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Message from Our President and CEO |
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Dear Stockholders, Colleagues, Customers and Partners:
PayPal was built to simplify money movement, and over the past 25 years, we have grown into the world’s largest two-sided open platform.1 Now, we are building on that foundation to create the next-generation commerce platform. With our scale, ubiquity, and data as key advantages, we are accelerating innovation and seizing new market opportunities.
A year ago, we made a strategic decision to narrow our focus, enhance execution, and reposition the business. I am proud of the progress the team made in 2024 and our return to profitable growth. The stage is set for continued momentum in the years to come.
In 2024, we reignited our innovation engine to address and solve our customers’ greatest challenges. We introduced new branded checkout experiences designed to make checkout even faster and more seamless across both desktop and mobile. We launched PayPal Everywhere, redefining our consumer value proposition and paving the way for consumers to choose PayPal for every payment, whether online or in-store. We introduced Fastlane, a game-changing guest checkout solution. We expanded the reach of PayPal Complete Payments, enabling more small businesses around the world to run and grow their operations. And we continued improving the Venmo experience by giving our users more of the capabilities they’ve been asking for, like scheduled send, Tap to Pay on iPhone for business profiles, and improved search.
PayPal is now the platform that leading brands want to collaborate with. Last year, we forged or strengthened significant partnerships with Adyen, Amazon, Fiserv, Shopify, and Meta to bring even more value to customers, scale innovation, and expand our reach. We are building on our leadership position in payments and commerce to improve the shopping experience for both consumers and businesses.
As we bring innovation to market and enhance our value proposition, we are driving increased selection of PayPal and Venmo. Total active accounts returned to growth in 2024, and we processed $1.7 trillion in payment volume, a 10% year-over-year increase. Global branded checkout volume growth was consistent at 6%, while branded checkout monthly active accounts went from stable to growing – up 2% last year to 142 million. Venmo exited the fourth quarter at 10% volume growth, accelerating by 2 points.
In summary, 2024 was a pivotal transition year for PayPal. We have positioned PayPal to compete and win and delivered strong results along the way.
Delivering the PayPal Commerce Platform
Today, we are on a mission to revolutionize commerce globally. That means radically changing the way consumers shop and merchants do business, both online and offline. To do that, we will leverage the strength of our two-sided network and scaled data vault to transform from a payments company into a commerce platform to power the global economy. This is our vision for the new PayPal. In 2025, we are laser-focused on four strategic imperatives to advance this vision:
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Win Checkout: Branded checkout remains our #1 priority. Last year we made improvements to create a best-in-class checkout experience. We will scale these innovations to provide rewarding shopping experiences for our consumers and drive increased conversion for our merchants. |
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Scale Omni: We are seeing strong momentum today with our omnichannel push, but we are just getting started. We launched PayPal Everywhere in September 2024, which is driving significant increases in PayPal debit card adoption and opening new categories of spend. This year, we will drive the adoption of new and rewarding ways to pay in-store, including in international markets. |
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Grow Venmo: We are building Venmo to be the money-moving app for the next generation. We are focused on improving the peer-to-peer payment experience and growing Venmo revenue by driving the adoption of monetized products like the Venmo Debit Card and Pay with Venmo. We will also continue to expand Pay with Venmo’s acceptance with major brands. While we are still in the early stages of monetizing Venmo, we have a proven playbook that resonates with customers and are confident in the steps we are taking to realize value from this important asset. |
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Network comparison versus fintech. |
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Message from Our Independent Board Chair |
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Dear PayPal Stockholders:
2024 was a year of successful transitions including key changes to our Board and leadership team that are driving PayPal’s continued growth and transformation into a multifaceted omnichannel platform. The Board is working closely with management to deliver durable, profitable growth for our stockholders and we remain encouraged by PayPal’s steady progress and strong performance.
Executive Leadership Transitions
In 2024, Alex continued to evolve PayPal’s executive team to ensure that we have the best leaders in place to drive the next chapter of our growth. In January of last year, we welcomed Suzan Kereere as President, Global Markets. Suzan is well-recognized for her accomplishments in digital transformation, sales optimization, front-line customer engagement, and profitable growth.
We are also pleased to have welcomed new executives to serve as Chief Technology Officer, Global Chief Risk Officer, Chief Investor Relations Officer, and Chief Corporate Affairs and Communications Officer. Our new executives bring a wealth of expertise from their experience in leadership roles at preeminent companies, including across the technology and financial industries. These appointments demonstrate our commitment to building the best team in the industry, and the Board and management remain focused on our robust talent development processes across the Company. The Board is excited and energized by the intensity and focus of these new executives, as they push forward critical projects across the platform.
Board Composition & Oversight
In July, I assumed the role of Chair as part of the Board’s thoughtful internal succession planning process. In addition, in 2024 we welcomed Carmine Di Sibio and in 2025 Joy Chik to our Board. Carmine previously served as Global Chairman and CEO of EY. Carmine’s demonstrated record of championing innovation and his extensive experience advising regulated financial companies bring invaluable insights to the Board. Joy currently serves as the President of Identity and Network Access at Microsoft and is responsible for leading the company’s multi-billion-dollar security business, Microsoft Entra. Joy’s extensive expertise in AI, digital transformation and cybersecurity makes her a valued addition to the Board.
We have an experienced, qualified, and engaged Board that possesses the right skillsets to effectively oversee management and our strategy as we enter the next stage of our growth. We remain committed to continuously evaluating our Board as PayPal evolves.
Stockholder Engagement
Robust, ongoing engagement with our stockholders is crucial to informing the Board’s decision-making process. Since our 2024 Annual Meeting, we’ve contacted investors representing approximately 62% of shares held by institutional investors and have engaged with investors holding approximately 39% of shares held by institutional investors. As part of these engagement efforts, I have personally met with investors representing 28% of shares held by institutional investors. In these candid, collegial, and highly informative conversations, we explored a variety of subjects, including board composition and oversight, responsible use of artificial intelligence, executive compensation, and human capital management. The Board takes investor feedback seriously, and it is an important input as we execute against our strategy. We look forward to continuing this important dialogue with our stockholders.
On behalf of our Board, thank you for your investment in PayPal. I look forward to discussing these developments further with you at the 2025 Annual Meeting on June 5th, which will be held via live webcast at www.virtualshareholdermeeting.com/PYPL2025.
Sincerely,
Enrique Lores
Independent Board Chair
April 21, 2025
Proxy Statement Summary
Executive Compensation Highlights
Executive Compensation Highlights
Our key guiding principle for executive compensation is to closely align the compensation of our executives with the creation of long-term value for our stockholders. We also recognize that the creation of long-term stockholder value begins with attracting exceptionally talented leaders to our Company. In late 2023 and into 2024, we transformed our leadership team, welcoming several new executives. We also made several enhancements to our incentive compensation plans to more closely align executive compensation with our evolving Company strategy, including to increase our focus on durable, profitable growth. Our 2024 incentive programs were designed to strike an appropriate balance between incentivizing profitable growth and stockholder value creation over short-term and long-term horizons.
To learn more about our executive compensation program, see the CD&A beginning on page 48 of this proxy statement.
Key Leadership Additions
The Compensation Committee took a thoughtful approach in structuring new hire awards to attract Suzan Kereere, our President, Global Markets; Diego Scotti, our Executive Vice President, General Manager, Consumer Group; and Aaron Webster, our Executive Vice President, Global Chief Risk Officer to join PayPal and to ensure strong alignment with our long-term performance and the interests of our stockholders. The offer letters provided to Ms. Kereere and Messrs. Scotti and Webster included two categories of compensation: (1) go-forward, ordinary course compensation arrangements and (2) special, non-recurring new hire awards. The non-recurring new hire awards were intended to incentivize Ms. Kereere and Messrs. Scotti and Webster to join PayPal’s leadership team. For each of Ms. Kereere and Mr. Webster, the non-recurring new hire awards were also intended to compensate them for a portion of the awards they forfeited in departing from their prior employer to join PayPal. The amounts and types of compensation for each of Ms. Kereere and Messrs. Scotti and Webster were determined carefully by the Compensation Committee, taking into consideration their experience, responsibilities, expertise, compensation at their prior employer, potential contributions to PayPal, their competitive opportunities, and market compensation for their role within PayPal’s compensation peer group.
To find additional details on new hire-related compensation for our named executive officers (“NEOs”), please see the CD&A section titled “Offer Letter Compensation for New NEOs” on page 50 of this proxy statement.
2024 Compensation Program Changes Informed by Investor Feedback
Informed by investor feedback, in January 2024, the Compensation Committee made enhancements to our incentive programs to strengthen pay for performance alignment, increase the focus on profitable growth, closely manage our burn rate (defined as the number of shares subject to equity awards granted during a given year divided by the basic weighted average number of shares of our common stock outstanding for that year), address historical challenges experienced in connection with setting long-term performance goals, and more closely align executive interests with those of our stockholders. In addition, in July 2024, the Compensation Committee approved amendments to our Executive Change in Control and Severance Plan (the “Executive Severance Plan”) to more closely align our executive severance benefits to market practices within PayPal’s compensation peer group and to streamline administration.
Enhancements to 2024 PayPal Annual Incentive Plan
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Rationale |
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| Redesigned the plan to fund the bonus pool based on Company performance and determine final employee payouts based on an individual performance modifier |
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Company-wide bonus pool and resulting employee bonus starting point are based on Company performance, strengthening pay and performance alignment; individual performance modifier provides for upwards or downwards differentiation where specifically warranted |
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| Updated metrics to transaction margin dollars and non-GAAP operating income (from revenue and non-GAAP operating margin) |
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More closely aligns performance goals to broader Company strategy, including additional focus on driving durable, profitable growth Additionally, beginning in 2024, our non-GAAP financial metric reporting (including non-GAAP operating income) now includes stock-based compensation expense |
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| Moved to 100% cash compensation for short-term incentive program (from a mix of cash and performance-based restricted stock units (“PBRSUs”)) |
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Better aligns actual payout with intended value to be delivered and reduces burn rate and dilution to stockholders |
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2025 Proxy Statement |
Proposal 1: Election of Directors
Proposal 1:
Election of Directors
Based upon a review of their skills, qualifications, expertise, and characteristics, the Board has nominated 11 of our current directors for election at the Annual Meeting, to serve until our 2026 Annual Meeting of Stockholders and until their successors are elected and qualified. Each director nominee is independent except Mr. Chriss, our President and CEO. Each of our current directors other than Mr. Di Sibio and Ms. Chik has been previously elected by our stockholders. Mr. Di Sibio was referred as a PayPal director candidate through our CEO and Ms. Chik was referred as a PayPal director candidate via a third party search firm.
As previously disclosed, Rodney Adkins has informed the Company that he will not stand for re-election as a director at the Annual Meeting. The Board anticipates that it will reduce the size of the Board to 11 directors effective immediately before the Annual Meeting.
We expect that each director nominee will be able to serve if elected. If any director nominee is unable or unwilling to serve at the time of the Annual Meeting, the current Board may identify a substitute nominee to fill the vacancy, reduce the size of the Board or leave a vacancy to fill at a later date.
Directors must be elected by a majority of the votes cast in uncontested elections, which has been our voting standard since we became an independent public company in 2015. This means that the number of votes cast “FOR” a director nominee must exceed the number of votes cast “AGAINST” that nominee. (For more information, see “Frequently Asked Questions – Voting Information” on page 100 of this proxy statement.) Each director has submitted an advance, contingent, irrevocable resignation that the Board may accept if stockholders do not elect or re-elect that director. After the certification of any such stockholder vote, the Governance Committee or a committee composed solely of independent directors that does not include the director who was not elected or re-elected will determine whether to accept the director’s resignation. We will publicly disclose any such decision and the rationale behind it.
Director Nominees
The Governance Committee is responsible for recommending to the Board the qualifications for Board membership and for identifying, assessing, and recommending qualified director candidates for the Board’s consideration. The Board’s membership qualifications and nomination procedures are set forth in the Governance Guidelines of the Board of Directors (“Governance Guidelines”). Nominees may be suggested by directors, management, stockholders, or a third-party firm.
The Governance Committee and the Board have evaluated each of the director nominees and concluded that it is in the best interests of the Company and its stockholders for each of these individuals to continue to serve as a director. The Board believes that each director nominee has a strong track record of being a responsible steward of stockholders’ interests and brings extraordinarily valuable insight, perspective, and expertise to the Board.
To ensure that the Board continues to evolve and be refreshed in a manner that serves the changing business and strategic needs of the Company, the Governance Committee annually reviews with the Board the applicable skills, qualifications, expertise, and characteristics of Board nominees in the context of the current Board composition and Company strategy and circumstances. The Governance Committee evaluates whether each director provides significant and meaningful contributions to the Board across a range of factors. These factors include:
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Highly relevant professional experience in payments, financial services, financial technology (“FinTech”), technology, innovation, global business, business development, strategy, legal, regulatory, government, cybersecurity, information security, finance, accounting, consumer, sales, marketing, brand management, human capital management and/or corporate sustainability and impact risk management matters; |
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Relevant senior leadership/CEO experience; |
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Experience and expertise that complement the skill sets of the other director nominees; |
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High degree of character and integrity and ability to contribute to strong Board dynamics; |
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Highly engaged and able to commit the time and resources needed to provide active oversight of PayPal and its management; |
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Sound business judgment; and |
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Commitment to enhancing stockholder value. |
As discussed below in “Focus on Board Refreshment and Composition,” in addressing the overall composition of the Board, the Governance Committee seeks a robust mix of skills, experiences and perspectives to optimize board effectiveness. In addressing the overall composition of the Board, the Governance Committee considers a wide range of characteristics to complement the skills, qualifications and expertise that directors bring to the Board.
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2025 Proxy Statement |
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Corporate Governance
Director Independence
Director Independence
Under the Nasdaq listing standards and our Governance Guidelines, the Board must consist of a majority of independent directors. Annually, each director completes a questionnaire designed to assist the Board in determining whether the director is independent, and whether members of the ARC Committee and the Compensation Committee satisfy additional SEC and Nasdaq independence requirements. The Board has adopted guidelines setting forth certain categories of transactions, relationships, and arrangements that it has deemed immaterial for purposes of determining independence.
Based on the review and recommendation by the Governance Committee, the Board analyzed the independence of each director and has determined that Mses. Chik, McGovern, Messemer, and Sarnoff and Messrs. Adkins, Christodoro, Di Sibio, Dorman, Lores, Moffett, and Yeary meet the standards of independence under the Nasdaq listing standards and the Governance Guidelines, including that each director is free of any relationship that would interfere with their individual exercise of independent judgment.
Our Governance Guidelines prohibit Company directors from serving as a director or as an officer of another company that may cause a significant conflict of interest. Our Governance Guidelines also provide that any director who has previously been determined to be independent must inform the Board Chair and our Corporate Secretary of any significant change in personal circumstances that may cause their status as an independent director to change, including a change in principal occupation, change in professional roles and responsibilities, status as a member of the board of another public company, or retirement, in each case including changes that may affect the continued appropriateness of Board or committee membership. In such situations, the Governance Committee makes a recommendation to the Board on the continued appropriateness of such director’s Board or committee membership(s).
Board Committees
The Board has three principal standing committees: the ARC Committee, the Compensation Committee and the Governance Committee. Each committee has a written charter that addresses, among other matters, the committee’s purposes and policy, composition and organization, duties and responsibilities and meetings. The committee charters are available in the governance section of our Investor Relations website at https://investor.pypl.com/governance. Each charter permits the applicable committee, in its discretion, to delegate all or a portion of its duties and responsibilities to a subcommittee or any member of the committee. Subject to applicable law, listing standards, and the terms of its charter, the Compensation Committee also may delegate duties and responsibilities to any officer(s) of the Company.
The Governance Committee, among other responsibilities, (1) identifies Board members qualified to fill vacancies on any committee of the Board and recommends that the Board appoint the identified member or members to the respective committee, taking into account any factors set forth in such committee’s charter and any other factors the Committee deems appropriate, including determining whether to fill such vacancy; (2) reviews changes in a director’s circumstances that may impact their independence, rise to the level of a significant conflict of interest, or affect the continued appropriateness of Board or committee membership, as described in the Governance Guidelines, and (3) reviews any changes to the charters of each Board committee recommended by such committee.
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2025 Proxy Statement |
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25 |
Corporate Governance
Board Oversight
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risk management and compliance reviews; and |
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other special and emerging topics. |
The Board looks to the expertise of its committees to inform strategic oversight in their areas of responsibility.
Risk Oversight
PayPal operates in approximately 200 markets globally in a rapidly evolving environment characterized by a heightened regulatory focus on all aspects of the payments industry. Accordingly, our business is subject to the risks inherent in the payments industry generally. A sound risk management and oversight program is critical to the successful operation of our business and the protection of our Company, customers, employees, and other stakeholders. Management is responsible for assessing and managing risk and views it as a top priority. The Board is responsible for overall risk assessment and management oversight and executes its responsibility as a group and through its committees, which report at least quarterly to the full Board. The Board and its Committees consult with external advisors, including outside counsel, consultants, auditors, and industry experts, to help ensure that they are well informed about the risks and opportunities pertinent to the Company.
ARC Committee
The ARC Committee is primarily responsible for the oversight of the Company’s risk framework and reports to the full Board on the following matters on a regular basis:
Financial and Audit Risk: Meets with the independent auditor, Chief Financial Officer, Chief Accounting Officer, and other members of the management team quarterly and as needed, including in executive sessions, to review the following:
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quality and integrity of the Company’s financial statements and reports; |
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accounting and financial reporting practices; |
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disclosure controls and procedures; |
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audit of the Company’s financial statements; |
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selection, qualifications, independence, and performance of the independent auditor; and |
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effect of regulatory and accounting initiatives and application of new accounting standards. |
Enterprise-Wide Risk and Compliance: Periodically reviews and approves the framework for the ERCM Program and other key risk management policies. Meets with the Global Chief Risk Officer, quarterly and as needed, including in executive sessions, to review and discuss the following:
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the Company’s overall risk framework and risk appetite framework, including policies and practices established by management to identify, assess, measure, and manage key current and emerging risks facing the Company, including regulatory and financial crimes compliance, technology (including cybersecurity, information security, privacy, and AI), operational, portfolio, capital, strategic, extended enterprise, third-party, and reputational risks; |
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compliance areas, management actions on significant compliance matters, and reports concerning the Company’s compliance with applicable laws and regulations; and |
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periodic reports from the Global Chief Risk Officer and other members of management regarding ongoing enhancements to, and overall effectiveness of, the Company’s risk management program, including actions taken by management to address risks, the progress of key risk initiatives, and the implementation of risk management enhancements. |
Internal Audit: Meets with the Senior Vice President, Internal Audit, quarterly and as needed, including in executive sessions, to discuss the performance of the Company’s internal audit function and the independent auditor. Reviews and approves the annual risk-based audit plan and any significant changes to such plan.
Legal and Regulatory: Meets with the General Counsel, the Global Chief Risk Officer and the Global Chief Compliance Officer, quarterly and as needed, including in executive sessions, to review significant legal, regulatory or compliance matters that could have a material impact on our financial statements, business or compliance policies.
Compensation Committee
The Compensation Committee is primarily responsible for the following areas and reports to the full Board on these matters on a regular basis:
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oversees and reviews the risks associated with our compensation policies, plans, and programs; |
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oversees regulatory compliance with respect to compensation matters; and |
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oversees and monitors the Company’s strategies and policies related to human capital management, including the recruitment and retention of key talent, corporate culture, and other key human capital management programs and initiatives. |
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2025 Proxy Statement |
Corporate Governance
Board Oversight
Executive Succession Planning
The Board recognizes the importance of effective executive leadership to PayPal’s success and reviews executive succession planning at least annually. As part of this process, the Board reviews and discusses the capabilities of our executive management, as well as succession planning and potential successors for the CEO and our other executive officers. The process includes consideration of organizational and operational needs, competitive challenges, leadership/management potential and development, and emergency situations.
Director Orientation and Continuing Education
Upon joining the Board, directors participate in a robust orientation program to help ensure that they have the tools, resources and knowledge to provide effective oversight of the Company and management. Our director orientation program familiarizes new directors with the Company’s business, strategy, operations, and culture, among other areas, and assists them in developing the skills and knowledge required to serve on the Board and any assigned Board committees. New directors meet with members of our executive leadership team and other key leaders to gain a deeper understanding of the Company’s business and operations. Directors regularly engage, formally and informally, with other directors and senior leaders to share ideas, build stronger working relationships, gain broader perspectives, and strengthen their working knowledge of the Company’s business and strategies. From time to time, management provides, or invites outside experts to provide, educational briefings to the Board on business, corporate governance, regulatory, and compliance matters and other topics to help enhance skills and knowledge relevant to their service as a PayPal director. In the past year, for example, we have hosted outside experts to present during Board meetings on topics related to cybersecurity, including emerging cyber risk trends, the evolving regulatory and litigation landscape, and key cyber risk governance considerations. In addition, directors are encouraged to attend accredited director education programs at the Company’s expense.
Board and Committee Evaluations
Our Board is committed to continuous corporate governance improvement, and the Board and committee self-evaluations play a critical role in ensuring the overall effectiveness of our Board and each committee. The Board and its principal committees perform an annual self-evaluation to assess their performance and effectiveness and to identify opportunities to improve. As appropriate, the self-evaluations result in updates or changes to our practices as well as commitments to continue existing practices that our directors believe contribute positively to the effective functioning of our Board and its committees. The Governance Committee annually reviews this self-evaluation process to ensure it is operating effectively.
Complete Questionnaire Each director completes a written questionnaire that addresses strategic oversight, Board/committee structure and composition, and interactions with, and evaluation of, management and Board processes. Participate in One-on-One Interview A one-on-one interview is conducted with each director to review the Board's and its committees' performance over the prior year and identify opportunities to improve Board effectiveness going forward. Review Responses The questionnaires and anonymized interview responses are reviewed with the full Board, and committee self-evaluations are reviewed by each committee, in each case in executive session. Incorporate Feedback Feedback from the evaluations informs Board and committee enhancements.
Board and Committee Meetings and Attendance
Our Board typically holds at least four regularly scheduled meetings each year, in addition to special meetings scheduled as appropriate. At each regularly scheduled Board meeting, a member of each principal Board committee reports on any significant matters addressed by the committee since the last regular meeting, and the independent directors have the opportunity to meet in executive session without management or the other directors present. The Board expects that its members will rigorously prepare for, attend, and participate in all Board and applicable Board committee meetings.
Our Board met five times during 2024. Each director nominee who served in 2024 attended at least 89% of all our Board meetings and meetings of the Board committees on which they served.
All directors are encouraged to attend the Annual Meeting. Last year, 91% of the directors serving at the time of our 2024 Annual Meeting of Stockholders attended that meeting.
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2025 Proxy Statement |
Corporate Governance
Stockholder Engagement
Code of Business Conduct and Ethics
Our credibility and reputation depend upon the good judgment, ethical standards, and personal integrity of each director, executive officer and employee. PayPal’s Code of Business Conduct and Ethics (“Code of Conduct”) requires that our directors, executive officers, and all other employees disclose actual or potential conflicts of interest and recuse themselves from related decisions. Directors, executive officers and other employees are expected to avoid any activity that is or has the appearance of being a conflict of interest with the Company. This includes refraining from engaging in activities that compete with, or are adverse to, the Company, or that interfere with the proper performance of an individual’s duties or responsibilities to the Company. In addition, our Code of Conduct prohibits the use of confidential company information, company assets or position at the Company for personal gain.
We update our Code of Conduct and related policies annually to ensure that they provide clear guidance and align with market practice and evolving legal/regulatory changes. Additionally, to foster a strong culture of compliance and ethics, we conduct local outreach and awareness sessions globally, as well as annual risk and compliance training for all employees and contractors, which covers areas such as our Code of Conduct, anti-money laundering, information protection awareness, data privacy, anti-corruption, safety and security, and sexual harassment prevention. In addition, upon joining PayPal and annually thereafter, our employees must certify that they understand and will comply with our Code of Conduct. In 2024, PayPal achieved 100% completion for its annual risk and compliance training for the ninth consecutive year. Any amendments or waivers to our Code of Conduct requiring disclosure under applicable SEC or Nasdaq rules will be posted on our website.
Concerns about accounting or auditing matters or possible violations of our Code of Conduct should be reported under the procedures outlined in our Code of Conduct. Among our many safe, easy-to-use reporting channels we provide a global Integrity Helpline, which is available 24 hours a day, seven days a week in multiple languages. Reports to the Integrity Helpline are confidential and can be made anonymously.
Governance Guidelines of the Board of Directors
The Board has adopted Governance Guidelines to serve as a framework to aid the Board in effectively conducting its business. The Governance Guidelines cover many of the policies and practices discussed in this proxy statement, including Board member criteria, Board composition, leadership, development, and succession, expectations for meeting attendance and the roles of the Board’s standing committees. The Governance Committee reviews the Governance Guidelines each year and recommends any changes to the Board for consideration and approval as necessary or appropriate in response to changing regulatory requirements, evolving best practices, and other considerations.
Where to Find Our Governance Documents
Our Governance Guidelines, charters of our principal Board committees, our Code of Conduct, and other key corporate governance documents and materials are available on the governance section of our Investor Relations website at https://investor.pypl.com/governance/governance-overview/.
Related Person Transactions
The Board has adopted a written policy governing the review and approval of related person transactions. The policy, which is administered by the ARC Committee, applies to any transaction or series of transactions in which (1) the Company or its consolidated subsidiary is a participant, (2) the amount involved is or is reasonably expected to be more than $120,000, and (3) a related person under the policy has a direct or indirect material interest. The policy defines a “related person” to include directors, director nominees, executive officers, beneficial owners of more than 5% of PayPal’s outstanding common stock, or an immediate family member of any of these persons.
Under the policy, transactions requiring review are referred to the ARC Committee for pre-approval, ratification, or other action. Management will provide the ARC Committee with a description of any related-person transaction proposed to be approved or ratified, including the terms of the transaction, the business purpose of the transaction and the benefits to PayPal and to the relevant related person. In determining whether to approve or ratify a related-person transaction, the ARC Committee will consider the following factors:
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whether the terms of the transaction are fair to the Company, and at least as favorable to the Company as they would be if the transaction did not involve a related person; |
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whether there are demonstrable business reasons for the Company to enter into the transaction; |
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whether the transaction would impair the independence of an outside director under the Company’s director independence standards; and |
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2025 Proxy Statement |
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Compensation Discussion and Analysis
Executive Summary
Our pace of innovation accelerated as we introduced our Fastlane guest checkout, launched our PayPal Everywhere omnichannel initiative, and expanded PayPal Complete Payments (PPCP) into new markets. We made progress introducing branded checkout enhancements, improving the profitability in our payment service provider (PSP) business, monetizing Venmo, and expanding support for small and medium business (SMB) customers. In addition, we continued to increase revenues while returning the business to profitable growth with strong transaction margin dollar performance.
Other notable 2024 results include:
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Transaction margin dollars excluding interest on customer balances increased 5% compared to a 5% decline in FY’23. |
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GAAP operating margin contracted 14 basis points to 16.7%; non-GAAP operating margin1 expanded 116 basis points to 18.4%. |
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Cash flow from operations reached $7.5 billion. Free cash flow was $6.8 billion, and adjusted free cash flow2 was $6.6 billion. |
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Payment transactions increased 5% to 26.3 billion. |
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Continued our strong capital return program, deploying $6 billion to repurchase 92 million shares of common stock and reducing average share count by approximately 6%. |
We are focused on driving scale and the adoption of our products and services while continuing to improve efficiency and effectiveness while increasing our velocity of innovation. Building on our progress in 2024, we will continue our strategic transformation with the goal of driving durable, profitable growth in 2025 and beyond.
Key Leadership Additions
Following the appointment of Mr. Chriss as our President and Chief Executive Officer in September 2023, we continued to strengthen our leadership team by hiring seasoned leaders across several key roles during late 2023 and into 2024. Jamie Miller joined PayPal as Executive Vice President, Chief Financial Officer in November 2023, and was appointed to the expanded role of EVP, Chief Financial and Operating Officer in February 2025; Diego Scotti joined PayPal as Executive Vice President, General Manager, Consumer Group in December 2023; Suzan Kereere joined PayPal as President, Global Markets in January 2024; and Aaron Webster joined PayPal as Executive Vice President, Global Chief Risk Officer in March 2024.
Ms. Kereere and Messrs. Scotti and Webster are referred to in this proxy statement as “New NEOs” because they were not NEOs in our proxy statement last year. Each of Mr. Chriss and Ms. Miller were NEOs in our 2024 proxy statement and the new hire compensation paid to them in 2023, as provided in their offer letters entered into in 2023, is summarized in our 2024 proxy statement under the heading “Offer Letter Compensation for New NEOs.”
Offer Letter Compensation for New NEOs
Each of Ms. Kereere and Messrs. Scotti and Webster entered into an offer letter with the Company in connection with the commencement of their employment. The offer letters included two categories of compensation: (1) go-forward, ordinary course compensation arrangements and (2) special, non-recurring new hire awards. The non-recurring new hire awards were intended to incentivize Ms. Kereere and Messrs. Scotti and Webster to join PayPal’s leadership team and to compensate Ms. Kereere and Mr. Webster for a portion of the awards they forfeited in departing from their prior employer to join PayPal. The awards forfeited by each of Ms. Kereere and Mr. Webster were greater in value than the target grant date value of their Make-Whole RSUs, described below.
The amounts and types of compensation for each of Ms. Kereere and Messrs. Scotti and Webster were determined carefully by the Compensation Committee in consultation with the Compensation Committee’s independent compensation consultant. Factors including, but not limited to, the NEO’s experience, responsibilities, expertise, compensation at their prior employer (if publicly available or voluntarily disclosed), potential contributions to PayPal, their competitive opportunities, including, if applicable, specific alternative opportunities at the time of hire, market compensation for their role at technology and financial companies in our compensation peer group (see “Our Compensation Peer Group” below for our 2024 peer group), and the size and complexity of the NEO’s position and business unit or function were considered when determining each new NEO’s initial compensation package. In each case, the annual pay elements were consistent with the compensation practices of our peer group and the non-recurring elements of compensation were driven by the specific circumstances of the individual hires (as noted above).
| 1 |
Non-GAAP operating margin is not a financial measure prepared in accordance with GAAP. For more information on how we compute non-GAAP operating margin, and a reconciliation to operating margin prepared in accordance with GAAP, please refer to “Appendix A: Reconciliation of Non-GAAP Financial Measures” in this proxy statement. |
| 2 |
Adjusted free cash flow excludes the net timing impact between originating European buy now, pay later (“BNPL”) receivables as held for sale and the subsequent sale of these receivables. Please refer to “Appendix A: Reconciliation of Non-GAAP Financial Measures” in this proxy statement. |
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| 50 |
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2025 Proxy Statement |
Compensation Discussion and Analysis
Executive Summary
2024 PayPal Annual Incentive Plan
Based on our strong 2024 results under our refreshed leadership team, our 2024 PayPal Annual Incentive Plan (“AIP” or “2024 AIP”) paid out as described below.
Under the 2024 AIP, the bonus pool was funded based on achievement of two equally-weighted Company performance metrics. The following table shows the Company performance goals established at the beginning of 2024, and actual performance achieved as determined by the Compensation Committee.
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| Company Measure ($ in billions) |
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Threshold (50% Payout)1 |
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Target (100% Payout)1 |
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Maximum (200% Payout)1 |
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Actual Achieved |
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Actual Achieved (Percentage of Target) |
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| Transaction
Margin Dollars |
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$13.600 |
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$13.950 |
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$14.400 |
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$14.658 |
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200% |
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| Non-GAAP Operating Income2 |
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$5.000 |
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$5.400 |
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$5.850 |
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$5.838 |
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197% |
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Company Performance Score |
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199% |
| 1 |
Linear interpolation applies to transaction margin dollars and non-GAAP operating income for results between specific hurdles. |
| 2 |
Non-GAAP operating income is not a financial measure prepared in accordance with GAAP. For information on how we compute non-GAAP financial measures and a reconciliation to the most directly comparable financial measures prepared in accordance with GAAP, please refer to “Appendix A: Reconciliation of Non-GAAP Financial Measures” to this proxy statement. |
Each NEO’s individual bonus payout was then subject to adjustment based on their individual performance. Each of our NEOs achieved an individual performance score of 100% for 2024, as further described in the section titled “Individual Performance Scores” on page 59 of this CD&A.
2022-2024 PBRSUs
Following the completion of the performance period for our 2022-2024 PBRSUs on December 31, 2024, the Compensation Committee determined that the threshold level of performance was not met for either of the FX-neutral revenue CAGR or free cash flow CAGR performance metrics applicable to the 2022-2024 PBRSUs. As a result, the 2022-2024 PBRSUs vested at 0%. None of our NEOs held 2022-2024 PBRSU awards.
2024 Say-on-Pay Outcome and Stockholder Engagement
Our Board and management team are committed to regular engagement to solicit the perspectives of a broad cross-section of stockholders on our compensation program design and corresponding annual Say-on-Pay vote. Stockholder feedback serves as a critical input as the Compensation Committee evaluates our compensation program, as does the outcome of our Say-on-Pay vote, which received 83% support in 2024.
Following the 2024 Annual Meeting of Stockholders, we contacted stockholders representing approximately 62% of our common stock held by institutional investors, and had conversations with stockholders representing 39% of our common stock held by institutional investors. Our Board Chair, Enrique Lores, participated in meetings with stockholders representing 28% of our common stock held by institutional investors.
Compensation was a prominent topic during our discussions with investors. Our stockholders expressed broad support for our compensation program structure, and in particular, the changes made to our executive compensation program, including the incorporation of more profitability-linked metrics, the program’s continued alignment of pay and performance, and the critical steps we took to attract key executive talent in 2024. For more information on our engagement efforts and additional feedback received through these conversations, see “Corporate Governance – Stockholder Engagement” on page 33 of this proxy statement.
2024 Compensation Program Changes Informed by Investor Feedback
Informed by investor feedback, in January 2024, the Compensation Committee made the following enhancements to our incentive programs to strengthen pay for performance alignment, increase the focus on profitable growth, closely manage our burn rate, and address historical challenges experienced in connection with setting long-term performance goals. In addition, in July 2024, the Compensation Committee approved amendments to our Executive Change in Control and Severance Plan (the “Executive Severance Plan”) to more closely align our executive severance benefits to market practices within PayPal’s compensation peer group and to streamline administration.
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2025 Proxy Statement |
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53 |
Compensation Discussion and Analysis
2024 Compensation Framework and Decisions
Performance-Based Restricted Stock Units
In January 2024, the Compensation Committee approved the following structure for the multi-year PBRSUs granted in 2024 (the “2024-2026 PBRSUs”).
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Three-year performance period from January 1, 2024 through December 31, 2026, to emphasize the importance of sustained growth and long-term stockholder value creation, with three discrete measurement periods of 12, 24, and 36 months, to enhance the program’s durability and minimize the potential impact of short-term stock price volatility. |
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Three-year cliff vesting, to maximize retentive value of the awards. |
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Awards to be settled in shares of our common stock, subject to the Compensation Committee’s certification of the Company’s rTSR, measured as compared to the S&P 500, with the target for rTSR versus the S&P 500 set at the 55th percentile, to ensure rigor in our LTI program. |
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If absolute TSR is negative for the 36-month performance period, the maximum shares earned is capped at 100% of the target number of shares, to help ensure appropriate alignment of PBRSU payouts with long-term stockholder value creation. |
In establishing this structure, the Compensation Committee considered a number of factors, including its desire to set challenging performance goals that require outperformance to achieve target performance, the need to provide for evolution of PayPal’s strategic priorities and initiatives, particularly during a period of leadership transition, and feedback received from stockholders. The Compensation Committee believes that this PBRSU structure meets these objectives by measuring and rewarding our holistic relative outperformance and long-term value creation and enhancing program durability, while ensuring alignment with stockholder experience in the event of negative absolute stockholder returns.
PBRSU Mechanics and Targets
For each of the three discrete measurement periods of 12, 24, and 36 months, one-third of the 2024-2026 PBRSUs will be eligible to vest based on the Company’s rTSR, measured as compared to the S&P 500, as depicted in the table below.
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Threshold |
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Target |
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Maximum |
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| PayPal rTSR compared to S&P 500 rTSR |
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25th percentile |
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55th percentile |
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75th percentile |
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| Payout to Target |
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50% |
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100% |
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200% |
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For each tranche of the 2024-2026 PBRSUs, performance below the threshold level will result in a payout of 0% and performance above the maximum level will result in a payout of 200% of target. Linear interpolation is applied to performance between threshold, target, and maximum levels. If absolute TSR achievement is negative for the 36-month performance period, the maximum payout will be 100% of the target number of all three tranches (the “Performance Cap Condition”).
rTSR performance for the 12-month (calendar year 2024) measurement period was achieved at the 84th percentile, such that one-third of the 2024-2026 PBRSUs will be earned at 200% of target if the Performance Cap Condition is not triggered at the end of the 36-month measurement period. All three tranches of the 2024-2026 PBRSUs are subject to three-year cliff vesting, generally subject to the continued employment of the NEO, with settlement of the PBRSUs on March 1, 2027 based on rTSR achievement over the three performance periods.
Restricted Stock Units
Our 2024 LTI awards also included service-based RSUs with a three-year vesting schedule. These RSU awards vest one-third on the first anniversary of the grant date, with the remainder vesting ratably each following quarter over the remaining vesting period, generally subject to the continued employment of the NEO. Service-based RSUs serve to more closely align our NEOs’ interests with those of our stockholders, as RSUs become more valuable as our stock price increases. While the value follows our stock price performance, the service-based RSUs have some value regardless of whether our stock price increases or decreases, and are designed to provide an appropriate incentive for our NEOs to remain with us throughout the three-year vesting period.
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2025 Proxy Statement |
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61 |
Compensation Discussion and Analysis
Other Compensation Elements
Other Compensation Elements
Deferred Compensation Plan
The DCP, our non-qualified deferred compensation plan, provides our U.S.-based executives the opportunity to defer compensation in excess of the amounts that are legally permitted to be deferred under our tax-qualified 401(k) savings plan (the “401(k) Plan”). Each of the 401(k) Plan and the DCP allows participants to set aside tax-deferred amounts. The Compensation Committee believes the opportunity to defer compensation is a competitive benefit that enhances our ability to attract and retain talented executives while building plan participants’ long-term commitment to PayPal. The investment return on the deferred amounts is linked to the performance of a range of market-based investment choices.
Other Benefits
While we generally do not provide perquisites or other personal benefits to our executive officers, we provide certain executive officers with perquisites and other personal benefits described below. The Compensation Committee believes these perquisites and other personal benefits are reasonable and consistent with our overall executive compensation program and philosophy and that they will help us attract and retain our executive officers. The Compensation Committee periodically reviews the benefits provided to our executive officers.
CEO Security Program
We maintain a comprehensive security policy, and we may determine that in certain circumstances, certain executive officers should be required to have personal security protection. We require these executives to accept such personal security protection because we believe it is in the best interests of PayPal and our stockholders that our executives and their family members not be vulnerable to security threats.
Because PayPal is a highly visible company, the Compensation Committee has authorized a CEO security program to address safety concerns, which include specific threats to our CEO’s safety arising directly as a result of his position as our President and CEO. In connection with this program, which was designed in accordance with an independent security study completed by a third-party consultant, we paid to procure, install, and maintain personal residential security measures and for the costs of security personnel during Mr. Chriss’ personal travel. In addition, the Compensation Committee requires that Mr. Chriss uses our corporate aircraft for personal travel in connection with his overall security program.
We believe the costs of this overall security program are reasonable, appropriate, and benefit PayPal. Although we do not consider the CEO security program to be a perquisite for the benefit of Mr. Chriss for the reasons described above, the incremental costs related to personal security measures for him at his residence and during personal travel, as well as the incremental costs of our corporate aircraft for his personal travel, are reported in the “All Other Compensation” column in the 2024 Summary Compensation Table below.
Corporate Apartment
In September 2024, PayPal began leasing a corporate apartment near our New York office for use by Mr. Chriss during his frequent business travel to our New York office. The Compensation Committee has permitted Mr. Chriss’ personal use of the corporate apartment for up to 30 days in the aggregate per calendar year, subject to his reimbursing the Company for daily costs incurred as a result of his personal use.
Relocation-Related Benefits
As part of our global mobility program, our policies provide that executive officers and other eligible employees who relocate at our request are eligible for certain relocation and expatriate benefits to facilitate the transition and international assignment, including tax assistance. These policies are intended to recognize and compensate our employees for the costs associated with living and working outside the employees’ home countries, with the goal that employees are not financially advantaged or disadvantaged as a result of their international assignment and related taxes. At the time of her hire in 2024, Ms. Kereere was eligible for relocation benefits if she was requested by PayPal to relocate to our San Jose office. Ms. Kereere continued to be based in our New York office throughout 2024, and as a result, no relocation benefits were provided to her in 2024.
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| 62 |
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2025 Proxy Statement |
Compensation Discussion and Analysis
Our Structure for Setting Compensation
Our Structure for Setting Compensation
Roles and Responsibilities
Compensation Committee
Our executive compensation program is designed and administered under the direction and control of the Compensation Committee, which is made up solely of independent directors. The Compensation Committee reviews and approves our overall executive compensation program, policies, and practices and sets the compensation of our executive officers, including our NEOs.
Compensation Consultant
The Compensation Committee’s independent compensation consultant provides advice and resources to help the Compensation Committee assess the effectiveness of our executive compensation strategy and program. The compensation consultant reports directly to the Compensation Committee, and the Compensation Committee has the sole power to terminate or replace the consultant at any time. Compensia has served as the Compensation Committee’s compensation consultant since 2016.
The Compensation Committee directed Compensia to help members of management obtain the information necessary for management to formulate recommendations to the Compensation Committee, which are evaluated by Compensia. A representative of Compensia also attends Compensation Committee meetings, which generally include an executive session during which Compensia meets with the Compensation Committee with no members of management present. Compensia also regularly meets with the Chair of the Compensation Committee as warranted outside of regular meetings.
As part of its engagement in 2024, Compensia provided a market overview of executive compensation, evaluated our compensation peer group composition, evaluated executive cash and equity compensation levels at our compensation peer group companies, reviewed proposed compensation adjustments and changes to existing arrangements, advised on the framework for our annual and long-term incentive awards, assessed executive perquisites relative to peer and broader market practices, advised on our equity compensation program, including share pool usage, and reviewed proposed compensation arrangements for new executives, as well as the compensation of our non-employee directors. Compensia did not provide any other services to us in 2024.
Recognizing the importance of objective advice, the Compensation Committee closely examines the procedures and safeguards of its compensation consultant to ensure that its services are objective. The Compensation Committee has assessed the independence of Compensia pursuant to the applicable Nasdaq listing standards and SEC rules and concluded that Compensia’s work for the Compensation Committee does not raise any conflict of interest.
CEO and the People Function
The Compensation Committee works with members of our management team, including Mr. Chriss and Isabel Cruz, our Executive Vice President, Chief People Officer, to formulate the specific plan and award designs, including performance measures and performance target levels, necessary to align our executive compensation program with our business objectives and strategies.
Mr. Chriss reviews with the Compensation Committee his performance evaluations of each of our other NEOs, together with his recommendations regarding base salary adjustments, annual incentive awards, and long-term incentives to enable the Compensation Committee to consider our financial and operational results as well as individual performance in its compensation decisions. The Compensation Committee makes all final decisions regarding the compensation of all our NEOs.
While certain members of management attended the meetings of the Compensation Committee in 2024 by invitation, they did not attend executive sessions of the meetings unless requested by the Compensation Committee, and they did not attend portions of Compensation Committee meetings during which their individual compensation was discussed or approved.
Our Compensation Peer Group
Given the criticality of our ability to attract and retain executive talent from both the technology and financial sectors, our compensation peer group is made up of technology companies and financial companies. This mix is intended to provide the Compensation Committee with insight into the differences across these two business sectors so that it can design an executive compensation program that is both balanced and competitive across each sector.
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2025 Proxy Statement |
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63 |
Compensation Tables
Potential Payments Upon Termination or Change in Control Table
Retirement – Column (a)
None of our NEOs who were employed by PayPal as of December 31, 2024 were eligible to receive amounts under the Executive Severance Plan in connection with their retirement under the Executive Severance Plan’s Executive Long Term Incentive Program (“ELTIP”).
The ELTIP provides eligibility for continued vesting of equity awards granted at least 12 months prior to an NEO’s retirement date, subject to the NEO’s attainment of at least 60 years of age, completion of at least seven years of service to PayPal, and provision of sufficient advance notice to PayPal. Any eligible outstanding time-based RSUs would continue to vest in accordance with their original schedule; provided that, for any awards scheduled to vest more frequently than annually, each scheduled vesting date not falling on an anniversary of the grant date would be treated as though that vesting date were on the next following anniversary of the grant date. Any eligible outstanding PBRSUs would remain outstanding and eligible to vest, based solely on the achievement of the applicable Company performance targets for the applicable performance period.
All continued vesting under the ELTIP is subject to the NEO’s execution of a release of claims in favor of PayPal and required attestations and compliance with the restrictive covenants set forth in the Executive Severance Plan.
Involuntary Termination Other than for Cause – Column (b)
Severance Arrangements for Involuntary Termination Other Than for Cause Outside a Change in Control Period
Under the terms of the Executive Severance Plan, each of Mr. Chriss and Ms. Miller is eligible for the following severance payments and benefits in the event that their employment is terminated by PayPal without cause or by the NEO for good reason outside of a change in control period, and each of our other NEOs is eligible for the following severance payments and benefits in the event that the NEO’s employment is terminated by PayPal without cause outside of a change in control period:
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A lump sum cash payment equal to the sum of the NEO’s annual base salary and target bonus, multiplied by 1.5x for each of Mr. Chriss and Ms. Miller and 1.0x for our other NEOs. |
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Company-paid or -reimbursed COBRA premiums for a post-employment period (up to 18 months for Mr. Chriss and up to 12 months for our other NEOs), subject to the NEO’s timely election of COBRA continuation coverage. |
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Any earned, but unpaid, AIP bonus in respect of the year prior to the year of termination based on actual Company performance and target individual performance. |
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For Ms. Miller, a prorated annual bonus for the year of termination based on actual Company performance and target individual performance. |
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Continued vesting of time-based equity awards that would have otherwise become vested within the 12 months following the NEO’s termination of employment; provided that, for any awards scheduled to vest more frequently than annually, each scheduled vesting date not falling on an anniversary of the grant date would be treated as though that vesting date were on the next following anniversary of the grant date. |
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Continued vesting of performance-based equity awards with a performance period that ends within the 12 months following the NEO’s termination of employment, based solely on achievement of the applicable Company performance targets. |
In addition, pursuant to the terms of their offer letters, each of Mr. Chriss and Ms. Kereere is entitled to accelerated vesting of their Make-Whole RSUs Award granted in connection with commencement of employment.
For purposes of the Executive Severance Plan, a “change in control period” is defined as the period beginning 90 days prior to, and ending 24 months following, a change in control of PayPal.
All severance benefits and payments are subject to the NEO’s execution of a release of claims in favor of PayPal and continued vesting of equity awards is subject to required attestations and compliance with the restrictive covenants set forth in the Executive Severance Plan.
Involuntary Termination in Connection with a Change in Control – Column (c)
Severance Arrangements for an Involuntary Termination in a Change in Control Period
Under the terms of the Executive Severance Plan, each NEO is eligible for the following severance payments and benefits in the event that the NEO’s employment is terminated by PayPal without cause or by the NEO for good reason within a change in control period:
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A lump sum cash payment equal to the sum of the NEO’s annual base salary and target bonus, multiplied by 2.0x. |
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A lump sum cash payment equal to 24 months of the NEO’s COBRA premiums, subject to the NEO’s timely election of COBRA continuation coverage. |
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2025 Proxy Statement |
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73 |
CEO Pay Ratio Disclosure
CEO Pay Ratio Disclosure
We are providing the following information about the relationship of the total compensation of Mr. Chriss, our CEO, to the median of the annual total compensation of all our employees (other than Mr. Chriss), which we refer to as the “pay ratio.” We believe that the pay ratio disclosed below is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K.
For 2024, our last completed fiscal year, the median of the annual total compensation of all our employees (other than our CEO) was $95,903. The total compensation of our CEO was $6,658,527 (based on the assumptions used to determine the compensation reported in the “2024 Summary Compensation Table” in this proxy statement and reflecting that Mr. Chriss did not receive any equity awards in 2024). For 2024, we estimate that the pay ratio of the total compensation of our CEO to the median of the annual total compensation of all our employees is 69 to 1. We expect that Mr. Chriss will receive equity awards in future years, which will impact this ratio.
Methodology
PayPal is a global company and operates in approximately 200 markets around the world. As of December 31, 2024, we employed approximately 24,400 people globally: approximately 37% of them were based in the U.S. and 63% were based outside of the U.S. We strive to create a competitive global compensation program, taking into account an employee’s position with PayPal and their geographic location. Accordingly, our compensation programs and reward offerings are designed to reflect local market practices across our global operations.
In determining our pay ratio for 2024, we compiled compensation information for all of our full-time and part-time employees worldwide (including interns) as of December 1, 2024. For purposes of identifying the median employee from our global employee population, we compared the total target compensation of our employees for 2024, which was composed of annual base salary, target short-term incentives and other bonuses, and the intended grant value related to any long-term incentive equity awards, as reflected in our global human resources and equity management systems. For employees outside of the U.S., we converted their compensation to U.S. dollars using the applicable exchange rate as of December 1, 2024. We did not include any contractors or workers employed through a third-party provider in our employee population.
The elements in this compensation measure are representative of the principal forms of compensation delivered to our employees. We identified our median employee using this compensation measure, which was consistently applied to all employees included in the calculation.
We identified and calculated the elements of our median employee’s compensation for 2024 in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K, and converted the employee’s compensation from Euros to U.S. dollars using the exchange rate as of December 31, 2024, resulting in annual total compensation of $95,903. For the annual total compensation of our CEO, we used the amount reported in the “Total” column of our “2024 Summary Compensation Table” in this proxy statement.
The SEC rules for identifying the median employee allow companies to adopt many different methodologies, such as applying estimates, assumptions, adjustments, and exclusions and adopting unique definitions of compensation to identify the median employee and calculate the pay ratio. In light of the differences in how pay ratios may be calculated, neither the median employee’s compensation nor the estimated pay ratio reported by other companies may be comparable to the pay ratio reported above, as other companies have different employee populations and compensation practices and may use different methodologies, exclusions, estimates, and assumptions in calculating their pay ratios.
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| 80 |
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2025 Proxy Statement |
Proposal 3: Vote to Approve PayPal Holdings, Inc. 2015 Equity Incentive Award Plan, as Amended and Restated
Proposal 3:
Vote to Approve PayPal Holdings, Inc. 2015 Equity Incentive Award Plan, as Amended and Restated
Summary
The Company is asking stockholders to approve the Amended and Restated 2015 Equity Incentive Award Plan (the “Equity Plan”) to increase the number of shares authorized for issuance under the Equity Plan.
The Board has determined that it is in the best interests of the Company and its stockholders to approve this proposal. The Board, upon the recommendation of the Compensation Committee, has approved the amended and restated Equity Plan, subject to stockholder approval, and recommends that our stockholders vote in favor of this proposal at the Annual Meeting.
Background
The Equity Plan was initially adopted by the Board in June 2015 and approved by eBay Inc. as the Company’s sole stockholder at that time. Our stockholders have since approved restatements of the Equity Plan at each of the 2018, 2023, and 2024 Annual Meeting of Stockholders. As of the Record Date, 31,711,814 shares remained available for future grants under the Equity Plan.
Reasons to Vote for the Proposal
Stockholder approval to amend and restate the Equity Plan will increase the number of shares reserved for issuance under the Equity Plan by an additional 15 million shares of our common stock. In determining whether to recommend that stockholders approve the increase in the number of shares reserved for future issuance, the Compensation Committee and Board of Directors carefully considered a number of important factors, including:
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The Equity Plan supports a broad-based program that is critical to our ability to effectively compete for, attract and retain top talent. We operate in a highly competitive market for talent, and compete with companies in both the technology and financial sectors for the talent necessary to drive our operations and business strategy. With 46% of our full-time employees classified within our technology function, it is important to consider how our technology sector competitors utilize equity compensation for comparable roles. Therefore, our ability to continue offering equity incentive awards under the Equity Plan is particularly critical to our ability to attract, retain, and reward skilled and motivated employees. |
We make our annual, broad-based equity grant in early March of each year. As of the Record Date, 31,711,814 shares remained available for future grants under the Equity Plan (equal to approximately 3.24% of our common shares outstanding). If stockholders do not approve this proposal, the current share reserve may not be sufficient to support our equity compensation plans through the next opportunity to increase the equity plan reserve at the 2026 Annual Meeting, which is expected to be held in May 2026. As a result, we would lose access to a key element of compensation that is critical in the labor markets in which we compete, particularly within our technology function.
Key statistics on our program (as of December 31, 2024) include:
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99% |
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73% |
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46% |
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96% |
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of Full-Time Employees Hold Equity Awards |
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of Full-Time Employees Received Equity in 2024 |
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of Full-Time Employees Are in Our Technology Function |
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of 2024 Grants Were Awarded to Non-Named Executive Officers |
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Equity awards support our pay-for-performance philosophy. We currently award RSUs to a broad-based group of our employee population and to our non-employee directors. In addition to RSUs, we also grant PBRSUs to senior-level employees that vest based on both time and performance conditions. The Board believes that equity awards, whose value depends on the performance of our stock, and which require achievement of performance criteria and/or continued service over time, create an essential link between realized pay and company performance. Equity compensation motivates |
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2025 Proxy Statement |
Proposal 3: Vote to Approve PayPal Holdings, Inc. 2015 Equity Incentive Award Plan, as Amended and Restated
Conclusion
Conclusion
The Board has determined that it is in the best interests of the Company and its stockholders to approve this proposal. The Board, upon the recommendation of the Compensation Committee, has approved the amended and restated Equity Plan to increase the shares reserved for issuance, subject to stockholder approval, and recommends that our stockholders vote in favor of this proposal at the Annual Meeting. This proposal is also being submitted to our stockholders in compliance with Nasdaq listing standards concerning stockholder approval of equity compensation plans and/or material revisions to these plans.
If our stockholders approve this proposal, the amended and restated Equity Plan will become effective as of the date of stockholder approval, and the 15 million additional shares will be available for grant under the Equity Plan. If our stockholders do not approve this proposal, the amended and restated Equity Plan and the additional shares reserved for issuance will not take effect, and our Equity Plan will continue to be administered in its current form.
Our executive officers and directors have an interest in this proposal by virtue of their being eligible to receive equity awards under the Equity Plan. References to the Equity Plan in the remainder of this discussion refer to the amended and restated Equity Plan as if this proposal has been approved by our stockholders, unless otherwise specified or the context otherwise references the Equity Plan prior to it being amended and restated. In addition to including a share increase, the amendments to the Equity Plan include a handful of clarifying changes, such as updating section references and referencing our current clawback policies.
Summary of the Equity Plan
The following is a summary of the operation and principal features of the Equity Plan. The summary is qualified in its entirety by reference to the Equity Plan as set forth in Appendix B.
Purpose
The purpose of the Equity Plan is to promote the success and enhance the value of the Company by aligning the interests of employees, non-employee directors, and other individual service providers with those of our stockholders and by incentivizing such individuals to generate superior returns to our stockholders. The Equity Plan is further intended to provide flexibility to the Company in its ability to motivate, attract, and retain the services of employees, non-employee directors, and other service providers upon whose judgement, interest, and special effort the successful conduct of the Company’s operation is largely dependent.
Authorized Shares
Under the Equity Plan, 199.6 million shares are authorized for issuance. We are asking our stockholders to approve an additional 15 million shares to be available for issuance under the Equity Plan, which will increase the aggregate number of shares authorized under the Equity Plan to 214.6 million. As of the Record Date, we had approximately 31,711,814 shares available for issuance under the Equity Plan. Based solely on the closing price of the Company’s common stock, as reported on the Nasdaq on the Record Date, which was $63.95 per share, the maximum aggregate market value of the 31,711,814 shares that could be issued under the Equity Plan is $2,027,970,505.
For awards granted on or after May 22, 2024, each award reduces the number of shares available for grant under the Equity Plan by one share for each share covered by the award. Previously, any shares subject to stock options or stock appreciation rights were counted against the Equity Plan share reserve as 0.5 shares for every one share subject to the award and any shares subject to full value awards (including restricted stock, restricted stock units, performance units, and performance shares) were counted against the Equity Plan share reserve as one share for every one share subject thereto.
If any award granted under the Equity Plan expires or becomes unexercisable without having been exercised in full, is surrendered or is forfeited to or repurchased by the Company due to failure to vest, the unpurchased, forfeited or repurchased shares subject to such award become available for future grant or sale under the Equity Plan. Shares used to satisfy tax withholding obligations relating to an award or pay the exercise price or purchase price of an option or stock appreciation right do not become available for future issuance under the Equity Plan.
Administration
The Compensation Committee has the authority to administer the Equity Plan, including the power to determine eligibility, the types and sizes of awards, the price and timing of awards, the acceleration or waiver of any vesting restriction, and the authority to delegate such administrative responsibilities.
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Summary of the Equity Plan
Limitations on Awards to Individual Participants
The maximum number of shares that may be subject to awards granted to any one participant under the Equity Plan during any calendar year is 2,000,000 shares, and the maximum amount that may be paid in cash to any employee during any calendar year with respect to any performance-based award is $3 million. The maximum value of awards granted to a non-employee director pursuant to the Equity Plan during any fiscal year is $600,000; provided, however, that the limit set forth in this sentence: (a) is increased to $1,200,000 in the fiscal year in which a non-employee director commences service on the Board and (b) does not apply to awards made pursuant to a non-employee director’s election to receive an award in lieu of all or a portion of a cash retainer for service on the Board or any committee thereunder.
Prohibition on Repricing
Except for adjustments described in “Adjustments to Shares Subject to the Equity Plan” below, the Compensation Committee may not, without stockholder approval, authorize the amendment of any outstanding award to reduce its purchase price per share, the replacement or substitution of any award for an award having a lesser purchase price per share, or an offer to purchase any previously granted option or stock appreciation right for a payment in cash when the per share exercise price exceeds the current trading price of the underlying share.
Minimum Vesting
Subject to the acceleration of vesting as permitted under the terms of the Equity Plan, no portion of any award granted under the Equity Plan will vest before the one-year anniversary of the date of grant, except that awards that result in the issuance to one or more participants of up to 5% of the shares of common stock which may be issued or transferred under the Equity Plan may be granted without regard to such minimum vesting provisions.
Awards Subject to Clawback
Any incentive awards granted under the Equity Plan, and any cash or property delivered pursuant to incentive awards, are subject to forfeiture, recovery, or other action by PayPal as necessary for compliance with any Company policy, including our mandatory recovery policy and our clawback policy (as described in the section titled “Clawback Policy and Mandatory Recovery Policy” in the CD&A) or as required by law.
Transferability of Awards
Awards granted under the Equity Plan generally are not transferable, and all rights with respect to an award granted to a participant generally will be available during a participant’s lifetime only to the participant (or the participant’s guardian or legal representative).
Adjustments to Shares Subject to the Equity Plan
Certain transactions with our stockholders not involving a receipt of consideration by the Company, such as a stock split, spin-off, stock dividend, or certain recapitalizations, may affect the price of our shares (these transactions are collectively referred to as “equity restructurings”). In the event that an equity restructuring occurs, the Compensation Committee or the Board will equitably adjust the class of shares issuable and the maximum number of shares of our stock subject to the Equity Plan, the maximum number of shares that may be issued to an employee during any calendar year, and the class, number of shares, and price per share of our common stock subject to outstanding awards. Other types of transactions may also affect our shares, such as a dividend or other distribution, reorganization, merger, or other changes in corporate structure. In the event that there is a transaction which is not an equity restructuring, and the Compensation Committee or the Board determines that an adjustment to the plan and any outstanding awards would be appropriate to prevent any dilution or enlargement of benefits under the Equity Plan, the Compensation Committee or the Board will equitably adjust the class of shares issuable and the maximum number of shares of our stock subject to the Equity Plan, the maximum number of shares that may be issued to an employee during any calendar year, and the class, number of shares, and price per share of our common stock subject to outstanding awards, in such manner as it may deem equitable.
Change in Control
A “change in control” generally means (i) a transaction in which any person or group acquires more than 50% of our voting securities, (ii) a change in a majority of the Board over a two-year period that is not approved by at least two-thirds of the
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Summary of the Equity Plan
incumbent Board members (which generally includes Board members serving at the beginning of the period and any new director whose election or appointment was approved by a vote of at least two-thirds of the incumbent directors then in office), (iii) a sale or other disposition of all or substantially all of our assets, (iv) a merger or consolidation in which we are not the surviving corporation or a reverse merger in which we are the surviving corporation but the shares of our stock outstanding immediately preceding the merger are converted by virtue of the merger into other property, or (v) the Company’s stockholders approval of a liquidation or dissolution of the Company.
Outstanding awards do not automatically terminate in the event of a change in control. In the event of a change in control, any surviving corporation or acquiring corporation must either assume or continue outstanding awards or substitute similar awards. Otherwise, the vesting of such awards (and, if applicable, the time during which such awards may be exercised) will be accelerated in full and all forfeiture restrictions on such awards will lapse. The unexercised portion of all outstanding awards subject to exercise may terminate upon the change in control.
If a change in control occurs during a performance period applicable to an outstanding performance-based award, the performance period of the award will end as of the date of the change in control, and the performance goals will be deemed to have been satisfied at the actual level of performance as of the date of the change in control, without proration. To the extent deemed earned by the Committee, such performance-based award will continue to be subject to time-based vesting following the change in control in accordance with the original vesting schedule, subject to acceleration of vesting if the award is not converted, assumed or replaced by a successor entity, as described in the paragraph above.
Termination or Amendment
The Equity Plan will automatically terminate ten years from the most recent approval of the Equity Plan by the Company’s stockholders, unless terminated at an earlier time by the Administrator. The Administrator may terminate or amend the Equity Plan at any time, subject to stockholder approval for any amendment (i) to the extent necessary and desirable to comply with any applicable law, regulation, or stock exchange rule, (ii) to increase the number of shares available under the Equity Plan, (iii) to permit the Compensation Committee or the Board to grant options with a price below the closing price of a share on the date of grant (or, if no closing price was reported on that date, the closing price on the immediately preceding date on which a closing price was reported), or (iv) to extend the exercise period for an option or stock appreciation right beyond ten years from the date of grant. Generally, no termination or amendment of the Equity Plan may adversely affect in any material respect any Award previously granted pursuant to the Equity Plan without the prior written consent of the participant.
Summary of U.S. Federal Income Tax Consequences
The following is a general summary under current law of the material federal income tax consequences to participants in the Equity Plan under U.S. law. This summary deals with the general tax principles that apply and is provided only for general information. Certain types of taxes, such as state and local income taxes and taxes imposed by jurisdictions outside the U.S., are not discussed. Tax laws are complex and subject to change and may vary depending on individual circumstances and from locality to locality. The summary does not discuss all aspects of income taxation that may be relevant to a participant in light of their personal investment circumstances. This summarized tax information is not tax advice.
Section 162(m) of the Code
Section 162(m) of the Code generally limits to $1 million the amount that a publicly held corporation is allowed each year to deduct for the compensation paid to the corporation’s chief executive officer, chief financial officer, and certain of the corporation’s current and former executive officers.
Stock Options
A participant will not recognize taxable income at the time an option is granted, and the Company will not be entitled to a tax deduction at that time. A participant will recognize compensation taxable as ordinary income (and subject to income tax withholding in respect of an employee) upon exercise of a nonqualified stock option equal to the excess of the fair market value of the shares purchased over their purchase price, and the Company will be entitled to a corresponding deduction, except to the extent the deduction limits of Section 162(m) of the Code apply. A participant will not recognize income (except for purposes of the alternative minimum tax) upon exercise of an incentive stock option. If the shares acquired by exercise of an incentive stock option are held for at least two years from the date the option was granted and one year from the date it was exercised, any gain or loss arising from a subsequent disposition of those shares will be taxed as long-term capital gain or loss, and the Company will not be entitled to any deduction. If, however, such shares are disposed of within the above-described period, then in the year of that disposition the participant will recognize compensation taxable as ordinary income equal to
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Summary of U.S. Federal Income Tax Consequences
the excess of the lesser of (i) the amount realized upon that disposition and (ii) the excess of the fair market value of those shares on the date of exercise over the purchase price, and the Company will be entitled to a corresponding deduction, except to the extent the deduction limits of Section 162(m) of the Code apply.
Stock Appreciation Rights
A participant will not recognize taxable income at the time SARs are granted, and the Company will not be entitled to a tax deduction at that time. Upon exercise, the participant will recognize compensation taxable as ordinary income in an amount equal to the fair market value of any shares delivered and the amount of cash paid by the Company. This amount is deductible by the Company as compensation expense, except to the extent the deduction limits of Section 162(m) of the Code apply.
Restricted Stock
A participant will not recognize taxable income at the time restricted stock (including performance-based restricted stock) is granted and the Company will not be entitled to a tax deduction at that time, unless the participant makes an election to be taxed at that time. If such election is made, the participant will recognize compensation taxable as ordinary income at the time of the grant in an amount equal to the excess of the fair market value for the shares at such time over the amount, if any, paid for those shares. If such election is not made, the participant will recognize compensation, taxable as ordinary income at the time the restrictions constituting a substantial risk of forfeiture lapse, in an amount equal to the excess of the fair market value of the shares at such time over the amount, if any, paid for those shares. The amount of ordinary income recognized by making the above-described election or upon the lapse of restrictions is deductible by the Company as compensation expense, except to the extent the deduction limits of Section 162(m) of the Code apply.
Restricted Stock Units
A participant will not recognize taxable income at the time an RSU (including a performance-based RSU) is granted, and the Company will not be entitled to a tax deduction at that time. Upon settlement of RSUs, the participant will recognize compensation taxable as ordinary income in an amount equal to the fair market value of any shares delivered and the amount of any cash paid by the Company. The amount of ordinary income recognized is deductible by the Company as compensation expense, except to the extent the deduction limits of Section 162(m) of the Code apply.
Dividend Equivalents
In general, dividend equivalents are generally taxable as ordinary income when the participant receives a payout of the dividend equivalent, and the Company generally will be entitled to a tax deduction at the same time and in the same amount.
Cash-Based Awards
A participant who receives a cash-based award will realize compensation taxable as ordinary income in an amount equal to the cash paid at the time of such payment. The Company generally will be entitled to a deduction in the same amount and at the same time that the participant recognizes ordinary income.
The tax consequences for equity awards outside of the U.S. may differ significantly from the U.S. federal income tax consequences described above.
New Plan Benefits
No awards made under the Equity Plan prior to the date of the Annual Meeting were granted subject to stockholder approval of this Proposal 3. The future awards to be made under the Equity Plan are subject to the discretion of the Compensation Committee and are therefore not determinable at this time. Moreover, the number of shares that would be earned with respect to any grant may vary based on the achievement of any applicable performance goals, which is not determinable at this time.
The Equity Plan authorizes the grant of discretionary awards to non-employee directors, the terms and conditions of which are determined by the Compensation Committee. Historically, our non-employee directors have received annual equity grants under our equity incentive plans. Under our 2024 Independent Director Compensation Policy, our non-employee directors receive annual equity grants promptly following the date of each annual stockholders meeting in the form of fully vested stock payment awards with a dollar value equal to $275,000, and our Non-Executive Board Chair receives an additional fully vested stock payment award with a dollar value equal to $87,500, in each case based on the closing price of a share on the date the award is granted (or, if no closing price was reported on that date, the closing price on the immediately preceding date on which a closing price was reported). In addition, our non-employee directors may elect to receive their annual retainers in the form of fully vested stock awards.
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Proposal 5: Stockholder Proposal – Report on Charitable Giving
PayPal’s Statement in Opposition
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PAYPAL’S BOARD RECOMMENDS THAT STOCKHOLDERS VOTE AGAINST
THIS PROPOSAL FOR THE FOLLOWING REASONS: |
The report requested by the Proposal is unnecessary and an inefficient use of company resources for the following reasons:
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PayPal’s guidelines regarding charitable giving programs are applied without reference to political or religious viewpoints. |
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PayPal already has robust governance and appropriate disclosure around its corporate charitable giving. |
PayPal’s charitable giving programs are applied without reference to political or religious viewpoints
PayPal facilitates charitable contributions through a variety of qualified organizations and platforms. These include the PayPal Giving Fund (PPGF), a qualified 501(c)(3) organization that receives donations from PayPal and other technology platforms and makes grants to its donors’ recommended charities. PPGF provides a user-driven platform to connect donors and charities, easing administrative burdens and reducing overhead expenses. PayPal also facilitates giving through our commercial products and platforms. For example, as described in our most recent Global Impact Report, in 2023 we enabled our customers’ donations across our products, including through the PayPal Digital Wallet and directly through the Venmo app with Venmo charity profiles. Facilitation of charitable contributions through PPGF and across our other products supports PayPal’s business by enhancing customer engagement, goodwill, and brand exposure.
We also encourage our employees to support nonprofit organizations that are meaningful to them, providing a platform to find charities and make contributions. We offer a 100% company match, up to $2,500, for donations in the form of cash or volunteer time to qualified charities. In January 2025, for example, we launched an employee giving campaign to benefit victims of the Los Angeles wildfires through support organizations such as the LA Regional Food Bank, the California Community Foundation, and the Los Angeles Fire Department Foundation. In October 2024, PayPal provided a donation to the North Carolina Disaster Relief Fund to support recovery efforts in North Carolina after Hurricane Helene. Our Community Impact Grant program strengthens communities where our employees live and work, giving our employees the opportunity to select local charities in their communities that align with our mission of revolutionizing commerce globally by expanding economic opportunity for all.
PayPal also makes charitable contributions by way of direct contributions to nonprofits, sponsorships of charitable benefit events, or pro bono/in-kind contributions and employee engagement. PayPal’s corporate charitable giving is only a small fraction of the giving activity we facilitate through our platforms as described above. Charitable contributions directed by PayPal may be made only to qualified charitable organizations that do not discriminate based on age, ancestry, disability, ethnicity or national origin, genetic information, gender and gender identity and expression, marital status, medical condition, military and veteran status, pregnancy or parental status, race, religious creed of belief, sexual orientation, volunteer participation, or any other legally protected characteristic. We apply these guidelines without reference to political or religious viewpoints.
PayPal already has robust governance and disclosure around its corporate charitable giving
A robust governance framework supports PayPal’s charitable giving programs. All donations must be consistent with the PayPal Code of Business Conduct and Ethics and Anti-Bribery and Corruption policies. With respect to charitable contributions that PayPal makes directly, a cross-functional team, which includes members from our Corporate Strategy, Corporate Affairs, Legal, and Risk and Compliance teams, reviews them for compliance with applicable regulations and internal policies and guidelines, and such contributions are subject to internal approvals based on preestablished contribution levels. Our processes are designed to ensure that charitable contributions are properly vetted and aligned with our business goals and priorities. We review our policies and practices annually to promote appropriate risk oversight and application of best practices.
We disclose highlights of our charitable giving programs in our annual Global Impact Report, including activity of PPGF, employee giving, and customer charitable contributions we enable and encourage via our consumer products and services and corporate partnerships.
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Our Board has carefully considered the Proposal, and for the reasons set forth above, believes that preparing the proposed report would be unnecessary, a waste of company time and resources, and would only distract from PayPal’s charitable giving programs. Accordingly, our Board believes that the Proposal is not in the best interests of PayPal and its stockholders.
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THE BOARD RECOMMENDS A VOTE AGAINST STOCKHOLDER PROPOSAL 5. |
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Proposal 6: Stockholder Proposal – Reduce Threshold to Call Special Meetings of Stockholders
PayPal’s Statement in Opposition
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PAYPAL’S BOARD RECOMMENDS THAT STOCKHOLDERS VOTE AGAINST THIS PROPOSAL FOR THE FOLLOWING REASONS: |
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PayPal’s stockholders already have a meaningful and appropriate right to call a special meeting. |
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PayPal has strong corporate governance policies and practices to protect the best interests of all stockholders. |
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PayPal’s current stockholder special meeting right reflects broader market practice and our current practices are in our stockholders’ best interests. |
PayPal’s stockholders already have a meaningful and appropriate right to call a special meeting
The actions requested by the Proposal are unnecessary. Since PayPal became an independent, publicly traded company in 2015, stockholders who own 20% or more of PayPal’s outstanding common stock have had the right to call a special meeting. Our Board recognizes the importance of providing stockholders with a meaningful ability to call a special meeting of stockholders, which empowers stockholders to collectively participate in the governance of the Company and cast informed votes. While a special meeting provides a forum for consideration of stockholder concerns outside of the annual meeting cycle, it requires the expenditure of considerable time, effort, and resources, including significant legal and administrative fees, costs for preparing, printing, and distributing materials and soliciting proxies, and the diversion of Board and management time away from running PayPal’s business. Consequently, the Board believes that special meetings should be limited to circumstances where stockholders holding a meaningful minority of PayPal’s outstanding shares of common stock believe a matter is significantly urgent or extraordinary to justify considering such matters between annual meetings. Reducing the threshold to call a special meeting from 20% to 10%, as the Proposal requests, could allow a small minority of stockholders to advance narrow or short-term interests that might not be shared by our broader stockholder base. Such misuse of the special meeting may cause disruption in the effective management of our Company and be detrimental to stockholders’ interests.
PayPal has strong corporate governance policies and practices to protect the best interests of all stockholders
PayPal’s established governance policies and practices provide ample opportunities for investors to express their views on the Company and encourage Board accountability and responsiveness to stockholder feedback. The Board considers stockholder engagement an essential element of strong corporate governance and actively engages with our investors with participation from members of the Board throughout the year to solicit and understand their perspectives on our Company. In 2024, we proactively contacted investors representing approximately 62% of our shares held by institutional investors, and holders of approximately 39% of our shares held by institutional investors engaged with us. Our Independent Chair also met with stockholders representing 28% of shares held by institutional investors. We shared information and received feedback on a range of issues including governance, business strategy, executive compensation, human capital management, and risk oversight. In the course of this extensive outreach, no investors expressed concerns nor raised any questions regarding our stockholders’ right to call a special meeting.
PayPal’s current stockholder special meeting right reflects broader market practice and our current practices are in stockholders’ best interests
Consistent with our strong corporate governance practices, our long-standing stockholder special meeting right reflects the significant majority of public company practice. Our current 20% ownership threshold is the same as, or more favorable to stockholders than, 70% of companies in the S&P 500. With this in mind, we believe our existing special meeting right is appropriate in light of market practice.
PayPal’s current governance practices already empower stockholders, promote Board and management accountability, and demonstrate PayPal’s responsiveness to stockholder feedback. When viewed together with our strong corporate governance policies and practices, our robust stockholder engagement program, and the stockholder-friendly governance provisions that we already have in place, our Board believes that our 20% ownership threshold strikes the appropriate balance between providing stockholders with a meaningful opportunity to propose actions for stockholder consideration when appropriate, and protecting against the potential for misuse of this right by a small minority of stockholders who may have narrow, short-term interests, at the cost of a significant commitment of financial resources and Board and management time and attention.
Accordingly, the Board believes the adoption of this proposal is unnecessary and not in the best interests of PayPal or our stockholders.
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THE BOARD RECOMMENDS A VOTE AGAINST STOCKHOLDER PROPOSAL 6. |
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Frequently Asked Questions
Frequently Asked Questions
Proxy Materials
1. Why did I receive these proxy materials?
We have made these materials available to you or delivered paper copies by mail in connection with our Annual Meeting, which will take place exclusively online on Thursday, June 5, 2025. As a stockholder, you are invited to participate in the Annual Meeting via live webcast and vote on the business items described in this proxy statement. This proxy statement includes information that we are required to provide to you under SEC rules and is intended to assist you in voting your shares.
2. What is included in the proxy materials?
The proxy materials include:
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The Notice of the Annual Meeting; |
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This proxy statement for the Annual Meeting; and |
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Our Annual Report on Form 10-K for the fiscal year ended December 31, 2024. |
If you received a paper copy of these materials by mail, the proxy materials also include a proxy card or a voting instruction form for the Annual Meeting. If you received a “Notice of Internet Availability of Proxy Materials” (described in Question 4 below) instead of a paper copy of the proxy materials, see the section entitled “Voting Information” below for information regarding how you can vote your shares.
3. What does it mean if I receive more than one Notice, proxy card or voting instruction form?
It generally means that some of your shares are registered differently or are in more than one account. Please provide voting instructions separately for each Notice, proxy card and voting instruction form you receive.
4. Why did I receive a Notice in the mail regarding the Internet availability of proxy materials instead of a full set of proxy materials?
We are distributing our proxy materials to certain stockholders over the Internet under the “notice and access” approach in accordance with SEC rules. As a result, we are mailing to many of our stockholders a “Notice of Internet Availability of Proxy Materials” (“Notice”) instead of a paper copy of the proxy materials. All stockholders receiving the Notice will have the ability to access the proxy materials over the Internet and may request to receive a paper copy of the proxy materials by mail. Instructions on how to access the proxy materials over the Internet or to request a paper copy may be found in the Notice. In addition, the Notice contains instructions on how you may request access to proxy materials electronically on an ongoing basis or in printed form by mail.
5. How can I access the proxy materials over the Internet?
Your Notice, proxy card or voting instruction form will contain instructions on how to:
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view our proxy materials for the Annual Meeting on the Internet; and |
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instruct us to send our future proxy materials to you electronically by email. |
Our proxy materials are also available on our website at https://investor.pypl.com/financials/annual-reports/default.aspx.
Your Notice, proxy card, or voting instruction form will contain instructions on how you may request access to proxy materials electronically on an ongoing basis. Instead of receiving future copies of our proxy statements and annual reports by mail, stockholders of record and most beneficial owners may elect to receive an email that will provide an electronic link to these documents. Choosing to receive your proxy materials electronically helps us reduce costs and the environmental impact of our Annual Meeting. If you choose to access future proxy materials electronically, you will receive an email with instructions containing a link to the website where those materials are available and a link to the proxy voting website. Your election to receive future proxy materials by email will remain in effect until you revoke it.
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Proxy Materials
6. How may I obtain a paper copy of the proxy materials?
If you receive a paper Notice instead of a paper copy of the proxy materials, the Notice will provide instructions about how to obtain a paper copy of the proxy materials. If you receive the Notice by email, the email will also include instructions about how to obtain a paper copy of the proxy materials. All stockholders of record who do not receive a paper Notice or Notice by email will receive a paper copy of the proxy materials by mail.
7. I share an address with another stockholder, and we received only one paper copy of the proxy materials or Notice. How may I obtain an additional copy?
To reduce the expense of delivering duplicate proxy materials to stockholders who may have more than one account holding PayPal common stock but who share the same address, we have adopted an SEC-approved procedure called “householding.” Under this procedure, we deliver a single copy of the Notice and, if applicable, the proxy materials to certain stockholders having the same last name and address and to individuals with more than one account registered at our transfer agent with the same address, unless contrary instructions have been received from an affected stockholder. This practice helps us conserve natural resources and reduces printing costs, mailing fees and the environmental impact of our Annual Meeting. Stockholders participating in householding will continue to receive separate proxy cards.
If you are a beneficial owner and wish to receive a separate Notice or set of proxy materials, please request those additional materials by contacting your individual bank, broker or other nominee. All stockholders may also request a separate Notice or set of proxy materials for the Annual Meeting by contacting Broadridge Financial Solutions, Inc. (“Broadridge”) at:
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By Internet: www.proxyvote.com |
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By telephone: 1-800-579-1639 |
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By email: sendmaterial@proxyvote.com |
If you request a separate Notice or set of proxy materials by email, please be sure to include your control number in the subject line. A separate Notice or set of proxy materials, as applicable, will be sent promptly following receipt of your request.
If you are a stockholder of record and wish to receive a separate Notice or set of proxy materials, as applicable, in the future, please contact Computershare Shareowner Services LLC, our transfer agent, at:
If you are the beneficial owner of shares held through a bank, broker, or other nominee, and you wish to receive a separate Notice or set of proxy materials, as applicable, in the future, please call Broadridge at:
8. I share an address with another stockholder, and we received more than one paper copy of the proxy materials or the Notice. How do we obtain a single copy in the future?
Stockholders of record sharing an address who are receiving multiple copies of the proxy materials or the Notice, as applicable, and who wish to receive a single copy of such materials in the future may contact Computershare Shareowner Services LLC, our transfer agent, at:
Beneficial owners of shares held through a bank, broker, or other nominee sharing an address who are receiving multiple copies of the proxy materials or the Notice, as applicable, and who wish to receive a single copy of such materials in the future may contact Broadridge at:
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Voting Information
Beneficial Owner
If your shares are held in a brokerage account or by a bank or other holder of record (commonly referred to as holding shares in “street name”), you are considered the “beneficial owner” of those shares. As the beneficial owner, you have the right to direct your broker, bank or other holder of record how to vote your shares during our Annual Meeting.
12. How can I vote my shares without participating in the Annual Meeting?
Whether you are a stockholder of record or a beneficial stockholder, you may direct how your shares are voted without participating in the Annual Meeting. We encourage stockholders to vote well before the Annual Meeting, even if they plan to attend the virtual Annual Meeting. Please make sure that you have your Notice, proxy card or voting instruction form available and carefully follow the instructions. There are three ways to vote by proxy:
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By Internet: vote your shares online at www.proxyvote.com. |
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By telephone: call 1-800-690-6903 or the telephone number on your proxy card or voting instruction form. |
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By mail: complete, sign, and date your proxy card or voting instruction form and return in the postage-paid envelope. |
Internet and telephone voting are available 24 hours a day until 8:59 p.m. Pacific time on Wednesday, June 4, 2025.
13. How can I vote my shares during the Annual Meeting?
The Annual Meeting will be held entirely online to enable greater stockholder attendance and participation globally. Stockholders may participate in the Annual Meeting by visiting the following website:
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www.virtualshareholdermeeting.com/PYPL2025 |
To participate in the Annual Meeting, you will need the 16-digit control number included on the Notice, proxy card or voting instruction form, as applicable.
You may vote your shares electronically during the Annual Meeting, whether you are a stockholder of record or a beneficial stockholder. Even if you plan to participate in the Annual Meeting online, we recommend that you also vote by proxy as described above so that your vote will be counted if you later decide not to participate in the Annual Meeting.
14. May I change my vote or revoke my proxy?
If you are the stockholder of record, you may revoke your proxy at any time before it is voted at the Annual Meeting by:
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submitting a new proxy by Internet, telephone or paper ballot with a later date (which will automatically revoke the earlier proxy); |
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sending written notice of revocation to our Corporate Secretary; or |
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voting in person by attending the virtual Annual Meeting by webcast. |
Participation in the Annual Meeting will not cause your previously granted proxy to be revoked unless you specifically make that request in a manner described in the immediately preceding sentence. For shares you hold beneficially in the name of a broker, bank or other nominee, you may change your vote by submitting new voting instructions to your broker, bank or nominee, or by participating in the meeting and electronically voting your shares during the meeting.
15. What if I return my proxy card but do not provide voting instructions?
If you are a stockholder of record and you return your signed proxy card without giving specific voting instructions, your shares will be voted as recommended by the Board (see Question 9 above).
16. What if I am a beneficial owner and do not give voting instructions to my broker?
If you are a beneficial owner of shares, your broker, bank or other nominee is not permitted to vote on your behalf on the election of directors and other matters to be considered at the Annual Meeting, except for Proposal 4 (the ratification of the appointment of PricewaterhouseCoopers LLP as our independent auditor for 2025), unless you provide specific instructions by completing and returning the voting instruction form or following the instructions provided to you to vote your shares on the Internet or by telephone. If you do not provide voting instructions, your shares will not be voted on any proposal except for Proposal 4. This is called a “broker non-vote.” For your vote to be counted, you will need to communicate your voting decision to your broker, bank or other nominee before the date of the Annual Meeting or vote in person at the virtual Annual Meeting.
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Voting Information
17. Is my vote confidential?
Proxy instructions, ballots and voting tabulations that identify individual stockholders are handled in a manner designed to protect your voting privacy. Your vote will not be disclosed, either within PayPal or to third parties, except: (1) as necessary to meet applicable legal requirements, (2) to allow for the tabulation of votes and certification of the vote, and (3) to facilitate proxy solicitation. To the extent that stockholders provide written comments on their proxy cards, those comments will be forwarded to management.
18. What constitutes a quorum?
The quorum requirement for holding the Annual Meeting and the transaction of business is that holders of a majority of the shares of on stock entitled to vote at the Annual Meeting must be present in person or represented by proxy. All abstentions and broker non-votes are counted as present and entitled to vote for purposes of determining a quorum.
19. Who will bear the cost of soliciting votes for the Annual Meeting?
We will bear the expense of soliciting proxies and have engaged D.F. King & Co., Inc. to solicit proxies for a fee of $19,000, plus a reasonable amount to cover expenses. We will reimburse brokerage houses and other custodians, fiduciaries, and nominees for their reasonable out-of-pocket expenses for forwarding proxy materials to beneficial owners of shares. Our directors, officers, and employees may solicit proxies in person, by mail, by telephone, or by electronic communication. No additional compensation will be paid to our directors, officers or employees for such services.
20. What happens if additional matters are presented at the Annual Meeting?
Other than the seven items of business described in this proxy statement, we are not aware of any other business to be acted upon at the Annual Meeting. If you grant a proxy, the persons named as proxy holders (Alex Chriss, Jamie Miller, Bimal Patel and Brian Y. Yamasaki) will have the discretion to vote your shares on any additional matters properly presented for a vote at the Annual Meeting. If, for any reason, any of the nominees is not available as a candidate for director, the persons named as proxy holders will vote your proxy for such other candidate or candidates as may be nominated by the Board.
21. Where can I find the voting results of the Annual Meeting?
We intend to announce preliminary voting results at the Annual Meeting and will report the final voting results in a Current Report on Form 8-K filed with the SEC within four business days of the Annual Meeting and available at www.sec.gov and on our Investor Relations website.
Attending the Annual Meeting
22. How can I attend the Annual Meeting?
The Annual Meeting will be a completely virtual meeting of stockholders, which will be conducted exclusively online via live webcast. You are entitled to attend and participate in the Annual Meeting only if you were a PayPal stockholder as of the close of business on April 9, 2025, the Record Date, or if you hold a valid proxy for the Annual Meeting.
You will be able to attend the Annual Meeting online and submit your questions during the meeting by visiting www.virtualshareholdermeeting.com/PYPL2025. You also will be able to vote your shares by attending the virtual Annual Meeting online. Interested persons who were not stockholders as of the close of business on April 9, 2025, the Record Date, may view, but not participate, in the Annual Meeting by visiting www.virtualshareholdermeeting.com/PYPL2025. To participate in the Annual Meeting, you will need the 16-digit control number included on your Notice, on your proxy card (if you requested printed materials) or on the instructions that accompanied your proxy materials. Stockholders who wish to submit a question to PayPal prior to the Annual Meeting may do so at www.proxyvote.com before 8:59 p.m. Pacific Time on Wednesday, June 4, 2025. Stockholders will need the 16-digit control number to submit a question. The online meeting will begin promptly at 8:30 a.m. Pacific Time on June 5, 2025. We encourage you to access the meeting prior to the start time. Online check-in will begin at 8:15 a.m. Pacific Time, and you should allow sufficient time for the check-in procedures.
23. What if I have technical difficulties or trouble accessing the virtual meeting website during the check-in time or the meeting?
We will have technicians to assist you if you experience technical difficulties accessing the virtual meeting. If you encounter any difficulties accessing the virtual meeting during the check-in or meeting time, please call the technical support number that will be posted on the Virtual Shareholder Meeting log in page.
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Frequently Asked Questions
Attending the Annual Meeting
24. Why are you holding a virtual meeting instead of a physical meeting?
We have conducted efficient and effective virtual stockholders’ meetings since PayPal became an independent company in 2015. We intend to continue to ensure that our stockholders are afforded the same rights and opportunities to participate virtually as they would at an in-person meeting. The virtual format enables stockholders to attend and participate fully and equally in the Annual Meeting from any geographic location with Internet connectivity. We believe our virtual meeting format encourages attendance and participation by a broader group of stockholders, while also reducing the cost and environmental impact associated with meetings held in person. Please visit www.virtualshareholdermeeting.com/PYPL2025, where you can attend this year’s Annual Meeting and submit questions before and during the meeting. For additional information regarding our virtual Annual Meeting, see the section entitled “Important Information About PayPal’s Virtual Annual Meeting” on page 2 of this proxy statement.
25. Can stockholders ask questions during the Annual Meeting?
Yes. We will answer stockholder questions submitted in advance of, and questions submitted live during, the Annual Meeting, time permitting. Stockholders may submit a question in advance of the meeting before 8:59 p.m. Pacific Time on Wednesday, June 4, 2025 at www.proxyvote.com after logging in with the 16-digit control number included on the Notice, on their proxy card (if they requested printed materials), or on the instructions that accompanied their proxy materials.
Questions may be submitted during the Annual Meeting through www.virtualshareholdermeeting.com/PYPL2025. We will endeavor to answer as many questions submitted by stockholders that comply with the meeting rules of conduct as time permits. We will limit each stockholder to one question so we can answer questions from as many stockholders as possible. Questions should be succinct and cover only one topic. Questions from multiple stockholders on the same topic or that are otherwise related may be grouped, summarized, and answered together. In addition, questions may be edited for brevity and grammatical corrections. We do not intend to address any questions that are, among other things: irrelevant to the business of the Company or to the business of the Annual Meeting; related to material non-public information of the Company; related to personal matters or grievances; derogatory or otherwise in bad taste; repetitious statements already made by another stockholder; in furtherance of the stockholder’s personal or business interests; or out of order or not otherwise suitable for the conduct of the Annual Meeting, in each case as determined by the Board Chair or Corporate Secretary in their reasonable discretion. For additional information regarding our virtual Annual Meeting, see the section entitled “Important Information About PayPal’s Virtual Annual Meeting” on page 2 of this proxy statement.
26. What is the deadline to propose actions for consideration at the 2026 Annual Meeting of Stockholders or to nominate individuals to serve as directors?
Stockholders may present proper proposals for consideration at future stockholder meetings. For a stockholder proposal (other than a director nomination) to be considered for inclusion in our proxy statement and for consideration at our 2026 Annual Meeting of Stockholders (“2026 Annual Meeting”), our Corporate Secretary must receive the written proposal at our principal executive offices no later than December 22, 2025. If we hold our 2026 Annual Meeting more than 30 days before or after the one-year anniversary date of the Annual Meeting, we will disclose the new deadline by which stockholder proposals must be received by any means reasonably determined to inform stockholders. In addition, stockholder proposals must otherwise comply with the requirements of Rule 14a-8 under the Exchange Act. Proposals should be addressed to Corporate Secretary, PayPal Holdings, Inc., 2211 North First Street, San Jose, California 95131. Failure to deliver a proposal in accordance with this procedure may result in the proposal not being deemed timely received.
Our Bylaws also establish an advance notice procedure for stockholders who wish to present a proposal, including the nomination of directors, before an annual meeting of stockholders but do not intend for the proposal to be included in our proxy materials. Our Bylaws provide that the only business that may be conducted at an annual meeting is business that is (1) brought before the meeting by the Company and specified in the notice of a meeting given by or at the direction of our Board, (2) brought before the meeting by or at the direction of our Board or (3) otherwise properly brought before the meeting by a stockholder of record entitled to vote at the annual meeting who has delivered timely written notice to our Corporate Secretary, which notice must contain the information specified in our Bylaws. To be timely for our 2026 Annual Meeting, our Corporate Secretary must receive the written notice by overnight express courier or registered mail, return receipt requested, at our principal executive offices:
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not earlier than the close of business on December 22, 2025; and |
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not later than the close of business on January 21, 2026. |
If we hold our 2026 Annual Meeting more than 25 days before or after the one-year anniversary of the 2025 Annual Meeting, our Corporate Secretary must receive the written notice at our principal executive offices no later than the close of business on the 10th day following the day on which public disclosure of the date of such annual meeting was first made.
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If a stockholder proponent (or its representative) does not appear virtually (for a virtual annual meeting) or in person (for a physical annual meeting) to present their proposal or nomination at such meeting, we are not required to present the proposal for a vote at such meeting.
In addition, our Bylaws permit stockholders to nominate directors for election at an annual meeting of stockholders. To nominate a director, the stockholder must provide the information required by our Bylaws. In addition, the stockholder must give timely notice to our Corporate Secretary in accordance with our Bylaws, which, in general, require that our Corporate Secretary receive the notice within the time period described above for stockholder proposals that are not intended to be included in our proxy statement.
We advise you to review our Bylaws, which contain these and other requirements with respect to advance notice of stockholder proposals and director nominations, including certain information that must be included concerning the stockholder and each proposal and nominee. Our Bylaws were filed with the SEC on October 2, 2023 as an exhibit to our Current Report on Form 8-K and are available at https://investor.pypl.com/financials/sec-filings/default.aspx. You may also contact our Corporate Secretary at our principal executive offices for a copy of the relevant bylaw provisions regarding the requirements for submitting stockholder proposals and nominating director candidates. We will not consider any proposal or nomination that is not timely or otherwise does not meet our Bylaws’ and SEC requirements for submitting a proposal or nomination. We reserve the right to reject, rule out of order, or take other appropriate action with respect to any proposal that does not comply with these and other applicable requirements.
In addition to satisfying the requirements of our Bylaws, including the deadline for notice of director nominations, stockholders who intend to solicit proxies in support of director nominees other than the Company’s nominees must provide notice that sets forth any additional information required by Rule 14a-19 under the Exchange Act no later than January 21, 2026.
27. Where can I find more information about the Company’s SEC filings, governance documents and communicating with the Company and the Board?
SEC Filings and Reports
Our SEC filings, including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and any amendments to those reports, are available free of charge on our Investor Relations website at https://investor.pypl.com/financials/sec-filings/default.aspx.
Corporate Governance Documents
The Governance Guidelines, charters of our principal Board committees, our Code of Business Conduct and Ethics and other key corporate governance documents and materials are available on our Investor Relations website at https://investor.pypl.com/governance/governance-overview/default.aspx.
Communicating with Management and Investor Relations
Stockholders may contact management or Investor Relations through our Investor Relations department by writing to Investor Relations at our principal executive offices at PayPal Holdings, Inc., 2211 North First Street, San Jose, California 95131 or by email at investorrelations@paypal.com.
Communicating with the Board
Our Board has adopted a process by which stockholders or other interested persons may communicate with the Board or any of its members. Stockholders and other interested parties may send communications in writing to any or all directors (including the Board Chair, Board committees or the independent directors as a group) in care of our Corporate Secretary, PayPal Holdings, Inc., 2211 North First Street, San Jose, California 95131. All mail received may be opened and screened for security purposes. Certain items that are unrelated to the duties and responsibilities of the Board will not be forwarded. Such items include, but are not limited to: spam; junk mail, and mass mailings; new product suggestions; resumes and other forms of job inquiries; surveys; and business solicitations or advertisements. In addition, material that is trivial, obscene, unduly hostile, threatening, illegal, or similarly unsuitable items will not be forwarded.
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PayPal Holdings, Inc. 2015 Equity Incentive Award Plan
Appendix B:
PayPal Holdings, Inc. 2015 Equity
Incentive Award Plan
PayPal Holdings, Inc.
2015 Equity Incentive Award Plan
Article 1
Purpose
The purpose of the PayPal Holdings, Inc. 2015 Equity Incentive Award Plan, as it may be further amended and restated from time to time (the “Plan”) is to promote the success and enhance the value of PayPal Holdings, Inc. (the “Company”) by linking the personal interests of the members of the Board, Employees, and Consultants (each as defined below) to those of Company stockholders and by providing such individuals with an incentive for outstanding performance to generate superior returns to Company stockholders. The Plan is further intended to provide flexibility to the Company in its ability to motivate, attract, and retain the services of members of the Board, Employees, and Consultants upon whose judgment, interest, and special effort the successful conduct of the Company’s operation is largely dependent.
Article 2
Definitions and Construction
Wherever the following terms are used in the Plan they shall have the meanings specified below, unless the context clearly indicates otherwise. The singular pronoun shall include the plural where the context so indicates.
2.1 “Assumed Spin-Off Award” means an award granted to certain employees, consultants and directors of the Company, eBay Inc. and their respective subsidiaries under an equity compensation plan maintained by eBay Inc. or a corporation acquired by eBay Inc., which award is assumed by the Company and converted into an Award in connection with the Spin-Off, pursuant to the terms of the Employee Matters Agreement between the Company and eBay Inc., entered into in connection with the Spin-Off, which Assumed Spin-Off Award shall be issued upon the effective time of the Spin-Off.
2.2 “Award” means an Option, a Restricted Stock award, a Stock Appreciation Right award, a Performance Stock Unit award, a Dividend Equivalents award, a Stock Payment award, a Deferred Stock Unit award, a Restricted Stock Unit award or a Performance Bonus Award granted to a Participant pursuant to the Plan, including an Assumed Spin-Off Award.
2.3 “Award Agreement” means any written agreement, contract, or other instrument or document evidencing an Award, including through electronic medium.
2.4 “Board” means the Board of Directors of the Company.
2.5 “Change in Control” means and includes each of the following:
(a) A transaction or series of transactions (other than an offering of Stock to the general public through a registration statement filed with the U.S. Securities and Exchange Commission) whereby any “person” or related “group” of “persons” (as such terms are used in Sections 13(d) and 14(d)(2) of the Exchange Act) (other than the Company, any of its subsidiaries, an employee benefit plan maintained by the Company or any of its subsidiaries or a “person” that, prior to such transaction, directly or indirectly controls, is controlled by, or is under common control with, the Company) directly or indirectly acquires beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act) of securities of the Company possessing more than 50% of the total combined voting power of the Company’s securities outstanding immediately after such acquisition; or
(b) During any period of two consecutive years, individuals who, at the beginning of such period, constitute the Board together with any new director(s) (other than a director designated by a person who shall have entered into an agreement with the Company to effect a transaction described in Section 2.5(a) or Section 2.5(c)) whose election by the Board or nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of the two-year period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof; or
(c) The consummation by the Company (whether directly involving the Company or indirectly involving the Company through one or more intermediaries) of (x) a merger, consolidation, reorganization, or business combination or (y) a sale or other disposition of all or substantially all of the Company’s assets in any single transaction or series of related transactions or (z) the acquisition of assets or stock of another entity, in each case other than a transaction:
(i) Which results in the Company’s voting securities outstanding immediately before the transaction continuing to represent (either by remaining outstanding or by being converted into voting securities of the Company or the person that, as
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a result of the transaction, controls, directly or indirectly, the Company or owns, directly or indirectly, all or substantially all of the Company’s assets or otherwise succeeds to the business of the Company (the Company or such person, the “Successor Entity”)) directly or indirectly, at least a majority of the combined voting power of the Successor Entity’s outstanding voting securities immediately after the transaction, and
(ii) After which no person or group beneficially owns voting securities representing 50% or more of the combined voting power of the Successor Entity; provided, however, that no person or group shall be treated for purposes of this Section 2.5(c)(ii) as beneficially owning 50% or more of combined voting power of the Successor Entity solely as a result of the voting power held in the Company prior to the consummation of the transaction; or
(d) The Company’s stockholders approve a liquidation or dissolution of the Company.
In addition, if the Change in Control constitutes a payment event with respect to any Award which provides for the deferral of compensation and is subject to Section 409A of the Code, to the extent required, the transaction or event described in subsection (a), (b), (c) or (d) with respect to such Award must also constitute a “change in control event” as defined in Treasury Regulation § 1.409A-3(i)(5). The Committee shall have full and final authority, which shall be exercised in its discretion, to determine conclusively whether a Change in Control of the Company has occurred pursuant to the above definition, and the date of the occurrence of such Change in Control and any incidental matters relating thereto.
2.6 “Code” means the U.S. Internal Revenue Code of 1986, as amended.
2.7 “Committee” means the committee of the Board described in Article 12.
2.8 “Consultant” means any consultant or adviser if: (a) the consultant or adviser renders bona fide services to the Company or any Subsidiary; (b) the services rendered by the consultant or adviser are not in connection with the offer or sale of securities in a capital-raising transaction and do not directly or indirectly promote or maintain a market for the Company’s securities; and (c) the consultant or adviser is a natural person.
2.9 “Deferred Stock Unit” means a right to receive a specified number of shares of Stock during specified time periods pursuant to Section 8.5.
2.10 “Director” means a member of the Board.
2.11 “Disability” means that the Participant qualifies to receive long-term disability payments under the Company’s long-term disability insurance program, as it may be amended from time to time, or if Participant is otherwise ineligible to participate in the Company’s long-term disability insurance program or resides outside the United States and no such program exists, means that the Participant is unable to perform his or her duties with the Company or its Subsidiary by reason of a medically determinable physical or mental impairment, as determined by a physician acceptable to the Company, which is permanent in character or which is expected to last for a continuous period of more than six (6) months.
2.12 “Dividend Equivalent” means a right granted to a Participant pursuant to Section 8.3 to receive the equivalent value (in cash or Stock) of dividends paid on Stock.
2.13 “DRO” shall mean a domestic relations order as defined by the Code or Title I of the U.S. Employee Retirement Income Security Act of 1974, as amended from time to time, or the rules thereunder.
2.14 “Effective Date” shall have the meaning set forth in Section 13.1.
2.15 “Eligible Individual” means any person who is an Employee, a Consultant or an Independent Director, as determined by the Committee.
2.16 “Employee” means any person on the payroll records of the Company or a Subsidiary and actively providing services as an employee. Service as a Director or compensation by the Company or a Subsidiary solely for services as a Director shall not be sufficient to constitute “employment” by the Company or a Subsidiary.
2.17 “Equity Restructuring” shall mean a nonreciprocal transaction between the Company and its stockholders, such as a stock dividend, stock split, spin-off, rights offering or recapitalization through a large, nonrecurring cash dividend, that affects the shares of Stock (or other securities of the Company) or the share price of Stock (or other securities) and causes a change in the per share value of the Stock underlying outstanding Awards.
2.18 “Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended.
2.19 “Fair Market Value” means, as of any given date, (a) if Stock is traded on any established stock exchange, the closing price of a share of Stock as reported in the Wall Street Journal (or such other source as the Company may deem reliable for such purposes) for such date, or if no sale occurred on such date, the first trading date immediately prior to such date during which a sale occurred; or (b) if Stock is not traded on an exchange but is quoted on a national market or other quotation system, the last sales price on such date, as reported in the Wall Street Journal (or such other source as the Company may deem reliable for such purposes), or if no sales occurred on such date, then on the date immediately prior to such date on which sales prices are reported; or (c) if Stock is not publicly traded, the fair market value of a share of Stock as established by the Committee acting in good faith.
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2.20 [Reserved]
2.21 “Incentive Stock Option” means an Option that is intended to meet the requirements of Section 422 of the Code or any successor provision thereto.
2.22 “Independent Director” means a Director of the Company who is not an Employee.
2.23 “Non-Employee Director” means a Director of the Company who qualifies as a “Non-Employee Director” as defined in Rule 16b-3(b)(3) under the Exchange Act, or any successor rule.
2.24 “Non-Qualified Stock Option” means an Option that is not intended to be an Incentive Stock Option.
2.25 “Option” means a right granted to a Participant pursuant to Article 5 of the Plan to purchase a specified number of shares of Stock at a specified price during specified time periods. An Option may be either an Incentive Stock Option or a Non-Qualified Stock Option.
2.26 “Participant” means any Eligible Individual who, as a member of the Board, Consultant or Employee, has been granted an Award pursuant to the Plan.
2.27 “Performance Bonus Award” has the meaning set forth in Section 8.7.
2.28 “Performance Criteria” means the criteria that the Committee selects for purposes of establishing the Performance Goal or Performance Goals for a Participant for a Performance Period, determined as follows:
(a) The Performance Criteria that will be used to establish Performance Goals may include, without limitation, any of the following: trading volume; users; customers; total payment volume; revenue; operating income; EBITDA and/or net earnings (either before or after interest, taxes, depreciation and amortization); net income (either before or after taxes); earnings per share; earnings as determined other than pursuant to United States generally accepted accounting principles (“GAAP”); multiples of price to earnings; multiples of price/earnings to growth; return on net assets; return on gross assets; return on equity; return on invested capital; Stock price; cash flow (including, but not limited to, operating cash flow and free cash flow); net or operating margins; economic profit; Stock price appreciation; total stockholder returns; employee productivity; market share; volume; customer satisfaction metrics; net sales; expense levels; sales or licenses of the Company’s assets, including its intellectual property, whether in a particular jurisdiction or territory or globally, or through partnering transactions; implementation, completion or attainment of objectives with respect to research, development, commercialization, products or projects, production volume levels, acquisitions and divestitures and recruiting and maintaining personnel; financing and other capital raising transactions (including sales of the Company’s equity or debt securities, factoring transactions); product revenue growth; gross profit; financial ratios, including those measuring liquidity, activity, profitability or leverage; cost of capital or assets under management; strategic partnerships or transactions (including in-licensing and out-licensing of intellectual property, establishing relationships with commercial entities with respect to the marketing, distribution and sale of the Company’s products (including with group purchasing organizations, distributors and other vendors)); co-development, co-marketing, profit sharing, joint venture or other similar arrangements; economic value-added models or equivalent metrics; regulatory achievements (including submitting or filing applications or other documents with regulatory authorities or receiving approval of any such applications or other documents, passing pre-approval inspections (whether of the Company or third parties)); gross or cash margins; debt reduction; reductions in costs; year-end cash; working capital levels, including cash, inventory and accounts receivable; research and development achievements; operating efficiencies and employee engagement/satisfaction metrics, any of which may be measured with respect to the Company, or any Subsidiary, affiliate or other business unit of the Company, either in absolute terms, terms of growth or as compared to any incremental increase, as compared to results of a peer group, and may be calculated on a pro forma basis or in accordance with GAAP.
(b) The Committee may, in its discretion, provide that one or more adjustments shall be made to one or more of the Performance Goals. Such adjustments may include, without limitation, one or more of the following: (i) items related to a change in accounting principle; (ii) items relating to financing activities; (iii) expenses for restructuring or productivity initiatives; (iv) other non-operating items; (v) items related to acquisitions; (vi) items attributable to the business operations of any entity acquired by the Company during the Performance Period; (vii) items related to the disposal of a business or segment of a business; (viii) items related to discontinued operations that do not qualify as a segment of a business under GAAP; (ix) items attributable to any stock dividend, stock split, combination or exchange of shares occurring during the Performance Period; (x) any other items of significant income or expense which are determined to be appropriate adjustments; (xi) items relating to unusual or extraordinary corporate transactions, events or developments; (xii) items related to amortization of acquired intangible assets; (xiii) items that are outside the scope of the Company’s core, on-going business activities; or (xiv) items relating to any other unusual or nonrecurring events or changes in applicable laws, tax rates, accounting principles or business conditions.
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2.29 “Performance Goals” means, for a Performance Period, the goals established in writing by the Committee for the Performance Period based upon the Performance Criteria. Depending on the Performance Criteria used to establish such Performance Goals, the Performance Goals may be expressed in terms of overall Company performance or the performance of a division, business unit, or an individual. The Committee, in its discretion, may adjust or modify the calculation of Performance Goals for such Performance Period in order to prevent the dilution or enlargement of the rights of Participants (a) in the event of, or in anticipation of, any unusual or extraordinary corporate item, transaction, event, or development, or (b) in recognition of, or in anticipation of, any other unusual or nonrecurring events affecting the Company, or the financial statements of the Company, or in response to, or in anticipation of, changes in applicable laws, regulations, accounting principles, or business conditions.
2.30 “Performance Period” means the one or more periods of time, which may be of varying and overlapping durations, as the Committee may select, over which the attainment of one or more Performance Goals will be measured for the purpose of determining a Participant’s right to, and the payment of, a performance-based Award.
2.31 “Performance Share” means a right granted to a Participant pursuant to Section 8.1, to receive Stock, the payment of which is contingent upon achieving certain Performance Goals or other performance-based targets established by the Committee.
2.32 “Performance Stock Unit” means a right granted to a Participant pursuant to Section 8.2, to receive Stock, the payment of which is contingent upon achieving certain Performance Goals or other performance-based targets established by the Committee.
2.33 “Plan” means this PayPal Holdings, Inc. Amended and Restated 2015 Equity Incentive Award Plan, as it may be amended from time to time.
2.34 “Restricted Stock” means Stock awarded to a Participant pursuant to Article 6 that is subject to certain restrictions and may be subject to risk of forfeiture.
2.35 “Restricted Stock Unit” means an Award granted pursuant to Section 8.6.
2.36 “Securities Act” shall mean the U.S. Securities Act of 1933, as amended.
2.37 “Spin-Off” means the distribution of shares of Stock to the stockholders of eBay Inc. on July 17, 2015, pursuant to the Separation and Distribution Agreement between the Company and eBay Inc., dated as of June 26, 2015, entered into in connection with such distribution.
2.38 “Stock” means the common stock of the Company, par value $0.0001 per share, and such other securities of the Company that may be substituted for Stock pursuant to Article 12.
2.39 “Stock Appreciation Right” or “SAR” means a right granted pursuant to Article 7 to receive a payment equal to the excess of the Fair Market Value of a specified number of shares of Stock on the date the SAR is exercised over the Fair Market Value on the date the SAR was granted as set forth in the applicable Award Agreement.
2.40 “Stock Payment” means (a) a payment in the form of shares of Stock, or (b) an option or other right to purchase shares of Stock, as part of any bonus, deferred compensation or other arrangement, made in lieu of all or any portion of a benefit or compensation, granted pursuant to Section 8.4.
2.41 “Subsidiary” means any entity (other than the Company), whether domestic or foreign, in an unbroken chain of entities beginning with the Company if, at the time of the determination, each of the entities other than the last entity in the unbroken chain beneficially owns securities or interests representing more than fifty percent (50%) of the total combined voting power of all classes of securities or interests in one of the other entities in such chain.
2.42 “Substitute Award” shall mean an Option or SAR granted under the Plan upon the assumption of, or in substitution for, outstanding equity awards previously granted by a company or other entity in connection with a corporate transaction, such as a merger, combination, consolidation or acquisition of property or stock; provided, however, that in no event shall the term “Substitute Award” be construed to refer to an award made in connection with the cancellation and repricing of an Option.
2.43 “Termination of Service” shall mean,
(a) As to a Consultant, the time when the engagement of a Participant as a Consultant to the Company or a Subsidiary is terminated for any reason, with or without cause, including, without limitation, by resignation, discharge, death or retirement, but excluding a termination where there is a simultaneous commencement of employment with the Company or any Subsidiary.
(b) As to a Non-Employee Director or Independent Director, the time when a Participant who is a Non-Employee Director or Independent Director ceases to be a Director for any reason, including, without limitation, a termination by resignation, failure to be elected, death or retirement, but excluding: (i) a termination where there is simultaneous employment by the Company or a Subsidiary of such person and (ii) a termination which is followed by the simultaneous establishment of a consulting relationship by the Company or a Subsidiary with such person.
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(c) As to an Employee, the time when the Participant has ceased to actively be employed by or to provide services to the Company or any Subsidiary for any reason, without limitation, including resignation, discharge, death, disability or retirement; but excluding: (i) a termination where there is a simultaneous reemployment or continuing employment of a Participant by the Company or any Subsidiary, (ii) a termination which is followed by the simultaneous establishment of a consulting relationship by the Company or a Subsidiary with the former employee, and (iii) a termination where a Participant simultaneously becomes an Independent Director.
(d) The Committee, in its absolute discretion, shall determine the effect of all matters and questions relating to Termination of Service, including, without limitation, questions relating to the nature and type of Termination of Service, and all questions of whether particular leaves of absence constitute Termination of Service; provided, however, that, with respect to Incentive Stock Options, unless the Committee otherwise provides in the terms of the Award Agreement, a leave of absence, change in status from an employee to an independent contractor or other change in the employee-employer relationship shall constitute a Termination of Service if, and to the extent that, such leave of absence, change in status or other change interrupts employment for the purposes of Section 422(a)(2) of the Code and the then applicable regulations and revenue rulings under said Section. For purposes of the Plan, a Participant shall be deemed to have a Termination of Service in the event that the Subsidiary employing or contracting with such Participant ceases to remain a Subsidiary following any merger, sale of stock or other corporate transaction or event (including, without limitation, a spin-off).
Article 3
Shares Subject to the Plan
3.1 Number of Shares.
(a) Subject to Article 11 and Section 3.1(b), the aggregate number of shares of Stock which may be issued or transferred pursuant to Awards granted under the Plan is 214,600,000 which includes the aggregate number of shares of Stock subject to all Assumed Spin-Off Awards. Any shares of Stock that are subject to Awards granted under the Plan on or after the 2024 annual meeting of the Company’s stockholders (the “2024 Annual Meeting”) shall be counted against this limit as one (1) share for every share of Stock subject to the Award granted.
(b) To the extent that an Award terminates, expires, or lapses for any reason, or such an Award is settled in cash without delivery of shares to the Participant, then any shares of Stock subject to the Award shall again be available for the grant of an Award pursuant to the Plan. Any such shares of Stock that cease to be subject to an Award shall be added to the number of shares available under the Plan as one (1) share for every share of Stock that ceases to be subject to such Award. Notwithstanding anything in this Section 3.1(b) to the contrary, shares of Stock subject to an Award may not again be made available for issuance under this Plan if such shares are: (x) shares delivered to or withheld by the Company to pay the exercise price of an Option or SAR, (y) shares delivered to or withheld by the Company to satisfy withholding taxes related to such an Award or (z) shares that were subject to an Award and were not issued upon the net settlement of such Award. To the extent permitted by applicable law or any exchange rule, shares of Stock issued in assumption of, or in substitution for, any outstanding Awards of any entity acquired in any form of combination by the Company or any Subsidiary shall not be counted against shares of Stock available for grant pursuant to this Plan. The payment of Dividend Equivalents in cash in conjunction with any outstanding Awards shall not be counted against the shares available for issuance under the Plan. Notwithstanding the provisions of this Section 3.1(b), no shares of Stock may again be optioned, granted or awarded if such action would cause an Incentive Stock Option to fail to qualify as an incentive stock option under Section 422 of the Code.
3.2 Stock Distributed. Any Stock distributed pursuant to an Award may consist, in whole or in part, of authorized and unissued Stock, treasury Stock or Stock purchased on the open market.
3.3 Limitation on Number of Shares Subject to Awards. Notwithstanding any provision in the Plan to the contrary, and subject to Article 11, the maximum number of shares of Stock with respect to one or more Awards that may be granted to any one Participant during any calendar year shall be 2,000,000 and the maximum amount that may be paid in cash during any calendar year with respect to any performance-based Award (including, without limitation, any Performance Bonus Award) shall be $3,000,000; provided, however, that such limits shall apply without regard to the Assumed Spin-Off Awards. Any shares of Stock that are subject to Awards granted under the Plan on or after the 2024 Annual Meeting shall be counted against this limit as one (1) share for every share of Stock subject to the Award granted. Awards to Non-Employee Directors and Independent Directors are subject to the limits set forth in Article 10.
Article 4
Eligibility and Participation
4.1 Participation. Subject to the provisions of the Plan, the Committee may, from time to time, and in its sole discretion, select from among all Eligible Individuals, those to whom Awards shall be granted and shall determine the nature and amount of each Award. No Eligible Individual shall have any right to be granted an Award pursuant to this Plan. In connection with the
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Spin-Off and pursuant to the terms of the Employee Matters Agreement between the Company and eBay Inc., entered into in connection with the Spin-Off, certain employees, consultants and directors of the Company, eBay Inc. and their respective subsidiaries will receive Assumed Spin-Off Awards.
4.2 Foreign Participants. Notwithstanding any provision of the Plan to the contrary, in order to comply with the laws in other countries in which the Company and its Subsidiaries operate or have Eligible Individuals, the Committee, in its sole discretion, shall have the power and authority to: (i) determine which Subsidiaries shall be covered by the Plan; (ii) determine which Eligible Individuals outside the United States are eligible to participate in the Plan; (iii) modify the terms and conditions of any Award granted to Eligible Individuals outside the United States to comply with applicable foreign laws; (iv) establish subplans and modify exercise procedures and other terms and procedures, to the extent such actions may be necessary or advisable, including adoption of rules, procedures or sub-plans applicable to particular Subsidiaries or Participants residing in particular locations; provided, however, that no such subplans and/or modifications shall increase the share limitations contained in Sections 3.1 and 3.3 of the Plan; and (v) take any action, before or after an Award is made, that it deems advisable to obtain approval or comply with any necessary local governmental regulatory exemptions or approvals. Without limiting the generality of the foregoing, the Committee is specifically authorized to adopt rules, procedures and sub-plans with provisions that limit or modify rights on eligibility to receive an Award under the Plan or on death, disability, retirement or other Termination of Service, available methods of exercise or settlement of an Award, payment of income, social insurance contributions and payroll taxes, the shifting of employer tax liability to the Participant, the withholding procedures and handling of any Stock certificates or other indicia of ownership. Notwithstanding the foregoing, the Committee may not take any actions hereunder, and no Awards shall be granted, that would violate the Exchange Act, the Code, any securities law or governing statute or any other law applicable to the Stock or the issuance of Stock under the Plan.
Article 5
Stock Options
5.1 General. The Committee is authorized to grant Options to Eligible Individuals on the following terms and conditions:
(a) Exercise Price. The exercise price per share of Stock subject to an Option shall be determined by the Committee and set forth in the Award Agreement; provided, that, subject to Section 5.4, the exercise price for any Option shall not be less than 100% of the Fair Market Value of a share of Stock on the date of grant.
(b) Time and Conditions of Exercise. The Committee shall determine the time or times at which an Option may be exercised in whole or in part; provided, that the term of any Option granted under the Plan shall not exceed ten years. The Committee shall determine the time period, including the time period following a Termination of Service, during which the Participant has the right to exercise the vested Options, which time period may not extend beyond the term of the Option. Except as limited by the requirements of Section 409A or Section 422 of the Code and regulations and rulings thereunder, the Committee may extend the term of any outstanding Option, and may extend the time period during which vested Options may be exercised, in connection with any Termination of Service of the Participant, and may amend any other term or condition of such Option relating to such a Termination of Service. The Committee shall also determine the performance or other conditions, if any, that must be satisfied before all or part of an Option may be exercised.
(c) Evidence of Grant. All Options shall be evidenced by an Award Agreement between the Company and the Participant. The Award Agreement shall include such additional provisions as may be specified by the Committee.
5.2 Incentive Stock Options. Incentive Stock Options shall be granted only to Employees and the terms of any Incentive Stock Options granted pursuant to the Plan, in addition to the requirements of Section 5.1, must comply with the provisions of this Section 5.2.
(a) Expiration. Subject to Section 5.2(c), an Incentive Stock Option shall expire and may not be exercised to any extent by anyone after the first to occur of the following events:
(i) Ten years from the date it is granted, unless an earlier time is set in the Award Agreement;
(ii) Three months after the Participant’s termination of employment as an Employee; and
(iii) One year after the date of the Participant’s termination of employment or service on account of Disability or death. Upon the Participant’s Disability or death, any Incentive Stock Options exercisable at the Participant’s Disability or death may be exercised by the Participant’s legal representative or representatives, by the person or persons entitled to do so pursuant to the Participant’s last will and testament, or, if the Participant fails to make testamentary disposition of such Incentive Stock Option or dies intestate, by the person or persons entitled to receive the Incentive Stock Option pursuant to the applicable laws of descent and distribution.
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(b) Dollar Limitation. The aggregate Fair Market Value (determined as of the time the Option is granted) of all shares of Stock with respect to which Incentive Stock Options are first exercisable by a Participant in any calendar year may not exceed $100,000 or such other limitation as imposed by Section 422(d) of the Code, or any successor provision. To the extent that Incentive Stock Options are first exercisable by a Participant in excess of such limitation, the excess shall be considered Non-Qualified Stock Options.
(c) Ten Percent Owners. An Incentive Stock Option shall be granted to any individual who, at the date of grant, owns stock possessing more than ten percent of the total combined voting power of all classes of Stock of the Company only if such Option is granted at a price that is not less than 110% of Fair Market Value on the date of grant (or the date the Option is modified, extended or renewed for purposes of Section 424(h) of the Code) and the Option is exercisable for no more than five years from the date of grant.
(d) Notice of Disposition. The Participant shall give the Company prompt notice of any disposition of shares of Stock acquired by exercise of an Incentive Stock Option within (i) two years from the date of grant of such Incentive Stock Option or (ii) one year after the transfer of such shares of Stock to the Participant.
(e) Right to Exercise. During a Participant’s lifetime, an Incentive Stock Option may be exercised only by the Participant.
(f) Failure to Meet Requirements. Any Option (or portion thereof) purported to be an Incentive Stock Option, which, for any reason, fails to meet the requirements of Section 422 of the Code shall be considered a Non-Qualified Stock Option.
5.3 Substitution of Stock Appreciation Rights. Subject to Section 9.8, the Committee may provide in the Award Agreement evidencing the grant of an Option that the Committee, in its sole discretion, shall have to right to substitute a Stock Appreciation Right for such Option at any time prior to or upon exercise of such Option; provided, that such Stock Appreciation Right shall be exercisable with respect to the same number of shares of Stock for which such substituted Option would have been exercisable.
5.4 Substitute Awards. Notwithstanding the foregoing provisions of this Article 5 to the contrary, in the case of an Option that is a Substitute Award, the exercise price per share of the shares subject to such Option may be less than the Fair Market Value per share on the date of grant, provided, that the excess of: (a) the aggregate Fair Market Value (as of the date such Substitute Award is granted) of the shares subject to the Substitute Award, over (b) the aggregate exercise price thereof does not exceed the excess of: (x) the aggregate fair market value (as of the time immediately preceding the transaction giving rise to the Substitute Award, such fair market value to be determined by the Committee) of the shares of the predecessor entity that were subject to the grant assumed or substituted for by the Company, over (y) the aggregate exercise price of such shares.
Article 6
Restricted Stock Awards
6.1 Grant of Restricted Stock.
(a) The Committee is authorized to make Awards of Restricted Stock to any Eligible Individual selected by the Committee in such amounts and subject to such terms and conditions as determined by the Committee. All Awards of Restricted Stock shall be evidenced by an Award Agreement.
(b) The Committee shall establish the purchase price, if any, and form of payment for Restricted Stock; provided, however, that such purchase price shall be no less than the par value of the Stock to be purchased, unless otherwise permitted by applicable state law. In all cases, legal consideration shall be required for each issuance of Restricted Stock.
6.2 Issuance and Restrictions. All shares of Restricted Stock (including any shares received by Participants thereof with respect to shares of Restricted Stock as a result of stock dividends, stock splits or any other form of recapitalization) shall, in the terms of each individual Award Agreement, be subject to such restrictions on transferability and other restrictions and vesting requirements as the Committee shall provide. Such restrictions may include, without limitation, restrictions concerning voting rights and transferability and such restrictions may lapse separately or in combination at such times and pursuant to such circumstances or based on such criteria as selected by the Committee, including, without limitation, criteria based on the Participant’s duration of employment, directorship or consultancy with the Company, Performance Criteria, Company performance, individual performance or other criteria selected by the Committee. By action taken after the Restricted Stock is issued, the Committee may, on such terms and conditions as it may determine to be appropriate, accelerate the vesting of such Restricted Stock by removing any or all of the restrictions imposed by the terms of the Award Agreement. Restricted Stock may not be sold or encumbered until all restrictions are terminated or expire.
6.3 Repurchase or Forfeiture of Restricted Stock. If no price was paid by the Participant for the Restricted Stock, upon a Termination of Service the Participant’s rights in unvested Restricted Stock then subject to restrictions shall lapse, and such Restricted Stock shall be surrendered to the Company without consideration. If a price was paid by the Participant for the
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Restricted Stock, upon a Termination of Service the Company shall have the right to repurchase from the Participant the unvested Restricted Stock then subject to restrictions at a cash price per share equal to the price paid by the Participant for such Restricted Stock or such other amount as may be specified in the Award Agreement. The Committee in its discretion may provide that in the event of certain events, including a Change in Control, the Participant’s death, retirement or disability or any other specified Termination of Service or any other event, the Participant’s rights in unvested Restricted Stock shall not lapse, such Restricted Stock shall vest and, if applicable, the Company shall not have a right of repurchase.
6.4 Certificates for Restricted Stock. Restricted Stock granted pursuant to the Plan may be evidenced in such manner as the Committee shall determine. If certificates representing shares of Restricted Stock are registered in the name of the Participant, certificates must bear an appropriate legend referring to the terms, conditions, and restrictions applicable to such Restricted Stock, and the Company may, at its discretion, retain physical possession of the certificate until such time as all applicable restrictions lapse.
6.5 Section 83(b) Election. If a Participant makes an election under Section 83(b) of the Code to be taxed with respect to the Restricted Stock as of the date of transfer of the Restricted Stock rather than as of the date or dates upon which the Participant would otherwise be taxable under Section 83(a) of the Code, the Participant shall be required to deliver a copy of such election to the Company promptly after filing such election with the Internal Revenue Service.
Article 7
Stock Appreciation Rights
7.1 Grant of Stock Appreciation Rights.
(a) A Stock Appreciation Right may be granted to any Eligible Individual selected by the Committee. A Stock Appreciation Right shall be subject to such terms and conditions not inconsistent with the Plan as the Committee shall impose and shall be evidenced by an Award Agreement.
(b) A Stock Appreciation Right shall entitle the Participant (or other person entitled to exercise the Stock Appreciation Right pursuant to the Plan) to exercise all or a specified portion of the Stock Appreciation Right (to the extent then exercisable pursuant to its terms) and to receive from the Company an amount equal to the product of (i) the excess of (A) the Fair Market Value of the Stock on the date the Stock Appreciation Right is exercised over (B) the Fair Market Value of the Stock on the date the Stock Appreciation Right was granted and (ii) the number of shares of Stock with respect to which the Stock Appreciation Right is exercised, subject to any limitations the Committee may impose. Except as described in (c) below, the exercise price per share of Stock subject to each Stock Appreciation Right shall be set by the Committee, but shall not be less than 100% of the Fair Market Value on the date the Stock Appreciation Right is granted.
(c) Notwithstanding the foregoing provisions of Section 7.1(b) to the contrary, in the case of a Stock Appreciation Right that is a Substitute Award, the price per share of the shares subject to such Stock Appreciation Right may be less than the Fair Market Value per share on the date of grant; provided, that the excess of: (a) the aggregate Fair Market Value (as of the date such Substitute Award is granted) of the shares subject to the Substitute Award, over (b) the aggregate exercise price thereof does not exceed the excess of: (x) the aggregate fair market value (as of the time immediately preceding the transaction giving rise to the Substitute Award, such fair market value to be determined by the Committee) of the shares of the predecessor entity that were subject to the grant assumed or substituted for by the Company, over (y) the aggregate exercise price of such shares.
7.2 Payment and Limitations on Exercise.
(a) Subject to Sections 7.2(b) payment of the amounts determined under Section 7.1(b) above shall be in cash, in Stock (based on its Fair Market Value as of the date the Stock Appreciation Right is exercised) or a combination of both, as determined by the Committee in the Award Agreement and subject to any tax withholding requirements.
(b) To the extent any payment under Section 7.1(b) is effected in Stock, it shall be made subject to satisfaction of all provisions of Article 5 above pertaining to Options.
Article 8
Other Types of Awards
8.1 Performance Share Awards. Any Eligible Individual selected by the Committee may be granted one or more Performance Share awards which shall be denominated in a number of shares of Stock and which may be linked to any one or more of the Performance Criteria or other specific performance criteria determined appropriate by the Committee, in each case on a specified date or dates or over any period or periods determined by the Committee. In making such determinations, the Committee shall consider (among such other factors as it deems relevant in light of the specific type of award) the contributions, responsibilities and other compensation of the particular Participant.
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8.2 Performance Stock Units. Any Eligible Individual selected by the Committee may be granted one or more Performance Stock Unit awards which shall be denominated in unit equivalent of shares of Stock and/or units of value including dollar value of shares of Stock and which may be linked to any one or more of the Performance Criteria or other specific performance criteria determined appropriate by the Committee, in each case on a specified date or dates or over any period or periods determined by the Committee. In making such determinations, the Committee shall consider (among such other factors as it deems relevant in light of the specific type of award) the contributions, responsibilities and other compensation of the particular Participant.
8.3 Dividend Equivalents.
(a) Any Eligible Individual selected by the Committee may be granted Dividend Equivalents based on the dividends declared on the shares of Stock that are subject to any Award, to be credited as of dividend payment dates, during the period between the date the Award is granted and the date the Award is exercised, vests or expires, as determined by the Committee. Such Dividend Equivalents shall be converted to cash or additional shares of Stock by such formula and at such time and subject to such limitations as may be determined by the Committee; provided, that to the extent shares of Stock subject to an Award are subject to vesting conditions, any Dividend Equivalents relating to such shares shall be subject to the same vesting conditions.
(b) Notwithstanding the foregoing, no Dividend Equivalents shall be payable with respect to Options or SARs.
8.4 Stock Payments. Any Eligible Individual selected by the Committee may receive Stock Payments in the manner determined from time to time by the Committee. The number of shares shall be determined by the Committee and may be based upon the Performance Criteria or other specific performance criteria determined appropriate by the Committee, determined on the date such Stock Payment is made or on any date thereafter.
8.5 Deferred Stock Units. Any Eligible Individual selected by the Committee may be granted an award of Deferred Stock Units in the manner determined from time to time by the Committee. The number of shares of Deferred Stock Units shall be determined by the Committee and may be linked to the Performance Criteria or other specific performance criteria determined to be appropriate by the Committee, including service to the Company or any Subsidiary, in each case on a specified date or dates or over any period or periods determined by the Committee. Stock underlying a Deferred Stock Unit award will not be issued until the Deferred Stock Unit award has vested, pursuant to a vesting schedule or performance criteria set by the Committee. Unless otherwise provided by the Committee, a Participant awarded Deferred Stock Units shall have no rights as a Company stockholder with respect to such Deferred Stock Units until such time as the Deferred Stock Unit Award has vested and the Stock underlying the Deferred Stock Unit Award has been issued.
8.6 Restricted Stock Units. The Committee is authorized to make Awards of Restricted Stock Units to any Eligible Individual selected by the Committee in such amounts and subject to such terms and conditions as determined by the Committee. At the time of grant, the Committee shall specify the date or dates on which the Restricted Stock Units shall become fully vested and nonforfeitable, and may specify such conditions to vesting as it deems appropriate. The Committee shall specify, or permit the Participant to elect, the conditions and dates upon which the shares of Stock underlying the Restricted Stock Units shall be issued, which dates shall not be earlier than the date as of which the Restricted Stock Units vest and become nonforfeitable and which conditions and dates shall be subject to compliance with Section 409A of the Code. On the distribution dates, the Company shall, subject to Section 9.6(b), transfer to the Participant one unrestricted, fully transferable share of Stock for each Restricted Stock Unit scheduled to be paid out on such date and not previously forfeited.
8.7 Performance Bonus Awards. Any Eligible Individual selected by the Committee may be granted one or more performance-based Awards in the form of a cash bonus (a “Performance Bonus Award”) payable upon the attainment of Performance Goals that are established by the Committee and relate to one or more of the Performance Criteria, in each case on a specified date or dates or over any period or periods determined by the Committee.
8.8 Term. Except as otherwise provided herein, the term of any Award of Performance Shares, Performance Stock Units, Dividend Equivalents, Stock Payments, Deferred Stock Units or Restricted Stock Units shall be set by the Committee in its discretion.
8.9 Exercise or Purchase Price. The Committee may establish the exercise or purchase price, if any, of any Award of Performance Shares, Performance Stock Units, Deferred Stock Units, Stock Payments or Restricted Stock Units; provided, however, that such price shall not be less than the par value of a share of Stock on the date of grant, unless otherwise permitted by applicable state law.
8.10 Exercise or Payment upon Termination of Service. An Award of Performance Shares, Performance Stock Units, Dividend Equivalents, Deferred Stock Units, Stock Payments and Restricted Stock Units shall only be exercisable or payable while the Participant is an Employee, Consultant or Director, as applicable; provided, however, that the Committee in its sole and absolute discretion may provide that an Award of Performance Shares, Performance Stock Units, Dividend Equivalents, Stock Payments, Deferred Stock Units or Restricted Stock Units may be exercised or paid subsequent to a Termination of Service, as applicable, or following a Change in Control of the Company, or because of the Participant’s retirement, death or disability, or otherwise.
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8.11 Form of Payment. Payments with respect to any Awards granted under this Article 8 shall be made in cash, in Stock or a combination of both, as determined by the Committee and set forth in the applicable Award Agreement.
8.12 Award Agreement. All Awards under this Article 8 shall be subject to such additional terms and conditions as determined by the Committee and shall be evidenced by an Award Agreement
Article 9
Provisions Applicable to Awards
9.1 Stand-Alone and Tandem Awards. Awards granted pursuant to the Plan may, in the discretion of the Committee, be granted either alone, in addition to, or in tandem with, any other Award granted pursuant to the Plan. Awards granted in addition to or in tandem with other Awards may be granted either at the same time as or at a different time from the grant of such other Awards.
9.2 Award Agreement. Awards under the Plan shall be evidenced by Award Agreements that set forth the terms, conditions and limitations for each Award which may include the term of an Award, the provisions applicable in the event the Participant’s employment or service terminates, and the Company’s authority to unilaterally or bilaterally amend, modify, suspend, cancel or rescind an Award.
9.3 Payment. The Committee shall determine the methods by which payments by any Participant with respect to any Awards granted under the Plan may be paid, the form of payment including, without limitation: (i) cash, (ii) shares of Stock (including, in the case of payment of the exercise price of an Award, shares of Stock issuable pursuant to the exercise of the Award) held for such period of time as may be required by the Committee in order to avoid adverse accounting consequences and having a Fair Market Value on the date of delivery equal to the aggregate payments required, or (iii) other property acceptable to the Committee (including through the delivery of a notice that the Participant has placed a market sell order with a broker with respect to shares of Stock then issuable upon exercise or vesting of an Award, and that the broker has been directed to pay a sufficient portion of the net proceeds of the sale to the Company in satisfaction of the aggregate payments required; provided, that payment of such proceeds is then made to the Company upon settlement of such sale). The Committee shall also determine the methods by which shares of Stock shall be delivered or deemed to be delivered to Participants. Notwithstanding any other provision of the Plan to the contrary, no Participant who is a Director or an “executive officer” of the Company within the meaning of Section 13(k) of the Exchange Act shall be permitted to pay the exercise price of an Option with a loan from the Company or a loan arranged by the Company in violation of Section 13(k) of the Exchange Act.
9.4 Limits on Transfer.
(a) Except as otherwise provided in Section 9.4(b):
(i) No Award under the Plan may be sold, pledged, assigned or transferred in any manner other than by will or the laws of descent and distribution or, subject to the consent of the Committee, pursuant to a DRO, unless and until such Award has been exercised, or the shares underlying such Award have been issued, and all restrictions applicable to such shares have lapsed;
(ii) No Award or interest or right therein shall be liable for the debts, contracts or engagements of the Participant or his successors in interest or shall be subject to disposition by transfer, alienation, anticipation, pledge, hypothecation, encumbrance, assignment or any other means whether such disposition be voluntary or involuntary or by operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy), and any attempted disposition thereof shall be null and void and of no effect, except to the extent that such disposition is permitted by the preceding sentence; and
(iii) During the lifetime of the Participant, only the Participant may exercise an Award (or any portion thereof) granted to him under the Plan, unless it has been disposed of pursuant to a DRO; after the death of the Participant, any exercisable portion of an Award may, prior to the time when such portion becomes unexercisable under the Plan or the applicable Award Agreement, be exercised by his personal representative or by any person empowered to do so under the deceased Participant’s will or under the then applicable laws of descent and distribution.
(b) Notwithstanding Section 9.4(a), the Committee, in its sole discretion, may determine to permit a Participant to transfer an Award other than an Incentive Stock Option to any one or more Permitted Transferees (as defined below), subject to the following terms and conditions: (i) an Award transferred to a Permitted Transferee shall not be assignable or transferable by the Permitted Transferee other than by will or the laws of descent and distribution; (ii) an Award transferred to a Permitted Transferee shall continue to be subject to all the terms and conditions of the Award as applicable to the original Participant (other than the ability to further transfer the Award); and (iii) the Participant and the Permitted Transferee shall execute any and all documents requested by the Committee, including, without limitation documents to (A) confirm the status of the transferee as a Permitted Transferee, (B) satisfy any requirements for an exemption for the transfer under applicable
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federal, state and foreign securities laws and (C) evidence the transfer. For purposes of this Section 9.4(b), “Permitted Transferee” shall mean, with respect to a Participant, any “family member” of the Participant, as defined under the instructions to the Form S-8 Registration Statement under the Securities Act, or any other transferee specifically approved by the Committee after taking into account any state, federal, local or foreign tax and securities laws applicable to transferable Awards.
9.5 Beneficiaries. Notwithstanding Section 9.4, if provided in the applicable Award Agreement, a Participant may, in the manner determined by the Committee, designate a beneficiary to exercise the rights of the Participant and to receive any distribution with respect to any Award upon the Participant’s death. A beneficiary, legal guardian, legal representative, or other person claiming any rights pursuant to the Plan is subject to all terms and conditions of the Plan and any Award Agreement applicable to the Participant, except to the extent the Plan and Award Agreement otherwise provide, and to any additional restrictions deemed necessary or appropriate by the Committee. If the Participant is married and resides in a community property state, a designation of a person other than the Participant’s spouse as his or her beneficiary with respect to more than 50% of the Participant’s interest in the Award shall not be effective without the prior written consent of the Participant’s spouse. If no beneficiary designation is provided in the applicable Award Agreement or if no beneficiary has been designated or survives the Participant (or if a beneficiary designation is not enforceable and/or valid under the inheritance and other laws in the Participant’s country, as determined by the Committee in its sole discretion), payment shall be made to the person entitled thereto pursuant to the Participant’s will or the laws of descent and distribution. Subject to the foregoing, a beneficiary designation may be changed or revoked by a Participant at any time provided the change or revocation is filed with the Committee.
9.6 Stock Certificates; Book Entry Procedures.
(a) Notwithstanding anything herein to the contrary, the Company shall not be required to issue or deliver any certificates or make any book entries evidencing shares of Stock pursuant to the exercise of any Award, unless and until the Board has determined, with advice of counsel, that the issuance and delivery of such shares is in compliance with all applicable laws, regulations of governmental authorities and, if applicable, the requirements of any exchange on which the shares of Stock are listed or traded. All Stock certificates delivered pursuant to the Plan are subject to any stop-transfer orders and other restrictions as the Committee deems necessary or advisable to comply with federal, state, or foreign jurisdiction, securities or other laws, rules and regulations and the rules of any national securities exchange or automated quotation system on which the Stock is listed, quoted, or traded. The Committee may place legends on any Stock certificate to reference restrictions applicable to the Stock. In addition to the terms and conditions provided herein, the Board may require that a Participant make such reasonable covenants, agreements, and representations as the Board, in its discretion, deems advisable in order to comply with any such laws, regulations, or requirements. The Committee shall have the right to require any Participant to comply with any timing or other restrictions with respect to the settlement or exercise of any Award, including a window-period limitation, as may be imposed in the discretion of the Committee.
(b) Notwithstanding any other provision of the Plan, unless otherwise determined by the Committee or required by any applicable law, rule or regulation, the Company shall not deliver to any Participant certificates evidencing shares of Stock issued in connection with any Award and instead such shares of Stock shall be recorded in the books of the Company (or, as applicable, its transfer agent or stock plan administrator).
9.7 Paperless Administration. In the event that the Company establishes, for itself or using the services of a third party, an automated system for the documentation, granting or exercise of Awards, such as a system using an internet website or interactive voice response, then the paperless documentation, granting or exercise of Awards by a Participant may be permitted through the use of such an automated system.
9.8 Prohibition on Repricing. Subject to Section 11.1, the Committee shall not, without the approval of the stockholders of the Company, authorize the amendment of any outstanding Award to reduce its price per share. Furthermore, subject to Section 11.1, no Award shall be canceled and replaced or substituted for with the grant of an Award having a lesser price per share without the further approval of stockholders of the Company. Subject to Section 11.1, the Committee shall have the authority, without the approval of the stockholders of the Company, to amend any outstanding award to increase the price per share or to cancel and replace or substitute for an Award with the grant of an Award having a price per share that is greater than or equal to the price per share of the original Award. Subject to Section 11.1, absent the approval of the stockholders of the Company, the Committee shall not offer to buyout for a payment in cash, an Option or Stock Appreciation Right previously granted when the per share exercise price exceeds the Fair Market Value of the underlying share of stock.
9.9 Award Vesting Limitations. Notwithstanding any other provision of the Plan to the contrary, but subject to Sections 6.2, 11.1, 11.2 and 12.3(d) of the Plan, effective as of the 2018 annual meeting of the Company’s stockholders (the “2018 Annual Meeting”), no portion of Awards granted under the Plan shall vest before the one-year anniversary of the date of grant; provided, however, that, notwithstanding the foregoing, Awards that result in the issuance to one or more Participants of an aggregate of up to 5% of the shares of Stock which may be issued or transferred under the Plan may be granted without regard to such minimum vesting provisions. Nothing in this Section 9.9 shall preclude the Board or the Committee from taking action, in its sole discretion, to accelerate the vesting of any Award in connection with or following a Change in Control.
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9.10 Dividends on Unvested Awards. To the extent shares of Stock subject to an Award are subject to vesting conditions, any dividends related to such unvested shares of Stock shall be subject to the same vesting conditions.
Article 10
Independent Director Awards
10.1 The Board may grant Awards to Independent Directors, subject to the limitations of the Plan, pursuant to a written non-discretionary formula established by the Committee, or any successor committee thereto carrying out its responsibilities on the date of grant of any such Award (the “Independent Director Equity Compensation Policy”). The Independent Director Equity Compensation Policy shall set forth the type of Award(s) to be granted to Independent Directors, the number of shares of Stock to be subject to Independent Director Awards, the conditions on which such Awards shall be granted, become exercisable and/or payable and expire, and such other terms and conditions as the Committee (or such other successor committee as described above) shall determine in its discretion, except that any Assumed Spin-Off Awards shall be subject to the terms as in existence as of the completion of the Spin-Off.
10.2 Notwithstanding any other provision of the Plan to the contrary, the aggregate grant date fair value of shares of Stock that may be granted during any fiscal year of the Company to any Non-Employee Director or Independent Director shall not exceed $600,000; provided, however, that (i) the limit set forth in this sentence shall be multiplied by two in the fiscal year in which a Non-Employee Director or Independent Director commences service on the Board, and (ii) the limit set forth in this sentence shall not apply to awards made pursuant to a Non-Employee Director’s or Independent Director’s election to receive an Award in lieu of all or a portion of a cash retainer for service on the Board or any committee thereunder or pursuant to conversion of an eBay Inc. award to a Company award.
Article 11
Changes in Capital Structure
11.1 Adjustments.
(a) In the event of any stock dividend, stock split, combination or exchange of shares, merger, consolidation or other distribution (other than normal cash dividends) of Company assets to stockholders, or any other change affecting the shares of Stock or the share price of the Stock other than an Equity Restructuring, the Committee shall make such equitable adjustments, if any, as the Committee in its discretion may deem appropriate to reflect such change with respect to (i) the aggregate number and kind of shares that may be issued under the Plan (including, but not limited to, adjustments of the limitations in Sections 3.1 and 3.3); (ii) the number and kind of shares (or other securities or property) subject to outstanding Awards; (iii) the terms and conditions of any outstanding Awards (including, without limitation, any applicable performance targets or criteria with respect thereto); and (iv) the grant or exercise price per share for any outstanding Awards under the Plan.
(b) In the event of any transaction or event described in Section 11.1 or any unusual or nonrecurring transactions or events affecting the Company, any affiliate of the Company, or the financial statements of the Company or any of its affiliates, or of changes in applicable laws, regulations or accounting principles, the Committee, in its sole and absolute discretion, and on such terms and conditions as it deems appropriate, either by the terms of the Award or by action taken prior to the occurrence of such transaction or event and either automatically or upon the Participant’s request, is hereby authorized to take any one or more of the following actions whenever the Committee determines that such action is appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan or with respect to any Award under the Plan, to facilitate such transactions or events or to give effect to such changes in laws, regulations or principles:
(i) To provide for either (A) termination of any such Award in exchange for an amount of cash, if any, equal to the amount that would have been attained upon the exercise of such Award or realization of the Participant’s rights (and, for the avoidance of doubt, if as of the date of the occurrence of the transaction or event described in this Section 11.1 the Committee determines in good faith that no amount would have been attained upon the exercise of such Award or realization of the Participant’s rights, then such Award may be terminated by the Company without payment) or (B) the replacement of such Award with other rights or property selected by the Committee in its sole discretion;
(ii) To provide that such Award be assumed by the successor or survivor corporation, or a parent or subsidiary thereof, or shall be substituted for by similar options, rights or awards covering the stock of the successor or survivor corporation, or a parent or subsidiary thereof, with appropriate adjustments as to the number and kind of shares and prices;
(iii) To make adjustments in the number and type of shares of Stock (or other securities or property) subject to outstanding Awards, and in the number and kind of outstanding Restricted Stock or Deferred Stock Units and/or in the terms and conditions of (including the grant or exercise price), and the criteria included in, outstanding options, rights and awards and options, rights and awards which may be granted in the future;
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(iv) To provide that such Award shall be exercisable or payable or fully vested with respect to all shares covered thereby, notwithstanding anything to the contrary in the Plan or the applicable Award Agreement; and
(v) To provide that the Award cannot vest, be exercised or become payable after such event.
(c) In connection with the occurrence of any Equity Restructuring, and notwithstanding anything to the contrary in Sections 11.1(a) and 11.1(b):
(i) The number and type of securities subject to each outstanding Award and the exercise price or grant price thereof, if applicable, will be equitably adjusted. The adjustments provided under this Section 11.1(c)(i) shall be nondiscretionary and shall be final and binding on the affected Participant and the Company.
(ii) The Committee shall make such equitable adjustments, if any, as the Committee in its discretion may deem appropriate to reflect such Equity Restructuring with respect to the aggregate number and kind of shares that may be issued under the Plan (including, but not limited to, adjustments of the limitations in Sections 3.1 and 3.3).
(iii) To the extent that such equitable adjustments result in tax consequences to the Participant, the Participant shall be responsible for payment of such taxes and shall not be compensated for such payments by the Company or its Subsidiaries.
(d) The existence of the Plan, the Award Agreement and the Awards granted hereunder shall not affect or restrict in any way the right or power of the Company or the stockholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other change in the Company’s capital structure or its business, any merger or consolidation of the Company, any issue of stock or of options, warrants or rights to purchase stock or of bonds, debentures, preferred or prior preference stocks whose rights are superior to or affect the Stock or the rights thereof or which are convertible into or exchangeable for Stock, or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise.
11.2 Acceleration Upon a Change in Control.
(a) Notwithstanding Section 11.1, subject to Section 11.2(b) below, and except as may otherwise be provided in any applicable Award Agreement or other written agreement entered into between the Company and a Participant, if a Change in Control occurs and a Participant’s Awards are not converted, assumed, or replaced by a successor entity, then immediately prior to the Change in Control such Awards shall become fully exercisable and all forfeiture restrictions on such Awards shall lapse. Upon, or in anticipation of, a Change in Control, the Committee may cause any and all Awards outstanding hereunder to terminate at a specific time in the future, including but not limited to the date of such Change in Control, and shall give each Participant the right to exercise such Awards during a period of time as the Committee, in its sole and absolute discretion, shall determine. In the event that the terms of any agreement between the Company or any Company subsidiary or affiliate and a Participant contains provisions that conflict with and are more restrictive than the provisions of this Section 11.2, this Section 11.2 shall prevail and control and the more restrictive terms of such agreement (and only such terms) shall be of no force or effect. Further, to the extent that there are tax consequences to the Participant as a result of the acceleration or lapsing of forfeiture restriction upon a Change in Control, the Participant shall be responsible for payment of such taxes and shall not be compensated for such payment by the Company or its Subsidiaries.
(b) Except as may otherwise be provided in any applicable Award Agreement or other written agreement entered into between the Company and a Participant, if a Change in Control occurs during the Performance Period with respect to an outstanding Award that vests based on Performance Goal(s) or other performance-based objectives, the Performance Period of such Award shall end as of the date of the Change in Control and the Performance Goal(s) or other performance-based objectives shall be deemed to have been satisfied at the actual level of performance as of the date of the Change in Control, as determined by the Committee, as constituted immediately prior to the Change in Control, without proration, and such Award, to the extent deemed earned by the Committee, shall continue to be subject to time-based vesting following the Change in Control in accordance with the original vesting schedule; provided, however, that if the Awards are not converted, assumed, or replaced by a successor entity, then immediately prior to the Change in Control such Awards shall become fully vested pursuant to Section 11.2(a) above.
11.3 No Other Rights. Except as expressly provided in the Plan, no Participant shall have any rights by reason of any subdivision or consolidation of shares of stock of any class, the payment of any dividend, any increase or decrease in the number of shares of stock of any class or any dissolution, liquidation, merger, or consolidation of the Company or any other corporation. Except as expressly provided in the Plan or pursuant to action of the Committee under the Plan, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number of shares of Stock subject to an Award or the grant or exercise price of any Award.
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Article 12
Administration
12.1 Committee. Except as otherwise provided herein, the Plan shall be administered by a committee consisting of two or more members of the Board (the “Committee”). Unless otherwise determined by the Board, the Committee shall consist solely of two or more members of the Board each of whom is a Non-Employee Director and an “independent director” under the rules of the Nasdaq Stock Market (or other principal securities market on which shares of Stock are traded); provided, that any action taken by the Committee shall be valid and effective, whether or not members of the Committee at the time of such action are later determined not to have satisfied the requirements for membership set forth in this Section 12.1 or otherwise provided in any charter of the Committee. Notwithstanding the foregoing: (a) the full Board, acting by a majority of its members in office, shall conduct the general administration of the Plan with respect to all Awards granted to Independent Directors and for purposes of such Awards the term “Committee” as used in this Plan shall be deemed to refer to the Board and (b) the Committee may delegate its authority hereunder to the extent permitted by Section 12.5. In its sole discretion, the Board may at any time and from time to time exercise any and all rights and duties of the Committee under the Plan except with respect to matters which under Rule 16b-3 under the Exchange Act, or any regulations or rules issued thereunder, are required to be determined in the sole discretion of the Committee. Except as may otherwise be provided in any charter of the Committee, appointment of Committee members shall be effective upon acceptance of appointment; Committee members may resign at any time by delivering written notice to the Board; and vacancies in the Committee may only be filled by the Board.
12.2 Action by the Committee. Unless otherwise established by the Board or in any charter of the Committee, a majority of the Committee shall constitute a quorum and the acts of a majority of the members present at any meeting at which a quorum is present, and acts approved in writing by a majority of the Committee in lieu of a meeting, shall be deemed the acts of the Committee. Each member of the Committee is entitled to, in good faith, rely or act upon any report or other information furnished to that member by any officer or other employee of the Company or any Subsidiary, the Company’s independent certified public accountants, or any executive compensation consultant or other professional retained by the Company to assist in the administration of the Plan.
12.3 Authority of Committee. Subject to any specific designation in the Plan, the Committee has the exclusive power, authority and discretion to:
(a) Designate Participants to receive Awards;
(b) Determine the type or types of Awards to be granted to each Participant;
(c) Determine the number of Awards to be granted and the number of shares of Stock to which an Award will relate;
(d) Determine the terms and conditions of any Award granted pursuant to the Plan, including, but not limited to, the exercise price, grant price, or purchase price, any restrictions or limitations on the Award, any schedule for vesting, lapse of forfeiture restrictions or restrictions on the exercisability of an Award, and accelerations or waivers thereof, any provisions related to non-competition and recapture of gain on an Award, based in each case on such considerations as the Committee in its sole discretion determines; provided, however, that, except as provided in Article 11 of the Plan, the Committee shall not have the authority to accelerate the vesting or waive the forfeiture of any performance-based Awards;
(e) Determine whether, to what extent, and pursuant to what circumstances an Award may be settled in, or the exercise price of an Award may be paid in, cash, Stock, other Awards, or other property, or an Award may be canceled, forfeited, or surrendered;
(f) Prescribe the form of each Award Agreement, which need not be identical for each Participant;
(g) Decide all other matters that must be determined in connection with an Award;
(h) Establish, adopt, or revise any rules and regulations as it may deem necessary or advisable to administer the Plan, including adopting sub-plans to the Plan or special terms for Award Agreements, for the purposes of complying with non-U.S. laws and/or taking advantage of tax favorable treatment for Awards granted to Participants outside the United States (as further set forth in Section 4.2 of the Plan) as it may deem necessary or advisable to administer the Plan;
(i) Interpret the terms of, and any matter arising pursuant to, the Plan or any Award Agreement; and
(j) Make all other decisions and determinations that may be required pursuant to the Plan or as the Committee deems necessary or advisable to administer the Plan.
12.4 Decisions Binding. The Committee’s interpretation of the Plan, any Awards granted pursuant to the Plan, any Award Agreement and all decisions and determinations by the Committee with respect to the Plan are final, binding, and conclusive on all parties.
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12.5 Delegation of Authority. To the extent permitted by applicable law, the Board or the Committee may from time to time delegate to a committee of one or more members of the Board or one or more officers of the Company the authority to grant or amend Awards to Participants or to exercise any of the power, authority and discretion granted to the Committee pursuant to Section 12.3; provided, that (i) the Committee shall have the sole authority with respect to Awards granted to or held by Employees who are subject to Section 16 of the Exchange Act and (ii) officers of the Company (or Directors) to whom authority has been delegated hereunder shall not be delegated such authority with respect to Awards granted to or held by such officers (or Directors). Any delegation hereunder shall be subject to the restrictions and limits that the Board or the Committee specifies at the time of such delegation, and the Board or the Committee may at any time rescind the authority so delegated or appoint a new delegatee. At all times, the delegatee appointed under this Section 12.5 shall serve in such capacity at the pleasure of the Board or the Committee.
Article 13
Effective and Expiration Date
13.1 Effective Date. The effective date of this Plan is the date the Plan (as it may be amended and/or restated from time to time) is last approved by the Company’s stockholders (the “Effective Date”). Each award granted under the Plan or subject to a written binding contract on or before November 2, 2017 shall be subject to the Plan as in effect as of the date on which such award was granted, and it is intended that each such award continue to be subject to Section 162(m) of the Code as in effect prior to the enactment of the Tax Cuts and Jobs Act.
13.2 Expiration Date. The Plan will expire on, and no Award may be granted pursuant to the Plan after the tenth anniversary of the Effective Date, except that no Incentive Stock Options may be granted under the Plan after the earlier of the tenth anniversary of (a) the date the Plan is approved by the Board or (b) the Effective Date. Any Awards that are outstanding on the tenth anniversary of the Effective Date shall remain in force according to the terms of the Plan and the applicable Award Agreement.
Article 14
Amendment, Modification, and Termination
14.1 Amendment, Modification, and Termination. Subject to Section 15.17, with the approval of the Board, at any time and from time to time, the Committee may terminate, amend or modify the Plan; provided, however, that (a) to the extent necessary and desirable to comply with any applicable law, regulation, or stock exchange rule, the Company shall obtain stockholder approval of any Plan amendment in such a manner and to such a degree as required, and (b) stockholder approval shall be required for any amendment to the Plan that (i) increases the number of shares available under the Plan (other than any adjustment as provided by Article 11), (ii) permits the Committee to grant Options with an exercise price that is below Fair Market Value on the date of grant, (iii) permits the Committee to extend the exercise period for an Option beyond ten years from the date of grant or (iv) amends Section 9.8 of the Plan.
14.2 Awards Previously Granted. Except with respect to amendments made pursuant to Section 15.17, no termination, amendment, or modification of the Plan shall adversely affect in any material way any Award previously granted pursuant to the Plan without the prior written consent of the Participant.
Article 15
General Provisions
15.1 No Rights to Awards. No Eligible Individual or other person shall have any claim to be granted any Award pursuant to the Plan, and neither the Company nor the Committee is obligated to treat Eligible Individuals, Participants or any other persons uniformly.
15.2 No Stockholders Rights. Except as otherwise provided herein, a Participant shall have none of the rights of a stockholder with respect to shares of Stock covered by any Award until the Participant becomes the record owner of such shares of Stock.
15.3 Withholding. The Company or any Subsidiary shall have the authority and the right to deduct or withhold (by any means set forth herein or in an Award Agreement), or require a Participant to remit to the Company or a Subsidiary, an amount sufficient to satisfy federal, state, local and foreign income tax, social insurance, payroll tax, fringe benefits tax, payment on account or other tax-related items related to participation in the Plan and legally applicable to Participant and required by law to be withheld (including any amount deemed by the Company or the Participant’s employer, in its discretion, to be an appropriate charge to the Participant even if legally applicable to the Company or the Participant’s employer). The Committee
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may, in its discretion and in satisfaction of the foregoing requirement, allow a Participant to elect to have the Company withhold shares of Stock otherwise issuable under an Award (or allow the return of shares of Stock) having a Fair Market Value equal to the sums required to be withheld. Notwithstanding any other provision of the Plan, the number of shares of Stock which may be withheld with respect to the issuance, vesting, exercise or payment of any Award (or which may be repurchased from the Participant of such Award within six months (or such other period as may be determined by the Committee) after such shares of Stock were acquired by the Participant from the Company) in order to satisfy the Participant’s federal, state, local and foreign income and payroll tax liabilities with respect to the issuance, vesting, exercise or payment of the Award (as described above) shall be limited to the number of shares which have a Fair Market Value on the date of withholding or repurchase equal to the aggregate amount of such liabilities based on the minimum statutory withholding amounts or other applicable withholding rates to the extent that the withholding or repurchase of shares in excess of such minimum statutory amount would not result in adverse accounting consequences to the Company.
15.4 No Right to Employment or Services. Nothing in the Plan or any Award Agreement shall interfere with or limit in any way the right of the Company or any Subsidiary to terminate any Participant’s employment or services at any time, nor confer upon any Participant any right to continue in the employ or service of the Company or any Subsidiary.
15.5 Unfunded Status of Awards. The Plan is intended to be an “unfunded” plan for incentive compensation. With respect to any payments not yet made to a Participant pursuant to an Award, nothing contained in the Plan or any Award Agreement shall give the Participant any rights that are greater than those of a general creditor of the Company or any Subsidiary.
15.6 Assumed Spin-Off Awards. Notwithstanding anything in this Plan to the contrary, each Assumed Spin-Off Award shall be subject to the terms and conditions of the equity compensation plan and award agreement to which such Award was subject immediately prior to the Spin-Off, subject to the adjustment of such Award by the Compensation Committee of eBay Inc. and the terms of the Employee Matters Agreement, dated as of July 17, 2015, between the Company and eBay Inc. entered into in connection with the Spin-Off; provided, that following July 17, 2015, each such Award shall relate solely to shares of Stock and be administered by the Committee in accordance with the administrative procedures in effect under this Plan.
15.7 Indemnification. To the extent allowable pursuant to applicable law, each member of the Committee or of the Board and each person to whom the Committee delegates its authority under Section 12.5 shall be indemnified and held harmless by the Company from any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by such member in connection with or resulting from any claim, action, suit, or proceeding to which he or she may be a party or in which he or she may be involved by reason of any action or failure to act pursuant to the Plan and against and from any and all amounts paid by him or her in satisfaction of judgment in such action, suit, or proceeding against him or her; provided he or she gives the Company an opportunity, at its own expense, to handle and defend the same before he or she undertakes to handle and defend it on his or her own behalf. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such persons may be entitled pursuant to the Company’s Certificate of Incorporation or Bylaws, as a matter of law, or otherwise, or any power that the Company may have to indemnify them or hold them harmless.
15.8 Relationship to Benefits. No payment pursuant to the Plan shall be taken into account in determining any benefits pursuant to any severance, resignation, termination, redundancy, end of service payments, long-term service awards, pension, retirement, savings, profit sharing, group insurance, welfare or benefit plan of the Company or any Subsidiary except to the extent otherwise expressly provided in writing in such other plan or an agreement thereunder.
15.9 Effect of Plan upon Compensation Plans. The adoption of the Plan shall not affect any compensation or incentive plans in effect for the Company or any Subsidiary. Nothing in the Plan shall be construed to limit the right of the Company or any Subsidiary: (a) to establish any forms of incentives or compensation for Employees, Directors or Consultants of the Company or any Subsidiary, or (b) to grant or assume options or other rights or awards otherwise than under the Plan in connection with any proper corporate purpose including, without limitation, the grant or assumption of options in connection with the acquisition by purchase, lease, merger, consolidation or otherwise, of the business, stock or assets of any corporation, partnership, limited liability company, firm or association.
15.10 Awards Subject to Clawback. The Awards and any cash payment or shares of Stock delivered pursuant to an Award are subject to forfeiture, recovery by the Company or other action pursuant to the applicable Award Agreement or any clawback or recoupment policy which the Company may adopt from time to time, including without limitation the PayPal Holdings, Inc. Clawback Policy and the PayPal Holdings, Inc. Mandatory Recovery Policy for Executive Officers, as they may be amended from time to time, or as otherwise required by law.
15.11 Expenses. The expenses of administering the Plan shall be borne by the Company and its Subsidiaries.
15.12 Titles and Headings. The titles and headings of the Sections in the Plan are for convenience of reference only and, in the event of any conflict, the text of the Plan, rather than such titles or headings, shall control.
15.13 Fractional Shares. No fractional shares of Stock shall be issued and the Committee shall determine, in its discretion, whether cash shall be given in lieu of fractional shares or whether such fractional shares shall be eliminated by rounding up or down as appropriate.
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Pay vs Performance Disclosure
Unit_pure in Millions |
3 Months Ended |
9 Months Ended |
12 Months Ended |
60 Months Ended |
Dec. 31, 2023 |
Sep. 26, 2023 |
Dec. 31, 2024
USD ($)
|
Dec. 31, 2023
USD ($)
|
Dec. 31, 2022
USD ($)
|
Dec. 31, 2021
USD ($)
|
Dec. 31, 2020
USD ($)
|
Dec. 31, 2024 |
| Pay vs Performance Disclosure |
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| Pay vs Performance Disclosure, Table |
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The following Pay versus Performance table sets forth information regarding PayPal’s performance and the “compensation actually paid” to our NEOs, as calculated in accordance with Item 402(v) of Regulation S-K. Amounts included as “compensation actually paid” do not represent the value of cash compensation and equity awards actually received by the NEOs, but rather are amounts calculated under SEC rules that include, among other things, the year-over-year changes in the “fair value” of unvested equity-based awards. For a discussion of how the Compensation Committee seeks to align pay with performance when making compensation decisions, please review the CD&A.
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Summary Compensation Table Total for PEO (Chriss) ($) 2 |
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Summary Compensation Table Total for PEO (Schulman) ($) 2 |
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Compensation Actually Paid to PEO (Chriss) ($) 3 |
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Compensation Actually Paid to PEO (Schulman) ($) 3 |
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Average Summary Compensation Table Total for Non-PEO NEOs ($) 2 |
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Average Compensation Actually Paid to Non-PEO NEOs ($) 3 |
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Value of Initial Fixed $100 Investment Based On: 4 |
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Transaction Margin Dollars ($ Billions) 6 |
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| |
Total
Shareholder
Return ($) |
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|
Peer Group Total Shareholder Return ($) 5 |
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|
|
6,658,527 |
|
|
|
— |
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|
35,181,425 |
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|
|
— |
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|
|
19,520,806 |
|
|
|
30,276,847 |
|
|
|
79 |
|
|
|
190 |
|
|
|
4.147 |
|
|
|
14.658 |
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|
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|
|
|
|
41,916,754 |
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|
|
22,138,954 |
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|
|
46,350,840 |
|
|
|
18,991,635 |
|
|
|
10,976,852 |
|
|
|
9,423,987 |
|
|
|
57 |
|
|
|
151 |
|
|
|
4.246 |
|
|
|
13.704 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
21,957,922 |
|
|
|
— |
|
|
|
(87,002,457 |
) |
|
|
10,367,818 |
|
|
|
(13,358,744 |
) |
|
|
66 |
|
|
|
109 |
|
|
|
2.419 |
|
|
|
13.773 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
32,070,353 |
|
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|
— |
|
|
|
13,504,312 |
|
|
|
14,799,891 |
|
|
|
10,020,976 |
|
|
|
174 |
|
|
|
165 |
|
|
|
4.169 |
|
|
|
13.996 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
23,362,072 |
|
|
|
— |
|
|
|
191,128,954 |
|
|
|
9,184,457 |
|
|
|
50,894,687 |
|
|
|
217 |
|
|
|
153 |
|
|
|
4.202 |
|
|
|
11.779 |
|
1 |
Mr. Chriss served as the Principal Executive Officer (“PEO”) from and after September 27, 2023 and for the entirety of 2024. Mr. Schulman served as the PEO in 2023 from January 1 through September 26 and for the entirety of 2022, 2021 and 2020. PayPal’s non-PEO NEOs for the applicable years were as follows: |
| |
• |
|
2024: Mses. Jamie Miller and Suzan Kereere and Messrs. Diego Scotti and Aaron Webster |
| |
• |
|
2023: Messrs. Aaron Karczmer, John Kim, and Blake Jorgensen, and Mses. Jamie Miller, Peggy Alford, Michelle Gill, and Gabrielle Rabinovitch |
| |
• |
|
2022: Messrs. Blake Jorgensen, John D. Rainey, Mark Britto, Jonathan Auerbach, and Aaron Karczmer, and Mses. Gabrielle Rabinovitch and Peggy Alford |
| |
• |
|
2021: Messrs. John D. Rainey, Mark Britto, and Jonathan Auerbach and Ms. Louise Pentland |
| |
• |
|
2020: Messrs. John D. Rainey and Aaron Karczmer and Mses. Peggy Alford and Louise Pentland |
2 |
Amounts reported in these columns represent (i) the total compensation reported in the Summary Compensation Table for the applicable year for Mr. Chriss or Mr. Schulman, as applicable and (ii) the average of the total compensation reported in the Summary Compensation Table for the applicable year for PayPal’s non-PEO NEOs reported for that applicable year, respectively. |
3 |
To calculate compensation actually paid, adjustments were made to the amounts reported in the Summary Compensation Table for the applicable year. A reconciliation of the adjustments for Mr. Chriss and for the average of the non-PEO NEOs for 2024 is set forth following the footnotes to this table. |
4 |
Pursuant to SEC rules, the comparison assumes $100 was invested on December 31, 2019 and that dividends were reinvested during the measurement period. Historical stock price performance is not necessarily indicative of future stock price performance. |
5 |
The Total Shareholder Return Peer Group consists of the companies included in the S&P Software and Services Select Industry Index. |
6 |
As noted in the CD&A, the Compensation Committee determined that transaction margin dollars was a key financial metric for PayPal’s performance and success and a driver of stockholder value creation for 2024. By using transaction margin dollars, together with the other performance goals used in our incentive programs, the Compensation Committee believes that the program reflected an appropriate balance with respect to incentivizing profitable growth and stockholder value creation. Transaction margin dollars represents net revenue, less transaction expenses and transaction & credit losses, as reported in PayPal’s 2024 Annual Report on Form 10-K. PayPal has designated transaction margin dollars as the Company-Selected Measure for 2024. | Reconciliation of 2024 Compensation Actually Paid Adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
Summary Compensation Table Total ($) 1 |
|
|
Stock Awards Granted in Fiscal Year ($) 2 |
|
|
Plus Fair Value at Fiscal Year-End of Outstanding and Unvested Stock Awards Granted in Fiscal Year ($) 3 |
|
|
Plus/(Minus) Change in Fair Value of Outstanding and Unvested Stock Awards Granted in Prior Fiscal Years ($) 4 |
|
|
Plus Fair Value at Vesting of Stock Awards Granted in Fiscal Year that Vested in the Fiscal Year ($) 5 |
|
|
Plus/(Minus) Change in Fair Value as of Vesting Date of Stock Awards Granted in Prior Years that Vested in the Fiscal Year ($) 6 |
|
|
(Minus) Fair Value as of Prior Fiscal Year-End of Stock Awards Granted in Prior Fiscal Years that Failed to Meet Vesting Conditions in the Fiscal Year ($) 7 |
|
|
Compensation
Actually Paid
($) |
|
|
|
|
|
|
|
|
|
|
|
|
|
6,658,527 |
|
|
|
— |
|
|
|
— |
|
|
|
25,342,227 |
|
|
|
— |
|
|
|
3,180,671 |
|
|
|
— |
|
|
|
35,181,425 |
|
|
|
|
|
|
|
|
|
|
|
|
|
19,520,806 |
|
|
|
(13,904,059 |
) |
|
|
23,729,830 |
|
|
|
574,787 |
|
|
|
— |
|
|
|
355,483 |
|
|
|
— |
|
|
|
30,276,847 |
|
1 |
For, Mr. Chriss, amounts shown represent Total Compensation as reported in the Summary Compensation Table for 2024. With respect to the non-PEO NEOs, amounts shown represent averages for 2024. |
2 |
Represents the grant date fair value of the stock awards granted during 2024, computed in accordance with the methodology used for financial reporting purposes. |
3 |
Represents the fair value as of 2024 fiscal year-end of the outstanding and unvested stock awards granted during such fiscal year, computed in accordance with the methodology used for financial reporting purposes. |
4 |
Represents the change in fair value during fiscal year 2024 of each stock award that was granted in a prior fiscal year and that remained outstanding and unvested as of the last day of fiscal year 2024, computed in accordance with the methodology used for financial reporting purposes and, for awards subject to performance-based vesting conditions, based on the probable outcome of such performance-based vesting conditions as of the last day of fiscal year 2024. |
5 |
Represents the fair value at vesting of the stock awards that were granted and vested during fiscal year 2024, computed in accordance with the methodology used for financial reporting purposes. |
6 |
Represents the change in fair value, measured from the prior fiscal year-end to the vesting date, of each stock award that was granted in a prior fiscal year and that vested during fiscal year 2024, computed in accordance with the methodology used for financial reporting purposes. |
7 |
Represents the fair value as of the last day of the prior fiscal year of the stock awards that were granted in a prior fiscal year and which failed to meet the applicable vesting conditions in fiscal year 2024, computed in accordance with the methodology used for financial reporting purposes. |
8 |
See footnote 1 in the Pay versus Performance table above for the NEOs included in the average for each year. |
|
|
|
|
|
|
| Company Selected Measure Name |
|
|
Transaction margin dollars
|
|
|
|
|
|
| Named Executive Officers, Footnote |
|
|
|
|
|
|
|
Amounts reported in these columns represent (i) the total compensation reported in the Summary Compensation Table for the applicable year for Mr. Chriss or Mr. Schulman, as applicable and (ii) the average of the total compensation reported in the Summary Compensation Table for the applicable year for PayPal’s non-PEO NEOs reported for that applicable year, respectively.
|
| Peer Group Issuers, Footnote |
|
|
|
|
|
|
|
The Total Shareholder Return Peer Group consists of the companies included in the S&P Software and Services Select Industry Index.
|
| Adjustment To PEO Compensation, Footnote |
|
|
Reconciliation of 2024 Compensation Actually Paid Adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
Summary Compensation Table Total ($) 1 |
|
|
Stock Awards Granted in Fiscal Year ($) 2 |
|
|
Plus Fair Value at Fiscal Year-End of Outstanding and Unvested Stock Awards Granted in Fiscal Year ($) 3 |
|
|
Plus/(Minus) Change in Fair Value of Outstanding and Unvested Stock Awards Granted in Prior Fiscal Years ($) 4 |
|
|
Plus Fair Value at Vesting of Stock Awards Granted in Fiscal Year that Vested in the Fiscal Year ($) 5 |
|
|
Plus/(Minus) Change in Fair Value as of Vesting Date of Stock Awards Granted in Prior Years that Vested in the Fiscal Year ($) 6 |
|
|
(Minus) Fair Value as of Prior Fiscal Year-End of Stock Awards Granted in Prior Fiscal Years that Failed to Meet Vesting Conditions in the Fiscal Year ($) 7 |
|
|
Compensation
Actually Paid
($) |
|
|
|
|
|
|
|
|
|
|
|
|
|
6,658,527 |
|
|
|
— |
|
|
|
— |
|
|
|
25,342,227 |
|
|
|
— |
|
|
|
3,180,671 |
|
|
|
— |
|
|
|
35,181,425 |
|
|
|
|
|
|
|
|
|
|
|
|
|
19,520,806 |
|
|
|
(13,904,059 |
) |
|
|
23,729,830 |
|
|
|
574,787 |
|
|
|
— |
|
|
|
355,483 |
|
|
|
— |
|
|
|
30,276,847 |
|
1 |
For, Mr. Chriss, amounts shown represent Total Compensation as reported in the Summary Compensation Table for 2024. With respect to the non-PEO NEOs, amounts shown represent averages for 2024. |
2 |
Represents the grant date fair value of the stock awards granted during 2024, computed in accordance with the methodology used for financial reporting purposes. |
3 |
Represents the fair value as of 2024 fiscal year-end of the outstanding and unvested stock awards granted during such fiscal year, computed in accordance with the methodology used for financial reporting purposes. |
4 |
Represents the change in fair value during fiscal year 2024 of each stock award that was granted in a prior fiscal year and that remained outstanding and unvested as of the last day of fiscal year 2024, computed in accordance with the methodology used for financial reporting purposes and, for awards subject to performance-based vesting conditions, based on the probable outcome of such performance-based vesting conditions as of the last day of fiscal year 2024. |
5 |
Represents the fair value at vesting of the stock awards that were granted and vested during fiscal year 2024, computed in accordance with the methodology used for financial reporting purposes. |
6 |
Represents the change in fair value, measured from the prior fiscal year-end to the vesting date, of each stock award that was granted in a prior fiscal year and that vested during fiscal year 2024, computed in accordance with the methodology used for financial reporting purposes. |
7 |
Represents the fair value as of the last day of the prior fiscal year of the stock awards that were granted in a prior fiscal year and which failed to meet the applicable vesting conditions in fiscal year 2024, computed in accordance with the methodology used for financial reporting purposes. |
8 |
See footnote 1 in the Pay versus Performance table above for the NEOs included in the average for each year. |
|
|
|
|
|
|
| Non-PEO NEO Average Total Compensation Amount |
|
|
$ 19,520,806
|
$ 10,976,852
|
$ 10,367,818
|
$ 14,799,891
|
$ 9,184,457
|
|
| Non-PEO NEO Average Compensation Actually Paid Amount |
|
|
$ 30,276,847
|
9,423,987
|
(13,358,744)
|
10,020,976
|
50,894,687
|
|
| Adjustment to Non-PEO NEO Compensation Footnote |
|
|
Reconciliation of 2024 Compensation Actually Paid Adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
Summary Compensation Table Total ($) 1 |
|
|
Stock Awards Granted in Fiscal Year ($) 2 |
|
|
Plus Fair Value at Fiscal Year-End of Outstanding and Unvested Stock Awards Granted in Fiscal Year ($) 3 |
|
|
Plus/(Minus) Change in Fair Value of Outstanding and Unvested Stock Awards Granted in Prior Fiscal Years ($) 4 |
|
|
Plus Fair Value at Vesting of Stock Awards Granted in Fiscal Year that Vested in the Fiscal Year ($) 5 |
|
|
Plus/(Minus) Change in Fair Value as of Vesting Date of Stock Awards Granted in Prior Years that Vested in the Fiscal Year ($) 6 |
|
|
(Minus) Fair Value as of Prior Fiscal Year-End of Stock Awards Granted in Prior Fiscal Years that Failed to Meet Vesting Conditions in the Fiscal Year ($) 7 |
|
|
Compensation
Actually Paid
($) |
|
|
|
|
|
|
|
|
|
|
|
|
|
6,658,527 |
|
|
|
— |
|
|
|
— |
|
|
|
25,342,227 |
|
|
|
— |
|
|
|
3,180,671 |
|
|
|
— |
|
|
|
35,181,425 |
|
|
|
|
|
|
|
|
|
|
|
|
|
19,520,806 |
|
|
|
(13,904,059 |
) |
|
|
23,729,830 |
|
|
|
574,787 |
|
|
|
— |
|
|
|
355,483 |
|
|
|
— |
|
|
|
30,276,847 |
|
1 |
For, Mr. Chriss, amounts shown represent Total Compensation as reported in the Summary Compensation Table for 2024. With respect to the non-PEO NEOs, amounts shown represent averages for 2024. |
2 |
Represents the grant date fair value of the stock awards granted during 2024, computed in accordance with the methodology used for financial reporting purposes. |
3 |
Represents the fair value as of 2024 fiscal year-end of the outstanding and unvested stock awards granted during such fiscal year, computed in accordance with the methodology used for financial reporting purposes. |
4 |
Represents the change in fair value during fiscal year 2024 of each stock award that was granted in a prior fiscal year and that remained outstanding and unvested as of the last day of fiscal year 2024, computed in accordance with the methodology used for financial reporting purposes and, for awards subject to performance-based vesting conditions, based on the probable outcome of such performance-based vesting conditions as of the last day of fiscal year 2024. |
5 |
Represents the fair value at vesting of the stock awards that were granted and vested during fiscal year 2024, computed in accordance with the methodology used for financial reporting purposes. |
6 |
Represents the change in fair value, measured from the prior fiscal year-end to the vesting date, of each stock award that was granted in a prior fiscal year and that vested during fiscal year 2024, computed in accordance with the methodology used for financial reporting purposes. |
7 |
Represents the fair value as of the last day of the prior fiscal year of the stock awards that were granted in a prior fiscal year and which failed to meet the applicable vesting conditions in fiscal year 2024, computed in accordance with the methodology used for financial reporting purposes. |
8 |
See footnote 1 in the Pay versus Performance table above for the NEOs included in the average for each year. |
|
|
|
|
|
|
| Compensation Actually Paid vs. Total Shareholder Return |
|
|
Relationship Between Pay and Performance We believe the compensation actually paid in each of the years reported above and over the five-year cumulative period are reflective of the Compensation Committee’s emphasis on “pay for performance” as the compensation actually paid fluctuated year over year, primarily due to our stock performance and our varying levels of achievement against pre-established performance goals under the AIP and PBRSU awards. The CD&A describes the Compensation Committee’s emphasis on “pay for performance” and how our executive compensation program is designed to link executive compensation with the achievement of our financial objectives, as well as stockholder value creation. Because our executive compensation program incentivizes and rewards executives primarily through long-term incentives in the form of PBRSU and RSU equity awards, the compensation actually paid is most significantly impacted by changes in our stock price over the vesting period of the awards.
|
|
|
|
|
|
| Compensation Actually Paid vs. Net Income |
|
|
|
|
|
|
|
|
| Compensation Actually Paid vs. Company Selected Measure |
|
|
|
|
|
|
|
|
| Total Shareholder Return Vs Peer Group |
|
|
Relationship Between Pay and Performance We believe the compensation actually paid in each of the years reported above and over the five-year cumulative period are reflective of the Compensation Committee’s emphasis on “pay for performance” as the compensation actually paid fluctuated year over year, primarily due to our stock performance and our varying levels of achievement against pre-established performance goals under the AIP and PBRSU awards. The CD&A describes the Compensation Committee’s emphasis on “pay for performance” and how our executive compensation program is designed to link executive compensation with the achievement of our financial objectives, as well as stockholder value creation. Because our executive compensation program incentivizes and rewards executives primarily through long-term incentives in the form of PBRSU and RSU equity awards, the compensation actually paid is most significantly impacted by changes in our stock price over the vesting period of the awards.
|
|
|
|
|
|
| Tabular List, Table |
|
|
Performance Measures Used to Link Company Performance and Compensation Actually Paid to the NEOs The following is a list of financial performance measures which, in our assessment, represent the most important financial performance measures used by PayPal to link compensation actually paid to the NEOs for 2024:
| |
• |
|
Transaction margin dollars |
| |
• |
|
Non-GAAP operating income |
| |
• |
|
rTSR, compared to the S&P 500 | Non-GAAP operating income is not a financial measure prepared in accordance with GAAP. For information on how we compute non-GAAP financial measures and a reconciliation to the most directly comparable financial measures prepared in accordance with GAAP, please refer to “Appendix A: Reconciliation of Non-GAAP Financial Measures” to this proxy statement.
|
|
|
|
|
|
| Total Shareholder Return Amount |
|
|
$ 79
|
57
|
66
|
174
|
217
|
|
| Peer Group Total Shareholder Return Amount |
|
|
190
|
151
|
109
|
165
|
153
|
|
| Net Income (Loss) |
|
|
$ 4,147,000,000
|
$ 4,246,000,000
|
$ 2,419,000,000
|
$ 4,169,000,000
|
$ 4,202,000,000
|
|
| Company Selected Measure Amount |
|
|
14,658
|
13,704
|
13,773
|
13,996
|
11,779
|
|
| Measure:: 1 |
|
|
|
|
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
|
|
|
|
| Name |
|
|
Transaction margin dollars
|
|
|
|
|
|
| Measure:: 2 |
|
|
|
|
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
|
|
|
|
| Name |
|
|
Non-GAAP operating income
|
|
|
|
|
|
| Non-GAAP Measure Description |
|
|
Non-GAAP operating income is not a financial measure prepared in accordance with GAAP. For information on how we compute non-GAAP financial measures and a reconciliation to the most directly comparable financial measures prepared in accordance with GAAP, please refer to “Appendix A: Reconciliation of Non-GAAP Financial Measures” to this proxy statement.
|
|
|
|
|
|
| Measure:: 3 |
|
|
|
|
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
|
|
|
|
| Name |
|
|
rTSR, compared to the S&P 500
|
|
|
|
|
|
| Mr. Chriss [Member] |
|
|
|
|
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
|
|
|
|
| PEO Total Compensation Amount |
|
|
$ 6,658,527
|
$ 41,916,754
|
$ 0
|
$ 0
|
$ 0
|
|
| PEO Actually Paid Compensation Amount |
|
|
$ 35,181,425
|
46,350,840
|
0
|
0
|
0
|
|
| PEO Name |
Mr. Chriss
|
|
Mr. Chriss
|
|
|
|
|
|
| Mr. Schulman [Member] |
|
|
|
|
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
|
|
|
|
| PEO Total Compensation Amount |
|
|
$ 0
|
22,138,954
|
21,957,922
|
32,070,353
|
23,362,072
|
|
| PEO Actually Paid Compensation Amount |
|
|
0
|
$ 18,991,635
|
$ (87,002,457)
|
$ 13,504,312
|
$ 191,128,954
|
|
| PEO Name |
|
Mr. Schulman
|
|
|
Mr. Schulman
|
Mr. Schulman
|
Mr. Schulman
|
|
| PEO | Mr. Chriss [Member] | Aggregate Grant Date Fair Value of Equity Award Amounts Reported in Summary Compensation Table |
|
|
|
|
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
|
|
|
|
| Adjustment to Compensation, Amount |
|
|
0
|
|
|
|
|
|
| PEO | Mr. Chriss [Member] | Year-end Fair Value of Equity Awards Granted in Covered Year that are Outstanding and Unvested |
|
|
|
|
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
|
|
|
|
| Adjustment to Compensation, Amount |
|
|
0
|
|
|
|
|
|
| PEO | Mr. Chriss [Member] | Year-over-Year Change in Fair Value of Equity Awards Granted in Prior Years That are Outstanding and Unvested |
|
|
|
|
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
|
|
|
|
| Adjustment to Compensation, Amount |
|
|
25,342,227
|
|
|
|
|
|
| PEO | Mr. Chriss [Member] | Vesting Date Fair Value of Equity Awards Granted and Vested in Covered Year |
|
|
|
|
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
|
|
|
|
| Adjustment to Compensation, Amount |
|
|
0
|
|
|
|
|
|
| PEO | Mr. Chriss [Member] | Change in Fair Value as of Vesting Date of Prior Year Equity Awards Vested in Covered Year |
|
|
|
|
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
|
|
|
|
| Adjustment to Compensation, Amount |
|
|
3,180,671
|
|
|
|
|
|
| PEO | Mr. Chriss [Member] | Prior Year End Fair Value of Equity Awards Granted in Any Prior Year that Fail to Meet Applicable Vesting Conditions During Covered Year |
|
|
|
|
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
|
|
|
|
| Adjustment to Compensation, Amount |
|
|
0
|
|
|
|
|
|
| Non-PEO NEO | Aggregate Grant Date Fair Value of Equity Award Amounts Reported in Summary Compensation Table |
|
|
|
|
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
|
|
|
|
| Adjustment to Compensation, Amount |
|
|
(13,904,059)
|
|
|
|
|
|
| Non-PEO NEO | Year-end Fair Value of Equity Awards Granted in Covered Year that are Outstanding and Unvested |
|
|
|
|
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
|
|
|
|
| Adjustment to Compensation, Amount |
|
|
23,729,830
|
|
|
|
|
|
| Non-PEO NEO | Year-over-Year Change in Fair Value of Equity Awards Granted in Prior Years That are Outstanding and Unvested |
|
|
|
|
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
|
|
|
|
| Adjustment to Compensation, Amount |
|
|
574,787
|
|
|
|
|
|
| Non-PEO NEO | Vesting Date Fair Value of Equity Awards Granted and Vested in Covered Year |
|
|
|
|
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
|
|
|
|
| Adjustment to Compensation, Amount |
|
|
0
|
|
|
|
|
|
| Non-PEO NEO | Change in Fair Value as of Vesting Date of Prior Year Equity Awards Vested in Covered Year |
|
|
|
|
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
|
|
|
|
| Adjustment to Compensation, Amount |
|
|
355,483
|
|
|
|
|
|
| Non-PEO NEO | Prior Year End Fair Value of Equity Awards Granted in Any Prior Year that Fail to Meet Applicable Vesting Conditions During Covered Year |
|
|
|
|
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
|
|
|
|
| Adjustment to Compensation, Amount |
|
|
$ 0
|
|
|
|
|
|
