Table of Contents
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange
Act of 1934 (Amendment No. )
Filed by the Registrant
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Confidential, For Use of
the Commission Only (as permitted by Rule 14a-6(e)(2)) |
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[X] |
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Definitive Proxy
Statement |
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[ ] |
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Definitive Additional
Materials |
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EBAY INC |
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(Name of Registrant as
Specified In Its Charter) |
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of Person(s) Filing Proxy Statement, if Other Than the
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Table of
Contents
NOTICE OF 2015 ANNUAL
MEETING
OF STOCKHOLDERS AND
PROXY STATEMENT
Friday, May 1, 2015
Town
Square, 2161 North First Street, San Jose, California 95131
Table of
Contents
2065 Hamilton Avenue San Jose, California
95125
NOTICE OF ANNUAL MEETING OF
STOCKHOLDERS |
To Be Held On May 1,
2015
To the Stockholders of eBay
Inc.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of eBay Inc., a Delaware
corporation (eBay, we, or the Company), will be held on Friday, May 1, 2015, at
8:00 a.m. Pacific time at Town Square, 2161 North First Street, San Jose,
California 95131 for the following purposes:
1. |
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To vote on the election of 15
director nominees to the eBay Board of Directors, each to hold office
until our 2016 Annual Meeting of Stockholders. |
2. |
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To approve, on an advisory basis,
the compensation of our named executive officers. |
3. |
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To approve the material terms,
including the performance goals, of the amendment and restatement of the
eBay Incentive Plan, for purposes of satisfying the requirements of
Section 162(m) of the Internal Revenue Code. |
4. |
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To ratify the appointment of
PricewaterhouseCoopers LLP as our independent auditors for our fiscal year
ending December 31, 2015. |
5. |
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To consider three stockholder
proposals, if properly presented before the meeting. |
6. |
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To transact such other business
as may properly come before the meeting or any adjournment or postponement
of the meeting. |
These business items are described more
fully in the Proxy Statement accompanying this Notice.
The Board of Directors has fixed the close
of business on March 18, 2015 as the record date for identifying those
stockholders entitled to notice of and to vote at this Annual Meeting and at any
adjournment or postponement of this meeting.
By Order of the Board of
Directors
Michael R.
Jacobson
Secretary
Table of
Contents
2015 ANNUAL MEETING
OF STOCKHOLDERS
PROXY
STATEMENT
investor.ebayinc.com 1
Table of
Contents
This summary highlights information
contained elsewhere in this Proxy Statement. This summary does not contain all
of the information that you should consider, and you should read the entire
Proxy Statement carefully before voting.
MEETING INFORMATION
Date |
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Time |
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Location |
Friday, May 1, 2015 |
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8:00 a.m. Pacific time |
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Town Square, 2161 North First Street, San Jose,
California 95131 |
HOW TO VOTE
YOUR VOTE IS
IMPORTANT. You are eligible to vote if you were a stockholder at the
close of business on March 18, 2015. Even if you plan to attend the meeting,
please vote as soon as possible using any of the
following methods. In all cases, you should have your proxy card or voting
instruction form on hand and follow the instructions:
By Internet |
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By Telephone |
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By Mailing Your Proxy Card |
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You can vote your shares
online at www.proxyvote.com. |
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You can vote your shares by
calling +1 (800) 690-6903. |
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You can vote by mail
by marking, dating and signing your proxy card or
voting instruction form and returning it in the
postage-paid envelope. |
PROPOSALS REQUIRING YOUR VOTE
|
|
Description |
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Boards Voting Recommendation |
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Page Reference (for
more detail) |
Proposal 1 |
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Election of 15 directors to hold office until our
2016 Annual |
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FOR each Director |
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17 |
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Meeting of Stockholders |
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nominee |
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Proposal 2 |
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Advisory vote to approve compensation of our
named |
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FOR |
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29 |
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executive officers |
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Proposal 3 |
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Material terms, including the performance
goals, of the |
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FOR |
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30 |
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amendment and restatement of the eBay
Incentive Plan |
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Proposal 4 |
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Ratification of
PricewaterhouseCoopers LLP as our |
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FOR |
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33 |
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independent auditors for 2015 |
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Proposals 5-7 |
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Three stockholder proposals |
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AGAINST each proposal |
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36-43 |
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2 |
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2015 Annual Meeting of
Stockholders |
Table of
Contents
PROXY STATEMENT SUMMARY
CORPORATE GOVERNANCE
The Board of Directors of eBay Inc. is
responsible for (i) providing advice and oversight of the strategic and
operational direction of the Company; and (ii) overseeing the Companys
executive management to ensure the Company operates in ways that support the
long-term interest of our stockholders and the stakeholders we serve. The
following is a list of governance provisions that demonstrate eBays commitment
to transparency and accountability:
✓ |
Strong board
independence (13 of 15 director nominees are independent) |
|
✓ |
Clawback
policy |
✓ |
Declassified Board of
Directors with all members standing for annual election |
|
✓ |
Stock ownership
requirements for our executive officers and directors |
✓ |
Majority vote standard
for uncontested director elections |
|
✓ |
Stockholder right to
call a special meeting |
✓ |
Separate Chairman and
CEO roles |
|
✓ |
Strong stockholder
engagement practices |
✓ |
Simple majority vote
standard for bylaw/charter amendments and transactions |
|
✓ |
Anti-hedging and
anti-pledging policies |
✓ |
Independent Chairman or Lead Independent Director with robust
responsibilities |
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investor.ebayinc.com 3
Table of Contents
PROXY STATEMENT SUMMARY
2015 DIRECTOR NOMINEES
Name & Primary
Occupation |
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Age |
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Director since |
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Independent |
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Committee
Memberships* |
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Other Public Company Boards |
Fred D.
Anderson Co-Founder, Elevation Partners |
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70 |
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2003 |
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YES |
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Audit (Chair) |
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1 |
Edward W.
Barnholt President and CEO, Agilent Technologies,
Inc. (retired) |
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71 |
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2005 |
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YES |
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Compensation (Chair) |
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2 |
Anthony J. Bates President,
GoPro, Inc. |
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47 |
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2015 |
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YES |
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2 |
Jonathan
Christodoro Managing Director, Icahn Capital LP |
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38 |
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2015 |
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YES |
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4 |
Scott D.
Cook Co-Founder, Intuit, Inc. |
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62 |
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1998 |
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YES |
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Governance |
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2 |
John J.
Donahoe President and CEO, eBay Inc. |
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54 |
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2008 |
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NO |
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2 |
David W.
Dorman Chairman and CEO, AT&T Corporation
(retired) |
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61 |
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2014 |
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YES |
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Compensation |
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3 |
Bonnie S.
Hammer Chairman, NBCUniversal
Cable Entertainment |
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64 |
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2015 |
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YES |
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1 |
Gail J.
McGovern President and CEO, American Red Cross |
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63 |
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2015 |
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YES |
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1 |
Kathleen C.
Mitic Founder and CEO, Sitch, Inc. |
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45 |
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2011 |
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YES |
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Compensation Governance |
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1 |
David M.
Moffett CEO, Federal Home Loan Mortgage
Corp. (retired) |
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63 |
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2007 |
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YES |
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Audit |
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2 |
Pierre M.
Omidyar Founder, Chairman, eBay Inc. |
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47 |
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1996 |
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NO |
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Thomas J.
Tierney Chairman and co-founder, The
Bridgespan Group |
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61 |
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2003 |
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YES |
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Compensation Governance (Chair) |
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Perry M.
Traquina Former Chairman, CEO, and Managing Partner of
Wellington Management Company LLP |
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58 |
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2015 |
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YES |
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Frank D.
Yeary Executive Chairman, CamberView
Partners, LLC |
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51 |
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2015 |
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YES |
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1 |
*Audit = Audit Committee; Compensation
= Compensation Committee; Governance = Corporate Governance and Nominating
Committee
4 |
|
2015 Annual Meeting of
Stockholders |
Table of Contents
PROXY STATEMENT SUMMARY
EXECUTIVE COMPENSATION
The goals of our executive compensation
program are to:
● |
align compensation with our business objectives and
performance, |
● |
motivate named executive officers (NEOs) to enhance long-term
stockholder value, |
● |
position us competitively among the companies against which we
recruit and compete for talent, and |
● |
enable us to attract, retain, and reward NEOs and other key
employees who contribute to our long-term
success. |
The following shows the breakdown of
reported 2014 compensation for our NEOs that were employed for all of 2014.*
This chart illustrates the predominance of equity incentives and
performance-based components in our regular executive compensation
program.
|
Time-Based Restricted Stock Units (RSUs) |
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Salary |
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Other Compensation |
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Annual Cash Incentive (ACI) |
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Stock Options |
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Performance-Based Restricted
Stock Units (PBRSUs) |
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Performance-Based (PBRSUs,
options, and 75% of Annual Cash
Incentive) |
*Mr. Carges and Mr. Marcus terminated
employment during 2014 and therefore have not been included for purposes of the
chart. In addition, Mr. Schulman, who was hired as President of PayPal and is
its CEO-designee following the spin-off of our PayPal business, was excluded for
purposes of this chart because he was hired on September 30, 2014 and was only
employed for a approximately one-quarter of the year. See pages 57-58 and 60 and the compensation tables below for
additional details regarding Mr. Schulmans reported 2014
compensation.
investor.ebayinc.com 5
Table of Contents
PROXY STATEMENT SUMMARY
Our pay practices align with and
support the goals of our executive pay program and demonstrate our commitment to
sound compensation and governance practices.
We align
executive compensation with the interests of our
stockholders |
|
✓ |
Emphasize pay for performance alignment |
✓ |
Deliver a majority of total compensation opportunity in our regular
compensation program through performance-based compensation: PBRSUs, stock
options, and annual cash incentives |
✓ |
Set meaningful stock
ownership requirements for executive officers |
We avoid
excessive risk-taking |
|
✓ |
Maintain a clawback policy |
✓ |
Use multiple
performance measures, caps on incentive payments, and overlapping two-year
performance periods for PBRSU awards |
We adhere to
compensation best practices |
|
✓ |
The Compensation Committee retains an independent compensation
consultant |
✓ |
Prohibit hedging and pledging transactions by executive officers
and directors |
✓ |
Provide only limited perquisites to executive officers that are not
available to all employees |
✕ |
No tax gross-ups for change in control benefits and
perquisites |
✕ |
No single trigger acceleration of PBRSUs, RSUs, or stock options
upon a change in control |
✕ |
No repricing or buyout of underwater stock options without
stockholder approval |
✕ |
No dividends or dividend equivalents accrued or paid on PBRSUs or
RSUs |
Supporting our Executive Compensation
Program |
Our Compensation
Committee believes that the goals of our executive compensation program are
appropriate and that the program is properly structured to achieve those goals.
We have engaged in ongoing discussions with our investors, who generally support
those goals and the program, and we believe our stockholders as a whole should
support them as well.
6 |
|
2015 Annual Meeting of
Stockholders |
Table of Contents
CORPORATE GOVERNANCE
The Board of Directors of eBay Inc.
(the Board or the eBay Board) is responsible for (i) providing advice and
oversight of the strategic and operational direction of the Company; and (ii)
overseeing the Companys executive management; each to ensure the Company
operates in ways that support the long-term interest of our stockholders and the
stakeholders we serve. To do this effectively, the Company has established clear
and specific Governance Guidelines for the eBay Board (referred to as our
Corporate Governance Guidelines) that, along with Board committee charters and
our Code of Business Conduct and Ethics (referred to as our Code of Business
Conduct), provides the framework for the governance of the Company.
The following is a list of governance
provisions that demonstrate eBays commitment to transparency and
accountability:
✓ |
Strong board
independence (13 of 15 director nominees are independent) |
|
✓ |
Clawback
policy |
✓ |
Declassified Board of
Directors with all members standing for annual election |
|
✓ |
Stock ownership
requirements for our executive officers and directors |
✓ |
Majority vote standard
for uncontested director elections |
|
✓ |
Stockholder right to
call a special meeting |
✓ |
Separate Chairman and
CEO roles |
|
✓ |
Strong stockholder
engagement practices |
✓ |
Simple majority vote
standard for bylaw/charter amendments and transactions |
|
✓ |
Anti-hedging and
anti-pledging policies |
✓ |
Independent Chairman or Lead Independent Director with robust
responsibilities |
|
|
|
A complete copy of our Corporate
Governance Guidelines, the charters of our principal Board committees, and our
Code of Business Conduct can be found on our investor relations website at http://investor.ebayinc.com/corporate-governance.cfm. Any
changes in these governance documents will be reflected in the same location on
our website. Keep in mind that information contained on our investor relations
website is not part of this proxy statement.
OUR CORPORATE GOVERNANCE PRACTICES
We believe that strong corporate
governance practices that provide meaningful rights to our stockholders and
ensure board accountability are key to our relationship with our stockholders.
To help our stockholders understand our commitment to this relationship and our
governance practices, the Board has adopted a set of Corporate Governance
Guidelines to set a framework within which the Board will conduct its business.
Our Corporate Governance Guidelines can be found on our investor relations
website at http://investor.ebayinc.com/corporate-governance.cfm and
are summarized below along with certain other of our governance
practices.
Independence. The rules
of the Nasdaq Global Select Market require listed companies to have a board of
directors with at least a majority of independent directors. These rules have
both objective tests and a subjective test for determining who is an
independent director. The objective tests state, for example, that a director
is not considered independent if he or she is an employee of the Company, or is
a partner in, or a controlling stockholder or executive officer of, an entity to
which the Company made, or from which the Company received, payments in the
current or any of the past three fiscal years that exceed 5% of the recipients
consolidated gross revenue for that year. The subjective test requires our Board
to affirmatively determine that a director does not have a relationship that
would interfere with the directors exercise of independent judgment in carrying
out his or her responsibilities. On an annual basis, each member of our Board is
required to complete a questionnaire designed to provide information to assist
the Board in determining whether the director is independent under the listing
standards of the Nasdaq Global Select Market and our Corporate Governance
Guidelines, and whether members of our Audit Committee and Compensation
Committee satisfy additional Securities and Exchange Commission (SEC) and Nasdaq independence requirements. Our Board
has adopted guidelines setting forth certain categories of transactions,
relationships, and arrangements that it has deemed immaterial for purposes of
making its determination regarding a directors independence, and does not
consider any such transactions, relationships, and arrangements in making its
subjective determination.
Our Board has determined that each of
the following directors is independent under the listing standards of the Nasdaq
Global Select Market and under eBays Corporate Governance
Guidelines: Fred D. Anderson, Edward W. Barnholt, Anthony J. Bates, Jonathan
Christodoro, Scott D. Cook, David W. Dorman,
investor.ebayinc.com 7
Table of Contents
CORPORATE GOVERNANCE
William C. Ford, Jr., Bonnie S. Hammer,
Gail J. McGovern, Kathleen C. Mitic, David M. Moffett, Richard T. Schlosberg,
III, Thomas J. Tierney, Perry M. Traquina, and Frank D. Yeary.
The Board limits membership on the
Audit Committee, the Compensation Committee, and the Corporate Governance and
Nominating Committee to independent directors. Our Corporate Governance
Guidelines require any director who has previously been determined to be
independent to inform the Lead Independent Director and our Corporate Secretary
of any change in his or her principal occupation or status as a member of the
Board of any other public company, or any change in circumstance that may cause
his or her status as an independent director to change.
Leadership
Structure and Lead Independent Director. In accordance with our
Bylaws, our Board elects our Chairman and our Chief Executive Officer, or CEO.
Our Corporate Governance Guidelines require that the roles of Chairman and CEO
be held by separate individuals. Mr. Omidyar currently serves as our Chairman.
The Board believes that the separation of the offices of the Chairman and CEO is
appropriate as it aids in the Boards oversight of management and it allows our
CEO to focus primarily on his management responsibilities.
Our independent directors have also
designated a Lead Independent Director. Mr. Moffett is currently the Lead
Independent Director, having been appointed to a two-year term beginning at the
conclusion of our 2014 Annual Meeting that will expire following our 2016 Annual
Meeting. The Lead Independent Directors roles and responsibilities are detailed
in the Corporate Governance Guidelines and include:
Coordinating with the CEO and Chairman to develop meeting
agenda and approving final meeting agenda, ensuring there is sufficient
time to discuss all agenda items; |
Coordinating with the CEO and Chairman on the materials sent
to the Board, including but not limited to the scope, quality and
timeliness of the information, and approving final meeting
materials; |
Calling closed sessions of the independent
directors; |
Chairing closed sessions of the independent
directors; |
Leading Board meetings in the absence of the
Chairman; |
If requested by major stockholders, ensuring that he is
available for consultation and direct communication; and |
Leading the annual Board
self-assessment, including acting on director feedback as
needed. |
In addition, the Lead Independent
Director, together with the chair of the Corporate Governance and Nominating
Committee, conducts interviews to confirm the continued qualification and
willingness to serve of each director whose term is expiring at an annual
meeting prior to the time at which directors are nominated for
re-election.
Committee
Responsibilities. Board committees
help the Board run effectively and efficiently, but do not replace the oversight
of the Board as a whole. There are currently three principal Board committees:
the Audit Committee, the Compensation Committee, and the Corporate Governance
and Nominating Committee. Each committee meets regularly and has a written
charter that has been approved by the Board. In addition, at each regularly
scheduled Board meeting, a member of each committee reports on any significant
matters addressed by the committee since the last Board meeting. Each committee
performs an annual self-assessment to evaluate its effectiveness in fulfilling
its obligations. In addition to our formal committee structure, directors with
an interest and background in technology meet regularly with our senior
technologists and report significant matters to the Board. The directors that do
this regularly are Mr. Cook, Ms. Mitic, and Mr. Omidyar.
Role in Risk
Oversight. Risk is inherent with every
business, and how well a business manages risk can ultimately determine its
success. We face a number of risks, including economic, financial, legal and
regulatory, operational, and other risks, such as the impact of competition.
Management is responsible for the day-to-day management of the risks that we
face, while the Board, as a whole and through its committees, has responsibility
for the oversight of risk management. In its risk oversight role, the Board is
responsible for satisfying itself that the risk management framework and
supporting processes as implemented by management are adequate and functioning
as designed.
Audit
Committees Role in Risk Oversight. While the Board is ultimately responsible for risk oversight at eBay, the
Board has delegated to the Audit Committee the primary responsibility for the
oversight of risks facing our businesses. The Audit Committees charter provides
that it will discuss our major risk exposures, including financial, operational,
privacy, security, competition, legal, and regulatory risks, and the steps we
have taken to detect, monitor, and actively manage such exposures. The Audit
Committee reviews with our Senior Vice President, Legal Affairs significant
legal, compliance, and regulatory matters that could have a material impact on
our financial statements or our business, including material notices to or
inquiries received from governmental agencies. We also have embedded an
enterprise
8 |
|
2015 Annual Meeting of Stockholders |
Table of Contents
CORPORATE GOVERNANCE
risk management, or ERM,
program across our core businesses, aligned with our Company-wide initiative
involving the Audit Committee, management, and other personnel. The ERM
framework is designed to identify, assess, prioritize, and manage our major risk
exposures which could affect our ability to execute on our corporate strategy
and fulfill our business objectives. The ERM program is designed to enable the
Audit Committee to establish a mutual understanding with management of the
effectiveness of the Companys risk management practices and capabilities, to
review the Companys risk exposure and risk tolerance, and to elevate certain
key risks for oversight at the Board level.
Managements
Role in Risk Oversight. Our Vice
President, Chief Audit Executive, or CAE, is responsible for our internal audit
function and our risk governance framework, which includes risk assessment,
monitoring, and reporting. The CAE reports directly to the Audit Committee, and
the Audit Committee reviews and evaluates the CAEs appointment, compensation,
and performance and provides the CAE with direct access to the Audit Committee.
The CAE facilitates the Audit Committees review and approval of the internal
audit plan and provides regular reporting on audit activities. In addition,
through consultation with management, the CAE periodically assesses the major
risks facing eBay and coordinates with the executives responsible for such risks
through the risk governance process. The CAE periodically reviews with the Audit
Committee the major risks facing eBay and the steps management has taken to
detect, monitor, and manage those risks within the agreed risk tolerance. The
executive responsible for managing a particular risk may also report to the
Audit Committee on how the risk is being managed and progress towards agreed
mitigation goals.
In addition to the general oversight
responsibility that has been delegated to the Audit Committee, other committees
review the risks within their areas of responsibility and expertise. For
example, the Compensation Committee reviews the risks associated with our
compensation policies and practices and our succession planning process, and the
Corporate Governance and Nominating Committee reviews the risks associated with
our overall corporate governance.
Risk Assessment
of Compensation Policies and Practices. We have assessed the compensation policies and practices for our
employees and concluded that they do not create risks that are reasonably likely
to have a material adverse effect on the Company. This analysis was presented to
the Audit Committee and the Compensation Committee, both of which agreed with
this conclusion.
Corporate
Hotline. We have established a
corporate hotline that is operated by a third party, and allows any employee to
confidentially and anonymously (where legally permissible) lodge a complaint
about any accounting, internal control, auditing, or other matters of
concern.
Stockholder
Communication. eBay has a practice of
regularly engaging with stockholders to seek their feedback. Stockholders may
also communicate with the Board or individual directors care of the Corporate
Secretary, eBay Inc., 2065 Hamilton Avenue, San Jose, California 95125. The
Corporate Governance and Nominating Committee has delegated responsibility for
initial review of stockholder communications to our Corporate Secretary. This
process assists the Board in reviewing and responding to stockholder
communications in an appropriate manner. The Corporate Governance and Nominating
Committee has instructed our Corporate Secretary to review correspondence
directed to the Board and its principal committees and, at his discretion, not
to forward items solely related to complaints by users with respect to ordinary
course of business customer service and satisfaction issues, or that he deems to
be of a commercial or frivolous nature or otherwise inappropriate for the
Boards or its committees consideration.
Attendance at
Annual Meetings. Absent exigent
circumstances, all directors are expected to attend eBays annual meeting of
stockholders in person or by telephone or video call. Except for Mr. Andreessen,
all of our directors serving on our Board at the time of our last annual meeting
of stockholders, which was held in May 2014, attended that meeting.
Formal Closed
Sessions of Outside Directors. As part
of each regularly scheduled Board meeting, the outside directors have the
opportunity to meet without our management or the other directors. The Lead
Independent Director leads such discussions.
Board
Compensation. Board compensation is
determined by the Compensation Committee, and consists of a mixture of equity
compensation and cash compensation. Board compensation is reviewed annually by
the Compensation Committee. A more detailed description of current Board
compensation can be found under the heading Compensation of Directors
below.
Stock Ownership
Guidelines. Our Board has adopted
stock ownership guidelines to better align the interests of our directors and
executive officers with the interests of our stockholders and further promote
our commitment to sound corporate governance. Under these guidelines, our
executive officers are required to achieve ownership of eBay common stock valued
at
investor.ebayinc.com 9
Table of Contents
CORPORATE GOVERNANCE
three times their annual base salary
(five times in the case of our CEO). Our non-employee directors are required to
achieve ownership of eBay common stock valued at three times the amount of the
annual retainer payable to directors within three years of joining the Board, or
in the case of directors serving at the time the guidelines were initially
adopted, within three years of the date of adoption of the guidelines. Our stock
ownership guidelines can be found on our investor relations website at http://investor.ebayinc.com/corporate-governance.cfm.
The ownership levels of our executive
officers and directors as of March 18, 2015 are set forth in the section
entitled Security Ownership of Certain Beneficial Owners and Management
below.
Hedging and
Pledging Policy. The Companys insider
trading policy prohibits directors, executive officers, and other employees from
entering into any hedging or monetization transactions relating to our
securities or otherwise trading in any instrument relating to the future price
of our securities, such as a put or call option, futures contract, short sale,
collar, or other derivative security. The policy also prohibits directors and
executive officers from pledging eBay common stock as collateral for any
loans.
Clawbacks. In 2012, we
implemented changes to the eBay Incentive Plan and the Companys equity
incentive plans to provide that awards made under those plans are subject to a
clawback provision. In January 2014, the terms of the clawback were adopted by
the Compensation Committee subject to amendment to comply with the SEC rules to
be issued in accordance with the Dodd-Frank Wall Street Reform and Consumer
Protection Act of 2010, or the Dodd-Frank Act.
Outside
Advisors. The Board may retain outside
advisors of its choosing at the Companys expense without obtaining managements
consent. In addition, each of the principal committees may retain outside
advisors of its choosing without obtaining either the Boards or managements
consent.
Conflicts of
Interest. We expect our directors,
executive officers, and other employees to conduct themselves with the highest
degree of integrity, ethics, and honesty. Our credibility and reputation depend
upon the good judgment, ethical standards, and personal integrity of each
director, executive officer, and employee. Our Corporate Governance Guidelines
prohibit directors from serving on the board, or in a senior executive role, of
another company that would create a significant conflict of interest. Our Code
of Business Conduct requires that directors, executive officers, and other
employees disclose actual or potential conflicts of
interest and recuse themselves from related decisions. In order to better
protect us and our stockholders, we regularly review our Code of Business
Conduct and related policies to ensure that they provide clear guidance to our
directors, executive officers, and employees.
The Company also has practices that
address potential conflicts in circumstances where a non-employee director is a
control person of an investment fund that desires to make an investment in or
acquire a company that may compete with one of the Companys businesses. Under
those circumstances, the director is required to notify the Companys CEO and
General Counsel of the proposed transaction, and the Companys senior management
then assesses the nature and degree to which the investee company is competitive
with the Companys businesses, as well as the potential overlaps between the
Company and the investee company. If the Companys senior management determines
that the competitive situation and potential overlaps between eBay and the
investee company are acceptable, approval of the transaction by the Company
would be conditioned upon the director agreeing to certain limitations
(including refraining from joining the board of directors of the investee
company or conveying any confidential or proprietary material between the
Company and the investee company, abstaining from being the primary
decision-maker for the investment fund with respect to the investee company, and
recusing himself/herself from portions of Company board meetings that contain
competitive information reasonably pertinent to the investee company). All
transactions by investment funds in which a non-employee director is a control
person also remain subject in all respects to the Boards written policy for the
review of related person transactions, discussed under the section entitled
Certain Transactions with Directors and Officers below.
Board
Effectiveness; Director Assessment; Board Education. It is important that the Board and its committees are
performing effectively and in the best interests of the Company and its
stockholders. The Board performs an annual self-assessment, led by the Lead
Independent Director, to evaluate its effectiveness in fulfilling its
obligations. As part of this annual self-assessment, directors are able to
provide feedback on the performance of other directors. The Lead Independent
Director then follows up on this feedback and takes such further action with
directors receiving comments and other directors as he or she deems appropriate.
In addition, the Company provides membership in the National Association of
Corporate Directors to all Board members to assist them in remaining current
with exemplary board and committee practices and developments in corporate
governance.
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Succession Planning. The Board recognizes the importance of effective executive
leadership to eBays success. We conduct an annual review process that includes
succession plans for our senior leadership positions. These succession plans are
reviewed and approved by our CEO, and details on these succession plans,
including potential successors for members of our executive staff (including the
CEO), are presented to the Board. In addition, the Board annually reviews and
updates our CEO succession plan, which includes formal criteria for the CEO
position used to evaluate potential successors and addresses the possibility of
an emergency situation. In conducting this review, the Board considers, among
other factors, organizational and operational needs, competitive challenges,
leadership/management potential and development, and emergency
situations.
The Board has also developed a set of
guiding principles relating to Board membership. The Board believes that as the Companys businesses and industries
change, the Board must add members with highly relevant professional experience.
In addition, the Board believes that a certain amount of director turnover is to
be expected and desirable, and while it does not have term limits, the Board
believes that up to nine to twelve years will generally be the expected time
commitment from any individual director.
Auditor
Independence. We have taken a number of steps
to ensure continued independence of our outside auditors. Our independent
auditors report directly to the Audit Committee, and we limit the use of our
auditors for non-audit services. The fees for services provided by our auditors
in 2014 and 2013 and our policy on pre-approval of non-audit services are
described under Proposal 4 Ratification of Appointment of Independent
Auditors below.
BOARD COMMITTEES AND
MEETINGS
During 2014, our Board held 12
meetings, and each Board member attended at least 75% of the aggregate of all of
our Board meetings and committee meetings for committees on which such director served. The Board has
three principal committees: the Audit Committee, the Compensation Committee, and
the Corporate Governance and Nominating Committee.
Our Board has a separately-designated
standing Audit Committee established in accordance with Section 3(a)(58)(A) of
the Securities Exchange Act of 1934, as amended, or the Exchange Act. Our Audit
Committee consists of Mr. Anderson, Mr. Moffett, and Mr. Schlosberg, each of
whom is independent in accordance with the rules and regulations of the Nasdaq
Global Select Market and the SEC. Mr. Anderson is the chairman of the committee.
Our Board has determined that Mr. Anderson is an audit committee financial
expert as defined by the SEC. The Audit Committee met 10 times during 2014. The
primary responsibilities of the Audit Committee are to:
(1) |
Meet with our independent auditors
to review the results of the annual audit and to discuss our financial
statements, including the independent auditors judgment about the quality
of accounting principles, the reasonableness of significant judgments, the
clarity of the disclosures in our financial statements, our internal
control over financial reporting, and managements report with respect to
internal control over financial reporting; |
(2) |
Meets with our independent
auditors to review the interim financial statements prior to the filing of
our Quarterly Reports on Form 10-Q; |
(3) |
Recommend to the Board the
independent auditors to be retained by us; |
(4) |
Oversee the independence of the
independent auditors, evaluate the independent auditors performance, and
review and approve the fees of the independent auditors; and |
(5) |
Receive and
consider the independent auditors comments as to controls, adequacy of
staff, and management performance and procedures in connection with audit
and financial controls, including our system to monitor and manage
business risks and our legal and ethical compliance
programs. |
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CORPORATE GOVERNANCE
Additionally, the Audit Committee
approves the compensation of our CAE, who meets with the committee regularly
without other members of management present. The Audit Committee also has
primary responsibility for the oversight of risks facing our business. See Our
Corporate Governance Practices - Audit Committees Role in Risk
Oversight.
The Audit Committee also prepares the
Audit Committee Report for inclusion in our proxy statement, approves audit and
non-audit services provided to us by our independent auditors, considers
conflicts of interest and reviews all transactions with related persons involving executive officers or
Board members that are reasonably expected to exceed specified thresholds, and
meets with our Senior Vice President, Legal Affairs, to discuss our major risk
exposures, including financial, operational, privacy, security, competition,
legal, and regulatory risks, and review significant
legal, compliance, and regulatory matters that could have a material impact on our
financial statements or our business, including material notices to or inquiries
received from governmental agencies. You can view our Audit Committee Charter on
the corporate governance section of our investor relations website at
http://investor.ebayinc.com/corporate-governance.cfm.
Our Compensation Committee consists of
Mr. Barnholt, Mr. Dorman, Mr. Ford, Ms. Mitic, and Mr. Tierney, each of whom is
independent in accordance with the rules and regulations of the Nasdaq Global
Select Market. Mr. Barnholt is the chairman of the committee. Mr. Dorman joined
the committee in June 2014. The committee met eight times during 2014. The
primary responsibilities of the Compensation Committee are to:
(1) |
Review and approve all
compensation programs applicable to directors and executive officers, the
overall strategy for employee compensation, and the compensation of our
CEO and our other executive officers; |
(2) |
Oversee and monitor compliance
with the Companys stock ownership guidelines applicable to directors and
executive officers; |
(3) |
Review the Compensation Discussion
and Analysis contained in our proxy statement and prepare the Compensation
Committee Report for inclusion in our proxy statement; and |
(4) |
Review and
consider the results of any advisory stockholder votes on executive
compensation. |
Additionally, the Compensation
Committee assesses on an annual basis the independence of its compensation
consultants, outside legal counsel, and other compensation advisers. The Compensation Committee Charter permits
the committee to, in its discretion, delegate all or a portion of its duties and
responsibilities to a subcommittee of the committee. You can view our
Compensation Committee Charter on the corporate governance section of our
investor relations website at
http://investor.ebayinc.com/corporate-governance.cfm. Additional disclosure
regarding the role of the Compensation Committee in compensation matters,
including the role of consultants in compensation
decisions, can be found under Compensation Discussion and Analysis Compensation Decisions for 2014 and Role of Consultants in
Compensation Decisions below.
Compensation Committee Interlocks
and Insider Participation. All members of the
Compensation Committee during 2014 were independent directors, and no member was
an employee or former employee of eBay. No Compensation Committee member had any
relationship requiring disclosure under Item 404 of Regulation S-K promulgated
by the SEC. During 2014, none of our executive officers served on the
compensation committee (or its equivalent) or board of directors of another
entity whose executive officer served on our Compensation Committee or
Board.
Corporate Governance and Nominating
Committee |
Our Corporate Governance and Nominating
Committee consists of Mr. Cook, Ms. Mitic, Mr. Schlosberg, and Mr. Tierney.
Effective September 2014, Mr. Tierney became the chairman of the committee.
Previously, Mr. Schlosberg served as chairman of the committee. The committee
met four times during 2014. All members of our Corporate Governance and
Nominating Committee are independent under the listing standards of the Nasdaq
Global Select Market.
The primary responsibilities of the
Corporate Governance and Nominating Committee include:
(1) |
Making recommendations to the
Board as to the appropriate size of the Board or any Board
committee; |
(2) |
Reviewing the qualifications of
candidates for the Board; and |
(3) |
Making
recommendations to the Board on potential Board and Board committee
members (whether as a result of vacancies, including any vacancy created
by an increase in the size of the Board, or as part of the annual election
cycle). |
In particular, as the Company prepares
to separate its PayPal business into an independent publicly traded company, the
committee has actively sought to increase the size of the board
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CORPORATE GOVERNANCE
by adding highly qualified individuals
so that each company is well-positioned to have a strong, independent board of
directors at separation.
The committee considers nominee
recommendations from a variety of sources, including nominees recommended by
stockholders. The committee has from time to time retained an executive search
firm to help facilitate the screening and interview process of director
nominees. The committee expects that qualified candidates will have high-level
managerial experience in a relatively complex organization or be accustomed to
dealing with complex problems, and will be able to represent the interests of
the stockholders as a whole rather than special interest groups or
constituencies.
Among other factors, the committee
considers each candidate relative to the following attributes:
Character; |
Integrity; |
Judgment; |
Skills; |
Background; |
Experience of particular relevance to the
Company; |
Ability to work with others to solve complex problems;
and |
Time available to devote
to Board activities. |
The committee also considers the
interplay of a candidates background and expertise with that of other Board
members, and the extent to which a candidate may be a desirable addition to any
committee of the Board. The committee also values diversity as a factor in
selecting nominees to serve on the Board. Our Corporate Governance Guidelines
provide that the Committee should consider diversity (including gender and
race), age, international background, and expertise in evaluating potential
board members. When searching for new directors, the committee actively seeks
out qualified women and individuals from minority groups to include in the pool
from which Board nominees are chosen. Finally, the Committee also takes into
account the set of guiding principles relating to Board membership described in
Our Corporate Governance Practices Succession Planning above.
In addition to recommending director
candidates, the Corporate Governance and Nominating Committee establishes
procedures for the oversight and evaluation of the Board and management, reviews
correspondence received from stockholders, and reviews on an annual basis our
Corporate Governance Guidelines. Stockholders wishing to submit recommendations
or director nominations for our 2016 Annual Meeting of Stockholders should
submit their proposals to the Corporate Governance and Nominating Committee in
care of our Corporate Secretary in accordance with the time limitations,
procedures, and requirements described under the heading May I propose actions
for consideration at next years Annual Meeting or nominate individuals to serve
as directors? in the section entitled Questions and Answers about the Proxy
Materials and Our 2015 Annual Meeting below. You can view our Corporate
Governance and Nominating Committee Charter on the corporate governance section
of our investor relations website at
http://investor.ebayinc.com/corporate-governance.cfm.
investor.ebayinc.com 13
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SECURITY OWNERSHIP
OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain
information known to us with respect to beneficial ownership of our common stock
as of March 18, 2015 by (1) each stockholder known to us to be the beneficial
owner of more than 5% of our common stock, (2) each director and nominee for
director, (3) each of the executive officers named in the 2014 Summary
Compensation Table below, and (4) all executive officers and directors as a
group. Unless otherwise indicated below, the address for each of our executive
officers and directors is c/o eBay Inc., 2065 Hamilton Avenue, San Jose,
California 95125.
|
|
Shares Beneficially Owned
(1) |
Name of Beneficial
Owner |
|
Number |
|
Percent |
Pierre M. Omidyar
(2) |
|
96,434,558 |
|
8.0% |
BlackRock, Inc.
(3) |
|
66,796,090 |
|
5.5% |
John J. Donahoe
(4) |
|
1,988,573 |
|
* |
Robert H. Swan
(5) |
|
1,002,901 |
|
* |
Daniel H. Schulman
(6) |
|
19,275 |
|
* |
Devin N. Wenig
(7) |
|
382,574 |
|
* |
Michael R. Jacobson
(8) |
|
546,211 |
|
* |
David A. Marcus
(9) |
|
0 |
|
* |
Mark T. Carges
(10) |
|
0 |
|
* |
Fred D. Anderson
(11) |
|
9,623 |
|
* |
Edward W. Barnholt |
|
4,500 |
|
* |
Anthony J. Bates
(12) |
|
0 |
|
* |
Jonathan Christodoro
(13) |
|
0 |
|
* |
Scott D. Cook
(14) |
|
203,509 |
|
* |
David W. Dorman
(15) |
|
512 |
|
* |
William C. Ford, Jr.
(16) |
|
178,185 |
|
* |
Bonnie S. Hammer
(17) |
|
0 |
|
* |
Gail J. McGovern
(18) |
|
162 |
|
* |
Kathleen C. Mitic |
|
6,670 |
|
* |
David M. Moffett
(19) |
|
36,008 |
|
* |
Richard T. Schlosberg, III
(20) |
|
62,128 |
|
* |
Thomas J. Tierney
(21) |
|
38,508 |
|
* |
Perry M. Traquina |
|
0 |
|
* |
Frank D. Yeary
(22) |
|
0 |
|
* |
All directors and executive officers
as a group (24 persons) (23) |
|
101,438,849 |
|
8.4% |
* Less than one percent
(1) This table is based upon information supplied by officers, directors, and principal stockholders and any Schedules 13D and 13G filed with the SEC. Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. Unless otherwise indicated in the footnotes to this table, the persons and entities named in the table have sole voting and sole investment power with respect to all shares beneficially owned, subject to community property laws where applicable. Shares of our common stock subject to options that are currently exercisable or exercisable within 60 days of March 18, 2015, and restricted stock units, or RSUs, that are scheduled to vest within 60 days of March 18, 2015, are deemed to be outstanding for the purpose of computing the percentage ownership of the person holding those options, but are not treated as outstanding for the purpose of computing the percentage ownership of any other person. The percentage of beneficial ownership is based on 1,212,650,989 shares of common stock outstanding as of March 18, 2015.
(2) Mr. Omidyar is our founder and Chairman of the Board. Includes 70,000 shares held by his spouse as to which he disclaims beneficial ownership.
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SECURITY OWNERSHIP
(3) BlackRock, Inc., and its affiliates and subsidiaries have beneficial ownership of an aggregate of 66,796,090 shares of the Companys common stock, BlackRock, Inc. has sole power to vote 56,794,294 shares of the Companys common stock and sole power to dispose of 66,748,319 shares of the Companys common stock. The address for BlackRock, Inc. is 55 East 52nd Street, New York, New York 10222.
(4) Mr. Donahoe is our President and CEO. Includes 1,526,630 shares Mr. Donahoe has the right to acquire pursuant to outstanding options exercisable within 60 days of March 18, 2015, and 50,028 RSUs scheduled to vest within 60 days of March 18, 2015.
(5) Mr. Swan is our Senior Vice President, Finance and Chief Financial Officer. Includes 551,307 shares Mr. Swan has the right to acquire pursuant to outstanding options exercisable within 60 days of March 18, 2015, and 22,988 RSUs scheduled to vest within 60 days of March 18, 2015.
(6) Mr. Schulman is our President, PayPal.
(7) Mr. Wenig is our President, eBay Marketplaces. Includes 156,750 shares Mr. Wenig has the right to acquire pursuant to outstanding options exercisable within 60 days of March 18, 2015, and 20,281 RSUs scheduled to vest within 60 days of March 18, 2015.
(8) Mr. Jacobson is our Senior Vice President, Legal Affairs, General Counsel and Secretary. Includes 69,652 shares Mr. Jacobson has the right to acquire pursuant to outstanding options exercisable within 60 days of March 18, 2015, and 20,865 RSUs scheduled to vest within 60 days of March 18, 2015.
(9) Mr. Marcus is our former President, PayPal and served until June 27, 2014. Does not include ownership by Mr. Marcus as he is no longer employed by the Company and the Company does not have access to information regarding his ownership.
(10) Mr. Carges is our former Chief Technology Officer and served until November 3, 2014. Does not include ownership by Mr. Carges as he is no longer employed by the Company and the Company does not have access to information regarding his ownership.
(11) Includes, in the case of Mr. Anderson, 3,623 shares Mr. Anderson has the right to acquire pursuant to outstanding options exercisable within 60 days of March 18, 2015. The address for Mr. Anderson is Elevation Partners, 2740 Sand Hill Road, Suite 100, Menlo Park, CA 94025.
(12) The address for Mr. Bates is GoPro. Inc., 3000 Clearview Way, San Mateo, CA 94402.
(13) The address for Mr. Christodoro is Icahn Associates, 767 Fifth Avenue, 47th Floor, New York, NY 10153.
(14) Includes 31,008 shares Mr. Cook has the right to acquire pursuant to outstanding options exercisable within 60 days of March 18, 2015. The address for Mr. Cook is Intuit Inc., 2535 Garcia Avenue, Mountain View, California 94043.
(15) The address for Mr. Dorman is Knoll Ventures, Tower Place 200, Suite 1000, 3348 Peachtree Road, NE, Atlanta, Georgia 30326.
(16) Includes 300 shares held in trusts for Mr. Fords children and where Mr. Ford and/or his spouse are trustees. Mr. Ford disclaims beneficial ownership of these shares. Includes 41,128 shares Mr. Ford has the right to acquire pursuant to outstanding options exercisable within 60 days of March 18, 2015. The address for Mr. Ford is Ford Motor Company, One American Road, Dearborn, Michigan 48126.
(17) The address for Ms. Hammer is NBCUniversal, 30 Rockefeller Plaza, Suite 2187E, New York, New York 10112.
(18) The address for Ms. McGovern is American Red Cross, 430 17th Street, NW, Washington, DC 20006.
(19) Includes 31,008 shares Mr. Moffett has the right to acquire pursuant to outstanding options exercisable within 60 days of March 18, 2015.
(20) Includes 56,128 shares Mr.
Schlosberg has the right to acquire pursuant to outstanding options exercisable
within 60 days of March 18, 2015. The address for Mr. Schlosberg is c/o Bank of
San Antonio, 800 E. Sonterra Blvd., Suite 140, San Antonio, Texas
78257.
(21) Includes 31,008 shares Mr. Tierney has the right to acquire pursuant to outstanding options exercisable within 60 days of March 18, 2015. The address for Mr. Tierney is c/o The Bridgespan Group, 2 Copley Place, 7th Floor, Suite 3700B, Boston, Massachusetts 02116.
(22) The address for Mr. Yeary is
CamberView Partners, LLC, 2 Embarcadero Center, Suite 2150, San Francisco,
California 94111.
(23) Includes 2,729,740 shares subject
to options exercisable within 60 days of March 18, 2015, and 158,918 RSUs
scheduled to vest within 60 days of March 18, 2015.
SECTION 16(a)
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act
requires our directors, executive officers, and holders of more than 10% of our
common stock to file reports regarding their ownership and changes in ownership
of our securities with the SEC, and to furnish us with copies of all Section
16(a) reports that they file.
We believe that during the fiscal year
ended December 31, 2014, our directors, executive officers, and greater than 10%
stockholders complied with all applicable Section 16(a) filing
requirements.
In making this statement, we have
relied upon a review of the copies of Section 16(a) reports furnished to us and
the written representations of our directors, executive officers, and greater
than 10% stockholders.
investor.ebayinc.com 15
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CERTAIN TRANSACTIONS
WITH DIRECTORS AND OFFICERS
The Audit Committee is charged with
reviewing reports relating to compliance program activities and the oversight of
the Code of Business Conduct as applied to the Companys directors and executive
officers. The Audit Committee also reviews and approves all transactions with
related persons that are required to be disclosed in this section of our proxy
statement. The charter of our Audit Committee and our Code of Business Conduct
may be found on our investor relations website at
http://investor.ebayinc.com/corporate-governance.cfm.
Our Board has adopted a written policy
for the review of related person transactions. For purposes of the policy, a
related person transaction includes transactions in which (1) the amount
involved is more than $120,000, (2) eBay is a participant, and (3) any related
person has a direct or indirect material interest. The policy defines a related
person to include directors, nominees for director, executive officers, holders
of more than 5% of eBays outstanding common stock and their respective
immediate family members. Pursuant to the policy, all related person
transactions must be approved by the Audit Committee or, in the event of an
inadvertent failure to bring the transaction to the Audit Committee for
pre-approval, ratified by the Audit Committee. In the event that a member of the
Audit Committee has an interest in a related person transaction, the transaction
must be approved or ratified by the disinterested members of the Audit
Committee. In deciding whether to approve or ratify a related person
transaction, the Audit Committee will consider the following factors:
Whether the terms of the
transaction are (a) fair to eBay and (b) at least as favorable to eBay as
would apply if the transaction did not involve a related
person; |
Whether there are demonstrable
business reasons for eBay to enter into the transaction; |
Whether the transaction would
impair the independence of an outside director under eBays director
independence standards; and |
Whether the transaction would
present an improper conflict of interest for any director or executive
officer, taking into account the size of the transaction, the overall
financial position of the related person, the direct or indirect nature of
the related persons interest in the transaction and the ongoing nature of
any proposed relationship, and any other factors the committee deems
relevant. |
We have entered into indemnification
agreements with each of our directors and executive officers. These agreements
require us to indemnify such individuals, to the fullest extent permitted by
Delaware law, for certain liabilities to which they may become subject as a
result of their affiliation with eBay.
On April 10, 2014, we entered into an
agreement with Carl C. Icahn, High River Limited Partnership, Icahn Partners
Master Fund LP, Icahn Partners LP and certain of their affiliates (collectively,
the Icahn Group) pursuant to which Mr. Dorman was appointed to the eBay Board.
With respect to the 2015 Annual Meeting, we were required to notify the Icahn
Group as to whether we intended to nominate Mr. Dorman for election at the 2015
Annual Meeting. On January 21, 2015, we gave the Icahn Group notice that we
intended to nominate Mr. Dorman for election at the 2015 Annual
Meeting.
In addition, on January 21, 2015, we
entered into a nomination and standstill agreement with the Icahn Group pursuant
to which we agreed that no later than the first regularly scheduled meeting of
the Board immediately following the date of such agreement, we would expand the
eBay Board and appoint Mr. Christodoro to fill the resulting vacancy. Mr.
Christodoro may elect to remain on the eBay Board or resign from the eBay Board
and become a member of the PayPal Board, with such resignation and appointment
to be effective as of the effective time of the PayPal spin-off. A full
description of the January 21, 2015 agreement with the Icahn Group is included
in a Form 8-K filed with the SEC on January 23, 2015.
Since the beginning of 2014, there were
no other related person transactions, and there are not currently any proposed
related person transactions, that would require disclosure under SEC
rules.
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PROPOSALS REQUIRING
YOUR VOTE
PROPOSAL 1ELECTION
OF DIRECTORS
At the 2015 Annual Meeting,
15 directors are to be elected to serve for a one-year term until our 2016
Annual Meeting, and until their successors are elected and qualified.
Our Board is currently composed of 17
members, 15 of whom are currently independent directors within the meaning of
the listing standards of the Nasdaq Global Select Market. Mr. Dorman joined the
Board in June 2014; Ms. Hammer and Messrs. Traquina and Yeary joined the Board
in January 2015; and Ms. McGovern and Messrs. Bates and Christodoro joined the
Board in March 2015. Mr. Andreessen was a member of the Board until his
resignation in October 2014. Messrs. Ford and Schlosberg will end their service
to the Board when their term expires at the conclusion of the 2015 Annual
Meeting.
The term of office of each of the
nominees standing for election at the Annual Meeting expires at the upcoming
Annual Meeting. All of the nominees are currently a member of the Board and each
of the nominees except Ms. Hammer, Ms. McGovern, and Messrs. Bates, Christodoro,
Dorman, Traquina, and Yeary has been previously elected by the stockholders.
Each of the nominees has consented to serving as a nominee and being named as a
nominee in this Proxy Statement, and to serving as a director if elected. If
elected at the Annual Meeting, each of the nominees would serve a one-year term
until our 2016 Annual Meeting and until his or her successor is elected and
qualified, or until his or her earlier death, resignation, or removal. The Board
anticipates that, in connection with the separation of the PayPal business into
an independent publicly traded company, a number of directors will be appointed
to the Board of Directors of PayPal Holdings, Inc. and may resign from their
position on the eBay Board.
Majority Vote Standard for Election
of Directors. Our Bylaws provide that in the
event of an uncontested election, each director shall be elected by the
affirmative vote of a majority of the votes cast with respect to such
directori.e., the numbers of shares voted FOR a director nominee must exceed the
number of votes case AGAINST that nominee. ABSTAIN votes will be counted as
present for purposes of this vote but are not counted as votes cast. Broker
non-votes will not be counted as present and are not entitled to vote on the
proposal.
Director Resignation Policy for
Uncontested Elections. If a nominee who is
serving as a director is not elected at the annual meeting, under Delaware law
the director would continue to serve on the Board as a holdover director until
his or her successor is elected and qualified, or until his
or her earlier resignation or removal pursuant to our Bylaws. In the case of an
uncontested election, in accordance with our Corporate Governance Guidelines,
our Board expects each incumbent director who is nominated for re-election to
resign from the Board effective upon the Boards acceptance of such resignation,
in accordance with the procedure set forth in our Bylaws, if he or she fails to
receive the required number of votes for re-election in accordance with our
Bylaws. Our Corporate Governance Guidelines provide that, in considering whether
to nominate any incumbent director for re-election, the Board will take into
account whether the director has tendered an irrevocable resignation that will
be effective upon the Boards acceptance of such resignation in the event the
director fails to receive the required vote to be re-elected. In the case of a
proposed nominee who is not an incumbent director, the Board will take into
account whether the individual has agreed to tender such a resignation prior to
being nominated for re-election.
In the case of an uncontested election,
if a nominee who is an incumbent director does not receive the required vote for
re-election, the Corporate Governance and Nominating Committee or another
committee of the Board will decide whether to accept or reject such directors
resignation (if the director has tendered such a resignation), or whether to
take other action, within 90 days after the date of the certification of the
election results (subject to an additional 90-day period in certain
circumstances). In reaching its decision, the committee will review factors it
deems relevant, which may include any stated reasons for AGAINST votes,
whether the underlying cause or causes of the AGAINST votes are curable,
criteria considered by the committee in evaluating potential candidates for the
Board, the length of service of the director, the size and holding period of
such directors stock ownership in the Company, and the directors contributions
to the Company. The committees decision will be publicly disclosed in a filing
with the SEC. If a nominee who was not already serving as a director fails to
receive the required votes to be elected at the annual meeting, he or she will
not become a member of the Board. All of the director nominees are currently
serving on the Board and each director nominee has submitted an irrevocable
resignation of the type described above.
investor.ebayinc.com 17
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PROPOSALS REQUIRING YOUR VOTE
Background to the Boards Recommendation in Favor of
eBays Nominees. |
The Corporate Governance and
Nominating Committee considers a number of factors and principles in determining
the slate of director nominees for election to the Companys Board, as discussed
in the section titled Corporate Governance and Nominating Committee, above. In
particular, the Board considers the following factors and principles to evaluate
and select nominees:
The Board should be composed
of directors chosen on the basis of their character, integrity, judgment,
skills, background, and experience of particular relevance to the
Company. |
Directors should have high-level
managerial experience in a relatively complex organization or be
accustomed to dealing with complex problems. |
Directors should also represent
the balanced, best interests of the stockholders as a whole rather than
special interest groups or constituencies. |
Each director should be an
individual of the highest character and integrity, with the ability to
work well with others and with sufficient time available to devote to the
affairs of the Company in order to carry out the responsibilities of a
director. |
In addressing the overall
composition of the Board, characteristics such as diversity (including gender
and race), age, international background, and expertise should be
considered as well. |
The Board should be composed of
directors who are highly engaged with our business. |
The Board should include
individuals with highly relevant professional
experience. |
eBays Corporate Governance and
Nominating Committee and Board have evaluated each of the director nominees
against the factors and principles eBay uses to select director nominees. Based
on this evaluation, our Corporate Governance and Nominating Committee and the
Board have concluded that it is in the best interests of eBay and its
stockholders for each of the proposed nominees listed below to serve as a
director of eBay. The board believes that all of these nominees have a strong
track record of being responsible stewards of stockholders interests and bring
extraordinarily valuable insight, perspective and expertise to the board.
Additional reasons that the board recommends supporting the election of the
director nominees include:
All of the nominees have
high-level managerial experience in relatively complex
organizations. |
Each nominee has highly relevant
professional experience in the management, technology, innovation, and
financial services fields. |
Each nominee is highly engaged
and able to commit the time and resources needed to provide active
oversight of eBay and its management. None of the nominees sits on the
boards of more than four other public companies, and each of our directors
attended at least 75% of the aggregate of all of our Board meetings and
committee meetings for committees on which such director served during
2014. |
We believe each nominee is an
individual of high character and integrity and is able to contribute to
strong board dynamics. |
Each of these nominees has
experience and expertise that complement the skill sets of the other
nominees. |
In addition to these attributes, in
each individuals biography set forth below, we have highlighted specific
experience, qualifications, and skills that led the Board to conclude that each
individual should serve as a director of eBay.
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PROPOSALS REQUIRING YOUR VOTE
Nominees for Election for a
One-Year Term Expiring at Our 2016 Annual
Meeting |
FRED D.
ANDERSON
Director since: 2003
Age: 70
eBay Board Committees: Audit Committee (Chairman;
Audit Committee Financial Expert)
Other Public Company Boards: Yelp Inc.
(since 2011) |
Director
Qualifications
Financial
Expertise: Extensive financial
experience, having served as the CFO of Apple Inc., one of the worlds
largest consumer electronics companies, for eight years and the CFO of
Automatic Data Processing, one of the worlds largest providers of
business processing solutions, for four years.
Technology
Industry Experience: Former CFO of two
large and innovative global technology companies, as well as extensive
experience as a board member of public technology companies.
Leadership: Co-Founder and
Managing Director of Elevation Partners.
Transactional
Experience: Significant experience in
all aspects of analyzing and executing sophisticated corporate
transactions with very large and sophisticated technology businesses and
through his experience at Elevation Partners. |
Experience Mr. Anderson is
the Co-Founder of Elevation Partners, a private equity firm that focuses
on the media and entertainment industry, and has served as a Managing
Director since July 2004. From 1996 until 2004, Mr. Anderson served as
Executive Vice President and Chief Financial Officer of Apple Inc. From
1992 until 1996, Mr. Anderson served as Corporate Vice President and Chief
Financial Officer of Automatic Data Processing, Inc. Prior to that, Mr.
Anderson was the COO and President of MAI Systems. Mr. Anderson currently
serves on the Board of Directors of Yelp Inc.
On April 24, 2007, the SEC filed
a complaint against Mr. Anderson and another former officer of Apple. The
complaint alleged that Mr. Anderson failed to take steps to ensure that
the accounting for an option granted in 2001 to certain executives of
Apple, including himself, was proper. Simultaneously with the filing of
the complaint, Mr. Anderson settled with the SEC, neither admitting nor
denying the allegations in the complaint. In connection with the
settlement, Mr. Anderson agreed to a permanent injunction from future
violations of Sections 17(a)(2) and 17(a)(3) of the Securities Act of 1933
and Section 16(a) of the Exchange Act and Rules 13b2-2 and 16a-3
thereunder, and from aiding and abetting future violations of Sections
13(a), 13(b)(2)(A), 13(b)(2)(B), and 14(a) of the Exchange Act and Rules
12b-20, 13a-1, 13a-13, and 14a-9 thereunder. He also agreed to disgorge
approximately $3.5 million in profits and interest from the option he
received and to pay a civil penalty of $150,000. Under the terms of the
settlement, Mr. Anderson may continue to act as an officer or director of
public companies.
Mr. Anderson was formerly a
Certified Public Accountant with Coopers & Lybrand and a captain in
the U.S. Air Force. Mr. Anderson also serves on the Board of Trustees for
Whittier College. Mr. Anderson received his B.A. from Whittier College and
his M.B.A. from the University of California, Los
Angeles. |
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PROPOSALS REQUIRING YOUR VOTE
EDWARD W.
BARNHOLT
Director since: 2005
Age: 71
eBay Board Committees: Compensation Committee
(Chairman)
Other Public Company Boards: Adobe Systems
Incorporated (since 2005), KLA-Tencor Corporation (since
1997) |
Director
Qualifications
Technology
Industry Experience: Over 48 years
working in the technology sector at some of the largest and most complex
companies in the industry, including Agilent Technologies, Inc. and
Hewlett-Packard Company.
Leadership: Extensive leadership
experience as CEO of Agilent Technologies for six years and extensive
experience serving as a Chairman and board member of companies, including
KLA-Tencor and Adobe Systems (where he also serves on the Compensation
Committees).
Transactional/M&A Experience: Helped lead the spin-off of Agilent from Hewlett-Packard Company in 1999. |
Experience Mr. Barnholt
served as President and Chief Executive Officer of Agilent Technologies,
Inc., a measurement company, from May 1999 until his retirement in March
2005, and helped lead Agilents spin-off from Hewlett-Packard Company in
November 1999. From 1966 to 1999, Mr. Barnholt held various positions at
Hewlett-Packard Company. Mr. Barnholt currently serves on the Board of
Directors of KLA-Tencor Corporation (where he currently serves as the
Non-Executive Chairman) and of Adobe Systems Incorporated.
Mr. Barnholt also serves as a
member of the Board of Trustees of the David and Lucile Packard
Foundation. Mr. Barnholt received a B.S and M.S. in Electrical Engineering
from Stanford University. |
ANTHONY J.
BATES
Director since: 2015
Age: 47
Other Public Company Boards: GoPro, Inc. (since June 2014), Sirius XM Holdings Inc. (since September 2013) |
Director
Qualifications
Technology
Industry Experience: Extensive
executive leadership experience in the technology industry, including the
management of worldwide operations, sales, service, and support
areas.
Leadership: Leadership as
President of GoPro, Inc., former Executive Vice President, Business
Development and Evangelism at Microsoft Corporation and former Chief
Executive Officer of Skype Inc. adds to the strong leadership expertise of
the board. |
Experience Mr. Bates has been
the President of GoPro, Inc., which makes and sells versatile capture
devices to enable people to capture photo and video content, since June
2014. From July 2013 until March 2014, Mr. Bates was the Executive Vice
President, Business Development and Evangelism, of Microsoft Corporation,
a software company. Mr. Bates was the Chief Executive Officer of Skype
Inc., a provider of software applications and related internet
communications products, from October 2010 until its acquisition by
Microsoft in 2011, subsequent to which Mr. Bates served as the President
of Microsofts Skype Division until July 2013. From 1996 to October 2010,
Mr. Bates served in various roles at Cisco Systems, Inc., a networking
equipment provider, most recently as Senior Vice President and General
Manager of the Enterprise Group. Mr. Bates currently serves on the
Board of Directors of Sirius X.M. Holdings Inc., a satellite radio system
operator and broadcaster. |
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PROPOSALS REQUIRING YOUR VOTE
JONATHAN
CHRISTODORO
Director since: 2015
Age: 38
Other Public Company Boards: Enzon
Pharmaceuticals Inc. (since October 2013), Herbalife Ltd. (since February
2013), Hologic, Inc. (since December 2013), and Talisman Energy Inc. (since
December 2013) |
Director
Qualifications
Leadership: Mr. Christodoros leadership experience as a Managing Director of Icahn Capital LP adds to the strong leadership expertise of the board.
Financial
Expertise: Mr. Christodoro has over 15 years of extensive financial, strategic and investment experience advising and investing in public companies, including at the board level. |
Experience Mr. Christodoro has served as a Managing Director of Icahn Capital LP, the entity through which Carl C. Icahn manages investment funds, since July 2012. Mr. Christodoro is responsible for identifying, analyzing and monitoring investment opportunities and portfolio companies for Icahn Capital. Prior to joining Icahn Capital, from 2007 to 2012, Mr. Christodoro served in various investment and research roles at P2 Capital Partners, LLC, Prentice Capital Management, LP and S.A.C. Capital Advisors, LP. Mr. Christodoro began his career as an investment banking analyst at Morgan Stanley, where he focused on merger and acquisition transactions across a variety of industries. Mr. Christodoro currently serves on the Board of Directors of Enzon Pharmaceuticals, Inc. (where he currently serves as Chairman of the Board, as a member of the Governance and Nominating Committee, as a member of the Finance and Audit Committee, and as a member of the Compensation Committee), Herbalife Ltd (where he currently serves as a member of the Nominating and Governance Committee and as a member of the Compensation Committee), Hologic, Inc. (where he currently serves as a member of the Nominating and Corporate Governance Committee and as a member of the Corporate Development Committee), and Talisman Energy, Inc. (where he currently serves as a member of the Nominating and Governance Committee and as a member of the Reserves Committee).
Mr. Christodoro received an M.B.A. from the University of Pennsylvanias Wharton School of Business with Distinction, majoring in Finance and Entrepreneurial Management. Mr. Christodoro received a B.S. in Applied Economics and Management Magna Cum Laude with Honors Distinction in Research from Cornell University. Mr. Christodoro also served in the United States Marine Corps. |
SCOTT D.
COOK
Director since: 1998
Age: 62
eBay Board Committees: Corporate Governance and Nominating Committee
Other Public Company Boards: Intuit Inc. (since
1984), The Procter & Gamble Company (since 2000) |
Director
Qualifications
Technology
Industry Experience: Mr. Cook has been
a leader in the technology industry for the past 32 years. As co-founder
of Intuit Inc., a global consumer-facing technology company, Mr. Cook has
driven innovation and significant growth.
Leadership: Mr. Cooks
leadership experience as co-founder, Chairman, and board member of Intuit
provides the eBay Board with strong technology leadership expertise.
Thought
Leadership: Mr. Cook serves on the
Harvard Business Schools Deans Advisory Board. Mr. Cook is also on the
Board of the Center for Brand and Product Management at the University of
Wisconsin.
Marketing/Product Development:
Extensive experience in product development and marketing as founder of
the Board of the Center for Brand and Product Management at the University
of Wisconsin, which focuses on training MBA students in brand and product
management. |
Experience Mr. Cook
co-founded Intuit Inc., a maker of business and financial management
technology solutions, including QuickBooks, Quicken, and TurboTax, in
1983. Mr. Cook has served Intuit in various capacities since its founding, serving as CEO and Chairman, and has been the Chairman
of the Executive Committee of the Board of Directors of Intuit since
August 1998. Mr. Cook also serves on the Board of Directors of The Procter
& Gamble Company (where he is Chair of the Innovation and Technology
Committee and a member of the Compensation & Leadership Development
Committee), and The Intuit Scholarship Foundation and Valhalla
Foundation.
Mr. Cook received his B.A. from
the University of Southern California and his M.B.A from the Harvard
Business School. |
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PROPOSALS REQUIRING YOUR VOTE
JOHN J.
DONAHOE
Director since: 2008
Age: 54
eBay Board Committees: None
Other Public Company Boards: Intel Corporation (since 2009), Nike, Inc. (since 2014) |
Director
Qualifications
Technology
Industry Experience: Extensive industry
experience and deep knowledge of eBays day-to-day operations based on
current role as eBays President and Chief Executive Officer and previous
managerial experience as President of eBay Marketplaces and Interim
President of PayPal.
Leadership: Served as the President and Chief Executive Officer of eBay Inc. since 2008.
Prior to that served as the
President of eBay Marketplaces and Interim President of PayPal for
approximately three years combined. Former leadership experience prior to
eBay as Worldwide Managing Director of Bain & Company, one of the
largest and most well-respected global management consulting firms in the
world.
International
Experience: As CEO of eBay, Mr. Donahoe oversaw a global organization with
greater than 50% of revenues coming from outside the United States. As Worldwide Managing
Director of Bain & Company, Mr. Donahoe oversaw the firms global
management consulting business with a diverse client base and substantial
international operations. This broad international experience is extremely
valuable to the Board.
Transactional/M&A Experience: Oversaw the acquisitions of Braintree, GSI Commerce, and 35 other
companies, and the divestiture of Skype. |
Experience Mr. Donahoe has
served as eBays President and Chief Executive Officer since March 2008,
and as a director of eBay since January 2008. From January 2012 until
April 2012, Mr. Donahoe served as Interim President of PayPal. From
January 2008 to March 2008, Mr. Donahoe served as CEO-designate of eBay.
From March 2005 to January 2008, Mr. Donahoe served as President, eBay
Marketplaces. From January 2000 to February 2005, Mr. Donahoe served as
the Worldwide Managing Director of Bain & Company.
Mr. Donahoe serves on the Board
of Directors of Intel Corporation (where he currently serves as a member
of the Compensation Committee and as a member of the Corporate Governance
and Nominating Committee) and of Nike, Inc. (where he currently serves as
a member of the Nominating and Corporate Governance Committee). Mr.
Donahoe received his B.A. in Economics from Dartmouth College and an
M.B.A. from the Stanford Graduate School of
Business. |
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PROPOSALS REQUIRING YOUR VOTE
DAVID W.
DORMAN
Director since: 2014
Age: 61
eBay Board Committees: Compensation
Committee
Other Public Company Boards: CVS Health Corporation (since March 2006), Motorola Solutions, Inc. (since 2011), Yum! Brands, Inc. (since 2005) |
Director
Qualifications
Leadership: Mr. Dormans
leadership as former Chairman and CEO of AT&T adds to the strong
leadership expertise of the board.
Technology
Industry Experience: Mr. Dorman has
extensive experience in global telecommunications-related businesses as a
former Chief Executive Officer, as well as expertise in finance, strategic
planning and public company executive compensation. |
Experience Mr. Dorman has
been the Non-Executive Chairman of the Board of CVS Health Corporation, a
pharmacy healthcare provider since May 2011. He is also a Founding Partner
of Centerview Capital, a private investment firm, since July 2013. He was
formerly Non-Executive Chairman of the Board of Motorola Solutions, Inc.,
(formerly Motorola, Inc.) a leading provider of business and mission
critical communication products and services for enterprise and government
customers. He served as Non-Executive Chairman of the Board of Motorola,
Inc. from May 2008 until the separation of its mobile devices and home
businesses in January 2011. From October 2006 to May 2008, he was a Senior
Advisor and Managing Director to Warburg Pincus LLC, a global private
equity firm. From November 2005 until January 2006, Mr. Dorman served as
President and a director of AT&T Inc., a telecommunications company
(formerly known as SBC Communications). From November 2002 until November
2005, Mr. Dorman was Chairman of the Board and Chief Executive Officer of
AT&T Corporation. Prior to this, he was President of AT&T Corp.
from 2000 to 2002 and the Chief Executive Officer of Concert
Communications Services, a former global venture created by AT&T Corp.
and British Telecommunications plc, from 1999 to 2000. Mr. Dorman also
serves on the Board of Directors of Yum! Brands, Inc. and Motorola
Solutions, Inc. and as a Trustee for Georgia Tech Foundation,
Inc.
Mr. Dorman received his B.S. in industrial management from Georgia Institute of Technology.
|
BONNIE S.
HAMMER
Director since: 2015
Age: 64
Other Public Company Boards: IAC/InteractiveCorp
(since September 2014) |
Director
Qualifications
Leadership: As Chairman of NBCUniversal Cable Entertainment, Ms. Hammers executive oversight of prominent cable brands and production studios provides the board with strong leadership experience.
Media
Experience: Industry leader in media for close to 40 years, with proven expertise in network programming, production and multiplatform branding. |
Experience Bonnie Hammer has been Chairman of NBCUniversal Cable Entertainment since February 2013. In this capacity, Ms. Hammer has executive oversight of leading cable brands USA Network, Bravo, Syfy, E! Entertainment, Oxygen, Esquire Network, Sprout, Chiller, Cloo and Universal HD. She also oversees two Hollywood studios: Universal Cable Productions, which produces scripted content for cable and broadcast networks, and Wilshire Studios, which specializes in reality programming. Prior to her tenure as Chairman of NBCUniversal Cable Entertainment, Ms. Hammer served as Chairman of NBCUniversal Cable Entertainment and Cable Studios since November 2010. In this capacity, Ms. Hammer had executive oversight of cable brands USA Network, Syfy, E! Entertainment, Chiller, Cloo and Universal HD, as well as Universal Cable Productions and Wilshire Studios.
Prior to joining NBCUniversal in
May 2004, Ms. Hammer served as President of Syfy from 2001 to 2004 and
held other senior executive positions at Syfy and USA Network from 1989 to
2000. Before that, she was an original programming executive at Lifetime
Television Network from 1987 to 1989. Ms. Hammer has served on the boards
of ShopNBC, a 24-hour TV shopping network, the International Radio and
Television Society (IRTS) and the Ad Council. Ms. Hammer also serves on
the Board of Directors of IAC/ InteractiveCorp and currently holds an
advisory role with Boston Universitys College of Communication.
Ms. Hammer received her B.A. in
communications and a masters degree in media and new technology from
Boston University. |
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PROPOSALS REQUIRING YOUR VOTE
GAIL J.
MCGOVERN
Director since: 2015
Age: 63
Other Public Company Boards: DTE Energy Company (since
June 2003) |
Director
Qualifications
Leadership: Ms. McGoverns
leadership experience as President and Chief Executive Officer of the American
Red Cross adds to the strong leadership expertise of the board and brings
a strong perspective from the academic and nonprofit worlds.
Thought
Leadership: Ms. McGovern serves as a
trustee of a major research university and formerly served as a Professor
of Management practice at Harvard Business School.
Expertise: Extensive executive
experience in marketing and sales, customer relations, corporate finance,
strategic planning and government relations and knowledge of regulatory
matters. |
Experience Ms. McGovern is currently the President and Chief Executive Officer of the American Red Cross and has served in that position since
June 2008. From 2002 to 2008, Ms. McGovern served as a Professor at Harvard Business School. Ms. McGovern also served as
President of Fidelity Personal Investments, a unit of Fidelity Investments from 1998 to 2002 and Executive Vice President
of the Consumer Markets Division at AT&T from 1997 to 1998. Ms. McGovern is a trustee of Johns Hopkins University and
Johns Hopkins Medicine, and a director of DTE Energy Company and The Weather Company.
Ms. McGovern received her B.A. in
quantitative sciences from Johns Hopkins University and her M.B.A. from
Columbia University. |
KATHLEEN C.
MITIC
Director since: 2011
Age: 45
eBay Board Committees: Compensation Committee and
Corporate Governance and Nominating Committee
Other Public Company Boards: Restoration Hardware
Holdings, Inc. (since 2013) |
Director
Qualifications
Marketing
Experience: Expertise in global
marketing. Ms. Mitic led Global Platform & Mobile Marketing at
Facebook, Inc., one of the worlds most recognized social networking
companies and led Global Products Marketing at Palm, Inc.
Technology
Industry Leadership: Ms. Mitic has
served in executive positions within the industry as listed above,
including at major global consumer-facing technology companies, for the
past eight years. She has experience building and operating technology
companies as the founder and Chief Executive Officer of Sitch and the
Chief Operating Officer at Skyrider, Inc. |
Experience Ms. Mitic is the
Founder and Chief Executive Officer of Sitch, Inc. (formerly known as
Three Koi Labs, Inc.), a mobile start-up company formed in August 2012.
From August 2010 to August 2012, Ms. Mitic served as Director of Platform
& Mobile Marketing for Facebook, Inc., a social networking service.
From June 2009 to July 2010, Ms. Mitic served as Senior Vice President,
Product Marketing of Palm, Inc., a smartphone manufacturer. From May 2008
to June 2009, Ms. Mitic was an Executive-in-Residence at Elevation
Partners, a private equity firm focused on the media and entertainment
industries. From December 2006 to February 2008, Ms. Mitic served as Chief
Operating Officer of Skyrider Inc., a developer of online peer-to-peer
networking solutions.
Ms. Mitic currently serves on the
Board of Directors of Restoration Hardware Holdings, Inc. (where she
currently serves as a member of the Audit Committee). She also serves on
the Board of Sitch, Inc. and Special Olympics International.
Ms. Mitic received her B.A. from
Stanford University and her M.B.A. from Harvard Business
School. |
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PROPOSALS REQUIRING YOUR VOTE
DAVID M.
MOFFETT
Director since: 2007
Age: 63
eBay Board Leadership: Lead Independent
Director
eBay Board Committees: Audit Committee
Other Public Company Boards: CIT Group Inc. (since 2010), Genworth Financial, Inc. (since 2012) |
Director
Qualifications
Financial and
Regulatory Expertise: Mr. Moffett has
more than 30 years of strategic finance, risk management, and operational
experience in banking and payment processing. He brings this strong
financial expertise to his role on the Board and as a member of the Audit
Committee.
He also has extensive global
financial management and regulatory expertise as a former Chief Executive
Officer and Chief Financial Officer of financial services
companies.
Payments
Business Expertise: Mr. Moffett has
extensive experience in the payments business as a result of his
involvement with the development of U.S. Bancorps global expansion of its
merchant processing business, which is particularly relevant to PayPals
business.
Leadership: Mr. Moffetts
leadership experience as CEO of Freddie Mac adds to the strong leadership
expertise of the board.
Transaction
Experience: During his tenure as CFO of
Star Banc Corporation, Mr. Moffett played an integral role in the
successful acquisitions of Firstar Corporation and U.S. Bancorp. His deep
experience in leading successful acquisitions is very relevant to eBays
Board. |
Experience Mr. Moffett was
appointed CEO of Federal Home Loan Mortgage Corp. (Freddie Mac), a
government controlled and sponsored mortgage company as part of a plan of
action by the Federal Housing Finance Agency, from September 2008 until
his retirement in March 2009. He also served as a director of Freddie Mac
from December 2008 to March 2009. In 1993, Mr. Moffett joined Star Banc
Corporation, a bank holding company, as Chief Financial Officer and during
his tenure played an integral role in the acquisition of Firstar
Corporation in 1998 and later U.S. Bancorp in 2001. Mr. Moffett remained
CFO of U.S. Bancorp until 2007.
Mr. Moffett currently serves on
the Board of Directors of CIT Group Inc. (where he currently serves as a
member of the Compensation Committee) and of Genworth Financial, Inc.
(where he currently serves as a member of the Nominating and Corporate
Governance Committee and as a member of the Legal and Public Affairs
Committee). He also currently serves as a Trustee for Columbia Atlantic
Mutual Funds and University of Oklahoma Foundation and as a consultant to
various financial services companies.
Mr. Moffett received a B.A. from
the University of Oklahoma and an M.B.A. from Southern Methodist
University. |
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PROPOSALS REQUIRING YOUR VOTE
PIERRE M.
OMIDYAR
Director since: 1996
Age: 47
eBay Board Leadership: Chairman
Other Public Company Boards:
None |
Director
Qualifications
Technology
Industry Experience: Mr. Omidyar has
extensive experience as a technologist and innovator in our industry. His
knowledge of the industry and long history of driving innovation provides
important expertise to our Company that is technology driven and focused
on innovation.
Leadership: As the founder of
eBay, Mr. Omidyar brings to the Board a deep understanding of the business
and a long-standing history as a leader within our Company and the
technology industry.
In addition to eBay, Mr. Omidyar
has also been a founder of several other innovative businesses, including
the Omidyar Network and First Look. His extensive experiences as an
entrepreneur are particularly relevant to our nimble, fast-changing
businesses. |
Experience Mr. Omidyar
founded eBay in September 1995. He has been a director and Chairman of the
Board since eBays incorporation in May 1996. Mr. Omidyar is the Founding
Partner and Chairman of Omidyar Network, a philanthropic investment firm
committed to creating opportunity for individuals to improve their lives.
He is Co-Founder, Chief Executive Officer, and publisher of Civil Beat, an
online news service formed in 2010. Mr. Omidyar is also the founder, Chief
Executive Officer and publisher of First Look, a mass media news
organization established in 2013.
Mr. Omidyar serves on the Board
of Trustees of Omidyar-Tufts Microfinance Fund, the Punahou School, Santa
Fe Institute, and the Roshan Cultural Heritage Institute.
Mr. Omidyar received a B.S. from
Tufts University. |
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PROPOSALS REQUIRING YOUR VOTE
THOMAS J.
TIERNEY
Director since: 2003
Age: 61
eBay Board Committees: Compensation Committee and
Corporate Governance and Nominating Committee (Chairman)
Other Public Company Boards:
None |
Director
Qualifications
Nonprofit and
Philanthropic Leader: Mr. Tierney is a
social entrepreneur and recognized leader in the non-profit world, and
frequently speaks and writes on a variety of topics related to nonprofit
leadership and philanthropy. Mr. Tierney also is Chair of the Harvard
Business School Initiative on Social Enterprise and serves on the Harvard
Business Schools Deans Advisory Board.
Extensive
Managerial and Strategy/Leadership Consulting Experience: Extensive managerial experience as Chairman of The
Bridgespan Group and Chief Executive of Bain & Company and over 35
years providing strategy and leadership consulting to CEOs across a range
of industries.
Business
Leadership Expertise: Helped lead Bain
& Company through a highly successful turnaround. |
Experience Mr. Tierney is
Chairman and co-founder of The Bridgespan Group, a nonprofit organization
that collaborates with mission-driven leaders and organizations to help
accelerate social impact, and has been its Chairman of the Board since
late 1999. From 1980 to 2000, he held various positions at Bain &
Company, including serving as its Chief Executive from 1992 to
2000.
Mr. Tierney currently serves on
many charitable boards, including the global board of The Nature
Conservancy, the Hoover Institution (where he currently serves as the
Chairman), and The Woods Hole Oceanographic Institution.
Mr. Tierney received his B.A.
from the University of California at Davis and received an M.B.A. degree
from Harvard Business School, where he graduated with
distinction. |
PERRY M.
TRAQUINA
Director since: 2015
Age: 58
Other Public Company Boards:
None |
Director
Qualifications
Investment/Finance Experience: Mr. Traquina brings strong expertise in finance and global
investment management based on over 34 years of experience working at
Wellington Management Company LLP.
Leadership: Mr. Traquinas
leadership experience as a former Chairman, CEO, and Managing Partner of
Wellington Management Company LLP adds to the strong leadership expertise
of the board. |
Experience Perry M.
Traquina is the former Chairman, CEO, and Managing Partner of Wellington
Management Company LLP, a global investment management firm, a position
Mr. Traquina held for a decade until his retirement from the firm in 2014.
During his 34 year career at Wellington, he was an investor for 17 years
and a member of the management team for the other half of his time at the
firm. Mr. Traquina received his B.A. from Brandeis University and an
M.B.A. from Harvard University.
|
investor.ebayinc.com 27
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PROPOSALS REQUIRING YOUR VOTE
FRANK D.
YEARY
Director since: 2015
Age: 51
Other Public Company Boards: Intel
Corporation (since March 2009) |
Director
Qualifications
Investment
Banking and Finance Experience: Mr.
Yearys extensive career in investment banking and finance brings to the
Board financial strategy and M&A expertise, including expertise in
financial reporting and experience in assessing the efficacy of mergers
and acquisitions. In addition, Mr. Yearys role as Vice Chancellor and as
Chief Administrative Officer of a large public research university
provides strategic and financial expertise.
Leadership: Mr. Yearys
leadership experience as Executive Chairman of CamberView Partners, LLC
adds to the strong leadership expertise of the board. |
Experience Frank D. Yeary
has been Executive Chairman of CamberView Partners, LLC, a corporate
advisory firm, since 2012. Mr. Yeary was Vice Chancellor of the University
California, Berkeley from 2008 to 2012, where he led and implemented major
strategic and financial changes to the universitys financial and
operating strategy; from 2010 to 2011, he served as interim Chief
Administrative Officer, managing a portfolio of financial and operational
responsibilities and departments. Prior to 2008, Mr. Yeary spent 25 years
in the finance industry, most recently as Managing Director, Global Head
of Mergers and Acquisitions and a member of the Management Committee at
Citigroup Investment Banking, a financial services company. Mr. Yeary
currently serves on the Board of Directors of Intel Corporation (where he
currently serves as the Chair of the Audit Committee). Mr. Yeary was also
Chairman and co-founder of Level Money, Inc., a personal finance
organization for young adults, until 2015.
Mr. Yeary received his B.A. in History and Economics from the University of California, Berkeley.
|
The Board of Directors Recommends a Vote FOR each of the Named
Nominees. |
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PROPOSALS REQUIRING YOUR VOTE
PROPOSAL 2 ADVISORY
VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION
We are asking stockholders to
approve, on an advisory basis, the compensation of our named executive officers
as described in the Compensation Discussion and Analysis, the compensation
tables, and related narrative discussion included in this proxy
statement.
As discussed in the Compensation
Discussion and Analysis, the Compensation Committee of your Board is committed
to an executive compensation program that serves the long-term interests of our
stockholders. We believe that attracting and retaining superior talent
supported by a competitive compensation program that is highly performance-based
is key to delivering long-term stockholder returns.
Our executive compensation program
is designed to:
align compensation with our business objectives and
performance; |
motivate our executive officers to enhance long-term
stockholder value; |
position us competitively among the companies against which
we recruit and compete for talent; and |
enable us to attract,
retain, and reward executive officers and other key employees who
contribute to our long-term success. |
To achieve these objectives, our
executive compensation program has three principal components: long-term equity
compensation, an annual cash incentive, and base salary. The Compensation
Committee seeks to have our named executive officers total compensation heavily
weighted to variable, performance-based compensation by delivering a majority of
compensation in the form of performance-based restricted stock units (PBRSUs),
stock options, and annual cash incentives. PBRSUs are granted based on two-year
financial performance. Under our annual cash incentive plan, 75% of each named
executive officers target bonus for 2014 was based on Company financial
performance with the remaining 25% based on individual performance; there is no
payout for individual performance unless thresholds for Company performance are met. We also grant time-based restricted
stock units, or RSUs, and stock options, the value of which depends on the performance
of the Companys stock.
Our Compensation Committee believes
that the goals of our executive compensation program are appropriate and that
the program is properly structured to achieve those goals. We have engaged in
ongoing discussions with our investors, who generally support those goals and
the program, and we believe our stockholders as a whole should support them as
well.
We are asking our stockholders to
indicate their support for the compensation of our named executive officers as
described in this proxy statement. This proposal, commonly known as a
say-on-pay proposal, gives our stockholders the opportunity to express their
views on the compensation of our named executive officers. This vote is not
intended to address any specific item of compensation, but rather the overall
compensation of our named executive officers and the philosophy, policies, and
practices described in this proxy statement. Accordingly, we ask our
stockholders to vote FOR the following resolution at the Annual Meeting:
RESOLVED, that the Companys
stockholders approve, on an advisory basis, the compensation of the named
executive officers, as disclosed in the Companys Proxy Statement for the 2015
Annual Meeting of Stockholders pursuant to the compensation disclosure rules of
the Securities and Exchange Commission, including the Compensation Discussion
and Analysis, the 2014 Summary Compensation Table, and the other related tables
and disclosures.
The say-on-pay vote is advisory, and
therefore not binding on the Company, our Board, or our Compensation Committee.
Our Board and our Compensation Committee value the opinions of our stockholders
and will take into account the outcome of this vote in considering future
compensation arrangements.
investor.ebayinc.com 29
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PROPOSALS REQUIRING YOUR VOTE
PROPOSAL 3
APPROVAL OF THE MATERIAL TERMS, INCLUDING THE PERFORMANCE GOALS, OF THE AMENDMENT AND RESTATEMENT OF THE EBAY
INCENTIVE PLAN
In 2005, the Board initially
adopted, and eBays stockholders approved, the eBay Incentive Plan (the Plan).
In 2010, the Board adopted and our stockholders re-approved an amended and
restated version of the Plan. The Plan has subsequently been amended and
restated in 2015 to incorporate an amendment previously approved by the
Compensation Committee which allows eBay to clawback or recoup any amounts paid
under the Plan as necessary for compliance with any Company policy or as
required by law. The material terms, including the performance goals, of the
amended and restated Plan are being submitted to stockholders in 2015 so that
payments to certain executive officers under the Plan will continue to be
deductible by eBay for federal income tax purposes, as described
below.
The approval of the material
terms, including the performance goals, of the amended and restated Plan by
eBays stockholders requires the affirmative vote of a majority of the votes
cast with respect to the proposal by the shares present in person or represented
by proxy, and entitled to vote on the proposal at the Annual Meeting. A
majority of votes cast means that the number of votes FOR the approval of
material terms, including the performance goals, of the amended and restated
Plan must exceed the number of votes AGAINST the approval of the material
terms of the amended and restated Plan.
The Plan is an important element
of our overall compensation strategy to align employee compensation with our
annual performance and to enable us to attract, retain, and reward individuals
who contribute to our success and motivate them to enhance the value of our
Company.
Section 162(m) of the Internal
Revenue Code of 1986, as amended, or the Code, denies a tax deduction to public
companies for compensation paid to certain covered employees in a taxable year
to the extent the compensation paid to a covered employee exceeds $1 million, unless the plan contains certain features
that qualify the compensation as performance-based compensation. The Plan is
intended to satisfy the requirements for performance-based compensation as
required by Section 162(m) of the Code. One of the requirements of
performance-based compensation is that the material terms, including the
performance goals, in the applicable compensation plan be approved by the
companys stockholders at least once every five years. Accordingly, eBay is
asking stockholders to approve the material terms, including the performance
goals, of the amended and restated Plan to satisfy the requirements of Section
162(m). The Board believes the approval of the material terms, including the
performance goals, of the Plan is in the best interests of the Company and its
stockholders. If stockholders do not approve the material terms of the
Plan, beginning with the 2016 performance year, the chief executive officer and
the next three most highly compensated executive officers (other than the chief
financial officer) will not receive awards under the Plan. For avoidance of
doubt, nothing in this proposal precludes the Company from granting awards
outside of the Plan that do not qualify as performance-based compensation under
Section 162(m). In the event stockholders do not approve the material terms of
the Plan, the Company may choose to make awards outside of the Plan if it
determines that doing so is in the best interests of the Company and stockholders.
A summary of the principal
provisions of the amended and restated Plan is set forth below. The summary is
qualified by reference to the full text of the amended and restated Plan, a copy
of which is attached as Appendix A to this proxy statement.
General and
Administration |
The Plan provides for an annual
bonus to eligible eBay employees. The Compensation Committee is responsible for
administering the Plan. The members of the Compensation Committee (or the
sub-committee selected to administer the Plan) must qualify as outside
directors under Section 162(m) of the Code in order for incentive awards to
covered employees to qualify as deductible performance-based compensation
under the Code. The Compensation Committee
has complete and absolute authority to make decisions regarding the
administration of the Plan, including interpreting the terms and provisions, and
establishing, adjusting, or paying incentive awards. Under the Plan, no
participant may receive an award of more than $8 million (or the equivalent
amount of equity, based on fair market value on the date of grant) in any
calendar year.
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PROPOSALS REQUIRING YOUR VOTE
All active regular full-time and
part-time employees who are notified by us are eligible to participate in the
Plan. Employees who participate in other bonus programs, such as any sales
incentive plan, are not eligible to participate in the Plan unless they are
specifically made eligible in writing by one of our executive officers. In
addition, we may, in our sole discretion, provide for a payout under the Plan
for any employee who has changed positions and, as a result, may have been
eligible to participate in the Plan and another bonus program during a quarter.
The Plan contains special provisions for designating additional eligible
employees (e.g., new hires) for participation in the Plan.
As of December 31, 2014, we and
our consolidated subsidiaries employed approximately 34,600 persons, of which
approximately 18,500 are currently eligible to participate in the
Plan.
Under the Plan, the Compensation
Committee will determine the performance period for measuring actual
performance. The Compensation Committee will establish for each performance
period:
● |
the performance measures based on
business criteria and target levels of performance; and |
● |
a formula for calculating a
participants award based on actual performance compared to the
pre-established performance goals. |
Performance measures are based on
one or more of the following types of performance criteria:
● |
volume criteria (including
trading volume, gross merchandise volume, and total payment
volume) |
● |
users |
● |
revenue |
● |
income criteria (including
operating income, EBITDA, net earnings (either before or after interest,
taxes, depreciation, and amortization), net income (either before or after
taxes), earnings per share, and earnings using a non-GAAP
measurement) |
● |
multiples of
price-to-earnings |
● |
multiples of price-to-earnings to
growth |
● |
return criteria (including return
on net assets, return on gross assets, return on equity, return on
invested capital, stock price appreciation, and total shareholder
return) |
● |
stock price |
● |
cash flow criteria (including
operating cash flow and free cash flow) |
● |
margin criteria (including net
margins and operating margins) |
● |
economic profit |
● |
employee productivity
|
● |
customer satisfaction
metrics |
● |
market share |
● |
employee engagement/satisfaction
metrics |
Any of the above criteria may be
measured with respect to us, or any subsidiary, affiliate or other business unit
of ours, either in absolute terms, terms of growth or as compared to any
incremental increase, as compared to results of a peer group and either in
accordance with, or not in accordance with, generally accepted accounting
principles, or GAAP. The Compensation Committee defines in an objective fashion
the manner of calculating the performance criteria it selects to use for such
awards.
The Compensation Committee may set
performance periods and performance goals that differ from participant to
participant. This may include designating performance goals on either
company-wide or business unit performance, as appropriate for a participants
specific responsibilities.
Establishment of Target
Bonuses |
The Compensation Committee will
designate those eligible employees who are to be participants in the Plan for
each year and will specify the terms and conditions for the determination and
payment of an incentive award to each of those participants. In combination with any of the objective performance measures described above, the Compensation
Committee may condition the payment of an incentive award upon the satisfaction
of such objective or subjective standards as it deems appropriate. Under
ordinary circumstances, performance measures will be established within 90
days of the commencement of a performance period, or within the period that is
the first 25% of any performance period that is shorter than 12
months.
investor.ebayinc.com 31
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PROPOSALS REQUIRING YOUR VOTE
Committee Certification and
Determination of Incentive Awards |
As soon as practicable after the
end of each performance period, the Compensation Committee will certify in
writing (which
may include minutes of a compensation committee meeting) whether the stated performance goals have been met and will determine
the amount of the incentive award to be paid to each Plan participant. The
Compensation Committee may decrease (but cannot increase) an incentive award
paid to a covered employee. In determining that amount, the
Compensation Committee will consider the established target bonuses, the degree
to which the established standards were satisfied and any other objective or
subjective factors it deems appropriate and may reduce the amount of, or
eliminate altogether, any incentive award that would otherwise be
payable.
Payment of Incentive
Awards |
Following the Compensation
Committees determination of incentive awards to be paid, those incentive awards
will generally be paid in cash (subject to any election made by an eligible
employee to defer all or a portion of the incentive award, if permitted to do
so) or equity pursuant to an eBay equity-based award plan under which securities
have been registered on Form S-8 Registration Statement.
Awards Subject to
Clawback |
As of April 2, 2012, any incentive
awards paid under the Plan are subject to forfeiture, recovery, or other action
by eBay as necessary for compliance with any company policy or as required by
law.
If the material terms of the
performance goals under the Plan are approved by our stockholders, it will
continue in effect until the fifth anniversary of the date of such approval. The
Compensation Committee may amend or terminate the Plan at any time and for any
reason. If appropriate to maintain the Plans qualification under Section 162(m)
of the Code, material amendments of the Plan will be conditioned on stockholder
approval.
The Board of Directors Recommends a Vote FOR Proposal
3. |
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PROPOSALS REQUIRING YOUR VOTE
PROPOSAL
4 RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Audit Committee is responsible for
the appointment, compensation, retention and oversight of the independent
auditors retained to audit our consolidated financial statements. We have
appointed PricewaterhouseCoopers LLP, or PwC, as our independent auditors for
the fiscal year ending December 31, 2015. PwC has audited our historical
consolidated financial statements for all annual periods since our incorporation
in 1996. In order to assure continuing auditor independence, the Audit Committee
periodically considers whether there should be a regular rotation of the
independent audit firm. Further, in conjunction with the mandated rotation of
the independent audit firms lead engagement partner, the Audit Committee will
continue to be directly involved in the selection and evaluation of PwCs lead
engagement partner. The Board and the Audit Committee believe that the continued
retention of PwC to serve as our independent auditors is in the best interests
of eBay and our stockholders. We expect that representatives of PwC will be
present at the Annual Meeting, will have an opportunity to make a statement if
they wish, and will be available to respond to appropriate questions.
Our Bylaws do not require that the
stockholders ratify the appointment of PwC as our independent auditors. However,
we are submitting the appointment of PwC to the stockholders for ratification as
a matter of good corporate practice. If the stockholders do not ratify the
appointment, the Board and the Audit Committee will reconsider whether or not to
retain PwC. Even if the appointment is ratified, the Audit Committee, in its
discretion, may change the appointment at any time during the year if it
determines that such a change would be in the best interests of eBay and our
stockholders.
The Board of Directors and the Audit Committee Recommend a Vote
FOR Proposal 4. |
Audit and Other Professional
Fees |
During the fiscal years ended December
31, 2014 and December 31, 2013, fees for services provided by PwC were as
follows (in thousands):
|
|
Year Ended December
31, |
|
|
2014 |
|
2013 |
Audit Fees |
|
$12,321 |
|
$10,796 |
Audit-Related Fees |
|
1,370 |
|
2,154 |
Tax Fees |
|
874 |
|
820 |
All Other Fees
(1) |
|
2,243 |
|
1,405 |
Total |
|
$16,807 |
|
$15,175 |
(1) For 2014 and 2013, includes approximately $1.7
million and $0.3 million, respectively, of lease payments to PwC Russia for
office space in Russia pursuant to a sublease arrangement negotiated on an
arms-length basis.
Audit Fees consist of fees incurred
for services rendered for the audit of eBays annual financial statements,
review of financial statements included in eBays quarterly reports on
Form 10-Q, other services normally provided in
connection with statutory and regulatory filings, for attestation services
related to compliance with the Sarbanes-Oxley Act of 2002, and services rendered
in connection with securities offerings. Audit-Related Fees consist of fees
incurred for due diligence procedures in connection with acquisitions and
divestitures and consultation regarding financial accounting and reporting
matters. Tax Fees consist of fees incurred for transfer pricing consulting
services, tax planning and advisory services, and tax compliance services. All
Other Fees consist of fees incurred for permitted services not included in the
category descriptions provided above with respect to Audit Fees,
Audit-Related Fees, and Tax Fees, and include fees for consulting services,
compliance-related services, and software licenses, as well as the lease
payments described above.
The Audit Committee has determined that
the non-audit services rendered by PwC were compatible with maintaining its
independence. All such non-audit services were pre-approved pursuant to the
pre-approval policy set forth below.
investor.ebayinc.com 33
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PROPOSALS REQUIRING YOUR VOTE
Audit Committee Pre-Approval
Policy |
The Audit Committee has adopted a
policy requiring the pre-approval of any non-audit engagement of PwC. In the
event that we wish to engage PwC to perform accounting, technical, diligence, or
other permitted services not related to the services performed by PwC as our
independent registered public accounting firm, our internal finance personnel
will prepare a summary of the proposed engagement, detailing the nature of the engagement, the reasons why PwC is
the preferred provider of such services, and the estimated duration and cost of
the engagement. The report will be provided to our Audit Committee or a
designated committee member, who will evaluate whether the proposed engagement
will interfere with the independence of PwC in the performance of its auditing
services.
On an interim basis, any non-audit engagement may be presented to the Chair of the Audit Committee for approval and to the full Audit Committee at its next regularly scheduled meeting.
AUDIT COMMITTEE REPORT
We constitute the Audit Committee of
the Board. The Audit Committees responsibility is to provide assistance and
guidance to the Board in fulfilling its oversight responsibilities to eBays
stockholders with respect to:
eBays corporate accounting and reporting
practices; |
eBays compliance with legal and regulatory
requirements; |
The independent auditors qualifications and
independence; |
The performance of eBays internal audit function and
independent auditors; |
The quality and integrity of eBays financial statements
and reports; |
Reviewing and approving all audit engagement fees and
terms, as well as all non-audit engagements with the independent
auditors; and |
Producing this
report. |
The Audit Committee members are not
professional accountants or auditors and these functions are not intended to
replace or duplicate the activities of management or the independent auditors.
Management has primary responsibility for preparing the financial statements and
designing and assessing the effectiveness of internal control over financial
reporting. Management and the internal auditing department are responsible for
maintaining appropriate accounting and financial reporting principles and
policies and internal controls and procedures that provide for compliance with
accounting standards and applicable laws and regulations. PwC, eBays
independent auditors, are responsible for planning and carrying out an audit of
eBays financial statements in accordance with the standards of the Public
Company Accounting Oversight Board (United States) and eBays internal control
over financial reporting, expressing an opinion on the conformity of eBays
audited financial statements with generally accepted accounting principles as
well as the effectiveness of eBays internal control over financial reporting,
reviewing eBays quarterly financial statements prior to the filing of each
quarterly report on Form 10-Q, and other procedures.
During 2014 and in early 2015, in
connection with the preparation of eBays annual report on Form 10-K for the
year ended December 31, 2014, and in fulfillment of our oversight
responsibilities, we did the following, among other things:
Discussed with PwC the overall
scope of and plans for their audit; |
Reviewed, upon completion of the
audit, the financial statements to be included in the Form 10-K and
managements report on internal control over financial reporting and
discussed the financial statements and eBays internal control over
financial reporting with management; |
Conferred with PwC and with senior
management of eBay regarding the scope, adequacy, and effectiveness of
internal accounting and financial reporting controls (including eBays
internal control over financial reporting) in effect; |
Instructed PwC that the
independent auditors are ultimately accountable to the Board and the Audit
Committee, as representatives of the stockholders; |
Discussed with PwC both during and
after completion of their audit processes, the results of their audit,
including PwCs assessment of the quality and appropriateness, not just
acceptability, of the accounting principles applied by eBay, the
reasonableness of significant judgments, the nature of significant risks
and exposures, the adequacy of the disclosures in the financial statements
as well as other matters required to be communicated under generally
accepted auditing standards, including the matters required by applicable
accounting standards; and |
Obtained from PwC, in connection with the audit, a timely report
relating to eBays annual audited financial statements describing all
critical accounting policies and practices to be used, all alternative
treatments of financial information within generally accepted
accounting principles that were discussed with management, ramifications
of the use of such alternative disclosures and treatments, the
treatment preferred by PwC, and any material written communications
between PwC and management. |
Our committee held 10 meetings in 2014.
Throughout the year, we conferred with PwC, eBays internal audit team, and
senior management in separate executive sessions to discuss any
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PROPOSALS REQUIRING YOUR VOTE
matters that the Audit Committee, PwC,
the internal audit team, or senior management believed should be discussed
privately with the Audit Committee. We have direct and private access to both
the internal and external auditors of eBay.
We have discussed with PwC the matters
required to be discussed by the statement on Auditing Standards No. 16
(Communication with Audit Committees). The Audit Committee has also received the
written disclosures and the letter from PwC required by the applicable Public
Company Accounting Oversight Board requirements for independent accountant
communications with audit committees concerning auditor independence, and has
discussed the independence of PwC with that firm. We have concluded that PwCs
provision to eBay and its affiliates of the non-audit services reflected under
Audit-Related Fees, Tax Fees, and All Other Fees above is compatible with
PwCs obligation to remain independent.
We have also established procedures for
the receipt, retention, and treatment of complaints received by eBay regarding
accounting, internal accounting controls, or auditing matters and for the
confidential anonymous submission by eBay employees of concerns regarding
questionable accounting or auditing matters.
After reviewing the qualifications of
the current members of the committee, and any relationships they may have with
eBay that might affect their independence from eBay, the Board determined that
each member of the Audit Committee meets the
independence requirements of the Nasdaq Global Select Market and of Section 10A
of the Exchange Act, that each member is able to read and understand fundamental
financial statements, and that Mr. Anderson qualifies as an audit committee
financial expert under the applicable rules promulgated pursuant to the
Exchange Act. The Audit Committee operates under a written charter adopted by
the Board. The Audit Committee Charter, as so amended, is shown on the corporate
governance section of eBays investor relations website at http://investor.ebayinc.com/corporate-governance.cfm.
Any future changes in the committee charter or key practices will also be
reflected on the website.
Based on our reviews and discussions
described above, we recommended to the Board, and the Board approved, the
inclusion of the audited financial statements in eBays Annual Report on Form
10-K for the year ended December 31, 2014, which eBay filed with the SEC on
February 6, 2015. We have also recommended, and the Board has approved, the
appointment of PwC as our independent auditors for the fiscal year ending
December 31, 2015.
AUDIT
COMMITTEE
Fred D. Anderson (Chairman)
David M.
Moffett
Richard T. Schlosberg, III
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PROPOSALS REQUIRING YOUR VOTE
PROPOSAL 5 STOCKHOLDER PROPOSAL REGARDING STOCKHOLDER ACTION
BY WRITTEN CONSENT WITHOUT A MEETING
John Chevedden, whose address is 2215
Nelson Ave., No. 205, Redondo Beach, California, has advised the Company that he
intends to present the following stockholder proposal at the 2015 Annual
Meeting. Mr. Chevedden has indicated that he holds no fewer than 180 shares of
eBay common stock.
The text of the stockholder proposal
and supporting statement appear exactly as received by eBay unless otherwise
noted. All statements contained in the stockholder proposal and supporting
statement are the sole responsibility of the proponent. The stockholder proposal
may contain assertions about the Company or other matters that we believe are
incorrect, but we have not attempted to refute all of those
assertions.
The stockholder proposal will be voted
on at the 2015 Annual Meeting only if properly presented by or on behalf of the
proponent. Adoption of this proposal requires the affirmative vote of a majority
of the shares present in person or represented by proxy. Abstentions will be
counted as present for purposes of this vote and therefore will have the same
effect as a vote against this stockholder proposal. Broker non-votes will not be
counted as present and are not entitled to vote on this proposal.
The Board recommends a vote AGAINST
the stockholder proposal based on the reasons set forth in eBays Statement of
Opposition following the stockholder proposal.
Proposal 5 Stockholder Proposal
Regarding Stockholder Action by Written Consent Without a
Meeting |
John Cheveddens
Proposal and Supporting Statement (as received)
Proposal 5 Right to Act by Written
Consent
Resolved, Shareholders request that our
board of directors undertake such steps as may be necessary to permit
written consent by shareholders entitled to cast the minimum number of
votes that would be necessary to authorize the action at a meeting at
which all shareholders entitled to vote thereon were present and voting.
This written consent is to be consistent with applicable law and
consistent with giving shareholders the fullest power to act by written
consent consistent with applicable law. This includes shareholder ability
to initiate any topic for written consent consistent with applicable
law.
Wet Seal (WTSLA) shareholders successfully used written consent to
replace certain underperforming directors in 2012. This proposal topic
also won majority shareholder support at 13 major companies in a single
year. This included 67%-support at both Allstate and Sprint. Hundreds of
major companies enable shareholder action by written
consent.
A shareholder right to act by written consent and to call a special
meeting are 2 complimentary ways to bring an important matter to the
attention of both management and shareholders outside the annual meeting
cycle. This is important because there could be 15-months between annual
meetings. A shareholder right to act by written consent is one method to
equalize our limited provisions for shareholders to call a special
meeting. For instance 25% of eBay shareholders are now needed to call a
special meeting when Delaware law allows 10% of
shareholders.
An added incentive to vote for this proposal is our Companys
clearly improvable corporate governance as reported in
2014:
GMI Ratings, an independent investment research firm gave our
company a F in accounting and D for executive pay with $48 million in 2013
Total Realized Pay for John Donahoe. eBay did not disclose specific,
quantifiable performance objectives for our CEO. Unvested equity pay does
not lapse upon CEO termination. Meanwhile shareholders had a potential 9%
stock dilution.
Five directors had 10 to 18-years long tenureindependence concern.
These directors controlled 45% of the votes on our board
committees-further extending their influence. Our full board had only 5
meetings in a year and there were only 2 directors on our audit committee.
David Dorman was potentially overcommitted with seats on 4 public boards.
There was not one independent director who had general expertise in risk
management, based on GMIs standards.
Returning to the core topic of this proposal from the context of
our clearly improvable corporate governance, please vote to protect
shareholder value:
Right to Act by Written Consent Proposal 5*
*** |
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eBays Statement in
Opposition |
The Board has carefully considered this
proposal and, for the reasons set forth below, does not believe that it is in
the best interests of eBay and its stockholders.
The Board believes that eBays
stockholders are best served by holding meetings whereby all stockholders are
provided with notice of the meeting and an opportunity to consider and discuss
the proposed actions and vote their shares. Currently, eBays Amended and
Restated Certificate of Incorporation and Bylaws provide that special meetings
of eBays stockholders may be called at the request of holders of 25% of eBays
outstanding common stock. This is only one-half of the percentage of
stockholders that would be necessary to act by written consent under the
proposal. Therefore, any coalition of investors proposing to act by written
consent could certainly call a special meeting. This gives eBays stockholders a
meaningful ability to propose actions for stockholder consideration between
annual meetings.
All eBay stockholders have the
opportunity to participate in annual stockholder meetings and any special
stockholder meetings called pursuant to the procedure described above to
determine proposed actions. These stockholder meetings offer important
protections and advantages that are absent from the written consent
process:
The meeting and the stockholder
vote take place in a transparent manner on a specified date that is
publicly announced well in advance, giving all interested stockholders a
chance to express their views and cast their votes; |
The meeting provides stockholders
with a forum for open discussion and consideration of the proposed
stockholder action; |
Accurate and complete information
about the proposed stockholder action is widely distributed in the proxy
statement before the meeting, which promotes a well-informed discussion on
the merits of the proposed action; and |
The Board is able to analyze and
provide a recommendation with respect to actions proposed to be taken at a
stockholder meeting. |
In contrast, adoption of this proposal
would make it possible for the holders of a bare majority of shares of eBay
common stock outstanding to take significant corporate action without any prior
notice to the Company or the other eBay stockholders, and without giving all
stockholders an opportunity to consider, discuss, and vote on stockholder
actions that may have important ramifications for both eBay and its
stockholders. This approach would effectively disenfranchise all of those
stockholders who do not have (or are not given) the opportunity to participate
in the written consent. If this proposal were
implemented, proposed stockholder actions involving important decisions could be
approved without the important safeguard of advance notice to all eBay
stockholders and without the benefit of enabling all eBay stockholders to
consider arguments for and against, express their views, and vote. The Board believes that the written consent procedure is more appropriate for a
closely-held corporation with a small number of stockholders, and not for a
widely-held public company such as eBay.
The Board further believes that eBays
strong corporate governance practices make adoption of this proposal
unnecessary. In addition to giving stockholders the right to call special
meetings, eBays corporate governance practices already provide transparency and
accountability of the Board to all of eBays stockholders, and demonstrate that
eBay is responsive to stockholder concerns:
Annual Election of Board of
Directors All eBay directors are elected annually by the stockholders,
and stockholders can remove directors with or without
cause. |
Majority Voting eBay has
adopted a majority voting standard for the election of directors in
uncontested elections. In addition, eBays charter and bylaw provisions do
not have supermajority voting provisions stockholders can approve
binding bylaw amendments with a majority vote. |
No Stockholder Rights Plan eBay
does not have a stockholder rights plan, also known as a poison
pill. |
Stockholder Engagement
Stockholders can communicate directly with the Board and/or individual
directors. In addition, eBay regularly engages with its investors to
solicit their views on important issues such as executive compensation and
corporate governance in general. eBay has, for example, added directors
and made significant changes to its corporate governance based on direct
input from, and discussions with,
stockholders. |
For the reasons set forth above, the
Board believes that implementation of this proposal is not in the best interests
of eBay and its stockholders.
The Board of Directors Recommends a Vote AGAINST Proposal
5. |
Unless you specify otherwise, the Board
intends the accompanying proxy to be voted against this item.
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PROPOSAL 6 STOCKHOLDER PROPOSAL REGARDING
STOCKHOLDER PROXY
ACCESS
The Comptroller of the City of New York
has advised the Company that it is the custodian and trustee of the New York
City Employees Retirement System, the New York City Fire Department Pension
Fund, the New York City Teachers Retirement System, and the New York City
Police Pension Fund, and custodian of the New York City Board of Education
Retirement System (the NY Funds), and that it intends to present the following
stockholder proposal at the 2015 Annual Meeting on behalf of the Systems. Each
of the NY Funds has advised the company that it holds a number of shares
representing more than $2,000 of eBay common stock.
The text of the stockholder proposal
and supporting statement appear exactly as received by eBay unless otherwise
noted. All statements contained in the stockholder proposal and supporting
statement are the sole responsibility of the proponent. The stockholder proposal
may contain assertions about the Company or other matters that we believe are
incorrect, but we have not attempted to refute all of those
assertions.
The stockholder proposal will be voted
on at the 2015 Annual Meeting only if properly presented by or on behalf of the
proponent. Adoption of this proposal requires the affirmative vote of a majority
of the shares present in person or represented by proxy. Abstentions will be
counted as present for purposes of this vote and therefore will have the same
effect as a vote against this stockholder proposal. Broker non-votes will not be
counted as present and are not entitled to vote on this proposal.
The Board recommends a vote AGAINST
the stockholder proposal based on the reasons set forth in eBays Statement of
Opposition following the stockholder proposal.
The Board
currently intends to implement an appropriate, reasonable form of proxy
access even if this proposal does not receive the required vote of
stockholders. The board believes that the best form of proxy access for
eBay differs from the proxy access construct advanced by the stockholder
proponent. |
Proposal 6 Stockholder Proposal Regarding Stockholder Proxy
Access |
Comptroller of the City of New York Proposal and Supporting
Statement (as received)
RESOLVED: Shareholders of eBay Inc. (the Company) ask the board of
directors (the Board) to adopt, and present for shareholder approval, a proxy
access bylaw. Such a bylaw shall require the Company to include in proxy
materials prepared for a shareholder meeting at which directors are to be
elected the name, Disclosure and Statement (as defined herein) of any person
nominated for election to the board by a shareholder or group (the Nominator)
that meets the criteria established below. The Company shall allow shareholders
to vote on such nominee on the Companys proxy card.
The
number of shareholder-nominated candidates appearing in proxy materials shall
not exceed one quarter of the directors then serving. This bylaw, which shall
supplement existing rights under Company bylaws, should provide that a Nominator
must:
a) |
|
have
beneficially owned 3% or more of the Companys outstanding common stock
continuously for at least three years before submitting the
nomination; |
b) |
|
give the
Company, within the time period identified in its bylaws, written notice
of the information required by the bylaws and any Securities and Exchange
Commission rules about (i) the nominee, including consent to being named
in the proxy materials and to serving as director if elected; and (ii) the
Nominator, including proof it owns the required shares (the Disclosure);
and |
c) |
|
certify that (i) it will assume liability stemming from any legal
or regulatory violation arising out of the Nominators communications with
the Company shareholders, including the Disclosure and Statement; (ii) it
will comply with all applicable laws and regulations if it uses soliciting
material other than the Companys proxy materials; and (c) to the best of
its knowledge, the required shares were acquired in the ordinary course of
business and not to change or influence control at the
Company. |
The
Nominator may submit with the Disclosure a statement not exceeding 500 words in
support of the nominee (the Statement). The Board shall adopt procedures for
promptly resolving disputes over whether notice of a nomination was timely,
whether the Disclosure and Statement satisfy the bylaw and applicable federal
regulations, and the priority to be given to multiple nominations exceeding the
one-quarter limit.
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SUPPORTING STATEMENT
We
believe proxy access is a fundamental shareholder right that will make directors
more accountable and contribute to increased shareholder value. The CFA
Institutes 2014 assessment of pertinent academic studies and the use of proxy
access in other markets similarly concluded that proxy access:
● |
Would benefit
both the markets and corporate boardrooms, with little cost or
disruption. |
● |
Has the potential to
raise overall US market capitalization by up to $140.3 billion if adopted
market-wide. (http://www.cfapubs.org/ doi/pdfIl0.2469/ccb.
v20I4.n9.I) |
The
proposed bylaw terms enjoy strong investor support - votes for similar
shareholder proposals averaged 55% from 2012 through September 2014 - and
similar bylaws have been adopted by companies of various sizes across
industries, including Chesapeake Energy, Hewlett-Packard, Western Union and
Verizon.
We
urge shareholders to vote FOR this proposal.
***
eBays Statement in
Opposition |
The Board Recommends You Vote
AGAINST This Proposal For The Following Reasons:
eBays Board has carefully
considered this stockholder proposal and does not believe that its
adoption, in the form proposed, is in the best interests of eBay and its
stockholders. In particular, the Board believes that this proposal was not
prepared with eBays specific attributes in mind and has features that
could lead to significant disruption and distraction to the detriment of
the Company and its stockholders. The Board
currently intends to implement an appropriate, reasonable form of proxy
access even if this proposal does not receive the required vote of
stockholders. The Board believes that the best form of proxy access for
eBay differs from the proxy access construct advanced by the stockholder
proponent. |
eBays Board believes that strong
corporate governance practices that provide meaningful rights to our
stockholders and ensure director accountability are key to our relationships
with our stockholders and to promoting their long-term interests. eBay regularly
monitors and responds to corporate governance developments, including with
respect to evolving issues such as proxy access. eBay is not opposed to proxy
access in principle, but the Board believes that an appropriate framework for
proxy access should be specifically tailored to enhance the rights of
significant, long-term stockholders without unduly risking the costs and
distractions associated with encouraging unnecessary contests in director
elections.
In addition, eBays Board believes that
the appropriate process for implementing new proxy access rights as a permanent
feature of eBays corporate governance should be a deliberate and measured one,
involving consultation with stockholders, a review of marketplace developments,
and consideration of unintended consequences.
The eBay Board believes that the proxy
access framework advocated by this proposal fails to strike the right balance.
In particular, because this proposal (i) seeks a relatively low proxy access
ownership threshold (3%) without expressly providing for reasonable limits on
permitted aggregation or grouping of stockholders to meet this threshold, (ii)
does not take into account whether and the extent to which stockholder-nominated
candidates are already on the Board, and (iii) contemplates an extremely high
proportion of the Board (25%) being available for proxy access candidates, it
risks introducing a disruptive and potentially destabilizing dynamic into the
Board election process. Were this proposal to be implemented as proposed, eBay
would be subject to the continuous distraction of the threat of annual proxy
contests that could over time shift control. Not only would this be very likely
to adversely affect the Companys operations, but it would be a particularly
unjustified outcome given the significant extent to which our existing corporate
governance structure already ensures responsiveness and accountability to
stockholders.
As described below, even if this
proposal fails to pass, the Board intends to continue to engage with
stockholders to develop an appropriate, Company-specific version of proxy access
that could grant new rights to stockholders on terms that we believe are much
more appropriate for the Company and much less likely to put stockholder value
at risk. Accordingly, stockholders should understand that supporting this
proposal is neither the only nor, in our view, the preferable path to achieving
proxy access at eBay.
The proposal
reflects a one size fits all approach to proxy access that fails to recognize
that eBays strong corporate governance structure already ensures the Board is
accountable and responsive to stockholders.
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PROPOSALS REQUIRING YOUR VOTE
The Board notes that the proponent and
other pension funds submitted substantially identical versions of this proposal
to nearly one hundred companies, failing to draw any distinction between the
specific circumstances and governance profiles of each individual company. This
proposal therefore does not take into account the Boards actions to develop a
strong corporate governance profile that promotes clear accountability and
responsiveness to stockholders. In determining to recommend that you vote
against this proxy access proposal, the Board took into account the following
factors that underscore the Companys strong governance profile:
● |
Regular
Strategic Reviews Culminating in Decisive Strategic, Stockholder-Oriented
Action Following thorough strategic reviews of eBays growth
strategies, structure and the evolving industry landscape, the eBay Board
unanimously approved a plan to separate the Companys eBay and PayPal
businesses into independent publicly traded companies. |
● |
Active
Stockholder Engagement eBay regularly engages with its investors
to solicit their views on important issues such as executive compensation,
corporate governance and company strategies. Stockholders can communicate
directly with the Board, individual committees and/or individual
directors. |
● |
Demonstrated
Openness to Stockholder Representation on the Board Through
engagement and negotiated resolutions, eBay has agreed to appoint
stockholder-nominated candidates to its Board. |
● |
Separation of
CEO and Chairman Roles eBays CEO does not serve as Chairman of
the Board. |
● |
Robust Lead
Independent Director Structure eBays independent directors are
led by an experienced and empowered lead director with clear powers and
authorities. |
● |
Majority-Independent, World-Class Board eBays
independent Board has been designed to effectively advocate for the
interests of all stockholders. It is an exceptionally strong Board, with a
diverse group of highly qualified directors with deep experience in the
technology and financial services sectors and a track record of value
creation. The strength of the Board is testament to the effective and
independent workings of the Corporate Governance and Nominating
Committee. |
● |
Strong
Director Succession and Board Refreshment Practices eBays Board
and Corporate Governance and Nominating Committee have recently added new,
highly qualified, independent directors to the Board to infuse new ideas
and fresh perspectives into the boardroom, while preserving valuable
institutional knowledge. Seven of the Boards 15 members standing for
election at this Annual Meeting joined the Board in the past year, and the
Board develops and reviews long-range Board succession plans to identify,
recruit and appoint new directors who meet our robust Board composition
guidelines and director selection criteria. |
● |
Stockholder
Rights to Call Special Meetings eBays stockholders may call a
special meeting at which they can nominate director candidates or propose
other business at the request of holders of 25% of eBays outstanding
common stock. |
● |
Annual Election of Board of Directors All eBay
directors are elected annually by the stockholders, and stockholders can
remove directors with or without cause. |
● |
Majority
Voting eBay has adopted a majority voting standard for the
election of directors in uncontested elections and directors who do not
receive majority support must tender their resignations. |
● |
No
Supermajority Provisions eBays charter and bylaw provisions do
not have supermajority voting provisions, and stockholders can approve
binding bylaw amendments with a simple majority vote. |
● |
No
Stockholder Rights Plan eBay does not have a stockholder rights
plan, also known as a poison pill. |
● |
Stockholder
Proposals for Inclusion on the Companys Proxy Statement
Stockholders can seek changes by submitting proposals for inclusion in our
annual proxy statement to be voted on at our annual stockholders
meeting. |
● |
Stockholder
Impact on Board Composition Stockholders can influence the
composition of the Board by providing direct feedback to the Board,
including proposing director nominees for consideration by the independent
directors, nominating directors directly pursuant to the Companys bylaws
and soliciting proxies for their preferred director nominees under federal
proxy rules. |
The version of proxy access
contemplated by the proposal is inappropriate and unnecessary for a Company with
existing policies and procedures as robust and stockholder-friendly as
eBays.
The
proposals suggested proxy access framework could have significant adverse
consequences.
The Board strongly believes that
allowing one quarter of the Board to be elected through proxy access every year
may be highly disruptive, may adversely affect the continuity and effectiveness
of the Boards operations and, especially when taken together with other
stockholder-nominated candidates, may have serious control-shifting
implications. To the extent the concept of proxy access has merit, it is to
provide a companys significant long-term stockholders a greater voice in its
direction and management, reflected in representation on the board, not to
thrust the company into perpetual proxy contests. Many companies faced with this
proposal have expressed the view that the limit on the number of directors
elected by proxy access should be significantly below 25%. eBay believes that
25% is too high and would have serious negative consequences.
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In addition, the Board concurs with the
views expressed by several major institutional investors that a 3% threshold is
too low given the potential costs and disruption that could result from such a
proxy access regime, particularly in light of the lack of reasonable limits on
grouping in this proposal. Candidates placed directly into our proxy materials
by holders or unlimited groups of holders of as little as 3% of our outstanding
shares may serve the special interests and particular agendas of those holders
and fail to represent the best interests of the Company and its stockholders as
a whole. Unlike the independent members of the Corporate Governance and
Nominating Committee, who owe fiduciary duties to all of our stockholders when
recommending director candidates, stockholders and stockholder groups invoking
the proposed proxy access process would have no fiduciary obligations to other
stockholders and may cause the Company considerable expense and distraction,
while serving only such stockholders own interests. The wrong kind of proxy
access would unduly undermine the role of eBays independent and highly
effective Corporate Governance and Nominating Committee, and could foment a
value-destructive short-term focus on the part of the Board and management
team and discourage highly qualified director
candidates from serving. The Board believes the low proxy access ownership
threshold, the absence of a specified cap on aggregation, the failure to take
account of existing stockholder representation on the Board, and the high
permissible percentage of proxy access candidates contemplated by this proposal
do not adequately protect the Company and its stockholders from these
significant risks.
The Board
currently intends to implement an appropriate, reasonable form of proxy
access even if this proposal does not receive the required vote of
stockholders. The Board believes that the best form of proxy access for
eBay differs from the proxy access construct advanced by the stockholder
proponent. |
The Board of Directors
Recommends a Vote AGAINST Proposal
6. |
Unless you specify otherwise, the Board
intends the accompanying proxy to be voted against this item.
PROPOSAL 7 STOCKHOLDER PROPOSAL REGARDING GENDER
PAY
Arjuna Capital/Baldwin Brothers Inc.,
whose address is 204 Spring Street, Marion, Massachusetts, on behalf of Dylan
Sage, has advised the Company that it intends to present the following
stockholder proposal at the 2015 Annual Meeting. Mr. Sage has indicated that he
holds more than $2,000 of eBay common stock.
The text of the stockholder proposal
and supporting statement appear exactly as received by eBay unless otherwise
noted. All statements contained in the stockholder proposal and supporting
statement are the sole responsibility of the proponent. The stockholder proposal
may contain assertions about the Company or other matters that we believe are
incorrect, but we have not attempted to refute all of those
assertions.
The stockholder proposal will be voted
on at the 2015 Annual Meeting only if properly presented by or on behalf of the
proponent. Adoption of this proposal requires the affirmative vote of a majority
of the shares present in person or represented by proxy. Abstentions will be
counted as present for purposes of this vote and therefore will have the same
effect as a vote against this stockholder proposal. Broker non-votes will not be
counted as present and are not entitled to vote on this proposal.
The Board recommends a vote AGAINST
the stockholder proposal based on the reasons set forth in eBays Statement of
Opposition following the stockholder proposal.
investor.ebayinc.com 41
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PROPOSALS REQUIRING YOUR VOTE
Proposal 7 Stockholder Proposal Regarding Gender
Pay |
Arjuna
Capital/Baldwin Brothers Inc.s Proposal and Supporting Statement (as
received)
Gender Pay Parity
Whereas:
The
median income for a woman working full time in the United States is reported to
be 78 percent of that of their male counterparts and the technology industry
struggles to attract and retain women workers. A large body of evidence suggests
that diversity leads to better performance.
A
November 2014 New Yorker article reports that men make up sixty to seventy
percent of employees at technology companies, forty-five percent of tech
companies dont have a single female executive, there are few women in senior
management and on company boards, and there are high rates of attrition among
women in technology occupations. In 2008, the Harvard Business Review reported a
study indicating 56 percent of the mid career women working in tech ended up
leaving the field. Further, the Atlantic reports, while 57 percent of
occupations in the workforce are held by women, in computing occupations that
figure is only 25 percent.
Women are represented even less in executive positions. At eBay,
approximately 42% of our Companys employees are women, but women only account
for 28% of the firms leadership.
Mckinsey & Company has found companies with highly diverse executive
teams had higher returns on equity and earnings performance than those with low
diversity and a May 2014 study found gender diverse teams were better at driving
radical innovation.
The
National Center for Women and Information Technology reports key benefits of
gender diversity include: better financial performance, superior team dynamics
and productivity, teams that stay on schedule and under budget, and improved
employee performance.
Regulatory and litigation risk also exists related to pay parity. The
Paycheck Fairness Act of 2014 is pending before Congress to improve
company-level transparency and strengthen penalties for equal-pay
violations.
President Obama has signed an executive action requiring companies who do
business with the federal government to report pay data by gender and race.
AstraZeneca and G&K Services Co. where both forced to pay settlements after
the government sued them for gender discrimination.
The
Wall Street Journal reports, Academic research attributes salary inequalities
to several factors from outright bias to women failing to ask for raises. Some
research suggests that employers put a premium on working long hours, which puts
women at a disadvantage because they are often responsible for more housework
and child care. Harvard University economist Claudia Goldin concluded the pay
gap stems from women making less in the same jobs as their male
counterparts.
Reuters reports Microsofts CEO was criticized for suggesting women in
technology should not ask for raises but have faith in the
system.
Resolved:
Shareholders request eBay prepare a report by September
2015, omitting proprietary information and prepared at reasonable cost, on the
Companys policies and goals to reduce the gender pay gap.
Supporting
Statement: A report adequate for investors to
assess eBays strategy and performance would include the percentage pay gap
between male and female employees, policies to improve performance, and
quantitative reduction targets.
***
eBays Statement in
Opposition |
The Board has carefully considered this
proposal and, for the reasons set forth below, does not believe that it is in
the best interests of eBay and its stockholders.
As a leader in commerce and digital
payments, we take diversity seriously. Since eBay was founded in 1995, we have
believed in the power of technology to democratize commerce and create more
opportunities for all. We believe in the same power of inclusion and opportunity
inside our company. Enabling talented people to thrive matters. Diversity
matters. It makes us stronger, and it makes us better.
While we are committed to fostering all
types of diversity, increasing the number of women in leadership roles, in
particular, has been a long-standing focus for the Company. In 2010, eBay Inc.
President and CEO John Donahoe launched our Womens Initiative Network (WIN).
The mission of WIN is to attract and engage women to build lasting, successful
careers in the Company.
Through WIN, we have more than doubled
the number of women in leadership roles and increased the share of leadership
positions held by women. And we have continued to expand
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PROPOSALS REQUIRING YOUR VOTE
WIN around the world. Supporting our
commitment to women, we also maintain partnerships with the Anita Borg Institute
and Lean In. And we leverage research insights from the Clayman Institute for
Gender Research at Stanford University, as well as from leading academics. In
various leadership forums globally, we provide ongoing diversity and inclusion
training, including gender diversity and unconscious bias.
In August 2014, we publicly shared our
global gender diversity and U.S. ethnic diversity workforce data, which can be
found at http://blog.ebay.com/building-stronger-better-diverse-ebay/,
and we committed to publishing this data annually as well. The 2014 data shows
that our continued focus on diversity and inclusion has positioned us as an
industry leader, with women representing 42 percent of our global workforce and
28 percent of our global leaders. Moreover, eBay Inc.s board of directors
includes three women, Bonnie S. Hammer, Gail J. McGovern, and Kathleen C.
Mitic.
We remain committed to our on-going
efforts to promote diversity in the workplace and strongly believe we continue
to make demonstrable progress in building a diverse eBay. As such, the Board
feels that the proposal would not enhance the Companys existing commitment to
an inclusive culture or meaningfully further its goal and efforts in support of
workplace diversity.
For the reasons set forth above, the
Board believes that implementation of this proposal is not in the best interests
of eBay and its stockholders.
The Board
of Directors Recommends a Vote AGAINST Proposal
7. |
Unless you specify otherwise, the Board
intends the accompanying proxy to be voted against this item.
investor.ebayinc.com 43
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OUR EXECUTIVE OFFICERS
Executive officers are elected annually
by the Board and serve at the discretion of the Board. Set forth below is
information regarding our executive officers as of March 18, 2015.
Name |
|
Age |
|
Position |
|
Biography |
John J. Donahoe |
|
54 |
|
President and Chief Executive Officer |
|
John J. Donahoes biography is set forth under the
heading Proposal 1 Election of Directors Nominees for Election for a
One-Year Term Expiring at Our 2016 Annual Meeting, above. |
Elizabeth L. Axelrod |
|
52 |
|
Senior Vice President, Human Resources |
|
Elizabeth L. Axelrod serves eBay as Senior Vice
President, Human Resources. She has served in that capacity since March
2005. |
Michael R. Jacobson |
|
60 |
|
Senior Vice President, Legal Affairs, General Counsel
and Secretary |
|
Michael R. Jacobson serves eBay as Senior Vice President,
Legal Affairs, General Counsel and Secretary. He has served in that
capacity or as Vice President, Legal Affairs, General Counsel since August
1998. |
Alan L. Marks |
|
52 |
|
Senior Vice President,
Corporate Communications |
|
Alan L. Marks serves eBay as Senior Vice President,
Corporate Communications. He has served in that capacity since April 2008.
From February 2005 to April 2008, Mr. Marks served as Director, Corporate
Media Relations of Nike, Inc., a sports equipment and sportswear
company. |
Daniel H. Schulman |
|
57 |
|
President and CEO-designee, PayPal |
|
Daniel H. Schulman serves eBay as President and
CEO-designee, PayPal. He has served in that capacity since September 2014.
From August 2010 to August 2014, Mr. Schulman served as Group President,
Enterprise Group of American Express. Mr. Schulman was President, Prepaid
Group of Sprint Nextel Corporation, a cellular phone service provider,
from November 2009 until August 2010, when Sprint Nextel acquired Virgin
Mobile, USA, a cellular phone service provider. |
Robert H. Swan |
|
54 |
|
Senior Vice President, Finance and Chief Financial
Officer |
|
Robert H. Swan serves eBay as Senior Vice President,
Finance and Chief Financial Officer. He has served in that capacity since
March 2006. |
Devin N. Wenig |
|
48 |
|
President and CEO-designee,
eBay Marketplaces |
|
Devin N. Wenig serves eBay as President and CEO-designee,
eBay Marketplaces. He has served as President, eBay Marketplaces since
September 2011 and as CEO-designee since September 2014. From April 2008 to
August 2011, Mr. Wenig served as Chief Executive Officer of Thompson
Reuters Markets, the largest division of Thomson Reuters Inc., a global
media organization. From June 2006 to April 2008, Mr. Wenig was Chief
Operating Officer and a Board member of Reuters Group PLC, a global media
company. |
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COMPENSATION DISCUSSION AND ANALYSIS
Dear eBay Stockholder,
In 2014, under the leadership of John
Donahoe, our CEO, the Company undertook a thorough strategic review of its
commerce business and its payments business. For more than a decade eBay and
PayPal mutually benefited from being part of one company, creating substantial
stockholder value. However, following that strategic review, the Companys
management and Board unanimously agreed that keeping eBay and PayPal together
beyond 2015 clearly became less advantageous to each business strategically and
competitively. Therefore, in September 2014, the Board approved a plan to
separate its eBay Marketplaces and PayPal businesses into independent, publicly
traded companies in 2015. The priorities of the current executive management
team therefore expanded to include not only delivering business results for the
Company but also the important work of creating a transition plan to build two
great internet companies with strong foundations, business models and leadership
teams. The compensation programs for late 2014 and 2015 reflect those
priorities.
During this important transition period
in the Companys history, the Board extends its heartfelt thanks and deep
appreciation to Mr. Donahoe and his corporate leadership team, which has worked
together since Mr. Donahoe became CEO in 2008. This team led the strategy work
that resulted in the Board deciding to separate eBay and PayPal. The decision by
Mr. Donahoe and his team to not place themselves in operating roles in either of
the new companies has enabled a highly effective separation process and smooth
management succession plan. The teams decisions and actions on behalf of eBay,
PayPal, and the Companys stockholders give the Board great confidence in its
decision, the overall separation process and the future success of eBay and
PayPal.
The Compensation Committee of your
Board is committed to an executive compensation program designed to serve the
long-term interests of our stockholders. We believe that attracting and
retaining superior talent supported by a competitive compensation program that
is highly performance-based is key to delivering long-term stockholder
returns. At no time have these goals been as important as they are during this
critical time as we transition to becoming two great, independent
businesses.
The Compensation Discussion and
Analysis that follows covers the Committees decisions regarding our named
executive officers compensation for 2014, as well as actions we have taken in
connection with the spin-off of our PayPal business. We encourage you to read
the following Compensation Discussion and Analysis carefully and we hope you
agree that our programs create the proper incentives and rewards for creating
long-term value for our stockholders.
Edward W. Barnholt
(Committee Chairman)
David W. Dorman
William C. Ford, Jr.
Kathleen C. Mitic
Thomas J. Tierney
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COMPENSATION DISCUSSION AND
ANALYSIS
EXECUTIVE SUMMARY
The goals of
our executive compensation program are to:
● |
align compensation with our business objectives and
performance, |
● |
motivate named executive officers (NEOs) to enhance long-term
stockholder value, |
● |
position us competitively among the companies against which we
recruit and compete for talent, and |
● |
enable us to attract, retain, and reward NEOs and other key
employees who contribute to our long-term success.
|
We achieve these objectives by
employing the following elements of pay for our NEOs:
● |
long-term equity
compensation, |
● |
an annual cash incentive,
and |
● |
base
salary. |
Our NEOs also participate in our
broad-based retirement and benefit programs, and receive limited perquisites.
The following shows the breakdown of
reported 2014 compensation for our NEOs that were employed for all of 2014.*
This chart illustrates the predominance of equity incentives and
performance-based components in our regular executive compensation
program.
|
Time-Based Restricted Stock Units (RSUs) |
|
Salary |
|
Other Compensation |
|
Annual Cash Incentive (ACI) |
|
Stock Options |
|
Performance-Based Restricted
Stock Units (PBRSUs) |
|
Performance-Based (PBRSUs,
options, and 75% of Annual Cash
Incentive) |
*Mr. Carges and Mr. Marcus terminated
employment during 2014 and therefore have not been included for purposes of the
chart. In addition, Mr. Schulman, who was hired as President of PayPal and is
its CEO-designee following the spin-off of our PayPal business, was excluded for
purposes of this chart because he was hired on September 30, 2014 and was only
employed for approximately one-quarter of the year. See pages 57-58 and 60 and the Compensation Tables below for
additional details regarding Mr. Schulmans reported 2014
compensation.
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Our 2014 Company
Performance |
2013-2014 Performance Based Restricted Stock Unit (PBRSU)
Program
● |
Awards were earned at 43% of
target based on Company performance: |
Foreign-exchange neutral (FX-neutral) revenue ($
billions) |
Non-GAAP operating margin dollars ($ billions) |
Return on Invested Capital (%) Modifier |
|
|
|
2012 Performance Share
Unit (PSU) Awards to CEO and CFO: 2014 Vesting Opportunity
● |
PSUs did not vest in 2014 and
were forfeited based on Company performance for 2014 and cumulative
performance from 2012-2014. |
2014 PSU Vesting
Opportunity
(shares)
2014 Annual Cash
Incentive Award
● |
Company performance component
paid at 94% of target based on the following
performance: |
FX-neutral revenue ($
billions) |
|
Non-GAAP net income ($
billions) |
|
|
|
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COMPENSATION DISCUSSION AND
ANALYSIS
Our pay
practices align with and support the goals of our executive pay program and
demonstrate our commitment to sound compensation and governance
practices.
We align
executive compensation with the interests of our
stockholders |
|
✓ |
Emphasize pay for performance alignment |
✓ |
Deliver a majority of total compensation opportunity in our regular
compensation program through performance-based compensation: PBRSUs, stock
options, and annual cash incentives |
✓ |
Set meaningful stock
ownership requirements for executive officers |
We avoid
excessive risk-taking |
|
✓ |
Maintain a clawback policy |
✓ |
Use multiple
performance measures, caps on incentive payments, and overlapping two-year
performance periods for PBRSU awards |
We adhere to
compensation best practices |
|
✓ |
The Compensation Committee retains an independent compensation
consultant |
✓ |
Prohibit hedging and pledging transactions by executive
officers and directors |
✓ |
Provide only limited perquisites to executive officers that are not
available to all employees |
✕ |
No tax gross-ups for change in control benefits and
perquisites |
✕ |
No single trigger acceleration of PBRSUs, RSUs or stock options
upon a change in control |
✕ |
No repricing or buyout of underwater stock options without
stockholder approval |
✕ |
No dividends or dividend equivalents accrued or paid on PBRSUs or
RSUs |
Supporting our Executive
Compensation Program |
Our Compensation Committee believes that the goals of our
executive compensation program are appropriate and that the program is properly
structured to achieve those goals. We have engaged in ongoing discussions with
our investors, who generally support those goals and the program, and we believe
our stockholders as a whole should support them as
well.
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This
Compensation Discussion and Analysis is presented as follows:
|
Elements of Our Executive Compensation Program
provides a description of our executive compensation practices, programs
and processes. |
|
Compensation Decisions for 2014 explains executive
compensation decisions made in 2014. |
|
2014 Business
Results highlights results that affected compensation. |
|
Separation Arrangements, Severance and Change-in-Control Arrangements with
Executive Officers, and Clawbacks covers the Committees
considerations and actions associated with (a) the appointment of Mr.
Schulman and Mr. Wenig as CEO-designees of PayPal and eBay, respectively,
(b) the compensation arrangements for certain executive officers
transitioning responsibilities in connection with the spin-off of our
PayPal business (Spin-Off), and (c) NEOs that separated during
2014. |
|
Further Considerations for Setting
Executive Compensation covers the role of eBays compensation
consultant, peer group considerations and the impact of accounting and tax
requirements on compensation. |
This Compensation Discussion and
Analysis focuses on the compensation of our NEOs for 2014, who
were:
● |
John J.
Donahoe, President and Chief Executive Officer
(CEO) |
● |
Daniel H.
Schulman, President, PayPal (appointed PayPal CEO-designee
following Spin-Off) |
● |
Devin N.
Wenig, President, eBay Marketplaces (appointed eBay CEO-designee
following Spin-Off) |
● |
Robert H.
Swan, Senior Vice President, Finance and Chief Financial Officer
(CFO) |
● |
Michael R.
Jacobson, Senior Vice President, Legal Affairs, General Counsel and
Secretary |
● |
David A.
Marcus, Former President, PayPal* |
● |
Mark T.
Carges, Former Chief Technology Officer
(CTO)** |
*David Marcus resigned as President
of PayPal, effective June 27, 2014.
**Mark Carges resigned as Chief
Technology Officer of eBay Inc., effective November 3, 2014.
Investor Feedback and 2014 Say on
Pay Vote |
The Company has established a practice of regularly engaging
with investors to solicit their feedback on our executive compensation
program and other governance matters. This
engagement helps us better understand our stockholders views on executive
compensation, including the overall design of our program and how information is presented in our Compensation Discussion
and Analysis. At the 2014 annual meeting of stockholders, following extensive
discussions with our stockholders in 2013 to understand their assessment of our executive compensation programs, stockholders
approved our executive compensation program by approximately 93% of the
stockholder votes. The Compensation Committee considered this 93% level of
approval of the Companys 2014 say
on pay vote in determining that the Companys executive compensation
philosophy, objectives, and elements continue to be appropriate. Consequently, the Committee did not
materially change to the Companys
executive compensation program in response to the 2014 say on pay
vote.
|
ELEMENTS OF OUR EXECUTIVE COMPENSATION
PROGRAM |
Our executive compensation program is
designed to:
● |
align compensation with our business objectives and
performance, |
● |
motivate executive officers to enhance long-term
stockholder value, |
● |
position us competitively among the companies against
which we recruit and compete for talent, and |
● |
enable us to attract, retain, and reward executive
officers and other key employees who contribute to our long-term
success. |
To achieve these objectives, we have
three principal components of our executive compensation: long-term equity
compensation, an annual cash incentive, and base salary. The Committee seeks to
ensure that total compensation for our NEOs is heavily weighted to variable, performance-based compensation by delivering a
majority of compensation in the form of PBRSUs, stock options, and annual cash
incentives.
The Committee chose a mix of equity and
cash compensation vehiclessome dependent purely on financial targets that the
Committee believes correlate with operating performance and long-term stock
performance and others directly related to stock price and the returns received
by investors in the Companyto compensate management based on both long-term
value drivers and returns received by our stockholders. Our executive officers
also were eligible to participate in our broad-based retirement and benefit
programs and received limited perquisites.
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The Compensation Dashboard below
provides a snapshot of the key
elements of our 2014 executive compensation
program and describes why each element is provided. Additional information about
these key elements is included in the sections following the dashboard.
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In making decisions regarding the
amount and form of each element
of compensation for each of our executive
officers, the Committee takes into account the size and complexity of the
executive officers job and business unit or function, including the
following:
|
For our CEO |
|
For executive officers other than
the CEO |
|
|
●The Companys overall financial performance
●Performance versus other goals, such as defining corporate and
business unit strategy and executing against it
●Supporting the business units in the achievement of their goals
●Leadership
●Improving and supporting innovation and execution at the
Company
●Hiring, developing, and retaining the senior leadership
team
●Planning for succession
●Investing in technology and key talent
●Driving gender diversity as a priority for the
Company |
|
●Performance against financial performance measures for the
executives business unit or function
●Defining business unit or function strategy and executing
against it
●Organizational development, including hiring, development, and
retention of the senior leadership team of each
organization
●Leadership
●Improving and supporting innovation and execution for the
business unit or function
●Negotiating, closing, and integrating acquisitions,
dispositions, and/or strategic partnerships
●Achievement of strategic and operational objectives, including
control of costs and charges |
|
The Committee gives no specific
weighting to these goals and it evaluates individual performance in a holistic
manner.
We use three primary forms of equity compensation:
● |
PBRSUs, |
● |
Time-based RSUs, and |
● |
Stock
Options. |
Annual Equity Awards:
Value
The value of annual equity awards is determined within
guidelines that the Committee annually establishes for each position. These
guidelines are based on our desired pay positioning relative to companies with
which we compete for talent. The midpoint of the guidelines, or the median
target award, reflects the 50th percentile of the competitive market. Individual
awards are based on individual performance, potential, and the total value of
unvested equity previously granted to each individual executive officer. The
individual awards can be higher or lower than the median target award by an
amount ranging from zero to three times the median target award. The Committee
limits the use of supplemental equity awards to only extraordinary
circumstances.
In 2014, the Committee set equity award guidelines by position
based on the following:
● |
equity compensation practices of
technology companies in our peer group, as disclosed in their public
filings (See page 68 for our 2014 peer group), and |
● |
equity compensation practices for
comparable technology companies that are included in proprietary
third-party surveys |
The Committee also carefully considers share usage each year
and sets an upper limit on the number of shares that can be used for equity
compensation.
The Committee may make special equity-related compensation
decisions for performance, retention, acquisitions, and/or recruitment purposes
(including payments for equity or other compensation awards from a former
employer that an executive officer may be required to forfeit or forego by
accepting employment with the Company) that cause individual equity compensation
in a particular year to differ from the Committees regular stated compensation
strategy and guidelines. As discussed in more detail in the introductory letter and sections 2-4 below,
2014 was an extraordinary year for the Company because we announced the Spin-Off
of our payments business. As a result, the Committee determined that it was
necessary to make compensation decisions to help us attract and retain key
executive officers deemed instrumental to the thoughtful and orderly execution
of the Spin-Off and the positioning of both eBay Marketplaces and PayPal for
success as independent, publicly-traded companies. In this section we have
described the general equity program design. For decisions that were made
specifically in relation to the Spin-Off, please see sections 2-4 below.
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PBRSU
Program
Design and Performance Periods. Executive officers are eligible to receive awards of PBRSUs, which will
result in grants of RSUs with additional time-based vesting requirements, if the
Company exceeds specified financial performance criteria set by the Committee.
The amount and value of the award depend on the Companys performance relative
to the performance goals approved by the Committee at the beginning of the
performance period. The 2013-2014 and 2014-2015 PBRSU cycles each have two-year
performance periods.
Under
the PBRSU program, assuming above-minimum
threshold performance, time-based RSUs will
be granted to the executive officers. Beginning with the 2014-2015 performance period, and
subject to the provisions relating to the Spin-Off described in sections 3-4 below, 100% of any PBRSU awards granted to our
CEO and CFO will vest, if at all, one year after the grant is made following the
end of the two-year performance period. This modification subjects 100% of the
CEO and CFO PBRSU awards to a full three years of stock price volatility before
the shares vest. This provision applies to the CEO-designees of PayPal and eBay
with respect to their 2015-2016 PBRSU awards. For all executive officers other
than the CEO and CFO, one-half of the RSUs will vest in March following the end
of the performance period and the other half of the award will vest in March of
the following year, more than one full year following the completion of the
performance period. The Committee believes that the post-performance period
vesting feature of the PBRSUs provides an important mechanism that helps to
retain executive officers and align their interests with long-term stockholder
value.
Setting a Target Value of PBRSU Shares. As discussed above, the Committee establishes a target level
of total annual equity compensation for each executive officer, a portion of
which will be awarded in PBRSUs. If the Companys performance meets the target performance goals, the target level of PBRSUs will be issued.
If the Companys performance exceeds or falls short of the target performance goals, the
number of PBRSUs granted will be increased or decreased formulaically.
Performance Measures and Rationales. The following table outlines the performance periods and
performance measures and the Committees rationale for their
selection:
Performance
Periods |
|
2013-2014 and 2014-2015 |
Performance Measures |
|
FX-neutral revenue
(1)
Non-GAAP operating
margin dollars (2)
Return on invested capital
(modifier) |
Compensation Committee
Rationale |
|
The Committee
believes these measures are key drivers of our long-term success and
stockholder value, and directly affected by the decisions of the Companys
management.
Both FX-neutral
revenue and non-GAAP operating margin dollars measures are used to help
ensure that leaders are accountable for driving profitable growth, and
making appropriate tradeoffs between investments that increase operating
expense and future growth in revenue.
The return on invested capital modifier is used
to hold leaders accountable for the efficient use of
capital. |
(1) Calculated on a fixed foreign exchange basis (referred to
as FX-neutral).
(2) Non-GAAP operating
margin dollars excludes certain items, primarily stock-based compensation
expense and related employer payroll taxes, amortization of acquired intangible
assets, impairment of goodwill, separation expenses, and certain one-time gains,
losses and/or expenses.
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PBRSU Mechanics and Targets.The two
year targets are generally set in a manner consistent with the one-year income
target for the annual cash incentive plan and the three year targets provided to
the investment community at the Companys analyst events. To receive a PBRSU
grant, at least one of the FX-neutral revenue or non-GAAP operating margin
dollars minimum performance thresholds must be met. Each of the minimum
performance threshold for FX-neutral revenue and non-GAAP operating margin
dollars is independent and, if either minimum threshold is met, the award is
funded with respect to that performance measure in accordance with the percentages outlined in the table below. If the
minimum performance level for either FX-neutral revenue or non-GAAP operating
margin dollars is not met, then there is no funding attributable to that
performance measure. For example, if the minimum FX-neutral revenue threshold is
not met and performance of non-GAAP operating margin dollars is at target, the
funding level is 50% of the total payout that would have been earned had the
performance levels for both criteria been exactly at target, subject to the
return on invested capital modifier.
The
following chart shows the minimum, target, and maximum funding levels for
FX-neutral revenue and non-GAAP operating margin dollars:
|
Minimum |
|
Target |
|
Maximum |
FX-neutral revenue |
25% |
|
50% |
|
100% |
Non-GAAP operating margin
dollars |
25% |
|
50% |
|
100% |
The
number of shares awarded is determined by comparing our actual performance for
FX-neutral revenue and non-GAAP operating margin dollars over the performance
period against the minimum, target, and maximum performance levels and
converting the result into a funding percentage. The FX-neutral revenue and non-GAAP operating margin dollars measures are
then added together and this total is multiplied by the third measure, return on
invested capital, with the modification multiplier determined in accordance with
the table below:
|
Minimum |
|
Target |
|
Maximum |
Return on invested capital
(modifier) |
80% |
|
100% |
|
120% |
The
target award is multiplied by the percentage resulting from this calculation to
determine the actual number of PBRSUs awarded, subject to Committee-approved
variation due to material events not contemplated at the time the targets were
set (such as major acquisitions) and to the Committees negative discretion.
Accordingly, PBRSU awards range from 0% to 240% of an executive officers target
award, based on eBays FX-neutral revenue, non-GAAP operating margin dollars,
and return on invested capital for the two-year performance period.
Annual Cash Incentive
Awards |
Performance Period. The
cash incentive plan, known as the eBay Incentive Plan, or eIP, is a short-term
incentive plan. The Committee determines the length of the performance period
for the cash incentive plan, which has historically been annual (including for
2014).
Design. The Committee
believes that incentive payouts should be tightly linked to eBays performance,
with individual compensation differentiated based on individual performance.
When defining Company performance, the Committee focuses primarily on financial
performance metrics (FX-neutral revenue and non-GAAP net income).
To
support a tight link between Company performance and any incentive payouts, the
annual cash incentives payable for 2014 had both a minimum FX-neutral revenue
threshold and a minimum non-GAAP net income threshold. Unless both of
these thresholds are met, there is no incentive
payout. If both thresholds are met, the Company uses total non-GAAP net income
as the primary determinant of the payout for the annual cash incentive plan. The
amount at which the plan is funded is determined based on the Companys actual
performance as measured against the targets set by the Committee, with 75% of
the award for our NEOs based on the Companys non-GAAP net income financial
performance.
To
facilitate differentiation based on individual performance, 25% of the award for
our NEOs is based on individual performance. In circumstances where the
Companys financial performance is above its threshold goal but below target, a
modifier is applied to the individual performance component to reduce it
proportionately based on the Company financial performance component. For
example, if the Company exceeded the FX-neutral revenue threshold but total
non-GAAP net income
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COMPENSATION DISCUSSION AND ANALYSIS
was 90%
of target, then the individual performance component would be calculated as
follows: Target incentive amount x 25% x individual performance score x
90%.
In
2014, the annual cash incentive program also included a customer satisfaction
Net Promoter Score (NPS) and employee engagement employee Net Promoter Score
(eNPS) incentive for employees at director-level and above. Each of these was tied to the
achievement of a statistically significant improvement over a multi-year period,
and would result in an additional payout of 5% of the incentive target if the
respective performance measure is achieved. These secondary measures were
included to focus employees on improving NPS and eNPS. Because the Company
expects to separate into two companies before the
end of 2015, the Committee has eliminated the NPS and eNPS performance metrics
for 2015.
Performance Measures and Rationale. The Committee believes that the primary performance
measure of
non-GAAP net income is the key measure
of short- and intermediate-term results for
the Company. The Committee also believes that a revenue threshold should be
included to ensure that no cash incentive is paid if future income may be
impaired by insufficient revenue growth. The Committee also believes that the
secondary performance measures for director-level and above employees drive
accountability for improving NPS and eNPS and support the Companys
success.
The
following table provides more information on the primary and individual
performance measures set in 2014 for executive officers and additional rationale
for their selection:
Performance Measures
(1) |
|
Rationale |
Primary Company financial
performance measure |
|
|
Non-GAAP net income (2), subject to a Minimum
FX-neutral revenue threshold (3) |
|
The Committee believes non-GAAP
net income is the key measure of short- and intermediate-term results for
the Company given that it can be directly affected by the decisions of the
Companys management and provides the most widely followed measure of
financial performance. The Committee also believes that this primary
non-GAAP net income measure should be subject to a minimum revenue
threshold and should result in no cash incentive being paid when future income will be negatively impacted by
insufficient revenue growth. |
Individual measure |
|
|
Individual performance |
|
The Committee believes that a
portion of the compensation payable under this plan should be
differentiated based on individual performance for which a review is
conducted at the end of the year. |
(1) Both minimum FX-neutral revenue and minimum non-GAAP net
income thresholds must be met in order for there to be any incentive payout
based on Company performance or individual performance, with the funding level
for Company performance based on the amount of non-GAAP net income. The
incentive payouts for NPS and eNPS are independent from the payout tied to the
Companys financial performance (but will only be paid in a year when the
Companys minimum financial performance metrics are met).
(2)
Non-GAAP net income excludes certain items, primarily stock-based compensation
expense and related employer payroll taxes, amortization of acquired intangible
assets, impairment of goodwill, separation expenses, certain one-time gains,
losses and/or expenses, and income taxes related to these items. Non-GAAP net
income is calculated quarterly, is publicly disclosed as part of our quarterly
earnings releases, and is a basis of third-party analysts estimates of the
Companys results.
(3) Calculated on a
FX-neutral basis.
Annual Cash Incentive Plan Mechanics, Assessment, and
Target Positioning Strategy. Each year, the
Committee establishes (1) Company performance measures based on business
criteria and target levels of performance and (2) a formula for calculating a
participants award based on actual Company performance compared to the
pre-established performance measures. Performance measures may be based on a
wide variety of business metrics. The Committee has chosen to use non-GAAP net
income as its primary measure of performance for a number of years because it is
the key measure of short- and intermediate-term results for the Company given
that it can be directly affected by the decisions of the Companys management
and provides the most widely followed measure of
financial performance. Targets are set in the first quarter of the year based
primarily on the Companys Board-approved budget for the year.
After
the end of each year, the Companys actual performance is compared to the
performance measures to determine the funding level of that portion of the
annual cash incentive plan, subject to Committee approved variation due to
material events not contemplated at the time the targets were set (such as major
acquisitions) and to the Committees negative discretion. With respect to
individual performance, our CEO presents the Committee with his assessment of
the individual performance of
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the
executive officers who are his direct reports. The Committee reviews his
assessments and makes a subjective determination of the level of individual
performance for each of those executive officers. In addition, the Committee
(with input from the Lead Independent Director and other independent members of
the Board) makes a subjective determination of the individual performance of the
CEO. In making its determination of the individual performance of each executive
officer, the Committee does not give any specific weighting to
individual goals.
The
Committee assesses annual cash incentive award opportunities against data from
public filings of our peer group companies and general industry data for
comparable technology companies that are included in proprietary third-party
surveys, and aims to set target annual cash incentive opportunities for our NEOs
at approximately the 50th percentile based on that data.
Assessment and Target Positioning Strategy. At the beginning of each year, the Committee meets to review
market data and to review and approve each executive officers base salary for
the year. The Committee assesses competitive market data on base salaries from
public filings of our peer group companies and general industry data for
comparable technology companies that are included in proprietary third-party
surveys. When considering the competitive market
data, the Committee also considers the fact that the data is historical and does
not necessarily reflect those companies current pay practices. The Committee
assesses each executive officers base salary against the 50th percentile of the
salaries paid to comparable executives at peer group companies. The Committee
also considers individual performance, levels of responsibility, breadth of
knowledge, and prior experience in its evaluation of base salary
adjustments.
We
provide certain executive officers with perquisites and other personal benefits
not available to all employees that the Committee believes are reasonable and
consistent with our overall compensation program and philosophy. These benefits are
provided to enable the Company to attract and retain these executive officers.
The Committee periodically reviews the levels of these benefits provided to our
executive officers. Of these benefits, the most significant ongoing benefit is
allowing Mr. Donahoe and Mr. Swan limited personal use of the corporate
airplane. For 2014, Mr. Donahoes personal use of the corporate airplane was
limited to 50 hours and Mr. Swans personal use of the corporate airplane was
limited to 20 hours. The Company does not grant bonuses to cover, reimburse, or
otherwise gross-up any income tax owed for
personal travel on the corporate airplane. In addition, pursuant to the terms of
Mr. Schulmans offer letter, Mr. Schulman is eligible to receive certain
relocation benefits in connection with his relocation to the San Francisco Bay
Area. Mr. Schulmans relocation assistance included assistance with selected
costs and expenses related to moving from New York to the San Francisco Bay Area
(including temporary housing and transportation) and related tax reimbursements,
consistent with the Companys existing relocation policies. Mr. Schulmans
relocation assistance was negotiated as part of the terms of his offer to join the
Company. The Committee believes it was necessary to offer Mr. Schulman
relocation assistance in order to attract him to join the Company.
|
COMPENSATION DECISIONS FOR 2014 |
In
2014, PBRSUs, RSUs, and stock options were the only types of equity incentive
awards granted to our NEOs. Once the value of the annual equity incentive awards
had been set for each executive officer, a formula was used to allocate the
annual equity award as follows:
● |
50% PBRSUs, |
● |
30% time-based RSUs, and |
● |
20% stock
options |
The only
exception to the 2014 equity award allocation occurred with respect to Mr.
Schulmans (1) initial equity award, which was allocated 50% RSUs, 30% PBRSUs,
and 20% stock options in recognition of the fact that he joined the Company in
September after the 2014-2015 PBRSU cycle was approximately one-third completed,
and (2) make-good awards and payments.
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When
making compensation decisions, the Committee evaluated the NEOs based on their
leadership, competencies, innovation, and both past and expected future
contributions toward eBays financial, strategic and other priorities. In
addition, the Committee considered succession planning, individual holding
power, and retention concerns as well as the total value of each NEOs unvested
equity awards. Based on its assessment, the Committee determined individual
awards based on the factors and guidelines
described above. As discussed in more detail below, in connection with the
decision to spin-off the Companys payments business, the Committee appointed
Mr. Schulman as President of PayPal and its CEO-designee following the Spin-Off.
The Committee appointed Mr. Wenig as the CEO-designee of eBay following the
Spin-Off. The compensation decisions related to these appointments are discussed
in detail below.
Determining 2014 Target
Compensation for our CEO |
As in
prior years, the Committee took a multi-year view of Mr. Donahoes total
compensation, with the objectives of retaining and motivating him while
providing a strong pay for performance element. In doing so, the Committee
sought to focus Mr. Donahoes attention on the longer-term performance of the
Company. The Committee considered many factors in setting the various components
of the CEOs compensation at its meetings in early 2014, including eBays and
Mr. Donahoes overall performance, competitive compensation data from public
filings of peer companies, and retention objectives. The Committee also
solicited input from the independent members of the Board. The Committee then
exercised its judgment to determine 2014 compensation for the CEO.
The
Committee determined that the Company remained well positioned for 2014 and
future years, in large part due to Mr. Donahoes leadership, strategic
decision-making and sustained performance, which included:
Successfully managing a portfolio
of businesses to deliver solid annual financial results and positioning
the Company for continued growth in revenue and profits |
Articulating a clear strategy for
the Company, executing against it, and modifying it as the Companys
portfolio of businesses and the industries in which they compete
change |
Driving innovations and
successfully introducing innovative new products |
Establishing and maintaining
relationships with strategic customers and technology
partners |
Driving global
expansion |
Positioning the Company for
enduring success grounded in culture and shared purpose |
Developing and strengthening the
Companys leadership team |
Planning for succession |
Investing in technology and key
talent |
Driving gender diversity as a
priority for the Company |
The
Committee determined Mr. Donahoes and the Companys sustained performance
warranted total equity compensation that was consistent with his 2013 awards. As
a result, the Committee approved equity awards with a total grant date value of
$11 million for Mr. Donahoe as of the date of grant (April 1, 2014) and
allocated in accordance with the Companys standard practice: 50% PBRSUs, 30%
RSUs, and 20% stock options. The Committee also determined that no adjustments were
required for Mr. Donahoes target cash incentive award or base salary based on
his positioning relative to the market.
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2015 Annual Meeting of Stockholders |
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COMPENSATION DISCUSSION AND ANALYSIS
Compensation Decisions Related to
the Spin-Off of the PayPal Business |
As
noted above, in September 2014, the Board approved a plan to separate its eBay
Marketplaces and PayPal businesses into independent, publicly traded companies
in 2015, subject to customary conditions. Mr. Donahoe and certain members of his
senior leadership team are leading the efforts to execute the Spin-Off in a
manner designed to position eBay Marketplaces and PayPal for success while also
delivering business results. In addition, in connection with the Spin-Off
announcement, Mr. Donahoe, working closely with the Board and the Committee,
implemented an orderly succession plan whereby Mr. Wenig, eBays current
President of eBay Marketplaces, will become its next CEO, and Mr. Schulman, an
executive hired in September 2014, will become CEO of PayPal. Upon completion of
the Spin-Off, Mr. Donahoe and Mr. Swan as well as certain other members of Mr.
Donahoes senior leadership team will transition their responsibilities to the
new leaders of each business. Mr. Donahoe and Mr. Swan will serve on the boards
of one or both of the companies
to provide continuity. The Committee
appreciates the strategy review the leadership
team led, the successful execution of the separation of the businesses, and the
succession of responsibilities to a strong, seasoned, and accomplished
management team are critical to driving the greatest value for the Companys
stockholders.
In
connection with the decisions to name Mr. Schulman and Mr. Wenig as
CEO-designees of PayPal and eBay, respectively, the Committee determined that
Mr. Schulman and Mr. Wenigs compensation arrangements should be equivalent because
eBay and PayPal would each be large, public companies in the
Internet and technology space following the Spin-Off. As a result, there were
several significant compensation actions taken during 2014 with respect to Mr.
Schulman, Mr. Wenig, and the NEOs that will transition their responsibilities to
the new leaders of each business that are described below and in sections 3-4.
Hiring Dan Schulman as
President of PayPal and its CEO-Designee Following the Spin-Off
In
connection with hiring Mr. Schulman to become the future CEO of PayPal, the
Committee conducted a comprehensive review of pay structures for CEOs at
comparable public companies as well as internal pay at the Company. The
Committee concluded that it was important to provide a target total compensation
opportunity competitive with the compensation of leaders at other
major internet and technology
companies, with an annual compensation
structure consistent with the Companys current pay-for-performance philosophy and
weighted heavily in favor of performance-based compensation, excluding the
one-time make-good awards and payments. In considering the compensation package
for Mr. Schulman, the Committee was mindful of the competition for talented
executives in the technology and payments sectors, Mr. Schulmans existing
compensation arrangements with his then-current employer including equity and
incentive compensation that would be forfeited in connection with his departure,
as well as clawback provisions that would require him to repay gains made on
certain equity awards and annual incentive payments and the demands on and
responsibilities of the leader of a global organization with PayPals scope and
stature. Overall, the Committee concluded that the complexity of the PayPal
business, the demands on that business as a publicly traded company and the
competitive market data should result in a compensation arrangement
substantially similar to that of Mr. Donahoes compensation as CEO of the
Company. Accordingly, the Committee approved the following compensation arrangements for Mr. Schulman in connection with
his appointment as President of PayPal and its CEO-designee following the
Spin-Off:
New Hire
Compensation:
● |
Annual Salary: $900,000 ($1 million
effective immediately following the Spin-Off) |
● |
Target Cash Incentive Award: 175% of annual
salary (200% following the Spin-Off) |
● |
Initial Equity
Awards: Target Grant Value of $9 million |
|
○ |
Allocation: 30% PBRSUs, 50%
RSUs, and 20% stock options |
|
○ |
PBRSU/RSU weighting was adjusted from
the standard allocation in recognition of the fact that Mr. Schulman
joined the Company in September after the 2014-2015 PBRSU performance
cycle was approximately one-third completed; it is expected that future
awards will have the standard allocation of 50% PBRSUs, 30% RSUs, and 20%
options |
Make-Good Awards and
Payments:
In
connection with his prior employment, Mr. Schulman was subject to a clawback
agreement that would require Mr. Schulman to repay his former employer for
gains made on equity and incentive awards, as well as forfeited equity awards,
in the event he accepted employment with a company viewed to be a strategic competitor.
investor.ebayinc.com 57
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COMPENSATION DISCUSSION AND ANALYSIS
By
accepting employment with the Company, which was designated as a strategic
competitor, Mr. Schulman was required to make repayments and forfeit vested
equity with a total value in excess of $17 million. In recognition of the
clawback repayments and forfeited vested equity plus the fact that Mr. Schulman would be
forgoing performance-based compensation that he had substantially earned prior
to joining the Company, Mr. Schulman has been granted a number of make-good
awards, as follows:
● |
Payment Made for
Clawback |
|
○ |
Make-Good Equity and Annual
Incentive Award Clawback Payment: A total
payment of $13,620,415 |
|
- |
In recognition that the pre-tax income
Mr. Schulman received from equity and annual incentive compensation awards
that vested or were exercised during the 24 months prior to his
termination of employment was required to be repaid to Mr. Shulmans former
employer (a portion of which was paid directly by the Company) pursuant to
a clawback arrangement. This clawback was triggered because Mr. Schulman
accepted employment with PayPal, which his former employer viewed as a
strategic competitor |
● |
Payment Made for Terminated
Options |
|
○ |
Vested Option Make-Good
Payment:
$3,626,537 |
|
- |
In recognition that Mr. Schulmans
vested options with his former employer were terminated as of the date he
accepted employment with PayPal because his former employer viewed PayPal
as a strategic competitor |
|
- |
Paid within two payroll periods of start date |
● |
Equity Awards and Cash Payments for
Substantially Earned Awards |
|
○ |
Make-Good RSU Awards: Target Grant Value of
$8,214,932 |
|
- |
Designed to make Mr. Schulman whole on
equity awards granted by former employer that would have vested within
approximately 16 months from date of hire and that were forfeited when he accepted
employment with PayPal |
|
● |
RSUs:
$4,143,503 grant value, vesting 100% on December 24,
2014 |
|
● |
RSUs:
$4,071,429 grant value, vesting 100% on January 28,
2016 |
|
○ |
Make-Good Cash
Payments: |
|
- |
Make-Good Bonus Payment: $3,631,250 |
|
● |
In recognition that Mr. Schulman forfeited his 2014
bonus from his former employer when he accepted employment with
PayPal |
|
● |
Paid on
December 24, 2014, subject to full or partial repayment if bonus received
from his former employer |
|
- |
Make-Good Portfolio Grant
Payment:
$2,600,000 |
|
● |
In recognition
that Mr. Schulman forfeited cash-based incentive portfolio awards from
his former employer when he accepted employment with
PayPal |
|
● |
50% paid on Dec.
24, 2014, and 50% to be paid on Feb. 15,
2016 |
Commitment to Future
Equity Awards:
The
Company also agreed to the size of Mr. Schulmans annual equity award for 2015
as well as an equity award upon the completion of the Spin-Off as follows:
● |
2015 Focal (Annual) Awards: Target
Grant Value of $9 million |
|
○ |
Grant date April 1,
2015 |
|
○ |
Standard allocation: 50% PBRSUs, 30%
RSUs, and 20% options |
|
○ |
PBRSU vesting
will apply CEO vesting schedule (2015-2016 PBRSU award granted in early
2017; if performance targets are met and RSUs are granted, the RSUs will
vest 100% in
2018 on the first anniversary of the date of
grant) |
● |
Spin-Off Awards: Target Grant Value of
$2 million |
|
○ |
Grant date - subject to and effective
immediately prior to the Spin-Off |
|
○ |
Standard allocation: 50% PBRSUs, 30%
RSUs, and 20% options |
|
○ |
Vesting
subject to discretion of PayPals Compensation Committee, but full vesting
is expected to be over four years from the date of grant for RSUs and
stock options and the CEO vesting schedule described above for
PBRSUs |
Relocation:
In
addition, the Company assisted Mr. Schulman with certain expenses he incurred in
connection with his relocation to the San Francisco Bay Area. Mr. Schulmans
relocation assistance included assistance with selected costs and expenses
related to moving from New York to the San Francisco Bay Area (including
temporary housing and transportation) and related tax reimbursements, consistent
with the Companys existing relocation policies.
58 |
|
2015 Annual Meeting of Stockholders |
Table of Contents
COMPENSATION DISCUSSION AND ANALYSIS
Setting Devin Wenigs
2014 Compensation and Adjustment in Connection with Appointment as CEO-Designee
of eBay Following the Spin-Off
Mr. Wenig had served as President of
eBay Marketplaces for three years and, in connection with appointing Mr. Wenig
to become the future CEO of eBay, the Committee recognized that Mr. Donahoe had
a strong succession plan in place for the Marketplaces business. The Committee
determined that Mr. Wenig was well-qualified to lead the Company as its next CEO
and thought it was important to have comparable compensation for the future CEOs
of eBay and PayPal because PayPal and eBay will be large, comparably-sized
public companies in the Internet and technology space. Accordingly, the
Committee approved the following compensation arrangements for Mr. Wenig in
connection with his appointment as the CEO-designee of eBay following the
Spin-Off:
Immediate changes to
compensation:
● |
Annual Salary: $900,000
($1 million effective immediately following the Spin-Off, which shall
remain in effect for at least 24 months following the
Spin-Off) |
● |
Target Cash Incentive
Award: 175% of annual salary (200% following the
Spin-Off) |
● |
2014 Top-Up Equity Awards:
$4 million |
|
○ |
Standard allocation: 50%
PBRSUs, 30% RSUs, and 20% stock options |
|
○ |
PBRSUs based on 2014-2015 performance period with award granted in
March 2016; vests 50% on the grant date and 50% on the one-year
anniversary of the grant date |
Summary of changes to Mr.
Wenigs Compensation
|
|
As of April 1, 2014* |
|
In connection with
becoming CEO-designee of eBay (September 30, 2014) |
Base salary |
|
$800,000 |
|
$900,000 |
Target Cash Incentive Award (percentage of base
salary) |
|
100% |
|
175% |
Equity Award |
|
$5,000,000 |
|
$4,000,000 |
*The Committee did not adjust Mr.
Wenigs annual base salary or target cash incentive award on April 1, 2014, and
his annual (Focal) equity award of $5 million was consistent with his 2013
annual equity award.
Commitment to Future
Equity Awards:
The Company also agreed to the size of
Mr. Wenigs annual equity award for 2015 as well as an equity award upon the
completion of the Spin-Off as follows:
● |
2015 Annual Equity Awards:
Target Grant Value of $9 million |
|
○ |
Grant date April 1,
2015 |
|
○ |
Standard allocation: 50% PBRSUs, 30%
RSUs, and 20% options |
|
○ |
PBRSU vesting will apply CEO vesting
schedule (2015-2016 PBRSU award granted in early 2017; if performance
targets are met and RSUs are granted, the RSUs will vest 100% in 2018 on
the first anniversary of the date of grant) |
● |
Spin-Off Awards: Target
Grant Value $2 million |
|
○ |
Grant date - subject to and
effective immediately prior to the Spin-Off |
|
○ |
Standard allocation: 50% PBRSUs, 30%
RSUs, and 20% options |
|
○ |
Vesting subject to
discretion of eBays Compensation Committee, but full vesting is expected
to be over four years from the date of grant for RSUs and stock options
and the CEO vesting schedule for PBRSUs |
investor.ebayinc.com 59
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COMPENSATION DISCUSSION AND ANALYSIS
Breakdown of 2014 Compensation for
Messrs. Donahoe, Schulman, and Wenig |
The following charts show the
breakdown of reported 2014 compensation for Messrs. Donahoe, Schulman,* and
Wenig. These charts illustrate the predominance of equity incentives and
performance-based components in our regular executive compensation
plan.
|
Time-Based Restricted Stock
Units (RSUs) |
|
Salary |
|
Other Compensation |
|
Annual Cash Incentive (ACI) |
|
Stock Options |
|
Performance-Based Restricted
Stock Units (PBRSUs) |
|
Performance-Based (PBRSUs,
options, and 75% of Annual Cash
Incentive) |
*This chart excludes the make-good
awards and payments to Mr. Schulman, which were made in recognition that Mr.
Schulman was required to make repayments to his former employer and forfeit
vested equity with a total value in excess of $17 million, and he would be
foregoing performance-based compensation that he had substantially earned prior
to joining the Company.
60 |
|
2015 Annual Meeting of
Stockholders |
Table of Contents
COMPENSATION DISCUSSION AND ANALYSIS
Summary of Total Target Equity
Award, Target Annual Cash Incentive Award, and Salary for other
NEOs |
In addition to the compensation
decisions related to Messrs. Donahoe, Schulman, and Wenig described above, the
Committee reviewed the target annual equity awards, target annual cash incentive
awards, and salaries for the remaining NEOs based on available market data as
well as Company and individual performance. The Committee determined only minor
adjustments were required with respect to the target annual equity awards and
base salaries of these NEOs. For the target cash incentive awards, no changes were made, except
the Committee determined it would increase Mr. Swans target cash incentive
award from 100% of annual salary to 125% in recognition of the unique role Mr.
Swan serves within the Company
and competitive compensation data for
similarly impactful roles. The following chart shows the compensation
adjustments for the remaining NEOs, effective April 1, 2014 (i.e., the Focal
Date):
NAME |
|
Target Annual Equity Award |
|
Change from Target Annual Equity Award
for 2013 |
|
Target Percentage of Annual Salary for Annual Cash
Incentive Award |
|
Change from Target Percentage for 2013 |
|
Base Salary |
|
Change from 2013 Base Salary |
Robert H. Swan |
|
$6
million |
|
No
change |
|
125% |
|
25% increase |
|
$850,000 |
|
No
change |
Michael R. Jacobson |
|
$2.5 million |
|
No
change |
|
75% |
|
No
change |
|
$600,000 |
|
No
change |
David A. Marcus |
|
$5
million |
|
↑8.7% |
|
100% |
|
No
change |
|
$725,000 |
|
↑3.6% |
Mark T. Carges |
|
$3
million |
|
↓6.3% |
|
75% |
|
No
change |
|
$625,000 |
|
No
change |
|
2014 BUSINESS
RESULTS |
Our compensation programs are designed
to align compensation with our business objectives and performance. The
following is a summary of the business results that directly affected 2014
compensation, including performance-based equity
awards and annual cash incentives.
The Companys 2014 performance affected
two PBRSU award cycles, 2013-2014 and 2014-2015. The following graphs
show the
goals and results achieved for the 2013-2014 performance period:
Foreign-exchange
neutral (FX-neutral) revenue ($ billions) |
Non-GAAP operating
margin dollars ($ billions) |
Return on Invested
Capital (%) Modifier |
|
|
|
|
|
|
Based on eBays financial performance
during the 2013-2014 performance period, the PBRSU award was funded at 43% of
target. As part of its review of the Companys financial performance against the PBRSU targets, the Committee considers whether
any significant corporate events
not contemplated at the time the targets were
set should
lead to an
investor.ebayinc.com 61
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COMPENSATION DISCUSSION AND ANALYSIS
adjustment of FX-neutral revenue,
non-GAAP operating margin dollars or return on invested capital results. No
adjustments were made for the 2013-2014 performance period.
Based on the 2013-2014 PBRSU award
funding, the NEOs received the following awards*:
NAME |
|
PERCENTAGE OF TARGET |
|
SIZE OF AWARD FOR 2013-2014 PERFORMANCE
CYCLE |
|
VESTING SCHEDULE** |
John J. Donahoe |
|
43% |
|
42,453 |
|
50%
on March 1, 2015; 50% on March 1, 2016 |
Devin N. Wenig |
|
43% |
|
20,309 |
|
50%
on March 1, 2015; 50% on March 1, 2016 |
Robert H. Swan |
|
43% |
|
24,371 |
|
50%
on March 1, 2015; 50% on March 1, 2016 |
Michael R. Jacobson |
|
43% |
|
10,155 |
|
50%
on March 1, 2015; 50% on March 1, 2016 |
*Because Mr. Schulman did not join the
Company until late 2014, he did not receive a PBRSU award for the 2013-2014
performance cycle. In addition, because Mr. Marcus and Mr. Carges each separated
prior to the completion of the 2013-2014 performance cycle, they forfeited their awards.
**In connection with the Spin-Off, the
second tranche of unvested RSUs granted to Messrs. Donahoe, Swan, and Jacobson
in connection with their 2013-2014 PBRSU awards will accelerate as of the
completion of the Spin-Off. See pages 65-66 below.
The Companys 2014 performance will
also impact the 2014-2015 PBRSU awards. When those targets were set, they were
designed to be challenging but achievable over the two-year performance period.
Award funding for the 2014-2015 performance period will be determined based on
performance against approved targets for
FX-neutral revenue, non-GAAP operating margin dollars, and return on invested
capital following the completion of the applicable performance period. See page 64 for a discussion of adjustments made to
2014-2015 PBRSU awards in connection with the Spin-Off.
2012 CEO/CFO
Performance Share Unit (PSU) Awards
In 2012, Mr. Donahoe and Mr. Swan were
granted one-time PSU awards. The awards were performance-based and each tranche
would only vest if the performance of eBays common stock exceeded the median
total shareholder return (TSR) of the companies in its 2012 peer group for the
applicable performance period. Because the 2014 TSR of eBay common stock of 6.2%
and the 2012-2014 TSR of 83.9% did not exceed the median of the companies in
eBays 2012 peer group of 25.4% for 2014 or the cumulative performance period
from 2012-2014 of 100.4%, respectively, the second tranche (20%) of the PSUs
granted to our CEO and CFO in 2012 did not vest and was forfeited. This is
consistent with the core principle of our compensation philosophy to tie
executive compensation to performance and the creation of long-term stockholder
value.
2014 PSU Vesting
Opportunity
(shares)
Annual Cash
Incentive
2014 Annual Cash Incentive Goals and
Plan Performance. The following shows the
goals and 2014 performance under the financial and non-financial Company performance
components of the annual cash incentive plan:
FX-neutral revenue ($
billions) |
Non-GAAP net
income ($ billions) |
|
|
|
|
62 |
|
2015 Annual Meeting of
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COMPENSATION DISCUSSION AND ANALYSIS
As described above, the funding level
under the plan could range from 50% at the minimum non-GAAP net income level to up to
200% at the maximum non-GAAP net income level (assuming the minimum FX-neutral
revenue threshold was also met).
In 2014, the Company did not meet its
NPS or eNPS targets, accordingly, there was no NPS or eNPS-related payout.
Because the Company expects to separate into two companies before the end of
2015, the Committee has eliminated the NPS and eNPS performance metrics for
2015.
As part of its review of the Companys
performance against its targets, the Committee considers whether any significant
corporate events, not contemplated at the time the targets were set, should lead
to an adjustment of revenue or non-GAAP net income results. The Committee
concluded that the non-GAAP net income results should be adjusted to exclude the
impact of (i) an increased tax rate driven by the Company having elected to
subject more of its foreign earnings to U.S. taxation, and (ii) the interest
expense associated with the Companys $3.5 billion debt issuance in July 2014.
Both of these actions resulted in an increase in the Companys available U.S.
cash and enhanced its financial flexibility.
Based on eBays non-GAAP net income for
2014 (and the achievement of the FX-neutral revenue threshold), the portion of
the annual cash incentive plan based on Company performance was funded at 94% of
the target opportunity.
In early 2015, the Committee reviewed
the Company results and Mr. Donahoes performance for the purpose of determining
the individual performance component of his 2014 annual cash incentive award.
The Committee assessed Mr. Donahoes performance
relative to his 2014 goals, with input from the entire Board. The Committee does
not assign fixed weightings to specific individual goals or performance
criteria. Instead, the Committee takes a holistic view of performance during the
year and the Companys positioning for the future. In doing so, the Committee
balanced the Companys financial performance for 2014, which fell below
expectations, with Mr. Donahoes accomplishments. Mr. Donahoe performed very
well against many of his goals, including the strategy review that led to the
decision to separate the eBay and PayPal businesses, succession planning
(including at the Business Unit level), and commencing the separation-related
work in a thoughtful and orderly manner, as well as effectively leading the
Company through the data breach and other unexpected events. Taking all of these
factors into consideration, the Committee set the individual performance
component of Mr. Donahoes annual cash incentive award at 85% of target. That
was then modified down to 94% of that amount in accordance with the terms of the
plan, resulting in a payment of 79.9% of target for the individual performance
component.
Because minimum thresholds for both
Company-wide FX-neutral revenue and non-GAAP net income were met in 2014, the
individual performance component of the annual cash incentive plan was paid.
However, eBays non-GAAP net income for 2014 was below target, and therefore the
individual performance component was modified and funded at 94% in accordance
with the terms of the plan and its application to all eligible employees of the
Company.
Taking into account both Company and
individual performance, total annual cash incentive amounts under the annual
cash incentive for 2014 for our NEOs were paid as follows:
Name |
|
Annual Cash Incentive Target as Percentage of Base
Salary |
|
Percentage of Target* |
|
Size of annual cash incentive award for
2014 |
John J. Donahoe |
|
200 |
|
90.5 |
|
$1,809,500.07 |
Daniel H. Schulman** |
|
175 |
|
94 |
|
$335,959.58 |
Devin N. Wenig |
|
175 |
|
90.5 |
|
$1,303,187.91 |
Robert Swan |
|
125 |
|
94 |
|
$998,750.07 |
Michael R. Jacobson |
|
75 |
|
105.8 |
|
$475,874.94 |
David A. Marcus*** |
|
100 |
|
N/A |
|
N/A |
Mark T.
Carges*** |
|
75 |
|
94 |
|
$271,153.84 |
*The Company performance component
(75%) was paid at 94% of target. The individual performance component (25%) was
based on each NEOs individual performance score, which was calculated as a
percentage of target and modified down to 94% of that amount in accordance with
the terms of the plan.
**Prorated based on eligible
earnings during the performance period.
***Mr. Marcus did not receive a
payout under the 2014 cash incentive plan. In accordance with his separation
package, Mr. Carges received a prorated cash incentive award through November 3,
2014 based on eligible earnings
and actual Company performance and
paid out at target for the individual component.
investor.ebayinc.com 63
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COMPENSATION DISCUSSION AND ANALYSIS
Changes to PBRSU Program, PSUs,
and Annual Cash Incentive for 2015 |
Because Mr. Donahoe and certain members
of his senior leadership team, including Mr. Swan and Mr. Jacobson, will be
transitioning their responsibilities to new leadership teams at eBay and PayPal
as part of the decision to separate the eBay Marketplaces and PayPal businesses
and in connection with an orderly succession plan, the Committee determined that
it would make the following adjustments to its approach for these departing NEOs
performance-based awards:
Impact to existing
awards:
|
○ |
2014-2015
PBRSU cycle: Payout will be based on actual versus budgeted eBay Inc.
performance through the last completed quarter of 2015 prior to the
Spin-Off |
|
○ |
2015
PSUs: In the event the Spin-Off occurs in 2015, Mr. Donahoe and Mr.
Swans 2015 PSU vesting opportunity will be determined based on whether
total shareholder return exceeds the median of the companies in the
Companys 2012 peer group measured for 2015 through the date immediately
prior to the effective date of the Spin-Off or the cumulative performance
period from 2012 through the date immediately prior to the effective date
of the Spin-Off, and the 2016 vesting opportunity will be cancelled. Mr.
Donahoe and Mr. Swan will remain subject to the requirement to hold all
after-tax stock derived from vested PSUs (which will be adjusted to become
stock in both PayPal and eBay) until December 31, 2017. |
● |
Impact to 2015
awards: |
|
○ |
2015-2016
PBRSU cycle: Target awards will be reduced to reflect the
anticipated partial year worked and payout will be based on achievement of
success measures approved by the Committee in connection with the timely
and successful execution of the Spin-Off |
|
○ |
2015 Cash
Incentive Award: In the event the Spin-Off occurs in 2015,
performance will be measured as follows: |
|
|
- |
for Company performance: based on eBay Inc. results through the
last completed quarter of 2015 prior to the Spin-Off |
|
|
- |
for individual
performance: based on achievement of success measures in connection with
the timely and successful execution of the
Spin-Off |
For
Mr. Schulman and Mr. Wenig, the Committee determined that it would make the
following adjustments to its approach:
● |
Impact to existing
awards: |
|
○ |
2014-2015
PBRSU performance cycle: Payout will be based on aggregate eBay Inc.
performance for 2014 and business unit specific performance measures for
2015 |
● |
Impact to 2015
awards: |
|
○ |
2015-2016
PBRSU cycle: A two-year performance cycle will be maintained but
performance will be based on performance measures for each specific
business unit rather than aggregate eBay Inc. performance |
|
○ |
2015 Cash
Incentive Award: An annual performance period will apply and
performance will be based on business unit specific performance measures
rather than aggregate eBay Inc. performance |
Because Mr. Marcus and Mr. Carges separated from the
Company in 2014, they were not impacted by these changes.
|
SEPARATION
ARRANGEMENTS, SEVERANCE AND CHANGE-IN-CONTROL ARRANGEMENTS WITH EXECUTIVE OFFICERS, AND
CLAWBACKS |
In connection with the Spin-Off, Pay
Governance was retained for a special assignment to form recommendations as to
the compensation structures for Mr. Schulman as the CEO-designee of PayPal, and
Mr. Wenig, as the CEO-designee of the Company after Spin-Off, and the separation
arrangements for those NEOs who will transition their responsibilities in
connection with the Spin-Off (including Messrs. Donahoe, Swan, and Jacobson). When approving or establishing the
severance and change-in-control arrangements described below, the Committee
attempted to provide severance benefits with sufficient protections and
retention incentives for the executive officer and which were aligned with the
interests of the Company and its stockholders. The Committee believes that these
protections help the Company to attract and retain highly talented executive
officers.
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COMPENSATION DISCUSSION AND ANALYSIS
Severance and Change-in-Control
Arrangements for Mr. Schulman |
In connection with becoming President
of PayPal and its CEO-designee, Mr. Schulman received an offer letter that
included severance arrangements. Under these arrangements, Mr. Schulman is
entitled to receive the following if he is terminated without cause or resigns
for good reason (each as defined in the letter) and he signs and does not revoke
a waiver and release of claims against the Company:
(i) |
a cash payment equal to two times the
sum of (a) the greater of annual base salary or $1 million and (b) his
bonus amount (where the bonus amount equals the greater of two times
annual base salary or the target cash incentive award) (Cash Severance
Payment); |
(ii) |
a prorated cash incentive award based on
company performance for the fiscal year in which employment is terminated
(if performance targets are met) (Prorated Cash Incentive
Award); |
(iii) |
any make-good cash payments that have
not yet been paid; and |
(iv) |
a cash payment equal to the value
of: |
|
a. |
the unvested Initial Equity Awards and Make-Good RSU
Awards if his termination occurs outside a Change-in-Control period,
provided that, if the termination occurs following the Spin-Off and
outside the Change-in-Control Period, then the cash payment shall also
include the cash value of any other unvested equity awards that would
otherwise have vested within 12 months of his termination date;
or |
|
b. |
all unvested equity awards if his
termination occurs during a Change-in-Control Period. |
|
In the event the Spin-Off does
not occur within two years from Mr. Schulmans start date and he is
terminated without cause or resigns for good reason, he will also be
eligible to receive the cash value of any unvested equity awards not
covered by (iv)(a) above that would otherwise have vested within 24 months
of his termination date. |
The Change-in-Control Period begins
90 days before a Change in Control (as defined in the Companys 2008 Equity
Incentive Award Plan, as amended and restated) and ends 24 months after a Change
in Control.
In the event Mr. Schulmans employment
terminates due to his death or permanent disability, he or his
estate will
receive, within 30 days of his termination date, a cash payment equal to the
value of any equity awards that would have become vested within the following 24
months.
Severance and Change-in-Control
Arrangements for Mr. Wenig |
In connection with becoming
CEO-designee of eBay, Mr. Wenig received an offer letter that included severance
arrangements. Under these arrangements, Mr. Wenig is entitled to receive the
following if he is terminated without cause or resigns for good reason (as
defined in the letter) and he signs and does not revoke a waiver of claims against the Company:
(i) |
Cash Severance
Payment; |
(ii) |
Prorated Cash Incentive
Award; and |
(iii) |
a cash payment equal to the
value of: |
|
a. |
the unvested equity that would
have otherwise vested within 12 months of his termination date if
outside a Change-in-Control Period; or |
|
b. |
all unvested equity awards if his termination occurs during a Change-in-Control Period (as described above). |
In the event Mr. Wenigs employment
terminates due to his death or permanent disability, he or his
estate will
receive, within 30 days of his termination date, a cash payment equal to the
value of any equity awards that would have become vested within the following 24
months.
Separation Arrangements for
Certain Executive Officers Transitioning Responsibilities in Connection
with Spin-Off |
On December 15, 2014, the Committee
adopted the Transition Success and Retention Program (the Program) in which
executive officers who will transition their employment responsibilities to the new
leadership teams of eBay Marketplaces and PayPal as part of the succession plan
following the orderly execution of the Spin-Off will be entitled to certain
benefits in the event the executive officer remains employed through the date of
the Spin-Off and he or she is no longer employed
by either company following the Spin-Off. The Program is intended to focus the
executive officers on achieving an orderly succession and a successful Spin-Off,
and to encourage their continued employment with the Company through the
Spin-Off. Messrs. Donahoe, Swan, and Jacobson are each eligible to participate in
the Program. In the event of a Spin-Off, the Program would supersede any other
severance arrangements that may otherwise be available to any of the executives
under existing
investor.ebayinc.com 65
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COMPENSATION DISCUSSION AND ANALYSIS
employment letters, except that Mr.
Donahoe and Mr. Swan will continue to have one year to exercise vested stock
options granted in 2012 based on the terms and conditions of that award
(assuming the Spin-Off occurs in 2015).
Under the Program, Messrs. Donahoe,
Swan, and Jacobson will be eligible to receive the following:
● |
Mr. Donahoe and Mr. Swan a cash
payment equal to two times the sum of their annual base salary and the
annual cash incentive paid at the target amount, as well as the
acceleration of all RSU and stock option awards that were outstanding and
unvested as of the termination of employment date; |
● |
Mr. Jacobson a cash payment
equal to one and one-half times the sum of his annual base salary and the
annual cash incentive paid at the target amount, as well as the
acceleration of all RSU and stock option awards that are outstanding and
unvested as of the termination of employment date; and |
● |
In addition, for all stock option
awards granted to Messrs. Donahoe, Swan, and Jacobson in calendar years
2013, 2014, and 2015, the post-termination period to exercise any vested
options will be extended from 3 months to 36
months. |
In recognition of the fact that the
performance targets under outstanding PBRSU awards were based on the presumption
that the Company is a whole and has not been separated, the existing performance
targets will be tied to performance of the combined company as of the quarter
most recently completed prior to the Spin-Off. If performance targets are met
for the period through the final calculation date, RSUs will be issued and the
time-based vesting elements will accelerate.
Separation Arrangements for NEOs
Terminating Employment in 2014 |
Mr. Marcus and Mr. Carges each
terminated their employment during 2014. Mr. Marcus did not receive any
separation benefits in connection with his termination.
In recognition of Mr. Carges
leadership of the transformation of Marketplaces technology and his contribution
to reestablishing eBay as a technology leader, the Committee approved the
following separation package:
(i) |
a lump-sum separation payment of $468,750; |
(ii) |
a prorated annual cash incentive award of $271,153.84, based on
actual Company performance for 2014 and paid out at target for the
individual component; |
(iii) |
accelerated vesting with respect to 21,831 PBRSUs, representing the
unvested portion of his PBRSUs earned in the 2012-2013 performance period
based on actual 2012 and 2013 performance; |
(iv) |
the cost of COBRA premiums for a period of 4 months;
and |
(v) |
a supplemental payment of
$24,000, less applicable taxes and deductions, intended to help cover the
cost of COBRA premiums for fourteen additional
months. |
The Company has not entered into any
arrangements with any of its executive officers to provide single trigger
severance payments upon a change in control. As described above, the Company has
put change in control protections in place for Mr. Schulman and Mr. Wenig. In
addition, the following change in control provisions apply to the 2012 PSUs
granted to our CEO and CFO:
● |
In the event of a change in
control, any outstanding unvested 2012 PSUs will vest subject to the
participants continued employment, if either: |
|
(a) |
eBays annual TSR from
January 1st of the calendar year in which the change in control occurs
through the date of the change in control; or |
|
(b) |
eBays cumulative TSR
from January 1, 2012 through the date of the change in control exceeded
the median TSR for eBays 2012 peer group over the same respective
period. |
|
In addition, the restriction on
selling vested shares will no longer apply.
The Companys equity incentive
plans generally provide for the acceleration of vesting of awards granted
under the plans upon a change in control (as defined in the applicable
plan) only if the acquiring entity does not agree to assume or continue
the awards. These provisions generally apply to all holders of awards
under the equity incentive plans. See Potential
Payments upon Termination or Change in Control below for information
regarding the value of our payment obligations in the event of termination
or a Change in Control, assuming that their employment was terminated or a
change in control occurred on December 31,
2014. |
The Committee has determined that the
Spin-Off will not constitute a Change in Control for purposes of these
protections and therefore these benefits would not be available solely as a
result of the execution of the Spin-Off.
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COMPENSATION DISCUSSION AND ANALYSIS
The Committee has adopted a clawback
policy that covers each officer employed as a vice president or in a more senior
position, and applies to incentive compensation, which includes any cash
incentive award, equity award, or equity-based award paid or awarded to any covered
employee during the period in which he or she is designated as a covered
employee. For all covered employees, the occurrence of either of the following
events is covered: (a) an action or omission by the covered employee that
constitutes a material violation of the Companys code of business conduct; or
(b) an action or omission by the covered employee that results in material
financial or reputational harm to the Company. In addition, for covered
employees that are employed as a senior vice president or in a more senior
position or a vice president who is a member of the finance function, the
following event is also covered: a material restatement of all or a portion of
the Companys financial statements that is the result of a supervisory or other
failure by the covered employee.
Under the clawback policy, the
Committee has the authority and discretion to determine whether an event covered
by the policy has occurred and, depending on the facts and circumstances, may
(but need not) require the full or partial forfeiture and/or repayment of any incentive compensation covered by the policy
that was paid or awarded to a covered employee. The forfeiture and/or repayment
may include all or any portion of the following:
● |
Any incentive compensation that
is greater than the amount that would have been paid to the covered
employee had the covered event been known; |
● |
Any outstanding or unpaid
incentive compensation, whether vested or unvested, that was awarded to
the covered employee; and |
● |
Any incentive compensation that
was paid to or received by the covered employee (including gains realized
through the exercise of stock options) during the twelve (12) month period
preceding the date on which the Company had actual knowledge of the
covered event or the full impact of the covered event was known, or such
longer period of time as may be required by any applicable statute or
government regulation. |
|
FURTHER
CONSIDERATIONS FOR SETTING EXECUTIVE
COMPENSATION |
Role of Consultants in Compensation
Decisions |
Pay Governance LLC serves as the
Committees independent compensation consultant. It provides the Committee with
advice and resources to help the Committee assess the effectiveness of the
Companys executive compensation strategy and programs. Pay Governance reports
directly to the Committee, and the Committee has the sole power to terminate or
replace Pay Governance at any time.
As part of its engagement, the
Committee has directed Pay Governance to work with our Senior Vice President of
Human Resources and other members of management to obtain information necessary
for Pay Governance to form recommendations and evaluate managements
recommendations to the Committee. Pay Governance also meets with the Committee
during its regular meetings, in executive session (where no members of
management are present), and with the Committee chair and other members of the
Committee outside of the Committees regular meetings. As part of its engagement
in 2014, Pay Governance provided an environmental
scan of executive compensation, evaluated the Companys peer group composition,
evaluated compensation levels at the peer group companies, assessed and proposed
equity and cash compensation guidelines for various executive job levels,
assessed compensation for the Companys executive officers, advised on the
framework for the Companys long-term incentive awards, evaluated
performance-based retention strategies, evaluated clawback policies, and
assessed Board compensation. In connection with the Spin-Off, Pay Governance was
retained by the Committee for a special assignment to form recommendations as to
the compensation structures for Mr. Schulman as the CEO-designee of PayPal, and
Mr. Wenig as the CEO-designee of the Company after Spin-Off, as well as
the compensation arrangements for those NEOs who will transition their
responsibilities to the new leaders of each business in connection with the
Spin-Off (including Messrs. Donahoe, Swan, and Jacobson). In connection with
this special assignment, Pay Governance also formed recommendations and
evaluated managements recommendations regarding the compensation
investor.ebayinc.com 67
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COMPENSATION DISCUSSION AND ANALYSIS
arrangements for those individuals
retained as the NEOs of the two businesses following the Spin-Off, and the
handling of compensation transition for the Companys plans given an expected
Spin-Off date before the end of 2015. Pay Governances fees for consulting
advice to the Committee for the year ended December 31, 2014 were $548,778.77.
Pay Governance does not provide any other services to the Company.
In addition, Towers Watson & Co.
provides compensation advisory services to management to help it develop and
execute the Companys overall compensation programs, including evaluating
competitive compensation levels and programs for positions below executive
officer, equity compensation, international compensation, and other issues as
requested by eBay Human Resources.
Compensation Consultant Conflict
of Interest Assessment |
The Committee recognizes that it is
essential to receive objective advice from its compensation advisors. To that
end, the Committee closely examines the procedures and safeguards that its
compensation advisor takes to ensure that its services are objective. The Committee
has assessed the independence of Pay Governance pursuant to SEC rules and
concluded that Pay Governances work for the Committee does not raise any
conflict of interest.
The Committee also reviewed Towers
Watsons work for management pursuant to the SEC rules and concluded that Towers
Watsons work for management does not raise any conflicts of
interest.
Peer Group
Considerations |
To set total compensation guidelines,
the Committee reviews market data of companies that are comparable to eBay and
that it believes compete with eBay for executive talent, business, and capital.
The Committee reviews both specific data from public filings from peer group
companies and general industry data for comparable technology companies that are
included in proprietary third-party surveys. The Committee believes that it is
necessary to consider this market data in making compensation decisions to
attract and retain talent. The Committee also recognizes that at the executive
level, we compete for talent against larger global companies, as well as
smaller, non-public companies.
In deciding whether a company should be
included in the peer group, the Committee generally considers the following
screening criteria:
● |
revenue; |
● |
market value; |
● |
historical growth rates;
|
● |
primary line of business;
|
● |
whether the company has a
recognizable and well-regarded brand; and |
● |
whether we compete with the
company for talent. |
For each member of the peer group, one
or more of the factors listed above was relevant to the reason for inclusion in
the group, and, similarly, one or more of these factors may not have been
relevant to the reason for inclusion in the group.
For 2014, the peer group consisted of
the following companies:
Adobe Systems Incorporated |
Intel
Corporation |
Amazon.com, Inc. |
Intuit Inc. |
American Express
Company |
MasterCard
Incorporated |
Capital One Financial
Corp. |
Microsoft
Corporation |
Charles Schwab & Co.,
Inc. |
Symantec
Corporation |
Cisco Systems,
Inc. |
Visa Inc. |
Facebook, Inc. |
Yahoo! Inc. |
Google Inc. |
|
To assess whether the peer group
continues to reflect the markets in which we compete for executive talent, the
Committee reviews the peer group each year with the assistance of its
compensation consultant. For 2014, the Committee removed Dell Inc. from the list
of companies used in 2013 because it had become a private company and its compensation data was no longer publicly
available. For 2015, the Committee did not make any changes to the peer group
(as a foreign registrant, compensation data for Alibaba Group Holding Limited is
not available).
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Table of
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COMPENSATION DISCUSSION AND ANALYSIS
Impact of Accounting and Tax Requirements on
Compensation |
We are limited by Section 162(m) of the
Code to a deduction for federal income tax purposes of up to $1 million of
compensation paid to our CEO and any of our other three most highly compensated
executive officers, other than our CFO, in a taxable year. Compensation above $1
million may be deducted if, by meeting certain technical requirements, it can be
classified as performance-based compensation. The eIP was last approved by our
stockholders in 2010 and has been submitted for approval by our stockholders at
the 2015 annual meeting in connection with this proxy statement. Under the eIP,
the portion of the awards attributable to Company performance is intended to
qualify as performance-based compensation under Section 162(m). Certain grants under the 2008 Equity Incentive Award
Plan, which was initially approved by our stockholders in 2008 and subsequently
amended and restated and most recently approved by our stockholders in 2014, are
also intended to qualify as performance-based compensation. Although the
Committee uses the requirements of Section 162(m) as a guideline, deductibility
is not the sole factor it considers in assessing the appropriate levels and
types of executive compensation. The Committee expressly retains the full
discretion to forgo deductibility when the Committee believes it to be in the
interests of the Company and our stockholders.
Table of
Contents
COMPENSATION
COMMITTEE REPORT
The Compensation Committee reviews and
approves Company compensation programs on behalf of the Board. In fulfilling its
oversight responsibilities, the committee reviewed and discussed with management
the Compensation Discussion and Analysis set forth in this proxy statement.
Based upon the review and discussions referred to above, the Compensation
Committee recommended to the Board that the Compensation Discussion and Analysis
be included in this proxy statement and eBays Annual Report on Form 10-K for
the fiscal year ended December 31, 2014.
COMPENSATION
COMMITTEE
Edward W. Barnholt (Chairman)
David
W. Dorman
William C. Ford, Jr.
Kathleen C.
Mitic
Thomas J. Tierney
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COMPENSATION
TABLES
2014 SUMMARY
COMPENSATION TABLE
The following table, footnotes, and
narrative summarize the total compensation earned by each of our named executive
officers, or NEOs, for the fiscal year ended December 31, 2014 and, to the
extent required under the SEC executive compensation disclosure rules, the
fiscal years ended December 31, 2013 and 2012.
Name
and Principal Position (a) |
Year (b) |
Salary ($) (c) |
Bonus ($) (d) |
Stock Awards ($) (e) |
Option Awards ($) (f) |
Non- Equity Incentive Plan Compen- sation ($) (g) |
Change
in Pension Value
and Nonqualified Deferred Compensa- tion Earnings ($) (h) |
All
Other Compen- sation ($) (i) |
Total ($) |
John J. Donahoe President and Chief Executive Officer |
2014 |
1,000,000 |
0 |
8,953,016 |
2,198,343 |
1,809,500 |
0 |
89,198 |
14,050,057 |
2013 |
993,269 |
0 |
8,855,064 |
2,199,263 |
1,620,270 |
0 |
165,508 |
13,833,374 |
2012 |
970,353 |
0 |
23,729,962 |
2,000,000 |
2,844,346 |
0 |
160,420 |
29,705,081 |
Robert H. Swan Senior Vice President, Finance and Chief Financial Officer |
2014 |
850,000 |
0 |
4,817,366 |
927,596 |
998,750 |
0 |
76,003 |
7,669,715 |
2013 |
843,269 |
0 |
5,083,468 |
1,188,152 |
687,792 |
0 |
92,629 |
7,895,310 |
2012 |
820,353 |
0 |
8,866,394 |
635,040 |
1,374,091 |
0 |
130,464 |
11,826,340 |
Daniel H. Schulman (1) President and
CEO-designee, PayPal |
2014 |
204,231 |
0 |
14,508,104 |
1,330,803 |
335,960 |
0 |
22,308,808 |
38,687,906 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Devin N. Wenig President, eBay Marketplaces and CEO-designee,
eBay |
2014 |
823,077 |
0 |
6,993,672 |
1,364,467 |
1,303,188 |
0 |
11,261 |
10,495,665 |
2013 |
793,269 |
0 |
4,236,205 |
990,130 |
647,010 |
0 |
11,094 |
6,677,708 |
2012 |
770,352 |
0 |
2,914,394 |
1,955,561 |
1,290,340 |
0 |
13,852 |
6,944,500 |
Michael R. Jacobson Senior Vice President, Legal Affairs, General
Counsel and Secretary |
2014 |
600,000 |
0 |
2,007,276 |
386,502 |
475,875 |
0 |
11,203 |
3,480,856 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David A. Marcus (2) Former President, PayPal |
2014 |
369,615 |
0 |
4,014,492 |
772,989 |
0 |
0 |
467 |
5,157,563 |
2013 |
678,462 |
0 |
3,897,333 |
910,921 |
553,370 |
0 |
857 |
6,040,943 |
2012 |
560,513 |
0 |
6,208,147 |
635,099 |
868,795 |
0 |
3,475 |
8,276,028 |
Mark
T. Carges (3) Former Chief Technology
Officer |
2014 |
384,615 |
0 |
2,864,850 |
463,806 |
271,154 |
0 |
506,680 |
4,491,105 |
2013 |
619,615 |
0 |
2,711,198 |
633,707 |
379,030 |
0 |
11,202 |
4,354,752 |
2012 |
601,282 |
0 |
1,942,929 |
423,360 |
698,990 |
0 |
13,927 |
3,680,488 |
(1) Mr. Schulman joined the Company on September 30, 2014.
(2) Mr. Marcus served the Company as President of PayPal from April 2,
2012 through June 27, 2014. Mr. Marcus joined the Company in August 2011 in
connection with the Companys acquisition of Zong SA. Mr. Marcus received no
separation pay or benefits in connection with his departure from the
Company.
(3) Mr. Carges served the Company as Chief Technology Officer from
September 2, 2008 through November 3, 2014. Mr. Carges received certain separation
pay and benefits in connection with his departure from the Company as described
in the narrative descriptions below for the Stock Awards column, the Non-Equity
Incentive Plan Compensation column, and the All Other Compensation
column.
Table of
Contents
COMPENSATION TABLES
Stock Awards (Column
(e)) |
The amounts reported in the Stock
Awards column represent the aggregate grant date fair value of time-based
restricted stock units, or RSUs, and performance-based restricted stock units,
or PBRSUs, granted to each of our NEOs in 2014, 2013, and 2012, respectively,
calculated in accordance with the Financial Accounting Standards Boards
Accounting Standards Codification Topic 718, Compensation Stock Compensation.
The grant date fair value of RSUs is determined using the fair value of our
common stock on the date of grant, and the estimated fair value of PBRSUs is
calculated based on the probable outcome of the performance measures for the
applicable performance period as of the date on which the PBRSUs are granted for
accounting purposes. This estimated fair value for PBRSUs is different from (and
lower than) the maximum value of PBRSUs set forth below. For Mr. Donahoe and Mr.
Swan, the amounts reported for 2012 also reflect the aggregate grant date fair
value of the one-time performance share units, or PSUs, granted to them in 2012.
The equity incentive awards included in this column were all awarded under the
Companys 2008 Equity Incentive Award Plan, as amended and restated.
RSUs: For 2014, RSUs were granted to our NEOs in connection with the
Companys annual (focal) grant in April. Mr. Schulman was granted new hire RSUs in
connection with his joining the Company as President and CEO-designee of PayPal
in September. He was also granted a total of 154,544 Make-Good RSU Awards with
an aggregate grant value of $8,214,932, which were intended to make him whole
for those equity awards granted by his former employer that would have otherwise
vested within approximately 16 months from his date of hire and
that he forfeited by joining PayPal. In connection with his appointment as
CEO-designee of eBay in September, Mr. Wenig was granted additional RSUs, with
an aggregate grant value of $1,200,000.
PBRSUs: PBRSUs provide an opportunity for our NEOs to receive grants of
time-based RSUs if the performance measures for a particular time period
typically 24 months are met. For a description of the performance measures for
the 2014-2015 PBRSU awards, see Compensation Discussion and Analysis Elements
of Our Executive Compensation Program Equity Incentive Awards PBRSU Program above.
For 2014, PBRSUs were granted for
accounting purposes to our NEOs in connection with the Companys annual (focal)
grant in April. Mr. Schulman was granted PBRSUs for accounting purposes in
connection with his joining the Company as President and CEO-designee of PayPal
in September, and Mr. Wenig was granted additional PBRSUs for accounting
purposes in connection with his appointment as CEO-designee of eBay in
September.
Assuming the highest level of
performance is achieved under the applicable performance measures for the
2014-2015 PBRSU awards, the maximum possible value of the PBRSU awards allocated
to our NEOs for the 2014-2015 performance period using the fair value of our
common stock on the date that such awards were granted for accounting purposes
is presented below:
Name |
Maximum Value of 2014-2015 PBRSUs (as of Grant Date for
Accounting Purposes) |
Mr. Donahoe |
$12,715,252 |
Mr. Swan |
$6,935,566 |
Mr. Schulman |
$6,124,557 |
Mr. Wenig |
$10,316,564 |
Mr. Jacobson |
$2,889,927 |
Mr. Marcus |
$5,779,741 |
Mr. Carges |
$3,467,867 |
The 2014 amount reported for Mr. Carges
includes 21,831 PBRSUs, representing the unvested portion of his PBRSUs earned
in the 2012-2013 performance period based on actual 2012 and 2013 performance,
that were otherwise scheduled to vest on March 1, 2015 but were accelerated in
November 2014 pursuant to Mr. Carges separation agreement with the
Company.
72 |
|
2015 Annual Meeting of Stockholders |
Table of
Contents
COMPENSATION TABLES
The value that our NEOs received in
2014 from the vesting of their stock awards is reflected in the 2014 Option
Exercises and Stock Vested table below. Additional information on all
outstanding stock awards as of December 31, 2014 is reflected in the 2014
Outstanding Equity Awards at Fiscal Year-End table below.
Option Awards (Column
(f)) |
The amounts reported in the Option
Awards column represent the grant date fair value of stock option awards granted
to each of our NEOs in 2014, 2013, and 2012, respectively, calculated in
accordance with the Financial Accounting Standards Boards Accounting Standards
Codification Topic 718, Compensation Stock Compensation. The assumptions used
by the Company in calculating these amounts are incorporated herein by reference
to Note 15 to the Companys consolidated financial statements in its Form 10-K
for the fiscal year ended December 31, 2014.
For 2014, option awards were granted to
our NEOs as part of the Companys annual (focal) grant in April. Mr. Schulman
was granted options in connection with his
appointment as President and CEO-designee of PayPal in September, and Mr. Wenig
was granted additional options in connection with his appointment as
CEO-designee of eBay in September.
The value that our NEOs received in
2014 from the exercise of their stock options is reflected in the 2014 Option
Exercises and Stock Vested table below. Additional information on all
outstanding option awards as of December 31, 2014 is reflected in the 2014
Outstanding Equity Awards at Fiscal Year-End table below.
Non-Equity Incentive Plan Compensation (Column
(g)) |
The amounts reported in the Non-Equity
Incentive Plan Compensation column represent amounts earned by each of our NEOs
under the annual cash incentive plan for services they rendered in 2014, 2013,
and 2012, respectively. The 2014 amount reported for Mr. Carges represents the
pro-rated amount earned under the annual cash
incentive plan for services he rendered through his separation date from the
Company on November 3, 2014. See Compensation Discussion and Analysis
Elements of Our Executive Compensation Program
Annual Cash Incentive Awards above for
more information.
All Other Compensation (Column
(i)) |
General
The amounts reported in the All Other
Compensation column reflect, for each of our NEOs, the sum of:
a) |
the cost of personal airplane usage
by our CEO or CFO, as described below; |
b) |
the cost of certain information
technology support services provided by the Company for computer equipment
located at the residences of our NEOs; |
c) |
the amount of the matching
contributions made by the Company to the Companys 401(k) savings plan for
the benefit of our NEOs, subject to a maximum of $10,400 applicable to
each participating employee for 2014, including NEOs; |
d) |
the dollar value of the premiums paid
by the Company for group life insurance and accidental death and
dismemberment coverage for the benefit of our NEOs; |
e) |
the dollar value of the Make-Good
Cash Payments provided to Mr. Schulman for cash payments and equity
awards to the extent that Mr. Schulman forfeited or was otherwise required
to repay them to his former employer as a result of his leaving his former
employer to join the Company, as described below; |
f) |
the cost of temporary housing for Mr.
Schulman for the portion of 2014 following the date of his commencement of
employment with the Company, and the reimbursement of Mr. Schulman for the
amount of income taxes relating to the temporary housing and
travel-related benefits provided to him, as described below; |
g) |
the separation pay and benefits
provided to Mr. Carges in connection with his separation from the Company
on November 3, 2014, as described below; |
h) |
the cost of Company promotional items
given to Mr. Schulman, including a tax reimbursement for $117 covering the
cost of the gift; and |
i) |
the
cost of a gift certificate given to Mr. Carges, including a tax
reimbursement for $548 covering the cost of the
gift. |
Perquisites are valued at the
incremental cost of providing such perquisites, net of any reimbursements
provided by our NEOs.
Table of
Contents
COMPENSATION TABLES
Personal
Airplane Usage
The Company permits limited personal
use of the corporate airplane by
our CEO and CFO (which includes use of the corporate
airplane by the CEO and CFO who serve on the board of another entity to attend
such board meetings). The cost of personal airplane usage is calculated based on
a methodology that includes the weighted average cost of fuel, maintenance
expenses, parts and supplies, landing fees, ground services, catering, and crew
expenses associated with such use, including those associated with deadhead
flights related to such use. Because the corporate airplane is used primarily
for business travel, the methodology excludes fixed costs that do not change
based on usage. Fixed costs include pilot salaries, the purchase or lease costs
of the airplane, and the cost of maintenance not related to such personal travel. Executives, their families, and invited
guests occasionally fly on the corporate airplane as additional passengers on
business flights. In those cases, the aggregate incremental cost to the Company
is a de minimis amount, and as a result, no amount is reflected in the table.
Executives, directors, and their families also occasionally fly on the corporate
airplane as additional passengers on personal flights that are attributed
to the CEO
or CFO, in which case the entire incremental cost is allocated to the executive
who arranged for the personal flight. The Company does not grant bonuses to
cover, reimburse, or otherwise gross-up any income tax owed for personal
travel on the corporate airplane.
Make-Good Cash
Payments Mr. Schulman
The 2014 amount reported for Mr.
Schulman includes certain Make-Good Cash Payments intended to make him whole
for lost cash and equity awards to the extent that Mr. Schulmans former
employer caused him to forfeit or required him to repay such amounts as a result
of his leaving his former employer to join the Company:
a) |
$13,620,415 to cover the pre-tax income Mr. Schulman was required
to repay to his former employer for equity and annual incentive
compensation received within the last two years prior to his joining the
Company (and a portion of which was paid directly by the Company to his
former employer); |
b) |
$3,631,250 to make up for the 2014 annual bonus opportunity that
Mr. Schulman forfeited by leaving his former employer to join the
Company; |
c) |
$1,300,000 representing the portion paid in 2014 (which is 50% of
the $2,600,000 total amount to be paid to Mr. Schulman) to make up for the
cash-based incentive portfolio awards that Mr. Schulman forfeited by
leaving his former employer to join the Company; and |
d) |
$3,626,537 to make up for the vested options in his former
employers common stock that Mr. Schulman forfeited by leaving his former
employer to join the Company. |
Relocation
Benefits Mr. Schulman
The 2014 amount reported for Mr.
Schulman also includes the aggregate amount of $129,230 to cover certain
relocation benefits as outlined below:
a) |
the cost of temporary housing for Mr. Schulman in the
San Francisco Bay Area for that portion of 2014 following
his commencement of employment with the Company in September;
and |
b) |
the cost of a tax
reimbursement for the amount of income taxes relating to the temporary
housing and certain travel benefits provided to
him. |
74 |
|
2015 Annual Meeting of Stockholders |
Table of Contents
COMPENSATION TABLES
Separation Pay and
Benefits Mr. Carges
The 2014 amount reported for Mr. Carges
also includes the following separation payments and benefits made by the Company
to him or on his behalf in connection with his separation from the Company on
November 3, 2014:
a) |
$468,750 as a lump-sum separation payment equivalent to nine
months base salary; |
b) |
$1,755 representing the cost of one month of COBRA premiums paid by
the Company in 2014 (the Company agreed to pay three additional months in
2015); and |
c) |
$24,000 as a lump-sum
supplemental payment intended to cover the cost to Mr. Carges of his COBRA
premiums for 14 additional months after the Company ceases paying them
under (b). |
Other benefits awarded to Mr. Carges
under his separation agreement with the Company are reported in the Stock Awards
column and the Non-Equity Incentive Plan Compensation column and described
above.
2014 Perquisites
Name |
|
Personal Airplane Usage ($) |
|
Make-Good Cash Payments ($) |
|
Relocation ($) |
|
Relocation - Tax Reimbursement ($) |
|
Separation Pay
& Benefits ($) |
John J. Donahoe |
|
76,524 |
|
|
|
|
|
|
|
|
Robert H. Swan |
|
64,263 |
|
|
|
|
|
|
|
|
Daniel H. Schulman |
|
|
|
22,178,202 |
|
68,112 |
|
61,118 |
|
|
Devin N. Wenig |
|
|
|
|
|
|
|
|
|
|
Michael R. Jacobson |
|
|
|
|
|
|
|
|
|
|
David A. Marcus |
|
|
|
|
|
|
|
|
|
|
Mark T. Carges |
|
|
|
|
|
|
|
|
|
494,505 |
investor.ebayinc.com 75
Table of Contents
COMPENSATION TABLES
2014 GRANTS OF
PLAN-BASED AWARDS
The following table, footnotes, and
narrative set forth certain information regarding grants of plan-based awards to
each of our NEOs for the fiscal year ended December 31, 2014.
Name (a) |
|
Approval Date (b) |
|
Grant Date (c) |
|
Estimated Future Payouts Under Non-Equity Incentive Plan
Awards |
|
Estimated Future Payouts Under Equity Incentive Plan
Awards |
|
|
All
Other Stock Awards: Number of
Shares of Stock or Units (#)(j) |
|
|
|
All
Other Option Awards: Number
of Securities Underlying Options (#)(k)
|
|
|
Exercise or Base Price of Option Awards ($/Sh)(l)
|
|
Grant Date Fair
Value ($)(m) |
Threshold ($)(d) |
|
Target ($)(e) |
|
Maximum ($)(f)
|
|
Threshold (#)(g) |
|
Target (#)(h) |
|
Maximum (#)(i) |
|
John J. Donahoe |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options |
|
1/29/2014 |
|
4/1/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
146,654 |
|
|
|
56.04 |
|
|
2,198,343 |
RSUs |
|
1/29/2014 |
|
4/1/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
58,887 |
|
|
|
|
|
|
|
|
|
|
3,300,027 |
eIP
Company |
|
N/A |
|
N/A |
|
|
750,000 |
|
|
1,500,000 |
|
3,000,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
performance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
eIP
Individual |
|
N/A |
|
N/A |
|
|
|
|
|
500,000 |
|
1,000,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
performance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PBRSUs |
|
1/29/2014 |
|
4/1/2014 |
|
|
|
|
|
|
|
|
|
37,816 |
|
94,540 |
|
|
226,896 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,652,989 |
(2014-2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
performance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
period) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert H. Swan |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options |
|
1/29/2014 |
|
4/1/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
61,881 |
|
|
|
56.04 |
|
|
927,596 |
RSUs |
|
1/29/2014 |
|
4/1/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,941 |
|
|
|
|
|
|
|
|
|
|
1,733,934 |
eIP
Company |
|
N/A |
|
N/A |
|
|
398,438 |
|
|
796,875 |
|
1,593,750 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
performance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
eIP
Individual |
|
N/A |
|
N/A |
|
|
|
|
|
265,625 |
|
531,250 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
performance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PBRSUs |
|
1/29/2014 |
|
4/1/2014 |
|
|
|
|
|
|
|
|
|
20,627 |
|
51,567 |
|
|
123,761 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,083,432 |
(2014-2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
performance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
period) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
76 |
|
2015 Annual Meeting of Stockholders |
Table of Contents
COMPENSATION TABLES
Name (a) |
|
Approval Date (b) |
|
Grant Date (c) |
|
Estimated Future Payouts Under Non-Equity Incentive Plan
Awards |
|
Estimated Future Payouts Under Equity Incentive Plan
Awards |
|
All
Other Stock Awards: Number of
Shares of Stock or Units (#)(j) |
|
All Other Option Awards: Number
of Securities Underlying Options (#)(k)
|
|
Exercise or Base Price of Option Awards ($/Sh)(l)
|
|
Grant Date Fair
Value ($)(m) |
Threshold ($)(d) |
|
Target ($)(e) |
|
Maximum ($)(f) |
|
Threshold (#)(g) |
|
Target (#)(h) |
|
Maximum (#)(i) |
|
Daniel H. Schulman |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options |
|
9/26/2014 |
|
10/15/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101,588 |
|
|
|
50.24 |
|
|
1,330,803 |
RSUs |
|
9/26/2014 |
|
10/15/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
84,657 |
|
|
|
|
|
|
|
|
|
|
4,253,168 |
RSUs |
|
9/26/2014 |
|
10/15/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
77,950 |
|
|
|
|
|
|
|
|
|
|
3,916,208 |
RSUs |
|
9/26/2014 |
|
10/15/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
76,594 |
|
|
|
|
|
|
|
|
|
|
3,848,083 |
eIP
Company |
|
N/A |
|
N/A |
|
|
134,026 |
|
|
|
268,053 |
|
|
|
536,106 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
performance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
eIP
Individual |
|
N/A |
|
N/A |
|
|
|
|
|
|
89,351 |
|
|
|
178,702 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
performance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PBRSUs |
|
9/26/2014 |
|
10/15/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,318 |
|
|
50,794 |
|
|
121,906 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,490,645 |
(2014-2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
performance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
period) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Devin N. Wenig |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options |
|
1/29/2014 |
|
4/1/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
51,567 |
|
|
|
56.04 |
|
|
772,989 |
Options |
|
9/26/2014 |
|
10/15/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
45,151 |
|
|
|
50.24 |
|
|
591,478 |
RSUs |
|
1/29/2014 |
|
4/1/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,784 |
|
|
|
|
|
|
|
|
|
|
1,444,935 |
RSUs |
|
9/26/2014 |
|
10/15/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22,576 |
|
|
|
|
|
|
|
|
|
|
1,134,218 |
eIP
Company |
|
N/A |
|
N/A |
|
|
540,144 |
|
|
|
1,080,288 |
|
|
|
2,160,577 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
performance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
eIP
Individual |
|
N/A |
|
N/A |
|
|
|
|
|
|
360,096 |
|
|
|
720,192 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
performance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PBRSUs |
|
1/29/2014 |
|
4/1/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17,190 |
|
|
42,973 |
|
|
103,136 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,569,557 |
(2014-2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
performance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
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|
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|
|
period) |
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PBRSUs |
|
9/26/2014 |
|
10/15/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,051 |
|
|
37,626 |
|
|
90,303 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,844,962 |
(2014-2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
performance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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|
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|
|
period) |
|
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|
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|
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|
|
investor.ebayinc.com 77
Table of Contents
COMPENSATION TABLES
Name (a) |
|
Approval Date (b) |
|
Grant Date (c) |
|
Estimated Future Payouts Under Non-Equity Incentive Plan
Awards |
|
Estimated Future Payouts Under Equity Incentive Plan
Awards |
|
All
Other Stock Awards: Number of
Shares of Stock or Units (#)(j) |
|
All Other Option Awards: Number
of Securities Underlying Options (#)(k)
|
|
Exercise or Base Price of Option Awards ($/Sh)(l)
|
|
Grant Date Fair
Value ($)(m) |
Threshold ($)(d) |
|
Target ($)(e) |
|
Maximum ($)(f) |
|
Threshold (#)(g) |
|
Target (#)(h) |
|
Maximum (#)(i) |
|
Michael R. Jacobson |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options |
|
1/29/2014 |
|
4/1/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,784 |
|
|
|
56.04 |
|
|
386,502 |
RSUs |
|
1/29/2014 |
|
4/1/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,892 |
|
|
|
|
|
|
|
|
|
|
722,468 |
eIP
Company |
|
N/A |
|
N/A |
|
|
168,750 |
|
|
337,500 |
|
|
675,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
performance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
eIP
Individual |
|
N/A |
|
N/A |
|
|
|
|
|
112,500 |
|
|
225,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
performance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PBRSUs |
|
1/29/2014 |
|
4/1/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
8,595 |
|
|
21,487 |
|
|
51,569 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,284,808 |
(2014-2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
performance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
period) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David A. Marcus |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options |
|
1/29/2014 |
|
4/1/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
51,567 |
|
|
|
56.04 |
|
|
772,989 |
RSUs |
|
1/29/2014 |
|
4/1/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,784 |
|
|
|
|
|
|
|
|
|
|
1,444,935 |
eIP
Company |
|
N/A |
|
N/A |
|
|
138,606 |
|
|
277,212 |
|
|
554,423 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
performance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
eIP
Individual |
|
N/A |
|
N/A |
|
|
|
|
|
92,404 |
|
|
184,808 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
performance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PBRSUs |
|
1/29/2014 |
|
4/1/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
17,190 |
|
|
42,973 |
|
|
103,136 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2014-2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,569,557 |
performance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
period) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark T. Carges |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options |
|
1/29/2014 |
|
4/1/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,941 |
|
|
|
56.04 |
|
|
463,806 |
RSUs |
|
1/29/2014 |
|
4/1/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,471 |
|
|
|
|
|
|
|
|
|
|
866,995 |
eIP
Company |
|
N/A |
|
N/A |
|
|
108,173 |
|
|
216,346 |
|
|
432,692 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
performance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
eIP
Individual |
|
N/A |
|
N/A |
|
|
|
|
|
72,115 |
|
|
144,231 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
performance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PBRSUs |
|
1/29/2014 |
|
4/1/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
10,314 |
|
|
25,784 |
|
|
61,882 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,541,746 |
(2014-2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
performance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
period) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PBRSUs |
|
9/16/2014 |
|
11/03/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21,831 |
|
|
|
|
|
|
|
|
|
|
456,109 |
(2012-2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
performance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
period) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
78 |
|
2015 Annual Meeting of Stockholders |
Table of Contents
COMPENSATION TABLES
Estimated Future Payouts Under Non-Equity Incentive Plan
Awards (Annual Cash Incentive Plan) (Columns (d), (e), and
(f)) |
The amounts reported under these
columns relate to the possible awards under the annual cash incentive plan. For
further details, see Compensation Discussion and Analysis Elements of Our
Executive Compensation Program Annual Cash Incentive Awards above. In 2014,
the total annual target incentive amounts under the annual cash incentive plan
for the NEOs were as follows:
Mr. Donahoe |
|
200 |
% |
Mr. Swan |
|
125 |
% |
Mr. Schulman |
|
175 |
% |
Mr. Wenig |
|
175 |
% |
Mr. Jacobson |
|
75 |
% |
Mr. Marcus |
|
100 |
% |
Mr. Carges |
|
75 |
% |
The total 2014 annual target incentive
amounts under the annual cash incentive plan for the NEOs were allocated 75% to
Company performance and 25% to individual performance. No funding occurs for the
individual performance component of the annual cash incentive plan unless the
minimum thresholds for both FX-neutral revenue and non-GAAP net income are met;
in 2014, these thresholds were met.
Actual payouts to our NEOs under the
annual cash incentive plan for the fiscal year ended December 31, 2014 are
reflected in the Non-Equity Incentive Plan Compensation column in the 2014
Summary Compensation Table above. In accordance with his separation agreement,
Mr. Carges received a payment equal to a prorated annual bonus based on eligible
earnings through November 3, 2014, the date of his separation from the Company,
paid out at target for the individual component and based on actual Company
performance. Mr. Marcus did not receive a payout under the 2014 annual cash
incentive plan.
eIP - Company
Performance: The amounts shown in the rows
entitled eIP Company performance reflect estimated payouts for the fiscal
year ended December 31, 2014 under the annual cash incentive plan for the portion of the award payable based on the
Companys performance, as follows:
● |
Threshold: The amounts shown in this column reflect the minimum
payment levels if the minimum FX-neutral revenue and non-GAAP net income
thresholds are met, which are 50% of the amounts shown under the Target
column. |
● |
Target: The amounts shown in this column reflect the target
payment levels if target non-GAAP net income is met. |
● |
Maximum: The amounts shown in this column represent the maximum
amounts payable based on Company performance, which are 200% of the
amounts shown under the Target column. |
The payout for the achievement of each
of the eNPS and NPS metrics is independent from the payout tied to the Companys
financial performance (but will only be paid in a year in which the minimum
thresholds for both FX-neutral revenue and non-GAAP net income are met). For
2014, no payout was made for either the eNPS or NPS metric because the
respective targets were not met. See Compensation Discussion and Analysis
Elements of Our Executive Compensation Program Annual Cash Incentive Awards
above.
eIP - Individual
Performance: The amounts shown in the rows
entitled eIP Individual performance reflect estimated payouts for the fiscal
year ended December 31, 2014 under the annual cash incentive plan for the
portion of the award payable based on individual performance, as follows:
● |
Threshold: Although there are no
thresholds under the annual cash incentive plan for individual
performance, there is no payout for individual performance unless the
minimum thresholds for both Company-wide FX-neutral revenue and non-GAAP
net income are met. In addition, in circumstances where the Companys
financial performance is above its thresholds but below its targets, a
modifier is applied to the individual performance component to reduce it
proportionately based on the Company financial performance component.
|
● |
Target: The amounts shown in this column reflect 100% of the
target award for individual performance. |
● |
Maximum: The amounts shown in
this column are 200% of the amounts shown under the Target
column. |
investor.ebayinc.com 79
Table of Contents
COMPENSATION TABLES
Estimated Future Payouts Under Equity Incentive Plan
Awards (PBRSUs) (Columns (g), (h), and
(i)) |
The amounts shown reflect estimated
payouts of PBRSUs for the 2014-2015 performance period, as follows:
● |
Threshold: The amounts shown in this column reflect the awards if
the minimum FX-neutral revenue and non-GAAP operating margin dollar
thresholds are met and the lowest return on invested capital modifier is
applied, and are 40% of the amounts shown under the Target
column. |
● |
Target: The amounts shown in this column reflect the awards if
the FX-neutral revenue and non-GAAP operating margin dollar amounts are at
target, and the target return on invested capital modifier is
applied. |
● |
Maximum: The amounts shown in
this column reflect the awards if the maximum FX-neutral revenue and
non-GAAP operating margin dollar amounts are met and the maximum return on
invested capital modifier is applied, and are 240% of the amounts shown
under the Target column. |
For further discussion of the PBRSUs,
including their vesting schedules, see Compensation Discussion and Analysis
Elements of Our Executive Compensation Program Equity Incentive Awards PBRSU
Program above.
All Other Stock Awards: Number of Shares or Stock Units
(RSUs) (Column (j)) |
Except as noted below with respect to
Mr. Carges, the awards reflect the number of RSUs on the grant date. For 2014,
RSUs were granted to our NEOs in connection with the Companys annual (focal)
grant in April. Mr. Schulman was granted RSUs in connection with his appointment
as President and CEO-designee of PayPal in September, and Mr. Wenig was granted
additional RSUs in connection with his appointment as CEO-designee of eBay in
September. Except for Mr. Schulmans two Make-Good RSU Awards, one of which
vested 100% on December 24, 2014 and the other of
which will vest 100% on January 28, 2016, each of these RSU awards vest over
four years, with 25% vesting on each of the first four anniversaries of the date
of grant. The 2012-2013 PBRSUs reported for Mr. Carges do not represent a new
grant of RSUs but rather the unvested portion of the PBRSUs earned for the
2012-2013 performance period that were otherwise scheduled to vest in March 2015
but were accelerated in November 2014 pursuant to Mr. Carges separation
agreement with the Company.
All Other Option Awards (Stock Options) (Columns (k) and
(l)) |
The awards reflect the number of stock
options on the grant date. For 2014, option awards were granted to our NEOs in
connection with the Companys annual (focal) grant in April. Mr. Schulman was
granted options in connection with his appointment as President and CEO-designee
of PayPal in September, and Mr. Wenig was granted additional options in
connection with his appointment as CEO-designee of eBay in September. New
hire option grants vest over four years, with
25% vesting on the first anniversary of the date of grant and 1/48th
vesting monthly thereafter. Options granted in connection with the Companys
annual (focal) grant vest over four years, with 12.5% vesting on the six-month
anniversary of the date of grant and 1/48th vesting monthly
thereafter. The exercise price of options is the closing price of the Companys
common stock on the date of grant.
Grant Date Fair Value (Column
(m)) |
The fair value of each option and RSU
award was calculated using the fair value of our common stock on the date of
grant. The estimated fair value of PBRSUs was calculated based on the probable
outcome of the performance measures for the 2014-2015 performance period as of
the date on which those PBRSUs were granted for
accounting purposes. The assumptions used by the Company in calculating the
grant date fair value of stock option grants are incorporated herein by
reference to Note 15 to the Companys consolidated financial statements in its
Form 10-K for the fiscal year ended December 31, 2014.
80 |
|
2015 Annual Meeting of Stockholders |
Table of Contents
COMPENSATION TABLES
2014 OUTSTANDING
EQUITY AWARDS AT FISCAL YEAR-END
The following table and footnotes set
forth certain information regarding outstanding equity awards for each of our
NEOs as of December 31, 2014.
|
|
|
|
Option Awards |
|
|
|
|
|
|
|
|
Stock Awards |
Name |
|
Number
of Securities Underlying Unexer- cised Options (#) Exercisable |
|
Number
of Securities Underlying Unexer- cised Options (#) Unexer- cisable |
|
|
Equity Incentive Plan Awards: Number
of Securities Underlying Unexer- cised Unearned Options (#) |
|
Option Exercise Price ($) |
|
Option Grant Date |
|
Option Expiration Date |
|
|
Number
of Shares or Units
of Stock That Have Not Vested (#) |
|
|
Market Value Shares or
Units of
Stock That
Have Not Vested ($)
(1) |
|
Stock Grant
Date |
|
Equity Incentive Plan Awards: Number
of Unearned Shares, Units
or Other Rights That
Have Not Vested (#) |
|
|
Equity Incentive Plan Awards: Market or
Payout Value of Unearned Shares, Units
or Other Rights That
Have Not Vested ($)
(1) |
John J. Donahoe |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
258,891 |
|
0 |
|
|
0 |
|
24.93 |
|
9/1/2008 |
|
9/1/2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
435,774 |
|
0 |
|
|
0 |
|
10.50 |
|
3/2/2009 |
|
3/2/2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
500,000 |
|
0 |
|
|
0 |
|
23.88 |
|
3/1/2010 |
|
3/1/2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
332,322 |
|
22,155 |
(2) |
|
0 |
|
32.29 |
|
3/1/2011 |
|
3/1/2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
113,378 |
|
56,690 |
(2) |
|
0 |
|
36.59 |
|
4/2/2012 |
|
4/2/2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
52,453 |
|
73,435 |
(2) |
|
0 |
|
55.71 |
|
4/1/2013 |
|
4/1/2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24,442 |
|
122,212 |
(2) |
|
0 |
|
56.04 |
|
4/1/2014 |
|
4/1/2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22,065 |
(4) |
|
1,238,288 |
|
3/1/2011 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
40,994 |
(4) |
|
2,300,583 |
|
4/2/2012 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
44,427 |
(4) |
|
2,493,243 |
|
4/1/2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
98,956 |
(6) |
|
5,553,411 |
|
3/1/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
58,887 |
(4) |
|
3,304,738 |
|
4/1/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
42,453 |
(7) |
|
2,382,462 |
|
4/1/2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
300,000 |
(8) |
|
16,836,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
37,816 |
(9) |
|
2,122,234 |
investor.ebayinc.com 81
Table of Contents
COMPENSATION TABLES
|
|
|
|
Option Awards |
|
|
|
|
|
|
|
|
Stock Awards |
Name |
|
Number
of Securities Underlying Unexer- cised Options (#) Exercisable |
|
Number
of Securities Underlying Unexer- cised Options (#) Unexer- cisable |
|
|
Equity Incentive Plan Awards: Number
of Securities Underlying Unexer- cised Unearned Options (#) |
|
Option Exercise Price ($) |
|
Option Grant Date |
|
Option Expiration Date |
|
|
Number
of Shares or Units
of Stock That Have Not Vested (#) |
|
|
Market Value Shares or
Units of
Stock That
Have Not Vested ($)
(1) |
|
Stock Grant
Date |
|
Equity Incentive Plan Awards: Number
of Unearned Shares, Units
or Other Rights That
Have Not Vested (#) |
|
|
Equity Incentive Plan Awards: Market or
Payout Value of Unearned Shares, Units
or Other Rights That
Have Not Vested ($)
(1) |
Robert H. Swan |
|
17,750 |
|
0 |
|
|
0 |
|
25.85 |
|
3/3/2008 |
|
3/3/2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
56,250 |
|
0 |
|
|
0 |
|
26.36 |
|
8/8/2008 |
|
8/8/2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
112,500 |
|
0 |
|
|
0 |
|
13.19 |
|
2/13/2009 |
|
2/13/2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
91,250 |
|
0 |
|
|
0 |
|
10.50 |
|
3/2/2009 |
|
3/2/2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
225,000 |
|
0 |
|
|
0 |
|
23.88 |
|
3/1/2010 |
|
3/1/2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
140,625 |
|
9,375 |
(2) |
|
0 |
|
32.29 |
|
3/1/2011 |
|
3/1/2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
36,000 |
|
18,000 |
(2) |
|
0 |
|
36.59 |
|
4/2/2012 |
|
4/2/2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
28,338 |
|
39,673 |
(2) |
|
0 |
|
55.71 |
|
4/1/2013 |
|
4/1/2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,314 |
|
51,567 |
(2) |
|
0 |
|
56.04 |
|
4/1/2014 |
|
4/1/2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,375 |
(4) |
|
526,125 |
|
3/1/2011 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,500 |
(4) |
|
757,620 |
|
4/2/2012 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,504 |
(4) |
|
1,431,284 |
|
4/1/2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32,012 |
(6) |
|
1,796,513 |
|
3/1/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,941 |
(4) |
|
1,736,409 |
|
4/1/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24,371 |
(7) |
|
1,367,701 |
|
4/1/2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
120,000 |
(8) |
|
6,734,400 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,627 |
(9) |
|
1,157,587 |
Daniel H. Schulman |
|
0 |
|
101,588 |
(3) |
|
0 |
|
50.24 |
|
10/15/2014 |
|
10/15/2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
84,657 |
(5) |
|
4,750,951 |
|
10/15/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
76,594 |
(12) |
|
4,298,455 |
|
10/15/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,318 |
(9) |
|
1,140,246 |
82 |
|
2015 Annual Meeting of Stockholders |
Table of Contents
COMPENSATION TABLES
|
|
|
|
Option Awards |
|
|
|
|
|
|
|
|
Stock Awards |
|
Name |
|
Number
of Securities Underlying Unexer- cised Options (#)
Exercisable |
|
Number
of Securities Underlying Unexer- cised Options (#) Unexer- cisable |
|
|
Equity Incentive Plan Awards: Number
of Securities Underlying Unexer- cised Unearned Options (#) |
|
Option Exercise Price ($) |
|
Option Grant Date |
|
Option Expiration Date |
|
|
Number
of Shares or Units
of Stock That Have Not Vested (#) |
|
|
Market Value Shares or Units of
Stock That Have Not Vested ($)
(1) |
|
Stock Grant Date |
|
Equity Incentive Plan Awards: Number
of Unearned Shares, Units
or Other Rights That Have Not
Vested (#) |
|
|
Equity Incentive Plan Awards: Market or
Payout Value of Unearned Shares, Units
or Other Rights That Have Not
Vested ($) (1) |
|
Devin N.
Wenig |
|
33,174 |
|
21,327 |
(10) |
|
0 |
|
33.69 |
|
10/14/2011 |
|
10/14/2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,750 |
|
18,000 |
(3) |
|
0 |
|
36.59 |
|
4/2/2012 |
|
4/2/2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
33,174 |
|
21,327 |
(11) |
|
0 |
|
36.12 |
|
4/13/2012 |
|
4/13/2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23,615 |
|
33,061 |
(2) |
|
0 |
|
55.71 |
|
4/1/2013 |
|
4/1/2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,594 |
|
42,973 |
(2) |
|
0 |
|
56.04 |
|
4/1/2014 |
|
4/1/2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0 |
|
45,151 |
(2) |
|
0 |
|
50.24 |
|
10/15/2014 |
|
10/15/2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,217 |
(5) |
|
797,858 |
|
10/14/2011 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
47,391 |
(5) |
|
2,659,583 |
|
10/14/2011 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,500 |
(4) |
|
757,620 |
|
4/2/2012 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21,253 |
(4) |
|
1,192,718 |
|
4/1/2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
33,975 |
(6) |
|
1,906,677 |
|
3/1/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,784 |
(4) |
|
1,445,998 |
|
4/1/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22,576 |
(4) |
|
1,266,965 |
|
10/15/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,309 |
(7) |
|
1,139,741 |
|
4/1/2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17,190 |
(9) |
|
964,703 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,051 |
(9) |
|
844,662 |
|
investor.ebayinc.com 83
Table of Contents
COMPENSATION TABLES
|
|
|
|
Option Awards |
|
|
|
|
|
|
|
|
Stock Awards |
|
Name |
|
Number of Securities
Underlying Unexer- cised Options (#) Exercisable |
|
Number of Securities
Underlying Unexer- cised
Options (#) Unexer- cisable |
|
Equity Incentive
Plan Awards: Number
of Securities Underlying
Unexer- cised
Unearned Options
(#) |
|
Option Exercise
Price ($) |
|
Option Grant Date |
|
Option Expiration
Date |
|
|
Number of Shares or Units of
Stock That Have Not Vested (#) |
|
Market Value Shares
or Units of Stock That
Have Not Vested
($) (1) |
|
Stock Grant
Date |
|
Equity Incentive
Plan Awards: Number
of Unearned Shares,
Units or Other
Rights That Have Not Vested (#) |
|
Equity Incentive
Plan Awards: Market or Payout
Value of Unearned Shares, Units or Other Rights
That Have Not
Vested ($) (1) |
|
Michael R.
Jacobson |
|
20,353 |
|
5,357 |
(2) |
0 |
|
32.29 |
|
3/1/2011 |
|
3/1/2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19,200 |
|
9,600 |
(2) |
0 |
|
36.59 |
|
4/2/2012 |
|
4/2/2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,808 |
|
16,530 |
(2) |
0 |
|
55.71 |
|
4/1/2013 |
|
4/1/2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,297 |
|
21,487 |
(2) |
0 |
|
56.04 |
|
4/1/2014 |
|
4/1/2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,357 |
(4) |
300,635 |
|
3/1/2011 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,200 |
(4) |
404,064 |
|
4/2/2012 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21,000 |
(13) |
1,178,520 |
|
4/2/2012 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,626 |
(4) |
596,331 |
|
4/1/2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17,313 |
(6) |
971,606 |
|
3/1/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,892 |
(4) |
723,499 |
|
4/1/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,155 |
(7) |
569,899 |
|
4/1/2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,595 |
(9) |
482,351 |
|
Mark T.
Carges |
|
2,084 |
|
0 |
|
0 |
|
23.88 |
|
3/1/2010 |
|
2/3/2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16,071 |
|
0 |
|
0 |
|
32.29 |
|
3/1/2011 |
|
2/3/2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,750 |
|
0 |
|
0 |
|
36.59 |
|
4/2/2012 |
|
2/3/2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,871 |
|
0 |
|
0 |
|
55.71 |
|
4/1/2013 |
|
2/3/2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,487 |
|
0 |
|
0 |
|
55.71 |
|
4/1/2013 |
|
2/3/2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,512 |
|
0 |
|
0 |
|
56.04 |
|
4/1/2014 |
|
2/3/2015 |
|
|
|
|
|
|
|
|
|
|
|
|
84 |
|
2015 Annual Meeting of Stockholders |
Table of Contents
COMPENSATION TABLES
(1) Market Value is calculated based on the closing price of $56.12 of our common stock on December 31, 2014.
(2) Annual option grant. Becomes fully vested after four years, with 12.5% vesting on the six-month anniversary of the date of grant, and 1/48th vesting monthly thereafter.
(3) New hire option grant. Becomes fully vested after four years, with 25% vesting on the one-year anniversary of the date of grant, and 1/48th vesting monthly thereafter.
(4) Annual RSU grant. Becomes fully vested after four years, with 25% vesting on each of the first four anniversaries of the date of grant.
(5) New hire RSU grant. Becomes fully vested after four years, with 25% vesting on each of the first four anniversaries of the date of grant.
(6) PBRSU award. Earned in connection with 2012-2013 performance; 50% vested on March 1, 2014, and the remaining 50% vested on March 1, 2015.
(7) PBRSU award. Earned in connection with 2013-2014 performance; 50% vested on March 1, 2015, and the remaining 50% vests on March 1, 2016. See Compensation Discussion and Analysis Elements of Our Executive Compensation Program Equity Incentive Awards PBRSU Program above for additional information.
(8) Grant of PSUs. The remaining tranches of the PSUs vest based on the TSR of eBay common stock exceeding the median TSR of the companies in eBays 2012 peer group over annual performance periods from 2015-2016 or cumulative performance periods from 2012-2016. See Compensation Discussion and Analysis 2014 Business Results 2012 CEO/CFO Performance Share Unit (PSU) Awards above for further discussion of these multi-year PSU awards.
(9) In accordance with the SEC executive compensation disclosure rules, represents the estimated future award of PBRSUs at the threshold performance level under the 2014-2015 performance period based on Company performance through 2014. PBRSUs are earned based on the Companys FX-neutral revenue and non-GAAP operating margin dollars during the performance period (with the application of a return on invested capital modifier). See Compensation Discussion and Analysis Elements of Our Executive Compensation Program PBRSU Program above for a more detailed discussion of these awards and related performance measures.
(10) First tranche of a new hire grant. Becomes fully vested after four years; 25% vested on September 26, 2012 (the first anniversary of the effective date of the commencement of Mr. Wenigs employment), and 1/48th vests monthly thereafter.
(11) Second tranche of a new hire grant. Becomes fully vested after four years; 25% vested on September 26, 2012 (the first anniversary of the effective date of the commencement of Mr. Wenigs employment), and 1/48th vests monthly thereafter.
(12) Make-Good RSU Award. Becomes fully vested on January 28, 2016. See Compensation Discussion and Analysis Compensation Decisions for 2014 Compensation Decisions Related to the Spin-Off of the PayPal Business Hiring Dan Schulman as President of PayPal and its CEO-Designee Following the Spin-Off for further discussion of this award.
(13) Special RSU grant. Becomes fully vested over four years, with 25% vesting on each of the first four anniversaries on the date of grant.
investor.ebayinc.com 85
Table of Contents
COMPENSATION TABLES
2014 OPTION EXERCISES AND STOCK VESTED
The following table and footnotes set
forth the number of shares acquired and the value realized upon exercise of
stock options and the vesting of stock awards by each of our NEOs for the fiscal
year ended December 31, 2014.
|
|
|
Option Awards |
|
|
Stock
Awards |
Name |
|
|
Number of Shares Acquired
on Exercise (#) |
|
Value Realized on Exercise ($)
(1) |
|
|
Number of Shares Acquired
on Vesting (#) |
|
Value Realized on Vesting ($)
(2) |
John J. Donahoe (3) |
|
|
485,665 |
|
14,119,331 |
|
|
364,365 |
|
20,760,346 |
Robert H. Swan (4) |
|
|
269,250 |
|
9,395,910 |
|
|
144,890 |
|
8,250,747 |
Daniel H. Schulman |
|
|
|
|
|
|
|
77,950 |
|
4,450,945 |
Devin N. Wenig |
|
|
|
|
|
|
|
158,896 |
|
8,796,587 |
Michael R. Jacobson (5) |
|
|
160,000 |
|
4,131,640 |
|
|
65,208 |
|
3,784,109 |
David A. Marcus |
|
|
29,252 |
|
431,065 |
|
|
69,750 |
|
4,001,553 |
Mark T. Carges (6) |
|
|
18,475 |
|
467,510 |
|
|
124,073 |
|
6,871,244 |
(1) Value realized on exercise of stock
options is based on the fair market value of our common stock on the date of
exercise minus the exercise price and does not reflect actual proceeds received
by the NEO.
(2) Value realized on vesting of stock
awards is based on the fair market value of our common stock on the vesting date
and does not reflect actual proceeds received by the NEO.
(3) Includes shares sold pursuant to a
10b5-1 plan adopted by Mr. Donahoe
in August 2014 and that will terminate upon the earlier
of March 31, 2015 or the date when all shares under the plan are sold.
(4) Includes shares sold pursuant to a
10b5-1 plan adopted by Mr. Swan
in August 2013 and terminated in August 2014,
and an additional 10b5-1 plan adopted by Mr. Swan in August 2014 and that will terminate upon
the earlier of August 19, 2015 or the date when all shares under the plan are
sold.
(5) Includes shares sold pursuant to a
10b5-1 plan adopted by Mr. Jacobson in August 2014 and terminated in November 2014.
(6) Includes 21,831 PBRSUs earned in
the 2012-2013 performance period based on actual 2012 and 2013 performance that
were scheduled to vest in March 2015 but were accelerated in November 2014
pursuant to Mr. Carges separation agreement with the Company.
86 |
|
2015 Annual Meeting of Stockholders |
Table of Contents
COMPENSATION TABLES
2014 NONQUALIFIED DEFERRED
COMPENSATION
The following table and footnotes set
forth information concerning contributions, earnings, and
withdrawals/distributions during 2014 under the Companys nonqualified deferred
compensation plans for each of our NEOs.
Name |
Executive Contributions
in Last FY ($) |
|
Registrants Contributions
in Last FY ($) |
|
Aggregate Earnings in Last FY ($)
(1) |
|
Aggregate Withdrawals/ Distributions ($) |
|
Aggregate Balance at Last
FYE ($) |
John J. Donahoe |
|
|
|
|
201,721 |
|
|
|
4,289,616 |
Robert H. Swan (2) |
740,575 |
|
|
|
549,846 |
|
|
|
6,575,745 |
Daniel H. Schulman |
|
|
|
|
|
|
|
|
|
Devin N. Wenig |
|
|
|
|
|
|
|
|
|
Michael R. Jacobson |
|
|
|
|
|
|
|
|
|
David A. Marcus |
|
|
|
|
|
|
|
|
|
Mark T.
Carges |
|
|
|
|
|
|
|
|
|
(1) None of the earnings in this column
are included in the 2014 Summary Compensation Table because they are not preferential
or above market.
(2) Executive contributions during 2014
consisted of contributions by Mr. Swan of a portion of his base compensation for
2014 (which amount is included in the 2014 Summary Compensation Table under the
Salary column for 2014).
POTENTIAL PAYMENTS UPON TERMINATION OR
CHANGE IN CONTROL
The following table, footnotes, and narrative set
forth our payment obligations pursuant to the compensation arrangements for each
of our NEOs, under the circumstances described below, assuming that their
employment was terminated or a change in control occurred on December 31, 2014.
Name |
Voluntary Termination ($)(a) |
|
Termination for Cause
($)(b) |
|
Involuntary Termination
Other than for Cause ($)(c) |
|
Change in Control ($)(d) |
|
Death or Disability
($)(e) |
John J. Donahoe |
0 |
|
0 |
|
3,000,000 |
|
16,836,000 |
|
0 |
Robert H. Swan |
0 |
|
0 |
|
1,912,500 |
|
6,734,400 |
|
0 |
Daniel H. Schulman |
0 |
|
0 |
|
20,237,854 |
|
20,237,854 |
|
9,985,292 |
Devin N. Wenig |
0 |
|
0 |
|
22,520,037 |
|
26,089,804 |
|
17,093,528 |
Michael R. Jacobson |
0 |
|
0 |
|
0 |
|
0 |
|
0 |
David A. Marcus (1) |
N/A |
|
N/A |
|
N/A |
|
N/A |
|
N/A |
Mark T. Carges (2) |
N/A |
|
N/A |
|
N/A |
|
N/A |
|
N/A |
(1) Mr. Marcus terminated
his employment with the Company in June 2014. He did not receive any severance
payments or other benefits in connection with his departure.
(2) Mr. Carges terminated his
employment with the Company in November 2014. In recognition of Mr. Carges
leadership and contribution to reestablishing eBay as a technology leader, the
compensation committee approved the following separation payments and benefits
for Mr. Carges: (i) $468,750 as a lump-sum separation payment equivalent to nine
months base salary; (ii) $271,154 representing his pro-rated annual cash incentive award, paid
out at target for the individual component and based on actual Company
performance for 2014; (iii) accelerated vesting with respect to 21,831 PBRSUs,
representing the
investor.ebayinc.com 87
Table of Contents
COMPENSATION TABLES
unvested portion of his PBRSUs earned in the
2012-2013 performance period based on actual 2012 and 2013 performance, which
were otherwise scheduled to vest in March 2015; (iv) the cost of four months of
Company-paid COBRA premiums; and (v) $24,000 as a lump-sum supplemental payment
intended to cover the cost to Mr. Carges of his COBRA premiums for 14 additional months.
Involuntary Termination other than
for Cause (Column (c)) |
Severance Arrangements for
Involuntary Termination Other than for Cause for Mr. Donahoe and Mr. Swan
Under current employment letters with
Mr. Donahoe and Mr. Swan, each is entitled to receive a cash payment equal to
one years target cash compensation for termination without cause (as defined
in the letters), subject to the execution of a release in favor of the
Company.
The
following provisions apply with respect to
grants of annual equity incentive awards made to Mr. Donahoe and Mr. Swan
beginning in 2012 in the event their employment is terminated for any reason
other than for cause on or after January 1, 2015:
Continued Employment
Through |
Additional Vesting of Stock
Options, RSUs, and PBRSUs |
Stock Option
Exercisability |
December 31, 2014 |
6
months vesting post-termination |
Earlier of standard term or 1 year |
December 31, 2015 |
12
months vesting post-termination |
Earlier of standard term or 3 years |
December 31, 2016 |
18
months vesting post-termination |
Earlier of standard term or 5 years |
December 31, 2017 |
24
months vesting post-termination |
Earlier of standard term or 7 years |
December 31, 2018 |
Full vesting of award |
Remaining term |
If either Mr. Donahoe or Mr. Swan
breaches his respective employee proprietary information and invention
assignment agreements with the Company, the post-termination vesting and
exercisability provisions for his respective equity incentive awards will cease
immediately.
For discussion of severance pay and
other benefits that Mr. Donahoe, Mr. Swan, and Mr. Jacobson will be entitled to
receive upon termination of their employment in
connection with the completion of the Spin-Off, see Compensation Discussion and
Analysis Separation Arrangements, Severance and Change-in-Control Arrangements with Executive
Officers, and Clawbacks Separation Arrangements
for Certain Executive Officers Transitioning Responsibilities in Connection with Spin-Off
above.
Severance Arrangements for
Involuntary Termination Other than for Cause for Mr. Schulman
Mr. Schulman entered into an offer
letter (the Schulman Offer Letter) with the Company in connection with
becoming President and CEO-designee of PayPal in September 2014. Under the terms
of the Schulman Offer Letter, Mr. Schulman would be entitled to the following if
his employment was terminated by the Company without cause or if he resigned
for good reason as of December 31, 2014 and his termination date occurred more
than 90 days prior to or more than 24 months following a change in control (as
defined in the Companys 2008 Equity Incentive Award Plan, as amended and
restated, or the 2008 Plan):
● |
a cash payment equal to two times the sum of (a) the
greater of annual base salary or $1 million, and (b) his target bonus
amount (where the target bonus amount equals the greater of two times
annual base salary or the target bonus amount) (Cash Severance
Payment); |
● |
a prorated annual cash bonus based on actual company
performance and only covering the Company performance component for the
fiscal year in which employment is terminated (Prorated Cash Incentive
Award); |
● |
the unpaid portion of his
Make-Good Cash Payments, which is otherwise scheduled to vest on February
15, 2016; and |
● |
a cash payment equal to the
value of the unvested Initial Equity Awards and Make-Good RSU Awards
(where value is determined using the average closing price of the
Companys common stock for the 10 consecutive trading days ending on and
including the trading day immediately prior to the termination
date). |
For discussion of Mr. Schulmans
severance arrangements in the event of his termination of employment without
cause or resignation for good reason at or following the Spin-Off, see
Compensation Discussion and Analysis Separation Arrangements, Severance and Change-in-Control Arrangements with Executive Officers, and Clawbacks
Severance and Change-in-Control Arrangements for Mr. Schulman
above.
88 |
|
2015 Annual Meeting of Stockholders |
Table of Contents
COMPENSATION TABLES
Severance Arrangements for
Involuntary Termination Other than for Cause for Mr. Wenig
Mr. Wenig entered into an offer letter
(the Wenig Offer Letter) with the Company in connection with becoming
CEO-designee of eBay in September 2014. Under the terms of the Wenig Offer
Letter, Mr. Wenig would be entitled to receive the following if his employment
was terminated by the Company without cause or if he resigned for good
reason as of December 31, 2014, and his termination date occurred more than 90
days prior to or more than 24 months following a change in control (as defined
in the 2008 Plan):
● |
Cash Severance Payment; |
● |
Prorated Cash Incentive Award;
and |
● |
a cash payment
equal to the value of the unvested equity outstanding that would otherwise
have vested within 12 months of the termination date (where value is
determined using the average closing price of the Companys common stock
for the 10 consecutive trading days ending on and including the trading
day immediately prior to the termination
date). |
For discussion of Mr. Wenigs severance
arrangements in the event of his termination of employment without cause or
resignation for good reason at or following the Spin-Off, see Compensation
Discussion and Analysis Separation Arrangements, Severance and Change-in-Control Arrangements
with Executive Officers, and Clawbacks Severance and Change in Control
Arrangements for Mr. Wenig above.
Change in Control (Column
(d)) |
Change in Control PSUs Mr.
Donahoe and Mr. Swan
The amounts reported in the Change in
Control column reflect and represent the full vesting of any unvested PSUs
granted to Mr. Donahoe and Mr. Swan for the multi-year 2012-2016 performance
period upon a change in control. In accordance with the terms of the PSU awards,
the full vesting of any unvested PSUs upon a
change in control only occurs if the performance condition set forth in the
award is satisfied as of the date of the change in control. In addition, upon a
change in control, any sale restrictions applicable to shares issued in respect
of the PSUs will lapse.
Severance Arrangements for an
Involuntary Termination in Connection with a Change in Control for Mr. Schulman
Under the terms of the Schulman Offer
Letter, Mr. Schulman would be entitled to receive the following if a change in
control (as defined in the 2008 Plan) occurred as of December 31, 2014 and his
employment was terminated by the Company without cause or he resigned for
good reason:
● |
Cash Severance Payment; |
● |
Prorated Cash
Incentive Award; |
● |
the unpaid
portion of his Make-Good Cash Payments, which is otherwise scheduled to
vest on February 15, 2016; and |
● |
a cash payment
equal to the value of all unvested equity awards outstanding (where value
is determined using the average closing price of the Companys common
stock for the 10 consecutive trading days ending on and including the
trading day immediately prior to the termination
date). |
For discussion of Mr. Schulmans
severance arrangements in the event of his termination of employment without
cause or resignation for good reason in connection with a change in
control following the Spin-Off or where the Spin-Off has not occurred by the
second anniversary of his start date, see Compensation Discussion and Analysis
Separation Arrangements, Severance and Change-in-Control Arrangements with Executive
Officers, and Clawbacks Severance and Change-in-Control Arrangements for Mr.
Schulman above.
investor.ebayinc.com 89
Table of Contents
COMPENSATION TABLES
Severance Arrangements for an
Involuntary Termination in Connection with a Change in Control for Mr.
Wenig
Under the terms of the Wenig Offer
Letter, Mr. Wenig would be entitled to receive the following if a change in
control (as defined in the 2008 Plan) occurred as of December 31, 2014 and his
employment was terminated by the Company without cause or he resigned for
good reason:
● |
Cash Severance Payment; |
● |
Prorated Cash
Incentive Award; and |
● |
a cash payment
equal to the value of all unvested equity awards outstanding (where value
is determined using the average closing price of the Companys common
stock for the 10 consecutive trading days ending on and including the
trading day immediately prior to the termination
date). |
For discussion of Mr. Wenigs severance
arrangements in the event of his termination of employment without cause or
resignation for good reason in connection with a change in control following
the Spin-Off, see Compensation Discussion and Analysis Separation
Arrangements, Severance and Change-in-Control Arrangements with Executive Officers, and
Clawbacks Severance and Change-in-Control Arrangements for Mr. Wenig
above.
Change in Control Equity Awards
The amounts reported in the Change in Control column assume
that, in a change in control transaction, the acquiring entity would
assume or continue outstanding equity awards (other than the remaining tranches
of unvested PSUs, which are discussed above). If the acquiring entity does not
assume or continue any outstanding equity awards and all the unvested and
outstanding awards are fully accelerated upon a
change in control, the aggregate value of accelerated vesting of such awards to
each of the NEOs that were executive officers of the Company as of December 31,
2014, calculated based on the closing price of our common stock on December 31,
2014, would be as follows:
Name |
Acceleration Value of All
Outstanding Equity Awards as of
12/31/14($)(*) |
Mr. Donahoe |
18,947,721 |
Mr. Swan |
8,210,990 |
Mr. Schulman |
9,646,744 |
Mr. Wenig |
12,706,910 |
Mr. Jacobson |
5,068,195 |
Mr. Marcus |
N/A |
Mr. Carges |
N/A |
*Excludes unvested PSUs to Mr. Donahoe
and Mr. Swan, which are discussed above.
Death or Disability (Column
(e)) |
Severance Arrangements in the Event
of Death or Disability with Mr. Schulman and Mr. Wenig
Under the terms of the Schulman Offer
Letter and Wenig Offer Letter, if Mr. Schulmans or Mr. Wenigs employment
terminates due to his death or permanent disability, he will be entitled to
receive within 30 days of his termination date a
cash payment equal to the value of any unvested equity awards that would have
otherwise vested within 24 months of his termination date.
90 |
|
2015 Annual Meeting of Stockholders |
Table of Contents
COMPENSATION OF
DIRECTORS
The Compensation Committee is
responsible for reviewing and making recommendations to the Board regarding
compensation paid to all directors who are not employees of eBay, or any parent,
subsidiary or affiliate of eBay, for their Board and committee services.
Except for Mr. Omidyar, eBays founder
and Chairman of the Board, 2014 annual compensation to continuing non-employee
directors consisted of (a) $220,000 of deferred stock units, or DSUs (rounded up
to the nearest whole share), at the time of the annual meeting and (b) an annual
retainer of $50,000 paid in cash in quarterly installments (or, at the
non-employee directors discretion, paid in part or in whole in additional DSUs
of an equivalent value). Effective January 1, 2015, the amount of the annual
retainer was increased from $50,000 to $80,000. The annual retainer is pro-rated
in the event that a director serves for a portion of a year.
Prior to January 1, 2015, new
non-employee directors received $150,000 of DSUs (rounded up to the nearest
whole share) upon their initial election to the Board. Effective January 1,
2015, the Company ceased granting DSUs upon the initial election
of new
non-employee directors.
DSUs represent an unfunded, unsecured
right to receive shares of eBay common stock (or, with respect to DSUs granted
prior to August 1, 2013, the equivalent value thereof in cash or property)
on a future date, and the value of DSUs varies
directly with the price of eBay common stock. DSU awards vest as to 25% on the
first anniversary of the date of grant and as to 1/48th each month
thereafter, provided the director continues to serve as a director or consultant
of eBay. DSUs granted prior to August 1, 2013 are payable in stock or cash (at
our election) following the termination of a non-employee directors service on
the Board. DSUs granted on or after August 1, 2013 are payable solely in stock
following the termination of a non-employee directors service on the Board. In
the event of a change in control of eBay, any equity awards granted to our
non-employee directors will accelerate and become fully vested and exerciseable.
The following table sets forth annual
retainers paid to our non-employee directors who serve as Lead Independent
Director; the Chairs of the Audit, Compensation, and Corporate
Governance and Nominating Committees; and the members of those Committees. Directors
with an interest and background in technology who meet regularly with our senior
technologists and report significant matters to the Board do not receive any
compensation for such service. In addition, in connection with the termination
of a non-employee directors service on the Board, any DSUs which were granted
to such director more than 12 months prior to the effective date of such
termination of service will become fully vested and exercisable.
Role |
2014 Annual Retainer |
Lead Independent Director |
$25,000 |
Committee Chairs |
|
Audit |
$20,000 |
Compensation |
$15,000 |
Corporate
Governance & Nominating |
$15,000 |
Committee Members |
|
Audit |
$18,000 |
Compensation |
$12,000 |
Corporate
Governance & Nominating |
$10,000 |
investor.ebayinc.com 91
Table of Contents
COMPENSATION OF DIRECTORS
2014 DIRECTOR
COMPENSATION TABLE
The following table, footnotes, and
narrative summarize the total compensation paid by the Company to non-employee
directors for the fiscal year ended December 31, 2014. Mr. Bates, Mr. Christodoro, Ms. Hammer, Ms. McGovern, Mr. Traquina, and Mr. Yeary joined the eBay Board
after December 31, 2014. Therefore, none of those individuals received any compensation during
2014.
Name (a) |
|
Fees Earned or Paid in Cash ($)(b) |
|
Stock Awards ($)(c) |
|
Option Awards ($)(d) |
|
All Other Compensation ($)(e) |
|
Total ($)(f) |
Fred D. Anderson |
|
88,000 |
|
220,040 |
|
|
|
|
|
308,040 |
Marc L. Andreessen (1) |
|
40,217 |
|
220,040 |
|
|
|
|
|
260,257 |
Edward W. Barnholt |
|
77,000 |
|
220,040 |
|
|
|
|
|
297,040 |
Scott D. Cook |
|
60,000 |
|
220,040 |
|
|
|
|
|
280,040 |
David W. Dorman (2) |
|
33,500 |
|
150,025 |
|
|
|
|
|
183,525 |
William C. Ford, Jr. |
|
62,000 |
|
220,040 |
|
|
|
|
|
282,040 |
Kathleen C. Mitic |
|
72,000 |
|
220,040 |
|
|
|
|
|
292,040 |
David M. Moffett |
|
83,797 |
|
220,040 |
|
|
|
|
|
303,837 |
Pierre M. Omidyar |
|
|
|
|
|
|
|
20,031 |
|
20,031 |
Richard T. Schlosberg, III |
|
89,250 |
|
220,040 |
|
|
|
|
|
309,290 |
Thomas J. Tierney |
|
83,143 |
|
220,040 |
|
|
|
|
|
303,184 |
(1) Mr. Andreessen resigned
from the Board on October 19, 2014.
(2) Mr. Dorman was appointed
to the Board on June 17, 2014.
Fees Earned or Paid in Cash
(Column (b)) |
The amounts reported in the Fees Earned
or Paid in Cash column reflect the cash fees earned by each non-employee
director in 2014, which includes fees with respect to which the following
directors elected to receive additional DSUs in lieu of cash:
Name |
Fees Forgone ($) |
|
DSUs Received (#) |
Mr. Andreessen |
40,217 |
|
771 |
Mr. Cook |
50,000 |
|
955 |
Mr. Dorman |
26,923 |
|
512 |
Mr. Ford |
50,000 |
|
955 |
Ms. Mitic |
50,000 |
|
955 |
Stock Awards (Column
(c)) |
The amounts reported in the Stock
Awards column reflect the aggregate grant date fair value of DSU awards granted
in 2014. Each continuing non-employee director (other than Mr. Omidyar) was
granted 4,266 DSUs with a value of $220,040 on May 13, 2014, the date of our 2014 annual meeting. Mr. Dorman was granted 3,058
DSUs with a value of $150,025 on June 17, 2014 in connection with his initial
election to the Board.
92 |
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COMPENSATION OF DIRECTORS
As of December 31, 2014, our
non-employee directors held the following aggregate numbers of DSUs and
options:
Name |
Total DSUs Held as of 12/31/14 (#) |
|
Total Options Held as
of 12/31/14 (#) |
Mr. Anderson |
40,691 |
|
3,623 |
Mr. Andreessen |
|
|
|
Mr. Barnholt |
48,742 |
|
31,008 |
Mr. Cook |
52,190 |
|
56,128 |
Mr. Dorman |
3,334 |
|
|
Mr. Ford |
54,066 |
|
41,128 |
Ms. Mitic |
21,265 |
|
|
Mr. Moffett |
42,384 |
|
41,128 |
Mr. Schlosberg |
39,573 |
|
56,128 |
Mr.Tierney |
49,073 |
|
31,008 |
Options exercisable within 60 days of
March 18, 2015 are included in the Security Ownership of Certain Beneficial
Owners and Management Table above. DSUs are not included in that
table.
All Other Compensation (Column
(e)) |
The amount reported in the All Other
Compensation column for Mr. Omidyar consists of that portion of the premiums
paid by eBay for health and life insurance coverage for the benefit of Mr.
Omidyar. Other than this benefit, the Company provides no other reportable
compensation or benefits to its non-employee directors.
investor.ebayinc.com 93
Table of Contents
COMPENSATION OF DIRECTORS
EQUITY COMPENSATION
PLAN INFORMATION
The following table gives information
about shares of our common stock that may be issued upon the exercise of
options and rights under our equity compensation plans as of December 31, 2014.
We refer to these plans and grants collectively as our Equity Compensation
Plans.
|
Plan Category |
(a) Number of Securities to be Issued Upon
Exercise of Outstanding Options, Warrants, and Rights |
|
(b) Weighted Average Exercise Price of Outstanding
Options, Warrants, and Rights |
|
(c) Number of Securities Remaining Available
for Future Issuance Under Equity Compensation Plans (Excluding
Securities Reflected in Column(a)) |
|
|
Equity compensation plans approved by security
holders |
43,743,643 |
(1) |
$35.8714 |
(2) |
78,911,661 |
(3) |
|
Equity compensation plans not approved by security
holders |
1,128,906 |
|
|
|
|
|
|
Total (4) |
44,872,549 |
|
$35.8714 |
|
78,911,661 |
|
(1) Includes
(a) 33,972,113 shares of our common stock issuable pursuant to
RSUs under
our 2008 Equity Incentive Award Plan, as amended and restated, or our 2008 Plan,
and our terminated plans, (b) 9,000,465 shares of our common stock issuable
pursuant to stock options under our 2008 Plan and our terminated plans, (c)
351,065 shares of our common stock issuable pursuant to DSUs under our 2008 Plan and a
terminated plan, and (d) 420,000 shares of our common stock issuable pursuant to
performance share units, or PSUs, under our 2008 Plan. RSUs, DSUs, and PSUs each
represent an unfunded, unsecured right to receive shares of Company common stock
(or, with respect to DSUs granted prior to August 1, 2013, the equivalent value
thereof in cash or property).The value of RSUs, DSUs, and PSUs varies directly
with the price of our common stock.
(2) Does not
include outstanding RSUs, DSUs, or PSUs.
(3) Includes
27,315,427 shares of our common stock reserved for future issuance under our
Employee Stock Purchase Plan as of December 31, 2014.
(4) Excludes
1,426,118 shares subject to RSU awards and 522,268 shares subject to options, in
each case, issued and outstanding pursuant to equity compensation plans assumed
by us in acquisitions. As of December 31, 2014, the options under these plans
had a weighted average exercise price of $4.2558 per share. We cannot make
subsequent grants or awards of our equity securities under these plans.
94 |
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QUESTIONS AND
ANSWERS ABOUT THE PROXY
MATERIALS AND OUR 2015 ANNUAL MEETING
Q: |
Why am I receiving
these materials? |
A: |
eBays Board of
Directors, or the Board, is providing these proxy materials to you in
connection with the Boards solicitation of proxies for use at eBays 2015
Annual Meeting of Stockholders, or the Annual Meeting, which will take
place on May 1, 2015. Stockholders are invited to attend the Annual Meeting and are requested to vote on the
proposals described in this proxy statement. This proxy statement and the
accompanying proxy card are being mailed on or about March 27, 2015 in
connection with the solicitation of proxies on behalf of the
Board. |
Q: |
What information is
contained in these materials? |
A: |
The information
included in this proxy statement relates to the proposals to be voted on
at the Annual Meeting, the voting process, the compensation of our most
highly paid executive officers and our directors, and certain other
required information. eBays 2014 Annual Report, which includes eBays
audited consolidated financial statements, is also
enclosed with this proxy statement. These materials also include the
accompanying proxy card and pre-paid return envelope or voting instruction
form for the Annual Meeting. |
Q: |
What proposals will
be voted on at the Annual Meeting? What are eBays Boards voting
recommendations? |
A: |
The following chart
describes the proposals to be considered at the Annual Meeting and the
Boards voting recommendations. |
|
PROPOSAL |
|
THE BOARDS VOTING RECOMMENDATION |
|
PAGE REFERENCE (FOR MORE DETAIL) |
|
|
1. |
Election of 15 directors to hold
office until our 2016 Annual Meeting of Stockholders |
|
FOR each nominee named in this proxy
statement |
|
17 |
|
|
2. |
Advisory vote to approve
compensation of our named executive officers |
|
FOR |
|
29 |
|
|
3. |
Material terms, including the
performance goals, of the amendment and restatement of the eBay Incentive
Plan. |
|
FOR |
|
30 |
|
|
4. |
Ratification of
PricewaterhouseCoopers LLP as our independent auditors for 2015 |
|
FOR |
|
33 |
|
|
5. |
Three stockholder
proposals |
|
AGAINST |
|
36-43 |
|
|
At the time this proxy statement
was mailed, our management and the Board were not aware of any other
matters to be presented at the Annual Meeting other than those set forth
in this proxy statement and in the notice accompanying this proxy
statement. |
Q: |
How many shares are
entitled to vote? |
A: |
Each share of eBay
common stock outstanding as of the close of business on March 18, 2015, the
record date, is entitled to one vote at the Annual Meeting. At the close
of business on March 18, 2015, 1,212,650,989 shares of common stock were
outstanding and entitled to vote. You may vote all of the shares owned by
you as of the close of business on the record date of March 18, 2015, and
you are entitled to cast one vote per share of
common stock held by you on the record date. These shares include shares
that are (1) held of record directly in your name, including shares
purchased or acquired through eBays equity incentive plans, and (2) held
for you as the beneficial owner through a stockbroker, bank, or other
nominee. |
Q: |
What is the
difference between holding shares as a stockholder of record and as a
beneficial owner? |
A: |
Most stockholders of eBay hold their shares beneficially
through a broker, bank, or other nominee rather than directly in their own
name. There are some distinctions between shares held of record and shares
owned beneficially, specifically: |
● |
Shares held of
record. If your shares are registered
directly in your name with eBays transfer agent, Computershare Shareowner
Services LLC, you are considered the stockholder of record with respect to
those shares, and these proxy materials are
being sent directly to you by eBay. As a stockholder of record, you have
the right to grant your voting proxy directly to eBay or to vote in person
at the Annual Meeting. eBay has enclosed an accompanying proxy card for
you to use. You may also submit voting instructions via the Internet or by
telephone by following the instructions on the accompanying proxy card, as
described below under How can I vote my shares without attending the
Annual Meeting? |
investor.ebayinc.com 95
Table of Contents
QUESTIONS AND ANSWERS
● |
Shares owned
beneficially. If your shares are held
in a brokerage account or by a broker, bank, or other nominee, you are
considered the beneficial owner of shares held in street name, and these
proxy materials are being forwarded to you by your broker, bank, or other
nominee, which is considered the stockholder of record with respect to
those shares. As a beneficial owner, you have the right to direct your
broker, bank, or other nominee on how to vote the shares in your account,
and you are also invited to attend the Annual Meeting. However, because you are not the
stockholder of record, you may not vote these shares in person at the
Annual Meeting unless you request and receive a valid proxy from your
broker, bank, or other nominee. Your broker, bank, or other nominee has
enclosed a voting instruction form for you to use to direct the broker,
bank, or other nominee regarding how to vote your shares. Please instruct
your broker, bank, or other nominee how to vote your shares using the
voting instruction form you received from them |
|
|
Q: |
Can I attend the Annual Meeting? |
A: |
You are invited to attend the
Annual Meeting if you are a stockholder of record or a beneficial owner as
of March 18, 2015. All stockholders must bring proof of identification. If
you are a stockholder of record, your name will also be verified against
the list of stockholders of record prior to admittance to the Annual
Meeting. If you hold your shares in a brokerage account or through a
broker, bank, or other nominee, you will need to provide proof of
ownership by bringing either a copy of the voting instruction form
provided by your broker or a copy of a brokerage
statement showing your share ownership as of March 18, 2015. Whether or
not you attend the Annual Meeting, the event will be made available via
webcast on our investor relations website at http://investor.ebayinc.com,
and the webcast will be archived for a period of 90 days following the
date of the Annual Meeting. Since seating may be limited, admission to the
Annual Meeting will be on a first-come, first-served
basis. |
Q: |
How can I vote my
shares in person at the Annual Meeting? |
A: |
Shares held directly
in your name as the stockholder of record may be voted in person at the
Annual Meeting. If you choose to vote in person, please bring proof of
identification. Even if you plan to attend the Annual Meeting, eBay
recommends that you submit a proxy using the accompanying proxy card with
respect to the voting of your shares in advance as described below under
How can I vote my shares without attending the
Annual Meeting? so that your vote will be counted if you later decide not
to attend the Annual Meeting. Shares held in street name through a
brokerage account or by a broker, bank, or other nominee may be voted in
person by you only if you obtain a valid proxy from your broker, bank, or
other nominee giving you the right to vote the
shares. |
Q: |
How can I vote my
shares without attending the Annual
Meeting? |
A: |
Whether you hold
shares directly as the stockholder of record or beneficially in street
name, you may vote by proxy or submit a voting instruction form without
attending the Annual Meeting. If you hold your shares directly as the
stockholder of record, you may submit your proxy in favor of the Boards
recommendations via the Internet or by telephone by following the
instructions on the accompanying proxy card, or by
completing and mailing the accompanying proxy card in the enclosed
pre-paid envelope. If you hold your shares beneficially in street name,
your broker or bank may offer voting via the Internet or by telephone or
you may mail your accompanying proxy card or voting instruction form in
the enclosed pre-paid envelope. Please refer to the enclosed materials for
details. |
Q: |
Can I change my vote or revoke my
proxy? |
A: |
If
you are the stockholder of record, you may change your proxy instructions
or revoke your proxy at any time before your proxy is voted at the Annual
Meeting. Proxies may be revoked by any of the following
actions: |
● |
filing a timely written notice of revocation
with our Corporate Secretary at our
principal executive office (2065 Hamilton Avenue, San Jose, California 95125); |
● |
submitting a new proxy at a later date via the
Internet, by telephone, or by mail to our
Corporate Secretary at our principal
executive office; or |
● |
attending the Annual Meeting and
voting in person (attendance at the Annual Meeting will not, by itself,
revoke a proxy).
If your shares are held in a
brokerage account or by a broker, bank, or other nominee, you should
follow the instructions provided by your broker, bank, or other
nominee.
Only the latest validly executed proxy that you submit will be
counted. |
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|
2015 Annual Meeting of Stockholders |
Table of Contents
QUESTIONS AND ANSWERS
Q: |
How are votes
counted? |
A: |
You may vote FOR,
AGAINST, or ABSTAIN with respect to each of the director nominees. If
you elect to abstain from voting on the election of directors, the
abstention will not have any effect on the election of directors. In
tabulating the voting results for the election of directors, only FOR
and AGAINST votes are counted. |
|
|
|
You may vote FOR, AGAINST, or
ABSTAIN with respect to: |
|
|
● |
the proposal to approve, on an advisory basis,
the compensation of our named executive officers; |
● |
the proposal to approve the material terms,
including the performance goals, of the amended and restated eBay
Incentive Plan; |
● |
the ratification of the appointment of
PricewaterhouseCoopers LLP as our independent auditors;
and |
● |
the stockholder proposals
regarding stockholder action by written consent without a meeting,
stockholder proxy access, and gender pay, respectively. |
|
|
|
If you elect to abstain from
voting on any of these proposals, the abstention will have the same effect
as an AGAINST vote with respect to such proposal.
If you sign and return your
accompanying proxy card without giving specific voting instructions, your
shares will be voted as recommended by our Board and in accordance with
the discretion of the persons named on the accompanying proxy card the
respect to any other matters to be voted upon at the Annual Meeting. If
you are a beneficial holder and do not return a voting instruction form,
your broker may not vote on any of the matters to be presented at the
Annual Meeting. |
|
|
Q: |
Who will count the votes? |
A: |
A representative of Broadridge
Financial Solutions, Inc. will tabulate the votes and act as the inspector
of election. |
|
Q: |
What is the quorum
requirement for the Annual Meeting? |
A: |
The quorum requirement
for holding the Annual Meeting and transacting business is a majority of
the outstanding shares entitled to be voted at the Annual Meeting. The
shares may be present in person or represented by proxy at the Annual
Meeting. Abstentions and broker non-votes are
counted as present for the purpose of determining the presence of a
quorum. |
|
|
Q: |
What is the
voting requirement to approve each of the proposals? |
A: |
The following chart
describes the proposals to be considered at the Annual Meeting, the vote
required to elect directors to the eBay Board of Directors and to adopt
each of the other proposals, and the manner in which votes will be
counted. Shares voted ABSTAIN and shares not represented at the meeting
have no effect on the election of directors. For each of the other
proposals, abstentions have the same effect as AGAINST votes. If you are
a beneficial holder and do not provide specific
voting instructions to your broker, the organization that holds your
shares will not be authorized to vote your shares, which would result in
broker non-votes, on proposals other than the ratification of the
selection of PriceWaterhouseCoopers LLP as our independent registered
public accounting firm for 2015. Accordingly, we encourage you to vote
promptly, even if you plan to attend the annual
meeting. |
investor.ebayinc.com 97
Table of Contents
QUESTIONS AND ANSWERS
|
|
|
|
|
|
|
|
|
|
|
|
PROPOSAL |
|
VOTING OPTIONS |
|
VOTE REQUIRED TO ADOPT THE PROPOSAL |
|
EFFECT OF ABSTENTIONS |
|
EFFECT OF
BROKER NON-VOTES* |
|
|
Election
of 15 directors to hold office until our 2016 Annual Meeting of Stockholders |
|
For, against, or abstain on
each nominee |
|
A nominee for Director will be elected if the votes cast
for such nominee exceed the votes cast against such nominee |
|
No effect |
|
No effect |
|
|
Advisory vote to approve compensation of
our named executive officers |
|
For, against, or abstain |
|
The affirmative vote of a majority of the shares of
common stock represented at the annual meeting and entitled to vote
thereon. |
|
Treated as votes against |
|
No effect |
|
|
Material terms, including
the performance goals, of the amendment and restatement of the
eBay Incentive Plan |
|
For, against, or abstain |
|
The affirmative vote of a majority of the shares of
common stock represented at the annual meeting and entitled to vote
thereon. |
|
Treated as votes against |
|
No effect |
|
|
Ratification
of PricewaterhouseCoopers LLP as our independent
auditors for
2015 |
|
For, against, or abstain |
|
The affirmative vote of a majority of the shares of
common stock represented at the annual meeting and entitled to vote
thereon. |
|
Treated as votes against |
|
Brokers have discretion to
vote |
|
|
Three stockholder
proposals |
|
For, against,
or abstain |
|
The affirmative vote of a majority of the shares of
common stock represented at the annual meeting and entitled to vote
thereon. |
|
Treated as votes against |
|
No effect |
|
|
* A broker non-vote occurs when
shares held by a broker, bank, or other nominee in street name for a
beneficial owner are not voted with respect to a particular proposal
because the broker, bank, or other nominee (1) has not received voting
instructions from the beneficial owner and (2) lacks discretionary voting
power to vote those shares with respect to that particular
proposal. |
|
Q: |
What happens if a nominee who is duly nominated does
not receive a majority vote? |
A: |
Each current director
who is standing for re-election at the Annual Meeting has tendered an
irrevocable resignation from the Board that will become effective if (1)
the election is uncontested and (2) the Corporate Governance and
Nominating Committee or another committee of the Board comprised of
independent directors determines to accept such resignation after the
director fails to receive a majority of votes cast. This determination
will be made within 90 days of the Annual Meeting and will be publicly
reported promptly after it is made. |
|
Q: |
What does it
mean if I receive more than one proxy card or voting instruction
form? |
A: |
It generally means
your shares are registered differently or are in more than one account.
Please provide voting instructions for each proxy card or, if you vote via
the Internet or by telephone, vote once for each proxy card you receive to
ensure that all of your shares are voted. |
|
Q: |
Where can I find the
voting results of the Annual Meeting? |
A: |
We will publish the
voting results in a Current Report on Form 8-K subsequent to the Annual
Meeting. |
|
Q: |
Who will bear
the cost of soliciting votes for the Annual Meeting? |
A: |
eBay will pay the
entire cost of preparing, assembling, printing, mailing, and distributing
these proxy materials. eBay will also bear the cost of soliciting proxies
on behalf of the eBay Board. eBay will provide copies of these proxy
materials to banks, brokerage houses, fiduciaries, and custodians holding
in their names shares of our common stock beneficially owned by others so
that they may forward these proxy materials to the beneficial owners. eBay
has retained the services of D.F. King & Co., Inc., a professional
proxy solicitation firm, to aid in the
solicitation of proxies. eBay expects that it will pay D.F. King its
customary fees, estimated not to exceed approximately $17,500 in the
aggregate, plus reasonable out-of-pocket expenses incurred in the process
of soliciting proxies. eBay has agreed to indemnify D.F. King against
certain liabilities relating to or arising out of their engagement. In
addition, eBay may reimburse brokerage firms and other persons
representing beneficial owners of shares for their expenses in forwarding
solicitation materials to such beneficial
owners. |
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Table of Contents
QUESTIONS AND ANSWERS
|
Solicitations may also be made by
personal interview, mail, telephone, facsimile, email, Twitter, other
electronic channels of communication, in particular LinkedIn, eBays
investor relations website, other eBay-hosted websites and blogs,
or otherwise by directors, officers, and
other employees of eBay, but eBay will not additionally compensate its
directors, officers, or other employees for these
services. |
Q: |
May I propose actions for consideration at next years
Annual Meeting or nominate individuals to serve as
directors? |
A: |
You may submit proposals for
consideration at future annual stockholder meetings. To be considered for
inclusion in the proxy materials for our 2016 Annual Meeting of
Stockholders, your proposal must be received by our Corporate Secretary at
our principal executive office no later than November 24, 2015. Your
proposal must comply with the procedures and requirements set forth in
Rule 14a-8 under the Securities Exchange Act of 1934, as amended. Your
proposal should be sent via registered, certified or express mail to our
Corporate Secretary at our principal executive office (2065 Hamilton
Avenue, San Jose, California 95125); no facsimile submissions will be
accepted. A stockholder proposal or a nomination for director that is
received after this date will not be included in our proxy statement and
proxy card, but will otherwise be considered at the 2016 Annual Meeting of
Stockholders so long as it is submitted to our
Corporate Secretary at our principal executive office no earlier than
January 1, 2016 and no later than February 1, 2016 and otherwise in
accordance with our Bylaws. We advise you to review our Bylaws, which
contain these and other requirements with respect to advance notice of
stockholder proposals and director nominations, including certain
information that must be included concerning the stockholder and each
proposal and nominee. Our Bylaws were filed with the SEC on Form 8-K on
January 7, 2015, and can be viewed by visiting our investor relations
website at http://investor.ebayinc.com/sec.cfm. You may also obtain a copy
by writing to our Corporate Secretary at our principal executive office
(2065 Hamilton Avenue, San Jose, California
95125). |
Q: |
How can I get electronic
access to the Proxy Statement and Annual Report? |
A: |
This proxy statement and our 2014
Annual Report may be viewed online on our investor relations website at
http://investor.ebayinc.com/annuals.cfm. You can also elect to receive an
email that will provide an electronic link to future annual reports and
proxy statements rather than receiving paper copies of these documents.
Choosing to receive your proxy materials electronically will save us the
cost of printing and mailing documents to you. You can choose to receive
future proxy materials electronically by visiting our investor relations
website at http://investor.ebayinc.com/annuals.cfm. If you choose to receive future proxy materials electronically,
you will receive an email next year with instructions containing a link to
those materials and a link to the proxy voting site. Your choice to
receive proxy materials electronically will remain in effect until you
contact eBay Investor Relations and tell us otherwise. You may visit our
investor relations website at http://investor.ebayinc.com or contact eBay
Investor Relations by mail at 2065 Hamilton Avenue, San Jose, California
95125 or by telephone at (408) 376-7493. |
Q: |
How do I obtain a separate set
of proxy materials if I share an address with other
stockholders? |
A: |
To reduce expenses, in some
cases, we are delivering one set of proxy materials to certain
stockholders who share an address, unless otherwise requested. A separate
proxy card is included in the proxy materials for each of these
stockholders. If you reside at such an address and wish to receive a
separate copy of the proxy materials, including our annual report, you may contact eBay Investor Relations at the
website, address, or phone number in the previous paragraph. You may also
contact eBay Investor Relations if you would like to receive separate
proxy materials in the future or if you are receiving multiple copies of
our proxy materials and would like to receive only one copy in the
future. |
Q: |
How can I obtain an additional proxy card or voting
instruction form? |
A: |
If you lose,
misplace, or otherwise need to obtain a proxy card or voting instruction
form and: |
● |
you are a stockholder of record,
contact eBay Investor Relations by mail at 2065 Hamilton Avenue, San Jose,
California 95125 or by telephone at (408) 376-7493; or |
● |
you are the beneficial owner of
shares held indirectly through a broker, bank, or other nominee, contact
your account representative at that
organization. |
investor.ebayinc.com 99
Table of Contents
OTHER
MATTERS
The Board knows of no other matter that
will be presented for consideration at the Annual Meeting. If any other matters
are properly brought before the meeting, the persons named in the accompanying
proxy intend to vote on those matters in accordance with their best
judgment.
It is important that proxies be
returned promptly. Stockholders are urged to vote via the Internet or by
telephone by following the instructions in the accompanying proxy card or voting
instruction form or to complete and mail the accompanying proxy card or voting
instruction form in the accompanying pre-paid envelope.
By Order of the Board of
Directors
Michael R.
Jacobson
Secretary
March 23, 2015
Important Notice Regarding the
Availability of Proxy Materials for the Annual Meeting of Stockholders to Be
Held on May 1, 2015.
Copies of this proxy statement and
of our annual report for the year ended December 31, 2014 are available by
visiting our investor relations website at
http://investor.ebayinc.com/annuals.cfm.
You may also obtain such copies free
of charge by making an online request by visiting our investor relations website
at http://investor.ebayinc.com/printed-materials.cfm, by contacting eBay
Investor Relations by mail at 2065 Hamilton Avenue, San Jose, California 95125
or by telephone at 408-376-7493.
100 |
|
2015 Annual Meeting of
Stockholders |
Table of Contents
APPENDIX
A
AMENDED AND RESTATED EBAY INCENTIVE PLAN
The following Appendix A presents a
marked version of the amendment and restatement of our eBay Incentive Plan (the
Plan), subject to the approval of our stockholders. The marked version shows
all of the differences between the version of the Plan approved by stockholders
in April 2010 and the version proposed to be voted on at the 2015 Annual
Meeting.
EBAY INCENTIVE PLAN
Initial Stockholder Approval on June 23,
2005
Amendment and Restatement adopted by the
Compensation Committee of the
Board of Directors on February 19, 2015March
14, 2010
Stockholder Approval of Amendment and Restatement on
[_____]
1. Purpose.
The eBay Incentive Plan is an element
of eBays overall compensation strategy to align employee compensation with
eBays business objectives, strategy, and performance. The Plan is designed to
reward eBays employees for delivering measurable results. The purpose of the
Plan is to align compensation with quarterly and annual performance and to
enable eBay to attract, retain, and reward highly qualified individuals who
contribute to eBays success and motivate them to enhance the value of the
Company.
2.
Definitions.
(a) Board means eBays
Board of Directors.
(b) Code means the
Internal Revenue Code of 1986, as amended, or the corresponding provisions of
any subsequent federal internal revenue law.
(c) Committee means the
Compensation Committee of eBays Board of Directors (and any committee to which
the Compensation Committee has delegated its authority as set forth in Section
3(b) hereof); in any event the Committee shall be comprised of not less than two
directors of the Company, each of whom shall qualify in all respects as an
outside director for purposes of Section 162(m) of the Code.
(d) eBay or Company means eBay Inc. or any corporation or business entity of
which eBay (i) directly or indirectly has an ownership interest of 50% or more,
or (ii) has a right to elect or appoint 50% or more of the board of directors or
other governing body.
(e) Eligible Employee
means all active regular full-time and part-time employees who are notified by
the Company are eligible to participate in the Plan.
(f) Incentive Award means
any cash or equity incentive payment made under the Plan.
(g) Performance
Period means the period in which
performance is measured for which Incentive Awards are paid, as determined by
the Committee.
(h) Plan means this plan,
which shall be known as the eBay Incentive Plan or eIP.
(i) Plan Year means the calendar
year.
3.
Administration.
(a) The Plan shall be administered by the Committee. The Committee shall
have full power and authority to:
(i) interpret, construe, and administer all questions of policy and
expediency pertaining to the Plan;
(ii) adopt such rules, regulations, agreements, and instruments as it deems
necessary for its proper administration;
(iii) select Eligible Employees to receive Incentive Awards;
(iv) determine the terms of the Incentive Awards;
(v) determine the amounts subject to Incentive Awards, including the
exclusive right to establish, adjust, pay or decline to pay the Incentive Award
for each Eligible Employee, provided that the exercise of such discretion shall
not have the effect of increasing any Incentive Award that is intended to
qualify as performance-based compensation under Section 162(m) of the
Code;
investor.ebayinc.com A-1
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APPENDIX A
(vi) determine whether Incentive Awards will be granted in replacement of, or
alternatives to, any other incentive or compensation plan of eBay or an acquired
business unit;
(vii) grant waivers of Plan or Incentive Award conditions;
(viii) determine the form of payment of an Incentive Award, which may be in
cash, stock or other property as determined by the Committee;
(ix) correct any defect, supply any omission, or reconcile any inconsistency
in the Plan, or any Incentive Award or notice;
(x) take any and all actions it deems necessary or advisable for the proper
administration of the Plan;
(xi) adopt such Plan procedures, regulations, subplans and the like as deemed
necessary to enable Eligible Employees to receive awards; and
(xii) amend the Plan at any time and from time to time, provided that no
amendment to the Plan shall be effective unless approved by eBays stockholders
to the extent that such stockholder approval is required under Section 162(m) of
the Code with respect to Incentive Awards that are intended to qualify under
that Section.
(b) The Committee may delegate its authority to grant and administer
Incentive Awards to a separate committee or officer of the Company; however,
only the Committee may grant and administer Incentive Awards with are intended
to qualify as performance-based compensation under Section 162(m) of the
Code.
4.
Eligibility.
All active regular full-time and
part-time employees who are notified by the Company that they are eligible to
participate in the Plan are eligible to participate in the Plan. Except as
otherwise provided by the Committee, Participation begins January 1 or the first
full Performance Period of employment for newly hired employees. Employees
joining eBay via an acquisition during the Plan Year will generally be eligible
as of the first full Performance Period of employment unless otherwise notified
by the Company. Employees who participate in other bonus programs, such as any
sales incentive plan, are not eligible to participate in the Plan unless they
are specifically made eligible in writing by an executive officer of the
Company. In addition, the Company may, in its sole discretion, provide for a
payout under the Plan for any employee who has changed positions and, as a
result, may have been eligible to participate in the Plan and another bonus
program during a Performance Period.
5. Performance Measures and
Goals.
(a) The Compensation Committee shall establish performance measures and
goals applicable to a particular Performance Period, provided that the outcome
of the performance goals are substantially uncertain at the time such goals are
established. Under ordinary circumstances, these performance measures shall be
established within 90 days of the commencement of an annual Performance Period,
or within the period that is the first 25% of any Performance Period that is
shorter than twelve (12) months in duration.
(b) Each performance measure applicable to a Performance Period shall
identify one or more of the following criteria that are to be monitored for eBay
or any business unit during the Performance Period:
(i) trading volume;
(ii) users;
(iii) gross merchandise
volume;
(iv) total payment
volume;
(v) revenue;
(vi) operating
income;
(vii) EBITDA and/or net
earnings (either before or after interest, taxes, depreciation and
amortization);
(viii) net income (either
before or after taxes);
(ix) earnings per
share;
(x) earnings as determined
other than pursuant to United States generally accepted accounting
principles (GAAP);
(xi) multiples of price to
earnings;
(xii) multiples of
price/earnings to growth;
(xiii) return on net
assets;
(xiv) return on gross
assets;
(xv) return on
equity;
(xvi) return on invested
capital;
(xvii) cash flow (including,
but not limited to, operating cash flow and free cash
flow);
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2015 Annual Meeting of
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Table of Contents
APPENDIX A
(xviii) net or operating
margin;
(xix) economic
profit;
(xx) stock price
appreciation;
(xxi) total stockholder
return;
(xxii) employee
productivity;
(xxiii) market
share;
(xxiv) volume;
(xxv) customer satisfaction
metrics; and
(xxvi) employee
engagement/satisfaction metrics.
The measures may be described in
terms of growth, an absolute number, or relative to an external group, and may
be calculated on a pro forma basis or in accordance with Generally Accepted
Accounting Principles. The Compensation Committee may set Performance Periods
and performance goals that differ among Eligible Employees.
(c) The Committee may base performance measures and goals on one or more of
the foregoing business criteria.
6. Establishment of Target
Bonuses.
The Compensation Committee will
designate those Eligible Employees who are to be participants in the eIP for
that year and will specify the terms and conditions for the determination and
payment of an Incentive Award to each Eligible Employee. The Compensation
Committee may condition the payment of an Incentive Award upon the satisfaction
of such objective or subjective standards as it deems appropriate. Under
ordinary circumstances, these performance measures shall be established within
90 days of the commencement of a Performance Period, or within the period that
is the first 25% of any Performance Period that is shorter than twelve (12)
months in duration.
7. Incentive
Awards.
(a) Incentive Awards may be made on the basis of eBay and/or business unit
performance measures, goals, and formulas determined by the
Committee.
(b) No Eligible Employee may receive an Incentive Award of more than
$8,000,000 or an equivalent amount of equity based on the fair market value of
the Companys common stock on the date of grant in any Plan Year.
(c) As soon as practicable after the end of each Performance Period, the
Compensation Committee will certify in writing whether the stated performance
goals have been met and will determine the amount, if any, of the Incentive
Award to be paid to each Eligible Employee.
(d) In determining the Incentive Award, the Compensation Committee will
consider the target goals established at the beginning of the Plan Year or
applicable Performance Period, the degree to which the established goals were
satisfied and any other objective or subjective factors it deems appropriate.
The Committee may reduce the amount of, or eliminate altogether, any Incentive
Award that would otherwise be payable. Individuals who enter the eIP during the
Plan Year may have their awards prorated.
8. Payment of Incentive Awards.
Subject to any election duly and
validly made by an Eligible Employee with respect to the deferral of all or a
portion of his or her Incentive Award, Incentive Awards shall be paid in cash or
equity pursuant to an eBay equity-based award plan under which securities have
been registered on Form S-8 at such times and on such terms as are determined by
the Committee in its sole and absolute discretion.
9. No Right to Bonus or
Continued Employment.
(a) Neither the establishment of the Plan, the provision for or payment of
any amounts hereunder nor any action of the Company, the Board or the Committee
with respect to the Plan shall be held or construed to confer upon any
person:
(i) any legal right to receive, or any interest in, an Incentive Award or
any other benefit under the Plan, or
(ii) any legal right to continue to serve as an officer or employee of the
Company or any subsidiary or affiliate of the Company.
(b) The Company expressly reserves any and all rights to discharge any
Eligible Employee without incurring liability to any person under the Plan or
otherwise. Upon such discharge and notwithstanding any other provision hereof
and regardless of whether or not specified performance goals have been achieved
or the amount of an Incentive Award has been determined, the Company shall have
no obligation to pay any Incentive Award, unless the Committee otherwise
expressly provides by written contract or other written commitment.
investor.ebayinc.com A-3
Table of Contents
APPENDIX A
10. Withholding.
The Company shall have the right to
withhold, or require an Eligible Employee to remit to the Company, an amount
sufficient to satisfy any applicable federal, state, local or foreign
withholding tax requirements imposed with respect to the payment of any
Incentive Award.
11.
Nontransferability.
Except as expressly provided by the
Committee, the rights and benefits under the Plan are personal to an Eligible
Employee and shall not be subject to any voluntary or involuntary alienation,
assignment, pledge, transfer or other disposition.
12. Unfunded
Plan.
The Company shall have no obligation
to reserve or otherwise fund in advance any amounts that are or may in the
future become payable under the Plan. Any funds that the Company, acting in its
sole and absolute discretion, determines to reserve for future payments under
the Plan may be commingled with other funds of the Company and need not in any
way be segregated from other assets or funds held by the Company. An Eligible
Employees rights to payment under the Plan shall be limited to those of a
general creditor of the Company.
13. Adoption, Amendment,
Suspension and Termination of the PlanIncentive Awards Subject to
Clawback.
The Incentive Awards and any cash
payment, stock or other property delivered pursuant to an Incentive Award are
subject to forfeiture, recovery by the Company or other action pursuant to any
agreement evidencing an Incentive Award or any clawback or recoupment policy
which the Company may adopt from time to time, including without limitation any
such policy which the Company may be required to adopt under the Dodd-Frank Wall
Street Reform and Consumer Protection Act and implementing rules and regulations
thereunder, or as otherwise required by law.
14. Adoption, Amendment,
Suspension and Termination of the Plan.
(a) Subject to the approval of the Plan by the holders of a majority of the
Company common stock represented and voting on the proposal at the annual
meeting of Company stockholders to be held on April 29, 2010 May 1, 2015 (or any
adjournment thereof), the Plan shall be effective for Performance Periods
beginning on or after January 1, 20102015, and shall continue in effect until
the fifth anniversary of the date of such stockholder approval, unless earlier
terminated as provided below. Upon such approval of the Plan by the Companys
stockholders, all Incentive Awards awarded under the Plan on or after January 1,
20102015 shall be fully effective as if the stockholders had approved the Plan
on or before January 1, 20102015.
(b) Subject to the limitations set forth in this subsection, the Board may
at any time suspend or terminate the Plan and may amend it from time to time in
such respects as the Board may deem advisable; provided, however, that the Board
shall not amend the Plan in any of the following respects without the approval
of stockholders then sufficient to approve the Plan in the first
instance:
(i) To increase the maximum amount of Incentive Award that may be paid under
the Plan or otherwise materially increase the benefits accruing to any Eligible
Employee under the Plan;
(ii) To materially modify the requirements as to eligibility for
participation in the Plan; or
(iii) To change the material terms of the stated performance
goals.
(c) No Incentive Award may be awarded during any suspension or after
termination of the Plan, and no amendment, suspension or termination of the Plan
shall, without the consent of the person affected thereby, alter or impair any
rights or obligations under any Incentive Award previously awarded under the
Plan.
1415. Governing
Law.
The validity, interpretation and
effect of the Plan, and the rights of all persons hereunder, shall be governed
by and determined in accordance with the laws of Delaware without regard to
principles of conflict of laws.
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2015 Annual Meeting of
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Table of Contents
Table of Contents
2065
HAMILTON AVENUE
SAN JOSE, CA 95125
VOTE BY INTERNET -
www.proxyvote.com
Use the Internet to
transmit your voting instructions and for electronic delivery of information up
until 11:59 P.M. Eastern Time on April 30, 2015. Have your proxy card in hand
when you access the web site and follow the instructions to obtain your records
and to create an electronic voting instruction form.
ELECTRONIC DELIVERY OF FUTURE PROXY
MATERIALS
If you would like to reduce the
costs incurred by our company in mailing proxy materials, you can consent to
receiving all future proxy statements, proxy cards and annual reports
electronically via e-mail or the Internet. To sign up for electronic delivery,
please follow the instructions above to vote using the Internet and, when
prompted, indicate that you agree to receive or access proxy materials
electronically in future years.
VOTE BY PHONE -
1-800-690-6903
Use any touch-tone
telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time
on April 30, 2015. Have your proxy card in hand when you call and then follow
the instructions.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the
postage-paid envelope we have provided or return it to Vote Processing, c/o
Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
TO VOTE, MARK
BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: |
|
M86874-P62434
|
KEEP THIS PORTION FOR YOUR
RECORDS |
|
DETACH AND
RETURN THIS PORTION ONLY |
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND
DATED. |
EBAY INC. |
The Board of Directors
recommends that you vote "FOR" the eBay Board of Directors' nominees
below: |
|
Proposal
1 - |
Election of 15 director nominees
to hold office until our 2016 Annual Meeting of
Stockholders. |
Nominees: |
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For |
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Against |
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Abstain |
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1a. |
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Fred D.
Anderson |
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☐ |
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☐ |
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☐ |
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1b. |
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Anthony J.
Bates |
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☐ |
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☐ |
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☐ |
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1c. |
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Edward W.
Barnholt |
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☐ |
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☐ |
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☐ |
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1d. |
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Jonathan
Christodoro |
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☐ |
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☐ |
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☐ |
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1e. |
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Scott D.
Cook |
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☐ |
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☐ |
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☐ |
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1f. |
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John J.
Donahoe |
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☐ |
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☐ |
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☐ |
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1g. |
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David W.
Dorman |
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☐ |
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☐ |
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☐ |
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1h. |
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Bonnie S.
Hammer |
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☐ |
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☐ |
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☐ |
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1i. |
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Gail J.
McGovern |
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☐ |
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☐ |
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☐ |
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1j. |
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Kathleen C. Mitic |
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☐ |
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☐ |
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☐ |
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1k. |
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David M.
Moffett |
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☐ |
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☐ |
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☐ |
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1l. |
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Pierre M.
Omidyar |
|
☐ |
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☐ |
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☐ |
|
1m. |
|
Thomas J.
Tierney |
|
☐ |
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☐ |
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☐ |
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For |
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Against |
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Abstain |
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1n. Perry M. Traquina |
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☐ |
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☐ |
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☐ |
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1o. Frank
D. Yeary |
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☐ |
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☐ |
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☐ |
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The Board of
Directors recommends "FOR" proposals 2, 3 and 4 below: |
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|
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Proposal
2 |
- |
To approve, on an advisory basis, the
compensation of our named executive officers. |
|
☐ |
|
☐ |
|
☐ |
Proposal
3 |
- |
To approve the material terms,
including the performance goals, of the amendment and restatement of the
eBay Incentive Plan. |
|
☐ |
|
☐ |
|
☐ |
Proposal
4 |
- |
To ratify the appointment of
PricewaterhouseCoopers LLP as our independent auditors for our fiscal year
ending December 31, 2015. |
|
☐ |
|
☐ |
|
☐ |
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The
Board of Directors recommends "AGAINST" proposals 5, 6 and 7
below: |
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Proposal
5 |
- |
To consider a stockholder proposal
regarding stockholder action by written consent without a meeting, if
properly presented before the meeting. |
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☐ |
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☐ |
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☐ |
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Proposal
6 |
- |
To consider a stockholder proposal
regarding stockholder proxy access, if properly presented before the
meeting. |
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☐ |
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☐ |
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☐ |
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Proposal
7 |
- |
To consider a stockholder proposal
regarding gender pay, if properly presented before the meeting. |
|
☐ |
|
☐ |
|
☐ |
Please sign exactly as your
name(s) appear(s) hereon. When signing as attorney, executor,
administrator, or other fiduciary, please give full title as such. Joint
owners should each sign personally. All holders must sign. If a
corporation or partnership, please sign in full corporate or partnership
name by authorized officer. |
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Signature
[PLEASE SIGN WITHIN BOX] |
Date |
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Signature (Joint
Owners) |
Date |
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Table of Contents
Important Notice Regarding the
Availability of Proxy Materials for the Annual Meeting:
The Notice and Proxy Statement and Annual Report are available
at www.proxyvote.com.
eBay
Inc. PROXY SOLICITED BY THE BOARD OF
DIRECTORS NOTICE OF ANNUAL MEETING OF
STOCKHOLDERS TO BE HELD ON MAY 1,
2015
The undersigned hereby appoints
JOHN J. DONAHOE, ROBERT H. SWAN and MICHAEL R. JACOBSON, and each of them,
as attorneys and proxies of the undersigned, with full power of
substitution, to vote all shares of stock of eBay Inc. that the
undersigned may be entitled to vote at the Annual Meeting of Stockholders
of eBay Inc., a Delaware corporation, to be held on Friday, May 1, 2015,
at 8:00 a.m., Pacific Time, at Town Square, 2161 North First Street, San
Jose, California 95131, for the purposes listed on the reverse side and at
any and all continuations and adjournments of that meeting, with all
powers that the undersigned would possess if personally present, upon and
in respect to the instructions indicated on the reverse side, with
discretionary authority as to any and all other matters that may properly
come before the meeting.
PLEASE VOTE, SIGN, DATE AND
PROMPTLY RETURN THIS PROXY IN THE ENCLOSED RETURN ENVELOPE THAT IS POSTAGE
PREPAID IF MAILED IN THE UNITED STATES.
Continued and to be signed on reverse
side
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