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BKNG Stock – Form PRE 14A Booking Holdings Inc. For: Jun 03


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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 (Amendment No.
    )

 

   Filed
by the Registrant
 Filed
by a Party other than the Registrant

 

 

 

Booking
Holdings Inc.

 

(Name
of Registrant as Specified In Its Charter)

 

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

 

Payment
of Filing Fee (Check the appropriate box):
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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Dear Fellow Stockholder

APRIL , 2021

Without doubt, 2020 was the worst year for the travel industry in the modern era. Little did we know when we first heard the news of a novel coronavirus in early January how much our world would be disrupted, the jobs that would disappear and the millions of lives that would be lost.

Through the hardships of 2020, our employees worked tirelessly, transitioning rapidly to work from home. Our customer service teams managed huge call volumes in the spring supporting our customers and accommodations partners to process the influx of changes and cancellations as governments shut down travel. In these early days of the crisis, we took necessary actions, from cutting costs to raising over $4 billion of capital, to help ensure that we would operate effectively even in the worst potential scenarios. We were navigating uncharted territory that required swift decision making, all while ensuring that the health and safety of our employees, customers and partners remained our top priority.

Unfortunately, while necessary, these efforts were not sufficient. As the pandemic’s impact continued throughout the year, we realized further action was needed to optimize the business for the decrease in travel demand. As such, we made the incredibly difficult decision to restructure, resulting in an approximately 23% reduction in our workforce, including through attrition, primarily in the areas that are directly connected to business volume. This was a decision no business ever wants to make, but unfortunately, a decision so many in our industry had to make.

Amidst the uncertainty, we choose to be optimistic. Our business has withstood the test of time over the last two decades. From 9/11, to SARS, to the global 2008/2009 recession – history has served as a model to help us plan for the future. In my letter to you last year, I stated that I believed that the COVID-19 pandemic would impact global travel more than each of those historical events combined – and it did. Yet, with any challenge and crisis comes learnings, and over the course of a challenging year for our business, what we learned will continue to inform our thinking as we define our path forward.

First and foremost, the pandemic taught us all that we cannot take for granted the opportunity to experience the world. Last year served as a stark portrayal of what a future without travel would look like, reiterating our belief that we need to do our part to protect the world for future generations to experience. We were very pleased to reach the important milestone in 2020 of becoming operationally carbon neutral as a company, but the COVID-19 pandemic further highlights the need to look at ways we, and the industry, can do even more.

The pandemic also reminded us of the need for innovation – from the historic development of vaccines that will hopefully bring us back to a pre-Covid world to the technology that supported remote working. For ourselves, we are pleased at how fast we were able to step up our innovative efforts. This included new self-service tools that enabled customers to easily make changes or cancel bookings using our apps during the worst of the crisis; repurposing our OpenTable reservation platform software so retail stores could manage demand and maintain customer safety limits; and quickly enabling properties to load COVID-related safety content. We relied on innovation to make sure we were supporting our customers and partners.

While 2020 was consumed by navigating our business and our employees through the crisis, we still made progress in a number of key areas that will be critical for our long-term success. We continued to build out our integrated payment platform at Booking.com, which provides payment options favored by both travelers and our partners across hotels, alternative accommodations, cars, flight and attractions. We also made progress on our Connected Trip vision, increasing our consumer offerings across flights, ground transportation and attractions in certain regions. There is a lot more work for us to do, but we are building towards this vision because we believe that our efforts to create a seamless, connected experience across all parts of travel will drive increased loyalty, frequency and value.

Despite the unprecedented impact the pandemic had on our business, travelers booked 355 million room nights through our platforms in 2020, and we were able to

 

BOOKING HOLDINGS INC.  |  2021 PROXY STATEMENT    3


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close out the year with profits, generating approximately $59 million of net income and $879 million in Adjusted EBITDA. Producing these results in an incredibly challenging environment is a testament to the relentless efforts and passion of our employees to deliver the best value and service to our customers and partners. See Appendix A for a reconciliation of GAAP to Non-GAAP financial information.

Travel will eventually rebound and in some parts of the world we are already seeing the green shoots of recovery. We know it will eventually come back stronger than it was before, but we have a long journey to get to that day. As we move forward, we are so thankful to everyone who has helped us get to where we are now: the scientists and pharmaceutical companies who developed these modern miracle vaccines that each day bring us closer to a return to normal, the doctors, nurses and all the other healthcare workers who risked their lives to save others, and every other front-line worker who helped get us through 2020.

I, personally, want to thank our employees for their enormous contributions in 2020, the customers that trust us to deliver a great experience every day and be there to help when issues arise, the thousands of partners worldwide that supply the great experiences and expect us to help them recover, and for the continued support of our stockholders.

I am very hopeful for a brighter future.

 

Sincerely,

Glenn D. Fogel

President and Chief Executive Officer

April    , 2021

 

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Dear Stockholder:

APRIL   , 2021

You are cordially invited to attend the 2021 Annual Meeting of Stockholders (the “Annual Meeting”) of Booking Holdings Inc. to be held at 11:00 a.m. Eastern Time on Thursday, June 3, 2021.

After careful consideration and in light of the safety concerns that continue to result from the COVID-19 pandemic, the Board of Directors has determined that it is in the best interests of the public, our stockholders and our employees to conduct this year’s Annual Meeting in a virtual meeting format with no physical meeting location. You may attend the virtual Annual Meeting by visiting the website www.virtualshareholdermeeting.
com/BKNG2021. To ask questions and vote at the Annual Meeting, you will need the 16-digit control number that appears on your Notice of Internet Availability of Proxy Materials, on the proxy card or on the instructions that accompanied the proxy materials.

This booklet includes the Notice of Annual Meeting and proxy statement. The proxy statement provides information about Booking Holdings in addition to describing the business we will conduct at the meeting.

We hope you will be able to attend the Annual Meeting. Whether or not you plan to attend the Annual Meeting, please mark, sign, date and return your proxy card in the enclosed envelope as soon as possible or vote by calling the toll-free telephone number or by going online as described in the instructions included in your proxy card. Your stock will be voted in accordance with the instructions you have given in your proxy card. You may attend the Annual Meeting and vote through the virtual meeting platform, even if you have previously returned your proxy card or voted by telephone or by internet, by following the instructions included in the proxy statement. All stockholders who attend the meeting will be required to provide their 16-digit control number provided on their proxy card to vote or ask questions. We hope you are able to join us on June 3.

 

Sincerely,

Robert J. Mylod, Jr.

Chair of the Board

April   , 2021

 

 

 

IMPORTANT

A proxy card is enclosed. We urge you to complete and mail the card promptly in the enclosed envelope, which requires no postage if mailed in the United States. Alternatively, you may vote by calling the toll-free telephone number or by going online as described in the instructions included with your proxy card. Any stockholder attending the Annual Meeting may vote on all matters that are considered, in which case the signed and mailed proxy or prior vote by telephone or online will be revoked. Please note, however, that if your shares are held of record by a broker, bank or other nominee and you wish to vote at the meeting, you must obtain from the record holder a proxy issued in your name to obtain a 16-digit control number.

IT IS IMPORTANT THAT YOU VOTE YOUR SHARES

 

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PRELIMINARY PROXY STATEMENT-SUBJECT TO COMPLETION-DATED APRIL 9, 2021

NOTICE OF ANNUAL MEETING
OF STOCKHOLDERS

The Board of Directors of Booking Holdings Inc. (the “Company”)
is soliciting your proxy for the 2021 Annual Meeting of Stockholders.

WE WILL BE VOTING ON THE FOL(LOW)ING MATTERS:

1.

To elect eleven directors to hold office until the next annual meeting of stockholders and until their respective successors are elected and qualified;

2.

To approve on an advisory basis the 2020 compensation paid by the Company to its named executive officers;

3.

To approve amendments to the Company’s 1999 Omnibus Plan;

4.

To ratify the selection of Deloitte & Touche LLP as the independent registered public accounting firm of the Company for the fiscal year ending December 31, 2021;

5.

To approve a management proposal to amend the certificate of incorporation to allow stockholders the right to act by written consent;

6.

To consider and vote upon a non-binding stockholder proposal requesting the right of stockholders to act by written consent;

7.

To consider and vote upon a non-binding stockholder proposal requesting the Company issue a climate transition report;

8.

To consider and vote upon a non-binding stockholder proposal requesting the Company hold an annual advisory stockholder vote on the Company’s climate policies and strategies; and

9.

To transact such other business as may properly come before the meeting or any adjournment or postponement of the meeting.

Even if you have given your proxy, you may still vote on the virtual meeting platform if you attend the Annual Meeting. Please note, however, that if your shares are held of record by a broker, bank or other nominee and you wish to vote at the meeting, you must obtain from the record holder a proxy issued in your name to obtain a 16-digit control number.

 

THURSDAY, JUNE 3, 2021

11:00 a.m. Eastern Time

www.virtualshareholdermeeting.com

/BKNG2021

RECORD DATE

The Board of Directors fixed the close of business on April 8, 2021 as the record date for identifying those stockholders entitled to notice of, and to vote at, the Annual Meeting and at any adjournment or postponement of the Annual Meeting.

At the Meeting: To attend the Annual Meeting, visit www.virtualshareholdermeeting.com/BKNG2021 and if you wish to vote or ask questions during the Annual Meeting, you must have the 16-digit control number included on your proxy card or Notice of Internet Availability of Proxy Materials.

Online: You may vote by going online as described in the instructions included with your proxy card.

Telephone: You may vote by calling the toll-free telephone number as described in the instructions included with your proxy card.

Mail: Complete, date, sign and return the enclosed proxy card and return it in the enclosed postage prepaid envelope (if mailed in the United States).

 

 

This proxy statement and our 2020 Annual Report are also available on our website

at https://ir.bookingholdings.com/
financial-information/annual-reports.

 

April   , 2021

By Order of the Board of Directors

Peter Millones

Corporate Secretary

Norwalk, Connecticut

 

BOOKING HOLDINGS INC.  |  2021 PROXY STATEMENT    6


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PROXY SUMMARY

To assist you in reviewing our 2020 performance, we would like to call your attention to the following information, including key elements of our proxy statement and Annual Report on Form 10-K. The following description is only a summary. Before voting and for more complete information about these topics, please review our Annual Report on Form 10-K for the year ended December 31, 2020 and the complete proxy statement.

About Booking Holdings

Our mission is to make it easier for everyone to experience the world

Booking Holdings is the world’s leading provider of online travel and related services, provided to customers and partners in more than 220 countries and territories through six primary consumer-facing brands. Collectively, Booking Holdings operates in more than 40 languages across Europe, North America, South America, the Asia-Pacific region, the Middle East and Africa.

We connect consumers wishing to make travel reservations with providers of travel services around the world through our online platforms. We offer these services through six primary consumer-facing brands:

 

 

Accommodations

Ground

Transportation

Flights

Restaurants

Activities

Meta Search

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fintech Zoom

Fortune

Newsweek

Rankings include: Global 2000 List, World’s Best Employers for Diversity

Rankings include: World’s Most Admired Companies and Fortune 500 List

Most Responsible Companies

220+

40+

2.4M Properties

COUNTRIES AND TERRITORIES

LANGUAGES

(1.9 MILLION ALTERNATIVE ACCOMMODATIONS), WHICH REPRESENTS 28 MILLION REPORTED LISTINGS

ON BOOKING.COM AS OF 12.31.20

 

BOOKING HOLDINGS INC.  |  2021 PROXY STATEMENT    7


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Our 2020 Performance

Impact of COVID-19
Pandemic

The COVID-19 pandemic has had a profound impact on our business, employees, partners, communities and stockholders. In the beginning of the crisis, our priorities included the health and safety of our employees and stabilizing our business from the immediate shock of the pandemic by working with customers and partners to address unprecedented levels of cancellations. We also took numerous actions in response to the pandemic, including steps to increase our financial liquidity, reduce costs, restructure our operations to address our near- to medium-term business expectations and ensure we are well-positioned to capture travel demand when it returns so we can emerge from this crisis on a strong footing and work on extending our leadership position.

The COVID-19 pandemic and the resulting economic conditions and government orders resulted in a material decrease in consumer spending and an unprecedented decline in travel and dining and consumer demand for related services. Our financial results and prospects are almost entirely dependent on the sale of travel services. As a result, our results for the year ended December 31, 2020 were materially and negatively impacted, with a material decline in gross travel bookings, room nights booked, total revenues, net income and cash flow from operations as compared to the year ended December 31, 2019. In 2020, Booking Holdings Inc. (the “Company,” “Booking Holdings,” “we,” “our” or “us”) had net income for the year of $59 million, a 99% decrease versus the prior year, and net income per diluted share was $1.44. Non-GAAP net income for the full-year 2020 was $194 million, a 96% decrease compared to the prior year, and non-GAAP net income per diluted share was $4.71. Adjusted EBITDA for 2020 was $879 million, an 85% decrease as compared to the prior year.**

While the timing of the recovery of the travel industry remains uncertain, we believe that demand for our services will return when government restrictions are lifted and people are confident it is once again safe to travel. We intend to continue to make progress toward our key strategic priorities, including expanding the payment platform at Booking.com, building towards our vision of the Connected Trip, which is a multiproduct offering to provide a frictionless experience for consumers, and growing our market share in the United States. In 2020 alternative accommodations represented approximately 30% of Booking.com’s (our largest brand) total room nights and there were 6.5 million alternative accommodation reported listings on Booking.com. Also in 2020, approximately 22% of Booking.com’s gross bookings were processed on its payments platform.

GROSS TRAVEL BOOKINGS

(BILLIONS)

 

Performance

Our year-over-year gross bookings declined by 63% in 2020. Gross bookings is a common operating and statistical metric used in the travel industry representing the total U.S. Dollar value, generally inclusive of all taxes and fees, of all travel services purchased by consumers through our online travel reservation businesses, net of cancellations. Over the three-year period from 2018 to 2020, we had gross travel bookings of $224.6 billion, which represents a 10% increase in gross bookings compared to the 2015-2017 three-year period.

ROOM NIGHTS

(MILLIONS)

 

Performance

Although our growth was significantly impacted by the COVID-19 pandemic, we continue to be the largest online accommodation reservation service in the world based on room nights booked. In 2020, travelers booked 355 million room nights through our platform, which represents a 58% decrease compared to 2019. From a multi-year perspective, there was an 18% increase in room nights booked over the 2018-2020 three-year period as compared to the 2015-2017 three-year period.

 

 

**

See Appendix A to this proxy statement for a reconciliation of non-GAAP financial measures and the rationale for the use of non-GAAP financial measures.

 

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REVENUE*

(BILLIONS)

 

Performance

Total revenues were $6.8 billion in 2020. From a multi-year perspective, revenue increased 16% over the 2018-2020 three-year period as compared to revenue (or gross profit for years prior to 2018*) for the 2015-2017 three-year period.

 

ADJUSTED EBITDA **

(BILLIONS)

 

Performance

In 2020, even with the unprecedented challenges of COVID-19, we remained profitable with $879 million in Adjusted EBITDA, which was a decrease of 85% compared to 2019. From a multi-year perspective, Adjusted EBITDA over the 2018-2020 three-year period was approximately the same compared to the 2015-2017 three-year period.

 

Stock price

While our financial results were negatively impacted by the COVID-19 pandemic, during 2020, our stock price rebounded from the low price of $1,152 on March 23, 2020 to end the year with a closing price of $2,227 (an all-time high as of December 31, 2020), representing a 93% increase from the low point during the year and an 8% increase compared to the closing price of $2,054 on December 31, 2019. Our stock price increased from $1,738 on December 31, 2017 to $2,227 on December 31, 2020, representing a 28% increase over that three-year period.

STOCK price AS OF DECEMBER 31,

 

 

 

 

*

As a result of the revenue recognition accounting standard that began in 2018, total revenues reported in 2018, 2019 and 2020 are comparable to gross profit reported in previous years. For more information, see Note 2 to the Consolidated Financial Statements included in our Form 10-K for the year ended December 31, 2018.

**

See Appendix A to this proxy statement for a reconciliation of non-GAAP financial measures and the rationale for the use of non-GAAP financial measures.

 

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Corporate Governance Highlights

We strive to maintain strong corporate governance practices that are both stockholder friendly and designed to protect and grow long-term stockholder value. Management regularly engages with our largest stockholders and encourages all stockholders to contact us about any concerns they have. Our corporate governance practices include:

Current Chair of the Board is independent;

Lead Independent Director;

Majority voting in director elections;

Stockholder-approved proxy access;

Annual director elections (i.e., no classified board);

No super-majority voting provisions;

Stock ownership guidelines for directors and executive officers;

Stockholders can call special meetings;

No poison pill/rights plan;

Annual “say-on-pay” vote;

Long-standing practice of prohibiting hedging or pledging of stock by directors and executive officers;

Disclosure of director and executive officer 10b5-1 Plans;

10 of 12 current directors are independent; and

If stockholders approve Proposal 5 at the Annual Meeting, then immediately following the meeting, stockholders will have the right to act by written consent in lieu of a meeting.

 

Organizational Changes

Jeffery Boyd has announced that he will be retiring from the Company’s Board of Directors (the “Board”), effective as of the Annual Meeting, and therefore he is not standing for re-election to the Board at the Annual Meeting. We extend our deepest gratitude to Mr. Boyd for his outstanding leadership, vision and dedicated service, and for the incalculable contribution he made as Chief Executive Officer of the Company for more than a decade and as a member of the Board of Directors for nearly two decades (including seven years as Chair).

Over the past five years, the Board has undergone a significant and deliberate refreshment process that included the planned retirement of long-tenured directors and the addition of 6 new independent directors. During 2020, the Board was focused on orienting the newer directors to the Company and the Board. The Board continues to focus on its succession planning on an ongoing basis.

 

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Our Board

Current Directors

 

Age

(as of

3-31-21)

Director

Since

Independent

Committee Memberships

Other Public

Directorships

Audit

Compensation

Nominating and

Corporate

Governance

Timothy M. Armstrong

50

2013

 

 

0

Glenn D. Fogel

59

2017

 

 

 

 

0

Mirian M. Graddick-Weir

66

2018

Chair

 

1

Wei Hopeman

51

2019

 

 

0

Robert J. Mylod, Jr. (Chair)

54

2017

 

 

3

Charles H. Noski (Lead Independent Director)

68

2015

 

Chair

2

Nicholas J. Read

56

2018

 

 

1

Thomas E. Rothman

66

2013

 

 

0

Bob van Dijk

48

2020

 

 

 

2*

Lynn M. Vojvodich

53

2016

 

2

Vanessa A. Wittman

53

2019

Chair

 

 

1

Retiring Director

 

 

 

 

 

 

 

Jeffery H. Boyd

64

2001

 

 

 

 

2

Number of Meetings in 2020

 

 

 

9

8

3

 

*

Mr. van Dijk serves on the boards of Naspers Limited and Prosus N.V. Naspers is a non-U.S. company publicly-traded on the Johannesburg Stock Exchange and Prosus is a non-U.S. majority-owned, publicly-traded subsidiary of Naspers, primarily traded on the EuroNext Exchange in Amsterdam. Our Corporate Governance Principles generally limit sitting CEOs of public companies from being on more than 2 public company boards, including ours. However, the NCG Committee has waived this limit with respect to Mr. van Dijk because his service on Prosus’ board is part of his responsibilities as CEO of Naspers, its parent company, and therefore (a) the responsibilities of board membership on these affiliated companies are overlapping and (b) under these circumstances the NCG Committee believes that his membership on Naspers’ and Prosus’ boards will not impair Mr. van Dijk’s ability to devote the necessary time and attention to his service on our Board.

 

Our Board exhibits a strong mix of desired attributes, including business experience, tenure, age, diversity and independence. Nine of the eleven directors that are standing for re-election at the Annual Meeting have joined our Board since 2015, including eight independent directors. The following is a snapshot of some key characteristics of our Board immediately following the Annual Meeting assuming all nominees are elected.

 

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Executive Compensation Highlights

Impact of COVID-19
Pandemic on Compensation

Management and Company performance in 2020 are defined by and evaluated against the unprecedented impact of the COVID-19 pandemic on the Company, the travel industry and the world as a whole. Despite a strong start to the year in January and the beginning of February, as a result of the COVID-19 pandemic’s severe impact on the Company and the need to recognize the hardship faced by many of our other stakeholders, our typical compensation plans would not have achieved the objectives they were meant to accomplish. The Compensation Committee engaged in a robust and prolonged process to consider numerous alternatives and gather input, including through our stockholder outreach during the fall of 2020. Although the compensation program needed to be altered as a result of the COVID-19 pandemic, the Compensation Committee continued to look to their principles of performance-based, alignment with interests of stockholders, retention, consistency, business-focused and risk management to guide their decision-making process. For further information on the Compensation Committee’s process and decisions, see Executive Compensation Compensation Discussion and Analysis.

Name and Principal Position

 

2020

Salary

 

2020

Bonus

 

2020 Stock

Awards

 

2020

Incentive

Payment

 

All Other 2020

Compensation

 

Total 2020

Compensation

Glenn D. Fogel

President and Chief Executive Officer

$

163,850

$

0

$

6,954,041

 

$

30,707

$

7,148,598

David I. Goulden

Executive Vice President and Chief Financial Officer

$

530,000

$

882,000

$

22,578,057

 

$

8,838

$

23,998,895

Peter J. Millones

Executive Vice President, General Counsel and Corporate Secretary

$

468,167

$

704,900

$

2,236,127

 

$

8,838

$

3,418,032

See Summary Compensation Table and the related footnotes on page 66 for further information on the amounts included in this table.

We do:

We do not:

Tie pay to performance.

Provide change in control severance tax gross-ups and do have a policy against future such arrangements.

Use “double triggers” in our severance agreements and
equity awards.

Permit stock option repricing without stockholder approval.

Have significant stock ownership guidelines.

Provide significant executive-only perquisites.

Have a clawback policy.

Permit hedging or pledging of our stock by our directors and executive officers.

Conduct an annual risk assessment of our executive compensation program.

 

 

Cap the bonus pool from which senior executives’
individual cash bonuses are paid.

 

 

Conduct an annual stockholder engagement process.

 

 

Conduct formal executive succession planning.

 

 

 

Annual Meeting Information Summary

DATE AND TIME

LOCATION

RECORD DATE

Thursday, June 3, 2021

Virtual Meeting

April 8, 2021

11:00 a.m.,
local (Eastern) time

www.virtualshareholdermeeting.com/BKNG2021 For more information about attending the meeting, see How to Attend the Annual Meeting on page 116.

 

 

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Voting Procedures

All stockholders are cordially invited to attend the virtual Annual Meeting. Whether or not you expect to attend the meeting, please complete, date, sign and return the enclosed proxy card as promptly as possible to ensure your representation at the meeting. A return envelope (which is postage prepaid if mailed in the United States) is enclosed for that purpose. Alternatively, you may vote by calling the toll-free telephone number or by going online as described in the instructions included with your proxy card. Even if you have submitted your proxy card, you may still vote through our virtual meeting platform if you attend the meeting. Please note, however, that if your shares are held of record by a broker, bank or other nominee and you wish to vote at the meeting, you must obtain from the record holder a proxy issued in your name to obtain a 16-digit control number.

 

Voting Matters

The following proposals will be voted upon at the Annual Meeting and are described in more detail in this proxy statement. Our Board recommends that you vote as follows on each such proposal:

Proposals

 

Board Vote Recommendation

More Information

Election of Directors

(Proposal1)

 

The Board of Directors recommends that you vote FOR each of the Board of Directors’ nominees.

Page 16

Advisory Vote to Approve 2020 Executive Compensation (Proposal2)

 

The Board of Directors recommends that you vote FOR the approval on an advisory basis of our 2020 executive compensation.

Page 83

To Approve the Amendment of the Company’s 1999 Omnibus Plan (Proposal3)

 

The Board of Directors recommends that you vote FOR the approval of the amendment to the Company’s equity compensation plan.

Page 84

Ratification of Independent Auditor (Proposal4)

 

The Board of Directors recommends that you vote FOR ratification of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2021.

Page 97

Management Proposal to Amend the Certificate of Incorporation to Allow Stockholders the Right to Act by Written Consent (Proposal5)

 

The Board of Directors recommends that you vote FOR the approval of management’s proposal to amend the Company’s certificate of incorporation to allow stockholders the right to act by written consent.

Page 100

Stockholder Proposal Requesting the Right of Stockholders to Act by Written Consent (Proposal6)

 

The Board of Directors recommends that you vote AGAINST this non-binding stockholder proposal requesting the right of stockholders to act by written consent.

Page 103

Stockholder Proposal Requesting the Company Issue a Climate Transition Report (Proposal7)

 

The Board of Directors recommends that you vote AGAINST this non-binding stockholder proposal requesting the Company issue a climate transition report.

Page 106

Stockholder Proposal Requesting the Company Hold an Annual Advisory Stockholder Vote on the Company’s Climate Policies and Strategies (Proposal8)

 

The Board of Directors recommends that you vote AGAINST this non-binding stockholder proposal requesting the Company hold an annual advisory stockholder vote on the Company’s climate policies and strategies.

Page 109

 

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The Board currently consists of twelve directors, with no vacancies, and the term of all of the directors expires at the Annual Meeting. After years of dedicated service on the Board, Mr. Jeffery Boyd is retiring from the Board, effective as of the Annual Meeting, and is therefore not standing for re-election. As a result, effective as of the Annual Meeting, the Board has fixed the number of directors constituting the entire Board at eleven directors with no vacancies. If elected at the Annual Meeting, each of the eleven director nominees listed below will hold office for a one-year term until the 2022 annual meeting of stockholders and until his or her successor has been duly elected and qualified, or until his or her earlier death, resignation or removal. Unless otherwise instructed, the persons named as proxies on the accompanying proxy card will vote shares represented by properly executed proxies for the eleven nominees named herein. The proxies solicited by this proxy statement may not be voted for more than eleven nominees.

With respect to the election of directors, a majority of votes cast means that the number of shares cast “for” a nominee’s election exceeds the number of “against” votes for that nominee. With respect to Proposal 1, votes cast does not include abstentions or broker non-votes, and therefore, abstentions and broker non-votes will not affect the outcome of the vote. Holders of common stock may not cumulate their votes in the election of directors.

Although the Board anticipates that the eleven nominees will be available to serve as directors on our Board and each person nominated has agreed to serve if elected, if any of them should be unwilling or unable to serve, the proxies will be voted for the election of such substitute nominee or nominees as may be designated by the Board.

The Board of Directors recommends a vote FOR each of the Board’s nominees.

 

Director Qualifications

We believe that our directors should possess high personal and professional ethics and integrity, and be committed to representing the long-term interests of our stockholders. We endeavor to have a Board representing a range of experiences at policy-making levels in business and in areas that are relevant to the global nature of our operations and our long-term strategy, including growth on a global scale. As a result, the Board and the Nominating and Corporate Governance Committee (“NCG Committee”) believe that, in light of our business, strategy and structure, the following are key areas of experience, qualifications and skills that should be represented on the Board:

Leadership experience. The Board believes that directors with experience in significant leadership positions over an extended period, especially chief executive officer positions, provide us and the Board with special insights. These individuals generally possess extraordinary leadership qualities and the ability to identify and develop those qualities in others. They demonstrate a practical understanding of organizations, processes, strategy, risk management and the methods to drive change and growth.

Finance experience. The Board believes that an understanding of finance, financial statements and financial reporting processes is important for our directors. We generally measure our operating and strategic performance by reference to financial targets. In addition, accurate financial reporting and effective auditing are critical to our success.

Global experience. Our future success depends, in part, on our ability to continue to grow our businesses outside the United States. In 2020, approximately 88% of our consolidated revenues were generated by our international businesses. As a result, the Board believes it is important that it include directors with a global business perspective and significant international business experience.

Human Resources experience. As our business continues to grow and the number, locations and diversity of our employees continues to grow, the Board believes that directors with human resources (including people and culture) experience is increasingly important to our success.

 

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Internet/E-Commerce experience. The Board seeks to have directors with experience in internet or e-commerce businesses because it believes that having directors experienced in the industries in which we operate is important for our success and the Board’s ability to oversee management.

Sales and Marketing experience. The Board seeks to have directors with significant sales and marketing experience to provide additional insight and advice to management as our business is highly dependent on effective marketing.

Travel Industry experience. The Board believes that having directors with insight into the travel industry and related industries is important to help the Board evaluate our strategy and oversee management.

 

The following skills matrix shows areas of experience, qualifications and skills that were particularly identified with each nominee by the NCG Committee and the Board when considering the nomination of the current nominees. We continue to evaluate the matrix against our articulated strategy so that it can serve as an effective tool for identifying director nominees who collectively have the complementary skills, experience and qualifications to guide our company. Our 2021 board skills matrix is set forth below.

 

Leadership

Finance

Global

Business

Human

Resources

Internet/

E-Commerce

Sales and

Marketing

Travel

Timothy M. Armstrong

 

 

 

Glenn D. Fogel

 

 

Mirian M. Graddick-Weir

 

 

 

 

 

Wei Hopeman

 

 

 

 

 

Robert J. Mylod, Jr.

 

 

Charles H. Noski

 

 

 

 

Nicholas J. Read

 

 

 

 

Thomas E. Rothman

 

 

 

Bob van Dijk

 

 

 

Lynn M. Vojvodich

 

 

 

 

Vanessa A. Wittman

 

 

 

 

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Director Tenure

The evaluation of director nominees, including each nominee’s independence from management, by the NCG Committee and the Board also takes into account director tenure. Although re-nomination of incumbent directors is not automatic, the NCG Committee believes that Board continuity facilitates effective and efficient leadership, risk management and oversight and that the knowledge and understanding of our business gained over years of service are important attributes to consider when determining nominees for election to the Board. The NCG Committee and the Board also believe that deliberate and planned Board refreshment is beneficial to the Board and our company, and we have a robust and continuous refreshment process in place. The NCG Committee and the Board believe that the current mix of directors reflects an appropriate mix of short-, medium- and long-tenured directors. With the retirement of Mr. Boyd as of the Annual Meeting and the continuous refreshment of new independent directors over the past several years, eight of our independent directors have joined the Board in the past 8 years and the average tenure of our independent directors will be 4.3 years as of the Annual Meeting.

Nomination and Election Process

The NCG Committee identifies, evaluates and recommends director candidates to the Board.

 

Identifying Director Candidates

As set forth in the Company’s Corporate Governance Principles, the NCG Committee primarily uses the following criteria to identify and recommend nominees for election or appointment to the Board:

the highest personal and professional ethics and integrity;

relevant business, professional or managerial skills and experience (including team-building and communication skills) useful to the oversight of our business;

demonstrated leadership skills through involvement in business, professional, charitable or civic affairs;

current knowledge of the markets and communities in which we do business and in our industry or other industries relevant to our business;

ability and willingness to commit adequate time to fulfilling Board and committee duties and responsibilities;

ability and willingness to exercise independent judgment, ask probing questions and express tough opinions;

expertise, skills, knowledge, experience and personality that fit well with those of other directors and potential directors in building a Board that is effective, collegial and responsive to our needs and stockholder interests; and

the characteristics to contribute to the Board’s diversity of viewpoints, background, experience and other demographics (such as racial and gender diversity).

The NCG Committee does not set specific minimum qualifications that nominees must meet in order for the NCG Committee to recommend them to the Board, but rather believes that each nominee should be evaluated based on his or her individual merits, taking into account our needs and the overall composition of the Board. The NCG Committee’s policy is to consider diversity, which it views broadly in terms of viewpoints, backgrounds, experience, gender, race and ethnic or national origin, as a factor in nominating persons for election or appointment to the Board. The NCG Committee is committed to actively seeking out highly qualified women and individuals from minority groups to include in the pool from which Board nominees are chosen.

 

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Who Can Recommend Candidates?

Outside consultants may be employed to help identify candidates

Other Board members and members of management

Our Corporate Governance Principles require that the NCG Committee give appropriate consideration to potential candidates recommended by stockholders in the same manner as other potential candidates identified by the NCG Committee. Stockholders who wish to submit potential candidates for consideration by the NCG Committee for election at our 2022 annual meeting of stockholders may do so in accordance with the procedures described in this proxy statement and in our Stockholder Communications Policy (available on our corporate website (www.bookingholdings.com)). In addition, stockholders who wish to nominate persons for election to our Board at our 2022 annual meeting of stockholders may do so in accordance with the procedures required under our By-laws and described in this proxy statement in 2022 Stockholder Proposals on page112.

 

Evaluating Director Candidates

Members of the NCG Committee discuss and evaluate possible candidates in detail, and suggest individuals to explore in more depth. Once a candidate is identified whom the NCG Committee wants to seriously consider and move toward nomination, the chair of the NCG Committee, or his or her designee, enters into a discussion with that nominee.

When considering current directors for nomination for re-election to the Board, the NCG Committee takes into account the performance of each director. Underperforming directors may be asked to leave the Board or may not be re-nominated for election. The NCG Committee also reviews the composition of the Board in light of our current challenges and needs and those of the Board, and determines whether it may be appropriate to add or remove individuals after considering, among other things, the need for specific expertise and issues of independence, judgment, age, skills, background, tenure and experience.

 

Board Evaluations

We conduct an annual evaluation process to assess the performance of our Board and Board committees, which includes:

 

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Nominees for Election as Directors

Set forth below is biographical information as of March 31, 2021 for each person nominated for election to the Board at the Annual Meeting.

Age 50

Director since: 2013

Independent

Committees

Compensation

Other Current

Public Directorships:

None

TIMOTHY M. ARMSTRONG

DIRECTOR QUALIFICATIONS

 

 

Mr. Armstrong brings to the board extensive experience, expertise and background in global internet businesses, sales and marketing and the interactive direct to consumer industry gained from his positions as Founder and CEO of the dtx company, Chief Executive Officer of Oath and AOL and his former positions at Google and ABC/ESPN Internet Ventures; and his corporate leadership experience gained from his positions as Founder and CEO of the dtx company and Chief Executive Officer of Oath and AOL.

CAREER HIGHLIGHTS

Mr. Armstrong is Founder and CEO of the dtx company, a direct to consumer enablement company he established in 2019. From 2009 to 2018, Mr. Armstrong served as the Chairman and Chief Executive Officer of AOL as well as the CEO of Oath (Verizon’s media brand portfolio, including Yahoo! and AOL) after Verizon’s acquisition of AOL in 2015. From 2000 to 2009, Mr. Armstrong served as President, Americas Operations and Senior Vice President of Google Inc. Before joining Google, Mr. Armstrong served as Vice President of Sales and Strategic Partnerships for Snowball.com and as Director of Integrated Sales and Marketing at Starwave’s and Disney’s ABC/ESPN Internet Ventures. Mr. Armstrong serves on the board of Wheels Up, an aviation company. Mr. Armstrong is the Chairman of the Board of Trustees at Greenwich Academy and also serves as a trustee of the USA Olympic and Para-Olympic Foundation.

 

Age 59

Director since: 2017

Committees

None

Other Current

Public Directorships:

None

GLENN D. FOGEL – CHIEF EXECUTIVE OFFICER AND PRESIDENT

DIRECTOR QUALIFICATIONS

 

 

Mr. Fogel gained his qualifications through service as our President and Chief Executive Officer; his previous service as our Head of Worldwide Strategy and Planning, responsible for global corporate strategy, worldwide mergers and acquisitions, business development initiatives and strategic alliances, helping lead us during a long period of sustained global growth; his previous position as trader at a global asset management company; his previous position as an investment banker focused on the air transportation industry; and his legal education (member of the NY State Bar (retired)).

CAREER HIGHLIGHTS

Mr. Fogel has served as our Chief Executive Officer and President since January 2017 and the Chief Executive Officer of Booking.com since June 2019. Previously, he served as our Head of Worldwide Strategy and Planning from November 2010 to December 2016 and as our Executive Vice President, Corporate Development, from March2009 to December 2016. Mr. Fogel joined us in February 2000. Prior to that, he was a trader at a global asset management firm and prior to that was an investment banker specializing in the air transportation industry. Mr. Fogel is a member of the New York State Bar (retired).

 

 

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Age 66

Director since: 2018

Independent

Committees

Compensation

(Chair);

Audit

Other Current

Public Directorships:

Yum! Brands, Inc.

(since 2012)

MIRIAN M. GRADDICK-WEIR

DIRECTOR QUALIFICATIONS

 

 

 

 

 

Dr. Graddick-Weir brings to the board global business experience having served as a senior executive of two, large global businesses and on the board of directors of another; extensive experience in human resources through her positions at AT&T and Merck.

CAREER HIGHLIGHTS

Dr. Graddick-Weir, Ph.D., was the Executive Vice President of Human Resources at Merck & Co., Inc. from 2008 until November 2018, where she led human resources for one of the leading pharmaceutical companies in the world. Dr. Graddick-Weir served as Senior Vice President of Human Resources of Merck from September 2006 to January 2008. Prior to joining Merck, she served as Executive Vice President of Human Resources and Employee Communications of AT&T from 2004 to 2006 and served as its Executive Vice President of Human Resources from 1999 to 2004. Dr. Graddick-Weir was responsible for the design, planning and administration of all Human Resources functions, including compensation, benefits, recruiting and training, for AT&T’s 47,000 employees. She joined AT&T in 1981. She currently serves as Chair of Yum! Brands’ nominating and corporate governance committee and as a member of its management planning and development and executive/finance committees.

 

Age 51

Director since: 2019

Independent

Committees

Nominating and

Corporate

Governance

Other Current

Public Directorships:

None

WEI HOPEMAN

DIRECTOR QUALIFICATIONS

 

 

 

 

 

Ms. Hopeman brings experience from her positions as co-founder and Managing Partner of a venture capital firm focused on investing in fintech companies around the world, former Managing Director and Head of Asia for Citi Ventures and various banking and private equity roles, including technology banker at The Goldman Sachs Group.

CAREER HIGHLIGHTS

Ms. Hopeman is a Managing Partner of Arbor Ventures, a venture capital firm focused on investing in fintech companies around the world, which she co-founded in 2014. From 2010 to 2014, Ms. Hopeman served as Managing Director and Head of Asia for Citi Ventures. Prior to Citi Ventures, Ms. Hopeman spent time in various other banking and private equity roles, including as the Chief China Representative for Jefferies & Co. and as a technology banker at The Goldman Sachs Group.

 

 

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Age 54

Director since: 2017

Independent

Committees

Compensation

Other Current

Public Directorships:

Redfin

(since 2014)

Dropbox

(since 2014)

Vroom, Inc.

(since IPO in 2020)

ROBERT J. MYLOD, JR., CHAIR

DIRECTOR QUALIFICATIONS

 

 

Mr. Mylod brings to the board significant finance and investment experience as the founder and managing partner of Annox Capital Management, a board member of several public and private technology companies and various positions with our company over 12 years, including chief financial officer, helping lead us during a long period of sustained global growth.

CAREER HIGHLIGHTS

Mr. Mylod is the Managing Partner of Annox Capital Management, a private investment firm that he founded in 2013. From 1999 to 2011, Mr. Mylod held several roles with us, including Vice Chair, Head of Worldwide Strategy and Planning, and Chief Financial Officer. Prior to joining us, Mr. Mylod was a Principal at Stonington Partners, a private equity investment firm. Mr. Mylod currently serves as a member of the board of directors of Redfin and as a member of its audit committee. He serves as a member of Dropbox’s board of directors and as a member of its audit and compensation committees. He is Chairperson of the board of directors of Vroom, Inc. and serves as a member of Vroom’s audit and compensation committees. Between October 2015 and April 2017, Mr. Mylod served as a member of the board of directors of Autobytel, a company that facilitates the buying and selling of cars online. From 2001 until 2017, Mr. Mylod served as a member of the board of directors of EverBank, a U.S. savings bank providing online and mobile banking and financial services, and served on EverBank’s compensation committee and as the Chairman of the nominating and corporate governance committee from 2012 until 2017. Mr. Mylod served as a member of the board of directors of Novocure, a cancer treatment company, and on its audit committee, from 2012 to 2017, and on its nominating and corporate governance committee from 2015 to 2017. He also serves on the board of directors of several privately held companies. Mr. Mylod received an A.B. in English from the University of Michigan and an M.B.A. from the University of Chicago Graduate School of Business.

 

 

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Age 68

Director since: 2015

Independent

Committees

Audit;

Nominating and

Corporate

Governance (Chair)

Other Current

Public Directorships:

Wells Fargo &

Company

(since 2019)

Hewlett Packard

Enterprise

(since 2020)

CHARLES H. NOSKI, LEAD INDEPENDENT DIRECTOR

DIRECTOR QUALIFICATIONS

 

 

 

 

Mr. Noski brings to the board expertise through his senior leadership roles at large public, global companies, including as Chief Financial Officer of AT&T Corporation and Bank of America Corporation and as chairman of the board of Wells Fargo & Company, director of Hewlett Packard Enterprise and a former director of Microsoft Corporation and other public companies, and service as a partner at one of the world’s largest public accounting firms.

CAREER HIGHLIGHTS

In 2012, Mr. Noski retired as a Vice Chairman of Bank of America Corporation, to which he was named after previously serving as that company’s Executive Vice President and Chief Financial Officer. Prior to this, Mr. Noski served as Chief Financial Officer, Corporate Vice President and as a member of the board of directors of Northrop Grumman Corporation. Prior to Northrop Grumman, he was Vice Chairman of the board of directors and Chief Financial Officer of AT&T Corporation. Before that, Mr. Noski led Hughes Electronics Corporation in various senior executive roles, including as Vice Chairman and as President and Chief Operating Officer. Mr. Noski began his career at Deloitte & Touche LLP where he was named Partner. In 2019, Mr. Noski was elected to the board of directors of Wells Fargo & Company, and currently serves as Chairman of the Wells Fargo board, chairs its audit committee and is a member of its governance and nominating committee. In 2020, Mr. Noski was elected to the Hewlett Packard Enterprise board and is a member of its finance and investment committee. From 2003 to 2019, Mr. Noski served as a member of the board of directors of Microsoft Corporation and was the Chairman of Microsoft’s audit committee and a member of its governance and nominating committee. Mr. Noski was also Chairman of the board of trustees of the Financial Accounting Foundation from 2016 to 2019 and a former member of the board of directors of the National Association of Corporate Directors. In addition, Mr. Noski served as a member of the board of directors of Avon Products, Inc. from 2012 to 2018.

 

 

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Age 56

Director since: 2018

Independent

Committees

Audit

Other Current

Public Directorships:

Vodafone Group Plc

(since 2014)

NICHOLAS J. READ

DIRECTOR QUALIFICATIONS

 

 

 

 

Mr. Read brings to the board extensive finance and executive experience, including as Chief Executive Officer, Chief Financial Officer and other executive positions of a global telecommunications company, and is also a chartered management accountant.

CAREER HIGHLIGHTS

Mr. Read has served as Chief Executive Officer of Vodafone Group Plc since October 2018 and as a member of its board of directors since 2014. Prior to becoming its Chief Executive Officer, Mr. Read served as Group Chief Financial Officer of Vodafone Group Plc April 2014 to July 2018. Since joining Vodafone in 2001, Mr. Read has held a variety of senior roles, including Chief Financial Officer and Chief Executive Officer of Vodafone Limited, the UK. operating company. Prior to becoming Group Chief Financial Officer, Mr. Read served as Regional Chief Executive Officer for Africa, Middle East and Asia Pacific for five years and was a board member of the Vodafone publicly-traded subsidiaries Vodacom, Safaricom and Vodafone Qatar and Vodafone’s joint ventures VHA in Australia and Indus Towers in India. Prior to joining Vodafone, he held senior global finance positions with United Business Media Plc and Federal Express Worldwide. Mr. Read is a Fellow Chartered Management Accountant and a Chartered Global Management Accountant, with a (BA) (Hons) in Accounting and Finance.

 

Age 66

Director since: 2013

Independent

Committees

Nominating and

Corporate

Governance

Other Current

Public Directorships:

None

THOMAS E. ROTHMAN

DIRECTOR QUALIFICATIONS

 

 

 

Mr. Rothman brings to the board extensive executive leadership of global media companies; and has demonstrated a long and successful career marketing and financing motion pictures, television programs and other media.

CAREER HIGHLIGHTS

Mr. Rothman has served as Chairman of Sony Pictures Entertainment Motion Picture Group since March 2015, where he oversees Columbia Pictures, TriStar Pictures, Imageworks and Sony Pictures Animation, along with other entities. From September 2013 to February 2015, Mr. Rothman was Chairman of TriStar Productions. Previously, Mr. Rothman served as Chairman of Fox Entertainment Group Inc., a media company and subsidiary of News Corp. from 2000 to 2005 and as its Chairman and Chief Executive Officer from 2005 to 2012. Mr.Rothman served as President of Twentieth Century Fox Film Group from January 2000 to August 2000, and served as President of Twentieth Century Fox Production from 1995 to 2000. In 1994, Mr. Rothman founded and served as President of Fox Searchlight Pictures. Prior to that, he served as President of Worldwide Production for the Samuel Goldwyn Company from 1989 to 1994. Mr. Rothman also served as an associate and then partner with Frankfurt, Kurnit, Klein & Selz, a law firm, from 1982 to 1987. Mr. Rothman serves as a member of the board of directors of the Sundance Institute and the American Film Institute, both emeritus. He is also a member of the boards of the California Institute of the Arts (CalArts), Brown University (emeritus), and was appointed by President Obama and confirmed by the U.S. Senate as a member of the National Council of the Arts, the governing body for the National Endowment for the Arts.

 

 

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Age 48

Director since: 2020

Independent

Committees

None

Other Current

Public Directorships:

Naspers LTD*

Prosus NV* (a

majority-owned

subsidiary of Naspers)

BOB VAN DIJK

DIRECTOR QUALIFICATIONS

 

 

 

Mr. van Dijk brings extensive leadership, finance, global business and Internet/E-Commerce experience as Chief Executive Officer of one of the largest technology investors in the world.

CAREER HIGHLIGHTS

Mr. van Dijk has served as the Chief Executive Officer of Naspers, a global internet group and technology investor, since 2014. In September 2019, he assumed the additional role of Chief Executive Officer of Prosus, a majority owned subsidiary of Naspers. From 2013 until he was promoted to Chief Executive Officer of Naspers, he served as Allegro Group CEO and CEO of Global Transaction eCommerce. Mr.van Dijk has also served in several general management positions with eBay and Schibsted. Previously, Mr. van Dijk was an entrepreneur in online financial products. He began his career at McKinsey with a focus on mergers and acquisitions and media.

 

*

Naspers is a non-U.S. company publicly-traded on the Johannesburg Stock Exchange and Prosus is a non-U.S. majority-owned, publicly-traded subsidiary of Naspers primarily traded on the EuroNext Exchange in Amsterdam. Our Corporate Governance Principles generally limit sitting CEOs of public companies from being on more than 2 public company boards, including ours. However, the NCG Committee has waived this limit with respect to Mr. van Dijk because his service on Prosus’ board is part of his responsibilities as CEO of Naspers, its parent company, and therefore (a) the responsibilities of board membership on these affiliated companies are overlapping and (b) under these circumstances the NCG Committee believes that his membership on Naspers’ and Prosus’ boards will not impair Mr. van Dijk’s ability to devote the necessary time and attention to his service on our Board.

Age 53

Director since: 2016

Independent

Committees

Nominating and

Corporate

Governance;

Compensation

Other Current

Public Directorships:

Dell Technologies

(since 2019)

Ford Motor

Company

(since 2017)

LYNN M. VOJVODICH

DIRECTOR QUALIFICATIONS

 

 

 

 

Ms. Vojvodich brings to the board extensive experience, expertise and background in global business, internet marketing and sales, including from her former position as Chief Marketing Officer of Salesforce as well as prior experience in senior marketing positions at large, global organizations and experience working with start-up and growth-stage technology companies.

CAREER HIGHLIGHTS

Ms. Vojvodich is an advisor to start-up and growth-stage technology companies. She served as Executive Vice President and Chief Marketing Officer of Salesforce from 2013 to February 2017. Before joining Salesforce, Ms.Vojvodich was a partner at Andreessen Horowitz, a leading venture capital firm, where she helped companies build their go-to-market strategies. Previously, she was the Chief Marketing Officer at Terracotta Inc., a leader in in-memory and cloud-enabling technology. Ms. Vojvodich has also served in various roles at organizations including Bain & Company and Microsoft. Ms. Vojvodich has served as a member of the board of directors of Dell Technologies since April 2019, Ford Motor Company since April 2017 and Figma, a cloud-based design software company, since December 2019. Ms.Vojvodich began her career as a mechanical engineer in a hard hat working on the design and construction of Gulfstream jets and offshore oil structures.

 

 

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Age 53

Director since: 2019

Independent

Committees

Audit (Chair)

Other Current

Public Directorships:

Oscar Health, Inc.

(since IPO

March 2021)

VANESSA A. WITTMAN

DIRECTOR QUALIFICATIONS

 

 

 

Ms. Wittman brings to the board extensive global business, finance, executive and internet/E-commerce experience, including as Chief Financial Officer of Glossier and global internet and technology companies Oath, Dropbox and Motorola Mobility, CFO of Marsh & McLennan Companies and as a board member of several private and public technology and retail companies.

CAREER HIGHLIGHTS

Ms. Wittman has been the Chief Financial Officer of Glossier, an online beauty product company, since April 2019. She previously served as Chief Financial Officer of Oath, a subsidiary of Verizon, during 2018. Ms. Wittman served as Chief Financial Officer of Dropbox from 2015 to 2016 and as Chief Financial Officer of Motorola Mobility, a subsidiary of Google, from 2012 to 2014. From 2008 to 2012, Ms. Wittman served as Executive Vice President and Chief Financial Officer of Marsh & McLennan Companies, a global professional services firm. Prior to Marsh & McLennan, Ms. Wittman held a number of other senior finance roles during her career. Ms. Wittman currently serves on the board of directors of Impossible Foods Inc., a sustainable foods company, and is the audit committee chair, as well as a member of the board of directors of Oscar Health. From 2014 to 2019, Ms. Wittman was a member of the board of directors of Ulta Beauty, a cosmetics and beauty supply retailer, and served on its audit committee. She also served as a member of the board of directors of Sirius XM Holdings from 2011 to 2018.

 

Retiring Director

 

JEFFERY H. BOYD

DIRECTOR QUALIFICATIONS

Mr. Boyd brought to the board extensive experience from his long and successful tenure as our President and Chief Executive Officer.

CAREER HIGHLIGHTS

Mr. Boyd has served on our Board since October 2001, as the Chair of our Board from January 2013 to June 2020 and as the Executive Chair of our Board from January 2017 to June 2018; and will be retiring from our Board as of the Annual Meeting. Mr. Boyd served as our Interim Chief Executive Officer and President from April 2016 to December 2016 and as our President and Chief Executive Officer from November 2002 until December 2013. Mr. Boyd was our President and Co-Chief Executive Officer from August 2002 to November 2002 and Chief Operating Officer from November 2000 to August 2002. He previously served as our Executive Vice President, General Counsel and Secretary from January 2000 to October 2000. Prior to joining us, Mr. Boyd was Executive Vice President, General Counsel and Secretary of Oxford Health Plans, Inc. Mr. Boyd is currently chairman of the board of directors of Oscar Health and a member of the board of directors of The Home Depot.

 

 

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Our Governance Framework

We and our Board operate under corporate governance principles that are designed to maximize long-term stockholder value, align the interests of the Board and management with those of our stockholders and promote high ethical conduct among our directors and employees.

A copy of our Corporate Governance Principles is available on our corporate website (www.bookingholdings.com) under the tab “For Investors.” Our Corporate Governance Principles include the following:

 

 

A
majority of the Board must consist of independent directors. See Director Independence
beginning on page 34.

The
NCG Committee will concur annually on a CEO succession plan. See Board Committees – Nominating
and Corporate Governance Committee on page 33.

The
Board and each committee of the Board can hire its own outside advisors.

The
independent directors will have at least two regularly scheduled meetings each year,
which are generally held in conjunction with regularly scheduled Board meetings.

The
Compensation Committee, meeting without our CEO present, will evaluate our performance
and the performance of our CEO and will recommend to the Board the compensation of our
CEO.

We
maintain stock ownership guidelines for directors and executive officers. See Stock Ownership
Guidelines on page 63 and Non-Employee Director Stock Ownership Guidelines on page 81.

A
Lead Independent Director is appointed if the Chair is not independent or as the Board
deems appropriate. See Leadership Structure on page 27.

 

Leadership Structure

Mr. Mylod has been serving as the Chair of the Board since June 2020. In light of Mr. Mylod’s previous experience as an executive of our Company and the resulting familiarity with our operations, Mr. Mylod provides an important connection between the Board’s non-executive directors and management and provides valuable advice to and oversight of the Company’s Chief Executive Officer.

The Board does not have a policy regarding the separation of the roles of Chief Executive Officer and Chair of the Board as the Board believes that it is in our best interests and those of our stockholders to make that determination from time to time based on our needs and those of the Board. The Board has determined that separation of the roles of Chief Executive Officer and Chair is currently in our best interests and those of our stockholders.

Although Mr. Mylod is an independent director, the Board has determined that it is in the Company’s best interest to maintain the position of Lead Independent Director. Mr. Noski has been serving as the Company’s Lead Independent Director since June 2020. The responsibilities of the Lead Independent Director can be found on our corporate website (www.bookingholdings.com) under the tab “For Investors.”

 

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Role of the Lead Independent Director

 

 

CHARLES H. NOSKI

LEAD INDEPENDENT DIRECTOR

call, set the agenda for and lead meetings and executive sessions of the independent directors;

together with the Board Chair, set and approve the Board’s agenda in consultation with the
Chief Executive Officer;

from time to time as he deems necessary or appropriate, consult with the Board Chair and the
Chief Executive Officer as to the quality, quantity and timeliness of the flow of information from management that is necessary for the independent directors to perform their duties effectively;

provide input to the Compensation Committee regarding the performance of the Chief Executive Officer and to the NCG Committee regarding the performance of directors and new candidates to join the Board;

on a case-by-case basis and where appropriate, if requested by major stockholders, be available for consultation and direct communication with such stockholders; and

authorize the retention of outside advisors and consultants who report directly to the Board.

 

Other Select Corporate Governance Policies and Practices

We do:

Code of Ethics. We have adopted a code of ethics that we refer to as our “Code of Conduct” and we require all directors and employees (including officers) to adhere to it in discharging their work-related responsibilities. A copy of our Code of Conduct is available on our corporate website (www.bookingholdings.com) under the tab “For Investors.”

Annual Meetings. At each annual meeting of stockholders, stockholders have the ability to vote on important matters that are presented at the meeting, including the annual election of all of our directors.

Special Meetings. If important matters arise between annual meetings of stockholders, our certificate of incorporation provides that the Chair of the Board, the Vice Chair of the Board (if any), the Chief Executive Officer, the Board or stockholders holding at least 25% of our shares may call a special meeting of stockholders. If properly called, a special meeting of stockholders would provide all stockholders an opportunity to debate and vote on matters outside the annual meeting cycle.

Majority Vote Standard.We have a majority vote standard in uncontested elections of directors, which means that directors are required to tender their resignation unless they receive the support of a majority of votes cast.

Proxy Access and Stockholder Nominees.Stockholders have the opportunity to nominate individuals for election to the Board pursuant to our By-Laws and Delaware law and, in accordance with our By-Laws, to include nominees in our proxy statement. As approved by our stockholders at our 2015 annual meeting, our proxy access By-Law provides that:

any stockholder or group of stockholders holding at least 3% of our outstanding common stock,

continuously for at least 3 years,

can include in our proxy statement nominees for up to 25% of our Board for election at an annual stockholders’ meeting.

Annual Advisory Vote on Executive Compensation. The Board has implemented, and our stockholders have approved, an annual stockholder advisory vote on executive compensation, which means that stockholders have the opportunity to provide feedback on our executive compensation practices on an annual basis.

Lead Independent Director.Since January 2013, we have had a Lead Independent Director with a set of defined responsibilities, including, among other things, if requested and when appropriate, ensuring availability for consultation and direct communication with major stockholders. See Leadership Structure and Board Practices and ProceduresCommunications with the Board of Directors for more details.

Stock Ownership Guidelines. The Board has adopted stock ownership guidelines for executive officers and non-employee directors. See Stock Ownership Guidelines on page 63 and Non-Employee Director Stock Ownership Guidelines on page 81.

 

We do not:

Rights Plan. We do not have a stockholder rights plan, sometimes referred to as a “poison pill.”

Supermajority Voting Provisions. Neither our certificate of incorporation nor our By-Laws contain any supermajority voting provisions.

Classified Board. We do not have a classified board of directors. All directors are elected by the stockholders each year.

 

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Our Board’s Role in Company Strategy

The Board is elected by and accountable to the stockholders and is responsible for our strategic direction and oversight of management.

 

provide consumers with the best choices and prices at any time, in any place, on any device;

make it easy for people to find, book, pay for and experience their travel desires; and

provide platforms, tools and insights to our business partners to help them be successful.

 

Our Strategy

We focus on relentless innovation and execution and a commitment to serve both consumers and our travel service provider and restaurant partners with unmatched service and best-in-class digital technology. We believe that as the COVID-19 pandemic subsides, people feel comfortable traveling and dining out and government restrictions are lifted, the global online travel and dining industries will recover and, after some period of higher growth through the recovery, continue to grow as they did before the COVID-19 pandemic as consumer purchasing shifts from traditional offline channels to interactive online channels, including mobile channels.

As travel demand returns, we plan to continue to participate broadly in this online growth by expanding our service offerings and markets. We aim to be the world leader in online travel and restaurant reservation and related services by:

The Board oversees the formulation and implementation of our strategy. The Board and management, including our executive officers and the chief executive officers of our primary brands, meet (virtually since the COVID-19 pandemic) annually to, among other things, review the state of the markets in which we operate, analyze our competitive position, measure our performance against our strategy and evaluate and adjust our strategy as deemed necessary or appropriate. While management takes the lead in preparing background materials and proposes the going-forward strategic direction for Booking Holdings, the Board plays an active role in overseeing our strategy. In particular, our Chair and Lead Independent Director work closely with management in advance of the meeting to prepare and approve the agenda for the meeting and to consult on the strategy to be proposed by management. Between these annual strategy meetings, management reports to the Board regularly, typically in connection with each regular meeting of the Board, on our implementation of the strategy and our progress toward reaching our strategic goals, and the Board discusses with management whether adjustments should be made in light of any changed circumstances, whether with respect to us, our markets, our competitors or otherwise. In addition, the Board meets regularly in executive session without management where, among other things, it discusses our performance and the continued viability of our strategy.

 

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Board’s Role in Risk Oversight

The Board is actively involved in and committed to management’s risk assessment and efforts to mitigate risk. Our risk management activities include the identification and assessment of the key risks facing us among the universe of business risks (e.g., strategic, operational, financial, privacy and data protection, security and technology, and legal, regulatory and compliance risks). These key risks are identified across the organization from multiple regions and functions, in a process undertaken generally by our internal audit function and overseen primarily by our Audit Committee.

The Board and Audit Committee review these risks at least on an annual basis after they have been identified and assessed by management. The Board, or a committee of the Board, regularly reviews the initiatives put in place to mitigate the effects of these risks. These reviews include updates throughout the year from the businesses, regions and functions from which the key risks arise. Depending on the risk, the update may be presented to the full Board or, if appropriate, to a committee of the Board, which will report to the full Board as appropriate. For example, the Audit Committee is briefed quarterly and the Board is briefed twice a year on the risks the Company faces with respect to cybersecurity, privacy and data protection and the strategy and efforts deployed to mitigate these risks. The Board’s and each committee’s role is one of oversight, recognizing that management is responsible for executing our risk management policies. The oversight of risk within the organization is an evolving process requiring us to continually look for opportunities to further embed systematic enterprise risk management into ongoing business processes across the organization. The Board actively encourages management to continue to develop this process. In addition to the Board’s role in enterprise risk management, various committees of the Board are also responsible for the oversight of certain risks.

AUDIT COMMITTEE

Oversees:

risk assessment and processes generally;

internal control over financial reporting;

risk management related to hedging activities, investments and use of derivative instruments;

risk assessment and processes related to privacy, data protection and security; and

general operational, business continuity, legal, regulatory and compliance risks.

COMPENSATION COMMITTEE

Oversees:

risks related to compensation programs;

risks related to human capital management; and

our compensation policies and practices, including those applicable to our named executive officers, to determine whether they incentivize undesired risk-taking.

See Compensation Risk Assessment on page 82 for information on the compensation risk assessment.

NOMINATING

AND CORPORATE GOVERNANCE COMMITTEE

Oversees:

risks related to the composition of our Board, including ensuring that we have Board members with the appropriate experience, judgment, availability, skills, tenure and ability to effectively oversee our business and fulfill the duties of the Board and each Board committee;

our corporate governance practices; and

the development, improvement and review of our global compliance program, including our Code of Conduct.

MANAGEMENT

On
a quarterly basis, members of management with responsibility for privacy, data protection, security and/or technology risks
update the Audit Committee on these risks, risk management activities and efforts, best practices, lessons learned from
incidents at other companies as well as at our Company, the effectiveness of our security measures and other related
matters. Members of management
responsible
for our internal audit and compliance functions also meet with the Audit Committee regularly, including in executive
sessions
without other members of management present, to report on their areas of responsibility.

The Company has a management-level risk committee tasked with ensuring risks are properly managed or mitigated and aligning strategic objectives with an appropriate level of risk tolerance designed to maximize business success.

 

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Director Orientation and Continuing Education

Our new directors participate in our robust director orientation program. Our director orientation program includes in-depth sessions devoted to director fiduciary obligations, our Company’s strategy and operations and introductions to key members of management, among other topics. Additionally, orientation topics are tailored based on the director’s committee membership and could include a deeper dive on relevant issues such as our compensation program for members of the Compensation Committee, as an example.

We encourage our directors to attend seminars and other corporate governance or director workshops to further develop their expertise or otherwise stay abreast of issues relevant to their service on the Board. Our policy is to reimburse directors for the costs of attending such programs. In addition, our Board and Board committees regularly invite outside experts to present to them on a variety of topics, which have included corporate governance trends and best practices and areas of risk management, such as cybersecurity and privacy issues.

Board Committees

Our Board has three standing committees: an Audit Committee, a Compensation Committee and a Nominating and Corporate Governance Committee. Each committee has a written charter, a copy of which is available on our corporate website (www.bookingholdings.com) under the tab “For Investors.” The tables below provide current membership for each Board committee.

Audit Committee

The Audit Committee’s responsibilities include, among other things:

overseeing and reviewing our consolidated financial statements, accounting practices and related internal controls;

overseeing our relationship with our independent registered public accounting firm, including making all decisions relating to appointing, compensating, evaluating and retaining the independent registered public accounting firm;

overseeing our internal audit function;

establishing procedures for the submission, receipt and treatment of complaints or concerns regarding accounting or auditing matters;

reviewing and approving all related party transactions (defined as transactions required to be disclosed by Item 404 of the U.S. Securities and Exchange Commission (the “SEC”) Regulation S-K); and

acting as our primary risk oversight committee, including by overseeing our compliance program and risk management efforts generally (including with respect to privacy and data security), as well as our major financial risk exposures. See Board’s Role in Risk Oversight on page 30 for additional details.

The Board has determined that each member of the Audit Committee is an independent director based on The Nasdaq Stock Market’s listing rules and that each member of the Audit Committee also satisfies the additional independence requirements of the SEC for members of audit committees.

MEMBERS

Vanessa A. Wittman (Chair)

Mirian M. Graddick-Weir

Nine meetings in 2020

Report Page 94

“Audit Committee Financial Experts”:

 

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Compensation Committee

The Compensation Committee’s responsibilities include, among other things:

setting, or recommending to the Board for determination, the compensation of our chief executive officer;

reviewing and approving the compensation of our other executive officers;

reviewing the policies, programs and initiatives related to human capital management within the workforce, including with respect to diversity and inclusion, Company culture, employee engagement and talent recruitment, development and retention;

administering employee benefit plans including incentive compensation plans and equity-based plans;

recommending to the Board for approval compensation plans for non-employee directors;

making recommendations to the Board with respect to the adoption of incentive compensation plans and equity-based plans;

reviewing and approving succession plans for senior management personnel (other than the CEO, which is the responsibility of the NCG Committee); and

overseeing risks related to compensation programs. See Board’s Role in Risk Oversight on page 30 for additional details.

The Board has determined that each member of the Compensation Committee is an independent director based on The Nasdaq Stock Market’s listing rules and also meets The Nasdaq Stock Market’s additional requirements for membership on the Compensation Committee. The Compensation Committee has the authority to appoint and dismiss its advisors and compensation consultants and approve their compensation. These advisors report directly to the Compensation Committee. The Compensation Committee has retained Mercer LLC (“Mercer”) as its outside compensation consultant. While Mercer reports to the Compensation Committee, the Compensation Committee authorized Mercer to communicate and work with management with respect to the compensation planning process.

 

 

MEMBERS

Mirian M. Graddick-Weir (Chair)

Eight meetings in 2020

Report Page 65

 

 

 

 

 

 

 

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Nominating and Corporate Governance Committee

The NCG Committee is instrumental in our efforts to ensure that the Board is comprised of directors with the necessary skills and experience to effectively oversee our business. The NCG Committee actively and regularly evaluates the composition of the Board, including the skills, diversity and experience of directors, in light of our changing business needs and challenges and takes the lead in identifying needed changes, whether with respect to adding directors with certain skills, experience or other desirable traits, planning for director retirements, ensuring an appropriate mix of short-, medium- and long-tenured directors or for any other reason. When the need for a new director arises, the NCG Committee has the primary responsibility of seeking, identifying and qualifying director candidates. The NCG Committee also oversees the establishment and implementation of our corporate governance standards, practices and policies. The written charter of the NCG Committee provides, among other things, that it shall:

identify individuals believed to be qualified to become Board members, consistent with criteria approved by the Board (which are set forth in our Corporate Governance Principles and the NCG Committee’s charter and which are described above in Nomination and Election Process Identifying Director Candidates on page 18), and to select, or recommend to the Board, the nominees to stand for election as directors at the annual meeting of stockholders;

identify and recommend that the Board appoint Board members qualified to fill vacancies on any committee of the Board (including the NCG Committee);

assess whether candidates to join the Board would be “independent” under the listing rules of The Nasdaq Stock Market;

establish procedures to receive prompt notification of changes in a director’s circumstances that may affect his or her qualifications or independence as a director and review such information and make recommendations as deemed appropriate;

regularly evaluate and, as appropriate, recommend to the Board any modifications or enhancements to the Board’s Corporate Governance Principles, and review and consider the effectiveness of the Corporate Governance Principles at least once a year;

review and concur on a succession plan for selecting a successor to the Chief Executive Officer, both in emergency situations and in the ordinary course of business;

at least annually, review our Code of Conduct and Stockholder Communications Policy and their effectiveness and, if appropriate, make recommendations for Board approval for enhancements thereto;

periodically review our policies and practices relating to sustainability, including environmental, social and governance matters; and

design a process for the Board to conduct a self-evaluation at least annually.

The Board has determined that each member of the NCG Committee is an independent director based on The Nasdaq Stock Market’s listing rules. The NCG approved and recommended to our Board the eleven director nominees standing for election at the Annual Meeting.

MEMBERS

Charles H. Noski (Chair)

Lynn M. Vojvodich

 

  Three meetings in 2020

 

 

 

 

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Director Independence

The Guidelines

Our independence guidelines outlined in the Corporate Governance Principles conform to the independence requirements in the Nasdaq Stock Market’s listing rules and the rules of the SEC. As the NCG Committee and the Board apply these guidelines to make independence recommendations and determinations, as applicable, all relevant known facts and circumstances are considered.

 

Applying the Guidelines

In connection with the Board and the NCG Committee’s determination of independence, both the NCG Committee and the Board take into account relationships between us and companies with which directors may be affiliated, as well as the specific requirements of The Nasdaq Stock Market, the SEC and our Corporate Governance Principles. The table below summarizes the relationships that were considered in connection with the independence recommendations and determinations.

Director

Organization

Director

Relationship to

Organization

Primary Type of Transaction/

Relationship/Arrangement

between Booking Holdings

and Organization

Independence Determination

Mr. Mylod

Dropbox

Board member

Ordinary course purchase of products or services

not an executive officer of Dropbox

no involvement and no material interest in the transactions

the amounts in question were small relative to both our business and Dropbox’s business and below the Nasdaq independence thresholds

Mr. Noski

Hewlett Packard Enterprise

Board member

Ordinary
course purchase of computer product and data center services and sale of recycled servers

not an executive officer of HPE

no involvement and no material interest in the transactions

the amounts in question were small relative to both our business and HPE’s business and below the Nasdaq independence thresholds

 

Wells Fargo

Board member

Ordinary course payment of fees for banking services and underwriting fees in connection with a Company bond offering

not an executive officer of Wells Fargo

no involvement and no material interest in the transactions

the amounts in question were small relative to both our business and Wells Fargo’s business and below the Nasdaq independence thresholds

Mr. Read

Vodafone

CEO/Director

Ordinary course purchase of telecommunications services

not involved in decision to purchase services or the transactions

no material interest in the transactions

the amounts in question were small relative to both our business and Vodafone’s business and below the Nasdaq independence thresholds

Mr. Rothman

Sony Pictures Entertainment Motion Picture Group

Chairman

Ordinary course purchase of advertising services

not involved in decision to purchase services or the transactions

no material interest in the transactions

the amounts in question were small relative to both our business and Sony’s business and below the Nasdaq independence thresholds

 

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Director

Organization

Director

Relationship to

Organization

Primary Type of Transaction/

Relationship/Arrangement

between Booking Holdings

and Organization

Independence Determination

Ms. Vojvodich

Dell

Board member

Ordinary course purchase of computer products and software

not involved in decision to purchase services or the transactions

no material interest in the transactions

the amounts in question were small relative to both our business and Dell’s business and below the Nasdaq independence thresholds

 

Figma

Board member

Ordinary course purchase of design tool licenses

not involved in decision to purchase services or the transactions

no material interest in the transactions

the amounts in question were small relative to both our business and Figma’s business and below the Nasdaq independence thresholds

 

Independence Assessment

All of the transactions described above were entered into at arm’s length in the ordinary course of business. Aggregate payments to each of the organizations, in each of the last four fiscal years, did not exceed the greater of $200,000 or 5 percent of that organization’s consolidated gross revenues in a single fiscal year for the relevant period. No director had any direct or indirect material interest in the transactions or received any direct personal benefit from any of these transactions, relationships, or arrangements. Therefore:

For 2020, the NCG Committee recommended to the Board, and the Board determined, that each of the directors elected at the 2020 annual meeting of stockholders, other than Messrs. Boyd (the former Chair of our Board and our former Executive Chair and former Chief Executive Officer and President) and Fogel (our current President and Chief Executive Officer), was an “independent director” based on The Nasdaq Stock Market’s listing rules, the rules of the SEC and our Corporate Governance Principles; and

For 2021, the NCG Committee recommended to the Board, and the Board determined, that each of the nominees for election to the Board at the Annual Meeting is an “independent director” based on The Nasdaq Stock Market’s listing rules, the rules of the SEC and our Corporate Governance Principles, other than Mr. Fogel.

 

Board Practices and Procedures

Communications with the Board of Directors

Stockholders may contact any of our directors, a committee of the Board, non-employee or independent directors as a group, or the Board as a whole by writing to them c/o Office of the General Counsel, Booking Holdings Inc., 800 Connecticut Avenue, Norwalk, Connecticut 06854. Stockholders should state in such communication how many shares of our common stock they own as of the date of their communication. Communications received in this manner will be handled in accordance with procedures developed and approved by the Board, including a majority of our independent directors.

The procedures (available on the Company’s website) provide that in general, communications to the Board will be initially reviewed and logged by our Corporate Secretary and then periodically, and at least quarterly, forwarded to the Chair of the Board and the Lead Independent Director, if there be one, and/or the Chair of the NCG Committee.

Board of Director Attendance

Regular meetings of the Board are generally held six times per year and special meetings are scheduled when necessary. The Board held ten meetings in 2020. For 2020, all directors attended at least 75% of the meetings of the Board and the Board committees of which they were members held while they were serving on the Board and any such committees.

 

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Attendance at Annual Meetings

We expect directors to attend our annual meetings of stockholders. All twelve current members of the Board attended our 2020 virtual annual meeting of stockholders.

 

Compensation-related Corporate Governance

See Key Governance Matters on page 63 for our various compensation related corporate governance policies and practices, including, among other things, policies regarding compensation clawbacks, 10b5-1 plans and hedging and pledging of securities.

 

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Sustainability

Our approach to sustainability is a natural extension of our mission to make it easier for everyone to experience theworld.

We are committed to sustainability efforts that will further our mission including, initiatives to promote sustainable tourism, improve global business and tech industry diversity, act as responsible environmental stewards, create inclusive services and programs for employees and customers, protect customer privacy and do what we can to ensure human rights are respected, among others. For more information, please refer to our sustainability web page and report available at https://www.bookingholdings.com/sustainability.

 

Diversity, Inclusion & Belonging

We aspire to reflect the dynamic populations of our customers and the destinations we help people visit as we work together to make it easier for everyone to experience the world. We believe that travel, and therefore our business, helps increase understanding, acceptance and a sense of welcome as people broaden their horizons, are introduced to other people and cultures, have new experiences, increase their knowledge and grow to appreciate the world in which we live. We believe that our Company, our stockholders, our customers and our employees all benefit from our commitment to inclusive leadership in all aspects of our Company.

In response to the ongoing challenges facing multicultural and racially diverse communities, we have taken specific actions described below under “Diversity, Inclusion & Belonging” and “Attraction, Development and Retention” to better serve all of our people. While these actions alone will not resolve long-standing challenges of equality, we hope that they allow us to better serve our colleagues and customers.

Leadership at the Top

The Compensation Committee is tasked with oversight of human capital management, including diversity and inclusion,
Company culture, employee engagement and talent recruitment, development and retention.

NCG Committee has a policy to consider diversity, including viewpoints, backgrounds, experience, gender, race
and ethnicity or national origin, as a factor in recommending persons for election or appointment to the Board.

As of the Annual Meeting, 36% of the Board are women and 2 of our Board leadership positions are held by women
(Chair of the Audit Committee and Chair of the Compensation Committee).

As of the Annual Meeting, 2 out of 11 directors are racially or ethnically diverse.

Diversity and Inclusion steering committee guides diversity, inclusion and belonging strategy throughout the
Company.

Diversity, Inclusion and Belonging

We are in the process of providing increased transparency with regard to the race and ethnicity of our U.S.
workforce, including a plan to publish the Company’s Consolidated EEO-1 Report for employees in the United States (which
represents approximately 17% of our workforce as of December 31, 2020). Due to global privacy, societal norms and legal requirements,
we cannot collect our global workforce representation, but we are in the process of working with a third-party to conduct a cultural
assessment of our workforce outside of the United States that can give us more information on the experience of our employees in
underrepresented groups.

As of December 31, 2020, approximately 50% of our employees were women, approximately 22% of our technology
positions were filled by women and approximately 30% of our extended leadership team (which includes our senior leadership and
extends 1 to 4 levels below the chief executive officer of each brand company (depending on the number of employees within each
brand)) were women.

Examples of our employee diversity resource groups include: LGBTQ+; Gender equality; Differing physical abilities
and neurodiversity needs; and BIPOC Community.

We have deployed learning resources to help managers better understand how we can stand together against racial
injustice and support colleagues who may be experiencing its impact.

To build awareness on a variety of issues, we introduced a leadership speaker series featuring diverse professionals,
academics, and thought leaders to speak to topics such as race, diversity and equality.

We are committed to pay equity, regardless of gender, race or ethnicity. With the help of our independent compensation consultant, Mercer, we conduct pay equity studies every other year and in the off years, we work on remediation plans to address outliers.

 

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Attraction, Development and Retention

We reviewed and adjusted our talent attraction strategies to advance inclusive hiring practices.  Examples
of these initiatives at our brand companies include, among others: evaluating recruiters by whether they provide a diverse slate
of candidates, incorporating behavioral-based interviewing in talent acquisition protocols, inclusive hiring training programs
and auditing job descriptions to ensure inclusivity.

Our Women in Leadership program aims to build a pipeline of gender diverse talent by focusing on career development for high performing women.

While specifics vary by brand, in the United States, our employee benefit plans generally include: benefits
for infertility treatment, gender reassignment surgery, gender-neutral domestic partners and paid parental leave.

Certain brands that offer employee volunteer programs created avenues to serve causes around social justice.

 

Fintech Zoom

Financial Times

Workplace Pride

Foundation:

Best Employers for Diversity

First Place, Diversity Leaders 2020
(Booking.com)

Most Engaged Network (Booking.com’s LGBTQ+ Employee Network Group, B.Proud) (2019)

 

Sustainable Travel

We believe we have a responsibility to help ensure the world remains worth experiencing and to promote a more sustainable travel industry – culturally, environmentally and socioeconomically. The NCG Committee is tasked with periodically reviewing our sustainability practices and policies, including environmental, social and governance matters. Our sustainability strategy focuses on our own environmental impact through our operations as well as making it easier for the consumer to make sustainable travel choices and helping our travel partners as they look for ways to become more sustainable and improve their businesses for the future.

Facilitating sustainable travel

We are supporting our partners’ efforts to make their products and operations more sustainable through knowledge-sharing events and educational resources.

We have made it easier for partners to share sustainability data through the Booking.com partner platform and have begun showing this information to consumers.

We published a sustainability handbook available to partners that shares the benefits of adopting sustainable practices and tips for adopting them.

Making sustainable travel choices easier for consumers

Based on our own research and business insight, we know that many consumers are increasingly focused on making sustainable travel choices but struggle to do so likely because of lack of understanding of what constitutes sustainable travel or because finding these offerings is difficult.

In 2020, KAYAK launched its Least CO2 sorter in several countries, which enables consumers to see the environmental impact of their flight.

 

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Reducing our operational environmental footprint

Our strategy to reduce our environmental footprint in our own operations is rooted in renewable energy procurement, the business travel program and waste processing. While many of our carbon reduction initiatives were impacted by pandemic-related office closures and the halt of business travel, we continued to prioritize climate initiatives.

In 2020, Booking Holdings achieved carbon neutrality in its operations.

In order to offset operational emissions, we purchased Gold Standard and Verified Carbon Standard certified projects that contribute to the long-term sustainability of the industry.

You can find more information on our sustainability efforts with respect to the environment in the Facilitating Sustainable Travel and Improving Environmental Performance chapters of the Sustainability report at http://www.bookingholdings.com/sustainability.

Cybersecurity, Customer Privacy & Data Protection

We believe that managing cybersecurity, privacy and data protection risk is a vital part of our responsibilities to our customers and our employees. We have built a comprehensive governance structure for managing these risks which we believe will ultimately build a competitive trust advantage for our Company.

 

Privacy, Information Security and Data Protection Governance Structure

The Audit Committee has primary oversight of our privacy and data security risks.

Quarterly at the Audit Committee and twice a year with the Board there is an update from members of management with responsibility for cybersecurity, privacy, data protection, security and/or technology risks that covers these risks, risk management activities and efforts, best practices learned from within the Company and from other companies, the effectiveness of our security measures and other related matters.

 

Privacy Program & Privacy Principles

Our Booking Holdings privacy program is built upon our Privacy Principles of transparency, purpose, choice, security, individual rights and accountability that are communicated through our Code of Conduct. Our Company is committed to protecting personal data through privacy programs that endeavor to meet the controls and standards set and monitored by our Privacy and Internal Audit teams.

 

Information Security

We have structured our information security program to align with the National Institute of Standards and Technology (NIST) Cybersecurity Framework. Our information security program, which has been adopted by all of our brands, is independently assessed by a third party as part of the Company’s enterprise risk management. The conclusions of such assessment are discussed with our Audit Committee.

 

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Security Ownership of Certain Beneficial Owners and Management

The following table sets forth certain information known to us with respect to beneficial ownership of our common stock as of March 31, 2021 by (1) each person known by us to be the beneficial owner of more than 5% of our common stock; (2) each member of the Board and each of our director nominees; (3) our Chief Executive Officer, our Chief Financial Officer and each of our other named executive officers in the Summary Compensation Table on page 66 in this proxy statement; and (4) all directors and executive officers as a group. The percentage of shares owned is based on 41,050,923 shares outstanding as of March 31, 2021.

Name of beneficial owner

Shares beneficially owned(a)

Number

Percent

Robert J. Mylod, Jr.

1,256

*

Timothy M. Armstrong(b)

843

*

Jeffery H. Boyd(c)

49,866

*

Glenn D. Fogel

40,005

*

Mirian M. Graddick-Weir

446

*

Wei Hopeman

162

*

Charles H. Noski(d)

843

*

Nicholas J. Read

422

*

Thomas E. Rothman(e)

843

*

Bob van Dijk(f)

0

*

Lynn M. Vojvodich

843

*

Vanessa A. Wittman

312

*

David I. Goulden

3,356

*

Peter J. Millones

11,047

*

The Vanguard Group(g)

3,106,412

7.6%

BlackRock, Inc.(h)

2,896,031

7.1%

T. Rowe price Associates, Inc.(i)

1,903,707

4.6%

All directors and executive officers as a group (14 persons)(j)

110,244

*

*

Represents beneficial ownership of less than one percent.

(a)

Beneficial ownership is determined in accordance with the rules of the SEC and includes sole or shared voting and investment power with respect to securities, except as discussed in the footnotes below. Shares of common stock issuable (i) upon the exercise of stock options that are currently exercisable or exercisable within 60 days after March 31, 2021 and (ii) upon vesting of restricted stock units or performance share units that vest by their terms within 60 days after March 31, 2021, are deemed to be outstanding and to be beneficially owned by the person holding such stock options, restricted stock units and/or performance share units for the purpose of computing the percentage ownership of such person, but are not treated as outstanding for the purpose of computing the percentage ownership of any other person. Certain directors have elected to defer receipt of shares of common stock pursuant to vested restricted stock unit awards for tax planning purposes. However, depending on the terms of the deferral program in place at the time of the deferral, if the director does not have the right to receive the shares until more than 60 days after termination of board service, those shares are not included in the above table even though the director has vested in the shares and bears the economic risk of ownership.

(b)

Does not include 755 vested shares the receipt of which has been deferred by Mr. Armstrong for tax planning purposes (such shares will be issued to Mr. Armstrong 90 days after termination of his Board service).

(c)

Does not include 567 vested shares the receipt of which has been deferred by Mr. Boyd for tax planning purposes (such shares will be issued to Mr. Boyd 90 days after termination of his Board service).

(d)

Does not include 209 vested shares the receipt of which has been deferred by Mr. Noski for tax planning purposes (such shares will be issued to Mr. Noski 90 days after termination of his Board service).

(e)

Does not include 755 vested shares the receipt of which has been deferred by Mr. Rothman for tax planning purposes (such shares will be issued to Mr. Rothman 90 days after termination of his Board service).

(f)

Mr. van Dijk was elected to the Board on June 4, 2020.

 

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(g)

Based solely on information provided in a Schedule 13G/A filed by The Vanguard Group (“Vanguard”) with the SEC on February 10, 2021. These securities are owned by Vanguard directly or through wholly-owned subsidiaries of Vanguard. Vanguard reported that it had sole voting power over 0 shares, shared voting power over 70,959 shares, sole dispositive power over 2,923,620 shares and shared dispositive power over 182,792 shares. Vanguard lists its address as 100 Vanguard Boulevard, Malvern, Pennsylvania 19355.

(h)

Based solely on information provided in a Schedule 13G/A filed by BlackRock, Inc. (“BlackRock”) with the SEC on February 5, 2021. These securities are owned by various institutional investors affiliated with BlackRock. BlackRock reported that it had sole voting power over 2,487,832 shares, shared voting power over 0 shares, sole dispositive power over 2,896,031 shares and shared dispositive power over 0 shares. BlackRock lists its address as 55 East 52nd Street, New York, New York 10055.

(i)

Based solely on information provided in a Schedule 13G/A filed by T. Rowe price Associates, Inc. (“price Associates”) with the SEC on February 16, 2021. price Associates reported that it had sole voting power over 638,548 shares, shared voting power over 0 shares, sole dispositive power over 1,903,707 shares and shared dispositive power over 0 shares. For purposes of the reporting requirements of the Exchange Act, price Associates is deemed to be a beneficial owner of such securities; however, price Associates expressly disclaims beneficial ownership of such securities. price Associates lists its address as 100 E. Pratt Street, Baltimore, Maryland 21202.

(j)

Consists of shares beneficially owned by all of our directors and executive officers,as a group. Does not include 2,286 vested shares of non-employee directors, the receipt of which has been deferred for tax planning purposes (because such shares will be issued 90 days after termination of such director’s Board service).

 

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Compensation Discussion and Analysis

This Compensation Discussion and Analysis (“CD&A”) describes our 2020 executive officer compensation program, provides information about the goals and the key elements of the program and explains the reasons behind the Compensation Committee’s executive officer compensation decisions. For 2020, our “named executive officers” (“NEOs”) were the following (titles are as of December 31, 2020):

Name

Title

Age*

Executive Officer Since

 

Glenn D. Fogel

Director, President and Chief Executive Officer
Chief Executive Officer, Booking.com

59

2011

 

David I. Goulden

Executive Vice President and Chief Financial Officer

61

2018

 

Peter J. Millones

Executive Vice President, General Counsel and Corporate Secretary

51

2001

 

*

Ages as of March 31, 2021.

The CD&A discusses the compensation program applicable to our named executive officers (who were our only executive officers for purposes of Exchange Act Rule 3b-7 during 2020).

 

Executive Summary

Our Response to COVID-19

Management and Company performance in 2020 are defined by and evaluated against the unprecedented impact of the COVID-19 pandemic on the Company, the travel industry and the world as a whole. While the Company had a strong start to the year in January and the beginning of February, the COVID-19 pandemic began to negatively impact our business, starting first in Asia in the middle of the first quarter of 2020. By the end of March 2020, COVID-19 had spread globally and our reported room nights (which includes the effect of cancellations) for the full month declined by over 100% compared to March 2019. Faced with the rapid and almost complete cessation of travel in the early weeks of the pandemic, management took numerous important steps to stabilize the Company, protect employees, reduce costs and address the immediate impacts of the pandemic on the business, which included:

Shifting almost all of our employees to work from home, including by quickly implementing plans for customer service agents to receive equipment and training to enable them to work from home and address the enormous volume of calls related to reservation cancellations, travel restrictions and similar matters in an effective way to help our customers and partners deal with the immediate impacts of the pandemic;

Raising $4.1 billion in debt and negotiating amendments to our revolving credit facility to ensure sufficient liquidity in the event the Company had to face a prolonged period of little to no revenue and/or unprofitability;

Participating in certain government aid programs designed to maintain employment or delay employee dismissals longer than would have otherwise been likely;

Suspending general share repurchases;

Significantly reducing marketing expenditures worldwide;

Eliminating non-essential business travel and cancelling Company events and offsites; and

Implementing a general company-wide hiring freeze.

 

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Financial and Operating Performance

As shown in the following graphs, the Company was severely and negatively impacted in 2020 by the COVID-19 pandemic.

GROSS TRAVEL BOOKINGS

(BILLIONS)

 

ROOM NIGHTS

(MILLIONS)

 

REVENUE*

(BILLIONS)

 

ADJUSTED EBITDA**

(BILLIONS)

 

 

*

As a result of the revenue recognition accounting standard that began in 2018, total revenues reported in 2018, 2019 and 2020 are comparable to gross profit reported in previous years. For more information, see Note 2 to the Consolidated Financial Statements included in our Form 10-K for the year ended December 31, 2018.

**

See Appendix A to this proxy statement for a reconciliation of non-GAAP financial measures and the rationale for the use of non-GAAP financial measures.

 

As it became clear during 2020 that the pandemic was not a short-term issue and that the recovery of the travel business to 2019 levels would take years rather than quarters, management formulated a strategy to optimize the business for the reduced travel demand and to prepare the Company to emerge from the pandemic in a stronger position. Our optimization efforts included evaluating personnel needs in the near- to medium-term, particularly in areas that are highly dependent on business volumes, such as customer service. While necessary, this process led to the unfortunate outcome of needing to undertake restructuring activities at each of our brands, resulting in a 23% year-over-year reduction in our workforce as of December 31, 2020, including through attrition. Throughout this process, management consulted with works councils, unions and employee representatives, as applicable, and worked to provide termination benefits, including severance payments, job placement services and counseling services. While our restructuring actions were completed at all brands except Booking.com by mid-summer, because of the complex nature of employee reductions in certain jurisdictions, like the Netherlands, our restructuring actions at Booking.com were not completed until after year-end 2020. The pandemic greatly impacted our employees’ overall morale, as concerns about personal and family physical health were compounded by concerns for the travel industry’s future and one’s own financial health. However, management successfully guided the Company through these difficult decisions as shown by the results of our employee engagement surveys which demonstrate a committed and engaged workforce.

 

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Our efforts to emerge from the pandemic in a stronger position include, among other things, continued investments in the business, including our services, websites and apps, IT systems and cybersecurity, sustainability initiatives, collaboration and cooperation among our brands, and preparing new marketing plans to launch as appropriate. We continued to expand our payments platform at Booking.com with 22% of its 2020 gross bookings processed on its platform, which was up from over 15% in 2019. We continued to build towards our Connected Trip vision with Booking.com launching its flight product in the United States in the fourth quarter of 2020. We continued working to improve our offering in North America as we pursued our strategic priority to gain share in this important travel market. Although 2020 was a difficult year for the Company, the travel industry and the world, we are optimistic about the future and the Company’s long-term prospects for success, significantly because of management’s performance in response to the pandemic.

 

Stock price

While our financial results were negatively impacted by the COVID-19 pandemic, during 2020, our stock price rebounded from the low price of $1,152 on March 23, 2020 to end the year with a closing price of $2,227 (an all-time high as of December 31, 2020), representing a 93% increase from the low point during the year and an 8% increase compared to the closing price of $2,054 on December 31, 2019. Further, our stock price increased 28% over the preceding three-year period from a closing price of $1,738 on December 31, 2017.

STOCK price AS OF DECEMBER 31,

 

Stockholder Engagement

Through our stockholder engagement efforts and communications from our stockholders, we receive stockholder feedback on our compensation programs and practices and communicate that information to the Compensation Committee. During our fall 2020 stockholder outreach campaign, management engaged stockholders on several governance, sustainability, diversity, equity and inclusion and executive compensation topics, including soliciting input on the views of our stockholders on various compensation practices, the structure of our historical compensation program and potential modifications in light of the impact of the COVID-19 pandemic on our business. Stockholders generally expressed support for the following:

Customized 2020 compensation programs that balance the need to reward, motivate and retain executives with a recognition of the hardship faced by other stakeholders, including stockholders and employees as a result of the COVID-19 pandemic;

Flexibility in the metrics used in our compensation plans given how difficult forecasting has become, particularly in the travel industry;

The use of relative metrics such as relative TSR, especially to address the current unpredictability in our business; and

Detailed disclosure of the considerations and alternatives evaluated by the Compensation Committee in making 2020 compensation decisions to better understand the rationale for these decisions in light of the COVID-19 pandemic.

After engaging with approximately 20 of the Company’s largest stockholders (which represented approximately 37% of our total shares outstanding) as of September 30, 2020, management communicated the results of the engagement to the Compensation Committee as it was making its remaining 2020 executive compensation decisions in the fourth quarter of 2020 and first quarter of 2021.

 

2020 COVID-19 Pandemic Related Compensation Decisions

When the
long-term impact of the COVID-19 pandemic on the Company became apparent and it was clear that the Company’s typical
compensation plans would not serve to incentivize management performance, provide certain key

 

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elements
of compensation or serve as a useful retention tool, the Compensation Committee embarked on an extensive process to develop a
compensation program for our executive officers that would accomplish the objectives we aim to achieve with our compensation
programs. See the Philosophy and Objectives section below. The process and reasoning that
the Compensation Committee used to arrive at the 2020 compensation decisions for our NEOs is described in the Executive Summary Stockholder Engagement, 2020 Executive Officer Compensation Program
and 2020 Named Executive Officer Performance sections. In
summary, this process resulted in 2020 compensation for our NEOs as follows:

Mr. Fogel voluntarily declined his salary beginning in March through the end of 2020 and Messrs. Goulden and Millones voluntarily reduced their salaries by 20% from June through the end of 2020;

Mr. Fogel received no bonus for 2020 and Messrs. Goulden and Millones received bonuses of 70% of their targets;

Mr.
Fogel was awarded $7 million of RSUs and Mr. Millones was awarded $2.25 million of RSUs to constitute Messrs. Fogel’s
and Millones’ long-term incentives for 2020 (which were both based on 50% of the grant date value of their respective 2019 PSU awards); and

In
recognition of Mr. Goulden’s critical and expanding role in the Company’s strategy and finance transformation and his
oversight of significant COVID-19-related efforts, Mr. Goulden was awarded a Strategic PSU (defined below) award with a
nominal value of $10 million primarily for retention purposes and a Strategic PSU award with a nominal value of $7 million to
constitute Mr. Goulden’s long-term incentive for 2020.

For a summary of certain compensation decisions taken in 2021 that may be useful for an understanding of the 2020 compensation decisions, see Certain 2021 Compensation Decisions 2021 Equity Awards.

 

Philosophy and Objectives

For many years, the Compensation Committee has used the following guiding principles when setting executive compensation and establishing our executive compensation programs:

Performance-based: executive officers should be compensated primarily on performance.

Alignment with interests of stockholders: the programs should align the interests of executives with those of stockholders by incentivizing management through performance metrics that are likely to increase long-term stockholder value.

Retention: the programs should help us attract and retain key management talent.

Consistency: the programs should be consistent over time to enable executive officers to implement a long-term strategy and reward them if they achieve long-term results.

Business focused: the programs aim to compensate executive officers primarily for their management of the business and try to mitigate the impact of external factors, such as currency fluctuations.

Risk management: the programs should incentivize appropriate risk taking while deterring excessive or inappropriate risk taking.

Although the Company’s compensation programs were necessarily altered to address the extreme and unusual circumstances resulting from the COVID-19 pandemic, the Compensation Committee continued to look to these principles when determining executive compensation for 2020.

The Compensation Committee generally believes that our compensation program should provide an appropriate balance between short-term and long-term performance, with an emphasis on long-term performance. As a result, historically our senior executive compensation program has been designed to be weighted such that most of an executive’s potential compensation is delivered through our long-term equity incentive awards, which have been generally in the form of three-year performance share units (“PSUs”). The Compensation Committee believes that this approach focuses executives on long-term performance while encouraging responsible short-term decision-making to achieve sustainable revenue and earnings growth over time. However, as more fully explained below, due to our inability during 2020 to reasonably project future business performance (especially over a long-period such as three years) and thereby set appropriate financial performance goals for three-year PSUs, the Compensation Committee had to rethink the structure of our executive officer compensation programs for 2020.

Further, with the loss of value in the 2018 PSUs (as defined below) and the 2019 PSUs (as defined below) and the urgency of managing the Company through the pandemic, the Compensation Committee recognized that retention incentives were particularly important in 2020. This was especially true with respect to Mr. Goulden who joined the Company in 2018 and therefore had not yet experienced any PSU vesting.

 

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In addition, the Compensation Committee and management recognized and considered the extreme impacts of the pandemic on the Company’s stakeholders, including stockholders, employees, partners and customers. For example, although the Company’s stock price recovered and ended 2020 8% higher for the year, for much of 2020 the Company’s stock price was significantly below 2019 levels, which negatively impacted our stockholders. Further, the Company’s restructuring activities resulted in many lost jobs and other difficult circumstances for our employees. As a result, although the Compensation Committee recognized the strong performance of our executive officers, particularly in navigating the Company through the worst year for the travel industry in the jet-travel era, when making executive compensation decisions it had to balance that performance, market pay rates and retention incentives against the realities being experienced by many of our stakeholders.

 

Key Compensation Policies

The Compensation Committee continually reviews our executive officer compensation program and seeks the advice of Mercer, its independent compensation consultant, to ensure that it maintains compensation practices that are in the best interests of our stockholders. Although we changed certain aspects of our compensation programs as a result of the COVID-19 pandemic as described in this CD&A, our key compensation policies remained unchanged.

We do:

 

We do not:

Tie pay to performance.

 

Provide change in control severance tax gross-ups and do have a policy against future such arrangements.

Use “double triggers” in our severance agreements and equity awards.

 

Permit stock option repricing without stockholder approval.

Have significant stock ownership guidelines.

 

Provide significant executive-only perquisites.

Have a clawback policy.

 

Permit hedging or pledging of our stock by our directors and executive officers.

Conduct an annual risk assessment of our executive officer compensation program.

 

 

 

Cap the bonus pool from which senior executives’ individual cash bonuses are paid.

 

 

 

Conduct an annual stockholder engagement process.

 

 

 

Conduct formal executive succession planning.

 

 

 

 

Pay Elements

Under normal circumstances, we use different elements of our senior executive compensation program to serve different objectives and drive different behaviors, which thereby work together to achieve the objectives described above, as noted in the table below. While in general these principles continued to guide the Compensation Committee in its decision-making process in 2020, the Compensation Committee acted prudently to ensure the retention and appropriate compensation of the NEOs and therefore the 2020 pay elements were altered as described in 2020 Executive Officer Compensation Program.

Element

Purpose

Key Characteristics

Base Salary

Provide a level of economic security and stability so that executives can focus on meeting our objectives.

Determined by:

Information from the Compensation Peer Group described below;

Individual performance of the executive, including level of responsibility and breadth of knowledge; and

Internal review of the executive’s total compensation, both individually and relative to other senior executives.

Annual Cash Incentive Bonus Plan

Provide a meaningful annual cash bonus opportunity for meeting short-term objectives.

Bonus pool determined by Company financial performance.

Individual bonuses determined by a combination of Company financial performance and individual performance.

 

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Element

Purpose

Key Characteristics

Long-term Equity Incentives

Provide a significant compensation opportunity tied to long-term
financial performance and increases
in our stock price over a three-year period.

PSUs

Tied to our financial performance;

Number of shares ranges from zero to 2x the “target” grant, depending on our financial performance over the three-year period; and

Vest, subject to continued employment by us, on the three-year anniversary of the grant date.

RSUs

Generally used in connection with new hires or promotions to provide an additional retention incentive until the individual’s PSUs begin to vest.

 

Measuring Performance

At the beginning of 2020, prior to the global outbreak of COVID-19, we expected to measure NEO performance based on two financial metrics:

Compensation EBITDA is a non-GAAP financial measure based on our adjusted EBITDA, or adjusted earnings before interest, taxes, depreciation and amortization, as publicly reported in our earnings press releases (“Adjusted EBITDA”), further adjusted in various ways to ensure performance is measured on a basis consistent with how the performance targets were set and to reduce the risk that our compensation plan could incentivize inappropriate decision-making by management to achieve Compensation EBITDA targets.

Compensation Revenue is a non-GAAP financial measure that is the non-GAAP revenue included in the calculation of Compensation EBITDA.

For 2020, we had intended to use both of these metrics as the basis for our planned 2020 PSUs and 2020 senior management bonus plan. However, we ultimately did not grant the originally planned 2020 PSUs and the targets set for the 2020 senior management bonus plan prior to the COVID-19 outbreak became irrelevant shortly after they were set. In addition, the extreme impact of the COVID-19 pandemic on our business and the travel industry and the uncertainty of the speed and timing of any recovery from the pandemic made it impractical to set 2020 or long-term performance goals based on financial performance. As a result, these performance measures did not factor into the 2020 compensation of our named executive officers. Instead, 2020 performance of our named executive officers was evaluated by the Compensation Committee based on their individual performance managing the Company through the difficulties of 2020, which included an evaluation of financial performance in light of the COVID-19 pandemic, as well as the Company’s non-financial goals. These non-financial goals included, among other things, various cooperative goals among our brands, certain capital management goals and executive retention and succession planning objectives.

In addition, special PSU awards (the “Strategic PSUs”) were designed for Mr. Goulden due to the particularly critical role he plays in managing certain key initiatives of the Company and the need to successfully navigate through the pandemic while succeeding at these initiatives, as well as to provide important retention incentives for Mr. Goulden. The Compensation Committee established performance criteria for the Strategic PSUs based on achievement of the strategic goals. See below in section 2020 Executive Officer Compensation Program Equity Incentives Performance Share Units (PSUs) for a detailed explanation of the Strategic PSU vesting and stock price appreciation factor terms.

 

 

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2020 Executive Officer Compensation Program

Under normal circumstances, each year’s executive officer compensation program is established by March 4, when the year’s annual equity awards are typically granted. As part of establishing each annual program, the Compensation Committee reviews all compensation elements, including each executive officer’s base salary, annual cash incentive bonus plan opportunity and equity incentives, as well as payments that would be required under various severance and change in control scenarios. Given the unprecedented issues presented by the COVID-19 pandemic, the Compensation Committee made various 2020 compensation decisions throughout the year after having devoted significant time and effort deliberating the appropriate compensation decisions for the named executive officers. Management also conducted an outreach campaign with many of the Company’s largest stockholders in order to understand stockholder perspectives on executive compensation in this environment. Management gathered this input throughout the fall of 2020, shared this with the Compensation Committee and the Compensation Committee considered these perspectives when forming the compensation decisions for 2020. See Executive Summary Stockholder Engagement for further details on what we heard from stockholders in 2020.

In making annual compensation decisions and recommendations, the Compensation Committee considers historical compensation, including the value of outstanding unvested equity awards, as well as information about market compensation from the Compensation Peer Group analysis described below and individual performance of the executive, including level of responsibility, potential for individual contribution and breadth of knowledge and expertise. Before giving final approval of the annual compensation of executive officers, the Compensation Committee and, with respect to our Chief Executive Officer, the Board, generally reviews a presentation of total compensation, a “tally sheet,” prepared by Mercer. The tally sheet summarizes each executive officer’s total “target” compensation for the applicable year and, using a year-end stock price, estimates the payments to be made to the executive officer under certain termination of employment and change in control scenarios. For 2020, as a result of the tally sheet analysis, the Compensation Committee did not make any adjustments to its recommendations. The relative importance of these factors varies depending on the individual executive, as well as the results of the annual review process and any promotion or other change in responsibility. The Compensation Committee ultimately exercises judgment and discretion when setting or recommending the compensation of our executive officers.

Due to the extreme impact of the COVID-19 pandemic on the Company’s business in 2020, the Compensation Committee believed it was prudent to adjust the 2020 executive compensation program. The compensation program that had originally been planned for 2020 quickly became obsolete and ineffective to support the purposes for which it was designed as discussed above.

Some of the unique issues faced by the travel industry and the Company in 2020 included:

World-wide travel restrictions;

Greater than 100% cancellation rates at times;

Unprecedented volumes of refund requests and the inability of many partners to provide those refunds;

Global change to a work-from-home environment in an extremely short time period, with attendant equipment, network and security issues and needs;

Unknown liquidity needs and uncertain financial market conditions and access to capital;

Employee morale and well-being issues resulting from isolation and personal challenges resulting from the pandemic, such as child-care issues;

Employee health issues, such as employees contracting the COVID-19 virus;

Undertaking large-scale restructurings amid all the other issues;

Dealing with resurgences of the virus and their effects on business activities; and

Higher level of employee attrition as technology companies that benefited from the pandemic, plus favorable capital markets in the second half of the year which benefited technology start-ups, led to increased efforts to attract away our best talent who were concerned about the future of the travel industry and ongoing restructuring efforts at the Company.

Management guided the Company through all of these issues and more, all while continuing to undertake product development, pursue strategic initiatives and prepare the Company for an uncertain recovery in one of the industries hit the hardest by the COVID-19 pandemic. Management’s tireless work and effective leadership during 2020 was taken into account by the Compensation Committee and the Board, as applicable, when making 2020 executive compensation decisions.

 

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2020 Base Salaries

Prior to the onset of the COVID-19 pandemic, the Compensation Committee made no changes to the base salaries of Messrs. Fogel, Goulden and Millones for 2020. However, in March 2020, when it was clear that the COVID-19 pandemic would severely disrupt the travel industry and our Company for the foreseeable future, our Board and our executive officers decided to take several cost-cutting measures, which included Mr. Fogel voluntarily declining his salary (subject to certain minimal amounts to cover benefit contributions and similar items) and the Board voluntarily declining their salary and cash retainers, in each case beginning in March 2020 for the remainder of 2020. Additionally, beginning on June 1, 2020, Messrs. Goulden and Millones voluntarily reduced their salaries by 20% for the remainder of 2020.

 

2020 Bonus Plan

In typical circumstances, the annual cash incentive bonus plan applicable to our executive officers provides for an aggregate “pool” based on our Compensation EBITDA and Compensation Revenue. The amount in the pool increases as our Compensation EBITDA and/or Compensation Revenue increase (until the cap on the pool is reached), and current executive officer individual cash bonuses are paid from this pool. However, although Company performance is a key factor in individual bonus payments for our executive officers, the Compensation Committee maintains discretion to adjust the aggregate pool and/or individual bonuses upwards or downwards as it deems appropriate.

The fundamental principle underlying our typical annual senior management bonus plan is that the bonus pool for senior executives, including our executive officers, would be meaningfully funded only if we had significant year-over-year earnings and/or revenue growth on a fixed currency basis, taking into account the size of our business, market expectations regarding our growth and our expectations regarding the growth of our markets. Further, our typical annual senior management bonus plan provides that the funding factor increases as Compensation EBITDA and Compensation Revenue, as applicable, increases. As a result, it would typically be unlikely that there would be meaningful funding for the bonus pool unless the Compensation EBITDA and Compensation Revenue performance demonstrate meaningful growth. Generally, in order for our senior executives to achieve their target annual bonus amounts, we must achieve a combination of Compensation EBITDA and Compensation Revenue growth that corresponds to a 1x bonus pool.

At the time of the outbreak, a 2020 senior management bonus plan had been established with Compensation EBITDA and Compensation Revenue targets.

However, soon after this plan was adopted, it quickly became apparent that the bonus plan funding would be significantly below target due to the impact of the pandemic on the Company’s results and operations. Therefore, the plan would no longer incentivize management performance or serve as a useful retention tool. As a result, the Compensation Committee determined to fund the senior management bonus pool at 70% of target (to provide funds for potential bonuses), without regard to the outcome of the bonus plan that was initially adopted and to determine whether to pay bonuses at all or in some degree in early 2021 after the Committee could evaluate management performance during 2020. The Compensation Committee believed that the 70% funding reflected the appropriate balance of the recognition of significant efforts and contributions during an unprecedented year and overall financial outcomes. It also enhanced retention at a time when the stock price had fallen precipitously, significantly reducing the ability of outstanding long-term incentives to retain top talent.

 

2020 Bonus Outcomes

Named Executive

Officer

Base Salary

Bonus Target as a % of Base Salary

Actual 2020 Bonus Awarded

Glenn D. Fogel

$750,000

250%

$0

David I. Goulden

$600,000

210%

$882,000

Peter J. Millones

$530,000

190%

$704,900

The Compensation Committee made no changes to the target bonus percentages of the named executive officers for 2020. The 2020 bonus plan pool was funded at 70% of target, and Mr. Fogel recommended that he not receive a bonus for 2020, but that Messrs. Goulden and Millones receive 2020 bonuses. The Compensation Committee accepted Mr. Fogel’s recommendation and awarded Mr. Goulden a 2020 bonus of $882,000 and Mr. Millones a 2020 bonus of $704,900, in each case, representing 70% of their target bonus for the year. These bonuses were awarded after the Compensation Committee reviewed the performance of Messrs. Goulden and Millones, including a review of their contributions to the execution of the business priorities to address the pandemic and other non-financial goals and priorities. Although the Committee recognized

 

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the substantial contributions and leadership of Mr. Fogel during this challenging time, they decided no bonus was appropriate for Mr. Fogel in recognition of the hardship faced by other stakeholders, including stockholders and employees, as a result of the COVID-19 pandemic. See 2020 Named Executive Officer Performance for additional information on the NEOs’ contributions during 2020.

 

Equity Incentives

Under normal circumstances our long-term incentive program for our executive officers primarily consists of a three-year PSU award for each executive officer. As we began 2020, our intention was to continue this approach, and to measure performance over the three-year period from January 1, 2020 to December 31, 2022 based on a 50/50 weighting of Compensation EBITDA and Compensation Revenue targets. When the COVID-19 outbreak began to affect the global travel industry, the severity and duration of the pandemic were not immediately known. We first decided to temporarily delay granting our planned PSUs until we had a better sense of what the impacts of the COVID-19 outbreak might be and to potentially give us time to revisit the proposed performance targets. However, it then quickly became clear that the impacts of the COVID-19 pandemic would be severe and would likely persist for a significant time, and therefore it was not possible to set meaningful, three-year financial performance targets.

As a result, the Compensation Committee, management and Mercer immediately began exploring various alternatives to the planned PSUs for our executive officers. This process continued throughout 2020. Some of the alternatives considered by the Compensation Committee included:

PSUs subject to total shareholder return (TSR) or relative total shareholder return (rTSR) metrics;

PSUs based on strategic goals;

MSUs (market stock units);

Restricted Stock Units;

A combination of the above.

The various alternatives had positive and negative aspects. For example, certain potential alternatives, such as the rTSR PSUs, stock options and MSUs, would have resulted in significant financial costs to the Company due to the accounting treatment of such awards. Further, the Compensation Committee considered various potential award design details in addition to generally evaluating different award types, including the use of qualitative goals, widening performance bands, shortening performance periods and adding relative performance metrics.

In addition, the Company undertook an extensive stockholder engagement effort among the Company’s larger stockholders during the fall of 2020 with the specific objective of understanding the views of our stockholders with respect to executive compensation under the circumstances of COVID-19 and its impact on the Company. The feedback obtained, discussed above in Executive Summary Stockholder Engagement, informed subsequent compensation decisions. Ultimately the Compensation Committee determined to proceed as described below.

 

Performance Share Units (PSUs)

The Compensation Committee engaged in robust and prolonged discussions to establish a 2020 long-term incentive program for all of the NEOs. During this process, the Compensation Committee determined to create a different structure for Messrs. Fogel and Millones than for Mr. Goulden.

Messrs. Fogel and Millones were not granted PSUs in 2020. Their 2020 long-term equity awards and the rationale for these decisions are described below under the section Restricted Stock Units (RSUs).

In 2020, the Compensation Committee granted Mr. Goulden Strategic PSUs based on the accomplishment of strategic goals unique to Mr. Goulden and stock price appreciation. Except for the Strategic PSUs granted to Mr. Goulden, the Company did not award PSUs to its executive officers in 2020 due to the inability to predict long-term financial results during the COVID-19 pandemic. Mr. Goulden received two Strategic PSU awards: one with a nominal value of $10 million in August 2020 (the “August PSU”) and one with a nominal value of $7 million in November 2020 (the “November PSU”). The Compensation Committee awarded the August PSU to Mr. Goulden primarily for retention purposes. At the time of the award of the Strategic PSUs, Mr. Goulden’s outstanding 2018 PSUs and 2019 PSUs (his first two PSU awards he was granted at the Company) were expected to result in the issuance of zero shares to Mr. Goulden. Further, Mr. Goulden (and Messrs. Fogel and Millones) had voluntarily refused to receive a bonus for 2019 as described in last year’s proxy statement notwithstanding the solid

 

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performance of the Company in 2019. As a result, the Compensation Committee felt that it was important to provide a strong retention incentive for Mr. Goulden given his importance to the organization, especially in the middle of the pandemic.

Mr. Goulden
was awarded the November PSU as his annual 2020 long-term equity award. The Compensation Committee felt that these Strategic
PSUs were appropriate for Mr. Goulden because (a) Mr. Goulden’s responsibilities within the organization had expanded
as he plays a critical role in crafting the Company’s strategy, both before and after the onset of the COVID-19
pandemic and has specific responsibility for key Company initiatives designed to prepare the Company for emergence from the
pandemic in a strong position; (b) he was overseeing the critical and complex global restructuring efforts resulting from the
COVID-19 pandemic in addition to the Company’s global finance transformation efforts to strengthen our internal
systems; (c) Mr. Goulden is a newer executive officer who has not been with the Company for long enough to have benefited
from any long-term incentive payout, which is typically the vast majority of executive pay; (d) without these special awards,
because of factors outside of his control, his projected compensation was well below what his outstanding performance should
have yielded; and (e) we compete for leading finance talent with industries and other technology companies that have not been
severely and negatively impacted by the COVID-19 pandemic and retention of Mr. Goulden, who has over 35 years of experience
in the technology industry across a number of additional functions including Operations, Marketing, Strategy, Product
Development and Corporate Development, is critically important during this time. The Compensation Committee therefore
designed the Strategic PSUs to tie pay to performance by incentivizing achievement of the identified key Company initiatives
and providing significant retention incentives and value for Mr. Goulden. Such a structure is consistent with the
Company’s long-term practices of emphasizing long-term performance awards as the bulk of our executives’
potential pay. The Compensation Committee believes that achievement of all of the performance goals relating to the Strategic
PSUs will result in significant financial and operational value to the Company and position the Company well for future
success.

Mr. Goulden’s 2020 Strategic PSU performance goals relate to improvements and specific milestones in the areas of Real Estate (e.g., reduce the number of non-headquarters locations
by at least 15%), Procurement (e.g., implement at least 10 company-wide purchase agreements that cover at least $5 million
of annual spend), Restructuring, Talent-sourcing and Payments that can be objectively measured. Each 2020 Strategic PSU performance goal is designed so it can be measured at the end of 2022 as achieved or not, with the exception of the Payments goal which can be achieved partially or fully.

The performance goal thresholds for Mr. Goulden’s 2020 Strategic PSU awards are as follows:

 

The 2020 Strategic PSUs granted to Mr. Goulden are forfeitable if certain minimum performance thresholds are not achieved and have a maximum payout of 2x the number of “target” shares. The number of “target” shares was determined by taking the stated U.S. Dollar amount of the award established by the Compensation Committee and dividing that amount by the closing price of our common stock on the trading day immediately preceding the date of grant.

 

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Restricted Stock Units (RSUs)

Although for a
number of years the primary equity component of our compensation program for senior executives has been PSUs, from time to time
we have granted other equity awards to senior executives. In some cases, different kinds of equity awards have been used together
with PSUs. For example, RSUs have been used in connection with the hiring of a new senior executive to provide retention incentives
during the first years of employment to balance the uncertainty associated with the typical three-year cliff vesting and performance
terms of the PSUs.

However, in 2020, after months of analysis and discussion of alternatives among the Compensation Committee, Mercer and management and following our fall 2020 stockholder engagement efforts, in December 2020 the Board and the Compensation Committee determined to award RSUs to Messrs. Fogel and Millones as the equity incentive component of their 2020 compensation. When making this decision, the Compensation Committee and the Board were guided by the compensation philosophy and other issues described above, including the impact of the COVID-19 pandemic on our stakeholders. Taking all of the circumstances into account, including wanting to provide meaningful compensation to Messrs. Fogel and Millones for their strong leadership during the pandemic, the Board determined that Messrs. Fogel and Millones would receive an amount of RSUs based on 50% of the grant date value of their 2019 PSU awards. As a result, Mr. Fogel was awarded $7 million of RSUs and Mr. Millones was awarded $2.25 million of RSUs. Subject to continued service to the Company, these awards will vest in three equal annual installments on the first, second and third anniversary of the December 2020 grant date.

 

Stock Options

We did not grant any stock options to our named executive officers in 2020.

 

Stockholder Dilution

Each year, in connection with the administration of our equity incentive plans and making equity award decisions for our named executive officers, the Compensation Committee reviews and considers the dilutive impact of such awards and all equity awards granted by the Company on our stockholders. This review has shown that stockholder dilution from our equity incentive programs, including our stock-based compensation expense as a percentage of year-end market capitalization, is consistently at or below the 25th percentile of the Compensation Peer Group.

 

2020 Named Executive Officer Performance

Mr. Fogel

For Mr. Fogel’s 2020 performance assessment, the Board and the Compensation Committee primarily considered his leadership during the pandemic. They also considered, among other things:

Leadership through the COVID-19 pandemic, including the development and execution of the three-phase plan for the Company: Stabilize, Optimize and Position (for future growth);

Our financial and operating performance, including industry-leading room nights, revenue and Adjusted EBITDA;

Our progress on increased collaboration, cooperation and integration among our brands, in particular as Mr. Fogel performed the dual roles of Chief Executive Officer of the Company and Chief Executive Officer of Booking.com;

His work with government leaders to ensure the Company is best positioned as the regulatory environment for digital commerce evolves;

His strategic leadership and vision, including the continued development of our long-term Connected Trip strategy and progress against other strategic goals and initiatives;

His strong working relationship with the management teams of our brands; and

His healthy, open and constructive relationship with employees and the Board.

The Board and the Compensation Committee also considered a number of other subjective and qualitative factors in their evaluations of Mr. Fogel, such as his integrity, ethics, commitment, people management skills and investor and Board communication skills.

 

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Other Named Executive Officers

In evaluating Mr. Goulden’s 2020 performance, the Compensation Committee and Mr. Fogel primarily considered Mr. Goulden’s exceptional leadership and performance as Chief Financial Officer during the pandemic, as well as his strategic insight and advice throughout the COVID-19 pandemic crisis; his leadership of the successful debt offering in the second quarter; his leadership of the restructuring actions across the company; his oversight, management and strengthening of our finance department; his efforts to improve our systems and processes; his effective management of our liquidity and oversight of our treasury activities; his communications with the financial community; and his leadership in developing our financial plans during the COVID-19 pandemic crisis and our annual financial plan.

In evaluating Mr. Millones’ 2020 performance, the Compensation Committee and Mr. Fogel primarily considered Mr. Millones’ exceptional leadership and performance as General Counsel during the pandemic, as well as his management of our legal department, which included his oversight of the company’s successful appeal before the United States Supreme Court and oversight of the complex and time-sensitive legal decisions involving customer refund and cancellation requests around the globe during the early months of the pandemic; his contributions to improving our systems and processes, including global legal coordination and collaboration among our different brands on key issues; his oversight of our compliance department and efforts with ever-increasing regulatory and other legal requirements; his oversight of the Booking Holdings Human Resources function and its strong support and contributions to our brands in key areas; his strategic insight and advice; his oversight of our corporate governance practices; and his efforts to organize and assist with the Board’s activities.

 

Other Components of Executive Compensation

Change in Control Benefits

Our equity grants do not provide for “single trigger” accelerated vesting solely upon the occurrence of a change in control. Rather, acceleration will occur with respect to those grants only upon certain terminations of employment that occur coincident with or following a change in control or upon certain terminations of employment that occur independently from a change in control. As a general matter, upon a termination of employment by us “without cause” or by the employee on account of his death or disability (and in some circumstances, for “good reason”) that occurs coincident with or following a change in control, the vesting of outstanding equity will be accelerated to occur on the date on which the employee is terminated coincident with or following such change in control (on a pro-rata basis based on the portion of the performance period that has expired, except that in the case of death, full vesting will occur). Other than in the case of a termination due to death, our award agreements do not provide for full acceleration of the entire award in the event of a termination coincident with or following a change in control.

 

No excess parachute payment tax gross-ups

Section 4999 of the U.S. Internal Revenue Code provides that certain individuals may be subject to additional taxes if they receive certain payments of compensation or benefits in connection with a change of control (“excess parachute payments”), and Section 280G of the Internal Revenue Code provides that we may forfeit a tax deduction on the amounts subject to this additional tax. We have not provided for tax gross-ups in respect of Section 4999 in any new or materially modified compensatory arrangements with our executive officers for many years and none of our executive officers are entitled to tax gross-ups in respect of Section 4999. Further, the Compensation Committee has formally adopted a policy not to approve any Section 4999 tax gross-ups or similar tax reimbursement arrangements related to excess parachute payments in any new or materially modified compensatory arrangements with our directors or executive officers.

With respect to each of Messrs. Fogel, Goulden and Millones, if any payment made pursuant to his employment agreement would be an excess parachute payment, we will reduce the amount of such payment to the extent necessary so that no portion of the payment, so reduced, would constitute an excess parachute payment if such reduction would result in an increase in the aggregate payments and benefits to be provided to him, determined on an after-tax basis. See Potential Payments Upon a Change in Control and/or Termination beginning on page 75 for additional details.

 

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Severance Benefits

Severance arrangements and change-in-control provisions in our equity awards are designed to:

encourage executives to remain focused on our business in the event of rumored or actual fundamental corporate change or changes in the organization or its employment needs and, if required, to provide assistance during any transition, and

manage compensation-related risks and align the interests of executives and stockholders by incentivizing executives to manage the business and evaluate potential change in control transactions from the perspective of a stockholder.

Each of our NEOs is entitled to receive severance benefits upon, among other things, a termination “without cause” or, “for good reason.” The arrangements with our NEOs provide severance payments in an amount that the Compensation Committee believes is appropriate, taking into account, among other things, the time it is expected to take a separated employee to find another job and marketplace practices as well as the duration of non-competition agreements between us and our executive officers. The payments and other benefits are provided because the Compensation Committee considers a termination “without cause” or for “good reason,” not to be employee-initiated, that under different circumstances would not have occurred and which are beyond the control of the separated individual. The severance and other benefits are intended to ease the consequences to an executive of an unexpected termination of employment. See Employment Contracts, Termination of Employment and Change in Control Arrangements beginning on page 70 for additional details.

 

Employee Benefits

Our health care and other insurance programs are generally the same for all eligible employees, including the named executive officers, depending on their geographic location. For all eligible U.S.-based employees and certain eligible employees based outside the United States, we maintain a 401(k) plan. The 401(k) plan in which our eligible named executive officers participate allows all eligible employees to contribute up to 75% of their eligible pay (generally base salary and bonus), up to limits imposed by the U.S. Internal Revenue Code, as pre-tax and/or Roth contributions. We make a cash matching contribution to this 401(k) plan for all participants, including those named executive officers who participate in the plan, of 50 cents on the dollar on the first 6% of eligible pay contributed to the plan. The 401(k) match made to each of the participating named executive officers is reflected in the All Other Compensation column of the Summary Compensation Table.

 

Perquisites

We do not maintain any material perquisites or personal benefits for any of the named executive officers, such as company planes, cars, security, financial services or country club memberships.

In connection with Mr. Fogel taking on the role of CEO of Booking.com in the Netherlands in 2019 in addition to his role as Chief Executive Officer of the Company, the Company agreed to provide certain benefits to Mr. Fogel to ensure that Mr. Fogel is not subject to adverse tax consequences and does not incur additional expenses as a result of serving as CEO of Booking.com. These benefits include tax equalization for any Dutch taxes owed as a result of performing his new role in the Netherlands, a housing allowance of €6,100 per month for accommodations in the Netherlands, supplemental international medical insurance, payments of legal fees incurred in connection with entering into a letter agreement that sets forth the terms of this arrangement and payment of costs for the preparation of his Dutch and U.S. tax returns. In 2020, Mr. Fogel received certain of these benefits only for the portion of the year prior to the outbreak of the COVID-19 pandemic, which prevented travel to the Netherlands for most of the year.

 

Certain 2021 Compensation Decisions

2018 and 2019 PSUs

The Company’s long-term incentive plans are the primary source of compensation for the Company’s executive officers. A key component of the structure of our long-term incentive plan is the layering of long-term equity awards so that our executive officers have the possibility of vesting each year in an award granted three years before based on meeting three-year performance goals. This structure provides a critical retention incentive for our executive officers. Before the

 

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outset of the pandemic in early March 2020, the Company’s long-term incentive plans, which are the primary source of compensation for the Company’s senior business leaders, including the NEOs, established in 2018 (consisting entirely of performance share units, the “2018 PSUs”) and in 2019 (consisting entirely of performance share units, the “2019 PSUs”) were projected to payout at 2x the number of “target” shares and 1x the number of “target” shares, respectively. Consistent with our historical practice, the 2018 PSUs and 2019 PSUs granted to the NEOs had a three-year performance period tied to Compensation EBITDA and were fully forfeitable if minimum performance targets were not met. Due to the impact of the pandemic on the travel industry and the Company’s business – specifically, the impact on Compensation EBITDA, the sole performance metric in the 2018 PSUs and 2019 PSUs – it became clear early in 2020 that the 2018 PSUs and 2019 PSUs would pay out at zero percent of their “target” values for the NEOs.

As part of the 2020 and 2021 compensation planning processes and as a result of the significant impact of the pandemic on the Company’s business and compensation programs, the Compensation Committee and management re-evaluated the Company’s executive officer compensation programs and considered numerous alternatives with respect to 2020 and 2021 executive officer compensation, as well as whether to make any adjustments to the 2018 PSUs and 2019 PSUs. As part of these efforts, management spoke with many of its largest stockholders to understand their views with respect to executive compensation under such unusual and difficult circumstances. Management gathered this input throughout the fall of 2020, shared this with the Compensation Committee and the Compensation Committee considered these perspectives when they evaluated the appropriate outcome for the 2018 PSUs and 2019 PSUs.

The Committee also considered the following:

The extraordinary leadership of the NEOs in managing the Company through the unprecedented and extremely challenging year of the pandemic;

The strong financial and operating performance of the Company prior to the pandemic and subsequent stock price recovery;

The Company’s performance during 2020 amid and in response to the pandemic;

The pay program disruptions resulting from the pandemic; and

The critical retention incentives inherent in the Company’s PSU awards.

On January 28, 2021 the Board of Directors, on the recommendation of the Compensation Committee:

Adjusted the terms of the NEOs’ 2018 PSU awards to set their payout at 1.33x the number of “target” shares underlying the grants, and

Adjusted the terms of the NEOs’ 2019 PSU awards to set their payout at 0.33x the number of “target” shares underlying the grants.

In making the determination to fix the payout of the 2018 PSUs, the Board considered that there had been two years and two months of strong performance during the three-year performance period applicable to the 2018 PSUs, which had resulted in a projected payout of 2x the “target” number of shares prior to the pandemic. The Board believed that setting the 2018 PSUs payout at 1.33x was fair and appropriate under the circumstances because it represented two-thirds of the pre-COVID-19 projected payout (2 years of performance at 2x and 1 year at 0x). Similarly, in fixing the payout of the 2019 PSUs, the Board considered that there had been one year and two months of solid performance during the three-year performance period applicable to the 2019 PSUs, which had resulted in a projected payout of 1x the “target” number of shares prior to the pandemic. The Board believed that setting the 2019 PSUs payout at 0.33x was fair and appropriate under the circumstances because it represented one-third of the pre-COVID-19 projected payout (1 year of performance at 1x and 2 years at 0x).

In addition to the other reasons discussed in this proxy statement and the need to realign the compensation programs in light of the impact of the COVID-19 pandemic that were beyond management’s control, in making the decision to adjust the 2018 and 2019 PSUs, the Board and the Compensation Committee considered:

The Company’s compensation philosophy of tying most of executive pay to performance and trying to design programs that compensate the NEOs based on management performance and not external factors;

The fact that the NEOs elected not to receive 2019 bonuses to provide additional funding for bonuses for other employees;

Executive retention risk and the expected length of the recovery of the Company’s business following the pandemic;

The impact of COVID-19 on the Company’s employees, including the resulting reductions in force and other restructuring activities carried out by the Company; and

The Company’s stock price performance and the desire to maintain alignment between management and stockholder interests.

 

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The vesting dates of the 2018 PSUs and the 2019 PSUs remained unchanged at March 2021 and March 2022, respectively, so that the NEOs must continue in service to the Company until those dates to receive shares under the awards, which helps address retention risk during the remaining vesting periods. Assuming the NEOs satisfy the foregoing service requirements (which they did with respect to the 2018 PSUs on March 4, 2021), the number of shares delivered (in the case of the 2018 PSUs) or to be delivered (in the case of the 2019 PSUs) to each of the NEOs under the 2018 PSUs and 2019 PSUs, respectively, are as follows: Mr. Fogel – 9,156 shares and 2,695 shares; Mr. Goulden – 2,943 shares and 866 shares; and Mr. Millones – 2,943 shares and 866 shares. While these actions did not completely address retention concerns because other industries and companies had not been hurt as hard by the pandemic as we were, the Board felt these decisions were an important step toward addressing retention and continuity risk. The Board also felt that fixing the vesting factors was an appropriate risk management decision to avoid any possibility that executives might be incentivized to take excessive business risks in an effort to create some value for these awards.

 

2021 Equity Awards

Unlike most companies, which typically grant executives service-based awards as well as performance-based awards (e.g. a mixture of RSUs and PSUs), the Company’s historical long-term incentive programs were based solely on PSUs (other than RSUs awarded in connection with promotions and new-hires), which were forfeitable if certain performance targets were not met, and so all of the long-term incentive awards were at risk for our executives. This issue, while understood previously, had not been considered a likely outcome and the Compensation Committee had focused more on its principle of tying pay to performance in structuring the program. With the outbreak of the COVID-19 pandemic, the extremely unlikely scenario that all of our NEOs’ long-term incentive awards would fail to pay out came to pass. In considering and making 2021 equity awards to our NEOs, which will be described in more detail in our 2022 proxy statement, the Compensation Committee modified the program to include a mix of RSUs and PSUs, in part to change this design feature of our historical long-term equity incentive program, as well as provide significant retention value as we continue to work through the extreme impact of the pandemic on our business. In addition, on a one-time basis, the Compensation Committee provided for certain additional shorter-term PSUs (1-year and 2-year PSUs) designed to increase the retention incentives for the NEOs during the period before the 3-year PSUs granted in 2021 vest in 2024 and to make it easier to set appropriate performance targets given the continued uncertainty resulting from the pandemic. The 2021 PSUs are structured with annual performance targets, and the 3-year PSUs with a relative Total Shareholder Return modifier, and the targets for years after 2021 will be set at the beginning of those years by the Compensation Committee. Collectively, the 2021 equity awards are meaningfully larger than our annual equity awards would have been without the issues resulting from the pandemic. Under all the circumstances, including the potential risk to stockholders if we were to lose the services of our NEOs during the remainder of the pandemic and the recovery, the Company’s industry being among the hardest hit and likely among the last to recover fully and the high demand our executives would be in should they decide to leave our service, the Board and the Compensation Committee, after receiving the advice of Mercer and taking into account the feedback of our stockholder engagement efforts, decided that these larger performance-based awards were appropriate and in the best interests of stockholders.

 

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How We Make Compensation Decisions

 

 

 

THE ROLE OF THE BOARD

 

THE ROLE OF MANAGEMENT

The Board meets at the beginning of each year with our Chief Executive Officer to agree upon his performance objectives (which generally are stated in terms of Company objectives) for the year. Generally and as deemed necessary or appropriate, our Chief Executive Officer and the Board review these objectives and the Company’s performance against them from time to time during the year.

 

At the beginning of the following year, our Chief Executive Officer presents to the Compensation Committee a summary of his and the Company’s performance over the past year. The Compensation Committee then meets in executive session without any members of management to review our Chief Executive Officer’s performance and develop recommendations for his compensation. The Compensation Committee chair also discusses our Chief Executive Officer’s performance with each member of the Board. The Board then meets in executive session (without our Chief Executive Officer) to discuss our Chief Executive Officer’s performance and the Compensation Committee’s compensation recommendations. The Board determines the review to be given to our Chief Executive Officer, the actual payout amount of his bonus for the prior fiscal year, and the target total compensation he will receive for the current year.

 

 

Our Chief Executive Officer, Chief Financial Officer and General Counsel provide significant input to help the Compensation Committee develop the structure of, and set performance metrics for, our annual performance-based bonus plan and annual equity grants. In particular, our Chief Executive Officer provides performance assessments and detailed compensation recommendations regarding our executive officers other than himself in executive session without other executive officers present. The Compensation Committee gives significant weight to our Chief Executive Officer’s judgment in these matters because he is in a unique position to assess the other executive officers’ performance and contributions to our business. The Compensation Committee is responsible for setting the Chief Executive Officer’s pay and assessing the performance of the Chief Executive Officer.

 

The Compensation Committee has delegated limited authority to the Chief Executive Officer, the Chief Financial Officer and the General Counsel to determine whether and to what extent certain equity awards held by non-executive officers may be settled, vested, canceled, forfeited, or surrendered pursuant to their terms. For instance, the Chief Executive Officer is authorized to determine whether an employee’s termination was, pursuant to the terms of the relevant agreement, “with cause” or “without cause.”

 

 

 

THE ROLE OF THE COMPENSATION CONSULTANT

The Compensation Committee engaged Mercer LLC, an outside global human resources consulting firm, to advise the Compensation Committee on our compensation program for the named executive officers. Mercer has been working with the Compensation Committee for approximately nineteen years in this capacity.

 

In addition to providing compensation program advice, Mercer has at times provided services to certain of our subsidiaries, including employee benefit plan consulting services and compensation benchmarking. An affiliate of Mercer provides insurance brokerage services to us, and another affiliate of Mercer has provided commercial consulting services to one of our subsidiaries. The aggregate fees paid by us and our subsidiaries to Mercer and its affiliates in 2020 are as follows:

for advice regarding executive compensation, approximately $544,000

for other services and compensation products, approximately $129,000

for insurance brokerage services and consulting services to Mercer’s affiliates, approximately $4,332,000

Mercer’s affiliate was engaged to provide insurance brokerage services by the NCG Committee after the NCG Committee evaluated the relationship of Mercer’s affiliate with us and the Compensation Committee’s engagement of Mercer. The decision to engage Mercer’s other affiliate for consulting services was made by management of the relevant subsidiary. After reviewing information provided by Mercer regarding its independence and considering the independence factors prescribed by SEC rules, the Compensation Committee determined that Mercer was independent and did not find that any conflicts of interest existed in connection with the services Mercer performed for the Compensation Committee in 2020.

At the Compensation Committee’s direction, management generally provides Compensation Committee materials to Mercer and discusses materials and recommendations with Mercer in advance of each Compensation Committee meeting. Mercer

 

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generally attends Compensation Committee meetings to discuss these matters and, at the end of most meetings, meets in executive session with the Compensation Committee without management present.

With the support of the Compensation Committee, management regularly asks Mercer to provide calculations and market data to inform the Compensation Committee’s decision-making process. The Compensation Committee periodically requests management to seek Mercer’s input, analysis or recommendation with respect to a specific compensation practice, program or arrangement being considered by the Compensation Committee. The chair of the Compensation Committee and/or management may also independently seek Mercer’s advice on compensation-related matters.

During 2020, among other things, Mercer assisted the Compensation Committee on the following matters:

Advised on the composition of the Compensation Peer Group;

Prepared analyses of executive officer compensation levels as compared to the Compensation Peer Group, and made compensation recommendations;

Evaluated the design and provided advice on the appropriateness of our 2020 Bonus Plan and long-term incentives

Reviewed our non-employee director compensation program;

Prepared tally sheets and IRC Section 280G analyses to determine “excess parachute payments;”

Conducted our gender and racial pay equity analyses and our living-wage analysis; and

Provided assistance in determining the “CEO Pay Ratio” that appears in this proxy statement.

 

Benchmarking and Target Compensation

In making compensation decisions, the Compensation Committee asked Mercer to compare each element of total compensation against a peer group of publicly-traded companies. The Compensation Committee reviews annually the appropriateness of the companies comprising the peer group. When determining the appropriate compensation peer group for 2020, the Compensation Committee looked closely at, among other things, companies included in the prior year’s peer group, as well as companies identified as peers by those companies. The primary characteristics used to evaluate which companies to include in the peer group were: industry, revenues and peers identified by our peers. In particular, the Compensation Committee sought to include internet merchandisers, online travel companies and other technology companies with revenues between one-half and two times our annual revenues. The Compensation Committee also included Alphabet, Amazon.com, Facebook and Microsoft because, although their revenues were more than two times our revenues, there were relatively few companies that otherwise met our criteria, we compete with them for executive talent and they, like us, are leading e-commerce or technology companies.

The Compensation Committee determined that the sixteen companies listed below, which are primarily internet services, technology, travel services and/or e-commerce companies and are the same companies used in 2019, would comprise the 2020 peer group (the “Compensation Peer Group”):

 

 

 

Activision Blizzard, Inc.

Expedia Group, Inc.