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ACV AUCTIONS |
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2023 PROXY STATEMENT AND NOTICE OF ANNUAL MEETING OF STOCKHOLDERS |
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37 |
Prior to our initial public offering in March 2021, we granted certain members of our management team, including our NEOs, long-term incentive compensation in the form of stock options to purchase shares of our Class B common stock. For the fiscal year ending December 31, 2022, we granted only RSUs to our NEOs. The Compensation Committee determined that our 2022 equity awards for our executive officers, including our named executive officers, would be comprised solely of RSU awards. The Compensation Committee believes that RSUs reward performance and deliver retention incentives over the long-term. RSUs cover fewer shares than stock options to deliver a similar value to our NEOs and, as a result, enable us to minimize dilution to stockholders. The Compensation Committee considers RSU awards to be performance based because they provide a return directly in line with our stock price performance and align our executive officers’ interests with those of our stockholders. Equity awards are granted to our NEOs and other employees in the discretion of our Compensation Committee (and board of directors, in the case of the CEO) and are not made at any specific time during a year, but we have typically granted equity awards to our NEOs in March or April. Our Compensation Commitee has discretion whether to grant equity awards to the NEOs in any given year, and our board of directors has discretion whether to grant equity awards to the CEO in any given year.
In June 2022, we granted each of Mr. Chamoun, Mr. Zerella, Mr. Mehta and Mr. Waterman RSUs, representing a contingent right to receive 241,071 shares, 128,571 shares, 128,571 shares and 66,964 shares, respectively, of our Class A common stock under our 2021 Plan. In an effort to use the equity as a long-term incentive and to bring our executives in line with market data related to compensation from comparable companies, we provided our executives these RSU grants. The Compensation Committee also approved a grant of 210,000 RSUs to Ms. Fitzgerald in connection with her commencement of employment in February 2022, with a grant date of April 1, 2022.
The RSUs awarded in 2022 to the NEOs (other than Ms. Fitzgerald) vest in twelve equal quarterly installments beginning on July 1, 2022, subject to the NEO’s continued service with us as of each such date. 25% of Ms. Fitzgerald’s RSUs vested on April 1, 2023 and the remaining RSUs will vest in twelve equal quarterly installments thereafter, subject to Ms. Fitzgerald’s continued service with us as of each such date.
Prior to our initial public offering in March 2021, all of the equity awards we have granted were made pursuant to our 2015 Long-Term Incentive Plan. Following our initial public offering, all of the equity awards we have granted been made under the terms of our 2021 Plan.
2023 Equity Awards
In March 2023, our Compensation Committee recommended, and our board of directors approved, a grant of 420,000 RSUs to Mr. Chamoun, with a grant date of April 1, 2023, vesting each quarter for four years. Our NEOs also received grants approved by our Compensation Committee with a grant date of March 30, 2023, vesting each quarter for four years. Mr. Zerella received 200,000 RSUs, Mr. Mehta received 200,000 RSUs, Ms. Fitzgerald received 150,000 RSUs and Mr. Waterman received 200,000 RSUs.
We also granted RSU awards in February 2023 instead of paying cash bonuses to our NEOs for 2022, as described above in “Fiscal Year Ended December 31, 2022 Bonus Payouts.”
Employee Stock Purchase Plan
Effective March 23, 2021, we adopted the ACV Auctions Inc. 2021 Employee Stock Purchase Plan (the “2021 ESPP”), which became effective on the date of the underwriting agreement related to the IPO. We offer all eligible U.S.-based employees, including eligible NEOs, the opportunity to purchase shares of the Company’s Class A common stock pursuant to purchase rights granted to employees under the 2021 ESPP. The price at which Class A common stock is purchased under the 2021 ESPP is equal to 85% of the fair market value of the Company’s Class A common stock on the first or last day of the offering period, whichever is lower. The current offering period for the 2021 ESPP began on December 1, 2022 and will end on May 31, 2023. Mr. Mehta, Mr. Waterman and Ms. Fitzgerald have elected to participate in the 2021 ESPP.
Other Features of Our Executive Compensation Program
Agreements with Our NEOs
Each of our NEOs has entered into a form of confirmatory offer letter, which has no specific term and provides for at-will employment. The offer letter supersedes and replaces the terms of any previous employment agreement. The offer letter provides for base salary, target bonus expressed as a percentage of base salary (to be determined in the sole discretion of the Company) and eligibility for participation in the Severance Plan, described below.
In addition, each of our NEOs has executed our standard employee covenants agreement governing the protection of confidential information, intellectual property and inventions, which provides for a non-compete obligation and non-solicitation of employees, consultants, contractors, customers or potential customers for one year after termination of employment for any reason .