DIGITALOCEAN HOLDINGS, INC., DEF 14A filed on 4/20/2023
Proxy Statement (definitive)
v3.23.1
Document and Entity Information
12 Months Ended
Dec. 31, 2022
Cover [Abstract]  
Document Type DEF 14A
Amendment Flag false
Entity Registrant Name DigitalOcean Holdings, Inc.
Entity Central Index Key 0001582961
v3.23.1
Pay vs Performance Disclosure
12 Months Ended
Dec. 31, 2022
USD ($)
Dec. 31, 2021
USD ($)
Pay vs Performance Disclosure [Table]    
Pay vs Performance [Table Text Block]
Pay Versus Performance
We are required by SEC rules to disclose the following information regarding compensation paid to our Chief Executive Officer (our “PEO”) and our other named executive officers (collectively, our “non-PEO NEOs”). The amounts set forth below under the headings “Compensation Actually Paid to PEO” and “Average Compensation Actually Paid to non-PEO NEOs” have been calculated in a manner consistent with Item 402(v) of Regulation S-K. The footnotes below set forth the adjustments from the total compensation for each of our NEOs reported in the Summary Compensation Table above.
The following table sets forth additional compensation information of our PEO and our non-PEO NEOs along with total shareholder return (“TSR”), net income and our Company-selected measure (the sum of revenue growth and free cash flow margin) for fiscal years 2021 and 2022. Since the Company completed its IPO in 2021, data from fiscal year 2020 is excluded from the table.
 
 
 
 
 
Value of Initial Fixed $100
Investment Based On:
 
 
Fiscal
Year(1)
Summary
Compensation
Table Total
for PEO(2)
($)
Compensation
Actually Paid
to PEO
($)
Average Summary
Compensation
Table Total
for non-PEO
NEOs(2)
($)
Average
Compensation
Actually Paid
to non-PEO
NEOs
($)
Total
Shareholder
Return(3)
($)
Peer Group
Total
Shareholder
Return(3)
($)
Net Income
($ in
thousands)
Revenue Growth Plus Free Cash Flow Margin
  (%)(4)
2022
797,179
(200,132,194)
4,430,909
(13,942,162)
59.93
94.73
(24,283)
47
2021
82,536,062
293,335,312
7,774,582
13,883,786
189.01
131.92
(19,503)
41

(1)
The PEO and non-PEO NEOs included in the above compensation table reflect the following:
Year
PEO
Non-PEO NEOs
2022
Yancey Spruill
William Sorenson, Carly Brantz, Jeffrey Guy, Gabriel Monroy
2021
Yancey Spruill
Gabriel Monroy, Alan Shapiro
(2)
In determining the compensation actually paid (“CAP”) to our PEO and our non-PEO NEOs, we deducted or added back the following amounts from or to the total amounts of compensation reported in the table above for each covered year. Grant date fair value represents the grant date fair value of equity-based awards granted in each year. Fair value adjustments reflect adjustments to the value of equity awards as calculated in accordance with the rules prescribed under Item 402(v) of Regulation S-K and in accordance with ASC Topic 718, which included the categories of adjustments for each year as set forth below. For additional information regarding the determination of fair value, see Note 11. Stock-Based Compensation of the audited consolidated financial statements included in our Annual Report.
PEO
2022
($)
2021
($)
- Grant Date Fair Value of Option Awards and Stock Awards Granted in Fiscal Year
(81,236,800)
+ Fair Value at Fiscal Year-End of Outstanding and Unvested Option Awards and Stock Awards Granted in Fiscal Year
177,891,450
+/- Change in Fair Value of Outstanding and Unvested Option Awards and Stock Awards Granted in Prior Fiscal Years
(168,349,099)
84,906,975
+ Fair Value at Vesting of Option Awards and Stock Awards Granted in Fiscal Year That Vested During Fiscal Year
+/- Change in Fair Value as of Vesting Date of Option Awards and Stock Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year
(32,580,273)
29,237,624
- Fair Value as of Prior Fiscal Year-End of Option Awards and Stock Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year
Total Added (or Deducted)
(200,929,372)
210,799,249
Non-PEO NEOs
2022
($)
2021
($)
- Grant Date Fair Value of Option Awards and Stock Awards Granted in Fiscal Year
(3,925,706)
(7,191,913)
+ Fair Value at Fiscal Year-End of Outstanding and Unvested Option Awards and Stock Awards Granted in Fiscal Year
459,886
10,381,805
+/- Change in Fair Value of Outstanding and Unvested Option Awards and Stock Awards Granted in Prior Fiscal Years
(9,150,092)
1,642,694
+ Fair Value at Vesting of Option Awards and Stock Awards Granted in Fiscal Year That Vested During Fiscal Year
161,281
69,444
+/- Change in Fair Value as of Vesting Date of Option Awards and Stock Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year
(5,918,440)
1,207,174
- Fair Value as of Prior Fiscal Year-End of Option Awards and Stock Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year
Total Added (or Deducted)
(18,373,071)
6,109,204
(3)
Peer Group TSR reflects the Company’s peer group (S&P Information Technology Index) used in the stock performance graph contained in our Annual Report. The values assume $100 was invested in each of our common stock and our peer group index at their respective closing prices on March 24, 2021 (the date our common stock commenced trading on the NYSE), including the reinvestment of dividends.
(4)
Represents the sum of revenue growth and free cash flow margin. Revenue growth is defined as the percentage increase in revenue from the prior year. Free cash flow is a non-GAAP financial measure that we define as net cash provided by operating activities less purchases of property and equipment, capitalized internal-use software costs, purchase of intangible assets, and excluding acquisition and integration related costs. Free cash flow margin is calculated as free cash flow divided by total revenue.
 
Company Selected Measure Name Revenue Growth Plus Free Cash Flow Margin  
Named Executive Officers, Footnote [Text Block]
(1)
The PEO and non-PEO NEOs included in the above compensation table reflect the following:
Year
PEO
Non-PEO NEOs
2022
Yancey Spruill
William Sorenson, Carly Brantz, Jeffrey Guy, Gabriel Monroy
2021
Yancey Spruill
Gabriel Monroy, Alan Shapiro
 
Peer Group Issuers, Footnote [Text Block]
(3)
Peer Group TSR reflects the Company’s peer group (S&P Information Technology Index) used in the stock performance graph contained in our Annual Report. The values assume $100 was invested in each of our common stock and our peer group index at their respective closing prices on March 24, 2021 (the date our common stock commenced trading on the NYSE), including the reinvestment of dividends.
 
PEO Total Compensation Amount $ 797,179 $ 82,536,062
PEO Actually Paid Compensation Amount $ (200,132,194) 293,335,312
Adjustment To PEO Compensation, Footnote [Text Block]
(2)
In determining the compensation actually paid (“CAP”) to our PEO and our non-PEO NEOs, we deducted or added back the following amounts from or to the total amounts of compensation reported in the table above for each covered year. Grant date fair value represents the grant date fair value of equity-based awards granted in each year. Fair value adjustments reflect adjustments to the value of equity awards as calculated in accordance with the rules prescribed under Item 402(v) of Regulation S-K and in accordance with ASC Topic 718, which included the categories of adjustments for each year as set forth below. For additional information regarding the determination of fair value, see Note 11. Stock-Based Compensation of the audited consolidated financial statements included in our Annual Report.
PEO
2022
($)
2021
($)
- Grant Date Fair Value of Option Awards and Stock Awards Granted in Fiscal Year
(81,236,800)
+ Fair Value at Fiscal Year-End of Outstanding and Unvested Option Awards and Stock Awards Granted in Fiscal Year
177,891,450
+/- Change in Fair Value of Outstanding and Unvested Option Awards and Stock Awards Granted in Prior Fiscal Years
(168,349,099)
84,906,975
+ Fair Value at Vesting of Option Awards and Stock Awards Granted in Fiscal Year That Vested During Fiscal Year
+/- Change in Fair Value as of Vesting Date of Option Awards and Stock Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year
(32,580,273)
29,237,624
- Fair Value as of Prior Fiscal Year-End of Option Awards and Stock Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year
Total Added (or Deducted)
(200,929,372)
210,799,249
 
Non-PEO NEO Average Total Compensation Amount $ 4,430,909 7,774,582
Non-PEO NEO Average Compensation Actually Paid Amount $ (13,942,162) 13,883,786
Adjustment to Non-PEO NEO Compensation Footnote [Text Block]
(2)
In determining the compensation actually paid (“CAP”) to our PEO and our non-PEO NEOs, we deducted or added back the following amounts from or to the total amounts of compensation reported in the table above for each covered year. Grant date fair value represents the grant date fair value of equity-based awards granted in each year. Fair value adjustments reflect adjustments to the value of equity awards as calculated in accordance with the rules prescribed under Item 402(v) of Regulation S-K and in accordance with ASC Topic 718, which included the categories of adjustments for each year as set forth below. For additional information regarding the determination of fair value, see Note 11. Stock-Based Compensation of the audited consolidated financial statements included in our Annual Report.
Non-PEO NEOs
2022
($)
2021
($)
- Grant Date Fair Value of Option Awards and Stock Awards Granted in Fiscal Year
(3,925,706)
(7,191,913)
+ Fair Value at Fiscal Year-End of Outstanding and Unvested Option Awards and Stock Awards Granted in Fiscal Year
459,886
10,381,805
+/- Change in Fair Value of Outstanding and Unvested Option Awards and Stock Awards Granted in Prior Fiscal Years
(9,150,092)
1,642,694
+ Fair Value at Vesting of Option Awards and Stock Awards Granted in Fiscal Year That Vested During Fiscal Year
161,281
69,444
+/- Change in Fair Value as of Vesting Date of Option Awards and Stock Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year
(5,918,440)
1,207,174
- Fair Value as of Prior Fiscal Year-End of Option Awards and Stock Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year
Total Added (or Deducted)
(18,373,071)
6,109,204
 
Compensation Actually Paid vs. Total Shareholder Return [Text Block]
Pay versus Performance Descriptive Disclosure
The graphs below show the relationships between CAP to our PEO and the average CAP to our non-PEO NEOs to each of (i) the Company’s TSR and the TSR of the S&P Information Technology Index, (ii) our net income and (iii) our Company-Selected Measure, the sum of revenue growth and free cash flow margin.
graphic
 
Compensation Actually Paid vs. Net Income [Text Block]
Pay versus Performance Descriptive Disclosure
The graphs below show the relationships between CAP to our PEO and the average CAP to our non-PEO NEOs to each of (i) the Company’s TSR and the TSR of the S&P Information Technology Index, (ii) our net income and (iii) our Company-Selected Measure, the sum of revenue growth and free cash flow margin.
graphic
 
Compensation Actually Paid vs. Company Selected Measure [Text Block]
Pay versus Performance Descriptive Disclosure
The graphs below show the relationships between CAP to our PEO and the average CAP to our non-PEO NEOs to each of (i) the Company’s TSR and the TSR of the S&P Information Technology Index, (ii) our net income and (iii) our Company-Selected Measure, the sum of revenue growth and free cash flow margin.
graphic
 
Total Shareholder Return Vs Peer Group [Text Block]
Pay versus Performance Descriptive Disclosure
The graphs below show the relationships between CAP to our PEO and the average CAP to our non-PEO NEOs to each of (i) the Company’s TSR and the TSR of the S&P Information Technology Index, (ii) our net income and (iii) our Company-Selected Measure, the sum of revenue growth and free cash flow margin.
graphic
 
Tabular List [Table Text Block]
Pay versus Performance Tabular List
The following table provides what we believe are the most important financial performance measures we used to link CAP to our PEO and non-PEO NEOs to Company performance in the most recent fiscal year, each of which is described in more detail in the section titled “Executive Compensation—Compensation Discussion and Analysis”:
Performance Measure
Revenue growth plus free cash flow margin
Revenue growth
Free cash flow margin
 
Total Shareholder Return Amount $ 59.93 189.01
Peer Group Total Shareholder Return Amount 94.73 131.92
Net Income (Loss) $ (24,283,000) $ (19,503,000)
Company Selected Measure Amount 0.47 0.41
PEO Name Yancey Spruill Yancey Spruill
Additional 402(v) Disclosure [Text Block]
All information provided above under the “Pay Versus Performance” heading will not be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing, except to the extent the Company specifically incorporates such information by reference.
 
Measure [Axis]: 1    
Pay vs Performance Disclosure [Table]    
Measure Name Revenue growth plus free cash flow margin  
Non-GAAP Measure Description [Text Block]
(4)
Represents the sum of revenue growth and free cash flow margin. Revenue growth is defined as the percentage increase in revenue from the prior year. Free cash flow is a non-GAAP financial measure that we define as net cash provided by operating activities less purchases of property and equipment, capitalized internal-use software costs, purchase of intangible assets, and excluding acquisition and integration related costs. Free cash flow margin is calculated as free cash flow divided by total revenue.
 
Measure [Axis]: 2    
Pay vs Performance Disclosure [Table]    
Measure Name Revenue growth  
Measure [Axis]: 3    
Pay vs Performance Disclosure [Table]    
Measure Name Free cash flow margin  
PEO [Member]    
Pay vs Performance Disclosure [Table]    
Adjustment to Compensation Amount $ (200,929,372) $ 210,799,249
PEO [Member] | Grant Date Fair Value of Option Awards and Stock Awards Granted in Fiscal Year [Member]    
Pay vs Performance Disclosure [Table]    
Adjustment to Compensation Amount 0 (81,236,800)
PEO [Member] | Fair Value at Fiscal Year-End of Outstanding and Unvested Option Awards and Stock Awards Granted in Fiscal Year [Member]    
Pay vs Performance Disclosure [Table]    
Adjustment to Compensation Amount 0 177,891,450
PEO [Member] | Change in Fair Value of Outstanding and Unvested Option Awards and Stock Awards Granted in Prior Fiscal Years [Member]    
Pay vs Performance Disclosure [Table]    
Adjustment to Compensation Amount (168,349,099) 84,906,975
PEO [Member] | Fair Value at Vesting of Option Awards and Stock Awards Granted in Fiscal Year That Vested During Fiscal Year [Member]    
Pay vs Performance Disclosure [Table]    
Adjustment to Compensation Amount 0 0
PEO [Member] | Change in Fair Value as of Vesting Date of Option Awards and Stock Awards Granted in Prior Fiscal Years for Which Applicable Vesting Conditions Were Satisfied During Fiscal Year [Member]    
Pay vs Performance Disclosure [Table]    
Adjustment to Compensation Amount (32,580,273) 29,237,624
PEO [Member] | Fair Value as of Prior Fiscal Year-End of Option Awards and Stock Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year [Member]    
Pay vs Performance Disclosure [Table]    
Adjustment to Compensation Amount 0 0
Non-PEO NEO [Member]    
Pay vs Performance Disclosure [Table]    
Adjustment to Compensation Amount (18,373,071) 6,109,204
Non-PEO NEO [Member] | Grant Date Fair Value of Option Awards and Stock Awards Granted in Fiscal Year [Member]    
Pay vs Performance Disclosure [Table]    
Adjustment to Compensation Amount (3,925,706) (7,191,913)
Non-PEO NEO [Member] | Fair Value at Fiscal Year-End of Outstanding and Unvested Option Awards and Stock Awards Granted in Fiscal Year [Member]    
Pay vs Performance Disclosure [Table]    
Adjustment to Compensation Amount 459,886 10,381,805
Non-PEO NEO [Member] | Change in Fair Value of Outstanding and Unvested Option Awards and Stock Awards Granted in Prior Fiscal Years [Member]    
Pay vs Performance Disclosure [Table]    
Adjustment to Compensation Amount (9,150,092) 1,642,694
Non-PEO NEO [Member] | Fair Value at Vesting of Option Awards and Stock Awards Granted in Fiscal Year That Vested During Fiscal Year [Member]    
Pay vs Performance Disclosure [Table]    
Adjustment to Compensation Amount 161,281 69,444
Non-PEO NEO [Member] | Change in Fair Value as of Vesting Date of Option Awards and Stock Awards Granted in Prior Fiscal Years for Which Applicable Vesting Conditions Were Satisfied During Fiscal Year [Member]    
Pay vs Performance Disclosure [Table]    
Adjustment to Compensation Amount (5,918,440) 1,207,174
Non-PEO NEO [Member] | Fair Value as of Prior Fiscal Year-End of Option Awards and Stock Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year [Member]    
Pay vs Performance Disclosure [Table]    
Adjustment to Compensation Amount $ 0 $ 0