0001564590-22-014237.txt : 20220412 0001564590-22-014237.hdr.sgml : 20220412 20220412161050 ACCESSION NUMBER: 0001564590-22-014237 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20220526 FILED AS OF DATE: 20220412 DATE AS OF CHANGE: 20220412 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Trade Desk, Inc. CENTRAL INDEX KEY: 0001671933 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROGRAMMING, DATA PROCESSING, ETC. [7370] IRS NUMBER: 271887399 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: 1934 Act SEC FILE NUMBER: 001-37879 FILM NUMBER: 22822388 BUSINESS ADDRESS: STREET 1: 42 N. CHESTNUT STREET CITY: VENTURA STATE: CA ZIP: 93001 BUSINESS PHONE: (805) 585-3434 MAIL ADDRESS: STREET 1: 42 N. CHESTNUT STREET CITY: VENTURA STATE: CA ZIP: 93001 DEF 14A 1 ttd-def14a_20220526.htm DEF 14A ttd-def14a_20220526.htm

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

 

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

Check the appropriate box:

 

Preliminary Proxy Statement

 

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

 

Definitive Proxy Statement

 

Definitive Additional Materials

 

Soliciting Material under §240.14a-12

THE TRADE DESK, INC.

(Name of Registrant as Specified in its Charter)

 

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check all boxes that apply):

 

No fee required.

 

Fee paid previously with preliminary materials.

 

Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11.

 

 

 

 


 

 

 

The Trade Desk, Inc.

42 N. Chestnut Street

Ventura, California 93001

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

To be held May 26, 2022

To our stockholders:

You are cordially invited to attend the 2022 annual meeting of stockholders of The Trade Desk, Inc. (the “Annual Meeting”) to be held virtually on Thursday, May 26, 2022, at 11:00 a.m. Pacific Time. You can attend the Annual Meeting via the Internet, vote your shares electronically and submit your questions during the Annual Meeting, by visiting www.virtualshareholdermeeting.com/TTD2022 (there is no physical location for the Annual Meeting). You will need to have your 16-Digit Control Number included on your Notice or your proxy card (if you received a printed copy of the proxy materials) to join the Annual Meeting.

We are holding the meeting for the following purposes:

1.

To elect three Class III directors;

2.

To ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2022;

3.

To conduct a non-binding, advisory vote to approve the compensation of our named executive officers; and

4.

To transact such other business as may properly come before the meeting or at any and all adjournments, continuations or postponements thereof.

If you owned our Class A common stock or Class B common stock at the close of business on March 31, 2022, you may attend and vote at the meeting. A list of stockholders eligible to vote at the Annual Meeting will be available for review during our regular business hours at our headquarters in Ventura, California for the ten days prior to the meeting for any purpose related to the Annual Meeting. Due to prevailing and broadly applicable government restrictions, our headquarters may be subject to limited business hours and temporary closures during such period. In the event our headquarters are not open during regular hours, stockholders can send an email to IR@thetradedesk.com. On or about April 12, 2022, we expect to mail to our stockholders a Notice of Internet Availability of Proxy Materials (the “Notice”) containing instructions on how to access our proxy statement for our Annual Meeting (the “Proxy Statement”) and our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 (the “Annual Report”). The Proxy Statement and the Annual Report can be accessed directly at the following Internet address: www.proxyvote.com. All you have to do is enter the control number located on your proxy card.

Your vote is important. Whether or not you plan to attend the meeting, I hope that you will vote as soon as possible. You may vote your shares via a toll-free telephone number or over the Internet. You may also submit your proxy card or voting instruction card for the meeting by completing, signing, dating and returning your proxy card or voting instruction card in the envelope provided. Any stockholder of record attending the meeting may vote during the meeting, even if you have already returned a proxy card or voting instruction card.

Thank you for your ongoing support of The Trade Desk.

 

Sincerely,

Jeff T. Green

Chief Executive Officer

Ventura, California

April 12, 2022

 

 


 

YOUR VOTE IS IMPORTANT

ALL STOCKHOLDERS ARE INVITED TO ATTEND THE MEETING. WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE VOTE AS PROMPTLY AS POSSIBLE IN ORDER TO ENSURE YOUR REPRESENTATION AT THE MEETING. PLEASE NOTE THAT IF YOUR SHARES ARE HELD OF RECORD BY A BROKER, BANK OR OTHER NOMINEE AND YOU WISH TO VOTE AT THE MEETING, YOU MUST OBTAIN FROM THE RECORD HOLDER A PROXY ISSUED IN YOUR NAME.

 

 


 

THE TRADE DESK, INC.

2022 ANNUAL MEETING OF STOCKHOLDERS

PROXY STATEMENT

TABLE OF CONTENTS

 

GENERAL INFORMATION

 

1

QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING, THE PROXY MATERIALS AND VOTING YOUR SHARES

  

1

PROPOSAL ONE: ELECTION OF DIRECTORS

  

8

PROPOSAL TWO: RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

  

12

REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS

  

14

PROPOSAL THREE: NON-BINDING, ADVISORY VOTE TO APPROVE THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS

  

15

INFORMATION ABOUT THE BOARD OF DIRECTORS AND CORPORATE GOVERNANCE

  

16

EXECUTIVE OFFICERS

 

22

COMPENSATION DISCUSSION AND ANALYSIS

 

23

INFORMATION REGARDING COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS

  

37

REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS

  

51

OWNERSHIP OF THE TRADE DESK, INC. COMMON STOCK

  

52

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

  

55

DELINQUENT SECTION 16(A) REPORTS

  

55

ADDITIONAL INFORMATION

  

56

APPENDIX A: NON-GAAP FINANCIAL MEASURE INFORMATION

 

57

 

 

 

i


 

PROXY STATEMENT

2022 ANNUAL MEETING OF STOCKHOLDERS

THE TRADE DESK, INC.

GENERAL INFORMATION

The board of directors of The Trade Desk, Inc. is soliciting proxies for our 2022 annual meeting of stockholders (the “Annual Meeting”) to be held on Thursday, May 26, 2022, at 11:00 a.m. Pacific Time. This year’s Annual Meeting will be held entirely via the Internet. Stockholders may participate in the Annual Meeting by visiting the following website: www.virtualshareholdermeeting.com/TTD2022. To participate in the Annual Meeting, you will need the 16-digit control number included on your Notice, on your proxy card or on the instructions that accompanied your proxy materials.

The Notice of Internet Availability of Proxy Materials (the “Notice”) containing instructions on how to access our proxy statement for our Annual Meeting (the “Proxy Statement”) and our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 (the “Annual Report”) is first being mailed on or about April 12, 2022, to stockholders entitled to vote at the Annual Meeting. We also made these materials available on our website at www.thetradedesk.com under the headings “Investor Relations” on or about April 12, 2022. This Proxy Statement contains important information for you to consider when deciding how to vote on the matters brought before the meeting. Please read it carefully. Unless the context requires otherwise, the words “The Trade Desk,” “we,” “the Company,” “us,” and “our” refer to The Trade Desk, Inc.

QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING,

THE PROXY MATERIALS AND VOTING YOUR SHARES

WHY DID I RECEIVE A NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIALS INSTEAD OF A FULL SET OF PROXY MATERIALS?

We have elected to furnish our proxy materials, including this Proxy Statement and our Annual Report, primarily via the Internet. The Notice is being provided in accordance with the Securities and Exchange Commission ("SEC") rules and contains instructions on how to access our proxy materials. Stockholders may request to receive all future proxy materials in printed form by mail or electronically by e-mail by following the instructions contained in the Notice. We encourage stockholders to take advantage of the availability of our proxy materials on the Internet to help reduce the environmental impact and cost of our annual meetings of stockholders.

WHAT ITEMS WILL BE VOTED ON AT THE ANNUAL MEETING?

There are three items that will be voted on at the Annual Meeting:

1.

The election of three Class III directors;

2.

The ratification of the appointment of PricewaterhouseCoopers LLP (“PwC”) as our independent registered public accounting firm for the fiscal year ending December 31, 2022; and

3.

The non-binding, advisory vote to approve the compensation of our named executive officers.

WHAT ARE OUR BOARD OF DIRECTORS’ VOTING RECOMMENDATIONS?

Our board of directors recommends that you vote your shares “FOR” each of the nominees to the board of directors, “FOR” the ratification of the appointment of PwC and “FOR” the approval, on a non-binding, advisory basis, of the compensation of our named executive officers, as disclosed in this Proxy Statement.

WHAT IS A PROXY?

Our board of directors is soliciting your vote at the Annual Meeting. A proxy is your legal designation of another person to vote the stock you own. That other person is called a proxy. If you designate someone as your proxy, that designation also is called a “proxy” or, if in a written document, a “proxy card.” Jeff Green, Blake Grayson and Jay Grant have been designated as proxies for the Annual Meeting.

1


WHO CAN VOTE AT THE MEETING?

Only holders of record of our Class A common stock and Class B common stock at the close of business on March 31, 2022 (the “Record Date”) will be entitled to vote at the Annual Meeting. The Record Date was established by our board of directors. Stockholders of record at the close of business on the Record Date are entitled to:

 

Receive notice of the meeting; and

 

Vote at the meeting and any adjournments or postponements of the meeting.

On the Record Date, there were 441,791,068 shares of our Class A common stock outstanding and 44,234,950 shares of our Class B common stock outstanding. Our Class A common stock and Class B common stock will vote as a single class on all matters described in this Proxy Statement for which your vote is being solicited. Stockholders are not permitted to cumulate votes with respect to the election of directors. Each share of Class A common stock is entitled to one vote on each proposal and each share of Class B common stock is entitled to 10 votes on each proposal. Our Class A common stock and Class B common stock are collectively referred to in this Proxy Statement as our “common stock.”

IS MY VOTE CONFIDENTIAL?

Proxy instructions, ballots and voting tabulations that identify individual stockholders are handled in a manner that protects your voting privacy. Your vote will not be disclosed either among our employees or to third parties, except: (1) as necessary to meet applicable legal requirements, (2) to allow for the tabulation of votes and certification of the vote and (3) to facilitate a successful proxy solicitation. Occasionally, stockholders provide written comments on their proxy card, which are then forwarded to our management.

WHAT IS THE DIFFERENCE BETWEEN HOLDING SHARES AS A “STOCKHOLDER OF RECORD” AND HOLDING SHARES AS “BENEFICIAL OWNER” (OR IN “STREET NAME”)?

Most stockholders are considered “beneficial owners” of their shares, that is, they hold their shares through a broker, bank or other nominee rather than directly in their own name. As summarized below, there are some distinctions between shares held of record and those owned beneficially or in “street name.”

Stockholder of Record: If your shares are registered directly in your name with our transfer agent, you are considered the “stockholder of record” with respect to those shares and we are sending the Notice directly to you to access proxy materials. As a stockholder of record, you have the right to grant your voting proxy directly to us or to vote at the Annual Meeting.

Beneficial Owner: If your shares are held in a stock brokerage account or by a bank or other nominee, you are considered the “beneficial owner” of shares held in street name, and proxy materials are being forwarded to you by your broker, bank or other nominee (who is considered the stockholder of record with respect to those shares). As a beneficial owner, you have the right to direct your broker, bank or other nominee as to how to vote your shares if you follow the instructions you receive from your broker, bank or other nominee. You are also invited to attend the Annual Meeting. However, since you are not the stockholder of record, you may not vote these shares at the Annual Meeting unless you request, complete and deliver the proper documentation provided by your broker, bank or other nominee.

WHAT ARE THE DIFFERENT METHODS THAT I CAN USE TO VOTE MY SHARES OF COMMON STOCK?

By Internet: Until 11:59 p.m. Eastern Time on May 25, 2022, you can vote via the Internet by visiting the website noted on your proxy card. Internet voting is available 24 hours a day. We encourage you to vote via the Internet, as it is the most cost-effective way to vote. Beneficial owners may vote by telephone or the Internet if their banks, brokers or nominees make those methods available, by following the instructions provided to them with the proxy materials.

2


By Telephone: Until 11:59 p.m. Eastern Time on May 25, 2022, you can also vote your shares by telephone by calling the toll-free telephone number indicated on your proxy card and following the voice prompt instructions. Telephone voting is available 24 hours a day.

By Mail: You can vote your shares by marking, signing and timely returning the proxy card enclosed with the proxy materials that are provided in printed form. Beneficial owners must follow the directions provided by their broker, bank or other nominee in order to direct such broker, bank or other nominee as to how to vote their shares.

During the Meeting: You can vote and submit questions during the meeting by attending the virtual meeting at www.virtualshareholdermeeting.com/TTD2022. Please have your Notice or proxy card in hand when you visit the website.

HOW MANY SHARES MUST BE PRESENT TO HOLD THE MEETING?

The holders of a majority of the voting power of all of our issued and outstanding shares of our common stock as of the Record Date must be present at the Annual Meeting or represented by proxy for the transaction of business at the Annual Meeting. This is called a quorum.

Your shares will be counted for purposes of determining if there is a quorum, if you:

 

Are entitled to vote and you are present at the Annual Meeting; or

 

Have voted on the Internet, by telephone or by properly submitting a proxy card or voting instruction form by mail.

Broker non-votes and abstentions are counted for purposes of determining whether a quorum is present. If there are not enough shares present both at the meeting and by timely and properly submitted proxy cards to constitute a quorum, the Annual Meeting may be adjourned until such time as a sufficient number of shares are present.

HOW ARE ABSTENTIONS COUNTED?

You may choose to abstain or refrain from voting your shares on one or more issues presented for a vote at the Annual Meeting. However, for purposes of determining the presence of a quorum, abstentions are counted as present. For the purpose of determining whether the stockholders have approved a matter, abstentions will not affect the outcome of the vote of any matter being voted on at the Annual Meeting.

WHAT IF A STOCKHOLDER DOES NOT PROVIDE A PROXY OR, IF A PROXY IS RETURNED, IT DOES NOT SPECIFY A CHOICE FOR ONE OR MORE ISSUES?

You should specify your choice for each issue to be voted upon at the Annual Meeting. If no proxy is returned or if a proxy is signed and returned but no specific instructions are given on one or more of the issues to be voted upon at that Annual Meeting, proxies will be voted in accordance with applicable rules, laws and regulations as follows:

Stockholders of Record. If you are a stockholder of record and you do not return a proxy and you do not vote at the Annual Meeting, your shares will not be voted at our Annual Meeting, and if you are not present at the Annual Meeting, your shares will not be counted for purposes of determining whether a quorum exists for the Annual Meeting. If you do return a proxy via the Internet, telephone or mail, but you fail to specify how your shares should be voted on one or more issues to be voted upon at the Annual Meeting, then to the extent you did not specify a choice, your shares will be voted: (i) FOR Proposal One for the election of all of the director nominees, (ii) FOR Proposal Two ratifying the selection of PwC as our independent auditors and (iii) FOR Proposal Three to approve, on a non-binding, advisory basis, the compensation of our named executive officers, as disclosed in this Proxy Statement.

Beneficial Owners. If you are a beneficial owner and (i) you do not provide your broker or other nominee who holds your shares with voting instructions, or (ii) you do provide a proxy card but you fail to specify your voting instructions on one or more of the issues to be voted upon at our Annual Meeting, under applicable rules, your broker or other nominee may exercise discretionary authority to vote your shares on routine proposals but may not vote your shares on non-routine proposals.

3


The shares that cannot be voted by brokers and other nominees on non-routine matters but are represented at the meeting will be deemed present at our Annual Meeting for purposes of determining whether the necessary quorum exists to proceed with the Annual Meeting but will not be considered entitled to vote on the non-routine proposals.

We believe that under applicable rules Proposal Two: Ratification of Appointment of Independent Registered Public Accounting Firm is considered a routine matter for which brokerage firms may vote shares that are held in the name of brokerage firms and which are not voted by the applicable beneficial owners.

However, we believe that Proposal One: Election of Directors and Proposal Three: Non-Binding, Advisory Vote to Approve the Compensation of Our Named Executive Officers are considered non-routine matters under applicable rules. Accordingly, brokers or other nominees cannot vote on these proposals without instructions from beneficial owners.

WHAT IS THE VOTING REQUIREMENT TO APPROVE EACH OF THE PROPOSALS?

The following table sets forth the voting requirement with respect to each of the proposals:

 

Proposal One—Election of directors

  

As set forth in our bylaws, each director must be elected by a plurality of the votes cast, meaning that the three nominees receiving the most “FOR” votes (among votes properly cast at the meeting or by proxy) will be elected. Only votes “FOR” will affect the outcome. Brokers will not have discretionary voting authority with respect to shares held in street name for their clients. Abstentions and broker non-votes will not affect the outcome of the vote.

 

 

Proposal Two—Ratification of appointment of independent registered public accounting firm

  

As set forth in our bylaws, to be approved by our stockholders, a majority of the votes cast at the Annual Meeting or by proxy must vote “FOR” this proposal. Brokers will have discretionary voting authority with respect to shares held in street name for their clients, even if the broker does not receive voting instructions from their client. Accordingly, we do not anticipate that there will be any broker non-votes on this proposal; however, broker non-votes will not be counted as “votes cast” and will therefore have no effect on the proposal.  Abstentions will also have no effect on the proposal.

 

 

 

Proposal ThreeNon-binding advisory vote to approve the compensation of our named executive officers

  

To be approved by our stockholders, a majority of the votes cast at the Annual Meeting must vote “FOR” this proposal.  Brokers will not have discretionary voting authority with respect to shares held in street name for their clients. Abstentions and broker non-votes will not affect the outcome of the vote.

HOW DO I CHANGE OR REVOKE MY PROXY?

You may revoke your proxy and change your vote at any time before the final vote at the meeting. You may vote again on a later date on the Internet or by telephone (only your latest Internet or telephone proxy submitted prior to the meeting will be counted), or by signing and returning a new proxy card with a later date, or by attending the meeting and voting during the meeting. However, your attendance at the Annual Meeting will not automatically revoke your proxy unless you vote again at the meeting or specifically request in writing that your prior proxy be revoked.

4


WHAT DOES IT MEAN IF I RECEIVE MORE THAN ONE PROXY CARD?

It means that your shares are registered differently or you have multiple accounts. Please vote all of these shares separately to ensure all of the shares you hold are voted.

HOW CAN STOCKHOLDERS SUBMIT A PROPOSAL FOR INCLUSION IN OUR PROXY STATEMENT FOR THE 2023 ANNUAL MEETING?

To be included in our proxy statement for the 2023 annual meeting, stockholder proposals must comply with the requirements of Rule 14a-8 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and be received by our Secretary at our principal executive offices no later than December 13, 2022, which is one hundred twenty (120) calendar days before the one-year anniversary of the date on which we first released this Proxy Statement to stockholders in connection with this year’s Annual Meeting. In connection with the 2023 annual meeting, we intend to file a proxy statement and a WHITE proxy card with the SEC in connection with our solicitation of proxies for that meeting.

HOW CAN STOCKHOLDERS SUBMIT PROPOSALS TO BE RAISED AT THE 2023 ANNUAL MEETING THAT WILL NOT BE INCLUDED IN OUR PROXY STATEMENT FOR THE 2023 ANNUAL MEETING?

To be raised at the 2023 annual meeting, stockholder proposals must comply with our bylaws. Under our bylaws, a stockholder must give advance notice to our Secretary of any business, including nominations of candidates for election as directors to our board, that the stockholder wishes to raise at our annual meeting. To be timely, a stockholder’s notice must be delivered to, or mailed and received at, our principal executive offices not less than ninety (90) days nor more than one hundred twenty (120) days prior to the one-year anniversary of the preceding year’s annual meeting. Since our Annual Meeting is on May 26, 2022, stockholder proposals must be received by our Secretary at our principal executive offices no earlier than January 26, 2023 and no later than February 25, 2023, in order to be raised at our 2023 annual meeting.

In addition to satisfying the foregoing requirements under our bylaws, to comply with the universal proxy rules, stockholders who intend to solicit proxies in support of director nominees other than our nominees must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act no later than March 27, 2023.

WHAT IF THE DATE OF THE 2023 ANNUAL MEETING CHANGES BY MORE THAN 30 DAYS FROM THE ANNIVERSARY OF THIS YEAR’S ANNUAL MEETING?

Under Rule 14a-8 of the Exchange Act, if the date of the 2023 annual meeting changes by more than 30 days from the anniversary of this year’s annual meeting, to be included in our proxy statement, stockholder proposals must be received by us within a reasonable time before our solicitation is made.

Under our bylaws, if the date of the 2023 annual meeting is advanced by more than thirty (30) days or delayed by more than sixty (60) days from the anniversary of this year’s annual meeting, stockholder proposals to be brought before the 2023 annual meeting must be delivered, or mailed and received, not later than the ninetieth (90th) day prior to such annual meeting or, if later, the tenth (10th) day following the day on which public disclosure of the date of such annual meeting was first made.

5


DOES A STOCKHOLDER PROPOSAL REQUIRE SPECIFIC INFORMATION?

With respect to a stockholder’s nomination of a candidate for our board of directors, the stockholder notice to the Secretary must contain certain information as set forth in our bylaws about both the nominee and the stockholder making the nomination. With respect to any other business that the stockholder proposes, the stockholder notice must contain a brief description of such business and the reasons for conducting such business at the meeting, as well as certain other information as set forth in our bylaws. If you wish to bring a stockholder proposal or nominate a candidate for director, you are advised to review our bylaws, which contain additional requirements about advance notice of stockholder proposals and director nominations. A copy of our bylaws is available via the website of the Securities and Exchange Commission at http://www.sec.gov. You may also contact our Secretary at the address set forth above for a copy of the relevant bylaw provisions regarding the requirements for making stockholder proposals and nominating director candidates.

WHAT HAPPENS IF WE RECEIVE A STOCKHOLDER PROPOSAL THAT IS NOT IN COMPLIANCE WITH THE TIME FRAMES DESCRIBED ABOVE?

If we receive notice of a matter to come before the 2023 annual meeting that is not in accordance with the deadlines described above, we will use our discretion in determining whether or not to bring such matter before such meeting. If such matter is brought before such meeting, then our proxy card for such meeting will confer upon our proxy holders’ discretionary authority to vote on such matter.

WHAT HAPPENS IF ADDITIONAL MATTERS ARE PRESENTED AT THE ANNUAL MEETING?

Other than the three items of business described in this Proxy Statement, we are not aware of any other business to be acted upon at the Annual Meeting. If you grant a proxy, the persons named as proxy holders, Jeff Green, Blake Grayson and Jay Grant, or any of them, will have the discretion to vote your shares on any additional matters properly presented for a vote at the meeting. If for any reason any of the nominees is not available as a candidate for director, the persons named as proxy holders will vote your proxy for such other candidate or candidates as may be nominated by our board of directors.

WHO BEARS THE COST OF THIS SOLICITATION?

We pay the entire cost of preparing, assembling, printing, mailing and distributing these proxy materials. In addition, we may reimburse banks, brokers and other custodians, nominees and fiduciaries representing beneficial owners of shares for their expenses in forwarding solicitation materials to such beneficial owners. Proxies may be solicited by certain of our directors, officers and employees, personally or by mail, telephone, facsimile, email or other means of communication (electronic or otherwise). No additional compensation will be paid for such services.

Householding of Proxy Materials

The SEC has adopted rules that permit companies and intermediaries (e.g., brokers) to satisfy the delivery requirements for proxy statements and annual reports, or Notices of Internet Availability of Proxy Materials, with respect to two or more stockholders sharing the same address by delivering a single proxy statement and annual report, or Notice of Internet Availability of Proxy Materials, addressed to those stockholders. This process, which is commonly referred to as “householding,” potentially means extra convenience for stockholders and cost savings for companies. In accordance with these rules, only one proxy statement and annual report, or Notice of Internet Availability of Proxy Materials, will be delivered to multiple stockholders sharing an address unless we have received contrary instructions from one or more of the stockholders. Stockholders who currently receive multiple copies of the proxy statement and annual report, or Notice of Internet Availability of Proxy Materials, at their address and would like to request “householding” of their communications should contact their broker if they are beneficial owners or direct their request to Broadridge at the contact information below if they are record holders.

6


If, at any time, you no longer wish to participate in “householding” and would prefer to receive a separate proxy statement and annual report, or Notice of Internet Availability of Proxy Materials, please notify your broker, if you are a beneficial owner or, if you are a record holder, direct your written request to Broadridge Financial Solutions, Inc., Householding Department, 51 Mercedes Way, Edgewood, New York 11717 or call Broadridge at 1-866-540-7095.

If requested, we will also promptly deliver, upon oral or written request, a separate copy of the proxy statement and annual report, or Notice of Internet Availability of Proxy Materials, to any stockholder residing at an address to which only one copy was mailed.

WHERE CAN I FIND THE VOTING RESULTS OF THE ANNUAL MEETING?

We will announce preliminary voting results at the Annual Meeting. We will also disclose voting results on a Current Report on Form 8-K filed with the SEC within four business days after the Annual Meeting, which will be available on our website.

 

7


 

PROPOSAL ONE:

ELECTION OF DIRECTORS

In voting on the election of our director nominees, stockholders may:

 

Vote in favor of all nominees;

 

Vote in favor of specific nominees; or

 

Withhold votes as to specific nominees.

Assuming a quorum is present; directors will be elected by a plurality of the votes cast.

Our bylaws provide that the authorized number of directors shall be determined from time to time by resolution of the board of directors, provided the board of directors shall consist of at least one (1) member. Our board of directors is currently comprised of eight (8) directors. Our certificate of incorporation provides that our board of directors shall be divided into three classes, each consisting of as nearly one-third of the total number of directors as possible. Each class of directors serves a three-year term expiring at the annual meeting of stockholders in the year listed in the table below:

 

Class I (2023)

 

Class II (2024)

 

Class III (2022)

Jeff T. Green

 

David R. Pickles

 

Lise J. Buyer

Andrea L. Cunningham

 

Gokul Rajaram

 

Kathryn E. Falberg

Eric B. Paley

 

 

 

David B. Wells

 

Based on the recommendation of the nominating and corporate governance committee, our board of directors has nominated Lise J. Buyer, Kathryn E. Falberg and David B. Wells for election as Class III directors, each to serve a three-year term that expires at the annual meeting of stockholders in 2025 and until their successors are duly elected and qualified. Mses. Buyer and Falberg and Mr. Wells are currently serving as Class III directors. Each of Mses. Buyer and Falberg and Mr. Wells has consented to serve for a new term. On December 27, 2021, our board of directors appointed Andrea L. Cunningham to the Board as a Class I director representing the Class A common stock, effective January 1, 2022. Ms. Cunningham was appointed to a newly created vacancy on our board of directors resulting from an increase in the size of our board of directors from seven (7) directors to eight (8) directors.

Directors listed in Class I and Class II above are not being elected this year and will continue in office for the remainder of their terms, as described above, unless such directors resign or their service as directors otherwise ceases in accordance with our certificate of incorporation or bylaws.

Vote Required

The Class III directors being voted on this year are elected by a plurality of the votes cast. This means that the director nominee with the most affirmative votes for a particular seat is elected for that seat. Abstentions have no effect on the outcome of the vote.

It is the intention of the persons named as proxies herein to vote in favor of the candidates nominated by our board of directors unless such authority is withheld, either by affirmative vote of the stockholders or deemed withheld by the failure of stockholders to submit their votes. If any nominee should not be available for election, the proxies will be voted in the best judgment of the persons authorized as proxies.

8


THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE DIRECTOR NOMINEES.

Information Concerning Director Nominees

The name and age of each nominee for director, his or her position with us, the year in which he or she first became a director, and certain biographical information as of April 12, 2022 is set forth below:

 

Name

 

Age

 

 

Positions and Offices Held with the Company

 

Director Since

Lise J. Buyer

 

62

 

 

Lead Independent Director

 

March 2019

Kathryn E. Falberg

 

61

 

 

Director

 

August 2016

David B. Wells

 

50

 

 

Director

 

December 2015

 

Lise J. Buyer has served as a member of our board of directors since March 2019, and she was appointed as lead independent director in February 2021. Since 2006, Ms. Buyer has served as a partner of Class V Group LLC, a consulting firm she co-founded that advises companies on initial public offerings and other market strategies. From August 2005 to August 2006, she served as vice president of Tellme Networks, Inc., a private Internet telephone business. Between April 2003 and August 2005, Ms. Buyer served as the director of business optimization at Google. From September 2002 to March 2003, she served as a consultant and the director of research for Vista Research LLC, an independent equity research firm in New York, New York. From May 2000 to July 2002 she was a general partner at Technology Partners, a Palo Alto, California venture capital firm. Ms. Buyer was the director of internet/new media research at Credit Suisse First Boston from July 1998 to May 2000. Prior to that, she spent six years as vice president at T. Rowe Price Group, Inc. working predominantly on its Science and Technology Fund, and the preceding nine years as an institutional equity investor and analyst of both the technology and media industries. Ms. Buyer served on the board of directors of publicly traded Greenfield Online Inc., an online survey company, from April 2004 until it was acquired by Microsoft Corporation. Ms. Buyer received a B.A. in Economics and Geology from Wellesley College and an M.B.A. from the Owen Graduate School of Management at Vanderbilt University.

 

We believe that Ms. Buyer is qualified to serve on our board of directors due to her extensive management experience, high-growth company background and strategic leadership track record.

 

Kathryn E. Falberg has served as a member of our board of directors since August 2016. Ms. Falberg served as executive vice president and chief financial officer of Jazz Pharmaceuticals, PLC, a biopharmaceutical company, from March 2012 to March 2014 after serving as senior vice president and chief financial officer since December 2009. From 2001 through 2009, Ms. Falberg worked with a number of smaller companies, including AdECN, Inc. (“AdECN”), while serving as a corporate director and audit committee chair for several companies. Ms. Falberg was with Amgen from 1995 through 2001, where she served as senior vice president, finance and strategy and chief financial officer and before that as vice president, controller and chief accounting officer, and vice president, treasurer. Ms. Falberg currently serves on the board of directors of publicly traded Arcus Biosciences, Inc., Nuvation Bio, Urogen Pharma Ltd. and Tricida, Inc., and previously served on a number of boards including publicly traded Aimmune Therapeutics, Inc., Axovant Sciences Ltd., BioMarin Pharmaceutical Inc, Medivation, Inc., Halozyme Therapeutics, Inc., and aTyr Pharma, Inc. Ms. Falberg received a B.A. in Economics and an M.B.A. from the University of California, Los Angeles and is a Certified Public Accountant (inactive).

We believe that Ms. Falberg is qualified to serve on our board of directors due to her extensive management experience, strategic leadership track record, and service on other boards of directors.

David B. Wells has served as a member of our board of directors since December 2015. Mr. Wells served as the chief financial officer of Netflix, Inc. (“Netflix”), a media-services provider, for eight years, retiring in early 2019 after nearly 15 years with the company and having served as vice president of financial planning and analysis prior to chief financial officer. Mr. Wells is also a director for public direct to consumer healthcare company HIMS, where he is audit chair, and is the chairman of the board and a member of the remuneration committee (formerly the senior independent director) for UK based fintech company WISE PLC. Mr. Wells received a B.S. in Commerce and English from the University of Virginia and an M.B.A./M.P.P. Magna Cum Laude from the University of Chicago.

9


We believe that Mr. Wells is qualified to serve on our board of directors due to his extensive management experience, high-growth company background and strategic leadership track record.

Information Concerning Current Directors and Directors Continuing in Office

The name and age of each director currently or continuing in office, his or her position with us, the year in which he or she first became a director, and certain biographical information as of April 12, 2022 is set forth below:

Name

 

Age

 

 

Positions and Offices Held with the Company

 

Director Since

Jeff T. Green

 

45

 

 

President and Chief Executive Officer, Director

 

November 2009

Eric B. Paley

 

46

 

 

Director

 

March 2010

David R. Pickles

 

44

 

 

Chief Technology Officer, Director

 

February 2021

Gokul Rajaram

 

47

 

 

Director

 

May 2018

Andrea L. Cunningham

 

65

 

 

Class A Director

 

January 2022

 

 

 

Jeff T. Green co-founded The Trade Desk and has served as our president and chief executive officer and as a member of our board of directors since November 2009. Prior to joining The Trade Desk, from May 2004 to October 2009, Mr. Green founded AdECN, the world’s first online advertising exchange, and served as its chief operating officer, where he led strategy, product and business development until it was acquired by Microsoft in 2007. At Microsoft Corporation, Mr. Green oversaw the AdECN exchange business, as well as all reseller and channel partner business. Mr. Green has also played a leadership role in the ad tech industry, having served on the Networks and Exchanges Quality Assurance Guidelines Committee for the Internet Advertising Bureau (“IAB”) from 2011 to 2012. At IAB, Mr. Green led working groups that established rules and best practices for acquiring inventory and set data transaction standards.

 

We believe that Mr. Green is qualified to serve on our board of directors due to his extensive management experience and sophisticated industry background.

Eric B. Paley has served as a member of our board of directors since March 2010. Since January 2009, he has served as a co-founder and managing partner at Founder Collective, a seed stage venture capital fund. Mr. Paley serves on the board of directors of numerous private companies. From October 2002 to December 2008, Mr. Paley served as the chief executive officer and a co-founder of Brontes Technologies, Inc., a company offering advanced dental imaging technology solutions, which was acquired by The 3M Company in October 2006. Mr. Paley received a B.A. in Government from Dartmouth College and an M.B.A. from Harvard Business School.

We believe that Mr. Paley is qualified to serve on our board of directors due to his extensive management experience, entrepreneurial background and strategic leadership track record.  

David R. Pickles has served as our chief technology officer since March 2010 and as a member of our board of directors since February 2021. Prior to The Trade Desk, he was with Microsoft Corporation where he served as development lead from September 2008 to March 2010 and senior software development engineer from March 2008 to September 2008. From May 2004 to February 2008, he served as senior database engineer at CallWave, Inc., where he was involved in building back-end components of the system: client session management services, telephone call handling services, client registration services, B2B integrations with all major telephone carriers, and complex high performance database systems (including a custom billing and CRM system). Mr. Pickles received a B.S. in Computer Science from the University of California, Santa Barbara.

 

We believe that Mr. Pickles is qualified to serve on our board of directors due to his extensive management experience, track record at other technology companies and industry background.

10


Gokul Rajaram has served as a member of our board of directors since May 2018. Mr. Rajaram has served on the executive team at DoorDash Inc. (“DoorDash”) since November 2019, after DoorDash acquired a food delivery business owned by Square, Inc. (“Square”) called Caviar, Inc. (“Caviar”), where he served as the Lead for Caviar. Prior to DoorDash, Mr. Rajaram worked as the Product Engineering Lead from July 2013 to October 2019 at Square, where he led several product development teams and served on Square’s executive team. Before joining Square in July 2013, Mr. Rajaram served as Product Director, Ads at Facebook, Inc. from August 2010 to July 2013, where he helped Facebook transition its advertising business to become mobile-first. Mr. Rajaram served as Product Management Director for Google AdSense from January 2003 to November 2007, where he helped launch the product and grow it into a substantial portion of Google’s business. Mr. Rajaram has served on the boards of directors of Coinbase Inc. since August 2020 and publicly traded Pinterest, Inc. since February 2020. He also served on the board of directors of publicly traded RetailMeNot, Inc. from September 2013 until it was taken private in May 2017. Mr. Rajaram received a B. Tech in Computer Science from the Indian Institute of Technology Kanpur, an M.S. in Computer Science from the University of Texas and an M.B.A. from the Massachusetts Institute of Technology Sloan School of Management.

We believe that Mr. Rajaram is qualified to serve on our board of directors due to his extensive entrepreneurial background, strategic leadership track record and service on other boards of directors of technology companies.

Andrea L. Cunningham has served as a member of our board of directors since January 2022. Since 2012, Ms. Cunningham has served as the president of Cunningham Collective, a consulting firm she founded that advises companies on marketing, brand and communication strategies. She previously held various senior marketing positions at various companies, including serving as Chief Marketing Officer for Avaya Inc., a cloud communications company, from 2014 to 2015. Ms. Cunningham currently serves on the boards of directors of numerous private companies, and previously served on the boards of directors of RhythmOne plc (formerly Blinkx), a digital advertising technology company then-traded on the London Stock Exchange, from February 2016 to February 2018. Ms. Cunningham received a B.A. in English from Northwestern University and completed the Harvard Business School Executive Education program.

On February 22, 2022, in accordance with Article VI, Section E of our certificate of incorporation, our board of directors appointed Ms. Cunningham to serve as a representative of our Class A common stock.  For more information, see “Information About the Board of Directors and Corporate Governance—Class A Director.”

We believe that Ms. Cunningham is qualified to serve on our board of directors due to her extensive management experience, track record at other technology companies and industry background.

 

 

 

 

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PROPOSAL TWO:

RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED

PUBLIC ACCOUNTING FIRM

On the recommendation of our audit committee, our board of directors has appointed PwC, an independent registered public accounting firm, to audit our consolidated financial statements for the fiscal year ending December 31, 2022 and attest to our internal control over financial reporting as of December 31, 2022. We are submitting this selection to our stockholders for ratification. Although we are not required to seek stockholder approval for this appointment, we believe it is sound corporate practice to do so. Representatives from PwC will be in attendance at the Annual Meeting to respond to any appropriate questions and will have the opportunity to make a statement, if they so desire.

In the vote on the ratification of the selection of PwC as our independent auditors, stockholders may:

 

Vote in favor of ratification;

 

Vote against ratification; or

 

Abstain from voting on ratification.

Vote Required for Approval

Assuming a quorum is present, the selection of PwC as our independent auditors will be ratified if the affirmative vote of a majority of the votes cast on the matter at the meeting is obtained (meaning the number of shares voted “FOR” the proposal must exceed the number of shares voted “AGAINST” the proposal). In the event that the stockholders do not ratify the selection of PwC, the appointment of the independent auditors will be reconsidered by the audit committee of the board of directors. Abstentions and broker non-votes are not considered votes cast for the foregoing purpose and will have no effect on the vote for this proposal.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF PWC AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING DECEMBER 31, 2022.

Auditor Information

Set forth below are the fees for services rendered by PwC for the fiscal years ended December 31, 2021 and 2020:

 

Fee Category

 

2021

 

 

2020

 

Audit Fees(1)

 

$

3,418,749

 

 

$

3,195,947

 

Audit Related Fees

 

 

 

 

Tax Fees(2)

 

 

786,382

 

 

 

610,544

 

All Other Fees(3)

 

 

5,470

 

 

 

2,770

 

Total

 

$

4,210,601

 

 

$

3,809,261

 

 

 

 

 

 

 

 

 

 

(1)

Audit Fees for 2021 and 2020 cover professional services rendered for the audit of our annual financial statements and review of financial statements included in our Quarterly Reports on Form 10-Q, audit of our internal control over financial reporting, and services normally provided by the accountant in connection with statutory and regulatory filings or engagements.

(2)

Tax Fees cover tax compliance, advice, and planning services and consisted primarily of review of consolidated federal income tax returns and foreign tax planning and advice.

(3)

All Other Fees are related to license fees for accounting research software.

 

 

 

 

 

12


 

Pre-Approval Policies and Procedures

The audit committee has adopted policies and procedures regarding pre-approval of permitted audit and non-audit services. Each year, and as needed at other times during the year, (1) the independent registered public accounting firm will submit to the audit committee for approval the terms, fees and conditions of our engagement of the independent registered public accounting firm to perform an integrated audit of our consolidated financial statements and to review our interim financial statements; and (2) management and the independent registered public accounting firm will submit to the audit committee for approval a written pre-approval request of additional audit and non-audit services to be performed for us during the year, including a budgeted range of fees for each category of service outlined in such request. The audit committee has designated the audit committee chair to have the authority to pre-approve interim requests for permissible services that were not contemplated in the engagement letter or in pre-approval requests. The audit committee chair may approve or reject any interim service requests and shall report any interim service pre-approvals at the next regular audit committee meeting. All services provided by PwC during the fiscal years ended December 31, 2021 and 2020 were pre-approved by the audit committee.

 

13


 

REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS

The information contained in this audit committee report shall not be deemed to be (1) “soliciting material,” (2) “filed” with the SEC, (3) subject to Regulations 14A or 14C of the Exchange Act, or (4) subject to the liabilities of Section 18 of the Exchange Act. No portion of this audit committee report shall be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, through any general statement incorporating by reference in its entirety the Proxy Statement in which this report appears, except to the extent that The Trade Desk, Inc. specifically incorporates this report or a portion of it by reference. In addition, this report shall not be deemed filed under either the Securities Act or the Exchange Act.

The audit committee of our board of directors is comprised of three members and acts under a written charter that has been approved by our board of directors. The members of the audit committee are independent directors, based upon standards set forth in applicable laws, rules, and regulations. The audit committee has reviewed and discussed the audited financial statements with management and has discussed with PwC the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (United States) (the “PCAOB”) and the SEC.

The audit committee has also received the written disclosures and the letter from PwC required by the applicable requirements of the PCAOB regarding PwC’s communications with the audit committee concerning independence and has discussed with PwC its independence.

Management is responsible for our financial reporting process and the system of internal controls, including internal control over financial reporting, and procedures designed to promote compliance with accounting standards and applicable laws and regulations. PwC is responsible for the audit of the consolidated financial statements and our internal control over financial reporting in accordance with the standards of the PCAOB. The audit committee’s responsibility is to monitor and oversee these processes and procedures. The members of the audit committee are not professionally engaged in the practice of accounting or auditing and are not professionals in these fields. The audit committee relies, without independent verification, on the information provided by and on the representations made by management regarding the effectiveness of internal control over financial reporting, that the financial statements have been prepared with integrity and objectivity, and that such financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America. The audit committee also relies on the opinion of PwC on the consolidated financial statements and internal controls over financial reporting.

The audit committee’s meetings facilitate communication among the members of the audit committee, management and PwC. The audit committee separately met with PwC, with and without management, to discuss the results of their examinations and their observations and recommendations regarding our internal controls. The audit committee also met separately with management.

Based on its discussions with management and PwC, and its review of the representations and information provided by management and PwC, the audit committee recommended to our board of directors that our audited financial statements for the fiscal year ended December 31, 2021 be included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021.

By order of the audit committee of the board of directors of The Trade Desk,

AUDIT COMMITTEE

David B. Wells (Chairperson)

Lise J. Buyer

Gokul Rajaram

 

 

 

 

 

 

 

14


 

 

 

PROPOSAL THREE:

 

NON-BINDING, ADVISORY VOTE TO APPROVE THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS

 

Section 14A of the Exchange Act requires that we provide our stockholders with the opportunity to vote to approve, on a non-binding, advisory basis, not less frequently than once every three years, the compensation of our named executive officers as disclosed in this Proxy Statement in accordance with the compensation disclosure rules of the SEC.

Our compensation programs are designed to effectively align our executives’ interests with the interests of our stockholders by focusing on long-term equity incentives that correlate with the growth of sustainable long-term value for our stockholders.

Stockholders are urged to read the section titled “Compensation Discussion and Analysis” in this Proxy Statement, which discusses how our executive compensation policies and practices implement our compensation philosophy and contains tabular information and narrative discussion about the compensation of our named executive officers. Our board of directors and our compensation committee believe that these policies and practices are effective in implementing our compensation philosophy and in achieving our compensation program goals.

The vote on this resolution is not intended to address any specific element of compensation; rather, the vote relates to the compensation of our named executive officers, as described in this Proxy Statement in accordance with the compensation disclosure rules of the SEC.

Accordingly, we are asking our stockholders to vote on the following resolution at the Annual Meeting:

RESOLVED, that the stockholders hereby approve, on a non-binding, advisory basis, the compensation paid to the Company's named executive officers, as disclosed in the Company’s proxy statement for the 2022 Annual Meeting of Stockholders, pursuant to the compensation disclosure rules of the SEC, including the compensation tables and the narrative discussions that accompany the compensation tables.

Vote Required for Approval

The approval of this non-binding, advisory proposal requires the affirmative vote of a majority of the votes cast on the matter at the meeting. Abstentions and broker non-votes will have no effect on this proposal.

The vote is advisory, which means that the vote is not binding on the Company, our board of directors or our compensation committee. To the extent there is any significant vote against our named executive officer compensation as disclosed in this Proxy Statement, our compensation committee will evaluate whether any actions are necessary to address the concerns of stockholders.

 

THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE FOR THE APPROVAL, ON A NON-BINDING, ADVISORY BASIS, OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS, AS DISCLOSED IN THIS PROXY STATEMENT.

15


 

 INFORMATION ABOUT THE BOARD OF DIRECTORS AND CORPORATE GOVERNANCE

Leadership Structure of the Board of Directors

Our board of directors recognizes that one of its key responsibilities is to evaluate and determine its optimal leadership structure so as to provide effective oversight of management. Our bylaws and corporate governance guidelines provide our board of directors with flexibility to combine or separate the positions of chairman of the board of directors and chief executive officer.

Our board of directors currently believes that our existing leadership structure, under which our chief executive officer, Mr. Green, serves as chairman of our board of directors is effective. Mr. Green’s knowledge of the issues, opportunities and risks facing us, our business and our industry renders him best positioned among our directors to fulfill the chairman’s responsibility to develop agendas that focus the time and attention of our board of directors on the most critical matters.

Our board of directors will continue to periodically review our leadership structure and may make such changes in the future as it deems appropriate.

In accordance with our bylaws, the independent directors elected Lise J. Buyer to serve as lead independent director. As lead independent director, Ms. Buyer will preside at all meetings of the board of directors at which the chairman of the board of directors is not present, including executive sessions, and performs such additional responsibilities as set forth in our corporate governance guidelines.

Role of Board in Risk Oversight Process

Risk assessment and oversight are an integral part of our governance and management processes. Our board of directors encourages management to promote a culture that incorporates risk management into our corporate strategy and day-to-day business operations. Management discusses strategic and operational risks at regular management meetings and conducts specific strategic planning and review sessions during the year that include a focused discussion and analysis of the risks facing us. Throughout the year, senior management reviews these risks with our board of directors at regular board meetings as part of management presentations that focus on particular business functions, operations or strategies, and presents the steps taken by management to mitigate or eliminate such risks.

Our board of directors does not have a standing risk management committee, but rather administers this oversight function directly through our board of directors as a whole, as well as through various standing committees of our board of directors that address risks inherent in their respective areas of oversight. In particular, our board of directors is responsible for monitoring and assessing strategic risk exposure and our audit committee is responsible for overseeing our major financial risk exposures and the steps our management has taken to monitor and control these exposures. The audit committee also monitors compliance with legal and regulatory requirements and considers and approves or disapproves any related-persons transactions. Our nominating and governance committee monitors the effectiveness of our corporate governance guidelines. Our compensation committee assesses and monitors whether any of our compensation programs, policies and practices have the potential to encourage excessive or inappropriate risk-taking.

Board Meetings

Our board of directors held a total of six meetings during 2021. Each director attended at least 75% of the total number of board of directors and committee meetings that were held during the time he or she was a director in 2021.

16


Board Committees

Audit Committee

Our audit committee oversees our corporate accounting and financial reporting process. Among other matters, the audit committee:

 

appoints our independent registered public accounting firm;

 

evaluates the independent registered public accounting firm’s qualifications, independence and performance;

 

determines the engagement of the independent registered public accounting firm;

 

reviews and approves the scope of the annual audit and the audit fee;

 

discusses with management and the independent registered public accounting firm the results of the annual integrated audit and the review of our quarterly financial statements;

 

approves the retention of the independent registered public accounting firm to perform any proposed permissible non-audit services;

 

monitors the rotation of partners of the independent registered public accounting firm on our engagement team in accordance with requirements established by the SEC;

 

is responsible for reviewing our financial statements and our management’s discussion and analysis of financial condition and results of operations to be included in our annual and quarterly reports to be filed with the SEC;

 

reviews the adequacy of internal financial controls with management and our independent registered public accounting firm;

 

reviews our critical accounting policies and estimates; and

 

reviews the audit committee charter and the committee’s performance at least annually.

The members of our audit committee are Messrs. Wells (chairperson) and Rajaram, and Ms. Buyer. During 2021, Mr. Falk also served on our audit committee until May 27, 2021. All members of our audit committee meet, and Mr. Falk met, the requirements for financial literacy under the applicable rules and regulations of the SEC and The Nasdaq Stock Market LLC (“Nasdaq”). Our board of directors has determined that Mr. Wells is an audit committee financial expert as defined under the applicable rules of the SEC and has the requisite financial sophistication as defined under the applicable rules and regulations of Nasdaq. Under the rules of the SEC, members of the audit committee must also meet heightened independence standards. Our board of directors has determined that each of Messrs. Wells and Rajaram and Ms. Buyer are, and Mr. Falk was, independent under the heightened audit committee independence standards of the SEC and Nasdaq. The audit committee operates under a written charter that satisfies the applicable standards of the SEC and Nasdaq. A copy of the charter of our audit committee is available on our website at http://investors.thetradedesk.com/.

During 2021, our audit committee met four times in person or by telephone.

Compensation Committee

Our compensation committee reviews and recommends policies relating to compensation and benefits of our executive officers and employees. Among other matters, our compensation committee:

 

reviews and recommends to our board of directors corporate goals and objectives relevant to the compensation of our chief executive officer and other executive officers;

 

evaluates the performance of our executive officers in light of those goals and objectives, and approves the compensation of these executive officers based on such evaluations;

 

reviews and approves or recommends to our board of directors the grant of stock options and other awards under our stock plans;

17


 

reviews and recommends to our board of directors the compensation of our non-employee directors; and

 

reviews and evaluates, at least annually, the performance of the compensation committee and its members, including compliance by our compensation committee with its charter.

In fulfilling its responsibilities, our compensation committee has the authority to delegate any or all of its responsibilities to a subcommittee of the compensation committee. Our compensation committee also has the authority to authorize one of our officers to grant rights or options to officers (other than executive officers) and employees, in a manner that is in accordance with applicable law, which it has previously authorized our chief executive officer and chief financial officer to do for certain employee equity awards.

The members of our compensation committee are Ms. Falberg (chairperson), and Messrs. Rajaram and Wells. Each of the members of our compensation committee is independent under the applicable rules and regulations of Nasdaq, is a “non-employee director” as defined in Rule 16b-3 promulgated under the Exchange Act. Our compensation committee operates under a written charter that satisfies the applicable standards of the SEC and Nasdaq. A copy of the charter of our compensation committee is available on our website at http://investors.thetradedesk.com/.

During 2021, our compensation committee met ten times in person or by telephone.

Nominating and Corporate Governance Committee

The nominating and corporate governance committee is responsible for making recommendations to our board of directors regarding candidates for directorships and the size and composition of our board of directors. In addition, the nominating and corporate governance committee is responsible for overseeing our corporate governance policies and reporting and making recommendations to our board of directors concerning governance matters.

The members of our nominating and corporate governance committee are Mses. Buyer (chairperson), Falberg and Cunningham, and Mr. Paley. Mr. Rajaram also served on our nominating and corporate governance committee through October 28, 2021. Ms. Cunningham joined our nominating and corporate governance committee on February 22, 2022. Each of the members of our nominating and corporate governance committee is an independent director under the applicable rules and regulations of NASDAQ. The nominating and corporate governance committee operates under a written charter that satisfies the applicable standards of the SEC and NASDAQ. A copy of the charter of our nominating and corporate governance committee is available on our website at http://investors.thetradedesk.com/.

During 2021, our nominating and corporate governance committee met four times in person or by telephone.

Compensation Committee Interlocks and Insider Participation

During 2021, Ms. Falberg and Messrs. Rajaram and Wells all served as members of our compensation committee. None of the members of our compensation committee has at any time been one of our officers or employees. None of our executive officers currently serves, or in the past fiscal year has served, as a member of the board of directors or compensation committee of any entity that has one or more executive officers on our board of directors or compensation committee.

Identifying and Evaluating Director Nominees

Our nominating and corporate governance committee is responsible for reviewing with the board of directors, on an annual basis, the appropriate characteristics, skills and experience required for the board of directors as a whole and its individual members. In evaluating the suitability of individual candidates (both new candidates and current members), the nominating and corporate governance committee, in recommending candidates for election, and the board of directors, in approving (and, in the case of vacancies, appointing) such candidates, will take into account many factors, including the following:

 

 

personal and professional integrity;

 

 

ethics and values;

18


 

 

 

experience in corporate management, such as serving as an officer or former officer of a publicly held company;

 

 

experience in the industries in which we compete;

 

 

experience as a board member or executive officer of another publicly held company;

 

 

diversity of expertise and experience in substantive matters pertaining to our business relative to other board members;

 

 

conflicts of interest; and

 

 

practical and mature business judgment.

Other than the foregoing, there are no stated minimum criteria for director nominees, although our nominating and corporate governance committee may also consider such other factors as it may deem, from time to time, are in our and our stockholders' best interests. Our board of directors evaluates each individual in the context of the board of directors as a whole, with the objective of assembling a group that can best maximize the success of the business and represent stockholder interests through the exercise of sound judgment using its diversity of experience in these various areas. Although the nominating and corporate governance committee may consider whether nominees assist in achieving a mix of board members that represents a diversity of background and experience, which is not only limited to race, gender or national origin, we have no formal policy regarding board diversity.

The following table sets forth certain diversity statistics as self-reported by the current members of our board of directors.

 

Board Diversity Matrix (As of April 12, 2022)

Total Number of Directors

8

Female

Male

Non-Binary

Did Not Disclose Gender

Part I: Gender Identity

Directors

3

4

-

1

Part II: Demographic Background

 

African American or Black

-

-

-

-

Alaskan Native or Native American

-

-

-

-

Asian

-

-

-

-

Hispanic or Latinx

-

-

-

-

Native Hawaiian or Pacific Islander

-

-

-

-

White

3

3

-

-

Two or More Races or Ethnicities

-

-

-

-

LGBTQ+

1

Did Not Disclose Demographic Background

2

Class A Director

Article VI, Section E of our certificate of incorporation provides that beginning on the date we publicly announce the class of the first director to serve in a Class A Director Seat (as defined below) and ending on the final conversion of our Class B common stock, the holders of our Class A common stock, voting as a single class, will have the right to elect one director if the total number of directors is eight or fewer or two directors if the total number of directors is nine or greater, with our board of directors determining the initial class into which each such director will be elected. Any seat filled by any director contemplated by this provision of the certificate of incorporation is referred to as a “Class A Director Seat.” On February 4, 2021, our board of directors appointed Mr. Wells to the initial Class A Director Seat. Since the time that the Class A Director Seat was enacted, it has been the intent of our board of directors to fill the seat with a new independent director. In accordance with that intent, our board of directors appointed Ms. Cunningham to replace Mr. Wells in the Class A Director Seat on February 22, 2022.

19


Stockholder Recommendations and Nominations to the Board of Directors

Stockholders may submit recommendations for director candidates to the nominating and corporate governance committee by sending the individual's name and qualifications to our Chief Legal Officer c/o The Trade Desk, Inc., 42 N. Chestnut St., Ventura, CA 93001, who will forward all recommendations to the nominating and corporate governance committee. The nominating and corporate governance committee will evaluate any candidates recommended by stockholders against the same criteria and pursuant to the same policies and procedures applicable to the evaluation of candidates proposed by directors or management.

Code of Business Conduct and Ethics

We have adopted a code of business conduct and ethics that applies to all of our employees, officers and directors, including those officers responsible for financial reporting. The code of business conduct and ethics is available on our website at www.thetradedesk.com. Any amendments to the code of business conduct and ethics, or any waivers of its requirements, will be disclosed on our website. The reference to our web address does not constitute incorporation by reference of the information contained at, or available through, our website.

Stockholder Communications with the Board of Directors

Stockholders and other parties interested in communicating directly with the board of directors may do so by writing to: Board of Directors, c/o The Trade Desk, Inc., 42 N. Chestnut St., Ventura, CA 93001. Concerns relating to accounting, internal controls or auditing matters are immediately brought to the attention of our audit committee and handled in accordance with applicable procedures established by the audit committee.

Independence of the Board of Directors

Our board of directors currently consists of eight members. Our board of directors has determined that all of our directors, other than Mr. Green, our chief executive officer, and Mr. Pickles, our chief technology officer, qualify as “independent” directors in accordance with the NASDAQ listing requirements. In addition, as required by NASDAQ rules, our board of directors has made a subjective determination as to each independent director that no relationships exist, which, in the opinion of our board of directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. In making these determinations, our board of directors reviewed and discussed information provided by the directors and us with regard to each director’s business and personal activities and relationships as they may relate to us and our management. There are no family relationships among any of our directors or executive officers.

Director Stock Ownership

The Board believes that all directors should maintain a meaningful personal financial stake in the Company to align their long-term interests with those of our stockholders. We maintain stock ownership guidelines that apply to our executive officers and non-employee directors. Under the guidelines, non-employee directors are to attain and maintain a minimum share ownership level equal to at least three times the value of their annual cash retainer, i.e., $150,000, within the later of five years of becoming a director or December 31, 2023. All of the covered individuals are either in compliance with our Stock Ownership Guidelines or have a period of time remaining to meet the required ownership level.

Director Attendance at Annual Meetings of Stockholders

Directors are encouraged, but not required, to attend our annual meetings of stockholders. Six out of seven of our directors then serving on the board of directors attended the 2021 annual meeting of stockholders.

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Whistleblower Procedures

In accordance with the Sarbanes-Oxley Act of 2002, we have established procedures for the receipt, retention and treatment of complaints regarding accounting, internal accounting controls or auditing matters and for the confidential, anonymous submission of concerns regarding accounting or auditing matters. If an individual has a concern regarding questionable accounting, internal accounting controls or auditing matters, or the reporting of fraudulent financial information, such individual may report his or her concern by sending a letter (which may be anonymous at the discretion of the reporting person), to us at our principal executive offices to the attention of the chief legal officer and to the chair of the audit committee. Individual employees may also report their concerns by telephone or online (which may be anonymous at the discretion of the reporting person) by using our ethics reporting system accessible through our website. Such complaints received by telephone or via online reporting system, are promptly sent to the chief legal officer and to the chair of the audit committee.

Limitation on Liability and Indemnification Matters

Our certificate of incorporation contains provisions that limit the liability of our directors for monetary damages to the fullest extent permitted by Delaware law. Consequently, our directors will not be personally liable to us or our stockholders for monetary damages for any breach of fiduciary duties as directors, except liability for:

 

 

any breach of the director’s duty of loyalty to us or our stockholders;

 

 

any act or omission not in good faith or that involves intentional misconduct or a knowing violation of law;

 

 

unlawful payments of dividends or unlawful stock repurchases or redemptions as provided in Section 174 of the Delaware General Corporation Law; or

 

 

any transaction from which the director derived an improper personal benefit.

Our certificate of incorporation and bylaws provide that we are required to indemnify our directors and officers, in each case to the fullest extent permitted by Delaware law. Our bylaws also provide that we are obligated to advance expenses incurred by a director or officer in advance of the final disposition of any action or proceeding, and permit us to secure insurance on behalf of any officer, director, employee or other agent for any liability arising out of his or her actions in that capacity regardless of whether we would otherwise be permitted to indemnify him or her under Delaware law. We have entered and expect to continue to enter into agreements to indemnify our directors, executive officers and other employees as determined by our board of directors. With specified exceptions, these agreements provide for indemnification for related expenses including, among other things, attorneys’ fees, judgments, fines and settlement amounts incurred by any of these individuals in any action or proceeding. We believe that these bylaw provisions and indemnification agreements are necessary to attract and retain qualified persons as directors and officers. We also maintain directors’ and officers’ liability insurance.

The limitation of liability and indemnification provisions in our certificate of incorporation and bylaws may discourage stockholders from bringing a lawsuit against our directors and officers for breach of their fiduciary duty. They may also reduce the likelihood of derivative litigation against our directors and officers, even though an action, if successful, might benefit us and our stockholders. Further, a stockholder’s investment may be adversely affected to the extent that we pay the costs of settlement and damage.

 

 

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EXECUTIVE OFFICERS

The following table sets forth information regarding our executive officers and management as of April 12, 2022:

 

 

Name

 

Age

 

 

Position(s)

Jeff T. Green

 

45

 

 

President and Chief Executive Officer, Director

Blake J. Grayson

 

48

 

 

Chief Financial Officer

David R. Pickles

 

44

 

 

Chief Technology Officer, Director

Michelle E. Hulst

 

48

 

 

Chief Data Officer

Jay R. Grant

 

55

 

 

Chief Legal Officer

 

 

 

 

 

 

Jeff T. Green. See Proposal One: Information Concerning Current Directors and Directors Continuing in Office for Mr. Green’s biographical information.

 

Blake J. Grayson has served as our chief financial officer since December 2019. Prior to joining The Trade Desk, Mr. Grayson was at Amazon.com, Inc. (“Amazon”) since 2009, where he served in a number of positions. Most recently Mr. Grayson was vice president, finance, for the International Consumer business, serving since April 2018 as the head of finance for businesses in the UK, Germany, France, Italy, Spain, Turkey, India, Japan, China, Australia, Brazil, the Middle East, and Singapore, as well as worldwide finance teams for Automated Marketing, Kindle Content/Books and Global Payments. Prior to that, Mr. Grayson was vice president, finance for Amazon Marketplace between April 2015 and April 2018 and finance director, North America retail (Consumables, Amazon Fresh, and Global Payments) from March 2013 to April 2015. Prior to his employment with Amazon, from June 2003 to February 2009, Mr. Grayson worked for Washington Mutual/JP Morgan Chase leading payments finance and financial planning and analysis functions, and previously worked in the wireless and financial services industries. Mr. Grayson received a B.A. in Business Administration (Phi Beta Kappa) from the University of Washington and an M.B.A. (with honors) from the University of Southern California.

David R. Pickles See Proposal One: Information Concerning Current Directors and Directors Continuing in Office for Mr. Pickles’s biographical information.

Michelle E. Hulst has served as our chief data officer since January 2022. Prior to this role, Ms. Hulst served as our chief operating officer since January 2021 and as our executive vice president, global data and strategy since July 2020. Prior to joining the Company, Ms. Hulst was group vice president, marketing and strategic partnerships at Oracle Data Cloud, a global business unit within Oracle, from September 2017 to July 2020, after serving as vice president, strategic partnerships and business development from April 2015 to September 2017. Prior to it being acquired by Oracle, Ms. Hulst worked at Datalogix from March 2006 to April 2015, where she was senior vice president, strategic partnerships and business development. Ms. Hulst previously worked at Entertainment Publications, an operating business of IAC/InterActiveCorp, from May 2005 to March 2006. Ms. Hulst has served as a member of the board of directors of the Bank of Hawaii since July 2019. Ms. Hulst received a B.A. in Organizational Psychology from the University of Michigan and an M.B.A. from the Kellogg School of Management at Northwestern University.

Jay R. Grant has served as our chief legal officer and secretary since October 2020. Prior to joining The Trade Desk, Mr. Grant developed extensive experience with media and digital enterprises at Univision Communications Inc. (“UCI”), a company with more than two dozen broadcasting networks, cable networks, digital and mobile properties and more than 120 television and radio stations. Most recently, from February 2019 to October 2020, Mr. Grant served as executive vice president and general counsel of UCI’s Digital and News divisions, and, from May 2016 to January 2019, he served as executive vice president and general counsel of UCI’s Fusion Media Group. Mr. Grant started his career in private practice at the law firm Manatt, Phelps & Phillips.  He received a B.A. in Government from Harvard University, an M.B.A. from New York University Stern School of Business and a J.D. from the University of California, Berkeley, School of Law.

 

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COMPENSATION DISCUSSION AND ANALYSIS

 

This Compensation Discussion and Analysis describes the compensation program for our Named Executive Officers (“NEOs”). During 2021, these individuals were:

 

Jeff T. Green, our Chief Executive Officer (“CEO”);

 

Blake J. Grayson, our Chief Financial Officer;

 

David R. Pickles, our Chief Technology Officer;

 

Michelle E. Hulst, our Chief Data Officer; and

 

Jay R. Grant, our Chief Legal Officer.

On January 11, 2021, Ms. Hulst was appointed as our Chief Operating Officer.

This Compensation Discussion and Analysis describes the material elements of our executive compensation program during 2021. It also provides an overview of our executive compensation philosophy and objectives. Finally, it analyzes how and why our compensation committee of our board of directors arrived at the specific compensation decisions for our executive officers, including our NEOs, for 2021, including the key factors that the compensation committee considered in determining their compensation.

Executive Summary

 

Who We Are

 

We are a technology company that empowers buyers of advertising. Through our self-service, cloud-based platform, ad buyers can create, manage and optimize more expressive data-driven digital advertising campaigns across ad formats, including display, video, audio, native and social, on a multitude of devices, such as computers, mobile devices and connected TV (CTV). Our platform’s integrations with major data, inventory and publisher partners provides ad buyers reach and decisioning capabilities, and our enterprise APIs enable our clients to develop on top of the platform.

2021 Business Highlights

 

During 2021, we continued to demonstrate our success in the marketplace as an independent platform buying media at scale, objectively, across digital channels and devices. We recorded advances across all channels in our business, including mobile, audio and CTV which contributed to strong revenue growth and adjusted earnings before interest, taxes, stock-based compensation, depreciation, and amortization (“Adjusted EBITDA”). Adjusted EBITDA is a financial measure not presented in accordance with generally accepted accounting principles (“GAAP”). For an explanation of our management’s use of this measure and a reconciliation of net income to Adjusted EBITDA, see Appendix A to this Proxy Statement. Our key business highlights for 2021 were as follows:

 

 

Revenue: Our total revenue grew to $1,196.5 million, up 43% compared with revenue of $836.0 million in 2020.

 

Net Income: Our net income decreased to $137.8 million, down 43% compared with net income of $242.3 million in 2020.

 

Adjusted EBITDA: Our Adjusted EBITDA grew to $502.7 million, up 77% compared with Adjusted EBITDA of $283.7 million in 2020.

 

Continued Share Gain: Our gross spend on the platform was $6.2 billion, a 47% increase from 2020.

 

Continued Omnichannel Growth: Omnichannel solutions remain a strategic focus for us as the industry continues shifting toward transparency and programmatic buying. From the channel perspective, CTV led our growth and Audio, Mobile, Mobile Video and Native each experienced double-digit growth on a year-over-year basis.

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Strong Customer Retention: We ended 2021 with approximately 980 active customers and customer retention remained over 95% during the fourth quarter, as it has for the previous 32 fiscal quarters.

2021 Executive Compensation Highlights

 

Based on our overall operating environment and these results, the compensation committee took the following key actions with respect to the compensation of our NEOs for and during 2021:

 

Base Salary: Approved annual base salary increases for each of our NEOs, including a base salary increase to $965,000 for our CEO.

 

 

Annual Cash Incentive Awards: Approved annual cash incentive awards of $2,703,912 for our CEO, and $1,351,956 for each of our other NEOs (excluding Ms. Hulst, who was appointed as our Chief Operating Officer on January 11, 2021 and earned a pro-rated cash incentive award of $1,342,183).

 

 

Long-Term Incentive Compensation: Granted long-term incentive compensation opportunities in the form of time-based restricted stock awards covering our Class A common stock and options to purchase shares of our Class A common stock, with an aggregate grant date fair value of approximately $828.4 million to our CEO, including the CEO Performance Option discussed in the following bullet, and approximately $5.3 million to each of our other NEOs.

 

 

CEO Performance Option: Granted to our CEO a market-based performance stock option to purchase up to 16,000,000 shares of our Class A common stock (at target) if specified goals for the per share price of our Class A common stock (ranging from $90.00 to $340.00 per share) and certain other vesting conditions are satisfied. Assuming achievement of the share price goals, the number of shares otherwise purchasable pursuant to the stock option may be decreased or increased by up to 20% based on the relative total shareholder return (“TSR”) of our Class A common stock compared to the TSR of the Nasdaq-100 Index at each vesting tranche. Our board of directors currently anticipates that this performance stock option will be the exclusive equity award granted to Mr. Green through the performance period for the grant, but the board of directors has discretion (but not the obligation) to grant additional equity awards if the board of directors determines such action to be appropriate.

 

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Executive Compensation Policies and Practices

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

 

 

  WHAT WE DO

 

  WHAT WE DON’T DO

 

     Maintain an Independent Compensation Committee. The compensation committee consists solely of independent directors.

 

     Retain an Independent Compensation Advisor. The compensation committee engaged its own compensation advisor to provide information and analysis with its 2021 compensation review, and other advice on executive compensation independent of management. This consultant performed no consulting or other services for us in 2021.

 

     Annual Executive Compensation Review. The compensation committee conducts an annual review and approval of our compensation strategy, including a review and determination of our compensation peer group used for comparative purposes and a review of our compensation-related risk profile to ensure that our compensation programs do not encourage excessive or inappropriate risk-taking and that the level of risk that they do encourage is not reasonably likely to have a material adverse effect on us.

 

    Compensation At-Risk. Our executive compensation program is designed so that a significant portion of compensation is “at risk” based on our performance, as well as equity based, to align the interests of our executive officers and stockholders.

    Use a Pay-for-Performance Philosophy. The majority of our executive officers’ compensation is linked to corporate performance; we also structure their target total direct compensation opportunities with a significant long-term equity component, thereby making a substantial portion of each executive officer’s target total direct compensation dependent upon our stock price performance. 

    Stock Ownership Guidelines. We maintain stock ownership guidelines that apply to our executive officers and non-employee members of our board of directors.

 

    Succession Planning. We review the risks associated with our key executive officer positions to ensure adequate succession plans are in place.

 

 

 

    No Executive Retirement Plans. We do not offer pension arrangements or retirement plans or arrangements to our executive officers that are different from or in addition to those offered to our other employees.

 

    Limited Perquisites. We provide limited perquisites or other personal benefits to our executive officers.

 

    No Special Welfare or Health Benefits. Our executive officers participate in broad-based company-sponsored health and welfare benefits programs on the same basis as our other full-time, salaried employees.

 

    No Post-Employment Tax Payment Reimbursement. We do not provide any tax reimbursement payments (including “gross-ups”) on any severance or change in control payments or benefits.

 

     No Hedging or Pledging of Our Equity Securities. We prohibit our executive officers, the members of our Board of Directors and other employees from hedging or pledging our equity securities.

 

    No Stock Option Re-pricing. Our employee stock plan does not permit stock options or stock appreciation rights to be repriced to a lower exercise or strike price without the approval of our stockholders.

 

Say-on-Pay Vote on Executive Compensation

In setting the form and amount of compensation for our NEOs, the compensation committee also considered the voting results from our most recent non-binding, advisory stockholder vote on the compensation of our NEOs (a “Say-on-Pay vote”) as well as feedback received from stockholders throughout the year. Stockholder support for our 2018 executive compensation program was strong (approximately 96% support at our 2019 Annual Meeting of Stockholders) and did not lead us to make any fundamental changes to our executive compensation program. At the Annual Meeting of Stockholders, we will be conducting our second Say-on-Pay vote as described in Proposal Three of this Proxy Statement. We will hold such Say-on-Pay votes every three years, as approved by our stockholders in a non-binding, advisory vote at our 2018 Annual Meeting of Stockholders (the “Say-on-Frequency” vote). Because we value the opinions of our stockholders, the board of directors and our compensation committee will consider the outcome of the Say-on-Pay vote, and the related Say-on-Frequency vote, as well as feedback received throughout the year, when making compensation decisions for our NEOs in the future.

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Executive Compensation Philosophy

Our executive compensation program is guided by our overarching philosophy of paying for demonstrable performance. Consistent with this philosophy, we have designed our executive compensation program to achieve the following primary objectives:

 

establish compensation opportunities that are competitive, reward performance and maintain internal equity;

 

attract, motivate and retain highly-talented executive officers; and

 

align the interests of our executive officers with the interests of our stockholders to drive the creation of sustainable long-term value.

 

Executive Compensation Program Design

 

Our current practice is to combine a mixture of compensation elements that balance achievement of our short-term goals with the creation of sustainable long-term value. We provide short-term annual cash incentive award opportunities which focus on our yearly operating results, and we provide long-term incentive compensation opportunities in the form of equity awards. We do not have a specific policy on the percentage allocation between short-term and long-term compensation elements.

 

We also believe that the compensation of our CEO should be primarily influenced by our overall financial performance. The compensation committee endeavors to set the compensation of our CEO within a range of compensation provided to similarly-situated chief executive officers of the companies in our compensation peer group, as adjusted by its consideration of the particular factors influencing our performance.

Executive Compensation Governance

Role of the Compensation Committee

The compensation committee reviews and sets the compensation of our executive officers, including our NEOs, and reviews and makes recommendations to our board of directors regarding the compensation of our non-employee directors. The compensation committee also reviews and approves or makes recommendations to our board of directors regarding our incentive compensation and equity-based plans and arrangements, including overseeing and evaluating the compensation plans, policies and practices applicable to our CEO and our other executive officers. The compensation committee retains a compensation consultant (described below) to provide support in its review and assessment of our executive compensation program.

Compensation-Setting Process

The compensation committee reviews the compensation arrangements and determines the target total direct compensation opportunity for our executive officers, including our NEOs. A short-term annual cash incentive award plan for the upcoming fiscal year is adopted prior to the beginning of each year, typically in December. Equity awards are typically granted annually. In 2021, equity awards were granted to our executive officers in April. Base salary adjustments are generally effective at the beginning of January of each year.

The compensation committee does not use a single method or measure in arriving at its compensation decisions. When making its determinations with respect to the amount of each compensation element and approving each compensation element and the target total direct compensation opportunity for our executive officers, the compensation committee considers the following factors:

 

our performance against the financial and operational objectives established by the compensation committee and our board of directors;

 

each individual executive officer’s skills, experience and qualifications relative to other similarly-situated executives at the companies in our compensation peer group;

26


 

the scope of each executive officer’s role compared to other similarly-situated executives at the companies in our compensation peer group;

 

the performance of each individual executive officer, based on a subjective assessment of his or her contributions to our overall performance, ability to lead his or her business unit or function and work as part of a team, all of which reflect our core values;

 

annual compensation parity among our executive officers;

 

our financial performance relative to our peers;

 

the compensation practices of our compensation peer group and the positioning of each executive officer’s compensation relative to peer company compensation levels; and

 

the recommendations provided by our CEO with respect to the compensation of our other executive officers.

These factors provide the framework for compensation decision-making and final decisions regarding the compensation opportunity for each executive officer. No single factor is determinative in setting pay levels, nor was the impact of any factor on the determination of pay levels quantifiable.

 

Role of Chief Executive Officer

In discharging its responsibilities, the compensation committee works with members of our management, including our CEO. Our management assists the compensation committee by providing information on corporate and individual performance, market compensation data and management’s perspective on compensation matters. The compensation committee solicits and reviews our CEO’s recommendations and proposals with respect to adjustments to annual cash compensation, long-term incentive compensation opportunities, program structures and other compensation-related matters for our executive officers (other than with respect to his own compensation).

 

The compensation committee reviews and discusses these recommendations and proposals with our CEO and considers them as one factor in determining the compensation for our executive officers, including our other NEOs. Our CEO recuses himself from, and is not present during, discussions and decisions regarding his own compensation.

Role of Compensation Consultant

The compensation committee engages an external compensation consultant to assist it by providing information, analysis and other advice relating to our executive compensation program and the decisions resulting from its annual executive compensation review. For 2021, the compensation committee engaged Compensia, Inc., a national compensation consulting firm (“Compensia”), as its compensation consultant to advise on executive compensation matters, including competitive market pay practices for senior executives, the design and terms of the Performance Option (as defined below) granted to our CEO and with the data analysis and selection of the compensation peer group. For 2021, the scope of Compensia’s engagement included, among other things:

 

a review of our compensation philosophy and practices;

 

the research, development, review, and updating of our compensation peer group;

 

the research, development and review of the Performance Option granted to our CEO;

 

the review and analysis of the compensation for our executive officers, including our CEO and our other NEOs;

 

the review of incentive compensation plan design;

 

the review and analysis of the compensation for our non-employee directors; and

 

support on other ad hoc matters throughout the year.

27


 

The terms of Compensia’s engagement include reporting directly to the compensation committee and to the compensation committee chair. Compensia also coordinates with our management for data collection and job matching for our executive officers. The compensation committee has evaluated Compensia’s independence pursuant to the listing standards of the Nasdaq and the relevant SEC rules and has determined that no conflict of interest has arisen as a result of the work performed by Compensia.  In addition, the compensation committee evaluated the independence of its other outside advisors to the compensation committee, including outside legal counsel, considering the same independence factors and concluded their work for the compensation committee does not raise any conflicts of interest.

Competitive Positioning

For purposes of comparing our executive compensation against the competitive market, the compensation committee reviews and considers the compensation levels and practices of a group of peer companies. This compensation peer group consists of advertising technology, software as a service and other technology companies that are similar to us in terms of revenue, profitability, growth and market capitalization.

 

In October 2020, with the assistance of Compensia, the compensation committee reviewed and updated our compensation peer group to reflect our increasing market capitalization and revenue size, and account for acquisitions of peer companies. The companies in this compensation peer group were selected on the basis of their similarity to us, based on the following criteria:

 

 

publicly-traded companies headquartered in the United States;

 

 

similar industry and competitive market for talent (advertising, software, Internet software and services, IT consulting and services and research and consulting services);

 

 

similar revenue size – within a range of ~0.33x to ~3.0x our last four quarters’ revenue (approximately $200 million to approximately $2.0 billion);

 

 

similar market capitalization – within a range of ~0.25x to ~4.0x our market capitalization (approximately $6.7 billion to approximately $107.2 billion);

 

 

product and business model similarity;

 

 

high growth (greater than 20% growth over the last four fiscal quarters); and

 

 

high market capitalization to revenue multiple and high market capitalization to EBITDA multiple.

 

As a result, the compensation committee approved a revised compensation peer group for 2021 consisting of the following companies:

 

 

Alteryx

Paylocity Holding

Cornerstone OnDemand

RealPage

Coupa Software

RingCentral

CrowdStrike Holdings

Roku

Datadog

Shopify

DocuSign

Slack Technologies

Dropbox

Snap

Fair Isaac

Splunk

Guidewire Software

Twilio

HubSpot

Twitter

J2 Global

Veeva Systems

LiveRamp Holdings

Zendesk

New Relic

Zoom Video

Okta

Zscaler

Paycom Software

 

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The compensation committee uses data drawn from our compensation peer group to evaluate the competitive market when determining the total direct compensation packages for our executive officers, including base salary, target short-term annual cash incentive award opportunities and long-term incentive compensation.

 

Individual Compensation Elements

 

In 2021, the principal elements of our executive compensation program, and the purposes for each element, were as follows:

 

 

Element

 

Compensation Element

 

Objective

Base Salary

 

Cash

 

Designed to attract and retain highly talented executives by providing fixed compensation amounts that are competitive in the market and reward performance

 

Short-Term Annual Cash Incentive Awards

 

Cash

 

Designed to motivate our executives to achieve annual business objectives and provide financial incentives when we meet or exceed these annual objectives

 

Long-Term Incentive Compensation

 

Equity awards in the form of restricted stock awards covering shares of our Class A common stock and options to purchase shares of Class A common stock

 

Designed to align the interests of our executives and our stockholders by motivating our executives to create sustainable long-term stockholder value

 

 

Base Salary

 

Base salary represents the fixed portion of the compensation of our executive officers, including our NEOs, and is an important element of compensation intended to attract and retain highly-talented individuals.

 

Using the competitive market data provided by Compensia, the compensation committee reviews and determines appropriate adjustments to the base salaries for each of our executive officers, including our NEOs, as part of its annual executive compensation review. Generally, the compensation committee sets the base salaries of our executive officers with reference to the competitive range of the market median of our compensation peer group and applicable executive compensation survey data, and considers the factors described in “—Executive Compensation GovernanceCompensation-Setting Process” above.

 

In January 2021, the compensation committee approved the 2021 base salaries for our executive officers, including our NEOs, as follows: $965,000 for Mr. Green and $535,000 for each of Messrs. Grayson, Pickles and Grant, and Ms. Hulst. In making these decisions, the compensation committee considered the factors described in “—Executive Compensation GovernanceCompensation-Setting Process” above and reviewed data drawn from the compensation peer group as approved in October 2020 and applicable executive compensation survey data. The 2021 base salaries for our NEOs were increased relative to their 2020 base salaries as follows:

 

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Name and Principal Position

 

2020 Annual Base Salary ($)

 

 

2021 Annual Base Salary ($)

 

Jeff T. Green

 

 

900,000

 

 

 

965,000

 

Chief Executive Officer

 

 

 

 

 

 

 

 

Blake Grayson

 

 

500,000

 

 

 

535,000

 

Chief Financial Officer

 

 

 

 

 

 

 

 

David R. Pickles

 

 

500,000

 

 

 

535,000

 

Chief Technology Officer

 

 

 

 

 

 

 

 

Jay R. Grant(1)

 

 

500,000

 

 

 

535,000

 

Chief Legal Officer

 

 

 

 

 

 

 

 

Michelle E. Hulst(2)

 

 

 

 

535,000

 

Chief Data Officer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Mr. Grant’s 2020 annual base salary reflects his actual annual salary, as opposed to the amount actually paid to him in 2020 as a result of the commencement of his employment with us beginning on October 5, 2020.

(2)

The compensation committee set the base salary for Ms. Hulst at $535,000 upon her appointment as our Chief Operating Officer on January 11, 2021. In addition to the factors described in “—Executive Compensation GovernanceCompensation-Setting Process” above, the compensation committee’s determination of Ms. Hulst’s base salary also involved considering applicable executive compensation survey data and an arms-length negotiation of the employment agreement related to her employment.

The annual base salaries paid to our NEOs for 2021 are set forth in “Information Regarding Compensation of Executive Officers and Directors—2021 Summary Compensation Table.”

Effective as of January 1, 2022, the base salary for Mr. Green was increased to $990,000, and the base salaries for each of Messrs. Grayson, Pickles and Grant, and Ms. Hulst was increased to $550,000.

 

Short-Term Annual Cash Incentive Awards

 

We use a short-term annual cash incentive plan to motivate our executive officers, including our NEOs, to achieve our key annual business objectives. In October 2020, the compensation committee adopted a short-term annual cash incentive plan for 2021 (the “2021 Cash Incentive Plan”) to provide financial incentives for us to meet or exceed the revenue targets established under our 2021 annual operating plan.

Target Annual Cash Incentive Award Opportunities

 

The target annual cash incentive award opportunities for our executive officers, including our NEOs, were recommended to the compensation committee by our CEO (except with respect to his own target annual cash incentive award opportunity), and approved by the compensation committee. The determination of target annual cash incentive award opportunities was based on the factors described in “—Executive Compensation Governance—Compensation-Setting Process” above and a review of data drawn from the compensation peer group as approved in October 2020 and applicable executive compensation survey data.

 

In January 2021, the compensation committee approved the target annual cash incentive award opportunities for 2021 for our executive officers, including our NEOs. As a percentage of base salary, the target annual cash incentive award opportunities were as follows: 111% for Mr. Green and 100% for Messrs. Grayson, Pickles and Grant, and Ms. Hulst.

Performance Measure

For purposes of the 2021 Cash Incentive Plan, the compensation committee, upon the recommendation of our CEO, selected revenue as the corporate performance measure for determining the annual cash incentive awards for our executive officers, including our NEOs, for the year. The compensation committee selected this performance measure based on its belief that revenue is the financial metric that was most important to our stockholders in 2021.

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Cash Incentive Plan Formula

For purposes of the 2021 Cash Incentive Plan, target annual cash incentive award payments were determined based on a bonus factor applied against our revenue.

 

The bonus factor for our CEO was set at 0.0093% of revenue if our revenue for the year was at least $920 million. The bonus factor increased with each incremental $10.0 million in revenue between $920 million and $1,160 million, at which point the bonus factor was set at 0.22599% of final revenue. Our target performance level for 2021 was $1,060 million of revenue, with a bonus factor of 0.10094%, which would result in a target annual cash incentive award payment of $1,070,000 for our CEO (i.e., 111% of base salary for Mr. Green).

 

The bonus factor for each of our other NEOs was set at 0.00465% of revenue if our revenue for the year was at least $920 million. The bonus factor increased with each incremental $10.0 million in revenue between $920 million and $1,160 million, at which point the bonus factor was set at 0.113% of final revenue. Our target performance level for 2021 was $1,060 million of revenue, with a bonus factor of 0.05047%, which would result in a target annual cash incentive award payment of $535,000 per NEO (i.e., 100% of base salary for Messrs. Grayson, Pickles, and Grant and Ms. Hulst).

Annual Cash Incentive Award Payments

The actual cash incentive award payments earned by our NEOs under the 2021 Cash Incentive Plan were $2,703,912 for Mr. Green, $1,351,956 for Messrs. Grayson, Pickles, and Grant and $1,342,183 for Ms. Hulst, based on $1,196 million of revenue and a bonus factor of 0.22599% and 0.113% for Mr. Green and the other NEOs, respectively. Ms. Hulst’s annual cash incentive award payment for 2021 was prorated based on her appointment date of January 11, 2021.  The short-term annual cash incentive award payments were paid to our NEOs in quarterly installments no later than 60 days following the end of the applicable calendar quarter assuming the underlying performance measure had been achieved for that quarter, subject to the NEO’s continued employment through the end of the applicable calendar quarter. The short-term annual cash incentive award payments made to our NEOs for 2021 are set forth in “Information Regarding Compensation of Executive Officers and Directors—2021 Summary Compensation Table.” In 2021, the board of directors approved an additional discretionary bonus of $1,000,000 for Mr. Green due to his exceptional performance during the COVID-19 pandemic.

Long-Term Incentive Compensation

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

Long-term incentive compensation opportunities in the form of equity awards are granted by the compensation committee. The amount and forms of such equity awards are determined by the compensation committee after considering the factors described in “—Executive Compensation Governance— Compensation-Setting Process” above and reviewing data drawn from the compensation peer group, as revised in October 2020. Equity awards are granted to align management interests with that of stockholders, as management is only rewarded when there is an increase in stockholder value. Multi-year-vesting is used for such equity awards for retention purposes and to foster long-term alignment with stockholder interests. The amounts of the equity awards are also intended to provide competitively-sized awards and resulting target total direct compensation opportunities at the 75th percentile relative to our compensation peer group for similar roles and positions for our executive officers as a group, taking into consideration business results, internal equity, experience and individual performance.

CEO Performance Option

In recognition of the pivotal role Mr. Green has played in our growth and success since our founding and our initial public offering, our board of directors approved the grant of a market-based performance stock option (the “Performance Option”) to Mr. Green in October 2021. The Performance Option is a long-term, stockholder-aligned incentive that is intended to provide significant motivation to Mr. Green to continue to concentrate his efforts on

31


building our business in a manner that ensures sustainable long-term valuation creation for our stockholders. To this end, the compensation committee, with the assistance of Compensia, designed the Performance Option such that it will only vest (and become exercisable) if the price per share of our Class A common stock reaches certain ambitious price goals, with the number of shares vesting (and becoming exercisable) for each tranche increased or decreased depending on our Class A common stock’s performance relative to the Nasdaq-100 Index, as further described below. With this design, the Performance Option only vests at ambitious targets where shareholders have already accrued significant market value after the date of grant.

Under the Performance Option, if pre-established per share stock price targets for our Class A common stock (ranging from $90.00 per share to $340.00 per share) are achieved and certain other vesting conditions are satisfied, Mr. Green may purchase 16,000,000 shares of our Class A common stock (at target), subject to adjustment as discussed below. The exercise price for the Performance Option is $68.29 per share, which was the closing price of our Class A common stock on October 6, 2021, the grant date of the Performance Option. The number of shares of our Class A common stock otherwise purchasable under each vesting tranche of the Performance Option may be increased or decreased from target by up to 20% based on the relative TSR of our Class A common stock as compared to the TSR of the Nasdaq-100 Index. The resulting number of shares as so adjusted is referred to herein as the “Eligible Option Shares.”

The Performance Option was granted under the Trade Desk, Inc. 2016 Incentive Award Plan (the “2016 Incentive Award Plan”). The shares of our Class A common stock subject to the Performance Option vest and become exercisable  in eight tranches over a ten-year term to the extent that the average closing price per share of our Class A common stock on the Nasdaq Global Select Market measured over any 30-consecutive-trading-day period equals or exceeds the applicable per-share stock price target following certification by our board of directors, as set forth in the following table, subject to adjustment for dividends, stock splits, combinations, reorganizations, reclassifications, or similar events (the “Stock Price Achievements”):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Number of Shares Subject to Performance Option

 

 

 

Vesting Tranche

 

Stock Price Achievement Vesting Condition ($)

 

 

<50th Percentile against Nasdaq‑100 Index

 

Target Shares(1)

 

>75th Percentile against Nasdaq‑100 Index

 

 

 

1

 

 

90.00

 

 

 

1,600,000

 

 

2,000,000

 

 

2,400,000

 

 

 

2

 

 

115.00

 

 

 

1,600,000

 

 

2,000,000

 

 

2,400,000

 

 

 

3

 

 

145.00

 

 

 

1,600,000

 

 

2,000,000

 

 

2,400,000

 

 

 

4

 

 

185.00

 

 

 

1,600,000

 

 

2,000,000

 

 

2,400,000

 

 

 

5

 

 

225.00

 

 

 

1,600,000

 

 

2,000,000

 

 

2,400,000

 

 

 

6

 

 

260.00

 

 

 

1,600,000

 

 

2,000,000

 

 

2,400,000

 

 

 

7

 

 

300.00

 

 

 

1,600,000

 

 

2,000,000

 

 

2,400,000

 

 

 

8

 

 

340.00

 

 

 

1,600,000

 

 

2,000,000

 

 

2,400,000

 

 

 

(1)

If the applicable Stock Price Achievement falls between the 50th and 75th percentiles of the Nasdaq-100 Index, the number of Eligible Option Shares that will vest (and become exercisable) will be interpolated on a linear basis, as described below.

 

The number of Target Shares set forth in the table above may be increased or decreased, based on the greatest result of three tests tied to our stock price performance relative to performance of the companies comprising the Nasdaq‑100 Index as of the grant date. The number of Eligible Option Shares that will vest with respect to each Vesting Tranche if the applicable Stock Price Achievement is met will be 2,000,000 shares, with the possibility of an adjustment (either an increase or a decrease) of up to 400,000 shares for each respective Vesting Tranche. If the applicable Stock Price Achievement falls above the 75th percentile of the Nasdaq-100 Index, the number of Eligible Option Shares that will vest will be increased by 400,000 shares. If the applicable Stock Price Achievement falls below the 50th percentile of the Nasdaq-100 Index, the number of Eligible Option Shares that will vest will be decreased by 400,000 shares. If the applicable Stock Price Achievement falls between the 50th and 75th percentiles of the Nasdaq-100 Index, the number

32


of Eligible Option Shares that will vest will be adjusted using linear interpolation between a 0% adjustment (at the 50th percentile) and a +20% adjustment (at the 75th percentile).

For the first four years following the date of grant of the Performance Option, the Eligible Option Shares will vest (and become exercisable) with respect to each Vesting Tranche subject to Mr. Green’s continued service as our CEO as of the applicable vesting date; thereafter, the Eligible Option Shares vest (and become exercisable) with respect to each Vesting Tranche subject to Mr. Green’s continued service as of the applicable vesting date as our CEO or in another role to be determined by the board of directors. In the event of a Change in Control (as defined in the 2016 Incentive Award Plan) that occurs prior to the full vesting of the Performance Option, the number of Eligible Option Shares that will vest will be determined based on the per-share consideration for the Class A common stock received in such Change in Control, as determined by the compensation committee, in accordance with the table above, using linear interpolation in the event such per-share consideration is between the levels in the table above. Any remaining shares will be forfeited as of immediately prior to such Change in Control.

In the event of a Qualifying Termination (as defined in the Performance Stock Option Award Agreement for the Performance Option (the “Award Agreement”)) that occurs prior to the full vesting of the Performance Option, the applicable vesting period will continue for nine months from the date of the Qualifying Termination, with the Eligible Option Shares being eligible to vest in the event the applicable stock price goal is achieved during such extended vesting period, and any remaining unvested shares will be forfeited as of nine months following the Qualifying Termination.

In the event of a termination of employment due to death or disability (as defined in the Award Agreement) that occurs prior to the full vesting of the Performance Option and that occurs on or before the four-year anniversary of the grant date, the number of Eligible Option Shares that will vest will be determined by measuring the Stock Price Achievement through the date of cessation of continued service, and, if such Stock Price Achievement is less than the stock price goal for the lowest unvested tranche but greater than the next lowest tranche, a number of Eligible Option Shares will vest, calculated using linear interpolation between the Stock Price Achievement through the cessation date and the stock price goal of the next lowest tranche (the “Incrementally Achieved Goal”). Any remaining unvested shares, including the remaining unvested shares in the tranche of the Incrementally Achieved Goal, remain eligible for vesting pursuant to the Qualifying Termination provision in the Award Agreement. In the event of a termination of employment due to death or disability (as defined in the Award Agreement) that occurs prior to the full vesting of the Performance Option and after the four-year anniversary of the grant date, the Target Shares for the lowest unvested tranche will fully vest as of the date of cessation, without application of the relative TSR modifier. Any remaining unvested shares remain eligible for vesting pursuant to the Qualifying Termination provision in the Award Agreement, as described above.

In the event of a material restatement of our financial statements during the term of the Performance Option, Eligible Option Shares will be subject to a clawback at the board of directors’ discretion if then-applicable law or the rules or listing standards of the applicable national securities exchange contain clawback provisions, Mr. Green knowingly and intentionally engaged in gross misconduct that led to such restatement, and if, as a result of such restatement, one or more Stock Price Achievements was achieved that otherwise would not have been achieved. All shares of our Class A common stock acquired upon exercise of the Eligible Option Shares are subject to a one-year holding period that begins on the date that the related option tranche vested (the “Holding Period”), subject to exceptions for dispositions of shares in connection with an exercise of the Eligible Option Shares solely to cover withholding tax obligations in connection with such exercise and transfers to Mr. Green’s immediate family (as defined in the Award Agreement), for estate planning purposes, or in connection with charitable or philanthropic activities. The term of the applicable Holding Period will continue to apply following such permitted transfers.

The board of directors currently anticipates that the Performance Option will be the exclusive equity award granted to Mr. Green through the performance period for the grant, but the board of directors has discretion (but not the obligation) to grant additional equity awards if the board of directors determines such action to be appropriate.

As of the date of this filing, the following Eligible Option Shares have become vested based on the achievement of the stock price goals discussed above: 2,400,000 shares with respect to Vesting Tranche 1. No further Stock Price Achievement has occurred.

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2021 Equity Awards

In April 2021, the compensation committee determined that the equity awards to be granted to our executive officers should be in the form of time-based restricted stock awards for shares of our Class A common stock (“RSAs”) and options to purchase shares of our Class A common stock (“Stock Options”).

The compensation committee approved a target equity amount of $9 million for Mr. Green to be awarded entirely as Stock Options and $5.1 million for Messrs. Grayson, Pickles and Grant, and Ms. Hulst split evenly between RSAs and Stock Options. The quantity of equity awards granted was based on the average closing stock price for a share of our Class A common stock for 45 consecutive trading days ending on, and including, the grant date. Based on this methodology, the following equity awards were granted to our NEOs in 2021: For Mr. Green, options to purchase 217,050 shares of our Class A common stock, with an aggregate grant date value of $9,467,886; and for each of our other NEOs (Messrs. Grayson, Pickles and Grant, and Ms. Hulst), options to purchase 61,370 shares of our Class A common stock and 35,780 shares of restricted Class A common stock, with an aggregate grant date fair value of $5,341,212.

The RSAs vest in equal quarterly installments over a four-year period, with 1/16th of the shares subject thereto vesting on August 15, 2021, and 1/16th of the shares subject thereto vesting on each quarterly anniversary thereafter, contingent upon the NEO remaining continuously employed by us through each applicable vesting date.

The stock options vest and become exercisable over a four-year period, with 1/48th of the shares subject thereto vesting on each monthly anniversary of the applicable vesting commencement date, contingent upon the NEO remaining continuously employed by us through each applicable vesting date. The stock options granted to our NEOs are intended to qualify as “incentive stock options” to the maximum extent permitted under the applicable tax regulations.

These equity awards were granted pursuant to the terms and conditions of the 2016 Incentive Award Plan.

The equity awards granted to our NEOs in 2021 are set forth in “Information Regarding Compensation of Executive Officers and Directors—2021 Summary Compensation Table,” and “Information Regarding Compensation of Executive Officers and Directors—2021 Grants of Plan-Based Awards Table.”

Employee Benefits

Our executive officers, including our NEOs, are eligible to receive the same employee benefits that are generally available to all our full-time employees, subject to the satisfaction of certain eligibility requirements. These benefits include health and welfare plans, an Employee Stock Purchase Plan, and a Section 401(k) retirement savings plan. We match 75% up to 6% of pay contributed to the Section 401(k) retirement savings plan each year. Our executive officers, including our NEOs, are eligible to participate in these plans on the same terms as other full-time employees. In structuring these benefit programs, we seek to provide an aggregate level of benefits that are comparable to those provided by similar companies.

Perquisites and Other Personal Benefits

Currently, we do not view perquisites or other personal benefits as a significant component of our executive compensation program. Accordingly, we do not generally provide perquisites or other personal benefits to our executive officers, including our NEOs, except as generally made available to our employees, or in situations where we believe it is appropriate to assist an individual in the performance of his or her duties, to make our executive officers more efficient and effective and for recruitment and retention purposes.

In connection with Mr. Green’s short-term assignment to Hong Kong, we entered into an International Assignment Agreement (the “International Assignment Agreement”), pursuant to which Mr. Green received tax equalization payments in 2021 which were intended to cover additional U.S. federal, state and Hong Kong income taxes associated with assignment-related income. For Mr. Green, the tax equalization payment was $1,597,273, and a one-time income tax “gross-up” bonus in connection with such tax equalization payment, in the amount of $298,486.

34


No other NEOs received perquisites or other personal benefits that were, in the aggregate, $10,000 or more in 2021.

In the future, we may provide perquisites or other personal benefits in limited circumstances, such as those described in the preceding paragraph. All future practices with respect to perquisites or other personal benefits will be approved and subject to periodic review by the compensation committee.

Other Compensation Policies and Practices

Policies on Hedging and Pledging of Company Securities

Our Insider Trading Compliance Policy prohibits all our employees, including our executive officers, and the non-employee members of our board of directors from engaging in derivative securities transactions, including hedging, with respect to our equity securities and from pledging our equity securities as collateral or holding our securities in a margin account.

Stock Ownership Guidelines

In April 2019, we established stock ownership guidelines to promote share ownership by our executive officers. Under the guidelines, our executive officers are to attain and maintain a minimum share ownership level of our common stock equal to a multiple of his or her base salary within the later of five years of becoming an executive officer, or December 31, 2023, as follows:

 

 

 

 

Position

  

Ownership Requirement

Chief Executive Officer

  

6x Annual Base Salary

Other Executive Officers

  

1x Annual Base Salary

All of the covered individuals are either in compliance with our Stock Ownership Guidelines or have a period of time remaining to meet the required ownership level.

Clawback Policy

Our board of directors has adopted a compensation recovery (“clawback”) policy, effective as of January 1, 2022, applicable to our executive officers. The clawback policy provides that, in the event of a restatement of our financial statements due to material noncompliance with financial reporting requirements, the administrator of the clawback policy may recover the amount of incentive compensation earned by an executive officer to the extent the amount of such compensation was calculated based on the achievement of certain financial results that were subsequently revised due to the restatement, and the amount of the incentive compensation that would have been earned by such executive officer had the financial results been properly reported would have been lower than the amount actually paid.

Moreover, the Performance Option is subject to a clawback at the discretion of the board of directors if then-applicable law or the rules of the applicable listing exchange have clawback provisions, Mr. Green knowingly and intentionally engaged in gross misconduct that led to a material restatement of our financial statements, and, as a result of such restatement, certain stock price goals were achieved that would not otherwise have been achieved.

Tax and Accounting Considerations

Deductibility of Executive Compensation

Generally, Section 162(m) of the Code (“Section 162(m)”) disallows a federal income tax deduction for public corporations of remuneration in excess of $1 million paid in any fiscal year to certain specified executive officers. These executive officers include our chief executive officer, chief financial officer, and any employee who is among the three highest compensated executive officers for the taxable year (other than the chief executive officer and chief financial officer), regardless of whether the executive officer is serving at the end of the public company’s taxable year and regardless of whether the executive officer’s compensation is subject to disclosure for the last completed fiscal year under the applicable SEC rules (a “Covered Employee”). In addition, once an individual becomes a Covered Employee for any taxable year beginning after December 31, 2016, that individual will remain a Covered Employee for all future years, including following any termination of employment.

35


While we may take into account deductibility of compensation when making compensation decisions, our compensation committee believes that stockholder interests are best served if our compensation committee retains maximum flexibility to design executive compensation programs that meet stated business objectives. Therefore, our compensation committee has approved base salaries and other compensation awards for our executive officers that may not be fully deductible because of the deduction limit of Section 162(m) and expects in the future to approve additional compensation that is not deductible for federal income tax purposes.

Accounting for Stock-Based Compensation

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

Compensation Risk Assessment

Our compensation committee assesses and considers the potential risks associated with the compensation programs for our executive officers and employees. Based upon this assessment, our compensation committee believes that our compensation plans, policies and practices for our NEOs and other employees do not create risks that are reasonably likely to have a material adverse effect on our Company.

 

 

 

 

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INFORMATION REGARDING COMPENSATION OF

EXECUTIVE OFFICERS AND NON-EMPLOYEE DIRECTORS

Executive Compensation

This section discusses the material components of the executive compensation program for our executive officers who are named in the “2021 Summary Compensation Table” below. We value the contributions of our executive officers equally as reflected by the compensation set forth in the table below. In 2021, our NEOs and their positions were as follows:

 

Jeff T. Green, our Chief Executive Officer;

 

Blake J. Grayson, our Chief Financial Officer;

 

David R. Pickles, our Chief Technology Officer;

 

Michelle E. Hulst, our Chief Data Officer; and

 

Jay R. Grant, our Chief Legal Officer.

This discussion may contain forward-looking statements that are based on our current plans, considerations, expectations and determinations regarding future compensation programs. Actual compensation programs that we adopt in the future may differ materially from the currently planned programs summarized in this discussion.

2021 Summary Compensation Table

The following table sets forth information regarding the total compensation, for services rendered in all capacities, that was paid or awarded to or earned by our NEOs during the fiscal years ended December 31, 2021, 2020 and 2019.

Name and Principal Position

 

Year

 

Salary

($)

 

 

Bonus

($)(8)

 

 

Option

Awards

($)(1)(7)

 

 

Stock

Awards

($)(2)

 

 

Non-Equity

Incentive

Compensation

($)(3)

 

 

All Other

Compensation

($)(4)

 

 

Total

($)(9)

 

Jeff T. Green

 

2021

 

 

965,000

 

 

 

1,000,000

 

 

 

828,384,776

 

 

 

 

 

2,703,912

 

 

 

1,905,679

 

 

 

834,959,367

 

Chief Executive Officer

 

2020

 

 

900,000

 

 

 

 

 

 

 

6,460,630

 

 

 

6,460,715

 

 

 

2,095,294

 

 

 

10,843

 

 

 

15,927,482

 

 

 

2019

 

 

850,000

 

 

 

 

 

 

 

3,856,546

 

 

 

3,856,367

 

 

 

2,003,006

 

 

 

1,569,554

 

 

 

12,135,473

 

Blake J. Grayson

 

2021

 

 

535,000

 

 

 

 

 

 

 

2,670,700

 

 

 

2,670,512

 

 

 

1,351,956

 

 

 

13,050

 

 

 

7,241,218

 

Chief Financial Officer

 

2020

 

 

500,000

 

 

 

 

 

 

 

1,615,106

 

 

 

1,614,954

 

 

 

1,047,647

 

 

 

12,825

 

 

 

4,790,531

 

 

 

2019

 

 

21,978

 

 

 

500,000

 

 

 

4,865,257

 

 

 

4,865,261

 

 

 

60,032

 

 

 

 

 

10,312,528

 

David R. Pickles

 

2021

 

 

535,000

 

 

 

 

 

 

 

2,670,700

 

 

 

2,670,512

 

 

 

1,351,956

 

 

 

13,050

 

 

 

7,241,218

 

Chief Technology Officer

 

2020

 

 

500,000

 

 

 

 

 

 

 

1,615,106

 

 

 

1,614,954

 

 

 

1,047,647

 

 

 

12,825

 

 

 

4,790,531

 

 

 

2019

 

 

475,000

 

 

 

 

 

 

 

1,385,405

 

 

 

1,385,432

 

 

 

1,001,503

 

 

 

12,805

 

 

 

4,260,145

 

Michelle E. Hulst (6)

 

2021

 

 

531,301

 

 

 

 

 

 

 

2,670,700

 

 

 

2,670,512

 

 

 

1,342,183

 

 

 

13,050

 

 

 

7,227,746

 

Chief Data Officer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Jay R. Grant (5)

 

2021

 

 

535,000

 

 

 

 

 

 

 

2,670,700

 

 

 

2,670,512

 

 

 

1,351,956

 

 

 

10,163

 

 

 

7,238,331

 

Chief Legal Officer

 

2020

 

 

105,769

 

 

 

250,000

 

 

 

1,657,698

 

 

 

1,519,714

 

 

 

338,902

 

 

 

721

 

 

 

3,872,804

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 (1)

Amounts reflect the aggregate full grant date fair value of the Stock Options granted to our NEOs during 2021, 2020 and 2019, as applicable, calculated in accordance with ASC Topic 718. The aggregate grant date fair value for the Stock Options was based on the Black-Scholes option valuation methodology. Such aggregate grant date fair values do not take into account any estimated forfeitures related to service-based vesting conditions. Additional information regarding these Stock Options is set forth in the “2021 Grants of Plan-Based Awards Table,” and “2021 Outstanding Equity Awards at Fiscal Year End Table.” For additional information, refer to Notes 2 and 10 to our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2021 filed with the SEC on February 16, 2022 (the “2021 Annual Report”). The amounts reported in this column reflect the accounting cost for the Stock Options and do not correspond to the actual economic value that may be received by our NEOs upon the exercise of the Stock Options.

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(2)

Amounts reflect the aggregate grant date fair value of the RSAs granted to our NEOs during 2021, 2020 and 2019, as applicable, calculated in accordance with ASC Topic 718. Such aggregate grant date fair values do not take into account any estimated forfeitures related to service-based vesting conditions. The aggregate grant date fair values of these RSAs were based on the fair value of our common stock on the date of grant, which was determined as the closing market price per share of our Class A common stock on the date of grant. Additional information regarding these RSAs is set forth in the “2021 Grants of Plan-Based Awards Table,” and “2021 Outstanding Equity Awards at Fiscal Year End Table.”  For additional information, refer to Notes 2 and 10 to our audited consolidated financial statements included in our 2021 Annual Report. The amounts reported in this column reflect the accounting cost for the RSAs and do not correspond to the actual economic value that may be received by the NEOs upon the vesting or settlement of the RSAs.

(3)

Amounts represent cash incentive awards earned by our NEOs in 2021, 2020 and 2019, as applicable, under our short-term annual cash incentive plan. For additional information about the payments made in 2021, see “Compensation Discussion and Analysis—Individual Compensation Elements—Annual Cash Incentive Awards.”

(4)

For 2021, amounts represent our Section 401(k) matching contributions for our NEOs. Additionally, for 2021 the amounts reported include the following items for Mr. Green: (i) a $1,597,273 tax equalization payment in connection with the International Assignment Agreement, and (ii) an income tax “gross up” bonus in connection with such tax equalization payment in the amount of $298,486.

(5)

Mr. Grant joined our Company as our Chief Legal Officer on October 5, 2020, and his base salary and short-term annual cash incentive compensation were pro-rated to reflect his partial year of service. Mr. Grant received a signing bonus of $250,000 in 2020 in connection with his appointment as our Chief Legal Officer.

(6)

Ms. Hulst joined our Company as our Executive Vice President, Global Data & Strategy on July 27, 2020. She was appointed as our Chief Operating Officer effective January 11, 2021 and became our Chief Data Officer effective January 30, 2022. Her base salary and short-term annual cash incentive compensation were pro-rated to reflect her appointment to Chief Operating Officer in 2021.

(7)

Reflects the Performance Option, which will become exercisable and vested in eight tranches over a ten-year term to the extent that the average closing price per share of the Class A common stock on the Nasdaq Global Select Market measured over any 30-consecutive-trading-day period equals or exceeds the applicable per-share stock price (ranging from $90.00 per share to $340.00 per share) following certification by our board of directors, subject to adjustment for dividends, stock splits, combinations, reorganizations, reclassifications, or similar events. See “Long-Term Incentive Compensation—CEO Performance Option” above for further information.  Per guidance under Item 402 of Regulation S-K, the amount included for the Performance Option reflects the full grant date fair value, as adjusted to reflect any reduction in value that is appropriate for the probability that the applicable stock price goals might not be met and the underlying shares not earned.

(8)

For 2021, the $1,000,000 bonus to Mr. Green represents a discretionary bonus in addition to the non-equity incentive compensation under our annual cash incentive plan.

(9)

The $834,959,367 in compensation set forth above with respect to Mr. Green includes the value of the Performance Option for accounting purposes.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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2021 Grants of Plan-Based Awards Table

The following table provides information about the plan-based awards granted in 2021 to each of our NEOs.

 

 

 

 

 

 

Estimated

Future

Payouts

Under

Non-Equity

Incentive Plan

Awards Target

 

 

Estimated Future Payouts Under Equity Incentive Plan Awards (#)(2)

 

 

All Other

Stock

Awards:

Number of

Shares of

Stock or

Units

 

 

All Other

Option

Awards:

Number of

Securities

Underlying

Options

 

 

Exercise or

Base Price

of Option

Awards

 

 

Grant Date

Fair Value

of Stock

Options

and Awards

 

Name

 

Grant Date

 

($)(1)

 

 

Threshold

 

 

Target

 

 

Maximum

 

 

(#)

 

 

(#)

 

 

($/Sh)

 

 

($)(3)(4)

 

Jeff T. Green

 

N/A

 

 

1,070,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4/29/2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,330

 

 

82.388

 

 

 

47,393

 

 

 

4/29/2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

215,720

 

 

74.898

 

 

 

9,420,492

 

 

 

10/6/2021

 

 

 

 

1,600,000

 

 

 

16,000,000

 

 

 

19,200,000

 

 

 

 

 

 

 

68.290

 

 

 

818,916,891

 

Blake J. Grayson

 

N/A

 

 

535,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4/28/2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

35,780

 

 

 

 

 

 

 

2,670,512

 

 

 

4/28/2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

61,370

 

 

74.637

 

 

 

2,670,700

 

David R. Pickles

 

N/A

 

 

535,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4/28/2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

35,780

 

 

 

 

 

 

 

2,670,512

 

 

 

4/28/2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

61,370

 

 

74.637

 

 

 

2,670,700

 

Michele E. Hulst

 

N/A

 

 

535,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4/28/2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

35,780

 

 

 

 

 

 

 

2,670,512

 

 

 

4/28/2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

61,370

 

 

74.637

 

 

 

2,670,700

 

Jay R. Grant

 

N/A

 

 

535,000