DEF: The Trade Desk Seeks Stockholder Approval for 2025 Incentive Award Plan

The Trade Desk is asking stockholders to approve the 2025 Incentive Award Plan, an amendment and restatement of the 2016 plan, at the upcoming annual meeting.

Summary

• The Trade Desk is soliciting proxies for its 2025 annual meeting of stockholders to be held virtually on May 27, 2025.
• Key proposals include the election of two Class III directors, approval of the 2025 Incentive Award Plan, a non-binding vote on executive compensation, and ratification of PricewaterhouseCoopers LLP as the independent accounting firm for the fiscal year ending December 31, 2025.
• The 2025 Incentive Award Plan is an amendment and restatement of the existing 2016 Incentive Award Plan.
• The aggregate number of shares of Class A common stock reserved for issuance under the 2025 Plan is the sum of 40,000,000 shares, shares from the prior plans that were forfeited or lapsed, and an annual increase equal to the lesser of 4% of the shares outstanding or a smaller number determined by the board of directors.
• As of March 18, 2025, 114,757,539 shares remain available for issuance and 36,068,575 shares are subject to outstanding equity awards under the Existing Plan.
• The board of directors recommends voting FOR all director nominees, FOR the approval of the 2025 Incentive Award Plan, FOR the advisory vote on executive compensation, and FOR the ratification of the appointment of PricewaterhouseCoopers LLP.
• The notice of the meeting and proxy materials are expected to be mailed to stockholders on or about April 9, 2025.
• The board of directors is currently comprised of eight (8) directors, but will be reduced to seven (7) upon the cessation of Mr. Wellss term as a director.

Sentiment

Score: 7

Explanation: The document is a standard proxy statement, presenting information in a neutral and factual tone. The company's performance metrics are positive, contributing to a slightly positive sentiment.

Positives

• The 2025 Incentive Award Plan aims to align employee interests with those of stockholders and provide an important employee retention incentive.
• The company is providing stockholders with the opportunity to vote on executive compensation and the appointment of the independent accounting firm.
• The company has strong client retention, which remained over 95% during 2024.

Negatives

• David B. Wells will not stand for re-election at the Annual Meeting, reducing the authorized number of directors to seven (7).

Risks

• If the 2025 Incentive Award Plan is not approved by stockholders, the 2016 Incentive Award Plan will continue in effect.
• The payments and benefits provided to Mr. Green in connection with a change in control may not be eligible for a federal income tax deduction by us pursuant to Section 280G of the Code.
• These payments and benefits may also subject Mr. Green to an excise tax under Section 4999 of the Code.

Future Outlook

The company intends to file a proxy statement and a WHITE proxy card with the SEC in connection with its solicitation of proxies for the 2026 annual meeting.

Management Comments

• Thank you for your ongoing support of The Trade Desk, said Jeff T. Green, Chairman and Chief Executive Officer.

Industry Context

The Trade Desk operates in the advertising technology industry, offering a platform for ad buyers to manage digital advertising campaigns across various channels.

Comparison to Industry Standards

• The document mentions a compensation peer group consisting of advertising technology, software as a service and other technology companies that are similar to The Trade Desk in terms of revenue, profitability, growth and market capitalization.
• The companies in this compensation peer group were selected on the basis of their similarity to us, based on the following criteria: publicly traded companies headquartered in North America, similar industry and competitive market for talent (advertising, software, data and Internet software and services), similar annual revenue size with a median of approximately $3 billion, similar market capitalization with a median of approximately $27 billion, product and business model similarity, high growth (generally greater than 20% growth over the last four fiscal quarters), and high market capitalization to revenue multiple and high market capitalization to EBITDA multiple.
• The companies in this compensation peer group were: Cadence Design Systems, Roku, Cloudflare, ServiceNow, CrowdStrike Holdings, Shopify, Datadog, Snap, DocuSign, Snowflake, Fortinet, Splunk, HubSpot, Twilio, MongoDB, Workday, Okta, Zoom Video Communications, Palo Alto Networks, ZoomInfo Technologies, Pinterest, and Zscaler.

Stakeholder Impact

• Approval of the incentive award plan could impact employee motivation and retention.
• The vote on executive compensation provides stockholders with a voice on executive pay practices.
• The ratification of the independent accounting firm ensures the integrity of the company's financial reporting.

Next Steps

• Stockholders are encouraged to vote on the proposals as soon as possible.
• The company will announce preliminary voting results at the Annual Meeting and disclose voting results on a Current Report on Form 8-K filed with the SEC within four business days after the Annual Meeting.

Key Dates

Keywords

incentive award plan, proxy statement, annual meeting, directors, executive compensation, stockholders, The Trade Desk