PayPal Holdings Inc

This advisory proposal asks shareholders to approve the company’s disclosed compensation for its named executive officers for 2025, as described in the CD&A and compensation tables. Management seeks an advisory endorsement to validate its pay-for-performance philosophy and to signal stockholder support for the structure, targets and outcomes of its annual and long-term incentives. The Compensation Committee highlights that a majority of NEO pay is performance-based (AIP and PBRSUs), that metrics align with profitable growth (transaction margin dollars and non-GAAP operating income) and that the company engages in robust stockholder outreach. While advisory and non-binding, a favorable vote informs future compensation decisions and provides feedback to the Compensation Committee; historically PayPal received strong say-on-pay support. Key governance features include an independent compensation consultant, clawback and stock ownership policies, and inclusion of stock-based compensation in non-GAAP metrics. Potential shareholder concerns can include absolute pay levels, equity dilution from LTI programs, and the structure of CEO transition awards; management addresses these by emphasizing rigorous performance metrics, a disciplined equity usage/repurchase program, and multi-year performance vesting. A sophisticated evaluation should weigh the rigor of targets, the degree of realized payout given actual performance, pay alignment across executives, and dilution mitigation via repurchases and narrowed eligibility. Given PayPal’s competitive labor market at the intersection of technology and financial services, management argues that the program is necessary to attract and retain key talent while aligning long-term incentives with stockholder returns. The Board recommends a vote FOR based on alignment, governance protections, and market competitiveness.

This management proposal asks stockholders to approve a new equity plan that would provide up to 39,100,000 new shares for equity compensation grants (in addition to recycled shares under the prior plan) and serve as the successor source of equity awards after approval. Management says the increase (15 million new shares above projected remaining 2015 plan availability) is needed to support compensation across a broad but strategically narrowed employee base, particularly given PayPal’s technology-heavy workforce and competition for talent from both tech and financial peers. The Compensation Committee cites a three-year average gross burn of ~2.3% and a history of substantial share repurchases that have materially offset dilution, and highlights governance protections built into the plan including minimum one-year vesting (with a limited 5% carve-out), no repricing without shareholder approval, performance-based awards, limited director award caps, and clawback provisions. The company also emphasizes steps taken to reduce equity usage (narrowed eligibility, cash bonuses instead of equity for AIP, inclusion of stock-based compensation in non-GAAP metrics) and its plan to seek frequent stockholder input. Critics may focus on the requested share size relative to outstanding shares and recent share-price volatility; management frames the request as calibrated to cover the remainder of 2026 and early 2027 and to remain competitive in its labor market. The Board recommends FOR because it views the plan as essential to attract and retain talent, align employees with stockholders, and preserve flexibility to execute compensation programs while maintaining anti-dilution practices and strong governance safeguards. Analysts assessing the proposal should weigh the requested share pool against historical usage, repurchase offsets, the company’s talent needs and the plan’s built-in governance protections.

The proponent contends PayPal’s mission requires access for people in conflict zones and cites alleged examples (Palestine) where customers lack access despite other providers and Treasury guidance permitting transactions with private parties; the proposal demands a policy to prevent discriminatory exclusion or, failing that, an economic impact evaluation. Management counters that market entry decisions and product scope must reflect regulatory, compliance, partner and commercial considerations and that its existing disciplined process—assessing demand, compliance, risk, required partnerships and financial impact—is the appropriate mechanism for evaluating such markets. The company emphasizes it already serves over 200 markets and that product availability varies by market based on feasibility and risk, not arbitrary exclusion. For analysts, material considerations include the legal and sanctions landscape for the specific jurisdictions cited, the operational and compliance costs of offering services, counterparties and partner availability (e.g., local banking rails), reputational risk, and the potential addressable market opportunity and financial returns. The proponent frames the issue as both humanitarian and commercial growth opportunity; management frames it as a risk-managed commercial decision. The debate implicates AML/sanctions compliance, OFAC/Treasury guidance, partnerships (card networks, banks, PSPs), and the company’s ability to safely scale services in complex jurisdictions. Given these trade-offs, the Board recommends AGAINST, believing the requested single-policy mandate is overly prescriptive and could conflict with regulatory and risk management obligations while the company retains discretion to evaluate markets case-by-case.