DEF: MarketWise Seeks Stockholder Approval for Incentive Plan Amendment, Sets Virtual Annual Meeting

MarketWise, Inc. is holding a virtual annual meeting on June 12, 2025, to vote on key proposals, including an amendment to the 2021 Incentive Award Plan and the election of directors.

Summary

• MarketWise, Inc. will hold its Annual Meeting of Stockholders virtually on June 12, 2025.
• Stockholders will vote on the election of two Class I Directors, an amendment to the 2021 Incentive Award Plan, and the ratification of Grant Thornton LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2025.
• The Board recommends voting 'FOR' the election of Dr. David Eifrig and Van Simmons as directors, 'FOR' the amendment to the 2021 Incentive Award Plan, and 'FOR' the ratification of Grant Thornton LLP.
• The proposed amendment to the 2021 Incentive Award Plan seeks to increase the overall share limit by 1,630,554 shares.
• As of April 17, 2025, there were 2,647,468 shares of Class A common stock and 13,637,641 shares of Class B common stock outstanding.
• The company effected a 1-for-20 reverse stock split on April 2, 2025.
• Grant Thornton LLP has been appointed as the independent registered public accounting firm for the fiscal year ending December 31, 2025, replacing Deloitte & Touche LLP.
• The Audit Committee has reviewed the audited consolidated financial statements for the fiscal year ended December 31, 2024.
• The Board has determined that Van Simmons, Matthew Smith, Glenn Tongue, and Matthew Turner are independent directors.
• Stockholders can access proxy materials and the 2024 Annual Report at investors.marketwise.com.

Sentiment

Score: 7

Explanation: The document is generally positive, outlining routine corporate governance matters and seeking approval for an incentive plan amendment. The tone is professional and forward-looking.

Positives

• The Board is actively engaged in corporate governance, with established committees and charters.
• The company is embracing technology by holding a virtual annual meeting to increase stockholder participation.
• The Board is recommending qualified candidates for election as directors.
• The company has a process for stockholders to communicate with the Board.
• The company has an anti-hedging policy in place for directors, officers, and employees.

Negatives

• The company dismissed Deloitte & Touche as the company's independent registered public accounting firm.
• The company and Deloitte & Touche LLP determined that material weaknesses existed in our internal control over financial reporting as of December 31, 2022 related to: (i) a lack of contemporaneous documentation and account reconciliation, and (ii) the lack of a formal or documented risk assessment process, which were remediated by the Company as of December 31, 2023.

Risks

• The division of the Board into three classes with staggered three-year terms may delay or prevent changes in control of the Company.
• Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially.
• The Tax Receivable Agreement could have a material adverse effect on the company's liquidity.
• The company may be required to make cash payments to the MarketWise Members that are greater than the specified percentage of the actual benefits realized in respect of the tax benefits that are subject to the Tax Receivable Agreement.
• The IRS or another tax authority may challenge all or part of the Basis Adjustments, as well as other related tax positions the company takes, and a court could sustain any such challenge.

Future Outlook

The company expects to have approximately 1,862,555 shares available for grant after this meeting (based on shares available as of April 17, 2025), which we anticipate being a pool of shares sufficient for grants through at least December 31, 2030, and necessary to provide a predictable amount of equity for attracting, retaining, and motivating employees.

Management Comments

• The Board believes it is important to our continued success that we have an adequate reserve of shares available for issuance under the 2021 Plan for use in attracting, motivating and retaining qualified employees, officers, consultants and directors.
• We are excited to embrace the latest technology to provide expanded access, and improve communication and cost savings for us and our stockholders.

Industry Context

The use of virtual meetings has become increasingly common, reflecting a broader trend towards leveraging technology to enhance accessibility and reduce costs associated with shareholder engagement. The proposed amendment to the incentive plan aligns with standard practices for attracting and retaining talent in competitive industries.

Comparison to Industry Standards

• Increasing share limits in incentive plans is a common practice among public companies to ensure they can continue to attract and retain key talent.
• Virtual shareholder meetings are becoming increasingly common, with companies like Alphabet (Google), Amazon, and Microsoft holding virtual or hybrid meetings to increase accessibility for shareholders.
• The structure of the Board, with classified terms and independent directors, is consistent with corporate governance practices at many publicly traded companies.

Management Changes

Related Party Transactions

• Stansberry Research licenses its names and logos to Stansberry Asset Management LLC (SAM) in exchange for licensing fees.
• We lease an office property from Sandlapper II, LLC. Stephen Sjuggerud and Michael Palmer are owners of Sandlapper II, LLC.
• We lease certain office spaces from an affiliate of Monument and Cathedral, LLC.
• Our operating companies regularly enter into informal revenue share arrangements with subsidiaries of Monument & Cathedral, LLC.
• A related party subsidiary of Monument & Cathedral, LLC provided marketing and copywriting services to the Company.
• We provide portfolio tracking services to a number of subsidiaries of Monument & Cathedral, LLC.
• In October 2024, we entered into an agreement to sell certain assets and liabilities that we had previously acquired as part of the MMP Acquisition (MMP Business) to a related party.
• On December 1, 2023, we sold certain assets of Crowdability, Inc. (Buttonwood Publishing), a business we acquired in 2022 to a related party.

Stakeholder Impact

• Approval of the incentive plan amendment is intended to benefit employees by providing equity incentives.
• Stockholder ratification of the accounting firm appointment is a good corporate governance practice.
• The virtual annual meeting aims to increase accessibility for stockholders.
• The Board is committed to acting in the best interests of the company and its stakeholders.

Next Steps

• Stockholders are urged to vote their shares over the Internet or via the toll-free telephone number.
• The company will report the final voting results in a Current Report on Form 8-K shortly after the Annual Meeting.

Key Dates

Keywords

Annual Meeting, Proxy Statement, Board of Directors, Incentive Award Plan, Director Election, Grant Thornton, Stockholders, MarketWise