UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
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the Securities Exchange Act of 1934
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2021
Proxy Statement
Annual Meeting of Stockholders
In 2020, we received several awards recognizing our culture, workplace and commitments to responsible business Achieved designation by Modern Retail Awards for Most Responsible Retailer 100% rating for equality and inclusion for the 13th consecutive year Corporate Equality Index Member of the Dow Jones Sustainability World Index Recognized by Forbes as one of the World’s Best Employers Recognized as pioneers for action on climate change in CDP’s A List
Letter to Our Stockholders |
PRELIMINARY PROXY STATEMENT — SUBJECT TO COMPLETIONDear Fellow Stockholders:
A year marked by numerous challenges, including a global pandemic and civil unrest, presented eBay with unparalleled opportunities to show up for our customers, employees and communities. We are proud that our shared values of transparency, responsibility and performance have supported eBay’s mission to empower people and create economic opportunity throughout 2020. As your Board of Directors, we are focused on creating value for you – our stockholders – in increasingly competitive markets and during these unsettled times. Drawing heavily on your input, we are working to realize the vision for a tech-led reimagination of eBay, a marketplace that can compete and win well into the future.
Renewed Focus and Reimagination
A transformational period since the start of 2020 saw the sale of StubHub and the agreement to transfer eBay Classifieds to Adevinta, and now eBay moves forward with renewed focus on our core Marketplaces business. During 2020 we also brought eBay alum and leading e-commerce executive Jamie Iannone back to the company as CEO and aligned with Jamie and his management team on our strategic direction toward a tech-led reimagination of eBay. The full eBay Board unanimously supported Jamie’s selection as CEO, and we believe Jamie is the ideal CEO to lead eBay’s next chapter of growth and success. We are also extremely optimistic that our Marketplaces strategies will position eBay for long-term growth and maximize value for you.
$4.1B | $9.2B | +13% | $5.6B | Vision |
Successful closing of the sale of StubHub for $4.1 billion in 2020 exhibiting swift execution to obtain pre-pandemic valuation | Agreed to the transfer of eBay Classifieds to Adevinta for $9.2 billion and watched the expected value of the combined companies appreciate | Increased the rate | Capital returned to stockholders in 2020, including $5.1 billion in stock buybacks and nearly $450 million in cash dividends | Click here to view Jamie Iannone’s letter to stockholders |
Valuing Stockholder Perspectives
The Board actively seeks stockholder input through numerous channels throughout the year as illustrated in the graphic below, and Board decisions are informed by investor perspectives. Feedback received from our investors influenced the development of the company’s current capital allocation objectives, while the company’s strategic vision became the focus of heightened discussions with stockholders throughout 2019 and 2020. Outcomes of these discussions included commitments to portfolio and operational reviews. The Board also takes your feedback into account by reviewing your votes at our annual meeting. For example, in 2019, we made it easier for stockholders to call special meetings after a significant minority of stockholders indicated they did not support our previous ownership requirement with their votes at the 2018 annual meeting.
Spring Summer Fall Winter Proxy season engagement to update stockholders and obtain feedback on corporate governance and other matters on the Annual Meeting agenda. Review proxy season feedback and votes from the Annual Meeting. Respond to stockholders as appropriate. Annual ESG engagement by a cross-functional management team to obtain stockholder input on corporate governance, sustainability, executive compensation, DE&I, risk management and compliance. Board reviews the outcomes of stockholder ESG engagement with management and considers proactive changes based on feedback.
“ The Board salutes our founder Pierre Omidyar for his vision, leadership and 25 years of service, as we remain focused on realizing his vision of empowering people and creating economic opportunity in the years ahead. – PAUL S. PRESSLER, CHAIR OF THE BOARD | ||
Director Succession
Pierre Omidyar Founder and Director Emeritus 100% Positive Feedback Member since 1995 Location United States
The Board is committed to rigorous self-evaluation and to refreshing its membership with skills and experience that align with our long-term strategic vision. At the 2020 Annual Meeting, long-serving directors, Board Chair Tom Tierney and Audit Committee Chair Fred Anderson, both retired from the Board. As a result of thoughtful succession planning, Paul Pressler assumed the role of Chair of the Board, Perry Traquina became Audit Committee Chair and Adriane Brown stepped into Paul’s former role as Chair of the Compensation Committee. In September 2020, our founder Pierre Omidyar and director Jesse Cohn left the Board upon the conclusion of our previously announced director search to add additional technology and financial expertise. We thank each of the directors who departed the Board in 2020 for their tremendous contributions.
Upon his retirement, we recognized Pierre with the honorary title of Founder and Director Emeritus. And with eBay’s 25-year milestone, we would be remiss not to take a moment to celebrate the remarkable journey from the sale of a broken laser pointer in 1995 to $100 billion in GMV in 2020. Through the dotcom bubble, its crash, a great recession, ever-changing dynamics in the e-commerce market and now a global pandemic, eBay remains one of the best ideas on the Internet and firmly rooted in the principles of the Power of All of Us, including a commitment to creating economic opportunity for all and the belief that people are basically good.
A broken laser pointer (Pierre’s first sale) Introduced “Buy It Now” Launched “The Power of All of Us” $50 Billion Annual GMV eBay for Charity Reaches $1 Billion 1995 1998 2000 2004 2004 2006 2010 2011 2019 2020 $100 billion GMV 19 million sellers eBay Goes Public 10 Million Sellers 1 Billion Items Sold Annually 100 Million Active Buyers eBay’s 25th Anniversary 185 million buyers 12,000+ employees
Strength from Diversity
We believe Board leadership is enhanced by the range of perspectives represented on the Board, and our recruiting priorities reflect a commitment to refreshment and diversity. The Board’s nominees include our CEO and 12 independent, highly qualified directors, who together have the diverse experience and expertise necessary to oversee the strategic and operational direction of the Company and management’s execution of our plans. Of these nominees, 12 have been added to the board since 2015. Average tenure is approximately five years, and four women have joined the Board in recent years. Each of our Board members is dedicated, engaged and committed to fostering an atmosphere of collegiality that invites robust discussion to support eBay’s overarching objective of creating stockholder value over the long term.
New Independent Directors Carol Hayles and Mohak Shroff add valuable financial and technology expertise 5 Women Directors 8 Technology Executives 3 Racially Diverse 3 Financial Experts
Sustainable Values
eBay exists to empower people and create economic opportunity. As Board members we, and the thousands of eBay employees, deeply share the sentiment that the company’s purpose links us to something bigger than any one of us. To ensure the achievement of our long-term business goals, we focus our sustainability initiatives on the matters that are material to our business and where we can be most impactful to our stakeholders. We have measurable and transparent goals to evaluate our progress and to hold ourselves accountable to important milestones – such as 100% renewable energy by 2025, maintaining gender pay equity, and raising significant amounts for philanthropic causes. In 2021, with the support of the Corporate Governance and Nominating Committee, which oversees our Impact programs, the company formed a senior management ESG Council designed to further link a sustainability mindset with our strategic planning and business operations.
eBay Impact Report Diversity, Equity & Inclusion Report
Engaging Virtually
This year will be our second virtual annual meeting. This format offers the key features of an in-person meeting without putting anyone at risk of COVID-19. Although this decision was driven by the public health crisis, we hope it will also improve your ability to attend and participate while saving stockholders the time and expense of travel. In the virtual meeting, participants will join via a website where they can listen to the speakers, view any presentations, submit questions and comments, hear the company’s responses, and vote their shares electronically.
Thank you for your investment in eBay. We are proud to represent stockholder interests in this great company and look forward to meeting with you at the 2021 Annual Meeting of Stockholders.
Tuesday June 15, 2021 8:00 a.m. (PST) Link To Virtual Meeting Live Q &A with our CEO and Board Chair
Sincerely, Your Board of Directors Anthony J. Bates Adriane M. Brown Diana Farrell Logan D. Green Bonnie S. Hammer E. Carol Hayles Jamie J. Iannone Kathleen C. Mitic Matthew J. Murphy Paul S. Pressler Mohak Shroff Robert H. Swan Perry M. Traquina
eBay exists to empower people and create economic opportunity.
$100B | $10.3B | 185M | 60% | 1.7B |
Gross Merchandise Volume (GMV)* | Revenue* | Global Active Buyers** | Revenue from International Operations* | Approximate number of live listings** |
$100M+ Response to COVID-19 For details, please see page 29. Employees Communities Customers
Our purpose links us to something bigger than ourselves. The good that emerges is impact—and that’s what we deliver, every day. | Economic Opportunity Champions of inclusive commerce, eBay Seller School assists sellers in transforming their business, and we help small businesses grow globally, including through eBay’s Retail Revival and Up and Running programs. | eBay for Charity eBay hosts one of world’s largest and most active fundraising platforms, partnering with charity organizations to help them reach their fundraising goals. | ||||||
eBay Foundation eBay Foundation applies its resources and the eBay platform, along with engaged eBay employees, to help create a more equitable global economy. | Sustainable Commerce Circular commerce has been a part of our eBay brand since we were founded 25 years ago. We continually strive to integrate best practices at our facilities to reduce our environmental footprint. | Trusted Marketplace eBay created a trusted, transparent marketplace that’s based on the strong ethical values we follow as a business. | ||||||
Goals: We are continuously working to quantify, track and manage our environmental footprint. Renewable Energy Source 100 percent renewable energy in our electricity supply by 2025 for eBay-controlled data centers and offices. Carbon Emissions Achieve 50% absolute reduction in Scope 1 and 2 GHG emissions by 2025 and 75% reduction by 2030 from our 2016 baseline.
* GMV, Revenue, and Revenue from International Operations represent FY 2020. ** Global Active Buyers and Approximate number of live listings as of the end of Q4 2020. |
Notice of Annual Meeting of Stockholders
To our Stockholders:
NOTICE IS HEREBY GIVEN that theThe 2021 Annual Meeting of Stockholders of eBay Inc., a Delaware corporation, will be heldconducted virtually on Thursday, May 30, 2019, at 8:00 a.m. Pacific Time at our principal executive office located at 2025 Hamilton Avenue, San Jose, California 95125.the Internet. There will be no in-person meeting.
Date and Time Tuesday, June 15, 2021 8:00 a.m. Pacific Time | Web Address www.virtualshareholdermeeting.com/ EBAY2021 | Record Date You are eligible to vote if you were a |
Proposals Requiring Your Vote
Description | Board’s Voting Recommendation | For Further Details | ||
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| FOR each director nominee | Page 3 | |
2 | Ratification of appointment of independent auditors |
| Page 38 | |
3 | Advisory vote to approve named executive officer compensation | FOR | Page 44 | |
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These
Stockholders as of the record date will also transact on such other business as may properly come before the Annual Meeting or any adjournment or postponement of the Annual Meeting. The items of business are described more fully in the accompanying Proxy Statement. We will be providing access to our proxy materials over the Internetinternet under the Securities and Exchange Commission’sCommission (“SEC”) “notice and access” rules. As a result, on or about●, 2019, April 26, 2021, we are mailing to many of our stockholders a notice instead of a paper copy of the Proxy Statement and our 20182020 Annual Report.
Your vote is important. Regardless of whether you plan to participate in the Annual Meeting, we hope you will vote as soon as possible. You may cast your vote over the Internet, by telephone, by mail or during the Annual Meeting.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE STOCKHOLDER
MEETING TO BE HELD ON MAY 30, 2019: THE PROXY STATEMENT AND THE ANNUAL REPORT ARE AVAILABLE AT
https://investors.ebayinc.com/financial-information/annual-reports/default.aspx
This Proxy Statement will also be available in interactive form athttps://iiwisdom.com/ebay-2019
By Order of the Board of Directors
Marie Oh Huber
Secretary
Table of Contents
Proxy Statement Summary
This summary highlights information contained elsewhere in this Proxy Statement. This summary does not contain all of the information that you should consider, and you should read the entire Proxy Statement carefully before voting.
Meeting Information
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How to Vote
YOUR VOTE IS IMPORTANT. You are eligible to vote if you were a stockholder at the close of business on April 5, 2019 (the “Record Date”). Even if you plan to attend the meeting, please vote as soon as possible using any of the following methods. In all cases, you should have your notice, or if you requested to receive printed proxy materials, your proxy card or voting instruction form on hand and follow the instructions:
Phone | ||||
You can vote your shares online at
| You can vote your shares by calling +1 (800) 690-6903. |
sign your proxy card or voting instruction form and return it in the postage-paid envelope.
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By Order of the Board of Directors
Marie Oh Huber
Secretary
Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting to be Held on June 15, 2021: the Proxy Statement and the Annual Report are Available at Proposals Requiring Your Votehttps://investors.ebayinc.com/financial-information/annual-reports/default.aspx
www.ebayinc.com 1
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Table of Contents
1
Proxy Statement Summary
The Board of Directors (the “Board”) of eBay Inc. (“eBay” or the “Company”) is responsible for (1) providing advice and oversight of the strategic and operational direction of the Company and (2) overseeing the Company’s executive management to ensure the Company operates in ways that support the long-term interest of our stockholders and the stakeholders we serve. eBay is committed to transparency and accountability, as demonstrated by the following governance features:
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2019 Director Nominees
Name | Director Since | Independent | Committee Memberships* | Other Public Company Boards | ||||||||||||||||||
AC | CC | CGC | RC | |||||||||||||||||||
Fred D. Anderson Jr. | 2003 | YES |
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Anthony J. Bates |
2015 | YES |
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Adriane M. Brown |
2017 |
YES |
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2 | |||||||||||||||
Jesse A. Cohn |
2019 |
YES |
1 | |||||||||||||||||||
Diana Farrell |
2017 |
YES |
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None | ||||||||||||||||
Logan D. Green |
2016 |
YES |
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🌑 |
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None | ||||||||||||||||
Bonnie S. Hammer |
2015 |
YES |
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🌑 |
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1 | ||||||||||||||||
Kathleen C. Mitic | 2011 | YES |
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🌑 |
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Matthew J. Murphy |
2019 |
YES |
1 | |||||||||||||||||||
Pierre M. Omidyar |
1996 |
YES |
None | |||||||||||||||||||
Paul S. Pressler | 2015 | YES |
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None | |||||||||||||
Robert H. Swan |
2015 |
YES |
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1 | ||||||||||||||||
Thomas J. Tierney(Chairman of the Board) |
2003 |
YES |
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None | |||||||||||||
Perry M. Traquina |
2015 |
YES |
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2 | |||||||||||||
Devin N. Wenig | 2015 | NO | 1 |
* AC = Audit Committee; CC = Compensation Committee; CGC = Corporate Governance and Nominating Committee; RC = Risk Committee; Committee Chair =
2
Proxy Statement Summary
Executive Compensation
In 2018, eBay made solid progress executing its strategy of delivering the best choice, most relevance and most powerful selling platform for buyers and sellers. The Company accelerated its product innovation to improve the customer experience for buyers and sellers and delivered strong financial results. At the same time, the leadership team continued to foster a culture wedded to the Company’s purpose of creating a better, more sustainable form of commerce and rooted in the core values of being inventive, bold, courageous, diverse and inclusive. The Compensation Committee and our CEO remain committed to our existing executive compensation program, which is designed to align with our business goals and culture, serves the long-term interests of our stockholders and is highly performance based. We believe that ourpay-for-performance-driven executive compensation program ensures that our executives’ compensation is tied to delivering results that support the Company’s business strategy and objectives.
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The goals of our executive compensation program are to:
align compensation with our business objectives, performance and stockholder interests,
motivate executive officers to enhance short-term results and long-term stockholder value,
position us competitively among the companies against which we recruit and compete for talent, and
enable us to attract, reward and retain executive officers and other key employees who contribute to our long-term success.
We achieve these objectives primarily by employing the following elements of pay for our executive officers:
long-term equity compensation,
an annual cash incentive, and
base salary.
Our executive officers also participate in our broad-based retirement savings and benefit programs and receive limited perquisites.
In 2018, we continued to use a mix of equity and cash compensation vehicles to compensate our executive officers. Our incentive compensation is dependent on financial targets that the Compensation Committee believes correlate with operating performance overone- and multi-year performance periods and long-term stock performance.
In recognition of the importance of our strategic decision to improve customer experience by intermediating payments on our Marketplace platform (our “Payments” initiative), we have adjusted the PBRSU Program for the2018-2019 PBRSU cycle to tie our senior executives’ compensation to the degree of achievement of Payments intermediation through the use of a Payments achievement modifier component to the design.
3
Proxy Statement Summary
The following chart shows the breakdown of 2018 compensation for our CEO, Devin Wenig, and illustrates the predominance of equity incentives and performance-based components in our executive compensation program.
DEVIN WENIG
As discussed above, our executive compensation program aligns compensation with our business objectives, and is highly performance-based, with payouts under the program dependent on meeting financial and operational targets over designated performance periods. For 2018, we selected financial metrics and targets that the Compensation Committee believes incentivize our management team to achieve our strategic objectives and drive the Company’s financial performance and long-term stock performance, includingFX-neutral revenue,non-GAAP operating margin dollars, return on invested capital, payment intermediation usage andnon-GAAP net income. The specific results for 2018 are described on page 65 under 2018 Business Results.
4
Proxy Statement SummaryIn accordance with the requirements of Section 14A of the Exchange Act, we are asking stockholders to approve, on an advisory basis, the compensation of our named executive officers as described in the Compensation Discussion and Analysis, compensation tables, and related narrative discussion of such compensation included in this Proxy Statement.As discussed in the Compensation Discussion and Analysis, the Compensation Committee of the Board is committed to an executive compensation program that is aligned with our business goals, culture, and stockholder interests. We believe a competitive compensation program that is highly performance-based is key to delivering long-term stockholder returns.Our executive compensation program is designed to:align compensation with our business objectives, performance and stockholder interests;motivate executive officers to enhance short-term results and long-term stockholder value;position us competitively among the companies against which we recruit and compete for talent; andenable us to attract, reward and retain executive officers and other key employees who contribute to our long-term success.To achieve these objectives, our executive compensation program has three principal components: long-term equity compensation, an annual cash incentive, and base salary. The Compensation Committee seeks to have our named executive officers’ total compensation heavily weighted to variable, performance-based compensation by delivering a majority of compensation in the form of performance-based restricted stock units and annual cash incentives. Performance-based restricted stock units vest based on our achievement of specified financial performance goals over atwo-year performance period. Under our annual cash incentive plan, 75% of each named executive officer’s bonus payout for 2018 was based on Company financial performance with the remaining 25% based on individual performance; there is no payout for individual performance unless thresholds for Company performance are met, and there is a reduced payout for individual performance if Company performance is below target. We also granted time-based restricted stock units, the value of which depends on the performance of the Company’s stock.The Compensation Committee believes that the goals of our executive compensation program are appropriate and that the program is properly structured to achieve those goals, particularly in light of our annual evaluation of, and periodic refinements to, the program. We have engaged in ongoing discussions with our investors, who generally support those goals and the program, and we believe our stockholders as a whole should support them as well.We are asking our stockholders to indicate their support for the compensation of our named executive officers as described in this Proxy Statement. This proposal, commonly known as a“say-on-pay” proposal, gives our stockholders the opportunity to express their views on the compensation of our named executive officers. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and the philosophy, policies, and practices described in this Proxy Statement. Accordingly, we ask our stockholders to vote “FOR” the following resolution at the Annual Meeting:
The Audit Committee is responsible for the appointment, compensation, retention, and oversight of the independent auditors retained to audit our consolidated financial statements. We have appointed PricewaterhouseCoopers LLP (“PwC”) as our independent auditors for the fiscal year ending December 31, 2021. PwC has served as our auditors since 1997. In order to assure continuing auditor independence, the Audit Committee periodically considers whether there should be a regular rotation of the independent audit firm. Further, in conjunction with the mandated rotation of the independent audit firm’s lead engagement partner, the Audit Committee will continue to be directly involved in the selection and evaluation of PwC’s lead engagement partner. The Board and the Audit Committee believe that the continued retention of PwC to serve as our independent auditors is in the best interests of eBay and our stockholders. We expect that representatives of PwC will be present at the Annual Meeting, will have an opportunity to make a statement if they wish, and will be available to respond to appropriate questions. Our bylaws do not require the stockholders to ratify the appointment of PwC as our independent auditors. However, we are submitting the appointment of PwC to our stockholders for ratification as a matter of good corporate practice. If the stockholders do not ratify the appointment, the Audit Committee will reconsider whether or not to retain PwC. Even if the appointment is ratified, the Audit Committee, in its discretion, may change the appointment at any time during the year if it determines that such a change would be in the best interests of eBay and our stockholders. 38 ebay / 2021 Proxy Statement Audit and Other Professional Fees / Audit Matters Audit and Other Professional Fees During the fiscal years ended December 31, 2020 and December 31, 2019, fees for services provided by PwC were as follows (in thousands): Year Ended December 31, Audit Fees Audit-Related Fees Tax Fees All Other Fees (1) Total “Audit Fees” consist of fees incurred for services rendered for the audit of eBay’s annual financial statements, review of financial statements included in eBay’s quarterly reports on Form 10-Q, other services normally provided in connection with statutory and regulatory filings, for attestation services related to compliance with the Sarbanes-Oxley Act of 2002, and services rendered in connection with securities offerings. “Audit-Related Fees” consist of fees incurred for due diligence procedures in connection with acquisitions and divestitures and consultation regarding financial accounting and reporting matters. “Tax Fees” consist of fees incurred for transfer pricing consulting services, tax planning and advisory services, and tax compliance services. “All Other Fees” consist of fees incurred for permitted services not included in the category descriptions provided above with respect to “Audit Fees,” “Audit-Related Fees,” and “Tax Fees,” and include fees for consulting services, compliance-related services, and software licenses, as well as the lease payments described above. The Audit Committee has determined that the non-audit services rendered by PwC were compatible with maintaining its independence. All such non-audit services were pre-approved by the Audit Committee pursuant to the pre-approval policy set forth below. Audit Committee Pre-Approval Policy The Audit Committee has adopted a policy requiring the pre-approval of any non-audit engagement of PwC. In the event that we wish to engage PwC to perform accounting, technical, diligence, or other permitted services not related to the services performed by PwC as our independent registered public accounting firm, our internal finance personnel will prepare a summary of the proposed engagement, detailing the nature of the engagement, the reasons why PwC is the preferred provider of such services, and the estimated duration and cost of the engagement. This information will be provided to our Audit Committee or a designated Audit Committee member, who will evaluate whether the proposed engagement will interfere with the independence of PwC in the performance of its auditing services and decide whether the engagement will be permitted. On an interim basis, any non-audit We have taken a number of steps to ensure continued independence of our outside auditors. Our independent auditors report directly to the Audit Committee, and we limit the use of our auditors for non-audit services. The fees for services provided by our auditors in 2019 and 2020 and our policy on pre-approval of non-audit services are described above. www.ebayinc.com 39 Audit Matters / Audit Committee Report We constitute the Audit Committee of the Board. The Audit Committee’s responsibility is to provide assistance and guidance to the Board in fulfilling its oversight responsibilities to eBay’s stockholders with respect to: The Audit Committee members are not professional accountants or auditors, and these functions are not intended to replace or duplicate the activities of management or the independent auditors. Management has primary responsibility for preparing the financial statements and designing and assessing the effectiveness of internal control over financial reporting. Management and the internal audit function are responsible for maintaining appropriate accounting and financial reporting principles and policies and internal controls and procedures that provide for compliance with accounting standards and applicable laws and regulations. PwC, eBay’s independent auditors, is responsible for planning and carrying out an audit of eBay’s financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”) and eBay’s internal control over financial reporting, expressing an opinion on the conformity of eBay’s audited financial statements with generally accepted accounting principles (“GAAP”) as well as the effectiveness of eBay’s internal control over financial reporting, reviewing eBay’s quarterly financial statements prior to the filing of each quarterly report on Form 10-Q, and other procedures. During 2020 and in early 2021, in connection with the preparation of eBay’s Annual Report on Form 10-K for the year ended December 31, 2020, and in fulfillment of our oversight responsibilities, we did the following, among other things: 40 ebay / 2021 Proxy StatementProposals Requiring Your Vote |Proposal 2 — Advisory Vote to Approve Named Executive Officer Compensation“RESOLVED, that the Company’s stockholders approve, on an advisory basis, the compensation of the named executive officers, as disclosed in the Company’s Proxy Statement for the 2019 Annual Meeting of Stockholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, the 2018 Summary Compensation Table, and the other related tables and disclosures.”While thesay-on-pay vote is advisory, and therefore not binding on the Company, the Board and the Compensation Committee value the opinions of our stockholders and will take into account the outcome of this vote in considering future compensation arrangements. It is expected that the nextsay-on-pay vote will occur at the 2020 Annual Meeting.Proposal 3 — Ratification of Appointment of Independent AuditorsProposal 3Ratification of Appointment of Independent Auditors☑ The Board and the Audit Committee recommend a FOR vote for this proposalThe Audit Committee is responsible for the appointment, compensation, retention, and oversight of the independent auditors retained to audit our consolidated financial statements. We have appointed PricewaterhouseCoopers LLP (“PwC”) as our independent auditors for the fiscal year ending December 31, 2019. The Board and the Audit Committee believe that the continued retention of PwC to serve as our independent auditors is in the best interests of eBay and our stockholders. We expect that representatives of PwC will be present at the Annual Meeting, will have an opportunity to makerecommend a statement if they wish, and will be available to respond to appropriate questions.Our bylaws do not require the stockholders to ratify the appointment of PwC as our independent auditors. However, we are submitting the appointment of PwC to our stockholders for ratification as a matter of good corporate practice. If the stockholders do not ratify the appointment, the Audit Committee will reconsider whether or not to retain PwC. Even if the appointment is ratified, the Audit Committee, in its discretion, may change the appointment at any time during the year if it determines that such a change would be in the best interests of eBay and our stockholders.vote FOR this proposal.Audit and Other Professional Fees Year Ended
December 31, 2020 2019 Audit Fees $19,481 $14,722 Audit-Related Fees — — Tax Fees 4,500 2,450 All Other Fees(1) 588 596 Total $24,569 $17,768 During the fiscal years ended December 31, 2017(1) For 2020 and December 31, 2018, fees for services provided by PwC were as follows (in thousands): 2018 2017 $ 8,850 $ 9,309 1,436 3,024 1,100 672 478 497 $ 11,864 $ 13,502 (1)For 2017 and 2018, includes approximately $0.4 million, for each year,2019, includes approximately $0.5 million and $0.5 million, respectively, of lease payments to PwC Russia for office space in Russia pursuant to a sublease arrangement negotiated on anarm’s-length basis.“Audit Fees” consist of fees incurred for services rendered for the audit of eBay’s annual financial statements, review of financial statements included in eBay’s quarterly reports on Form10-Q, other services normally provided in connection with statutory and regulatory filings, for attestation services related to compliance with the Sarbanes-Oxley Act of 2002, and services rendered in connection with securities offerings. “Audit-Related Fees” consist of fees incurred for due diligence procedures in connection with acquisitions and divestitures and consultation regarding financial accounting and reporting matters. “Tax Fees” consist of fees incurred for transfer pricing consulting services, tax planning and advisory services, and tax compliance services. “All Other Fees” consist of fees incurred for permitted services not included in the category descriptions provided above with respect to “Audit Fees,” “Audit-Related Fees,” and “Tax Fees,” and include fees for consulting services, compliance-related services, and software licenses, as well as the lease payments described above.Proposals Requiring Your Vote |Proposal 3 — Ratification of Appointment of Independent AuditorsThe Audit Committee has determined that thenon-audit services rendered byto PwC were compatible with maintaining its independence. All suchnon-audit services werepre-approved by the Audit CommitteeRussia for office space in Russia pursuant to thepre-approval policy set forth below.a sublease arrangement negotiated on an arm’s-length basis.Audit CommitteePre-Approval PolicyThe Audit Committee has adopted a policy requiring thepre-approval of any engagement of PwC. In the event that we wish to engage PwC to perform accounting, technical, diligence, or other permitted services not related to the services performed by PwC as our independent registered public accounting firm, our internal finance personnel will prepare a summary of the proposed engagement, detailing the nature of the engagement, the reasons why PwC is the preferred provider of such services, and the estimated duration and cost of the engagement. This information will be provided to our Audit Committee or a designated Audit Committee member, who will evaluate whether the proposed engagement will interfere with the independence of PwC in the performance of its auditing services and decide whether the engagement will be permitted.On an interim basis, anynon-audit engagement may be presented to the Chair of the Audit Committee for approval and to the full Audit Committee at its next regularly scheduled meeting.Audit Committee Report· eBay’s corporate accounting, reporting and reportingfinancial controls practices;· eBay’s compliance with legal and regulatory requirements; · The independent auditors’ qualifications and independence; · The performance of eBay’s internal audit function and independent auditors; · The quality and integrity of eBay’s financial statements and reports; · Reviewing and approving all audit engagement fees and terms, as well as allnon-audit engagements with the independent auditors; and · Producing this report. The Audit Committee members are not professional accountants or auditors, and these functions are not intended to replace or duplicate the activities of management or the independent auditors. Management has primary responsibility for preparing the financial statements and designing and assessing the effectiveness of internal control over financial reporting. Management and the internal audit function are responsible for maintaining appropriate accounting and financial reporting principles and policies and internal controls and procedures that provide for compliance with accounting standards and applicable laws and regulations.PwC, eBay’s independent auditors, is responsible for planning and carrying out an audit of eBay’s financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”) and eBay’s internal control over financial reporting, expressing an opinion on the conformity of eBay’s audited financial statements with generally accepted accounting principles (“GAAP”) as well as the effectiveness of eBay’s internal control over financial reporting, reviewing eBay’s quarterly financial statements prior to the filing of each quarterly report on Form10-Q, and other procedures.Proposals Requiring Your Vote |Proposal 3 — Ratification of Appointment of Independent AuditorsDuring 2018 and in early 2019, in connection with the preparation of eBay’s Annual Report on Form10-K for the year ended December 31, 2018,· Discussed with PwC the overall scope of and plans for their audit; · Reviewed, upon completion of the audit, the financial statements to be included in the Form10-K and management’s report on internal control over financial reporting and discussed the audited financial statements and eBay’s internal control over financial reporting with senior management; · Conferred with PwC and senior management of eBay regarding the scope, adequacy, and effectiveness of internal accounting and financial reporting controls (including eBay’s internal control over financial reporting) in effect; · Instructed PwC that the independent auditors are ultimately accountable to the Board and the Audit Committee, as representatives of the stockholders; · Discussed with PwC, both during and after completion of their audit processes, the results of their audit, including PwC’s assessment of the quality and appropriateness, not just acceptability, of the accounting principles applied by eBay, the reasonableness of significant judgments, the nature of significant risks and exposures, the adequacy of the disclosures in the financial statements, as well as other matters required to be communicated under generally accepted auditing standards, including the matters required by applicable accounting standards; and · Obtained from PwC, in connection with the audit, a timely report relating to eBay’s annual audited financial statements describing all critical accounting policies and practices used, all alternative treatments of financial information within GAAP that were discussed with management, ramifications of the use of such alternative disclosures and treatments, the treatment preferred by PwC, and any material written communications between PwC and management. Our Audit Committee held ten meetings in 2018. Throughout the year, we conferred with PwC, eBay’s internal audit function, and senior management in separate executive sessions to discuss any matters that the Audit Committee, PwC, the internal audit function, or senior management believed should be discussed privately with the Audit Committee. We have direct and private access to both the internal and external auditors of eBay.We have discussed with PwC the matters required to be discussed by the applicable requirements of the PCAOB and the SEC. The Audit Committee received written disclosures and a letter from PwC required by the applicable PCAOB requirements for independent accountant communications with audit committees concerning auditor independence, and discussed the independence of PwC with that firm. We concluded that PwC’s provision to eBay and its affiliates of thenon-audit services reflected under “Audit-Related Fees,” “Tax Fees,” and “All Other Fees” above is compatible with PwC’s obligation to remain independent.We have also established procedures for the receipt, retention, and treatment of complaints received by eBay regarding accounting, internal accounting controls, or auditing matters and for the confidential anonymous submission by eBay employees of concerns regarding questionable accounting or auditing matters.After reviewing the qualifications of the current members of the Audit Committee, and any relationships they may have with eBay that might affect their independence from eBay, the Board determined that each member of the Audit Committee meets the independence requirements of The Nasdaq Stock Market and of Section 10A of the Exchange Act, that each member is able to read and understand fundamental financial statements, and that Mr. Anderson qualifies as an “audit committee financial expert” under the applicable rules promulgated pursuant to the Exchange Act. The Audit Committee operates under a written charter adopted by the Board. The current Audit Committee Charter is available on the corporate governance section of eBay’s investor relations website athttps://investors.ebayinc.com/corporate-governance/governance-documents/. Any future changes in the Audit Committee Charter will also be reflected on the website.Proposals Requiring Your Vote |Proposal 3 — Ratification of Appointment of Independent AuditorsBased on the reviews and discussions described above, we recommended to the Board, and the Board approved, the inclusion of the audited financial statements in eBay’s Annual Report on Form10-K for the year ended December 31, 2018, which eBay filed with the SEC on January 30, 2019. We have also approved the appointment of PwC as our independent auditors for the fiscal year ending December 31, 2019.AUDIT COMMITTEE Fred D. AndersonAdriane M. BrownPerry M. Traquina
Audit Committee Report / Audit Matters
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After careful consideration, the Board recommends that stockholders vote “FOR” the proposal to amend certain provisions of our charter and bylaws that grant stockholders who own at least 25% of the Company’s outstanding shares of capital stock and satisfy other requirements the ability to direct the Company to call a special meeting of stockholders (the “Special Meeting Threshold” and together with the related provisions the “Special Meeting Provisions”). This amendment would lower the threshold for stock ownership to permit stockholders who own at least 20% of our outstanding capital stock in the aggregate to call a special meeting of stockholders.
Our Audit Committee held nine meetings in 2020. Throughout the year, we conferred with PwC, eBay’s internal audit function, and senior management in separate executive sessions to discuss any matters that the Audit Committee, PwC, the internal audit function, or senior management believed should be discussed privately with the Audit Committee. We have direct and private access to both the internal and independent auditors of eBay.
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The Special Meeting Provisions, which are set forth in Article VI, Section E of the charter and Article I, Section 1.3 of the bylaws, may be summarized as follows:
One or more stockholders of record that together have continuously held (for their own account or on behalf of others) beneficial ownership of at least 25% of the outstanding common stock of the Company for at least 30 days as of the date such request is delivered have the ability to require the Company to call a special meeting of its stockholders.
Stock ownership is determined under a “net long position” standard to provide assurance that stockholders seeking to call a special meeting possess both (i) full voting and investment rights pertaining to the shares and (ii) the full economic interest in (including the opportunity for profit and risk of loss on) such shares.
The date of any special meeting requested must be not more than 90 days after the date on which the request is validly delivered to the Company.
The above summary is subject, in all respects, to the Special Meeting Provisions of our charter and bylaws, which are attached to this Proxy Statement as Appendix A and Appendix B, respectively.
We have discussed with PwC the matters required to be discussed by the applicable requirements of the PCAOB and the SEC. The Audit Committee received written disclosures and a letter from PwC required by the applicable PCAOB requirements for independent accountant communications with audit committees concerning auditor independence, and discussed the independence of PwC with that firm. We concluded that PwC’s provision to eBay and its affiliates of the non-audit services reflected under “Audit-Related Fees,” “Tax Fees,” and “All Other Fees” above is compatible with PwC’s obligation to remain independent.
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Pursuant to the proposed amendment to the charter and the corresponding amendment to the bylaws, the Special Meeting Threshold would be reduced from 25% to 20%. No other provisions of the charter or bylaws would be amended in connection with this action. In both Appendix A and Appendix B, additions of text to our charter and bylaws, respectively, are indicated by underlining and deletions of text are indicated by strike-outs.
We have also established procedures for the receipt, retention, and treatment of complaints received by eBay regarding accounting, internal accounting controls, or auditing matters and for the confidential anonymous submission by eBay employees of concerns regarding questionable accounting or auditing matters.
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At the Company’s 2018 Annual Meeting of Stockholders, we proposed that stockholders ratify the Special Meeting Provisions, including amendments we made to expand the circumstances under which stockholders may require eBay to call a special meeting. Of the votes cast, 53% were in favor of ratification of the Special Meeting Provisions. We saw the ratification proposal as a mechanism for facilitating further stockholder engagement, so we continued to solicit input from our stockholders thereafter.
Proposals Requiring Your Vote |Proposal 4 – Management Proposal to Amend Special Meeting Provisions in the Company’s Certificate of Incorporation and Bylaws
Over the past year, we had productive discussions with many of our stockholders on this matter, engaging with stockholders representing over 33% of outstanding shares. As a result of the feedback we received, the Board determined that eBay’s stockholders generally preferred a slightly lower Special Meeting Threshold and so approved a proposed amendment to the charter to reduce the Special Meeting Threshold to 20% of eBay’s outstanding stock, subject to stockholder approval. In addition, the Board has approved a corresponding amendment to our bylaws, which will become effective if and when the amendment to the charter becomes effective.
The Board is strongly committed to good corporate governance and continues to support the practice of permitting stockholders to request special meetings, provided that the meeting is called by stockholders owning a significant percentage of the shares of eBay. The Board determined that it is consistent with best corporate governance practices and in the best interests of eBay and its stockholders to amend the charter and the bylaws to permit stockholders who hold 20% or more of eBay’s outstanding capital stock to call special meetings, subject to the procedures and other requirements as provided in the bylaws.
Nevertheless, the Board continues to believe that special meetings should only be called to consider extraordinary events that are of interest to a broad base of stockholders that cannot be delayed until the next annual meeting. The Board also believes that a 20% ownership threshold to request a special meeting strikes a reasonable balance between enhancing stockholder rights and protecting against the risk that a small minority of stockholders, including stockholders with special interests, could call one or more special meetings that could result in unnecessary financial expense and disruption to our business. Preparing for a stockholder meeting requires significant attention of our directors, officers and employees, diverting their attention away from performing their primary function of operating eBay’s business in the best interests of our stockholders. Likewise, the Board believes that only stockholders with a true economic andnon-transitory interest in eBay should be entitled to utilize the special meeting mechanism.
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The proposed amendment to our charter requires the affirmative vote of a majority of the outstanding shares of common stock entitled to vote on the subject matter. If this proposal to amend our charter is approved by our stockholders, the resulting charter will be filed with the Secretary of State of the State of Delaware shortly after the Annual Meeting. The Board has approved the proposed corresponding amendment to the bylaws, which will become effective if and when the amendment to the charter becomes effective. If this proposal to amend our charter is not adopted and approved, the current right of holders of record of at least 25% of the Company’s outstanding capital stock to call a special meeting will remain unchanged.
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Proposals Requiring Your Vote |Proposal 5 – Stockholder Proposal Requesting that the Board Require an Independent Chair
After reviewing the qualifications of the current members of the Audit Committee, and any relationships they may have with eBay that might affect their independence from eBay, the Board determined that each member of the Audit Committee meets the independence requirements of The Nasdaq Stock Market and of Section 10A of the Exchange Act, that each member is able to read and understand fundamental financial statements, and that Messrs. Swan and Traquina and Ms. Hayles each qualifies as an “audit committee financial expert” under the applicable rules promulgated pursuant to the Exchange Act. The Audit Committee operates under a written charter adopted by the Board. The current Audit Committee Charter is available on the corporate governance section of eBay’s investor relations website at https://investors.ebayinc.com/corporate-governance/governance-documents/. Any future changes in the Audit Committee Charter will also be reflected on the website. Based on the reviews and discussions described above, we recommended to the Board, and the Board approved, the inclusion of the audited financial statements in eBay’s Annual Report on Form 10-K for the year ended December 31, 2020, which eBay filed with the SEC on February 4, 2021. We have also approved the appointment of PwC as our independent auditors for the fiscal year ending December 31, 2021. Audit Committee E. Carol Hayles Matthew J. Murphy Robert H. Swan Perry M. Traquina www.ebayinc.com 41 Executive officers are appointed annually by the Board and serve at the discretion of the Board. Set forth below is information regarding our executive officers as of April 26, 2021. Jamie Iannone Age: 48 Position: President andProposal 5 – Stockholder Proposal Requesting that the Board Require an Independent ChairProposal 5Stockholder Proposal Requesting that the Board Require an Independent Chair☒ The Board recommends a vote AGAINST this proposal based on the reasons set forth in eBay’s Statement of Opposition following the stockholder proposalJohn Chevedden has advised the Company that he intends to present the following stockholder proposal at the 2019 Annual Meeting. Mr. Chevedden has indicated that he holds the requisite number of shares of eBay common stock in accordance with Rule 14a-8 requirements. eBay will provide the address of the proponent promptly upon a stockholder’s oral or written request.The text of the stockholder proposal and supporting statement appear exactly as received by eBay unless otherwise noted. All statements contained in the stockholder proposal and supporting statement are the sole responsibility of the proponent. The stockholder proposal may contain assertions about the Company or other matters that we believe are incorrect, but we have not attempted to refute all of those assertions.The stockholder proposal will be voted on at the 2019 Annual Meeting only if properly presented by or on behalf of the proponent.Stockholder Proposal“Proposal 5 – Independent Board ChairmanShareholders request our Board of Directors to adopt as a policy, amend our governing documents as necessary, to require henceforth that the Chair of the Board of Directors, whenever possible, to be an independent member of the Board. The Board would have the discretion to phase in this policy for the next Chief Executive Officer transition, implemented so it does not violate any existing agreement.If the Board determines that a Chairman, who was independent when selected is no longer independent, the Board shall select a new Chairman who satisfies the requirements of the policy within a reasonable amount of time. Compliance with this policy is waived if no independent director is available and willing to serve as Chairman. This proposal requests that all the necessary steps be taken to accomplish the above.This proposal topic won 50%-plus support at 5 major U.S. companies in 2013 including 73%-support at Netflix. These 5 majority votes would have been still higher if all shareholders had access to independent proxy voting advice.Shareholder proposals such as this have taken a leadership role to improve the corporate governance rules of our company. For instance after EBAY received shareholder proposals EBAY then adopted better practices such as elimination of a burden on shareholders to obtain far more than a majority vote to approve certain important improvements and adopted a limited right for shareholders to call for a special shareholder meeting.On the other hand EBAY, seemingly under the leadership of Ms. Kathleen Mitic who chairs the governance committee and may be yielding to pressure from management, is going in the opposite direction. EBAY hired a law firm with 2,000 attorneys to prevent us from merely casting anon-binding vote to expand our limited right to call for a special shareholder meeting (2018). Ms. Mitic received20-times as many negative votes as a number of her peers on the EBAY Board in 2018.Having an independent Chairman of the Board in the future cannot guarantee that EBAY will not repeat such a predatory attitude towardnon-binding proposals (perhaps in response to pressure from management) but it will probably reduce the likelihood that EBAY will maintain such a predatory attitude.Please vote yes: Independent Board Chairman – Proposal 5”
Proposals Requiring Your Vote |Proposal 5 – Stockholder Proposal Requesting that the Board Require an Independent Chair
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The Board has carefully considered this proposal and does not believe that it is in the best interests of eBay and its stockholders. The Board therefore recommends a voteAGAINST this proposal.Biography
eBay Currently Has an Independent Chairman of the Board, and Our Current Corporate Governance Guidelines Provide for Strong, Independent Leadership
Mr. Thomas J. Tierney, by appointmentIannone’s biography is set forth under the heading “Board of the Board, has served as the independent Chairman of the Board since July 2015. During his tenure as Chairman, Mr. Tierney has demonstrated strong leadership, independent thinking and a deep understanding of the business, which has been enhanced by his tenure as a director of eBay since 2003. Since being appointed as the independent Chair, Mr. Tierney has worked with the rest of the Board to oversee significant strategic and leadership changes at the Company, including the Company’s refocused corporate and capital allocation strategy and the rigorous search for and appointment of seven new independent members of the Board.Directors” above.
Our Corporate Governance Guidelines also provide for strong, independent leadership of our Board, requiring that our Chairman be separate from our CEO and, if our Chairman of the Board were not independent, our independent directors would designate a Lead Independent Director. The Lead Independent Director has clearly delineated responsibilities, and would be involved in all significant corporate decisions.
Biography Mr. Cring has served eBay as Interim Chief Financial Officer since September 2019. Prior to that, he was eBay’s Vice President, Global Financial Planning, beginning in 2013. Before joining eBay, Mr. Cring was Senior Vice President for
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Cornelius Boone
Position: Senior Vice President, Chief People Officer
Biography Mr. Boone serves eBay as Senior Vice President, Chief People Officer since February 2021. Before that, he was Vice President, Human Resources at American Airlines from 2018 to |
42 ebay / 2021 Proxy Statement
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Unless you specify otherwise, the Board intends the accompanying proxy to be voted against this item.
Our Executive Officers
Marie Oh Huber Position: Senior Vice President, Chief Legal Officer, General Counsel and Secretary Biography Ms. Huber serves eBay as Senior Vice President, Chief Legal Officer, General Counsel and Secretary. She assumed her current role in July 2015. Prior to joining eBay, Ms. Huber spent 15 years at Agilent Technologies, a technology and life sciences company, most recently as Senior Vice President, General Counsel and Secretary. Before Agilent, she spent ten years at Hewlett-Packard Company in various positions, and prior to HP she started her career at large law firms in New York and San Francisco. |
Julie Loeger Age: 57 Position: Senior Vice President, Chief Growth Officer Biography Julie A. Loeger serves eBay as Senior Vice President, Chief Growth Officer. She assumed her current role in January 2021. Prior to joining eBay, Ms. Loeger spent 29 years at Discover, a financial company, most recently as Executive |
Pete Thompson Age: 52 Position: Senior Vice President, Chief Product Officer Biography Mr. Thompson has served eBay as Senior Vice President and Chief Product Officer since July 2019. Before that, he was Vice President for Alexa Voice Services at Amazon from October 2017. Prior to that, Mr. Thompson was Executive Vice President and Chief Operating Officer at TiVo from September 2016 and Vice President – Product at Sonos, Inc. from September 2015. Prior to Sonos, he worked at Ericsson from September 2013 to September 2015 and Microsoft from January 2006 to September 2013 in various positions. |
www.ebayinc.com 43
Proposal 3 | Advisory Vote to Approve Named Executive Officer Compensation |
In accordance with the requirements of Section 14A of the Exchange Act, we are asking stockholders to approve, on an advisory basis, the compensation of our named executive officers as described in the Compensation Discussion and Analysis, compensation tables, and related narrative discussion of such compensation included in this Proxy Statement.
As discussed in the Compensation Discussion and Analysis, the Compensation Committee of the Board is committed to an executive compensation program that is aligned with our business goals, culture, and stockholder interests. We believe a competitive compensation program that is highly performance-based is key to delivering long-term stockholder returns.
The Compensation Committee believes that the goals of our executive compensation program are appropriate and that the program is properly structured to achieve those goals, particularly in light of our annual evaluation of, and periodic refinements to the program. We have engaged in ongoing discussions with our investors, who generally support those goals and the program, and we believe our stockholders as a whole should support them as well.
We are asking our stockholders to indicate their support for the compensation of our named executive officers as described in this Proxy Statement. This proposal, commonly known as a “say-on-pay” proposal, gives our stockholders the opportunity to express their views on the compensation of our named executive officers. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and the philosophy, policies, and practices described in this Proxy Statement. Accordingly, we ask our stockholders to vote “FOR” the following resolution at the Annual Meeting:
“RESOLVED, that the Company’s stockholders approve, on an advisory basis, the compensation of the named executive officers, as disclosed in the Company’s Proxy Statement for the 2021 Annual Meeting of Stockholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, the 2020 Summary Compensation Table, and the other related tables and disclosures.”
While the say-on-pay vote is advisory, and therefore not binding on the Company, the Board and the Compensation Committee value the opinions of our stockholders and will take into account the outcome of this vote in considering future compensation arrangements. It is expected that the next say-on-pay vote will occur at the 2022 Annual Meeting.
The Board recommends a vote FOR this proposal. |
44 ebay / 2021 Proxy Statement
Compensation Discussion and Analysis / Executive Compensation
Compensation Discussion and Analysis
This Compensation Discussion and Analysis describes the compensation of our “named executive officers” (“NEOs”) for 2020:
Jamie Iannone, President and Chief Executive Officer (“CEO”)(1) Andrew J. Cring, Interim Chief Financial Officer (“Interim CFO”) Jae Hyun Lee, Senior Vice President, International Peter B. Thompson, Senior Vice President, Chief Product Officer Kristin A. Yetto, Senior Vice President, Chief People Officer(2) Scott F. Schenkel, former Interim Chief Executive Officer (“Interim CEO”)(3) Wendy Jones, former Senior Vice President, Global Operations(4) |
(1) | Mr. Iannone was appointed |
(2) | Ms. Yetto stepped down from her role in January 2021 and |
(3) | Mr. Schenkel served as the |
(4) | Ms. Jones departed the |
Executive Summary
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Within our executive compensation program, we strive to align the interests of our stockholders and our executives. We also believe in creating incentives that reflect our pay-for-performance philosophy, both in periods of success and during years where our financial performance falls short of our targets. In our view, our compensation practices, including incentive compensation, play an important role in reinforcing our performance-driven culture. 2020 was an extraordinary year with the global pandemic influencing changes in consumer behavior that positively impacted the e-commerce market. Due in large part to the strategies of and execution by our management team, the Company seized this opportunity and significantly exceeded short-term and long-term financial performance targets. Notable achievements of the management team in 2020 include:
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Consistent with our pay-for-performance philosophy, our incentive compensation programs rewarded our NEOs for this success. As discussed in more detail below, payouts for our 2019-2020 long-term, performance-based equity program and 2020 annual cash incentive plan were above target. These payouts correlate with shareholder value creation, with the price of eBay stock appreciating significantly during 2020, as well as over the course of the 2019-2020 performance cycle. www.ebayinc.com 45
Executive Compensation / Compensation Discussion and Analysis
CEO Transition Following the departure of our prior CEO, an independent committee of the Board led the search to identify the right candidate to lead the Company’s next chapter of growth and success, which concluded with the appointment of new CEO, Jamie Iannone, in April 2020. Mr. Iannone’s new-hire compensation package includes customary elements of our compensation program (salary, annual cash incentive and target long-term equity incentives), as well as one-time, transition compensation components. Notably, a significant portion of Mr. Iannone’s one-time, new-hire equity was granted in the form of total shareholder return performance stock units (“TSR PSUs”). For details of Mr. Iannone’s 2020 compensation, please see 2020 NEO Target Compensation – Determining 2020 Compensation for Our New CEO. Prior to Mr. Iannone being named CEO, Mr. Schenkel (previously our CFO) served as Interim CEO starting in September 2019. For discussion of the Board’s determinations regarding Mr. Schenkel’s 2020 compensation as Interim CEO, please see 2020 NEO Target Compensation – Target Value of Equity Awards, Target Cash Incentive Award, and Salary for Other NEOs. Following a period of transition, during which time Mr. Schenkel served in a Senior Advisor capacity, the Company provided Mr. Schenkel with severance contractually required by his offer letter agreement, which we entered into with Mr. Schenkel in 2014 when he became our CFO at the time of our separation for PayPal Holdings, Inc. We discuss the terms of Mr. Schenkel’s severance arrangement below in Severance and Change in Control Arrangements with Executive Officers and Clawbacks. As discussed below under Compensation Program Updates, in connection with Mr. Iannone’s appointment, we amended the Company’s SVP and Above Standard Severance Plan (“Standard Severance Plan”) to include our CEO. Compensation Program Updates During a period of evolution, including leadership transitions, our compensation plans provided flexibility to make decisions to address the changes in our business. Consistent with best practices, we continue to evaluate plan designs annually to determine their appropriateness. PBRSUs. For the 2020-2021 PBRSU performance cycle, the Compensation Committee removed the modifier related to our Managed Payments initiative (“Payments Modifier”) from the design of performance-based restricted stock units (“PBRSUs”). When we included the Payments Modifier, we intended this change to be temporary. Now that the Managed Payments initiative has launched, we believe that there is no need to retain the Payments Modifier because continued growth related to the initiative will be measured in the other performance metrics retained in our incentive programs. A consequence of the removal of the Payments Modifier is that the maximum payout of the 2020-2021 PBRSU performance cycle is 240% compared to 330% for the 2019-2020 PBRSU performance cycle that included the Payments Modifier. Severance Arrangements. In connection with Mr. Iannone joining eBay, the Compensation Committee added the CEO position as a participant under our Standard Severance Plan. Following a transition period, upon a qualifying separation event, the treatment of Mr. Iannone’s outstanding equity awards would be determined pursuant to the Standard Severance Plan, which significantly reduces the percentage of outstanding equity awards that would vest compared to the arrangements the Company had with Mr. Schenkel and our prior CEO. ESG Performance Goals. N E W Beginning in 2021, the qualitative assessment of individual performance within our annual cash incentive plan (“eIP”), which accounts for 25% of the incentive opportunity for our NEOs, will include sustainability and Diversity, Equity and Inclusion factors. This change follows our new CEO’s initiative to influence a collective recommitment to our DNA and creates a meaningful incentive for our NEOs to inspire employees to live our Beliefs of empowering our community, innovating boldly, delivering with impact, being for everyone and acting with integrity. Our Compensation Program The objectives of our executive compensation program are to: 46 ebay / 2021 Proxy Statement Compensation Discussion and Analysis / Executive Compensation We achieve these objectives primarily by employing the core elements of our executive compensation programs as illustrated in the graphic below. Executive Compensation Program Components Long-term Equity Incentives include our RSU and PBRSU programs which align executive incentives with the long-term interests of our stockholders Time-based Restricted Stock Units (RSUs) promote retention since executives must remain with the Company in order to enjoy the growth in equity value Performance-based Restricted Stock Units (PBRSUs) hold executives accountable for the long-term performance of the Company and time-based vesting at the end of the performance period focuses the executive on stock performance Annual Cash Incentive (eIP) aligns executive compensation with annual Company and individual performance, and motivates executives to enhance annual results Base Salary re?ects the scope of executives’ roles and responsibilities and compensates for expected day-to-day performance Performance-based Incentives include our Annual Cash Incentive and PBRSUs which hold executives accountable for achieving performance targets How We Pay Our CEO The following graphics illustrate the predominance of equity incentives and performance-based components in Mr. Iannone’s 2020 target pay mix in our core compensation program. In addition to annual and long-term incentives in line with our core compensation program, in 2020, Mr. Iannone also received the one-time, new-hire compensation as outlined below in 2020 NEO Target Compensation – Determining 2020 Compensation for Our New CEO. These one-time, new-hire components are not reflected in the graphics below. Base Salary Annual Cash 7% 32% 13% 48% Incentive (eIP) Mr. Iannone’s compensation is highly weighted to Company performance. Over 93% of his compensation is based on Company performance goals or is otherwise at-risk based on the price of Company stock. RSUs PBRSUs 61% Performance-Based * Mr. Iannone’s offer letter agreement provided for a minimum 2020 eIP payout of $1,500,000. www.ebayinc.com 47 Executive Compensation / Compensation Discussion and Analysis Incentive Compensation Correlates with Performance In 2020, we continued to compensate our executive officers using a mix of equity and cash compensation vehicles. Our incentive compensation is tied to financial targets that the Compensation Committee believes correlate with operating performance over one- and multi-year performance periods and long-term stock performance. Performance targets are generally set in a manner consistent with the current year budget and multi-year strategic plan. ·FX-neutral revenue (threshold) ·Non-GAAP net income ·Individual performance ·A minimum revenue threshold must be met before any incentive is paid ·Non-GAAP net income is directly affected by management decisions and provides the most widely followed measure of financial performance ·FX-neutral revenue ·Payments Modifier (for 2019-2020 cycle) ·Incentivizes profitable growth and efficient use of capital Annual Cash Incentive Plan Financial Goals and Plan Performance The following graphs show the goals and results achieved for the 2020 performance period under the financial component of our eIP, which accounted for 75% of our NEOs’ award opportunities. In 2020, the eIP’s financial performance goals were adjusted to exclude the impacts of the StubHub business that was sold to viagogo in February 2020 and for the eBay Classifieds business, which we agreed to transfer to Adevinta in July 2020, as both business were classified as discontinued operations in our financial statements during 2020. Threshold FX-neutral revenue (threshold) ($ billions) $8.011B $10.271B Non-GAAP net income ($ billions) Threshold Target Maximum $2.452B $1.700B $1.790B $1.933B 2020 eIP Financial Results As discussed above, driven by the impacts of the pandemic and management performance, the Company dramatically exceeded financial expectations in 2020. FX-Neutral revenue surpassed the threshold requirement of the eIP by more than $2 billion, and Non-GAAP net income performance was more than 25% greater than the maximum performance hurdle. As a result, the financial component of the eIP paid out at 200% of target. Historical eIP Payouts The graphic below shows the payouts (as a percentage of target award values) for the financial component of the eIP for the prior three plan years. eIP payouts have remained tightly correlated to performance. Specifically, in 2018, the eIP financial component paid out at 78% when the FX-neutral revenue threshold was achieved and non-GAAP net income was below target. In both 2017 and 2019, the eIP financial component paid out at 122% when the FX-neutral revenue thresholds and non-GAAP net income targets were exceeded. Average payout for 2019 122% prior three 2018 78% years 107% 2017 122% 48 ebay / 2021 Proxy Statement Compensation Discussion and Analysis / Executive Compensation PBRSU Financial Goals and Performance The following graphs show the goals and results achieved for the 2019-2020 performance period, which were used to calculate the performance vesting of PBRSUs at the end of the two-year performance period. Like the eIP performance goals, the PBRSU performance goals were adjusted to exclude the StubHub and eBay Classifieds businesses. $20.76B $20.16B $18.7B $21.10B FX-neutral revenue ($ billions) Threshold Target Maximum $6.37B Non-GAAP operating margin dollars ($ billions) 24.6% Return on invested capital (modifier) (%) 17% 21.7% 26% $5.6B $5.90B $6.37B Payments Modifier -40pts 45pts >+45pts 2019-2020 PBRSU Financial Results The Company’s financial performance dramatically exceeded expectations over the course of the 2019-2020 PBRSU performance period. Both FX-neutral revenue and Non-GAAP operating margin surpassed the maximum performance levels required by the Compensation Committee to earn the maximum 200% base payout. In addition, performance relative to the measures for both the return on invested capital modifier and the Payments Modifier yielded upward adjustments to the base payout percentage. As a result, the final payout percentage for this cycle of PBRSUs was 316% of the target awards. Please note that due to transitions in our senior management team in 2020, not all NEOs received a 316% payout with respect to the 2019-2020 PBRSU cycle. Mr. Iannone joined the Company in 2020 and therefore did not receive an award of 2019-2020 PBRSUs. Because PBRSUs are only awarded to Senior Vice Presidents and above, Mr. Cring as a Vice President of the Company does not participate in the PBRSU program. Pursuant to Mr. Schenkel’s severance arrangement, he received cash compensation for the target value of his 2019-2020 PBRSUs. Pursuant to our Standard Severance Plan, Ms. Jones received cash compensation equal to half of her 2019-2020 PBRSUs payout, and the other half was forfeited under time-vesting restrictions. Historical PBRSU Payouts Throughout the history of the PBRSU program, payouts have remained tightly correlated to performance. The graphic below shows the payouts for the three PBRSU cycles prior to the recently completed 2019-2020 PBRSU cycle, specifically a 117% payout for the 2016-2017 PBRSU cycle when both target FX-neutral revenue and non-GAAP operating margin target goals were exceeded, and 86% payouts for the 2017-2018 and 2018-2019 cycles when the Company fell short of both target goals. Average payout for 2018-2019 86% three prior 2017-2018 86% cycles 2016-2017 117% 96% www.ebayinc.com 49 Executive Compensation / Compensation Discussion and Analysis Say-on-Pay Results and Stockholder Engagement |
Say-on-Pay 88% 2020 2019 2018 88% 90% 93%
We regularly review the Company’s compensation philosophy and executive compensation program to assess whether they continue to be properly aligned with our business goals, culture and, importantly, stockholder interests. We also engage with our stockholders at least twice a year to solicit feedback on our compensation philosophy and executive compensation program. In 2020, the Compensation Committee reviewed our programs on three occasions, including at our March meeting in connection with the appointment of Mr. Iannone. After conducting these reviews and considering the feedback received from stockholders, we determined that the Company’s executive compensation philosophy, compensation objectives, and overall program continue to be appropriate. With the introduction of the modifications approved during 2020 and 2021 (described above), the Compensation Committee determined that the core elements of our executive compensation program should remain in place for 2021.
Our Compensation Practices
We believe our compensation practices align with and support the goals of our executive compensation program and demonstrate our commitment to sound compensation and governance practices.
| What We Don’t Do |
ü Align executive compensation · Pay-for-performance emphasized ·Majority of total compensation comprises performance-based compensation ·Equity/cash compensation ratio significantly favors equity · Meaningful stock ownership requirements ü Avoid excessive risk-taking ·Robust clawback policy ·Multiple performance measures, caps on incentive payments, and overlapping two-year performance periods for ü Adhere to compensation best practices ·Compensation benchmarked at or around the 50th percentile of peer group ·Independent compensation consultant engaged ·Limited perquisites for executive officers | No tax gross-ups for change in control benefits No automatic “single- trigger” acceleration of equity awards upon a No repricing or buyout of No hedging and |
CD&A Roadmap
Our Compensation Discussion and Analysis is presented as follows:
Elements of Our Executive Compensation Programprovides a description of our executive compensation practices, programs, and processes. |
2 | 2020 NEO Target Compensation discusses how we determine the mix of the elements in our compensation program to achieve our total target compensation. |
3 | 2020 Compensation Design and Determinations explains executive compensation decisions relating to the performance-based pay of our executive officers in 2020. |
4 | Further Considerations for Setting Executive Compensation discusses the role of the Company’s compensation consultant, peer group considerations, and the impact of accounting and tax requirements on compensation. |
5 | Severance and Change in Control Arrangements with Executive Officers and Clawbacks discusses the Company’s severance and change in control plans and other arrangements with executive officers. |
50 ebay / 2021 Proxy Statement
Compensation Discussion and Analysis / Executive Compensation
The
Elements of Our Executive Compensation
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The following chart provides a summary of the core elements of our 2020 executive compensation program.
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Cash Short-Term Incentives Long-Term Incentives (Equity) Compensation Elements Performance Metrics Performance and Vesting Periods Why We Pay Base Salary o Assessment and Target Positioning Strategy o N/A o Rewards executives’ current contributions to the Company o Reflects the scope of executives’ roles and responsibilities Annual Cash Incentive Awards Threshold company performance measures: o FX-neutral revenue (threshold) o Non-GAAP net income (threshold) If BOTH thresholds are met, then payout based on o Total non-GAAP net income (75%) o Individual performance (25%) o Annual o Aligns executive compensation with annual Company and individual performance o Motivates executives to enhance annual results Equity Incentive Awards Time-based RSUs: o Time-based vesting only PBRSUs: o FX-neutral revenue o Non-GAAP operating margin dollars o Return on invested capital modifier o Payments modifier (for 2019-2020 PBRSU performance period) TSR PSUs (for Mr. Iannone only): o Total Shareholder Return relative to S&P 500 Time-based RSUs: o Quarterly vesting over a four-year period subject to continued employment PBRSUs: o For CEO and CFO: 100% PBRSU awards granted will vest more than 14 months following the end of the applicable two-year performance o For other NEOs: One-half of the PBRSUs vest in March following the end of the applicable performance period, and the other half of the award vests in March of the following year, more than 14 months following the completion of the performance period o Half earned over a two-year performance period and the other half earned over a three-year performance period o Aligns executive incentives with the long-term interests of our stockholders o Positions award guidelines at target level with the median of the market levels paid to peer group executives o Recognizes individual executive’s recent performance and potential future contributions o Retains executives for the long term o Provides a total compensation opportunity with payouts varying based on our operating and stock price performance o Directly links Mr. Iannone’s performance over two and three-year periods to the creation of stockholder value We chose a mix of equity and cash compensation vehicles to compensate executive officers based on sustainable long-term value drivers of Company performance over one-We chose a mix of equity and cash compensation vehicles to compensate executive officers based on sustainable long-term value drivers of Company performance over
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Executive Compensation / Compensation Discussion and Analysis
Our executive officers were also eligible to receive a comprehensive set of benefits:
Health
· | health and welfare benefits plans;
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· | employee stock purchase plan;
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· | limited personal use of the corporate airplane (CEO and CFO only; with reimbursement required by the CFO and voluntarily provided by the CEO)
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· | broad-based 401(k) retirement savings plan and a VP and above deferred compensation plan (each plan is available to U.S.-based employees only); and
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· | certain other limited
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We provide certain executive officers with limited perquisites and other personal benefits not available to all employees that we believe are reasonable and consistent with our overall compensation program and philosophy. These benefits are provided to enable the Company to attract and retain these executive officers. We periodically review the levels of these benefits provided to our executive officers.
The Compensation Committee encouraged Mr. Iannone (and Mr. Schenkel in the interim CEO position) to use the corporate airplane for personal travel to reduce possible security concerns. The Company does not grant bonuses to cover, reimburse, or otherwise “gross-up” any income tax owed for personal travel on the corporate airplane.
52 ebay / 2021 Proxy Statement
Compensation Discussion and Analysis / Executive CompensationElements of Our Executive Compensation Program
2020 NEO Target Compensation |
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For 2018, once the value of the annual equity incentive awards has been set for each executive officer, the formula used to allocate the annual equity awards is as follows:
Annual Equity Awards: Value
The value of annual equity awards is determined within guidelines that the Compensation Committee approves on an annual basis for each position. These guidelines are based on our desired pay positioning relative to companies with which we compete for talent. The midpoint of the guidelines, or the median target award, reflects the 50th percentile of the competitive market.
In 2018, the Compensation Committee approved equity award guidelines
When making compensation decisions for our NEOs, the Compensation Committee evaluated each individual based on his or her leadership, competencies, innovation, and both past and expected future contributions toward the Company’s financial, strategic, and other priorities. The Company’s performance was reflected in our executive compensation program, holding leadership accountable for Company performance.
Long-Term Equity Incentive Compensation
The value of annual equity awards is determined within guidance that the Compensation Committee reviews on an annual basis for each position. This guidance is based on our desired pay positioning relative to companies with which we compete for talent. The midpoint of the guidance, or the median target award, reflects the 50th percentile of the competitive market.
In 2020, the Compensation Committee reviewed equity award guidance by position based on the following:
· | equity compensation practices of technology companies in our peer group, as disclosed in their public filings (see page |
· | equity compensation practices for comparable technology companies that are included in proprietary third-party surveys.
The Compensation Committee is also cognizant of dilution of our shareholders resulting from equity compensation, and it carefully considers share usage each year and sets an upper limit on the number of shares that can be used for equity compensation, including awards to executive officers and the overall employee population.
Each executive officer’s individual contribution and impact, projected level of contribution and impact in the future, and competitive positioning are considered using a score card when determining individual awards. The score card evaluates each executive with respect to factors, including business unit performance (or in the case of our CEO, Company performance), organizational development, and strategic and operational excellence. The retention value of current year awards and the total value of unvested equity from previous awards are also considered.
Based on CEO assessments and the score card evaluation, the Compensation Committee approved individual compensation arrangements for each NEO based on the factors and guidelines described above and in this section.
Annual Cash Incentive Compensation The Compensation Committee also assesses annual cash incentive award opportunities against data from public filings of our peer group companies and general industry data for comparable technology companies that are included in proprietary third-party surveys, and it approves target annual cash incentive opportunities for our NEOs at approximately the 50th percentile based on that data. The Compensation Committee reviews market data annually, and periodically adjusts incentive opportunities to the extent necessary where our practices are inconsistent with such market data. Base Salary The Compensation Committee reviews market data annually and approves each executive officer’s base salary for the year. Increases, if any, generally become effective on or around April 1st of the year. We assess competitive market data on base salaries from public filings of our peer group companies and general industry data for comparable technology companies that are included in proprietary third-party surveys. When considering the competitive market data, we also recognize that the data is historical and does not necessarily reflect those companies’ current pay practices. We assess each executive officer’s base salary against the 50th percentile of the salaries paid to comparable executives at peer group companies and also consider individual performance, levels of responsibility, expertise, and prior experience in our evaluation of base salary adjustments. Determining 2020 Compensation for Our New CEO In 2020, we appointed our new CEO, Jamie Iannone, to lead the Company’s next chapter of growth and success. The Compensation Committee focused on developing a compelling compensation arrangement for Mr. Iannone that is consistent with our pay for performance philosophy and that would reward Mr. Iannone for creating shareholder value in both the short and long term. The Compensation Committee considered many factors in setting the various components of Mr. Iannone’s new- hire compensation arrangements, including the belief that Mr. Iannone’s track record of innovation, execution, and operational excellence would drive Company www.ebayinc.com 53 Executive Compensation / Compensation Discussion and Analysis Mr. Iannone’s 2020 compensation package includes customary elements of our compensation program (salary, annual cash incentive and $12,000,000 in equity incentives consisting of 40% RSUs and 60% PBRSUs). In addition, Mr. Iannone’s 2020 compensation package includes transition compensation components, including $5,000,000 in cash compensation (paid over two years) and $11,000,000 in equity awards. These components were designed to entice Mr. Iannone to join eBay, to deliver take-home compensation in the first years of Mr. Iannone’s tenure approximating that of a CEO in our peer group and to compensate for value he forfeited when leaving his prior employer. RSUs represent $6,500,000 of Mr. Iannone’s transition equity and, notably, $4,500,000 was granted in the form of TSR PSUs. The TSR PSUs are a new form of award designed specifically for Mr. Iannone to provide a strong incentive based on performance goals relating to eBay’s total shareholder return performance relative to that of the S&P 500 index. We discuss the design of each of these compensation elements in more detail below under 2020 Incentive Compensation Design and Determinations. The graphic below details Mr. Iannone’s target annual compensation for 2020 without regard to the one-time, transition equity or cash awards.
Target Value of Equity Awards, Target Cash Incentive Award, and Salary for Other NEOs The Compensation Committee considered many factors in approving the various components of the other NEOs’ compensation, including those set forth below, using a score card as described above. In evaluating performance against these factors, the Compensation Committee assigned no specific weighting to any one of the factors, instead evaluating individual performance in a holistic manner:
Performance against target financial results for the NEO’s business unit or function |
· | Defining business unit or function strategy and executing against relevant goals |
· | Recognition of the interconnection between the eBay business units and functions and the degree to which |
· | Driving innovation and execution for the business unit or function |
· | Organization development, including hiring, developing, and retaining the senior leadership team of the business unit or function |
· | Achievement of strategic or operational objectives, including control of costs in an environmentally and socially responsible manner |
The Compensation Committee reviewed and approved the target value of equity awards, target annual cash incentive award, and salary for our NEOs based on available market data as well as Company and individual performance.
With the Board’s appointment of Mr. Schenkel to the Interim CEO role and Mr. Cring to the Interim CFO role, the Compensation Committee focused on incentivizing them for leading the Company during the transition while remaining committed to the philosophy of tying compensation to Company performance. With respect to Mr. Schenkel and Mr. Cring, starting in October 2019, we implemented a special pay structure in the form of monthly performance bonuses designed to align their cash compensation to their interim roles ($125,000 for Mr. Schenkel and $70,000 for Mr. Cring).
54 ebay / 2021 Proxy Statement
Compensation Discussion and Analysis / Executive Compensation
The Compensation Committee limits the use of out-of-cycle compensation for executive officers to extraordinary circumstances only. In recognition of Mr. Cring serving as interim CFO for the full 2020 fiscal year, the Compensation Committee approved an adjustment to the amount of the monthly performance bonuses for 2020 to recognize the actual Company and individual performance under the eIP. The adjustment to the 2020 monthly performance bonuses was a one-time payment of $432,000.
The following table shows target compensation for our NEOs other than Mr. Iannone:
Name | 2020 Annual Base Salary | Year- ($) | 2020 Target Award | Year-Over- Year Change for Target Annual Cash Incentive Award ($) | 2020 Target Value of ($) | Year-Over- Year Change for Target Value of Equity Awards ($) | ||||||||||||||||
Mr. Cring | $ | 455,000 | (1) | 3.4% | 55% | No Change | $ | 2,500,000 | (2) | 79% | (3) | |||||||||||
Mr. Lee | $ | 692,550 | (4) | 2.6% | 75% | No Change | $ | 5,500,000 | (5) | 29% | ||||||||||||
Mr. Thompson | $ | 645,000 | 3.2% | 65% | No Change | $ | 5,000,000 | (5) | 25% | (6) | ||||||||||||
Ms. Yetto | $ | 695,000 | 3.0% | 75% | No Change | $ | 4,500,000 | (5) | 50% | (7) | ||||||||||||
Mr. Schenkel | $ | 750,000 | (1) | No Change | 100% | No Change | $ | 10,000,000 | (5)(8) | 83% | ||||||||||||
Ms. Jones | $ | 620,000 | 3.3% | 75% | No Change | $ | 3,500,000 | (5) | 66% |
(1) | Does not include monthly performance bonuses. |
(2) | Reflects 100% RSUs since Mr. Cring is not eligible for the PBRSU program due to his position as a VP. |
(3) | In 2019. Mr. Cring received a supplemental grant of RSUs in the amount of $3,000,000 in recognition of the additional responsibilities of the Interim CFO position. The year over year value increase does not reflect this one-time award in 2019. |
(4) | Mr. Lee’s base salary is reported in U.S. dollars on an FX-neutral basis. |
(5) | For the PBRSU portion of the award, if performance targets are met, 50% of the achieved portion of the award will vest on March 15, 2021 and the remaining 50% of the achieved portion of the award will vest on March 15, 2022. |
(6) | In 2019, Mr. Thompson received a new hire grant of RSUs in the amount of $4,000,000 that was a one-time award, in addition to his target Annual award of $4,000,000. The year over year value increase does not reflect this one-time award in 2019. |
(7) | In 2019. Ms. Yetto received a supplemental grant of PBRSUs in the amount of $1,500,000 and supplemental grant of RSUs in the amount of $1,500,000 to recognize the critical nature of the Chief People Officer role. The year over year value increase does not reflect these one-time awards in 2019. |
(8) | In 2019. Mr. Schenkel received a supplemental grant of PBRSUs in the amount of $4,000,000 and RSUs in the amount of $4,000,000 in recognition of the additional responsibilities of the Interim CEO position. The year over year value increase does not reflect these one-time awards in 2019. |
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Executive Compensation / Compensation Discussion and Analysis
2020 Compensation Design and Determinations |
Our executive compensation program is highly performance-based, with payouts under the performance-based program dependent on meeting financial and operational targets over designated performance periods. For 2020, we selected financial metrics and targets that the Compensation Committee believes incentivize our management team to achieve our strategic objectives and drive the Company’s financial performance and long-term stock performance, including FX-neutral revenue, non-GAAP operating margin dollars, return on invested capital, payment intermediation usage and non-GAAP net income.
New-Hire Compensation Design for Mr. Iannone
The Compensation Committee was deliberate in the creation of a new-hire compensation arrangement that would reward Mr. Iannone for creating shareholder value. In addition to the core elements of our compensation program, the Compensation Committee granted the following one-time, transition awards to Mr. Iannone:
TSR PSUs. A TSR PSU award was granted valued at a target value of $4,500,000, 50% of which may be earned over a two- year performance period and 50% of which may be earned over a three-year performance period. In each case, TSR PSUs may be earned based on performance goals relating to eBay’s total shareholder return relative to that of the S&P 500 index and Mr. Iannone’s continued employment through the end of each performance period. The number of TSR PSUs earned will be equal to the target number of TSR PSUs granted multiplied by the applicable vesting percentage correlated to the relative TSR percentile for the measurement period in accordance with the table set forth below. No PSUs will be earned if the relative TSR percentile for the measurement period is below the threshold level specified below.
Performance Levels | Relative TSR Percentile | Applicable Vesting Percentage |
Below Threshold | Below 25th | 0% |
Threshold | 25th | 50% |
Target | 50th | 100% |
Maximum | 75th or above | 200% |
RSUs. An RSU award was granted at a value of $6,500,000. This RSU award vests over two years, 50% on the first anniversary of the date of grant and 50% on the second anniversary of the date of grant, subject to Mr. Iannone’s continued employment.
New-Hire Cash. The Company paid a 2020 equity transition/buyout payment of $3,500,000, subject to repayment upon Mr. Iannone’s termination of employment for cause or resignation other than for good reason within one year after his hire. On the first anniversary of Mr. Iannone’s hire date, the Company will pay an equity transition/bonus payment of $1,500,000, subject to repayment upon Mr. Iannone’s termination of employment for cause or resignation other than for good reason prior to the second anniversary of his hire date, less 1/24th for every full month of active employment following his hire date.
For discussion of the Compensation Committee’s determinations in granting these awards, please see 2020 NEO Target Compensation – Determining 2020 Compensation for Our New CEO above.
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Compensation Discussion and Analysis / Executive Compensation
2020 Long-Term Equity Incentive Awards
In 2020, our NEOs received equity-related compensation as part of the Company’s standard annual equity award. In general, the formula used to allocate the annual target equity awards is as follows:
60% PBRSUs 40% Time-based RSUs
Time-based RSUs
Each executive officer receives a portion of his or her annual equity award as a grant of RSUs that vest on a quarterly basis over a four-year period subject to continued employment. For newly hired executive officers, 25% of the initial grant of RSUs vest on the first anniversary of the date of grant and the remainder vest on a quarterly schedule. This vesting schedule is aligned with market practice and helps enable the Company to remain competitive in attracting talent.
PBRSU Program
The PBRSU Program is a key component of the annual equity compensation for each executive officer. At the beginning of each performance period, executive officers receive PBRSU grants that are subject to performance- and time-based vesting requirements.
Performance Period and Vesting Each PBRSU cycle has a two-year performance period. The performance goals for each cycle are approved by the Compensation Committee at the beginning of the performance period. Each executive officer is awarded a target number of shares subject to the PBRSU award at the beginning of the performance period. PBRSU awards granted in 2020 are based on the 2020-2021 performance cycle. |
The post-performance-period vesting feature subjects 100% of the CEO and CFO PBRSU awards to at least three years of stock price volatility before the shares vest.
If the Company’s actual performance exceeds or falls short of the target performance goals, the actual number of shares subject to the PBRSU award will be increased or decreased formulaically.
Under the PBRSU program, under which PBRSUs are awarded to executives at the level of Senior Vice President and above, 100% of any PBRSU awards granted to the CEO and CFO will vest, if at all, more than 14 months following the end of the applicable two-year performance period. For all SVPs other than the CEO and CFO, one-half of the PBRSUs vest in March following the end of the applicable performance period, and the other half of the award vests in March of the following year, more than 14 months following the completion of the performance period. The Compensation Committee believes that the post- performance-period vesting feature of the PBRSUs provides an important mechanism that helps to retain executive officers and align their interests with long-term stockholder value.
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Executive Compensation / Compensation Discussion and Analysis
Performance Measures and Rationale
As discussed above, the number of shares subject to a target PBRSU award are adjusted based on whether the Company’s actual performance exceeds or falls short of the target performance goals for the applicable performance period.
The following table outlines the performance measures for the 2019-2020 and 2020-2021 performance periods and the rationale for their selection.
Performance Measures | FX-neutral revenue(1)— weighted 50% of award opportunity with a payout range of 0% to 200% of target (50% at threshold, 100% at target and 200% at maximum performance) Non-GAAP operating margin dollars(2) — weighted 50% of award opportunity with a payout range of 0% to 200% of target (50% at threshold, 100% at target and 200% at maximum performance) Return on invested capital (modifier) — can modify awards earned based on FX-neutral revenue and Non-GAAP operating margin up or down by as much as 20% Payments (modifier)(3)— had the ability to adjust the total modification upwards to a maximum modification of 65% and downwards to a maximum of negative 60% |
Rationale | The Compensation Committee Both FX-neutral revenue and The return on Starting in 2018, we added the Payments Modifier to the PBRSU Program design. The Payments Modifier was used in the 2019-2020 performance cycle to incentivize the senior leadership team to work cross-functionally on a critical growth initiative and profit driver that impacts multiple areas of the business. Given the importance of the success of the Managed Payments initiative to the Company’s success generally, as well as
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Targets | The two-year performance targets are generally set in a manner consistent with the current year budget and multi-year strategic plan. At the time the performance targets were set, the target goals were designed to be achievable with strong management performance, while the maximum goals were designed to be very difficult to achieve. |
(1) | Calculated on a fixed foreign exchange basis. |
(2) | Non-GAAP operating margin dollars excludes certain items, primarily stock-based compensation expense and related employer payroll taxes, amortization of acquired intangible assets, impairment of goodwill, separation expenses, and certain one-time gains, losses and/or expenses. |
(3) | Applicable only to the 2018-2019 and 2019-2020 PBRSU cycles. Measures performance based on market launch thresholds and then percentage of intermediated GMV. |
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Compensation Discussion and Analysis / Executive Compensation
Calculation Mechanics
To receive any shares subject to a PBRSU award, at least one of the FX-neutral revenue or non-GAAP operating margin dollars minimum performance thresholds must be met. Each of the minimum performance thresholds are independent and, if any of the FX-neutral revenue or non-GAAP operating margin dollar performance thresholds are met, the award is adjusted with respect to that performance measure in accordance with the percentages outlined above. If the minimum performance threshold for either FX-neutral revenue or non-GAAP operating margin dollars is not met, then no shares are awarded for that performance measure. The Compensation Committee may approve adjustments to the calculations of the performance measures due to material events not contemplated at the time the targets were set (such as major acquisitions or unusual or extraordinary corporate transactions, events, or developments) and the Compensation Committee may apply negative discretion to reduce the payout levels of the awards.
The 2019-2020 PBRSU performance cycle reflected the impact of the Payments Modifier, which provided the possibility of a maximum payout of 330%. The 2020-2021 PBRSU awards do not include a Payments Modifier which means awards will range from 0% to 240% of the initial grant.
FX-neutral revenue Payout (50% - 200%) x .5 + Non-GAAP operating $ margin Payout (50% - 200%) x .5 Modifier (80% - 120%) = Total Payout % (0% - 240%)* Total Payout % Target Shares Awarded = Total Shares Earned (subject to additional vesting periods) * The potential range of modification for the 2019-2020 PBRSU performance cycle was 40% to 165% due to the inclusion of the Payment Modifier, which provided for a possible payout range of 0% to 330%.
2020-2021 PBRSU Timeline
March 15 50% vesting for all NEOs except CEO and CFO March 15 100% vesting for CEO and CFO 50% vesting for all other NEOs 2020-2021 Performance Period 2020 2021 2022 2023 2024
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Executive Compensation / Compensation Discussion and Analysis
2019-2020 PBRSU Cycle Performance and Shares Earned
As discussed in the Executive Summary above, the Company’s financial performance during the 2019-2020 performance cycle was extraordinary. The following graphic illustrates the payout calculation for the 2019-2020 PBRUSs based on performance above maximum for both the Revenue and Operating Margin measures, and upward modification under both the Return on Invested Capital modifier and the Payments Modifier:
FX-neutral revenue (200% x .5) = 100% Non-GAAP operating Payout % (200% x .5) = 100% = 200% Modifier Adjustment % (ROIC + Payments) = 158% Total Payout % 316%
For the 2019-2020 performance period, actual awards under the PBRSU Program could range from 0% to 330% of the target awards. Based on the Company’s financial performance during the 2019-2020 performance period, the PBRSU payout percentage was 316% of target and our NEOs received the following awards:
Name | Percentage of Target | Target | Shares Performance Cycle | Vesting Schedule |
Mr. Iannone* | N/A | N/A | N/A | N/A |
Mr. Cring** | N/A | N/A | N/A | N/A |
Mr. Lee | 316% | 91,080 | 287,813 | 50% on March 15, 2021; 50% on March 15, 2022 |
Mr. Thompson | 316% | 59,729 | 188,744 | 50% on March 15, 2021; 50% on March 15, 2022 |
Ms. Yetto*** | 316% | 106,891 | 337,776 | N/A |
* | Due to his hire date, Mr. Iannone did not receive a grant for the 2019-2020 PBRSU performance period. |
** | Mr. Cring is not eligible for our PBRSU program due to his position as VP. |
*** | Ms. Yetto departed the Company in March 2021. In accordance with the terms of the Ms. Yetto’s offer letter agreement, her 2019-2020 PBRSU award was deemed earned prior to her separation date using actual Company performance, and such shares were paid to her in a cash lump sum using certain value assumptions. |
In accordance with the terms of Mr. Schenkel’s offer letter agreement, his 2019-2020 PBRSU award was deemed earned prior to his separation date assuming achievement of target performance, and such shares were paid to him in a cash lump sum using certain value assumptions. In accordance with our Standard Severance Plan, for the 2019-2020 PBRSU performance period, Ms. Jones received a cash payment equal to 50% of the earned shares based on actual Company performance. Please see discussion below under Severance and Change in Control Arrangements with Executive Officers and Clawbacks.
60 ebay / 2021 Proxy Statement
Compensation Discussion and Analysis / Executive Compensation
2020 Annual Cash Incentive Awards (eIP)
Plan Design
The eIP is a broad-based short-term cash incentive plan. The Compensation Committee has set an annual performance period under the plan.
In the first quarter of the year, the Compensation Committee approves Company performance measures based on business criteria and target levels of performance. After the end of each year, the Compensation Committee approves the actual performance against the Company financial performance measures to determine the payout percentage for that portion of the annual cash incentive plan.
Performance Measures and Rationale
The following table provides information on the Company performance measures set in 2020 and rationale for their selection:
Performance Measures(1) | Rationale | Target | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Company financial performance measure | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FX-neutral revenue (threshold) | The Compensation Committee believes that a minimum revenue threshold should be met before any cash incentive is paid. Once the minimum revenue threshold has been met, the Company financial performance component of the annual cash incentive
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Non-GAAP net income(2) | Non-GAAP net income is the key measure of short- and intermediate-term results for the Company given that it can be directly affected by the decisions of the Company’s management and provides the most widely followed measure of financial performance. | Targets are set based primarily on the Company’s Board-approved budget for the year. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Individual measure | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Individual performance | The Compensation Committee believes that a portion of the compensation payable under this plan should be differentiated based on individual performance for which a review is conducted at the end of the year. | ·CEO’s assessment of the individual performance of the executive officers who are his direct reports. ·In making its determination of the individual performance of each executive officer, the Compensation Committee does not give any specific weighting to individual goals. · A downward modifier to individual performance is applied if the Company fails to achieve target performance, regardless of individual goal |
(1) | Both minimum FX-neutral revenue |
Non-GAAP net income
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Executive Compensation / Compensation Discussion and Analysis
Calculation Mechanics
The plan is designed to support a tight link between Company performance and any incentive payouts. The annual cash incentives payable for 2020 had both a FX-neutral revenue threshold and a non-GAAP net income minimum performance threshold. Unless both of these minimum performance thresholds are met, there is no incentive payout. If both minimum performance thresholds are met, the Company uses total non-GAAP net income to determine the payout percentage of the Company financial performance component of the annual cash incentive (from 50% at threshold to 200% for maximum performance). When the minimum performance thresholds are met, 75% of executive officers’ payouts under the plan are based on the Company’s performance as described above and, to facilitate differentiation based on individual performance, the remaining 25% of awards are generally based on individual performance.
As discussed in more detail below, the Compensation Committee considers many factors in determining the CEO’s individual performance, but does not assign specific weighting to these factors. The CEO partners with the Compensation Committee to similarly assess the individual performance of the other executive officers. Consistent with our commitment to aligning executive compensation with Company performance, in circumstances where the Company’s financial performance is above its minimum performance threshold and below the target performance threshold, a modifier is applied to the individual performance component to reduce it proportionately based on the Company financial performance component. For example, if the Company exceeded the FX-neutral revenue minimum performance threshold and total non-GAAP net income was 90% of the target performance threshold, then the individual performance component would be reduced by 10%. The maximum payout for both the individual performance component of the annual incentive plan is 200% of target.
Individual Performance
With respect to individual performance, our CEO presents the Compensation Committee with his assessment of the individual performance of the executive officers who are his direct reports and recommends a bonus payout percentage for the individual performance component of the annual incentive plan based on his assessment. The Compensation Committee reviews his assessments and payout recommendations, along with the score card evaluation and makes a subjective determination of the level of individual performance and payouts for each of those executive officers. In addition, the Compensation Committee (with input from the Chair of the Board and other independent members of the Board) makes a subjective determination of the individual performance of the CEO. In making its determination of the individual performance of each executive officer, the Compensation Committee does not give any specific weighting to individual goals. In addition, as described above, when the Company fails to achieve target performance, a downward modifier is applied to individual performance regardless of individual goal achievement in order to take a more holistic approach to assessing performance.
2020 Performance and Payouts
We discuss the financial goals for the 2020 eIP performance period and corresponding performance results above in the Executive Summary. The financial performance goals were set in early 2020 based primarily on the Company’s budget for the year. In early 2021, as part of its review of the Company’s financial performance against the annual cash incentive plan targets and in accordance with its authority under the cash incentive plan, the Compensation Committee considered whether the impact of any significant corporate events not contemplated at the time the targets were set should lead to an adjustment of any of the performance results and made appropriate adjustments for two significant divestitures. Based on above-threshold performance for FX-neutral revenue and above-maximum performance for Non-GAAP net income, the Company financial performance component was certified by the Compensation Committee at 200% of target for all NEOs.
The Compensation Committee reviewed Mr. Iannone’s performance for the purpose of determining the individual portion of his 2020 annual cash incentive award, with input from the entire Board. Mr. Iannone’s offer letter provided that his 2020 annual cash incentive award would not be prorated and would be at least $1,500,000. The Compensation Committee considered the factors listed above when assessing Mr. Iannone’s individual performance. Mr. Iannone’s individual component of the annual cash incentive was established at 200% of target. Mr. Iannone’s total earned annual incentive award for 2020 including the Company financial component and the individual component, was 200% of target.
62 ebay / 2021 Proxy Statement
Compensation Discussion and Analysis / Executive Compensation
For the other NEOs, the individual performance component was recommended by Mr. Iannone based on his assessment of each executive’s performance using the score card factors described above, which the Compensation Committee reviewed and approved in light of management’s strong performance in 2020 (as discussed above in the Executive Summary). The earned annual incentive award for each of our NEOs for 2020 was as follows:
Name | Annual Cash Base Salary | Annual Cash 2020 |
| Company | Performance |
Mr. Iannone | 200% | $4,000,000 | 200% | 200% | |
Mr. Cring | 55% | $ 515,308 | * | 200% | 200% |
Mr. Lee | 75% | $1,262,402 | 200% | 174% | |
Mr. Thompson | 65% | $ 863,750 | 200% | 200% | |
Ms. Yetto | 75% | $1,074,519 | 200% | 200% | |
Mr. Schenkel | 100% | $ 778,846 | ** | 200% | 200% |
Ms. Jones | 75% | $ 816,072 | *** | 200% | 175% |
* | In accordance with Mr. Cring’s interim CFO letter agreement, Mr. Cring received a monthly performance bonus that is based on the difference of his annual target cash opportunity and the CFO position. In recognition that Mr. Cring served as interim CFO for the full 2020 fiscal year, the Compensation Committee |
** | In accordance with Mr. Schenkel’s offer letter agreement, his eIP payout was based on the actual performance of the Company for the full year (and did not take into account any
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*** | In accordance with our Standard Severance Plan, Ms. Jones’ eIP payout was based on the
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Executive Compensation / Compensation Discussion and Analysis
Further Considerations for Setting Executive Compensation |
Role of Consultants in Compensation Decisions
Pay Governance LLC (“Pay Governance”) serves as the Compensation Committee’s independent compensation consultant. It provides the Compensation Committee with advice and resources to help the Compensation Committee assess the effectiveness of the Company’s executive compensation strategy and programs. Pay Governance reports directly to the Compensation Committee, and the Compensation Committee has the sole power to terminate or replace Pay Governance at any time.
As part of its engagement, the Compensation Committee has directed Pay Governance to work with our Senior Vice President, Chief People Officer and other members of management to obtain information necessary for Pay Governance to form recommendations and evaluate management’s recommendations to the Compensation Committee. Pay Governance also meets with the Compensation Committee during its regular meetings, in executive session (where no members of management are present), and with the Compensation Committee chair and other members of the Compensation Committee outside of the Compensation Committee’s regular meetings. As part of its engagement in 2020, Pay Governance provided a market overview of executive compensation, evaluated the Company’s peer group composition, evaluated compensation levels at the peer group companies, assessed and proposed equity and cash compensation guidelines for various executive job levels, assessed compensation for the Company’s executive officers, advised on the framework for the Company’s long-term incentive awards, and assessed Board compensation. Pay Governance also provided guidance to the Compensation Committee with respect to the leadership transition. Pay Governance does not provide any other services to the Company.
Compensation Consultant Conflict of Interest Assessment
The Compensation Committee recognizes that it is essential to receive objective advice from its compensation advisors. To that end, the Compensation Committee closely examines the procedures and safeguards that its compensation advisor takes to ensure that its services are objective. The Compensation Committee has assessed the independence of Pay Governance pursuant to SEC rules and concluded that Pay Governance’s work for the Compensation Committee does not raise any conflict of interest.
Risk Assessment of Compensation Policies and Practices
We have assessed the compensation policies and practices for our employees and concluded that they do not create risks that are reasonably likely to have a material adverse effect on the Company. This analysis was presented to the Compensation Committee, which agreed with this conclusion.
Peer Group Considerations
To set total compensation guidelines, we review market data of companies that are comparable to eBay and that we believe compete with eBay for executive talent, business, and capital. We review both specific data from peer group companies’ public filings and general industry data for comparable technology companies that are included in proprietary third party surveys. We believe that it is necessary to consider this market data in making compensation decisions to attract and retain talent. We also recognize that, at the executive level, we compete for talent against larger global companies, as well as smaller, non-public companies.
To assess whether the peer group continues to reflect the markets in which we compete for executive talent, the Compensation Committee reviews and approves the peer group each year with the assistance of its compensation consultant. In deciding whether a company should be included in the peer group, the Compensation Committee generally considers the following screening criteria:
· | revenue; |
· | market value; |
· | historical growth rates; |
· | primary line of business; |
· | whether the company has a recognizable and well-regarded brand; and |
· | whether we compete with the company for talent. |
For each member of the peer group, one or more of the factors listed above was relevant to the reason for inclusion in the group, and, similarly, one or more of these factors may not have been relevant to the reason for inclusion in the group.
64 ebay / 2021 Proxy Statement
Compensation Discussion and Analysis / Executive Compensation
The Compensation Committee evaluates the Company’s peer group on an annual basis. The peer group consisted of the following companies for 2020:
Adobe Inc. | Expedia Group, Inc. | PayPal Holdings, Inc. |
Alphabet Inc. | Facebook, Inc. | salesforce.com, Inc. |
Amazon.com, Inc. | Intel Corporation | Symantec Corporation |
Booking Holdings Inc. | Intuit Inc. | Twitter, Inc. |
Cisco Systems, Inc. | Microsoft Corporation | |
Electronic Arts Inc. | Netflix, Inc. |
For 2021, the Compensation Committee removed NortonLifeLock Inc. due to the sale of their enterprise security business in 2019 resulting in their smaller size. The Compensation Committee also added Walmart Inc. and Etsy Inc. to the peer group for 2021 due to the retail ecommerce sector increasingly becoming a talent competitor.
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Executive Compensation / Compensation Discussion and Analysis
Severance and Change in Control Arrangements with Executive Officers and Clawbacks |
The objective of our severance and change in control arrangements described below is to provide fair and reasonable severance that will also serve as a retention incentive for those impacted by a change in control or similar transactions. We believe that these protections help the Company attract and retain highly talented executive officers.
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The Company’s SVP and Above Standard Severance Plan (“Standard Severance Plan”), which covers each officer
Severance Arrangements Outside a Change in Control
The Company’s SVP and Above Standard Severance Plan (“Standard Severance Plan”), which covers officers employed as a senior vice president or in a more senior position, provides severance protection outside of a change in control period if a participant is terminated without cause and signs and does not revoke a waiver of claims against the Company. Ms. Jones, Mr. Fisher, and Mr. Lee participate in the Standard Severance Plan.
Solely for Mr. Fisher, if he continues in his current role as Senior Vice President, Chief Technology Officer through December 31, 2019, he will be eligible to receive benefits under the Standard Severance Plan even in the event that Mr. Fisher voluntarily terminates his employment with the Company. In addition, Mr. Fisher is
Compensation Discussion and Analysis |Severance and Change In Control Arrangements with Executive Officers and Clawbacks
entitled to access to medical benefits under the program or programs available to similarly situated executives of the Company through October 31, 2024 (through COBRA or a program with equivalent terms, as applicable, in the case of a termination for any reason).
Mr. Wenig and Mr. Schenkel do not participate in the Standard Severance Plan. Mr. Wenig and Mr. Schenkel entered into offer letters with the Company in 2014 in connection with their appointment to their current roles at the Company, each of which provides for certain severance benefits if the applicable executive is terminated without cause or resigns for good reason not in connection with a change in control, and signs and does not revoke a waiver of claims against the Company.
Under the terms of Mr. Lee’s offer letter entered into in connection with his promotion to his role of Senior Vice President, EMEA, Mr. Lee is entitled to receive a separation payment in the event he voluntarily terminates his employment with the Company. This separation payment is intended to replicate benefits offered under a retirement program in which Mr. Lee formerly participated when he was employed with the Company in Korea. The benefit is equal to three times his average monthly salary multiplied by his years of service since January 1, 2013. Should the Company terminate Mr. Lee’s employment for reason other than cause, Mr. Lee is entitled to benefits under the Standard Severance Plan. Mr. Lee’s offer letter also includes anon-competition restrictive covenant for12-months post termination of employment.
On July 2, 2018, one of our NEOs, Mr. Pittman, departed the Company and was eligible to receive severance as a participant in the Company’s Standard Severance Plan. The Company and Mr. Pittman entered into the Pittman Separation Agreement in connection with his departure. Under the terms of the Standard Severance Plan and the Pittman Separation Agreement, the Company paid the following severance benefits to Mr. Pittman: one year of his base salary; one year of his target annual incentive cash award; a pro rata bonus for 2018 for the period of time in 2018 during which he was employed; two times the cost of 12 months of health care coverage; and a cash payment in lieu of full acceleration of his equity awards which would have otherwise vested within 12 months of his termination date.
Please see the “Compensation Tables—Potential Payments Upon Termination or Change in Control” section of this Proxy Statement for further information regarding the Company’s Standard Severance Plan, including amounts received by Mr. Pittman in connection with his departure, and the treatment of awards upon qualifying termination events or a change in control.
The following table describes the severance benefits (other than certain accrued benefits which are paid (such as earned but unpaid bonuses, payment of unreimbursed expenses, etc.)) that each of our NEOs would receive if terminated outside of a change in control period if a participant is terminated without cause and signs and does not revoke a waiver of claims against the Company. Messrs. Iannone, Thompson and Lee participate, and prior to her termination Ms. Jones participated, in the Standard Severance Plan. For Mr. Iannone, the Standard Severance Plan also covers his resignation for good reason and provides enhanced benefits for the role of CEO. Further, in the event of a qualifying termination of Mr. Iannone under the Standard Severance Plan within two years of his hire date, his offer letter agreement provides for acceleration of certain of his new-hire equity awards above the normal acceleration provisions of the Standard Severance Plan.
Mr. Cring participates in the Company’s VP Standard Severance Plan (“VP Severance Plan”), which also provides severance protection outside of a change in control period. In May 2020, the Compensation Committee approved enhanced severance protections for Mr. Cring in recognition of his responsibilities as the Interim CFO.
Ms. Jones separated from the Company in December 2020, and was paid severance pursuant to the Standard Severance Plan. Details of Ms. Jones’ severance package are provided in the footnotes to the Executive Compensation Tables – Summary Compensation Table below.
Neither Mr. Schenkel or Ms. Yetto participated in the Standard Severance Plan. Both entered into offer letter agreements with the Company in connection with their appointments to the leadership team around the time of the Company’s separation of PayPal Holdings, Inc (in 2014 and 2015, respectively). The offer letters provided for certain severance benefits for a termination without cause or resignation for good reason not in connection with a change in control, and if the applicable executive signed and did not revoke a waiver of claims against the Company.
Mr. Schenkel separated from the Company in June 2020, and was paid severance pursuant to his offer letter agreement. Details of Mr. Schenkel’s severance package are provided in the footnotes to the Executive Compensation Tables – Summary Compensation Table below. Ms. Yetto separated from the Company in March 2021, and was paid severance pursuant to her offer letter agreement. Details of her severance benefits are provided in Executive Compensation Tables—Potential Payments Upon Termination or Change in Control below.
In addition to the benefits provided under the Standard Severance Plan, under the terms of Mr. Lee’s offer letter agreement entered into in connection with his appointment to his role of Senior Vice President, General Manager, Markets (which is still effective in his new role as SVP, International), Mr. Lee is entitled to receive a separation payment in the event he voluntarily terminates his employment with the Company.
Severance Arrangements in Connection with a Change in Control
The Company has not entered into any arrangements with any of its executive officers to provide “single trigger” severance payments upon a change in control.
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Compensation Discussion and Analysis |Severance and Change In Control Arrangements with Executive Officers and Clawbacks
The Company’s equity incentive plans generally provide for the acceleration of vesting of awards granted under the plans upon a change in control only if the acquiring entity does not agree to assume or continue the awards. These provisions generally apply to all holders of awards under the equity incentive plans.
The Company’s Change in Control Severance Plan provides severance protection for executives at the level of VP or in a more senior position in connection with a change in control if a participant is terminated without cause or resigns for good reason and signs and does not revoke a waiver of claims against the Company. Messrs. Iannone, Cring, Thompson and |
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The Company has not entered into any arrangements with any of its executive officers to provide “single trigger” severance payments upon a change in control.
The Company’s equity incentive plans generally provide for the acceleration of vesting of awards granted under the plans upon a change in control only if the acquiring entity does not agree to assume or continue the awards. These provisions generally apply to all holders of awards under the equity incentive plans.
The Company’s Change in Control Severance Plan provides severance protection for executives at the level of vice president or in a more senior position in connection with a change in control if a participant is terminated without cause or resigns for good reason and signs and does not revoke a waiver of claims against the Company. Mr. Fisher, Ms. Jones and Mr. Lee participate, and prior to her termination Ms. Jones participated, in the Change in Control Severance Plan.
Mr. Wenig and Mr. Schenkel do not participate in the Change in Control Severance Plan. Mr. Wenig and Mr. Schenkel entered into offer letters with the Company in 2014 in connection with their appointment to their current roles at the Company, each of which provides for certain severance benefits respectively if the executive is terminated without cause or resigns for good reason in connection with a change in control, and signs and does not revoke a waiver of claims against the Company.
The following table describes the severance benefits that each of our NEOs would receive if they are terminated in connection with a change in control.
66 ebay / 2021 Proxy Statement
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Compensation Discussion and Analysis / Executive Compensation
Plan Participants
Mr. Wenig and
Mr. Schenkel
Cash
Elements
Equity
Elements
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Compensation Discussion and Analysis |Further Considerations for Setting Executive Compensation
Neither Mr. Schenkel nor Ms. Yetto participated in the Change in Control Severance Plan. Their offer letter agreements provided for certain severance benefits if they were terminated without cause or resigned for good reason in the ninety days preceding or the twenty-four months following, a change in control, and signed and did not revoke a waiver of claims against the Company. |
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The Compensation Committee has adopted a clawback policy that covers each officer employed as a vice president or in a more senior position and applies to incentive compensation, which includes any cash incentive award, equity award, or equity-based award paid or awarded to any covered employee during the period in which he or she is designated as a covered employee. For all covered employees, the occurrence of either of the following events is covered: (a) an action or omission by the covered employee that constitutes a material violation of the Company’s Code of Business Conduct or (b) an action or omission by the covered employee that results in material financial or reputational harm to the Company. In addition, for covered employees that are employed as a senior vice president or in a more senior position or a vice president
Please see Executive Compensation Tables—Potential Payments Upon Termination or Change in Control for further information regarding the Standard Severance Plan, Mr. Cring’s benefits under the VP Severance Plan, the Change in Control Severance Plan and the relevant provisions of the offer letter agreements with certain of our NEOs.
Clawbacks
The Compensation Committee has adopted a clawback policy that covers each officer employed as a Vice President or in a more senior position and applies to incentive compensation, which includes any cash incentive award, equity award, or equity-based award paid or awarded to any covered employee during the period in which he or she is designated as a covered employee. For all covered employees, the occurrence of either of the following events is covered: (a) an action or omission by the covered employee that constitutes a material violation of the Company’s Code of Business Conduct or (b) an action or omission by the covered employee that results in material financial or reputational harm to the Company. In addition, for covered employees that are employed as a Senior Vice President or in a more senior position or a Vice President who is a member of the finance function, the following event is also covered: a material restatement of all or a portion of the Company’s financial statements that is the result of a supervisory or other failure by the covered employee.
Under the clawback policy, the Compensation Committee has the authority and discretion to determine whether an event covered by the policy has occurred and, depending on the facts and circumstances, may (but need not) require the full or partial forfeiture and/or repayment of any incentive compensation covered by the policy that was paid or awarded to a covered employee. The forfeiture and/or repayment may include all or any portion of the following:
· | Any incentive compensation that is greater than the amount that would have been paid to the covered employee had the covered event been known; |
· | Any outstanding or unpaid incentive compensation, whether vested or unvested, that was awarded to the covered employee; and |
· | Any incentive compensation that was paid to or received by the covered employee (including gains realized through the exercise of stock options) during the twelve-month period preceding the date on which the Company had actual knowledge of the covered event or the full impact of the covered event was known, or such longer period of time as may be required by any applicable statute or government regulation. |
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Executive Compensation / Compensation Committee Report
The Compensation Committee reviews and approves Company compensation programs on behalf of the Board. In fulfilling its oversight responsibilities, the Compensation Committee reviewed and discussed with management the Compensation Discussion and Analysis set forth in this Proxy Statement. Based upon the review and discussions referred to above, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement and eBay’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020.
Compensation Committee
Anthony J. Bates Adriane M. Brown Logan D. Green Kathleen C. Mitic Paul S. Pressler
68 ebay / 2021 Proxy Statement
Executive Compensation Tables / ➎ Further Considerations for Setting Executive Compensation
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Pay Governance LLC (“Pay Governance”) serves as the Compensation Committee’s independent compensation consultant. It provides the Compensation Committee with advice and resources to help the Compensation Committee assess the effectiveness of the Company’s executive compensation strategy and programs. Pay Governance reports directly to the Compensation Committee, and the Compensation Committee has the sole power to terminate or replace Pay Governance at any time.
As part of its engagement, the Compensation Committee has directed Pay Governance to work with our Senior Vice President, Chief People Officer and other members of management to obtain information necessary for Pay Governance to form recommendations and evaluate management’s recommendations to the Compensation Committee. Pay Governance also meets with the Compensation Committee during its regular meetings, in executive session (where no members of management are present), and with the Compensation Committee chair and other members of the Compensation Committee outside of the Compensation Committee’s regular meetings. As part of its engagement in 2018, Pay Governance provided a market overview of executive compensation, evaluated the Company’s peer group composition, evaluated compensation levels at the peer group companies, assessed and proposed equity and cash compensation guidelines for various executive job levels, assessed compensation for the Company’s
Executive Compensation TablesCompensation Discussion and Analysis |Further Considerations for Setting Executive Compensation
executive officers, advised on the framework for the Company’s long-term incentive awards, and assessed Board compensation. Pay Governance does not provide any other services to the Company.
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The Compensation Committee recognizes that it is essential to receive objective advice from its compensation advisors. To that end, the Compensation Committee closely examines the procedures and safeguards that its compensation advisor takes to ensure that its services are objective. The Compensation Committee has assessed the independence of Pay Governance pursuant to SEC rules and concluded that Pay Governance’s work for the Compensation Committee does not raise any conflict of interest.
2020 Summary Compensation Table
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To set total compensation guidelines, we review market data of companies that are comparable to eBay and that we believe compete with eBay for executive talent, business, and capital. We review both specific data from peer group companies’ public filings and general industry data for comparable technology companies that are included in proprietary third party surveys. We believe that it is necessary to consider this market data in making compensation decisions to attract and retain talent. We also recognize that, at the executive level, we compete for talent against larger global companies, as well as smaller,non-public companies.
To assess whether the peer group continues to reflect the markets in which we compete for executive talent, the Compensation Committee reviews and approves the peer group each year with the assistance of its compensation consultant. In deciding whether a company should be included in the peer group, the Compensation Committee generally considers the following screening criteria:
revenue;
market value;
historical growth rates;
primary line of business;
whether the company has a recognizable and well-regarded brand; and
whether we compete with the company for talent.
For each member of the peer group, one or more of the factors listed above was relevant to the reason for inclusion in the group, and, similarly, one or more of these factors may not have been relevant to the reason for inclusion in the group.
The Compensation Committee evaluates the Company’s peer group on an annual basis. The peer group consisted of the following companies for 2018:
Adobe Systems Incorporated
Alphabet Inc.
Amazon.com, Inc.
Booking Holdings Inc. (formerly, “The Priceline Group Inc.”)
Cisco Systems, Inc.
Electronic Arts Inc.
Expedia, Inc.
Facebook, Inc.
Intel Corporation
Intuit Inc.
Microsoft Corporation
Netflix, Inc.
PayPal Holdings, Inc.
salesforce.com, inc.
Symantec Corporation
Twitter, Inc.
Compensation |Compensation Committee Report
The Compensation Committee reviews and approves Company compensation programs on behalf of the Board. In fulfilling its oversight responsibilities, the Compensation Committee reviewed and discussed with management the Compensation Discussion and Analysis set forth in this Proxy Statement. Based upon the review and discussions referred to above, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement and eBay’s Annual Report on Form10-K for the fiscal year ended December 31, 2018.
COMPENSATION COMMITTEE
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Compensation Tables |2018 Summary Compensation Table
2018 Summary Compensation Table
The following table, footnotes, and narrative summarize the total compensation earned by each of our named executive officers, or NEOs, for the fiscal year ended December 31, 2018
The following table, footnotes, and narrative summarize the total compensation earned by each of our named executive officers, or NEOs, for the fiscal year ended December 31, 2020 and, to the extent required under the SEC executive compensation disclosure rules, the fiscal years ended December 31, 2019 and 2018.
Name and Principal Position (a) |
Year |
Salary |
Bonus |
Stock |
Option |
Non-Equity ($) (g) | Change in Earnings ($) (h) |
All Other ($) (i) |
Total |
Jamie Iannone(1) | 2020 | 673,077 | 3,500,000 | 26,586,624 | — | 4,000,000 | — | 76,138 | 34,835,839 |
Chief Executive | |||||||||
Officer | |||||||||
Andrew J. Cring | 2020 | 468,462 | 1,272,000 | 2,057,770 | — | 515,308 | — | 32,921 | 4,346,460 |
Interim Chief Financial Officer | 2019 | 440,000 | 210,000 | 4,947,044 | — | 312,180 | — | 11,200 | 5,920,424 |
Jae Hyun Lee(2) | 2020 | 709,580 | — | 4,524,216 | — | 924,672 | — | 611,791 | 6,770,259 |
SVP, International | 2019 | 711,735 | — | 5,719,824 | — | 580,683 | — | 1,483,753 | 8,495,994 |
2018 | 653,238 | — | 4,648,404 | — | 367,814 | — | 357,376 | 6,026,832 | |
Peter B. Thompson | 2020 | 664,423 | 1,750,000 | 4,112,662 | — | 863,750 | — | 34,873 | 7,425,708 |
SVP, Chief Product Officer | 2019 | 240,385 | 3,500,000 | 7,852,346 | — | 182,031 | — | 9,615 | 11,784,377 |
Kristin A. Yetto | 2020 | 716,346 | — | 3,701,108 | — | 1,074,519 | — | 11,658 | 5,503,631 |
SVP, Chief People Officer | 2019 | 637,500 | — | 7,302,044 | — | 616,781 | — | 11,200 | 8,567,525 |
Scott F. Schenkel(3) | 2020 | 389,423 | 858,696 | 8,225,324 | — | 778,846 | — | 32,545,934 | 42,798,223 |
Former Interim Chief | 2019 | 750,000 | 375,000 | 15,515,744 | — | 967,500 | — | 39,012 | 17,647,255 |
Executive Officer | 2018 | 736,538 | — | 7,251,530 | — | 574,500 | — | 11,000 | 8,573,568 |
Wendy Jones(4) | 2020 | 621,769 | — | 2,878,000 | — | 816,072 | — | 11,795,397 | 16,111,238 |
Former SVP, Global | 2019 | 600,000 | 39,231 | 2,826,000 | — | 524,250 | — | 11,200 | 4,000,681 |
Operations | 2018 | 554,231 | — | 10,897,299 | — | 324,225 | — | 11,000 | 11,786,755 |
(1) | Mr. Iannone was appointed as President and Chief Executive Officer effected as of April 27, 2020. |
(2) | Mr. Lee’s base salary was converted from Singapore dollars to U.S. dollars based on Company FX planning rates. |
(3) | Mr. Schenkel served as the Interim CEO until Mr. Iannone’s appointment as CEO. Effective as of April 27, 2020, Mr. Schenkel assumed the role of Senior Advisor until his departure from the Company on June 19, 2020. |
(4) | Ms. Jones departed the Company on December 16, 2020. |
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Executive Compensation / Executive Compensation Tables
Bonus (Column (d))
Mr. Iannone received an equity transition payment of $3,500,000, subject to repayment if he leaves prior to the first anniversary of his start date and partial repayment if he leaves prior to the end of his third year of employment.
Beginning in October 2019, Mr. Cring received a monthly performance bonus in the amount of $70,000 for each month he served as Interim CFO. In recognition that Mr. Cring served as interim CFO for the full 2020 fiscal year, the Compensation Committee approved an adjustment to the amount of the monthly performance bonuses for 2020 to recognize the actual Company financial component payout and actual individual bonus payout percentage under the eIP. The adjustment to the 2020 monthly performance bonuses was a one-time payment of $432,000.
In 2020, Mr. Thompson received an equity transition payment of $1,750,000, subject to repayment if he leaves prior to the first anniversary of his start date and partial repayment if he leaves prior to the end of his third year of employment.
Beginning in October 2019, Mr. Schenkel received a monthly performance bonus in the amount of $125,000 for each month he served as Interim CEO.
Stock Awards (Column (e))
The amounts reported in the Stock Awards column represent the aggregate grant date fair value of time-based restricted stock units, or RSUs, and performance-based restricted stock units, or PBRSUs, granted to each of our NEOs in each of the applicable years, calculated in accordance with the Financial Accounting Standards Board’s Accounting Standards Codification Topic 718, Compensation — Stock Compensation. The grant date fair value of RSUs is determined using the fair value of our common stock on the date of grant, and the grant date fair value of PBRSUs and TSR PSU award is calculated based on the fair value of our common stock on the date of grant and the probable outcome of the performance measures for the applicable performance period as of the date on which the PBRSUs and TSR PSUs are granted. This estimated fair value for PBRSUs and TSR PSUs is different from (and lower than) the maximum value set forth below. The equity incentive awards included in this column were all awarded under the Company’s 2008 Equity Incentive Award Plan, as amended and restated.
RSUs: RSU awards were granted to our NEOs in connection with the Company’s annual equity grant on April 1, 2020 with a grant date value of $2,057,770 for Mr. Cring, $1,809,686 for Mr. Lee, $1,645,065 for Mr. Thompson, $1,480,443 for Ms. Yetto, $3,290,130 for Mr. Schenkel and $1,151,200 for Ms. Jones. On May 7, 2020, Mr. Iannone was granted two new hire RSU awards with grant date values of $5,024,966 and $6,804,662, respectively.
PBRSUs: PBRSUs provide an opportunity for our NEOs to receive time-based RSUs if the performance measures for a particular time period — typically 24 months — are met. The TSR PSU award is a one-time award specific to Mr. Iannone. For a description of the performance measures for the 2020-2021 PBRSU awards and TSR PSU awards, see Compensation Discussion and Analysis — Elements of Our Executive Compensation Program — Equity Incentive Awards above.
For 2020, PBRSU awards were granted to our NEOs in connection with the Company’s annual equity grant on April 1, 2020 with a grant date value of $2,714,530 for Mr. Lee, $2,467,597 for Mr. Thompson, $2,220,665 for Ms. Yetto, $4,935,194 for Mr. Schenkel and $1,726,800 for Ms. Jones. On May 7, 2020, Mr. Iannone was granted a PBRSU award with a grant date value of $7,537,448. Mr. Iannone also received a TSR PSU award with a grant date value of $7,219,548.
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Executive Compensation Tables / Executive Compensation
Assuming the highest level of performance is achieved under the applicable performance measures for the 2020-2021 PBRSU awards (including the TSR PSU award for Mr. Iannone), the maximum possible value of the PBRSU awards allocated to our NEOs for such performance period using the fair value of our common stock on the date that such awards were granted is presented below:
Name | Maximum Value of PBRSUs (as of Grant Date) | ||
Mr. Iannone | $ | 27,511,728 | |
Mr. Cring(1) | N/A | ||
Mr. Lee | $ | 6,514,872 | |
Mr. Thompson | $ | 5,922,233 | |
Ms. Yetto | $ | 5,329,596 | |
Mr. Schenkel | $ | 11,844,466 | |
Ms. Jones | $ | 4,144,320 |
(1) | Mr. Cring is not eligible for our PBRSU program due to his position as VP. |
The value that our NEOs received in 2020 from the vesting of stock awards is reflected in the 2020 Option Exercises and Stock Vested table below. Additional information on all outstanding stock awards as of December 31, 2020 is reflected in the 2020 Outstanding Equity Awards at Fiscal Year-End table below.
Option Awards (Column (f))
Since 2016, in accordance with our revised equity guidelines, no option awards were granted to our NEOs.
The value that our NEOs received in 2020 from the exercise of previously granted stock options is reflected in the 2020 Option Exercises and Stock Vested table below. Additional information on all outstanding option awards as of December 31, 2020 is reflected in the 2020 Outstanding Equity Awards at Fiscal Year-End table below.
Non-Equity Incentive Plan Compensation (Column (g))
The amounts reported in the Non-Equity Incentive Plan Compensation column represent amounts earned by each of our NEOs under the annual cash incentive plan for services they rendered in each of the applicable years. See Compensation Discussion and Analysis — Elements of Our Executive Compensation Program — Annual Cash Incentive Awards above for more information.
All Other Compensation (Column (i))
The amounts reported in the All Other Compensation column reflect:
a) | An amount of $11,400 for Mr. Cring, Mr. Thompson, Ms. Yetto, Mr. Schenkel, and Ms. Jones representing the maximum matching contributions made by the Company to the Company’s 401(k) savings plan for the benefit of our U.S.-based NEOs, which also is the same maximum amount applicable to each participating employee for 2020. Mr. Lee is not eligible to participate in the Company’s 401(k) savings plan and therefore did not receive any matching contributions under the plan, and Mr. Iannone did not participate in the plan. |
b) | In his role as SVP, International, Mr. Lee was provided certain expatriate allowances due to extended travel and temporary relocations, totaling $611,791. |
c) | Mr. Iannone was permitted personal airplane usage in 2020. $52,063 is included in the amount for Mr. Iannone to reflect his personal airplane use. This amount is the cost of fuel, oil, lubricants, and other additives related to the applicable trips times two. Mr. Iannone also received security and IT support in the amount of $24,075. |
d) | Mr. Cring received security and IT support in the amount of $19,921. Mr. Cring also received COVID-19 support payments in the amount of $2,400 that were applicable to all employees at the VP level and below. |
e) | Mr. Thompson received security and IT support in the amount of $23,473. |
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Executive Compensation / Executive Compensation Tables
f) | Mr. Schenkel received severance payments consistent with his 2014 offer letter in the amount of $32,462,828 in exchange for his execution and non-revocation of a release of claims against the Company. This amount includes (i) two times his annual base salary which equals $1,500,000; (ii) two times his annual target bonus amount which equals $1,500,000; (iii) a prorated portion of the award under the eIP that Mr. Schenkel otherwise would have earned and been paid (using his accrued eligible compensation under the eIP through the last day of employment) for the 2020 fiscal year under the eIP which equals $778,846 (which is reflected in the “Non-Equity Plan Compensation” column of the Summary Compensation Table); (iv) the amount of $5,223,508, which is the dollar value of outstanding and unvested RSU awards that were treated as vested under the 2014 offer letter; (v) the amount of $23,600,600, which is the dollar value of outstanding and unvested PBRSU awards that were treated as vested under the 2014 offer letter; and (vi) the amount of $638,719, which is the dollar value of dividend equivalents associated with the equity awards that were treated as vested under the 2014 offer letter. Consistent with his 2014 offer letter, the 10-day average price immediately prior to his June 19, 2020 departure date was used to value his equity at a conversion price of $48.51. In addition to contractual severance, Mr. Schenkel received $71,005 for accrued paid time off. |
g) | Ms. Jones received severance payments consistent with the Standard Severance Plan in the amount of $11,725,974 in exchange for her execution and non-revocation of a release of claims against the Company. This amount includes (i) one times her annual base salary which equals $620,000; (ii) one times her annual target bonus amount which equals $465,000; (iii) a prorated portion of the award under the eIP that Ms. Jones otherwise would have earned and been paid (using her accrued eligible compensation under the eIP through the last day of employment) for the 2020 fiscal year under the eIP which equals $816,072 (which is reflected in the “Non-Equity Plan Compensation” column of the Summary Compensation Table); (iv) the amount of $2,405,317, which is the dollar value of outstanding and unvested RSU awards that were treated as vested under the Standard Severance Plan; (v) the amount of $8,015,400, which is the dollar value of outstanding and unvested PBRSU awards that were treated as vested under the Standard Severance Plan; (vi) a COBRA premiums payment in the amount of $59,012; and (vii) the amount of $161,245, which is the dollar value of dividend equivalents associated with the equity awards that were treated as vested under the Standard Severance Plan. The conversion prices of for the value of Ms. Jones’ equity was determined in a manner consistent with the Standard Severance Plan. In addition to contractual severance, Ms. Jones received $57,636 for accrued paid time off. |
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Executive Compensation Tables / Executive Compensation
2020 Grants of Plan-Based Awards
The following table, footnotes, and narrative set forth certain information regarding grants of plan-based awards to each of our NEOs for the fiscal year ended December 31, 2020.
All Other | ||||||||||||
Stock | All Other | |||||||||||
Awards: | Option | |||||||||||
Number | Awards: | Exercise | ||||||||||
Estimated Future Payouts | Estimated Future Payouts | of | Number of | or Base | ||||||||
Under Non-Equity Incentive | Under Equity Incentive | Shares | Securities | Price of | Grant | |||||||
Plan Awards | Plan Awards | of Stock | Underlying | Option | Date Fair | |||||||
Approval | Grant | Threshold | Target | Maximum | Threshold | Target | Maximum | or Units | Options | Awards | Value | |
Name (a) | Date (b) | Date (c) | ($)(d) | ($)(e) | ($)(f) | (#)(g) | (#)(h) | (#)(i) | (#)(j) | (#)(j) | ($/Sh)(l) | ($)(m) |
Mr. Iannone | ||||||||||||
eIP - Company Performance | N/A | N/A | 750,000 | 1,500,000 | 3,000,000 | — | — | — | — | — | — | — |
eIP - Individual Performance | N/A | N/A | — | 500,000 | 1,000,000 | — | — | — | — | — | — | — |
PBRSUs (2020-2021 Performance period) | 4/5/20 | 5/7/20 | — | — | — | 72,878 | 182,196 | 437,270 | — | — | — | 7,537,449 |
TSR PSUs | 4/5/20 | 5/7/20 | — | — | — | 56,937 | 113,873 | 227,746 | — | — | — | 7,219,548 |
RSUs | 4/5/20 | 5/7/20 | — | — | — | — | — | — | 121,464 | 5,024,966 | ||
RSUs | 4/5/20 | 5/7/20 | — | — | — | — | — | — | 164,483 | — | — | 6,804,662 |
Mr. Cring | ||||||||||||
eIP - Company Performance | N/A | N/A | 96,620 | 193,240 | 386,481 | — | — | — | — | — | — | — |
eIP - Individual Performance | N/A | N/A | — | 64,413 | 128,827 | — | — | — | — | — | — | — |
RSUs | 1/8/20 | 4/1/20 | — | — | — | — | — | — | 71,500 | — | — | 2,057,770 |
Mr. Lee | ||||||||||||
eIP - Company Performance | N/A | N/A | 199,569 | 399,139 | 798,278 | — | — | — | — | — | — | — |
eIP - Individual Performance | N/A | N/A | — | 133,046 | 266,093 | — | — | — | — | — | — | — |
PBRSUs (2020-2021 Performance period) | 1/8/20 | 4/1/20 | — | — | — | 37,728 | 94,320 | 226,368 | — | — | — | 2,714,530 |
RSUs | 1/8/20 | 4/1/20 | — | — | — | — | — | — | 62,880 | — | — | 1,809,686 |
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All Other | ||||||||||||
Stock | All Other | |||||||||||
Awards: | Option | |||||||||||
Number | Awards: | Exercise | ||||||||||
Estimated Future Payouts | Estimated Future Payouts | of | Number of | or Base | ||||||||
Under Non-Equity Incentive | Under Equity Incentive | Shares | Securities | Price of | Grant | |||||||
Plan Awards | Plan Awards | of Stock | Underlying | Option | Date Fair | |||||||
Approval | Grant | Threshold | Target | Maximum | Threshold | Target | Maximum | or Units | Options | Awards | Value | |
Name (a) | Date (b) | Date (c) | ($)(d) | ($)(e) | ($)(f) | (#)(g) | (#)(h) | (#)(i) | (#)(j) | (#)(j) | ($/Sh)(l) | ($)(m) |
Mr. Thompson | ||||||||||||
eIP - Company Performance | N/A | N/A | 161,953 | 323,906 | 647,812 | — | — | — | — | — | — | — |
eIP - Individual Performance | N/A | N/A | — | 107,969 | 215,937 | — | — | — | — | — | — | — |
PBRSUs (2020-2021 Performance period) | 1/8/20 | 4/1/20 | — | — | — | 34,296 | 85,740 | 205,776 | — | — | — | 2,467,597 |
RSUs | 1/8/20 | 4/1/20 | — | — | — | — | — | — | 57,160 | — | — | 1,645,065 |
Ms. Yetto | ||||||||||||
eIP - Company Performance | N/A | N/A | 201,472 | 402,945 | 805,889 | — | — | — | — | — | — | — |
eIP - Individual Performance | N/A | N/A | — | 134,315 | 268,630 | — | — | — | — | — | — | — |
PBRSUs (2020-2021 Performance period) | 1/8/20 | 4/1/20 | — | — | — | 30,864 | 77,160 | 185,184 | — | — | — | 2,220,665 |
RSUs | 1/8/20 | 4/1/20 | — | — | — | — | — | — | 51,440 | — | — | 1,480,443 |
Mr. Schenkel | ||||||||||||
eIP - Company Performance | N/A | N/A | 194,712 | 389,423 | 778,846 | — | — | — | — | — | — | — |
eIP - Individual Performance | N/A | N/A | — | — | — | — | — | — | — | — | — | — |
PBRSUs (2020-2021 Performance period) | 1/8/20 | 4/1/20 | — | — | — | 68,592 | 171,480 | 411,552 | — | — | — | 4,935,194 |
RSUs | 1/8/20 | 4/1/20 | — | — | — | — | — | — | 114,320 | — | — | 3,290,130 |
Ms. Jones | ||||||||||||
eIP - Company Performance | N/A | N/A | 174,873 | 349,745 | 699,490 | — | — | — | — | — | — | — |
eIP - Individual Performance | N/A | N/A | — | 116,582 | 233,163 | — | — | — | — | — | — | — |
PBRSUs (2020-2021 Performance period) | 1/8/20 | 4/1/20 | — | — | — | 24,000 | 60,000 | 144,000 | — | — | — | 1,726,800 |
RSUs | 1/8/20 | 4/1/20 | — | — | — | — | — | — | 40,000 | — | — | 1,151,200 |
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Executive Compensation Tables / Executive Compensation
Estimated Future Payouts Under Non-Equity Incentive Plan Awards (Annual Cash Incentive Plan) (Columns (d), (e), and (f))
The amounts reported under these columns relate to the possible awards under the annual cash incentive plan. In 2020, the total annual target incentive amounts under the annual cash incentive plan for the NEOs were as follows:
Mr. Iannone | $2,000,000 |
Mr. Cring | $ 257,654 |
Mr. Lee | $ 532,185 |
Mr. Thompson | $ 431,875 |
Ms. Yetto | $ 537,260 |
Mr. Schenkel | $ 389,423 |
Ms. Jones | $ 466,327 |
The total 2020 annual target incentive amounts under the annual cash incentive plan for the NEOs were allocated 75% to Company performance and 25% to individual performance. No payment occurs for the individual performance component of the annual cash incentive plan unless the minimum thresholds for both FX-neutral revenue and non-GAAP net income are met; for 2020, both these Company performance thresholds were met.
Actual payouts to our NEOs under the annual cash incentive plan for the fiscal year ended December 31, 2020 are reflected in the Non-Equity Incentive Plan Compensation column in the 2020 Summary Compensation Table above.
eIP—Company Performance:The amounts shown in the rows entitled “eIP – Company Performance” reflect estimated payouts for the fiscal year ended December 31, 2020 under the annual cash incentive plan for the portion of the award payable based on the Company’s performance, as follows:
· | Threshold: The amounts shown in this column reflect the minimum payment levels if the minimum FX-neutral revenue and non-GAAP net income thresholds are met, which are 50% of the amounts shown under the Target column. |
· | Target: The amounts shown in this column reflect the target payment levels if target non-GAAP net income is met. |
· | Maximum: The amounts shown in this column represent the maximum amounts payable based on Company performance, which are 200% of the amounts shown under the Target column. |
eIP—Individual Performance: The amounts shown in the rows entitled “eIP – Individual Performance” reflect estimated payouts for the fiscal year ended December 31, 2020 under the annual cash incentive plan for the portion of the award payable based on individual performance, as follows:
· | Threshold: Although there are no thresholds under the annual cash incentive plan for individual performance, there is no payout for individual performance unless the minimum thresholds for both Company-wide FX-neutral revenue and non-GAAP net income are met. In addition, in circumstances where the Company’s financial performance is above its thresholds but below its targets, a modifier is applied to the individual performance component to reduce it proportionately based on the Company financial performance component. |
· | Target: The amounts shown in this column reflect 100% of the target award for individual performance. |
· | Maximum: The amounts shown in this column are 200% of the amounts shown under the Target column. |
See Compensation Discussion and Analysis — Elements of Our Executive Compensation Program — Annual Cash Incentive Awards above.
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Executive Compensation / Executive Compensation Tables
Estimated Future Payouts Under Equity Incentive Plan Awards (PBRSUs) (Columns (g), (h), and (i))
The amounts shown reflect estimated payouts of PBRSUs for the 2020-2021 performance period, as follows:
· | Threshold: The amounts shown in this column reflect the awards if the minimum FX-neutral revenue and non-GAAP operating margin dollar thresholds are met and the lowest return on invested capital and the Payments modifier is applied, and are 20% of the amounts shown under the Target column. |
· | Target: The amounts shown in this column reflect the awards if the target FX-neutral revenue and non-GAAP operating margin dollar amounts are met, and the target return on invested capital and the Payments modifier is applied. |
· | Maximum: The amounts shown in this column reflect the awards if the maximum FX-neutral revenue and non-GAAP operating margin dollar amounts are met and the maximum return on invested capital and the Payments modifier is applied, and are 240% of the amounts shown under the Target column. |
Mr. Iannone’s TSR PSU award is also reflected. For further discussion of the PBRSUs and TSR PSUs, including their vesting schedules, see Compensation Discussion and Analysis — Elements of Our Executive Compensation Program — Equity Incentive Awards — PBRSU Program above.
All Other Stock Awards: Number of Shares or Stock Units (RSUs) (Column (j))
The awards reflect the number of RSUs on the grant date. RSU awards granted to our NEOs in 2020 generally vest over a four-year period with 1/16th of the shares underlying the RSU award vesting on June 15, 2020 and additional 1/16th of the shares underlying the RSU award vesting each quarter thereafter. Mr. Iannone’s transition RSU award vests over a two-year period.
Grant Date Fair Value (Column (m))
The grant date fair value of each RSU award was calculated using the fair value of our common stock on the date of grant. The estimated fair value of PBRSUs and TSR PSUs was calculated based on the fair value of our common stock on the date of grant and the probable outcome of applicable performance measures as of the date on which the awards were granted for accounting purposes.
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Executive Compensation Tables / Executive Compensation
2020 Outstanding Equity Awards at Fiscal Year-End
The following table and footnotes set forth certain information regarding outstanding equity awards for each of our NEOs as of December 31, 2020.
Name | Number of | Number of | Equity | Option Price ($) | Option |
Option Date | Number of That (#) | Market That ($)(1) | Stock | Equity Plan (#) | Equity Plan Unearned ($)(2) |
Mr. Iannone | — | — | — | — | — | — | 121,464 | 6,103,566 | 5/7/2020 | ||
164,483 | 8,265,271 | 5/7/2020 | |||||||||
665,016 | 33,417,074 | ||||||||||
Mr. Cring | 11,959 | — | — | 23.21 | 4/1/2015 | 4/1/2022 | |||||
2,816 | 141,504 | 4/1/2017 | |||||||||
939 | 47,185 | 4/1/2017 | |||||||||
14,440 | 725,610 | 5/15/2018 | |||||||||
28,125 | 1,413,281 | 4/1/2019 | |||||||||
59,087 | 2,969,122 | 10/15/2019 | |||||||||
58,094 | 2,919,224 | 4/1/2020 | |||||||||
Mr. Lee | 8,319 | — | — | 23.21 | 4/1/2015 | 4/1/2022 | |||||
3,004 | 150,951 | 4/1/2017 | |||||||||
6,017 | 302,354 | 9/15/2017 | |||||||||
14,440 | 725,610 | 4/1/2018 | |||||||||
34,155 | 1,716,289 | 4/1/2019 | |||||||||
51,090 | 2,567,273 | 4/1/2020 | |||||||||
29,803(3) | 1,497,601 | 4/1/2018 | |||||||||
287,813(4) | 14,462,603 | 4/1/2019 | |||||||||
226,368 | 11,374,992 | ||||||||||
Mr. Thompson | 27,376 | 1,375,644 | 8/15/2019 | ||||||||
68,440 | 3,439,110 | 8/15/2019 | |||||||||
46,443 | 2,333,761 | 4/1/2020 | |||||||||
188,744(4) | 9,484,386 | 8/15/2019 | |||||||||
205,776 | 10,340,244 |
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Executive Compensation / Executive Compensation Tables
Name | Number of | Number of | Equity | Option Price ($) | Option |
Option Date | Number of That (#) | Market That ($)(1) | Stock | Equity Plan (#) | Equity Plan Unearned ($)(2) |
Ms. Yetto | 2,816 | 141,504 | 4/1/2017 | ||||||||
12,996 | 653,049 | 4/1/2018 | |||||||||
25,313 | 1,271,978 | 4/1/2019 | |||||||||
29,544 | 1,484,586 | 10/15/2019 | |||||||||
41,795 | 2,100,199 | 4/1/2020 | |||||||||
26,822(3) | 1,347,806 | 4/1/2018 | |||||||||
213,300(4) | 10,718,325 | 4/1/2019 | |||||||||
124,476(4) | 6,254,919 | 10/15/2019 | |||||||||
185,184 | 9,305,496 | ||||||||||
Mr. Schenkel(5) | — | — | — | — | — | — | — | — | — | — | — |
Ms. Jones(6) | — | — | — | — | — | — | — | — | — | — | — |
(1) | Market Value is calculated based on a price per share of $50.25, which was the closing price of our common stock on December 31, 2020. |
(2) | In accordance with the SEC executive compensation disclosure rules, represents the
|
(3) | Earned in connection with
|
(4) | Earned in connection with achievement of the 2019-2020 PBRSU
78 ebay / 2021 Proxy Statement Executive Compensation Tables / Executive Compensation 2020 Options Exercises and Stock Vested The following table and footnotes set forth the number of shares acquired and the value realized upon exercise of stock options and the vesting of stock awards for each of our NEOs for the fiscal year ended December 31, 2020.
|