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Form DEF 14A Block, Inc. For: Jun 18

April 26, 2024 4:01 PM
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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

BLOCK, 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 the appropriate box):

☒ 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.


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BLOCK, INC.

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

To Be Held at 12:00 p.m. (U.S. Pacific Time) on Tuesday, June 18, 2024

Dear Stockholders of Block, Inc.:

We cordially invite you to attend the 2024 annual meeting of stockholders (the “Annual Meeting”) of Block, Inc., a Delaware corporation, which will be held virtually on Tuesday, June 18, 2024, at 12:00 p.m. (U.S. Pacific Time). You can attend the Annual Meeting by visiting www.virtualshareholdermeeting.com/SQ2024, where you will be able to listen to the meeting live, submit questions and vote your shares online during the meeting, just as you could at an in-person meeting.

We are holding the Annual Meeting for the following purposes, as more fully described in the accompanying proxy statement:

1.
To elect two Class III directors to serve until our 2027 annual meeting of stockholders and until their successors are duly elected and qualified;
2.
To approve, on an advisory basis, the compensation of our named executive officers;
3.
To ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for our fiscal year ending December 31, 2024; and
4.
To transact such other business as may properly come before the Annual Meeting or any adjournments or postponements thereof.

Our board of directors has fixed the close of business on April 22, 2024 (U.S. Eastern Time) as the record date for the Annual Meeting. Only stockholders of record at the close of business on April 22, 2024 (U.S. Eastern Time) are entitled to notice of, and to vote at, the Annual Meeting. A list of stockholders entitled to vote at the Annual Meeting will be available for examination by any stockholder for any purpose germane to the Annual Meeting for a period of ten days ending the date prior to the date of the Annual Meeting at 1955 Broadway, Suite 600, Oakland, CA 94612. Further information regarding voting rights, the matters to be voted upon and instructions to attend the Annual Meeting is presented in the accompanying proxy statement.

The Notice of Internet Availability of Proxy Materials containing instructions on how to access the proxy statement and our annual report is first being mailed on or about April 26, 2024 to all stockholders entitled to vote at the Annual Meeting. The accompanying proxy statement and our annual report can be accessed by visiting www.proxyvote.com. You will be asked to enter the 16-digit control number located on your Notice of Internet Availability of Proxy Materials, your proxy card or the instructions that accompanied your proxy materials to attend the Annual Meeting.

Holders of record of Chess Depositary Interests (“CDIs”) as of the close of business on April 22, 2024 (U.S. Eastern Time) may vote the shares of our Class A common stock underlying their CDIs through our CDI Depositary, CHESS Depositary Nominees Pty Ltd (“CDN”). Each CDI holder may instruct CDN to vote on behalf of such CDI holder at the Annual Meeting by either voting online at www.investorvote.com.au or contacting Computershare Australia using the details on the Notice of Access Letter to request a hard copy of the CDI voting form to be sent in the mail to their registered address. The CDI Notice of Access Letter is being mailed or emailed from Australia to CDI holders on or about April 29, 2024 (Australia time).

YOUR VOTE IS IMPORTANT. Whether or not you plan to attend the Annual Meeting, we urge you to submit your vote via the Internet, telephone or mail as soon as possible to ensure your shares are represented. For additional instructions on attending the Annual Meeting or voting your shares (or directing CDN to vote if you hold your shares in the form of CDIs), please refer to the section entitled “Questions and Answers About Our Proxy Materials and the Annual Meeting” in this proxy statement. Returning the proxy does not deprive you of your right to attend the Annual Meeting or to vote your shares at the Annual Meeting.

We appreciate your continued support of Block.

 

By order of the Board of Directors,

 

 

 

img77221591_1.jpg 

 

 

 

Jack Dorsey

 

Block Head, Square Head and Chairperson of the Board of Directors

 

 

 

Approximate Date of Mailing of Notice of Internet Availability of Proxy Materials: April 26, 2024

 

 


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TABLE OF CONTENTS

 

 

 

Page

EXECUTIVE SUMMARY

 

i

BOARD OF DIRECTORS AND CORPORATE GOVERNANCE

 

1

Director Nominees

 

2

Continuing Directors

 

2

Director Independence

 

4

Board of Directors Leadership Structure and Role of Our Lead Independent Director

 

4

Board of Directors Meetings and Committees

 

5

Compensation Committee Interlocks and Insider Participation

 

8

Considerations in Evaluating Director Nominees

 

8

Stockholder Recommendations and Nominations to Our Board of Directors

 

9

Communications with Our Board of Directors

 

10

Corporate Governance Guidelines and Code of Business Conduct and Ethics

 

10

Risk Management

 

10

ESG and Corporate Responsibility

 

12

Director Compensation

 

13

Stock Ownership Guidelines

 

16

PROPOSAL NO. 1—ELECTION OF DIRECTORS

 

17

PROPOSAL NO. 2—ADVISORY VOTE ON THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS

 

18

PROPOSAL NO. 3—RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

19

REPORT OF OUR AUDIT AND RISK COMMITTEE

 

21

EXECUTIVE OFFICERS

 

22

EXECUTIVE COMPENSATION

 

23

Compensation Discussion and Analysis

 

23

Compensation Committee Report

 

31

Compensation Risk Assessment

 

32

Compensation Tables

 

32

EQUITY COMPENSATION PLAN INFORMATION

 

40

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

 

41

PAY VERSUS PERFORMANCE

 

44

PAY RATIO DISCLOSURE

 

47

CERTAIN RELATIONSHIPS, RELATED PARTY AND OTHER TRANSACTIONS

 

48

Policies and Procedures for Related Party Transactions

 

49

QUESTIONS AND ANSWERS ABOUT OUR PROXY MATERIALS AND THE ANNUAL MEETING

 

50

OTHER MATTERS

 

57

Delinquent Section 16(a) Reports

 

57

Fiscal Year 2023 Annual Report and SEC Filings

 

57

 

 


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EXECUTIVE SUMMARY

This summary highlights information regarding the 2024 annual meeting of stockholders of Block, Inc., a Delaware corporation (referred to herein as the “Company,” “Block,” “we,” “us” or “our”) contained elsewhere in this proxy statement. This summary does not contain all of the information you should consider, and you should read the entire proxy statement carefully before voting. Throughout this proxy statement, we refer to our 2024 annual meeting of stockholders (and any postponements, adjournments, or continuations thereof) as the “Annual Meeting.”

Information about our 2024 Annual Meeting of Stockholders

Date and Time: Tuesday, June 18, 2024, at 12:00 p.m. (U.S. Pacific Time).

Location: The Annual Meeting will be a completely virtual meeting. You can attend the Annual Meeting by visiting www.virtualshareholdermeeting.com/SQ2024, where you will be able to listen to the meeting live, submit questions, and vote your shares online during the meeting.

Record Date: April 22, 2024 (U.S. Eastern Time).

Voting Matters

 

 

 

Proposals

 

 

Board
Recommendation

 

Page Number for
Additional Information

 

 

1

 

 

To elect Randall Garutti and Mary Meeker to serve as our Class III directors until our 2027 annual meeting of stockholders and until their successors are duly elected and qualified.

 

 

FOR

 

17

 

 

2

 

 

To approve, on an advisory basis, the compensation of our named executive officers.

 

 

FOR

 

18

 

 

3

 

 

To ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for our fiscal year ending December 31, 2024.

 

 

FOR

 

19

 

We will also transact such other business as may properly come before the Annual Meeting or any adjournments or postponements thereof. As of the date of this proxy statement, we have not received notice of any such business.

Information contained on or accessible through our website is not incorporated by reference in this proxy statement, and references to our website address in this proxy statement are inactive textual references only.

 

 

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Corporate Governance Highlights

We are committed to having sound corporate governance principles that we believe promote long-term value and serve the best interest of all our stockholders, sellers, customers and other stakeholders. Some highlights of our corporate governance practices are listed below:

Proactive approach to board of directors pipeline management
7 out of 10 current directors are independent
4 out of 10 current directors are women; 2 out of 10 current directors identify as underrepresented minorities
2 out of 4 current executive officers are women
Separate Lead Independent Director and Chairperson
Strong risk oversight by full board of directors and committees

 

Annual board of directors, committee and individual director evaluations
Significant stock ownership requirements for directors and executive officers
Insider Trading Policy prohibits hedging and pledging transactions
All board committees are 100% independent
Comprehensive clawback policies for our executive officers

Our 2024 Director Nominees

Both of our Class III director nominees currently serve on our board of directors and demonstrate a mix of experiences and perspectives.

 

Name

 

 

Director
Since

 

 

Experience

 

Independent

Board and Committee
Positions

Other Current
Public
Company
Boards

 

Randall Garutti

 

 

2017

 

 

Chief Executive Officer, Shake Shack, Inc.

 

X

Chair, Nominating and Corporate Governance Committee; Compensation Committee

Shake Shack, Inc.

 

Mary Meeker

 

 

2011

 

 

General Partner, Bond Capital

 

X

Chair, Compensation Committee

Next Door Holdings, Inc.

 

 

 

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Executive Compensation Philosophy and Highlights

Our Compensation Philosophy

At Block, we are building an ecosystem of ecosystems, each focused on distinct customer audiences. We define an ecosystem as a set of tools and services that work together cohesively, often positively reinforcing one another. This helps create resilient relationships with customers as they use our tools and services to satisfy multiple needs. Our ecosystems are united by our shared purpose of economic empowerment, with each ecosystem serving different people — sellers, consumers, artists, fans, and developers. As we scale, we are focused on investing in developing connections between our ecosystems and by creating more connections to increase the resilience of our overall company.

Our compensation programs are designed to attract, retain, and grow the best teams that are aligned with this purpose and embody the essential values of our company culture, centered around the following core principles:

Market Competitive: We have a data-driven approach to ensure we stay competitive by benchmarking against industry peers, recognizing that compensation is just one element of our broader value proposition.
Performance-driven: Our programs reward individual and team performance, aligning efforts with corporate success. Through stock-based compensation, we link rewards to shareholder value, and create a merit-based system that recognizes and celebrates impact.
Equitable: We value and differentiate pay based on responsibilities, skills, capability, performance and experience. Simultaneously, we take steps to mitigate the potential influence of bias on compensation decisions, with the goal to foster an inclusive and fair compensation environment.
Simple: Our compensation programs are clear and easy for our employees to understand, minimizing complexity for straightforward communication and administration.

Executive Compensation Highlights

Block Head (our version of Chief Executive Officer) Compensation. At his request, Jack Dorsey receives no cash or equity compensation except for an annual salary of $2.75.
Annual “Say-on-Pay” Vote. We conduct an annual advisory vote on the compensation of our named executive officers. At our 2023 annual meeting of stockholders, approximately 98% of the votes cast on the “say-on-pay” proposal were voted in favor of the named executive officers’ compensation.
Robust Clawback Policies. In addition to the financial restatement clawback policy mandated by the U.S. Securities and Exchange Commission (the “SEC”) and the listing standards of the New York Stock Exchange (the “NYSE”) for Section 16 officers, all covered employees who receive severance via a change of control and severance agreement, including our executive officers, are subject to a severance clawback policy, which permits us to recover certain severance compensation if an employee engages in certain misconduct.

 

Independent Compensation Consultant. Our compensation committee engages its own independent compensation consultant to advise on executive and outside director compensation matters.
Alignment of Compensation with Company Success. A substantial percentage of our executive officers’ compensation aligns with the long-term success of the company through grants of stock options and stock-based awards.
Risk Oversight. Strong oversight by our compensation committee mitigates risk and exposures.
Stock Ownership Guidelines. Our stock ownership guidelines require significant stock ownership levels and are designed to align the long-term interests of our executives and outside directors with those of our stockholders.

 

 

 

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BOARD OF DIRECTORS AND CORPORATE GOVERNANCE

We are committed to having sound corporate governance principles. Our business affairs are managed under the direction of our board of directors, which is currently composed of 10 members. All of our current directors, other than Messrs. Carter, Dorsey and McKelvey, are independent within the meaning of the listing standards of the NYSE. Our board of directors is divided into three staggered classes of directors. At each annual meeting of stockholders, a class of directors will be elected for a three-year term to succeed the class whose term is then expiring.

The following table sets forth the names, ages as of April 26, 2024, and certain other information for each of the members of our board of directors with terms expiring at the Annual Meeting, who are also nominees for election as a director at the Annual Meeting, and for each of the other current members of our board of directors. As previously announced, Ms. Rothstein, who currently serves as a Class III director, will not stand for reelection at the Annual Meeting. Ms. Rothstein’s term will expire at the Annual Meeting.

 

Name

 

Class

 

Age

 

Position

 

Director
Since

 

Current
Term
Expires

 

Expiration of Term
For Which
Nominated

 

 

 

 

 

 

 

 

 

 

 

 

 

Directors with Terms Expiring at the Annual Meeting/Nominees

Randall Garutti(1)(2)

 

III

 

49

 

Director

 

2017

 

2024

 

2027

Mary Meeker(2)

 

III

 

64

 

Director

 

2011

 

2024

 

2027

 

 

 

 

 

 

 

 

 

 

 

 

 

Continuing Directors

Jack Dorsey

 

I

 

47

 

Block Head, Square Head and Chairperson

 

2009

 

2025

 

Paul Deighton(2)(3)

 

I

 

68

 

Director

 

2016

 

2025

 

Neha Narula(1)(3)

 

I

 

42

 

Director

 

2023

 

2025

 

Roelof Botha(2)(3)

 

II

 

50

 

Lead Independent Director

 

2011

 

2026

 

Amy Brooks(1)

 

II

 

49

 

Director

 

2019

 

2026

 

Shawn Carter

 

II

 

54

 

Director

 

2021

 

2026

 

James McKelvey

 

II

 

58

 

Director

 

2009

 

2026

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-Continuing Director

Sharon Rothstein(2)

 

III

 

66

 

Director

 

2022

 

2024

 

 

 

(1)
Member of our nominating and corporate governance committee.
(2)
Member of our compensation committee.
(3)
Member of our audit and risk committee.

 

 

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Director Nominees

Randall Garutti has served as a member of our board of directors since July 2017. Since April 2012, Mr. Garutti has served as Chief Executive Officer and on the board of directors of Shake Shack, Inc. (“Shake Shack”). Mr. Garutti has announced that he expects to step down from both roles effective May 2024 and transition to an advisor role through year end. Prior to becoming Chief Executive Officer of Shake Shack, Mr. Garutti served as its Chief Operating Officer since January 2010. Before Shake Shack, Mr. Garutti was the Director of Operations for Union Square Hospitality Group, LLC, overseeing the operations for all its restaurants. Additionally, Mr. Garutti serves on the board of directors of the Columbus Avenue Business Improvement District, a not-for-profit organization. He previously served on the board of directors of USHG Acquisition Corp. from February 2021 to December 2022. Mr. Garutti holds a B.S. in Hotel Administration from Cornell University’s School of Hotel Administration.

Mr. Garutti was selected to serve on our board of directors because of his business expertise and leadership of a global brand.

Mary Meeker has served as a member of our board of directors since June 2011. Since January 2019, Ms. Meeker has served as a General Partner of Bond Capital. From December 2010 to December 2018, Ms. Meeker served as a General Partner of Kleiner Perkins Caufield & Byers. From 1991 to 2010, Ms. Meeker served as Managing Director and Research Analyst with Morgan Stanley. Ms. Meeker previously served on the boards of directors of LendingClub Corporation, from June 2012 to June 2019, and DocuSign, Inc., from July 2012 to June 2019, and currently serves on the board of directors of Nextdoor Holdings, Inc. and a number of privately held companies as well as the Defense Innovation Board. Ms. Meeker holds a B.A. in Psychology from DePauw University and an M.B.A. from Cornell University.

Ms. Meeker was selected to serve on our board of directors because of her extensive experience advising and analyzing technology companies.

Continuing Directors

Jack Dorsey is our co-founder and has served as our principal executive officer and as a member of our board of directors since July 2009, having previously served as our Chief Executive Officer and President from July 2009 until his title changed to Block Head as of April 2022. Mr. Dorsey has also served as our Square Head since October 2023 and as Chairperson of our board of directors since October 2010. From May 2007 to October 2008, Mr. Dorsey served as President and Chief Executive Officer of Twitter, Inc. (“Twitter”). Mr. Dorsey returned to serve as Chief Executive Officer of Twitter from July 2015 until November 2021. He served on the board of directors of Twitter from May 2007 to May 2022.

Mr. Dorsey was selected to serve on our board of directors because of the perspective and experience he provides as one of our founders and our Block Head, as well as his extensive experience with technology companies and innovation.

Paul Deighton has served as a member of our board of directors since May 2016. In April 2024, it was announced that Mr. Deighton will serve as Chairman of Goldman Sachs International and Goldman Sachs International Bank. Mr. Deighton has served as the non-executive Chairperson of The Economist Group since July 2018 and the non-executive Chairman of Heathrow Airport Holdings Limited, the owner of Heathrow Airport in the United Kingdom since June 2016. From December 2012 to May 2015, Mr. Deighton served as Commercial Secretary to the Treasury and as a member of the House of Lords in the United Kingdom. Mr. Deighton previously served as the Chief Executive Officer of the London Organising Committee of the Olympic and Paralympic Games and held various roles at Goldman Sachs. Mr. Deighton serves as the non-executive Chairperson of Hakluyt Company Limited, an advisory firm. Mr. Deighton holds a B.A. in Economics from Trinity College, Cambridge University.

Mr. Deighton was selected to serve on our board of directors because of his financial and business expertise, as well as his international perspective and his government and regulatory experience.

Neha Narula has served as a member of our board of directors since July 2023. Dr. Narula has served as a Director of the Digital Currency Initiative at the Massachusetts Institute of Technology (“MIT”) Media Lab, an interdisciplinary research lab focusing on cryptocurrencies and blockchain technology, since January 2017, and she previously was the Director of Research in digital currency at MIT Media Lab from May to December 2016. Prior to joining MIT, Dr. Narula was a Senior Software Engineer at Google. Dr. Narula currently serves on the Financial Industry Regulatory Authority’s FinTech Industry Committee and

 

 

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the Federal Reserve Bank of New York’s Innovations Advisory Council. She also previously served on PayPal’s Blockchain, Crypto, and Digital Currencies Advisory Council and the World Economic Forum’s Global Futures Council on Blockchain. Dr. Narula holds a B.A. in Mathematics and Computer Science from Dartmouth College and a Master’s degree and a Ph.D. in Computer Science from MIT.

Dr. Narula was selected to serve on our board of directors because of her experience with distributed systems, cryptography, cryptocurrencies and programmable money.

Roelof Botha has served as a member of our board of directors since January 2011 and as our Lead Independent Director since June 2022. Since January 2003, Mr. Botha has served in various positions at Sequoia Capital, a venture capital firm, including as a Senior Steward and as a Managing Member of Sequoia Capital Operations, LLC. From 2000 to 2003, Mr. Botha served in various positions at PayPal Holdings, Inc., including as Chief Financial Officer. Mr. Botha serves as the Chairman of the board for Unity Software Inc. and on the boards of directors of 23andMe Holding Co., Natera, Inc., MongoDB, Inc. and a number of privately held companies. Mr. Botha previously served on the boards of directors of Bird Global, Inc., from June 2018 to December 2022, and Eventbrite, Inc., from October 2009 to June 2022. Mr. Botha holds a B.S. in Actuarial Science, Economics and Statistics from the University of Cape Town and an M.B.A. from the Stanford Graduate School of Business.

Mr. Botha was selected to serve on our board of directors because of his financial and managerial experience.

Amy Brooks has served as a member of our board of directors since October 2019. Since January 2024, Ms. Brooks has served as President, New Business Ventures at the National Basketball Association, after serving as President, Team Marketing & Business Operations and Chief Innovation Officer from November 2017 to December 2023, the Executive Vice President from May 2014 to November 2017 and Senior Vice President from January 2010 to May 2014. Ms. Brooks also serves on the boards of directors of a number of privately held companies and charitable organizations. Ms. Brooks holds a B.A. in Political Science and Communication from Stanford University and an M.B.A. from the Stanford Graduate School of Business.

Ms. Brooks was selected to serve on our board of directors because of her sales and marketing experience as well as her expertise in growing a global brand.

Shawn Carter has served as a member of our board of directors since May 2021. Known professionally as Jay-Z, Mr. Carter is a musician, songwriter, record executive, producer and entrepreneur. He has served as the co-founder and majority owner of Roc Nation LLC and founder of Marcy Media LLC, a full-service agency and entertainment company, since 2008 and co-founder and Manager of Marcy Venture Partners, L.P., a venture capital and private equity firm, since March 2019. Mr. Carter founded TIDAL, which is now majority owned by Block, in March 2015, and remains a shareholder and artist of the music streaming service. Since 2014, Mr. Carter has served as the co-founder, Manager and board member of Ace of Spades Holdings, LLC, a luxury champagne company, and serves on the boards of directors of a number of privately held companies. Since 2003, Mr. Carter has served as the founder of the Shawn Carter Scholarship Foundation, a charitable organization focused on education. He also serves on the board of directors of REFORM, a philanthropic organization advocating for criminal justice reform. Mr. Carter previously served as the Chief Visionary Officer of TPCO Holding Corp. (“TPCO Holding”) from November 2020 to 2023, and as the Chief Brand Strategist of CMG Partners, Inc., or Caliva, from July 2019 until its acquisition by TPCO Holding in November 2020.

Mr. Carter was selected to serve on our board of directors because of his entrepreneurial experience and expertise in the music industry, which is valuable for our TIDAL business.

James McKelvey is our co-founder and has served as a member of our board of directors since July 2009. Since March 2012, Mr. McKelvey has served in various positions at Mira Smart Conferencing, Inc., a digital conferencing company. Mr. McKelvey currently serves on the board of directors of Emerson Electric Co. and previously served as Chair of the St. Louis Federal Reserve. He also serves on the boards of directors of a number of privately held companies. Mr. McKelvey holds a B.S. in Computer Science and a B.A. in Economics from Washington University in St. Louis.

Mr. McKelvey was selected to serve on our board of directors because of the perspective and experience he brings as one of our founders.

 

 

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Non-Continuing Directors

Sharon Rothstein has served as a member of our board of directors since January 2022. Since October 2018, Ms. Rothstein has served as an Operating Partner at Stripes, LLC (“Stripes”), a growth equity firm. Prior to joining Stripes, Ms. Rothstein served as Executive Vice President, Global Chief Marketing Officer, and subsequently, as Executive Vice President, Global Chief Product Officer of Starbucks Corporation (“Starbucks”) from April 2013 to February 2018. Prior to joining Starbucks, Ms. Rothstein held senior marketing and brand management positions with Sephora, Godiva, Starwood Hotels and Resorts, Nabisco Biscuit Company and Procter & Gamble. Ms. Rothstein serves on the boards of directors of Yelp Inc., InterContinental Hotels Group PLC and a number of privately held companies. She previously served on the board of directors of Afterpay Limited (“Afterpay”) from June 2020 until its acquisition by Block in 2022. Ms. Rothstein holds a Bachelor of Commerce from the University of British Columbia and an M.B.A. from the University of California, Los Angeles.

Ms. Rothstein was appointed to our board of directors in connection with Block’s acquisition of Afterpay. She was selected to serve on our board of directors because of her marketing expertise and global operations experience.

Director Independence

Our Class A common stock is listed on the NYSE. Under NYSE listing standards, independent directors must comprise a majority of a listed company’s board of directors. In addition, NYSE listing standards require that, subject to specified exceptions, each member of a listed company’s audit, compensation and nominating and corporate governance committees be independent. Under NYSE listing standards, a director will only qualify as an “independent director” if, in the opinion of that listed company’s board of directors, that director does not have a material relationship with the company (either directly or as a partner, shareholder or officer of an organization that has a relationship with the company). As noted in the commentary to the listing standards, the concern is independence from management.

Audit and risk committee members must also satisfy the additional independence criteria set forth in Rule 10A-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and NYSE listing standards. Compensation committee members must also satisfy the additional independence criteria set forth in Rule 10C-1 under the Exchange Act and NYSE listing standards.

Our board of directors has undertaken a review of the independence of each of our directors. Based on information provided by each director concerning their background, employment and affiliations, our board of directors has determined that none of Mses. Brooks, Meeker, and Rothstein; Dr. Narula; or Messrs. Botha, Deighton, and Garutti has a material relationship with the Company and that each of these current directors is “independent” as that term is defined under NYSE listing standards. Former director Dr. Lawrence Summers (who resigned from our board of directors on February 9, 2024) was also determined to be independent within the meaning of the NYSE listing standards during the period in which he served on our board of directors. In making the determination of the independence of our directors, the board of directors considered relevant transactions between Block and entities associated with our directors or members of their immediate families, including transactions involving Block and payments made to or from companies and entities in the ordinary course of business where our directors or members of their immediate families serve as partners, directors or as a member of the executive management of the other party to the transaction, and determined that none of these relationships constitute material relationships that would impair the independence of our directors. In addition, each member of our audit and risk committee and our compensation committee meets the enhanced independence standards required for such committee members under the applicable rules and regulations of the SEC and the NYSE listing standards.

Board of Directors Leadership Structure and Role of Our Lead Independent Director

Our board of directors does not have a policy as to whether the roles of the Chairperson of our board of directors and our Block Head should be separate or combined. Our board of directors believes that it should have the flexibility to make this determination as circumstances require and in a manner that it believes is best to provide appropriate leadership for our company. Currently, Mr. Dorsey serves as both the Chairperson of our board of directors and our principal executive officer. As our co-founder and Block Head, Mr. Dorsey is best positioned to identify and drive strategic priorities, oversee product development, identify key areas of risk for the company, lead critical discussions and execute our business plans.

 

 

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Our board of directors has adopted Corporate Governance Guidelines that provide that one of our independent directors should serve as our Lead Independent Director at any time when the Chairperson of our board of directors is not independent. Because Mr. Dorsey is our Chairperson and is not an “independent” director as defined in NYSE listing standards, our board of directors has appointed Roelof Botha as our Lead Independent Director. Mr. Botha, a director since 2011, has served as our Lead Independent Director since June 2022. As a seasoned director with extensive experience in the financial technology industry, Mr. Botha has played an essential role in advising our senior management in key strategic areas and has provided independent oversight in his roles as a member of both our audit and risk committee and our compensation committee, and our board of directors believes that he is a strong, independent and effective Lead Independent Director.

As our Lead Independent Director, Mr. Botha is responsible for, among other matters:

presiding at all meetings of the board of directors at which the Chairperson is not present, including executive sessions of the independent directors;
calling, determining the agenda for and serving as chairperson of meetings of independent directors;
approving the agendas for regularly scheduled meetings of the board of directors and providing feedback on the board meeting schedule;
facilitating discussion and open dialogue among the independent directors both during and outside of board of directors’ meetings, including by presiding over executive sessions;
providing feedback to our Block Head and Chairperson of our board of directors regarding the executive sessions;
alongside with the Chair of our audit and risk committee, consulting with our Block Head on risk matters requiring the consideration of our board of directors;
serving as liaison between the Chairperson of our board of directors and our independent directors, without inhibiting direct communication between them;
in consultation with our nominating and corporate governance committee, reviewing and reporting on the results of our board of directors’ and its committees’ performance self-evaluations;
providing input on the composition of our board of directors;
serving as spokesperson for the Company as requested; and
performing such other responsibilities as may be designated by a majority of our independent directors from time to time.

We believe that our leadership structure of Mr. Dorsey serving as both Chairperson of our board of directors and Block Head, with a separate Lead Independent Director, is appropriate because it provides a balance between Mr. Dorsey’s company-specific experience, leadership and insight and our independent directors’ experience, leadership, oversight and expertise from outside of our company. This structure also enables strong leadership, creates clear accountability and enhances our ability to communicate our strategy clearly and consistently to stockholders while ensuring robust, independent oversight by our board of directors and our independent directors, led by our Lead Independent Director.

Board of Directors Meetings, Attendance and Committees

During our fiscal year ended December 31, 2023, our board of directors held four meetings, and each director attended at least 75% of the aggregate of (i) the total number of meetings of our board of directors held during the period for which such director has served as a director and (ii) the total number of meetings held by all committees of our board of directors on which such director has served during the periods that such director has served as a committee member, except Roelof Botha, who attended 72% of the aggregate of (i) and (ii). Mr. Botha attended all meetings of our board of directors during the fiscal year ended December 31, 2023. Mr. Botha’s absences from committee meetings were largely due to late adjustments to existing meeting schedules. Mr. Botha was briefed on matters covered at committee meetings, which included receipt of presentation materials provided. In addition, Mr. Botha made himself available to management between meetings to consult on specific matters.

 

 

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Although we do not have a formal policy regarding attendance by members of our board of directors at our annual meeting of stockholders, we encourage, but do not require, our directors to attend. All but one of our directors who were serving as directors at the time attended our 2023 annual meeting of stockholders.

Our board of directors has established an audit and risk committee, a compensation committee and a nominating and corporate governance committee. The composition and responsibilities of each of the committees of our board of directors is described below. Members serve on these committees until their resignation or until otherwise determined by our board of directors.

Audit and Risk Committee

Our audit and risk committee currently consists of Messrs. Botha and Deighton and Dr. Narula, with Mr. Deighton serving as Chair. Dr. Summers served on our audit and risk committee throughout 2023 until his departure from our board of directors in February 2024.

Each of our current audit and risk committee members meets (and during his tenure, Dr. Summers met) the requirements for independence for audit committee members under NYSE listing standards and SEC rules and regulations. Each member of our audit and risk committee also meets the financial literacy and sophistication requirements of NYSE listing standards. In addition, our board of directors has determined that each of Messrs. Botha and Deighton is an audit committee financial expert within the meaning of Item 407(d) of Regulation S-K under the Securities Act of 1933, as amended (“Regulation S-K”). Our audit and risk committee is, among other matters, responsible for the following:

selecting and hiring a qualified independent registered public accounting firm to audit our financial statements;
helping to ensure the independence and performance of the independent registered public accounting firm;
reviewing our financial statements and discussing the scope and results of the independent audit and quarterly reviews with the independent registered public accounting firm, and reviewing, with management and the independent registered public accounting firm, our interim and year-end results of operations and the reports and certifications regarding internal controls over financial reporting and disclosure controls;
preparing, reviewing and approving the audit and risk committee report that the SEC requires to be included in our annual proxy statement;
reviewing the adequacy and effectiveness of our disclosure controls and procedures, and overseeing procedures established for employees to submit concerns anonymously about questionable accounting or audit matters;
reviewing and discussing with management our program and policies on risk assessment and risk management, including risks associated with data privacy, data security and cybersecurity;
reviewing and discussing with management the overall adequacy and effectiveness of our legal, regulatory and compliance programs;
reviewing and overseeing related party transactions for which review or oversight is required by applicable law or required to be disclosed in our financial statements or SEC filings; and
approving or, as required, pre-approving, all audit and all permissible non-audit services and fees to be performed by the independent registered public accounting firm.

Our audit and risk committee charter provides that, consistent with NYSE listing standards, no member of our audit and risk committee should simultaneously serve on the audit committees of more than two additional public companies unless our board of directors determines that such simultaneous service would not impair the ability of such member to effectively serve on our audit and risk committee and we disclose such determination. Our board of directors has considered Mr. Botha’s simultaneous service on the audit committees of three additional public companies and has determined that such simultaneous service does not impair his ability to effectively serve as a member of our audit and risk committee. We believe that Mr. Botha’s financial and managerial experience continue to provide valuable insight.

 

 

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Our audit and risk committee operates under a written charter that satisfies the applicable rules and regulations of the SEC and NYSE listing standards. A copy of the charter of our audit and risk committee is available on our investor relations website at https://investors.block.xyz. Information on or accessible through our website is not incorporated by reference in this proxy statement. During 2023, our audit and risk committee held eight meetings.

Compensation Committee

Our compensation committee consists of Mses. Meeker and Rothstein and Messrs. Botha, Deighton and Garutti, with Ms. Meeker serving as Chair. Mr. Garutti was appointed to our compensation committee in April 2024. Each of our compensation committee members, as well as Ms. Rothstein, who will serve on the compensation committee until the expiration of her term as a member of our board of directors at the Annual Meeting, meets the requirements for independence for compensation committee members under NYSE listing standards and SEC rules and regulations, including Rule 10C-1 under the Exchange Act. Each of Mses. Meeker and Rothstein and Messrs. Botha and Deighton is also a “non-employee director” as defined pursuant to Rule 16b-3 promulgated under the Exchange Act. Our compensation committee is, among other matters, responsible for the following:

reviewing and approving, or making recommendations to our board of directors regarding, the compensation of our Section 16 officers;
overseeing our overall compensation philosophy and compensation policies, plans and benefits programs, including those for our Section 16 officers;
evaluating and making recommendations to our board of directors regarding the compensation of our directors; and
administering our equity compensation plans.

Our compensation committee operates under a written charter that satisfies the applicable rules and regulations of the SEC and NYSE listing standards. A copy of the charter of our compensation committee is available on our investor relations website at https://investors.block.xyz. During 2023, our compensation committee held six meetings.

Our compensation committee may delegate its authority and duties to subcommittees or individuals as it deems appropriate and in accordance with applicable laws and regulations. Our compensation committee has delegated authority to our management equity committee, which during 2023 consisted of our Block Head and People Lead, to make equity grants within predetermined guidelines to employees and consultants who are not our Section 16 officers or members of our management equity committee. In addition, our compensation committee may establish, and has in the past established, a subcommittee comprised of members of our compensation committee, which has the nonexclusive authority to grant equity and other awards under our compensation plans, including, if applicable, awards that comply with Section 16 of the Exchange Act, including Rule 16b-3 thereunder.

Nominating and Corporate Governance Committee

Our nominating and corporate governance committee currently consists of Ms. Brooks, Dr. Narula and Mr. Garutti, with Mr. Garutti serving as Chair. Each of our nominating and corporate governance committee members meets the requirements for independence under NYSE listing standards and SEC rules and regulations. Our nominating and corporate governance committee is, among other matters, responsible for the following:

identifying, evaluating and making recommendations to our board of directors regarding nominees for election to our board of directors and its committees;
evaluating the performance of our board of directors, individual directors and our Block Head;
considering and making recommendations to our board of directors regarding the composition of our board of directors and its committees;
reviewing and making recommendations to our board of directors regarding our Corporate Governance Guidelines and our Code of Business Conduct and Ethics;

 

 

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overseeing our process for stockholder communications with the board of directors;
overseeing our commitment to inclusion and diversity (“I&D”), including our I&D policies and programs, and conducting a periodic review of our I&D efforts with our People Lead and Inclusion and Diversity Lead;
conducting periodic reviews of our environmental, social, and governance (“ESG”) programming and corporate responsibility initiatives;
reviewing and monitoring compliance with our Code of Business Conduct and Ethics and other actual and potential conflicts of interest of our board of directors and corporate officers, other than transactions with related parties reviewed by our audit and risk committee; and
reviewing the succession planning for our Block Head, as well as each of our other members of our executive management team.

Our nominating and corporate governance committee operates under a written charter that satisfies the applicable NYSE listing standards. A copy of the charter of our nominating and corporate governance committee is available on our investor relations website at https://investors.block.xyz. During 2023, our nominating and corporate governance committee held four meetings.

Compensation Committee Interlocks and Insider Participation

None of the current members of our compensation committee, or any member that served during the past fiscal year, is or has been an officer or employee of our company, or had any relationship requiring disclosure under Item 404 of Regulation S-K. None of our executive officers currently serves, or in the past fiscal year has served, as a member of the board of directors or compensation committee (or other board committee performing equivalent functions) of any entity that has one or more of its executive officers serving on our compensation committee. None of our executive officers currently serves, or in the past fiscal year has served, as a member of the compensation committee (or other board committee performing equivalent functions) of any entity that has one or more of its executive officers serving on our board of directors.

Considerations in Evaluating Director Nominees

Our nominating and corporate governance committee uses a variety of methods for identifying and evaluating director nominees, which may include reviewing candidates whom our stockholders have properly submitted for recommendation or retaining a third-party executive search firm to identify and review candidates. We maintain policies and procedures for director candidates, which require our nominating and corporate governance committee to evaluate director candidates in light of the current size and composition, organization and governance of our board of directors and the needs of our board of directors and its committees. There is no difference in the evaluation process of a director candidate recommended by a stockholder as compared to the evaluation process of a candidate identified by any other means. Some of the qualifications that our nominating and corporate governance committee considers include, without limitation:

Character, integrity and judgment: Nominees must have the highest personal and professional ethics.
Diversity: Although our board of directors does not have specific requirements with respect to board diversity, it believes that our board should be diverse, including with respect to factors such as gender, race, ethnicity and experience. Representation and diversity of perspective is important in furthering our purpose of economic empowerment and how we build for the customers we serve. Our nominating and corporate governance committee has adopted a practice for open director positions that ensures we are consistently considering diverse slates of candidates.
Area of expertise: Nominees must also have the ability to offer advice and guidance to our Block Head and other members of management based on proven achievement and expertise in their fields.
Potential conflicts of interest and other commitments: Nominees must understand the fiduciary responsibilities that are required of a member of our board of directors and have sufficient time

 

 

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available to perform all board of director responsibilities. Members of our board of directors are expected to prepare for, attend and participate in all board of directors’ meetings.
Other individual qualities and attributes: Our nominating and corporate governance committee may also consider such other factors as it may deem, from time to time, to be in our and our stockholders’ best interests.

After completing its review and evaluation of director candidates, our nominating and corporate governance committee recommends to our full board of directors the director nominees for selection. While factors relating to diversity were considered for our current directors, no single factor was determinative with respect to any of our current directors.

 

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Stockholder Recommendations and Nominations to our Board of Directors

Our nominating and corporate governance committee will consider director candidates recommended by stockholders holding the lesser of: (i) $2,000 in market value or (ii) one percent (1%) on a fully diluted basis of the Company’s securities continuously for at least twelve (12) months prior to the date of the submission of the recommendation, so long as such recommendations comply with our amended and restated certificate of incorporation, our amended and restated bylaws and any applicable laws, rules and regulations, including those promulgated by the SEC. Our nominating and corporate governance committee will evaluate such recommendations in accordance with its charter, our amended and restated bylaws and our policies and procedures for director candidates, as well as the director nominee criteria described above that is applicable to all director candidates. This process is designed to ensure that our board of directors includes members with diverse backgrounds, skills and experience, including appropriate financial and other expertise relevant to our business. Eligible stockholders may recommend a candidate for nomination by submitting the recommendation in writing to our Chief Legal Officer and Corporate Secretary or legal department at Block, Inc., 1955 Broadway, Suite 600, Oakland, CA 94612. Such recommendation must include information about the candidate, a statement of support by the recommending stockholder, evidence of the recommending stockholder’s ownership of our capital stock and a signed letter from the candidate confirming willingness to serve on our board of directors. Our nominating and corporate governance committee has discretion to decide which individuals to recommend for nomination as directors.

Under our amended and restated bylaws, stockholders may also directly nominate persons for our board of directors. Any nomination must comply with the requirements set forth in our amended and restated bylaws and should be sent in writing to our Corporate Secretary at Block, Inc., 1955 Broadway, Suite 600, Oakland, CA 94612. To be timely for our 2025 annual meeting of stockholders, our Corporate Secretary must receive the nomination no earlier than the close of business on February 18, 2025 and no later than the close of business on March 20, 2025, or in the event that we hold our 2025 annual meeting of stockholders more than 30 days before or more than 60 days after the one-year anniversary of the Annual Meeting, no earlier than the close of business on the 120th day before our 2025 annual meeting of stockholders and no later than the close of business on the later of either (i) the 90th day prior to our 2025 annual meeting of stockholders or (ii) the 10th day following the day on which public announcement of the date of our 2025 annual meeting of stockholders is first made if such first public announcement is less than 100 days prior to the date of our 2025 annual meeting of stockholders. Any notice of director nomination submitted must include the information required by Rule 14a-19(b) under the Exchange Act.

 

 

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Communications with Non-Management Members of Our Board of Directors

Interested parties wishing to communicate with our non-management members of our board of directors may do so by writing to the particular non-management member or members of our board of directors, and mailing the correspondence via registered or overnight mail to our Chief Legal Officer and Corporate Secretary at Block, Inc., 1955 Broadway, Suite 600, Oakland, CA 94612. Each communication should set forth (i) the name and address of the interested party (as it appears on our books, if applicable) and if the shares of our common stock are held by a nominee, the name and address of the beneficial owner of such shares, and (ii) the class and number of shares of our common stock that are owned of record by the record holder and beneficially by the beneficial owner.

Our Chief Legal Officer and Corporate Secretary, or legal department, in consultation with appropriate members of our board of directors as necessary, will review all incoming communications and, if appropriate, forward such communications to the appropriate non-management member or members of our board of directors, or if none is specified, to the Chairperson of our board of directors or the Lead Independent Director if the Chairperson of our board of directors is not independent.

Corporate Governance Guidelines and Code of Business Conduct and Ethics

Our board of directors has adopted Corporate Governance Guidelines that address items such as the qualifications and responsibilities of our directors and director candidates and the responsibilities of members of committees of our board of directors. In addition, our board of directors has adopted a Code of Business Conduct and Ethics that applies to all of our employees, officers and directors, including our Block Head, Chief Financial Officer and other executive and senior financial officers. The full texts of our Corporate Governance Guidelines and our Code of Business Conduct and Ethics are posted on our investor relations website at https://investors.block.xyz. We will post amendments to our Corporate Governance Guidelines and our Code of Business Conduct and Ethics and any waivers of our Code of Business Conduct and Ethics for directors and executive officers on the same website.

Risk Management

Our board of directors recognizes the oversight of risk management as one of its primary responsibilities and central to maintaining an effective, risk-aware and accountable organization. The oversight responsibility of our board of directors and its committees is supported by management reporting processes that are designed to provide visibility to our board of directors regarding the identification, assessment and management of risks and management’s strategic approach to risk mitigation. The Chair of our audit and risk committee meets with our Internal Audit Lead, Chief Financial Officer, Chief Compliance Officer and Chief Legal Officer on a regular cadence to identify and discuss risks and exposures, and escalate potential issues to our audit and risk committee or board of directors, as appropriate.

As part of our overall risk management process, we conduct an annual Enterprise Risk Assessment (“ERA”), which is shared and discussed with our board of directors. Oversight of the ERA is supported and enabled by our audit and risk committee. Our board of directors’ oversight of the ERA framework includes a routine evaluation, with discussions with key management and outside advisors, as appropriate, of the processes used to identify, assess, monitor and report on risks across the organization and the setting and communication of the organization’s implementation and measurement of risk tolerances, limits and mitigation. Our board of directors, management and functional leaders of our ERA define our primary risk focus areas for review. These areas include strategic, operational, people, financial and compliance. We address risks such as cybersecurity, financial reporting and competition within each of these areas.

While our board of directors maintains ultimate responsibility for the oversight of risk, it has implemented a multi-layered approach that delegates certain responsibilities to the appropriate board committees to ensure that these primary areas of focus are discussed in appropriate detail and that a full understanding of the applicable risk is obtained. Our board of directors and its committees oversee risks associated with their respective areas of responsibility, as summarized below. Each board committee meets in executive session with key management personnel and representatives of outside advisors as required or requested. Our board of directors may delegate additional risk areas to its committees in the future.

 

 

 

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Board of Directors /
Committee

Primary Areas of Risk Oversight

Full Board of Directors

Strategic, financial and execution risks and exposures associated with our business strategy, policy matters, succession planning, data privacy, data security, and cybersecurity, significant litigation and regulatory exposures and other current matters that may present material risk to our financial performance, operations, infrastructure, plans, prospects or reputation, acquisitions and divestitures and our operational infrastructure.

Audit and Risk Committee

Risks and exposures associated with financial matters, particularly financial reporting, tax, accounting, disclosure controls and procedures, internal control over financial reporting, investment guidelines and credit and liquidity matters, our programs and policies relating to legal and regulatory compliance, and operational security and reliability. In addition, our audit and risk committee assists our board of directors with oversight of certain matters related to privacy, data security and cybersecurity.

Nominating and Corporate Governance Committee

Risks and exposures associated with director and executive succession planning; director and corporate officer conflicts of interest, other than transactions with related persons reviewed by our audit and risk committee; environmental, social, corporate governance, inclusion and diversity, and corporate responsibility matters; and overall board and committee effectiveness and composition.

Compensation Committee

Risks and exposures associated with leadership assessment, retention and succession, executive compensation programs and arrangements and our compensation philosophy and practices.

Board’s Role in Data Privacy and Cybersecurity Oversight

While our board of directors maintains ultimate responsibility for the oversight of our data privacy and cybersecurity program and risks, it has delegated certain responsibilities to our audit and risk committee. Our board of directors and audit and risk committee’s principal role is one of oversight, recognizing that management is responsible for the design, implementation, and maintenance of an effective program for protecting against and mitigating data privacy and cybersecurity risks. The audit and risk committee assists our board of directors in enhancing its understanding of data privacy and cybersecurity issues by overseeing our data privacy and information security programs, strategy, policies, standards, architecture, processes, and significant risks, as well as overseeing responses to security and data incidents, as appropriate.

Our full board of directors undergoes annual information security and privacy training by our Chief Information Security Officer (“CISO”) and our Chief Privacy Officer (“CPO”), which covers, among other matters, our privacy and cybersecurity programs and risks. Our audit and risk committee receives updates, at least quarterly, from our CISO and CPO on significant data privacy and security risks, including any significant incidents, relevant industry developments, threat vectors and significant risks identified in periodic penetration tests or vulnerability scans. These updates also include significant legal and legislative developments concerning data privacy and security, our approach to complying with applicable law, and significant engagement with regulators concerning data privacy and cybersecurity. Our audit committee provides regular updates to the board of directors on such reports. For additional information regarding our cybersecurity governance, please refer to our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

 

 

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ESG and Corporate Responsibility

Our nominating and corporate governance committee oversees our corporate responsibility initiatives. We maintain our steadfast focus on driving economic empowerment through our broad spectrum of products and services. In alignment with this product-driven focus on financial inclusion, we believe that operating in a responsible and sustainable manner helps support long-term shareholder value, builds a more resilient and efficient company, and helps us mitigate against potential environmental risk factors. Our strong commitment to social responsibility is designed to amplify the reach and depth of the positive impact we strive to deliver through our ecosystem of ecosystems. This holds true for both our internal and external stakeholders including customers, artists, sellers, employees, key suppliers, and our investor community. During 2023 and early 2024, we met with several investors to review our ongoing ESG initiatives. We discussed key updates on our climate action program as well as inclusion and diversity metrics. We also discussed data security and privacy, as well as our governance structure and composition.

We take an integrated approach to managing ESG performance and disclosure:

Functional Leadership: Corporate responsibility is managed at a functional level across each of our teams, with responsibility for oversight rolling up to our senior executives.
Operational Leadership: We have formed a cross-functional working group from multiple business areas that serves as the central coordinating body for our corporate responsibility efforts. This team is led by an ESG Lead who oversees the broader ESG program, connects our key stakeholders, and reports up to senior leadership and our nominating and corporate governance committee.
Board Oversight: Our nominating and corporate governance committee is responsible for overseeing ESG and corporate responsibility matters of significance to us and receives both quarterly reports and updates on these matters from our ESG Lead. The nominating and corporate governance committee also receives quarterly Inclusion and Diversity reports from our People Lead and Inclusion and Diversity Lead.
Corporate Social Responsibility Report: We released our 2023 Corporate Social Responsibility Report (“CSR Report”), which was prepared to highlight information regarding our ESG programs. The CSR Report provides an overview of our global operations with a focus on the four key priority areas discussed below. Our CSR Report can be found on our investor relations website at https://investors.block.xyz.

 

Key areas of focus for our ESG strategy are:

Supporting Our Customers and Communities: We continue to make progress on our 2020 commitment to invest $100 million in minority and underserved communities to further our purpose of economic empowerment, including with our racial equity investment program. We hope this program can serve as a model for other organizations interested in making similar commitments. As of December 31, 2023, we deployed $44.3 million in aggregate toward this initiative, with each organization receiving funds hand-selected by a cross-functional team of our employees. As an example, in 2023, we announced our first social impact investment in Australia: a $3 million AUD deployment to the First Australians Capital (“FAC”) Catalytic Impact Fund. FAC, a national Indigenous-led fund manager and business advisory organization, has worked with over 800 Indigenous businesses and leveraged more than $70 million AUD in capital to scale sustainable Indigenous businesses. FAC invests into Indigenous-led businesses that have historically had to rely on unsuitable, costly financial products from traditional banks. This investment reflects our enduring commitment to supporting small businesses and entrepreneurs throughout Australia.
Global Climate Action: In 2023, we continued to scale our climate action program. We expanded our decarbonization portfolio, retiring 100,000 tons of high-quality carbon removal credits, drove down our internal carbon emissions, and continued our commitment to transparency with our climate risk and opportunity disclosures through the CDP (previously the Carbon Disclosure Project). We received verification of our internal carbon reduction goals from the Science-Based Targets Initiative, shared our Sustainability Accounting Standards Board (“SASB”) framework within our 2023 CSR Report, and added disclosures in compliance with California climate disclosure requirement AB 1305 to our Investor Relations website. We believe we are on pace toward our goal of reaching net zero carbon for operations by 2030. To that end, in 2023, our gross carbon emissions decreased despite strong business growth, leading to a reduction in our carbon

 

 

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intensity relative to gross profit. We continue to target increased efficiencies across our entire value chain.
Our People: We believe equity and access are essential to economic empowerment. Inclusion and diversity are at the heart of the workplace we are building. We continue to provide transparency regarding the diversity of our workforce, including continuing to share our EEO-1 consolidated report. Our ongoing efforts to celebrate diversity and operate with fairness and equity include: dedicating resources to our 14 employee resources groups, now with 50+ chapters globally; embedding checks and analyses within our systems to combat bias and advance fairness in promotion and compensation; embedding an inclusion analysis within our twice-annual employee engagement survey; setting a baseline for candidate slate diversity to ensure we consistently consider slates inclusive of talent from underrepresented backgrounds. Our annual Inclusion report can be found on our Investor Relations website.
Corporate Governance: In 2023, we continued corporate governance practices that we believe promote long-term value, engender public trust and serve the best interest of our stockholders, sellers, customers and other stakeholders. Some highlights of our corporate governance practices are our Lead Independent Director, who has a comprehensive scope of responsibilities; a board of directors that is comprised of a majority of independent directors with a wide range of expertise; annual review of our corporate governance policies and charters; robust process for developing a pipeline for potential director candidates; strong risk oversight by the full board and committees; annual board, committee, and individual director self-assessments and significant stock ownership requirements for directors and executive officers.

Director Compensation

Pursuant to our Outside Director Compensation Policy, our outside directors receive compensation in the form of equity granted under the terms of our 2015 Equity Incentive Plan, as amended and restated (the “2015 Plan”), and cash, as described below. Our 2015 Plan contains maximum limits on the size of the equity awards that can be granted to each of our outside directors in any fiscal year, but those maximum limits do not reflect the intended size of any potential grants or a commitment to make any equity award grants to our outside directors in the future. The only commitment to make equity award grants to our outside directors is under our Outside Director Compensation Policy, as it may be amended from time to time. The maximum limits under our 2015 Plan provide that no outside director may be granted, in any fiscal year, equity awards having a grant date fair value (determined in accordance with generally accepted accounting principles (“GAAP”)) of more than $1 million, provided that the limit is $2 million in connection with the director’s initial service as an outside director. Equity awards granted to an individual while they were an employee or a consultant, but not an outside director, do not count for purposes of these limits.

Our compensation committee periodically reviews our Outside Director Compensation Policy, including review of competitive practices provided by Compensia, Inc., an independent compensation consulting firm engaged by our compensation committee (“Compensia”). In 2023, based on data provided by Compensia, our average total direct compensation per director (including annual cash retainer and equity awards) approximated the 10th percentile amongst our compensation peer group identified below in the section entitled “Executive Compensation—Compensation-Setting Process—Competitive Positioning.”

Equity Compensation.

Initial Award. Subject to any limits in our 2015 Plan, each person who first becomes an outside director will receive an initial grant of restricted stock units (“RSUs”) on the date of their appointment having a grant date fair value (determined in accordance with GAAP) equal to $250,000 multiplied by a fraction: (i) the numerator of which is (x) 12 minus (y) the number of months between the date of the last annual meeting of stockholders and the date the outside director becomes a member of our board of directors and (ii) the denominator of which is 12. However, if a person first becomes an outside director on the day of an annual meeting of stockholders, they will only receive an annual award (described below) on such date, but will not receive an initial award. The shares of our Class A common stock underlying the RSUs vest in full upon the earlier of (i) the first anniversary of the grant date or (ii) the date of the next annual meeting of stockholders, in each case subject to continued service through the vesting date. If the appointment date is the same as the date of annual meeting, then such outside director will only be granted an annual award.

 

 

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Annual Award. On the date of each annual meeting of stockholders, and subject to any limits in our 2015 Plan, each of our outside directors is granted RSUs having a grant date fair value (determined in accordance with GAAP) equal to $250,000. The shares of our Class A common stock underlying the RSUs vest in full upon the earlier of (i) the first anniversary of the grant date or (ii) on the date of the next annual meeting of stockholders, in each case subject to continued service through the vesting date.

Our Lead Independent Director receives an annual grant of RSUs, in addition to the annual grant provided to all outside directors, on the date of each annual meeting of stockholders having a grant date fair value (determined in accordance with GAAP) of $70,000, subject to any limits in our 2015 Plan. The shares of our Class A common stock underlying the RSUs vest in full upon the earlier of (i) the first anniversary of the grant date or (ii) the date of the next annual meeting of stockholders, in each case subject to continued service through the vesting date.

The awards granted to an outside director under our Outside Director Compensation Policy will become fully vested upon a “change in control” as defined in our 2015 Plan.

Cash Compensation. Each of our outside directors receives an annual cash retainer of $40,000 for serving on our board of directors. In addition, each year, outside directors are eligible to receive the following cash fees for service on the committees of our board of directors.

 

Board Committee

 

Chair Fee ($)

 

 

Member Fee ($)

 

Audit and Risk Committee

 

 

20,000

 

 

 

10,000

 

Compensation Committee

 

 

15,000

 

 

 

5,000

 

Nominating and Corporate Governance Committee

 

 

10,000

 

 

 

2,500

 

 

Subject to any limits under our 2015 Plan, each outside director may elect to convert any cash compensation that they would otherwise be entitled to receive under our Outside Director Compensation Policy into an award of RSUs under our 2015 Plan. If the outside director makes this election in accordance with the policy, each such award of RSUs will be granted on the first business day following the last day of the fiscal quarter for which the cash compensation otherwise would be paid under the policy, will be fully vested on the grant date, and will cover a number of shares equal to (A) the aggregate amount of cash compensation otherwise payable to the outside director on that date divided by (B) the closing price per share as of the last day of the fiscal quarter for which the grant relates.

2023 Compensation

The following table provides information regarding the total compensation that was earned by each of our outside directors in 2023. Mr. Walker and Dr. Summers served as directors until August 1, 2023 and February 9, 2024, respectively. Dr. Narula began her service as a director on July 27, 2023.

The amounts under the “Stock Awards” column represent the aggregate of initial or annual equity compensation provided under the Outside Director Compensation Policy, and equity grants made in lieu of cash compensation, each as detailed in footnotes 2 and 3, respectively. The aggregate number of stock awards outstanding for each director at December 31, 2023 are included in footnote 2 below.

 

Director

 

Fees Earned or
Paid in Cash
($)

 

 

Stock Awards
($)
(1)(2)(3)

 

 

All Other
Compensation
($)

 

 

Total ($)

 

Roelof Botha

 

 

 

 

 

374,618

 

 

 

 

 

 

374,618

 

Amy Brooks

 

 

 

 

 

292,220

 

 

 

 

 

 

292,220

 

Shawn Carter

 

 

 

 

 

289,720

 

 

 

 

 

 

289,720

 

Paul Deighton

 

 

65,000

 

 

 

249,959

 

 

 

 

 

 

314,959

 

Randall Garutti

 

 

50,000

 

 

 

249,959

 

 

 

 

 

 

299,959

 

James McKelvey

 

 

 

 

 

289,720

 

 

 

 

 

 

289,720

 

Mary Meeker

 

 

 

 

 

304,642

 

 

 

 

 

 

304,642

 

Neha Narula

 

 

 

 

 

236,125

 

 

 

 

 

 

236,125

 

Sharon Rothstein

 

 

45,000

 

 

 

249,959

 

 

 

 

 

 

294,959

 

Lawrence Summers

 

 

50,000

 

 

 

249,959

 

 

 

 

 

 

299,959

 

Darren Walker

 

 

 

 

 

290,243

 

 

 

 

 

 

290,243

 

 

 

(1)
The amounts included in the “Stock Awards” column represent the aggregate grant date fair value of RSU awards calculated in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 (“ASC 718”). The amount does not necessarily correspond to the actual value

 

 

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recognized by the outside director. The valuation assumptions used in determining such amounts are described in the section entitled “Share-based Compensation” of Note 17, Stockholders' Equity in the Notes to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.
(2)
The amounts included in the “Stock Awards” column represent the annual awards or initial awards of RSUs, as applicable, granted to our outside directors in 2023. Each of our outside directors (other than Mr. Botha) received a grant of 3,815 RSUs on June 13, 2023, with a grant date fair value of $249,959. Mr. Botha received a grant of 4,883 RSUs on June 13, 2023, with a grant date fair value of $319,934. Each of these RSU awards vest and settle on the earlier of the first anniversary of the grant date or the date of our Annual Meeting, subject to the director’s continued service through the vesting date. In addition, Dr. Narula received a grant of 3,024 RSUs upon her appointment date of July 27, 2023, with a grant date fair value of $229,128 that will vest on the earlier of July 27, 2024 or the date of the Annual Meeting, subject to the director’s continued service through the vesting date.
(3)
The amounts included in the “Stock Awards” column includes the awards of RSUs granted to our outside directors in lieu of cash retainers in 2023, which are described below. Each of these awards vested and settled in full on the grant date.

 

Name

 

Grant Date

 

Number of RSUs
Granted

 

 

Grant Date Fair
Value ($)

 

 

Total Cash Retainer Forgone ($)

 

Roelof Botha

 

January 3, 2023

 

 

218

 

 

 

14,092

 

 

 

13,750

 

 

 

April 3, 2023

 

 

200

 

 

 

13,566

 

 

 

13,750

 

 

 

July 3, 2023

 

 

206

 

 

 

13,637

 

 

 

13,750

 

 

 

October 2, 2023

 

 

310

 

 

 

13,389

 

 

 

13,750

 

 

 

 

 

 

 

 

 

 

 

 

 

Amy Brooks

 

January 3, 2023

 

 

169

 

 

 

10,924

 

 

 

10,625

 

 

 

April 3, 2023

 

 

154

 

 

 

10,446

 

 

 

10,625

 

 

 

July 3, 2023

 

 

159

 

 

 

10,526

 

 

 

10,625

 

 

 

October 2, 2023

 

 

240

 

 

 

10,366

 

 

 

10,625

 

 

 

 

 

 

 

 

 

 

 

 

 

Shawn Carter

 

January 3, 2023

 

 

159

 

 

 

10,278

 

 

 

10,000

 

 

 

April 3, 2023

 

 

145

 

 

 

9,835

 

 

 

10,000

 

 

 

July 3, 2023

 

 

150

 

 

 

9,930

 

 

 

10,000

 

 

 

October 2, 2023

 

 

225

 

 

 

9,718

 

 

 

10,000

 

 

 

 

 

 

 

 

 

 

 

 

 

Jim McKelvey

 

January 3, 2023

 

159

 

 

 

10,278

 

 

 

10,000

 

 

 

April 3, 2023

 

145

 

 

 

9,835

 

 

 

10,000

 

 

 

July 3, 2023

 

150

 

 

 

9,930

 

 

 

10,000

 

 

 

October 2, 2023

 

225

 

 

 

9,718

 

 

 

10,000

 

 

 

 

 

 

 

 

 

 

 

 

 

Mary Meeker

 

January 3, 2023

 

 

218

 

 

 

14,092

 

 

 

13,750

 

 

 

April 3, 2023

 

 

200

 

 

 

13,566

 

 

 

13,750

 

 

 

July 3, 2023

 

 

206

 

 

 

13,637

 

 

 

13,750

 

 

 

October 2, 2023

 

 

310

 

 

 

13,389

 

 

 

13,750

 

 

 

 

 

 

 

 

 

 

 

 

 

Neha Narula

 

October 2, 2023

 

162

 

 

 

6,997

 

 

 

7,174

 

 

 

 

 

 

 

 

 

 

 

 

 

Darren Walker

 

January 3, 2023

 

 

169

 

 

 

10,924

 

 

 

10,625

 

 

 

April 3, 2023

 

 

175

 

 

 

11,870

 

 

 

12,042

 

 

 

July 3, 2023

 

 

197

 

 

 

13,041

 

 

 

13,125

 

 

 

October 2, 2023

 

 

103

 

 

 

4,449

 

 

 

4,565

 

Directors may be reimbursed for their reasonable expenses for attending board and committee meetings. Directors who are also our employees receive no additional compensation for their service as directors. During 2023, only Mr. Dorsey was an employee. For additional information regarding Mr. Dorsey’s compensation, refer to the section entitled “Executive Compensation.

 

 

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Stock Ownership Guidelines

Our board of directors has adopted stock ownership guidelines to ensure ongoing alignment of the interests of our directors and executive officers with the long-term interests of our stockholders. Our guidelines require that (i) each non-employee director own a number of shares of our common stock with a value equal to at least five times their annual cash retainer, (ii) each executive officer (other than the Block Head) own a number of shares of our common stock with a value equal to at least three times their annual base salary and (iii) the Block Head own a number of shares of our common stock with a value equal to at least the greater of (x) five times their annual base salary and (y) $2 million. Each non-employee director and executive officer is required to comply with our stock ownership guidelines within five years from their promotion or hiring as an executive officer or election to our board of directors. Until a non-employee director or executive officer has satisfied their applicable level of ownership, they are required to retain an amount equal to fifty percent (50%) of the net shares received from any new equity award granted after the adoption of the guidelines. As of December 31, 2023, all of our non-employee directors and executive officers had met or were on track to comply with these stock ownership guidelines within the applicable time periods.

 

 

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PROPOSAL NO. 1
ELECTION OF DIRECTORS

In accordance with our amended and restated certificate of incorporation, our board of directors is divided into three staggered classes of directors. Two of our Class III directors, Mr. Garutti and Ms. Meeker, are standing for election at the Annual Meeting for a three-year term.

Each director’s term continues until the election and qualification of their successor, or such director’s earlier death, resignation or removal. Any increase or decrease in the number of directors will be distributed among the three classes so that, as nearly as possible, each class will consist of one-third of our directors.

Nominees

Our nominating and corporate governance committee has recommended, and our board of directors has approved, Mr. Randall Garutti and Ms. Mary Meeker as nominees for election as Class III directors at the Annual Meeting. If elected, both Mr. Garutti and Ms. Meeker will serve as Class III directors until our 2027 annual meeting of stockholders and until their successors are duly elected and qualified. Both of the nominees are currently a director of our company. For additional information regarding our nominees for the board of directors, refer to the section entitled “Board of Directors and Corporate Governance.”

If you are a stockholder of record and you sign your proxy card or vote by telephone or over the Internet, but do not give instructions with respect to the voting of directors, your shares will be voted “FOR” the election of Mr. Garutti and Ms. Meeker. Mr. Garutti and Ms. Meeker have both agreed to serve as a director if elected; however, in the event that a director nominee is unable or declines to serve as a director at the time of the Annual Meeting, the proxies will be voted for any nominee designated by our board of directors to fill such vacancy. If you are a street name stockholder and you do not give voting instructions to your broker or nominee, your broker will leave your shares unvoted on this matter.

Vote Required

The election of directors requires a plurality of the voting power of the shares of our common stock present virtually or by proxy at the Annual Meeting and entitled to vote thereon to be approved. Broker non-votes will have no effect on this proposal.

 

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” EACH OF THE NOMINEES NAMED ABOVE.

 

 

 

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PROPOSAL NO. 2
ADVISORY VOTE ON THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”) enables our stockholders to approve, on an advisory or non-binding basis, the compensation of our named executive officers as disclosed pursuant to Section 14A of the Exchange Act. This proposal, commonly known as a “Say-on-Pay” proposal, gives our stockholders the opportunity to express their views on our named executive officers’ compensation. This vote is not intended to address any specific item of compensation or any specific named executive officer, but rather the overall compensation of all of our named executive officers and the philosophy, policies and practices described in this proxy statement. We currently hold our Say-on-Pay vote every year.

The Say-on-Pay vote is advisory, and therefore is not binding on us, our compensation committee or our board of directors. The Say-on-Pay vote will, however, provide information to us regarding investor sentiment about our executive compensation philosophy, policies and practices, which our compensation committee will consider when determining executive compensation for the remainder of the current fiscal year and beyond. Our board of directors and our compensation committee value the opinions of our stockholders. To the extent there is any significant vote against the compensation of our named executive officers as disclosed in this proxy statement, we will endeavor to communicate with stockholders to better understand the concerns that influenced the vote and consider our stockholders’ concerns, and our compensation committee will evaluate whether any actions are necessary to address those concerns.

We believe that the information provided in the section entitled “Executive Compensation,” and in particular the information discussed in the section entitled “Executive Compensation—Compensation Philosophy,” demonstrates that our executive compensation program was designed appropriately and is working to ensure management’s interests are aligned with our stockholders’ interests to support long-term value creation. Accordingly, we ask our stockholders to vote “FOR” the following resolution at the Annual Meeting:

“RESOLVED, that the stockholders approve, on an advisory basis, the compensation paid to our named executive officers, as disclosed in the proxy statement for the Annual Meeting pursuant to the compensation disclosure rules of the SEC, including the compensation discussion and analysis, compensation tables and narrative discussion and other related disclosure.”

Vote Required

The approval, on an advisory basis, of the compensation of our named executive officers requires the affirmative vote of a majority of the voting power of the shares of our common stock present virtually or by proxy at the Annual Meeting and entitled to vote thereon. Abstentions will have the effect of a vote against this proposal, and broker non-votes will have no effect.

As an advisory vote, the result of this proposal is non-binding. Although the vote is non-binding, our board of directors and our compensation committee value the opinions of our stockholders and will consider the outcome of the vote when making future compensation decisions for our named executive officers.

 

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE APPROVAL, ON AN ADVISORY BASIS, OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS.

 

 

 

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PROPOSAL NO. 3

RATIFICATION OF APPOINTMENT OF

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Our audit and risk committee has appointed Ernst & Young LLP (“EY”) as our independent registered public accounting firm to audit our consolidated financial statements for our fiscal year ending December 31, 2024. During our fiscal year ended December 31, 2023, EY served as our independent registered public accounting firm.

Notwithstanding the appointment of EY, and even if our stockholders ratify the appointment, our audit and risk committee, in its discretion, may appoint another independent registered public accounting firm at any time during our fiscal year if our audit and risk committee believes that such a change would be in the best interests of our company and our stockholders. At the Annual Meeting, our stockholders are being asked to ratify the appointment of EY as our independent registered public accounting firm for our fiscal year ending December 31, 2024. Although not required by applicable law or listing rules, our audit and risk committee is submitting the appointment of EY to our stockholders because we value our stockholders’ views on our independent registered public accounting firm and as a matter of good corporate governance. Representatives of EY will be present at the Annual Meeting, and they will have an opportunity to make a statement and will be available to respond to appropriate questions from our stockholders.

If our stockholders do not ratify the appointment of EY, our audit and risk committee may reconsider the appointment.

Fees Paid to the Independent Registered Public Accounting Firm

The following table presents fees for professional audit services and other services rendered to our company by EY for our fiscal years ended December 31, 2022, and December 31, 2023, respectively.

 

 

 

2022

 

 

2023

 

 

 

(in thousands)

 

Audit Fees(1)

 

$

11,797

 

 

$

13,533

 

Audit-Related Fees(2)

 

 

 

 

 

 

Tax Fees(3)

 

 

725

 

 

 

902

 

All Other Fees(4)

 

 

8

 

 

 

3

 

Total Fees

 

$

12,530

 

 

$

14,438

 

 

 

(1)
Consist of professional services rendered in connection with the audit of our annual consolidated financial statements, including audited financial statements presented in our Annual Report on Form 10-K for the fiscal years ended December 31, 2022 and 2023 and services that are normally provided by the independent registered public accountants in connection with statutory and regulatory filings or engagements for those fiscal years.
(2)
Consist of fees for professional services for assurance and related services that are reasonably related to the performance of the audit or review of our consolidated financial statements and are not reported under “Audit Fees.” These services could include accounting consultations concerning financial accounting and reporting standards, due diligence procedures in connection with acquisitions and procedures related to other attestation services.
(3)
Consist of fees for professional services for tax compliance, tax advice and tax planning. These services include consultation on tax matters and assistance regarding federal, state and international tax compliance.
(4)
Consist of license fees for the use of accounting research software.

Auditor Independence

In our fiscal year ended December 31, 2023, there were no other professional services provided by EY, other than those listed above, that would have required our audit and risk committee to consider their compatibility with maintaining the independence of EY.

Audit and Risk Committee Policy on Pre-Approval of Audit and Permissible Non-Audit Services of Independent Registered Public Accounting Firm

Our audit and risk committee has established a policy governing our use of the services of our independent registered public accounting firm. Under this policy, our audit and risk committee is required

 

 

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to pre-approve all audit, internal control-related services and permissible non-audit services performed by our independent registered public accounting firm in order to ensure that the provision of such services does not impair the public accountants’ independence. All services provided by EY for our fiscal year ended December 31, 2023, were pre-approved by our audit and risk committee pursuant to this policy.

Vote Required

The ratification of the appointment of EY as our independent registered public accounting firm for our fiscal year ending December 31, 2024, requires the affirmative vote of a majority of the voting power of the shares of our common stock present virtually or by proxy at the Annual Meeting and entitled to vote thereon. Abstentions will have the effect of a vote against this proposal. Because this is a routine proposal, we do not expect broker non-votes on this proposal.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.

 

 

 

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REPORT OF THE AUDIT AND RISK COMMITTEE

The audit and risk committee is a committee of our board of directors comprised solely of independent directors as required by New York Stock Exchange (“NYSE”) listing standards and the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). The composition of the audit and risk committee, the attributes of its members and the responsibilities of the audit and risk committee, as reflected in its charter, are intended to be in accordance with applicable requirements for corporate audit committees. With respect to our financial reporting process, our management is responsible for (1) establishing and maintaining internal controls and (2) preparing our consolidated financial statements. Our independent registered public accounting firm, Ernst & Young LLP (“EY”), is responsible for performing an independent audit of our consolidated financial statements. It is the responsibility of the audit and risk committee to oversee these activities. It is not the responsibility of the audit and risk committee to prepare our financial statements. These are the fundamental responsibilities of management. In the performance of its oversight function, the audit and risk committee has:

reviewed and discussed the audited financial statements for the fiscal year ended December 31, 2023 with management and EY;
discussed with EY the matters required to be discussed by the applicable requirements of the Public Accounting Oversight Board (“PCAOB”) and the SEC; and
received the written disclosures and the letter from EY required by applicable requirements of the PCAOB regarding the independent accountant’s communications with the audit and risk committee concerning independence, and has discussed with EY its independence.

Based on the audit and risk committee’s review and discussions with management and EY, the audit and risk committee recommended to the board of directors that the audited financial statements be included in the Annual Report on Form 10-K for the fiscal year ended December 31, 2023, for filing with the SEC.

Respectfully submitted by the members of the audit and risk committee of the board of directors:

Paul Deighton (Chair)

Roelof Botha

Neha Narula

This report of the audit and risk committee is required by the SEC and, in accordance with the SEC’s rules, will not be deemed to be part of or incorporated by reference by any general statement incorporating by reference this proxy statement into any filing under the Securities Act of 1933, as amended (“Securities Act”), or under the Securities Exchange Act of 1934, as amended (“Exchange Act”), except to the extent that we specifically incorporate this information by reference, and will not otherwise be deemed “soliciting material” or “filed” under either the Securities Act or the Exchange Act.

 

 

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EXECUTIVE OFFICERS

The following table identifies certain information about our executive officers as of April 26, 2024. Our executive officers are appointed by, and serve at the discretion of, our board of directors. There are no family relationships among any of our directors or executive officers.

Name

 

 

Age

 

 

Position

Jack Dorsey

 

 

47

 

 

Block Head, Square Head and Chairperson

Amrita Ahuja

 

 

44

 

 

Chief Operating Officer and Chief Financial Officer

Chrysty Esperanza

 

 

45

 

 

Chief Legal Officer and Corporate Secretary

Brian Grassadonia

 

 

41

 

 

CEO Cash App

For biographical information for Jack Dorsey, refer to the section entitled “Board of Directors and Corporate Governance.

Amrita Ahuja has served as our Chief Operating Officer since February 2023, and as our Chief Financial Officer since January 2019. From March 2018 to January 2019, Ms. Ahuja served as the Chief Financial Officer of Blizzard Entertainment, Inc., a division of Activision Blizzard, Inc. Beginning in June 2010, she served in various positions at Activision Blizzard, Inc., including as Senior Vice President of Investor Relations from January 2015 to May 2018, Vice President, Finance and Operations from August 2012 to January 2015 and Vice President, Strategy and Business Development from June 2010 to August 2012. Ms. Ahuja currently serves on the boards of directors of Airbnb, Inc. and a privately held company. She holds a B.A. in economics from Duke University and an M.B.A. from Harvard Business School.

Chrysty Esperanza has served as our Chief Legal Officer and Corporate Secretary since February 2023, having previously served as our General Counsel since December 2021 and Assistant Corporate Secretary since June 2021. From April 2020 to December 2021, Ms. Esperanza served as our Deputy General Counsel and from October 2013 to April 2020, she served as our Counsel Lead. Ms. Esperanza currently serves on the board of trustees for the San Francisco Friends School and the board of directors of the San Francisco Public Library. Ms. Esperanza holds a B.A. in Mass Communication/Business Administration from the University of California, Los Angeles and a J.D. from the University of California College of the Law, San Francisco (formerly known as the University of California, Hastings College of Law).

Brian Grassadonia has served as CEO of Cash App (formerly referred to as Cash App Lead) since January 2013. From May 2012 to January 2013, Mr. Grassadonia served as our Director of Product Development, as well as our Director of Growth from February 2011 to May 2012. He joined the Company in September 2010 and served as Product Manager until February 2011. Mr. Grassadonia currently serves on the board of directors of a privately held company. Mr. Grassadonia holds a Bachelor of Applied Science (BASc) in Management Science from the University of California, San Diego.

 

 

 

 

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EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

This Compensation Discussion and Analysis summarizes the material components of our executive compensation program and our executive compensation policies, practices and material compensation decisions for 2023 for our “named executive officers.” Our named executive officers for 2023 were:

 

Jack Dorsey

Block Head, Square Head and Chairperson

Amrita Ahuja(1)

Chief Operating Officer and Chief Financial Officer

Chrysty Esperanza

Chief Legal Officer and Corporate Secretary

Brian Grassadonia

CEO Cash App

Alyssa Henry(2)

Former CEO Square

 

 

 

(1)
Ms. Ahuja was appointed Chief Operating Officer in February 2023.
(2)
Ms. Henry’s employment with Block ended on October 2, 2023. She is included as a named executive officer because she would have been one of the three most highly compensated executive officers for the fiscal year ended December 31, 2023 had she remained employed as an executive officer as of December 31, 2023.

Compensation Philosophy

At Block, we are building an ecosystem of ecosystems, each focused on distinct customer audiences. We define an ecosystem as a set of tools and services that work together cohesively, often positively reinforcing one another. This helps create resilient relationships with customers as they use our tools and services to satisfy multiple needs. Our ecosystems are united by our shared purpose of economic empowerment, with each ecosystem serving different people — sellers, consumers, artists, fans, and developers. As we scale, we are focused on investing in developing connections between our ecosystems and by creating more connections to increase the resilience of our overall company.

Our compensation programs are designed to attract, retain, and grow the best teams that are aligned with this purpose and embody the essential values of our company culture, centered around the following core principles:

Market Competitive: We have a data-driven approach to ensure we stay competitive by benchmarking against industry peers, recognizing that compensation is just one element of our broader value proposition.
Performance-driven: Our programs reward individual and team performance, aligning efforts with corporate success. Through stock-based compensation, we link rewards to shareholder value, and create a merit-based system that recognizes and celebrates impact.
Equitable: We value and differentiate pay based on responsibilities, skills, capability, performance and experience. Simultaneously, we take steps to mitigate the potential influence of bias on compensation decisions, with the goal to foster an inclusive and fair compensation environment.
Simple: Our compensation programs are clear and easy for our employees to understand, minimizing complexity for straightforward communication and administration.

Compensation Design and Objectives

In 2023, we continued to maintain a simplified approach to employee and executive compensation. Compensation for our named executive officers consists largely of base salary and equity awards intended to align incentives to grow our business. Equity incentives are provided through a combination of stock options and restricted stock-based awards. We believe that this combination provides an appropriate mix of performance-driven appreciation opportunities through stock options, and alignment of rewards with the long-term interests of our stockholders through restricted stock-based awards. We have not implemented a company-wide performance-based cash incentive plan for our employees, including our named executive officers, in order to conserve cash and maintain a simplified compensation program that focuses on delivering long-term growth rather than short-term results.

 

 

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The primary objective of our executive compensation program is to drive long-term stockholder value. We seek to achieve this objective by designing our executive compensation programs to:

recruit and retain talented individuals who can develop, implement and deliver on long-term value creation strategies by using reasonable and competitive pay packages focused on long-term executive retention;
motivate our executives to deliver the highest level of individual, team and Company performance; and
provide heavier weighting (over 90% of aggregate named executive officer compensation during 2023) toward equity-based compensation directly tied to the long-term value and growth of our company and to align the interests of our executives with those of our stockholders.

For 2023, we made the following executive compensation decisions:

Block Head and Square Head Compensation: Mr. Dorsey requested that our compensation committee continue to provide him with no cash or equity compensation except for an annual base salary of $2.75. Our compensation committee considered Mr. Dorsey’s request in light of his significant ownership position, determined that Mr. Dorsey’s financial incentives are strongly aligned with the interests of long-term stockholders without further compensation and, therefore, approved Mr. Dorsey’s request. Mr. Dorsey continues to participate in several company-wide benefit programs, such as our disability insurance coverages, on the same basis as our other salaried, full-time employees.
Base Salaries: In April 2023, we adjusted the base salary levels of Mses. Ahuja, Henry, and Esperanza and Mr. Grassadonia, after consideration of a competitive market analysis, and after taking into consideration each executive’s performance and contributions over the prior year and our desire to retain our highly qualified executive team. While cash compensation for our executives remains generally lower than when compared to our peer benchmarks, these adjustments improve the competitive alignment of executive base salaries.
Equity Awards: Annual equity awards were made through a combination of stock options and RSUs to each of our named executive officers (other than our Block Head) to provide them with additional incentives to remain with us and to maintain alignment of our total compensation programs with the competitive market.
Executive Separation: We entered into a Separation and Release Agreement with Ms. Henry in connection with her separation. For additional information regarding the terms of the agreement, refer to the section entitled “Potential Payments upon Termination or Change of Control.”
Clawback policies: Our compensation committee recommended, and our board of directors adopted, a financial restatement clawback policy in accordance with SEC and NYSE requirements, in addition to a severance clawback policy, which permits us to recover certain severance compensation paid to any covered individual subject to a severance agreement in the case of misconduct.

We conduct a comprehensive review of our compensation philosophy, objectives and design, including a review of our executive compensation program, on an annual cycle. We may implement new compensation plans and arrangements for our named executive officers and/or employees where we deem necessary or appropriate, including to attract or retain high-caliber talent to our organization or provide incentives for them to drive Block’s success.

Impact of 2023 Stockholder Advisory Vote on Executive Compensation

In June 2023, we conducted a non-binding, advisory vote on the compensation of our named executive officers, commonly referred to as a “say-on-pay” vote, at our 2023 annual meeting of stockholders. Our stockholders overwhelmingly voted to approve the compensation of the named executive officers, with approximately 98% of the votes cast in favor of our executive compensation program.

Our compensation committee was mindful of this strong support, and after considering this advisory vote result and evaluating our executive compensation policies and practices throughout 2023, determined

 

 

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that we should maintain the compensation philosophy and objectives from prior years and retain our general approach to executive compensation. As a result, our compensation committee decided to continue to provide compensation with an emphasis on equity compensation that rewards our most senior executives when they deliver value for our stockholders.

Consistent with the recommendation of our board of directors and the approval of our stockholders in connection with the advisory vote on the frequency of future say-on-pay votes conducted at our 2022 annual meeting of stockholders, the board of directors has determined to hold annual advisory votes on the compensation of our named executive officers. The next advisory vote on the frequency of future say-on-pay votes will occur at our 2028 annual meeting of stockholders.

Compensation-Setting Process

Role of Our Compensation Committee

Our compensation committee administers and determines the parameters of the executive compensation program. Our compensation committee currently consists of Mses. Meeker and Rothstein and Messrs. Botha, Deighton and Garutti, with Ms. Meeker serving as Chair. Mr. Garutti was appointed to our compensation committee in April 2024. Each of our compensation committee members, as well as Ms. Rothstein, who will serve on the compensation committee until the expiration of her term as a member of the board of directors at the Annual Meeting, qualifies as an “independent director” for purposes of the listing standards of the NYSE. Each of Mses. Meeker and Rothstein and Messrs. Botha and Deighton also qualify as a “non-employee director” as defined pursuant to Rule 16b-3 promulgated under the Exchange Act. Our compensation committee may establish, and has in the past established, a subcommittee to which it delegates authority to grant and administer equity awards, in order to help promote compliance with Section 16 of the Exchange Act. For purposes of the discussion below, references to “compensation committee” shall mean the “subcommittee” for all actions taken with respect to such awards in 2023, except as otherwise noted.

Under its charter, our compensation committee reviews, approves and determines, or makes recommendations to our board of directors regarding, executive officer compensation. For additional information on our compensation committee, including its authority, refer to the section entitled “Board of Directors and Corporate Governance—Board Meetings and Committees—Compensation Committee.

Role of Management

Our Block Head, People Lead and members of our People team provide our compensation committee with information on corporate and individual performance, market data and their perspectives and recommendations on compensation matters. No named executive officer participates in deliberations regarding their own compensation.

For named executive officers who are hired externally, their initial compensation arrangements are determined through negotiations with each named executive officer. Typically, our Block Head provides input on the terms of these arrangements, with the oversight and final approval of our board of directors or our compensation committee. Compensation for individuals promoted into named executive officer positions is recommended by our Block Head and our People Lead, and reviewed and approved by the compensation committee.

In reviewing compensation for existing named executive officers, our compensation committee solicits input from our Block Head and our People Lead. Our compensation committee reviews their input on capability, job complexity and overall assessment of individual performance and contributions of each executive. Our compensation committee values our Block Head’s perspective and input on each named executive officer’s performance and contributions to our business. The input of our Block Head is an important factor that our compensation committee uses in making its executive compensation decisions, along with input from our external compensation advisors on market trends.

Role of Compensation Consultant

Our compensation committee has the authority to engage its own advisors to assist in carrying out its responsibilities. In 2023, our compensation committee continued to engage Compensia, an independent compensation consultant, to assist with its duties, including providing advice relating to our compensation peer group selection as well as providing support and specific analyses with regard to compensation data

 

 

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and formulation of recommendations for executive and outside director compensation. Compensia reports directly to our compensation committee and not to management, is independent from us and has provided no other services to us.

Our compensation committee has assessed the independence of Compensia, taking into account, among other matters, the enhanced independence standards and factors set forth in Exchange Act Rule 10C-1 and the applicable listing standards of the NYSE, and concluded that there are no conflicts of interest regarding the work that Compensia performs for our compensation committee.

Competitive Positioning

In determining the compensation for our named executive officers, our compensation committee, with assistance from Compensia, reviews the compensation practices and levels of our compensation peer group. This compensation peer group analysis is used to assess whether our executive compensation program and individual compensation levels for our named executive officers are appropriately positioned to attract and retain high-performing talent.

Our compensation peer group is set forth below and was established for 2023 with input from Compensia. The compensation peer group was developed using a rules-based/mechanical approach and reflects publicly-traded companies with similar industry, geography and financial characteristics as us (including revenues of approximately forty percent (0.4x) to two and one half times (2.5x) and a market capitalization of approximately one quarter (0.25x) to four times (4.0x) Block’s respective levels at the time the peer group was selected). The group was further refined to include companies with one-year revenue growth greater than 10% or market capitalization per employee greater than $3 million. Our compensation committee intends to regularly review our compensation peer group and the underlying criteria to assess whether it remains appropriate for review and comparison purposes.

Following a review of our 2022 peer group companies, it was deemed that all peer group companies met the desired criteria for inclusion in our 2023 peer group. As such, the Committee approved no changes to the peer group for 2023. Accordingly, the compensation peer group used to inform our 2023 compensation decisions were:

 

Adobe

Fiserv

ServiceNow

Uber Technologies

Affirm Holdings

Global Payments

Shopify

Workday

Autodesk

Intuit

Snap

Zoom Video

Coinbase Global

Palo Alto Networks

Twilio

 

eBay

PayPal Holdings

Twitter

 

 

Relative to our compensation peer group above, at the time of approval of our peer group in July 2022, Block ranked at the 82nd percentile on a trailing four quarters GAAP revenue basis and at the 57th percentile on a market capitalization basis.

In addition to the companies listed above, our compensation committee reviewed the executive compensation programs and practices of Alphabet, Amazon, Apple, Facebook, Intel, IBM, Microsoft and salesforce.com for reference purposes only. We compete for talent with these reference companies, and our compensation committee believed it was important to understand their compensation practices in order to remain competitive.

Our compensation committee supplemented the compensation data from our compensation peer group with analysis of data from the Radford Compensation Survey. For this additional analysis, our compensation committee reviewed aggregate data from the Radford survey participants that were also members of our compensation peer group.

Though its analysis of competitive market data informs its decisions, our compensation committee also applies its subjective judgment in determining the pay levels of individual named executive officers. Additional factors our compensation committee considers when making its compensation decisions include

 

 

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input from our Block Head and our People Lead, company performance, individual performance and experience, individual skills and expertise, each named executive officer’s role and/or retention and incentive objectives.

Elements of Executive Compensation

Consistent with our compensation philosophy, our executive compensation program consists of only two primary elements: base salary and long-term incentive compensation in the form of equity awards. During 2023, we provided no cash-based incentive compensation opportunities to our named executive officers, instead focusing on linking compensation to stockholder value by using equity awards as the primary means of incentive compensation. We do not use specific formulas or weightings in determining the allocation between base salary and long-term incentive compensation; instead, each named executive officer’s compensation has been individually designed to provide a combination of fixed and at-risk compensation to provide incentives to achieve our objectives.

We also provide severance and change of control benefits for our named executive officers as part of our executive compensation program. To remain consistent with our compensation goals of fairness and simplicity, each named executive officer (other than our Block Head) is entitled to severance and change of control benefits based on the same formulas.

Our named executive officers also participate in several company-wide health and welfare benefit plans that are generally available to our other employees.

Base Salary

Base salary for our named executive officers is the fixed component of our executive compensation program. We use base salary to compensate our named executive officers for services rendered during the year and to recognize the experience, skills, knowledge and responsibilities required of each named executive officer. We apply no specific formula to determine adjustments to base salary. We continue to provide base salaries that are conservative relative to competitive market pay levels.

In April 2023, our compensation committee reviewed the base salaries of Mses. Ahuja, Esperanza, and Henry, and Mr. Grassadonia, taking into consideration a competitive market analysis performed by Compensia, the recommendations of our Block Head and our People Lead, the desire to retain our highly qualified executive team and the other factors described above. Following this review, our compensation committee approved an increase in the annual base salary levels for Mses. Ahuja, Esperanza, and Henry, and Mr. Grassadonia to $565,000, in each case effective as of April 1, 2023, in order to improve competitive alignment with our peers. In addition, our compensation committee determined that it was appropriate to keep our Block Head’s 2023 base salary level at $2.75 per year, at the request of our Block Head and with compensation committee approval.

The annualized base salaries of our named executive officers as of December 31, 2023, compared to December 31, 2022, were:

 

Named Executive Officer

 

Annual Base
Salary as of
December 31,
2022

 

 

Annual Base
Salary as of
December 31,
2023

 

 

Percentage
Increase

 

 

Jack Dorsey

 

$

2.75

 

 

$

2.75

 

 

 

0

%

 

Amrita Ahuja

 

$

525,000

 

 

$

565,000

 

 

 

7.6

%

 

Chrysty Esperanza

 

$

525,000

 

 

$

565,000

 

 

 

7.6

%

 

Brian Grassadonia

 

$

525,000

 

 

$

565,000

 

 

 

7.6

%

 

Alyssa Henry

 

$

525,000

 

 

$

565,000

 

 

 

7.6

%

 

 

Equity Compensation

We believe that sustainable long-term corporate performance is achieved with a corporate culture that encourages a long-term focus by all of our employees. We seek to incentivize this focus in our employees, including our named executive officers, through the use of equity-based awards, the value of which depends on the performance of our stock.

 

 

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Equity awards are central to our executive compensation program, which is designed to promote fairness, maintain simplicity and provide rewards based on demonstrable performance. Equity ownership aligns the interests of our named executive officers with the interests of our stockholders by enabling them to participate in the long-term appreciation of the value of our common stock. Additionally, equity awards provide an important tool for us to retain our named executive officers, as awards are subject to vesting over a multi-year period subject to continued service with the company. Typically, these awards vest over four years, contingent on continued service, and the awards to our named executive officers in 2023 followed this practice.

Our executive compensation program provides equity incentives through a mix of stock options and restricted stock-based awards (currently awarded in the form of RSUs). Stock options provide executives with an opportunity to participate in stock price appreciation above their exercise price, creating incentives to continue to drive growth. Awards of RSUs create alignment with our long-term stockholders by providing both upside and downside tied to company performance. A mix of award types is also consistent with competitive practice among our peers. In determining the mix of stock options and RSUs for 2023, our compensation committee, with input from our Block Head, our People Lead and Compensia, considered competitive market practices and the retention and performance incentives of outstanding equity holdings and determined that a mix of approximately 50% stock options and 50% RSUs, based on the target grant value of the awards, provided appropriate incentives for the named executive officers in 2023. We do not have an established set of criteria for granting equity awards. Instead, our compensation committee has exercised its judgment and discretion, in consultation with our Block Head and our People Lead, and considered, among other factors, the role and responsibility of each named executive officer, competitive factors, the amount of equity compensation already held by our named executive officer (and the extent to which it was vested) and the cash compensation to be received by our named executive officer, to determine and approve the size and terms of new equity awards.

In 2023, we granted annual equity awards to our named executive officers described in the table below. In determining the size and terms of these annual equity awards for Mses. Ahuja, Henry, and Esperanza and Mr. Grassadonia, our compensation committee, with input from our Block Head, our People Lead and Compensia, considered the past and expected future key contributions of each of these named executive officers, the extent to which their existing equity awards were vested and the competitive market data for similarly situated executives. Our compensation committee believed it was appropriate to grant each of them new equity awards to help achieve our retention goals and further align their compensation with the competitive market.

 

Named Executive Officer

 

Number of Securities
Underlying Options
(#)
(1)

 

 

RSUs (#)(2)

 

 

Grant Date
Fair Value
($)

 

Amrita Ahuja

 

 

178,973

 

 

 

107,354

 

 

 

15,984,722

 

Chrysty Esperanza

 

 

46,118

 

 

 

27,663

 

 

 

4,118,955

 

Brian Grassadonia

 

 

157,901

 

 

 

94,714

 

 

 

11,488,150

 

Alyssa Henry(3)

 

 

125,232

 

 

 

75,118

 

 

 

9,111,298

 

 

 

(1)
One forty-eighth of the shares subject to the option vest each month following the March 20, 2023, vesting commencement date, subject to continued service with the Company. The award is subject to certain acceleration of vesting provisions under Mses. Ahuja’s, Esperanza’s and Henry’s and Mr. Grassadonia’s change of control and severance agreements.
(2)
With respect to the RSUs, one-sixteenth of the total RSUs vest in equal quarterly installments over four years beginning on May 20, 2023, subject to continued service with the Company. The award is subject to certain acceleration of vesting provisions under Mses. Ahuja’s, Esperanza’s and Henry’s and Mr. Grassadonia’s change of control and severance agreements.
(3)
Ms. Henry’s employment with Block ended on October 2, 2023. Ms. Henry forfeited the portion of the equity awards she received in 2023 that otherwise was scheduled to vest after March 11, 2024, after taking into account the vesting acceleration she received in connection with her separation. For additional information, refer to the section entitled “Potential Payments upon Termination or Change of Control.”

 

 

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Mr. Dorsey did not receive any equity awards in 2023 at his request, and because our compensation committee believed that his existing equity ownership position sufficiently aligned his interests with those of our stockholders.

On October 2, 2023, we entered into a Separation Agreement and Release with Ms. Henry in connection with the cessation of her employment (the “Henry Separation Agreement”). The Henry Separation Agreement memorialized Ms. Henry’s severance arrangements on terms consistent with her change of control and severance agreement as previously disclosed, and subject to the terms and conditions under such change of control and severance agreement. Specifically, the Henry Separation Agreement provides that any equity awards under the 2015 Plan held by Ms. Henry that would have vested during the severance period (161 days) would be deemed to automatically accelerate as of the date of Ms. Henry’s termination, subject to Ms. Henry’s execution and non-revocation of the Henry Separation Agreement. Additionally, the Henry Separation Agreement provided that Ms. Henry’s Restricted Stock Units would be settled on the 61st day following Ms. Henry’s last day of employment and Ms. Henry’s option awards would remain exercisable for three months following the last day of her employment.

No Special Retirement, Health or Welfare Benefits

Our named executive officers are eligible to participate in our employee benefit programs on the same basis as our other salaried employees. We maintain a tax-qualified retirement plan (“401(k) Plan”) that provides eligible employees with an opportunity to save for retirement on a tax-advantaged basis. Eligible employees are able to participate in the 401(k) Plan as of the date they meet the 401(k) Plan’s eligibility requirements, and participants are able to defer up to 65% of their eligible compensation subject to applicable annual tax limits. All participants’ interests in their deferrals are 100% vested when contributed. The 401(k) Plan permits us to make matching contributions and profit-sharing contributions. For the plan year beginning on January 1, 2023, we made a matching contribution equal to 100% of participants’ pre-tax and Roth contributions up to $2,000 and after that, 50% of participants’ pre-tax and Roth contributions up to a maximum matching contribution of $5,000 per participant. We have not made any profit-sharing contributions to date.

Our health and welfare benefits include medical; dental and vision; disability insurance; basic life insurance coverage; accidental death and dismemberment insurance and a monthly wellness allowance. We design our employee benefits programs to be affordable and competitive in relation to the market and compliant with applicable laws and practices. We adjust our employee benefits programs as needed based upon changes in applicable laws and market practices.

Limited Perquisites and Other Personal Benefits

We do not provide perquisites or other personal benefits to our named executive officers, except in limited situations where we believe it is appropriate to assist an individual in the performance of their duties, to make our named executive officers more efficient and effective and for recruitment and retention purposes.

Employment Agreements with Named Executive Officers

We have entered into a confirmatory employment letter with each of our named executive officers. The confirmatory employment letter has no specific term and provides for at-will employment.

Post-Employment Compensation

We have entered into change of control and severance agreements with our named executive officers that provide for certain specified payments and benefits if a termination of employment occurs under specified circumstances, including following a change of control of our company. We believe these protections are necessary to provide our valuable executives with incentives to forgo other employment opportunities and remain employed with us and to maintain continued focus and dedication to their responsibilities to maximize stockholder value, including if there is a potential transaction that could involve a change of control. In addition, these protections are available only if a named executive officer executes and does not revoke a general release of claims in our favor. The terms of these agreements were determined by our compensation committee, with input from our management team, following a review of analysis prepared by Compensia of relevant market data for other companies with whom we compete for executive talent.

 

 

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For a summary of the material terms of the change of control and severance agreements and an estimate of the payments and benefits that may be received by our named executive officers under these arrangements, or with respect to Ms. Henry, the payments and benefits that were received in connection with her separation from employment with us, refer to the section entitled “Potential Payments upon Termination or Change of Control.

Other Compensation Information

Hedging and Pledging Prohibitions

We have an Insider Trading Policy, which, among other matters, prohibits our employees, including officers, or directors from making short sales, engaging in transactions in publicly traded options (such as puts and calls) and other derivative securities relating to our common stock, pledging any of our securities as collateral for a loan, and holding any of our securities in a margin account, whether such securities are granted as compensation or are held, directly or indirectly, by the employee or director. This prohibition extends to any hedging or similar transaction designed to decrease the risks associated with holding our securities.

Deductibility of Executive Compensation

Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), generally limits the amount we may deduct from our federal income taxes for compensation paid to our Block Head and certain other executive officers to $1 million per executive officer per year, subject to certain exceptions. Neither our compensation committee nor any authorized subcommittee, as applicable, has adopted a policy that all equity or other compensation must be deductible.

When approving the amount and form of compensation for our executive officers, we generally consider all elements of the cost to us of providing such compensation, including the potential impact of Section 162(m) of the Code, as well as our need to maintain flexibility in compensating executive officers in a manner designed to promote our goals. Our compensation committee or its authorized subcommittee, as applicable, may, in its judgment, authorize compensation payments that will or may not be deductible when it believes that such payments are appropriate to attract, retain or motivate executive talent.

Taxation of Parachute Payments and Deferred Compensation

We do not provide, and have no obligation to provide, any of our named executive officers with a “gross-up” or other reimbursement payment for any tax liability they might owe because of the application of Sections 280G, 4999 or 409A of the Code. If any of the payments or benefits provided for under the change of control and severance agreements or otherwise payable to a named executive officer would constitute “parachute payments” within the meaning of Section 280G of the Code and could be subject to the related excise tax, they would receive either full payment of such payments and benefits or such lesser amount that would cause no portion of the payments and benefits being subject to the excise tax, whichever results in the greater after-tax benefits to our named executive officer.

Accounting for Share-Based Compensation

Our compensation committee considers accounting effects in designing compensation plans and arrangements for our executive officers and other employees. Chief among these is ASC 718, the standard that governs the accounting treatment of stock-based compensation awards. ASC 718 requires companies to measure the compensation expense for all share-based payment awards made to employees and directors, including stock options and restricted stock-based awards, generally based on the grant date “fair value” of these awards. This calculation is performed for accounting purposes and reported in the compensation tables below, even though our executive officers may realize no value from their awards. ASC 718 also requires companies to recognize the compensation cost of their share-based payment awards in their income statements over the period that an executive officer is required to render service in exchange for the option or other award.

 

 

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Stock Ownership Guidelines

We maintain stock ownership guidelines for our executive officers to ensure ongoing alignment of the interests of our executive officers with the long-term interests of our stockholders. For information concerning these guidelines, see the section entitled “Board of Directors and Corporate Governance—Stock Ownership Guidelines.”

Compensation “Clawback” Policy

Our compensation committee recommended, and our board of directors adopted, a financial restatement clawback policy in accordance with SEC and NYSE requirements, which became effective as of October 2, 2023 (the “Financial Restatement Clawback Policy”). Consistent with these requirements, the Financial Restatement Clawback Policy provides that, subject to the limited exemptions permitted under these requirements, if we are required to prepare an accounting restatement due to our material noncompliance with financial reporting requirements under applicable securities laws, we must recover from covered executive officers any incentive-based compensation received by them while they were an executive officer, after October 2, 2023 and during the applicable recoupment period (which generally includes the three completed fiscal years prior to the date we conclude, or reasonably should have concluded, that we are required to prepare, or the date on which a court, regulator or other legally authorized body directs us to prepare, a financial restatement) that was in excess of what they would have received had their incentive compensation been determined based on the restated amounts.

Our prior clawback policy, which was in effect throughout 2023 until it was replaced by the Financial Restatement Clawback Policy, gave our board of directors (or any duly authorized committee of the board of directors) discretion to require that any of our executive officers, including our named executive officers, repay incentive-based compensation if a majority of the independent members of our board of directors (or the committee to which it has delegated authority) determined that the executive officer’s gross negligence, intentional misconduct or fraud caused or partially caused us to materially restate all or a portion of our financial statements on which such compensation was calculated. Such determination under the prior clawback policy was required to be made within three years of the date of filing of the applicable financial statements.

In addition to the Financial Restatement Policy, our board of directors adopted a severance clawback policy in October 2023, which permits us to recover certain severance compensation paid to any covered individual subject to a severance agreement in the case of certain misconduct.

Compensation Committee Report

The compensation committee has reviewed and discussed with management the Compensation Discussion and Analysis provided above. Based on its review and discussions, the compensation committee recommended to the board of directors that the Compensation Discussion and Analysis be included in this proxy statement and our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

 

 

Compensation Committee

 

 

 

Mary Meeker (Chair)

 

Roelof Botha

 

Paul Deighton

 

Sharon Rothstein

 

 

 

 

 

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Compensation Risk Assessment

Our management team and our compensation committee each play a role in evaluating and mitigating any risk that may exist relating to our compensation programs, policies and practices for all executive employees, including our named executive officers. In connection with their oversight, Compensia and management conducted a risk review of our executive compensation plans and arrangements in which our executives (including our named executive officers) participate to determine whether these plans and arrangements have any features that might create undue risks or encourage unnecessary and excessive risk taking that could threaten our value. In this review, we considered numerous factors and design elements that enable us to monitor, manage and mitigate risk, without diminishing the effect of the incentive nature of compensation, including our practice of awarding long-term incentive compensation in equity awards upon hire to our named executive officers to directly tie their expectation of compensation to their contributions to the long-term value of our company and other risk mitigators such as the Insider Trading Policy prohibiting stock pledging and hedging, formal stock ownership guidelines and a clawback/compensation recovery policy.

Based on our review, we have concluded that any potential risks arising from our executive compensation programs, policies and practices are not reasonably likely to have a material adverse effect on Block.

Summary Compensation Table

 

Name and Principal Position

 

Year

 

Salary ($)

 

 

Stock
Awards
($)
(1)

 

 

Option
Awards
($)
(1)

 

 

All Other
Compensation ($)
(2)

 

 

Total Compensation
($)

 

Jack Dorsey

 

2023

 

 

2.75

 

 

 

 

 

 

 

 

 

 

 

 

2.75

 

Block Head and Square Head

 

2022

 

 

2.75

 

 

 

 

 

 

 

 

 

 

 

 

2.75

 

 

 

2021

 

 

2.75

 

 

 

 

 

 

 

 

 

 

 

 

2.75

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amrita Ahuja

 

2023

 

 

559,259

 

 

 

7,997,873

 

 

 

7,986,849

 

 

 

5,000

 

 

 

16,548,981

 

Chief Operating Officer and Chief Financial Officer

 

2022

 

 

518,750

 

 

 

5,279,934

 

 

 

5,887,809

 

 

 

5,000

 

 

 

11,691,493

 

 

 

2021

 

 

493,750

 

 

 

4,931,901

 

 

 

4,805,016

 

 

 

5,000

 

 

 

10,235,667

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Chrysty Esperanza

 

2023

 

 

544,259

 

 

 

2,060,894

 

 

 

2,058,062

 

 

 

5,000

 

 

 

4,668,215

 

Chief Legal Officer and Corporate Secretary

 

2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Brian Grassadonia

 

2023

 

 

555,000

 

 

 

5,736,827

 

 

 

5,751,323

 

 

 

5,000

 

 

 

12,048,150

 

CEO Cash App

 

2022

 

 

518,750

 

 

 

6,071,968

 

 

 

6,771,040

 

 

 

5,000

 

 

 

13,366,758

 

 

 

2021

 

 

493,750

 

 

 

4,931,901

 

 

 

4,805,016

 

 

 

5,000

 

 

 

10,235,667

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Alyssa Henry

 

2023

 

 

416,104

 

 

 

4,549,897

 

 

 

4,561,400

 

 

 

278,055

 

 

 

9,805,456

 

Former CEO Square

 

2022

 

 

518,750

 

 

 

6,071,968

 

 

 

6,771,040

 

 

 

5,000

 

 

 

13,366,758

 

 

 

2021

 

 

493,750

 

 

 

4,931,901

 

 

 

4,805,016

 

 

 

5,000

 

 

 

10,235,667

 

 

 

 

(1)
The amounts included in the “Stock Awards” and “Option Awards” columns represent the aggregate grant date fair value of RSUs and option awards calculated in accordance with ASC 718. Such grant date fair value does not take into account any estimated forfeitures related to service-vesting conditions. The valuation assumptions used in determining the grant date fair value of the RSUs and option awards reported in these columns are described in the “Share-based Compensation” section of Note 17, Stockholders' Equity in the Notes to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.
(2)
For 2023, amounts disclosed in this column include the aggregate incremental costs of perquisites and other personal benefits (i) the 401(k) employer match for Ms. Ahuja, Ms. Esperanza, and Mr. Grassadonia and (ii) the 401(k) employer match of $5,000 and the value of payments made in connection with the Henry Separation Agreement for Ms. Henry’s cash payment of $249,219 in connection with Ms. Henry’s Separation and Release Agreement with us, $3.6 million in stock-based compensation charges recognized in accordance with ASC 718 in connection with Ms. Henry’s Separation and Release Agreement with us (which is not reflective of the actual amount received by Ms. Henry), and COBRA payment of $23,835 for Ms. Henry.

 

 

BLOCK 2024 Proxy Statement

32

 


Table of Contents

 

Grants of Plan-Based Awards in 2023

The following table sets forth information regarding grants of awards made to our named executive officers during 2023. We did not grant any plan-based cash awards or RSAs during 2023.

 

Name

 

Grant Date

 

 

Number of Securities Underlying RSUs (#)

 

 

Number of Securities Underlying Options
(#)

 

 

Exercise or Base Price of Option Awards ($/Sh)

 

 

Grant Date Fair Value of Stock and Option Awards ($)(1)

 

Jack Dorsey

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amrita Ahuja

 

03/20/2023

 

 

 

107,354

 

 

 

178,973

 

 

 

74.50

 

 

 

15,984,722

 

Chrysty Esperanza

 

03/20/2023

 

 

 

27,663

 

 

 

46,118

 

 

 

74.50

 

 

 

4,118,955

 

Brian Grassadonia

 

04/26/2023

 

 

 

94,714

 

 

 

157,901

 

 

 

60.57

 

 

 

11,488,150

 

Alyssa Henry

 

04/26/2023

 

 

 

75,118

 

 

 

125,232

 

 

 

60.57

 

 

 

9,111,298

 

 

 

 

(1)
The amounts included in this column represent the aggregate grant date fair value of RSUs and option awards calculated in accordance with ASC 718. The valuation assumptions used in determining the grant date fair value of the RSUs and option awards reported in this column are described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

 

 

BLOCK 2024 Proxy Statement

33

 


Table of Contents

 

Outstanding Equity Awards at 2023 Year-End

The following table lists all outstanding equity awards held by our named executive officers as of December 31, 2023. For additional information regarding the impact of certain employment termination scenarios on outstanding equity awards, refer to the section entitled “Potential Payments upon Termination or Change of Control.”

 

 

 

Option Awards

 

 

Stock Awards

 

Name

 

Grant Date(1)

 

 

Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable

 

 

Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable

 

 

Option
Exercise
Price ($)
(2)

 

 

Option
Expiration
Date

 

 

Number of
Shares of
Stock That
Have Not
Vested (#)

 

 

Market
Value of
Shares of
Stock That
Have Not
Vested ($)
(3)

 

 Jack Dorsey

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amrita Ahuja

 

1/24/2019(4)

 

 

 

30,532

 

 

 

 

 

 

73.94

 

 

1/23/2029

 

 

 

 

 

 

 

 

 

4/21/2020(5)

 

 

 

63,891

 

 

 

14,084

 

 

 

57.40

 

 

4/20/2030

 

 

 

 

 

 

 

 

 

4/21/2020(6)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8,240

 

 

 

637,364

 

 

 

4/27/2021(5)

 

 

 

24,458

 

 

 

12,230

 

 

 

253.79

 

 

4/26/2031

 

 

 

 

 

 

 

 

 

4/27/2021(7)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7,288

 

 

 

563,727

 

 

 

4/19/2022(5)

 

 

 

35,025

 

 

 

49,036

 

 

 

125.62

 

 

4/18/2032

 

 

 

 

 

 

 

 

 

4/19/2022(8)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

26,270

 

 

 

2,031,985

 

 

 

3/20/2023(5)

 

 

 

33,557

 

 

 

145,416

 

 

 

74.50

 

 

3/19/2033

 

 

 

 

 

 

 

 

 

3/20/2023(9)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

87,226

 

 

 

6,746,931