Summary Compensation Table
The following table sets forth certain information regarding the compensation of our named executive officers for services rendered in all capacities to Arlo for the years indicated.
| Matthew McRae
Chief Executive Officer | | | 2022 | | | $790,000 | | | $13,818,702 | | | $790,000 | | | $7,248 | | | $15,405,950 | |
| 2021 | | | $750,000 | | | $8,954,297 | | | $750,000 | | | $3,726 | | | $10,458,023 | |
| Kurtis Binder
Chief Financial Officer | | | 2022 | | | $134,615 | | | $7,020,000 | | | $94,231 | | | $2,040 | | | $7,250,886 | |
| Brian Busse
General Counsel | | | 2022 | | | $390,000 | | | $1,831,497 | | | $195,000 | | | $26,494 | | | $2,442,991 | |
| 2021 | | | $350,000 | | | $715,821 | | | $175,000 | | | $2,452 | | | $1,243,273 | |
| Gordon Mattingly(6)
Former Chief Financial Officer | | | 2022 | | | $438,462 | | | $2,712,351 | | | $— | | | $2,933 | | | $3,153,746 | |
| 2021 | | | $383,000 | | | $1,486,717 | | | $268,100 | | | $2,526 | | | $2,140,343 | |
(1)
| Mr. Binder joined the Company as Chief Financial Officer, effective September 26, 2022. Refer to the “Annual Base Salary” section below for his annual base salary. Mr. Binder’s salary in the table above reflects a partial year of service. |
(2)
| The amounts reported in this column represent the aggregate grant date fair value of the RSUs, CB PSUs, CPS PSUs, TSR MPSUs, and the CEO MPSUs (each as defined below under “Equity-Based Incentives”) granted to our named executive officers as determined in accordance with the share-based payment accounting guidance under FASB ASC 718 (without regard to estimates of forfeitures). |
The grant date fair value of the RSUs reflected in the table above was $1,526,873, $3,510,000 and $523,503 for Messrs. McRae, Binder and Busse, respectively.
The grant date fair value of the CB PSUs reflected in the table above is based on the probable outcome of the applicable performance conditions, as determined under FASB ASC 718, which was $763,441 and $261,747 for Messrs. McRae and Busse, respectively. The maximum number of CB PSUs that the named executive officers can earn is 120% of the target number of the CB PSUs. The corresponding grant date fair value of such CB PSUs, calculated assuming achievement of the maximum level of performance under the applicable performance conditions, would be $916,129 and $314,097 for Messrs. McRae and Busse, respectively.
The grant date fair value of the CPS PSUs reflected in the table above is based on the probable outcome of the applicable performance conditions, as determined under FASB ASC 718, which was $6,590,000, $3,510,000, and $659,000 for Messrs. McRae, Binder, and Busse, respectively. The grant date fair value of the CPS PSUs, calculated assuming achievement of the maximum level of performance was $19,770,000, $3,510,000 and $1,977,000 for Messrs. McRae, Binder and Busse, respectively.
The grant date fair value of the TSR MPSUs reflected in the table above is calculated using a Monte Carlo simulation model based on the probability of achieving the market-based performance goals, as determined under FASB ASC 718, which was $1,129,475 and $387,247 for Messrs. McRae and Busse, respectively. The maximum number of TSR MPSUs that the named executive officers can earn is 200% of the target number of the TSR MPSUs. The corresponding grant date fair value of the TSR MPSUs, calculating assuming achievement of the maximum level of performance under the applicable performance conditions would be $2,258,949 and $774,494 for Messrs. McRae and Busse, respectively.
The grant date fair value of the CEO MPSUs reflected in the table above is calculated using a Monte Carlo simulation model based on the probability of achieving the market-based performance goals, as determined under FASB ASC 718, which was $3,808,913, and the grant date fair value of the CEO MPSUs, calculated assuming achievement of the maximum level of performance was $3,808,913.
Refer to Note 2 in the Notes to Consolidated Financial Statements in Item 8 of Part II of the Annual Report for the assumptions used to estimate fair value at the grant date and the “Equity-Based Incentive” section below for details about the CB PSUs, CPS PSUs, TSR MPSUs and CEO MPSUs grants.
(3)
| The amount for 2022 represents amounts earned under our 2022 executive bonus plan, which were paid in the form of fully-vested RSUs in March 2023. Each of Messrs. McRae, Binder and Busse have a target bonus equal to 100%, 70%, and 50% of their respective annual base salary (prorated for Mr. Binder based on his employment commencement date). |
(4)
| Includes matching contributions under Arlo’s 401(k) plan ($2,000 for each of Messrs. McRae and Busse). Refer to the “401(k) Plan” section below for more details. |
(5)
| Mr. Busse received a reward of $22,802 for years of service in 2022. Refer to the “Perquisites Health, Welfare and Retirement Benefits” section below for more details. |
(6)
| Mr. Mattingly resigned in September 2022, at which time he forfeited equity awards valued at $2,450,895. |
Compensation Program Overview
Our compensation program for executive officers is designed to encourage our management team to achieve our short-term and long-term corporate objectives while effectively managing business risks and challenges. We provide what we believe is a competitive total compensation package to our management team through a combination of base salary, an annual performance-based bonus and long-term equity-based incentives.
The compensation of our named executive officers, including our chief executive officer, is generally reviewed and approved by our Compensation and Human Capital Committee on an annual basis.