Nominating and Corporate Governance Committee
Primary Responsibilities
We have adopted a committee charter that details
the primary responsibilities of the Nominating and Corporate Governance Committee, including:
● helping the Board
oversee our corporate governance functions;
● advising the Board on
corporate governance matters;
● identifying and
evaluating candidates, including the nomination of incumbent directors for reelection and nominees recommended by stockholders, to serve on the Board;
● considering and
making recommendations to the Board regarding the composition and Chair position of the committees of the Board;
● reviewing and making
recommendations to the Board regarding our corporate governance guidelines and related policies and procedures;
● periodically
reviewing the performance of the Board, including Board committees; and
● periodically
reviewing the processes and procedures used by us to provide information to the Board and its committees.
Independence
All members of the Nominating and Corporate
Governance Committee are “independent” in accordance with NYSE listing standards.
* Mr. You will retire from the Board, including the Nominating and Corporate Governance Committee, at the Annual Meeting and Mr. Sun
is expected to be appointed as a member of the Nominating and Corporate Committee at that time.
|
|
Current Committee Members
Kevin Warsh (Chair)
Neil Mehta
Harry You*
|
15 | 2023 Coupang Proxy Statement |
Director
Nomination Process and Qualifications
We believe that an effective board should be made up of
individuals who collectively provide an appropriate balance of diverse occupational and personal backgrounds and perspectives and who have a range of skills and expertise sufficient to provide guidance and oversight with respect to our strategy and
operations. The Board and the Nominating and Corporate Governance Committee seek individuals with backgrounds and qualities that, when combined with those of our other directors, enhance the Board’s effectiveness and result in the Board having a
balance of knowledge, experience, and capability.
In assessing potential candidates, the Board and the
Nominating and Corporate Governance Committee will consider, among other factors, whether the candidate:
|
● |
possesses relevant expertise to offer advice and guidance to management; |
|
● |
has sufficient time to devote to the affairs of the Company; |
|
● |
demonstrates excellence in his or her field; |
|
● |
has the ability to exercise sound business judgment; and |
|
● |
is committed to represent the long-term interests of our stockholders. |
Moreover, the Board and the Nominating and Corporate
Governance Committee carefully consider the importance to us of diversity in board composition, (including diversity of gender, race, experience, ethnic background, and country of origin) and, in assessing potential candidates, will take into
account a candidate’s diversity and status as a member of an underrepresented community. The Board will assess its effectiveness in this regard as part of the annual board evaluation process.
In addition, our Corporate Governance Guidelines also
require that to be qualified to serve as a director, a candidate must possess the highest personal integrity and ethics, have the ability to read and understand basic financial statements, and be older than 21 years of age.
The Nominating and Corporate Governance Committee considers
the appropriate size of the Board and whether any vacancies on the Board are expected due to retirement or otherwise. In the event that vacancies are anticipated, or otherwise arise, or the Nominating and Corporate Governance Committee and the
Board determine to increase the size of the Board, the Nominating and Corporate Governance Committee considers potential director candidates using the criteria set forth above. Candidates may come to the attention of the Nominating and Corporate
Governance Committee through current Board members, members of management, professional search firms, stockholders, or other persons. The Nominating and Corporate Governance Committee is responsible for conducting appropriate inquiries into the
backgrounds and qualifications of potential director candidates and evaluating their suitability for service on the Board.
In the case of Ms. Toubassy, the Board, upon the
recommendation of the Nominating and Corporate Governance Committee, approved her as a director nominee in recognition of her extensive background in finance and accounting matters. Ms. Toubassy was identified as a potential director nominee by an
independent member of the Board.
The Nominating and Corporate Governance Committee will
evaluate director candidates recommended by stockholders in the same manner in which the Nominating and Corporate Governance Committee evaluates any other director candidate.
Any recommendation submitted to the General Counsel and
Chief Administrative Officer should be in writing and should include any supporting material the stockholder considers appropriate in support of that recommendation but must include information that would be required under the “advance notice”
provisions of our bylaws and rules of the SEC to be included in a proxy statement soliciting proxies for the election of such candidate. Stockholders wishing to propose a candidate for consideration may do so by submitting the above information to
the attention of the General Counsel and Chief Administrative Officer of the Company at c/o Coupang, Inc., 720 Olive Way, Suite 600, Seattle, Washington 98101, U.S.A. All recommendations for nomination received by the General Counsel and Chief
Administrative Officer that satisfy our “advance notice” bylaw requirements relating to such director nominations will be presented to the Board for its consideration. Stockholders must also satisfy the notification, timeliness, consent, and
information requirements set forth in our bylaws. These requirements are also described under the section entitled “Stockholder Proposals for the 2024 Annual Meeting of Stockholders”.
Corporate
Governance Documents
Complete copies of our Corporate Governance Guidelines and
Committee charters are available on the Investor Relations page of our website at ir.aboutcoupang.com.
16 | 2023 Coupang Proxy Statement |
Code of Business
Conduct and Ethics
Our Code of Business Conduct and Ethics is available on the
Investor Relations page of our website at ir.aboutcoupang.com. If we ever were to amend or waive any provision of our Code of Business Conduct and Ethics that applies to our executive officers or directors, we intend to satisfy our
disclosure obligations, if any, with respect to any such waiver or amendment by posting such information on our website set forth above rather than by filing a Current Report on Form 8-K.
Communications
with the Board
Stockholders and other interested parties may communicate
with a member or members of the Board, including the Chair of the Board, Chair of the Audit, Compensation, or Nominating and Corporate Governance Committees, or to the non-management or independent directors. We maintain a “Stockholders
Communications Policy” that outlines the applicable procedures and is available on the Investor Relations page of our website at ir.aboutcoupang.com.
Board’s Role in
Risk Oversight
The Board’s role in risk oversight at the Company is
consistent with our leadership structure, with the Chief Executive Officer and other members of senior management having responsibility for assessing and managing risks we face in executing our business plans, and the Board and its committees
providing oversight in connection with those efforts. These risks include financial, regulatory, technological, competitive, and operational risks and exposures.
In addition to the full Board, the Audit Committee plays an
important role in the oversight of our enterprise risk assessment and management activities, which identify key risks to our business, including risks related to information security, data privacy, and regulations, and assesses any steps taken to
monitor and control such risk. The Audit Committee periodically reviews key enterprise risks with senior management and the Head of Internal Audit.
The Compensation Committee is charged with ensuring that
our compensation policies and procedures do not encourage risk-taking in a manner that would have a material adverse impact on us.
The Nominating and Corporate Governance Committee is
charged with overseeing risk related to our governance processes. Each Committee reports its findings to the full Board for consideration.
Director
Compensation
In December 2021, the Board adopted a director compensation
policy for our non-employee directors (the “Non-Employee Director Compensation Policy”). Prior to the adoption of the Non-Employee Director Compensation Policy, we compensated our non-employee directors in accordance with then-current practices
established by the Board and, following our IPO, our Compensation Committee in consultation with the Board and compensation consultants.
Initial Equity Awards
In connection with joining the Board, a new non-employee
director may be granted an equity award in the form of restricted stock units (“RSUs”) covering a number of shares of our Class A common stock having a value of up to $1,000,000 (as determined by the Board) on the date of grant, based on the
closing price of our Class A common stock on the date of grant. Each initial award will vest on a schedule determined by the Board at the time of grant. If a non-employee director resigns from the Board prior to the vesting date, the unvested
portion of any initial award will be forfeited as of the date of resignation. In the event of a “change of control” (as defined in our 2021 Equity Incentive Plan), the unvested portion of any initial award will vest in full.
Annual Equity Awards
On the date of each annual meeting of stockholders, each
non-employee director who is serving on the Board, who has no outstanding and unvested stock grant, and will continue to serve on the Board as a non-employee director immediately following the date of such annual meeting, will automatically be
granted an equity award in the form of RSUs covering a number of shares of our Class A common stock having a value of $300,000, based on the closing price of our Class A common stock on the date of grant.
17 | 2023 Coupang Proxy Statement |
Additionally, each non-employee director will be eligible
to earn additional annual retainers for their additional services as follows, in each case in the form of RSUs covering a number of shares of our Class A common stock having the value set forth below (based on the closing price of our Class A
common stock on the date of grant):
|
● |
$25,000 for service as Lead Director; |
|
● |
$25,000 for service as chair, or $12,500 for service as a member (other than as chair), of our Audit Committee; |
|
● |
$20,000 for service as chair, or $10,000 for service as a member (other than as chair), of our Compensation Committee;
and |
|
● |
$15,000 for service as chair, or $7,500 for service as a member (other than as chair), of our Nominating and Corporate
Governance Committee. |
Each annual equity award granted, including awards granted
for additional services described above, will be scheduled to vest in full on the earlier of the first anniversary of the date of grant or the date of the next annual meeting of stockholders following the date of grant. If a non-employee director
terminates service in a Committee role prior to the vesting date, any applicable Committee retainer will vest on a pro-rata basis taking account of the non-employee director’s length of Committee service during the vesting period. If a non-employee
director resigns from the Board prior to the vesting date, all unvested annual equity awards, including awards granted for additional services described above, will be forfeited as of the date of resignation. In the event of a “change of control”
(as defined in our 2021 Equity Incentive Plan), all unvested annual equity awards, including awards granted for additional services described above, will vest in full.
The Non-Employee Director Compensation Policy further
provides that any non-employee director who held unvested RSUs as of the date the policy was adopted in December 2021 shall not be eligible to receive an annual equity award described above until the date of the first annual meeting of stockholders
that occurs after such outstanding RSUs have become fully vested in accordance with their terms. As of the date of our 2022 Annual Meeting of Stockholders, any RSUs previously granted to our non-employee directors that remained unvested as of the
date the Non-Employee Director Compensation Policy was adopted in December 2021 had become fully vested, other than those held by Mr. Harry You. Therefore, Mr. You did not receive an annual equity award in 2022 for his service on the Board.
Limitation on Non-Employee Director Compensation
The Non-Employee Director Compensation Policy includes a
maximum annual limit of $750,000 of cash compensation and equity awards that may be paid, issued, or granted to a non-employee director in any calendar year other than in the non-employee director’s first calendar year of service, in which case the
maximum is $1,000,000. This maximum limit does not reflect the intended size of any potential compensation or equity awards to our non-employee directors but is designed to set the upper limit on non-employee director compensation for avoidance of
any doubt.
Expense Reimbursement
Under the Non-Employee Director Compensation Policy, each
non-employee director is entitled to reimbursement from us for reasonable travel, lodging, and meal expenses incident to meetings of the Board or committees thereof or in connection with other Board-related business, in accordance with and subject
to our expense reimbursement policy as presented to the Audit Committee of the Board.
18 | 2023 Coupang Proxy Statement |
Director Compensation Table
The following table provides information regarding
compensation of our non-employee directors for their service as a director for 2022. Employee directors received no additional compensation for their service as a director.
Name |
|
Stock
Awards(1) |
|
Total |
Jason Child(2) |
|
$366,428 |
|
$366,428 |
Pedro Franceschi(3) |
|
$389,829 |
|
$389,829 |
Neil Mehta |
|
$352,494 |
|
$352,494 |
Benjamin Sun |
|
$312,497 |
|
$312,497 |
Ambereen Toubassy(4) |
|
– |
|
– |
Kevin Warsh |
|
$324,996 |
|
$324,996 |
Harry You(5)(6) |
|
– |
|
– |
|
1. |
Amounts in this column represent the aggregate grant date fair value of RSUs granted during 2022, calculated in accordance with FASB ASC Topic 718. For additional information regarding the assumptions underlying
this calculation, please read Note 4 in the Notes to Consolidated Financial Statements of our 2022 Annual Report. As of December 31, 2022, each non-executive director held the following unvested RSUs: Mr. Child: 27,150; Mr. Franceschi:
26,933; Mr. Mehta: 30,625; Mr. Sun: 27,150; Ms. Toubassy: 0; Mr. Warsh: 28,236; and Mr. You: 166,048. |
|
2. |
Mr. Child was appointed to the Board on April 14, 2022 and received an initial equity award upon such appointment with a grant date fair value of $53,932, in addition to his annual equity award for 2022 with a
grant date fair value of $312,497. |
|
3. |
Mr. Franceschi was appointed to the Board on March 15, 2022 and received an initial equity award upon such appointment with a grant date fair value of $79,830, in addition to his annual equity award for 2022 with
a grant date fair value of $309,999. |
|
4. |
Ms. Toubassy was appointed to the Board on March 8, 2023 and therefore did not receive any compensation for service on the Board in 2022. |
5. |
As of the date of our 2022 Annual Meeting of Stockholders, Mr. You had 166,048 RSUs that remained unvested. Therefore, in accordance with the terms of our Non-Employee Director Compensation Policy, Mr. You did not
receive an annual equity award in 2022. |
6. |
Mr. You will retire from the Board, effective at the Annual Meeting.
|
19 | 2023 Coupang Proxy Statement |
PROPOSAL
2:
RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Appointment of
Independent Registered Public Accounting Firm
The Audit Committee is solely responsible for the
appointment, evaluation, compensation, retention, and, if appropriate, replacement of the independent registered public accounting firm retained to audit our financial statements. The Audit Committee has selected Samil PricewaterhouseCoopers to
serve as our independent registered public accounting firm for our fiscal year ending December 31, 2023. Samil PricewaterhouseCoopers has served as our auditor since 2014.
Stockholder approval is not required to appoint Samil
PricewaterhouseCoopers as the independent registered public accounting firm for our fiscal year ending December 31, 2023. The Board believes, however, that submitting the appointment of Samil PricewaterhouseCoopers to the stockholders for
ratification is a matter of good corporate governance. Even if the appointment is ratified, our Audit Committee, in its discretion, may direct the appointment of a different independent registered public accounting firm at any time during the year
if it determines such a change would be in the best interests of the Company or our stockholders. The ratification of the appointment of Samil PricewaterhouseCoopers as our independent registered public accounting firm requires the affirmative vote
of a majority of the shares cast in person or by proxy and entitled to vote at the Annual Meeting.
One or more representatives of Samil PricewaterhouseCoopers
are expected to be present at the Annual Meeting and will have an opportunity to make a statement if they wish and be available to respond to appropriate questions.
Principal
Accountant Fees and Services
The following tables set forth Samil
PricewaterhouseCoopers’ aggregate fees for 2022 and 2021:
|
December 31, 2022 |
December 31, 2021 |
Audit Fees(1) |
$6,881,000 |
$4,131,000 |
Audit-Related Fees(2) |
– |
115,000 |
Tax Fees |
– |
– |
All Other Fees(3) |
5,000 |
5,000 |
Total Fees |
$6,886,000 |
$4,251,000 |
|
1. |
Audit fees include the audit of our annual financial statements, the review of our annual report on Form 10-K for the applicable fiscal year, and
the review of our quarterly reports on Form 10-Q for the applicable fiscal quarters, statutory audits required internationally, and consents for and review of registration statements filed with the SEC or other documents issued in connection
with securities offerings. Our 2022 audit fees include fees for attestation services related to Section 404 of the Sarbanes-Oxley Act of 2002. Our 2021 audit fees for 2021 include fees for services incurred in connection with our IPO
completed in 2021. |
|
2. |
Audit-related fees consist primarily of work related to our preparation for compliance with our obligations under the Sarbanes-Oxley Act of 2002. |
|
3. |
All other fees consist primarily of subscription fees to access accounting, tax, and financial reporting content. |
20 | 2023 Coupang Proxy Statement |
Pre-Approval
Policies and Procedures
Our Audit Committee charter requires our Audit Committee to
pre-approve all audit and permitted non-audit and tax services that may be provided by our independent registered public accounting firm or other registered public accounting firms. The Audit Committee charter also provides that the Audit Committee
may establish policies and procedures for its pre-approval of permitted services in compliance with applicable law or stock exchange listing rules. Our Audit Committee has established procedures relating to the approval of all audit and non-audit
services that are to be performed by our independent registered public accounting firm and pre-approves all audit and permitted non-audit services provided by our independent registered public accounting firm prior to each engagement. Since our
IPO, our Audit Committee pre-approved all services provided by Samil PricewaterhouseCoopers.
Audit Committee
Report
The Audit Committee consists solely of independent
directors, as required by and in compliance with SEC rules and regulations and the NYSE listing standards. The Audit Committee operates pursuant to a written charter adopted by the Board.
The Audit Committee is responsible for assisting the Board
in its oversight responsibilities related to accounting policies, internal controls, financial reporting, and legal and regulatory compliance. Our management has the primary responsibility for our financial reporting processes, proper application
of accounting principles, and internal controls as well as the preparation of its financial statements. Our independent registered public accounting firm is responsible for performing an audit of our financial statements and expressing an opinion
as to the conformity of such financial statements with accounting principles generally accepted in the United States and the effectiveness of our internal control over financial reporting.
In performing its functions, the Audit Committee has:
|
● |
Reviewed and discussed the audited financial statements, management’s assessment of the effectiveness of our internal
control over financial reporting, and the independent auditors’ evaluation of our system of internal control over financial reporting, included in our 2022 Annual Report with management and Samil PricewaterhouseCoopers; |
|
● |
Discussed with Samil PricewaterhouseCoopers the matters required to be discussed by the applicable requirements of the
Public Company Accounting Oversight Board (“PCAOB”) and the SEC; and |
|
● |
Received from Samil PricewaterhouseCoopers the written disclosures and representations required by PCAOB standards
regarding Samil PricewaterhouseCoopers independence, and discussed with them matters relating to independence. |
Based on the review and discussions described above, the
Audit Committee recommended to the Board that our audited financial statements be included in our 2022 Annual Report for filing with the SEC.
The Audit Committee
Harry You (Chair), Jason Child, Benjamin Sun,
Ambereen Toubassy
The foregoing Report of the Audit Committee of
the Board of Directors shall not be deemed to be soliciting material or be incorporated by reference by any general statement incorporating by reference this Proxy Statement into any filing under the Securities Act of 1933, as amended (the
“Securities Act”), or under the Exchange Act, except to the extent we specifically incorporate this information by reference, and shall not otherwise be deemed to be filed with the SEC under the Securities Act or the Exchange Act.
|
21 | 2023 Coupang Proxy Statement |
Executive
Officers
Below is a list of our current executive officers and their
respective ages and a brief account of the business experience of each of them.
Name |
Age |
Position |
Executive Officers |
|
|
Bom Kim(1) |
44 |
Chief Executive Officer and Chair of the Board |
Gaurav Anand |
47 |
Chief Financial Officer |
Hanseung Kang |
54 |
Representative Director, Business Management |
Harold Rogers |
46 |
General Counsel and Chief Administrative Officer |
TJ Kim |
43 |
Vice President of Digital Customer
Experience |
1. Please
see “Nominees for Election to the Board of Directors” for information regarding Mr. Kim. |
Executive Officers
Gaurav Anand. Gaurav Anand has served as our Chief
Financial Officer since December 2020 and previously served as our Chief Operating Officer from January 2019 to December 2020. Mr. Anand previously served as the Chief of Staff to our Chief Executive Officer from January 2017 to December 2018 and
our Chief Financial Officer of Global eCommerce from January 2017 to December 2017. Prior to joining Coupang, Mr. Anand served as Vice President of Finance at Myntra, a fashion subsidiary of Flipkart, from November 2014 to December 2016. Mr. Anand
also previously worked at Amazon from 2007 to 2014, holding various Finance positions across its North America retail, International retail, AWS business, and payments business.
Hanseung Kang. Hanseung Kang has served as our
Representative Director of Business Management since November 2020. Prior to joining Coupang, Mr. Kang worked as an attorney at Kim & Chang from February 2013 to November 2020, where his practice focused on crisis management, communication
strategy, and government affairs. From August 2011 to February 2013, Mr. Kang served as the Secretary to the President of the Republic of Korea for Legal Affairs. During the prior eighteen years, he served in the Korean judiciary, first as a judge
at district courts and later as a presiding judge in the appellate court. Mr. Kang has also served as a Special Counselor to the Legislation and Judiciary Committee of the National Assembly of the Republic of Korea, and as the Counselor for the
Judicial Affairs at the Embassy of the Republic of Korea in the U.S. Mr. Kang received his LL.B. from Korea University and attended the Judicial Research and Training Institute of the Supreme Court of Korea.
Harold Rogers.
Harold Rogers has served as our General Counsel since December 2021 and as our Chief Administrative Officer since January 2020. Prior to joining Coupang, Mr. Rogers served as Executive Vice President, Chief Ethics and Compliance Officer at
Millicom, a global telecommunications company, from August 2016 to December 2019. He also was previously a Partner at Sidley Austin LLP from January 2013 to July 2016 and an associate attorney from September 2006 to December 2012. He clerked for
the Honorable Thomas B. Griffith on the United States Court of Appeals for the District of Columbia Circuit from 2005 to 2006. Mr. Rogers holds a B.A. in English from Brigham Young University and earned his J.D. from Harvard Law School.
TJ Kim.
has served as our Vice President of Digital Customer Experience since April 2023. Previously, Mr. Kim served as our Vice President of Product Management and UX, leading the Product, Analytics, and UX teams for Coupang’s product commerce business
from April 2022 to April 2023. He served as our Senior Director of Product Management from April 2018 to April 2022 and our Director of Product Management from September 2014 to April 2018. Prior to joining Coupang, Mr. Kim worked at Marketo (now
part of Adobe), Symantec, and Oracle, holding various product, strategy, and finance roles. Mr. Kim holds a Bachelor’s degree in Computer Science from Carnegie Mellon University and earned his MBA from Northwestern University’s Kellogg School of
Management.
22 | 2023 Coupang Proxy Statement |
CERTAIN
RELATIONSHIPS AND RELATED PERSON TRANSACTIONS
Policies and
Procedures for Related Person Transactions
The Board has adopted a written related person transaction
policy setting forth the policies and procedures for the identification, review, and approval or ratification of related person transactions. This policy covers, with certain exceptions set forth in Item 404 of Regulation S-K under the Securities
Act of 1933, as amended, any transaction, arrangement, or relationship, or any series of similar transactions, arrangements, or relationships, in which we and a related person were or will be participants and the amount involved exceeds, or is
expected to exceed, $120,000, and a related person has a direct or indirect interest deemed to be material by the Audit Committee. In reviewing and approving any such transactions, our Audit Committee will consider all relevant facts and
circumstances as appropriate, including, but not limited to (a) the risks, costs, and benefits to Coupang, (b) the impact on a director’s independence in the event the related person is a director, immediate family member of a director, or an
entity with which a director is affiliated, (c) the terms of the transaction, (d) the availability of other sources for comparable services or products, and (e) the terms available to or from, as the case may be, unrelated third parties or to or
from employees generally.
Certain Related
Person Transactions
Employment Arrangements
The brother of Bom Kim, our Chief Executive Officer and
Chair of the Board, is currently employed by the Company. He does not share a household with Mr. Kim and is not one of our executive officers. In 2022, he earned approximately $333,979 in salary, bonus, and expat related benefits. He was also
granted RSU awards with respect to 204,278 shares, which will vest over multiple years and become fully vested after 4 years, dependent on continued employment throughout that period. He participates in compensation and incentive plans or
arrangements on the same basis as similarly situated employees.
The sister-in-law of Bom Kim, our Chief Executive Officer
and Chair of the Board, is currently employed by the Company. She does not share a household with Mr. Kim and is not one of our executive officers. In 2022, she earned approximately $255,040 in salary, bonus, and expat related benefits. She was
also granted RSU awards with respect to 39,520 shares, which will vest over multiple years and become fully vested after 4 years, dependent on continued employment throughout that period. She participates in compensation and incentive plans or
arrangements on the same basis as similarly situated employees.
Registration Rights Agreement
We have entered into the Sixth Amended and Restated
Registration Rights Agreement (the “Registration Rights Agreement”) containing registration rights and information rights, among other things, with certain holders of common stock. The parties to this agreement include the following holders of more
than 5% of our capital stock: SVF Investments (UK) Ltd. and Bom Kim, our Chief Executive Officer and Chair of the Board.
23 | 2023 Coupang Proxy Statement |
SECURITY
OWNERSHIP
OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information with respect to
the beneficial ownership of our capital stock as of March 31, 2023 for:
|
● |
each of our named executive officers; |
|
● |
all of our executive officers and directors as a group; |
|
● |
each person or group of affiliated persons known by us to beneficially own more than 5% of our Class A common stock or
Class B common stock. |
We have determined beneficial ownership in accordance with
the rules and regulations of the SEC, and the information is not necessarily indicative of beneficial ownership for any other purpose. Except as indicated by the footnotes below, we believe, based on information furnished to us, that the persons
and entities named in the table below have sole voting and sole dispositive power with respect to all shares that they beneficially own, subject to applicable community property laws.
The amounts and percentages of shares beneficially owned
are reported on the basis of SEC regulations governing the determination of beneficial ownership of securities. Applicable percentage ownership is based on 1,602,488,487 shares of Class A common stock and 174,802,990 shares of Class B common stock,
in each case, outstanding as of March 31, 2023. In computing the number of shares beneficially owned by a person and the percentage ownership of such person, we deemed to be outstanding all shares subject to options held by the person that are
currently exercisable, or exercisable within 60 days of March 31, 2023, or issuable pursuant to restricted stock units that vest within 60 days of March 31, 2023. However, we did not deem such shares outstanding for the purpose of computing the
percentage ownership of any other person. In addition, under SEC rules, more than one person may be deemed to be a beneficial owner of the same securities and a person may be deemed to be a beneficial owner of securities as to which such person has
no economic interest.
Unless otherwise indicated, the address for each beneficial
owner listed in the tables below is c/o Coupang, Inc., 720 Olive Way, Suite 600, Seattle, Washington 98101, U.S.A.
24 | 2023 Coupang Proxy Statement |
Voting Shares
Beneficially Owned |
|
Class A
Common Stock |
Class B
Common Stock |
%
Total
Voting
Power(1) |
Name of Beneficial Owner |
Shares |
% |
Shares |
% |
Named Executive Officers and Directors |
|
|
|
|
|
Bom Kim(2) |
– |
– |
179,575,356 |
100% |
76.5% |
Gaurav Anand(3) |
2,607,500 |
* |
– |
– |
* |
Hanseung Kang(4) |
424,870 |
* |
– |
– |
* |
Harold Rogers(5) |
812,008 |
* |
– |
– |
* |
Thuan Pham(6) |
646,269 |
* |
– |
– |
* |
Jason Child |
3,195 |
* |
– |
– |
* |
Pedro Franceschi(7) |
33,738 |
* |
– |
– |
* |
Neil Mehta(8) |
70,651,928 |
4.4% |
– |
– |
1.0% |
Ambereen Toubassy(9) |
– |
* |
– |
– |
* |
Benjamin Sun(10) |
9,476,618 |
* |
– |
– |
* |
Kevin Warsh |
396,739 |
* |
– |
– |
* |
Harry You(11) |
111,595 |
* |
– |
– |
* |
All directors and executive officers as a group
(13 persons)(12) |
85,321,247 |
5.3% |
179,575,356 |
100% |
77.7% |
Other > 5% Security Holders |
|
Entities associated with SVF Investments (UK) Limited(13) |
426,156,413 |
26.6% |
– |
– |
6.3% |
Entities associated with Morgan Stanley(14) |
123,626,153 |
7.7% |
– |
– |
1.8% |
Baillie Gifford & Co(15) |
115,176,100 |
7.2% |
– |
– |
1.7% |
* Represents less than one percent (1%).
|
1. |
Percentage of total voting power represents voting power with respect to all shares of our Class A common stock and Class B common stock, as a single class. The holders
of our Class B common stock are entitled to 29 votes per share, and holders of our Class A common stock are entitled to one vote per share. |
|
2. |
Consists of (a) 174,802,990 shares of our Class B common stock held by Mr. Kim and (b) 4,772,366 shares of our Class B common stock subject to an option that is
exercisable or will become exercisable within 60 days of March 31, 2023. |
|
3. |
Consists of (a) 1,587,500 shares of our Class A common stock held by Mr. Anand, (b) 150,000 shares of our Class A common stock held of record by the Gaurav Anand 2021
Trust, for which Mr. Anand’s spouse serves as the trustee, and (c) 870,000 shares of our Class A common stock subject to an option that is exercisable or will become exercisable March 31, 2023. Includes 679,000 shares of our Class A common
stock pledged as collateral to secure certain personal indebtedness. |
|
4. |
Consists of (a) 387,338 shares of our Class A common stock held by Mr. Kang and (b) 37,532 RSUs that will vest within 60 days of March 31, 2023. |
|
5. |
Consists of (a) 142,508 shares of our Class A common stock held by Mr. Rogers and (b) 669,500 shares of our Class A common stock subject to an option that is exercisable
or will become exercisable within 60 days of March 31, 2023. |
|
6. |
Consists of 646,269 shares of Class A common stock held by Mr. Pham, our former Chief Technology Officer. Mr. Pham retired from the Company, effective as of September 15,
2022, and all RSUs previously granted to Mr. Pham that had remained unvested as of such date were forfeited. |
|
7. |
Consists of (a) 5,167 shares of our Class A common stock held by Mr. Franceschi and (b) 28,571 shares of our Class A common stock held of record by TDB Capital LLC, for
which the Mr. Franceschi is a managing member and shares voting and investment control with respect to such shares. Mr. Franceschi disclaims beneficial ownership of the securities held by TDB Capital LLC, except to the extent of his pecuniary
interest therein. |
|
8. |
Consists of 70,651,928 shares of our Class A common stock held by certain funds and accounts (collectively, the “Greenoaks Funds”) to which Greenoaks Capital
Partners LLC serves as the investment adviser and related persons or entities, including Mr. Mehta, certain estate planning vehicles, and by Greenoaks Capital Management LLC. Includes 21,694,386 shares of Class A common stock pledged as
collateral to secure certain personal indebtedness. Mr. Mehta serves as a Managing Director of Greenoaks Capital Partners LLC and may be deemed to share voting power and dispositive power over the shares held by the Greenoaks Funds. Mr. Mehta
disclaims beneficial ownership in the securities held by Greenoaks Funds to the extent of its or his pecuniary interest, if any, therein. The address of each of the Greenoaks Funds is 535 Pacific Avenue, 4th Floor, San Francisco, California
94133. |
|
9. |
Ms. Toubassy was appointed to the Board on March 8, 2023. |
10. |
Consists of (a) 3,941,562 shares of our Class A common stock held by LaunchTime LLC; (b) 2,869,421 shares of our Class A common stock held by Sun Brothers LLC; (c)
2,239,473 shares of our Class A common stock held by Sun Brothers II LLC; and (d) 426,162 shares of our Class A common stock held by Mr. Sun. Mr. Sun is a Partner at Primary Venture Partners, which is the general partner of LaunchTime
LLC and each of Sun Brothers LLC and Sun Brothers II LLC. The address for LaunchTime and the Sun Brothers entities is c/o Primary Venture Partners, 19 West 24th Street, New York, New York 10010. |
11. |
Mr. You will retire from the Board, effective at the Annual Meeting.
|
12. |
Consists of (a) 83,735,965 shares of our Class A common stock held by all directors and executive officers as a group, (b) 45,782 restricted stock units that will
vest within 60 days of March 31, 2023, and (c) 1,539,500 shares of our Class A common stock subject to options that are exercisable or will become exercisable within 60 days of March 31, 2023. Also consists of (a) 174,802,990 shares of Class
B common stock held by Mr. Kim and (b) 4,772,366 shares of Class B common stock subject to an option that is exercisable or will become exercisable within 60 days of March 31, 2023. |
13. |
Based solely on the Schedule 13G/A filed by SB Investment Advisers (UK) Limited (“SBIA UK”) on February 14, 2023. According to the Schedule 13G/A, consists of 426,156,413
shares of our Class A common stock held by SVF Investments (UK) Limited (“SVF Investments”). SBIA UK has been appointed as alternative investment fund manager of SVF Investments. SBIA UK is authorized and regulated by the UK Financial Conduct
Authority and is exclusively responsible for making all decisions related to the acquisition, structuring, financing and disposal of SVF Investments’ investments. As a result of these relationships, each of SVF Investments and SBIA UK may be
deemed to share beneficial ownership of the securities disclosed herein. The address for SVF Investments and SBIA UK is 69 Grosvenor Street, London, W1K 3JP, United Kingdom. |
25 | 2023 Coupang Proxy Statement |
|
14. |
Based solely on the Schedule 13G filed by Morgan Stanley on February 9, 2023. According to the Schedule 13G, Morgan Stanley has sole voting power over no shares, shared
voting power over 116,324,127 shares of our Class A common stock, sole dispositive power over no shares, and shared dispositive power over 123,626,153 shares of our Class A common stock and Morgan Stanley Investment Management Inc., a
wholly-owned subsidiary of Morgan Stanley, has sole voting power over no shares, shared voting power over 75,448,680 shares of our Class A common stock, sole dispositive power over no shares, and shared dispositive power over 82,744,349
shares of our Class A common stock. The shares reported on such Schedule 13G include shares held by certain operating units of Morgan Stanley and its subsidiaries and affiliates. The address for Morgan Stanley is 1585 Broadway, New York, NY
10036 and the address for Morgan Stanley Investment Management Inc. is 522 5th Avenue, 6th Floor, New York, NY 10036. |
|
15. |
Based solely on the Schedule 13G filed by Baillie Gifford & Co on January 20, 2023. According to the Schedule 13G, Baillie Gifford & Co has sole voting power over
76,978,375 shares of our Class A common stock, shared voting power over no shares, sole dispositive power over 115,176,100 shares of our Class A common stock, and shared dispositive power over no shares. Shares reported as being beneficially
owned by Baillie Gifford & Co are held by Baillie Gifford & Co. and/or one or more of its investment adviser subsidiaries, which may include Baillie Gifford Overseas Limited, on behalf of investment advisory clients, which may include
investment companies registered under the Investment Company Act, employee benefit plans, pension funds or other institutional clients. The address for Baillie Gifford & Co is Calton Square, 1 Greenside Row, Edinburgh, EH1 3AN, Scotland,
United Kingdom. |
Pledge of Common Stock By Affiliates
In March 2021, the Board adopted a policy prohibiting
employees, officers, and directors from directly or indirectly, holding the Company’s securities in a margin account or otherwise pledging the Company’s securities as collateral for a loan without prior approval from the Nominating and Corporate
Governance Committee. Pursuant to such policy, approval may be granted where an officer or director wishes to pledge the Company’s securities as collateral for a loan and clearly demonstrates the financial capacity to repay the loan without resort
to the pledged securities. As reflected under “Security Ownership of Certain Beneficial Owners and Management,” certain shares held by Gaurav Anand, our Chief Financial Officer, and Neil Mehta, a member of the Board, were pledged as collateral to
secure certain personal indebtedness.
Delinquent Section 16(a) Reports
Section 16(a) of the Exchange Act requires our directors,
executive officers, and persons who beneficially own more than 10% of our common stock to report their ownership of the Company’s equity securities and any subsequent changes in that ownership to the SEC. Based on a review of those reports and
written representations given to us by our directors and executive officers, we believe that during our fiscal year ended December 31, 2022, all transactions were reported on a timely basis except for a Form 4 by Jonathan Lee reporting a grant of
an RSU award which was due on October 7, 2022, and filed on October 31, 2022.
26 | 2023 Coupang Proxy Statement |
EQUITY
COMPENSATION PLAN INFORMATION
The following table presents information as of December 31,
2022 with respect to compensation plans under which shares of our Class A common stock and Class B common stock may be issued.
Plan
Category |
Number of
securities to be
issued upon exercise of
outstanding options,
warrants, and rights (#) |
Weighted-average
exercise price of
outstanding options, warrants, and
rights ($)(1) |
Number of
securities remaining
available for future issuance
under equity compensation
plans (excluding securities in
column (a)) (#)(2) |
(a) |
(b) |
(c) |
Equity Compensation Plans Approved By Security Holders |
|
|
|
2021 Equity Incentive Plan |
31,317,430(4) |
– |
197,516,791 |
Equity Compensation Plans Not Approved By Security Holders |
|
|
|
Coupang, LLC
Amended and Restated 2011 Equity Incentive Plan(3) |
25,845,310(5) |
$6.50 |
– |
|
1. |
Reflects the weighted average exercise price of stock options only. As RSU awards have no exercise price, they are excluded from the weighted
average exercise price calculation set forth in column (b). |
|
2. |
The aggregate number of shares of our Class A common stock available for future issuance under the 2021 Equity Incentive Plan (the “2021 Plan”) will
automatically increase on January 1st of each year for a period of ten years commencing on January 1, 2022 and ending with a final increase on January 1, 2031, in an amount equal to five percent of the total number of shares of our capital
stock outstanding on December 31st of the preceding year; provided, however that the Board may act prior to January 1st of a given year to provide that the increase for such year will be a lesser number of shares of our Class A common stock. |
|
3. |
For additional information relating to the Coupang, LLC Amended and Restated 2011 Equity Incentive Plan (the “2011 Plan”), please refer to Note 4 to our
consolidated financial statements for 2022 located in our 2022 Annual Report. |
|
4. |
Consists of outstanding RSU awards covering an aggregate of 31,317,430 shares of our Class A Common Stock. |
|
5. |
Consists of outstanding (i) stock options exercisable for an aggregate of 15,376,622 shares of our Class A Common Stock, (ii) stock options exercisable for
an aggregate of 6,607,891 shares of our Class B Common Stock, and (iii) RSU awards covering an aggregate of 3,860,797 shares of our Class A Common Stock. |
27 | 2023 Coupang Proxy Statement |
NAMED
EXECUTIVE OFFICER COMPENSATION
Compensation
Discussion and Analysis
This Compensation Discussion and Analysis (this “CD&A”)
describes the material components of our 2022 executive compensation program and provides an overview of our overall compensation philosophy and objectives for our named executive officers (collectively, “NEOs” and, each, an “NEO”).
Our pay-for-performance driven compensation philosophy and
practices are designed to be directly tied to increased stockholder value. As a result, our NEO compensation program is heavily weighted toward providing multi-year equity awards, which are intended to foster a founder’s mentality and
entrepreneurial spirit to incentivize long-term stock price appreciation.
Our NEOs for 2022 were:
Name |
Title |
Bom Kim |
Chief Executive Officer and Chairman of the
Board |
Gaurav Anand |
Chief Financial Officer |
Hanseung Kang |
Representative Director, Business Management |
Harold Rogers |
General Counsel and Chief Administrative
Officer |
Thuan Pham(1) |
Former Chief
Technology Officer |
|
1. Mr. Pham retired from
the Company, including from his position as our executive officer, on September 15, 2022. |
Objectives, Philosophy, and Elements of Executive
Compensation
We’re on a mission to create a world where customers
wonder, “How did we ever live without Coupang?” and to fulfill this mission we must hire, motivate, and retain the best. We believe our compensation program, including and especially our executive compensation program, is critical to achieve our
mission, and our executive compensation philosophy aims to achieve the following primary objectives:
|
● |
attract, retain, and incentivize highly qualified executives who can help us achieve our mission to “wow” the customer
and who can advance our financial goals and, ultimately, enhance and maintain our long-term equity value; |
|
● |
provide incentives that motivate and recognize performance; and |
|
● |
provide total compensation that is competitive in the markets where we seek executive talent. |
Based on the objectives above, our executive compensation
program aims to attract and retain top talent by offering competitive base salaries and, where appropriate and in the best interest of stockholders, retention incentives. The program further aligns incentives with those of our stockholders by
designating a significant portion of their total compensation to be composed of multi-year equity awards.
This compensation philosophy of focusing on long-term value
and rewarding performance, as seen in our executive compensation program, has resonated, and continues to resonate, through our compensation program for employees at all levels. For example, our compensation program provides equity, including
regular equity refresh grants, to the vast majority of our corporate employees. The equity compensation program is designed to further align the compensation of our employees with the long-term performance of our common stock and stockholder and
customer interests.
How We Determine Executive Compensation
Our compensation arrangements with our executive officers,
including the NEOs, have been determined in arm’s-length negotiations with each individual. The compensation arrangements reflect various factors and considerations, including but not limited to the following (each as of the time of the applicable
compensation decision):
|
● |
the strategic importance of the position and our current business needs; |
|
● |
guidance from our compensation consultant; |
|
● |
generally available market surveys; |
|
● |
benchmarking by role and/or scope of responsibilities from our selected compensation peer group; and |
28 | 2023 Coupang Proxy Statement |
|
● |
the compensation levels of our other executive officers. |
The Compensation Committee sets the compensation for our
executive officers at levels that it believes are competitive and appropriate for each executive officer, including each NEO, and that are intended to reflect the varying roles and responsibilities of each individual. Executive compensation
decisions require consideration of many relevant factors, which may vary from year to year.
Each element of our executive compensation program is
intended to fulfill one or more of our overall compensation objectives in a complementary manner and, ultimately, to maximize long-term shareholder value. For example, the markets from which we seek executive talent have been and remain highly
competitive. Providing a consistent and competitive level of income for our executives in the form of competitive base salary, equity, and/or, where appropriate, retention incentives, helps us to attract, motivate, and retain highly qualified
executives who can help us achieve our mission to “wow” the customer. Further, by structuring a significant portion of our executive compensation to be in the form of multi-year equity awards, our executive compensation program directly ties a
significant portion of our executive compensation to our long-term equity value, incentivizing our executives to focus on driving long-term stock price appreciation and long-term customer value.
Since a significant portion of our long-term executive
compensation is multi-year, variable, at-risk, and closely aligned with our corporate and financial performance, we believe our executive compensation program is reasonable, competitive, and appropriately balances the goals of attracting,
retaining, and incentivizing highly-qualified executives while directly aligning their interests with those of our stockholders.
Compensation Setting Process
Our Compensation Committee is responsible for the oversight
of our executive compensation program and regularly reviews and discusses the program with management to assess whether it is aligned with our short and long-term goals and objectives given the dynamic nature of our business and the markets in
which we compete for talent.
Role of the Compensation Committee and Management
The Compensation Committee is appointed by the Board of
Directors and has responsibilities related to the compensation of our directors and executive officers and the development and administration of our executive compensation program. Our Compensation Committee consists solely of independent members
of the Board of Directors.
The Compensation Committee reviews and approves all
compensation paid to our executive officers, including our NEOs. Management provides recommendations with respect to the compensation of our executive officers, which may be based upon, among other factors, those discussed below. The Compensation
Committee discusses and makes final determinations with respect to executive compensation matters without the Chief Executive Officer present during discussions and decisions related to the Chief Executive Officer’s compensation. From time to time,
various other members of management and other employees as well as outside advisors or consultants may be invited by the Compensation Committee to make presentations, provide financial or other background information or advice, or otherwise
participate in the Compensation Committee meetings, although such members of management are not present when their compensation is being deliberated upon or approved.
The Compensation Committee meets periodically throughout
the year to manage and evaluate our executive compensation program, and reviews and approves the principal components of executive compensation. For 2022, the principal components of our executive compensation were: base salary, long-term incentive
compensation, and retention incentives. In making executive compensation decisions, in addition to the factors discussed below the Compensation Committee also generally takes into consideration company performance, each executive officer’s
individual performance in light of the applicable executive officer’s role and responsibilities, and the need to retain existing talent in a highly competitive talent market in which we compete.
Role of the Compensation Consultant
The Compensation Committee has the authority to retain
independent compensation consultants to assist in its evaluation of executive compensation, including the authority to approve the consultant’s fees. In 2022, the Compensation Committee retained Compensia, Inc. (“Compensia”), a national
compensation consulting firm in the United States, as its independent compensation consultant. Compensia is retained by and reports directly to the Compensation Committee, assists management in preparing for specified committee meetings, and
participates in committee meetings upon request.
Compensia periodically informs the Compensation Committee
on market trends and practices, as well as regulatory issues and developments and how they may impact our executive compensation program. For 2022, Compensia also:
|
● |
assisted the committee in developing a relevant group of peer companies to help our compensation committee determine the
appropriate level of overall compensation for our executive officers and directors; |
29 | 2023 Coupang Proxy Statement |
|
● |
assisted the committee with its assessment of the level, structure, and each element of the compensation for our
executive officers, including by providing market data and insights to ensure a competitive compensation framework; |
|
● |
provided input including guidance and benchmarking related to new SEC rules requiring disclosures in this Proxy
Statement; |
|
● |
reviewed and advised us regarding the Chief Executive Officer pay ratio disclosure; and |
|
● |
provided assistance with and market perspective on our broader equity compensation strategy. |
Compensia does not provide any other services to us. The
Compensation Committee has assessed the independence of Compensia pursuant to NYSE rules and the Committee concluded that the work performed by Compensia for the Compensation Committee did not raise any conflicts of interest.
Comparison to Relevant Peer Group
Given the complex and multi-dimensional nature of executive
compensation decisions, the Compensation Committee believes that determining NEO compensation requires a deliberate and case-by-case review of a broad range of factors, as well as an in-depth and multi-faceted analysis of each such factor. These
factors include but are not limited to: (i) personal performance and contributions; (ii) experience and past performance inside or outside the Company; (iii) role and responsibilities within the Company; (iv) market competition for a particular
position; (v) tenure with the Company and associated institutional knowledge; (vi) long-term potential with the Company; and (vii) innovative thinking and leadership.
One of several factors the Compensation Committee considers
in determining NEO compensation is the competitiveness of our executive compensation program against that of our compensation peer group. In doing so, and in line with its belief that executive compensation decisions should not rely solely on any
single factor or be based on a one-dimensional view, the Compensation Committee uses market data to assess the overall competitiveness and reasonableness of our executive compensation program, rather than targeting percentile ranks of specific
compensation elements or total target direct compensation against the market data. The Compensation Committee also considered a comprehensive list of factors in developing the compensation peer group for 2022, including:
|
● |
Actual experience in the talent market (companies from which we source and potentially lose executive talent); |
|
● |
Scale and complexity (using revenue, earnings, and market capitalization); |
|
● |
Company business characteristics (for example, comparably sized high-growth technology companies, technology-oriented gig
economy companies, retail and marketplace companies, global operations, and other high growth indicators). |
For 2022 compensation decisions, the Compensation Committee
utilized the peer group set forth below. The group remains unchanged from 2021, except for the addition of Sea Ltd. and Snowflake Inc. due to similarities in industry and tenure.
2022 Peer Group |
Airbnb |
Lyft |
Snap |
Block |
Palantir Technologies |
Snowflake |
Chewy |
PayPal Holdings |
Splunk |
ContextLogic |
Pinterest |
Twitter |
DoorDash |
salesforce.com |
Uber Technologies |
eBay |
Sea |
Wayfair |
Expedia Group |
ServiceNow |
Workday |
Intuit |
Shopify |
Zillow Group |
30 | 2023 Coupang Proxy Statement |
Elements of NEO Compensation
Our executive compensation program is comprised of the
following key components:
Component |
|
Objective |
|
Key Features |
Base Salary |
|
Recognizes market factors,
as well as individual experience, performance, and level of responsibility. |
|
Attract and retain talent
and provide executives with cash income predictability and stability. |
Long-Term Equity Incentives
|
|
Creates a strong link
between pay and performance. The realized value of these equity awards over time has a direct relationship to our stock price and establishes an incentive for our NEOs to create sustainable, long-term value for our stockholders, while
retaining our NEOs in a highly competitive market. |
|
Variable, at-risk compensation in the form of
options and restricted stock units (“RSUs”) that vest upon satisfaction of service-based vesting conditions.
Generally granted as multi-year equity awards to
foster a founder’s mentality and entrepreneurial spirit.
|
From time to time, we pay our employees in a currency other
than U.S. Dollars. To the extent any amount of our employee compensation was paid in a currency other than U.S. Dollars, such amounts are reported by converting the amounts from the applicable currency to U.S. Dollars using the one-year average
exchange rate for the applicable calendar year and currency, consistent with the conversion rate we use for various financial and accounting purposes. All amounts presented in this Proxy Statement have been rounded to the nearest whole dollar.
Base Salary
Typically, annual base salaries for our NEOs are set in
March of each year, retroactive to January 1st of that year. Accordingly, in March 2022, the Compensation Committee reviewed the base salaries of our executive officers, including our NEOs, taking into consideration the recommendations of our Chief
Executive Officer (except with respect to his own base salary), as well as the other factors described above. Following this review, the Compensation Committee determined to: (i) maintain the annual base salaries of Messrs. Anand, Kang, and Rogers
at their 2021 levels at $420,000, 1 billion Korean Won (“KRW”) (equivalent to approximately $774,024), and $450,000, respectively; and (ii) increase the base salary of Mr. Kim from $850,000 to $1,100,000, effectively retroactively to January 1,
2022.
New Hire and Retention Incentives
From time to time, we may award sign-on or discretionary
bonuses to attract or retain executive talent. Generally, sign-on bonuses are used to incentivize candidates to leave their current employers, including by offsetting the loss of unvested compensation they may forfeit as a result of leaving their
current employers. The Compensation Committee may also from time to time provide one-time or recurring incentives to encourage long-term service by our executives and to allow our executive compensation program to stay competitive during times of a
highly competitive talent market and/or unexpected market disruptions.
As previously disclosed and described in his executive
appointment agreement, Mr. Kang’s employment arrangement provides for a long-term service bonus of 500 million KRW per year (equivalent to approximately $387,012), paid quarterly on the last compensation payment date of the quarter, subject to Mr.
Kang’s continued employment through each applicable payment date. As previously disclosed and described in his executive appointment agreement, Mr. Rogers’ employment arrangement provides for a $100,000 annual cash retention bonus to be paid on
each anniversary of his initial appointment date, subject to his continued employment through each applicable payment date.
Long-Term Equity Incentives
We view long-term incentive compensation in the form of
equity awards as a critical element of our executive compensation program. As such, a significant portion of our NEO total compensation over the long-term is stock-based compensation designed to create a strong and direct link between pay and
performance. The Compensation Committee’s practice is to grant multi-year equity awards on a periodic basis at levels designed to provide a strong alignment between the recipient and our stockholders and to encourage
retention over the vesting period. The realized value of these equity awards over time has a direct relationship to our stock price and establishes an incentive for our NEOs to create sustainable, long-term value for our stockholders, while
retaining our NEOs in a highly competitive market.
31 | 2023 Coupang Proxy Statement |
Prior to our IPO, our NEOs were granted three types of
equity awards: profits interests units (“PIUs”) under our Fourth Amended and Restated 2011 Profits Interest Plan (the “2011 PIP”); options under our Third Amended and Restated 2011 Equity Incentive Plan (the “2011 Plan”), and/or restricted equity
units (“REUs”) under our 2011 Plan, based on our assessment of current market practices. Upon the completion of our conversion into a Delaware corporation in conjunction with our IPO (the “Corporate Conversion”), all outstanding options to purchase
our common units held by our NEOs became options to purchase one share of our Class A common stock (or, in the case of our Chief Executive Officer, Class B common stock) for each common unit underlying these options immediately prior to the
Corporate Conversion, at the same exercise price in effect prior to the Corporate Conversion, and the outstanding REUs became RSUs that, upon settlement, settled in one share of our Class A common stock for each common unit underlying such REU
immediately prior to the Corporate Conversion (unless, the Compensation Committee determined to settle the RSUs in cash). The outstanding options and RSUs continue to be subject to any applicable time-vesting conditions. The performance-based
liquidity event vesting condition applicable to our outstanding RSUs was satisfied in connection with the IPO. Upon completion of our Corporate Conversion, outstanding units held by our Chief Executive Officer converted into an equal number of
shares of Class B common stock, and upon completion of the IPO and in accordance with their terms, his outstanding and unvested equity accelerated and vested. Following our IPO, our NEOs were granted two types of equity awards—time-based restricted
stock units (“RSUs”) or performance-based restricted stock units (“PSUs”)—in both cases under our 2021 Plan.
In granting these equity awards and in determining the type
of equity award to grant to NEOs, we generally considered, among other things, the NEO’s cash compensation, the need to create a meaningful opportunity for reward based on the creation of long-term value, an evaluation of the expected and actual
performance of each NEO, the NEO’s individual contributions and responsibilities, and the retentive effect of the NEO’s existing equity awards and how that lapses over time as awards vest. Taking into account the above considerations, the
Compensation Committee granted: (i) in March 2022, 255,037 PSUs, 274,098 PSUs, and 304,670 PSUs to Messrs. Anand, Kang, and Rogers, respectively; and (ii) in December 2022, 206,772 PSUs to Mr. Anand. The PSUs awarded to Mr. Anand vest in full on
March 1, 2027, contingent upon Mr. Anand achieving a performance objective for the year ending December 31, 2026, as determined by the Compensation Committee at the recommendation of the Chief Executive Officer. The PSUs awarded to Mr. Kang vested
or will vest as follows, in each case contingent upon certification by the Compensation Committee, at the recommendation of the Chief Executive Officer, as to achievement of the relevant performance objective for such performance period: (i) 49,543
shares on March 1, 2023 upon achievement of his performance objective for the year ended December 31, 2022; (ii) 49,543 shares on March 1, 2024 upon achievement of his performance objective for the year ended December 31, 2023; (iii) 34,036 shares
on March 1, 2025 upon achievement of his performance objective for the year ended December 31, 2024; and (iv) 140,976 shares on March 1, 2026 upon achievement of his performance objective for the year ended December 31, 2025. The PSUs awarded to
Mr. Rogers vested or will vest as follows, in each case contingent upon certification by the Compensation Committee, at the recommendation of the Chief Executive Officer, as to achievement of the relevant performance objective for such performance
period: (i) 52,508 shares on March 1, 2023 upon achievement of his performance objective for the year ended December 31, 2022; (ii) 52,508 shares on March 1, 2024 upon achievement of his performance objective for the year ended December 31, 2023;
(iii) 177,982 shares on March 1, 2025 upon achievement of his performance objective for the year ended December 31, 2024; and (iv) 21,672 shares on March 1, 2026 upon achievement of his performance objective for the year ended December 31, 2025.
Our NEOs are eligible to receive additional equity awards
at the discretion of our Compensation Committee but may or may not receive equity awards on an annual basis and, consequently, their compensation, as reported in the 2022 Summary Compensation Table below, may fluctuate materially from year to year
depending on whether a grant was made in a particular year.
32 | 2023 Coupang Proxy Statement |
Other Features
of Our Executive Compensation Program
Employment Agreements
Effective upon completion of the IPO, we entered into new
employment agreements with each of our NEOs that replaced their then-existing employment agreements. These employment agreements are described in more detail below in the subsection titled “NEO Employment Agreements and Potential Payments Upon
Termination or Change in Control.”
Severance and Change in Control Payments and Benefits
Messrs. Kim, Rogers, and Kang’s employment agreements
provide for certain severance payments and/or benefits in the context of certain qualifying terminations of employment. In addition, in January 2021, we adopted an Executive Severance Policy under which our NEOs are eligible to participate. The
terms of the Executive Severance Policy were determined based on a review of market practices and the input of Compensia. Our NEOs are entitled to the greater of the severance payments and/or benefits as may be provided in their employment
agreements or our Executive Severance Policy upon a qualifying termination of employment. The payments and benefits provided for under their employment agreements and our Executive Severance Policy are described in more detail below in the
subsections titled “NEO Employment Agreements and Potential Payments Upon Termination or Change in Control.”
Clawback
If we are required to restate our financial results due to
our material noncompliance with any financial reporting requirements under the federal securities laws as a result of misconduct, our Chief Executive Officer and Chief Financial Officer may be legally required to reimburse us for any bonus or other
incentive-based or equity-based compensation they receive in accordance with the provisions of section 304 of the Sarbanes-Oxley Act of 2002. We intend to timely adopt a clawback policy consistent with the requirements of the final NYSE listing
standards implementing Exchange Act Rule 10D-1.
Employee Benefits and Perquisites
We generally provide our NEOs with benefits available to
all our employees, including medical, dental, and vision benefits and, in the United States, participation in a Section 401(k) plan. We also provide certain of our NEOs with security benefits. In addition, as is common practice in Korea, we have
purchased a golf club membership for Mr. Kang to use for business purposes. The membership is registered in the Company’s name, is reflected as an asset on the Company’s financial statements, and the Company has the right to sell the membership at
any time. Mr. Kang is required to reimburse the Company for his personal use of this membership and, as a result, there is no incremental cost to the Company associated with Mr. Kang’s use of this membership and no amounts have been included with
respect to this membership in the 2022 Summary Compensation Table. Mr. Kang did not use the golf membership for personal purposes in 2022.
In some cases, our executives are asked to relocate at our
request and serve an expatriate assignment. Consistent with the types of benefits provided to our other expatriate executives, for our expatriate NEOs, we provide benefits relating to housing, educational support, travel and moving
expenses, security and transportation, visa services, and any related tax filing and reimbursement with respect to certain of these benefits.
In order to support our executives’ efficiency in the
performance of their duties and in response to COVID-19 safety precautions, during 2022, the Company provided chartered aircraft to certain of our executive officers for certain business travel.
Our NEOs did not participate in, or earn any benefits
under, a non-qualified deferred compensation plan sponsored by us during 2022.
Our NEOs did not participate in, or earn any benefits
under, any pension or retirement plan sponsored by us during 2022.
Anti-Hedging Policy
Our insider trading policy prohibits all directors and
officers, employees, designated consultants, and designated independent contractors from engaging in hedging or similar transactions in our stock, such as prepaid variable forwards, equity swaps, collars, puts, calls, and short sales.
33 | 2023 Coupang Proxy Statement |
Tax Considerations
Section 162(m) of the Internal Revenue Code (“Section
162(m)”) generally disallows a publicly held corporation’s tax deduction for compensation paid to its Chief Executive Officer and certain of its other executive officers in excess of $1 million in any year. While Section 162(m) will limit the
deductibility of compensation paid to the NEOs, the Compensation Committee will continue to retain flexibility to design compensation programs that are in the best long-term interests of the Company and our stockholders, with deductibility of
compensation being one of a variety of considerations taken into account. Accordingly, the Compensation Committee retains the ability to pay compensation that exceeds the deduction limitation under Section 162(m).
Compensation
Related Risks
Our Compensation Committee has reviewed our compensation
policies and practices to assess whether they encourage our employees, including our NEOs, to take inappropriate risks. Our Compensation Committee believes that the mix and design of the elements of compensation, individually or in their
entirety, do not encourage our employees, including our NEOs, to take inappropriate risks. The mix of fixed and variable compensation prevents undue focus on short-term results and is intended to align the long-term interests of our NEOs and our
other participating employees with those of our stockholders.
Compensation
Committee Report
Our Compensation Committee has reviewed and discussed with
management this CD&A. Based on that review and discussion, we recommended to the Board that this CD&A be included in this Proxy Statement and incorporated into Coupang’s Annual Report on Form 10-K for the fiscal year ended December 31,
2022.
The Compensation Committee
Neil Mehta (Chair), Pedro Franceschi, Kevin Warsh
|
34 | 2023 Coupang Proxy Statement |
Compensation Tables
2022 Summary Compensation Table
The following table provides information concerning compensation awarded to, earned by, or paid
to, each of our NEOs for all services rendered in all capacities during 2020, 2021, and 2022, respectively.
Name and
Principal
Position |
Year |
Salary
($)(1)(2) |
Bonus
($)(1) |
Stock
Awards
($)(3) |
Option
Awards
($) |
All Other
Compensation
($)(1) |
Total
($) |
Bom Kim
Chief Executive Officer
|
2022 |
1,100,000 |
— |
— |
—(4) |
831,296(5) |
1,931,296 |
2021 |
890,993 |
— |
— |
—(4) |
696,996 |
1,587,989 |
2020 |
886,635 |
— |
13,259,121 |
— |
195,473 |
14,341,229 |
Gaurav Anand
Chief Financial Officer
|
2022 |
420,000 |
500,000(6) |
8,231,663(7) |
— |
517,081(8) |
9,668,744 |
2021 |
438,126 |
— |
— |
— |
420,378 |
858,504 |
2020 |
423,065 |
75,600 |
8,070,000 |
— |
537,165 |
9,105,830 |
Hanseung Kang
Representative Director, Business Management
|
2022 |
774,024 |
637,012(6) |
5,202,380(7) |
— |
164,000(9) |
6,777,415 |
2021 |
873,805 |
436,903 |
|
— |
85,380 |
1,396,088 |
2020 |
141,237 |
— |
4,846,229 |
— |
— |
4,987,466 |
Harold Rogers
General Counsel & Chief Administrative Officer
|
2022 |
450,000 |
350,000(6) |
5,782,637(7) |
— |
331,786 (10) |
6,914,423 |
2021 |
450,000 |
100,000 |
2,332,000 |
— |
309,772 |
3,191,771 |
2020 |
446,358 |
300,000 |
— |
1,074,133 |
269,634 |
2,090,125 |
Thuan Pham(11)
Former Chief Technology Officer
|
2022 |
363,462 |
— |
— |
— |
17,992(12) |
381,453 |
2021 |
492,308 |
— |
— |
— |
30,712 |
523,020 |
2020 |
142,045 |
— |
27,438,000 |
— |
60,730 |
27,640,775 |
|
1. |
Certain amounts reflected in the “Salary,” “Bonus,” and “All Other Compensation” columns were converted from KRW to U.S. Dollars using the
average exchange rate for 2022 of 1,291.95 KRW to $1.00 USD. |
|
2. |
The amounts reported in this column represent the NEO’s base salary earned during the applicable fiscal year and payments for unused vacation
days to the extent applicable. |
|
3. |
The grant date fair value for PSUs reported in the table is computed in accordance with ASC Topic 718 based on the closing price per share of our
Class A common stock as reported on the NYSE on the date of grant. Even though the PSUs are subject to achievement of certain performance criteria and the applicable NEO’s continuous service to us through and including the applicable vesting
date, achievement of the performance criteria was deemed probable on the grant date and, accordingly, the aggregate grant date fair value of the PSUs are reported herein. For a discussion of the assumptions used in the calculation of the
grant date fair value, please refer to Note 4 in the Notes to Consolidated Financial Statements of our 2022 Annual Report. Note that the amounts reported in this column reflect the aggregate accounting cost of the applicable award and do not
necessarily reflect the actual economic value that may ultimately be realized by the applicable NEO. |
|
4. |
As required pursuant to the SEC’s disclosure rules, the value of Mr. Kim’s IPO incentive award included in the table above was computed based on
the probable outcome of the performance-based liquidity event vesting condition (i.e., occurrence of our IPO). Achievement of the performance-based liquidity event vesting condition was not deemed probable on the grant date and, accordingly,
pursuant to the applicable SEC’s disclosure rules, no value is included in the table for the option award previously granted to Mr. Kim. Assuming achievement of the performance-based liquidity event vesting condition, the grant date fair
value of Mr. Kim’s IPO incentive award was $58,347,678. |
|
5. |
This amount includes security and transportation costs in the amount of $317,832, housing and moving costs of $118,702, education expenses of
$55,526, and tax-filing services of $46,996, as well as insurance premiums. This amount also includes a tax gross-up of $268,331. The benefits received by Mr. Kim were valued on the basis of the aggregate incremental cost to the Company and
represent the amount paid to the service provider or Mr. Kim, as applicable. |
|
6. |
These amounts include any cash retention awards paid to the applicable NEO in 2022. Because we place a greater emphasis on providing longer-term
incentives for our employees, the awards were designed to vest quarterly over a one-year period, subject to the applicable NEO’s continued service to us through the applicable vest date. |
|
7. |
Represents the aggregate grant date fair value of the PSUs granted to the applicable NEO in March or December 2022, as applicable, as computed in
accordance with ASC Topic 718. The PSUs are subject to achievement of certain performance criteria and the applicable NEO’s continuous service to the Company through and including the applicable vesting date. |
|
8. |
This amount includes security and transportation costs in the amount of $232,276, housing and moving costs of $94,557, and education expenses of
$102,439, as well as insurance premiums, executive benefits, and tax filing services. This amount also includes a tax gross-up of $49,512. The benefits received by Mr. Anand were valued on the basis of the aggregate incremental cost to the
Company and represent the amount paid to the service provider or Mr. Anand, as applicable. |
|
9. |
This amount includes security and transportation costs in the amount of $135,946, as well as insurance premiums, executive benefits, gym
membership, and tax filing services. This amount also includes a tax gross-up of $11,422. The benefits received by Mr. Kang were valued on the basis of the aggregate incremental cost to the Company and represent the amount paid to the service
provider or Mr. Kang, as applicable. |
|
10. |
This amount includes security and transportation costs in the amount of $125,529, housing and moving costs of $79,435, and education expenses of
$58,994, as well as insurance premiums, executive benefits, and tax filing services. This amount also includes a tax gross-up of $27,389. The benefits received by Mr. Rogers were valued on the basis of the aggregate incremental cost to the
Company and represent the amount paid to the service provider or Mr. Rogers, as applicable. |
|
11. |
Mr. Pham retired from the Company, effective as of September 15, 2022. |
|
12. |
This amount includes insurance premiums. The benefits received by Mr. Pham were valued on the basis of the aggregate incremental cost to the
Company and represent the amount paid to the service provider or Mr. Pham, as applicable. |
35 | 2023 Coupang Proxy Statement |
2022 Grants of Plan-Based Awards
The following table provides, for each of our NEOs, information concerning plan-based awards
granted during our fiscal year ended December 31, 2022. This information supplements the information about these awards set forth in the “2022 Summary Compensation Table” above.
Name |
Award
Type |
Grant Date(1) |
Estimated Future Payouts Under
Equity Incentive Plan Awards |
Exercise or Base Price of Option Awards ($/Sh) |
Grant Date Fair Value of Stock and Option Awards ($)(3) |
Target (#)(2) |
Bom Kim |
— |
— |
— |
— |
— |
Gaurav Anand |
PSUs |
3/29/22 |
255,037 |
18.98 |
4,840,602 |
PSUs |
12/19/22 |
206,772 |
16.40 |
3,391,061 |
Hanseung Kang |
PSUs |
3/29/22 |
274,098 |
18.98 |
5,202,380 |
Harold Rogers |
PSUs |
3/29/22 |
304,670 |
18.98 |
5,782,636 |
Thuan Pham |
— |
— |
— |
— |
— |
|
1. |
Represent PSUs awarded under our 2021 Equity Incentive Plan. The vesting schedule applicable to each award is set forth in the subsection titled
“Outstanding Equity Awards at December 31, 2022” below. |
|
2. |
The PSU award performance objectives are not financial based. The condition is met by achieving a performance metric. There are no thresholds
or maximum levels for these PSU awards. |
|
3. |
The amounts reported in this column represent the aggregate grant date fair value of the equity awards, as computed in accordance with ASC Topic
718. For a discussion of the assumptions used in the calculation of the grant date fair value, please refer to Note 4 in the Notes to Consolidated Financial Statements of our 2022 Annual Report. With respect to the PSUs reported herein,
because achievement of the applicable performance criteria was deemed probable on the grant date and, accordingly, the aggregate grant date fair value of the PSUs are reported herein even though the PSUs are subject to achievement of certain
performance criteria and the applicable NEO’s continuous service to us through and including the applicable vesting date. Note that the amounts reported in this column reflect the aggregate accounting cost of the applicable award and do not
necessarily reflect the actual economic value that may ultimately be realized by the applicable NEO. |
36 | 2023 Coupang Proxy Statement |
Outstanding Equity Awards at December 31, 2022
The following table presents, for each of our NEOs, information with respect to outstanding
equity awards held by such NEO as of December 31, 2022. This information supplements the information about these awards set forth in the “2022 Summary Compensation Table” above.
|
|
|
Option
Awards |
|
Stock
Awards |
Name |
Grant Date |
Number of
Securities
Underlying
Unexercised
Options
Exercisable |
Number of
Securities
Underlying
Unexercised
Options
Unexercisable |
Option
Exercise
Price |
Option
Expiration
Date |
|
Number of
Shares or
Units of Stock
That Have Not
Vested |
Market Value of
Shares or
Units of Stock
That Have
Not Vested(1) |
Equity
Incentive
Plan Awards:
Number of
Unearned
Shares, Units,
or Other Rights
That Have Not
Vested |
Equity
Incentive
Plan Awards:
Market or
Payout Value
of Unearned
Shares, Units,
or Other Rights
That Have Not
Vested(1) |
(#) |
(#) |
($) |
(#) |
($) |
(#) |
($) |
Bom Kim |
2/7/2021 |
(2) |
3,854,603 |
2,753,288 |
16.46 |
2/7/2028 |
|
— |
— |
— |
— |
Gaurav Anand
|
5/17/2018 |
(3) |
— |
30,000 |
1.98 |
5/16/2028 |
|
— |
— |
— |
— |
5/16/2019 |
(4) |
540,000 |
1,500,000 |
1.99 |
5/15/2029 |
|
— |
— |
— |
— |
12/2/2020 |
(5) |
— |
— |
— |
— |
|
600,000 |
8,826,000 |
— |
— |
3/29/2022 |
(6) |
— |
— |
— |
— |
|
— |
— |
255,037 |
3,751,594 |
12/19/2022 |
(6) |
— |
— |
— |
— |
|
— |
— |
206,772 |
3,041,616 |
Hanseung Kang |
11/18/2020 |
(7) |
— |
— |
— |
— |
|
300,262 |
4,416,854 |
— |
— |
3/29/2022 |
(8) |
— |
— |
— |
— |
|
— |
— |
274,098 |
4,031,982 |
Harold Rogers |
1/23/2020 |
(9) |
566,500 |
257,500 |
2.24 |
1/22/2030 |
|
— |
— |
— |
— |
1/11/2021 |
(10) |
— |
— |
— |
— |
|
120,000 |
1,765,200 |
— |
— |
3/29/2022 |
(11) |
— |
— |
— |
— |
|
— |
— |
304,670 |
4,481,696 |
Thuan Pham |
11/18/2020 |
(12) |
— |
— |
— |
— |
|
— |
— |
— |
— |
|
1. |
The amounts reported in these columns reflect the market value of the stock or equity incentive plan awards of stock, as computed using the
closing market price of our Class A common stock on the NYSE on December 30, 2022 (the last trading day of our fiscal year ended December 31, 2022), which was $14.71. |
|
2. |
1/36 of the initial grant of the shares subject to the stock option vest monthly over a three-year period commencing on April 15, 2021, provided
that the NEO remains in continuous service with us as of each of the applicable vesting dates. Vesting was also contingent on the IPO, which vesting condition was satisfied in March 2021. |
|
3. |
10% of the shares subject to the stock option vested on March 1, 2019, and 6.25% vest on each quarterly anniversary thereafter, provided that the
NEO remains in continuous service with us as of each of the applicable vesting dates. |
|
4. |
40% of the 3,000,000 shares subject to the stock option vested as of December 31, 2022, and 150,000 shares vest on
each quarterly anniversary thereafter, provided that the NEO remains in continuous service with us as of each of the applicable vesting dates. |
|
5. |
These RSUs vest as to 5% of the RSUs on March 1, 2021, and on each quarterly anniversary thereafter, subject to the NEO’s continued
service with us as of each applicable vesting date. Vesting was also contingent on the IPO, which vesting condition was satisfied in March 2021. |
|
6. |
These PSUs vest in full on March 1, 2027, contingent upon achievement by Mr. Anand of certain performance metrics and certification by the
Compensation Committee of the Board of such performance achievement, as well as Mr. Anand’s continued service to the Company through and including each vesting date. |
|
7. |
These RSUs vest as to 25% of the RSUs on November 1, 2021, and 6.25% of the RSUs on each quarterly anniversary thereafter, subject to the
NEO’s continued service with us as of each applicable vesting date. Vesting was also contingent on the IPO, which vesting condition was satisfied in March 2021. |
|
8. |
49,543 shares subject to the PSUs vest on March 1, 2024, 34,046 shares subject to the PSUs vest on March 1, 2025, and 140,976 shares subject to
the PSUs vest on March 1, 2026, in each case contingent upon achievement by Mr. Kang of certain performance metrics and certification by the Compensation Committee of the Board of such performance achievement, as well as Mr. Kang’s continued
service to the Company through and including each vesting date. 49,543 shares subject to the PSUs vested on March 1, 2023, following the certification by the Compensation Committee that the applicable performance objective was
achieved. |
|
9. |
25% of the shares subject to the stock option vested on January 1, 2021, and 6.25% vest on each quarterly anniversary thereafter, provided that
the NEO remains in continuous service with us as of each of the applicable vesting dates. |
|
10. |
1/20 of the initial grant of 200,000 RSUs vest quarterly over a 5-year period commencing on March 1, 2021, subject to the NEO’s continued
employment through each applicable vesting date. Vesting was also contingent on the IPO, or the occurrence of a change in control, which vesting condition was satisfied upon the six-month anniversary of our IPO. |
|
11. |
52,508 shares subject to the PSUs vest on March 1, 2024, 177,982 shares subject to the PSUs vest on March 1, 2025, and 21,672 shares subject to
the PSUs vest on March 1, 2026, in each case contingent upon achievement by Mr. Rogers of certain performance metrics and certification by the Compensation Committee of the Board of such performance achievement, as well as Mr. Rogers’
continued service to the Company through and including each vesting date. 52,508 shares subject to the PSUs vested on March 1, 2023, following the certification by the Compensation Committee that the applicable performance objective
was achieved. |
|
12. |
Mr. Pham retired from the Company, effective as of September 15, 2022. Accordingly, all RSUs previously granted to Mr. Pham that had remained
unvested as of such date were forfeited. |
37 | 2023 Coupang Proxy Statement |
2022 Option Exercises and Stock Vested
The following table presents, for each of our NEOs, certain information with respect to shares
acquired by such NEO upon the vesting of RSU and PSU awards in 2022 and the related value realized during 2022.
Name |
Stock Awards |
Number of Shares
Acquired on Vesting |
Value Realized
on Vesting |
(#) |
($)(1) |
Bom Kim |
— |
— |
Gaurav Anand |
200,000 |
3,746,000 |
Hanseung Kang |
150,131 |
2,611,903 |
Harold Rogers |
40,000 |
749,200 |
Thuan Pham |
637,500 |
13,342,875 |
|
1. |
The amounts reported in this column have been calculated by multiplying the gross number of shares acquired on vesting by the closing price
of our Class A common stock on the NYSE on the applicable vesting date. Therefore, the amounts shown in this column do not represent the actual amounts paid to or realized by the NEO during 2022 nor do they represent the amounts that may be
used for tax purposes. |
38 | 2023 Coupang Proxy Statement |
NEO Employment Agreements and Potential Payments Upon
Termination or Change in Control
Employment Agreements
Bom Kim
Mr. Kim’s employment agreement provides for an annual base salary of $850,000 per year (which has
been increased to $1,100,000 by the Compensation Committee and may in the future be increased by the Board of Directors or the Compensation Committee, as applicable). The employment agreement also provides that Mr. Kim will participate in any of
our bonus plans, our long-term incentive plan (under which he will receive awards as determined by the Board of Directors or Compensation Committee, as applicable), and our employee benefit plans on no less favorable terms to those provided to our
other senior officers.
Mr. Kim’s employment agreement provides for an initial term of employment of three years, with
automatic one year renewals unless either party provides written notice of nonrenewal to the other party at least six months prior to the end of the initial term or a renewal term, as applicable, subject to earlier termination in the case of Mr.
Kim’s death or disability (as defined in the employment agreement), resignation with or without good reason (as defined in the employment agreement), or termination by us with or without cause (as defined in the employment agreement).
Mr. Kim’s employment agreement also includes a confidentiality and nondisclosure restriction,
intellectual property assignment provisions, and certain rights to indemnification by us. Mr. Kim’s employment agreement further provides that if any amounts payable to Mr. Kim, whether under the employment agreement or otherwise, would constitute
“parachute payments” under Section 280G of the Code and would be subject to an excise tax imposed by Section 4999 of the Code, then payments will either be reduced to the least extent necessary to avoid the application of such excise tax or paid in
full, whichever will result in the greatest after-tax benefit to Mr. Kim.
Gaurav Anand
Mr. Anand’s executive appointment agreement provides for an annual base salary of $420,000 per
year (subject to periodic review and potential increases by the Board of Directors or Compensation Committee). The executive appointment agreement also provides that Mr. Anand is eligible for short-term or long-term incentive awards under such
policies and programs we may maintain from time to time and is eligible to participate in our health care benefit plans in accordance with their terms.
The term of Mr. Anand’s appointment with us under his executive appointment agreement is for a
period of two years (with automatic one year renewals), provided that either party may terminate the appointment earlier for any reason upon 60 days’ notice (or, in the case of termination by us, pay in lieu thereof, subject to Mr. Anand’s
execution of an effective release), except that we may terminate the appointment immediately for cause (as defined in the executive appointment agreement). Mr. Anand is also eligible to participate in our Executive Severance Policy.
Mr. Anand’s executive appointment agreement contains certain restrictive covenants, including
restrictions on solicitation of staff for one year following termination of his appointment with us and a non-disparagement provision. Mr. Anand is also bound by the restrictions contained in our standard form of confidentiality and invention
assignment agreement. Mr. Anand’s executive appointment agreement further provides that if any amounts payable to Mr. Anand, whether under the executive appointment agreement or otherwise, would constitute “parachute payments” under Section 280G of
the Code and would be subject to an excise tax imposed by Section 4999 of the Code, then payments will either be reduced to the least extent necessary to avoid the application of such excise tax or paid in full, whichever will result in the
greatest after-tax benefit to Mr. Anand.
In addition, Mr. Anand is party to a new letter of assignment with us and Coupang Corp., which
governs the terms of Mr. Anand’s international assignment from us to Coupang Corp. and provides for certain international-assignment related allowances and reimbursements, including for housing costs, transportation costs, and education expenses.
39 | 2023 Coupang Proxy Statement |
Hanseung Kang
Mr. Kang’s executive appointment agreement provides for an annual base salary of $774,024
(subject to periodic review and potential increases by the Board of Directors or Compensation Committee) and a long-term service bonus of $387,012 per year (payable in quarterly installments on the last payroll date per quarter, subject to Mr. Kang
being in service with us on each payment date). The executive appointment agreement also provides that Mr. Kang is eligible for short or long-term incentive awards under such policies and programs we may maintain. In addition, Mr. Kang is eligible
for a work vehicle and driver (as determined by the Board of Directors), and health club memberships. The employment agreement also provides for a golf club membership, which the Company has obtained for business purposes and which Mr. Kang may use
for personal purposes provided that Mr. Kang reimburses the Company for the costs of such personal usage. Mr. Kang did not use the golf membership for personal purposes in 2022.
The term of Mr. Kang’s appointment with us under his executive appointment agreement is through
November 1, 2024, provided that either party may terminate the appointment earlier for any reason upon 60 days’ notice (or, in the case of termination by us, pay in lieu thereof, subject to Mr. Kang’s execution of an effective release), except that
we may terminate the appointment immediately for cause (as defined in the executive appointment agreement).
Mr. Kang’s executive appointment agreement contains certain restrictive covenants, including
restrictions on solicitation of staff for one year following termination of Mr. Kang’s appointment with us and a non-disparagement provision. Mr. Kang is also bound by the restrictions contained in our standard form of confidentiality and invention
assignment agreement.
Harold Rogers
Mr. Rogers’ executive appointment agreement provides for an annual base salary of $450,000 per
year (subject to periodic review and potential increases by the Board of Directors or Compensation Committee) and an annual retention bonus of $100,000 per year (to be paid on each anniversary of his original commencement date with us, subject to
Mr. Rogers’ being in service with us and not having served notice of resignation or termination on each payment date). The executive appointment agreement also provides that Mr. Rogers is eligible for short-term or long-term incentive awards under
such policies and programs we may maintain from time to time and is eligible to participate in our health care benefit plans in accordance with their terms.
The term of Mr. Rogers’ appointment with us under his executive appointment agreement is for a
period of two years (with automatic one year renewals), provided that either party may terminate the appointment earlier for any reason upon 60 days’ notice (or in the case of termination by us, pay in lieu thereof, subject to Mr. Rogers’ execution
of an effective release), except that we may terminate the appointment immediately for cause (as defined in the executive appointment agreement).
Mr. Rogers is also eligible to participate in our Executive Severance Policy.
Mr. Rogers’ executive appointment agreement contains certain restrictive covenants, including
restrictions on solicitation of staff for one year following termination of his appointment with us and a non-disparagement provision. Mr. Rogers is also bound by the restrictions contained in our standard form of confidentiality and invention
assignment agreement. In addition, Mr. Rogers is party to a new letter of assignment with us and Coupang Corp., which governs the terms of Mr. Rogers’ international assignment from us to Coupang Corp. and provides for certain
international-assignment related allowances and reimbursements, including for housing costs, transportation costs and education expenses. Mr. Rogers’ executive appointment agreement further provides that if any amounts payable to Mr. Rogers,
whether under the executive appointment agreement or otherwise, would constitute “parachute payments” under Section 280G of the Code and would be subject to an excise tax imposed by Section 4999 of the Code, then payments will either be reduced to
the least extent necessary to avoid the application of such excise tax or paid in full, whichever will result in the greatest after-tax benefit to Mr. Rogers.
Termination and Change in Control Provisions
Executive Severance Policy
In January 2021, we adopted an Executive Severance Policy, under which our executive officers,
including our NEOs, are eligible to participate. Under the Executive Severance Policy, if a NEO’s employment is terminated by us without cause (including by reason of death or incapacity (as defined in the Executive Severance Policy)) at any time,
or if a NEO resigns for good reason within 12 months following a change in control (each such term as defined in the Executive Severance Policy), and the NEO executes and does not revoke a release in our favor and continues to comply with
restrictive covenants (other than in the case of termination due to death or incapacity), the NEO will be entitled to the following benefits:
40 | 2023 Coupang Proxy Statement |
If the NEO is based in the United States or is an expat based in Korea, an amount equal to the
NEO’s annual base salary payable as a lump sum or in installments at our discretion. If the NEO is a non-expat based in Korea, the NEO will be entitled to receive the greater of one times the NEO’s annual base salary or an amount in line with the
statutory severance formula under applicable Korean law (which is generally one month of base pay for each year of service) multiplied by a multiplier of up to four and payable as a lump sum or in installments at our discretion, following standard
Korean market practice.
If the NEO is based in the United States and elects to continue health insurance coverage under
COBRA, our payment of the monthly premiums for COBRA continuation coverage for the NEO and his or her dependents at the same rate as we paid at the time of such termination for a period of 12 months.
Following standard Korean market practice, the Executive Severance Policy also provides for
severance pay (subject to the execution and non-revocation of a release in our favor) to our NEOs who are based in Korea in the event of their voluntary termination of employment (including due to expiration of the term of their employment
agreements) that is calculated in line with the statutory severance formula under applicable Korean law (generally one month of base pay for each year of service, which is multiplied by a multiplier of up to four in the case of a non-expat NEO
based in Korea and multiplied by one in the case of an expat executive officer based in Korea).
If, at the time of a NEO’s termination of employment, the NEO is subject to an employment or
other individual service agreement with us that provides for the payment of severance upon a termination of employment that is more favorable than the payments under the Executive Severance Policy, the NEO will receive such severance payments
rather than the severance payments provided for under the Executive Severance Policy, and such severance payments provided under the Executive Severance Policy will be deemed included in such contractual severance payments.
In addition, if any of the payments or benefits provided for under the Executive Severance Policy
or otherwise would constitute “parachute payments” within the meaning of Section 280G of the Code and/or if such payments or benefits would give rise to a tax deduction for us that may potentially be limited by Section 280G and Section 4999 of the
Code, the NEO would be entitled to receive either full payment of such payments and benefits or such lesser amount that would result in no portion of the payments and benefits being subject to the excise tax, whichever results in the greater amount
of after tax benefit to the NEO.
Bom Kim
Under the terms of his employment agreement, if Mr. Kim’s employment is terminated by us without
cause or by him for good reason (including by reason of our failure to renew the term of the employment agreement), in addition to accrued obligations, Mr. Kim is entitled to receive the following severance payments and benefits (subject to his
entering into an effective mutual release of claims and continued compliance with non-disclosure requirements): (i) two times his then-current annual base salary ($2,2,00,000) (payable as a lump sum); (ii) continued coverage for him and his
eligible dependents under our group health plan for a period of up to 24 months following termination (or until he is eligible for other employer-provided health insurance, if sooner) with all costs for such coverage including any taxes that may be
imposed on Mr. Kim in respect of such coverage being borne by us (the value of such benefits as of December 31, 2022: $47,816); and (iii) immediate vesting of his outstanding equity awards (with any unsatisfied performance conditions assumed
satisfied at target) (the value of such vesting as of December 31, 2022: $0. If Mr. Kim’s employment is terminated due to his death or disability, Mr. Kim is entitled to receive the following severance payments and benefits (subject to his entering
into an effective mutual release of claims and continued compliance with non-disclosure requirements): (i) 12 months of his then-current base salary ($1,100,000) (in the case of his death, payable in equal installments in accordance with our
customary payroll practices, and in the case of his disability, payable as a lump sum); (ii) immediate vesting of his outstanding equity awards (with any unsatisfied performance conditions assumed satisfied at target) (the value of such vesting as
of December 31, 2022: $0; and (iii) continued coverage for him and his eligible dependents under our group health plan for a period of up to 24 months following termination (or until he is eligible for other employer-provided health insurance, if
sooner) with all costs for such coverage including the cost of any taxes that may be imposed on Mr. Kim in respect of such coverage being borne by us (the value of such benefits as of December 31, 2022: $47,816).
In the event of a termination of Mr. Kim’s employment by us without cause, by him for good
reason, or due to his death or disability, or in the event of a change in control, his IPO incentive award will accelerate and fully vest (with any unsatisfied performance conditions assumed satisfied at target) (the value of such vesting as of
December 31, 2022: $0).
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Hanseung Kang
If Mr. Kang’s appointment under his executive appointment agreement is terminated by us without
cause (as defined in his executive appointment agreement) other than by reason of death or disability, Mr. Kang is entitled to continued payment of his base salary for a period of 12 months $774,024 (subject to his execution of an effective release
and continued compliance with non-solicitation, non-disparagement, and confidentiality requirements). In addition, upon a termination of Mr. Kang’s appointment by us without cause (other than by reason of death or disability), Mr. Kang is entitled
to continue to time vest and settle in any of his outstanding and unvested RSUs from his November 2020 REU grant for a period of 12 months following such termination (the value of such vesting as of December 31, 2022: $2,208,427). Mr. Kang is also
eligible to participate in our Executive Severance Policy (provided that to the extent any severance under the executive appointment agreement is more favorable than any severance under our Executive Severance Policy, Mr. Kang will receive the
severance under the executive appointment agreement rather than under such policy). Under the terms of our Executive Severance Policy, if Mr. Kang’s employment is terminated by us without cause (including by reason of death or incapacity) at any
time, or if he resigns for good reason within 12 months following a change in control, then, subject to his execution and non-revocation of a release in our favor and continued compliance with certain restrictive covenants (as described above), Mr.
Kang would be entitled to an amount equal to his annual base salary $774,024. In addition, in the event of a voluntary termination of Mr. Kang’s employment without good reason, subject to his execution and non-revocation of a release in our favor
(as described above), Mr. Kang is entitled to his monthly average base salary for the three months immediately preceding such termination, multiplied by his number of years of service as an “Executive” (as defined in the Executive Severance Policy
and pro-rated for any partial years), multiplied by three ($418,747 as of December 31, 2022).
Under the terms of the 2011 Plan, in the event of a change in control in which Mr. Kang’s
outstanding equity awards are assumed or replaced and his employment is terminated without cause or he resigns for good reason, as such terms are defined in the 2011 Plan, within 12 months thereof, then 50% of his then unvested outstanding equity
awards under the 2011 Plan would accelerate and vest (the value of such vesting as of December 31, 2022: $2,208,420). In the event of a change in control in which the executive’s outstanding equity awards under the 2011 Plan are not assumed or
replaced, all of his then unvested outstanding equity awards will accelerate and fully vest under the terms of the 2011 Plan, regardless of whether or not his employment terminates (the value of such vesting as of December 31, 2022: $4,416,840).
Under the terms of the 2021 Plan and Mr. Kang’s March 2022 PSU Award Grant, in the event of a
Change in Control in which Mr. Kang’s employment is terminated Without Cause or he resigns for Good Reason, as such terms are defined in the 2021 Plan, within 12 months thereof, then 50% of his then unvested outstanding equity awards under the
March 2022 PSU Award Grant (or any award in which it was converted in connection to the Change in Control) would accelerate and vest (the value of such vesting as of December 31, 2022: $2,015,991).
Gaurav Anand and Harold Rogers
The executive appointment agreements for Messrs. Anand and Rogers provide that they will be
eligible to participate in our Executive Severance Policy as may be in effect and/or amended and/or restated from time to time. Under the terms of the Executive Severance Policy, if Mr. Anand or Mr. Rogers’ employment is terminated by us without
cause (including by reason of death or incapacity) at any time, or if they resign for good reason within 12 months following a change in control, then, subject to their execution and non-revocation of a release in our favor and continued compliance
with certain restrictive covenants (as described above), they would be entitled to (i) an amount equal to their annual base salary ($420,000 and $450,000 for Mr. Anand and Mr. Rogers, respectively). In addition, in the event of a voluntary
termination of their employment without good reason, subject to their execution and non-revocation of a release in our favor (as described above), Mr. Anand and Mr. Rogers are each entitled to their monthly average base salary for the three months
immediately preceding such termination, multiplied by their number of years of service as an Executive (pro-rated for any partial years), multiplied by one (as of December 31, 2022: $209,233 and 111,986 for Mr. Anand and Mr. Rogers, respectively).
Under the terms of the 2011 Plan, in the event of a change in control in which Messrs. Anand or
Rogers’ outstanding equity awards are assumed or replaced and their employment is terminated without cause or they resign for good reason, as such terms are defined in the 2011 Plan, within 12 months thereof, then 50% of then unvested outstanding
equity awards under the 2011 Plan would accelerate and vest (the value of such vesting as of December 31, 2022, for Messrs. Anand and Rogers: $13,953,000 and $2,488,113, respectively). In the event of a change in control in which the executive’s
outstanding equity awards under the 2011 Plan are not assumed or replaced, all of the then unvested outstanding equity awards will accelerate and fully vest under the terms of the 2011 Plan, regardless of whether or not employment terminates (the
value of such vesting as of December 31, 2022, for Messrs. Anand and Rogers: $27,906,000 and $4,976,225, respectively).
42 | 2023 Coupang Proxy Statement |
Under the terms of the 2021 Plan and Messrs. Anand and Rogers’ March 2022 PSU Award Grant, if
within 12 months following a Change in Control, Messrs. Anand or Rogers is terminated Without Cause or they resign for Good Reason, as such terms are defined in the 2021 Plan, within 12 months thereof, then 50% of then unvested outstanding equity
awards under the March 2022 PSU Award Grant (or any award in which it was converted in connection to the Change in Control) would accelerate and vest (the value of such vesting as of December 31, 2022, for Messrs. Anand and Rogers: Anand total:
$1,875,797 and $2,240,848, respectively).
Under the terms of the 2021 Plan and Mr. Anand’s December 2022 PSU Award Grant, if within 12
months following a Change in Control, Mr. Anand is terminated Without Cause or resigns for Good Reason, as such terms are defined in the 2021 Plan, within 12 months thereof, then 50% of then unvested outstanding equity awards under the December
2022 PSU Award Grant (or any award in which it was converted in connection to the Change in Control) would accelerate and vest (the value of such vesting as of December 31, 2022, for Mr. Anand : $1,520,808).
43 | 2023 Coupang Proxy Statement |