LendingClub Corporation0001409970DEF
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
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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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LendingClub Corporation
(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 all boxes that apply): |
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No fee required. |
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Fee paid previously with preliminary materials. |
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Fee computed on table in exhibit required by Item 25(b) per
Exchange Act Rules 14a-6(i)(1) and 0-11. |
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595 Market Street, Suite 200
San Francisco, California 94105
NOTICE OF 2023 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 8, 2023
To Our Stockholders:
NOTICE IS HEREBY GIVEN that the 2023 Annual Meeting of Stockholders
of LendingClub Corporation (the “Company,” “LendingClub,” “we,”
“us” and “our”) will be held on June 8, 2023 at 11:00 a.m.
Pacific Time via the Internet at
www.virtualshareholdermeeting.com/LC2023
(the “Annual Meeting”). There is no physical location for the
Annual Meeting.
At the Annual Meeting, you will be asked to:
1.Elect
Kathryn Reimann, Scott Sanborn and Michael Zeisser as Class III
directors, each of whom is currently serving on our Board of
Directors, to serve until the 2026 Annual Meeting of Stockholders
and until his or her successor has been elected and qualified or
his or her earlier death, resignation or removal;
2.Approve,
on a non-binding advisory basis, the compensation of our named
executive officers as disclosed in the Proxy
Statement;
3.Ratify
the appointment of Deloitte & Touche LLP as our independent
registered public accounting firm for the fiscal year ending
December 31, 2023;
4.Approve
a management proposal to amend and restate the Company’s Restated
Certificate of Incorporation to phase in the declassification of
our Board of Directors;
5.Approve
a management proposal to amend and restate the Company’s Restated
Certificate of Incorporation to remove the supermajority voting
requirements to amend our governing documents; and
6.Approve
a management proposal to amend and restate the Company’s 2014
Equity Incentive Plan to extend the expiration of the 2014 Equity
Incentive Plan by four years from December 2024 to
December 2028.
The foregoing items of business are more fully described in the
Proxy Statement accompanying this Notice.
Only stockholders of record at the close of business on
April 11, 2023 are entitled to notice of, and to vote at, the
Annual Meeting or any adjournment or postponement
thereof.
By Order of the Board of Directors,
Brandon Pace
Chief Administrative Officer and Corporate Secretary
San Francisco, California
April 27, 2023
Whether or not you expect to participate in the Annual Meeting,
please vote via the Internet, by phone, or complete, date, sign and
promptly return the accompanying proxy in the enclosed postage-paid
envelope (if applicable) so that your shares may be represented at
the Annual Meeting.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR
THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JUNE 8, 2023:
THIS PROXY STATEMENT, PROXY, AND THE ANNUAL REPORT ARE AVAILABLE AT
WWW.PROXYVOTE.COM
Dear Stockholders,
We are a digitally native, vertically integrated, customer-focused
company that brings together fintech and banking to help our over
4.5 million members manage their financial lives. We do this by
leveraging data and technology to improve access to credit, lower
borrowing costs and improve returns on savings. As record inflation
and elevated interest rates have strained the finances of Americans
across income bands even further, our purpose and opportunity have
never been greater.
In 2022, despite the headwinds of increasing inflation and interest
rates, we delivered record revenue and profitability through fee
revenue from our capital-light marketplace, and durable interest
income from loans held on our balance sheet. We also invested in
our mobile offering to enhance our customer experience, and
leveraged our banking advantage by repurchasing a $1.05 billion
portfolio of high-quality LendingClub personal loans which had been
previously purchased by one of our bank partners; this helped
mitigate a slowdown in our marketplace fee revenue.
In 2023, we are positioning the Company to remain profitable while
navigating an increasingly challenging macro environment. We have
made difficult but necessary decisions on expense management and
remain keenly focused on execution, including delivering on credit
quality. Although the macro environment appears likely to remain
dynamic and uncertain over the near and intermediate term, we
believe that LendingClub has tremendous opportunities ahead and is
well placed to resume growth as conditions stabilize.
Critical to our ability to successfully operate our business and
execute against future opportunities is recruiting and retaining a
talented employee base. Attrition remains low and we continue to
receive external accolades with respect to our workplace. And since
our last annual meeting, we have made a number of critical new
hires, including successfully transitioning to our new CFO, Drew
LaBenne. Drew replaced Tom Casey, who recently retired after
playing a critical role at LendingClub as our finance chief,
director and valued leader.
Maintaining high employee engagement and productivity necessitate
that we deliver a compelling combination of culture, opportunity
and compensation. As a fintech company with a substantial presence
in the San Francisco Bay Area, we operate a broad-based equity
program to deliver market compensation while driving alignment with
stockholders across the organization. We are cognizant of the
dilution this creates on our stockholders and have undertaken a
number of mitigating initiatives, including reducing award sizes,
allowing employees to voluntarily elect cash compensation in lieu
of equity and changing our tax withholding mechanics to provide for
holding back, rather than selling, shares in connection with the
vesting of RSUs.
We are committed, however, to further reducing the dilution from
our equity compensation program, and we have therefore included a
proposal in this year’s proxy to extend the expiration of our 2014
Equity Incentive Plan from 2024 to 2028 to reflect and facilitate
our desire to spread the number of shares already in the program
over a longer period of time. Please note that the proposal does
not solicit any new shares, nor does it extend the existing
evergreen provision, which will automatically sunset per its
original terms in 2024. We are simply requesting additional time to
use existing shares, while making commitments to adopt various best
practices and substantially -- yet prudently -- reduce the dilution
created by our equity compensation program. Accordingly, we believe
this proposal is a win-win as it supports the recruiting and
retaining of critical talent while enabling reductions in the
dilution stockholders experience from equity compensation. Please
refer to pages 3 and 70 of
this proxy statement for more information on this important
proposal.
Further, we have included two important governance proposals for
your consideration. First, we continue to believe in the merits of
a declassified board and have again included a proposal this year
to phase out our current classified board structure. Second, we
have included a proposal this year to remove the supermajority
voting standard to amend our governing documents.
As part of our commitment to good governance, in the months leading
up to the filing of this proxy statement, we engaged with several
stockholders on the direction of our compensation and governance
programs. Among other things, we discussed the three proposals
described above. Supported by these discussions, we believe these
proposals address common areas of stockholder feedback and
therefore highly encourage you to vote “FOR” each of
them.
With our award-winning banking product, market-leading lending
capabilities, innovation-oriented culture and seasoned executive
team, we remain optimistic about our future and committed to
creating value for our stockholders, as well as our customers,
employees and communities.
On behalf of the entire board, thank you for your investment in
LendingClub.
Sincerely,
Scott Sanborn, Chief Executive Officer and member of the
Board
John C. (Hans) Morris, Independent Chairman of the
Board
TABLE OF CONTENTS
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2023 PROXY STATEMENT | PROXY SUMMARY |
PROXY SUMMARY
April 27, 2023
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Proposal |
Board Recommendation |
Page |
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Proposal One: Election of Class III directors |
For each nominee |
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Proposal Two: Advisory vote to approve the compensation of our
named executive officers |
For |
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Proposal Three: Ratification of the appointment of Deloitte &
Touche LLP as our independent registered public accounting firm for
the 2023 fiscal year |
For |
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Proposal Four: Management proposal to amend and restate the
Company’s Restated Certificate of Incorporation to phase in the
declassification of the Board of Directors |
For |
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Proposal Five: Management proposal to amend and restate the
Company’s Restated Certificate of Incorporation to remove the
supermajority voting requirements to amend our governing
documents
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For |
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Proposal Six: Management proposal to amend and restate the
Company’s 2014 Equity Incentive Plan to extend the expiration of
the 2014 Equity Incentive Plan by four years from
December 2024 to December 2028
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For |
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The Notice of Internet Availability of Proxy Materials (the
“Notice”), Proxy Statement, form of proxy and Annual Report on Form
10-K for the year ended December 31, 2022 (the “Annual
Report”) will be first distributed and made available to
stockholders on or about April 27, 2023.
LendingClub Corporation (“LendingClub”, the “Company”, “we”, “us”,
“our”) operates America’s leading digital marketplace bank. As a
digitally native, vertically integrated, customer-focused company,
and one of a small number of fintech companies with a national bank
charter, we are uniquely positioned to rewrite the rules of
traditional banking and create a suite of integrated financial
products and services that make smart money moves simple and
rewarding. We do this by bringing together the best of both worlds
– fintech and banking – leveraging data and technology to increase
consumer access to credit, lower their borrowing costs, and improve
the return on their savings while delivering a seamless experience
that focuses on fairness and simplicity.
The Company was founded in 2006 and brought a traditional credit
product – the installment loan – into the digital age by leveraging
technology, data science and a unique marketplace model. In doing
so, we became one of the largest providers of unsecured personal
loans in the United States. In February 2021, LendingClub completed
the acquisition of an award-winning digital bank, Radius Bancorp,
Inc. (“Radius”), becoming a bank holding company and forming
LendingClub Bank, National Association (“LendingClub Bank”), as its
wholly-owned subsidiary through which we operate the vast majority
of our business. The result is a combination of complementary
strengths that create an economically attractive and resilient
digital marketplace bank.
Our customers – our “members” – can gain access to a broader range
of financial products and services designed to help them digitally
optimize their lending, spending and savings. Economic volatility
and the current rising costs of healthcare, housing, education and
more have contributed to millions of everyday Americans having
insufficient financial reserves or living paycheck to paycheck,
including approximately 50% of those earning over $100,000
annually. They often turn to a limited set of higher cost debt
solutions to bridge cash flow gaps and manage their financial
lives. Our mission is to empower our members on a path to better
financial health, giving them new ways to pay less on their debt
and earn more on their savings. Since 2007, more than
4.5 million individuals have become members, joining the Club
to help achieve their financial goals.
Our primary loan products include unsecured personal loans, secured
auto refinance loans, and patient and education finance loans. We
currently offer borrowers multiple features to lower their cost of
debt and enhance their financial health, including balance
transfers (where a borrower’s existing credit card debt is directly
paid down and the loan is consolidated into a fixed-rate term loan)
and joint applications (where borrowers may receive a better rate
when they jointly apply for a personal
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LENDINGCLUB CORPORATION
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2023 PROXY STATEMENT | PROXY SUMMARY |
loan). These loan products are underpinned by a scalable technology
platform and capabilities targeted directly at our members’ core
needs to either lower the cost of their debt and/or improve the
returns on their savings. Our commercial lending business is
primarily focused on small businesses, and we participate in the
U.S. Small Business Administration lending programs. Our deposit
business includes sourcing deposits directly from consumer and
commercial customers and from third-party marketing channels and
deposit brokers. For consumer depositors, we offer high-yield
savings accounts, checking accounts and certificates of deposit.
With our FDIC-insured high-yield savings account, members can
enhance their savings by earning competitive interest on their
entire balance. Our checking accounts deliver an award-winning
digital experience, customer friendly features, such as ATM fee
rebates, no overdraft fees, and early direct deposits.
To execute on our vision, grow the business responsibly and create
value for our stockholders, it is critical that we have a
sophisticated, dedicated and committed management team, overseen by
an independent Board of Directors (the “Board”) with substantial
and relevant expertise.
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2022 Strategic Priorities and Results |
Our management team and Board are deeply focused on the evolution,
execution and oversight of our strategy. Below is a summary of key
2022 strategic priorities and how we executed against
them.
Executing against our 2022 strategic priorities drove record
financial results in 2022. Below is a summary of our total revenue
and GAAP consolidated net income/loss performance.
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LENDINGCLUB CORPORATION
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2023 PROXY STATEMENT | PROXY SUMMARY |
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Responsiveness to Stockholder Feedback |
Our Board and Compensation Committee have undertaken a number of
changes or measures to be responsive to feedback regarding our
governance and compensation practices each year since 2017. Below
is a brief summary of what we have done. Stockholders have
overwhelmingly expressed support for the initiative the Company has
taken to solicit and incorporate stockholder feedback.
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Proposed Amendment and Restatement of 2014 Equity Incentive
Plan |
Our Board believes that our success depends on the ability to
attract the best available personnel. Therefore, we strive to
provide compensation packages that are competitive, reward personal
and company performance, and enable us to recruit and retain the
talent necessary to operate our business and execute against our
intermediate and long-term strategic objectives. To that end, the
Company operates a broad-based equity program to deliver market
compensation while driving alignment with stockholders across the
organization. In 2022, a total of 866 employees (over 50%)
received an equity award, with our executive officers receiving
16.6% of the total intended value. Without an equity compensation
program, we believe we would be at a significant disadvantage in
terms of recruiting and retaining talent, especially for leadership
roles and relative to other fintech companies operating in the San
Francisco Bay Area market.
However, we are also cognizant of the dilution created by our
equity compensation program on our stockholders. Although, we have
implemented a number of measures intended to mitigate the level of
dilution, it remains elevated. Therefore, as part of our commitment
to good and proactive governance, in January 2023 we filed a Winter
2023 stockholder outreach presentation with the Securities and
Exchange Commission (the “SEC”) to, among other things, solicit
feedback on a proposal to extend the expiration of our 2014 Equity
Incentive Plan (the “Plan”) by four years to December 2028. We
believe the proposal to extend the expiration of our Plan is a
win-win for the Company and our stockholders by allowing the
Company additional time to grant existing shares while facilitating
significant reductions to dilution over time. Specifically, if our
proposal to amend and restate the Plan is approved, we expect to
significantly reduce equity utilization through a combination of
prudent use of equity, operational changes (such as changes in
withholding mechanics), higher stock price and/or steady shift
towards cash-based awards/compensation. Notably, we will target
reducing the overhang and annual utilization rate from our equity
compensation program to below 20% and 4%, respectively, by the end
of 2027.
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LENDINGCLUB CORPORATION
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2023 PROXY STATEMENT | PROXY SUMMARY |
Importantly, the proposal does not request any new shares, nor does
it request an extension of the previously stockholder approved
evergreen provision.
Below is an overview of the proposal.
The stockholders that we engaged with generally expressed support
for our proposal to amend and restate the Plan, as well as our
accompanying commitment to reduce dilution and adopt various best
practices. In particular, stockholders noted that the proposal was
thoughtful and appreciated the Company’s transparency and
self-awareness. With respect to dilution, stockholders recognized
the significant steps the Company has taken to date and welcomed
the commitment to significantly reduce dilution from the Company’s
compensation programs over time. Further, stockholders appreciated
that equity compensation is a fundamental component of the
Company’s ability to deliver market levels of compensation and that
abruptly shifting to and increasing cash compensation to offset
unavailability of equity compensation would be disadvantageous in
the current economic climate and may also adversely impact the
Company’s ability to attract and retain the human capital necessary
to execute and advance its strategy. With respect to the timing of
the proposal, stockholders recognized that the sooner the Company
is provided more time to use its existing share reserve, the more
expeditiously and systematically it can begin taking measures to
reduce the dilution from its equity compensation
program.
Finally, while some stockholders expressed a preference for an
equity incentive plan that does not contain an evergreen provision,
all stockholders we spoke with appreciated that the Company’s
proposal does not include an extension of the evergreen provision
and acknowledged that the Company is entitled to the final
remaining evergreen tranche in 2024 per the original terms of the
Plan.
Further details regarding the proposed amendment and restatement of
our 2014 Equity Incentive Plan can be found in Proposal Six of this
Proxy Statement, beginning on page 70.
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LENDINGCLUB CORPORATION
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2023 PROXY STATEMENT | PROXY SUMMARY |
The Board maintains a robust refreshment process and remains
focused on ensuring that the skills and experiences of the Board
align with the Company’s evolving business. In the past four years,
the Board has appointed six new members, all of whom brought
different but relevant skills to our Board. The information in the
table and graphs below describes the current composition of our
Board and Board committees.
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Directors |
Faiz
Ahmad |
Stephen Cutler |
Allan Landon |
Timothy Mayopoulos |
John C. (Hans) Morris
Independent Chairman
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Kathryn Reimann |
Scott Sanborn
Chief Executive Officer
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Erin Selleck |
Janey
Whiteside |
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Michael Zeisser |
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Age |
51 |
61 |
75 |
64 |
64 |
66 |
53 |
66 |
51 |
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58 |
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Director Since |
2022 |
2023 |
2021 |
2016 |
2013 |
2022 |
2016 |
2021 |
2023 |
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2019 |
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Independent |
a |
a |
a |
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LENDINGCLUB CORPORATION
| 5
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2023 PROXY STATEMENT | PROXY SUMMARY |
Some of the statements in this Proxy Statement, including
statements regarding financial results, our ability to effectuate
and the effectiveness of Company strategy, the design of our
compensation programs, the benefits of our products and services,
Company performance, the dilution created by the Company’s equity
compensation program, future equity utilization and the timeline
for soliciting additional shares for issuance under our equity
compensation program are “forward-looking statements.” The words
“anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,”
“outlook,” “plan,” “predict,” “project,” “will,” “would” and
similar expressions may identify forward-looking statements,
although not all forward-looking statements contain these
identifying words. Factors that could cause actual results to
differ materially from those contemplated by these forward-looking
statements include whether Proposal Six of this Proxy Statement is
approved by the Company’s stockholders and those factors set forth
in the section titled “Risk Factors” in our most recent Annual
Report on Form 10-K, as filed with the SEC, as well as in our
subsequent filings made with the SEC. We may not actually achieve
the plans, intentions or expectations disclosed in forward-looking
statements, and you should not place undue reliance on
forward-looking statements. Actual results or events could differ
materially from the plans, intentions and expectations disclosed in
forward-looking statements. We do not assume any obligation to
update any forward-looking statements, whether as a result of new
information, future events or otherwise, except as required by
law.
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LENDINGCLUB CORPORATION
| 6
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2023 PROXY STATEMENT | ENVIRONMENTAL, SOCIAL AND
GOVERNANCE |
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
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Our mission is to empower our members on a path to better financial
health, giving them new ways to pay less on their debt and earn
more on their savings. That is especially critical today, as
economic volatility and the rising costs of food, gas, healthcare,
housing, education, and more have contributed to millions of
everyday Americans having insufficient financial reserves or living
paycheck to paycheck, including almost 50% of those earning over
$100,000 annually. We aim to offer lower cost solutions than
traditional credit products to help them bridge cash flow gaps and
manage their financial lives. Since 2007, over 4.5 million
individuals have become members, joining the Club to help achieve
their financial goals.
We believe that our business is inherently aligned with supporting
Environmental, Social and Governance (“ESG”) matters. With
oversight from our Nominating and Corporate Governance Committee,
we intend to build upon our strategy, progress and disclosures on
ESG matters over time based on stakeholder feedback and new
rulemaking on the topic.
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Our values are the foundation of what we strive to be, individually
and collectively. They guide all aspects of our business, from
strategic corporate decisions to promotions/hiring.
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Do What’s Right
We are committed to acting with honesty and integrity. We act in
the best interest of our members and everyone involved. We
recognize that trust and confidence are critical to our
marketplace, so we stand up for what’s right — even when it’s
hard.
Make Impossible Happen
We look beyond what is possible today to boldly imagine new and
better ways to improve the lives of our members. We take on big
challenges and drive relentlessly forward to overcome all obstacles
to make our vision a reality.
Know Your Stuff
We are a data-driven business. Each of us must be an expert in our
areas, continuously rooted in a deep understanding of the data. We
measure our efforts so that we can manage, make well-informed
decisions, and identify new opportunities.
Be Confident With Humility
We are exceptionally capable individuals who put our egos aside and
focus on our collective goals. We listen first and assume positive
intent. We get the right people together to inform our collective
perspective, evaluate the implications, and debate the trade-offs —
so we can move forward quickly, collaboratively, and with
confidence.
Evolve With Purpose
We embrace and create change. While we set our strategy for the
long term, we stay flexible to adapt to new opportunities. We test
bold ideas in real-world situations, without the fear of failure,
so we can improve and evolve.
Act Like An Owner
We take ownership and hold ourselves accountable to our
commitments. We roll up our sleeves and pick up tasks that need
doing, even if they’re not in our job description. We are committed
to LendingClub’s future and we act that way.
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LENDINGCLUB CORPORATION
| 7
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2023 PROXY STATEMENT | ENVIRONMENTAL, SOCIAL AND
GOVERNANCE |
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We aim to do our part in conserving the environment by
incorporating environmental-related considerations and risks into
certain aspects of our operations. Key actions we’ve taken to
support the environment include:
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Light Physical Footprint
As a digital marketplace bank we operate online, which provides our
members with access to banking services anywhere, anytime.
This reduces the environmental impact associated with brick and
mortar bank branches, including the impact of members visiting a
bank branch.
Facilities
We lease LEED Gold certified buildings in San Francisco and Utah.
When renovating our facilities, we emphasize recycling and the use
of environmentally friendly materials.
Sustainability
We advocate for the use of sustainable or re-usable products in our
spaces, such as providing compostable materials in our offices, and
in our work, such as leveraging electronic signature platforms when
possible.
Hybrid Work
We have adopted a hybrid work model for our employees, reducing the
environmental impact associated with a fully in-office work
environment, including the impact of our employees commuting to our
offices each day and reduced office space needs.
Member Focused
Our core business is focused on relatively smaller denominated
loans to individuals and small businesses, and not dependent on
large loans to customers that negatively impact the
environment.
Efficient Data Centers
We utilize leading third-party data centers for data storage that
enable us to remain environmentally efficient even as we grow our
business, customer base and data.
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LENDINGCLUB CORPORATION
| 8
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2023 PROXY STATEMENT | ENVIRONMENTAL, SOCIAL AND
GOVERNANCE |
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LendingClub is a social impact business with a mission of
empowering our members on their path to better financial health. We
advance this mission through a technology enabled business model
focused on the economic empowerment of Americans across the income
spectrum, especially those that have not been well served by
traditional banks.
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This aspiration, combined with our values, has driven us to lead
the financial industry in advancing several policies and programs
designed to reduce disparities, protect consumers and small
businesses from irresponsible financing practices, and encourage
innovation that supports financial health.
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Championing Financial Health |
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Through our digital marketplace bank, we help our members on their
path towards financial health by enabling them to pay less on their
debt and earn more on their savings. By receiving a loan through
LendingClub’s platform, many of our members take the first step
toward financial health by refinancing out of higher cost
debt. |
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In fact, our borrowers have told us that approximately 80% of
personal loans received through LendingClub’s platform are used for
refinancing or consolidating credit card debt. They also told us
that we improved their financial health by reducing the APR on
their debt by approximately four percentage points on average while
providing a responsible paydown plan. We believe we are well
positioned to increase our engagement with existing members by
offering additional products and services to enable them to manage
and improve their financial health. |
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LendingClub personal loans save borrowers in interest, while
providing a responsible paydown plan to help borrowers regain
control of their financial health. |
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In order to champion the financial success of our members with
fairness, simplicity and heart, we have implemented a number of
initiatives to support our borrowers during difficult times. All of
our members have a 15-day grace period to make loan payments with
no penalty. We also launched a loan extension program, which
extends the repayment term for eligible borrowers that fell behind
on their loan payments and have resumed making regular payments.
The program allows such borrowers to become current on their loan
and pay any past-due amounts at the end of the loan’s new repayment
term, and helps borrowers that may have experienced temporary
financial difficulty. Additionally, we offer relief programs to
eligible borrowers to provide flexibility during tough times like
natural disasters. During COVID-19, we waived late fees for
existing borrowers and launched new hardship plans tailored for the
COVID-19 pandemic, which helped borrowers preserve their financial
health in a difficult economic and credit environment. To support
our small business borrowers, we leveraged our digital banking
capabilities to support the Paycheck Protection Program (“PPP”).
Throughout the pandemic, we cumulatively facilitated over $870
million of PPP loans to help small businesses keep over 75,000
people employed.
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Competitive Interest Rates and Increased Savings |
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Our technology is fundamental to our ability to deliver better
rates and products. Over the past 15 years, we’ve refined our
advance credit decisioning and machine-learning models with more
than 150 billion cells of data and over $80 billion in loans. With
this underwriting technology, we’re able to underwrite loans more
efficiently, which enables us to offer lower interest rates to our
borrowers. |
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Federal Reserve researchers found that LendingClub-facilitated
loans maintain exceptionally low default rates while extending
access to credit to riskier borrowers. |
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On average, LendingClub members save ~$1,800 over the term of a
personal loan. |
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Researchers from the Federal Reserve Bank of St. Louis found that
LendingClub loans have had lower APRs than credit cards across FICO
bands. Additionally, researchers from the Federal Reserve Bank of
Philadelphia have found that “consumers pay smaller spreads on
loans from LendingClub than from credit card borrowing”, which is
supported by our data that indicates that our members save
approximately $1,800 on average over the term of a personal loan
from LendingClub. These savings also extend to our auto refinance
loans, which reduce the APRs members pay by over three percentage
points and results in average savings of approximately $2,100 over
the life of the auto loan. |
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LENDINGCLUB CORPORATION
| 9
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2023 PROXY STATEMENT | ENVIRONMENTAL, SOCIAL AND
GOVERNANCE |
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In addition to providing lower APRs, we have focused on being a
responsible lender and have voluntarily committed to a 36% APR cap
on our loans. We have also supported legislation in California and
Illinois to establish statewide 36% APR caps. Through our support
of the American FinTech Council, we also marshal fintech support
for federal 36% APR cap legislation. |
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As a digital marketplace bank, we are also placing emphasis on
helping our members build up savings through products and services
built to help them make the most of their money, like our award
winning high-yield savings and checking accounts. Through our
high-yield savings account, members can earn one of the best
interest rates in the country on their account balance. There are
no monthly maintenance fees, fees to wire funds or overdraft fees
for our high-yield savings account, resulting in more savings and
benefits for our members. With our checking accounts, members can
earn interest at rates higher than the national average and
unlimited cash back on qualified purchases with a checking account
debit card. Members also save more using our checking accounts as
we do not charge a fee for using ATMs, we rebate ATM fees charged
by other banks, and as there are no monthly maintenance fees,
overdraft fees or incoming wire transfer fees. Our checking
accounts have also earned official certification by the national
Cities for Financial Empowerment Fund as meeting the BankOn
National Standards for trust and affordability for consumer
transactional accounts. Through these digital marketplace bank
products and services, our members can effectively manage their
cash flow and meet their financial goals. |
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Fighting Discrimination |
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We are committed to fighting discrimination in the financial
services industry. For example, we were the first company to
express support for “disparate impact” regulation when these
anti-discrimination protections were under reconsideration by the
federal government. Through comment letters to the Consumer
Financial Protection Bureau (the “CFPB”), Federal Trade Commission
and the U.S. Department of Housing and Urban Development, we
articulated and advocated for the pro-innovation value of disparate
impact regulation. We have also worked with the National Community
Reinvestment Coalition on a consensus statement from civil rights
organizations and fintech companies in support of strengthening
these critical anti-discrimination protections. Further, we have
supported disparate impact regulation in order to prevent
algorithmic discrimination in lending to communities of
color. |
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“The value of disparate impact analysis was recently pointed out,
and endorsed by, the largest personal loan company in the country,
LendingClub, in its responses to requests for input by the
CFPB.”
– Mike Calhoun, President of the Center for Responsible Lending,
Senate Testimony 2019
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Our loan products also help our members avoid discrimination in the
financial services industry. For example, research by the National
Consumer Law Center shows that when a consumer finances the
purchase of a vehicle at a dealership, auto dealers are twice as
likely to add markups to loans of Black borrowers than to White
borrowers. Those markups are also routinely two-to-four times
higher for Black people. Our auto refinance loans result in savings
for all of our members, with our Black members seeing about 12%
greater savings than White borrowers because those Black borrowers
were more likely to be overcharged by their previous
lender. |
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LENDINGCLUB CORPORATION
| 10
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2023 PROXY STATEMENT | ENVIRONMENTAL, SOCIAL AND
GOVERNANCE |
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Financial Inclusion |
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We promote an inclusive financial system in which responsible
innovation of products and practices cultivates better financial
health outcomes. We strive to lend to those underserved by
traditional banks and our digital marketplace allows us to fill
credit gaps for consumers where bank branches may be less
available, making for a financial system that is more accessible to
all Americans. For example, our small business program with Accion
Opportunity Fund has seen over 50% of its loans go to
minority-owned businesses, as compared to less than 10% of loans by
conventional small business lending banks. Further, researchers
from the Federal Reserve Bank of Philadelphia have found that our
credit model risk ratings have a low correlation with FICO scores
while still effectively predicting credit risk at a high level of
performance. This means that our digital credit models are able to
identify consumers who would be overlooked or overpriced by
traditional FICO-based models, providing more consumers with access
to lower-priced credit. Additionally, a study by Federal Reserve
researchers using LendingClub data found that fintech small
business lending can create a more inclusive financial system by
allowing small businesses that were less likely to receive credit
from traditional lenders to access credit and do so at lower
costs.
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Researchers from the Federal Reserve Bank of Philadelphia have
found that that “LendingClub’s consumer lending activities have
penetrated areas that may be underserved by traditional banks, such
as in highly concentrated markets and in areas that have fewer bank
branches per capita.” |
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We’ve also advocated for policies that encourage lending to
minority-owned small businesses, such as urging the CFPB to
implement Section 1071 of the Dodd-Frank Wall Street Reform and
Consumer Protection Act, which requires lenders to report data on
how they are serving minority- and women-owned firms. We believe
that such policies will encourage innovation in lending, which may
allow better inclusion of minority- and women-owned businesses by
the financial services industry. |
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Helping Small Business |
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We are focused on supporting small businesses. We’ve partnered with
the nonprofit community development financial institution Accion
Opportunity Fund to increase small business owners’ access to
transparent, affordable, and responsible credit. We believe that
our small business lending activities have helped create or sustain
over 100,000 jobs, in addition to helping the over 75,000 people
that were able to remain employed with the over $870 million
of PPP loans we facilitated during the pandemic. Further, a study
from the Federal Reserve Bank of Philadelphia using LendingClub
data found that fintech lenders, like LendingClub, “have been able
to expand credit access to those underserved small business owners
who are not likely to receive funding from traditional lenders…and
in those areas that face a higher local unemployment
rate.”
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Through our partnership with Accion Opportunity Fund, we have
achieved 5x and 4x the representation of minority-owned and
women-owned businesses, respectively, in our small business
lending, compared to conventional banks. |
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We also helped form the Responsible Business Lending Coalition to
drive responsible practices in the small business lending sector.
With the Responsible Business Lending Coalition, we co-wrote the
Small Business Borrowers Bill of Rights, the first cross-sector
consensus on responsible small business lending and the rights that
small business owners deserve when obtaining a loan. Since its
creation, the Small Business Borrowers Bill of Rights has been
signed by over 110 nonprofits, community development financial
institutions, fintechs and banks and has inspired a wave of small
business protection laws across the U.S. |
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We believe that innovation in the financial services industry can
lower prices for small businesses. However, in order for small
business customers to identify and benefit from lower prices, they
need to be able to easily compare the prices they are being
offered. Accordingly, LendingClub and its coalition partners helped
lead the passage of the nation’s first small business
truth-in-lending law, California Senate Bill 1235, to help protect
small businesses from irresponsible lending that disproportionately
harms entrepreneurs of color. Similar legislation has since passed
in New York and has been introduced in Connecticut, Maryland, New
Jersey and North Carolina. Finally, we recently endorsed a bill
introduced in the United States House and Senate that would extend
the transparency standards of the federal Truth in Lending Act to
small business financing. |
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LENDINGCLUB CORPORATION
| 11
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2023 PROXY STATEMENT | ENVIRONMENTAL, SOCIAL AND
GOVERNANCE |
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We are committed to sound and effective corporate governance
practices. We have established a strong governance foundation
through highly qualified directors, with strong oversight provided
by our independent chairman. Further we have instituted significant
stock ownership requirements for Board members and executives to
promote strong alignment with stockholder interests. We also pursue
robust stockholder engagement each year and have been responsive to
stockholder feedback on key issues, including Board vote
requirements, Board declassification, supermajority voting
requirements and executive compensation programs.
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We have also established key policies and guidelines that align
with responsibly building value for our stockholders, including,
among others, the following:
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Corporate Governance Guidelines |
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Business Conduct and Ethics Policy |
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Our Corporate Governance Guidelines promote the effective
functioning of our Board and its committees, promote the interests
of our stockholders, ensure a common set of expectations as to how
our Board, its committees, individual directors and management
should perform their functions, and provide a flexible framework
within which the Board may conduct its business. |
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Our business conduct and ethics policy applies to all our
directors, officers, employees and authorized third-party
representatives and promotes certain actions, including honest and
ethical conduct, compliance with laws, rules and regulations, the
protection of LendingClub assets (including corporate opportunities
and confidential information), and fair dealing practices, among
others. |
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Officer Stock Ownership Guidelines |
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Non-Employee Director Ownership Guidelines |
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Under guidelines adopted by our Compensation Committee, our CEO
should hold equity in LendingClub with a value of six times base
salary, our CFO should hold equity with a value of three times base
salary, and all other Section 16 officers should hold equity with a
value of two times base salary. For additional information, see the
section titled “Additional Governance Measures — Stock Ownership
Guidelines” on page 40. |
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Each non-employee director should hold an equity in LendingClub
equal to at least $400,000 in value. For additional information,
see the section titled “Director Compensation — Director Stock
Ownership Guidelines” on page 26. |
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Human Capital/ Diversity & Inclusion |
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Our success depends, in large part, on our ability to recruit,
develop, motivate and retain employees with the skills to execute
our strategy. We participate in a competitive market for talent and
aim to distinguish ourselves by offering our employees the
opportunity to make a meaningful positive impact on the financial
health of Americans in an innovative technology-oriented
environment. We also offer competitive compensation and benefits.
Our compensation programs consist primarily of base salary,
corporate bonus and equity awards. Our benefits programs consist of
comprehensive health, dental and welfare benefits, including a
401(k) matching program and standalone mental health coverage. We
are committed to providing equal pay for equal work. To support
this, we’ve instituted pay equity assessments and benchmark
ourselves against industry best practices.
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On January 12, 2023, we announced a plan to streamline our
operations and more closely align our expense structure to loan
volume and revenue. The plan included a reduction of our workforce
by 225 employees and a reorganization to align responsibilities of
the operation and utilization of our investor marketplace and bank
balance sheet (the “Workforce Reduction”). For employees impacted
by the Workforce Reduction, we offered severance, extended benefits
coverage and outplacement assistance. |
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LENDINGCLUB CORPORATION
| 12
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2023 PROXY STATEMENT | ENVIRONMENTAL, SOCIAL AND
GOVERNANCE |
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We strive to create a welcoming and empowering environment where
our employees feel that they are reaching their full potential, are
highly engaged and are doing what they do best every day to
accomplish our mission and vision. We support our employees
professionally through onboarding programs, on-the-job training,
career development sessions and performance check-ins. We monitor
employee satisfaction and engagement through semi-annual engagement
surveys. Our employee experience has earned a number of external
recognitions, including being ranked #38 on Newsweek’s list of the
top 100 most loved workplaces for 2022; being named one of the 2022
Best Workplaces in Financial Services & Insurance by Great
Place to Work®
and Fortune; Top Workplaces USA awards in 2022 and 2023; Top
Workplaces awards for our Lehi, Utah office for every year in which
we have operated an office there (2019, 2020, 2021, 2022); Greater
Bay Area Top Workplaces award for our San Francisco, California
office in 2022; a perfect score of 100 in the Human Rights Campaign
Foundation’s 2022 Corporate Equality Index; and inclusion on
Bloomberg’s Gender-Equality Index in 2022 and 2023.
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Leading Workplace |
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#38 on Newsweek’s Top 100 Most Loved Workplaces 2022 |
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2022 Best Workplaces in Financial Services &
Insurance |
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Top USA Workplaces 2022 & 2023 |
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Lehi, Utah Top Workplaces 2019, 2020, 2021 & 2022 |
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Greater Bay Area Top Workplaces 2022 |
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Human Rights Campaign Foundation’s 2022 Corporate Equality
Index |
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Bloomberg’s 2022 & 2023 Gender-Equality Index |
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We have always been committed to advancing a safe work environment
for our employees. With that principle in mind, in 2020 during the
COVID-19 pandemic, we rapidly and effectively implemented a work
from home program. In 2022, we reopened our physical offices while
periodically calibrating our return to office strategy in public
health guidance in combination with the needs of our
employees. |
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We continue to work hard to create a workplace that is welcoming
and empowering for all. In addition to anti-racism, inclusive
hiring and breaking-bias trainings for all of our employees, we
have executive-sponsored programs designed to provide women and
under-represented individuals with leadership tools and growth
opportunities. Further, we have employee resource groups and an
allyship program designed to empower our employees to advocate for
the growth of minorities and build a more diverse and inclusive
workplace. We have also established a program focused on supplier
diversity to encourage contracts and partnerships with
minority-owned businesses. |
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LENDINGCLUB CORPORATION
| 13
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2023 PROXY STATEMENT | ENVIRONMENTAL, SOCIAL AND
GOVERNANCE |
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We believe that having a diverse and inclusive workplace delivers
better outcomes for our members and enables our employees to be
their best. |
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Diversity and inclusion are core to our corporate culture and we
continue to strive to improve the diversity of talent within the
financial services industry. We also treat diversity as an
important consideration when making hiring decisions. We believe
that the diversity of our employee base should represent the
diversity of our customer base. For open roles at all levels of our
workforce, including leadership positions (i.e., VP level and
above), we aim for a 50% diverse candidate slate and diverse
interview panel. We promote policies and regulations that prevent
and/or address discrimination, including with respect to the use of
artificial intelligence and fair and responsible lending to
communities of color. Our efforts were recognized by Top Workplaces
in 2022 as a Diversity, Equity and Inclusion Standout Company,
reflecting our employee involvement, hiring processes, development
practices and inclusive benefits. We intend to continue undertaking
measures to enhance our efforts with respect to diversity and
inclusion.
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Below is a summary of certain demographic information of our
full-time workforce as of December 31, 2022, and specifically
those employees that serve in leadership positions (i.e., VP level
and above). |
Full-Time Workforce
Leadership Workforce
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LENDINGCLUB CORPORATION
| 14
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2023 PROXY STATEMENT | BOARD OF DIRECTORS AND CORPORATE
GOVERNANCE |
BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
LendingClub Board
Our Board oversees the strategy and overall business affairs of the
Company. A key principle of our Company is maintaining the highest
level of trust with customers, regulators, stockholders and
employees. We have an active and engaged Board that is committed to
fulfilling its fiduciary duties to our Company and stockholders,
and helping us continue to earn the trust of our stakeholders.
Currently all members of our Board also serve on the board of
directors of our banking subsidiary, LendingClub Bank, and
therefore are entrusted with monitoring and ensuring the safety and
soundness of our banking operations as required by applicable
banking regulations. Our Board is also responsible, in conjunction
and consultation with the Compensation Committee, for periodically
reviewing the performance of our CEO and for providing oversight of
talent development and retention. Further, our Nominating and
Corporate Governance Committee is responsible for providing primary
oversight and review of our progress and disclosures with respect
to Environmental, Social and Governance (“ESG”)
matters.
Our Board currently has ten members and may establish a different
number of authorized directors from time to time by resolution.
Nine of our current directors are independent within the meaning of
the listing standards of the New York Stock Exchange (“NYSE”). Our
Board is currently divided into three staggered classes of
directors. At each annual meeting of stockholders, a class of
directors is elected for a three-year term to succeed the same
class whose term is then expiring. Our Board has proposed to phase
out the classified board structure subject to stockholder approval
of Proposal Four of this Proxy Statement at the Annual Meeting. If
that proposal passes, our Board will phase into a structure in
which all directors will be up for election each year to serve a
term ending at the next annual meeting of
stockholders.
Our Class III directors standing for re-election, if elected, will
continue to serve as directors until the 2026 Annual Meeting of
Stockholders and until his or her successor has been elected and
qualified, or until his or her earlier death, resignation or
removal.
Stockholder Outreach and Feedback
Our Board believes it is important to
maintain an open dialogue with stockholders to understand their
views on the Company, its strategy and its governance and
compensation practices. Therefore, we engage with stockholders
regularly and solicit feedback annually on our compensation and
governance practices. Consistent with prior years, members of our
management team participated in these conversations, and
stockholders were also offered the opportunity to speak with a
member of our Board.
This outreach cycle, we filed stockholder outreach presentation
materials with the SEC in January 2023. In early 2023, we
actively reached out to stockholders representing, in aggregate, an
estimated 50% of our then outstanding shares and held meetings with
those that requested a discussion, including with the governance
departments of some of our largest institutional stockholders. Some
stockholders declined our invitation for a discussion, citing a
lack of questions or concerns. In addition to our annual
stockholder outreach on governance and compensation practices, we
maintain ongoing dialogue with many of our stockholders through our
investor relations program. In total, since January 1, 2022,
we have had conversations with stockholders holding, in aggregate,
an estimated 46% of our outstanding shares.
Overall, the stockholders we engaged with expressed support for our
strategy and compensation and governance practices, including our
efforts to declassify the Board and remove the supermajority voting
standard. Stockholders further recognized the inherent social good
of the Company’s business model and welcomed the Company’s
disclosures on ESG matters. Certain stockholders inquired about the
cadence of the Company’s review of its ESG disclosures and
supported the Company’s commitment to incrementally evolve and
enhance its ESG disclosures. Some stockholders also encouraged the
Company to explore more leveraged compensation programs to further
incentivize and reward management for outperformance scenarios, as
well as explore diversifying the PBRSU program to include an
ambitious, but attainable, multi-year operating metric to
supplement the existing TSR metric.
Importantly, stockholders also generally expressed support for our
proposal to amend and restate our 2014 Equity Incentive Plan, as
well as our accompanying commitment to reduce dilution and adopt
various best practices. In particular, stockholders noted that the
proposal was thoughtful and appreciated the Company’s transparency
and the self-awareness it reflected. With respect to dilution,
stockholders recognized the significant steps the Company has taken
to date and
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LENDINGCLUB CORPORATION
| 15
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2023 PROXY STATEMENT | BOARD OF DIRECTORS AND CORPORATE
GOVERNANCE |
welcomed the commitment to significantly reduce dilution from the
Company’s compensation programs over time. Further, stockholders
appreciated that equity compensation is a fundamental component of
the Company’s ability to deliver market levels of compensation and
that abruptly shifting to and increasing cash compensation to
offset unavailability of equity compensation would be
disadvantageous in the current economic climate and may also
adversely impact the Company’s ability to attract and retain the
human capital necessary to execute and advance its strategy. With
respect to the timing of the proposal, stockholders recognized that
the sooner the Company is provided more time to use its existing
share reserve, the more expeditiously and systematically it can
begin taking measures to reduce the dilution from its equity
compensation program.
Finally, while some stockholders expressed a preference for an
equity incentive plan that does not contain an evergreen feature,
all stockholders we spoke with appreciated that the Company’s
proposal does not include an extension of the evergreen feature and
acknowledged that the Company is entitled to the final remaining
evergreen tranche in 2024 per the terms of the existing equity
incentive plan.
Further details regarding the proposed amendment and restatement of
our 2014 Equity Incentive Plan can be found in Proposal Six of this
Proxy Statement, beginning on page 70.
Board Leadership
John C. (Hans) Morris serves as the independent Chairman of our
Board.
While our Corporate Governance Guidelines do not require the
separation of offices of the Chairperson of the Board and the Chief
Executive, the Board believes an independent Chairperson reinforces
the independence of our Board as a whole and results in an
effective balancing of responsibilities, experience and independent
perspective that meets the current corporate governance needs and
oversight responsibilities of our Board. We believe this structure
provides consistent and effective oversight of our management and
is currently optimal for us and our stockholders.
In selecting Mr. Morris as the independent Chairman, the Board
considered his strong and relevant experience in financial services
technology and the financial services industry, ability to provide
effective leadership and facilitate open dialogue, and ability to
devote sufficient time and attention to the position.
Board Role in Risk Oversight
Management is responsible for assessing and managing risk, subject
to Board oversight directly and through its committees. The
oversight responsibility of the Board and its committees is
informed by reports from our management team, including our Chief
Risk Officer and an internal audit team, that are designed to
provide visibility to the Board about the identification and
assessment of key risks and our risk mitigation strategies. In
addition, the Board has requested and has been receiving regular
updates from management regarding our response to the recent
changes in the macroeconomic environment (including increasing
interest rates, elevated inflation and changing market dynamics)
and their impacts on us and our customers, employees and other
stakeholders, and our efforts to mitigate these
impacts.
The Board has delegated to the Operational Risk Committee and
Credit Risk and Finance Committee (each comprised of independent
directors) primary responsibility for the Board’s oversight of risk
management. The Operational Risk Committee is primarily focused on
reputational, legal, compliance and operational risk. The Credit
Risk and Finance Committee is primarily focused on credit, market,
interest rate and liquidity risk. In accordance with their
charters, the Operational Risk Committee and Credit Risk and
Finance Committee (collectively, the “Risk Committees”) assist our
Board in its oversight of our key risks, including credit,
technology and security, strategic, legal, regulatory (other than
related to our financial reporting), compliance and operational
risks, as well as the guidelines, policies and processes for
monitoring and mitigating such risks. The Operational Risk
Committee meets with members of our information technology
department at least once per year to assess information security
risks (including cybersecurity risks) and to evaluate the status of
our cybersecurity efforts, which include a broad range of tools and
training initiatives that are designed to work together to protect
the data and systems used in our business. We have also established
Management Risk Committees to oversee our enterprise risk
management program and provide a central oversight function to
identify, measure, monitor, evaluate and escalate key risks
(including cybersecurity risk) for oversight at the Board
level.
The other standing Board committees oversee risks associated with
their respective areas of responsibility. For example, our Audit
Committee has the responsibility for overseeing the integrity of
our financial reporting, including related policies
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LENDINGCLUB CORPORATION
| 16
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2023 PROXY STATEMENT | BOARD OF DIRECTORS AND CORPORATE
GOVERNANCE |
and procedures, compliance with legal and regulatory requirements
affecting financial reporting, and overseeing our internal audit
function. Our Nominating and Corporate Governance Committee seeks
to ensure that our Board is properly constituted to meet its
statutory, fiduciary and corporate governance oversight
obligations, and evaluates risk arising from governance matters.
Our Compensation Committee evaluates risks arising from our
compensation policies and practices, as more fully described in the
section “Executive Compensation – Compensation Discussion and
Analysis – Compensation Risk Assessment” below.
Director Independence
Under the rules of the NYSE, independent directors must comprise a
majority of a listed company’s board of directors. In addition, the
rules of the NYSE require that, subject to specified exceptions,
each member of a listed company’s audit, compensation and
nominating and corporate governance committees be independent.
Under the rules of the NYSE, a director will only qualify as an
“independent director” if, among other things, in the opinion of
that company’s board of directors, that person does not have a
relationship that would interfere with the exercise of independent
judgment in carrying out the responsibilities of a
director.
Our Board has reviewed its composition, the composition of its
committees and the independence of each director. Based upon
information provided by each director concerning his or her
background, employment and affiliations, including family
relationships, our Board has determined that Faiz Ahmad, Stephen
Cutler, Allan Landon, Timothy Mayopoulos, John C. (Hans) Morris,
Kathryn Reimann, Erin Selleck, Janey Whiteside and Michael Zeisser,
representing nine of our current ten directors (and all of our
current non-employee directors), do not have a relationship that
would interfere with the exercise of independent judgment in
carrying out the responsibilities of a director and that each of
these directors is “independent” as that term is defined under the
listing requirements and rules of the NYSE. In making this
determination, our Board considered the current and prior
relationships that each non-employee director has with our Company
and all other facts and circumstances our Board deemed relevant in
determining their independence, including the beneficial ownership
of our capital stock by each non-employee director.
Meetings and Attendance
In 2022, the Board held 7 meetings (including regularly scheduled
and special meetings) and acted by unanimous written consent 5
times. Each director attended at least 75% of the aggregate of (i)
the total number of meetings of our Board held during the period
for which he or she has been a director and (ii) the total number
of meetings held by all committees of our Board on which he or she
served during the periods that he or she served. Although we do not
have a formal policy regarding annual meeting attendance by members
of our Board, we encourage our directors to attend. All then
continuing directors attended our 2022 Annual Meeting of
Stockholders.
In addition, each member of our Board is also a board member of our
banking subsidiary, LendingClub Bank. In 2022, LendingClub Bank
held a total of 62 meetings of the board or meetings of committees
of the board. Each director attended at least 75% of the aggregate
of (i) the total number of meetings of the board of LendingClub
Bank during the period for which he or she has been a director and
(ii) the total number of meetings held by all committees of the
board of LendingClub Bank on which he or she served during the
periods that he or she served.
Often, in conjunction with the regularly scheduled meetings of the
Board, the independent directors also meet in executive sessions
outside the presence of management. The independent Chairman of our
Board, among other responsibilities, presides over such
meetings.
Board Committees
Our Board has established an Audit Committee, a Compensation
Committee, a Credit Risk and Finance Committee, a Nominating and
Corporate Governance Committee and an Operational Risk Committee.
The current composition and responsibilities of each of the
committees of our Board are described below.
Members serve on committees until their resignation or until
otherwise determined by our Board. Each of these committees has a
written charter, which, along with our Corporate Governance
Guidelines, are available on our website at
http://ir.lendingclub.com
under the heading “Corporate Governance.”
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LENDINGCLUB CORPORATION
| 17
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2023 PROXY STATEMENT | BOARD OF DIRECTORS AND CORPORATE
GOVERNANCE |
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Director |
|
Audit Committee |
|
Compensation Committee |
|
Credit Risk
and Finance Committee |
|
Nominating and Corporate Governance Committee |
|
Operational Risk Committee |
|
Faiz Ahmad |
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ü |
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ü |
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ü |
|
Stephen Cutler |
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ü |
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ü |
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Allan Landon |
|
Chair |
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ü |
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ü |
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Timothy Mayopoulos |
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ü |
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Chair |
|
John C. (Hans) Morris |
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Chair |
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ü |
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Kathryn Reimann |
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ü |
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ü |
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Erin Selleck |
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ü |
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ü |
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ü |
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Janey Whiteside |
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ü |
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ü |
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Michael Zeisser |
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Chair |
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Chair |
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|
Audit Committee
The current members of our Audit Committee are Stephen Cutler,
Allan Landon (chair), Kathryn Reimann and Erin Selleck. All of the
members of our Audit Committee meet the requirements for financial
literacy under the applicable rules and regulations of the SEC and
the NYSE. Our Board has determined that Mr. Landon is an Audit
Committee financial expert as defined under the applicable rules of
the SEC and has the requisite financial sophistication as defined
under the applicable rules and regulations of the NYSE. While other
members of our Audit Committee may have the expertise to be
designated an audit committee financial expert, the Board made a
specific finding only as it relates to Mr. Landon.
In addition, Audit Committee members must also satisfy the
independence criteria set forth in Rule 10A-3 under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”). In order to
be considered independent for purposes of Rule 10A-3, a member of
an audit committee of a listed company may not, other than in his
or her capacity as a member of the audit committee, the board or
any other committee of the board (i) accept, directly or
indirectly, any consulting, advisory or other compensatory fee from
the listed company or any of its subsidiaries or (ii) be an
affiliated person of the listed company or any of its
subsidiaries.
All of the members of our Audit Committee are independent directors
as defined under the applicable rules and regulations of the SEC
and the NYSE.
Our Audit Committee oversees financial risk exposures, including
monitoring the integrity of our consolidated financial statements,
internal controls over financial reporting, our internal audit
function and the independence of our independent registered public
accounting firm. Our Audit Committee receives internal
control-related assessments and reviews and discusses our annual
and quarterly consolidated financial statements with management. In
fulfilling its oversight responsibilities with respect to
compliance matters affecting financial reporting, our Audit
Committee meets at least quarterly with management, our internal
audit department, our independent registered public accounting
firm, our internal legal counsel and compliance department to
discuss risks related to our financial risk exposures.
During 2022, our Audit Committee held 12 meetings.
Compensation Committee
The current members of our Compensation Committee are Faiz Ahmad,
Allan Landon, Janey Whiteside and Michael Zeisser (chair). All of
the members of our Compensation Committee are independent under the
applicable rules and regulations of the SEC and the
NYSE.
Our Compensation Committee oversees our executive officer and
director compensation arrangements, plans, policies and programs
and administers our cash-based and equity-based compensation plans
and arrangements for employees generally. Our Compensation
Committee also oversees our broader compensation philosophy and
approach to human capital. From time to time and as it deems
appropriate, our Compensation Committee may delegate its authority
to subcommittees and, with respect to non-executive officer
compensation, to our officers.
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LENDINGCLUB CORPORATION
| 18
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2023 PROXY STATEMENT | BOARD OF DIRECTORS AND CORPORATE
GOVERNANCE |
During 2022, our Compensation Committee held 6 meetings and acted
by unanimous written consent 5 times.
Credit Risk and Finance Committee
The current members of our Credit Risk and Finance Committee are
Allan Landon, Timothy Mayopoulos, John C. (Hans) Morris (chair) and
Erin Selleck. Our Credit Risk and Finance Committee assists our
Board in its oversight of our key risks, including credit, market,
interest rate and liquidity risk, as well as the guidelines,
policies and processes for monitoring and mitigating such risks.
The Credit Risk and Finance Committee assists the Board in
monitoring our risk management system, including ensuring that it
is commensurate with our size, complexity and risk
profile.
During 2022, the Credit Risk and Finance Committee held 4
meetings.
Nominating and Corporate Governance Committee
The current members of our Nominating and Corporate Governance
Committee are Faiz Ahmad, John C. (Hans) Morris, Janey Whiteside
and Michael Zeisser (chair). All of the members of our Nominating
and Corporate Governance Committee are independent under the
applicable rules and regulations of the NYSE.
Our Nominating and Corporate Governance Committee seeks to ensure
that our Board is properly constituted to meet its statutory,
fiduciary and corporate governance oversight. Our Nominating and
Corporate Governance Committee will advise our Board on corporate
governance matters and board performance matters, including making
recommendations regarding director nominations and new
appointments, the structure and composition of our Board and Board
committees and developing, recommending and monitoring compliance
with corporate governance guidelines and policies and our code of
conduct and ethics. Our Nominating and Corporate Governance
Committee also provides primary oversight and review of our
progress and disclosures with respect to ESG matters.
During 2022, our Nominating and Corporate Governance Committee held
3 meetings and acted by unanimous written consent one
time.
Operational Risk Committee
The current members of our Operational Risk Committee are Faiz
Ahmad, Stephen Cutler, Timothy Mayopoulos (chair), Kathryn Reimann
and Erin Selleck. Our Operational Risk Committee assists our Board
in its oversight of our key risks, including technology and
security (including cybersecurity risk), strategic, legal,
regulatory (other than related to our financial reporting),
compliance and operational risks, as well as the guidelines,
policies and processes for monitoring and mitigating such
risks.
During 2022, our Operational Risk Committee held 4
meetings.
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LENDINGCLUB CORPORATION
| 19
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2023 PROXY STATEMENT | BOARD OF DIRECTORS AND CORPORATE
GOVERNANCE |
Director Skills and Experience
Our nominees and continuing directors provide a balanced mix of
skills and attributes to best oversee our business. Although the
Board currently believes that its members have the necessary skills
and expertise, the Board regularly monitors the evolution of the
Company and the fintech industry and as part of its refreshment
process evaluates its ability to continue to provide necessary
skills and experience.
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Nominees and Continuing Directors |
Faiz
Ahmad |
Stephen
Cutler |
Allan Landon |
Timothy Mayopoulos |
John C. (Hans) Morris
Independent Chairman
|
Kathryn Reimann |
Scott Sanborn
Chief Executive Officer
|
Erin Selleck |
Janey
Whiteside |
|
Michael Zeisser |
|
Skills & Experience |
|
Consumer Banking |
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a |
a |
a |
a |
a |
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a |
a |
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Fintech |
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a |
a |
a |
a |
a |
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a |
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Consumer Internet |
a |
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a |
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a |
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a |
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a |
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Financial Markets |
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a |
a |
a |
a |
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a |
a |
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a |
|
Legal/Regulatory |
|
a |
a |
a |
a |
a |
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a |
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Marketing/ PR |
a |
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a |
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a |
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Compensation/ Employee Matters |
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a |
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a |
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a |
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a |
|
Public Board Experience |
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a |
a |
a |
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a |
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a |
|
Risk Management |
a |
a |
a |
a |
a |
a |
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a |
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Technology/ Product |
a |
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a |
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a |
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a |
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a |
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Cybersecurity |
a |
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a |
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|
Additional Governance Measures
For information regarding additional governance measures we have
implemented in recent years, please see the section titled
“Additional Governance Measures” beginning on page 40.
Business Conduct and Ethics Policy
Our Board adopted a business conduct and ethics policy that applies
to all of our employees, officers and directors, including our CEO,
CFO and our other executive officers. The full text of the business
conduct and ethics policy is posted on the investor relations
section of our website at
http://ir.lendingclub.com
under the heading “Corporate Governance.” We intend to disclose
future amendments to certain provisions of our business conduct and
ethics policy, or waivers of provisions contained therein, on our
website or in public filings.
Compensation Committee Interlocks and Insider
Participation
None of the members of our Compensation Committee are or have at
any time during the past fiscal year been one of our officers or
employees. None of our executive officers currently serve or in the
past fiscal year have served as a member of the board of directors
or compensation committee of any entity that has one or more
executive officers serving on our Board or our Compensation
Committee.
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LENDINGCLUB CORPORATION
| 20
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|
2023 PROXY STATEMENT | BOARD OF DIRECTORS AND CORPORATE
GOVERNANCE |
Information Regarding Our Directors
The following table sets forth the names, ages and certain other
information for each of the directors with terms expiring at the
Annual Meeting (and who are also nominees for election as a
director at the Annual Meeting) and for each of the continuing
members of our Board:
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Director Nominees
|
|
Class
|
|
Age
|
|
Position
|
|
Director Since |
|
Current
Term
Expires |
|
Expiration of Term for Which Nominated |
|
Kathryn Reimann(1)(2)
|
|
III |
|
66 |
|
Director |
|
2022 |
|
2023 |
|
2026 |
|
Scott Sanborn |
|
III |
|
53 |
|
CEO and Director |
|
2016 |
|
2023 |
|
2026 |
|
Michael Zeisser(3)(4)
|
|
III |
|
58 |
|
Director |
|
2019 |
|
2023 |
|
2026 |
|
Continuing Directors |
|
|
|
|
|
|
|
|
|
|
|
|
|
Faiz Ahmad(2)(3)(4)
|
|
I |
|
51 |
|
Director |
|
2022 |
|
2024 |
|
— |
|
Stephen Cutler(1)(2)
|
|
II |
|
61 |
|
Director |
|
2023 |
|
2025 |
|
— |
|
Allan Landon(1)(3)(5)
|
|
I |
|
75 |
|
Director |
|
2021 |
|
2024 |
|
— |
|
Timothy Mayopoulos(2)(5)
|
|
I |
|
64 |
|
Director |
|
2016 |
|
2024 |
|
— |
|
John C. (Hans) Morris(4)(5)
|
|
II |
|
64 |
|
Director |
|
2013 |
|
2025 |
|
— |
|
Erin Selleck(1)(2)(5)
|
|
II |
|
66 |
|
Director |
|
2021 |
|
2025 |
|
— |
|
Janey Whiteside(3)(4)(6)
|
|
II |
|
51 |
|
Director |
|
2023 |
|
2025 |
|
— |
(1)Member
of the Audit Committee
(2)Member
of the Operational Risk Committee
(3)Member
of the Compensation Committee
(4)Member
of the Nominating and Corporate Governance Committee
(5)Member
of the Credit Risk and Finance Committee
(6)Ms.
Whiteside was appointed to our Board, the Compensation Committee
and the Nominating and Corporate Governance Committee on April 20,
2023, which was after the filing of our Preliminary Proxy Statement
on April 13, 2023
Note that under Proposal Four of this Proxy Statement, we are
proposing to amend and restate our Restated Certificate of
Incorporation, as amended (the “Restated Certificate of
Incorporation”), to provide that any director elected to the Board
after the date of the Annual Meeting be elected for a term expiring
at the next annual meeting of stockholders following his or her
election.
Nominees for Director
Kathryn Reimann
joined our Board in August 2022. Since September 2021,
Ms. Reimann has served as a Senior Advisor at Oliver Wyman
specializing in regulatory compliance and risk management,
regulatory policy, governance and ethics matters. She has also
served as an Adjunct Professor and Senior Fellow in the Program on
Corporate Compliance & Enforcement at New York University
School of Law since December 2019 and a regulatory advisor to
Hummingbird Regtech since January 2020. She previously served
as a Senior Managing Director of Treliant from August 2018 to
October 2019 and as Chief Compliance Officer and Managing
Director for Citibank NA and Citi’s Global Consumer Banking
business from August 2006 to July 2018. Earlier, she
served as Global Compliance Head and Managing Counsel of American
Express and as Chief Compliance Officer at Lehman Brothers. She was
elected to the American Law Institute in 2016 and serves as an
advisor on their compliance principles project. She holds an A.B.
from Princeton University’s Woodrow Wilson School of Public and
International Affairs and a J.D. from New York University School of
Law. Ms. Reimann was chosen as a member of our Board because of her
extensive experience with consumer financial regulation, bank
governance and compliance risk management.
Scott Sanborn
has served as our Chief Executive Officer and as a member of our
Board since June 2016. Mr. Sanborn previously served as our
President from April 2016 to May 2017, Chief Operating and
Marketing Officer from April 2013 to March 2016 and Chief Marketing
Officer from May 2010 to March 2013. From November 2008 to February
2010, Mr. Sanborn served as the Chief Marketing and Revenue Officer
for eHealthInsurance, an e-commerce company. Mr. Sanborn holds a
B.A. from Tufts University. Mr. Sanborn has significant executive
and leadership experience and has been a driver
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2023 PROXY STATEMENT | BOARD OF DIRECTORS AND CORPORATE
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of our strategy and growth for nearly 10 years and instrumental in
transforming the Company from a small privately held company to a
publicly traded company and industry leader. Mr. Sanborn was chosen
as a member of our Board because of the perspective he brings as
Chief Executive Officer and his experience with and knowledge of
our Company and the fintech industry.
Michael Zeisser
has been a member of our Board since September 2019. Mr. Zeisser
currently serves as the Managing Partner of FMZ Ventures, a growth
equity investment fund focused on experienced economy and
marketplace ecosystems. From 2013 to April 2018, Mr. Zeisser served
in a number of capacities for the Alibaba Group, most recently as
Chairman, U.S. Investments where he led Alibaba’s strategic
investments outside of Asia. From 2003 to 2013, Mr. Zeisser served
as Senior Vice President of Liberty Interactive Corporation, where
he led investments in digital media, online gaming, and commerce.
Prior to joining Liberty Media, Mr. Zeisser was a partner at
McKinsey & Company. Mr. Zeisser also serves on the board of
directors of Global Technology Acquisition Corp. I and several
privately held companies. Previously, Mr. Zeisser served on the
board of directors of Shutterfly, Trip Advisor, IAC, TIME Inc. and
XO Group. Mr. Zeisser graduated from the University of Strasbourg,
France and the J.L. Kellogg Graduate School of Management at
Northwestern University. Mr. Zeisser was chosen to serve on our
Board because of his extensive experience in corporate development,
strategy and consumer marketplaces.
Continuing Directors
Faiz Ahmad
joined our Board in August 2022. Since August 2022, Mr. Ahmad has
served as Chief Commercial Officer of YETI Holdings, Inc. Prior to
joining YETI, Mr. Ahmad was CEO, Direct-to-Consumer from June 2020
to July 2022 and Chief Digital Services Officer from September 2019
to June 2020 at Optum, a subsidiary of United Health Group, where
he led the creation and go-to-market strategy for Optum’s direct to
consumer digital health marketplace for care and pharmacy needs. He
also served as Senior Director and Global Head for the Apple Online
Store and Apple Retail Market Development for Apple Inc. from
February 2015 to August 2019, where he was responsible for the
growth strategy, including customer acquisition and affinity
programs, for Apple’s retail markets. He also held leadership
positions at Delta Airlines, and, in his last role as Managing
Director, managed Delta’s digital and customer facing touch points
while overseeing the overall digital strategy, global business
development, product roadmaps and experience design. Mr. Ahmad
received his Master of Business Administration from Emory
University and graduated from the Manipal Institute of Technology
in India with a Bachelor of Engineering. Mr. Ahmad was chosen as a
member of our Board because of his extensive experience in
leveraging technology to transform the customer experience for
consumer brands.
Stephen Cutler
joined our Board in March 2023. Since January 2023, Mr. Cutler has
served as Of Counsel at Simpson Thacher & Bartlett LLP. From
April 2018 to January 2023, Mr. Cutler was a Partner at Simpson
Thacher & Bartlett LLP, and previously served as Global Head of
the firm’s Government and Internal Investigations Practice. Prior
to joining Simpson Thacher, Mr. Cutler was Vice Chairman from 2016
to 2018 and General Counsel from 2007 to 2016 of JPMorgan Chase
& Co. Earlier in his career, Mr. Cutler served as Director of
the SEC’s Division of Enforcement from 2001 to 2005. Mr. Cutler
also serves on the board of The Metropolitan Museum of Art and
previously served on the boards of the Financial Industry
Regulatory Authority (FINRA) and the National Women’s Law Center.
Mr. Cutler received his B.A.,
summa cum laude,
from Yale University and his J.D. from Yale Law School, where he
was an editor of the Yale Law Journal. Mr. Cutler was chosen to
serve on our Board because of his extensive experience in the
banking, legal and regulatory sectors.
Allan Landon
joined our Board in February 2021. Since June 2011, Mr. Landon has
served as Assistant Dean and Adjunct Professor at David Eccles
School of Business, University of Utah. His teachings cover
business leadership and banking courses and help develop
experiential learning programs. He also directs the Utah Center for
Financial Services. From July 2011 to July 2018, Mr. Landon was
Operating Partner at Community BanCapital and CBC Management GP, an
Investment Management company. From 2004 to 2010, Mr. Landon served
as Chairman and Chief Executive Officer of Bank of Hawaii. Before
joining Bank of Hawaii, Mr. Landon was the Chief Financial Officer
of First American Bank. Earlier Mr. Landon was a partner with Ernst
& Young, serving public and privately-owned community, regional
banks and other financial institutions. Mr. Landon is a member of
the Boards of Directors of Whistic, Inc. and Electronic Caregiver,
Inc., and, from September 2014 to June 2021, served on the Board of
Directors of State Farm Mutual Automobile Insurance. Mr. Landon
holds a B.S. from Iowa State University. Mr. Landon was chosen to
serve on our Board because of his extensive experience in the
banking and financial services industry.
Timothy J. Mayopoulos
joined our Board in August 2016. During March 2023, Mr. Mayopoulos
served as President and CEO of Silicon Valley Bridge Bank, N.A.
From January 2019 to March 2023, Mr. Mayopoulos served as President
of Blend
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Labs, Inc., a publicly traded enterprise software company making
consumer lending simpler, faster and safer. From 2012 to 2018, Mr.
Mayopoulos served as President and Chief Executive Officer of
Fannie Mae, one of the largest providers of mortgage credit in the
United States. Mr. Mayopoulos joined Fannie Mae in 2009 in the wake
of the financial crisis. He initially served as Fannie Mae’s
General Counsel, and in 2010 was named Chief Administrative
Officer. He was promoted to CEO in June 2012, and, in that role,
led the company’s support of the U.S. housing market and its
efforts to create a better housing finance system for the future.
Before joining Fannie Mae, Mr. Mayopoulos was General Counsel of
Bank of America, held senior management positions at Donaldson,
Lufkin & Jenrette, Credit Suisse, First Boston and Deutsche
Bank, and practiced law at Davis Polk & Wardwell. Mr.
Mayopoulos is a member of the Boards of Directors of Blend Labs,
Inc., Science Applications International Corporation (SAIC), Valon
Technologies, Inc. and Bilt Technologies, Inc. He is a graduate of
Cornell University and the New York University School of Law. Mr.
Mayopoulos was chosen to serve on our Board because of his
extensive experience in the financial, legal and regulatory
sectors.
John C. (Hans) Morris
joined our Board in February 2013. Mr. Morris is the managing
partner of Nyca Partners, a venture capital company focused on
fintech established in 2014. From January 2010 until January 2014,
he served as a managing director and special advisor at General
Atlantic, a growth equity firm. Mr. Morris was previously President
of Visa, Inc. from 2007 to 2009. Prior to Visa, Mr. Morris spent 27
years at Citigroup, Inc., a banking and financial services company,
and its predecessor companies in various leadership positions, with
his final position as Chief Financial Officer and Head of Finance,
Technology and Operations for Citi Markets and Banking. Mr. Morris
also serves on the board of directors of Payoneer Global, Inc. and
several privately held companies, and previously served on the
board of directors of AvidXchange Holdings, Inc. from 2015 until
December 2022. Mr. Morris holds a B.A. in government from Dartmouth
College. Mr. Morris was chosen to serve on our Board because of his
extensive experience in the banking and financial services industry
and his financial expertise.
Erin Selleck
joined our Board in February 2021. Prior to her retirement in 2014,
Ms. Selleck served as Senior Executive Vice President and Treasurer
for MUFG Union Bank, a key subsidiary of Japan’s Mitsubishi UFJ
Financial Group (MUFG), one of the world’s largest financial
organizations. Her accomplishments at Union Bank include
successfully guiding the bank through the 2008 financial crisis,
growing the bank’s balance sheet, and navigating an increasingly
challenging economic and regulatory environment in the banking
industry. Before joining MUFG Union Bank, Ms. Selleck served as
Vice President and Manager in Corporate Treasury at Bank of
America. Ms. Selleck served on the board of Broadway Financial
Corp/Broadway Federal Bank from 2015 until March 2021. Ms. Selleck
holds a B.A. in Sociology and an M.B.A. from University of
California at Berkeley. Ms. Selleck was chosen to serve on our
Board because of her extensive experience in the banking and
financial services industry.
Janey Whiteside
joined our Board in April 2023. Since October 2022, Ms. Whiteside
has served as a partner of the Consello Group, a financial services
advisory and strategic investing platform, and the CEO of
Consello’s Growth and Business Development division. Prior to
joining Consello, Ms. Whiteside was Executive Vice President and
Chief Customer Officer of Walmart Inc. from August 2018 to March
2022, where she was responsible for the customer journey for both
Walmart stores and e-commerce across marketing, creative, PR,
product and design, and launched Walmart Connect and Walmart+. From
1997 to July 2018, Ms. Whiteside served at American Express Company
in business development, marketing and operating roles in various
customer segments, including most recently EVP & GM – Global
Premium Products & Benefits and EVP & GM – Global Charge
Products, Benefits & Services. Prior to American Express,
Ms. Whiteside worked at HSBC Bank from 1993 to 1997. Ms.
Whiteside holds an Economics & Management Studies degree (BSc
Econ) from Cardiff University. Ms. Whiteside was chosen to serve on
our Board because of her extensive experience in the financial
services industry and in the marketing, digital and commercial
disciplines.
Considerations in Evaluating Director Nominees
In its evaluation of director candidates, our Nominating and
Corporate Governance Committee considers the current size and
composition of our Board and the needs of our Board and the
respective committees of our Board. Some of the qualifications that
our Nominating and Corporate Governance Committee considers include
business experience, diversity characteristics (including gender,
race and ethnic background) and the skills set forth in the
director skills matrix on page 20.
Exceptional candidates who do not meet all of the above criteria
may still be considered. Director candidates must have sufficient
time available in the judgment of our Nominating and Corporate
Governance Committee to perform all board of director and committee
responsibilities. Members of our Board are expected to prepare for,
attend, and participate in all board of director and applicable
committee meetings. Other than the foregoing, there are no stated
minimum criteria for
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2023 PROXY STATEMENT | BOARD OF DIRECTORS AND CORPORATE
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director nominees, although our Nominating and Corporate Governance
Committee may also consider such other factors as it may deem, from
time to time, are in our stockholders’ best interests.
Our Nominating and Corporate Governance Committee does not have a
formal policy with respect to diversity; however, it
considers diversity characteristics in identifying director
nominees, including personal characteristics such as ethnicity and
gender, as well as diversity in the perspective, experience and
skills that contribute to the Board’s performance of its
responsibilities in the oversight of our Company.
Additionally, in its efforts to recruit members of the Board, the
Nominating and Corporate Governance Committee will specifically
direct any individuals or search firms assisting with recruitment
to seek out potential candidates with diversity characteristics,
including gender and racial diversity, to ensure that the
Nominating and Corporate Governance Committee has considered a full
array of qualified candidates. In making determinations regarding
nominations of directors, our Nominating and Corporate Governance
Committee also considers these and other factors as it oversees the
annual board of director and committee evaluations. After
completing its review and evaluation of director candidates, our
Nominating and Corporate Governance Committee recommends to our
full Board the director nominees for election.
Our Nominating and Corporate Governance Committee uses a variety of
methods for identifying and evaluating director nominees.
Candidates may come to its attention through current members of our
Board, professional search firms (which locate qualified candidates
that meet the Nominating and Corporate Governance Committee’s
criteria), stockholders or other persons. The Board does not
distinguish between nominees recommended by stockholders and other
nominees. However, stockholders desiring to nominate a director
candidate at the Annual Meeting must comply with certain
procedures. A stockholder of record can nominate a candidate for
election to the Board by complying with the procedures in Article
I, Section 1.11 of our Amended and Restated Bylaws (the “Bylaws”).
Any eligible stockholder who wishes to submit a nomination should
review the requirements in the Bylaws on nominations by
stockholders. Any nomination should be sent in writing to the
Secretary, LendingClub Corporation, 595 Market Street, Suite
200, San Francisco, California 94105. Submissions must include the
full name of the proposed nominee, complete biographical
information, a description of the proposed nominee’s qualifications
as a director, other information specified in our Bylaws and a
representation that the nominating stockholder is a beneficial or
record holder of our stock. Any such submission must be accompanied
by the written consent of the proposed nominee to be named as a
nominee and to serve as a director if elected, along with an
irrevocable resignation, contingent (i) on that nominee not
receiving the required vote for election, and (ii) acceptance of
that resignation by the Board in accordance with policies and
procedures adopted by the Board for such purposes. All candidates
are evaluated under the same process which is conducted by our
Nominating and Corporate Governance Committee, and may be
considered at any point during the year. Stockholders otherwise may
recommend persons for the Board to consider for nomination. If any
materials are provided by a stockholder in connection with the
nomination or recommendation of a director candidate, such
materials are forwarded to the Nominating and Corporate Governance
Committee.
All proposals of stockholders (including nominations but excluding
proposals under SEC Rule 14a-8) that are intended to be presented
by such stockholder at an annual meeting of stockholders must be in
writing and notice must be delivered to the Secretary at our
principal executive offices no later than the close of business on
the 75th day nor earlier than the close of business on the 105th
day prior to the first anniversary of the preceding year’s annual
meeting. For stockholder proposals under SEC Rule 14a-8, see
“QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS AND THE ANNUAL
MEETING – 17. How can I make proposals or nominate a director at
next year’s annual meeting?”.
Director Compensation
Our non-employee director compensation program is described below.
In addition, we reimburse our non-employee directors for reasonable
travel and other expenses incurred in connection with attending our
board and committee meetings. Employee directors are not eligible
to receive additional compensation for their service as directors.
Accordingly, Mr. Sanborn, our Chief Executive Officer, and Thomas
Casey, our former Chief Financial Officer, received no additional
compensation in 2022 for their service as directors. Our
non-employee directors do not receive perquisites.
Each member of our Board also concurrently serves as a director of
our banking subsidiary, LendingClub Bank. In 2022, members of our
Board held 98 meetings (between Company and LendingClub Bank
meetings of the board or committees of the board).
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LENDINGCLUB CORPORATION
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2023 PROXY STATEMENT | BOARD OF DIRECTORS AND CORPORATE
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Equity Compensation
Under our non-employee director compensation program, each new
non-employee member of our Board receives an equity award of RSUs
in connection with his or her initial election or appointment to
our Board having a grant date fair value equal to $200,000
multiplied by a fraction, the numerator of which is 365 minus the
number of days that have elapsed between the date of our most
recently completed annual meeting of stockholders and the date the
non-employee director becomes a member of our Board, and the
denominator of which is 365 (the “Initial Director
Award”).
To satisfy stock ownership requirements set forth by the federal
banking regulations, the Initial Director Award shall have a grant
date fair value equal to at least $1,000 and $1,000 of the Initial
Director Award will vest immediately. The remainder of the Initial
Director Award, if any, will vest on the one-year anniversary of
our most recently completed annual meeting of stockholders. For
example, a non-employee director that joins our Board mid-way
through the one-year anniversary of our most recently completed
annual meeting of stockholders would receive an Initial Director
Award having a grant date fair value equal to $100,000 with $1,000
vesting immediately and the remainder vesting on the one-year
anniversary of our most recently completed annual meeting of
stockholders.
Each continuing non-employee member of our Board receives on the
date of our annual meeting of stockholders an equity award of RSUs
having a grant date fair value of $200,000 that vests quarterly
over one year.
The number of RSUs granted to non-employee directors is determined
by dividing the intended target value of the equity award by our
stock price on the date of grant.
Cash Compensation
Each non-employee director receives the applicable annual cash
retainers listed below based on their board and committee service.
Committee chairpersons do not receive the committee member retainer
in addition to the chairperson retainer. Our non-executive Board
chairperson does receive both the cash retainer as a non-employee
director and the cash retainer as non-executive Board
chairperson.
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Board and Committee Service |
|
2022
Cash Retainer
Amounts |
|
All Non-Employee Directors |
|
$40,000/year |
|
Non-Executive Board Chairperson |
|
$25,000/year |
|
Audit Committee Chairperson |
|
$25,000/year |
|
Compensation Committee, Operational Risk Committee and Credit Risk
and Finance Committee Chairperson |
|
$17,500/year |
|
Nominating and Corporate Governance Chairperson |
|
$10,000/year |
|
Audit Committee Member |
|
$12,500/year |
|
Compensation Committee, Operational Risk Committee and Credit Risk
and Finance Committee Member |
|
$8,000/year |
|
Nominating and Corporate Governance Member |
|
$5,000/year |
Cash retainers are generally paid semi-annually after services are
rendered instead of paid in advance. Specifically, non-employee
directors typically receive a cash payment in June for services
performed from January to June and a cash payment in December for
services performed from July to December.
Bank Board Service
Each member of our Board and committee of our Board also
concurrently serves as a director of our banking subsidiary,
LendingClub Bank (the “Bank Board”) and in a corresponding capacity
on the corresponding committee, if any, of the Bank Board.
Accordingly, by way of example only, a member of our Board who
serves as a member of the Audit Committee of our Board and the
chair Operational Risk Committee of our Board, then also
concurrently serves as a member of the Bank Board, a member of the
Audit Committee of the Bank Board and the chair of the Operational
Risk Committee of the Bank Board (such concurrent service,
“Concurrent Service”). Our non-employee directors do not receive
any additional compensation for Concurrent Service on the Bank
Board.
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LENDINGCLUB CORPORATION
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2023 PROXY STATEMENT | BOARD OF DIRECTORS AND CORPORATE
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In October 2022, our non-employee director compensation program was
revised to provide, effective as of January 1, 2022, a per meeting
cash retainer in the amounts described below, subject to a maximum
calendar year payment of $25,000, for non-employee directors who
serve on a committee of the Bank Board that meets at least three
times in the then current calendar year and for which there is no
corresponding Board committee (such Bank Board committee, a “Bank
Only Committee”).
By way of example only, a Bank Only Committee could include a
committee responsible for providing oversight of mergers and
acquisitions, legal and regulatory compliance, capital management
or a Community Reinvestment Act program. In 2022, there was a
single Bank Only Committee that held 13 meetings in 2022 (the “2022
Bank Only Committee”). Ms. Selleck served as chair of the 2022 Bank
Only Committee and Messrs. Landon, Mayopoulos and Morris served as
members.
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Bank Only Committee Service |
|
2022
Cash Retainer
Amounts |
|
Chairperson of a Bank Only Committee |
|
$2,000 per meeting |
|
Bank Only Committee Member |
|
$1,000 per meeting |
Director Stock Ownership Guidelines
Our director stock ownership guidelines provide that each
non-employee director should hold equity (vested shares and/or
shares underlying RSU awards) equal to at least $400,000 in value,
or ten times the current base cash retainer for non-employee
director service, within three years from the date of appointment
or election to our Board. Compliance with these guidelines will be
considered by our Nominating and Corporate Governance Committee
when making recommendations to the Board regarding whether to
nominate directors for re-election.
All of our non-employee director nominees and non-employee
continuing directors are in compliance with this policy, and either
meet the suggested ownership levels currently or have additional
time to accumulate equity to meet the ownership
levels.
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LENDINGCLUB CORPORATION
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2023 PROXY STATEMENT | BOARD OF DIRECTORS AND CORPORATE
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2022 Director Compensation
The following table provides information regarding the total
compensation paid or awarded in 2022 to each of our non-employee
directors who served during 2022. Mr. Sanborn and Mr. Casey
received no compensation for their 2022 service on our Board
because they were employee directors.
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Director |
|
Fees Earned
or Paid in
Cash ($)(1)
|
|
Option
Awards
($)
|
|
Stock
Awards
($)(2)
|
|
Total ($) |
|
Susan Athey(3)
|
|
24,489 |
|
— |
|
|
— |
|
|
24,489 |
|
Faiz Ahmad(4)
|
|
23,121 |
|
— |
|
|
159,459 |
|
182,580 |
|
Allan Landon |
|
94,000 |
|
— |
|
|
200,010 |
|
294,010 |
|
Timothy Mayopoulos |
|
83,000 |
|
— |
|
|
200,010 |
|
283,010 |
|
Patricia McCord(5)
|
|
39,750 |
|
— |
|
|
200,010 |
|
239,760 |
|
John C. (Hans) Morris |
|
96,500 |
|
— |
|
|
200,010 |
|
296,510 |
|
Kathryn Reimann(4)
|
|
25,964 |
|
— |
|
|
159,459 |
|
185,423 |
|
Erin Selleck |
|
93,500 |
|
— |
|
|
200,010 |
|
293,510 |
|
Michael Zeisser |
|
65,403 |
|
— |
|
|
200,010 |
|
265,413 |
(1)Reflects
amounts paid in 2022.
(2)Amounts
reflect the aggregate grant date fair value of the RSUs granted in
2022, without regard to forfeitures, computed in accordance with
Financial Accounting Standards Board (“FASB”) Accounting Standards
Codification (“ASC”) Topic 718,
Compensation – Stock Compensation.
Assumptions used in the calculation of this amount are included in
“Note 16. Employee Incentive Plans” to the Consolidated
Financial Statements included in our Annual Report. This amount
does not reflect the actual economic value realized by each
director.
(3)Ms.
Athey resigned from the Board effective June 2,
2022.
(4)Mr.
Ahmad and Ms. Reimann were appointed to the Board effective
August 15, 2022.
(5)Ms.
McCord resigned from the Board effective September 30,
2022.
Options and RSUs Held
The following table sets forth the aggregate number of options and
RSUs held as of December 31, 2022 by each individual who
served as a non-employee director during 2022:
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As of December 31, 2022 |
|
Director |
|
Total Options Held |
|
Total RSUs Held |
|
Susan Athey(1)
|
|
— |
|
|
— |
|
|
Faiz Ahmad |
|
— |
|
|
10,183 |
|
|
Allan Landon |
|
— |
|
|
18,866 |
|
|
Timothy Mayopoulos |
|
— |
|
|
6,212 |
|
|
Patricia McCord(2)
|
|
— |
|
|
— |
|
|
John C. (Hans) Morris |
|
120,758 |
|
|
6,212 |
|
|
Kathryn Reimann |
|
— |
|
|
10,183 |
|
|
Erin Selleck |
|
— |
|
|
18,866 |
|
|
Michael Zeisser |
|
— |
|
|
9,401 |
|
(1) Ms.
Athey resigned from the Board and all Committees of the Board
effective June 2, 2022.
(2) Ms.
McCord resigned from the Board and all Committees of the Board
effective September 30, 2022.
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2023 PROXY STATEMENT | EXECUTIVE OFFICERS |
EXECUTIVE OFFICERS
Executive Officers
The following table identifies certain information about our
current executive officers. Each executive officer serves at the
discretion of our Board and holds office until his or her successor
is duly appointed or until his or her earlier resignation or
removal. There are no family relationships among any of our
directors or executive officers.
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Name |
|
Age |
|
Position |
|
Scott Sanborn |
|
53 |
|
Chief Executive Officer |
|
Andrew LaBenne |
|
49 |
|
Chief Financial Officer |
|
Annie Armstrong |
|
45 |
|
Chief Risk Officer |
|
Ronnie Momen |
|
55 |
|
Chief Consumer Banking Officer |
|
Brandon Pace |
|
50 |
|
Chief Administrative Officer and Corporate Secretary |
For biographical information regarding Mr. Sanborn, please refer to
the section titled “Information Regarding Our Directors”
above.
Andrew LaBenne
has served as our Chief Financial Officer since September 2022.
From July 2022 to September 2022, Mr. LaBenne served as our
Executive Vice President, Finance. From April 2021 to May 2022, Mr.
LaBenne served as Executive Vice President and Chief Financial
Officer of Bakkt Holdings, Inc. (formerly Bakkt Holdings, LLC) and
was responsible for all finance, investor relations and enterprise
risk functions. From April 2015 to April 2021, Mr. LaBenne was
Chief Financial Officer of Amalgamated Financial Corp. From August
2013 until April 2015, Mr. LaBenne was Chief Financial Officer of
Business Banking for JPMorgan Chase & Co. Earlier Mr. LaBenne
spent 17 years at Capital One Financial in various senior positions
in operations, marketing and finance. Mr. LaBenne holds a
bachelor’s degree in engineering from the University of Michigan
and an M.B.A. from the University of Virginia.
Annie Armstrong
has served as our Chief Risk Officer since March 2020. From
September 2018 to March 2020, Ms. Armstrong served as Global Head
of Financial Risk at Uber Technologies, Inc. From October 2007 to
September 2018, Ms. Armstrong served in various capacities at KPMG,
including as Partner, FinTech Practice Leader from September 2015
to September 2018. Ms. Armstrong holds a B.S. degree in Integrated
Science and Technology from James Madison University.
Ronnie Momen
has served as our Chief Consumer Banking Officer since November
2020. From July 2018 to November 2020, Mr. Momen served as our
Chief Lending Officer. From September 2017 to March 2018, Mr. Momen
served as Chief Credit Officer of GreenSky, Inc. From November 2015
to September 2017, Mr. Momen served as Executive Vice President,
Head of Credit Risk, Consumer Credit Solutions at Wells Fargo &
Company. From 1998 to September 2015, Mr. Momen served in various
positions at HSBC Holdings, including the last three years as
Executive Vice President, Americas Head of Risk for Retail Banking
& Wealth Management. Mr. Momen holds a B.A. in engineering and
management science from the University of Cambridge.
Brandon Pace
has served as our Chief Administrative Officer and Corporate
Secretary since November 2020. From March 2019 to November 2020,
Mr. Pace served as our General Counsel and Corporate Secretary. Mr.
Pace previously served as our Interim General Counsel from December
2018 to February 2019 and Senior Vice President of Legal from
December 2016 to November 2018. From April 2010 to December 2016,
Mr. Pace served in various legal positions at eBay, Inc., which for
many years owned what is now PayPal Holdings, Inc., most recently
as Vice President, Deputy General Counsel. Prior to joining eBay,
Inc., Mr. Pace spent years in private practice at a number of
international law firms representing technology companies. Mr. Pace
holds a B.A. in history from Brigham Young University and a J.D.
from George Washington University.
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LENDINGCLUB CORPORATION
| 28
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2023 PROXY STATEMENT | EXECUTIVE COMPENSATION – COMPENSATION
DISCUSSION AND ANALYSIS |
EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
Overview
This section describes our executive compensation philosophy,
objectives and design, our compensation-setting process, our
executive compensation components and the decisions made in 2022
for our named executive officers (“NEOs”), who were the following
during 2022:
•Scott
Sanborn, our Chief Executive Officer;
•Andrew
LaBenne, our Chief Financial Officer;
•Annie
Armstrong, our Chief Risk Officer;
•Ronnie
Momen, our Chief Consumer Banking Officer;
•Brandon
Pace, our Chief Administrative Officer and Corporate Secretary;
and
•Thomas
Casey, our former Chief Financial Officer.
The compensation provided to our NEOs for 2022 is set forth in
detail in the Summary Compensation Table and other tables and the
accompanying footnotes, and the narrative in this
section.
Compensation Philosophy and Principles
To successfully execute on our strategy and continue our mission to
improve the financial health of millions of Americans, we must hire
and retain a highly talented team of professionals with deep
experience in technology and financial services to build new
products, engage our members, and manage and grow our business. We
also expect our executive team to possess and demonstrate
exceptional leadership, innovative thinking and prudent
risk management. Because we operate in a highly competitive market
for talent, our compensation program must be designed to retain our
top talent in the face of well-funded, aggressive competitors for
talent.
In developing our compensation program, the Compensation Committee
reviews market trends and compensation practices with the
assistance of its third-party compensation consultant. FW Cook has
been retained by the Compensation Committee to assist the
Compensation Committee and management to assess and calibrate our
executive pay levels and relative mix of cash and equity
compensation relative to public company market norms. The
Compensation Committee evaluates our executive compensation program
at least annually and more frequently if circumstances change
related to our business objectives and the competitive environment
for talent.
Central to our compensation philosophy is to incentivize and reward
the achievement of strategic and financial goals of the Company and
correlate compensation to stockholder returns over the longer term.
To that end, we believe that competitive compensation packages
should include a combination of base salaries, annual cash bonus
opportunities and long-term incentive opportunities in the form of
equity awards that are earned over a multi-year period. We approach
the design and implementation of our executive compensation program
with emphasis on the following principles:
•recruit
and retain an exceptional executive team;
•incentivize
and reward the achievement of strategic and financial goals of the
Company, with an emphasis on long-term goals;
•utilize
compensation elements that are directly linked to achievement of
corporate objectives, stockholder returns and individual
performance; and
•align
the interests of our executives with those of our other
stockholders.
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LENDINGCLUB CORPORATION
| 29
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2023 PROXY STATEMENT | EXECUTIVE COMPENSATION – COMPENSATION
DISCUSSION AND ANALYSIS |
Stockholder Engagement & Feedback
Our Board believes it is important to maintain an open dialogue
with stockholders to understand their views on the Company, its
strategy and its governance and compensation practices. Therefore,
we engage with stockholders regularly and solicit feedback annually
on our compensation and governance practices. Consistent with prior
years, members of our management team participated in these
conversations, and stockholders were also offered the opportunity
to speak with a member of our Board.
This outreach cycle, we filed stockholder outreach presentation
materials with the SEC in January 2023. In early 2023, we actively
reached out to stockholders representing, in aggregate, an
estimated 50% of our then outstanding shares and held meetings with
those that requested a discussion, including with the governance
departments of some of our largest institutional stockholders. Some
stockholders declined our invitation for a discussion citing a lack
of questions or concerns. In addition to our annual stockholder
outreach on governance and compensation practices, we maintain
ongoing dialogue with many of our stockholders through our investor
relations program. In total, since January 1, 2022, we had
conversations with stockholders holding, in aggregate, an estimated
46% of our outstanding shares.
Overall, the stockholders we engaged with expressed support for our
strategy and compensation and governance practices, including our
efforts to declassify the Board and remove the supermajority voting
standard. Stockholders further recognized the inherent social good
of the Company’s business model and welcomed the Company’s
disclosures on ESG matters. Certain stockholders inquired about the
cadence of the Company’s review of its ESG disclosures and
supported the Company’s commitment to incrementally evolve and
enhance its ESG disclosures. Some stockholders also encouraged the
Company to explore more leveraged compensation programs to further
incentivize and reward management for outperformance scenarios, as
well as explore diversifying the PBRSU program to include an
ambitious, but attainable, multi-year operating metric to
supplement the existing TSR metric.
Importantly, stockholders also generally expressed support for our
proposal to amend and restate our 2014 Equity Incentive Plan, as
well as our accompanying commitment to reduce dilution and adopt
various best practices. In particular, stockholders noted that the
proposal was thoughtful and appreciated the Company’s transparency
and the self-awareness it reflected. With respect to dilution,
stockholders recognized the significant steps the Company has taken
to date and welcomed the commitment to significantly reduce
dilution from the Company’s compensation programs over time.
Further, stockholders appreciated that equity compensation is a
fundamental component of the Company’s ability to deliver market
levels of compensation and that abruptly shifting to and increasing
cash compensation to offset unavailability of equity compensation
would be disadvantageous in the current economic climate and may
also adversely impact the Company’s ability to attract and retain
the human capital necessary to execute and advance its strategy.
With respect to the timing of the proposal, stockholders recognized
that the sooner the Company is provided more time to use its
existing share reserve, the more expeditiously and systematically
it can begin taking measures to reduce the dilution from its equity
compensation program.
Finally, while some stockholders expressed a preference for an
equity incentive plan that does not contain an evergreen feature,
all stockholders we spoke with appreciated that the Company’s
proposal does not include an extension of the evergreen feature and
acknowledged that the Company is entitled to the final remaining
evergreen tranche in 2024 per the terms of the existing equity
incentive plan.
Further details regarding the proposed amendment and restatement of
our 2014 Equity Incentive Plan can be found in Proposal Six of this
Proxy Statement, beginning on page 70.
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LENDINGCLUB CORPORATION
| 30
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2023 PROXY STATEMENT | EXECUTIVE COMPENSATION – COMPENSATION
DISCUSSION AND ANALYSIS |
Enhancements to Performance-Based Restricted Stock Unit
Program
In 2019, we engaged in a robust stockholder outreach effort and, in
response to stockholder feedback, extensively revised our
performance-based restricted stock unit (“PBRSU”) program in 2020.
Despite the overwhelmingly positive say-on-pay vote outcomes in
2020 and 2021, we continue to solicit and engage in discussions
with our stockholders.
Although the feedback since 2020 has been substantially more
limited (reflecting the positive reception to the changes in 2020),
the Board has continued to enhance our executive compensation and
governance practices. Below is a summary of the enhancements made
to the PBRSU program since 2020. The program was and continues to
be a focus area for our stockholders and feedback on the current
structure of the program from stockholders has been overwhelmingly
positive. We closely monitor and evaluate the structure of our
PBRSU program and will continue doing so as the Company and the
fintech industry matures and evolves.
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LENDINGCLUB CORPORATION
| 31
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2023 PROXY STATEMENT | EXECUTIVE COMPENSATION – COMPENSATION
DISCUSSION AND ANALYSIS |
Executive Compensation Aligned with Corporate Results
We believe that our compensation approach supports our objective of
focusing on performance-based compensation, reflecting an
opportunity for financial upside based on company and individual
performance and no or reduced payouts when we do not meet our
performance goals. Our emphasis on equity awards provides a direct
link between stockholder interests and the interests of our
executive officers, thereby motivating our executive officers to
focus on increasing our value over the long term. Below is a
summary of our 2022 executive compensation program.
2022 Executive Compensation Program
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Element |
Form |
Description |
Performance Link |
|
Base Salary |
Cash |
Salaries are competitive and appropriate based on the scope, size
and complexity of our business, and represent the only element of
our compensation program that is not performance-based |
Target Annual
Cash Bonus |
Cash |
Cash bonuses reward our executive officers for achieving
pre-defined annual financial and operational goals that support our
long-term business strategy |
Total revenue
and
GAAP consolidated net income,
with no payouts if threshold performance not met; final amounts may
be adjusted to reflect individual performance
|
Target
Equity-Based Compensation |
RSUs |
Long-term equity aligns compensation with stockholders’ long-term
interests and promotes retention |
Stock price performance over a three-year vesting
period |
|
PBRSUs |
Long-term performance-based equity aligns compensation with
stockholder returns
|
PBRSUs earned only if relative total stockholder return (“TSR”)
thresholds are met over a three-year performance period, with
target performance at the 55th
percentile
Maximum achievement cap of 125% of target; cap becomes 100% of
target if absolute TSR is negative and relative TSR is below the
75th
percentile
|
Pay Outcomes Demonstrate Strong Alignment between Pay and
Performance
Our orientation towards performance-based compensation provides a
direct link between stockholder interests and the interests of our
executive officers and is intended to result in a reduction from
target compensation in the event our performance goals are not met.
The below graphic shows the composition of our CEO’s target
compensation in 2022 and the percent that is considered
performance-based, demonstrating strong alignment in our
compensation structure between pay and performance.
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LENDINGCLUB CORPORATION
| 32
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2023 PROXY STATEMENT | EXECUTIVE COMPENSATION – COMPENSATION
DISCUSSION AND ANALYSIS |
Compensation-Setting Process
Role of Management.
The Compensation Committee looks to our CEO to make preliminary
recommendations regarding compensation for our executive officers
other than himself because of his daily involvement with our
executive team. As to the CEO, the Compensation Committee works
closely with the Committee’s independent compensation consultant,
our Chief People Officer and our legal department to gather data on
competitive market practices and to evaluate potential
modifications to our compensation program. No executive officer
participates directly in the final deliberations or determinations
regarding his or her own compensation package.
Role of Our Compensation Committee.
Our Compensation Committee oversees all aspects of our compensation
program for executive officers, including base salaries, annual
cash bonus opportunities and payouts under our annual bonus plan,
and the size and design (including the achievement of performance
objectives where applicable) of equity awards. The Compensation
Committee is also responsible for determining the compensation for
our CEO and making recommendations to the Board regarding
non-employee director compensation. During 2022, our Compensation
Committee held 6 meetings and acted by unanimous written
consent 5 times.
Compensation Governance.
Our Compensation Committee seeks to ensure sound executive
compensation practices to adhere to our pay-for-performance
philosophy while appropriately managing risk, supporting retention
and aligning our compensation with the creation of long-term value
for our stockholders. During 2022, our Compensation
Committee:
•was
comprised solely of independent directors under the NYSE listing
standards;
•conducted
an annual review and approved our compensation strategy;
and
•retained
discretion on annual bonus payouts and certain other compensation
arrangements to enable it to respond to unforeseen events and
adjust compensation as appropriate.
Role of Compensation Consultant.
During 2022, FW Cook provided the following services:
•advised
on our non-employee director compensation policies and market
practices among publicly-traded companies; and
•advised
on our executive compensation policies and market practices among
publicly-traded companies.
FW Cook did not provide any services to us other than the services
described above. In December 2022, the Compensation Committee
assessed the independence of FW Cook pursuant to SEC and NYSE rules
and concluded that no conflict of interest exists that would
prevent FW Cook from independently advising the Compensation
Committee.
Use of Comparative Market Data
The Compensation Committee seeks to compensate our executive
officers at a level that allows us to successfully retain the best
possible talent to manage and grow our business, and drive
productivity and efficiency. In setting executive compensation, the
Compensation Committee periodically assesses how compensation for
our executive officers compares against executives in similar
positions at a group of peer companies. Generally, as compared to
our peer set, our compensation is less weighted toward cash
compensation and more weighted toward equity compensation. Our
weighting of cash and equity, including our allocation towards
equity and between RSUs and PBRSUs, has been shared with and
supported by our stockholders.
In addition to considering compensation data in making compensation
decisions, the Compensation Committee also considers the
criticality and scope of responsibility of each executive officer,
our current practice of maintaining appropriate differentiation in
target compensation among our executive officers, as well as the
CEO’s and Compensation Committee’s assessment of each executive
officer’s performance and impact on the organization. The
Compensation Committee believes that the level of target
compensation provided to our NEOs was appropriate to attract and
retain the exceptional talent required to lead the Company,
especially as a regulated banking institution and in the highly
competitive San Francisco Bay Area labor market.
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LENDINGCLUB CORPORATION
| 33
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2023 PROXY STATEMENT | EXECUTIVE COMPENSATION – COMPENSATION
DISCUSSION AND ANALYSIS |
As previously disclosed in the stockholder outreach materials filed
with the SEC in January 2023, the Compensation Committee conducted
a full review of our peer group in 2022. Specifically, in early
Fall 2022, our Compensation Committee selected the following
companies to constitute the Company’s executive compensation peer
group:
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Affirm Holdings, Inc. |
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Live Oak Bancshares, Inc. |
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Avantax, Inc. (formally Blucora, Inc.) |
|
MoneyLion, Inc. |
|
Axos Financial, Inc. |
|
Open Lending Corp. |
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Banc of California, Inc. |
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Preferred Bank |
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Blend Labs, Inc. |
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Silvergate Capital Corporation |
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Domo, Inc. |
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SoFi Technologies, Inc. |
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Enova International, Inc. |
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The Bancorp, Inc. |
|
Green Dot Corporation |
|
TriCo Bancshares |
|
LendingTree, Inc. |
|
Upstart Holdings, Inc. |
The Compensation Committee decided to focus its selection among
companies in the banking and fintech sectors. The Compensation
Committee considered public companies, with particular attention to
several fintech companies that recently became publicly traded,
whose business is based in the United States and whose shares are
listed on a national securities exchange in the United States,
because compensation practices vary widely internationally.
Further, the Compensation Committee considered the assets, revenue,
revenue growth, net income and market capitalization of these
companies, with a focus on companies with significant operations in
the San Francisco Bay Area to reflect local conditions and demand
for talent. The Compensation Committee also considered the
comparability of our business model, employee count and operational
complexity. In its final selection, our Compensation Committee
believed it appropriate to select peer companies with financial
metrics both above and below our own, with the Company placing
between the 50th and 75th percentiles, at the time of selection, on
a majority of the metrics considered. Below is a summary of the
changes to our peer group.
As reflected above, when reviewing and updating the peer group in
2022, the Compensation Committee decided to remove a number of
regional banks and add a number of consumer-focused online-oriented
banks and newly public companies in the fintech industry to better
reflect our business model and the companies with whom we compete
with for talent. Accordingly, the allocation of fintech and
non-bank financial companies within our peer group increased from 4
companies, or 25% of the peer group, to 11 companies, or 61% of the
peer group. The Compensation Committee continued to include a
number of banks in our peer group to reflect our operating and
regulatory environment. Finally, the
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LENDINGCLUB CORPORATION
| 34
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2023 PROXY STATEMENT | EXECUTIVE COMPENSATION – COMPENSATION
DISCUSSION AND ANALYSIS |
Compensation Committee removed all non-fintech technology companies
to better represent the technology sector that the Company operates
and competes within. The allocation of peer companies among
industries is as follows:
In March 2023, Silvergate Capital Corporation announced its intent
to wind down operations and liquidate Silvergate Bank. The
Compensation Committee has not yet determined whether to select
another peer company in place of Silvergate Capital Corporation.
Our Compensation Committee is committed to conducting periodic
reviews of our peer group, typically once every other year, and
expects to next conduct a full review of our peer group in
2024.
Role of Stockholder Advisory Vote on Executive
Compensation
At our 2022 annual meeting of stockholders,
we held a non-binding advisory vote on the compensation of our
NEOs, commonly referred to as a “say-on-pay” vote. Approximately
95% of the votes cast by stockholders, excluding abstentions and
broker non-votes, were voted in favor of our say-on-pay proposal.
Our Compensation Committee is appreciative of the 2022 say-on-pay
vote outcome, and considers the results of the say-on-pay votes as
well as any other feedback from stockholders in structuring our
executive compensation program and making individual compensation
decisions. In particular, as discussed in the section entitled
“Stockholder Engagement & Feedback” above on page 30, we
recently solicited feedback from stockholders representing, in
aggregate, an estimated 50% of our then outstanding shares to,
among other things, understand their perspectives on our current
executive compensation program. The Compensation Committee will
consider the outcome of future say-on-pay votes as we evolve our
executive compensation philosophy, objectives and
design.
Executive Compensation Elements
Elements of Executive Compensation.
Our 2022 NEO compensation packages include:
•base
salary;
•annual
cash bonus opportunity; and
•equity-based
compensation in the form of RSUs and PBRSUs.
We believe that our compensation mix supports our objective of
focusing on “at-risk” compensation having significant financial
upside based on stockholder return and both Company and individual
performance. We expect to continue to emphasize equity awards
because of the direct link that equity compensation provides
between stockholder interests and the interests of our executive
officers, thereby motivating our executive officers to focus on
increasing value over the long term.
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LENDINGCLUB CORPORATION
| 35
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2023 PROXY STATEMENT | EXECUTIVE COMPENSATION – COMPENSATION
DISCUSSION AND ANALYSIS |
Base Salary.
We believe that competitive base salaries are a necessary element
of overall compensation in order to attract and retain highly
qualified executive officers. While we believe that compensation
for the executive team should be weighted towards long-term equity
compensation, we recognize the need to broadly align salaries with
our peers and the companies we compete with for talent. As we have
grown and recruited new executive officers for key roles, we have
made competitive adjustments. We believe that the base salaries we
offer are appropriate for a publicly traded company based in the
San Francisco Bay Area and given the sophistication and complexity
of our business.
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|
|
Name |
|
2022 Annualized Base Salary(1)
|
|
Scott Sanborn |
|
$ |
500,000 |
|
|
Andrew LaBenne |
|
$ |
425,000 |
|
|
Annie Armstrong |
|
$ |
350,000 |
|
|
Ronnie Momen |
|
$ |
425,000 |
|
|
Brandon Pace |
|
$ |
350,000 |
|
|
Thomas Casey |
|
$ |
425,000 |
|
(1) As
of December 31, 2022.
The Compensation Committee reviews base salaries on at least an
annual basis and may adjust them from time to time, if needed, to
reflect changes in market conditions, or other factors. In 2022,
Ms. Armstrong received an increase of $40,000 to her base salary
and Mr. Pace received an increase of $25,000 to his base salary.
These increases reflect individual performance and market
conditions, as well as expanded responsibilities for Mr.
Pace.
Annual Cash Bonuses.
We typically use cash bonuses to reward our executive officers,
including NEOs, for achievement of our annual financial and
operational goals. In 2022, our Compensation Committee utilized the
quantitative performance metrics disclosed in the Company’s
publicly announced financial guidance for 2022, which were total
revenue and GAAP consolidated net income. Target levels of
performance for each metric were set at the high end of the
Company’s publicly announced guidance and therefore required strong
in-year performance and significant year-over-year
increases.
The funding of the Company-wide annual cash bonus program is based
on the achievement of performance metrics, with the Compensation
Committee retaining discretion to adjust total funding either above
or below the otherwise pre-established funding curve. The
allocation of the total funding of the annual cash bonus program to
individuals (i.e., individual payouts), including those for NEOs,
are discretionary and reflect individual achievement during the
year. Therefore actual individual payments may be greater or less
than the total funding level of the program.
Our Compensation Committee believed that the achievement of the
performance metrics would require excellent leadership, effective
management and a clear focus on driving and achieving results. The
following table details the quantitative metrics in the 2022 annual
cash bonus program, as well as actual achievement. Actual
achievement with respect to Total Revenue was 98.9% of target and
with respect to GAAP Consolidated Net Income was 193.1% of target.
Combined actual achievement was 146% of target, which was well in
excess of the 120% achievement level necessary to yield maximum
funding under the program and therefore could have supported the
Committee exercising discretion to fund the program at a higher
level. However, the Committee did not exercise any discretion in
funding the 2022 annual cash bonus program, and therefore the
program was funded at 125% of target, which was the pre-established
maximum. As noted above, all individual payments under the annual
cash bonus program are discretionary and reflect individual
achievement during the year, and therefore may be different than
the 125% total funding level.
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LENDINGCLUB CORPORATION
| 36
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2023 PROXY STATEMENT | EXECUTIVE COMPENSATION – COMPENSATION
DISCUSSION AND ANALYSIS |
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2022 Annual Cash Bonus Program - Achievement
Table(1)
|
|
Measure / Weighting(2)
|
Threshold Performance |
Satisfactory Performance |
Target Performance |
Above Target Performance |
Maximum Performance |
Actual Achievement |
Total Revenue
(50%) |
$0.9 billion |
$0.96 billion |
$1.2 billion |
$1.32 billion |
$1.44 billion |
$1.187 billion
(98.9% of target performance)
|
GAAP Consolidated Net Income
(50%) |
$112.5 million |
$120 million |
$150 million |
$165 million |
$180 million |
$289.7 million
(193.1% of target performance)
|
|
Funding Percentage |
50% |
80% |
100% |
110% |
125% |
125% |
(1) Straight-line
interpolation for achievement between: (i) threshold performance
and satisfactory performance, (ii) satisfactory performance
and target performance, (iii) target performance and above
target performance, and (iv) above target performance and
maximum performance. The program is not funded if threshold
performance is not met.
(2) Performance
of each metric is calculated individually, then combined to arrive
at a blended performance. Such blended performance is then plotted
against the payout curve to determine the payout.
Individual Performance Measures.
We expect a high level of performance from each of our executive
officers in carrying out his or her respective responsibilities and
each executive officer is evaluated based on his or her overall
performance. Our CEO evaluates each executive officer’s individual
performance (other than his own) and compensation level and, for
purposes of determining annual cash bonus payouts, makes a
recommendation to our Compensation Committee. The Compensation
Committee ultimately determines the individual performance for all
NEOs. The impact of individual performance on an individual NEO’s
bonus amount can modify the amount otherwise payable based on
actual corporate achievement. The maximum upward discretionary
adjustment is 50% for a total of 150% of the target bonus
opportunity amount; however, there is no limitation on the downward
discretionary adjustment (i.e., the Compensation Committee retains
the discretion to pay an individual NEO zero bonus regardless of
corporate achievement).
For 2022, the NEOs showed strong leadership in integrating the
Radius business, leveraging our banking capabilities to deliver
record financial results, navigating a challenging inflationary and
record-breaking increasing interest rate environment, and
positioning the business for sustained growth and
profitability.
Annual Cash Bonuses for the 2022 Performance Period
Based on performance against the pre-defined financial metrics
described above and in recognition of their significant individual
contributions in furthering the Company’s performance and strategy,
all of our NEOs received a payment under the annual incentive plan
at the actual corporate funding level of 125% (i.e., the
Compensation Committee did not apply any discretion (upwards or
downwards) on the individual bonus payments to our NEOs based on
their individual performance).
The following table sets forth the 2022 annual cash bonuses paid in
the first quarter of 2023 to each of our NEOs:
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Name |
|
Eligible Salary ($) |
|
Bonus Target (%) |
|
Bonus Target ($) |
|
Bonus Achievement (%) |
|
Total Bonus Payout ($) |
|
Scott Sanborn |
|
500,000 |
|
150 |
|
750,000 |
|
125 |
|
937,501 |
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Andrew LaBenne |
|
182,396 |
|
85 |
|
155,037 |
|
125 |
|
193,796 |
|
|
Annie Armstrong |
|
365,000 |
|
75 |
|
273,750 |
|
125 |
|
342,188 |
|
|
Ronnie Momen |
|
425,000 |
|
85 |
|
361,250 |
|
125 |
|
451,563 |
|
|
Brandon Pace |
|
368,750 |
|
75 |
|
276,563 |
|
125 |
|
345,704 |
|
|
Thomas Casey |
|
425,000 |
|
85 |
|
361,250 |
|
125 |
|
451,563 |
|
The Compensation Committee reviews bonus targets under the annual
cash bonus program on an annual basis and may adjust them from time
to time to reflect changes in market conditions, or other factors.
In 2022, the Company conducted a review of target bonus opportunity
levels across various job grades and raised target bonus
opportunity levels for a number of job grades to reflect market
conditions. In connection with this review, Ms. Armstrong and
Messrs. Momen, Pace and Casey each received a ten-percentile point
increase to their target bonus opportunity. Further, in 2022, Mr.
Sanborn
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LENDINGCLUB CORPORATION
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2023 PROXY STATEMENT | EXECUTIVE COMPENSATION – COMPENSATION
DISCUSSION AND ANALYSIS |
received a fifty-percentile point increase to his target bonus
opportunity.
Equity Compensation
Typically, most of our executive officers’ target total direct
compensation is delivered through equity awards. This approach
aligns our executive team’s contributions with our stockholders’
long-term interests, attracts executives of the highest caliber and
retains them for the long term. In granting annual equity awards,
the Compensation Committee considers, among other things, the
executive officer’s cash compensation, the need to create a
meaningful opportunity for reward predicated on the creation of
long-term stockholder value, our financial results, an evaluation
of the expected and actual performance of each executive officer,
his or her individual contributions and responsibilities and market
conditions.
2022 Equity Awards
Based on the results of our internal research and guidance from FW
Cook with respect to the practices of our peer group, the
recommendations of Mr. Sanborn (who did not participate in
discussions regarding his own equity compensation) and the
individual performance of each of the NEOs, the Compensation
Committee granted equity awards as part of our Company-wide annual
equity program, in the form of RSUs and PBRSUs (discussed in more
detail below), to each of our NEOs.
Restricted Stock Units
In 2022, all Company employees that were granted RSUs were provided
with an intended target value of the RSU award and the number of
RSUs subject to the award was determined by dividing the intended
target value of the RSU award by our trailing 30-day average stock
price as of the date of grant.
On March 13, 2022, the Compensation Committee granted 99,032
RSUs to Mr. Sanborn, 51,350 RSUs to Ms. Armstrong, 123,240 RSUs to
Mr. Momen, 51,350 RSUs to Mr. Pace and 102,700 RSUs to Mr. Casey.
These RSUs vest over three years, with 1/12th of the RSUs vesting
on May 25, 2022, and an additional 1/12th of the RSUs vesting
each quarter thereafter, subject to continued service through each
vesting date.
In connection with his hiring as Chief Financial Officer in 2022,
on August 31, 2022, the Compensation Committee granted 240,055 RSUs
to Mr. LaBenne. The RSU award vests over three years, with 1/3rd of
the RSUs vesting on August 25, 2023, and an additional 1/12th
of the RSUs vesting each quarter thereafter, subject to continued
service through each vesting date. The RSUs granted to Mr. LaBenne
were intended to recognize the critical role Mr. LaBenne is
expected to have in the future success of the Company and were made
in light of the competitive recruiting environment and significant
unvested equity that he forfeited to join the Company.
Performance-Based Restricted Stock Units
In 2022, all Company employees that were granted PBRSUs were
provided with an intended target value of the PBRSU award and the
number of target PBRSUs subject to the award was determined by
dividing the intended target value of the PBRSU award by the per
unit grant date fair value.
On March 13, 2022, the Compensation Committee granted 204,411
target PBRSUs to Mr. Sanborn, 37,166 target PBRSUs to Ms.
Armstrong, 89,198 target PBRSUs to Mr. Momen, 37,166 target PBRSUs
to Mr. Pace and 74,332 target PBRSUs to Mr. Casey. These awards
were structured so that the PBRSUs would become earned only to the
extent that certain pre-established performance targets were met
over the performance period. The performance metric for the 2022
PBRSUs was our TSR relative to the TSR of the companies comprising
the KBW Nasdaq Bank Index (the “KBW Index Companies”), with target
performance set at the 55th
percentile of the KBW Index Companies. The performance period for
the 2022 PBRSUs is January 1, 2022 to December 31, 2024. TSR is
defined as stock price performance measured using a 20-day trailing
volume weighted average price. If the performance targets are met
at the end of the performance period, the resulting earned PBRSUs
will immediately vest. Any unearned PBRSUs will be
forfeited.
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LENDINGCLUB CORPORATION
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2023 PROXY STATEMENT | EXECUTIVE COMPENSATION – COMPENSATION
DISCUSSION AND ANALYSIS |
Other Compensation Information
Return to Office Bonus Payment
Although the Company enables remote work, it also believes there
are benefits to culture and collaboration through its hybrid model
whereby employees voluntarily elect to return to the Company’s
office spaces for a few days a week, subject to certain safety
related conditions. To recognize and reward all employees that
elected to return to the Company’s office spaces, the Company
awarded such employees a one-time cash bonus of $1,000 in Q1 2022
(the “Return to Office Bonus”). Mr. Sanborn, Ms. Armstrong, Mr.
Momen, Mr. Pace and Mr. Casey were among the employees eligible
for, and that received, a Return to Office Bonus.
Andrew LaBenne Signing Bonus
The Compensation Committee awarded Mr. LaBenne a one-time cash
signing bonus in connection with the commencement of his employment
with the Company. The Compensation Committee deemed that the cash
bonus was warranted to secure Mr. LaBenne’s employment with the
Company given the critical role Mr. LaBenne is expected to have in
the future success of the Company and in light of the competitive
recruiting environment.
Thomas Casey Post-Service Vesting
Each of Mr. Casey’s equity awards granted in and since 2019,
provide for up to an additional year of vesting following a
termination of service, subject to certain criteria, including a
minimum number of years of age and service with the Company and
certain transition assistance. In the case of PBRSUs for which his
termination of service occurs during a performance period, Mr.
Casey is entitled to a pro-rated portion of the earned PBRSU shares
determined by adding the additional vesting credit to actual time
served during the performance period, and based upon actual
achievement of the underlying performance metric(s) upon completion
of the performance period. In connection with Mr. Casey’s
retirement, the Compensation Committee determined that Mr. Casey
satisfied the pre-established criteria, and therefore Mr. Casey
remains eligible, per the original terms of his equity awards, to
vest into a maximum of 415,540 shares following his
termination of service on January 3, 2023.
Benefits Programs
Our employee benefits programs, including our 401(k) plan and
health and well-being programs, are designed to provide a
competitive level of benefits to our employees, including our
executive officers and their families. We adjust our employee
benefit programs as needed based on regular monitoring of
applicable laws and practices and the competitive market. Our
executive officers are entitled to participate in the same employee
benefit plans, and on the same terms and conditions, as all other
full-time employees.
Perquisites and Other Personal Benefits
Currently, we do not view perquisites or other personal benefits as
a significant component of our executive compensation program.
Accordingly, we do not generally provide perquisites to our
executive team. In the future, we may provide perquisites or other
personal benefits in limited circumstances, such as where we
believe it is appropriate to assist an individual executive in the
performance of his or her duties, to make our executive team more
efficient and effective and for recruitment, motivation or
retention purposes.
Employment Agreements
We have entered into employment agreements with each of the NEOs.
These agreements provide for “at-will” employment and generally
include the NEO’s initial base salary, an initial equity award and
an indication of eligibility for an annual cash incentive award
opportunity. These employment agreements also provide for payments
upon a qualifying termination of employment, including in
connection with a change in control of our Company. We believe that
entering into these arrangements will help our executives maintain
continued focus and dedication to their responsibilities to help
maximize stockholder value if there is a potential transaction that
could involve a change in control of our Company. For a summary of
the material terms and conditions of these agreements, see
“Executive Compensation – Employment Agreements,”
below.
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LENDINGCLUB CORPORATION
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2023 PROXY STATEMENT | EXECUTIVE COMPENSATION – COMPENSATION
DISCUSSION AND ANALYSIS |
280G Excise Taxes and 409A Deferred Compensation
We have not provided or committed to provide any NEO with a
gross-up or other reimbursement for tax amounts the executive might
pay pursuant to Section 280G or Section 409A of the Internal
Revenue Code. Section 280G and related sections of the Internal
Revenue Code provide that an executive officer and certain persons
who hold significant stockholder interests and certain other
service providers could be subject to significant additional taxes
if they receive payments or benefits in connection with a change in
control that exceeds certain limits, and that we or our successor
could lose a deduction on the amounts subject to the additional
tax. Section 409A of the Internal Revenue Code also imposes
additional significant taxes on the individual in the event that an
executive officer, director or service provider of certain types
receives “deferred compensation” that does not meet the
requirements of Section 409A of the Internal Revenue
Code.
Accounting Considerations
We account for stock-based compensation in accordance with FASB ASC
Topic 718
Compensation – Stock Compensation,
which requires us to recognize compensation expense for share-based
payments. The Compensation Committee regularly considers the
accounting implications of significant compensation decisions,
including taking into account FASB ASC Topic 718 in determining the
amounts of equity compensation awards granted to executives and
employees.
Compensation Risk Assessment
Our management team evaluates and actively mitigates risks that may
exist relating to our compensation plans, practices and policies
for all employees, including our NEOs. Management assesses all of
our executive, sales and broad-based compensation plans to
determine if any provisions or practices create undesired or
unintentional risk of a material nature. This risk assessment
process includes a review of plan design, including business
drivers and performance measures. Incentive compensation plan
design varies across our business based on differing goals
established for particular business functions. Incentive
compensation targets are reviewed annually and adjusted as
necessary to align with our company performance goals and overall
compensation to ensure an appropriate balance between fixed and
variable pay components and between short- and long-term
incentives. Our management has concluded that these policies and
practices do not create risk that is reasonably likely to have a
material adverse effect on us.
Additional Governance Measures
Clawback Policy.
In September 2017, the Board adopted an Incentive Recoupment Policy
(the “Clawback Policy”), which was enhanced in December 2019. The
Clawback Policy provides the Board the right to recoup certain
executive incentive compensation in the event of an accounting
restatement of the Company’s consolidated financial statements
resulting from material non-compliance with any financial reporting
requirements under the securities laws. Incentive compensation that
may be subject to the Clawback Policy includes any compensation
that is granted, earned or vested based wholly or in part upon the
attainment of any financial reporting measure. In December 2019,
the Clawback Policy was enhanced by covering instances of
management fraud or misconduct that result in significant
reputational harm unrelated to a financial restatement. The Company
will further revise the Clawback Policy as necessary to comply with
pending changes to the NYSE listing standards to effectuate the
SEC’s recently adopted rules on clawback policies.
Stock Ownership Guidelines.
The Compensation Committee adopted stock ownership guidelines in
December 2017 and enhanced the guidelines in December 2019. Under
the guidelines, the CEO should hold equity (vested shares and/or
shares underlying RSU awards) with a value of six times base
salary; the CFO should hold equity (vested shares and/or shares
underlying RSU awards) with a value of three times base salary; and
all other Section 16 executives should hold equity (vested
shares and/or shares underlying RSU awards) with a value of two
times base salary. Executives are permitted five years from the
later of the adoption of the enhanced guidelines or the date of
hiring to meet the holding requirements. Prior to meeting the
holding requirements, such executives are not permitted to sell
more than fifty percent of the after-tax value from any equity
vesting event. All executives are in compliance with this policy,
and either meet the suggested ownership levels currently or have
additional time to accumulate equity to meet the ownership
levels.
Hedging and Pledging Policy.
Our insider trading policy prohibits directors, officers, and other
employees from engaging in transactions in publicly-traded options
(such as puts and calls) and other derivative securities relating
to our common stock. This policy prohibits short sales and extends
to cover any hedging or similar transaction designed
to
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LENDINGCLUB CORPORATION
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2023 PROXY STATEMENT | EXECUTIVE COMPENSATION – COMPENSATION
DISCUSSION AND ANALYSIS |
decrease the risks associated with holding our securities. In
addition, our officers and directors are prohibited from pledging
any of our securities as collateral for a loan and from holding any
of our securities in a margin account.
Option Repricing Policy.
Although we have discontinued the use of stock options, a number of
stock options remain outstanding and certain of such stock options
have per share exercise prices in excess of the current per share
price of our common stock. Although we have no intention to reprice
these outstanding underwater stock options, in response to
stockholder feedback,
in December 2019, we amended our stock plans to require a
stockholder vote to approve repricing any outstanding stock
option.
Gross Up and Minimum Vesting Period Policies:
In December 2019, we adopted a number of policies intended to be
responsive to stockholder feedback encouraging the Company to
evolve certain compensation related policies.
In addition to those described above, we adopted: (i) a policy
requiring that all new hire employee equity awards have a minimum
vesting cliff of at least 1-year, subject to certain limited
exceptions, and (ii) a policy prohibiting tax gross-ups for Section
16 executives, other than for imputed income in connection with a
relocation.
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LENDINGCLUB CORPORATION
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2023 PROXY STATEMENT | EXECUTIVE COMPENSATION – COMPENSATION
TABLES |
Compensation Tables
Summary Compensation Table
The following table provides information regarding the compensation
earned by each of our NEOs during the year ended December 31,
2022, and, to the extent required under the SEC executive
compensation disclosure rules, the years ended December 31,
2021 and 2020:
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Name and Principal Position |
|
Year |
|
Salary ($) |
|
Bonus ($) |
|
Stock Awards(1)
|
|
Option Awards ($) |
|
Non-Equity Incentive Plan Compensation ($)(2)
|
|
All Other Compensation ($)(3)
|
|
Total ($) |
|
Scott Sanborn |
|
2022 |
|
500,000 |
|
|
1,000 |
|
|
3,472,723 |
|
|
— |
|
|
937,501 |
|
|
7,826 |
|
|
4,919,050 |
|
|
Chief Executive Officer |
|
2021 |
|
500,000 |
|
|
— |
|
|
5,805,143 |
|
|
— |
|
|
625,007 |
|
|
7,949 |
|
|
6,938,099 |
|
|
|
|
2020 |
|
400,000 |
|
|
— |
|
|
5,000,004 |
|
|
— |
|
|
500,000 |
|
|
6,920 |
|
|
5,906,924 |
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|
Andrew LaBenne |
|
2022 |
|
182,396 |
|
|
183,200 |
|
|
3,137,519 |
|
|
— |
|
|
193,796 |
|
|
— |
|
|
3,696,911 |
|
|
Chief Financial Officer |
|
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Annie Armstrong(4)
|
|
2022 |
|
365,000 |
|
|
1,000 |
|
|
1,106,229 |
|
|
— |
|
|
342,188 |
|
|
7,760 |
|
|
1,822,177 |
|
|
Chief Risk Officer |
|
2021 |
|
335,000 |
|
|
— |
|
|
1,426,691 |
|
|
— |
|
|
272,192 |
|
|
5,480 |
|
|
2,039,363 |
|
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|
2020 |
|
209,375 |
|
|
150,000 |
|
|
3,000,005 |
|
|
— |
|
|
173,007 |
|
|
— |
|
|
3,532,387 |
|
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|
Ronnie Momen |
|
2022 |
|
425,000 |
|
|
1,000 |
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|
2,654,945 |
|
|
— |
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|
451,563 |
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|
5,000 |
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3,537,508 |
|
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Chief Consumer Banking Officer |
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2021 |
|
395,000 |
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|
50,000 |
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|
2,536,309 |
|
|
— |
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|
370,318 |
|
|
5,000 |
|
|
3,356,627 |
|
|
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2020 |
|
299,792 |
|
|
— |
|
|
1,600,008 |
|
|
— |
|
|
234,813 |
|
|
5,000 |
|
|
2,139,613 |
|
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|
|
Brandon Pace |
|
2022 |
|
368,750 |
|
|
1,000 |
|
|
1,106,229 |
|
|
— |
|
|
345,704 |
|
|
8,652 |
|
|
1,830,335 |
|
|
Chief Administrative Officer and Corporate Secretary |
|
2021 |
|
350,000 |
|
|
— |
|
|
1,585,197 |
|
|
— |
|
|
284,380 |
|
|
8,294 |
|
|
2,227,871 |
|
|
|
|
2020 |
|
291,667 |
|
|
— |
|
|
1,400,006 |
|
|
— |
|
|
227,500 |
|
|
5,473 |
|
|
1,924,646 |
|
|
|
|
|
|
|
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|
|
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|
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|
|
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|
Thomas Casey(5)
|
|
2022 |
|
425,000 |
|
|
1,000 |
|
|
2,212,458 |
|
|
— |
|
|
451,563 |
|
|
5,000 |
|
|
3,095,021 |
|
|
Former Chief Financial Officer |
|
2021 |
|
425,000 |
|
|
— |
|
|
3,170,393 |
|
|
— |
|
|
398,443 |
|
|
5,005 |
|
|
3,998,841 |
|
|
|
2020 |
|
354,167 |
|
|
100,000 |
|
|
3,000,009 |
|
|
— |
|
|
318,750 |
|
|
6,230 |
|
|
3,779,156 |
|
(1)The
amounts reported in this column do not reflect the amounts actually
received by our NEOs. The amounts instead reflect the aggregate
grant date fair value of RSUs and/or PBRSUs, as applicable, granted
during the applicable fiscal year, computed in accordance with the
FASB ASC Topic 718. Assumptions used in the calculations for RSUs
and PBRSUs granted during 2022 are included in “Note
16. Employee Incentive Plans”
to the Consolidated Financial Statements included in our Annual
Report. The amounts shown do not reflect that the awards are
vested/earned over a 3-year period and exclude the impact of
estimated forfeitures related to service-based vesting conditions.
The grant date fair value for RSUs is measured based on the closing
fair market value of our common stock on the date of grant. For Mr.
Sanborn, Ms. Armstrong, Mr. Momen, Mr. Pace and Mr. Casey, the
amounts reported for 2022 include the grant date fair value of
PBRSUs granted in March 2022, incorporating the probability of
achieving the performance conditions to which such PBRSUs are
subject to. Assuming the maximum level of performance is achieved
under the applicable performance measures for the PBRSU awards, the
grant date fair value of the PBRSU awards granted to Mr. Sanborn,
Ms. Armstrong, Mr. Momen, Mr. Pace and Mr. Casey is
$2,578,134, $468,756, $1,125,010, $468,756 and $937,512,
respectively. For more information regarding 2022 equity awards,
including the PBRSUs, see “Compensation Discussion and Analysis –
Executive Compensation Elements – Equity Compensation – 2021 Equity
Awards.”
(2)The
amounts reported in this column represent annual cash incentives
that were earned during the specified year and paid in the
following year. For more information regarding the awards for 2022,
see “Compensation Discussion and Analysis – Executive Compensation
Elements – Annual Cash Bonuses.”
(3)The
amounts reported in this column for 2022 include the
following:
(a)Matching
contributions made by the Company to the Company’s 401(k) savings
plan in the amount of $5,000 for each of Mr. Sanborn, Ms.
Armstrong, Mr. Momen, Mr. Pace and Mr. Casey;
(b)Parking
benefits for Mr. Sanborn, Ms. Armstrong and Mr. Pace;
and
(c)Well-fitness
benefits for Messrs. Sanborn and Pace, for their participation in a
wellness program available to all Company employees.
(4)Ms.
Armstrong was a named executive officer in 2020, but not
2021.
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2023 PROXY STATEMENT | EXECUTIVE COMPENSATION – COMPENSATION
TABLES |
(5)Mr.
Casey retired from his role as Chief Financial Officer of the
Company and resigned from his position on the Board, each effective
August 31, 2022. Mr. Casey remained an employee of the Company in a
non-executive capacity from September 1, 2022 through January 3,
2023.
Grants of Plan-Based Awards in 2022
The following table sets forth certain information regarding grants
of plan-based awards to our NEOs during 2022.
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|
|
|
|
|
|
|
|
|
|
Estimated Future Payouts Under Non-Equity Incentive Plan
Awards
(1)
|
|
Estimated Future Payouts Under Equity Incentive Plan Awards
(2)
|
|
|
|
Name |
Award Type |
Grant Date |
|
Threshold
($) |
Target
($) |
Maximum
($) |
|
Threshold
(#) |
Target
(#) |
Maximum
(#) |
All Other Stock Awards: Number of Shares of Stock |
Grant Date Fair Value of Stock and Option Awards
($)(3)
|
|
Scott Sanborn |
Cash |
N/A |
|
375,000 |
|
750,000 |
|
937,500 |
|
|
|
|
|
— |
|
— |
|
|
|
RSUs |
3/13/22 |
|
— |
|
— |
|
— |
|
|
|
|
|
99,032 |
|
1,410,216 |
|
|
|
PBRSUs |
3/13/22 |
|
— |
|
— |
|
— |
|
|
102,206 |
|
204,411 |
|
255,514 |
|
— |
|
2,062,507 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Andrew LaBenne |
Cash |
N/A |
|
77,518 |
|
155,037 |
|
193,796 |
|
|
|
|
|
— |
|
— |
|
|
RSUs |
8/31/22 |
|
— |
|
— |
|
— |
|
|
|
|
|
240,055 |
|
3,137,519 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annie Armstrong |
Cash |
N/A |
|
136,875 |
|
273,750 |
|
342,188 |
|
|
|
|
|
— |
|
— |
|
|
|
RSUs |
3/13/22 |
|
— |
|
— |
|
— |
|
|
|
|
|
51,350 |
|
731,224 |
|
|
|
PBRSUs |
3/13/22 |
|
— |
|
— |
|
— |
|
|
18,583 |
|
37,166 |
|
46,458 |
|
— |
|
375,005 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ronnie Momen |
Cash |
N/A |
|
180,625 |
|
361,250 |
|
451,563 |
|
|
|
|
|
— |
|
— |
|
|
RSUs |
3/13/22 |
|
— |
|
— |
|
— |
|
|
|
|
|
123,240 |
|
1,754,938 |
|
|
PBRSUs |
3/13/22 |
|
— |
|
— |
|
— |
|
|
44,599 |
|
89,198 |
|
111,498 |
|
— |
|
900,008 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brandon Pace |
Cash |
N/A |
|
138,281 |
|
276,563 |
|
345,703 |
|
|
|
|
|
— |
|
— |
|
|
|
RSUs |
3/13/22 |
|
— |
|
— |
|
— |
|
|
|
|
|
51,350 |
|
731,224 |
|
|
|
PBRSUs |
3/13/22 |
|
— |
|
— |
|
— |
|
|
18,583 |
|
37,166 |
|
46,458 |
|
— |
|
375,005 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thomas Casey |
Cash |
N/A |
|
180,625 |
|
361,250 |
|
451,563 |
|
|
|
|
|
— |
|
— |
|
|
RSUs |
3/13/22 |
|
— |
|
— |
|
— |
|
|
|
|
|
102,700 |
|
1,462,448 |
|
|
PBRSUs |
3/13/22 |
|
— |
|
— |
|
— |
|
|
37,166 |
|
74,332 |
|
92,915 |
|
— |
|
750,010 |
|
(1)Awards
are granted under the Annual Cash Bonus program. As disclosed in
“Compensation Discussion and Analysis – Executive Compensation
Elements – Cash Bonuses” above, the non-equity incentive plan for
2022 consisted of two quantitative metrics that are individually
calculated and jointly contribute towards the total funding of the
Annual Cash Bonus program. “Target” is a dollar value based on the
NEO’s target bonus percentage and base salary in 2022 as adjusted
for any in-year salary adjustments, which is used to calculate
eligible wages under the Annual Cash Bonus program. The threshold
amount for the award is 50% of target for all NEOs and the maximum
amount for the award is 150% of target for all NEOs. Actual
non-equity incentive plan awards received for the fiscal 2022
period was $937,500, $193,796, $342,188, $451,563, $345,703 and
$451,562 for Mr. Sanborn, Mr. LaBenne, Ms. Armstrong, Mr. Momen,
Mr. Pace and Mr. Casey, respectively. For more information
regarding the achievement of these non-equity incentive plan
awards, see “Compensation Discussion and Analysis – Executive
Compensation Elements – Annual Cash Bonuses.”
(2)Awards
are granted under the 2014 Equity Incentive Plan. The indicated
threshold, target and maximum amounts correspond to the number of
PBRSUs that would be earned in the event that specified threshold,
target and maximum levels, respectively, of performance were
achieved. For more information regarding the PBRSUs, see
“Compensation Discussion and Analysis – Executive Compensation
Elements – Equity Compensation – 2022 Equity Awards –
Performance-Based Restricted Stock Units.”
(3)The
amounts reported in this column represent the aggregate grant date
fair value of each award, without regard to forfeitures and
computed in accordance with FASB ASC Topic 718. Assumptions used in
the calculation of this amount are included in “Note
16. Employee Incentive Plans”
to the Consolidated Financial Statements included in our Annual
Report. Note that the amounts reported in this column reflect the
accounting cost for these awards and do not correspond to the
actual economic value that may be received by the NEO. The grant
date fair value for RSUs is measured based on the closing fair
market value of our common stock on the date of grant. The amount
reported for 2022 includes the grant date fair value of PBRSUs
granted in 2022, incorporating the probability of achieving the
performance conditions to which such PBRSUs are subject to.
For more information regarding the PBRSUs and RSUs, see
“Compensation Discussion and Analysis – Executive Compensation
Elements – Equity Compensation – 2022 Equity Awards.”
|
|
|
|
|
|
|
|
|
|
LENDINGCLUB CORPORATION
| 43
|
|
|
|
|
|
|
|
|
|
|
2023 PROXY STATEMENT | EXECUTIVE COMPENSATION – COMPENSATION
TABLES |
2022 Outstanding Equity Awards at Fiscal Year End
The following table sets forth certain information regarding
outstanding equity awards held by our NEOs that remained
outstanding as of December 31, 2022.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards |
|
Stock Awards |
|
|
|
|
|
|
Time-Based |
|
Performance-Based |
|
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
($)(1)
|
|
Equity Incentive Plan Awards: Number of Unearned Shares or Units or
Other Rights That Have Not Vested
(#)(2)
|
|
Equity Incentive Plan Awards: Market or Payout Value of Unearned
Shares, Units or Other Rights That Have Not Vested
($) |
|
Scott Sanborn |
|
02/24/2014 |
|
270,188 |
|
(3) |
— |
|
|
24.95 |
|
|
02/24/2024 |
|
|
|
|
|
|
|
|
|
|
|
02/26/2016 |
|
234,588 |
|
(3) |
— |
|
|
42.05 |
|
|
02/26/2026 |
|
|
|
|
|
|
|
|
|
|
|
03/03/2016 |
|
11,899 |
|
(3) |
— |
|
|
47.80 |
|
|
03/03/2026 |
|
|
|
|
|
|
|
|
|
|
|
02/24/2019 |
|
|
|
|
|
|
|
|
|
9,985 |
|
(4) |
87,868 |
|
|
|
|
|
|
|
|
02/26/2020 |
|
|
|
|
|
|
|
|
|
67,479 |
|
(5) |
593,815 |
|
|
|
|
|
|
|
|
07/06/2020 |
|
|
|
|
|
|
|
|
|
110,177 |
|
(6) |
969,558 |
|
|
|
|
|
|
|
|
07/06/2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
295,608 |
|
(7) |
|
2,601,346 |
|
|
|
|
03/09/2021 |
|
|
|
|
|
|
|
|
|
58,790 |
|
(8) |
517,352 |
|
|
|
|
|
|
|
|
03/21/2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
172,450 |
|
(9) |
|
1,517,560 |
|
|
|
|
03/13/2022 |
|
|
|
|
|
|
|
|
|
74,274 |
|
(10) |
653,611 |
|
|
|
|
|
|
|
|
03/13/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
102,206 |
|
(11) |
|
899,413 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Andrew LaBenne |
|
08/31/2022 |
|
|
|
|
|
|
|
|
|
240,055 |
|
(12) |
|
2,112,484 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annie Armstrong |
|
05/26/2020 |
|
|
|
|
|
|
|
|
|
142,664 |
|
(13) |
1,255,443 |
|
|
|
|
|
|
|
|
07/06/2020 |
|
|
|
|
|
|
|
|
|
36,058 |
|
(6) |
317,310 |
|
|
|
|
|
|
|
|
07/06/2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
96,745 |
|
(7) |
|
851,356 |
|
|
|
|
03/09/2021 |
|
|
|
|
|
|
|
|
|
27,436 |
|
(8) |
241,437 |
|
|
|
|
|
|
|
|
03/21/2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
28,220 |
|
(9) |
|
248,336 |
|
|
|
|
03/13/2022 |
|
|
|
|
|
|
|
|
|
38,513 |
|
(10) |
338,914 |
|
|
|
|
|
|
|
|
03/13/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
18,583 |
|
(11) |
|
163,530 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ronnie Momen |
|
02/24/2019 |
|
|
|
|
|
|
|
|
|
5,991 |
|
(4) |
52,721 |
|
|
|
|
|
|
|
02/26/2020 |
|
|
|
|
|
|
|
|
|
33,590 |
|
(5) |
295,591 |
|
|
|
|
|
|
|
07/06/2020 |
|
|
|
|
|
|
|
|
|
19,231 |
|
(6) |
169,233 |
|
|
|
|
|
|
|
07/06/2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
51,598 |
|
(7) |
|
454,062 |
|
|
|
03/09/2021 |
|
|
|
|
|
|
|
|
|
48,774 |
|
(8) |
429,211 |
|
|
|
|
|
|
|
03/21/2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
50,168 |
|
(9) |
|
441,478 |
|
|
|
03/13/2022 |
|
|
|
|
|
|
|
|
|
92,430 |
|
(10) |
813,384 |
|
|
|
|
|
|
|
03/13/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
44,599 |
|
(11) |
|
392,471 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brandon Pace |
|
02/24/2019 |
|
|
|
|
|
|
|
|
|
5,692 |
|
(4) |
50,090 |
|
|
|
|
|
|
|
|
02/26/2020 |
|
|
|
|
|
|
|
|
|
29,391 |
|
(5) |
258,641 |
|
|
|
|
|
|
|
|
07/06/2020 |
|
|
|
|
|
|
|
|
|
16,828 |
|
(6) |
148,086 |
|
|
|
|
|
|
|
|
07/06/2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
45,148 |
|
(7) |
|
397,302 |
|
|
|
|
03/09/2021 |
|
|
|
|
|
|
|
|
|
30,484 |
|
(8) |
268,259 |
|
|
|
|
|
|
|
|
03/21/2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
31,355 |
|
(9) |
|
275,924 |
|
|
|
|
03/13/2022 |
|
|
|
|
|
|
|
|
|
38,513 |
|
(10) |
338,914 |
|
|
|
|
|
|
|
|
03/13/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
18,583 |
|
(11) |
|
163,530 |
|
|
|
|
|
|
|
|
|
|
|
LENDINGCLUB CORPORATION
| 44
|
|
|
|
|
|
|
|
|
|
|
2023 PROXY STATEMENT | EXECUTIVE COMPENSATION – COMPENSATION
TABLES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards |
|
Stock Awards |
|
|
|
|
|
|
Time-Based |
|
Performance-Based |
|
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 or Units or
Other Rights That Have Not Vested
(#)(2)
|
|
Equity Incentive Plan Awards: Market or Payout Value of Unearned
Shares, Units or Other Rights That Have Not Vested
($) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thomas Casey |
|
09/26/2016 |
|
207,669 |
|
(3) |
|
|
30.55 |
|
|
09/26/2026 |
|
|
|
|
|
|
|
|
|
|
02/24/2019 |
|
|
|
|
|
|
|
|
|
8,986 |
|
(4) |
79,077 |
|
|
|
|
|
|
|
02/26/2020 |
|
|
|
|
|
|
|
|
|
50,384 |
|
(5) |
443,379 |
|
|
|
|
|
|
|
07/06/2020 |
|
|
|
|
|
|
|
|
|
36,058 |
|
(6) |
317,310 |
|
|
|
|
|
|
|
07/06/2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
96,745 |
|
(7) |
|
831,356 |
|
|
|
03/09/2021 |
|
|
|
|
|
|
|
|
|
48,774 |
|
(8) |
429,211 |
|
|
|
|
|
|
|
03/21/2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
62,710 |
|
(9) |
|
551,848 |
|
|
|
03/13/2022 |
|
|
|
|
|
|
|
|
|
34,233 |
|
(10) |
301,250 |
|
|
|
|
|
|
|
03/13/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
37,166 |
|
(11) |
|
327,061 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Calculated
based on the closing price of $8.80 of our common stock on December
30, 2022.
(2) Represents
the maximum, target and threshold level of performance for PBRSUs
granted in 2020, 2021 and 2022, respectively.
(3) Fully
vested.
(4) Becomes
fully vested after four years, with 1/16th vesting on May 25, 2019,
and 1/16th vesting quarterly thereafter.
(5) Becomes
fully vested after four years, with 1/16th vesting on May 25, 2020
and 1/16th vesting quarterly thereafter.
(6) Represents
an earned portion of PBRSUs granted in 2020.
Becomes fully vested after one year, with 1/4th vesting on May 25,
2021, and 1/4th vesting quarterly thereafter.
(7) Represents
the outstanding but unearned portion of PBRSUs granted in
2020.
(8) Becomes
fully vested after three years, with 1/12th vesting on May 25,
2021, and 1/12th vesting quarterly thereafter.
(9) Represents
the outstanding but unearned PBRSUs granted in 2021.
(10) Becomes
fully vested after three years, with 1/12th vesting on May 25,
2022, and 1/12th vesting quarterly thereafter.
(11) Represents
the outstanding but unearned PBRSUs granted in 2022. For more
information, see “Compensation Discussion and Analysis – Executive
Compensation Elements – Equity Compensation – 2022 Equity Awards –
Performance-Based Restricted Stock Units.”
(12) Becomes
fully vested after three years, with 1/3rd vesting on August 25,
2023, and 1/12th vesting quarterly thereafter.
(13) Becomes
fully vested after four years, with 1/4th vesting on May 25,
2021, and 1/16th vesting quarterly thereafter.
|
|
|
|
|
|
|
|
|
|
LENDINGCLUB CORPORATION
| 45
|
|
|
|
|
|
|
|
|
|
|
2023 PROXY STATEMENT | EXECUTIVE COMPENSATION – COMPENSATION
TABLES |
2022 Option Exercises and Stock Vested
The following table sets forth for each of our NEOs the number of
shares of our common stock acquired and the aggregate value
realized upon the exercise of stock options and the vesting of
stock awards during 2022.
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Option Awards |
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Stock Awards |
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Name |
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Number of Shares Acquired on Exercise (#) |
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Value Realized on Exercise ($)(1)
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Number of Shares Acquired on Vesting (#) |
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Value Realized on Vesting ($)(2)
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Scott Sanborn(3)
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80,333 |
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755,132 |
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451,585 |
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5,783,926 |
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Andrew LaBenne |
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— |
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— |
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— |
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— |
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Annie Armstrong |
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— |
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— |
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238,067 |
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3,121,841 |
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Ronnie Momen |
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— |
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— |
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212,535 |
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2,852,056 |
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Brandon Pace |
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— |
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— |
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137,155 |
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1,821,002 |
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Thomas Casey |
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— |
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— |
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280,145 |
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3,733,035 |
|
(1) The
value realized on exercise represents the difference between the
aggregate market price of the shares underlying the options
exercised on the date of exercise and the aggregate price of the
option.
(2) The
value realized upon the vesting of an RSU or PBRSU represents the
aggregate market price of the shares of our common stock on the
date of vesting.
(3) Excludes
53,983 RSUs that were cash settled for a total cash settlement
amount of $746,585.
CEO Pay Ratio Disclosure
In accordance with Item 402(u) of Regulation S-K, the Company is
providing the following information for fiscal 2022:
•The
median of total compensation of all employees, excluding the CEO:
$139,053;
•The
annual total compensation of the CEO: $4,919,049; and
•The
ratio of CEO total compensation to median employee total
compensation: 36 to 1.
Our CEO pay ratio information is a reasonable good faith estimate
calculated in a manner consistent with the SEC pay ratio rules and
methods for disclosure. In order to determine the median employee
from a compensation perspective, the Company examined annualized
cash compensation (salary, wages and cash bonuses) in the 2022
calendar year for all employees, excluding our CEO, employed as of
December 31, 2022 (“Determination Date”). On the Determination
Date, our employee population consisted of 1,588 individuals, all
of whom were located in the United States. This population
consisted of our full-time, part-time, and temporary
employees.
The Company determined that its median employee from a compensation
perspective serves in a bank operations role. While the methodology
we used to select the median employee remained the same as last
year and there has not been a change in our employee population or
compensation arrangements that we believe would significantly
change this disclosure, we selected a new median employee this year
to ensure the pay ratio accurately reflects the compensation of our
median employee based on our 2022 employee population.
To identify the “median employee,” we utilized the amount of base
salary, wages and cash bonuses our employees received, as reflected
in our payroll records through the Determination Date and
annualized such amounts for any individual hired during 2022. Once
we identified our median employee, we combined all of the elements
of such employee’s compensation for 2022 to determine the median
employee total compensation in accordance with the requirements of
Item 402(c)(2)(x) of Regulation S-K and compared such total
compensation to the total compensation of our CEO, as reported in
the Summary Compensation Table.
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LENDINGCLUB CORPORATION
| 46
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2023 PROXY STATEMENT | EXECUTIVE COMPENSATION – PAY VERSUS
PERFORMANCE DISCLOSURE |
Pay Versus Performance Disclosure
As required by Section 953(a) of the Dodd-Frank Wall Street Reform
and Consumer Protection Act, and Item 402(v) of Regulation S-K, we
are providing the following information about the relationship
between executive compensation actually paid and certain financial
performance of the Company. For further information concerning the
Company’s executive compensation philosophy, including how it
incorporates and aligns with the Company’s performance, refer to
“Executive Compensation – Compensation Discussion and
Analysis.”
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Pay Versus Performance Table |
|
Year |
Summary Compensation Table Total for PEO
($)(1)
|
Compensation Actually Paid to PEO
($)(2)
|
Average Summary Compensation Table Total for Non-PEO
NEOs
($)(3)
|
Average Compensation Actually Paid to Non-PEO NEOs
($)(2)
|
Value of Initial Fixed $100 Investment
Based On: |
|
|
|
Total Shareholder Return
($)(4)
|
Peer Group Total Shareholder Return
($)(4)
|
GAAP Net Income/(Loss)
($ millions)(5)
|
Total Revenue
($ millions)(5)
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|
(a) |
(b) |
(c) |
(d) |
(e) |
(f) |
(g) |
(h) |
(i) |
|
2022 |
4,919,050 |
(14,595,137) |
2,796,390 |
(3,135,491) |
69.73 |
88.96 |
289.7 |
1,187.2 |
|
2021 |
6,938,099 |
22,811,912
|
2,922,623 |
9,069,589
|
191.60 |
116.64 |
18.6 |
818.6 |
|
2020 |
5,906,924 |
6,487,065 |
2,882,104 |
2,944,255 |
83.68 |
86.37 |
(187.5) |
318.1 |
(1) The
dollar amounts reported in column (b) are the amounts of total
compensation reported for Mr. Sanborn (our Chief Executive Officer)
for each corresponding year in the “Total” column of the Summary
Compensation Table. See “Executive Compensation – Executive
Compensation Tables – Summary Compensation Table.”
(2) The
dollar amounts reported in column (c) and column (e) represent the:
(i) amount of “compensation actually paid” to Mr. Sanborn, our
Principal Executive Officer (“PEO”) calculated in accordance with
Item 402(v) of Regulation S-K, or (ii) average “compensation
actually paid” to the Company’s named executive officers (“NEOs”)
as a group, excluding our PEO, calculated in accordance with Item
402(v) of Regulation S-K. The names of each of the NEOs included
for purposes of calculating the average amounts in each applicable
year are as follows: (i) for 2022, Andrew LaBenne, Annie Armstrong,
Ronnie Momen, Brandon Pace and Thomas Casey, (ii) for 2021, Thomas
Casey, Valerie Kay, Ronnie Momen and Brandon Pace, and (iii) for
2020, Thomas Casey, Annie Armstrong, Bahman Koohestani, Ronnie
Momen and Steven Allocca. In accordance with the requirements of
Item 402(v) of Regulation S-K, the following adjustments were made
to total compensation for each year to determine the compensation
actually paid:
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|
Year |
PEO or Average of Non-PEO NEOs |
Reported Summary Compensation Table Total
($) |
Reported Value of Equity Awards
($)(a)
|
Equity Award Adjustments ($)(b)
|
Reported Change in the Actuarial Present Value of Pension
Benefits
($) |
Pension Benefits Adjustments ($) |
Compensation Actually Paid ($) |
|
2022 |
PEO |
4,919,050 |
(3,472,723) |
(16,041,463) |
— |
— |
(14,595,137) |
|
Average of Non-PEO NEOs |
2,796,390 |
(2,043,476) |
(3,888,405) |
— |
— |
(3,135,491) |
|
2021 |
PEO |
6,938,099 |
(5,805,143) |
21,678,956 |
— |
— |
22,811,912 |
|
Average of Non-PEO NEOs |
2,922,623 |
(2,179,648) |
8,326,614 |
— |
— |
9,069,589 |
|
2020 |
PEO |
5,906,924 |
(5,000,004) |
5,580,145 |
— |
— |
6,487,065 |
|
Average of Non-PEO NEOs |
2,882,104 |
(2,205,006) |
2,267,157 |
— |
— |
2,944,255 |
(a)The
grant date fair value of equity awards represents the total of the
amounts reported in the “Stock Awards” and “Option Awards” columns
in the Summary Compensation Table for the applicable
year.
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LENDINGCLUB CORPORATION
| 47
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|
2023 PROXY STATEMENT | EXECUTIVE COMPENSATION – PAY VERSUS
PERFORMANCE DISCLOSURE |
(b)The
equity award adjustments for each applicable year include the
addition (or subtraction, as applicable) of the following: (i) the
year-end fair value of any equity awards granted in the applicable
year that are outstanding and unvested as of the end of the year;
(ii) the amount of change as of the end of the applicable year
(from the end of the prior fiscal year) in fair value of any awards
granted in prior years that are outstanding and unvested as of the
end of the applicable year; (iii) for awards that are granted and
vest in the same applicable year, the fair value as of the vesting
date; (iv) for awards granted in prior years that vest in the
applicable year, the amount equal to the change as of the vesting
date (from the end of the prior fiscal year) in fair value; (v) for
awards granted in prior years that are determined to fail to meet
the applicable vesting conditions during the applicable year, a
deduction for the amount equal to the fair value at the end of the
prior fiscal year; and (vi) the dollar value of any dividends or
other earnings paid on stock or option awards in the applicable
year prior to the vesting date that are not otherwise reflected in
the fair value of such award or included in any other component of
total compensation for the applicable year. The amounts deducted or
added in calculating the equity award adjustments are as
follows:
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|
Year |
PEO or Average of Non-PEO NEOs |
Year End Fair Value of Equity Awards ($) |
Year over Year Change in Fair Value of Outstanding and Unvested
Equity Awards
($) |
Fair Value as of Vesting Date of Equity Awards Granted and Vested
in the Year
($) |
Year over Year Change in Fair Value of Equity Awards Granted in
Prior Years that Vested in the Year
($) |
Fair Value at the End of the Prior Year of Equity Awards that
Failed to Meet Vesting Conditions in the Year
($) |
Value of Dividends or other Earnings Paid on Stock or Option Awards
not Otherwise Reflected in Fair Value or Total Compensation
($) |
Total Equity Award Adjustments ($) |
|
2022 |
PEO |
1,591,858 |
(12,537,845) |
307,494 |
(5,402,970) |
— |
— |
(16,041,463) |
|
Average of Non-PEO NEOs |
999,347 |
(3,393,486) |
204,083 |
(1,698,349) |
— |
— |
(3,888,405) |
|
2021 |
PEO |
7,266,661 |
11,274,035 |
952,986 |
2,185,274 |
— |
— |
21,678,956 |
|
Average of Non-PEO NEOs |
3,001,312 |
3,410,557 |
679,442 |
1,235,303 |
— |
— |
8,326,614 |
|
2020 |
PEO |
8,082,527 |
(333,083) |
248,186 |
(1,186,322) |
(1,231,163) |
— |
5,580,145 |
|
Average of Non-PEO NEOs |
2,743,592 |
(168,179) |
94,200 |
(291,656) |
(110,800) |
— |
2,267,157 |
(3) The
dollar amounts reported in column (d) represent the average of the
amounts reported for the NEOs as a group, excluding our PEO, in the
“Total” column of the Summary Compensation Table in each applicable
year. The names of each of the NEOs included for purposes of
calculating the average amounts in each applicable year are as
follows: (i) for 2022, Andrew LaBenne, Annie Armstrong, Ronnie
Momen, Brandon Pace and Thomas Casey, (ii) for 2021, Thomas Casey,
Valerie Kay, Ronnie Momen and Brandon Pace, and (iii) for 2020,
Thomas Casey, Annie Armstrong, Bahman Koohestani, Ronnie Momen and
Steven Allocca.
(4) TSR
is cumulative (assuming $100 was invested on December 31, 2019) for
the measurement periods beginning on December 31, 2019 and ending
on December 31 of each of 2022, 2021 and 2020, respectively,
calculated in accordance with Item 201(e) of Regulation S-K. The
peer group for purposes of this table is the following published
industry index: KBW Nasdaq Bank Index.
(5) The
dollar amounts reported represent the amount of “Net income (loss)”
or “Total net revenue”, as applicable, reported in the Company’s
financial reports on Form 10-K.
Financial Performance Measures
We believe the below unranked list represents the most important
financial performance measures used by the Company to link
executive compensation actually paid to the Company’s NEOs, for the
most recently completed fiscal year.
Total revenue and GAAP consolidated net income were the two
measures in our 2022 annual cash bonus program. Relative TSR is the
performance metric used in our 2022 PBRSUs.
•Total
Revenue
•GAAP
Net Income
•Relative
TSR (the Company’s TSR as compared to the companies comprising the
KBW Nasdaq Bank Index)
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LENDINGCLUB CORPORATION
| 48
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|
2023 PROXY STATEMENT | EXECUTIVE COMPENSATION – PAY VERSUS
PERFORMANCE DISCLOSURE |
Relationship between Compensation Actually Paid and Company
Performance
Below are graphs showing the relationship of “compensation actually
paid” to our PEO and the average “compensation actually paid” to
our Non-PEO NEOs in 2022, 2021 and 2020 to (i) the TSR of the
Company and the KBW Nasdaq Bank Index, and (ii) the Company’s
GAAP net income and total revenue. As illustrated below, the
increase in “compensation actually paid” between 2020 and 2021 is
correlated to the appreciation in the Company’s stock price during
2021. Similarly, the decrease in “compensation actually paid”
between 2021 and 2022 is correlated to the depreciation in the
Company’s stock price during 2022. The Company believes that
correlation between “compensation actually paid” and TSR reflects
that a significant portion of the Company’s executive compensation
program is equity denominated.
Conversely, changes in “compensation actually paid” are
significantly less correlated to the Company’s GAAP net income and
total revenue, reflecting the relatively smaller quantum of
executive compensation based on the performance of those
measures.
Compensation Actually Paid vs. TSR
Compensation Actually Paid vs. GAAP Net Income and Total
Revenue
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LENDINGCLUB CORPORATION
| 49
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|
2023 PROXY STATEMENT | EXECUTIVE COMPENSATION – EMPLOYMENT
AGREEMENTS |
Employment Agreements
We have entered into employment agreements or offer letters with
each of our currently employed NEOs. These agreements provide for
at-will employment, a base salary and initial equity award in
amounts determined by our Compensation Committee, a cash bonus
based on a target percentage of the NEO’s then-current base salary
determined by our Compensation Committee and standard employee
benefit programs.
If Mr. Sanborn is terminated without cause or for good reason
within 12 months following a change in control, he will be
entitled to receive (i) a lump sum payment equal to 18 months
of his base salary (as in effect immediately prior to the change in
control or termination, whichever is greater), (ii) a lump sum
payment equal to the greater of 150% of his target bonus or most
recent actual bonus payout, (iii) 18 monthly cash payments
equal to the monthly COBRA premium at the time of his termination
and (iv) accelerated vesting with respect to all of his unvested
equity awards. If Mr. Sanborn is terminated without cause or for
good reason not within 12 months following a change in
control, he will be entitled to receive (i) a lump sum payment
equal to 12 months of his base salary, (ii) a lump sum payment
of the pro-rated amount of his bonus as if he had been employed
through the calendar year, to be determined in our sole discretion
and (iii) 12 monthly cash payments equal to the monthly COBRA
premium at the time of his termination.
If an NEO other than Mr. Sanborn is terminated without cause or
resigns with good reason within 12 months following a change
in control, he or she will be entitled to receive (i) a lump sum
payment equal to 12 months of the NEO’s base salary (as in
effect immediately prior to the change in control or termination,
whichever is greater), (ii) a lump sum payment equal to the greater
of 100% of the NEO’s target bonus or most recent actual bonus
payout, (iii) 12 monthly cash payments equal to the monthly
COBRA premium at the time of the NEO’s termination and (iv)
accelerated vesting with respect to all of the NEO’s unvested
equity awards. If an NEO other than Mr. Sanborn is terminated
without cause or for good reason not within 12 months
following a change in control, he or she will be entitled to
receive (i) a lump sum payment equal to six months of the NEO’s
base salary, (ii) a lump sum payment of the pro-rated amount of the
NEO’s bonus as if he or she had been employed through the calendar
year, to be determined in our sole discretion and (iii) six monthly
cash payments equal to the monthly COBRA premium at the time of the
NEO’s termination.
All payments upon termination are subject to the NEO’s return of
our property and release of claims against us. If the NEO’s
employment is terminated either by the Company for cause or by the
NEO without good reason, then he or she will not receive any
payments upon termination. Under the employment agreements, the
NEOs are also subject to covenants regarding confidentiality,
invention assignment and prohibition on solicitation of our
employees or independent contractors for a period of six months
following the termination of employment.
Under the employment agreements, “cause” means: (i) conviction in a
criminal proceeding involving fraud, embezzlement, bribery,
forgery, counterfeiting, extortion, dishonesty or moral turpitude,
or any felony or misdemeanor charge; (ii) any act or omission by
the NEO involving dishonesty, disloyalty or fraud; (iii) a breach
of fiduciary duty; (iv) substantial, willful or repeated disregard
of the lawful and reasonable directives of our Board or (other than
for the CEO) our CEO clearly communicated in writing to the NEO, if
not remedied within 30 days of the notice from us; (v) a
breach of any non-solicitation or other restrictive covenant set
forth in any agreement between the NEO and us, if not cured within
30 days of notice from us; (vi) gross negligence or willful
misconduct with respect to us or our customers, clients,
contractors or vendors; (vii) an order, ruling or determination by
a government body, court or self-regulatory organization that
imposes a bar or disqualification on the NEO’s employment with us;
(viii) violation of our policies against unlawful discrimination
and harassment; (ix) repeated alcohol or substance abuse while
performing services for us; or (x) abandonment or gross dereliction
of work duties.
Under the employment agreements, “change in control” means: (i) any
merger or consolidation of us with or into another entity (other
than any such merger or consolidation in which our stockholders
immediately prior to such merger or consolidation continue to hold
at least a majority of the voting power of the outstanding capital
stock or other ownership interests in the surviving corporation);
(ii) any sale, transfer or other disposition, in a single
transaction or series of related transactions, of all or
substantially all of our assets; or (iii) any other transaction or
series of related transactions pursuant to which a single person or
entity (or group of affiliated persons or entities) acquires from
us or our stockholders a majority of our outstanding voting power
or other ownership interest.
Under the employment agreements, for each currently employed NEO
other than Mr. Pace, “good reason” means: (i) a material diminution
in base compensation unless the base salary of a majority of other
employees at the same level as the NEO is also proportionately
reduced; (ii) a change in the geographic location at which the NEO
must perform services of
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LENDINGCLUB CORPORATION
| 50
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|
2023 PROXY STATEMENT | EXECUTIVE COMPENSATION – EMPLOYMENT
AGREEMENTS |
greater than 50 miles; or (iii) any other action or inaction that
constitutes a material breach by us of the employment agreement,
subject to certain exceptions. For Mr. Pace, in addition to the
matters described above, “good reason” also means a change in
circumstances such that he, while remaining the Company’s General
Counsel, is no longer the most senior legal officer of a publicly
traded corporation reporting directly to the CEO.
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LENDINGCLUB CORPORATION
| 51
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|
2023 PROXY STATEMENT | EXECUTIVE COMPENSATION – POTENTIAL PAYMENTS
UPON
TERMINATION OR CHANGE IN CONTROL |
Potential Payments Upon Termination or Change in
Control
Under the terms of the employment agreements that we entered into
with each of our NEOs, they are eligible to receive certain
benefits in connection with the termination of their employment,
depending on the circumstances, as further described
above.
Mr. Casey retired from his role as Chief Financial Officer of the
Company and resigned from his position on the Board, each effective
August 31, 2022. Mr. Casey remained an employee of the Company in a
non-executive capacity from September 1, 2022 through January 3,
2023. Per the original terms of his equity awards, in connection
with his retirement, Mr. Casey became eligible to vest into a
maximum of 415,540 RSUs and PBRSUs following his termination of
service on January 3, 2023. For more information on Mr. Casey’s
post-service vesting benefit, see “Compensation Discussion and
Analysis – Other Compensation Information – Thomas Casey
Post-Service Vesting.” None of our other NEOs are entitled to any
benefits in the event of a voluntary termination of employment or a
termination of employment due to death or disability.
The actual amounts that would be paid or distributed to our NEOs as
a result of a termination event occurring in the future may be
different than those set forth below as many factors will affect
the amount of any payments and benefits upon a termination of
employment. For example, some of the factors that could affect the
amounts payable include the NEO’s base salary and the market price
of our common stock at the time of the termination event.
Additionally, we or an acquirer may mutually agree with the NEOs on
severance terms that vary from those provided in pre-existing
agreements.
The tables below set forth the value of the benefits that each of
our NEOs would be entitled to receive upon a qualifying termination
event as of December 31, 2022, in accordance with SEC rules,
and is based on the closing price of $8.80 of our common stock on
December 30, 2022. As used in the tables below, “involuntary
termination” means termination without cause or for good reason, as
described above.
Scott Sanborn
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|
|
|
Involuntary Termination |
|
Benefit |
|
No Change in Control |
|
Change in Control |
|
Cash severance |
|
$ |
500,000 |
|
|
$ |
750,000 |
|
|
Bonus(1)
|
|
937,501 |
|
|
750,000 |
|
|
Health, dental and vision benefits |
|
20,152 |
|
|
30,228 |
|
|
Equity acceleration(2)
|
|
— |
|
|
8,219,658 |
|
|
Total potential severance payment |
|
$ |
1,457,653 |
|
|
$ |
9,749,886 |
|
(1) Represents
a cash bonus payment equal to Mr. Sanborn’s actual annual cash
bonus for the 2022 fiscal year outside a change in control, and
150% of Mr. Sanborn’s target annual cash bonus for the 2022 fiscal
year within a change in control.
(2) Represents
the intrinsic value (that is, the value based upon the market price
of our common stock on December 31, 2022, and, in the case of stock
options, minus the exercise price). With respect to Mr. Sanborn’s
outstanding PBRSU awards, the value disclosed includes the
acceleration value of 613,347 shares, which is the target number of
shares for such PBRSU awards.
Andrew LaBenne
|
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|
|
|
|
|
Involuntary Termination |
|
Benefit |
|
No Change in Control |
|
Change in Control |
|
Cash severance |
|
$ |
212,500 |
|
|
$ |
425,000 |
|
|
Bonus(1)
|
|
193,796 |
|
|
155,037 |
|
|
Health, dental and vision benefits |
|