The compensation clause outlines the payment terms agreed upon between the parties involved in a contract, specifying the amount, schedule, and method of payment for services rendered or work completed. It ensures transparency and sets expectations regarding financial responsibilities and obligations.
In the event that the compensation to be paid to any Office Holder pursuant to the Compensation Policy in a given year exceeds, by less than ten percent (10%), the applicable percentage or amount otherwise stated herein as an annual limit for such Office Holder, this Compensation Policy will be deemed amended for the mere sake of increasing the applicable compensation limit for such Office Holder, so that the compensation to be paid will not be deemed a deviation from the terms of this Compensation Policy.
In accordance with our Compensation Policy, our compensation committee and board of directors reviewed a survey of compensation terms for Chief Data Scientists compiled by an independent compensation advisor, Compensia, in January 2023, consisting of the Radford Technology Survey of U.S. Software Companies with Revenues between $200,000,000 and $500,000,000. Because there was no relevant market data for a chief data scientist in the surveys, Compensia derived market data for this position using an average of the market data for JFrog’s other non-CEO executives from the Radford survey listed above. According to such survey, Mr. Simon’s total compensation approximated the 20th percentile.
Base Salaries – As part of the annual review of our executive compensation program, our compensation committee and board of directors approved a base salary increase for each of our Named Executive Officers in February 2022 of approximately 11.11% with respect to Mr. Ben Haim, 15.00% with respect to Ms. Notman, 7.98% with respect to Mr. Shulman and 4.87% with respect to Mr. Landman, effective as of April 1, 2022 with the exception for our Named Executive Officers who also serve as a director, which were subject to shareholder approval and implemented after such shareholder approval with retroactive effect to April 1, 2022.
Long-Term Incentive Compensation of Named Executive Officers – As part of the annual review of our executive compensation program, granted long-term incentive compensation in the form of restricted stock unit (“RSU”) awards that may be settled for ordinary shares to each of our Named Executive Officers with aggregate grant date fair values of approximately $3.05 million with respect to Mr. Ben Haim, $2.99 million with respect to Ms. Notman, $2.24 million with respect to Mr. Shulman, and $1.46 million with respect to Mr. Landman. The RSU awards granted to Messrs. Ben Haim and Landman were approved by the compensation committee and the board of directors in February 2022 and took effect in May 2022 following approval by our shareholders pursuant to the Companies Law. The RSU awards granted to Ms. Notman and Mr. Shulman were approved by the compensation committee and the board of directors and took effect in February 2022. The compensation committee and the board of directors determined the size of each Named Executive Officer’s RSU awards based on consideration of the equity grant practices of the Company’s compensation peer group, as well as internal parity, scope and complexity of roles, experience, qualifications, skills and individual performance.
Under the Compensation System 2020+, the Supervisory Board is entitled to withhold or reclaim variable compensation components in cases of a Management Board member’s misconduct or non-compliance with his or her duties or internal Company guidelines, considering the characteristics of the individual case. Within this framework, the Supervisory Board ensures that contractual provisions are in place determining detailed requirements for withholding or reclaiming variable compensation components and setting forth the consequences thereof, including the forfeiture, in full or in part, of all or some variable compensation components.
The annual compensation that Mr. Valle is entitled to receive for the post-contractual non-competition clause amounts to $825 THOUS (€763 THOUS) and is to be offset against his severance payments. The short-term and long-term incentives allocated to Mr. Valle until the end of the Fiscal Year are exercisable and payable in accordance with the respective plan terms and the targets and due dates agreed therein. For the period from January 1, 2024, Mr. Valle will not receive any further allocations of short-term or long-term incentives. Mr. Valle is entitled to a pension from age 65 in accordance with the pension commitment described above. The payment of the pension is reduced to the extent the aforementioned compensation for the post-contractual non-competition period is to be paid. The above agreements are in line with the applicable Compensation System 2020+ and the relevant recommendations of the GCGC.
“Incentive-Based Compensation” means any compensation that is granted, earned, or vested based wholly or in part upon the attainment of a financial reporting measure, including, but not limited to: (i) non-equity incentive plan awards that are earned solely or in part by satisfying a financial reporting measure performance goal; (ii) bonuses paid from a bonus pool, where the size of the pool is determined solely or in part by satisfying a financial reporting measure performance goal; (iii) other cash awards based on satisfaction of a financial reporting measure performance goal; (iv) restricted stock, restricted stock units, stock options, stock appreciation rights, performance share units and deferred stock that are granted or vest solely or in part on satisfying a financial reporting measure performance goal; and (v) proceeds from the sale of shares acquired through an incentive plan that were granted or vested solely or in part on satisfying a
financial reporting measure performance goal. Compensation that would not be considered Incentive-Based Compensation includes, but is not limited to: (a) salaries; (b) Time-Based Compensation (which is defined and separately addressed below); (c) bonuses paid solely on satisfying subjective standards, such as demonstrating leadership, and/or completion of a specified employment period; (d) non-equity incentive plan awards earned solely on satisfying strategic or operational measures; and (e) discretionary bonuses or other compensation that is not paid from a bonus pool that is determined by satisfying a financial reporting measure performance goal.
“Time-Based Compensation” means any equity-based compensation that is subject to vesting based solely on continued employment or service.
"Covered Compensation” means, collectively, Incentive-Based Compensation; Time- Based Compensation; incentive compensation based on operational, strategic, or qualitative measures; and compensation paid as consideration for agreement to restrictive covenants.
Compensation refers to the total monetary and non-monetary benefits that employees receive in exchange for their work. It includes salaries, wages, bonuses, benefits, perks, and other forms of financial rewards. It is a critical part of employment agreements and plays a significant role in attracting, motivating, and retaining employees.
You should consider compensation in several situations:
When writing compensation, be clear, precise, and comprehensive. Consider the following elements:
Example:
“The employee’s compensation package includes an annual salary of $70,000, eligibility for a performance-based bonus, and benefits including health insurance and a 401(k) plan with employer matching.”
Compensation details are typically included in several types of contracts, such as:
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A confidentiality clause is a provision in a contract that obligates one or both parties to keep certain information confidential and not to disclose it to third parties without prior consent. This clause is designed to protect sensitive information such as trade secrets, business strategies, and proprietary data shared during the course of the contractual relationship.
The confidentiality clause ensures that all documents and information exchanged between parties remain private and are not disclosed to unauthorized individuals or entities. This clause obligates the parties to implement appropriate measures to safeguard sensitive data, thereby protecting proprietary and personal information from unintended exposure or misuse.
The Consequences of Breach clause outlines the measures and penalties that will be imposed if one party fails to fulfill their contractual obligations. It typically includes remedies such as damages, specific performance, or termination, thereby serving as a deterrent and providing recourse to the non-breaching party.
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