UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

____________________

SCHEDULE 14A
____________________

Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934

Filed by the Registrant

Filed by a Party other than the Registrant

Check the appropriate box:

Preliminary Proxy Statement

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

Definitive Proxy Statement

Definitive Additional Materials

Soliciting Material under §240.14a-12

LivePerson, Inc.
(Name of Registrant as Specified In Its Charter)

___________________________________________________________________
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check all boxes that apply):

No fee required

Fee paid previously with preliminary materials

Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11

 

July 21, 2022

Dear LivePerson Stockholders:

On behalf of the Board of Directors of LivePerson, Inc., I cordially invite you to attend our 2022 Annual Meeting of Stockholders (including any adjournments or postponements thereof, the “Annual Meeting”), which is scheduled to be held via a live audio webcast on August 4, 2022 at 10:00 a.m. Eastern Daylight Time. More details on the Annual Meeting can be found in the enclosed Notice for the Annual Meeting and Proxy Statement.

We have a number of important proposals for your consideration at the Annual Meeting, including: (i) to elect three Class I directors to serve until the Company’s 2025 Annual Meeting of Stockholders, or until such directors’ successors shall have been duly elected and qualified; (ii) to ratify the appointment of BDO USA, LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2022; (iii) to approve, on an advisory basis, the compensation of the Company’s named executive officers; and (iv) to act upon such other business as may properly come before the Annual Meeting or any adjournments or postponements thereof. When determining the Board’s recommendations on the director nominees and other matters before the Annual Meeting, the Board has carefully considered the best interests of all our stockholders. The Board recommends a vote on the enclosed proxy card “FOR ALL” of the Board’s director nominees to be elected at the Annual Meeting and “FOR” each of Proposal Nos. 2 and 3.

YOUR VOTE IS VERY IMPORTANT. Whether or not you plan to attend the Annual Meeting, we encourage you to vote TODAY so that your voice is heard by voting by Internet, by telephone or by dating, signing, and returning the enclosed proxy card. Voting your shares prior to the Annual Meeting will not affect your right to attend or vote at the Annual Meeting, but will ensure that your vote is counted if you are unable to attend. Only your latest dated proxy card will count, and any proxy may be revoked at any time prior to its exercise at the Annual Meeting.

We look forward to seeing you at the virtual Annual Meeting.

Sincerely,

 

Robert P. LoCascio
Chairman of the Board and
Chief Executive Officer

 

 

LivePerson, Inc.

www.liveperson.com

________________________________________

Notice of Annual Meeting of Stockholders

________________________________________

August 4, 2022
10:00 a.m. Eastern Daylight Time

NOTICE IS HEREBY GIVEN that the 2022 Annual Meeting of Stockholders (including any adjournments or postponements thereof, the “Annual Meeting”) of LivePerson, Inc., a Delaware corporation (the “Company”), is scheduled to be held on August 4, 2022 at 10:00 a.m. Eastern Daylight Time. The Annual Meeting will be held via a live audio webcast at www.cesonlineservices.com/lpsn22_vm. The Annual Meeting will be held for the following purposes, as more fully described in the Proxy Statement accompanying this Notice:

(1)   Election of three Class I directors to serve until the Company’s 2025 Annual Meeting of Stockholders, or until such directors’ successors shall have been duly elected and qualified;

(2)   Ratification of the appointment of BDO USA, LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2022;

(3)   Advisory approval of the compensation of the Company’s named executive officers; and

(4)   Transaction of such other business as may properly come before the meeting, including any adjournments or postponements thereof.

Only stockholders of record at the close of business on June 10, 2022 (the “record date”) are entitled to notice of and to vote at the Annual Meeting. Such stockholders are urged to promptly submit the enclosed proxy card, even if their shares were sold after the record date.

We have adopted a virtual format with a live audio webcast for our Annual Meeting to provide a consistent experience for all stockholders. You are entitled to attend the Annual Meeting only if you were a stockholder as of the close of business on the record date or hold a valid proxy for such a stockholder for the Annual Meeting. To participate in the Annual Meeting, stockholders must register at www.cesonlineservices.com/lpsn22_vm by August 3, 2022 at 10:00 a.m. Eastern Daylight Time. Participants will be required to enter the control number found on their proxy card or voting instruction form or Notice of Internet Availability of Proxy Materials.

 

THE BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR ALL” OF THE BOARD’S NOMINEES TO BE ELECTED AND “FOR” PROPOSAL NOS. 2 AND 3 USING THE ENCLOSED PROXY CARD.

By Order of the Board of Directors

 
   

 
   

Robert P. LoCascio
Chairman of the Board and
Chief Executive Officer

 

New York, New York

July 21, 2022

This Notice of Annual Meeting and the enclosed Proxy Statement and proxy card are first being mailed on or about July 21, 2022 to stockholders entitled to notice of and to vote at the Annual Meeting.

Important Notice Regarding the Availability of Proxy Materials for
the Annual Meeting of Stockholders Scheduled to Be Held on August 4, 2022

This Notice of Annual Meeting of Stockholders, the accompanying Proxy Statement and the Company’s Annual Report for the fiscal year ended December 31, 2021 are available free of charge at www.viewourmaterial.com/LPSN.

 

LIVEPERSON, INC.

____________________________________

Proxy Statement

____________________________________

 

At a Glance

2

Proxy Summary

5

Questions and Answers

8

Proposal No. 1 – Election Of Directors

14

Our Board of Directors and Corporate Governance

15

Director Compensation

29

Proposal No. 2 – Ratification of Appointment of Independent Registered Public Accounting Firm

31

Audit Committee Report

33

Proposal No. 3 – Advisory Approval of the Compensation of Our Named Executive Officers

35

Executive Compensation

37

Ownership of Securities

65

Certain Relationships and Related Transactions

68

Other Information

70

In this Proxy Statement, the terms “LivePerson,” “the Company,” “we,” “us,” and “our” refer to LivePerson, Inc., a Delaware corporation, and its subsidiaries unless the context otherwise requires; the “Board” refers to the Company’s Board of Directors; the “Annual Meeting” refers to the Company’s 2022 Annual Meeting of Stockholders, including any adjournments or postponements thereof; and all references to “present” or “presence” refer to virtual presence at the Annual Meeting.

 

At a Glance

AT A GLANCE

LivePerson is the market leader in Conversational Artificial Intelligence with a best-in-class platform used by thousands of the world’s top brands to better understand customer intents, connect across channels and deliver meaningful outcomes.

2021 Financial and Strategic Performance Highlights

Delivered strong financial performance in 2021. Reflecting the strength of our core conversational AI platform and expansion of our customer base, in 2021, our revenue grew 28% to $469.6 million, setting a new record for the company. We drove total messaging volume growth by nearly 50%, while our focus on profitable and leverageable growth enabled us to achieve an adjusted EBITDA of $29.1 million.

Accelerated the momentum of our core AI platform. We continued to execute our strategy of becoming one of the leading AI and automation companies in the world. In 2021, AI-powered messaging volume increased 60% year-over-year with our AI solutions for customer care and commerce powering approximately 75% of interactions across our platform and entire businesses across retail, healthcare, financial services, travel and hospitality sectors.

Unlocked new growth opportunities in healthcare vertical. Expanding upon our traction in the healthcare vertical for digital customer care, we leveraged our technology and innovation capabilities to pursue brand-to-employee solutions in response to client demand, unlocking additional go-forward opportunities in the healthcare sector for digital solutions on our platform.

Completed acquisitions of VoiceBase and Tenfold to deliver integrated voice, digital and AI offerings in response to market demand. These acquisitions are enabling us to meet client demand for integrated voice and digital engagement solutions, analytics and AI, and are opening new opportunities for strategic relationships to expand our indirect distribution capabilities.

Awards and Recognitions

LivePerson regularly recognized by premier technology publications for its leadership in innovation in Artificial Intelligence, and by its peers, customers and employees for its cutting-edge technology and solutions, top management and outstanding work environment.

Fast Company

2022 #1 Most Innovative AI Company in the World
#22 Overall Most Innovative Company

Built In

2022 Best Places to Work

Stevie

2022 Gold Stevie Award for Best Contact Center Solution

Quadrant

2022 Spark Matrix: Digital-First Customer Service Solutions Leader

Newsweek

2021 Top 100 Most Loved Workplaces

Inc.

2021 Best-Led Companies List

Digiday

2021 Best Technology for eCommerce Site

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LIVEPERSON, INC.

 

At a Glance

Corporate Responsibility

We believe that operating our company in an environmentally and socially responsible manner will help drive the long-term growth of our business. Our social and environmental initiatives are an integral part of how we operate and are intended to foster a culture where our employees are proud of where they work.

   We are committed to Ethical AI, recognizing the rapid growth of AI capabilities, and its susceptibility to incorporating the personal and unconscious biases of its creators.

   We were a founding member and continue to sponsor a non-profit, EqualAI, that brings together leaders across business, technology and academia to shine a light on this important issue and create a new set of best practices for organizations leveraging AI to ensure equal representation. More information is available at www.EqualAI.org.

   Our Curiously Human digital experiences are built on ethical AI principles integrated throughout the full platform development, enhancement and testing cycle to deliver the most authentically empathetic AI at scale that enables brands to build meaningful and personalized connections with their customers free of bias and discrimination.

   As a fully “remote first” company, LivePerson has been able to largely eliminate the need for office space and employee commutes as well as their associated carbon footprints.

   We offer an option to all our employees to work in an office setting several days a week through our partnership with WeWork. We chose WeWork in part due to their commitment to become operationally carbon neutral, prioritization of renewable energy sources and focus on sustainable resource use. According to the Carbon Fund, WeWork office spaces are on average 2.5x more efficient than typical office spaces. Employees in our Seattle, Washington and Herzliya, Israel offices have access to rented workspaces with high-energy efficiency appliances as well as full recycling programs, water bottle refill stations and compositing initiatives.

   We maintain a computer equipment recycling program.

   In making procurement decisions and partnering with third-party data centers, we have prioritized selection of third-party service providers that demonstrate good stewardship of the environment and lead in data center sustainability by taking steps to minimize our carbon footprint and reduce our energy consumption. Our primary data center operation partners are leaders in data center sustainability, who committed to either operating on carbon-free energy or being climate-neutral by 2030, invest in resource conservation strategies and innovation, scale renewable energy purchasing, and actively manage their value chain emissions.

 

Among the many leading practices, our primary third-party data centers:

w  use adaptive control systems that reduce power consumption and increase cooling capacity through active airflow management;

w  adhere to ASHRAE thermal guidelines to reduce power for cooling;

w  implement cold/hot aisle containment that lowers energy consumption and enables more efficient cooling by using physical barriers to reduce the mixing of cold air in data center supply aisles with the hot air in exhaust aisles; and

w  maintain energy efficient lighting systems.

PROXY STATEMENT

 

3

 

At a Glance

In 2021, we continued to expand our Diversity, Equity and Inclusion initiatives, including the following:

   Hired a dedicated Global Head of Inclusion Strategy to advance diversity across our organization.

   Continued to diversify our talent pipelines, including the adoption of two diversity recruiting platforms.

   Conducted a series of recruiting events in the U.S. and EMEA to engage underrepresented talent.

   Had 60 mentors and mentees participating in a diversity mentorship program.

   Launched the “LivePerson Proud” LGBTQ+ employee resource group.

   Continued our Women in Technology Annual Summit for the 12th consecutive year, which included over 250 attendees from the LivePerson community to celebrate and discuss challenges facing women globally. The event included keynote speakers, panels and professional development workshops.

   Continued our Women in Technology Goal Crushing Program (“GCP”). GCP is an accelerated 16-week leadership and development program for emerging women leaders.

   Sponsored employees to attend diversity tech conferences, such as the Black Tech Conference.

Community Engagement

Mr. LoCascio founded FeedingNYC, an annual program of The Dream Big Foundation, a 501(c)(3) organization, shortly after September 11, 2001, in order to provide Thanksgiving meals to New York families in need. Feeding NYC began with a dozen volunteers from LivePerson who assembled a Thanksgiving-meal-in-a-box (a frozen turkey and all of the fixings) and delivered those meals to 40 families living in shelters in New York City. LivePerson has continued to support FeedingNYC over the past 20 years, with LivePerson employees and numerous third parties both volunteering their time and making financial contributions. To date FeedingNYC has hand-delivered approximately 90,000 Thanksgiving meals to families in need.

In 2022, a LivePerson employee from Poland launched an international organization called AID For Ukraine Foundation that brought together many employees across our global operations to volunteer their time and skills in an effort to connect refugees from Ukraine with available support resources and charity organizations. Our employees designed a free chatbot, or communications platform, using LivePerson’s Conversational AI that can be accessed from any device by scanning a QR code and which eliminates language barriers. By using the multilingual chatbot, refugees can learn about resources available to them—in their own language—ranging from transportation, education and medical support.

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LIVEPERSON, INC.

 

Proxy Summary

PROXY SUMMARY

This section highlights information contained in other parts of this Proxy Statement. We encourage you to review the entire Proxy Statement for more detail on these items, as well as our Annual Report to Stockholders for the fiscal year ended December 31, 2021 (the “2021 Fiscal Year”).

DATE AND TIME:

August 4, 2022 at 10:00 a.m. Eastern Daylight Time

PLACE:

The Annual Meeting will be held via a live audio webcast at www.cesonlineservices.com/lpsn22_vm. You are entitled to attend the Annual Meeting only if you were a stockholder as of the close of business on the record date or hold a valid proxy for such a stockholder for the Annual Meeting. To participate in the Annual Meeting, stockholders must register at www.cesonlineservices.com/lpsn22_vm by August 4, 2022 at 10:00 a.m. Eastern Daylight Time. Participants will be required to enter the control number found on their proxy card, voting instruction form or Notice of Internet Availability of Proxy Materials.

RECORD DATE:

Only stockholders of record at the close of business on June 10, 2022 are entitled to notice of and to vote at the Annual Meeting. Further information regarding voting rights and the matters to be voted upon at the Annual Meeting is presented in this Proxy Statement.

PROXY VOTING:

YOUR VOTE IS VERY IMPORTANT. Whether or not you plan to attend the Annual Meeting, we encourage you to vote TODAY so that your voice is heard by voting by Internet, by telephone or by dating, signing and returning the enclosed proxy card. Voting your shares prior to the Annual Meeting will not affect your right to attend or vote at the Annual Meeting, but will ensure that your vote is counted if you are unable to attend. See “Questions and Answers” beginning on page 8 of this Proxy Statement for more information on how to vote.

Matters to Be Voted On

Proposal
Number

Description

Board Recommendation

1

Election of Directors

FOR ALL of the
Board’s Nominees

 

To elect three Class I directors to serve until the Company’s 2025 Annual Meeting of Stockholders and until such directors’ successors shall have been duly elected and qualified.

 

2

Ratify Appointment of Independent Registered Public Accounting Firm

FOR

 

To ratify the appointment of BDO USA, LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2022.

 

3

Advisory Vote on the Compensation of our Named Executive Officers

FOR

 

To approve, on an advisory basis, the compensation of the Company’s named executive officers.

 

We will also transact any other business that may properly come before the Annual Meeting.

PROXY STATEMENT

 

5

 

Proxy Summary

Board Snapshot

The following table provides summary information about each director nominee and continuing directors.

Name(1)

Age

Director Since

Independent

Class(2)

Current Term Expires(2)

AC

CC

NCGC

SICC

Director Nominees*

                 

Ernest Cu

62

2021

Yes

I

2022

     

M

Jill Layfield

47

2016

Yes

I

2022

M

C

M

M

William G. Wesemann

65

2004

Yes

I

2022

M

M

C

M

Continuing Directors

                 

Peter Block

82

2010

Yes

II

2023

 

M

 

C

Fred Mossler

56

2017

Yes

II

2023

 

M

M

C

Kevin C. Lavan ¿

70

2000

Yes

III

2024

C

M

M

M

Robert P. LoCascio 

President and CEO

54

1995

No

III

2024

     

M

(1)         Under the Starboard Agreement, Peter Block, a current Class II director, will retire from the Board on or before the conclusion of the Annual Meeting. In addition, the Company has agreed to appoint at least two directors following the Annual Meeting pursuant to the process set forth in the Starboard Agreement (as defined below). For more information regarding the Starboard Agreement, see “Our Board of Directors and Corporate Governance—Starboard Agreement” beginning on page 20.

(2)         Pursuant to the Starboard Agreement, the Board will take all necessary actions promptly after the conclusion of the Annual Meeting and the appointment of the Vacancy Appointee (as defined below) to result in Class II of the Board being composed of three directors, none of whom is an Agreed Appointee. For more information regarding the Starboard Agreement, see “Our Board of Directors and Corporate Governance—Starboard Agreement” beginning on page 20.

Chairman of the Board

AC

Audit Committee

 

Lead Independent Director

CC

Compensation Committee

¿

Financial Expert

NCGC

Nominating and Corporate Governance Committee

C

Chairperson of Committee

SICC

Social Impact and Culture Committee

M

Member of the Committee

   

*

If elected, term will expire in 2025

   

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LIVEPERSON, INC.

 

Proxy Summary

Governance Policies and Practices Snapshot

In addition to a highly qualified, independent Board, we are committed to maintaining a corporate governance structure that provides strong oversight across the Company and promotes long-term stockholder value creation. Some key highlights of our Board and governance practices are set forth below:

Topic

 

Practice

Director Refreshment

Rigorous director selection and evaluation process focused on the skills and experience relevant to the Company’s future, factoring in diversity of gender, ethnicity, tenure, skills and experience

Director Independence

All directors except the CEO are independent

Audit, Compensation, and Nominating and Corporate Governance Committees are composed entirely of independent directors

Executive Sessions

Independent directors meet regularly without management

Stockholder Rights

Only one class of capital stock, which is entitled to one vote per share

ESG

Board-level oversight through the Nominating and Corporate Governance Committee and the Social Impact and Culture Committee

Executive and Non-Employee
Director Stock Ownership

Adopted robust stock ownership guidelines for all executive officers and non-employee directors, including prohibition on new pledging of stock

CEO equity beneficial ownership exceeds 20x base salary

Each named executive officer’s (“NEO”) beneficial ownership exceeds 5x base salary (excluding NEOs appointed in the past two years)

Each non-employee director’s beneficial ownership exceeds 5x annual cash retainer (excluding directors appointed in the past two years)

Director Compensation

Thorough benchmarking of director compensation against peers

Annual risk assessment of the Company’s compensation programs and policies

Board Self-Evaluations

Board and each committee must conduct an annual self-evaluation

Stockholder Engagement

Active and ongoing stockholder engagement program

Risk Oversight

Regular review of the Company’s risk profile, including risks associated with cybersecurity, human capital management, climate change and sustainability

Enterprise risk management program oversight

PROXY STATEMENT

 

7

 

Questions and Answers

Questions and Answers

Why am I receiving these materials?

This Proxy Statement, the enclosed proxy card, and the Company’s Annual Report to Stockholders are being furnished to stockholders in connection with the solicitation of proxies on behalf of the Board for the Annual Meeting.

What is included in these materials?

These materials include this Proxy Statement for the Annual Meeting, the enclosed proxy card, and our Annual Report to Stockholders, which includes our Annual Report on Form 10-K for the 2021 Fiscal Year. We are first mailing these materials to stockholders entitled to notice of and to vote at the Annual Meeting on or about July 21, 2022.

What is the purpose of the Annual Meeting?

For stockholders to vote on the following proposals:

1.    to elect three Class I directors to serve until the Company’s 2025 Annual Meeting of Stockholders and until such directors’ successors shall have been duly elected and qualified;

2.    to ratify the appointment of BDO USA, LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2022; and

3.    to approve on an advisory basis the compensation of the Company’s named executive officers.

We will also transact any other business that may properly come before the Annual Meeting.

How does the Board recommend I vote on these proposals?

The Board unanimously recommends that you vote on the enclosed proxy card:

    FOR ALL” of the Board’s nominees—Ernest Cu, Jill Layfield and William G. Wesemann—to be elected as Class I directors;

    FOR” the ratification of the appointment of BDO USA, LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2022; and

    FOR” the approval on an advisory basis of the compensation of the Company’s named executive officers.

Who is entitled to vote at the Annual Meeting?

Only stockholders of record of the Company’s common stock, par value $0.001 per share, at the close of business on June 10, 2022, the record date fixed for the Annual Meeting (the “record date”), are entitled to notice of and to vote at the Annual Meeting. On the record date, there were 74,662,897 shares of the Company’s common stock outstanding. Each stockholder is entitled to one vote for each share of common stock held by such stockholder on the record date. Stockholders may not cumulate votes in the election of directors.

Why should I participate in voting the shares I own?

YOUR VOTE IS VERY IMPORTANT. Voting your shares is important to ensure that you have a say in the governance of the Company. Please review this Proxy Statement and follow the instructions on the enclosed proxy card to vote your shares. We hope you will exercise your rights and fully participate as a stockholder in our future.

8

 

LIVEPERSON, INC.

 

Questions and Answers

What is the difference between holding shares as a stockholder of record and as a beneficial owner?

If your shares are registered directly in your name with our transfer agent, Transfer Trust Company, N.A., you are considered the stockholder of record with respect to those shares, and these materials have been sent directly to you by us. As a stockholder of record, you are entitled to vote your shares in person at the Annual Meeting or by proxy as described below.

If your shares are held in a stock brokerage account or by a bank or other nominee, you are considered a “street name” stockholder. These materials were forwarded to you by your broker, bank or other nominee who is considered, with respect to those shares, the stockholder of record. If your shares are held in “street name,” you will receive voting instructions from your broker, bank or other nominee, as described below.

How can I vote my shares if I am a stockholder of record?

Except as provided below with respect to stockholders who hold shares through a member of the Tel Aviv Stock Exchange (“TASE”) and intend to vote their shares, there are four ways a stockholder of record can vote:

        By Internet: You may vote over the Internet at www.cesonlineservices.com/lpsn22_vm by following the instructions on the enclosed proxy card.

        By Mail: You may sign, date and return the enclosed proxy card in the postage-paid envelope provided.

        By Telephone: You may vote by telephone by following the instructions provided on the enclosed proxy card.

    At the Annual Meeting: You may vote your shares electronically at the Annual Meeting. Please follow the instructions for attending the Annual Meeting and voting during the meeting posted at www.cesonlineservices.com/lpsn22_vm. All votes must be received before the polls close during the Annual Meeting.

Stockholders who hold shares through a member of the TASE and intend to vote their shares must deliver to the Company’s Israeli counsel, Yigal Arnon & Co., c/o Amira Brizel, 1 Azrieli Center, Tel Aviv, Israel, 6702101 (email: amriab@arnon.co.il) an ownership certificate confirming their ownership of the Company’s common stock on the record date. Such certificate must be issued by a member of the TASE, as required by the Israeli Companies Regulations (Proof of Ownership of Shares for Voting at General Meeting) 2000, as amended. Each such stockholder is entitled to receive the ownership certificate at the branch of the TASE member or by mail to such stockholder’s address (in consideration of mailing fees only), if the stockholder so requests. Such a request should be made promptly upon receipt of this Proxy Statement and should be made for a particular securities account. Stockholders who wish to vote are obliged to complete, sign, date and return the proxy card in accordance with the instructions indicated thereon along with their ownership certificate to the address of Company’s Israeli counsel indicated above no later than 5:00 p.m. (Israel time) on August 2, 2022.

The form of proxy card for stockholders who hold shares through a member of the TASE is available on the websites: https://www.magna.isa.gov.il and https://maya.tase.co.il.

YOUR VOTE IS VERY IMPORTANT. Even if you plan to attend the Annual Meeting, we recommend that you also use the enclosed proxy card to vote by telephone, by Internet or by signing, dating and returning the proxy card in the postage-paid envelope provided so that your vote will be counted if you are unable to attend the Annual Meeting.

How can I vote my shares if I am a street name stockholder?

If your shares are held in “street name” (that is, held for your account by a broker, bank or other nominee), you will receive voting instructions from your broker, bank or other nominee. You must follow these instructions in order for your shares to be voted. Street name stockholders should generally be able to vote by telephone, by Internet or by signing, dating and returning a voting instruction form. Your broker is required to vote those shares in accordance with your instructions. However, the

PROXY STATEMENT

 

9

 

Questions and Answers

availability of telephone and Internet voting will depend on the voting process of your broker, bank or other nominee. If you are a street name stockholder, you may not vote your shares by ballot at the Annual Meeting unless you obtain a legal proxy from your broker, bank or other nominee.

If I submit a proxy card, how will it be voted?

If the enclosed proxy card is properly signed, dated and returned, the shares represented thereby will be voted at the Annual Meeting in accordance with the instructions specified thereon. If you are a stockholder of record of shares of our common stock and if you indicate when voting through the Internet that you wish to vote as recommended by our Board, or if you sign and return a proxy card without giving specific voting instructions, then Robert P. LoCascio, John Collins and Monica L. Greenberg, the proxy holders designated by our Board, who are officers of our Company, will vote your shares in the manner recommended by the Board on all matters presented in this Proxy Statement and as the proxy holders may determine in their discretion with respect to any other matters properly presented for a vote at the Annual Meeting.

Specifically, if you return a validly executed proxy card without indicating how your shares should be voted on a matter and you do not revoke your proxy, your proxy will be voted:

    FOR ALL” of the Board’s nominees—Ernest Cu, Jill Layfield and William G. Wesemann—to be elected as Class I directors (Proposal No. 1);

    FOR” the ratification of the appointment of BDO USA, LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2022 (Proposal No. 2); and

    FOR” the approval on an advisory basis of the compensation of the Company’s named executive officers (Proposal No. 3).

The Board is not aware of any matters that are expected to come before the Annual Meeting other than those described in this Proxy Statement.

Can I change my vote or revoke my proxy?

Stockholders of Record

If you are a stockholder of record, except as provided below with respect to stockholders who hold shares through a member of the TASE, you can change your vote or revoke your proxy before it is exercised at the Annual Meeting by:

    entering a new vote by Internet or by telephone on a later date;

    completing and returning a later-dated proxy card;

    sending a written notice of revocation to LivePerson, Inc., 530 Seventh Ave, Floor M1, New York, New York 10018, Attention: Corporate Secretary; or

    attending and voting at the Annual Meeting (although attendance at the Annual Meeting will not, by itself, revoke a proxy).

TASE Stockholders

If you are a stockholder who holds shares through a member of the TASE and wish to revoke or change your proxy card, you must file a notice of revocation or another signed proxy card with the Company’s Israeli counsel no later than 5:00 p.m. (Israel time) on August 2, 2022.

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LIVEPERSON, INC.

 

Questions and Answers

Street Name Stockholders

If you are a street name stockholder, your broker, bank or other nominee can provide you with instructions on how to change your vote.

What should I do if I receive more than one proxy card or set of proxy materials from the Company?

Your shares may be owned through more than one brokerage or other share ownership account. In order to vote all of the shares that you own, you must vote each proxy card you receive in order to vote with respect to each account by telephone, by Internet, or by signing, dating and returning each proxy card you receive in the postage-paid envelope provided.

Can I attend the Annual Meeting?

We have adopted a virtual format with a live audio webcast for our Annual Meeting to provide a consistent experience for all stockholders. The Annual Meeting will be held via a live audio webcast at www.cesonlineservices.com/lpsn22_vm. You are entitled to attend the Annual Meeting only if you were a stockholder as of the close of business on the record date or hold a valid proxy for such a stockholder for the Annual Meeting. To participate in the Annual Meeting, stockholders must register at www.cesonlineservices.com/lpsn22_vm by August 3, 2022 at 10:00 a.m. Eastern Daylight Time. Participants will be required to enter the control number found on their proxy card, voting instruction form or Notice of Internet Availability of Proxy Materials. If you encounter any technical difficulties accessing the virtual Annual Meeting, please call the technical support number in the reminder email sent the day before the meeting.

What constitutes a quorum at the Annual Meeting?

The presence, virtually or by proxy, of the holders of 50% of the stock outstanding and entitled to vote at the Annual Meeting is necessary to constitute a quorum in connection with the transaction of business at the Annual Meeting. Without a quorum, no business may be transacted at the Annual Meeting. All votes will be tabulated by the independent inspector of election appointed for the Annual Meeting, who will separately tabulate “for” and “against” votes, abstentions, withhold votes and broker non-votes (i.e., proxies from brokers, bankers or other nominees indicating that such persons have not received instructions from the beneficial owner or other persons entitled to vote shares as to a matter with respect to which the broker, bank or other nominee does not have discretionary power to vote). Abstentions, withhold votes and broker non-votes are counted as “present” for quorum purposes.

PROXY STATEMENT

 

11

 

Questions and Answers

What is the voting requirement to approve each of the proposals?

So long as there is a quorum, the voting requirements for the proposals to be presented at the Annual Meeting and the effects of abstentions, withhold votes and broker non-votes are as follows:

Proposal

Vote Required

Effect of Abstentions, Withhold Votes and
Broker Non-Votes

Election of directors

 

Plurality of votes cast, meaning that the three nominees who receive the most “for” votes will be elected to the Board

 

Withhold votes have no effect on the outcome of the election of directors. Broker discretionary voting is not permitted, and broker non-votes have no effect on the outcome of this proposal

Ratification of the appointment of the independent registered public accounting firm

 

Majority of the stock having voting power present in person or represented by proxy

 

An abstention has the same effect as a vote against the proposal. Broker discretionary voting is not expected to be permitted with respect to this proposal, and broker non-votes will have no effect on the outcome of this proposal

Approval of the compensation of the Company’s named executive officers

 

Majority of the stock having voting power present in person or represented by proxy

 

An abstention has the same effect as a vote against the proposal. Broker discretionary voting is not permitted, and broker non-votes have no effect on the outcome of this proposal

Will my shares be voted if I do nothing?

Stockholders of Record

If you are a stockholder of record (i.e., you own your shares directly on the books of our transfer agent and not through a broker) and you do not cast your vote, no votes will be cast on your behalf on any of the items of business at the Annual Meeting.

TASE Stockholders

If you are a stockholder who holds stock through a member of the TASE and intend to vote your shares, you are obliged to return a complete signed and dated proxy card along with a certificate of ownership to the offices of Israeli counsel to the Company, Yigal Arnon & Co., c/o Amira Brizel, 1 Azrieli Center, Tel Aviv, Israel, 6702101 (email: amriab@arnon.co.il), no later than 5:00 p.m. (Israel time) on August 2, 2022.

Street Name Stockholders

If you are a street name stockholder (i.e., your shares are registered in the name of a bank, broker or other nominee), the New York Stock Exchange rules applicable to brokers determine whether your bank, broker or other nominee may vote your shares in its discretion even if it does not receive voting instructions from you.

12

 

LIVEPERSON, INC.

 

Questions and Answers

Your bank, broker or other nominee is not entitled to vote your shares on “non-routine” items absent voting instructions from you, but may, in its discretion, either leave your shares unvoted or vote your shares on “routine” matters. The proposal to ratify the appointment of BDO USA, LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2022 (Proposal No. 2) is the only “routine” matter proposed to be presented at the Annual Meeting. Accordingly, your bank, broker or other nominee will be able to exercise discretionary authority on Proposal No. 2 if it does not receive voting instructions from you, and broker non-votes will occur as to each of the other proposals presented at the Annual Meeting, which are considered “non-routine” matters. Such broker non-votes will not affect the outcome of Proposal Nos. 1 and 3. However, we do not expect that your bank, broker or other nominee will be permitted to vote your shares with respect to any of the proposals to be voted on at the Annual Meeting unless you provide the bank, broker or other nominee with voting instructions.

YOUR VOTE IS VERY IMPORTANT. Whether or not you plan to attend the Annual Meeting, we encourage you to vote TODAY so that your voice is heard by voting by Internet, by telephone or by dating, signing and returning the enclosed proxy card. Voting your shares prior to the Annual Meeting will not affect your right to attend or vote at the Annual Meeting, but will ensure that your vote is counted if you are unable to attend. You can revoke your proxy at any time before the proxy or proxies you appointed cast your votes. If your bank, broker or other nominee is the holder of record of your shares (i.e., your shares are held in “street name”), you will receive voting instructions from such holder of record. You must follow these instructions in order for your shares to be voted. We urge you to instruct your bank, broker or other nominee, by following the instructions on the enclosed voting instruction form, to vote your shares in line with the Board’s recommendations on the voting instruction form.

Who will count the votes?

A representative of First Coast Results, Inc. will serve as the independent inspector of election (the “Inspector of Election”) for the Annual Meeting and, in such capacity, will count and tabulate the votes.

What happens if the Annual Meeting is adjourned?

In the event that a quorum is not present at the Annual Meeting, the stockholders present at the meeting, in person or represented by proxy, may adjourn the meeting until a quorum is present. The Chairman of the Board may also adjourn the Annual Meeting from time to time. Unless a new record date is fixed, your proxy will still be valid at an adjourned Annual Meeting and you will still be able to change or revoke your proxy until it is used to vote your shares.

Where can I find the voting results of the Annual Meeting?

We intend to announce preliminary voting results based on the advice of our proxy solicitor at the Annual Meeting. We also expect to disclose preliminary voting results based on the preliminary tabulation by the Inspector of Election on a Current Report on Form 8-K that we will file with the Securities and Exchange Commission (the “SEC”) within four business days after the Annual Meeting. We will report voting results based on the Inspector of Election’s final, certified report on a Current Report on Form 8-K that we will file with the SEC as soon as practicable.

Who can help answer any other questions I may have?

If you have any questions or require any assistance with voting your shares, or if you need additional copies of the proxy materials, please contact our proxy solicitor, MacKenzie Partners:

MacKenzie Partners, Inc.
1407 Broadway, 27th Floor
New York, NY 10018
Call
Toll-Free: (800) 322-2885
Email:
LPSN@mackenziepartners.com

PROXY STATEMENT

 

13

 

Proposal No. 1 Election of Directors

Proposal No. 1
Election of Directors

The Company’s Fourth Amended and Restated Certificate of Incorporation, as amended (the “Charter”), provides for a classified Board, consisting of three classes of directors with staggered three-year terms, with each class consisting, as nearly as possible, of one-third of the total number of directors. At the annual meeting of stockholders in the year in which the term of a class of directors expires, director nominees in such class will stand for election to three-year terms. With respect to each class, a director’s term will be subject to the election and qualification of such director’s successor, or the earlier death, resignation or removal of such director.

The term of office for Mr. Cu, Ms. Layfield and Mr. Wesemann, each of whom is a Class I director, expires at the Annual Meeting. The Nominating and Corporate Governance Committee has unanimously recommended that the Board nominate, and the Board has unanimously nominated, Mr. Cu, Ms. Layfield, and Mr. Wesemann to be re-elected as Class I directors to serve until the Company’s 2025 Annual Meeting of Stockholders and until such directors’ successors shall have been duly elected and qualified.

Each of Mr. Cu, Ms. Layfield and Mr. Wesemann has agreed to be named as a nominee and to continue to serve as a director, if elected, and management has no reason to believe that they will be unavailable to serve. If any of Mr. Cu, Ms. Layfield or Mr. Wesemann is unable or declines to serve as a director at the time of the Annual Meeting, properly submitted GOLD proxies will be voted by the proxy holders set forth thereon for any substitute nominee who may be designated by the Board. If any substitute nominees are designated, we will file an amended proxy statement that, as applicable, identifies the substitute nominees, discloses that such nominees have consented to being named in the amended proxy statement and agreed to serve if elected, and includes certain biographical and other information about such nominees required by SEC rules. Votes authorized on the enclosed proxy card may be cast for or withheld from the nominees for election as directors listed thereon as a group, or for or withheld from each individual nominee. Unless otherwise instructed, the proxy holders on the Company’s proxy card will vote the proxies received by them “FOR ALL of Mr. Cu, Ms. Layfield and Mr. Wesemann to be elected.

Pursuant to the terms of the Starboard Agreement, if re-elected as Class I directors at the Annual Meeting, Mr. Cu, Ms. Layfield, and/or Mr. Wesemann may resign in order to be appointed to a different class. For more information regarding the Starboard Agreement, see “Our Board of Directors and Corporate Governance—Starboard Agreement” beginning on page 20.

Required Vote

The Class I directors shall be elected by the affirmative vote of a plurality of the shares of the common stock present virtually or represented by proxy at the Annual Meeting and entitled to vote in the election of directors. This means that the three director nominees who receive the most votes will be elected to the Board. Any shares not voted for a particular nominee, whether as a result of a withhold vote or a broker non-vote, will not be counted in such nominee’s favor and will have no effect on the outcome of the vote.

The Board unanimously recommends a vote on the proxy card “FOR ALL” of Mr. Cu, Ms. Layfield and Mr. Wesemann to be elected as Class I directors.

14

 

LIVEPERSON, INC.

 

Our Board of Directors and Corporate Governance

Our Board of Directors and Corporate Governance

Board Highlights

We have a Board composed of highly experienced and professionally accomplished directors with diverse backgrounds, viewpoints, attributes, tenures and experiences. Our directors’ varied perspectives enable the Board to provide effective oversight of management, drive accountability to our stockholders and add significant value to the strategic decisions made by the Company. They bring experience as entrepreneurs, technologists and advisors; leverage relevant industry expertise, such as insight into the customer perspective, call center operations, e-commerce, organization dynamics and corporate culture development; and have an array of operational, financial and marketing skills. In addition, the Board seeks a diversity of tenures to ensure directors with fresh external perspectives are complemented by those with a long-term understanding of our business.

Board Snapshot

Name (1)

Age

Director
Since

Independent

Class (2)

Current
Term
Expires
(2)

AC

CC

NCGC

SICC

Director Nominees*

                 

Ernest Cu

62

2021

Yes

I

2022

     

M

Jill Layfield

47

2016

Yes

I

2022

M

C

M

M

William G. Wesemann

65

2004

Yes

I

2022

M

M

C

M

Continuing Directors

                 

Peter Block

82

2010

Yes

II

2023

 

M

 

C

Fred Mossler

56

2017

Yes

II

2023

 

M

M

C

Kevin C. Lavan ¿

70

2000

Yes

III

2024

C

M

M

M

Robert P. LoCascio 

President and CEO

54

1995

No

III

2024

     

M

(1)         Under the Starboard Agreement, Mr. Block, a current Class II director, will retire from the Board on or before the conclusion of the Annual Meeting. In addition, the Company has agreed to appoint at least two directors following the Annual Meeting pursuant to the process set forth in the Starboard Agreement. For more information regarding the Starboard Agreement, see “Our Board of Directors and Corporate Governance—Starboard Agreement” beginning on page 20.

(2)          Pursuant to the Starboard Agreement, the Board will take all necessary actions promptly after the conclusion of the Annual Meeting and the appointment of the Vacancy Appointee to result in Class II of the Board being composed of three directors, none of whom is an Agreed Appointee. For more information regarding the Starboard Agreement, see “Our Board of Directors and Corporate Governance—Starboard Agreement” beginning on page 20.

Chairman of the Board

AC

Audit Committee

 

Lead Independent Director

CC

Compensation Committee

¿

Financial Expert

NCGC

Nominating and Corporate Governance Committee

C

Chairperson of Committee

SICC

Social Impact and Culture Committee

M

Member of the Committee

   

*

If elected, term will expire in 2025

   

PROXY STATEMENT

 

15

 

Our Board of Directors and Corporate Governance

Board Diversity Matrix

Total Number of Directors: 7

       

Part I: Gender Identity

Female

Male

Non-Binary

Did Not
Disclose Gender

Directors

1

6

0

0

Part II: Demographic Background

       

African American or Black

0

0

0

0

Alaskan Native or Native America

0

0

0

0

Asian

0

1

0

0

Hispanic or Latinx

0

0

0

0

Native Hawaiian or Pacific Islander

0

0

0

0

White

1

5

0

0

Two or More Races or Ethnicities

0

0

0

0

LGBTQ+

0

0

0

0

Did Not Disclose Demographic Background

0

0

0

0

Board Skills Matrix

The following matrix highlights the mix of key skills and experiences of our director nominees and continuing directors. This matrix is intended to depict notable areas of focus for each director, and not having a mark does not mean that a particular director does not possess that skill or experience. Nominees have developed competencies in these skills through education, direct experience and oversight responsibilities. Additional biographical information on each nominee is set out below.

Director Nominees

 

Continuing Directors

Name (1)

Ernest
Cu

Jill
Layfield

William G.
Wesemann

 

Peter
Block

Fred
Mossler

Kevin C.
Lavan

Robert P.
LoCascio

C-Suite / Senior Leadership Experience

 

Corporate Strategy

 

Organizational Development

 

Independence

 

 

Financial Expertise

   

Cross-Industry Customer Insights

   

Human Capital Management

 

 

Product Innovation

   

 

Technology Expertise

     

Strategic Transaction / M&A

   

E-Commerce / Sales

 

 

 

(1)         Under the Starboard Agreement, Mr. Block, a current Class II director, will retire from the Board on or before the conclusion of the Annual Meeting. In addition, the Company has agreed to appoint at least two directors following the Annual Meeting pursuant to the process set forth in the Starboard Agreement. For more information regarding the Starboard Agreement, see “Our Board of Directors and Corporate Governance—Starboard Agreement” beginning on page 20.

16

 

LIVEPERSON, INC.

 

Our Board of Directors and Corporate Governance

Director Nominee and Director Biographies

The following is a brief biographical summary of the experience of our directors and director nominees.

Director Nominees

Ernest Cu

Class I Director Nominee

Director since April 2021

Independent

Committees: Social Impact and Culture Committee

Mr. Cu brings a long history of executive leadership experience, having served as Executive Director, President and Chief Executive Officer of Globe Telecom, Inc. (PSE: GLO), a major publicly traded telecommunications provider in the Philippines, since April 2009, and as President and CEO of SPi Technologies from 1997 to 2008. He is considered to be one of the founding originators of the business process outsourcing business model in the Philippines in recognition of his immense contributions to the telecommunications industry. Mr. Cu also brings valuable finance experience as a former executive at Bank of America and former director of Maybank ATR Kim Eng Financial Corp. Mr. Cu has extensive experience as a director of a variety of private companies, including AF Payments (Beep), a financial services company. Mr. Cu has previously been recognized by Ernst & Young as “ICT Entrepreneur of the Year,” and, on two occasions each, was recognized by Finance Asia as the “Philippines’ Best CEO” and by Frost & Sullivan as “CEO of the Year.” He was also recognized as one of the 100 most influential telecom leaders worldwide by London-Based Global-Telecoms Business Magazine’s Power 100 for five consecutive years. Mr. Cu holds a B.S. degree in Industrial Management Engineering from De La Salle University in Manila and an M.B.A. degree from the J.L. Kellogg Graduate School of Management at Northwestern University.

Mr. Cu brings to the Board a global perspective in areas such as global contact centers, infrastructure modernization, sustainability and product innovation, with particular expertise in telco communications and consumer offerings, and extensive expertise in financial and operational management and business transformation.

PROXY STATEMENT

 

17

 

Our Board of Directors and Corporate Governance

Jill Layfield

Class I Director Nominee

Director since November 2016

Lead Independent Director

Committees: Compensation Committee (Chair), Audit Committee, Nominating and Corporate Governance Committee, and Social Impact and Culture Committee

Ms. Layfield co-founded Tamara Mellon, a digitally-native, luxury retail company, where she served as CEO from July 2016 to December 2021 and assisted in launching the first-ever digitally-led, direct-to-consumer luxury footwear brand. From November 2004 until July 2016, Ms. Layfield served in various roles at Backcountry.com, including as President and CEO from January 2011 to December 2015. During her time at Backcountry.com, she grew the company from $25 million to $515 million in revenue and successfully sold the business to TSG Consumer Partners for $350 million. Ms. Layfield also held various marketing positions at several Silicon Valley companies, including Shutterfly, a photography and image sharing company; Cisco Systems, a developer, manufacturer and seller of technology and telecommunications equipment; Infogear, a start-up focused on marketing for internet appliances; and 8x8, a manufacturer of videoconference products and a VOIP service provider. Ms. Layfield currently sits on the board of directors for The Orvis Company. Additionally, Ms. Layfield previously sat on the boards of directors of Camber Outdoors and SmartPak Equine. Ms. Layfield received a B.A. degree in Communications—Journalism from Santa Clara University. Ms. Layfield is recognized as an innovator and industry expert in combining organizational change and advanced technologies to retool customer care for the digital, mobile era.

Ms. Layfield brings to the Board a deep experience in the retail and technology sector, operational expertise and unique expertise transforming customer experience and forging meaningful, high-quality connections between brands and consumers.

William G. Wesemann

Class I Director Nominee

Director since November 2004

Independent

Committees: Nominating and Corporate Governance Committee (Chair), Compensation Committee, Audit Committee, and Social Impact and Culture Committee

Mr. Wesemann brings experience as an executive, board member and investor in various technology companies. Mr. Wesemann has been an independent consultant and an independent investor since 2002 in the software and consumer services industries. In addition to his role as a member of the Board, Mr. Wesemann has served on the board of directors of Aclarion, Inc. (Nasdaq: ACON), a medical SAAS company that listed on Nasdaq in 2022, since 2016 and has served as its Lead Independent Director since 2022. He also serves on the boards of directors of several privately-held companies, including STATIONHEAD, a social audio company, and Mylio, a photo management company. From March 2016 until January 2019, Mr. Wesemann was CEO of LARC Networks Inc., a communication, security and privacy technology developer. Earlier in his career, Mr. Wesemann was CEO of NextPage, Inc., a provider of document management systems, CEO of netLens Inc., a peer-to-peer platform for creating distributed applications that was acquired by NextPage, and Vice President of Sales of Genesys Telecommunications Laboratories, Inc., a leader in computer-telephony integration. Mr. Wesemann received a B.A. degree from Glassboro State College (now called Rowan University).

Mr. Wesemann brings to the Board notable technology, software and sales experience, in addition to extensive CEO, management and board experience at public and private software and technology companies.

18

 

LIVEPERSON, INC.

 

Our Board of Directors and Corporate Governance

Continuing Directors

Peter Block

Class II Director

Director since November 2010

Independent

Committees: Compensation Committee and Social Impact and Culture Committee

(Co-Chair)

Mr. Block brings experience in management consulting and organizational development, and has been President of Peter Block Inc., a management consulting group, and a partner in Designed Learning, a training company that offers both in-person and virtual workshops designed by Mr. Block to build organizational development skills, since 1997. Mr. Block is also a best-selling author of several books about organizational dynamics, community and accountability. Among other awards, Mr. Block has received the Organizational Development Network’s Lifetime Achievement Award, the American Society for Training and Development Award for Distinguished Contributions, and the Association for Quality and Participation President’s Award. He is also a member of Training Magazine’s HRD Hall of Fame. Mr. Block holds a B.S. degree in Industrial Administration from the University of Kansas and an M.S. degree in Industrial Administration from Yale University.

Mr. Block brings to the Board significant expertise on hiring, enabling and retaining talent, building high-performance internal teams and maintaining a diverse, inclusive and engaged workforce and unique perspective on organizational design.

Under the Starboard Agreement, Mr. Block will retire from the Board on or before the conclusion of the Annual Meeting.

Fred Mossler

Class II Director

Director since May 2017

Independent

Committees: Compensation Committee, Nominating and Corporate Governance Committee, and Social Impact and Culture Committee (Co-Chair)

Mr. Mossler brings experience as an executive, investor and entrepreneur. He has been an independent consultant, entrepreneur and philanthropist since June 2016. From August 1999 until June 2016, Mr. Mossler worked in various senior leadership positions at Zappos, including Senior Vice President of Merchandising, and helped Zappos grow into a company with more than $1 billion in gross merchandise sales before it was bought by Amazon in 2009. From September 1991 to August 1999, Mr. Mossler worked in various positions at Nordstrom. In addition to Mr. Mossler’s career in e-commerce and retail, he assisted with the launch and building of, and previously served on the board of, Downtown Project, a company dedicated to helping revitalize part of downtown Las Vegas through investment in small businesses, tech startups, real estate, arts, culture and education. Mr. Mossler founded Honus Capital LLC, a hands-on investment fund for Las Vegas-area entrepreneurs. He also co-founded the popular Mexican restaurant chain Nacho Daddy. Mr. Mossler graduated from Southern Oregon University with a B.S. degree in Business.

Mr. Mossler brings to the Board significant expertise in call center services, in addition to extensive experience in consumer-facing industries and consumer experience more broadly. Mr. Mossler also has extensive experience in assisting with business growth and providing both knowledge of technology, e-commerce, and product merchandising knowledge.

PROXY STATEMENT

 

19

 

Our Board of Directors and Corporate Governance

Kevin Lavan

Class III Director

Director since January 2000

Independent

Committees: Audit Committee (Chair), Compensation Committee, Nominating and Corporate Governance Committee, and Social Impact and Culture Committee

Mr. Lavan currently serves as Chief Financial Officer of Autoclear LLC, a designer, builder and distributor of security systems, a role he has held since February 2016. Prior to his current role, Mr. Lavan was an independent consultant to the media and entertainment industries, building on his leadership experience across entertainment, media and direct and digital marketing. Between April 2010 and December 2014, Mr. Lavan was a Senior Vice President, Worldwide Controller of IMG, an international and diversified sports, entertainment and media company. He also served in various executive roles at Paradysz Matera Company, Inc., MDCPartners, Inc., Now Marketing, Inc. and Wunderman, a marketing division of Young & Rubicam Inc., and previously served as an independent consultant to marketing services organizations. Earlier in Mr. Lavan’s career, he held various finance roles at Young & Rubicam, Viacom Inc. and Viacom’s subsidiary, MTV Networks. Mr. Lavan holds a B.S. degree from Manhattan College and is a Certified Public Accountant.

Mr. Lavan brings to the Board highly relevant perspective in digital marketing and advertising, as well as extensive operating and financial senior management experience.

Robert P. LoCascio

Class III Director

Director since November 1995

Chairman & Chief Executive Officer

Committees: Social Impact and Culture Committee

Mr. LoCascio has been CEO and Chairman since founding the Company in 1995 with the invention of Web Chat. As founder and CEO, Mr. LoCascio deeply understands the technology and business of LivePerson and has been an integral part of driving the Company’s market leadership in Conversational Artificial Intelligence and building its best-in-class AI platform. In addition to his role at LivePerson, Mr. LoCascio is a founding board member of EqualAI, an organization which works with companies, policymakers, and experts to reduce bias in AI. Mr. LoCascio has been widely recognized for his leadership in the technology space and was the winner of the 2015 Smart CEO Circle of Evidence Award and was named a New York City Ernst & Young Entrepreneur of the Year finalist in 2001 and 2008. Mr. LoCascio is also a founding member of the NYC Entrepreneurs Council of the Partnership for New York City. In 2001, Mr. LoCascio started the Dream Big Foundation with its first program, FeedingNYC, which gives families in need a Thanksgiving dinner. To date, FeedingNYC has delivered meals to approximately 90,000 families. Its second program, the Dream Big Entrepreneurship Initiative, launched in 2014 to fund, mentor, coach and empower local entrepreneurs in underserved communities. Mr. LoCascio received a B.B.A. degree from Loyola College.

Mr. LoCascio brings to the Board a unique perspective of LivePerson’s business and his strategic vision and operational insights as the Company founder and CEO. In addition, the Company values Mr. LoCascio’s extensive technology experience, specifically in the cloud-based technologies space, as well as his strong entrepreneurial background.

20

 

LIVEPERSON, INC.

 

Our Board of Directors and Corporate Governance

Starboard Agreement

On February 25, 2022, Starboard Value and Opportunity Master Fund Ltd notified us of its intent to nominate four candidates for election to the Board at the Annual Meeting. On July 20, 2022, the Company and Starboard Value, LP and certain of its affiliates (collectively, “Starboard”) entered into an agreement pursuant to which Starboard Value and Opportunity Master Fund Ltd withdrew its nomination notice.

In addition, the Company has agreed to (i) appoint one director identified by Starboard and approved by the Company pursuant to the process set forth in the Agreement as a Class I director (the “Starboard Director”) and (ii) appoint one director selected by the Company pursuant to the process set forth in the Agreement as a Class I director (the “Additional Independent Director”, and together with the Starboard Director, the “New Directors”). Peter Block, a current Class II director, will depart the Board no later than the conclusion of the 2022 Annual Meeting, and the Company has agreed that during the Standstill Period (as defined below) the resulting vacancy may be filled by an independent director identified by the Company, whose appointment shall be subject to approval by Starboard (to be determined in good faith) (the “Vacancy Appointee”, and together with the New Directors, the “Agreed Appointees”).

The Agreement further provides, among other things, that:

    the Board has appointed Jill Layfield as the Lead Independent Director of the Board;

    the Company will form an Operating Committee of the Board immediately upon the appointment of the New Directors, which will be composed of no more than four directors, including the New Directors;

    the Company will use its reasonable efforts to hold the 2022 Annual Meeting no later than August 4, 2022, subject to compliance with applicable laws or regulatory requirements;

    the Starboard Director will be appointed to the Compensation Committee and the Nominating and Corporate Governance Committee;

    the Board will take all necessary actions promptly after the conclusion of the 2022 Annual Meeting and the appointment of the Vacancy Appointee to result in Class II of the Board being composed of three directors, none of whom is an Agreed Appointee, except that if the Vacancy Appointee has not been appointed to the Board prior to the expiration of the Standstill Period, the Board will ensure that Class II of the Board is not comprised of any New Director;

    during the Standstill Period, the size of the Board will not be more than nine directors;

    in the event that the Starboard Director ceases to be a director for any reason, Starboard will be permitted to recommend a replacement director who is a reasonably acceptable to the Board (such acceptance not to be unreasonably withheld) and fulfills certain requirements;

    in the event that the Additional Independent Director or the Vacancy Appointee ceases to be a director for any reason, a replacement will be selected pursuant to the same process provided for in the Agreement for the initial director’s selection, except that the replacement for the Additional Independent Director may be appointed from outside the list provided to Starboard on or before the date hereof subject to certain requirements;

    Starboard’s rights with respect to the approval of the Vacancy Appointee and the replacement of the Agreed Appointees, as described above, are applicable only if at such time it beneficially owns at least the lesser of 3% of the then-outstanding shares of the Company’s common stock and 2,244,487 shares of the Company’s common stock (subject to adjustment for stock splits, reclassifications, combinations and similar adjustments);

    Starboard will be subject to customary standstill restrictions, including, among others, with respect to proxy solicitation and related matters, mergers and similar transactions and other changes, each of the foregoing subject to certain exceptions;

PROXY STATEMENT

 

21

 

Our Board of Directors and Corporate Governance

    during the Standstill Period, Starboard will vote all shares of the Company’s common stock beneficially owned by it in accordance with the Board’s recommendations at the 2022 Annual Meeting (i) in favor of all of the Company’s nominees, (ii) in favor of the ratification of the appointment of BDO USA, LLP as the Company’s independent registered public accounting firm for the fiscal year 2022, (iii) in accordance with the Board’s recommendation with respect to the Company’s “say-on-pay” proposal and (iv) in accordance with the Board’s recommendation with respect to any other Company proposal or stockholder proposal presented at the 2022 Annual Meeting; provided, however, that in the event Institutional Shareholder Services Inc. (“ISS”) or Glass Lewis & Co., LLC (“Glass Lewis”) recommends otherwise with respect to the Company’s “say-on-pay” proposal or any other Company proposal or stockholder proposal presented at the 2022 Annual Meeting (other than proposals relating to the election or removal of directors), Starboard shall be permitted to vote in accordance with the ISS or Glass Lewis recommendation;

    during the Standstill Period, Starboard will vote all shares of the Company’s common stock beneficially owned by it in accordance with the Board’s recommendations on any proposal relating to the appointment, election or removal or directors at any special meetings of the Company’s stockholders or actions by written consent of the Company’s stockholders;

    during the Standstill Period, Starboard will be permitted to vote in its discretion on any proposal of the Company submitted to stockholders at any annual or special meetings of the Company’s stockholders or actions by written consent of the Company’s stockholders in respect of any extraordinary transaction;

    neither party will publicly criticize, disparage, call into disrepute or otherwise defame or slander the other party in any manner that would reasonably be expected to damage the business or reputation of such other party, subject to certain exceptions;

    the Agreement will terminate on the earlier of (x) the date that is 15 business days prior to the deadline for the submission of stockholder nominations for the 2023 Annual Meeting pursuant to the Company’s by-laws or (y) the date that is 100 days prior to the first anniversary of the 2022 Annual Meeting (the “Standstill Period”); and

    the Company will reimburse Starboard for reasonable, documented out-of-pocket fees and expenses incurred in connection with its involvement with the Company, including but not limited to, its Schedule 13D filings, its preparation and delivery of its nomination notice, its preparation and filing of preliminary proxy materials, and the negotiation and execution of the Agreement, up to $1,100,000 in the aggregate.

The foregoing description does not purport to be complete and is qualified in its entirety by reference to the Agreement, a copy of which is filed as Exhibit 10.1 to the Current Report on Form 8-K filed by the Company on July 21, 2022.

Corporate Governance Policies and Practices

We are committed to strong corporate governance to enhance our Board’s oversight of the Company and have adopted policies and practices in furtherance of such objective. These policies and practices include that:

     all of the members of the Board other than Mr. LoCascio are “independent” under the Nasdaq rules;

     the Lead Independent Director role—to which Jill Layfield was recently elected—has robust responsibilities, which are described under “Board Leadership Structure” beginning on page 24 of this Proxy Statement;

     all members of our Audit Committee are “independent” under the Nasdaq rules and the rules and regulations of the SEC;

     all members of our Compensation Committee and of our Nominating and Corporate Governance Committee are “independent” under the Nasdaq rules;

     the Company and the Board regularly review and evaluate the Company’s corporate governance practices as a general matter and in response to investor feedback;

     the Board maintains charters for the Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee, which can be found at https://ir.liveperson.com/corporate-governance/governance-overview;

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Our Board of Directors and Corporate Governance

     the Board has adopted a policy regarding conflicts of interest and “related party transactions”, as defined under the Nasdaq rules and the rules and regulations of the SEC, under which all potential conflicts of interest and related party transactions must be reviewed and pre-approved by the Audit Committee; and

     an annual risk assessment of the Company’s compensation policies is conducted by the Board and the Compensation Committee.

Corporate Governance Guidelines and Code of Business Conduct and Ethics

The Board has adopted Corporate Governance Guidelines that address items such as the qualifications and responsibilities of our directors and director candidates, corporate governance policies, and standards applicable to us in general. In addition, the Board has adopted a Code of Conduct applicable to all of our employees, including our executive officers, and our non-employee directors, as well as a Code of Ethics for the Chief Executive Officer and Senior Financial Officers. The Code of Conduct and Code of Ethics can be found at https://ir.liveperson.com/corporate-governance/governance-overview.

Director Independence

The Board has determined that Mr. Block, Mr. Cu, Mr. Lavan, Ms. Layfield, Mr. Mossler, and Mr. Wesemann are “independent” under the Nasdaq listing requirements and the applicable rules and regulations of the SEC. As part of the Board’s process in making such determination, each such director provided confirmation that (a) the objective criteria for independence pursuant to the Nasdaq rules are satisfied and (b) each such director has no other relationship with the Company that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. Mr. LoCascio, our President, CEO and Chairman of the Board, is an employee and therefore not “independent” under these requirements, rules and regulations.

Communications with Directors

In order to communicate with the Board as a whole, with non-employee directors or with specified individual directors, correspondence may be directed to LivePerson, Inc., 530 Seventh Ave, Floor M1, New York, New York 10018, Attention: Corporate Secretary. All such correspondence will be forwarded to the appropriate director or group of directors. The Corporate Secretary has the authority to discard or disregard any communication that is unduly hostile, threatening, illegal or otherwise inappropriate.

Director Nominations

The Nominating and Corporate Governance Committee will consider candidates for director recommended by stockholders in accordance with its charter, our Bylaws, and the Corporate Governance Guidelines.

The processes established by our Nominating and Corporate Governance Committee to identify and evaluate director candidates, including those recommended by stockholders, include requests to Board members and others for recommendations, evaluation of biographical information and background material relating to potential candidates and interviews of selected candidates by members of the Nominating and Corporate Governance Committee and the Board, all on an as-needed basis from time to time.

In considering whether to recommend any particular candidate for inclusion in the Board’s slate of recommended director nominees, our Nominating and Corporate Governance Committee will apply the criteria attached to its charter. These criteria include the candidate’s integrity, business acumen, knowledge of our business and industry, experience, diligence, conflicts of interest and the ability to act in the interests of all stockholders. Specific weighting is not assigned to any of the criteria and no particular criterion is a prerequisite for each prospective nominee. Our Board believes that the backgrounds and qualifications

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Our Board of Directors and Corporate Governance

of its directors, considered as a group, should provide a composite mix of experience, knowledge and abilities that will allow it to fulfill its responsibilities. The Nominating and Corporate Governance Committee has, on certain occasions, retained a third-party executive search firm to identify or assist in the evaluation of candidates.

As part of its efforts to create a diverse Board, the Nominating and Corporate Governance Committee endeavors to include women and individuals from underrepresented communities in the pool of candidates from which the Nominating and Corporate Governance Committee identifies director nominees. In carrying out its responsibilities, the Nominating and Corporate Governance Committee values differences in business experience, professional skills, educational background, gender, race, ethnicity and/or nationality, viewpoint and other individual qualities and attributes that facilitate and enhance the oversight by the Board of the business and affairs of the Company. The Nominating and Corporate Governance Committee adheres to the Company’s philosophy of maintaining an environment free from discrimination on the basis of race, religion, national origin, sex, sexual orientation, disability or any other basis proscribed by law.

Once the Nominating and Corporate Governance Committee has identified or been recommended a prospective nominee, it will make an initial determination as to whether to conduct a full evaluation of the candidate. The Nominating and Corporate Governance Committee will make its initial determination based on its own knowledge of the candidate, information provided as part of the candidate’s nomination and any supplemental inquiries to the person recommending the candidate or others. The initial determination will be based primarily on the need for additional Board members to fill vacancies or expand the size of the Board and the likelihood that the prospective nominee can satisfy the evaluation factors described below.

If the Nominating and Corporate Governance Committee determines, in consultation with other Board members as appropriate, that additional consideration is warranted, it may gather or request the third-party search firm to gather additional information about the prospective nominee’s background and experience. The Nominating and Corporate Governance Committee then will evaluate the prospective nominee, taking into account whether the prospective nominee is “independent” within the meaning of the listing standards of Nasdaq and such other factors as it deems relevant, including the current composition of the Board, the balance of management and independent directors, the need for Audit Committee or Compensation Committee expertise, the prospective nominee’s skills and experience, the diversity of the nominee’s skills and experience in areas that are relevant to the Company’s businesses and activities, and the evaluations of other prospective nominees. In connection with this evaluation, the Nominating and Corporate Governance Committee will determine whether to interview the prospective nominee and, if warranted, one or more members of the Nominating and Corporate Governance Committee and others, as appropriate, will conduct interviews in person or by telephone. After completing this process, the Nominating and Corporate Governance Committee will make a recommendation to the full Board as to the persons who should be nominated by the Board, and the Board will determine the nominees after considering the recommendation and report of the Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee follows the same process and uses the same criteria for evaluating candidates proposed by stockholders, members of the Board and members of management.

In addition, stockholders may nominate candidates for election to the Board so long as such stockholders comply with the requirements set forth in our Bylaws. See “Other Information—Stockholder Proposals and Nominations” beginning on page 70 of this Proxy Statement for more information on the deadline for receipt of director nominations under our Bylaws.

Attendance at Annual Meeting

While the Company has not adopted a formal policy with regard to attendance by members of the Board at annual stockholder meetings, all members of the Board are invited to attend the Company’s annual meeting of stockholders. At the 2021 Annual Meeting, two directors attended.

Board Tenure/Retirement Policy

The Board does not believe that arbitrary limits on the number of consecutive terms a director may serve or on the directors’ ages are currently appropriate in light of the substantial benefits the Company generally receives from having a sustained focus on the Company’s business, strategy and industry over a significant period of time. Each individual’s performance will be assessed by the Nominating and Corporate Governance Committee in light of relevant factors in connection with assessments

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Our Board of Directors and Corporate Governance

of candidates for nomination to be a director. However, we work hard to strike the right balance between long-term understanding of our business and fresh external perspectives, and have added three new independent directors in the past six years to help ensure diversity of backgrounds and perspectives within the Board.

Board Leadership Structure

The Board regularly evaluates its leadership structure to ensure that it serves the best interests of the Company. The Corporate Governance Guidelines provide for the election of a Lead Independent Director when the Chairman of the Board is not independent.

At present, the Board believes that combining the positions of Chairman of the Board and CEO of the Company facilitates communication between the Board and senior management of the Company as well as Board oversight of the Company’s business and affairs. Accordingly, in accordance with the Starboard Agreement, the independent directors of the Board have elected Jill Layfield as the Lead Independent Director. The Board will continue to evaluate its leadership structure and may in the future amend the arrangement if it is concluded to be beneficial.

The Corporate Governance Guidelines set forth the duties and responsibilities of the Chairman of the Board and the Lead Independent Director:

Chairman of the Board

Robert LoCascio

 

Lead Independent Director

Jill Layfield

 

     Presides at, and chairs, Board meetings and meetings of stockholders

     Establishes agendas for each Board meeting in consultation with the chairs of applicable committees of the Board

     If a Lead Independent Director has not been elected, leads executive sessions of the Board

     Has authority to call Board meetings

     If a Lead Independent Director has not been elected, leads the Board in discussions concerning the CEO’s performance and CEO succession

     Approves meeting schedules for the Board

     Approves information sent to the Board

     If requested by major stockholders, is available for consultation and direct communication

 

     Serves as a liaison between the Chairman of the Board and the independent directors

     Leads executive sessions of the Board

     Has authority to call Board meetings

     Has authority to call meetings of the independent directors

     Is consulted on meeting agendas and meeting schedules for the Board

     If requested by major stockholders, is available for consultation and direct communication

     Leads the Board in discussions concerning the CEO’s performance and CEO succession

Risk Oversight

The Board provides oversight of the Company’s management of risk. Senior management has responsibility for the management of risk and reports to the Board as needed with respect to its ongoing enterprise risk management efforts. Given the heightened importance and relevance of risks related to privacy, data use and cybersecurity, the Board as a whole oversees management of these risks. In exercising its oversight of risk management, the Board has delegated to the Audit Committee primary responsibility for the oversight of risks related to the Company’s financial statements, internal controls, disclosure controls, and related processes. As discussed in more detail below, the Board has delegated to the Compensation Committee primary responsibility for the oversight of risk related to the Company’s compensation policies and practices. The Board has delegated to the Nominating and Corporate Governance Committee primary responsibility for the oversight of risk related to the Company’s corporate governance practices. Each committee reports as needed to the full Board with respect to such committee’s particular risk oversight responsibilities.

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Our Board of Directors and Corporate Governance

Risk Assessment of Compensation Policies

The Compensation Committee, with the assistance of management, included a risk assessment in its overall review of the Company’s compensation policies and practices in the 2021 Fiscal Year and concluded that they did not, and do not, motivate imprudent risk taking. As further discussed below in Proposal No. 3 (Advisory Approval of the Compensation of the Company’s named executive officers) as it relates to the Company’s executive compensation program, the Compensation Committee noted that:

     the Company’s annual incentive compensation is based on balanced performance metrics that promote disciplined progress toward Company goals;

     the Company does not offer significant short-term incentives that might drive high-risk investments at the expense of long-term Company value;

     the Company’s long-term incentives do not drive high-risk investments at the expense of long-term Company value; and

     the Company’s compensation programs are appropriately balanced between cash and equity, and the equity component does not promote unnecessary risk taking.

Based on this assessment, the Compensation Committee and the Board concluded that the Company has a balanced pay and performance program that is consistent with the Company’s business model and long-term goals, and does not promote excessive risk taking.

Board Meetings and Committees

The Board held four regular quarterly meetings, as well as one interim meeting, during the 2021 Fiscal Year. During the 2021 Fiscal Year, each director attended or participated in each of the meetings of the Board and meetings of the committees of the Board on which such director served.

Directors who are not members of the Company’s management meet at regularly scheduled executive sessions without members of management present. The Board and committees generally hold executive sessions at each regularly scheduled meeting.

Audit Committee

The Audit Committee appoints our independent registered public accounting firm, reviews the plan for and the results of the independent audit, approves the fees of our independent registered public accounting firm, reviews with management and the independent registered public accounting firm our quarterly and annual financial statements and our internal accounting, financial and disclosure controls, reviews and approves transactions between LivePerson and its officers, directors and affiliates, oversees whistleblower procedures, and performs other duties and responsibilities as set forth in a charter approved by the Board. The charter of the Audit Committee is available at https://ir.liveperson.com/corporate-governance/governance-overview. Each member of the Audit Committee is independent, as “independence” is defined for purposes of Audit Committee membership by the listing standards of Nasdaq and the applicable rules and regulations of the SEC. The Audit Committee held four meetings during the 2021 Fiscal Year.

The members of the Audit Committee of our Board during the 2021 Fiscal Year were Mr. Lavan (Chair), Ms. Layfield and Mr. Wesemann.

The Board has determined that each member of the Audit Committee is able to read and understand fundamental financial statements, including LivePerson’s balance sheet, income statement and cash flow statement, as required by Nasdaq rules. In addition, the Board has determined that Mr. Lavan satisfies the Nasdaq rule requiring that at least one member of our Board’s Audit Committee have past employment experience in finance or accounting, requisite professional certification

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Our Board of Directors and Corporate Governance

in accounting or any other comparable experience or background which results in the member’s financial sophistication, including being, or having been, a chief executive officer, chief financial officer or other senior officer with financial oversight responsibilities. The Board has also determined that Mr. Lavan is the Audit Committee’s “audit committee financial expert” as defined by the SEC.

Compensation Committee

The Compensation Committee’s primary responsibility is to review and approve the compensation to be paid or provided to the Company’s executive officers and to ensure that such compensation is in line with the Company’s strategy, sound corporate governance principles and stockholder interests. The Compensation Committee also oversees the Company’s compensation, equity and employee benefit plans and programs and performs other duties and responsibilities as set forth in a charter approved by the Board. The charter of the Compensation Committee is available at https://ir.liveperson.com/corporate-governance/governance-overview. The CEO and the Human Resources Department present compensation and benefit proposals to the Compensation Committee for the Committee’s consideration and approval. Each member of the Compensation Committee is independent, as “independence” is defined for purposes of Compensation Committee membership by the listing standards of Nasdaq and a “non-employee director” as defined in Rule 16b-3(b)(3) under the Exchange Act. The Compensation Committee deliberated at four scheduled board meetings and held two Compensation Committee meetings during the 2021 Fiscal Year.

The Compensation Committee has the authority to retain, terminate and set the terms of the Company’s relationship with any outside advisors who assist the Committee in carrying out its responsibilities. The Company from time to time engages the services of a compensation consultant to provide market and peer compensation data to the Company. The Compensation Committee annually reviews this market and peer compensation data. In October 2019, the Compensation Committee engaged Pearl Meyer & Partners (“Pearl Meyer”) to consult on compensation and peer group benchmarking. The Compensation Committee continued to engage Pearl Meyer through August 2021, at which time the Compensation Committee engaged Compensia. Each of Pearl Meyer and Compensia is an independent compensation advisory firm specializing in executive compensation design and corporate governance consultation.

The members of the Compensation Committee of our Board during the 2021 Fiscal Year were Ms. Layfield (Chair), Mr. Block, Mr. Lavan, Mr. Mossler and Mr. Wesemann.

During the 2021 Fiscal Year:

     none of the members of the Compensation Committee was an officer (or former officer) or employee of the Company or any of its subsidiaries;

     none of the members of the Compensation Committee had a direct or indirect material interest in any transaction in which the Company was a participant and the amount involved exceeded $120,000;

     none of our executive officers served on the Compensation Committee (or another board committee with similar functions or, if none, the entire board of directors) of another entity where one of that entity’s executive officers served on the Compensation Committee;

     none of our executive officers was a director of another entity where one of that entity’s executive officers served on the Compensation Committee; and

     none of our executive officers served on the Compensation Committee (or another board committee with similar functions or, if none, the entire board of directors) of another entity where one of that entity’s executive officers served on our Board.

PROXY STATEMENT

 

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Our Board of Directors and Corporate Governance

Nominating and Corporate Governance Committee

The Nominating and Corporate Governance Committee of our Board is responsible for identifying individuals qualified to become Board members, recommending to our Board the persons to be nominated for election as directors and to each of the Board’s committees, reviewing and making recommendations to the Board with respect to Board and management succession planning, developing and recommending to the Board corporate governance principles and policies, reviewing stockholder proposals and overseeing evaluation of the Board and each committee thereof, as needed. In addition, the Nominating and Corporate Governance Committee is responsible for overseeing the Company’s policies, practices, risk management, and public disclosure regarding environmental, social and governance matters. The charter of the Nominating and Corporate Governance Committee is available at https://ir.liveperson.com/corporate-governance/governance-overview. The processes and procedures followed by the Nominating and Corporate Governance Committee in identifying and evaluating director candidates are described above under “Director Nominations.” Each member of the Nominating and Corporate Governance Committee is “independent,” as defined under the rules of Nasdaq. The Nominating and Corporate Governance Committee deliberated as needed during regularly scheduled board meetings.

The members of the Nominating and Corporate Governance Committee of our Board during the 2021 Fiscal Year were Mr. Wesemann (Chair), Mr. Lavan, Ms. Layfield and Mr. Mossler.

Social Impact and Culture Committee

The Social Impact and Culture Committee is responsible for assisting the Board and management in its oversight of our initiatives, plans and practices with respect to social matters of significance to us and the communities in which we operate and in cultivating and reinforcing a workplace culture defined by the set of shared values, goals, attitudes and practices that characterize LivePerson and permeate the day-to-day work experience and set the platform for the Company’s performance and drive its future state. In particular, the Social Impact and Culture Committee is responsible for overseeing the Company’s (i) culture and related strategies, programs, and risks; (ii) talent management, development, and retention, and related strategies, programs, and risks, including the Company’s diversity and inclusion initiatives and results; and (iii) the initiatives, plans and practices regarding the impact of the Company’s products on communities and other stakeholders. The Social Impact and Culture Committee drives transformational social impact by applying LivePerson’s talent in partnership with the most innovative and effective organizations, addressing some of the world’s most pressing social issues, including artificial intelligence (AI) and social use of consumer facing digital platforms, among other technical matters. In April 2021, we formed the Social Impact and Culture Committee by combining two historical standing committees, the Social Impact Committee and the Culture Committee, due to the importance of their focus and efforts, which tended to overlap.

The members of the Social Impact and Culture Committee of our Board during the 2021 Fiscal Year were Mr. Block (Co-Chair), Mr. Mossler (Co-Chair), Mr. Cu, Mr. Lavan, Ms. Layfield, Mr. LoCascio and Mr. Wesemann.

Section 16(a) Reports

The members of our Board, our executive officers and persons who hold more than 10% of our outstanding common stock are subject to the reporting requirements of Section 16(a) of the Exchange Act, which requires them to file reports with respect to their ownership of our common stock and their transactions in such common stock. Based solely upon a review of the copies of Section 16(a) reports that LivePerson has received from such persons or entities, and the written representations received from the reporting persons that no other reports were required, for transactions in our common stock and their common stock holdings for the 2021 Fiscal Year, LivePerson believes that all reporting requirements under Section 16(a) for such fiscal year were met in a timely manner by its directors, executive officers and beneficial owners of more than 10% of its common stock, other than one late Form 4 filed by each of Mr. Block and Mr. Lavan with respect to one transaction each; Mr. Cu, Mr. Mossler, Mr. Osumi, Mr. Wesemann and Ms. Layfield with regard to two related transactions each; and Mr. Collins with respect to three related transactions.

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Director Compensation

Director Compensation

The following table sets forth information concerning the compensation of our non-employee directors in the 2021 Fiscal Year. Following the table is a discussion of material factors related to the information disclosed in the table.

Name

Fees
Earned
or Paid
in Cash
($)
(2)

Stock Awards
($)
(2)(3)

Option
Awards
($)
(2)(3)(4)

Total
($)

Peter Block(1)

257,684

257,684

Ernest Cu

117,627

117,550

235,177

Kevin C. Lavan

67,500

200,014

267,514

Jill Layfield

65,000

100,119

100,135

265,254

Fred Mossler

129,116

128,818

257,934

William G. Wesemann

62,500

100,119

100,135

262,754

(1)         Mr. Block, a current Class II director, will retire from the Board on or before the conclusion of the Annual Meeting.

(2)         In April 2021, the Compensation Committee, based on the recommendations of Pearl Meyer, its compensation consultant at the time, determined to allow directors to receive their annual equity award in one of the following forms, at their election: (1) 100% in stock options, (2) 100% in RSUs (as defined below), or (3) 50% in stock options and 50% in RSUs. This election was applicable for director equity grants made in 2021 and will be applicable for director equity awards in 2022. In addition, directors may elect to receive their annual cash retainer in the form of equity, the form of which will be based on the same options described above. This will apply to their services in respect of years 2021 and 2022.

(3)         These columns represent the aggregate grant date fair value of stock options and restricted stock units granted to each non-employee director in the 2021 Fiscal Year computed in accordance with FASB ASC Topic 718, and in accordance with SEC rules. Generally, the aggregate grant date fair value is the amount that the Company expects to expense in its financial statements over the award’s vesting schedule. These amounts reflect the company’s accounting expense and do not correspond to the actual value that will be realized by the non-employee directors and there is no assurance that these grant date fair values will ever be realized by the non-employee directors. Pursuant to SEC rules, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions. For additional information on the valuation assumptions with respect to the grants, refer to Note 11 of LivePerson’s consolidated financial statements contained in our Annual Report on Form 10-K for the 2021 Fiscal Year, as filed with the SEC.

(4)         As of December 31, 2021, the number of shares underlying unexercised stock options for each director were: Mr. Block, 112,107; Mr. Cu 4,590; Mr. Lavan, 204,917; Ms. Layfield, 141,017; Mr. Mossler 77,137; and Mr. Wesemann, 221,017.

The Company’s non-employee directors are compensated in accordance with a fee schedule that is approved by the Compensation Committee. Directors who are also our employees receive no additional compensation for their services as directors. The Compensation Committee reviews and recommends to the Board appropriate director compensation programs for service as directors, committee chair and committee members. In order to determine the Board compensation framework, the Compensation Committee reviewed comparative market composite data provided by the Committee’s independent consultant.

Consistent with the Company’s compensation philosophy, non-employee director compensation is positioned competitively against companies of similar size, complexity and growth trajectory. In general, total compensation for our non-employee directors is targeted within the competitive range (+/-15%) of the peer group median.

For his or her services in 2021, each non-employee director received compensation in accordance with the following:

Annual Cash Retainer

$         35,000   

Annual Stock Option Grant

$        200,000 (1)

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Director Compensation

Members of our Committees, other than the Chairpersons, receive the following additional compensation:

Audit Committee

$        10,000   

Compensation Committee

         7,500   

Nominating and Corporate Governance Committee

         5,000   

The Chairpersons of our Committees receive the following additional compensation:

Audit Committee

$       20,000   

Compensation Committee

$       15,000   

Nominating and Corporate Governance Committee

$       10,000   

Social Impact and Culture Committee

         5,000 (2)

(1)         Newly appointed directors to the Board receive an initial stock option grant equal to the annual equity retainer of $200,000 at the time of their appointment, followed by subsequent annual equity grants for each year of service following the year of appointment.

(2)         In April 2021, we combined the Social Impact Committee and the Culture Committee into the Social Impact and Culture Committee.

In April 2021, the Compensation Committee, based on the recommendations of Pearl Meyer, its compensation consultant at the time, determined to allow directors to receive their annual equity award in one of the following forms, at their election: (1) 100% in stock options, (2) 100% in RSUs, or (3) 50% in stock options and 50% in RSUs. This election was applicable for director equity grants to be made in 2021 and will be applicable for director equity awards made in 2022. In addition, directors may elect to receive their annual cash retainer in the form of equity, the form of which will be based on the same options described above. This will apply to their services in respect of years 2021 and 2022.

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Proposal No. 2 Ratification of Appointment of Independent Registered Public Accounting Firm

Proposal No. 2
Ratification of Appointment of Independent Registered Public Accounting Firm

The Audit Committee of the Board has appointed BDO USA, LLP (“BDO”) to serve as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2022, including each quarterly interim period therein, and the Board is asking the stockholders to ratify this appointment at the Annual Meeting.

Although stockholder ratification of the Audit Committee’s appointment of BDO is not required, the Board considers it desirable for the stockholders to pass upon the selection of the independent registered public accounting firm. In the event the stockholders fail to ratify the appointment, the Audit Committee will reconsider its selection. Even if the selection is ratified, the Audit Committee in its discretion may direct the appointment of a different independent registered public accounting firm at any time during the year if the Audit Committee believes that such a change would be in the best interests of the Company and its stockholders.

A representative from BDO is expected to be present at the Annual Meeting, will have the opportunity to make a statement if he or she desires to do so and will be available to respond to appropriate questions.

The following table presents fees for professional audit services and other services provided to LivePerson by BDO for the fiscal years ended December 31, 2021 and 2020.

2021

2020

Audit Fees (1)

$         912,588

$    1,096,949

Audit-Related Fees (2)

418,178

       

Tax Fees (3)

       

       

All Other Fees

       

       

(1)         Audit Fees” consist of fees for professional services rendered in connection with the audit of the Company’s consolidated annual financial statements, the review of the Company’s interim condensed consolidated financial statements included in quarterly reports, the audits in connection with statutory and regulatory filings or engagements, and the audit of the Company’s internal controls over financial reporting.

(2)         Audit-Related Fees” consist primarily of fees for professional services rendered in connection with the audits of the Company’s employee benefit plan and acquisition accounting due diligence.

(3)         Tax Fees” consist of fees billed for professional services rendered for tax compliance, tax consulting and tax planning services.

Pre-Approval Policies and Procedures

The Audit Committee pre-approves all audit and permissible non-audit services. The Audit Committee has authorized each of its members to pre-approve audit, audit-related, tax and non-audit services, provided that such approved service is reviewed with the full Audit Committee at its next meeting.

As early as practicable in each fiscal year, the independent registered public accounting firm provides to the Audit Committee a schedule of the audit and other services that they expect to provide or may provide during the year. The schedule is specific as

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Proposal No. 2 Ratification of Appointment of Independent Registered Public Accounting Firm

to the nature of the proposed services, the proposed fees and other details that the Audit Committee may request. The Audit Committee by resolution authorizes or declines the proposed services. Upon approval, this schedule serves as the budget for fees by specific activity or service for the year.

A schedule of additional services proposed to be provided by the independent registered public accounting firm or proposed revisions to services already approved, along with associated proposed fees, may be presented to the Audit Committee for their consideration and approval at any time. The schedule is required to be specific as to the nature of the proposed service, the proposed fee, and other details that the Audit Committee may request. The Audit Committee intends by resolution to authorize or decline authorization for each proposed new service.

Required Vote

The affirmative vote of a majority of the stock having voting power that is present virtually or represented by proxy at the Annual Meeting at which a quorum is present is required to ratify the Audit Committee’s selection of BDO. Even if the selection is ratified, the Audit Committee, in its discretion, may direct the appointment of a different independent accounting firm at any time during the year if the Audit Committee believes that such a change would be in the Company’s or our stockholders’ best interests.

The Board unanimously recommends a vote on the proxy card “FOR” the ratification of the appointment of BDO USA, LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2022.

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Audit Committee Report

Audit Committee Report

Membership and Role of the Audit Committee

The Audit Committee consists of the following members of the Company’s Board: Kevin C. Lavan (Chair), Jill Layfield and William G. Wesemann. Each member of the Audit Committee is independent, as “independence” is defined for purposes of Audit Committee membership by the listing standards of Nasdaq and the applicable rules and regulations of the SEC. The Board has determined that each member of the Audit Committee is able to read and understand fundamental financial statements, including LivePerson’s balance sheet, income statement and cash flow statement, as required by Nasdaq rules. In addition, the Board has determined that Mr. Lavan satisfies the Nasdaq rule requiring that at least one member of our Board’s Audit Committee have past employment experience in finance or accounting, requisite professional certification in accounting, or any other comparable experience or background which results in the member’s financial sophistication, including being or having been a chief executive officer, chief financial officer or other senior officer with financial oversight responsibilities. The Board has also determined that Mr. Lavan is an “audit committee financial expert” as defined by the SEC.

The Audit Committee appoints our independent registered public accounting firm, reviews the plan for and the results of the independent audit, approves the fees of our independent registered public accounting firm, reviews with management and the independent registered public accounting firm our quarterly and annual financial statements and our internal accounting, financial and disclosure controls, reviews and approves transactions between LivePerson and its officers, directors and affiliates and performs other duties and responsibilities as set forth in a charter approved by the Board. The Audit Committee charter is available at http://www.liveperson.com/company/ir/corporate-governance.

Review of the Company’s Audited Consolidated Financial Statements for the 2021 Fiscal Year

Management is responsible for the preparation, presentation and integrity of the Company’s financial statements, accounting and financial reporting principles and internal controls and procedures designed to assure compliance with accounting standards and applicable laws and regulations. The independent auditor for the Company’s 2021 Fiscal Year, BDO, was responsible for performing an independent audit of the consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States) (the “PCAOB”).

In performing its oversight role, the Audit Committee has reviewed and discussed the audited consolidated financial statements of the Company for the 2021 Fiscal Year with the Company’s management. The Audit Committee has separately discussed with BDO, the Company’s independent registered public accounting firm for the 2021 Fiscal Year, the matters required to be discussed by PCAOB Auditing Standard No. 1301 (“Communication with Audit Committees”), as amended, which includes, among other things, matters related to the conduct of the audit of the Company’s consolidated financial statements. In addition, the Audit Committee has also received the written disclosures and the letter from BDO required by PCAOB independence standards, as amended, and the Audit Committee has discussed with BDO the independence of that firm from the Company.

Conclusion

Based on the Audit Committee’s review and discussions noted above, the Audit Committee recommended to the Board that the Company’s audited consolidated financial statements be included in the Company’s Annual Report on Form 10-K for the 2021 Fiscal Year for filing with the SEC.

PROXY STATEMENT

 

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Audit Committee Report

Not all of the members of the Audit Committee are professionally engaged in the practice of auditing or accounting and not all are necessarily experts in the fields of accounting or auditing, including in respect of auditor independence. Members of the Audit Committee rely without independent verification on the information provided to them and on the representations made by management and the independent auditor. Accordingly, the Audit Committee’s oversight does not provide an independent basis to determine that management has maintained appropriate accounting and financial reporting principles or appropriate internal controls and procedures designed to assure compliance with accounting standards and applicable laws and regulations. Furthermore, the Audit Committee’s considerations, efforts and discussions referred to above do not ensure that the audit of the Company’s financial statements has been carried out in accordance with the standards of the PCAOB, that the financial statements are presented in accordance with generally accepted accounting principles or that BDO is in fact “independent.”

Submitted by the Audit Committee of the Company’s Board:

Kevin C. Lavan (Chair)

Jill Layfield

William G. Wesemann

The Audit Committee report above does not constitute “soliciting material” and will not be deemed “filed” or incorporated by reference into any of our filings under the Securities Act or the Exchange Act that might incorporate our SEC filings by reference, in whole or in part, notwithstanding anything to the contrary set forth in those filings.

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LIVEPERSON, INC.

 

Proposal No. 3 Advisory Approval of the Compensation of Our Named Executive Officers

Proposal No. 3 Advisory Approval of the Compensation of Our Named Executive Officers

At our 2017 annual meeting of stockholders, a majority of our stockholders recommended that an advisory resolution with respect to NEO compensation be presented to the Company’s stockholders every year. This non-binding advisory vote is commonly referred to as a “say-on-pay” vote. Our Board adopted the stockholders’ recommendation for the frequency of the “say-on-pay” vote, and accordingly, we are requesting your advisory approval of the compensation of our NEOs as disclosed in the Compensation Discussion and Analysis, the compensation tables and the narrative discussion set forth on pages 37 to 64 of this Proxy Statement, as required under Section 14A of the Exchange Act.

As more fully described in this Proxy Statement under the heading “Compensation Discussion and Analysis,” the Company’s executive compensation program is designed to attract and retain the caliber of officers needed to ensure the Company’s continued growth and profitability, to align incentives with the Company’s fiscal performance, to reward officers’ individual performance against objectives that achieve the Company’s strategy and the creation of long-term value for stockholders, and to provide a balanced approach to compensation that properly aligns incentives with Company performance and stockholder value and does not promote inappropriate risk taking.

We believe we utilize a well-proportioned mix of security-oriented compensation, retention benefits and at-risk compensation which produces both short-term and long-term performance incentives and rewards. By following this approach, we provide each of our NEOs a measure of security in the base compensation that the individual is eligible to receive, while motivating the executive to focus on the business metrics that will produce a high level of performance for the Company, as well as incentives for executive retention. Maintaining this pay mix results fundamentally in a pay-for-performance orientation for our executives.

In 2021, 92% of the votes cast supported our executive compensation program and decisions. We interpreted the results of our 2021 vote as a strong endorsement of our executive compensation program’s design and direction.

We encourage you to carefully review the “Compensation Discussion and Analysis” beginning on page 37 of this Proxy Statement for additional details on LivePerson’s executive compensation, including LivePerson’s compensation philosophy and objectives, as well as the processes our Compensation Committee used to determine the structure and amounts of the compensation of our Named Executive Officers in the 2021 Fiscal Year.

We are asking you to indicate your support for the compensation of our Named Executive Officers as described in this Proxy Statement. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our Named Executive Officers and the philosophy, policies and practices described in this Proxy Statement. Accordingly, we are asking you to approve, on an advisory basis, “For” the following resolution at the Annual Meeting:

RESOLVED, that the compensation paid to LivePerson, Inc.’s Named Executive Officers, as disclosed pursuant to the SEC’s compensation disclosure rules, including the Compensation Discussion and Analysis, the compensation tables and the narrative discussion set forth on pages 37 to 64 of this Proxy Statement, is hereby approved.”

PROXY STATEMENT

 

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Proposal No. 3 Advisory Approval of the Compensation of Our Named Executive Officers

Required Vote

Although, as an advisory vote, this proposal is not binding upon us or the Board, the Compensation Committee, which is responsible for recommending to the full Board the amount and form of compensation to be paid to our executive officers, including our NEOs, will carefully consider the stockholder vote on this matter, along with all other expressions of stockholder views it receives on specific policies and desirable actions. The affirmative vote of a majority of the stock having voting power that is present virtually or represented by proxy at the Annual Meeting at which a quorum is present is required to approve this Proposal No. 3.

The Board unanimously recommends a vote on the proxy card “FOR the approval of the Executive Compensation of our Named Executive Officers.

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LIVEPERSON, INC.

 

Executive Compensation

Executive Compensation