Wix com : Compensation Policy – Executives

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Compensation Policy - Executives The purpose of the Wix.com Ltd. ("Wix" or the "Company") Compensation Policy - Executives (the "Policy") is to describe Wix's overall compensation strategy for its office holders (as defined in Israel's Companies Law, 5759-1999 (the "Companies Law")) other than non-employee directors (the "Executives"), and to provide guidelines for setting the compensation of its Executives. The Policy is adopted in accordance with the requirements of the Companies Law. This Policy applies to compensation agreements and arrangements with Executives that are adopted after the effective date of this Policy. All compensation arrangements of Executives are to be approved in the manner prescribed by applicable law as in effect at the time the arrangement is entered into. Any relief or exemption from applicable rules governing this Policy that becomes effective after the effective date of this Policy shall be deemed incorporated by reference into this Policy unless determined otherwise by the Compensation Committee of the Board of Directors (the "Compensation Committee"). It is hereby clarified that nothing in this Policy shall be deemed to grant any of the Executives or employees or any third party any right or privilege in connection with their employment by, or engagement with, Wix. Such rights and privileges shall be governed by the respective personal employment or engagement agreements (as applicable). 2. Compensation Committee Independence The Compensation Committee will be composed of at least three members of the Board of Directors and comply with the applicable composition and independence rules of the Companies Law and/or The NASDAQ Stock Market ("NASDAQ") as in effect from time to time. Wix believes that strong, effective leadership is fundamental to its continued growth and success in the future. This requires the ability to attract, retain, reward and motivate highly-skilled Executives, with the competencies needed to excel in a rapidly changing marketplace and to continually motivate their employees. The Policy is intended to align the need to incentivize Executives to succeed in achieving their goals and the need to assure that the compensation structure meets Wix's interests and its overall financial and strategic objectives. The Policy is also designed to offer Executives a compensation package that is competitive with other companies in Wix's industry and jurisdictions of operation. In support of this goal, Wix's executive compensation practices are designed to meet the following objectives: • compete for, attract, retain, reward and motivate highly qualified Executives; • ensure that the interests of the Executives are closely aligned with the interests of Wix's shareholders and emphasize equity pay and long-term incentives so that Executives have an interest in Wix's sustained growth and success; • motivate the Executives to achieve results with integrity and fairness without encouraging excessive risk taking; • support a performance culture that is based on merit, and differentiates and rewards excellent performance, both in the short- and long-term, and recognizes Wix's company values; and • balance rewards for both short-term and long-term results to ensure sustained business performance over time. 4. Factors for Examining Compensation Terms In setting the compensation of an Executive, the Compensation Committee and the Board of Directors shall consider, among other things, the following factors: • the education, qualifications, professional experience, seniority and accomplishments of the Executive; • the Executive's position, responsibilities and prior compensation arrangements; • data of other NASDAQ and NYSE peer companies (including U.S.-based companies), including companies in the industry and/or geographic market, and compensation for comparably situated executives; • the Executive's expected contribution to Wix's future growth, profitability and stability; • the degree of responsibility imposed on the Executive; • the need to retain Executives who have relevant skills, know-how or unique expertise; • accounting and tax considerations and implications; • the relation between the employment terms of the Executive and the average and median salary of Wix's employees and contractors in the geographic market in which the Executive operates, as well as whether such variation would have an effect on employee relations; and • any requirements prescribed by the Companies Law, U.S. securities laws and NASDAQ rules from time to time. The Compensation Committee and Board of Directors may engage compensation advisors and other professionals to assist in formulating compensation packages in line with the Policy, including, without limitation, to assist in preparing, collecting and analyzing applicable wage surveys and other relevant data, framing the appropriate parameters to be considered, and evaluating the different parameters. 5. Compensation Terms of Executives Wix intends to provide fair, competitive and equitable compensation for its Executives by combining several compensation elements. Taking into account the parameters set forth in Item 4 of the Policy, the compensation package of Wix's Executives shall generally combine all or a portion of the following items: • cash bonus (annual or special); • equity-based long-term incentives; • retirement and termination of service arrangements; and • change of control special arrangements. Wix believes that a significant portion of its Executives' compensation should be variable based on Company's results. The value of the variable compensation components (consisting of cash bonuses and equity-based long-term incentives) shall not be less than 40% of an Executive's total compensation package on an annual basis. In setting the compensation of Executives employed by a subsidiary of Wix, references in the Policy to Wix shall also include such subsidiary, to the extent applicable in the relevant context. In the event that the services of the Executive are provided via a personal management company and not by the Executive directly as an employee of Wix, the fees paid to such personal management company (or unincorporated legal person) shall reflect, to the extent determined by Wix in the applicable service agreement, compensation items in accordance with the guidelines of the Policy. Base salary is a fixed, cash component of overall compensation. Base salary ranges are designed to account for varying responsibilities, experience and performance levels. In determining the base salary of each Executive, the Compensation Committee and the Board of Directors shall take into account the factors described in this Policy, including, without limitation, comparative market data and practices of peer companies, compensation for comparably situated executives, alignment of general annual salary increases with general base salary increases across the broader workforce and the overall balance between fixed and variable elements as well as maximum limits. A competitive base salary is essential to Wix's ability to attract and retain highly skilled professionals in the long term, hence Wix will seek to establish a base salary that is competitive with the base salaries paid by peer group companies to comparable executives, while considering, among others, Wix's size, performance and field of operation and the geographical location of the Executive employed, as well as the Executive's personal and professional skills. The base salary is reviewed and may be adjusted periodically based on the variety of factors mentioned in this Policy, including the Executive's performance and the Company's performance. Overview. Executives may be incentivized through an annual bonus program that sets performance targets based on their role and scope. Actual payments may be driven by the business and/or individual performance vis-à-vis the respective performance targets. The performance targets and the maximum annual bonus payable to each Executive shall be reviewed and approved by the Compensation Committee and the Board of Directors, and in the case of Wix's Chief Executive Officer, also by Wix's shareholders in accordance with the requirements of the Companies Law, as applicable. Any annual bonus of the Chief Executive Officer approved after the effective date of this Policy shall be determined annually based on the results of Wix. The formula for calculating the annual bonus shall be approved by the Compensation Committee, the Board of Directors and Wix's shareholders. Without derogation from the authority of the Compensation Committee and the Board of Directors to set the maximum annual bonuses payable to each Executive and the criteria for determining eligibility of such annual bonuses, the Compensation Committee and the Board of Directors shall not have discretion to reduce the amount of the annual bonus payable to Executives following achievement of the bonus criteria. Criteria. A significant portion of the annual bonus, not less than 75%, shall be determined based on measureable criteria. A smaller portion of the annual bonus, not to exceed 25%, may be based on non-measureable criteria subject to any approvals as may be required by law, taking into account the Executive's contribution to Wix. Examples of measurable criteria that will be considered include, without limitation: • financial results (e.g. collections, revenues, pre-tax profits); • number of free or premium users; and • other key performance indicators. Examples of non-measurable criteria that will be considered include, without limitation: • contribution to Wix's business, profitability and stability; • the need to retain an Executive with skills, know-how or unique expertise; • the responsibility imposed on the Executive; • changes that occurred in the responsibility imposed on the Executive during the year; • performance satisfaction, including assessing the degree of involvement of the Executive and devotion of efforts in the performance of his or her duties; • assessment of the Executive's ability to work in coordination and cooperation with other employees; and • the contribution to appropriate control environment and ethical environment. The maximum annual cash bonuses payable to an Executive shall not exceed 24 months' base salary. Special Bonuses. In addition to the annual bonus, the Compensation Committee and the Board of Directors (and the shareholders if required by applicable law) may elect to pay certain Executives special cash bonuses in recognition for their special contribution to key Company developments and activities. The maximum special cash bonus payable to an Executive shall not exceed 12 months' base salary. In determining whether to grant special bonuses to Executives, the Compensation Committee and the Board of Directors shall consider if such special bonuses are justifiable in light of the Company's financial results and performance. Signing Bonus. In the event of hiring a new Executive, the Compensation Committee and the Board of Directors may elect to pay a signing bonus. The maximum cash signing bonus payable to an Executive shall not exceed 12 months' entry base salary. If and where applicable, the Compensation Committee and the Board of Directors shall consider awarding a signing bonus only to provide for the replacement awards that the newly hired Executive forfeited from his or her previous employer, and that such signing bonus will reflect performance, vesting and other conditions equivalent to the forfeited awards. Partial Bonus Payout. Subject to the conditions and limitations of this Item 5.B, an Executive that is employed or provides services to Wix for only a portion of any year may be entitled to receive the pro-rata portion of any bonus described above, based on the portion of the calendar year the Executive was employed or provided services. C. Equity-Based Compensation Overview. The Compensation Committee and the Board of Directors may grant to Executives equity-based compensation in any form permitted under Wix's equity incentive plans, as in effect from time to time (collectively, the "Equity Incentive Plans"), including, without limitation, share options, restricted shares, restricted share units (RSUs) and participation in employee stock purchase programs (ESPP). All grants of equity-based compensation to the Chief Executive Officer (or other Executive of Wix that is a member of Wix's Board of Directors) following the effective date of this Policy shall be approved in the manner prescribed by the Companies Law. Equity Award Terms. The Compensation Committee and the Board of Directors (and the shareholders to the extent prescribed by the Companies Law) shall set the terms of equity award grants to Executives in accordance with the terms of the Equity Incentive Plans, including, without limitation, the exercise price, vesting schedule, term, the period of time for which an award is to remain exercisable and dividend adjustments. Vesting. Al