PayPal Proxy: CEO Transition & New Hire Awards

TL;DR

PayPal's proxy statement details CEO transition pay & new hire incentives.

AI Summary

PayPal Holdings, Inc. filed a DEFA14A proxy statement on May 6, 2024, detailing executive compensation strategies. The Compensation Committee focused on structuring compensation for the former CEO to facilitate an orderly leadership transition and designed new hire awards for fiscal year 2023 to attract talent.

Why It Matters

This filing provides insight into how PayPal is managing executive compensation during leadership changes and its strategy for attracting new talent, which can impact future company performance and shareholder value.

Risk Assessment

Risk Level: low — The filing is a standard proxy statement related to executive compensation and corporate governance, not indicating immediate financial distress or significant operational risk.

Key Players & Entities

• PayPal Holdings, Inc. (company) — Registrant
• 20240506 (date) — Filing Date
• 20240506 (date) — Date as of Change
• 0001633917 (company) — Central Index Key
• 7389 (company) — Standard Industrial Classification
• 472989869 (company) — IRS Number
• 1231 (date) — Fiscal Year End
• 001-36859 (company) — SEC File Number
• 24918026 (company) — Film Number
• 2211 NORTH FIRST STREET (company) — Business Address Street 1

FAQ

Key Financial Figures

• $1.5 — profitable growth Total Payment Volume $1.5T Revenue (up 8% year over year) $29.7B
• $29.7B — me $1.5T Revenue (up 8% year over year) $29.7B 25B ~200 Global Markets Table of Cont
• $1.25M — us Make-Whole or Sign-On Incentive RSUs $1.25M 200% $16.75M(2) $17M (target value) Thr
• $16.75M — e or Sign-On Incentive RSUs $1.25M 200% $16.75M(2) $17M (target value) Three-year perfo
• $17M — n Incentive RSUs $1.25M 200% $16.75M(2) $17M (target value) Three-year performance p
• $10M — goals (2023-2025 PBRSU formulation) N/A $10M(3) (Make-Whole) Critical to successfull
• $18M — his prior employer, where he forfeited ~$18M upon joining PayPal Three-year performa
• $750K — he forfeited ~$18M upon joining PayPal $750K 125% $6.25M(2) $6.25M (target value) Th
• $6.25M — ed ~$18M upon joining PayPal $750K 125% $6.25M(2) $6.25M (target value) Three-year per
• $6M — e S&P 500 (2024-2026 PBRSU formulation) $6M(4) $2M(2) (Sign-On) Ensures a meaningfu
• $2M — 00 (2024-2026 PBRSU formulation) $6M(4) $2M(2) (Sign-On) Ensures a meaningful owner
• $18.7M — onboard quickly 2023 LTI Target Value: $18.7M reduced from 2022 LTI Target Value: $24
• $24M — .7M reduced from 2022 LTI Target Value: $24M Mr. Schulman's 2023 total LTI target va
• $5.3M — 3 total LTI target value was reduced by $5.3M year-over-year as a result of an assess
• $6.7M — sibilities and departure from the Board $6.7M (total target value) Total LTI Target V

Filing Documents

• d828553ddefa14a.htm (DEFA14A) — 49KB
• g828553g00r02.jpg (GRAPHIC) — 1KB
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• 0001193125-24-131979.txt ( ) — 3159KB

From the Filing

DEFA14A Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 SCHEDULE 14A Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 (Amendment No. ) 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 PAYPAL HOLDINGS, 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. Table of Contents Spring 2024 Stockholder Outreach Table of Contents The Compensation Committee strategically designed compensation for our former CEO to ensure an orderly and effective leadership transition, and thoughtfully structured fiscal 2023 new hire awards that both attracted top talent (including our new CEO and several senior executives) and ensure appropriate long-term alignment with the interests of our stockholders. In alignment with stockholder feedback, the Compensation Committee made enhancements to our go-forward compensation plans to: 1) strengthen pay for performance alignment, 2) increase the focus on profitable growth in 2024, 3) reduce burn rate and 4) address historical challenges experienced in connection with setting long-term performance goals while effectively motivating leaders to holistically execute during a transitional period as our strategy continues to evolve. Say-on-Pay There are two stockholder proposals on the ballot for PayPal's 2024 Annual Meeting; the Board recommends Against each of them because PayPal already has comprehensive and diligent practices in place regarding the matters at hand. The proposals are not in the best interest of PayPal or its stockholders. Stockholder Proposals Our Board has the complementary skills and experiences to oversee the Company, and the risks and opportunities we face, as we continue to evolve and grow in a dynamic competitive environment. In 2023, our Board focused on critical objectives: 1) transforming our executive leadership team, adding product and innovation expertise that positions PayPal for our next phase of growth as a high-performing organization; 2) driving greater impact for our customers; and 3) driving long-term stockholder value. Election of Directors Summary of Key Annual Meeting Themes and Context Our Compensation Committee strategically utilizes equity compensation to attract and retain top talent in our highly competitive labor market while thoughtfully managing dilution. Our Equity Plan is governed by best practices, and we are proposing an amendment to modestly increase our share reserve and remove the inverse fungible share ratio. Equity Plan Amendment Table of Contents Power all aspects of digital checkout online and in store Provide access to seamless credit solutions to enable growth Offer tools and insights to attract new customers and increase sales Protect against fraud and improve risk management Deliver flexibility with payment options globally, across platforms and merchants Help people manage and move money domestically and internationally Offer credit and installment pay services that are accessible and cost effective Facilitate simple, secure payments across devices Merchants Consumers Our Two-Sided Platform Serves Merchants and Consumers Business Overview(1) Transactions Scale Reach Represents total payments volume (TPV) and revenue for FY'23. PayPal is a global digital payments leader with a two-sided network at scale that positions us to drive durable, profitable growth Total Payment Volume $1.5T Revenue (up 8% year over year) $29.7B 25B ~200 Global Markets Table of Contents A refreshed executive leadership team driving the next phase of our growth Michelle Gill EVP, General Manager - Small Business & Financial Services Group Archana (Archie) Deskus EVP, Chief Technology Officer Bimal Patel SVP, General Counsel John Kim EVP, Chief Product Officer Diego Scotti EVP, General Manager - Consumer Group & Global Marketing and Communications Kausik Rajgopal EVP, Strategy, Corporate Development & Partnerships Frank Keller EVP, General Manager - Large Enterprise & Merchant Platform Group Suzan Kereere President, Global Markets The Board conducted an intensive CEO search process and identified Alex Chriss to serve as CEO given his extensive product and innovation, technology and global payments experience, which position him to drive growth across the PayPal platform for years to come. Alex also possesses deep expertise in leading high-growth businesses, global product strategy, and customer-driven innov

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View this DEFA14A filing on SEC EDGAR