UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549​

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.           )

Filed by the Registrant   ☒

Filed by a Party other than the Registrant   ☐

Check the appropriate box:

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Preliminary Proxy Statement

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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

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Definitive Proxy Statement

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Definitive Additional Materials

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Soliciting Material under §240.14a-12

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HealthEquity, Inc.

(Name of Registrant as Specified In Its Charter)​

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)​

Payment of Filing Fee (Check the appropriate box):

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No fee required.

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Fee paid previously with preliminary materials.

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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

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Notice of Annual Meeting
of Stockholders

To Be Held at 10:00 a.m. Mountain Time on Thursday, June 22, 2023

Dear Stockholder:

You are cordially invited to attend the 2023 annual meeting of stockholders (the “Annual Meeting”) of HealthEquity, Inc., a Delaware corporation (“we,” “us,” “HealthEquity” or the “Company”). The Annual Meeting will be held on Thursday, June 22, 2023, at 10:00 a.m. Mountain Time, for the following purposes, as more fully described in the accompanying proxy statement:

Our board of directors has fixed the close of business on April 28, 2023, as the record date for the Annual Meeting. Only stockholders of record on April 28, 2023, are entitled to notice of and to vote at the Annual Meeting. Further information regarding voting rights and the matters to be voted upon is presented in the accompanying proxy statement.

On or about May 12, 2023, we expect to mail to our stockholders a Notice of Internet Availability of Proxy Materials (the “Notice”) containing instructions on how to access our proxy statement and our annual report. The Notice provides instructions on how to vote via the Internet or by telephone and includes instructions on how to receive a paper copy of our proxy materials by mail. The accompanying proxy statement and our annual report can be accessed directly at the Internet address listed on the Notice.

We will be holding the Annual Meeting solely in a virtual meeting format. To attend the Annual Meeting, please visit: https://web.lumiagm.com/261252145 and enter code: hlthvirt2023. As always, we encourage you to vote your shares prior to the Annual Meeting.

YOUR VOTE IS IMPORTANT. Whether or not you plan to attend the Annual Meeting, we urge you to submit your vote via the Internet, telephone or mail as soon as possible so that your shares can be voted at the Annual Meeting in accordance with your instructions.

Thank you for your continued support of HealthEquity.

By order of the Board of Directors,

Robert Selander
Chairman of the Board of Directors

Draper, Utah
May 12, 2023

Table of Contents

   

​	Proxy Statement Summary​	​	​	​	​	2	​	​
​	Annual Meeting Information	​	​	​	​	2	​	​
​	Proposals	​	​	​	​	2	​	​
​	Fiscal Year 2023 Business Highlights	​	​	​	​	2	​	​
​	Director Nominee Highlights	​	​	​	​	3	​	​
​	Corporate Governance Highlights	​	​	​	​	5	​	​
​	Executive Compensation Highlights	​	​	​	​	6	​	​
​	Questions and Answers about the 2023 Annual Meeting	​	​	​	​	7	​	​
​	Proposal No. 1 Election of Directors​	​	​	​	​	8	​	​
​	Recommendation	​	​	​	​	8	​	​
​	Director Nominees	​	​	​	​	8	​	​
​	Retiring Director	​	​	​	​	14	​	​
​	Board Effectiveness and Long-Term Planning	​	​	​	​	14	​	​
​	Director Independence	​	​	​	​	15	​	​
​	Board Leadership Structure	​	​	​	​	16	​	​
​	Board Meetings and Committees	​	​	​	​	16	​	​
​	Board Diversity Matrix	​	​	​	​	20	​	​
​	Stockholder Recommendations for Nominations to the Board of Directors	​	​	​	​	20	​	​
​	Director Compensation	​	​	​	​	21	​	​
​	Vote Required	​	​	​	​	23	​	​
​	Additional Corporate Governance Matters	​	​	​	​	24	​	​
​	Proposal No. 2 Ratification of Appointment of Independent Registered Public Accounting Firm	​	​	​	​	28	​	​
​	Recommendation	​	​	​	​	28	​	​
​	Fees Paid to the Independent Registered Public Accounting Firm	​	​	​	​	29	​	​
​	Auditor Independence	​	​	​	​	29	​	​
​	Audit and Risk Committee Policy on Pre-Approval of Audit and Permitted Non-Audit and Tax Services of Independent Registered Public Accounting Firm	​	​	​	​	29	​	​
​	Vote Required	​	​	​	​	29	​	​
​	Audit and Risk Committee Report​	​	​	​	​	30	​	​
​	Proposal No. 3 Advisory Vote on Compensation Paid to Our Named Executive Officers	​	​	​	​	31	​	​
​	Recommendation	​	​	​	​	31	​	​
​	Vote Required	​	​	​	​	31	​	​
​	Executive Officers​	​	​	​	​	32	​	​
​	Talent, Compensation and Culture Committee Report	​	​	​	​	34	​	​

​	Compensation Discussion and Analysis​	​	​	​	​	35	​	​
​	Executive Summary	​	​	​	​	35	​	​
​	FY23 Executive Officer Changes	​	​	​	​	38	​	​
​	Executive Compensation Philosophy and Program Design	​	​	​	​	38	​	​
​	Governance of Executive Compensation Program	​	​	​	​	38	​	​
​	Individual Compensation Elements	​	​	​	​	41	​	​
​	Other Compensation Policies and Practices	​	​	​	​	48	​	​
​	Tax and Accounting Considerations	​	​	​	​	50	​	​
​	Executive Compensation​	​	​	​	​	52	​	​
​	Compensation of Named Executive Officers	​	​	​	​	52	​	​
​	Summary Compensation Table	​	​	​	​	52	​	​
​	Fiscal 2023 Grant of Plan-Based Awards Table	​	​	​	​	53	​	​
​	Narrative to Fiscal 2023 Summary Compensation Table and Fiscal 2023 Grant of Plan-Based Awards Table	​	​	​	​	54	​	​
​	Fiscal 2023 Outstanding Equity Awards at Fiscal Year-End Table	​	​	​	​	55	​	​
​	Fiscal 2023 Option Exercises and Stock Vested Table	​	​	​	​	57	​	​
​	Pension Benefits	​	​	​	​	57	​	​
​	Non-Qualified Deferred Compensation	​	​	​	​	57	​	​
​	Potential Payments Upon Termination or Change In Control	​	​	​	​	57	​	​
​	CEO Pay Ratio	​	​	​	​	60	​	​
​	Pay versus Performance	​	​	​	​	60	​	​
​	Equity Compensation Plan Information	​	​	​	​	64	​	​
​	Proposal No. 4 Advisory Vote on the Frequency of Future Advisory Votes on Compensation Paid to Our Named Executive Officers	​	​	​	​	65	​	​
​	Recommendation	​	​	​	​	65	​	​
​	Vote Required	​	​	​	​	65	​	​
​	Security Ownership of Certain Beneficial Owners and Management​	​	​	​	​	66	​	​
​	Other Matters​	​	​	​	​	69	​	​
​	Section 16(a) Beneficial Ownership Reporting Compliance	​	​	​	​	69	​	​
​	Available Information	​	​	​	​	69	​	​
​	Questions and Answers About the Annual Meeting	​	​	​	​	69	​	​
​	Company Website	​	​	​	​	76	​	​
​	Exhibit A—Non-GAAP Financial Information​	​	​	​	​	A-1	​	​

 

   

HealthEquity, Inc.
Proxy Statement for 2023 Annual Meeting of Stockholders

To Be Held at 10:00 a.m. Mountain Time on Thursday, June 22, 2023

This proxy statement and the enclosed form of proxy are furnished in connection with the solicitation of proxies by our board of directors for use at our 2023 annual meeting of stockholders (the “Annual Meeting”), and any postponements, adjournments or continuations thereof. The Annual Meeting will be held on Thursday, June 22, 2023, at 10:00 a.m. Mountain Time. We will be holding the Annual Meeting solely in a virtual meeting format. To attend the Annual Meeting, please visit: https://web.lumiagm.com/261252145 and enter code: hlthvirt2023.

The Notice of Internet Availability of Proxy Materials (the “Notice”) containing instructions on how to access this proxy statement and our annual report is first being mailed on or about May 12, 2023, to all stockholders entitled to receive notice of and to vote at the Annual Meeting.

The board of directors does not know of any other matters to be presented at the Annual Meeting. If any additional matters are properly presented at the Annual Meeting, the persons named on the enclosed proxy card will have discretion to vote the shares of common stock they represent in accordance with their own judgment on such matters.

It is important that your shares of common stock be represented at the Annual Meeting, regardless of the number of shares that you hold. You are, therefore, urged to vote over the Internet or by telephone as instructed on the enclosed proxy card or execute and return, at your earliest convenience, the enclosed proxy card in the envelope that has also been provided.

THE BOARD OF DIRECTORS

Draper, Utah
May 12, 2023

 

HealthEquity, Inc. 2023 Proxy Statement | 1

   

Proxy Statement Summary

Annual Meeting Information

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Date and Time: Thursday, June 22, 2023 at 10:00 a.m. Mountain Time

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Location: Virtual. To attend the Annual Meeting, please visit https://web.lumiagm.com/261252145 and enter code: hlthvirt2023

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Record Date: April 28, 2023

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Proposals

This proxy statement summary highlights information regarding HealthEquity and certain information included elsewhere in this proxy statement. You should read the entire proxy statement before voting. You should also review our annual report to stockholders for detailed information regarding our financial and operating performance in the fiscal year ended January 31, 2023, including the audited financial statements and related notes included in the report.

Fiscal Year 2023 Business Highlights

During the fiscal year ended January 31, 2023, we continued to execute on our core financial and business objectives. Our key financial and operational results were as follows:

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Overall revenue of  $861.7 million, representing an increase of 14% from the fiscal year ended January 31, 2022;

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Net loss of  $26.1 million, compared to net loss of  $44.3 million in the fiscal year ended January 31, 2022;

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Net loss per diluted share of  $0.31, compared to net loss per diluted share of  $0.53 for the fiscal year ended January 31, 2022;

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Adjusted earnings before interest, taxes, depreciation, and amortization (“Adjusted EBITDA”)(1) of  $272.3 million, representing an increase of 15% from the fiscal year ended January 31, 2022;

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8.0 million health savings accounts (“HSAs”) at the end of the fiscal year ended January 31, 2023, representing an increase of 11% compared to the fiscal year ended January 31, 2022;

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New HSAs from sales of 971,000; and

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(1)

Adjusted EBITDA is not a generally accepted accounting principles (“GAAP”) financial measure. The definition of this non-GAAP financial measure, and a reconciliation to the most comparable GAAP measure, is included as Exhibit A to this proxy statement.

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2 | HealthEquity, Inc. 2023 Proxy Statement

Proxy Statement Summary

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HSA Assets of  $22.1 billion as of January 31, 2023, representing an increase of 13% from the fiscal year ended January 31, 2022.

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Director Nominee Highlights

The following table sets forth the names, ages as of May 12, 2023, and certain other information for each of the director nominees, each of whom are current directors with terms expiring at the Annual Meeting:

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*

Chair

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Board Demographics, Skills and Competencies

Our director nominees exhibit a variety of competencies, professional experience, and backgrounds, and contribute diverse viewpoints and perspectives to our board of directors. While our board of directors benefits from the experience and institutional knowledge that our longer-serving directors bring, it also brought in new perspective and ideas through the appointment of two new directors this past year. Please see the discussion under “Board Effectiveness and Long-Term Planning” below for additional information.

 

HealthEquity, Inc. 2023 Proxy Statement | 3

Proxy Statement Summary

Director Nominee Demographics

The following charts show the demographic diversity of our director nominees as of May 12, 2023:

 

4 | HealthEquity, Inc. 2023 Proxy Statement

Proxy Statement Summary

Director Nominee Skills and Competencies

Below are the skills and competencies that our nominating, governance and corporate sustainability committee and our board of directors consider important for our directors to possess considering our current business and future market opportunities, and the director nominees who possess them:

Corporate Governance Highlights

Key elements of our corporate governance framework include the following:

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Independent chairman

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Committees are composed of only independent directors

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Our board of directors and each committee conducts annual self-assessments

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Each director regularly completes a peer assessment of the other members of the board

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Our board of directors is engaged in an ongoing refreshment process with a plan to increase director diversity

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Our board of directors and each committee holds quarterly executive sessions without management present

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Our board of directors provides oversight of key risks that impact the Company’s ability to achieve its strategy

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No director over-boarding

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Our board of directors and its committees provide strategic oversight of material environmental, social and governance matters

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HealthEquity, Inc. 2023 Proxy Statement | 5

Proxy Statement Summary

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Our board of directors has a separate committee dedicated to providing oversight of cybersecurity matters

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Our board of directors conducts an annual review of committee charters and key governance policies

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Executive Compensation Highlights

Our executive compensation program is guided by our overarching philosophy of only paying for demonstrable performance. We believe that our executive compensation program is reasonable, competitive, and appropriately balances the goals of attracting, motivating, rewarding, and retaining our executive officers. We emphasize performance-based compensation that appropriately rewards our executive officers for delivering financial, operational, and strategic results that meet or exceed pre-established goals. We endeavor to maintain sound governance standards consistent with our executive compensation policies and practices.

 

6 | HealthEquity, Inc. 2023 Proxy Statement

Proxy Statement Summary

Questions and Answers about the 2023 Annual Meeting

Please see “Questions and Answers about the Annual Meeting” beginning on page 69 for important information about the Annual Meeting, proxy materials, voting, deadlines for stockholder proposals and other important information.

 

HealthEquity, Inc. 2023 Proxy Statement | 7

   

Proposal No. 1
Election of Directors

Our board of directors is currently composed of 12 members. At the Annual Meeting, 11 directors are to be elected, each to hold office until the next annual meeting of stockholders and until his or her successor is elected and qualified.

Recommendation

Director Nominees

Our nominating, governance and corporate sustainability committee has recommended, and our board of directors has approved, Robert Selander, Jon Kessler, Stephen Neeleman, M.D., Paul Black, Frank Corvino, Adrian Dillon, Evelyn Dilsaver, Debra McCowan, Rajesh Natarajan, Stuart Parker and Gayle Wellborn as nominees for election as directors at the Annual Meeting. If elected, each such nominee will serve as a director until the 2024 annual meeting of stockholders and until his or her successor is duly elected and qualified. One current director, Ian Sacks, is not standing for election, and accordingly, his term will expire immediately after the Annual Meeting.

If you are a stockholder of record and you sign your proxy card or vote over the Internet or by telephone but do not give instructions with respect to the voting of directors, your shares will be voted FOR the re-election of each of the nominees. We expect that each nominee will accept such nomination; however, in the event that a director nominee is unable or declines to serve as a director at the time of the Annual Meeting, the proxies will be voted for any nominee who shall be designated by our board of directors to fill such vacancy. If you are a beneficial owner of shares of our common stock and you do not give voting instructions to your broker, bank or other nominee, then your broker, bank or other nominee will leave your shares unvoted on this matter.

 

8 | HealthEquity, Inc. 2023 Proxy Statement

Proposal No. 1 Election of Directors

Director Nominee Biographies

 

HealthEquity, Inc. 2023 Proxy Statement | 9

Proposal No. 1 Election of Directors

 

10 | HealthEquity, Inc. 2023 Proxy Statement

Proposal No. 1 Election of Directors

 

HealthEquity, Inc. 2023 Proxy Statement | 11

Proposal No. 1 Election of Directors

 

12 | HealthEquity, Inc. 2023 Proxy Statement

Proposal No. 1 Election of Directors

 

HealthEquity, Inc. 2023 Proxy Statement | 13

Proposal No. 1 Election of Directors

Retiring Director

Effective immediately following the Annual Meeting, Mr. Ian Sacks’ term will expire, at which time he will retire from our board of directors. The Company gratefully acknowledges and thanks Mr. Sacks for his years of service and dedication to our board of directors.

Board Effectiveness and Long-Term Planning

Assessments and Performance Reviews

Our board of directors and each of its committees conduct annual self-assessments, which are intended to facilitate a candid assessment and discussion by the board and each committee of its effectiveness in fulfilling its responsibilities. The nominating, governance and corporate sustainability committee oversees the annual self-assessments. All directors complete an evaluation form for the board and for each committee on which they serve. These forms include ratings for certain key metrics, as well as the opportunity for written comments. The comments provide key insights into the areas directors believe the board can improve or in which its performance is strong. Evaluation topics include number and length of meetings, topics covered and materials provided, committee structure and activities, board composition and expertise, director education opportunities, succession planning, director participation and interaction with management. Directors also conduct regular peer assessments of the performance of their fellow directors. These peer assessments include a questionnaire and individual director interviews and are typically conducted by our chairman, although an independent third party is used periodically to provide an outside perspective. Our board considers the results of the board, committee and peer assessments when making decisions on the structure and responsibilities of our board and its committees, and in our board refreshment process.

Board Succession Planning

As part of board succession planning, and to ensure our board of directors has a diverse and relevant mix of perspectives and expertise, the nominating, governance and corporate sustainability committee has been conducting an ongoing board refreshment process. As a result of this process, two new directors, Messrs. Natarajan and Black, joined the board of directors in May and September of 2022, respectively. Mr. Natarajan brought critical technology expertise and Mr. Black brought significant executive expertise in the healthcare technology industry. As noted above, one independent director, Mr. Sacks, is not standing for election, and accordingly, will retire from the board of directors effective following the Annual Meeting.

 

14 | HealthEquity, Inc. 2023 Proxy Statement

Proposal No. 1 Election of Directors

We expect this board refreshment process to continue over the coming years. As part of this process, gender diversity among director nominees fell to 25% this year due to the addition of Messrs. Black and Natarajan to the board of directors. However, with Mr. Sacks’ retirement from the board, gender diversity will increase to 27% immediately following the Annual Meeting (assuming all director nominees are elected). The nominating, governance and corporate sustainability committee expects gender diversity to again reach at least 30% over the next year as the board refreshment process continues.

The board refreshment process also includes refreshing committee leadership and membership from time to time. The chairs of each of our committees were changed recently, with Ms. McCowan becoming chair of the talent, compensation and culture committee in June 2020, and Mr. Dillon and Mses. Dilsaver and Wellborn becoming chairs of the audit and risk committee, nominating, governance and corporate sustainability committee, and cybersecurity and technology committee, respectively, in September 2021. Committee membership has also been refreshed as new directors have joined the board of directors and others have retired.

Considerations in Evaluating Director Nominees

Our nominating, governance and corporate sustainability committee uses a variety of methods for identifying and evaluating director nominees. In its evaluation of director candidates, including the members of the board of directors eligible for re-election, our nominating, governance and corporate sustainability committee will consider the current size, composition and needs of our board of directors and the respective committees of the board of directors, including, without limitation, issues of character, integrity, judgment, diversity, independence, area of expertise, corporate experience, length of service, potential conflicts of interest, and other commitments. Our nominating, governance and corporate sustainability committee evaluates these factors, among others, and does not assign any particular weighting or priority to any of these factors.

Our nominating, governance and corporate sustainability committee requires the following minimum qualifications to be satisfied by any nominee for a position on the board of directors: (i) the highest personal and professional ethics and integrity; (ii) proven achievement and competence in the nominee’s field and the ability to exercise sound business judgment; (iii) skills that are complementary to those of the existing members of the board of directors; (iv) the ability to assist and support management and make significant contributions to our success; and (v) an understanding of the fiduciary responsibilities that are required of a member of the board of directors and the commitment of time and energy necessary to diligently carry out those responsibilities.

If our nominating, governance and corporate sustainability committee determines that an additional or replacement director is required, it may take such measures that it considers appropriate in connection with its evaluation of a director candidate, including candidate interviews, inquiry of the person or persons making the recommendation or nomination, engagement of an outside search firm to gather additional information, or reliance on the knowledge of the members of the nominating, governance and corporate sustainability committee, the board of directors or management. Our nominating, governance and corporate sustainability committee also may propose to the board of directors a candidate recommended or offered for nomination by a stockholder as a nominee for election to the board of directors. After our nominating, governance and corporate sustainability committee makes its recommendations to the board of directors, the board of directors has final authority on determining the selection of those director candidates for nomination to the board of directors.

Director Independence

Our common stock is listed on the NASDAQ Global Select Market. Under NASDAQ rules, independent directors must comprise a majority of a listed company’s board of directors. In addition, NASDAQ rules require that, subject to specified exceptions, each member of a listed company’s audit, compensation, and nominating and corporate governance committees be independent. Under NASDAQ rules, a director will only qualify as an “independent director” if, in the opinion of the listed company’s board of directors, the director does not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.

Audit committee members must also satisfy the independence criteria set forth in Rule 10A-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and NASDAQ listing requirements. In addition, compensation committee members must satisfy the independence criteria set forth in Rule 10C-1 under the Exchange Act and NASDAQ listing requirements.

 

HealthEquity, Inc. 2023 Proxy Statement | 15

Proposal No. 1 Election of Directors

Our board of directors has undertaken a review of the independence of each director and considered whether such director has a material relationship with us that could compromise his or her ability to exercise independent judgment in carrying out his or her responsibilities. As a result of this review, our board of directors has determined that Messrs. Selander, Black, Corvino, Dillon, Natarajan, Parker and Sacks and Mses. Dilsaver, McCowan and Wellborn are “independent directors” as defined under the applicable rules and regulations of the SEC and the listing requirements and rules of NASDAQ.

Our board of directors has determined that each member of our talent, compensation and culture committee meets the requirements for independence under the rules and regulations of the SEC, including Rule 10C-1 under the Exchange Act, and NASDAQ listing requirements, is a “non-employee director” within the meaning of Rule 16b-3 under the Exchange Act and is an “outside director” within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended, or the Code.

Board Leadership Structure

Our board of directors is responsible for providing oversight of the affairs of the Company. Our board of directors consists of a non-executive chairman of the board of directors and four standing committees that are each led by a chair. Ten of the 12 current directors (nine of the 11 following the Annual Meeting, assuming all nominees are re-elected) are independent, which we believe provides effective independent oversight of management. Our Chief Executive Officer is a director, but he does not serve as chairman of the board of directors and does not serve on any committee of the board of directors.

We believe that the current leadership structure of the board of directors is appropriate because it allows the board of directors and its committees to fulfill their responsibilities, draws upon the experience and talents of all directors, encourages management accountability to the board of directors and helps maintain good communication among members of the board of directors and with management. In particular, by having our Chief Executive Officer serve as a member of our board of directors—with a separate individual serving as chairman of our board of directors—we believe we optimize the development of our Company’s strategy by embracing the diverse perspectives and roles of our independent directors and our Chief Executive Officer.

While we currently have a separate non-executive chairman of the board of directors and Chief Executive Officer, our corporate governance guidelines allow for the same person to serve as both chairman and chief executive officer. In that circumstance, the independent directors would be entitled to elect a lead independent director. Among other reasons, our board of directors could determine to have the same person serve as both chairman and chief executive officer if it determined that doing so would better optimize the development of our Company’s strategy while also allowing the board of directors and its committees to fulfill their responsibilities.

Board Meetings and Committees

During the fiscal year ended January 31, 2023, our board of directors held six meetings (including regularly scheduled and special meetings). Each director, other than Mr. Sacks (who is retiring from the Board immediately following the Annual Meeting), attended at least 75% of the aggregate of  (i) the total number of meetings of our board of directors held during the period for which he or she served as a director and (ii) the total number of meetings held by all committees of our board of directors on which he or she served during the periods that he or she served.

It is the policy of our board of directors to regularly have separate meeting times for independent directors without management.

Our board of directors has adopted a policy that our directors are strongly encouraged to attend each annual meeting of stockholders. All of the members of our board of directors who were directors at the time of our 2022 annual meeting of stockholders attended the annual meeting of stockholders.

Our board of directors has four standing committees:

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the audit and risk committee,

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the cybersecurity and technology committee,

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the nominating, governance and corporate sustainability committee, and

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the talent, compensation and culture committee.

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16 | HealthEquity, Inc. 2023 Proxy Statement

Proposal No. 1 Election of Directors

The composition and responsibilities of each of the committees of our board of directors are described below. Members serve on these committees until their resignation or until otherwise determined by our board of directors. Each committee operates under a written charter that satisfies the applicable rules and regulations of the SEC and NASDAQ listing requirements. A copy of the charter of each committee is available in the Corporate Governance section of our Investor Relations webpage: ir.healthequity.com.

 

HealthEquity, Inc. 2023 Proxy Statement | 17

Proposal No. 1 Election of Directors

 

18 | HealthEquity, Inc. 2023 Proxy Statement

Proposal No. 1 Election of Directors

Compensation Committee Interlocks and Insider Participation

The current members of our talent, compensation and culture committee are Ms. McCowan and Messrs. Black, Corvino, Selander and Parker. None of the members of our talent, compensation and culture committee is or has been an officer or employee of the Company. None of our executive officers currently serves, or in the past year has served, as a member of the board of directors or compensation committee, or other board committee performing equivalent functions, of any entity that has one or more executive officers serving on our talent, compensation and culture committee or our board of directors. None of the members of our talent, compensation and culture committee has any relationship required to be disclosed under this caption under the rules of the SEC.

 

HealthEquity, Inc. 2023 Proxy Statement | 19

Proposal No. 1 Election of Directors

Board Diversity Matrix

The following table includes the Company’s board diversity matrix as of May 12, 2023:

Stockholder Recommendations for Nominations to the Board of Directors

Our nominating, governance and corporate sustainability committee will consider candidates for directors recommended by stockholders holding at least one percent (1%) of the fully diluted capitalization of HealthEquity continuously for at least 12 months prior to the date of the submission of the recommendation. Our nominating, governance and corporate sustainability committee will evaluate such recommendations in the same manner as candidates recommended from other sources. Stockholders wishing to recommend a candidate for nomination should direct the recommendation in writing by letter to our Corporate Secretary at:

HealthEquity, Inc.
15 W. Scenic Pointe Dr., Suite 100
Draper, UT 84020

Such recommendations must include the candidate’s name, home and business contact information, detailed biographical data, relevant qualifications, a signed letter from the candidate confirming willingness to serve on our board of directors, information regarding any relationships between the candidate and HealthEquity and evidence of the recommending stockholder’s ownership of our common stock. Such recommendations must also include a statement from the recommending stockholder in support of the candidate, particularly within the context of the criteria for membership to the board of directors. Our nominating, governance and corporate sustainability committee has discretion to decide which individuals to recommend for nomination as directors, including issues of character, integrity, judgment, diversity, independence, area of expertise, corporate experience, length of service, potential conflicts of interest, other commitments and personal references.

A stockholder can nominate a candidate directly for election to our board of directors by complying with the procedures in Article II, Section 2 of our Amended and Restated By-Laws (“by-laws”) and the rules and regulations of the SEC. Any eligible stockholder who wishes to submit a nomination should review the requirements in our by-laws on nominations by stockholders. Any nomination should be sent in writing to our Corporate Secretary at:

HealthEquity, Inc.
15 W. Scenic Pointe Dr., Ste. 100
Draper, UT 84020

 

20 | HealthEquity, Inc. 2023 Proxy Statement

Proposal No. 1 Election of Directors

To be timely for our 2024 annual meeting of stockholders, our Corporate Secretary must receive the nomination no earlier than February 23, 2024, and no later than March 24, 2024. The notice must state the information required by Article II, Section 2 of our by-laws and otherwise must comply with applicable federal and state law.

A nomination will not be considered if it does not comply with these notice procedures and the additional requirements set forth in our by-laws, including, as appropriate, those set forth in Rule 14a-19 of the Exchange Act.

Director Compensation

In December 2022, with the assistance of Semler Brossy, our compensation consultant, our board of directors benchmarked our non-employee director compensation against our peers, reviewed our non-employee director compensation policy and determined that no changes were needed in the retainer fees payable to our non-employee directors pursuant to such policy. A director may elect to receive these retainer fees in cash or in the form of restricted stock units. The retainers that were payable to each of the non-employee directors of our board of directors for the fiscal year ended January 31, 2023 and that will be payable to each of the non-employee directors for the fiscal year ending January 31, 2024 are described below.

In addition, pursuant to our non-employee director compensation policy, each non-employee director is entitled to receive:

•

an annual restricted stock unit award granted on the date of the Company’s annual meeting of stockholders with a value of  $200,000, with all of the shares of our common stock subject to the award vesting on the earlier of either the date of the Company’s next annual meeting of stockholders or the one-year anniversary of the date of the grant; and

​

•

for any newly appointed non-employee director, a pro-rated annual restricted stock unit award based on the date of appointment, that will vest on the date of the annual meeting following such appointment.

​

Pursuant to our non-employee director compensation policy, each non-employee director may elect to receive restricted stock units (with quarterly vesting) in lieu of cash retainers, except that no such deferral election is available in a non-employee director’s first year of service. The number of restricted stock units will be determined by dividing the value of the cash retainer by the closing price of a share of our common stock on the date of grant. Restricted stock units will be valued at 100% of the closing price of our common stock on the date of grant.

We also reimburse our directors for reasonable and necessary out-of-pocket expenses incurred in attending board of directors and committee meetings or performing other services for us in their capacities as directors.

Directors who also serve as directors of our wholly owned subsidiary HealthEquity Trust Company receive an annual cash retainer fee of  $15,000 for that service.

 

HealthEquity, Inc. 2023 Proxy Statement | 21

Proposal No. 1 Election of Directors

Fiscal 2023 Director Compensation Table

The following table sets forth information concerning the compensation paid to our non-employee directors during the fiscal year ended January 31, 2023.

​

(1)

In the fiscal year ended January 31, 2022, the Company paid certain non-employee directors cash retainer fees greater than they were entitled to receive based on their service due to changes in committee and chair assignments that occurred during the fiscal year. As a result, cash payments to impacted directors in the fiscal year ended January 31, 2023 were reduced by the amounts of any overpayments in the fiscal year ended January 31, 2022.

​

(2)

The amounts reported in this column represent the aggregate grant date value of the restricted stock units granted to the non-employee directors during the fiscal year ended January 31, 2023, calculated in accordance with FASB ASC Topic 718, disregarding for this purpose the estimate of forfeitures related to service-based vesting conditions. The grant date fair value is calculated using the closing price of our common stock on the date of grant. See Note 10 to our consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended January 31, 2023 for a discussion of the assumptions used to calculate these values.

​

(3)

The table below shows the aggregate number of option awards outstanding, whether or not exercisable, and unvested restricted stock units outstanding for each non-employee director as of January 31, 2023.

​

​

(4)

In connection with the transition of the timing of annual director equity awards, for the period from February 1, 2022 until the date of the Company’s annual meeting of stockholders in 2022, a one-time equity award was granted to the directors serving on the board at that time with a value of  $78,000 (pro rata for Mr. Natarajan). All of the shares of our common stock subject to this one-time award vested on the date of the Company’s annual meeting of stockholders in 2022.

​

(5)

Includes cash retainer fees paid to Ms. Dilsaver for serving on the board of directors of HealthEquity Trust Company, a wholly owned subsidiary of the Company.

​

Director Stock Ownership Guidelines

Under our stock ownership guidelines, each non-employee director, within five years of the director’s election or appointment to the board of directors, should own shares of our common stock with a value equal to five times the director’s annual cash retainer.

 

22 | HealthEquity, Inc. 2023 Proxy Statement

Proposal No. 1 Election of Directors

The table below shows the ownership guidelines for each of our non-employee directors, their applicable compliance dates, and whether they were in compliance, as applicable, as of July 31, 2022, which was the last applicable measurement date under our stock ownership guidelines:

At the time of the last applicable measurement date, half of the fair market value of the shares of our common stock underlying vested stock options (to the extent the fair market value exceeded the applicable exercise price) were included when determining the director’s stock ownership, and shares underlying unvested restricted stock units were not counted towards determining the director’s stock ownership. Following the last applicable measurement date, at the recommendation of its compensation consultant, the board of directors amended our stock ownership guidelines such that shares of our common stock underlying vested stock options are no longer included when determining the director’s stock ownership, but both unvested and deferred and vested time-based restricted stock units are included when determining the director’s stock ownership. We believe that the stock ownership guidelines serve to further align the interests of our non-employee directors with the interests of our stockholders.

Vote Required

The election of directors requires a majority of the votes cast by the holders of shares of our common stock present in person or by proxy at the Annual Meeting and entitled to vote thereon to be approved. A “majority of the votes cast” means the number of votes cast “for” a director’s election exceeds the number of votes cast “against” that director’s election. Abstentions and broker non-votes will not count as a vote cast either “for” or “against” a director’s election.

In the event any nominee for director receives a greater number of votes “against” his or her election than votes “for” such election, such nominee is required pursuant to the Company’s Corporate Governance Guidelines to irrevocably offer in writing his or her resignation to the board of directors, which the board of directors will determine whether to accept or reject. Our nominating, governance and corporate sustainability committee (excluding, if applicable, the director who tendered the resignation) will evaluate any such resignation in light of the best interests of the Company and its stockholders in determining whether to recommend to the board of directors that it accept or reject the resignation.

In reaching its decision, pursuant to our corporate governance guidelines, the board of directors may consider any factors it deems relevant, including but not limited to, (i) any stated reasons why stockholders voted against the director, (ii) any alternatives for curing the underlying cause of the “against” votes, (iii) the director’s tenure, (iv) the director’s qualifications, (v) the director’s past and expected future contributions to the Company, and (vi) the overall composition of the board of directors. In addressing such resignation, the board of directors may (A) accept the resignation offer, (B) defer acceptance of the resignation offer, (C) maintain the director but attempt to address the underlying cause of the “against” votes, (D) resolve that the director will not be re-nominated in the future for election, or (E) reject the resignation offer. An accepted resignation offer will become effective immediately upon acceptance or upon such other time as determined by the independent members of the board of directors.

 

HealthEquity, Inc. 2023 Proxy Statement | 23

Proposal No. 1 Election of Directors

Additional Corporate Governance Matters

Risk Management

Risk is inherent with every business, and we face a number of risks, including strategic, financial, cyber, business and operational, legal and compliance, and reputational. We have designed and implemented processes to manage risk to our business. Management is responsible for the day-to-day management of risks the Company faces, while our board of directors, as a whole and assisted by its committees, has responsibility for the oversight of risk management.

Our enterprise risk management program is led by our Senior Vice President of Risk and Compliance, who reports to our Executive Vice President, General Counsel and Corporate Secretary. The enterprise risk management team works with leaders across the Company to identify material risks and makes plans for risk remediation and acceptance. Our SVP of Risk and Compliance is a member of the Company’s disclosure committee and assists with the preparation of the Company’s public disclosure as part of the Company’s disclosure controls and procedures.

In its risk oversight role, our board of directors and its committees have the responsibility to satisfy themselves that the risk management processes designed and implemented by management are appropriate and functioning as designed.

Our board of directors believes that open communication between management and our board of directors is essential for effective risk management and oversight. Our board of directors meets with our President and Chief Executive Officer and other members of the senior management team at quarterly meetings of our board of directors, where, among other topics, they discuss strategy and risks facing the Company, as well as at such other times as they deem appropriate.

Our full board of directors reviews strategic and operational risk in the context of reports from our management team, receives reports on all significant committee activities at each regular meeting and evaluates the risks inherent in any significant transactions. In addition, the board of directors meets annually to discuss the key risks impacting the Company’s ability to achieve its corporate strategy.

While our board of directors is ultimately responsible for risk oversight, to more effectively provide adequate oversight, our board committees assist our board of directors in fulfilling its oversight responsibilities in certain areas of risk:

•

Our audit and risk committee assists our board of directors in fulfilling its oversight responsibilities with respect to enterprise risk management. The audit and risk committee annually reviews the Company’s enterprise risk management program and annual plan and receives quarterly updates on the state of the program and progress toward achievement of the plan. In addition, the audit and risk committee reviews risks in the areas of internal control over financial reporting and disclosure controls and procedures and legal and regulatory compliance, and discusses with management and our independent auditor guidelines and policies with respect to risk assessment and risk management. Our audit and risk committee also reviews our major financial risk exposures and the steps management has taken to monitor and control these exposures. Furthermore, the audit and risk committee is directly responsible for the appointment, retention, compensation and oversight of the work of the Company’s independent auditor (including resolution of disagreements between management and our auditor regarding financial reporting) in connection with auditing the Company’s annual financial statements, books, records, accounts and internal controls over financial reporting and related work.

​

•

Our cybersecurity and technology committee oversees management’s responsibilities with respect to the Company’s cybersecurity and technology and associated risks.

​

•

Our nominating, governance and corporate sustainability committee assists our board of directors in fulfilling its oversight responsibilities with respect to the management of risk associated with board organization, membership and structure, environmental, social and governance matters and corporate governance.

​

•

Our talent, compensation and culture committee assesses risk created by the incentives inherent in our compensation policies and practices, as well as our culture and talent management and our diversity and inclusion initiatives.

​

 

24 | HealthEquity, Inc. 2023 Proxy Statement

Proposal No. 1 Election of Directors

Oversight of Environmental, Social and Governance Matters

Environmental, social and governance (“ESG”) matters are overseen by our board of directors and its committees, as well as management. Our board of directors provides strategic oversight of ESG topics material to the Company. As described above in “—Board Meetings and Committees—Nominating, Governance and Corporate Sustainability Committee”, the nominating, governance and corporate sustainability committee provides general oversight of the Company’s strategy, policies, programs and public reporting relating to corporate social responsibility matters, including ESG matters and provides regular updates to the board of directors regarding these matters. As further described below, the board’s committees also provide oversight of individual ESG topics material to the Company.

In 2021, the Company engaged an independent third-party to develop a materiality assessment of ESG topics. This assessment was overseen by our nominating, governance and corporate sustainability committee and coordinated by our Vice President of Corporate Sustainability. The assessment identified ESG topics material to the Company. For a description of these ESG topics, please review the Company’s 2023 Corporate Sustainability Report: “Sustainably Purple”, which is available on the Company’s website, but is not incorporated into this proxy statement.

The following table identifies each of the material ESG topics and the board committee that provides oversight of that topic:

Cybersecurity Oversight

As described above in “Board Meetings and Committees—Cybersecurity and Technology Committee”, the cybersecurity and technology committee provides oversight of the Company’s cybersecurity threat landscape, risks and data security programs, and the Company’s management and mitigation of cybersecurity risks and potential breach incidents. The cybersecurity and technology committee meets with the Company’s Chief Security Officer and team to, among other items, review any cybersecurity incidents, review key metrics on the Company’s cybersecurity program and related risk management programs, and discuss the Company’s cybersecurity programs and goals. The cybersecurity and technology committee updates the full board of directors during each quarterly board meeting, or more frequently if circumstances dictate.

The audit and risk committee provides an additional layer of cybersecurity oversight, as it provides oversight of the Company’s enterprise risk management program, which includes management of cybersecurity risks and the potential fraud and privacy risks that could arise from a cybersecurity incident.

Corporate Governance Guidelines, Code of Business Conduct and Ethics and Policy Oversight

Our board of directors has adopted corporate governance guidelines. These guidelines address items such as the role of our board of directors, conduct of board of directors and committee meetings and other corporate governance policies and standards applicable to us in general. In addition, our board of directors has adopted a code of business conduct and ethics that applies to all of our employees, officers and directors, including our Chief Executive Officer, Chief Financial Officer, and other executive and senior financial officers. Our code of business conduct and ethics and our corporate governance guidelines are posted on the Corporate Governance section of our Investor Relations webpage: ir.healthequity.com. We intend to post any amendments to our code of business conduct and ethics and our corporate governance guidelines, and any waivers of our code of business conduct and ethics for directors and executive officers, on the same website.

In addition to the corporate governance guidelines and code of business conduct and ethics, our board of directors also conducts an annual review of each committee charter and several other key governance policies.

 

HealthEquity, Inc. 2023 Proxy Statement | 25

Proposal No. 1 Election of Directors

Related Person Transactions Governance

Our board of directors has adopted a formal written related person transaction policy setting forth the policies and procedures for the review and approval or ratification of related person transactions. Related persons include any executive officer, director, or person who was serving as a director and/or executive officer at any time since the beginning of our last fiscal year, nominee for director, or holder of more than five percent of our common stock, or any of their immediate family members or affiliates. Related person transactions refers to any transaction, arrangement or relationship, or any series of similar transactions, arrangements or relationships in which we or our subsidiaries were or are to be a participant, where the amount involved exceeds or is reasonably expected to exceed $120,000, and a related person had, has or will have a direct or indirect interest, other than publicly disclosed compensation arrangements with directors and executive officers, reimbursement of advances of business travel and expenses, certain transactions with other companies, certain charitable contributions, transactions where all stockholders receive proportional benefits and transactions involving competitive bids.

The policy provides that for any transaction the General Counsel determines is a related person transaction, our audit and risk committee or, in those instances in which the General Counsel, in consultation with the Chief Executive Officer or the Chief Financial Officer, determines that it is not practicable or desirable to wait until the next regularly scheduled audit and risk committee meeting, the chair of the audit and risk committee will consider all of the available facts and circumstances relevant to the transaction, including (if applicable) but not limited to: (i) the benefits to us; (ii) in the event the related person is a director (or immediate family member of a director or an entity with which a director is a partner, stockholder or executive officer), the impact that the transaction will have on a director’s independence; (iii) whether any alternative transactions or sources for comparable services or products are available; (iv) the terms of the transaction; and (v) the terms available to unrelated third parties or to associates generally. After considering all such facts and circumstances and evaluating all options available to us, including ratification, revision or termination of the related person transaction, our audit and risk committee or the chair of the audit and risk committee, as applicable, shall determine in good faith whether the related person transaction is in, or is not inconsistent with, our best interests.

Related Person Transactions

We describe below transactions and series of similar transactions, since the beginning of our last fiscal year, to which we were or will be a party, in which:

•

the amounts involved exceeded or are expected to exceed $120,000; and

​

•

any of our directors, nominees for director, executive officers or holders of more than 5% of our common stock, or any immediate family member or affiliate of, or person sharing the household with, any of these individuals or entities, had or will have a direct or indirect material interest.

​

The Vanguard Group, Inc. (“Vanguard”) is the beneficial owner of more than 5% of the Company’s outstanding common stock. The Company is party to an Employer Services Agreement with Vanguard through which the Company provides HSAs to Vanguard employees. Vanguard is also party to a Client Referral and SSO Agreement with the Company through which Vanguard may refer its clients to the Company for the provision of HSAs in return for certain referral fees paid by the Company. Under the agreements, the Company received $341,523 during the fiscal year ended January 31, 2023, paid Vanguard $955,814 during the fiscal year ended January 31, 2023, and expects to receive more than $120,000 during the fiscal year ending January 31, 2024.

BlackRock, Inc. (“BlackRock”) is the beneficial owner of more than 5% of the Company’s outstanding common stock. The Company is party to a Master Services Agreement with BlackRock through which the Company provides consumer-directed benefits to BlackRock employees. Under this agreement, BlackRock paid the Company $136,967 during the fiscal year ended January 31, 2023, and the Company expects to receive more than $120,000 during the fiscal year ending January 31, 2024.

FMR, LLC (“FMR”) is the beneficial owner of more than 5% of the Company’s outstanding common stock. The Company, through its subsidiary WageWorks, is party to an Employer Services Agreement with an affiliate of FMR through which WageWorks provides consumer-directed benefits to employees of FMR and its affiliates. Under this agreement, the Company received $4,301,204 during the fiscal year ended January 31, 2023, and the Company expects to receive more than $120,000 during the fiscal year ending January 31, 2024.

We have also entered into indemnification agreements with our directors and certain of our executive officers. The indemnification agreements and our certificate of incorporation and by-laws require us to indemnify our directors and officers to the fullest extent permitted by Delaware law.

 

26 | HealthEquity, Inc. 2023 Proxy Statement

Proposal No. 1 Election of Directors

Other than as described above, there has not been over the last fiscal year, nor is there any currently proposed, transactions or series of similar transactions to which we have been or will be a party.

Whistleblower Policy

The audit and risk committee has established a telephone and Internet whistleblower hotline available to employees of the Company for the confidential and anonymous submission of suspected violations, including complaints regarding accounting, internal accounting controls or auditing matters, harassment, fraud and policy violations.

Stockholder Engagement

We carefully consider feedback from our stockholders regarding our executive compensation program and corporate governance issues. Our stockholders are invited to express their views to members of our board of directors as described under “Policies and Procedures for Communications to Independent Directors” below. We also engage in dialogue with our major stockholders throughout the year to solicit their views and opinions about various topics and matters of mutual interest.

We believe that our stockholder outreach process continues to strengthen our understanding of our stockholders’ concerns and the issues on which they are focused. We therefore expect to continue to engage with our stockholders on a regular basis.

Policies and Procedures for Communications to Independent Directors

In cases where stockholders wish to communicate directly with our non-management directors, messages can be sent to our General Counsel at:

HealthEquity, Inc.
15 W. Scenic Pointe Drive, Suite 100
Draper, UT, 84020
(801) 727-1000

Our General Counsel will review all incoming stockholder communications (except for mass mailings, product complaints or inquiries, job inquiries, business solicitations and patently offensive or otherwise inappropriate material) and, if appropriate, route such communications to the appropriate member(s) of the board of directors. Our General Counsel may decide in the exercise of his judgment whether a response to any stockholder communication is necessary and shall provide a report to our nominating, governance and corporate sustainability committee on a quarterly basis of any stockholder communications received to which the General Counsel has responded. This procedure does not apply to communications to non-management directors from officers or directors of HealthEquity who are stockholders or to stockholder proposals submitted pursuant to Rule 14a-8 under the Exchange Act.

 

HealthEquity, Inc. 2023 Proxy Statement | 27

   

Proposal No. 2
Ratification of Appointment of Independent Registered Public Accounting Firm

Our audit and risk committee has appointed PricewaterhouseCoopers LLP, or PwC, as our independent registered public accounting firm to audit our consolidated financial statements for the fiscal year ending January 31, 2024. PwC also served as our independent registered public accounting firm for the fiscal year ended January 31, 2023. Pursuant to the requirement mandated by the Sarbanes-Oxley Act of 2002, PwC’s lead audit partner rotates every five years, and will be required to rotate after the completion of the audit of our financial statements for the fiscal year ending January 31, 2026.

At the Annual Meeting, stockholders are being asked to ratify the appointment of PwC as our independent registered public accounting firm for the fiscal year ending January 31, 2024. Stockholder ratification of the appointment of PwC is not required by our by-laws or other applicable legal requirements. However, our board of directors is submitting the appointment of PwC to our stockholders for ratification as a matter of good corporate governance. In the event that this appointment is not ratified by the affirmative vote of a majority of the shares present in person or by proxy at the Annual Meeting and entitled to vote, such appointment will be reconsidered by our audit and risk committee. Even if the appointment is ratified, our audit and risk committee, in its sole discretion, may appoint another independent registered public accounting firm at any time during the fiscal year ending January 31, 2024, if our audit and risk committee believes that such a change would be in the best interests of the Company and its stockholders.

Representatives of PwC are expected to be present virtually at the Annual Meeting. They will have an opportunity to make a statement if they desire to do so and are expected to be available to respond to appropriate questions from our stockholders.

Recommendation

 

28 | HealthEquity, Inc. 2023 Proxy Statement

Proposal No. 2 Ratification of Appointment of Independent Registered Public Accounting Firm

Fees Paid to the Independent Registered Public Accounting Firm

The following table presents fees for professional audit services and other services rendered to us by PwC for the fiscal years ended January 31, 2023 and 2022.

​

(1)

Audit fees consist of fees billed for professional services rendered in connection with the audit of our annual financial statements, review of our quarterly financial statements, services rendered in connection with registration statements on Form S-8, services performed in connection with the filing of a prospectus supplement, and services that are normally provided by PwC in connection with statutory and regulatory filings or engagements for those fiscal years.

​

(2)

Audit-related fees consist of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of our consolidated financial statements and are not reported under “Audit fees.”

​

(3)

Tax fees consist of fees billed for professional services rendered by PwC for tax advice.

​

(4)

All other fees consist of the aggregate fees billed for products and services provided and not otherwise included in “Audit fees,” “Audit-related fees” or “Tax fees”.

​

Auditor Independence

In the fiscal year ended January 31, 2023, there were no other professional services provided by PwC that would have required our audit and risk committee to consider their compatibility with maintaining the independence of PwC.

Audit and Risk Committee Policy on Pre-Approval of Audit and Permitted Non-Audit and Tax Services of Independent Registered Public Accounting Firm

Our audit and risk committee has established a policy governing our use of the services of our independent registered public accounting firm. Under the policy, our audit and risk committee is required to pre-approve all audit and permitted non-audit and tax services performed by our independent registered public accounting firm in order to ensure that the provision of such services do not impair such accounting firm’s independence. All fees paid to PwC for the fiscal years ended January 31, 2023 and 2022 were pre-approved by our audit and risk committee.

Vote Required

The ratification of the appointment of PwC requires the affirmative vote of a majority of the shares of our common stock present in person or by proxy at the Annual Meeting and entitled to vote thereon. Abstentions will have the effect of a vote AGAINST the proposal.

 

HealthEquity, Inc. 2023 Proxy Statement | 29

   

Audit and Risk Committee Report

The information contained in the following Audit and Risk Committee Report shall not be deemed to be soliciting material or to be filed with the Securities and Exchange Commission, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent that HealthEquity, Inc., or the Company, specifically incorporates it by reference in such filing.

As members of the audit and risk committee, we are responsible for overseeing the Company’s accounting and financial reporting processes, the Company’s risk management and risk governance structure, the performance of the Company’s internal audit function and the audit of the Company’s financial statements. In addition, the audit and risk committee is responsible for reviewing and approving the Company’s risk management plan for each fiscal year. During the fiscal year ended January 31, 2023, the audit and risk committee held 11 meetings—with and without management present—at which the audit and risk committee reviewed and discussed, among other items, the Company’s operational auditing procedures, the annual plan and scope of work of the independent auditor, and the requirements of, and the Company’s compliance with Section 404 of the Sarbanes-Oxley Act, including the Public Company Accounting Oversight Board’s, or PCAOB’s, Auditing Standard No. 5 regarding the audit of internal control over financial reporting.

The audit and risk committee has oversight responsibility for management’s implementation of procedures for identifying, monitoring and communicating the risks inherent to the Company’s business, including financial and strategic risks and risks regarding the Company’s operations and reputation (including cyber risks). The audit and risk committee receives regular reports from management regarding the Company’s assessment of risk and regularly reports to the full board of directors. In addition, the cybersecurity and technology committee refers to the audit and risk committee any matters that have come to the attention of the cybersecurity and technology committee that fall under the oversight of the audit and risk committee, or are otherwise relevant for noting or consideration by the audit and risk committee, including any matters relating to the Company’s internal control over financial reporting.

The audit and risk committee has established a telephone and Internet whistleblower hotline available to employees of the Company for the confidential and anonymous submission of suspected violations, including complaints regarding accounting, internal accounting controls or auditing matters, harassment, fraud and policy violations. The audit and risk committee receives regular updates on submissions to the hotline.

The audit and risk committee has reviewed and discussed the Company’s audited consolidated financial statements with management and PricewaterhouseCoopers LLP, or PwC, the Company’s independent registered public accounting firm. The audit and risk committee has discussed with PwC the matters required to be discussed by Auditing Standard No. 1301, Communications with Audit Committees, issued by the PCAOB.

The audit and risk committee has received and reviewed the written disclosures and the letter from PwC required by the applicable requirements of the PCAOB regarding PwC’s communications with the audit and risk committee concerning independence, and has discussed with PwC its independence. In such discussions, the audit and risk committee considered, among other things, the length of time the PwC audit partner and other staff have been on the engagement, and other relationships that may impact the firm’s objectivity and independence.

Based on the review and discussions referred to above, the audit and risk committee recommended to the board of directors that the Company’s audited consolidated financial statements be included in the Company’s Annual Report on Form 10-K for the year ended January 31, 2023, for filing with the Securities and Exchange Commission.

Respectfully submitted by the members of the audit and risk committee of the board of directors:

Adrian Dillon (Chair)
Paul Black
Frank Corvino
Evelyn Dilsaver
Rajesh Natarajan
Gayle Wellborn

 

30 | HealthEquity, Inc. 2023 Proxy Statement

   

Proposal No. 3
Advisory Vote on Compensation Paid to Our Named Executive Officers

Section 14A of the Exchange Act enables our stockholders to vote to approve, on a non-binding, advisory basis, the fiscal 2023 compensation paid to our named executive officers as disclosed in the section of this proxy statement titled “Executive Compensation,” including the Compensation Discussion and Analysis, compensation tables and narrative discussion that follows the compensation tables. This proposal, commonly known as a “say-on-pay” proposal, gives our stockholders the opportunity to express their views on the compensation paid to our named executive officers. Our stockholders previously approved, on a non-binding, advisory basis, that we conduct a “say-on-pay” vote on an annual basis.

As described in detail in the section of this proxy statement titled “Executive Compensation,” our compensation program for our named executive officers is designed to (i) attract and retain highly qualified named executive officers, who are critical to our long-term success; (ii) motivate and reward our named executive officers for achieving our short-term business and long-term strategic goals; and (iii) align the financial interests of our named executive officers with those of our stockholders.

Stockholders are urged to read the Compensation Discussion and Analysis, compensation tables and narrative discussion that follows the compensation tables in this proxy statement, which discuss in greater detail our compensation philosophy, policies and practices. Our board of directors believes that the compensation paid to our named executive officers is necessary, appropriate and properly aligned with our compensation philosophy and policies.

This vote is not intended to address any specific item of compensation, but rather the overall compensation paid to our named executive officers, and the philosophy, policies and practices described in this proxy statement. Accordingly, stockholders are being asked to indicate their support for the compensation paid to our named executive officers as described in this proxy statement by approving the following advisory resolution:

RESOLVED, that the stockholders of the Company approve, on a non-binding, advisory basis, the compensation paid to the Company’s named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion.

Although the vote is intended to be advisory and non-binding, we value the views of our stockholders, and the board of directors and our talent, compensation and culture committee will consider the voting results, along with other relevant factors, in connection with their ongoing evaluation of our executive compensation program.

Recommendation

Vote Required

The approval, on a non-binding, advisory basis, of the compensation paid to our named executive officers as described in this proxy statement requires the affirmative vote of the holders of a majority of the shares of our common stock present in person or by proxy at the Annual Meeting and entitled to vote thereon. Abstentions will have the effect of a vote AGAINST the proposal. Broker non-votes will have no effect on this proposal.

 

HealthEquity, Inc. 2023 Proxy Statement | 31

   

Executive Officers

The following table identifies certain information about our executive officers as of May 12, 2023. Each executive officer serves at the discretion of our board of directors and holds office until his or her successor is duly elected and qualified or until his or her earlier resignation or removal. There are no family relationships among any of our directors or executive officers.

 

32 | HealthEquity, Inc. 2023 Proxy Statement

Executive Officers

 

HealthEquity, Inc. 2023 Proxy Statement | 33

   

Talent, Compensation and Culture Committee Report

Our talent, compensation and culture committee has reviewed and discussed the Compensation Discussion and Analysis with management. Based on such review and discussion, our talent, compensation and culture committee has recommended to the board of directors that the Compensation Discussion and Analysis be included in this proxy statement.

Respectfully submitted by the members of the talent, compensation and culture committee of the board of directors:

Debra McCowan (Chair)
Paul Black
Frank Corvino
Stuart Parker
Robert Selander

 

34 | HealthEquity, Inc. 2023 Proxy Statement

   

Compensation Discussion and Analysis

This Compensation Discussion and Analysis describes the compensation program for our named executive officers. During the fiscal year ended January 31, 2023, these individuals were:

•

Jon Kessler, our President and Chief Executive Officer (our “CEO”);

​

•

Stephen Neeleman M.D., our Founder and Vice Chairman (our “Founder and Vice Chairman”);

​

•

Tyson Murdock, our Executive Vice President and Chief Financial Officer (our “CFO”);

​

•

Elimelech Rosner, our Executive Vice President and Chief Technology Officer (our “CTO”);

​

•

Larry Trittschuh, our Executive Vice President and Chief Security Officer (our “CSO”); and

​

•

Edward Bloomberg, our former Executive Vice President and Chief Operating Officer (our “Former COO”).

​

This Compensation Discussion and Analysis describes the material elements of our executive compensation program during the fiscal year ended January 31, 2023. It also provides an overview of our executive compensation philosophy and objectives. Finally, it analyzes how and why our talent, compensation and culture committee, which we refer to as the compensation committee in this Compensation Discussion & Analysis, arrived at the specific compensation decisions for our executive officers, including the named executive officers, for the fiscal year ended January 31, 2023, including the key factors that the compensation committee considered in determining their compensation.

Executive Summary

Fiscal Year 2023 Business Highlights

During the fiscal year ended January 31, 2023, we continued to execute on our core financial and business objectives. Our key financial and operational results were as follows:

•

Overall revenue of  $861.7 million, representing an increase of 14% from the fiscal year ended January 31, 2022;

​

•

Net loss of  $26.1 million, compared to net loss of  $44.3 million in the fiscal year ended January 31, 2022;

​

•

Net loss per diluted share of  $0.31, compared to net loss per diluted share of  $0.53 for the fiscal year ended January 31, 2022;

​

•

Adjusted earnings before interest, taxes, depreciation, and amortization (“Adjusted EBITDA”)(1) of  $272.3 million, representing an increase of 15% from the fiscal year ended January 31, 2022;

​

•

8.0 million health savings accounts (“HSAs”) at the end of the fiscal year ended January 31, 2023, representing an increase of 11% compared to the fiscal year ended January 31, 2022;

​

•

New HSAs from sales of 971,000; and

​

•

HSA Assets of  $22.1 billion as of January 31, 2023, representing an increase of 13% from the fiscal year ended January 31, 2022.

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(1)

Adjusted EBITDA is not a generally accepted accounting principles (“GAAP”) financial measure. The definition of this non-GAAP financial measure, and a reconciliation to the most comparable GAAP measure, is included as Exhibit A to this proxy statement.

​

 

HealthEquity, Inc. 2023 Proxy Statement | 35

Compensation Discussion and Analysis

Fiscal Year 2023 Executive Compensation Highlights

The following key compensation actions were taken with respect to the named executive officers for the fiscal year ended January 31, 2023 in order to better align their compensation with those holding similar executive positions within our compensation peer group:

Pay-for-Performance Discussion

We believe that our executive compensation program is reasonable, competitive, and appropriately balances the goals of attracting, motivating, rewarding, and retaining our executive officers. To ensure that our executive officers’ interests are aligned with those of our stockholders and to motivate and reward individual initiative and effort, the compensation committee seeks to ensure that a majority of their target annual total direct compensation opportunity is “at-risk” and will vary above or below target levels commensurate with our performance.

We emphasize performance-based compensation that appropriately rewards our executive officers for delivering financial, operational, and strategic results that meet or exceed pre-established goals through our annual cash bonus plan, as well as through the grant of both time-based and performance-based vesting equity awards for shares of our common stock, which we use to deliver long-term incentive compensation opportunities.

 

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Compensation Discussion and Analysis

Executive Compensation Policies and Practices

We endeavor to maintain sound governance standards consistent with our executive compensation policies and practices. The compensation committee evaluates our executive compensation program on a regular basis to ensure that it is consistent with our short-term and long-term goals given the dynamic nature of our business and the market in which we compete for executive talent. The following policies and practices were in effect during the fiscal year ended January 31, 2023:

 

HealthEquity, Inc. 2023 Proxy Statement | 37

Compensation Discussion and Analysis

FY23 Executive Officer Changes

New Chief Technology Officer

On March 15, 2022, Mr. Rosner started his employment as our Chief Technology Officer. Mr. Rosner’s initial compensation of a $550,000 base salary, 75% target bonus, one-time new hire sign-on bonus of  $800,000 and $8.0 million new hire equity award was determined after consultation with our compensation consultant and through an arm’s-length negotiation at the time of Mr. Rosner’s hiring.

Chief Operating Officer Termination

On August 1, 2022, Mr. Bloomberg’s employment as our Chief Operating Officer was involuntarily terminated without cause. Mr. Bloomberg continued serving in an interim advisory role for the Company through November 30, 2022 and received his normal compensation during that interim period. Upon termination of his employment, Mr. Bloomberg received severance for a termination without cause pursuant to the terms of his employment agreement. Please see “Potential Payments Upon Termination or Change In Control” below for more information on the severance terms included in our employment agreements, including for Mr. Bloomberg.

Executive Compensation Philosophy and Program Design

Compensation Philosophy

Our executive compensation program is guided by our overarching philosophy of only paying for demonstrable performance. Consistent with this philosophy, we have designed our executive compensation program to achieve the following primary objectives:

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Provide compensation and benefit levels that will attract, retain, motivate, and reward a highly talented team of executive officers within the context of responsible cost management;

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•

Establish a direct link between our financial and operational results and strategic objectives and the compensation of our executive officers; and

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•

Align the interests and objectives of our executive officers with those of our stockholders by linking the long-term incentive compensation opportunities to stockholder value creation and their cash incentives to our annual performance.

​

Program Design

We structure the annual target total direct compensation of our executive officers, including the named executive officers, using three principal elements: base salary, an annual cash bonus opportunity, and a long-term incentive compensation opportunity in the form of equity awards for shares of our common stock. We also design our executive compensation program based on a variety of factors, with the primary goals being to align the interests of our executive officers and stockholders and to link pay with performance. We evaluate performance over both short-term (annual) and multi-year periods based on our financial and operational performance, including results for certain key performance measures.

Governance of Executive Compensation Program

Role of the Compensation Committee

The compensation committee discharges the responsibilities of our board of directors relating to the compensation of our executive officers, including the named executive officers. The compensation committee has overall responsibility for: (i) overseeing our compensation and benefits policies generally; (ii) overseeing, evaluating, and approving the compensation plans, policies, and programs applicable to our CEO as well as our other executive officers; (iii) overseeing, evaluating, and recommending to our full board of directors for approval compensation plans and arrangements for the non-employee members of our board of directors; (iv) determining and overseeing the process of evaluating our CEO’s performance; and (v) overseeing the preparation of, reviewing, and approving this Compensation Discussion and Analysis.

 

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Compensation Discussion and Analysis

With respect to our CEO, the compensation committee sets, and with respect to our other executive officers, the compensation committee reviews and approves their:

•

annual base salaries;

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•

annual cash bonus opportunities and payments;

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•

long-term incentive compensation;

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employment agreements (including post-employment compensation arrangements); and

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•

other compensation, perquisites, and other personal benefits, if any.

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The compensation committee’s practice of developing and maintaining compensation arrangements that are competitive includes a balance between hiring and retaining the best possible talent and maintaining a reasonable and responsible cost structure.

Role of Chief Executive Officer and Members of Our Management Team

In discharging its responsibilities, the compensation committee works with members of our management team, including our CEO. The management team assists the compensation committee by providing information on Company and individual performance, and management’s perspective and recommendations on compensation matters. The compensation committee solicits and reviews our CEO’s recommendations and proposals with respect to adjustments to annual cash compensation, long-term incentive compensation opportunities, program structures, and other compensation-related matters for our executive officers (other than with respect to his own compensation). The compensation committee reviews and discusses these recommendations and proposals with our CEO and uses them as one factor in determining and approving the compensation for our executive officers (other than our CEO) and other members of our executive leadership team. Our CEO recuses himself from all discussions and recommendations regarding his own compensation.

Role of Compensation Consultant

The compensation committee has the authority to retain and terminate compensation consultants, legal counsel, and other advisors as it may deem necessary to assist it in the performance of its duties and responsibilities, without consulting or obtaining the approval of the senior management of the Company. The compensation committee recognizes the importance of objective, independent expertise and advice in carrying out its responsibilities and, therefore, engages an external compensation consultant to assist it by providing information, analysis, and other advice relating to our executive compensation program and the decisions resulting from its annual executive compensation review.

The compensation committee engaged Semler Brossy, a national compensation consulting firm, as its compensation advisor for the fiscal year ended January 31, 2023. The compensation consultant reports directly, and is directly accountable, to the compensation committee, and the compensation committee has the sole authority to retain, terminate, and obtain the advice of Semler Brossy at the Company’s expense. The compensation committee selected Semler Brossy as its compensation consultant because of the firm’s expertise and reputation and the fact that Semler Brossy provides no services to us other than its services to the compensation committee, has no other ties to management that could jeopardize its independent status, and has strong internal governance policies that help ensure that it maintains its independence.

During the fiscal year ended January 31, 2023, our compensation consultants attended the meetings of the compensation committee (both with and without management present) as requested by the compensation committee and consulted with the compensation committee chair and other members between meetings.

The compensation committee regularly reviews the objectivity and independence of the advice provided by its compensation advisors on executive and non-employee director compensation. The compensation committee considered the independence of Semler Brossy under the relevant SEC rules and NASDAQ listing standards and determined that its work does not give rise to any conflicts of interest.

Compensation Review Cycle

The compensation committee reviews the base salary levels, annual cash bonus opportunities, and long-term incentive compensation opportunities of our executive officers, including the named executive officers, during the first half of each fiscal year, or more frequently as warranted. Adjustments, if any, are generally effective shortly thereafter.

 

HealthEquity, Inc. 2023 Proxy Statement | 39

Compensation Discussion and Analysis

Compensation-Setting Process

With the assistance of its compensation consultant, Semler Brossy, the compensation committee targets total direct compensation for our executive officers at the 50th percentile of the market, based on our compensation peer group. However, our compensation committee expects to make exceptions to such guidelines to reflect individual performance and other relevant factors as further discussed below. Total direct compensation for this purpose is comprised of base salary, annual cash incentives and long-term equity incentives. When selecting and setting the amount of each compensation element, the compensation committee may consider the following factors:

•

our performance against the financial and operational objectives established by the compensation committee and our board of directors;

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•

each individual executive officer’s skills, experience, and qualifications relative to other similarly situated executives at the companies in our compensation peer group and/or in selected broad-based compensation surveys;

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the scope of each executive officer’s role compared to other similarly situated executives at the companies in our compensation peer group and/or in selected broad-based compensation surveys;

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the performance of each individual executive officer, based on a subjective assessment of his or her contributions to our overall performance, ability to lead his or her business unit or function, and work as part of a team, all of which reflect our core values;

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compensation parity among our executive officers;

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our financial performance relative to our peers; and

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the compensation practices of our compensation peer group and the positioning of each executive officer’s compensation relative to the compensation levels of similarly situated executives at the companies in our compensation peer group and/or in selected broad-based compensation surveys.

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These factors provide the framework for compensation decision making and final decisions regarding the compensation opportunity for each executive officer. No single factor is determinative in setting pay levels, nor was the impact of any factor on the determination of pay levels quantifiable.

Competitive Positioning

For purposes of comparing our executive compensation against the competitive market, the compensation committee reviews and considers the compensation levels and practices of a group of comparable companies. During much of the fiscal year ended January 31, 2023, the compensation committee referenced the following compensation peer group for purposes of understanding the competitive market:

The companies in this compensation peer group were selected on the basis of their similarity to us in size, as determined using the following criteria:

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similar revenue size—approximately 1/3x to approximately 3.0x our last four fiscal quarters’ revenue; and

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•

similar market capitalization—approximately 1/3x to approximately 3.0x our market capitalization.

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The compensation committee further refined the peer group by considering each company’s:

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profitability—positive operating income;

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revenue growth—equal to or greater than approximately 10%;

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Compensation Discussion and Analysis

•

similar industry focus—financial technology and technology-enabled business services; and

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geographic location.

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To analyze the compensation practices of the companies in our compensation peer group, the compensation committee’s compensation consultant gathers data from public filings (primarily proxy statements). In the fiscal year ended January 31, 2023, this market data was then used as a reference point for the compensation committee to assess our current incentive compensation levels in the course of its deliberations on compensation forms and amounts. Based on a review of market practices among our compensation peer group, as a general guideline, our compensation committee targets the 50th percentile of the peer group executive officer compensation. However, our compensation committee expects to make exceptions to such guidelines to reflect individual performance and other relevant factors as further described above.

In selecting peers, our compensation committee seeks to maintain consistency from year to year, other than for events potentially calling for immediate elimination of a peer group member. In September 2022, the compensation committee, with the assistance of Semler Brossy, modified our peer group by removing Cornerstone OnDemand, Inc., and Inovalon Holdings, Inc., because each was acquired. In addition, the compensation committee, with the assistance of Semler Brossy, added Evolent Health, Inc. to our peer group. The compensation committee has and will continue to review our compensation peer group at least annually and make adjustments to its composition, taking into account changes in both our business and the businesses of the companies in the peer group.

Advisory Vote on Named Executive Officer Compensation

At our 2022 annual meeting of stockholders, our “say-on-pay” proposal resulted in a favorable vote from approximately 99% of the shares present and entitled to vote at the annual meeting. We believe the level of support was due to the appropriateness of the overall design of our executive compensation program and our communications with our stockholders and responsiveness to stockholder feedback obtained through our stockholder engagement process. The compensation committee noted the results of the vote and made no changes to our compensation program or policies as a result.

Frequency of Say-on-Pay Vote

Consistent with the preference expressed by our stockholders at our 2017 annual meeting of stockholders, our board of directors decided that the Company will include a vote to approve, on a non-binding, advisory basis, the compensation paid to our named executive officers in our proxy materials every year until the next required advisory vote to approve the frequency of future advisory votes on named executive officer compensation, which will occur at the 2023 annual meeting of stockholders. For additional detail on this proposal, see “Proposal No. 4—Advisory Vote on the Frequency of Future Advisory Votes on Compensation Paid to Our Named Executive Officers.”

Individual Compensation Elements

In the fiscal year ended January 31, 2023, the primary elements of our executive compensation program consisted of base salary, an annual cash bonus opportunity, and long-term incentive compensation in the form of equity awards. While the compensation committee reviews each of these compensation elements, as well as target total direct compensation, it does not use any specific formula to determine the allocation between fixed and variable compensation in making its decisions. Rather, the compensation committee considers together all elements that comprise the target total direct compensation of our executive officers, including the named executive officers, rather than each element in isolation.

 

HealthEquity, Inc. 2023 Proxy Statement | 41

Compensation Discussion and Analysis

Base Salary

Generally, we establish the initial base salaries of our executive officers through arm’s-length negotiation at the time we hire the individual executive officer, taking into account his or her position, qualifications, experience, and the base salaries of our other executive officers and executive officers in similar roles at peer companies. Thereafter, the compensation committee reviews the base salaries of our executive officers annually and makes adjustments to base salaries as it determines to be necessary or appropriate.

In the first quarter of the fiscal year ended January 31, 2023, the compensation committee reviewed the base salaries of our executive officers, including the named executive officers, taking into consideration a competitive market analysis prepared by its compensation consultant, the recommendations of our CEO (except with respect to his own base salary), and the other factors described above. As a result of such market review, the annual base salaries of our CEO, Founder and Vice Chairman, CSO, and Former COO remained unchanged. In addition, the compensation committee approved an increase in the annual base salary for our CFO in order to better align his compensation with those holding similar executive positions within our compensation peer group. The annual base salary for our CFO increased by 14% from its previous year-end level for the fiscal year ended January 31, 2022 in order to (i) help ensure retention and (ii) ensure consistency with the general guideline established by our compensation committee of targeting total direct compensation for executive officers at the 50th percentile of the market, based on our compensation peer group. In connection with the hiring of our CTO effective March 15, 2022, the compensation committee approved an annual base salary for our CTO of  $550,000.The base salaries of the named executive officers for the fiscal years ended January 31, 2023 and 2022 were as follows:

 

42 | HealthEquity, Inc. 2023 Proxy Statement

Compensation Discussion and Analysis

​

(1)

Any changes in base salaries are generally effective April 1st of the fiscal year in which the increases are approved.

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(2)

Mr. Rosner joined the Company on March 15, 2022.

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In connection with the compensation committee’s review of our executive officers’ compensation for our fiscal year ending January 31, 2024, the compensation committee approved an increase to the base salary for our Founder and Vice Chairman, which increased from $400,000 to $450,000, effective April 1, 2023. The compensation committee made this change in order to compensate our Founder and Vice Chairman for additional responsibilities he has undertaken in his role.

Annual Cash Bonuses

For the fiscal year ended January 31, 2023, we had a cash bonus plan, the HealthEquity Executive Bonus Plan for the fiscal year ended January 31, 2023 (the “2023 Executive Bonus Plan”), for our executive officers, including our CEO, Founder and Vice Chairman, CFO, CTO, CSO, and Former COO. The compensation committee established each executive officer’s target annual cash bonus opportunity and set the formula and corporate and personal performance measures for bonus payments at the beginning of the fiscal year ended January 31, 2023. Under the 2023 Executive Bonus Plan, each executive officer’s target annual cash bonus opportunity was expressed as a percentage of each individual’s base salary. The bonus amount funded under the 2023 Executive Bonus Plan was determined based on the achievement of a percentage based on the target performance level taking into account both Company performance and individual and team performance. The annual cash bonus that our named executive officers would actually earn under the 2023 Executive Bonus Plan was based on our achievement with respect to certain corporate performance measures for the fiscal year ended January 31, 2023.

Target Annual Cash Bonus Opportunities

Each of our executive officers participating in the 2023 Executive Bonus Plan was assigned a target annual cash bonus opportunity, the amount of which was calculated as a percentage of his or her base salary. In March 2022, the compensation committee reviewed the target annual cash bonus opportunities of our executive officers, taking into consideration a competitive market analysis prepared by its compensation consultant, the recommendations of our CEO (except with respect to his own target annual cash bonus opportunity), and the other factors described above. Following this review, the compensation committee determined to maintain the annual cash bonus opportunities for our CEO, Founder and Vice Chairman, CFO, CSO, and Former COO at their levels for the fiscal year ended January 31, 2023.Our CTO’s target annual cash bonus opportunity was determined through an arm’s-length negotiation in connection with his initial appointment in March 2022. The target annual cash bonus opportunities of the named executive officers for the fiscal year ended January 31, 2023, were as follows:

In connection with the compensation committee’s review of our executive officers’ compensation for our fiscal year ending January 31, 2024, the compensation committee approved an increase to the target annual cash bonus opportunity

 

HealthEquity, Inc. 2023 Proxy Statement | 43

Compensation Discussion and Analysis

for our CSO, which increased from 50% to 75%, effective April 1, 2023. The compensation committee made this change in order to compensate our CSO for additional responsibilities he has undertaken in his role and to better align the compensation of our CSO with that of our other executive officers.

2023 Executive Bonus Plan Formula

For purposes of the 2023 Executive Bonus Plan, the actual cash bonus payment was based on corporate performance measures and paid as a percentage of the target annual cash bonus opportunity, calculated as follows: