Business Context and Reporting Period
This Form 8-K Current Report was filed by American Well Corporation on May 16, 2022. The filing discloses the approval of performance stock unit (PSU) grants to the Company's co-Chief Executive Officers, Dr. Ido Schoenberg and Dr. Roy Schoenberg, under the 2020 Equity Incentive Plan.
Key Financial Metrics
The filing does not provide specific financial metrics such as revenue, profit, cash flow, margins, debt, or liquidity. The document focuses exclusively on executive compensation arrangements.
Material Changes and Compensation Details
The Board approved PSU grants representing 100% of each co-CEO's annual long-term equity incentive award opportunity for 2022. As a condition of receipt, the co-CEOs agreed to forgo any other equity incentive awards for three years from the grant date.
- Target Award: 1,000,000 shares of Class A common stock per co-CEO.
- Performance Period: May 16, 2022, to May 16, 2025.
- Performance Metric: Sustained market capitalization growth over a rolling 30 trading-day period measured against the grant date market cap.
- Payout Range: 0% to 750% of the target level based on market cap milestones.
| % of Target Earned | Market Capitalization Milestone |
|---|---|
| 0% | Less than 133% of Grant Date Market Cap |
| 50% | At least 133% of Grant Date Market Cap |
| 100% | At least 167% of Grant Date Market Cap |
| 225% | At least 200% of Grant Date Market Cap |
| 350% | At least 233% of Grant Date Market Cap |
| 475% | At least 267% of Grant Date Market Cap |
| 600% | At least 300% of Grant Date Market Cap |
| 675% | At least 400% of Grant Date Market Cap |
| 750% | At least 500% of Grant Date Market Cap |
Vesting Schedule: Earned PSUs vest in tranches of 20% on the first anniversary, 20% on the second anniversary, and 60% on the third anniversary of the grant date, subject to continued service.
Guidance, Risks, and Contingencies
The filing outlines specific contingencies regarding the forfeiture or acceleration of awards:
- Termination: Unvested PSUs are forfeited upon termination, except in cases of death, disability, termination without "cause," or resignation with "good reason," which trigger vesting of earned PSUs and a 6-12 month tail period for unearned PSUs.
- Change in Control: Unearned PSUs may be earned based on transaction price, and earned but unvested PSUs will vest in full, subject to continued service through the transaction date.
- Expiration: Unearned PSUs are cancelled and forfeited at the end of the Performance Period.
The filing does not contain forward-looking financial guidance or management commentary on operational outlook.
Key Facts for Investor Verification
- Verify the Company's market capitalization on the grant date (May 16, 2022) to calculate the specific dollar thresholds required for the 133% to 500% performance milestones.
- Confirm the total number of shares authorized under the 2020 Equity Incentive Plan to assess the dilution impact of the potential 750% payout (1.5 million shares per CEO).
- Review the full text of the PSU award agreement, which is referenced as an exhibit to the upcoming Form 10-Q for the quarter ended June 30, 2022.
- Monitor the Company's stock price volatility over rolling 30-day periods, as this directly determines the earnability of the awards.