UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE

SECURITIES EXCHANGE ACT OF 1934

Filed by the Registrant ☒                             Filed by a Party other than the Registrant ☐

Check the appropriate box:

IRHYTHM TECHNOLOGIES, INC.

(Name of Registrant as Specified In Its Charter)

Payment of Filing Fee (Check the appropriate box):

IRHYTHM TECHNOLOGIES, INC.

650 Townsend Street, Suite 500

San Francisco, California 94103

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

To Be Held at 2:00 p.m. Pacific Time on May 23, 201822, 2019

Dear Stockholders of iRhythm Technologies, Inc.:

We cordially invite you to attend the 20182019 annual meeting of stockholders (the “Annual Meeting”) of iRhythm Technologies, Inc., a Delaware corporation, which will be held on May 23, 2018,22, 2019, at 2:00 p.m. Pacific Time , in person at iRhythm Technologies, Inc., 650 Townsend Street, Suite 500, San Francisco, California, 94103, for the following purposes, as more fully described in the accompanying proxy statement:

1. To elect twothree Class IIIII directors to serve until the 20212022 annual meeting of stockholders and until their successors are duly elected and qualified;

2. To ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for our fiscal year ending December 31, 2018;2019;

3. Advisory vote on the frequency of advisory votes onto approve Named Executive Officer Compensation; and

4. To transact such other business as may properly come before the Annual Meeting or any adjournments or postponements thereof.

Our Board of Directors has fixed the close of business on March 29, 2018,2019, as the record date for the Annual Meeting. Only stockholders of record on March 29, 20182019 are entitled to notice of and to vote at the Annual Meeting. Further information regarding voting rights and the matters to be voted upon is presented in the accompanying proxy statement.

On or about April 13, 2018,25, 2019, we expect to mail to our stockholders a Notice of 20182019 Annual Meeting of Stockholders (the “Notice”), together with our proxy statement and our annual report. The Notice provides instructions on how to vote via the Internet, by telephone or by proxy card. The accompanying proxy statement and our annual report can be accessed directly at the following Internet address: www.proxyvote.com. You will need to enter the control number located on your proxy card.

YOUR VOTE IS IMPORTANT. Whether or not you plan to attend the Annual Meeting, we urge you to submit your vote via the Internet, telephone or mail.

We appreciate your continued support of iRhythm.

TABLE OF CONTENTS

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IRHYTHM TECHNOLOGIES, INC.

PROXY STATEMENT

FOR 20172019 ANNUAL MEETING OF STOCKHOLDERS

To Be Held at 2:00 p.m. Pacific Time on May 23, 201822, 2019

This Proxy Statement and the enclosed form of proxy are furnished in connection with the solicitation of proxies by our Board of Directors for use at the 20182019 annual meeting of stockholders of iRhythm Technologies, Inc., a Delaware corporation, and any postponements, adjournments or continuations thereof (the “Annual Meeting”). The Annual Meeting will be held on May 23, 201822, 2019 at 2:00 p.m. Pacific Time, at iRhythm Technologies, Inc., 650 Townsend Street, Suite 500, San Francisco, California, 94103. The Notice of 20182019 Annual Meeting of Stockholders (the “Notice”), together with this Proxy Statement and our annual report is first being mailed on or about April 13, 201825, 2019 to all stockholders entitled to vote at the Annual Meeting.

The information provided in the “question and answer” format below is for your convenience only and is merely a summary of the information contained in this Proxy Statement. You should read this entire Proxy Statement carefully. Information contained on, or that can be accessed through, our website is not intended to be incorporated by reference into this Proxy Statement and references to our website address in this Proxy Statement are inactive textual references only.

What matters am I voting on?

You will be voting on:

How does the Board of Directors recommend I vote on these proposals?

Our Board of Directors recommends a vote:

Who is entitled to vote?

Holders of our common stock as of the close of business on March 29, 2018,2019, the record date for the Annual Meeting, may vote at the Annual Meeting. As of the record date, there were 23,591,95924,628,643 shares of our common stock outstanding. In deciding all matters at the Annual Meeting, each stockholder will be entitled to one vote for each share of our common stock held by them on the record date. Stockholders are not permitted to cumulate votes with respect to the election of directors.

Registered Stockholders. If shares of our common stock are registered directly in your name with our transfer agent, you are considered the stockholder of record with respect to those shares and the Notice was provided to you directly by us. As the stockholder of record, you have the right to grant your voting proxy directly to the individuals listed on the proxy card or vote in person at the Annual Meeting. Throughout this Proxy Statement, we refer to these registered stockholders as “stockholders of record.”

Street Name Stockholders. If shares of our common stock are held on your behalf in a brokerage account or by a bank or other nominee, you are considered to be the beneficial owner of shares that are held in “street name,” and the Notice was forwarded to you by your broker or nominee, who is considered the stockholder of record with respect to those shares. As the beneficial owner, you have the right to direct your broker, bank or other nominee as to how to vote your shares. Beneficial owners are also invited to attend the Annual Meeting. However, since a beneficial owner is not the stockholder of record, you may not vote your shares of our common stock in person at the Annual Meeting unless you follow your broker’s procedures for obtaining a legal proxy. If you request a printed copy of

our proxy materials by mail, your broker, bank or other nominee will provide a voting instruction form for you to use. Throughout this Proxy Statement, we refer to stockholders who hold their shares through a broker, bank or other nominee as “street name stockholders.”

How many votes are needed for approval of each proposal?

What is the quorum?

A quorum is the minimum number of shares required to be present at the Annual Meeting for the Annual Meeting to be properly held under our amended and restated bylaws and Delaware law. The presence, in person or by proxy, of a majority of all issued and outstanding shares of our common stock entitled to vote at the Annual Meeting will constitute a quorum at the Annual Meeting. Abstentions, withhold votes and broker non-votes are counted as shares present and entitled to vote for purposes of determining a quorum.

Who will count the votes?

Broadridge Financial Services, Inc., our independent proxy tabulator, will tabulate the votes.

How do I vote?

If you are a stockholder of record, there are four ways to vote:

Even if you plan to attend the Annual Meeting in person, we recommend that you also vote by proxy so that your vote will be counted if you later decide not to attend.

If you are a street name stockholder, you will receive voting instructions from your broker, bank or other nominee. You must follow the voting instructions provided by your broker, bank or other nominee in order to instruct your broker, bank or other nominee on how to vote your shares. Street name stockholders should generally be able to vote by returning an instruction card, or by telephone or on the Internet. However, the availability of telephone and Internet voting will depend on the voting process of your broker, bank or other nominee. As discussed above, if you are a street name stockholder, you may not vote your shares in person at the Annual Meeting unless you obtain a legal proxy from your broker, bank or other nominee.

Can I change my vote?

Yes. If you are a stockholder of record, you can change your vote or revoke your proxy any time before the Annual Meeting by:

If you are a street name stockholder, your broker, bank or other nominee can provide you with instructions on how to change your vote.

What do I need to do to attend the Annual Meeting in person?

Space for the Annual Meeting is limited. Therefore, admission will be on a first-come, first-served basis. Registration will open at 1:30 p.m. Pacific Time and the Annual Meeting will begin at 2:00 p.m. Pacific Time. Each stockholder should be prepared to present:

Use of cameras, recording devices, computers and other electronic devices, such as smart phones and tablets, will not be permitted at the Annual Meeting. Please allow ample time for check-in. Parking is limited.

What is the effect of giving a proxy?

Proxies are solicited by and on behalf of our Board of Directors. Kevin M. King and Matthew C. Garrett have been designated as proxy holders by our Board of Directors. When proxies are properly dated, executed and returned, the shares represented by such proxies will be voted at the Annual Meeting in accordance with the instructions of the stockholder. If no specific instructions are given, however, the shares will be voted in accordance with the recommendations of our Board of Directors as described above. If any matters not described in this Proxy Statement are properly presented at the Annual Meeting, the proxy holders will use their own judgment to determine how to vote the shares. If the Annual Meeting is adjourned, the proxy holders can vote the shares on the new Annual Meeting date as well, unless you have properly revoked your proxy instructions, as described above.

How are proxies solicited for the Annual Meeting?

Our Board of Directors is soliciting proxies for use at the Annual Meeting. All expenses associated with this solicitation will be borne by us. We will reimburse brokers or other nominees for reasonable expenses that they incur in sending our proxy materials to you if a broker, bank or other nominee holds shares of our common stock on your behalf. In addition, our directors and employees may also solicit proxies in person, by telephone, or by other means of communication. Our directors and employees will not be paid any additional compensation for soliciting proxies.

How may my brokerage firm or other intermediary vote my shares if I fail to provide timely directions?

Brokerage firms and other intermediaries holding shares of our common stock in street name for their customers are generally required to vote such shares in the manner directed by their customers. In the absence of timely directions, your broker will have discretion to vote your shares on our “routine” matter, the proposal to ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm. Your broker will not have discretion to vote on the election of directors and the vote on the frequency of advisory votes on Named Executive Officer compensation, which are “non-routine” matters, absent direction from you.

Where can I find the voting results of the Annual Meeting?

We will announce preliminary voting results at the Annual Meeting. We will also disclose voting results on a Current Report on Form 8-K that we will file with the SEC within four business days after the Annual Meeting. If final voting results are not available to us in time to file a Current Report on Form 8-K within four business days after the Annual Meeting, we will file a Current Report on

Form 8-K to publish preliminary results and will provide the final results in an amendment to the Current Report on Form 8-K as soon as they become available.

I share an address with another stockholder, and we received only one paper copy of the proxy materials. How may I obtain an additional copy of the proxy materials?

We have adopted a procedure called “householding,” which the SEC has approved. Under this procedure, we deliver a single copy of the Notice and our proxy materials to multiple stockholders who share the same address unless we have received contrary instructions from one or more of such stockholders. This procedure reduces our printing costs, mailing costs, and fees. Stockholders who participate in householding will continue to be able to access and receive separate proxy cards. Upon written or oral request, we will promptly deliver a separate copy of the Notice and our proxy materials to any stockholder at a shared address to which we delivered a single copy of any of these materials. To receive a separate copy, or, if a stockholder is receiving multiple copies and wish to request that we only send a single copy of the Notice and our proxy materials, such stockholder may contact us at the following address:firm, which is assisting us in the solicitation of proxies:

Broadridge Financial Solutions

Attention: Householding Department

51 Mercedes Way

Edgewood, New York 11717

Tel: 1 (866) 540-7095

Street name stockholders may contact their broker, bank or other nominee to request information about householding.

What is the deadline to propose actions for consideration at next year’s annual meeting of stockholders or to nominate individuals to serve as directors?

Stockholder Proposals

Stockholders may present proper proposals for inclusion in our proxy statement and for consideration at the next annual meeting of stockholders by submitting their proposals in writing to our Secretary in a timely manner.

For a stockholder proposal to be considered for inclusion in our proxy statement for our 20192020 annual meeting of stockholders, our Secretary must receive the written proposal at our principal executive offices not later than December 14, 2018.27, 2019. In addition, stockholder proposals must comply with the requirements of Rule 14a-8 regarding the inclusion of stockholder proposals in company-sponsored proxy materials. Stockholder proposals should be addressed to:to our principal executive offices at:

iRhythm Technologies, Inc.

Attention: Secretary

650 Townsend Street, Suite 500

San Francisco, California 94103

Our amended and restated bylaws also establish an advance notice procedure for stockholders who wish to present a proposal before an annual meeting of stockholders but do not intend for the proposal to be included in our proxy statement. Our amended and restated bylaws provide that the only business that may be conducted at an annual meeting of stockholders is business that is (i) specified in our proxy materials with respect to such meeting, (ii) otherwise properly brought before such meeting by or at the direction of our Board of Directors, or (iii) properly brought before such meeting by a stockholder of record entitled to vote at the annual meeting who has delivered timely written notice to our Secretary, which notice must contain the information specified in our amended and restated bylaws. To be timely for our 20192020 annual meeting of stockholders, our Secretary must receive the written notice at our principal executive offices:

In the event that we hold our 20192020 annual meeting of stockholders more than 30 days before or more than 60 days after the one-year anniversary of the Annual Meeting, notice of a stockholder proposal that is not intended to be included in our proxy statement must be received no earlier than the close of business on the 120th day before our 20192020 annual meeting of stockholders and no later than the close of business on the later of the following two dates:

If a stockholder who has notified us of his, her or its intention to present a proposal at an annual meeting does not appear to present his, her or its proposal at such annual meeting, we are not required to present the proposal for a vote at such annual meeting.

Nomination of Director Candidates

You may propose director candidates for consideration by our Nominating and Corporate Governance Committee. Any such recommendations should include the nominee’s name and qualifications for membership on our Board of Directors and should be directed to our Secretary at the address set forth above. For additional information regarding stockholder recommendations for director candidates, see “Board of Directors and Corporate Governance—Stockholder Recommendations for Nominations to the Board of Directors.”

In addition, our amended and restated bylaws permit stockholders to nominate directors for election at an annual meeting of stockholders. To nominate a director, the stockholder must provide the information required by our amended and restated bylaws. In addition, the stockholder must give timely notice to our Secretary in accordance with our amended and restated bylaws, which, in general, require that the notice be received by our Secretary within the time periods described above under “Stockholder Proposals” for stockholder proposals that are not intended to be included in a proxy statement.

Availability of Bylaws

A copy of our amended and restated bylaws may be obtained by accessing our public filings on the SEC’s website at www.sec.gov. You may also contact our Secretary at our principal executive offices for a copy of the relevant bylaw provisions regarding the requirements for making stockholder proposals and nominating director candidates.

BOARD OF DIRECTORS AND CORPORATE GOVERNANCE

Our business affairs are managed under the direction of our Board of Directors, which is currently composed of eight members. Our directors are independent within the meaning of the listing standards of The NASDAQ Stock Market. Our Board of Directors is divided into three staggered classes of directors. At each annual meeting of stockholders, a class of directors will be elected for a three-year term to succeed the same class whose term is then expiring.Vijay K. Lathi, one of our Class II directors, is not standing for re-election at the Annual Meeting.

The following table sets forth the names, ages as of April 13, 2018,25, 2019, and certain other information for each of the directors with terms expiring at the Annual Meeting (who are also nominees for election as a director at the Annual Meeting) and for each of the continuing members of our Board of Directors:

Nominees for Director

C. Noel Bairey Merz, M.D has served as a Director of iRhythm since April 2018. Dr. Bairey Merz has been the Medical Director of the Preventive and Rehabilitative Center at the Cedars-Sinai Medical Center in Los Angeles, California, since 1991. She also has been the Medical Director and Endowed Chair of the Barbra Streisand Women’s Heart Center at the Smidt Cedars-Sinai Heart Institute since 2001, and a Professor of Medicine at Cedars-Sinai Medical Center and the David Geffen School of Medicine at the University of California at Los Angeles. From 2005 to 2009, she served on the Scientific Advisory Board of CV Therapeutics, Inc. She also has extensive experience on nonprofit boards, councils, and guideline panels including the American College of Cardiology, the American Heart Association and the National Heart, Lung, and Blood Institute. Since 2016, Dr. Bairey Merz has been serving on multiple editorial boards including the Journal of the American College of Cardiology, Circulation, and European Heart Journal. Dr. Bairey Merz holds a B.A. (Honors) in Biological Sciences from the University of Chicago and an M.D. (Honors) from Harvard Medical School. She completed her training in Internal Medicine at the University of California, San Francisco, and Cardiology at Cedars-Sinai Medical Center. 

We believe that Dr. Bairey Merz is qualified to serve as a member of our Board of Directors because of her medical experience and her experience with for-profit and non-profit organizations. 

Mark J. Rubash has served as a member of our Board of Directors since March 2016. Mr. Rubash is a Strategic Advisor at Eventbrite, Inc., a privately-held e-commerce company, where he previously served as the Chief Financial Officer from June 2013 to November 2016. Prior to Eventbrite, Mr. Rubash was the Chief Financial Officer at HeartFlow, Inc., a privately-held medical device company, which he joined in March 2012, and at Shutterfly, Inc., a publicly-held e-commerce company, which he joined in November 2007. Mr. Rubash was also the Chief Financial

Officer of Deem, Inc. (formerly, Rearden Commerce), a privately-held e-commerce company, from August 2007 to November 2007. From February 2007 to August 2007, Mr. Rubash was a Senior Vice President at Yahoo! Inc. and he held various senior finance positions at eBay Inc. from February 2001 to July 2005. Prior to that, Mr. Rubash was an audit partner at PricewaterhouseCoopers LLP, where he was most recently the Global Leader for their Internet Industry Practice and Managing Partner for their Silicon Valley Software Industry Practice. Mr. Rubash has served as a member of the Board of Directors and Chairman of the Audit Committee of Intuitive Surgical, Inc., a medical device company, since October 2007, as a member of the Board of Directors and Chairman of the Audit Committee of Line 6, Inc., a music technology company, from April 2007 to January 2014, as a member of the Board of Directors and Audit Committee of IronPlanet, Inc., a privately-held e-commerce platform for used heavy equipment, from March 2010 to May 2017, and as Audit Committee chair from October 2015 to May 2017. Mr. Rubash received his B.S. in Accounting from California State University, Sacramento.

We believe that Mr. Rubash is qualified to serve as a member of our Board of Directors because of his financial expertise and his experience with private and public company financial accounting matters and risk management.

Continuing Directors

Bruce G. Bodaken has served as a Director of iRhythm since July 2017. Mr. Bodaken served as Chairman and CEO of Blue Shield of California from 2000 to 2012, where he was responsible for strategy and management of California’s third largest insurer. He previously served as Blue Shield of California’s President and COO from 1996 to 2000. Mr. Bodaken has served on the Board of Directors of Rite Aid Corporation since May 2013 and on the Board of Directors of Wageworks, Inc. since September 2005. Mr. Bodaken holds a M.A. from the University of Colorado and a B.A. from Colorado State University.

We believe that Mr. Bodaken is qualified to serve as a member of our Board of Directors because of his extensive business experience in the healthcare industry.

Ralph Snyderman, M.D., has served as a Director of iRhythm since July 2017. Dr. Snyderman is Chancellor Emeritus, James B. Duke Professor of Medicine, and Director of the Center for Research on Personalized Health Care at Duke University. From 1989 to 2004, he served as Chancellor for Health Affairs at Duke and was the founding CEO and President of the Duke University Health System. Simultaneously, from 2006 to 2009, he was a venture partner with New Enterprise Associates, a venture capital firm. Dr. Snyderman currently serves on the boards of CareDx, Inc., Liquida Technologies, Inc., Sengenix, Inc., Linus Oncology, Inc., Veritas Collaborative Holdings, and Essential Health Solutions, Inc. He previously served on the Board of Directors of The Procter and Gamble Company (P&G), Pharmaceutical Product Development, LLC (PPD), Trevena, Inc., Crescendo Bioscience, Inc. and Targacept, Inc. Dr. Snyderman is a member of the Association of American Physicians, where he served as president from 2003 to 2004, the Association of American Medical Colleges, where he served as chair from 2001 to 2002, the National Academy of Medicine, and the American Academy of Arts & Sciences. Dr. Snyderman holds a B.S. in Pre-Medical Studies from Washington College and an M.D. from the State University of New York, Downstate Medical Center. He completed his internship and residency in Medicine at Duke University.

We believe that Dr. Snyderman is qualified to serve as a member of our Board of Directors because of his extensive experience serving on the boards of public and private companies and his knowledge of the healthcare industry.

Kevin M. King has served as our President, Chief Executive Officer and a member of our Board of Directors since July 2012. Mr. King has nearly three decades of experience in the healthcare and IT industries in leadership roles. In January 2007, Mr. King joined Affymetrix, Inc., a publicly traded technology innovator in the field of genetic analysis, as President of Life Sciences Business and Executive Vice President. Mr. King was promoted to President of Affymetrix in September 2007 and then served as President and Chief Executive Officer and a director of Affymetrix from January 2009 until June 2011, leading Affymetrix on a growth strategy into new markets for downstream validation and molecular diagnostics and overseeing several acquisitions. Prior to Affymetrix, from February 2005 until June 2006, Mr. King served as President and Chief Executive Officer of Thomson Healthcare, an information services business which focused on a range of healthcare-related businesses. From March 1997 until November 2004, Mr. King was a senior executive at GE Healthcare, where he led several business units including Magnetic Resonance Imaging and Global Clinical Systems Business. Mr. King began his career at HP’s Medical Products Group and

during his 14-year tenure held leadership roles in Sales, Marketing, R&D, and Business Development. Mr. King holds a B.A. in Economics and Biology from the University of Massachusetts and holds an M.B.A. from New Hampshire College.

We believe that Mr. King is qualified to serve as a member of our Board of Directors because of his extensive business experience and knowledge of digital healthcare company operations, and his experience working with companies, regulators and other stakeholders in the medical industry.

Raymond W. Scott has served as a member of our Board of Directors since December 2013. Mr. Scott has been the Chairman of the board at eHealth Technologies, Inc. since June 2014, and the Chairman of the board at Health Level, Inc., since January 2013. He has served as a member of the board directors of Health Fidelity, Inc. since August 2013, and as a member of the Board of Directors at Stella Technologies, Inc., a healthcare technology provider, since October 2015. Mr. Scott co-founded Axolotl Corporation in 1995 and served as its Chief Executive Officer until its acquisition by United Health Group in August 2010, at which point he became Executive Vice President of Product Strategy for OptumInsight, Inc., a subsidiary of United Health Group. Mr. Scott is a Member of British Computing Society (MBCS), a Chartered Engineer and holds a B.Sc. (Honors) in Mathematics.

We believe that Mr. Scott is qualified to serve as a member of our Board of Directors because of his extensive experience serving on the boards of public and private companies, his knowledge of the healthcare industry, and his financial and business expertise.

Abhijit Y. Talwalkar has served as a member and Chairman of our Board of Directors since May 2016. Mr. Talwalkar is the former President and Chief Executive Officer of LSI Corporation, a leading provider of silicon, systems and software technologies for the storage and networking markets, a position he held from May 2005 until the completion of LSI’s merger with Avago Technologies in May 2014. From 1993 to 2005, Mr. Talwalkar was employed by Intel Corporation. At Intel, he held a number of senior management

positions, including Corporate Vice President and Co-General Manager of the Digital Enterprise Group, which was comprised of Intel’s business client, server, storage and communications business, and Vice President and General Manager for the Intel Enterprise Platform Group..Group. Prior to joining Intel, Mr. Talwalkar held senior engineering and marketing positions at Sequent Computer Systems, a multiprocessing computer systems design and manufacturer, Bipolar Integrated Technology, Inc., a VLSI bipolar semiconductor company, and Lattice Semiconductor Inc., a service driven developer of programmable design solutions. Mr. Talwalkar has served on the Board of Directors for Advanced Micro Devices, a leading provider of high-performance computing, graphics, and visualization solutions since August 2017. Since March 2017, Mr. Talwalkar has served as a member of the Board of Directors of TE Connectivity Ltd. and previously served as an advisor to the Board of Directors since August 2016. Since 2011, Mr. Talwalkar has served on the Board of Directors of Lam Research Corporation and has previously served as a member of the Board of Directors of LSI from May 2005 to May 2014 and the U.S. Semiconductor Industry Association, a semiconductor industry trade association, from May 2005 to May 2014. Since January 2016, he has served as a member of the Board of Directors of Virtual Power Systems, Inc. He has served as the chairman of the Bay Area chapter of the nationwide nonprofit organization Friends of the Children since January 2015. He holds a B.S. in Electrical Engineering from Oregon State University.

We believe that Mr. Talwalkar is qualified to serve as Chairman of our Board of Directors because of his experience in leadership roles at major technology companies and his years of experience serving on public company boards.

Continuing Directors

Kevin M. KingNon-Continuing has served as our President, Chief Executive Officer and a member of our Board of Directors since July 2012. Mr. King has nearly three decades of experience in the healthcare and IT industries in leadership roles. In January 2007, Mr. King joined Affymetrix, Inc., a publicly traded technology innovator in the field of genetic analysis, as President of Life Sciences Business and Executive Vice President. Mr. King was promoted to President of Affymetrix in September 2007 and then served as President and Chief Executive Officer and a director of Affymetrix from January 2009 until June 2011, leading Affymetrix on a growth strategy into new markets for downstream validation and molecular diagnostics and overseeing several acquisitions. Prior to Affymetrix, from February 2005 until June 2006, Mr. King served as President and Chief Executive Officer of Thomson Healthcare, an information services business which focused on a range of healthcare-related businesses. From March 1997 until November 2004, Mr. King was a senior executive at GE Healthcare, where he led several business units including Magnetic Resonance Imaging and Global Clinical Systems Business. Mr. King began his career at HP’s Medical Products Group and during his 14-year tenure held leadership roles in Sales, Marketing, R&D, and Business Development. Mr. King holds a B.A. in Economics and Biology from the University of Massachusetts and holds an M.B.A. from New Hampshire College.

Vijay K. LathiWe believe that Mr. King is qualified to serve as a member of our Board of Directors because of his extensive business experience and knowledge of digital healthcare company operations, and his experience working with companies, regulators and other stakeholders in the medical industry.

Raymond W. Scott has served as a member of our Board of Directors since April 2011.December 2013. Mr. Lathi is a Managing DirectorScott has been the Chairman of the board at New Leaf Venture Partners, a venture capital firm that invests primarily in healthcare technology,eHealth Technologies, Inc. since June 2014, and concentrates primarily on information convergence and diagnostics investments. Mr. Lathi is a founderthe Chairman of New Leaf Venture Partners in 2005. Prior to New Leaf, Mr. Lathi workedthe board at Health Level, Inc., since January 2013. He has served as a partner atmember of the Sprout Group,board directors of Health Fidelity, Inc. since August 2013, and as a venture capitalist affiliatemember of Credit Suisse AG. Prior to joining Sprout, Mr. Lathi worked as an analyst in the Healthcare Venture Capital Group at Robertson Stephens & Co. and Cornerstone Research & Development. In the past Mr. Lathi has also served on the Board of Directors of CareDx,at Stella Technologies, Inc., Relypsa,a healthcare technology provider, since October 2015. Mr. Scott co-founded Axolotl Corporation in 1995 and served as its Chief Executive Officer until its acquisition by United Health Group in August 2010, at which point he became Executive Vice President of Product Strategy for OptumInsight, Inc., a subsidiary of United Health Group. Mr. Scott is a Member of British Computing Society (MBCS), a Chartered Engineer and Oxford Immunotec Global PLC.holds a B.Sc. (Honors) in Mathematics.

We believe that Mr. Scott is qualified to serve as a member of our Board of Directors because of his extensive experience serving on the boards of public and private companies, his knowledge of the healthcare industry, and his financial and business expertise.

C. Noel Bairey Merz, M.D has served as a Director of iRhythm since April 2018. Dr. Bairey Merz has been the Medical Director of the Preventive and Rehabilitative Center at the Cedars-Sinai Medical Center in Los Angeles, California, since 1991. She also has been the Medical Director and Endowed Chair of the Barbra Streisand Women’s Heart Center at the Smidt Cedars-Sinai Heart Institute since 2001, and a Professor of Medicine at Cedars-Sinai Medical Center and the David Geffen School of Medicine at the University of California at Los Angeles. From 2005 to 2009, she served on the Scientific Advisory Board of CV Therapeutics, Inc. She also has extensive experience on nonprofit boards, councils, and guideline panels including the American College of Cardiology, the American Heart Association and the National Heart, Lung, and Blood Institute. Since 2016, Dr. Bairey Merz has been serving on multiple editorial boards including the Journal of the American College of Cardiology, Circulation, and European Heart Journal. Dr. Bairey Merz holds a B.A. (Honors) in Biological Sciences from the University of Chicago and an M.D. (Honors) from Harvard Medical School. She completed her training in Internal Medicine at the University of California, San Francisco, and Cardiology at Cedars-Sinai Medical Center. 

We believe that Dr. Bairey Merz is qualified to serve as a member of our Board of Directors because of her medical experience and her experience with for-profit and non-profit organizations. 

Mark J. Rubash has served as a member of our Board of Directors since March 2016. Most recently, from November 2016 to August 2018, Mr. Lathi holdsRubash served as a Strategic Advisor to Eventbrite, Inc., a privately-held e-commerce company, where he previously served as the Chief Financial Officer from June 2013 to November 2016. Prior to Eventbrite, Mr. Rubash was the Chief Financial Officer at HeartFlow, Inc., a privately-held medical device company, which he joined in March 2012, and at Shutterfly, Inc., a publicly-held e-commerce company, which he joined in November 2007. Mr. Rubash was also the Chief Financial Officer of Deem, Inc. (formerly, Rearden Commerce), a privately-held e-commerce company, from August 2007 to November 2007. From February 2007 to August 2007, Mr. Rubash was a Senior Vice President at Yahoo! Inc. and he held various senior finance positions at eBay Inc. from February 2001 to July 2005. Prior to that, Mr. Rubash was an audit partner at PricewaterhouseCoopers LLP, where he was most recently the Global Leader for their Internet Industry Practice and Managing Partner for their Silicon Valley Software Industry Practice. Mr. Rubash has served as a member of the Board of Directors and Chairman of the Audit Committee of Intuitive Surgical, Inc., a medical device company, since October 2007, as a member of the Board of Directors and Chairman of the Audit Committee of Line 6, Inc., a music technology company, from April 2007 to January 2014, as a member of the Board of Directors and Audit Committee of IronPlanet, Inc., a privately-held e-commerce platform for used heavy equipment, from March 2010 to May 2017, and as Audit Committee chair from October 2015 to May 2017. Mr. Rubash received his B.S. in Chemical EngineeringAccounting from the Massachusetts InstituteCalifornia State University, Sacramento.

We believe that Mr. Rubash is qualified to serve as a member of Technologyour Board of Directors because of his financial expertise and an M.S. from Stanford University in Chemical Engineeringhis experience with private and public company financial accounting matters and risk management.

Director Independence

Our common stock is listed on The NASDAQ Global Select Market. Under the listing standards of The NASDAQ Stock Market, independent directors must comprise a majority of a listed company’s Board of Directors. In addition, the listing standards of The NASDAQ Stock Market require that, subject to specified exceptions, each member of a listed company’s audit, compensation, and Nominating and Corporate Governance Committees be independent. Under the listing standards of The NASDAQ Stock Market, a director will only qualify as an “independent director” if, in the opinion of that listed company’s Board of Directors, that director does not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.

Audit Committee members must also satisfy the additional independence criteria set forth in Rule 10A-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the listing standards of The NASDAQ Stock Market. Compensation Committee members must also satisfy the additional independence criteria set forth in Rule 10C-1 under the Exchange Act and the listing standards of The NASDAQ Stock Market.

Our Board of Directors has undertaken a review of the independence of each of our directors. There are no material proceedings to which any director, officer or affiliate of the company, any owner of record or beneficially of more than 5% of any class of voting securities of the company, any associate of any such director, officer, affiliate of the company, or security holder is a party adverse to the company or any of its subsidiaries or has a material interest adverse to the company or its subsidiary. Based on information provided by each director concerning histheir background, employment and affiliations, our Board of Directors has determined that Messrs. Bodaken, Rubash, Scott, Snyderman, Talwalkar, and Dr.Drs. Bairey Merz and Snyderman do not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director and that each of these directors is “independent” as that term is defined under the listing standards of The NASDAQ Stock Market. In making these determinations, our Board of Directors considered the current and prior relationships that each non-employee director has with our company and all other facts and circumstances our Board of Directors deemed relevant in determining their independence, including the beneficial ownership of our capital stock by each non-employee director, and the transactions involving them described in the section titled “Related Person Transactions.”

Board Leadership Structure

The roles of Chairman of the Board and Chief Executive Officer are currently filled by separate individuals. Our Board of Directors believes that the separation of the offices of the Chairman and Chief Executive Officer is appropriate at this time because it allows our Chief Executive Officer to focus primarily on our business strategy, operations and corporate vision. However, as described in further detail in our corporate governance guidelines, our Board of Directors does not have a policy mandating the separation of the roles of Chairman and Chief Executive Officer, though one can be appointed by the board. Our Board of Directors elects our Chairman and Chief Executive Officer, and each of these positions may be held by the same person or by different people. We believe that it is important that the Board of Directors retain flexibility to determine whether these roles should be separate or combined based upon the board’s assessment of our needs and our leadership at a given point in time.

We believe that independent and effective oversight of our business and affairs is maintained through the composition of our Board of Directors, the leadership of our independent directors and the committees and our governance structures and processes already in place. The Chairman of our Board of Directors is an independent director. In addition, the Board of Directors consists of a majority of independent directors, and the committees of our Board of Directors are composed of a majority of independent directors.

Board Meetings and Committees

During our fiscal year ended December 31, 2017,2018, our Board of Directors held 2422 meetings (including regularly scheduled and special meetings), and each director attended at least 75% of the aggregate of (i) the total number of meetings of our Board of Directors held during the period for which he or she has been a director and (ii) the total number of meetings held by all committees of our Board of Directors on which he or she served during the periods that he or she served.

Although we do not have a formal policy regarding attendance by members of our Board of Directors at annual meetings of stockholders, we strongly encourage our directors to attend. ThreeFour of our board members attended the annual meeting of stockholders in 2017.2018.

Our Board of Directors has established an Audit Committee, a Compensation Committee and a Nominating and Corporate Governance Committee. The composition and responsibilities of each of the committees of our Board of Directors is described below. Members will serve on these committees until their resignation or until as otherwise determined by our Board of Directors.

Audit Committee

Our Audit Committee consists of Messrs. Rubash, Snyderman,Scott, and Talwalkar,Dr. Snyderman with Mr. Rubash serving as the chair. Messrs. Rubash, Snyderman,Scott and TalwalkarDr. Snyderman meet the requirements for independence and financial literacy for Audit Committee members under the listing standards of The NASDAQ Stock Market and SEC rules and regulations. In addition, our Board of Directors has determined that Mr. Rubash is an Audit Committee financial expert within the meaning of Item 407(d) of Regulation S-K under the Securities Act of 1933, as amended. Our Audit Committee is responsible for, among other things:

Our Audit Committee operates under a written charter that satisfies the applicable rules and regulations of the SEC and the listing standards of The NASDAQ Stock Market. A copy of the charter of our Audit Committee is available on our website at www.irhythmtech.com under “Investors—Policies, Procedures and Charters.” During our fiscal year ended December 31, 2017,2018, our Audit Committee held seveneight meetings and took actiondid not act by unanimous written consent once.consent.

Compensation Committee

Our Compensation Committee consists of Messrs. Bodaken, Lathi, Scott,Talwalkar, and Dr. Bairey Merz, with Mr. Bodaken serving as the chair. Each member of our Compensation Committee meets the requirements for independence for Compensation Committee members under the listing standards of The NASDQNASDAQ Stock Market and SEC rules and regulations, including Rule 10C-1 under the Exchange Act. Each member of our Compensation Committee is also a non-employee director, as defined pursuant to Rule 16b-3 promulgated under the Exchange Act, and an outside director, as defined pursuant to Section 162(m) of the Internal Revenue Code.Act. Our Compensation Committee is responsible for, among other things:

$5,000 in November 2018).

All cash payments to non-employee directors, or the Retainer Cash Payments, will be paid quarterly in arrears on a prorated basis.

Equity Compensation. Nondiscretionary, automatic grants of restricted stock units will be made to our non-employee directors.

Any award granted under our outside director compensation policy will fully vest and become exercisable in the event of a change in control, as defined in our 2016 Plan, provided that the grantee remains a director through such change in control. Further, our 2016 Plan, as described below under the section titled “Employee Benefit and Stock Plans,” provides that in the event of a merger or change in control, as defined in our 2016 Plan, each outstanding equity award granted under our 2016 Plan that is held by a non-employee director will fully vest, all restrictions on the shares subject to such award will lapse, and with respect to awards with performance-based vesting, all performance goals or other vesting criteria will be deemed achieved at 100% of target levels, and all of the shares subject to such award will become fully exercisable, if applicable, provided such optionee remains a director through such merger or change in control.

Pursuant to our outside director compensation policy, no non-employee director may be issued, in any fiscal year, cash payments (including the fees under our outside director compensation policy) with a value greater than $200,000, provided that such limit will be $300,000 with respect to any non-employee director who serves in the capacity of chairman of the board, lead outside director or chairman of the Audit Committee at any time during the fiscal year. No non-employee director may be granted, in any fiscal year, equity awards with a grant date fair value (determined in accordance with U.S. generally accepted accounting principles) of greater than $300,000, increased to $500,000 in the fiscal year of his or her initial service as a non-employee director.

Compensation for Fiscal Year 2017

The following table sets forth a summary of the compensation received by our directors that are not Named Executive Officers who received compensation during our fiscal year ended December 31, 2017:

(2)   Value of Stock Awards differs for existing directors due to transition from granting annual awards on individual anniversary service dates to the annual meeting date.

Options and Restricted Stock Units outstanding as of December 31, 2018, held by our non-employee directors were as follows:

Our directors who are also our employees receive no additional compensation for their service as directors. During our fiscal year ended December 31, 2017,2018, Kevin M. King was our employee. See the section titled “Executive Compensation” for additional information about the compensation paid to Mr. King.

PPROPOSALROPOSAL NO. 1

ELECTION OF DIRECTORS

Our Board of Directors is currently composed of eightseven members. In accordance with our amended and restated certificate of incorporation, our Board of Directors is divided into three staggered classes of directors. At the Annual Meeting, twothree Class IIIII directors will be elected for a three-year term to succeed the same class whose term is then expiring.

Each director’s term continues until the election and qualification of his or her successor, or such director’s earlier death, resignation, or removal. Any increase or decrease in the number of directors will be distributed among the three classes so that, as nearly as possible, each class will consist of one-third of our directors. This classification of our Board of Directors may have the effect of delaying or preventing changes in control of our company.

Nominees

Our Nominating and Corporate Governance Committee has recommended, and our Board of Directors has approved, C. Noel Bairey MerzBruce G. Bodaken, Ralph Snyderman, M.D., and Mark J. RubashAbhijit Y. Talwalkar as nominees for election as Class IIIII directors at the Annual Meeting. If elected, each of C. Noel Bairey MerzBruce G. Bodaken, Ralph Snyderman, M.D., and Mark J. RubashAbhijit Y. Talwalkar will serve as Class IIIII directors until our 20212022 annual meeting of stockholders and until their successors are duly elected and qualified. Each of the nominees is currently a director of our company. For information concerning the nominees, please see the section titled “Board of Directors and Corporate Governance.”

If you are a stockholder of record and you sign your proxy card or vote by telephone or over the Internet but do not give instructions with respect to the voting of directors, your shares will be voted “FOR” the election of Dr. Bairey MerzBruce G. Bodaken, Ralph Snyderman, M.D., and Mr. Rubash.Abhijit Y. Talwalkar. We expect that each of Dr. Bairey MerzBruce G. Bodaken, Ralph Snyderman, M.D., and Mr. RubashAbhijit Y. Talwalkar will accept such nomination; however, in the event that a director nominee is unable or declines to serve as a director at the time of the Annual Meeting, the proxies will be voted for any nominee designated by our Board of Directors to fill such vacancy. If you are a street name stockholder and you do not give voting instructions to your broker or nominee, your broker will leave your shares unvoted on this matter.

Vote Required

The election of directors requires a plurality vote of the shares of our common stock present in person or by proxy at the Annual Meeting and entitled to vote thereon to be approved. Broker non-votes will have no effect on this proposal.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR”

EACH OF THE NOMINEES NAMED ABOVE.

PROPOSAL NO. 2

RATIFICATION OF APPOINTMENT OF

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Our Audit Committee has appointed PricewaterhouseCoopers LLP (“PwC”), independent registered public accountants, to audit our consolidated financial statements for our fiscal year ending December 31, 2018.2019. During our fiscal year ended December 31, 2017,2018, PwC served as our independent registered public accounting firm.

Notwithstanding the appointment of PwC and the ratification of such appointment by our stockholders, our Audit Committee, in its discretion, may appoint another independent registered public accounting firm at any time during our fiscal year if our Audit Committee believes that such a change would be in the best interests of our company and our stockholders. At the Annual Meeting, our stockholders are being asked to ratify the appointment of PwC as our independent registered public accounting firm for our fiscal year ending December 31, 2018.2019. Our Audit Committee is submitting the appointment of PwC to our stockholders because we value our stockholders’ views on our independent registered public accounting firm and as a matter of good corporate governance. Representatives of PwC will be present at the Annual Meeting, and they will have an opportunity to make a statement and will be available to respond to appropriate questions from our stockholders.

If our stockholders do not ratify the appointment of PwC, our Board of Directors may reconsider the appointment.

Fees Paid to the Independent Registered Public Accounting Firm

The following table presents fees for professional audit services and other services rendered to us by PwC for our fiscal years ended December 31, 2017 and 2016:

Auditor Independence

In our fiscal year ended December 31, 2017,2018, there were no other professional services provided by PwC that would have required our Audit Committee to consider their compatibility with maintaining the independence of PwC.

Audit Committee Policy on Pre-Approval of Audit and Permissible Non-Audit Services of Independent Registered Public Accounting Firm

Our Audit Committee has established a policy governing our use of the services of our independent registered public accounting firm. Under this policy, our Audit Committee is required to pre-approve all audit and non-audit services performed by our independent registered public accounting firm in order to ensure that the provision of such services does not impair the public accountants’ independence. All fees paid to PwC for our fiscal years ended December 31, 20172018 and 20162017 were pre-approved by our Audit Committee.

Vote Required

The ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm requires the affirmative vote of a majority of the shares of our common stock present in person or by

proxy at the Annual Meeting and entitled to vote thereon. Abstentions will have the effect of a vote AGAINST the proposal and broker non-votes will have no effect.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR”

THE RATIFICATION OF THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP.

PROPOSAL NO. 3

ADVISORY VOTE ON THE FREQUENCY OF ADVISORY VOTES ONTO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION

In accordance with the rules and regulations of the SEC, pursuant to Section 14A of the Exchange Act, we are providing our stockholders with a non-binding,an advisory vote on the frequencyoverall compensation of futureour named executive officers. In accordance with the results of the stockholder vote at the 2018 Annual Meeting, advisory votes on the overall compensation of our named executive officers are held every year.

We are asking shareholders to approve, on an advisory basis, the compensation of our Named Executive Officers (“NEO”NEOs”). Commonly, as disclosed pursuant to Securities and Exchange Commission rules, including in the Compensation Discussion & Analysis, the executive compensation tables and related material included in this proxy statement. This proposal, commonly known as a “Say-When-on-Pay”say-on-pay proposal, this vote gives our stockholdersshareholders the opportunity to express their views on whether future advisory votes onour executive compensation program and policies. The vote is not intended to address any specific item of compensation, but rather to address our overall approach to the compensation of our NEOs should occur once every year, every two years or every three years.described in this proxy statement.

Vote Required

You have four choices for voting onThe advisory vote to approve the following resolution. You can choose whether future advisory votes on NEO compensation shouldof our Named Executive Officers, will be conducted every 1 YEAR, 2 YEARSapproved if the majority of the shares of our common stock present in person or 3 YEARS. You may also ABSTAIN from voting. The frequency that receives the greatest number of votes cast by stockholders on this matterproxy at the Annual Meeting and entitled to vote thereon vote for approval. The result of this vote will be considered the advisory vote of our stockholders. If you elect to abstain from voting on this proposal, the abstention will not have any effect on the advisory vote.

Your vote on this proposal is advisory, and therefore not binding on the company or the Board, and will not be interpreted as overruling a decision by, or creating or implying any additional fiduciary duty for, the Board. Nevertheless, our Board values the opinions of our stockholders and will take into account the outcome of this vote when making future decisions regarding the frequency of holding future advisory votes on the compensation of our NEOs.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE TO HOLD FUTURE ADVISORY VOTES EVERY 3 YEARS ON“FOR” THE APPROVAL OF THE COMPENSATION OF OUR NEOS.

REPORT OF THE AUDIT COMMITTEE

The Audit Committee is a committee of the Board of Directors comprised solely of independent directors as required by the listing standards of The NASDAQ Stock Market and rules and regulations of the SEC. The Audit Committee operates under a written charter approved by the Board of Directors, which is available on the Company’scompany’s website at www.irhythmtech.com under “Investors—Policies, Procedures and Charters.” The composition of the Audit Committee, the attributes 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’scompany’s financial reporting process, the management of the Companycompany is responsible for (1) establishing and maintaining internal controls and (2) preparing the Company’scompany’s consolidated financial statements. The Company’scompany’s independent registered public accounting firm, PricewaterhouseCoopers LLP (“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 the Company’scompany’s consolidated financial statements. These are the fundamental responsibilities of management. In the performance of its oversight function, the Audit Committee has:

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 financial statements be included in the Annual Report on Form 10-K for the fiscal year ended December 31, 20172018 for filing with the Securities and Exchange Commission.

Respectfully submitted by the members of the Audit Committee of the Board of Directors:

Mark J. Rubash (Chair)

Ralph Snyderman, M.D.

Abhijit Y. TalwalkarRaymond W. Scott

This report of the Audit Committee is required by the Securities and Exchange Commission (“SEC”) and, in accordance with the SEC’s rules, will not be deemed to be part of or incorporated by reference by any general statement incorporating by reference this Proxy Statement into any filing under the Securities Act of 1933, as amended (“Securities Act”), or under the Securities Exchange Act of 1934, as amended (“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 identifies certain information about our executive officers as of April 13, 2018.25, 2019. Our executive officers are appointed by, and serve at the discretion of, our Board of Directors. There are no family relationships among any of our directors or executive officers.

For the biography of Mr. King, please see “Board of Directors and Corporate Governance—Continuing Directors.”

Matthew C. Garrett has served as our Chief Financial Officer since January 2013. Mr. Garrett brings more than 20 years of leadership experience in finance, investor relations, business development, and operations to our company. From March 2010 until December 2012, he served as Chief Financial Officer of Navigenics, Inc., a provider of genetic testing for common health conditions, where he led all finance functions, strategic partnerships, and successfully facilitated the sale of the company to Life Technologies Corp. From October 2008 until March 2010, Mr. Garrett served as Director of Business Development at Corventis Inc., a health monitor applications company, where he was responsible for directing corporate operations and business collaborations related to the advancement and promotion of the company’s health monitor applications. From October 2006 until September 2008, Mr. Garrett served as Vice President of Finance, Chief Accounting Officer and Treasurer for Cogentus Pharmaceuticals Inc., a developer of prescription pharmaceutical products. Earlier in his career, Mr. Garrett served as Finance Director in Research & Development and, subsequently, Director of Strategic Marketing and Pricing at Affymetrix, Inc. Prior to Affymetrix, he held various finance roles at Guidant Corporation, a medical technology company focused on cardiac and vascular solutions. Mr. Garrett holds a B.A. in Finance from the University of Iowa, Iowa City and an M.B.A. from the Kelley School of Business, Indiana University Bloomington.

Karim Karti has served as our Chief Operating Officer since July 2018. From January 2016 to July 2018 he served as President and Chief Executive Officer of the Imaging division at GE Healthcare, from 2013 to 2015 he was the Chief Marketing Officer for GE Healthcare, from 2010 to 2013 he served as CEO of the emerging markets division of GE Healthcare, from 2009 to 2010 he served as President and Chief Executive Officer of GE Healthcare in Korea, and from 2006 to 2008 he led the services commercial organization in EMEA. He started his career with Procter & Gamble in Brand Management. Mr. Karti holds an engineering degree from Ecole Centrale de Lyon and completed the entrepreneurship program at Ecole Superieure de Commerce de Lyon.

David A. Vort has served as our Executive Vice President of Sales since January 2014. From April 2012 to December 2013, he served as Vice President of US Sales at InTouch Technologies, Inc., a provider of telemedicine and remote presence solutions. From July 2007 to April 2012, Mr. Vort was at Intuitive Surgical, Inc., the manufacturer of the da Vinci Surgical Robotics system, where he served most recently as Area Vice President of Western Sales. From 2004 until 2007, Mr. Vort was the Revision Business Sales Director for Stryker Corporation. From 1999 until 2004, Mr. Vort held several positions domestically and in Europe for the Global Healthcare Exchange, LLC, where he was a founder. From 1992 until 1997, he held several positions with U.S. Surgical Corporation, prior to its sale to Covidien plc. Mr. Vort holds a B.S. in Political Science from the University of the Pacific.

Derrick SungMark J. Day has served as our Executive Vice President of Strategy and CorporateResearch & Development since May 2015. From 20082012 and has had other leadership roles in Research & Development and systems development since joining in 2007. Previously he worked in Medtronic’s Cardiac Rhythm Disease Management division. Prior to 2015, Dr. Sungthat, Mr. Day was Chief Technical Officer of CarePages, Inc., a blogging site for patients. Mr. Day has an M.B.A. in Marketing from the senior equity research analyst covering the medical devices sector for Sanford C. Bernstein & Co., LLC. From 2004 to 2008, he was DirectorWharton School, University of Marketing and Business Development in Boston Scientific Corp.’s Neuromodulation Division. From 2000 to 2004, Dr. Sung served as a management consultant at The Boston Consulting Group where he advised biopharmaceutical and medical device companies on business strategy, operational effectiveness, and mergers and acquisitions. Dr. Sung began his career in 1994 as a research and development engineer designing heart catheters for Guidant Corporation. Dr. Sung holdsPennsylvania, a Ph.D. in BioengineeringComputation Flow Physics from U.C. San Diego, an M.B.A. from San Diego StateStanford University, and also received an M.S. from Stanford, and a B.S.B.Sc. from Queen’s University, both in Mechanical Engineering from Stanford University.Engineering.

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

This Compensation Discussion and Analysis describes the compensation program for our Named Executive Officers. During 2017,2018, these individuals were:

This Compensation Discussion and Analysis describes the material elements of our executive compensation program during 2017. It also2018, and provides an overview of our executive compensation philosophy and objectives. Finally, it analyzes how and why the Compensation Committee of our Board of Directors (the “Compensation Committee”) arrived at the specific compensation decisions for our executive officers, including our Named Executive Officers, for 2017,2018, detailing the key factors that the Compensation Committee considered in determining their compensation.

Management Changes in 2018

Mr. Karti joined the company as our Chief Operating Officer on July 23, 2018.

Executive Summary

At iRhythm, we see a new healthcare landscape — where patients can count on timely diagnoses and personalized treatment and where care teams are so confident in diagnostic results that they turn their focus to patient care rather than administrative tasks. We believe in precision medicine, informed by state-of-the-art artificial intelligence (“AI”) technology, delivered through an integrated partnership between healthcare leaders dedicated to providing the best care experience each patient deserves. At iRhythm, we are at the forefront of this new landscape and we are determined to lead the industry into the next era of cardiac care.

We are a commercial-stage digital healthcare company redefining the way cardiac arrhythmias are clinically diagnosed by combining our wearable bio-sensing technology with cloud-based data analytics, and machine-learningpowered by deep-learning capabilities. Our goal is to be the leading provider of first-line ambulatory electrocardiogram (“ECG”) monitoring for patients at risk for arrhythmias.Supported by over 26 peer reviewed clinical studies, We have createdbuilt a uniquecomplete and superior diagnostic service platform calledto streamline the Zioprocess of arrhythmia detection and management and remove administrative burden from busy clinical practices. Our service which combines a simple, patient-friendly monitoring experience with deep learning AI capabilities and expert human curation to provide physicians with a comprehensive understanding of their patients’ heart health. Our proprietary analysis is proven to give doctors diagnostic accuracy and reliability equivalent to that of an easy-to-wear and unobtrusive biosensor that can be worn for up to 14 days with powerful proprietary algorithms that distill data from millions of heartbeats into clinically actionable information. We believe thatexpert cardiologist, giving clinicians the Zio service allows physiciansconfidence to diagnose many arrhythmias more quicklyusing a single test and efficiently than traditional technologiesallowing for informed treatment decisions for their patients. Our high-yield, cost-effective solution will help healthcare institutions achieve superior clinical and avoid multiple indeterminate test cycles.operational efficiency as they build their cardiology services into world-class programs. Early detection of heart rhythm disorders, such as atrial fibrillation and other clinically relevant arrhythmias, allows for appropriate and timely medical intervention helping toand helps avoid more serious downstream medical events, including stroke.

Since receiving clearance from the Food and Drug Administration in 2009, we have provided the Zio service to over one million patients and have collected over 250approximately 400 million hours of curated heartbeat data, creating what we believe to be the world’s largest repository of ambulatory ECGelectrocardiogram patient data. This data provides us with a competitive advantage by informing our proprietary machine-learneddeep-learned algorithms, which may enable operating efficiencies, gross margin improvement and business scalability. We believe the Zio service is well aligned with the goals of the U.S. healthcare system: improving population health, enhancing the patient care experience and reducing per-capita cost.cost and improving the work life of health care providers.

During 2017,2018, we continued to make significant progress on our key business objectives, not only achieving, but in many cases,

surpassing the goals we set for the year. Our financial and operational highlights for 20172018 included:

Based on our overall operating environment and business results, the Compensation Committee took the following key actions with respect to the compensation of our Named Executive Officers for 2017:
2018:

Compensation Arrangements with Mr. Karti – In connection with his appointment as our COO, we entered into an employment offer letter dated June 13, 2018 (the “Employment Letter”) with Mr. Karti. Pursuant to the Employment Letter and certain actions taken by our Compensation Committee, our initial compensation arrangements with Mr. Karti were as follows:

In addition, Mr. Karti has entered into a change in control and severance agreement (the “Severance Agreement”), effective as of July 23, 2018, which provides for specified payments and benefits in the event that (a) he resigns for “good reason” (as defined in the Severance Agreement) or if his employment is terminated, provided that such termination is other than for “cause” (as defined in the

Severance Agreement), death, or disability, or (b) within three months before and prior to 12 months following a change in control of the company (the “Change in Control Period”), he resigns for good reason, or his employment is terminated, provided that such termination is other than for “cause,” death, or disability. The payments and benefits to be received upon a qualifying termination of employment outside the Change in Control Period are continued payment of base salary and paid COBRA benefits for nine months. The payments and benefits upon a qualifying termination of employment within the Change in Control Period are continued payment of base salary and COBRA benefits for 15 months, a lump sum payment equal to 100% of his target bonus in effect for the fiscal year in which the termination occurs, and accelerated vesting as to 100% of his unvested stock options and/or restricted stock awards. To receive the foregoing severance payments and benefits, Mr. Karti is obligated to execute a release of claims against us and continue to comply with the terms of applicable proprietary agreements and other post-employment restrictive covenants.

Mr. Karti’s employment arrangements were negotiated on our behalf by our CEO and approved by our Compensation Committee. In establishing his initial compensation arrangements, we took into consideration the requisite experience and skills that a qualified candidate would need to manage a growing business in a dynamic and ever-changing environment, the competitive market for similar positions at other comparable companies based on a review of compensation survey data and the need to integrate him into the executive compensation structure that we had developed since our initial public offering of our equity securities, balancing both competitive and internal equity considerations. For a summary of the material terms and conditions of Mr. Karti’s employment offer letter, see “Executive Compensation Tables — Employment Arrangements” below.

2019 Executive Compensation Highlights

Our long term incentive structure has historically included equity grants for executives in a mix of time-based options to purchase shares of common stock and RSUs, which we believe effectively aligned the interests of our executives with those of our stockholders. In November 2018, after review of market data and our total rewards programs, the Compensation Committee approved a change to our mix of equity awards for executives to grant a combination of time-based and performance-based RSU (PRSU) awards and eliminate awards in the form of stock options. Executive long-term incentive awards granted in February 2019 were approved under this new program, where 75% of the value of the award was performance-based and 25% of the value of the award was time-based.

The performance equity program has a 2-year performance period measuring target revenue CAGR achievement for fiscal year 2020 compared to fiscal year 2018. There is a minimum performance threshold of 75% to earn 50% of target, and a maximum threshold of 125% achieved to earn 200% of target. The exact number of earned shares will be determined based on linear interpolation using the revenue CAGR as it falls between the minimum and maximum thresholds outlined above. We believe the addition of PRSU awards will provide additional and ongoing alignment of executives’ interests with our stockholders’ interests, emphasizes long-term financial performance and help retain executive talent.

We view our compensation practices as a tool to align our executive officers, including our Named Executive Officers, with our strategic goals and reward high performance, collaboration and accountability. We believe our executive compensation program is reasonable, competitive and appropriately balances the goals of attracting, motivating, rewarding and retaining our Named Executive Officers with the goal of aligning their interests with those of our stockholders. To ensure this alignment and to motivate and reward individual initiative and effort, a substantial portion of our Named Executive Officers’ target total direct compensation is both performance-based and “at-risk.”

In 2017,2018, we emphasized performance-based compensation that appropriately rewards our Named Executive Officers through two separate compensation elements:

In addition, in 2018 we granted options to purchase shares of our common stock and RSU awards that will be settled for shares of our common stock, which will reward them for increasing the market price of our common stock over a multi-year period.

These variable pay elements ensure that a substantial portion of our Named Executive Officers’ target total direct compensation for 20172018 is contingent (rather than fixed) in nature, with the amounts ultimately payable subject to variability above or below grant levels commensurate with our actual performance.

The pay mix for our CEO and our other Named Executive Officers during 20172018 reflected this “pay-for-performance” design as follows:

We believe that our compensation design provides balanced incentives for our Named Executive Officers to meet our business objectives and drive our long-term growth. To ensure we remain faithful to our compensation philosophy, the Compensation Committee regularly evaluates the relationship between the reported values of the equity awards granted to our executive officers, the amount of compensation realizable (and, ultimately, realized) from such awards in subsequent years and performance over this period.

We endeavor to maintain sound governance standards consistent with our executive compensation policies and practices. The Compensation Committee evaluates our executive compensation program on a regular basis to ensure that it is consistent with our short-term and long-term goals given the dynamic nature of our business and the market in which we compete for executive talent. The following summarizes our executive compensation and related policies and practices:

At the Annual Meeting of Stockholders to which this Proxy Statement relates, we will be conducting aour first non-binding vote on the frequency of future non-binding advisory votes on the compensation of our Named Executive Officers (commonly known as a “Say-When-on-Pay”“Say-on-Pay” vote). See Proposal 3 in this Proxy Statement.

At our 2018 Annual Meeting of Stockholders, we conducted a non-binding stockholder advisory vote on the frequency of future Say-on-Pay votes (commonly known as a “Say-When-on-Pay” vote). Our stockholders expressed a preference for holding future Say-on-Pay votes on an annual, rather than a biennial or triennial, basis. In recognition of this preference and other factors considered, our Board of Directors determined that, until the next Say-When-on-Pay vote, we will hold annual Say-on-Pay votes.

We value the opinions of our stockholders. Our Board of Directors and the Compensation Committee will consider the outcome of future advisory votes on the compensation of our Named Executive Officers, as well as feedback received throughout the year, when making compensation decisions for our executive officers.

Executive Compensation Philosophy

Our overarching compensation philosophy is highly focused on rewarding individual performance while ensuring alignment of top performers to current market practices. Consistent with this philosophy, we have designed our executive compensation program to achieve the following primary objectives:

Executive Compensation Program Design

Consistent with our compensation philosophy, our current practice is to combine a mixture of compensation elements that balance achievement of our short-term goals with our long-term performance. We provide short-term incentive compensation opportunities in the form of an annual cash bonus plan, which focuses on our yearly operating results, and long-term incentive compensation opportunities are provided in the form of equity awards, including:

We do not have a specific policy on the percentage allocation between short-term and long-term compensation elements. While the pay mix may vary from year to year, the ultimate goal is to achieve our compensation objectives as described above.

Governance of Executive Compensation Program

Role of the Compensation Committee

The Compensation Committee discharges many of the responsibilities of our Board of Directors relating to the compensation of our executive officers, including our Named Executive Officers. The Compensation Committee also reviews and provides specific compensation recommendations to our Board of Directors relating to the independent members of our Board of Directors. The Compensation Committee has overall responsibility for overseeing our compensation and benefits policies generally, and overseeing and evaluating the compensation plans, policies and practices applicable to our CEO and other executive officers.

The Compensation Committee has authority to make decisions regarding the compensation of our Named Executive Officers (other than theour CEO), and makes recommendations to the independent members of the full Board of Directors regarding the compensation of theour CEO.  In 2017, theThe Compensation Committee chose, based onalso reviews and provides specific compensation recommendations to our former practice as a private company, to bring their recommendations for all Named Executive Officer compensation changes to the Board of Directors for final review and approval (withrelating to the CEO recusing himself). For 2018 and beyond, the Compensation Committee will make final decisions regarding the compensationnon-employee independent members of our Named Executive Officers, excluding the CEO.Board of Directors.

The Compensation Committee retains a compensation consultant that specializes in executive compensation standards and practices (as described below) to provide support in its review and assessment of our executive compensation program.

Compensation-Setting Process

The Compensation Committee develops recommendations for the target total direct compensation opportunities, as well as each element of these opportunities, of our CEO and other Named Executive Officers. The Compensation Committee does not use a single method or measure in formulating its recommendations, nor does it establish specific targets for the total direct compensation of our Named Executive Officers.

The Compensation Committee reviews the base salary levels, annual cash bonus opportunities and long-term

incentive compensation opportunities of our Named Executive Officers at the beginning of the calendar year, or more frequently as warranted. When formulating its recommendations for the value of each compensation element and the target total direct compensation of our Named Executive Officers and determining the compensation of our Named Executive Officers, the Compensation Committee and our Board of Directors, respectively, consider the following factors:

These factors provide the framework for compensation decision-making and final decisions regarding the compensation opportunity for each Named Executive Officer. Neither the Compensation Committee, nor our Board of Directors, assigns relative weights or rankings to such factors. No single factor is determinative in setting pay levels, nor was the impact of any factor on the determination of pay levels quantifiable. The Compensation Committee’s or our Board of Directors’ consideration of any particular factor may range from inapplicable to significant, depending upon the individual and period under consideration. Rather, the

Compensation Committee and our Board of Directors rely upon their members’ knowledge and judgment in assessing the various qualitative and quantitative inputs they receive as to each individual and makes compensation decisions accordingly.

Role of Chief Executive OfficerManagement

In discharging its responsibilities, the Compensation Committee works with members of our management, including our CEO and Vice President of Human Resources.Resources, who attend committee meetings. Our management assists the Compensation Committee and our Board of Directors by providing information on corporate and individual performance, market compensation data and management’s perspective on compensation matters. The Compensation Committee solicits and reviews our CEO’s recommendations and proposals with respect to program structures, as well as his recommendations for adjustments to annual cash compensation, long-term incentive compensation opportunities and other compensation-related matters for our Named Executive Officers (other than himself) based on his evaluation of their performance for the prior year.

Each year, our CEO reviews the performance of our other Named Executive Officers based on such individual’s level of success in accomplishing the business objectives established for him for the prior year and his overall performance during that year, and then shares these evaluations with, and makes recommendations to, the Compensation Committee for each element of compensation as described above. The annual business objectives for each such Named Executive Officer are developed through mutual discussion and agreement between our CEO and the Named Executive Officers and are reviewed with our Board of Directors.

The Compensation Committee reviews and discusses management proposals and recommendations with our CEO and Vice President of Human Resources and considers them as one factor in formulating the recommendations for the compensation of our CEO and our other Named Executive Officers. Our CEO recuses himself from all discussions and recommendations regarding his own compensation.

Role of Compensation Consultant

The Compensation Committee engages an external compensation consultant to assist it by providing information, analysis and other advice relating to our executive compensation program and the decisions resulting from its annual executive compensation review. For 2017,2018, the Compensation Committee engaged Compensia, Inc., a national compensation consulting firm (“Compensia”), as its compensation consultant to advise it on executive compensation matters. Services included competitive market pay practices for senior executives and data analysis and selection of the compensation peer group. Compensia’s analysis and advice are key components of the Compensation Committee’s determination of appropriate and competitive compensation for our Named Executive Officers.

For 2017,2018, Compensia regularly attended meetings of the Compensation Committee and the scope of its engagement included:

The terms of Compensia’s engagement include reporting directly to the Compensation Committee and to the Compensation Committee chairman. Compensia also coordinates with our management for data collection and job matching for our executive officers. In 2017,2018, they did not provide any other services to us. The Compensation Committee has evaluated Compensia’s independence pursuant to the listing standards of the NASDAQ and the relevant SEC rules and has determined that no conflict of interest has arisen as a result of the work performed.

For purposes of comparing our executive compensation against the competitive market, the Compensation Committee reviews and considers the compensation levels and practices of a group of peer companies. This compensation peer group consists of life sciences companies that are similar to us in terms of revenue, market capitalization, stage of development, geographical location and number of employees.

In December 2016, the Compensation Committee directed Compensia to review our compensation peer group and evaluate each peer group company for comparability to serve as a reference for purposes of subsequent executive compensation deliberations. In evaluating the companies, Compensia considered the following criteria:

Based on a review of the analysis prepared by Compensia, the Compensation Committee approved the following compensation peer group:

2017 Compensation Peer Group

This compensation peer group was used by the Compensation Committee for the remainder of 2016 and during much of 2017 as a reference for understanding the competitive market for executive positions in our industry sector.

In August 2017, the Compensation Committee, with the assistance of Compensia, reviewed and updated our compensation peer group to reflect changes in our market capitalization, to recognize our evolving business focus and to account for merger and acquisition activity of peer companies.activity. In evaluating the companies comprising the compensation peer group at that time,for 2018, Compensia considered the following criteria:

Based on a review of the analysis prepared by Compensia, the Compensation Committee approved a revised compensation peer group for the remainder of 20172018 compensation decisions, consisting of the following companies:

Late 2017 – 2018 Compensation Peer Group

Based on the assessment completed by Compensia, the Compensation Committee made several changes to our 2017 peer group, removing five companies and adding four new companies. ConforMIS, Penumbra and Tandem Diabetes Care were removed from our peer group, as their market capitalizations were outside our stated range. LDR Holdings and Vascular Solutions were removed from our peer group due to the fact that they had been acquired and were no longer standalone public companies. Abaxis, Atrion, BioTelemetry, and OraSure Technologies were all added to the peer group for 2018 on the basis of their similarity to us in size, market capitalization, and industry sector.

The Compensation Committee uses data drawn from our compensation peer group, as well as data from the Radford Global Life Sciences and Global Technology surveys, to evaluate the competitive market when determining the total direct compensation packages for our Named Executive Officers, including base salary, target annual cash incentive award opportunities and long-term incentive compensation opportunities. Given our objective of attracting, retaining, motivating, and rewarding a superior team of executive officers and employees, we aim to provide a total compensation package that is above the median as compared to peers. Wepeers, and we emphasize equity incentive compensation to more effectively tie our Named Executive Officers' and employees' interests to those of our stockholders. In light of this, when undertaking its competitive analysis, the Compensation Committee reviews competitive market data generally at the 50th percentile for base salary, and total cash compensation (base salary plus annual bonus) and the 75th percentile for long-term incentive compensation. This competitive analysis is one factor, among others, taken into account by the Compensation Committee in assessing compensation levels and recommending changes to compensation or additional awards.

The Compensation Committee reviews our compensation peer group at least annually and makes adjustments to its composition if warranted, taking into account changes in both our business and the businesses of the companies in the peer group.

Individual Compensation Elements

In 2017,2018, the principal elements of our executive compensation program, and the purposes for each element, were as follows:

We also provide certain post-employment compensation payments and benefits and other benefits, such as health and welfare programs, including a Section 401(k) retirement savings plan.plan with a company match of a modest portion of the amount contributed by the employee. In general, executive officers participate in the standard employee benefit programs available to our other full-time employees.employees generally.

Base Salary

Base salary represents the fixed portion of the compensation of our Named Executive Officers and is an important element of compensation intended to attract and retain highly-talented individuals.

Using the competitive market data provided by its compensation consultant Compensia, the Compensation Committee reviews and develops a recommendationrecommendations for appropriate adjustments to the base salariessalary of our CEO and determines the base salaries of our other Named Executive Officers as part of its annual executive compensation review. In addition, the base salaries of our Named Executive Officers may be adjusted in the event of a promotion or significant change in responsibilities.

In February 2017,2018, the Compensation Committee reviewed the base salaries of our Namedthen-Named Executive Officers. The Compensation Committee recommended to and received approval from the independent members of our Board of Directors that the base salary of our CEO be increased by 10%.maintained at its 2017 level. The Board of Directors determined his current salary was sufficiently competitive to provide retention value and allowed continued focus on weighting cash compensation on performance-based incentives. In addition, the Compensation Committee recommended todetermined that our Board of Directors that certain of our Namedother then-Named Executive Officers also receive base salary adjustments for 2017.2018 ranging from 0% to 19%. In making these recommendations and determinations, the Compensation Committee considered the current retention risks and challenges facing us, as well as the factors described in “Governance of Executive Compensation Program – Compensation-Setting Process” above. In the case of our CEO,Named Executive Officers, the increaseincreases to histheir base salary wassalaries were determined to be appropriate, reflecting competitive market data that aligned with histheir performance. Subsequently, increases to the base salaries of our CEO and certain of our other Named Executive Officers were approved by our Board of Directors (with our CEO recusing himself from all such actions).

The annual base salaries of our Named Executive Officers for 20172018 were as follows:

The actual base salaries paid to our Named Executive Officers in 20172018 are set forth in the “2017“2018 Summary Compensation Table” below.

Annual Cash Bonuses

We use an annual cash bonus plan to motivate our Named Executive Officers (other than Mr. Vort, our Executive Vice President of Sales, who participates in a separate sales bonus plan) to achieve our annual business goals. In February 2017,2018, the Compensation Committee approved the 20172018 Executive Incentive Compensation Plan (the “2017“2018 Incentive Plan”) to provide financial incentives to meet or exceed the principal goals set forth in our 20172018 annual operating plan. The 20172018 Incentive Plan provided for bonus payments to be funded in early 2019 based on our level of achievement with respect to both corporate performance goals and individual performance goals (as described below).

Target Annual Cash Bonus Opportunities

For purposes of the 20172018 Incentive Plan, cash bonuses were based upon a specific percentage of each participant’s annual base salary. In February 2017,2018, the Compensation Committee reviewed the target annual cash bonus opportunities of our Namedthen-Named Executive Officers. TheAt that time, the Compensation Committee recommended to our Board of Directors thatapproved the following changes for 2018: (i) the target annual cash bonus opportunities ofopportunity for our CEO beCFO was increased and (ii) the target annual cash bonus opportunities of our other Namedthen-Named Executive Officers bewere maintained at their 2016current levels. In addition, the Compensation Committee allowed for review of corporate goal achievement and individual performance to determine the specific annual cash bonus payment for each executive officer, including each Named Executive Officer. The Compensation Committee then recommended to the independent members of our Board of Directors that the target annual cash bonus opportunity of our CEO be increased. The increase to the target annual cash bonus opportunity of our CEO was approved by the independent members of our Board of Directors (with our CEO recusing himself from the approval discussion).

In making these recommendations and determinations, the Compensation Committee considered current risks and challenges, as well as the factors described in “Governance of Executive Compensation Program – Compensation-Setting Process” above. In the case of our CEO and CFO, the increase to histheir target annual cash bonus opportunityopportunities was determined to be appropriate because itthe increase reflected competitive market data that aligned with histhe CEO’s and CFO’s performance. Subsequently, the increase

to the target annual cash bonus opportunity of our CEO was approved by the Board of Directors (with the CEO recusing himself from the approval discussion).

The target annual cash bonus opportunities of our Namedthen-Named Executive Officers, with the exception of Mr. Vort, for 20172018, were as follows, expressed as a percentage of each Named Executive Officer’s base salary:follows:

Our Named Executive Officers were eligible to earn up to 200% of their target annual cash bonus opportunities, with the exception of Mr. Vort, who participates in a separate sales bonus plan.

Corporate Performance Measures

Participants in the 20172018 Incentive Plan were eligible to receive a bonus payment based upon the attainment of one or more corporate performance measures that were established by the Compensation Committee and which related to financial and operational metrics that were important to us. The 20172018 Incentive Plan was funded based on our actual results for the year as evaluated against these performance measures.

In February 2017,January 2018, the Compensation Committee selected three performance measures for the 2018 Incentive Plan, including revenue growth over 20162017 (weighted 60%70%), gross margin growth over 20162017 (weighted 30%20%), and operating expense (weighted 10%) as the corporate performance measures for the 2017 Incentive Plan. .

The Compensation Committee believed these performance measures were appropriate because they provided a balance between revenuestrong emphasis on growth margin expansion, and expense control,while managing expenses, which it believed would most directly influence long-term stockholder value.

For each of these performance measures, the Board of DirectorsCompensation Committee established a target achievement level. These target levels were intended to require significant effort on the part of our executive officers and, therefore, were set at levels ordinarily difficult to achieve and for which average or below-average performance would not warrant a bonus payment. Each corporate performance measure was weighted according to the Compensation Committee’s assessment of its relative significance related to the successful execution of our annual operating plan.

For purposes of the 20172018 Incentive Plan, each corporate performance measure was to be evaluated independently, in accordance with the following conditions:

Annual Cash Bonus Plan Formula

The following formula was used in 20172018 to calculate the actual annual cash bonus pool funding for the 20172018 Incentive Plan:

 Individual cash bonus payments for theour CEO and other Named Executive Officers were then determined based on a combination of corporate and individual performance.

Annual Cash Bonus Payments

In January 2018, the Compensation Committee reviewed performance with respect to each of the corporate performance measures and determined the extent to which each objective had been achieved during the year. Specifically,February 2019, the Compensation Committee determined that achievement, and corresponding payment levels, with respect to the corporate performance measures under the 20172018 Incentive Plan were as follows:

Based on these determinations, the Compensation Committee determined that our Named Executive Officers, with the exception of Mr. Vort, received annual cash bonus payments at 265% of their target annual cash bonus targets. Subsequently, the Compensation Committee recommended to theour Board of Directors that our CEO receive an annual cash bonus payment equal to 165%265% of his target annual cash bonus opportunity. In addition,opportunity and the Compensation Committee recommended to the Board of Directors that our other Named Executive Officers receive annual cash bonus payments ranging from 130% to 165% of their target annual cash bonus opportunities. Subsequently, the annual cash bonus payments for the Named Executive Officers werepayment was approved by the Board of Directors (with the CEO recusing himself from the approval of his own annual cash bonus payment).

The following table sets forth the target annual cash bonus opportunities and the actual cash bonus payments made to our Named Executive Officers, with the exception of Mr. Vort, for 2017:
2018:

Sales Plan withfor Mr. Vort

As our Executive Vice President of Sales, Mr. Vort’s annual cash incentive for 20172018 was based on his ability to drive annual sales. In 2017,2018, Mr. Vort was eligible to earn a cash bonus of up to $202,500$240,000 (75% of his 20172018 annual base salary). This bonus was to be measured and paid in quarterly installments based on actual performance against his quarterly and annual unit targets. The targets for our sales executive are not disclosed because we believe to do so would be competitively harmful, as it would give competitors insight into our strategic and financial planning processes.

To be eligible to earn a bonus payment for a given calendar quarter, Mr. Vort must have achieved a minimum of 90% of his unit target for that period. Payments were based on a sliding scale where the percentage payout based on the achievement of 90% of his unit target for the period started at 80% and increased by 2% for every one percentage point above 90% of plan.linearly up to the target. For every one percentage point over 100% to target achieved, payout increased by 5%.

In 2017,2018, Mr. Vort earned a cash bonus under the sales plan in the amount of $180,225,$254,400, based on achievement of his 2017 unit target.2018 targets. The Compensation Committee reviewed Mr. Vort’s achievement in relation to the broader corporate performance measure for revenue growthmeasures and determined that he earned an additional cash bonus in the amount of $85,050$225,600 as a result of having exceeded our corporate revenue targettargets for 2017.2018. The additional bonus payment was calculated perwithin the terms of Mr. Vort’s annual cash incentive plan as described above.

The annual cash bonus payments made to our Named Executive Officers for 20172018 are set forth in the “2017“2018 Summary Compensation Table” below.

Long-Term Incentive Compensation

We view long-term incentive compensation in the form of equity awards as a critical component of our executive compensation program. The realized value of these equity awards bears a direct relationship to our stock price, and, therefore, these awards are an incentive for our Named Executive Officers to create value for stockholders. Equity awards also help us retain qualified executive officers in a competitive market.

Long-term incentive compensation opportunities in the form of equity awards are granted to the CEO and otherour Named Executive Officers by the Compensation Committee and to our CEO by the independent members of theour Board of Directors, based on the recommendations of the Compensation Committee. The amount and forms of such equity awards are determined by the Compensation Committee after considering the factors described in “Governance of Executive Compensation Program – Compensation-Setting Process” above. The amounts and relative weighting of the equity awards are intended to provide competitively-sized awards and resulting target total direct compensation opportunities that theour Board of Directors believes are reasonable and appropriate taking into consideration the factors described in “Governance of Executive Compensation Program – Compensation-Setting Process” above.

In February 2017,2018, the Compensation Committee determined that the equity awards to be granted to our executive officersNamed Executive Officers should be in the form of options to purchase shares of common stock and time-based restricted stock unit (“RSU”) awards that may be settled for shares of common stock. Further, the Compensation Committee determined that, the dollar value of the stock options should comprise 50% offor each executive officer’s 20172018 equity

award, and the RSU award should comprise 50% of the dollar value of the award.award would be converted to stock options, and 50% of the dollar value of the award would be converted to RSUs.

We have historically granted equity awards in the form of a mix of options to purchase shares of common stock and RSUs. In November 2018, the Compensation Committee approved a change to our mix of equity awards to grant performance-based RSU awards for executives and eliminate awards in the form of stock options across the company. The addition of performance-based RSU awards will provide additional alignment of executives’ interests with our stockholders’ interests, emphasize long-term financial performance and help retain executive talent.

At that time, the Compensation Committee recommended, and the independent members of our Board of Directors subsequently approved (with theour CEO recusing himself from the approval process), the grant of stock options and RSU awards to our then-Named Executive Officers after considering the factors described in “Governance of Executive Compensation Program – Compensation-Setting Process” above.

The aggregate equity awards granted to our Namedthen-Named Executive Officers for 20172018 were as follows:

The options to purchase shares of our common stock vest (and become exercisable) over a four-year period, with one-quarter of the shares vesting on the first anniversary of the vesting commencement date of March 1, 2017,2018, and 1/48th of the remainingtotal number of shares vesting monthly thereafter over 36 months in equal monthly increments, contingent upon the Named Executive Officer remaining continuously employed by us through each applicable vesting date.

The time-based RSU awards also vest over a four-year period, with one-quarter of the shares vesting on each of the first four anniversaries of the vesting commencement date of March 1, 2017,2018, contingent upon the Named Executive Officer remaining continuously employed by us through each applicable vesting date.

The form of awards will remain similar in 2018 with a mix of both stock options and RSUs.

The equity awards granted to our Named Executive Officers in 20172018 are set forth in the “2017“2018 Summary Compensation Table” and the “2017“2018 Grants of Plan-Based Awards Table” below.

Health and Welfare Benefits

Our Named Executive Officers are eligible to receive the same employee benefits that are generally available to all full-time employees generally, subject to the satisfaction of certain eligibility requirements. These benefits include flexible spending accounts, medical, dental and vision benefits, business travel insurance, employee assistance program, basic life insurance benefits, accidental death and dismemberment insurance policies, short-term and long-term disability insurance, commuter benefits and reimbursement for mobile phone coverage. In structuring these programs, we seek to provide an aggregate level of benefits that are comparable to those provided by similar companies, compliant with applicable laws and affordable to employees.

We maintain a tax-qualified Section 401(k) retirement savings plan (the “Section 401(k)“401(k) Plan”) that provides eligible employees, including our Named Executive Officers, with an opportunity to save for retirement on a tax-advantaged basis. In 2017,2018, we offered eligible participants a discretionary matching contribution to the Section 401(k) Plan, and we may make a discretionary employer contribution to each eligible employee each year. All participants’ interests in the matching contributions vest immediately from the time of contribution. Pre-tax contributions are allocated to each participant’s individual account and are then invested in selected investment alternatives according to the participants’ directions. The Section 401(k) Plan is intended to qualify under Sections 401(a) and 501(a) of the Internal Revenue Code (the “Code”). As a tax-qualified retirement plan, contributions to the Section 401(k) Plan and earnings on those contributions are not taxable to the employees until distributed from the Section 401(k) Plan, and all contributions are deductible by us when made.

Perquisites and Other Personal Benefits

Currently, we do not view perquisites or other personal benefits as a significant component of our executive

compensation program. Accordingly, we do not provide significant perquisites or other personal benefits to our Named Executive Officers, except as generally made available to our employees generally, or in situations where we believe it is appropriate to assist an individual in the performance of his duties, to make him more efficient and effective and for recruitment and retention purposes. During 2017,2018, our Named Executive Officers did not receive perquisites or other personal benefits that were, in the aggregate, $10,000 or more for each individual, except relocation benefits for our COO and use from time-to-time by our CEO and CFO who each, usedof an apartment leased by the company, from time-to-time in connection with working at our corporate headquarters in San Francisco, California. Our Compensation Committee believes that this commuting-related benefit is reasonable and necessary to retain Messrs. King and Garrett, and is intended to reduce obstacles in their ability to perform services for the company.

Employment Arrangements

We have entered into written employment offer letters with theour CEO and each of the other Named Executive Officers. Each of these letters provides for “at will” employment, meaning that either we or the Named Executive Officer may terminate the employment relationship at any time without cause. In addition, each of these letters required the Named Executive Officer to execute our standard At-Will Employment, Confidential Information, Invention Assignment and Arbitration Agreement.

Each of these employment offer letters also provided for certain initial payments and benefits in the event of certain qualifying terminations of employment, including a qualifying termination of employment in connection with a change in control of the Company.company. These post-employment compensation arrangements have been superseded by the Change of Control and Severance Agreements discussed in “Post-Employment Compensation Arrangements” below.

For detailed descriptions of the employment offer letters of our Named Executive Officers, see “Potential Payments upon Termination or Change in Control” below.

Post-Employment Compensation Arrangements

We believe that reasonable and competitive post-employment compensation arrangements are essential to attracting and retaining highly-qualified executive officers. We further believe that when recruiting executive talent these arrangements are necessary to offer compensation packages that are competitive. The Compensation Committee does not consider the specific amounts payable under these post-employment compensation arrangements, however, when determining the annual compensation of our executive officers.

We have entered into Change of Control and Severance Agreements with each Named Executive Officer, which provides for specified payments and benefits in the event of certain qualifying terminations of employment, including a qualifying termination of employment in connection with a change in control of the Company.company. Each of these agreements has a term of two years. However, if the company enters into an agreement with respect to a change in control that limits our ability to extend the applicable Change of Control and Severance Agreement when there are fewer than 12 months remaining in the term, the Change of Control and Severance Agreement will extend through the 12-month anniversary of such change in control transaction.

These agreements are designed to provide reasonable compensation to our Named Executive Officers if their employment is terminated under certain circumstances to facilitate their transition to new employment. Further, in some instances we seek to mitigate any potential employer liability and avoid future disputes or litigation by requiring departing Named Executive Officers to sign a separation and release agreement acceptable to us as a condition to receiving post-employment compensation payments or benefits.

In August 2017, the Compensation Committee reviewed our Change of Control and Severance provisions compared to our updated peer group and determined they were in need of enhancement in order to recruit and retain of top talent. As a result of the review, the Compensation Committee approved certain amendments to the Change of Control and Severance Agreements with the Named Executive Officers to:

We believe these arrangements align the interests of our Named Executive Officers and our stockholders when considering the long-term future. The primary purpose of these arrangements in the case of a change in control of the Companycompany is to keep our most senior executive officers focused on pursuing all corporate transaction activity in the best interests of our stockholders regardless of whether those transactions may result in their own job loss. Reasonable post-acquisition payments and benefits should serve the interests of both the executive officer and our stockholders.

In determining payment and benefit levels under the various circumstances triggering post-employment compensation provisions under our Change of Control and Severance Agreements, the Compensation Committee has drawn a distinction between (i) voluntary terminations of employment without good reason or terminations of employment for cause and (ii) terminations of employment without cause or voluntary terminations of employment for good reason. Payment in the latter circumstances has been deemed appropriate in light of the benefits described in the prior paragraph, as well as the likelihood that the executive officer's departure is due, at least in part, to circumstances not within his or her control. In contrast, we believe that payments are not appropriate in the event of a termination of employment for cause or a voluntary resignation without good reason because such events often reflect either performance challenges or an affirmative decision by the executive officer to end his or her relationship without fault by the Company.company.

All payments and benefits in the event of a change in control of the Companycompany are payable only if there is a subsequent loss of employment by a Named Executive Officer (a so-called “double-trigger” arrangement). In the case of the acceleration of vesting of outstanding equity awards, we use this double-trigger arrangement to protect against the loss of retention power following a change in control of the Companycompany and to avoid windfalls, both of which could occur if vesting accelerated automatically as a result of the transaction.

Under each of the Change of Control and Severance Agreements, in the event any payment to a Named Executive Officer pursuant to his agreement would be subject to the excise tax imposed by Section 4999 of the Code (as a result of the payment being classified as a “parachute payment” under Section 280G of the Code), he will receive such payment as would entitle him to receive the greatest after-tax benefit, even if it means that we pay him a lower aggregate payment so as to minimize or eliminate the potential excise tax that would be imposed by Section 4999. We do not use excise tax payments (or “gross-ups”) relating to a change in control of the Companycompany and have no such obligations in place with respect to any of our executive officers, including our Named Executive Officers.

For detailed descriptions of the post-employment compensation arrangements maintained with our Named Executive Officers, as well as an estimate of the potential payments and benefits payable under these arrangements, see “Potential Payments upon Termination or Change in Control” below.

Other Compensation Policies and Practices

Equity Award Grant Policy

We maintain an Equity Award Grant Policy that governs the grant of equity awards under our equity incentive and compensation plan. Among other things, this policy authorizes a committee consisting of theour CEO, theour CFO and theour Vice President of Human Resources to grant certain equity awards up to a maximum amount of 500,000 shares of common stock in the aggregate to employees and consultants. The policy does not allow approval of grants to members of this committee, theour CEO and executive officers who are direct reports to theour CEO or the non-employee members of theour Board of Directors.

In addition, the Equity Award Grant Policy:

It is also our policy not to time the grant of equity awards in relation to the release of material non-public information, and it is the intent of the Equity Award Grant Policy to specify the timing of effectiveness of the grant of equity awards under the policy to avoid such timing.

Policy Prohibiting Hedging and Pledging of Equity Securities

Under our Insider Trading Policy, employees, including Named Executive Officers, and the non-employee members of our Board of Directors are prohibited from engaging in “short sales” and from engaging in transactions in publicly-traded options, such as puts and calls, and other derivative securities with respect to our securities. This latter prohibition extends to any hedging or similar transaction designed to decrease the risks associated with holding company securities. In addition, employees, including Named Executive Officers, and the non-employee members of the Board of Directors are prohibited from pledging company securities as collateral for a loan or holding such securities in a margin account.

Stock Ownership Guidelines

We have adopted stock ownership guidelines for our non-employee directors and Chief Executive Officer to help ensure that they each maintain an equity stake in the company and, by doing so, appropriately link their interests with those of our stockholders. The guideline for non-employee directors is for each director to hold a number of shares of our stock with an aggregate value equal to at least three times the value of his or her annual cash retainer fees for service on the Board (including retainer fees for servicing as a member or chair of any Board committee). The guidelines for the Chief Executive Officer is to hold a number of shares of our stock with an aggregate value equal to at least three times the value of his or her annual base salary for service as the Chief Executive Officer (not including incentive compensation). Non-employee directors and the Chief Executive Officer are expected to achieve these ownership levels within the later of (i) December 31, 2023 and (ii) five years from the date the applicable individual becomes a non-employee director or the Chief Executive Officer (whether through being newly hired or promoted).

Tax and Accounting Considerations

Deductibility of Executive Compensation

Generally, Section 162(m) of the Code disallows a federal income tax deduction for public corporations of remuneration in excess of $1one million dollars paid in any fiscal year to certain specified executive officers. For taxable years beginning before January 1, 2018 (i) theseofficers, which include their chief executive officers consisted of a public corporation’s Chief Executive Officer and up to threeofficer, chief financial officer, any other executive officers (other than the Chief Financial Officer)officer whose total compensation is required to be disclosedreported to stockholders under the Securities Exchange Act of 1934 because they areby reason of such individual being among the most highly-compensatedthree highest compensated executive officers for the tax year, and (ii) qualifying “performance-based compensation”any executive officer who was not subject to thisthe deduction limit if specified requirements are met.in any tax year beginning after December 31, 2016.

Pursuant toAs a result of the Tax Cuts and Jobs Act of 2017, which was signed into law on December 22, 2017,compensation paid to our Named Executive Officers in excess of one million dollars will not be deductible for taxable years beginning after December 31, 2017, the remuneration of a public corporation’s Chief Financial Officer is also subject to the deduction limit. In addition, subjectfederal income tax purposes unless it qualifies for transition relief applicable to certain transition rules (which apply to remuneration provided“performance-based compensation” payable pursuant to a binding written binding contracts which wereagreement in effect on November 2, 2017 and which arehas not been subsequently modified in any material respect), for taxable years beginning after December 31,respect. In other words, performance-based incentive awards outstanding on November 2, 2017 the exemptionor awarded thereafter pursuant to a binding written agreement that was in effect on that date may be exempt from the deduction limit if the applicable conditions of the former exemption for “performance-based compensation” is no longer available. Consequently, for fiscal years beginning after December 31, 2017, all remuneration in excess of $1 million paid to a covered executive will not be deductible.are satisfied.

In designing our executive compensation program and determining compensation of our executive officers, including our Named Executive Officers, the Compensation Committee considers a variety of factors, including the potential impact of the Section 162(m) deduction limit. However, the Compensation Committee has not and will not necessarily limit executive compensation to that which is or may be deductible under Section 162(m).

ToTo maintain flexibility to compensate our executive officers in a manner designed to promote short-term and

long-term corporate goals and objectives, the Compensation Committee has not adopted a policy that all compensation must be deductible. The Compensation Committee believes that our stockholders’ interests are best served if its discretion and flexibility in awarding compensation is not restricted, even though some compensation awards may result in non-deductible compensation expense. TheThus, the Compensation Committee may approve compensation for our Named Executive Officers that doesmay not comply with an exemption frombe fully deductible because of the deduction limit of Section 162(m) when it believes that such compensation is consistent with the goals of our executive compensation program and is in the best interests of the Companycompany and our stockholders.

Accounting for Stock-Based Compensation

We follow the Financial Accounting Standard Board’s Accounting Standards Codification Topic 718 (“FASB ASC Topic 718”) for stock-based compensation awards. FASB ASC Topic 718 requires the measurement of compensation expense for all share-based payment awards made to employees and the non-employee members of our Board of Directors, including options to purchase shares of common stock and other stock awards, based on the grant date “fair value” of these awards. This calculation is performed for accounting purposes and reported in the executive compensation tables required by the federal securities laws, even though the recipient of the awards may never realize any value from their awards.

Processes and Procedures forfor Compensation Decisions

Our Compensation Committee is responsible for the executive compensation programs for our executive officers and reports to our Board of Directors on its discussions, decisions and other actions. Our Compensation Committee reviews and approves corporate goals and objectives relating to the compensation of our Chief Executive Officer, evaluates the performance of our Chief Executive Officer in light of those goals and objectives and determines and approves the compensation of our Chief Executive Officer based on such evaluation. Our Compensation Committee reviews and makes recommendations to the Board of Directors regarding our Chief Executive Officer’s compensation and the compensation of our directors. In addition, our Compensation Committee, in consultation with our Chief Executive Officer, reviews and approves all compensation for other officers. Our Chief Executive Officer, Chief Financial Officer and Vice President of Human Resources also make compensation recommendations for our other executive officers

and initially propose the corporate and departmental performance objectives under our Executive Incentive Compensation Plan to the Compensation Committee.

The Compensation Committee is authorized to retain the services of one or more executive compensation and benefits consultants or other outside experts or advisors as it sees fit, in connection with the establishment of our compensation programs and related policies. For fiscal year 2017,2018, we engaged Compensia, Inc., to advise us on compensation philosophy, selection of a group of peer companies to use for compensation benchmarking purposes and cash and equity compensation levels for our directors, executives and other employees based on current market practices.

Fiscal 20172018 Summary Compensation Table

The following table presents summary information regarding the total compensation for services rendered in all capacities that was earned by our Chief Executive Officer, our Chief Financial Officer and our twothree other most highly compensated executive officers in our fiscal year ended December 31, 2017.2018. The individuals listed in the table below are our Named Executive Officers for our fiscal year ended December 31, 2017:2018: