UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549​

Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934

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Preliminary Proxy Statement

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

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Definitive Proxy Statement

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Definitive Additional Materials

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Soliciting Material under Rule 14a-12

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(Name of Registrant as Specified In Its Charter)​

Payment of Filing Fee (Check the appropriate box):

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Fee paid previously with preliminary materials.

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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

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April 21, 2023​

Dear DV Stockholder:

It is my pleasure to invite you to our Annual Meeting of Stockholders, taking place virtually, via live webcast on June 1, 2023, at 10:00 a.m. Eastern Time. The attached proxy statement and notice of Annual Meeting of Stockholders contain key information about the meeting’s agenda, as well as voting instructions.

We appreciate your important votes on the issues contained in this proxy statement and we urge you to read the accompanying materials regarding the matters to be voted on at the meeting and to submit your voting instructions by proxy. On behalf of our board of directors and our entire global team, thank you for your support of DV.

Best,

Mark Zagorski
Chief Executive Officer
DoubleVerify Holdings, Inc.

 

 

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

On behalf of the Board of Directors (the “Board”), I cordially invite you to attend the 2023 Annual Meeting of Stockholders (the “Annual Meeting”) of DoubleVerify Holdings, Inc. (the “Company”).

Virtual Location

You can attend the Annual Meeting live online at https://web.lumiagm.com/223761380. We have adopted this technology to expand access to the meeting, improve communications and lower the cost to our stockholders, the Company and the environment. We believe that the virtual Annual Meeting should enable increased stockholder participation from locations around the world.

Agenda

At the meeting, stockholders will consider and vote on the following matters:

1.

Proposal 1: Election of three Class II directors for a three-year term ending at the 2026 Annual Meeting of Stockholders;

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Proposal 2: A non-binding advisory vote on the frequency of future stockholder advisory votes on the compensation of our named executive officers;

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3.

Proposal 3: Ratification of the appointment of Deloitte & Touche LLP (“Deloitte”) as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2023; and

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4.

Any such other business as may properly come before the Annual Meeting or any adjournments or postponements thereof.

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The Board recommends that you vote “FOR” the election of each of the nominees named in Proposal 1 of this proxy statement (the “Proxy Statement”), to hold future stockholder advisory votes on the compensation of our named executive officers every “ONE YEAR” as described in Proposal 2 and “FOR” the ratification of the selection of Deloitte as our independent registered public accounting firm as described in Proposal 3. Information about the matters to be acted upon at the Annual Meeting is contained in the accompanying Proxy Statement.

Voting Your Shares

Stockholders of record holding shares of common stock of the Company, par value $0.001 per share (the “Shares”), as of the close of business on April 10, 2023 (the “Record Date”) are entitled to vote at the Annual Meeting.

 

 

Beneficial owners whose Shares are held at a brokerage firm or by a bank or other nominee should follow the voting instructions that they received from the nominee.

We are furnishing our proxy materials to all of our stockholders over the Internet rather than in paper form. We believe that this delivery process will lower the costs of printing and distributing our proxy materials and reduce our environmental impact, without impacting our stockholders’ timely access to this important information. Accordingly, stockholders of record at the close of business on the Record Date, April 10, 2023, will receive a Notice of Internet Availability of Proxy Materials (the “Notice”) and may vote at the Annual Meeting. Such stockholders will also receive notice of any postponements or adjournments of the meeting. The Notice is being distributed to stockholders on or about April 21, 2023.

Whether or not you plan to attend the annual meeting, please vote by Internet at your earliest convenience or complete, sign, date and return the proxy card so that your shares will be represented at the meeting. You may choose to attend the meeting virtually and cast your votes online during the meeting even if you vote by Internet or fill out and return a proxy card by mail. You may also revoke your proxy and cast your votes online during the meeting.

By Order of the Board of Directors,

Andy Grimmig
Chief Legal Officer
DoubleVerify Holdings, Inc.

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Stockholders to be Held on June 1, 2023.

The accompanying Proxy Statement, our 2022 Annual Report to Stockholders and directions on how to participate in the Annual Meeting are available at https://ir.doubleverify.com/sec-filings/annual-report-proxy/.

 

 

Certain Important Terms

As used in this Proxy Statement, “we,” “us,” “our” and the “Company” mean DoubleVerify Holdings, Inc. and its consolidated subsidiaries, unless the context refers only to DoubleVerify Holdings, Inc. as a corporate entity. We also use the following terms:

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“2017 Equity Plan” means our 2017 Omnibus Equity Incentive Plan

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“2021 Equity Plan” means our 2021 Omnibus Equity Incentive Plan

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“IPO” means our initial public offering

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“Providence” means Providence Equity Partners L.L.C., a Delaware limited liability company, and its affiliated funds, certain of which are our stockholders

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“Providence Investor” means Providence VII U.S. Holdings L.P., a Delaware limited partnership

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“SEC” means the U.S. Securities and Exchange Commission

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“DoubleVerify” or “DV” means DoubleVerify Holdings, Inc., a Delaware corporation, without its consolidated subsidiaries

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Table of Contents

 

 

 

 

PROXY SUMMARY

This section summarizes important information contained in this Proxy Statement and in our 2022 Annual Report to Stockholders (the “Annual Report”), but does not contain all the information that you should consider when casting your vote. Please review the entire Proxy Statement and the Annual Report carefully before voting.

Proposals for Your Vote

Board of Directors Composition

The fundamental duty of the Board is to oversee the Company for the benefit of our stockholders and other stakeholders. It is essential that the Board be composed of directors who are qualified to oversee the development and execution by our management of our business strategies. The Board seeks directors who possess a broad range of skills, expertise and perspectives. The composition of the Board, as reflected in the tables and charts below, demonstrates our commitment to these principles. Our Second Amended and Restated Certificate of Incorporation (the “Certificate of Incorporation”) provides for a classified Board divided into three classes of directors. The average tenure of a director on our Board is 3.47 years.

 

 

Board Composition Summary

Corporate Governance Highlights

Corporate Governance Profile

We have the following structures of the Board that we believe contribute to effective corporate governance:

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Majority independent Board

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Fully independent Audit Committee

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Fully independent Compensation Committee

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Fully independent Nominating and Governance Committee

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Board Skills, Experience and Diversity

The Board seeks directors who possess a broad range of skills, experience, expertise and perspectives that position the Board to effectively oversee the Company’s strategies and risks. Our directors were carefully selected for their mix of skills and expertise, which align with, and facilitate effective oversight of, the Company’s strategy. The matrix below summarizes what our Board believes are the key areas of substantive skills and experience. The following matrix does not encompass all experience, qualifications, attributes or skills of our Board. Our directors possess substantive skills and experience in the following key areas, which are relevant to the Board’s oversight of the Company, including the technology and software industries; senior management; corporate finance, audit and accounting; public company board service; operations; and strategic business planning.

 

 

We also view it as imperative to have a Board that represents diversity of ethnicity, gender, sexual orientation, cultural background and professional experience. The Nominating and Corporate Governance Committee of the Board (the “Nominating and Governance Committee”) believes that diversity is important because different points of view and varied Board member backgrounds and practical experience can contribute to the quality of the Board’s operations and decision-making. The Nominating and Governance Committee assesses board diversity, among other things, on an ongoing basis. The following table sets forth diversity information as self-reported by the current members of our Board.

 

 

PROPOSAL 1: Election of Directors

The Board has nominated each of R. Davis Noell, Lucy Stamell Dobrin and Teri L. List for election at the Annual Meeting to serve as Class II directors. The Board believes that each of these nominees continues to have the necessary skills and experience to effectively oversee our business. Each of these nominees currently serves as a director, and each has consented to being named in this Proxy Statement and has agreed to serve if elected.

The Board recommends that you vote FOR the election of each of R. Davis Noell, Lucy Stamell Dobrin and Teri L. List.

If elected, each of these individuals will serve as a Class II director until the 2026 Annual Meeting of Stockholders and until such director’s successor has been elected and qualified, or until such director’s earlier death, resignation or removal. The relevant experiences, qualifications, attributes or skills of each nominee that led the Board to recommend the above persons as a nominee for director are described in “Board and Corporate Governance Practices—Board Composition.”

Unless otherwise instructed, the proxyholders will vote proxies FOR the nominees of the Board. The Board has no reason to believe that any of its nominees will be unable or unwilling to serve if elected.

However, if any of the Board’s nominees should become unable for any reason or unwilling for good cause to serve as a director at any point before the Annual Meeting or any adjournment or postponement of the meeting, the Board may reduce the size of the Board or nominate another candidate for election as a Class I director. If the Board nominates a new candidate, unless otherwise provided, the form of proxy attached to this Proxy Statement permits the proxyholders to use their discretion to vote for that candidate.

THE BOARD RECOMMENDS THAT YOU VOTE FOR THE ELECTION OF EACH OF
R. DAVIS NOELL, LUCY STAMELL DOBRIN AND TERI L. LIST.

 

 

PROPOSAL 2: Advisory Vote on the Frequency of Future Stockholder Advisory Votes on the Compensation of our Named Executive Officers

At least every six years, we are required to provide our stockholders with the opportunity to indicate their preference regarding how frequently our stockholders vote to approve, on an advisory and non-binding basis, the compensation of our named executive officers as a whole (“Say-on-Pay”). Accordingly, we are asking our stockholders to indicate whether they would prefer this advisory vote every one, two or three years. Alternatively, stockholders may abstain from casting a vote.

After considering the benefits and consequences of each frequency, the Board recommends the Say-on-Pay vote be submitted to stockholders every “one year.” In formulating its recommendation, among other things, the Board considered that an annual advisory vote will allow stockholders to provide more meaningful and frequent input on our compensation philosophy, policies and practices.

Approving the frequency of future Say-on-Pay votes requires the affirmative vote of a majority of the voting power of the Shares present virtually or by proxy during the Annual Meeting and entitled to vote thereon. However, if no option receives a majority of votes cast in person or by proxy, the option among one, two or three years that receives the highest number of votes cast at the Annual Meeting by stockholders entitled to vote thereon will be deemed to be the frequency preferred by our stockholders. Abstentions are considered shares present and entitled to vote on this proposal and, thus, will have the same effect as a vote “AGAINST” each of the proposed voting frequencies. Broker non-votes will have no effect on the outcome of this proposal.

While the Board believes that its recommendation is appropriate at this time, our stockholders are not voting to approve or disapprove that recommendation, but are instead asked to indicate their preference, on an advisory basis, as to whether non-binding future stockholder advisory votes on the compensation of our named executive officers should be held every one, two or three years.

As an advisory vote, the result of this proposal is non-binding. Although the vote is non-binding, the Board and Compensation Committee value the opinions of our stockholders in this matter and, to the extent there is any significant vote in favor of one time period over another, will consider the outcome of this vote when making future decisions regarding the frequency of holding future stockholder advisory votes on the compensation of our named executive officers.

THE BOARD RECOMMENDS THAT YOU VOTE TO HOLD FUTURE STOCKHOLDER ADVISORY VOTES ON THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS EVERY “ONE YEAR.”

 

 

PROPOSAL 3: Ratification of Appointment of Independent Registered Public Accounting Firm

The Audit Committee of the Board (the “Audit Committee”) is responsible for the appointment, compensation, retention and oversight of our independent registered public accounting firm (“independent auditor”) and annually evaluates the independent auditor’s qualifications, performance and independence.

The Audit Committee has appointed Deloitte & Touche LLP (“Deloitte”) as our independent auditor for the fiscal year ending December 31, 2023. Deloitte has served as the independent auditor for the Company since 2019. Deloitte’s background knowledge of the Company, combined with its industry expertise, has enabled it to carry out its audits of our financial statements with effectiveness and efficiency. The members of the Audit Committee believe that the continued retention of Deloitte as our independent auditor is in the best interest of the Company and its stockholders. In determining whether to reappoint Deloitte, the Audit Committee considered factors such as:

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Deloitte’s independence and objectivity;

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Deloitte’s and the lead engagement partner’s capability and expertise in handling the breadth and complexity of our operations;

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Deloitte’s tenure as independent auditor for the Company;

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historical and recent performance of Deloitte, including the extent and quality of communications with members of the Audit Committee; and

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the impact of a change in the independent auditor.

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The Audit Committee is involved in the selection of Deloitte’s lead engagement partner and ensures that the lead partner’s engagement is limited to no more than five consecutive years of service in that role (in accordance with SEC rules).

We request that our stockholders ratify the appointment of Deloitte as our independent auditor for fiscal year 2023. If the stockholders do not ratify such appointment, the Audit Committee will take note and may reconsider its retention of Deloitte. If such appointment is ratified, the Audit Committee will still have the discretion to replace Deloitte at any time during the year. Representatives of Deloitte are expected to be present at the Annual Meeting and will have the opportunity to make a statement. They will also be available to respond to questions from stockholders regarding their audit of our consolidated financial statements for fiscal year 2022.

THE BOARD RECOMMENDS THAT YOU VOTE FOR THE RATIFICATION OF THE APPOINTMENT OF DELOITTE AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR FISCAL YEAR 2023.

 

 

Fees Paid to Deloitte

The following table presents, for the years ended December 31, 2021 and 2022, fees for professional services rendered by Deloitte for the audit of our annual financial statements, audit-related services, tax services and all other services. In accordance with the SEC’s definitions and rules, “audit fees” are fees we paid Deloitte for professional services for the audit of our Consolidated Financial Statements included in our Annual Report on Form 10-K, review of the financial statements included in our quarterly reports on Form 10-Q and services that are normally provided by Deloitte in connection with statutory and regulatory filings or engagements; “audit-related fees” are fees for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements; “tax fees” are fees for tax compliance, tax advice and tax planning; and “all other fees” are fees for any products and services provided by Deloitte not included in the first three categories.

(1)

Audit fees include fees related to the audits or reviews of the Company’s financial statements and other services associated with regulatory filings.

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(2)

Includes fees for professional services provided in connection with our secondary public offerings, including comfort letters, consents, and review of documents filed with the SEC and with our Registration Statement on Form S-3.

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(3)

Includes services rendered in connection with tax planning, compliance and tax return preparation.

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(4)

Includes subscription fees of Deloitte software.

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Pre-Approval Policies and Procedures

Pursuant to its charter, the Audit Committee is responsible for engaging, setting compensation for and reviewing the performance of the independent registered public accounting firm. As such, the Audit Committee approves all audit and permitted non-audit related services that our independent registered public accounting firm provides to us prior to each engagement pursuant to procedures it has established. All of the services relating to the fees described in the table above were pre-approved by our Audit Committee in accordance with the procedures described herein.

Audit Committee Report

The Audit Committee is organized under a charter that is reviewed annually by the Audit Committee. Pursuant to the Audit Committee charter, our management is responsible for the preparation, presentation and integrity of our financial statements, the application of accounting and financial reporting principles and our internal controls and procedures designed to assure compliance with accounting standards and applicable laws and regulations. The independent registered public accounting firm is responsible for auditing our financial statements and expressing an opinion as to their conformity with accounting principles generally accepted in the United States of America.

In the performance of its oversight function, the Audit Committee reviewed and discussed the audited financial statements of the Company with management and with the independent registered public accounting firm. The Audit Committee also discussed with the independent registered public accounting firm the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (“PCAOB”) and the SEC. In addition, the Audit Committee received the written disclosures and the letter from the independent registered public accounting firm required by applicable requirements of the PCAOB regarding the independent registered public accounting firm’s communications with the Audit Committee concerning independence, and discussed with the independent registered public accounting firm their independence.

 

 

Based upon the review and discussion described above, the Audit Committee recommended to the Board that the audited financial statements of the Company be included in the Annual Report on Form 10-K for the fiscal year ended December 31, 2022 filed with the SEC.

Submitted by the Audit Committee of the Company’s Board of Directors:

Teri L. List (Chairperson)
Rosie Perez
Kelli Turner

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

 

 

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS

The following table sets forth certain information as of April 10, 2023 with respect to the beneficial ownership of the Shares by (i) each person known to own beneficially more than five percent of the Shares; (ii) each of our directors and director nominees; (iii) each of our named executive officers; and (iv) all of our current executive officers, directors and director nominees as a group.

The amounts and percentages of shares beneficially owned are reported on the basis of regulations of the SEC governing the determination of beneficial ownership of securities. Under SEC rules, a person is deemed to be a “beneficial owner” of a security if that person has or shares voting power or investment power, which includes the power to dispose of or to direct the disposition of such security. A person is also deemed to be a beneficial owner of any securities of which that person has a right to acquire beneficial ownership within 60 days. Securities that can be so acquired are deemed to be outstanding for purposes of computing such person’s ownership percentage, but not for purposes of computing any other person’s percentage. Under these rules, more than one person may be deemed to be a beneficial owner of the same securities, and a person may be deemed to be a beneficial owner of securities as to which such person has no economic interest.

Percentage computations are based on 166,163,495 Shares outstanding as of April 10, 2023. Except as otherwise indicated in the footnotes to the table, each of the beneficial owners listed has, to our knowledge, sole voting and investment power with respect to the indicated Shares. Unless otherwise set forth in the footnotes to the table, the address for each listed stockholder is 462 Broadway, New York, NY 10013.

*

Less than one percent.

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(1)

Represents Shares held by Providence VII U.S. Holdings L.P. Providence VII U.S. Holdings L.P.’s general partner is Providence Equity GP VII-A L.P., and limited partners are Providence VII Global Holdings L.P. and Providence Equity Partners VII-A L.P. Providence VII Global Holdings L.P.’s general partner is Providence Equity GP VII-A L.P., and limited partner is Providence Equity Partners VII L.P. Providence Equity Partners VII L.P.’s general partner is Providence Equity GP VII L.P., whose general

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partner is PEP VII International Ltd. The sole shareholder of PEP VII International Ltd. is Providence Fund Holdco (Domestic ECI) L.P., whose general partner is Providence Managing Member L.L.C. Providence Equity Partners VII-A L.P.’s general partner is Providence Equity GP VII-A L.P., whose general partner is PEP VII-A International Ltd. The sole shareholder of PEP VII-A International Ltd. is Providence Fund Holdco (International) L.P., whose general partner is Providence Holdco (International) GP Ltd. Each of Providence Managing Member L.L.C. and Providence Holdco (International) GP Ltd. is controlled by Jonathan M. Nelson, R. Davis Noell, J. David Phillips, Karim A. Tabet, Andrew A. Tisdale and Michael J. Dominguez. Investment and voting decisions with respect to shares held by Providence VII U.S. Holdings L.P. are made by Providence Equity GP VII-A L.P. Each of Jonathan M. Nelson, R. Davis Noell, J. David Phillips, Karim A. Tabet, Andrew A. Tisdale and Michael J. Dominguez expressly disclaims beneficial ownership of the Shares held by Providence VII U.S. Holdings L.P. The address for each of Providence VII U.S. Holdings L.P., Providence Equity GP VII-A L.P., Jonathan M. Nelson, R. Davis Noell, J. David Phillips, Karim A. Tabet, Andrew A. Tisdale and Michael J. Dominguez is c/o Providence Equity Partners L.L.C., 50 Kennedy Plaza, 18th Floor, Providence, Rhode Island 02903. Excludes 340,464 Shares held by Providence Butternut Co-Investment L.P.

(2)

The number of Shares is based on the Schedule 13G filed February 3, 2023 by BlackRock, Inc. The address for BlackRock, Inc. is 55 East 52nd Street, New York, NY 10055.

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(3)

Includes Shares that current directors and executive officers have the right to acquire prior to June 9, 2023 through the exercise of stock options and/or vesting of restricted stock units: Mark Zagorski has the right to acquire 1,449,638 Shares; Nicola Allais has the right to acquire 1,479,434 Shares; Julie Eddleman has the right to acquire 42,823 Shares; Andy Grimmig has the right to acquire 660,781 Shares; Laura B. Desmond (through the Laura B. Desmond Revocable Trust, for which Ms. Desmond is trustee) has the right to acquire 916,329 Shares; and each of Rosie Perez, Teri L. List and Scott Wagner (through Hilltopper LLC, which is wholly-owned by Mr. Wagner) has the right to acquire 9,183 Shares. Beneficial ownership also includes 9,375 vested restricted stock units held by Mr. Zagorski, which will settle in Shares following Mr. Zagorski’s separation from service; 2,500 vested restricted stock units held by Mr. Grimmig, which will settle in Shares on the earlier of (i) March 2024 and (ii) Mr. Grimmig’s separation from service; 9,183 vested restricted stock units held by Ms. Desmond, which will settle in Shares on the earlier of (i) March 2027 and (ii) Ms. Desmond’s end of service as a Director (in which case the shares will be delivered in five annual installments commencing in the year of termination) and 9,183 vested restricted stock units held by Ms. Turner, which will settle in Shares following Ms. Turner’s end of service as a Director (in which case the shares will be delivered in five annual installments commencing in the year of termination). All current directors and executive officers as a group have the right to acquire 4,606,795 Shares prior to June 9, 2023 through the exercise of stock options and/or vesting of restricted stock units.

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(4)

Represents Shares held by the Laura B. Desmond Revocable Trust, for which Laura B. Desmond is trustee.

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(5)

Does not include Shares held by Providence Equity Partners L.L.C. managed funds. R. Davis Noell is Senior Managing Director and Co-Head of North America, Lucy Stamell Dobrin is a Managing Director and Joshua L. Selip is a Principal of Providence Equity Partners L.L.C. Each of them expressly disclaims beneficial ownership of the Shares held by the Providence Equity Partners L.L.C. managed funds. The address for each of R. Davis Noell, Lucy Stamell Dobrin and Joshua L. Selip is c/o Providence Equity Partners L.L.C., 50 Kennedy Plaza, 18th Floor, Providence, Rhode Island 02903.

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(6)

Represents Shares held by Hilltopper LLC, which is wholly-owned by Mr. Wagner.

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EXECUTIVE AND DIRECTOR COMPENSATION

Compensation Discussion and Analysis

Introduction

This Compensation Discussion and Analysis provides information regarding the 2022 compensation program for our “Named Executive Officers” or “NEOs”. For 2022, our NEOs were:

This Compensation Discussion and Analysis describes material elements of our executive compensation program during 2022. It also provides an overview of our executive compensation philosophy, including our principal compensation policies and practices. Finally, it analyzes how and why the Compensation Committee of our Board (the “Compensation Committee”) and our Board arrived at the specific compensation decisions for our NEOs in 2022 and discusses the key factors that were considered in determining their compensation.

Executive Summary

Who We Are

We are a leading software platform for digital media measurement and analytics. Our mission is to create stronger, safer, more secure digital transactions that drive optimal outcomes for global advertisers. Through our software platform and the metrics it provides, we help preserve the fair value exchange between buyers and sellers of digital media.

2022 Business Highlights

2022 showed strong financial performance marked by significant achievements across our business. 2022 business highlights included the following:

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Total revenue of $452.4 million, an increase of 36% from 2021.

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$94.9 million of net cash from operating activities.

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Adjusted EBITDA of $141.6 million, an increase of 29% from 2021.

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5.5 trillion media transactions measured (MTM).

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2022 Executive Compensation Highlights

Based on our overall operating environment and these results, our Board took the following key actions with respect to the compensation of our NEOs for and during 2022:

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Base Salaries. In December 2021, approved annual base salary increases, effective January 1, 2022, of 3% for our CEO and ranging from 3% to 4% for our other NEOs, except for our former Chief Operating Officer.

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Annual Cash Bonuses. For our NEOs, approved annual cash bonus awards which, in the aggregate, represented approximately 112% of their target annual cash bonus opportunities as calculated pursuant to the terms of the DoubleVerify Annual Bonus Plan (the “Bonus Plan”), except for our former Chief Operating Officer.

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Long-Term Incentive Compensation. Granted long-term incentive compensation opportunities in the form of stock options and restricted stock unit (“RSU”) awards with grant date fair values

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ranging in the aggregate from approximately $2,000,000 to approximately $3,250,000 for our NEOs other than our CEO, and a stock option and an RSU award for our CEO with an aggregate grant date fair value of approximately $7,500,000.

Relationship Between Pay and Performance

We design our executive compensation program to align the attraction, motivation, and retention of our executive officers, including our NEOs, with the goal of promoting the interests of our stockholders. In an effort to achieve this balance and to motivate and reward individual initiative and effort, we seek to ensure that a meaningful portion of our executive officers’ target total annual direct compensation opportunity is both “at-risk” and variable in nature.

We emphasize variable compensation that appropriately rewards our executive officers through the following two principal compensation elements:

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First, our executives participate in our Bonus Plan, which provides the opportunity for cash bonus awards if our executive officers produce short-term results aligned with long-term stockholder value, such as revenue and Adjusted EBITDA, that meet or exceed certain business and financial objectives set by the Committee, after considering the Company’s 2022 annual operating plan. For information as to how we calculate Adjusted EBITDA, which is a non-GAAP financial measure, please refer to page 57 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2022.

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Second, we grant both stock options and RSU awards, which in the aggregate comprise a majority of our executive officers’ target total direct compensation opportunities. The value of these equity awards depends entirely on the value of our common stock, and coupled with the multi-year vesting periods that apply to them, are intended to incentivize our executive officers to build sustainable long-term value for the benefit of our stockholders.

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These variable pay elements ensure that, each year, a substantial portion of our executive officers’ target total direct compensation is contingent (rather than fixed) in nature, with the amounts ultimately payable subject to variability above or below target levels commensurate with our actual performance.

We believe that these compensation elements provide balanced incentives for our executive officers to meet our business objectives and drive long-term growth. To monitor our faithfulness to our compensation philosophy, the Compensation Committee regularly evaluates the relationship between the reported values of the equity awards granted to our executive officers, the amount of compensation realizable (and, ultimately, realized) from such awards in subsequent years, and our performance over this period.

Executive Compensation Policies and Practices

We endeavor to maintain sound governance standards consistent with our executive compensation policies and practices. The Compensation Committee reviews our executive compensation program on an annual basis to ensure consistency with our short-term and long-term goals given the dynamic nature of our business and the market in which we compete for executive talent. The following summarizes our executive compensation-related policies and practices that were in effect during 2022:

 

 

 

 

Stockholder Advisory Vote on Frequency of Future Votes on Our Named Executive Officer Compensation

At the Annual Meeting of Stockholders to which this Proxy Statement relates, we will be conducting a non-binding stockholder advisory vote on the frequency of future non-binding stockholder advisory votes on the compensation of our NEOs (commonly known as a “Say-on-Pay” vote). See “Proposal 2.” Our stockholders will be given the opportunity to express a preference for holding future Say-on-Pay votes on an annual, biennial, or triennial basis.

We value the opinions of our stockholders, and our Board and the Compensation Committee will consider the outcome of our future Say-on-Pay votes, as well as feedback received throughout the year, when making compensation decisions for our executive officers.

Executive Compensation Philosophy and Objectives

Our executive compensation program is guided by our overarching philosophy of paying for performance. We strive to provide an executive compensation program that is competitive, rewards achievement of our business objectives, and aligns our executive officers’ interests with those of our stockholders. Consistent with this philosophy, we have designed our executive compensation program to achieve the following primary objectives:

We structure the annual compensation of our executive officers using three principal elements: base salary, annual cash bonus opportunities, and long-term equity incentive opportunities in the form of equity awards.

We have not adopted policies or employed guidelines for allocating compensation between current and long-term compensation, between cash and non-cash compensation, or among different forms of non-cash compensation. As described below, the Compensation Committee considers a variety of factors in formulating and proposing the appropriate yearly mix among such compensatory elements, including our compensation philosophy and the value of outstanding equity awards granted in prior years.

Succession Planning and Personnel Decisions Made in 2022

The Compensation Committee and Board regularly review the Company’s executive management succession plan to enable business continuity in the event a senior leader departs from the Company. The review includes a discussion of potential successors, including qualified internal candidates along with external candidates, an evaluation of their readiness for the role and a discussion of development or other opportunities to prepare them for the role. The Company maintains development plans for potential successors identifying specific skills, training, or other development opportunities to help such individuals prepare for the position. With respect to the departure of our former Chief Operating Officer, the Company determined to leverage existing resources within the organization to manage the responsibilities formerly allocated within the role of Chief Operating Officer.

Compensation-Setting Process

Role of the Compensation Committee

The Compensation Committee discharges many of the responsibilities of our Board relating to the compensation of our executive officers, including our NEOs, and presents compensation recommendations to our Board for approval pursuant to its charter. The Board reviews the Compensation Committee’s recommendations and approves the compensation of our executive officers. Similarly, the Compensation Committee develops and presents recommendations to our Board for approval with

 

 

respect to the compensation of the non-employee members of our Board. Providence-affiliated directors do not receive compensation from the Company in respect of their service on the Board. The Compensation Committee has the overall responsibility for overseeing our compensation and benefits policies generally, and overseeing and evaluating the compensation plans, policies, and practices applicable to our executive officers.

In carrying out its responsibilities, the Compensation Committee evaluates our compensation policies and practices with a focus on the degree to which these policies and practices reflect our executive compensation philosophy, develops strategies and makes recommendations and decisions that it believes further our philosophy or align with developments in best compensation practices and reviews the performance of our executive officers when making recommendations and decisions with respect to their compensation.

The Compensation Committee’s authority, duties, and responsibilities are further described in its charter, which is reviewed annually and revised and updated as warranted. The charter of our Compensation Committee is available without charge at https://ir.doubleverify.com/corporate-governance/governance-documents.

The Compensation Committee retains a compensation consultant (as described below) to provide support in its review and assessment of our executive compensation program; however, the Compensation Committee exercises its own judgment in developing recommendations to the Board with respect to the compensation of our executive officers, including our NEOs.

Setting Target Total Direct Compensation

The Compensation Committee conducts an annual review of the compensation arrangements of our executive officers, including our NEOs, typically during the fourth quarter in respect of the upcoming fiscal year. As part of this review, the Compensation Committee evaluates the base salary levels, annual cash bonus opportunities, and long-term incentive compensation opportunities of our executive officers and all related performance criteria.

The Compensation Committee does not establish a specific target for formulating the compensation opportunities of our executive officers. In developing recommendations about the compensation of our executive officers, the members of the Compensation Committee rely primarily on their general experience and subjective considerations of various factors, including the following:

•

Our executive compensation program objectives.

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Our performance against the financial, operational, and strategic objectives established by the Compensation Committee and our Board.

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Each individual executive officer’s knowledge, skills, experience, qualifications, and tenure relative to other similarly situated executives at the companies in our compensation peer group and, in certain instances, selected broad-based compensation surveys.

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•

The scope of each executive officer’s role and responsibilities compared to other similarly situated executives at the companies in our compensation peer group and, in certain instances, selected broad-based compensation surveys.

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The prior performance of each individual executive officer, based on a subjective assessment of such executive officer’s contributions to our overall performance, ability to lead the executive officer’s business unit or function, and work as part of a team, all of which reflect our core values.

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The potential of each individual executive officer to contribute to our long-term financial, operational, and strategic objectives.

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The retention risk (and related replacement cost) of each individual executive officer.

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•

Our CEO’s compensation relative to that of our executive officers, and compensation parity among our executive officers.

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Our financial performance relative to our peers.

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The compensation practices of our compensation peer group and the companies in selected broad-based compensation surveys and the positioning of each executive officer’s compensation in a ranking of peer company compensation levels based on an analysis of competitive market data.

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The recommendations of our CEO with respect to the compensation of our executive officers (except with respect to his own compensation).

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These factors provide the framework for formulating and developing recommendations regarding the compensation opportunity for each executive officer, including each NEO. No single factor is determinative in developing these recommendations, nor is the impact of any individual factor on the determination of pay levels quantifiable.

The Compensation Committee does not assign any predetermined weight to these factors, nor does it apply any formulas in developing its compensation recommendations for our executive officers. The members of the Compensation Committee consider this information in light of their individual experience, knowledge of the Company, knowledge of the competitive market, knowledge of each executive officer, and business judgment in making their recommendations.

The Compensation Committee does not engage in formal benchmarking against other companies’ compensation programs or practices to establish our compensation levels or make specific compensation recommendations with respect to our executive officers. Instead, in formulating and developing its recommendations, the Compensation Committee reviews information summarizing the compensation paid at a representative group of peer companies, to the extent that the executive positions at these companies are considered comparable to our positions and informative of the competitive environment and more broad-based compensation surveys to gain a general understanding of market compensation levels.

Role of Management

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

At the end of each year, our CEO reviews the performance of our other executive officers, including our NEOs, based on each individual’s level of success in accomplishing the business objectives established for such executive officer for the year and his or her overall performance during that year, and then shares these evaluations with, and makes recommendations to, the Compensation Committee for each element of compensation as described above. The annual business objectives for each executive officer are developed through mutual discussion and agreement between our CEO and the executive officers and take into account the Company’s business objectives, which are reviewed with our Board.

The Compensation Committee reviews and discusses with our CEO his proposals and recommendations and considers them as one factor in formulating and developing its recommendations to the Board with respect to the compensation of our executive officers, including our NEOs. Our CEO also attends meetings of our Board and the Compensation Committee at which executive compensation matters are addressed, except with respect to discussions involving his own compensation.

Role of Compensation Consultant

The Compensation Committee has the sole authority to retain an external compensation consultant to assist it by providing information, analysis, and other advice relating to our executive compensation program and the recommendations and decisions resulting from its annual executive compensation review, including the authority to approve the consultant’s reasonable fees and other retention terms.

 

 

In 2022, the Compensation Committee engaged Compensia, Inc. (“Compensia”), a national compensation consulting firm, to serve as its compensation consultant to advise on executive compensation matters, including competitive market pay practices for our executive officers, including our NEOs, and with the data analysis and selection of the compensation peer group. Under the terms of the engagement, Compensia reports directly to the Compensation Committee and its chair, and serves at the discretion of the Compensation Committee, which reviews the engagement annually.

During 2022, Compensia attended the meetings of the Compensation Committee (both with and without management present) as requested and provided various services, including the following:

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the review, analysis, and updating of our compensation peer group;

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the review and analysis of the base salary levels, annual cash bonus opportunities and long-term incentive compensation opportunities of our NEOs against competitive market data based on the companies in our compensation peer group and selected compensation surveys;

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•

an assessment of executive compensation trends within our industry, and updating on corporate governance and regulatory issues and developments;

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•

a review and analysis of the compensation paid to the non-employee members of our Board;

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•

a review and analysis of our equity strategy and utilization;

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a review and analysis of our stock-based compensation expense;

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•

a compensation risk assessment;

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consultation with the Compensation Committee chair and other members between Compensation Committee meetings; and

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support on other ad hoc matters throughout the year.

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Compensia also coordinated with our management for compensation benchmarking for our executive officers. In 2022, Compensia did not provide any other services to us.

The Compensation Committee has evaluated its relationship with Compensia to ensure that it believes that such a firm is independent from management. This review process included a review of the services that Compensia provided, the quality of those services, and the fees associated with the services provided during 2022. Based on this review, as well as consideration of the factors affecting independence set forth in Exchange Act Rule 10C-1(b)(4) and the listing standards of the NYSE and such other factors as were deemed relevant under the circumstances, the Compensation Committee has determined that no conflict of interest was raised as a result of the work performed by Compensia.

Competitive Positioning

The Compensation Committee believes that peer group comparisons are useful guides to measure the competitiveness of our executive compensation program and related policies and practices. For purposes of assessing our executive compensation against the competitive market, the Compensation Committee reviews and considers the compensation levels and practices of a select group of peer companies. This compensation peer group consists of technology companies that are similar to us in terms of revenue, market capitalization, and industry focus. The competitive data drawn from this compensation peer group is one of several factors that the Compensation Committee uses to formulate and develop its recommendations to the independent members of our Board with respect to the compensation of our executive officers, including our NEOs.

 

 

The initial compensation peer group, which was developed prior to our initial public offering of equity securities in April 2021 and focused largely on aspirational peer companies, was used to analyze and establish the compensation of our executive officers for 2022 and consisted of the following publicly-traded technology companies:

In April 2022, the Compensation Committee directed Compensia to review and update the compensation peer group to reflect current market conditions, to remove acquired or to be acquired companies and those which fell meaningfully above or below best practice size ranges, and to retain key peer companies identified by management and/or the Compensation Committee. In identifying and selecting the companies that comprise the updated compensation peer group, Compensia considered the following primary criteria:

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publicly traded companies in the advertising software/technology sector, as well as other software/internet companies;

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•

similar revenues—within a range of approximately 0.3x of our then-trailing four quarters’ revenue of approximately $333 million to approximately 3.0x of current analysts’ estimates of our next four quarters’ revenue of approximately $433 million (approximately $100 million to approximately $1.3 billion);

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similar market capitalization—within a range of approximately 0.25x to approximately 4.0x of our 30-day average market capitalization of approximately $4.1 billion (approximately $1.0 billion to approximately $16.3 billion); and

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comparable revenue growth.

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The updated compensation peer group as approved by the Compensation Committee in July 2022 consisted of the following publicly-traded technology companies:

The Compensation Committee uses data drawn from the companies in our compensation peer group, as well as data from custom data sets drawn from the Radford Global Technology Survey database (including a survey result of 21 of 25 of the companies in our compensation peer group and a survey result of U.S. technology companies with revenues between $100 million and $1 billion), to evaluate the competitive market when developing its recommendations for the total direct compensation packages for our executive officers, including base salary, target annual cash bonus opportunities, and long-term incentive compensation opportunities.

 

 

The Compensation Committee intends to review our compensation peer group periodically as it deems appropriate and make adjustments to its composition if warranted, taking into account changes in both our business and the businesses of the companies in the peer group.

Compensation Elements

Generally, our executive compensation program consists of three principal elements—base salary, annual cash bonus opportunities, and long-term incentive compensation in the form of equity awards:

Base Salary

Base salary represents the fixed portion of the compensation of our executive officers, including our NEOs, and is an important element of compensation intended to attract and retain highly talented individuals. Generally, we use base salary to provide each executive officer with a specified level of cash compensation during the year with the expectation that the executive officer will perform such individual’s responsibilities to the best of the executive officer’s ability and in our best interests.

Generally, we establish the initial base salaries of our executive officers through arm’s-length negotiation at the time of hire, taking into account the individual’s position, qualifications, experience and prior salary level, and the base salaries of our other executive officers. Thereafter, the Compensation Committee reviews the base salaries of our executive officers each year as part of its annual review of our executive compensation program, with input from our CEO (except with respect to his own base salary) and develops recommendations for adjustments as it determines to be reasonable and necessary to reflect the scope of an executive officer’s performance, individual contributions and responsibilities, position in the case of a promotion, and market conditions.

In December 2021, the Compensation Committee reviewed the base salaries of our executive officers, including our NEOs, taking into consideration a competitive market analysis prepared by its compensation consultant and the recommendations of our CEO (except with respect to his own base salary), as well as the other factors described in “Compensation-Setting Process—Setting Target Total Direct Compensation” above. Following this review, the Compensation Committee recommended to the Board that it adjust the base salaries of each of our executive officers to bring their base salaries to levels that were comparable to those of similarly-situated executives in the competitive marketplace. Subsequently, our Board approved these recommendations.

 

 

The base salaries of our NEOs as determined for 2022 were as follows:

Note: These base salaries were effective January 1 of the respective year.

The base salaries actually paid to our NEOs during 2022 are set forth in the “2022 Summary Compensation Table” below.

Annual Cash Bonuses

We use an annual cash bonus plan to motivate our executive officers, including our NEOs, to achieve our annual business goals. In December 2021, the Compensation Committee recommended, and our Board approved, the Bonus Plan for 2022 (the “2022 Bonus Plan”) to provide incentives for our executive officers to meet or exceed certain business and financial objectives set by the Committee, after considering the Company’s 2022 annual operating plan.

In December 2021, as part of its annual review of our executive compensation program, the Compensation Committee reviewed the target annual cash bonus opportunities of our executive officers, including our NEOs, taking into consideration a competitive market analysis prepared by its compensation consultant and the recommendations of our CEO (except with respect to his own target annual cash bonus opportunity), as well as the other factors described in “Compensation-Setting Process—Setting Target Total Direct Compensation” above. Following this review, the Compensation Committee recommended to our Board that it maintain the target annual cash bonus opportunities for our executive officers, including our NEOs, at their 2021 levels. Subsequently, our Board approved these recommendations.

Potential annual cash bonuses for our NEOs under the 2022 Bonus Plan could range from zero to 150% of their target annual cash bonus opportunity.

2022 Bonus Calculation

Measured over 3 equally weighted periods (i.e., one-third of the target bonus opportunity relates to each period) and paid at the end of each period:

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First Half of 2022 (Measured from January 1 to June 30)

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Second Half of 2022 (Measured from July 1 to December 31)

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Full Year of 2022 (Measured from January 1 to December 31)

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Each period is calculated using the following formula:

With respect to bonuses earned by our NEOs in 2022, bonus targets for revenue were set at $197 million, $252 million and $449 million, for the First Half 2022, Second Half 2022 and Full-Year 2022, respectively. Bonus targets for Adjusted EBITDA were set at $47 million, $83 million and $130 million, for the First Half 2022, Second Half 2022 and Full-Year 2022, respectively. The business KPIs for Ms. Eddleman, Mr. Allais and Mr. Grimmig were set by the CEO in consultation with the Board, and, for Mr. Zagorski, by the Board.

2022 Bonus Payout

Our NEOs other than Mr. McLaughlin received the following annual cash bonus payments in 2022:

(1)

Payout for each individual period rounded to the nearest dollar and may differ from the Summary Compensation Table aggregate by $1.

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(2)

Ms. Eddleman contributed 50% of the bonus earned and presented in this table on a pre-tax basis to the Company’s NQDC plan.

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Due to his termination of Employment, Mr. McLaughlin’s annual bonus for 2022 was determined pursuant to his employment agreement.

The annual bonuses actually paid to our NEOs for 2022 are set forth in the “2022 Summary Compensation Table” below.

Long-Term Equity Incentive Compensation

As a technology company that encounters significant competition for qualified personnel, long-term incentive compensation plays a critical role in our ability to attract, hire, motivate, and reward qualified and experienced executive officers. The use of long-term incentive compensation in the form of equity awards is necessary for us to compete for qualified executive officers without significantly increasing cash compensation, and we consider it to be the most important element of our executive compensation program. We use equity awards to incentivize and reward our executive officers, including our NEOs, for long-term corporate performance based on the value of our common stock and, thereby, to align their interests with the interests of our stockholders. The realized value of these equity awards bears a direct relationship to our stock price, and, therefore, these awards are an incentive for our executive officers to

 

 

create value for our stockholders. Further, because our equity awards for executive officers, including our NEOs, typically vest over a four-year period, equity awards also help us retain our executive officers in a highly competitive market.

In 2022, we used stock options and RSU awards with time-based vesting requirements to motivate and reward our executive officers, including our NEOs, for sustained, long-term increases in the value of our common stock. Our Board and the Compensation Committee believe that because stock options provide for an economic benefit only in the event that our stock price increases over the exercise price of the option, these awards effectively align the interests of our executive officers with those of our stockholders and provide our executive officers with a significant incentive to manage our business from the perspective of an owner with an equity stake in the business. In addition, because RSU awards have value to the recipient even in the absence of stock price appreciation, our Board and the Compensation Committee believe that we are able to incentivize and retain our executive officers during periods of market volatility and result in using fewer shares of our common stock than would be necessary if we used stock options exclusively to provide an equity stake in the Company. Since the value of RSU awards increases with any increase in the value of the underlying shares, RSU awards also provide incentives to our executive officers that are aligned with the interests of our stockholders.

The Compensation Committee considers the following factors when determining the grant size of each equity award:

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competitive market analysis prepared by its compensation consultant;

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the outstanding equity holdings of each executive officer (including the current economic value of his or her unvested equity holdings and the ability of these unvested holdings to satisfy our retention objectives);

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the projected impact of the proposed awards on our earnings;

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the proportion of our total shares outstanding used for annual employee long-term incentive compensation awards (our “burn rate”) in relation to the annual burn rate ranges of the companies in our compensation peer group and other recently-public technology companies;

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the potential voting power dilution to our stockholders in relation to the median practice of the companies in our compensation peer group; and

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other factors described in “Compensation-Setting Process—Setting Target Total Direct Compensation” above.

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In determining the size of our CEO’s equity award, the Compensation Committee reviewed his overall target total direct compensation in view of our consistently strong financial and operational performance under his leadership, his significant contributions to our development both preceding and following our transition to public company status, the remaining prospective incentive and retention value of his then-current equity holdings, the highly competitive market for proven executive talent, and his historical level of compensation relative to that of similarly-situated executives at the companies in our compensation peer group. After reviewing the challenges and opportunities presented by our long-term business strategy and objectives, the Compensation Committee determined that he was uniquely qualified to lead us through our next stage of development as we continue to create long-term sustainable stockholder value. As a result, the Compensation Committee determined that its recommendation with respect to his equity awards should serve to both recognize and reward him for his prior performance and serve as an incentive for him to remain with us and drive the next phase of our growth.

In December 2022, as part of its annual review of our executive compensation program, and after taking into consideration a competitive market analysis prepared by its compensation consultant and the recommendations of our CEO (except with respect to his own equity award), as well as the factors described in the preceding paragraph, the Compensation Committee recommended to our Board that it grant our executive officers, including our NEOs, stock options and RSU awards with time-based vesting requirements. Further, the Compensation Committee recommended that the dollar value of the stock options should comprise approximately 50% of each executive officer’s 2022 equity award, and the dollar value of the RSU awards should comprise the remaining approximately 50% of the award.

 

 

The equity awards granted to our NEOs in 2022 were as follows:

The stock options granted to our NEOs in 2022 vest (and become exercisable) over a four-year period, with 6.25% of the total number of shares of our common stock subject to an option vesting on March 15, 2023 and 6.25% of the total number of shares subject to the option vesting quarterly thereafter for the remaining 15 quarters, contingent upon the NEO’s continued employment with or service to the Company through each applicable vesting date.

The RSU awards granted to the NEOs in 2022 vest over a four-year period, with 6.25% of the total number of units subject to an award vesting on March 15, 2023 and 6.25% of the total number of units subject to the award vesting quarterly thereafter for the remaining 15 quarters, contingent upon the NEO’s continued employment with or service to the Company through each applicable vesting date. Each unit granted pursuant to the RSU awards represents a contingent right to receive one share of our common stock for each unit that vests.

The equity awards granted to our NEOs for 2022 are set forth in the “2022 Summary Compensation Table” and the “2022 Grants of Plan-Based Awards Table” below.

Health and Welfare Benefits

Except with respect to our nonqualified deferred compensation plan (“NQDC”), which is only available to our Board and senior executives, our NEOs are eligible to participate in the same employee benefit plans, and on the same terms and conditions, as all other full-time, salaried U.S. employees, including payment of health care premiums for employees at the level of director and above. These benefits include medical, dental, and vision insurance, an employee assistance program, health and dependent care flexible spending accounts, basic life insurance, accidental death and dismemberment insurance, short-term and long-term disability insurance, commuter benefits, and reimbursement for mobile phone usage.

We maintain a 401(k) defined contribution plan for the benefit of our eligible employees located in the U.S., including our executive officers, under which participants are permitted to contribute a percentage of their compensation on a pre-tax basis, subject to limits in the U.S. Internal Revenue Code of 1986, as amended (the “Code”). We make fully vested matching contributions under the 401(k) plan, subject to the discretion of our Board. While the terms of the 401(k) plan contemplate discretionary matching contributions to eligible participants of up to 50% of every dollar that such participants contribute up to 4% of their annual base salaries, in recent years the Compensation Committee has approved contributions of 75% of each dollar that a participant contributes up to 4% of their annual base salary. Our executive officers are eligible to participate in the 401(k) plan on the same basis as our other employees.

We design our employee benefits programs to be affordable and competitive in relation to the market as well as compliant with applicable laws and practices. We adjust our employee benefits programs as needed based upon regular monitoring of applicable laws and practices and the competitive market.

Perquisites and Other Personal Benefits

Currently, we do not view perquisites or other personal benefits as a significant component of our executive compensation program. Accordingly, we do not provide significant perquisites or other personal benefits to our NEOs except as generally made available to our employees or in situations where we believe it is appropriate to assist an individual in the performance of such person’s duties, to make the NEO more efficient and effective, and for recruitment and retention purposes. In 2022, except for our

 

 

former Chief Operating Officer, none of our NEOs received perquisites or other personal benefits in amounts equal to or greater than $10,000.

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

Employment Agreements

We have entered into written employment agreements with each of our NEOs. We believe that these agreements were necessary to secure the service of these individuals in a highly competitive job market.

Except in the case of the employment agreement with our CEO (whose agreement has a five-year term, but may be terminated at any time prior to the expiration of the term by either party), each of these employment agreements does not have a specific term and provides for “at will” employment (meaning that either we or the executive officer may terminate the employment relationship at any time without cause). These employment agreements generally set forth the NEO’s base salary, target annual cash bonus opportunity, and eligibility to receive annual equity awards based upon performance and award guidelines as established by our Board or the Compensation Committee. Ms. Eddleman’s employment agreement provides that she is eligible to receive grants of equity awards having a grant date fair value of not less than $1,500,000 on an annual basis. In addition, each employment agreement also includes non-compete and employee and customer non-solicitation covenants, effective during the NEO’s employment with us and for at least one-year post-termination. Further, each of our NEOs are also subject to intellectual property assignment and perpetual confidentiality provisions that protect our commercial interests.

These employment agreements also provide that each NEO is eligible to receive severance payments and benefits upon a qualifying termination of employment, as more fully described in “Post-Employment Compensation” below.

For detailed descriptions of the employment arrangements with our NEOs, see “—Narrative Disclosure to Summary Compensation Table—Employment Agreements” and “—Payments and Potential Payments upon Termination or Change in Control.”

Post-Employment Compensation

The employment agreements with our NEOs provide for certain protections in the event of specified involuntary terminations of employment (including a termination of employment by us “without cause” or a resignation of employment for “good reason,” as such terms are defined in the employment agreements and which we refer to as a “qualifying termination”), in exchange for executing and not revoking our separation agreement and release of claims. The applicable provisions of the employment agreements provide reasonable compensation in the form of severance pay and certain limited benefits to a NEO if such individual leaves our employ under certain circumstances to facilitate the NEO’s transition to new employment. Further, we seek to mitigate any potential employer liability and avoid future disputes or litigation by requiring a departing NEO to sign a separation agreement and release of claims in a form and with terms acceptable to us providing for a general release of all claims as a condition to receiving post-employment compensation payments or benefits.

In addition, if Mr. Zagorski’s or Mr. Allais’s employment is terminated in a qualifying termination or by reason of his death or disability, the portion of his stock options and, in the case of Mr. Zagorski, RSU awards that would otherwise have vested between the date of termination and the 12-month anniversary of the date of termination will accelerate and vest in full. In the case of Ms. Eddleman, if her employment is terminated by reason of death, all of her unvested RSU awards granted pursuant to her employment agreement will accelerate and vest in full. In the case of Mr. Grimmig, if his employment is terminated by reason of his death or disability, all of Mr. Grimmig’s unvested RSU awards will accelerate and fully vest.

Beginning with the equity awards granted to our executive officers, including our NEOs, in 2022, the vesting provisions of all stock options and RSU awards with time-based vesting requirements held by our NEOs will be “double-trigger”, which means that the vesting of these awards will generally accelerate and

 

 

vest in full only if there is both a “change in control” of the Company (as defined in our 2021 Equity Plan and our 2017 Equity Plan) and, a qualifying termination of employment of the applicable NEO.

We believe that having in place reasonable and competitive post-employment compensation arrangements are essential to attracting and retaining highly qualified executive officers. The Compensation Committee does not consider the specific amounts payable under the post-employment compensation arrangements when developing its recommendations with respect to the annual compensation for our NEOs. We do believe, however, that these arrangements are necessary to offer compensation packages that are competitive.

For detailed descriptions of the post-employment compensation arrangements with our NEOs, as well as an estimate of the potential payments and benefits payable under these arrangements, see “— Potential Payments upon Termination or Change in Control.”

Non-Qualified Deferred Compensation Plan

We maintain our NQDC to provide our executive officers and members of our Board with an opportunity to defer base salary, cash fees paid to a non-employee director, cash bonus payments and other compensation (including equity awards). In addition to elective deferrals, we may make discretionary contributions to be credited to the account of any or all participants, subject to the vesting requirements set forth in the NQDC (though to date we have not made any such contributions).

Each participant’s deferred compensation account is credited with an investment return determined as if the account was invested in one or more investment funds. Each participant elects the investment funds in which such participant’s account will be deemed to be invested. Distributions of vested account balances are made upon death, disability, separation from service, or a specified date. Distributions are to be made in a single cash payment or, at the election of the participant, in annual installments for a period of between two and 10 years in the case of a separation from service or in-service distribution.

Our obligations under the NQDC are general unsecured promises to pay deferred compensation in the future to eligible participants in accordance with the terms of the NQDC from our general assets. Distributions from the NQDC are governed by the Code and the NQDC. We may, at any time, in our sole discretion, terminate the NQDC or amend or modify the NQDC, in whole or in part, except that no such termination, amendment, or modification will have a substantive effect on the benefits provided under the NQDC.

For more information on the participation of our NEOs in the NQDC, see “—Nonqualified Deferred Compensation.”

Other Compensation Policies

Hedging and Pledging Policies

Our Policy on Trading in Securities requires all directors, officers, and employees of the Company, and their immediate family members and other persons living in their households (“Company Associates”), to consult the Chief Legal Officer prior to engaging in any hedging or pledging transactions involving the Company’s securities. Any request for pre-clearance of a hedging or similar arrangement must be submitted to the Chief Legal Officer at least thirty days before the proposed execution of documents evidencing the proposed transaction. The Chief Legal Officer will then determine whether the transaction may proceed and, if so, assist in complying with the SEC’s reporting requirements. Any Company Associate proposing to pledge the Company’s securities as collateral for a loan must submit a request for pre-clearance to the Chief Legal Officer at least two weeks prior to the proposed execution of documents evidencing the proposed pledge. The Chief Legal Officer will then determine whether the transaction may proceed. Our Policy on Trading in Securities prohibits Company Associates from engaging in short sales and transactions in puts, calls or other derivative securities (whether on an exchange or in any other organized market) with respect to the Company’s securities.

Stock Ownership Guidelines

The Board has established stock ownership guidelines in order to further align the long-term interests of our executive officers and non-employee directors with those of our stockholders and promote the

 

 

Company’s commitment to sound corporate governance. Our stock ownership guidelines require that our executive officers own qualifying equity having an aggregate value equal to a multiple of the executive officer’s annual base salary or non-employee director’s annual board cash retainer as follows:

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*

Excludes Providence-affiliated directors

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The types of equity that are eligible for calculation in the guidelines include Shares held outright (including Shares beneficially owned unless the individual disclaims beneficial ownership), Shares held in the Employee Stock Purchase Plan and any unsettled RSUs. Executives are required to hold 50% of the Shares acquired as a result of exercise or settlement of compensatory awards (net of any shares withheld for taxes) until these ownership guidelines have been met.

Compliance with these stock ownership guidelines is reviewed at least annually by the Compensation Committee.

Our overall compensation program is designed to mitigate the potential for rewarding excessive risk-taking that may produce short-term results that appear in isolation to be favorable, but which, in fact, may undermine the successful execution of our long-term business strategy and erode stockholder value. The Compensation Committee reviewed the Company’s incentive compensation programs and discussed these with its compensation consultant, including both broad-based programs and its executive compensation programs. Based on this review, the Compensation Committee determined that the risks arising from its compensation program are not reasonably likely to have a material adverse effect on the Company.

Compensation Recovery (“Clawback”) Policy

Our Board has adopted a clawback and forfeiture policy (the “Clawback Policy”) which provides for recoupment of all excess “incentive compensation” ​(as defined in the Clawback Policy”) paid or awarded to any current or former “executive officer” ​(as that term is defined for purposes of Section 16 of the Securities Exchange Act of 1934) and any other current or former employee who has received an equity award (a “Covered Person”) if

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we are required to prepare an accounting restatement of our financial results due to material noncompliance with any financial reporting requirement under the U.S. securities laws caused by the fraud, misconduct, or gross negligence of a Covered Person;

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the Compensation Committee determines that any Covered Person received incentive compensation based on inaccurate financial information or other inaccurate performance metric criteria; or

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•

the Compensation Committee determines that any Covered Person committed misconduct that has or might reasonably be expected to cause reputational or other harm to us, committed misconduct or a material error that causes or might be reasonably expected to cause significant financial or reputational harm to us or was improper or grossly negligent, including in a supervisory capacity, in failing to identify, escalate, monitor or manage, in a timely manner and as reasonably expected, risks material to us.

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The Clawback Policy applies with respect to cash incentive compensation paid after April 15, 2021 (the “Effective Date”) and equity incentive compensation granted after the Effective Date and, to the extent agreed by a Covered Person or as otherwise permitted by applicable law, incentive compensation that was granted prior to the Effective Date.

The Company intends to review and update its clawback policy upon finalization of applicable NYSE rules regarding the recoupment of incentive compensation.

 

 

Tax and Accounting Considerations

The Compensation Committee takes the applicable tax and accounting requirements into consideration in designing and overseeing our executive compensation program.

Deductibility of Executive Compensation

Under Section 162(m) of the Code, compensation paid to our “covered executive officers” ​(which include our CEO and CFO), will not be deductible to the extent it exceeds $1 million. While the Compensation Committee considers the deductibility of awards as one factor in determining executive compensation, the Compensation Committee also looks at other factors in making its decisions, as noted above, and retains the flexibility to award compensation that it determines to be consistent with the goals of our executive compensation program even if the awards are not deductible by us for tax purposes.

Accounting for Stock-Based Compensation

The Compensation Committee takes accounting considerations into account in designing compensation plans and arrangements for our executive officers and other employees. Chief among these is Financial Accounting Standards Board Accounting Standards Codification Topic 718 (“ASC Topic 718”), the standard which governs the accounting treatment of certain stock-based compensation. Among other things, ASC Topic 718 requires us to record a compensation expense in our income statement for all equity awards granted to our executive officers and other employees. This compensation expense is based on the grant date “fair value” of the equity award and, in most cases, will be recognized ratably over the award’s requisite service period (which, generally, will correspond to the award’s vesting schedule). This compensation expense is also reported in the compensation tables below, even though recipients may never realize any value from their equity awards.

Compensation Committee Report

The Compensation Committee has reviewed and discussed with management the Compensation Discussion and Analysis (CD&A) contained in this Proxy Statement. Based on this review and discussion, the Compensation Committee has recommended to the Board that the CD&A be included in this Proxy Statement.

Submitted by the Compensation Committee of the Company’s Board of Directors:

Scott Wagner (Chairperson)
Laura B. Desmond
Sundeep Jain
Teri L. List

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

 

 

Compensation Tables

The following tables, footnotes and narrative disclosures discuss the compensation of our NEOs: our Chief Executive Officer, Mark Zagorski, our Executive Vice President and Global Chief Commercial Officer, Julie Eddleman, our Chief Financial Officer, Nicola Allais, our Chief Legal Officer, Andy Grimmig and our former Chief Operating Officer who stepped down from that role on April 1, 2022 and terminated employment with the Company on July 1, 2022, whom we refer to as our “NEOs,” during our fiscal year ended December 31, 2022.

Summary Compensation Table

(1)

Represents the aggregate grant date fair value of restricted stock units granted to our NEOs. The grant date fair value is computed in accordance with FASB ASC Topic 718, except that the amounts in this column for 2020 are modified to exclude any forfeiture assumptions related to service-based vesting conditions for the performance-based restricted stock units. The amounts do not reflect the value actually realized or that ultimately may be realized by our NEOs in respect of these awards. The 2020 amounts shown for Mr. Zagorski assumed that the market-based conditions for the performance-based restricted stock units would be satisfied in full, and, as of October 26, 2020, this performance condition was satisfied and Mr. Zagorski’s performance-based restricted stock units therefore vested.

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(2)

Represents the aggregate grant date fair value of stock options granted to our NEOs. The grant date fair value is computed in accordance with FASB ASC Topic 718. The amounts do not reflect the value actually realized or that ultimately may be realized by our NEOs.

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(3)

The amounts in this column represent bonuses relating to first half, second half and full year Company performance for the respective year. For 2022, Ms. Eddleman contributed 50% of the bonus earned and presented in this column on a pre-tax basis to the Company’s NQDC plan. For 2020, Mr. Grimmig’s amount represents non-guaranteed annual bonuses that relate to Company performance for the second half of 2020 and for the full 2020 calendar year.

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(4)

Amounts reported in the “All Other Compensation” column for our NEOs include the items set forth in the table below, as applicable to each NEO.

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A.

A discretionary matching contribution under the Company’s 401(k) plan was made for each of our NEOs who made contributions to the plan and who were employed on December 31, 2020, 2021 and 2022, respectively, as set forth above.

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B.

The Company provides cash incentives when employees successfully refer external candidates for an open role.

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C.

Reflects the employee portion of health benefits paid by the Company.

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D.

For 2022, reflects additional payments required under Mr. McLaughlin’s employment agreement as a result of the termination of his employment in 2022 (salary continuation of $206,400, health benefit reimbursement of 13,262, life insurance reimbursement of $21,649, and gross-up of life insurance reimbursement of $21,867). For 2020, reflects life insurance reimbursement of $7,216 and respective gross-up of $6,555.

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(5)

This amount for Mr. Zagorski includes a one-time cash sign-on bonus paid to him in connection with the commencement of his employment, and a fixed annual bonus for 2020 that was payable to Mr. Zagorski pursuant to the terms of his employment agreement.

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(6)

This amount for Ms. Eddleman reflects a fixed annual bonus that was payable pursuant to the terms of her employment agreement.

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(7)

This amount for Mr. Grimmig represents the fixed portion of his annual bonus for 2020 that was payable to him pursuant to the terms of his employment agreement.

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(8)

This amount for Mr. McLaughlin reflects his 2022 bonus that was payable pursuant to the terms of his employment agreement.

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(9)

In December 2020, we entered into an agreement with Mr. McLaughlin whereby we agreed to purchase from him, and he agreed to the cancellation of, an unvested performance-based option that was granted to him in 2017 in respect of 601,412 shares of our common stock. The amount in this column represents the incremental fair value, computed in accordance with FASB ASC Topic 718, recognized in connection with the accelerated vesting of that performance-based option.

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Grants of Plan-Based Awards During the Fiscal Year Ended December 31, 2022

The following table provides information about the plan-based awards granted to each of our NEOs during fiscal 2022.