Upwork Inc. (UPWK) Earnings Call Transcript & Summary

Good morning, and welcome to the Upwork Inc. 2020 Annual Meeting of Stockholders. Please note that this event is being webcast. I would now like to turn the conference over to Hayden Brown. Ms. Brown, please go ahead.

Thank you. Good morning, everyone. Welcome, and thanks for joining us for Upwork's 2020 Annual Meeting of Stockholders. I'm Hayden Brown, President and Chief Executive Officer of Upwork. I will act as the Chair of this annual meeting and now call the meeting to order. We are excited to be hosting our annual meeting virtually, with our stockholders attending via our web meeting portal. Through this online platform, we believe we are able to increase stockholder participation and reach a greater number of our stockholders. We also believe that our virtual stockholder meeting provides greater access and a safer form in light of the ongoing COVID-19 pandemic. In addition to myself, I'd like to introduce the other Board members who are on the call today: Thomas Layton, Upwork's Chairman of the Board; Gregory Gretsch; Kevin Harvey; Daniel Marriott; Elizabeth Nelson; Leela Srinivasan; and Gary Steele. And other members of Upwork's senior leadership team participating in today's meeting are: Brian Kinion, Chief Financial Officer; Eric Gilpin, Senior Vice President, Sales; Lars Asbjornsen, Senior Vice President, Marketing; Zoë Harte, Senior Vice President, Human Resources and Talent Innovation; Matt McDonald, Senior Vice President, Engineering; Jessica Tiwari, Senior Vice President, Product and Design; Amanda Vinson, Senior Vice President, Corporate Strategy and Development; and Brian Levey, Chief Business Affairs and Legal Officer and Secretary. At this time, I would like to introduce Brian Levey, our Chief Business Affairs and Legal Officer and Secretary, who will act as Secretary of this annual meeting and keep the minutes. Brian will now begin the formal matters to be discussed at this evening.

Thanks, Hayden. I'm advised by the Inspector of Election that over a majority of the voting power of our outstanding common stock entitled to vote at this meeting is present or represented by proxy here today, and that a quorum is therefore present. We will soon describe the proposals that are to be voted at this meeting. Polls are now open for voting. The voting today is by proxy and electronic ballot. Any stockholder who has not voted or wishes to change their vote may do so by clicking on the vote button on the webcast portal and following the instructions there. Stockholders who have sent in proxies or previously voted via the Internet or by phone and who do not wish to change their vote do not need to take further action. Their votes will be counted automatically. We expect to close the polls approximately 1 minute after the presentation of matters to be voted upon at the meeting and the Q&A session. We will answer questions regarding matters to be voted upon at the meeting after all matters have been presented as appropriate. Stockholders are limited to 1 question each. Though we may not be able to answer every single relevant question, we will do our best to respond to as many as possible in the time permitted. The time permitted for the Q&A session will be limited to 10 minutes. Please note that stockholders who desire to ask a question may do so by presenting the question in writing where indicated on the webcast portal for this meeting. Only stockholders will be permitted to present questions, and you must have your 16 digit control number to do so. This meeting is being recorded. However, no one attending via the webcast is permitted to use any audio recording device. A webcast playback will be available at the same link for this meeting within 24 hours of the meeting. The webcast will be available for up to 90 days after this meeting. At this point, I would like to introduce a few more people who are in attendance at today's meeting. First, Jeff Mollenhauer of PricewaterhouseCoopers LLP, the company's independent registered public accounting firm. Mr. Mollenhauer will be available during Q&A session to respond to appropriate questions. Second Gene Capello of CT Hagberg LLC will act as the Inspector of Election for this meeting and tabulate results of the voting. Mr. Capello has executed the oath of Inspector of Election. Now let me turn to the formal business of this meeting. The proposals to be considered at this meeting are described in our proxy statement dated April 20, 2020, and I will review these shortly. But first, I will report on the notice for this meeting. Our Board of Directors fixed April 7, 2020, as the record date for determining the stockholders entitled to vote at this meeting. I present to this meeting an affidavit of Broadridge Financial Services attesting that a Notice of Internet Availability of Proxy Materials was mailed on or about April 20, 2020, to all of Upwork's stockholders of record determined as of the close of business on the record date. The affidavit will be incorporated into the minutes of this meeting. I have a list of the stockholders entitled to vote at this meeting, which is available for inspection by any stockholder present or by any proxyholder representing a stockholder and which list will be filed with the records of this meeting. The registered stockholder list is available for the duration of the meeting and can be found on the page -- the meeting page in the footer section. The list of stockholders shows that as of the record date there were 115,016,104 shares of our common stock outstanding and entitled to vote at this meeting with each share of common stock entitled to one vote. As previously mentioned, the Inspector of Election has advised that over a majority of the voting power of our outstanding common stock entitled to vote at this meeting is present or represented by proxy here today, and that a quorum is therefore present. This meeting is therefore authorized to transact business. Now I will present the matters to be voted upon. As stated in the notice of this annual meeting and our proxy statement the first item of business is to elect 2 Class II directors, each to serve a 3-year term expiring at the 2023 Annual Meeting of Stockholders and until his or her successor has been elected and qualified or until his or her earlier death, resignation or removal. The director nominees are Leela Srinivasan and Gary Steele. No other director nominees have been properly submitted for election pursuant to our bylaws or the Securities and Exchange Commission rules. Therefore, no other nominations may be accepted. The Board of Directors recommends a vote for the election of each of the nominated directors. As Secretary of this annual meeting and on behalf of the Board of Directors, I move for the election of each of the nominated directors, which motion is seconded by proxy. The second item of business is to ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2020. Board of Directors recommends a vote for the ratification of the appointment of PricewaterhouseCoopers LLP. As Secretary of this annual meeting and on behalf of the Board of Directors, I move for approval of this proposal, which motion is seconded by proxy. The third item of business is to vote on a nonbinding advisory basis to approve the compensation of our named executive officers. The Board of Directors recommend a vote for the approval on a nonbinding advisory basis of the compensation of our named executive officers. As Secretary of this annual meeting and on behalf of the Board of Directors, I move for approval of this proposal, which motion is seconded by proxy. The fourth item of business is to vote on a nonbinding advisory basis on the frequency of future nonbinding advisory votes on the compensation of our named executive officers. The Board of Directors recommend holding future nonbinding advisory votes on the compensation of our named executive officers every 1 year. As Secretary of this annual meeting and on behalf of the Board of Directors, I move to approve holding future nonbinding advisory votes on the compensation of our named executive officers every 1 year, which motion is seconded by proxy. That concludes the discussion of the proposals. We will now address any questions relevant to the proposals that stockholders have submitted through the webcast portal. Please note that we will not address any questions which are irrelevant to the matters presented at this meeting. If you have not already submitted a question and wish to do so, please enter your question now. As mentioned earlier, stockholders are limited to 1 question each. Though we may not be able to answer every single question, we will do our best to respond to as many as possible in the time permitted. The time permitted for the Q&A session will be limited to 10 minutes. If we do not receive any relevant questions, we will conclude the Q&A session earlier. If you have a specific question about a specific Upwork service offering or your customer account, please feel free to send those questions to the following e-mail address, [email protected]. Other questions can be directed to [email protected]. We will now pause for a minute to allow stockholders to submit questions. We have received a question, which is not relevant to the proposals. And as such, we'll not be addressing such question at this time. We will now conclude the Q&A session. As noted earlier, the voting today is by proxy and electronic ballot. Any stockholder who has not voted or wishes to change their vote may do so by clicking on the vote button on the webcast portal and following the instructions there. Stockholders who have sent in proxies or previously voted via the Internet or by phone and who do not wish to change their vote do not need to take further action. Their votes will be counted automatically. We expect holding the polls open for approximately 1 minute to allow anyone who chooses to vote here to cast ballots. Time begins now. [Voting]

Now that everyone has had the opportunity to vote, I now declare the polls for the 2020 Annual Meeting closed. We now have preliminary voting results. Directors elected pursuant proposal one are elected by a plurality of the votes of the shares of capital stock present in person or represented by proxy at the meeting and entitled to vote on the election of directors, which means that the 2 nominees receiving the highest number of affirmative votes will be elected to the Board. Based on results as tabulated by the Inspector of Election, Leela Srinivasan and Gary Steele are the 2 nominees on the ballot who received the highest number of affirmative votes cast and, therefore, each nominee has been elected to the Board of Directors. The vote required to approve proposal 2 is the affirmative vote of the holders of the majority of the voting power of the shares of capital stock entitled to vote on proposal 2 that are present in person or represent by proxy at the meeting and are voted for or against the matter. Based on results as tabulated by the Inspector of Election, the proposal to ratify the appointment of PricewaterhouseCoopers LLP has been approved by a majority of the votes cast. The vote required to approve proposal 3 is the affirmative vote of the holders of the majority of the voting power of the shares of capital stock entitled to vote on proposal 3 that are present in person or represented by proxy at the meeting and are voted for or against the matter. Based on results as tabulated by the Inspector of Election, the proposal to approve on a nonbinding advisory basis the compensation of our named executive officers has been approved by a majority of the votes cast. For proposal 4 frequency that receives the vote of the greatest number of shares of capital stock entitled to vote on proposal 4 that are present in person or represented by proxy at the meeting is deemed to be the preferred frequency of our stockholders. Based on results as tabulated by the Inspector of Election, the greatest number of votes were cast in favor of holding future nonbinding advisory votes on the compensation of our named executive officers every 1 year, which is hereby deemed to be the preferred frequency of our stockholders. There are no other formal items of business before this meeting. Final results of the vote will be recorded and stated in the minutes of this meeting and also filed with the Securities and Exchange Commission on a Form 8-K within 4 business days. Thank you to those who participated in today's virtual meeting. This now concludes our annual meeting, and the meeting is now adjourned.

This concludes Upwork Inc.'s 2020 Annual Stockholders Meeting. A replay of the meeting will be available within 24 hours at the website you logged into today. You will now be disconnected from the meeting. Thank you, and have a good day.