Additional Highlights:
✓
Both
our Mobility and Delivery businesses either maintained or gained category position in the
majority of our key markets
✓
Successfully expanded our Uber One cross-platform membership program, with over 40% of Delivery Gross Bookings now coming from Uber One, and Uber One is now available across 12 countries
✓
Reached an all-time high of 5.4 million monthly active Drivers and Couriers in Q4, an increase of 23% year-over-year
✓
Achieved net cash provided by operating activities of $642 million for the year
✓
Achieved positive free cash flow of $390 million for the year, and continue to maintain a strong liquidity position
✓
Uber Freight and Transplace were fully integrated, and now building one
platform as we march toward our vision of building and end-to-end logistics platform |
✓
Submitted science based emissions targets target to the Science Based Targets initiative (SBTi), which were subsequently approved in 2023 by SBTi, and continued momentum toward our zero emissions goal by increasing the number of monthly active zero emission vehicle drivers on our platform by 32,000 when comparing Q4 2021 to Q4 2022
✓
Regulatory wins on IC+ bills with local governments; a 30-month license granted to operate in London; agreements with four labor organizations
✓
Employee retention improved significantly year-over-year, and although our position
against our DEI results remained stable year- over-year, we still have work to do |
| 42 |
Uber
2023 Proxy Statement |
Compensation
Discussion and Analysis |
 |
Say-On-Pay Results
and Investor Engagement
Our Board
of Directors and our Compensation Committee deeply value the continued interest of and feedback from our stockholders on our executive
compensation program, and we are committed to maintaining an active dialogue to ensure stockholder perspectives are thoughtfully taken
into account. Since becoming a public company in 2019, we have continued to maintain strong engagement with our stockholders and have
implemented many changes to our executive compensation programs, in response to their feedback. For example, we strengthened and added
more structure to our annual incentive program (including defined metrics, weighting, and threshold and maximum levels of achievement),
increased participation in and enhanced our performance-based long-term equity incentive program to include a majority of three-year
performance measures, and updating our peer group to reduce the emphasis on large bellwether companies. These changes helped us obtain
positive Say-on-Pay results of 94% in both 2021 and 2022.
We continuously
seek feedback from our stockholders to ensure our program remains a strong, world-class executive compensation program that ensures we
have the right tools in place to compete in the attraction, retention, and motivation of key talent, critical to the success of our business
in pursuit of long-term stockholder value. We are committed to holding ourselves accountable to our stockholders and to ongoing robust
investor engagement and dialogue as we evaluate the structure and effectiveness of our executive compensation program going forward.
Response to Say-On-Pay in 2022
Our investors express interest
in certain components of our compensation program and we respond to this feedback by regularly reviewing and updating our compensation
program, as described in the table below.
| What
We Heard |
What
We Did |
| Disclosure
of Performance Metrics and Results: Disclose more details regarding performance metrics, specifically the strategic metrics, and
results. |
✓ Enhanced
and increased the disclosure of our performance metrics and results, while continuing to provide high-quality and transparent disclosures
throughout this Compensation Discussion & Analysis (CD&A). |
| ESG
Goals: Include ESG goals in executive compensation, and ensure they are quantifiable and positively impact the business. |
✓ Included
quantifiable safety and DEI goals in our 2022 PRSUs and Driver and Courier well-being and climate change goals in our annual cash
bonus plan for 2022, which we believe contribute to the success of our business. |
| Human
Capital Management: Focus on HCM, in both the short- term and long-term, as well as attraction, retention, and well-being of employees. |
✓ Focused
on employee retention through the incorporation of goals into our annual cash bonus
plan for 2022 to improve employees’ day to day experience and promote Uber’s values within our workplace. We also included
DEI goals in our 2022 PRSUs. |
| Driver
and Courier Well-being: Focus on ensuring that we have the best platform for Drivers and Couriers. |
✓ Incorporated
goals into our annual cash bonus plan to increase the number of monthly active Drivers and Couriers by enhancing their experience
in an effort to have the best platform for them. |
| Compensation Philosophy, Objectives, & Governance |
|
|
43 |
Evolution of
Our Compensation Program
The Compensation
Committee evaluates and responds to stockholder feedback by implementing changes to our compensation program that further align the interests
of our executives with those of our stockholders. These changes ensure that our programs continue to support Uber's key priorities as
they evolve year-over-year.
In
2023, we’ll continue to incorporate goals in both our short- and longer-term incentive programs that will align the interests of
our executives with those of our stockholders, and ensure that we continue to focus and make progress on our ESG goals, including our
DEI, safety, Driver and Courier well-being, climate, and HCM initiatives. Additionally, as a reflection of the current competitive market,
our stock price performance and how our stockholders have fared, and our efforts to achieve GAAP operating income profitability, our
annual equity grants for 2023 will be decreased by 10% per individual NEO compared to 2022 grants, and we incorporated stock-based compensation
expense into our annual incentive financial goals for 2023.
Compensation Philosophy,
Objectives, & Governance
Philosophy
and Objectives. We operate in rapidly evolving and highly competitive markets worldwide. To
succeed in these environments and execute our long-term strategic goals of building our platform and achieving GAAP operating income
profitability, we believe we must increase the scale of our global network, continue to develop and update our technology, use our product
expertise and operational excellence, partner with our employees, platform users, and the cities and communities we serve, and encourage
our executives to model and reinforce our mission and values. In order to promote long-term stockholder value creation and link the compensation
of our executive officers to these long-term strategic goals and key drivers of our business, the primary focus of our compensation philosophy
and program is on the long-term elements of target total compensation.
Process
and Governance. Our executive compensation program
is designed to achieve the following objectives:
| 44 |
Uber
2023 Proxy Statement |
Compensation
Discussion and Analysis |
|
The total compensation package
for our executive officers consists primarily of a combination of base salary, annual cash bonuses, and long-term equity incentives.
Our
Compensation Committee regularly evaluates our executive compensation philosophy, objectives, program, and practices as we continue to
look for ways to further evolve our compensation program in order to attract, motivate, and retain executives critical to the ongoing
success of our business and the creation of long-term stockholder value, to align pay with performance, and to generate long-term stockholder
value. The Compensation Committee also focuses on responding to evolving pay practices of other leading U.S. publicly-traded companies,
particularly those among our peer group, responding to pay governance trends, and considering the views of our stockholders and the recommendations
of our compensation consultants. The market in which we compete is constantly changing and being disrupted, and requires continuous innovation
and agility to remain competitive. This is the key reason we believe it is important that the compensation structure we establish provides
us an adequate level of flexibility to enable us to incentivize management to adjust priorities and make the strategic decisions that
are often necessary for us to succeed in the dynamic market in which we operate.
| Compensation Philosophy, Objectives, & Governance |
|
|
45 |
We established a number of
policies and practices, listed below, to support our compensation philosophy, improve our compensation governance, and drive performance
that aligns executives’ and stockholders’ interests.
 | | WHAT
WE DO |
| · | Solicit
stockholder feedback on our compensation program and potential enhancements through a
robust year-round investor engagement program |
| · | Design
our executive compensation program such that a significant portion of our compensation
is at risk based on the achievement of measures we believe drive the creation of long-
term stockholder value |
| · | Maintain
stock ownership guidelines for our executive officers and directors, including a rigorous
10x base salary requirement for our CEO, and stock retention guidelines |
| · | Ensure
executive accountability through a robust Clawback Policy applicable to certain cash
and equity compensation awarded to our executive officers |
| · | Retain
an independent compensation consultant |
| · | Review
our peer group on an annual basis |
| · | Include
ESG performance metrics tied to our mission and values, including DEI, climate, and safety measures,
which support a strong culture and address the interests of a wide array of stakeholders |
 | | WHAT
WE DON’T DO |
| · | Allow
hedging of Uber stock by directors or employees |
| · | Allow
pledging of Uber stock by directors or employees for margin loans or similar speculative
transactions |
| · | Sponsor
special benefit or retirement plans that are exclusive to the executive team |
| · | Single-trigger
acceleration following a change in control |
| · | Encourage
unnecessary and excessive risk taking |
| · | Provide
excise tax (golden parachute) gross-ups |
| · | Provide
supplemental retirement and pension benefits |
| · | Provide
guaranteed bonuses or uncapped incentive award opportunities |
Role
of Management, Consultants, and Our Compensation Committee
Our
Compensation Committee oversees and provides strategic direction to management regarding all aspects of Uber's executive compensation
programs, including setting the form and amount of compensation paid to our CEO and all executive officers, in addition to reviewing
Uber’s broader human capital strategies. In carrying out its responsibilities, the Compensation Committee retained and sought the
advice of Semler Brossy Consulting Group, an independent national compensation consulting firm, and Jim Williams, an independent compensation
advisor, to advise the Compensation Committee regarding the Company’s executive compensation program, peer group, and other executive
compensation-related matters. Our CEO provides input to the Compensation Committee with respect to the compensation of the NEOs other
than himself, and reviews the individual performance of each officer other than himself with the Compensation Committee. The chart below
summarizes the roles that management, compensation consultants, and our Compensation Committee play.
| 46 |
Uber
2023 Proxy Statement |
Compensation
Discussion and Analysis |
|
Compensation
Setting Process. In setting the form and amount of compensation to be paid to each executive
officer, including our CEO, the Compensation Committee reviews the total target compensation for our executive officers and considers
developments in compensation practices, governance trends, competitive data, and the views of our stockholders and the recommendations
of our compensation consultants. Our CEO provides input to the Compensation Committee with respect to the compensation and individual
performance of each NEO other than himself. He does not participate in the deliberations or determination of his own compensation. The
chart below summarizes our process for setting compensation.
Use
of Peer Group. The Compensation Committee regularly reviews the appropriateness of the peer
group used for purposes of evaluating executive officer compensation. For 2022, as part of our standard peer group review cycle, and
considering input from our compensation consultants, the Compensation Committee analyzed our peer group and determined the group continues
to accurately reflect our peer companies and no changes were necessary. While we acknowledge that our peer group contains a few companies
that are significantly larger, we consistently compete with those companies for talent and the Compensation Committee believes it is
important to be aware of pay levels at our most competitive talent destinations and sources. We continue to believe our peer group is
appropriate as the companies we include are technology and consumer-facing companies that are appropriately sized and are business and
talent competitors.
In developing
the peer group, the Compensation Committee considered a variety of factors, including:
| · | Business
Dynamics: The peer group includes other U.S.-based publicly traded companies in related
industries and prioritizes companies that share similar business dynamics with us. The Compensation
Committee reviewed companies from a wide range of industries, including other technology
platforms, software, logistics, travel, and transportation. The foundation of our platform
is our massive network, leading technology, operational excellence, and product expertise.
Although we are classified as a Transportation company under Standard and Poor’s Global
Industry Classification Standard, we primarily compete with other leading technology companies
for expertise that allows us to set the standard for powering movement on-demand, provide
platform users with a contextual, intuitive interface, continually evolve features and functionality,
and deliver safety and trust. |
| · | Talent
Flows: We are always competing for the best talent with other technology companies and
the broader market. A primary factor considered by the Compensation Committee was our actual
experience in the talent market for executive officers. Based on a review in 2022, more than
one-third of executives and senior management have come directly from or have been previously
employed by companies in our peer group. To our knowledge, none of our executives or senior
management have been sourced from transportation and logistics companies. Based on our actual
experience, we do not believe non-technology companies in industries like transportation
and logistics are the appropriate comparators for our business. |
| 2022 Executive Compensation Program Key Components |
|
|
47 |
| · | Size
and Scale: Our peer group represents a portfolio of companies, some of which are much
smaller than Uber and some much larger, but generally reflects companies with which we aggressively
compete for talent. In 2021, we made changes based on stockholder feedback to reduce the
weighting on significantly larger peers and to ensure the peer companies are, on balance,
appropriately sized and important talent and business competitors. Uber’s revenue and
market capitalization were positioned at approximately the median of the resulting peer group
as of July 2022, when last reviewed and approved by the Compensation Committee. |
The following companies represent
the peer group we used in evaluating the competitiveness and appropriateness of our 2022 compensation program:
| 2022
Peer Group |
| Adobe |
eBay |
Netflix |
Square |
| Airbnb |
Expedia |
Oracle |
Tesla |
| Alphabet |
Intuit |
PayPal |
Twitter |
| Amazon.com |
Lyft |
salesforce.com |
Visa |
| Booking
Holdings |
Meta |
Spotify |
VMware |
| DoorDash |
|
While
the Compensation Committee considers peer data to be a helpful reference to assess the competitiveness and appropriateness of our executive
compensation program, the Compensation Committee applies its own business judgment and experience to determine individual compensation
and does not set or target the compensation of our executives at specific levels or within specified percentile ranges relative to peer
company pay levels. Our Compensation Committee will continue to work with our CEO and our compensation consultants to position pay based
on a variety of factors, including market data for executive compensation drawn from our peer group.
The Compensation
Committee supplements the peer group analysis with references, as a touchstone and without specifically benchmarking to any given level,
compensation data of broader technology and consumer companies to better understand our broader competitive positioning.
2022 Executive
Compensation Program Key Components
The
components of our 2022 compensation program are base salaries, annual cash incentives, and long-term equity incentives in the form of
RSUs, PRSUs, and for Mr. Khosrowshahi, stock options. We also provide certain other benefits, as described under the heading “Other
Benefits.” In order to promote long-term stockholder value creation and link compensation to the key Drivers of our business, our
primary focus is on the long-term elements of target total direct compensation. Under our executive compensation program, 96% of Mr.
Khosrowshahi’s 2022 target total direct compensation was variable and at risk, and on average, 92% was variable and at risk for
our other NEOs.
| 48 |
Uber
2023 Proxy Statement |
Compensation
Discussion and Analysis |
|
A summary of our key pay elements
and the rationale for each element is set forth in the following table:
Base
Salary
We provide
base salary as a fixed source of compensation for our executive officers for their day-to-day responsibilities, allowing them a degree
of certainty in the face of having a substantial percentage of their compensation at risk in the form of equity awards and bonuses contingent
on the achievement of specific performance objectives. Our Compensation Committee recognizes the importance of base salaries as an element
of compensation that, in certain circumstances, can help attract and retain the highest level of talented and experienced executive officers.
Each executive’s
base salary is determined based upon a number of factors, including each executive’s skills, experience, performance, value in
the marketplace and criticality of the role, internal pay equity, and competitive market data. In connection with our annual performance
reviews in March of 2022, we determined it was appropriate to increase Ms. Krishnamurthy’s base salary by 16.67% in order to align
her compensation with those of her peers based on competitive market data, while maintaining 2021 base salary levels for the remaining
NEOs.
The table
below reflects the base salary at the rate in effect for each NEO as of the end of 2022.
| Name |
2022
Base Salary |
2021
Base Salary |
%
Change from 2021 |
| Dara
Khosrowshahi |
$
1,000,000 |
$
1,000,000 |
0% |
| Nelson
Chai |
$ 800,000 |
$ 800,000 |
0% |
| Jill
Hazelbaker |
$ 800,000 |
$ 800,000 |
0% |
| Tony
West |
$ 800,000 |
$ 800,000 |
0% |
| Nikki
Krishnamurthy |
$ 700,000 |
$ 600,000 |
16.7% |
Annual
Cash Bonus
Our
annual cash bonus plan creates a direct relationship between individual bonus amounts and key business performance metrics of the Company
that align with the interests of our stockholders. Each year, the Compensation Committee establishes a target bonus amount for each NEO,
determined as a percentage of base salary. The actual bonuses earned by each NEO are conditioned upon the achievement of certain Company-wide
performance goals established by the Compensation Committee and are also conditioned upon the achievement of individual performance goals,
which are unique to each NEO. Following the close of the fiscal year, the Compensation Committee conducts a comprehensive review of the
level of attainment of the Company-wide performance goals and each NEO’s individual performance, and determines the bonus payout
earned by each NEO. In connection with our annual performance reviews in March 2022 and after reviewing our NEO compensation levels as
compared to our competitors, we determined it was appropriate to increase Ms. Krishnamurthy’s target bonus in order to align to
the desired compensation level based on competitive market data. Additionally, we determined that it was appropriate to increase Mr.
West’s target bonus to ensure that his compensation was competitive with other top legal officers within our peer group, and to
account for the particularly complex and evolving legal and regulatory environment in which we operate for which Mr. West has overall
responsibility.
| 2022 Executive Compensation Program Key Components |
|
|
49 |
The table below details the target
annual cash bonus opportunity for each NEO for 2022:
|
Name |
2022
Target
Bonus |
2021
Target
Bonus |
%
Change from
2021 |
| Dara
Khosrowshahi |
$
2,000,000 |
$
2,000,000 |
0% |
| Nelson
Chai |
$ 800,000 |
$ 800,000 |
0% |
| Jill
Hazelbaker |
$ 800,000 |
$ 800,000 |
0% |
| Tony
West |
$
1,600,000 |
$ 800,000 |
100% |
| Nikki
Krishnamurthy |
$ 700,000 |
$ 600,000 |
16.7% |
2022
Annual Cash Bonus Plan Goals
In 2022, we continued
to evolve the strategic and operational priorities in our annual cash bonus plan, taking into account stockholder feedback received in
2021. The Compensation Committee believes the plan design and chosen measures and weighting are responsive to our stockholders, and appropriate
to incentivize achievement of certain long-term corporate goals that we believe further our long-term strategic and overall profitability
goals. Additionally, the Compensation Committee established individual performance goals for our NEOs which can increase or decrease
the bonus payable to each NEO by 50-150% based on individual performance (with a maximum bonus payable to each NEO capped at 200% of
target). The Compensation Committee believes this provides a structure for recognizing individual achievement and holding each NEO accountable
for his or her personal performance (as described later in the bonus payout section, individual modifiers for 2022 were determined to
be 100%, and therefore did not have an impact on bonus payouts). Below is a high level summary of the structure of our 2022 Annual Cash
Bonus Plan:
Maximum
overall payout is capped at 200% of target bonus
| 50 |
Uber
2023 Proxy Statement |
Compensation
Discussion and Analysis |
|
2022 Annual
Cash Bonus Payouts
Based
on the Compensation Committee’s evaluation of our overall fiscal 2022 performance against the metrics established at the beginning
of 2022, as highlighted above and described in detail below, the annual cash bonus payout for each NEO was as set forth in the table
below. The Committee determined that the Company Goals component of the annual cash bonus paid out at 146.9% based on the level of achievement
against the Company Goals pre-set at the beginning of 2022 (as described in further detail below). While the level of achievement of
the Company Goals component of the annual cash bonus is measured based on pre-set, formulaic metrics and does not allow for any discretionary
adjustments by the Compensation Committee, the Compensation Committee may adjust the final payout of the annual cash bonus on the basis
of individual performance. Although the Compensation Committee recognized the exemplary performance of each NEO over the course of the
year, as measured against the NEOs’ pre-set individual performance metrics (as discussed in detail below), it also recognized that
2022 was a year fraught with macroeconomic headwinds leading to an extremely challenging year for markets across all industries. Taking
this into account, it determined that it was appropriate to not provide an upward adjustment on the basis of individual performance for
any of the NEOs in order to further align the interests of our NEOs with the interests of our stockholders. The table below sets forth
the final bonus payouts for 2022 for each NEO:
Name |
Target Incentive |
Company
Performance % |
Individual
Performance % |
Final Payout
% |
FY22
Incentive
Payout |
| Dara
Khosrowshahi |
$
2,000,000 |
146.9% |
100% |
146.9% |
$
2,937,200 |
| Nelson
Chai |
$ 800,000 |
146.9% |
100% |
146.9% |
$
1,174,880 |
| Jill
Hazelbaker |
$ 800,000 |
146.9% |
100% |
146.9% |
$
1,174,880 |
| Tony
West |
$
1,600,000 |
146.9% |
100% |
146.9% |
$
2,349,760 |
| Nikki
Krishnamurthy |
$ 700,000 |
146.9% |
100% |
146.9% |
$
1,028,020 |
| 2022 Executive Compensation Program Key Components |
|
|
51 |
2022
Annual Cash Bonus Plan Achievement - Company Goals
The
discussion below summarizes each component of the Company goals for our 2022 Annual Cash Bonus Plan and the level of achievement assigned
to each component by the Compensation Committee. For 2022, the Compensation Committee set the target for each goal higher than both the
target and achievement earned in 2021. A summary of achievement for our 2022 Annual Cash Bonus Plan is immediately below, and a detailed
discussion of the results follows.
| 52 |
Uber
2023 Proxy Statement |
Compensation
Discussion and Analysis |
|
| Financial
Goals (60% Weighting) |
✓
Gross
Bookings. In 2022, we beat our Gross Bookings targets despite foreign exchange pressure
in the second half of the year, with Gross Booking growing 33% year over year (YoY) on a
constant currency basis. This growth was driven by continued improvements across key areas
such as pricing, supply, and in the marketplace, which translated to category position improvements
and allowed us to outperform our targets. Both our Mobility and Delivery businesses improved
YoY, with our Mobility business surpassing Gross Booking levels from 2019, prior to the impact
of the COVID-19 pandemic.
✓
Adjusted EBITDA. 2022
Adjusted EBITDA improved YoY by approximately $2.5 billion, significantly exceeding our targets as our growth outperformed our goals
by a wide margin. This was driven by cost improvements, demonstrating strong operating leverage, and our focus on improving the Driver
and Courier experience and Driver supply hours. With an uncertain global macroenvironment emerging in 2022, we remained rigorous
on costs, disciplined on headcount, and balanced on capital allocation, which combined with strong technical and operational capabilities,
left us well positioned to deliver expanding profitability throughout 2022. Our Mobility business had a standout year with record
Adjusted EBITDA margins of 6.3% (as a percent of Gross Bookings), and our Delivery business significantly over performed on Adjusted
EBITDA, ending 2022 with $551 million, an increase of 258% YoY. |
| Strategic
& Operational Priorities (40% Weighting) |
At
the beginning of 2022, the Compensation Committee established five key strategic and operational
priorities that we believe furthered our long-term strategy and aligned with our missions
and values as a company. These strategic and operational priorities were a mix of quantitative
metrics based on objective criteria and were each equally weighted (i.e., 8%) in the bonus
formula, accounting for 40% of the annual cash bonus. Uber has always been a company that
embraces change and flexibility in order to respond to evolving market conditions and opportunities,
as well as a company that values and encourages problem-solving and speed, and we believe
that the priorities we established for our 2022 Annual Cash Bonus Plan reflect the current
state of our business and incorporate stockholder feedback. We believe that the balance of
strategic and operational quantitative goals provides a comprehensive and robust system for
the measurement of our NEOs’ performance, while enabling the Company to embrace the
pace of change and the importance of innovation and agility in the market in which we operate.
Performance
against each of the strategic and operational priorities was evaluated at the end of 2022, with such assessment described below:
✓
Build
robust membership program across Mobility and Delivery. We exceeded our internal target of a 20% Gross Bookings coverage from
members and ended the year with members generating more than a quarter of Uber’s total Gross Booking and over 40% of our U.S.
Delivery Gross Bookings. By the end of 2022, our Uber One membership program nearly doubled to approximately 12 million members and
Uber One was live in 12 countries, giving 83% of our users access to the membership.
✓
Maintain
or gain category position (CP)3 for Mobility and Delivery globally. In 2022, our CP for our Delivery business reached
an all- time high in several of our key markets and maintained or gained CP in all but three of our top markets, including in the
United States, Spain, Japan, and Canada. Our Mobility business maintained or gained CP in most of our key markets through 2022, including
in the United States where CP reached near six-year-highs in late December 2022, and in Mexico, where CP gained six percentage points.
✓
Creation
and implementation of DEI strategies that move our Company-wide DEI goals forward. With the help of our Chief Diversity Officer,
each executive officer created and implemented DEI strategies for their respective organizations. Although results against targets
remained mostly stable YoY, and some forward progress was made on several of our metrics (including our overall number of women employees,
women managers, underrepresented people (URP)4 overall, and URPs at the senior analyst level and above), we did not reach
our annual targets. However, we did make substantial progress in our commitments to building racial equity internally and externally.
In 2020 we established the Racial Equity Leadership Council to ensure accountability and to operationalize these commitments. Of
our 16 racial equity commitments we pledged to fulfill by 2025, 11 were fulfilled in 2022.
✓
Improve
Employee Retention. We successfully reached our goal of reducing voluntary attrition within the Company. Our voluntary attrition
at the end of 2022 was approximately 35% lower than at the end of 2021. While some of this decrease may be attributable to external
factors (e.g., macroeconomic, reductions in force at many of our peer companies and in the broader tech market), our employee survey
scores show continued satisfaction with Uber as a place to work and therefore a place where employees want to stay and continue to
help us achieve our long-term goals. Given the mixed internal and external factors impacting this metric, the Compensation Committee
chose to rate it as a "met" and not "exceed" despite significantly exceeding our goal for 2022.
✓
Best
Platform for Drivers and Couriers. In 2022, as a result of our focus on Driver and Courier well-being and product innovation,
monthly active Drivers and Couriers increased by 23%, with our global Driver and Courier base now at an all-time high of almost 5.4
million, with record levels of Driver and Courier engagement. The roll out of a suite of new product features, including Upfront
Fares and Upfront Destination, that represent a foundational change in the Driver experience has resulted in an increase in session
conversions and trips. |
3 Category
position is based on internal estimates based on our billings and estimated billings of other ridesharing platforms and/or food delivery
platforms as of the last week of the applicable period. Billings represents the sum of the amounts billed to the consumer, as listed
on the receipt after discounts and credits.
4 Uber categorizes
United States employees as URP if they self-identify into the following demographic categories: Black or African American, Hispanic or
Latino, American Indian or Alaska Native, Native Hawaiian or Other Pacific Islander, or Two or More Races.
| 2022 Executive Compensation Program Key Components |
|
|
53 |
2022
Annual Cash Bonus Plan Achievement - Individual Modifier
At the
beginning of 2022, the Compensation Committee established strategic and functional goals that contribute to our long-term strategy and
align with the mission and values of our Company for each NEO on an individual basis. As discussed above, although the Compensation Committee
may adjust the final payout of the annual cash bonus upward or downward by 50-150% on the basis of individual performance after determination
of the formulaic Company-wide achievement, and despite the Compensation Committee recognition of the exemplary performance of each NEO
over the course of the year (as described in detail in the section below), it also recognized that 2022 was a year fraught with macroeconomic
headwinds leading to an extremely challenging year for markets across all industries. Taking this into account, it determined that it
was appropriate to not provide an upward adjustment on the basis of individual performance for any of the NEOs in order to further align
the interests of our NEOs with the interests of our stockholders.
While each
NEO’s goals were established on an individual basis, the Compensation Committee chose two goals that applied to multiple NEOs,
as discussed below.
| · | Activate
values into Company culture and day to day. Each of our NEOs’ personal goals included
executing the activation of values into the day-to-day culture of the Company, as measured
by culture questions on internal employee experience surveys distributed to employees across
the Company, including to employees on each of the NEOs’ teams. Each of the NEOs succeeded
in achieving this goal, as indicated by the seven percentage point improvement in measures
that indicate how employees are experiencing our values. Additionally, all year-end key employee
survey results increased positively since the mid-year survey, demonstrating that the NEOs
made progress on this goal continuously. |
| · | Execute
on constructive M&A integrations activities. Messrs. Khosrowshahi, Chai, and West
and Ms. Krishnamurthy each had the goal of executing strategic deals and the resulting integration
activities. Messrs. Khosrowshahi, Chai, and West and Ms. Krishnamurthy achieved core objectives
through the divestiture of Routematch and several strategic acquisitions and investments
(e.g., CarNextDoor) which positioned us to continue growing our key businesses (e.g., enter
adjacent P2P marketplace, offer restaurant partners a strong alternative to a competitor,
and accelerate B2B software development for Drizly). Additionally, Messrs. Khosrowshahi,
Chai, and West executed impactful capital markets transactions (e.g., the monetization of
our Zomato stake for $376 million and the amendment and extension of our cash revolver for
$2.2 billion). Ms. Krishnamurthy also led the launch of Uber Freight as a standalone business
within the Company and successfully integrated Cornershop employees into the Company from
a human resources perspective. |
The table
below sets forth the individualized performance goals of each NEO established at the beginning of 2022 and summarizes the results assessed
by the Compensation Committee in determining whether to modify the annual cash bonus payment. As noted above, the Compensation Committee
did not choose to modify the annual cash bonus payments through a downward or upward adjustment from the individual modifier.
| Dara
Khosrowshahi |
| Increase
cross-platform engagement |
·
Improved the percentage of Gross Bookings generated by cross-platform users against the baseline by two percentage points in markets
where our Delivery and Mobility businesses operate
· Grew
the percentage of monthly active platform consumers that are cross-platform users against the baseline by 0.6 percentage points in
markets where our Delivery and Mobility businesses operate |
| Make progress
on climate change commitments |
· Submitted
science based targets to the SBTi for validation and in 2023, Uber’s near and long-term
science-based emissions reduction targets were approved by the SBTi
· Continued
momentum against zero emissions goal by increasing the monthly active zero emission vehicle drivers on the platform by 32,000 when
comparing Q4 2021 to Q4 2022 |
| Nelson
Chai |
| Deliver
on cost savings and efficiency |
· Drove
significant improvement in GAAP operating costs, reducing from 11.5% of Gross Bookings in Q4 of 2021 to 10.5% of Gross Bookings in
Q4 of 2022, approximately 100 bps improvement year over year–driven by progress across most key cost areas, combined with continued
discipline on fixed costs resulted in significant efficiencies and cost savings |
| Maintain
and build liquidity to fund growth beyond reaching profitability |
· Achieved
being free cash flow positive for 2022 at $390 million
·
Executed impactful capital markets transactions and continued to maintain a strong liquidity position, ending the year with $4.3
billion in unrestricted cash, cash equivalents, and short-term investments |
| 54 |
Uber
2023 Proxy Statement |
Compensation
Discussion and Analysis |
|
| Jill
Hazelbaker |
| Continue
to drive demand across Uber products |
· Consideration
for our Mobility offering remained stable or increased in all priority markets, and either
met or exceeded target in four out of seven priority markets
·
Consideration for our Delivery offerings largely remained stable. Consideration for Grocery, Alcohol, and Convenience remained
stable or increased in all priority markets
· Consideration
of Uber One saw strong results with all markets reaching or exceeding targets |
| Deliver
new users and increase engagement through performance marketing |
· Notable
progress on investment efficiency throughout 2022 across Mobility and Delivery as a result
of creative optimization, audience targeting, and bidding optimization, despite challenging
funding restraints throughout the second half of the year
· Driver
and courier efforts adjusted city tiering to put investments where it was needed most, driving more driver and courier signups and
supply hours throughout 2022. Driver efforts over delivered on supply hour generation, contributing to a more balanced marketplace |
| Regulatory
progress |
· Established
four labor organization partnerships globally
· Advanced
Uber’s vision of IC+ by supporting two IC+ bills in Washington State and Chile
· Renewed
Uber London license directly from Transport for London for the first time in approximately six years |
| Tony
West |
| Reduce
Uber’s risk profile |
· Reduced
legal and regulatory payouts against reserves by 47% in 2022
· Maximized
in-house staffing model for more efficient use of external spend, reduced outside counsel spend by approximately 25%
·
Recovered $19.6 million and prevented $85 million in platform fraud losses by mitigating vulnerabilities, enabling millions of
dollars to be invested back into the business |
| Regulatory
progress |
· Over
70 personal engagements with critical stakeholders, including policymakers, regulators, advocacy
groups, and civil rights organizations around the world to build partnerships and collaborate
on safety, future of work, sustainability, privacy, and access to medical and emergency services
· Established
four labor organization partnerships globally
· Advanced
Uber’s vision of IC+ by supporting two IC+ bills in Washington State and Chile
· Championed
and exceeded progress targets for advancing the implementation of Proposition 22 in California
· Renewed
Uber London license directly from Transport for London for the first time in approximately six years |
| Nikki
Krishnamurthy |
| Implement
Uber’s hybrid work approach |
· Implemented
a hybrid work approach to allow employees to work where they need to be productive
· Increased
favorability in November from July as measured by internal employee experience surveys |
| Improve Uber’s
hiring |
· Met
hiring goals in 2022 with approximately 8,300 external candidates hired, excluding internal transfers, despite slowing the pace of
hiring in the second half of the year |
Long-Term Equity
Incentives
In 2022, we
continued to use equity incentives as a key component of our total compensation package for our NEOs. Consistent with our
compensation objectives, we believe this approach allows us to attract and retain the highest level of talented and experienced
executive officers, aligns our executive officer incentives with the long-term interests of our Company and our stockholders, and
ultimately drives long-term stockholder value. Early in the year, the Compensation Committee reviews and approves annual equity
awards for our NEOs, and awards are granted in March.
| 2022 Executive Compensation Program Key Components |
|
|
55 |
In
determining the form, size, frequency, and material terms of NEO equity awards, our Compensation Committee customarily considers, among
other factors, each executive officer’s role criticality relative to others at our Company and the Company’s major strategic
initiatives, Company and individual performance, the equity awards provided to executive officers in similar roles of our peer companies,
and the determination of our Compensation Committee, Chief Executive Officer, and compensation consultants of the essential need to retain
these executive officers.
Our compensation
program is intended to achieve alignment between our long-term strategic goals and our stockholders’ interests, and be grounded
in our pay for performance philosophy and our mission and values. Half of the annual equity awards to our CEO and CFO are in the form
of PRSUs, which ties them directly to key financial and operational priorities. In 2021, we extended the PRSUs to other NEOs as well
to create alignment across the executive team. We established the PRSUs weighting at one-third of the annual equity awards after a review
of our peer practices and in response to our direct experience in the current highly competitive talent market. In 2022, we added stock
options to the compensation mix for Mr. Khosrowshahi in lieu of the time-based RSU award he would otherwise have been granted, which
ties Company stock performance to the value received. We will continue to monitor the equity mix in the future to ensure it appropriately
balances incentives, alignment, and retention.
RSUs
Time-based
RSUs are granted to NEOs to incentivize executives to build value in the Company over time and align equity ownership with our stockholders,
while continuing to provide value to our NEOs during periods of market volatility. Our RSUs typically vest over four years.
PRSUs
Performance-based
RSUs, while previously only granted to certain NEOS, are now granted to all of our NEOs to drive the achievement of key financial, operational,
and strategic objectives, which aligns the interests of our executives and stockholders. At the beginning of each performance period,
the Compensation Committee establishes financial and strategic goals with metrics that are 100% quantitative for the PRSU Awards. The
PRSU Awards vest based on the achievement of those specified pre-established quantitative targets at the end of the three-year performance
period.
The following
are the outstanding PRSU award cycles as of December 31, 2022, illustrating the evolution of our PRSU program over the past three years.
| Grant
Year |
Participating
NEOs |
Performance
Period |
Performance
Metrics |
| 2022 |
Mr.
Khosrowshahi
Mr. Chai
Ms. Hazelbaker
Mr. West
Ms. Krishnamurthy |
2022-2024 |
·
Annual Adjusted EBITDA Margin(1)
(13.3% for each of 2022, 2023, 2024)
·
Gross Bookings Growth (40%)
· ESG
(20%)
o
DEI (10%)
o
Safety Improvement (10%)
·
Relative TSR Modifier |
| 2021 |
Mr.
Khosrowshahi
Mr.
Chai
Ms.
Hazelbaker
Mr. West
Ms. Krishnamurthy |
2021-2023 |
·
Annual Adjusted EBITDA Margin(2) (13.3% for
each of 2021, 2022, 2023)
·
Revenue Growth (40%)
·
ESG (20%)
o
DEI (10%)
o
Safety Improvement (10%)
·
Relative TSR Modifier |
| 2020 |
Mr.
Khosrowshahi
Mr. West
Ms. Krishnamurthy |
2020-2022 |
·
Annual Key Financial Targets (25% for
each of 2020, 2021, 2022)
o
Gross Bookings
o
Mobility & Delivery Segment Adj. EBITDA
o Adjusted
EBITDA
· ESG
(25%)
o
DEI (12.5%)
o
Safety Improvement (12.5%) |
| (1) | Adjusted
EBITDA as a percentage of Gross Bookings |
| (2) | Adjusted
EBITDA as a percentage of Revenue |
Stock Options
In 2022,
we added stock options to the mix of Mr. Khosrowshahi’s long-term equity incentive compensation in order to further reinforce stockholder
value creation in our long-term incentive program. This further aligns his interests with those of stockholders by tying the Company’s
stock performance to the potential value received. The stock options were added in lieu of a portion of the time-based RSUs that would
otherwise have been granted to Mr. Khosrowshahi as part of his equity compensation. As a result, 75% of Mr. Khosrowshahi’s target
annual equity opportunity is subject to total stockholder returns and incentivizes performance that extends beyond our three-year PRSU
program.
| 56 |
Uber
2023 Proxy Statement |
Compensation
Discussion and Analysis |
|
Information
regarding prior years’ stock option grants to Messrs. Khosrowshahi, Chai, and West, and Ms. Krishnamurthy, including performance
based vesting conditions is contained in the table “Outstanding Equity Awards as of December 31, 2022.”
2022 Equity
Awards
In
2022, our Compensation Committee granted a combination of RSUs, PRSUs, and, in the case of Mr. Khosrowshahi, stock options, to our NEOs.
Our PRSU awards are subject to the structure described below and vest at the end of a three-year period. Our RSU awards granted in 2022
to our NEOs other than Mr. Khosrowshahi vest over four years on a monthly basis. RSUs and stock options granted in 2022 to Mr. Khosrowshahi
vest 25% per year over four years, providing additional retentive value through annual cliff vesting.
The Compensation
Committee felt it was necessary and appropriate to increase Mr. Khosrowshahi’s 2022 annual equity grant to ensure his annual compensation
remains competitive with his peers. Since joining Uber in 2017, Mr. Khosrowshahi had only received one increase to his annual grants,
as the Compensation Committee had been more conservative given his new hire awards and in the context of navigating the impact that the
global pandemic had on Uber’s overall business. Additionally, in connection with our annual performance reviews in March 2022,
after reviewing our NEO compensation levels as compared to our competitors and outstanding equity positions, the Compensation Committee
determined it was appropriate to increase the 2022 annual equity grants for both Mr. Chai and Mr. West. As a reflection of the change
to the competitive market during 2022, our stock price performance and how our stockholders have fared, and our efforts to achieve GAAP
operating income profitability in 2023, the Compensation Committee determined it was appropriate to decrease our annual equity grants
for 2023 by 10% versus 2022 grants.
The total
equity grants awarded to our NEOs in 2022 consisted of the following:
Name |
Annual
RSUs(1) |
Annual
PRSUs(1)(2) |
Annual
Stock
Options(3) |
Total
Equity |
| Dara
Khosrowshahi |
$
5,125,000 |
$
10,250,000 |
$
5,125,000 |
$
20,500,000 |
| Nelson
Chai |
$
6,000,000 |
$ 6,000,000 |
$ 0 |
$
12,000,000 |
| Jill
Hazelbaker |
$
4,666,667 |
$
2,333,333 |
$ 0 |
$ 7,000,000 |
| Tony
West |
$
5,333,333 |
$
2,666,667 |
$ 0 |
$ 8,000,000 |
| Nikki
Krishnamurthy |
$
3,666,667 |
$
1,833,333 |
$ 0 |
$ 5,500,000 |
| (1) | The
dollar amounts listed in the table above for fiscal year 2022 PRSUs will not match the amounts
in the Stock Awards column of the Summary Compensation Table or the Grants of Plan-Based
Awards table. Because the accounting grant date of a PRSU occurs when the performance targets
are approved and the terms of the grant become certain, and some financial targets under
our PRSUs are established annually, stock awards listed in the Summary Compensation Table
and Grants of Plan Based Awards Table include portions of current and prior year performance-based
equity awards, as described in more detail in note two to the Summary Compensation Table.
In addition, the dollar amounts listed in the table above for 2022 RSUs will not match the
amounts in the Stock Awards column of the Summary Compensation Table or the Grants of Plan-Based
Awards Table because the number of shares subject to an award is determined based on the
30-day average stock price for the month immediately preceding the month of grant, whereas
the grant date fair value reported in those tables is based on the stock price on the grant
date. |
| (2) | The
PRSUs vest in full following the end of the three-year performance period, with the number
of shares earned determined based on performance against established goals, 60% of which
are measured at the completion of the three-year period, with the remaining 40% measured
based on certain metrics for each year in the three-year period. |
| (3) | Stock
options vest 25% per year over four years. |
2022 PRSUs -
Metrics and Weights
In 2022,
at least one-third of the annual equity awards made to our NEOs were in the form of PRSUs (50% in the case of our CEO and CFO). Our Compensation
Committee established quantitative goals for our 2022 PRSUs, with vesting to occur at the end of a three-year period, subject to the
NEOs achievements of the specified pre-established targets. Similar to our 2021 PRSUs, financial metrics accounted for 80% of the 2022
PRSUs, but the financial metrics, as described below, differed from the 2021 PRSUs. As our business evolves, our metrics for measuring
success do as well. Given our global footprint, multi-party marketplaces, and complexities in accounting differences between geographies
and segments, we feel that assessing the margin potential of the businesses as a percentage of Gross Bookings instead of Revenues simplifies
and improves the analysis of each segment relative to the other.
| · | Adjusted
EBITDA Margin. 40%
of our 2022 PRSUs were subject to our Adjusted EBITDA Margin goals, with such achievement
being measured on an annual basis against targets set by our Compensation Committee established
at the beginning of each year of the performance cycle. |
| · | Gross
Bookings Growth. 40%
of our 2022 PRSUs were subject to our Gross Bookings Growth goal, with such achievement being
measured as the average over the three-year performance period against pre-set targets established
by our Compensation Committee. |
| 2022 Executive Compensation Program Key Components |
|
|
57 |
Below is a high-level summary
of the structure of our 2022 PRSU program:
In addition
to Adjusted EBITDA Margin and Gross Bookings growth, we included ESG metrics, including DEI and safety improvement goals, in our 2022
PRSUs because we believe these goals are key to our strategic initiatives and growth. We also included a relative total stockholder return
modifier to further align the interests of our executives to those of our stockholders.
| · | Diversity,
Equity, and Inclusion (DEI). Building diversity in the workforce is a key priority
for the Company. The DEI key performance indicators we established consisted of growing the
percentage of women at Uber’s manager level and above to 38% and growing the percentage
of U.S. underrepresented people at the senior analyst level and above to 15% over the 3 year
performance period, as further detailed in our 2022 People & Culture Report. |
| · | Safety
Improvement. We strive to be the safest and most trusted choice for the movement
of people and things. Our goal is to continually raise the bar on safety, and we have made
significant investments in safety technology and transparency. As a result, we continue to
be determined that the achievement of certain safety goals, including the reduction in motor
vehicle fatalities and critical sexual assaults, an appropriate metric for the 2022 PRSUs.
These metrics are further discussed in our U.S. Safety Report. |
| · | Relative
Total Stockholder Return (rTSR). In order to further align the interests of our executives
to those of our stockholders and to tie the long-term compensation of our executives to our
long-term financial success, we added an rTSR modifier to the metrics of our long- term incentive
compensation awards. The rTSR modifier compares the three-year annualized TSR of the Company,
calculated by using the average stock price for the month immediately preceding the beginning
of the performance period and average stock price for the month ending the performance period,
against the TSR of the companies included in the S&P 500 over the same three year period.
We use the S&P 500 as the comparator for our rTSR modifier as opposed to, for example,
our peer group or a technology-focused comparator group (which may experience different levels
of volatility in returns compared to the broader market) because it is a robust collection
of companies that we believe provides a stable and appropriately representative point of
comparison for our Company’s returns. The rTSR modifier ensures that the payout of
our PRSUs is appropriately calibrated based on whether our TSR is comparable to or better
than the companies in the S&P 500. The table below sets forth the mechanics of the rTSR
modifier. |
| Multiplier(1) |
Percentile |
Performance
Level |
| 0.7X |
At
or below 25th percentile |
Below
Target(2) |
| 1.0X |
50th
percentile |
Target(3) |
| 1.3X |
At
or above 75th percentile |
Maximum(4) |
| (1) | Multipliers
in between values shown are linearly interpolated. |
| (2) | If
TSR is in the 0-25th percentile, the applicable rTSR modifier will always be 0.7X, and could
result in an ultimate payout of less than 50% of the PRSU target, due to such modification. |
| (3) | If
absolute TSR is negative over the three-year period and rTSR is greater than the 50th percentile,
the upward modifier is capped at 1.0X, which provides incentive to outperform comparators,
but safeguards against upward modification if stockholders have not had positive returns. |
| (4) | The
rTSR modifier will never adjust the performance results above 150% (the overall cap of our
2022 PRSUs). |
| 58 |
Uber
2023 Proxy Statement |
Compensation
Discussion and Analysis |
|
2021 and 2022 PRSUs - Metrics and
2022 Key Financial Targets and Results
The Compensation Committee
approved the following key financial targets for (i) year 2 of the 2021 PRSUs, and (ii) year 1 of the 2022 PRSUs.
2022 PRSUs - 2022 Key Financial Targets
and Results
Below reflects the actual
achievement of the annual Adjusted EBITDA Margin target for the 2022 portion of the 2022 PRSUs. No shares are forfeited until the completion
of the three-year performance cycle.
| 2022
Key Financial Targets |
Weighting |
Goal |
2022
Results |
%
Achieved |
| Adjusted
EBITDA Margin(1) |
13.3% |
0.7% |
1.5% |
150% |
| (1) | Adjusted
EBITDA as a percentage of Gross Bookings |
2021 PRSUs - 2022 Key Financial Targets
and Results
Below reflects the actual
achievement of the annual Adjusted EBITDA Margin target for the 2022 portion of the 2021 PRSUs. No shares are forfeited until the completion
of the three-year performance cycle.
| 2022
Key Financial Targets |
Weighting |
Goal |
2022
Results |
%
Achieved |
| Adjusted
EBITDA Margin(1) |
13.3% |
2.9% |
5.4% |
150% |
| (1) | Adjusted EBITDA as a percentage of Revenue |
| 2022 Executive Compensation Program Key Components |
|
|
59 |
2020 PRSUs - 2022 Key Financial Targets
and Results
The Compensation Committee
approved the following key financial targets for year 3 of the 2020 PRSUs at the beginning of 2022.
Below reflects the actual achievement
of the annual Key Financial Targets for the 2022 portion of the 2020 PRSUs. Final payout of the 2020 PRSUs is discussed below.
| 2022
Key Financial Targets |
Weighting |
Goal |
2022
Results |
%
Achieved |
| Gross
Bookings |
8.33% |
$112.6B |
$115.4B |
117.2% |
| Mobility
& Delivery Segment Adj. EBITDA |
8.33% |
$3,154M |
$3,850M |
150% |
| Adjusted
EBITDA |
8.33% |
$800M |
$1,713M |
150% |
2020 PRSU Awards - Three Year Strategic
Targets and Results
The Compensation Committee
established the following strategic targets to be measured at the end of the three-year performance period for the 2020 PRSU Awards.
Below reflects the actual achievement
of the three-year strategic goals based on the pre-established targets and metrics for the 2020 PRSU Awards. Final payout of the 2020
PRSU Awards is discussed below.
| Three
Year Strategic Targets |
Target
Goal |
Achievement |
Metric
Weight |
Weighted
Score |
| DEI(1)(2)(3) |
|
72.6% |
12.5% |
9.1% |
| Percentage
of women at Uber’s manager level and above |
35.0% |
67.5% |
6.25% |
4.2% |
| Percentage
of U.S. underrepresented people at the senior analyst level and above |
14.0% |
77.6% |
6.25% |
4.9% |
| Safety
Improvement(1)(4) |
|
23.3% |
12.5% |
2.9% |
| Percent
of reduction U.S. Critical Sexual Assault(4) |
(15.0%) |
46.7% |
6.25% |
2.9% |
| Percent
of reduction in U.S. Motor Vehicle Crash Fatalities(4) |
(5.0%) |
0% |
6.25% |
0% |
| Total
Three Year Strategic Metrics |
|
|
25.0% |
12.0% |
| (1) | Achievement
of DEI and safety Improvement goals may take into consideration the impact of certain M&A
transactions. |
| (2) | Results
as of January 31, 2023 (inclusive of promotions in early 2023 related to 2022 performance). |
| (3) | Further
discussion of the achievement of our DEI strategic targets can be found in our forthcoming
report on people & culture. |
| (4) | Safety
improvement performance measure defined by the Company’s safety incident rate over
the baseline year of 2020, as measured in reductions in U.S. motor vehicle crash fatalities
over a two-year period and U.S. critical sexual assaults over a three-year period. These
metrics are further defined in the U.S. Safety Report, but will not exactly match to what
is reported in our U.S. Safety Reports (past and future) because of a number of temporal
and methodological differences, including but not limited to: (i) Different time periods:
our second U.S. Safety Report compared the two year period of 2019-2020 to 2017-2018. This
measurement uses 2020 as a baseline, and (ii) Reliance on preliminary data: Some safety incidents
are reported with a significant time lag after occurrence. This measurement is based on incidents
reported and categorized as of January 2023. Additionally, U.S. motor vehicle crash fatalities
are not reconciled to NHTSA’s Fatality Analysis Reporting System (FARS) as the agency’s
2021 fatality data has not been released. |
DEI.
At the beginning of 2020, our Compensation Committee established two quantitative metrics
for measuring performance against our DEI targets, as identified in the table above. We initially set aggressive goals which unfortunately
were impacted by the layoffs that were instituted in 2020 due to the COVID-19 pandemic, some of the acquisitions we have completed over
the past three years, and the eventual slow down in hiring. We have continued to include DEI metrics in our PRSU Awards and are committed
to working to achieve those goals.
Safety
Improvement. We continue to include safety goals in our PRSU program, as we are constantly
striving to be the safest and most trusted choice for the movement of people and things. The change in both critical sexual assault and
motor vehicle crash fatality rate in the United States, were heavily impacted by societal shifts during the COVID-19 pandemic, and since
targets were set prior to the pandemic, they did not account for the shifts observed during the multi-year period. Despite those external
factors, the Committee decided to not adjust these targets and allow the forfeiture of a certain portion of these awards. Uber has disclosed
safety incident data in our U.S. Safety Reports. As noted in our second Safety Report, the motor vehicle crash fatality rate increase
observed from 2019-2020 compared to 2017-2018 was in line with the increase observed nationally, as NHTSA recorded record-high motor
fatality rates in 2020. At the time of this release, NHTSA’s 2021 fatality data is not available for reconciliation, but preliminary
data from NHTSA indicates that 2021 also saw elevated motor fatality trends. For additional details on how U.S. safety incident rates
have trended, as well as the investments made in safety over the last few years, please review our second U.S. Safety Report.
| 60 |
Uber
2023 Proxy Statement |
Compensation
Discussion and Analysis |
|
2020 PRSUs -
Payouts
Final
payout of the 2020 PRSUs, which vest on March 16, 2023 subject to achievement, is set forth below. Results disclosed below reflect the
level of achievement of the key financial performance metrics for each of FY20-FY22 and the level of achievement of our DEI and safety
improvement performance metrics over the three-year performance period. The overall achievement of our 2020 PRSU awards also reflects
the choice of the Compensation Committee not to adjust the originally established 2020 goals for the 2020 portion of the 2020 PRSU awards,
despite the unexpected impact of the COVID-19 pandemic on performance in 2020.
| 2020-2022 Performance
Measure |
Weighting |
%
Achieved |
%
Weighted |
Total
Overall Payout |
| 2020
Key Financial Targets |
25% |
0% |
0% |
|
| 2021
Key Financial Targets |
25% |
95.6% |
23.9% |
|
| 2022
Key Financial Targets |
25% |
139.1% |
34.8% |
70.7% |
| DEI |
12.5% |
72.6% |
9.1% |
|
| Safety |
12.5% |
23.3% |
2.9% |
|
Based on these performance results,
final payout of the 2020 PRSU Awards for the participating NEOs is set forth below.
FY20-FY22
Award |
#
of PRSUs
Granted |
#
of PRSUs
Forfeited |
#
of PRSUs
Vested |
| Dara
Khosrowshahi |
162,507 |
47,689 |
114,818 |
| Tony
West |
43,335 |
12,718 |
30,617 |
| Nikki
Krishnamurthy |
43,335 |
12,718 |
30,617 |
| |
|
|
61 |
Other Benefits
Employment
Agreements and Post-Employment Compensation. We understand that it is possible that we may
be involved in a transaction or business change or reorganization, including a change in control, that could result in the departure
of some of our executive officers. To encourage our executive officers to continue normal business operations, remain dedicated to innovating
and exploring potential business combinations that may not be in their personal best interests, and maintain a balanced perspective in
making overall business decisions during potentially uncertain periods, we adopted our Executive Severance Plan in 2019, as described
and quantified under the heading “Potential Payments Upon Termination or Change in Control.” We believe our Executive Severance
Plan supports our executive officers in making “big bold bets” on transactions that maximize stockholder value, even though
they may result in the termination of an executive officer’s employment. We believe the size and terms of these benefits appropriately
balance the costs and benefits to our stockholders. We also believe these benefits are consistent with the benefits offered by companies
with whom we compete for talent, and accordingly allow us to recruit and retain the highest level of talented and experienced executive
officers.
The employment
agreements we have entered into with each NEO also serve as participation agreements for our Executive Severance Plan. Each employment
agreement generally has no specific term and provides for at-will employment. The employment agreements also set forth each NEO’s
initial base salary, eligibility for an annual cash incentive opportunity, certain employee benefits, the terms of certain equity grants,
and certain grandfathered severance commitments, as described and quantified under the heading “Potential Payments Upon Termination
or Change in Control.”
Security.
Because of the high visibility of our Company, our Board of Directors has authorized a security
program for the protection of our most senior executives based on ongoing assessments of risk, as well as actual and credible threats
made against our executive officers. We require these security measures for our benefit because of the importance of these executives
to Uber, and we believe the costs of our security program are necessary and appropriate business expenses since they arise from the nature
of the executives’ employment at Uber. Our Board of Directors regularly evaluates and approves the cost and components of our security
program, based on comparative data regarding the cost and scope of security programs established by companies in the San Francisco Bay
Area, both within and outside of our peer group, and professional assessments of safety threats made against our executive officers.
Since the implementation of our overall security program, each of these assessments has identified actual and credible threats to Mr.
Khosrowshahi’s safety as a result of the high-profile nature of being our CEO.
Our security program
consists of business-related and personal security services, including certified protection officers, and secure meeting spaces and lodging
for our executive officers, and the charter aircraft travel described below, as our security team deems necessary and appropriate. In
addition, we provide residential security and commuting and other personal transportation services to Mr. Khosrowshahi as our CEO.
In
connection with our efforts to achieve profitability and in response to stockholder feedback regarding expenditures on executive perquisites,
we have continued to streamline our security program and security department staffing, which contributed to the decrease in Mr. Khosrowshahi’s
“All Other Compensation” by approximately 67% year-over-year.
Although
we view the security services provided to certain of our NEOs as necessary and appropriate business expenses, we reported the aggregate
incremental cost of certain of these services in the “All Other Compensation” column of the Summary Compensation Table.
Air
Travel. In order to provide a more secure air traveling environment, we provide charter aircraft
services for business purposes for certain executive travel. Our Private Airplane Use Policy provides that our CEO and our other NEOs,
subject to need based on a security risk assessment, may utilize charter aircraft for business purposes and limited personal travel,
subject to availability, provided that for any personal travel the NEOs directly pay or reimburse us for the greater of (i) the aggregate
incremental cost of the flight, or (ii) the imputed fringe benefit income value of any personal use. The incremental cost charged to
our NEOs for personal use includes, when applicable, the following costs: fuel, landing/parking fees, crew fees and expenses, customs
fees, flight services/charts, variable maintenance costs, inspections, catering, aircraft supplies, telephone and wi-fi usage, trip-related
hangar rent and parking costs, plane repositioning costs, de-icing fees, pet fees, and other miscellaneous expenses. We do not seek reimbursement
of costs such as management fees, lease or subscription payments, banked hours, crew salaries, maintenance costs not related to trips,
training, home hangaring, general taxes and insurance, and services support, as these costs are already incurred for business purposes.
Guests and family members are permitted to accompany an eligible NEO on the charter aircraft for personal travel or when the aircraft
is already going to a specific destination for a business purpose, subject to these reimbursement rules.
Relocation
Assistance. We believe that the best ideas can come from anywhere. To enable us to attract
the highest level of talented and experienced executive officers, certain of our executive officers are eligible to receive or have received
relocation assistance when necessary or appropriate, including travel, commuting, and temporary housing costs and reimbursement of moving
costs. We also generally offer a tax gross-up to employees, including our executive officers, for these payments. There were no relocation
expenses incurred for NEOs in 2022.
Employee
Benefits. We provide health, dental, vision, life, and disability insurance benefits to our
executive officers, on the same terms and conditions as provided to all other eligible U.S. employees. Our executive officers may also
participate in our broad-based 401(k) plan, which currently does not include a company match or discretionary contribution. We believe
these benefits are consistent with the broad-based employee benefits provided at the companies with whom we compete for talent and therefore
are important to attracting and retaining the highest level of talented and experienced executive officers.
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2023 Proxy Statement |
Compensation
Discussion and Analysis |
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Other Compensation Matters
Diversity and
Inclusion and Internal Pay Equity
The Compensation
Committee recognizes the strategic importance of a workforce that celebrates, supports, and invests in equality, diversity, and inclusion.
Accordingly, the Compensation Committee considers Company-wide internal pay equity and diversity, among other factors, when making compensation
decisions and includes DEI metrics in the annual cash bonus program and PRSUs awarded to our NEOs. We have made commitments as a Company
towards eliminating racism from our platform, building equitable products with our technology, and doubling down on equity and belonging
both internally and in the communities we serve. Those commitments include:
We are committed
to ridding our platform of racism
| · | Specialized
customer support: All customer service agents (current and future) go through specialized
anti-discrimination training. |
| · | No
commitment, no ride: In the U.K. and U.S., 97% of riders and 99% of Drivers have adopted
our updated Community Guidelines. |
We are committed
to fighting racism with technology
| · | Product
equity (formerly inclusive product design): Revamped in-app Service Animal Policy so
Drivers are more aware, automated accessibility and screen reader compatibility, and improved
onboarding and routing for support of transgender Drivers and Couriers. |
| · | Marketplace
fairness: The Marketplace Fairness team is scaling and publicizing outcomes of marketplace
analysis and is beginning to extend their work outside the U.S. |
We are committed
to sustaining equity and belonging for all
| · | Training
on cross-cultural management: Nearly
halfway to our goal of having 90% of all people managers complete the training |
| · | Pay
equity, full stop: Four
years ago, we analyzed our salary data and made adjustments to achieve pay equity on the
basis of race and gender. We will continue to focus on maintaining this important measure
of pay equity going forward. Further discussion of our pay equity can be found in our forthcoming
ESG Report. |
We are committed
to driving equity in the community
| · | $10M
to support Black-owned businesses: Uber continued collaborations with EatOkra and Operation
HOPE to support businesses across the United States. Uber Eats hosted events in Atlanta to
support Black-owned restaurants, including a summit in April 2022 gathering owners and staff
to learn and share how to grow their business on- and off-platform. |
Compensation Risk
Assessment
As
part of our annual compensation-related risk review, we conducted an analysis to determine whether any risks arising from compensation
policies and practices are reasonably likely to have a material adverse effect on the Company in light of our overall business, strategy,
and objectives. Management, in concert with the Compensation Committee, reviews and evaluates both cash and equity incentive plans across
executive and non-executive employee populations, as well as other compensation-related policies to which our employees are subject.
The process of
our assessment is two-pronged and evaluates both (i) material enterprise risks related to our business that may be exacerbated by
compensation policies and practices and (ii) the potential risks arising from attributes in our compensation practices, performance
criteria, payout curves and leverage, pay mix, and verification of performance results.
After
reviewing the results of the analysis, the Compensation Committee and management believe our current compensation policies and practices
(i) balance an appropriate risk and reward profile in relation to our overall business strategy and (ii) do not encourage our employees,
including our executive officers, to take excessive or inappropriate risks that would have a material adverse effect on the Company.
Stock Ownership
Guidelines
In
order to align our directors’ and executive officers’ interests with those of our stockholders, we adopted stock ownership
guidelines that became effective upon the closing of our IPO. Within five years of becoming subject to the guidelines, our non-employee
directors are expected to hold Uber stock valued at 10 times their annual cash retainer and our executive officers are expected to hold
Uber stock valued at a multiple of three times (10 times for our CEO) their annual base salaries as of the applicable measurement date.
Our guidelines
also include a stock retention requirement during the phase-in period of our stock ownership guidelines. The retention guidelines provide
that any executive officer who does not satisfy the stock ownership guidelines as of an annual measurement date must thereafter retain
50% of all vested shares acquired by the executive officer pursuant to any equity award (net of shares sold or withheld to pay the applicable
exercise price and/or taxes) until such time as the executive officer satisfies the stock ownership guidelines. Satisfaction of this
requirement is measured as of any subsequent date on which the executive officer wishes to dispose of the acquired shares.
| Other Compensation Matters |
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Prohibition on
Hedging and Pledging Shares
Our insider
trading policy provides that Company employees and directors may not engage in derivative transactions involving the Company’s
securities. Our insider trading policy further prohibits Company employees and directors from hedging or lending Company securities in
any transaction, including by entering into any short sales, swaps, options, puts, calls, forward contracts, or any other similar derivatives
transaction. Finally, we do not let our directors or employees pledge their securities for margin loans or any other speculative transactions.
Clawback Policy
Under our
Clawback Policy, our Board of Directors may seek to recover equity compensation awarded after March 28, 2019, and cash severance and incentive-based
compensation awarded after October 26, 2020, from an executive officer in connection with a material breach by such executive officer
of restrictive covenants in agreements between us and the officer, accounting restatements as a result of material non-compliance with
any financial reporting requirement, or as a result of the officer’s misconduct that harms the business or reputation of the Company.
On October 26, 2022, the SEC adopted final rules implementing the incentive-based compensation recovery provisions of the Dodd-Frank
Act Wall Street Reform and Consumer Protection Act. The final rules direct NYSE to establish listing standards requiring listed companies
to develop and implement a policy providing for the recovery of erroneously awarded incentive-based compensation received by current
or former executive officers and to satisfy related disclosure obligations. NYSE proposed such listing standards on February 22, 2023.
We intend to timely amend our Clawback Policy to reflect these new requirements, when finalized.
Tax and Accounting
Considerations
Deductibility
of executive compensation. Section 162(m) of the Internal Revenue Code of 1986, as amended (Code) denies a publicly- traded
corporation a federal income tax deduction for remuneration in excess of $1 million per year per person paid to executives
designated in Section 162(m) of the Code, including its chief executive officer, chief financial officer, the next three most highly
compensated executive officers included in the Summary Compensation Table of our proxy statement, and certain former executive
officers. The regulations under Section 162(m) provide us, as a newer publicly traded company, transition relief from the $1 million
deduction limitation for compensation paid pursuant to
plans or agreements
that existed during the period prior to our IPO. That exemption may be relied upon until the earliest to occur of (i) the expiration
or material modification of the plan or agreement, (ii) the issuance of all of our stock that has been allocated under the applicable
plan, and (iii) our first stockholders meeting at which directors are elected in the year 2023. As a result, all compensation in excess
of $1 million paid to each covered executive will not be deductible unless the compensation qualifies for the IPO transition relief.
Because of the ambiguities and uncertainties as to the application and interpretation of Section 162(m) of the Code and the regulations
issued thereunder, including the scope of the IPO transition relief, no assurance can be given that compensation intended to satisfy
the transition relief from the Section 162(m) deduction limit will, in fact, satisfy the exception.
Although our Compensation
Committee is mindful of the benefits of tax deductibility when determining executive compensation, the Compensation Committee is also
mindful that the Company has net operating loss carryforwards that will defer the impact of any deductions that the Company might lose
under Section 162(m) for one or more carryforward years, and believes that we should not be constrained by the requirements of Section
162(m) where those requirements would impair our flexibility in attracting and retaining the highest level of talented and experienced
executive officers and in compensating our executive officers in a manner that best promotes our mission and strategic objectives.
Taxation of “parachute”
payments and deferred compensation. Sections 280G and 4999 of the Code provide that executive officers and directors who hold significant
equity interests and certain other service providers may be subject to an excise tax if they receive payments or benefits in connection
with a change in control that exceeds certain prescribed limits, and that the Company, or a successor, may forfeit a deduction on the
amounts subject to this additional tax. Section 409A of the Code also imposes additional significant taxes on the individual in the event
that an executive officer, director, or other service provider receives “deferred compensation” that does not meet the requirements
of Section 409A of the Code. We have not agreed to provide our executive officers, including any NEO, with a “gross-up” or
other reimbursement payment for any tax liability that he or she might owe as a result of the application of Section 4999 or Section
409A of the Code.
Accounting treatment.
The accounting impact of our executive compensation program is one of many factors that are considered in determining the size and
structure of our executive compensation program, so that we can ensure that it is reasonable and in the best interests of our stockholders.
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2023 Proxy Statement |
Compensation
Discussion and Analysis |
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