PAYPAL - DEF 14A

DEF 14A 1 lpypl2021_def14a.htm PAYPAL HOLDINGS, INC. - DEF 14A PAYPAL - DEF 14A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

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PayPal Holdings, Inc.

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Message from
Our President and CEO

Dear Colleagues, Customers, Partners and Stockholders:

2020 was a uniquely challenging and transformative year. The COVID-19 pandemic, which has already had far-reaching effects on almost every aspect of our lives and communities, will continue to impact millions across the globe for years to come. Underserved communities have been hit the hardest, and we all need to do our part to ensure an inclusive recovery. At PayPal, our mission to democratize financial services and advance the financial health of families, businesses and communities has never been more important. We are proud of the ways we have continued to live our values and make a meaningful difference for our customers and communities, while driving long-term, sustainable growth for our stockholders.

Since the onset of the pandemic, our top priority has been the health and well-being of our employees. We worked quickly to transition nearly 100% of our global workforce to work remotely in a safe and effective manner. We introduced new benefits and resources, and we pledged to continue paying employees unable to work because of the impacts of COVID-19. For our consumers and merchants, we provided relief from the pressures of the pandemic, mobilized to become one of the first non-bank lenders approved to provide access to Paycheck Protection Program (“PPP”) loans to small businesses in need, and enabled consumers to receive stimulus payments through their Venmo and PayPal accounts.

Last year also made clear that everyone has a responsibility to take action in support of racial equity and social justice. The pandemic has had a disproportionate effect on communities of color – as demonstrated by case numbers and mortality rates, as well as the devastating economic impact on Black-owned small businesses in particular. In alignment with our mission, vision and values, we made a $535 million commitment to do our part to address the economic underpinnings of these inequities and to help close the racial wealth gap. This will be a sustained area of focus for us. We will continue to fulfill our core value of inclusion by demonstrating our unwavering belief that Black lives matter, and by furthering our work to build more just communities and economies.

The pandemic has accelerated the global movement toward digital payments. It has unleashed a digital wave of change across almost all industries, advancing digital transformation by at least three to five years. The shift away from cash, already well underway before the pandemic began, has become even more apparent. This transition opens new opportunities to upgrade the current financial system to one that is fundamentally more affordable, efficient and inclusive.

This shift to the digital economy, combined with the quick and effective efforts of our teams to respond to the moment, and the strong foundation of customer and public trust in our platform and products, led to PayPal’s strongest year of performance. We delivered a record 73 million net new active accounts, reached 29 million merchant accounts on our platform and processed a record 15.4 billion payment transactions. We achieved new heights in product innovation, launching the Venmo credit card and driving wide adoption of our QR codes and Global Pay Later solutions, like Pay in 4. And we expanded our digital wallet capabilities by enabling U.S. customers to buy, sell and hold select cryptocurrencies through their PayPal account.

The Future of Digital Payments

We have made great strides since becoming a publicly-traded company, but the coming years hold even greater promise. We have solidified our role as an essential company in the financial lives of our customers and we will continue to build on that foundation. The opportunity ahead is enormous, and PayPal is well-positioned to play a leading role in driving the future of digital payments and commerce.


	We see five key trends emerging that will change how people and businesses connect, and we believe we are uniquely positioned to drive these trends going forward:

			Digital-First The new digital-first paradigm will change the way people live, work, play and pay. The lines between physical and digital are disappearing, and this will fundamentally change how business is conducted. Digital will be the primary method of customer engagement.

			Home Delivery/Store Pickup Retail strategy is shifting away from physical storefronts to optimizing for home delivery and store pick-up. Consumers are prioritizing safety and convenience.

			Digital Wallets Digital wallets will create a connected ecosystem and a simple way to enable, pay and track transactions across all touchpoints. As separate apps become one, platforms can more effectively personalize recommendations and safeguard data.

			E-commerce As consumers move away from in-store purchasing, commerce will be done in new spaces. There will be more ways to meet consumers where they are – including tailored offers, universal checkout, and increased importance of platforms like Honey that will enable merchants to tap into demand.

			Digital Currencies Finally, a new cashless financial system is emerging. Digital currencies will increasingly be developed by central banks and adopted by consumers. This technology can help address fundamental problems in the current system, but will also require deep public-private collaboration.

We are building a digital wallet for consumers and commerce platform for merchants, designed to directly address and help shape these trends, while keeping our customers and their security at the forefront. Our digital wallet will integrate payments, financial services, shopping tools and digital IDs, and will work seamlessly both online and offline. And our PayPal Commerce Platform will enable merchants of all sizes to embrace a digital-first strategy. For our small business customers, who are so essential to our local communities, it is imperative that they not only survive the transition to the digital economy, but thrive in it. We cannot – and we will not – leave them behind. We aim to serve as a strategic partner to our merchants to help enable them to adapt to this new context, and to contribute to the development of a more inclusive economy for our customers and communities.

Driving Responsible Innovation

We are working to lead a responsible transition to the digital economy, but we also know that no single company, organization or institution can do it all alone. It will require cooperation and collective action among all stakeholders, above and beyond the current level of engagement. The world has changed and our challenges and opportunities have changed as well. We need a greater level of collaboration between the public and private sectors to serve our shared constituencies, achieve systemic impact and build new frameworks for the future. Corporations should increasingly consider and commit to a multi-stakeholder approach, focusing on delivering shared value across all key stakeholders, including employees, stockholders, customers, local communities and those in the public sector.

We take a transparent and collaborative approach to our regulatory relationships and share a commitment to protecting our customers, their data and our platform. We will continue to focus on building and sustaining trusted relationships at all levels to scale our innovation in a responsible manner. We always strive to meet or exceed the letter and spirit of the laws of the countries in which we do business through continuous focus and significant investment in our compliance programs, platforms and practices.

We have invested in building a world-class compliance and risk management team and compliance structure that enables us to work closely with regulators and governments. Since we became an independent public company, this function has grown to almost 4,000 people, enabling us to take a leading role in creating meaningful partnerships between the private, public and non-profit sectors. We have developed expertise in detecting bad actors on our platform and have become a notable leader in the fight against financial crime. This investment is a key differentiator for PayPal and will help ensure we identify and advance areas of mutual interest for our shared constituencies.

Fulfilling Our Mission, Vision and Values

For many years, conventional wisdom posed a false choice: that a business could either be profitable or do good in the world. Today, it is clear that purpose is not just a “nice to have,” but is essential to long-term, sustainable business performance. For PayPal, purpose is integral to our strategy and our competitive advantage. The expectation that businesses drive positive social and environmental change is greater than ever, and this past year has demonstrated the critical role the private sector has to play in building and leading an inclusive recovery.

At PayPal, everything we do is driven by our mission, vision and values. In 2019, we launched our Employee Financial Wellness initiative to help strengthen the financial security of our employees. This initiative served to support our employees as they managed the unexpected challenges of the pandemic. Over the last year, we have significantly improved the PayPal-defined estimated net disposable income (or the discretionary income remaining for our employees after taxes and typical living expenses are paid) for hourly and entry-level employees, and we have made significant progress against our 20% goal. We are also leading a new coalition with JUST Capital to encourage other business leaders to make the financial wellness of their employees a strategic priority.

We continue to build new partnerships to support underserved and underrepresented communities. Earlier this year, we made a $5 million commitment to join Uber in a coalition to provide free or discounted rides to vaccination sites in the U.S. In February, we joined the UN Generation Equality Forum as the private sector leader for the Economic Justice and Rights Coalition. Through this initiative, we will help catalyze the movement for the next stage of impact on gender equality.

We will also continue to fulfill the commitments we made through our $535 million initiative to advance racial equity and social justice. As highlighted below, we have already made significant progress in allocating these funds and we will continue to seek out new opportunities for impact. Last month, we announced the establishment of the Maggie Lena Walker Award, which will recognize and promote the achievements of underrepresented women in business who have demonstrated a deep commitment to economically empowering those in their communities. It is critical that the private sector continue to apply a long-term focus on this important area, and that we collectively build upon the efforts from the past year to truly address systemic racism and injustice.

Our upcoming Global Impact Report will showcase these efforts and many more of our social innovation and ESG priorities, including our science-based target to reach net-zero emissions by 2040, in greater detail.

Our Efforts to Support Black Businesses, Advance Economic Equality and Strengthen Our Communities

As of February 2021, more than $300 million of the $535 million PayPal committed has already been deployed. These funds have provided immediate financial relief to small businesses and will also sustain the long-term growth and expansion of economic opportunity for Black and underrepresented businesses and communities.

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After receiving nearly 55,000 applicants within 72 hours of our Empowerment Grant program launch, we have distributed $15 million in grants to nearly 1,400 Black-owned businesses in partnership with the Association for Enterprise Opportunity. The impact of these grants is best described by a selection of business owners themselves:

			Bridgett Jeffries, owner of dog daycare Café Wakefern, shared how her grant helped keep her business afloat in the midst of COVID-19 lockdowns.

			Cameron Kirkland, photographer and owner of Cam Kirk Studios in Atlanta, utilized his grant to reopen the studio, enabling local artists to have a space for their creative work.

			Jeanette Bolden-Pickens reopened her family-owned business, 27^thStreet Bakery in Los Angeles, and was able to replace a broken pie press with her grant.

•	In a time when many nonprofits are struggling to survive, we have distributed $5 million in grants to 20 leading nonprofit community partners across the U.S. that support and empower Black-owned businesses and help provide on-the-ground support.

•	To address the inequality in startup fundraising, we invested $63 million in nine early-stage Black and Latinx-led venture capital funds. We are also offering a three-month fellowship to a Black or Latinx graduate student each semester, through which the PayPal Ventures team will provide training and mentoring.

•	We contributed $50 million to the Local Initiatives Support Corporation for the Black Economic Development Fund, which will be distributed as capital for financial assistance for those recovering from the pandemic. PayPal’s investment was the largest single investment in the fund yet.

•	We deposited $50 million in Optus Bank, which has worked to dismantle structural racism by providing equal access to financial services and asset building.

•	As we work to deploy the remaining funds, we have moved $150 million to an underrepresented minority share class of Northern Trust Institutional Government Fund as an interim step.

•	We directed $15 million to strengthen Diversity, Inclusion, Equity and Belonging at PayPal through expanded Employee Resource Group programming; deeper talent partnerships to support recruiting, hiring and career advancement of underrepresented employees; and new research to inform public policy related to racial equity issues.

Looking Ahead

PayPal’s impact will continue to grow as we work to build an inclusive recovery – partnering across our ecosystem and with our regulators, and ensuring that all people and businesses can participate and thrive in the digital economy. Our purpose as a company will always be an important part of how we serve all of our stakeholders. By continuing to deliver both profit and purpose to meet the evolving needs of our customers, I am confident we will build long-term value for our stockholders.

We have never been more essential in the financial lives of our customers, and we have never had a greater opportunity to make a real difference. We live in a rapidly changing world and we cannot leave anyone behind. I hope you will join us in the effort to shape an inclusive and equitable economy.

Thank you.

Dan Schulman

President and CEO

PayPal Holdings, Inc.

Message from
Our Independent Board Chair

Dear PayPal Stockholders,

2020 was a historic year for PayPal in a variety of meaningful ways. Amidst the challenges presented by the COVID-19 pandemic, we continued to execute on our strategic initiatives, deliver long-term, sustainable value to our stockholders and support our employees, customers and communities. Our strong corporate governance framework continued to provide the foundation for our Board composition and diversity, expansion of our environmental and social impact programs and enhanced engagement with our stockholders.

Board Composition and Diversity. We are proud to have a dynamic, effective and diverse Board with the right mix of skills, experiences and backgrounds for PayPal. Forty-five percent of Board members standing for re-election are women or from a diverse ethnic group. In addition, we have a strong commitment to diversity and inclusion at every level of PayPal starting with our Board and extending to our executive leadership team, 50% of whom are women and/or from diverse ethnic groups.

Environmental, Social and Governance. We are committed to responsibly managing our key environmental, social and governance (“ESG”) opportunities and risks in a manner consistent with our mission and vision to democratize financial services. Our Board recognizes the importance of effective risk oversight and risk management, including with respect to cybersecurity, information security and privacy-related risks, as well as other ESG topics, and we devote significant time and attention to oversight of these risks.

Human Capital Management. We appreciate that PayPal is heavily dependent on our people and recognizes the fundamental importance of attracting, retaining and developing top global talent. Our Board is updated on a regular basis on the company’s initiatives, actions and accomplishments relating to its human capital management strategy. In light of the increased focus on this topic, the Compensation Committee clarified its oversight of human capital management in its committee charter.

Stockholder Engagement. Proactive engagement with our stockholders is an essential part of our Board’s commitment to robust governance. Our year-round stockholder engagement program and regular discussions with our stockholders on topics including operating performance, corporate governance and environmental and social issues provide valuable insights into emerging issues and feedback on our efforts. In 2020, we contacted investors representing approximately 63% of our common stock, and holders of approximately 31% of our common stock responded and engaged with us.

Please Join Us at Our 2021 Annual Meeting. I look forward to discussing these developments further with you at the 2021 Annual Meeting, which will again be held via live webcast at www.virtualshareholdermeeting.com/PYPL2021.

On behalf of the Board, thank you for your investment in PayPal.

Sincerely yours,

John J. Donahoe

Independent Board Chair

April 13, 2021

Table of Contents

Notice of 2021 Annual Meeting of Stockholders	01

Important Information About PayPal’s Virtual Annual Meeting	02

Proxy Statement Summary	03

Proposal 1: Election of Directors	10
Director Biographies	13

Corporate Governance	19
Board Leadership	19
Director Independence	19
Board Committees	20
Board Oversight	22
Board and Committee Evaluations	24
Board and Committee Meetings and Attendance	25
Stockholder Engagement	25
Related Person Transactions	27
Delinquent Section 16(a) Reports	28

Director Compensation	29

ESG Oversight and Highlights	32
ESG Governance Structure	32
ESG Strategy	32
Priority ESG Programs & Progress	34
Human Capital Management	35

Stock Ownership Information	37

Information About Our Executive Officers	38

Proposal 2: Advisory Vote to Approve Named Executive Officer Compensation	41

Compensation Discussion and Analysis	42
Named Executive Officers	42
Executive Summary	42
Executive Compensation Program Design	45
Alignment of Compensation with Performance Results	46
2020 Compensation Framework and Decisions	46
Our Structure for Setting Compensation	53
Other Compensation Elements	55
Other Compensation Practices and Policies	55

Compensation Tables	58

CEO Pay Ratio Disclosure	65

Equity Compensation Plan Information	66

Proposal 3: Ratification of the Appointment of PricewaterhouseCoopers LLP as Our Independent Auditor for 2021	67

Proposal 4: Stockholder Proposal – Stockholder Right to Act by Written Consent	70

Proposal 5: Stockholder Proposal – Assessing Inclusion in the Workplace	73

Frequently Asked Questions	76

Appendix A: Reconciliation of Non-GAAP Financial Measures	84

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Notice of 2021 Annual Meeting of Stockholders

Wednesday, May 26, 2021

8:00 a.m. Pacific Time

Online at: www.virtualshareholdermeeting.com/PYPL2021

There is no physical location for the 2021 Annual Meeting.

ITEMS OF BUSINESS

1.	Election of the 11 director nominees named in this proxy statement.
2.	Advisory vote to approve named executive officer compensation.
3.	Ratification of the appointment of PricewaterhouseCoopers LLP as our independent auditor for 2021.
4.	Consideration of two stockholder proposals, if properly presented at the Annual Meeting.
5.	Such other business as may properly come before the Annual Meeting.

RECORD DATE

Tuesday, March 30, 2021 (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.

PARTICIPATION IN VIRTUAL MEETING

We are pleased to invite you to participate in our Annual Meeting, which will be conducted exclusively online at www.virtualshareholdermeeting.com/PYPL2021. Please see “Important Information About PayPal’s Virtual Annual Meeting” on the following page for additional information.

The Annual Meeting will begin promptly at 8:00 a.m. Pacific Time. The virtual meeting room will open at 7:45 a.m. Pacific Time for registration.

VOTING

Your vote is very important to us. Please act as soon as possible to vote your shares, even if you plan to participate in the Annual Meeting. For specific instructions on how to vote your shares, please see “Frequently Asked Questions – Voting Information” beginning on page 78 of this proxy statement.

REVIEW YOUR PROXY STATEMENT AND VOTE IN ONE OF THREE WAYS:

INTERNET

Visit the website on your proxy card

BY TELEPHONE

Call the telephone number on your proxy card

BY MAIL

Sign, date and return your proxy card in the enclosed envelope

Please refer to the enclosed proxy materials or the information forwarded by your bank, broker or other holder of record to see which voting methods are available to you.

By Order of the Board of Directors

Brian Y. Yamasaki

Corporate Secretary

April 13, 2021

This notice of Annual Meeting and proxy statement and form of proxy are being distributed and made available on or about April 13, 2021.

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Stockholders to Be Held on May 26, 2021

This proxy statement and PayPal Holdings, Inc.’s 2020 Annual Report are available electronically at

https://investor.pypl.com/financials/annual-reports/default.aspx and (with your 16-digit control number) at www.proxyvote.com

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Important Information About PayPal’s Virtual Annual Meeting

PayPal’s 2021 Annual Meeting will be conducted online only, via live video webcast. Stockholders will be able to access the meeting live by visiting www.virtualshareholdermeeting.com/PYPL2021. We have adopted a virtual meeting format to broaden stockholder access and encourage participation and communication with our management.

We have conducted efficient and effective virtual meetings since PayPal became an independent company in 2015. We intend to continue to ensure that our stockholders are afforded the same rights and opportunities to participate virtually as they would at an in-person meeting. We believe the virtual format makes it easier for stockholders to attend, and participate fully and equally in, the Annual Meeting because they can join with any Internet-connected device from any location around the world at no cost. Our virtual meeting format helps us engage with all stockholders – regardless of size, resources or physical location, protects the health and safety of attendees, saves the Company’s and stockholders’ time and money and reduces our environmental impact.

Participating in the Virtual Annual Meeting

•	Instructions on how to attend the virtual Annual Meeting are posted at www.virtualshareholdermeeting.com/PYPL2021.
•	You may log in to the meeting platform beginning at 7:45 a.m. Pacific Time on May 26, 2021. The meeting will begin promptly at 8:00 a.m. Pacific Time.
•	You will need the 16-digit control number provided in your proxy materials to attend the virtual Annual Meeting and listen live at www.virtualshareholdermeeting.com/PYPL2021.
•	Stockholders of record and beneficial owners as of the March 30, 2021 Record Date may vote their shares electronically during the virtual Annual Meeting.
•	On the date of the Annual Meeting, if you have questions about how to attend and participate, or you encounter any difficulties accessing the virtual meeting during the check-in or meeting time, please call 1-844-986-0822 (US) or 1-303-562-9302 (International).

Additional Information About the Virtual Annual Meeting

•	Stockholders may submit questions in advance of the meeting at www.proxyvote.com before 8:59 p.m. Pacific Time on May 25, 2021 or during the live meeting at www.virtualshareholdermeeting.com/PYPL2021.
•	During the meeting’s live Q&A session, members of our senior management team and our Board Chair will answer questions (including those submitted in advance) as time permits.
•	Our rules of conduct and procedure for the meeting generally provide that:

	•	Management will answer stockholder questions after the formal meeting has concluded.
	•	We limit each stockholder to one question so we can answer questions from as many stockholders as possible. Questions should be succinct and cover only one topic per question. Questions from multiple stockholders on the same topic or that are otherwise related may be grouped, summarized and answered together. In addition, questions may be edited for brevity and grammatical corrections.
	•	We do not intend to address any questions that are, among other things: irrelevant to the business of the Company or to the business of the Annual Meeting; related to material non-public information of the Company; related to personal matters or grievances; derogatory or otherwise in bad taste; repetitious statements already made by another stockholder; in furtherance of the stockholder’s personal or business interests; or out of order or not otherwise suitable for the conduct of the Annual Meeting as determined by the Board Chair or Corporate Secretary in their reasonable discretion.

•	If there are matters of individual concern to a stockholder (rather than of general concern to all stockholders), or if we are not able to answer all the questions posed, stockholders may contact us separately after the meeting through our Investor Relations department by email at investorrelations@paypal.com.
•	We will post our Q&A on our Investor Relations website as soon as practicable after the Annual Meeting. In addition, a replay of the meeting will be publicly available on our Investor Relations website after the meeting concludes.

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Proxy Statement Summary

This summary highlights certain information contained elsewhere in this proxy statement for the 2021 Annual Meeting of Stockholders (the “Annual Meeting”). This summary does not contain all the information that you should consider, and you should read the entire proxy statement carefully before voting.

2021 Annual Meeting Information

TIME AND DATE

8:00 a.m. Pacific Time
on May 26, 2021

PLACE

Online at www.virtualshareholdermeeting.com/PYPL2021.

There is no physical location for the Annual Meeting.

RECORD DATE

March 30, 2021

Proposals to be Voted on and Board Voting Recommendations

Proposal		Recommendation of the Board	Page
1	Election of 11 director nominees named in this proxy statement	FOR each of the nominees	10
2	Advisory vote to approve named executive officer compensation	FOR	41
3	Ratification of the appointment of PricewaterhouseCoopers LLP as our independent auditor for 2021	FOR	67
4	Vote on Stockholder Proposal – Stockholder Right to Act by Written Consent	AGAINST	70
5	Vote on Stockholder Proposal – Assessing Inclusion in the Workplace	AGAINST	73

Our 2020 Key Highlights

2020 was a historic year for PayPal. The COVID-19 pandemic presented unprecedented global challenges and increased the urgency across our organization to serve our employees, customers and communities in new and innovative ways.

Actions We Took in Response to COVID-19

As a purpose-driven company, our beliefs are the foundation for how we conduct business – our values of collaboration, inclusion, innovation and wellness drive us each day. This was never more evident than in 2020, as we navigated the widespread impact of the COVID-19 pandemic. We focused on utilizing our platform, resources and leadership to support our employees, customers and communities through a dynamically changing and uncertain environment.

Throughout the pandemic, we have prioritized the safety, security and well-being of our workforce. We mobilized nearly 100% of our global workforce to remote work or flexible work arrangements, and strengthened programs focused on employee wellness, including our crisis leave program and employee assistance program.

We also worked actively to help our customers and communities to navigate the challenges. We offered flexibility to our small business merchants by allowing the deferral of payments on their business loans and waived chargeback and instant fund transfer fees, among other actions. We worked with the U.S. Small Business Administration (“SBA”) to provide small businesses with access to more than $2 billion in loans in 2020 through the Paycheck Protection Program (“PPP”), with an average loan size of $28,000. We supported U.S. Treasury with stimulus check distribution through direct deposit into PayPal and Venmo accounts. We also raised over $17 billion through the PayPal Giving Platform, PayPal’s COVID-19 fundraising campaign, employee giving campaigns and other initiatives.

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Our Commitment to Address Racial and Economic Inequality

PayPal has made a $535 million commitment to support Black and underserved businesses and communities in the U.S., especially those hit hardest by the pandemic, to help address economic inequality and to bolster our internal programs to further increase diversity, inclusion and equity. We earmarked $15 million to support internal employee programs and thought leadership, including dedicated resources for our eight employee resource groups and new partnerships to expand our talent pipeline. We also expanded our enterprise-wide focus on diversity and inclusion to more formally include equity and belonging (which we now refer to as diversity, inclusion, equity and belonging (“DIE&B”)).

A Record Year for Financial and Operational Performance

In 2020, we achieved record financial and operational performance across key performance metrics, including net new active accounts, total payment volume, revenue, non-GAAP Operating Margin and Free Cash Flow. Our revenue increased to over $21 billion. We added more than 72 million net new active accounts, ending the year with 377 million active consumer and merchant accounts. Our total payment volume increased to $936 billion and customer engagement grew to an average of 40.9 transactions per active account as we continued to scale our acceptance worldwide.

The strong secular trends of increasing e-commerce penetration and cash displacement accelerated, contributing to our record results. In addition, we innovated at scale, introducing more products and services in 2020 than we have in any year in our history. For example, we enabled U.S. customers to buy, hold and sell cryptocurrency directly from their PayPal accounts, launched short-term installment credit products and deployed QR code functionality in 28 markets globally to provide customers with a touch-free way to buy and sell in person, safely and securely.

Non-GAAP Operating Margin and Free Cash Flow are not financial measures prepared in accordance with generally accepted accounting principles (“GAAP”). For information on how we compute these non-GAAP financial measures and a reconciliation to the most directly comparable financial measures prepared in accordance with GAAP, please refer to “Appendix A – Reconciliation of Non-GAAP Financial Measures” in this proxy statement.

Free Cash Flow for 2018 reflects the impact of held for sale accounting treatment in connection with the sale of the Company’s U.S. consumer credit receivables portfolio, which increased Free Cash Flow for 2018 by approximately $1.4 billion. Normalizing for this impact, Free Cash Flow for 2018 would have been approximately $3.3 billion.

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Sustainable Stockholder Value Creation

The success of PayPal’s approach to stockholder value creation under Mr. Schulman’s leadership is evident in our delivery of long-term returns to our stockholders. Our three-year total stockholder return* was 218%, and our one-year total stockholder return** was 117%.

*	Measured from December 29, 2017 to December 31, 2020
**	Measured from December 31, 2019 to December 31, 2020

To learn more about how our 2020 performance relates to our executive compensation program, see the Compensation Discussion and Analysis beginning on page 42.

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2021 Director Nominees

We introduce our 2021 director nominees below. All the nominees are independent except Mr. Schulman, PayPal’s President and CEO.

					Director		Other Public Company	Committee Memberships
Directors		Occupation	Diversity	Age	Since	Independent	Boards	ARC	COMP	GOV
	Rodney C. Adkins	President, 3RAM Group LLC	D	62	2017		3
	Jonathan Christodoro	Partner, Patriot Global Management, L.P.		44	2015		3
	John J. Donahoe	President and CEO, Nike, Inc.		60	2015		1
	David W. Dorman	Non-Executive Board Chair of CVS Health Corporation		67	2015		2
	Belinda J. Johnson	Former Chief Operating Officer, Airbnb, Inc.	W	54	2017		1
	Gail J. McGovern	President and CEO, American Red Cross	W	69	2015		1
	Deborah M. Messemer	Former Major Market Managing Partner, KPMG (retired)	W	63	2019		1
	David M. Moffett	Former CEO, Federal Home Loan Mortgage Corp. (retired)		69	2015		2
	Ann M. Sarnoff	Board Chair and CEO, WarnerMedia Studios & Networks Group	W	59	2017		0
	Daniel H. Schulman	President and CEO, PayPal Holdings, Inc.		63	2015		1
	Frank D. Yeary	Managing Member, Darwin Capital Advisors, LLC		57	2015		1

Independent Board Chair Committee Chair

ARC = Audit, Risk and Compliance Committee

Comp = Compensation Committee

Gov = Corporate Governance and Nominating Committee

W = Woman

D = Diverse Ethnic Group

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The Board and the Corporate Governance and Nominating Committee are committed to ensuring that the Board of Directors is composed of individuals who have highly relevant skills, professional experience and backgrounds, bring diverse viewpoints and perspectives and effectively represent the long-term interests of stockholders. The following provides a snapshot of the diversity, skills and experience of our director nominees. For more information about our Board members, please see “Director Experience, Expertise and Attributes” beginning on page 11 of this proxy statement.

Corporate Governance Highlights

Corporate governance at PayPal is designed to promote the long-term interests of our stockholders, strengthen Board and management accountability, foster responsible decision-making, engender public trust and demonstrate PayPal’s commitment to transparency, accountability, independence and diversity.

• 10 of 11 director nominees are independent

• Independent Board Chair with robust responsibilities

• Majority vote standard for uncontested director elections

• Stockholder right to call a special meeting

• Simple majority vote standard for charter/bylaw amendments and mergers/business combinations

• Diverse board in which 5 of 11 director nominees are women or from a diverse ethnic group

• Director service on no more than four public company boards, including the PayPal Board

• Governance Guidelines revised to include sexual orientation, ethnicity, nationality and cultural background in the list of diverse characteristics considered in assessing Board composition

• Committed to actively seeking highly-qualified women and individuals from underrepresented communities to include in the initial pool from which Board nominees are chosen

• Regular review of Board and executive succession planning

• All directors stand for annual election

• Strong stockholder engagement practices

• Proxy access for qualifying stockholders

• Robust stock ownership requirements for our executive officers and directors

• Annual Global Impact Report disclosing our performance, progress and strategy on key ESG (environmental, social and governance) topics

• Annual performance self-evaluations by the full Board and each committee

To learn more about our corporate governance practices and policies, see page 19.

• 2021 Proxy Statement 7

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Executive Compensation Highlights

The Compensation Committee has designed our executive compensation program to support PayPal’s growth strategy. The Compensation Committee believes that long-term incentives in the form of equity awards should make up the majority of our named executive officers’ (“NEOs”) target total direct compensation opportunity because such awards align pay and performance and the interests of our executives with those of our stockholders.

The following charts show the 2020 Target Total Direct Compensation mix for our CEO, Mr. Schulman, and the average 2020 Target Total Direct Compensation mix for our other NEOs. To learn more about our executive compensation program, see the Compensation Discussion and Analysis beginning on page 42.

*	Target Total Direct Compensation is the sum of (i) 2020 base salary, (ii) target 2020 annual incentive award (based on the grant date fair value for the portion of the award delivered as PBRSUs), and (iii) target annual long-term incentive award (based on the grant date fair value).

• 2021 Proxy Statement 8

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ESG Highlights

PayPal recognizes the importance as a global citizen to operate in a responsible and sustainable manner aligned with our mission to build a more financially inclusive and interconnected global economy. The management of key non-financial risks and opportunities is essential to our strategy and long-term performance. To that end, our environmental, social and governance (“ESG”) strategy is centered on four primary focus areas.


SOCIAL INNOVATION, OR HOW WE PURSUE A MORE INCLUSIVE GLOBAL ECONOMY	EMPLOYEES AND CULTURE, OR HOW WE LIVE OUR CORE VALUES THROUGHOUT OUR WORKFORCE	ENVIRONMENTAL SUSTAINABILITY, OR HOW WE RESPONSIBLY ADVANCE SUSTAINABLE BUSINESS PRACTICES	RESPONSIBLE BUSINESS PRACTICES, OR HOW WE OPERATE OUR BUSINESS IN AN ETHICAL MANNER
This category includes our annual reporting on social impact metrics, product and service enhancements, research and thought leadership and partnerships to promote economic empowerment, improve financial health and power charitable giving.	This category includes designing and executing an effective human capital management strategy to support the recruitment, retention, development and wellness of our workforce, implementing measurable diversity and inclusion initiatives and metrics that demonstrate our commitment to equity and creating innovative employee experiences and opportunities to support our global communities.	This category includes addressing climate change, promoting renewable energy use, mobilizing on environmental action and driving environmental innovation across our products, services and value chain.	This category includes establishing policies and practices to safeguard trust, ensuring ethical and compliant business operations and securing and protecting customer information.

For more information on our ESG strategy and program, see “ESG Oversight and Highlights” beginning on page 32, and our most recent Global Impact Report, which is available on our website at https://investor.pypl.com/esg-strategy/default.aspx.

• 2021 Proxy Statement 9

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PROPOSAL 1:

Election of Directors

Based upon a review of their skills, qualifications, expertise and characteristics, our Board has nominated all of our current directors for election at the Annual Meeting, to serve until our 2022 Annual Meeting of Stockholders and until their successors are elected and qualified. Each director nominee is independent except Mr. Schulman, our President and CEO.

We expect that each director nominee will be able to serve if elected. If any director nominee is unable or unwilling to serve at the time of the Annual Meeting, the present Board may identify a substitute nominee to fill the vacancy, reduce the size of the Board, or leave a vacancy to fill at a later date.

Directors must be elected by a majority of the votes cast in uncontested elections. This means that the number of votes cast “FOR” a director nominee must exceed the number of votes cast “AGAINST” that nominee. (For more information, please see “Frequently Asked Questions – Voting Information” on page 78) Each director has submitted an advance, contingent, irrevocable resignation that the Board may accept if stockholders do not re-elect that director. After the certification of any such stockholder vote, the Corporate Governance and Nominating Committee (the “Governance Committee”) or a committee composed solely of independent directors that does not include the director who was not re-elected would determine whether to accept the director’s resignation. We will publicly disclose any such decision and the rationale behind it.

Director Nominees

The Governance Committee is responsible for recommending to the Board the qualifications for Board membership and for identifying, assessing and recommending qualified director candidates for the Board’s consideration. The Board’s membership qualifications and nomination procedures are set forth in our Corporate Governance Guidelines. Nominees may be suggested by directors, management, stockholders or by a third-party firm.

The Governance Committee and the Board have evaluated each of the director nominees and concluded that it is in the best interests of the Company and its stockholders for each of these individuals to continue to serve as a director. The Board believes that each director nominee has a strong track record of being a responsible steward of stockholders’ interests and brings extraordinarily valuable insight, perspective and expertise to the Board.

To ensure that the Board continues to evolve and be refreshed in a manner that serves the changing business and strategic needs of the Company, the Governance Committee annually reviews with the Board the applicable skills, qualifications, expertise and characteristics of Board nominees in the context of the current Board composition and Company circumstances. The Governance Committee evaluates whether each director demonstrates several key attributes and provides significant and meaningful contributions to the Board. These factors include:

•	Highly relevant professional experience in payments, financial services, financial technology (“FinTech”), technology, innovation, global business, business development, strategy, legal, regulatory, government, cybersecurity, information security, finance, accounting, consumer, sales, marketing, brand management and/or human capital management;
•	Relevant senior leadership/CEO experience;
•	Experience and expertise that complement the skill sets of the other director nominees;
•	High degree of character and integrity and ability to contribute to strong Board dynamics;
•	Highly engaged and able to commit the time and resources needed to provide active oversight of PayPal and its management;
•	Sound business judgment; and
•	Commitment to enhancing stockholder value.

In addition, the Governance Committee considers whether each director contributes to the Board’s diversity in terms of gender, sexual orientation, race, ethnicity, nationality, cultural background and age.

Focus on Board Refreshment and Diversity

The Governance Committee values diversity as a factor in selecting nominees. When searching for new directors, the Governance Committee actively seeks out highly-qualified women and individuals from underrepresented communities to include in the initial pool from which Board nominees are chosen. In keeping with this commitment to diversity and inclusion our eleven director nominees include four people who self-identify as women and one person who self-identifies as African American.

Our active Board refreshment process has resulted in a strong mix of diversity and independence, which contributes to effective oversight of management and the Company. Since 2016, we have added four diverse directors to the Board, with a strong mix of skills, qualifications, backgrounds and experience.

• 2021 Proxy Statement 10

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Director Experience, Expertise and Attributes

Our 2021 Board skills matrix shows that our Board reflects a balanced mix of the core skills, expertise and attributes that we consider most relevant in light of our current business strategy and structure. For more information on the qualifications that each director nominee brings to our Board, please see the nominee biographies beginning on page 13.

BOARD SKILLS MATRIX
Experience, Expertise and Attributes
Payments, Financial Services and FinTech This experience is critical to oversight of PayPal’s business and strategy in these complex and dynamic industries.
Technology and Innovation Because PayPal is a technology platform and digital payments company, we look for directors with a background in developing technology businesses, anticipating technological trends and driving innovation and product development.
Global Business An understanding of diverse business environments, economic conditions, cultures and regulatory frameworks is relevant to PayPal as a global business operating in over 200 markets around the world.
Senior Leadership Significant senior leadership and/or CEO experience, with a practical understanding of organizations, processes, strategic planning and risk management to assess, develop and implement our business strategy and operating plan.
Business Development and Strategy This experience is relevant in helping PayPal to grow its business, expand its value proposition and assess whether potential targets and partners are a good strategic and culture fit.
Legal / Regulatory / Governmental Knowledge and experience with legal and regulatory issues, compliance obligations and governmental policies is relevant because we operate globally in a rapidly evolving legal and regulatory environment.
Cybersecurity / Information Security This experience is vital to protecting PayPal’s technology infrastructure and payments platform, maintaining the trust of our customers and keeping customer information secure.
Finance / Accounting This experience is relevant to the oversight of PayPal’s capital structure, financing and investing activities, as well as our financial reporting and internal controls.
Consumer / Sales / Marketing / Brand Management Experience in developing strategies to grow sales and market share, build brand awareness and overall preference among customers and enhance PayPal’s reputation is relevant to the growth of our business.
Human Capital Management This experience is vital to ensuring that PayPal attracts, motivates, develops and retains qualified personnel, and fosters a corporate culture that encourages and promotes accountability, performance and diversity, inclusion, equity and belonging.
Other Public Company Board Service Service on a public company board provides insights about ensuring strong board and management accountability, protecting stockholder interests and observing appropriate governance practices.

• 2021 Proxy Statement 11

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Stockholder Recommendations and Nominations

Stockholders who would like the Governance Committee to consider their recommendations for director nominees should submit their recommendations in writing by mail to the Governance Committee in care of our Corporate Secretary at PayPal Holdings, Inc., 2211 North First Street, San Jose, California 95131, stating the candidate’s name and qualifications for Board membership. Any such recommendation by a stockholder will receive the same consideration by the Governance Committee as other suggested nominees.

In addition, our Restated Certificate of Incorporation and Bylaws provide proxy access rights that permit eligible stockholders to nominate candidates for election to the Board in the Company’s proxy statement. These proxy access rights permit a stockholder, or group of up to 20 stockholders, owning 3% or more of the Company’s outstanding common stock continuously for at least three years to nominate and include in the Company’s proxy materials director nominees constituting up to 20% of the Board, provided that the stockholder(s) and nominee(s) satisfy the requirements and procedures described in our Restated Certificate of Incorporation and Bylaws.

• 2021 Proxy Statement 12

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Director Biographies

Age 62

Director since:

September 2017

INDEPENDENT

Board Committees:

•

Audit, Risk and Compliance

•

Governance

Other Public Company

Boards:

•

Avnet, Inc. (Chair)

•

United Parcel Service, Inc.

•

W.W. Grainger, Inc.

Former Public

Company Boards:

•

PPL Corporation (August 2014 to May 2019)

RODNEY C. ADKINS

President of 3RAM Group LLC

Experience, Skills and Qualifications of Particular Relevance to PayPal:

•

Extensive experience in the technology industry, including emerging technologies, strategy, global business operations, innovation, product development and brand management

•

Significant experience in corporate finance, financial statements and accounting

•

In-depth expertise in corporate governance matters as a Board member of other public companies

•

Expertise in supply chain, procurement and global trade

Key Qualifications and Experience:

•

Technology and Innovation

•

Global Business

•

Senior Leadership

•

Business Development and Strategy

•

Regulatory and Governmental

•

Cybersecurity/Information Security

•

Finance

•

Consumer, Sales, Marketing and Brand Management

•

Human Capital Management

•

Other Public Company Board Service

Biography:

•

President of 3RAM Group LLC, a privately held company specializing in capital investments, business consulting services and property management, since January 2015.

•

Spent over 30 years at International Business Machines Corporation (IBM) in various development and management roles, including Senior Vice President of Corporate Strategy from April 2013 to April 2014, Senior Vice President of Systems and Technology Group from October 2009 to April 2013, Senior Vice President of Development & Manufacturing from May 2007 to October 2009, and Vice President of Development of IBM Systems and Technology Group from December 2003 to May 2007.

Age 44

Director since:

July 2015

INDEPENDENT

Board Committees:

•

Compensation

•

Governance

Other Public Company Boards:

•

Pioneer Merger Corp.

•

Sandridge Energy, Inc.

•

Xerox Corporation

Former Public Company Boards:

•

Enzon Pharmaceuticals, Inc. (October 2013 to August 2020)

•

Herbalife Ltd. (April 2013 to January 2021)

•

Lyft, Inc. (May 2015 to March 2019)

JONATHAN CHRISTODORO

Partner at Patriot Global Management, L.P.

Experience, Skills and Qualifications of Particular Relevance to PayPal:

•

Extensive financial, strategic planning and investment banking experience advising public companies, including at the board level

•

Significant experience in identifying and evaluating M&A and investment opportunities and portfolio companies across a range of industries, including technology

Key Qualifications and Experience:

•

Financial Services

•

Technology and Innovation

•

Global Business

•

Senior Leadership

•

Business Development and Strategy

•

Regulatory and Compliance

•

Finance

•

Other Public Company Board Service

Biography:

•

Partner at Patriot Global Management, L.P., an investment management firm, since March 2019.

•

Managing Director of Icahn Capital LP, the entity through which Carl C. Icahn manages investment funds, from July 2012 to February 2017.

•

Served in various investment and research roles from, March 2007 to July 2012.

•

Began his career as an investment banking analyst at Morgan Stanley, where he focused on merger and acquisition transactions across a variety of industries.

•

Served in the United States Marine Corps.

• 2021 Proxy Statement 13

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Age 60

Director since:

July 2015

INDEPENDENT

Board Chair

Board Committees:

•

None

Other Public Company Boards:

•

Nike, Inc.

Former Public Company Boards:

•

ServiceNow, Inc. (April 2017 to June 2020)

•

eBay Inc. (January 2008 to July 2015)

JOHN J. DONAHOE

President and Chief Executive Officer of Nike, Inc.

Experience, Skills and Qualifications of Particular Relevance to PayPal:

•

Extensive industry experience and deep knowledge of PayPal’s operations through his former role as director, President and Chief Executive Officer of eBay Inc.

•

Expertise in commerce, technology, global strategy, operations and executive leadership

•

Extensive track record of creating value, driving innovation and scaling large technology companies

Key Qualifications and Experience:

•

Payments and FinTech

•

Technology and Innovation

•

Global Business

•

CEO Experience

•

Business Development and Strategy

•

Cybersecurity/Information Security

•

Finance

•

Consumer, Sales, Marketing and Brand Management

•

Human Capital Management

•

Other Public Company Board Service

Biography:

•

President and Chief Executive Officer of Nike, Inc., since January 2020.

•

President and Chief Executive Officer of ServiceNow, Inc., a cloud computing company, from April 2017 to December 2019.

•

President and Chief Executive Officer of eBay Inc. from March 2008 to July 2015, and director of eBay Inc., from January 2008 to July 2015.

•

President, eBay Marketplaces, from March 2005 to January 2008.

•

Worldwide Managing Director of Bain & Company, from January 2000 to February 2005.

Age 67

Director since:

June 2015

INDEPENDENT

Board Committees:

•

Compensation (Chair)

•

Governance

Boards: Other Public Company

•

CVS Health Corporation

•

Dell Technologies, Inc.

Former Public

Company Boards:

•

Motorola Solutions, Inc. (May 2011 to May 2015)

DAVID W. DORMAN

Non-Executive Board Chair of CVS Health Corporation

Experience, Skills and Qualifications of Particular Relevance to PayPal:

•

Expertise in finance, M&A and investments, strategic planning, public company executive compensation matters and executive leadership

•

In-depth experience leading global companies in regulated industries

Key Qualifications and Experience:

•

Technology and Innovation

•

Global Business

•

CEO Experience

•

Business Development and Strategy

•

Regulatory and Compliance

•

Cybersecurity/Information Security

•

Finance and Accounting

•

Consumer, Sales, Marketing and Brand Management

•

Human Capital Management

•

Other Public Company Board Service

Biography:

•

Founding Partner of Centerview Capital Technology Fund, a private investment firm, since July 2013.

•

Board Chair of InfoWorks, a portfolio company of Centerview, since January 2019.

•

Lead Independent Director of the Board of Motorola Solutions, Inc. (formerly Motorola, Inc.), a leading provider of business and mission-critical communication products and services for enterprise and government customers, from May 2011 until his retirement from that board in May 2015.

•

Non-Executive Board Chair of Motorola, Inc., from May 2008 to January 2011.

•

Senior Advisor and Managing Director to Warburg Pincus LLC, a global private equity firm, from October 2006 to May 2008.

•

President and a director of AT&T Corporation, from November 2005 until January 2006.

•

Board Chair and Chief Executive Officer of AT&T Corporation, from November 2002 until November 2005.

•

President of AT&T Corporation from 2000 to 2002 and the Chief Executive Officer of Concert Communications Services, a former global venture created by AT&T Corporation and British Telecommunications plc, from 1999 to 2000.

•

Served as a Trustee for Georgia Tech Foundation, Inc.

• 2021 Proxy Statement 14

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Age 54

Director since:

January 2017

INDEPENDENT

Board Committees:

•

Audit, Risk and Compliance

Other Public Company

Boards:

•

Airbnb, Inc.

BELINDA J. JOHNSON

Former Chief Operating Officer of Airbnb, Inc.

Experience, Skills and Qualifications of Particular Relevance to PayPal:

•

Significant strategic and operational experience with a global, consumer-facing, technology company growing at scale

•

Extensive legal, regulatory and government relations expertise as a practicing lawyer and business affairs leader gained over two decades advising innovative and disruptive global technology companies

Key Qualifications and Experience:

•

Payments

•

Technology and Innovation

•

Global Business

•

Business Development and Strategy

•

Senior Leadership

•

Legal and Regulatory

•

Finance

•

Consumer, Sales, Marketing and Brand Management

•

Human Capital Management

•

Other Public Company Board Service

Biography:

•

Chief Operating Officer of Airbnb, Inc. from February 2018 to March 2020.

•

Chief Business Affairs and Legal Officer of Airbnb, Inc., from July 2015 to February 2018, having joined as General Counsel in December 2011.

•

Served in various positions at Yahoo! Inc. from August 1999 until her departure, in August 2011, as Senior Vice President and Deputy General Counsel.

•

General Counsel of Broadcast.com, Inc., an internet broadcasting company, from November 1996 to August 1999.

Age 69

Director since:

June 2015

INDEPENDENT

Board Committees:

•

Compensation

•

Governance (Chair)

Other Public Company Boards:

•

DTE Energy Company

GAIL J. MCGOVERN

President and Chief Executive Officer of the American Red Cross

Experience, Skills and Qualifications of Particular Relevance to PayPal:

•

Extensive executive experience in strategic planning, sales and marketing, customer relations and corporate finance

•

Strong expertise in regulatory matters and government relations garnered through leadership positions in regulated industries

•

Brings a strong perspective from the academic and nonprofit worlds aligned with PayPal’s mission and vision

Key Qualifications and Experience:

•

Technology and Innovation

•

Global Business

•

CEO Experience

•

Business Development and Strategy

•

Regulatory and Compliance

•

Finance

•

Consumer, Sales, Marketing and Brand Management

•

Human Capital Management

•

Other Public Company Board Service

Biography:

•

President and Chief Executive Officer of the American Red Cross, a humanitarian organization, since June 2008.

•

Faculty member at the Harvard Business School, from 2002 to 2008.

•

President of Fidelity Personal Investments, from 1998 to 2002.

•

Executive Vice President, Consumer Markets Division at AT&T Corporation, from 1997 to 1998.

•

Serves as a trustee of The Johns Hopkins University School of Medicine.

• 2021 Proxy Statement 15

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Age 63

Director since:

January 2019

INDEPENDENT

Board Committees:

•

Audit, Risk and Compliance (Audit Committee Financial Expert)

Other Public Company

Boards:

•

Allogene Therapeutics, Inc.

DEBORAH M. MESSEMER

Former Major Market Managing Partner at KPMG

Experience, Skills and Qualifications of Particular Relevance to PayPal:

•

More than 30 years of experience in finance, strategy, market development, regulation, governance and operations

•

Extensive expertise in financial reporting, due diligence, mergers and acquisitions, and internal controls over financial reporting as Audit Engagement Partner or Senior Relationship Partner for companies in a variety of industries, including financial services and technology

•

Strong leadership and people management experience as Managing Partner of KPMG’s Bay Area and Northwest region, leading a team of over 3,000 employees

Key Qualifications and Experience:

•

Financial Services

•

Technology and Innovation

•

Global Business

•

Senior Leadership

•

Business Development and Strategy

•

Regulatory and Compliance

•

Finance and Accounting

•

Consumer Sales, Marketing and Brand Management

•

Human Capital Management

•

Other Public Company Board Service

Biography:

•

Served for over 35 years at KPMG, one of the world’s leading professional services firms, first in the audit practice, then as Audit Engagement Partner or Global Senior Relationship Partner for clients in a variety of industries, including financial services and technology. She was Managing Partner of KPMG’s Bay Area and Northwest region, responsible for leading teams in 10 offices across all functions, from 2008 through her retirement in September 2018.

•

Serves on the Board of Directors of Carbon, Inc.

Age 69

Director since:

June 2015

INDEPENDENT

Board Committees:

•

Audit, Risk and Compliance (Chair) (Audit Committee Financial Expert)

Other Public Company

Boards:

•

CSX Corporation

•

Genworth Financial, Inc.

Former Public

Company Boards:

•

Freddie Mac (December 2008 to March 2009)

•

eBay Inc. (July 2007 to July 2015)

DAVID M. MOFFETT

Former Chief Executive Officer of Federal Home Loan Mortgage Corp.

Experience, Skills and Qualifications of Particular Relevance to PayPal:

•

More than 30 years of strategic finance, mergers and acquisitions, risk management and operational experience in banking and payment processing

•

Strong leadership experience and extensive global financial management and regulatory expertise as a former Chief Executive Officer and Chief Financial Officer of financial services companies

Key Qualifications and Experience:

•

Payments

•

Global Business

•

CEO Experience

•

Business Development and Strategy

•

Governmental, Regulatory and Compliance

•

Finance and Accounting

•

Human Capital Management

•

Other Public Company Board Service

Biography:

•

Lead Independent Director of PayPal, from July 2015 through December 2018.

•

Chief Executive Officer of Federal Home Loan Mortgage Corp. (“Freddie Mac”), from September 2008 until his retirement in March 2009, and director of Freddie Mac from December 2008 to March 2009.

•

Chief Financial Officer of Star Banc Corporation, a bank holding company, starting in 1993. During his tenure, played an integral role in the acquisition of Firstar Corporation in 1998 and later U.S. Bancorp in 2001. Mr. Moffett remained Chief Financial Officer of U.S. Bancorp until 2007.

•

Trustee for Columbia Atlantic Mutual Funds and University of Oklahoma Foundation; consultant to various financial services companies.

• 2021 Proxy Statement 16

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Age 59

Director since:

June 2017

INDEPENDENT

Board Committees:

•

Audit, Risk and Compliance

Other Public Company

Boards:

•

None

Former Public

Company Boards:

•

HSN, Inc. (December 2012 to December 2017)

ANN M. SARNOFF

Board Chair and Chief Executive Officer of WarnerMedia Studios & Networks Group

Experience, Skills and Qualifications of Particular Relevance to PayPal:

•

More than 30 years of diversified business and media experience from a variety of executive leadership roles

•

Expertise in driving consumer engagement with brands and developing innovative partnerships

•

Extensive technology experience across media and platforms

Key Qualifications and Experience:

•

Technology and Innovation

•

Global Business

•

CEO Experience

•

Business Development and Strategy

•

Regulatory

•

Finance

•

Consumer, Sales, Marketing and Brand Management

•

Human Capital Management

•

Other Public Company Board Service

Biography:

•

Board Chair and Chief Executive Officer of WarnerMedia Studios & Networks Group, a global leader in entertainment and consumer products, since August 2020.

•

Board Chair and Chief Executive Officer of Warner Bros. Entertainment, from August 2019 to August 2020.

•

President of BBC Studios Americas, from August 2015 to August 2019.

•

Chief Operating Officer of BBC Worldwide North America, from 2010 to July 2015.

•

Board Chair of BritBox, a joint venture subscription streaming service launched in partnership with ITV in March of 2017.

•

Member of the board of directors of Georgetown University and the vice chair of the McDonough School of Business at Georgetown.

Age 63

Director since:

July 2015

Board Committees:

•

None

Other Public Company Boards:

•

Verizon Communications Inc.

Former Public Company Boards:

•

Flex Ltd. (June 2009 to August 2018)

•

NortonLifeLock (formerly known as Symantec Corporation), Board Chair (January 2013 to December 2019)

DANIEL H. SCHULMAN

President and Chief Executive Officer of PayPal

Experience, Skills and Qualifications of Particular Relevance to PayPal:

•

Deep expertise in payments, financial services, mobile technology, innovation, regulatory and cybersecurity matters

•

Leadership experience and vision in growing large, complex businesses

•

Experience transforming financial services while driving cultural change and fostering a values-based environment that champions diversity, inclusion, equity and belonging

Key Qualifications and Experience:

•

Payments, Financial Services and FinTech

•

Technology and Innovation

•

Global Business

•

CEO Experience

•

Business Development and Strategy

•

Legal, Regulatory and Governmental

•

Cybersecurity/Information Security

•

Finance and Accounting

•

Consumer, Sales, Marketing and Brand Management

•

Human Capital Management

•

Other Public Company Board Service

Biography:

•

President and Chief Executive Officer of PayPal since July 2015; served as the President and CEO-Designee of PayPal from September 2014 until July 2015.

•

Group President, Enterprise Group of American Express Company, from August 2010 to August 2014.

•

President, Prepaid Group of Sprint Nextel Corporation, from November 2009 until August 2010, when Sprint Nextel acquired Virgin Mobile, USA.

• 2021 Proxy Statement 17

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Age 57

Director since:

July 2015

INDEPENDENT

Board Committees:

•

Audit, Risk and Compliance

Other Public Company Boards:

•

Intel Corporation

FRANK D. YEARY

Managing Member at Darwin Capital Advisors, LLC

Experience, Skills and Qualifications of Particular Relevance to PayPal:

•

Extensive career in investment banking and finance with financial strategy and global M&A expertise, including expertise in financial reporting and experience in assessing the efficacy of mergers and acquisitions with international companies on a global scale, and experience attracting and retaining strong senior leaders

•

Role as a Vice Chancellor and as Chief Administration Officer of a large public research university provides strategic and financial expertise

•

Extensive experience in corporate governance and stockholder engagement, including as a co-founder of CamberView Partners, a financial advisory firm providing independent, investor-led advice to public companies and their boards

Key Qualifications and Experience:

•

Financial Services

•

Global Business

•

Senior Leadership

•

Business Development and Strategy

•

Governmental, Regulatory and Compliance

•

Finance and Accounting

•

Human Capital Management

•

Other Public Company Board Service

Biography:

•

Managing Member at Darwin Capital Advisors, LLC, a private investment firm, since October 2018 and a Member since 2012.

•

Executive Chair of CamberView Partners, LLC, a corporate advisory firm, from 2012 until 2018.

•

Vice Chancellor of the University of California, Berkeley, a public university, from 2008 to 2012, where he led and implemented changes to the university’s financial and operating strategy.

•

Spent 25 years in the finance industry, most recently as Managing Director, Global Head of Mergers and Acquisitions and as a member of the Management Committee at Citigroup Investment Banking.

The Board and the Governance Committee believe that the combination of our nominees’ qualifications, skills and experience will contribute to an effective Board and that, individually and collectively, the director nominees have the necessary qualifications to provide effective oversight of the business and quality advice and counsel to management.

THE BOARD RECOMMENDS A VOTE FOR EACH OF THE DIRECTOR NOMINEES.

• 2021 Proxy Statement 18

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Corporate Governance

Corporate governance at PayPal is designed to promote the long-term interests of our stockholders, strengthen Board and management accountability, oversee risk assessment and management strategies, foster responsible decision-making and engender public trust. We believe that strong corporate governance practices that provide meaningful rights to our stockholders and ensure Board and management accountability are essential to our long-term success.

Board Leadership

Our Board elects our Board Chair and our CEO and has determined that these two roles should be held by separate individuals to enhance the Board’s oversight of management and to allow the CEO to focus primarily on management responsibilities. Our current Board leadership structure provides effective and independent oversight of management and the Company.

Independent Chair

JOHN J. DONAHOE

Mr. Donahoe has served as the Board Chair since PayPal became an independent public company in July 2015.

Since December 2018, the Board has concluded that Mr. Donahoe is an independent director under the listing standards of the Nasdaq Global Select Market (“Nasdaq”) and our Corporate Governance Guidelines.

Mr. Donahoe possesses extensive industry experience and deep knowledge of PayPal’s operations, serves as a trusted advisor to management and effectively leads a dynamic and collaborative Board.

Robust Independent Chair Responsibilities

	•	Calls meetings of the Board and independent directors
	•	Sets the agenda for Board meetings in consultation with other directors and the CEO
	•	Provides management with input as to the quality, quantity and timeliness of the flow of information that is necessary for the independent directors to effectively and responsibly perform their duties
	•	Chairs executive sessions of the independent directors
	•	Acts as a liaison between the independent directors and the CEO on sensitive issues
	•	Leads the Board in the annual CEO performance evaluation
	•	Leads the Board in its review of the results of the annual self-evaluation process, including acting on director feedback as needed

Director Independence

Under the Nasdaq listing standards and our Corporate Governance Guidelines, the Board must consist of a majority of independent directors. Annually, each director completes a questionnaire designed to assist the Board in determining whether the director is independent, and whether members of the Audit, Risk and Compliance (“ARC”) Committee and the Compensation Committee satisfy additional Securities and Exchange Commission (“SEC”) and Nasdaq independence requirements. The Board has adopted guidelines setting forth certain categories of transactions, relationships and arrangements that it has deemed immaterial for purposes of determining independence.

Based on its most recent review, the Board has determined that every director except Mr. Schulman, our CEO, is independent under the Nasdaq listing standards and our Corporate Governance Guidelines and has no relationship that would interfere with their individual exercise of independent judgment.

Our Corporate Governance Guidelines prohibit directors from serving on the board of directors or as an officer of another company that may cause a significant conflict of interest. Our Corporate Governance Guidelines also provide that any director who has previously been determined to be independent must inform the Board Chair and our Corporate Secretary of any significant change in personal circumstances that may cause their status as an independent director to change, including a change in principal occupation, change in professional roles and responsibilities, status as a member of the board of another public company or retirement. In such situations, the Governance Committee makes a recommendation to the Board on the continued appropriateness of such director’s Board or committee membership(s).

• 2021 Proxy Statement 19

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Board Committees

The Board has three principal standing committees: the ARC Committee, the Compensation Committee and the Governance Committee. Each committee has a written charter that addresses, among other matters, the committee’s purposes and policy, composition and organization, duties and responsibilities and meetings. The committee charters are available in the governance section of our Investor Relations website at https://investor.pypl.com/governance/governance-overview/default.aspx. Each charter permits the applicable committee, in its discretion, to delegate all or a portion of its duties and responsibilities to a subcommittee or any member of the committee. Subject to applicable law, listing standards and the terms of its charter, the Compensation Committee also may delegate duties and responsibilities to any officer(s) of the Company.

Below is a description of each principal committee of the Board.

ARC Committee

Other Members:

Rodney C. Adkins

Belinda J. Johnson

Deborah M. Messemer

Ann M. Sarnoff

Frank D. Yeary

Committee

Meetings in 2020: 9

CHAIR: DAVID M. MOFFETT

Primary Responsibilities

Provide assistance and guidance to the Board in fulfilling its oversight responsibilities with respect to:

•

PayPal’s corporate accounting and financial reporting practices and the audit of PayPal’s financial statements;

•

The independent auditors, including their qualifications and independence;

•

The performance of PayPal’s internal audit function and independent auditor;

•

The quality and integrity of PayPal’s financial statements and reports;

•

PayPal’s overall risk framework and risk appetite framework, including risks associated with cybersecurity, information security and privacy; and

•

PayPal’s compliance with legal and regulatory obligations.

The ARC Committee is also responsible for reviewing and approving all audit engagement fees and terms, as well as all non-audit engagements, with the independent auditor, and producing the Audit Committee Report for inclusion in our proxy statement.

Independence

The Board has determined that each member of the ARC Committee meets the independence requirements of Nasdaq and the SEC and otherwise satisfies the requirements for audit committee service imposed by the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

The Board has also determined that each member of the ARC Committee is financially literate, and that Mr. Moffett and Ms. Messemer both satisfy the requirements for an “audit committee financial expert” set forth in the SEC rules.

• 2021 Proxy Statement 20

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Compensation Committee

Other Members:

Jonathan Christodoro

Gail J. McGovern

Committee

Meetings in 2020: 5

CHAIR: DAVID W. DORMAN

Primary Responsibilities

•

Review and approve the overall strategy for employee compensation and all compensation programs applicable to non-employee directors and executive officers;

•

Annually review and approve corporate goals and objectives relevant to the compensation of the CEO and evaluate the CEO’s performance;

•

Review, determine and approve the compensation for the CEO and our other executive officers;

•

Review and discuss the Compensation Discussion and Analysis contained in our proxy statement and prepare the Compensation Committee Report for inclusion in our proxy statement and our Annual Report on Form 10-K;

•

Oversee and monitor the Company’s strategies and responsibilities related to human capital management, including diversity, inclusion, equity and belonging, pay equity efforts and corporate culture;

•

Review and consider the results of any advisory stockholder votes on named executive officer compensation; and

•

Oversee and monitor compliance with the Company’s stock ownership guidelines applicable to non-employee directors and executive officers.

Independence

The Board has determined that each member of the Compensation Committee meets the independence requirements of Nasdaq and the SEC. Additionally, the Compensation Committee assesses on an annual basis the independence of its compensation consultant and other compensation advisers. Additional disclosure regarding the role of the Compensation Committee in compensation matters, including the role of consultants, appears in the Compensation Discussion and Analysis section of this proxy statement.

Compensation Committee Interlocks and Insider Participation

None of the members of the Compensation Committee is or has been an employee of PayPal. None of our executive officers served on the board of directors or compensation committee of another entity that has an executive officer serving on the Board or the Compensation Committee.

Governance Committee

Other Members:

Rodney C. Adkins

Jonathan Christodoro

David W. Dorman

Committee Meetings in 2020: 4

CHAIR: GAIL J. MCGOVERN

Primary Responsibilities

•

Make recommendations to the Board as to the appropriate size of the Board or any Board committee;

•

Identify individuals believed to be qualified to become Board members;

•

Make recommendations to the Board on potential Board and Board committee members, whether as a result of any vacancy or as part of the annual election cycle, taking into consideration the criteria set forth in the “Board Member Criteria” section of the Corporate Governance Guidelines;

•

Review and, if necessary, update, our Corporate Governance Guidelines at least annually;

•

Establish procedures to exercise oversight of the evaluation of the Board and management;

•

Exercise general oversight of the Company’s management of topics related to ESG matters, including overall ESG strategy, stakeholder engagement and reporting and programs and initiatives in social innovation and environmental sustainability; and

•

Review and discuss with management, at least annually, PayPal’s overall approach to political contributions and expenditures and lobbying activities.

Independence

The Board has determined that each member of the Governance Committee meets the independence requirements of Nasdaq.

• 2021 Proxy Statement 21

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Board Oversight

The Board is responsible for providing advice and oversight of PayPal’s strategic and operational direction and overseeing its senior management to support the long-term interests of the Company and its stockholders.

Strategic Oversight

One of the Board’s primary responsibilities is overseeing management’s establishment and execution of the Company’s strategy. The Board works with management to respond to the dynamic, competitive environment in which PayPal operates. At least quarterly, the CEO and senior executives provide detailed business and strategy updates to the Board. At least annually, the Board conducts an in-depth review of the Company’s overall strategy. At these reviews, the Board engages with senior management and other business leaders regarding, among other topics:

	•	business objectives;
	•	the Company’s budget, capital allocation plan and financial and operating performance;
	•	the competitive landscape;
	•	product and technology updates; and
	•	potential acquisitions, investments and partnerships.

The Board looks to the expertise of its committees to inform strategic oversight in their areas of responsibility.

• 2021 Proxy Statement 22

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Risk Oversight

PayPal operates in over 200 markets globally in a rapidly evolving environment characterized by a heightened regulatory focus on all aspects of the payments industry. Accordingly, our business is subject to the risks inherent in the payments business and the industry generally. A sound risk management and oversight program is critical to the successful operation of our business and the protection of our Company, employees, customers and other stakeholders. Management is responsible for assessing and managing risk and views it as a top priority. The Board is responsible for overall risk assessment and management oversight. The Board executes its responsibility as a group and through its committees, which regularly report to the full Board.

In addition to their ongoing oversight responsibilities, throughout 2020, the Board and its committees regularly reviewed and discussed with management the impact of the COVID-19 pandemic on our employees, customers and communities. As part of these reviews, the Board considered management’s strategies and initiatives to respond to and mitigate the adverse impacts of the pandemic, including creating and expanding employee initiatives and other relief efforts.

ARC Committee

The ARC Committee is primarily responsible for the oversight of the Company’s risk framework and reports to the full Board on the following matters on a regular basis:

Financial and Audit Risk: Meets with the independent auditor, Chief Financial Officer, Chief Accounting Officer and other members of the management team quarterly and as needed, including in executive sessions, to review the following:

	•	quality and integrity of the Company’s financial statements and reports;
	•	accounting and financial reporting practices;
	•	audit of the Company’s financial statements;
	•	selection, qualifications, independence and performance of the independent auditors; and
	•	effect of regulatory and accounting initiatives and application of new accounting standards.

Enterprise-Wide Risk and Compliance: Periodically reviews and approves the framework for the ERCM Program and other key risk management policies and takes the following actions:

	•	oversees and assesses the Company’s overall risk framework and risk appetite framework, including risks associated with cybersecurity, information security and privacy;
	•	reviews policies and practices established by management to identify, assess, measure and manage key current and emerging risks facing the Company;
	•	meets with the management team quarterly and on an as-needed basis to discuss key areas of enterprise risk and execution of risk management; and
	•	reviews with the Company’s Chief Business Affairs and Legal Officer, Chief Risk Officer and Chief Compliance Officer, as applicable, significant legal, regulatory or compliance matters that could have a material impact on our financial statements, business or compliance policies.

Internal Audit: Meets with the Vice President, Risk and Internal Audit, quarterly and on an as-needed basis, including in executive sessions, to discuss the performance of the Company’s internal audit function and independent auditor.

Legal and Regulatory: Our Chief Business Affairs and Legal Officer, Chief Risk Officer and Chief Compliance Officer work with the ARC Committee to review significant legal, regulatory or compliance matters that could have a material impact on our financial statements, business or compliance policies.

Compensation Committee

The Compensation Committee is primarily responsible for the following areas and reports to the full Board on these matters on a regular basis:

	•	oversees and reviews the risks associated with our compensation policies, plans and programs;
	•	oversees regulatory compliance with respect to compensation matters;
	•	oversees and monitors the Company’s strategies related to human capital management, including the recruitment and retention of key talent, pay equity, corporate culture, diversity, inclusion, equity and belonging and other key human capital management programs and initiatives; and
	•	oversees succession planning.

• 2021 Proxy Statement 23

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Governance Committee

The Governance Committee is primarily responsible for the following areas and reports to the full Board on these matters on a regular basis:

	•	oversees and reviews the risks associated with our overall corporate governance framework, principles, policies and practices;
	•	oversees ESG matters generally, including overall ESG strategy and reporting, and programs and initiatives in social innovation and environmental sustainability; and
	•	oversees political contributions and expenditures and lobbying activity.

Management’s Risk and Compliance Framework

Management regularly reviews and discusses with the ARC Committee the overall effectiveness of, and ongoing enhancements to, the ERCM Program.


• Management’s risk and compliance framework is designed to enable the ARC Committee to effectively oversee the Company’s risk management practices and capabilities. • The Company’s risk management committees, including the Enterprise Risk Management Committee (“ERM Committee”), oversee the implementation and execution of the ERCM Program. • The ERM Committee is the highest-level risk management committee, is co-chaired by PayPal’s Chief Risk Officer and Chief Compliance Officer, and reviews periodic reports from management regarding assessment of the effectiveness of the ERCM Program. • The ERCM Program’s objective is to identify, measure, manage, monitor and report key risk factors facing our Company including: • Financial crime and regulatory compliance • Operational, credit and capital structure • Technology, cybersecurity and privacy • Strategic, reputational risk and business continuity • Key ESG considerations are integrated into our ERCM Program and emerging ESG trends are regularly reported to a subcommittee of the ERM Committee.	Effectively managing privacy and cybersecurity risks is paramount and an integral component of the ERCM Program • Our Global Privacy Program is based on eight data protection principles that serve as the basis for enterprise-wide standards:
	Management	Notice & Transparency	Choice & Consent	Security


	Data Lifecycle Management	Data Quality	Stewardship	Standardization


	• Our Global Privacy Team, as well as dedicated teams integrated throughout our business, foster a “Data Hygiene by Default” and “Privacy by Design” culture throughout the Company. • Our Information Security Program is designed to enable robust cybersecurity management across our global enterprise and support the Company in identifying, protecting, detecting, responding to and recovering from information security threats.

Board and Committee Evaluations

Board and committee evaluations play a critical role in ensuring the effectiveness of our Board. The Board and its principal committees perform an annual self-evaluation to assess their performance and effectiveness and to identify opportunities to improve. The Governance Committee annually reviews the self-evaluation process to ensure it is operating effectively.

• 2021 Proxy Statement 24

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Board and Committee Meetings and Attendance

Our Board typically holds at least four regularly scheduled meetings each year, in addition to special meetings scheduled as appropriate. At each regularly scheduled quarterly Board meeting, a member of each principal Board committee reports on any significant matters addressed by the committee since the last quarterly meeting, and the independent directors have the opportunity to meet in executive session without management or the other directors present. The Board expects that its members will rigorously prepare for, attend and participate in, all Board and applicable Board committee meetings.

Our Board met eight times during 2020. Each director nominee who served in 2020 attended at least 75% of all our Board meetings and meetings for the committees on which he or she served.

All directors are encouraged to attend the Annual Meeting. Last year, all directors serving at the time of our 2020 Annual Meeting of Stockholders attended that meeting.

Stockholder Engagement

63%

Reached out to of common stock

31%

Engaged with of common stock

We recognize the value of a robust stockholder outreach program. We engage in regular, constructive dialogue with our stockholders on matters relevant to our business, including corporate governance, ESG issues and executive compensation, so we can better understand their views and interests and share our perspectives on these important subjects.

In addition to the outreach conducted in the weeks leading up to our 2020 Annual Meeting, following our 2020 Annual Meeting, we again reached out to our investors to solicit feedback. In 2020, we contacted investors representing approximately 63% of our common stock, and holders of approximately 31% of our common stock responded and engaged with us.

The table below provides an overview of the key topics, areas of stockholder focus and management’s responses covered during our 2020 stockholder outreach meetings.

Key Topic

Area of Stockholder Focus

How We Responded

COVID-19 Pandemic

• PayPal’s COVID-19 response and relief efforts targeted at internal and external stakeholders

• PayPal’s involvement in the SBA PPP and the stimulus check distribution program

Management indicated that throughout the pandemic, PayPal has prioritized the safety, security and well-being of its workforce. The Company mobilized nearly 100% of its global workforce to work under flexible work arrangements, and strengthened programs focused on employee wellness, including its crisis leave program and employee assistance program. PayPal also worked actively to help its customers and communities to navigate the challenges brought by the pandemic.

PayPal has worked with the SBA to provide small businesses with access to more than $2 billion in loans through the PPP in 2020 with an average loan size of $28,000.

In addition, PayPal supported the U.S. Treasury with stimulus check distribution through direct deposit into PayPal and Venmo accounts.

Human Capital Management

• PayPal’s approach to human capital management and its engagement with its workforce

• Consider whether to include executive compensation metrics related to human capital management and/or diversity and inclusion

Management discussed PayPal’s human capital management, including oversight by the Compensation Committee and initiatives focused on employee recruitment, retention, engagement, employee financial wellness, pay equity and DIE&B.

Stockholder feedback informed the Compensation Committee’s decision to clarify its oversight of human capital management in its committee charter.

The Compensation Committee has committed to incorporating DIE&B considerations as part of the individual performance portion of our NEOs’ annual incentives under the Annual Incentive Plan (“AIP”) for 2021.

• 2021 Proxy Statement 25

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Key Topic	Area of Stockholder Focus	How We Responded
Board Composition	• Board diversity, skills and refreshment	Management discussed the board skills and expertise required to effectively oversee PayPal’s business, strategies and risks. Management reiterated the Company’s commitment to board diversity, as evidenced by directors added since becoming an independent public company and noted that the Governance Committee actively seeks out highly-qualified women and individuals from underrepresented communities to include in the director candidate pool. Management indicated that the Board continuously reviews the skills and experiences that it considers important for the Board to continue effectively overseeing the Company’s business, strategies and risks.
	• Service on other public company boards	In response to increased stockholder focus, our Corporate Governance Guidelines have been amended to limit the number of public company board seats for our directors to four, including the PayPal Board.
Board Oversight of Risk	• Board’s oversight of increased information security, cybersecurity, privacy and data protection risks	The ARC Committee evaluates risks associated with information security, cybersecurity, privacy and data protection throughout the year, working with management to ensure that appropriate protections and controls are in place. In addition, management and the ARC Committee each report to the full Board on risk matters on a regular basis.
ESG Matters	• Board oversight of ESG strategy; results of PayPal’s first materiality assessment; and relevant ESG disclosure frameworks and targets/goals	Management noted the significant increase in investor focus on ESG-related topics as compared to prior years. Management discussed ESG strategy, Global Impact Report highlights, ESG-focused governance perception study, ESG materiality and prioritization assessment, environmental sustainability and responsible business practices. In response to increased stockholder focus, the Governance Committee updated its charter to more clearly reflect its oversight of ESG matters. See “ESG Oversight and Highlights” on page 32 for more information.
Executive Compensation	• Consider adding return metrics or measuring performance on a GAAP basis.	The Compensation Committee evaluates the appropriateness of the Company’s incentive program metrics annually, taking into consideration the Company’s overall strategy and ongoing stockholder feedback. After thorough deliberation, the Compensation Committee determined that, in light of PayPal’s current growth strategy, the Company’s existing metrics remain appropriate and reflect the most efficient alignment of the strategic goals of encouraging profitable operations, efficient use of capital and overall growth.

Director Orientation and Continuing Education

Our director orientation program familiarizes new directors with the Company’s businesses, strategies and policies, and assists them in developing the skills and knowledge required for their service on the Board and assigned committees. All directors are invited to attend the orientation programs. From time to time, management provides, or invites outside experts to provide, educational briefings to the Board on business, corporate governance, regulatory and compliance matters and other topics to help enhance skills and knowledge relevant to their service as a PayPal director. In addition, Board members may attend accredited director education programs at the Company’s expense.

• 2021 Proxy Statement 26

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Succession Planning

The Board recognizes the importance of effective executive leadership to PayPal’s success and annually reviews executive succession planning. As part of this process, the Board reviews and discusses the capabilities of our senior management, as well as succession planning and potential successors for the CEO and our other executive officers. The process includes consideration of organizational and operational needs, competitive challenges, leadership/management potential and development and emergency situations.

Outside Advisors

The Board may retain outside legal, financial or other advisors as it deems necessary or appropriate at the Company’s expense and without obtaining management’s consent. Each principal committee of the Board may also retain outside legal, financial or other advisors as it deems necessary, at the Company’s expense and without obtaining the Board’s or management’s consent.

Corporate Governance Documents

Code of Business Conduct and Ethics

Our credibility and reputation depend upon the good judgment, ethical standards and personal integrity of each director, officer and employee. PayPal’s Code of Business Conduct and Ethics (“Code of Conduct”) requires that our directors, executive officers and all other employees disclose actual or potential conflicts of interest and recuse themselves from related decisions. Directors, executive officers and other employees are expected to avoid any activity that is or has the appearance of being a conflict of interest with the Company. This includes refraining from engaging in activities that compete with or are adverse to the Company, or that interfere with the proper performance of duties or responsibilities to the Company. In addition, our Code of Conduct restricts the use of confidential company information, company assets, or position at the Company for personal gain.

We regularly review the Code of Conduct and related policies to ensure that they provide clear guidance. Concerns about accounting or auditing matters or possible violations of our Code of Conduct should be reported under the procedures outlined in the Code of Conduct.

Governance Guidelines of the Board of Directors

The Board adopted Governance Guidelines to serve as a framework within which the Board conducts its business. The Governance Guidelines cover many of the policies and practices discussed in this proxy statement, including matters such as the composition and leadership of the Board, expectations for meeting attendance and the roles of the Board’s standing committees. The Governance Guidelines were amended in 2021 to include sexual orientation, ethnicity, nationality and cultural background in the list of diverse characteristics that should be considered in assessing the overall composition of the Board. In addition, the amended Governance Guidelines memorialize the Governance Committee’s commitment to actively seeking highly-qualified women and individuals from underrepresented communities to include in the initial pool from which director candidates are selected.

Where to Find Governance Documents

Our Governance Guidelines, charters of our principal Board committees, our Code of Conduct and other key corporate governance documents and materials are available in the governance section of our Investor Relations website at https://investor.pypl.com/governance/governance-overview/default.aspx.

Related Person Transactions

Our Board has adopted a written policy governing the review and approval of related person transactions. The policy, which is administered by the ARC Committee, applies to any transaction or series of transactions in which (1) the Company or its consolidated subsidiary is a participant, (2) the amount involved is or is reasonably expected to be more than $120,000, and (3) a related person under the policy has a direct or indirect material interest. The policy defines a “related person” to include directors, director nominees, executive officers, beneficial owners of more than 5% of PayPal’s outstanding common stock, or an immediate family member of any of these persons.

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Under the policy, transactions requiring review are referred to the ARC Committee for pre-approval, ratification, or other action. Management will provide the ARC Committee with a description of any related-person transaction proposed to be approved or ratified, including the terms of the transaction, the business purpose of the transaction and the benefits to PayPal and to the relevant related person. In determining whether to approve or ratify a related-person transaction, the ARC Committee will consider the following factors:

	•	whether the terms of the transaction are fair to the Company, and at least as favorable to the Company as they would be if the transaction did not involve a related person;
	•	whether there are demonstrable business reasons for the Company to enter into the transaction;
	•	whether the transaction would impair the independence of an outside director under the Company’s director independence standards; and
	•	whether the transaction would present an improper conflict of interest for any director or executive officer, taking into account the size of the transaction, the overall financial position of the related person, the direct or indirect nature of the related person’s interest in the transaction, the ongoing nature of any proposed relationship and any other factors the committee deems relevant.

The Company also has practices that address potential conflicts in circumstances where a non-employee director is a control person of an investment fund that desires to make an investment in or acquire a company that may compete with one of the Company’s businesses. Under those circumstances, the director is required to notify the Company’s CEO and Chief Business Affairs and Legal Officer of the proposed transaction, and the CEO and Chief Business Affairs and Legal Officer then assess the nature and degree to which the investee company is competitive with one of the Company’s businesses, as well as the potential overlaps between the Company and the investee company. If the CEO and Chief Business Affairs and Legal Officer determine that the competitive situation and potential overlaps between PayPal and the investee company are acceptable, the Company may approve the transaction, conditioned upon the director agreeing to certain limitations. Such limitations may include refraining from joining the board of directors of, serving as an advisor to, or being directly involved in the business of the investee company; not conveying any confidential or proprietary information regarding the investee company to the Company or regarding the Company’s line of business with which the investee competes to the investee company; abstaining from being the primary decision-maker for the investment fund with respect to the investee company; recusing themselves from portions of investee company meetings that cover confidential competitive information reasonably pertinent to the Company’s lines of business with which the investee company competes; and agreeing to any additional limitations the CEO or Chief Business Affairs and Legal Officer deem reasonably necessary or appropriate as circumstances change. All transactions by investment funds in which a non-employee director is a control person also remain subject in all respects to the Board’s written policy for the review of related person transactions, discussed above.

The charter of the ARC Committee requires it to review and approve all related person transactions that are required to be disclosed under Item 404(a) of Regulation S-K. There were no transactions required to be reported in this proxy statement since the beginning of fiscal 2020, where our written related-person transaction policy did not require review, approval, or ratification, or where this policy was not followed.

Delinquent Section 16(a) Reports

Section 16(a) of the Exchange Act requires our directors, executive officers and persons who own more than 10% of our common stock to file reports of ownership and changes in ownership of our common stock with the SEC. Based on the information available to us during the fiscal year ended December 31, 2020, we believe that all applicable Section 16(a) reports, except two, were timely filed. A Form 4 filed on behalf of Mark Britto to reflect vesting of restricted stock units and a Form 4 filed on behalf of Frank Yeary to reflect the grant of the 2020 annual retainer were filed late due to administrative errors.

• 2021 Proxy Statement 28

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Director Compensation

The Compensation Committee is responsible for reviewing and making recommendations to the Board regarding compensation paid to non-employee directors for their Board and Board committee service. On an annual basis, the Compensation Committee reviews the non-employee director compensation program, receiving input from the Compensation Committee’s independent compensation consultant regarding market practices and the competitiveness of the non-employee director compensation program in relation to the general market and the Company’s peer group.

2020 Director Compensation

For 2020, each non-employee director of the Company received the following annual retainers on the first trading day after January 1, 2020:

2020 Annual Retainers:
All Non-Employee Directors	$	80,000	/year
Non-Executive Board Chair	$	50,000	/year
Lead Independent Director	$	75,000	/year
ARC Committee Chair	$	40,000	/year
Compensation Committee Chair and Governance Committee Chair	$	20,000	/year
ARC Committee Member	$	20,000	/year
Compensation Committee Member	$	18,000	/year
Governance Committee Member	$	10,000	/year

SEC Form DEF 14A filed by PayPal Holdings, Inc.