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DEF 14A 1 a2021def14aproxystatement.htm DEF 14A Document

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934

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YELP INC.

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LETTER TO OUR SHAREHOLDERS

Dear Fellow Yelp Shareholders,

2020 proved to be the most challenging year in our 16-year history for Yelp as well as the local communities and businesses we serve. Yet, despite the significant challenges posed by the COVID-19 pandemic and its economic impact, the Yelp team remained agile and was able to propel our strategy forward, in addition to helping consumers and local businesses adapt to an entirely new economic environment. I am proud of the resilience demonstrated by our management team and employees, who not only navigated a difficult year, but also completed a transformation of our business model that we believe positions us to drive increased shareholder value creation over the long term.

Business Model Transformation. In 2019, we announced an ambitious, multi-year business transformation plan designed to drive and sustain long-term profitable growth. The strategy underlying this plan aimed to increase our value proposition to businesses while also driving growth through the combination of product innovation, marketing and our multi-location business rather than primarily through local sales headcount. In 2020, we executed against this strategy by increasing our pace of product innovation, expanding our customer base among multi-location businesses and aligning how we sell our services with advertiser success. We also increased our operating discipline and further rationalized our cost structure.

Supporting Our Communities. Through the pandemic, Yelp’s mission of connecting consumers with great local businesses remained more relevant than ever. Reviews maintained solid year-over-year growth throughout the year as our users contributed nearly 19 million reviews in 2020. To complement our valuable review content, our product teams rolled out a series of COVID-19-related features that enable local businesses to communicate up-to-date information to their customers, including their health and safety measures. In addition, we supported our customers who were most impacted by the pandemic by providing relief in the form of waived advertising fees, paused advertising campaigns, and free products and services.

In our ongoing endeavor to have a positive impact on the diverse communities of consumers and local businesses we serve, we also used our unique platform to raise awareness. For example, we launched a free searchable attribute allowing businesses to identify themselves as Black-owned, and our community managers have curated local collections to highlight these businesses.

Product Innovation. In addition to new COVID-19 features, we also launched new products in support of our strategic initiatives. We continued tailoring our product experiences, particularly for our services categories, which increased the value of leads delivered to services businesses and helped improve the retention rate of non-term advertisers’ budgets in 2020 by 13% year over year. Within services, revenue from our home and local services category returned to growth in the second half of the year, increasing by a mid-single-digit percentage compared to the same period in the prior year. After making the difficult decision to substantially reduce our local sales force in April 2020, we continued investing in our business-facing products to drive more of our small and medium-sized business revenue through our self-serve channel. Self-serve revenue returned to year-over-year growth in the third quarter as a result, then accelerated to approximately 25% year-over-year growth in the fourth quarter.

Strengthened Governance. We also continued to enhance our corporate governance profile. To support Yelp’s strategy and oversee its execution, we added two accomplished independent directors in 2020: Christine Barone and Tony Wells. Christine and Tony together bring a wealth of experience in operations, marketing, and key business categories. In addition, we implemented a charter amendment providing for a phased declassification of our Board of Directors. Beginning this year, directors will be elected to one-year terms.

Prudent Capital Allocation. As part of our commitment to returning capital to shareholders, we resumed share repurchases in the fourth quarter and repurchased $49 million worth of shares between November and February 9, 2021. We have continued repurchasing shares since then and plan to continue to do so through 2021, subject to market and economic conditions.

Investing for Growth in 2021. 2020 was a transformative year for Yelp. We believe that the positive changes to our business, together with the competitive advantages we have established over the past 16 years, have positioned us well to capitalize on the opportunities ahead as the economy continues to reopen and in the local, digital advertising market generally. Our Board, management team and employees are committed to returning to sustainable revenue growth in 2021, and we plan to make significant investments in our growth initiatives, particularly in the first half of the year. Our key strategic initiatives in 2021 include growing services revenue through improved monetization; accelerating growth through our self-serve and multi-location channels; and delivering more value to advertisers.

On behalf of our Board of Directors and management team, we cordially invite you to attend the 2021 Annual Meeting of Stockholders, which will be conducted by live audio webcast on June 3, 2021 at 9:30 a.m. (Pacific time). Details on how to join the meeting are described in the attached Notice of Annual Meeting of Stockholders and Proxy Statement. We look forward to your participation and, as always, we sincerely appreciate your continued support and interest in Yelp.

Sincerely,

Diane Irvine

Chair, Board of Directors

Yelp Inc.

YELP INC.

140 New Montgomery Street

San Francisco, California 94105

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

To Be Held on June 3, 2021

Dear Stockholder:

You are cordially invited to attend the 2021 Annual Meeting of Stockholders (the “Annual Meeting”) of YELP INC., a Delaware corporation (the “Company”). The Annual Meeting will be held on Thursday, June 3, 2021 at 9:30 a.m. (Pacific time).

As in past years, the Annual Meeting will be a completely virtual meeting of stockholders, which will be conducted via a live audio webcast. You will be able to attend the Annual Meeting, submit your questions and vote online during the meeting by visiting www.virtualshareholdermeeting.com/YELP2021. We continue to believe that hosting a virtual meeting provides expanded access, improved communication and cost savings for our stockholders and the Company.

At the Annual Meeting, stockholders will vote on the following matters:

1.To elect the four nominees for director named in the accompanying proxy statement (the “Proxy Statement”) to hold office until the 2022 Annual Meeting of Stockholders.

2.To ratify the selection by the Audit Committee of the Board of Directors of Deloitte & Touche LLP as the independent registered public accounting firm of the Company for the year ending December 31, 2021.

3.To approve, on an advisory basis, the compensation of the Company’s named executive officers, as disclosed in the Proxy Statement.

4.To consider and vote upon a stockholder proposal to transition to public benefit corporation, if properly presented at the Annual Meeting.

5.To conduct any other business properly brought before the Annual Meeting.

These items of business are more fully described in the Proxy Statement accompanying this Notice. The record date for the Annual Meeting is April 5, 2021. Only stockholders of record at the close of business on that date may vote at the Annual Meeting or at any adjournment thereof.

A complete list of such stockholders will be available for examination by any stockholder for any purpose germane to the Annual Meeting beginning ten days prior to the meeting at our headquarters at 140 New Montgomery Street, San Francisco, California 94105. If you would like to view the list, please contact us to schedule an appointment by calling (415) 908-3801 or emailing ir@yelp.com. In addition, the list will be available for inspection by stockholders on the virtual meeting website during the meeting.

We look forward to your attendance at our Annual Meeting.

By Order of the Board of Directors

Laurence Wilson

Corporate Secretary

San Francisco, California

April 23, 2021


You are cordially invited to attend and participate in the Annual Meeting, which will be held virtually via the Internet. Whether or not you expect to attend the Annual Meeting, please vote over the telephone or Internet, or, if you receive a paper proxy card by mail, by completing and returning the proxy card mailed to you, as promptly as possible in order to ensure your representation at the Annual Meeting. Voting instructions are provided in the Notice of Internet Availability of Proxy Materials, or, if you receive a paper proxy card by mail, the instructions are printed on your proxy card and included in the accompanying Proxy Statement. Even if you have voted by proxy, you may still vote your shares if you attend the Annual Meeting. Please note, however, that if your shares are held of record by a broker, bank or other nominee and you wish to vote at the Annual Meeting, you may need to obtain a legal proxy issued in your name from that record holder. Please contact your broker, bank or other nominee for information about specific requirements if you would like to vote your shares during the Annual Meeting.

Important Notice Regarding the Availability of Proxy Materials for the Stockholders’ Meeting to Be Held on June 3, 2021 via a live audio webcast at www.virtualshareholdermeeting.com/YELP2021 at 9:30 a.m. Pacific time.

The Proxy Statement and Annual Report are available at www.proxyvote.com.

PROXY STATEMENT

FOR THE 2021 ANNUAL MEETING OF STOCKHOLDERS

TABLE OF CONTENTS


			Page
ABOUT THE ANNUAL MEETING			1
PROPOSAL NO. 1 – ELECTION OF DIRECTORS			4
Board Composition			5
Required Vote and Board Recommendation			13
INFORMATION REGARDING THE BOARD OF DIRECTORS AND CORPORATE GOVERNANCE			14
Corporate Governance			14
Independence of the Board			15
Board Leadership Structure			15
Meetings of the Board			15
Information Regarding Committees of the Board			16
Board and Committee Performance Evaluations			19
Stockholder Engagement			19
Impact at Yelp			20
Oversight Roles of the Board			21
Oversight of Strategy			21
Oversight of Risk			21
Management Succession Planning			22
Director Compensation			23
PROPOSAL NO. 2 – RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED ACCOUNTING FIRM			26
PROPOSAL NO. 3 – ADVISORY VOTE ON EXECUTIVE COMPENSATION			28
PROPOSAL NO. 4 — STOCKHOLDER PROPOSAL TO TRANSITION TO PUBLIC BENEFIT CORPORATION			30
EXECUTIVE OFFICERS			36


			Page
EXECUTIVE COMPENSATION			38
Compensation Discussion and Analysis			38
Compensation Committee Report			63
Compensation Risk Assessment			63
Summary Compensation Table			65
Compensation Plans and Arrangements			67
Grants of Plan-Based Awards			72
Outstanding Equity Awards at Fiscal Year End			74
Option Exercises and Stock Vested			77
Potential Payments Upon Termination or Change in Control			78
CEO Pay Ratio Disclosure			80
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT			81
DELINQUENT SECTION 16(A) REPORTS			84
EQUITY COMPENSATION PLAN INFORMATION			84
TRANSACTIONS WITH RELATED PERSONS			85
Related-Person Transactions Policy and Procedures			85
Certain Related-Person Transactions			85
PROCEDURAL MATTERS			87
OTHER MATTERS			92
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS			92
APPENDIX A			93
FORM OF PROXY CARD			95

This Proxy Statement contains “forward-looking” statements regarding Yelp’s current expectations within the meaning of the applicable securities laws and regulations. These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations. These risks and uncertainties include, but are not limited to, the risks detailed in our filings with the U.S. Securities and Exchange Commission, including the “Risk Factors” section of our most recent Annual Report on Form 10-K or Quarterly Report on Form 10-Q. We assume no obligation to update any of these forward-looking statements. Web links and references to our website throughout this document are provided for convenience only, and the content of the referenced websites does not constitute part of this Proxy Statement.

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ABOUT THE ANNUAL MEETING

Why am I receiving these materials?

We are providing you with these proxy materials because the Board of Directors of Yelp Inc. (the “Board”) is soliciting your proxy to vote at Yelp’s 2021 Annual Meeting of Stockholders (the “Annual Meeting”), including at any adjournments or postponements thereof. As used in this Proxy Statement, references to “we,” “us,” “our,” “Yelp” and the “Company” refer to Yelp Inc. and its consolidated subsidiaries.

You are invited to attend the Annual Meeting to vote on the proposals described in this Proxy Statement. However, you do not need to attend the Annual Meeting to vote your shares. Instead, you may simply follow the instructions below to submit your proxy. The proxy materials, including this Proxy Statement and our Annual Report on Form 10-K for the year ended December 31, 2020 (the “Annual Report”), are being distributed and made available on or about April 23, 2021.

When and where will the Annual Meeting take place?

The Annual Meeting will be held via a live audio webcast on Thursday, June 3, 2021 at 9:30 a.m. Pacific time. The Annual Meeting can be accessed by visiting www.virtualshareholdermeeting.com/YELP2021, where you will be able to listen to the meeting live, submit questions and vote online.

Why did I receive a notice regarding the availability of proxy materials on the Internet instead of a full set of proxy materials?

Pursuant to rules adopted by the U.S. Securities and Exchange Commission (the “SEC”), we have elected to provide access to our proxy materials over the Internet. This approach conserves natural resources and reduces our printing and distribution costs, while providing a timely and convenient method of accessing the materials and voting.

As a result, our stockholders generally will not receive paper copies of our proxy materials unless they request them. We will instead send a Notice of Internet Availability of Proxy Materials (“Notice”) to our stockholders of record with instructions for accessing the proxy materials and voting online or by telephone. All stockholders will have the ability to access the proxy materials on the website referred to in the Notice or request to have a printed set of the proxy materials. Instructions on how to access the proxy materials online or to request a printed copy may be found in the Notice.

We intend to mail the Notice on or about April 23, 2021 to all stockholders of record entitled to vote at the Annual Meeting.

How many votes do I have?

On each matter to be voted on, you have one vote for each share of common stock you owned as of April 5, 2021 (the “Record Date”).

What am I voting on?

There are four matters scheduled for a vote:

•Proposal No. 1: the election of the four nominees for director named in this Proxy Statement;

•Proposal No. 2: the ratification of the selection by the Audit Committee of the Board of Deloitte & Touche LLP as our independent registered public accounting firm for the year ending December 31, 2021;

Table of Contents

•Proposal No. 3: the approval, on an advisory basis, of the compensation of our named executive officers, as disclosed in this Proxy Statement in accordance with SEC rules; and

•Proposal No. 4: stockholder proposal to transition to public benefit corporation.

We will also transact any other business that may properly come before the meeting, although we are not aware of any such business as of the date of this Proxy Statement.

What are the Board’s voting recommendations?

The Board recommends that you vote your shares as follows:

•FOR the election of the four nominees for director named in this Proxy Statement;

•FOR ratification of the selection by the Audit Committee of the Board of Deloitte & Touche LLP as our independent registered public accounting firm for the year ending December 31, 2021;

•FOR the advisory approval of executive compensation; and

•AGAINST the stockholder proposal to transition to public benefit corporation.

How do I vote in advance of the Annual Meeting?

Whether or not you plan to attend the Annual Meeting, we urge you to vote by proxy to ensure your vote is counted. You may still attend and vote at the Annual Meeting even if you have already voted by proxy.

If you are a stockholder of record, you may vote in any of the following ways:

Internet

Phone

Mail

Visit www.proxyvote.com to complete an electronic proxy card. You will be asked to provide the control number from your Notice.

Dial toll-free 1-800-690-6903 using a touch-tone phone and follow the recorded instructions. You will be asked to provide the control number from the Notice.

Complete, sign and date the proxy card and return it promptly in the envelope provided (if you requested a paper copy of the proxy materials or we elect to deliver a proxy card at a later time).

Your vote must be received by 11:59 p.m. Eastern time on June 2, 2021 to be counted.

If you return your signed proxy card to us before the Annual Meeting, we will vote your shares as you instruct.

If you are a stockholder who holds shares through a brokerage firm, bank, trust or other similar organization (that is, in “street name”), you should have received a notice containing voting instructions from that organization rather than from us. Simply follow the voting instructions in that notice to ensure that your vote is counted.


We are holding the Annual Meeting online and providing Internet voting to provide expanded access and to allow you to vote your shares online, with procedures designed to ensure the authenticity and correctness of your voting instructions. However, please be aware that you must bear any costs associated with your Internet access, such as usage charges from Internet access providers and telephone companies.

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How do I attend and participate in the Annual Meeting?

This year’s Annual Meeting will be held entirely online via audio webcast to allow greater participation. You may attend and vote at the Annual Meeting by logging in to www.virtualshareholdermeeting.com/YELP2021 and following the instructions provided. You will be asked to provide your 16-digit control number.

Stockholders may submit questions live during the meeting through our Annual Meeting website, where they will also have access to copies of this Proxy Statement and the Annual Report. During the meeting, we will answer as many questions as time permits.

We encourage you to access the meeting prior to the start time. Please allow ample time for online check-in, which will begin at 9:15 a.m. Pacific time. If you have technical difficulties during check-in or during the Annual Meeting, please call the technical support number that will be posted on www.virtualshareholdermeeting.com/YELP2021 for assistance.

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PROPOSAL NO. 1

ELECTION OF DIRECTORS

Our business is managed under the direction of our Board, which is presently composed of nine directors. All of our directors other than our Chief Executive Officer, Jeremy Stoppelman, are independent within the meaning of the listing standards of the New York Stock Exchange (“NYSE”).

Our Board is currently divided into three classes of directors with staggered three-year terms. In 2020, however, our Board and stockholders approved an amendment to our Amended and Restated Certificate of Incorporation to implement a phased declassification of our Board (the “Declassification Amendment”). Under the terms of the Declassification Amendment, directors will stand for election to one-year terms after the expiration of their respective current terms, with the result that the entire Board will be elected on an annual basis at the 2023 Annual Meeting of Stockholders and at each annual meeting thereafter.

There are four directors in the class whose term of office expires in 2021. If elected at the Annual Meeting, each of these nominees would serve until the 2022 Annual Meeting of Stockholders and until his successor has been duly elected and qualified, or, if sooner, until the director’s death, resignation or removal.

The following table sets forth the names, ages and certain other information with respect to our directors, including the four nominees for election at the Annual Meeting, as of April 5, 2021:

Name

Age

Director Since

Independent

Audit Committee

Compensation Committee

Nominating Committee

Class III Directors – Nominees for Election at the Annual Meeting

Robert Gibbs

May 2012

George Hu

March 2019

Jeremy Stoppelman

September 2005

Tony Wells

October 2020

Class I Directors – Continuing in Office until the 2022 Annual Meeting

Fred D. Anderson, Jr.

February 2011

l«

Sharon Rothstein

March 2019

Brian Sharples

March 2019

Class II Directors – Continuing in Office until the 2023 Annual Meeting

Diane Irvine

November 2011

µ«

Christine Barone

March 2020

Legend: µ Committee Chairperson | l Committee Member | « Audit Committee Financial Expert

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Board Composition

The Nominating and Corporate Governance Committee of the Board (the “Nominating Committee”) seeks to assemble a Board that, as a whole, possesses the appropriate balance of professional and industry knowledge, financial expertise and high-level management experience necessary to oversee and direct our business. To that end, the Nominating Committee has identified and evaluated the nominees for election at the Annual Meeting in the broader context of the Board’s overall composition, with the goal of selecting nominees who complement and strengthen the skills of other members of the Board and who also exhibit integrity, collegiality, sound business judgment and other qualities that the Nominating Committee views as critical to the effective functioning of the Board, as described in greater detail below.

Considerations in Evaluating Director Nominees

The Nominating Committee believes that candidates for director should have certain minimum qualifications, including being able to read and understand basic financial statements, being over 21 years of age and having the highest personal integrity and ethics. The Nominating Committee also considers such factors as possessing relevant expertise on which to be able to offer advice and guidance to management, having sufficient time to devote to the affairs of the Company, demonstrated excellence in his or her field, having the ability to exercise sound business judgment and having the commitment to rigorously represent the long-term interests of our stockholders. However, the Nominating Committee retains the right to modify these qualifications from time to time. Candidates for director are reviewed in the context of the current composition of the Board, the operating requirements of the Company and the long-term interests of the stockholders.

In conducting this assessment, the Nominating Committee typically considers diversity, age, skills and such other factors as it deems appropriate given the current needs of the Board and the Company, to maintain a balance of knowledge, experience and capability. The Nominating Committee does not have a formal policy with respect to diversity; however, the Board and the Nominating Committee believe that it is essential that the Board members represent diverse viewpoints. Accordingly, the Nominating Committee may consider such factors as diversity of gender, race, professional experience, and differences in viewpoints and skills.

In the case of incumbent directors whose terms of office are set to expire, the Nominating Committee reviews such directors’ overall service to the Company during their term, including the number of meetings attended, level of participation, quality of performance and any other relationships and transactions that might impair such directors’ independence. In the case of new director candidates, the Nominating Committee also determines whether the nominee is independent for NYSE purposes, which determination is based upon NYSE listing standards, applicable SEC rules and regulations and the advice of counsel, if necessary. The Nominating Committee meets to discuss and consider candidates’ qualifications and then selects nominee(s) for recommendation to the Board by majority vote.

To identify candidates for Board membership, the Nominating Committee uses its network of contacts to compile a list of potential candidates, but may also engage, if it deems appropriate, a professional search firm. For example, the Nominating Committee engaged Spencer Stuart, a nationally recognized director search firm, to assist with its review of our Board composition in 2018 and again in 2020, as described below. The Nominating Committee also conducts any appropriate and necessary inquiries into the backgrounds and qualifications of possible candidates after considering the function and needs of the Board.

At this time, the Nominating Committee does not have a policy with regard to the consideration of director candidates recommended by stockholders and will evaluate such candidates on a case-by-case basis. The Nominating Committee believes that it is in the best position to identify, review, evaluate and select qualified candidates for Board membership, based on the comprehensive criteria for Board membership approved by the Board.

SEC Form DEF 14A filed by Yelp Inc.