Business Context and Reporting Period
This Form 8-K was filed by Five9, Inc. on February 9, 2017. The report details the approval by the Compensation Committee of performance targets for the 2017 Bonus Program, which determines cash bonus awards for Section 16 officers for the fiscal year ending December 31, 2017.
Key Financial Metrics
The filing does not provide specific revenue, profit, cash flow, margin, debt, or liquidity figures for the company. It focuses exclusively on the structure of executive compensation and the performance metrics used to calculate bonuses.
Material Changes and Compensation Structure
The primary material event is the establishment of the 2017 Bonus Program. Key structural details include:
- Performance Weighting: For most officers, bonuses are weighted 75% on company financial performance and 25% on individual performance. The CEO's bonus is 100% based on company financial performance.
- Financial Metrics: Company performance is measured by revenue (80% weight) and adjusted EBITDA (20% weight).
- Thresholds: No cash payout occurs if revenue achievement is below 90% of the target or if adjusted EBITDA is more than $500,000 below the target.
- Caps: Revenue payouts can reach 150% of the target portion at 125% achievement. Adjusted EBITDA payouts can reach 180% of the target portion if the target is exceeded by $2,000,000.
- Penalty Clause: If actual adjusted EBITDA is more than $500,000 below the target, the maximum payout for the revenue target is capped at 100%.
Executive Target Bonuses
| Officer Name | Annual Target Bonus (USD) | % of Base Salary |
|---|---|---|
| Michael Burkland | $345,000 | 65% |
| Barry Zwarenstein | $165,235 | 45% |
| Daniel Burkland | $325,000 | 100% |
| Scott Welch | $164,000 | 50% |
| Gaurav Passi | $164,000 | 50% |
| Kevin Gavin | $135,000 | 50% |
Outlook and Risks
The filing does not contain general business outlook, risk factors, or contingencies beyond the specific financial thresholds required to trigger executive compensation. The document implies that the company has set specific, undisclosed revenue and adjusted EBITDA targets for 2017.
Investor Verification Checklist
- Verify the specific revenue and adjusted EBITDA targets for 2017, as these are referenced but not disclosed in this filing.
- Review the company's historical performance against similar targets to assess the likelihood of bonus payouts.
- Monitor future filings for actual 2017 financial results to determine if the $500,000 EBITDA threshold or 90% revenue threshold was met.
- Confirm if the EVP, Global Sales & Services role mentioned in the weighting section corresponds to a specific named officer in other filings.