DEF 14A: Skillsoft Corp. Announces 2024 Annual Meeting of Stockholders and Proposes Amendment to Incentive Plan

Skillsoft Corp. is holding its 2024 Annual Meeting of Stockholders virtually on July 18, 2024, and is seeking stockholder approval for several proposals, including an amendment to the 2020 Omnibus Incentive Plan.

Summary

• Skillsoft Corp. will hold its 2024 Annual Meeting of Stockholders on July 18, 2024, as a virtual meeting.
• Stockholders will vote on four proposals: electing three Class III directors, approving an amendment to the 2020 Omnibus Incentive Plan to increase the number of shares available for issuance, ratifying the appointment of Ernst & Young LLP as the independent registered public accounting firm for fiscal year 2025, and approving the adjournment of the Annual Meeting if necessary.
• The proposed amendment to the 2020 Plan would increase the number of Class A common stock shares authorized for issuance from 1,808,333 to 2,908,333.
• The Board recommends voting FOR all director nominees, FOR the amendment to the 2020 Plan, FOR the ratification of Ernst & Young LLP, and FOR the adjournment proposal, if necessary.
• The record date for determining stockholders eligible to vote at the Annual Meeting is May 20, 2024.
• The company is asking for approval to increase the number of shares of Class A common stock available for issuance under the 2020 Plan by 1,100,000 shares.
• The company anticipates that the increased share reserve to be authorized under the 2020 Plan should be sufficient for approximately one to two years of future awards.

Sentiment

Score: 7

Explanation: The document is primarily informational and procedural, with a neutral to slightly positive tone. The proposals are presented as beneficial for the company's future success.

Positives

• The proposed amendment to the 2020 Plan is intended to enhance the company's ability to attract, retain, and motivate key personnel.
• The Board believes that equity awards are necessary to remain competitive in the industry and are essential to recruiting and retaining highly qualified employees.
• The 2020 Plan includes features that promote alignment of equity compensation arrangements with the interests of stockholders, such as no discounted stock options, prohibition on repricing, and awards subject to a clawback policy.
• The company is promoting sound corporate governance practices through the design of the 2020 Plan.

Negatives

• If the adjournment proposal is not approved, the Board may not be able to adjourn the Annual Meeting if there are insufficient shares represented to constitute a quorum or to approve the amendment to the 2020 Plan.
• The company's overhang as of May 20, 2024, would be 33.9% if the additional 1,100,000 proposed shares are authorized under the 2020 Plan.

Risks

• The proxy statement mentions risks described under the heading 'Risk Factors' in the Annual Report on Form 10-K filed with the SEC on April 15, 2024.
• Future share usage may differ from current expectations due to factors such as award type mix, hiring activity, stock price performance, and acquisitions.

Future Outlook

The company anticipates that the increased share reserve to be authorized under the 2020 Plan should be sufficient for approximately one to two years of future awards.

Management Comments

• The Board encourages you to review the accompanying Proxy Statement for information relating to each of the proposals and to cast your vote promptly.
• The Company designed the format of the virtual Annual Meeting to ensure that its stockholders who attend the Annual Meeting will be afforded the same rights and opportunities to participate as they would at an in-person meeting and to enhance stockholder access, participation, and communication through online tools.

Industry Context

The document highlights Skillsoft's focus on Generative AI and its efforts to position itself as a partner-of-choice in this area, reflecting a broader industry trend towards AI-driven learning solutions.

Comparison to Industry Standards

• The document does not provide specific comparisons to industry standards in terms of financial performance or compensation practices.
• However, it mentions the use of a peer group for executive compensation benchmarking, suggesting an awareness of industry norms.
• The burn rate and overhang are mentioned, but not explicitly compared to industry averages.

Management Changes

Related Party Transactions

• In January 2022, Skillsoft entered into a commercial agreement to provide off-the-shelf Skillsoft products to the Company's largest stockholder, MIH Learning B.V., (known as Prosus) and its affiliates for $0.7 million over three years.
• On December 22, 2021, the Company, certain of the Company's subsidiaries, Ryzac, Inc. (Codecademy), and Fortis Advisors LLC entered into an Agreement and Plan of Merger, pursuant to which the Company acquired Codecademy on April 4, 2022 for total consideration of approximately $390.3 million, consisting of the issuance of 30,374,427 million shares of Class A common stock and a cash payment of $207.6 million.
• The Company engaged the Klein Group to act as a consultant in respect of the transaction with Codecademy, particularly to assist management in its evaluation of the business opportunity and structuring and negotiation of a potential transaction.
• Pursuant to this engagement, the Company paid the Klein Group a transaction fee equal to $2 million.

Stakeholder Impact

• Approval of the amendment to the 2020 Plan could positively impact employees by providing them with equity ownership opportunities.
• The election of directors will influence the strategic direction of the company, affecting shareholders.
• Ratification of the independent auditor aims to maintain the integrity of financial controls and reporting, benefiting all stakeholders.

Next Steps

• Stockholders are encouraged to vote on the proposals outlined in the Proxy Statement.
• The company will hold its Annual Meeting on July 18, 2024, to discuss and vote on the proposals.

Key Dates

Keywords

Annual Meeting, Proxy Statement, Skillsoft, Directors, 2020 Plan, Amendment, Stockholders, Compensation, Governance, Ernst & Young, Equity Awards