WIX Wix com Ltd

---

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

 

Washington, D.C.  20549

______________________

 

FORM 6-K

 

REPORT OF FOREIGN PRIVATE ISSUER

 

Pursuant to Rule 13a-16 or 15d-16 of the

Securities Exchange Act of 1934

 

For the month of September 2023

 

Commission File Number: 001-36158

 

Wix.com Ltd.

(Translation of registrant’s name into English)

 

5 Yunitsman St.,

Tel Aviv, Israel, 6936025

 (Address of principal executive offices)

 

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

 

 

EXPLANATORY NOTE

 

(i)

Notice and Proxy Statement with respect to the Company’s Annual General Meeting of the Shareholders describing proposals to be voted upon at the meeting, the procedure for voting in person or by proxy at the meeting and various other details related to the meeting; and

(ii)

a Proxy Card whereby holders of ordinary shares of the Company may vote at the meeting without attending in person.

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

Date: September 29, 2023

Wix.com Ltd.   By: /s/ Naama Kaenan Name: Naama Kaenan Title: General Counsel

EXHIBIT INDEX

 

The following exhibits are filed as part of this Form 6-K:

 

---

 

 

September 29, 2023

 

Dear Wix.com Ltd. Shareholders:

One of the most important functions of our independent Board of Directors is to provide robust oversight of management while ensuring that the execution of our strategic plans will continue to create sustainable shareholder value.

 

Over the past decade as a public company, under the execution of our management team, Wix successfully built a leadership position in the Self Creators market, enabling millions of small business owners, creators and organizations to build, manage and grow their visions online through a dynamic, robust web presence.  Over four years ago, the Company made the strategic decision to expand its addressable market to professional designers, agencies, freelancers and developers, which are known as “Partners,” providing them with a secure, reliable, fast and robust platform on which they can build for others.

 

We are proud of what the Company has achieved over the last four years, successfully executing on this strategic expansion of its market and generating significant growth in new revenue streams, such as Business Solutions revenue, Transaction revenue, and Partners revenue.  Within the last 18 months in particular, our management team implemented multiple measures to promote greater operating efficiency, driving tremendous growth in free cash flow and putting the Company on the path to achieving sustainable levels of profitability growth for the long term.  Wix continues to be one of the industry leaders in innovation and development, most recently introducing a series of new products that leverage AI technology, as well as launching Wix Studio, the new cornerstone product for Partners using Wix.

 

Ensuring appropriate Board composition is another focus area for our Board.  Wix’s Board is a diverse group of individuals with expertise across multiple vectors.  However, every year, the Board and its Nominating and Corporate Governance Committee assess the diversity of experience, expertise and perspectives across the Board to closely align with the changing operating environment as well as Wix’s current strategic objectives, balancing Board stability and expertise with valuable new perspectives and adaptability.  As part of our track record of regularly refreshing and enhancing the Board, we appointed two new directors in March 2023.  These directors have a track record of operational excellence and driving organizational efficiency, which will support the Board’s oversight as the Company continues to create value, while focusing on profitability alongside product innovation.

 

Another key principle emphasized by our Board is to maintain an open dialogue with you, our shareholders.  The Board believes that shareholder feedback is key to the deliberations of the Board and its committees, as we take actions that are ultimately intended to create and enhance shareholder value.  To that end, we have engaged regularly and extensively with shareholders to understand your perspectives, which in turn has helped inform our discussions and decision-making processes.

 

This year we are seeking binding shareholder approval for a proposal of our CEO’s compensation plan, which includes several features that link incentive and pay outcomes with Company performance, thereby aligning the interests of our CEO with those of our shareholders.  The Compensation Committee designed the proposed compensation structure taking into consideration shareholder feedback received during our shareholder outreach earlier this year.

 

We will continue to prioritize shareholder value and take the appropriate steps designed to allow the Company to deliver on its commitments to achieve robust and profitable growth, while maintaining its standing as a good corporate citizen and attracting and retaining the best global talent.

 

We thank you for your continued support of Wix.

 

Sincerely,

MARK TLUSZCZ
Chair of the Board of Directors

 

NOTICE OF 2023 ANNUAL GENERAL MEETING OF SHAREHOLDERS

 

You are invited to attend the 2023 Annual General Meeting of Shareholders (the “Meeting”) of Wix.com Ltd. (“Wix,” “we,” “our” or the “Company”).

 

Date and Time:
November 6, 2023 at 1:30 p.m. (Israel time).

 

Meeting Location:
The Company’s principal executive offices at the Wix Campus, 5 Yunitsman Street, Building B, 5^th Floor, Tel Aviv, Israel, 6936025 (telephone number is +972-3-545-4900).

 

Who Can Vote:
Shareholders of record at the close of business on October 4, 2023.

Items of Business and Board
Voting Recommendation

 

The Board unanimously recommends that you vote in favor of each of the foregoing proposals, which are more fully described in the accompanying proxy statement.

 

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

 

You can vote your ordinary shares by attending the Meeting or by following the instructions under “How You Can Vote” below.

 

YOUR VOTE IS IMPORTANT.  Whether or not you plan to attend the Meeting, it is important that your ordinary shares be represented and voted at the Meeting.

 

More detailed information and instructions regarding the Meeting, the voting process, the quorum and the required votes for the approval of each of the proposals can be found under “General Information” below.

 

 

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

This proxy statement contains forward-looking statements, within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties.  Such forward-looking statements may include projections regarding our future performance, including, but not limited to revenue, bookings and free cash flow, and may be identified by words like “anticipate,” “assume,” “believe,” “aim,” “forecast,” “indication,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “outlook,” “future,” “will,” “seek” and similar terms or phrases.

 

The forward-looking statements contained in this proxy statement are based on management’s current expectations, which are subject to uncertainty, risks and changes in circumstances that are difficult to predict and many of which are outside of our control.  Important factors that could cause our actual results to differ materially from those indicated in the forward-looking statements include, among others, our expectation that we will be able to attract and retain registered users and generate new premium subscriptions, in particular as we continuously adjust our marketing strategy and as the macro-economic environment continues to be turbulent; our expectation that we will be able to increase the average revenue we derive per premium subscription, including through our partners; our expectations related to our ability to develop relevant and required products using Artificial Intelligence (“AI”), the regulatory environment impacting AI related activities including privacy and intellectual property aspects, and potential competition from third-party AI tools which may impact our business; our expectation that new products and developments, as well as third-party products we will offer in the future within our platform, will receive customer acceptance and satisfaction, including the growth in market adoption of our online commerce solutions; our assumption that historical user behavior can be extrapolated to predict future user behavior, in particular during the current turbulent macro-economic environment; our expectation regarding the successful impact of our previously announced cost-efficiency plan and other cost saving measures we may take in the future; expectations regarding our ability to reach our profitability targets; our prediction of the future revenues and/or bookings generated by our user cohorts and our ability to maintain and increase such revenue and growth, as well as our ability to generate and maintain elevated levels of free cash flow and profitability; our expectation to maintain and enhance our brand and reputation; our expectation that we will effectively execute our initiatives to improve our user support function through our customer care team, and that our recent downsizing of our customer care team will not affect our ability to continue attracting registered users and increase user retention, user engagement and sales; our plans to successfully localize our products, including by making our product, support and communication channels available in additional languages and to expand our payment infrastructure to transact in additional local currencies and accept additional payment methods; our expectation regarding the impact of fluctuations in foreign currency exchange rates, interest rates, potential illiquidity of banking systems, and other recessionary trends on our business; our expectations relating to the repurchase of our ordinary shares and/or onvertible notes pursuant to our repurchase program, which remains subject to Israeli court approval and depends on a number of factors, including the market price of the Company’s ordinary shares, general market and economic conditions and other corporate considerations; our expectations that we will file motions with, and obtain the approval of, the Israeli court to effect all or a portion of our repurchase program; our expectation that we will effectively manage our infrastructure; our expectations regarding the outcome of any regulatory investigation or litigation, including class actions; our expectations regarding future changes in our cost of revenues and our operating expenses on an absolute basis and as a percentage of our revenues, as well as our ability to achieve or maintain profitability, including profitability targets; our expectations regarding changes in the global, national, regional or local economic, business, competitive, market, and regulatory landscape, including as a result of COVID-19, and as a result of the military invasion of Ukraine by Russia; our planned level of capital expenditures and our belief that our existing cash and cash from operations will be sufficient to fund our operations for at least the next 12 months and for the foreseeable future; our expectations with respect to the integration and performance of acquisitions; our ability to attract and retain qualified employees and key personnel; and our expectations about entering into new markets and attracting new customer demographics, including our ability to successfully attract new partners and large enterprise-level users, and to grow our activities with these customer types as anticipated, and other factors discussed under the heading “Risk Factors” in the Company’s annual report on Form 20-F for the year ended December 31, 2022 filed with the Securities and Exchange Commission on March 30, 2023 (the “Form 20-F”).  The preceding list is not intended to be an exhaustive list of all of our forward-looking statements.

 

Any forward-looking statement made by us in this proxy statement speaks only as of the date hereof.  Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them.  We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future developments or otherwise.

 

SUMMARY HIGHLIGHTS

 

 

Wix is a leading platform to create, manage and grow a digital presence.  Since our founding in 2006, we have evolved our platform to serve the needs of any type of user, business or organization in search of a solution to succeed online.  Beginning in 2019, in addition to enhancing our platform with products designed to help businesses online, we focused on a strategic initiative to expand our addressable market beyond the Self Creator market into the professional market of design agencies, developers and freelancers, which we refer to collectively as our “Partners.”  This expansion required meaningful investments in infrastructure, support, product development, and sales and marketing.

 

During this expansion, we accomplished a great deal:

 

 

Our success since 2019 is demonstrated by several metrics:

 

 

Note: Percentage increase for total Registered Users is as of June 30, 2023 compared to December 31, 2019. Percentage increases for all other metrics stated above compare the twelve months ended June 30, 2023 with the year ended December 31, 2019.  Definitions for certain financial and performance metrics referred to in this proxy statement, together with reconciliations for non-GAAP measures, are provided at the end of the proxy statement.

 

 

 

In 2022 and 2023:

 

¹          As of June 30, 2023

The Board is proud of its track record of responsiveness to shareholder feedback.  Since 2019, management has gathered investor feedback through virtual and in-person “listening tours”, resulting in several initiatives/actions:

 

 

 

Our executive compensation program is designed in line with our compensation philosophy and policy.  Wix’s executive compensation philosophy is designed to meet the following objectives, among others:

 

 

 

Since 2018, we have reduced Dilution² from 17.12% as of December 31, 2018 to 9.81% as of September 27, 2023.

 

The Compensation Committee has overseen prudent actions that demonstrate our commitment to reducing overall dilution and will continue to responsibly manage dilution going forward:

 

 

 

 

We have adopted corporate governance practices designed to ensure that (i) our corporate policies reflect our values and business goals and are aligned with the interests of our shareholders; (ii) our corporate governance structure is effective; and (iii) we operate in a way that is open, honest and transparent.

 

BUSINESS HIGHLIGHTS

 

Wix is a leading global cloud-based web development platform built on the belief that the Internet should be accessible to all.  Our mission is to enable any user and any type of business to create, manage and grow a dynamic digital presence.  Founded in 2006, Wix began as an easy-to-use yet powerful visual development and editing environment that eliminated the need for complex coding and expensive design services, primarily attracting users creating websites for their business or personal use.  We refer to these users as “Self Creators”.

 

Beginning in 2019, we evolved our business strategy to expand our addressable market beyond the Self Creator market into the professional world of design agencies, developers and freelancers creating content and applications for their clients.  We refer to these users collectively as “Partners”.

 

Successful execution of our Partner strategy since 2019, including through a global pandemic and ensuing challenging macro environment, has resulted in tremendous growth across the entire business.

 

 

 

Throughout 2019, 2020 and 2021, in addition to investments in product development, we also made meaningful investments in technology infrastructure, customer care, and sales and marketing in order to successfully expand into the Partner market and continue to lead the Self Creators market.

 

During the second half of 2022, despite continued growth in our Partners business, we faced slowing overall revenue growth impacted by the challenging macroeconomic environment.  In response, throughout the second half of 2022 and early 2023, we adjusted our costs and undertook measures to increase our operating efficiency and created a path toward long-term and sustainable profitability.

 

 

We remain committed to achieving profitable growth by balancing growth initiatives with operational discipline.  Through continued alignment of expenses with growth, we believe we are well positioned to achieve a minimum FCF margin of 25% in 2025 under various growth scenarios.  Assuming growth trends remain at today’s level, this margin would result in more than $1 billion of FCF to be generated from 2023 to 2025.  We are confident in our ability to achieve this FCF margin target and as a result, the “Rule of 40” in 2025.  In addition, we expect to generate GAAP net income in 2025.

 

To further increase shareholder value, in July 2023, our Board authorized a new share repurchase program for up to 50% of our FCF generated through 2025³.  Learn more about our Three-Year Plan and 2025 profitability targets in our 2023 Analyst Day materials, which can be found at https://investors.wix.com/2023-analyst-investor-day.  The contents of that website and the 2023 Analyst Day materials are not incorporated by reference into this proxy statement.

---

3	The actual timing, number and value of securities repurchased depend on a number of factors, including the market price of the Company’s ordinary shares, general market and economic conditions, court approval, the Company’s financial results and liquidity, and other corporate considerations.

CORPORATE GOVERNANCE

 

Strong corporate governance benefits our shareholders, executive officers, directors and employees and is essential to our long-term business success.  For this reason, we devote considerable time and resources designed to ensure that (i) our corporate policies reflect our values and business goals and are aligned with the interests of our shareholders; (ii) our corporate governance structure is effective; and (iii) we operate in a way that is open, honest, and transparent.

 

Our corporate governance practices are overseen by our Board, currently comprising nine members.  Eight of our current directors qualify as independent directors under the independence requirements of Nasdaq.  All our committees of the Board are comprised solely of independent directors, and Mr. Ron Gutler serves as our Lead Independent Director.

 

Our Board and its committees meet regularly throughout the year on a set schedule and hold special meetings as needed.

 

Board Structure

 

Our Articles of Association provide that our Board may consist of no less than three and no more than nine directors, as may be fixed from time to time by the Board.

 

Under our Articles of Association, our directors are divided into three classes with staggered three-year terms.  Each class of directors consists, as nearly as possible, of one-third of the total number of directors constituting the entire Board.  At each annual general meeting of our shareholders, the election or re-election of directors following the expiration of the term of office of the directors of that class, is for a term of office that expires on the third annual general meeting following such election or re-election, such that each year the term of office of only one class of directors will expire.

 

Considerations in Evaluating Director Nominees

 

Our NCG undertakes an evaluation process of the qualifications of the Board members and identifies potential areas where we may enhance our Board, including necessary expertise.  We look for Board members with the highest levels of integrity and ethics that align with our corporate values.  Our strong corporate culture has been key to our long-term success, and we believe the tone is set at the top with our Board.

 

Board Composition and Qualification

 

Our Board and its NCG believe the skills, qualities, attributes, experience and diversity of our directors provide us with a diverse range of perspectives to effectively address our evolving needs and represent the best interests of our shareholders, and our Board and its NCG annually assess Board composition and make changes as necessary.

 

We have a track record of regularly refreshing and enhancing our Board to closely align our Board composition with changes to our operating environment as well as our current strategic objectives, balancing stability and expertise with change and adaptability.

 

Most recently, in March 2023, our Board and NCG approved the appointment of Mr. Gavin Patterson and Mr. Francesco de Mojana to our Board.  The skills and experience of our new directors will benefit the Board as the Company focuses on creating value through improved profitability alongside product innovation.  Mr. Patterson’s history of operating experience and strategic execution as well as his expertise in enterprise software and Mr. de Mojana’s strong track record of implementing operating efficiencies and cost management, bring a valuable set of skills to Wix’s management at a time when improving margins, while the Company continues to grow, is a key priority.  In addition to their general board responsibilities, Mr. de Mojana joined the Audit Committee and Mr. Patterson joined the Compensation Committee.  At that time, we also announced the resignation of Mr. Yuval Cohen and Roy Saar from the Board after many years of dedicated service.  This transition reinforced our commitment to a strong, independent Board focused on the long-term performance of the Company and its continued focus on balancing growth and sustained profitability, which will help maximize Wix’s long-term potential.

 

The Board skills and experience matrix below represents the key skills that we believe are particularly valuable to the effective oversight of the Company and the execution of our strategy, as well as diversity characteristics of our directors.  This matrix highlights the depth and breadth of skills of our Board members.

Lead Independent Director

 

The Board has chosen to separate the two roles of CEO and Chair of the Board and believes that our current leadership structure promotes balance between the authority of those who oversee our business and those who manage it on a day-to-day basis.  Mr. Mark Tluszcz serves as non-executive independent Chair of the Board and Mr. Ron Gutler serves as Lead Independent Director.

 

The authorities and responsibilities of the Lead Independent Director, as stated in our Corporate Governance Guidelines, include the following:

 

 

 

 

 

 

 

 

 

 

 

Board Oversight of Risk Management

 

One of the main responsibilities of our Board is to effectively monitor and manage the Company’s evolving risk profile.  Our Board committees play a vital role in supporting the Board’s risk oversight responsibilities, as follows:

 

 

Board and Committee Effectiveness and Meetings

 

Our Board and committees are committed to conducting their duties effectively and in the best interest of Wix and our shareholders.  Our Board and each committee conduct a self-evaluation annually to determine whether they are functioning effectively.  As part of the assessment, relevant members of management provide feedback on a variety of topics such as Board and committees’ effectiveness and composition.

 

During 2022, our Board met 13 times and acted twice by written consent; our Audit Committee met five times and acted once by written consent; our Compensation Committee met six times and acted twice by written consent; and our NCG met four times.  Each of the director nominees listed in Proposal No. 1 attended at least 75% of our Board meetings and the meetings of each of the committees of the Board on which they served.

 

Our Board members keep current on market trends, industry events, and best practices, as well as enhancing their knowledge of the Company’s evolving product portfolio, and research and development programs, including through training sessions led by members of senior management.  New Board members undergo an orientation process, including onboarding guides and tailored training sessions.

 

ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) PRACTICES

 

 

ESG Oversight and Reporting

 

 

 

 

 

ESG Pillars

 

 

SHAREHOLDER ENGAGEMENT

 

Track Record of Responsiveness to Shareholder Feedback

 

 

In 2022 and 2023:

 

 

We regularly communicate with shareholders to better understand their perspectives and expectations regarding capital management, dilution, executive compensation and corporate governance.  Members of our Board and management participate in communications with our largest shareholders on these topics in an effort to ensure that our compensation practices and philosophy are aligned with our shareholders’ best interests.

 

Shareholder feedback is a key input for Board and committee discussions and helps inform our decision-making process. As part of our investor relations program, we engage with the vast majority of our institutional shareholders throughout the calendar year through quarterly earnings calls, investor conferences, in-person and virtual investor meetings and investor and analyst days.  Maintaining an active dialogue with our shareholders is consistent with our corporate values of open communication and accountability, and we intend to continue these efforts in the future.

 

Since 2021, members of our management led twice-yearly “listening tours” with several of our major shareholders to obtain their input.  These “listening tours” provided our management with a strong feedback mechanism that led to multiple initiatives including additional communications to investors in quarterly earnings calls and at analyst and investor days, as well as discussions with the Board regarding capital allocation.

 

In the second half of 2023, we dedicated time to engage with our shareholders to solicit feedback on executive compensation matters.  Members of our management team and Board engaged with institutional shareholders representing approximately 43%⁴ of our ordinary shares (held by institutional investors) during this time.  These engagements helped us refine the executive compensation proposals in this proxy statement, as well as other initiatives to ensure alignment with the priorities of our shareholders.

⁴ As of June 30, 2023

EFFECTIVE DILUTION MANAGEMENT

 

Under the supervision of the Board, the Company exercises a disciplined approach to manage the long-term dilutive effects of its equity incentive grants.  The Company’s management and Board remain committed to responsible management of the Company’s dilution posture and continue to take significant measures to reduce dilution, while balancing the Company’s need to hire and retain talented employees and executives, who are the drivers of the Company’s success.

 

We have implemented several effective measures (outlined below) that have successfully reduced our Dilution, from 17.12% as of December 31, 2018 to 9.81% as of September 27, 2023.

 

We calculate Dilution using the following formula⁵: (A + B - C) / (A + B - C + D + E), where as of September 27, 2023:

 

(A)

Allocated Equity = 7,596,592 allocated but unexercised options and unvested RSUs/PSUs

(B)

Unallocated Equity =71,423 ordinary shares available for grant under existing plan(s)

(C)

Net Exercise Adjustments = 959,036 options presumed to be canceled due to net exercise6

(D)

Treasury Shares = 4,532,215

(E)

Total Shares Outstanding = 57,161,088

External third parties may refer to “Simple Dilution”, which is the above formula without the deduction of item C and the addition of item D.  By not accounting for item D, the Simple Dilution formula penalizes the Company for share buybacks, as total shares outstanding is reduced, which causes the Simple Dilution result to be higher.  In addition, by not accounting for item C, the Simple Dilution calculation overstates dilution by disregarding the cancellation of options under the net exercise mechanism employed by Wix, despite the fact that, at all share price levels, a certain amount of ordinary shares will always be canceled and eliminated from the equity pool.  It is important to note that approximately 30.69% of the dilutive shares comprising the 11.83% Simple Dilution as of September 27, 2023, correspond to vested options held for four years or more by certain Company employees. Nevertheless, we are committed to our goal to reduce Simple Dilution to below 10%.

 

Dilution has declined over the past few years as illustrated below, due to our ongoing close monitoring of dilution and responsible share capital management.

---

6	Net exercise is applied using the closing share price of $88.67 on September 27, 2023.

Net Exercise of Options Generates Significant Reduction in Dilution

 

The net exercise of options is a key component of our dilution reduction strategy.  Pursuant to the net exercise mechanism, rather than the company issuing the full number of ordinary shares underlying eligible exercised options, the company only issues the number of ordinary shares equal to the calculated gain resulting from the exercise of such options and cancels the remaining number of ordinary shares underlying the options, thereby decreasing the dilutive effect of the options. Since we implemented the net exercise mechanism in June 2018, 24.3% of all eligible exercised options have been canceled, reflecting 460,721 ordinary shares that would have otherwise been issued.  The net exercise effect has had, and is expected to continue to have, a significant positive impact on dilution.

 

Application of Net Exercise Mechanism

 

At the closing share price of $88.67 on September 27, 2023, 959,036 options of our total Allocated Equity would be canceled using the net exercise mechanism, assuming all eligible in-the-money options are exercised. Removing these canceled options from the Allocated Equity, Simple Dilution as calculated by external third parties would be reduced by 1.33%.

 

Neutralizing the Negative Impact of Share Repurchase Activity on Simple Dilution

 

In August 2021 and from November 2022 through May 2023, the Company repurchased $500 million in ordinary shares, or an aggregate of 4,532,215 ordinary shares, which offsets almost all equity units granted throughout that same time period.

 

While share repurchase activity enhances shareholder value, it also has a countervailing effect as it reduces total shares outstanding and thus mathematically increases Simple Dilution, as calculated by external third parties.

 

Neutralizing the impact of share repurchase activity in 2021 through 2023 by adding the 4,532,215 treasury shares back to total shares outstanding, Simple Dilution after applying the net exercise mechanism, as of September 27, 2023 would be further reduced by 0.69%.

 

Dilution Reduction Measures

 

The Compensation Committee has overseen the implementation of multiple, effective actions that demonstrate our commitment to reducing overall potential dilution to shareholders.  The actions are as follows:

 

 

Wix Compares Favorably to Peers

 

 

Reduction in Burn Rate

 

We expect a burn rate of ~3.0% in 2023, reflecting a total number of ordinary shares underlying equity grants expected to be granted in 2023 of 1,769,145 and total ordinary shares outstanding of approximately 57,641,539.  This low expectation for burn rate places us at the 21^st percentile among our Peers and demonstrates our success in reducing dilution and its corresponding effect on burn rate, which stood at 4.8% in 2022.

 

GENERAL INFORMATION

 

The Meeting will be held on November 6, 2023 at 1:30 p.m. (Israel time), at our principal executive offices at the Wix Campus, Building B, 5^th Floor, Tel Aviv, Israel, 6936025.

 

This proxy statement, the attached Notice of Annual General Meeting of Shareholders and the enclosed proxy card or voting instruction form are being made available to holders of Wix ordinary shares, beginning September 29, 2023.

 

You are entitled to vote at the Meeting if you are a shareholder of record at the close of business on October 4, 2023.  You are also entitled to vote at the Meeting if you hold ordinary shares through a bank, broker or other nominee which is one of our shareholders of record at the close of business on October 4, 2023, or which appears in the participant listing of a securities depository on that date.  You can vote your ordinary shares by attending the Meeting or by following the instructions under “How You Can Vote” below.  Our Board urges you to vote your ordinary shares so that they will be counted at the Meeting or at any postponements or adjournments of the Meeting.

 

This notice is being sent to shareholders of record, in accordance with the requirements of the Israeli Companies Regulations (Notice of Meeting of Shareholders and Meeting of Class of Shareholders of a Public Company and Adding an Item to the Agenda), 5760-2000, and our Articles of Association.  The last date for submitting a request to include a proposal in accordance with Section 66(b) of the Israel Companies Law, 5759-1999 (the “Companies Law”), is October 6, 2023.  A copy of the proxy statement (which includes the full version of the proposed resolutions) and a proxy card is being distributed to shareholders and also furnished to the U.S. Securities and Exchange Commission under cover of Form 6-K.  Shareholders are also able to review the proxy statement at the “Investor Relations” portion of our website, https://investors.wix.com/ or at our principal executive offices at the Wix Campus, Building B, 5^th Floor, Tel Aviv, Israel, 6936025 upon prior notice and during regular working hours (telephone number: +972-3-545-4900) until the date of the Meeting.

 

Whether or not you plan to attend the Meeting, it is important that your ordinary shares be represented and voted at the Meeting.  Accordingly, after reading the Notice of Annual General Meeting of Shareholders and the proxy statement, please sign, date and mail the proxy card in the envelope provided or vote by telephone or over the Internet in accordance with the instructions on your proxy card.  If voting by mail, the proxy card must be received by our transfer agent or at our principal executive offices, at the Wix Campus, Building B, 5th Floor, Tel Aviv, Israel, 6936025 in either case, no later than 11:59 p.m. EDT on November 5, 2023 to be validly included in the tally of ordinary shares voted at the Meeting.  Detailed proxy voting instructions will be provided both in the proxy statement and in the proxy card.

 

Quorum and Adjournment

 

On September 15, 2023, we had a total of 57,147,042 ordinary shares outstanding.  Each ordinary share outstanding as of the close of business on October 4, 2023, the record date, is entitled to one vote on each of the Proposals to be presented at the Meeting.  Under our Articles of Association, the Meeting will be properly convened if at least two shareholders attend the Meeting in person or sign and return proxies, provided that they jointly hold ordinary shares representing at least 25% of our voting power.  If such quorum is not present within half an hour from the time scheduled for the Meeting, the Meeting will be adjourned to the following week (to the same day, time and place or to a specified day, time and place).  If such quorum is not present within half an hour from the time scheduled for the adjourned meeting, then at such adjourned meeting the presence of at least one or more shareholders in person or by proxy (regardless of the voting power represented by their ordinary shares) will constitute a quorum.

 

Abstentions and “broker non-votes” are counted as present and entitled to vote for purposes of determining a quorum.  A “broker non-vote” occurs when a bank, broker or other holder of record holding ordinary shares for a beneficial owner attends the Meeting but does not vote on a particular Proposal because that holder does not have discretionary voting power for that particular item and has not received instructions from the beneficial owner.  Brokers that hold ordinary shares in “street name” for clients (as described below) typically have authority to vote on “routine” Proposals even when they have not received instructions from beneficial owners.  The only item on the Meeting agenda that may be considered routine is Proposal No. 4 relating to the reappointment of the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2023; however, we cannot be certain whether this will be treated as a routine matter since our proxy statement is prepared in compliance with the Companies Law, rather than the rules applicable to domestic U.S. reporting companies.  Therefore, it is important for a shareholder that holds ordinary shares through a bank or broker to instruct its bank or broker how to vote its ordinary shares, if the shareholder wants its ordinary shares to count for the Proposals.

 

The Board shall have the authority at any time to cancel or adjourn the Meeting for a period of up to 21 days from the date of the Meeting and/or to remove one or more items from the agenda of the Meeting.

 

Vote Required for Approval of Each of the Proposals

 

The affirmative vote of the holders of a majority of the voting power represented and voting in person or by proxy is required to approve each of Proposals Nos. 1, 2, 3 and 4.  In addition, a special majority vote will be required for the approval of Proposals Nos. 2 and 3.  In order to approve each of Proposals Nos. 2 and 3, the affirmative vote of the ordinary shares must either include a majority of the ordinary shares voted by shareholders who are not controlling shareholders and do not have a personal interest in the Proposal, not taking into consideration abstentions, or the total ordinary shares of non-controlling shareholders and non-interested shareholders voted against the Proposal must not represent more than 2% of our outstanding ordinary shares.

 

 

Apart from for the purpose of determining a quorum, broker non-votes will not be counted as present and are not entitled to vote.  Abstentions will not be treated as either a vote “FOR” or “AGAINST” a matter.

 

HOW YOU CAN VOTE

 

Registered Holders

 

If you are a shareholder of record whose ordinary shares are registered directly in your name with our transfer agent, Equinity Trust Company of New York, New York, you can vote your ordinary shares by attending the Meeting or by completing and signing a proxy card.  In such case, these proxy materials are being sent directly to you.  As the shareholder of record, you have the right to grant your voting proxy directly to the individuals listed as proxies on the proxy card or to vote in person at the Meeting.  Please follow the instructions on the proxy card. You may change your mind and cancel your proxy card by sending us a written notice, by signing and returning a proxy card with a later date, or by voting in person or by proxy at the Meeting.  We will not be able to count a proxy card unless we receive it at our principal executive offices at the Wix Campus, Building B, 5^th Floor, Tel Aviv, Israel, 6936025 or our registrar and transfer agent receives it, in either case, no later than 11:59 p.m. EDT on November 5, 2023.

 

If you provide specific instructions (by marking a box) with regard to the Proposals, your ordinary shares will be voted as you instruct.  If you sign and return your proxy card or voting instruction form without giving specific instructions your ordinary shares will be voted in favor of each Proposal in accordance with the recommendation of the Board.  The persons named as proxies in the enclosed proxy card will vote in their discretion on any other matters that properly come before the Meeting, including the authority to adjourn the Meeting pursuant to Article 39 of the Company’s Articles of Association.

 

Beneficial Owners

 

If you are a beneficial owner of the ordinary shares held in a brokerage account or by a trustee or nominee, these proxy materials are being forwarded to you together with a voting instruction form by the broker, trustee or nominee or an agent hired by the broker, trustee or nominee.  As a beneficial owner, you have the right to direct your broker, trustee or nominee how to vote, and you are also invited to attend the Meeting.

 

Because a beneficial owner is not a shareholder of record, you may not vote those ordinary shares directly at the Meeting unless you obtain a “legal proxy” from the broker, trustee or nominee that holds your ordinary shares, giving you the right to vote the ordinary shares at the Meeting.  Your broker, trustee or nominee has enclosed or provided voting instructions for you to use in directing the broker, trustee or nominee how to vote your ordinary shares.

 

Who Can Vote

 

You are entitled to be notified about the Meeting and to vote at the Meeting if you are a shareholder of record at the close of business on October 4, 2023.  You are also entitled to be notified about the Meeting and to vote at the Meeting if you held ordinary shares through a bank, broker or other nominee that is one of our shareholders of record at the close of business on October 4, 2023, or which appear in the participant listing of a securities depository on that date.

 

Revocation of Proxies

 

A shareholder of record may revoke a proxy in one of the following ways: (i) by written notice delivered to us at our offices at the Wix Campus, Building B, 5^th Floor, Tel Aviv, Israel, 6936025 Attn: Naama Kaenan, Corporate Secretary, at least two hours prior to the time of the Meeting canceling the proxy; (ii) by written notice of the revocation of the proxy delivered at the Meeting to the chair of the Meeting; (iii) by signing and returning a proxy card with a later date, provided that the later proxy is received by the Company at our principal executive offices, at the Wix Campus, Building B, 5^th Floor, Tel Aviv, Israel, 6936025 or our registrar and transfer agent receives it, in either case, no later than 11:59 p.m. EDT on November 5, 2023; or (iv) by attending and voting in person at the Meeting.  Attendance at the Meeting will not by itself constitute revocation of a proxy.

 

If you hold ordinary shares through a bank, broker or other nominee, you must contact that firm to revoke any prior voting instructions.

 

Solicitation of Proxies

 

Proxies are being distributed to shareholders beginning October 9, 2023.  Certain officers, directors, employees and agents of Wix may solicit proxies by telephone, emails, or other personal contact.  We will bear the cost for the solicitation of the proxies, including postage, printing, and handling, and will reimburse the reasonable expenses of brokerage firms and others for forwarding material to beneficial owners of ordinary shares.

 

Voting Results

 

The final voting results will be tallied by the Company’s Corporate Secretary based on the information provided by the Company’s transfer agent or otherwise, and the overall results of the Meeting will be published following the Meeting in a report of foreign private issuer on Form 6-K that will be furnished to the U.S. Securities and Exchange Commission (the “SEC”).

 

Availability of Proxy Materials

 

 

 

Security Ownership of Certain Beneficial Owners and Management

 

The following table sets forth the number of ordinary shares beneficially owned, directly or indirectly, by (i) each person known by us to be the owner of more than 5% of our outstanding ordinary shares, based on public filings or information provided by us and (ii) all of our directors and executive officers as a group, as of September 15, 2023.  Except as otherwise set forth below, the street address of the beneficial owners is c/o Wix.com Ltd., the Wix Campus, Building B, 5th Floor, Tel Aviv, Israel, 6936025.

 

 

 

 

 

 

 

Compensation of Executive Officers

 

For information concerning the annual compensation earned during 2022 by our five most highly compensated executive officers, see Item 6.B. of our Annual Report on Form 20-F for the year ended December 31, 2022, as filed with the Securities and Exchange Commission on March 30, 2023, a copy of which is available on our website at https://investors.wix.com/.

PROPOSAL NO. 1 – PROPOSAL TO RE-ELECT THREE DIRECTORS

 

Background

 

Our Board currently has nine directors and is divided into three classes with staggered three-year terms as follows:

 

 

 

 

At each annual general meeting of our shareholders, the election or re-election of directors following the expiration of the term of office of the directors of that class will be for a term of office that expires on the date of the third annual general meeting following such election or re-election.

 

You are being asked to re-elect Deirdre Bigley, Allon Bloch and Ferran Soriano.  Each of Ms. Bigley, Mr. Bloch and Mr. Soriano qualifies as an independent director under Nasdaq independence requirements.

 

If re-elected at the Meeting, each of Ms. Bigley, Mr. Bloch and Mr. Soriano will serve until the 2026 annual general meeting of shareholders, and until his or her successor has been duly elected and qualified, or until his or her office is vacated in accordance with our Articles of Association or the Companies Law.

 

In accordance with the Companies Law, each of Ms. Bigley, Mr. Bloch, and Mr. Soriano has certified to us that he or she meets all the requirements of the Companies Law for election as a director of a public company, and possesses the necessary qualifications and has sufficient time to fulfill his or her duties as a director of Wix, taking into account the size and special needs of Wix.

 

During 2022, each of the directors standing for re-election at the Meeting attended more than 75% of our Board meetings and the committee meetings of which they are members.

 

The NCG recommended that each of Ms. Bigley, Mr. Bloch and Mr. Soriano be re-elected at the Meeting as a Class I director for a term to expire at the 2026 annual general meeting of shareholders, and until his or her successor has been duly elected and qualified, or until his or her office is vacated in accordance with our Articles of Association or the Companies Law.  Our Board approved this recommendation.

 

Biographical information concerning Ms. Bigley, Mr. Bloch, and Mr. Soriano, the nominees for re-election as directors at this Meeting, and for each of the other directors is set forth below.

 

Class I Directors:

 

 

 

 

Class II Directors:

 

 

 

 

 

 

Class III Directors:

 

 

 

 

 

Proposal

 

The shareholders are being asked to re-elect each of Ms. Bigley, Mr. Bloch and Mr. Soriano for a term to expire at the 2026 annual general meeting of shareholders, and until his or her respective successor has been duly elected and qualified, or until his or her office is vacated in accordance with our Articles of Association or the Companies Law.

 

It is proposed that the following resolutions be adopted at the Meeting:

 

RESOLVED, that Deirdre Bigley be re-elected as a Class I director, to serve until the 2026 annual general meeting of shareholders and until her successor has been duly elected and qualified, or until her office is vacated in accordance with the Company’s Articles of Association or the Companies Law.

 

FURTHER RESOLVED, that Allon Bloch be re-elected as a Class I director, to serve until the 2026 annual general meeting of shareholders and until his successor has been duly elected and qualified, or until his office is vacated in accordance with the Company’s Articles of Association or the Companies Law.

 

FURTHER RESOLVED, that Ferran Soriano be re-elected as a Class I director, to serve until the 2026 annual general meeting of shareholders and until his successor has been duly elected and qualified, or until his office is vacated in accordance with the Company’s Articles of Association or the Companies Law.

 

Vote Required

 

See “Vote Required for Approval of Each of the Proposals” above.

 

Board Recommendation

 

The Board recommends a vote “FOR” the re-election of each of Ms. Bigley, Mr. Bloch and Mr. Soriano as a Class I director for a term to expire at the 2026 annual general meeting of shareholders, as described in this Proposal No. 1.

 

 

PROPOSAL NO. 2 – PROPOSAL TO APPROVE THE COMPENSATION OF THE COMPANY’S CHIEF EXECUTIVE OFFICER

 

Our shareholders are being asked to approve a binding proposal pertaining to the terms of compensation for our CEO, Avishai Abrahami, as detailed below (the “Compensation Package”).

 

Avishai Abrahami is the Co-founder, CEO, and a director of the Company, and his significant contributions to Wix since its inception have been key to Wix’s sustained growth and long-term success.  Further details on Mr. Abrahami’s background are set forth in Proposal No. 1.

 

Background and Timeline

 

At our 2019 annual general meeting, the last time shareholders were asked to approve CEO compensation, the binding vote on the CEO’s equity compensation was approved by ~98% of votes cast, thereby approving our CEO’s compensation plan for a term of three years, which expired at the end of fiscal year 2022.

 

In 2022, the last year under the shareholder-approved compensation plan, the CEO voluntarily waived ~28% of his annual equity award to align with the Company’s overall reduction in equity grants as part of Company-wide cost reduction initiatives.

 

In 2023, our CEO voluntarily waived his salary to levels comparable to minimum wage under Israeli law and requested not to seek approval of an equity grant for 2023.

 

The Board and Compensation Committee believe that the proposed Compensation Package is necessary to retain and appropriately incentivize the CEO to continue to lead the execution of our strategic plan.  Therefore, shareholders are now being asked to approve the terms of the CEO’s new Compensation Package for the performance period commencing on January 1, 2024 and ending on December 31, 2026.

 

Approval Requirements under Israeli Law

 

The Companies Law provides that the compensation of our CEO requires the approval of the Compensation Committee, the Board and our shareholders, in that order.  This includes changes in cash compensation as well as compensation in the form of equity awards.  The Compensation Package for Mr. Abrahami was approved and recommended by our Compensation Committee and Board in September 2023, and also requires a special majority approval of our shareholders at the Meeting.  See “Vote Required for Approval of Each of the Proposals” above for more details.

 

The shareholder vote on this matter is binding under Israeli law and not merely advisory, unlike the “say-on-pay” vote found in proxy statements for U.S. domestic companies.  Only in special circumstances prescribed by the Companies Law, and subject to certain conditions, can the Compensation Committee and Board override the shareholders’ decision to oppose the proposed compensation.

 

Executive Compensation Philosophy

 

Our Compensation Committee and Board have carefully structured our executive compensation program and Compensation Policy to attract, motivate and retain our key executive officers who drive our success, including our CEO.  Our executive compensation program is designed in line with our Executive Compensation Philosophy:

 

Independent Compensation Advisor

 

The Compensation Committee directly engaged the services of Radford, a business unit of Aon plc (“Radford”), a leading global provider of consulting services relating to human capital and compensation, to ensure that the Company’s compensation practices are aligned with, and competitive relative to, market practices.  Radford reported directly to the Compensation Committee and the Compensation Committee determined Radford to be independent.

 

Peer Group

 

Our peer group is customarily made up of between 15 to 20 companies that are most comparable to the Company on a range of criteria, including industry (mainly software-as-a-services companies), revenue, market capitalization, number of employees and rate of growth.  Our peer group was developed with the advice and assistance of Radford and is reviewed and re-assessed periodically by our Compensation Committee based on Radford’s reports and recommendations.

 

As a result of this review, and in response to shareholder feedback, the Compensation Committee directed Radford to reassess the criteria for companies to be included in our peer group in an effort to better position and benchmark ourselves to the appropriate grouping.  Based on the reassessed criteria, the Compensation Committee constructed a new peer group replacing eight companies having relatively higher market caps with eight new companies that are closer in revenue and market cap to the Company.  The Company’s current peer group, which consists of 19 companies, is listed in Annex A (the “Peer Group”).  We rank approximately at the 69^th percentile in terms of revenue amongst our Peer Group and are approximately at the 50^th percentile in terms of market cap as of July 2023.  As part of its methodology to perform comprehensive market benchmarking for executive compensation purposes, the Compensation Committee customarily considers Peer Group data alongside data of comparable companies in the broader industry.

 

Key Components of the Proposed Chief Executive Officer Compensation Package

 

Our Compensation Committee, in consultation with Radford, designed a new Compensation Package for Mr. Abrahami, for the three-year period between January 1, 2024 and December 31, 2026 (the “Term”), with the objective of continuing to align Mr. Abrahami’s compensation with shareholder interests and the creation of long-term Company value.

 

Our Compensation Committee and the Board believe that a three-year Compensation Package is necessary to continue the long-term relationship with Mr. Abrahami as the Company’s CEO.  A three-year Compensation Package will help provide the Company and its shareholders with stability, visibility and certainty in retaining the CEO, and is in line with the Company’s compensation philosophy, which aims to incentivize our executives to help ensure long-term retention.

 

The following is a summary of the key terms of the new proposed Compensation Package:

 

Cash Compensation

 

⁷          USD/NIS Exchange Rate: USD 1 = NIS 3.84, as of September 27, 2023

Key Differences between Proposed Cash Compensation Package and Prior CEO Cash Compensation

 

Equity Award Plan (LTI)

 

Following internal research and analysis, and consultation with Radford, our Compensation Committee and Board have approved, and recommended that shareholders approve, the following equity award plan for our CEO during the Term (the “Equity Plan”):

 

---

 

Key Differences between Prior Option Award Plan and Proposed Equity Award Plan

 

 

Considerations in Setting CEO Compensation

 

In setting the compensation of our CEO, the Compensation Committee considered, among other things, the following factors:

 

 

 

 

 

 

 

 

 

CEO Compensation Design Aligns with Compensation Philosophy

 

 

Updates to CEO Compensation in line with Shareholder Feedback

 

Our Compensation Committee and the Board had continuous discussions on the proposed Compensation Package prior to its approval in September of 2023.  The Company offered engagement with institutional  shareholders owning 62% of outstanding institutional shares and held calls with institutional shareholders owning 43% of outstanding institutional shares to discuss the proposed Compensation Package.  Following this dialogue with shareholders, revisions to the proposed Compensation Package were made in line with the feedback received.  Key actions taken in line with shareholder feedback received are outlined in the table below:

 

 

Proposal

 

The shareholders are being asked to approve the CEO’s Compensation Package.

 

It is proposed that the following resolution be adopted at the Meeting:

 

RESOLVED, to approve the Compensation Package for the CEO, as set forth in Proposal No. 2 of this proxy statement, effective as of the date of the Meeting.

 

Vote Required

 

See “Vote Required for Approval of Each of the Proposals” above.

 

Board Recommendation

 

Our Compensation Committee and Board believe that it is in the best interest of our shareholders and the Company to approve the Compensation Package for Mr. Abrahami, providing a competitive and performance-based compensation package, designed in alignment with data regarding our Peer Group.

 

The proposed Compensation Package reflects the inherent value Mr. Abrahami brings to our Company, and further links Mr. Abrahami’s compensation to the creation of shareholder value and demonstrates a progressive approach to executive compensation.  If this Proposal No. 2 is not approved at the Meeting, the Board and Compensation Committee believe it could impede our ability to retain a highly qualified CEO and to incentivize him to continue delivering value to our shareholders, thereby potentially posing a material risk to the Company’s medium- and long-term success.

 

Consistent with Israeli law, each of the components of the Compensation Package conforms to the Company’s Compensation Policy - Executives, as proposed to be amended at the Meeting and described in Proposal No. 3 below.  In the event that Proposal No. 3 is not approved by the requisite majority of shareholders, the Equity Plan may exceed the limitations of our currently effective Compensation Policy.  In such case, the Companies Law allows the Board, Compensation Committee, and shareholders to nevertheless approve this Proposal No. 2 (subject to approval by shareholders as stated herein), provided that the Company’s Compensation Committee, and thereafter the Board, each determines to approve it, based on detailed arguments, and after having reconsidered the matter and considering various items stipulated by the Companies Law.

 

The Board and our Compensation Committee recommend a vote “For” the amendment of the Compensation Package as described in this Proposal No. 2.

 

PROPOSAL NO. 3 – PROPOSAL TO AMEND THE COMPENSATION POLICY FOR THE COMPANY’S EXECUTIVES

 

Background

 

Pursuant to the Companies Law, all public Israeli companies, including companies whose shares are only publicly traded outside of Israel, such as Wix, are required to adopt written compensation policies for their executives and directors, which address certain items prescribed by the Companies Law.  The adoption, amendment and restatement of the compensation policies is to be recommended by the Compensation Committee and approved by the Board and shareholders at least once every three years.

 

In September 2022, in accordance with such Israeli law requirements, our Compensation Committee reviewed and recommended the Wix.com Ltd. Executive Compensation Policy, and the Wix.com Ltd. Directors Compensation Policy (the “Directors Compensation Policy,” and collectively with the Compensation Policy, the “Compensation Policies”), which address the items prescribed by the Companies Law and certain other recommendations made by the Compensation Committee, and our Board and shareholders subsequently approved the Compensation Policies for a period of three years commencing on June 26, 2023.

 

The current Compensation Policy includes a cap on the number of equity units that can be granted to an executive in any calendar year, as a function of the Company’s share capital.  According to the current Compensation Policy there are two separate caps, one for options and another for non-options (including RSUs, PSUs and other equity awards without an exercise price).  The current caps stipulate that:

 

 

 

Furthermore, the current Compensation Policy provides that with respect to a grant that combines both types of equity awards (i.e., of options and non-options), the annual grant threshold should be calculated on a pro rata basis, to give effect to the relative portion of each type of equity awards.

 

Proposed Changes to the Compensation Policy:

 

In order to adjust to market practice and to simplify the maximum threshold for equity-based compensation in the Compensation Policy, we propose to apply a uniform equity units cap for each Company executive, including the CEO, which will apply to any equity awards granted (whether options, RSUs, PSUs or others) to an executive in a single calendar year.

 

The proposed equity cap shall not exceed, on the date of grant, 0.4% of the issued ordinary shares of the Company, including treasury shares (intended to neutralize the effects of share repurchases by the Company executed in an effort to create value for shareholders, which would otherwise effectively lower the equity cap).

 

Note that the proposed CEO Compensation Package as detailed in Proposal No. 2 is already capped at a predetermined and fixed dollar value throughout the Term.

 

The full text of the updated Compensation Policy is attached to this proxy statement as Annex B.

 

In making its recommendation, the Compensation Committee considered several factors, including local benchmark data of equity caps.

 

 

Proposal

 

The shareholders are being asked to approve the amendment of the “Maximum Equity-Based Compensation” section of the Compensation Policy, to read as follows:

 

 

It is proposed that the following resolution be adopted at the Meeting:

 

RESOLVED, to approve an amendment to the Compensation Policy, in the form attached as Annex B hereto, as set forth in Proposal No. 3 of this proxy statement, effective as of the date of the Meeting.

 

Vote Required

 

See “Vote Required for Approval of Each of the Proposals” above.

 

Board Recommendation

 

The Board recommends a vote “FOR” the amendment of the Compensation Policy, as described in this Proposal No. 3.

 

PROPOSAL NO. 4 – PROPOSAL TO RATIFY THE APPOINTMENT & COMPENSATION OF OUR INDEPENDENT PUBLIC ACCOUNTANTS; REVIEW AND DISCUSSION OF OUR 2022 CONSOLIDATED FINANCIAL STATEMENTS

 

Background

 

Our Audit Committee and Board have appointed Kost, Forer, Gabbay & Kasierer, a member of Ernst & Young Global, as our independent registered public accountants for the year ending December 31, 2023.

 

 

 

Representatives of Kost, Forer, Gabbay & Kasierer will attend the Meeting and will be invited to make a statement.  They will be available to respond to appropriate questions raised during the Meeting.  In accordance with Section 60(b) of the Companies Law, you are invited to discuss our 2022 consolidated financial statements, and questions regarding the consolidated financial statements may be addressed to us or to our auditors.  Our Annual Report on Form 20-F for the year ended December 31, 2022, including our 2022 audited consolidated financial statements, is available at the “Investor Relations” portion of our website, at http://investors.wix.com/.

 

Our Audit Committee has adopted a pre-approval policy for the engagement of our independent accountant to perform certain audit and non-audit services.  Pursuant to this policy, which is designed to assure that such engagements do not impair the independence of our auditors, the Audit Committee pre-approves annually a catalog of specific audit and non-audit services in the categories of audit services, audit-related services and tax services that may be performed by our independent accountants.  Our Audit Committee pre-approved all the audit services and all of the non-audit services provided to us and to our subsidiaries since our pre-approval policy was adopted in November 2014.

 

When Proposal No. 4 is raised, the Company’s shareholders will have the opportunity to hear from representatives of the Company’s management, who will be available at the Meeting to review and discuss with shareholders the consolidated financial statements of the Company for the year ended December 31, 2022.

 

Proposal

 

It is proposed that the following resolution be adopted at the Meeting:

 

RESOLVED, that the appointment of Kost, Forer, Gabbay & Kasierer, a member of Ernst & Young Global, as Wix.com Ltd.’s independent public accountants for the year ending December 31, 2023, and for such additional period until the next annual general meeting of shareholders, be, and it hereby is, ratified, and the Board of Directors (or, the Audit Committee, if authorized by the Board of Directors (subject to the ratification of the Board of Directors)) be, and it hereby is, authorized to fix the remuneration of such independent public accountants in accordance with the volume and nature of their services.

 

Vote Required

 

See “Vote Required for Approval of Each of the Proposals” above.

 

Board Recommendation

 

The Board recommends a vote “FOR” the ratification of the appointment and compensation of Kost, Forer, Gabbay & Kasierer, a member of Ernst & Young Global, as our independent registered public accounting firm for the year ending December 31, 2023, and for such additional period until the next annual general meeting of shareholders, as described in this Proposal No. 4.

 

Other Business

 

The Board is not aware of any other matters that may be presented at the Meeting other than those described in this proxy statement.  If any other matters do properly come before the Meeting, including the authority to adjourn the Meeting pursuant to Article 39 of the Company’s Articles of Association, it is intended that the persons named as proxies will vote, pursuant to their discretionary authority, according to their best judgment in the interest of the Company.

 

Shareholder Proposals For 2024 Annual General Meeting Of Shareholders

 

Under the Companies Law, shareholders who severally or jointly hold at least 1% of the Company’s outstanding voting rights are entitled to request that the Board include a proposal in a future shareholders meeting, provided that such proposal is appropriate for consideration by shareholders at such meeting.  To be considered for inclusion in the Company’s proxy statement for our 2024 annual general meeting of shareholders pursuant to the Companies Law, shareholder proposals must be in writing and must be properly submitted to the Wix Campus, Building B, 5^th Floor, Tel Aviv, Israel, 6936025, Attn: Corporate Secretary, and must otherwise comply with the requirements of the Companies Law.  The written proposal must be received by the Company not less than 90 calendar days prior to the first anniversary of the Meeting (i.e., no later than August 8, 2024); provided that if the date of the 2024 annual general meeting of shareholders is advanced by more than 30 calendar days prior to, or delayed (other than as a result of adjournment) by more than 30 calendar days after, the anniversary of the Meeting, for a proposal by a shareholder to be timely it must be so delivered not later than the 7th calendar day following the day on which we call and provide notice of the 2024 annual general meeting of shareholders.

 

We currently expect that the agenda for our annual general meeting of shareholders to be held in 2024 will include (1) the election (or re-election) of Class II directors; (2) the ratification of the appointment (or reappointment) and compensation of the Company’s auditors; and (3) presentation and discussion of the financial statements of the Company for the year ended December 31, 2023 and the auditors’ report for this period.

 

In general, a shareholder proposal must be in English and must set forth (i) the name, business address, telephone number, fax number and email address of the proposing shareholder (and each member of the group constituting the proposing shareholder, if applicable) and, if not a natural person, the same information with respect to the person(s) that controls or manages such person, (ii) the number of ordinary shares held by the proposing shareholder, directly or indirectly, including if beneficially owned by the proposing shareholder (within the meaning of Rule 13d-3 promulgated under the Exchange Act); if any of such ordinary shares are held indirectly, an explanation of how they are held and by whom, and, if such proposing shareholder is not the holder of record of any such ordinary shares, a written statement from an authorized bank, broker, depository or other nominee, as the case may be, indicating the number of ordinary shares the proposing shareholder is entitled to vote as of a date that is no more than ten (10) days prior to the date of delivery of the shareholder proposal, (iii) any agreements, arrangements, understandings or relationships between the proposing shareholder and any other person with respect to any securities of the Company or the subject matter of the shareholder proposal, including any derivative, swap or other transaction or series of transactions engaged in, directly or indirectly, by such proposing shareholder, the purpose or effect of which is to give such proposing shareholder economic risk similar to ownership of shares of any class or series of the Company, (iv) the proposing shareholder’s purpose in making the proposal, (v) the complete text of the resolution that the proposing shareholder proposes to be voted upon at the 2024 annual general meeting of shareholders, (vi) a statement of whether the proposing shareholder has a personal interest in the proposal and, if so, a description in reasonable detail of such personal interest, (vii) a declaration that all the information that is required under the Companies Law and any other applicable law to be provided to the Company in connection with such subject, if any, has been provided, (viii) if the proposal is to nominate a candidate for election to the Board, a questionnaire and declaration, in form and substance reasonably requested by the Company, signed by the nominee with respect to matters relating to his or her identity, address, background, credentials, expertise, etc., and his or her consent to be named as a candidate and, if elected, to serve on the Board, and (ix) any other information reasonably requested by the Company.  We shall be entitled to publish information provided by a proposing shareholder, and the proposing shareholder shall be responsible for the accuracy thereof.  In addition, shareholder proposals must otherwise comply with applicable law and our Articles of Association.  The Company may disregard shareholder proposals that are not timely and validly submitted.

 

The information set forth in this section is, and should be construed as, a “pre-announcement notice” of the 2024 annual general meeting of shareholders in accordance with Rule 5C of Israel’s Companies Regulations (Notice of General and Class Meetings in a Public Company), 2000, as amended.

 

Additional Information

 

The Company’s Annual Report on Form 20-F for the year ended December 31, 2022, filed with the SEC on March 30, 2023, is available for viewing and downloading on the SEC’s website at www.sec.gov as well as under the Investor Relations section of the Company’s website at https://investors.wix.com/.

 

The Company is subject to the information reporting requirements of the Exchange Act applicable to foreign private issuers.  The Company fulfills these requirements by filing reports with the SEC.  The Company’s filings with the SEC are available to the public on the SEC’s website at www.sec.gov.  As a foreign private issuer, the Company is exempt from the rules under the Exchange Act related to the furnishing and content of proxy statements.  The circulation of this proxy statement should not be taken as an admission that the Company is subject to those proxy rules.

 

By Order of the Board of Directors, MARK TLUSZCZ   Chair of the Board of Directors

 

Dated: September 29, 2023

 

 

ANNEX A

 

Wix.com Ltd. – Peer Group

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ANNEX B

 

Wix.com Ltd. Compensation Policy – Executives

 

 

The purpose of the Wix.com Ltd. (“Wix” or the “Company”) Compensation Policy – Executives (the “Policy”) is to describe Wix’s overall compensation strategy for its office holders (as defined in Israel’s Companies Law, 5759-1999 (the “Companies Law”)) other than non-employee directors (the “Executives”), and to provide guidelines for setting the compensation of its Executives.  The Policy is adopted in accordance with the requirements of the Companies Law.

 

This Policy applies to compensation agreements and arrangements with Executives that are adopted after the effective date of this Policy.

 

All compensation arrangements of Executives are to be approved in the manner prescribed by applicable law as in effect at the time the arrangement is entered into.  Any relief or exemption from applicable rules governing this Policy that becomes effective after the effective date of this Policy shall be deemed incorporated by reference into this Policy unless determined otherwise by the Compensation Committee of the Board of Directors (the “Compensation Committee”).

 

It is hereby clarified that nothing in this Policy shall be deemed to grant any of the Executives or employees or any third party any right or privilege in connection with their employment by, or engagement with, Wix.  Such rights and privileges shall be governed by the respective personal employment or engagement agreements (as applicable).

 

 

The Compensation Committee will be composed of at least three members of the Board of Directors and comply with the applicable composition and independence rules of the Companies Law and/or The NASDAQ Stock Market (“NASDAQ”) as in effect from time to time.

 

 

Wix believes that strong, effective leadership is fundamental to its continued growth and success in the future.  This requires the ability to attract, retain, reward and motivate highly-skilled Executives, with the competencies needed to excel in a rapidly changing marketplace and to continually motivate their employees.

 

The Policy is intended to align the need to incentivize Executives to succeed in achieving their goals and the need to assure that the compensation structure meets Wix’s interests and its overall financial and strategic objectives.

 

The Policy is also designed to offer Executives a compensation package that is competitive with other companies in Wix’s industry and jurisdictions of operation.

 

In support of this goal, Wix’s executive compensation practices are designed to meet the following objectives:

 

 

 

In setting the compensation of an Executive, the Compensation Committee and the Board of Directors shall consider, among other things, the following factors:

 

 

The Compensation Committee and Board of Directors may engage compensation advisors and other professionals to assist in formulating compensation packages in line with the Policy, including, without limitation, to assist in preparing, collecting and analyzing applicable wage surveys and other relevant data, framing the appropriate parameters to be considered, and evaluating the different parameters.

 

 

Wix intends to provide fair, competitive and equitable compensation for its Executives by combining several compensation elements.  Taking into account the parameters set forth in Item 4 of the Policy, the compensation package of Wix’s Executives shall generally combine all or a portion of the following items:

 

 

Wix believes that a significant portion of its Executives’ compensation should be variable based on Company’s results.

 

The value of the variable compensation components (consisting of cash bonuses and equity-based long-term incentives) shall not be less than 40% of an Executive’s total compensation package on an annual basis.

 

In setting the compensation of Executives employed by a subsidiary of Wix, references in the Policy to Wix shall also include such subsidiary, to the extent applicable in the relevant context.

 

In the event that the services of the Executive are provided via a personal management company and not by the Executive directly as an employee of Wix, the fees paid to such personal management company (or unincorporated legal person) shall reflect, to the extent determined by Wix in the applicable service agreement, compensation items in accordance with the guidelines of the Policy.

A.

Base Salary

 

Overview.  Executives may be incentivized through an annual bonus program that sets performance targets based on their role and scope.  Actual payments may be driven by the business and/or individual performance vis-à-vis the respective performance targets.

 

The performance targets and the maximum annual bonus payable to each Executive shall be reviewed and approved by the Compensation Committee and the Board of Directors, and in the case of Wix’s Chief Executive Officer, also by Wix’s shareholders in accordance with the requirements of the Companies Law, as applicable.

 

Any annual bonus of the Chief Executive Officer approved after the effective date of this Policy shall be determined annually based on the results of Wix.  The formula for calculating the annual bonus shall be approved by the Compensation Committee, the Board of Directors and Wix’s shareholders.

 

Without derogation from the authority of the Compensation Committee and the Board of Directors to set the maximum annual bonuses payable to each Executive and the criteria for determining eligibility of such annual bonuses, the Compensation Committee and the Board of Directors shall not have discretion to reduce the amount of the annual bonus payable to Executives following achievement of the bonus criteria.

 

Criteria.  A significant portion of the annual bonus, not less than 75%, shall be determined based on measurable criteria.  A smaller portion of the annual bonus, not to exceed 25%, may be based on non-measurable criteria subject to any approvals as may be required by law, taking into account the Executive’s contribution to Wix.

 

Examples of measurable criteria that will be considered include, without limitation:

 

 

Examples of non-measurable criteria that will be considered include, without limitation:

 

 

The maximum annual cash bonuses payable to an Executive shall not exceed 24 months’ base salary.

 

Special Bonuses.  In addition to the annual bonus, the Compensation Committee and the Board of Directors (and the shareholders if required by applicable law) may elect to pay certain Executives special cash bonuses in recognition for their special contribution to key Company developments and activities.  The maximum special cash bonus payable to an Executive shall not exceed 12 months’ base salary.

 

In determining whether to grant special bonuses to Executives, the Compensation Committee and the Board of Directors shall consider if such special bonuses are justifiable in light of the Company’s financial results and performance.

 

Signing Bonus.  In the event of hiring a new Executive, the Compensation Committee and the Board of Directors may elect to pay a signing bonus.  The maximum cash signing bonus payable to an Executive shall not exceed 12 months’ entry base salary.

 

If and where applicable, the Compensation Committee and the Board of Directors shall consider awarding a signing bonus only to provide for the replacement awards that the newly hired Executive forfeited from his or her previous employer, and that such signing bonus will reflect performance, vesting and other conditions equivalent to the forfeited awards.

 

Partial Bonus Payout.  Subject to the conditions and limitations of this Item 5.B, an Executive that is employed or provides services to Wix for only a portion of any year may be entitled to receive the pro-rata portion of any bonus described above, based on the portion of the calendar year the Executive was employed or provided services.

 

 

Overview.  The Compensation Committee and the Board of Directors may grant to Executives equity-based compensation in any form permitted under Wix’s equity incentive plans, as in effect from time to time (collectively, the “Equity Incentive Plans”), including, without limitation, share options, restricted shares, restricted share units (RSUs) and participation in employee stock purchase programs (ESPP).  All grants of equity-based compensation to the Chief Executive Officer (or other Executive of Wix that is a member of Wix’s Board of Directors) following the effective date of this Policy shall be approved in the manner prescribed by the Companies Law.

 

Equity Award Terms.  The Compensation Committee and the Board of Directors (and the shareholders to the extent prescribed by the Companies Law) shall set the terms of equity award grants to Executives in accordance with the terms of the Equity Incentive Plans, including, without limitation, the exercise price, vesting schedule, term, the period of time for which an award is to remain exercisable and dividend adjustments.

 

Vesting.  All equity-based incentives granted to Executives shall be subject to vesting periods in order to promote long-term retention of the awarded Executives.  Generally, grants to Executives shall vest gradually over a period of no less than 3 years and no more than 4 years, in the aggregate.  In accordance with the Equity Incentive Plans, the terms of the awards may provide for the acceleration of vesting upon a change of control of Wix and/or the achievement of performance targets as set forth in the respective award agreement.

 

Maximum Equity-Based Compensation.  Any one or more equity awards granted to an Executive in a single calendar year, shall not exceed 0.4% of the issued ordinary shares of the Company, including treasury shares, on the date of grant.

 

 

To reflect sound corporate governance, Wix’s forfeiture and clawback policy relating to Executive compensation allows for the Board of Directors or Compensation Committee, at its discretion, to determine that an Executive’s rights, payments and benefits with respect to an equity award granted to such Executive, shall be subject to reduction, cancellation, forfeiture, rescission or recoupment upon the occurrence of certain specified events, in addition to any otherwise applicable vesting, restrictions or other performance conditions of the equity award.  Such events may include, but shall not be limited to, termination with or without cause, breach of noncompetition, confidentiality, or other restrictive covenants that may apply to the Executive, or restatement of the Company’s financial statements to reflect adverse results from those previously released financial statements, as a consequence of errors, omissions, fraud, or misconduct.

 

This forfeiture and clawback policy is applicable to all rights, payments and benefits with respect to an equity award paid during the three-year period preceding the date on which any of the specified event above occurs (or in the case of restatement of the Company’s financial statements, the date on which the Company is required to prepare the accounting restatement).

 

Notwithstanding the above, the Board of Directors’ or Compensation Committee’s authority to reduce, cancel, forfeit, rescind or recoup an Executive’s rights, payments and benefits with respect to an equity award will not apply in the following events:

 

 

The fair market value for an award that is subject to taxation in Israel shall equal the average price of the Company’s share price in the 30 consecutive trading days prior to the grant date.  The fair market value for an award that is not subject to taxation in Israel shall equal the closing price of the Company’s shares on the date of grant.

 

The Board of Directors or Compensation Committee will be responsible for approving the amounts to be recouped and for setting terms for such clawback from time to time.

 

The provisions of this Paragraph D - “Forfeiture and Clawback Policy” shall be deemed amended to conform to any mandatory forfeiture and clawback requirements that Wix becomes subject to after the date this Policy is adopted.

 

 

The following benefits may be granted to the Executives:

 

 

Executives that are based outside of Israel may receive similar, comparable or customary benefits as applicable in the relevant jurisdiction in which they are employed.

 

In addition, Wix may offer additional benefits to the Executives, including, without limitation, telecommunication and electronic devices and communication expenses, company car and travel benefits, reimbursement of business travel (including a daily per diem when traveling and other business related expenses), reimbursement of relocation and related expenses, “runoff” and other insurances, newspaper subscriptions, periodic medical examinations, holiday and special occasion gifts, academic and professional studies, safety, security and protection measures (including at household premises and for family members), other benefits or entitlements mandated by applicable law, and other benefits and entitlements that are part of compensation practices in the industry, relevant geographical location, or region of activity.

 

 

The Compensation Committee and the Board of Directors may provide Executives with the following rights in connection with retirement and termination of service arrangements:

 

Advanced Notice Period and Adjustment Period.  Wix provides in the employment agreements of each of its Executives for a mutual advance notice period that does not exceed 6 months.  In addition, the Compensation Committee and the Board of Directors may elect to make an adjustment period payment (beyond the contractual advance notice period), to a departing Executive dismissed by Wix in circumstances that do not constitute “cause”, in an amount that does not exceed 3 months’ base salary of the departing Executive.

 

Additional Retirement and Termination Benefits.  Wix may provide additional retirement and termination benefits and payments as may be required by applicable law (e.g., mandatory severance pay under applicable labor laws) or a payment in consideration for the Executive’s agreement not to solicit Wix’s employees, customer and suppliers and/or not to compete with Wix for a defined period of time post-employment.

 

In determining the retirement and termination terms, the Compensation Committee and the Board of Directors shall take into account different criteria, including the following:

 

 

The maximum additional retirement and termination benefits payable to an Executive (including any advance notice period and adjustment period as set forth above) shall not exceed 15 months of the Executive’s base salary.

 

 

In addition to the benefits applicable in the case of any retirement or termination of service, as described above, the Compensation Committee and the Board of Directors may determine that an Executive shall be entitled to the following benefits in the event his or her employment is terminated or adversely adjusted in a material way following the occurrence of an event that constitutes a change of control of Wix:

 

 

 

 

 

 

Wix may indemnify, insure and exculpate the Executives to the full extent permitted by applicable law from time to time, including by entering into indemnification, insurance and exculpation agreements with each of the Executives; provided, that without the approval of Wix’s shareholders, the maximum coverage for D&O liability insurance shall not exceed $150 million.

 

 

In order to align the interests of the Executive Officers (as named in our annual report on Form 20-F) with the long-term growth of the Company, Executive Officers shall be required to beneficially own shares of the Company (excluding unvested equity) equal to at least 100% of their annual base salary.  Executive Officers who also serve as directors, as well as the Chief Executive Officer, shall be required to beneficially own shares of the Company (excluding unvested equity) equal to at least 500% of their annual base salary.

 

The Executive Officers (including those serving as directors) are expected to satisfy these shareholding guidelines by June 26, 2024 (which is four years from the date our prior Compensation Policy became effective which contained identical shareholding guidelines for Executive Officers) or, for Executive Officers employed after the effective date of this Policy, four years from his or her respective date of employment and maintain such shareholding guidelines throughout their service as Executive Officers.

 

 

The independent Compensation Committee shall periodically review the Policy and monitor its implementation, and recommend to the Board of Directors and shareholders to amend the Policy as it deems necessary from time to time.

 

The term of the Policy shall be indefinite.  However, the Compensation Committee shall recommend to the Board of Directors and shareholders, at least once every three years, as of the effective date of the Policy, to amend or restate the Policy.

 

Adopted by the Company on December 19, 2022

 

Effective as of June 26, 2023

 

 

DEFINITIONS

 

 

 

 

 

 

 

 

 

 

 

 

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

 

 

---

Wix com (NASDAQ:WIX)
Historical Stock Chart
From Mar 2024 to Apr 2024

Wix com (NASDAQ:WIX)
Historical Stock Chart
From Apr 2023 to Apr 2024