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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant
Filed by a Party other than the Registrant
Check the appropriate box:
Preliminary Proxy Statement
Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
Definitive Proxy Statement
Definitive Additional Materials
Soliciting Material Pursuant to §240.14a-11(c) or §240.14a-2
Dropbox, Inc.
(Name of Registrant as Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box):
No fee required.
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:
 
 
 
Fee paid previously with preliminary materials.
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:
 
 
 

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DROPBOX, INC.
1800 OWENS STREET
SAN FRANCISCO,
CALIFORNIA 94158
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
to be held at 9:00 am Pacific Time on Thursday, May 20, 2021
Dear Stockholders of Dropbox, Inc.:
We cordially invite you to attend the 2021 annual meeting of stockholders (the “Annual Meeting”) of Dropbox, Inc., a Delaware corporation, to be held on May 20, 2021 at 9:00 am Pacific Time. The Annual Meeting will be conducted virtually via live audio webcast. You will be able to attend the Annual Meeting virtually by visiting www.virtualshareholdermeeting.com/DBX2021, where you will be able to listen to the meeting live, submit questions and vote online.
Whether or not you attend the Annual Meeting, it is important that your shares be represented and voted at the meeting. Therefore, we urge you to promptly vote and submit your proxy via the Internet, by telephone or by mail.
We are holding the Annual Meeting for the following purposes, as more fully described in the accompanying proxy statement:
1.
To elect seven directors to serve until the next annual meeting of stockholders and until their successors are duly elected and qualified;
2.
To ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for our fiscal year ending December 31, 2021;
3.
To approve, on an advisory basis, the compensation of our named executive officers; and
4.
To transact such other business as may properly come before the Annual Meeting or any adjournments or postponements thereof.
Our board of directors has fixed the close of business on March 23, 2021 as the record date for the Annual Meeting. Stockholders of record on March 23, 2021 are entitled to notice of and to vote at the Annual Meeting. Further information regarding voting rights and the matters to be voted upon is presented in the accompanying proxy statement.
The accompanying proxy statement and our annual report can be accessed by visiting: www.proxyvote.com. You will be asked to enter the 16-digit control number located on your proxy card.
YOUR VOTE IS IMPORTANT. Whether or not you plan to attend the Annual Meeting, we urge you to submit your vote via the Internet, telephone, or mail as soon as possible to ensure your shares are represented. For additional instructions on voting by telephone or the Internet, please refer to your proxy card. Returning the proxy does not deprive you of your right to attend the Annual Meeting and to vote your shares at the Annual Meeting.
By order of the Board of Directors,

Andrew W. Houston
Chief Executive Officer, Co-Founder, and Chairman of the Board
San Francisco, California
April 6, 2021
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GENERAL INFORMATION
DROPBOX, INC.
PROXY STATEMENT
FOR THE 2021 ANNUAL MEETING OF STOCKHOLDERS
to be held at 9:00 am Pacific Time on Thursday,
May 20, 2021
This proxy statement and the enclosed form of proxy are furnished in connection with the solicitation of proxies by our board of directors for use at the 2021 annual meeting of stockholders of Dropbox, Inc., a Delaware corporation, and any postponements, adjournments or continuations thereof (the “Annual Meeting”). The Annual Meeting will be held on Thursday, May 20, 2021 at 9:00 am Pacific Time. The Annual Meeting will be conducted virtually via live audio webcast. You will be able to attend the Annual Meeting virtually by visiting www.virtualshareholdermeeting.com/DBX2021, where you will be able to listen to the meeting live, submit questions and vote online. The Notice of Internet Availability of Proxy Materials (the “Notice”) containing instructions on how to access this proxy statement and our annual report is first being mailed on or about April 6, 2021 to all stockholders entitled to vote at the Annual Meeting. The proxy materials and our 2020 annual report can be accessed by following the instructions in the Notice.
The information provided in the “question and answer” format below is for your convenience only and is merely a summary of the information contained in this proxy statement. You should read this entire proxy statement carefully. Information contained on, or that can be accessed through, our website is not intended to be incorporated by reference into this proxy statement and references to our website address in this proxy statement are inactive textual references only.
What matters am I voting on?
You are being asked to vote on:
the election of seven directors to serve until the next annual meeting of stockholders or until their successors are duly elected and qualified;
a proposal to ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for our fiscal year ending December 31, 2021;
a proposal to approve, on an advisory basis, the compensation of our named executive officers; and
any other business as may properly come before the Annual Meeting.
How does the board of directors recommend I vote on these proposals?
Our board of directors recommends a vote:
“FOR” the election of each director nominee named in this proxy statement;
“FOR” the ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for our fiscal year ending December 31, 2021; and
“FOR” the approval, on an advisory basis, of the compensation of our named executive officers.
How many votes are needed for approval of each proposal?
Proposal No. 1: Each director is elected by a plurality of the votes of the shares present virtually or represented by proxy at the meeting and entitled to vote on the election of directors at the Annual Meeting. Abstentions and broker non-votes will have no effect on the outcome of the vote. “Plurality” means that the seven nominees who receive the largest number of votes cast “for” such nominees are elected as directors. As a result, any shares not voted “for” a particular nominee (whether as a result of a withhold vote or a broker non-vote) will not be counted in such nominee’s favor and will have no effect on the outcome of the election. You may vote “For” or “Withhold” on each of the nominees for election as a director.
Proposal No. 2: The ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for our fiscal year ending December 31, 2021, requires the affirmative “For” vote of a majority of the voting power of the shares of
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our common stock present virtually or represented by proxy at the Annual Meeting and entitled to vote thereon to be approved. Abstentions are considered shares present and entitled to vote on this proposal, and thus, will have the same effect as a vote “Against” this proposal. Broker non-votes will have no effect on the outcome of this proposal.
Proposal No. 3: The approval, on an advisory basis, of the compensation of our named executive officers requires the affirmative vote of at least a majority of the voting power of our common stock present virtually or represented by proxy at the Annual Meeting and entitled to vote thereon to be approved. You may vote “For,” “Against,” or “Abstain” with respect to this proposal. Abstentions are considered shares present and entitled to vote on this proposal, and thus, will have the same effect as a vote “Against” this proposal. Broker non-votes will have no effect on the outcome of this proposal. Because this proposal is an advisory vote, the result will not be binding on our board of directors or our company. Our board of directors and our compensation committee will consider the outcome of the vote when determining named executive officer compensation.
Who is entitled to vote?
Holders of our Class A and Class B common stock as of the close of business on March 23, 2021, the record date for the Annual Meeting, may vote at the Annual Meeting. As of the record date, there were 319,674,332 shares of our Class A common stock outstanding and 83,184,488 shares of our Class B common stock outstanding. Our Class A common stock and Class B common stock will vote as a single class on all matters described in this proxy statement for which your vote is being solicited. Stockholders are not permitted to cumulate votes with respect to the election of directors. Each share of Class A common stock is entitled to one vote on each proposal and each share of Class B common stock is entitled to 10 votes on each proposal. Our Class A common stock and Class B common stock are collectively referred to in this proxy statement as our “common stock.”
Registered Stockholders. If shares of our common stock are registered directly in your name with our transfer agent, Computershare Trust Company, N.A., you are considered the stockholder of record with respect to those shares, and the Notice was provided to you directly by us. As the stockholder of record, you have the right to grant your voting proxy directly to the individuals listed on the proxy card or to vote live at the Annual Meeting. Throughout this proxy statement, we refer to these registered stockholders as “stockholders of record.”
Street Name Stockholders. If shares of our common stock are held on your behalf in a brokerage account or by a bank or other nominee, you are considered to be the beneficial owner of shares that are held in “street name,” and the Notice was forwarded to you by your broker or nominee, who is considered the stockholder of record with respect to those shares. As the beneficial owner, you have the right to direct your broker, bank, or other nominee as to how to vote your shares. Beneficial owners are also invited to attend the Annual Meeting. However, since a beneficial owner is not the stockholder of record, you may not vote your shares of our common stock live at the Annual Meeting unless you follow your broker’s procedures for obtaining a legal proxy. If you request a printed copy of our proxy materials by mail, your broker, bank, or other nominee will provide a voting instruction form for you to use. Throughout this proxy statement, we refer to stockholders who hold their shares through a broker, bank, or other nominee as “street name stockholders.”
Are a certain number of shares required to be present at the Annual Meeting?
A quorum is the minimum number of shares required to be present at the Annual Meeting to properly hold an annual meeting of stockholders and conduct business under our amended and restated bylaws and Delaware law. The presence, virtually or by proxy, of a majority of the voting power of all issued and outstanding shares of our common stock entitled to vote at the Annual Meeting will constitute a quorum at the Annual Meeting. Abstentions, withhold votes, and broker non-votes are counted as shares present and entitled to vote for purposes of determining a quorum.
How do I vote?
If you are a stockholder of record, there are several ways to vote:
by Internet prior to the Annual Meeting at www.proxyvote.com, 24 hours a day, seven days a week, until 11:59 p.m. Eastern Time on May 19, 2021 for shares held directly and by 11:59 p.m. Eastern Time on May 17, 2021 for shares held in a Plan (have your Notice or proxy card in hand when you visit the website);
by toll-free telephone at 1-800-690-6903, until 11:59 p.m. Eastern Time on May 19, 2021 for shares held directly and by 11:59 p.m. Eastern Time on May 17, 2021 for shares held in a Plan (have your Notice or proxy card in hand when you call);
by completing and mailing your proxy card (if you received printed proxy materials); or
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by attending the Annual Meeting by visiting www.virtualshareholdermeeting.com/DBX2021, where you may vote and submit questions during the meeting (please have your Notice or proxy card in hand when you visit the website).
Even if you plan to attend the Annual Meeting, we recommend that you also vote by proxy so that your vote will be counted if you later decide not to attend the Annual Meeting.
If you are a street name stockholder, you will receive voting instructions from your broker, bank, or other nominee. You must follow the voting instructions provided by your broker, bank, or other nominee in order to direct your broker, bank, or other nominee on how to vote your shares. Street name stockholders should generally be able to vote by returning a voting instruction form, or by telephone or on the Internet. However, the availability of telephone and Internet voting will depend on the voting process of your broker, bank, or other nominee. As discussed above, if you are a street name stockholder, you may not vote your shares live at the Annual Meeting unless you obtain a legal proxy from your broker, bank, or other nominee.
How may my brokerage firm or other intermediary vote my shares if I fail to provide timely directions?
Brokerage firms and other intermediaries holding shares of our common stock in street name for their customers are generally required to vote such shares in the manner directed by their customers. In the absence of timely directions, your broker will have discretion to vote your shares on our sole “routine” matter: the proposal to ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for our fiscal year ending December 31, 2021. Your broker will not have discretion to vote on any other proposals, which are “non-routine” matters, absent direction from you (and failure to provide instructions on these matters will result in a “broker non-vote”).
Can I change my vote?
Yes. If you are a stockholder of record, you can change your vote or revoke your proxy any time before the Annual Meeting by:
entering a new vote by Internet or by telephone;
completing and returning a later-dated proxy card;
notifying the Corporate Secretary of Dropbox, Inc., in writing, at Dropbox, Inc., 1800 Owens Street, San Francisco, California 94158; or
You may also change your vote by attending and voting at the Annual Meeting (although attendance at the Annual Meeting will not, by itself, revoke a proxy).
If you are a street name stockholder, your broker, bank, or other nominee can provide you with instructions on how to change your vote.
What do I need to do to attend the Annual Meeting?
You will be able to attend the Annual Meeting virtually, submit your questions during the meeting and vote your shares electronically at the meeting by visiting www.virtualshareholdermeeting.com/DBX2021. To participate in the Annual Meeting, you will need the control number included on your Notice or proxy card. The Annual Meeting webcast will begin promptly at 9:00 am Pacific Time. We encourage you to access the meeting prior to the start time. Online check-in will begin at 8:45 am Pacific Time, and you should allow ample time for the check-in procedures.
What is the effect of giving a proxy?
Proxies are solicited by and on behalf of our board of directors. Andrew W. Houston and Timothy Regan have been designated as proxy holders by our board of directors. When proxies are properly dated, executed, and returned, the shares represented by such proxies will be voted at the Annual Meeting in accordance with the instructions of the stockholder. If the proxy is dated and signed, but no specific instructions are given, the shares will be voted in accordance with the recommendations of our board of directors as described above. If any matters not described in this proxy statement are properly presented at the Annual Meeting, the proxy holders will use their own judgment to determine how to vote the shares. If the Annual Meeting is adjourned, the proxy holders can vote the shares on the new Annual Meeting date as well, unless you have properly revoked your proxy, as described above.
Why did I receive a Notice of Internet Availability of Proxy Materials instead of a full set of proxy materials?
In accordance with the rules of the Securities and Exchange Commission (“SEC”), we have elected to furnish our proxy materials, including this proxy statement and our annual report, primarily via the Internet. The Notice containing instructions on how to access our proxy materials is first being mailed on or about April 6, 2021 to all stockholders entitled to vote at the Annual Meeting.
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Stockholders may request to receive all future proxy materials in printed form by mail or electronically by e-mail by following the instructions contained in the Notice. We encourage stockholders to take advantage of the availability of our proxy materials on the Internet to help reduce the environmental impact and cost of our annual meetings of stockholders.
How are proxies solicited for the Annual Meeting?
Our board of directors is soliciting proxies for use at the Annual Meeting. All expenses associated with this solicitation will be borne by us. We will reimburse brokers or other nominees for reasonable expenses that they incur in sending our proxy materials to you if a broker, bank, or other nominee holds shares of our common stock on your behalf. In addition, our directors and employees may also solicit proxies by telephone, by electronic communication or by other means of communication. Our directors and employees will not be paid any additional compensation for soliciting proxies.
Where can I find the voting results of the Annual Meeting?
We will announce preliminary voting results at the Annual Meeting. We will also disclose voting results on a Current Report on Form 8-K that we will file with the SEC within four business days after the Annual Meeting. If final voting results are not available to us in time to file a Form 8-K within four business days after the Annual Meeting, we will file a Form 8-K to publish preliminary results and will provide the final results in an amendment to the Form 8-K as soon as they become available.
I share an address with another stockholder, and we received only one paper copy of the proxy materials. How may I obtain an additional copy of the proxy materials?
We have adopted a procedure called “householding,” which the SEC has approved. Under this procedure, we deliver a single copy of the Notice and, if applicable, our proxy materials, to multiple stockholders who share the same address, unless we have received contrary instructions from one or more of such stockholders. This procedure reduces our printing costs, mailing costs and fees. Stockholders who participate in householding will continue to be able to access and receive separate proxy cards. Upon written or oral request, we will deliver promptly a separate copy of the Notice and, if applicable, our proxy materials, to any stockholder at a shared address to which we delivered a single copy of any of these materials. To receive a separate copy, or, if a stockholder is receiving multiple copies, to request that we only send a single copy of the Notice and, if applicable, our proxy materials, such stockholder may contact us at:
Dropbox, Inc.
Attention: Corporate Secretary
1800 Owens Street
San Francisco, California 94158
(415) 857-6800
Street name stockholders may contact their broker, bank, or other nominee to request information about householding.
What is the deadline to propose actions for consideration at next year’s annual meeting of stockholders or to nominate individuals to serve as directors?
Stockholder Proposals
Stockholders may present proper proposals for inclusion in our proxy statement and for consideration at next year’s annual meeting of stockholders by submitting their proposals in writing to our Corporate Secretary in a timely manner. For a stockholder proposal to be considered for inclusion in our proxy statement for the 2022 annual meeting of stockholders, our Secretary must receive the written proposal at our principal executive offices not later than December 7, 2021. In addition, stockholder proposals must comply with the requirements of Rule 14a-8 regarding the inclusion of stockholder proposals in company-sponsored proxy materials. Stockholder proposals should be addressed to:
Dropbox, Inc.
Attention: Corporate Secretary
1800 Owens Street,
San Francisco, California 94158
(415) 857-6800
Our amended and restated bylaws also establish an advance notice procedure for stockholders who wish to present a proposal before an annual meeting of stockholders but do not intend for the proposal to be included in our proxy statement. Our amended and
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restated bylaws provide that the only business that may be conducted at an annual meeting of stockholders is business that is (i) specified in our proxy materials with respect to such annual meeting, (ii) otherwise properly brought before such annual meeting by or at the direction of our board of directors, or (iii) properly brought before such meeting by a stockholder of record entitled to vote at such annual meeting who has delivered timely written notice to our Corporate Secretary, which notice must contain the information specified in our amended and restated bylaws. To be timely for the 2022 annual meeting of stockholders, our Corporate Secretary must receive the written notice at our principal executive offices:
not earlier than January 21, 2022; and
not later than February 20, 2022.
In the event that we hold the 2022 annual meeting of stockholders more than 30 days before or more than 60 days after the one-year anniversary of the Annual Meeting, a notice of a stockholder proposal that is not intended to be included in our proxy statement must be received no earlier than the close of business on the 120th day before the 2022 annual meeting of stockholders and no later than the close of business on the later of the following two dates:
the 90th day prior to the 2022 annual meeting of stockholders; or
the 10th day following the day on which public announcement of the date of the 2022 annual meeting of stockholders is first made.
If a stockholder who has notified us of his, her, or its intention to present a proposal at an annual meeting of stockholders does not appear to present his, her, or its proposal at such annual meeting, we are not required to present the proposal for a vote at such annual meeting.
Recommendation or Nomination of Director Candidates
Holders of 1% of our fully diluted capitalization for at least 12 months prior to the submission of the recommendation may recommend director candidates for consideration by our nominating and corporate governance committee. Any such recommendations should include the nominee’s name and qualifications for membership on our board of directors and should be directed to our Corporate Secretary or legal department at the address set forth above. For additional information regarding stockholder recommendations for director candidates, see the section titled “Board of Directors and Corporate Governance—Stockholder Recommendations and Nominations to the Board of Directors.”
In addition, our amended and restated bylaws permit stockholders to nominate directors for election at an annual meeting of stockholders. To nominate a director, the stockholder must provide the information required by our amended and restated bylaws. In addition, the stockholder must give timely notice to our Corporate Secretary in accordance with our amended and restated bylaws, which, in general, require that the notice be received by our Corporate Secretary within the time periods described above under the section titled “Stockholder Proposals” for stockholder proposals that are not intended to be included in a proxy statement.
Availability of Bylaws
A copy of our amended and restated bylaws is available via the SEC’s website at http://www.sec.gov. You may also contact our Corporate Secretary at the address set forth above for a copy of the relevant bylaw provisions regarding the requirements for making stockholder proposals and nominating director candidates.
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BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
Our business affairs are managed under the direction of our board of directors. As of March 15, 2021, our board of directors consisted of eight directors, seven of whom qualified as “independent” under the listing standards of the NASDAQ Global Select Market (“Nasdaq”). As previously announced, on December 10, 2020, R. Bryan Schreier resigned as a member of the board of directors and Michael Seibel was appointed as a member of the board of directors. Also as previously announced, Condoleezza Rice will not stand for re-election as a director due to her other professional commitments and demands on her time, and her service on our board of directors will end at the Annual Meeting.
Until the outstanding shares of our Class B common stock represent less than a majority of the combined voting power of our common stock, we will have a single class of directors who are each elected for one-year terms and until their successors are duly elected and qualified. When the outstanding shares of our Class B common stock represent less than a majority of the combined voting power of our common stock, we will have a classified board of directors consisting of three classes of approximately equal size, each serving staggered three-year terms. Our directors will be assigned by the then-current board of directors to a class.
In determining the composition of our board, our board of directors and nominating and corporate governance committee are committed to ensuring that our directors maintain effective and independent oversight of our business and that they capably represent the interests of our stockholders. As part of this commitment, our nominating and corporate governance committee considers the diversity of director nominees with respect to gender, race, ethnicity, sexual orientation, gender identity, viewpoints and perspectives, experience, and backgrounds. The following charts provide summary information about our director nominees with respect to independence, diversity, and tenure. For additional information regarding our criteria for evaluating director nominees, see the section titled “Considerations in Evaluating Director Nominees.”

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BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
(continued)

Nominees for Director
The following provides summary information about each of our director nominees and non-continuing director as of March 15, 2021:
 
ANDREW W. HOUSTON


AGE: 38

DIRECTOR SINCE: 2007

COMMITTEES: None

CHAIRMAN OF THE BOARD

EXPERIENCE: Mr. Houston is one of our co-founders and has served as a member of our board of directors and our Chief Executive Officer since June 2007. Mr. Houston also currently serves as a member of the board of directors of Facebook, Inc. Mr. Houston holds a B.S. in Electrical Engineering and Computer Science from the Massachusetts Institute of Technology. Mr. Houston was selected to serve on our board of directors because of the perspective and experience he brings as our Chief Executive Officer and as one of our co-founders.
 
 
 
DONALD W. BLAIR

AGE: 62

DIRECTOR SINCE: 2017

COMMITTEES: Audit (Chair)

LEAD INDEPENDENT DIRECTOR

EXPERIENCE: Mr. Blair has served as a member of our Board of Directors since December 2017. From November 1999 to October 2015, Mr. Blair served as Executive Vice President and Chief Financial Officer for NIKE, Inc., or NIKE, a global footwear and apparel company. Prior to joining NIKE, for fifteen years, Mr. Blair served in a number of senior executive-level corporate and operating unit financial assignments for PepsiCo, Inc., or PepsiCo, a food and beverage company, including Chief Financial Officer for PepsiCo Japan (based in Tokyo) and Pepsi-Cola International’s Asia Division (based in Hong Kong). Mr. Blair currently serves as a member of the board of directors for Corning Incorporated, a global manufacturing company. Mr. Blair holds an M.B.A. and a B.S. in Economics from the University of Pennsylvania. Mr. Blair was selected to serve on our Board of Directors because of his extensive financial expertise, and business management and governance experience.
 
 
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BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
(continued)

 
LISA CAMPBELL

AGE: 57

DIRECTOR SINCE: 2019

COMMITTEES: Audit; Nominating & Corporate Governance

INDEPENDENT DIRECTOR

EXPERIENCE: Ms. Campbell has served as a member of our board of directors since August 2019. Since August 2017, Ms. Campbell has served as Chief Marketing Officer and Senior Vice President of Business Strategy for Autodesk, Inc., or Autodesk, a multinational software corporation that makes software services for the architecture, engineering, construction, manufacturing, media, education, and entertainment industries. From January 2015 to August 2017, Ms. Campbell served as Vice President, Industry Strategy and Marketing – Manufacturing at Autodesk, and she served as its Vice President, Industry Strategy and Marketing – Architecture, Engineering and Construction from February 2012 through January 2015. She has also held other senior positions at Autodesk, including managing its Global eCommerce business and Autodesk.com, and managing its Geospatial Business and infrastructure business. Prior to joining Autodesk in 2003, Ms. Campbell served in executive-level marketing positions at Evolve (now Oracle), Sterling Software Inc., and Digital Equipment Corporation. Ms. Campbell holds an M.B.A. from Babson College and a B.A. in Mathematics and Computer Science from Boston College. She was selected to serve on our board of directors because of her valuable expertise in business, industry, and marketing strategy.
 
 
 
PAUL E. JACOBS, Ph.D

AGE: 58

DIRECTOR SINCE: 2016

COMMITTEES: Nominating & Corporate Governance (Chair)

INDEPENDENT DIRECTOR

EXPERIENCE: Dr. Jacobs has served as a member of our board of directors since April 2016. Since April 2018, Dr. Jacobs has served as Chairman and Chief Executive Officer of XCOM Labs, Inc., a wireless technology company, and since January 2021, Dr. Jacobs has served as CEO and as a member of the board of directors of Jaws Juggernaut Acquisition Corporation, a special purpose acquisition company. From March 2014 to March 2018, Dr. Jacobs served as Executive Chairman for Qualcomm Incorporated, a semiconductor and telecommunications equipment company, or Qualcomm. From March 2009 to March 2018, Dr. Jacobs served as Chairman of the board of directors for Qualcomm. From July 2005 to March 2014, Dr. Jacobs served as Chief Executive Officer for Qualcomm. Dr. Jacobs also currently serves as a member of the board of directors for a number of private companies. Dr. Jacobs holds a Ph.D. in Electrical Engineering and Computer Science, an M.S. in Electrical Engineering, and a B.S. in Electrical Engineering and Computer Science from the University of California, Berkeley. Dr. Jacobs was selected to serve on our board of directors because of his extensive business, operations, and management experience.
 
 
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BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
(continued)

 
ROBERT J. MYLOD JR.

AGE: 54

DIRECTOR SINCE: 2014

COMMITTEES: Audit; Compensation

INDEPENDENT DIRECTOR

EXPERIENCE: Mr. Mylod has served as a member of our board of directors since September 2014. Mr. Mylod served as Managing Partner for Annox Capital Management, a venture capital firm that Mr. Mylod founded, since January 2013. Mr. Mylod served as Head of Worldwide Strategy & Planning and Vice Chairman for Bookings Holdings, Inc. (f/k/a The Priceline Group), an online travel services provider, from January 2009 to March 2011 and as its Chief Financial Officer and Vice Chairman from November 2000 to January 2009. Mr. Mylod currently serves as the Chairman of the board of directors for Vroom, Inc., an online marketplace for pre-owned cars and Booking Holdings, Inc., an online travel services provider. Mr. Mylod also serves as a member of the board of directors for Redfin Corporation, a real estate company that provides web-based real estate database and brokerage services, and a number of private companies. Mr. Mylod holds an MBA from the University of Chicago Booth School of Business and an A.B. in English from the University of Michigan. Mr. Mylod was selected to serve on our board of directors because of his financial expertise and global business experience.
 
 
 
KAREN PEACOCK

AGE: 48

DIRECTOR SINCE: 2019

COMMITTEES: Compensation

INDEPENDENT DIRECTOR

EXPERIENCE: Ms. Peacock has served as a member of our board of directors since August 2019. Since July 2020, Ms. Peacock has served as Chief Executive Officer for Intercom, Inc., or Intercom, a corporation that develops and markets business messaging and communication software, and from May 2017 to July 2020, Ms. Peacock served as Chief Operating Officer for Intercom. From January 2016 to March 2017, Ms. Peacock served as Senior Vice President, Small Business at Intuit Inc., or Intuit, and from 2014 to January 2016, she served as VP, General Manager of Intuit’s Employee Management Solutions division. Ms. Peacock has also held other senior roles at Intuit, including Vice President of Marketing and Product Management. Prior to joining Intuit in 2002, Ms. Peacock was Director of Product Management at Allegis Corporation and prior to that, was a management consultant with the Boston Consulting Group. Ms. Peacock holds an M.B.A. from Stanford Graduate School of Business and a B.A. in Applied Mathematics from Harvard University. She was selected to serve on our board of directors because of her valuable expertise in business, industry, and her extensive experience in executive-level operational roles.
 
 
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MICHAEL SEIBEL

AGE: 38

DIRECTOR SINCE: 2020

COMMITTEES: Compensation

INDEPENDENT DIRECTOR

EXPERIENCE: Mr. Seibel has served as a member of our board of directors since December 2020. Mr. Seibel has served as a Partner at Y Combinator, an accelerator and investment company for early-stage technology companies since October 2014 and is also currently the Managing Director of YC Early Stage. From February 2012 to August 2012, Mr. Seibel served as Chief Executive Officer of Socialcam, Inc., a social media company, and from June 2007 to October 2011, Mr. Seibel served as Chief Executive Officer of Justin.tv (now known as Twitch.tv), an online video broadcasting company. Mr. Seibel holds a B.A. in Political Science from Yale University. Mr. Seibel was selected to serve on our board of directors because of his financial and managerial experience.
 
 
Non-Continuing Director
 
CONDOLEEZZA RICE, Ph.D

AGE: 66

DIRECTOR SINCE: 2014

COMMITTEES: Compensation (Chair)

INDEPENDENT DIRECTOR

EXPERIENCE: Dr. Rice has served as a member of our board of directors since April 2014. Since September 2010, Dr. Rice has served as the Denning Professor of Global Business and the Economy for the Stanford Graduate School of Business. Since March 2009, Dr. Rice has served as a Senior Fellow of Public Policy for the Hoover Institution, Stanford University, as a Senior Fellow for the Freeman Spogli Institute for International Studies, Stanford University, and as a Professor of Political Science for Stanford University. Dr. Rice has served as a partner at RiceHadleyGates LLC, an international strategic consulting firm that Dr. Rice founded, since November 2009. From January 2005 to January 2009, Dr. Rice served as the Secretary of State of the United States of America. From January 2001 to January 2005, Dr. Rice served as Chief National Security Advisor to President George W. Bush. Beginning in 1981, she served in various roles at Stanford University, including serving as Provost from 1993-1999. Dr. Rice previously served as a member of the board of directors of Charles Schwab Corporation, a bank and brokerage firm, Chevron Corporation, a multinational energy corporation, Transamerica Corporation, a life insurance and investment company, and KiOR, Inc., a renewable fuels company. Dr. Rice currently serves as an advisor for a number of other public companies, and as a member of the board directors for C3.ai, Inc., a developer of enterprise artificial intelligence software, as well as for a number of private companies, including Makena Capital Management, LLC. Dr. Rice holds a Ph.D. in Political Science from the University of Denver, an M.A. in Political Science from the University of Notre Dame and a B.A. in Political Science from the University of Denver. Dr. Rice was selected to serve on our board of directors because of her deep global expertise and business experience from her prior roles as a director of multiple public companies and her background in policymaking, education, and innovation.
 
 
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Director Independence
Under the listing rules of Nasdaq, independent directors must comprise a majority of a listed company’s board of directors. In addition, Nasdaq rules require that, subject to specified exceptions, each member of a listed company’s audit, compensation, and nominating and corporate governance committees be independent. Under Nasdaq rules, a director will only qualify as an “independent director” if, in the opinion of the company’s board of directors, the director does not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.
Our board of directors has undertaken a review of the independence of each director. Based on information provided by each director concerning his or her background, employment, and affiliations, our board of directors has determined that Drs. Jacobs and Rice, Messrs. Blair, Mylod, and Seibel, and Mss. Campbell and Peacock do not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director and that each of these directors is “independent” as that term is defined under Nasdaq listing rules. In making these determinations, our board of directors considered the current and prior relationships that each non-employee director has with our company and all other facts and circumstances our board of directors deemed relevant in determining their independence, including the beneficial ownership of our capital stock by each non-employee director, and the transactions involving them, if any, described in the section titled “Certain Relationships and Related Party Transactions.” In addition, the board of directors determined that Mr. Schreier, who served as a director until his resignation in December 2020, was independent during the 2020 fiscal year.
Board Leadership Structure and Role of the Lead Independent Director
Mr. Houston currently serves as both the chairman of our board of directors and as our chief executive officer. As our co-founder, Mr. Houston is best positioned to identify strategic priorities, lead critical discussion, and execute our business plans.
Our board of directors has adopted Corporate Governance Guidelines that provide that one of our independent directors should serve as our lead independent director at any time when the chairman of our board of directors is not independent, including when our chief executive officer serves as the chairman of our board of directors. Because Mr. Houston is our chairman and is not an “independent” director as defined in Nasdaq’s listing rules, our board of directors has determined that it is advisable and in the best interests of stockholders to have a lead independent director to, among other things, preside over meetings of the independent directors and help set the agenda for Board meetings. Dr. Rice served as our lead independent director from June 2018 until March 2020, at which time Dr. Rice stepped down as lead independent director and our board of directors selected Mr. Blair to succeed Dr. Rice. As our lead independent director, Mr. Blair presides over periodic meetings of our independent directors, serves as a liaison between Mr. Houston and our independent directors, and performs such additional duties as our board of directors may otherwise determine and delegate.
Only independent directors serve on the audit committee, the compensation committee, and the nominating and corporate governance committee of our board of directors. Our independent directors meet at least quarterly in executive sessions chaired by the lead independent director, which include discussions and recommendations regarding guidance to be provided to the chief executive officer, and such topics as the independent directors may determine.
As a result of the board of directors’ committee system and the existence of a majority of independent directors, the board of directors believes it maintains effective oversight of our business operations, including independent oversight of our financial statements, executive compensation, selection of director candidates, and corporate governance programs. We believe that the leadership structure of our board of directors, including Mr. Blair’s role as lead independent director, as well as the strong independent committees of our board of directors is appropriate and enhances our board of directors’ ability to effectively carry out its roles and responsibilities on behalf of our stockholders, while Mr. Houston’s combined role enables strong leadership, creates clear accountability and enhances our ability to communicate our message and strategy clearly and consistently to stockholders.
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Board Committees
Our board of directors has established an audit committee, a compensation committee, and a nominating and corporate governance committee. The composition and responsibilities of each of the committees of our board of directors is described below. Members will serve on these committees until their resignation or until as otherwise determined by our board of directors.
Director
Audit
Compensation
Nominating and Corporate
Governance
Andrew W. Houston
Donald W. Blair
  
Lisa Campbell
Paul E. Jacobs, Ph.D
Robert J. Mylod Jr.
  
Karen Peacock
Condoleezza Rice, Ph.D
Michael Seibel
Number of Meetings
6
6
3
  Committee member
  Committee chair
  Financial expert
Audit Committee
Our audit committee consists of Messrs. Blair and Mylod, and Ms. Campbell, with Mr. Blair serving as chairperson. In March 2020, Mr. Mylod stepped down as chairperson of the audit committee and the board of directors selected Mr. Blair to serve as chairperson. Each of the members of the audit committee meets the requirements for independence of audit committee members under Nasdaq listing rules and SEC rules and regulations and also meets the financial literacy and sophistication requirements of the Nasdaq listing rules. Our board of directors has determined that Messrs. Blair and Mylod are audit committee financial experts within the meaning of Item 407(d) of Regulation S-K. Our audit committee is responsible for, among other things:
selecting a qualified firm to serve as the independent registered public accounting firm to audit our financial statements;
helping to ensure the independence and overseeing performance of the independent registered public accounting firm;
reviewing and discussing the scope and results of the audit with the independent registered public accounting firm, and reviewing, with management, internal audit and the independent registered public accounting firm, our interim and year-end operating results;
reviewing our financial statements and our critical accounting policies and estimates;
overseeing and monitoring the integrity of our financial statements and our compliance with legal and regulatory requirements as they relate to financial statements or accounting matters;
reviewing and approving any amendments to the internal audit charter;
reviewing the design, implementation, adequacy, and effectiveness of our internal controls;
overseeing the performance of our internal audit department, which functionally reports to the audit committee;
developing procedures for employees to submit concerns anonymously about questionable accounting, internal accounting controls, or audit matters;
overseeing management’s assessment and mitigation of enterprise risks;
overseeing compliance with our code of business conduct and ethics;
reviewing and approving related party transactions; and
pre-approving all audit and all permissible non-audit services to be performed by the independent registered public accounting firm.
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Our audit committee operates under a written charter that satisfies the applicable rules and regulations of the SEC and the listing standards of Nasdaq. A copy of the charter for our audit committee is available on our website at investors.dropbox.com. During 2020, our audit committee held six meetings.
Compensation Committee
Our compensation committee consists of Dr. Rice, Ms. Peacock and Messrs. Mylod and Seibel, with Dr. Rice serving as chairperson. Mr. Schreier served as a member of our compensation committee until his resignation as a member of the board of directors in December 2020. Mr. Seibel was appointed to the compensation committee in December 2020. Dr. Rice, who will not be standing for re-election as a director at the Annual Meeting, will remain the chairperson and a member of the compensation committee until the Annual Meeting. Our board of directors selected Ms. Peacock to succeed Dr. Rice as chairperson of the compensation committee following the Annual Meeting. Each member of the compensation committee meets the requirements for independence for compensation committee members under the listing standards of Nasdaq. Each member of our compensation committee is also a non-employee director, as defined pursuant to Rule 16b-3 promulgated under the Securities Exchange Act of 1934, as amended (“Exchange Act”), or Rule 16b-3. Our compensation committee is responsible for, among other things:
reviewing, approving, and determining, or making recommendations to our board of directors regarding, the compensation of our executive officers, including our chief executive officer;
administering our equity compensation plans;
reviewing, approving, and administering incentive compensation and equity compensation plans;
reviewing and approving our overall compensation philosophy; and
making recommendations regarding non-employee director compensation to our full board of directors.
Our compensation committee operates under a written charter that satisfies the applicable rules and regulations of the SEC and the listing standards of Nasdaq. A copy of the charter for our compensation committee is available on our website at investors.dropbox.com. During 2020, our compensation committee held six meetings.
Nominating and Corporate Governance Committee
Our nominating and corporate governance committee consists of Ms. Campbell and Dr. Jacobs, with Dr. Jacobs serving as chairperson. In February 2020, Ms. Campbell was appointed to the nominating and corporate governance committee. Each member of the nominating and corporate governance committee meets the requirements for independence under the listing standards of Nasdaq. Our nominating and corporate governance committee is responsible for, among other things:
identifying, evaluating, and making recommendations to our board of directors regarding nominees for election to our board of directors and its committees;
overseeing the evaluation of the performance of our board of directors and of individual directors;
considering and making recommendations to our board of directors regarding the composition of our board of directors and its committees;
overseeing our corporate governance practices;
contributing to succession planning; and
developing and making recommendations to our board of directors regarding corporate governance guidelines and matters.
Our nominating and corporate governance committee operates under a written charter that satisfies the applicable Nasdaq listing standards. A copy of the charter for our nominating and corporate governance committee is available on our website at investors.dropbox.com. During 2020, our nominating and corporate governance committee held three meetings.
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Attendance at Board and Stockholder Meetings
During our fiscal year ended December 31, 2020, our board of directors held thirteen meetings (including regularly scheduled and special meetings), and each director attended at least 75% of the aggregate of (i) the total number of meetings of our board of directors held during the period for which he or she has been a director and (ii) the total number of meetings held by all committees of our board of directors on which he or she served during the periods that he or she served.
Although we do not have a formal policy regarding attendance by members of our board of directors at annual meetings of stockholders, we strongly encourage, but do not require, our directors to attend. All directors who then served on the board attended our 2020 annual meeting of our stockholders.
Compensation Committee Interlocks and Insider Participation
None of the members of our compensation committee is or has been an officer or employee of our company. None of our executive officers currently serves, or in the past year has served, as a member of the board of directors or compensation committee (or other board committee performing equivalent functions) of any entity that has one or more of its executive officers serving on our board of directors or compensation committee.
Considerations in Evaluating Director Nominees
Our nominating and corporate governance committee uses a variety of methods, including engaging the services of outside consultants and search firms, to identify and evaluate director nominees. In its evaluation of director candidates, our nominating and corporate governance committee considers the current size and composition, organization, and governance of our board of directors and the needs of our board of directors and the respective committees of our board of directors. Some of the qualifications that our nominating and corporate governance committee considers include, without limitation, issues of character, integrity, judgment, business experience, and diversity, and with respect to diversity, such factors as gender, race, ethnicity, sexual orientation, gender identity, differences in professional background, education, skill and other individual qualities and attributes that contribute to the total mix of viewpoints and experience represented on the board of directors, potential conflicts of interest and other commitments. Nominees must also have the highest personal and professional ethics and the ability to offer advice and guidance to our chief executive officer and other members of management based on proven achievement and leadership in the companies or institutions with which they are affiliated. Director candidates must understand the fiduciary responsibilities that are required of a member of our board of directors and have sufficient time available, in the judgment of our nominating and corporate governance committee, to perform all board of director and applicable committee responsibilities. Members of our board of directors are expected to prepare for, attend, and participate in all board of directors and applicable committee meetings. Our nominating and corporate governance committee may also consider such other factors as it may deem, from time to time, are in our and our stockholders’ best interests.
The nominating and corporate governance committee considers the suitability of each director candidate, including current directors, in light of the current size and composition of our board. Although we do not maintain a specific policy with respect to board diversity, our board of directors believes that our board of directors should be a diverse body, and our nominating and corporate governance committee considers a broad range of backgrounds and experiences. In making determinations regarding nominations of directors, our nominating and corporate governance committee may take into account the benefits of diverse viewpoints. After completing its review and evaluation of director candidates, including incumbent directors, our nominating and corporate governance committee recommends to our full board of directors the director nominees for selection.
Board Evaluations
Our board of directors conducts an annual evaluation of the performance of individual directors, the board as a whole, and each of the board’s standing committees, including an evaluation of the qualifications of individual members of the board and its committees. The evaluation is conducted via oral interviews by our lead independent director in close partnership with our in-house legal team, using as a basis for discussion a list of questions that are provided to each director in advance. The results of the evaluation and any recommendations for improvement are provided orally to our board of directors and the other standing committees of the board either by the lead independent director or a member of our in-house legal team.
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Stockholder Recommendations and Nominations to the Board of Directors
Our nominating and corporate governance committee will consider director candidates recommended by stockholders holding at least one percent (1%) of the fully diluted capitalization of Dropbox, Inc. continuously for at least 12 months prior to the date of the submission of the recommendation, so long as such recommendations comply with our amended and restated certificate of incorporation, amended and restated bylaws, and applicable laws, rules and regulations, including those promulgated by the SEC. Our nominating and corporate governance committee will evaluate such recommendations in accordance with its charter, our amended and restated bylaws and our policies and procedures for director candidates, as well as the regular director nominee criteria described above. This process is designed to ensure that our board of directors includes members with diverse backgrounds, skills, and experience, including appropriate financial and other expertise relevant to our business. Eligible stockholders wishing to recommend a candidate for nomination should contact our Corporate Secretary or legal department in writing. Such recommendations must include information about the candidate, a statement of support by the recommending stockholder, evidence of the recommending stockholder’s ownership of our capital stock, a signed letter from the candidate confirming willingness to serve on our board of directors and any additional information required by our amended and restated bylaws. Our nominating and corporate governance committee has discretion to decide which individuals to recommend for nomination as directors.
Under our amended and restated bylaws, stockholders may also directly nominate persons for our board of directors. Any nomination must comply with the requirements set forth in our amended and restated bylaws and should be sent in writing to our Corporate Secretary at Dropbox, Inc., 1800 Owens Street San Francisco, California 94158. To be timely for the 2022 annual meeting of stockholders, nominations must be received by our Secretary observing the same deadlines for stockholder proposals discussed above under “What is the deadline to propose actions for consideration at next year’s annual meeting of stockholders or to nominate individuals to serve as directors? – Stockholder Proposals.
Communications with the Board of Directors
Interested parties wishing to communicate with non-management members of our board of directors may do so by writing and mailing the correspondence to our Corporate Secretary at Dropbox, Inc., 1800 Owens Street, San Francisco, California 94158. Each communication should set forth (i) the name and address of the stockholder, as it appears on our books, and if the shares of our common stock are held by a broker, bank or nominee, the name and address of the beneficial owner of such shares, and (ii) the class and number of shares of our common stock that are owned of record by the record holder and beneficially by the beneficial owner.
Our Corporate Secretary or legal department, in consultation with appropriate members of our board of directors as necessary, will review all incoming communications and, if appropriate, such communications will be forwarded to the appropriate member or members of our board of directors, or if none are specified, to the chairman of our board of directors.
This procedure does not apply to (i) communications to non-management directors from our officers or directors who are stockholders or (ii) stockholder proposals submitted pursuant to Rule 14a-8 under the Exchange Act, which are discussed further in the section titled “What is the deadline to propose actions for consideration at next year’s annual meeting of stockholders or to nominate individuals to serve as directors?—Stockholder Proposals” described above in this proxy statement.
Corporate Governance Guidelines and Code of Business Conduct and Ethics
Our board of directors has adopted Corporate Governance Guidelines that address items such as the qualifications and responsibilities of our directors and director candidates, including independence standards, and corporate governance policies and standards applicable to us in general. In addition, our board of directors has adopted a Code of Business Conduct and Ethics that applies to all of our employees, officers and directors, including our Chief Executive Officer, Chief Financial Officer and other executive and senior financial officers. The full text of our Corporate Governance Guidelines and our Code of Business Conduct and Ethics is posted on our website at investors.dropbox.com. We will post amendments to our Code of Business Conduct and Ethics or any waivers of our Code of Business Conduct and Ethics for directors and executive officers on the same website or in filings under the Exchange Act.
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Role of Board in Risk Oversight Process
Risk is inherent with every business, and we face a number of risks, including strategic, financial, business and operational, legal and compliance, and reputational, in the pursuit and achievement of our strategic objectives. We have designed and implemented processes to manage risk in our operations. Management is responsible for the day-to-day oversight and management of strategic, operational, legal and compliance, cybersecurity, and financial risks, while our board of directors, as a whole and assisted by its committees, has responsibility for the oversight of our risk management framework, which is designed to identify, assess, and manage risks to which our company is exposed, as well as to foster a corporate culture of integrity. Consistent with this approach, our board regularly reviews our strategic and operational risks in the context of discussions with management, question and answer sessions, and reports from the management team at each regular board meeting. Additionally, during the 2020 fiscal year, our board of directors regularly reviewed our response to the COVID-19 pandemic and the risks to our business associated with the pandemic. Our board of directors considered the impact of the pandemic on our financial performance, our business and strategies, our operations and the effect of the pandemic on our employees and the community. Our board also receives regular reports on all significant committee activities at each regular board meeting, and evaluates the risks inherent in significant transactions.
In addition, our board has tasked designated standing committees with oversight of certain categories of risk management. Our audit committee assists our board in fulfilling its oversight responsibilities with respect to risk management in the areas of internal control over financial reporting and disclosure controls and procedures, as well as legal and regulatory compliance. The audit committee further oversees our initiatives related to cybersecurity, including prevention and monitoring, as well as our enterprise-risk management program. Our audit committee also, among other things, discusses with management and the independent auditor guidelines and policies with respect to risk assessment and risk management. Our compensation committee assesses risks relating to our executive compensation plans and arrangements, and whether our compensation policies and programs have the potential to encourage excessive risk-taking. Our nominating and corporate governance committee assesses risks relating to our corporate governance practices, the independence of the board, and potential conflicts of interest. These committees provide regular reports on our risk management efforts to the full board.
Our board of directors believes its current leadership structure supports the risk oversight function of the board.
Corporate Responsibility Highlights
We are committed to conducting business in an ethical and transparent way, and to being accountable to our customers, our employees, our stockholders, the communities in which we operate, and all our other stakeholders for the manner in which we run our business. In addition, we believe that operating sustainably drives long-term stockholder value. During the 2020 fiscal year, we responded to the COVID-19 pandemic by supporting and protecting the health and safety of our employees, as well as assisting our communities. Described below are recent and ongoing efforts we have undertaken to benefit and support our various stakeholders, including in the face of challenges presented by the COVID-19 pandemic.
Human Capital Management
Employee Wellness and Development
We are committed to supporting the well-being of our employees by providing 24 weeks of paid parental leave for all our employees, as well as mental and physical wellness benefits.
The safety of our employees is paramount; we have a physical security policy applicable to all our employees in our global locations and our global physical security team is empowered to protect the safety of our employees in the event of emergencies or disasters.
In addition, to protect the health and safety of our employees and to support their well-being during the COVID-19 pandemic:
We shifted to a remote-work model for substantially all of our employees.
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We established Global COVID-19 Workplace Health & Safety Standards for situations where it was necessary for employees or other personnel to enter our offices; these standards mandated locally-compliant health screening, social distancing and face covering practices and advised all visitors to follow personal health and hygiene best practices; these standards were reviewed and updated as we received further guidance from public health authorities.
We provided allowances to employees to cover certain remote work expenses.
We provided subsidized dependent care and access to dependent care resources, as well as supporting flexible working arrangements for our employees with caregiving obligations.
We introduced a new program to help employees and their dependents manage their mental health through coaching, therapy, and on-demand resources.
We have transitioned to our Virtual First work model, in which remote work is the primary experience for substantially all of our employees; as part of our Virtual First workforce strategy we strive to support our employees by:
Providing an annual allowance that gives employees the flexibility to focus this benefit towards what really matters to them; this may include health and wellness, family and caregiver support, productivity and ergonomics, learning and development or financial wellness.
Promoting work-life balance by empowering our employees to adopt flexible working arrangements and providing tools for efficient remote collaboration.
Continuing to provide opportunities for in-person collaboration, when safe to do so, at our “Dropbox Studios” locations.
We conduct an annual employee satisfaction survey, the results of which are used by management to refine our employee wellness and development initiatives.
Diversity, Equity and Inclusion
We publish our gender and ethnic diversity data, as well as our diversity, equity and inclusion initiatives on an annual basis.
We provide resources and training to employees at all levels to ensure that we are hiring, promoting and retaining diverse teams.
Our Employee Resource Groups, or ERGs, provide support for diverse members of our workforce by fostering an inclusive environment and providing professional development and community-building opportunities; each ERG has an executive-level sponsor who champions ERG initiatives and programs.
We sponsor a number of professional development programs to support the advancement of underrepresented employees at Dropbox.
Dropbox has routinely been cited as a leader in workplace diversity, having been listed in Fortune’s Best Workplaces for Diversity every year that the list has been published since 2016.
Data Privacy and Cybersecurity
Being “Worthy of Trust” is one of our guiding values and as a reflection of that principle, we have established a cross-functional leadership team overseeing our information security and privacy practices, as well as identifying and proactively addressing security and privacy risks; this team reports periodically to the board of directors and the audit committee and comprises senior leaders from our legal, privacy, information security, information technology, infrastructure and compliance teams, including our Chief Privacy Officer, Head of Security and Chief Legal Officer.
With oversight and guidance provided by the cross-functional leadership team, our information security and privacy teams continually refine our practices to address emerging security risks and changes in privacy regulations.
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We have appointed a Data Protection Officer (the “DPO”) who provides independent oversight of our privacy program and guidance on privacy issues; the DPO acts as the single point of contact for privacy-related requests for our customers in the European Union, as well as for regulatory authorities; our DPO reports periodically to management, the board of directors and the audit committee on privacy risks, as well as providing an independent assessment of our privacy program.
We have a privacy policy that describes how we collect, use, store, share and protect customer data, as well as how customers can access and manage their personal data.
We are committed to upholding the legal protections safeguarding the privacy of our customers’ data as well as outlining our policies and practices pertaining to government requests for customer data; as part of that commitment, we have publicly disclosed our guiding principles in responding to government requests and, since 2012, we have published quantitative data on government requests that we received.
Several of our security and privacy management systems are independently audited and/or certified according to internationally-recognized standards:
Our information security management system is independently audited on an annual basis and is ISO 27001 certified.
Our privacy information management system is independently audited on an annual basis and is ISO 27701 certified.
Our cloud security controls are ISO 27017 certified and our cloud privacy and data protection controls are ISO 27018 certified.
All employees are required to complete annual information security and privacy training and to comply with our information security and privacy policies, which are reviewed and updated annually.
Community
We partner closely with the Dropbox Foundation (the “Foundation) in its work with nonprofit organizations to defend human rights in communities around the world. We encourage Dropbox employees to support these organizations through skills-based volunteering, donations, and by raising awareness of their missions through internal talks and other advocacy.
We empower our employees to give back to their communities by providing paid volunteer time off, matching a portion of employee donations to nonprofits and making product donations to nonprofit organizations nominated by our employees; in 2020, Dropbox employees benefited over 1,500 organizations through either donations or volunteering.
In response to the COVID-19 pandemic we provided free access to paid versions of our products to K-12 educators and nonprofit and non-governmental organizations engaged in COVID-19 pandemic relief efforts.
In response to the spotlight on racial injustice in the United States in 2020, we donated over $1 million to organizations supporting racial justice via employee donations that were matched by us and our CEO.
We are committed to supporting educational programs in our communities:
We partnered with San Francisco Education Fund’s “Circle the Schools” program to support public schools in San Francisco through employee volunteering and in-kind donations.
Many of our employees, through our partnership with Code Nation, have volunteered to teach coding skills to students attending under-resourced schools in New York City and San Francisco.
Environmental Sustainability
We have announced company-wide environmental sustainability goals that we plan to accomplish by 2030:
Achieve carbon neutrality with respect to scope 1, scope 2 and scope 3 business travel emissions.
Use 100% renewable energy for our operations, including our data centers.
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In addition, we are committed to supporting nonprofits focused on sustainability and climate change via the Foundation, empowering our employees to volunteer with organizations focused on environmental sustainability and supporting internal sustainability employee interest groups.
Business Conduct and Ethics
We have a Code of Business Conduct and Ethics (the “Code”) that is applicable to all our employees, directors and independent contractors, as well as written policies addressing insider trading, anti-corruption, financial controls and maintaining confidentiality.
The Code and our internal policies are reviewed and updated as necessary on an annual basis.
All employees are required to complete a training course on the Code and related policies on an annual basis; additional trainings on select topics are provided to certain employees based on their roles.
Trust is one of our core values and we seek to maintain that trust through empowering employees to report any potential violations of our Code, our policies or applicable laws through our confidential whistleblower hotline; we do not tolerate any retaliation against employees who report potential violations in good faith or participate in investigations into such violations.
Director Compensation
We have adopted a compensation policy for our non-employee directors. Under this director compensation policy, each non-employee director receives the cash and equity compensation for board services described below. We also reimburse our non-employee directors for reasonable, customary, and documented travel expenses to board meetings. The director compensation policy has been developed in consultation with Compensia, Inc., or Compensia, an independent national compensation consulting firm. Compensia provided recommendations and competitive non-employee director compensation data and analyses. We considered and discussed these recommendations and data, and considered the specific duties and committee responsibilities of particular directors. We adopted Compensia’s recommendations when we initially adopted the director compensation policy in connection with our initial public offering, and we believe the policy provides our non-employee directors with reasonable and appropriate compensation that is commensurate with the services they provide and competitive with compensation paid by our peer group companies to their non-employee directors. Compensia has also advised on subsequent amendments to the policy. Our director compensation policy follows the principles listed below.
Principle
Description
Pay Mix
Our director compensation policy consists of a balance of cash and equity, with an emphasis on equity over cash, in order to better align the interests of our directors with that of our stockholders.
Total Compensation Limit
Our director compensation policy includes a maximum annual limit of $1,200,000 of cash compensation and equity awards that may be paid, issued, or granted to a non-employee director in any fiscal year. The maximum limit does not reflect the intended size of any potential compensation or equity awards to our non-employee directors. Any cash compensation paid or equity awards granted to a person for his or her services as an employee, or for his or her services as a consultant (other than as a non-employee director), will not count for purposes of the limitation. For purposes of this limitation, the value of equity awards is based on the grant date fair value (determined in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”).
Regular Review
With advice from Compensia, our compensation committee regularly reviews the amount and form of director compensation to ensure consistency with prudent governance practices and comparability with our peer group.
Board Leadership Compensation
Our director compensation policy provides additional compensation for leadership positions on the board of directors, including lead independent director and committee chair roles, to account for the added time and effort associated with these positions.
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BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
(continued)

Components of Compensation
Our director compensation policy consists of a cash component and an equity component. There are no per-meeting attendance fees for attending board meetings. Directors who are also our employees receive no additional compensation for their service as directors. The components of our director compensation policy, as currently in effect, are described below.
Component
Description
Cash Compensation
Annual Cash Retainer
$50,000, paid quarterly in arrears on a prorated basis.
Committee and Board Leadership Compensation
Under the policy in fiscal 2020, each non-employee director was entitled to receive the following cash compensation for their additional services:

 $35,000 per year for service as a lead independent director;

 $30,000 per year for service as chair of the audit committee;

 $12,500 per year for service as a member of the audit committee;

 $20,000 per year for service as chair of the compensation committee;

 $10,000 per year for service as a member of the compensation committee;

 $15,000 per year for service as chair of the nominating and corporate governance committee;
and

 $5,000 per year for service as a member of the nominating and corporate governance
committee.

Directors who serve as the chair of a committee will receive only the annual fee as the chair of the committee and not any additional fees for serving as a member of that committee.
Equity Compensation
Initial Award
Each person who first becomes a non-employee director receives, on the first trading date or after the date on which the person first becomes a non-employee director, an initial award of restricted stock units (“RSUs”), or the Initial Award. An employee director who becomes a non-employee director due to termination of employment will not entitle such director to an Initial Award.

Number of Shares

The Initial Award covers a number of shares of our Class A common stock having a grant date fair value (determined in accordance with GAAP) equal to $250,000 multiplied by the fraction obtained by dividing (a) the number of full months during the period beginning on the date the person first becomes a non-employee director and ending on the one-year anniversary of the date of the then-most recent annual meeting of the company’s stockholders, or the Initial Award Vesting Period by (b) 12, rounded to the nearest whole share.

Vesting of Award

The Initial Award vests on the last day of the Initial Award Vesting Period or, if earlier, on the day before the annual meeting of our stockholders that follows the grant date of the Initial Award, subject to the non-employee director continuing to provide services to us through the applicable vesting date.
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BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
(continued)

Component
Description
Annual Award
Each non-employee director will automatically receive, on the date of each annual meeting of stockholders following the effective date of the policy, an annual award of RSUs, each of which we refer to as an Annual Award.

Number of Shares

Each Annual Award covers a number of shares of our Class A common stock having a grant date fair value (determined in accordance with GAAP) of $250,000, rounded to the nearest whole share.

Vesting of Award

The Annual Award will vest on the one-year anniversary of the grant date of the Annual Award or, if earlier, the day before our annual meeting of stockholders that follows the grant date of the Annual Award, subject to the non-employee director continuing to provide services to us through the applicable vesting date.
Deferral of Awards
Each non-employee director may elect to defer the delivery of the settlement of any Initial Award or Annual Award that would otherwise be delivered to such non-employee director on or following the date such award vests pursuant to the terms of a deferral election such non-employee director makes in accordance with the policy.
Change in Control
In the event of a “change in control” (as defined in our 2018 Equity Incentive Plan), each non-employee director will fully vest in his or her outstanding company equity awards, including any Initial Award or Annual Award, provided that the non-employee director continues to be a non-employee director through such date.
2020 Compensation
The following table provides information regarding compensation of our non-employee directors for their service as directors, for the fiscal year ended December 31, 2020. Directors who are also our employees receive no additional compensation for their service as directors. During 2020, Messrs. Houston and Ferdowsi were employees and executive officers of the company and therefore, did not receive compensation as directors. See “Executive Compensation” for additional information regarding Mr. Houston’s compensation. Mr. Ferdowsi was not a named executive officer in 2020 and resigned as a member of the board and as an officer of the company in March 2020.
Name
Fees Paid
or
Earned in
Cash ($)
Stock
Awards ($)(1)(2)
All Other
Compensation ($)
Total ($)
Donald W. Blair
102,664
251,076
353,740
Lisa Campbell
66,831
251,076
317,907
Paul E. Jacobs
62,650
251,076
313,726
Robert J. Mylod, Jr.
76,612
251,076
327,688
Karen Peacock
60,000
251,076
311,076
Condoleezza Rice
78,224
251,076
329,300
R. Bryan Schreier(3)
56,639
251,076(4)
307,715
Michael Seibel(5)
3,607
98,384
101,991
Margaret C. Whitman(6)
23,764
23,764
(1)
Amounts shown do not reflect compensation actually received by the director, and there can be no assurance that these amounts will ever be realized by the non-employee directors. Instead, the amount shown is the grant date fair value of the RSU awards granted in fiscal 2020 computed in accordance with ASC Topic 718 — Compensation — Stock Compensation (“ASC Topic 718”), disregarding forfeiture assumptions.
(2)
100% of the shares of our Class A common stock underlying the RSUs vest on May 21, 2021 or the day before the next annual meeting of our stockholders, if earlier, subject to the director’s continued service with us. See “Director Compensation” above.
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BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
(continued)

(3)
Mr. Schreier resigned as a member of the board of directors, effective December 10, 2020 and as such, his fees were prorated for the portion of 2020 in which he served as a director, as reflected in the amount set forth in the table above.
(4)
11,297 unvested RSUs, representing a grant date fair value of $251,076, were forfeited upon Mr. Schreier’s resignation from the board of directors on December 10, 2020.
(5)
Mr. Seibel joined our board of directors in December 2020, and therefore his fees and equity awards were prorated for the portion of 2020 in which he served as a director, as reflected in the amount set forth in the table above.
(6)
Ms. Whitman did not stand for re-election as a director at the 2020 annual meeting of stockholders and as such, her term as director ended effective as of May 21, 2020 and her fees were prorated for the portion of 2020 in which she served as a director, as reflected in the amount set forth in the table above.
The following table lists all outstanding equity awards held by non-employee directors as of December 31, 2020:
Name
Date of
Grant(1)
Number of Shares
Underlying
Unvested Stock Awards (#)
Donald W. Blair
5/21/2020
11,297
Lisa Campbell
5/21/2020
11,297
Paul E. Jacobs
5/21/2020
11,297
Robert J. Mylod, Jr.
5/21/2020
11,297
Karen Peacock
5/21/2020
11,297
Condoleezza Rice
5/21/2020
11,297
Michael Seibel(2)
12/11/2020
4,632
(1)
100% of the shares of our Class A common stock underlying the RSUs vest on May 21, 2021 or the day before the next annual meeting of our stockholders, if earlier, subject to the director’s continued service with us. See “Director Compensation” above.
(2)
Mr. Seibel joined our board of directors in December 2020, and therefore the number of shares covered by his equity award was prorated for the portion of 2020 in which he served as a director, as reflected in the figure set forth in the table above.
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PROPOSAL NO. 1—ELECTION OF DIRECTORS
As of March 15, 2021, our board of directors consisted of eight directors. Until the outstanding shares of our Class B common stock represent less than a majority of the combined voting power of our common stock, we will have a single class of directors with each director elected for a one-year term and until their successor is duly elected and qualified, or until their earlier resignation or removal.
Nominees
Our nominating and corporate governance committee has recommended, and our board of directors has approved, Andrew W. Houston, Donald W. Blair, Lisa Campbell, Paul E. Jacobs, Robert J. Mylod, Jr., Karen Peacock and Michael Seibel as nominees for election as directors at the Annual Meeting. If elected, each of the nominees will serve as directors until the 2022 annual meeting of stockholders and until their successors are duly elected and qualified. Each of the nominees is currently a director of our company, although Mr. Seibel is standing for election by our stockholders for the first time. For information concerning the nominees, please see “Board of Directors and Corporate Governance.” We expect that each of Dr. Jacobs, Messrs. Houston, Blair, Mylod, and Seibel, and Mss. Campbell and Peacock will accept such nomination; however, in the event that a director nominee is unable or declines to serve as a director at the time of the Annual Meeting, the proxies will be voted for any nominee designated by our board of directors to fill such vacancy.
If you are a stockholder of record and you sign your proxy card or vote by telephone or over the Internet but do not give instructions with respect to the voting of directors, your shares will be voted “FOR” the election of Dr. Jacobs, Messrs. Houston, Blair, Mylod, and Seibel, and Mss. Campbell and Peacock. If you are a street name stockholder and you do not give voting instructions to your broker or nominee, your broker will leave your shares unvoted on this matter.
Vote Required
Each director is elected by a plurality of the votes of the shares present virtually or represented by proxy at the meeting and entitled to vote on the election of directors at the Annual Meeting. “Plurality” means that the seven nominees who receive the largest number of votes cast “For” such nominees are elected as directors. As a result, any shares not voted “For” a particular nominee (whether as a result of a withhold vote or a broker non-vote) will not be counted in such nominee’s favor and will have no effect on the outcome of the election.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” EACH OF THE NOMINEES NAMED ABOVE.
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PROPOSAL NO. 2—RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Our audit committee has appointed Ernst & Young LLP, an independent registered public accounting firm, to audit our consolidated financial statements for our fiscal year ending December 31, 2021. Ernst & Young LLP has served as our independent registered public accounting firm since 2013.
At the Annual Meeting, our stockholders are being asked to ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for our fiscal year ending December 31, 2021. Our audit committee is submitting the appointment of Ernst & Young LLP to our stockholders because we value our stockholders’ views on our independent registered public accounting firm and as a matter of good corporate governance. Notwithstanding the appointment of Ernst & Young LLP, and even if our stockholders ratify the appointment, our audit committee, in its discretion, may appoint another independent registered public accounting firm at any time during our fiscal year if our audit committee believes that such a change would be in the best interests of our company and our stockholders. If our stockholders do not ratify the appointment of Ernst & Young LLP, our board of directors may reconsider the appointment. Representatives of Ernst & Young LLP will be present at the Annual Meeting, and they will have an opportunity to make a statement and will be available to respond to appropriate questions from our stockholders.
Fees Paid to the Independent Registered Public Accounting Firm
The following table presents fees for professional audit services and other services rendered to our company by Ernst & Young LLP for our fiscal years ended December 31, 2020 and 2019.
2020
2019
Audit Fees(1)
$    3,082,000
$    3,203,000
Audit-Related Fees(2)
$711,000
$571,000
Tax Fees(3)
$126,000
$321,000
All Other Fees(4)
$6,000
$6,000
Total Fees
$3,925,000
$4,101,000
(1)
Consists of fees billed for professional services rendered in connection with the audit of our consolidated financial statements, audit of our internal controls over financial reporting, reviews of our quarterly consolidated financial statements, related accounting consultations, and statutory audits of our international subsidiaries.
(2)
Consists of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of our consolidated financial statements, audit of our internal controls over financial reporting, and not reported under “Audit Fees”. For fiscal 2019 and fiscal 2020, this includes fees for professional services with respect to the Statement on Standards for Attestation Engagements (SSAE) No. 16 and other service organization control related examinations, certifications, and assessments, and for fiscal 2019, due diligence services related to mergers and acquisitions.
(3)
Tax Fees consist of fees for professional services for domestic and international tax advisory services.
(4)
Consists of aggregate fees billed for products and services provided by the independent registered public accounting firm other than those disclosed above, which relate to subscription fees paid for access to online accounting research software applications.
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PROPOSAL NO. 2—RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (continued)

Auditor Independence
In our fiscal year ended December 31, 2020, there were no other professional services provided by Ernst & Young LLP, other than those listed above, that would have required our audit committee to consider their compatibility with maintaining the independence of Ernst & Young LLP.
Audit Committee Policy on Pre-Approval of Audit and Permissible Non-Audit Services of Independent Registered Public Accounting Firm
Our audit committee has established a policy governing our use of the services of our independent registered public accounting firm. Under this policy, our audit committee is required to pre-approve all services performed by our independent registered public accounting firm in order to ensure that the provision of such services does not impair the public accountants’ independence. All services provided by Ernst & Young LLP for our fiscal years ended December 31, 2019 and 2020 were pre-approved by our audit committee.
Vote Required
The ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for our fiscal year ending December 31, 2021 requires the affirmative vote of a majority of the voting power of the shares of our common stock present virtually or by proxy at the Annual Meeting and entitled to vote thereon. Abstentions will have the effect of a vote against this proposal, and broker non-votes will have no effect.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.
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REPORT OF THE AUDIT COMMITTEE
The audit committee is a committee of the board of directors comprised solely of independent directors as required by Nasdaq listing standards and SEC rules and regulations. The composition of the audit committee, the attributes of its members and the responsibilities of the audit committee, as reflected in its charter, are intended to be in accordance with applicable requirements for corporate audit committees. With respect to Dropbox’s financial reporting process, Dropbox’s management is responsible for (1) establishing and maintaining internal controls and (2) preparing Dropbox’s consolidated financial statements. Dropbox’s independent registered public accounting firm, Ernst & Young LLP (“Ernst & Young”), is responsible for performing an independent audit of Dropbox’s consolidated financial statements and the effectiveness of the company’s internal control over financial reporting. It is the responsibility of the audit committee to oversee these activities. It is not the responsibility of the audit committee to prepare Dropbox’s financial statements. These are the fundamental responsibilities of management. In the performance of its oversight function, the audit committee has:
reviewed and discussed the audited consolidated financial statements with management, internal audit and Ernst & Young;
discussed with Ernst & Young the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (“PCAOB”); and
received the written disclosures and the letter from Ernst & Young required by applicable requirements of the PCAOB regarding the independent accountant’s communications with the audit committee concerning independence, and has discussed with Ernst & Young its independence.
Based on the audit committee’s review and discussions with management and Ernst & Young, the audit committee recommended to the board of directors that the audited financial statements be included in the Annual Report on Form 10-K for the fiscal year ended December 31, 2020 for filing with the SEC.
Respectfully submitted by the members of the audit committee of the board of directors:
Donald W. Blair (Chair)
Robert J. Mylod, Jr.
Lisa Campbell
This report of the audit committee is required by the SEC and, in accordance with the SEC’s rules, will not be deemed to be part of or incorporated by reference by any general statement incorporating by reference this proxy statement into any filing under the Securities Act of 1933, as amended (“Securities Act”), or under the Exchange Act, except to the extent that we specifically incorporate this information by reference, and will not otherwise be deemed “soliciting material” or “filed” under either the Securities Act or the Exchange Act.
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PROPOSAL NO. 3—ADVISORY VOTE ON THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS
In accordance with the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”) and SEC rules, we are providing our stockholders with the opportunity to vote to approve, on an advisory or non-binding basis, the compensation of our named executive officers as disclosed pursuant to Section 14A of the Exchange Act. This proposal, commonly known as a “Say-on-Pay” proposal, gives our stockholders the opportunity to express their views on our named executive officers’ compensation as a whole. This vote is not intended to address any specific item of compensation or any specific named executive officer, but rather the overall compensation of all of our named executive officers and the philosophy, policies and practices described in this proxy statement.
The Say-on-Pay vote is advisory, and therefore is not binding on us, our compensation committee, or our board of directors. The Say-on-Pay vote will, however, provide information to us regarding investor sentiment about our executive compensation philosophy, policies and practices, which our compensation committee will be able to consider when determining executive compensation for the remainder of the current fiscal year and beyond. Our board of directors and our compensation committee value the opinions of our stockholders. To the extent there is any significant vote against the compensation of our named executive officers as disclosed in this proxy statement, we will endeavor to communicate with stockholders to better understand the concerns that influenced the vote and consider our stockholders’ concerns, and our compensation committee will evaluate whether any actions are necessary to address those concerns.
We believe that the information provided in the section titled “Executive Compensation,” and in particular the information discussed in the section titled “Executive Compensation—Compensation Philosophy,” demonstrates that our executive compensation program was designed appropriately and is working to ensure management’s interests are aligned with our stockholders’ interests to support long-term value creation. Accordingly, we ask our stockholders to vote “FOR” the following resolution at the Annual Meeting:
“RESOLVED, that the stockholders approve, on an advisory basis, the compensation paid to our named executive officers, as disclosed in the proxy statement for the Annual Meeting pursuant to the compensation disclosure rules of the SEC, including the compensation discussion and analysis, compensation tables and narrative discussion and other related disclosure.”
Vote Required
The approval, on an advisory basis, of the compensation of our named executive officers, requires the affirmative vote of a majority of the voting power of the shares of our common stock present virtually or by proxy at the Annual Meeting and entitled to vote thereon to be approved. Abstentions will have the effect of a vote against this proposal, and broker non-votes will have no effect.
As an advisory vote, the result of this proposal is non-binding. Although the vote is non-binding, our board of directors and our compensation committee value the opinions of our stockholders and will consider the outcome of the vote when making future compensation decisions for our named executive officers.
We currently hold our advisory vote on executive compensation annually. Accordingly, the next advisory vote on executive compensation will be held at our 2022 annual meeting of stockholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE APPROVAL, ON AN ADVISORY BASIS, OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS.
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EXECUTIVE OFFICERS
The following table identifies certain information about our executive officers as of March 15, 2021. Our executive officers are appointed by, and serve at the discretion of, our board of directors. There are no family relationships among any of our directors or executive officers.
Name
Age
Position
Andrew W. Houston
38
Chief Executive Officer, Co-Founder, and Chairman
Timothy Regan(1)
44
Chief Financial Officer
Bart E. Volkmer(2)
46
Chief Legal Officer
Timothy Young(3)
39
President
(1)
Mr. Regan has served as our Chief Financial Officer since September 2020, and previously served as our Chief Accounting Officer from December 2016 until September 2020.
(2)
Mr. Volkmer has served as our Chief Legal Officer since January 2020, and previously served as our General Counsel from June 2016 until January 2020.
(3)
Mr. Young has served as our President since November 2020, and previously served as our Senior Vice President and General Manager, Core Dropbox from October 2019 until November 2020.
For Mr. Houston’s biography, see “Nominees for Director.”
Timothy Regan. Timothy Regan, CPA, has served as Dropbox’s Chief Financial Officer since September 2020. Previously, he served as Dropbox’s Chief Accounting Officer from December 2016 to September 2020. From January 2011 to December 2016, he served as VP Finance Controller at Pandora Media, Inc., or Pandora. Prior to joining Pandora, he held senior positions at Dolby Laboratories, Inc., and Ernst and Young, LLP. Mr. Regan received his Bachelor of Arts in Accounting from Georgetown University in 1999 and his Master of Business Administration from the University of California, Berkeley Haas School of Business, in 2011.
Bart E. Volkmer. Mr. Volkmer has served as our Chief Legal Officer since January 2020. From June 2016 to January 2020, Mr. Volkmer served as our General Counsel and from August 2011 to June 2016, Mr. Volkmer served as our Head of Litigation & Regulatory. Prior to joining Dropbox, Mr. Volkmer practiced law at Wilson Sonsini Goodrich & Rosati, a law firm, from 2003 to 2011, where he counseled early-stage and established technology companies. Mr. Volkmer holds a J.D. from Santa Clara University School of Law and a B.A. in English from Creighton University.
Timothy Young. Timothy Young has served as our President since November 2020. From October 2019 to November 2020, Mr. Young served as our Senior Vice President and General Manager, Core Dropbox. Mr. Young has extensive experience managing, growing and investing in technology companies. Prior to joining Dropbox and since January 2015, Mr. Young has served as a Founder of Hidden Hand Capital, which invests in early stage technology companies. Prior to founding Hidden Hand Capital, from May 2011 to September 2014, he was Vice President of Product and Engineering at VMware, a cloud infrastructure and digital workspace company, where he led product development and strategic product planning for cloud and mobile applications. From June 2005 to May 2011, he was the Founder and CEO of Socialcast, which was acquired by VMware. From December 2009 to December 2010, he was a Co-Founder of about.me, which was acquired by AOL. Mr. Young attended the University of California, Riverside, where he studied Computer Science.
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EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
This Compensation Discussion and Analysis describes the material elements of our executive compensation program during 2020. It also provides an overview of our executive compensation philosophy, including our principal compensation policies and practices. Finally, it analyzes how and why our compensation committee arrived at the specific compensation decisions for our executive officers, including our named executive officers in 2020, and discusses the key factors that our compensation committee considered in determining their compensation.
Our named executive officers for 2020 were:
Named Executive Officer
Title
Andrew W. Houston
Chief Executive Officer
Timothy Regan
Chief Financial Officer
Timothy Young
President
Bart E. Volkmer
Chief Legal Officer
Ajay V. Vashee(1)
Former Chief Financial Officer
Olivia Nottebohm(2)
Former Chief Operating Officer
(1)
Mr. Vashee resigned from the company in October 2020.
(2)
Ms. Nottebohm resigned from the company in February 2021.
Executive Summary
Who We Are
We were founded in 2007 with a simple idea: Life would be a lot better if everyone could access their most important information anytime from any device. Over the past decade, we’ve largely accomplished that mission by building tools to help people work from anywhere—and along the way we recognized that for most of our users, sharing and collaborating on Dropbox was even more valuable than storing files. We serve more than 700 million registered users across 180 countries.
Our market opportunity has grown as we’ve expanded from keeping files in sync to keeping teams in sync. Today, Dropbox is well-positioned to reimagine the way work gets done. We're focusing on reducing the inordinate amount of time and energy the world spends on “work about work”—tedious tasks like searching for content, switching between applications, and managing workflows. Dropbox breaks down silos by centralizing the flow of information between the products and services our users prefer, even if they’re not our own. In a world where using technology at work can be fragmented and distracting, Dropbox makes it easy to focus on the work that matters.
The popularity of our platform drives viral growth, which has allowed us to scale rapidly and efficiently. We’ve built a thriving global business with 15.48 million paying users.
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EXECUTIVE COMPENSATION (continued)

2020 Business Results and Business Strategy

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EXECUTIVE COMPENSATION (continued)

Executive Compensation Policies and Practices
Our compensation committee evaluates our executive compensation program on a regular basis to ensure that it is consistent with our short-term and long-term goals given the dynamic nature of our business and the competitive market in which we compete for executive talent. The following summarizes our executive compensation program and related policies and practices:
What we do
What we don’t do
✔ Maintain an Independent Compensation Committee.
The compensation committee consists solely of
independent directors who establish our compensation
practices.

✔  Retain an Independent Compensation Advisor. The
compensation committee has engaged its own
compensation consultant to provide information, analysis,
and other advice on executive compensation independent
of management. This consultant performed no other
consulting or other services for us in 2020.

✔ Annual Executive Compensation Review. The
compensation committee conducts an annual review of our
compensation strategy and a review of our compensation-
related risk profile to ensure that our compensation
programs do not encourage excessive or inappropriate
risk-taking.

✔  Compensation At-Risk. Our executive compensation
program is designed so that a significant portion of our
executive officer’s compensation is “at risk” based on
corporate performance, as well as equity-based, to align
the interests of our executive officers and stockholders.

✔ Use a Pay-for-Performance Philosophy. The majority of
our executive officers’ compensation is directly linked to
corporate performance; we also structure their target total
direct compensation opportunities with a significant long-
term equity component, thereby making a substantial
portion of each executive officer’s target total direct
compensation dependent upon our stock price and/or total
stockholder return.

✔ Succession Planning. We review the risks associated with
our key executive officer positions to ensure adequate
succession plans are in place.
✗ No Guaranteed Bonuses. We do not provide guaranteed
bonuses to our executive officers.

✗ No Executive Retirement Plans. We do not offer defined
benefit pension plans or any non-qualified deferred
compensation plans or arrangements to our executive
officers, other than the plans and arrangements that are
available to all employees.

✗ No Hedging or Pledging. We prohibit our employees
(including our executive officers) and the non-employee
members of our board of directors from hedging or pledging
our securities.

✗ No Tax Payments on Perquisites. We do not provide any
tax reimbursement payments (including “gross-ups”) on any
perquisites or other personal benefits.


✗ No Excise Tax Payments on Future Post-Employment
Compensation Arrangements. We do not provide any
excise tax reimbursement payments (including “gross-ups”)
on payments or benefits contingent upon a change in
control of the company.

✗ No Special Welfare or Health Benefits. We do not provide
our executive officers with any welfare or health benefit
programs, other than participation in our broad-based
employee programs. All highly compensated employees
are eligible for special long-term disability.
Executive Compensation Philosophy and Objectives
Our executive compensation program is guided by our overarching philosophy of paying for demonstrable performance. Consistent with this philosophy, we have designed our executive compensation program to achieve the following primary objectives:
Provide market-competitive compensation and benefit levels that will attract, retain, motivate, and reward a highly-talented team of executive officers within the context of responsible cost management;
Establish a direct link between our financial, operational, and strategic objectives and results, as well as our values, and the compensation of our executive officers; and
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EXECUTIVE COMPENSATION (continued)

Align the interests and objectives of our executive officers with those of our stockholders by linking the long-term equity incentive compensation opportunities to stockholder value creation and their cash incentives to our annual performance.
Pay-for-Performance
We believe our executive compensation program is reasonable, competitive, and appropriately balances the goals of attracting, motivating, rewarding, and retaining our executive officers with the goal of aligning their interests with those of our stockholders. To achieve this alignment and to motivate and reward individual initiative and effort, a substantial portion of our executive officers’ target annual total direct compensation opportunity is both variable in nature and “at-risk.”
We emphasize variable compensation that appropriately rewards our executive officers, including our named executive officers, through two separate compensation elements:
Our annual cash bonus plan provides cash payments if our executive officers produce short-term financial, operational, and strategic results that meet or exceed the objectives set forth in our annual operating plan.
Equity-based awards, which represent a majority of our executive officers’ target total direct compensation opportunities, the value of which depends entirely on the value of our common stock, incentivize our executive officers to build sustainable long-term value for the benefit of our stockholders.
These variable pay elements are intended to result in a substantial portion of our executive officers’ annual target total direct compensation being contingent (rather than fixed) in nature, with the amounts ultimately payable subject to variability above or below target levels commensurate with our actual performance.
We believe that this design provides balanced incentives for our executive officers to drive financial performance and long-term growth. Our compensation committee regularly evaluates the relationship between the reported values of the equity awards granted to our executive officers and the amount of realizable and realized value from such awards in subsequent years.
Compensation-Setting Process
Role of Compensation Committee and the Stock Committee
The compensation committee discharges many of the responsibilities of our board of directors relating to the compensation of our executives and non-employee directors. The compensation committee has overall responsibility for overseeing our compensation and benefits policies generally, and overseeing and evaluating the compensation plans, policies and practices applicable to our chief executive officer and other executive officers.
The compensation committee makes all final decisions regarding the compensation of our chief executive officer and our other executive officers.
In carrying out its responsibilities, the compensation committee evaluates our compensation policies and practices with a focus on the degree to which these policies and practices reflect our executive compensation philosophy, develops strategies and makes decisions that it believes further our philosophy or align with developments in executive compensation practices, and reviews the performance of our executive officers.
The compensation committee’s authority, duties, and responsibilities are further described in its charter, which is reviewed annually and revised and updated as warranted. The charter is available on our investor relations website at investors.dropbox.com.
We also formed a stock committee, which is currently composed of our Chief Financial Officer, our Chief People Officer, and a non-employee director appointed by our board. Mr. Schreier previously served as the non-employee director on the stock committee until his resignation from our board of directors in December 2020, at which time Ms. Peacock was appointed to serve as the non-employee director on the stock committee. Ms. Nottebohm, our former Chief Operating Officer, also previously served on the stock committee until her resignation from the company in February 2021, at which time our Chief People Officer was appointed to serve on the stock committee. The stock committee has authority to grant equity awards to (a) employees who hold a title below vice president and (b) consultants subject to certain limitations established from time to time by the compensation committee.
Role of Compensation Consultant
The compensation committee engages an external compensation consultant to assist the committee by providing information, analysis, and other advice relating to our executive compensation program and the decisions resulting from its annual executive
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compensation review. The compensation consultant reports directly to the compensation committee and its chair, and serves at the discretion of the compensation committee, which reviews the engagement annually.
For 2020, the compensation committee retained Compensia to serve as its compensation advisor to advise on executive and director compensation matters, including competitive market pay practices for our executive officers, and data analysis and selection of the compensation peer group.
During 2020, Compensia attended compensation committee meetings and provided the following services:
Consulted with the compensation committee chair and other members between compensation committee meetings;
Provided competitive market data based on the compensation peer group for our executive officer positions, and evaluation of how the compensation we pay our executive officers compares both to our performance and to how the companies in our compensation peer group compensate their executives;
Provided competitive market data based on the compensation peer group for non-employee directors, and evaluation of how the compensation we pay our non-employee directors compares to companies in our compensation peer group;
Reviewed and analyzed base salary levels, annual incentive bonus opportunities, and long-term equity incentive compensation opportunities of our executive officers;
Assessed executive compensation trends within our industry, and updates on corporate governance and regulatory issues and developments;
Reviewed our executive compensation disclosure;
Assessed compensation risk to determine whether our compensation policies and practices are reasonably likely to have a material adverse impact on the company; and
Supported on other ad hoc matters throughout the year.
Compensia did not provide any services to us other than the consulting services to the compensation committee. The compensation committee regularly reviews the objectivity and independence of the advice provided by its compensation consultant on executive compensation matters. The compensation committee has evaluated Compensia’s engagement, and based on the six factors for assessing independence and identifying potential conflicts of interest that are set forth in Exchange Act Rule 10C-1(b)(4), Rule 5605(d)(3)(D) of the Nasdaq Marketplace Rules, and such other factors as were deemed relevant under the circumstances, has determined that its relationship with Compensia and the work of Compensia on behalf of the compensation committee did not raise any conflict of interest, and that Compensia is independent as defined in Rule 5605(a)(2) of the Nasdaq Marketplace Rules.
Role of Management
In discharging its responsibilities, the compensation committee also works with members of our management, including our chief executive officer. Our management assists the compensation committee by providing information on corporate and individual performance, competitive market data, and management’s perspective and recommendations on compensation matters.
Typically, our chief executive officer makes recommendations to the compensation committee regarding compensation matters, including adjustments to annual cash compensation, long-term equity incentive compensation opportunities, and program structures, for our executive officers, except with respect to his own compensation. At the beginning of each year, our chief executive officer reviews the performance of our other executive officers, including our other named executive officers, based on such individual’s level of success in accomplishing the business objectives established for him or her for the prior year and their overall performance during that year, and then shares these evaluations with, and makes recommendations to, the compensation committee for each element of compensation as described above.
The compensation committee reviews and discusses these recommendations and proposals with our chief executive officer and uses them as one factor in determining and approving the compensation for our executive officers.
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Our chief executive officer also attends meetings of our board of directors and the compensation committee at which executive compensation matters are addressed, except with respect to discussions involving his own compensation. Decisions with respect to our chief executive officer’s compensation are made by our compensation committee, which is comprised entirely of independent members of our board of directors.
Competitive Positioning
For purposes of assessing our executive compensation against the competitive market, the compensation committee reviews and considers the compensation levels and practices of a select group of peer companies. This compensation peer group consists of technology companies that are similar to us in terms of revenue, market capitalization, geographical location, and industry sector.
The companies in the compensation peer group for 2020 were approved in November 2019 on the basis of their similarity to us, as determined using the following criteria:
revenue – approximately 0.4x to approximately 2.5x our last four fiscal quarter revenue of approximately $1.52 billion (approximately $609 million to $3.8 billion);
market capitalization – approximately 0.25x to approximately 4.0x our market capitalization of approximately $8.2 billion (approximately $2.0 billion to $33 billion);
industry sector – internet software and services, software, communication equipment, and certain SaaS companies not classified as such; and
relevance – software-as-a-service model or product similarity.
In selecting the 2020 compensation peer group, we chose companies that resulted in us being near the median of the group, in terms of both revenue and market capitalization.
2019 Compensation Peer Group
Changes to Peer Group
2020 Compensation Peer Group
Autodesk
Autodesk
Box
Box
DocuSign
Added:
DocuSign
Fortinet
Guidewire Software
Guidewire Software
LogMeIn
Okta
LogMeIn
Nutanix
Proofpoint
Nutanix
Palo Alto Networks
RingCentral
Okta
ServiceNow
Twilio
Palo Alto Networks
Snap
Zendesk
Proofpoint
Splunk
RingCentral
Square
Removed:
ServiceNow
Tableau Software
Fortinet
Splunk
Twitter
Snap
Square
The Ultimate Software Group
Tableau Software
Twilio
Veeva Systems
The Ultimate Software Group
Twitter
Workday
Zillow Group
Veeva Systems
Zillow Group
Workday
Zendesk
The compensation practices of the compensation peer group were the primary guide used by the compensation committee in 2020 to compare the competitiveness of each compensation element and target total direct compensation (base salary, target annual cash bonus opportunities, and long-term equity incentive compensation).
To analyze the compensation practices of our compensation peer group, Compensia gathered data from public filings (primarily proxy statements) of the peer group companies, as well as from the Radford Global Technology Survey. This market data was then used as a reference point for the compensation committee to assess our current compensation levels in the course of its deliberations on compensation forms and amounts. The compensation committee does not engage in formal benchmarking against other companies’ compensation programs or practices to establish our compensation levels or make specific compensation recommendations with respect to our executive officers, including our named executive officers.
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The compensation committee reviews our compensation peer group each year and adjusts its composition if warranted, taking into account changes in both our business and the businesses of the companies in the peer group.
Compensation Setting
We review the base salary levels, annual cash bonus opportunities, and long-term equity incentive compensation opportunities of our executive officers, including our named executive officers, and all related performance criteria at the beginning of each year, or more frequently as warranted.
We do not establish a specific target for formulating the target total direct compensation opportunities of our executive officers, including our named executive officers.
In making decisions about the compensation of our executive officers, the compensation committee relies primarily on its general experience and subjective considerations of various factors, including the following:
• Our executive compensation program objectives;

• Our performance against the financial, operational, and strategic objectives established by the compensation
committee and our board of directors;

• Each individual executive officer’s knowledge, skills, experience, qualifications, and tenure relative to other similarly-situated executives at the companies in our
compensation peer group;

• The scope of each executive officer’s role and responsibilities compared to other similarly-situated executives at the
companies in our compensation peer group;

• The prior performance of each individual executive officer, based on a subjective assessment of their contributions to our overall performance, ability to lead their business unit or function, and work as part of a team, all of which reflect our
core values;
• The potential of each individual executive officer to contribute to our long-term financial, operational, and strategic
objectives;

• Our chief executive officer’s compensation relative to that of our executive officers, and compensation parity among our
executive officers;

• Our financial performance relative to our compensation peers;

• The compensation practices of our compensation peer group and the positioning of each executive officer’s compensation in a ranking of peer company compensation levels based on
an analysis of competitive market data; and

• The recommendations of our chief executive officer with
respect to the compensation of other executive officers.
These factors provide the framework for compensation decision-making for each executive officer. No single factor is determinative in setting compensation levels, nor is the impact of any individual factor on the determination of pay levels quantifiable.
We do not weight these factors in any predetermined manner, nor do we apply any formulas in developing our compensation recommendations. The members of the compensation committee consider all of this information in light of their individual experience, knowledge of management, knowledge of the competitive market, knowledge of each executive officer, and business judgment in making their recommendations.
In addition, the compensation committee considered feedback from our stockholders and the result of our first Say on Pay vote. Our fiscal 2020 Say on Pay vote reflected 98.7% support from our stockholders, based on the percentage of shares voted. The compensation committee believes this indicates that our stockholders support the philosophy, strategy, objectives, and administration of our executive compensation programs.
We also consider the potential risks in our business when designing and administering our executive compensation program, and we believe our balanced approach to performance measurement and pay delivery serves to avoid misaligned incentives for individuals to undertake excessive or inappropriate risk.
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Compensation Elements
In 2020, the principal elements of our executive compensation program, and the purposes for each element, were as follows:
Element
Type of Element
Compensation Element
Objective
Base Salary
Fixed
Cash
Attract and retain highly talented executives by providing fixed compensation amounts that are competitive in the market and reward performance.
Annual Cash Bonus
Variable
Cash
Motivate our executives to achieve annual business objectives set forth in our annual operating plan and provide financial incentives when we meet or exceed these annual objectives.
Long-Term Equity Incentive Compensation
Variable
Equity
Align the interests of our executives and our stockholders by motivating them to create sustainable long-term stockholder value.
Mix of Pay
Our primary focus in compensating our executive officers is on the longer-term and performance-based elements of target total direct compensation. Under our executive compensation program, approximately 90% of target total direct compensation to our named executive officers (excluding our CEO) was variable in the form of annual cash bonus and long-term equity incentive compensation. Our CEO’s mix of pay is weighted equally between base salary and annual bonus. Mr. Houston does not receive annual equity awards due to his significant holdings as a co-founder. Mr. Houston received a co-founder award in December 2017 prior to our IPO. Details of Mr. Houston’s co-founder award are further described in “Co-Founder Grants” below.

Base Salary
We use base salary to provide each executive officer with a specified level of cash compensation during the year with the expectation that they will perform their responsibilities to the best of their ability and in our best interests.
Generally, we establish the initial base salaries of our executive officers through arm’s-length negotiation at the time we hire the individual executive officer, taking into account their position, qualifications, experience, prior salary level, and the base salaries of our other executive officers. Thereafter, the compensation committee reviews the base salaries of our executive officers each year as part of its annual compensation review, with input from our chief executive officer (except with respect to his own base salary) and makes adjustments as it determines to be reasonable and necessary to reflect the scope of an executive officer’s performance, individual contributions and responsibilities, position in the case of a promotion, and market conditions.
In March 2020, the compensation committee reviewed the base salaries of our executive officers, including our named executive officers (other than Mr. Regan), taking into consideration a competitive market analysis and the recommendations of our chief executive officer, as well as the other factors described in “Compensation-Setting Process—Compensation Setting,” above. Following this review, the compensation committee approved a reduction in Mr. Houston’s base salary, which Mr. Houston requested, to $550,000, effective April 1, 2020.
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The base salaries of our named executive officers for 2020 were:
Named Executive Officer
Base Salary
as of End of 2019 ($)
Base Salary
as of End of 2020 ($)
Percentage
(Decrease) / Increase
Andrew W. Houston
700,000
550,000
(21%)
Timothy Regan
330,000
450,000
36%
Timothy Young
500,000
600,000
20%
Bart E. Volkmer
475,000
475,000
0%
Ajay V. Vashee(1)
550,000
N/A
Olivia Nottebohm(2)
500,000
500,000
0%
(1)
Mr. Vashee resigned from the company in October 2020.
(2)
Ms. Nottebohm joined the company in February 2020 and resigned from the company in February 2021.
In connection with the company’s standard annual review of employee compensation, Mr. Regan’s salary was increased to $375,000, effective February 1, 2020. In connection with Mr. Regan’s promotion to CFO, the compensation committee approved an increase to his salary to $450,000, effective September 15, 2020, in order to reflect his increased responsibilities and align Mr. Regan with similarly-situated executives.
In connection with Mr. Young’s promotion to President, the compensation committee approved an increase to his salary to $600,000, effective November 2, 2020, in order to reflect his increased responsibilities and align Mr. Young with similarly-situated executives.
The base salaries paid to our named executive officers during 2020 are set forth in the “Summary Compensation Table for Fiscal Year 2020” below.
Annual Cash Bonuses
In March 2020, the compensation committee, with input from management, adopted our 2020 annual cash bonus plan (the “2020 Cash Bonus Plan”), which was designed to provide financial incentives for us to meet or exceed the pre-established target levels for revenue and operating margin established under our 2020 annual operating plan. The 2020 Cash Bonus Plan funded based on our actual achievement against the pre-established target levels for the corporate performance measure.
Target Annual Cash Bonus Opportunities
Under the 2020 Cash Bonus Plan, cash bonus payments were based upon an eligible percentage of each participant’s base salary. In March 2020, the compensation committee reviewed and approved the target annual cash bonus opportunities of our executive officers, taking into consideration the recommendations of our chief executive officer (except with respect to his own target annual cash bonus opportunity) as well as the other factors described in “Compensation-Setting Process— Compensation Setting” above.
The target annual cash bonus opportunity for Ms. Nottebohm was established through arm’s-length negotiation at the time of hire, taking into account her position, qualifications, experience, the amount of her prior target annual cash bonus opportunities, and the target annual cash bonus opportunities of our other executive officers. Her 2020 bonus opportunity was pro-rated to reflect her employment with us for less than the entire year.
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The 2020 target annual cash bonus opportunities for our named executive officers were:
Named Executive Officer
Target Annual
Cash Bonus Opportunity
(as a Percentage of Base Salary)
2020 Target Annual Cash
Bonus Opportunity ($)
Andrew W. Houston
100%
587,295
Timothy Regan
65%
216,557
Timothy Young
100%
516,393
Bart E. Volkmer
65%
308,750
Ajay V. Vashee
65%
357,500
Olivia Nottebohm(1)
100%
450,819
(1)
Ms. Nottebohm joined the company in February 2020 and her bonus opportunity was pro-rated to her start date.
Mr. Regan’s target bonus was increased from 50% to 65% in connection with his promotion to CFO. The increase was effective September 15, 2020, and his target annual cash bonus opportunity was pro-rated such that it would be based on 65% of his base salary for the portion of the 2020 fiscal year he spent as CFO and 50% of his base salary for the portion of the 2020 fiscal year he spent in his prior role.
Potential annual cash bonus payments for our executive officers under the 2020 Cash Bonus Plan ranged from zero to 225% of their target annual cash bonus opportunity.


Corporate Performance Measure
The compensation committee approved annual revenue and non-GAAP operating margin, each weighted equally, as components of the corporate performance measure under the 2020 Cash Bonus Plan because we believe incorporating both annual revenue and non-GAAP operating margin aligns with our emphasis on driving profitable growth. For purposes of the 2020 Cash Bonus Plan, “annual revenue” was calculated by excluding the impact of foreign exchange from our annual revenue reflected in our audited financial statements for the 2020 fiscal year and “non-GAAP operating margin” was calculated to exclude the impact of stock-based compensation expense, acquisition-related and other expenses, intangibles amortization, and impairment charges related to real estate assets. The total bonus funding percentage for the corporate performance measure is equal to 50% of the sum of the bonus funding percentages for the annual revenue and non-GAAP operating margin components.
In March 2020, the compensation committee set the target performance levels under the 2020 Cash Bonus Plan at (i) $1,911 million for annual revenue and (ii) 17.8% for non-GAAP operating margin. In addition, the compensation committee approved the performance matrix for funding the 2020 Cash Bonus Plan (as described below), with a 10% reduction to actual payouts to our named executive officers if the company’s stock-based compensation expense exceeded $281 million for the 2020 fiscal year.
With respect to the annual revenue component, the bonus funding was 0% if we did not achieve annual revenue at the threshold revenue performance level, which is 98% of the target performance level. At the threshold revenue performance level, the annual revenue bonus funding percentage was 50%. For annual revenue above the threshold performance level and below 99.5% the target performance level, the annual revenue bonus funding percentage increased linearly up to an annual revenue bonus funding
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percentage of 95%. For revenue performance ± 0.5% of the target revenue number, the annual revenue bonus funding percentage increased linearly from 95% to 105%. For revenue performance from 100.5% of the target revenue performance level to 102% of the target revenue performance level, the annual revenue bonus funding percentage increased linearly up to 150%. The maximum annual revenue bonus funding percentage is 150%.
With respect to the non-GAAP operating margin component, the bonus funding was 0% if we did not achieve non-GAAP operating margin at the threshold performance level of 16.7%. At the threshold non-GAAP operating margin performance level, the non-GAAP operating margin bonus funding percentage was 50%. For non-GAAP operating margin above the threshold performance level, the non-GAAP operating margin bonus funding percentage increased linearly up to the maximum non-GAAP operating margin bonus funding percentage of 150%.
Weight
Threshold
50% Payout
Target
100% Payout
Maximum
150% Payout
Revenue ($M)
50%
$1,872
$1,911
$1,949
Non-GAAP Operating Margin
50%
16.7%
17.8%
19.0%


Individual Performance Factor
In determining the amount of annual cash bonus payments under the 2020 Cash Bonus Plan, the compensation committee considered an evaluation of each executive officer’s individual performance for the year. Generally, this evaluation involved, in the case of our chief executive officer, an evaluation of his performance by the compensation committee and, in the case of our other executive officers, an evaluation by our chief executive officer. These evaluations were based on a review of the various individual performance goals established for our executive officers as part of our annual performance evaluation process. For our executive officers other than our chief executive officer, these goals were established, after consultation with each executive officer. These performance goals were not intended to be formulaic, but rather to serve as the framework upon which our chief executive officer could evaluate the executive officer’s overall performance. Such performance goals were established with reference to each individual executive officer’s position or function within the company and included operational metrics that could reflect corporate or departmental goals or could include specific operational goals with respect to their area of responsibility.
2020 Annual Cash Bonus Decisions
In March 2021, the compensation committee, based on its evaluation, as well as the recommendation of our chief executive officer, determined the size of the bonus pool based on our performance during 2020 and determined the cash bonus payments for our executive officers, including our named executive officers, pursuant to the 2020 Cash Bonus Plan. The compensation committee reviewed our actual annual revenue performance for 2020 and determined that we had achieved annual revenue of $1,915 million, which was approximately 100% of our annual revenue target for the year. In addition, the compensation committee determined that we had achieved non-GAAP operating margin of 21.4% compared to our target of 17.8% for the year. Management subsequently reviewed our actual annual revenue and non-GAAP operating margin performance and determined that a portion of our results were driven by cost savings related to the COVID-19 pandemic such as reduced office costs and reduced travel expenses. As a result,
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management recommended that the compensation committee exercise its discretion to cap the bonus funding percentage for the corporate performance measure at 115% of target to account for the cost savings driven by the COVID-19 pandemic. The compensation committee approved management’s proposal, resulting in a bonus funding percentage of 115% with respect to the corporate performance measure.
Our chief executive officer evaluated the achievement of each executive officer against his or her individual performance objectives and formulated a recommendation for each such executive officer’s annual cash bonus payment for consideration by the compensation committee. These recommendations were based on our chief executive officer’s subjective assessment of each individual’s contributions against the personal performance objectives during the year. In the case of our chief executive officer, the compensation committee evaluated our financial and operational performance for 2020 and formulated a recommended annual cash bonus payment for him.
Based on these evaluations, the compensation committee approved the annual cash bonus payments for our named executive officers for 2020 in the table below. Since stock-based compensation expense did not exceed $281 million for the 2020 fiscal year, there was no reduction to the annual cash bonus payments.
Named Executive Officer
Target Annual Cash
Bonus Payment ($)
Annual Cash Bonus
Payment ($)
Percentage of Target Annual
Cash Bonus Actually Paid
Andrew W. Houston
587,295
675,389
115%
Timothy Regan
216,577
373,595
172%
Timothy Young
516,393
890,778
173%
Bart E. Volkmer
308,750
408,322
132%
Ajay V. Vashee(1)
357,500
0%
Olivia Nottebohm(2)
450,819
0%
(1)
Mr. Vashee resigned from the company in October 2020 and therefore was ineligible to receive his 2020 annual cash bonus.
(2)
Ms. Nottebohm resigned from the company in February 2021 and therefore was ineligible to receive her 2020 annual cash bonus.
The annual cash bonus payments made to our named executive officers for 2020 are set forth in the “Summary Compensation Table for Fiscal Year 2020” below.
Long-Term Equity Incentive Compensation
We view long-term equity incentive compensation in the form of equity awards as a critical element of our executive compensation program. The realized value of these equity awards bears a direct relationship to our stock price, and, therefore, these awards are an incentive for our executive officers, including our named executive officers, to create value for our stockholders. Equity awards also help us retain qualified executive officers in a competitive market.
The amount and forms of the equity awards granted to our executive officers, including our named executive officers, are determined after considering the factors described in “Compensation-Setting Process” above. The size of the equity awards is also intended to be competitive and result in target total direct compensation opportunities that we believe are reasonable and appropriate taking into consideration the factors described in the preceding sentence.
In January 2020, the compensation committee approved a new hire equity grant in the form of restricted stock awards, or RSAs, to Ms. Nottebohm, effective March 1, 2020. In March 2020, the compensation committee approved equity grants in the form of RSAs to Messrs. Volkmer and Vashee, each of which were effective April 1, 2020, and Mr. Regan was granted an equity award in the form of RSUs, effective April 1, 2020. In September 2020, the compensation committee approved an equity grant of RSAs, effective October 1, 2020, to Mr. Regan in connection with his promotion to CFO. In November 2020, the compensation committee approved an equity grant of RSAs, effective December 1, 2020, to Mr. Young in connection with his promotion to President. RSAs have certain stockholder rights, such as the right to vote the shares immediately upon grant and prior to their vesting.
Differentiation was made among our executive officers based on the compensation committee’s review of the competitive market data for their respective positions, internal equity, past performance, and expected future contributions. Mr. Houston does not receive equity-based compensation in light of his significant ownership position in the company.
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The equity awards granted to our named executive officers in 2020 were as follows:
Named Executive Officer
RSUs or RSAs
Aggregate Grant
Date Fair Value ($)
Andrew W. Houston
Timothy Regan
55,770(1)
1,009,437
201,772(2)
3,886,129
Timothy Young(3)
529,568(2)
19,143,883
Bart E. Volkmer
133,848(2)
2,422,649
Ajay V. Vashee
228,658(2)
4,138,710
Olivia Nottebohm
844,759(2)
16,523,486
(1)
RSUs
(2)
RSAs
(3)
The number of shares listed reflect achievement at the target level of performance. The maximum number of shares is 300% of such value.
The time-based RSA award granted to Ms. Nottebohm vests over a four-year period, with one quarter of the shares vesting on February 15, 2021 and the remaining shares vesting in equal quarterly installments over the next three years, contingent upon the named executive officer remaining continuously employed in service with us through each applicable vesting date. The time-based RSA and RSU awards granted to Messrs. Volkmer, Regan, and Vashee vest over a four-year period in equal quarterly installments.
The performance-based RSA granted to Mr. Young is subject to service-based and market-based vesting conditions and may become eligible to vest over an approximately three-year performance period beginning January 1, 2021. The target number of shares subject to the performance-based RSA are divided into three equal tranches, and the shares subject to a tranche may become eligible to vest based on the achievement of stock price goals measured over a consecutive thirty-day trading period during a twelve-month measurement period that begins one month following the one-year anniversary of the grant date of the performance-based RSA (or in the case of the first measurement period, one month following the grant date) and ends one month following the next anniversary of the grant date, as follows:
First Grant Tranche
Measurement Period: 1/1/2021 – 12/31/2021
Second Grant Tranche
Measurement Period: 1/1/2022 – 12/31/2022
Third Grant Tranche
Measurement Period: 1/1/2023 – 12/31/2023
Price Target
​Multiplier
​Price Target
​Multiplier
​Price Target
​Multiplier
Less than $10.00
0%
Less than $10.00
0%
Less than $10.00
0%
$10.00
25%
$10.00
25%
$10.00
25%
$15.00
50%
$15.00
50%
$15.00
50%
$20.00
100%
$21.50
100%
$23.50
100%
$25.00
150%
$25.00
150%
$25.00
150%
$30.00
200%
$30.00
200%
$30.00
200%
$35.00
250%
$35.00
250%
$35.00
250%
$40.00
300%
$40.00
300%
$40.00
300%
No more than 300% of the target number of shares subject to a tranche may become eligible to vest in any measurement period. Mr. Young will generally forfeit any shares subject to a tranche that do not become eligible to vest as of immediately following the end of the measurement period for that tranche.
Any shares subject to the performance-based RSA that become eligible to vest will vest on February 15 following the end of the applicable measurement period, subject to Mr. Young’s continued service with us through that date.
In addition, the shares subject to the performance-based RSA may vest in connection with certain terminations of Mr. Young’s employment and/or a “change in control” (as defined in our 2018 Equity Incentive Plan), as described further below in the section titled “Potential Payments on Termination or Change in Control.”
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The equity awards granted to our named executive officers during 2020 are set forth in the “Summary Compensation Table for Fiscal Year 2020” and under “Grants of Plan-Based Awards in 2020” below.
Welfare and Health Benefits
We have established a tax-qualified Section 401(k) retirement savings plan for our executive officers, including our named executive officers, and other employees who satisfy certain eligibility requirements. Currently, we match contributions made by participants in the plan as follows: dollar for dollar up to $1,500 each quarter up to a maximum of $6,000. We intend for the plan to qualify under Section 401(a) of the Internal Revenue Code (the “Code”), so that contributions by participants to the plan, and income earned on plan contributions, are not taxable to participants until withdrawn from the plan.
Additional benefits received by our executive officers, including our named executive officers, include medical, dental, and vision insurance, fertility benefits, an employee assistance program, commuter and wellness reimbursement programs, health and dependent care flexible spending accounts, a commuter benefit program, health savings accounts, basic and voluntary life and accidental death and dismemberment insurance and disability insurance. Employees who earn over $260,000 per year are provided with voluntary supplemental long-term disability insurance. All of these benefits are provided to our executive officers on the same basis as to all of our employees.
We design our employee benefits programs to be affordable and competitive in relation to the market, as well as compliant with applicable laws and practices. We adjust our employee benefits programs as needed, based upon regular monitoring of applicable laws and practices, changes to the working arrangements of our employees and the competitive market. For example, in connection with our shift to a Virtual First work model, we are replacing a number of our existing reimbursement and allowance programs with a single allowance program that gives our employees more flexibility to be reimbursed for a wide range of wellness, dependent care, productivity and learning and development expenses.
Perquisites and Other Personal Benefits
Currently, we do not view perquisites or other personal benefits as a significant component of our executive compensation program. Accordingly, we do not provide significant perquisites or other personal benefits to our executive officers, including our named executive officers, except as generally made available to our employees, or in situations where we believe it is appropriate to assist an individual in the performance of their duties, to make him or her more efficient and effective, and for recruitment and retention purposes. During 2020, none of our named executive officers received perquisites or other personal benefits that were, in the aggregate, $10,000 or more for each individual.
In the future, we may provide perquisites or other personal benefits in limited circumstances, such as those described in the preceding paragraph. All future practices with respect to perquisites or other personal benefits will be approved and subject to periodic review by the compensation committee.
Employment Arrangements
We have entered into written employment letters with our chief executive officer and each of our other executive officers, including our other named executive officers. Each of these arrangements was approved on our behalf by the compensation committee or our board of directors.
In filling each of our executive positions, our board of directors or the compensation committee, as applicable, recognized that we would need to develop competitive compensation packages to attract qualified candidates in a dynamic labor market. At the same time, our board of directors and the compensation committee were sensitive to the need to integrate new executive officers into the executive compensation structure, balancing both competitive and internal equity considerations.
Each of our employment arrangements provides for “at will” employment (meaning that either we or the executive officer may terminate the employment relationship at any time with or without cause) and sets forth the initial compensation arrangements for the executive officer, including an initial base salary, participation in our employee benefit programs, an equity award recommendation, and, in some cases, sign-on bonuses and reimbursement or payment of relocation expenses. These employment arrangements also prohibit the executive officer from engaging directly or indirectly in competition with us during their employment, diverting our customers to a competitor, or disclosing our confidential information or business practices, and recruiting or soliciting any of our employees for a period after their employment.
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Our named executive officers are also eligible to enter into change in control and severance agreements with the company. These post-employment compensation terms are discussed in “Post-Employment Compensation” below.
Post-Employment Compensation
We have entered into change in control and severance agreements with each of our executive officers, including each of our named executive officers. These agreements provide these individuals with certain protection in the event of their termination of employment under specified circumstances, including following a change in control of the company.
We believe that these protections were necessary to induce these individuals to accept a demanding position with the company and help retain them. These arrangements provide reasonable compensation to an executive officer if they leave our employ under certain circumstances to facilitate transition to new employment. Further, in some instances, we seek to mitigate any potential employer liability and avoid future disputes or litigation by requiring a departing executive officer to sign a separation and release agreement as a condition to receiving post-employment compensation payments or benefits. We also believe that these arrangements help maintain our executive officers’ continued focus and dedication to their assigned duties to maximize stockholder value if there is a potential transaction that could involve a change in control of the company. The terms and conditions were approved by our board of directors after an analysis of competitive market data.
All payments and benefits in the event of a change in control of the company are payable only if there is a subsequent loss of employment by an executive officer (a so-called “double-trigger” arrangement). In the case of the acceleration of vesting of outstanding equity awards, we use this double-trigger arrangement to protect against the loss of retention value following a change in control of the company, and to avoid windfalls, both of which could occur if vesting of either equity or cash-based awards accelerated automatically as a result of the transaction.
Mr. Houston’s “Co-Founder Grant,” as described below, vests in connection with our acquisition, and as noted above, the performance-based RSA granted to Mr. Young in November 2020 may vest in connection with certain terminations of Mr. Young’s employment and/or a “change in control” (as defined in our 2018 Equity Incentive Plan), each as described further below in the section titled “Potential Payments on Termination or Change in Control.”
Hedging and Pledging Prohibitions
As part of our Insider Trading Policy, our employees (including our executive officers and the non-employee members of our board of directors) are prohibited from trading in publicly-traded options, such as puts and calls, and other derivative securities with respect to our securities. This includes any hedging or similar transaction designed to decrease the risks associated with holding shares of our common stock. In addition, our employees (including our executive officers and the non-employee members of our board of directors) are prohibited from holding our common stock in a margin account or pledging our securities as collateral for a loan.
Tax and Accounting Considerations
We take the applicable tax and accounting requirements into consideration in designing and operating our executive compensation program.
Deductibility of Executive Compensation
Generally, Section 162(m) of the Code disallows public companies a tax deduction for federal income tax purposes of remuneration in excess of $1 million paid to their chief executive officer and certain other current and former executive officers that are “covered employees” within the meaning of Section 162(m) of the Code, subject to certain exceptions. The regulations promulgated under Section 162(m) of the Code currently contain a transition rule that applies to companies, such as ours, that become subject to Section 162(m) of the Code by reason of becoming publicly held. Under this rule, certain compensation granted during a transition period (and, with respect to RSU awards, that is paid out before the end of the transition period) currently is not counted toward the deduction limitations of Section 162(m) of the Code if the compensation is paid under a compensation arrangement that was in existence before the effective date of the initial public offering, and certain other requirements are met. While certain of our equity awards may be eligible to be excluded from our deductibility limitation of Section 162(m) of the Code pursuant to this transition rule, the compensation committee has not adopted a policy that all equity or other compensation must be deductible.
In approving the amount and form of compensation for our executive officers, the compensation committee considers all elements of our cost of providing such compensation, including the potential impact of Section 162(m) of the Code. The compensation committee
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may, in its judgment, approve compensation that may not be deductible for federal income tax purposes when it believes that such compensation is in our best interests or the best interests of our stockholders.
While the transition rule for newly-public companies may help minimize the effect of the Section 162(m) deduction limit in the short-term, it is possible, going forward, that some portion of our executive officer compensation might not be fully deductible by us for federal income tax purposes.
Taxation of Parachute Payments and Deferred Compensation
We do not provide, and have no obligation to provide, any of our named executive officers with a “gross-up” payment for any tax liability he or she might owe because of the application of Sections 280G, 4999 or 409A of the Code. If any of the payments or benefits provided for under the change in control and severance agreements or otherwise payable to a named executive officer would constitute “parachute payments” within the meaning of Section 280G of the Code and could be subject to the related excise tax, he or she would receive either full payment of such payments and benefits or such lesser amount that would cause no portion of the payments and benefits being subject to the excise tax, whichever results in the greater after-tax benefits to our named executive officer.
Accounting for Stock-Based Compensation
Our compensation committee considers accounting effects in designing compensation plans and arrangements for our executive officers and other employees. Chief among these is ASC Topic 718, the standard which governs the accounting treatment of stock-based compensation awards. ASC Topic 718 requires companies to measure the compensation expense for all share-based payment awards made to employees and directors, including stock options, restricted stock units and restricted stock awards, based on the grant date “fair value” of these awards. This calculation is performed for accounting purposes and reported in the compensation tables below, even though our executive officers may realize no value from their awards. ASC Topic 718 also requires companies to recognize the compensation cost of their share-based payment awards in their income statements over the period that an executive officer is required to render service in exchange for the option or other award.
In December 2017, the board of directors approved a grant to our co-founders of RSAs with respect to 14.7 million shares of Class A common stock in the aggregate, or collectively, the Co-Founder Grants, of which 10.3 million RSAs were granted to Mr. Houston, our co-founder, chief executive officer, and chairman of the board of directors, and 4.4 million RSAs were granted to Mr. Ferdowsi, our co-founder and a former director and officer. These Co-Founder Grants have service-based, market-based, and performance-based vesting conditions. The Co-Founder Grants are eligible to vest based on the achievement of certain stock price goals (each, a “Stock Price Target”) measured over a consecutive thirty-day trading period during the period that began on January 2, 2019, and ends on the earliest to occur of (i) the date on which all shares subject to the Co-Founder Grants vest, (ii) the date the applicable co-founder ceases to satisfy the service-based vesting condition, and (iii) March 23, 2028. See “Co-Founder Grants” below.
We estimated the grant date fair value of the Co-Founder Grants using a model based on multiple stock price paths developed through the use of a Monte Carlo simulation that incorporates into the valuation the possibility that the Stock Price Targets may not be satisfied. The average grant date fair value of each Co-Founder Grant was estimated to be $10.60 per share, and we will recognize total stock-based compensation expense of $156.2 million over the requisite service period of each tranche, which ranged from 2.9 to 6.9 years, using the accelerated attribution method. If the Stock Price Targets are met sooner than the derived service period, we will adjust our stock-based compensation to reflect the cumulative expense associated with the vested awards. We will recognize stock-based compensation expense if the requisite service period is provided, regardless of whether the market conditions are achieved. In March 2020, Mr. Ferdowsi resigned as a member of the board and as an officer of the company. As a result, he ceased to satisfy the service-based vesting condition of his Co-Founder Grant as of March 19, 2020 (the “Expiration Date”). None of the 4.4 million RSAs subject to Mr. Ferdowsi’s Co-Founder Grant had vested prior to the Expiration Date. Accordingly, all were forfeited by Mr. Ferdowsi and reacquired by the company as of that date. This forfeiture also resulted in a full reversal of the historical stock-based compensation expense related to Mr. Ferdowsi’s award that had been recognized by the company prior to the Expiration Date. Any future stock-based compensation expense that would have been taken related to Mr. Ferdowsi’s award will be cancelled. See “Co-Founder Grants” below.
In October 2020, the compensation committee approved an equity grant of RSAs, effective December 1, 2020, to Mr. Young in connection with his promotion to President. The performance-based RSA granted to Mr. Young is subject to service-based and market-based vesting conditions and may become eligible to vest over an approximately three-year performance period beginning January 1, 2021. The target number of shares subject to the performance -based RSA are divided into three equal tranches, and the
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shares subject to a tranche may become eligible to vest based on the achievement of stock price goals measured over a consecutive thirty-day trading period during a twelve-month measurement period that begins one month following the one-year anniversary of the grant date of the performance-based RSA (or in the case of the first measurement period, one month following the grant date) and ends one month following the next anniversary of the grant date. No more than 300% of the target number of shares subject to a tranche may become eligible to vest in any measurement period. Mr. Young will generally forfeit any shares subject to a tranche that do not become eligible to vest as of immediately following the end of the measurement period for that tranche. See “Compensation Elements—Long-Term Equity Incentive Compensation” above for additional information regarding Mr. Young’s performance-based RSA.
We estimated the grant date fair value of Mr. Young’s performance-based RSA using a model based on multiple stock price paths developed through the use of a Monte Carlo simulation that incorporates into the valuation the potential stock price goals that could be achieved during each measurement period. We will recognize approximately $19.1 million in stock-based compensation expense associated with this award using the accelerated attribution method through February 15, 2024. We will recognize stock-based compensation expense if the requisite service period is provided, regardless of whether the market conditions are achieved. If Mr. Young’s employment with us is terminated, stock-based compensation expense associated with unvested tranches will be reversed and any future stock-based compensation expense that would have been taken will be cancelled from the grant date through February 15, 2024.
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Report of the Compensation Committee
The compensation committee has reviewed and discussed with management the Compensation Discussion and Analysis provided above. Based on its review and discussions, the compensation committee recommended to the board of directors that the Compensation Discussion and Analysis be included in this proxy statement and Dropbox’s Annual Report on Form 10-K for our fiscal year ended December 31, 2020.
Respectfully submitted by the members of the compensation committee of the board of directors:
Condoleezza Rice (Chair)
Robert J. Mylod, Jr.
Karen Peacock
Michael Seibel
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Compensation Risk Assessment
Our management regularly assesses and discusses with the compensation committee our compensation programs, policies, and practices for our employees as they relate to our risk management. In this regard, we undertake a risk review of our employee compensation programs, policies, and practices (including our executive compensation program) each year to determine whether these programs, policies, and practices contain features that might create undue risks or encourage unnecessary and excessive risk-taking that could threaten our value. Based upon this review, we believe that any risks arising from such programs, policies, and practices are not reasonably likely to have a material adverse effect on us.
Our employees’ base salaries are fixed in amount and thus we do not believe that they encourage excessive risk-taking. While performance-based cash bonuses and sales commissions focus on achievement of short-term or annual goals, which may encourage the taking of short-term risks at the expense of long-term results, we believe that our compensation policies and the risk mitigation features of our cash bonus plans help mitigate this risk and our performance-based cash bonuses and sales commissions are limited, representing a small portion of the total compensation opportunities available to most non-executive employees. We also believe that our performance-based cash bonuses and sales commissions appropriately balance risk and the desire to focus our employees on specific short-term goals important to our success, and do not encourage unnecessary or excessive risk-taking.
A significant proportion of the compensation provided to most of our employees involves long-term incentive compensation in the form of equity awards that we believe are important to help further align our employees’ interests with those of our stockholders. These equity awards directly tie their expectations of compensation to their contributions to the long-term value of our company. We do not believe that these equity awards encourage unnecessary or excessive risk-taking given their multi-year vesting schedules and since their ultimate value is tied to our stock price.
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Summary Compensation Table for Fiscal Year 2020
Name and Principal Position
Year
Salary
($)
Bonus
($)
Stock
Awards
($)(1)
Non-equity
Incentive Plan
Compensation
($)(2)
All Other
Compensation
($)(3)
Total
($)
Andrew W. Houston
Chief Executive Officer
and Co-Founder
2020
587,500
675,389
6,000
1,268,889
2019
700,000
679,192
6,000
1,385,192
2018
675,000
548,049
6,000
1,229,049
Timothy Regan
Chief Financial Officer
2020
​393,415
4,895,566
373,595
​6,000
5,668,576
Timothy Young
President
2020
516,667
19,143,883(4)
890,778
6,000
20,557,328
2019(5)
115,705
20,293,391(6)
116,438
1,500
20,527,034
Bart E. Volkmer
Chief Legal Officer
2020
​475,000
2,422,649
408,322
​4,500
3,310,471
​2019
472,917
​—
2,333,167
​384,213
4,500
3,194,797
​2018
445,833
​58,813(7)
2,570,746
​452,719
6,000
3,534,111
Ajay V. Vashee
Former Chief Financial Officer
2020
435,417(8)
4,138,710(9)
(10)
5,188
4,579,315
2019
545,833
3,985,847(11)
443,425
6,000
4,981,105
2018
491,667
5,201,503(12)
599,025
6,000
6,298,195
Olivia Nottebohm
Former Chief Operating Officer
​2020
450,961(13)
​—
16,523,486(14)
​—(15)
​5,750
​16,980,197
(1)
Unless otherwise described in the footnotes below, the amounts reported represent the aggregate grant-date fair value of RSAs or RSUs, as applicable, calculated in accordance with ASC Topic 718.
(2)
The amounts reported represent the amounts payable under our cash bonus plans for 2018, 2019, and 2020, respectively. See “Compensation Elements—Annual Cash Bonuses” above.
(3)
Unless otherwise noted, the amount reported reflects matching 401(k) contributions in 2018, 2019 and 2020.
(4)
The amount reported represents the aggregate grant-date fair value of RSAs calculated in accordance with ASC Topic 718. RSAs are eligible to vest over an approximately three-year performance period based on the achievement of certain stock price goals measured over a consecutive thirty-day trading period during twelve-month measurement periods. We calculated the grant date fair value based on multiple stock price paths developed through the use of a Monte Carlo simulation. See “Accounting for Stock-Based Compensation” above. If the RSAs were instead valued based on the achievement of the maximum stock price goals in each measurement period (and thus the maximum number of shares that may be issued under the performance-based RSA are issued), the aggregate market value of the RSAs on the date of grant would be $32,044,160.
(5)
Mr. Young joined us in October 2019, and therefore his salary and non-equity incentive plan compensation set forth in the table above was prorated for the portion of 2019 in which he was employed with us.
(6)
The grant-date fair value is based on the closing price of our Class A common stock on Mr. Young’s first day of employment with us.
(7)
The amount reported represents payment of a retention cash bonus.
(8)
Mr. Vashee resigned from the company in October 2020. Amount reported represents Mr. Vashee’s salary prorated for the portion of 2020 in which he was employed with us.
(9)
200,076 unvested RSAs, representing a grant date fair value of $3,621,376, were forfeited upon Mr. Vashee’s resignation in October 2020.
(10)
Mr. Vashee resigned from the company in October 2020 and therefore was ineligible to receive his 2020 annual cash bonus.
(11)
114,273 unvested RSUs, representing a grant date fair value of $2,491,151, were forfeited upon Mr. Vashee’s resignation in October 2020.
(12)
94,611 unvested RSUs, representing a grant date fair value of $1,625,417, were forfeited upon Mr. Vashee’s resignation in October 2020.
(13)
Ms. Nottebohm joined us in February 2020. Amount reported represents Ms. Nottebohm’s salary prorated for the portion of 2020 in which she was employed with us.
(14)
633,569 unvested RSAs, representing a grant date fair value of $12,392,610, were forfeited upon Ms. Nottebohm’s resignation in February 2021. In connection with Ms. Nottebohm’s separation agreement, the unvested RSAs that would have vested if she had remained employed through February 15, 2021 were accelerated to vest on February 5, 2021. See “Potential Payments on Termination or Change in Control—Ms. Nottebohm’s Separation” below.
(15)
Ms. Nottebohm resigned from the company in February 2021 and therefore was ineligible to receive her 2020 annual cash bonus.
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Grants of Plan-Based Awards in 2020
The following table shows all plan-based awards granted to our named executive officers during fiscal 2020.
Estimated Future Payouts Under
Non-Equity Incentive
Plan Awards ($)(1)
Estimated Future Payouts
Under Equity Incentive
Plan Awards (#)
All Other
Stock
Awards:
Number of
Shares (#)
Grant Date
Fair Value ($)(2)
Name
Grant Date
Approval Date
Threshold
Target
Maximum
Threshold
Target
Maximum
Andrew W. Houston
​3/17/2020
3/17/2020
293,648
587,295
1,321,414
Timothy Regan
3/17/2020
3/17/2020
108,289
216,557
487,298
4/1/2020
3/17/2020
55,770
1,009,437
10/1/2020
8/4/2020