Roblox Corp

On March 1, 2024, the LDCC approved (i) the cancellation of the Founder and CEO Long-Term Performance Award previously granted to David Baszucki, (ii) Mr. Baszucki’s 2024 compensation, which consists solely of an equity award that consists of 75% PSUs and 25% time-based RSUs, as described below and (iii) 2024 the compensation program for all other executive officers.

CEO Compensation

At the time of grant, the LDCC intended for the Founder and CEO Long-Term Performance Award to be the exclusive cash and equity compensation that Mr. Baszucki would receive through 2027, unless there were unexpected events or changes in our business or other unforeseen factors that the LDCC determined would merit reevaluating Mr. Baszucki’s compensation.

Commencing in August 2022, the LDCC began a long-term evaluation of Mr. Baszucki’s compensation and what, if any, compensation-related actions should be taken given uncertain market conditions and volatility. As part of this evaluation, the LDCC considered whether the Founder and CEO Long-Term Performance Award, as the sole compensation payable to Mr. Baszucki, continued to satisfy the LDCC’s intent in providing sufficient compensation and retention incentives for Mr. Baszucki.

During 2023 and up to February 2024, the LDCC met numerous times to consider Mr. Baszucki’s compensation, including the Founder and CEO Long-Term Performance Award. FW Cook advised the LDCC and provided information regarding compensation peer group and market practices relating to executive compensation. The LDCC discussed various alternatives for Mr. Baszucki’s compensation, including discussions regarding the cancellation of the Founder and CEO Long-Term Performance Award and the implementation of an annual equity compensation program for Mr. Baszucki similar to the equity compensation granted to our other executive officers. The LDCC considered that Mr. Baszucki did not earn any cash salary, cash bonus or equity compensation for the first three years of his service as a public company CEO of Roblox. Members of management were not present at the portions of the LDCC meetings in which the LDCC deliberated about Mr. Baszucki’s compensation.

On March 1, 2024, given the LDCC’s desire to transition Mr. Baszucki to an annual compensation program and the LDCC’s determination that the Founder and CEO Long-Term Performance Award was no longer satisfying the Company’s compensation objectives, the LDCC approved the cancellation of the Founder and CEO Long-Term Performance Award. None of the rigorous stock price goals associated with the Founder and CEO Long-Term Performance Award were achieved prior to its cancellation, and no shares subject to the award had vested.

On March 1, 2024, the LDCC approved Mr. Baszucki’s 2024 compensation structure (the “2024 CEO Compensation”). The 2024 CEO Compensation is market-based, solely in the form of equity, and aligns Mr. Baszucki’s interests with those of our stockholders by motivating and rewarding Mr. Baszucki to achieve long-term stockholder value creation while reflecting our pay-for-performance philosophy and enhancing retention. The 2024 CEO Compensation consists of an annual equity award with an intended target value of $25 million. Seventy-five percent of the target value is in the form of PSUs that will only vest if the Company achieves financial and operating performance goals that were determined by the LDCC, consisting of 446,534 PSUs (at target). The remaining 25% of the target grant value is in the form of time-based RSUs that will vest quarterly over three years upon continued service, consisting of 148,844 RSUs. Mr. Baszucki’s base salary will remain at $0 and the 2024 CEO Compensation does not provide for cash compensation or a cash bonus opportunity for his services to Roblox. Mr. Baszucki’s equity award was granted on March 1, 2024, consistent with the annual equity refresh grants for our other executive officers.

Mr. Baszucki participates in the same 2024 PSU program as our other executives, with PSUs earned for achievement of cumulative Bookings and adjusted EBITDA targets over a two-year performance period (ending December 31, 2025). Two-thirds of any earned PSUs vest upon certification of performance following the completion of the two-year performance period and the remaining 33% of any earned PSUs vest in equal quarterly installments over the next year. The payout of Mr. Baszucki’s PSUs is capped at 200% of target, consistent with the PSUs granted to our other executives.

In determining the performance goals applicable to the PSUs, the LDCC selected cumulative Bookings and adjusted EBITDA targets, which are key drivers of our long-term strategic plan to grow the scale of our business and create near term margin expansion and directly tied to value creation. The performance goals were designed to be challenging, but achievable.

Peer group data. In approving the 2024 CEO Compensation, the LDCC reviewed extensive compensation peer group data and benchmarking studies provided by FW Cook. The LDCC took into consideration the level of risk associated with the 2024 CEO Compensation given no cash salary or bonus will be paid and the emphasis on performance-based compensation rather than time-based equity awards. The LDCC also took into consideration Mr. Baszucki’s strong leadership and performance, and the desire to strengthen Mr. Baszucki’s commitment and focus on continued growth of the business. Following a holistic review of these factors, the LDCC approved a 2024 target award value of $25 million, which is sized as a competitive CEO annual grant, rather than the larger size and longer-term structure of the Founder and CEO Long-Term Performance Award.

Timing of compensation decisions. Determining Mr. Baszucki’s compensation on an annual basis gives the LDCC flexibility to react to changes in our business or market conditions. By setting goals and grant amounts annually, the LDCC can more closely align compensation with performance and align Mr. Baszucki’s incentives with our other senior executives.

In approving the 2024 CEO Compensation, the LDCC determined that the value of the 2024 CEO Compensation was appropriate and necessary to incentivize Mr. Baszucki to achieve objectives that were consistent with the generation of long-term stockholder value and to help ensure Mr. Baszucki’s continued service to Roblox.

Other NEO Compensation

Consistent with Mr. Baszucki’s 2024 equity compensation grant, on March 1, 2024, the LDCC also acted to approve the 2024 executive compensation program of our other continuing NEOs. No changes were made to the NEO’s base salary. The continuing NEOs each received an RSU grant and a PSU grant with the intended value as stated in the below table. Consistent with Mr. Baszucki’s grants, the time-based RSUs vest quarterly over three years subject to continued service and PSUs will be earned based on achievement of cumulative Bookings and adjusted EBITDA targets over a two-year performance period (ending December 31, 2025). Two-thirds of any earned PSUs vest upon certification of performance following the completion of the two-year performance period and the remaining 33% of any earned PSUs vest in equal quarterly installments over the next year. The payout of the PSUs is capped at 200% of target.