technology company, where he was most recently Vice President and Chief Financial Officer of their Worldwide Consumer Organization from June 2015 to December 2018. Before that, from September 2013 to June 2015, Mr. Stephenson was the Chief Financial Officer of Amazon’s International Consumer business and led finance across many areas of the company. Mr. Stephenson served as President and Chief Financial Officer of Big Fish Games, Inc., a gaming company, from September 2011 to September 2013. Mr. Stephenson received a Bachelor of Science in Industrial and Management Engineering from Montana State University and a Master of Business Administration from the University of Iowa.
Aristotle Balogh. Mr. Balogh has served as our Chief Technology Officer since November 2018. Prior to joining Airbnb, Mr. Balogh was Vice President of Engineering at Alphabet Inc. (formerly known as Google, Inc.), a publicly-held global technology company, from June 2011 to November 2018, where he was most notably responsible for the data and serving systems behind Google Search. Prior to that, from February 2008 to July 2010, Mr. Balogh served as Executive Vice President and Chief Technology Officer of Yahoo! Inc., a digital information platform. Mr. Balogh received a Bachelor of Science in Electrical Engineering and Computer Science and a Master of Science in Engineering in Electrical and Computer Engineering from Johns Hopkins University.
Catherine Powell. Ms. Powell has served as our Global Head of Hosting since July 2020 and previously served as our Head of Experiences since January 2020. Prior to joining Airbnb, Ms. Powell spent 15 years at the Walt Disney Company (“Disney”) where she held multiple roles from June 2004 to December 2019, including President, Disney Park Western Region from March 2018 to December 2019 and Présidente, Disneyland Paris from July 2016 to December 2018. Prior to joining Disney, Ms. Powell worked for BBC Worldwide in various roles from January 1997 to June 2004. Ms. Powell received a Master in Arts in Philosophy, Politics, Economics from Oxford University.
Non-Employee Directors
Angela Ahrendts. Ms. Ahrendts joined our board of directors in May 2019. Ms. Ahrendts served as Senior Vice President, Retail at Apple Inc. (“Apple”), a publicly-held technology company, from May 2014 to May 2019. Prior to joining Apple, Ms. Ahrendts served as a director and Chief Executive Officer of Burberry plc, a global luxury fashion company, from July 2006 to April 2014. Ms. Ahrendts also previously served as Executive Vice President at Liz Claiborne Inc. and President of Donna Karan International, both then publicly-held global fashion companies. Ms. Ahrendts has served as a director of the Ralph Lauren Corporation, a publicly-held fashion company, since August 2018. Ms. Ahrendts has served as a director of WPP plc, a publicly-held creative transformation company with expertise in communications, experience, commerce and technology, since June 2020. Ms. Ahrendts also serves on non-profits boards, including Saïd Business School at the University of Oxford, The HOW Institute for Society, and Charity: Water. Ms. Ahrendts received a Bachelor of Arts in Marketing and Merchandising from Ball State University. We believe that Ms. Ahrendts is qualified to serve as a member of our board of directors because of her extensive experience advising technology companies and other public companies as both a director and executive.
Kenneth Chenault. Mr. Chenault joined our board of directors in January 2018. Since February 2018, Mr. Chenault serves as Chairman and Managing Director of General Catalyst, a venture capital firm. Mr. Chenault served as Chairman and Chief Executive Officer of American Express Company, a publicly-held diversified financial services company, from April 2001 through January 2018. Prior to that, he held roles of increasing responsibility at American Express Company, including President of the U.S. division of American Express Travel Related Services Company, Inc. in 1993, Vice Chairman of the American Express Company in 1995 and President and Chief Operating Officer in 1997. Mr. Chenault has served on the board of directors of Berkshire Hathaway Inc., a publicly-held multinational conglomerate holding company, since
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May 2020. Mr. Chenault also served on the board of directors of International Business Machines Corporation, a publicly-held multinational technology company, from October 1998 to February 2019, The Procter & Gamble Company, a publicly-held global consumer goods company, from April 2008 to February 2019, and Facebook, Inc., a publicly-held global technology company, from February 2018 to May 2020. Mr. Chenault received a Bachelor of Arts in history from Bowdoin College and a Juris Doctor from Harvard Law School. We believe that Mr. Chenault is qualified to serve as a member of our board of directors because of his extensive experience advising public companies as both a director and executive.
Belinda Johnson. Ms. Johnson served as our Chief Operating Officer from February 2018 through March 2020. Ms. Johnson held several roles at our company since joining in 2011, including General Counsel from December 2011 to July 2015 and Chief Business Affairs and Legal Officer from July 2015 to January 2018. Prior to joining Airbnb, she was Senior Vice President and Deputy General Counsel at Yahoo! Inc., a digital information platform, and served as General Counsel and Corporate Secretary to Broadcast.com, an internet broadcasting company. Ms. Johnson currently serves on the Board of Directors of PayPal Holdings, Inc., a publicly-held technology platform and digital payments company. Ms. Johnson received a Bachelor of Arts and Juris Doctor from the University of Texas. Ms. Johnson joined our board of directors in March 2020. We believe that Ms. Johnson is qualified to serve as a member of our board of directors because of the perspective and experience she brings as our former Chief Operating Officer.
Jeffrey Jordan. Mr. Jordan joined our board of directors in August 2011. Mr. Jordan serves as the managing partner of Andreessen Horowitz, a venture capital firm, which he joined as a general partner in July 2011. Prior to that, Mr. Jordan served as the Chief Executive Officer of OpenTable, Inc., the online restaurant-reservation service company, from 2007 to 2011. From 2004 to 2006, Mr. Jordan served as President of PayPal, Inc., a digital payments company, which was then owned by eBay, Inc. For five years prior to that, Mr. Jordan served as Senior Vice President and General Manager for eBay North America. From 1998 to 1999, Mr. Jordan served as Chief Financial Officer for Hollywood Entertainment Corporation, a video rental company, and then President of its subsidiary, Reel.com. Previously, Mr. Jordan served in various capacities at The Walt Disney Company for eight years, most recently as Senior Vice President and Chief Financial Officer of the Disney Store Worldwide. Before that he worked for The Boston Consulting Group. Mr. Jordan served as a member of the boards of directors of OpenTable, Inc. from 2007 until 2013, Pinterest, Inc. since 2011, and Accolade, Inc. since 2016. He is a member of the board of directors for several private companies including Maplebear Inc. (d/b/a Instacart) and OfferUp, Inc. Mr. Jordan received a Bachelor of Arts from Amherst College and a Master of Business Administration from the Stanford Graduate School of Business. We believe that Mr. Jordan is qualified to serve as a member of our board of directors because of his significant managerial experience at global technology companies.
Alfred Lin. Mr. Lin joined our board of directors in November 2012. Since October 2010, Mr. Lin has been a partner at Sequoia Capital Operations LLC (“Sequoia”), a venture capital firm. He represents Sequoia on our board as well as several other privately-held companies, including DoorDash, a food-delivery and local logistics platform, since 2014, and Houzz Inc., an online home designs and furnishings platform, since 2011. From 1996 to 1998, he served as Vice President of Finance and Administration of LinkExchange, a banner advertising exchange acquired by Microsoft Corporation (“Microsoft”). From June 1999 to December 2014, he served as Co-Founder and General Manager at Venture Frogs, LLC, a seed fund that invested in companies such as Ask Jeeves, OpenTable, Inc., Tellme Networks, Inc., and Zappos.com Inc. (“Zappos”). From January 2001 to June 2005, he served as Vice President of Finance and Business Development of Tellme Networks, a voice recognition services and platform company acquired by Microsoft. From January 2005 to December 2010, he served as Chairman of the Board and Chief Operating Officer of Zappos, an online retailer acquired by Amazon.com, Inc. Mr. Lin holds a Bachelor of Arts in Applied Mathematics from Harvard University and a Master of Science in Statistics from Stanford University. We believe that Mr. Lin is qualified to serve as a member of our
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board of directors because of his extensive experience in the venture capital industry, his business and leadership experience, and his knowledge of scaling technology companies.
Ann Mather. Ms. Mather joined our board of directors in August 2018. From September 1999 to April 2004, Ms. Mather served as Executive Vice President and Chief Financial Officer of Pixar, Inc., a computer animation studio, which was acquired by The Walt Disney Company in May 2006. Ms. Mather has served on the board of directors of Arista Networks, Inc., a publicly-held computer networking company, since 2013, Alphabet Inc. (the successor issuer to, and parent holding company of, Google, Inc.), a publicly-held global technology company, since 2005, Glu Mobile Inc., a publicly-held publisher of mobile games, since 2005, and Netflix, Inc., a publicly-held global TV and movie streaming company, since 2010. Ms. Mather is an independent trustee to the Dodge & Cox Funds board of trustees. Ms. Mather received a Master of Arts from Cambridge University. We believe that Ms. Mather is qualified to serve as a member of our board of directors because of her extensive experience advising the boards of global technology companies.
Family Relationships
There are no family relationships among any of our directors or executive officers.
Board of Directors
Our business and affairs are managed under the direction of our board of directors. The number of directors will be fixed by our board of directors, subject to the terms of our restated certificate of incorporation and amended and restated bylaws, which will become effective immediately prior to the completion of this offering. Our board of directors currently consists of nine directors, five of whom will qualify as “independent” under the Nasdaq Listing Rules.
Lead Director
Upon the completion of this offering, our corporate governance guidelines will provide that one of our independent directors will serve as the lead director at any time when the chair of our board of directors is a member of management or is otherwise not independent. Our board of directors has appointed Mr. Chenault to serve as our lead director. As lead director, Mr. Chenault will preside over all meetings of the board of directors at which the chair is not present, including any executive sessions of the independent directors, approve board of directors meeting schedules and agendas, and act as the liaison between the independent directors and our Chief Executive Officer and the chair of the board of directors.
Director Independence
Our board of directors has undertaken a review of the independence of each director. Based on information provided by each director concerning his or her background, employment, and affiliations, our board of directors has determined that Messrs. Chenault, Jordan, and Lin and Mmes. Ahrendts and Mather qualify as independent directors in accordance with the Nasdaq Listing Rules. Under the Nasdaq Listing Rules, the definition of independence includes a series of objective tests, such as that the director is not, and has not been for at least three years, one of our employees and that neither the director nor any of his or her family members has engaged in various types of business dealings with us. Our board of directors has made a subjective determination as to each independent director that no relationships exists that, in the opinion of our board of directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. Messrs. Blecharczyk, Chesky, and Gebbia, and Ms. Johnson
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are not considered independent by virtue of their positions as our executive officers and for Ms. Johnson, former Chief Operating Officer. In making these determinations, our board of directors reviewed and discussed information provided by the directors and us with regard to each director’s relationships as they may relate to us and our management, including the beneficial ownership of our capital stock by each director, and the transactions involving them described in the section titled “Certain Relationships and Related Party Transactions.”
Classified Board of Directors
In accordance with our restated certificate of incorporation, which will become effective immediately prior to the completion of this offering, our board of directors will be divided into three classes with staggered three-year terms. At each annual general meeting of stockholders, the successors to directors whose terms then expire will be elected to serve from the time of election and qualification until the third annual meeting following election. Our directors will be divided among the three classes as follows:
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the Class I directors will be , , and , and their terms will expire at the annual meeting of stockholders to be held in 2021; |
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the Class II directors will be , , and , and their terms will expire at the annual meeting of stockholders to be held in 2022; and |
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the Class III directors will be , , and , and their terms will expire at the annual meeting of stockholders to be held in 2023. |
We expect that any additional directorships resulting from an increase in the number of directors will be distributed among the three classes so that, as nearly as possible, each class will consist of one-third of the directors. The division of our board of directors into three classes with staggered three-year terms may delay or prevent a change of our management or a change in control.
Role of the Board of Directors in Risk Oversight Process
Risk assessment and oversight are an integral part of our governance and management processes. Our board of directors encourages management to promote a culture that incorporates risk management into our corporate strategy and day-to-day business operations. Management discusses strategic and operational risks at regular management meetings and conducts specific strategic planning and review sessions during the year that include a focused discussion and analysis of the risks facing us. Throughout the year, senior management and the audit, risk and compliance committee review these risks with the board of directors at regular board meetings as part of management presentations that focus on particular business functions, operations, or strategies, and presents the steps taken by management to mitigate or eliminate such risks.
Our board of directors administers this oversight function directly, as well as through various standing committees of our board of directors that address risks inherent in their respective areas of oversight. While our board of directors is responsible for monitoring and assessing strategic risk exposure, our audit, risk and compliance committee is responsible for overseeing our major financial and operational risk exposures and the steps our management has taken to monitor and control these exposures. The chair of the audit, risk and compliance committee also approves or disapproves any related party transactions, and all such approved transactions must be ratified by the audit, risk and compliance committee during the meetings held at least once during each fiscal quarter. Our nominating and corporate governance committee monitors the effectiveness of our corporate governance guidelines. Our leadership
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development, belonging and compensation committee assesses and monitors whether any of our compensation policies and programs has the potential to encourage excessive risk-taking.
Committees of the Board of Directors
Our board of directors has established an audit, risk and compliance committee, a leadership development, belonging and compensation committee, a nominating and corporate governance committee, and a stakeholder committee. Our board of directors may establish other committees to facilitate the management of our business. The composition and functions of each committee are described below. Members serve on these committees until their resignation or until otherwise determined by our board of directors. Each of our audit, risk and compliance committee, leadership development, belonging and compensation committee, and nominating and corporate governance committee have adopted a written charter that satisfies the applicable rules and regulations of the SEC and the Nasdaq Listing Rules, which we will post on our website at www.airbnb.com. Information contained on, or that can be accessed through, our website does not constitute part of this prospectus, and the inclusion of our website address in this prospectus is an inactive textual reference only. Investors should not rely on any such information in deciding whether to purchase our Class A common stock.
Audit, Risk and Compliance Committee
Our audit, risk and compliance committee oversees our corporate accounting and financial reporting process as well as reviews our risk management and exposures. Among other matters, the audit, risk and compliance committee:
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appoints and oversees our independent registered public accounting firm; |
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evaluates the independent registered public accounting firm’s qualifications, independence, and performance; |
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determines the engagement, compensation, and retention of the independent registered public accounting firm; |
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reviews and approves the scope of the annual audit and pre-approves the audit and non-audit fees and services; |
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reviews and discusses the design, implementation, adequacy and effectiveness of internal control over financial reporting with management and the independent registered public accounting firm; |
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the chair of the audit, risk and compliance committee reviews and approves all related party transactions on an ongoing basis and all such approved transactions must be ratified by the audit, risk and compliance committee during the meetings held at least once during each fiscal quarter; |
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establishes procedures for the receipt, retention, and treatment of any complaints received by us regarding accounting, internal accounting controls, or auditing matters; |
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discusses with management and the independent registered public accounting firm the results of the annual audit and the review of our quarterly financial statements; |
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approves the retention of the independent registered public accounting firm to perform any proposed permissible non-audit services; |
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discusses with management on a periodic basis, or as appropriate, policies and procedures with respect to risk assessment and risk management; |
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establishes processes with respect to risk assessment, risk management and risk oversight, including responsibility for oversight of risks and exposures associated with financial matters, particularly financial reporting, tax, accounting, disclosure, internal control over financial reporting, investment guidelines and credit and liquidity matters, programs, plans and policies relating to legal and regulatory compliance and strategy, and operational infrastructure, particularly reliability, business continuity, capacity, security, and data privacy, including cybersecurity; |
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is responsible for reviewing our financial statements and our management’s discussion and analysis of financial condition and results of operations to be included in our annual and quarterly reports, including the audit, risk and compliance committee report for inclusion in the annual proxy statements, to be filed with the SEC; |
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reviews earnings press releases, as well as financial information and earnings guidance; |
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investigates any reports received through the ethics helpline and reports to the board of directors periodically with respect to any information received through the ethics helpline and any related investigations; and |
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reviews the appointment of our internal auditor and oversees our internal audit department; |
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reviews and discusses with management and the independent registered public accounting firm critical accounting policies; |
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reviews the chief executive officer and chief financial officer disclosure and certifications under Section 302 and 906 of the Sarbanes-Oxley Act; |
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reviews, evaluates and recommends to our board of directors, if appropriate, any contemplated waivers of provisions of the code of ethics involving our executive officers and directors; |
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the Company’s Chief Compliance Officer will meet with the audit, risk and compliance committee or the chair, if requested, to provide a report on compliance matters; and |
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reviews the audit, risk and compliance committee charter and the audit, risk and compliance committee’s performance on an annual basis. |
Our audit, risk and compliance committee consists of Messrs. Jordan and Lin and Ms. Mather. Our board of directors has determined that all members are independent under the Nasdaq Listing Rules and Rule 10A-3(b)(1) of the Exchange Act. The chair of our audit, risk and compliance committee is Ms. Mather. Our board of directors has determined that Ms. Mather is an audit committee financial expert as such term is currently defined in Item 407(d)(5) of Regulation S-K. Our board of directors has also determined that each member of our audit, risk and compliance committee can read and understand fundamental consolidated financial statements, in accordance with applicable requirements.
Leadership Development, Belonging and Compensation Committee
Our leadership development, belonging and compensation committee oversees policies relating to the compensation and benefits of our executive officers and directors, and reviews policies, programs, and initiatives focusing on leadership development and belonging. Among other matters, the leadership development, belonging and compensation committee:
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reviews and approves the corporate goals and objectives relevant to compensation of our Chief Executive Officer, evaluates the performance of our Chief Executive Officer in light of these goals and |
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| objectives and, based upon this evaluation (either alone or, if directed by the board of directors, in conjunction with a majority of the independent directors), approves our Chief Executive Officer’s compensation; |
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reviews and sets or makes recommendations to the Board regarding the compensation of our executive officers other than our Chief Executive Officer; |
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reviews and makes recommendations to the board of directors regarding director compensation; |
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reviews and approves or makes recommendations to our board of directors regarding our incentive compensation plans and arrangements, retirement plans, and equity-based plans; |
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reviews and discusses with management the Compensation Discussion and Analysis in our annual report on Form 10-K; |
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reviews and discusses annually with management and our board of directors our compensation philosophy and practices, including executive and employee incentive compensation plans and arrangements, to determine whether they are aligned with our goal of serving all stakeholders over the long term; |
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reviews and discusses annually with management the risks arising from our compensation philosophy and practices to determine whether they encourage excessive risk taking; |
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reviews policies, programs, and initiatives focusing on leadership development and belonging; and |
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reviews the leadership development, belonging and compensation committee charter and the leadership development, belonging and compensation committee’s performance on an annual basis. |
Our leadership development, belonging and compensation committee consists of Messrs. Chenault and Lin and Ms. Ahrendts. Our board of directors has determined that all members are independent under the Nasdaq Listing Rules and are “non-employee directors” as defined in Rule 16b-3 promulgated under the Exchange Act. The chair of our leadership development, belonging and compensation committee is Mr. Lin.
Nominating and Corporate Governance Committee
The nominating and corporate governance committee is responsible for making recommendations to our board of directors regarding candidates for directorships and the size and composition of our board of directors. In addition, the nominating and corporate governance committee is responsible for overseeing our corporate governance policies and making recommendations to our board of directors concerning governance matters. Among other matters, the nominating and corporate governance committee:
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reviews and makes recommendations to our board of directors regarding director independence determinations; |
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reviews, evaluates, and, as applicable, proposes and approves, stockholder recommended nominees for election to our board of directors; |
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reviews annually the nominating and corporate governance committee structure and membership; |
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oversees the annual self-evaluations of our board of directors and management; |
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reviews and makes recommendations to our board of directors regarding Section 16 officer determinations; and |
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reviews the nominating and corporate governance committee charter and the nominating and corporate governance committee’s performance on an annual basis. |
Our nominating and corporate governance committee consists of Messrs. Chenault and Jordan and Ms. Mather. Our board of directors has determined that all members of the nominating and corporate governance committee are independent under the Nasdaq Listing Rules. The chair of our nominating and corporate governance committee is Mr. Jordan.
Stakeholder Committee
The purpose of the stakeholder committee is to assist our board of directors in considering and monitoring the interests of our key stakeholders, which include guests, hosts, the communities in which we operate, employees, and shareholders. Among other matters, the stakeholder committee:
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engages with management regarding our stakeholders; |
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reviews our progress and performance with respect to our principles for serving our stakeholders; |
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advises management and the board regarding initiatives or matters pertaining to our stakeholders; |
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reviews our stakeholder principles and recommends to the board any changes the committee deems appropriate; |
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engages with our stakeholders from time to time; |
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advises the board regarding administration of the Host Endowment Fund; |
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provides advice, reports, and recommendations to the board regarding these matters; and |
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reviews the stakeholder committee charter and the stakeholder committee’s composition and performance on a periodic basis. |
Our stakeholder committee is advisory in nature. It consists of Messrs. Blecharczyk, Chesky, and Gebbia and Mmes. Ahrendts and Johnson. The chair of our stakeholder committee is Ms. Johnson.
Leadership Development, Belonging and Compensation Committee Interlocks and Insider Participation
None of the members of the leadership development, belonging and compensation committee is currently, or has been at any time, one of our executive officers or employees. None of our executive officers currently serves, or has served during the last year, as a member of the board of directors or leadership development, belonging and compensation committee of any entity that has one or more executive officers serving as a member of our board of directors or on our leadership development, belonging and compensation committee.
Airbnb Code of Ethics
We have adopted a written code of ethics that applies to all of our directors, officers, and employees, including those officers responsible for financial reporting. The full text of our code of ethics will be posted on our website at www.airbnb.com. Any substantive amendment to, or waiver of, a provision of the code of ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions will be disclosed on our website. Information contained on, or that can be accessed through, our website does not constitute part of this prospectus,
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and the inclusion of our website address in this prospectus is an inactive textual reference only. Investors should not rely on any such information in deciding whether to purchase our Class A common stock.
Limitation on Liability and Indemnification Matters
Our restated certificate of incorporation and our amended and restated bylaws, both of which will become effective immediately prior to the completion of this offering, among other things, limit our directors’ liability, and provide that we may indemnify our directors and officers to the fullest extent permitted under the Delaware General Corporation Law. As authorized by the Delaware General Corporation Law, our restated certificate of incorporation provides that to the fullest extent permitted by Delaware law, our directors will not be personally liable to us or our stockholders for monetary damages for breach of fiduciary duty as directors, except for liability for any:
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transaction from which the director derives an improper personal benefit; |
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act or omission not in good faith or that involves intentional misconduct or a knowing violation of law; |
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unlawful payment of dividends or unlawful redemption or repurchase of shares in violation of Delaware law; or |
| • | breach of the director’s duty of loyalty to the corporation or its stockholders. |
These limitations of liability do not apply to liabilities arising under federal securities laws and do not affect the availability of equitable remedies such as injunctive relief or rescission.
Our amended and restated bylaws provide that we will, in certain situations, indemnify our directors and officers and may indemnify other employees and other agents, to the fullest extent permitted by law. Any indemnified director and officer is also entitled, subject to certain limitations, to advancement, direct payment, or reimbursement of expenses (including attorneys’ fees) in advance of the final disposition of the proceeding except that such director or officer will undertake to repay such advances if it is ultimately determined that such person is not entitled to indemnification.
The Delaware General Corporation Law provides that to the extent a present or former director or officer of the corporation has been successful on the merits or otherwise in defense of any generally indemnifiable action, suit, or proceeding, that such person will be indemnified by the corporation against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection with such action, suit, or proceeding. For any acts or omissions occurring after December 31, 2020, the officers referenced in the immediately preceding sentence could be more limited as a matter of Delaware law.
In addition, we have entered, and intend to continue to enter, into separate indemnification agreements with our directors and officers. Subject to certain exceptions, these indemnification agreements, among other things, require us to indemnify such directors and officers to the fullest extent permitted by Delaware law for certain expenses and against certain liabilities, including, among other things, attorneys’ fees, judgments, fines, and settlement amounts actually and reasonably paid or incurred by such director or officer in any action, suit, or proceeding arising out of their services as a director or officer, or any other company or enterprise to which the person provides services at our request. Subject to certain exceptions, these indemnification agreements will also require us to advance certain expenses (including attorneys’ fees and disbursements) actually and reasonably paid or incurred by such director and officer in advance of the final disposition of the action, suit or proceeding.
We also maintain a directors’ and officers’ insurance policy pursuant to which our directors and officers are insured against liability for actions taken in their capacities as directors and officers.
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We believe that these provisions in our restated certificate of incorporation and amended and restated bylaws and these indemnification agreements are necessary to attract and retain qualified persons as directors and officers.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers, or control persons, in the opinion of the SEC, such indemnification is against public policy, as expressed in the Securities Act and is therefore unenforceable.
Nominating Agreement
We and Messrs. Blecharczyk, Chesky, and Gebbia, referred to as our founders in this prospectus, will enter into a Nominating Agreement effective prior to the completion of this offering (“Nominating Agreement”), under which we and the founders are required, upon the terms set forth in the Nominating Agreement, to (i) include our founders in the slate of nominees nominated by our board of directors for the applicable class of directors for election by our stockholders, and (ii) include such nomination of our founders in our proxy statement. In addition, we must use reasonable efforts to, and the founders must take all necessary action to, recommend in favor of each founder’s election as a director, and to solicit proxies or consents in favor of their election. The obligations with respect to each founder will terminate upon the earliest to occur of (1) such founder’s resignation from our board of directors, (2) such founder’s death or disability, (3) such founder’s removal from our board of directors for cause, (4) the expiration of such founder’s term if such founder has given notice of his intention not to stand for re-election, and (5) the date upon which the number of shares of our common stock owned by such founder falls below ten percent of the number of shares of common stock owned by such founder as of September 30, 2020. The Nominating Agreement will remain in effect until the earliest of (a) the date on which our and the founders’ obligations have terminated with respect to all of the founders, (b) the time at which all outstanding shares of Class B common stock automatically convert to Class A common stock, and (c) immediately prior to a change of control. The conversion of our Class B common stock to Class A common stock is provided for in our restated certificate of incorporation, see section titled “Description of Capital Stock — Class A, B, C and H Common Stock — Conversion.”
Founder Voting Agreement
Our founders will enter into a Voting Agreement effective prior to the completion of this offering (“Founder Voting Agreement”), under which each founder has agreed, upon the terms set forth in the Voting Agreement, to vote all his shares for the election of each founder to our board of directors, and to vote against their removal. Pursuant to the Founder Voting Agreement, each founder granted a voting proxy to the other founders, to be effective upon death or disability, and if there are two remaining founders who are not disabled, such voting proxy will be apportioned between such founders based on their relative voting power. The Founder Voting Agreement will be in effect until: (i) with respect to each founder, upon the conversion of such founder’s shares to Class A common stock in connection with his death or disability (which will occur automatically upon the nine month anniversary of any such death or disability), and (ii) with respect to all founders, the time at which all outstanding shares of Class B common stock automatically convert to Class A common stock. The conversion of our Class B common stock to Class A common stock is provided for in our restated certificate of incorporation, see section titled “Description of Capital Stock — Class A, B, C and H Common Stock — Conversion.”
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Compensation Discussion and Analysis
Overview
This section explains the guiding principles and practices upon which our executive compensation program is based and the compensation paid to our “named executive officers.” Where relevant, the discussion below also reflects certain contemplated changes to our compensation programs that we intend to implement following the effectiveness of the registration statement of which this prospectus forms a part. For 2019, our named executive officers were:
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Brian Chesky, President and Chief Executive Officer; |
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Dave Stephenson, Chief Financial Officer; |
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Belinda Johnson, Former Chief Operating Officer; |
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Aristotle Balogh, Chief Technology Officer; and |
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Greg Greeley, Former President of Homes. |
Mr. Stephenson was appointed our Chief Financial Officer effective January 7, 2019. Ms. Johnson stepped down from her position as Chief Operating Officer and joined our board of directors effective March 1, 2020. Mr. Greeley resigned from his position as our President of Homes effective August 1, 2020, when he transitioned into a consulting role.
In 2019, we established a set of guiding principles for our compensation program, intended to ensure a strong link to our strategy and culture. These are described in the “ — Executive Compensation Philosophy and Objectives” subsection below.
2019 Compensation Highlights
The focus of this Compensation Discussion and Analysis is on 2019 compensation decisions and outcomes. The 2019 executive compensation program was designed to be consistent with our guiding principles, as summarized below:
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No changes to base salaries for our named executive officers continuing from 2018. |
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Our semi-annual bonus program (in which all of our named executive officers participate other than Mr. Chesky) measured performance across a number of key operational priorities that are clear drivers of company performance and align with our focus on continued long-term value creation for all of our stakeholders. For 2019, there were two performance periods corresponding to the first and second halves of the calendar year. The maximum total bonus payout for 2019 was set at 100% of target, with the payout target capped at 50% of the annual target for both the first and second halves of 2019. The actual payouts were 70% of target and 75% of target for the first and second halves of the year, respectively, based on our achievement of pre-established performance measures resulting in a total payout for the year of 72.5% of target. |
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We emphasize equity compensation for our named executive officers which we believe demonstrates a longer-term, ownership orientation. |
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We provided a hiring bonus and new hire equity award for Mr. Stephenson upon his commencement of employment in January 2019. The new-hire compensation was calibrated to ensure we were able to secure his employment and to create strong ownership and alignment with our strategy and mission. |
Preview of 2020 Compensation Decisions
2020 Response to Crisis
In early 2020, as COVID-19 disrupted travel, our business declined significantly. Due to this crisis, we made the difficult decision to reduce the size of our workforce and made a number of changes to our executive compensation program, as summarized below:
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Mr. Chesky declined any salary, and salaries for our other named executive officers were voluntarily reduced by 50% for a six-month period, effective April 1, 2020. |
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We further evolved our approach to short-term incentive design to more comprehensively and directly reflect our most critical stakeholder priorities. The program was set to include multiple metrics tied to each of our five stakeholders: hosts, guests, communities, employees, and shareholders. Due to the outbreak of COVID-19, we suspended the bonus program for the first half of 2020 for all executives and employees, and resumed the bonus program in the second half of 2020 in line with the recovery of our business and consistent with our compensation philosophy. |
| • |
We delayed our annual equity grants to executives from March 2020 to July 2020. In addition, in response to the significant decrease in the fair market value of our common stock in the second quarter of 2020, we determined grant sizes based on a premium to the per share fair value of our stock on the grant date resulting in a smaller number of shares being awarded to our executives when compared to the grant sizes that would have been awarded using our historical methodology of grants based on the fair value of our stock on the grant date. Specifically, the number of options and RSUs granted were determined by converting the annual target grant values using a value that was 27.3% higher than the fair value on the date of grant. The exercise price for options was also set at a 27.3% premium to the fair market value of our common stock on the date of grant. Accordingly, these actions resulted in grants covering 27.3% fewer shares than our historical approach would have otherwise produced. |
Founder Compensation Changes
In preparing for the initial public offering of our common stock, in November 2020, our board of directors made significant changes intended to provide a meaningful incentive to our founders for their continued leadership of our company.
Brian Chesky
Our board of directors worked closely with its compensation consultant in an effort to design a compensation construct for Brian Chesky, our chief executive officer, that would align with our vision of a 21st century company that is committed to the long-term interests of all stakeholders, provide flexibility to the changing needs and priorities of our business and stakeholders, require high levels of performance to achieve meaningful value while not encouraging short-term gains through risk taking, incentivize long term performance beyond typical market pay constructs, promote transparency with simple design and full disclosure, and be equitable and justifiable to Mr. Chesky and all of our stakeholders. In designing the compensation program for Mr. Chesky, our board of directors was also cognizant of Mr. Chesky putting
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plans in place to contribute shares of our common stock worth over $100 million at the time of the contribution to support the Host Endowment Fund and his intention to donate the net proceeds from the initial equity compensation we provide to community, philanthropic and charitable causes. Our board also considered Mr. Chesky’s sustained and unparalleled leadership since the inception of Airbnb, his substantial vested ownership of our common stock, and the comparatively modest level of cash compensation he has received from us, and that his most recent equity grant from us occurred in 2014.
Our board of directors determined to provide 100% of Mr. Chesky’s direct compensation in the form of equity incentives in lieu of any cash, including base salary and short-term cash incentives. Under this approach, and based on the considerations described above, the board of directors reduced Mr. Chesky’s base salary from $110,000 to $1, set his target bonus at $0, and granted him a long-term, multi-year equity award comprised of 12,000,000 RSUs (the “Multi-Year Award”). The Multi-Year Award will only vest, if at all, in the event the price of our Class A common stock reaches stock price hurdles that are significantly in excess of the Company’s current valuation, over a period of ten years, subject to Mr. Chesky’s continued employment as our chief executive officer. Other than an amount necessary to cover taxes, shares underlying the RSUs will not be issued until two years after the RSUs vest.
The board of directors believes that the Multi-Year Award is appropriate because it reflects a commitment to advancing the long-term interests of all stakeholders and is structured so that meaningful value may only be realized upon the achievement of sustained and significant high performance levels as described in more detail below. Under Mr. Chesky’s leadership over the last decade, the company’s revenues have grown to $4.8 billion in 2019, and the board of directors believes that it is important to continue to retain and motivate Mr. Chesky to lead the company over the next decade based on this history of exceptional performance. Our board of directors intends for the Multi-Year Award to be the exclusive equity award that Mr. Chesky receives through the 10th anniversary of the date of grant. The size of the Multi-Year Award, which has a grant-date fair value of approximately $120.0 million and implied yearly earnings potential of approximately $12.0 million per year over the ten years the Multi-Year Award is eligible to vest, was determined in light of the median annualized long-term incentive values from the most recent competitive peer group study of approximately $19 million per year. As noted above, Mr. Chesky intends to donate the net proceeds from this award to community, philanthropic and charitable causes.
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The Multi-Year Award is divided into ten tranches, with one tranche first becoming eligible to vest upon each of the first ten anniversaries of the grant date (each, a “Vesting Eligibility Date”), as set forth in the table below. Each tranche will vest on the later of the applicable Vesting Eligibility Date or, starting on the first anniversary of the date of grant, the date the 60 trading day trailing average closing per share price of the company’s Class A common stock exceeds the stock price hurdle, subject to Mr. Chesky’s continued employment as our chief executive officer. Shares issuable in respect of vested RSUs will be issued to Mr. Chesky on the second anniversary of the vesting date, except for an amount necessary to cover any taxes due in connection with the vesting, which will be withheld to cover, or issued to offset, such taxes. Any RSUs subject to the Multi-Year Award that have not vested by the tenth anniversary of the grant date will be forfeited.
| Tranche | Vesting Eligibility Date | Number of RSUs | Stock Price Hurdle | |||
| 1 | November 10, 2021 |
1,200,000 | $125.00 | |||
| 2 | November 10, 2022 |
1,200,000 | $165.00 | |||
| 3 | November 10, 2023 |
1,200,000 | $205.00 | |||
| 4 | November 10, 2024 |
1,200,000 | $245.00 | |||
| 5 | November 10, 2025 |
1,200,000 | $285.00 | |||
| 6 | November 10, 2026 |
1,200,000 | $325.00 | |||
| 7 | November 10, 2027 |
1,200,000 | $365.00 | |||
| 8 | November 10, 2028 |
1,200,000 | $405.00 | |||
| 9 | November 10, 2029 |
1,200,000 | $445.00 | |||
| 10 | November 10, 2030 |
1,200,000 | $485.00 |
Each stock price hurdle will be equitably adjusted to reflect any stock splits, stock dividends or other restructurings impacting our Class A common stock. In the event of Mr. Chesky’s termination of employment effected by the company without “cause” or by him for “good reason” (each as defined in Mr. Chesky’s offer letter), the Multi-Year Award will remain outstanding and eligible to vest for six months following the date of termination. In addition, in the event of an acquisition of the company, stock price performance for purposes of the Multi-Year Award will be measured based on the price per share to be received by securityholders in connection with the acquisition, using linear interpolation if the price is between tranches, any amount for which the stock price hurdle has not been met will be forfeited, and, if assumed by the acquirer, the terms of the award would continue provided that any tranches, or portion of a tranche, for which the stock price hurdle has been met will remain eligible to vest subject to Mr. Chesky’s continued service to the company or the acquirer, provided that any tranches for which the stock price hurdle has been met will vest in full upon Mr. Chesky’s termination without cause or resignation for good reason within 12 months following the acquisition. If not assumed by an acquirer, vesting would be accelerated for any tranches for which the stock price hurdle has been met.
Joseph Gebbia and Nathan Blecharczyk
The board of directors determined to make no changes to the current annual base salaries and target bonus opportunities for Messrs. Gebbia and Blecharczyk, which, consistent with the methodologies used for other executive officers, were set at $400,000 and 60% of base salary, respectively. Because Messrs. Gebbia and Blecharczyk were last granted equity awards in 2014 that finished vesting in 2017, the board of directors approved the grant of new equity awards to each of them. As in the case of Mr. Chesky, our board of directors believes that the leadership of Messrs. Gebbia and Blecharczyk from the founding of the company has been critical to the company’s success, and it believes it is similarly important to continue to retain and motivate each of them. Each of Messrs. Gebbia and Blecharczyk received an “annual
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award” of RSUs and options and a “gap equity award” of RSUs and options, the sizes of which were determined based on awards Messrs. Gebbia and Blecharczyk would have received had they historically participated in our executive program.
The annual award granted to each executive covered 74,664 RSUs and options to purchase 186,660 shares of our Class A common stock and was intended to approximate the annual grant the executives otherwise would have received in 2020. The annual RSU award vests in 16 substantially equal quarterly installments measured from February 25, 2020, and the annual option award vests in 48 substantially equal monthly installments measured from February 25, 2020, in each case, subject to continued employment through each applicable vesting date, consistent with standard time-based vesting for the company’s 2020 annual grants. While our board of directors determined that the fair market value of our common stock on the date of grant was $35.81, each annual option award was granted with a greater than fair market exercise price equal to $40.18 per share, consistent with the exercise price of similar options granted to our executives earlier in 2020.
The gap award granted to each executive covered 223,401 RSUs and options to purchase 558,503 shares of our Class A common stock and was intended to address the gap in vesting and retention value from the lack of equity award grants since 2014. The gap RSU award vests in 16 substantially equal quarterly installments commencing on November 25, 2020, and the gap option award vests in 48 substantially equal monthly installments commencing on November 25, 2020, in each case, subject to continued service, as either an employee or member of our board of directors, through each applicable vesting date. Each gap option award was also granted with a greater than fair market exercise price equal to $40.18 per share.
2019 Compensation
Executive Compensation Philosophy and Objectives
We believe that for us to be successful we must hire and retain executives that can continue to drive global growth in our business, operate with a holistic perspective in the service of all stakeholders, and create a highly creative, inclusive environment. Our executive compensation programs were designed to motivate, reward, attract, and retain high-caliber leaders and seek to align compensation with our stakeholder priorities and company performance. In 2019, our board of directors engaged with Semler Brossy Consulting Group (“Semler Brossy”), an independent compensation consultant, to formalize a set of principles to guide our compensation program design and decisions. To summarize these principles:
| • |
Long-term alignment. Performance measurement, incentive goals, and individual performance assessments all clearly align with and support our long-term vision and alignment with stakeholders. They encourage a long-term timeframe, while acknowledging the competitive talent market realities. |
| • |
Ownership. We believe in the power of an owner’s mindset. Compensation programs encourage employees and executives to think and act like owners of their work and careers, their responsibility to all stakeholders, and Airbnb. |
| • |
Alignment across stakeholders. Our program design strives to balance interests and ensure alignment across all stakeholders. We are committed to directly tying short-term cash incentives to our performance against near-term stakeholder priorities. We believe this approach will lead to sustained value for all stakeholders over the long term. |
| • |
Performance culture. Our pay programs support a culture of accountability and performance through the use of stretch company-based metrics in the short-term cash incentive plan and differentiated annual equity awards based on executive performance and contribution. |
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| • |
Pay equity. We are committed to the principle of pay equity and seek to be a leader on this front. We consistently monitor pay outcomes for any inequities and aggressively address any issues. |
| • |
Competitiveness. We are fortunate to have a mission that is attractive to a talented and diverse array of leaders. We want executives to come and stay with Airbnb because of our mission. However, we recognize that compensation needs to be compelling and competitive to attract and retain the talent necessary to meet our objectives. |
| • |
Transparency. We will continue to provide a level of clarity and transparency about our compensation programs, frameworks and outcomes that reinforces our commitment to pay equity, empowers our employees, and fosters belonging. |
Compensation and Governance Practices
We have established a number of policies and practices, listed below, to align the program with these principles and establish strong compensation governance:
What We Do
| Practice | Description | |
| Link Between Pay and Stakeholder Priorities |
Performance measures for our bonus plan extend beyond traditional financial and operational goals. We directly tie pay outcomes to our most critical priorities, with the objective of creating alignment and accountability to all stakeholders. | |
| Emphasis on Equity-Based Compensation |
We believe that sustained, long-term stock price performance requires that we effectively serve all stakeholders. As such, we seek to prioritize equity-based compensation and provide a significant portion of compensation in the form of stock options and RSUs. | |
| Longer-Term Delivery | Equity compensation is structured to vest over a minimum period of four years, subject to limited exceptions. Stock options have a maximum 10-year term while our RSUs have a 7-year term. | |
| Independent Compensation Consultant |
Our board of directors engages an independent compensation consulting firm that provides us with no other services. |
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What We Don’t Do
| Practice | Description | |
| No Hedging of Company Stock | Executive officers and members of the board of directors may not directly or indirectly engage in transactions intended to hedge or offset the market value of Airbnb stock owned by them. | |
| No Tax Gross-ups | We do not provide tax gross-ups to our executive officers, other than nominal amounts provided to all employees in connection with Airbnb travel credits or in limited circumstances, such as in connection with relocations. | |
| No “Single Trigger” Change in Control Provisions |
Equity awards do not accelerate in connection with a change in control, unless the awards are not assumed or substituted. | |
| No Special Benefit Plans for Executives |
We do not have any special benefit or retirement plans that are exclusive to the executive population. | |
| No Excessive Perquisites | We do not provide excessive perquisites for executives. |
Determination of Compensation
Role of the board of directors and leadership development, belonging and compensation committee. Historically, our board of directors has been responsible for overseeing all aspects of our executive compensation programs, including executive salaries, payouts under our semi-annual bonus plan, the size and structure of equity awards, and any executive perquisites. The board of directors also discusses and makes decisions with regards to our Chief Executive Officer’s compensation. Following the consummation of this offering, we expect that our board of directors will continue to be responsible for determining the compensation of our Chief Executive Officer, and the leadership development, belonging and compensation committee will generally oversee our executive compensation program.
Role of compensation consultant. The board of directors has, and following this offering, the leadership development, belonging and compensation committee will have the authority to engage its own advisors to assist in carrying out its responsibilities. In June 2019, the board of directors engaged Semler Brossy, who provided guidance regarding the amount and types of compensation that we provide to our executives, how our compensation practices compare to the compensation practices of other companies, including with respect to a peer group of companies developed in consultation with Semler Brossy, and other compensation-related matters. Semler Brossy reports directly to the board of directors, although Semler Brossy may meet with members of management for the purposes of gathering information on proposals that management may make to the board of directors. Semler Brossy does not provide any services to us other than the services provided to the board of directors.
Role of management. In setting compensation for 2019, our Chief Executive Officer and Vice President of Global Employee Experience worked closely with the board of directors in managing our executive compensation program and attended board of directors meetings. Our Chief Executive Officer made recommendations to the board of directors regarding compensation for our executive officers (other than himself) because of his daily involvement with our executive team. No executive officer participated directly in the final deliberations or determinations regarding his or her own compensation package.
Use of comparative market data. The board of directors assesses the competitiveness of each element of the executive officers’ total direct compensation, against the executive pay peer group, as discussed below.
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In developing this peer group, the board of directors took into account a number of factors, including:
| • |
Actual experience in the talent market (companies from which we source and potentially lose executive talent); |
| • |
Scale and complexity (using revenue and valuation); |
| • |
Geography (preference for companies with significant presence in the San Francisco Bay Area); and |
| • |
Company business characteristics (for example, comparably sized high-growth technology companies, technology-oriented gig economy companies, marketplace platforms, global operations, and other high growth indicators). |
While the board of directors does not establish compensation levels solely based on a review of competitive data, it believes such data is a meaningful input to our compensation policies and practices in order to attract and retain qualified executive officers. The board of directors also considers a number of other factors, including: company performance relative to our stakeholder priorities, each executive’s impact and criticality to our strategy and mission, relative scope of responsibility and potential, individual performance and demonstrated leadership, and internal equity pay considerations.
After considering the above factors, our board of directors approved the following peer group for 2019 compensation decisions:
| Peer Group for 2019 Pay Decisions | ||
| Adobe |
Microsoft | |
| Alphabet |
PayPal Holdings | |
| Amazon |
Salesforce | |
| Apple |
Square | |
| Box |
Tripadvisor | |
| eBay |
||
| Expedia Group |
VMware | |
| |
Workday | |
| Intuit |
Yelp |
At the end of 2019, our compensation consultants presented to our board of directors a revised compensation peer group for 2020 compensation decisions. This peer group included the following changes aimed at ensuring the group continued to reflect the broader talent market and the evolving competitive landscape:
| • |
Added: Netflix, Uber, Lyft, ServiceNow, Pinterest, Slack, and Zoom Video Communications |
| • |
Removed: Box, VMware, and Yelp |
For 2020 pay decisions, the board of directors used a subset of the full peer group as the primary reference point. This subset excluded the five largest peers: Amazon, Alphabet, Apple, Facebook, and Microsoft. While these technology bellwether companies are clear and demonstrated talent competitors and we believe it is important to monitor their compensation practices, they were removed from the primary competitive comparison given their outsized scale.
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Elements of Our Executive Compensation Program
The primary elements of our named executive officers’ compensation and a brief description of each are:
| Element | Description | |
| Base Salary |
Attracts and retains talented executives, recognizes individual roles and responsibilities and provides stable income | |
|
Semi-Annual Performance-Based Incentive Compensation |
Semi-annual performance bonuses directly tied pay to key strategic priorities, which we believe will lead to sustained value for all stakeholders over the long term. | |
| Equity-Based Long-Term Incentive Compensation |
Equity compensation, provided in the form of stock options and RSUs, reinforces the importance of a long-term, ownership orientation, creates alignment with our stakeholders, and promotes retention. Equity-based compensation is the most significant portion of compensation for our executives. |
In addition, our named executive officers are eligible to participate in our health and welfare programs and our 401(k) plan on the same basis as our other employees. We also provide certain limited severance benefits, limited perquisites, and other benefits, which aid in attracting and retaining executive talent. Each of these elements of compensation for 2019 is described further below.
Base Salary
The base salary of each named executive officer, other than Mr. Chesky, is intended to align with the scope and complexity of their roles, their relative capabilities, and competitive market realities. Due to Mr. Chesky’s role as co-founder of the company and in consultation with Mr. Chesky, for 2019, the board of directors left unchanged his long-standing base salary of $110,000 per year, far below the base salary paid to the majority of similarly-situated executive officers at our peer group companies.
In 2019, there were no increases in base salaries for Mr. Chesky, Ms. Johnson, Mr. Balogh, or Mr. Greeley. Mr. Stephenson’s base salary was established in connection with his commencement of employment in 2019 and reflected arms’ length negotiations with him and the consideration of competitive market data by the board of directors. Our named executive officers’ 2019 base salaries were as follows:
| Named Executive Officer | 2019 Base Salary ($) | |||
| Brian Chesky |
110,000 | |||
| Dave Stephenson |
600,000 | |||
| Belinda Johnson |
600,000 | |||
| Aristotle Balogh |
600,000 | |||
| Greg Greeley |
600,000 |
Our named executive officers did not receive any base salary increases for 2020. Further, in response to the challenges to our business resulting from the COVID-19 pandemic in 2020, Mr. Chesky declined any salary, and the salaries for our other named executive officers were voluntarily reduced by 50%, effective April 1, 2020 through September 30, 2020. In November 2020, Mr. Chesky’s base salary was reduced to $1.
Cash Incentive Compensation
Approach to Short-Term Cash Incentive
Our short-term cash incentive plan has been designed to attract and retain key talent and reward executives based on performance against key strategic priorities. The incentive plan covers performance beyond company financial performance and includes broader operational and stakeholder priorities. The 2019 semi-annual cash incentive program (“2019 Bonus Plan”) focused on (i) foundational priorities including safety, platform, public-company readiness, team execution and (ii) business priorities including homes growth and quality, experiences growth and quality, and China growth and quality.
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For 2020, we further evolved our approach to short-term incentive design to more comprehensively and directly reflect our most critical stakeholder priorities. The program was set to include multiple metrics tied to each of our five stakeholders: hosts, guests, communities, employees, and shareholders. Due to the outbreak of COVID-19, we eliminated the cash incentive program for the first half of 2020 and will evaluate with our board of directors whether to implement a cash incentive program for the second half of 2020 based on company performance. Going forward, the company is committed to directly tying short-term cash incentive payouts to priorities across all stakeholders and ensuring strong alignment with our strategy and mission.
2019 Bonus Plan
For 2019, the board of directors approved the 2019 Bonus Plan. It provided for variable cash incentives, payable semi-annually, that were designed to motivate our named executive officers to focus on our strategic priorities. Upon Mr. Chesky’s request and in light of his holdings of our common stock, our board of directors excluded Mr. Chesky from the 2019 Bonus Plan. All of our other named executive officers participated in the 2019 Bonus Plan.
Targeted bonuses for our named executive officers, as a percentage of base salary, were as set forth below. Target bonus levels remained the same for Ms. Johnson, Mr. Balogh and Mr. Greeley in 2019 as compared to 2018. Mr. Stephenson’s target bonus was established in connection with his recruitment in late 2018 and the commencement of his employment in January 2019 and reflected arms’ length negotiations with him and the consideration of competitive market data by our board of directors.
| Named Executive Officer | 2019 Target Bonus as a Percentage of Base Salary (%) |
|||
| Brian Chesky |
N/A | |||
| Dave Stephenson |
75 | |||
| Belinda Johnson |
75 | |||
| Aristotle Balogh |
75 | |||
| Greg Greeley |
75 |
Under the 2019 Bonus Plan, there were two performance periods corresponding to the first and second halves of the calendar year. Payouts under each of the performance periods are determined based on the product of: (i) 50% of the named executive officer’s annual base salary; (ii) his or her target annual bonus percentage; (iii) a company performance multiplier, determined based on the achievement of pre-established corporate goals; and (iv) as applicable, a proration percentage reflecting the number of days the named executive officer was actively employed during the performance period. Individual performance was not considered in determining payouts under the 2019 Bonus Plan.
Both performance periods measured objectives that the board of directors believed were clear drivers of company performance and align with our focus on continued long-term value creation for all of our stakeholders. The board of directors used the same structure for all bonus participants, including our participating named executive officers, to focus the company on a common set of performance objectives. The performance metrics, goals and corresponding weightings for each performance period were established at the beginning of such performance period based on our management’s and our board of directors’ assessment of our strategic priorities and their relative importance for such performance period, taking into account relevant factors at the time, including then-current company strategy, performance and business environment. Specifically, as compared to the first half of 2019, our board of directors approved the inclusion of profitability as a metric for the second half of 2019 to ensure that the pursuit of other priorities was balanced with financial discipline. The weighting of our Homes Growth and
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Quality priority was adjusted from 55% for the first half of 2019 to 35% for the second half of 2019 largely to account for the addition of the profitability metric and therefore to balance our growth priorities with financial goals. The weighting of our safety priority was adjusted from 7.5% for the first half of 2019 to 5% for the second half of 2019 and the weighting of our Airbnb Platform priority was adjusted from 7.5% for the first half of 2019 to 15% for the second half of 2019 to account for the board of directors’ assessment of relative importance of each at the time. We have not disclosed the specific goals for performance metrics because no single metric has a material impact on the compensation paid to our named executive officers other than metrics related to Homes Growth and Quality, which we have excluded because we believe their disclosure would cause substantial competitive harm, and, for the second half of 2019, the metric used to measure profitability, which we disclose below. Each of the goals under our 2019 Bonus Plan was set by our board of directors at a level it determined would require substantial effort to be achieved, such that the goals could not be achieved with average or below average performance.
First Half 2019 Performance Period
Based on performance against pre-established goals as set forth in the table below, the board of directors approved the first half company achievement at 70% of target.
| Company Priority | Examples of Metrics Considered | Weighting | Achievement | Payout | ||||||||||
| Safety |
• Guest and host identity verification goals • Launch of hotline for safety and urgent issues |
7.5 | % | 100 | % | 7.5 | % | |||||||
| Airbnb Platform |
• Infrastructure and site performance improvements |
7.5 | % | 80 | % | 6 | % | |||||||
| Public Company Readiness |
• Financial systems infrastructure migration • Financial reporting consistent with SEC timelines |
7.5 | % | 87 | % | 6.5 | % | |||||||
| Team Execution |
• Recruiting milestones • Diversity priorities |
7.5 | % | 87 | % | 6.5 | % | |||||||
| Homes Growth & Quality |
• Active booked listings growth • First time nights bookings growth |
55 | % | 52 | % | 28.5 | % | |||||||
| Experiences Growth & Quality |
• Improved landing page • New experiences added to platform |
7.5 | % | 100 | % | 7.5 | % | |||||||
| China Growth & Quality |
• Origin nights booked growth |
7.5 | % | 100 | % | 7.5 | % | |||||||
|
|
|
|
|
|||||||||||
| Total |
100 | % | 70 | % | ||||||||||
|
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|
|
|
Based on our achievement during the first half performance period of the 2019 Bonus Plan, our named executive officers were awarded bonuses as follows:
| Named Executive Officer | 50% of Annual Base Salary ($) |
Target Annual (%) |
First
Half (%) |
Service Proration (%) |
First Half Performance Period Bonus Payout ($) |
|||||||||||||||||
| Dave Stephenson |
300,000 | 75 | % | 70 | % | 97 | % | 152,303 | ||||||||||||||
| Belinda Johnson |
300,000 | 75 | % | 70 | % | 100 | % | 157,500 | ||||||||||||||
| Aristotle Balogh |
300,000 | 75 | % | 70 | % | 100 | % | 157,500 | ||||||||||||||
| Greg Greeley |
300,000 | 75 | % | 70 | % | 100 | % | 157,500 |
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Second Half 2019 Performance Period
Based on performance against pre-established goals as set forth in the table below, the board of directors approved the second half company achievement at performance multiplier at 75% of target.
| Company Priority | Examples of Metrics Considered | Weighting | Achievement | Payout | ||||||||||
| Safety |
• Improved speed to answer and time to resolution |
5 | % | 100 | % | 5 | % | |||||||
| Airbnb Platform |
• Site availability and downtime minutes • Continued service-oriented architecture migration |
15 | % | 80 | % | 12 | % | |||||||
| Public Company Readiness |
• Financial reporting consistent with SEC guidelines |
7.5 | % | 93 | % | 7 | % | |||||||
| Team Execution |
• Recruiting milestones • Diversity priorities |
7.5 | % | 100 | % | 7.5 | % | |||||||
| Homes Growth & Quality |
• Active booked listings growth • Total nights booked growth |
35 | % | 81 | % | 28.5 | % | |||||||
| Experiences Growth & Quality |
• Launch of new categories • Seats booked growth |
7.5 | % | 100 | % | 7.5 | % | |||||||
| China Growth & Quality |
• Origin nights booked |
7.5 | % | 100 | % | 7.5 | % | |||||||
| Profitability |
• 2019 Adjusted EBITDA(1) performance relative to outlook as of June 30, 2019. |
15 | % | 0 | %(2) | 0 | % | |||||||
|
|
|
|
|
|||||||||||
| Total |
100 | % | 75 | % | ||||||||||
|
|
|
|
|
| (1) |
Adjusted EBITDA is calculated as: net income or loss adjusted for (i) provision for income taxes; (ii) interest income, interest expense, and other income (expense), net; (iii) depreciation and amortization; (iv) stock-based compensation expense; and (v) net changes to the reserves for lodging taxes for which management believes it is probable that we may be held jointly liable with hosts for collecting and remitting such taxes. |
| (2) |
Adjusted EBITDA achieved for 2019 was $(253.3) million, which was below the Adjusted EBITDA outlook as of June 30, 2019. |
Based on our achievement during the second half performance period of the 2019 Bonus Plan, our named executive officers were awarded bonuses as follows:
| Named Executive Officer |
50% of Annual Base Salary ($) |
Target Annual Bonus (%) |
Second Half Percentage Achievement (%) |
Service Proration (%) |
Second Half Performance Period Bonus Payout ($) |
|||||||||||||||||
| Dave Stephenson |
300,000 | 75 | % | 75 | % | 100 | % | 168,750 | ||||||||||||||
| Belinda Johnson |
300,000 | 75 | % | 75 | % | 100 | % | 168,750 | ||||||||||||||
| Aristotle Balogh |
300,000 | 75 | % | 75 | % | 100 | % | 168,750 | ||||||||||||||
| Greg Greeley |
300,000 | 75 | % | 75 | % | 100 | % | 168,750 |
Hiring Bonuses
In connection with his commencement of employment in 2019, Mr. Stephenson was eligible to receive a one-time cash hiring bonus in an aggregate amount of $2,400,000. 50% of his hiring bonus was paid following his employment commencement date, and 50% of his hiring bonus was paid shortly after January 7, 2020, the first anniversary of his employment commencement date. In the event of Mr. Stephenson’s termination of employment for any reason other than by the company without Cause or his resignation for Good Reason (each, as defined in his offer letter) prior to January 7, 2020, Mr. Stephenson would have been obligated to repay a pro rata portion of the first installment of the hiring bonus, and in the event of his termination of employment for any reason other than by the company without Cause or his resignation for Good Reason prior to January 7, 2021, he will be obligated to repay a pro rata portion of the second installment of the hiring bonus.
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In connection with his commencement of employment in 2018, we agreed to pay to Mr. Balogh a signing bonus of $675,000, which bonus was intended to compensate him for the value of equity awards granted to him by his previous employer that were forfeited and was paid in January 2019.
Equity Compensation
Equity compensation reinforces the importance of a long-term, ownership orientation, creates alignment with our stakeholders, and promotes retention. Equity-based compensation is the most significant portion of compensation for our named executive officers.
We grant stock options and RSUs to our executives, which have historically covered shares of our Class B common stock. Stock options only provide value to executives when the stock price increases. We believe that stock price growth will only happen in a meaningful and sustained way if we are successful in creating value across all of our core stakeholders. Their 10-year term further promotes a long-term orientation. RSUs generally expire after seven years if the vesting conditions have not been met and promote ownership, alignment with stockholders, and retention.
Our stock options generally vest over four years, subject to continued service. Our RSUs generally have both service-based and liquidity-based vesting conditions. The service-based vesting period for these awards is typically four years with quarterly vesting over the four-year period, subject to continued service. The liquidity-based vesting condition is satisfied upon (i) an initial public offering of our securities (“IPO”) or (ii) a change in control as defined in our equity incentive plans. In connection with this offering, and in accordance with the terms of our RSU agreements, our board of directors approved that the liquidity-based vesting condition will be deemed satisfied upon the effective date of the registration statement of which this prospectus forms a part and that any then vested RSUs will be settled on such date.
As described below under “Description of Capital Stock — Equity Award Amendment,” in connection with this offering, our board of directors amended outstanding equity awards granted under our 2008 Plan and 2018 Plan so that such awards will settle in shares of Class A common stock instead of Class B common stock in connection with and after this offering, excluding the stock options held by individuals holding at least 1% of our outstanding capital stock. Where references are made to options to purchase Class B common stock or RSUs settling in Class B common stock in this “Compensation Discussion and Analysis,” they refer to our historical practice of granting equity awards that settle in shares of Class B common stock.
2019 Equity Grants
Annual Equity Grants
We made annual equity grants to our executives in March 2019. Of our named executive officers, only Ms. Johnson received an annual grant, which consisted of an option to purchase 297,500 shares of Class B common stock and an award of 49,582 RSUs. The option vests as to 6.25% of the shares subject to the option on May 25, 2019 and each of the first three quarterly anniversaries thereafter, and as to 1/48th of the shares subject to the option on each monthly anniversary thereafter, subject to Ms. Johnson’s continued service with us. The service-based vesting condition of Ms. Johnson’s RSUs was satisfied as to 6.25% of the RSUs on May 25, 2019 and each quarterly anniversary thereafter, subject to Ms. Johnson’s continued service with us, and the liquidity-based vesting condition for her RSUs is as set forth above. With respect to annual grants to our continuing executives, including Ms. Johnson, the Chief Executive Officer reviewed a number of factors and considerations (see the subsection titled “ — Determination of Compensation” above) for each executive and established specific recommendations for the consideration of the board of directors.
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Mr. Chesky did not receive any equity awards in 2019.
Messrs. Balogh and Greeley received new hire awards in 2018 that were intended to cover their 2019 annual grants, and therefore did not receive equity grants in 2019. Mr. Stephenson received a new hire award in connection with his commencement of employment in 2019 that was also intended to cover the annual equity grants he would have received in 2019, as described below.
New Hire Equity Grants
In 2019, we made a new hire equity grant of 285,714 RSUs to Mr. Stephenson, who commenced employment in January 2019. Such award was intended to cover both a new hire incentive and the 2019 annual grant he otherwise would have received in March 2019. The service-based vesting condition for Mr. Stephenson’s RSUs was satisfied as to 1/4th of the RSUs on February 25, 2020, and will be satisfied as to 1/16th of the RSUs on each quarterly anniversary thereafter, subject to his continued service with us. The liquidity-based vesting condition for the RSUs is satisfied as described above.
2020 Equity Grants
In 2020, we made equity grants to certain of our named executive officers. As described above under the subsection titled “ — 2019 Compensation Highlights,” our 2020 annual grants were delayed from March 2020 to July 2020, and grant sizes were determined based on a premium per share stock price. This resulted in smaller grants being made to our named executive officers when compared to the grant sizes that would have been awarded using our historical methodology. On July 7, 2020, we granted 99,554 and 111,998 RSUs subject to both service-based and liquidity-based vesting conditions to Messrs. Stephenson and Balogh, respectively. The service-based vesting condition for each of the RSUs granted to Messrs. Stephenson and Balogh is satisfied as to 1/16th of the RSUs on each quarterly anniversary of February 25, 2020, subject to the executive’s continued service with us. The liquidity-based vesting condition for the RSUs will be satisfied as described above.
On March 24, 2020, in connection with Ms. Johnson’s appointment to our board of directors, we granted her an option to purchase 31,110 shares of Class B common stock and 1,036 RSUs, as described in more detail under the subsection titled “ — Belinda Johnson Board Transition Letter.” On July 7, 2020, we also granted RSUs subject to both service-based and liquidity-based vesting conditions to our non-employee directors under our non-employee director compensation policy, including 8,514 RSUs to Ms. Johnson. The service-based vesting condition for the RSUs granted to Ms. Johnson is satisfied as to 1/4th of the RSUs on each quarterly anniversary of May 25, 2020, subject to her continued service with us. The liquidity-based vesting condition for the RSUs will be satisfied as described above.
2020 Incentive Award Plan
We intend to adopt a 2020 Incentive Award Plan (“2020 Plan”) in order to facilitate the grant of cash and equity incentives to directors, employees (including our named executive officers) and consultants of our company and certain of its affiliates and to enable our company and certain of its affiliates to obtain and retain services of these individuals, which is essential to our long-term success. We expect that the 2020 Plan will be effective on the day prior to the date the registration statement relating to this prospectus becomes effective. For additional information about the 2020 Plan, see the section titled “2020 Incentive Award Plan” below.
Perquisites and Other Benefits
We do not view perquisites or other personal benefits as a significant component of our executive compensation program. Accordingly, with the exception of the benefits below, we do not generally provide perquisites to our executive officers.
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As a result of Mr. Chesky’s profile as our Chief Executive Officer, we engaged a third-party consulting firm to perform an assessment of Mr. Chesky’s security risks, which concluded that there is a bona fide business-oriented security concern with respect to Mr. Chesky warranting a security program for him. Consistent with such assessment, we maintain a security program pursuant to which we pay for costs related to security for Mr. Chesky during certain hours at his personal residence and during certain personal travel, including the use of a leased car and a driver, who also acts as security detail for Mr. Chesky. Since limited aspects of this program provide direct and indirect benefits to Mr. Chesky personally and despite the overarching business purpose of the program, the costs of this program attributable to security at his personal residence or during personal travel are reported in our “2019 Summary Compensation Table” below as “All Other Compensation” for Mr. Chesky.
In connection with his commencement of employment, we also agreed to provide certain travel reimbursements to Mr. Stephenson. In addition, he will be eligible to receive reimbursement for reasonable relocation expenses at the time of his relocation to the San Francisco Bay Area.
All employees, including our named executive officers, are provided an employee travel coupon up to $500 at the beginning of each calendar quarter, as well as an additional amount intended to serve as a tax gross-up on the value of the travel coupon.
We may also pay filing fees incurred by our executives under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 on their behalf from time to time.
Tax Gross-Ups. We do not make gross-up payments to cover our named executive officers’ personal income taxes that may pertain to any of the compensation or perquisites paid or provided by our company, other than nominal amounts provided to all employees in connection with the employee travel coupon, as described above.
Health and Welfare and Retirement Benefits
Health/Welfare Plans. All of our full-time employees, including our named executive officers, are eligible to participate in our health and welfare plans, including:
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medical, dental, and vision benefits; |
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medical and dependent care flexible spending accounts; |
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short-term and long-term disability insurance; and |
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life and accidental death and disability insurance. |
401(k) Plan. We currently maintain a 401(k) retirement savings plan for our U.S. employees, including our named executive officers, who satisfy certain eligibility requirements. The Internal Revenue Code allows eligible employees to defer a portion of their compensation, within prescribed limits, on a pre-tax basis through contributions to the 401(k) plan. Currently, we match contributions made by participants in the 401(k) plan up to a specified percentage of the employee contributions, and these matching contributions are fully vested as of the date on which the contribution is made. We believe that providing a vehicle for tax-deferred retirement savings though our 401(k) plan, and making fully vested matching contributions, adds to the overall desirability of our executive compensation package and further incentivizes our employees, including our named executive officers, in accordance with our compensation policies.
Severance Benefits
We are party to offer letters with each of our named executive officers, which in certain cases, provide for limited severance benefits and payments upon qualifying terminations. We also entered into a severance
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agreement with Mr. Greeley in connection with his separation from us effective August 1, 2020 and a board transition letter with Ms. Johnson in connection with her transition from our Chief Operating Officer to a non-employee director effective March 1, 2020. A description of these arrangements is set forth under the subsection titled “ — Employment Agreements” below, and information on the estimated payments and benefits that our named executive officers would have been eligible to receive as of December 31, 2019, is set forth in the subsection titled “ — Potential Payments Upon Termination or Change in Control” below.
Company Policies Regarding Hedging
Executive officers and members of the board of directors may not directly or indirectly engage in transactions intended to hedge or offset the market value of Airbnb stock owned by them.
Tax and Accounting Considerations
As a general matter, our board of directors reviews and considers the various tax and accounting implications of compensation programs we utilize.
Deductibility of Executive Compensation. Section 162(m) of the Code denies a publicly-traded corporation a federal income tax deduction for remuneration in excess of $1 million per year per person paid to executives designated in Section 162(m) of the Code, including, but not limited to, its chief executive officer, chief financial officer, and the next three highly compensated executive officers. However, we believe that maintaining the discretion to provide compensation that is non-deductible allows us to provide compensation tailored to the needs of our company and our named executive officers and is an important part of our responsibilities and benefits our stockholders.
Accounting for Stock-Based Compensation. We follow Financial Accounting Standard Board Accounting Standards Codification Topic 718, Compensation — Stock Compensation (“ASC Topic 718”) for our stock-based compensation awards. ASC Topic 718 requires companies to measure the compensation expense for all share-based awards made to employees and directors, including stock options and RSUs, based on the grant-date fair value of these awards. This calculation is performed for accounting purposes and reported in the compensation tables below, even though our executive officers may never realize any value from their awards.
Executive Compensation Tables
2019 Summary Compensation Table
The following table contains information about the compensation earned by each of our named executive officers during 2019.
| Name and Principal Position |
Year | Salary ($) | Bonus ($) | Stock Awards ($)(1) |
Option Awards ($)(1) |
Non-Equity ($)(2) |
All Other Compensation ($)(3) |
Total ($) | ||||||||||||||||||||||||
| Brian Chesky |
2019 | 110,000 | — | — | — | — | 310,982 | 420,982 | ||||||||||||||||||||||||
| President and Chief Executive Officer |
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| Dave Stephenson(4) |
2019 | 588,462 | 1,200,000 | (5) | 17,115,697 | — | 321,053 | 8,897 | 19,234,109 | |||||||||||||||||||||||
| Chief Financial Officer |
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| Belinda Johnson |
2019 | 600,000 | 3,000 | (6) | 3,124,906 | 9,775,424 | 326,250 | 11,368 | 13,840,948 | |||||||||||||||||||||||
| Former Chief Operating Officer |
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| Aristotle Balogh |
2019 | 600,000 | 675,000 | (7) | — | — | 326,250 | 11,369 | 1,612,619 | |||||||||||||||||||||||
| Chief Technology Officer |
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| Greg Greeley |
2019 | 600,000 | — | — | — | 326,250 | 10,764 | 937,014 | ||||||||||||||||||||||||
| Former President of Homes |
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| (1) |
Amounts reflect the grant-date fair value of stock awards and option awards granted during 2019 computed in accordance with ASC Topic 718, rather than the amounts paid to or realized by the named individual. During 2019, Mr. Stephenson and Ms. Johnson were granted RSUs that are subject to both service-based and liquidity-based vesting conditions. The grant-date fair value of RSUs granted in 2019 reported in the table above assumes achievement of the liquidity-based vesting condition. Note that while the grant-date fair value assuming achievement of the liquidity-based vesting condition is included in the table above, the achievement of the liquidity-based vesting condition was not deemed probable on the date of grant. See Note 12 to our consolidated financial statements included elsewhere in this prospectus for the assumptions used in calculating these values. |
| (2) |
Amounts reflect payouts under each of the semi-annual performance periods under the 2019 Bonus Plan. See the description of the 2019 Bonus Plan under “Cash Incentive Compensation — 2019 Bonus Plan” above. |
| (3) |
The following table provides the amounts of other compensation, paid to, or on behalf of, named executive officers during 2019 included in the “All Other Compensation” column. |
| Name | 401(k) Matching |
Security Costs ($)(a) |
Travel Coupons ($) |
Travel Coupons- Gross-Up ($) |
Total ($) |
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| Brian Chesky |
— | 307,797 | 2,000 | 1,185 | 310,982 | |||||||||||||||
| Dave Stephenson |
5,197 | — | 2,000 | 1,700 | 8,897 | |||||||||||||||
| Belinda Johnson |
8,400 | — | 2,000 | 969 | 11,369 | |||||||||||||||
| Aristotle Balogh |
8,400 | — | 2,000 | 969 | 11,369 | |||||||||||||||
| Greg Greeley |
8,068 | — | 2,000 | 696 | 10,764 |
a. Represents personal security costs paid on behalf of Mr. Chesky by the company during 2019, including the costs of a leased vehicle, driver, and security detail, in each case, attributable to security at his personal residence or during personal travel.
| (4) |
Mr. Stephenson commenced employment on January 7, 2019. |
| (5) |
Amount represents the portion of the hiring bonus paid to Mr. Stephenson in 2019 in connection with his commencement of employment. |
| (6) |
Amount represents a one-time bonus paid to Ms. Johnson under a broad-based employee incentive program. |
| (7) |
Amount represents a signing bonus paid to Mr. Balogh in 2019 in connection with his commencement of employment in November 2018. |
Grants of Plan-Based Awards in 2019
The following table provides information relating to grants of plan-based awards made to our named executive officers during 2019. Mr.  Target and maximum amounts assume full achievement of all goals. For additional detail on the 2019 Bonus Plan, see “Cash Incentive Compensation – 2019 Bonus Plan” above. |
| (2) |
Represent RSUs that vest based on the satisfaction of both a service-based vesting condition and a liquidity-based vesting condition, which is satisfied as described above under “Compensation Discussion and Analysis — Elements of Our Executive Compensation Program — Equity Compensation.” |
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| (3) |
The amounts shown represent the grant-date fair value per share determined in accordance with ASC Topic 718, multiplied by the number of shares, assuming achievement of the liquidity-based vesting condition. During 2019, Mr. Stephenson and Ms. Johnson were granted RSUs that are subject to both service-based and liquidity-based vesting conditions. Note that while the grant-date fair value assuming achievement of the liquidity-based vesting condition is included in the table above, the achievement of the liquidity-based vesting condition was not deemed probable on the date of grant. See Note 12 to our consolidated financial statements included elsewhere in this prospectus for the assumptions used in calculating these values. |
| (4) |
The service-based vesting condition for Mr. Stephenson’s RSUs was satisfied as to 1/4th of the RSUs on February 25, 2020 and is satisfied as to 1/16th of the RSUs on each quarterly anniversary thereafter, subject to his continued service with us. |
| (5) |
The service-based condition of Ms. Johnson’s RSUs was satisfied as to 6.25% of the RSUs on May 25, 2019 and is satisfied as to 6.25% of the RSUs on each quarterly anniversary thereafter, subject to Ms. Johnson’s continued service with us. |
| (6) |
The option vested as to 6.25% of the shares subject to the option on May 25, 2019 and each of the first three quarterly anniversaries thereafter, and vests as to 1/48th of the shares subject to the option on each monthly anniversary thereafter, subject to Ms. Johnson’s continued service with us. |
Outstanding Equity Awards at Year-End Table
The following table summarizes the number of shares of common stock underlying outstanding equity incentive plan awards for each named executive officer as of December 31, 2019.
| Option Awards | Stock Awards(1) | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Name | Vesting Commencement Date |
Number of Securities (#) Exercisable |
Number
of (#) Unexercisable |
Option ($) |
Option Expiration Date |
Equity Incentive Plan (#) |
Equity Incentive ($)(2) |
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| Brian Chesky |
9,192,588 | — | 3.19 | 2/17/2024 | ||||||||||||||||||||||||||||||||||||||||||||||||
| Dave Stephenson |
2/25/2020 | (3) | 285,714 | 17,008,554 | ||||||||||||||||||||||||||||||||||||||||||||||||
| Belinda Johnson |
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82,644 |
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— |
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0.99 |
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12/1/2021 |
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| 1,638,472 | — | 0.99 | 12/1/2021 | |||||||||||||||||||||||||||||||||||||||||||||||||
| 386,680 | — | 29.96 | 11/30/25 | |||||||||||||||||||||||||||||||||||||||||||||||||
| 2/25/2017 | (4) | 242,856 | 100,002 | 52.50 | 4/19/27 | |||||||||||||||||||||||||||||||||||||||||||||||
| 2/25/2018 | (4) | 163,690 | 193,454 | 52.70 | 3/22/28 | |||||||||||||||||||||||||||||||||||||||||||||||
| 2/25/2019 | (5) | 55,780 | 241,720 | 63.03 | 3/21/2029 | |||||||||||||||||||||||||||||||||||||||||||||||
| 11/25/2015 | (3) | 64,446 | 3,836,470 | |||||||||||||||||||||||||||||||||||||||||||||||||
| 11/25/2015 | (6) | 257,786 | 15,346,001 | |||||||||||||||||||||||||||||||||||||||||||||||||
| 2/25/2017 | (3) | 57,142 | 3,401,663 | |||||||||||||||||||||||||||||||||||||||||||||||||
| 2/25/2018 | (3) | 59,524 | 3,543,464 | |||||||||||||||||||||||||||||||||||||||||||||||||
| 2/25/2019 | (7) | 49,582 | 2,951,616 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Aristotle Balogh |
5/25/2019 | (8) | 47,618 | 180,952 | 59.91 | 11/13/2028 | ||||||||||||||||||||||||||||||||||||||||||||||
| 11/25/2018 | (9) | 380,952 | 22,678,073 | |||||||||||||||||||||||||||||||||||||||||||||||||
| 5/25/2019 | (7) | 38,094 | 2,267,736 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Greg Greeley |
3/12/2018 | (10) | 476,190 | 52.70 | 3/15/2028 | |||||||||||||||||||||||||||||||||||||||||||||||
| 3/12/2018 | (11) | 476,190 | 52.70 | 3/15/2028 | ||||||||||||||||||||||||||||||||||||||||||||||||
| 3/12/2018 | (12) | 142,856 | 52.70 | 3/15/2028 | ||||||||||||||||||||||||||||||||||||||||||||||||
| 5/25/2018 | (3) | 476,190 | 28,347,591 | |||||||||||||||||||||||||||||||||||||||||||||||||
| 5/25/2018 | (13) | 109,524 | 6,519,964 |
| (1) |
Represent RSUs that vest based on the satisfaction of both a service-based vesting condition and a liquidity-based vesting condition, which is satisfied as described above under “Compensation Discussion and Analysis — Elements of Our Executive Compensation Program — Equity Compensation.” |
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| (2) |
Amounts are calculated by multiplying the number of shares shown in the table by $59.53, the fair market value of our common stock as of December 31, 2019, as determined by the board of directors. |
| (3) |
The service-based vesting condition of the RSUs is satisfied as to 25% of the RSUs on the first anniversary of the vesting commencement date, and as to 1/16th of the RSUs on each quarterly anniversary thereafter, subject to the executive’s continued service with us. |
| (4) |
The option vests as to 25% of the shares subject to the option on the first anniversary of the vesting commencement date and as to 1/48th of the shares on each monthly anniversary thereafter, subject to the executive’s continued service with us. |
| (5) |
The option vests as to 1/16th of the shares subject to the option on each quarterly anniversary of the vesting commencement date and as to 1/48th of the shares on each monthly anniversary thereafter, subject to the executive’s continued service with us. |
| (6) |
The service-based vesting condition of the RSUs is satisfied as to 1/8th of the RSUs on each quarterly anniversary of the vesting commencement date, subject to the executive’s continued service with us. |
| (7) |
The service-based vesting condition of the RSUs is satisfied as to 1/16th of the RSUs on each quarterly anniversary of the vesting commencement date, subject to the executive’s continued service with us. |
| (8) |
The option vests as to 6.25% of the shares subject to the option on the vesting commencement date and as to 1/48th of the shares subject to the option on each monthly anniversary thereafter, subject to the executive’s continued service with us. |
| (9) |
The service-based vesting condition of the RSUs is satisfied as to (i) 40% of the RSUs on the first anniversary of the vesting commencement date, (ii) 7.5% of the RSUs on each of the next four subsequent quarterly anniversaries thereafter, and (iii) 2.5% of the RSUs on each of the next four subsequent quarterly anniversaries thereafter, in each case, subject to the executive’s continued service with us. |
| (10) |
The option vests as to 25% of the shares subject to the option on the second anniversary of the vesting commencement date and the remaining shares will vest in 36 substantially equal installments on each monthly anniversary thereafter, subject to the executive’s continued service with us. |
| (11) |
The option vests as to 25% of the shares subject to the option on the third anniversary of the vesting commencement date and the remaining shares will vest in 36 substantially equal installments on each monthly anniversary thereafter, subject to the executive’s continued service with us. |
| (12) |
The option vests as to 25% of the shares subject to the option on the fourth anniversary of the vesting commencement date and the remaining shares will vest in 36 substantially equal installments on each monthly anniversary thereafter, subject to the executive’s continued service with us. |
| (13) |
The service-based vesting condition of the RSUs is satisfied as to 4/15th of the RSUs on the fourth anniversary of the vesting commencement date and as to 1/15th of the RSUs on each quarterly anniversary thereafter, subject to the executive’s continued service with us. |
Option Exercises and Stock Vested
In 2019, none of our named executive officers exercised any options, and no stock awards vested.
Pension Benefits
We do not maintain any defined benefit pension plans.
Nonqualified Deferred Compensation
We do not maintain any nonqualified deferred compensation plans.
Employment Agreements
We are a party to offer letters with each of our named executive officers. These agreements provide for at-will employment and generally include the named executive officer’s initial base salary, initial target bonus, initial equity award grants, and standard benefit plan eligibility. In addition, certain offer letters provide for payments in the event of qualifying terminations of employment, as described below. Any such severance benefits are limited in the size of the benefit or the duration for which they are effective, and Ms. Johnson’s and Mr. Balogh’s offer letters do not provide for any such payments and benefits. Any potential payments and benefits due upon a termination of employment or a change in control of us are quantified below in the subsection titled “ — Potential Payments upon Termination or Change in Control.”
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We also entered into a severance agreement with Mr. Greeley in connection with his separation from us effective August 1, 2020 and a board transition letter with Ms. Johnson in connection with her transition from our Chief Operating Officer to non-employee director effective March 1, 2020, each of which are described below.
Brian Chesky Offer Letter
We entered into an offer letter with Mr. Chesky in July 2008. Mr. Chesky’s offer letter provides that in the event that his employment is terminated without Cause or he resigns due to a Constructive Termination (each, as defined in his offer letter), Mr. Chesky will receive a lump sum payment equal to three months of his then-current base salary and three months of benefit continuation. Such payments and benefits are subject to Mr. Chesky’s execution of a release of claims against the company.
Dave Stephenson Offer Letter
We entered into an offer letter with Mr. Stephenson in connection with his commencement of employment in January 2019 as our Chief Financial Officer. Mr. Stephenson’s offer letter provides for an initial base salary of $600,000, an initial target bonus of 75% of his base salary, and a one-time hiring bonus in the aggregate amount of $2,400,000. 50% of his hiring bonus was paid following his employment commencement date, and 50% of his hiring bonus was paid following the first anniversary of his employment commencement date. In the event of Mr. Stephenson’s termination of employment for any reason other than by the company without Cause or his resignation for Good Reason (each, as defined in his offer letter) prior to January 7, 2020, Mr. Stephenson would have been obligated to repay a pro rata portion of the first installment of the hiring bonus, and in the event of his termination of employment for any reason other than by the company without Cause or his resignation for Good Reason prior to January 7, 2021, he will be obligated to repay a pro rata portion of the second installment of the hiring bonus.
Pursuant to his offer letter, Mr. Stephenson received new hire RSUs covering 285,714 shares that is subject to a service-based vesting condition and a liquidity-based vesting condition. The liquidity-based vesting condition is satisfied upon certain events as described above under “Equity Compensation.” The service-based vesting condition for Mr. Stephenson’s RSUs is satisfied as to 1/4th of the RSUs on February 25, 2020, and as to 1/16th of the RSUs on each quarterly anniversary thereafter, subject to his continued service with us.
In the event of Mr. Stephenson’s termination from the company without Cause or for Good Reason, in either case, was prior to February 26, 2020, Mr. Stephenson would have been entitled to receive either, as determined in the company’s sole discretion: (i) a cash payment equal to $4,000,000 or (ii) acceleration of the service-based vesting of 76,190 shares subject to Mr. Stephenson’s RSUs. Such payment or benefit is subject to Mr. Stephenson’s execution of a release of claims against the company.
Greg Greeley Offer Letter
We entered into an offer letter with Mr. Greeley in February 2018. Mr. Greeley’s offer letter provides that in the event of his termination without Cause or his resignation for Good Reason (each, as defined in his offer letter) prior to the second anniversary of his employment commencement date, he will be eligible to receive, in the company’s discretion, either (i) a lump sum payment equal to $12,500,000 less the product of $520,833 and the number of months Mr. Greeley was employed by the company or (ii) acceleration of the service-based vesting of a number of RSUs equal to 238,096 less the product of 9,920 shares and the number of months Mr. Greeley was employed by the company, provided that if the termination date occurred prior to the initial one year cliff time-vesting date of his new hire RSUs, the accelerated share
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number would be 238,096 shares. Such payment or benefit is subject to Mr. Greeley’s execution of a release of claims against the company.
Greg Greeley Severance Agreement
We entered into a severance agreement with Mr. Greeley, pursuant to which he transitioned from our President of Homes to a consulting role with us effective August 1, 2020 for a period ending on November 26, 2020. Under the severance agreement, in exchange for a release of claims against the company and his continued services through the consulting period, Mr. Greeley will receive: (i) a lump sum payment in the amount of $600,000; (ii) payment of continued healthcare premiums for up to twelve months following his termination date; and (iii) in consideration for Mr. Greeley’s agreement to a non-compete covenant for twelve months following his termination date, Mr. Greeley’s option to purchase 476,190 shares of Class B common stock that was originally to commence vesting in March 2021 was amended to remove the one-year cliff such that the option will be deemed to instead vest monthly from March 12, 2020 through the end of the consulting period. In addition, Mr. Greeley’s continued consulting services to the company will be deemed to be services satisfying the service-based vesting condition on his outstanding equity awards.
Belinda Johnson Board Transition Letter
We entered into a board transition letter with Ms. Johnson in connection with her transition from our Chief Operating Officer to a non-employee member of the board of directors, pursuant to which she agreed to forfeit each outstanding RSU for which the service-based requirement was not satisfied and the unvested shares subject to her outstanding options, in each case, as of March 1, 2020. In connection with her appointment to the board of directors, we also granted to Ms. Johnson 1,036 RSUs, for which the service-based vesting condition was satisfied in full on May 25, 2020, and an option to purchase 31,110 shares of Class B common stock that vests as to 1/24th of the underlying shares on each monthly anniversary of March 1, 2020, subject to her continued service with us. The liquidity-based vesting condition for Ms. Johnson’s RSUs is satisfied upon certain events as described above under “Equity Compensation.”
Potential Payments Upon Termination or Change in Control
The table below quantifies certain compensation and benefits that would have become payable to each of our named executive officers if his or her employment had terminated on December 31, 2019, as a result of each of the termination scenarios described below.
| Named Executive Officer | Termination Scenario(1) | Severance ($) | Continued Healthcare ($) |
Total ($) | ||||||||||
| Brian Chesky |
Termination without Cause or Constructive Termination | 27,500 | (2) | 3,000 | (3) | 30,500 | ||||||||
| Dave Stephenson |
Termination without Cause or Resignation for Good Reason | 4,000,000 | (4) | — | 4,000,000 | |||||||||
| Belinda Johnson |
Termination without Cause or Resignation for Good Reason | — | — | — | ||||||||||
| Aristotle Balogh |
Termination without Cause or Resignation for Good Reason | — | — | — | ||||||||||
| Greg Greeley(5) |
Termination without Cause or Resignation for Good Reason | 1,041,674 | (6) | — | 1,041,674 |
| (1) |
In addition to the severance benefits provided under certain named executive officers’ offer letters, as described above, under our 2008 Plan and our 2018 Plan, in the event of a change in control of the company where outstanding awards are not assumed or substituted, all awards will vest in full. In such event, the value of the accelerated equity that our named executive officers would receive are as follows: Mr. Chesky: $0; Mr. Stephenson: $17,008,554; Ms. Johnson: $31,103,519, which includes $23,624,598 in respect of RSUs for which the service-based vesting condition was satisfied as of December 31, 2019; |
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| Mr. Balogh: $24,945,809, which includes $9,354,544 in respect of RSUs for which the service-based vesting condition was satisfied as of December 31, 2019; and Mr. Greeley: $42,348,016, which includes $10,630,271 in respect of RSUs for which the service-based vesting condition was satisfied as of December 31, 2019. The value of accelerated options is calculated by multiplying (i) the number of shares accelerated by (ii) any positive excess of $59.53, the fair market value of our common stock as of December 31, 2019, over the applicable exercise price, and the value of accelerated RSUs is calculated by multiplying the number of RSUs accelerated by $59.53, the fair market value of our common stock as of December 31, 2019. |
| (2) |
Represents three months of Mr. Chesky’s annual base salary. |
| (3) |
Represents three months of the cost of benefit continuation for Mr. Chesky. |
| (4) |
Assumes the company elected to provide a cash severance payment. In the event the company elected to accelerate the service-based vesting of 76,190 RSUs, the value of such accelerated shares would have been $4,535,590 based on the estimated fair market value of the company’s common stock on December 31, 2019. |
| (5) |
Amounts represent payments and benefits for which Mr. Greeley would have been eligible assuming an applicable termination on December 31, 2019 pursuant to his offer letter. A description of the benefits under Mr. Greeley’s separation agreement entered into in connection with his actual termination on August 1, 2020 is provided in the narrative above. |
| (6) |
Assumes the company elected to provide a cash severance payment equal to $12,500,000 less the product of $520,833 and the number of months Mr. Greeley was employed by the company as of December 31, 2019. In the event the company elected to accelerate the service-based vesting of a number of shares subject to Mr. Greeley’s RSUs equal to 238,096 less the product of 9,920 shares and the number of months Mr. Greeley was employed by the company as of December 31, 2019, the value of such accelerated shares would have been $1,182,028 based on the estimated fair market value of the company’s common stock on December 31, 2019. |
Equity Plans
2008 Equity Incentive Plan
Our board of directors adopted, and our stockholders approved, our 2008 Plan, effective as of July 13, 2008, and the 2008 Plan has been subsequently amended on multiple occasions. The 2008 Plan provides for the grant of incentive stock options, or ISOs, nonqualified stock options, or NSOs, restricted stock and RSUs covering our Class B common stock. As of September 30, 2020, options to purchase 38,248,968 shares of our common stock at a weighted-average exercise price per share of $4.96 and 38,221,076 RSUs remained outstanding under the 2008 Plan. In connection with the adoption of our 2018 Equity Incentive Plan, we ceased granting awards under the 2008 Plan; however, outstanding awards under the 2008 Plan continue to be governed by its existing terms.
Administration. Our board of directors or a committee thereof appointed by our board of directors has the authority to administer the 2008 Plan and the awards granted under it. The administrator’s authority includes the authority to select the service providers to whom awards will be granted under the 2008 Plan, the number of shares to be subject to those awards under the 2008 Plan, and the terms and conditions of the awards granted. In addition, the administrator has the authority to construe and interpret the 2008 Plan and to prescribe, amend and rescind rules and regulations relating to the 2008 Plan.
Awards. The 2008 Plan provides that the administrator may grant or issue options, including ISOs and NSOs, restricted stock and RSUs to employees, consultants and directors; provided that only employees may be granted ISOs.
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Stock Options. The 2008 Plan provides for the grant of ISOs or NSOs. ISOs may be granted only to employees. NSOs may be granted to employees, directors or consultants. The exercise price of ISOs granted to employees who at the time of grant own stock representing more than 10% of the voting power of all series of our common stock may not be less than 110% of the fair market value per share of our common stock on the date of grant, and the exercise price of ISOs granted to any other employees may not be less than 100% of the fair market value per share of our common stock on the date of grant. The exercise price of NSOs to employees, directors or consultants may not be less than 85% of the fair market value per share of our common stock on the date of grant. |
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Restricted Stock Awards. The 2008 Plan provides for the grant of restricted stock awards. Each restricted stock award will be governed by a restricted stock award agreement, which will detail the restrictions on transferability, risk of forfeiture and other restrictions the administrator approves. In general, restricted stock may not be sold, transferred, pledged, hypothecated, margined or otherwise encumbered until restrictions are removed or expire. Holders of restricted stock, unlike recipients of other equity awards, will have voting rights and will have the right to receive dividends, if any, prior to the time when the restrictions lapse. |
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Restricted Stock Units. The 2008 Plan provides that we may issue RSUs which may be settled in either cash or common stock. Each RSU award will be governed by a restricted stock unit award agreement that will set forth any vesting conditions based on continued employment or service or on performance criteria established by the administrator. Unlike restricted stock, stock underlying RSUs will not be issued until the restricted stock units have vested, and recipients of RSUs generally will have no rights as a stockholder prior to the time when vesting conditions are satisfied. |
Adjustments of Awards. In the event that the number of outstanding shares of the company’s Class B common stock is changed by a stock dividend, recapitalization, stock split, reverse stock split, subdivision, combination, reclassification or similar change in the capital structure of the company without consideration, then the number of shares reserved for issuance under the plan, the exercise or purchase prices of and shares subject to outstanding awards will be proportionately adjusted.
Change in Control. In the event of a change in control in which the successor or acquiring company does not assume or substitute outstanding awards, then the vesting of such awards will accelerate, and options will become exercisable in full prior to the consummation of such event.
Amendment and Termination. Our board of directors may amend or terminate the 2008 Plan at any time, subject to stockholder approval as required by applicable law. In connection with the adoption of our 2018 Equity Incentive Plan, we ceased granting awards under the 2008 Plan.
Hotel Tonight, Inc. 2011 Equity Incentive Plan
In connection with our acquisition of Hotel Tonight, Inc., in April 2019, we assumed the Hotel Tonight Plan. The Hotel Tonight Plan provides for the grant of ISOs, NSOs SARs, stock awards, restricted stock, RSUs, and other stock and cash-based awards covering our Class A common stock. As of September 30, 2020, options to purchase 181,782 shares of our common stock at a weighted-average exercise price per share of $22.65 and 42,580 RSUs remained outstanding under the Hotel Tonight Plan. In connection with the effectiveness of our 2020 Plan, no further awards will be granted under the Hotel Tonight Plan. However, all outstanding awards will continue to be governed by their existing terms.
Administration. Our board of directors has the authority to administer the Hotel Tonight Plan and the awards granted under it. The administrator’s authority includes the authority to select the service providers to whom awards will be granted under the Hotel Tonight Plan, the number of shares to be subject to those awards under the Hotel Tonight Plan, and the terms and conditions of the awards granted. In addition, the administrator has the authority to construe and interpret the Hotel Tonight Plan and to prescribe, amend and rescind rules and regulations relating to the Hotel Tonight Plan.
Awards. The Hotel Tonight Plan provides that the administrator may grant or issue options, including ISOs and NSOs, SARs, restricted stock and RSUs to employees, consultants and directors; provided that only employees may be granted ISOs.
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Stock Options. The Hotel Tonight Plan provides for the grant of ISOs or NSOs. ISOs may be granted only to employees. NSOs may be granted to employees, directors or consultants. The exercise price |
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of ISOs granted to employees who at the time of grant own stock representing more than 10% of the voting power of all series of our common stock may not be less than 110% of the fair market value per share of our common stock on the date of grant, and the exercise price of options granted to any other employees may not be less than 100% of the fair market value per share of our common stock on the date of grant, unless otherwise determined by the administrator. |
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Stock Appreciation Rights. The Hotel Tonight Plan provides for the grant of SARs. The exercise price of SARs may not be less than 100% of the fair market value per share of our common stock on the date of grant and will be settled in cash or shares or a combination thereof, having a value equal to the difference between the fair market value of the shares on the date of exercise and the exercise price, multiplied by the number of shares subject to the SAR that are being exercised. |
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Stock Awards and Restricted Stock Awards. The Hotel Tonight Plan provides for the grant of stock awards, which are not subject to transfer or other restrictions, and restricted stock awards. The administrator will establish the restrictions on transferability, risk of forfeiture and other restrictions applicable to each restricted stock award. In general, restricted stock may not be sold, transferred, pledged, hypothecated, margined or otherwise encumbered until restrictions are removed or expire. Holders of restricted stock, unlike recipients of other equity awards, will have voting rights and will have the right to receive dividends, if any, prior to the time when the restrictions lapse. |
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Restricted Stock Units. The Hotel Tonight Plan provides that we may issue RSUs which may be settled in either cash or common stock. The administrator will establish any vesting conditions based on continued employment or service or performance criteria applicable to RSUs. Unlike restricted stock, stock underlying RSUs will not be issued until the restricted stock units have vested, and recipients of RSUs generally will have no rights as a stockholder prior to the time when vesting conditions are satisfied. |
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Other Stock or Cash-Based Awards. The Hotel Tonight Plan provides that the administrator may grant other incentives payable in cash or common stock subject to such terms and conditions as it deems appropriate. |
Adjustments of Awards. In the event that a stock dividend, stock split, spin-off, combination or exchange of shares, recapitalization, merger, consolidation, distribution to stockholders other than a normal cash dividend, or other change in the company’s corporate or capital structure results in (i) the outstanding shares of common stock, or any securities exchanged therefor or received in their place, being exchanged for a different number or kind of securities of the company or any other company or (ii) new, different or additional securities of the company or any other company being received by the holders of shares of common stock, then the administrator will make proportional adjustments in the maximum number and kind of securities available for issuance under the Hotel Tonight Plan, the maximum number and kind of securities issuable as ISOs, and the number and kind of securities that are subject to any outstanding award and per share price of such securities.
Change in Control. In the event of a change in control in which the successor or acquiring company does not assume or substitute outstanding awards, then the vesting, and as applicable, exercisability, of such awards will accelerate in full. The administrator may also provide for the termination of outstanding awards upon a change in control in exchange for a cash payment in the amount of the acquisition price less any exercise or purchase price.
Amendment and Termination. Our board of directors may amend or terminate the Hotel Tonight Plan at any time, subject to stockholder approval as required by applicable law. In connection with the effectiveness of our 2020 Plan, no further awards will be granted under the Hotel Tonight Plan.
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2018 Equity Incentive Plan
Our board of directors adopted, and our stockholders approved, our 2018 Plan, effective as of March 15, 2018, and the 2018 Plan has subsequently been amended. The 2018 Plan provides for the grant of ISOs, NSOs, stock appreciation rights, or SARs, restricted stock and RSUs covering our Class A or Class B common stock. As of September 30, 2020, options to purchase 6,408,714 shares of our common stock at a weighted-average exercise price per share of $49.77 and 51,916,176 RSUs remained outstanding under the 2018 Plan. In connection with the effectiveness of our 2020 Plan, no further awards will be granted under the 2018 Plan. However, all outstanding awards will continue to be governed by their existing terms.
Administration. Our board of directors or a committee thereof appointed by our board of directors has the authority to administer the 2018 Plan and the awards granted under it. The administrator’s authority includes the authority to select the service providers to whom awards will be granted under the 2018 Plan, the number of shares to be subject to those awards under the 2018 Plan, and the terms and conditions of the awards granted. In addition, the administrator has the authority to construe and interpret the 2018 Plan and to prescribe, amend and rescind rules and regulations relating to the 2018 Plan.
Awards. The 2018 Plan provides that the administrator may grant or issue options, including ISOs and NSOs, SARs, restricted stock and RSUs to employees, consultants and directors; provided that only employees may be granted ISOs.
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Stock Options. The 2018 Plan provides for the grant of ISOs or NSOs. ISOs may be granted only to employees. NSOs may be granted to employees, directors or consultants. The exercise price of ISOs granted to employees who at the time of grant own stock representing more than 10% of the voting power of all series of our common stock may not be less than 110% of the fair market value per share of our common stock on the date of grant, and the exercise price of options granted to any other employees may not be less than 100% of the fair market value per share of our common stock on the date of grant, unless otherwise determined by the administrator. |
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Stock Appreciation Rights. The 2018 Plan provides for the grant of SARs. Each SAR will be governed by a SAR agreement. The exercise price of SARs may not be less than 100% of the fair market value per share of our common stock on the date of grant and will be settled in cash or shares or a combination thereof, having a value equal to the difference between the fair market value of the shares on the date of exercise and the exercise price, multiplied by the number of shares subject to the SAR that are being exercised. |
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Restricted Stock Awards. The 2018 Plan provides for the grant of restricted stock awards. Each restricted stock award will be governed by a restricted stock award agreement, which will detail the restrictions on transferability, risk of forfeiture and other restrictions the administrator approves. In general, restricted stock may not be sold, transferred, pledged, hypothecated, margined or otherwise encumbered until restrictions are removed or expire. Holders of restricted stock, unlike recipients of other equity awards, will have voting rights and will have the right to receive dividends, if any, prior to the time when the restrictions lapse. |
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Restricted Stock Units. The 2018 Plan provides that we may issue RSUs which may be settled in either cash or common stock. Each RSU award will be governed by a restricted stock unit award agreement that will set forth any vesting conditions based on continued employment or service or on performance criteria established by the administrator. Unlike restricted stock, stock underlying RSUs will not be issued until the restricted stock units have vested, and recipients of RSUs generally will have no rights as a stockholder prior to the time when vesting conditions are satisfied. |
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Adjustments of Awards. In the event that the number of outstanding shares of the company’s Class A or Class B common stock is changed by a stock dividend, recapitalization, stock split, reverse stock split, subdivision, combination, reclassification or similar change in the capital structure of the company without consideration, then the number of shares reserved for issuance under the plan, the exercise or purchase prices of and shares subject to outstanding awards will be proportionately adjusted.