04/19/2024 | Press release | Distributed by Public on 04/19/2024 04:41
TABLE OF CONTENTS
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material under § 240.14a-12
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VARONIS SYSTEMS, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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Payment of Filing Fee (Check the appropriate box):
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No fee required
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Fee paid previously with preliminary materials.
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Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11
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TABLE OF CONTENTS
On behalf of the Board of Directors, I warmly invite you to attend the 2024 Annual Meeting of Shareholders of Varonis Systems, Inc., to be held at 10:00 a.m., Eastern Daylight Time, on June 3, 2024, at www.virtualshareholdermeeting.com/VRNS2024. This year, similar to last year, the meeting will be held virtually, and will provide our shareholders with the same rights and opportunities to participate as they would have at an in-person meeting.
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Attached to this letter are a Notice of Annual Meeting of Shareholders and Proxy Statement, which describe the business to be conducted at the meeting.
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(1)
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Elect three Class I director nominees listed in the Proxy Statement;
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(2)
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Approve, on a non-binding, advisory basis, the frequency of future votes to approve executive compensation;
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(3)
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Approve, on a non-binding, advisory basis, the compensation of our named executive officers;
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(4)
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Ratify the appointment of Kost Forer Gabbay & Kasierer, a member of Ernst & Young Global Limited, as the independent registered public accounting firm of the Company for 2024;
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(5)
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Approve the Amended and Restated Varonis Systems, Inc. 2023 Omnibus Equity Incentive Plan; and
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(6)
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Consider such other business as may properly come before the 2024 Annual Meeting of Shareholders and any adjournments or postponements thereof.
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TABLE OF CONTENTS
DATE AND TIME:
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June 3, 2024 at 10:00 a.m., Eastern Daylight Time
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PLACE:
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The 2024 Annual Meeting of Shareholders (the "Annual Meeting") will be held in a virtual format at the following virtual meeting site: www.virtualshareholdermeeting.com/VRNS2024
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ITEMS OF BUSINESS:
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(1)
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To elect three Class I director nominees listed in the Proxy Statement;
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(2)
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To approve, on a non-binding, advisory basis, the frequency of future votes to approve executive compensation;
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(3)
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To approve, on a non-binding, advisory basis, the compensation of our named executive officers;
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(4)
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To ratify the appointment of Kost Forer Gabbay & Kasierer, a member of Ernst & Young Global Limited ("E&Y"), as the independent registered public accounting firm of the Company for 2024;
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(5)
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To approve the Amended and Restated Varonis Systems, Inc. 2023 Omnibus Equity Incentive Plan; and
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(6)
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To transact such other business as may properly come before the Annual Meeting and any adjournments or postponements thereof.
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These items of business are more fully described in the Proxy Statement accompanying this Notice of 2024 Annual Meeting of Shareholders.
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WHO CAN VOTE:
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The record date for the Annual Meeting is April 8, 2024. Only shareholders of record at the close of business on that date may vote at the Annual Meeting or any adjournment thereof.
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VOTING:
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Whether or not you expect to attend the Annual Meeting, we urge you to vote your shares by telephone, through the internet or by mailing your completed and signed proxy card (or voting instruction form, if you hold your shares through a broker, bank or other nominee). Even if you have voted by proxy card, you may still vote if you attend the Annual Meeting. Please note, however, that if your shares are held of record by a broker, bank or other nominee, then you are the "beneficial owner of shares held in street name." As a beneficial owner, if you wish to vote at the Annual Meeting, you must obtain a proxy issued in your name from that record holder.
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SHAREHOLDER LIST:
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A list of the names of shareholders entitled to vote at the Annual Meeting will be available to shareholders for ten days prior to the Annual Meeting for any purpose germane to the Annual Meeting. Please contact Tim Perz, Director of Investor Relations, at [email protected]or at (646) 640-2112, if you wish to examine the list prior to the Annual Meeting. The shareholder list will also be available during the Annual Meeting for examination by any shareholder at www.virtualshareholdermeeting.com/VRNS2024.
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TABLE OF CONTENTS
2023 FINANCIAL BUSINESS HIGHLIGHTS
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i
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TABLE OF CONTENTS
PROXY STATEMENT SUMMARY
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1
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PROPOSALS REQUIRING YOUR VOTE
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5
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PROPOSAL NO. 1: ELECTION OF DIRECTORS
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5
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PROPOSAL NO. 2: NON-BINDING VOTE TO APPROVE THE FREQUENCY OF FUTURE VOTES TO APPROVE EXECUTIVE COMPENSATION
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9
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PROPOSAL NO. 3: NON-BINDING VOTE TO APPROVE THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS
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10
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PROPOSAL NO. 4: RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
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11
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PROPOSAL NO. 5: APPROVAL OF AMENDED AND RESTATED VARONIS SYSTEMS, INC. 2023 OMNIBUS EQUITY INCENTIVE PLAN
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13
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INFORMATION REGARDING THE BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
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19
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CORPORATE RESPONSIBILITY
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28
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EXECUTIVE OFFICERS
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30
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AUDIT COMMITTEE REPORT
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31
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
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32
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COMPENSATION DISCUSSION AND ANALYSIS
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34
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REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
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46
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EXECUTIVE COMPENSATION
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47
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DIRECTOR COMPENSATION
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52
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CHIEF EXECUTIVE OFFICER PAY RATIO
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53
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PAY VERSUS PERFORMANCE
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54
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EQUITY COMPENSATION PLAN INFORMATION
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57
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TRANSACTIONS WITH RELATED PERSONS
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57
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QUESTIONS AND ANSWERS ABOUT THESE PROXY MATERIALS AND VOTING
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59
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OTHER MATTERS
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62
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APPENDIX A - AMENDED AND RESTATED VARONIS SYSTEMS, INC. 2023 OMNIBUS EQUITY INCENTIVE PLAN (REFLECTING PROPOSED AMENDMENT)
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A-1
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APPENDIX B - NON-GAAP RECONCILIATION
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B-1
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ii
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TABLE OF CONTENTS
PROXY STATEMENT SUMMARY
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Place: www.virtualshareholdermeeting.com/VRNS2024
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Date: June 3, 2024
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Record Date: April 8, 2024
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Time: 10:00 a.m., Eastern Daylight Time
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Proposal
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Board Vote
Recommendation
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Page
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Proposal 1 - Election of Directors
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FOR
each of the nominees
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5
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Proposal 2 - Advisory Vote to Approve Frequency of Future Votes to Approve Executive Compensation
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FOR 1 YEAR
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9
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Proposal 3 - Advisory Vote to Approve Executive Compensation
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FOR
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10
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Proposal 4 - Auditor Ratification Proposal
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FOR
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11
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Proposal 5 - Approval of Amended and Restated Varonis Systems, Inc. 2023 Omnibus Equity Incentive Plan
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FOR
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13
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How to Vote
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Shareholders of Record
(Shares registered in your name with
Varonis's transfer agent)
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Street Name Holders
(Shares held through a Broker,
Bank or Other Nominee)
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Internet
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Visit the applicable voting website
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www.proxyvote.com
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www.proxyvote.com
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Telephone
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Within the United States, U.S. Territories and Canada, call toll-free
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1-800-690-6903
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Refer to voting instruction form.
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Mail
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Complete, sign and mail your proxy card or voting instruction form in the self-addressed envelope provided to you.
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Virtually
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Vote during the Annual Meeting by visiting
www.virtualshareholdermeeting.com/VRNS2024
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Refer to voting instruction form.
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1
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TABLE OF CONTENTS
Name
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Age
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Director
Since
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Independent
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Committee Memberships
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AC
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CC
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NCGC
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TC
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Gili Iohan
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48
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2017
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Yes
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Rachel Prishkolnik
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56
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2021
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Yes
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Ofer Segev
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64
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2015
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Yes
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AC: Audit Committee
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- Committee Chairperson
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CC: Compensation Committee
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NCGC: Nominating and Corporate Governance Committee
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TC: Technology Committee
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• 10 of our 11 Directors are independent
• Independent Lead Director
• Our Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee consist solely of independent directors
• Approximately 55% of directors are gender and/or ethnically diverse, including two female directors
• Robust risk oversight by Board and committees
• Executive sessions of independent directors
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• At least 75% average Board and committee meeting attendance for each director in 2023
• Focus on board refreshment, with 60% of the Company's independent directors having served nine years or fewer, and more than 25% of the Company's directors having joined since 2021
• Annual Board and Board committee self-evaluations
• No shareholder rights plan or "poison pill"
• Single class of shares so that all shareholders have an equal vote
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• Comprehensive code of ethics and business conduct and corporate governance guidelines ("Corporate Governance Guidelines")
• Compensation "claw-back" policy
• Stock ownership guidelines for directors and executive officers
• Policy prohibiting hedging and pledging of shares owned by directors, executive officers and employees
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3
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Board Diversity Matrix
(as of April 19, 2024)
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Total Number of Directors
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11
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Female
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Male
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Non-
Binary
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Did Not
Disclose
Gender
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Part I: Gender Identity
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Directors
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2
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9
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-
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-
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Part II: Demographic Background
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African American or Black
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-
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-
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-
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-
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Alaskan Native or Native American
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-
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-
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-
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-
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Asian
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-
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-
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-
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-
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Hispanic or Latinx
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-
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1
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-
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-
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Native Hawaiian or Pacific Islander
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-
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-
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-
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-
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White
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2
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8
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-
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-
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Two or More Races or Ethnicities
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-
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-
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-
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-
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LGBTQ+
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-
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Did Not Disclose Demographic Background
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-
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4
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PROPOSALS REQUIRING YOUR VOTE
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CLASS I DIRECTOR NOMINEES
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GILI IOHAN
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Age:48
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Position, Principal Occupation and Professional Experience:
Partner, Ion Crossover Partners. Ms. Iohan has served as a director since April 2017. Ms. Iohan is a partner at Ion Crossover Partners, an investment firm. Ms. Iohan served as the Company's first Chief Financial Officer from 2005 until March 2017. During her twelve-year tenure, she was responsible for the Company's finance, accounting, back-office operations and human resources. Prior to joining us, Ms. Iohan was a partner at NextAge Co. Ltd. for six years, a firm specializing in providing customized budgeting and controllership environments, strategic business planning and structuring, financial and accounting issue resolution for businesses of all sizes. While at NextAge Co. Ltd., Ms. Iohan served as a Chief Financial Officer and Strategic Financial Consultant for several companies, including SolarEdge. Previously, Ms. Iohan served as a Senior Financial Manager at M-Systems Inc. and held a position at KPMG LLP.
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Other Current and Past Directorships: Ms. Iohan serves as a director at Fiverr International Ltd (NYSE: FVRR), and Monday.com (Nasdaq: MNDY) and served as a director at SimilarWeb (NYSE: SMWB) until March 2024.
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Director Qualifications: Our Board of Directors believes that Ms. Iohan possesses specific attributes that qualify her to serve as a director, including her long history at our Company, her experience as a Chief Financial Officer of several global software and technology companies, her experience serving as a director on other public company boards, and her human capital management experience.
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RACHEL PRISHKOLNIK
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Age:56
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Position, Principal Occupation and Professional Experience:
VP General Counsel & Corporate Secretary, SolarEdge Technologies, Inc. Ms. Prishkolnik has served as a director since May 2021. Ms. Prishkolnik has been Vice President, General Counsel and Corporate Secretary of SolarEdge Technologies, Inc. ("SolarEdge"), a global leader in smart energy technology publicly traded on the Nasdaq Global Select Market, since 2010. Prior to joining SolarEdge, Ms. Prishkolnik served as the Vice President, General Counsel & Corporate Secretary of Gilat Satellite Networks Ltd. ("Gilat"). At Gilat she held various positions beginning as Legal Counsel in 2001 and becoming Corporate Secretary in 2004 and Vice President, General Counsel in 2007. Prior to Gilat, she worked at the law firm of Jeffer, Mangels, Butler & Marmaro LLP in Los Angeles. Ms. Prishkolnik holds an LLB law degree from the Faculty of Law at the Tel Aviv University and a B.A. from Wesleyan University in Connecticut. She is licensed to practice law and is a member of the Israeli Bar.
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Other Current and Past Directorships: None.
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Director Qualifications: Our Board of Directors believes that Ms. Prishkolnik possesses specific attributes that qualify her to serve as a director, including her experience as a General Counsel of a publicly traded company with experience navigating complex legal, regulatory and corporate governance matters.
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5
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OFER SEGEV
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Age: 64
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Position, Principal Occupation and Professional Experience:
Chief Financial Officer, Windward Ltd. Mr. Segev has served as a director since 2015. Since 2019, he has served as Chief Financial Officer at Windward Ltd, a predictive intelligence company serving the global maritime industry, and has served as a director of the company since December 2021. From February 2017 to October 2019, Mr. Segev served as the Chief Financial Officer and Chief Operating Officer at AlgoSec, Inc., a network security policy management solutions provider. Prior to joining AlgoSec, from November 2014 to April 2015, he served as the Vice President of Finance and Chief Financial Officer of AudioCodes Limited, a communications company publicly traded on the Nasdaq Global Select Market. Prior to AudioCodes, Mr. Segev served at different times as the Chief Executive Officer and Chief Financial Officer of Ness Technologies, Inc., a provider of IT services whose shares were formerly traded on the Nasdaq Global Select Market. Mr. Segev has also been the Chief Executive Officer and Chief Financial Officer of various other companies, including Attunity, and was a partner at Ernst & Young.
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Other Current and Past Directorships: Mr. Segev serves as a director at Windward Ltd. (LON: WNWD) and previously served as a director at Ness Technologies Srl from 2012 to 2014.
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Director Qualifications: Our Board of Directors believes that Mr. Segev possesses specific attributes that qualify him to serve as a director, including his more than 25 years of management and financial experience in the global high-tech and service sectors which he gained by serving as Chief Executive Officer and Chief Financial Officer of several companies, including publicly traded companies and his experience serving as a director on other public company boards.
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CONTINUING DIRECTORS
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CARLOS AUED
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Age: 65
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Position, Principal Occupation and Professional Experience:
Director, Varonis Systems, Inc. Mr. Aued has served as a director of the Company since January 2022. Mr. Aued served as Leader of Systems Architect/Systems Engineers in a number of verticals, including healthcare, retail, financial, education and public sector over the last 25 years at Cisco Systems, Inc until his retirement in December 2021. Prior to that, Mr. Aued held pre-sales technology leadership positions with a number of companies including Micom, Unisys and BayNetworks.
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Other Current and Past Directorships:None.
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Director Qualifications: Our Board of Directors believes that Mr. Aued possesses specific attributes that qualify him to serve as a director, including his experience in leadership roles at a large corporation and expertise in the areas of technology and sales.
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KEVIN COMOLLI
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Age: 64
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Position, Principal Occupation and Professional Experience:
Partner, Accel. Mr. Comolli has served as a director of the Company since 2004. Mr. Comolli has been a partner at Accel, a global venture capital and growth equity firm, since 2000.
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Other Current and Past Directorships: Mr. Comolli has experience serving as a director of more than ten private software companies.
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Director Qualifications:Our Board of Directors believes that Mr. Comolli possesses specific attributes that qualify him to serve as a director, including his experience in the software and technology industry as an investment professional, his experience as a senior leader involved with global emerging software, technology and cloud computing companies, and as a member of the boards of other companies in the industry.
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JOHN J. GAVIN, JR.
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Age: 68
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Position, Principal Occupation and Professional Experience:
Director, Varonis Systems, Inc. Mr. Gavin has served as a director of the Company since 2013. Mr. Gavin is an industry veteran with more than 40 years of financial and operational management experience. He most recently served as the Executive Vice President and Chief Financial Officer for BladeLogic, a leading data center automation software provider, from 2007 to 2008. Prior to joining BladeLogic, Mr. Gavin served as the Chief Financial Officer for several companies, including Data General Corporation, Cambridge Technology Partners (CTP) and NaviSite, Inc. Mr. Gavin also worked in various positions in the audit practice of Price Waterhouse from 1978 to 1988.
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Other Current and Past Directorships: Mr. Gavin served as a director of Cimpress plc (Nasdaq: CMPR) from 2006 to 2021. Mr. Gavin also served as a director of BroadSoft, Inc. from 2010 to 2018, Qlik Technologies Inc. from 2010 to 2016, and Ascential Software from 2001 to 2004.
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Director Qualifications: Our Board of Directors believes that Mr. Gavin possesses specific attributes that qualify him to serve as a director, including his experience as a chief financial officer of multiple public companies, as a member of the board, audit, compensation and nominating & governance committees of other publicly traded companies in the software and technology industry, and for his financial, risk oversight and compliance expertise and his expertise with international direct sales organizations in the software industry.
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FRED VAN DEN BOSCH
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Age: 77
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Position, Principal Occupation and Professional Experience:
Director, Varonis Systems, Inc. Mr. van den Bosch has served a director of the Company since 2013. He has been a business consultant and private investor since 2015. Mr. van den Bosch has been involved in the architecture and design of hardware and software systems for multiple technology companies. His background spans many technical disciplines including operating systems, storage management, high performance computing, enterprise software-as-a-service, application performance monitoring, and software engineering. Previously, he served as Chief Executive Officer of Librato, Inc. Before that, he served as Chief Executive Officer of PANTA Systems, Inc., as Executive Vice President Engineering and Chief Technology Officer at VERITAS Software, Inc., and in various engineering and management positions at the Computer Systems Division of Philips Electronics. Mr. van den Bosch also serves as an advisor to Tabnine Ltd., OSNexus, Inc., and Thehintbox!, Inc.
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Other Current and Past Directorships: Mr. van den Bosch serves as a director of Chunk Food Inc., MounTavor Inc., Kaholo Ltd., Today Boost Ltd. and Trailze Ltd., all of which are private companies. Mr. van den Bosch previously served as a director of VERITAS Software, Inc., Librato Inc., Neebula Systems Ltd., and numerous other private companies.
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Director Qualifications:Our Board of Directors believes that Mr. van den Bosch possesses specific attributes that qualify him to serve as a director, including his many years of operational experience from holding various executive positions at software and technology companies, including chief executive officer and chief technology officer, and his patent and licensing expertise.
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YAKOV FAITELSON
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Age: 48
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Position, Principal Occupation and Professional Experience:
Chief Executive Officer, President, Co-founder and Chairman, Varonis Systems, Inc. Mr. Faitelson is our co-founder and has served as our Chief Executive Officer, President and Chairman of the Board of Directors since 2004. Together with Mr. Korkus, Mr. Faitelson conceived and developed the MetaData Framework technology that now serves as the foundation for the Varonis Data Security Platform. With extensive cross-functional experience in storage, networking, operating systems and application software, Mr. Faitelson leads the management, strategic direction and execution of the Company's vision. Prior to becoming our Chief Executive Officer, President and Chairman, Mr. Faitelson held leadership positions in the global professional services and systems integration divisions of NetVision, Inc. and NetApp, Inc.
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Other Current and Past Directorships: None.
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Director Qualifications: Our Board of Directors believes that Mr. Faitelson possesses specific attributes that qualify him to serve as a director, including his long history as our co-founder and Chief Executive Officer and the associated knowledge and perspective he brings, his deep understanding of the software and technology industry, and his operational experience from holding various leadership positions at technology companies.
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THOMAS F. MENDOZA
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Age: 73
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Position, Principal Occupation and Professional Experience:
Director, Varonis Systems, Inc. Mr. Mendoza has served as a director since 2015. Mr. Mendoza was the Vice Chairman of NetApp, Inc., a storage and data management solutions provider, from March 2008 to August 2019, and was President of NetApp, Inc. from October 2000 to March 2008. Prior to 2000, he held a number of senior positions at NetApp, Inc., including Senior Vice President, Worldwide Sales and Marketing, Senior Vice President, Worldwide Sales, and Vice President, North American Sales.
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Other Current and Past Directorships: Mr. Mendoza previously served as a director of UiPath (NYSE: PATH) from 2017 to 2021 and ServiceSource International, Inc (Nasdaq: SREV) from 2011 to 2019, as well as a director of many private technology companies.
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Director Qualifications: Our Board of Directors believes that Mr. Mendoza possesses specific attributes that qualify him to serve as a director, including his operational experience from holding various leadership positions at multiple global companies, his sales and marketing experience in the software and technology industry, and his experience serving as a director on other public company boards.
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AVROHOM J. KESS
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Age: 55
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Position, Principal Occupation and Professional Experience:
Vice Chairman and Chief Legal Officer, The Travelers Companies, Inc.Mr. Kess has served as a director since January 2022. Mr. Kess has been Vice Chairman and Chief Legal Officer of The Travelers Companies, Inc. since December 2016. Prior to that, Mr. Kess was a partner, member of the Corporate Department and Head of the Public Company Advisory Practice at the law firm of Simpson Thacher & Bartlett LLP, which he joined in 1995.
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Other Current and Past Directorships: None.
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Director Qualifications: Our Board of Directors believes that Mr. Kess possesses specific attributes that qualify him to serve as a director, including his significant experience and expertise in the areas of law, risk management oversight, corporate transactional matters, executive compensation policies, practices and disclosures and corporate governance, including environmental, social and governance matters and disclosure.
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OHAD KORKUS
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Age: 45
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Position, Principal Occupation and Professional Experience:
Director and Co-founder, Varonis Systems, Inc. Mr. Korkus is our co-founder and has served as a director since 2007. He also served as the Company's Chief Technology Officer from 2007 until February 2018. Mr. Korkus has created several patents for permissions visualization, simulation and data analysis, and, together with Mr. Faitelson, conceived and developed the MetaData Framework technology that now serves as the foundation for the Varonis Data Security Platform. Prior to joining us, Mr. Korkus was responsible for architecture, design and development of solutions at NetVision, Inc. and NetApp, Inc.
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Other Current and Past Directorships: None.
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Director Qualifications: Our Board of Directors believes that Mr. Korkus possesses specific attributes that qualify him to serve as a director, including his long history as our co-founder and Chief Technology Officer at our Company and his significant experience across multiple technical disciplines, including engineering, storage, networking, operating systems and software development.
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Fiscal Year Ended
|
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2023
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2022
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(in thousands)
|
|||||
Audit Fees(1)
|
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$795
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$870
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Audit-Related Fees(2)
|
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21
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| |
28
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Tax Fees(3)
|
| |
252
|
| |
177
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All Other Fees(4)
|
| |
51
|
| |
-
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Total Fees
|
| |
$1,119
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| |
$1,075
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(1)
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Audit fees relate to professional services rendered for the audits of our annual consolidated financial statements and the reviews of our quarterly consolidated financial statements.
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(2)
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Audit-related fees relate to professional services rendered in connection with assurance and related services that are reasonably related to the performance of the audit or review of our consolidated financial statements and are not reported under "Audit Fees."
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(3)
|
Tax fees consist of professional services for tax compliance, tax advice and tax planning.
|
(4)
|
All other fees consist of professional services for other advisory services.
|
11
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12
|
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•
|
Minimum vesting period of one year, except under certain limited circumstances and with permitted exceptions up to 5% of the share reserve.
|
•
|
Dividends and dividend equivalent rights, if any, on all awards will be subject to the same vesting requirements as the underlying award and will only be paid at the time those vesting requirements are satisfied.
|
•
|
No "liberal share recycling" of shares withheld upon exercise of stock options.
|
•
|
No dividends or dividend equivalents on options or stock appreciation rights.
|
•
|
Minimum 100% fair market value exercise price as of the date of grant for options and stock appreciation rights.
|
•
|
No "liberal" change in control definition.
|
•
|
No repricing of options or stock appreciation rights and no cash buyout of underwater options or stock appreciation rights without shareholder approval, except for certain equitable adjustments in connection with certain corporate transactions.
|
•
|
No excise tax gross-ups.
|
•
|
No "reloads" of options or stock appreciation rights.
|
13
|
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14
|
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15
|
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16
|
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| |
Year Ended December 31,
|
| |
3-Year
Average
|
|||||||
| |
2023
|
| |
2022
|
| |
2021
|
| |||
Stock options granted (a)
|
| |
0
|
| |
0
|
| |
0
|
| | |
Full Value Shares granted (b)
|
| |
3,832,156
|
| |
4,789,227
|
| |
3,542,175
|
| | |
Total equity awards (a+b)
|
| |
3,832,156
|
| |
4,789,227
|
| |
3,542,175
|
| | |
Weighted average shares of Common Stock outstanding (c)
|
| |
109,141,894
|
| |
109,281,368
|
| |
105,305,957
|
| | |
Burn rate ((a+b)/c)
|
| |
3.51%
|
| |
4.38%
|
| |
3.36%
|
| |
3.75%
|
Additional shares requested for approval under the Restated 2023 Plan
|
| |
4,400,000
|
Shares available for issuance of future awards under the existing 2023 Plan
|
| |
2,396,671*
|
Shares subject to outstanding stock options under the 2013 Plan and 2019 Polyrize Plan
|
| |
497,817
|
Weighted-average exercise price of outstanding stock options
|
| |
$7.51
|
Weighted-average remaining term of outstanding stock options
|
| |
0.72 Years
|
Shares subject to outstanding full-value stock awards under the 2013 Plan and 2023 Plan
|
| |
8,485,397
|
*
|
The share reserve under the Restated 2023 Plan will be reduced by one share for every one share underlying awards granted under the 2023 Plan after April 3, 2024 and prior to the Effective Date.
|
17
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Name
|
| |
Stock
Options
|
| |
RSUs
|
| |
PSUs
|
Named Executive Officers
|
| | | | | | |||
Yakov Faitelson
|
| |
-
|
| |
134,159
|
| |
402,477
|
Guy Melamed
|
| |
-
|
| |
58,605
|
| |
175,815
|
David Bass
|
| |
-
|
| |
75,478
|
| |
144,177
|
James O'Boyle
|
| |
-
|
| |
38,236
|
| |
114,708
|
Dov Gottlieb
|
| |
-
|
| |
30,960
|
| |
30,960
|
Director Nominees
|
| | | | | | |||
Thomas Mendoza
|
| |
-
|
| |
-
|
| |
-
|
Avrohom Kess
|
| |
-
|
| |
-
|
| |
-
|
Ohad Korkus
|
| |
-
|
| |
-
|
| |
-
|
Gili Iohan
|
| |
-
|
| |
-
|
| |
-
|
Ofer Segev
|
| |
-
|
| |
-
|
| |
-
|
Rachel Prishkolnik
|
| |
-
|
| |
-
|
| |
-
|
Carlos Aued
|
| |
-
|
| |
-
|
| |
-
|
John Gavin, Jr.
|
| |
-
|
| |
-
|
| |
-
|
Fred Van Den Bosch
|
| |
-
|
| |
-
|
| |
-
|
All Current Executive Officers as a Group
|
| |
-
|
| |
337,438
|
| |
868,137
|
All Current Non-Executive Officer Directors as a Group
|
| |
-
|
| |
-
|
| |
-
|
Other Persons
|
| | | | | | |||
Each associate of the current executive officers, non-executive officer directors and director nominees
|
| |
-
|
| |
-
|
| |
-
|
Each other person who received or is to receive 5% of awards under the 2023 Plan
|
| |
-
|
| |
-
|
| |
-
|
All Non-Executive Officer Employees as a Group
|
| |
-
|
| |
1,633,485
|
| |
691,760
|
18
|
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INFORMATION REGARDING THE BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
|
Independent Lead Director
|
| |
The Board of Directors has an independent lead director (the "Lead Director"), because the Chairman of the Board of Directors is a non-independent member.
|
Committee Independence
|
| |
Our Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee are all composed of independent directors.
|
Risk Oversight
|
| |
The Board of Directors and its committees regularly oversees risks related to Company strategy, including risks associated with cyber-attacks and data breaches.
|
Executive Sessions
|
| |
Independent members of the Board of Directors and its committees have the opportunity to meet periodically in executive sessions with no members of management present, following meetings of the Board of Directors or its committees, as applicable.
|
Board of Directors Attendance
|
| |
All directors attended at least 75% of meetings of the Board of Directors and any committees on which they served in fiscal year 2023.
|
Diversity
|
| |
The composition of the Board of Directors encompasses a broad range of skills, expertise, industry knowledge and diversity. Approximately 55% of our directors are gender and/or ethnically diverse and include two women, one person of Latin American descent, and four people of Middle Eastern descent.
|
Board Tenure
|
| |
The Board of Directors' balanced approach to refreshment results in an appropriate mix of newer directors and directors with experience with our Company. More than 25% of the Company's directors have joined the Board since the beginning of 2021, and 60% of the Company's independent directors have served nine years or fewer.
|
Board of Directors and Committee Self-Evaluations
|
| |
Each of the Board of Directors and its committees evaluates and discusses its respective performance and effectiveness annually.
|
Compensation risk mitigation measures
|
| |
We maintain robust stock ownership guidelines, as well as a claw-back policy, and prohibit, without exception, hedging and pledging of our common stock by our employees, officers and directors.
|
19
|
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Yakov Faitelson
Chief Executive Officer,
President and Chairman
|
| |
Our CEO and Chairman positions are currently held by Yakov Faitelson. Our Board of Directors has determined that its current leadership structure is appropriate as our CEO, President and Chairman has extensive knowledge of all aspects of the Company, our business and risks and our customers. This experience allows the Board of Directors to understand the Company better and work closely with management to enhance shareholder value. In addition, the Board of Directors believes that this structure helps it fulfill more effectively its risk oversight responsibilities, and enhances the ability of the Chairman, President and CEO to communicate effectively the Board of Directors' view to management.
|
|||
John J. Gavin, Jr.
Lead Director
|
| |
Mr. Gavin is currently serving as our Lead Director. The position of Lead Director is to be held by one of our independent directors and has responsibilities beyond those of the other directors, which may include but are not limited to the following areas:
|
|||
| |
•
|
| |
Board leadership:organizing and chairing executive sessions of independent directors, and convening and chairing other meetings of independent directors as deemed necessary;
|
|
| |
•
|
| |
Chairman-independent director liaison:acting as a liaison between the President and Chairman and the Board of Directors;
|
|
| |
•
|
| |
Chief Executive Officer succession planning:leading a discussion of succession planning with the CEO and the chairperson of our Nominating and Corporate Governance Committee. Additionally, serving as temporary Chairman of the Board of Directors in the event that the Chairman of the Board of Directors is unable to fulfill his or her role due to a crisis or other event making leadership by current management inappropriate or ineffective;
|
|
| |
•
|
| |
Shareholder communications:making himself/herself available for direct communication with major shareholders; and
|
|
| |
•
|
| |
Board information and agendas:collaborating with the CEO on Board of Directors meeting agendas, approving these agendas and information sent to the Board of Directors and approving meeting schedules to ensure sufficient time for discussion of all agenda items.
|
|
| |
The Lead Director serves for a renewable one-year term.
|
20
|
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✔
|
| |
Demonstrated integrity and achievement
|
All directors or candidates for directorship should possess the highest personal and professional ethics, mature judgment, integrity and the ability to collaborate effectively with the other directors. They are also expected to have demonstrated professional achievement and leadership capabilities.
|
✔
|
| |
Time and availability
|
All directors or candidates for directorship must evidence a commitment to devote the substantial time and energy required of productive board members. For more information, see "Expectations for Directors and Meetings of the Board of Directors."
|
✔
|
| |
Diversity and effective mix of tenures
|
Our Board of Directors and Nominating and Corporate Governance Committee consider it a top priority to maintain a Board of Directors composed of directors who have different tenures with the Company, and bring diverse viewpoints and perspectives, which may come in the form of diverse skills, professional experiences, ages or backgrounds.
|
✔
|
| |
Qualifications
|
Our Board of Directors and Nominating and Corporate Governance Committee seek candidates with a broad diversity of knowledge, experience and demonstrated expertise in an area or areas of importance to our Company. For more information, see "Board Skills and Experience" above and "Board Diversity" below.
|
21
|
TABLE OF CONTENTS
Topic
|
| |
Company's Expectation
|
| |
2023 Result
|
|||
Service on other public company boards
|
| |
➢
|
| |
The Company values the experience that directors bring from other boards but recognizes that the boards may present demands on a director's time and availability.
|
| |
None of our directors, other than Ms. Iohan and Mr. Segev, currently serves on another public company board.
|
|
➢
|
| |
Directors are expected not to serve simultaneously on an excessive number of outside public company boards.
|
| ||||
Attendance at annual meetings of shareholders
|
| |
➢
|
| |
To the extent reasonably practicable, directors should attend our annual meetings of shareholders.
|
| |
Ten of our directors who were serving on our Board of Directors at the time of our 2023 Annual Meeting of Shareholders attended that meeting.
|
Attendance at Board of Directors and committee meetings
|
| |
➢
|
| |
The Board of Directors expects that directors will dedicate sufficient time and attention to ensure diligent performance of their duties and will interact with each other in real-time to encourage open and inspired discussion.
|
| |
Each of our directors attended 75% or more of the aggregate number of meetings of the Board of Directors and of the committees on which he or she served, held during the portion of the year for which he or she was a Board of Directors or committee member.
|
22
|
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AUDIT COMMITTEE
|
||||||
Members:
|
| |
John J. Gavin, Jr., Ofer Segev and Fred van den Bosch
|
|||
Chairperson:
|
| |
John J. Gavin, Jr.
|
|||
Independence:
|
| |
The Board of Directors has determined that each member of the Audit Committee qualifies as independent pursuant to applicable SEC and Nasdaq rules.
|
|||
Financial Expert:
|
| |
The Board of Directors has determined that all members of the Audit Committee meet the financial literacy requirements of the Nasdaq, and that Mr. Gavin and Mr. Segev qualify as "audit committee financial experts" as defined in SEC rules.
|
|||
Meetings held in fiscal 2023:
|
| |
5
|
|||
Responsibilities:
|
| |
•
|
| |
appointing, compensating and overseeing the work of our independent auditors;
|
|
•
|
| |
approving engagements of the independent registered public accounting firm to render any audit or permissible non-audit services;
|
||
|
•
|
| |
reviewing the qualifications, performance and independence of the independent registered public accounting firm;
|
||
|
•
|
| |
reviewing our financial statements and related disclosures and reviewing the adequacy and effectiveness of the accounting and financial controls;
|
||
|
•
|
| |
reviewing the adequacy and effectiveness of our internal controls over financial reporting;
|
||
|
•
|
| |
reviewing the procedures established for the receipt, retention and treatment of accounting and auditing related complaints and concerns;
|
||
|
•
|
| |
setting the internal audit work plan and providing oversight of the internal audit team;
|
||
|
•
|
| |
preparing the Audit Committee report required by SEC rules to be included in our annual proxy statement;
|
||
|
•
|
| |
reviewing and discussing with management and the independent registered public accounting firm the results of our annual audit, our quarterly financial statements and our publicly filed reports; and
|
||
|
•
|
| |
reviewing and approving investment and hedging policies.
|
COMPENSATION COMMITTEE
|
||||||
Members:
|
| |
Kevin Comolli, Gili Iohan, Avrohom J. Kess and Rachel Prishkolnik
|
|||
Chairperson:
|
| |
Avrohom J. Kess
|
|||
Independence:
|
| |
The Board of Directors has determined that each member of the Compensation Committee qualifies as independent pursuant to SEC and Nasdaq rules, and as a "non-employee" director for purposes of Rule 16b-3 under Section 16 of the Exchange Act.
|
|||
Meetings held in fiscal 2023:
|
| |
5
|
|||
Responsibilities:
|
| |
•
|
| |
reviewing and recommending policies, plans and programs relating to compensation and benefits of our directors, officers and employees;
|
|
•
|
| |
reviewing and amending or recommending the goals and objectives of our executive compensation plans and general compensation policies, plans, programs and other employee benefit plans;
|
||
|
•
|
| |
evaluating the performance of our CEO and other executive officers in light of established goals and objectives, and, based on these evaluations, making recommendations to the Board of Directors with respect to the CEO's compensation level and approving the compensation of other executive officers;
|
||
|
•
|
| |
evaluating the appropriate level of compensation for Board of Directors and Committee service by non-employee directors;
|
||
|
•
|
| |
preparing the Compensation Committee report required by SEC rules to be included in our annual proxy statement;
|
||
|
•
|
| |
reviewing compensation arrangements for our Executive employees and evaluating the relationship between risk management policies and practices, corporate strategy and our compensation arrangements; and
|
||
|
•
|
| |
reviewing and approving the equity compensation plans for our employees and directors.
|
23
|
TABLE OF CONTENTS
NOMINATING AND CORPORATE GOVERNANCE COMMITTEE
|
||||||
Members:
|
| |
Kevin Comolli, John J. Gavin, Jr. and Gili Iohan
|
|||
Chairperson:
|
| |
Gili Iohan
|
|||
Independence:
|
| |
The Board of Directors has determined that each of the member of the Nominating and Corporate Governance Committee is an independent director under the Nasdaq rules.
|
|||
Meetings held in fiscal 2023:
|
| |
3
|
|||
Responsibilities:
|
| |
•
|
| |
evaluating and making recommendations regarding the organization and governance of the Board of Directors and its committees;
|
|
•
|
| |
assessing the performance of Board of Directors and committee members and making recommendations regarding committee and chairperson assignments and composition and the size of the Board of Directors and its committees;
|
||
|
•
|
| |
recommending desired qualifications for Board of Directors and committee membership and conducting searches for potential members of the Board of Directors by independently searching for, identifying, recruiting and, if appropriate, interviewing candidates, as well as reviewing their background and qualifications, including experience, skills, expertise, diversity, personal and professional integrity, character, business judgment, time availability in light of other commitments, dedication, conflicts of interest and such other relevant factors that the Nominating and Corporate Governance Committee considers appropriate;
|
||
|
•
|
| |
evaluating and making recommendations regarding the creation of additional committees or the change in mandate or elimination of committees;
|
||
|
•
|
| |
developing and recommending a set of corporate governance principles and reviewing their compliance with laws and regulations;
|
||
|
•
|
| |
reviewing and recommending to the Board of Directors the director nominees for election by the shareholders or appointment by the Board of Directors; reviewing and approving conflicts of interest of our directors and corporate officers, other than related person transactions reviewed by the Audit Committee; and
|
||
|
•
|
| |
monitoring developments related to corporate social responsibility; including environmental, social and governance matters.
|
TECHNOLOGY COMMITTEE
|
||||||
Members:
|
| |
Yakov Faitelson, Kevin Comolli, John J. Gavin, Jr., Ohad Korkus and Fred van den Bosch
|
|||
Chairperson:
|
| |
Ohad Korkus
|
|||
Independence:
|
| |
The Board of Directors has determined that each member of the Technology Committee, other than the CEO, is an independent director under the Nasdaq rules.
|
|||
Meetings held in fiscal 2023:
|
| |
5
|
|||
Responsibilities:
|
| |
•
|
| |
providing guidance and oversight regarding the Company's technology strategy, including with respect to future trends in technology that may affect the Company's strategic plans, including monitoring of overall industry trends;
|
|
•
|
| |
providing guidance and oversight regarding the Company's technology risk management as related to technology, cybersecurity, data security, disaster recovery and business continuity for the Company's major technology systems and intellectual property protection;
|
||
|
•
|
| |
making recommendations to the Board with respect to decisions on investment in technology projects, discussing, reviewing and approving the research and development roadmap and overseeing its execution and discussing and reviewing the annual plan and budget for investments in technology, which is ultimately approved by the Board on the basis of recommendations by the Committee;
|
||
|
•
|
| |
discussing, reviewing and approving technology-related policies; and
|
||
|
•
|
| |
examining staffing needs and review plans as presented by the Company's management and recommending an execution path.
|
24
|
TABLE OF CONTENTS
➢
|
The implementation of stock ownership guidelines;
|
➢
|
The implementation of a claw-back policy;
|
➢
|
In 2021 and 2022, made changes to the Annual Cash Incentive Compensation program and the Long-Term Equity Incentive program for our NEOs, as described below; and
|
➢
|
In 2024, we provided all our executive officers with PSUs with a 3-year target to align management's incentives with those of shareholders with respect to the pace of the SaaS transition's completion.
|
➢
|
Implementation of anti-hedging and anti-pledging policy for all directors and employees;
|
➢
|
Improved proxy disclosure related to:
|
•
|
board tenure, refreshment and diversity;
|
•
|
board experiences and skill sets;
|
•
|
board leadership;
|
•
|
corporate responsibility; and
|
•
|
disclosures related to bonus structure and targets; and
|
➢
|
Added additional diverse directors to our Board.
|
Committee
|
| |
Primary Areas of Risk Oversight
|
Audit Committee
|
| |
• Major financial risk exposures and management steps to monitor and control those exposures.
• Financial systems and legal and accounting compliance.
• Internal audit function, accounting and financial reporting process.
• Audit of Company's financial statements.
• Legal and regulatory exposures.
|
Compensation Committee
|
| |
• Potential for compensation policies and programs to encourage unnecessary or excessive risk-taking.
• Relationship between risk management policies, corporate strategy and compensation arrangements.
• Link between pay and performance, as well as pay and retention of top talent.
|
Nominating and Corporate Governance Committee
|
| |
• Corporate governance policies and nominees for election to the Board of Directors and its committees.
• Corporate governance guidelines, including their success in preventing illegal or improper liability-creating
conduct.
• Environmental, social and governance matters and initiatives.
|
25
|
TABLE OF CONTENTS
Committee
|
| |
Primary Areas of Risk Oversight
|
Technology Committee
|
| |
• The Company's technology strategy.
• The Company's technology risk management as related to technology, cybersecurity, data security, disaster
recovery and business continuity.
• Investment in technology projects.
• Technology-related policies.
|
✔
|
Claw-back Policy: We maintain a claw-back policy as required by the rules of Nasdaq. Our claw-back policy covers each of our current and former executive officers. The policy provides that, subject to the limited exemptions provided by the Nasdaq rules, if the Company is required to restate its financial results due to material noncompliance with financial reporting requirements under the securities laws, the Compensation Committee must reasonably promptly seek recovery of any cash- or equity-based incentive compensation (including vested and unvested equity) paid or awarded to the executive officer, to the extent that the compensation (i) was based on erroneous financial data and (ii) exceeded what would have been paid to the executive officer under the restatement. Recovery applies to any such excess cash- or equity-based bonus/other incentive compensation received by any covered executive officer, while he/she was an executive officer, on or after October 2, 2023 during the three completed fiscal years immediately preceding the date on which the Company determines an accounting statement is required. For more information, see the full text of our claw-back policy, which is filed as Exhibit 97 to our Annual Report on Form 10-K for the year-ended December 31, 2023.
|
✔
|
Anti-Hedging and Anti-Pledging Policies: Our insider trading policy prohibits, without exception, our executive officers, employees and directors from engaging in speculative transactions designed to decrease the risks of holding Company securities, such as short sales of Company securities and transactions in puts, calls, publicly traded options and other derivative securities with respect to Company securities. The policy also
|
26
|
TABLE OF CONTENTS
✔
|
Executive and Director Stock Ownership Guidelines and Retention Requirements: Our stock ownership guidelines further align the interests of our executive officers and directors with those of our shareholders. The guidelines require our executive officers and directors to hold common stock (including stock underlying unvested time-vesting restricted stock units ("RSUs") and common stock held in trust or by certain family members, but excluding vested options and unvested or unearned performance-vesting restricted stock units ("PSUs")), with a value expressed as a multiple of the individual's annual salary or cash retainer, as applicable.
|
Role
|
| |
Stock Ownership Guideline
(Multiple of Annual Salary/Cash Retainer)
|
| |
Compliance(1)
|
Chief Executive Officer, President and Chairman
|
| |
6.0
|
| |
✔
|
Chief Financial Officer and Chief Operating Officer
|
| |
4.0
|
| |
✔
|
Other Executive Officers
|
| |
3.0
|
| |
✔
|
Non-Employee Directors
|
| |
5.0
|
| |
✔
|
(1)
|
Based on salary and fair market value of counted equity as of December 31, 2023. As of the date of this filing, all executive officers and directors continue to be compliant with the above stock ownership guidelines.
|
✔
|
Equity Grant Timing Practices: The Compensation Committee typically makes annual awards of equity to executive officers at its meeting held in February, which is set in advance as part of the Board's annual calendar of scheduled meetings. These grants are made after results for the preceding fiscal year become available and after review and evaluation of each executive officer's performance, enabling the Compensation Committee to consider both the prior year's performance and expectations for the succeeding year in making grant decisions. The grants occur on pre-established dates pursuant to our equity grant practice, on the second business day after the public release of our fiscal year-end earnings, and the number of shares underlying each such grant is determined by dividing the dollar amount of the grant by the closing market price of our stock on such grant date. However, the Compensation Committee has in the past, and may in the future, make limited grants of equity on other dates in order to retain key employees, to compensate an employee in connection with a promotion or to compensate newly hired executives for equity or other benefits lost upon termination of their previous employment or otherwise to induce them to join our Company. Annual awards for non-employee directors are made at a Compensation Committee meeting held after the end of the first fiscal quarter, and initial awards are granted on the date the new director is appointed or elected to the Board of Directors. We monitor and periodically review our equity grant policies to ensure compliance with plan rules and applicable laws.
|
27
|
TABLE OF CONTENTS
CORPORATE RESPONSIBILITY
|
28
|
TABLE OF CONTENTS
29
|
TABLE OF CONTENTS
EXECUTIVE OFFICERS
|
GUY MELAMED
|
| |
Age:44
|
Position, Principal Occupation and Professional Experience:
Chief Financial Officer and Chief Operating Officer.Mr. Melamed has served as our Chief Financial Officer since April 2017 and also as our Chief Operating Officer since February 2018. He is responsible for global operations, executing business strategies and financial management, including legal, treasury, investor relations and purchasing. Prior to becoming Chief Financial Officer, Mr. Melamed served in various finance roles within the Company since 2011, most recently as Vice President of Finance, during which time he was responsible for financial planning, reporting and operations and was instrumental in building and managing the global finance organization. Prior to joining Varonis, he held positions at E&Y as an Audit Manager and at KPMG, working with both foreign and domestic public and private companies. Mr. Melamed holds both a B.A and M.S.A from Boston College and is a Certified Public Accountant in the U.S. and Israel.
|
DAVID BASS
|
| |
Age: 46
|
Position, Principal Occupation and Professional Experience:
Executive Vice President of Engineering and Chief Technology Officer.Mr. Bass has served as our Executive Vice President of Engineering and Chief Technology Officer since March 2018 and is responsible for all of Varonis' product development and quality assurance. Mr. Bass has been an employee of the Company since 2005 and served as its Senior Vice President of Engineering from May 2014 through February 2018. Under his leadership, the Company has assembled an engineering organization with deep experience spanning digital collaboration, storage, networking and security. Prior to Varonis, Mr. Bass held managerial development positions at NetVision Internet Applications and as an independent contractor.
|
JAMES O'BOYLE
|
| |
Age:59
|
Position, Principal Occupation and Professional Experience:
Vice Chairman - Sales. Mr. O'Boyle has served as our Vice Chairman - Sales since 2024 and previously as our Senior Vice President of Worldwide Sales since 2006. He is responsible for developing and growing the Company's business through high performance sales teams and strategic channel partnerships in worldwide markets. Prior to joining Varonis, Mr. O'Boyle held leadership roles at Neoteris/Netscreen (acquired by Juniper), BlueCoat Systems, Inc. and Wellfleet/Bay Networks (acquired by Nortel). He holds a Bachelor of Science degree in computer science from the University of Scranton.
|
DOV GOTTLIEB
|
| |
Age:48
|
Position, Principal Occupation and Professional Experience:
Vice President, General Counsel and Corporate Secretary.Mr. Gottlieb has served as our Vice President, General Counsel and Corporate Secretary since April 2021 and is responsible for all legal matters at the Company. He joined Varonis from the law firm White & Case LLP, where he was a Partner, a member of the Corporate Department and established the Public Company Advisory Group. He also served as Varonis' lead outside counsel, advising the Company on a wide range of general corporate, transactional, securities laws and governance matters. He is a frequent speaker and an author on corporate governance topics. Mr. Gottlieb received his bachelor's degree in accounting from Yeshiva University and his J.D. from University of Pennsylvania.
|
30
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TABLE OF CONTENTS
AUDIT COMMITTEE REPORT
|
•
|
reviewed and discussed the audited financial statements and earning releases with management and E&Y;
|
•
|
discussed with E&Y the matters required to be communicated by the Public Company Accounting Oversight Board;
|
•
|
received periodic updates from management and E&Y at scheduled Audit Committee meetings regarding the testing and evaluation of the Company's internal controls over financial reporting and material risks to the Company's business;
|
•
|
received updates from management and internal audit at scheduled Audit Committee meetings regarding enterprise risks and remediation activities;
|
•
|
discussed with E&Y the overall scope, plan and budget for the audit and the results of the audit, and discussed with management and E&Y the adequacy and effectiveness of the internal controls and the overall quality of the Company's financial reporting;
|
•
|
received the written disclosures and the letter from E&Y required by applicable requirements of the Public Company Accounting Oversight Board regarding E&Y's communications with the Audit Committee concerning independence and has discussed with E&Y its independence;
|
•
|
received reports about the receipt, retention, and treatment of compliance concerns; and
|
•
|
reviewed with the General Counsel legal and compliance matters.
|
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TABLE OF CONTENTS
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
|
•
|
each person, or group of affiliated persons, known by us to beneficially own more than 5% of our common stock;
|
•
|
each of our named executive officers;
|
•
|
each of our directors or director nominees; and
|
•
|
all of our current executive officers and directors as a group.
|
Name of Beneficial Owner
|
| |
Shares Outstanding
Beneficially Owned
|
| |
Shares Subject to
Right to Acquire
Within 60 Days(1)
|
| |
Total Number of
Shares Beneficially Owned
|
| |
% of Total
Outstanding Shares
Beneficially Owned
|
Five-Percent-or-More Beneficial:
|
| | | | | | | | ||||
BlackRock, Inc.(2)
|
| |
11,149,383
|
| |
-
|
| |
11,149,383
|
| |
10.2%
|
The Vanguard Group(3)
|
| |
11,101,652
|
| |
-
|
| |
11,101,652
|
| |
10.2%
|
Named Executive Officers and Directors:
|
| | | | | | | | ||||
Yakov Faitelson(4)
|
| |
522,886
|
| |
420,000
|
| |
942,886
|
| |
*
|
Guy Melamed
|
| |
257,063
|
| |
-
|
| |
257,063
|
| |
*
|
David Bass
|
| |
338,118
|
| |
-
|
| |
338,118
|
| |
*
|
James O'Boyle(5)
|
| |
412,463
|
| |
-
|
| |
412,463
|
| |
*
|
Dov Gottlieb(6)
|
| |
13,575
|
| |
42,006
|
| |
55,581
|
| |
*
|
Carlos Aued(7)
|
| |
6,410
|
| |
8,272
|
| |
14,682
|
| |
*
|
Kevin Comolli(8)
|
| |
212,966
|
| |
8,272
|
| |
221,238
|
| |
*
|
John J. Gavin, Jr.(9)
|
| |
252,053
|
| |
8,272
|
| |
260,325
|
| |
*
|
Gili Iohan(10)
|
| |
10,991
|
| |
8,272
|
| |
19,263
|
| |
*
|
Avrohom J. Kess(11)
|
| |
14,990
|
| |
8,272
|
| |
23,262
|
| |
*
|
Ohad Korkus(12)
|
| |
103,310
|
| |
11,083
|
| |
114,393
|
| |
*
|
Thomas Mendoza(13)
|
| |
48,588
|
| |
8,272
|
| |
56,860
|
| |
*
|
Rachel Prishkolnik(14)
|
| |
9,101
|
| |
8,272
|
| |
17,373
|
| |
*
|
Ofer Segev(15)
|
| |
67,410
|
| |
8,272
|
| |
75,682
|
| |
*
|
Fred van den Bosch(16)
|
| |
121,053
|
| |
8,272
|
| |
129,325
|
| |
*
|
All executive officers and directors as a group (15 persons)
|
| |
2,390,977
|
| |
547,537
|
| |
2,938,514
|
| |
2.6%
|
*
|
Represents beneficial ownership of less than one percent (1%).
|
(1)
|
For directors and executive officers, shares are deemed to be beneficially owned due to the individual's right to acquire the shares upon the exercise of outstanding stock options or vesting of RSUs within 60 days from April 8, 2024 or upon termination of service other than for death, disability of involuntary termination.
|
(2)
|
Based solely on a Schedule 13G/A filed by BlackRock, Inc. on January 24, 2024. The address of BlackRock, Inc. is 50 Hudson Yards, New York, NY 10001. Represents 10,872,589 shares of common stock over which BlackRock, Inc. has sole voting power and 11,149,383 shares of common stock over which BlackRock, Inc. has sole dispositive power.
|
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TABLE OF CONTENTS
(3)
|
Based solely on a Schedule 13G/A filed by The Vanguard Group on February 13, 2024. The address of The Vanguard Group is 100 Vanguard Blvd., Malvern, PA 19355. Represents 201,451 shares of common stock over which The Vanguard Group has shared voting power, 10,783,170 shares of common stock over which The Vanguard Group has sole dispositive power and 318,482 shares of common stock over which The Vanguard Group has shared power to dispose.
|
(4)
|
Consists of (i) 264,561 shares owned directly by Mr. Faitelson; (ii) 4,941 shares owned by Mr. Faitelson's spouse, (iii) 253,384 shares owned in trust, and (iv) 420,000 shares subject to stock options exercisable within 60 days of April 8, 2024.
|
(5)
|
Consists of (i) 382,463 shares owned directly by Mr. O'Boyle; and (ii) 30,000 shares owned by the Jim O'Boyle 2014 Trust Family.
|
(6)
|
Consists of (i) 13,575 shares owned directly by Mr. Gottlieb and (ii) 42,006 shares subject to RSUs exercisable within 60 days of April 8, 2024.
|
(7)
|
Consists of (i) 6,410 shares owned directly by Mr. Aued; and (ii) 8,272 shares subject to RSUs exercisable within 60 days of April 8, 2024.
|
(8)
|
Consists of (i) 22,391 shares owned directly by Mr. Comolli; (ii) 190,575 shares owned by Kevin E Comolli Living Trust Ltd 3/28/18, of which Mr. Comolli is the beneficiary; and (iii) 8,272 shares subject to RSUs exercisable within 60 days of April 8, 2024.
|
(9)
|
Consists of (i) 2,554 shares owned directly by Mr. Gavin; (ii) 249,499 shares owned jointly with Mr. Gavin and spouse; and (iii) 8,272 shares subject to RSUs exercisable within 60 days of April 8, 2024.
|
(10)
|
Consists of (i) 10,991 shares owned directly by Ms. Iohan; and (ii) 8,272 shares subject to RSUs exercisable within 60 days of April 8, 2024.
|
(11)
|
Consists of (i) 14,990 shares owned directly by Mr. Kess; and (ii) 8,272 shares subject to RSUs exercisable within 60 days of April 8, 2024.
|
(12)
|
Consists of (i) 103,310 shares owned directly by Mr. Korkus; (ii) 2,811 shares subject to stock options exercisable within 60 days of April 8, 2024; and (iii) 8,272 shares subject to RSUs exercisable within 60 days of April 8, 2024.
|
(13)
|
Consists of (i) 48,537 shares owned directly by Mr. Mendoza; (ii) 51 shares owned by Mr. Mendoza as custodian for the benefit of Dylan M. O'Rand, Mr. Mendoza's nephew; and (iii) 8,272 shares subject to RSUs exercisable within 60 days of April 8, 2024.
|
(14)
|
Consists of (i) 9,101 shares owned directly by Ms. Prishkolnik; and (ii) 8,272 shares subject to RSUs exercisable within 60 days of April 8, 2024.
|
(15)
|
Consists of (i) 67,410 shares owned directly by Mr. Segev; and (ii) 8,272 shares subject to RSUs exercisable within 60 days of April 8, 2024.
|
(16)
|
Consists of (i) 121,053 shares owned directly by Mr. van den Bosch; and (ii) 8,272 shares subject to RSUs exercisable within 60 days of April 8, 2024.
|
33
|
TABLE OF CONTENTS
COMPENSATION DISCUSSION AND ANALYSIS
|
Named Executive Officer
|
| |
Title
|
Yakov Faitelson
|
| |
Chief Executive Officer, President and Chairman of the Board
|
Guy Melamed
|
| |
Chief Financial Officer and Chief Operating Officer
|
David Bass
|
| |
Executive Vice President of Engineering and Chief Technology Officer
|
James O'Boyle
|
| |
Vice Chairman - Sales
|
Dov Gottlieb
|
| |
Vice President, General Counsel and Corporate Secretary
|
34
|
TABLE OF CONTENTS
•
|
reviewing and approving or recommending to the Board of Directors to approve the compensation of our Chief Executive Officer;
|
•
|
reviewing and approving or recommending to the Board of Directors to approve the compensation of all executive officers and establishing annual and long-term performance goals for these individuals;
|
•
|
reviewing and approving or recommending to the Board of Directors to approve performance-based compensation of all executive officers, including incentive awards;
|
•
|
reviewing our director compensation program and recommending changes in director compensation to the Board of Directors, to the extent appropriate;
|
•
|
reviewing the existing incentive structure, taking into consideration investor feedback, business performance, and our strategic roadmap, in considering the efficacy of further enhancements; and
|
•
|
administering our equity compensation plans and programs.
|
✔
|
attract, motivate and retain highly skilled executives;
|
✔
|
incentivize management to optimize the Company's performance; and
|
✔
|
increase long-term shareholder value.
|
What we do
|
| |
What we don't do
|
✔ Pay a significant portion of executive compensation in the form
of long-term incentive-based awards
✔ Include PSUs as a material component of long-term incentive-
based awards
✔ Cap the maximum payout under our cash incentive plan and
PSUs
✔ Promote long-term focus through multi-year vesting
✔ Set challenging targets and performance metrics for our cash incentive plan and our performance-vesting long-term equity incentive awards to align the interests of management with the
Company's performance
✔ Maintain a formal claw-back policy for incentive based
compensation
✔ Subject executives and directors to robust stock ownership
guidelines
✔ Conduct an annual risk assessment of our compensation programs
✔ Engage an independent consultant to provide support and advice to the Compensation Committee
|
| |
✘ Create a compensation program that will encourage excessive risk-taking
✘ Use the same performance metrics for cash incentive plans and PSUs
✘ Allow our executive officers, directors or employees to hedge, short sell,
effect transactions in derivatives or pledge our stock
✘ Provide tax gross-ups in connection with severance, such as in a change in
control
✘ Re-price underwater stock options
✘ Pay guaranteed bonuses
✘ Pay dividends or dividend equivalents on unearned PSUs or unvested
RSUs
✘ Guarantee equity incentive awards for our named executive officers
✘ Provide excessive or unusual perquisites
|
35
|
TABLE OF CONTENTS
Alteryx, Inc.
|
| |
Everbridge
|
| |
PagerDuty Inc.
|
| |
Smartsheet Inc.
|
BlackLine, Inc.
|
| |
Five9, Inc.
|
| |
Q2 Holdings
|
| |
Tenable Holdings, Inc.
|
Coupa Software
|
| |
LiveRamp Holdings
|
| |
Qualys
|
| |
Upwork
|
Elastic N.V.
|
| |
Okta
|
| |
Rapid7
|
| |
Verint Systems
|
| | | | | |
Workiva
|
36
|
TABLE OF CONTENTS
Element
|
| |
Purpose
|
| |
Key Features
|
|||
Base Salary
|
| |
Provide competitive baseline compensation and a level of cash income predictability and stability.
|
| |
✔
|
| |
Fixed cash compensation.
|
|
✔
|
| |
Amounts informed by external competitive market levels, accounting for factors such as scope of the position, individual performance and corporate performance.
|
|||||
|
✔
|
| |
Target reasonably competitive range among our compensation peer group.
|
|||||
Annual Cash
Incentive
Award
|
| |
Reward the achievement of corporate performance during the year that drives the growth of the Company.
|
| |
✔
|
| |
Variable cash compensation governed by terms of plans.
|
|
✔
|
| |
Performance metrics under cash incentive plan for Messrs. Faitelson and Melamed are Annual Recurring Revenue ("ARR") and Trailing-Twelve-Month Margin ("TTM Margin").
|
|||||
|
✔
|
| |
Performance metric under sales compensation plan for Mr. O'Boyle is earned net revenues.
|
|||||
|
✔
|
| |
Target bonus opportunity informed by external competitive market data (to attain reasonably competitive range among compensation peer group).
|
|||||
|
✔
|
| |
Actual value based on Company financial performance.
|
|||||
Long-Term Equity Incentives
|
| |
Align with the long-term interests of Varonis, our shareholders and our executives, while rewarding long-term sustainable value creation and driving retention.
|
| |
✔
|
| |
Variable equity-based compensation governed by award agreements.
|
|
✔
|
| |
Size of awards informed by external competitive market data.
|
|||||
|
✔
|
| |
PSU metrics are based on challenging performance goals tied to SaaS mix and Free Cash Flow. Earned PSUs for our NEOs who receive PSUs (other than our CEO) will vest ratably over three years, assuming their continued employment with the Company. With respect to our CEO, there is no release of earned PSUs until the three-year time vesting period is completed and he must remain employed with the Company at such time.
|
|||||
|
✔
|
| |
Target PSU opportunity amount is informed by external competitive market data.
|
|||||
|
✔
|
| |
RSUs generally have four-year ratable vesting and drive our goal of retaining top-tier talent.
|
*
|
"Equity-based" compensation reflects grant date fair values of the RSUs and PSUs. "At risk" compensation includes non-equity incentive compensation and long-term equity awards.
|
37
|
TABLE OF CONTENTS
➢
|
In 2023, approximately 96% of our CEO's 2023 total target compensation and 90% of our non-CEO named executive officers' total target direct compensation, on average, was "at risk" and subject to future performance to have any realized value.
|
➢
|
In 2023, approximately 93% of our CEO's total target direct compensation and 87% of our non-CEO named executive officers' total target direct compensation, on average, consisted of equity compensation which underscores our use of executive pay as a way to align management's interests with those of the Company's shareholders.
|
➢
|
Base salary, the primary element of our "fixed" pay for all named executive officers, serves to attract and retain top executive talent, and the use of this pay element is consistent with competitive market practices.
|
Named Executive Officer
|
| |
Target Cash Incentive Award Amount
(% of salary)
|
Yakov Faitelson
|
| |
$440,000 (78.6%)
|
Guy Melamed
|
| |
$250,000 (62.5%)
|
38
|
TABLE OF CONTENTS
•
|
50% based on the quarterly achievement of Company ARR targets; and
|
•
|
50% based on the quarterly achievement of Company TTM Margin targets.
|
Period
|
| |
Corporate Performance Metric
|
|||||||||||||||
|
"Threshold" Payout
|
| |
"Target" Payout
|
| |
"Stretch" Payout
|
|||||||||||
($m)
|
| |
ARR
|
| |
TTM Margin
|
| |
ARR
|
| |
TTM Margin
|
| |
ARR
|
| |
TTM Margin
|
Q1 2023
|
| |
$474.000
|
| |
$20.313
|
| |
$474.900
|
| |
$21.213
|
| |
$475.800
|
| |
$22.113
|
Q2 2023
|
| |
$484.800
|
| |
$21.875
|
| |
$486.900
|
| |
$23.975
|
| |
$489.000
|
| |
$26.075
|
Q3 2023
|
| |
$498.600
|
| |
$24.610
|
| |
$501.800
|
| |
$27.810
|
| |
$505.000
|
| |
$31.010
|
Q4 2023
|
| |
$518.000
|
| |
$32.245
|
| |
$523.000
|
| |
$37.245
|
| |
$528.000
|
| |
$42.245
|
39
|
TABLE OF CONTENTS
| | | | ||||||||||||||||||||||
| | | | | | | | | |
ARR Metric
|
| ||||||||||||||
| |
Named
Executive
Officer
|
| |
Percentage of
Base Salary
Allocated to
Target Bonus
Opportunity
|
| |
Target Bonus
Opportunity
|
| |
Period
|
| |
Corporate
Performance
|
| |
Allocation Within
Executive's Bonus
|
| |||||||
|
Target
|
| |
Actual
|
| |
Weight
|
| |
Actual
Bonus
Payout
|
| ||||||||||||||
|
(in millions)
|
| |||||||||||||||||||||||
| |
Yakov
Faitelson
|
| |
78.6%
|
| |
$440,000
|
| |
Q1
|
| |
$474.9
|
| |
$478.1
|
| |
50%
|
| |
$264,000
|
| |
|
Q2
|
| |
$486.9
|
| |
$497.0
|
| |||||||||||||||||
|
Q3
|
| |
$501.8
|
| |
$517.5
|
| |||||||||||||||||
|
Q4
|
| |
$523.0
|
| |
$543.0
|
| |||||||||||||||||
| |
Guy
Melamed
|
| |
62.5%
|
| |
$250,000
|
| |
Q1
|
| |
$474.9
|
| |
$478.1
|
| |
50%
|
| |
$150,000
|
| |
|
Q2
|
| |
$486.9
|
| |
$497.0
|
| |||||||||||||||||
|
Q3
|
| |
$501.8
|
| |
$517.5
|
| |||||||||||||||||
|
Q4
|
| |
$523.0
|
| |
$543.0
|
| |||||||||||||||||
|
| | | | ||||||||||||||||||||||
| | | | | | | | | |
TTM Margin Metric
|
| ||||||||||||||
| |
Named
Executive
Officer
|
| |
Percentage of
Base Salary
Allocated to
Target Bonus
Opportunity
|
| |
Target Bonus
Opportunity
|
| |
Period
|
| |
Corporate
Performance
|
| |
Allocation Within
Executive's Bonus
|
| |||||||
|
Target
|
| |
Actual
|
| |
Weight
|
| |
Actual
Bonus
Payout
|
| ||||||||||||||
|
(in millions)
|
| |||||||||||||||||||||||
| |
Yakov
Faitelson
|
| |
78.6%
|
| |
$440,000
|
| |
Q1
|
| |
$21.2
|
| |
$26.5
|
| |
50%
|
| |
$264,000
|
| |
|
Q2
|
| |
$24.0
|
| |
$40.7
|
| |||||||||||||||||
|
Q3
|
| |
$27.8
|
| |
$57.3
|
| |||||||||||||||||
|
Q4
|
| |
$37.2
|
| |
$72.6
|
| |||||||||||||||||
| |
Guy
Melamed
|
| |
62.5%
|
| |
$250,000
|
| |
Q1
|
| |
$21.2
|
| |
$26.5
|
| |
50%
|
| |
$150,000
|
| |
|
Q2
|
| |
$24.0
|
| |
$40.7
|
| |||||||||||||||||
|
Q3
|
| |
$27.8
|
| |
$57.3
|
| |||||||||||||||||
|
Q4
|
| |
$37.2
|
| |
$72.6
|
| |||||||||||||||||
|
Named Executive Officer
|
| |
Target Commission Bonus Amount
(% of salary)
|
James O'Boyle
|
| |
$350,000 (100%)
|
40
|
TABLE OF CONTENTS
41
|
TABLE OF CONTENTS
Element
|
| |
Purpose
|
| |
Key Features
|
|||
Performance-vesting RSUs (PSUs)
|
| |
Incentivize continued focus on long-term performance.
|
| |
•
|
| |
PSUs for NEOs in 2023 are earned based on the achievement of two performance targets (the "PSU targets"), with 50% weighted to SaaS mix and 50% weighted to Free Cash Flow during fiscal year 2023.
|
|
•
|
| |
Subject to the achievement of the PSU targets, all earned PSUs by our CEO shall vest on February 28, 2026, subject to his continued employment with the Company.
|
|||||
| | |
•
|
| |
Subject to the achievement of the PSU targets, all earned PSUs by our NEOs other than the CEO are subject to three-year annual vesting, beginning on February 29, 2024.
|
|||
Time-vesting RSUs (RSUs)
|
| |
Promote retention of key talent in competitive industry.
|
| |
•
|
| |
Vest in four equal annual installments.
|
Named Executive Officer
|
| |
Number of 2023 PSUs Granted
|
Yakov Faitelson
|
| |
227,592
|
Guy Melamed
|
| |
85,410
|
David Bass
|
| |
64,021
|
James O'Boyle
|
| |
64,864
|
SaaS mix Target*
|
| |
2023 PSU Payout Opportunity
|
Less than 15%
|
| |
0% of PSUs will be earned
|
15%
|
| |
50% of PSUs will be earned
|
20%
|
| |
100% of PSUs will be earned
|
30%
|
| |
200% of PSUs will be earned
|
40%
|
| |
300% of PSUs will be earned
|
Free Cash Flow Target*
|
| |
2023 PSU Payout Opportunity
|
Less than $22.5 million
|
| |
0% of PSUs will be earned
|
$22.5 million
|
| |
50% of PSUs will be earned
|
$25.0 million
|
| |
100% of PSUs will be earned
|
$27.5 million
|
| |
200% of PSUs will be earned
|
$30.0 million and above
|
| |
300% of PSUs will be earned
|
*
|
For PSUs earned for actual results that are between thresholds, linear interpolation is used to determine the earned percentage.
|
42
|
TABLE OF CONTENTS
| | | | | | |||||||||||||||||||||||||||||
| | | | | |
SAAS Mix Metric
|
| |
Free Cash Flow Metric
|
| | | ||||||||||||||||||||||
| |
Named
Executive Officer
|
| |
2023
PSUs
Granted
|
| |
Weight
|
| |
Actual
|
| |
Payout
%
|
| |
Number of
PSUs Earned
|
| |
Weight
|
| |
Actual
|
| |
Payout
%
|
| |
Number of
PSUs Earned
|
| |
Total
PSUs
Earned
|
| |
| |
Yakov Faitelson
|
| |
227,592
|
| |
50%
|
| |
57%
|
| |
300%
|
| |
341,388
|
| |
50%
|
| |
$54.3
|
| |
300%
|
| |
341,388
|
| |
682,776
|
| |
| |
Guy Melamed
|
| |
85,410
|
| |
50%
|
| |
57%
|
| |
300%
|
| |
128,115
|
| |
50%
|
| |
$54.3
|
| |
300%
|
| |
128,115
|
| |
256,230
|
| |
| |
David Bass
|
| |
64,021
|
| |
50%
|
| |
57%
|
| |
300%
|
| |
96,031
|
| |
50%
|
| |
$54.3
|
| |
300%
|
| |
96,032
|
| |
192,063
|
| |
| |
James O'Boyle
|
| |
64,864
|
| |
50%
|
| |
57%
|
| |
300%
|
| |
97,296
|
| |
50%
|
| |
$54.3
|
| |
300%
|
| |
97,296
|
| |
194,592
|
| |
|
Named Executive Officer
|
| |
Number of RSUs
|
Yakov Faitelson
|
| |
227,592
|
Guy Melamed
|
| |
85,410
|
David Bass
|
| |
128,042
|
James O'Boyle
|
| |
64,864
|
Dov Gottlieb
|
| |
94,538
|
43
|
TABLE OF CONTENTS
44
|
TABLE OF CONTENTS
45
|
TABLE OF CONTENTS
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
|
46
|
TABLE OF CONTENTS
EXECUTIVE COMPENSATION
|
Name and Position(1)
|
| |
Year
|
| |
Salary
($)
|
| |
Bonus
($)
|
| |
Stock
Awards
($)(2)
|
| |
Non-Equity Incentive Plan Compensation ($)(3)
|
| |
All Other Compensation ($)
|
| |
Total
($)
|
Yakov Faitelson
|
| |
2023
|
| |
560,000
|
| |
-
|
| |
13,000,055
|
| |
528,000
|
| |
24,924(4)
|
| |
14,112,979
|
Chief Executive Officer and President
|
| |
2022
|
| |
560,000
|
| |
-
|
| |
8,787,553
|
| |
241,331
|
| |
29,471
|
| |
9,618,355
|
|
2021
|
| |
560,000
|
| |
-
|
| |
9,250,316
|
| |
528,000
|
| |
34,127
|
| |
10,372,443
|
||
| | | | | | | | | | | | | | ||||||||
Guy Melamed
|
| |
2023
|
| |
400,000
|
| |
-
|
| |
4,678,760
|
| |
300,000
|
| |
167,732(4)(5)
|
| |
5,546,492
|
Chief Financial Officer and Chief Operating Officer
|
| |
2022
|
| |
400,000
|
| |
-
|
| |
4,678,776
|
| |
137,120
|
| |
24,656
|
| |
5,240,552
|
|
2021
|
| |
400,000
|
| |
-
|
| |
4,925,114
|
| |
300,000
|
| |
19,776
|
| |
5,644,890
|
||
| | | | | | | | | | | | | | ||||||||
David Bass
|
|||||||||||||||||||||
Executive Vice President of Engineering and Chief Technology Officer
|
| |
2023
|
| |
334,684
|
| |
-
|
| |
5,485,319
|
| |
-
|
| |
54,053(5)
|
| |
5,874,056
|
|
2022
|
| |
367,357
|
| |
-
|
| |
5,485,358
|
| |
-
|
| |
58,491
|
| |
5,911,206
|
||
|
2021
|
| |
381,271
|
| |
-
|
| |
5,774,201
|
| |
-
|
| |
58,257
|
| |
6,213,729
|
||
| | | | | | | | | | | | | | ||||||||
James O'Boyle
|
| |
2023
|
| |
350,000
|
| |
-
|
| |
3,705,032
|
| |
280,897
|
| |
27,529(4)
|
| |
4,363,458
|
Vice Chairman - Sales
|
| |
2022
|
| |
350,000
|
| |
-
|
| |
3,705,037
|
| |
318,832
|
| |
26,053
|
| |
4,399,922
|
|
2021
|
| |
350,000
|
| |
-
|
| |
3,900,042
|
| |
304,082
|
| |
20,794
|
| |
4,574,918
|
||
| | | | | | | | | | | | | | ||||||||
Dov Gottlieb
|
| |
2023
|
| |
500,000
|
| |
200,000(6)
|
| |
2,700,005
|
| |
-
|
| |
13,200(4)
|
| |
3,413,205
|
Vice President, General Counsel and Corporate Secretary
|
| |
2022
|
| |
500,000
|
| |
150,000
|
| |
2,700,013
|
| |
-
|
| |
12,200
|
| |
3,362,213
|
(1)
|
Certain amounts payable to Israeli employees were paid in New Israeli Shekels. The exchange rate used for the purpose of the Summary Compensation Table as related to fiscal year 2023 is $1.00 = NIS 3.6805, which was the average exchange rate for fiscal 2023.
|
(2)
|
Represents the grant date fair value of each award computed in accordance with FASB ASC Topic 718 ("Topic 718"). For a summary of the assumptions made in the valuation of the awards, please see Note 2.k, "Accounting for Stock-Based Compensation," of the Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2023. The grant date value of the 2023 PSUs as reported assumed performance at the target payout level. Pursuant to SEC rules (which require us to report the maximum grant date fair value if not already represented in the Summary Compensation Table), the grant date fair value of the 2023 PSUs for our NEOs assuming performance at the maximum payout level is as follows: Mr. Faitelson $19,500,083; Mr. Melamed $7,018,140; Mr. Bass $5,485,319; and Mr. O'Boyle $5,557,548. For information on the actual payout to our NEOs under the 2023 PSUs, see "Compensation Discussion and Analysis-Long-Term Equity Incentive Awards-2023 Executive Compensation Elements-PSU Grants."
|
(3)
|
Represents performance-based (i) annual bonuses earned by Messrs. Faitelson and Melamed in respect of Company and individual performance in the applicable fiscal year and (ii) annual sales commissions paid to Mr. O'Boyle in the applicable fiscal year. The material terms of the non-equity incentive plan compensation paid to named executive officers in our last completed fiscal year are described in the section entitled "Compensation Discussion and Analysis-2023 Executive Compensation Elements-Annual Cash Incentive Compensation."
|
(4)
|
Amounts reported for 2023 include Company matching contributions to the 401(k) savings plan as follows: Mr. Faitelson $13,200; Mr. Melamed $5,270; Mr. O'Boyle $13,200; and Mr. Gottlieb $13,200. Amounts reported also include car allowances as follows: Mr. Faitelson $11,724; Mr. Melamed $20,079; and Mr. O'Boyle $7,646. Amounts also include $6,683 in payments with respect to travel expenses for Mr. O'Boyle and his spouse associated with attendance at our annual sales achievement event and $92,304 in redemption of accrued vacation days for Mr. Melamed.
|
(5)
|
For 2023, includes disability insurance benefits, contributions to pension and severance funds and recreation pay as required under Israeli law.
|
(6)
|
Represents Mr. Gottlieb's annual cash bonus as described in the section entitled "Compensation Discussion and Analysis-2023 Executive Compensation Elements-Annual Cash Incentive Compensation."
|
47
|
TABLE OF CONTENTS
Name
|
| |
Grant
Date
|
| |
Compensation
Committee
Approval Date
|
| |
Estimated Future Payouts Under
Non-Equity Incentive Plan Awards (1)
|
| |
Estimated Future Payouts Under
Equity Incentive Plan Awards (2)
|
| |
All Other
Stock
Awards:
Number of
Shares of
Stock or
Units (#)(3)
|
| |
Grant
Date Fair
Value of
Stock
Awards
($)(4)
|
||||||||||||
|
Threshold
($)
|
| |
Target
($)
|
| |
Maximum
($)
|
| |
Threshold
(#)
|
| |
Target
(#)
|
| |
Maximum
(#)
|
| |||||||||||||
Yakov Faitelson
|
| | | | | |
396,000
|
| |
440,000
|
| |
528,000
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
||
RSUs
|
| |
2/8/23
|
| |
2/2/23
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
227,592
|
| |
6,500,028
|
PSUs
|
| |
2/8/23
|
| |
2/2/23
|
| |
-
|
| |
-
|
| |
-
|
| |
113,796
|
| |
227,592
|
| |
682,776
|
| |
-
|
| |
6,500,028
|
Guy Melamed
|
| | | | | |
225,000
|
| |
250,000
|
| |
300,000
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
||
RSUs
|
| |
3/2/23
|
| |
3/2/23
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
85,410
|
| |
2,339,380
|
PSUs
|
| |
3/2/23
|
| |
3/2/23
|
| |
-
|
| |
-
|
| |
-
|
| |
42,705
|
| |
85,410
|
| |
256,230
|
| |
-
|
| |
2,339,380
|
David Bass
|
| | | | | |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
||
RSUs
|
| |
2/8/23
|
| |
2/2/23
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
128,042
|
| |
3,656,880
|
PSUs
|
| |
2/8/23
|
| |
2/2/23
|
| |
-
|
| |
-
|
| |
-
|
| |
32,010
|
| |
64,021
|
| |
192,063
|
| |
-
|
| |
1,828,440
|
James O'Boyle
|
| | | | | |
-
|
| |
350,000
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
||
RSUs
|
| |
2/8/23
|
| |
2/2/23
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
64,864
|
| |
1,852,516
|
PSUs
|
| |
2/8/23
|
| |
2/2/23
|
| |
-
|
| |
-
|
| |
-
|
| |
32,432
|
| |
64,864
|
| |
194,592
|
| |
-
|
| |
1,852,516
|
Dov Gottlieb
|
| | | | | |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
||
RSUs
|
| |
2/8/23
|
| |
2/2/23
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
94,538
|
| |
2,700,005
|
(1)
|
Represents the threshold, target and and/or maximum cash payout opportunities for fiscal 2023 under our 2023 Cash Incentive Plan and 2023 Sales Compensation Plan. Pursuant to his 2023 Sales Compensation Plan, Mr. O'Boyle had the opportunity to earn an annualized target commission for the year if the annualized earned net revenues target was met, or a pro rata portion of his target compensation if the annualized earned net revenues fell below such target. For any amount in excess of 100% of the annualized earned net revenues target for 2023, he was entitled to receive 1.5% of any such excess. As a result, there was no threshold or maximum payout. For more information regarding our 2023 Cash Incentive Plan and 2023 Sales Compensation Plan, see "Compensation Discussion and Analysis-2023 Executive Compensation Elements-Annual Cash Incentive Compensation."
|
(2)
|
Represents shares of our common stock underlying the 2023 PSUs granted under our 2013 Plan to our NEOs. Mr. Faitelson's PSUs, to the extent earned after the one-year performance period, will vest on February 28, 2026, subject to Mr. Faitelson's continued employment at the end of such period. The PSUs for all other NEOs, to the extent earned, will vest subject to ratable time-based vesting over three years following the one-year performance period.
|
(3)
|
Represents shares of our common stock underlying RSUs granted under our 2013 Plan, subject to ratable time-based vesting over four years upon the last calendar day of the month of February beginning on February 29, 2024, subject to the individual's continued employment at the applicable vesting date with respect to the NEOs.
|
(4)
|
Represents the grant date fair value of RSU and PSU awards computed in accordance with Topic 718. For a summary of the assumptions made in the valuation of these awards, please see Note 2.k, "Accounting for Stock-Based Compensation," of the Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2023.
|
48
|
TABLE OF CONTENTS
Name
|
| |
Grant Date
|
| |
Option Awards
|
| |
Stock Awards
|
||||||||||||||||||
|
Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
|
| |
Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
|
| |
Option
Exercise
Price
($)
|
| |
Option
Expiration
Date
|
| |
Number of
Shares or
Units of
Stock That
Have Not
Vested (#)(1)
|
| |
Market
Value of
Shares or
Units of
Stock That
Have Not
Vested ($)(1)
|
| |
Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares
That Have
Not Vested (#)
|
| |
Equity
Incentive Plan
Awards:
Market Value
of Unearned
Shares That
Have Not
Vested ($)
|
|||||
Yakov Faitelson
|
| |
8/7/2014
|
| |
255,000
|
| |
-
|
| |
7.00
|
| |
8/4/2024
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
|
2/20/2015
|
| |
105,000
|
| |
-
|
| |
9.96
|
| |
2/17/2025
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
||
|
2/17/2016
|
| |
60,000
|
| |
-
|
| |
5.62
|
| |
2/14/2026
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
||
|
2/13/2020
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
21,243(2)
|
| |
961,883
|
| |
-
|
| |
-
|
||
|
2/11/2021
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
33,744(3)
|
| |
1,527,928
|
| |
-
|
| |
-
|
||
|
2/11/2021
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
188,570(4)
|
| |
8,538,450
|
| |
-
|
| |
-
|
||
|
2/10/2022
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
80,788(5)
|
| |
3,658,081
|
| |
-
|
| |
-
|
||
|
2/10/2022
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
41,670(6)
|
| |
1,886,818
|
| |
-
|
| |
-
|
||
|
2/8/2023
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
227,592(7)
|
| |
10,305,366
|
| |
-
|
| |
-
|
||
|
2/8/2023
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
227,592(8)
|
| |
10,305,366
|
||
Guy Melamed
|
| |
2/13/2020
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
45,000(2)
|
| |
2,037,600
|
| |
-
|
| |
-
|
|
2/11/2021
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
17,967(3)
|
| |
813,546
|
| |
-
|
| |
-
|
||
|
2/11/2021
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
33,467(9)
|
| |
1,515,386
|
| |
-
|
| |
-
|
||
|
2/10/2022
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
43,014(5)
|
| |
1,947,674
|
| |
-
|
| |
-
|
||
|
2/10/2022
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
14,792(10)
|
| |
669,782
|
| |
-
|
| |
-
|
||
|
3/2/2023
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
85,410(7)
|
| |
3,867,365
|
| |
-
|
| |
-
|
||
|
3/2/2023
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
85,410 (11)
|
| |
3,867,365
|
||
David Bass
|
| |
2/13/2020
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
48,750(2)
|
| |
2,207,400
|
| |
-
|
| |
-
|
|
2/11/2021
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
28,086(3)
|
| |
1,271,734
|
| |
-
|
| |
-
|
||
|
2/11/2021
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
26,158(9)
|
| |
1,184,434
|
| |
-
|
| |
-
|
||
|
2/10/2022
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
67,239(5)
|
| |
3,044,582
|
| |
-
|
| |
-
|
||
|
2/10/2022
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
11,562(10)
|
| |
523,527
|
| |
-
|
| |
-
|
||
|
2/8/2023
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
128,042(7)
|
| |
5,797,742
|
| |
-
|
| |
-
|
||
|
2/8/2023
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
64,021(11)
|
| |
2,898,871
|
||
James O'Boyle
|
| |
2/13/2020
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
26,250(2)
|
| |
1,188,600
|
| |
-
|
| |
-
|
|
2/11/2021
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
14,226(3)
|
| |
644,153
|
| |
-
|
| |
-
|
||
|
2/11/2021
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
26,502(9)
|
| |
1,200,011
|
| |
-
|
| |
-
|
||
|
2/10/2022
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
34,062(5)
|
| |
1,542,327
|
| |
-
|
| |
-
|
||
|
2/10/2022
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
11,713(10)
|
| |
530,365
|
| |
-
|
| |
-
|
||
|
2/8/2023
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
64,864(7)
|
| |
2,937,042
|
| |
-
|
| |
-
|
||
|
2/8/2023
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
64,864(11)
|
| |
2,937,042
|
||
Dov Gottlieb
|
| |
5/6/2021
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
47,720(12)
|
| |
2,160,762
|
| |
-
|
| |
-
|
|
5/5/2022
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
54,436(13)
|
| |
2,464,862
|
| |
-
|
| |
-
|
||
|
2/8/2023
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
94,538(7)
|
| |
4,280,681
|
| |
-
|
| |
-
|
(1)
|
Represented unvested shares subject to time-vesting requirements. The market value is based on the closing price of our common stock on December 29, 2023, which was $45.28 per share.
|
(2)
|
The shares subject to the RSU award vest, and an equal number of shares of our common stock are deliverable to the grantee, in four equal annual installments upon the last calendar day of the month of February beginning on February 28, 2021, subject to the grantee continuing to be employed by us through each such date.
|
(3)
|
The shares subject to the RSU award vest, and an equal number of shares of our common stock are deliverable to the grantee, in four equal annual installments upon the last calendar day of the month of February beginning on February 28, 2022, subject to the grantee continuing to be employed by us through each such date.
|
(4)
|
Represents the number of PSUs that were earned on February 10, 2022 based on the achievement performance level in 2021. All such shares are eligible to time-vest on February 29, 2024, subject to Mr. Faitelson's continued employment through such date.
|
49
|
TABLE OF CONTENTS
(5)
|
The shares subject to the RSU award vest, and an equal number of shares of our common stock are deliverable to the grantee, in four equal annual installments upon the last calendar day of the month of February beginning on February 28, 2023, subject to the grantee continuing to be employed by us through each such date.
|
(6)
|
Represents the number of PSUs that were earned on February 9, 2023 based on the achievement performance level in 2022. All such shares are eligible to time-vest on February 28, 2025, subject to Mr. Faitelson's continued employment through such date.
|
(7)
|
The shares subject to the RSU award vest, and an equal number of shares of our common stock are deliverable to the grantee, in four equal annual installments upon the last calendar day of the month of February beginning on February 29, 2024, subject to the grantee continuing to be employed by us through each such date.
|
(8)
|
Represents the number of PSUs that were earned on February 8, 2024 based on the achievement performance level in 2023. All such shares are eligible to time-vest on February 27, 2026, subject to Mr. Faitelson's continued employment through such date.
|
(9)
|
Represents the number of PSUs that were earned on February 10, 2022 based on the achievement performance level in 2021. All such shares are eligible to time-vest, and an equal number of shares of common stock will be deliverable to the grantee, in three equal annual installments upon the last calendar day of the month of February beginning on February 28, 2022, subject to the grantee's continued employment through such date.
|
(10)
|
Represents the number of PSUs that were earned on February 9, 2023 based on the achievement performance level in 2022. All such shares are eligible to time-vest, and an equal number of shares of common stock will be deliverable to the grantee, in three equal annual installments upon the last calendar day of the month of February beginning on February 28, 2023, subject to the grantee's continued employment through such date.
|
(11)
|
Represents the number of PSUs that were earned on February 8, 2024 based on the achievement performance level in 2022. All such shares are eligible to time-vest, and an equal number of shares of common stock will be deliverable to the grantee, in three equal annual installments upon the last calendar day of the month of February beginning on February 29, 2024, subject to the grantee's continued employment through such date.
|
(12)
|
The shares subject to the RSU award vest, and an equal number of shares of our common stock are deliverable to the grantee, in four equal annual installments upon the last calendar day of the month of May beginning on May 31, 2022 subject to the grantee continuing to be employed by us through each such date.
|
(13)
|
The shares subject to the RSU award vest, and an equal number of shares of our common stock are deliverable to the grantee, in four equal annual installments upon the last calendar day of the month of May beginning on May 31, 2023 subject to the grantee continuing to be employed by us through each such date.
|
| |
Option Awards
|
| |
Stock Awards
|
|||||||
Name
|
| |
Number of Shares Acquired
on Exercise (#)
|
| |
Value Realized on
Exercise ($)(1)
|
| |
Number of Shares Acquired
on Vesting (#)
|
| |
Value Realized on
Vesting ($)(2)
|
Yakov Faitelson
|
| |
-
|
| |
-
|
| |
263,893
|
| |
7,146,222
|
Guy Melamed
|
| |
-
|
| |
-
|
| |
165,433
|
| |
4,479,926
|
David Bass
|
| |
-
|
| |
-
|
| |
173,395
|
| |
4,695,537
|
James O'Boyle
|
| |
-
|
| |
-
|
| |
99,579
|
| |
2,696,599
|
Dov Gottlieb
|
| |
-
|
| |
-
|
| |
42,634
|
| |
1,120,422
|
(1)
|
The value realized on exercise of stock option awards is based on the difference between the closing market price of our common stock on the date of exercise of the option award and the exercise price of the option.
|
(2)
|
The value realized on vesting of stock awards granted is based on the closing market price of our common stock on the date of vesting of the stock award.
|
50
|
TABLE OF CONTENTS
Name
|
| |
Involuntary Termination Without Cause or
Voluntary Termination for Good Reason, Not in
Connection with a Change in Control(1)
($)
|
| |
Involuntary Termination Without Cause or
Voluntary Termination for Good Reason, in
Connection with a Change in Control(2)(3)
($)
|
Yakov Faitelson
|
| |
1,500,000
|
| |
2,940,000
|
Guy Melamed
|
| |
650,000
|
| |
1,550,000
|
David Bass
|
| |
167,342
|
| |
334,684
|
James O'Boyle
|
| |
700,000
|
| |
1,750,000
|
Dov Gottlieb
|
| |
700,000
|
| |
1,600,000
|
(1)
|
Includes (i) a cash payment equal to 150% of the sum of base salary and target bonus for the year of termination for Mr. Faitelson, 100% of the sum of base salary and target bonus for the year of termination for Messrs. Melamed, O' Boyle and Gottlieb, and one-half times the sum of base salary for the year of termination for Mr. Bass, and (ii) with respect to Messrs. Faitelson, Melamed, O'Boyle and Gottlieb, a payment of any earned but unpaid bonus or commission in respect of the year prior to the year of termination, at the time such bonuses or commissions would otherwise be paid (which is zero when termination is assumed as of December 31, 2023):
|
Name
|
| |
Cash Payment Relating to
Base Salary and/or Target
Bonus/Commission for Year of
Termination
($)
|
| |
Earned but Unpaid
Bonus/Commission for Year
Prior to Year of
Termination
($)
|
Yakov Faitelson
|
| |
1,500,000
|
| |
-
|
Guy Melamed
|
| |
650,000
|
| |
-
|
David Bass
|
| |
167,342
|
| |
-
|
James O'Boyle
|
| |
700,000
|
| |
-
|
Dov Gottlieb
|
| |
700,000
|
| |
-
|
(2)
|
Includes (i) a cash payment equal to 250% of the sum of base salary and target bonus for the year of termination for Mr. Faitelson, 150% of the sum of base salary and target bonus for the year of termination for Messrs. Melamed, O'Boyle and Gottlieb, and one time base salary for the year of termination for Mr. Bass, (ii) with respect to Messrs. Faitelson, Melamed, O'Boyle and Gottlieb, an additional cash payment equal to the amount of target bonus or commission for the performance period including the date of termination, prorated based on the number of days employed by the Company during the performance period, and (iii) with respect to Messrs. Faitelson, Melamed, O'Boyle and Gottlieb, a payment of any earned but unpaid bonus or commission in respect of the year prior to the year of termination, at the time such bonuses or commissions would otherwise be paid (which is zero when termination is assumed as of December 31, 2023).
|
Name
|
| |
Cash Payment Relating to Base
Salary and/or Target
Bonus/Commission for Year of
Termination
($)
|
| |
Additional Cash Payment of
Pro Rata Target
Bonus/Commission for Year
of Termination
($)
|
| |
Earned but Unpaid
Bonus/Commission for Year
Prior to Year of
Termination
($)
|
Yakov Faitelson
|
| |
2,500,000
|
| |
440,000
|
| |
-
|
Guy Melamed
|
| |
1,300,000
|
| |
250,000
|
| |
-
|
David Bass
|
| |
334,684
|
| |
-
|
| |
-
|
James O'Boyle
|
| |
1,400,000
|
| |
350,000
|
| |
-
|
Dov Gottlieb
|
| |
1,400,000
|
| |
200,000
|
| |
-
|
(3)
|
Benefit is provided in the case of an involuntary termination without "cause" or voluntary termination for "good reason" (i) with respect to Messrs. Faitelson, Melamed, O'Boyle and Gottlieb, within six months prior to and 24 months following a "change in control," and (ii) with respect to Mr. Bass, within the one-year period following a "change in control."
|
51
|
TABLE OF CONTENTS
| |
Involuntary Termination Without Cause
or Voluntary Termination for Good
Reason, Not in Connection with a Change
in Control(1)
|
| |
Involuntary Termination Without Cause or
Voluntary Termination for Good Reason, in
Connection with a Change in Control(2)
|
| |
Change in Control
Without
Termination(3)
|
||||||||||
Name
|
| |
Number
(#)
|
| |
Value
($)*
|
| |
Number
(#)
|
| |
Value
($)*
|
| |
Number
(#)
|
| |
Value*
($)
|
Yakov Faitelson
|
| |
236,424
|
| |
10,705,270
|
| |
821,199
|
| |
37,183,891
|
| |
-
|
| |
-
|
Guy Melamed
|
| |
109,268
|
| |
4,947,672
|
| |
325,060
|
| |
14,718,717
|
| |
-
|
| |
-
|
David Bass
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
373,857
|
| |
16,928,245
|
James O'Boyle
|
| |
77,527
|
| |
3,510,433
|
| |
242,481
|
| |
10,979,540
|
| |
-
|
| |
-
|
Dov Gottlieb
|
| |
81,116(4)
|
| |
3,672,917
|
| |
196,694
|
| |
8,906,304
|
| |
-
|
| |
-
|
*
|
Based on $45.28, the closing price of our common stock on the last business day of our 2023 fiscal year.
|
(1)
|
Includes accelerated vesting of a portion of each equity award held by the named executive officer, prorated based on the number of days he was employed by the Company since the last vesting date (with any performance-vesting awards deemed vested at the greater of target and actual level of performance determined at the time of such termination).
|
(2)
|
Includes accelerated vesting of all equity awards held by the named executive officer (with any performance-vesting awards deemed vested at the greater of target and actual level of performance determined at the time of such termination).
|
(3)
|
Includes accelerated vesting of all equity awards held by the named executive officer (with performance-vesting awards deemed vested at target).
|
(4)
|
Pursuant to Mr. Gottlieb's employment agreement that he entered into when he joined the Company, wherever termination is by us without "cause," he is also entitled to acceleration of the remaining unvested portions of his initial grant of 95,440 RSUs granted in May 2021.
|
DIRECTOR COMPENSATION
|
Restricted stock units
|
| |
On average, our non-employee directors currently receive more than 80% of their annual compensation from us in the form of RSUs (based on the grant date fair value of approximately $190,000 for annual grants).
|
Director stock ownership guidelines
|
| |
Each of our directors is required to beneficially own shares of our common stock with the equivalent value, as of the acquisition date, of at least five times his or her aggregate annual cash retainer, by the date of the fifth anniversary of his or her appointment (provided that directors as of the date of the guidelines' adoption must achieve their applicable levels of ownership on an accelerated basis, within two years after adoption). For more information, see "Information Regarding the Board of Directors and Corporate Governance-Other Policies and Practices."
|
Compensation review
|
| |
The Compensation Committee reviews the appropriateness of our director compensation.
|
•
|
$30,000 per year for service as a Board member;
|
•
|
$20,000 per year for service as the chairperson of the Audit Committee and $7,500 per year for service as a member (other than as chair) of the Audit Committee;
|
•
|
$10,500 per year for service as the chairperson of the Compensation Committee and $5,000 per year for service as a member (other than as chair) of the Compensation Committee;
|
•
|
$7,500 per year for service as the chairperson of the Nominating and Corporate Governance Committee and $3,500 per year for service as a member (other than as chair) of the Nominating and Corporate Governance Committee;
|
•
|
$7,500 per year for service as the chairperson of the Technology Committee and $3,500 per year for service as a member (other than as chair) of the Technology Committee; and
|
•
|
$19,000 per year for services as Lead Director.
|
52
|
TABLE OF CONTENTS
Director
|
| |
Fees Earned or
Paid in Cash ($)
|
| |
Stock Awards (1) ($)
|
| |
Total ($)
|
Carlos Aued
|
| |
30,000
|
| |
190,008
|
| |
220,008
|
Kevin Comolli
|
| |
44,750
|
| |
190,008
|
| |
234,758
|
John J. Gavin, Jr.
|
| |
76,000
|
| |
190,008
|
| |
266,008
|
Gili Iohan
|
| |
42,500
|
| |
190,008
|
| |
232,508
|
Avrohom J. Kess
|
| |
37,750
|
| |
190,008
|
| |
227,758
|
Ohad Korkus
|
| |
37,500
|
| |
190,008
|
| |
227,508
|
Thomas F. Mendoza
|
| |
30,000
|
| |
190,008
|
| |
220,008
|
Rachel Prishkolnik
|
| |
35,000
|
| |
190,008
|
| |
225,008
|
Ofer Segev
|
| |
37,500
|
| |
190,008
|
| |
227,508
|
Fred van den Bosch
|
| |
41,000
|
| |
190,008
|
| |
231,008
|
(1)
|
Represents the grant date fair value of the RSU awards granted on May 3, 2023, based on a price per share of the Company at the closing of the trading day of $22.97.
|
Director
|
| |
Unexercised Options Outstanding
(#)
|
| |
Unvested Restricted Stock Units Outstanding
(#)
|
Carlos Aued
|
| |
-
|
| |
8,272
|
Kevin Comolli
|
| |
-
|
| |
8,272
|
John J. Gavin, Jr.
|
| |
-
|
| |
8,272
|
Gili Iohan
|
| |
-
|
| |
8,272
|
Avrohom J. Kess
|
| |
-
|
| |
8,272
|
Ohad Korkus
|
| |
2,811
|
| |
8,272
|
Thomas F. Mendoza
|
| |
-
|
| |
8,272
|
Rachel Prishkolnik
|
| |
-
|
| |
8,272
|
Ofer Segev
|
| |
-
|
| |
8,272
|
Fred van den Bosch
|
| |
-
|
| |
8,272
|
CHIEF EXECUTIVE OFFICER PAY RATIO
|
53
|
TABLE OF CONTENTS
PAY VERSUS PERFORMANCE
|
| |
Value of Initial Fixed $100
Investment Based On:
|
| |
(in thousands)
|
|||||||||||||||||||
Year(1)
|
| |
Summary
Compensation
Table Total
for CEO ($)
|
| |
Compensation
Actually Paid
to CEO ($)(2)(3)
|
| |
Average
Summary
Compensation
Table Total
for Other
NEOs ($)
|
| |
Average
Compensation
Actually Paid
to Other
NEOs ($)(3)(4)
|
| |
Total
Shareholder
Return
($)(5)
|
| |
Peer Group
Total
Shareholder
Return
($)(5)
|
| |
Net Loss
($)
|
| |
Annual
Recurring
Revenues
($)(6)
|
2023
|
| |
14,112,979
|
| |
50,973,771
|
| |
4,799,302
|
| |
15,463,566
|
| |
174.80
|
| |
221.06
|
| |
(100,916)
|
| |
543,000
|
2022
|
| |
9,618,354
|
| |
(8,866,124)
|
| |
4,728,473
|
| |
(2,636,006)
|
| |
92.42
|
| |
132.79
|
| |
(124,518)
|
| |
465,100
|
2021
|
| |
10,372,443
|
| |
12,724,377
|
| |
5,273,748
|
| |
6,100,570
|
| |
188.32
|
| |
206.76
|
| |
(116,861)
|
| |
387,100
|
2020
|
| |
6,201,417
|
| |
29,985,683
|
| |
4,751,691
|
| |
14,611,961
|
| |
210.54
|
| |
149.98
|
| |
(94,010)
|
| |
287,300
|
(1)
|
The CEO and other NEOs included in the above compensation columns reflect the following:
|
Year
|
| |
CEO
|
| |
Other NEOs
|
2023
|
| |
Yakov Faitelson
|
| |
Guy Melamed, David Bass, James O'Boyle, Dov Gottlieb
|
2022
|
| |
Yakov Faitelson
|
| |
Guy Melamed, David Bass, James O'Boyle, Dov Gottlieb
|
2021
|
| |
Yakov Faitelson
|
| |
Guy Melamed, David Bass, James O'Boyle, Gilad Raz
|
2020
|
| |
Yakov Faitelson
|
| |
Guy Melamed, David Bass, James O'Boyle, Gilad Raz
|
(2)
|
The following table details the amounts deducted and added to the Summary Compensation Table figure to calculate compensation actually paid in accordance with Item 402(v) for our CEO:
|
| |
2023
|
| |
2022
|
| |
2021
|
| |
2020
|
|
Total Compensation as reported on Summary Compensation Table
|
| |
14,112,979
|
| |
9,618,354
|
| |
10,372,443
|
| |
6,201,417
|
Fair value of equity awards reported in Summary Compensation Table
|
| |
(13,000,055)
|
| |
(8,787,553)
|
| |
(9,250,316)
|
| |
(5,290,849)
|
Fair value at year-end of equity compensation granted in current year and unvested at year-end
|
| |
41,221,463
|
| |
3,576,325
|
| |
12,490,656
|
| |
14,069,193
|
Change in fair value from end of prior fiscal to end of current fiscal year for awards made in prior fiscal years that were unvested at end of current fiscal year
|
| |
7,810,760
|
| |
(11,936,142)
|
| |
(2,779,713)
|
| |
14,760,197
|
Change in fair value from end of prior fiscal year to vesting date for awards made in prior fiscal years that vested during current fiscal year
|
| |
828,624
|
| |
(1,337,108)
|
| |
1,891,307
|
| |
245,726
|
Compensation Actually Paid
|
| |
50,973,771
|
| |
(8,866,124)
|
| |
12,724,377
|
| |
29,985,683
|
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(3)
|
The following table details the amounts deducted and added to the Summary Compensation Table figure to calculate compensation actually paid in accordance with Item 402(v) for all other NEOs:
|
| |
2023
|
| |
2022
|
| |
2021
|
| |
2020
|
|
Total Compensation as reported on Summary Compensation Table
|
| |
4,799,302
|
| |
4,728,473
|
| |
5,273,748
|
| |
4,751,691
|
Fair value of equity awards reported in Summary Compensation Table
|
| |
(4,142,279)
|
| |
(4,142,296)
|
| |
(4,714,847)
|
| |
(4,252,855)
|
Fair value at year-end of equity compensation granted in current year and unvested at year-end
|
| |
11,498,166
|
| |
1,927,757
|
| |
5,832,637
|
| |
7,587,632
|
Change in fair value from end of prior fiscal to end of current fiscal year for awards made in prior fiscal years that were unvested at end of current fiscal year
|
| |
2,939,286
|
| |
(4,408,373)
|
| |
(1,230,120)
|
| |
6,277,530
|
Change in fair value from end of prior fiscal year to vesting date for awards made in prior fiscal years that vested during current fiscal year
|
| |
369,091
|
| |
(741,566)
|
| |
939,152
|
| |
247,963
|
Compensation Actually Paid
|
| |
15,463,566
|
| |
(2,636,006)
|
| |
6,100,570
|
| |
14,611,961
|
(4)
|
The assumptions used to value equity for the purposes of compensation actually paid were developed consistently with those used to value equity awards at the grant date under ASC 718. For each respective measurement date, RSUs were valued at the then-current stock price. PSUs were valued at the then-current stock price multiplied by the applicable performance factor actually earned, which was 300% for PSUs outstanding in FY2023.
|
(5)
|
Peer Group TSR reflects the Company's peer group (NASDAQ Computer Index) used for purposes of Item 201(e)(ii) of Regulation S-K in our latest Annual Report on Form 10-K filed with the SEC. Each year reflects what the cumulative value of $100 would be as of the end of the applicable fiscal year, including the reinvestment of dividends, if such amount were first invested on December 31, 2019.
|
(6)
|
We chose annual recurring revenues as our company selected measure because it is the key variable component of our executive compensation program. Annual recurring revenues is a key performance indicator defined as the annualized value of active term-based subscription license contracts, maintenance contracts and SaaS contracts in effect at the end of that period. Subscription license contracts, maintenance contracts and SaaS contracts are annualized by dividing the total contract value by the number of days in the term and multiplying the result by 365. The annualized value of contracts is a legal and contractual determination made by assessing the contractual terms with our customers. The annualized value of maintenance contracts is not determined by reference to historical revenues, deferred revenues or any other GAAP financial measure over any period. Annual recurring revenues is not a forecast of future revenues and can be impacted by contract start and end dates and renewal rates.
|
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•
|
Annual Recurring Revenues
|
•
|
Trailing-Twelve-Month Margin
|
•
|
SaaS Mix
|
•
|
Free Cash Flow
|
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EQUITY COMPENSATION PLAN INFORMATION
|
Plan Category
|
| |
Numbers of Securities to be
Issued upon Exercise of
Outstanding Options,
RSUs and PSUs(1)
|
| |
Weighted-Average Exercise
Price of Outstanding
Options
|
| |
Number of Securities Remaining
Available for Future Issuance
Under Equity Compensation Plans
(excluding securities reflected in
the first column)(2)
|
Equity compensation plans approved by security holders
|
| |
9,666,756
|
| |
$7.56(3)
|
| |
7,711,826(4)
|
Equity compensation plans not approved by security holders
|
| |
-
|
| |
-
|
| |
-
|
Total
|
| |
9,666,756
|
| | | |
7,711,826
|
(1)
|
Pursuant to SEC guidance, includes the number of PSUs granted to our CEO issuable at the maximum payout level.
|
(2)
|
The Company initially reserved 1,500,000 shares of common stock for purchase under the ESPP. The number of shares of common stock available for issuance under the ESPP was increased on January 1, 2016 and will be increased each January 1 thereafter, by an amount equal to the lesser of (i) one percent (1%) of the number of shares of common stock issued and outstanding on each December 31 immediately prior to the date of increase, except that the amount of each such increase will be limited to the number of shares of common stock necessary to bring the total number of shares of common stock available for issuance under the ESPP to two percent (2%) of the number of shares of common stock issued and outstanding on each such December 31, or (ii) 1,200,000 shares of common stock. Between January 1, 2016 and December 31, 2023, the share reserve under the ESPP has been automatically increased by an aggregate of 3,402,705 shares.
|
(3)
|
Since RSU and PSU awards have no exercise price, they are not included in the weighted-average exercise price calculation in this column.
|
(4)
|
Represents, as of December 31, 2023, 5,529,842 shares of common stock that remained available for issuance under the 2023 Plan and 2,181,984 shares of common stock that remained available for purchase under the ESPP. There are no shares available for future grant under the 2013 Plan, 2005 Plan or under the Polyrize Plan.
|
TRANSACTIONS WITH RELATED PERSONS
|
•
|
the amounts involved exceeded or will exceed $120,000; and
|
•
|
any of our directors, director nominees, executive officers or beneficial holders of more than 5% of any class of our capital stock, or any immediate family members thereof, had or will have a direct or indirect material interest.
|
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QUESTIONS AND ANSWERS ABOUT THESE PROXY MATERIALS AND VOTING
|
•
|
instructions on how to attend and participate via the Internet, including how to demonstrate proof of stock ownership, are posted at www.virtualshareholdermeeting.com/VRNS2024;
|
•
|
assistance with questions regarding how to attend and participate via the Internet will be provided at www.virtualshareholdermeeting.com/VRNS2024on the day of the Annual Meeting;
|
•
|
webcast starts at 10:00 a.m. Eastern Daylight Time;
|
•
|
shareholders may vote and submit questions while attending the Annual Meeting via the Internet; and
|
•
|
you will need your 16-digit control number included on the Notice of Internet Availability of Proxy Materials (if a shareholder of record) to virtually enter the Annual Meeting. If you hold your shares in "street name", you should contact the bank, broker or other institution where you hold your account if you have questions about obtaining your control number.
|
•
|
providing shareholders with the ability to submit appropriate questions in real-time via the meeting website, limiting questions to one per shareholder unless time otherwise permits. Live questions may be submitted online beginning shortly before the start of the Annual Meeting at www.virtualshareholdermeeting.com/VRNS2024; and
|
•
|
answering as many questions submitted in accordance with the meeting rules of conduct as possible in the time allotted for the meeting. In addition, answers to appropriate live questions that we were unable to answer at the Annual Meeting will be posted on our Investor Relations website as soon as practicable after the meeting.
|
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•
|
Proposal 1: Election of three Class I director nominees listed in the Proxy Statement, each for a term of three years;
|
•
|
Proposal 2: Non-binding vote to approve the frequency of future votes to approve executive compensation;
|
•
|
Proposal 3: Non-binding vote to approve the compensation of our named executive officers ("say-on-pay");
|
•
|
Proposal 4: Ratification of the appointment of Kost Forer Gabbay & Kasierer, a member of Ernst & Young Global Limited ("E&Y"), as the independent registered public accounting firm of the Company for 2024; and
|
•
|
Proposal 5: Approval of the Amended and Restated Varonis Systems, Inc. 2023 Omnibus Equity Incentive Plan.
|
•
|
Online During the Annual Meeting. You may vote during the Annual Meeting by visiting www.virtualshareholdermeeting.com/VRNS2024, entering the 16-digit control number included in the Notice of Internet Availability of Proxy Materials or your proxy card, and following the on-screen instructions.
|
•
|
Mail.You may vote using a proxy card that may be delivered to you. Simply complete, sign and date the proxy card where indicated and return it promptly in the envelope provided. You should sign your name exactly as it appears on the proxy card. If you are signing in a representative capacity, you must indicate your name and title or capacity. Your signed proxy card must be received by June 2, 2024.
|
•
|
Telephone. To vote over the telephone, dial toll-free 1-800-690-6903 using a touch-tone phone and follow the recorded instructions. You will be asked to provide the 16-digit control number included in the Notice of Internet Availability of Proxy Materials. Your telephone vote must be received by 11:59 p.m., Eastern Daylight Time, on June 2, 2024 to be counted.
|
•
|
Online Prior to the Annual Meeting. To vote through the internet, go to www.proxyvote.comand follow the instructions on how to complete an electronic proxy card. You will be asked to provide the 16-digit control number included in the Notice of Internet Availability of Proxy Materials or proxy card. Your internet vote must be received by 11:59 p.m., Eastern Daylight Time, on June 2, 2024 to be counted.
|
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•
|
Mail. You may submit another properly completed proxy card with a later date that is receivedno later than June 2, 2024.
|
•
|
Telephone. You may grant a subsequent proxy by telephone before the closing of those voting facilities at 11:59 p.m. Eastern Daylight Time on June 2, 2024.
|
•
|
Internet. You may grant a subsequent proxy through the internet before the closing of those voting facilities at 11:59 p.m. Eastern Daylight Time on June 2, 2024.
|
•
|
Advance Written Notice. You may send a timely written notice to the attention of our Chief Financial Officer and Chief Operating Officer at Varonis Systems, Inc., 1250 Broadway, 28th Floor, New York, NY 10001, stating that you are revoking your proxy and provided such statement is receivedno later than June 2, 2024.
|
•
|
Attend the Annual Meeting. You may attend the Annual Meeting and vote. Simply attending the meeting will not, by itself, revoke your proxy. In such case, only your latest internet proxy submitted will be counted.
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Proposal
|
| |
Vote Required
|
| |
Effect of Abstention
|
| |
Broker Discretionary
Voting Allowed?
|
Proposal No. 1:
Election of Directors
|
| |
Plurality of votes present in person or represented by proxy at the meeting and entitled to vote on the election of directors. This means that the three nominees receiving the highest number of affirmative "for" votes will be elected. Only votes "for" or "withheld" will affect the outcome of the vote.
|
| |
Not applicable.
|
| |
No, and thus will have no effect on the outcome of the vote.
|
Proposal No. 2:
Non-Binding approval of the frequency of future votes to approve executive compensation
|
| |
Majority of the voting power of the shares of stock entitled to vote thereon that are present in person or represented by proxy.
|
| |
Will count as a vote "against" the proposal.
|
| |
No, and thus will have no effect on the outcome of the vote.
|
Proposal No. 3:
Non-Binding Approval of Compensation of Named Executive Officers
|
| |
Majority of the voting power of the shares of stock entitled to vote thereon that are present in person or represented by proxy.
|
| |
Will count as a vote "against" the proposal.
|
| |
No, and thus will have no effect on the outcome of the vote.
|
Proposal No. 4:
Ratification of the Appointment of E&Y
|
| |
Majority of the voting power of the shares of stock entitled to vote thereon that are present in person or represented by proxy.
|
| |
Will count as a vote "against" the proposal.
|
| |
Yes.
|
Proposal No. 5:
Approval of the Amended and Restated Varonis Systems, Inc. 2023 Omnibus Equity Incentive Plan
|
| |
Majority of the voting power of the shares of stock entitled to vote thereon that are present in person or represented by proxy.
|
| |
Will count as a vote "against" the proposal.
|
| |
No, and thus will have no effect on the outcome of the vote.
|
OTHER MATTERS
|
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63
|
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APPENDIX A - AMENDED AND RESTATED VARONIS SYSTEMS, INC. 2023 OMNIBUS EQUITY INCENTIVE PLAN
|
A-1
|
TABLE OF CONTENTS
A-2
|
TABLE OF CONTENTS
A-3
|
TABLE OF CONTENTS
A-4
|
TABLE OF CONTENTS
A-5
|
TABLE OF CONTENTS
A-6
|
TABLE OF CONTENTS
A-7
|
TABLE OF CONTENTS
A-8
|
TABLE OF CONTENTS
A-9
|
TABLE OF CONTENTS
A-10
|
TABLE OF CONTENTS
APPENDIX B - NON-GAAP RECONCILIATION
|
Reconciliation to non-GAAP free cash flow (in millions):
|
| |
Twelve Months Ended
December 31, 2023
|
Net cash provided by operating activities
|
| |
$59.4
|
Purchases of property and equipment
|
| |
($5.1)
|
Free cash flow
|
| |
$54.3
|
B-1
|
TABLE OF CONTENTS
TABLE OF CONTENTS