Compensation Tables

Compensation Tables

2016 Summary Compensation Table

The following table, footnotes, and narrative summarize the total compensation earned by each of our named executive officers, or NEOs, for the fiscal year ended December 31, 2016 and, to the extent required under the SEC executive compensation disclosure rules, the fiscal years ended December 31, 2015 and 2014.

summary-compensation-table

Bonus (Column (d))

Mr. Fisher and Mr. Lawton received these supplemental cash payments pursuant to their offer letters.

Stock Awards (Column (e))

The amounts reported in the Stock Awards column represent the aggregate grant date fair value of time-based restricted stock units, or RSUs, and performance-based restricted stock units, or PBRSUs, granted to each of our NEOs in 2016, 2015, and 2014, respectively, calculated in accordance with the Financial Accounting Standards Board’s Accounting Standards Codification Topic 718, Compensation — Stock Compensation. The grant date fair value of RSUs is determined using the fair value of our common stock on the date of grant, and the grant date fair value of PBRSUs is calculated based on the fair value of our common stock on the date of grant and probable outcome of the performance measures for the applicable performance period as of the date on which the PBRSUs are granted. This estimated fair value for PBRSUs is different from (and lower than) the maximum value of PBRSUs set forth below. The equity incentive awards included in this column were all awarded under the Company’s 2008 Equity Incentive Award Plan, as amended and restated.

RSUs: For 2016, RSU awards were granted to our NEOs in connection with the Company’s annual equity grant in April with a grant date value of $5,000,018 for Mr. Wenig, $2,388,812 for Mr. Schenkel, $2,786,939 for Mr. Fisher, $1,393,470 for Mr. Lawton, and $2,189,748 for Mr. Pittman.

PBRSUs: PBRSUs provide an opportunity for our NEOs to receive time-based RSUs if the performance measures for a particular time period — typically 24 months — are met. For a description of the performance measures for the 2016-2017 PBRSU awards, see “Compensation Discussion and Analysis — Elements of Our Executive Compensation Program — Equity Incentive Awards — PBRSU Program” above.

For 2016, PBRSU awards granted were to our NEOs in connection with the Company’s annual equity grant in April with a grant date value of $7,500,015 for Mr. Wenig, $3,583,218 for Mr. Schenkel, $4,180,409 for Mr. Fisher, $2,090,216 for Mr. Lawton, and $3,284,598 for Mr. Pittman.

Assuming the highest level of performance is achieved under the applicable performance measures for the 2016-2017 PBRSU awards, the maximum possible value of the PBRSU awards allocated to our NEOs for such performance period using the fair value of our common stock on the date that such awards were granted is presented below:

max-pbrsus

The value that our NEOs received in 2016 from the vesting of stock awards is reflected in the 2016 Option Exercises and Stock Vested table below. Additional information on all outstanding stock awards as of December 31, 2016 is reflected in the 2016 Outstanding Equity Awards at Fiscal Year-End table below.

Option Awards (Column (f))

The amounts reported in the Option Awards column represent the grant date fair value of stock option awards granted to each of our NEOs in 2015 and 2014, respectively, calculated in accordance with the Financial Accounting Standards Board’s Accounting Standards Codification Topic 718, Compensation —Stock Compensation. The assumptions used by the Company in calculating these amounts are incorporated herein by reference to Note 14 to the Company’s consolidated financial statements in its Form 10-K for the fiscal year ended December 31, 2016.

For 2016, in accordance with our revised equity guidelines, no option awards were granted to our NEOs.

The value that our NEOs received in 2016 from the exercise of previously granted stock options is reflected in the 2016 Option Exercises and Stock Vested table below. Additional information on all outstanding option awards as of December 31, 2016 is reflected in the 2016 Outstanding Equity Awards at Fiscal Year-End table below.

Non-Equity Incentive Plan Compensation (Column (g))

The amounts reported in the Non-Equity Incentive Plan Compensation column represent amounts earned by each of our NEOs under the annual cash incentive plan for services they rendered in 2016, 2015, and 2014, respectively. See “Compensation Discussion and Analysis — Elements of Our Executive Compensation Program — Annual Cash Incentive Awards (the eBay Incentive Plan (eIP))” above for more information.

All Other Compensation (Column (i))

General

The amounts reported in the All Other Compensation column reflect:

a) An amount of $10,600 for each of our NEOs, which represents the maximum matching contributions made by the Company to the Company’s 401(k) savings plan for the benefit of our NEOs, which also is the same maximum amount applicable to each participating employee for 2016; and

b) The dollar value of certain information technology support services provided by the Company for computer equipment located at the residences of Mr. Wenig and Mr. Schenkel.

2016 Grants of Plan-based Awards

The following table, footnotes, and narrative set forth certain information regarding grants of plan-based awards to each of our NEOs for the fiscal year ended December 31, 2016.

gpba

Estimated Future Payouts Under Non-Equity Incentive Plan Awards (Annual Cash Incentive Plan)(Columns (d), (e), and (f))

The amounts reported under these columns relate to the possible awards under the annual cash incentive plan. In 2016, the total annual target incentive amounts under the annual cash incentive plan for the NEOs were as follows:

Mr. Wenig$2,000,000
Mr. Schenkel$ 650,000
Mr. Fisher$ 468,750
Mr. Lawton$ 487,500
Mr. Pittman$ 435,000

The total 2016 annual target incentive amounts under the annual cash incentive plan for the NEOs were allocated 75% to Company performance and 25% to individual performance. No payment occurs for the individual performance component of the annual cash incentive plan unless the minimum thresholds for both FX-neutral revenue and non-GAAP net income are met; for 2016, these thresholds were met.

Actual payouts to our NEOs under the annual cash incentive plan for the fiscal year ended December 31, 2016 are reflected in the Non-Equity Incentive Plan Compensation column in the 2016 Summary Compensation Table above.

eIP—Company Performance: The amounts shown in the rows entitled “eIP – Company Performance” reflect estimated payouts for the fiscal year ended December 31, 2016 under the annual cash incentive plan for the portion of the award payable based on the Company’s performance, as follows:

  • Threshold: The amounts shown in this column reflect the minimum payment levels if the minimum FX-neutral revenue and non-GAAP net income thresholds are met, which are 50% of the amounts shown under the Target column.
  • Target: The amounts shown in this column reflect the target payment levels if target non-GAAP net income is met.
  • Maximum: The amounts shown in this column represent the maximum amounts payable based on Company performance, which are 200% of the amounts shown under the Target column.

eIP—Individual Performance: The amounts shown in the rows entitled “eIP – Individual Performance” reflect estimated payouts for the fiscal year ended December 31, 2016 under the annual cash incentive plan for the portion of the award payable based on individual performance, as follows:

  • Threshold: Although there are no thresholds under the annual cash incentive plan for individual performance, there is no payout for individual performance unless the minimum thresholds for both Company-wide FX-neutral revenue and non-GAAP net income are met. In addition, in circumstances where the Company’s financial performance is above its thresholds but below its targets, a modifier is applied to the individual performance component to reduce it proportionately based on the Company financial performance component.
  • Target: The amounts shown in this column reflect 100% of the target award for individual performance.
  • Maximum: The amounts shown in this column are 200% of the amounts shown under the Target column.

See “Compensation Discussion and Analysis — Elements of Our Executive Compensation Program — Annual Cash Incentive Awards (the eBay Incentive Plan (eIP))” above.

Estimated Future Payouts Under Equity Incentive Plan Awards (PBRSUs) (Columns (g), (h), and (i))

The amounts shown reflect estimated payouts of PBRSUs for the 2016-2017 performance period, as follows:

  • Threshold: The amounts shown in this column reflect the awards if the minimum FX-neutral revenue and non-GAAP operating margin dollar thresholds are met and the lowest return on invested capital modifier is applied, and are 40% of the amounts shown under the Target column.
  • Target: The amounts shown in this column reflect the awards if the FX-neutral revenue and non-GAAP operating margin dollar amounts are at target, and the target return on invested capital modifier is applied.
  • Maximum: The amounts shown in this column reflect the awards if the maximum FX-neutral revenue and non-GAAP operating margin dollar amounts are met and the maximum return on invested capital modifier is applied, and are 240% of the amounts shown under the Target column.

For further discussion of the PBRSUs, including their vesting schedules, see “Compensation Discussion and Analysis — Elements of Our Executive Compensation Program — Equity Incentive Awards — PBRSU Program” above.

All Other Stock Awards: Number of Shares or Stock Units (RSUs) (Column (j))

The awards reflect the number of RSUs on the grant date. RSU awards granted to our NEOs in 2016 vest over a four-year period with 1/16th of the shares underlying the RSU award vesting on June 15, 2016, and additional 1/16th of the shares underlying the RSU award vesting each quarter thereafter.

Grant Date Fair Value (Column (m))

The grant date fair value of each RSU award was calculated using the fair value of our common stock on the date of grant. The estimated fair value of PBRSUs was calculated based on the fair value of our common stock on the date of grant and the probable outcome of the performance measures for the 2016-2017 performance period as of the date on which those PBRSUs were granted for accounting purposes.

2016 Outstanding Equity Awards at Fiscal Year-End

The following table and footnotes set forth certain information regarding outstanding equity awards for each of our NEOs as of December 31, 2016.

outstanding-equity

(1) Market Value is calculated based on a price per share of $29.69, which was the closing price of our common stock on December 30, 2016.
(2) Becomes fully vested after four years, with 12.5% vesting on the six-month anniversary of the date of grant, and 1/48th vesting monthly thereafter.
(3) Becomes fully vested after four years, with 25% vesting on each of the four annual anniversaries of the date of grant.
(4) Becomes fully vested after four years, with 1/16th vesting on June 15, 2016, and additional 1/16th vesting each quarter thereafter.
(5) Earned in connection with achievement with respect to the 2014-2015 PBRSU performance period; 50% vested on March 1, 2016, and the remaining 50% vested on March 1, 2017.
(6) Earned in connection with achievement with respect to the 2015-2016 PBRSU performance period; for Mr. Wenig and Mr. Schenkel, 100% vests on March 1, 2018, and for the other NEOs, 50% vested on March 1, 2017, and the remaining 50% vests on March 1, 2018.
(7) To be earned in connection with achievement with respect to the 2016-2017 PBRSU performance period; for Mr. Wenig and Mr. Schenkel, 100% vests on March 15, 2019, and for the other NEOs, 50% vests on March 15, 2018, and the remaining 50% vests on March 15, 2019. In accordance with the SEC executive compensation disclosure rules, represents the estimated future award of PBRSUs at the maximum performance level under the 2016-2017 performance period based on Company performance through 2016. PBRSUs are earned based on the Company’s FX-neutral revenue and non-GAAP operating margin dollars during the performance period (with the application of a return on invested capital modifier). See “Compensation Discussion and Analysis —Elements of Our Executive Compensation Program — PBRSU Program” above for a more detailed discussion of these awards and related performance measures.
(8) Becomes fully vested after three years, with 100% vesting on the third anniversary of the date of grant.
(9) Becomes fully vested after four years, with 25% vesting on the one-year anniversary of the date of grant, and 1/48th vesting monthly thereafter.

2016 Option Exercises and Stock Vested

The following table and footnotes set forth the number of shares acquired and the value realized upon exercise of stock options and the vesting of stock awards by each of our NEOs for the fiscal year ended December 31, 2016.

option-stock-awards

(1) Value realized on exercise of stock options is based on the fair market value of our common stock on the date of exercise minus the exercise price and does not reflect actual proceeds received.
(2) Value realized on vesting of stock awards is based on the fair market value of our common stock on the vesting date and does not reflect actual proceeds received.

Potential Payments Upon Termination or Change in Control

The following table, footnotes, and narrative set forth our payment obligations pursuant to the compensation arrangements for each of our NEOs, under the circumstances described below, assuming that their employment was terminated or a change in control occurred on December 31, 2016.

potential-payments

(1) With respect to Mr. Wenig, Mr. Schenkel and Mr. Lawton, an involuntary termination includes a termination without cause or resignation for good reason. With respect to Mr. Fisher and Mr. Pittman, an involuntary termination outside of a change in control includes only a termination without cause, and an involuntary termination in connection with a change in control includes termination without cause or resignation for good reason.
(2) Mr. Fisher’s and Mr. Pittman’s Death or Disability Benefit are each presented as though their employment terminated outside a change in control. In the event their employment is terminated in connection with a change in control, Mr. Fisher’s Death or Disability Benefit would be $19,255,837 and Mr. Pittman’s Death or Disability Benefit would be $13,261,330.

Change in Control (Column (b))

The Company has not entered into any arrangements with any of its executive officers to provide “single trigger” severance payments upon a change in control.

The Company’s equity incentive plans generally provide for the acceleration of vesting of awards granted under the plans upon a change in control (as defined in the applicable plan) only if the acquiring entity does not agree to assume or continue the awards. These provisions generally apply to all holders of awards under the equity incentive plans.

The amounts reported in the Change in Control column assume that, in a change in control transaction, the acquiring entity would assume or continue outstanding equity awards. If the acquiring entity does not assume or continue any outstanding equity awards and all the unvested and outstanding awards are fully accelerated upon a change in control, the aggregate value of accelerated vesting of such awards to each of the NEOs that were executive officers of the Company as of December 31, 2016, calculated based on the closing price of our common stock on December 30, 2016, would be as follows:

accelerated-value

* Excludes all shares subject to PBRSUs with respect to 2015/2016 performance period, as shares subject to such PBRSUs were not outstanding as of 12/31/2016.

Involuntary Termination outside of a Change in Control (Column (c))

The Company’s Standard Severance Plan provides severance protection outside of a change in control period if a participant is terminated without cause and signs and does not revoke a waiver of claims against the Company. Mr. Fisher and Mr. Pittman participate in the Standard Severance Plan.

Mr. Wenig, Mr. Schenkel and Mr. Lawton do not participate in the Standard Severance Plan. Mr. Wenig and Mr. Schenkel entered into offer letters with the Company in 2014 in connection with their appointment to their current roles at the Company, which provided for severance arrangements if they are respectively terminated without cause or resign for good reason not in connection with a change in control, and sign and do not revoke a waiver of claims against the Company. Mr. Lawton, who was hired a few months before the Spin-Off of PayPal, does not participate in the Standard Severance Plan because his offer letter provided severance arrangements if he is terminated without cause or resigns for good reason not in connection with a change in control, and he signs and does not revoke a waiver of claims against the Company.

The following chart describes the severance benefits that each of our NEOs would receive if terminated outside of a change in control.

cic

(1) Mr. Lawton’s severance payment is equal to one and half times salary and one and half times target cash incentive award if his termination is after the one-year anniversary but before the second anniversary of the commencement of his employment. If his termination is after the second anniversary of the commencement of his employment, then his severance payment is equal to one times salary and one times target cash incentive award.
(2) For Mr. Wenig, Mr. Schenkel and Mr. Lawton, based only on actual performance with respect to the Company performance element for the full year. For Standard Severance Plan Participants, based on actual performance with respect to the Company performance element for the full year and target performance with respect to the individual performance element.
(3) For Mr. Wenig, Mr. Schenkel and Mr. Lawton, the Company shall pay cash in lieu of accelerated vesting. For Standard Severance Plan Participants, the Company can elect to pay cash in lieu of accelerated vesting. The cash value of such unvested equity is determined using the average closing price of the Company’s common stock for the ten consecutive trading days ending on and including the trading day immediately prior to his or her termination date.
(4) For Standard Severance Plan Participants, this includes the actual amount of shares that would have been granted with respect to PBRSUs for performance periods completing on or before the first anniversary of the date of his or her termination. For Mr. Wenig, Mr. Schenkel and Mr. Lawton, this includes the target amount of shares with respect to PBRSUs for performance periods for which achievement has not yet been determined.

Involuntary Termination in Connection with a Change in Control (Column (d))

The Company’s Change in Control Severance Plan provides severance protection in connection with a change in control if a participant is terminated without cause or resigns for good reason and signs and does not revoke a waiver of claims against the Company. Mr. Fisher and Mr. Pittman participate in the Change in Control Severance Plan.

Mr. Wenig, Mr. Schenkel, and Mr. Lawton do not participate in the Change in Control Severance Plan. Mr. Wenig and Mr. Schenkel entered into offer letters with the Company in 2014 in connection with their appointment to their current roles at the Company, which provided for change in control arrangements if they are respectively terminated without cause or resign for good reason in connection with a change in control, and sign and do not revoke a waiver of claims against the Company. Mr. Lawton, who was hired a few months before the Spin-Off of PayPal, does not participate in the Change in Control Severance Plan because his offer letter provided change in control arrangements if he is terminated without cause or resigns for good reason in connection with a change in control, and signs and does not revoke a waiver of claims against the Company.

The following chart describes the severance benefits that each of our NEOs would receive if they are terminated in connection with a change in control.

cic-2

(1) For Mr. Wenig, Mr. Schenkel and Mr. Lawton, based only on actual performance with respect to the Company performance element for the full year. For Change in Control Severance Plan Participants, based on target performance with respect to both the Company performance element and the Individual performance element.
(2) For Mr. Wenig, Mr. Schenkel and Mr. Lawton, the Company shall pay cash in lieu of accelerated vesting. For Change in Control Severance Plan Participants, the Company can elect to pay cash in lieu of accelerated vesting. The cash value of such unvested equity is determined using the average closing price of the Company’s common stock for the ten consecutive trading days ending on and including the trading day immediately prior to his or her termination date.
(3) This payment includes the target amount of shares subject to PBRSUs for performance periods for which achievement has not yet been determined.

Death or Disability (Column (e))

Mr. Wenig, Mr. Schenkel and Mr. Lawton

Pursuant to their respective offers letters, if Mr. Wenig’s, Mr. Schenkel’s or Mr. Lawton’s employment, respectively, terminates due to his death or disability (as defined in the applicable offer letter), he will be entitled to receive within 30 days of his termination date a cash payment equal to the value of any unvested equity awards, including the target amount of shares subject to PBRSUs for performance periods for which achievement has not yet been determined, that would have otherwise vested within 24 months of his termination date (where the value of such unvested equity is determined using the average closing price of the Company’s common stock for the 10 consecutive trading days ending on and including the trading day immediately prior to his termination date).

Mr. Fisher and Mr. Pittman

Pursuant to the Standard Severance Plan, if, outside a change in control, Mr. Fisher’s or Mr. Pittman’s employment, respectively, terminates due to his death or disability (as defined in the Standard Severance Plan) then he is entitled to receive the vesting (or payment of cash in lieu of vesting at the election of the Company) of his unvested equity, including the target amount of shares subject to PBRSUs for performance periods for which achievement has not yet been determined, that would have otherwise vested within 24 months of his termination date (where the cash value of such unvested equity is determined using the average closing price of the Company’s common stock for the 10 consecutive trading days ending on and including the trading day immediately prior to his termination date).

Pursuant to the Change in Control Severance Plan, if, in connection with a change in control, Mr. Fisher’s or Mr. Pittman’s employment, respectively, terminates due to his death or disability (as defined in the Change in Control Severance Plan) then he is entitled to receive the vesting (or payment of cash in lieu of vesting at the election of the Company) of all his unvested equity, including the target amount of shares subject to PBRSUs for performance periods for which achievement has not yet been determined (where the cash value, if applicable, of such unvested equity is determined using the average closing price of the Company’s common stock for the 10 consecutive trading days ending on and including the trading day immediately prior to his termination date).

 

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