Business Context and Reporting Period
This Form 8-K filing by Five9, Inc. was submitted on February 12, 2018, reporting events that occurred on February 8, 2018. The filing details the adoption of the 2018 Bonus Program for Section 16 officers and a specific equity award for the Executive Chairman.
Key Financial Metrics
The filing does not report revenue, profit, cash flow, margins, debt, or liquidity figures. It focuses exclusively on executive compensation structures and targets.
Material Changes and Compensation Details
2018 Bonus Program
The Compensation Committee approved performance targets for the year ending December 31, 2018. Bonus funding is determined by Company financial performance and individual performance.
- Performance Weighting: Generally 75% Company financial performance and 25% individual performance. The Interim CEO/CFO bonus is 100% based on Company financial performance. The President's bonus is weighted 50% sales commissions, 37.5% Company financial performance, and 12.5% individual performance.
- Financial Metrics: Company performance is based on Revenue (80% weight) and Adjusted EBITDA (20% weight).
- Thresholds: No payout occurs if revenue is below 90% of target or Adjusted EBITDA is below 80% of target.
- Maximum Payouts: Revenue targets can yield up to 150% of the allocated bonus portion if achieved up to 125% of the target. Adjusted EBITDA targets can yield up to 150% if achieved up to 150% of the target. If Adjusted EBITDA is below 80% of target, the maximum revenue payout is capped at 100%.
Target Bonus Levels
| Officer | Annual Target Bonus (USD) | % of Base Salary |
|---|---|---|
| Barry Zwarenstein (Interim CEO/CFO) | $275,000 | 75% |
| Daniel Burkland (President) | $325,000 | 81% |
| Scott Welch | $164,000 | 50% |
| Gaurav Passi | $164,000 | 50% |
Executive Chairman Equity Award
Michael Burkland, Executive Chairman, received a Restricted Stock Unit (RSU) award with a grant date fair value of $360,000. This award compensates for increased time commitment and will vest in four quarterly installments.
Guidance, Outlook, and Risks
The filing does not provide financial guidance, outlook, or general risk factors. It notes that bonus payouts are contingent on achieving specific revenue and Adjusted EBITDA thresholds, creating a direct link between executive compensation and company financial performance.
Investor Verification Checklist
- Verify the specific revenue and Adjusted EBITDA targets set for 2018, as these are not disclosed in this filing but determine bonus payouts.
- Confirm the vesting schedule and any performance conditions attached to Michael Burkland's $360,000 RSU award.
- Monitor future filings to see if the company meets the 90% revenue and 80% Adjusted EBITDA thresholds required to trigger any bonus payments.
- Review the company's 10-K or 10-Q filings for the actual financial performance against these targets.