Upwork Inc

This management proposal requests a non-binding advisory approval of the company’s named executive officer (NEO) compensation as disclosed in the Proxy Statement. Management and the compensation committee are seeking shareholder endorsement to confirm that their pay structure—composed of base salary, a performance-weighted annual cash bonus (2025 weighting: adjusted EBITDA 75%, revenue 25%), and a long-term equity mix emphasizing PSUs tied to adjusted EBITDA margin with a TSR multiplier—is aligned with stockholder interests. The 2025 program increased the CEO’s long-term award exposure (60% PSUs) and expanded target compensation for select NEOs as an investment in retention and execution of strategy; the committee indicates these changes are not intended to establish a new baseline and will be reviewed annually. The board highlights that a significant portion of total target pay is at risk (97% for the CEO; ~88% for other NEOs), demonstrating a pay-for-performance design. The Say-on-Pay vote is advisory and non-binding, but the board and compensation committee state they will consider the outcome when setting future pay; the company previously achieved high support (~94%) on its 2025 Say-on-Pay. Key governance features—independent committee oversight, independent compensation consultant, clawback policy, stock ownership guidelines, and a “no single-trigger” change-in-control policy—are cited to reinforce the board’s recommendation. Potential controversies include increased 2025 executive pay levels and the use of multi-year PSU targets plus a relative TSR multiplier; proponents of shareholder oversight may evaluate whether those elements adequately align pay with sustained long-term stockholder returns. The committee argues that the mix of metrics (profitability and TSR) and multi-year performance periods mitigate short-termism while incentivizing durable profitable growth. Institutional investors will likely view this proposal through the lens of demonstrated operating performance (record revenue, adjusted EBITDA, and return to GSV growth in 2025) versus dilution and compensation levels, and the board’s stated willingness to engage with stockholders on compensation design reduces governance risk.

This proposal asks shareholders, on a non-binding advisory basis, to indicate their preferred frequency—one, two, or three years—for future Say-on-Pay votes. Management recommends an annual vote (ONE YEAR), arguing that yearly advisory votes provide stockholders with more timely and meaningful input on current executive compensation practices and facilitate ongoing engagement. The advisory nature means the board retains discretion, but it typically gives weight to the plurality result when setting policy. Key context: Upwork has historically held annual Say-on-Pay votes and the board cites prior stockholder engagement and recent compensation program changes (multi-year PSUs, adjusted EBITDA weighting, TSR multipliers) as reasons to seek annual feedback. The decision balances administrative burden and potential volatility in proxy-season outcomes against the benefits of frequent, up-to-date stockholder signals on pay practices. A one-year frequency increases responsiveness to stockholder concerns and allows management to adapt compensation decisions quickly to performance or governance developments; conversely, it can amplify short-term reactions and require more frequent investor outreach. Institutional investors often prefer annual votes for quicker recourse, while some large investors favor triennial votes to reduce voting fatigue; this proposal’s outcome will signal investor tolerance for the company’s current compensation approach. Because the vote is advisory, the company will consider the result alongside qualitative engagement when determining its final policy.