Compensation Tables

Compensation Tables

2017 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, 2017 and, to the extent required under the SEC executive compensation disclosure rules, the fiscal years ended December 31, 2016 and 2015.

Jae Hyun Lee Compensation

Mr. Lee received his salary, car and housing allowance and non-equity incentive plan compensation in Singapore dollars, which were converted to U.S. dollars based on the closing exchange rate reported by Reuters on December 29, 2017.

Bonus (Column (d))

Mr. Cutler and Mr. Fisher received supplemental cash payments pursuant to their respective 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 each of the applicable years, 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 the 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 2017, RSU awards were granted to our NEOs in connection with the Company’s annual equity grant in April with a grant date value of $5,600,013 for Mr. Wenig, $2,742,468 for Mr. Schenkel, $1,008,275 for Mr. Cutler, $2,823,136 for Mr. Fisher and $1,613,240 for Mr. Lee. In addition, supplemental RSU awards were granted to Mr. Cutler in May with a grant date value of $2,053,193 and in September with a grant date value of $1,642,906. A supplemental RSU award was also granted to Mr. Lee in September with a grant date value of $1,232,179.

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 2017-2018 PBRSU awards, see “Compensation Discussion and Analysis — Elements of Our Executive Compensation Program — Equity Incentive Awards — PBRSU Program” above.

For 2017, PBRSU awards were granted to our NEOs in connection with the Company’s annual equity grant in April with a grant date value of $8,400,020 for Mr. Wenig, $4,113,701 for Mr. Schenkel, $4,234,721 for Mr. Fisher and $2,419,826 for Mr. Lee. In September, promotional PBRSU awards were granted to Mr. Cutler with a grant date value of $2,464,320 and to Mr. Lee with a grant date value of $1,848,230 in connection with their new roles.

Assuming the highest level of performance is achieved under the applicable performance measures for the 2017-2018 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:

The value that our NEOs received in 2017 from the vesting of stock awards is reflected in the 2017 Option Exercises and Stock Vested table below. Additional information on all outstanding stock awards as of December 31, 2017 is reflected in the 2017 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 calculated in accordance with the Financial Accounting Standards Board’s Accounting Standards Codification Topic 718, Compensation — Stock Compensation.

For 2017 and 2016, in accordance with our revised equity guidelines, no option awards were granted to our NEOs.

The value that our NEOs received in 2017 from the exercise of previously granted stock options is reflected in the 2017 Option Exercises and Stock Vested table below. Additional information on all outstanding option awards as of December 31, 2017 is reflected in the 2017 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 each of the applicable years. 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 $10,800 for each of our NEOs, other than Mr. Lee, which represents the maximum matching contributions made by the Company to the Company’s 401(k) savings plan for the benefit of our U.S.-based NEOs, which also is the same maximum amount applicable to each participating employee for 2017; and

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

(c)  Car and housing allowance for Mr. Lee in the amounts of $1,988 and $9,000 per month, respectively, which were paid directly to Mr. Lee in connection with his employment by the Company in Singapore.

(d)  An amount of $67,469 in personal airplane usage for Mr. Wenig. The cost of personal airplane usage is calculated based on a methodology that includes the weighted average cost of fuel, maintenance expenses, parts and supplies, landing fees, ground services, catering, and crew expenses associated with such use, including those associated with “deadhead” flights related to such use.

(e)  An amount of $47,697 in relocation expenses for Mr. Fisher, including moving expenses, automobile shipment costs, other relocation services and a related tax gross-up of $8,453. These relocation expenses were valued on the basis of the aggregate incremental cost to the Company and represent the amount accrued for payment or paid to the applicable service provider.

(f)  An amount of $12,289 in home security expenses for Mr. Wenig relating to hardware installation and monitoring services by outside security providers. The incremental cost associated with the home security services is determined based upon the amount paid to the applicable outside security provider.

2017 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, 2017.

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 2017, the total annual target incentive amounts under the annual cash incentive plan for the NEOs were as follows:

The total 2017 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 2017, these thresholds were met.

Actual payouts to our NEOs under the annual cash incentive plan for the fiscal year ended December 31, 2017 are reflected in the Non-Equity Incentive Plan Compensation column in the 2017 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, 2017 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, 2017 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 2017-2018 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 target FX-neutral revenue and non-GAAP operating margin dollar amounts are met, 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 2017 vest over a four-year period with 1/16th of the shares underlying the RSU award vesting on June 15, 2017 (or, December 15, 2017, in the case of Mr. Cutler’s and Mr. Lee’s September grants), 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 2017-2018 performance period as of the date on which those PBRSUs were granted for accounting purposes.

2017 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, 2017.

(1) Market Value is calculated based on a price per share of $37.74, which was the closing price of our common stock on December 29, 2017.
(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 of the 2015-2016 PBRSU performance period; for Mr. Wenig and Mr. Schenkel, 100% vested on March 1, 2018, and for the remaining NEOs, 50% vested on March 1, 2017, and the remaining 50% vested on March 1, 2018.
(6) Becomes fully vested after four years, with 1/16th vesting on June 15, 2017, and additional 1/16th vesting each quarter thereafter.
(7) Becomes fully vested after three years, with 100% vesting on the third anniversary of the date of grant.
(8) 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.
(9) Becomes fully vested after four years, with 1/16th vesting on December 15, 2017, and additional 1/16th vesting each quarter thereafter.
(10) Earned in connection with achievement of the 2016-2017 PBRSU performance period; for Mr. Wenig and Mr. Schenkel, 100% vests on March 15, 2019, and for the remaining NEOs, 50% vested on March 15, 2018, and the remaining 50% vests on March 15, 2019.
(11) In accordance with the SEC executive compensation disclosure rules, represents the estimated future award of PBRSUs at the maximum performance level under the 2017-2018 performance period based on Company performance through 2017. 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 — Equity Incentive Awards — PBRSU Program” above for a more detailed discussion of these awards and related performance measures.
(12) The March 15, 2018 grant date represents the date on which the 2016-2017 PBRSUs were converted to (i) RSUs in the case of Mr. Wenig and Mr. Schenkel and (ii) RSUs and shares of Common Stock in the case of the remaining NEOs.

2017 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 op

(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, 2017.

(1) With respect to Mr. Wenig and Mr. Schenkel, an involuntary termination includes a termination without cause or resignation for good reason. With respect to Mr. Cutler, Mr. Fisher and Mr. Lee, 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) The Death or Disability Benefit for Mr. Cutler, Mr. Fisher and Mr. Lee 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. Cutler’s Death or Disability Benefit would be $13,796,737, Mr. Fisher’s Death or Disability Benefit would be $25,024,051 and Mr. Lee’s Death or Disability Benefit would be $13,412,843.
(3) Represents a separation benefit payable to Mr. Lee upon a voluntary termination of employment, which is intended to replicate benefits offered under a retirement program in which Mr. Lee formerly participated when he was employed with the Company in Korea. Under the terms of Mr. Lee’s offer letter, in the event Mr. Lee terminated his employment with the Company, he would receive a separation benefit equal to 15 times his average monthly salary, based on five years of completed service since January 1, 2013.
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 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, 2017, calculated based on the closing price of our common stock on December 29, 2017, would be as follows:

(*) Includes the target amount of shares subject to PBRSUs for performance periods for which achievement has not yet been determined.
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. Cutler, Mr. Fisher and Mr. Lee participate in the Standard Severance Plan.

Mr. Wenig and Mr. Schenkel 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.

Under the terms of Mr. Lee’s offer letter entered into in connection with his promotion to his current role, Mr. Lee is entitled to receive a separation payment in the event he terminates his employment with the Company. This separation payment is intended to replicate benefits offered under a retirement program in which Mr. Lee formerly participated when he was employed with the Company in Korea. The benefit is equal to three times his average monthly salary multiplied by his years of service since January 1, 2013. In contrast, should the Company terminate Mr. Lee’s employment for reason other than cause, Mr. Lee is entitled to benefits under the Standard Severance Plan. Mr. Lee’s offer letter also includes a non-competition restrictive covenant for 12-months post termination of employment.

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

  Standard Severance Plan ParticipantsMr. Wenig and Mr. Schenkel
Cash ElementsSeverance1x salary and 1x target cash incentive award2x salary and 2x target cash incentive award
eIPProrated payment for year in which termination occurs(1)
Health Premium2x the cost of 12 months of health insurance coverageNo payment
Make Good AwardPayment of any unpaid cash “make good” awardsn/a
Equity ElementsOptions and RSUs100% acceleration of awards that would have otherwise vested within 12 months of termination date (2)
PBRSUs100% acceleration of awards that would have otherwise vested within 12 months of termination date (2)
(1) For Mr. Wenig and Mr. Schenkel, 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.
(2) For Mr. Wenig and Mr. Schenkel, 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.
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. Cutler, Mr. Fisher and Mr. Lee participate in the Change in Control Severance Plan.

Mr. Wenig and Mr. Schenkel 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.

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.

  Change in Control Severance Plan ParticipantsMr. Wenig and Mr. Schenkel
Cash ElementsSeverance2x salary and 2x target cash incentive award
eIP1x target cash incentive award(1)Prorated payment for year in which termination occurs(1)
Health Premium2x the cost of 24 months of health insurance coverageNo payment
Make Good AwardPayment of any unpaid cash “make good” awardsn/a
Equity ElementsOptions and RSUs100% acceleration of awards(2)
PBRSUs100% acceleration of awards(2)(3)
(1) For Mr. Wenig and Mr. Schenkel, 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 component and the individual performance component.
(2) For Mr. Wenig and Mr. Schenkel, 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 and Mr. Schenkel

Pursuant to their respective offers letters, if Mr. Wenig’s or Mr. Schenkel’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. Cutler, Mr. Fisher and Mr. Lee

Pursuant to the Standard Severance Plan, if, outside a change in control, Mr. Cutler’s, Mr. Fisher’s or Mr. Lee’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. Cutler’s, Mr. Fisher’s or Mr. Lee’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 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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