or sale of our securities under Section 16(b) of the Exchange Act, or similar provisions of state statutory or common law, or (iv) indemnification for reimbursement to us of any bonus or other incentive-based or equity-based compensation previously received by the director or executive officer or payment of any profits realized by the director or executive officer from the purchase or sale of our securities, as required in each case under the Exchange Act (including any such reimbursements under Section 304 of the Sarbanes-Oxley Act) in connection with an accounting restatement or the payment to us of profits arising from the purchase or sale by the director or executive officer of our securities in violation of Section 306 of the Sarbanes-Oxley Act, our Governing Documents or otherwise, except with respect to any excess amount beyond the amount so received by the director or officer.officers. The indemnification agreements require us, to the extent that we maintain an insurance policy or policies providing liability insurance for our directors or executive officers, to cover such person by such policy or policies to the maximum extent available.
We have obtained insurance policies under which, subject to the limitations of the polices, coverage is provided to our directors and executive officers against loss arising from claims made by reason of breach of fiduciary duty or other wrongful acts as a director or executive officer, including claims relating to public securities matters, and to us with respect to payments that
may be made by us to these directors and executive officers pursuant to our indemnification obligations or otherwise as a matter of law. Certain of our non-employee directors may, through their relationship with their employers, be insured and/or indemnified against certain liabilities incurred in their capacity as members of our Board. Employment Arrangement with Immediate Family Members of Directors and Senior Executives
We have employed in our research and development organization an immediate family member of an executive officera director since May 2013. Their base salary, which is approximately $130,000,$210,000, along with their stock-based and other compensation, is commensurate with other similarly situated employees with similar skills and experience.
We have also employed in our corporate support organization an immediate family member of an executive officer since September 2018. Their base salary, which is approximately $200,000,$260,000, along with their stock-based and other compensation, is commensurate with other similarly situated employees with similar skills and experience.
Policies and Procedures for Approval of Related Party Transactions
We have adopted a related party transaction policy. Pursuant to this policy, the Chairperson of our audit committeeAudit Committee is charged with primary responsibility for determining whether, based on the particular facts and circumstances, a related person (as defined in the policy) has a direct or indirect material interest in a proposed or existing transaction involving us. Any director, officer or other employee who becomes aware of a transaction or relationship that could reasonably be expected to give rise to a conflict of interest is required to disclose the matter promptly to the Chairperson of our audit committee.Audit Committee. To assist the Chairperson of our audit committeeAudit Committee in making this determination, the policy sets forth certain categories of transactions that are deemed not to involve a direct or indirect material interest on behalf of the related person. If, after applying these categorical standards and weighing all of the facts and circumstances, the Chairperson of our audit committeeAudit Committee determines that the related person would have a direct or indirect material interest in the transaction, he or she must present the transaction to our audit committeeAudit Committee for review. Our audit committeeAudit Committee must then either approve or reject the transaction in accordance with the terms of the policy and may only approve of the transaction if the audit committee determines that, based on all of the information presented, the related party transaction is not inconsistent with the best interests of AppFolio as a whole.
ADDITIONAL INFORMATION
Procedures for Submitting Stockholder Proposals Requirements for Stockholder Proposals to be Brought Before Future Annual Meetings Our Governing Documents provide that, for nominations of persons for election to our Board or other proposals to be considered at an annual meeting of stockholders, a stockholder must provide us with written notice no earlier than 75 days and no later than 45 days prior to the first anniversary of the date that our proxy materials relating to the preceding year’s annual meeting of stockholders (or a notice of availability of proxy materials, if earlier) were first mailed. As a result, stockholder proposals must be received by us no earlier than January 17, 2020,February 12, 2023, and no later than February 16, 2020, in orderMarch 14, 2023, to be considered at our 20202023 annual meeting of stockholders. In the event the date of our 20202023 annual meeting of stockholders is more than 30 days before or more than 60 days after the anniversary date of our 20192022 annual meeting of stockholders, notice must be delivered not earlier than the close of business on the 120th day prior to suchthe date of our 20202023 annual meeting of stockholders and not later than the close of business on the later of (i) the 90th day prior to suchthe date of our 20202023 annual meeting of stockholders or (ii) the 10th day following the day on which public announcement of the date of our 20202023 annual meeting of stockholders is first made. Such notice must be provided to AppFolio, Inc., 50 Castilian Drive, Santa Barbara, California 93117, Attn: Chief FinancialLegal Officer. Our Governing Documents specify certain additional requirements regarding the form and content of such notice. Requirements for Stockholder Proposals to be Considered for Inclusion in Our Future Proxy Materials In addition to the requirements stated above, any stockholder who wishes to submit a proposal for inclusion in our future proxy materials must comply with Rule 14a-8 under the Exchange Act. For such proposals to be included in our proxy materials relating to our 20202023 annual meeting of stockholders, all applicable requirements of Rule 14a-8 must be satisfied and we must receive such proposals no later than December 3, 2019.29, 2022. Such proposals must be provided to AppFolio, Inc., 50 Castilian Drive, Santa Barbara, California 93117, Attn: Chief FinancialLegal Officer. Other Business Our Board does not presently know of any other business, other than that described in this Proxy Statement, that will be presented for consideration by our stockholders at the Annual Meeting. However, if any other business is properly brought before the Annual Meeting, or at any adjournment or postponement thereof, it is intended that the shares of our Class A Common Stock and Class B Common Stock represented by proxies will be voted in respect thereof in accordance with the judgment of the persons named as proxies. Annual Report A COPY OF OUR 20182021 ANNUAL REPORT, AS WELL AS THIS PROXY STATEMENT, HAS BEEN POSTED ON THE INTERNET, EACH OF WHICH IS ACCESSIBLE BY FOLLOWING THE INSTRUCTIONS IN THIS PROXY STATEMENT AND THE NOTICE. WE WILL PROVIDE, WITHOUT CHARGE, UPON THE WRITTEN REQUEST OF ANY STOCKHOLDER ON THE RECORD DATE (INCLUDING BENEFICIAL OWNERS HOLDING SHARES IN "STREET NAME"), A COPY OF OUR 20182021 ANNUAL REPORT. STOCKHOLDERS SHOULD DIRECT SUCH REQUESTS TO APPFOLIO, INC., 50 CASTILIAN DRIVE, SANTA BARBARA, CALIFORNIA 93117, ATTN: CHIEF FINANCIALLEGAL OFFICER, OR BY EMAIL TO cfo@appfolio.com.
STOCKHOLDERQUESTIONS@APPFOLIO.COM.
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