Five9, Inc. Form 8-K Summary
Business Context and Reporting Period
This Current Report on Form 8-K was filed by Five9, Inc. on February 24, 2016, reporting events that occurred on February 18, 2016. The filing details the approval of performance targets for the 2016 Bonus Program by the Compensation Committee of the Board of Directors.
Key Financial Metrics
The filing does not report revenue, profit, cash flow, margins, debt, or liquidity figures for the company. It focuses exclusively on executive compensation structures and performance thresholds.
Material Changes and Compensation Structure
The Compensation Committee approved the 2016 Bonus Program for Section 16 officers. Key structural elements include:
- Performance Weighting: Most officers are evaluated on 75% company financial performance and 25% individual performance. The CEO is evaluated 100% on company performance. The EVP, Sales & Business Development is evaluated on 60% sales commissions and 40% company performance.
- Financial Targets: Company performance is based on 80% revenue achievement and 20% adjusted EBITDA achievement.
- Payout Thresholds: No cash payout occurs if revenue is below 90% of the target or adjusted EBITDA is more than $400,000 below the target. Maximum payouts can reach 150% of the revenue target portion and 180% of the adjusted EBITDA target portion.
- Clawback/Reduction: If actual adjusted EBITDA is more than $400,000 below the target, the maximum payout for the revenue target is capped at 100%.
Executive Target Bonus Levels
| Officer Name | Annual Target Bonus (USD) | % of Base Salary |
|---|---|---|
| Michael Burkland | $320,000 | 60% |
| Barry Zwarenstein | $147,000 | 40% |
| Daniel Burkland | $247,000 | 78% |
| Scott Welch | $164,000 | 50% |
| Gaurav Passi | $140,000 | 50% |
| Michael Crane | $140,000 | 50% |
Guidance, Outlook, and Risks
The filing does not provide specific revenue or EBITDA guidance numbers, nor does it discuss general business risks or contingencies beyond the compensation plan mechanics. The document serves to disclose the specific metrics tied to executive cash bonuses for the fiscal year ending December 31, 2016.
Key Facts for Investor Verification
- Verify the specific revenue and adjusted EBITDA targets set for 2016, as the filing only describes the weighting and thresholds, not the absolute dollar amounts.
- Monitor quarterly earnings reports to assess if the company meets the 90% revenue threshold or the $400,000 adjusted EBITDA buffer required for any bonus payout.
- Note the high sensitivity of the CEO's compensation to overall company financial performance (100% weighting).
- Confirm the base salaries of the listed officers to validate the percentage calculations provided in the filing.