UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) ofthe Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant x
Filed by a Party other than the Registrant o
Check the appropriate box:
o | Preliminary Proxy Statement | oConfidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
|
|
|
x | Definitive Proxy Statement | |
|
|
|
o | Definitive Additional Materials | |
|
|
|
o | Soliciting Material Pursuant to §240.14a-12 |
Sohu.com Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other than Registrant)
Payment of Filing Fee (Check the appropriate box):
x | No fee required |
|
|
o | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
| (1) | Title of each class of securities to which transaction applies: |
|
|
|
| (2) | Aggregate number of securities to which transaction applies: |
|
|
|
| (3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): |
|
|
|
| (4) | Proposed maximum aggregate value of transaction: |
|
|
|
| (5) | Total fee paid: |
o | Fee paid previously with preliminary materials. |
o | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form of Schedule and the date of its filing. |
| (1) | Amount Previously Paid: |
|
|
|
| (2) | Form, Schedule or Registration Statement No.: |
|
|
|
| (3) | Filing Party: |
|
|
|
| (4) | Date Filed: |
Chief Executive Officer
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
OF
SOHU.COM INC.
TO BE HELD June 17, 2011
10:00 A.M. BEIJING TIME
1) | To elect four directors, who shall serve for a two-year term or until their earlier death, resignation or removal; |
2) | To make an advisory vote on executive compensation; |
3) | To make advisory vote on the frequency of future advisory votes on executive compensation; |
4) | To ratify the appointment of PricewaterhouseCoopers Zhong Tian CPAs Limited Company as our independent auditors for the fiscal year ending December 31, 2011; and |
5) | To consider and act upon all other matters which may properly come before the Annual Meeting or any adjournment or postponement thereof. |
Secretary
PROXY STATEMENT | ||||||
PROPOSAL I. ELECTION OF DIRECTORS | 2 | |||||
GENERAL INFORMATION RELATING TO OUR BOARD OF DIRECTORS | 6 | |||||
BENEFICIAL OWNERSHIP OF COMMON STOCK | 9 | |||||
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE | 10 | |||||
TRANSACTIONS WITH RELATED PERSONS | 10 | |||||
AUDIT COMMITTEE REPORT | 12 | |||||
EXECUTIVE COMPENSATION | 13 | |||||
EXECUTIVE OFFICERS | 13 | |||||
COMPENSATION DISCUSSION AND ANALYSIS | 13 | |||||
COMPENSATION COMMITTEE REPORT | 21 | |||||
SUMMARY COMPENSATION TABLE | 22 | |||||
GRANTS OF PLAN-BASED AWARDS | 23 | |||||
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END | 25 | |||||
OPTION EXERCISES AND STOCK VESTED | 26 | |||||
PENSION BENEFITS | 26 | |||||
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL | 26 | |||||
DIRECTOR COMPENSATION | 29 | |||||
PROPOSAL II. ADVISORY VOTE ON EXECUTIVE COMPENSATION | 30 | |||||
PROPOSAL III. ADVISORY VOTE ON THE FREQUENCY OF FUTURE ADVISORY VOTES ON EXECUTIVE COMPENSATION | 31 | |||||
PROPOSAL IV. RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS | 31 | |||||
PRINCIPAL ACCOUNTANT FEES, SERVICES AND PRE-APPROVAL PROCESS | 32 | |||||
MISCELLANEOUS | 33 |
Level 12, Sohu.com Internet Plaza
No. 1 Unit Zhongguancun East Road, Haidian District
Beijing 100084, People’s Republic of China
(011) 8610-6272-6666
TO BE HELD June 17, 2011
10:00 A.M. BEIJING TIME
PROXY STATEMENT
Name, Age, Positions and Offices with Sohu.com Inc. | | Principal Occupation, Business Experience and Directorships held with Other Public Corporations during the past Five Years | | Term of Office as Director | ||||||
---|---|---|---|---|---|---|---|---|---|---|
Dr. Charles Zhang Chairman of our Board and Chief Executive Officer. 46 years old. Director since 1996. | Dr. Charles Zhang is our founder and has been Chairman of our Board and Chief Executive Officer since August 1996. Dr. Charles Zhang also served as our President from August 1996 to July 2004. Prior to founding Sohu.com Inc., Dr. Charles Zhang worked for Internet Securities Inc. and helped to establish its China operations. Prior to that, Dr. Charles Zhang worked as Massachusetts Institute of Technology’s liaison officer with China. Dr. Charles Zhang has a Ph.D in experimental physics from Massachusetts Institute of Technology (“MIT”) and a Bachelor of Science degree from Tsinghua University in Beijing. Dr. Charles Zhang is a native of the People’s Republic of China. Dr. Charles Zhang is also the Chairman of the Board of Changyou.com Limited, our publicly-traded massively multi-player online role-playing game, or MMORPG, subsidiary. We believe Dr. Charles Zhang’s qualifications to serve on our Board include his (i) position as our Chief Executive Officer, (ii) history as the founder of our company and status as one of the best-known and most successful entrepreneurs in China, (iii) general reputation and track record as an innovator, visionary and early mover in the Internet industry in China and (iv) deep understanding of the Chinese Internet industry. | Dr. Charles Zhang’s term expires at the 2011 Annual Meeting. | ||||||||
Mr. Charles Huang Chief Executive Officer and Chairman of Netbig Education Holdings Ltd. 41 years old. Director since 2001. (1)(3) | Mr. Huang is the Founder, Chief Executive Officer and Chairman of Netbig Education Holdings Ltd., a leading education enterprise in China. Prior to founding Netbig in 1999, Mr. Huang served as Executive Director and Head of Asia Securitization Group of Deutsche Bank, New York and Hong Kong, as well as Senior Vice President of Prudential Securities Inc., New York. He holds a Master of Science degree in Computer Science from MIT and a Bachelor of Science degree from the University of Science and Technology of China. Mr. Huang is also a Chartered Financial Analyst. We believe Mr. Huang’s qualifications to serve on our Board include his (i) qualification as a Chartered Financial Analyst and related experience in senior positions in the corporate finance industry in the U.S. and Asia, (ii) academic credentials and experience in the computer industry, (iii) status and track record as a successful entrepreneur and (iv) extensive experience managing an internet company. | Mr. Huang’s term expires at the 2011 Annual Meeting. |
Name, Age, Positions and Offices with Sohu.com Inc. | | Principal Occupation, Business Experience and Directorships held with Other Public Corporations during the past Five Years | | Term of Office as Director | ||||||
---|---|---|---|---|---|---|---|---|---|---|
Dr. Dave Qi Professor of Accounting and Associate Dean, the Cheung Kong Graduate School of Business. 47 years old. Director since 2005. (1)(2)(3) | Dr. Qi is a Professor of Accounting and the Associate Dean of the Cheung Kong Graduate School of Business. He began teaching at the Cheung Kong Graduate School of Business in 2002 and was the founding Director of the Executive MBA program. Before joining the Cheung Kong Graduate School of Business, Dr. Qi was an Associate Professor at the School of Accounting of the Chinese University of Hong Kong. Dr. Qi has published many articles and research essays on accounting, financial reporting, capital market and other related topics. He has a Ph.D. in accounting from the Eli Broad Graduate School of management of Michigan State University, a Master of Business Administration from the University of Hawaii at Manoa and a Bachelor of Science and a Bachelor of Arts degree from Fudan University. Dr. Qi is currently a member of the American Accounting Association. Dr. Qi also serves as director of the following public companies: Focus Media Holding Ltd. (NASDAQ), AutoNavi Holdings Limited (NASDAQ), BONA Film Group (NASDAQ), Daqo New Energy Corp. (NYSE), Honghua Group Limited (HKEx), CTV Golden Bridge International Media Co., LTD. (HKEx), China Huiyuan Juice Group Limited (HKEx), and China Vanke Co., Ltd. (Shenzhen Stock Exchange). We believe Dr. Qi’s qualifications to serve on our Board include his (i) strong academic credentials and working experience with accounting and finance in general, and with accounting and finance in China in particular, (ii) status as associate Dean of one of the best business schools in China, and (iii) extensive connections in the telecom and tech industries in China. | Dr. Qi’s term expires at the 2011 Annual Meeting. | ||||||||
Mr. Shi Wang Chairman of China Vanke Co., Ltd. 60 years old. Director since 2005. (3) | Mr. Wang is the Chairman of the Board of Directors of China Vanke Co., Ltd., of which he also served as General Manager from 1991 to 1999. Mr. Wang founded the Shenzhen Exhibition Center of Modern Science and Education Equipment in 1984, which is the predecessor of China Vanke Co., Ltd. Mr. Wang is the Executive Manager of the China Real Estate Association and is Deputy Director of the City Housing Development Council of the China Real Estate Association. We believe Mr. Wang’s qualifications to serve on our Board include (i) history as the founder of Vanke, a PRC listed company, (ii) status and track record as a successful entrepreneur in China, and (iii) extensive experience managing a listed company. | Mr. Wang’s term expires at the 2011 Annual Meeting. | ||||||||
Dr. Edward B. Roberts Professor of Management of Technology at Massachusetts Institute of Technology’s Alfred P. Sloan School of Management. 75 years old. Director since 1996. (2)(3) | Dr. Roberts is the David Sarnoff Professor of Management of Technology at MIT’s Alfred P. Sloan School of Management. Dr. Roberts chaired MIT’s research and educational programs in the management of technological innovation from 1967 to 1993 and also founded and chairs the MIT Entrepreneurship Center. Dr. Roberts is currently a director of Medical Information Technology, Inc. Dr. Roberts has authored over 160 articles and eleven books, one of which is Entrepreneurs in High Technology (Oxford University Press, 1991). Dr. Roberts received four degrees from MIT, including a Ph.D in 1962. We believe Dr. Roberts’ qualifications to serve on our Board include his (i) decades of experience teaching at the Alfred P. Sloan School of Management, (ii) related supervisory, board and committee positions, many of which have had a particular emphasis on technological innovation and entrepreneurship, and (iii) extensive experience investing in and serving on the boards of directors of, growing companies. | Dr. Roberts’ term expires at the 2012 Annual Meeting. |
Name, Age, Positions and Offices with Sohu.com Inc. | | Principal Occupation, Business Experience and Directorships held with Other Public Corporations during the past Five Years | | Term of Office as Director | ||||||
---|---|---|---|---|---|---|---|---|---|---|
Dr. Zhonghan Deng Chairman and Chief Executive Officer of Vimicro Corporation. 43 years old. Director since 2007. (1)(3) | Dr. Deng is the Chief Executive Officer and Chairman of the Board of Directors of Vimicro Corporation (NASDAQ: VIMC), which he co-founded in 1999. Dr. Deng received a Ph.D. in electrical engineering and computer sciences, a Master of Science degree in economics and a Master of Science degree in physics from the University of California, Berkeley. After graduating from Berkeley, Dr. Deng worked as a research scientist for International Business Machines Corporation at the T.J. Watson Research Center in Yorktown Heights, New York. We believe Dr. Deng’s qualifications to serve on our Board include (i) academic credentials and experience in the computer industry, (ii) history as the founder of Vimicro, a NASDAQ listed company, (iii) status and track record as a successful entrepreneur in China, and (iv) extensive experience managing a NASDAQ listed company. | Dr. Deng’s term expires at the 2012 Annual Meeting. |
(1) | member of our Audit Committee |
(2) | member of our Compensation Committee |
(3) | member of our Nominating Committee |
OUR BOARD OF DIRECTORS
and approves restricted stock unit, stock option grants and other share-based awards under our equity incentive plans, and otherwise determines compensation levels and performs such other functions regarding compensation as our Board may delegate to our Compensation Committee. Our Compensation Committee does not have a written charter. Our Compensation Committee designed an executive compensation program in order to reward excellent performance and retain talented executive officers through a combination of cash and equity incentive awards. The Compensation Discussion and Analysis below provides additional information regarding the Compensation Committee’s determination of named executive officer and director compensation levels and our Compensation Committee’s policies and procedures in making such determinations.
• | The candidate’s name, age, business address, residence address, principal occupation or employment, the class and number of shares of our capital stock the candidate beneficially owns, a brief description of any |
direct or indirect relationships with us and other information that would be required in a proxy statement soliciting proxies for the election of the candidate as a director; |
• | A signed consent of the nominee to being named as a nominee, to cooperate with reasonable background checks and personal interviews and to serve as a director, if elected; and |
• | As to the stockholder proposing such nominee, that stockholder’s name and address, the class and number of shares of our capital stock the stockholder beneficially owns, a description of all arrangements or understandings between the stockholder and the candidate and any other person or persons (including their names) pursuant to which the recommendation is being made, a list of all other companies that the stockholder has recommended the candidate to for election as a director in that fiscal year, and a representation that the stockholder intends to appear in person or by proxy at the meeting to nominate the person named in its notice. |
• | Appropriate weighting towards long-term incentive compensation, with share incentives representing the higher percentage, discourages short-term risk taking; |
• | goals are appropriately set to avoid targets that, if not achieved, result in a large percentage loss of compensation; |
• | we do not rely on hard targets that can only be evaluated with reference to numerical results, so as to minimize the risk of our executives’ focusing excessively on short-term results; and |
• | we have a limit on the total amount of compensation that can be paid to each executive, which helps reduce the risk of our executives’ pursuing achievement of short term goals in order to increase compensation. |
Name and Address of Beneficial Owner | Amount and Nature of Beneficial Ownership(1) | Percent of Class(1) | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Charles Zhang | 7,442,500 | (2) | 19.39 | % | ||||||
Edward Roberts | 482,308 | (3) | 1.26 | % | ||||||
Charles Huang | 63,971 | (4) | * | |||||||
Carol Yu | 30,000 | (5) | * | |||||||
Shi Wang | 24,971 | (6) | * | |||||||
Dave Qi | 24,971 | (7) | * | |||||||
Xiaochuan Wang | 16,358 | (8) | * | |||||||
Zhonghan Deng | 8,948 | (9) | * | |||||||
Belinda Wang | 6,250 | (10) | * | |||||||
All directors, nominees and executive officers as a group (9 persons) | 8,100,277 | (11) | 21.05 | % | ||||||
Photon Group Limited | 6,737,000 | (12) | 17.59 | % | ||||||
Orbis Investment Management Ltd. | 4,451,690 | (13) | 11.63 | % |
* | Less than 1%. |
(1) | Includes the number of shares and percentage ownership represented by such shares determined to be beneficially owned by a person in accordance with the rules of the SEC. The number of shares beneficially owned by a person includes shares of common stock subject to options or restricted stock units held by that person that are currently exercisable or convertible or exercisable or convertible within 60 days of April 15, 2011. Such shares are deemed outstanding for the purpose of computing the percentage of outstanding shares owned by that person. Such shares are not deemed outstanding, however, for the purpose of computing the percentage ownership of each other person. |
(2) | Includes (i) 87,438 shares of our common stock subject to options exercisable within 60 days of April 15, 2011 and (ii) 6,737,000 shares of our common stock beneficially owned by Photon Group Limited. Dr. Charles Zhang is a Director of Photon Group Limited, and may be deemed to be a beneficial owner of shares owned by it. Dr. Charles Zhang disclaims beneficial ownership of such shares. Dr. Charles Zhang’s address is c/o Sohu.com Inc., Level 12, Sohu.com Internet Plaza, No. 1 Unit Zhongguancun East Road, Haidian District, Beijing 100084, People’s Republic of China. |
(3) | Includes (i) 24,000 shares of our common stock subject to options held by Dr. Edward B. Roberts which are exercisable within 60 days of April 15, 2011; (ii) 117,917 shares held by Edward B. Roberts Trust — 2003, after the transfer of 100,000 shares on April 5, 2011; (iii) 225,420 shares held by the Nancy H. Roberts Trust — 2003, dated as of October 3, 2003; and (iv) 100,000 shares held by Edward B. Roberts 2010 QAIT #2; Edward Roberts and Nancy Roberts are the trustees. Dr. Roberts’s address is 300 Boylston Street, Boston, Massachusetts 02116, U.S.A. |
(4) | Includes 49,000 shares of our common stock subject to options exercisable within 60 days of April 15, 2011. Mr. Huang’s address is Suite 5206, Central Plaza, 18 Harbour Road, Hong Kong. |
(5) | Ms. Carol Yu’s address is c/o Sohu.com Inc., Level 12, Sohu.com Internet Plaza, No. 1 Unit Zhongguancun East Road, Haidian District, Beijing 100084, People’s Republic of China. |
(6) | Includes 10,000 shares of our common stock subject to options exercisable within 60 days of April 15, 2011. Mr. Wang’s address is Vanke Architecture Research Center, No. 68 Meilin Road, Futian District, Shenzhen 518049, People’s Republic of China. |
(7) | Includes 10,000 shares of our common stock subject to options exercisable within 60 days of April 15, 2011. Dr. Qi’s address is c/o Sohu.com Inc., Level 12, Sohu.com Internet Plaza, No. 1 Unit Zhongguancun East Road, Haidian District, Beijing 100084, People’s Republic of China. |
(8) | Includes 5,000 shares of our common stock subject to options exercisable within 60 days of April 15, 2011. Mr. Wang’s address is c/o Sohu.com Inc., Level 12, Sohu.com Internet Plaza, No. 1 Unit Zhongguancun East Road, Haidian District, Beijing 100084, People’s Republic of China. |
(9) | Dr. Deng’s address is c/o Sohu.com Inc., Level 12, Sohu.com Internet Plaza, No. 1 Unit Zhongguancun East Road, Haidian District, Beijing 100084, People’s Republic of China. |
(10) | Ms. Belinda Wang’s address is c/o Sohu.com Inc., Level 12, Sohu.com Internet Plaza, No. 1 Unit Zhongguancun East Road, Haidian District, Beijing 100084, People’s Republic of China. |
(11) | Includes 185,438 shares of our common stock that such persons have the right to acquire pursuant to currently exercisable options or options that may be exercised within 60 days of April 15, 2011. |
(12) | Includes 1,300,000 shares of our common stock pledged to Credit Suisse pursuant to a variable pre-paid forward contract maturing May 9, 2011. Photon Group Limited’s address is c/o Sohu.com Inc., Level 12, Sohu.com Internet Plaza, No. 1 Unit Zhongguancun East Road, Haidian District, Beijing 100084, People’s Republic of China. |
(13) | Orbis Investment Management Ltd’s address is Orbis House, 25 Front Street, Hamilton HM 11, Bermuda, U.S.A. |
• | the nature of the related person’s interest in the transaction; |
• | the material terms of the transaction, including, without limitation, the amount and type of transaction; |
• | the importance of the transaction to the related person and to us; |
• | whether the transaction would impair the judgment of any of our directors or executive officers to act in our best interest; |
• | whether the terms of the transaction are substantially equal to or more favorable to us and no more favorable to the related person than if we had negotiated similar arrangements with non-affiliated third parties; and |
• | any other matters our Audit Committee deems appropriate. |
• | received the written disclosures and the letter from the independent auditors required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent auditors’ communications with the Audit Committee concerning independence; |
• | discussed with the independent auditors the independent auditors’ independence; and |
• | discussed with the independent auditors the matters required to be discussed by the statement on Auditing Standards No. 61, as amended (AICPA, Professional Standards, Vol. 1. AU Section 380), as adopted by the Public Company Accounting Oversight Board in Rule 3200T. |
Mr. Charles Huang
Dr. Zhonghan Deng
• | Cash compensation, which includes an annual salary and the opportunity to earn an annual performance-based cash bonus; |
• | Equity incentive compensation, in the form of stock options and restricted stock units; |
• | Other benefits, in the form of housing allowances, tax equalization, tuition/training reimbursement and premiums paid for health, life and disability insurance; and |
• | Severance benefits. |
• | A discretionary annual performance-based cash bonus that is based on an assessment of the named executive officer’s performance against pre-determined quantitative and qualitative measures within the context of our overall performance as a company and the performance of each business segment for which the named executive officer is responsible to oversee; and |
• | Equity incentive compensation in the form of stock options or restricted stock units, the value of which is contingent upon the performance of our common stock in the public trading market, and which are subject to vesting schedules that require continued service. |
• | Sina Corporation; |
• | NetEase.com, Inc.; |
• | Tencent Holdings Ltd.; |
• | Baidu.com, Inc. ; and |
• | Alibaba.com. |
• | Key financial measurements such as revenue, operating profit, earnings per share and operating margins; |
• | Revenue growth percentage compared with selected competitors to indicate our growth or loss in market share; |
• | Promoting commercial excellence by launching new or continuously improving products or services; |
• | Becoming or remaining as a leading market player and attracting and retaining customers and users; |
• | Achieving excellence in the named executive officer’s business area of responsibility; and |
• | Supporting our values by promoting a culture of integrity and adherence to our code of conduct. |
2010 Increase | 2010 Base Salary | ||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2009 Base | Effective | ||||||||||||||||||
Name | Salary | Amount | Percentage | January 1, 2010 | |||||||||||||||
Charles Zhang | $ | 400,000 | $ | 40,000 | 10.00 | % | $ | 440,000 | |||||||||||
Carol Yu | $ | 300,000 | $ | 30,000 | 10.00 | % | $ | 330,000 | |||||||||||
Belinda Wang | $ | 300,000 | $ | 30,000 | 10.00 | % | $ | 330,000 | |||||||||||
Xiaochuan Wang | $ | 180,000 | $ | 20,000 | 11.11 | % | $ | 200,000 |
Name | 2010 Threshold Bonus Opportunity (as a % of base salary) | 2010 Targeted Bonus Opportunity (as a % of base salary) | 2010 Maximum Bonus Opportunity (as a % of base salary) | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Charles Zhang | 0 | % | 46.50 | % | 108.00 | % | ||||||||
Carol Yu | 0 | % | 46.50 | % | 108.00 | % | ||||||||
Belinda Wang | 0 | % | 62.78 | % | 145.32 | % | ||||||||
Xiaochuan Wang | 0 | % | 48.60 | % | 110.70 | % |
2010 Performance Bonus Components | |||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Overall | |||||||||||||||||||||||||||||||
Name | Corporate Performance Results | Advertising Results | Wireless Results | Search Results | Media Operations Results | Technology and Product Results | Total | ||||||||||||||||||||||||
Charles Zhang | 100 | % | 0 | % | 0 | % | 0 | % | 0 | % | 0 | % | 100 | % | |||||||||||||||||
Carol Yu | 100 | % | 0 | % | 0 | % | 0 | % | 0 | % | 0 | % | 100 | % | |||||||||||||||||
Belinda Wang | 0 | % | 80 | % | 0 | % | 10 | % | 10 | % | 0 | % | 100 | % | |||||||||||||||||
Xiaochuan Wang | 0 | % | 0 | % | 0 | % | 30 | % | 0 | % | 70 | % | 100 | % |
component was subject to adjustment based upon a sliding scale, determined by our Compensation Committee, whereby the named executive officer was eligible to receive anywhere from zero to 150% of the bonus component based upon our Chief Executive Officer’s evaluation, with respect to his direct reports (which include all of the named executive officers other than our Chief Executive Officer), and our Compensation Committee’s evaluation, with respect to the Chief Executive Officer, of the named executive officer’s actual performance with respect to the technology and product milestones.
with severance benefits beyond those required by Chinese law to help minimize the financial stress in the event of job loss. As a result, we provide additional severance pay and benefits continuation to certain of our named executive officers to help bridge the time until they secure new employment.
Dr. Dave Qi
Name and Principal Position | Year | Salary ($) | Option Awards ($)(2) | Stock Awards ($)(2) | Non-Equity Incentive Plan Compensation ($)(3) | All Other Compensation ($)(4) | Total ($) | |||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Charles Zhang | 2010 | $ | 440,000 | 0 | $ | 957,383 | $ | 264,990 | $ | 433,160 | $ | 2,095,533 | ||||||||||||||||||
Chairman of the Board and | 2009 | $ | 400,000 | $ | 10,942 | $ | 123,573 | $ | 204,000 | $ | 392,753 | $ | 1,131,268 | |||||||||||||||||
Chief Executive Officer | 2008 | $ | 280,000 | $ | 34,101 | $ | 233,629 | $ | 199,185 | $ | 247,207 | $ | 994,122 | |||||||||||||||||
Carol Yu | 2010 | $ | 330,000 | 0 | $ | 941,742 | $ | 234,878 | $ | 294,223 | $ | 1,800,843 | ||||||||||||||||||
Co-President and | 2009 | $ | 300,000 | $ | 15,295 | $ | 89,356 | $ | 198,900 | $ | 193,704 | $ | 797,255 | |||||||||||||||||
Chief Financial Officer | 2008 | $ | 250,000 | $ | 84,461 | $ | 169,202 | $ | 250,000 | $ | 73,645 | $ | 827,308 | |||||||||||||||||
Belinda Wang | 2010 | $ | 330,000 | 0 | $ | 1,250,262 | $ | 218,042 | $ | 164,945 | $ | 1,963,249 | ||||||||||||||||||
Co-President and | 2009 | $ | 300,000 | $ | 4,393 | $ | 107,760 | $ | 244,800 | $ | 68,100 | $ | 725,053 | |||||||||||||||||
Chief Operating Officer | 2008 | $ | 170,000 | $ | 27,506 | $ | 204,388 | $ | 129,668 | $ | 41,528 | $ | 573,090 | |||||||||||||||||
Xiaochuan Wang | 2010 | $ | 200,000 | 0 | $ | 942,304 | $ | 115,300 | $ | 42,589 | $ | 1,300,193 | ||||||||||||||||||
Chief Technology Officer | 2009 | $ | 180,000 | $ | 5,857 | $ | 92,148 | $ | 90,540 | $ | 38,403 | $ | 406,948 |
(1) | All 2010 annual cash bonuses paid to our named executive officers are reflected in the non-equity incentive plan compensation column of this table and were earned pursuant to our 2010 Executive Bonus Plan. |
(2) | For 2010, the amount only represents expense recognized with respect to stock awards, granted from January 1, 2006 through December 31, 2010. No expense was recognized with respect to option awards because the requisite service periods the options granted had ended by the end of 2009. For stock awards granted in 2010, see the “Grants of Plan-Based Awards” table below. See Note 20, “Sohu.com Inc. Shareholders’ Equity” in the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2010 for the relevant assumptions we used to determine the valuation of our option awards and stock awards. As a result of enhanced compensation disclosure requirements that went into effect in 2010, some amounts shown for prior years were not included in our Annual Meeting proxy statements for those years. |
(3) | All compensation earned in 2010 under our 2010 Executive Bonus Plan will be paid on April 20, 2011. |
(4) | The table below shows the components of this column for 2010, which include housing allowances, tax equalization, premiums paid for health, life and disability insurance, and training fee. |
Name | Housing Allowances | Tax Equalization | Health, Life, Travel and Disability Insurance | Training fee | Total | |||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Charles Zhang | $ | 110,000 | $ | 297,886 | $ | 16,381 | $ | 0 | $424,267 | |||||||||||||
Carol Yu | $ | 110,000 | $ | 109,739 | $ | 16,686 | $ | 0 | $236,425 | |||||||||||||
Belinda Wang | $ | 55,000 | $ | 0 | $ | 19,169 | $ | 90,776 | $164,945 | |||||||||||||
Xiaochuan Wang | $ | 30,000 | $ | 0 | $ | 12,589 | $ | 0 | $42,589 |
Estimated Payouts Under Non-Equity | All Other Stock | Grant Date | ||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Incentive Plan Awards(1) | Awards: Number of | Fair Value | ||||||||||||||||||||||||
Shares of Stock | of Stock | |||||||||||||||||||||||||
Name | Grant Date | Threshold ($) | Target ($) | Maximum ($) | or Units (#)(2) | and Options Awards | ||||||||||||||||||||
Charles Zhang | N/A | $ | 0 | 204,600 | 475,200 | — | — | |||||||||||||||||||
1/21/2010 | — | — | — | 30,000 | $ | 1,837,950 | ||||||||||||||||||||
Carol Yu | N/A | $ | 0 | 153,450 | 356,400 | — | — | |||||||||||||||||||
1/21/2010 | — | — | — | 30,000 | $ | 1,837,950 | ||||||||||||||||||||
Belinda Wang | N/A | $ | 0 | 207,171 | 479,566 | — | — | |||||||||||||||||||
1/21/2010 | — | — | — | 40,000 | $ | 2,450,600 | ||||||||||||||||||||
Xiaochuan Wang | N/A | $ | 0 | 97,200 | 221,400 | — | — | |||||||||||||||||||
1/21/2010 | — | — | — | 30,000 | $ | 1,837,950 |
(1) | The amounts shown represent the range of non-equity incentive bonus opportunities for each named executive officer under our 2010 Executive Bonus Plan. The plan is described in detail in the “Compensation Discussion and Analysis” above. Payment of bonuses under our 2010 Executive Bonus Plan will be made on April 20, 2011, and actual payments are reflected in the “Summary Compensation Table” in the column titled “Non-Equity Incentive Plan Compensation.” |
(2) | All stock awards were granted under our 2000 Stock Incentive Plan and relate to our common stock. The stock awards were granted in the form of restricted stock units. The terms of the restricted stock units are described in the section below entitled “Terms of Stock Option and Restricted Stock Unit Awards.” |
• | payments equal to the named executive officer’s monthly base salary (which includes his or her housing allowance) in effect on the date of termination for the shorter of (i) six months and (ii) the remainder of the term of the named executive officer’s employment agreement; and |
• | insurance benefits for so long as we are obligated to pay severance. |
Termination or Change-in-Control”) of us, except as noted below, all of the named executive officer’s stock options and other stock awards will become immediately exercisable.
• | the named executive officer will not be entitled to any further payments from us; |
• | any insurance or other benefits that have continued will terminate immediately; and |
• | the named executive officer must reimburse us for any severance payments previously made by us to the named executive officer. |
Option Awards(1) | Stock Awards(1) | ||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Name | Number of Securities Underlying Unexercised Options Exercisable(8) (#) | Number of Securities Underlying Unexercised Options Unexercisable(8) (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) | |||||||||||||||||||||
Charles Zhang | 10,938 | (2) | 0 | $ | 1.18 | 1/30/2012 | 7,500 | (9) | $ | 476,175 | |||||||||||||||||
37,500 | (3) | 0 | $ | 8.39 | 1/9/2013 | 30,000 | (11) | $ | 1,904,700 | ||||||||||||||||||
9,000 | (4) | 0 | $ | 34.51 | 1/1/2014 | N/A | N/A | ||||||||||||||||||||
30,000 | (5) | 0 | $ | 22.86 | 7/25/2015 | N/A | N/A | ||||||||||||||||||||
Carol Yu | N/A | N/A | N/A | N/A | 5,250 | (9) | $ | 333,323 | |||||||||||||||||||
N/A | N/A | N/A | N/A | 30,000 | (11) | $ | 1,904,700 | ||||||||||||||||||||
Belinda Wang | 625 | (6) | 0 | $ | 16.84 | 7/26/2014 | 6,250 | (9) | $ | 396,813 | |||||||||||||||||
7,501 | (7) | 0 | $ | 17.65 | 3/29/2015 | 40,000 | (11) | $ | 2,539,600 | ||||||||||||||||||
Xiaochuan Wang | 10,000 | (7) | 0 | $ | 17.65 | 3/29/2015 | 5,250 | (10) | $ | 333,323 | |||||||||||||||||
N/A | N/A | N/A | N/A | 30,000 | (11) | $ | 1,904,700 |
(1) | Options and restricted stock unit awards were granted under our 2000 Stock Incentive Plan and 2010 Stock Incentive Plan, and relate to our common stock. |
(2) | These options became fully vested on January 31, 2006. |
(3) | These options became fully vested on January 10, 2007. |
(4) | These options were granted to Dr. Charles Zhang in consideration of his services as a member of our Board of Directors and became fully vested on January 2, 2005. |
(5) | These options became fully vested on July 26, 2009. |
(6) | These options became fully vested on July 27, 2008. |
(7) | These options became fully vested on March 30, 2009. |
(8) | 25% of the initial option granted vests on the first anniversary of the grant date and 6.25% of the options vests quarterly thereafter. The grant date of each option is listed on the table below by reference to the expiration date set forth in the above table. |
Grant Date | Expiration Date | |||||
---|---|---|---|---|---|---|
1/31/2002 | 1/30/2012 | |||||
1/10/2003 | 1/9/2013 | |||||
1/2/2004 | 1/1/2014 | |||||
7/27/2004 | 7/26/2014 | |||||
3/30/2005 | 3/29/2015 | |||||
7/26/2005 | 7/25/2015 |
(9) | These restricted stock units were granted on February 28, 2007 and became fully vested on February 28, 2011. |
(10) | These restricted stock units were granted on February 15, 2007 and became fully vested on February 15, 2011. |
(11) | These restricted stock units were granted on January 21, 2010 and will become fully vested on January 21, 2014. |
Option Awards | Stock Awards(1) | ||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Name | Number of Shares Acquired On Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | |||||||||||||||
Charles Zhang | 0 | $ | 0 | 8,500 | $ | 421,485 | |||||||||||||
Carol Yu | 0 | $ | 0 | 6,250 | $ | 308,333 | |||||||||||||
Belinda Wang | 0 | $ | 0 | 7,500 | $ | 365,463 | |||||||||||||
Xiaochuan Wang | 0 | $ | 0 | 6,250 | $ | 291,345 |
(1) | Reflects shares received pursuant restricted stock units granted under our 2000 Stock Incentive Plan. |
• | willful misconduct or gross negligence by the named executive officer, or any willful or grossly negligent omission to perform any act, resulting in injury to us; |
• | misconduct or negligence of the named executive officer that results in gain or personal enrichment of the named executive officer to our detriment; |
• | breach of any of the named executive officer’s agreements with us, including, but not limited to, the repeated failure to perform substantially the named executive officer’s duties to us, excessive absenteeism or dishonesty; |
• | any attempt by the named executive officer to assign or delegate his or her employment agreement or any of the rights, duties, responsibilities, privileges or obligations thereunder without our prior consent (except in respect of any delegation by the named executive officer of his employment duties thereunder to our other employees in accordance with our usual business practice); |
• | the named executive officer’s indictment or conviction for, or confession of, a felony or any crime involving moral turpitude under the laws of the U.S. or any State thereof, or under the laws of China or Hong Kong; |
• | declaration by a court that the named executive officer is insane or incompetent to manage his or her business affairs; |
• | habitual drug or alcohol abuse which materially impairs the named executive officer’s ability to perform his or her duties; or |
• | filing of any petition or other proceeding seeking to find the named executive officer bankrupt or insolvent. |
• | any person (within the meaning of Section 13(d) or Section 14(d)(2) of the Securities Exchange Act of 1934) other than us, any trustee or other fiduciary holding securities under an employee benefit plan of Sohu or any corporation owned, directly or indirectly, by our stockholders in substantially the same proportion as their ownership of our common stock, becomes the direct or beneficial owner of securities representing 50% or more of the combined voting power of our then-outstanding securities; |
• | during any period of two consecutive years after the date of the named executive officer’s employment agreement, individuals who at the beginning of such period constitute our Board, and all new directors (other than directors designated by a person who has entered into an agreement with us to effect a transaction described in the first, third and fourth bullet point of this definition) whose election or nomination to our Board was approved by a vote of at least two-thirds of the directors then in office, cease for any reason to constitute at least a majority of the members of our Board; |
• | the effective date of a merger or consolidation of us with any other entity, other than a merger or consolidation which would result in our voting securities outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 50% of the combined voting power of the voting securities of the surviving entity outstanding immediately after such merger or consolidation and with the power to elect at least a majority of the board of directors or other governing body of such surviving entity; |
• | our complete liquidation or the sale or disposition by us of all or substantially all of our assets; or |
• | there occurs any other event of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or a response to any similar item on any similar schedule or form) promulgated under the Securities and Exchange Act of 1934, whether or not we are then subject to such reporting requirements. |
• | any significant change in the duties and responsibilities of the named executive officer inconsistent in any material and adverse respect with the name executive officer’s title and position (including status, officer positions and reporting requirements), authority, duties or responsibilities as contemplated by the named executive officer’s employment agreement. |
• | any material breach by us of the employment agreement with the named executive officer, including without limitation any reduction of the named executive officer’s base salary or our failure to pay to the named executive officer any portion of his or her compensation; or |
• | the failure, in the event of a change-in-control in which we are not the surviving entity, of the surviving entity or the successor to our business to assume the named executive officer’s employment agreement pursuant to its terms or to offer the named executive officer employment on substantially equivalent terms to those set forth in such employment agreement. |
Involuntary Termination | Change in Control | ||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Voluntary Resignation | Voluntary | | Involuntary Termination within 12 months | ||||||||||||||||||||||||||||||||
Name | | Compensation Element | | for Good Reason | | Death or Disability | | Without Cause | | For Cause | | Resignation for Good Reason | | Without Cause | | For Cause | |||||||||||||||||||
Charles Zhang | Severance Pay(1) | $ | 335,320 | (2) | $ | 0 | $ | 335,320 | (2) | $0 | $ | 335,320 | (2) | $ | 335,320 | (2) | $0 | ||||||||||||||||||
Housing Allowance(1) | $ | 110,000 | $ | 0 | $ | 110,000 | $0 | $ | 110,000 | $ | 110,000 | $0 | |||||||||||||||||||||||
Bonus | $ | 0 | (3) | $ | 0 | (4) | $ | 0 | (3) | $0 | $ | 0 | (3) | $ | 0 | (3) | $0 | ||||||||||||||||||
Benefits | $ | 8,191 | $ | 0 | $ | 8,191 | $0 | $ | 8,191 | $ | 8,191 | $0 | |||||||||||||||||||||||
Accelerated Vesting of Stock Options and Restricted Stock Unit Awards | $ | 0 | $ | 0 | $ | 0 | $0 | $ | 0 | $ | 942,596 | $0 | |||||||||||||||||||||||
Total | $ | 453,511 | $ | 0 | $ | 453,511 | $0 | $ | 453,511 | $ | 1,396,107 | $0 | |||||||||||||||||||||||
Carol Yu | Severance Pay(1) | $ | 165,000 | $ | 0 | $ | 165,000 | $0 | $ | 165,000 | $ | 165,000 | $0 | ||||||||||||||||||||||
Housing Allowance(1) | $ | 55,000 | $ | 0 | $ | 55,000 | $0 | $ | 55,000 | $ | 55,000 | $0 | |||||||||||||||||||||||
Bonus | $ | 0 | (3) | $ | 0 | (4) | $ | 0 | (3) | $0 | $ | 0 | (3) | $ | 0 | (3) | $0 | ||||||||||||||||||
Benefits | $ | 8,343 | $ | 0 | $ | 8,343 | $0 | $ | 8,343 | $ | 8,343 | $0 | |||||||||||||||||||||||
Accelerated Vesting of Stock Options and Restricted Stock Unit Awards | $ | 0 | $ | 0 | $ | 0 | $0 | $ | 0 | $ | 940,545 | $0 | |||||||||||||||||||||||
Total | $ | 228,343 | $ | 0 | $ | 228,343 | $0 | $ | 228,343 | $ | 1,168,888 | $0 | |||||||||||||||||||||||
Belinda Wang | Severance Pay(1) | $ | 239,062 | (2) | $ | 0 | $ | 239,062 | (2) | $0 | $ | 239,062 | (2) | $ | 239,062 | (2) | $0 | ||||||||||||||||||
Housing Allowance(1) | $ | 52,708 | $ | 0 | $ | 52,708 | $0 | $ | 52,708 | $ | 52,708 | $0 | |||||||||||||||||||||||
Bonus | $ | 0 | (3) | $ | 0 | (4) | $ | 0 | (3) | $0 | $ | 0 | (3) | $ | 0 | (3) | $0 | ||||||||||||||||||
Benefits | $ | 9,584 | $ | 0 | $ | 9,584 | $0 | $ | 9,584 | $ | 9,584 | $0 | |||||||||||||||||||||||
Accelerated Vesting of Stock Options and Restricted Stock Unit Awards | $ | 0 | $ | 0 | $ | 0 | $0 | $ | 0 | $ | 1,253,377 | $0 | |||||||||||||||||||||||
Total | $ | 301,354 | $ | 0 | $ | 301,354 | $0 | $ | 301,354 | $ | 1,554,731 | $0 |
Involuntary Termination | Change in Control | ||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Voluntary Resignation | Voluntary | | Involuntary Termination within 12 months | ||||||||||||||||||||||||||||||||
Name | | Compensation Element | | for Good Reason | | Death or Disability | | Without Cause | | For Cause | | Resignation for Good Reason | | Without Cause | | For Cause | |||||||||||||||||||
Xiaochuan Wang | Severance Pay(1) | $ | 130,312 | (2) | $ | 0 | $ | 130,312 | (2) | $0 | $ | 130,312 | (2) | $ | 130,312 | (2) | $0 | ||||||||||||||||||
Housing Allowance(1) | $ | 26,250 | $ | 0 | $ | 26,250 | $0 | $ | 26,250 | $ | 26,250 | $0 | |||||||||||||||||||||||
Bonus | $ | 0 | (3) | $ | 0 | (4) | $ | 0 | (3) | $0 | $ | 0 | (3) | $ | 0 | (3) | $0 | ||||||||||||||||||
Benefits | $ | 6,294 | $ | 0 | $ | 6,294 | $0 | $ | 6,294 | $ | 6,294 | $0 | |||||||||||||||||||||||
Accelerated Vesting of Stock Options and Restricted Stock Unit Awards | $ | 0 | $ | 0 | $ | 0 | $0 | $ | 0 | $ | 939,677 | $0 | |||||||||||||||||||||||
Total | $ | 162,856 | $ | 0 | $ | 162,856 | $0 | $ | 162,856 | $ | 1,102,533 | $0 |
(1) | Severance payments are made ratably over the severance period according our standard payroll practices. |
(2) | Dr. Charles Zhang, Ms. Belinda Wang and Mr. Xiaochuan Wang would have been entitled to the severance benefits under Chinese law as these benefits would have been greater than their severance benefits under their employment agreement with us. |
(3) | In the event of a voluntary resignation for good reason or an involuntary termination without cause, our named executive officers are each entitled to receive payments of the bonus for the remainder of the year of the termination, but only to the extent that the bonus would have been earned had the named executive officers continued in employment through the end of such year, as determined in good faith by our Chief Executive Officer, Board or our Compensation Committee based on the specific corporate and individual performance targets established for such fiscal year, and only to the extent that bonuses were paid for such fiscal year to other similarly situated employees. The payment of the entire 2010 bonus rests on the assumption that each of the named executive officers voluntarily resigned for good reason and/or was terminated without cause as of December 31, 2010 and that no additional bonus would have been due as a result of the termination. |
(4) | In the event of a termination of named executive officer’s employment by reason of death or disability, they or their estates or representatives, as applicable, are entitled to receive the bonus for the year in which the death or disability occurs to the extent that a bonus would have been earned had named executive officers continued in employment through the end of such year, as determined in good faith by our Chief Executive Officer, Board or our Compensation Committee based on the specific corporate and individual performance targets established for such fiscal year, and only to the extent that bonuses are paid for such fiscal year to other similarly situated employees. The payment of the entire 2010 bonus rests on the assumption that each of the named executive officers voluntarily resigned for good reason and/or was terminated without cause as of December 31, 2010 and that no additional bonus would have been due as a result of the termination. |
Name | Option Awards ($)(2)(3) | Stock Awards ($)(2)(4) | Total ($) | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dave Qi | — | $ | 106,522 | $ | 106,522 | |||||||||
Shi Wang | — | $ | 106,522 | $ | 106,522 | |||||||||
Edward B. Roberts | — | $ | 106,522 | $ | 106,522 | |||||||||
Charles Huang | — | $ | 106,522 | $ | 106,522 | |||||||||
Zhonghan Deng | — | $ | 106,522 | $ | 106,522 |
(1) | Dr. Charles Zhang has been omitted from this table because he receives no compensation for serving on our Board. All compensation paid to Dr. Charles Zhang in fiscal year 2010 was paid to him in his capacity as Chief Executive Officer and is reported in the “Summary Compensation Table.” |
(2) | Amounts shown represents expense recognized with respect to restricted stock units and stock options, as applicable, granted from January 1, 2010 through December 31, 2010, in accordance with U.S. GAAP. See Note 20, “Sohu.com Inc. Shareholders’ Equity” in the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2010 for the relevant assumptions we used to determine the valuation of our stock awards and option awards. |
(3) | As of December 31, 2010, each of our non-employee directors had the following number of outstanding stock options: Dave Qi: 10,000; Shi Wang: 10,000; Edward B. Roberts: 24,000; Charles Huang: 49,000; and Zhonghan Deng: 0. |
(4) | The grant date fair value of the 2010 restricted stock units granted to each of Dave Qi, Shi Wang, Edward B. Roberts, Charles Huang and Zhonghan Deng, computed in accordance with U.S. GAAP, was $106,522. |
additional fiduciary duty by our Board or restricting or limiting the ability of stockholders to make proposals for inclusion in proxy materials related to executive compensation. Our Compensation Committee, however, may take into account the outcome of the vote when considering future executive compensation arrangements.
THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS
AS DISCLOSED IN THIS PROXY STATEMENT.
IN FAVOR OF HAVING FUTURE ADVISORY VOTES ON EXECUTIVE
COMPENSATION OCCUR EVERY THREE YEARS.
SELECTION OF PRICEWATERHOUSECOOPERS AS INDEPENDENT AUDITORS.
April 29, 2011