SCHEDULE
14A INFORMATION
Proxy
Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed
by the Registrant
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Filed
by a Party other than the Registrant
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Check
the appropriate box:
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Preliminary
Proxy Statement
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Confidential,
for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive
Proxy Statement
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Definitive
Additional Materials
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Soliciting
Material under §240.14a-12
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MAGNITE, INC.
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(Name
of Registrant as Specified In Its Charter)
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(Name
of Person(s) Filing Proxy Statement, if other than the Registrant)
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Payment
of Filing Fee (Check the appropriate box):
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No
fee required.
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Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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(1)
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Title
of each class of securities to which transaction applies:
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(2)
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Aggregate
number of securities to which transaction applies:
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(3)
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Per
unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4)
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Proposed
maximum aggregate value of transaction:
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(5)
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Total
fee paid:
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Fee
paid previously with preliminary materials.
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Check
box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date
of its filing.
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(1)
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Amount
Previously Paid:
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(2)
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Form,
Schedule or Registration Statement No.:
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(3)
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Filing
Party:
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(4)
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Date
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Magnite, Inc.
6080 Center Drive, 4th Floor
Los Angeles, California 90045
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 28, 2021
The annual meeting of stockholders of Magnite,
Inc. (the “company”) will be held on Monday, June 28, 2021, at 10:00 Pacific time, to consider and act upon the matters
described below. In light of the coronavirus (COVID-19) pandemic, and out of an abundance of caution and appreciation for our stockholders,
this year’s annual meeting will be a virtual meeting via live webcast on the Internet. You will be able to attend the annual
meeting, view the list of our registered stockholders, vote and submit your questions during the meeting by visiting https://web.lumiagm.com/293659257
and entering the control number included on the Notice of Internet Availability or the proxy card or voting instruction form (if
you received a printed copy of the proxy materials) that you receive. Beneficial owners should review the proxy materials
and their voting instruction form or Notice of Internet Availability for information about how to vote in advance of and how to
participate in the meeting. You will not be able to attend the annual meeting in person.
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1.
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Election of three Class I directors to serve until the company’s 2024 annual meeting of stockholders and until their
respective successors are duly elected and qualified.
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2.
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Ratification of the selection of Deloitte & Touche LLP as the company’s independent registered public accounting
firm for the current fiscal year.
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3.
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Approval, on an advisory basis, of the compensation of the company’s named executive officers.
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Transaction of such other business as may properly come before the meeting or any postponement or adjournment thereof.
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Stockholders of record at the close of business
on May 4, 2021 will be entitled to notice of and to vote at the meeting or any postponement or adjournment thereof.
WHETHER OR NOT YOU
EXPECT TO ATTEND THE ANNUAL MEETING ONLINE, IN ORDER TO ENSURE REPRESENTATION OF YOUR SHARES, PLEASE VOTE AS PROMPTLY AS POSSIBLE.
YOU ARE URGED TO SUBMIT YOUR PROXY OR VOTING
INSTRUCTIONS ELECTRONICALLY OR BY TELEPHONE BY FOLLOWING THE INSTRUCTIONS ON YOUR NOTICE OF INTERNET AVAILABILITY OF PROXY
MATERIALS OR, IF YOU RECEIVED A PRINTED COPY OF THE PROXY MATERIALS, ON YOUR PROXY CARD OR VOTING INSTRUCTION FORM. IF YOU REQUESTED
A PRINTED COPY OF YOUR PROXY MATERIALS, YOU MAY ALSO VOTE BY MAIL BY SIGNING, DATING, AND RETURNING YOUR PROXY CARD OR VOTING INSTRUCTION
FORM IN THE PRE-PAID ENVELOPE PROVIDED. VOTING NOW VIA PROXY WILL NOT LIMIT YOUR RIGHT TO CHANGE YOUR VOTE OR TO ATTEND THE ANNUAL
MEETING ONLINE.
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By Order of the Board of Directors,
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Aaron Saltz
General Counsel and Corporate Secretary
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Los Angeles, California
May 17, 2021
SPECIAL NOTE REGARDING
FORWARD-LOOKING STATEMENTS
This
proxy statement contains forward-looking statements, including statements based upon or relating to our expectations, assumptions,
estimates, and projections. In some cases, you can identify forward-looking statements by terms such as “may,” “might,”
“will,” “objective,” “intend,” “should,” “could,” “can,”
“would,” “expect,” “believe,” “design,” “anticipate,” “estimate,”
“predict,” “potential,” “plan” or the negative of these terms, and similar expressions. These
statements are not guarantees of future performance; they reflect our current views with respect to future events and are based
on assumptions and estimates and subject to known and unknown risks, uncertainties and other factors that may cause our actual
results, performance or achievements to be materially different from expectations or results projected or implied by forward-looking
statements. These risks include, but are not limited to:
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our ability to realize the anticipated benefits of the SpotX Acquisition;
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our ability to comply with the terms of our financing arrangements;
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increases in our debt leverage may put us at greater risk of defaulting on our debt obligations and limit our ability to conduct
necessary operating activities, make strategic investments, respond to changing market conditions, or obtain future financing on
favorable terms;
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conversion of our convertible notes will dilute the ownership interest of existing stockholders or may otherwise depress the
price of our common stock;
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the severity, magnitude, and duration of the COVID-19 pandemic, including impacts of the pandemic and of responses to the pandemic
by governments, business and individuals on our operations, personnel, buyers, sellers, and on the global economy and the advertising
marketplace;
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our vulnerability to the depletion of cash resources as a result of impacts of the COVID-19 pandemic;
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our CTV spend may grow more slowly than we expect if industry growth rates for ad supported CTV are not accurate, if CTV sellers
fail to adopt programmatic advertising solutions or if we are unable to maintain or increase access to CTV advertising inventory;
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we may not realize the anticipated benefits of the merger with Telaria (the “Telaria Merger”);
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we may be unsuccessful in our Supply Path Optimization efforts;
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our ability to introduce new offerings and bring them to market in a timely manner, and otherwise adapt in response to client
demands and industry trends;
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uncertainty of our estimates and expectations associated with new offerings;
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lack of adoption and market acceptance of our Demand Manager solution;
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our technology development efforts may be inefficient or ineffective, or not keep pace with competitors;
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we must increase the scale and efficiency of our technology infrastructure to support our growth;
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the emergence of header bidding has increased competition from other demand sources and may cause infrastructure strain and
added costs;
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our access to mobile inventory may be limited by third-party technology or lack of direct relationships with mobile sellers;
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we may experience lower take rates, which may not be offset by increase in the volume of ad requests, improvements in fill-rate,
and/or increases in the value of transactions through our platform;
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the impact of requests for discounts, fee concessions, rebates, refunds or favorable payment terms;
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our history of losses, and the fact that in the past our operating results have and may in the future fluctuate significantly,
be difficult to predict, and fall below analysts' and investors' expectations;
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the effect on the advertising market and our business from difficult economic conditions or uncertainty;
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the effects of seasonal trends on our results of operations;
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we operate in an intensely competitive market that includes companies that have greater financial, technical and marketing
resources than we do;
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the effects of consolidation in the ad tech industry;
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the growing percentage of online and mobile advertising spending captured by closed “walled gardens” (such as Google,
Facebook, Comcast, and Amazon);
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our ability to differentiate our offerings and compete effectively to combat commodification and disintermediation;
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potential limitations on our ability to collect or use data as a result of consumer tools, regulatory restrictions and technological
limitations;
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the development and use of new identity solutions as a replacement for third-party cookies and other identifiers may disrupt
the programmatic ecosystem and cause the performance of our platform to decline;
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the industry may not adopt or may be slow to adopt the use of first-party publisher segments as an alternative to third-party
cookies;
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our ability to comply with, and the effect on our business of, evolving legal standards and regulations, particularly concerning
data protection and privacy;
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our ability to comply with industry self-regulation;
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failure by us or our clients to meet advertising and inventory content standards could harm our brand and reputation and those
of our partners;
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our ability to attract and retain buyers and sellers of digital advertising inventory and increase our business with them;
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the freedom of buyers and sellers to direct their spending and inventory to competing sources of inventory and demand;
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the ability of buyers and sellers to establish direct relationships and integrations without the use of our platform;
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our reliance on large aggregators of advertising inventory, and the concentration of CTV among a small number of large sellers
that enjoy significant negotiating leverage;
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our ability to provide value to both buyers and sellers of advertising without being perceived as favoring one over the other
or being perceived as competing with them through our service offerings;
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our reliance on large sources of advertising demand, including demand side platforms ("DSPs") that may have or develop
high-risk credit profiles or fail to pay invoices when due;
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we may be exposed to claims from clients for breach of contracts;
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errors or failures in the operation of our solution, interruptions in our access to network infrastructure or data, and breaches
of our computer systems;
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our ability to ensure a high level of brand safety for our clients and to detect "bot" traffic and other fraudulent
or malicious activity;
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our ability to access inventory with high viewability and completion rates;
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the use of our net operating losses and tax credit carryforwards may be subject to certain limitations;
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the possibility of adjustments to the purchase price allocation and valuation relating to the Telaria Merger;
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our ability to raise additional capital if needed;
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volatility in the price of our common stock;
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the impact of negative analyst or investor research reports;
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our ability to attract and retain qualified employees and key personnel;
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costs associated with enforcing our intellectual property rights or defending intellectual property infringement and other
claims;
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the capped call transactions we entered into may affect the value of the convertible notes and our common stock;
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we are subject to counterparty risk with respect to the capped call transactions;
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the conditional conversion feature of the convertible notes, if triggered, may adversely affect our financial condition and
operating result;
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provisions in the indenture for the convertible notes may deter or prevent a business combination that may be favorable to
our stockholders;
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failure to successfully execute our international growth plans; and
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our ability to identify future acquisitions of or investments in complementary companies or technologies and our ability to
consummate the acquisitions and integrate such companies or technologies.
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We discuss many of these risks and additional
factors that could cause actual results to differ materially from those anticipated by our forward-looking statements under the
heading "Risk Factors" and elsewhere in filings we have made and will make from time to time with the Securities and
Exchange Commission, or SEC, including our Annual Report on Form 10-K for the year ended December 31, 2020 and subsequent Quarterly
Reports on Form 10-Q for 2021, including our Form 10-Q for the three months ended March 31, 2021. These forward-looking statements
represent our estimates and assumptions only as of the date of the report in which they are included. Unless required by federal
securities laws, we assume no obligation to update any of these forward-looking statements, or to update the reasons actual results
could differ materially from those anticipated, to reflect circumstances or events that occur after the statements are made. Without
limiting the foregoing, any guidance we may provide will generally be given only in connection with quarterly and annual earnings
announcements, without interim updates, and we may appear at industry conferences or make other public statements without disclosing
material nonpublic information in our possession. Given these uncertainties, investors should not place undue reliance on these
forward-looking statements.
Investors should read this proxy statement
the documents that we reference in this report and have filed or will file with the SEC completely and with the understanding that
our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by
these cautionary statements.
Magnite, Inc.
6080 Center Drive, 4th Floor
Los Angeles, California 90045
PROXY STATEMENT FOR THE ANNUAL MEETING
OF STOCKHOLDERS
TO BE HELD ON JUNE 28, 2021
This proxy statement is provided in connection
with the solicitation of proxies by the board of directors (the “board of directors” or “board”) of Magnite,
Inc. (the “company” or “Magnite”) for use at Magnite’s annual meeting of stockholders to be held
on Monday, June 28, 2021 at 10:00 Pacific time, and at any postponement or adjournment thereof (the “Annual Meeting”).
In light of the coronavirus (COVID-19) pandemic, and out of an abundance of caution and appreciation for our stockholders, the
Annual Meeting will be a virtual meeting via live webcast on the Internet. You will be able to attend the Annual Meeting, vote
and submit your questions during the meeting by visiting https://web.lumiagm.com/293659257 and entering the control number included
in the Notice of Internet Availability or the proxy card or voting instruction form (if you received a printed copy of the proxy
materials) that you receive. Beneficial owners should review the proxy materials and their voting instruction form or Notice of
Internet Availability for information about how to vote in advance of and how to participate in the Annual Meeting. You
will not be able to attend the annual meeting in person.
IMPORTANT NOTICE REGARDING INTERNET AVAILABILITY
OF PROXY MATERIALS
This proxy statement and our Annual Report
on Form 10-K for the year ended December 31, 2020 (the “2020 Annual Report”) are available on the Internet at www.proxyvote.com. These
materials are also available on our corporate website at http://investor.magnite.com/. The other information on our
corporate website does not constitute part of this proxy statement.
GENERAL INFORMATION ABOUT THE ANNUAL
MEETING
You are invited to attend the Annual Meeting
via live webcast, and we request that you vote on the proposals
described in this proxy statement as soon as possible. You can vote your shares without attending the Annual Meeting by appointing
a proxy to vote your shares as explained below. Please note that if your shares are held of record by a broker, bank or other nominee,
you should contact your bank, broker or other nominee (preferably at least several days before the Annual Meeting) and obtain a
“legal proxy” in order to be able to attend, participate in, or vote at the Annual Meeting. See “Matters Related
to Virtual Annual Meeting” below for further instructions.
Notice of Internet Availability of Proxy Materials
In accordance with rules and regulations
adopted by the Securities and Exchange Commission (the “SEC”), instead of mailing a printed copy of our proxy materials,
we are furnishing proxy materials to our stockholders on the Internet and mailing printed copies of the proxy materials only to
a limited number of our stockholders. If you are a stockholder of record and you have received a printed copy of these proxy materials
by mail, you may simply complete, sign and return your proxy card by mail or follow the instructions on your proxy card to submit
your proxy via the Internet or telephone. If you hold your shares in street name, which means your shares are held of record by
a broker, bank, or other nominee, you will receive instructions from your broker, bank, or other nominee on how to vote your shares.
Stockholders receiving a Notice of Internet Availability of Proxy Materials by mail will generally not receive a printed copy of
the proxy materials unless they specifically request a printed copy in accordance with the instructions included in the Notice
of Internet Availability of Proxy Materials. The Notice of Internet Availability of Proxy Materials provides instructions as to
how to (i) access and review the information contained in the proxy materials, (ii) submit voting instructions via the Internet
or telephone or by mail, and (iii) request a printed copy of the proxy materials. You may also participate in and vote at the Annual
Meeting by visiting the following website: https://web.lumiagm.com/293659257. See “Matters Related to Virtual Annual Meeting”
below for further instructions. Even if you plan to participate in the Annual Meeting online, we recommend that you submit your
proxy or voting instructions in advance to authorize the voting of your shares at the Annual Meeting so that your vote will be
counted if you later are unable to attend the Annual Meeting online.
We intend to begin distributing our proxy
materials to stockholders via paper copy mailing and the Notice of Internet Availability of Proxy Materials on or about May 27,
2021.
Business to be Conducted at Annual Meeting; Recommendation
of Board of Directors
Each properly submitted proxy will be voted
in accordance with the stockholder’s instructions contained therein. If no choice is specified, properly executed proxies
that have not been revoked will be voted in accordance with the recommendations of the board of directors as follows:
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FOR election of each of the Class I directors to serve until the company’s 2024 annual meeting of stockholders and until
their respective successors are duly elected and qualified (see “Proposal 1 – Election of Directors”);
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FOR ratification of the selection of Deloitte & Touche LLP as the company’s independent registered public accounting
firm for the current fiscal year (see “Proposal 2 – Ratification of the Selection of Deloitte & Touche LLP as Independent
Registered Public Accounting Firm”); and
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FOR approval, on an advisory basis, of the compensation of the company’s named executive officers (see “Proposal
3 —Advisory Vote to Approve the Compensation of our Named Executive Officers”).
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As to any other business that may properly
come before the Annual Meeting, the persons acting as proxies will vote, or otherwise act, in accordance with their judgment on
such matter. Our board of directors does not presently know of any other business that may come before the Annual Meeting.
The company will pay all costs of proxy solicitation.
In addition to solicitations by mail, our directors, officers and employees, without additional remuneration, may solicit proxies
by telephone, facsimile and personal interviews, and we reserve the right to retain outside agencies for the purpose of soliciting
proxies. Brokers, custodians, and fiduciaries will be requested to forward proxy soliciting materials to the owners of stock held
in their names and, as required by law, we will reimburse them for their out-of-pocket expenses in this regard.
Matters Relating to Virtual Annual
Meeting
Our board of directors
annually considers the appropriate format of our annual meeting of stockholders. As part of our effort to maintain a safe and healthy
environment for our directors, members of management and stockholders who wish to attend the Annual Meeting, and in light of the
novel coronavirus disease, COVID-19, our board of directors believes that hosting a virtual Annual Meeting is in our best interest
and the best interest of our stockholders and enables increased stockholder attendance and participation during a time when many
travel restrictions are in place and may limit attendance at our Annual Meeting. Furthermore, our board of directors has determined
that hosting a virtual annual meeting of stockholders will provide expanded access, improved communication, and cost savings. Hosting
a virtual meeting enables increased stockholder attendance and participation since stockholders can participate from any location
around the world. We intend that the virtual meeting format will provide stockholders a similar level of transparency to the traditional
in-person meeting format and we take steps to ensure such an experience. Our stockholders will be afforded the same opportunities
to participate at the virtual Annual Meeting as they would at an in-person annual meeting of stockholders.
The live audio webcast
of the Annual Meeting will begin promptly at 10:00 a.m. Pacific time. Online access to the audio webcast will open 15 minutes prior
to the start of the Annual Meeting to allow time for you to login and test your internet-connected device’s audio system.
We encourage you to access the meeting in advance of the designated time. We will have technicians ready to assist you with any
technical difficulties you may have accessing the virtual meeting or submitting questions. If you encounter any difficulties accessing
the virtual meeting during the check-in or meeting time, please call the technical support number that will be posted on the virtual
meeting log in page.
If you want to participate
in and vote at the Annual Meeting, you will need will need the control number included on your Notice of Internet Availability
of Proxy Materials or your proxy card or voting instruction form (if you received a printed copy of the proxy materials)
or included in the email to you if you received the proxy materials by email in order to be able to vote your shares
or submit questions during the Annual Meeting.
In addition, if
you hold your shares in “street name” through an intermediary, such as a bank, broker or other nominee, in order to
participate in and vote at the Annual Meeting you must first obtain, in advance, from your bank, broker or other nominee,
a legal proxy reflecting the number of shares of the Company’s common stock that you held as of the record date, your name
and email address, unless you previously obtained a legal proxy from your bank, broker or other nominee. You must then submit a
request for registration to AST by email to proxy@astfinancial.com. Requests for registration must be labeled as “Legal Proxy”
and be received by AST no later than 5:00 p.m. Eastern Time on June 20, 2021. Obtaining a legal proxy may take several days, or
longer, and
stockholders are advised to register as far in advance as possible. Proxy holders registered with AST will receive
a control number and may access the Annual Meeting as described in the paragraph above for stockholders of record.
Our virtual Annual
Meeting allows stockholders to submit questions and comments before and during the Annual Meeting. Stockholders who have accessed
the Annual Meeting with a control number may submit questions during the Annual Meeting that are pertinent to the Company and the
items being brought before a vote at the Annual Meeting, as time permits and in accordance with our rules of procedure for the
Annual Meeting. If you wish to submit a question, you may do so when you are logged into the virtual meeting platform with your
control number by typing your question in the designated spot on the dashboard and clicking “Submit.” After the Annual
Meeting, we will spend up to 15 minutes answering stockholder questions that comply with the rules of conduct for the Annual Meeting,
which will be posted on the virtual meeting web portal. To the extent time doesn’t allow us to answer all of the appropriately
submitted questions, we will answer them in writing on our investor relations website at http://investor.magnite.com/
soon after the meeting. If we receive substantially similar questions, we will group such questions together and provide a single
response to avoid repetition.
Voting and Quorum Requirements
On May 4, 2021, the record date for the determination
of stockholders entitled to notice of and to vote at the Annual Meeting, there were outstanding and entitled to vote an aggregate
of 128,859,048 shares of our common stock, constituting all of our voting stock. Holders of our common stock are entitled to one
vote per share. The holders of a majority of the shares of our common stock outstanding on the record date and entitled to vote
at the Annual Meeting, present via live webcast or by proxy, will constitute a quorum for the transaction of business at the Annual
Meeting and any adjournments and postponements thereof. Shares of our common stock represented via live webcast or by proxy (including
broker non-votes and shares that abstain or do not vote with respect to one or more of the matters presented for stockholder approval)
will be counted for purposes of determining whether a quorum is present at the Annual Meeting.
You may vote FOR, AGAINST or ABSTAIN with
respect to each director nominee (Proposal 1), ratification of the selection of Deloitte & Touche LLP as our independent registered
public accounting firm for the current fiscal year (Proposal 2), and approval of the compensation of the company’s named
executive officers (Proposal 3).
This is an uncontested election and our bylaws
provide that a director nominee will be elected in an uncontested election only if the number of votes cast FOR the nominee’s
election exceeds the number of votes cast AGAINST the nominee’s election, assuming a quorum is present. For the election
of directors, shares of our common stock voted ABSTAIN and broker non-votes are not counted as votes cast and, therefore, will
not be counted in determining the outcome of a director nominee’s election, but will count for purposes of determining whether
a quorum is present.
The affirmative vote of a majority of the
shares of our common stock present in person or represented by proxy and entitled to vote on the matter, assuming a quorum is present,
is required to (i) ratify the selection of Deloitte & Touche LLP as our independent registered public accounting firm for the
current fiscal year (Proposal 2) and (ii) approve, on an advisory basis, the compensation of the company’s named executive
officers (Proposal 3).
For each of Proposals 2 and 3, abstentions
are considered shares present and entitled to vote on such matter. For each of Proposals 2 and 3, abstentions will have the same
effect as votes AGAINST the matter.
Votes during the Annual Meeting will be tabulated
by a representative of American Stock Transfer & Trust Company, who will serve as the Inspector of Elections. Our intention
is to announce the preliminary voting results at the Annual Meeting and to publish the final results within four business days
after the Annual Meeting on a Form 8-K to be filed with the SEC and which we will make available on our website at http://investor.magnite.com/.
Broker Discretionary Voting
If you hold your shares in street name through
a bank, broker, or other nominee, you should follow the instructions that you receive from your bank, broker, or other nominee
regarding steps to take to instruct your bank, broker, or other nominee how to vote your shares. If you do not provide voting instructions,
your bank, broker, or other nominee is permitted to use its own discretion and vote your shares only on routine matters. However,
for non-routine matters, your bank, broker, or other nominee does not have discretionary authority to vote your shares. The election
of directors (Proposal 1) and the approval, on an advisory basis, of the compensation of the company’s named executive officers
(Proposal 3) are each considered a non-routine matter, so brokers are not permitted to vote your shares with respect to such matters
without receiving voting instructions from you. The ratification of the selection of Deloitte & Touche LLP as our independent
registered public accounting firm for the current fiscal year (Proposal 2) is
considered a routine matter. If your broker exercises
its discretion to vote on Proposal 2 at the Annual Meeting, your shares will be voted on such proposal in the manner directed by
your broker, but your shares will constitute “broker non-votes” on each other proposal voted on at the Annual Meeting.
Broker non-votes will not be counted as votes
cast with respect to the election of directors (Proposal 1) and, therefore, will not be counted in determining the outcome of a
director nominee’s election. For approval, on an advisory basis, of the compensation of the company’s named executive
officers (Proposal 3), broker non-votes will not be counted in determining the outcome of those items.
Deadline for Voting Before the Annual
Meeting
If you are a stockholder of record, your
proxy must be received by telephone or the Internet by 11:59 p.m. Eastern Time on June 10, 2021 in order for your shares to be
voted at the Annual Meeting. If you are a stockholder of record and you received a printed set of proxy materials, you also have
the option of completing, signing, dating and returning the proxy card enclosed with the proxy materials before the Annual Meeting
in order for your shares to be voted at the meeting. If you are a beneficial owner of shares of our common stock, please comply
with the deadlines included in the voting instructions provided by the bank, broker or other nominee that holds your shares.
Changing or Revoking Your Vote
If you are a stockholder of record you may
revoke a previously submitted proxy by (i) delivering a subsequently dated written revocation to our Secretary, (ii) providing
subsequent Internet or telephone voting instructions, or (iii) delivering a subsequently dated proxy to our Secretary, in each
case, by 11:59 p.m. Eastern Time on June 27, 2021. You may also revoke your proxy by voting during the Annual Meeting. If your
shares are held through a bank or broker (i.e., in street name), you must contact your broker, bank or other nominee to find out
how to change or revoke your voting instructions. Attendance at the Annual Meeting will not cause your previously executed proxy
to be revoked unless you vote during the Annual Meeting or specifically request such revocation. Each stockholder may appoint only
one proxy holder or representative to attend the meeting on his or her behalf.
Householding of Proxy Materials
Some banks, brokers, and other nominee record
holders may participate in the practice of “householding” proxy materials. This means that only one copy of our proxy
materials or the Notice of Internet Availability of Proxy Materials, as applicable, may have been sent to multiple stockholders
in your household unless such stockholders have notified us of their desire to receive multiple copies of our proxy materials.
We will promptly deliver a separate Notice of Internet Availability of Proxy Materials and, if applicable, a separate proxy statement
and Annual Report, to you if you contact us by mail at Magnite, Inc., 6080 Center Drive, 4th Floor, Los Angeles, California 90045,
Attention: Corporate Secretary or by telephone at (310) 207-0272. If you want to receive separate copies of our proxy materials
in the future, or if you are receiving multiple copies and would like to receive only one copy for your household, you should contact
your bank, broker, or other nominee record holder, or you may contact us at the above address or phone number.
PROPOSAL 1 — ELECTION OF DIRECTORS
Our board of directors is classified into
three classes (designated Class I, Class II and Class III), with members of each class holding office for staggered three-year
terms. There are currently three Class I directors, whose terms expire at the Annual Meeting; three Class II directors, whose terms
expire at the 2022 annual meeting of stockholders; and three Class III directors, whose terms expire at the 2023 annual meeting
of stockholders, in all cases subject to the election and qualification of their respective successors and to their earlier death,
resignation or removal. Proxies cannot be voted for a greater number of persons than the nominees named.
On April 1, 2020, the company completed its
merger with Telaria, Inc. (“Telaria”). Upon effectiveness of the Telaria Merger Telaria, Frank Addante and Lewis W.
Coleman resigned from the company’s board of directors, and Paul Caine, Doug Knopper, Rachel Lam and James Rossman, each
a Telaria director prior to the Telaria Merger, were elected to the company’s board of directors to serve until their respective
successors have been duly elected and qualified, or until any such new director’s earlier death, resignation or removal.
Our process for nominating director candidates
is described below under the caption “Director Candidate Nominating Procedures.” Our board of directors, upon the recommendation
of the board’s nominating & governance committee, nominated each of Robert Frankenberg, Sarah Harden and James Rossman
to stand for election as Class I directors at the Annual Meeting. Each nominee has indicated his or her willingness to serve if
elected, but if he/she is unable or unwilling for good cause to serve, proxies may be voted for a substitute nominee designated
by our board of directors or our board of directors may determine to reduce the size of the board. Each nominee, if elected, will
hold office until the 2024 annual meeting of stockholders, subject to the election and qualification of his respective successor
and to his earlier death, resignation or removal.
The table below lists the nine directors
expected to continue in service following the Annual Meeting and their committee assignments. A summary of the background for each
nominee and continuing director is set forth after the table. These background summaries include the specific experience, qualifications,
attributes, and/or skills that, together with the general characteristics and qualifications described below under the caption
“Director Candidate Nominating Procedures,” contributed to our board’s conclusion that the person should serve
as a director of the company.
|
|
|
Committee
Assignments
|
|
Name
|
Age(1)
|
Position
|
Audit
|
Compensation
|
Nominating
& Governance
|
Member
Since
|
Paul Caine
|
57
|
Chairman of the Board
|
|
|
|
April 2020
|
Michael G. Barrett
|
58
|
CEO and Director
|
|
|
|
March 2017
|
Robert J. Frankenberg
|
74
|
Lead Director
|
|
X
|
|
April 2014
|
Sarah P. Harden
|
49
|
Director
|
|
X
|
|
July 2019
|
Doug Knopper
|
60
|
Director
|
|
Chair
|
X
|
April 2020
|
Rachel Lam
|
53
|
Director
|
X
|
|
X
|
April 2020
|
James Rossman
|
55
|
Director
|
X
|
X
|
|
April 2020
|
Robert F. Spillane
|
70
|
Director
|
X
|
|
Chair
|
April 2014
|
Lisa L. Troe
|
59
|
Director
|
Chair
|
|
X
|
February 2014
|
Director Nominees – Class I
Robert J. Frankenberg joined
our board of directors in connection with our initial public offering in April 2014. Mr. Frankenberg has owned NetVentures, a management
consulting and investment firm focused on the high-tech industry, since 1996. He served on the board of directors of public company
Nuance Communications from March 2000 to June 2018. He previously served as a member of the boards of directors of public companies
Polycom from October 2013 to September 2016, Wave Systems from December 2011 to June 2015 and National Semiconductor until October
2011. He also serves on the board of Veracity Networks, the Sundance Institute and Western Governor’s University (WGU) Development.
Prior to its sale in 2004, Mr. Frankenberg chaired Kinzan, a leading provider of Internet services platforms. Mr. Frankenberg was
the chairman, president, and CEO of Encanto Networks from June 1997 to July 2000 when the company’s major business was sold
to Avaya. Encanto was a leading provider of eBusiness software and services to small business. From April 1994 to August 1996,
Mr. Frankenberg was the Chairman/CEO of Novell, a networking software company. Prior to Novell, Mr. Frankenberg was the Vice President
& Group General Manager of Hewlett-Packard’s Personal Information Products Group, responsible for HP’s personal
computer, server, networking, office software, calculator, and consumer product lines. Mr. Frankenberg joined Hewlett-Packard in
1969 as a manufacturing technician, later became a design engineer, software designer, project manager, engineering and marketing
executive, and general manager. He became a corporate vice president in 1990 and general manager of the Personal Information Products
Group in 1991. He served in the US Air Force from 1965 to 1969. Mr. Frankenberg previously served on various other boards, including
for America OnLine (AOL), and holds several computer design patents. He brings to the board a deep knowledge of software, computer
networks and systems, business operations, the technology industry, and public company governance and board service.
Sarah P. Harden joined our
board of directors in July 2019. Ms. Harden brings more than two decades of experience in digital media, entertainment and direct-to-consumer
video to the Company’s Board. Since January 2018, Ms. Harden has served as the Chief Executive Officer of Reese Witherspoon’s
media company Hello Sunshine. Prior to that, Ms. Harden held executive-level positions at Otter Media/The Chernin Group from 2013
to 2018, including President and Executive Vice President. Ms. Harden previously served as board member of privately held ESPN-Star
Sports, Star China Media and The Moby Group and as a board director overseeing successful acquisitions and exits of private portfolio
companies including Crunchyroll, Fullscreen, Roosterteeth, McBeard, Stagebloc and minority-invested company DLVR. Ms. Harden received
her MBA from Harvard Business School and graduated with honors with a B.A. in international relations from The University of Melbourne.
Ms. Harden brings to the board extensive experience leading and growing digital video, media and entertainment companies.
James Rossman has been
a member of our board of directors since April 2020. He previously served as a member of Telaria’s board from
January 2011 until April 2020, and served as Chairman of Telaria’s board from August 2012 to May 2013. Mr. Rossman currently
serves as an Operating Partner at Silver Lake. From November 2012 to April 2018, he served as Special Advisor to General Atlantic,
a global growth equity firm. From April 2009 to June 2012, he served in various roles at AKQA Inc., a digital services company,
including President and Chief Operating Officer. From April 2001 to March 2009, Mr. Rossman served in several roles at Digitas,
Inc., an integrated advertising agency and a member of the Publicis Groupe, S.A. (as of 2007), including as Chief Operating Officer.
Mr. Rossman received a B.A. in economics from Trinity College and an M.M.M. from the Kellogg School of Management at Northwestern
University. Mr. Rossman brings significant experience in operating and managing media agencies and advertising technology companies.
Incumbent Directors – Class II
Michael G. Barrett has been
a member of our board of directors and has served as our Chief Executive Officer since March 2017. Mr. Barrett has also served
as our President since March 2017, except for the period from April 2020 to June 2020. Mr. Barrett has served as the President
of Ichabod Farm Ventures LLC, an investment company that he founded, since December 2012. From January 2014 to December 2015, he
served as President and Chief Executive Officer of Millennial Media, Inc. From July 2012 to December 2012, Mr. Barrett served as
Global Chief Revenue Officer and Executive Vice President at Yahoo! Inc. Prior to Yahoo!, from January 2012 to July 2012, Mr. Barrett
served as Director at Google Inc., where he led the integration efforts following Google’s acquisition of AdMeld Inc., a
global supply side platform solution for premium publishers. Mr. Barrett previously served as Chief Executive Officer at AdMeld
from November 2008 to December 2011. Mr. Barrett also held senior positions at AOL, Fox Interactive Media and Disney Online. Mr.
Barrett served on the board of directors of Media Math, a demand-side platform, from January 2013 to April 2020. Mr. Barrett brings
to the board extensive experience in digital advertising and advertising technology, as well as significant executive management
expertise.
Rachel Lam has been a member
of our board of directors since April 2020. She previously served as a member of Telaria’s board since May 2013. Ms. Lam
is the Co-Founder and Managing Partner of Imagination Capital, an early stage venture capital firm founded in 2017. From 2003 to
2017, Ms. Lam served as Group Managing Director of the Time Warner Investments Group, the strategic investing arm of Time Warner
Inc. She managed Time Warner's investments in numerous digital media companies, and
served on the board of directors of privately
held Maker Studios and Bluefin Labs prior to their sales to the Walt Disney Company and Twitter, respectively. Ms. Lam currently
serves on the board of directors of The Center for Reproductive Rights. Ms. Lam received a B.S. in industrial engineering and operations
research from U.C. Berkeley and an M.B.A. from Harvard Business School. Ms. Lam brings to the board extensive experience investing
in early and late stage digital media and technology companies, as well experience in banking and mergers and acquisitions.
Robert F. Spillane joined our
board of directors in connection with our initial public offering in April 2014. From 1998 to 2017, Mr. Spillane was a Managing
Principal at DigaComm, L.L.C., a private investment firm that leads early-stage venture capital transactions, primarily involving
companies in technology and digital media. Mr. Spillane was formerly a Principal and President and CEO of the investment group
DM Holdings, Inc., which was formed in 1991 to acquire Donnelley Marketing, Inc. from The Dun and Bradstreet Corporation. Donnelley
Marketing was a leading direct marketing and information services company. Mr. Spillane served as President and CEO, and on the
board of directors of Donnelley Marketing, Inc. Prior to joining DM Holdings, Mr. Spillane was the Executive Vice President of
Diamandis Communications, Inc., then a leading consumer magazine publisher, formed in 1987 in a leveraged buyout of CBS Magazines
from CBS Inc., and also served as a member of the Diamandis board of directors from 1987 to 1990. Prior to Diamandis, Mr. Spillane
held various executive positions with CBS, Inc., including Senior Vice President Group Publisher, Vice President of Circulation,
Vice President General Manager of the CBS Special Interest Magazine Group, and Vice President Sales and Marketing of Fawcett Books.
His ten-year career at CBS culminated in service from 1985 to 1987 as Senior Vice President, Publishing of CBS Magazines. In that
capacity, he was directly responsible for 10 magazines. From 1972 to 1977, Mr. Spillane held various positions with Chesebrough
Ponds, Inc. Mr. Spillane also served on the board of directors of TVSM, Inc., a private media company, from 1992-1998. Mr. Spillane
brings to the board expertise in the publishing and advertising businesses, as well as significant experience with operations and
mergers and acquisitions.
Incumbent Directors – Class III
Paul Caine has been a member
and Chairman of our board of directors since April 2020. He previously served as the non-executive Chairman of Telaria
from January 1, 2020 until April 2020 and as a member of Telaria’s board of directors from June 2014 until April 2020. He
served as Telaria’s executive Chairman from July 2017 to December 31, 2019 and Telaria’s Interim Chief Executive Officer
from February 2017 to July 2017 and as the non-executive Chairman of the Board from July 2016 to February 2017. Mr. Caine has served
as President, On Location at Endeavor Group Holdings, Inc. since January 2020. Mr. Caine has served as the Chairman and Executive
Director of the Board of Engine Group, a global marketing company, since January 2018, and as CEO and Founder of PC Ventures, LLC,
an investment and advisory firm since August 2017. Mr. Caine served as the Chief Global Revenue Officer for Bloomberg Media from
June 2014 to July 2016. From April 2013 to January 2014 he served as Chief Executive Officer and a member of the board of directors
of WestwoodOne, Inc., the largest independent national audio media company in the U.S. From 1989 to 2013, Mr. Caine served in various
capacities at Time Inc., including Executive Vice President, Chief Revenue Officer and Group President Time Inc. from January 2011
until April 2013, Executive Vice President, President and Group Publisher, Style & Entertainment Group from January 2010 to
January 2011, and President, Style & Entertainment Group from January 2008 to January 2010. From 2007 to 2011, Mr. Caine served
on the board of directors of Nexcen Brands, Inc., a strategic brand management company with a focus on retail franchising, where
he served as a member of the audit and governance committees. Mr. Caine received a B.A. in Telecommunications with a minor in Business
from Indiana University. Mr. Caine brings to the board expertise in branding and multi-media advertising sales and marketing, as
well extensive experience serving on the boards of directors of public and private companies.
Doug Knopper has been
a member of our board of directors since April 2020. He previously served as a member of Telaria’s board of directors from
October 2018 until April 2020. Mr. Knopper is the Co-Founder of FreeWheel Media, Inc. and served as its Co-Chief Executive Officer
from February 2007 to September 2017. FreeWheel, which was acquired by Comcast in 2014, provides a technology platform for the
management and monetization of digital television advertising. Prior to founding FreeWheel, Mr. Knopper served as the Chief Executive
Officer of BitPass Inc. from 2005 to 2007 and as Senior Vice President/General Manager of DoubleClick Inc. from 2000 to 2005. Mr.
Knopper received a B.A. from the University of Michigan and an M.B.A from Georgetown University. Mr. Knopper brings to the board
deep expertise and business relationships in digital video advertising and CTV, as well as experience founding, building and leading
advertising technology companies.
Lisa L. Troe has been a member
of our board of directors since February 2014. She is a Senior Managing Director of Athena Advisors LLC, a business advisory firm
she co-founded in 2014. From 2005 through 2013, Ms. Troe was a Senior Managing Director at FTI Consulting, Inc. (NYSE: FCN), a
global business advisory firm. From 1995 through 2005, Ms. Troe served on the staff of the U.S. Securities and Exchange Commission’s
Pacific regional office, including seven years as an Enforcement Branch Chief and six years as the Regional Chief Enforcement Accountant.
Ms. Troe is a director of Stem, Inc. (NYSE: STEM), a technology driven provider of energy storage systems management services that
employs a proprietary AI-enabled software platform to optimize the value of energy savings by automatically switching between battery
power, onsite generation and grid power. Ms. Troe is a director of
HireRight GIS Group Holdings LLC, which provides employers with
global background screening and other workforce solutions. Ms. Troe has served as a director on private company boards in multiple
industries and as an independent member of a special litigation committee of a public gaming industry manufacturing company. Ms.
Troe’s career includes accounting positions in public and private companies and with a Big Four public accounting firm. She
is a National Association of Corporate Directors Board Leadership Fellow, CERT certified in cybersecurity by SEI of Carnegie Mellon
University, a member of NACD and other professional organizations, and a CPA. Ms. Troe brings to the board an extensive background
in public company governance and oversight, enterprise risk management, and public company accounting, financial reporting and
disclosure. She has diverse experience with a wide range of industries, allowing her to bring additional perspective to our board.
Vote Required for Election of Directors
Our bylaws provide that, in an uncontested
election, each director nominee must receive a majority of votes cast in order to be elected to our board of directors. A “majority
of votes cast” means the number of shares voted FOR a director nominee exceeds the number of shares voted AGAINST that director
nominee. Each of our director nominees currently serves on the board. If a nominee who currently serves as a director is not re-elected,
Delaware law provides that the director would continue to serve on the board as a “holdover director.” Our Corporate
Governance Guidelines provide that each incumbent director nominee who is not re-elected is expected to submit to the board his
or her resignation from our board of directors and all committees thereof. The nominating & governance committee, composed
entirely of independent directors, will evaluate and make a recommendation to the board with respect to any submitted resignation
and the board must decide whether to accept or reject the resignation, or to take other action, within 90 days following certification
of the stockholder vote. No director may participate in the nominating & governance committee or the board’s consideration
of his or her own resignation.
THE
BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE ELECTION OF EACH OF ROBERT FRANKENBERG, SARAH HARDEN AND JAMES ROSSMAN
AS CLASS I DIRECTORS.
PROPOSAL 2 — RATIFICATION OF THE
SELECTION OF DELOITTE & TOUCHE LLP
AS INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The audit committee of our board of directors
has selected Deloitte & Touche LLP (“Deloitte”) as our independent registered public accounting firm for the year
ending December 31, 2021, and has further directed that management submit the selection of Deloitte as our independent registered
public accounting firm for ratification by the stockholders at the Annual Meeting. Deloitte has served as our independent registered
public accounting firm since 2018. Although stockholder approval of the selection of Deloitte is not required by law, our board
of directors believes it is advisable as a matter of good corporate governance to give stockholders an opportunity to ratify this
selection. If this proposal is not ratified at the Annual Meeting, the audit committee may (but will not be required to) reconsider
its selection of Deloitte. Even if the selection is ratified, the audit committee may in its discretion select a different independent
registered public accounting firm at any time during the year if it determines that such a change would be appropriate.
Representatives of Deloitte are expected
to be present at the Annual Meeting and will have the opportunity to make a statement if they desire to do so and will also be
available to respond to appropriate questions from stockholders.
Independent Registered Public Accounting
Firm Fees
The aggregate fees billed for audit and other
services provided in the last two fiscal years by Deloitte are as follows:
Fee Category
|
2020
|
|
2019
|
|
|
|
|
Audit Fees(1)
|
$1,985,000
|
|
$932,775
|
|
|
|
|
Audit-Related Fees(2)
|
62,876
|
|
325,289
|
|
|
|
|
Tax Fees(3)
|
—
|
|
—
|
|
|
|
|
All Other Fees(4)
|
253,320
|
|
3,790
|
|
|
|
|
Total
|
$2,301,196
|
|
$1,261,854
|
|
(1)
|
Audit Fees cover professional services
rendered for the audit of our annual financial statements and review of financial statements
included in our quarterly reports on Form 10-Q, and services normally provided by the
accountant in connection with statutory and regulatory filings or engagements.
|
|
(2)
|
Audit-Related Fees cover assurance
and related services that are reasonably related to the performance of audit or review
of our financial statements and not reported as Audit Fees.
|
|
(3)
|
Tax Fees cover tax compliance, advice,
and planning services and consist primarily of review of consolidated federal income
tax returns and foreign tax issues.
|
|
(4)
|
All Other Fees 2019 related to license
fees for accounting research software. All Other Fees in 2020 are related to license
fees for accounting research software and Merger and Acquisition support.
|
Pre-Approval Policy and Procedures
The audit committee
has adopted policies and procedures relating to the pre-approval of all audit and non-audit services that are to be provided by
our independent registered public accounting firm. The audit committee will not approve non-audit services that the independent
registered public accounting firm is not permitted to perform under the rules of the SEC and Public Company Accounting Oversight
Board.
On an annual basis,
the independent registered public accounting firm will propose to the audit committee an audit plan and engagement letter describing
the services the auditor expects to provide and related fees. The final engagement letter and fees agreed by the company acting
pursuant to the direction of the audit committee, and all of the services covered by the final engagement letter, will be considered
pre-approved by the audit committee.
The audit committee
or the Chair of the audit committee acting by delegated authority will approve, if necessary, any changes in terms, conditions
and fees under the engagement letter resulting from changes in the audit scope, company structure or other matters.
The audit committee
has delegated to the Chair of the audit committee the authority to approve on a case-by-case basis any audit or non-audit services,
in amounts up to $200,000 (1) per engagement, (2) per additional category of services, or (3) in excess of pre-
approved
amounts for the specified service. The Chair then reports any services so approved to the audit committee at its next regularly
scheduled meeting.
All services rendered
for fiscal 2020 and fiscal 2019 were pre-approved by the audit committee in accordance with the audit committee’s pre-approval
policies and procedures described above.
Vote Required for Ratification of the Selection of our Independent
Registered Public Accounting Firm
Ratification of the selection of our independent
registered public accounting firm requires the affirmative vote of a majority of the shares represented at the Annual Meeting,
either in person or by proxy, and entitled to vote on the proposal. Abstentions will be considered as a vote “AGAINST”
this proposal.
THE
BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” THE RATIFICATION OF THE SELECTION OF DELOITTE AS OUR INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM.
PROPOSAL 3 — ADVISORY VOTE
TO APPROVE THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS
Under the Dodd-Frank Wall Street Reform
and Consumer Protection Act, or the Dodd-Frank Act, and Section 14A of the Exchange Act of 1934, as amended (the “Exchange
Act”), the company’s stockholders are entitled to vote to approve, on an advisory basis, the compensation of the company’s
named executive officers as disclosed in this proxy statement in accordance with SEC rules.
This vote is not intended to address any
specific item of compensation, but rather the overall compensation of the company’s named executive officers and the philosophy,
policies and practices described in this proxy statement. The compensation of the company’s named executive officers subject
to the vote is disclosed in the executive compensation tables and the related narrative disclosure contained in this proxy statement.
As discussed in those disclosures, the company believes that its compensation policies and decisions are focused on motivating
employees through performance-based variable compensation while ensuring that executives are strongly aligned with the creation
of long-term value for stockholder principles. Compensation of the company’s named executive officers is designed to
enable the company to attract and retain talented and experienced executives to successfully lead the company in a competitive
environment.
Accordingly, the board of directors is
asking the stockholders to indicate their support for the compensation of the company’s named executive officers as described
in this proxy statement by casting a non-binding advisory vote “FOR” the following resolution:
“RESOLVED, that the compensation paid to the
Company’s named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the compensation tables
and narrative discussion, is hereby APPROVED.”
Because the vote is advisory, it is not
binding on the board of directors or the company. Nevertheless, the views expressed by the stockholders, whether through this vote
or otherwise, are important to management and the board of directors and, accordingly, the board of directors and the compensation
committee intend to consider the results of this vote in making determinations in the future regarding executive compensation arrangements.
The board of directors has adopted a policy of providing for annual advisory votes to approve executive compensation. Unless the
board of directors modifies its policy on the frequency of holding such advisory votes, the next such advisory vote will occur
in 2022.
Vote Required for Approval, on an Advisory Basis, of the
Compensation of our Named Executive Officers
Approval, on an advisory basis, of the compensation
of our named executive officers requires the affirmative vote of a majority of the shares represented at the Annual Meeting, either
in person or by proxy, and entitled to vote on the proposal. Abstentions will have the effect of a vote “AGAINST” this
proposal.
THE
BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” THE APPROVAL, ON AN ADVISORY BASIS, OF THE COMPENSATION
OF THE COMPANY’S NAMED EXECUTIVE OFFICERS.
CORPORATE GOVERNANCE
Corporate Governance Guidelines
Our board of directors has developed corporate
governance practices to help it fulfill its responsibility to stockholders to oversee the work of management in the conduct of
our business and to seek to serve the long-term interests of stockholders. The Company’s corporate governance practices are
memorialized in our Corporate Governance Guidelines which direct our board’s actions with respect to, among other things,
the composition and director qualifications of our board of directors, the composition of the standing committees of our board
of directors, director orientation and continuing education, stockholder communications with our board of directors, succession
planning and the annual performance evaluation of our board of directors. A current copy of our Corporate Governance Guidelines
is available on our website at http://investor.magnite.com.
Director Independence
Our common stock
is listed on the Nasdaq Global Select Market of The Nasdaq Stock Market LLC (“Nasdaq”), which requires that a majority
of a listed company’s board of directors be independent. In addition, the rules of Nasdaq require that, subject to specified
exceptions, each member of a listed company’s audit, compensation and nominating/corporate governance committees be independent.
Under the rules of Nasdaq, a director will only qualify as an “independent director” if, in the opinion of the board
of directors, that director does not have a relationship that would interfere with the exercise of independent judgment in carrying
out the responsibilities of a director.
Our board of directors
has undertaken a review of the independence of each director and considered whether each director has any material relationships
with us. As a result of this review, our board of directors has determined that Mr. Frankenberg, Ms. Harden, Mr. Knopper, Ms. Lam,
Mr. Rossman, Mr. Spillane and Ms. Troe are independent directors as defined under the listing requirements and rules of Nasdaq
for purposes of service on the board of directors. Mr. Barrett is not considered independent because he currently serves as our
Chief Executive Officer. Mr. Caine is not considered independent due to his previous service as Executive Chairman and Interim
Chief Executive Officer of Telaria.
In addition to qualifying
as “independent” under the listing requirements and rules of Nasdaq, members of the board’s audit committee and
compensation committee members must also satisfy additional, heightened independence standards under applicable SEC rules and regulations
and Nasdaq listing requirements. Our board of directors has determined that each member of our audit committee and compensation
committee satisfies these heightened independence standards.
Board Leadership Structure
Our Corporate Governance Guidelines provide
that our board of directors will determine in its discretion from time to time whether the roles of Chairman and Chief Executive
Officer should be combined or separated. Our board believes that strong, independent board leadership is a critical aspect of effective
corporate governance, and to promote open discussion among our non-management directors, our Corporate Governance Guidelines provide
that, when the Chairman is a non-independent director, the independent directors will designate an independent director to act
as Lead Director.
In April 2020, upon the completion of the
Telaria Merger, Mr. Caine was appointed as Chairman of the board. The responsibilities of the Chairman include: (1) leading and
presiding at board meetings; (2) assisting in establishing the agenda for each board meeting, with input from the Lead Director,
as appropriate; (3) conferring regularly with CEO and consulting with the CEO regarding board meeting schedules and agendas; (4)
presiding at executive sessions of the Board, other than sessions consisting solely of independent directors; (5) consulting with
committees of the board on matters within the scope of their responsibilities; (6) facilitating communications between directors
and between directors and senior management; (7) providing feedback between the CEO and directors regarding strategic issues, board
management, and potential conflicts; (8) working with appropriate committees of the board to ensure adequate CEO and senior management
succession plans are in place; and (9) being available for consultation and communication with major stockholders upon request.
Pursuant to our bylaws, until April 1, 2022,
Mr. Caine will serve as Chairman of the board so long as he continues to serve as a member of the board of directors. If Mr. Caine
ceases to be a member of the board of directors prior to April 1, 2022, then the board of directors, acting by the affirmative
vote of both a majority of the then-serving “Rubicon Project continuing directors” and a majority of the then-serving
“Telaria continuing directors” (each as further described below under “—Board Size and Composition”),
will elect one of its members to be the Chairman of the board.
Because Mr. Caine is not deemed independent,
Robert J. Frankenberg has been appointed and currently serves in the role of Lead Director. The responsibilities of the Lead Director
include: (1) presiding at meetings of independent directors; (2) if the Chairman is not present, presiding at board meetings and
executive sessions of the board; (3) providing input to the CEO and Chairman with respect to the board agenda and schedule; (4)
serving as liaison between the independent directors and the Chairman and/or Chief Executive Officer on sensitive matters; (5)
being available for consultation and communication with major stockholders upon request; (6) calling meetings of independent directors;
and (7) serving as designated director for reviewing stockholder communications.
Board Size and Composition
Our board of directors consists of nine members.
Pursuant to our bylaws, our board of directors will continue to consist of nine directors until at least April 1, 2022, the second
anniversary of the completion of the Telaria Merger.
Until April 1, 2022, our board of directors
will be comprised of four “Rubicon Project continuing directors” (currently, Robert J. Frankenberg, Sarah P. Harden,
Robert F. Spillane and Lisa L. Troe) (or, in the event of a vacancy among the Rubicon Project continuing directors, a replacement
director proposed by a majority of the remaining Rubicon Project continuing directors), each of whom shall meet the independence
standards of Nasdaq, four “Telaria continuing directors” (currently, Paul Caine, Doug Knopper, Rachel Lam and James
Rossman) (or, in the event of a vacancy among the Telaria continuing directors, a replacement Telaria continuing director proposed
by a majority of the remaining Telaria continuing directors), at least three of whom shall meet the independence standards of Nasdaq,
and our chief executive officer.
Board and Committee Meetings
In 2020, our board of directors met 19 times,
the audit committee met 9 times, the compensation committee met 8 times, and the nominating & governance committee met 4 times.
During 2020, each director attended at least 75% of the aggregate number of board meetings and meetings held by all committees
on which the director then served during the time in which he or she served on our board of directors.
Directors are expected to attend the annual
stockholders’ meeting absent unusual circumstances. All of our then-serving directors attended the 2020 annual meeting.
Board Committees
Our board of directors has established
three standing committees – audit, compensation, and nominating & governance – each of which operates under a written
charter that has been approved by our board. Committee membership is indicated in the table above. A current copy of each committee’s
charter is posted on the “Corporate Governance” section of our Investor Relations website at http://investor.magnite.com.
Each committee reviews and evaluates, at least annually, the performance of the committee and its members and the adequacy of its
charter.
Audit Committee
The audit committee is responsible for, among
other things, providing assistance to the board of directors in fulfilling its oversight responsibilities regarding the integrity
of our financial statements, our compliance with applicable legal and regulatory requirements, the integrity of our financial reporting
processes, including our systems of internal accounting and financial controls, the performance of our internal audit function
and our independent registered public accounting firm, and our financial policy matters. The audit committee approves the services
performed by our independent registered public accounting firm and reviews their reports regarding our accounting practices and
systems of internal control over financial reporting, as applicable. The audit committee also oversees the audit efforts and confirms
the independence of our independent registered public accounting firm. Our board of directors has determined that each member of
our audit committee satisfies the financial literacy requirements of the SEC and Nasdaq, and that each of Ms. Troe, Ms. Lam, Mr.
Rossman and Mr. Spillane qualifies as an “audit committee financial expert,” as defined in the SEC rules.
Compensation Committee
The compensation committee is responsible
for, among other things, overseeing our overall compensation structure, policies and programs, and assessing whether our compensation
structure establishes appropriate incentives for officers and employees. The compensation committee also reviews and approves corporate
goals and objectives relevant to compensation of our Chief Executive
Officer and other executive officers, evaluates the performance
of these officers in light of those goals and objectives, sets the compensation of these officers based on such evaluations and
reviews, and, except with respect to his own compensation, based on the recommendation of the Chief Executive Officer, determines
any employment-related agreements and any proposed severance arrangements or change in control or similar agreements with these
officers. The compensation committee also administers the issuance of equity awards under our stock plans and is permitted to delegate
such responsibility to our Chief Executive Officer with respect to employees other than executive officers. The compensation committee
has delegated to our Chief Executive Officer authority to approve equity awards, subject to the following limitations: (1) no awards
may be granted by the Chief Executive Officer to himself or herself, or to members of the board of directors or any executive officer;
(2) no individual may be granted more than 100,000 shares in the aggregate in any rolling 365-day period; (3) no more than 250,000
shares may be granted in the aggregate to all recipients in any calendar quarter, or 1,000,000 shares in the aggregate in any calendar
year; and (4) awards must be made on standard terms (e.g., four-year vesting) pursuant to the company’s standard award documents.
The compensation committee is also responsible for the preparation of a report on executive compensation, when and as required
by the SEC rules, to be included in our Annual Report and annual proxy statement. Our board of directors has determined that each
member of our compensation committee qualifies as a “non-employee director,” within the meaning of Rule 16b-3 of the
Exchange Act.
The compensation committee has the authority,
in its sole discretion, to retain or obtain the advice of such consultants, outside counsel and other advisers as it determines
appropriate to assist it in the full performance of its functions, at the company’s expense. Since December 2014, the compensation
committee has engaged Semler Brossy Consulting Group, LLC (“Semler Brossy”) annually to act as its independent compensation
consultant. During 2020, Semler Brossy’s work with the compensation committee included analysis, advice, and recommendations
on total compensation philosophy; peer groups and market assessment and analysis; compensation program design, including program
goals, components, and metrics; equity usage and allocation; compensation trends in comparable business sectors and in the general
marketplace for senior executives; regulatory factors; and the compensation of the chief executive officer and the other named
executive officers, including advice on the design of cash-based and equity-based compensation.
Semler Brossy provides analysis and advice
regarding our executive compensation practices, including with respect to the amount and form of executive and non-employee director
compensation. A representative of Semler Brossy attends meetings at which the compensation committee undertakes significant review
of, and/or action with respect to, executive officer or non-employee director compensation. Semler Brossy also consults regularly
with the chair of the compensation committee. Semler Brossy reports directly and solely to the compensation committee and performs
compensation consulting services for the compensation committee at its request. Semler Brossy is not engaged to perform services
directly for our management. The compensation committee has concluded that no conflict of interest exists with respect to its engagement
of Semler Brossy nor are there other factors that would adversely impact Semler Brossy’s independence in advising the compensation
committee under applicable SEC and Nasdaq rules. The compensation committee reached this conclusion after considering the following
six factors, as well as Semler Brossy’s views regarding its independence and other information the compensation committee
deemed relevant: (i) the provision of other services to us by Semler Brossy; (ii) the amount of fees received from us by Semler
Brossy, as a percentage of the total revenue of Semler Brossy; (iii) the policies and procedures of Semler Brossy that are designed
to prevent conflicts of interest; (iv) any business or personal relationship of the Semler Brossy consultants with a member of
the compensation committee; (v) any of our stock owned by the Semler Brossy consultants; and (vi) any business or personal relationship
of the Semler Brossy consultants or Semler Brossy with any of our executive officers.
Nominating & Governance Committee
The nominating & governance committee
is responsible for, among other things, developing and recommending to the board of directors criteria for identifying and evaluating
candidates for directorships and making recommendations to the board of directors regarding candidates for election or reelection
to the board of directors at each annual stockholders’ meeting. In addition, the nominating & governance committee is
responsible for overseeing our Corporate Governance Guidelines and reporting and making recommendations to the board of directors
concerning corporate governance matters. The nominating & governance committee also is responsible for making recommendations
to the board of directors concerning the structure, composition and function of the board of directors and its committees. Our
board of directors has determined that each member of our nominating & governance committee satisfies the requirements for
independence under the rules and regulations of Nasdaq.
Director Candidate Nominating Procedures
The process followed by the nominating &
governance committee to identify and evaluate director candidates includes requests for recommendations (which may include through
retained third-party search firms, as well as less formal methods such as personal contacts), committee meetings from time to time
to evaluate biographical information and material relating to potential candidates, and interviews of candidates by board members.
In identifying and evaluating director candidates and determining whether to
nominate any particular candidate, the nominating
& governance committee considers the director candidates’ specific experience, qualifications, attributes and skills,
together with the following general characteristics and qualifications, which are set forth in our Corporate Governance Guidelines:
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•
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highest personal and professional ethics, integrity, and values;
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•
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independent, creative, and disciplined thought processes;
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•
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practical wisdom and mature judgment;
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•
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broad training and experience at the policy-making or strategic level;
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•
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a record of achievement and expertise that is useful to the company and complementary to the background and experience of other
board members, so that a useful balance of members on the board can be achieved and maintained;
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•
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willingness to devote the required amount of time to carrying out the duties and responsibilities of board membership;
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•
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commitment to serve on the board over a period of several years to develop knowledge about the company;
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•
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unless management directors, independence under relevant standards; and
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•
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diversity of occupational and personal backgrounds among the members of the board.
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While the nominating & governance committee
does not have a formal policy regarding board diversity, it is a factor that the nominating & governance committee takes into
account in identifying director nominees. The nominating & 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, and assesses board diversity, among other things, in its periodic assessment of the composition,
operation, and effectiveness of the board.
The nominating & governance committee
does not assign specific weights to particular criteria, but does believe that the backgrounds and qualifications of our directors,
considered as a group, should provide a composite mix of experience, knowledge and abilities that will facilitate our board’s
fulfillment of its responsibilities.
Stockholders may recommend individuals to
the nominating & governance committee for consideration as potential director candidates and inclusion in our proxy statement
for the 2022 annual meeting of stockholders by submitting their names, together with appropriate biographical information and background
materials. Such information should be sent to the Nominating & Governance Committee, c/o Corporate Secretary, Magnite, Inc.,
6080 Center Drive, 4th Floor, Los Angeles, California 90045. Assuming that appropriate biographical and background material has
been provided on a timely basis, the nominating & governance committee will evaluate stockholder-recommended candidates by
following the same process, and applying the same criteria, as it follows for other candidates. If our board determines to nominate
a stockholder-recommended candidate, then his or her name will be included in our proxy materials, including our proxy card, for
the 2022 annual meeting of stockholders.
Board Evaluation Process
Our board of directors and each of our standing
committees conducts an annual self-evaluation to assess its performance. Each director participates in these evaluations and our
General Counsel and the Chair of the nominating & governance committee then review and discuss the results with the full board.
In addition, as part of the process of considering directors for re-election to the board, individual directors are annually informally
evaluated by the nominating & governance committee on the basis of their attendance at meetings and their preparedness, participation,
candor and overall contribution to the board, as well as other criteria that the nominating & governance committee deems appropriate.
Communicating with the Independent Directors
Stockholders and other interested parties
who wish to communicate on any topic with our board, or with a specific director or directors, including the Chairman or the independent
directors as a group, may address such communications to our board of directors c/o Corporate Secretary, Magnite, Inc., 6080 Center
Drive, 4th Floor, Los Angeles, California 90045.
Our board of directors will give appropriate
attention to written communications that are submitted by stockholders, and will respond if and as appropriate. The Lead Director,
with the assistance of our General Counsel and Chief Financial Officer, is primarily responsible for reviewing communications from
stockholders and for providing copies or summaries to the other directors as considered appropriate. In accordance with the procedures
outlined in Magnite’s Corporate Governance Guidelines, communications (or summaries thereof) that relate to corporate governance,
long-term corporate strategy, and other important substantive matters should be forwarded to the other directors, unless there
is a compelling reason not to forward such communications. In general, the director who reviews such communications may decline
to forward communications that relate to ordinary business affairs or personal grievances, or are repetitive or duplicative, unless
there is a compelling reason to forward such communications.
Board’s Role in Risk Oversight
Our board of directors exercises oversight
of risk management consistent with its duty to direct the management of the business and affairs of the company. The audit committee,
pursuant to its charter, is responsible for reviewing company practices with respect to risk assessment and risk management. The
audit committee works directly with members of senior management and the company’s internal audit staff to fulfill this responsibility
and reports as appropriate to our board. Our board’s other committees also participate in risk oversight by considering risk
aspects of matters within the scope of their responsibilities.
Oversight of risk is also effected by our
board as a whole in various ways.
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The board reviews the structure and operation of various departments and functions of the company. In those reviews, the board
discusses with management risks affecting those departments and functions and management’s approaches to mitigating those
risks.
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•
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The board reviews and approves each year’s operating plan and budget, and these reviews cover risks that could affect
the plan and measures to cope with those risks.
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•
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In its review and approval of our Annual Reports on Form 10-K, the board reviews and discusses with management the company’s
business and related risks, including as described in the “Business,” “Risk Factors” and “Management’s
Discussion and Analysis” sections of the document. The audit committee conducts a similar process quarterly in connection
with the preparation of Quarterly Reports on Form 10-Q.
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•
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When the board reviews particular transactions and initiatives that require board approval as a legal matter, or that otherwise
merit board involvement, the board generally includes related risk analysis and mitigation plans among the matters addressed with
management.
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•
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The board or audit committee meet quarterly with our internal or external cybersecurity resources to review the efficacy of
our cybersecurity risk initiatives and related policies and procedures. Lisa Troe, our audit committee chair, also has a certificate
in cybersecurity oversight from the Software Engineering Institute at Carnegie Mellon University.
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The day-to-day identification and management
of risk is the responsibility of the company’s management. As the market environment, industry practices, regulatory requirements,
and the company’s business evolve, it is expected that management and our board will respond with appropriate adaptations
to risk management and oversight.
Our board believes that the process it has
established to administer the board’s risk oversight function would be effective under a variety of leadership frameworks
and, therefore, does not have a material effect on our choice of the board’s leadership structure described above under “Board
Leadership Structure.”
Risk Assessment in Compensation Programs
The compensation committee annually assesses
our executive and broad-based compensation and benefits programs on an overall basis to determine whether the programs’ provisions
and operations create undesired or unintentional material risk. This risk assessment process takes into account numerous compensation
terms and practices that we maintain that aid in controlling risk, including the mix of cash, equity, and near- and long-term incentive
programs, the use of multi-year vesting periods for equity awards, and a variety of performance criteria for incentive compensation,
the claw-back provisions that apply to our annual incentive cash plan and equity plan, and the cap on the maximum cash incentive
awards that can be earned in a given year regardless of company performance. This risk assessment process also includes a review
of program policies and practices, program analysis to identify risk and risk controls, and determinations as to the sufficiency
of risk identification and risk control, the balance of potential risk to
potential reward, and the significance of the programs
and their risks to company strategy. Although the compensation committee reviews all significant compensation programs, it focuses
on those programs with variable payout, in particular assessing the ability of participants to directly affect payouts, and the
controls on such situations.
Based on the foregoing, we believe that our
compensation policies and practices do not create risks that are reasonably likely to have a material adverse effect on the company
as a whole. We also believe that our incentive compensation programs do not encourage risk-taking beyond the organization’s
ability to effectively identify and manage significant risks; are compatible with effective internal controls and our risk-management
practices; and are adequately supported by the compensation committee’s oversight of our executive compensation programs.
Board’s Role in Oversight of Environmental, Social
and Governance Matters
We believe that a sustainable business strategy
that integrates Environmental, Social, and Governance (“ESG”) considerations is key to creating long-term value for
our shareholders and our other stakeholders. We have a long history of integrating ESG considerations into our mission, business
strategy, and operations, and considering the impact we have on our communities and stakeholders. Our board of directors exercises
oversight of ESG matters, and our board, executive management team and employees are dedicated to the development and continued
advancement of an ESG strategy. To that end, this year, we will be conducting our first sustainability assessment to identify the
most impactful ESG issues for our company and our stakeholders. Through this process, we will identify several strategic focus
areas that we intend to integrate into our long-term corporate strategy and business objectives over time.
Human Capital Management
We are committed to fostering and maintaining
a culture that promotes diversity, equity, and inclusion. As a global employer, we value the diversity of background and experiences
that our employees contribute to our company. We strongly believe that a diverse, equitable, and inclusive workplace contributes
to ensuring “the best” employee experience. We also believe that it is vital to attracting and retaining talent, which
in turn is connected to our ability to create value for our stockholders. In recognition of this, in 2020 we created the Magnify
Council, an employee-led council focused on creating a more diverse, equitable and inclusive organization on a global scale. These
efforts include, among others, programs to develop diverse talent, and supporting external partners that emphasize the global promotion
of diversity, equity, and inclusion. For instance, we are a sponsor of She Runs It, an organization dedicated to the support and
advancement of women in all facets of marketing, media and tech.
We strive to build a culture of excellence
that is high-performing and results-oriented while emphasizing transparency, collaboration and innovation. Examples of this mindset
include:
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We seek individuals that are committed to seeing the big picture and being catalysts of change.
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We ask our employees to empower others, make a difference and ensure our company is an exciting place to work, not just a “job.”
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We reward team and individual excellence and are committed to creating an exceptional workplace environment
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We solicit feedback from our employees in annual engagement surveys.
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We believe in continual feedback on performance. Our employees set goals at a regular cadence throughout the year and managers
provide achievement ratings.
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We analyze voluntary employee turnover to understand and address trends.
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We give equity to our employees to promote alignment and ownership.
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Our employees, and the talent they bring
to bear, are our most valuable resource. The global COVID-19 pandemic created unprecedented challenges at the business and personal
levels. In response, we took a number of measures to protect the health and safety of our employees, including implementing a work-from-home
policy, which we expect to continue in the foreseeable future for the majority of our employees, introducing quarterly mental health
days, deploying a global employee assistance program, and launching a digital platform with access to live wellness classes and
discussions.
Code of Business Conduct and Ethics
Our board of directors has adopted a Code
of Business Conduct and Ethics that applies to each of our directors, officers and employees. The full text of our Code of Business
Conduct and Ethics is posted on the “Corporate Governance” section of our Investor Relations website at http://investor.magnite.com.
We intend to post any amendment to our Code of Business Conduct and Ethics, and
any waivers of the Code for directors and executive
officers, on the same website to the extent required by rules adopted by the SEC and Nasdaq.
Policy Against Hedging
We recognize that hedging against losses
in company shares may disturb the alignment between stockholders and employees that our equity awards are intended to build. Accordingly,
we have incorporated prohibitions on various hedging activities within our Insider Trading Policy, which applies to directors,
officers and certain employees who we have designated as insiders, as well as such persons’ family members, life partners,
or owned or controlled entities. The policy prohibits all transactions that are designed to hedge or offset any decrease in the
market value of our securities, including prepaid variable forward contracts, equity swaps, futures, collars, exchange funds, options,
puts and calls. The policy also prohibits short sales of our securities and purchases or sales of puts or calls for speculative
purposes.
Compensation Committee Interlocks and
Insider Participation
Ms. Harden and Messrs. Knopper, Rossman,
Frankenberg, Coleman and Spillane served on the company’s compensation committee during the last completed fiscal year. At
the closing of the Telaria Merger on April 1, 2020, Mr. Knopper and Mr. Rossman were appointed to the board of directors and commenced
service on the compensation committee, Mr. Spillane ceased serving as a member of the compensation committee and Mr. Coleman resigned
as a member of the board of directors and member of the compensation committee. None of the members of the compensation committee
is or has at any time been an officer or employee of the company. There are no interlocking relationships (and there were no such
interlocking relationships during 2020) between our board of directors, executive officers or the compensation committee, on the
one hand, and the board of directors, executive officers or the compensation committee of any other company, on the other
hand.
DIRECTOR COMPENSATION
Each member of our board of directors who
is not employed by us or any of our subsidiaries, referred to as a non-employee director, is compensated for service on our board
through a combination of annual cash retainers and equity awards. For purposes of our director compensation program, a non-employee
director is a member of our board who is not, and has not been within the previous 180 days, either an employee of ours or any
of our subsidiaries or a consultant performing material services to us or any of our subsidiaries. In order to align the interests
of non-employee directors and stockholders, equity awards constitute a majority of total director compensation.
Directors are reimbursed for travel, food,
lodging and other expenses directly related to their activities as directors, such as attendance at board or committee meetings.
Directors are also entitled to the protection provided by their indemnification agreements and the indemnification provisions in
our certificate of incorporation and bylaws, and they receive coverage under a director and officer insurance policy that we maintain.
2020 Market Assessment
In early 2020, in connection with the Telaria
Merger, the compensation committee engaged Semler Brossy to perform a comprehensive review of non-employee director pay to ensure
the programs were competitive and reflective of the larger, combined company going forward. Following the close of the merger in
April 2020, the following changes were made: the membership cash retainer was increased to $50,000 (from $30,000) and the Chairman
retainer for Mr. Caine’s role as non-employee Chairman was established at an additional $50,000 for his leadership role.
For 2020, directors received annual cash
retainer fees as described in the table below for board and committee service. The fees are paid in four equal quarterly advance
installments and prorated for any partial year of board service.
Position
|
Retainer
($)
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Board Member
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50,000(1)
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Audit Committee Chair
|
20,000
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Compensation Committee Chair
|
12,500
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Nominating & Governance Committee Chair
|
7,500
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Audit Committee Member
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10,000
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Compensation Committee Member
|
5,000
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Nominating & Governance Committee Member
|
3,500
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Board Chairman
|
50,000
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Lead Director
|
15,000
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(1)
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As noted above, effective April 1, 2020, the board member cash retainer was increased to $50,000.
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Equity compensation for non-employee directors
consists of (i) an initial equity award with a calculated value of $375,000 for each newly-elected or appointed non-employee director,
and (ii) annual awards with a calculated value of $125,000. For 2020, equity awards for directors consisted solely of restricted
stock units covering a number of shares determined by dividing the calculated value of the award by the closing price of a share
of our common stock on the grant date.
The initial equity award is granted on
the date of appointment to the board or attainment of non-employee director status, unless the board or compensation committee
specified another issuance date. Annual equity awards are issued on the date of each annual meeting or the date of attainment of
non-employee director status. If no intervening annual meeting has been held, annual equity awards will be granted on a date specified
by the compensation committee that is at least 30 calendar days after the first anniversary of
the prior year’s annual meeting.
The first annual award for non-employee directors who join the board at any time other than the date of an annual meeting is subject
to proration for the partial year of service ending on the date of the next annual meeting.
Initial equity awards vest, subject to
continued board service, in three equal annual increments, on the first, second, and third anniversaries of the date of commencement
of board service or attainment of non-employee director status or, if earlier, upon (but effective immediately prior to) the occurrence
of a change in control of Magnite. Annual equity awards vest, subject to continued board service, on the first anniversary of the
date of grant or, if earlier, upon the occurrence of either (1) a change in control of Magnite (effective immediately prior thereto)
or (2) the first regular annual meeting occurring in the year immediately following the year in which such annual equity awards
were granted. In addition, if a non-employee director ceases board service for any reason other than removal for cause before vesting
in full of equity awards, then the director’s awards vest with respect to a pro-rata portion of the underlying shares (up
to but not exceeding the number of unvested shares remaining subject to such awards) determined based upon the period of board
service. Vesting of equity awards will cease, and unvested equity awards will lapse, upon a recipient’s removal for cause
from board service.
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Director
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Equity Retention Guidelines
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Under equity retention guidelines implemented
by the board in April 2016, each director is required to accumulate within five years from the later of the date the guidelines
were implemented and the date of commencement of service for a new director, and thereafter to retain for the duration of board
service, an amount of equity equal to five times the director’s base board cash compensation. Equity that counts toward the
ownership requirement includes: (1) shares owned outright by the director or beneficially owned by the director by virtue of being
held by a member of the director’s immediate family members residing in the same household or in a trust for the benefit
of the director or his or her immediate family residing in the same household; (2) shares held in qualified plans or IRAs; (3)
vested shares (or vested restricted stock units) deemed to be held in non-qualified plans; (4) the in-the-money portion of vested
stock options (but not unvested stock options); and (5) unvested time-based restricted shares (or restricted stock units). Until
the minimum level of company equity is achieved, a director is prohibited from selling or otherwise transferring beneficial ownership
of more than one-half of: (a) the vested after-tax shares of our common stock obtained as a result of the vesting of any restricted
stock or restricted stock unit award made after implementation of the equity retention guidelines; or (b) the shares of our common
stock subject to the vested portion of any stock option award made after implementation of the equity retention guidelines, net
of any shares surrendered or sold to cover exercise price and/or income tax resulting from the exercise.
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2020
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Director Compensation Table
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The following table sets forth all compensation
provided to our non-employee directors for 2020. The compensation for Mr. Barrett, our Chief Executive Officer, is described in
the “Executive Compensation” section below. Mr. Barrett did not receive any compensation for his services as a director
in 2020. In April 2020, the compensation committee approved a temporary 30% base salary reduction for the Board Cash Retainer in
response to COVID-19 and the associated reduction in our workforce and cost-cutting initiatives. The Board Cash Retainers were
reinstated in October 2020.
Name
|
Fees
Earned
or Paid in
Cash ($)(1)
|
Stock
Awards($)(2)(3)
|
Option
Awards ($)(2) (4)
|
Total
($)
|
Frank Addante(5)
|
—
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—
|
—
|
—
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Paul Caine(6)
|
$85,000
|
$125,000
|
—
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$210,000
|
Lewis W. Coleman(7)
|
—
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—
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—
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—
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Robert Frankenberg
|
$59,500
|
$125,000
|
—
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$184,500
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Sarah P. Harden
|
$46,750
|
$125,000
|
—
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$171,750
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Doug Knopper(6)
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$56,100
|
$125,000
|
—
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$181,100
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Rachel Lam(6)
|
$53,975
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$125,000
|
—
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$178,975
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James Rossman(6)
|
$55,250
|
$125,000
|
—
|
$180,250
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Robert F. Spillane
|
$57,375
|
$125,000
|
—
|
$182,375
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Lisa L. Troe
|
$62,475
|
$125,000
|
—
|
$187,475
|
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(1)
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Consists of annual board retainer and fees for service as Chairman, a committee chair, committee member, or Lead Director,
as the case may be. See the narrative disclosure above for a description of such fees.
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(2)
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In accordance with the rules of the SEC, these amounts represent the aggregate grant date fair value of the stock awards and
option awards granted to the non-employee directors during the fiscal year computed in accordance with ASC 718. Our equity awards
valuation approach and related underlying assumptions for awards granted in 2020 are described in Note 2 “Organization and
Summary of Significant Accounting Policies—Stock-Based Compensation” and Note 13 “Stock-Based Compensation”
to the Consolidated Financial Statements in our Annual Report on Form 10-K. The reported amounts do not necessarily reflect the
value that may be realized by the non-employee director with respect to the awards, which will depend on future changes in stock
value and may be more or less than the amount shown.
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(3)
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Stock awards consist of an annual award of 18,436 restricted stock units granted on July 8, 2020 to each director serving on
our board at such time, with an aggregate grant date fair market value as described in footnote 2 of $125,000. As of December 31,
2020, the aggregate number of shares of our common stock covered by unvested stock awards held by each of our non-employee directors
was as follows:
|
Frank Addante
|
—
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Paul Caine
|
18,436
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Lewis W. Coleman
|
—
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Robert J. Frankenberg
|
18,436
|
Sarah P. Harden
|
56,200
|
Doug Knopper
|
18,436
|
Rachel Lam
|
18,436
|
Robert F. Spillane
|
18,436
|
Lisa L. Troe
|
18,436
|
James Rossman
|
18,436
|
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(4)
|
As of December 31, 2020, the aggregate number of shares of our common stock covered by stock options held by each of our non-employee
directors was as follows:
|
Frank Addante
|
—
|
Paul Caine
|
—
|
Lewis W. Coleman
|
—
|
Robert J. Frankenberg
|
86,500
|
Sarah P. Harden
|
—
|
Doug Knopper
|
—
|
Rachel Lam
|
—
|
Robert F. Spillane
|
86,500
|
Lisa L. Troe
|
86,500
|
James Rossman
|
36,066
|
(5) Mr.
Addante resigned from the Board effective April 1, 2020, at the closing of the Telaria Merger.
(6) Ms. Lam and Messrs. Caine, Knopper and Rossman were appointed to the Board effective April 1, 2020, at the closing of the Telaria Merger.
(7) Mr.
Coleman resigned from the Board effective April 1, 2020, at the closing of the Telaria Merger.
REPORT OF THE AUDIT COMMITTEE
OF THE BOARD OF DIRECTORS
The audit committee of Magnite’s board
of directors is composed of four members and acts under a written charter that has been approved by Magnite’s board of directors.
The members of the audit committee are independent directors, based upon standards set forth in applicable laws, rules, and regulations.
The audit committee has reviewed and discussed the audited financial statements with management, and has discussed with Magnite’s
independent registered public accounting firm, Deloitte & Touche LLP (“Deloitte”) the matters required to be discussed
by the applicable standards of the Public Company Accounting Oversight Board and the SEC.
The audit committee has also received the
written disclosures and the letter from Deloitte required by the applicable requirements of the Public Company Accounting Oversight
Board regarding Deloitte’s communications with the audit committee concerning independence, and has discussed with Deloitte
its independence.
Management is responsible for the company’s
financial reporting process and the system of internal controls, including internal control over financial reporting, and procedures
designed to promote compliance with accounting standards and applicable laws and regulations. Deloitte is responsible for the audit
of the consolidated financial statements. The audit committee’s responsibility is to monitor and oversee these processes
and procedures.
The audit committee’s meetings facilitate
communication among the members of the audit committee, management, the internal auditors, and Deloitte. The audit committee separately
met with each of the internal auditors and Deloitte, with and without management, to discuss the results of their examinations
and their observations and recommendations regarding Magnite’s internal controls. The audit committee also met separately
with management.
Based on its discussions with management
and the independent accounting firm, and its review of the representations and information provided by management and Deloitte,
the audit committee recommended to Magnite’s board of directors that Magnite’s audited financial statements for the
fiscal year ended December 31, 2020 be included in Magnite’s Annual Report on Form 10-K for the fiscal year ended December
31, 2020, which was filed with the SEC on February 25, 2020.
By order of the audit committee of the board
of directors of Magnite,
|
AUDIT COMMITTEE
|
|
Lisa L. Troe, Chair
Robert Spillane
Rachel Lam
James Rossman
|
The preceding Report of the Audit Committee
shall not be deemed filed under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent the Company specifically
incorporates this report by reference into a filing under either of such Acts. The report shall not be deemed soliciting material,
or subject to Regulation 14A or 14C or the liabilities of Section 18 of the Exchange Act.
EXECUTIVE OFFICERS
The table below sets forth certain information
regarding our executive officers as of May 4, 2021.
Name
|
Age
|
Position
|
Michael G. Barrett
|
59
|
Chief Executive Officer and Director
|
David L. Day
|
59
|
Chief Financial Officer
|
Katie Evans
|
35
|
Chief Operating Officer
|
Shawna Hughes
|
43
|
Chief Accounting Officer and Chief People Officer
|
Thomas Kershaw
|
53
|
Chief Technology Officer
|
Joseph Prusz
|
43
|
Chief Revenue Officer
|
Aaron Saltz
|
40
|
General Counsel and Secretary
|
Adam Soroca
|
48
|
Head of Global Buyer Team
|
Michael G. Barrett. See “Proposal
1: Election of Directors” for Mr. Barrett’s biography.
David L. Day has served as
our Chief Financial Officer since May 2016 and served as our Chief Accounting Officer from March 2013 to August 2017. From May
2011 to March 2013, Mr. Day served as the Chief Accounting Officer at ReachLocal, Inc., a public company servicing small and medium-sized
businesses as their digital ad agency. Prior to that, Mr. Day provided finance and accounting-related consulting services to technology
and telecommunications companies and was co-founder of SignJammer Corporation, a start-up in the out-of-home advertising market,
from 2008 to 2011. His career also includes experience as Vice President of Finance for Spot Runner, a technology-based ad agency
for small and medium-sized business, Senior Vice President of Finance for Yahoo! Search Marketing, Senior Vice President of Finance
and Corporate Controller of Overture, and public accounting experience with PricewaterhouseCoopers and Arthur Andersen.
Katie Evans has served as our
Chief Operating Officer since September 2020. From April 1, 2020 through August 2020, Ms. Evans served as the Company’s General
Manager, CTV. Previously, she served as Senior Vice President and Chief Operating Officer
of Telaria from March 2017 to April 2020 and as Senior Vice President, Strategy & Operations, from November 2015 to March
2017. Ms. Evans holds a B.S. in Business Administration from the University of Richmond.
Shawna Hughes has served as
our Chief Accounting Officer since June 2020 and as our Chief People Officer since January 2021. From July 2018 through the closing
of the Telaria Merger in April 2020, she served as Head of Global Human Resources. From 2015 to 2018, she served as Vice President
of People Operations. Prior to joining the Company, from June 2007 to November 2015, Ms. Hughes served in the roles of Senior Director
of International Accounting, Director of Revenue Accounting, and Director of Diversity and Inclusion at Concur Technologies, Inc.
Ms. Hughes holds a Bachelor of Science in International Business from George Fox University and a Master of Accounting from the
University of Notre Dame and is a Certified Public Accountant.
Thomas Kershaw has served as
our Chief Technology Officer since October 2016. Previously, Mr. Kershaw served as Director of Product Management of Google from
March 2013 to October 2016, and Senior Vice President and General Manager of the Iconectiv business unit of Ericsson, a communications
technology company, from March 2008 to March 2013. Mr. Kershaw has also held executive positions at VeriSign, Clarent Corporation
and Unisys, and was Chief Technical Officer of SS8 Networks.
Joseph Prusz has served as
our Chief Revenue Officer since December 2017 and is responsible for maintaining and growing our revenue stream across all formats,
channels, and inventory types. Prior to that, since joining the company in September 2008, Mr. Prusz had various roles of increasing
responsibility in our sales department, including leading the Americas region and serving as Head of Mobile.
Aaron Saltz has served as our
General Counsel and Corporate Secretary since April 1, 2020. Previously, Mr. Saltz served as General Counsel of Telaria from November
2015 to April 2020 and as Vice President, Associate General Counsel from January 2013 to October 2015. Prior to Telaria, Mr. Saltz
worked as an attorney in the mergers & acquisitions department of Skadden, Arps, Slate, Meagher & Flom LLP from 2005 to
2013. Mr. Saltz holds a B.A. from Cornell University and a J.D. from the Harvard Law School.
Adam Soroca has served as our
Head of Global Buyer Team since our acquisition of nToggle, Inc. in July 2017. Mr. Soroca co-founded nToggle in September 2014
and served as its Chief Executive Officer and a member of the board of directors until nToggle’s sale to the company. Prior
to founding nToggle, Mr. Soroca was the chief product officer at Millennial Media (via acquisition of Jumptap) from November 2013
to July 2014, where he oversaw the global product and operations teams. Prior to Millennial Media, from June 2005 to November 2013,
Mr. Soroca was the chief product officer and a founding leadership team member at Jumptap, the leading mobile programmatic and
audience platform. Mr. Soroca serves as an advisor at CoachUp, Inc., viisights and Chalk Digital. He pioneered bringing both audience
data (DMP) and programmatic capabilities (DSP) to the mobile industry. He is a digital advertising entrepreneur and inventor, holding
over 90 awarded patents spanning mobile advertising and search techniques.
Election of Officers
Our executive officers are elected by, and
serve at the discretion of, our board of directors. There are no family relationships among any of our directors or executive officers.
EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
Introduction
This Compensation Discussion and Analysis
describes the compensation arrangements we had for 2020 with our “named executive officers,” as determined under the
rules of the SEC and identified in the summary compensation table below.
Name
|
Position
|
Michael G. Barrett
|
President and Chief Executive Officer
|
David L. Day
|
Chief Financial Officer
|
Thomas Kershaw
|
Chief Technology Officer
|
Katie Evans
|
Chief Operating Officer
|
Adam L. Soroca
|
Head of Global Buyer Team
|
Financial and Business Highlights.
In 2020, we continued to demonstrate strong financial and strategic operational performance, building upon significant
work in re-calibrating and accelerating the business over the past several years. Notable results include:
|
•
|
Increased revenue by over +40% to $221.6M (compared to $156.4M in 2019);
|
|
•
|
Improved our profitability and expanded our margins, including a significant increase in our adjusted
EBITDA to $43.1M (compared to an adjusted EBITDA of $25.7M in 2019) (see page 54 of our Annual Report on Form 10-K for the year
ended December 31, 2020 for a reconciliation of net income (loss) to adjusted EBITDA);
|
|
•
|
Completed the Telaria Merger (closed on April 1, 2020), a leading provider of CTV technology; and
|
|
•
|
Completed the acquisition of SpotX, Inc. (closed on April 30, 2020), a leading platform shaping
CTV and video advertising globally. Following the Telaria Merger and SpotX acquisition,, we believe that we are the world’s
largest independent omni-channel sell-side advertising platform, offering a single partner for transacting globally across all
channels, formats and auction types, and the largest independent programmatic CTV marketplace, making it easier for buyers to reach
CTV audiences at scale from industry-leading streaming content providers, broadcasters, platforms and device manufacturers.
|
Compensation Highlights. Our
compensation programs are designed to support creation of stockholder value while maintaining our ability to recruit and retain
personnel. For 2020, the compensation committee took the following actions:
|
•
|
Approved increases to base salary or target cash incentive opportunities for named executive officers
to reflect the larger scope and responsibilities after the closing of the Telaria transaction and to provide better internal parity;
|
|
•
|
Approved annual long-term incentive grant values that were closer to competitive market levels
of the larger combined company and awarded an additional retention-focused equity grant to Ms. Evans shortly following the closing
of the Telaria transaction to recognize the criticality of her role in our success going forward;
|
|
•
|
Implemented a performance-based equity program for the CEO’s grant in 2020 based on three-year
relative total shareholder return (TSR) against the Russell 2000 index; the program requires being above median (55th
percentile) to earn target payout and is capped at 100% payout if share price is negative during the performance period;
|
|
•
|
Due to the closing of the Telaria transaction in Q2 2020, the compensation committee implemented
a bifurcated cash incentive program that included two separate six-month performance periods; this design allowed the compensation
committee to
|
|
|
establish mid-year goals for the combined company for the second half of the year; the full year cash incentive payouts
were slightly below target (approximately 87% of target) driven by a significantly below target first half of the year due to the
impact of the COVID-19 pandemic (29.6% of target) and an above target second half of the year (144.4% of target).
|
CEO Pay and Performance (2017-2020).
The compensation committee’s pay actions during Mr. Barrett’s tenure reflect his leadership, deep industry
experience, and a recognition that he was the right chief executive to lead the company through the successful execution of the
business turn-around and leading the next phase of growth.
|
•
|
Since joining in March 2017, Mr. Barrett has executed several strategic objectives, including removing
buy-side fees and embracing open source and transparency, shifting the business towards header bidding, developing Demand Manager
for publishers, and completing the Telaria Merger, and more recently acquiring SpotX;
|
|
•
|
The market’s response to these accomplishments continue to result in significantly outpacing
the growth from other ad-tech peers and the Russell 2000; at the end of December 2020, we generated the following annualized returns
for stockholders:
|
|
◦
|
+56% (versus +10% for the Russell 2000) from March 2017 (Mr. Barrett’s hire date) through December 31, 2020;
|
|
◦
|
+240% (versus +18% for the Russell 2000) from January 2, 2020 through December 31, 2020
|
|
•
|
In 2020, Mr. Barrett’s target pay levels increased to $4.1 million (from $3.7 million in
2019) which is based on Mr. Barrett’s base salary, target cash incentive amount and the grant date fair value of his equity
awards to (i) recognize the stellar overall company performance through 2019 under Mr. Barrett’s leadership and (ii) provide
a target total pay opportunity more closely in line with competitive market levels after the combination with Telaria and increased
scope of Mr. Barrett’s role with a scaled company
|
2020 Compensation Actions in Response
to COVID-19. In April 2020, the compensation committee approved a temporary 30% base salary reduction for the CEO
and a temporary 30% Board Cash Retainer reduction for our Board of Directors in response to COVID-19 and the associated reduction
in our workforce and cost cutting initiatives. The CEO’s base salary and Board Cash Retainers were reinstated in October
2020 after our business had largely recovered from the initial effects of COVID-19. The compensation committee will continue to
monitor and assess the impact of the global pandemic and may take action (if appropriate) to ensure outcomes align with overall
performance, shareholder experience, and our underlying compensation philosophy. No other adjustments or modifications were made
to the company’s incentive programs as a result of the COVID-19 pandemic.
Consideration of 2020 Say on Pay
Vote. At our 2020 annual meeting of stockholders, stockholders showed support for our executive compensation program, with
91.6% of the votes cast approving the compensation paid to our named executive officers. After considering the results of the fiscal
2020 Say-on-Pay advisory vote, the compensation committee determined that our practices remained appropriate. The Magnite compensation
committee values the perspectives of our stockholders and continues to consider the results of Say-on -Pay votes and stockholder
feedback when reviewing our executive compensation program.
Executive Compensation Governance.
Our executive compensation program includes a number of features intended to reflect best practices in the market and help ensure
that the program reinforces our stockholders’ interests. These features are described in more detail below in this Compensation
Discussion and Analysis and include the following:
What We Do:
|
What We Don't Do:
|
✔ Provide
a significant portion of CEO pay that is “at-risk” (87% of 2020 target direct compensation was based on financial
or share price performance) (with target direct compensation determined based on the CEO’s annual base salary, target cash
incentive amount, and the grant date fair value of his equity awards)
✔ Utilize
a formulaic incentive structure in our annual incentive program and limit the use of discretion, as well as limit the maximum
annual incentive payment to 150% of the target amount
✔ Maintain
an ownership and holding requirement policy to encourage alignment with stockholders
✔ Incorporate
performance-based equity for our CEO based on outperforming the market
✔ Employ
a clawback policy to allow the company to recover any performance-based compensation later proven unearned
✔ Retain
an independent compensation consultant to advise the compensation committee
✔ Consider
feedback from stockholders as part of the compensation committee’s annual program review
|
No single-trigger change in control benefits
No gross-ups for change in control benefits
No discounted stock options or option re-pricings
No excessive perquisites
No hedging of our equity securities
|
Executive
Compensation Philosophy and Objectives
The compensation committee conducts an annual
review of our executive compensation program to help ensure that: (1) the program is designed to align the interests of our named
executive officers with our stockholders’ interests by rewarding performance that is tied to creating stockholder value;
and (2) the program provides a total compensation package for each of our named executive officers that we believe is competitive
and necessary to attract and retain talent.
We accomplish these objectives by providing
a total compensation package that includes three main components: base salary, annual performance-based cash awards and long-term
equity-based awards. We believe that in order to attract and retain top executives, we need to provide them with compensation levels
that reward their continued service. Some of the elements, such as base salaries and annual cash awards, are paid out on a short-term
or current basis. Other elements, such as equity awards that are subject to multi-year vesting schedules and benefits provided
upon certain terminations of employment, are paid out on a long-term basis. We believe this mix of short- and long-term elements
allows us to achieve our goals of attracting, retaining and motivating our top executives. We also, in certain cases, provide our
named executive officers with certain relocation and other benefits in connection with their joining us.
In structuring executive compensation packages,
the compensation committee considers how each component promotes retention and motivates performance. Base salaries, severance
and other termination benefits are primarily intended to attract and retain highly qualified executives. These elements of our
executive compensation program are generally not dependent on performance. Annual cash bonus opportunities provide further incentives
to achieve performance goals specified by the compensation committee and long-term equity awards provide incentives to help create
value for our stockholders and continue employment with us through specified vesting dates.
Payment of our annual performance-based
cash awards is solely contingent upon the achievement of financial performance metrics. The amount of compensation ultimately received
for these awards varies with our annual financial performance, thereby providing additional incentives to achieve short-term or
annual goals that we believe will maximize stockholder value over the long term.
We believe that by providing a significant
portion of our named executive officers’ total compensation package in the form of equity-based awards, we are able to create
an incentive to build stockholder value over the long-term and more closely align the interests of our named executive officers
to those of our stockholders. Our annual equity awards to the named executive officers for 2020 consisted of performance shares
(for the CEO only), stock options and restricted stock unit awards, which generally only vest if
the executive remains employed
with us through the vesting date.
|
Compensation
|
Determination Process
|
The compensation committee considers, determines,
reviews, and revises all components of each named executive officer’s compensation. It may not delegate that responsibility.
The compensation committee also has oversight of and consults with management regarding executive and non-executive employee compensation
plans and programs, including administration of our equity incentive plans.
The compensation committee retains an independent
executive compensation consultant, Semler Brossy Consulting Group, referred to as Semler Brossy, to provide input, analysis, and
consultation about our executive compensation. During 2020, Semler Brossy’s work with the compensation committee included
analysis, advice, and recommendations on total compensation philosophy; peer groups and market assessment and analysis; compensation
program design, including program goals, components, and metrics; equity usage and allocation; compensation trends in comparable
business sectors and in the general marketplace for senior executives; regulatory factors; and the compensation of the chief executive
officer and the other named executive officers, including advice on the design of cash-based and equity-based compensation.
Semler Brossy reports directly and solely
to the compensation committee and performs compensation consulting services for the compensation committee at its request. Semler
Brossy is not engaged to perform services directly for our management. The compensation committee has concluded that no conflict
of interest exists with respect to its engagement of Semler Brossy nor are there other factors that would adversely impact Semler
Brossy’s independence in advising the compensation committee under applicable SEC and Nasdaq rules. The compensation committee
reached this conclusion after considering the following six factors, as well as Semler Brossy’s views regarding its independence
and other information the compensation committee deemed relevant: (i) the provision of other services to us by Semler Brossy; (ii)
the amount of fees received from us by Semler Brossy, as a percentage of the total revenue of Semler Brossy; (iii) the policies
and procedures of Semler Brossy that are designed to prevent conflicts of interest; (iv) any business or personal relationship
of the Semler Brossy consultants with a member of the compensation committee; (v) any of our stock owned by the Semler Brossy consultants;
and (vi) any business or personal relationship of the Semler Brossy consultants or Semler Brossy with any of our executive officers.
Executive officers do not propose or seek
approval for, or have any decision-making authority with respect to, their own compensation. The chief executive officer makes
recommendations to the compensation committee on the base salary, annual incentive cash targets, and equity awards for each named
executive officer other than himself, based on his assessment of each executive officer’s performance during the year and
other factors, including compensation survey data and input from Semler Brossy.
Performance reviews for the chief executive
officer and other named executive officers include factors that may vary depending on the role of the individual officer, including
strategic capability—how well the executive officer identifies and develops relevant business strategies and plans; execution—how
well the executive officer executes strategies and plans; and leadership capability—how well the executive officer leads
and develops the organization and its people. The compensation committee conducts an annual performance review of the chief executive
officer to evaluate the company’s performance, his performance and the performance of the management team and considers this
review in determining the chief executive officer’s base salary, annual performance-based cash incentive target, and equity
awards.
We have engaged in discussions regarding
our compensation philosophy with several of our large stockholders, and we intend to engage in further compensation-related discussions
from time to time at such stockholders’ request. Additionally, at our 2021 annual meeting, stockholders will have an opportunity
to cast an advisory vote to approve the compensation programs of our named executive officers, referred to as the Say-On-Pay Vote.
|
Peer
|
Group Compensation Assessment
|
The compensation committee works with Semler
Brossy periodically to select a peer group of companies in our industry to assist the committee in making its compensation decisions.
Although the compensation committee reviews and discusses the peer company compensation data provided by Semler Brossy to help
inform its decision-making process, the compensation committee does not set compensation levels at any specific level or percentile
against the peer group data. The peer company data is only one point of information taken into account by the compensation committee
in making compensation decisions.
In July 2019, and prior to the announced
Telaria transaction, the compensation committee, with assistance from Semler Brossy, reviewed peer group companies and determined
that for 2020 several peers were too large and had substantially different market multiples than the legacy Rubicon Project organization
at the time. The assessment led to the removal of five companies (AppFolio, Five, Qualys, QuinStreet and Quotient Technology) and
the addition of three new companies (Cardlytics, EverQuote and Fluent). The added companies were selected based on several criteria,
including being similar in size, favoring companies based in California or
New York, and having a reasonably comparable business.
Fiscal
2020 Peer Group
Cardlytics, Inc.
|
Marchex, Inc.
|
TechTarget, Inc.
|
ChannelAdvisor Corporation
|
MobileIron, Inc.
|
Telaria Inc.
|
Digital Turbine, Inc.
|
Model N, Inc.
|
Telenav, Inc.
|
EverQuote, Inc.
|
PROS Holdings, Inc.
|
The Trade Desk, Inc..
|
Fluent, Inc..
|
SPS Commerce
|
TrueCar, Inc.
|
Leaf Group Ltd.
|
Synacor, Inc.
|
Varonis Systems
|
In early 2020, and following the announcement
of the Telaria transaction, Semler Brossy determined that the peer group (excluding Telaria) continued to remain appropriate when
establishing 2020 pay levels due to balanced relative positioning around median on several key metrics and recommended that the
committee re-assess the peer group in July 2020 to reflect the go-forward combined company.
|
Current
|
Executive Compensation Program Elements
|
The current elements of our executive compensation
program are:
|
●
|
annual performance-based cash awards;
|
|
●
|
equity-based incentive awards; and
|
|
●
|
certain additional employee benefits.
|
We strive to achieve an appropriate mix between
the various elements of our compensation program to meet our compensation objectives and philosophy; however, we do not apply any
rigid allocation formula in setting our named executive officers’ compensation, and we may make adjustments to this approach
for various positions after giving due consideration to prevailing circumstances.
As discussed throughout this Compensation
Discussion and Analysis, the compensation policies and programs applicable to our named executive officers reflect our emphasis
on aligning the interests of our executive officers with our stockholders’ interests in enhancing our value over the long
term. Applying this philosophy, a significant portion of overall compensation opportunities offered to our named executive officers
is in the form of (i) equity-based compensation with a value directly linked to our stock price and (ii) annual performance-based
cash awards contingent upon achievement of measurable financial objectives.
Base salaries for our named executive officers
are designed to be competitive when compared with similarly situated executives within our peer group, and are based on a variety
of factors, including level of responsibility, performance, and the recommendations of the chief executive officer for named executive
officers other than the chief executive officer. Base salaries are reviewed annually or at the time of promotion or other changes
in responsibilities. In determining whether to award base salary increases, the compensation committee considers our overall business
outlook, our budget, the executive’s individual performance, historical compensation, market compensation levels for comparable
positions, internal pay equity, and other factors, including any retention concerns.
After consideration of the data from the
peer group described above and the other factors described in the preceding paragraph, the compensation committee increased incumbent
named executive officers’ base salaries in March 2020 which are described in the table below. Mr. Kershaw received a +17.6%
increase to reflect the increased scale of his role and responsibility for the combined go-forward entity and Mr. Soroca received
a +15.4% increase based on market positioning and a desire to achieve better internal pay equity amongst other peers.
Name
|
|
2019 Annual
Base Salary
|
|
2020 Annual
Base Salary
|
|
Percent Increase (%)
|
Michael Barrett
|
|
$
|
515,000
|
|
|
$
|
550,000
|
|
|
|
6.8%
|
|
David Day
|
|
$
|
400,000
|
|
|
$
|
430,000
|
|
|
|
7.5%
|
|
Thomas Kershaw
|
|
$
|
425,000
|
|
|
$
|
500,000
|
|
|
|
17.6%
|
|
Katie Evans
|
|
$
|
390,000
|
|
|
$
|
400,000
|
|
|
|
2.6%
|
|
Adam Soroca
|
|
$
|
325,000
|
|
|
$
|
375,000
|
|
|
|
15.4%
|
|
|
Annual
|
Performance-Based Cash Awards
|
Our named executive officers are eligible
to receive cash incentive payments under our Executive Cash Incentive Plan, referred to as the Executive Bonus Plan, which is administered
by our compensation committee. The amount of cash incentive payments under the Executive Bonus Plan is determined based upon the
achievement of pre-established corporate financial objectives that the compensation committee believed were challenging yet achievable.
For 2020, given that the Telaria Merger
occurred in Q2 2020, and considering challenges setting goals during initial integration, the compensation committee approved a
bifurcated structure for the 2020 Executive Bonus Plan with independent goals set for each of the first half of the fiscal year
(“1H20”) and second half of the fiscal year (“2H20”). The first half of 2020, 1H20, was measured from January
to June of 2020. The named executive officers were measured against legacy Rubicon Project 1H20 targets (or legacy Telaria 1H2020
targets for Ms. Evans), with the first half bonus payout based on H1 results. The second half of 2020, 2H20, was measured from
July to December 2020 with goals set in July 2020 based on combined company results. The company did not make any adjustments to
the cash incentive program or outcomes due to COVID-19 but did consider the impact of COVID-19 when establishing goals for the
2H20.
In March 2020, the compensation committee
approved modest increases to target annual bonuses for Mr. Day and Mr. Kershaw in order to better internally align members of the
senior leadership team. The increases to target annual bonuses, effective April 1, 2020, were as follows:
Name
|
2019 Annual Target
% of Base Salary
|
2020 Annual Target
% of Base Salary
|
Michael Barrett
|
100%
|
100%
|
David Day
|
65%
|
70%
|
Thomas Kershaw
|
65%
|
70%
|
Katie Evans
|
75%
|
75%
|
Adam Soroca
|
70%
|
70%
|
1H20 legacy Rubicon Project performance was
measured against two financial goals: revenue and adjusted EBITDA less capital expenditures, referred to as capex, with each goal
given equal weight. 2H20 Magnite performance was measured against three financial goals: revenue (weighted 35%), CTV revenue (weighted
15%) and adjusted EBITDA less capex (weighted 50%). The compensation committee chose these financial metrics because they represent
objectively determinable financial targets and focused the company on goals important to Magnite’s success after the transaction.
For a description of how we calculate adjusted EBITDA, see the “Non-GAAP Financial Measures” section of the Management
Discussion and Analysis of Financial Condition and Results of
Operations in Part II, Item 7 of the company’s Annual Report
on Form 10-K. The compensation committee retains the discretion to reduce, but not increase, the amount of any bonus otherwise
payable to our executive officers based on such factors as it deems appropriate.
1H20 Annual Bonus Targets and Payout
In July 2020, the compensation committee
determined that for the first half of 2020, legacy Rubicon Project achieved revenue of $65.6 million and Adjusted EBITDA less capex
of ($0.68 million), resulting in a weighted payout percentage of 29.61% of each named executive officers' target annual bonuses
for 1H20 (other than Ms. Evans), as follows:
Performance Goal
|
|
Threshold
(50% payout)
|
Target
(100% payout)
|
|
|
Revenue
|
50%
|
$62.2 million
|
$82.9 million
|
$103.6 million
|
$65.6 million
(59.22% payout)
|
Adjusted EBITDA less Capital Expenditures
|
50%
|
($6.39 million)
|
$0.5 million
|
$14.88 million
|
($0.68 million)
(0% payout)
|
Name
|
1H20
Bonus Target
|
1H 20 Bonus
% Earned
|
1H20
Bonus Paid
|
|
Michael Barrett
|
$266,250
|
29.61%
|
$78,837
|
|
David Day
|
$140,250
|
29.61%
|
$41,528
|
|
Thomas Kershaw
|
$156,250
|
29.61%
|
$46,266
|
|
Katie Evans
|
$150,000
|
29.61%
|
$44,415
|
|
Adam Soroca
|
$121,875
|
29.61%
|
$36,087
|
|
Ms. Evans did not earn incentive compensation
for H120 per the terms of her incentive plan (which was established by the Telaria compensation committee prior to the merger and
based on achievement of Telaria standalone results). The compensation committee determined that it would be appropriate for Ms.
Evans to receive the same 29.61% payout for 1H20 as members of the executive team that were on the Rubicon Project H120 plan in
order to have consistency in payouts across the senior executive team.
2H20 Annual Bonus Targets and Payout
In February 2021, the compensation committee
determined that for the second half of 2020, the Company achieved revenue of $143.0 million, CTV revenue of $26.4 million and Adjusted
EBITDA less capex of $28.6 million, resulting in a weighted payout percentage of 144.46% of each named executive officers’
target bonuses for 2H20, as follows:
Performance Goal
|
|
Threshold
(50% payout)
|
Target
(100% payout)
|
|
|
Revenue
|
35%
|
$83.4 million
|
$111.2 million
|
$139 million
|
$143.0 million
(150% payout)
|
CTV Revenue
|
15%
|
$18.2 million
|
$24.3 million
|
$36.5 million
|
$26.4 million (113% payout)
|
Adjusted EBITDA less Capital Expenditures
|
50%
|
$(11.9 million)
|
$(2.9) million
|
$7.15 million
|
$28.6 million
(150% payout)
|
Name
|
2H20
Bonus Target
|
2H20 Bonus
% Earned
|
2H20
Bonus Paid
|
Michael Barrett
|
$275,000
|
144.46%
|
$397,265
|
David Day
|
$150,500
|
144.46%
|
$217,412
|
Thomas Kershaw
|
$175,000
|
144.46%
|
$252,805
|
Katie Evans
|
$150,000
|
144.46%
|
$216,690
|
Adam Soroca
|
$131,250
|
144.46%
|
$189,604
|
Equity-Based Awards
2020 Annual Equity Awards
We grant equity-based compensation to our
named executive officers in order to attract, retain and reward our executives and strengthen the mutuality of interests between
our named executive officers and stockholders. The compensation committee annually determines the form and amount of equity-based
incentives granted to executives. In making its determinations, the compensation committee considers factors such as peer group
market data, recommendations from Semler Brossy, the executive’s and our performance in the last year and the results achieved
by the executive, the executive’s base salary, target annual incentive opportunity and prior grants of equity awards, and
the compensation committee’s view regarding the future potential of long-term contributions of the executive. Recommendations
of the chief executive officer are also taken into consideration for our named executive officers other than the chief executive
officer.
In April 2020, each of our named executive
officers received an annual equity grant. The number of stock options, RSUs and PSUs granted to each of our named executive officers
for 2020 is set forth in the table below:
Name
|
Number
of Stock
Options Granted
|
Number
of RSUs
Granted
|
Target Number of
PSUs Granted
|
Michael Barrett
|
231,568
|
175,992
|
146,341
|
David Day
|
115,784
|
153,993
|
—
|
Thomas Kershaw
|
115,784
|
153,993
|
—
|
Katie Evans
|
69,470
|
92,396
|
—
|
Adam Soroca
|
84,908
|
112,928
|
—
|
If our stock price were not to increase,
the stock options will not deliver any economic value because the options have an exercise price equal to our stock price on the
date of grant and our equity incentive plans prohibit stock option repricing. The stock options and RSUs vest over four years to
provide an additional retention incentive. In determining the size of the 2020 annual awards for all named executive officers,
the compensation committee calibrated award values to encourage equity ownership and ensure a stable leadership team through the
legacy Rubicon Project and Telaria Merger; specifically, the compensation committee (i) considered the increased scope of the executives’
roles following the close of the merger and increased scale of Magnite and (ii) sought to continue to deliver annual equity grant
values close to market level for 2020.
For 2020, the compensation committee determined
that a portion of Mr. Barrett’s annual equity grant would be made in the form of PSUs that would vest based on our TSR for
the three-year period beginning on the grant date of the award relative to the TSRs of the companies in the Russell 2000 index
over the same period. The Russell 2000 was chosen as the TSR comparator group because the compensation committee believes this
index represents a reasonable investment alternative for shareholders considering investing in our business while requiring stable
and robust performance outcomes. This PSU award, which was granted in April 2020 and has a target of 146,341 stock units, represented
approximately 30% of the total fair value of Mr. Barrett’s equity award for 2020 (as determined as of the grant date in accordance
with generally accepted accounting principles). The award is eligible to vest between 0% and 150% of the target number of units
subject to the award based on the performance schedule below:
Magnite
Relative TSR Ranking
vs. Russell 2000 Index
|
Vesting
% of Target
Number of PSUs
|
80th Percentile or Higher
|
150%
|
55th Percentile
|
100%
|
20th Percentile
|
25%
|
Below 20th Percentile
|
0%
|
The vesting percentage will be interpolated
on a linear basis between the levels stated in the chart above. Additionally, in the event Magnite’s TSR for the performance
period is negative, the vesting percent of shares is capped at 100% of target shares. In approving the award, the compensation
committee believed it would enhance the performance-based nature of our executive compensation program and further align Mr. Barrett’s
interests with those of our stockholders.
2020 Merger Retention Award Granted to Ms. Evans
Upon the close of the Telaria Merger in April
2020, Ms. Evans was granted a special one-time share-based retention award with a target value of $700,000 (102,662
RSUs) that vests in two equal installments on each of April 1, 2021 and April 1, 2022, subject to continued service. Ms.
Evans’ role as Chief Operating Officer was critical to the successful integration of legacy Rubicon Project and Telaria and
the success of the business going forward. In addition to serving a retentive purpose, the equity grant aimed to motivate and incentivize
Ms. Evans in continuing to deliver value to stockholders through the integration of legacy Rubicon Project and Telaria.
Other
Employee Benefits and Perquisites
We have generally not offered extensive benefits
or other compensation programs to our named executive officers, apart from employee benefits made available generally to our employees
such as participation in Magnite’s 401(k) plan and eligibility to receive a company match, and health and welfare benefit
programs. Mr. Day is eligible for up to $30,000 in annual reimbursement for the use of a car service for transportation between
his home and our headquarters for the purpose of allowing Mr. Day to devote his lengthy commute time to work duties.
Employment
Arrangements
We have entered into an employment agreement
with Mr. Barrett and offer letters with each of our other named executive officers. Each of the named executive officers serves
on an at-will basis and the employment agreement and offer letters do not have a specified term. The employment agreement and offer
letters provide for a base salary, eligibility to receive an annual performance bonus, and eligibility to participate in employee
benefit or group insurance plans maintained from time to time by us.
Severance
Agreements
We are also party to Executive Severance
and Vesting Acceleration Agreements, referred to as the severance agreements, with each of our named executive officers that provide
for severance and other termination benefits upon certain qualifying terminations of employment. These severance agreements are
intended to provide economic protection so that an executive can remain focused on our business without undue personal concern
in the event that his position is eliminated or, in some cases, significantly altered by us, which we believe is particularly important
in light of the executives’ leadership roles at Magnite. The compensation committee believes that providing severance or
similar benefits is common among similarly situated executives in our industry generally and remains important in recruiting and
retaining key executives.
The prospect of a change in control of Magnite
can also cause significant distraction and uncertainty for executive officers and, accordingly, the compensation committee believes
that appropriate change in control protections are important tools for aligning executives’ interests with those of our stockholders
by allowing our executive officers to focus on strategic transactions that may be in the best interest of our stockholders without
undue concern regarding the effect of such transactions on their continued employment. Accordingly, the severance agreements also
provide for enhanced severance payments and accelerated vesting of equity awards if the executives’ employment is terminated
in connection with or following a change in control of Magnite.
In December 2019, in connection with the
approval of the merger agreement between our legacy entities Rubicon Project and Telaria, our board of directors approved the modification
of the severance agreements to provide that if the executive officer had been terminated in connection with or within 13 months
following the closing of the merger between legacy Rubicon Project and Telaria, the executive officer would be entitled to the
enhanced change in control severance under the severance agreements.
For more information regarding the potential
payments and benefits that would be provided to our named executive officers in connection with certain terminations of their employment
(including terminations in connection with a change in control) on the last business day of fiscal year 2020, please see “Potential
Payments upon Termination or Change in Control” below.
We do not provide our executives with tax
“gross-up” payments in connection with a termination of their employment and/or a change in control of Magnite.
Tax
Considerations
Section 162(m) of the federal tax laws generally
prohibits a publicly held company from deducting compensation paid to a current or former named executive officer that exceeds
$1 million during the tax year. Certain awards granted before November 2, 2017 that were based upon attaining pre-established performance
measures that were set by the company’s compensation committee under a plan approved by the company’s stockholders,
as well as amounts payable to former executives pursuant to a written binding contract that was in effect on November 2, 2017,
may qualify for an exception to the $1 million deductibility limit. As one of the factors in its consideration of compensation
matters, the compensation committee notes this deductibility limitation. However, the compensation committee has the flexibility
to take any compensation-related actions that it determines are in the best interests of the company and our stockholders, including
awarding compensation that may not be deductible for tax purposes. There can be no assurance that any compensation will in fact
be deductible.
Recoupment
Policy
Our board or the compensation committee shall,
in circumstances it deems appropriate, require return to us of the excess portion of any payment made to an employee pursuant to
an award issued after April 7, 2016 under our 2014 Equity Incentive Plan or 2014 Inducement Grant Equity Incentive Plan, or under
our annual cash incentive plan, if: (1) the payment was predicated upon achieving certain financial results that became the subject
of a substantial restatement of our financial statements filed with the SEC within the three full fiscal years after the payment;
(2) our board or the compensation committee determines that the participant engaged in intentional misconduct that caused or substantially
caused the need for the substantial restatement; and (3) a lower payment would have been made to the participant based upon the
restated financial results. In each such instance, the “excess portion” of the payment is the amount (in terms of dollars
or shares) by which the payment received exceeded the lower payment that would have been made based on the restated financial results.
In each case, the return of payment will be net of any taxes paid by the employee in connection with original receipt or subsequent
transfer of the payment. Our board or the compensation committee also has the discretion, in circumstances it deems appropriate,
to require reimbursement of any or all payments received with respect to any award granted on or after April 7, 2016 to an employee
who has engaged in fraud, bribery, or illegal acts similar to fraud or bribery related to employment, or knowingly failed to report
such acts of another employee over whom the employee had direct supervisory responsibility. Our board or the compensation committee
shall not seek recovery to the extent it determines (a) that to do so would be unreasonable or (b) that it would be better for
us not to do so. In making such determination, and without limiting the scope of its discretion, our board or the compensation
committee shall take into account such considerations as it deems appropriate, including, without limitation, the likelihood of
success under governing law versus the cost and effort involved, whether the assertion of a claim may prejudice our interests,
including in any related proceeding or investigation, the passage of time since the occurrence of the act in respect of the applicable
fraud or intentional illegal conduct, and any pending legal proceeding relating to the applicable fraud or illegal conduct. Our
board or the compensation committee also may in its discretion direct us to disclose the circumstances surrounding any recoupment
made under this policy where not otherwise required by applicable regulation.
Executive
Officer Equity Ownership Guidelines and Retention Holding Requirements
Under equity retention guidelines implemented
by our board in April 2016, the chief executive officer and each of the other named executive officers are required to accumulate
within five years from the later of the date the guidelines were implemented and the date he became a named executive officer,
and thereafter to retain for the duration of employment, a minimum level of company
equity. The minimum level of equity for the
chief executive officer is equal to five times base salary and the minimum level of equity for the other named executive officers
is equal to the named executive officer's base salary. Equity that counts toward the ownership requirement includes: (1) shares
owned outright by the named executive officer or beneficially owned by the named executive officer by virtue of being held by a
member of the named executive officer’s immediate family residing in the same household or in a trust for the benefit of
the named executive officer or immediate family members residing in the same household; (2) shares held in qualified plans or IRAs;
(3) vested shares (or vested RSUs) deemed to be held in non-qualified plans; (4) the in-the-money portion of vested stock options
(but not unvested stock options); and (5) unvested time-based restricted shares (or restricted stock units).
Until the minimum level of company equity
is achieved, a named executive officer is prohibited from selling or otherwise transferring beneficial ownership of more than one-half
of: (a) the vested after-tax shares of our common stock obtained as a result of the vesting of any restricted stock or RSU award
made after implementation of the equity retention guidelines; or (b) the shares of our common stock subject to the vested portion
of any stock option award made after implementation of the equity retention guidelines, net of any shares surrendered or sold to
cover exercise price and/or income tax resulting from the exercise.
Policy
Against Repricing and Cash Buyouts
Our 2014 Equity Incentive Plan and 2014 Inducement
Grant Equity Incentive Plan prohibit our board from decreasing the exercise price of or otherwise repricing awards of stock options
and stock appreciation rights unless such action is first approved by our stockholders. In addition, the plans prohibit us from
redeeming or repurchasing stock options or stock appreciation rights unless such redemptions or repurchases are approved by our
stockholders.
Policy
Against Hedging
We recognize that hedging against losses
in company shares may disturb the alignment between stockholders and employees that our equity awards are intended to build. Accordingly,
we have incorporated prohibitions on various hedging activities within our Insider Trading Policy, which applies to directors,
officers and other employees who we have designated as insiders, as well as such persons’ family members, life partners,
or owned or controlled entities. The policy prohibits all transactions that are designed to sell short, hedge or offset any decrease
in the market value of our securities, including prepaid variable forward contracts, equity swaps, futures, collars, exchange funds,
options, puts, and calls and purchases or sales of puts or calls for speculative purposes.
Risk
Assessment in Compensation Programs
The compensation committee annually assesses
our executive and broad-based compensation and benefits programs on an overall basis to determine whether the programs’ provisions
and operations create undesired or unintentional material risk. This risk assessment process takes into account numerous compensation
terms and practices that we maintain that aid in controlling risk, including the mix of cash, equity, and near- and long-term incentive
programs, the use of multi-year vesting periods for equity awards, and a variety of performance criteria for incentive compensation,
the claw-back provisions that apply to our annual incentive cash plan and equity plan, and the cap on the maximum cash incentive
awards that can be earned in a given year regardless of company performance. This risk assessment process also included a review
of program policies and practices, program analysis to identify risk and risk controls, and determinations as to the sufficiency
of risk identification and risk control, the balance of potential risk to potential reward, and the significance of the programs
and their risks to company strategy. Although we reviewed all significant compensation programs, we focused on those programs with
variable payout, in particular assessing the ability of participants to directly affect payouts, and the controls on such situations.
Based on the foregoing, we believe that our
compensation policies and practices do not create risks that are reasonably likely to have a material adverse effect on us as a
whole. We also believe that our incentive compensation programs do not encourage risk-taking beyond the organization’s ability
to effectively identify and manage significant risks; are compatible with effective internal controls and our risk-management practices;
and are adequately supported by the compensation committee’s oversight of our executive compensation programs.
Compensation
Committee Report
The compensation committee has reviewed and
discussed our Compensation Discussion and Analysis section with management and, based on the review and discussions, recommended
to the board that the Compensation Discussion and Analysis section be included in the company’s Annual Report on Form 10-K.
Compensation Committee*
Doug Knopper, Chair
Robert J. Frankenberg
Sarah P. Harden
James Rossman
The foregoing report of the compensation
committee is not soliciting material, is not deemed filed with the SEC and is not incorporated by reference in any Magnite filing
under the Securities Act or the Exchange Act, whether made before or after the date of this report and irrespective of any general
incorporation language in such filing.
Magnite
Named Executive Officer Compensation Tables
Summary
Compensation Table - 2020
The following table and narratives that follow
describe the 2020, 2019 and 2018 compensation provided to our named executive officers. Mr. Soroca was not a named executive officer
of Magnite prior to 2019, thus, pursuant to SEC guidance, we have only included compensation information for 2019 and 2020. Ms.
Evans was not a named executive officer of Magnite prior to 2020, thus, pursuant to SEC guidance we have only included compensation
information for 2020.
Name
and Principal Position
|
Year
|
Salary
($)
|
Bonus
($)
|
Stock
Awards ($) (1)
|
Option
Awards ($) (1)
|
Non-Equity
Incentive
Plan
Compensation ($) (2)
|
All
Other Compensation ($)
|
Total
($)
|
Michael
Barrett
|
2020
|
458,750(3)
|
|
1,829,238
|
740,068
|
476,102
|
8,747(4)
|
3,512,905
|
President
and CEO
|
2019
|
515,000
|
—
|
1,799,000
|
883,827
|
609,503
|
5,735
|
3,813,065
|
|
2018
|
515,000
|
—
|
689,500
|
327,468
|
515,000
|
5,006
|
2,051,974
|
|
|
|
|
|
|
|
|
|
David
Day
|
2020
|
422,500
|
|
813,083
|
370,034
|
258,940
|
12,575(5)
|
1,877,132
|
Chief
Financial Officer
|
2019
|
400,000
|
—
|
924,960
|
454,019
|
307,710
|
28,540
|
2,115,229
|
|
2018
|
400,000
|
100,000(6)
|
334,108
|
45,646
|
260,000
|
28,571
|
1,168,325
|
|
|
|
|
|
|
|
|
|
Thomas
Kershaw
|
2020
|
481,250
|
|
813,083
|
370,034
|
299,071
|
7,185(7)
|
1,970,623
|
Chief
Technology Officer
|
2019
|
425,000
|
—
|
1,028,280
|
504,779
|
325,463
|
5,735
|
2,289,257
|
|
2018
|
425,000
|
150,000(8)
|
675,189
|
94,602
|
275,000
|
5,650
|
1,625,441
|
|
|
|
|
|
|
|
|
|
Adam
Soroca
|
2020
|
362,500
|
|
596,260
|
271,357
|
225,691
|
6,195(9)
|
1,462,003
|
Head
of Global Buyer Team
|
2019
|
325,000
|
—
|
772,440
|
377,879
|
266,288
|
7,682
|
1,749,289
|
|
|
|
|
|
|
|
|
|
Katie
Evans
|
2020
|
271,437(10)
|
44,415(11)
|
1,029,906
|
222,019
|
216,690
|
15,593(12)
|
1,800,060
|
Chief
Operating Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
In accordance with the rules of the SEC, these amounts represent the aggregate grant date fair value of the stock awards and
option awards granted to the named executive officer during the applicable fiscal year computed in accordance with ASC 718. Magnite’s
equity awards valuation approach and related underlying assumptions for awards granted in 2020 are described in Note 2 “Organization
and Summary of Significant Accounting Policies—Stock-Based Compensation” and Note 13 “Stock-Based Compensation”
to the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K (and the assumptions for awards granted
prior to 2020 are set forth in the corresponding notes in the Annual Report on Form 10-K for the applicable fiscal year). The reported
amounts do not necessarily reflect the value that may be realized by the executive with respect to the awards, which will depend
on future changes in stock value and may be more or less than the amount shown.
|
|
(2)
|
Cash incentive amounts earned by the named executive officers for service during the year, including amounts paid subsequent
to that year based upon performance during that year. As discussed in the Compensation Discussion and Analysis section above, for
2020, the compensation committee approved a bifurcated structure for the 2020 Executive Bonus
|
|
|
Plan with independent goals set for
each of the first half of the fiscal year (“1H20”) and second half of the fiscal year (“2H20”). The first
half of 2020, 1H20, was measured from January to June of 2020. The named executive officers were measured against legacy Rubicon
Project 1H20 targets (or legacy Telaria 1H2020 targets for Ms. Evans), with the first half bonus payout based on H1 results. The
second half of 2020, 2H20, was measured from July to December 2020 with goals set in July 2020 based on combined company results.
|
|
(3)
|
Mr. Barrett’s salary was temporarily reduced from $550,000 to $385,000 in response to business challenges associated
with the COVID-19 pandemic.
|
|
(4)
|
Includes 401(k) plan matching contributions, contributions to life insurance premiums and work-from-home stipend.
|
|
(5)
|
Includes 401(k) plan matching contributions, contributions to life insurance premiums, transportation reimbursement and work-from-home
stipend.
|
|
(6)
|
Represents a $100,000 retention bonus that vested during the applicable year.
|
|
(7)
|
Includes 401(k) plan matching contributions, contributions to life insurance premiums and work-from-home stipend.
|
|
(8)
|
Represents a $150,000 retention bonus that vested during the applicable year.
|
|
(9)
|
Includes 401(k) plan matching contributions, contributions to life insurance premiums, transit benefit plan matching contributions
and work-from-home stipend.
|
|
(10)
|
Ms. Evans commenced employment with the company on April 1, 2020 with an annual base salary of $400,000.
|
|
(11)
|
For 1H 2020, Ms. Evans’ did not earn any incentive compensation pursuant to the terms of her legacy Telaria 1H incentive
compensation plan. The compensation committee approved payout of 29.61% of Ms. Evans’ 1H target bonus in order to align with
other executives.
|
|
(12)
|
Includes 401(k) plan matching contributions, contributions
to life insurance premiums and work-from-home stipend.
|
|
Grants
|
of Plan-Based Awards - 2020
|
The following table provides information
regarding the equity and non-equity incentive plan awards that were granted to Magnite’s named executive officers in 2020.
|
|
Estimated
Future Payouts Under Non-Equity Incentive Plan Awards
|
Estimated
Future Payouts Under Equity Incentive Plan Awards
|
All
Other Stock Awards: Number of Shares of Stock or Units
|
All
Other Option Awards: Number of Securities Underlying Options
|
Exercise
or Base Price of Option Awards ($/Sh)
|
Grant
Date Fair Value of Stock and Option Awards(1)
|
Name
|
Grant
Date
|
Threshold
($)
|
Target
($)
|
Maximum
($)
|
Threshold
|
Target
|
Maximum
|
Michael
Barrett
|
—
|
257,500
|
515,000
|
772,500
|
|
|
|
|
|
|
|
|
4/1/2020
|
—
|
—
|
—
|
|
|
|
175,992
|
—
|
—
|
929,238
|
|
4/1/2020
|
—
|
—
|
—
|
|
|
|
|
231,568
|
5.28
|
740,068
|
|
4/1/2020(2)
|
—
|
—
|
—
|
36,585
|
146,341
|
219,511
|
|
|
|
900,000
|
David
Day
|
—
|
150,500
|
301,000
|
451,500
|
|
|
|
|
|
|
|
|
4/1/2020
|
—
|
—
|
—
|
|
|
|
153,993
|
—
|
—
|
813,083
|
|
4/1/2020
|
—
|
—
|
—
|
|
|
|
—
|
115,784
|
5.28
|
370,034
|
Thomas
Kershaw
|
—
|
175,000
|
350,000
|
525,000
|
|
|
|
|
|
|
|
|
4/1/2020
|
—
|
—
|
—
|
|
|
|
153,993
|
—
|
—
|
813,083
|
|
4/1/2020
|
—
|
—
|
—
|
|
|
|
—
|
115,784
|
5.28
|
370,034
|
Adam
Soroca
|
—
|
131,250
|
262,500
|
393,750
|
|
|
|
|
|
|
|
|
4/1/2020
|
—
|
—
|
—
|
|
|
|
112,928
|
—
|
—
|
596,260
|
|
4/1/2020
|
—
|
—
|
—
|
|
|
|
—
|
84,908
|
5.28
|
271,357
|
Katie
Evans
|
—
|
150,000
|
300,000
|
450,000
|
|
|
|
|
|
|
|
|
4/1/2020
|
—
|
—
|
—
|
|
|
|
195,058
|
—
|
—
|
1,029,906
|
|
4/1/2020
|
—
|
—
|
—
|
|
|
|
—
|
69,470
|
5.28
|
222,019
|
|
(1)
|
In accordance with the rules of the SEC, these amounts represent the aggregate grant date fair value of the stock awards and
option awards granted to the named executive officer during 2020 computed in accordance with ASC 718. Our equity awards valuation
approach and related underlying assumptions for awards granted in 2020 are described in Note 2 “Organization and Summary
of Significant Accounting Policies-Stock-Based Compensation” and Note 13 “Stock-Based Compensation” to the Consolidated
Financial Statements in our Annual Report on Form 10-K. The reported amounts do not necessarily reflect the value that may be realized
by the executive with respect to the awards, which will depend on future changes in stock value and may be more or less than the
amount shown.
|
|
(2)
|
Grant of a performance stock unit. The award is eligible to vest as to 0% to 150% of the target number of shares, based on
the issuer's total stockholder return for the three-year period beginning on the grant date of the award relative to the TSRs of
the companies in the Russell 2000 index over that period.
|
|
Narrative
|
Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table
|
Employment Agreement/Offer
Letters
We have entered into an employment agreement
with Mr. Barrett and offer letters with each of our other named executive officers. Each of our named executive officers serves
on an at-will basis and the employment agreement and offer letters do not have a specified term. The employment agreement and offer
letters provide for a base salary, eligibility to receive an annual performance bonus, and eligibility to participate in employee
benefit or group insurance plans maintained from time to time by us. We are also party to agreements with the named executive officers
providing for the severance benefits described below under “Potential Payments upon Termination or Change in Control.”
Non-Equity Incentive Plan
Awards
For a description of the material terms of
the non-equity incentive plan awards reported in the table above, see “Compensation Discussion and Analysis — Current
Executive Compensation Program Elements—Annual Performance-Based Cash Awards” above.
Equity Incentive Plan Awards
Each of the equity incentive awards reported
in the “Grants of Plan-Based Awards - 2020” table above was granted under, and is subject to, the terms of our 2014
Equity Incentive Plan, referred to as the 2014 Plan. The 2014 Plan is administered by the compensation committee. The compensation
committee has authority to interpret the plan provisions and make all required determinations under the plan. Awards granted under
the plan are generally not transferable other than by will or the laws of descent and distribution, except that the plan administrator
may authorize certain transfers.
Generally, and subject to limited exceptions
set forth in the 2014 Plan, if we undergo certain corporate transactions such as a merger, consolidation or similar transaction,
or a sale of all or substantially all of our assets or securities, the plan administrator has the discretion to determine how outstanding
equity awards will be treated in connection with such corporate transaction (including discretion to provide for accelerated vesting
of such awards in connection with the transaction), and if no affirmative determination is made, all outstanding equity awards
will fully vest and options will be fully exercisable, and will terminate or be terminated in connection with such corporate transaction,
unless the awards are to be assumed or substituted by the successor corporation. The named executive officers are also party to
agreements that provide for acceleration of their equity awards in connection with certain
terminations of their employment as
described below under “Potential Payments upon Termination or Change in Control.”
The equity awards granted to our named executive
officers other than Mr. Barrett in 2020 were in the form of stock options, and restricted stock units, referred to as RSUs. Mr.
Barrett received equity awards in 2020 in the form of stock options, RSUs, and performance stock units, referred to as PSUs. The
vesting requirements applicable to each equity award granted to the named executive officers are described in the footnotes to
the table below and in the section above entitled “Compensation Discussion and Analysis.” RSUs are payable on vesting
in an equal number of shares of our common stock. Stock options represent the right to receive a share of our common stock upon
exercise of the option and payment of the exercise price. The named executive officers do not have the right to vote the shares
subject to the awards and do not have any dividend rights with respect to the RSUs or stock options.
|
Outstanding
|
Equity Awards as of December 31, 2020
|
The following table provides information
regarding outstanding equity awards made to our named executive officers as of December 31, 2020.
|
|
Option
Awards
|
Stock
Awards
|
PSU
Awards
|
Name
|
Grant
Date
|
Number
of Securities Underlying Unexercised Options (#) Exercisable
|
Number
of Securities Underlying Unexercised Options (#) Unexercisable
|
Option
Exercise Price
|
Option
Expiration Date
|
Number
of Shares or Units of Stock that Have not Vested (#)
|
Market
Value of Shares or Units of Stock that Have Not Vested ($) (1)
|
Equity
incentive plan awards: number of unearned shares, units or other rights that have not vested (#)
|
Equity
incentive plan awards: market or payout value of unearned shares, units or other rights that have not vested ($)(1)
|
Michael
Barrett
|
4/1/20
|
—
|
231,568(2)
|
5.28
|
4/1/30
|
|
|
|
|
|
2/22/19
|
137,500
|
162,500(3)
|
5.14
|
2/22/29
|
|
|
|
|
|
3/15/18
|
212,500
|
87,500(4)
|
1.97
|
3/15/28
|
|
|
|
|
|
3/17/17
|
643,275
|
42,885(5)
|
5.80
|
3/17/27
|
|
|
|
|
|
4/1/20
|
|
|
|
|
175,992(6)
|
5,404,714
|
|
|
|
4/1/20
|
|
|
|
|
|
|
219,511(7)
|
6,741,183
|
|
2/22/19
|
|
|
|
|
196,875(8)
|
6,046,031
|
|
|
|
3/15/18
|
|
|
|
|
54,688(9)
|
1,679,468
|
|
|
|
3/17/17
|
|
|
|
|
114,495(10)
|
3,516,141
|
|
|
David
Day
|
4/1/20
|
—
|
115,784(2)
|
5.28
|
4/1/30
|
|
|
|
|
|
2/20/19
|
10,062
|
87,209(3)
|
4.92
|
2/20/29
|
|
|
|
|
|
3/15/18
|
7,841
|
12,197(4)
|
1.97
|
3/15/28
|
|
|
|
|
|
3/15/17
|
6,031
|
1,341(11)
|
6.06
|
3/15/27
|
|
|
|
|
|
5/19/15
|
9,300
|
—
|
16.75
|
5/19/25
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4/1/20
|
|
|
|
|
153,993(12)
|
4,729,125
|
|
|
|
2/20/19
|
|
|
|
|
105,750(13)
|
3,247,583
|
|
|
|
3/15/18
|
|
|
|
|
15,246(14)
|
468,205
|
|
|
|
3/15/17
|
|
|
|
|
2,346(15)
|
72,046
|
|
|
Thomas
Kershaw
|
4/1/20
|
—
|
115,784(2)
|
5.28
|
4/1/30
|
|
|
|
|
|
2/20/19
|
82,041
|
96,959(3)
|
4.92
|
2/20/29
|
|
|
|
|
|
3/15/18
|
7,917
|
25,278(4)
|
1.97
|
3/15/28
|
|
|
|
|
|
3/15/17
|
12,889
|
2,778(11)
|
6.06
|
3/15/27
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4/1/20
|
|
|
|
|
153,993(12)
|
4,729,125
|
|
|
|
2/20/19
|
|
|
|
|
117,563(16)
|
3,610,360
|
|
|
|
3/15/18
|
|
|
|
|
31,597(17)
|
970,344
|
|
|
|
3/15/17
|
|
|
|
|
4,862(15)
|
149,312
|
|
|
Adam
Soroca
|
4/1/20
|
—
|
84,908(2)
|
5.28
|
4/1/30
|
|
|
|
|
|
2/20/19
|
58,264
|
72,584(3)
|
4.92
|
2/20/29
|
|
|
|
|
|
3/15/18
|
23,819
|
12,288(4)
|
1.97
|
3/15/28
|
|
|
|
|
|
4/1/20
|
|
|
|
|
112,928(18)
|
3,468,019
|
|
|
|
2/20/19
|
|
|
|
|
88,313(19)
|
2,712,092
|
|
|
|
3/15/18
|
|
|
|
|
15,360(20)
|
471,706
|
|
|
|
7/14/17
|
|
|
|
|
6,563(21)
|
201,550
|
|
|
|
|
|
|
|
|
|
|
|
|
Katie
Evans
|
2/3/11
|
1,442
|
—
|
3.96
|
2/3/21
|
|
|
|
|
|
6/8/11
|
1,442
|
—
|
3.96
|
6/8/21
|
|
|
|
|
|
7/26/12
|
2,884
|
—
|
4.64
|
7/26/22
|
|
|
|
|
|
7/19/12
|
2,884
|
—
|
4.64
|
7/19/22
|
|
|
|
|
|
3/5/13
|
7,212
|
—
|
5.46
|
3/5/23
|
|
|
|
|
|
7/31/13
|
5,410
|
—
|
7.74
|
7/31/23
|
|
|
|
|
|
12/5/13
|
22,971
|
—
|
3.95
|
12/5/23
|
|
|
|
|
|
2/27/18
|
39,763
|
16,374(22)
|
3.61
|
2/27/28
|
|
|
|
|
|
2/28/19
|
15,376
|
18,170(23)
|
5.16
|
2/28/29
|
|
|
|
|
|
4/1/20
|
—
|
69,470(2)
|
5.28
|
4/1/30
|
|
|
|
|
|
2/24/17
|
|
|
|
|
33,812(24)
|
1,038,367
|
|
|
|
2/27/18
|
|
|
|
|
13,871(25)
|
425,978
|
|
|
|
2/28/19
|
|
|
|
|
37,569(26)
|
1,153,744
|
|
|
|
4/1/20
|
|
|
|
|
92,396(27)
|
2,837,481
|
|
|
|
4/1/20
|
|
|
|
|
102,662(28)
|
3,152,750
|
|
|
|
(1)
|
In accordance with the rules of the SEC, the values represent the product of the number of shares that have not vested and
$30.71, which was the closing market price of our common stock on December 31, 2020. The reported amount does not necessarily reflect
the value that may be realized by the individual because the awards vest over a specified period of time
|
|
|
from the date of grant
contingent upon continued employment and, in the case of PSUs, the issuer’s total stockholder return over the performance
period, and the actual amount received upon sale of shares will depend upon the fair market value of the shares at the times they
are sold.
|
|
(2)
|
These stock options vest (or vested) with respect to 25% of the underlying shares on April 1, 2021 and with respect to the
remaining 75% of the underlying shares in equal monthly installments over the following 36 months.
|
|
(3)
|
These stock options vest (or vested) with respect to 25% of the underlying shares on February 1, 2020 and with respect to the
remaining 75% of the underlying shares in equal monthly installments over the following 36 months.
|
|
(4)
|
These stock options vest (or vested) with respect to 25% of the underlying shares on February 1, 2019 and with respect to the
remaining 75% of the underlying shares in equal monthly installments over the following 36 months.
|
|
(5)
|
These stock options vest (or vested) with respect to 25% of the underlying shares on March 17, 2018 and with respect to the
remaining 75% of the underlying shares in equal monthly installments over the following 36 months.
|
|
(6)
|
These RSUs vest as follows: 47,664 shares
on May 15, 2021, 11,000 on each August 15, November 15, February 15, and May 15 thereafter until February 15, 2024 and 7,328 on
May 15, 2024.
|
|
(7)
|
The vesting of this PSU will be determined based on the issuer's total stockholder return ("TSR") for the three-year
period beginning on the grant date of the award relative to the TSRs of the companies in the Russell 2000 index over that period.
The award is eligible to vest as to 0% to 150% of the target number of performance-based restricted stock units. Number of shares
reflects maximum achievement, based on performance to date.
|
|
(8)
|
These RSUs vest as follows: 43,750 shares on May 15, 2021 and each November 15 and May 15 thereafter until November 15, 2022,
and with respect to 21,875 of such shares on May 15, 2023.
|
|
(9)
|
These RSUs vest as follows: 21,875 shares on each of May 15 and November 15, 2021; and with respect to 10,938 of such shares
on May 15, 2022.
|
|
(10)
|
These RSUs vest on May 15, 2021.
|
|
(11)
|
These stock options vest (or vested) with respect to 25% of the underlying shares on February 1, 2018 and with respect to the
remaining 75% of the underlying shares in equal monthly installments over the following 36 months.
|
|
(12)
|
These RSUs vest as follows: 41,706 shares
on May 15, 2021, 9,625 on each August 15, November 15, February 15, and May 15 thereafter until February 15, 2024 and 6,412 shares
on May 15, 2024.
|
|
(13)
|
These RSUs vest with respect to the underlying shares 23,500 shares on each of May 15, 2021, November 15, 2021, May 15, 2022
and November 15, 2022 and 11,750 of such shares on May 15, 2023.
|
|
(14)
|
These RSUs vest with respect to 6,098 on each of May 15 and November 15, 2021; and with respect to 3,050 of such shares on
May 15, 2022.
|
|
(15)
|
These RSUs vest on May 15, 2021.
|
|
(16)
|
These RSUs vest with respect to 26,125 shares on each November 15 and May 15 hereafter until November 15, 2022, and with respect
to 13,063 of such shares on May 15, 2023.
|
|
(17)
|
These RSUs vest with respect to 12,639 of the underlying shares on each of May 15 and November 15, 2021; and with respect to
6,319 of such shares on May 15, 2022.
|
|
(18)
|
These RSUs vest as follows: 30,585 shares
on May 15, 2021, 7,058 shares on each August 15, November 15, February 15, and May 15 thereafter until February 15, 2024 and 4,705
shares on May 15, 2024.
|
|
(19)
|
These RSUs vest with respect to 19,625 shares on each November 15 and May 15 hereafter until November 15, 2022, and with respect
to 9,813 of such shares on May 15, 2023.
|
|
(20)
|
These RSUs vest with respect to 6,144 of the underlying shares on each of May 15 and November 15, 2021, and with respect to
3,072 of such shares on May 15, 2022.
|
|
(21)
|
These RSUs vest with respect to 4,375 on May 15, 2021, and with respect to 2,188 of such shares on November 15, 2021.
|
|
(22)
|
These stock options vest (or vested) with respect to 25% of the underlying shares on February 14, 2019 and with respect to
the remaining 75% of the underlying shares in equal monthly installments over the following 36 months.
|
|
(23)
|
These stock options vest (or vested) with respect to 25% of the underlying shares on February 14, 2020 and with respect to
the remaining 75% of the underlying shares in equal monthly installments over the following 36 months.
|
|
(24)
|
These RSUs vested on February 14, 2021.
|
|
(25)
|
These RSUs vested or will vest in two equal installments on each of February 14, 2021 and February 14, 2022.
|
|
(26)
|
These RSUs vested or will vest in three equal installments on each of February 14, 2021, February 14, 2022 and February 14,
2023.
|
(27) These RSUs vest as
follows: 25,024 shares on May 15, 2021, 5,775 shares on each August 15, November 15 and February 15 thereafter until February 15,
2024, and 3,847 shares on May 15, 2024.
|
(28)
|
These RSUs vested or will vest in two equal installments on each of April 1, 2021 and April 1, 2022.
|
|
Option
|
Exercises and Stock Vested - 2020
|
The following table provides information
regarding stock options that were exercised by our named executive officers during 2020 and the restricted stock unit awards granted
to our named executive officers that vested during 2020.
|
Option
Awards
|
Stock
Awards
|
Name
|
Number
of
Shares
Acquired on
Exercise(#)
|
Value
Realized on
Exercise
($)(1)
|
Number
of
Shares
Acquired on
Vesting (#)
|
Value
Realized on
Vesting ($)(2)
|
Michael Barrett
|
—
|
—
|
559,159
|
4,435,712
|
David Day
|
250,303
|
1,665,177
|
155,703
|
1,250,574
|
Thomas Kershaw
|
131,000
|
422,390
|
267,409
|
2,251,539
|
Adam Soroca
|
9,175
|
90,030
|
189,725
|
1,668,677
|
Katie Evans
|
528
|
2,619
|
13,525
|
99,544
|
|
(1)
|
The value realized upon the exercise of a stock option is calculated by multiplying (i) the number of shares of our common
stock to which the exercise of the option related, by (ii) the difference between the per-share closing price of our common stock
on the date the stock option was exercised and the per-share exercise price of the options.
|
|
(2)
|
The value realized upon the vesting of a stock award is calculated by multiplying (i) the number of shares of our common stock
that vested, by (ii) the per-share closing price of our common stock on the vesting date. Represents the gross value realized prior
to any applicable tax withholding.
|
Potential Payments upon
Termination or Change in Control
The following section describes the benefits
that may become payable to our named executive officers in connection with a termination of their employment with us and/or a change
in control of Magnite. Due to the number of factors that affect the nature and amount of any benefits provided upon the events
discussed below, any actual amounts paid or distributed may be different from the amounts presented below. Factors that could affect
these amounts include the timing during the year of any such event.
We are a party to an Executive Severance
and Vesting Acceleration Agreement, referred to as the severance agreement, with each of our named executive officers. These agreements
provide that if we terminate the employment of any of these executives without “cause”, if any of these executives
resigns for “good reason”, or if the executive’s employment terminates due to the executive’s death or
“disability” (as such terms are defined in the severance agreement), and prior to and not in connection with the
consummation
of a “sale transaction” (as such term is defined in the severance agreement), the executive will be entitled to receive
continuation of his then-current base salary for a specified period (12 months for Messrs. Barrett and Day and 6 months for Messrs.
Kershaw and Soroca and Ms. Evans), a pro-rata target bonus for the year of termination based upon the portion of the year worked
and net of bonus amounts previously paid for the year, continuation of group health insurance coverage or reimbursement of premiums
for each executive and his respective dependents for a specified period (12 months for Mr. Barrett, 6 months for Messrs. Day and
Soroca and Ms. Evans, and 3 months for Mr. Kershaw), and accelerated vesting of equity awards for a specified period (12 months
for Messrs. Barrett and Day and 6 months for Messrs. Kershaw and Soroca and Ms. Evans).
If we terminate the employment of any
of these executives without cause, if any of them resigns for good reason or if any the executive’s employment terminates
due to the executive’s death or disability, in any case in connection with or following a change in control of Magnite (within
thirteen months of the change in control for Mr. Barrett), the benefits described above will be increased to include for Messrs.
Barrett and Day, additional cash severance equal to one year’s target bonus (paid over 12 months); for Mr. Kershaw and Ms.
Evans, a longer period of continuation of base salary equal to 12 months; for all the executives, full acceleration of vesting
of all equity awards; and for all executives, except Mr. Soroca, a longer period of group health insurance coverage or reimbursement
of premiums (12 months for Messrs. Barrett and Day and Ms. Evans and 6 months for Mr. Kershaw). In December 2019, in connection
with the approval of the merger agreement between us and Telaria, our board approved the modification of the severance agreements
(other than with respect to Ms. Evans, who commenced employment on April 1, 2020) to provide that if the executive officer had
been terminated in connection with or within 13 months following the closing of the merger between us and Telaria on April 1, 2020,
the executive officer would have been entitled to the enhanced change in control severance benefits described in this paragraph.
All severance benefits are conditioned upon
these executives entering into a release of claims with us and abiding by the restrictive covenants contained in our standard confidentiality
agreement (which includes an indefinite confidentiality covenant and one-year post-termination non-solicitation of employees covenant).
The severance agreements also provide that if the payments or benefits made to the executive in connection with a change in control
of Magnite would result in an excise tax under Section 280G and 4999 of the U.S. Internal Revenue Code, such payments or benefits
will be reduced if and to the extent such a reduction would result in a greater after-tax benefit for the executive.
The following tables present our estimates
of the value of the payments and benefits that each of the named executive officers would have been entitled to receive (1) had
his employment been terminated by us without “cause,” by the executive for “good reason”, or due to the
executive’s death or “disability” on December 31, 2020 and (2) had both such a termination of the executive’s
employment and a change in control of Magnite occurred on that date. The actual amounts that would be paid upon a named executive
officer’s termination of employment and/or a change in control can only be determined at the time of such event.
Severance Benefits(1)
Name
|
Cash
Severance
($)(2)
|
Pro-Rata
Bonus ($)(3)
|
Continued
Health
Insurance
Coverage
($)(4)
|
Value
of
Accelerated
Vesting of
Equity
Awards ($)(5)
|
Total
($)
|
Michael Barrett
|
1,100,000
|
275,000
|
34,060
|
34,767,402
|
36,176,462
|
David Day
|
731,000
|
150,500
|
34,060
|
14,094,063
|
15,009,623
|
Thomas Kershaw
|
500,000
|
175,000
|
17,030
|
15,699,068
|
16,391,098
|
Adam Soroca
|
162,500
|
131,250
|
17,030
|
11,237,675
|
11,548,455
|
Katie Evans
|
400,000
|
150,000
|
17,030
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3,526,068
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4,093,098
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(1)
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As discussed above, in December 2019, in connection with the approval of the merger agreement between us and Telaria, our board
approved the modification of the severance agreements with our named executive officers (other than with respect to Ms. Evans,
who commenced employment on April 1, 2020) to provide that if the executive officer had been terminated in connection with or within
13 months following the closing of the merger between us and Telaria on April 1, 2020, the executive officer would have been entitled
to the enhanced change in control severance benefits described in this paragraph. In addition, the consummation of the Telaria
Merger represented a change of control of Telaria for purposes of Ms. Evans’ severance agreement with respect to any equity
that had been granted to Ms. Evans prior to the Telaria Merger. Accordingly, the amounts above reflect enhanced change of control
severance benefits.
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(2)
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The cash severance amount included in the table above is equal to 12 months base salary plus target bonus (in the case of Messrs.
Barrett and Day), 12 months base salary (in the case of Ms. Evans or Mr. Kershaw) or 6 months base salary (in the case of Mr. Soroca).
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(3)
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For 2020, the compensation committee approved a bi-furcated bonus plan for 1H 2020 and 2H 2020. The pro-rata bonus amount included
in the table above is equal to the executive’s target bonus for 2H 2020.
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(4)
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The executive is entitled to continuation of group health insurance coverage or reimbursement of premiums for the executive
and his dependents for a specified period (12 months for Messrs. Barrett and Day and Ms. Evans, and 6 months for Messrs. Kershaw
and Soroca).
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(5)
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The equity acceleration amount included in the table represents the value of the equity awards that would vest in connection
with the termination of the executive’s employment. The value of the accelerated options and RSUs presented in the table
is calculated based on our closing stock price on December 31, 2020 of $30.71 and, in the case of the accelerated options, less
the exercise price of the options.
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Severance Benefits
(Change in Control)
Name
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Cash
Severance
($)(1)
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Pro-Rata
Bonus ($)(2)
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Continued
Health
Insurance
Coverage ($)(3)
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Value
of
Accelerated
Vesting of
Equity
Awards ($)(4)
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Total
($)
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Michael Barrett
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1,100,000
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275,000
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34,060
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34,767,402
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36,176,462
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David Day
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731,000
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150,500
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34,060
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14,094,063
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15,009,623
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Thomas Kershaw
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500,000
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175,000
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17,030
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15,699,068
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16,391,098
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Adam Soroca
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162,500
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131,250
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17,030
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11,237,675
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11,548,455
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Katie Evans
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400,000
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150,000
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17,030
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11,282,921
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11,849,951
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(1)
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The cash severance amount included in the table above is equal to 12 months base salary plus target bonus (in the case of Messrs.
Barrett and Day), 12 months base salary (in the case of Ms. Evans or Mr. Kershaw) or 6 months base salary (in the case of Mr. Soroca).
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(2)
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For 2020, the compensation committee approved a bi-furcated bonus plan for 1H 2020 and 2H 2020. The pro-rata bonus amount included
in the table above is equal to the executive’s target bonus for 2H 2020.
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(3)
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The executive is entitled to continuation of group health insurance coverage or reimbursement of premiums for the executive
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and his dependents for a specified period (12 months for Messrs. Barrett and Day and Ms. Evans, and 6 months for Messrs. Kershaw
and Soroca).
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(4)
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The equity acceleration amount included in the table represents the value of the equity awards that would vest in connection
with the termination of the executive’s employment. The value of the accelerated options and RSUs presented in the table
is calculated based on our closing stock price on December 31, 2020 of $30.71, and, in the case of the accelerated options, less
the exercise price of the options.
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Pursuant to the Exchange Act, we are required
to disclose the ratio of the total annual compensation of our President and CEO, Michael Barrett, to the median of the total annual
compensation of all of our employees (excluding our CEO). Based on SEC rules for this disclosure and applying the methodology described
above, we have determined that our CEO's total compensation for 2020 was $3,512,905, and the median of the total 2020 compensation
of all of our employees (excluding our CEO) was $167,686. Accordingly, we estimate the ratio of our CEO's total compensation for
2020 to the median of the total 2020 compensation of all of our employees (excluding our CEO) to be 20.95 to 1.
We identified the median employee by taking
into account the annualized total cash compensation for 2020 for all individuals, excluding our CEO, who were employed by us or
one of our affiliates on December 31, 2020. We included all employees, whether employed on a full-time or part-time basis. We did
not make any assumptions, adjustments or estimates with respect to their total cash compensation for 2020, but we did annualize
the compensation for any employees who were not employed by us for all of 2020. Because our originally identified median employee
was hired mid-year, we selected a different median employee with substantially similar compensation. We believe total cash compensation
for all employees is an appropriate measure because we do not distribute annual equity awards to all employees.
Once the median employee was identified as
described above, that employee's total annual compensation for 2020 was determined using the same rules that apply to reporting
the compensation of our named executive officers (including our CEO) in the “Total” column of the Summary Compensation
Table. The total compensation amounts included in the first paragraph of this pay-ratio disclosure were determined based on that
methodology.
COMMON STOCK OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table presents information
regarding beneficial ownership of our equity interests as of May 4, 2021 by:
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each stockholder or group of stockholders known by us to be the beneficial owner of more than 5% of our outstanding equity
interests;
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•
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each of our directors and director nominees;
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•
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each of our named executive officers; and
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•
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all of our current directors and executive officers as a group.
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Beneficial ownership is determined in accordance
with the rules of the SEC, and thus represents voting or investment power with respect to our securities. Unless otherwise indicated
below, to our knowledge, the persons and entities named in the table have sole voting and sole investment power with respect to
all shares beneficially owned, subject to community property laws where applicable. Percentage ownership of our common stock is
based on 128,859,048 shares of our common stock outstanding as of May 4, 2021.
Name and Address
of Beneficial Owner(1)
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Shares
of Common
Stock(2)
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Percent
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5% Stockholders
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RTL US Holding Inc.(3)
BlackRock, Inc.(4)
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12,374,315
8,030,030
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9.6
6.2
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Named Executive Officers
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|
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Michael Barrett(5)
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2,201,376
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1.7
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David Day(6)
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136,033
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*
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Thomas Kershaw(7)
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391,083
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*
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Katie Evans(8)
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348,252
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*
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Adam Soroca(9)
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309,308
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*
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Directors and Director Nominees
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Paul Caine
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166,172
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*
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Robert J. Frankenberg(10)
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152,986
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*
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Sarah P. Harden(11)
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53,626
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*
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Doug Knopper
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92,884
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*
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Rachel Lam
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156,891
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*
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James Rossman(12)
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303,191
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*
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Robert F. Spillane(13)
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152,986
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*
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Lisa L. Troe(14)
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147,836
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*
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All Current Executive Officers and Directors as a Group (16 persons)(15)
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5,334,179
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4.1
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*
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Indicates ownership of less than one percent.
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(1)
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Except as noted, the address of the named beneficial owner is c/o Magnite, Inc., 6080 Center Drive, 4th Floor, Los Angeles,
California 90045.
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(2)
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The number of shares beneficially owned by each stockholder is determined under rules promulgated by the SEC and the information
is not necessarily indicative of beneficial ownership for any other purpose. Under such rules, beneficial ownership includes shares
(i) as to which the individual or entity has sole or shared voting power or investment power, and (ii) the individual owns or has
the right to acquire beneficial ownership of within 60 days of May 4, 2021. Shares not owned but which the individual has the right
to acquire beneficial ownership within 60 days of May 4, 2021 are included in the numerator and denominator for that specific individual
in calculating that individual’s beneficial ownership percentage, but not deemed outstanding in the aggregate for computing
the ownership percentage for others.
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(3)
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At the closing of the acquisition SpotX, Inc. on April 30, 2021, we issued 12,374,315 shares to RTL US Holdings Inc.
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(4)
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Beneficial ownership is based solely on the Schedule 13G/A filed with SEC on January 29, 2021 by BlackRock, Inc. (“BlackRock”)
with respect to our common stock. The Schedule 13G/A states that BlackRock has sole voting power as to 7,873,494 shares and sole
dispositive power as to 8,030,030 shares. The address for BlackRock is 55 East 52nd Street, New York, NY 10055.
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(5)
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Includes 227,784 restricted stock units that will vest within 60 days of May 4, 2021 and 1,196,025 shares issuable pursuant
to outstanding stock options exercisable by Mr. Barrett within 60 days of May 4, 2021, of which 1,161,376 were fully vested as
of May 4, 2021.
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(6)
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Includes 73,650 restricted stock units that will vest within 60 days of May 4, 2021 and 62,383 shares issuable pursuant to
outstanding stock options exercisable by Mr. Day within 60 days of May 4, 2021, of which 49,109 were fully vested as of May 4,
2021.
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(7)
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Includes 85,332 restricted stock units that will vest within 60 days of May 4, 2021 and 130,550 shares issuable pursuant to
outstanding stock options exercisable by Mr. Kershaw within 60 days of May 4, 2021, of which 114,656 were fully vested as of May
4, 2021.
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(8)
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Includes 25,024 restricted stock units that will vest within 60 days of May 4, 2021 and 130,859 shares issuable pursuant to
outstanding stock options exercisable by Ms. Evans within 60 days of May 4, 2021, of which 124,228 were fully vested as of May
4, 2021.
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(9)
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Includes 60,729 restricted stock units that will vest within 60 days of May 4, 2021 and 130,632 shares issuable pursuant to
outstanding stock options exercisable by Mr. Soroca within 60 days of May 4, 2021, of which 119,755 were fully vested as of May
4, 2021.
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(10)
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Includes 86,500 shares issuable pursuant to outstanding stock options exercisable by Mr. Frankenberg within 60 days of May
4, 2021, all of which were fully vested as of such date.
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(11)
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Includes 18,882 restricted stock units that will vest within 60 days of May 4, 2021.
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(12)
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Includes 36,066 shares issuable pursuant to outstanding stock options exercisable by Mr. Rossman within 60 days of May 4, 2021,
all of which were fully vested as of such date.
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(13)
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Includes 86,500 shares issuable pursuant to outstanding stock options exercisable by Mr. Spillane within 60 days of May 4,
2021, all of which were fully vested as of such date.
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(14)
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Includes 86,500 shares issuable pursuant to outstanding stock options exercisable by Ms. Troe within 60 days of May 4, 2021,
all of which were fully vested as of such date.
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(15)
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Includes 560,565 restricted stock units that will vest within 60 days of May 4, 2021 and 2,246,360 shares issuable pursuant
to outstanding stock options exercisable within 60 days of May 4, 2021, of which 2,148,972 were fully vested as of such date.
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EQUITY COMPENSATION
PLAN INFORMATION
The following table
provides information as of December 31, 2020 with respect to the shares of our common stock that may be issued under our
existing equity compensation plans:
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|
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Plan Category
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Number of
Securities to be
Issued
Upon
Exercise of
Outstanding
Options
and Rights
|
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Weighted-
average
Exercise Price of
Outstanding
Options
and Rights(4)
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Number of Securities
Remaining Available
for Future Issuance
Under Equity
Compensation Plans
(Excluding Securities
Reflected in Column
(a))
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(a)
|
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(b)
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(c)
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Equity Compensation Plans Approved by Stockholders(1)
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9,961,429
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$6.44
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4,125,561(5)
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Equity Compensation Plans Not Approved by Stockholders(2)
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6,166,099
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$4.82
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7,629,133(6)
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Total
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16,127,528(3)
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$5.61
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11,754,694
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(1) Consists of our
2007 Stock Incentive Plan, 2014 Equity Incentive Plan, and 2014 Employee Stock Purchase Plan.
(2) Consists of our
2014 Inducement Grant Equity Incentive Plan, the nToggle, Inc. 2014 Equity Incentive Plan, and the Telaria Plans, each described
below.
(3) Represents 6,695,155
shares to be issued upon exercise of outstanding options and 9,432,373 shares subject to outstanding unvested restricted stock
units. Includes 146,341 performance related restricted stock units that vest based on certain stock price performance metrics.
Between 0% and 150% of the performance stock units will vest on the third anniversary of its grant date.
(4) Represents the
weighted-average exercise price of outstanding options. Shares subject to outstanding unvested restricted stock units and performance-based
stock units become issuable upon vesting without any exercise price or other cash consideration required.
(5) Consists of 2,076,397
shares that were available for future issuance under the 2014 Equity Incentive Plan and 2,049,164 shares that were available for
future issuance under the 2014 Employee Stock Purchase Plan as of December 31, 2020, including 263,750 shares subject to purchase
during the offering periods in effect as of December 31, 2020. On January 1, 2021, an additional 5,701,427 shares became available
for future issuance under the 2014 Equity Incentive Plan and an additional 1,140,285 shares became available for issuance under
the 2014 Employee Stock Purchase Plan, both pursuant to the plan’s evergreen provisions.
(6) Shares available
for future issuance under the 2014 Inducement Grant Equity Incentive Plan and the Telaria, Inc. 2013 Equity Incentive Plan as of
December 31, 2020.
Our 2014 Inducement
Grant Equity Incentive Plan was adopted by our board in November 2014 for use in making employment inducement awards pursuant to
New York Stock Exchange Rule 303A.08. A total of 1,000,000 shares of our common stock was initially reserved for granting stock
options, restricted stock, restricted stock units, stock appreciation rights, performance stock awards, and other awards under
our 2014 Inducement Grant Equity Incentive Plan. Our board or the compensation committee may increase the number of shares reserved
for granting awards under this plan in its discretion, from time to time. The share reserve under this plan was increased by 1,700,000
shares in March 2017 to provide shares underlying the initial equity awards granted to Mr. Barrett in connection with his hire
as our President and Chief Executive Officer, which were made as inducement awards. Our board and the compensation committee have
discretion to determine the terms of awards granted under our 2014 Inducement Grant Equity Incentive Plan, including vesting, forfeiture
and acceleration. The exercise price for stock options granted under our 2014 Inducement Grant Equity Incentive Plan will not be
less than the fair market value of our common stock on the date of grant. Restricted stock units may be granted in exchange for
any form of legal consideration acceptable to our board and restricted stock may be granted in
exchange for the payment of a purchase
price, past or future services to our company or any other form of legal consideration. In connection with our acquisition of iSocket,
Inc. in November 2014, we issued 132,000 stock options under our 2014 Inducement Grant Equity Incentive Plan with an exercise price
of $14.62 per share and a ten-year term, and vesting over approximately four years, with 25% of the total shares granted vesting
on the first anniversary of the date of the acquisition of iSocket, Inc. and the balance vesting in 36 equal monthly installments
thereafter. In connection with the acquisition of iSocket, we also issued 126,050 restricted stock unit awards under the 2014 Inducement
Grant Equity Incentive Plan, vesting over approximately 54 months. In connection with our acquisition of nToggle, Inc. in July
2014, we issued an aggregate of 174,117 restricted stock units under the 2014 Inducement Grant Equity Incentive Plan, vesting over
approximately four years.
We assumed the nToggle,
Inc. 2014 Equity Incentive Plan in connection with our acquisition of nToggle, Inc. in July 2017. In connection with the acquisition,
and giving effect to the exchange ratio used to determine the number of Rubicon Project options we issued in exchange for outstanding
nToggle options, we assumed a total of 432,482 options previously granted under the nToggle, Inc. 2014 Equity Incentive Plan, with
a weighted-average exercise price per share of $0.51, remaining terms ranging to April 2027 and remaining vesting periods ranging
to April 2021. We also assumed 77,499 shares of unvested restricted stock with a remaining vesting period to October 2019. In addition,
480,673 shares of common stock remaining available under the nToggle, Inc. 2014 Equity Incentive Plan were added to the pool of
available shares under our 2014 Equity Incentive Plan, and can be used for awards during the period when they would have been available
for grant under the nToggle 2014 Equity Incentive Plan to persons who were not employed by the company or its affiliates immediately
before the nToggle acquisition, and otherwise in accordance with the New York Stock Exchange Rule 303A.08. No Further awards will
be made under the nToggle 2014 Equity Incentive Plan.
We assumed the
Telaria, Inc. 2013 Equity Incentive Plan, as amended, the Telaria, Inc. 2008 Stock Plan, as amended, the ScanScout, Inc. 2009 Equity
Incentive Plan, as amended, and certain new hire inducement awards granted by the Telaria board (together, the “Telaria Plans”)
in April 2020 in connection with the Telaria Merger. In connection with the Telaria Merger, and giving effect to the exchange ratio
used to determine the number of Magnite options we issued in exchange for outstanding Telaria options, we assumed a total of 4,998,622
options previously granted under the Telaria Plans, with a weighted-average exercise price per share of $3.80, remaining terms
ranging to February 2030 and remaining vesting periods ranging to January 2024.
We also assumed
2,416,824 shares of unvested restricted stock with a remaining vesting period to March 2024. In addition, 7,291,151 shares of common
stock remaining available under the Telaria, Inc. 2013 Equity Incentive Plan were added to the 2014 Equity Incentive Plan, which
shares will be used solely with respect to new hire awards or awards to former employees of Telaria prior to the merger. As of
December 31, 2020, 7,272,204 shares were available for issuance under the Telaria, Inc. 2013 Equity Incentive Plan.
CERTAIN RELATIONSHIPS AND RELATED PERSON
TRANSACTIONS
There are no transactions since January 1,
2020 to which the company has been a participant, in which the amount involved in the transaction exceeded or will exceed $120,000,
and in which any of our directors, executive officers or beneficial holders of more than 5% of our capital stock, or their family
members, had or will have a direct or indirect material interest. Compensation arrangements with our directors and officers are
described under “Director Compensation” and “Executive Compensation.”
Indemnification Agreements
We have entered into indemnification agreements
with each of our current directors, executive officers and certain other officers. The indemnification agreements and our amended
and restated certificate of incorporation and amended and restated bylaws require us to indemnify our directors and officers to
the fullest extent permitted by Delaware law.
Procedures for Approval of Related Person
Transactions
We have adopted
a formal written policy providing that related person transactions may be consummated or continued only if approved or ratified
by the audit committee. The policy defines “related person transactions” as transactions in which we are or will be
a participant, the aggregate amount involved since the beginning of the company’s last fiscal year exceeds or may be expected
to exceed $100,000, and a related person has or will have a direct or indirect interest. For purposes of this policy, a related
person is a person who is or was since the beginning of our last fiscal year a director, nominee for director, or executive officer;
a greater than 5% beneficial owner of our common stock; or an immediate family member of any such person. The policy provides that
our legal department will review each proposed related person transaction and prepare a description for the audit committee, which
will review the proposed transaction and consider such factors, as it deems appropriate, including at least the following factors:
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the terms of the transaction as compared to terms available for a similar transaction with a non-related party;
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the extent of the related person’s interest in the transaction;
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the disclosure requirements associated with the transaction;
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the effect of the transaction upon the independence of any director involved;
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•
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the effect of the transaction upon the ability of the related person to fulfill his or her duties to the company; and
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•
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the appearance of the transaction.
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DELINQUENT SECTION 16(a) REPORTS
Section 16(a) of the Exchange Act requires
our directors, executive officers, and persons who beneficially own more than ten percent of our common stock to file reports on
Forms 3, 4 and 5 with the SEC concerning their ownership of, and transactions in, our common stock.
To our knowledge, based solely on our review
of the copies of such reports furnished to us and on the representations of the reporting persons, all of these reports were timely
filed for the fiscal year ended December 31, 2020, except that: (i) a report on Form 4 for Blima Tuller, our former Chief Accounting
Officer, relating to a restricted stock unit grant made on February 1, 2020 was filed late on February 20, 2020, and (ii) reports
on Form 4 for each of our non-management directors relating to annual restricted stock unit grants made on July 8, 2020 were filed
late on July 16, 2020.
STOCKHOLDER PROPOSALS AND NOMINATIONS
FOR
THE 2022 ANNUAL MEETING OF STOCKHOLDERS
Pursuant to Exchange Act Rule 14a-8(e), proposals
of stockholders being submitted for inclusion in our proxy materials for our 2022 annual meeting of stockholders must be received
by us at our corporate headquarters at 6080 Center Drive, 4th Floor, Los Angeles, California 90045, directed to the attention of
our Corporate Secretary, not later than January 27, 2022 to be considered for inclusion in the proxy statement for that meeting.
Under our bylaws, director nominations and
other proposals at our 2022 annual meeting of stockholders that are not intended or eligible for inclusion in the proxy statement
for that meeting may, nonetheless, be considered for presentation at the meeting if the nomination or proposal is delivered to
or mailed and received by us at our corporate headquarters at 6080 Center Drive, 4th Floor, Los Angeles, California 90045 not earlier
than the close of business on February 28, 2022 and not later than the close of business on March 30, 2022. However, if the date
of the 2022 annual meeting is more than 30 days before the first anniversary of the Annual Meeting or more than 60 days after such
anniversary date, notice by the stockholder to be timely must be delivered not earlier than the
close of business on the 120th
day prior to such annual meeting and not later than the close of business on the later of the 90th day prior to such annual meeting
or the 10th day following the date on which we first make public announcement of the date of the annual meeting. A copy of our
bylaws may be obtained from our Corporate Secretary.
The chairman of the meeting may refuse to
acknowledge or introduce any matter brought by a stockholder at a meeting if notice of the matter is not received within the applicable
deadlines or does not comply with our bylaws. If a stockholder does not meet these deadlines, or does not satisfy the requirements
of Rule 14a-4 of the Exchange Act, the persons named as proxies will be allowed to use their discretionary voting authority when
and if the matter is raised at the meeting.
ANNUAL REPORT
A copy of our 2020 Annual Report as filed
with the SEC on February 25, 2021, without exhibits, will be provided without charge upon written request addressed to our Corporate
Secretary at our corporate headquarters at 6080 Center Drive, 4th Floor, Los Angeles, California 90045. A copy of our 2020 Annual
Report may also be obtained via the Internet by following the instructions set forth in the Notice of Internet Availability of
Proxy Materials or in the “Financials and Filings” section of our Investor Relations website at http://investor.magnite.com.
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By Order of the Board of Directors,
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Aaron Saltz
Corporate Secretary
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May 17, 2021
WHETHER OR NOT YOU EXPECT TO ATTEND
THE ANNUAL MEETING ONLINE, IN ORDER TO ENSURE REPRESENTATION OF YOUR SHARES, PLEASE VOTE AS PROMPTLY AS POSSIBLE. YOU
ARE URGED TO SUBMIT YOUR PROXY OR VOTING INSTRUCTIONS ELECTRONICALLY OR BY TELEPHONE BY FOLLOWING THE INSTRUCTIONS ON YOUR NOTICE
OF INTERNET AVAILABILITY OF PROXY MATERIALS OR, IF YOU RECEIVED A PRINTED COPY OF THE PROXY MATERIALS, ON YOUR PROXY CARD
OR VOTING INSTRUCTION FORM. IF YOU REQUESTED A PRINTED COPY OF YOUR PROXY MATERIALS, YOU MAY ALSO VOTE BY MAIL BY SIGNING, DATING,
AND RETURNING YOUR PROXY CARD OR VOTING INSTRUCTION FORM IN THE PRE-PAID ENVELOPE PROVIDED. VOTING NOW VIA PROXY WILL NOT LIMIT
YOUR RIGHT TO CHANGE YOUR VOTE OR TO ATTEND THE ANNUAL MEETING ONLINE.
[This Page Intentionally Left Blank]
ANNUAL
MEETING OF STOCKHOLDERS OF
June 28, 2021
GO
GREEN
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e-Consent
makes it easy to go paperless. With e-Consent, you can quickly access your proxy material, statements and other eligible documents
online, while reducing costs, clutter and paper waste. Enroll today via www.astfinancial.com to enjoy online access.
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NOTICE OF INTERNET
AVAILABILITY OF PROXY MATERIAL:
The Notice of Meeting,
2020 Annual Report, proxy statement and proxy card
are available at http://www.astproxyportal.com/ast/18899/
Please sign, date and mail
your proxy card in the
envelope provided as soon
as possible.
Please
detach along perforated line and mail in the envelope provided.
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00003333030000000000
6
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062821
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THE BOARD OF DIRECTORS RECOMMENDS
A VOTE "FOR" THE ELECTION OF DIRECTORS, "FOR" PROPOSAL 2 AND "FOR" PROPOSAL 3.
PLEASE SIGN, DATE AND RETURN PROMPTLY
IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE ☒
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To
change the address on your account, please check the box at right and indicate your new
address in the address space above. Please note that changes to the registered name(s)
on the account may not be submitted via this method.
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FOR
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AGAINST
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ABSTAIN
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1.
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Election
of Directors:
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Robert J. Frankenberg
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Sarah P. Harden
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James Rossman
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2.
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To ratify the selection of Deloitte & Touche LLP as the company’s independent registered public accounting firm for the
current fiscal year.
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3.
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To approve, on an
advisory basis, of the compensation of the company's named executive officers.
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4.
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To
transact such other business as may properly come before the meeting or any postponements or adjournments thereof.
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In their
discretion, the proxies are authorized to vote upon such other business as may properly come before the Annual Meeting. This proxy
when properly executed will be voted as directed herein by the undersigned Stockholder. If no direction is made, this proxy
will be voted “FOR” the election of directors, "FOR" Proposal 2 and "FOR" Proposal 3.
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Signature of Shareholder
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Date:
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Signature of Shareholder
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Date:
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Note:
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Please sign exactly as your name or names appear
on this Proxy. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee
or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized
officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized person.
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Proxy
for Annual Meeting of Stockholders on June 28, 2021
Solicited on Behalf of the Board of Directors
The
undersigned hereby appoints David L. Day and Aaron Saltz as proxies, each with the power to appoint his substitute, and hereby
authorizes them to represent and vote, as designated on the reverse side hereof, all the shares of common stock of Magnite, Inc.
held of record by the undersigned at the close of business on May 4, 2021 at the Annual Meeting of Stockholders to be held on Monday,
June 28, 2021 at 10:00 a.m., Pacific Time, via live webcast, and at any postponement or adjournment thereof and to vote in their
discretion upon such other matters as may be properly presented at the meeting.
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(Continued
and to be signed on the reverse side)
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