UNITED STATES 

SECURITIES AND EXCHANGE COMMISSION 

Washington, D.C. 20549

 

SCHEDULE 14A INFORMATION

 

Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934

 

 Filed by the Registrant x  Filed by a party other than the Registrant o  

 

Check the appropriate box:

 

o Preliminary Proxy Statement

 

o Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

 

x Definitive Proxy Statement

 

o Definitive Additional Materials

 

o Soliciting Material under § 240.14a-12

 

LENDINGTREE, INC.

 

(Name of Registrant as Specified In Its Charter)

 

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

 

Payment of Filing Fee (Check the appropriate box):

 

x No fee required.
   
o Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
  (1) Title of each class of securities to which transaction applies:
     
     
  (2) Aggregate number of securities to which transaction applies:
     
     
  (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
     
     
  (4) Proposed maximum aggregate value of transaction:
     
     
  (5) Total fee paid:
     
     
o Fee paid previously with preliminary materials.
o Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11 (a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
  (1) Amount Previously Paid:
     
     
  (2) Form, Schedule or Registration Statement No.:
     
     
  (3) Filing Party:
     
     
  (4) Date Filed:
     

 

 

 

 

 

 

Proxy Statement

 

 

 

 

Notice of 2021 Annual 

Meeting of Stockholders

 

AGENDA ITEM

BOARD 

RECOMMENDATION

FOR MORE 

INFORMATION 

1. To elect eight members of our Board of Directors, each to hold office for a one-year term ending on the date of the next succeeding annual meeting of stockholders or until such director’s successor shall have been duly elected and qualified (or, if earlier, such director’s removal or resignation from our Board of Directors) ü

FOR 

(all nominees)

 

Page 21
2. To Approve the LendingTree, Inc. Employee Stock Purchase Plan ü FOR Page 30
3. To Approve an Amendment and Restatement of the LendingTree, Inc. Sixth Amended and Restated 2008 Stock and Annual Incentive Plan ü FOR Page 58
4. Ratification of selection of PricewaterhouseCoopers LLP as LendingTree’s independent registered public accounting firm ü FOR Page 65

 

Note: We also will consider any other matters that may properly be brought before the Meeting (and any postponements or adjournments of the Meeting). As of the date of this proxy statement, we have not received notice of any such matters.

Annual Meeting of Stockholders

 

June 9, 2021

 

11:00 a.m. Eastern Time

 

Virtual Meeting via Live Webcast:

 

www.virtualshareholdermeeting.com/TREE2021

 

 

HOW TO VOTE

 

Your vote is important. Please vote as promptly as possible.

 

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Stockholders to Be Held on June 9, 2021 (the “Meeting”): Both the proxy statement and LendingTree’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020, are available electronically at: www.proxyvote.com

 

 

2021 Virtual Annual Stockholder Meeting 

In light of ongoing developments related to the coronavirus (COVID-19) pandemic and after careful consideration, the Board of Directors has determined to hold a virtual annual meeting in order to protect the health and safety of our stockholders, Board, management and community. You will not be able to attend the meeting in person, but we are committed to ensuring that stockholders will be afforded comparable rights and opportunities to participate as they would at an in-person meeting. You will be able to attend the meeting online, vote your shares electronically and submit questions prior to the meeting by visiting www.virtualshareholdermeeting.com/TREE2021. To participate in the virtual meeting, you will need the 16-digit control number included on your Notice, proxy card or voting instruction form. The meeting webcast will begin promptly at 11:00 a.m. Eastern Time on June 9, 2021. We encourage you to access the meeting prior to the start time. Online check-in will begin at 10:00 a.m., Eastern Time, and you should allow ample time for the check-in procedures. If you encounter any difficulties accessing the virtual meeting during the check-in process or meeting time, please call 844-986-0822 / International: 303-562-9302 on the meeting date. Technical assistance will be available through the conclusion of the Annual Meeting.

 

 

 

 

Our Board of Directors has set April 12, 2021 as the record date for the Annual Meeting. This means that holders of record of our common stock at the close of business on that date are entitled to receive notice of the Annual Meeting and to vote their shares at the Annual Meeting and any related adjournments or postponements.

 

Notice 

We are distributing to certain stockholders a Notice of Internet Availability of Proxy Materials on or about April 29, 2021. This Notice informs those stockholders how to access our Proxy Statement and our 2020 Annual Report to Stockholders and how to vote electronically via the Internet. The Notice also contains instructions on how to receive a paper copy of the proxy materials.

 

If there are questions pertinent to meeting matters that cannot be answered during the Annual Meeting due to time constraints, management will post answers to a representative set of such questions at investors.lendingtree.com. The questions and answers will remain available until LendingTree’s 2022 Proxy Statement is filed. We also encourage you to read our Annual Report on Form 10-K available at www.proxyvote.com.  

 

Important Notice Regarding the Availability of Proxy Materials for the 2021 Annual Meeting of Stockholders to be held on June 9, 2021: Copies of the Proxy Statement and of our annual report for the fiscal year ended December 31, 2020 are available by visiting the following website: www.proxyvote.com.

 

 

Lisa M. Young 

Corporate Secretary

 

 

 

 

 

April 29, 2021

 

Dear Fellow LendingTree Stockholders:

 

Introduction

 

I begin this annual letter with a sense of pride about our Company, our employees and the work we do every day. I truly believe that LendingTree is a dynamic and exciting place to work and it is a privilege to lead this Company into 2021.

 

2020 in Review

 

As I look back on 2020, I am most proud of the fact that despite headwinds to certain of our businesses, we were fortunate to maintain a healthy and productive workforce along with a strong balance sheet and sustained positive cash flows. This enabled us to remain focused on execution - serving our customers and partners - without losing sight of our broader strategic objectives around innovation and scale. While 2020 presented our Company with a number of challenges driven by the fallout from the COVID-19 pandemic, it also surfaced a great deal of opportunity to lean in to certain areas of our business and re-evaluate our strategic direction and operational focus. In aggregate, total Company revenue declined 18% in 2020, but the weakness was isolated to a few specific product categories that were severely, and temporarily, as time has shown, impacted by effects of the pandemic. Despite the headwinds, many areas of our business saw great strength, and furthermore, a heightened focus on innovation and execution has our Company incredibly well-positioned as the economic recovery continues to unfold.

 

The areas of our business most impacted by the economic fallout from the pandemic were our credit card, personal loan, and small business exchanges. Spiking unemployment and social distancing requirements, in part combatted by government stimulus and fiscal policy, drove uncertainty in consumer credit and small business credit markets. Although these markets seized up in the early stages of the crisis, causing many of marketplace participants to reduce their investments in customer acquisition, we have continued to see gradual recovery and increasing signs of health in those businesses as time has worn on. While revenue in our Consumer segment was down 71% from 2019 levels in the second quarter 2020, at the height of the pandemic, that year-over-year decline stemmed to 58% in the fourth quarter 2020, and we continue to see improving trends thus far in 2021. We continued to invest in these businesses throughout 2020 to sustain and grow brand awareness with consumers and strengthen relationships with our lending partners, and remain confident that we're well-positioned to grow these businesses well into the future.

 

While our Consumer segment was adversely impacted by the events of the pandemic, our Home segment thrived, growing revenue and segment profit by 15% and 28%, respectively, over fiscal 2019. As mortgage interest rates moved lower throughout much of the year sparking a wave of mortgage refinancing, the strength of our offering combined with impeccable execution enabled us to take advantage of an extraordinary market and gain share with our partners. We made great strides in our ongoing effort to deliver superior shopping experiences for borrowers while diversifying and enhancing our lender solutions. Our leading presence in the mortgage market remains a substantial competitive advantage.

 

The Insurance segment also sustained its run of impressive results in 2020, growing revenue and segment profit by 17% and 14%, respectively. The QuoteWizard and ValuePenguin businesses we acquired in late 2018 and early 2019, have enabled us to become a leader in the $140 billion insurance distribution market. As has been the case in several acquisitions over the last few years, we have demonstrated an ability to acquire high-quality businesses and help them accelerate through our world-class marketing capabilities and scale. In insurance, we have significantly improved and diversified both our sources of consumer acquisition and partner distribution, as well as broadened our product offering to include more meaningful health and Medicare solutions in addition to auto and home.

 

Finally, and perhaps most importantly, our My LendingTree platform continued to scale and evolve throughout 2020. We ended the year with 16.6 million members, up 20% over 2019. The functionality of the platform and the value it drives for members improved greatly throughout the year as the launch of a redesigned experience introduced the capability to help users manage their day-to-day cash flows and assess their financial futures in addition to simply monitoring credit and making recommendations. By enabling users to manage much of their financial lives in one connected and unbiased application, we're fulfilling our mission to help consumers simplify financial decisions for life's meaningful moments by providing choice, education and support.

 

Community Outreach

 

In 2020, we remained committed to helping our communities thrive. Our LendaHand Initiative, made up of all LendingTree, LendingTree Foundation and employee efforts, totaled over $1.766M in all giving and volunteering programs for 2020 with over 141 organizations impacted and 340 employee volunteer hours recorded.

 

To help those most affected by COVID-19, the LendingTree Foundation donated $1,000,000 to the COVID-19 Response Fund for the city of Charlotte, North Carolina and $250,000 to launch our LendaHand Employee Relief Fund.

 

 

 

 

Our 2021 Plans

 

As we head into 2021, we have a broad array of strategic initiatives outlined that all serve to accomplish the greater objectives of growing, engaging, and delighting our customers while serving our partners in a more integrated and automated fashion.

 

Concluding remarks

 

While 2020 was certainly a challenging year in many respects, I'm incredibly proud of how we came together as a Company and navigated those challenges to minimize the disruption to our business. Our diversified business model has once again enabled us to withstand turbulence in the markets around us, and we are stronger for it. In a year unlike any other, our team rose to the challenge and delivered for our stakeholders.

 

Thank you all for your continued support of our Company and the work we do together.

 

Douglas Lebda 

 


Chairman and Chief Executive Officer
LendingTree, Inc. 

 

 

 

 

 

 

 

Table of Contents

 

Table of Contents

 

Proxy Summary 2
  2020 Performance Highlights 3
  Board Highlights 3
  Executive Compensation Highlights 6
  Stockholder Engagement 9
Certain Relationships with Related Transactions 10
  The “Spinco Agreements” with GCI Liberty, Inc. 10
  Other Arrangements 10
Related Person Transaction Policy 11
Corporate Governance 12
  Corporate Governance Practices 12
  Board of Directors Responsibilities and Structure 12
  Director Independence 15
  Qualifications of Directors 15
  Stockholder Recommendations of Director Candidates 15
  Board Evaluation Process 15
  Board Committees and Charters 16
  Compensation Committee Interlocks and Insider Participation 17
  Stockholder Engagement Process 18
  Corporate Social Responsibility 18
Proposal No. 1: Election of Directors 21
  Our Board Nominees 21
Director Compensation 27
  Overview of Our Compensation Program for Non-Employee Directors 27
  Director Stock Ownership Requirement 28
  Director Compensation Table 28
  Outstanding Equity Awards for Directors at Fiscal Year-End 2020 29
Proposal No. 2: Approval of Employee Stock Purchase Plan 30
Compensation Committee Report 32
  Compensation Discussion and Analysis 33
Executive Compensation Tables 50
  Fiscal 2020 Summary Compensation Table 50
  Grants of Plan-Based Awards During Fiscal 2020 51
  Outstanding Equity Awards at Fiscal 2020 Year-End 52
  Option Exercises and Stock Vested During Fiscal 2020 53
  Pension Benefits 53
  Non-Qualified Deferred Compensation 53
  Potential Payments Upon Termination of Employment or Change in Control 54
  CEO Pay Ratio 57
Proposal No. 3: Approval of Amendment and Restatement of 2008 Stock and Annual Incentive Plan 58
Proposal No. 4: Ratification of Selection of Independent Registered Public Accounting Firm 65
Audit Committee Report 67
Stock Ownership Information 68
  Security Ownership Table 68
  Delinquent Section 16(a) Reports 69
Information About the Meeting, Voting and Proxies 70
Appendix A – Information Regarding Non-GAAP Financial Measures A-1
Appendix B – LendingTree, Inc. Employee Stock Purchase Plan B-1
Appendix C – Seventh Amended and Restated LendingTree, Inc. 2008 Stock Plan C-1

 

1 LENDINGTREE 2021 Proxy Statement | Table of Contents

 

 

Table of Contents

 

 

This summary highlights information contained elsewhere in this proxy statement. It does not contain all of the information that you should consider. You should read the entire proxy statement carefully before voting.

 

We have first released this proxy statement to LendingTree stockholders beginning on April 29, 2021.

 

ANNUAL MEETING OF STOCKHOLDERS

 

 

You are entitled to vote if you held LendingTree stock on the record date. Holders of our common stock are entitled to one vote per share.

 

AGENDA

 

Proposal

Board 

Recommendation 

For More 

Information 

1.   Election of eight directors

ü

FOR 

(all nominees)

 

Page 21
2.   Approval of the LendingTree, Inc. Employee Stock Purchase Plan

ü

FOR Page 30
3.   Approval of an Amendment and Restatement of the LendingTree, Inc. Sixth Amended and Restated 2008 Stock and Annual Incentive Plan

ü

FOR Page 58
4.   Ratification of selection of PricewaterhouseCoopers LLP as LendingTree’s independent registered public accounting firm

ü

FOR Page 65

 

Proxy Summary | LENDINGTREE 2021 Proxy Statement 2

 

 

Table of Contents

2020 Performance Highlights

 

In fiscal 2020, the ongoing impact of COVID-19 created significant challenges for our business and operations. During this challenging year, we continued to focus on improving items in our control to better position LendingTree for growth once the economy recovers from the COVID-19 pandemic.

 

In particular, our Home segment continued its strong performance in fiscal 2020, with segment revenue growth of 15% and segment profit growth of 28% year-over-year. Our Insurance segment had another solid year, with revenue growth of 17% and segment profit growth of 14% year-over-year. Our three most prominent businesses within the Consumer segment, and those that have been most impacted by the events of 2020, are credit cards, personal loans, and small business loans, and each of these business lines have begun to experience recovery in Q4 of fiscal 2020 compared to Q3 of fiscal 2020.

 

See Appendix A included in this proxy statement for information regarding non-GAAP financial measures, including a reconciliation of non-GAAP financial measures to GAAP financial measures.

 

Board Highlights 

 

Our Board of Directors is committed to maintaining an effective team of directors, which includes a commitment to diversity. The Nominating and Governance Committee considers the extent to which director nominees possess diverse qualities that make us able to respond most appropriately to our stockholders and customers.

 

BOARD OVERVIEW

 

The following charts reflect the tenure, age and gender of the nominees for our Board of Directors as of the date of this proxy statement:

 

 

  

 

3 LENDINGTREE 2021 Proxy Statement | Proxy Summary

 

 

Table of Contents

 

EXPERIENCE AND EXPERTISE

 

The following chart reflects the experience and expertise of the eight nominees for our Board of Directors. These are the skills and qualifications our Board of Directors considers important for our directors in light of our current business and structure.

 

 

BOARD NOMINEES AND COMMITTEE MEMBERSHIPS

 

The following table provides summary information about each director nominee, including current committee memberships.

 

            Committee Memberships (1)
DIRECTOR NOMINEE AGE

DIRECTOR 

SINCE

PRINCIPAL OCCUPATION

OTHER 

PUBLIC
COMPANY
BOARDS 

INDEPENDENT AUDIT COMPENSATION

NOMINATING AND 

CORPORATE 

GOVERNANCE

TRANSACTIONS
Gabriel Dalporto 49 2017 Chief Executive Officer of Udacity, Inc. 0      

Thomas M. Davidson, Jr. 49 2017 Chief Executive Owner of EverFi, Inc. 0     c

Robin Henderson 51 2014 Senior Director, Private Capital Group, of RXR Realty 0

 

 
Douglas Lebda (Chairman of the Board of Directors) 51 2008 Chairman, Chief Executive Officer and a member of the Board of Directors of LendingTree, Inc. 0         c

 

Proxy Summary | LENDINGTREE 2021 Proxy Statement 4

 

 

Table of Contents

 

            Committee Memberships (1)
DIRECTOR NOMINEE AGE

DIRECTOR 

SINCE 

PRINCIPAL
OCCUPATION

OTHER 

PUBLIC

COMPANY

BOARDS 

INDEPENDENT AUDIT COMPENSATION

NOMINATING AND  

CORPORATE  

GOVERNANCE 

TRANSACTIONS
Steven Ozonian (Lead Independent Director) 65 2011 CEO of the Williston Financial Group 0 c c    
Saras Sarasvathy 62 2015 Paul Hammaker Professor of Business Administration at University of Virginia’s Darden Graduate School of Business 0    

 
G. Kennedy Thompson 70 2017 Former Partner of Aquiline Capital Partners 2

 

Jennifer Witz 52 2020 CEO of Sirius XM Holdings, Inc. 1  

   
      Number of meetings in fiscal 2020 5 7 5 10

 

(1) “C” indicates a committee chair.

 

5 LENDINGTREE 2021 Proxy Statement | Proxy Summary

 

 

Table of Contents

 

Executive Compensation Highlights

 

We employ a number of practices that reflect our pay-for-performance compensation philosophy and related approach to executive compensation.

 

 What we introduced since 2019

ü

Enhance our stock ownership guidelines to cover our CEO (6x base salary) and our other NEOs (3-1.5x base salary).

ü

Maintain a compensation recovery policy covering the cash and equity incentive compensation paid to our executive officers.

ü

Maintain a minimum vesting period of one year for all equity awards, subject to limited exceptions.

ü

Expressly prohibit payment of dividends on unvested equity awards.
 What we continued to do

ü

Tie the majority of named executive officers' (“NEOs”) compensation over time to equity awards, the ultimate value of which is driven by our overall performance and valuation.

ü

Grant performance-based equity incentive awards to our CEO with challenging performance hurdles.

ü

Review NEO compensation annually, with the review conducted by our Compensation Committee that consists solely of independent directors.

ü

Maintain stock ownership guidelines of 5x annual retainer for our independent directors.

 What we don’t do
× No excise tax gross-up.
× No supplemental company-paid retirement benefits.
× No repricing of stock options without stockholder approval.
× No granting of discounted or reload stock options.
× No guaranteed annual salary increases or bonuses.
×

No excise tax gross-up

 

Our executive compensation programs are intensely focused on aligning pay with performance: 

 

LendingTree achieved stellar five-year total shareholder return (“TSR”) that exceeded that of the broad market. Our annualized TSR from the beginning of fiscal 2016 through the end of fiscal 2020 was 25.1%, which is above the median of LendingTree’s current peer group. For reference, the Russell 1000 index had annualized returns of 11.3% over the same period.

 

Excluding the performance options granted to our CEO in December 2020 pursuant to his new employment agreement, which are viewed by the Company as compensation for fiscal 2021 – 2023, 92% of our CEO’s fiscal 2020 total direct compensation was performance-based, with actual realized value based on achievement of Objectives and Key Results (“OKRs”) or our stock price performance. 50% of our CEO’s fiscal 2020 annual long-term incentive awards were performance options that require stock price appreciation of 41% before threshold-level awards are earned (33% of target), 81% before target-level awards are earned, and 121% before maximum-level awards are earned (167% of target). None of these performance options have been earned to date.

 

Proxy Summary | LENDINGTREE 2021 Proxy Statement 6

 

 

Table of Contents

 

CEO Fiscal 2020

Total Direct Compensation 

 

 

 

100% of the long-term incentives granted in December 2020 pursuant to our CEO's new employment agreement are highly performance-based:
     
30% are stock options that have a 25% premium exercise price.
     
70% are stock options that (a) have a 25% premium exercise price and (b) are only earned if there is future achievement of stock price increases between 81% and 191% above the share price on the date of grant.
     
These awards reflect the entirety of our CEO's long-term incentive compensation through the end of fiscal 2023, meaning that our CEO will not receive any additional long-term incentive awards in 2021, 2022 or 2023, and are viewed by the Company as compensation for fiscal 2021 - 2023, rather than as part of the 2020 CEO compensation program. They are reported as our CEO's compensation for fiscal 2020 in the Summary Compensation Table, because the awards were granted in the final month of fiscal 2020.

 

Options granted to our CEO in connection with his new employment agreement have a truly long-term orientation, as these awards do not fully vest for six years and have a two-year holding requirement on the net after-tax shares retained by our CEO following his exercise. 70% of the options have performance price hurdles that require a minimum stock price growth of 135% over 4.25 years in order to be earned at target, and all of the options have a 25% premium exercise price. As a result, the option design ensures that our stockholders earned a substantial return before our CEO could realize value from the exercise of the options.

 

Our CEO’s salary and bonus target have not increased since fiscal 2017, and our CEO’s salary will not increase in fiscal 2021, 2022, or 2023 based on the terms of his new employment agreement.

  

All of our NEOs’ ordinary course equity awards are subject to vesting over a three-to-five year period, which focuses our NEOs’ attention on delivering sustained long-term growth and profitability for LendingTree and therefore both retains their services and aligns their interests with our stockholders.

 

During fiscal 2021, we implemented a rigorous stock ownership policy for our executives. Under the policy, our NEOs are required to maintain minimum beneficial ownership of our stock equal to 6x of base salary for our CEO and 3-1.5x of base salary for our other NEOs. As of December 31, 2020, all of our NEOs were in compliance with the stock ownership policy.

 

During fiscal 2021, we implemented a compensation recovery policy, under which the Compensation Committee has the discretion to recover performance-based equity and cash incentive compensation paid to our executive officers, including the NEOs, if the compensation would not have been earned based on a material restatement of our financial statements within the prior three years or due to the NEO’s termination for cause.

 

7 LENDINGTREE 2021 Proxy Statement | Proxy Summary

 

 

Table of Contents

 

STOCKHOLDER VALUE DELIVERED

 

 

 

Returns over the indicated periods should not be considered indicative of future stock prices or stockholder returns. This graph shall not be deemed "filed" for purposes of Section 18 of the Exchange Act or incorporated by reference into any filings under the Securities Act or the Exchange Act, except as otherwise expressly set forth by specific reference in such filing.

 

Proxy Summary | LENDINGTREE 2021 Proxy Statement 8

 

 

Table of Contents

 

Stockholder Engagement 

 

At LendingTree, we strive to engage with stockholders on a consistent basis so as to better understand their perspectives and concerns. We have historically held Analyst & Investor Days, and we engage in investor outreach programs and have direct communication channels between stockholders and the Board. We engage with our stockholders throughout the year to get their perspectives and feedback on various topics, which allows us to better understand their priorities and concerns. Among the topics which we engaged with our stockholders about are: financial results, financial outlook, corporate strategy and priorities, key initiatives across various business lines, our balance sheet and capital allocation philosophy. Stockholders may at any time communicate with any of our directors by emailing us at legal@lendingtree.com.

 

See the Stockholder Engagement Process discussion in the Corporate Governance section on page 18 of this proxy statement for more detail about our stockholder engagement program.

 

9 LENDINGTREE 2021 Proxy Statement | Proxy Summary

 

 

Table of Contents

 

 

The “Spinco Agreements” with GCI Liberty, Inc. 

 

GCI Liberty was a significant shareholder until November 18, 2020, when it completed the sale of its ownership stake in our common stock. In May 2008, IAC/InterActiveCorp entered into a "Spinco Agreement" with Liberty Interactive Corporation, or Liberty Interactive, and certain others. In August 2008, IAC/InterActiveCorp spun off our company and we entered into a Spinco Assignment and Assumption Agreement pursuant to which we assumed from IAC/InterActiveCorp certain rights and obligations under the Spinco Agreement related to our company. The Spinco Agreements also required us to enter into a Registration Rights Agreement with Liberty Interactive and certain others at the time of the spin-off. On November 2, 2017, we entered into an Assignment and Assumption Agreement with Liberty Interactive, General Communication, Inc., or GCI, and certain others, which authorized Liberty Interactive to transfer its holdings of our stock and all of its applicable rights and obligations under the Spinco Agreements (subject to limited exceptions, as provided in the Spinco Agreements) and Registration Rights Agreement to GCI as part of a "split-off".

 

On March 9, 2018, Liberty Interactive, GCI and certain other parties consummated the split-off as contemplated by the Assignment and Assumption Agreement. As of April 29, 2019, Liberty Interactive's successor in interest, GCI Liberty, Inc. reported on a Schedule 13D/A filed with the SEC beneficial ownership of 3,443,989 shares of our common stock. This amount represented 26.4% of our outstanding common stock as of our record date in 2020 (April 13, 2020). On November 18, 2020, GCI completed an underwritten public offering and forward sale of its ownership stake in our common stock. As a result of GCI ceasing to beneficially own any shares of our common stock, the Spinco Agreement automatically terminated pursuant to its terms. In connection therewith, GCI's right to nominate directors to our Board, and certain other rights and obligations, including related transfer and stock acquisition restrictions, under the Stockholders Agreement, and registration rights under the Registration Rights Agreement, terminated.

 

The full Spinco Agreement is filed as Exhibit 10.1 to IAC/InterActiveCorp's Current Report on Form 8-K dated May 16, 2008, the full Spinco Assignment and Assumption Agreement is filed as Exhibit 10.6 to our Current Report on Form 8-K filed August 25, 2008, the full Registration Rights Agreement is filed as Exhibit 10.5 to our Current Report on Form 8-K filed August 25, 2008, and the full Assignment and Assumption Agreement is filed as Exhibit 99.7(D) to Liberty Interactive's Statement on Form SC 13D/A filed November 3, 2017.

 

Other Arrangements 

 

In 2017, our Audit Committee approved a relationship with EverFi, Inc. pursuant to which EverFi, Inc. would provide financial literacy digital learning courses in communities where the Company operates as part of the Company's community outreach and philanthropic efforts. The Company's financial commitment to EverFi, Inc. was $225,000 for each of 2017 and 2018. In 2019, the agreement with EverFi, Inc. was amended to (i) continue the Company's financial commitment through July 2022 in an amount up to $250,000 per year, and (ii) utilize EverFi, Inc.'s suite of online compliance training programs for the Company's employees through March 2022 for $30,000 per year. In 2020, the agreement with EverFi, Inc. was further amended to (i) include COVID safety training resources for Company employees through September 2023 for $5,000 for year one, $5,150 for year two, and $5,305 for year three, and (ii) creating single sign on access for Company employees and expanding access to training materials through October 2023 for $42,757 per year. Amendments to the initial EverFi, Inc. agreement were approved by our Audit Committee. Thomas Davidson, a director, is Chief Executive Officer and a significant equity owner of EverFi, Inc.

 

In fiscal 2020, we paid total compensation of $419,200, which is comprised of base salary, cash incentive compensation and equity awards, to Megan Greuling. For fiscal 2021, Ms. Greuling's annual salary is $135,000 and she has a target bonus of 30% of her annual salary. She also received $250,000 in a mix of restricted stock units and stock options in March 2021. Ms. Greuling is the spouse of our CEO and is our Vice President, Head of Corporate Communications.

 

Certain Relationships and Related Transactions | LENDINGTREE 2021 Proxy Statement 10

 

 

Table of Contents

 

 

 

Our Board of Directors has adopted a written policy setting forth the procedures we undertake while reviewing and approving related person transactions. The policy covers any transaction, arrangement or relationship in which we are or will be a participant, the amount involved exceeds $120,000, and in which any related person had, has or will have a direct or indirect material interest other than (a) employment relationships or transactions involving an executive officer and any related compensation solely resulting from such employment if such compensation was approved, or recommended to our Board of Directors for approval, by the Compensation Committee; (b) compensation for serving as a director; (c) payments arising solely from the ownership of our equity securities in which all holders of that class of equity securities received the same benefit on a pro rata basis; or (d) such other exclusions as may be permitted pursuant to applicable rules and regulations of the SEC or any stock exchange upon which our common stock may then be listed.

 

Under the policy, "related person" means: (1) any of our directors, director nominees or executive officers; (2) any person who is known to be the beneficial owner of more than 5% of any class of our voting securities; (3) any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law of, and/or any other person (other than a tenant or employee) sharing the household of, any person named in (2) or (3) above; (4) any firm, corporation or other entity or organization (profit or not-for-profit) for which any person named in (1)-(2) above serves as an employee, executive officer, partner or principal (or other similar position); and (5) any firm, corporation or other entity or organization (profit or not-for-profit) for which any person named in (1)-(2) above has a 5% or greater beneficial ownership interest.

 

Under the policy, all related person transactions where the amount involved exceeds $120,000 must be reviewed by either our Audit Committee or another independent body of our Board of Directors.

 

11 LENDINGTREE 2021 Proxy Statement | Related Persons Transaction Policy

 

 

Table of Contents

 

 

Corporate Governance Practices 

 

LendingTree is committed to good corporate governance that aligns with stockholder interests. We maintain numerous policies and practices that demonstrate this commitment, including the following: 

 

Board Practices, Composition, Accountability and Independence   Alignment with Stockholder Interests
    87.5% of our director nominees are independent.       One vote per share.
     
   Strong lead independent director with well-defined role.       Not a controlled company.
     
   Annual election of directors.      Do not require supermajority vote to amend charter or bylaws.
    Majority vote for director elections.      Executive compensation is intensely focused on pay for performance.
    Three  of our directors are female.    Stock ownership guidelines for directors and executive officers.
     
   One of our directors self identifies as racially/ethnically diverse.    
     
    Annual Board and committee evaluations.    

 

Board of Directors Responsibilities and Structure 

 

ROLES

 

Our Board of Directors acts as an agent of LendingTree’s stockholders by closely monitoring the performance of LendingTree’s management. The Board of Directors primarily:

 

  Assesses LendingTree's financial and corporate governance performance to determine whether LendingTree's policies and practices create value for LendingTree's stockholders.     Approves acquisitions, divestitures and investments and associated financing, employee retention and compensation arrangements.     Oversees the determination of compensation, benefit and related plans, policies and agreements to be submitted to the stockholders for final approval.

 

The Board’s Role in Strategy

 

Board Role in Risk Oversight

 

Our Board of Directors oversees an enterprise-wide approach to risk management, designed to support the achievement of organizational objectives, including strategic objectives, to enhance long-term organizational performance and stockholder value. A fundamental part of risk management is not only understanding the risks we face, how those risks may evolve over time, and what steps management is taking to manage and mitigate those risks, but also understanding what level of risk tolerance is appropriate for us. Management is responsible for the day-to-day management of the risks we face, while our Board of Directors, as a whole and through its committees, has responsibility for the oversight of risk management. In its risk oversight role, our Board of Directors has the responsibility to satisfy itself that the risk management processes designed and implemented by management are adequate and functioning as designed. Our Board of Directors regularly reviews information regarding cybersecurity, marketing, operations, finance and business development as well as the risks associated with each. In addition, our Board of Directors holds strategic planning sessions with management to discuss our strategies, key challenges, and risks and opportunities and receives a report on Sarbanes-Oxley compliance on at least an annual basis.

 

Corporate Governance | LENDINGTREE 2021 Proxy Statement 12

 

 

Table of Contents

 

While our Board of Directors is ultimately responsible for risk oversight, committees of our Board of Directors also have been allocated responsibility for specific aspects of risk oversight. In particular, the Audit Committee assists our Board of Directors in fulfilling its oversight responsibilities with respect to risk management in the areas of financial reporting, internal controls, risk assessment and risk management. Our Board of Directors and the Audit Committee regularly discuss with management the Company's major risk exposures, their potential financial impact on the Company, and the steps taken to monitor and control those risks. The Compensation Committee assists our Board of Directors in fulfilling its oversight responsibilities with respect to the risks arising from our compensation policies and programs. The Nominating and Corporate Governance Committee assists our Board of Directors in fulfilling its oversight responsibilities with respect to the risks associated with board organization, membership and structure, ethics and compliance, succession planning for our directors, and corporate governance.

 

Our full Board is responsible for overseeing material risks including risks relating to environmental or social matters, with the support of the Nominating and Corporate Governance Committee.

 

Board Oversight

 

Regularly review and discuss significant risks with management, including through annual strategic discussions and reviews of annual operating plans, financial performance, merger and acquisition opportunities, market environment updates, and presentations on specific risks.

 

Consider regular reports from each committee regarding risk matters under its purview.

  

    Audit Committee   Compensation Committee  

Nominating and Governance 

Committee 

  Transactions Committee
               
 

  Maintains the integrity of our financial statements. 

  Assesses the effectiveness of our internal control over financial reporting. 

  Monitors the qualifications and independence of our independent registered public accounting firm. 

 Oversees the performance of our internal audit function and independent registered public accounting firm. 

  Ensures our compliance with legal and regulatory requirements. 

 

 Annually reviews and approves the base salaries and incentive opportunities of our executive officers and assures compliance with associated regulatory requirements. 

 Periodically reviews and approves our executive officers’ incentive awards and opportunities, employment agreements and severance arrangements, change-in-control agreements and special or supplemental compensation or benefits. 

 Monitors the ongoing administration of stockholder-approved plans, policies and agreements. 

 Gives an annual Compensation Committee Report. 

  Periodically review the Company’s management succession planning.

 

 

  Identifies, evaluates and recommends candidates for election to our Board of Directors. 

 Considers any director candidates recommended by our stockholders. 

  Reviews and makes recommendations to the Board with respect to the compensation and benefits of directors. 

   Oversees our corporate governance practices and procedures, including reviewing and recommending to the Board for approval any changes related to our corporate governance framework.

   Reviews environmental, social and governance efforts that management has implemented to monitor and address the Company's impact on environmental and social issues.

 

  Reviews and assesses, and assists the Board in reviewing and assessing, potential acquisitions, divestitures and investments. 

  Conducts periodic reviews of completed transactions.

 

 

BOARD OF DIRECTORS LEADERSHIP STRUCTURE

 

Our Board of Directors may elect one of its members to be Chairman of the Board and may fill any vacancy in the position of Chairman of the Board at such time and in such manner as the Board of Directors determines is appropriate. The Chairman of the Board may be, but need not be, employed by the Company. The Chairman of the Board presides at and leads all meetings of the Board of Directors.

 

Mr. Lebda serves as our CEO and Chairman of our Board of Directors. Mr. Lebda is the founder of the Company and has served as our CEO and Chairman of our Board of Directors since our August 2008 spin-off from IAC/InterActiveCorp. Our Board of Directors believes that it is important to have a unified leadership vision which Mr. Lebda is uniquely positioned to provide. Our Board of Directors also believes that the Company is best served by a Chairman, like Mr. Lebda, who is actively involved with the Company and is therefore able to bring great depth of knowledge about the Company to the role.

 

In November 2016, the independent members of our Board of Directors designated Steven Ozonian to serve as Lead Independent Director. The Board of Directors determined that the Company would be well served by appointing a Lead Independent Director who is a non-employee and is independent (as such term is defined by the applicable rules of the Securities and Exchange Commission and Nasdaq Listing Rules). The Lead Independent Director serves as a liaison between the Chairman of the Board and the other directors and fosters free and open communication between the Board of Directors and management of the Company. The Lead Independent Director also assists the Chairman in reviewing and setting agendas for the Board of Directors meetings and in overseeing the effectiveness of the Board of Directors meetings. 

 

13 LENDINGTREE 2021 Proxy Statement | Corporate Governance

 

 

Table of Contents

 

 

  Role of Chairman of the Board     Role of Lead Independent Director
         
  Mr. Lebda’s responsibilities as Chairman of the Board include:     In November 2016, the Board of Directors designated Mr. Steven Ozonian to serve as Lead Independent Director. His responsibilities and authority in that role include:
 

  Setting the agenda for Board of Directors meetings in consultation with the Lead Independent Director. 

   Serving as liaison between the Board and senior management. 

  Conducting the annual board evaluation in consultation with the Lead Independent Director, at the direction of the Nominating and Corporate Governance Committee. 

  Being available to the Board of Directors to assume additional responsibilities, as may be requested from time to time. 

  Calling special meetings of the Board of Directors and stockholders.

 

   

  Presiding at meetings of the Board at which the Chairman of the Board is not present, including executive sessions of non-executive directors, which occur at least quarterly. 

  Approving the agenda for Board of Directors meetings (in consultation with the Chairman of the Board) and the schedule for Board of Directors meetings, including to provide that there is sufficient time for discussion of all agenda items. 

•   Ensuring the Board of Directors receives adequate and timely information. 

   Serving as liaison between the Chairman of the Board and the non-executive directors. 

  Conducting the annual board evaluation in consultation with the Chairman of the Board, at the direction of the Nominating and Governance Committee. 

   Being available for consultations and communications with major stockholders upon request.

   Calling executive sessions of the non-executive directors. 

 

BOARD OF DIRECTORS MEETINGS

 

The Board of Directors and its committees meet throughout the year on a set schedule and also hold special meetings and act by written consent from time to time as appropriate. The Board held eight meetings, and acted by unanimous written consent one time, during fiscal 2020.

 

ATTENDANCE AT BOARD OF DIRECTORS AND COMMITTEE MEETINGS

 

The Board of Directors expects that all directors will prepare for, attend and participate in all Board of Directors and applicable committee meetings, and will see that other commitments do not materially interfere with their service on the Board of Directors.

 

During fiscal 2020, all current directors attended at least 90% of the aggregate number of meetings of the Board of Directors and the committees on which they served. Five of the then serving directors attended the 2020 virtual Annual Meeting of Stockholders. We encourage all directors to attend the 2021 virtual annual meeting.

 

Corporate Governance | LENDINGTREE 2021 Proxy Statement 14

 

 

Table of Contents

 

Director Independence 

 

Under the Listing Rules of the Nasdaq Stock Market, our Board of Directors has a responsibility to make an affirmative determination that those members of our Board of Directors that serve as independent directors do not have any relationships with the Company and its businesses that would impair their independence. In connection with these determinations, our Board of Directors reviews information regarding transactions, relationships and arrangements involving the Company and its businesses and each director that it deems relevant to independence, including those required by the Listing Rules of the Nasdaq Stock Market.

 

Our Board of Directors has determined that each of Mr. Dalporto, Mr. Davidson, Ms. Henderson, Mr. Ozonian, Ms. Sarasvathy, Mr. Thompson and Ms. Witz is an independent director within the meaning of the applicable Nasdaq standards.

 

Qualifications of Directors 

 

Our Nominating and Corporate Governance Committee considers and recommends candidates for election to our Board of Directors as well as nominees for committee memberships and committee chairs to our Board of Directors. Each member of the Nominating and Corporate Governance Committee participates in the review and discussion of director candidates. The full Board of Directors makes final determinations on director nominees.

 

Our Board of Directors does not have specific requirements for eligibility to serve as a director of LendingTree. However, in evaluating candidates, regardless of how recommended, our Board of Directors considers whether the professional and personal ethics and values of the candidate are consistent with ours, whether the candidate’s experience and expertise would be beneficial to our Board of Directors in rendering its service to us, whether the candidate is willing and able to devote the necessary time and energy to the work of our Board of Directors and whether the candidate is prepared and qualified to represent the best interests of our stockholders.

 

In evaluating director candidates, the Chair of the Nominating and Corporate Governance Committee and other committee members may conduct interviews with certain candidates and make recommendations to the committee. Other members of our Board of Directors may also conduct interviews with director candidates upon request, and the Nominating and Corporate Governance Committee may retain, at its discretion, third-party consultants to assess the skills and qualifications of the candidates. Although our Board of Directors does not have a specific policy with respect to diversity, the Nominating and Corporate Governance Committee considers the extent to which potential candidates possess sufficiently diverse skill sets and diversity characteristics that would contribute to the overall effectiveness of our Board of Directors.

 

In identifying potential director candidates, the Nominating and Corporate Governance Committee seeks input from other members of our Board of Directors and executive officers, and may also consider recommendations by employees, community leaders, business contacts, third-party search firms and any other sources deemed appropriate by the Nominating and Corporate Governance Committee. Before the termination of the Spinco Agreement, the Nominating and Corporate Governance Committee considered candidates nominated by Liberty Interactive Corporation and its successor, GCI Liberty, Inc., in accordance with their rights under the Spinco Agreement. The Nominating and Corporate Governance Committee will also consider director candidates recommended by other stockholders to stand for election at the Annual Meeting of Stockholders so long as such recommendations are submitted in accordance with the procedures described below under “Stockholder Recommendations of Director Candidates.” Except for Ms. Chun and Ms. Witz, who were nominated by GCI Liberty, Inc. in accordance with their former rights under the Spinco Agreement, the Nominating and Corporate Governance Committee has not had any director candidates put forward by a stockholder or a group of stockholders that beneficially owned more than five percent of our stock for at least one year. After the termination of the Spinco Agreement, the Nominating and Corporate Governance Committee and Board determined it would be in the best interests of the Company and the stockholders for Ms. Witz to remain a director. 

 

Stockholder Recommendations of Director Candidates 

 

The Nominating and Corporate Governance Committee will evaluate candidates recommended by stockholders in the same manner as all other candidates brought to the attention of the Nominating and Corporate Governance Committee. Stockholders who wish to make such a recommendation should send the recommendation to legal@lendingtree.com. The subject line should read “Director Nominee Recommendation.” The recommendation must identify the sender as a stockholder, provide a brief summary of the candidate’s qualifications and experience, together with an indication that the recommended individual would be willing to serve (if elected).  The email must also be accompanied by evidence of the sender’s stock ownership. Any director recommendations will be reviewed by the Corporate Secretary and, if deemed appropriate, forwarded to the Chairman of the Board for further review. If the Chairman of the Board believes that the candidate fits the qualifications of a director described above, then the recommendation will be shared with the entire Board of Directors.

 

Board Evaluation Process 

 

Periodically, our Board members complete an assessment of Board performance. This assessment typically includes an evaluation of topics covered by the Board during the year, Board culture and structure, Board processes, and information received by the Board during the past year.  The Nominating and Corporate Governance Committee oversees this process. 

 

15 LENDINGTREE 2021 Proxy Statement | Corporate Governance

 

 

Table of Contents

 

 

Board Committees and Charters 

 

The Board has delegated certain responsibilities and authority to its four standing committees, as described below. Committees report regularly to the full Board on their activities and actions.

 

The Board currently has a standing Audit Committee, Compensation Committee, Nominating and Corporate Governance Committee, and Transactions Committee. Each committee has a charter that it reviews annually, making recommendations to our Board of Directors for any charter revisions that might be needed to reflect evolving best practices. The members of each of the Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee are independent and appointed by the Board based on recommendations of the Nominating and Corporate Governance Committee. These committees have the opportunity to meet in closed session, without management present, during each committee meeting. 

 

 

CURRENT MEMBERS

 

Steven Ozonian (Chair)

Robin Henderson
G. Kennedy Thompson

 

 

 

NUMBER OF MEETINGS
HELD IN FISCAL 2020

 

5

 

 

Audit Committee

 

The Audit Committee functions pursuant to a written charter adopted by our Board of Directors, a copy of which may be found at our website at https://investors.lendingtree.com/governance-documents (not hereby incorporated by reference). The Audit Committee is appointed by our Board of Directors to assist our Board of Directors with a variety of matters described in its charter, which include monitoring (1) the integrity of our financial statements, (2) the effectiveness of our internal control over financial reporting, (3) the qualifications and independence of our independent registered public accounting firm, (4) the performance of our internal audit function and independent registered public accounting firm and (5) our compliance with legal and regulatory requirements.

 

Our Board has determined that each member of the Audit Committee is both independent (as defined under applicable Nasdaq listing standards and SEC rules related to audit committee members) and financially literate (as required by Nasdaq listing standards). The Board also has determined that each of Mr. Ozonian and Mr. Thompson qualifies as an “audit committee financial expert” as defined by SEC rules and has “financial sophistication” in accordance with Nasdaq listing standards.

 

The Audit Committee held closed sessions with our independent registered public accounting firm, PricewaterhouseCoopers LLP, during all of its regularly scheduled meetings in fiscal 2020.

 

 

Corporate Governance | LENDINGTREE 2021 Proxy Statement 16

 

 

Table of Contents

 

 

CURRENT MEMBERS

 

Steven Ozonian (Chair)
G. Kennedy Thompson
Jennifer Witz

 

NUMBER OF MEETINGS
HELD IN FISCAL 2020

 

7

 

 

Compensation Committee

 

The Compensation Committee functions pursuant to a written charter adopted by our Board of Directors, a copy of which may be found at our website at https://investors.lendingtree.com/governance-documents (not hereby incorporated by reference). The Compensation Committee is responsible for discharging the responsibilities of our Board of Directors relating to compensation of our Chief Executive Officer and our other executive officers and has overall responsibility for approving and evaluating all of our compensation plans, policies and programs as they affect our executive officers as well as complying with associated regulatory requirements.  All of the members of the Compensation Committee are independent directors within the meaning of the applicable Nasdaq listing standards. 

 

For more information on the responsibilities and activities of the Compensation Committee, including its processes for determining executive compensation, see the “Compensation Committee Report” and “Compensation Discussion and Analysis” below, particularly the discussion of the “Role of the Compensation Committee, Compensation Consultants and Executive Officers in Compensation Determinations.”

 

Each member of the Compensation Committee is independent under Nasdaq listing standards. Each member is also a “Non-Employee Director,” as defined in SEC Rule 16(b)-3. During fiscal 2020, the Compensation Committee held a portion of each regularly scheduled meeting in closed session with only the committee members present. 

 

 

CURRENT MEMBERS

 

Thomas M. Davidson, Jr. (Chair)
Robin Henderson
Saras Sarasvathy

 

 

Nominating and Corporate Governance Committee

 

The Nominating and Corporate Governance Committee functions pursuant to a written charter adopted by our Board of Directors, a copy of which may be found at our website at https://investors.lendingtree.com/governance-documents (not hereby incorporated by reference). The Nominating and Corporate Governance Committee is responsible for identifying, evaluating and recommending candidates for election to our Board of Directors. Additionally, the Nominating and Corporate Governance Committee is responsible for recommending compensation arrangements for non-employee directors. Our Board has determined that each member of the Nominating and Governance Committee is independent, as defined under applicable Nasdaq listing standards. 

 

NUMBER OF MEETINGS
HELD IN FISCAL 2020

 

5

 

 

 

 

CURRENT MEMBERS

 

Douglas Lebda (Chair)
Gabriel Dalporto
Thomas M. Davidson, Jr.
G. Kennedy Thompson

 

 

Transactions Committee

 

The Transactions Committee functions pursuant to a written charter adopted by our Board of Directors, a copy of which may be found at our website at https://investors.lendingtree.com/governance-documents (not hereby incorporated by reference). The Transactions Committee is responsible for reviewing and assessing, and assisting the Board in reviewing and assessing, potential strategic acquisitions, divestitures and investments, and related financing and strategies.

 

NUMBER OF MEETINGS
HELD IN FISCAL 2020

 

10

 

 

 

Compensation Committee Interlocks and Insider Participation 

 

With the exception of Mr. Ozonian who was an officer and employee of LendingTree from November 1, 2010 through March 31, 2011, no director who served on the Compensation Committee during fiscal 2020 has at any time been an executive officer or employee of LendingTree. In addition, no executive officer of LendingTree during fiscal 2020 served, or currently serves, on the board of directors or the compensation committee (or a functionally equivalent committee) of any entity that has one or more executive officers who serve on our Board or our Compensation Committee.

 

17 LENDINGTREE 2021 Proxy Statement | Corporate Governance

 

 

Table of Contents

  

Stockholder Engagement Process 

 

At LendingTree, we strive to engage with stockholders on a consistent basis so as to better understand their perspectives and concerns. We hold investor days, investor outreach programs and have direct communication channels between stockholders and the Board. Our Annual Meeting of Stockholders also provides an opportunity for further stockholder engagement. Stockholder feedback is shared with the Board and referenced during Board discussions. Where appropriate, we aim to incorporate feedback and information obtained through our stockholder engagement process into our decision-making.

 

INVESTOR OUTREACH

 

We engage with our stockholders and other prospective investors throughout the year to get their perspectives and feedback on various topics, which allows us to better understand their priorities and concerns. Among the topics which we engaged with our stockholders about are:

 

financial results;

 

financial outlook;

 

corporate strategy and priorities;

 

key initiatives across various lines of business; and

 

the health of the Company’s balance sheet and capital allocation philosophy.

 

We will continue to engage with our stockholders on a regular basis in order to understand their perspectives and incorporate their feedback, as appropriate, on our performance, business strategies, executive compensation programs and corporate governance practices.

 

STOCKHOLDER COMMUNICATIONS WITH THE BOARD

 

Stockholders may, at any time, communicate with any of our directors by emailing legal@lendingtree.com. The subject line should read “Stockholder-Board Communication” or “Stockholder-Director Communication.” All such emails must identify the sender as a stockholder, provide evidence of the sender’s stock ownership, and clearly state whether the intended recipients are all members of our Board of Directors or a particular director or directors.

 

All communications received in accordance with these procedures will be reviewed by the Corporate Secretary and forwarded to the appropriate director or directors unless such communications are considered, in the reasonable judgment of the Corporate Secretary, to be improper for submission to the intended recipient. Examples of stockholder communications that would be considered improper for submission include communications that:

 

do not relate to the business or affairs of our Company or the functioning or constitution of our Board of Directors or any of its committees;

 

relate to routine or insignificant matters that do not warrant the attention of our Board of Directors;

 

are advertisements or other commercial solicitations;

 

are frivolous or offensive; or

 

are otherwise not appropriate for delivery to directors.

 

The inclusion of any website address in this proxy statement does not incorporate by reference the information on or accessible through the website into this proxy statement.

 

Corporate Social Responsibility  and Environmental, Social and Governance Approach

 

Corporate Social Responsibility is very important to LendingTree. In conducting our business, we strive to give back to the communities in which we work. Our Corporate Responsibility initiatives are generally overseen by our philanthropy committee.

 

Corporate Governance | LENDINGTREE 2021 Proxy Statement 18

 

 

Table of Contents

 

  

Our Environmental Footprint. We consider our environmental footprint whenever appropriate. We are committed to reducing the impact of our operations, and to using resources and materials thoughtfully.

 

Resources and Partnerships. Our open-access LendingTree Academy provides education to consumers on important financial literacy topics, such as credit scoring models, budgeting tips and how to avoid common financial missteps through blog posts and educational videos.

 

The LendingTree Foundation. Established in August 2017, The LendingTree Foundation is a private foundation created by LendingTree and exempt from federal income tax under Internal Revenue Code Section 501(c)(3). The LendingTree Foundation’s philanthropic mission is to amplify economic opportunities for individuals, businesses and communities through our LendaHand initiative and strategic community alignment that focuses on promoting empowerment and helping overcome obstacles, financial and otherwise, in areas that align with LendingTree’s core principles and the Foundation’s philanthropic pillars: 

 

- Financial Wellness

 

- Entrepreneurship and Innovation

 

- Homeownership

 

- Upward Mobility

 

By leveraging our expertise and focusing on these areas, it is our belief that we can achieve the greatest impact to improve the lives of all, in these areas and beyond. 

 

 

-

Donations in support of the Black Lives Matter movement: The LendingTree Foundation provided special 1.5x company matching for employee donations made through the “Support the Movement: Black Lives Matter” campaign in Bright Funds;

 

19 LENDINGTREE 2021 Proxy Statement | Corporate Governance

 

 

Table of Contents

 

-

Contributions to the COVID-19 Response Fund: The Foundation for The Carolinas and United Way of Central Carolinas launched the COVID-19 Response Fund to assist those most affected by the crisis and the LendingTree Foundation’s contribution was one of the first to help launch this initiative;

  

-

Employee Relief Fund: The LendingTree Foundation partnered with E4E Relief to create a fund for employees facing unforeseen hardships. Not only can employees utilize the fund, but they can also support fellow employees by donating to it;

  

-

LISC Small Business Initiative: The Local Initiatives Support Corporation (“LISC”) was created to cultivate community development resources to advocate for issues such as affordable housing, violence prevention, and social justice and equality. LendingTree partnered with LISC to support these efforts, specifically in the areas of affordable housing, social injustice and equality, and small business assistance through LISC’s small business initiative that will benefit minority owned small businesses out of Charleston.

  

-

NOAH Housing Impact Fund: The Naturally Occurring Affordable Housing (“NOAH”) initiative in Charlotte will provide affordable housing for low-income residents, and the LendingTree Foundation pledged $2.5M for this project.

 

Community engagement. At LendingTree, we are passionate about getting involved in, and giving back to, the communities where we live and work. Our new corporate headquarters in Charlotte, NC, will employ approximately 475 employees, and we aim to create a positive community impact through initiatives such as providing financial education to students, entrepreneurial opportunities to aspiring business owners and hosting non-profit groups and meetups for tech talent across the region.  

 

“LendaHand” Campaign. Every year, LendingTree undertakes its “LendaHand” campaign, a philanthropic campaign to promote the act of giving back and lending a hand to others in need during the holiday season. As part of the campaign, each LendingTree employee who chooses to participate is allocated $200 to donate to help those in need or to support other philanthropic purposes. 

 

Human capital resources We are committed to investing in our employees and nurturing an entrepreneurial and dynamic work environment. We achieve this through dedication to our core principles which include:

 

- Building truly outstanding products;

 

- Being open and candid;

 

- Acting with urgency and creativity;

 

- Taking charge;

 

- Setting goals and being accountable; and

 

- Committing to excellence.

 

Employees are stockholders of the Company, allowing them to take charge and have a direct impact on company choices. We provide individual, career and leadership development opportunities to strengthen skills. We have implemented strong policies and practices to foster a safe and inclusive workplace allowing employees to develop and reach their full potential, and although our employees hold many values in common, our leadership team actively works to attract, develop, and retain talent from a range of backgrounds and experiences in order to benefit from diverse perspectives. The Company and our employees are committed to helping our communities thrive through a variety of Company-sponsored annual and ongoing community outreach efforts. 

 

Data Privacy We are committed to protecting client information, and our Board of Directors and Executive Leadership team devote a significant amount of time and attention to data privacy. We comply with applicable data privacy laws and regulations and have implemented procedures designed to comply with such laws and regulations.

 

Board Oversight of Material Environmental and Social Governance (“ESG”) Risk. LendingTree takes into account considerations that affect all of our key stakeholders, including our stockholders, customers, employees, communities and regulators. The Nominating and Corporate Governance Committee, in consultation with the full board, has oversight over environmental and social governance, or ESG matters.

 

Corporate Governance | LENDINGTREE 2021 Proxy Statement 20

 

 

Table of Contents

 

 

Our Board Nominees

 

At the upcoming Annual Meeting, a board of eight directors will be elected, each to hold office until the next succeeding annual meeting of stockholders or until such director’s successor shall have been duly elected and qualified (or, if earlier, such director’s removal or resignation from our Board of Directors). Information concerning all director nominees appears below. Although management does not anticipate that any of the persons named below will be unable or unwilling to stand for election, in the event of such an occurrence, proxies may be voted for a substitute designated by our Board of Directors.

 

21 LENDINGTREE 2021 Proxy Statement | Proposal No. 1 Election of Directors

 

 

Table of Contents

 

   

Gabriel Dalporto 

Chief Executive Officer of Udacity, Inc. 

Director since: 2017 

Age: 49 

         

Committees: 

  Transactions Committee

 

 

Biography 

Mr. Dalporto has served as the Chief Executive Officer of Udacity, Inc., a technology skills digital education platform, since August 2019. From August 2017 to February 2018, Mr. Dalporto also served as Executive Advisor to the Company. Prior to that, Mr. Dalporto held various positions within the Company, including serving as the Company’s Chief Financial Officer from June 2015 to August 2017, Chief Marketing Officer from April 2011 to June 2015, and President of Mortgage from March 2013 to June 2015. Before joining the Company, Mr. Dalporto served as Founder and Chief Executive Officer of Atomic Financial, Inc., a startup online investing platform, from January 2010 to April 2011. He served as Chief Marketing and Strategy Officer of Zecco Holdings, Inc., an online brokerage company, from January 2007 to December 2009. Mr. Dalporto served as Vice President at E*Trade Financial from August 2004 to November 2006 and as Vice President at JPMorgan Chase from September 2003 to July 2004. Additionally, Mr. Dalporto was elected as director of Guitar Center Holdings, Inc. in December 2018. 

 

Relevant Expertise 

Mr. Dalporto brings executive management, financial and capital markets experience, and in depth digital marketing experience to our Board of Directors.

 

Other Public Company Boards
None.

 

     
   

Thomas M. Davidson, Jr. 

Co-Founder and Chief Executive Officer of EverFi, Inc.
Director since: 2017
 

Age: 49 

         

Committees: 

  Nominating and Corporate Governance Committee (Chair)

 

   Transactions Committee

 

 

Biography 

Mr. Davidson is the co-founder and has served as Chief Executive Officer of EverFi, Inc., a software-as-a-service education technology company headquartered in Washington, D.C., since 2008. Prior to founding EverFi, Inc., Mr. Davidson was a venture capitalist at Village Ventures from 2007-2009 with a focus on early-stage technology companies in the education and social media spaces. From 1994 to 2000, Mr. Davidson served three terms in the Maine House of Representatives where he served as Chairman of the Utilities and Energy Committee and was a senior member of the Taxation Committee, the Banking and Insurance Committee and the Business and Economic Development Committee.

 

Mr. Davidson also serves on the boards of DC Public Education Fund and Five Holdings. 

 

Relevant Expertise 

Mr. Davidson brings technology expertise, executive management and government affairs experience to our Board of Directors. 

 

Other Public Company Boards
None.

 

 

Proposal No. 1 Election of Directors | LENDINGTREE 2021 Proxy Statement 22

 

 

Table of Contents

  

   

Robin Henderson 

Senior Director, Private Capital Group, of RXR Realty
Director since: 2014 

Age: 51 

   
         

Committees: 

  Nominating and Corporate Governance Committee

 

  Audit Committee

 

 

Biography 

Ms. Henderson is Senior Director, Private Capital Group, of RXR Realty, which manages 75 commercial real estate properties and investments with an aggregate gross asset value of approximately $20.2 billion, comprising approximately 24.6 million square feet of commercial properties, inclusive of a multi-family residential portfolio of approximately 2,600 units under operation or development, and control of development rights for an additional approximately 3,600 multi-family and for sale units in the New York Metropolitan area. Ms. Henderson joined RXR in February 2010. She is responsible for sourcing institutional capital for both the company’s asset level joint ventures and discretionary funds. Since joining RXR, Ms. Henderson has led the effort in raising approximately $8.5 billion of equity. From May 1998 to December 2009, Ms. Henderson was with Wachovia Securities, ultimately serving as Vice President within Real Estate Corporate Finance with a focus in Real Estate Private Equity. 

 

Relevant Expertise 

Ms. Henderson brings to our Board of Directors extensive real estate industry, finance and capital markets experience. Ms. Henderson also provides our Board of Directors with extensive executive and management experience. 

 

Other Public Company Boards
None.

 

         
   

Douglas Lebda 

Chairman and Chief Executive Officer of LendingTree, Inc.
Director since: 2008
 

Age: 51 

     

Committees: 

 Transactions Committee (Chair)

 

 

 

 

Biography 

Mr. Lebda is our Chairman, Chief Executive Officer and a member of our Board of Directors and has served in such capacities since January 2008, when the Company was spun-off from IAC/InterActiveCorp. Previously, Mr. Lebda served as President and Chief Operating Officer of IAC/InterActiveCorp from January 2006 to August 2008. Prior to that, Mr. Lebda served as Chief Executive Officer, President and Chairman of the Board of Directors of LendingTree, LLC, which he founded in June 1996. Before founding LendingTree, Mr. Lebda worked as an auditor and consultant for PricewaterhouseCoopers.

 

 

Relevant Expertise 

Mr. Lebda, as the founder of LendingTree, LLC, provides our Board of Directors with a vital understanding and appreciation of the Company’s business and history. His experience as Chief Operating Officer of IAC/InterActiveCorp, a large conglomerate of Internet companies, as well as his financial and accounting expertise, also qualify him to serve on our Board of Directors. Mr. Lebda also brings to our Board of Directors a valuable understanding of the role played by directors of publicly-held companies due to his prior service on the board of Eastman Kodak Company. 

 

Other Public Company Boards
None. 

 

23 LENDINGTREE 2021 Proxy Statement | Proposal No. 1 Election of Directors

 

 

Table of Contents

 

   

Steve Ozonian 

Chief Executive Officer of the Williston Financial Group
Director since: 2011
 

Age: 65 

     

Committees: 

   Audit Committee (Chair)

 

   Compensation Committee (Chair)

 

 

Biography 

Mr. Ozonian currently serves as CEO of the Williston Financial Group and serves on its Board of Directors. He previously served as a member of our Board of Directors from August 2008 to November 2010. He resigned from the Board of Directors effective November 1, 2010 to join our company as Chief Executive Officer of its proprietary full service real estate brokerage business known as RealEstate.com, REALTORS®. In March 2011, we announced that we had finalized a plan to close all of the field offices of RealEstate.com and Mr. Ozonian resigned from his position as Chief Executive Officer of the division. Prior to his employment at our company, Mr. Ozonian served as the Chairman of the Board of Directors of Global Mobility Solutions, a global provider of human resources and real estate services. Mr. Ozonian has held other high-level positions in the homeownership industry including Chairman and CEO of Prudential’s real estate and related businesses, CEO of Realtor.com and National Homeownership Executive for Bank of America. 

 

Mr. Ozonian is a member of the Board of Directors of Attom Data, a real estate data services company. Mr. Ozonian is also a member of the Board of Directors of Inside Real Estate, a real estate software services provider to the residential real estate industry. 

 

Relevant Expertise 

Mr. Ozonian provides our Board of Directors with valuable large public company leadership experience and mergers and acquisitions expertise. He has significant executive experience and a deep understanding of the functions of a board of directors acquired through service as chairman of other corporate boards.  

 

Other Public Company Boards 

None.

 

         
   

Saras Sarasvathy 

Paul Hammaker Professor of Business Administration at University of Virginia’s Darden Graduate School of Business
Director since: 2015
 

Age: 62

     

Committees: 

  Nominating and Corporate Governance Committee

 

 

Biography 

Ms. Sarasvathy is the Paul Hammaker Professor of Business Administration at University of Virginia’s Darden Graduate School of Business. Her research focuses on high performance entrepreneurship ranging from starting and growing new ventures to creating and fostering high value partnerships that result in enduring and innovative businesses. Ms. Sarasvathy has also worked with thousands of entrepreneurs around the world and has helped train hundreds of entrepreneurship educators and growth-oriented service providers. 

 

Relevant Expertise 

Through her research and practical experience co-founding five ventures of her own, Ms. Sarasvathy brings to our company valuable insights and best practices for the development of new products and a global understanding of innovative funding mechanisms. 

 

Other Public Company Boards 

None. 

 

Proposal No. 1 Election of Directors | LENDINGTREE 2021 Proxy Statement 24

 

 

Table of Contents

 

   

G. Kennedy Thompson 

Former Partner of Aquiline Capital Partners
Director since: 2017
Age: 70
 

         

Committees: 

  Audit Committee 

  Compensation Committee 

  Transactions Committee

 

 

Biography 

Mr. Thompson was a partner of Aquiline Capital Partners, a New York based private equity firm, from 2009 until his retirement in April 2018. From 1999 to 2008, Mr. Thompson was President and Chief Executive Officer of Wachovia Corporation. Mr. Thompson served in numerous industry leadership positions including Chairman of the Clearing House, Chairman of the Financial Services Roundtable, Chairman of the Financial Services Forum and President of the Federal Advisory Council of the Federal Reserve Board. In the past five years, he has served as a member of the board of directors of HP Inc. (NYSE: HPQ), Pinnacle Financial Partners, Inc. (Nasdaq: PNFP), and Insteel Industries, Inc. (Nasdaq: IIIN), and is currently a trustee of the Morehead-Cain Foundation. 

 

Relevant Expertise 

Mr. Thompson brings extensive financial services expertise, public company leadership experience and executive management experience to our Board of Directors. 

 

Other Public Company Boards 

Pinnacle Financial Partners, Inc. (Nasdaq: PNFP), and Insteel Industries, Inc. (Nasdaq: IIIN).

 

         
   

Jennifer Witz 

Chief Executive Officer of Sirius XM Holdings, Inc. 

Director since: 2020
Age: 52
 

     

Committees: 

  Compensation Committee

 

 

Biography 

Ms. Witz has served as the Chief Executive Officer and member of the Board of Sirius XM Holdings, Inc. since January 2021. She was previously the President of Sales, Marketing and Operations of Sirius XM Holdings, Inc. where she led subscriber acquisition and retention, consumer marketing and automotive sales, distribution, product, and engineering for both Sirius XM and Pandora. Ms. Witz joined Sirius XM in 2002 and has served in a variety of senior financial and operating roles during her tenure. Ms. Witz served as Executive Vice President and Chief Marketing Officer beginning in 2017. From 2005 to 2017, she was Sirius XM’s Senior Vice President, Finance, and from 2002 to 2005, she held other positions in the finance department of Sirius XM. 

 

Relevant Expertise 

Ms. Witz brings executive management experience, public company leadership experience and in-depth digital marketing and financial experience to our Board of Directors. 

 

Other Public Company Boards 

Sirius XM Holdings, Inc. (Nasdaq: SIRI) 

 

25 LENDINGTREE 2021 Proxy Statement | Proposal No. 1 Election of Directors

 

 

Table of Contents

 

ELECTION MECHANICS

 

Majority Voting Standard.  Beginning with our 2018 Annual Meeting, we implemented majority voting in uncontested elections of directors. Accordingly, our bylaws provide that a nominee for director in an uncontested election will be elected to the Board if the votes cast for such nominee’s election exceed the votes cast against such nominee’s election. However, if the number of nominees exceeds the number of directors to be elected at such meeting as of the date that is five business days in advance of the date that we first file our definitive proxy statement with the Securities and Exchange Commission, then directors will be elected by a plurality of the votes cast. Prior to the 2018 Annual Meeting, directors were elected by a plurality of the votes cast in all circumstances.

 

In connection with the implementation of a majority voting standard in our bylaws, the Board approved and adopted a Director Resignation Policy on November 8, 2017 for directors who fail to receive the required number of votes in an uncontested election in accordance with our bylaws. The policy requires that the Board will nominate for election or re-election only a candidate who agrees to tender an irrevocable resignation that will be effective upon (i) the failure to receive the required vote at any future annual meeting at which he or she faces re-election; and (ii) Board acceptance of such resignation. The policy further states that upon any candidate failing to be elected in an election at which majority voting applies, the Nominating and Corporate Governance Committee will meet to consider the tendered resignation and make a recommendation to the Board concerning the action, if any, to be taken with respect to the resignation. The policy provides that the Board will then consider and act upon the Nominating and Corporate Governance Committee’s recommendation within 90 days of certification of the vote at the annual meeting. The Board may accept the resignation, refuse the resignation, or refuse the resignation subject to such conditions designed to cure the underlying cause as the Board may impose. Promptly following the decision regarding the tendered resignation, the policy states that we will file with the SEC a current report on Form 8-K disclosing the decision with respect to the resignation, describing the deliberative process and, if applicable, the specific reasons for rejecting the tendered resignation.

 

ü The Board recommends that you vote FOR the election of each of the nominated directors.

 

Proposal No. 1 Election of Directors | LENDINGTREE 2021 Proxy Statement 26

 

 

Table of Contents

 

 

Overview of Our Compensation Program for Non-Employee Directors 

 

Our director compensation program is designed to attract and retain top director talent and align the interests of our directors with the interests of our stockholders. Our Nominating and Corporate Governance Committee is responsible for reviewing and making recommendations to the Board with respect to the compensation of our directors, including any equity-based compensation. Directors who are our employees do not receive compensation for their services on the Board.

 

Our Nominating and Corporate Governance Committee’s review of our director compensation programs is supported by information provided by the independent compensation consultant to the Compensation Committee, Frederic W. Cook & Co., Inc. (“FW Cook”).

 

2020 Non-Employee Director Compensation

 

The following table describes the components of our fiscal 2020 director compensation program. Each element of the compensation is pro-rated for the director’s period of service during the year.

 

Compensation Element   Amount ($)
Annual Cash Retainer   50,000
Annual Equity Retainer(1)   170,000
Additional Fee for Lead Independent Director   35,000
Additional Fee for Committee Chairs  

25,000 – Audit Committee 

20,000 – Compensation Committee 

13,000 – Nominating and Corporate Governance Committee 

Additional Fee for Committee Members (Excluding the Committee Chairs)  

10,000 – Audit Committee 

10,000 – Compensation Committee 

10,000 – Nominating and Corporate Governance Committee 

 2,500 – Transactions Committee(2) 

(1)

Subject to the elections that the non-employee director can make, as described below, $115,000 of the total grant value of the annual equity retainer is in the form of restricted stock units (“RSUs”) and $55,000 is in the form of nonqualified stock options. 

 

(2) All members of the Transactions Committee receive the same amount of additional fee.

 

Our non-employee directors may elect to receive any cash fees that they would otherwise be entitled to receive in the form of vested RSUs or stock options with an equivalent value to the cash fees. For newly elected or appointed directors, the election must be made within 30 days after he or she joins the Board, and the election will be elective for the remainder of the year in which the director is elected or appointed. The election must be made on or before the last business day of the year preceding the year in which the cash fees are payable. Elections are irrevocable for the year for which they are made, and a new election is required for each year.

 

Each annual equity retainer provided to our non-employee directors has a total grant value of $170,000, with $115,000 of the retainer in the form of RSUs and $55,000 of the retainer in the form of nonqualified stock options, subject to our directors’ right to elect to receive only stock options. All awards representing our non-employee director’s equity retainer for fiscal 2020 vest on the earliest of the date of our 2021 annual meeting of stockholders, the first anniversary of the grant date, a change in control of LendingTree and the director’s death or disability.

 

Our non-employee directors can elect to defer portions of their compensation from Board services pursuant to our nonqualified deferred compensation plan, which permits payment of portions of the directors’ cash or equity compensation until a specified time in the future. 

 

Each of our non-employee director’s total compensation in any calendar year is subject to a limit of $640,000, with the value of any equity-based compensation based on the aggregate grant date fair market value of the underlying awards. Any compensation that is deferred will be

 

27 LENDINGTREE 2021 Proxy Statement | Director Compensation

 

 

Table of Contents

 

counted toward this total compensation limit in the calendar year in which the compensation is vested, and not in any later calendar year when it is paid to the non-employee director.

 

In addition to the compensation elements described above, our non-employee directors are entitled to reimbursement of reasonable expenses incurred in connection with their attendance of Board or committee meetings.

 

Director Stock Ownership Requirement 

 

In order to align the financial interests of our non-employee directors with those of our stockholders, our Board adopted a stock ownership guideline for non-employee directors in April 2018. The guideline is minimum ownership of five times the annual cash retainer.

 

Non-employee directors are expected to accumulate the required ownership within five years of the later of the adoption of the policy or joining the Board. If a non-employee director becomes subject to a greater minimum ownership amount due to an increase in annual retainer, the director is expected to meet the higher minimum ownership amount within three years after such increase. With the exception of Ms. Witz, who joined our Board on April 16, 2020, all of our non-employees were in compliance with our non-employee director stock ownership guidelines during fiscal 2020.

 

Director Compensation Table 

 

The following table summarizes the fiscal 2020 compensation earned by each Board member, other than Mr. Lebda, whose compensation is described under “Executive Compensation Tables” on page 50 of this proxy statement. Mr. Lebda did not receive additional compensation for his services on the Board in fiscal 2020.

 

Director Name   Fees Earned or Paid
in Cash
($)
  Stock Awards
($)
(1)
  Option Awards
($)
(1)
  Total
($)
Courtnee Chun(2)   36,979   129,420   63,203   229,602
Steven Ozonian   130,000   115,008   56,189   301,197
Robin Henderson   70,000   115,008   56,189   241,197
Saras Sarasvathy   60,000   115,008   56,189   231,197
Thomas M. Davidson, Jr.   64,625   115,008   56,189   235,822
G. Kennedy Thompson(3)   1,250   -   237,547   238,797
Gabe Dalporto   52,500   115,008   56,189   223,697
Jennifer Witz   42,500   129,420   63,203   235,123
(1) These amounts represent the dollar amounts of the aggregate grant date value, computed in accordance with FASB ASC Topic 718, Stock Compensation, of the RSUs and stock options granted to the directors during fiscal 2020. Generally, the grant date fair value is the amount that we would expense in our financial statements over the award’s vesting schedule. For additional information regarding the assumptions made in calculating these amounts, see Note 13 “Stock-Based Compensation” to our audited, consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020 as filed with the SEC on March 1, 2021.  On April 16, 2020, each of Mses. Chun and Witz received a grant of 75 restricted stock units and a grant of stock options to purchase 71 shares of our common stock. On April 16, 2020, the closing price of a share of our common stock on the Nasdaq Stock Market was $192.16. The per share exercise price for the stock options is $192.16. Ms. Witz's restricted stock units and stock options vested on the first anniversary of the grant date and Ms. Chun's restricted stock units and stock options were forfeited on November 16, 2020 upon her resignation from the Board, each in accordance with the terms of the applicable award agreement. The stock options’ maximum term is ten years after the date of grant. On June 10, 2020, (i) each of Messrs. Davidson, Ozonian and Dalporto and Mses. Chun, Henderson, Sarasvathy and Witz received a grant of 399 restricted stock units and a grant of stock options to purchase 380 shares of our common stock, and (ii) Mr. Thompson received grants of stock options to purchase an aggregate of 1,616 shares of our common stock. On June 10, 2020, the closing price of a share of our common stock on the Nasdaq Stock Market was $288.24. The per share exercise price for the stock options is $288.24. Except for stock options to purchase 444 shares of our common stock granted to Mr. Thompson pursuant to his election to receive such award in lieu of his annual cash fees, which were fully-vested upon the grant date, the restricted stock units and the stock options granted to our non-employee directors on June 10, 2020 will vest on the earliest of the date of our 2021 annual meeting of stockholders, June 10, 2021, a change in control of the Company and the applicable director’s death or disability. The stock options’ maximum term is ten years after the date of grant.

 

(2)

Ms. Chun resigned from the Board on November 16, 2020 and all of her unvested restricted stock units and stock options were forfeited upon the termination of her service.

 

(3)

Mr. Thompson joined our Audit Committee upon Ms. Chun's resignation from the Board on November 16, 2020 and received $1,250 of cash fees for his service on the Audit Committee for the balance of fiscal 2020.

 

Director Compensation | LENDINGTREE 2021 Proxy Statement 28

 

 

Table of Contents

 

Outstanding Equity Awards for Directors at Fiscal Year-End 2020 

 

The following table provides information on the outstanding equity awards held by our directors, other than Mr. Lebda, as of December 31, 2020.

 

Director Name   Aggregate Number of Options
Outstanding at Fiscal Year End
(#)
  Aggregate Number of RSUs Outstanding
at Fiscal Year End
(#)
Steven Ozonian   4,177   399
Robin Henderson   2,297   399
Saras Sarasvathy   2,315   399
Thomas M. Davidson, Jr.   1,330   399
G. Kennedy Thompson   4,661   -
Gabe Dalporto   4,374   399
Jennifer Witz   451   474

 

29 LENDINGTREE 2021 Proxy Statement | Director Compensation

 

 

Table of Contents

 

 

We are asking our stockholders to approve the LendingTree, Inc. Employee Stock Purchase Plan (the “ESPP”). On February 22, 2021, the Compensation Committee recommended that the Board adopt, and on February 24, 2021, the Board unanimously adopted, the ESPP, subject to the approval of our stockholders. The purpose of the ESPP is to assist LendingTree and its subsidiaries to recruit and retain employees by providing our employees with an opportunity to acquire a proprietary interest in our company through the purchase of our common stock. The ESPP is also intended to encourage employees to align their interests with the interests of LendingTree and our stockholders. The ESPP is intended to qualify as an employee stock purchase plan under Section 423 of the Internal Revenue Code.

 

Below is a summary of the principal provisions of the ESPP. The summary is qualified by reference to the ESPP as set forth in Appendix B to this proxy statement.

 

Stock Subject to the ESPP

 

A total of 262,731 shares of our common stock have been authorized for issuance under the ESPP, subject to adjustment in the event of a dividend or other distribution (whether in the form of cash, common stock, or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, amalgamation, split-up, spin-off, combination, repurchase or exchange of common stock or other securities of us, or other similar event.

 

Administration

 

The ESPP will be administered by the Compensation Committee or such other committee designated by the Board from time to time (the “Committee”). The Committee has the authority to construe and interpret the ESPP and may prescribe, amend and rescind such rules relating to the administration of the ESPP as the Committee deems appropriate.

 

Eligibility

 

All employees (i) located in the United States, (ii) employed by LendingTree (or a subsidiary of LendingTree designated by the Committee as eligible to participate in the ESPP (a “Participating Subsidiary)) for at least six months and (iii) are customarily employed for at least 20 hours per week and more than five months in any calendar year are eligible to participate in the ESPP, and this is their basis for participation in the ESPP. 

 

However, an employee may not be granted purchase rights under the ESPP to purchase our common stock if the employee (i) immediately after the grant would own stock possessing 5% or more of the total combined voting power or value of our common stock, or (ii) holds rights to purchase shares of our common stock under the ESPP that would accrue at a rate that exceeds $25,000 of the fair market value of our common stock for each calendar year that the purchase rights remain outstanding. 

 

As of February 24, 2021, 1,251 employees of LendingTree and its Participating Subsidiaries were eligible to participate in the ESPP. 

 

Enrollment and Purchase of Stock under the ESPP 

 

An eligible employee may elect to participate or enroll in the ESPP with respect to an offering in accordance with the procedures prescribed by the Committee. The enrollment form will include instruction from the employee as to the amounts to be deducted from the employee’s qualifying compensation and accumulated for the purchase of shares of our common stock under that offering. Specifically, the employee may authorize payroll deductions from his or her paycheck prior to any tax withholdings in an amount equal to at least 2%, but not more than 15%, of the employee’s qualifying compensation to purchase shares of our common stock under the offering. The purchase price will be equal to 85% of the lesser of (i) the fair market value of a share of our common stock on the first trading date of the offering period and (ii) the fair market value of a share of our common stock on the last trading date of the offering period (the “Purchase Date”). Offering periods under the ESPP have a maximum term of up to 27 months. 

 

The employee’s right to purchase shares of our common stock under the ESPP will be exercised automatically on the Purchase Date to purchase the maximum number of whole shares of our common stock that can be purchased with the employee’s accumulated payroll deductions; provided that, subject to the share reserve under the ESPP and the potential adjustments described above, the employee cannot purchase more than 125 shares of our common stock in each offering. The Committee may permit or require that the shares of our common

 

Proposal No. 2 Approval of Employee Stock Purchase Plan | LENDINGTREE 2021 Proxy Statement 30

 

 

Table of Contents

 

stock acquired from the exercise of a purchase right under the ESPP be deposited directly into an account established in the name of the exercising employee with a designated broker, require that such shares be retained with such designated broker for a specified period of time and establish any procedure the Committee deems appropriate to track the disqualifying disposition of such shares. The employee may withdraw from the offering by submitting a revised enrollment form indicating his or her election to withdraw at least 15 business days before the Purchase Date, and the employee’s accumulated contributions for that offering will be distributed to the employee on the next payroll date.

 

Corporate Transaction 

 

In the event of a specified corporate transaction, such as a merger or acquisition of stock or property, a successor corporation may assume or substitute each outstanding purchase right under the ESPP. If the successor corporation does not assume or substitute the outstanding purchase rights, the offering in progress will be shortened and a new exercise date will be set. Participating employees’ purchase rights will be exercised on the new exercise date and such purchase rights will terminate immediately thereafter. Notwithstanding the foregoing, in the event of a specified corporate transaction, the Committee may elect to terminate all outstanding offerings.

 

Duration, Amendment and Termination 

 

The ESPP will remain in effect for ten years following the effective date of the ESPP unless terminated earlier by the Committee in accordance with the terms of the ESPP. The Committee has the authority to amend, suspend or terminate the ESPP at any time and for any reason.

 

Governing Law 

 

The ESPP is governed by the laws of the State of Delaware, without reference to such state’s conflict of law rules.

 

New Plan Benefits

 

Benefits under the ESPP depend on employees’ elections to participate, the contributions that they elect to make under the ESPP and the fair market value of our common stock on various future dates. Therefore, it is not possible to determine future benefits that will be received under the ESPP, nor is it possible to determine the benefits that would have been received if the ESPP had been in effect in 2020.

 

Certain Federal Income Tax Information 

 

The following is a general summary under current law of certain United States federal income tax consequences to LendingTree and participants who are citizens or individual residents of the United States relating to their participation under the ESPP. This summary deals with the general tax principles that apply to such awards and is provided only for general information. Certain kinds of taxes, such as foreign taxes, state and local income taxes and payroll taxes, are not discussed. This summary is not tax advice and it does not discuss all aspects of federal taxation that may be relevant to LendingTree and participants. Accordingly, we advise participants to consult with a tax advisor regarding the tax implications of their participation under the ESPP. 

 

Under Section 423 of the Internal Revenue Code, employees will not realize taxable income upon either the grant of a purchase right or the purchase of shares of our common stock on the Purchase Date. Income will be recognized upon the employee’s disposition of the shares of our common stock acquired under the ESPP. The federal income tax consequences depend on whether the disposition occurs after the applicable holding period. 

 

The holding period is satisfied if there is no disposition of the shares (i) before the second anniversary of the grant date of the purchase right, which is the first trading date of the offering period for the purchase right, or (ii)within one year after the expiration date of the offering period. In that event, the employee will recognize compensation taxable as ordinary income in an amount equal to the lesser of: (i) the excess of the fair market value of the shares on the grant date over the purchase price for the shares under the ESPP; and (ii) the excess of the fair market value of the shares on the date of disposition over the purchase price for the shares under the ESPP. The employee’s basis in the shares is equal to the sum of the purchase price paid for the shares and any ordinary income recognized by the employee upon the disposition. Any additional gain or loss recognized by the employee upon the disposition of the shares will be taxable as long-term capital gain or loss. The employer (the Company or a Participating Subsidiary) is not allowed a deduction for the compensation recognized by the employee. 

 

If the holding period is not satisfied, the excess of the fair market value of the shares on the disposition date over the purchase price for the shares under the ESPP will be recognized as compensation taxable as ordinary income at the time of disposition and that amount generally is deductible by the employer (the Company or a Participating Subsidiary). The employee’s basis in the shares is equal to the sum of the purchase price paid for the shares and any ordinary income recognized by the employee upon the disposition. Any other gain or loss recognized by the employee will be taxed as short- or long-term capital gain or loss, depending on whether the employee has held the shares for more than one year. 

 

The ESPP is not qualified under Section 401(a) of the Internal Revenue Code and is not subject to any of the provisions of the Employee Retirement Income Security Act of 1974.

 

Registration 

 

If our stockholders approve the ESPP, we plan to file a registration statement on a Form S-8 with the SEC, as soon as reasonably practicable after such approval, to register the shares available for issuance under the ESPP. 

 

ü The Board recommends that you vote FOR the approval of the LendingTree, Inc. Employee Stock Purchase Plan.

 

31 LENDINGTREE 2021 Proxy Statement | Proposal No. 2 Approval of Employee Stock Purchase Plan

 

 

Table of Contents

 

 

 

Set forth below is the “Compensation Discussion and Analysis,” which is a discussion of our executive compensation program written from the perspective of how we view and administer such program. The guiding philosophy of our compensation program is pay-for-performance. As a result, the majority of the compensation of our NEOs is variable, at risk and tied to creation of long-term stockholder value in the form of equity awards.

 

Given our role in providing guidance on executive compensation program design, administering the program and making specific compensation decisions for our executive officers, we participated in the preparation of the “Compensation Discussion and Analysis” and reviewed and discussed its contents with management. Based on the review and discussions, we unanimously recommended to the Board that the “Compensation Discussion and Analysis” be included in this proxy statement, which is incorporated by reference in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020, each as filed with the SEC.

 

The foregoing report was submitted by the Compensation Committee of the Board and shall not be deemed to be “soliciting material” or to be “filed” with the SEC or subject to Regulation 14A promulgated by the SEC or Section 18 of the Securities Exchange Act of 1934 and shall not be deemed incorporated by reference into any prior or subsequent filing by us under the Securities Act of 1933 or the Securities Exchange Act of 1934.

 

COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
Steven Ozonian (Chair)
G. Kennedy Thompson
Jennifer Witz

 

Compensation Committee Report | LENDINGTREE 2021 Proxy Statement 32

 

 

Table of Contents

 

Compensation Discussion and Analysis

Table of Contents

Executive Summary 34
Compensation Philosophy and Objectives 37
Role of the Compensation Committee, Compensation Consultants and Executive Officers in Compensation Determinations 37
Peer Group 38
Compensation Governance 40
Components of Compensation 41
Our Compensation Policies and Practices 48
Risk Assessment of Compensation Programs 49
Tax and Accounting Implications of Our Compensation Policies 49

 

33 LENDINGTREE 2021 Proxy Statement | Compensation Committee Report

 

 

Table of Contents

 

Executive Summary

 

INTRODUCTION

This compensation discussion and analysis (“CD&A”) section discusses the compensation policies and programs for our named executive officers (“NEOs”). Our NEOs for fiscal 2020 were:

 

   

Douglas Lebda

Chairman & Chief Executive Officer

     

Neil Salvage

President

                 
   

J.D. Moriarty

Chief Financial Officer

     

Jill Olmstead

Chief Human Resources Officer

                 
   

Sushil Sharma

Chief Product Officer

         

 

This section also discusses the role of the Compensation Committee of our Board (the “Committee”) in designing and administering our compensation programs and policies and in making compensation decisions for our executive officers.

 

The goal of our compensation programs and policies is to align compensation delivery with performance for stockholders, measured both internally against budgets and externally through stock price. We believe this alignment was achieved in fiscal 2020. 

INFORMATION CONCERNING EXECUTIVE OFFICERS

Neil Salvage, age 48, has served as the Company's President since November 2016. Prior to that, Mr. Salvage served as the Company's Chief Revenue Officer from June 2015 to November 2016 and General Manager of the LendingTree Home Pros business from July 2013 to June 2015. Prior to joining the Company, Mr. Salvage served as Head of Digital Sales for CBS Television and Radio, Executive Vice President of CityGrid Media and Vice President of Yellowpages.com. Mr. Salvage holds two Bachelor of Science degrees from the University of South Carolina in each of Business Administration and Management. Mr. Salvage also holds an M.S. degree in Computer Resources and Information Management from Webster University. In connection with the reorganization of the Company's leadership and management team, as described in our current report on Form 8-K filed with the Securities Exchange Commission on April 29, 2021, effective as of May 17, 2021, Mr. Salvage will transition from his current role into the role of President, LendingTree Marketplace.

J.D. Moriarty, age 48, has served as the Company’s Chief Financial Officer since August 2017. Mr. Moriarty joined the Company in June 2017 as Senior Vice President for Corporate Development, responsible for strategic acquisitions. Prior to that, Mr. Moriarty was Head of Americas Equity Capital Markets at Bank of America Merrill Lynch. Mr. Moriarty spent over 22 years at Merrill Lynch and Bank of America in various roles in both equity markets and investment banking. Mr. Moriarty holds an M.B.A. from the Stanford University Graduate School of Business and a B.A. in Economics & Finance from Bucknell University. In connection with the reorganization of the Company’s leadership and management team as described above, effective as of May 17, 2021, Mr. Moriarty will transition from his current role into the role of President, LendingTree Next.

Jill Olmstead, age 57, has served as the Company’s Chief Human Resources Officer since October 2018. From June 2010 until joining the Company, Ms. Olmstead served as the founding partner and owner of Charlotte-based Spivey & Olmstead, a human resources consulting firm. Prior to that, Ms. Olmstead served almost 25 years at Wells Fargo (formerly Wachovia) in various human resources roles, most recently as Executive Vice President, Managing Director and Head of Human Resources for Corporate and Investment Banking. Ms. Olmstead holds an M.A.in Human and Organizational Behavior from the Fielding Graduate University and a B.S. in Business from Clemson University.

Sushil Sharma, age 44, has served as the Company’s Chief Product Officer since August 2018. Mr. Sharma has over 18 years of product management and technology experience in the travel, e-commerce and social network industries. From January 2012 to August 2018, Mr. Sharma held various roles at Match.com, ending with Chief Product Officer. In his most recent role at Match, Mr. Sharma led product, analytics, monetization and design teams, helping to drive subscriber conversion growth and utilizing algorithms

Compensation Committee Report | LENDINGTREE 2021 Proxy Statement 34

 

Table of Contents

 

and product innovation to connect more users with potential matches. Prior to Match.com, Mr. Sharma held various management roles at Zynga, Sears, and Travelocity. Mr. Sharma holds an M.B.A. from the University of Chicago Booth School of Business and an M.S. in Computer Science and Engineering from The University of Texas at Arlington.

FISCAL 2020 BUSINESS HIGHLIGHTS

While the past year has presented many challenges, it has also created great opportunity. Despite headwinds to certain of our businesses in 2020, we were able to maintain a strong balance sheet and sustained positive cash flows. This enabled us to remain focused on execution without losing sight of our broader strategic objectives around innovation and scale.

In particular, our Home segment continued its strong performance in fiscal 2020, with segment revenue growth of 15% and segment profit growth of 28% year-over-year. Our Insurance segment had another solid year, with revenue growth of 17% and segment profit growth of 14% year-over-year. Our three most prominent businesses within the Consumer segment, and those that have been most impacted by the events of 2020, are credit cards, personal loans, and small business loans. Credit card is recovering remarkably well, and in Q4 of fiscal 2020, revenue was up 78% sequentially over Q3 of fiscal 2020, as issuers began to re-open budgets and increase payouts overall. Personal loans revenue also grew sequentially in Q4 of fiscal 2020, where we typically see seasonal declines. While the lender appetite in this category continues to recover, consumer behavior remains a challenge. We continue to view this market with optimism over the medium to long-term and see a large runway for growth, but the near-term dynamics remain a bit uncertain. Small business loans also showed robust recovery trends in Q4 of fiscal 2020, growing 129% over Q3 of fiscal 2020 as more businesses open back up and lenders move off the sidelines.

See Appendix A included in this proxy statement for information regarding non-GAAP financial measures, including a reconciliation of non-GAAP financial measures to GAAP financial measures.

 

35 LENDINGTREE 2021 Proxy Statement | Compensation Committee Report

 

 

Table of Contents

EXECUTIVE COMPENSATION ALIGNS OFFICER PAY WITH PERFORMANCE

LendingTree achieved stellar five-year TSR that exceeded that of the broad market. Our annualized TSR from the beginning of fiscal 2016 through the end of fiscal 2020 was 25.1%, which is above the median of LendingTree’s current peer group. For reference, the Russell 1000 index had annualized returns of 11.3% over the same period.

 

Excluding the performance options granted to our CEO in December 2020 pursuant to our CEO’s new employment agreement, which are viewed by the Company as compensation for fiscal 2021 – 2023, 92% of our CEO’s fiscal 2020 total direct compensation was performance-based, with actual realized value based on achievement of OKRs or our stock price performance. 50% of the CEO’s fiscal 2020 annual long-term incentive awards were performance options that require stock price appreciation of 41% before threshold-level awards are earned (33% of target), 81% before target-level awards are earned, and 121% before maximum-level awards are earned (167% of target). None of these performance options have been earned to date.

 

CEO Fiscal 2020

 

 

100% of the long-term incentives granted in December 2020 pursuant to our CEO’s new employment agreement are highly performance-based:

 

30% are stock options that have a 25% premium exercise price.

 

70% are stock options that (a) have a 25% premium exercise price and (b) are only earned if there is future achievement of stock price increases between 81% and 191% above the share price on the date of grant.

 

These awards reflect the entirety of our CEO’s long-term incentive compensation through the end of fiscal 2023, meaning that our CEO will not receive any additional long-term incentive awards in 2021, 2022 or 2023, and are viewed by the Company as compensation for fiscal 2021 – 2023, rather than as part of the 2020 CEO compensation program. They are reported as our CEO’s compensation for fiscal 2020 in the Summary Compensation Table, because the awards were granted in the final month of fiscal 2020.

 

Options granted to our CEO in connection with his new employment agreement have a truly long-term orientation, as these awards do not fully vest for six years and have a two-year holding requirement on the net after-tax shares retained by our CEO following his exercise. 70% of the options have performance price hurdles that require a minimum stock price growth of 135% over 4.25 years in order to be earned at target, and all of the options have a 25% premium exercise price. As a result, the option design ensures that our stockholders earned a substantial return before the CEO could realize value from the exercise of the options.

 

Our CEO’s salary and bonus target have not increased since fiscal 2017, and our CEO’s salary will not increase in fiscal 2021, 2022, or 2023 based on the terms of his new employment agreement.

 

Compensation Committee Report | LENDINGTREE 2021 Proxy Statement 36

 

 

Table of Contents

 

All of our NEOs’ ordinary course equity awards are subject to vesting over a three to five-year period, which focuses our NEOs’ attention on delivering sustained long-term growth and profitability for LendingTree and therefore both retains their services and aligns their interests with our stockholders.

 

During fiscal 2021, we implemented rigorous stock ownership policy for our executives. Under the policy, our NEOs are required to maintain minimum beneficial ownership of our stock equal to 6x of base salary for our CEO and 3-1.5x of base salary for our other NEOs. As of December 31, 2020, all of our NEOs were in compliance with the stock ownership policy.

 

During fiscal 2021, we implemented a compensation recovery policy, under which the Compensation Committee has the discretion to recover performance-based equity and cash incentive compensation paid to our executive officers, including the NEOs, if the compensation would not have been earned based on a material restatement of our financial statements within the prior three years or due to the executive officer’s termination for cause.

2020 “SAY-ON-PAY” ADVISORY VOTE ON EXECUTIVE COMPENSATION

Our stockholders make an advisory vote on our executive compensation on a triennial basis. At our 2020 Annual Meeting of Stockholders, approximately 75% of the votes cast in the “say-on-pay” advisory vote were “FOR” approval of our executive compensation, reflecting continued stockholder support for our executive compensation program.

We value the opinions of our stockholders and seek their input as part of our regular stockholder outreach efforts. We would like to sustain the stockholder support for our NEO compensation and will continue to engage in regular discussions with our principal unaffiliated stockholders regarding their views on executive compensation matters. We will continue to consider stockholder feedback, input from our independent compensation consultant and the outcomes of future “say-on-pay” votes when assessing our executive compensation programs and policies and making compensation decisions for our NEOs.

Compensation Philosophy and Objectives

We want to attract, motivate and retain high-quality employees who reflect our values and will enable us to achieve our short- and long-term strategic goals. We operate in a high-growth environment where substantial competition exists for skilled employees. Our ability to attract, motivate and retain high-caliber individuals depends in large part on the compensation packages we offer. We believe that our executive compensation program should reflect our financial and operating performance by aligning delivered pay with actual performance.

Our objective is to provide a target total compensation program that is competitive with similarly-sized US-based public companies in the industries with which we compete for executive talent. The Compensation Committee reviews benchmark data for the individual and for the group as a whole but does not target a specific benchmark level for the NEO group.

Role of the Compensation Committee, Compensation Consultants and Executive Officers in Compensation Determinations

ROLE OF THE COMPENSATION COMMITTEE

The Compensation Committee is responsible for, among other things, evaluating and approving all compensation plans, policies and programs of LendingTree as they affect our executive officers. Specifically, the Compensation Committee reviews and approves:

· the annual base salaries and annual or long-term incentive opportunities of our executive officers;
· performance metrics for our incentive compensation programs and their respective weightings;

· any employment agreements, severance arrangements or change-in-control agreements affecting the executive officers;
· any special or supplemental compensation and benefits for executive officers; and
· our compensation benchmarking process and the peer group we use for comparison purposes to ensure reasonableness and competitiveness of our compensation practices.

37 LENDINGTREE 2021 Proxy Statement | Compensation Committee Report

 

 

Table of Contents

  

Further information regarding our Compensation Committee’s responsibilities is provided under “Board of Directors Responsibilities and Structure” on page 12 of this proxy statement.

ROLE OF COMPENSATION CONSULTANTS

Under its charter, the Compensation Committee has the authority to retain independent compensation consultants to assist it in fulfilling its responsibilities. During fiscal 2020, the Compensation Committee engaged FW Cook as its independent compensation consultant. The executive compensation consulting services provided by FW Cook included:

· supporting the Compensation Committee to ensure our executive compensation program is competitive and aligns the interests of our executives with those of our stockholders;
· attending Compensation Committee meetings, including, at the Committee’s request, any executive sessions;
· providing independent advice on current trends and best practices in executive compensation design and program alternatives;
· advising on our compensation plans and practices to improve their effectiveness; and
· assisting the Compensation Committee to determine our peer group as described below under “Peer Group” below.

During fiscal 2020, FW Cook reported directly to our Compensation Committee and performed the services described above on behalf of the Compensation Committee while interacting with our management in the course of performing those services. The Compensation Committee has assessed the independence of FW Cook pursuant to Nasdaq and SEC rules and the committee’s charter, and concluded that FW Cook is independent and that no conflict of interest exists that would prevent FW Cook from independently representing the Compensation Committee.

ROLE OF MANAGEMENT IN COMPENSATION DECISIONS

The Compensation Committee also received support from certain executives in analyzing and establishing LendingTree’s compensation programs for fiscal 2020. Members of LendingTree’s management and staff, including the Chief Human Resources Officer, members of her staff and internal LendingTree counsel, attended a portion of each meeting of the Compensation Committee.

Mr. Lebda, our Chairman and CEO, provided recommendations to the Compensation Committee regarding the cash and equity compensation for members of the executive team of our Company (including those executives who are NEOs) other than for himself. Mr. Lebda also provided recommendations to the Compensation Committee on succession planning, organizational development and the use of incentive compensation to drive our growth and profitability. In determining compensation for other NEOs, the Compensation Committee considered Mr. Lebda’s recommendations.

The Compensation Committee determined the compensation for Mr. Lebda after obtaining information and input from FW Cook and conferring with the Board without Mr. Lebda present.

In all cases, although the Compensation Committee received advice and recommendations, it is solely responsible for making the final decisions on the compensation for the NEOs.

Peer Group

The Compensation Committee regularly evaluates the compensation of our NEOs against the compensation of the NEOs at comparable companies.

During fiscal 2019, the Compensation Committee worked with FW Cook to update the peer group companies used for assessing our fiscal 2020 executive compensation program. The Compensation Committee applied the following objective criteria to select the peer group:

Compensation Committee Report | LENDINGTREE 2021 Proxy Statement 38

 

Table of Contents

 

Criteria for Peer Group General Characteristics
Size Market capitalization between 0.3x and 3x to LendingTree’s size (exception is Expedia).
Industry Software and services, internet retail, consumer finance and/or research or consulting services, with focus on data analytics and consumer platforms.
Data availability U.S.-based, publicly traded and stand-alone (no divisions or subsidiaries).

 

We believe the peer group selected represents companies that have similar business models (most are marketplace businesses), have a particular focus on providing consumers with additional access to goods and services through technology, and are the types of companies with which we compete for employee talent, particularly executive talent.

 

39 LENDINGTREE 2021 Proxy Statement | Compensation Committee Report

 

 

Table of Contents

 

Using these criteria, FW Cook recommended, and the Compensation Committee approved, the following 19 companies as our peer group beginning in July 2019:

 

Blucora Expedia Group IAC TripAdvisor
Cars.com Fair Isaac Match Group Wayfair
CoreLogic GoDaddy RealPage Yelp
CoStar Group Groupon Redfin Zillow
Etsy Grubhub Shutterfly  

 

At the time the peer group was selected, LendingTree’s market capitalization was at the median of its peer companies’ average market capitalization for the most recent fiscal year.

In July 2020, the Compensation Committee re-evaluated the peer group using the same criteria described above. The only adjustment to the group was to remove Shutterfly, which was acquired in September 2019. The resulting peer group was used to develop market perspective for our CEO’s new employment agreement covering fiscal 2021 through 2023 and the fiscal 2021 compensation program for the other executives.

The Compensation Committee believes pay data drawn from the companies in our peer group is a valuable source of information for assessing compensation levels for our NEOs, evaluating performance alignment and setting incentive compensation design.

Compensation Governance

We maintain the following compensation practices that reflect our pay-for-performance compensation philosophy.

What we have introduced since 2019

ü

Enhance our stock ownership guidelines to cover our CEO (6x base salary) and our other NEOs (3-1.5x base salary).

ü

Maintain a compensation recovery policy covering the cash and equity incentive compensation paid to our executive officers.

ü

Maintain a minimum vesting period of one year for all equity awards, subject to limited exceptions.

ü

Expressly prohibit payment of dividends on unvested equity awards.

 What we continued to do
ü Tie the majority of named executive officers' (“NEOs”) compensation over time to equity awards, the ultimate value of which is driven by our overall performance and valuation.
ü Grant performance-based equity incentive awards to our CEO with challenging performance hurdles.
ü Review NEO compensation annually, with the review conducted by our Compensation Committee that consists solely of independent directors.
ü Maintain stock ownership guidelines of 5x annual retainer for our independent directors.
What we don’t do

× No excise tax gross-up.
× No supplemental company-paid retirement benefits.
× No repricing of stock options without stockholder approval.
× No granting of discounted or reload stock options.
× No guaranteed annual salary increases or bonuses.
×

No excise tax gross-up. 

 

Compensation Committee Report | LENDINGTREE 2021 Proxy Statement 40

 

Table of Contents

 

Components of Compensation

BASE SALARY

Base salary is the only fixed component of our executive compensation program. We view the primary purpose of base salary as attracting and retaining our highly qualified NEOs and providing them with a degree of certainty while having a significant portion of their overall pay “at risk” in the form of annual cash bonuses and equity awards, which have historically been granted on a multi-year basis.

 

Each February, the Compensation Committee reviews the base salaries of our NEOs to ensure they reflect each NEO’s role, responsibilities, experience and performance, while taking into account whether market-based adjustments are necessary.

The following table shows the annual base salary rate in effect at the end of fiscal 2019 and 2020 for each of our NEOs. Messrs. Lebda and Salvage have not received an increase in salary since fiscal 2017, and Mr. Lebda will not receive one until at least the end of 2023 based on the terms of his new employment agreement (see “CEO’s 2020 Employment Agreement”, below).

Name Fiscal 2019 Fiscal 2020 % Increase
Mr. Lebda $750,000 $750,000 0.0%
Mr. Salvage $450,000 $450,000 0.0%
Mr. Moriarty $400,000 $430,000 7.5%
Ms. Olmstead $350,000 $375,000 7.1%
Mr. Sharma $300,000 $325,000 8.3%

During fiscal 2020, the Committee approved a voluntary program under which employees of the Company in the position of Vice President and above could elect to forgo a specified portion of their base salaries for the balance of 2020 in exchange for an award of restricted stock units with grant date fair value equal to 110% of the foregone base salary amount. During fiscal 2020, Ms. Olmstead elected to participate in the program. Please refer to the Summary Compensation Table on page 50 for additional details.

ANNUAL INCENTIVES

Overview. We believe that our NEOs, as leaders of our key business units and functions, have the ability to directly influence our performance. As a result, annual bonuses for our NEOs are directly tied to our performance. Our executive officers, including the NEOs, participate in our annual bonus plan. For fiscal 2020, each participant in the plan is eligible to earn an annual bonus with a target amount equal to a specified percentage of his or her base salary.

In February of fiscal 2020, we established an annual bonus program based on adjusted EBITDA (“AEBITDA”). Shortly thereafter, the economic downturn due to the COVID-19 pandemic rendered the approved AEBITDA goal unobtainable due to substantial contraction in advertising spend by many of our partners, particularly those in our Consumer segment. To continue to motivate our NEOs, in April 2020, we quickly replaced the original AEBITDA-based bonus program with a bonus program based on achievement of individual OKRs. Under the revised OKR-based bonus program, our NEOs could be granted restricted stock units (“RSUs”) in place of cash bonuses, in order to preserve our cash and ensure a longer-term retention and ownership horizon beyond the pandemic. The decision to change from an obsolete AEBITDA goal to OKRs was made quickly because the Company believed challenging but achievable performance goals and expectations should be communicated as soon as possible that to drive the performance of our NEOs. We believe that this change in our annual bonus program design was the best method for driving our pay-for-performance culture than other alternatives, such as providing guaranteed bonuses, maintaining an obsolete performance goal, adopting a discretionary bonus plan, or resetting new performance goals with no visibility during the remainder of fiscal 2020. The original AEBITDA-based bonus program and the revised OKR-based bonus program are both described below.

Original fiscal 2020 bonus program. We established our original fiscal 2020 annual bonus program in February 2020 to measure our performance using AEBITDA, which excludes costs associated with long-term investments and is the primary financial metric by which we evaluate the performance of our businesses and determine our internal budgets. The original 2020 annual bonus program used AEBITDA growth, because we believe it will correlate with positive growth in stockholder value.

For purposes of our original 2020 annual bonus program, we defined AEBITDA as EBITDA excluding (1) non-cash compensation expense, (2) non-cash asset impairment charges, (3) gain/loss on disposal of assets, (4) restructuring and severance expenses, (5) litigation settlements and contingencies, (6) acquisitions and dispositions income or expense (including with respect to changes in fair value of contingent consideration), (7) bonus plan expense, (8) certain excluded costs associated with long-term investments in the Insurance and Auto products and (9) one-time items. EBITDA is defined as our reported net income (loss) before interest expense, provision for income taxes, depreciation and amortization.

Under the original annual bonus program design, the bonus pool available for payments to participants was equal to the sum of the individual target amounts, adjusted upward or downward by up to +/- 30 target percentage points based on achievement of corporate objectives, and then subject to potential re-allocation to individual NEOs based on their individual performance.

41 LENDINGTREE 2021 Proxy Statement | Compensation Committee Report

 

 

Table of Contents

 

The size of the bonus pool under the original fiscal 2020 annual bonus program was dependent on our AEBITDA for the year. The original fiscal 2020 funding schedule for the program is shown in the table below, with linear interpolation between each point shown. In the course of setting the original 2020 funding curve, we considered the rigor of our performance goals and the difficulty of setting performance goals in a high growth business such as ours. The AEBITDA goals and funding schedule below were cancelled in April 2020 after the start of COVID-19 pandemic that made the performance goals obsolete.

 

Fiscal 2020 AEBITDA
Performance

(% Target)

Baseline Bonus Pool
Funding

(% Target)

Maximum 120.0% 200.0%
  115.0% 175.0%
  110.0% 150.0%
  105.0% 125.0%
  102.5% 112.5%
Target 100.0% 100.0%
  97.5% 95.0%
  95.0% 90.0%
  92.5% 67.5%
  90.0% 45.0%
  87.5% 22.5%
Threshold/Minimum 85.0% 0.0%

 

Under the original fiscal 2020 annual bonus program design, once the bonus pool was funded by AEBITDA, then the Compensation Committee was allowed to make a qualitative assessment of strategic performance, adjust the bonus pool funding upwards or downwards by up to 30% of target, up to a maximum of 200% of target. The Compensation Committee was also allowed to exercise further discretion under the original fiscal 2020 annual bonus program to increase or decrease the amount of actual annual bonus payable to an individual participant, including our NEOs, provided that the actual annual bonus payable to a participant may not exceed 200% of the participant’s target amount and the aggregate sum of individual bonuses may not result in an increase in the overall funding of the bonus pool.

Revised fiscal 2020 bonus program. In April 2020, the AEBITDA goals under the original fiscal 2020 annual bonus program were deemed unobtainable due to the near cessation of the economic activity applicable to us due to COVID-19 pandemic. The Compensation Committee also recognized that it had no visibility to the end of the pandemic’s economic effect nor the final effect on the business of the Company. As a result, the Compensation Committee determined that the most effective manner to drive the performance of our NEOs was to restructure the annual bonus program so that it still required excellent individual performance, while motivating our NEOs during this challenging time.

Cash bonuses could not be earned under the original fiscal 2020 annual bonus program without a positive AEBITDA. Under the revised fiscal 2020 annual bonus program, this minimum 2020 AEBITDA hurdle was removed for all participating employees, including the NEOs, and the bonus program was changed so that it was based on pre-established individual OKRs. The bonus program for executives, including our NEOs, was also changed from a cash-based plan to an RSU-based plan. Target bonus opportunities remained at the same percentage of base salary as the original fiscal 2020 annual bonus program, but actual bonuses were capped at 100% of target and were paid in RSUs. Specifically, the NEOs’ target bonuses were paid in two RSU awards relating to the first and second half of fiscal 2020, respectively, so that relevant OKRs could be set for each period. No RSUs were granted to our NEOs for the applicable half of fiscal 2020 if the NEO’s OKRs for such period had not been satisfactorily achieved. For fiscal 2020, each RSU granted to our NEOs under the revised fiscal 2020 bonus program had a grant date fair value equal to half of the NEO’s target bonus opportunity. RSUs relating to the first half of fiscal 2020 were granted in August 2020 and RSUs relating to the second half of fiscal 2020 were granted in March 2021. RSUs vest on the first anniversary of the grant date, which enhances retention and alignment over the original fiscal 2020 annual bonus structure.

Compensation Committee Report | LENDINGTREE 2021 Proxy Statement 42

 

 

Table of Contents

 

The Committee set the following OKRs for our NEOs for fiscal year 2020: 

 

Mr. Lebda

 

· build a world-class data and analytics organization;

 

· enhance the customer experience across all interactions; and

 

· boost external profile of the Company.

 

Mr. Salvage

 

· deliver successful budgeting process to enable LendingTree to be focused on the right priorities for 2021;

 

· partner with direct reports to map out career growth plans for both short term and long term;

 

· improve collaboration and communication engagement scores;

 

· improve the Company’s EBITDA to exceed updated forecasts; and

 

· strategically accelerate sales and business development to drive additional revenue.

 

Mr. Moriarty 

 

· partner with business to drive forecast accuracy and enable improved business responsiveness;

 

· create sales data infrastructure to enable LendingTree sales to tie their actions to results

 

· identify SAAS spending and areas to rein in spending;

 

· partner with financial planning & analysis team to drive forecast accuracy; and

 

· expand corporate development dialogue to include large cap companies and consider business development integration opportunities.

 

Ms. Olmstead

 

· institute workforce planning process for department levels to make the organization more efficient and effective;

 

· create an iconic new headquarters location in order to drive employee engagement and retention;

 

· enhance the employee experience in order to increase engagement and retention;

 

· lead LendingTree’s efforts as an active and impactful player in philanthropy and volunteerism;

 

· create a diversity & inclusion strategy at LendingTree to build the LendingTree Foundation; and

 

· hire a head of the LendingTree Foundation.

 

Mr. Sharma

 

· establish LendingTree as a top destination for fintech talent;

 

· offer learning skills development training to increase knowledge;

 

· build next gen shopping experiences based on user needs in order to improve experience; and

 

· drive short-term revenue projects in order to achieve in-period business goals.

 

43 LENDINGTREE 2021 Proxy Statement | Compensation Committee Report

 

 

Table of Contents

 

Based on the Committee's assessment of the NEOs' achievement of their pre-established OKRs, the NEOs’ fiscal 2020 bonus payouts were as follows, although the payouts were in RSUs granted 50% after the first half of the year and 50% after the end of the year, as described above:  

Name Salary
($)
Target Bonus as a
Percent of Salary
 (%)
Target Bonus
($)
Actual Bonus as
a Percent of
Target Bonus
(%)
Actual Bonus in
RSUs
($)
Mr. Lebda $750,000 125% $937,500 100% $937,562
Mr. Salvage $450,000 100% $450,000 100% $450,017
Mr. Moriarty $430,000 75% $322,500 100% $322,703
Ms. Olmstead $375,000 60% $225,000 100% $225,176
Mr. Sharma $325,000 50% $162,500 100% $162,823

LONG-TERM INCENTIVES

The largest component over time of our NEOs’ direct compensation is long-term incentives that provide alignment with our stockholders in the form of equity participation. The primary purpose of granting equity awards is to link our NEOs’ financial success to that of our stockholders, with the value of the equity awards increasing only as our stock price increases, and to promote long-term value creation.

Fiscal 2017, 2018 and 2019 Awards. In recent years, LendingTree has primarily granted multi-year equity compensation awards to our NEOs with the intention of retaining them and providing them with a truly long-term focus. A summary of all equity awards granted to our NEOs in fiscal 2017, 2018 and 2019 is provided below, including multi-year awards for all NEOs. During these years, only Mr. Lebda was granted equity awards that the Company characterizes as annual awards.

Mr. Lebda entered into an employment agreement with us on September 20, 2017, which specified the terms of his fiscal 2017 and fiscal 2018 initial retention equity awards and certain terms of his subsequent fiscal 2018, 2019 and 2020 annual awards. Mr. Lebda’s initial equity awards were broken up into multiple awards in 2017 and January 2018 in order to comply with limits imposed by the Company’s Fifth Amended and Restated 2008 Stock and Annual Incentive Plan. Mr. Salvage entered into a new employment agreement on January 2, 2018, which covered his multi-year awards. Mr. Moriarty joined the Company in June 2017, was promoted to the position of Chief Financial Officer and entered into an employment agreement in August 2017 and an amended employment agreement in October 2017; the terms of his equity awards were set at those times. 

Compensation Committee Report | LENDINGTREE 2021 Proxy Statement 44

 

 

Table of Contents

 

Name  Award Date Award Type Equity Vehicle Disclosure Detail
Mr. Lebda 7/26/2017 Initial Retention Award Performance Option 4/27/2018 proxy, 10/26/2017 10-Q
  1/2/2018 Initial Retention Award Performance Option 4/27/2018 proxy, 10/26/2017 10-Q
  1/2/2018 Initial Retention Award Performance Restricted Stock Award (“RSA”) 4/26/2019 proxy, 10/26/2017 10-Q
  1/2/2018 Initial Retention Award Time-Vested RSA 4/26/2019 proxy, 10/26/2017 10-Q
  2/16/2018 Annual Award Performance Option 4/26/2019 proxy
  2/16/2018 Annual Award Time-Vested RSU 4/26/2019 proxy
  2/14/2019 Annual Award Performance Option 4/28/2020 proxy
  2/14/2019 Annual Award Time-Vested Option 4/28/2020 proxy
Mr. Salvage 10/22/2017 Multi-year Award Time-Vested Stock Option 4/27/2018 proxy, 4/27/2018 10-Q
  10/22/2017 Multi-year Award Time-Vested RSU 4/27/2018 proxy, 4/27/2018 10-Q
Mr. Moriarty 6/5/2017 Inducement Award Time-Vested Stock Option 4/27/2018 proxy, 4/27/2018 10-Q
  6/5/2017 Inducement Award Time-Vested RSU 4/27/2018 proxy, 4/27/2018 10-Q
  8/30/2017 Promotion Award Time-Vested Stock Option 4/27/2018 proxy, 4/27/2018 10-Q
  8/30/2017 Promotion Award Time-Vested RSU 4/27/2018 proxy, 4/27/2018 10-Q
  10/22/2017 Multi-year Award Time-Vested Stock Option 4/27/2018 proxy, 4/27/2018 10-Q
  10/22/2017 Multi-year Award Time-Vested RSU 4/27/2018 proxy, 4/27/2018 10-Q
Ms. Olmstead 10/1/2018 Inducement Award Time-Vested Stock Option 5/3/2019 Form 3
  10/1/2018  Inducement Award Time-Vested RSU 5/3/2019 Form 3
  10/1/2018 Multi-year Award Time-Vested Stock Option 5/3/2019 Form 3
  10/1/2018 Multi-year Award Time-Vested RSU 5/3/2019 Form 3
Mr. Sharma 7/30/2018 Buy-out Award Time-Vested RSU 5/3/2019 Form 3
  7/30/2018 Multi-year Award Time-Vested Stock Option 5/3/2019 Form 3
  7/30/2018 Multi-year Award Time-Vested RSU 5/3/2019 Form 3

Fiscal 2020 Annual Awards for the CEO. On February 28, 2020, Mr. Lebda received his annual equity awards for fiscal 2020 provided by his 2017 employment agreement. The awards had an aggregate grant date fair value of $7,426,005 and had terms that were generally consistent with his fiscal 2019 awards. The awards were structured to be exceptionally performance-based and oriented toward long-term retention and value creation, as follows:

· Performance-based options were granted as 50% of total grant date fair value of the fiscal 2020 equity awards, with the exercise price set equal to our closing stock price on the date of grant ($275.82). The options are earned upon achievement of rigorous stock price hurdles, set forth in the table below, with achievement measured using the volume weighted average closing price (“VWAP”) for the final 30 trading days in each fiscal quarter commencing with the second fiscal quarter of 2020 through the first fiscal quarter of 2024. Incremental options may be earned upon each quarterly measurement date; the calculation is based on the amount earned through each fiscal quarter end, less amounts already earned in prior quarters. All performance options earned for stock price growth remain subject to service-vesting until the last day of the fiscal quarter in which the fourth anniversary of the grant occurs (i.e., earned performance-based options cliff vest after four years). Vesting continues if Mr. Lebda continues to provide services to the Company as employee, Board member or consultant. The options have a 10-year life, and vested options have a post-termination exercise period of 12 months.

45 LENDINGTREE 2021 Proxy Statement | Compensation Committee Report

 

 

Table of Contents

  

      Stock Price Increase from        
      Grant Price of $275.82  

Stock Price

Hurdle

 

Earnout

(% Target)

      Cumulative    4-Yr. CAGR  
                   
  Maximum   121%   22%   $609.56   167%
      101%   19%   $554.40   134%
  Target   81%   16%   $499.24   100%
      61%   13%   $444.07   67%
  Threshold   41%   9%   $388.90   33%
      <41%   <9%   <$388.90   0%
Note: linear interpolation between points shown.        
· Time-based options were granted as 50% of total grant date fair value of the fiscal 2020 equity awards, with the exercise price set to our closing stock price on the date of grant ($275.82). The options vest in four equal annual installments, subject to Mr. Lebda’s continued service as an employee, Board member or consultant. The options have a 10-year life, and vested options have a post-termination exercise period of 12 months.

Earnout of Performance Equity under our CEO’s 2017 Employment Agreement to Date. As of December 30, 2020, Mr. Lebda’s initial retention awards had been earned at 111% of target and none of his subsequent fiscal 2018, 2019 or 2020 annual equity awards had been earned. None of the earned awards provided under the 2017 employment agreement have vested, as the initial retention awards and the annual equity awards vest 100% after five and four years, respectively. This reinforces the long-term orientation of the awards.

CEO Performance Award Tracking as of 12/30/2020  
                  30-Day   Earned To-Date

End of
Performance

Period

 
    Grant   Target     Base   VWAP %            
Award Type   Date   Awards     Price   Incr.
(Max)
  % Target   Shares    
                               
Initial (Part I: Options)   7/26/2017   402,694     $183.80   +117%   111%   446,893   9/30/2022  
Initial (Part II: Options)   1/2/2018   31,336     $183.80   +117%   111%   34,776   9/30/2022  
Initial (Part II: PSAs)   1/2/2018   26,674     $183.80   +117%   111%   29,601   9/30/2022  
Annual (Options)   2/16/2018   13,163     $378.95   +5%   0%   0   3/31/2022  
Annual (Options)   2/14/2019   16,247     $308.96   +29%   0%   0   3/31/2023  
Annual (Options)   2/28/2020   19,126     $275.82   +11%   0%   0   3/31/2024  
                                 
                                 
Total       509,240             100%   511,270      

 

Fiscal 2020 Awards for Other NEOs. As the multi-year awards described above near the end of their intended term, NEOs other than the CEO were granted annual awards in fiscal 2020. The awards are intended to incentivize and retain the executives while directly aligning their interests with stockholders. Award value is split equally between time-based options and RSUs. 

Compensation Committee Report | LENDINGTREE 2021 Proxy Statement 46

 

 

Table of Contents

 

      Stock Options RSUs
Name Grant Date Grant Date
Fair Value
($)
Exercise Price Shares Grant Date
Fair Value
($)
Shares
Mr. Salvage 2/28/2020 $688,979 $275.82 4,987 $700,031 2,538
Mr. Moriarty 2/28/2020 $787,484 $275.82 5,700 $800,154 2,901
Ms. Olmstead 2/28/2020 $738,300 $275.82 5,344 $750,230 2,720
Mr. Sharma 2/28/2020 $492,246 $275.82 3,563 $500,062 1,813

 

Fiscal 2020 CEO Employment Agreement Awards. On November 30, 2020, we entered into a new employment agreement with Mr. Lebda to ensure his complete commitment to the Company. The agreement provided for multi-year equity option awards that aligned the interests of Mr. Lebda with the interests of our stockholders by ensuring there is significant stock price appreciation before he may realize value from the exercise of the option awards. The option awards were granted on December 3, 2020, as discussed under “CEO’s 2020 Employment Agreement”, below, and were for Mr. Lebda’s service to us for fiscal 2021, 2022 and 2023. The CEO will not receive any additional long-term incentive awards during this period.

70% of the option awards were in the form of performance-based premium stock options (“Performance-Based Options”) and the remaining 30% were in the form of time-based premium stock options (“Time-Based Options”). Both the Performance-Based Options and the Time-Based Options were granted with a premium exercise price of $300, which was 25% higher than our closing stock price of $239.47 on the date of grant, so there was no realizable value to our CEO on these options unless our stock price increases by more than 25% after grant.

The Performance-Based Options have a grant date fair value of $30 million and are earned upon achievement of the challenging stock price hurdles described below. No Performance-Based Options are earned unless stock price growth after grant is at least 81% prior to the end of the first quarter of 2025. There is linear interpolation between each point, with performance measured using our VWAP for the final 30 trading days in each fiscal quarter commencing with the first fiscal quarter of 2021 through the first fiscal quarter of 2025. 

    Stock Price Growth  
  No. Options Price Hurdle Price Increase
from Grant
Equivalent 4.25-
Year CAGR
Options Earned (%
Target)
Maximum 363,464 $696.04 191% 29% 167%
Target 217,643 $563.73 135% 22% 100%
Threshold 71,822 $432.70 81% 15% 33%

 

All Performance-Based Options earned for stock price growth remain subject to time-vesting in three equal installments based on Mr. Lebda’s continued employment or service to LendingTree through December 31 of each of 2024, 2025 and 2026, except that any Performance-Based Options earned for stock price growth for the first fiscal quarter of 2025 will time-vest in three equal installments based on Mr. Lebda’s continued employment or service to us and on December 31 of each of 2025 and 2026 upon our certification of the achievement of the applicable performance hurdle. The Compensation Committee believes that CEO’s long service requirement through the end of 2026 is beneficial for stockholders, particularly if stockholder return was high enough that the premium $300 option exercise price and further performance stock price hurdles were achieved.

The Time-Based Options, which have a premium exercise price that is 25% higher than our closing stock price on the date of grant, have a grant date fair value of $12.9 million and vest in six equal installments based on Mr. Lebda’s continued employment or service to us through December 31 of each of 2021 through 2026.

Both the Performance-Based Options and the Time-Based Options have a two-year holding requirement for net after-tax shares retained by our CEO following his exercise to ensure that there is long-term ownership and to reduce the ability to use short-term market volatility for profit. 

47 LENDINGTREE 2021 Proxy Statement | Compensation Committee Report

 

 

Table of Contents

   

EMPLOYEE BENEFITS

We provide group life insurance, health and dental care insurance, short-term and long-term disability insurance, 401(k) plan matching contributions and similar benefits to all employees, including our NEOs. These benefits do not discriminate in scope, terms or operations in favor of the NEOs.

We maintain a nonqualified deferred compensation plan pursuant to which selected highly compensated employees, including our NEOs, may defer portions of their compensation and we may make discretionary contributions to participant accounts.

Our NEOs, other than Mr. Sharma, have each entered into an employment (or offer letter) agreement with us, providing them with specified severance payments and benefits upon an involuntary termination of their employment or in connection with an involuntary termination of their employment within 12 months of a change in control. For these purposes, an involuntary termination includes a termination by the NEO for a specified good reason.

Mr. Sharma has entered into a participation agreement that entitles him to severance under our Executive Severance Pay Plan. Pursuant to the terms of the Executive Severance Pay Plan, Mr. Sharma is entitled to specified severance payments and benefits upon an involuntary termination of his employment or in connection with an involuntary termination of his employment within 12 months of a change in control. Receipt of these severance payments and benefits, which are described further under “Potential Payments Upon Termination of Employment or Change in Control” on page 54, is conditioned on the NEO providing a release of claims.

CEO’S 2020 EMPLOYMENT AGREEMENT

Given Mr. Lebda’s exceptional leadership of the Company’s business since its founding in 1996, the Compensation Committee had a strong desire to renew his employment agreement and obtain a long-term commitment for his continued leadership. As such, on November 30, 2020, the Company entered into a new employment agreement with Mr. Lebda to secure his employment as Chairman and CEO through December 31, 2023. The new employment agreement is designed to be long-term focused, and the equity awards granted to Mr. Lebda pursuant to the new employment agreement were extremely performance-based, with no realizable long-term incentive value unless share price increases by at least 25%. Effective December 1, 2020, the new employment agreement superseded and replaced the 2017 employment agreement, which would have expired on January 9, 2021. His resulting annualized target total direct compensation is calculated as follows.

  CEO Target Total Direct Compensation under 2020 Employment Agreement
Pay Element 2021 2022 2023 2021-2023 Avg.
Salary $750,000 $750,000 $750,000 $750,000
Target Bonus $937,500 $937,500 $937,500 $937,500
Target Total Cash $1,687,500 $1,687,500 $1,687,500 $1,687,500
Performance-Based Options $29,999,911* $0 $0 $9,999,970
Time-Based Options $12,899,933* $0 $0 $4,299,978
Total Long-Term Incentive Awards $42,899,844 $0 $0 $14,299,948
Target Total Direct Compensation $44,587,344 $1,687,500 $1,687,500 $15,987,448

 

* Awards were granted on December 3, 2020 and are intended to cover Mr. Lebda’s service in fiscal 2021, 2022 and 2023.

Under the new employment agreement, Mr. Lebda has the same salary ($750,000) and target annual incentive opportunity (125% of base salary) as under the 2017 employment agreement. In connection with entering into the new employment agreement, Mr. Lebda received two multi-year premium-priced option awards, the Performance-Based Options and the Time-Based Options, that are described in greater detail under “Fiscal 2020 CEO Employment Agreement Awards,” above.

Under the 2020 employment agreement, Mr. Lebda’s employment may be terminated by us or him at any time. If Mr. Lebda’s employment is terminated by us without cause or Mr. Lebda resigns for specified good reason, then he will receive the same severance benefits to which he was entitled under the 2017 employment agreement (described further under “Potential Payments Upon Termination of Employment or Change in Control” on page 54). In addition, with respect to the Performance-Based Options, he will vest in the portion of the options that were earned for performance through the termination date, with incremental accelerated vesting for the remaining portion of the options based on our stock price performance for the final 30 trading days prior to Mr. Lebda’s termination. With respect to the Time-Based Options, he will receive two years of accelerated and additional vesting, consistent with the 2017 employment agreement. Any equity awards held by Mr. Lebda other than the Performance-Based Options and the Time-Based Options will continue to be treated in the same manner as they would have been treated under the 2017 employment agreement.

As part of the new employment agreement, Mr. Lebda will not compete with our business or solicit our employees during the term of his employment and for two years following the termination of his employment for any reason.

Our Compensation Policies and Practices

PROHIBITION AGAINST HEDGING

We do not permit our NEOs to engage in any transactions that would constitute hedging. Hedging or monetization transactions can be accomplished through a number of possible mechanisms, including financial installments such as prepaid variable forwards, equity swaps, collars and exchange funds. Such hedging transactions may permit an employee to continue to own our securities obtained through employee

Compensation Committee Report | LENDINGTREE 2021 Proxy Statement 48

 

 

Table of Contents

benefit plans or otherwise, but without the full risks and rewards of ownership. When that occurs, the employee may no longer have the same objectives as our stockholders.

PLEDGING POLICY

We maintain a policy whereby our directors and officers are prohibited from holding our securities of LendingTree in a margin account or pledging such securities as collateral for a loan. An exception to this prohibition may be made if any covered person wishing to enter into such an arrangement first submits the proposed transaction, all agreements therefor and a written explanation of the purpose of the proposed transaction to our Legal Department. Our Legal Department may approve or disapprove such proposed transaction in its sole discretion. 

Risk Assessment of Compensation Programs

During fiscal 2020, the Compensation Committee reviewed our compensation programs for executives, as well as our compensation policies and practices for all employees, to evaluate whether the policies or practices present an environment that would facilitate excessive risks or behaviors. The committee believes that our programs, policies and practices, are not reasonably likely to have a material adverse effect on our Company. The committee believes that the structure and design of the program do not create incentives to take on too much risk, that there are not incentives to take undue risks that exist in the broad-based incentive programs below the executive level, and that we have policies in place to mitigate risk-taking and support a long-term orientation. These conclusions are supported by the combination of controls and considerations used in our compensation program, including the annual review of the program, blend of short-term, long-term and incentive-based compensation and the use of performance-based targets and evaluations.

Tax and Accounting Implications of Our Compensation Policies

Section 162(m) of the Internal Revenue Code limits the amount of compensation paid to certain of our NEOs that may be deducted by us for federal income tax purposes in any fiscal year to $1 million. While the Compensation Committee considers the tax deductibility of compensation as one factor in determining executive compensation, the Compensation Committee retains the discretion to award compensation that is not tax deductible if it believes it is in the best interests of LendingTree and our stockholders.

The Compensation Committee also considers the financial accounting treatment of our compensation practices, though, consistent with prior fiscal years, such consideration was not a material consideration in the compensation awarded to our NEOs during fiscal 2020.

49 LENDINGTREE 2021 Proxy Statement | Compensation Committee Report

 

Table of Contents

 

Executive Compensation Tables

Fiscal 2020 Summary Compensation Table

The following table shows compensation earned by or granted to our NEOs during the last three fiscal years, as calculated under SEC rules.

 

  Name and Principal Position Fiscal
Year
(1)
Salary
($)
Stock Awards
($)
(2)
Option
Awards ($)
(2)
Non-Equity Incentive
Plan Compensation
($)
(3)
All Other
Compensation
($)
(5)
Total
($)
  Douglas Lebda 2020 750,000 937,562 50,325,848 - 9,730 52,023,140
  Chairman and 2019 750,000 - 7,474,402 375,000 423,586 9,022,988
  Chief Executive Officer 2018 750,000 27,569,894 13,207,201 491,089 300,054 42,318,238
  Neil Salvage 2020 450,000 1,150,048 688,979 - 9,510 2,298,537
  President 2019 450,000 - - 180,000 175,841 805,841
2018 450,000 - - 235,723 106,969 792,692
  J.D. Moriarty 2020 421,923 1,122,857 787,484 - 2,345 2,334,609
Chief Financial Officer 2019 400,000 - - 120,000 76,439 596,439
    2018 400,000 - - 157,149 44,555 601,704
  Jill Olmstead
Chief Human
2020 314,183(4) 1,034,981 738,300 - 7,442 2,094,906
  Resources Officer 2019 350,000 - - 85,000 28,636 463,636
  Sushil Sharma 2020

318,269

662,885 492,246 - 9,510 1,482,910
  Chief Product Officer 2019 300,000 - - 60,000 9,280 369,280
                 

(1) Ms. Olmstead and Mr. Sharma joined LendingTree in October 2018 and July 2018, respectively, and each became one of our NEOs for the first time for fiscal 2019.  Thus, under the SEC’s rules, we are not required to report their compensation for any year before fiscal 2019.
(2)

Reflects the dollar amounts of the aggregate grant date fair value, computed in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718, Stock Compensation, of the stock awards and option awards granted to the NEO for the years shown. Generally, the grant date fair value is the amount that we would expense in our financial statements over the award’s vesting schedule. This includes RSUs relating to the NEO’s performance for the second half of fiscal 2020 and granted in March 2021. For additional information regarding the assumptions made in calculating these amounts, see Note 13 “Stock-Based Compensation” to our audited, consolidated financial statements included in our Annual Report on Form 10-K which was filed with the SEC on March 1, 2021. The multi-year nature of our CEO’s awards is discussed above under “Long-Term Incentives” on page 44.  The vesting terms of these equity awards are described in the table below under “Outstanding Equity Awards at Fiscal 2020 Year-End” on page 52 and footnotes to such table. The table does not include grants to family members or spouses of the NEOs. For a description of shares beneficially owned by the NEOs, please refer to “Stock Ownership Information” on page 68 below.

(3) Reflects the amounts earned for achievement of performance objectives under the annual cash incentive programs. Information regarding our fiscal 2020 annual cash incentive program is described in the section above entitled “Annual Cash Bonuses,” on page 38.
(4) For fiscal year 2020, Ms. Olmstead elected to receive a portion of her salary in the form of RSUs that vested on January 4, 2021. The RSUs had a grant date fair value equal to 110% of the foregone salary.
(5) The detailed figures for fiscal 2020 for this column are shown in the table below.

 

    Year   Matching
Contributions
made by
LendingTree
to 401(k)(a)
   

Country 

Club 

Expenses(b)

   

Remote 

Communication
Expenses/
Cellphone(a)
 

   

Personal 

Use of 

Company 

Aircraft(c) 

 
Douglas Lebda   2020   $ 8,400     $     $ 1,330     $  
    2019   $ 8,400     $ 108     $ 2,355     $ 412,723  
    2018   $ 8,250     $ 5,768     $ 5,022     $ 281,014  
Neil Salvage   2020   $ 8,550     $     $ 960     $  
    2019   $ 8,400     $ 766     $ 960     $ 165,715  
    2018   $ 8,250     $ 395     $ 960     $ 97,364  

 

Executive Compensation Tables | LENDINGTREE 2021 Proxy Statement 50

 

Table of Contents

 

    Year   Matching
Contributions
made by
LendingTree
to 401(k)(a)
   

Country  

Club 

Expenses(b) 

   

Remote 

Communication
Expenses/
Cellphone(a)
 

   

Personal 

Use of 

Company 

Aircraft (c)

 
J.D. Moriarty   2020   $ 1,385     $     $ 960     $  
    2019   $ 1,385     $     $ 960     $ 74,094  
    2018   $ 1,385     $     $ 960     $ 42,210  
Jill Olmstead   2020   $ 6,482     $     $ 960     $  
    2019   $ 6,038     $     $ 880     $ 21,718  
Sushil Sharma   2020   $ 8,550     $     $ 960     $  
    2019   $ 8,400     $     $ 880     $  
(a) All of the NEOs received matching contributions under LendingTree’s 401(k) plan and reimbursement for certain communication expenses.
(b) During fiscal years 2019 and 2018, Messrs. Lebda and Salvage received reimbursement for a portion of monthly country club dues in connection with their use of the country club for business purposes.
(c) During fiscal years 2019 and 2018, Messrs. Lebda, Salvage and Moriarty utilized aircraft provided by LendingTree for personal use, and during fiscal year 2019, Ms. Olmstead utilized aircraft provided by LendingTree for personal use.

 

Grants of Plan-Based Awards During Fiscal 2020

The following table provides information on cash-based and equity-based awards granted in fiscal 2020 to the NEOs.

 

Name Grant
Date
(1)
  Estimated Future
Payouts Under Equity Incentive
Plan Awards
  All Other
Stock
Awards:
 Number of
Shares of
Stock or
Units (#)
  All Other
Option
Awards:
 Number of
Securities
Underlying
 Options (#)
  Exercise or
 Base Price
of Option
Awards
($/Sh)
  Grant Date
Fair Value of
Stock and
Option
Awards ($)
(2)
      Threshold
(#)
Target
(#)
Maximum
(#)
               
                           
Douglas Lebda                          
  02/28/2020   6,312 19,126 31,940           275.82   3,750,035
  02/28/2020               26,539   275.82   3,675,970
  08/05/2020            1,398           468,735
  12/03/2020   71,822 217,643 363,464           300.00   29,999,911
  12/03/2020               125,853   300.00   12,899,933
Neil Salvage                          
  02/28/2020           2,538           700,031
  02/28/2020               4,987   275.82   688,979
  08/05/2020           671           224,980
J.D. Moriarty                          
  02/28/2020           2,901           800,154
  02/28/2020               5,700   275.82   787,484
  08/05/2020           481           161,274
Jill Olmstead                          
  02/28/2020           2,720           750,230
  02/28/2020               5,344   275.82   738,300
  06/03/2020           221           59,575
  08/05/2020           336           112,657
Sushil Sharma                          
  02/28/2020           1,813           500,062
  02/28/2020               3,563   275.82   492,246
  08/05/2020           243           81,475
                               
(1) Equity awards were granted under our 2008 Stock and Annual Incentive Plan. Vesting of the equity awards is described in the table below under “Outstanding Equity Awards at Fiscal 2020 Year-End.”
(2) Represents the grant date fair value of the respective awards of stock options and RSUs, computed in accordance with FASB ASC Topic 718. Assumptions used to calculate these amounts are described in Note 13 “Stock-Based Compensation,” to our annual consolidated financial statements for the year ended December 31, 2020, which is included in our Annual Report on Form 10-K for the year ended December 31, 2020 filed with the SEC on March 1, 2021.

 

51 LENDINGTREE 2021 Proxy Statement | Executive Compensation Tables

 

Table of Contents

 

Outstanding Equity Awards at Fiscal 2020 Year-End

The following table provides information regarding equity awards held by our NEOs as of December 31, 2020.

 

    Option Awards   Stock Awards
Name  

Number of

Securities
Underlying
Unexercised
Options (#)
Exercisable
 

Number of

Securities
Underlying
Unexercised
Options (#)
Unexercisable
  Equity
Incentive

Plan
Awards:

Number of
Securities
Underlying
Unexercised
Unearned
Options (#)
  Option
Exercise
Price

($)
  Option
Expiration
Date
  Number of
Shares or

Units of Stock
That

Have Not
Vested (#)
  Market Value of
Shares or Units of
Stock That Have Not
Vested(1) ($)
Douglas Lebda   51,290           5.35   4/8/2021        
    51,289           5.89   4/8/2021        
    51,289           6.42   4/8/2021        
    150,000           7.43   3/1/2022        
    54,103           23.80   5/7/2024        
    200,000           26.59   8/6/2024        
    5,973           69.94   2/24/2026        
        446,893   225,606   183.80   7/26/2027        
        34,776   17,556   340.25   1/2/2028        
            21,982   378.95   2/16/2028        
    5,784    17,353       308.96   2/14/2029        
            27,132   308.96   2/14/2029        
            31,940   275.82   2/28/2030        
        26,539       275.82   2/28/2030        
            363,464   300.00   12/3/2030        
        125,853       300.00   12/3/2030        
                        9,896   2,709,426
                        44,545   12,195,976
                        23,804   6,517,297
                        1,398   382,758
Neil Salvage   12,455   12,456        223.90   10/22/2027        
        4,987        275.82   2/28/2030        
                        6,328   1,732,543
                        2,538   694,879
                        671   183,713
J.D. Moriarty   18,240           163.50   6/5/2027        
    19,435           231.55   8/30/2027        
        10,416       223.90   10/22/2027        
        5,700       275.82   2/28/2030        
                        5,583   1,528,570
                        2,901   794,265
                        481   131,693
Jill Olmstead   3,275   9,426       218.33   10/1/2028        
    764    3,060       218.33   10/1/2028        
        5,344       275.82   2/28/2030        
                        4,948   1,354,713
                        1,650   451,754
                        2,720   744,709
                        221   60,508
                        336   91,993
Sushil Sharma       3,377       229.15   7/30/2028        
        3,563       275.82   2/28/2030        
                        1,746   478,037
                        1,813   496,381
                        243   66,531

(1) The market value of the unvested RSUs and RSAs is calculated by multiplying the respective number of shares or units of stock by the closing market price of $273.79 for a share of our common stock as of December 31, 2020.

 

Executive Compensation Tables | LENDINGTREE 2021 Proxy Statement 52

 

 

Table of Contents

 

Option Exercises and Stock Vested During Fiscal 2020

The following table shows information regarding (i) stock options exercised during fiscal 2020 by the NEOs, including the total number of shares acquired upon exercise and the aggregate value realized before payment of applicable withholding tax and brokerage commissions and (ii) the value received from the vesting of restricted stock units and restricted stock in fiscal 2020 for the NEOs.

 

    Option Awards Stock Awards
  Name

Number of Shares

 Acquired on Exercise
(#)

Value Realized
on Exercise
($)

Number of Shares

 Acquired on Vesting
(#)

Value Realized
on Vesting
($)
  Douglas Lebda - - 23,804 6,211,654
  Neil Salvage 40,269 5,455,866 6,327 2,157,380
  J.D. Moriarty - - 7,497 2,143,086
  Jill Olmstead - - 1,648 454,551
  Sushil Sharma 1,688 208,669 11,783 3,850,726

For option awards, the value realized equals the aggregate fair market value of the common stock acquired on the date of exercise of the options minus the aggregate exercise price. For stock awards, the value realized equals the aggregate fair market value of our common stock based on the closing price of our shares on the applicable date of vesting.

Pension Benefits

We do not maintain any defined benefit pension plans for our NEOs.

Non-Qualified Deferred Compensation

None of our NEOs participate in our deferred compensation plan.

 

53 LENDINGTREE 2021 Proxy Statement | Executive Compensation Tables

 

 

Table of Contents

 

Potential Payments Upon Termination of Employment or Change in Control

PAYMENTS MADE UPON RESIGNATION OR TERMINATION FOR CAUSE, DEATH OR DISABILITY

If an NEO resigns or his/her employment is terminated by us for cause, the NEO will be entitled only to any accrued and unpaid salary and vested benefits and no severance.

Upon termination of his employment due to death or disability, Mr. Lebda is entitled to additional base salary payments through the end of the month in which such termination occurs.

In addition, equity awards held by the NEOs will become fully vested upon termination of employment due to death or disability.

PAYMENTS MADE UPON INVOLUNTARY TERMINATION BY LENDINGTREE WITHOUT CAUSE OR FOR GOOD REASON BY NEO OR A CHANGE IN CONTROL OF LENDINGTREE

If an NEO who (i) is party to an employment (or offer letter) agreement is involuntarily terminated either without cause by us (or by the NEO due to a specified good reason) or (ii) participates in the Executive Severance Pay Plan, then such NEO may be entitled to severance benefits, as set forth in the table below.

In each case, receipt of severance benefits is conditioned on the NEO providing a release of claims, compliance with customary confidentiality and inventions assignment covenants and, in Mr. Lebda’s case, compliance with non-competition and customer and employee non-solicitation restrictions during employment and for twenty-four months thereafter and, in the other NEOs’ case, compliance with non-competition and customer non-solicitation restrictions during employment and for twenty-four months thereafter, employee non-solicitation restrictions during employment and for eighteen months thereafter and contractor, lender, supplier and vendor non-solicitation restrictions during employment and for twelve months thereafter.

HYPOTHETICAL POTENTIAL PAYMENT ESTIMATES

The table below provides estimates for compensation payable to each NEO under hypothetical termination of employment and change in control scenarios under our compensatory arrangements other than nondiscriminatory arrangements generally available to salaried employees. If any such NEO resigns without “Good Reason” or is terminated by us for “Cause” (as defined for each NEO in the table below), such NEO will be entitled only to any accrued and unpaid salary and vested benefits and no severance benefits.

The amounts shown in the table are estimates and assume the hypothetical involuntary termination or change in control occurred on December 31, 2020, the last day of fiscal 2020, applying the provisions of the contractual agreements that were in effect as of such date. Due to the number of factors and assumptions that can affect the nature and amount of any benefits provided upon the events discussed below, any amounts paid or distributed upon an actual event may (and likely will) differ.

For purposes of the hypothetical payment estimates shown in the table below, some of the other important assumptions were:

annual base salary as of December 31, 2020;
severance benefits as provided under the NEO’s employment agreement, change in control letter, or Executive Severance Pay Plan;
cash out of all unvested equity compensation awards (for which vesting is accelerated on December 31, 2020) at their intrinsic value on December 31, 2020;
December 31, 2020 per share closing price of $273.79 (last trading day of fiscal 2020);
no severance benefits are offset by mitigation; and
NEOs comply with all conditions to obtaining severance benefits including providing release of claims.

 

Executive Compensation Tables | LENDINGTREE 2021 Proxy Statement 54

 

 

Table of Contents

 

Name   Change in Control
Without
Involuntary
Termination (1)
    Involuntary
Termination (Without
Cause or for Good
Reason) Outside of
Change in
Control
Protection
Period (2)(3)
    Involuntary
Termination
(Without Cause or
for Good Reason)
Within 12 Months
(or 24 months,
in Mr. Lebda's
case)
of a Change in
Control (1)(2)(3)
    Death or
Disability
 (4) 
 
Douglas Lebda                                
Cash Severance   $     $ 2,625,000     $ 4,312,500     $  
Continuation of Health Insurance Benefits           23,125       23,125        
Acceleration of Vesting of Equity Awards     57,929,840       57,929,840       57,929,840       57,929,840  
Total   $ 57,929,840     $ 60,577,965     $ 62,265,465     $ 57,929,840  
Neil Salvage                                
Cash Severance   $     $ 450,000     $ 2,250,000     $  
Continuation of Health Insurance Benefits           20,822       20,822        
Acceleration of Vesting of Equity Awards     3,232,565       415,066       3,232,565       2,611,135  
Total   $ 3,232,565     $ 885,888     $ 5,503,387     $ 2,611,135  
J.D. Moriarty                                
Cash Severance   $     $ 430,000     $ 1,827,500     $  
Continuation of Health Insurance Benefits           22,574       22,574        
Acceleration of Vesting of Equity Awards     2,974,182       396,174       2,974,182       2,454,527  
Total   $ 2,974,182     $ 848,748     $ 4,824,256     $ 2,454,527  
Jill Olmstead                                
Cash Severance   $     $ 375,000     $ 1,425,000     $  
Continuation of Health Insurance Benefits           18,284       18,284        
Acceleration of Vesting of Equity Awards     3,386,167       1,022,629       3,386,167       2,703,676  
Total   $ 3,386,167     $ 1,415,913     $ 4,829,451     $ 2,703,676  
Sushil Sharma                                
Cash Severance   $     $ 325,000     $ 1,137,500     $  
Continuation of Health Insurance Benefits           22,574       28,218        
Acceleration of Vesting of Equity Awards     1,191,699       860,687       1,191,699       1,040,950  
Total   $ 1,191,699     $ 1,208,261     $ 2,357,417     $ 1,040,950  
(1) For Mr. Lebda, a “Change of Control” results when: (i) any person or entity, other than Mr. Lebda or persons or entities having beneficial ownership of securities of LendingTree also beneficially owned by Mr. Lebda, becomes a beneficial owner, directly or indirectly, of securities of LendingTree representing fifty percent or more of the total voting power of all of LendingTree’s then outstanding voting securities, excluding such event occurring via the acquisition by such person or entity of beneficial ownership of securities from, or via the sharing of beneficial ownership with, Mr. Lebda’s beneficially-owned entities, (ii) a merger or consolidation of LendingTree in which LendingTree’s voting securities immediately prior to the merger or consolidation do not represent, or are not converted into securities that represent, a majority of the voting power of all voting securities of the surviving entity immediately after the merger or consolidation, or (iii) a sale of all or substantially all of the assets of LendingTree or a liquidation or dissolution of LendingTree.

For Messrs. Salvage, Moriarty and Ms. Olmstead, a “Change of Control” means: (i) a transaction in which any person or entity who is not a controlling stockholder becomes a beneficial owner, directly or indirectly, of securities of LendingTree representing fifty percent or more of the total voting power of all of LendingTree’s then outstanding voting securities, (ii) a merger or consolidation of LendingTree in which LendingTree’s voting securities immediately prior to the merger or consolidation do not represent, or are not converted into securities that represent, a majority of the voting power of all voting securities of the surviving entity immediately after the merger or consolidation, or (iii) a sale of all or substantially all of the assets of LendingTree or a liquidation or dissolution of LendingTree.

For Mr. Sharma, a “Change of Control” means: (i) the acquisition by any individual, entity or group, other than LendingTree, of beneficial ownership of equity securities of LendingTree representing fifty percent or more of the total voting power of all of LendingTree’s then outstanding voting securities; (ii) individuals who, as of the approval date of the 2008 Stock Plan, constitute the Board of Directors (the “Incumbent Directors”) cease for any reason to constitute at least a majority of the Board of Directors of LendingTree; provided, however, that any individual becoming a director subsequent to the approval date of the 2008 Stock Plan, whose election, or nomination for election by the LendingTree’s stockholders, was approved by a vote of at least a majority of the Incumbent Directors at such time shall become an Incumbent Director, but excluding any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a person other than the Board of Directors, (iii) a reorganization, merger, consolidation, sale or other disposition of all or substantially all of the assets of the LendingTree, the purchase of assets or stock of another entity or other similar corporate transaction (a “Business Combination”), in each case, unless immediately following such Business Combination, (A) more than fifty percent of the resulting voting power resides in outstanding voting securities retained by the LendingTree stockholders in the Business Combination and/or voting securities received by such stockholders in the Business Combination on account of outstanding voting securities, and (B) at least a majority of the members of the Board of Directors of the entity resulting from such Business Combination were Incumbent Directors at the time of the initial agreement, or action of the Board of Directors, providing for such Business Combination, or (iv) consummation of a complete liquidation or dissolution of LendingTree.

 

55 LENDINGTREE 2021 Proxy Statement | Executive Compensation Tables

 

 

Table of Contents

 

(2) For Mr. Lebda, “Cause” means: (a) the plea of guilty or nolo contendere to, or conviction for, a felony offense, provided that (i) after indictment, LendingTree may suspend Mr. Lebda from the rendition of services, but without limiting or modifying in any other way LendingTree’s obligations to Mr. Lebda under his employment agreement, and (ii) Mr. Lebda’s employment will be immediately reinstated if the indictment is dismissed or otherwise dropped and there is not otherwise grounds to terminate his employment for Cause; (b) a material breach by Mr. Lebda of a fiduciary duty owed to LendingTree; (c) a material breach by Mr. Lebda of any of the restrictive covenants made by him in his employment agreement; or (d) the willful or gross neglect by Mr. Lebda of the material duties required by his employment agreement.

For Messrs. Salvage, Moriarty and Ms. Olmstead, “Cause” is defined as: (i) fraud, dishonesty, theft, embezzlement; misconduct by the NEO that is (or could reasonably be expected to be) injurious to LendingTree or any of its affiliates; (ii) conviction of, or entry of a plea of guilty or nolo contendere to, a crime that constitutes a felony or crime involving moral turpitude; competition with LendingTree or any of its affiliates; (iii) unauthorized use of any trade secrets or confidential information of LendingTree or any of its affiliates; (iv) a material violation of any policy, code, or standard of ethics applicable to the NEO; (v) a material breach of the NEO’s fiduciary duties; excessive and unexcused absenteeism unrelated to a disability; following written notice and a reasonable opportunity to cure, gross neglect by the NEO of the duties assigned to the NEO; or (vi) the NEO’s failure or refusal to cooperate in any investigation involving LendingTree.

For Mr. Sharma, “Cause” means, as determined in the sole discretion of LendingTree, the willful or gross neglect by the executive of the material duties required by the Mr. Sharma’s employment with LendingTree or any misconduct deemed by LendingTree to be detrimental to the interest of LendingTree or any of its divisions, subsidiaries, affiliates or employees. For the purposes of this plan, such misconduct includes, but is not limited to (i) embezzlement, fraud, or theft; (ii) conviction of, or entry of a plea of guilty or nolo contendere to, a crime that constitutes a felony or other crime involving moral turpitude; (iii) breach of fiduciary duty; (iv) personal dishonesty that is, or could reasonably be expected to be, materially injurious to LendingTree; (v) a violation of any applicable policy, code, or standard of ethics of LendingTree; (vi) excessive and unexcused absenteeism unrelated to a disability; (vii) competing with LendingTree while employed by LendingTree; and (viii) violating the terms of any restrictive covenant with LendingTree, including without limitation any non-compete, non-solicitation, or confidentiality obligation.

(3) For Mr. Lebda, “Good Reason” means the occurrence of any of the following without Mr. Lebda’s written consent: (i) a material adverse change in his title at LendingTree, duties for LendingTree, operational authorities or reporting responsibilities as they relate to his position as Chairman and Chief Executive Officer of LendingTree from those in effect immediately following the date of his agreement, excluding for this purpose any such change that is an isolated and inadvertent action not taken in bad faith and that is remedied by LendingTree promptly after receipt of notice thereof given by Mr. Lebda (and it will be considered a material adverse change if immediately following a Change of Control Mr. Lebda is not the chief executive officer of the ultimate parent entity of the combined or surviving entity resulting from such Change of Control), (ii) a material reduction in his annual base salary, (iii) a relocation of his principal place of business more than 25 miles from the Charlotte, North Carolina metropolitan area, or (iv) a material breach by LendingTree of his agreement, excluding for this purpose any such action that is an isolated and inadvertent action not taken in bad faith and that is remedied by LendingTree promptly after receipt of notice thereof given by Mr. Lebda.

For Messrs. Salvage, Moriarty and Ms. Olmstead, “Good Reason” is generally defined as the occurrence of any of the following without the NEO’s written consent: (i) material adverse change in the office to which the NEO reports, subject to specified conditions; (ii) material reduction in the NEO’s annual base salary; (iii) or relocation of the NEO’s principal place of business more than fifty miles from the location specified in the NEO’s employment agreement.

Mr. Sharma is not entitled to severance on a termination for “Good Reason” pursuant to the terms of the Executive Severance Pay Plan.

(4) For Mr. Lebda, “Disability” means a condition, resulting from bodily injury or disease, that renders, and for a six consecutive month period has rendered, him unable to perform substantially the duties pertaining to his employment with LendingTree. A return to work of less than 14 consecutive days would not be considered an interruption in his six consecutive months of disability. Disability will be determined by LendingTree on the basis of medical evidence satisfactory to LendingTree.

For Messrs. Salvage, Moriarty and Ms. Olmstead, “Disability” means a medical condition, whether physical or mental, that renders, and for a six consecutive month period, the NEO unable to perform the essential functions of the NEO’s position, with or without reasonable accommodation. A return to work of less than 14 consecutive days would not be considered an interruption in the NEO’s six consecutive months of disability. Disability will be determined by LendingTree on the basis of medical evidence satisfactory to LendingTree.

 

Executive Compensation Tables | LENDINGTREE 2021 Proxy Statement 56

 

 

Table of Contents

 

CEO Pay Ratio

As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, we are providing the following information about the relationship of the annual total compensation of our employees and the annual total compensation of our CEO, Mr. Douglas Lebda. The CEO pay ratio is a reasonable estimate calculated in a manner consistent with SEC rules based on our payroll and employment records and the methodology described below.

 

To identify the median employee in fiscal 2020, we determined the pay ratio employee population to be persons employed by LendingTree and its subsidiaries on a full-time, part-time, seasonal or temporary basis as of December 1, 2020, including those from our acquisitions in fiscal 2020. We did not include contractors or leased workers who provide services but are not employed by us, and whose compensation is determined by an unaffiliated third party. As a result, we determined that our pay ratio employee population is 1,178 employees.

 

In calculating the compensation for the pay ratio employee population, we utilized annual compensation, overtime paid, commissions paid, annual cash incentive, annual equity grants, 401(k) matching and allowances. We included annual equity grants because we grant equity to a large percentage of our employee population and therefore believe it is applicable to the CEO pay ratio. We annualized the compensation for permanent employees who were hired between January 1, 2020 and December 31, 2020.

 

Using this measure, we identified a “median employee” who had an annual total compensation in fiscal 2020 of $107,322 as determined under the same rules used to determine Mr. Lebda’s total compensation for fiscal 2019. The annual compensation in fiscal 2020 for our CEO was $52,023,140. Based on this information, the CEO pay ratio of the total annual compensation of our CEO to the total annual compensation of our median employee for fiscal 2020 is 485:1.

 

The SEC rules for identifying the median compensated employee and calculating the CEO pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their compensation practices. As such, the CEO pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies may have different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.

 

57 LENDINGTREE 2021 Proxy Statement | Executive Compensation Tables

 

 

Table of Contents

 

 

We are asking our stockholders to approve an amendment and restatement of the Sixth Amended and Restated 2008 LendingTree, Inc. Stock and Annual Incentive Plan (the “Stock Plan”). On April 29, 2021, the Board unanimously approved the Stock Plan, subject to the approval of our stockholders. As so amended and restated, the Stock Plan will be known as the “Seventh Amended and Restated LendingTree, Inc. 2008 Stock Plan.”

 

The amendment and restatement provides for: 

 

· a 600,000 share increase to the number of shares of common stock authorized for issuance under the Stock Plan which is a net increase of 141,528 shares after factoring in the cancellation of the 458,472 shares under the 2017 Inducement Grant Plan that was terminated on April 21, 2021;

 

· an increase to the number of shares of common stock that may be issued under the Stock Plan as “incentive stock options” under Section 422 of the Internal Revenue Code such that such total amount will increase from 4,583,333 shares to 5,183,333 shares;

 

· a minimum vesting period of one year that applies to all awards, other than for awards of under up to 5% of the share pool; and

 

· express prohibitions on payment of dividends on unvested awards.

 

As of April 12, 2021, stock options to purchase 1,990,414 shares, restricted stock units covering 261,735 shares and 62,398 shares of restricted stock were all outstanding under the Stock Plan, and only 99,915 shares remained available for future equity grants under the Stock Plan. We are requesting approval of this amendment and restatement because, based on historical and projected grant rates, the remaining unissued shares in the Stock Plan will be insufficient to cover our anticipated future equity compensation grants.

 

We believe that our compensation programs should be variable and tied to individual and corporate performance to further align the interests of our executive officers and employees with those of our stockholders and should advance our pay-for-performance philosophy. The Compensation Committee believes placing a greater emphasis on incentive arrangements and equity compensation will result in a greater proportion of the overall compensation of our executive officers and employees reflecting performance. Additionally, our ability to provide long-term incentives in the form of equity compensation fosters an ownership mentality that drives optimal decision-making by our executive officers and employees for the long-term health and profitability of LendingTree. As such, we believe it is critical that we continue to have the ability to issue equity awards under the Stock Plan.

 

When deciding if and by how much to increase the number of shares available for grant under the Stock Plan, the Compensation Committee considered our gross burn rate for the past three years, along with the estimated dilutive impact of the share increase and similar statistics for a peer group of companies. Burn rate is the rate at which a company is granting equity compensation share awards, with the gross number of such shares awarded expressed as a percentage of its weighted average shares outstanding. Our three-year average annual gross burn rate for fiscal years 2020, 2019, and 2018 was 2.92%, as calculated below. This burn rate percentage placed us around the median of our peer group. Our future burn rates are expected to be in the range of our historical three-year average and the 2021 burn rate is expected to be below median.

 

  Equity Compensation Usage
  2020 2019 2018 3-Year Average
Options 440,351 59,951 122,075 207,459
RSUs & Target PSUs 138,418 62,248 296,570 165,745
Gross Grants 578,769 122,199 418,645 373,204
Gross Usage (% Outstanding) 4.45% 0.95% 3.35% 2.92%

Weighted Average Shares Outstanding (in thousands

13,007 12,834 12,504 12,782

 

The Compensation Committee and the Board believe that adding an additional 600,000 shares to the Stock Plan is necessary in order to continue to provide appropriate equity incentives that encourage long-term retention and performance of our executive officers and employees. This increased amount is intended to manage our equity grant requirements for approximately the next two years, though the amount of time will vary depending on our future stock price and other variables. We consider this estimated two-year pool of shares to be important from a compensation planning perspective.

 

Approval of Amendment and Restatement of 2008 Stock and Annual Incentive Plan | LENDINGTREE 2021 Proxy Statement 58

 

 

Table of Contents

 

If the amendment and restatement is not approved, it could be detrimental to our goals of attracting, retaining and motivating our executive officers and employees and aligning their interests with the interests of our stockholders. In that instance, we would need to review and revise our compensation practices to be more cash-based in order to retain our key executive officers and employees. If we adopted alternative compensation programs that were more cash-based, we believe that the level of cash compensation required to offset the lack of availability of equity grants could result in (i) an increase in our overall compensation expense, which would be detrimental to our future operating results, (ii) a decrease in our reported adjusted earnings before interest, taxes, depreciation and amortization, a non-GAAP measure that includes cash compensation expense but excludes non-cash compensation expense, and (iii) a decrease in our cash flow, which would reduce cash available to be invested in operations and growth and/or returned to stockholders.

 

Therefore, we are asking our stockholders to approve the amendment and restatement of the Stock Plan, which is attached as Appendix C to this proxy statement. The proposal requires the affirmative vote of a majority of the total number of votes cast at this annual meeting by the holders of shares of our common stock. To the extent there is any discrepancy between the terms of this proposal and that of the Stock Plan itself, the terms of the Stock Plan will prevail and govern. If this Proposal 3 is not approved, then the pre-amended Sixth Amended and Restated 2008 Stock and Annual Incentive Plan will remain in full force and effect.  

 

Below is a summary of the principal provisions of the Stock Plan. The summary is qualified by reference to the Stock Plan as set forth in Appendix C to this proxy statement.

Summary of the Stock Plan

 

The Stock Plan permits the discretionary award of incentive stock options (“ISOs”), nonqualified stock options (“NSOs”), stock appreciation rights (“SARs”), restricted stock, restricted stock units and other stock-based awards.

 

Stock Subject to the Stock Plan

 

After taking into account the proposed addition of 600,000 authorized shares to the Stock Plan, the Stock Plan authorizes a maximum issuance of up to 6,700,000 shares of common stock pursuant to new awards. However, as noted above, only 99,915 shares remained available for the issuance of new awards as of April 12, 2021. 

 

The following includes aggregated information regarding the overhang and dilution associated with the Stock Plan and the outstanding shares under our 2017 Inducement Grant Plan and the potential stockholder dilution that would result if the amendment and restatement of the Stock Plan is approved. As of December 31, 2020, LendingTree had:

 

· 13,124,875 shares of common stock outstanding;

 

· 251,492 shares of common stock subject to outstanding full-value awards (restricted stock units and performance stock units (at target)), which represented 1.6% of our share capital on a fully-diluted basis;

 

· 1,624,919 shares of common stock subject to outstanding stock options (at target) having an weighted average exercise price of $165.34 and a weighted average remaining term of 5.9 years, which represented 10.7% of our share capital on a fully-diluted basis; and

 

· 251,013 shares of common stock available for issuance under the Stock Plan, which represented 1.6% of our share capital on a fully-diluted basis.

 

As of December 31, 2020, the total number of shares of common stock subject to outstanding awards under the Stock Plan (1,876,411 shares), plus the total number of shares available for issuance for future awards under the Stock Plan (251,013 shares), represented a fully-diluted overhang percentage of 13.9% (i.e., the potential dilution of our stockholders by awards granted or may be granted under the Stock Plan). 

 

If the amendment and restatement of the Stock Plan is approved, the total number of shares of common stock subject to outstanding awards as of December 31, 2020 (1,876,411 shares), plus the shares remaining available for future awards under the Stock Plan (251,013 shares), plus the proposed increase in the number of shares authorized for issuance under the Stock Plan (600,000 shares), would represent a fully-diluted overhang percentage of 17.2%. This excludes shares previously authorized under the 2017 Inducement Grant Plan, which was terminated on April 21, 2021. 

 

The shares of common stock subject to grant under the Stock Plan are to be made available from authorized but unissued shares or from treasury shares. To the extent that any stock award is forfeited, or any option or SAR terminates, expires or lapses without being exercised, or any award is settled for cash, the shares of common stock subject to the awards not delivered as a result thereof will again be available for use under the Stock Plan. If the exercise price of any option and/or the tax withholding obligations relating to any award are satisfied by delivering shares of common stock (by either actual delivery or by attestation), only the number of shares of common stock issued net of the shares of common stock delivered or attested to will be deemed delivered for purposes of the limits under the Stock Plan. To the extent any shares of common stock subject to an award are withheld to satisfy the exercise price (in the case of an option) and/or the tax withholding obligations

 

59 LENDINGTREE 2021 Proxy Statement | Approval of Amendment and Restatement of 2008 Stock and Annual Incentive Plan

 

 

Table of Contents

 

relating to the award, the shares of common stock will not be deemed to have been delivered for purposes of the limits under the Stock Plan. Any dividend equivalents distributed under the Stock Plan will count against these maximum share limits.

 

The Stock Plan provides that, in the event of a merger, consolidation, amalgamation, acquisition of property or shares, stock rights offering, liquidation, disaffiliation or other similar event, or a stock dividend, stock split, reverse stock split, separation, spin-off, reorganization, extraordinary dividend of cash or other property, share combination, recapitalization or other similar event affecting our capital structure, the Compensation Committee or our Board may make any substitutions or adjustments as it deems appropriate and equitable to (1) the aggregate number and kind of shares or other securities reserved for issuance and delivery under the Stock Plan, (2) the various maximum limitations set forth in the Stock Plan, (3) the number and kind of shares or other securities subject to outstanding awards, (4) the exercise price of outstanding options and stock appreciation rights and (5) the performance goals applicable to any outstanding awards.

 

Administration

 

The Stock Plan is administered by the Compensation Committee or another committee of our Board as it may from time to time designate. Among other things, the Compensation Committee selects individuals to whom awards may be granted, determines the type of award as well as the number of shares of common stock to be covered by each award, determines the terms and conditions of any awards, including performance goals (if any) and their degree of satisfaction and interprets the terms and provisions of the Stock Plan and any stock award issued under the Stock Plan. Determinations of the Compensation Committee are final, binding and conclusive.

 

Eligibility

 

Persons who serve or agree to serve as officers, employees, non-employee directors or consultants of LendingTree or its subsidiaries and affiliates are eligible to be granted awards under the Stock Plan. As of April 12, 2021, there were seven non-employee directors, six executive officers and approximately 1,280 employees other than executive officers and three non-employee consultants who were eligible to receive awards under the Stock Plan.

  

Types of Awards

 

A summary of the types of equity awards that can be granted under the Stock Plan is set forth below. Awards issued under the Stock Plan are evidenced by a written agreement which set forth the terms and conditions of the award.

 

Stock Options and Stock Appreciation Rights. Stock options granted under the Stock Plan may be either ISOs or NSOs. SARs granted under the Stock Plan may either be granted alone or in tandem with a stock option. The maximum number of shares that may be issued pursuant to the exercise of ISOs granted under the Stock Plan is 5,183,333 shares. The exercise price of options and SARs cannot be less than 100% of the fair market value of the stock underlying the options or SARs on the date of grant. Optionees may pay the exercise price in cash or, if approved by the Compensation Committee, in common stock (valued at its fair market value on the date of exercise) or a combination thereof, or by “cashless exercise” through a broker or by withholding shares otherwise receivable on exercise. The term of options and SARs is determined by the Compensation Committee but may not have a term longer than ten years (or, for ISOs granted to participants owning more than 10% of voting power of our stock, five years) from the date of grant. The Compensation Committee determines the vesting and exercise schedule of options and SARs, and the extent to which they will be exercisable after the award holder’s employment terminates. Unless otherwise determined by the Committee or set forth in the applicable award agreement, unvested options and SARs terminate upon the termination of employment, and vested options and SARs will remain exercisable for one year after the award holder’s death, disability or retirement, or three months after the award holder’s termination for any other reason other than cause. Vested options and SARs terminate immediately upon the awardee’s termination for cause (as defined in the Stock Plan). Stock options and SARs are transferable only by will or by the laws of descent and distribution or, in the case of NSOs or SARs, pursuant to a qualified domestic relations order or as otherwise expressly permitted by the Compensation Committee including, if so permitted, pursuant to a transfer to the participant’s family members or to a charitable organization.

 

Restricted Stock. Restricted stock may be granted with restriction periods as the Compensation Committee may designate. The Compensation Committee may provide at the time of grant that the vesting of restricted stock is contingent upon the achievement of applicable performance goals and/or continued service.

 

The terms and conditions of restricted stock awards (including any applicable performance goals) need not be the same with respect to each participant. Restricted stock may not be sold, assigned, transferred, pledged or otherwise encumbered, and is forfeited upon termination of employment, unless otherwise provided by the Compensation Committee. Other than restrictions on transfer and any other restrictions the Compensation Committee may impose, the participant has all the rights of a stockholder with respect to the restricted stock award, including the right to vote the shares and receive cash dividends unless otherwise provided in the participant’s award agreement; provided that dividends are only payable on restricted stock awards to the extent the underlying stock has vested. If so determined by the Committee Compensation in the applicable award agreement and subject to sufficient share reserve under the Stock Plan, cash dividends payable on restricted stock awards will be automatically reinvested in additional shares of restricted stock that are subject to the same vesting and forfeiture conditions as the underlying shares of restricted stock. 

 

Restricted Stock Units. The Compensation Committee may grant restricted stock units to be settled in cash or shares of common stock, conditioned upon continued service and/or the attainment of performance goals determined by the Compensation Committee. The terms and conditions of restricted stock unit awards (including any performance goals) need not be the same with respect to each participant. The Compensation Committee will determine whether, to what extent and on what terms and conditions each participant receiving restricted stock

 

Approval of Amendment and Restatement of 2008 Stock and Annual Incentive Plan | LENDINGTREE 2021 Proxy Statement 60

 

 

Table of Contents

 

units will be entitled to receive current or deferred payments of cash, common stock or other property corresponding to dividends payable on our common stock; provided that any such payment of dividends will be subject to the vesting of the underlying restricted stock units. Holders of restricted stock units are not entitled to any voting rights with respect to the restricted stock units.

 

Other Stock-Based Awards. Other awards of common stock and other awards that are valued in whole or in part by reference to, or are otherwise based upon, common stock, including, unrestricted stock, dividend equivalents and convertible debentures, may be granted under the Stock Plan. 

 

Minimum Vesting Requirement 

 

Awards will vest over a period of not less than one year following the grant date; provided, however, that the Committee may grant awards that are not subject to this minimum vesting requirement with respect to 5% or less of the shares available for issuance under the Stock Plan. Any awards that are accelerated upon a termination of employment or a change in control of LendingTree will not count against this 5%. 

 

No Repricing 

 

In no event may any option or SAR granted under the Stock Plan be amended, other than in the event of certain extraordinary corporate transactions or other transactions affecting our capital structure, to decrease the exercise price thereof, be cancelled in conjunction with the grant of any new option or SAR with a lower exercise price or otherwise be subject to any action that would be treated, for accounting purposes, as a “repricing” of the option or SAR, unless the amendment, cancellation, or action is approved by our stockholders. 

 

Recoupment of Compensation 

 

Under the Stock Plan, we may cause the cancellation of any award, request reimbursement of any award by a participant and effect any other right of recoupment of equity or other compensation provided under the Stock Plan in accordance with our policies and/or applicable law. In addition, a participant in the Stock Plan may be required to repay us certain previously paid compensation, whether provided under the Stock Plan or an award agreement under the Stock Plan, in accordance with any recoupment policy as may be adopted and/or modified by us from time to time. Please refer to page 37 of the proxy statement for a description of our current executive compensation recovery policy. 

 

Change in Control 

 

In the event that we are a party to a merger or other reorganization or similar transaction involving a change in control of LendingTree, Inc., the Compensation Committee has the discretion to determine the treatment of awards granted under the Stock Plan, including providing for the acceleration of the awards upon the occurrence of the change in control and/or upon a qualifying termination of employment following the change in control.

 

Annual Limit on Total Compensation Paid to Non-Employee Directors 

 

With respect to our non-employee directors, the Stock Plan provides that no non-employee director can receive total compensation in any calendar year that in the aggregate exceeds $640,000. Such total compensation limit includes all cash compensation such as annual retainers and other fees (whether or not granted under the Stock Plan), plus the aggregate grant date fair market value of all awards issued under the Stock Plan (or under any other incentive plan). For the avoidance of doubt, any compensation that is deferred will be counted toward this total compensation limit in the calendar year in which the compensation is vested, and not in any later calendar year when it is paid to the non-employee director. 

 

Withholding for Payment of Taxes 

 

The Stock Plan provides for the withholding and payment by a participant of any taxes required by applicable law. Subject to our approval, a participant may settle a withholding obligation with our common stock, including common stock that is a part of the award giving rise to the withholding obligation. We have the right to deduct any applicable taxes from any payment otherwise due to a participant. To the extent necessary to avoid liability-classification of an award (or other adverse accounting treatment) under applicable financial accounting rules, the amount of such tax withholding shall not exceed the maximum statutory federal, state or local income tax rates applicable to a participant with respect to the award on the date that the amount of tax to be withheld is to be determined. 

 

Duration, Amendment and Termination 

 

The Stock Plan may be amended, altered or discontinued by our Board, but no amendment, alteration or discontinuance may materially impair the rights of a participant with respect to a previously granted award without the participant’s consent. Amendments to the Stock Plan require stockholder approval to the extent the approval is required by law or agreement. The Stock Plan will terminate on April 25, 2027 unless earlier terminated in accordance with the terms of the Stock Plan. 

 

61 LENDINGTREE 2021 Proxy Statement | Approval of Amendment and Restatement of 2008 Stock and Annual Incentive Plan

 

 

Table of Contents

 

Governing Law

 

The Stock Plan is governed by the laws of the State of Delaware (which is the state of our incorporation), without reference to principles of conflict of laws. 

 

Existing Plan Benefits 

 

The following table sets forth the number of shares subject to awards granted under the Stock Plan through April 12, 2021. These share numbers do not take into effect awards that have been cancelled or, with respect to options, expired unexercised. 

 

Name and Position Number of Shares
Douglas Lebda, Chairman and Chief Executive Officer 4,133,227  
J.D. Moriarty, Chief Financial Officer 101,317  
Neil Salvage, President 231,080  
Jill Olmstead, Chief Human Resources Officer 42,747  
Sushil Sharma, Chief Product Officer 43,722  
Megan Greuling, Spouse of Chairman and Chief Executive Officer 16,468  
Gabriel Dalporto, Director 211,498  
Thomas M. Davidson, Jr., Director 2,707  
Robin Henderson, Director 5,955  
Steven Ozonian, Director 66,200  
Saras Sarasvathy, Director 4,567  
G. Kennedy Thompson, Director 5,006  
Jennifer Witz, Director 925  
All current executive officers as a group (6 persons) (1)(2) 4,557,705  
All current non-employee directors as a group (7 persons) 296,858  
Non-executive officer employee group 4,233,025  

 

(1) At maximum performance.

 

(2) Includes holdings of Lisa Young, General Counsel, who became an executive officer on January 4, 2021.

 

New Plan Benefits

 

All awards to directors, executive officers, employees and consultants are made at the discretion of our Compensation Committee. No awards will be granted under the Stock Plan with respect to our requested share reserve increase prior to approval of this amendment and restatement by the stockholders of the Company. Awards under the Stock Plan will be granted at the discretion of the Committee. In addition, benefits under the Stock Plan will depend on a number of factors, including the fair market value of the Company’s common stock on future dates and actual Company performance against performance goals established with respect to performance awards. As a result, the benefits and amounts that will be received or allocated under the Stock Plan as amended and restated are not determinable at this time. 

 

Equity Compensation Plan Information

 

The following table contains information about securities authorized for issuance under our equity compensation plans as of December 31, 2020.

 

Plan Category  

Number of Securities to

  Be Issued Upon
Exercise

of Outstanding Options,

Warrants and Rights

(#)(1)

 

Weighted Average

Exercise Price of
Outstanding

Options, Warrants and
Rights

($)(1)

 

Number of Securities

Remaining Available for

Future Issuance Under
Equity
Compensation

Plans (Excluding

Securities Reflected in
the First Column)

  (#)(1)

Equity compensation plans approved by security holders            
2008 Stock and Annual Incentive Plan   2,354,401   181.17   251,013
Equity compensation plans not approved by security holders            
2017 Inducement Grant Plan(2)   9,021     457,761
Total   2,363,422   181.17   708,774
           

 

Approval of Amendment and Restatement of 2008 Stock and Annual Incentive Plan | LENDINGTREE 2021 Proxy Statement 62

 

 

Table of Contents

 

(1) The weighted average exercise price does not take into account the shares subject to outstanding time-based vesting restricted stock units, which settle on a one share for one unit basis.

 

(2) Reflects the 2017 Inducement Grant Plan, which provides for the issuance of up to 500,000 shares of LendingTree’s common stock, issuable as inducements to any prospective employee who was not previously an employee or director of LendingTree or following a bona fide period of non-employment. The plan was exempt from stockholder approval requirements as an employment inducement grant plan under applicable Nasdaq listing standards. The 2017 Inducement Grant Plan was terminated on April 21, 2021, so no future awards may be made under the plan.

 

(3) Includes grants of performance-based equity awards at maximum performance.

 

Certain Federal Income Tax Information

 

The following is a general summary under current law of certain United States federal income tax consequences to LendingTree and participants who are citizens or individual residents of the United States relating to awards granted under the Stock Plan. This summary deals with the general tax principles that apply to such awards and is provided only for general information. Certain kinds of taxes, such as foreign taxes, state and local income taxes and payroll taxes, are not discussed. This summary is not tax advice, and it does not discuss all aspects of federal taxation that may be relevant to LendingTree and participants. Accordingly, we advise participants to consult with a tax advisor regarding the tax implications of their awards under the Stock Plan. 

 

Nonqualified Stock Options. Upon the grant of an NSO, the optionee will not recognize any taxable income, and LendingTree will not be entitled to a deduction. Upon the exercise of an NSO, the excess of the fair market value of the shares acquired on the exercise of the NSO over the exercise price (the “spread”) will constitute compensation taxable to the optionee as ordinary income.

 

ISOs. An optionee will not recognize taxable income on the grant or exercise of an ISO. However, the spread at exercise will constitute an item includible in alternative minimum taxable income, and, thereby, may subject the optionee to the alternative minimum tax (or a greater amount of alternative minimum tax). The alternative minimum tax may be payable even though the optionee receives no cash upon the exercise of the ISO with which to pay the tax.

 

Upon the disposition of shares of stock acquired pursuant to the exercise of an ISO after satisfaction of a holding period which ends on the later of (i) two years from the date of grant of the ISO or (ii) one year after the transfer of the shares to the optionee, generally the optionee will recognize long-term capital gain or loss, as the case may be, measured by the difference between the stock’s selling price and the exercise price. We are not entitled to any tax deduction by reason of the grant or exercise of an ISO, or by reason of a disposition of stock received upon exercise of an ISO if the ISO holding period is satisfied. If the optionee disposes of the shares of stock acquired pursuant to the exercise of an ISO before the expiration of the ISO holding period, then the optionee will generally recognize ordinary income (and we may be entitled to a tax deduction) equal to the lesser of (i) the excess of the fair market value over the exercise price of the shares on the date of exercise, or (ii) the excess of the amount realized on the disposition over the exercise price for the shares. Any remaining gain or loss will be long-term or short-term capital gain or loss depending on whether the optionee has held the shares for more than one year.

 

SARs. No taxable income is generally reportable when a SAR is granted to a participant. Upon exercise, the participant will recognize ordinary income in an amount equal to the amount of cash received plus the fair market value of any shares received. Any additional gain or loss recognized upon any later disposition of any shares received would be a short- or long-term capital gain or loss, depending on whether the shares had been held by the participant for more than one year.

 

Restricted Stock. A participant who receives an award of restricted stock does not generally recognize taxable income at the time of the award. Instead, the participant recognizes ordinary income in the first taxable year in which his or her interest in the shares becomes either: (A) freely transferable or (B) no longer subject to substantial risk of forfeiture. The amount of taxable income is equal to the fair market value of the shares less the cash, if any, paid for the shares.

 

A participant may elect to recognize income at the time of grant of restricted stock in an amount equal to the fair market value of the restricted stock (less any cash paid for the shares) on the date of the award. We receive a compensation expense deduction in an amount equal to the ordinary income recognized by the participant in the taxable year in which restrictions lapse (or in the taxable year of the award if, at that time, the participant had filed a timely election under Section 83(b) of the Internal Revenue Code to accelerate recognition of income).

 

Restricted Stock Units. No taxable income is generally reportable when unvested restricted stock units are granted to a participant. Upon settlement of restricted stock units which have vested, the participant will recognize ordinary income at the time(s) of settlement equal to the sum of the fair market value (on each settlement date) of any shares issued to the participant plus any cash received by the participant.

 

Other Awards. In the case of other stock awards, the participant would generally recognize ordinary income in an amount equal to any cash received and the fair market value of any shares received on the date of payment or delivery. In that taxable year, we would receive a federal income tax deduction in an amount equal to the ordinary income that the participant has recognized.

 

Income Tax Effects for the Company

 

We will generally be entitled to an income tax deduction in connection with an award under the Stock Plan in an amount equal to the ordinary income realized by a participant at the time the participant recognizes such income.

 

63 LENDINGTREE 2021 Proxy Statement | Approval of Amendment and Restatement of 2008 Stock and Annual Incentive Plan

 

 

Table of Contents

 

Registration

 

If our stockholders approve the Stock Plan, we plan to file a registration statement on a Form S-8 (and/or an amendment to our existing registration statement) with the SEC, as soon as reasonably practicable after such approval, to register the shares available for issuance under the Stock Plan.

 

The Board recommends that you vote FOR the approval of the amendment and restatement of the Sixth Amended and Restated LendingTree, Inc. 2008 Stock and Annual Incentive Plan.

 

Approval of Amendment and Restatement of 2008 Stock and Annual Incentive Plan | LENDINGTREE 2021 Proxy Statement 64

 

 

Table of Contents

 

 

The Audit Committee of our Board of Directors has appointed PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2021.

PricewaterhouseCoopers LLP was previously engaged on March 19, 2009 as our independent registered public accounting firm for the fiscal year ended December 31, 2009 and then reengaged on June 26, 2012 as our independent registered public accounting firm for the year ended December 31, 2012 and then, again, for all subsequent years through December 31, 2020.

Ratification of the appointment of our independent registered public accounting firm requires the affirmative vote of a majority of the total number of votes cast by the holders of shares of LendingTree common stock. If stockholders fail to ratify the selection of PricewaterhouseCoopers LLP as the independent registered public accounting firm for 2021, the Audit Committee will reconsider whether to retain that firm. Even if the selection is ratified, the Audit Committee may, in its discretion, direct the appointment of a different independent registered public accounting firm at any time during the year.

One or more representatives of PricewaterhouseCoopers LLP are expected to be present at the Annual Meeting and will have the opportunity to make a statement if they desire to do so. They are expected to be available to respond to appropriate questions submitted prior to the meeting.

The Aud