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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant ☒
Filed by a Party other than the Registrant 
Check the appropriate box:
 Preliminary Proxy Statement
Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
☒ Definitive Proxy Statement
 Definitive Additional Materials
 Soliciting Material under §240.14a-12
SNAP ONE HOLDINGS CORP.
(Name of Registrant as Specified In Its Charter)
N/A
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check all boxes that apply):
☒ No fee required.
 Fee paid previously with preliminary materials.
 Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11.

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April 9, 2024
Dear Fellow Snap One Stockholder:
Thank you for your continued interest in Snap One. I am pleased to invite you to attend the Company’s 2024 Annual Meeting of Stockholders (“Annual Meeting”) to be held on Thursday, May 23, 2024 at 5:00 p.m. Mountain Time at Snap One’s corporate offices located at 1355 W. Innovation Way, Suite 125, Lehi, UT 84043.
At this year’s Annual Meeting, our stockholders will be asked to:
1)
elect the two nominees for Class III directors who are named in the Proxy Statement;
2)
ratify the appointment of Deloitte & Touche, LLP as our independent registered public accounting firm for the fiscal year ending December 27, 2024; and
3)
transact any other business that properly comes before the Annual Meeting (including adjournments and postponements thereof).
If you owned our common stock at the close of business on March 26, 2024, you may attend and vote at the Annual Meeting.
Our Board of Directors recommends that you vote “FOR” proposals 1 and 2 listed above. I recommend that you read the accompanying Proxy Statement, which contains detailed information concerning each of these proposals.
Your vote is important. Whether or not you plan to attend the Annual Meeting, I hope you will vote as soon as possible. You may vote via a toll-free telephone number, over the Internet or in person at the Annual Meeting or, if you receive your proxy materials by U.S. mail, you also may vote by mailing a proxy card. Please review the instructions on the notice or on the proxy card regarding your voting options.
Thank you for your ongoing support of Snap One. We look forward to seeing you at our Annual Meeting.
Sincerely,

John Heyman
Chief Executive Officer

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Notice of Our 2024 Annual Meeting of Stockholders
To Our Stockholders:
Please join us at our Annual Meeting.
When:
5:00 p.m., Mountain Time, on May 23, 2024
Where:
1355 W. Innovation Way, Suite 125, Lehi, UT 84043
What:
Items of Business
 
1
The election of the two Class III director nominees listed in this Proxy Statement;
 
2
The ratification of the appointment of Deloitte & Touche, LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 27, 2024; and
 
3
Such other business as may properly come before the Annual Meeting or any postponement or adjournment thereof.
Record Date:
Close of business March 26, 2024
Please Vote:




 
Via the Internet
Go to www.proxyvote.com
By Telephone
To vote by telephone, call 1-800-690-6903
By Mail
Send completed and signed proxy card or voter instruction form to the address on your proxy card or voter instruction form
In Person
Attend the Annual Meeting at 5:00 p.m. Mountain Time,
May 23, 2024 at Company headquarters in Lehi, UT
Advance Voting Deadlines: If you are a stockholder of record and are voting by proxy, your vote must be received by 11:59 p.m. (Eastern Time) on May 22, 2024, to be counted. Please note that if you hold your shares through a brokerage account or through a bank or another nominee, they may have an earlier deadline. Please refer to the voting instructions you received from such broker, bank, or other record holder.
To ensure your shares are voted, please vote your shares prior to the meeting by proxy on the Internet, by telephone or by completing a proxy card and returning it by mail, even if you plan to attend in person. Only stockholders who own shares of Snap One Holdings Corp. common stock as of the Record Date are entitled to attend and vote at the Annual Meeting. If you plan to attend, proof of stock ownership and government-issued photo ID will be required for admission; if your shares are not registered in your name, please bring evidence that you were the beneficial owner of shares as of the Record Date, which you may obtain from your bank, stockbroker, or other adviser that holds your common stock.

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We intend to hold the Annual Meeting in person at our Lehi, Utah headquarters as noted above. However, if we determine that is not possible or advisable, we will announce our change of plan as promptly as practicable in a press release, file the details with the Securities and Exchange Commission as proxy materials, and post them on our website. Thank you for your ongoing support of and continued interest in Snap One. We look forward to seeing you at our Annual Meeting.
By Order of the Board of Directors,

JD Ellis
Chief Legal Officer
April 9, 2024

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Important Notice Regarding Availability of Proxy Materials for the Annual Meeting on May 23, 2024:
This notice of Annual Meeting, and the accompanying proxy statement (“Proxy Statement”), and form of electronic proxy card, as well as the annual report on Form 10-K for the fiscal year ended December 29, 2023 (“2023 Annual Report,” collectively, “Proxy Materials”), are first being distributed or made available, as the case may be, on or about April 9, 2024. Registered and beneficial shareholders may visit www.proxyvote.com to view and print these documents. The Proxy Statement and 2023 Annual Report may also be found in the Investor Relations section of the Company’s website at www.snapone.com under SEC Filings.

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Proxy Summary
This summary highlights information contained elsewhere in this Proxy Statement. For more information, please read our 2023 Annual Report and the entire Proxy Statement prior to voting.
About Us
Snap One powers smart living by enabling professional integrators to deliver seamless experiences in the connected homes and businesses where people live, work, and play. We offer a number of trusted brands encompassing technology categories like audio, video, surveillance, control, networking, conferencing, and remote management.
We bring together the best people, partners, and products to make lives more enjoyable, connected, and secure.
Our Journey
Created out of respect and passion for smart technology, Snap One was founded by technology integrators who saw a better way to do things. These major milestones took us from a scrappy startup to an industry leader.

Snap One Holdings Corp.  2024 Proxy Statement
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About the Meeting

When:
5:00 p.m., Mountain Time,
on May 23, 2024


Where:
1355 W. Innovation Way, Suite 125, Lehi,
UT 84043

Record Date:
March 26, 2024
Items of Business:
Board Recommendation
Voting Standard
Page
1
The election of each of two Class III Director nominees, namely Mr. Jacob Best and Ms. Amy Steel Vanden-Eykel to the Company’s Board of Directors.
FOR each director
nominee
A plurality of the votes cast (the two nominees receiving the highest number of “FOR” votes cast will be elected). Abstention has no impact.
5
2
A proposal to ratify the appointment of Deloitte & Touche, LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 27, 2024.
FOR
Majority: Votes cast in favor exceed votes cast against. Abstention is the same as a vote “against.”
3
The transaction of any other business as may properly come before the Annual Meeting or any adjournment or postponement thereof.
 
 
Please Vote
Whether or not you plan to attend the Annual Meeting, we encourage you to vote your shares as soon as possible using one of the following early voting methods:






Internet
Visit the web site listed on your proxy card
Phone
Call the telephone number on your proxy card
Mail
If you received a paper copy of the materials via mail, please sign, date, and return your proxy card in the enclosed envelope
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Our Board Nominees at a Glance
Director Name, age
Principal
Occupation
Independent
Committees
Other Public Company
Boards
Jacob Best, 39
Partner, Hellman & Friedman, LLC

Chairperson of Compensation and Risk Management Committee
 
Amy Steel Vanden-Eykel, 46
Chief Marketing Officer, Staples, Inc.

Nominating & Governance Committee
 
Snap One Holdings Corp.  2024 Proxy Statement
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Governance
Board of Directors
The business and affairs of Snap One Holdings Corp. (“Company,” “Snap One,” or “we”/”us”) are managed under the direction of our eight-member Board of Directors (“Board”) in accordance with our certificate of incorporation (“Certificate of Incorporation”), amended and restated bylaws (“Bylaws”) and the Corporate Governance Guidelines, a copy of which can be found on our website at investors.snapone.com. Our Board is divided into three classes of directors, with the directors serving staggered three-year terms, with only one class of directors elected at each annual meeting. Our Class I directors are Messrs. Ragatz (Chair), Heyman, and Hendrickson (with their terms expiring at the 2025 annual meeting), our Class II directors are Dr. Neal and Messrs. Wagers and Sanchez (with their terms expiring at the 2026 annual meeting) and our Class III directors are Mr. Best and Ms. Vanden-Eykel (with their terms expiring at the 2024 Annual Meeting).
We believe our Board’s classified structure provides enhanced continuity and stability in business strategies and policies. Under the current system, after each election, at least two-thirds of the Board will have had prior experience and familiarity with our business, which is beneficial for long-term strategic planning and oversight of our operations. We believe that maintaining a classified board structure balances the need for stockholders to express their opinion on the Board’s performance with the need for our directors to focus on our long-term success and maximize value for stockholders.
When considering whether directors and nominees have the experience, qualifications, attributes, or skills, taken as a whole, to enable our Board to satisfy its oversight responsibilities effectively in light of our business and structure, the Board focuses primarily on each person’s background and experience as reflected in each of the directors’ individual biographies below. We have not formally established any specific, minimum qualifications that must be met or skills that are necessary for directors to possess, but in identifying and evaluating director nominees, the Board considers educational background, diversity of professional experience, knowledge of our business, integrity, professional reputation, independence, wisdom, and the ability to represent the best interests of our stockholders. We believe our directors provide an appropriate mix of experience and skills relevant to the size and nature of our business.
There are no family relationships among our directors and director nominees, or between our directors, director nominees, and executive officers.
At the Annual Meeting, stockholders will be asked to vote for two Class III nominees: Jacob Best and Amy Steel Vanden-Eykel to serve until the 2027 annual meeting, and the election and qualification of his or her successor, or until such director’s earlier death, disqualification, resignation, or removal. The only members of our Board of Directors with expiring terms are the two Class III directors, and therefore proxies can only be voted for up to a maximum of two people. Each of the nominees listed below has agreed to stand for election and has indicated he or she is willing to serve as a member of the Board. If any nominee for any reason is unable to serve or will not serve, the proxies may be voted for such substitute nominee as the proxy holder may determine.
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Class III directors whose terms expire at the 2024 Annual Meeting:

Jacob Best
Director Since: 2017
Age: 39
Committees: Compensation (Chair)
Independent Director
Jacob Best has served as a member of our Board of Directors since August 2017. He is a Partner at Hellman & Friedman (“H&F”), a private equity firm that is a significant investor in the Company, where he joined in 2009 and rejoined in 2016. Prior to rejoining H&F, Mr. Best worked as the Chief of Staff at Change Healthcare (formerly Emdeon), a healthcare technology business, in 2013; and the Head of Medical Networks at Grand Rounds, a provider of tech-enabled interaction platforms to doctors and patients, from 2014 to 2016. Mr. Best previously worked at Bain & Company in New York. Mr. Best currently serves as a director of Medline, a manufacturer and distributor of medical surgical equipment, and is actively engaged in H&F’s investments in PointClickCare and Athenahealth. He was formerly a director of Associated Materials, a manufacturer and distributor of external building materials, from 2016 to 2020; Goodman Global, a manufacturer and distributor of HVAC equipment, in 2012; and Ellucian, a provider of software to higher education institutions, in 2012. Mr. Best received a BA in Human Biology from the University of Virginia, and an MBA from the Stanford Graduate School of Business where he was an Arjay Miller Scholar.

We believe Mr. Best is qualified to serve as a director based on his experience as an executive and investor, and knowledge of the industry in which we operate.

Amy Steel
Vanden-Eykel
Director Since: 2021
Age: 46
Committees: Nominating and Corporate Governance
Independent Director
Amy Steel Vanden-Eykel has served as a member of our Board of Directors since July 2021. Ms. Vanden-Eykel is the Chief Marketing Officer for Staples, Inc., which includes Staples.com, Staples Advantage, and Staples’ B2B business. She has held this role since November of 2021 and is responsible for Brand & Creative Strategy, Customer Acquisition & Development, the Loyalty Program, and Marketing activation channels like Digital Media, Field Marketing, Email, and Direct Mail. Prior to her role as CMO, Ms. Vanden-Eykel was the Senior Vice President of Merchandising & Marketing for Staples, Inc. In addition, she spent almost a decade in positions of increasing seniority in Merchandising for Staples.com, StaplesAdvantage.com, and Staples’ Retail. Ms. Vanden-Eykel started her career with Staples 14 years ago in Corporate Strategy. Before joining Staples, she was a Vice President at the strategy consulting firm Kaiser Associates. She received her undergraduate degree from Bowdoin College, where she majored in Economics and Mathematics, and received her MBA, graduating with honors, from Harvard Business School.

We believe that Ms. Vanden-Eykel is qualified to serve as a director based on her perspective and experience as an executive and her deep knowledge and experience of marketing programs, operations, and strategy.
Snap One Holdings Corp.  2024 Proxy Statement
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Class I Directors whose terms expire at the 2025 annual meeting:

Thomas (“Tom”)
Hendrickson
Director Since: 2022
Age: 69
Committees: Audit and Risk Management (Chair)
Independent Director
Mr. Hendrickson joined our Board of Directors in 2022 and serves as Chairperson of the Audit and Risk Management Committee. Mr. Hendrickson has served as a director and audit committee chairperson for Ollies Bargain Outlet Holdings, Inc. since March 2015; director for O’Reilly Auto Parts since 2010, lead independent director since January 2024, and chairperson of the audit committee since 2018; Chief Administrative Officer, Chief Financial Officer and Treasurer for The Sports Authority, Inc., the parent of the retailer Sports Authority, from 2003 until his retirement in February of 2014; Executive Vice President and Chief Financial Officer, and Treasurer of Gart Sports Company, from 1998 until its merger with Sports Authority in 2003; and Vice President of Finance, Senior Vice President, and Executive Vice President and Chief Financial Officer of Sportmart, Inc., from 1993 to 1997. Mr. Hendrickson received a BS in Accounting from Minnesota State University, Mankato.

We believe Mr. Hendrickson is qualified to serve as a director based on his extensive business and accounting experience.

John Heyman
Director Since: 2015
Age: 62
Committees: None
CEO of Snap One (not an Independent Director)
John Heyman has served as our Chief Executive Officer and a member of our Board of Directors since January 2015. Since February 2023, he has also been a member of the board of directors of ON Services, a privately held live-event production services company. He has worked in the technology industry for over 30 years, including 16 years (most recently as Chief Executive Officer) at Radiant Systems, Inc., a publicly traded provider of technology to the hospitality and retail industries, from 1995 until its sale to NCR Corporation in 2011. From 2011 until joining Snap One, Mr. Heyman founded Actuate Partners, a private investment firm, and served as Executive Chairperson of Influence Health, a technology provider to the healthcare industry. Mr. Heyman served as a director and a member of the audit committee of Manhattan Associates, Inc., a publicly traded provider of software to manage supply chains, inventory and omnichannel operations, from 2016 to 2019. He received a BBA in Accounting and Finance from the University of Georgia, and an MBA from Harvard Business School.

We believe Mr. Heyman is qualified to serve as a director based on the perspective and experience he brings as our Chief Executive Officer and his experience as an executive in the technology industry.
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Erik Ragatz, Chair
Director Since: 2017
Age: 51
Committees: Compensation, Nominating and Corporate Governance (Chair)
Independent Director
Erik D. Ragatz has served as a director and as Chairperson of our Board of Directors since June 2017. Mr. Ragatz served as a Partner at H&F from 2008 to 2022, and in February 2023, Mr. Ragatz retired as Partner and became a Senior Advisor at H&F. Mr. Ragatz currently serves as the Executive Chairman and a member of the compensation committee of H&F portfolio company At Home Group Inc., a leading omnichannel home décor value retailer. In addition, he serves as the Lead Independent Director of the board of directors and as a member of the compensation and nominating and governance committees of Grocery Outlet Holdings Corp., a publicly traded extreme-value retailer of consumables and fresh products sold through a network of independently operated stores; Chairman of The New Leaf Company (BV) (dba Superplum), an early-stage Indian agri-tech business; and director of And Go Concepts, LLC (dba Salad and Go), a disruptive quick-service restaurant business on a mission to make fresh, nutritious food convenient and affordable for all. He was formerly chairperson of the board of directors of Grocery Outlet, Goodman Global, Associated Materials, and ABRA; and a director of Caliber Collision, LPL, Sheridan, and Texas Genco. Prior to H&F, Mr. Ragatz was employed by Bain Capital in Boston and Sydney, and previously worked as a management consultant for Bain & Company in San Francisco. Mr. Ragatz received an AB in Economics from Stanford University and an MBA from the Stanford Graduate School of Business.

We believe Mr. Ragatz is qualified to serve as a director based on his significant financial expertise and insight into the proper functioning and role of corporate boards of directors gained through his years of service on the boards of directors of H&F’s portfolio companies.
Snap One Holdings Corp.  2024 Proxy Statement
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Class II Directors Standing for Election at the 2026 annual meeting:

Annmarie Neal
Director Since: 2021
Age: 60
Committees: Compensation, Nominating and Corporate Governance
Independent Director
Annmarie Neal has served as a member of our Board of Directors since January 2021. Dr. Neal is a Partner and Chief Talent Officer at H&F, where she has worked since 2015. Her primary responsibility is to help H&F drive value by improving the organizational and leadership effectiveness of H&F’s portfolio companies. Dr. Neal has over 20 years of experience working with global organizations on executive leadership, talent management, and organizational development. Prior to joining H&F, Dr. Neal ran her own consulting firm and held the Chief Talent Officer roles at Cisco Systems from 2006 to 2012, and at First Data Corporation from 2000 to 2005. Additionally, she was a senior consultant with RHR International. Dr. Neal received a BA from Boston College, an MA in Counseling from Santa Clara University, a Graduate Certificate of Special Studies from Harvard University, and a Doctorate in Clinical Psychology with an Emphasis in Management Psychology from the California School of Professional Psychology Alameda/Berkeley.

We believe Dr. Neal is qualified to serve as a director based on her experience as an executive and her deep knowledge and expertise in succession planning, compensation, organization effectiveness, and human resource operations.
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Adalio Sanchez
Director Since: 2021
Age: 64
Committees: Audit and Risk Management, Compensation
Independent Director
Adalio Sanchez has served as a member of our Board of Directors since June 2021. Mr. Sanchez is an information technology industry veteran with a twenty-five-year track record of operating, transforming, and profitably growing many complex multibillion-dollar global businesses. Mr. Sanchez is the chairperson of the board of directors of ACI Worldwide Inc., a software company serving the electronics payments market, and has served as a member of ACI’s board since 2015. Since 2019, Mr. Sanchez has served on the board of Avnet Inc., a global electronic components distribution and technology solutions company; and since 2021, has served on the supervisory board of ASM International N.V., a Dutch semiconductor wafer manufacturing process equipment company. He also serves on the board of trustees of the MITRE Corporation, a not-for-profit firm that manages federally funded research and development centers supporting several U.S. government agencies since November 2018. Mr. Sanchez previously served on the board of Quantum Corporation, a computer storage solutions company, from May 2017 to April 2019, and served as interim CEO for Quantum Corporation from November 2017 to January 2018. From 2014 to 2015, Mr. Sanchez served as Senior Vice President of the Lenovo Group Limited, an international technology company. Prior to that, he spent 32 years at IBM Corporation, a global technology and innovation company, where he served in various capacities including 16 years in senior executive and global general management roles. Mr. Sanchez received his BS from the University of Miami in electrical engineering, and his MBA from Florida International University.

We believe Mr. Sanchez is qualified to serve as a director based on his technology background and experience as an executive and director of public companies.
Snap One Holdings Corp.  2024 Proxy Statement
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Kenneth R.
Wagers III
Director Since: 2020
Age: 52
Committees: Audit and Risk Management
Independent Director
Kenneth R. Wagers III has served as a member of our Board of Directors since August 2020. Mr. Wagers has more than 25 years of experience in financial and accounting management, operations, and engineering. Mr. Wagers has served as Chief Financial Officer of TTEC Holdings, Inc., a customer service technology company since February 2024. He previously served as Chief Financial Officer of Flexport, a global logistics and freight forwarding business, from April 2021 to October 2023. Prior to joining Flexport, Mr. Wagers served as Chief Financial Officer of FleetPride, a retailer of parts for heavy-duty trucks and trailers, from August 2019 to April 2021. Prior to joining FleetPride, Mr. Wagers served as Chief Operating Officer of XPO Logistics, a global provider of supply chain solutions, from April 2018 to March 2019. Prior to that, Mr. Wagers served as the Head of Finance for Worldwide Transportation and Logistics at Amazon.com from 2013 to April 2018, and as Chief Financial Officer of LinkAmerica, a private equity-owned logistics and transportation business, from 2012 to 2013. Mr. Wagers also held multiple senior-level finance and accounting roles at Dr. Pepper Snapple Group and UPS after beginning his career in UPS’ operations and engineering department. Mr. Wagers received his BA in Finance and Accounting, and then his MBA from Georgia State University.

We believe Mr. Wagers is qualified to serve as a director based on his perspective and experience as a Chief Financial Officer and deep financial and accounting knowledge.
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Controlled Company
H&F, through certain of its affiliates, beneficially owns more than 50% of our common stock and voting power. Pursuant to provisions our Bylaws and our Stockholders Agreement (as defined below and further described in the section entitled “Related Party Agreements and Transactions – Arrangements with Our Directors, Executive Officers, and Advisors– Stockholders Agreement”), H&F and its affiliated entities are entitled to nominate at least a majority of the total number of directors comprising our Board. As a result, we are a “controlled company” as that term is set forth in Section 5615(c)(1) of The Nasdaq Stock Market (“Nasdaq”) rules.
Under the Nasdaq corporate governance standards, a company of which more than 50% of the voting power is held by an individual, group, or another company is a “controlled company” and may elect not to comply with certain corporate governance standards, including (1) the requirement that a majority of the board of directors consist of independent directors, (2) the requirement that we have a compensation committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities, and (3) the requirement that our director nominations be made, or recommended to our full Board, by our independent directors or by a nominations committee that consists entirely of independent directors, and that we adopt a written charter or board resolution addressing the nominations process. While we have the right to do so, we do not currently utilize any of these exemptions to the independence requirements imposed by the Nasdaq rules.
Nomination Rights
The Company is a party to a Stockholders Agreement with H&F and certain other stockholders, including certain officers, directors, and employees of the Company (“Stockholders Agreement”). The Stockholders Agreement provides that H&F has the right to nominate the number of directors to our Board described below (such persons nominated by H&F, the “H&F nominees”). H&F has the right to nominate a number of nominees equal to (x) the total number of directors comprising our Board at such time, multiplied by (y) the percentage of our outstanding common stock held from time to time by H&F, rounded up to the nearest whole number. For so long as we have a classified board, the H&F nominees must be divided by H&F as evenly as possible among the classes of directors. Pursuant to the Stockholders Agreement, for so long as H&F has the right to nominate any persons to our Board, (i) we will include the H&F nominees on the slate that is included in our proxy statements relating to the election of directors of the class to which such persons belong and provide the highest level of support for the election of each of such persons as we provide to any other individual standing for election as a director, and (ii) we will include on the slate that is included in our proxy statement relating to the election of directors only (x) the H&F nominees, and (y) the other nominees (if any) nominated by our Board’s Nominating and Corporate Governance Committee. In addition, H&F and certain other stockholders have agreed with the Company to vote in favor of the Company slate that is included in our Proxy Statement.
Messrs. Ragatz and Best, and Dr. Neal were nominated by H&F to serve on our Board pursuant to the Stockholders Agreement.
Removal of Directors; Vacancies
Our Certificate of Incorporation and Bylaws provide that the number of directors will be fixed from time to time exclusively pursuant to a resolution adopted by the Board; however, if at any time H&F owns at least 40% in voting power of the stock of our Company entitled to vote generally in the election of directors, the stockholders may also
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fix the number of directors pursuant to a resolution adopted by the stockholders. Subject to certain exceptions described in this section below with respect to our Stockholders Agreement, newly created director positions resulting from an increase in size of the Board and vacancies may be filled by our Board of Directors or our stockholders; provided, however, that at any time when H&F beneficially owns less than 40% in voting power of the stock of our Company entitled to vote generally in the election of directors, such vacancies shall be filled by our Board (and not by the stockholders).
Additionally, any or all of the directors may be removed at any time either with or without cause by the affirmative vote of a majority in voting power of all then-outstanding shares of capital stock of the Company entitled to vote thereon, voting together as a single class; provided, however, that at any time when H&F beneficially owns, in the aggregate, less than 40% in voting power of the then-outstanding shares of the stock of the Company entitled to vote generally in the election of directors, any such director or all such directors may be removed only for cause and only by the affirmative vote of the holders of at least 66 2/3% in voting power of all the then-outstanding shares of the stock of the Company entitled to vote thereon, voting together as a single class.
If a H&F nominee ceases to serve as a director for any reason (other than the failure of our stockholders to elect such individual as a director), the persons entitled to designate such nominee director under the Stockholders Agreement are entitled to appoint another nominee to fill the resulting vacancy. For additional information about the Stockholders Agreement, see the section entitled “Related Party Agreements and Transactions — Arrangements with Our Directors, Executive Officers, and Advisors — Stockholders Agreement.”
Board Independence
Pursuant to the Nasdaq’s corporate governance listing standards, a director employed by us cannot be deemed to be an “independent director.” Each other director will qualify as “independent” only if our Board affirmatively determines that he or she has no material relationship with us, either directly or as a partner, stockholder, or officer of an organization that has a relationship with us. Ownership of a significant amount of our stock, by itself, does not constitute a material relationship.
Our Board has determined each of our directors are “independent” in accordance with the Nasdaq rules, other than Mr. Heyman, who serves full-time as our Chief Executive Officer. In making its independence determinations, our Board considered all relevant facts and circumstances, including (but not limited to) the director’s commercial, industrial, banking, consulting, legal, accounting, charitable, and familial relationships, as well as any relationships with our management or significant stockholders. At least annually, the Board evaluates all relationships between the Company and each director in light of relevant facts and circumstances for the purposes of determining whether a material relationship exists that might signal a potential conflict of interest or otherwise interfere with such director’s ability to satisfy his or her responsibilities as an independent director. Based on this evaluation, the Board will make an annual determination of whether each director meets the independence standards of Nasdaq, the Securities and Exchange Commission (“SEC”), and our applicable committees.
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Leadership Structure
Our Board does not have a policy that the roles of Chief Executive Officer and Chairperson of the Board be either combined or separated, because the Board believes this determination should be made based on the best interests of the Company and its stockholders at any point in time based on the facts and circumstances then facing our Company. Currently, our leadership structure separates the roles of Chief Executive Officer and Chairperson of the Board, with Mr. Heyman serving as our Chief Executive Officer and Mr. Ragatz serving as our non-executive Chairperson of the Board. We believe this structure is appropriate as it provides Mr. Heyman with the ability to focus on our day-to-day operations while allowing Mr. Ragatz to lead our Board in its fundamental role of providing advice to and oversight of management. Mr. Ragatz qualifies as independent under applicable rules and regulations of the SEC and Nasdaq.
Board Committees
The Board’s standing committees consist of an Audit and Risk Management Committee, a Compensation Committee and a Nominating and Corporate Governance Committee. Each of these Committees is subject to its own charter, approved by our Board, copies of which can be found on our website at investors.snapone.com/corporate-governance/governance-overview. Our Board may from time to time establish other committees to accomplish or oversee specific tasks.
Name
Independent
Audit and Risk
Management
Compensation
Nominating and
Corporate Governance
Erik Ragatz (Chair)
 
M
C
Jacob Best
 
C
 
John Heyman
 
 
 
 
Annmarie Neal
 
M
M
Tom Hendrickson
C
 
 
Adalio Sanchez
M
M
 
Amy Steel Vanden-Eykel
 
 
M
Kenneth R. Wagers III
M
 
 
= Independent
M = Member
C = Chair
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Audit and Risk Management Committee
Meetings in 2023: 7
Tom Hendrickson (Chair)
Kenneth R. Wagers III
Adalio Sanchez
Primary Responsibilities
The purpose of the Audit and Risk Management Committee is to prepare the Audit and Risk Management Committee report required by the SEC to be included in our Proxy Statement and to assist our Board in overseeing and monitoring:
(1)
the quality and integrity of our financial statements, including oversight of our accounting and financial reporting processes, internal controls, and financial statement audits;
(2)
our compliance with certain legal and regulatory requirements;
(3)
our independent registered public accounting firm’s qualifications, performance, and independence;
(4)
our corporate compliance program, including our code of conduct and anti-corruption policy, and investigating possible violations thereunder;
(5)
our risk management policies and procedures;
(6)
our cybersecurity policies and effectiveness;
(7)
the performance of our internal audit function; and
(8)
all related-party transactions.
The Board has determined that each of Messrs. Hendrickson, Sanchez, and Wagers qualifies as an independent director under the Nasdaq corporate governance standards and independence requirements of Rule 10A-3 of the Securities Exchange Act of 1934, as amended (“Exchange Act”). The Board has also determined that each of Messrs. Hendrickson, Sanchez, and Wagers qualifies as an “audit committee financial expert” as such term is defined in Item 407(d)(5) of Regulation S-K and possesses financial sophistication, as defined under Nasdaq rules.
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Compensation Committee
Meetings in 2023: 4
Jacob Best (Chair)
Erik Ragatz
Annmarie Neal
Adalio Sanchez
Primary Responsibilities
The purpose of the Compensation Committee is to assist our Board in discharging its responsibilities relating to:
(1)
preparing the Compensation Committee report if and as required to be included in our Proxy Statement under SEC rules and regulations;
(2)
setting our compensation program and the compensation of our executive officers and directors; and
(3)
administering our incentive and equity-based compensation plans.
The Board has determined that each of Mr. Best, Dr. Neal, Mr. Ragatz, and Mr. Sanchez meets the independence qualifications applicable to members of a compensation committee under the Nasdaq corporate governance standards.
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Nominating and Corporate
Governance Committee
Meetings in 2023: 3
Erik Ragatz (Chair)
Annmarie Neal
Amy Steel Vanden-Eykel
Primary Responsibilities
The purpose of our Nominating and Corporate Governance Committee is to assist our Board in discharging its responsibilities relating to:
(1)
identifying individuals qualified to become new Board members, consistent with criteria approved by the Board and the director qualification standards set forth in our Corporate Governance Guidelines which include individual qualifications including strength of character, mature judgment, industry knowledge or experience, and an ability to work collegially with the other Board members, as well as all other factors it considers appropriate, which may include age, diversity of background, existing commitments to other businesses, service on other boards of directors or similar governing bodies of public or private companies or committees thereof, potential conflicts of interest with other pursuits, financial and accounting background, executive compensation background and the size, composition, and combined expertise of the existing Board;
(2)
reviewing the qualifications of incumbent directors to determine whether to recommend them for reelection and selecting, or recommending that the Board select the director nominees for the next annual meeting;
(3)
identifying Board members qualified to fill vacancies on any Board committee and recommending that the Board appoint the identified member(s) to the applicable committee;
(4)
reviewing and recommending to the Board corporate governance principles applicable to us;
(5)
overseeing the evaluation of the Board and management; and
(6)
handling such other matters specifically delegated to the committee by the Board from time to time.
The Board has determined that each of Dr. Neal, Ms. Vanden-Eykel, and Mr. Ragatz, qualify as independent directors under the Nasdaq corporate governance standards.
Board and Committee Meetings
The Board held 21 Board meetings, and 7 Audit and Risk Management Committee, 4 Compensation Committee and 3 Nominating and Corporate Governance Committee meetings during fiscal year 2023. Each director attended at least 75% of the meetings of the Board and committees on which such director served in fiscal year 2023 and which were held during the period such director served. While not required, members of our Board are encouraged to attend our annual meetings of stockholders. We held an annual meeting of stockholders last year on May 18, 2023, and a majority of our directors were able to attend.
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Board Diversity Matrix
The table below provides certain highlights of the composition of our Board members and nominees as of our Record Date, March 26, 2024. Each of the categories listed in the table below has the meaning as it is used in Nasdaq Rule 5605(f).
Total Number of Directors:
8
 
Female
Male
Non-Binary
Did Not Disclose
Gender
Gender Identity
 
 
 
 
Directors
2
6
Demographic Background
 
 
 
 
African American or Black
Alaskan Native or Native American
Asian
Hispanic or Latinx
1
Native Hawaiian or Pacific Islander
White
2
5
Two or More Races or Ethnicities
LGBTQ+
Did Not Disclose Demographic Background
Stockholder Recommendations of Director Candidates
Stockholders who would like to recommend a director candidate for consideration by our Nominating and Corporate Governance Committee must send notice to Snap One Holdings Corp., Attn: Corporate Secretary, 1355 W. Innovation Way, Suite 125, Lehi, Utah 84043, by registered, certified, or express mail, and provide us with a brief biographical sketch of the recommended candidate, a document indicating the recommended candidate’s willingness to serve if elected, and evidence of the stock ownership of the person recommending such candidate. The Nominating and Corporate Governance Committee or its chair will then consider the recommended director candidate in accordance with the same criteria applied to other director candidates, including those described in our corporate governance guidelines and the charter of the Nominating and Corporate Governance Committee.
Compensation Committee Interlocks and Insider Participation
Compensation decisions are made by our Compensation Committee. None of our current or former executive officers or employees currently serves, or has served during our last completed fiscal year, as a member of our Compensation Committee and, during that period, none of our executive officers served as a member of a compensation committee (or committee serving an equivalent function) of any other entity whose executive officers served as a member of our Board.
We have entered into certain agreements with affiliates of H&F described in the section entitled “Related Party Agreements and Transactions — Arrangements with Our Directors, Executive Officers, and Advisors — Stockholders
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Agreement.” While Messrs. Best and Ragatz and Dr. Neal are affiliated with H&F (together the “H&F Directors”), they do not have a material interest in our transactions with H&F. Because of this affiliation with our controlling shareholder, however, the H&F Directors do not meet the enhanced independence standards for non-employee directors set forth in Section 16b-3 of the Exchange Act required to approve certain exemptions related to equity awards granted to directors or officers. Therefore, equity awards granted to our directors or officers are approved by at least a majority of our non-employee directors as defined by Section 16b-3 of the Exchange Act.
Policy Against Speculative Trading, Hedging, and Pledging
Our Insider Trading Policy regarding securities trades by Company officers, directors, and employees and any other persons the Company determines should be subject to the policy, such as contractors and consultants (collectively, “Company Personnel”), prohibits Company Personnel, as well as their family and/or household members, from directly or indirectly trading in options (other than the exercise of options granted to Company Personnel by the Company), warrants, puts and calls, or similar instruments of the Company’s securities or selling such securities “short” (i.e., selling stock that is not owned and borrowing the shares to make delivery). In addition, such persons are prohibited from purchasing financial instruments (including prepaid variable forward contracts, equity swaps, collars, and exchange funds) or otherwise engaging in transactions, that hedge or offset, or are designed to hedge or offset, any decrease in the market value of the Company’s equity securities. Furthermore, our Insider Trading Policy generally prohibits such persons from purchasing Company securities on margin or pledging Company securities without pre-clearance from the Company’s Chief Legal Officer or his designee.
Sustainability
Support of environmental, social, and governance initiatives is integral to our business strategy and culture. We believe being a good environmental and social citizen is not just the right thing to do as a responsible member of the communities we serve but that our sustainability initiatives can help drive long-term value creation.
Snap One’s mission to make lives more enjoyable, connected, and secure is powered by a commitment to people, privacy, and the planet.

We have established four cornerstone pillars of corporate responsibility as we seek to benefit our communities and stakeholders: Governance, People, Product, and Planet. Our commitment is guided by the following goals:
1.
Ethical Company: Commit to governance practices and policies that promote high ethical standards and maximize the long-term interests of our stakeholders (Principled Governance).
2.
Employer of Choice: Create safer environments and more equitable and inclusive employee experiences (People).
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3.
Engaged Leader: Create solutions that enable resource efficiency and enhance data security and privacy for end customers and partners (Product).
4.
Environmental Steward: Meaningfully reduce our impact on the environment by minimizing our carbon footprint and improving the sustainability of our operations (Planet).
Please find the full description of our sustainability efforts in our 2023 Sustainability Report found at investors.snapone.com.
Code of Business Conduct and Ethics
We adopted a Code of Business Conduct and Ethics (“Code of Conduct”) applicable to all employees, executive officers and directors, that addresses legal and ethical issues that may be encountered in carrying out their duties and responsibilities, including the requirement to report any conduct they believe to be a violation of the Code of Conduct. The Code of Conduct is available on our website, investors.snapone.com/corporate-governance/governance-overview. We also employ an independent third-party dedicated Whistleblower Hotline, which our team members and partners can use 24 hours a day, seven days a week to encourage the reporting of suspected breaches of our Code of Conduct, Company policies, and any illegal or unethical activity, including financial fraud. If we ever were to amend or waive any provision of our Code of Conduct that applies to our principal executive officer, principal financial officer, principal accounting officer, or any person performing similar functions, we intend to satisfy our disclosure obligations with respect to any such waiver or amendment by posting such information on our website set forth above, rather than by filing a Current Report on Form 8-K.
The Board and Risk Oversight
Management has the responsibility to operate and manage the business on a day-to-day basis in a competent and ethical manner to produce value for the stockholders. The Board has extensive involvement in the oversight of risk management related to us and our business. Our Chief Executive Officer and other executive officers regularly report to the Board, as well as the Audit and Risk Management, the Compensation, and the Nominating and Corporate Governance Committees to ensure effective and efficient oversight of our activities and to assist in proper risk management and the ongoing evaluation of management controls. Through its regular meetings with management, including the finance, legal, IT, and internal audit functions, the Audit and Risk Management Committee reviews and discusses all significant areas of our business and summarizes for the Board all areas of risk, including with respect to cybersecurity and our risk-mitigation efforts. The internal audit function reports functionally and administratively to our Chief Legal Officer and directly to the Audit and Risk Management Committee. Our Compensation Committee is responsible for overseeing the management of risks relating to our executive compensation plans and arrangements. Our Nominating and Corporate Governance Committee is responsible for managing risks associated with the independence of the Board. The Company has also recently established a Sustainability Committee that works with the Nominating and Corporate Governance Committee to assist the Board in fulfilling its oversight responsibilities regarding sustainability matters including: environmental; health and safety; corporate social responsibility; philanthropy; corporate governance; reputation; diversity, equity and inclusion; community issues; political contribution; and other public policy matters relevant to the Company. While each Board Committee is responsible for evaluating certain risks and overseeing the management of such risks, our full Board keeps itself regularly informed regarding such risks through Committee reports and otherwise.
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Non-Employee Director Compensation
Non-Employee Director Compensation Program
For fiscal year 2023, director compensation and equity award grants for service on our Board were limited to directors not affiliated with H&F nor employed by the Company: Tom Hendrickson, Adalio Sanchez, Amy Steel Vanden-Eykel, and Kenneth R. Wagers III, (each a “Non-Employee Director”).
On May 11, 2022, the Board amended the Non-Employee Director compensation program such that, each Non-Employee Director receives an annual retainer of $225,000 consisting of an annual cash retainer of $75,000 payable in quarterly installments and an additional $150,000, which is paid in the form of a grant of restricted stock units that vests in its entirety one year from the date of the grant. This program also provides for (i) an additional $50,000 for the Chairperson of the Board position, to the extent the position is filled by a Non-Employee Director, and (ii) the following additional cash stipends to our Non-Employee Directors for service on our Committees:
 
Chairperson
Other Members
Audit and Risk Management
$25,000
$10,000
Compensation
$15,000
$7,500
Nomination & Corporate Governance
$15,000
$7,500
Our directors are also reimbursed for reasonable travel and related expenses associated with attendance at Board, Committee, or other Company meetings.
Director Product Experience Program
Our directors are encouraged to install and use Company products in their primary residence to better understand and support the development of Company products and services. Under our Director Product Experience Program, the Company contributes to the cost of installation services and certain products for Non-Employee Directors, so they can experience Company solutions as end users. For each Non-Employee Director, the Company provides, as a one-time installation benefit, $50,000 in certified dealer products, services, or other pre-approved costs reimbursed at 75% of invoice cost. In addition, each year thereafter each Non-Employee Director is eligible for up to $10,000 in dealer services or other costs, reimbursed at 75% of actual costs of services to support the installed system.
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Actual Director Compensation for 2023
The following table provides summary information concerning compensation paid or accrued by us on behalf of our Non-Employee Directors for services rendered to the Company during fiscal year 2023.
2023 Director Compensation Table
Name
Fees Paid In Cash ($)
Stock Awards ($) [1]
All Other Compensation ($)
Total $
Erik Ragatz
[2]
[2]
Jacob Best
[2]
[2]
Annmarie Neal
[2]
[2]
Adalio Sanchez
$92,500 [3]
$142,702 [4]
$39,701 [8]
$274,904
Amy Steel Vanden-Eykel
$82,500 [5]
$142,702 [4]
$225,202
Tom Hendrickson
$100,000 [6]
$142,702 [4]
$14,497 [8]
$257,199
Kenneth R. Wagers III
$85,000 [7]
$142,702 [4]
$227,702
[1]
Amounts included in this column reflect the aggregate grant date fair value of RSUs granted in 2023, calculated in accordance with ASC Topic 718. The assumptions used in the valuation are discussed in Note 11, Equity Agreements and Incentive Equity Plans in the notes to our audited consolidated financial statements contained in our 2023 Annual Report.

As of December 29, 2023, the following table shows the aggregate number of outstanding unvested RSUs and unvested shares of restricted stock held by each of the directors:
Name
Unvested RSUs
Erik Ragatz
Jacob Best
Annmarie Neal
Adalio Sanchez
15,528
Amy Steel Vanden-Eykel
15,528
Tom Hendrickson
15,528
Kenneth R. Wagers III
15,528

None of the directors had any outstanding stock options as of December 29, 2023.
[2]
Erik Ragatz, Jacob Best, and Annmarie Neal did not receive any compensation as directors during fiscal year 2023.
[3]
Mr. Sanchez received annual cash retainers of (i) $75,000 for serving as a director, (ii) $10,000 for serving on our Audit and Risk Management Committee, and (iii) $7,500 for serving on our Compensation Committee.
[4]
Consists of 15,528 RSUs granted on May 22, 2023.
[5]
Ms. Vanden-Eykel received annual cash retainers of (i) $75,000 for serving as a director and (ii) $7,500 for serving on our Nominating and Governance Committee.
[6]
Mr. Hendrickson received annual cash retainers of (i) $75,000 for serving as director, and (ii) $25,000 for serving as Chairperson of the Audit and Risk Management Committee.
[7]
Mr. Wagers received annual cash retainers of (i) $75,000 for serving as a director, (ii) $10,000 for serving on our Audit and Risk Management Committee.
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[8]
Messrs. Sanchez and Hendrickson received reimbursement for equipment, integrator services, and other costs in connection with the installation of Company products in their primary residence as part of the Director Product Experience Program.
Non-Employee Director Stock Ownership Guidelines
We have adopted stock ownership guidelines for our Non-Employee Directors in order to better align our eligible directors’ financial interests with those of our stockholders by requiring such directors to own a minimum level of our shares. Each of our Non-Employee Directors is required to own stock in an amount equal to five times the amount of the annual cash retainer (excluding committee retainers) within five years of becoming subject to the guidelines. As of March 26, 2024, each of our Non-Employee Directors either has satisfied, or is on track to satisfy, the guidelines within the five-year period. See “— Other Compensation Policies — Stock Ownership Policy” in the “Executive Compensation” section below for more information.
Directors Deferral Plan
Our Board has adopted the Directors Deferral Plan. All directors who are not our employees or employed by any of our subsidiaries are eligible to participate in the Directors Deferral Plan.
Deferral Elections. Under the terms of the Directors Deferral Plan, our non-employee directors may elect to defer all or a portion of the shares issued upon settlement of their RSUs in the form of deferred stock units credited to an account maintained by us. Deferred stock units will be awarded from and are subject to the terms of the 2021 Equity Incentive Plan. At the end of the deferral period, non-employee directors participating in the Directors Deferral Plan will have the right to receive a number of shares of common stock equal to the number of deferred stock units initially credited to the director’s account plus the number of deferred stock units credited as a result of any dividend equivalent rights (to which deferred stock units initially credited to a director’s account are entitled).
Settlement of Deferred Stock Units. Non-employee directors may elect that settlement of deferred stock units be made or commence on: (i) the first business day in a year following the year for which the deferral is made, (ii) following termination of service on our Board, or (iii) the earlier of (i) or (ii). Non-employee directors may elect that deferred stock units be settled in a single one-time distribution or in a series of up to 15 annual installments. In addition, deferred stock unit accounts will be settled upon a Change in Control (as defined in the 2021 Annual Incentive Plan) or upon a non-employee director’s death.
Administration; Amendment and Termination. Our Compensation Committee administers the Directors Deferral Plan. The Directors Deferral Plan or any deferral may be amended, suspended, or discontinued by our Compensation Committee at any time in the Compensation Committee’s discretion but no such amendment, suspension, or discontinuance may reduce any director’s accrued benefit, except as required to comply with applicable law. Our Compensation Committee may terminate the Directors Deferral Plan at any time, as long as the termination complies with applicable tax laws and other requirements.
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Executive Compensation
Compensation Discussion and Analysis
We are an “emerging growth company” as defined in the Jumpstart Our Business Startups (“JOBS”) Act of 2012 and as such, have elected to comply with certain reduced public company reporting requirements regarding our executive compensation program. These reduced reporting requirements include reduced disclosure about our executive compensation arrangements. In addition, we are not currently required to hold non-binding stockholder advisory votes on Named Executive Officer compensation.
We may use these provisions until the last day of our fiscal year in which the fifth anniversary of the completion of our IPO occurs (which will be our 2026 fiscal year). However, if any of the following events occur prior to the end of such five-year period, we will cease to be an emerging growth company prior to the end of the five-year period: our public float exceeds $700 million and we become a “large accelerated filer,” our annual gross revenues exceed $1.235 billion, or we issue more than $1.0 billion of nonconvertible debt in any three-year period.
We are also a “smaller reporting company,” as defined in Item 10(f)(1) of Regulation S-K. If we are a smaller reporting company at the time we cease to be an emerging growth company, we may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies.
This Compensation Discussion and Analysis is intended to assist our stockholders in understanding our executive compensation program by providing an overview of our executive compensation-related policies, practices, and decisions for 2023. It also explains how we determined the material elements of compensation for our principal executive officer and our two executive officers (other than our principal executive officer) who were our most highly compensated executive officers as of December 29, 2023, and who we refer to as our “Named Executive Officers.” For fiscal year 2023, our Named Executive Officers were:
John Heyman, our Chief Executive Officer (our “CEO”);
Michael Carlet, our Chief Financial Officer (our “CFO”); and
GPaul Hess, our Chief Product Officer (our “CPO”).
Specifically, this Compensation Discussion and Analysis provides an overview of our executive compensation philosophy, the overall objectives of our executive compensation program, and each compensation element that we provide to our executive officers, including our Named Executive Officers. In addition, it explains how and why the Compensation Committee arrived at the specific compensation decisions for our executive officers, including our Named Executive Officers, in fiscal year 2023.
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Overview
2023 Executive Compensation Highlights
Consistent with our performance and compensation philosophy, our Board and/or the Compensation Committee took the following compensation actions for our Named Executive Officers for 2023:
Base Salaries – The Compensation Committee determined to increase the annual base salaries of certain of our Named Executive Officers to bring their base salaries to levels that were more in line with those of similarly situated executives in the competitive marketplace, including an increase to the annual base salary of our CFO to $415,000, and our CPO to $385,000, representing increases of between 2.7% and 3.8%. The base salary of our CEO remained unchanged year-over-year at $735,000.
Cash Bonuses – Based on our performance during 2023, the Compensation Committee made cash bonus payments to our Named Executive Officers under our 2023 Annual Incentive Plan, which represented 65.1% of their target annual incentive award opportunities.
Long-Term Incentive Compensation – Our Board approved long-term incentive compensation opportunities to our Named Executive Officers in the form of performance stock unit (“PSU”) awards that may be earned by the achievement of certain performance metrics, vest and be settled for shares of our common stock, and restricted stock unit (“RSU”) awards that may vest and be settled for shares of our common stock.
Emphasis on Variable and Performance-Based Compensation
The annual compensation of our executive officers, including our Named Executive Officers, varies from year to year based on our corporate financial and operational results. Consistent with our compensation philosophy, our executive compensation program emphasizes “variable” pay over “fixed” pay and seeks to balance short-term and long-term incentives, as well as performance-based and time-based incentives. In fiscal year 2023, the majority of the target total direct compensation of our CEO consisted of variable pay, including cash awarded under our annual bonus plan and long-term incentives in the form of equity awards for which value is variable based on both our stock price and the achievement of performance conditions. Fixed pay, primarily consisting of base salary, made up only 11% of our CEO’s target total direct compensation in fiscal year 2023, while variable pay, consisting of both annual and long-term incentives in the form of equity awards, made up 89% of his target total direct compensation. Similar allocations applied to our other executive officers, including our other Named Executive Officers. The following charts show the percentages of target-variable pay versus target-fixed pay for our CEO and our other Named Executive Officers in fiscal year 2023:
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Executive Compensation Best Practices
We endeavor to maintain sound executive compensation policies and practices, including compensation-related corporate governance standards, consistent with our executive compensation philosophy. During 2023, the following executive compensation policies and practices were in place, including those we have implemented to drive performance and those that either prohibit or minimize behaviors that we do not believe serve our stockholders’ long-term interests:
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Practices in Executive Compensation
What We Do
What We Do Not Do
Compensation Committee Independence. Our Board maintains a Compensation Committee comprised solely of independent directors who have established effective means for communicating with our stockholders regarding their executive compensation ideas and concerns.
Compensation Committee Advisor
Independence. The Compensation Committee engages and retains its own advisors. During 2023, the Compensation Committee engaged Korn Ferry to assist with its responsibilities. In addition to advisory services provided to the Compensation Committee, Korn Ferry performed executive recruiting services in 2023.
Annual Compensation Review. The Compensation Committee conducts an annual review of our executive compensation philosophy and strategy, including reviewing the peer group used for compensation comparative purposes.
Compensation-Related Risk Assessment. We periodically evaluate our compensation programs, policies, and practices to ensure they reflect an appropriate level of risk-taking but do not encourage our employees to take excessive or unnecessary risks that could have a material adverse impact on the Company.
Emphasize Performance-Based Incentive Compensation. The Compensation Committee designs our executive compensation program to use performance-based short-term and long-term incentive compensation awards to align the long-term interests of our executive officers, including our Named Executive Officers, with the interests of our stockholders.
No Executive Defined Benefit Retirement Programs. Other than our Section 401(k) plan generally available to all employees, we do not offer defined benefit or contribution retirement plans or arrangements or nonqualified deferred compensation plans or arrangements to executive officers, including our Named Executive Officers.
No Tax “Gross-Ups” or Payments. We do not provide any “gross-ups” or tax payments in connection with any compensation element or any excise tax “gross-up” or tax reimbursement in connection with any change-in-control payments or benefits.
No Stock Option Repricing. We do not reprice options to purchase shares of our common stock without stockholder approval.
No Hedging or Pledging. We prohibit our employees (including our executive officers) and our Non-Employee Directors from hedging our equity securities or from purchasing our securities on margin or pledging our securities as collateral for a loan, in each case without first obtaining the pre-approval of our Chief Legal Officer.
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Emphasize Long-Term Equity
Compensation. The Compensation Committee uses equity awards to deliver long-term incentive compensation opportunities to our executive officers, including our Named Executive Officers. These equity awards vest or may be earned over multi-year periods, which better serves our long-term value-creation goals and retention objectives.
Limited Executive Perquisites. The perquisites or other personal benefits we provide to our executive officers, including our Named Executive Officers, serve a sound business purpose. Also, our executive officers, including our Named Executive Officers, participate in our health and welfare benefit programs on the same basis as all our employees.
Stock Ownership Policy. We maintain a stock ownership policy for our executive officers, including our Named Executive Officers, and the non-employee members of our Board, which requires each of them to own a specified amount of our common stock.
Compensation Recovery Policy. We have adopted policies, designed to be compliant with Nasdaq rules, which provide for the recoupment of annual incentive compensation from our executive officers in the event of a financial restatement resulting from the fraud or intentional misconduct of an executive officer.
Reasonable Change-in-Control Arrangements. The post-employment compensation arrangements for our executive officers, including our Named Executive Officers, provide for amounts that are within reasonable market norms.
Succession Planning. Our Board reviews the risks associated with our key executive positions on an annual basis, so we have an adequate succession strategy and plans in place for our most critical positions.
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Compensation Philosophy and Strategy
Attracting and rewarding the best talent creates a competitive edge for us. Cultivating a “results-oriented” culture focused on advancement and retention ensures we continue to be the best place to work in our industry. Our competitive total rewards anchor on the following key programs:
market-competitive annual base salaries plus annual cash incentives;
an attractive long-term incentive compensation program in the form of equity awards for certain key positions; and
market-competitive retirement and healthcare benefits.
We believe high performance should be rewarded with a combination of cash and equity awards. Because we believe that diversity enhances a team’s creative ability, we strive to deliver a total rewards program that supports diversity and creates programs to ensure equitable pay.
We have designed our executive compensation program to reward our executive officers, including our Named Executive Officers, at a level consistent with our overall strategic and financial performance and to provide remuneration sufficient to attract, retain, and motivate them to exert their best efforts in the highly competitive technology-oriented environments in which we operate.
The Compensation Committee periodically reviews and analyzes market trends and the prevalence of various compensation delivery vehicles and adjusts the design and operation of our executive compensation program from time to time as it deems necessary and appropriate. In designing and implementing the various elements of our executive compensation program, the Compensation Committee considers market and industry practices, as well as the tax efficiency of our compensation structure and its impact on our financial condition. While the Compensation Committee considers all these factors in its deliberations, it places no formal weighting on any one factor.
The Compensation Committee reviews our executive compensation program annually. As we continue to grow, the Compensation Committee will evaluate our compensation philosophy and program objectives as circumstances require.
Compensation-Setting Process
Role of the Compensation Committee
The Compensation Committee, among its other responsibilities, establishes our overall compensation philosophy, oversees our executive compensation program, and oversees the compensation of the non-employee members of our Board. The Compensation Committee has the authority to retain special counsel and other advisors, including compensation consultants, to assist in carrying out its responsibilities to determine the compensation of our executive officers. The Compensation Committee’s authority, duties, and responsibilities are described in its charter, which is reviewed annually and updated as warranted. The charter is available on our Company website at investors.snapone.com/corporate-governance/governance-overview.
While the Compensation Committee determines our overall compensation philosophy and recommends the compensation of our executive officers, it considers input from its compensation consultant, as well as our CEO and our internal compensation staff, to formulate recommendations and make decisions with respect to specific compensation actions. The Compensation Committee determines and approves, or recommends to the Board the
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approval of, all decisions regarding executive compensation, including base salary levels, target annual cash bonus opportunities, actual cash bonus payments, and long-term incentive compensation in the form of equity awards. The Compensation Committee meets on a regularly scheduled basis and at other times as needed, and periodically reviews compensation matters with our Board.
Prior to the beginning of each fiscal year, the Compensation Committee reviews our executive compensation program, including any incentive compensation plans and arrangements, to assess whether our compensation elements, actions, and decisions: (i) are properly coordinated, (ii) align with our vision, mission, values, and corporate goals, (iii) provide appropriate short-term and long-term incentives for our executive officers, (iv) achieve their intended purposes, and (v) are competitive with the compensation of executives in comparable positions at the companies with which we compete for executive talent. Following this assessment, the Compensation Committee makes any necessary modifications to our existing compensation program and practices, which may include adopting new plans or arrangements.
The Compensation Committee also conducts an annual review of our executive compensation strategy to ensure that it is appropriately aligned with our business strategy and achieving our desired objectives. Further, the Compensation Committee reviews market trends and changes in competitive compensation practices, as described below. Based on its review and assessment, the Compensation Committee periodically recommends changes in our executive compensation program to our Board of Directors.
Setting Target Total Compensation
Typically, during fourth quarter of a fiscal year, or more frequently as warranted, the Compensation Committee reviews the annual base salary levels, annual cash bonus opportunities, and long-term incentive compensation opportunities of our executive officers, including our Named Executive Officers, and all related performance criteria. Adjustments to a Named Executive Officer’s compensation made in connection with the Compensation Committee’s annual review are generally effective at the beginning of the following fiscal year or at the time of a promotion.
The Compensation Committee’s goal is generally to target elements of compensation within a competitive range, using a balanced approach that does not use rigid percentiles or any quantitative formula to determine target pay levels for each compensation element. For 2023, the Compensation Committee reviewed each element of compensation described below and set the target total compensation opportunities of our executive officers after taking into consideration the following factors:
our executive compensation program objectives;
our performance against the financial, operational, and strategic objectives established by the Board and Compensation Committee;
each individual executive officer’s knowledge, skills, experience, qualifications, tenure, and scope of roles and responsibilities relative to other similarly situated executives at the companies in our compensation peer group and in selected broad-based compensation surveys;
prior performance of each individual executive officer, based on a subjective assessment of his or her contributions to our overall performance, ability to lead his or her business unit or function, and work as part of a team, all of which reflect our core values;
potential of each individual executive officer to contribute to our long-term financial, operational, and strategic objectives;
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our CEO’s compensation relative to that of our executive officers, and compensation parity among our executive officers;
our financial performance relative to our compensation and performance of our peers;
compensation practices of the companies in our compensation peer group and in selected broad-based compensation surveys and the positioning of each executive officer’s compensation in a ranking of peer company compensation levels based on an analysis of competitive market data; and
recommendations of our CEO with respect to the compensation of our executive officers (except with respect to his own compensation).
These factors provide the framework for compensation decision-making and final decisions regarding the compensation opportunity for each executive officer.
With respect to each of our Named Executive Officers, in determining compensation, the Compensation Committee considered our compensation philosophy as described above, comparative market data and specific factors relative to each Named Executive Officer’s responsibilities and performance. We do not specifically benchmark compensation for our Named Executive Officers in terms of picking a particular percentile relative to other individuals with similar titles at peer group companies. The Compensation Committee believes that many subjective factors unique to each Named Executive Officer’s responsibilities and performance are not adequately reflected or otherwise accounted for in a percentile-based compensation determination.
Role of our CEO
Our CEO works closely with the Compensation Committee in determining the compensation of our other executive officers, including the other Named Executive Officers. Typically, our CEO, in consultation with our Chief People Officer, reviews comparative data derived from publicly available market compensation information for each of the other Named Executive Officers. The CEO then makes a recommendation to the Compensation Committee regarding compensation for the other Named Executive Officers. The Compensation Committee reviews and discusses this information and the recommendation by the CEO, and then determines a dollar-denominated amount available for allocation to salary and equity awards for each such Named Executive Officer, as it deems appropriate. The CEO also works with the Compensation Committee to recommend the structure of the annual bonus plan, and to identify and develop corporate and individual performance objectives for such plan, and to evaluate actual performance against the selected measures.
While the Compensation Committee considers our CEO’s recommendations, as well as the competitive market analysis prepared by its compensation consultant, these recommendations and market data serve as only two of several factors in making its decisions with respect to executive officer compensation. Ultimately, the Compensation Committee applies its own business judgment and experience to determine the individual compensation elements and amount thereof for our executive officers. Moreover, no executive officer participates in the determination of the amounts or elements of his or her own compensation.
Role of Compensation Consultant
Pursuant to its charter, the Compensation Committee has the authority to engage its own legal counsel and other advisors, including compensation consultants, as it determines in its sole discretion, to assist in carrying out its responsibilities, and any such advisor reports directly to the Compensation Committee.
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In 2023, pursuant to this authority, the Compensation Committee re-engaged Korn Ferry, a national compensation consulting firm, to provide information, analysis, and other assistance relating to our executive compensation program on an ongoing basis. The nature and scope of the services provided to the Compensation Committee by Korn Ferry in 2023 were as follows:
provided recommendations for updating the compensation peer group;
provided advice with respect to compensation best practices and market trends for executive officers and members of our Board;
conducted an analysis of the levels of overall compensation and each element of compensation for our executive officers;
provided executive recruiting services to our Board; and
provided ad hoc advice and support throughout the year.
Representatives of Korn Ferry attend meetings of the Compensation Committee as requested and also communicate with the Compensation Committee outside of meetings. While Korn Ferry reports to the Compensation Committee rather than to management, Korn Ferry may meet with members of management, including our CEO, Chief People Officer, and Chief Legal Officer, for purposes of gathering information on proposals that management may make to the Compensation Committee. During 2023, Korn Ferry met with various executive officers to collect data and obtain management’s perspective on various executive compensation proposals.
The Compensation Committee may replace its compensation consultant or hire additional advisors at any time.
The Compensation Committee has assessed the independence of Korn Ferry taking into account, among other things, the various factors as set forth in Exchange Act Rule 10C-1 and the enhanced independence standards and factors set forth in the applicable listing standards of the Nasdaq, and has concluded that its relationship with Korn Ferry and the work of Korn Ferry on behalf of the Compensation Committee has not raised any conflict of interest.
Competitive Positioning
Given our unique history and business, market competitors, and geographical location, the Compensation Committee believes that the competitive market for executive talent includes primarily other technology and electronics companies in related industries as well as specialty distribution companies. Accordingly, it reviews compensation from a compensation peer group that consists of a carefully selected cross-section of public companies that are in the same or related industries with revenues and market capitalizations similar to ours. This data is supplemented with executive compensation survey data representing both public and private technology companies that are of similar size.
Compensation Peer Group
As part of its deliberations, the Compensation Committee considers competitive market data on executive compensation levels and practices and a related analysis of such data. This data is drawn from a select group of peer companies developed by the Compensation Committee, as well as compensation survey data.
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In December 2022, the Compensation Committee, based on recommendations provided by and discussions with its compensation consultant, selected a group of peer companies to be used as a reference for market positioning and for assessing competitive market practices. This process involved a detailed review of the pool of U.S.-based publicly traded companies, taking into consideration companies our management considered peers (applying traditional size and industry filters) and reviewing companies named as peers of similar companies.
The Compensation Committee selected the following peer group to consist of 19 publicly traded technology companies. The selected companies had revenues ranging from approximately $144 million to approximately $3,531 million, with a median of approximately $1,112 million, and market values ranging from approximately $256 million to approximately $11,879 million, with a median of approximately $1,507 million. The companies comprising the compensation peer group were as follows:
2023 Compensation Peer Group
ADTRAN Holdings, Inc.
Hayward Holdings, Inc.
SPS Commerce, Inc.
Allegion Plc
Napco Securities Technology, Inc.
SPX Corporation
Alarm.com, Inc.
Netgear, Inc.
Universal Electronics, Inc.
Arlo Technologies, Inc.
Plexus Corp.
Vishay Precision Group, Inc.
Corsair Gaming, Inc.
Scansource, Inc.
Vivint Smart Home, Inc.
ePlus, Inc.
Sonos, Inc.
VOXX International Corporation
Extreme Networks, Inc.
 
 
This compensation peer group was used by the Compensation Committee in connection with its annual review of our executive compensation program in December 2022. Specifically, the Compensation Committee reviewed the compensation data drawn from the compensation peer group, in combination with industry-specific compensation survey data from the Radford Global Technology Survey, to develop a subjective representation of the “competitive market” with respect to current executive compensation levels and related policies and practices. The Compensation Committee then evaluated how our pay practices and executive officer compensation compared to the competitive market. As part of this evaluation, the Compensation Committee also reviewed the performance measures and performance goals generally used within the competitive market to reward performance.
The Compensation Committee believes that information regarding the compensation practices at other companies is useful in at least two respects. First, the Compensation Committee recognizes our compensation policies and practices must be competitive in the marketplace. Second, this information is useful in assessing the reasonableness and appropriateness of individual executive compensation elements and of our overall executive compensation packages. This information is only one of several factors that the Compensation Committee considers, however, in making its decisions with respect to the compensation of our executive officers.
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Compensation Elements
The three primary elements of our executive compensation programs are: (1) base salary, (2) annual cash bonus opportunities, and (3) long-term incentive compensation in the form of equity awards, as described below:
Compensation Element
What This Element Rewards
Purpose and Key Features of Element
Base salary
Individual performance, level of experience and expertise, expected future performance and contributions
Provides competitive level of fixed compensation determined by the market value of the position, with actual base salaries established based on the facts and circumstances of each executive officer and each individual position
Annual cash awards
Achievement of pre-established corporate performance objectives (related to adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”))
Motivate executive officers to contribute to the Company’s financial success and drive value for shareholders
Long-term incentives/equity awards
Achievement of corporate performance objectives designed to enhance long-term stockholder value and attract, retain, motivate, and reward executive officers over extended periods that are established at prior to the start of each annual performance period.
Long-term incentives/equity awards
Our executive officers, including our Named Executive Officers, also participate in the standard employee benefit plans available to most of our employees. In addition, our executive officers are eligible for post-employment (severance and change-in-control) payments and benefits under certain circumstances. Each of these compensation elements is discussed in detail below, including a description of each element and how it fits into our overall executive compensation and a discussion of the compensation amounts paid to our executive officers, including our Named Executive Officers, in 2023 under each of these elements.
Base Salary
We believe that a competitive base salary is a necessary element of our executive compensation program, so that we can attract and retain a stable management team. Base salaries for our executive officers, including our Named Executive Officers, are also intended to be competitive with those received by other individuals in similar positions at the companies with which we compete for talent, as well as equitable across the executive team.
The Compensation Committee reviews the base salaries of our Named Executive Officers annually and makes adjustments as it determines to be necessary or appropriate based on the individual performance of the Named Executive Officer, our Company performance, any change in the Named Executive Officer’s position within our business, and/or the scope of his responsibilities and any changes thereto and/or comparative market data.
In December 2022, the Compensation Committee reviewed the base salaries of our executive officers, including our Named Executive Officers, taking into consideration a competitive market analysis performed by its compensation
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consultant and the recommendations of our CEO (except with respect to his own base salary), as well as the other factors described above. Following this review, the Compensation Committee determined to adjust the base salaries of our executive officers, including our Named Executive Officers, to levels it believed were appropriate to maintain their competitiveness. The base salaries of our Named Executive Officers for 2023 were as follows:
Named Executive Officer
2022
Base Salary ($)
2023
Base Salary ($) (1)
Percentage
Adjustment
Mr. Heyman
$735,000
$735,000
0.0%
Mr. Carlet
$400,000
$415,000
3.8%
Mr. Hess
$375,000
$385,000
2.7%
(1)
These base salary increases were effective January 1, 2023.
The exact salary amounts paid to our Named Executive Officers during 2023 are set forth in this Proxy Statement in the “Summary Compensation Table” below.
Annual Cash Bonuses
The Named Executive Officers and other officers and senior managers determined by the Compensation Committee are eligible to receive annual cash incentive bonuses under the 2023 Annual Incentive Plan. We use annual cash incentive bonuses to motivate our bonus-eligible employees, including our Named Executive Officers, to drive continuous improvement year over year and enhance shareholder value, focusing on our short-term financial and operational objectives. Consistent with our compensation philosophy, these annual incentive bonuses are intended to help us to deliver a competitive total direct compensation opportunity to our bonus-eligible employees. Annual cash bonuses are entirely Company performance based, are not guaranteed, and may vary materially from year to year.
Typically, the Compensation Committee establishes cash incentive bonus opportunities pursuant to a formal cash bonus plan that rewards our bonus-eligible employees based on the achievement of different measures of our corporate performance over our fiscal year. The cash incentive bonus plan is designed to pay above-target bonuses when we exceed our annual corporate objectives and below-target bonuses when we do not achieve these objectives (so long as more than the threshold level of performance is achieved, as no bonus will be paid if such performance threshold is not exceeded).
In February 2023, the Compensation Committee determined to award cash incentive bonus opportunities to our bonus-eligible employees, including our Named Executive Officers, pursuant to the cash bonus plan for 2023 (the “2023 Annual Incentive Plan”). Under the 2023 Annual Incentive Plan, the Compensation Committee had the authority to select the performance measures and related target levels applicable to the annual cash bonus opportunities for our plan participants. The performance measures involving our financial results could be determined in accordance with generally accepted accounting principles in the United States (“GAAP”), or such financial results could consist of non-GAAP financial measures, and any actual results were subject to adjustment by the Compensation Committee for one-time items or unbudgeted or unexpected items when determining actual performance against the target levels for the performance measures.
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The Compensation Committee retained the right to, in its sole discretion, amend or change Company performance targets under the 2023 Annual Incentive Plan to adjust for unusual or one-time changes to the business, such as the Company’s merger and acquisition activity; no such adjustments were made in 2023.
Target Annual Cash Bonus Opportunities
The target annual cash bonus opportunities for each of our Named Executive Officers under the 2023 Annual Incentive Plan, expressed as a percentage of his annual base salary, were as follows:
Named Executive Officer
Annual
Base Salary ($)
Target Annual
Cash Bonus
Opportunity (% of
Annual Base Salary)
Target Annual
Cash Bonus
Opportunity ($)
Mr. Heyman
$735,000
125%
$918,750
Mr. Carlet
$415,000
80%
$332,000
Mr. Hess
$385,000
80%
$308,000
The performance measure used for determining payouts against the target opportunity under the 2023 Annual Incentive Plan for all plan participants, including our Named Executive Officers, was the Company’s adjusted earnings before interest, taxes, depreciation, and amortization as approved by the Board and reported in the Company’s 2023 financial reports filed with the SEC (“Adjusted EBITDA”). (Adjusted EBITDA is a non-GAAP financial measure which is reconciled to Net Loss in the Appendix to this Proxy Statement.) The Compensation Committee determined this measure to be appropriate to focus our bonus-eligible employees, including our Named Executive Officers, on our short-term financial objectives as reflected in our annual operating plan while, at the same time, recognizing their contributions to the achievement of this objective and setting the expectation that they successfully execute their individual roles and responsibilities. The Compensation Committee and the Board have the discretion to decrease any Named Executive Officer’s bonus compensation based on the Board’s or the Compensation Committee’s assessment of such Named Executive Officer’s individual performance during the year.
Corporate Performance Objectives
Corporate
Performance Metric
(in $millions)
Minimum
Threshold
Target
Maximum
Payout
at the
Minimum
Threshold
Payout at the
Target
Payout
at the
Maximum
Threshold
2023 Company Adjusted EBITDA
$100.8M
$126.0M
$153.0M
0%
100%
200%
The payout scales for each performance metric were calibrated to payout 100% of the Target Annual Cash Bonus Opportunity at the Target achievement level. For results between the Minimum Threshold and the Target, payout percentages are calculated using linear interpolation from the minimum percent noted in the table above up to the Target of 100%. Adjusted EBITDA attainment of the Maximum will result in a 200% payout of employees’ individual bonus targets. After the Target is achieved, the Company will contribute 39.6% of every additional dollar of pre-bonus Adjusted EBITDA to a pool that will be used to fund additional payments above the Target amount (the “Overachievement Bonus Pool”). The Overachievement Bonus Pool will be funded up to the Maximum Threshold which is an amount equal to a 200% payout of all bonus-eligible employees’ individual bonus targets.
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For results at or below the Minimum Threshold, the payout percentage for that performance metric would be 0%. For results at or above the Maximum Threshold, the payout percentage for that performance metric would be capped at 200%.
2023 Performance Results and Bonus Decisions
On March 5, 2024, the Compensation Committee determined that our actual achievement with respect to the Company performance criteria for purposes of the 2023 Annual Incentive Plan was as follows:
Adjusted EBITDA
Target Level (in $
millions)
Adjusted
EBITDA
Actual
Result
(in $ millions)
Payout Percentage
for Adjusted EBITDA
Achievement
(% of payout
for target level of
performance)
$126M
$117.2M
65.1%
Based this determination, the Compensation Committee approved bonus payments as follows for our Named Executive Officers:
Named Executive
Officer
Target Annual
Cash Bonus
Opportunity ($)
Actual Annual
Cash Bonus
Payment ($)
Mr. Heyman
$735,000
$598,106
Mr. Carlet
$415,000
$216,132
Mr. Hess
$385,000
$200,508
The annual cash awards paid to our Named Executive Officers for 2023 are included in the “2023 Summary Compensation Table” below.
Long-Term Incentive Compensation
We deliver long-term incentive compensation in the form of equity awards to motivate our executive officers, including our Named Executive Officers, by providing them with the opportunity to build an equity interest in the Company and to share in the potential appreciation of the value of our common stock. At the time of our IPO in 2021, we converted previously granted equity into restricted stock awards (“RSA”) that become unrestricted shares of common stock as the time-based or performance-based restrictions lapse and we also issued options intended to preserve the upside of such previously granted equity that would otherwise have been lost as a result of such equity conversion. Subsequent to our IPO, pursuant to our 2021 Equity Incentive Plan, the Compensation Committee has decided to award our executive officers a mix of performance stock unit (“PSU”) awards that may be earned, vest, and settled for shares of our common stock and restricted stock unit (“RSU”) awards that may vest and be settled for shares of our common stock.
We believe PSU awards serve as an effective source of motivation to our executive officers to drive our financial performance. In addition, PSU awards provide a direct link between compensation and stockholder return, thereby motivating our executive officers to focus on and strive to achieve long-term financial and strategic objectives.
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We further believe RSU awards provide a reward for growth in the value of our common stock and are less dilutive than stock options to our stockholders. Since their value increases with any increase in the value of the underlying shares, RSU awards provide an incentive to generate sustained lasting increases in the value of our stock over the long term. Unlike stock options, however, RSU awards have real economic value when they vest even if the market price of our common stock declines or stays flat, thus delivering more predictable value to our executive officers. In addition, because they are subject to a multi-year vesting requirement, RSU awards serve our retention objectives since our executive officers must remain continuously employed by us through the applicable vesting dates to fully earn these awards.
The Compensation Committee views equity awards, whether the awards are subject to time-based vesting requirements or are to be earned based on the attainment of specific performance objectives, as inherently variable since the grant date fair value of these awards may not necessarily be indicative of their value when, and if, the shares of our common stock underlying these awards are ever earned. The Compensation Committee further believes these awards enable us to attract and retain key talent in our industry and aligns our executive officers’ interests with the long-term interests of our stockholders.
Generally, in determining the size of the equity awards granted to our executive officers, the Compensation Committee takes into consideration the recommendations of our CEO (except with respect to his own equity award), as well as the factors described above. The Compensation Committee also considers the dilutive effect of our long-term incentive compensation practices, and the overall impact that these equity awards, as well as awards to other employees, will have on stockholder value.
On February 15, 2023, our Board of Directors approved equity awards for our executive officers, including our Named Executive Officers. In determining the amount of each executive officer’s equity award, our Board considered the recommendations of the Compensation Committee, which had been formulated after taking into consideration the recommendations of our CEO (except with respect to his own equity award), as well as the factors described above. The Compensation Committee also considered the existing equity holdings of each executive officer, including the current economic value of their unvested equity awards and the ability of these unvested holdings to satisfy our retention objectives.
These equity awards consisted of both PSUs and RSUs. The RSUs and PSUs awarded to our Named Executive Officers for 2023 were as follows:
Named Executive
Officer
Performance Stock
Unit Awards (target
number of shares)
Restricted Stock Unit
Awards (number of
shares)
Aggregate Annual
Award Value ($)
Mr. Heyman
290,446
201,836
$5,567,709
Mr. Carlet
70,565
70,565
$1,596,180
Mr. Hess
57,604
65,669
$1,394,218
The number of shares subject to each award was calculated based on the average of Snap One closing prices during the month of January 2023, $8.68. The award date was February 15th, 2023, which was the date used to calculate the value of the shares in the table above, $11.31.
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RSU Awards
The RSU awards granted to our executive officers, including the Named Executive Officers, on February 15, 2023 were subject to a time-based vesting requirement providing that these awards are to vest as follows: 25% of the RSUs vest on the first anniversary of the Vesting Commencement Date, and an additional 1/16th of the RSUs vest quarterly thereafter, assuming the continued service of the executive officers on each such vesting date. Each RSU represents a contingent right to receive one share of our common stock upon vesting.
2023 PSU Awards
In 2023, the Compensation Committee awarded PSUs with three separate Performance Periods, as defined below, each corresponding to a fiscal year of the Company: 2023, 2024 and 2025 (the “2023 PSUs”). The percentage of 2023 PSUs earned with respect to one-third of the 2023 PSUs will be determined based on the Company’s performance in the 2023 Performance Period, the percentage of 2023 PSUs earned with respect to one-third of the 2023 PSUs will be determined based on the Company’s performance in the 2024 Performance Period, and the percentage of 2023 PSUs earned with respect to one-third of the 2023 PSUs will be determined based on the Company’s performance in the 2025 Performance Period.
The number of 2023 PSUs awarded to each of our Named Executive Officers (as set forth in the table above) represents the target number of units subject to each award across all the Performance Periods. The number of units our Named Executive Officers can earn is based on the Company’s level of achievement of certain performance metrics regarding the Company’s Adjusted EBITDA, Adjusted EBITDA margin, and Employee Engagement as defined below (each a “Performance Metric”):
“Adjusted EBITDA” means net income/loss, plus interest expense, net income tax benefit, depreciation and amortization, further adjusted to exclude equity-based compensation, acquisition-related and integration-related costs, initial public offering costs and certain other non-recurring, non-core, infrequent or unusual charges (as determined by the Company). A reconciliation of the Company’s 2023 Net Loss to Adjusted EBITDA is provided at in the Reconciliation Table in the Appendix of this Proxy Statement.
Adjusted EBITDA Margin” means a profitability ratio of Adjusted EBITDA, as a percentage of the Company’s Net Sales.
“Employee Engagement” means the level of the employee engagement (as determined by the Compensation Committee or its designee in its sole discretion), as calculated from the responses of the Company’s employees below the level of director to the questions in a pulse survey designed to measure employee engagement administered in the fourth quarter of the applicable Performance Period (or if no survey is conducted in the fourth quarter, the survey closest to this time) by the Company’s third-party human resources survey provider.
In February 2023, the Board approved and the specified levels of attainment of each Performance Metric for the 2023 Performance Period, but the specified levels of attainment of the Performance Metrics for the 2024 and 2025 Performance Periods will be determined by the Compensation Committee no later than 90 days following commencement of the applicable Performance Period.
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The achievement for the 2023 Performance Period is the weighted average of three results (20% Adjusted EBITDA Margin, 70% Adjusted EBITDA, and 10% Employee Engagement) based on the performance thresholds listed in the table below:
Corporate
Performance Metric
Weight
Minimum
Threshold –
0% earned
50%
earned
Target –
100%
earned
150%
earned
Cap –
200%
earned
2023 Adjusted EBITDA Margin
20%
10.0%
10.5%
11.0%
11.5%
12.0%
2023 Adjusted EBITDA
70%
$100.8M
$113.4M
$126M
$139.5M
$153M
Employee Engagement (Below Director)
10%
Below 70%
70%
80%
85%
90%
The number of units to be earned by a Named Executive Officer is determined as follows:
1)
The earned percentage in respect of Employee Engagement will be 0% for an Employee Engagement score below 70%.
2)
Except as provided in note 1), for each metric, (A) for attainment that falls between the Minimum Threshold and Target, the earned percentage will be determined by linear interpolation between the Minimum Threshold earned percentage and the Target earned percentage and (B) for attainment that falls between the Target and Cap levels, the earned percentage will be determined by linear interpolation between the Target earned percentage and Cap earned percentage.
3)
The percentage of 2023 PSUs earned for the 2023 Performance Period will not exceed 200% of the Target level, regardless of the degree of attainment of the Performance Metrics, and attainment in excess of the Maximum level for a performance metric results in an earned percentage corresponding to the Maximum level for such performance metric (for example, if the Company attains AEBITDA in excess of $153.0 million, the earned percentage in respect of AEBITDA will be capped at 200%).
For clarity, the calculations above are not cumulative, and the maximum achievement for each metric is 200% of the target award units.
Each unit granted pursuant to the 2023 PSU awards represents a contingent right to receive one share of our common stock for each unit that vests during the vesting period.
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Earning of 2023 PSU Awards for the 2023 Performance Period
On March 5, 2024, the Compensation Committee determined that our actual achievement with respect to the Company performance criteria for the Performance Period for the 2023 PSU was as follows:
Adjusted
EBITDA
Margin
Target
Level
Adjusted
EBITDA
Margin
Actual
Result
Payout
Percentage
for EBITDA
Margin (% of
payout for
target
level of
performance)
Adjusted
EBITDA
Target
Level (in
$ millions)
Adjusted
EBITDA
Actual
Result (in
$ millions)
Payout
Percentage
for Adjusted
EBITDA
Achievement
(% of payout
for target
level of
performance)
Engagement
Target (%)
Engagement
Actual
Result (%)
Payout
Percentage for
Engagement (%
of payout for
target level of
performance)
11%
11%
100%
$126.0M
$117.2M
65.1%
80%
81%
110%
The Compensation Committee determined that, based on our actual performance with respect to the above metrics, PSU awards related to the 2023 Performance Period were earned at 76.6% of the target level, with each Named Executive Officer earning the number of PSU awards set forth next to his name in the following table. Such earned PSU awards will vest and be settled for the number of shares of our common stock set forth next to each Named Executive Officer’s name on the dates shown in the table below, assuming the continued service of such Named Executive Officer on such vesting date:
Named Executive
Officer
Earned PSU
awards
(number of units)
Units Settled for
Shares of Our
Common Stock
3/11/2024
Mr. Heyman
74,162
74,162
Mr. Carlet
18,018
18,018
Mr. Hess
14,709
14,709
Each Named Executive Officer was required to be in continuous service with us as of March 11, 2024, in order for his PSUs to become earned. If their service terminated for any reason prior to March 11, 2024, all PSUs would be forfeited, unless accelerated or extended pursuant to a covered termination as described in the Executive Employment Agreements or the Post-Employment Compensation - Retirement Provisions, each as described further in this Compensation Discussion and Analysis below.
The equity awards granted to our Named Executive Officers in 2023 are set forth in this Proxy Statement in the “Summary Compensation Table” below.
Section 401(k) Plan
We maintain a tax-qualified retirement plan under Section 401(k) of the Internal Revenue Code (“Code”) for our employees aged 21 or older, including our executive officers, who satisfy certain eligibility requirements, including requirements relating to age and length of service. The plan provides them with an opportunity to contribute a portion of their annual earnings, up to the limits set by the Code, for retirement on a pre-tax or after-tax (Roth) basis. We intend for this plan to qualify under Sections 401(a) and 501(a) of the Code so that contributions by employees to the plan, and income earned on plan contributions, are not taxable to employees until distributed from the plan. In addition, all contributions are deductible by us when made.
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We make matching contributions to participating employees’ plan accounts equal to 100% of the first 3% of earnings that an employee elects to contribute, plus 50% of the next 3% of earnings that an employee elects to contribute, limited to the maximum annual amount as established by the Internal Revenue Service. Matching contributions are 100% vested when made.
We do not offer our employees a non-qualified deferred compensation plan or a defined benefit, pension, or similar plan.
Health and Welfare Benefits
We provide other benefits to our executive officers, including our Named Executive Officers, on the same basis as all our employees. These benefits include medical, dental, and vision insurance, disability insurance, life insurance, accidental death and dismemberment insurance, and health savings accounts and health and dependent care flexible spending accounts. We also provide vacation and other paid holidays to all employees, including our executive officers.
We design our employee benefits programs to be affordable and competitive in relation to the market, as well as compliant with applicable laws and practices. We adjust our employee benefits programs as needed based upon regular monitoring of applicable laws and practices, the competitive market, and our employees’ needs.
Perquisites and Other Personal Benefits
Except as described below, we do not view perquisites or other personal benefits as a significant component of our executive compensation program. Accordingly, we do not provide perquisites to our executive officers, including our Named Executive Officers, except in situations where we believe it is appropriate to assist an individual in the performance of his or her duties, to make our executive officers more efficient and effective, and for recruitment and retention purposes.
Under our Executive Product Beta Program, as a benefit and in order to provide improved developmental feedback on our solutions, our executive officers at the level of Executive Vice President and above who install and use our products in their primary residence are eligible to receive up to $25,000 in such products, valued at our cost, without charge, and we will reimburse the executive officer for up to $40,000 in integrator services and other costs. In addition, each year thereafter the executive officer is eligible to receive our beta products as available up to $7,500 in new products, valued at our cost, without charge, and we will reimburse the executive officer for up to $12,000 in integrator services and other costs; provided that every 5th year an executive officer participates in this program such executive officer may receive up to $15,000 in new products valued at our cost, without charge, and we will reimburse the executive officer for up to $25,000 to refresh the project. Upon an executive officer’s termination of employment, such executive officer is required to return or purchase at fair market value any product provided under this program in the twenty-four months prior to such termination of employment.
In addition, pursuant to his employment agreement, we are required to reimburse our CEO for his pro rata share of the maintenance and storage costs of a private airplane in which he owns a 25% interest and for the reasonable costs of travel on such airplane for business purposes and travel between his residence and our executive offices, up to an annual maximum of $250,000. There have been no such costs for fiscal year 2023.
In the future, we may provide perquisites or other personal benefits to our executive officers in limited circumstances, such as where we believe it is appropriate to assist an individual executive officer in the performance of his or her duties, to make our executive officers more efficient and effective, and for recruitment,
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motivation or retention purposes. We do not expect that these perquisites or other personal benefits will be a significant aspect of our executive compensation program. All future practices with respect to perquisites or other personal benefits will be approved and subject to periodic review by the Compensation Committee.
Executive Employment Arrangements
During 2023, we executed new employment agreements with each of our Named Executive Officers. For details regarding these arrangements, see “Summary Compensation Table — Executive Employments Agreements” herein.
Each of these Executive Employment Agreements provides for severance payments and benefits in the event of the termination of the Named Executive Officer’s employment under certain circumstances, as described below the section entitled “Post-Employment Compensation” in this Compensation Discussion and Analysis.
Post-Employment Compensation
Each of our Named Executive Officer’s current employment arrangements includes provisions pursuant to which they are eligible to receive certain post-employment compensation payments and benefits in the event their employment is terminated. These provisions are further described herein under “Termination and Change in Control Provisions — Severance.”
We do not reimburse our executives for excise tax payments (or “gross-ups”) relating to a change in control of the Company and have no such obligations in place with respect to any of our Named Executive Officers.
We believe that having in place reasonable and competitive post-employment compensation arrangements is essential to attracting and retaining highly qualified executive officers. The Compensation Committee does not consider the specific amounts payable under the post-employment compensation arrangements when determining the annual compensation for our Named Executive Officers. We do believe, however, these arrangements are necessary to offer compensation packages that are competitive.
Retirement Provisions
In September 2022, our Board adopted retirement guidelines for eligible employees, including our Named Executive Officers, who become eligible to retire at age 62 so long as: (i) they have been employed by us (inclusive of companies that we have acquired) for at least 10 years and remain in good standing with us and (ii) they give us at least six months’ written notice prior to their retirement date (a “Qualified Retirement”). As of the date hereof, none of the Named Executive Officers have met the conditions set forth in the definition of Qualified Retirement. Upon a Qualified Retirement, the eligible employee’s outstanding equity awards that were granted after November 1, 2022 and prior to the effective date of retirement may continue to vest in accordance with the following guidelines:
RSU awards and RSA awards will continue to vest in accordance with their respective vesting schedules as set forth in the applicable award agreement.
PSU awards related to Performance Periods that have already been completed by the retirement date will continue to vest in the amounts specified by the performance conditions achieved in accordance with the vesting schedule set forth in the applicable award agreement.
PSU awards related to Performance Periods that are ongoing at the time of the retirement date will be eligible to vest on a pro rata basis, so that the number of PSU awards that may vest will equal: (i) the total PSUs achieved in accordance with the actual achievement of the performance conditions multiplied by (ii) a
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percentage equal to the number of days the retiree was employed during the award’s applicable performance period divided by the total number of days in the award’s applicable performance period. The pro-rata number of PSUs calculated in accordance with the preceding sentence will vest in accordance with the vesting schedule set forth in the applicable award agreement.
PSU awards related to Performance Periods commencing after the date of retirement will expire.
“Performance Period” means the specific period of time during which a performance condition, or collection of related performance conditions, specified in applicable award agreement is measured.
Notwithstanding the above, Mr. Heyman’s employment agreement specifies that the retirement guidelines will not apply to equity awards held by Mr. Heyman until January 1, 2028.
Acceleration of Vesting upon Death or Disability
In February 2023, the Board amended its 2021 Equity Incentive Plan so that the vesting of all of a participant’s unvested equity awards issued pursuant to the 2021 Equity Incentive Plan will automatically accelerate upon death or Disability (as defined in the 2021 Equity Incentive Plan) of the participant.
For a summary of the material terms and conditions of the severance provisions, see “Termination and Change in Control Provisions” below.
Non-Interference Agreements
Each of our Named Executive Officers has entered into separate non-interference agreements, which subject them to the following restrictive covenants that apply during the terms of their employment and for one year thereafter: non-competition, employee and consultant non-solicitation, employee no-hire, and non-interference covenants (with the last such covenant prohibiting interference with the relationship between the Company and its business relations, such as current or prospective clients, customers, licensees, suppliers, and vendors). These non-interference agreements also include perpetual confidentiality, non-disparagement, and assignment of intellectual property covenants.
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Other Compensation Policies
Stock Ownership Policy
In 2021, our Board adopted mandatory stock ownership guidelines for our CEO, other executive officers and Non-Employee Directors receiving compensation for their services as a director (“Guideline Participants”). These guidelines are intended to align the interests of our Guideline Participants with those of our stockholders by requiring them to acquire and maintain a meaningful equity stake in the Company.
These guidelines are based on the individual holding shares of our common stock with a value equal to a multiple of his or her annual base salary or annual cash retainer, as follows:
Leadership Position
Market Value of Shares
Chief Executive Officer
6x annual base salary
Executive Direct Reports of our CEO
3x annual base salary
Other Executive Vice Presidents
1.5x annual base salary
Non-Employee Directors
5x annual cash retainer (excluding any committee retainers)
For purposes of this calculation, stock ownership includes: (i) vested and unvested shares of common stock owned directly, including restricted shares and shares deliverable upon settlement of restricted or unrestricted stock units, excluding restricted shares or restricted stock units that remain subject to achievement of performance goals, such as performance share units; and (ii) shares of our common stock owned indirectly if the Guideline Participant has an economic interest in the shares (which includes shares beneficially owned for purposes of the Exchange Act). Stock ownership does not include shares underlying stock options, except to the extent expressly provided in the guidelines. Each Guideline Participant is expected to satisfy these stock guidelines within five years of becoming subject to the guidelines, and the Named Executive Officers are already meeting these guidelines.
At any time when a Guideline Participant has not met the stock ownership guidelines applicable to such Guideline Participant as set forth above, such participant will be expected to retain not less than 50% of the “net shares” they receive from equity-based awards granted by us upon vesting or exercise.
Compensation Recovery Policy
Snap One adopted a formal compensation recovery (“clawback”) policy called the Incentive Compensation Clawback Policy. For purposes of this policy, “incentive compensation” means annual performance bonuses and long-term incentive awards (in each case, including but not limited to cash, stock options, stock appreciation rights, restricted stock, restricted stock units, performance share units, or other equity-based awards) paid, granted, vested, settled, or accrued.
Pursuant to our Incentive Compensation Clawback Policy, if the Compensation Committee determines, in its discretion, that incentive compensation of a current or former officer (“Covered Employee”) was overpaid as a result of a restatement of the Company’s reported financial results due to material non-compliance with financial reporting requirements (unless due to a change in accounting policy or law) caused by the Covered Employee’s fraud, willful misconduct, or gross negligence, the Compensation Committee will review the incentive compensation paid based on the prior inaccurate results. Then, to the extent practicable, the Compensation Committee will
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determine whether to seek to recover or cancel the difference between: (i) any incentive compensation paid or granted based on the belief that the Company had met or exceeded performance targets that would not have been met had the financial information been accurate, and (ii) the incentive compensation in which the Covered Employee would have been paid based on the accurate financial information or restated results, as applicable.
In November 2023, our Board adopted an additional Nasdaq-Compliant Incentive Compensation Clawback Policy that meets the Nasdaq standard that complies with Exchange Act Rule 10D-1. This policy includes the mandatory clawback of overpayment of incentive-based compensation, regardless of executive knowledge or misconduct, where we are required to prepare an accounting restatement that corrects a material error in previously issued financial statements or would result in a material misstatement if the error was corrected in the current period or left uncorrected.
Executive Officer Biographies
Named Executive Officers
Our principal executive officer and our two other most highly compensated executive officers as of December 29, 2023 for services rendered for fiscal year 2023, our Named Executive Officers, include John Heyman, Chief Executive Officer; Michael Carlet, Chief Financial Officer; and GPaul Hess, Chief Product Officer.
John Heyman
 
Mike Carlet
 
GPaul Hess

 

 

Chief Executive Officer
 
Chief Finance Officer
 
Chief Product Officer
John Heyman, Chief Executive Officer, Director, 62
See Mr. Heyman’s full biography in the “Governance — Board of Directors” section above.
Michael Carlet, Chief Financial Officer, 56
Michael Carlet has served as our Chief Financial Officer since 2014. Prior to joining Snap One, Mr. Carlet served as Chief Operating Officer and Chief Financial Officer of the automotive division of Sears Holdings from 2013 to 2014. Prior to Sears, Mr. Carlet spent over 15 years with Driven Brands, Inc., the parent company of Meineke Car Care Centers, Inc., Maaco Franchising, Inc. and other automotive franchise brands, where he served as Chief Financial Officer from 2002 to 2013 and as Controller from 1997 to 2000. He began his career in public accounting with Ernst & Young Global Ltd. Mr. Carlet received his BA in Accounting from the Catholic University of America, and his MBA from Wake Forest University School of Business.
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GPaul Hess, Chief Product Officer, 50
GPaul Hess has served as our Chief Product Officer since November 2020, and has held senior positions in product development, product management and marketing since joining Snap One in 2010. Prior to Snap One, Mr. Hess held regional and national sales roles for ELAN Home Systems, now part of Nice S.p.A., a residential control and audio-video manufacturer, from 2003 to 2010. Prior to ELAN, Mr. Hess worked in audiovisual retail sales before transitioning to co-ownership of a smart-home dealership focused on upscale and estate smart-home projects. Mr. Hess received his BS in Business Administration and International Marketing from the University of Louisville.
Other Executive Officers
Kathleen Creech
 
Jeff Dungan
 
JD Ellis
 
Ryan Marsh

 

 

 

Chief People Officer
 
Chief Operations Officer
 
Chief Legal Officer
 
Chief Revenue Officer
Kathleen Creech, Chief People Officer, 54
Kathleen Creech joined Snap One in July 2021 as the Chief People Officer where she leads the design and delivery of Snap One’s people strategy. Prior to joining Snap One, Ms. Creech was Chief People Officer at Manhattan Associates, Inc. from July 2018 to July 2021 and held various HR leadership roles at NCR Corporation from 2012 to 2018, both B2B technology companies. Prior to NCR Corporation, from 2001-2011, Ms. Creech served as an Actuarial Consultant with Northern Trust Retirement Consulting LLC and from 2001-2011 was a Senior Consultant with Willis Towers Watson US LLC. Ms. Creech has a BA in Mathematics from Vanderbilt University.
Jefferson Dungan, Chief Operations Officer, 54
Jefferson Dungan has served as our Chief Operations Officer since August 2019. Prior to joining Snap One, Mr. Dungan held senior leadership positions at Control4 Corporation, including roles in business development, M&A, product marketing, and IT beginning in 2006, most recently serving as Senior Vice President, Operations and Business development until August 2019. Prior to Control4, Mr. Dungan served as the Senior Director at BEA Systems, Inc. and held senior leadership roles at Hewlett-Packard and Celestica, Inc. Mr. Dungan received his BS in Computer and Electrical Engineering from Colorado State University.
JD Ellis, Chief Legal Officer, 44
JD Ellis has served as our Chief Legal Officer since August 2019 and led our Human Resources department from February 2020 to June 2021. Prior to joining Snap One, Mr. Ellis worked at Control4 Corporation from 2010 to August 2019, including as General Counsel and head of Human Resources from April 2018 to August 2019 and as Associate General Counsel from 2010 to March 2018. Prior to Control4, Mr. Ellis served as in-house legal counsel to Ivanti (formerly LANDesk Software) from 2007 through the company’s acquisition by Emerson Electric Co. in 2010. Mr. Ellis received his BS in Economics from Brigham Young University and his JD from Georgetown University.
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Ryan Marsh, Chief Revenue Officer, 47
Ryan Marsh has served as our Chief Revenue Officer since December 2023, and was the Executive VP of Global Sales for Snap One from June 2020 to December 2023. Mr. Marsh was the Chief Growth and Innovation Officer for American Tire Distributors from September 2017 to June 2019, held senior leadership roles include being Senior Vice President at Red Ventures from 2014 to June 2017. Prior to Red Ventures, Mr. Marsh held senior sales roles at The Coca-Cola Company from 2010 to 2013, and was an Engagement Manager at McKinsey & Company from 2006-2009. Mr. Marsh received his BS in Business from Wake Forest University, and his MBA from the University of North Carolina at Chapel Hill.
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Summary Compensation Table
The following table provides summary information concerning compensation earned by NEOs for services rendered in the fiscal year 2023, ended December 29, 2023, and fiscal year 2022.
2023 Summary Compensation Table
Name and Principal
Position
Fiscal
Year
Salary
($)[1]
Stock
Awards
($)[2]
Non-Equity
Incentive Plan
Compensation
[3]
All Other
Compensation
($)[4]
Total
($)
John Heyman
2023
$735,000
$5,567,709
$598,106
$64,024
$6,964,840
Chief Executive Officer
2022
$735,000
$3,732,027
$305,025
$75,823
$4,847,874
Michael Carlet
2023
$415,000
$1,596,180
$216,132
$20,971
$2,248,283
Chief Financial Officer
2022
$400,000
$1,175,877
$124,500
$29,511
$1,729,888
GPaul Hess
2023
$385,000
$1,394,218
$200,508
$33,834
$2,013,560
Chief Product Officer
[1]
The amounts reported represent the NEO’s base salary earned during the applicable fiscal year.
[2]
This column reflects the aggregate grant date fair value computed in accordance with FASB ASC Topic 718 for RSUs and the award date fair value for PSUs, and not the amount that will ultimately be realized by the Named Executive Officer once such awards are earned and vested. The award date fair value of the PSUs was calculated based on the Company’s closing stock price on the award date and assumes that all PSUs based on the target level of performance will be earned during the term of the award.
[3]
The amounts reported in this column represent the bonus amount earned by the Named Executive Officer under the Company’s Annual Incentive Plan for the applicable fiscal year.
[4]
For Mr. Heyman, amounts reported include Additional Payments in lieu of TRA participation as described herein, matching contributions to the Company’s 401(k) plan, reimbursement for equipment, integrator services and other costs in connection with the installation of Company products in his primary residence; for Mr. Carlet, amounts reported include Additional Payments in lieu of TRA participation as described herein, and matching contributions to the Company’s 401(k) plan. For Mr. Hess amounts reported include Additional Payments in lieu of TRA participation as described herein, matching contributions to the Company’s 401(k) plan, and reimbursement for equipment, integrator services, and other costs in connection with the installation of Company products in his primary residence.
Certain pre-IPO owners, including the Named Executive Officers, received cash payments for their interest in lieu of their participation in the Tax Receivable Agreement (“TRA”) that we entered into with certain of our pre-IPO owners in connection with the IPO. These cash payments have been included as compensation expense. See further description of the TRA herein under “Related Party Agreements and Transactions — Tax Receivable Agreement.”
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Executive Employment Agreements
In July 2023, the Board approved and our executive officers, including our Named Executive Officers, entered into employment agreements outlining the terms of their continued employment.
John Heyman Employment Agreement
We entered into an employment agreement with Mr. Heyman pursuant to which Mr. Heyman serves as our Chief Executive Officer, reporting to our Board. Mr. Heyman’s agreement provides for a base salary fixed by our Board of $735,000 and eligibility to receive an annual bonus under the Company’s Annual Incentive Plan, as determined at the sole discretion of our Board. Mr. Heyman’s employment agreement provided for a target annual bonus opportunity equal to 125% of base salary. For additional information with respect to Mr. Heyman’s annual bonus opportunity for 2023, see “Annual Cash Bonuses” in the Compensation Discussion and Analysis herein. Mr. Heyman’s employment agreement also provides that Mr. Heyman is entitled to be reimbursed for his pro rata share of the maintenance and storage costs of a private airplane used for business travel between his residence and the Company’s executive offices, subject to an annual cap of $250,000. See “Perquisites and Other Benefits” in the Compensation Discussion and Analysis for additional details on Mr. Heyman’s perquisites. Mr. Heyman’s agreement provides for severance benefits in the event of termination of his employment in certain cases, as described below under “Termination and Change in Control Provisions — Severance.”
Michael Carlet Employment Agreement
We entered into an employment agreement with Mr. Carlet pursuant to which Mr. Carlet serves as our Chief Financial Officer. Mr. Carlet’s agreement provides for a base salary fixed by our Board of $415,000 with eligibility to receive an annual bonus with an initial target bonus opportunity of 80% of base salary subject to change each year based on Board discretion. For additional information with respect to Mr. Carlet’s annual bonus opportunity for 2023, see “Annual Cash Bonuses” in the Compensation Discussion and Analysis. Mr. Carlet’s agreement also provides for severance benefits in the event of termination of his employment under certain circumstances, as described below under “Termination and Change in Control Provisions — Severance.”
GPaul Hess Employment Agreement
We entered into an employment agreement with Mr. Hess pursuant to which Mr. Hess serves as our Chief Product Officer. Mr. Hess’ agreement provides for a base salary fixed by our Board of $385,000 with eligibility to receive an annual bonus with an initial target bonus opportunity of 80% of base salary subject to change each year based on Board discretion. For additional information with respect to Mr. Hess’ annual bonus opportunity for 2023, see “Annual Cash Bonuses” in the Compensation Discussion and Analysis. Mr. Hess’ agreement also provides for severance benefits in the event of termination of his employment under certain circumstances, as described below under “Termination and Change in Control Provisions — Severance.”
Non-Interference Agreements
Each of Messrs. Heyman, Carlet, and Hess also entered into separate non-interference agreements, the material terms and conditions of which are summarized in the Compensation Discussion and Analysis above under the heading “Compensation Philosophy and Strategy Non-Interference Agreements.
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Outstanding Equity Awards Table
The following table provides information regarding outstanding equity awards made to our Named Executive Officers as of the end of fiscal year 2023.
 
 
Option Awards
Stock Awards
Name
Grant
Date
Number of
Shares
underlying
unexercised
options (#)
unexercisable
Number of
Shares
underlying
unexercised
options (#)
Exercisable
Equity
Incentive
Plan
Awards:
Number of
Shares
underlying
unearned
options
(#)
Option
exercise
Price
($)
Options
expiration
Date
Number
of
Shares
or
Units of
Stock
That
Have
Not
Vested
(#)
Market
Value of
Shares
or
Units of
Stock
that
Have
Not
Vested
($)
Equity
Incentive
Plan
Awards:
Number
of
Unearned
Shares,
Units or
Other
Rights
That
Have
Not
Vested
(#)
Equity
Incentive
Plan
Awards:
Market or
Payout
Value of
Unearned
Shares,
Units or
Other
Rights
That
Have
Not
Vested
($)
Notes
John Heyman, CEO
10/23/2017
395,916
$3,527,612
[1]
8/28/2019
5,492
$48,934
[2]
8/28/2019
19,395
$172,809
[1]
7/27/2021
721,223
$18
10/23/2027
[3]
7/27/2021
19,460
77,840
$18
8/1/2029
[3]
7/27/2021
506,121
$18
10/23/2027
[4]
7/27/2021
68,728
$18
8/1/2029
[4]
2/15/2022
51,303
$457,110
[5]
2/15/2022
31,011
$276,308
[5]
2/15/2023
201,836
$1,798,359
[6]
2/15/2023
290,446
$2,587,874
[6]
Mike Carlet, CFO
10/23/2017
118,775
$1,058,285
[1]
8/28/2019
2,180
$19,424
[2]
8/28/2019
10,896
$97,083
[1]
7/27/2021
221,429
$18
10/23/2027
[3]
7/27/2021
7,723
30,889
$18
8/1/2029
[3]
7/27/2021
151,837
$18
10/23/2027
[4]
7/27/2021
38,612
$18
8/1/2029
[4]
2/15/2022