Document

DEF 14A 1 a2022proxydef14a.htm DEF 14A Document

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

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Groupon, Inc.

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2022 PROXY STATEMENT

ANNUAL MEETING OF STOCKHOLDERS
THE ANNUAL MEETING OF STOCKHOLDERS OF GROUPON, INC. WILL BE HELD
June 15, 2022 | 10:00 am Central Time
Winston & Strawn LLP, 35 West Wacker Drive, Chicago, Illinois 60601

NASDAQ: GRPN / ir@groupon.com

LETTER FROM THE

CHAIRMAN

Dear Stockholder:

I am pleased to invite you to attend the Annual Meeting of Stockholders of Groupon, Inc. (the "Annual Meeting"), which will be held at Winston & Strawn LLP, 35 West Wacker Drive, Chicago, Illinois 60601 on June 15, 2022 at 10:00 a.m. Central Time. Doors will open at 9:30 a.m. Central Time.

The attached Notice of Annual Meeting of Stockholders and proxy statement (the "Proxy Statement") contain details of the business to be conducted at the Annual Meeting.

Whether or not you attend the Annual Meeting, it is important that your shares be represented and voted at the meeting. Therefore, I urge you to promptly vote and submit your proxy via the Internet, by phone, or by signing, dating and returning the enclosed proxy card in the enclosed envelope. If you decide to attend the Annual Meeting, you will be able to vote in person, even if you have previously submitted your proxy.

We urge you to read the accompanying Proxy Statement carefully and to vote "FOR" the director nominees proposed by the Board of Directors, "FOR" the ratification of Deloitte & Touche LLP as our independent registered public accounting firm for fiscal year 2022, "FOR" the advisory approval of our Named Executive Officer compensation in accordance with the recommendations of the Board of Directors, “FOR” the proposal to amend and restate the Company's incentive plan, to, among other items, increase the number of authorized shares thereunder and “FOR” the proposal to approve one or more adjournments of the Annual Meeting to a later date or dates if necessary or appropriate to solicit additional proxies if there are insufficient votes to approve any of the proposals at the time of the Annual Meeting. On behalf of the Board of Directors, I would like to express our appreciation for your interest in Groupon.

Sincerely,

Theodore Leonsis
Chairman of the Board of Directors

Groupon Proxy Statement and Notice of 2022 Annual Meeting

NOTICE OF 2022 ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD
June 15, 2022 | 10:00 am Central Time
Winston & Strawn LLP, 35 West Wacker Drive, Chicago, Illinois 60601

Although we intend to hold the Annual Meeting in person, we are monitoring the protocols that federal, state and local governments may recommend or require in light of continuing restrictions due to COVID-19. The health and well-being of our employees and our stockholders are paramount. As a result, we may impose additional procedures or limitations on meeting attendees or may decide to hold the meeting in a virtual-only format over the Internet. Any such changes regarding the Annual Meeting will be announced in a press release and the filing of additional proxy materials with the Securities and Exchange Commission (“SEC”).

ITEMS OF BUSINESS

•To elect eight directors from the nominees named in this Proxy Statement.

•To ratify the selection of Deloitte & Touche LLP ("Deloitte") as our independent registered public accounting firm for fiscal year 2022.

•To conduct an advisory vote to approve our named executive officer compensation, as described in this Proxy Statement.

•To approve the amendment and restatement of the Groupon, Inc. 2011 Incentive Plan, as amended (the “A&R 2011 Incentive Plan”), to, among other items, increase the number of authorized shares thereunder.

•To approve one or more adjournments of the Annual Meeting to a later date or dates if necessary or appropriate to solicit additional proxies if there are insufficient votes to approve the other proposals at the time of the Annual Meeting (the “Adjournment Proposal").

•To transact other business that may properly come before the Annual Meeting.

Record Date

April 21, 2022 (the "Record Date"). Only stockholders of record at the close of business on the Record Date are entitled to receive notice of, and to vote at, the Annual Meeting.

Admission

If you are a record holder, you must provide identification, and if you hold your shares through a broker, bank or other nominee, you must also provide proof of ownership.

Proxy Voting

IMPORTANT: Please vote your shares at your earliest convenience. This will ensure the presence of a quorum at the Annual Meeting. Promptly voting your shares via the Internet, by telephone, or by signing, dating, and returning the enclosed proxy card will save the expenses and efforts of additional solicitation. If you wish to vote by mail, we have enclosed an addressed envelope, postage prepaid if mailed in the United States. Submitting your proxy now will not prevent you from voting your shares in person at the Annual Meeting, as your proxy is revocable at your option as described in the Proxy Statement.

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting to Be Held on June 15, 2022. We are furnishing proxy materials to our stockholders primarily via the Internet, instead of mailing printed copies of those materials to each stockholder. By doing so, we save costs and reduce the environmental impact of our Annual Meeting. We will mail a Notice of Internet Availability of Proxy Materials to certain of our stockholders. This Notice contains instructions about how to access our proxy materials and vote online or vote by telephone. If you would like to receive a paper copy of our proxy materials, please follow the instructions included in the Notice of Internet Availability of Proxy Materials. If you previously chose to receive our proxy materials electronically, you will continue to receive access to these materials via e-mail unless you elect otherwise.

Groupon Proxy Statement and Notice of 2022 Annual Meeting

By order of the Board of Directors,

Dane Drobny
General Counsel and Corporate Secretary

Chicago, Illinois
April 27, 2022

The date of this Proxy Statement is April 27, 2022, and it is first being delivered to stockholders on or about April 27, 2022.

Groupon Proxy Statement and Notice of 2022 Annual Meeting

TABLE OF CONTENTS


CORPORATE GOVERNANCE AT GROUPON			1
BOARD OF DIRECTORS			5
BOARD SELECTION AND EVALUATION			12
HOW THE BOARD IS ORGANIZED AND GOVERNS			14
HOW TO COMMUNICATE WITH THE BOARD			18
DIRECTOR COMPENSATION			19
COMPENSATION DISCUSSION & ANALYSIS			22
2021 Business Summary and Financial Results			22
2021 Executive Compensation Highlights			22
2021 Management Changes			23
Compensation-Related Policies and Practices			23
Governance of Executive Compensation Program			25
Elements of Executive Compensation			29
Other Compensation			36
Compensation Risk Assessment			37
NAMED EXECUTIVE OFFICER COMPENSATION			39
2021 Summary Compensation Table			39
Grants of Plan-Based Awards in 2021			40
Outstanding Equity Awards at 2021 Year-End			41
Option Exercises and Stock Vested in 2021			42
Severance Benefits Agreement			43
Separation of Named Executive Officers			43
Potential Payments upon Termination of Change in Control			43
CEO Pay Ratio			44
Equity Compensation Plan Information			46
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION			47
COMPENSATION COMMITTEE REPORT			48
AUDIT COMMITTEE REPORT			49
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM			51
POLICY ON AUDIT COMMITTEE PRE-APPROVAL OF AUDIT AND NON-AUDIT SERVICES			52
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS			52
INFORMATION REGARDING BENEFICIAL OWNERSHIP OF PRINCIPAL STOCKHOLDERS, DIRECTORS AND MANAGEMENT			53
DELINQUENT SECTION 16(A) REPORTS			54
IMPORTANT MEETING INFORMATION			55
QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING			58
PROPOSALS TO BE VOTED ON AT THE MEETING			63
Proposal 1: Election of Directors			63
Proposal 2: Ratification of Independent Registered Public Accounting Firm			63
Proposal 3: Advisory Approval of Our Named Executive Officer Compensation			64
Proposal 4: Appr oval of the Amendment and Re statement of the Gro upon, Inc. 2011 Incentive Plan			65
Proposal 5 : Approval of the Adjournment Proposal			71
PROPOSALS OF STOCKHOLDERS FOR 2023 ANNUAL MEETING			72
OTHER MATTERS			73
APPENDIX A: ADJUSTED EBITDA INFORMATION AND RECONCILIATION; FORWARD-LOOKING STATEMENTS			74
APPENDIX B: AMENDED AND RESTATED GROUPON, INC. 2011 INCENTIVE PLAN			76

Groupon Proxy Statement and Notice of 2022 Annual Meeting

CORPORATE GOVERNANCE AT GROUPON

People & Culture

At Groupon, Inc. (the "Company," "Groupon," "we," "our," or "us") we believe attracting and retaining global talent is key to our success. Our Chief People Officer and Global Head of Diversity, Equity & Inclusion, together with our Chief Executive Officer and Chief Administrative Officer, are responsible for developing and executing our human capital strategy, with oversight from the Board of Directors (the "Board") and relevant Board committees. This includes the recruitment, development, and retention of talent to support our operations and execute our strategy and the design of our employee compensation and benefit programs.

Our goal is to nurture a performance driven culture - one that will be led by our values and focused on agility, results and accountability. We believe that this culture is foundational to successfully empower our people to achieve operational excellence and in turn better situate Groupon to reach its full potential. We intend to continue to focus on driving measurable results that will "show up" in our ability to attract and retain talent and build a resilient workforce that is ready to act with greater intention, become even more disciplined and be better positioned as we strive to reach our long-term goals.

Within our human capital strategy, there are five core pillars: Workplace Culture & Values, Compensation & Benefits, Emerging Employee Needs, Diversity, Equity & Inclusion ("DEI") and Social Responsibility.

Workplace Culture and Values.

To ensure we are supporting a thriving and vibrant culture, we conduct frequent Pulse Engagement Surveys throughout the year to help understand our employees’ needs and concerns and uncover insights that will allow us to positively impact our employee experience. This survey covers a wide range of topics including leadership; culture; corporate strategy; DEI and manager support. In 2021, we had strong employee engagement scores.

Each of our employees play an important role in ensuring that we maintain a high level of business ethics, safety and integrity. To facilitate this, all employees complete our mandatory ethics training module annually. Additionally, we have established an internal process called Groupon Ethics Reporting Service, which is communicated to employees during the annual ethics training and can be used to bring to management’s attention a wide range of concerns, including violations of our policies. Furthermore, we have created the position of Director of Compliance who reports directly to the General Counsel. The responsibilities of the Director of Compliance include, but are not limited to, oversight and administration of our corporate governance policies (including our Global Code of Conduct and Anti-Corruption Policy), fostering a culture that integrates compliance and ethics into our business processes and practices, and maintaining and monitoring a system for reporting and investigating potential compliance and ethics concerns.

To support talent development, we offer a variety of training and development programs supporting our ethics, workplace culture and managers. As part of our continued commitment to making Groupon a great place to work and conducting our business at the highest level of ethics and integrity, once every two years, all Groupon full-time, part-time, and temporary employees are required to take the full-length Global Code of Conduct, Anti-Corruption, Data Privacy, and Respectful and Harassment Free Workplace training courses. In alternate years, employees are required to complete a Re-certification Quiz. In addition, employees receive Data Privacy Training every other year (except employees in California, Illinois and New York (and their managers) who receive this training annually). Furthermore, all non-US employees along with US based employees on our Senior Leadership Team and in the Human Resources, Finance and Legal departments receive anti-corruption training every other year. We also require our employees to complete unconscious bias training.

In addition, we actively foster a culture of learning and development and offer a variety of developmental and training courses for our employees, such as Change & Resilience, Managing Through Change, FS90 (a course that reinforces leader habits and manager expectations for new managers) and Authentic Allyship Workshops. In 2022 we are launching a customized global Director Development Program to support leaders with the tools they need to succeed, and Accelerate Academy, a 7-month program for Groupon International, with the aim of accelerating the development and careers of our top female talent. We also encourage internal referrals and postings for open roles.

Compensation and Benefits.

To attract and retain qualified employees, we offer competitive compensation and comprehensive benefits, which are designed to attract, reward, and engage top talent, which include, but are not limited to, the following:

•Standard health, dental, vision, life and disability insurance benefits and a 401(k) retirement savings plan with Company matching for our U.S. employees;

1 | Groupon Proxy Statement and Notice of 2022 Annual Meeting

•Base Salary that compensates employees for the knowledge, skills, abilities, and experience they bring to their roles; performance-based cash incentives for technology and management roles that align pay with both individual performance as well as the Company's achievement of key financial goals; and Long-term incentives in the form of time-based (and where appropriate, performance based) RSUs that promote the creation of long-term stockholder value and align the incentives of employees in technology and management roles with the interests of stockholders;

•Employee Stock Purchase Plan for all eligible U.S. employees who work more than 20 hours per week that provides the opportunity for employees to invest in Groupon by purchasing shares of our common stock at a discount from the fair market value;

•Resources for working parents and their families including parental leave options, transition-back-to-work programs, adoption assistance, and more, and;

•Significantly expanded wellness programming, focused on the health and well-being of employees, to combat burnout and support the overall health of our employees. Our wellness program includes access to mental health support and services, Global Wellness Week, which is an entire week dedicated to personal wellness programming aimed at boosting all of our employees' mental, physical, nutritional, and financial well-being, as well as periodic digital detox days.

Emerging Employee Needs.

Since early 2020, our business has been significantly impacted by COVID-19. In response to the pandemic, we implemented changes in our workforce and how we work in response to the pandemic. For example, in response to employee needs and the evolving nature of work, we developed a more flexible, hybrid working approach designed to optimize collaboration across our global employee base and maintain the accountability and productivity of our performance culture. Our employees have begun to return to the workplace in 2022 utilizing our hybrid working design, and our global Human Resources team will continue to support the efforts for a smooth return to a safe working environment with the health and safety of our employees being a primary consideration. Additionally, in response to challenges created by the COVID-19 pandemic, we developed and launched a program on Building Resilience through Psychological Flexibility, which is available to all employees.

Diversity, Equity and Inclusion.

DEI is integrated into our business and we are building a resilient, engaged and energized team of collaborative people from all over the world who celebrate diversity. We consider it vital to attract, develop and retain employees from underrepresented groups and build a global team that reflects the diversity of the merchants and customers we serve and the communities in which we live and work. We believe that a global team of employees with diverse experiences, backgrounds, skills and perspectives will allow us to take a more innovative approach to problem solving and lead to better outcomes and higher productivity. Our company-wide DEI program includes a range of initiatives and programs that have the overarching goal of making our employees, merchants and customers feel seen and valued. In 2021, we completed the following:

•Implemented an analytics-based approach to provide data-driven insights and increase visibility as we aim to improve workforce diversity, identify inequities and reduce turnover;

•Re-launched and expanded our Employee Resource Groups;

•Enabled diverse merchant self-identification;

•Expanded DEI programming;

•Created and offered an inclusive leadership training program for employees; and

•Recognized, celebrated and supported multiple merchant-facing campaigns and employee-facing celebrations including Asian American Pacific Islander Month, Pride Month, Juneteenth, National Black Business Month, National Hispanic Heritage Awareness Month, Global Diversity Awareness Month and Women’s Small Business Month.

We plan to continue to build upon our existing initiatives to enable a thriving culture through a diverse workforce at a local level. Our global DEI vision and strategy are tied to the same operational goals as the rest of our organization, which help us design, lead and execute on a data-driven strategy, which we believe will ultimately lead to better business outcomes. We are making efforts to improve the representation and harness the diversity of our workforce - in particular, we are focused on increasing the number of women and people of color in leadership roles. Moving forward we plan to focus on the following:

•Collecting and measuring the right data to enable us to improve workforce diversity, identify inequities and reduce turnover;

•Increasing representation of underrepresented groups through the following:

◦Establishing more programs focused on the hiring and retention of members of underrepresented populations;

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◦Sourcing and identifying a diverse range of applicants for all of the positions that we advertise, especially at Director and above levels, to specifically target our representation opportunities at more senior levels;

◦Building relationships with Historically Black Colleges and Universities and other organizations that serve underrepresented communities and populations to increase our pipeline of diverse candidates;

•Providing programming and tools that help our employees incorporate DEI strategies and goals into their annual performance goals;

•Offering workshops and other forums to allow our employees to become more culturally competent; and

•Creating new programming to build and champion our diverse merchant base.

Social Responsibility.

Social responsibility is important to us, and we empower our employees to take part in making the communities in which we operate better places to work and live. We believe thriving local communities are good for everyone. Further, our efforts in this area support the success of our core Local businesses. We provide numerous opportunities for our employees to volunteer with causes they care about throughout the year and support communities through investment in local and national nonprofits focused on global issues like economic opportunity and hunger relief. In 2021, we supported more than 4,000 small businesses and entrepreneurs globally through social responsibility programming and initiatives and more than 30% of our workforce engaged in community activities through the Groupon Volunteers program.

Election of Directors

As stockholders, you have the right to elect our Board. The Board is nominating eight nominees for election. Information to inform your vote is set forth below:

•Groupon Corporate Governance Principles & Highlights

•Board of Director Biographies

•How the Board is Selected and Evaluated

•How the Board is Organized and Governs

•How to Communicate with the Board

•Director Compensation

Groupon Corporate Governance Principles & Highlights

We believe our corporate governance practices promote the long-term interests of our stockholders, as well as maintain internal checks and balances, strengthen management accountability, engender public trust and foster responsible decision making and accountability. We regularly evaluate our corporate governance practices and policies in order to maintain a strong governance framework designed to meet these goals. In addition, our Nominating and Corporate Governance Committee ("Nominating Committee") periodically reviews evolving legal and regulatory developments and governance best practices to determine those that it believes will best serve the interests of our stockholders. More specifically, our Nominating Committee annually reviews our various corporate governance policies for compliance and to recommend any amendments to these policies in light of any such evolving legal and regulatory developments and governance best practices. Highlights of our corporate governance framework include:

Board of Directors

•88% of the Board of Directors are independent (7 of 8 directors)

•Directors have diverse experience, including e-commerce and technology, marketing and advertising, investment, finance and accounting, M&A, international and public company service

•Directors have diverse race/ethnicity and gender identity — 38% of our directors self identity as from racially/ethnically underrepresented groups and 38% of directors self identity as female

•Independent directors meet regularly without management present

•Audit, Compensation and Nominating Committees comprised entirely of independent directors

•Director stock ownership and holding guidelines

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•In October 2021, we amended our Corporate Governance Guidelines to implement a "Rooney Rule" policy with respect to new director searches

Stockholder Voting

•Annual director elections; no classified board

•Single class of voting common stock

•Directors may be removed with or without cause

•No super-majority requirements to approve mergers or other business combinations or charter amendments

•Annual Say on Pay vote (86% "FOR" in 2021)

Audit & Risk Oversight

•Two members of the Audit Committee are audit committee financial experts under SEC rules

•Enterprise Risk Management program

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BOARD OF DIRECTORS

Board of Directors Biographies

The Board is nominating eight nominees for election. Information about the professional backgrounds, qualification and other board memberships of our nominees is set forth below.


Theodore Leonsis Chairman of the Board Independent Director Chair, Nominating Committee Member, Executive Committee Member, Audit Committee			Experience •Groupon Director (2009-present); Chairman of the Board (2020-present); Lead Independent Director (2015-2019); Chairman of the Board (2013-2015); Office of the Chief Executive (2013); Vice Chairman (2011-2013) •Chairman and Chief Executive Officer of Monumental Sports & Entertainment, LLC, a sports and entertainment company that owns the NBA’s Washington Wizards, the NHL’s Washington Capitals, the WNBA’s Washington Mystics and the Capital One Arena in Washington, D.C. (2009-present) •Mr. Leonsis served as Vice Chairman Emeritus at AOL, LLC, and in a number of executive positions including Vice Chairman and President, AOL Audience Business (1993-2006) •Co-founder and partner, Revolution Growth Fund II, a private investment firm •Director, American Express Co. (NYSE: AXP) •Director of several private internet and technology companies and charitable organizations Other •National Museum of African American History and Culture, Member of Museum Council Skills & Qualifications •Technology / E-commerce •Marketing / Advertising •International •Audit / Finance Mr. Leonsis brings to the Board in-depth experience in digital businesses and innovative approaches, as well as expertise in identifying business opportunities and driving new strategies based on changing technologies, social media and the Internet.

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Kedar Deshpande Director and Chief Executive Officer			Experience •Groupon Director (2021-present) and Chief Executive Officer (2021-present) •Mr. Deshpande spent more than 10 years (2011-2021) at Zappos.com ("Zappos"), where he most recently served as the Chief Executive Officer (2020-2021). Throughout his tenure, he held various senior leadership positions across Zappos' Marketing, Product, Tech and Service functions and served as Zappos’ Chief Operating Officer (2019-2020). Prior to that, Mr. Deshpande was a software engineer at General Electric. Skills & Qualifications •Technology / E-commerce •Marketing / Advertising Mr. Deshpande brings to the Board significant e-commerce leadership experience gained from leadership positions in technology, marketing and operations at Zappos.

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Peter Barris Independent Director Chair, Compensation Committee			Experience •Groupon Director since 2008 (originally appointed to the Board pursuant to a general voting agreement, which terminated as a result of our initial public offering) •New Enterprise Associates, a global venture capital fund investing in technology and healthcare, Chairman (2017-current); General Partner (2017-2019); Managing General Partner (1999-2017) •Director, Sprout Social, Inc. (NASDAQ: SPT) •Director, Berkshire Grey, Inc. (NASDAQ: BGRY) •Director, NextNav Inc. (NASDAQ: NN) •Director of several private internet and technology companies and charitable organizations Other •Northwestern University, Vice Chairman of the Board of Trustees •Tuck School Private Equity and Entrepreneur Center, Member of the Board of Directors Skills & Qualifications •Technology / E-commerce •International •Audit / Finance Mr. Barris brings to the Board sophisticated knowledge of information technology companies that includes investments in more than 25 information technology companies that have completed initial public offerings or successful mergers as well as experience serving as a director of several public companies.
Robert Bass Independent Director Chair, Audit Committee Member, Compensation Committee			Experience •Groupon Director since 2012 •Deloitte & Touche LLP, a global firm providing audit, consulting, tax and advisory services; Vice Chairman (2006-2012); Partner (1982-2012); specializing in e-commerce, mergers and acquisitions, SEC filings and related issues •Director and chairman of the audit committee of Redfin Corporation (NASDAQ: RDFN) •Director and chairman of the audit committee of Apex Tool Group, LLC •Trustee and chairman of the audit committee of Blackstone GSO Secured Lending Fund •Director of Bowlero Corp. (NYSE: BOWL) •Former Director and chairman of the risk and audit committee, Sims Metal Management (ASX: SGM.AX) (2013-2018) •Former director and chairman of the audit committee of NewPage Corporation (2013-2015) Other •Certified public accountant licensed in New York and Connecticut •Member of the American Institute of Certified Public Accountants and the Connecticut State Society of Certified Public Accountants Skills & Qualifications •Technology / E-commerce •International •Audit / Finance Mr. Bass brings to the Board a wealth of experience and knowledge of public company financial reporting and accounting, including with respect to companies in the e-commerce sector, and his experience at the highest levels of a Big Four accounting firm is an invaluable resource to the Board in its oversight of the Company’s financial statements and SEC filings.

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Eric Lefkofsky Independent Director Chair, Executive Committee			Experience •Groupon co-founder; Chairman of the Board (2015-2020); Director and Chief Executive Officer (2013-2015); Office of the Chief Executive (2013); Executive Chairman (2008-2013) •Founder and CEO at Tempus, a leading provider of technology-enabled precision medicine solutions •Co-founder and co-managing partner of Lightbank, LLC, a private investment firm specializing in information technology companies •Co-founder of Echo Global Logistics, Inc. (formerly NASDAQ: ECHO), a technology-enabled transportation and logistics outsourcing firm •Co-founder of InnerWorkings, Inc. (formerly NASDAQ:INWK), a global provider of managed print and promotional solutions. Early investor in Uptake Technologies, a predictive analytics platform Other •Steppenwolf Theatre, Chicago, Chairman of the Board of Trustees •Art Institute of Chicago, Trustee •Museum of Science and Industry, Chicago, Trustee •World Business Chicago, Member of the Board of Directors •University of Chicago Booth School of Business, Adjunct Professor Skills & Qualifications •Technology / E-commerce •Marketing / Advertising •Public Company CEO •International •Audit / Finance Mr. Lefkofsky brings to the Board an in-depth knowledge and understanding of the Company's business and operations, as one of its founders and former Chief Executive Officer, as well as expertise gained through experience as a leading entrepreneur and innovator in the technology industry.

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Valerie Mosley Independent Director Member, Audit Committee Member, Nominating Committee			Experience •Groupon Director since April 2020 •Founder, Chairwoman and Chief Executive Officer of Valmo Ventures, LLC, a Massachusetts-based advisory and investment firm (2011-present) •Founder, WorthWealth (d/b/a BrightUp), a technology platform focused on financial wellness •20-year career as partner, senior vice president and investment strategist at Wellington Management Company, LLP •Director, Envestnet, Inc. (NYSE:ENV) and DraftKings Inc. (NASDAQ:DKNG) •Trustee, Eaton Vance Mutual Fund Family •Former Director, Dynex Capital, Inc. (NYSE:DX) •Former Director, Progress Investment Management Company Other •Senior Advisor, MIDA •Board Member, New Profit Skills & Qualifications •Public Investment / Portfolio Management •Audit / Finance Ms. Mosley brings to the Board in-depth experience in investment management and strategy, as well as experience serving as a director of several public companies. In addition, her experience on other boards gives her insight into corporate governance and operational best practices.
Helen Vaid Independent Director Member, Compensation Committee			Experience •Groupon Director since April 2020 •Chief Executive Officer, Foundry Brands (2021-current) •Global Chief Customer Officer at Pizza Hut, a subsidiary of Yum! Brands, Inc. (2016-2021) •Vice President, Digital Store Operations & Experience (2015-2016) and Vice President, Customer Experience, Web & Mobile (2013-2015) at Wal-Mart Skills & Qualifications •Technology / E-commerce •Marketing /Advertising •International Ms. Vaid brings to the Board significant expertise in digital and technology systems and consumer products, with more than 20 years of extensive marketing, E-commerce brand management and leadership experience. Her knowledge of direct-to-consumer e-commerce is a valuable resource for our Board.

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Deborah Wahl Independent Director Member, Nominating Committee			Experience •Groupon Director since 2017 •Chief Marketing Officer of General Motors Company (NYSE: GM) (2019-present); Chief Marketing Officer of Cadillac, a brand of General Motors Company (2018-present) •Chief Marketing Officer of McDonald’s Corporation (NYSE: MCD) (2014-2017) •Chief Marketing Officer of PulteGroup, Inc. (NYSE: PHM), a homebuilding company (2009-2014) •Marketing leadership roles at Chrysler LLC, Toyota Motor Corporation (NYSE: TM), and Ford Motor Company (NYSE: F) •Former Director, media software company Mediaocean (2017-2020) Other •Vice Chair, Association of National Advertisers Skills & Qualifications •Technology / E-commerce •Marketing / Advertising •International Ms. Wahl brings to the Board substantial experience in brand and consumer marketing gained from chief marketing officer and other leadership positions at several public companies.

Director Nominee Qualifications and Experience

The chart below identifies certain skills and qualifications our director nominees bring to the Board, based on areas we believe are important to our success. We believe the combination of the skills and qualifications shown below demonstrates how our Board is well positioned to provide effective oversight and strategic advice to our management. We believe the categories of skills and qualifications highlighted below are particularly relevant to the oversight of our global e-commerce business. The skills and qualifications of our individual directors are described in greater detail above.

Skills & Experience


Audit / Finance			nnnnn
Public Investment / Portfolio Management			n
International			nnnnnn
Public Company CFO / CEO			n
Marketing / Advertising			nnnnn
Technology / E-Commerce			nnnnnnn

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Board Diversity Matrix

The table below provides certain information with respect to the composition of the Board. Each of the categories listed in the table has the meaning ascribed to it in NASDAQ Listing Rule 5605(f).

Board Diversity Matrix (as of April 27, 2022)

Total Number of Directors:

Female

Male

Non-Binary

Did Not Disclose Gender

Part I: Gender Identity

Directors

Part II: Demographic Background

African American or Black

Alaskan Native or Native American

Asian

Hispanic or Latinx

Native Hawaiian or Pacific Islander

White

Two or More Races or Ethnicities

LGBTQ+

Did Not Disclose Demographic Background

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BOARD SELECTION AND EVALUATION

Director Independence

Our Corporate Governance Guidelines provide that a majority of our directors will be independent, based on the listing standards of NASDAQ as well as the Board's determination that the director does not have a relationship with Groupon management that, in the opinion of the Board, would interfere with the exercise of independent judgment in carrying out director responsibilities.

Based on the review and recommendation by the Nominating Committee, the Board analyzed the independence of each current director and each director who served on the Board during 2021 and determined that Messrs. Angelakis, Barris, Bass, Lefkofsky and Leonsis, and Mses. Mosley, Vaid and Wahl meet the standards of independence under our Corporate Governance Guidelines and applicable NASDAQ listing standards, including that each member is free of any relationship that would interfere with his or her individual exercise of independent judgment. Our Board determined that Mr. Kedar Deshpande, our Chief Executive Officer ("CEO"), is not an independent director.

In particular, in making its determinations with respect to director independence, the Board considered Mr. Lefkofsky's status as a co-founder and significant stockholder of the Company, as well as his service to the Company in the Office of the Chief Executive from February 2013 to August 2013, and CEO from August 2013 to November 2015. Under applicable NASDAQ rules, Mr. Lefkofsky may be considered independent if the Board concludes that his relationship with the Company, including his former employment as an executive officer, would not interfere with his exercise of independent judgment in carrying out his responsibilities as director. After considering that Mr. Lefkofsky had not served as an executive officer or employee of the Company during the past six years and the other factors set forth above, the Board concluded that Mr. Lefkofsky is an independent director in accordance with the applicable NASDAQ rules.

Procedures for Nominating Directors; Board Composition

The Nominating Committee reviews with the Board the appropriate set of characteristics, skills and experiences for the Board as a whole, with the objective of having a Board that can best help drive the success of our business and represent stockholder interests through the exercise of sound judgment using its diversity of experience. In evaluating its overall composition, our Board and Nominating Committee take into account many factors, including: general understanding of marketing, finance and other disciplines relevant to the Company's industry or the success of a large publicly traded company in today’s business environment; operational and senior leadership experience; needs and strategy of the Company relative to the overall composition of our Board; understanding of our business and technology; independence; and diversity of background, skills and experience. The Nominating Committee regularly engages in ongoing board composition planning to assure that our Board continues to maintain an appropriate mix of skills and experiences to provide fresh perspectives and effective oversight and guidance to management, while leveraging the institutional knowledge and historical perspective of our longer-tenured directors. The Nominating Committee and Board will instruct any third-party search firm they engage to include, qualified candidates with diversity of race, ethnicity and gender in the initial pool from which the Nominating Committee will review candidates.

The Nominating Committee reviews the skills and qualifications of each candidate for nomination to the Board. The Nominating Committee considers candidates that are suggested by members of the Board, as well as management, our stockholders and any director search firm retained by the Board or the Nominating Committee. In evaluating a candidate, the Nominating Committee considers, among other things: educational and professional background; personal accomplishments; potential conflicts of interest; whether he or she also brings specific skills or expertise in areas that the Board has identified as desired; and whether he or she possesses personal attributes and diverse experiences that will contribute to the effective functioning of the Board as a whole. In addition, characteristics expected of all directors include integrity, high personal and professional ethics, sound business judgment, and the ability and willingness to commit sufficient time to the Board.

In the past several years, we have made a number of changes to our Board, including adding Kedar Deshpande, our CEO, in December 2021 and adding Valerie Mosley and Helen Vaid as independent directors in April 2020, bringing significant strategic, operational, advertising, technology, investment and consumer marketing experience as well as additional gender diversity to our Board.

The Nominating Committee assesses the effectiveness of its efforts to maintain an effective Board through the Board self-evaluation process and in the course of its regular responsibilities, which include annually:

•reporting to our Board on the performance and effectiveness of the Board;

•presenting to our Board individuals recommended for election to the Board at the annual stockholders meeting; and

12 | Groupon Proxy Statement and Notice of 2022 Annual Meeting

•obtaining or performing an assessment of the Committee’s own performance.

The Nominating Committee will consider stockholders' recommendations for candidates for the Board using the same criteria described above. The name of any recommended candidate for director, together with a brief biographical sketch, a document indicating the candidate's willingness to serve if elected, and evidence of the nominating stockholder's ownership of Company stock should be sent to the attention of Corporate Secretary, Groupon, Inc., 600 West Chicago Avenue, Suite 400, Chicago, Illinois 60654. A stockholder who wishes to formally nominate a candidate must follow the procedures described in Section 2.4 of our Bylaws.

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HOW THE BOARD IS
ORGANIZED AND GOVERNS

Board and Executive Leadership

The Board does not have a policy as to whether the Chairman should be an independent director or a member of management. At this time, Mr. Leonsis, an independent director, serves as Chairman of the Board, a role he has held since June 2020.

Our Board believes its current leadership structure is appropriate because it effectively allocates authority, responsibility and oversight between management and the independent members of our Board. It does this by giving primary responsibility for the operational leadership and strategic direction of the Company to our CEO, while enabling the Chairman to facilitate our Board's oversight of management, promote communication among management, our Board, and our independent directors, and support our Board’s consideration of key governance and risk oversight matters. The Board believes its programs for overseeing risk, as described below under "Risk Oversight," would be effective under a variety of leadership frameworks and therefore do not materially affect its choice of structure.

Risk Oversight

Our Board of Directors, either directly or through its committees, exercises oversight of strategic risks to the Company, including operational, financial, compliance, legal, strategic, reputational, governance and succession planning. Key features of our risk oversight practices include:

•Management periodically reports on areas of potential risk to our Board or the relevant committee, which provides guidance, as appropriate, on risk tolerance, assessment and mitigation.

•The Audit Committee reviews and assesses the Company's processes to manage business, financial and related reporting, and compliance risks. It also reviews the Company's policies for risk assessment, risk management and assesses the steps management has taken to control significant risks.

•The Audit Committee oversees risks pertaining to cybersecurity. Protecting our systems, networks, data and confidential information is a priority at Groupon. As part of our cybersecurity program we employ security practices to protect and maintain the systems located at our data centers and hosting providers (including as we migrate our public-facing websites and applications and our back-end business intelligence systems to the cloud), invest in intrusion and anomaly detection tools and engage third-party security firms to test the security of our websites and systems. Specifically, we leverage industry best practices to identify and mitigate data security risks. In addition, we regularly evaluate and assess our systems and the controls, processes and practices to protect those systems and also conduct penetration testing against our own systems. Our Chief Information Security Officer, who reports directly to our Chief Administrative Officer and General Counsel and leads the team responsible for our cybersecurity program, strategy, policies and practices, regularly reports to the Audit Committee on the state of our cybersecurity program and provides updates on cybersecurity matters. In addition, we typically conduct an annual cybersecurity review with our Board of Directors.

•The Compensation Committee oversees risks relating to compensation programs and policies to ensure that our compensation programs do not encourage unnecessary risk-taking.

•The Nominating Committee oversees risks relating to our governance structure.

•The Executive Committee oversees risks relating to our actions in response to the impact of the COVID-19 global pandemic and provides guidance relating to our CEO transition, including our strategy development and execution.

•Each committee charged with risk oversight reports to the Board on such matters.

Corporate Governance Guidelines and Committee Charters

Our Corporate Governance Guidelines and the charters of the Audit Committee, the Compensation Committee and the Nominating Committee describe our governance framework. The Corporate Governance Guidelines and committee charters are intended to ensure our Board has the necessary authority and practices in place to review and evaluate our business operations and to make decisions that are independent of management. Our Corporate Governance Guidelines also are intended to align the interests of directors and management with those of our stockholders, and comply with or exceed the requirements of NASDAQ and applicable law. They establish the practices our Board follows with respect to such issues as:

14 | Groupon Proxy Statement and Notice of 2022 Annual Meeting

•Board composition and member selection;

•Board meetings and involvement of senior management;

•CEO performance evaluation;

•Management succession planning;

•Board committees; and

•Director compensation.

Pursuant to the Corporate Governance Guidelines, the Board conducts self-evaluations to annually assess its adherence to the Corporate Governance Guidelines and committee charters and to identify opportunities to improve Board performance. The Board regularly reviews our Corporate Governance Guidelines and committee charters and updates them as necessary to reflect changes in regulatory requirements and evolving oversight practices.

Meetings and Meeting Attendance

Our Board holds regularly scheduled quarterly meetings and also holds special meetings or acts by unanimous written consent as necessary. Our Board met eight times during 2021.

All of our directors, who served as a director for the entirety of 2021, attended 75% or more of the aggregate of all Board meetings and meetings of the committees on which they served during the last fiscal year. We do not maintain a formal policy regarding director attendance at stockholder meetings. None of our directors attended the 2021 Annual Meeting.

Board Committees

Our Board has three standing committees: an Audit Committee, a Compensation Committee and a Nominating Committee. The Board also established an Executive Committee in March 2020. Each committee is comprised entirely of independent directors, and each of the Audit Committee, Compensation Committee and Nominating Committee operates pursuant to a written charter. The table below provides the membership for each of the Board committees.

Director

Audit (1)

Compensation

Nominating

Executive

Peter Barris

Chair

Robert Bass

Chair

Eric Lefkofsky

Chair

Ted Leonsis

Chair

Valerie Mosley

Helen Vaid

Deborah Wahl

Kedar Deshpande

(1) Michael Angelakis resigned from the Board in May, 2021, and was replaced by Ted Leonsis on the Audit Committee.

Below is a description of each standing committee. Each committee has authority to engage legal counsel or other advisors or consultants as it deems appropriate to carry out its responsibilities.

Audit Committee

The Audit Committee assists our Board in overseeing the quality and integrity of our accounting, auditing and reporting practices. The Committee’s role includes:

•overseeing the work of our accounting function and internal controls over financial reporting;

•overseeing internal audit processes;

•inquiring about significant risks, reviewing our policies for risk assessment and risk management, including cybersecurity risks, and assessing the steps management has taken to control these risks; and

•reviewing compliance with significant applicable legal and regulatory requirements.

The Audit Committee is responsible for the appointment, compensation, retention, review and oversight of the independent registered public accounting firm engaged to issue audit reports on our consolidated financial statements and internal control over financial

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reporting. The Committee relies on the expertise and knowledge of management and the independent registered public accounting firm in carrying out its oversight responsibilities. The Audit Committee Charter describes the Committee’s specific responsibilities. The Board has determined that each Committee member (including any director who served as a member during any portion of 2021) has sufficient knowledge in financial and auditing matters to serve on the Committee and that each of Robert Bass and Ted Leonsis is an "audit committee financial expert" as defined by SEC rules.

The Audit Committee met six times in 2021.

Compensation Committee

The primary responsibilities of the Compensation Committee are to:

•assist our Board in establishing the annual goals and objectives relevant to the compensation of the CEO;

•evaluate and approve the compensation of the CEO;

•oversee compensation of directors;

•evaluate and approve the compensation of the Company’s other executive officers;

•oversee and advise our Board on the adoption of policies that govern executive officer compensation programs and other compensation-related polices;

•oversee plans for executive officer development and succession;

•oversee administration of our equity and incentive plans, policies, practices, and programs; and

•authorize grants of equity compensation awards under our stock plan.

As permitted by law and pursuant to the terms of the Groupon, Inc. 2011 Incentive Plan, as amended (the "2011 Incentive Plan") the Committee may delegate to certain persons, including the CEO, the authority to make equity compensation grants to employees who are not executive officers.

Our CEO and senior members of our Human Resources department, including our Chief People Officer, and Senior Director, Compensation and Benefits, are responsible for providing recommendations to the Compensation Committee regarding our executive compensation program. None of our executives participates in Compensation Committee deliberations relating to his or her own compensation. To evaluate each senior officer’s overall compensation, the Compensation Committee reviews total direct and indirect compensation details prepared by management and other information deemed appropriate and advisable by the Compensation Committee.

The Compensation Committee Charter describes the specific responsibilities and functions of the Compensation Committee. See "Compensation Discussion & Analysis" for more information about the Committee’s role and responsibilities.

The Compensation Committee met six times in 2021.

Nominating Committee

The principal responsibilities of the Nominating Committee are to:

•determine and recommend director nominees for election to our Board;

•identify and recommend candidates to fill director vacancies occurring between annual stockholder meetings;

•review the composition of Board committees;

•annually evaluate the performance and effectiveness of the Board; and

•monitor adherence to, review, and recommend changes to our Corporate Governance Guidelines and other related corporate governance policies.

The Nominating Committee Charter describes the specific responsibilities and functions of the Committee.

The Nominating Committee met four times in 2021.

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Executive Committee

In March 2020, our Board established an Executive Committee to facilitate Board oversight and actions in response to the impact of COVID-19 on our business and oversee our Interim Chief Executive Officer and management in the development and execution of our strategy in light of a rapidly changing environment. After the Board appointed Kedar Deshpande as the Company's permanent CEO in December 2021, the Executive Committee assisted in the CEO transition as well as continued its oversight of our strategy development and execution. The Executive Committee may, to the fullest extent permitted by applicable law, exercise all the powers and authority of the Board in the management of the business and affairs of our Company.

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HOW TO COMMUNICATE
WITH THE BOARD

Stockholder Engagement

We recognize the value of stockholder feedback, and our relationship with our stockholders is an integral part of our corporate governance practices. We maintain active, year-round engagement and meet regularly with our stockholders to engage on issues that are important to our stockholders and to understand their perspectives on a variety of matters, including executive compensation, corporate governance matters, corporate strategy and financial performance.

As part of our corporate governance engagement strategy, we have also implemented a more targeted engagement program to better understand stockholder views on our executive compensation program, environmental, social and governance ("ESG") matters and corporate governance policies and practices ahead of our Annual Meeting. This year, we reached out to our largest stockholders and spoke with several of them as a result of this outreach. During these stockholder engagement meetings, we discussed a variety of matters, including our corporate governance practices and policies, elements and structure of our executive and CEO compensation policies and stockholder's consideration of ESG matters. We intend to continue the dialogue with our stockholders on these matters and provide updates on future developments in these areas. We have taken into account the input and feedback of our stockholders in recent years in making changes to our executive compensation program. Based in part on stockholder feedback, we also have continued to revise our disclosure over the past several years in order to improve its effectiveness, including increasing proxy statement disclosure regarding our director skills and qualifications, Board risk management (including relating to cybersecurity) and executive compensation program, enhancing the design of our proxy statement and updating our corporate website disclosure.

In addition to the annual engagement described above, we also communicate with our stockholders through a number of routine forums, including quarterly earnings calls, SEC filings, our annual report and proxy statement, our annual meeting of stockholders, investor meetings and conferences and our Investor Relations site. As appropriate, we relay stockholder feedback and trends on corporate governance developments to our Board and its committees and work with them to both enhance our governance practices and strengthen our disclosures.

We expect to continue our stockholder engagement program in 2022 to further enhance and deepen our relationship with our stockholders with respect to corporate governance, ESG, executive compensation and other issues of interest to our stockholders.

Investor Relations Website

If you would like additional information about our corporate governance practices, you may view the following documents at investor.groupon.com:

•Audit Committee Charter

•Compensation Committee Charter

•Nominating Committee Charter

•Corporate Governance Guidelines

•Code of Conduct

We will provide any of the foregoing information without charge upon written request to the Corporate Secretary, Groupon, Inc., 600 West Chicago Avenue, Suite 400, Chicago, Illinois 60654. In addition, stockholders and other interested parties may communicate with any of our directors, including our independent directors or the directors as a group, by writing to the Corporate Secretary, Groupon, Inc., 600 West Chicago Avenue, Suite 400, Chicago, Illinois 60654. The Corporate Secretary will forward relevant communications to the appropriate directors depending on the facts and circumstances outlined in the communication.

18 | Groupon Proxy Statement and Notice of 2022 Annual Meeting

DIRECTOR COMPENSATION

We offer an annual cash and equity compensation program for our non-employee directors under our Non-Employee Directors’ Compensation Plan (a sub-plan of the 2011 Incentive Plan) (the "Director Compensation Plan").

Components of Director Compensation

The following table provides a summary of the components of the Director Compensation Plan:


	Cash Retainer ($)	RSU Award ($)	Total ($)
Board Member	75,000	175,000	250,000
Audit Chair	10,000	20,000	30,000
Audit Member (non-chair)	10,000	—	10,000
Compensation Chair	6,667	13,333	20,000
Compensation Member (non-chair)	5,000	—	5,000
Nominating & Governance Chair	5,000	10,000	15,000
Nominating & Governance Member (non-chair)	5,000	—	5,000

Under the Director Compensation Plan each non-employee director can elect to defer 100% of the annual cash retainer and 100% of the additional annual committee chair or member cash retainer into an award of deferred stock units. The number of deferred stock units to be awarded is determined by dividing the amount of the cash retainer to be exchanged by the fair market value of a share of common stock as of the date on which the cash retainer would otherwise have been paid. Deferred stock units are fully vested upon issuance and will be distributed following a non-employee director's separation from service. Distributions are made in a single distribution in the form of shares.

Each non-employee director receives an annual grant of restricted stock units ("RSUs") on the date of our annual meeting of stockholders, which vests 100% on the first anniversary of the annual meeting of the stockholders as long as the non-employee director remains on the Board on the vesting date. The number of RSUs granted is determined by dividing the dollar amount of the grant by the fair market value of a share of our common stock on the date of grant. Beginning with awards granted in 2019, a non-employee director may defer receipt of vested RSUs until his or her separation from service.

In the event a newly-elected or appointed non-employee director becomes an eligible participant under the Director Compensation Plan following the date of the annual meeting of stockholders but during the same calendar year as the annual meeting of stockholders, the Board may, in its sole discretion, grant such non-employee director a pro-rated RSU award with respect to his or her service during the remainder of the year.

The Company also pays or reimburses non-employee directors for reasonable travel, lodging and related expenses in connection with their attendance at Board, Committee or Company business meetings.

In October 2021, the Director Compensation Plan was revised to (1) add a cash retainer of $16,667 and an annual RSU award of $33,333 for the role of Non-Executive Board Chair and (2) increase the Audit Chair cash retainer to $13,333 and Audit Chair annual RSU award to $26,667, in each case effective January 1, 2022.

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2021 Director Compensation

The following table sets forth the actual compensation paid to non-employee directors under the Director Compensation Plan for the fiscal year ended December 31, 2021. Mr. Deshpande did not receive any additional compensation for his services as a director of the Company during 2021.


Name	Fees Earned or Paid in Cash ($) (1)	Stock Awards ($)(2)(3)	All Other Compensation ($)	Total ($)
Deborah Wahl	80,000	175,000	—	255,000
Eric Lefkofsky	75,000	175,000	—	250,000
Michael Angelakis (4)	42,500	—	—	42,500
Peter Barris	81,667	188,333	—	270,000
Robert Bass	90,000	195,000	—	285,000
Ted Leonsis (5)	85,000	185,000	—	270,000
Helen Vaid	80,000	175,000	—	255,000
Valerie Mosley	90,000	175,000	—	265,000

(1)This column represents the amount of cash compensation earned in 2021 for Board and committee service. The following non-employee directors deferred cash compensation earned in 2021 into deferred stock units under the Director Compensation Plan and as shown in the table below.


Name	2021 Cash Fee Deferred ($)	Shares in Deferred Account Attributed to 2021 Cash Fees (#)
Deborah Wahl	80,000	2,443
Eric Lefkofsky	75,000	2,290
Peter Barris	81,667	2,493

(2)On June 15, 2021, we granted each of our non-employee directors 4,039 RSUs, the Nominating Committee Chairman an additional 231 RSUs, the Compensation Committee Chairman an additional 307 RSUs, and our Audit Committee Chairman an additional 461 RSUs pursuant to the Director Compensation Plan. 100% of the RSUs will vest on June 15, 2022. The following non-employee directors elected to defer their stock awards:


Name	2021 Stock Awards ($)	Shares in Deferred Account Attributed to 2021 Stock Awards (#)
Deborah Wahl	175,000	4,039
Valerie Mosley	175,000	4,039

(3)As of December 31, 2021, each non-employee director had the following aggregate number of stock awards outstanding


Name			Number of Outstanding RSUs
Deborah Wahl			4,039
Eric Lefkofsky			4,039
Michael Angelakis (4)			—
Peter Barris			4,346
Robert Bass			4,500
Ted Leonsis			4,270
Helen Vaid			4,039
Valerie Mosley			4,039

(4)Michael Angelakis' service as a director terminated on May 14, 2021. In connection with his termination of service, Mr. Angelakis' vesting was accelerated on 4,859 of his RSUs (which represents his 2020 stock awards as he had participated in all relevant board meetings within the vesting period). His earned cash fees of $42,500 represent the Q1 and Q2 portion of his cash retainer.

(5)Ted Leonsis served as a member of the Audit Committee during the two quarters in 2021 (and therefore his Audit Member cash retainer was $5,000).

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Director Stock Ownership Guidelines and Stock Holding Requirements

We maintain stock ownership guidelines that require each non-employee director to beneficially own Company common stock, as follows:

Ownership and Holding Guidelines

Measurement Requirements

2021 Compliance

• Common stock with a value of at least 3X the director’s annual cash retainer

• Meet ownership requirement by the later of April 1, 2022, or 5 years after initial election

• A director must retain 50% of net shares acquired upon the vesting of equity awards until the director meets the ownership requirements

The following shares count towards compliance:

• Shares owned outright and beneficially

• Shares equal to the number of deferred stock units credited under our Director Compensation Plan

• Unvested RSUs

• All directors were in compliance with the guidelines as of December 31, 2021

• Compliance is measured annually as of December 31st

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COMPENSATION DISCUSSION
& ANALYSIS

This Compensation Discussion and Analysis provides information regarding the 2021 compensation program for each person who served as our principal executive officer during 2021, each person who served as our principal financial officer during 2021, and our one other executive officer serving at fiscal year-end (our “Named Executive Officers”). For 2021, our Named Executive Officers were:

•Kedar Deshpande, our Chief Executive Officer, effective December 10, 2021;

•Damien Schmitz, our Interim Chief Financial Officer (our "Interim CFO"), effective November 5, 2021;

•Dane Drobny, our Chief Administrative Officer, General Counsel, and Corporate Secretary (Mr. Drobny, together with Mr. Deshpande and Mr. Schmitz are referred to herein as the "incumbent Named Executive Officers");

•Aaron Cooper, our former Interim Chief Executive Officer until December 10, 2021; and

•Melissa Thomas, our former Chief Financial Officer until November 4, 2021.

This Compensation Discussion and Analysis describes the material elements of our executive compensation program during 2021 and provides an overview of our executive compensation philosophy, including our principal compensation policies and practices. In addition, it analyzes how and why the Compensation Committee of our Board of Directors (the “Compensation Committee”) arrived at the specific compensation decisions for our Named Executive Officers in 2021 and discusses the key factors that the Compensation Committee considered in determining their compensation.

2021 Business Summary and Financial Results

Groupon is a global, scaled two-sided marketplace that connects consumers to merchants. Consumers access our marketplace through our mobile applications and our websites, which are primarily localized groupon.com sites in many countries. We operate in two segments, North America and International, and in three categories, Local, Goods and Travel.

Since March 2020, the COVID-19 pandemic has led to a significant disruption in our business due to changes in consumer behavior and impacts on our merchants. Recovery from the COVID-19 pandemic has been and could continue to be volatile and prolonged given the unprecedented and continuously evolving nature of the situation and the emergence and spread of new variants. Despite the ongoing challenges and volatility resulting from the impact of COVID-19, we continue to position our business for recovery and future growth.

In addition, during 2021, we experienced significant changes to our senior leadership team, as further described below under “2021 Management Changes.”

2021 Financial Results

Our financial results as of and for the year ended December 31, 2021 are set forth below:


Gross Profit	Income from Continuing Operations	Adjusted EBITDA (1)	Operating Cash Flow
$737 million	$120 million	$143 million	$(124) million

(1)Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA") is a non-GAAP financial measure. Please see "Appendix A - Adjusted EBITDA Information and Reconciliation" for more information.

2021 Executive Compensation Highlights

The ongoing impacts of COVID-19 on our business and further changes in our management team have continued to affect our approach to executive compensation in 2021. In particular, the disruption to our business and ongoing volatility throughout the year increased the Board’s and Compensation Committee’s focus on stabilizing the Company. In addition, market uncertainties caused by the continuously evolving nature of COVID-19 variants and resulting volatility in financial performance, created challenges for establishing meaningful and motivating performance goals applicable to our incentive compensation programs. In determining 2021 executive compensation, the Compensation Committee balanced the goals of retention and incentivizing performance.

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Key decisions and aspects of our 2021 executive compensation program for our Named Executive Officers are summarized below:

•Base salaries remained or were set at levels commensurate with the executives’ roles and responsibilities.

•The 2021 performance-based bonus was split into two semi-annual performance periods due to challenges in setting meaningful and motivating full-year targets for the plan performance measures, with payment opportunities in August 2021 and April 2022 to be capped at 150% of each respective target amount related to each of the two measurement periods. For the first half of 2021, achievement of the bonus was based on our Adjusted EBITDA results. We achieved Adjusted EBITDA of $71.3 million vs. a maximum goal of $57.2 million, and bonuses were earned at 150% of target levels. For the second half of 2021, achievement of the bonus was based on the discretion of the Compensation Committee, and the bonus funding was approved at 40% of target levels.

•Time-based equity awards for 2021 were in the form of RSUs, including a retention award granted to one Named Executive Officer, Mr. Drobny.

•Performance-based equity awards for 2021 were communicated to our then Named Executive Officers in February of 2021 in the form of PSUs. However, in light of the difficulty in establishing meaningful and measurable PSU performance metrics for these awards (that differed from the metric already approved for the performance-based bonus plan), these awards were instead granted as time-based RSUs in April 2021 or May 2021, as applicable (with the number of RSUs based on the target level of the previously communicated PSUs).

Each of these 2021 compensation elements is discussed in more detail below in “-Elements of Executive Compensation.”

2021 Management Changes

As previously disclosed, effective November 5, 2021, our Board of Directors appointed Mr. Schmitz as our Interim Chief Financial Officer. As of November 4, 2021, Ms. Thomas ceased serving as our Chief Financial Officer.

In addition, on December 1, 2021, we announced that Mr. Deshpande would be our new Chief Executive Officer, effective December 10, 2021. As of December 10, 2021, Mr. Cooper ceased serving as our Interim Chief Executive Officer.

Compensation-Related Policies and Practices

Our executive compensation program reflects our compensation philosophy by incorporating certain compensation-related policies and practices while avoiding other more problematic or controversial policies and practices, as follows:

What We Do

•Maintain an independent Compensation Committee

•Retain an independent compensation consultant, which reports directly to the Compensation Committee and provides no other material services to us

•Conduct an annual executive compensation review and compare our program against the competitive market and best practices

•Establish measurable performance objectives and maximum award levels under our PSU program, if applicable

•Vest annual equity awards over multi-year periods, consistent with current market practice and our retention objectives

•Conduct an annual stockholder advisory (non-binding) vote on Named Executive Officer compensation

•Regularly engage with our stockholders to get their perspectives on executive compensation and corporate governance matters

•Conduct an annual risk assessment of our compensation programs

•Maintain significant stock ownership and stock holding requirements for our executive officers

•Require our executive officers to pre-clear all stock trades (other than pursuant to an approved Exchange Act Rule 10b5-1 trading plan) even during an open window period

•Review the risks associated with key executive officer positions to ensure adequate succession plans are in place

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What We Don’t Do

•Offer pension arrangements, supplemental retirement plans or non-qualified deferred compensation arrangements to our executive officers

•Offer enhanced health and welfare benefits programs to our executive officers that are above and beyond those offered to our regular employees

•Provide excessive perquisites or other personal benefits to our executive officers

•Provide any tax reimbursement payments (including "gross-ups") on any severance or change-in-control payments or benefits

•Permit our employees (including our executive officers) and directors to hedge our equity securities

•Permit our employees (including our executive officers) and directors to pledge our equity securities, subject to limited exceptions

•Pay dividends or dividend equivalents on unvested or unearned equity awards

•Permit the repricing of stock options without stockholder approval

Clawback Policy

In October 2021, the Compensation Committee approved a compensation recovery policy that is generally consistent with current market practices, which took effect on January 1, 2022. The policy covers all current and former Section 16 Officers, our Chief Revenue Officer, Chief Commercial Officer, and such other executives as may be specified by the Compensation Committee. The policy allows for the recovery of any excess performance-based cash and equity compensation awarded to covered executives in the event of the executive's misconduct that contributes to noncompliance with any financial reporting requirement under the U.S. federal securities law that results in an accounting restatement. The policy covers a three-year period preceding the date on which the Company is required to prepare an accounting restatement. The look-back period is not retroactive for compensation awarded prior to the policy's January 1, 2022 effective date.

Stockholder Advisory Vote on Named Executive Officer Compensation

We conduct an annual stockholder advisory (non-binding) vote on named executive officer compensation (a “Say-on-Pay” vote) to ensure that stockholder input informs our compensation philosophy and decisions. At our 2021 Annual Meeting of Stockholders, approximately 86% of the shares entitled to vote on our “Say-on-Pay” proposal at the meeting approved the compensation of our named executive officers as disclosed in our 2021 definitive proxy statement. As the Compensation Committee reviewed our executive compensation policies and practices since this Say-on-Pay vote and made its compensation decisions for 2021 in a very challenging environment, it has been mindful of the level of support our stockholders have expressed for our approach to executive compensation and also considered feedback from our stockholder engagement efforts but did not make any changes to the compensation program as a direct result of this vote.

The Compensation Committee recognizes that pay practices continue to evolve, and as a result, it continues to refine our executive compensation policies and practices in its ongoing effort to ensure our executive compensation program supports our compensation philosophy and objectives, as well as our overall corporate goals and values.

We believe in the importance of engaging with and listening to our stockholders. As part of our ongoing efforts, over the past five years, we have enhanced our executive compensation program and corporate governance policies and practices based, in part, on the feedback we have received from our stockholders. In particular, over the past several years, we have conducted stockholder outreach to discuss our executive compensation program, among other things, with our significant stockholders. For additional information, see “How to Communicate with the Board – Stockholder Engagement.”

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Compensation Philosophy

Our philosophy is to establish and maintain an executive compensation program that attracts proven, talented leaders who possess the skills and experience necessary to achieve our financial, operational and strategic goals, while materially adding to our long-term value without creating excessive risk to the organization. We seek to structure our executive compensation packages to be consistent with the competitive market and to align the long-term interests of our Named Executive Officers and stockholders so that pay appropriately reflects performance in achieving our financial, operational, and strategic objectives. Specifically, our executive compensation program is designed to:

•Recruit and retain talented and experienced individuals who are able to develop, implement, and deliver on long-term value creation strategies;

•Ensure that our compensation is reasonable and competitive with the pay packages made available to executives at companies with which we compete for executive talent;

•Provide a substantial portion of each executive officer's compensation in elements that are directly tied to our long-term value and growth;

•Reward both company and individual performance and achievement; and

•Ensure that our compensation structure does not encourage unnecessary and excessive risk-taking.

Despite the ongoing and significant impacts of COVID-19 on our business, our overall compensation philosophy remains unchanged. Year-over-year changes in the elements of our compensation program were driven primarily by the unique circumstances faced by the Company in 2021 rather than a change in long-term philosophy and generally remained consistent with our philosophy.

Governance of Executive Compensation Program

Role of Compensation Committee

The Compensation Committee, which is composed entirely of independent directors, discharges the responsibilities of our Board of Directors with respect to the compensation of our Named Executive Officers and the non-employee members of our Board of Directors. Specifically, the Compensation Committee approves our compensation philosophy and oversees the design, development, and implementation of our executive compensation program and related policies and practices to ensure that they are consistent with the long-term interests of our stockholders. This includes having final authority to review and approve the compensation of our CEO and our other Named Executive Officers. For a discussion of our compensation philosophy and the principal objectives of our executive compensation program, see “Compensation Philosophy” above.

The Compensation Committee operates under a written charter adopted by our Board of Directors. A copy of the charter is posted on our website located at https://s22.q4cdn.com/731250486/files/doc_downloads/committee_charters/2018/GRPN-Comp-Committee-Charter-(Final_10-25-18).pdf

In carrying out its responsibilities, the Compensation Committee determines the amounts and allocates the mix of compensation between base salary, target annual performance-based bonus opportunities, and long-term incentive compensation for our Named Executive Officers. The Compensation Committee also selects the performance measures and establishes the target levels for our performance-based bonuses. In 2021, the Compensation Committee faced significant challenges in selecting appropriate measures and establishing meaningful performance baselines for these awards in light of the continuously evolving and unpredictable impacts of COVID-19 variants on our business. Even so, the Compensation Committee sought to balance maintaining stability throughout the duration of the pandemic with continuing to execute against our strategy for recovery and future growth in order to drive long-term stockholder value creation. The Compensation Committee also designs, approves, and oversees our 2011 Incentive Plan, grants all equity awards to our Named Executive Officers and has the authority to grant equity awards to other eligible employees in accordance with the terms of the 2011 Incentive Plan.

The Compensation Committee reviews our post-employment compensation arrangements, other executive benefits, and, if applicable, retirement benefits and perquisites from time to time. In addition, the Compensation Committee reviews and evaluates the risks associated with our compensation philosophy and executive compensation program as discussed under “Compensation Risk Assessment” below.

Further, the Compensation Committee is responsible for reviewing, discussing, and approving the Compensation Discussion and Analysis and the accompanying Compensation Committee Report for inclusion in the annual proxy statement that we file with the SEC.

To promote independent decision-making on executive compensation matters, the Compensation Committee regularly meets in executive session without management present, often with the participation of its compensation consultant. The Compensation

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Committee regularly assesses the effectiveness of our executive compensation program in driving performance, and uses stockholder feedback, competitive market data, applicable regulatory requirements, and external trends to inform its decision-making.

Compensation-Setting Process

Typically, the Compensation Committee reviews our executive compensation program and the elements of compensation of our Named Executive Officers on an annual basis, usually in the first quarter of the year. The Compensation Committee also will consider adjustments to the compensation of our Named Executive Officers at other times during the year if a change in the scope of an executive officer’s role and responsibilities, or other developments or circumstances, warrant such consideration. In particular, in 2021, given the unique circumstances faced by the Company due to the COVID-19 pandemic and changes in our senior management team, the Compensation Committee continued to consider and discuss 2021 executive compensation matters following our initial annual compensation review and respond appropriately to the evolving situation, as discussed further herein.

The Compensation Committee engages the services of a compensation consultant and considers the analysis and advice of its compensation consultant in discharging its responsibilities. Representatives of the compensation consultant attend Compensation Committee meetings and have direct access to Compensation Committee members.

In determining the amount of each element of compensation and the target total direct compensation of our Named Executive Officers, the Compensation Committee does not use a single method or measure in arriving at its decisions. In making decisions about the compensation of our Named Executive Officers, the members of the Compensation Committee rely primarily on their general experience and subjective considerations of various factors, including, without limitation, the following:

•Our executive compensation program objectives;

•Our performance against the financial, operational, and strategic objectives established by the Compensation Committee and our Board of Directors;

•The impact of any unique circumstances, challenges or developments affecting the Company;

•An individual Named Executive Officer's knowledge, skills, experience, qualifications, and tenure relative to other similarly situated executives at the companies in our compensation peer group;

•The scope of a Named Executive Officer’s role and responsibilities compared to other similarly situated executives at the companies in our compensation peer group;

•The performance of an individual Named 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;

•The potential of an individual Named Executive Officer to contribute to our long-term financial, operational, and strategic objectives;

•The proposed compensation packages of our other Named Executive Officers (internal pay equity);

•The compensation practices of our compensation peer group; and

•The recommendations of our Chief Executive Officer with respect to the compensation of our other Named Executive Officers.

These factors provide the framework for compensation decision-making and final decisions regarding the target total direct compensation opportunity for each Named Executive Officer. No single factor is determinative in setting compensation levels, nor is the impact of any individual factor on the determination of pay levels quantifiable. The Compensation Committee does not weigh these factors in any predetermined manner, nor does it apply any formulas in developing its compensation decisions. Further, in 2021, the Compensation Committee considered the unique challenges faced by the Company in balancing the need to provide ongoing stability and retention with incentivizing strong performance.

Role of Management

The Compensation Committee generally seeks input from our Chief Executive Officer, Chief Administrative Officer and other senior members of our Human Resources department when evaluating the performance and compensation of our Named Executive Officers, as well as during the process of negotiating compensation packages with new senior executive hires. The Compensation Committee gives considerable weight to our Chief Executive Officer's evaluation of our other Named Executive Officers because of his direct knowledge of each individual's performance and contributions.

The Compensation Committee solicits and reviews our Chief Executive Officer’s recommendations and proposals with respect to adjustments to target total 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

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Committee reviews and discusses these recommendations and proposals with our Chief Executive Officer and considers them as one factor in determining the compensation for our Named Executive Officers.

Our Chief Financial Officer and Chief Accounting Officer also work with the Chief People Officer and Senior Director, Compensation and Benefits to advise the Compensation Committee with regard to the financial and accounting implications of our compensation programs and hiring decisions.

None of our Named Executive Officers participates in or is present during Compensation Committee deliberations relating to his or her own compensation.

Role of Compensation Consultant

The Compensation Committee engages an external compensation consultant to assist it in discharging its responsibilities. This compensation consultant, who reports directly to the Compensation Committee, provides competitive market data, analysis, and other resources to help execute our overall executive compensation strategy. The Compensation Committee directs the compensation consultant to work with the appropriate members of management to obtain information necessary to prepare its analysis of our executive compensation program and evaluate our CEO’s recommendations. The compensation consultant also meets with the Compensation Committee during its regular meetings and in executive session, where no members of management are present, and can meet with the Compensation Committee chair and other members of the committee outside of regular meetings. The Compensation Committee has the sole power to hire, terminate or replace the compensation consultant at any time and periodically reviews its relationship with the compensation consultant.

For 2021, the Compensation Committee engaged Compensia, Inc., a national compensation consulting firm (“Compensia”), as its compensation consultant to advise on executive compensation matters, provide data and an analysis of competitive market pay practices for our executive officers as part of the annual executive compensation review process, and assist with the review and updating of the compensation peer group. In addition, in 2021, Compensia advised the Compensation Committee as it navigated the compensation related issues raised by the impact of COVID-19 on the Company and changes in senior management. Although we may retain the Compensation Committee’s compensation consultant for discrete projects from time to time, Compensia did not provide any other material services to the Company (separate from consulting advice provided to the Compensation Committee) in 2021.

The Compensation Committee has a policy for compensation consultant independence under which any compensation consultant retained by the committee must be independent of the Company and management. The Compensation Committee reviewed the independence of Compensia in light of this policy, SEC rules, and the applicable NASDAQ listing standards regarding compensation consultants and has concluded that Compensia’s work for the committee did not raise any conflict of interest, and that Compensia was able to provide the Compensation Committee with independent advice.

Use of Competitive Market Data

The Compensation Committee, with the assistance of its compensation consultant, reviews and updates our compensation peer group and other compensation data annually to ensure that it remains appropriate for review and comparison purposes. The compensation peer group used to make 2021 compensation decisions included companies in the Internet Software & Services and Internet & Direct Marketing Retail industries whose businesses align with ours, as well as other software companies with a size comparable to ours based on revenue and market capitalization. Our compensation peer group includes companies with which we compete for executive talent, which includes larger global companies, as well as smaller companies. The technology labor market is highly competitive for executive level talent that can provide innovative leadership while managing at a global scale across several lines of business. The Compensation Committee believes that it is necessary to consider these factors in making compensation decisions in order to attract and retain talent.

For 2021, the Compensation Committee undertook a detailed review of the peer group to eliminate companies significantly above our revenue and market capitalization. The companies in the compensation peer group used for 2021 compensation decisions had median revenues of approximately $1.1 billion and a median market capitalization of approximately $2.7 billion when such group was approved by the Compensation Committee in October 2020. This methodology used for determining the 2021 peer group remains consistent with prior years, and companies were added to and removed from the peer group based on whether they met or continued to meet these criteria. The 2021 peer group consisted of the following companies:

1-800-Flowers.com* Gogo*

Alarm.com Holdings* Go Pro*

Allscripts Healthcare* Grubhub

ANGI Homeservices IAC/InterActiveCorp

Blue Apron Holdings* Overstock.com

Box* Shutterstock*

CarGurus* Stamps.com*

Cars.com* Stitch Fix

CDK Global TripAdvisor

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Ebix* Yelp

Endurance International* Zillow Group

GoDaddy Zynga

*Asterisks indicate new additions to the previous compensation peer group. The following companies were removed from the previous compensation peer group: Akamai Technologies, Citrix Systems, Match Group, Square, Twitter, Wayfair, Workday and Shutterfly.

We also participate in surveys of market compensation practices in our industry and broadly across other industries and undertake specialized studies of competitive market practices using the most relevant published survey sources and public filings.

The Compensation Committee uses market data drawn from the companies in the compensation peer group to evaluate the competitive market when determining the target total direct compensation opportunities for our Named Executive Officers, including base salary, target annual performance-based bonus opportunities, and long-term incentive compensation. While the Compensation Committee considers this information, it does not engage in strict benchmarking to a fixed percentile. The Compensation Committee relies on the expertise of its members to develop pay packages that are appropriate for each Named Executive Officer. Given the ongoing nature of the unique circumstances faced by the Company throughout 2020 and 2021, the Company considered a variety of factors, in addition to market data, in continuing to evaluate and adjust its executive compensation program during 2021.

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Elements of Executive Compensation

For 2021, the target total direct compensation opportunities of our incumbent Named Executive Officers, after taking into account the COVID-related changes described herein, consisted of base salary, a target performance-based bonus opportunity, and long-term incentive compensation in the form of RSU awards. The following table provides a summary of the 2021 compensation arrangements for our Named Executive Officers.

Elements of Executive Compensation and 2021 Snapshot


	Compensation Element	Objective
Fixed	Base Salary	Provide competitive level of fixed compensation. Attract and retain key executive talent.
Variable Compensation (Performance-Based and All At-Risk)	Performance-Based Bonus	Motivate and reward executives for achieving annual Company financial objectives. Also promotes retention.
Variable Compensation (At-Risk Component)	Time-Based Restricted Stock Unit ("RSU") Awards	Directly aligns interests of executives with long-term stockholder value creation and promotes retention.

Base Salary

We offer competitive base salaries, which are intended to provide a level of stable fixed compensation to our Named Executive Officers for the performance of their day-to-day services. We use base salary to recognize the experience, skills, knowledge, and responsibilities of our Named Executive Officers, as well as to reflect competitive market practice.

In determining the base salaries for our Named Executive Officers, the Compensation Committee takes into consideration a competitive market analysis of relevant compensation data for each position prepared by its compensation consultant, its assessment of competitive market conditions, base salary and target total cash compensation relative to other executives in similar positions, the recommendations of our Chief Executive Officer (other than with respect to his own base salary), and the factors described in “Governance of Executive Compensation Program – Role of Compensation Committee – Compensation-Setting Process” above.

In February 2021, in connection with its annual review of our executive compensation program, the Compensation Committee evaluated the base salaries of our then-Named Executive Officers and decided not to increase their base salary rates above their 2020 levels. The base salary rates of our Named Executive Officers for 2021 were as follows:


Named Executive Officer	2020 Base Salary as of 12/31/2020 ($)	2021 Base Salary as of 12/31/2021 ($)	Percentage Increase
Mr. Deshpande	—	700,000 (1)	n/a
Mr. Schmitz	275,000	325,000 (2)	18%
Mr. Drobny	590,000	590,000	—
Mr. Cooper	600,000	600,000	—
Ms. Thomas	590,000	590,000	—

(1)Effective December 10, 2021 in connection with Mr. Deshpande's appointment as Chief Executive Officer.

(2)This base salary does not include Mr. Schmitz’s stipend. Specifically, in connection with his appointment as our Interim Chief Financial Officer effective November 5, 2021, the Compensation Committee approved a monthly stipend of $18,750 for Mr. Schmitz (in addition to his then-current base salary) to be paid in each month in which he served (for the full or partial month) as our Interim Chief Financial Officer. Mr. Schmitz received a salary increase from $275,000 to $283,800 effective April 1, 2021 in connection with his annual compensation review as VP of Finance. He also received a salary increase from $283,800 to $325,000 effective October 1, 2021 in connection with his promotion to SVP of Finance. Mr. Schmitz did not receive a salary increase when appointed to Interim CFO on November 5, 2021 but does receive a monthly stipend as described above.

The base salaries actually paid to our Named Executive Officers in 2021 are set forth in the “2021 Summary Compensation Table” below.

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Short-Term Incentive Compensation

2021 Performance-Based Bonus

In 2021, each of our Named Executive Officers participated in our annual performance-based bonus plan (the "2021 ABP"), with the exception of Mr. Deshpande, who was not eligible to earn a performance-based bonus for 2021 based on his start date with the Company, and who became eligible to participate in this program effective January 1, 2022. The Compensation Committee approved the performance-based bonus targets for our then Named Executive Officers in February 2021.

In April 2021, the Compensation Committee determined that due to ongoing challenges in setting meaningful and motivating full-year targets for the plan performance measures given the uncertainty and volatility arising from the COVID-19 pandemic that it was in the best interest of the Company and of stockholders to split the 2021 ABP into two semi-annual performance periods, with payment opportunities for each prorated target amount in August 2021 and April 2022, respectively.

Funding for the first semi-annual performance period from January 1, 2021 - June 30, 2021 (the "2021 H1 ABP") was based 100% on Company performance. As a result of the continued challenges in establishing meaningful and measurable performance metrics due to the unprecedented and continuously evolving circumstances created by the COVID-19 pandemic and resulting volatility, funding for the second semi-annual performance period from July 1, 2021 - December 31, 2021 (the "2021 H2 ABP") was based on Compensation Committee discretion. Based on this decision, the Compensation Committee approved the corporate performance measures and/or bonus structure, which are set forth below, in April 2021 and September 2021, respectively.

Under the 2021 ABP, the Compensation Committee could exercise downward discretion on individual payouts with respect to individual Named Executive Officer performance based on a recommendation from our Chief Executive Officer (other than with respect to his own performance-based bonus payout), but did not exercise any such downward discretion in 2021.

2021 Performance-Based Bonus Targets

In February 2021, the Compensation Committee approved 2021 ABP target bonus opportunities for each of our then Named Executive Officers. The amount of each Named Executive Officer’s 2021 target performance-based bonus opportunity (expressed as a percentage of base salary) was determined by the Compensation Committee after taking into consideration a competitive market analysis of the relevant compensation data for each position prepared by its compensation consultant, its assessment of competitive market conditions, his or her performance-based bonus target and total target annual cash compensation relative to other executives in similar positions, the recommendations of our Chief Executive Officer (other than with respect to his own performance-based bonus target), and the factors described in "Governance of Executive Compensation Program – Role of Compensation Committee – Compensation-Setting Process" above.

Performance-based bonus targets under the 2021 ABP for our Named Executive Officers were as follows:


Named Executive Officer	2020 ABP Target / Guaranteed Cash (US $)	2020 ABP Target / Guaranteed Cash (as a % of base salary)		2021 ABP Target (US $)	2021 ABP Target (as a % of base salary)		Percentage Increase
Kedar Deshpande	n/a	n/a		n/a	n/a		n/a
Damien Schmitz	110,000	40	%	162,500 (1)	50	%	48	%
Dane Drobny (2)	590,000	100	%	590,000	100	%	—
Aaron Cooper (2)	600,000	100	%	600,000	100	%	—
Melissa Thomas (2)	590,000	100	%	590,000	100	%	—

(1)Mr. Schmitz's 2021 ABP Target reflects his most recent annualized target bonus opportunity (calculated by multiplying his base salary of $325,000 by his target performance-based bonus opportunity of 50%), not accounting for in-year prorations as a result of changes to base salary or bonus target percentage.

(2)As previously disclosed, Messrs. Drobny and Cooper and Ms. Thomas were eligible to receive a guaranteed cash bonus provided in lieu of the usual performance-based annual bonus program in 2020 to provide stability and promote retention given the unique challenges of the COVID-19 pandemic and changes to our senior management team.

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Corporate Performance Measures

In April 2021, the Compensation Committee selected Adjusted EBITDA as the corporate performance measure for the 2021 H1 ABP. The Compensation Committee believed that this performance measure was appropriate for our business because it ensured a focus on expense management and profitability for the period.

For purposes of the 2021 H1 ABP, "Adjusted EBITDA" was defined as net income (loss) from continuing operations excluding income taxes, interest and other non-operating items, depreciation and amortization, stock-based compensation, acquisition-related expense (benefit), net and other special charges and credits, including items that are unusual in nature or infrequently occurring. Adjusted EBITDA is a non-GAAP financial measure that we present to aid our stockholders in understanding our financial results. In addition, it is a key measure used by our management and Board of Directors to evaluate operating performance, generate future plans, and make strategic decisions regarding the allocation of capital. See Appendix A for a reconciliation of Adjusted EBITDA to the most comparable U.S. GAAP performance measure, “Net income (loss) from continuing operations.”

For purposes of the 2021 H1 ABP, the Compensation Committee established threshold, target, and maximum performance levels for our Adjusted EBITDA as the basis for determining bonus payouts. These performance levels were established by the Compensation Committee after taking into account the Company’s strategic initiatives, our recent financial performance, internal budgeting for the year, and expected market conditions including projected ongoing impacts from COVID-19. Bonus payouts were conditioned upon our achievement of at least the threshold Adjusted EBITDA performance level for the performance period before any payout would be made.

Linear interpolation would be used to determine the bonus payout with respect to our actual Adjusted EBITDA results for 2021 for performance between "threshold" and "target" or for performance between "target" and “maximum,” as applicable. In determining whether a performance level had been satisfied, the Compensation Committee, in its discretion, could exclude the impact of special charges or credits relating to any divestiture, spin off, merger, acquisition or other business combination transaction.

The following table sets forth the performance levels for Adjusted EBITDA and our actual results for the 2021 H1 ABP:

2021 H1 ABP

Funding Levels

Outcomes

Performance Metric

Threshold
(50%)

Target
(100%)

Maximum
(150%)

Actual Achievement

Total Performance Payout

Adjusted EBITDA

$17.1M

$37.2M

$52.2M

$71.3M

150%

In September 2021, the Compensation Committee decided that in light of the ongoing challenges in establishing meaningful and measurable performance metrics due to the unprecedented and continuously evolving circumstances created by the COVID-19 pandemic and resulting volatility, funding for the 2021 H2 ABP would be based on the discretion of the Compensation Committee. In applying its discretion, the Compensation Committee took into consideration our overall financial performance and recovery, including both top-line and bottom-line financial results in the form of Global Local Billings and Adjusted EBITDA, within the context of business challenges in light of evolving COVID-19 variants and resulting impacts on external market opportunities, and approved funding for the 2021 H2 ABP at 40% of target performance-based bonus opportunities for the second half of 2021.

2021 Performance-Based Bonus Results

In July 2021, the Compensation Committee evaluated our financial performance for the 2021 H1 ABP performance period. For the first half of 2021, we achieved Adjusted EBITDA of $71.3 million. Based on these results, our Named Executive Officers were generally eligible to receive a bonus equal to 150% of their target performance-based bonus opportunity, prorated for the first semi-annual performance period, as noted in the chart above.

In February 2022, as described above, the Compensation Committee evaluated our overall financial performance in light of the external challenges we faced as well as the opportunities we capitalized on throughout the year, and based on this assessment, exercised its discretion so that our Named Executive Officers received a bonus equal to 40% of their target performance-based bonus opportunity, prorated for the second semi-annual performance period.

The 2021 ABP payouts for our Named Executive Officers were primarily determined based on the financial performance measures described above. However, the Compensation Committee considers the overall performance of our other Named Executive Officers (based upon the recommendations of our Chief Executive Officer) and may exercise downward discretion to the performance-based bonus payout of a Named Executive Officer based on individual performance during the year. Performance reviews are generally based on a qualitative assessment of performance and consider each Named Executive Officer’s performance and the performance of the department or departments for which he or she has responsibility, as well as

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the contributions the Named Executive Officer and department are making to our overall success. For 2021, the Compensation Committee did not make any further adjustments to the performance-based bonus payouts for our Named Executive Officers based on individual performance.

The following table shows the target performance-based bonus opportunities and the actual performance-based bonuses paid to our Named Executive Officers for the first half of 2021:


Named Executive Officer	Annual 2021 Target (US $)	Prorated 2021 H1 ABP Target (US $) (1)	Payout as % of Target		Earned US $
Kedar Deshpande	n/a	n/a	n/a		n/a
Damien Schmitz (2)	113,520	55,426	150	%	83,138
Dane Drobny	590,000	292,575	150	%	438,863
Aaron Cooper	600,000	297,534	150	%	446,301
Melissa Thomas	590,000	292,575	150	%	438,863

(1)Prorated 2021 H1 ABP target performance-based bonus opportunities reflect a proration for the 181 days from January 1, 2021 - June 30, 2021 out of 365 days in 2021. For Mr. Schmitz, this also includes the proration for his salary change from $275,000 to $283,800, effective April 1, 2021, concurrent with his annual compensation review.

(2)Mr. Schmitz's 2021 H1 ABP target performance-based bonus opportunity reflects his annualized target performance-based bonus opportunity effective on April 1, 2022 calculated as follows: Base Salary ($283,800) x ABP Target (40%).

The following table shows the target performance-based bonus opportunities and the actual performance-based bonuses paid to our Named Executive Officers for the second half of 2021:

Named Executive Officer

Annual Target (US $)

Prorated H2 Target (US $) (1)

Payout as % of Target

Earned US $

Kedar Deshpande

n/a

Damien Schmitz (2)

162,500

69,572

27,829

Dane Drobny

590,000

297,425

118,970

Aaron Cooper

n/a

Melissa Thomas

n/a

(1)Prorated 2021 H2 ABP target performance-based bonus opportunities reflect a proration for the 184 days from July 1, 2021 - December 31, 2021 out of 365 days in 2021. For Mr. Schmitz, this also includes the proration for his annual base salary change from $283,800 to $325,000 and his target performance-based bonus opportunity change from 40% to 50%, both of which were effective upon his promotion to Senior Vice President of Finance on October 1, 2021.

(2)Mr. Schmitz's 2021 H2 ABP target performance-based bonus opportunity reflects his annualized target performance-based bonus opportunity effective upon his promotion to Senior Vice President of Finance on October 1, 2021, calculated as follows: Base Salary ($325,000) x ABP Target (50%).

The 2021 ABP awards paid to our Named Executive Officers for 2021 are set forth in the "2021 Summary Compensation Table" below.

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One-Time Cash Awards

In connection with appointments to Chief Executive Officer and Interim Chief Financial Officer, and in light of the need to retain key senior executives through our management transition, our incumbent Named Executive Officers received one-time cash awards as set forth in the table below:


Named Executive Officer			One-Time Cash Award Value ($)
Mr. Deshpande (1)			1,000,000
Mr. Schmitz (2)			162,500
Mr. Drobny (3)			1,000,000

(1)Mr. Deshpande received a one-time cash sign-on bonus in December 2021, negotiated in connection with his appointment as our Chief Executive Officer, subject to a 36 month pro-rata clawback. Specifically, Mr. Deshpande's obligation to repay the sign-on bonus is reduced by 1/36 for every completed month of employment.

(2)Mr. Schmitz received a one-time cash retention bonus in connection with his appointment to Interim CFO, payable on August 15, 2022, subject to Mr. Schmitz's continued employment with us through the payment date.

(3)In light of management changes and to ensure stability and retention through the transition of Mr. Deshpande as our new Chief Executive Officer, Mr. Drobny received a one-time cash retention bonus paid in January 2022, subject to a 36 month pro-rata clawback. Specifically, Mr. Drobny's obligation to repay the retention bonus is reduced by 1/36 for every completed month of employment after the payment date.

Equity Awards

Our long-term incentive compensation program is designed to align the interests of our Named Executive Officers with the interests of our stockholders, promote the achievement of our financial and operational/strategic goals, and reward the creation of sustained long-term stockholder value while satisfying our retention objectives. In 2021, our long-term incentive compensation program consisted of time-based RSU awards. We believe that RSU awards align the interests of our Named Executive Officers with the interests of our stockholders and provide a longer-term focus through a multi-year vesting schedule, while managing dilution to existing investors, providing greater predictability to our Named Executive Officers in the value of their compensation, and building ownership.

In general, we believe that PSU awards serve as an important motivator for our Named Executive Officers to drive financial performance and provide a direct link between compensation and stockholder return, thereby motivating our Named Executive Officers to focus on and strive to achieve both our annual and long-term financial and strategic objectives, including stockholder value creation. PSU awards were intended to make up a portion of our Named Executive Officer compensation in 2021, and were communicated to our then Named Executive Officers in February of 2021. However, in response to continued challenges in establishing meaningful and measurable performance metrics (different from the metric already approved for the 2021 H1 ABP) due to the unprecedented and continuously evolving circumstances created by the COVID-19 pandemic and resulting volatility, the Compensation Committee deemed it advisable and in the best interests of the Company and its stockholders to instead grant these awards as time-based RSU awards in April 2021 or May 2021, as applicable.

In determining the size of the equity awards to be granted to our Named Executive Officers as part of its annual review of their compensation, the Compensation Committee takes into consideration a competitive market analysis of the relevant compensation data for each position prepared by its compensation consultant, its assessment of competitive market conditions, the Named Executive Officer’s long-term incentive compensation relative to other executives in similar positions, the outstanding and unvested equity holdings of the Named Executive Officer, the recommendations of our CEO (other than with respect to his own equity award), and the other factors described in "Governance of Executive Compensation Program – Role of Compensation Committee – Compensation-Setting Process" above.

RSU Awards

In February 2021, in connection with our annual equity award process (and in April 2021 for Mr. Schmitz), the Compensation Committee granted the following RSU awards to our then Named Executive Officers, which were based on the target grant date dollar values set forth below:

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Named Executive Officer	2021 RSU Award (target $ value at grant)	2021 RSU Award (number of RSUs) (1)
Mr. Cooper (2)	2,520,000	58,215
Ms. Thomas (3)	828,000	19,128
Mr. Drobny (4)	528,000	12,198
Mr. Schmitz (5)	160,000	3,696

(1)The actual number of RSUs granted was determined using the average closing price of a share of our common stock for the three-month period from January 1, 2021 to March 31, 2021, and accordingly, the grant date fair market value of these awards differs from the target values.

(2)The RSUs subject to Mr. Cooper's award were to vest as follows: 29,107 RSUs vesting on January 2, 2022, 7,277 RSUs vesting on April 2, 2022, 7,277 RSUs vesting on July 2, 2022, 7,277 RSUs vesting on October 2, 2022, and 7,277 RSUs vesting on January 2, 2023, subject to Mr. Cooper's continued employment with us through each applicable vesting date. Vesting of 50,938 RSUs were accelerated and the remaining RSUs were forfeited upon Mr. Cooper's departure in December 2021.

(3)The RSUs subject to Ms. Thomas's award were to vest as follows: 9,564 RSUs vesting on January 2, 2022, and 9,564 RSUs vesting on January 2, 2023, subject to Ms. Thomas's continued employment with us through each applicable vesting date. All RSUs were forfeited upon Ms. Thomas's resignation in November 2021.

(4)The RSUs subject to Mr. Drobny’s award vest as follows: 6,099 shares vesting on January 2, 2022, and 6,099 RSUs vesting on January 2, 2023, subject to Mr. Drobny's continued employment with us through each applicable vesting date.

(5)The RSUs subject to Mr. Schmitz's award vest as follows: 1,848 RSUs vesting on May 20, 2022, and 1,848 RSUs vesting on May 20, 2023, subject to Mr. Schmitz's continued employment with us through each applicable vesting date.

In connection with his promotion to Senior Vice President of Finance effective October 1, 2021 and his appointment as our Interim Chief Financial Officer effective November 5, 2021, Mr. Schmitz received the following RSU awards:


Named Executive Officer	2021 RSU Award (target $ value at grant)	2021 RSU Award (number of RSUs)
Mr. Schmitz(1)	400,000	17,668
Mr. Schmitz(2)	300,000	12,215

(1)This RSU award was granted in connection with Mr. Schmitz's promotion to Senior Vice President of Finance. The actual number of RSUs granted was determined using the average closing price of a share of our common stock from September 2021, and accordingly, the grant fair market value of this award differs from the target value. This RSU award vests as follows: 5,889 RSUs vesting on October 20, 2022, 5,889 RSUs vesting on October 20, 2023, and 5,890 RSUs vesting on October 20, 2024, subject to Mr. Schmitz's continued employment with us through each applicable vesting date.

(2)This RSU award was granted in connection with Mr. Schmitz's appointment to Interim CFO. The actual number of RSUs granted was determined using the average closing price of a share of our common stock from November 2021, and accordingly, the grant fair market value of this award differs from the target value. This RSU award vests as follows: 100% vesting on August 15, 2022, subject to Mr. Schmitz's continued employment with us through the vesting date.

In addition, in November 2021, in light of management changes and to ensure stability and retention through the transition of Mr. Deshpande as our new Chief Executive Officer, the Compensation Committee granted Mr. Drobny the following RSU award:


Named Executive Officer	2021 RSU Award (target $ value at grant)	2021 RSU Award (number of RSUs) (1)
Mr. Drobny (2)	2,910,000	132,634

(1)The actual number of RSUs granted was determined using the closing price of a share of our common stock on November 29, 2021.

(2)This RSU award vests as follows: 6.25% of the shares subject to the award vesting on each of February 20, 2022, May 20, 2022, August 20, 2022, November 20, 2022, February 20, 2023, May 20, 2023, August 20, 2023, November 20, 2023, and 12.5% on each of February 20, 2024, May 20, 2024, August 20, 2024, and November 20, 2024, subject to Mr. Drobny's continued employment with us through each applicable vesting date.

In connection with his appointment as our Chief Executive Officer effective December 10, 2021, Mr. Deshpande received the following RSU awards:

34 | Groupon Proxy Statement and Notice of 2022 Annual Meeting


Named Executive Officer	Grant Date	2021 RSU Award (target $ value at grant)	2021 RSU Award (number of RSUs) (1)
Mr. Deshpande (2)	12/10/2021	8,377,500	375,000
Mr. Deshpande (2)	1/24/2022	8,122,489	363,585

(1)The actual number of RSUs granted was determined using the closing price of a share of our common stock on December 10, 2021.

(2)As previously disclosed, these awards were effective in two separate calendar years, due to a calendar year limit imposed by the Groupon, Inc. 2011 Incentive Plan. These RSU awards vest as follows: 1/12 of the units subject to the awards vest on each of March 10, 2022, June 10, 2022, September 10, 2022, December 10, 2022, March 10, 2023, June 10, 2023, September 10, 2023, December 10, 2023, March 10, 2024, June 10, 2024, September 10, 2024, December 10, 2024, subject to Mr. Deshpande's continued employment with us through each applicable vesting date.

Proposed PSU Awards (Granted as RSUs)

In February 2021, PSU awards for our then Named Executive Officers were authorized for the target amounts set forth in the table below. A PSU award for Mr. Schmitz was also authorized by the Compensation Committee in April 2021 prior to his appointment as Interim CFO in November 2021.

These awards were intended to be subject to performance goals set by the Compensation Committee at a future time. In addition to the performance-based vesting requirements, the PSU awards were intended to be subject to time-based vesting requirements.

In April and May 2021, the Compensation Committee determined that in light of the ongoing challenges in establishing meaningful and measurable performance metrics (different from the metric already approved for the 2021 H1 ABP) due to the unprecedented and continuously evolving circumstances created by the COVID-19 pandemic and resulting volatility, it would be in the best interests of the Company and its stockholders to grant time-based RSU awards instead of the previously communicated PSUs in the amounts and subject to the vesting schedules set forth below.


Named Executive Officer	2021 RSUs (Previously Communicated as PSUs) (target value at grant)	2021 RSUs (Previously Communicated as PSUs) (target number of shares) (1)
Mr. Cooper (2)	1,680,000	38,810
Ms. Thomas (3)	552,000	12,752
Mr. Drobny (4)	352,000	8,132
Mr. Schmitz (5)	40,000	924

(2)The RSUs subject to Mr. Cooper's award were to vest as follows: 19,405 RSUs vesting on January 2, 2022, 4,851 RSUs vesting on April 2, 2022, 4,851 RSUs vesting on July 2, 2022, 4,851 RSUs vesting on October 2, 2022, and 4,852 RSUs vesting on January 2, 2023, subject to Mr. Cooper's continued employment with us through each applicable vesting date. The vesting of 33,958 RSUs was accelerated and the remaining shares were forfeited upon Mr. Cooper's termination in December 2021.

(3)The RSUs subject to Ms. Thomas's award were to vest as follows: 6,376 RSUs vesting on January 2, 2022, and 6,376 RSUs vesting on January 2, 2023, subject to Ms. Thomas's continued employment with us through each applicable vesting date. All shares of this grant were forfeited due to Ms. Thomas's termination in November 2021.

(4)The RSUs subject to Mr. Drobny's award vest as follows: 4,066 RSUs vesting on January 2, 2022, and 4,066 RSUs vesting on January 2, 2023, subject to Mr. Drobny's continued employment with us through each applicable vesting date.

(5)The RSUs subject to Mr. Schmitz's award vest as follows: 462 RSUs vesting on January 2, 2022, and 462 RSUs vesting on January 2, 2023, subject to Mr. Schmitz's continued employment with us through each applicable vesting date.

35 | Groupon Proxy St

SEC Form DEF 14A filed by Groupon Inc.