DEF 14A: Veritone's 2024 Proxy Statement: Stockholder Meeting to Address Director Elections, Auditor Ratification, and Executive Compensation

Veritone's 2024 Annual Meeting of Stockholders will address the election of directors, ratification of the independent auditor, and an advisory vote on executive compensation.

Summary

• Veritone, Inc. will hold its 2024 Annual Meeting of Stockholders on June 13, 2024, virtually.
• Stockholders of record as of April 16, 2024, are entitled to vote.
• The meeting will address the election of two Class I directors, the ratification of Grant Thornton LLP as the independent auditor, and an advisory vote on executive compensation.
• The Board recommends voting for the director nominees, for the ratification of Grant Thornton, and for the approval of executive compensation.
• The proxy materials and the 2023 Annual Report are available online at www.proxyvote.com.
• Ryan Steelberg serves as Chairman and Chief Executive Officer.
• The Board has nominated Michael Keithley to stand for election as a Class I director as a result of Jeffrey P. Gehl's resignation.
• The company's reported GAAP revenue for 2023 was $126.7 million.
• The non-GAAP net loss prior to any bonus accrual for 2023 was $37.3 million.
• No incentive bonuses were paid to executive officers for 2023 due to not meeting the performance goals.

Sentiment

Score: 5

Explanation: The document presents a mixed sentiment. While it highlights positive aspects of corporate governance and ESG initiatives, the financial results for 2023 were below target, leading to no bonus payouts for executives. The forward-looking statements are tempered by cautionary language regarding risks and uncertainties.

Positives

• The company is committed to good corporate governance practices, including annual Board evaluations and director independence.
• The company has a Code of Business Conduct and Ethics in place.
• The company offers a tax-qualified 401(k) retirement plan and an employee stock purchase plan.
• The company has adopted a clawback policy that complies with Section 10D of the Exchange Act.
• The company is focused on environmental, social, and governance (ESG) priorities, including reducing its carbon footprint and promoting social inclusion.

Negatives

• The company reported a non-GAAP net loss of $37.3 million prior to any bonus accrual for 2023.
• No incentive bonuses were paid to executive officers for 2023 due to not meeting the performance goals.
• The company has not had any women on the Board since December 2022.

Risks

• The document contains forward-looking statements that are subject to numerous known and unknown risks and uncertainties.
• These risks include the ability to expand the aiWARE business, reliance on key customers, and the impact of macroeconomic and geopolitical factors.
• The company's requirements for additional capital and its ability to manage growth are also key risk factors.
• Cybersecurity risks and the ability to protect intellectual property are ongoing concerns.

Future Outlook

The document contains forward-looking statements regarding future financial condition, results of operations, capital needs, competitive position, and potential growth, all of which are subject to risks and uncertainties.

Management Comments

• Ryan Steelberg: 'Thank you for your continued support. We look forward to your online attendance at the Annual Meeting.'

Industry Context

As an AI technology and solutions provider, Veritone's focus on ESG and social inclusion aligns with broader industry trends emphasizing responsible AI development and deployment.

Comparison to Industry Standards

• The document does not provide specific comparisons to industry standards or competitors.
• However, the discussion of executive compensation practices suggests an awareness of market levels and compensation trends, potentially informed by data from companies like Ingram Micro, Palomar Holdings, and other technology firms.
• The company's benefits package is benchmarked in the 25th-50th percentile of coverage for similarly sized companies.

Management Changes

Legal Proceedings

• On December 15, 2014, Brand Affinity Technologies, Inc. filed a petition for relief under the Bankruptcy Code commencing the matter of In re Brand Affinity Technologies, Inc., United States Bankruptcy Court for the Central District of California, Santa Ana Division, Case No. 8:14-bk-17244 SC.
• Chad Steelberg and Ryan Steelberg previously served as officers, directors and beneficial owners of Brand Affinity Technologies, Inc.
• The Bankruptcy Court entered an order closing this bankruptcy case on December 5, 2016.

Related Party Transactions

• The company entered into a consulting agreement with Steel Holdings, LLC, an entity affiliated with Chad Steelberg, for technical advisory services.
• The company paid Steel Holdings, LLC $41,666 per month (the Monthly Service Fee) to provide consulting services, which included Mr. Steelberg performing various tasks aligned with the Company's development, operation and commercialization of its aiWARE platform.
• Prior to the amendment to the Consulting Agreement in January 2024, Steel Holdings, LLC was eligible to receive performance bonuses, split equally between cash and RSU awards, each vesting upon achievement of specific Performance Goals to be achieved for an applicable quarter or year in the following categories: Product Achievements (five goals), Customer Validation (two goals), Analyst Validation (four goals) and Transition and Succession Planning (one goal).
• Prior to the amendment to the Consulting Agreement in January 2024, Mr. Steelberg had achieved three Performance Goals and as a result, we paid Mr. Steelberg $375,000 in cash bonuses and vested RSU awards representing the right to receive 19,743 and 39,486 shares of common stock on April 22, 2023 and November 15, 2023, respectively.
• On January 23, 2024, we entered into an amended and restated independent contractor services agreement with Steel Holdings, LLC (the Amended Consulting Agreement), which supersedes and replaces the Consulting Agreement.
• Pursuant to the Amended Consulting Agreement, Mr. Steelberg will provide technical advisory services related to our software, software architecture and technology strategy as requested by our Chief Executive Officer until December 31, 2025, the termination date of the Amended Consulting Agreement.
• In consideration for these services, the Company will pay to Steel Holdings, LLC: (i) $1.0 million in cash on July 1, 2024; and (ii) $50,000 per month in cash for the period from January 2024 through December 2025.

Stakeholder Impact

• The outcome of the proposals will directly impact shareholders through director elections and executive compensation decisions.
• Employees are affected by the company's compensation policies and benefit programs.
• The company's ESG initiatives and ethical standards impact its reputation and relationships with customers and suppliers.

Next Steps

• Stockholders are encouraged to vote by proxy prior to the Annual Meeting.
• The Board intends to revise its committee memberships immediately after the Annual Meeting to reflect Mr. Gehl's resignation and, if applicable, the election of Mr. Keithley and re-election of Mr. Taketa.

Key Dates

Keywords

proxy statement, annual meeting, directors, executive compensation, Grant Thornton, corporate governance, stockholders, Veritone, AI, Board of Directors