DEF 14A: Grid Dynamics Holdings Sets Date for 2024 Annual Stockholders Meeting

Grid Dynamics Holdings will hold its 2024 Annual Meeting of Stockholders virtually on December 23, 2024, to vote on director elections, ratification of the accounting firm, and executive compensation.

Summary

• Grid Dynamics Holdings, Inc. will hold its 2024 Annual Meeting of Stockholders on December 23, 2024, at 7:30 a.m., Pacific Time, conducted virtually via live audio webcast.
• Stockholders of record as of October 28, 2024, are entitled to vote on proposals including the election of three Class II directors, ratification of Grant Thornton LLP as the independent registered public accounting firm, and a non-binding advisory vote on executive compensation.
• The board of directors recommends voting for the election of Lloyd Carney, Michael Southworth, and Yueou Wang as Class II directors, for the ratification of Grant Thornton LLP, and for the approval of the compensation of named executive officers.
• Proxy materials are available online and were first mailed to stockholders on or about November 12, 2024.
• The company's board consists of nine members, with six considered independent.
• In 2023, total revenue was $312.9 million, an increase of 0.8% from 2022.
• The GAAP Net loss attributable to common stockholders was $(1.8) million compared to GAAP Net loss attributable to common stockholders of $(29.2) million in 2022.
• Non-GAAP EBITDA was $44.2 million, compared with non-GAAP EBITDA of $58.2 million in 2022.
• The median of the annual total compensation of all our employees (other than our Chief Executive Officer) was $46,372.
• The annual total compensation of Chief Executive Officer was $5,822,320.
• The ratio of these two amounts was 126 to 1.

Sentiment

Score: 6

Explanation: The document is neutral, primarily conveying information about the annual meeting and related proposals. While there are some positive aspects, such as the availability of multiple voting options, there are also negative aspects, such as the decrease in Non-GAAP EBITDA.

Positives

• The company is providing stockholders with multiple options to vote, including via the Internet, telephone, or mail.
• The board of directors has a compensation recovery policy in place.
• The company scaled our delivery locations across Poland, India, and Mexico, three areas strategic to a follow-the-sun model, and we enhanced our sales and research and development organizations with greater industry expertise, especially in supply-chain, manufacturing, financial services, and pharmaceutical verticals.
• The GAAP Net loss attributable to common stockholders was $(1.8) million compared to GAAP Net loss attributable to common stockholders of $(29.2) million in 2022.

Negatives

• Non-GAAP EBITDA decreased to $44.2 million in 2023 from $58.2 million in 2022.
• At the last Annual Meeting of Stockholders, stockholders voted on the compensation of NEOs for the year ended December 31, 2022, which yielded approximately 54.7% support.

Risks

• The document mentions strategic, financial, business and operational, cybersecurity, legal and regulatory compliance, and reputational risks as areas of oversight by the board of directors.
• The company operates in a highly competitive environment for top-level executive talent.

Future Outlook

The company aims to attract, fairly compensate, appropriately incentivize, and retain its executives in a manner that aligns their long-term interests with those of its stockholders.

Management Comments

• On behalf of the Company's Board of Directors, we would like to express our appreciation for your support of and interest in Grid Dynamics.
• Our board of directors and our compensation committee believe that these policies and practices are effective in implementing our compensation philosophy and achieving our compensation program goals.

Industry Context

Grid Dynamics operates in the software and technology industry, facing a competitive environment for executive talent and enterprise-level digital transformations.

Comparison to Industry Standards

• The compensation committee strives to set a competitive level of total compensation for each NEO as compared with executive officers in similar positions at peer companies.
• Selection criteria for determining/reviewing the 2023 Compensation Peer Group, used to establish the competitive market for the NEOs, generally include: Industry: IT consulting and services, systems software and applications software companies Size: Companies with revenues ranging from $97 to $711 million and market capitalization greater than $117 million
• The 2023 Compensation Peer group is listed below. Grid Dynamics is positioned near the 50 th percentile in revenue and the 25 th percentile in market capitalization as of July 2023.
• Peer Companies: Agilysys, Inc., American Software, Inc., Benefitfocus, Inc., BlackLine, Inc., ChannelAdvisor Corporation, eGain Corporation, JFrog Ltd., LivePerson, Inc., LiveRamp Holdings, Inc., Model N, Inc., PagerDuty, Inc., Progress Software Corporation, PROS Holdings, Inc., Qualys, Inc., Rapid7, Inc., TechTarget, Inc., Upland Software, Inc., Workiva Inc.

Related Party Transactions

• In 2023, Grid Dynamics Switzerland GmbH, a wholly owned subsidiary of the Company, entered into agreements (the LineBreak Agreements) with LineBreak (Technology UK) Ltd. (LineBreak), an entity affiliated with Patrick Nicolet, pursuant to which the Company provides certain of its standard consulting services to LineBreak in exchange for standard payment therefor.
• Approximately 174,834 ($192,954) in payment was collected by the Company in fiscal 2023 pursuant to the Linebreak Agreements.
• Oksana Livschitz, the spouse of our CEO, Leonard Livschitz, is currently employed by the Company in a non-executive role.
• Mrs. Livschitz received total compensation in fiscal 2023 in the amount of approximately $266,399, including salary, bonus, and equity awards, and she is eligible to participate in employee benefit plans generally available to our employees.

Stakeholder Impact

• Stockholders are provided with information and voting options to participate in key decisions regarding the company's governance and executive compensation.
• Executive officers' compensation is linked to the company's financial performance, strategic success, and stockholder returns.

Next Steps

• Stockholders are urged to vote by telephone, by using the Internet or by mail at their earliest convenience, as instructed on the Notice of Internet Availability of Proxy Materials.

Key Dates

Keywords

annual meeting, proxy statement, directors, executive compensation, Grant Thornton, stockholders, corporate governance, voting