Bill.com (BILL) DEF 14ADefinitive proxy

Seventeen years ago, we founded BILL with the mission to make it simple for SMBs to connect and do business. We created a category as we set out to help businesses automate their financial back offices. Early on, we knew it was important to partner with SMBs' most trusted advisors to develop the market. That is why we built an ecosystem that strategically integrates with accounting firms and the top banks in the country. Today we serve nearly half a million SMBs, and we have ambitions to serve millions more.

Fiscal 2023 was a defining year for BILL. We delivered $1 billion dollars in revenue, achieving 65% year-over-year revenue growth, despite macroeconomic challenges and banking industry turmoil. We also achieved profitability on a non-GAAP basis and positive free cash flow for the first time in our history. Strong demand for our platform combined with our disciplined investment approach and rigorous execution led to Non-GAAP Net Income of $194 million.

We are most proud of the significant number of SMBs we empower each and every day. As of June 30, 2023, more than 460,000 businesses used BILL as their central hub of financial operations. We expanded our network to 5.8 million members. By making it easy for buyers and suppliers to connect and transact payments, we enabled $266 billion in total B2B payment volume across our platform, representing approximately 1% of U.S. GDP and a significant milestone.

As we turn to this year’s annual meeting, we ask for your voting support for our Board members, 2023 executive compensation program, and other items described in this proxy to enable us to continue to deliver strong financial results and to advance our mission to help SMBs thrive.

We encourage your participation in our annual meeting, invite your input throughout the year, and thank you for your trust and ongoing support of BILL.

We will also consider and act upon other business as may properly come before the 2023 Annual Meeting of Stockholders (the Annual Meeting) of BILL Holdings, Inc. (the Company or BILL) or any adjournment or postponement of the Annual Meeting.

This notice of the Annual Meeting, the Proxy Statement and the form of proxy are being distributed and made available on or about October 26, 2023.

This Proxy Statement includes information that we are required to provide to you pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the SEC), and is designed to assist you in voting your shares. In addition, our fiscal year ends on June 30. Unless otherwise noted, any reference to a year preceded by the word “fiscal” refers to the twelve months ended June 30 of that year. For example, references to “fiscal 2023” refer to the twelve months ended June 30, 2023. Any reference to a year not preceded by “fiscal year” refers to a calendar year.

Our Board of Directors (our Board) currently consists of 12 directors, all of whom, other than Mr. Lacerte, qualify as “independent” under the listing standards of The New York Stock Exchange (the NYSE Listing Standards). Our Board is divided into three classes with each class serving for three years and the terms of office of the respective classes expiring in successive years. Directors in Class I will stand for election at the Annual Meeting for a three-year term ending upon the 2026 Annual Meeting of Stockholders. The terms of office of directors in Class II and Class III will expire at the annual meetings of stockholders to be held in 2024 and 2025, respectively.

The charts below set forth, as of October 26, 2023, information relating to the gender, tenure, ethnicity and ages of our Board. While the Board does not have a formal policy on diversity, we are committed to comprising our Board of individuals with diverse skills, experience and backgrounds, including diversity with respect to age, gender, national origin and race, which we believe facilitates the optimal functioning of the Board.

Among the twelve members of our Board, five self-identify as women and two self-identify as individuals from an underrepresented community (meaning, an individual who self-identifies as Black, African American, Hispanic, Latino, Asian, Pacific Islander, Native American, Native Hawaiian, or Alaska Native, or who self-identifies as gay, lesbian, bisexual, or transgender).

Our Board brings broad and deep experience to Company matters, and each individual director contributes a range of complementary skills that enhance the Board’s ability to exercise its oversight responsibilities on behalf of our stockholders. To better understand our Board’s composition and strengths, the following table represents certain of the skills and areas of expertise that we believe are most critical to the strategy and future success of our Company, and assigns the “top three” such skills for each member of our Board:

The above table does not purport to include all of the skills, experiences or qualifications that each director offers, and the fact that a particular skill is not listed for a director does not mean that the director does not possess it. Additionally, all of our directors possess integrity, sound judgment and a track record of professional success.

The listing rules of the NYSE generally require that a majority of the members of a listed company’s board of directors be independent. In addition, the listing rules generally require that, subject to specified exceptions, each member of a listed company’s audit, compensation and nominating and corporate governance committees be independent.

In addition, audit committee members must also satisfy the independence criteria set forth in Rule 10A-3 under the Securities Exchange Act of 1934, as amended (the Exchange Act). To be considered independent for purposes of Rule 10A-3, a member of an audit committee of a listed company may not, other than in his or her capacity as a member of the audit committee, the board of directors or any other board committee: accept, directly or indirectly, any consulting, advisory or other compensatory fee from the listed company or any of its subsidiaries; or be an affiliated person of the listed company or any of its subsidiaries.

There are no family relationships between any of our directors or executive officers and any of our other directors or executive officers.

Candidates for nomination to our Board are selected by our Board based on the recommendation of the Nominating and Corporate Governance Committee in accordance with the committee’s charter, our amended and restated certificate of incorporation (our Charter) and second amended and restated bylaws (our Bylaws), our Corporate Governance Guidelines and the criteria approved by our Board regarding director candidate qualifications. In recommending candidates for nomination, the Nominating and Corporate Governance Committee considers candidates recommended by directors, officers, employees, stockholders and others, using the same criteria to evaluate all candidates. Evaluations of candidates generally involve a review of background materials, internal discussions and interviews with selected candidates as appropriate and, in addition, the committee may engage consultants or third-party search firms to assist in identifying and evaluating potential nominees.

Stockholders wishing to recommend candidates for consideration by our Nominating and Corporate Governance Committee should submit their recommendations to the attention of the Corporate Secretary at the address of our principal executive offices. Information regarding the process for submitting stockholder nominations for candidates for membership on our Board is set forth below under “Stockholder Proposals to Be Presented at the Next Annual Meeting.”

With the goal of cultivating a diverse, experienced and highly-qualified board of directors, the Nominating and Corporate Governance Committee is responsible for developing and recommending to our Board the desired qualifications, expertise and characteristics of members of our Board, including any specific minimum qualifications that the committee believes must be met by a committee-recommended nominee for membership on our Board and any specific qualities or skills that the committee believes are necessary for one or more of the members of our Board to possess.

Because the identification, evaluation and selection of qualified directors is a complex and nuanced process that requires consideration of many intangible factors, and will be significantly influenced by the particular needs of our Board from time to time, our Board has not adopted a specific set of minimum qualifications, qualities or skills that are necessary for a nominee to possess, other than those that are necessary to meet U.S. legal, regulatory and NYSE listing requirements and the provisions of our Charter, Bylaws, Corporate Governance Guidelines and charters of the committees of our Board. In addition, neither our Board nor our Nominating and Corporate Governance Committee has a formal policy with regard to the consideration of diversity in identifying nominees. When considering nominees, the Nominating and Corporate Governance Committee takes into consideration many factors including, among other things, a candidate’s independence, integrity, diversity, skills, financial, risk management and other expertise, breadth of experience, knowledge about our business or industry and ability to devote adequate time and effort to the responsibilities of our Board in the context of its existing composition. Through the nomination process, the Nominating and Corporate Governance Committee seeks to promote board membership that reflects a diversity of business experience, expertise, viewpoints, personal backgrounds and other characteristics that are expected to contribute to our Board’s overall effectiveness. The brief biographical description of each director set forth in “Our Board of Directors—Who We Are—Director Nominees and —Continuing Directors” above includes the primary individual experience, qualifications, attributes and skills of each of our directors that led to the conclusion that each director should serve as a member of our Board at this time.

Corporate governance at BILL is designed to promote the long-term interests of our stockholders, strengthen Board and management accountability, foster responsible decision-making and engender public trust.

We completed our initial public offering in December 2019, and our corporate governance profile, which contains certain protections against opportunistic acquirers, is generally consistent with that of many other newly-public technology companies. That said, we are mindful of stockholder perspectives on these issues.

In Fall 2021, Fall 2022, and Fall 2023, ahead of each of our annual meetings, members of our Board and management team undertook extensive outreach efforts to gather stockholder feedback, identify possible areas of focus and inform the Board’s future decisions (see “Compensation Discussion and Analysis—Executive Summary—Stockholder Engagement”). A consistent theme across this engagement has been that while many of our stockholders accept our current corporate governance profile and recognize that there are some circumstances in which certain governance features may be beneficial, they also expect our governance profile to evolve over time.

With that in mind, following the 2023 Annual Meeting, our Nominating and Corporate Governance Committee intends to conduct a comprehensive review of our governing documents and develop a long-term plan to evolve our governance structure. Consistent with stockholder feedback, we intend to sunset certain of our protective provisions and give stockholders greater ability to influence our governance directly. We expect to seek to phase in these changes over the coming years.

Our Board has adopted Corporate Governance Guidelines that set forth expectations for directors, director independence standards, Board committee structure and functions, and other policies for the governance of our Company. Our Nominating and Corporate Governance Committee periodically reviews the Corporate Governance Guidelines, and recommends changes to our Board as warranted. Our Corporate Governance Guidelines mandate, and our Nominating and Corporate Governance Committee annually conducts, a thorough Board and Board committee self-assessment process.

Our Corporate Governance Guidelines are available on the “Investor Relations” section of our website, which is located at investor.bill.com, by clicking “Governance Documents” in the “Governance” section of our website.

Our Corporate Governance Guidelines provide that our Board shall be free to choose its chairperson in any way that it considers in the best interests of our Company, and that the Nominating and Corporate Governance Committee periodically considers the leadership structure of our Board and makes such recommendations to our Board with respect thereto as appropriate. Our Corporate Governance Guidelines also provide that, when the positions of chairperson and chief executive officer are held by the same person, the independent directors may designate a “lead independent director.” In cases in which the chairperson and chief executive officer are the same person and a lead independent director has been designated, the chairperson schedules and sets the agenda for meetings of our Board in consultation with the lead independent director, and the chairperson, or if the chairperson is not present, the lead independent director, chairs such meetings. The responsibilities of the lead independent director include:

In accordance with our Corporate Governance Guidelines, we have a lead independent director of the Board separate from our chairperson. Mr. Lacerte is our Chairman and Chief Executive Officer and Mr. Kight is the lead independent director of the Board. The Board believes that this leadership structure reflects the role and responsibilities of the chief executive officer in our business and operations as well as the significant involvement and authority vested in a separate lead independent director of the Board. The Board retains the authority to modify this structure as it deems appropriate.

While the full Board has overall responsibility for risk oversight, the committees of our Board oversee and review specific risk areas. The risk oversight responsibility of our Board and its committees is supported by our management reporting processes, which are designed to provide visibility to our Board and to our personnel that are responsible for risk assessment and information about the identification, assessment and management of critical risks and management’s risk mitigation strategies. These areas of focus include competitive, economic, operational, financial (accounting, credit, investment, liquidity, interest rate, foreign exchange and tax), legal, regulatory, compensation, cybersecurity, privacy, payments, compliance and reputational risks. Our Board reviews strategic and operational risk in the context of discussions, question and answer sessions, and reports from the management team at each regular Board meeting, receives reports on all significant committee activities at each regular Board meeting, and evaluates the risks inherent in significant transactions.

In 2023, our Board undertook an internal review and determined to reorganize its allocation of risk management responsibilities, deciding to disband its incumbent Risk and Compliance Committee and to establish: (i) a new Board

Each committee of our Board meets with key management personnel and representatives of outside advisors, as appropriate, to oversee risks associated with their respective principal areas of focus. Our Audit Committee reviews our major financial and other risk exposures, our internal control over financial reporting, our disclosure controls and procedures, legal and regulatory compliance, and, among other things, discusses with management and our independent auditor guidelines and policies with respect to risk assessment and risk management. Our Compensation Committee evaluates our major compensation-related risk exposures and the steps management has taken to monitor or mitigate such exposures. Our Nominating and Corporate Governance Committee assesses risks relating to our corporate governance practices, the independence of our Board and reviews and discusses the narrative disclosure regarding our Board’s leadership structure and role in risk oversight. Our Cybersecurity Committee, with quarterly briefings from management, oversees cybersecurity and data protection activities to ensure that we are actively and appropriately protecting our data as well as that of our employees, customers and suppliers and that we are meeting data protection compliance requirements. Finally, our Compliance and Payments Operations Risk Subcommittee assists our Audit Committee and Board in its oversight and monitoring of the Company’s management of systems and operational risk related to customer payments and related money-movement business operations and regulatory compliance.

We believe this Board leadership structure and division of responsibilities enables us and our Board to effectively address the risks we face as our business continues to grow in scale and complexity.

Our Board has established an Audit Committee, a Compensation Committee, a Nominating and Corporate Governance Committee and a Cybersecurity Committee. The composition and responsibilities of each committee are described below. Each of these committees has a written charter approved by our Board. Copies of the charters for each Board-level committee are available on the “Investor Relations” section of our website, which is located at investor.bill.com, by clicking on “Governance Documents” in the “Governance” section of our website.

Our Audit Committee is composed of Mr. Cakebread, who is the chair of the committee, Ms. Kline, and Ms. Reich. Each member of our Audit Committee is independent under the current NYSE Listing Standards and SEC rules and regulations. Each member of our Audit Committee is financially literate as required by the current NYSE Listing Standards. In addition, our Board has determined that Mr. Cakebread is an “audit committee financial expert” as defined in SEC rules and regulations. This designation does not impose any duties, obligations or liabilities that are greater than those generally imposed on members of our Audit Committee and our Board. Our Audit Committee is responsible for, among other things:

Our Compensation Committee is composed of Mr. Wagner, who is the chair of the committee, Mr. Jacobs, Ms. Mnookin, and Ms. Wagonfeld. Each member of our Compensation Committee is independent under the current NYSE Listing Standards. Each member of this committee is a non-employee director, as defined in SEC rules and regulations. Our Compensation Committee is responsible for, among other things:

Our Nominating and Corporate Governance Committee is composed of Ms. Kline, who is the chair of the committee, Ms. Alvarez, Mr. Hornik, and Mr. Kight. Each member of our Nominating and Corporate Governance Committee is independent under the current NYSE Listing Standards. Our Nominating and Corporate Governance Committee is responsible for, among other things:

Our Cybersecurity Committee is composed of Mr. Fisher, who is the chair of the committee, Mr. Kight, and Ms. Reich, each of whom is an independent director under applicable rules. Our Cybersecurity Committee is responsible for, among other things:

The members of our Compensation Committee during fiscal 2023 were Mr. Wagner, Mr. Jacobs, Ms. Mnookin, and Ms. Wagonfeld. None of the members of our Compensation Committee in fiscal 2023 was at any time an officer or employee of ours or any of our subsidiaries, and none had or have any relationships with us that are required to be disclosed under Item 404 of Regulation S-K. During fiscal 2023, none of our executive officers served as a member of the board of directors, or as a member of the compensation or similar committee, of any entity that has one or more executive officers who served on our Board or Compensation Committee.

Our Board and its committees meet regularly throughout the year, and also hold special meetings and act by written consent from time to time. During fiscal 2023, our Board met six times and also acted by unanimous written consent. During fiscal 2023, each member of our Board attended at least 75% of the aggregate of all meetings of our Board and of all meetings of committees of our Board on which such member served that were held during the period in which such director served. The non-employee directors meet in regularly scheduled executive sessions without management to promote open and honest discussion. During fiscal 2023, our Audit Committee met eight times, our Compensation Committee met seven times, our Nominating and Corporate Governance Committee met four times, and our Cybersecurity Committee met one time. In addition, prior to our reorganization of Board committees, our incumbent Risk and Compliance Committee met three times. Finally, our policy is to invite and encourage each member of our Board to be present at our annual meetings of stockholders. All but three members of our Board attended our 2022 annual meeting of stockholders in their capacity as directors of our Company.

We have adopted a Code of Business Conduct and Ethics that applies to all the members of our Board, officers and employees. Our Code of Business Conduct and Ethics is posted on the “Investor Relations” section of our website, which is located at investor.bill.com under “Governance Documents” in the “Governance” section of our website. We intend to satisfy the disclosure requirement under applicable SEC and NYSE disclosure requirements regarding amendments to, or waivers of, a provision of our Code of Business Conduct and Ethics by posting such information on our website at the address and location specified above.

We believe that effective corporate governance includes year-round engagement with our stockholders and other stakeholders. We meet regularly with our stockholders to discuss business strategy, performance, compensation philosophy, corporate governance, and environmental and social topics. We engage with many of our large stockholders multiple times a year, both on an ad hoc basis and regularly in conjunction with our quarterly earnings announcements. Our Investor Relations team also has hundreds of touchpoints with smaller stockholders each year. We find it beneficial to have ongoing dialogue with our stockholders throughout the year on a full range of topics (instead of engaging with stockholders only prior to our annual meeting on issues to be voted on in the proxy statement).

Our Board has created a number of other ways for stockholders and other stakeholders to provide input including:

All communications are reviewed by the Corporate Secretary and provided to the Board or any individual director or committee of the Board, as appropriate.

Annually, the Compensation Committee evaluates the Company’s non-employee director compensation design, competitiveness, and effectiveness, to help ensure the program continues to facilitate the attraction and retention of highly qualified Board members. During fiscal 2023, the Compensation Committee engaged Compensia, Inc. (Compensia) as our independent compensation consultant to review the competitiveness of our non-employee director compensation program relative to industry peers and other comparably-sized companies and provide recommendations as deemed appropriate. The industry peer groups used in these periodic market studies are the same ones used to assess pay competitiveness for our named executive officers. For fiscal 2023, based on this analysis of our program as compared to our industry peers, Compensia did not recommend any changes to our existing non-employee director compensation program, but did recommend the compensation for our new Compliance and Payment Operations Risks Subcommittee and our new Cybersecurity Committee. Taking Compensia’s analysis into consideration, our Compensation Committee and Board reviewed our non-employee director compensation policy in February 2023 and determined to make no changes for fiscal 2023; however, the Compensation Committee recommended, and the Board approved, the compensation for our new Compliance and Payment Operations Risks Subcommittee and our new Cybersecurity Committee described below.

The following table provides information regarding all fiscal 2023 compensation awarded to, earned by or paid to each person who served as a director for some portion or all of fiscal 2023, other than Mr. Lacerte, our Chief Executive Officer. Mr. Lacerte is not included in the table below, as he is also our employee and receives no additional compensation for his service as a director. The compensation received by Mr. Lacerte as an employee is shown in “Executive Compensation—Fiscal 2023 Summary Compensation Table” below.

Under our current compensation practices, our non-employee directors receive equity compensation for their service as directors, which we believe reinforces alignment with our stockholders and is consistent with our overall compensation philosophy. Each non-employee director is entitled to receive RSUs under our 2019 Equity Incentive Plan (the 2019 Plan), as described below. The policy and amounts described below are those that were in effect during fiscal year 2023.

Each new non-employee director appointed to the Board will be granted RSUs covering shares with a value equal to approximately $400,000 (the Initial Award), which will be granted on the date of the non-employee director’s appointment to the Board (the Initial Award Grant Date). The Initial Award will vest in three equal annual installments on the anniversary of the Initial Award Grant Date, subject to continued service on each applicable vesting date.

On the date of each annual meeting of our stockholders, each continuing non-employee director will be granted RSUs covering shares with a value equal to approximately $200,000 (the Annual Award), prorated for non-employee directors who join between annual meetings of the Company’s stockholders. The Annual Award will vest on the earlier of (a) the date of the next annual meeting of the Company’s stockholders and (b) the date that is one year following the grant date of such Annual Award, subject to continued service on each applicable vesting date.

In fiscal 2020, and prior to the consummation of our initial public offering and adoption by the Board of our non-employee director equity compensation policy, we granted to each of Mr. Cakebread, Mr. Kight, and Ms. Mnookin nonstatutory stock options to purchase 100,000 shares of our common stock, that vested at a rate of one-third annually on the first three anniversaries of their 2019 vesting start dates. Each of these options is fully vested.

Each non-employee director receives annual cash compensation of $32,500 for service on the Board, and additional cash compensation for the chairperson and committee members as set forth below. All cash payments are made quarterly in arrears and are pro-rated for any partial quarters of service.

Non-employee directors receive no other form of remuneration, perquisites or benefits for their service as members of our Board, but they are reimbursed for their reasonable travel expenses incurred in attending Board and committee meetings, certain Company events and approved continuing education programs. In fiscal 2023, we paid approximately $7,000 for Ms. Reich to attend a cybersecurity education program.

In October 2021, in response to stockholder feedback and evolving best practices, we adopted a stock ownership policy for our non-employee directors. Our stock ownership policy requires our non-employee directors to acquire and hold a number of shares of our Company’s common stock equal in value to five times the director’s annual cash retainer for regular service on the Board until such director’s service on the Board ceases. We only count directly and beneficially owned shares, including shares underlying vested RSUs that are held or deferred and shares received on exercise of stock options and shares held in trust. Each non-employee director has until the last day of our fiscal year that includes the fifth anniversary of the later of his or her initial appointment to the Board or from the effective date of the policy to attain the required ownership level. The Compensation Committee may make exceptions in situations where the stock ownership policy would cause a severe hardship. As of June 30, 2023, all of our incumbent non-employee directors have either achieved the recommended ownership level or are expected to achieve the recommended ownership level within five years of their initial election or appointment to our Board.

In May 2022, we adopted an equity vesting policy for executive death, disability, and retirement for senior-level employees. This policy provides for the acceleration of outstanding equity awards for long-tenured employees in connection with such a person's death or disability while employed by us, as well as, under certain circumstances, continued vesting of outstanding equity awards in connection with a qualifying employee’s retirement and provision of continued advisory services to us.

We are a leader in financial automation software for small and midsize businesses (SMBs). As a champion of SMBs, we are automating the future of finance so businesses can thrive. Nearly half a million businesses rely on BILL to more efficiently control their payables, receivables, and spend and expense management. Our network connects millions of members so they can pay or get paid faster. Headquartered in San Jose, California, we are a trusted partner of leading U.S. financial institutions, accounting firms, and accounting software providers.

BILL's purpose-built, artificial intelligence-enabled financial software platform creates seamless connections between our customers, their suppliers, and their clients. Businesses use our platform to generate and process invoices, streamline approvals, make and receive payments, manage employee expenses, sync with their accounting systems, foster collaboration, and manage their cash. We have built sophisticated integrations with popular accounting software solutions, banks, card issuers, and payment processors, enabling our customers to access these mission-critical services quickly and easily. Our BILL Spend and Expense solution enables businesses to offer smart corporate cards (our BILL Divvy Corporate Cards), build budgets, manage payments, and eliminate the need for manual expense reports.

We are a team of over 2,500 employees in the U.S. and abroad, with diverse skill sets and backgrounds and a shared passion for delivering the tools, user experience and infrastructure necessary to enable SMBs to simplify financial operations and thrive.

Our executive officers are chosen by and serve at the discretion of our Board. As of September 30, 2023, our executive officers were René Lacerte, John Rettig, Loren Padelford, and Raj Aji. For information regarding Mr. Lacerte, our Chief Executive Officer and Co-Founder, refer to “Who We Are—Director Nominees” above. Information regarding our other executive officers is included below:

Fiscal 2023 was a defining year for us, as we exceeded $1 billion in annual revenue and achieved non-GAAP profitability for the first time. Strong strategic sales and partner growth and consistent financial discipline allowed us to deliver revenue growth of 65% year-over-year and transact total payment volume that represented approximately 1% of U.S. gross domestic product.

Sustainability is embedded in our business strategy. Using our platform enables businesses to eliminate manual, paper-based processes. Our solutions drive adoption of e-payments, virtual collaboration and digital documents to reduce consumption of paper, traditional mail, and travel. We processed over 85 million transactions in fiscal 2023, replacing many paper-based processes with electronic ones and thereby reducing paper waste and emissions from physical delivery. Moreover, by providing SMBs with powerful electronic payment tools, including international payments, invoice financing and instant transfer, we believe we are positively impacting the thousands of communities in which businesses using our solutions live and operate - all in a sustainable way.

We are beginning to formalize our ESG and sustainability initiatives, and we have made substantial progress over the last two years, including:

We are committed to helping build a more sustainable future for businesses using our solutions, as well as for their communities, and stakeholders. We take this commitment seriously and will continue to provide transparent disclosures on the progress of this work through both our internal and external communications. Our executive leadership team sponsors and funds our ESG programs, with our Board exercising ultimate oversight. Guided by best practices, feedback we receive from our stockholders, and third-party frameworks such as the Sustainability Accounting Standards Board Software & IT Services standards, we are focused on the initiatives described below.

Our culture enables us to attract and retain exceptional talent. We center our culture around five values which are core to who we are, guide how we operate, define how we treat each other, and help make our teams strong, cohesive units:

We know our success is tied to recruiting, developing, and retaining our employees. Our Chief People Officer is responsible for creating and implementing our initiatives around our employees and our Board has ultimate oversight and receives updates on these initiatives periodically.

We leverage data and analytics to align the recruiting function to business growth and revenue drivers. We are committed to providing a fair and equitable compensation and benefits program that supports our diverse workforce. BILL offers market-competitive base salaries, semi-annual bonuses, and sales incentives. The majority of our employees are awarded equity at the time of hire and through annual equity refresh grants. We also offer an employee stock purchase plan to foster a strong sense of ownership and engage our employees in our long-term success. Our full-time employees are eligible to receive, subject to the satisfaction of certain eligibility requirements, our comprehensive benefits package, including medical, dental, and vision insurance, family planning support and fertility treatments, and life and income protection plans. In addition, we provide generous paid time-off policies, access to free mental health services, and offer a tax-qualified 401(k) retirement plan. Through the self-directed brokerage features of the plan, participants in the 401(k) plan can choose to invest their contributions in funds tailored to their particular goals and preferences, including ESG-focused funds.

We develop our leaders and high-potential employees through intensive, cohort-based, key talent programs. We offer training for new people managers. To facilitate ongoing learning and development, we provide employees with an online curriculum of study, linked to business needs, leveraging a third-party platform. The curriculum includes coursework in inclusion, change management, and decision-making. All employees are eligible and participate in developmental reviews with their managers. We conduct performance review cycles twice a year.

To keep a pulse on engagement, we survey our employees semi-annually. Employees respond anonymously, and we take action on the areas flagged for improvement, reporting back to the employee base on progress against stated improvement goals. We closely monitor employee turnover, conducting exit interviews and surveys to alert us to any issues, as well as to make improvements to the employee experience.

Through an equitable approach to hiring, compensation, and career growth, we have built a company that fosters inclusivity, authenticity, and action. We seek to embed a sense of inclusion and social responsibility into our culture and how we serve the businesses using our solutions. Our Vice President of DEI is building a strategy that helps us accelerate our progress across four key pillars:

One of the ways we strengthen our workplace culture of DEI is by supporting employee resource groups (ERGs). ERGs are self-organized communities that bring employees together to raise awareness and belonging for under-represented groups. Through a grassroots effort, BILL employees have established seven ERGs focused upon the following dimensions of identity: women, Latinx, Black, LGBTQIA+, disabilities and mental health, veterans, and Pan Asian and Pacific Islanders. These ERGs, which are open to all employees, have established strong employee mentorship programs to support the career development of their members.

We also offer employees learning opportunities to increase awareness of DEI issues. Unconscious bias training is available through our e-learning platform, we regularly host speakers from diverse backgrounds to share their lived experiences, and our ERGs host safe-space discussions on issues important to their members. We also lead by example, with a diverse leadership team, including three women and one officer from an underrepresented community (44% of our leadership team).

We partner with organizations like Codepath.org and ColorStack to support Black, Latinx, and Indigenous students interested in technical careers. Through Codepath’s Internship Connection Program, we have placed underrepresented students majoring in computer science into technical internships at BILL. Last year, we also

As part of our focus on community outreach, one of our BILL ERGs built a new program to reach underprivileged, low-income students in the Bay Area. Recruiting middle-school and high-school students locally, the program’s goal is to prepare these young students for academic success, college acceptance, and early career growth by providing internships, mentorships, and coding camps. Along with the African Diaspora Network, BILL founded the African Diaspora Network's Accelerating Black Leadership and Entrepreneurship (ABLE) program, an enterprise accelerator program. The program is designed to strengthen, energize, and support startups and small businesses led by Black entrepreneurs in the U.S. In the last two years, 28 entrepreneurs with impact-oriented solutions at the local and national level across multiple sectors graduated from ABLE.

Trust is critical for our relationship with customers and partners, and we take significant measures to protect their privacy and data. Keeping our customers’ data safe and secure is a high priority. Our approach to security includes data governance as well as ongoing testing for potential security issues.

We have robust access controls in our production environment with access to data strictly assigned, monitored, and audited. To ensure our controls remain up-to-date, we undergo continuous external testing for vulnerabilities within our software architecture. These efforts have enabled us to certify our platform to SOC1 Type II, SOC2 Type II, and SOC3 standards. Our security program is aligned to the NIST-800-53 standards and is regularly audited and assessed by third parties as well as our partners.

The focus of our program is working to prevent unauthorized access to the data of our customers and network members. To this end, our team of security practitioners work to identify and mitigate risks, implement best practices, and continue to evaluate ways to improve.

These steps include regularly examining network security, classifying and inventorying data, limiting and authorizing access controls, and implementing multifactor authentication for access to systems. We also employ regular eight system monitoring, logging, and alerting to retain and analyze the security state of our corporate and production infrastructures. Finally, we maintain a robust internal information security program, with required trainings for all new hires and periodic reminders and mandatory training updates.

We take steps to help ensure that our security measures are maintained by the third-party suppliers we use, including conducting annual security reviews and audits.

Our San Jose headquarters building is LEED Gold and Energy Star certified, our Houston building is LEED-certified GOLD, and our Sydney building features a green roof and an organic waste farm, and was awarded a ‘Green Star’ rating of six (the highest rating available). In San Jose, we also offer employees free electric vehicle charging stations. Further, we embrace a hybrid work model at each of our office locations, permitting employees to work remotely several days a week, in addition to having a significant number of fully-remote employees who collaborate via videoconference and periodic offsite retreats. This flexible model allows us to minimize employee commute times, thereby reducing congestion, the consumption of energy, and pollution.

Our leadership team oversees our compliance, business ethics and incident reporting programs, with our legal and compliance functions providing leadership for implementation and enforcement activities. The Board provides additional and regular oversight through its Audit Committee, Nominating and Corporate Governance Committee, and Compliance and Payments Operations Risk Subcommittee, alongside other committee oversight.

Our Code of Business Conduct and Ethics and our Anti-Bribery Policy, among other policies, have been issued to ensure we work and act according to our corporate values and establish a framework to consistently apply our high ethical standards to all global business relationships. Adherence to these documents is required of all employees (including executive officers), independent contractors, and the Board. Employees are required to complete compliance training within 30 days of hire and then annually thereafter.

We transfer large sums of customer funds daily and protecting our customers and network members from financial fraud is our highest priority. We have procured and maintain money transmitter licenses in 50 U.S. jurisdictions and Canada and have implemented robust monitoring and compliance programs designed to protect our customers and network members from fraud and to prevent our platform from being used for money-laundering activities.

The following table sets forth certain information with respect to the beneficial ownership of our common stock as of September 30, 2023, by:

We have determined beneficial ownership in accordance with the rules of the SEC, and the information is not necessarily indicative of beneficial ownership for any other purpose. Except as indicated by the footnotes below, we believe, based on information furnished to us, that the persons and entities named in the table below have sole voting and sole dispositive power with respect to all shares beneficially owned, subject to applicable community property laws.

Applicable percentage ownership is based on 107,115,231 shares of common stock outstanding as of September 30, 2023. Shares of our common stock subject to stock options that are exercisable as of and within 60 days of September 30, 2023 or RSUs that may vest and settle within 60 days of September 30, 2023 are deemed to be outstanding and to be beneficially owned by the person holding the stock options or RSUs for the purpose of computing the percentage ownership of that person but are not treated as outstanding for the purpose of computing the percentage ownership of any other person. Unless otherwise indicated, the address of each of the individuals and entities listed in the table below is c/o BILL Holdings, Inc., 6220 America Center Drive, Suite 100, San Jose, California 95002.

In addition to the executive officer and director compensation arrangements discussed under “Executive Compensation” and “Our Board of Directors—Who We Are—How We Are Paid” respectively, since July 1, 2022, the following are the only transactions or series of similar transactions to which we were or will be a party in which the amount involved exceeds $120,000 and in which any director, nominee for director, executive officer, beneficial holder of more than 5% of our capital stock or any member of their immediate family or any entity affiliated with any of the foregoing persons had or will have a direct or indirect material interest.

We have entered into indemnification agreements with each of our directors and executive officers. The indemnification agreements and our Bylaws require us to indemnify our directors to the fullest extent not prohibited by Delaware law. Subject to certain limitations, our Bylaws also require us to advance expenses incurred by our directors and officers. For more information regarding these agreements, see the section titled “Executive Compensation—Limitation on Liability and Indemnification Matters.”

Our related party transactions policy requires that any related party transaction that must be reported under applicable rules of the SEC must be reviewed and approved or ratified by our Audit Committee, unless the related party is, or is associated with, a member of that committee, in which event the transaction must be reviewed and approved by our Nominating and Corporate Governance Committee.

Our Audit Committee has reviewed and discussed with our management and Ernst & Young LLP, our former independent registered public accounting firm, our audited consolidated financial statements for the fiscal year ended June 30, 2023. Our Audit Committee has also discussed with Ernst & Young LLP the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (United States) and the U.S. Securities and Exchange Commission (SEC).

Our Audit Committee has received and reviewed the written disclosures and the letter from Ernst & Young LLP required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant’s communications with our Audit Committee concerning independence, and has discussed with Ernst & Young LLP its independence from us.

Based on the review and discussions referred to above, our Audit Committee recommended to our Board that the audited consolidated financial statements be included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2023 for filing with the SEC.

This Compensation Discussion and Analysis provides an overview of the material components of our executive compensation program during fiscal 2023, including our executive compensation policies and practices, how and why the Compensation Committee arrived at the compensation decisions for our fiscal 2023 named executive officers (Named Executive Officers), and the key factors the Compensation Committee considered in making those decisions.

Mr. Padelford joined us on September 12, 2022. Ms. Chung ceased to serve as our Chief Experience Officer on October 31, 2022, and continued to serve as a consultant through June 30, 2023.

We hold advisory votes on the compensation of our Named Executive Officers (a “Say on Pay” vote) at every annual meeting of stockholders. The Compensation Committee has historically taken into consideration the results of our Say on Pay vote when making decisions regarding the structure and implementation of our executive compensation program.

At our 2022 annual meeting of stockholders, approximately 36% of votes cast were voted in favor of our Say on Pay proposal (the 2022 Say on Pay Vote). This represented a significant decline from 2021, when the Say on Pay proposal received the support of approximately 93% of votes cast. As a result, we undertook robust stockholder engagement efforts to listen to stockholder perspectives and incorporate their feedback into the Compensation Committee’s deliberations.

In fall 2022, in response to investor questions and concerns about our fiscal 2022 executive compensation and adverse voting recommendations from third-party proxy advisory firms, we embarked on a sizable outreach effort. We reached out to 16 of our largest institutional stockholders representing approximately 54% of our outstanding shares (based on share ownership reports as of September 30, 2022) to gather their feedback. We engaged in discussions with 14 institutional stockholders then representing approximately 51% of our outstanding shares. Our Compensation Committee Chair, Scott Wagner, participated in one of these meetings. Other representatives from the Company included senior members of our investor relations and finance teams.

Although we were disappointed with the outcome of the 2022 Say on Pay vote, our outreach efforts provided us with valuable insight into the priorities of our investors and helped inform the Compensation Committee’s subsequent deliberations.

In early fall 2023, we reached out to 22 of our largest stockholders representing approximately 70% of our outstanding shares (based on share ownership reports as of June 30, 2023). 12 stockholders representing approximately 49% of our outstanding shares accepted our invitation and met with us to share their feedback. Two stockholders representing approximately 10% of our outstanding shares confirmed that a discussion was not needed or requested a meeting at a future date, and eight stockholders representing 11% of our outstanding shares did not

During these discussions in 2022 and 2023, we invited stockholder feedback on compensation matters and other topics of importance to investors, including our corporate governance profile and ESG matters.

After each round of engagement, the collective feedback received was then reported to and discussed with the other members of the Compensation Committee and, where applicable, the Compensation Committee’s independent compensation consultant, senior management, and the full Board.

In general, we learned that many of our stockholders are supportive of our general approach and philosophy with respect to governance and compensation, but expect our governance and compensation practices to evolve as the Company grows and matures. The table below outlines some of the specific feedback and topics discussed during our stockholder engagement efforts during 2022 and 2023 and the actions we have taken in response.

The graphics below illustrate our introduction of performance-based compensation in fiscal 2023, and its increased importance in our Named Executive Officers’ fiscal 2024 compensation.

Our compensation philosophy and programs are designed to attract and retain talented executives who will help us realize our vision of making it simple to connect and do business, to automate the future of finance so millions of SMBs around the world can thrive, and to motivate and reward executive performance in a manner that is reflective of our overall financial performance over time. Compensation objectives include:

We seek to achieve these objectives by providing compensation that is competitive with the practices of companies in our peer group and market for executive talent in our geography, with individual pay decisions approved in the context of both Company and individual performance. In addition to our peer group, we compete with much larger technology and other high-growth software and financial technology companies for world class talent.

In addition, the Compensation Committee seeks to ensure that we maintain sound governance and compensation policies and practices. In designing and overseeing our executive compensation program, we strive to employ best practices and regularly assess our policies and practices.

Our Compensation Committee believes that executive compensation should be competitive with market practice and linked to our overall Company performance and stockholder returns. Our Compensation Committee evaluates our compensation philosophy and executive compensation program annually to ensure that our programs remain competitive relative to our market for executive talent and aligned with our strategic objectives. By delivering compensation in a mix of fixed and variable pay, including long-term vesting equity awards, we seek to align the incentives of our Named Executive Officers with achievement of long-term business objectives and financial performance that drives sustained stockholder value creation.

To support our long-term objectives and reinforce a strong pay-for-performance culture, a majority of total target compensation for our Named Executive Officers has been awarded in the form of performance-based PSUs and time-based RSUs. To further align stockholder value creation with executive compensation, for fiscal 2024, the Compensation Committee increased the weighting of performance-based equity vs. time-based equity, and introduced a new long-term performance metric in our PSU program based on relative total shareholder return. PSUs directly align pay with our performance.

To assess the competitiveness of our total direct compensation, our Compensation Committee considers the total direct compensation provided by companies in our compensation peer group and other market data provided by Compensia. Our Compensation Committee does not specifically benchmark the compensation of any individual to a precise level of compensation paid by companies in our peer group, and does not have a set formula for determining the relationship between either cash and equity compensation or fixed and variable or at-risk compensation.

In setting the compensation of our Named Executive Officers, our Compensation Committee uses a balanced approach rather than rigid percentiles or benchmarks to establish pay levels for each compensation element. Our Compensation Committee considers the market range of each executive role with opportunities for above median compensation driven by both Company performance and considerations specific to each Named Executive Officer. For fiscal 2023, our Compensation Committee considered the following factors in determining the compensation of our Named Executive Officers:

Our Compensation Committee does not assign relative weights or rankings to any of these factors and does not solely use any quantitative formula, target percentile or multiple for establishing compensation among the executive officers or in relation to the competitive market data.

The Compensation Committee is responsible for overseeing our executive compensation program and all related policies and practices. The Compensation Committee operates pursuant to a formal written charter approved by our Board, which is available on our website at https://investor.bill.com.

At least annually, the Compensation Committee reviews our executive compensation program and determines (and with respect to the CEO, formulates recommendations for consideration by our Board) the various elements of our Named Executive Officers’ compensation, with input from our Board, as well as any employment arrangements with our Named Executive Officers. The Compensation Committee is responsible for taking action with respect to compensation that will attract and retain talented executives and support our long-term stockholder value creation with an effective pay-for-performance approach.

The Compensation Committee meets regularly during the fiscal year both with and without the presence of our Chief Executive Officer and other Named Executive Officers. The Compensation Committee also discusses compensation issues with our Chief Executive Officer (except with respect to his own compensation) and other members of the Board between its formal meetings.

The compensation of our Named Executive Officers is determined by the Compensation Committee. In discharging its responsibilities, the Compensation Committee also works with members of our management, including our Chief Executive Officer and senior Human Resources and Legal executives. Our management team assists the Compensation Committee by providing information on corporate and individual performance, competitive market data, and management’s perspective and recommendations on compensation matters.

Members of management, including our Chief Executive Officer, regularly participate in Compensation Committee meetings to provide input on our compensation philosophy and objectives. Our Chief Executive Officer discusses with the Compensation Committee the compensation and performance of all executive officers, other than himself. Our Chief Executive Officer bases his recommendations in part upon his review of the performance of our

The Compensation Committee may engage the services of outside advisors, experts and others to assist the Compensation Committee. During fiscal 2023, the Compensation Committee retained the services of Compensia as independent compensation consultant to advise the Compensation Committee on compensation matters related to our executive and director compensation programs. In fiscal 2023, Compensia provided the following support:

Compensia reported to and worked for the Compensation Committee. In fiscal 2023, Compensia did not provide any services to us other than the services provided to our Compensation Committee. Our Compensation Committee has assessed the independence of Compensia in fiscal 2023 taking into account, among other things, the factors set forth in Exchange Act Rule 10C-1 and the listing standards of the NYSE, and has concluded that no conflict of interest exists with respect to the work that Compensia performs for our Compensation Committee.

As part of its annual compensation review process, the Compensation Committee generally reviews competitive market data for positions comparable to those of our Named Executive Officers and other key executives.

In February 2022, the Compensation Committee, with the assistance of Compensia, reviewed our executive compensation peer group. The executive compensation peer group approved by the Compensation Committee to support fiscal 2023 pay decisions was comprised of publicly-listed direct competitors and cloud software companies. Additional factors that were considered in identifying peers included:

For fiscal 2023, the Compensation Committee reviewed market data from the following compensation peer group:

The Compensation Committee evaluates our peer group annually and modifies the peer group as needed. Given that not all of the peer group companies report data for a position comparable to each of our executive officers, the Compensation Committee also reviews market data from the Radford Global Technology survey. Our Compensation Committee utilizes market data as one reference point along with various other factors, such as the individual’s performance, experience, and competitive market conditions in making compensation decisions.

Base salary is the primary fixed component of our executive compensation program. Base salaries for our executive officers are generally reviewed annually in July of each year. Changes in base salary applicable to fiscal 2022 and fiscal 2023 were effective as of July 1, 2021 and 2022, in accordance with our current practice of reviewing and adjusting compensation at the beginning of the fiscal year. In fiscal 2022 and fiscal 2023, the base compensation for our Named Executive Officers was as follows:

Base salary adjustments were made with reference to competitive market data and additional considerations described above under “—Compensation Decision-Making Process”, including the scope of role and individual performance of our Named Executive Officers. We seek to provide our executive officers with a base salary that is appropriate for their position and responsibilities, and that provides them with a level of income stability. Base salary adjustments were generally intended to increase alignment with the competitive market range as measured against our peer group for each Named Executive Officer, reflecting our strong performance and changes in our overall compensation framework through our transition from a private to publicly-traded company.

Base salaries and target annual incentive opportunities for our Named Executive Officers were not increased from fiscal 2023 to fiscal 2024. This was based on the Compensation Committee’s determination, including input from the CEO, that cash compensation was competitively positioned relative to market norms among comparable companies.

We use performance-based annual cash bonus opportunities to motivate our executive officers, including our Named Executive Officers, to achieve our annual financial, operational, and strategic business objectives. Under the Fiscal 2023 Bonus Program, our Named Executive Officers were eligible to earn annual cash bonuses based on our achievement of corporate financial goals, as described in detail below.

For purposes of the Fiscal 2023 Bonus Program, our Compensation Committee determined the target annual cash bonus opportunities of our Named Executive Officers expressed as a percentage of their annual base salary. In July 2022, the Compensation Committee set the target annual cash bonus opportunities for Mr. Lacerte, Mr. Rettig,

The actual fiscal 2023 cash bonus for each executive was determined based on the executive’s base salary as of fiscal year-end (which was unchanged during the fiscal year).

As we focus on driving durable growth and, increasingly, on enhancing our profitability profile, and in response to stockholder feedback, our Named Executive Officers were eligible to earn a cash bonus in fiscal 2023 based on our level of achievement of both revenue growth and a new profitability metric (weighted equally), with additional consideration given to each executive’s individual performance. The Fiscal 2023 Bonus Program required achievement of top-line and bottom-line performance metrics—specifically, Core Revenue and EBITDA Less Float — to provide incentives that drive the efficient, long-term growth of the Company. We continue to use Core Revenue (as we did in fiscal 2022) because it has been an important metric used by investors to assess the health and trajectory of our business and for fiscal 2023 we also included EBITDA Less Float to drive and reward improving profitability, which was a key focus for us in fiscal 2023. Both our Core Revenue and our EBITDA Less Float goals were weighted equally in determining the corporate performance factor for the fiscal 2023 bonus, with payouts for achievement between threshold, target and maximum levels to be linearly interpolated.

The Fiscal 2023 Bonus Program structure applicable for each of our Named Executive Officers, approved by the Compensation Committee in July 2022, was as follows:

Pursuant to the Fiscal 2023 Bonus Program, following the Compensation Committee’s evaluation of corporate financial performance, each Named Executive Officer’s payout may be adjusted up or down by a maximum of 20% based on an evaluation of each executive’s individual performance during the year.

In August 2023, the Compensation Committee determined that our actual fiscal 2023 Core Revenue was $944.7 million and EBITDA Less Float was approximately $9 million. Based on these results, our Compensation Committee approved a corporate performance factor equal to payment at 113.7% of target, as illustrated below:

Taking into consideration our corporate results and individual performance of our Named Executive Officers, the Compensation Committee approved the following cash bonuses for our Named Executive Officers:

Base salaries and target annual incentive opportunities for our Named Executive Officers were not increased from fiscal 2023 to fiscal 2024. This was based on the Compensation Committee’s determination, including input from the CEO, that cash compensation was competitively positioned relative to market norms among comparable companies.

Mr. Padelford received a signing bonus of $145,224 (CAD $192,350) as an inducement for Mr. Padelford to commence employment with us in September 2022. This signing bonus is subject to repayment in the event Mr. Padelford resigns or is terminated for “cause” before the one-year anniversary of his employment start date.

A significant portion of executive pay is delivered as long-term incentive equity awards with multi-year vesting requirements and performance-based metrics to incentivize, reward and retain our Named Executive Officers and drive long-term corporate performance and stockholder value and, thereby, to align the interests of our Named Executive Officers with those of our stockholders. Although our 2019 Plan does not itself mandate minimum vesting periods for specific types of equity awards, we generally provide awards vesting over a four-year time horizon, including a one-year cliff for new hires.

We have historically used equity awards in the form of time-based stock options and RSUs, but our Compensation Committee subsequently transitioned to primarily using RSUs. The Compensation Committee believes that RSUs serve as an important retention vehicle and align the interests of management and stockholders while being less dilutive than stock options.

As discussed above, during fiscal 2023 and in response to, among other things, market trends, our Compensation Committee’s assessment of our overall compensation program, our 2022 Say on Pay Vote results and investor feedback, the Compensation Committee introduced PSUs as a material component of annual equity award allocations for our executive officers.

During fiscal 2023, we granted annual long-term incentive awards to each of our Named Executive Officers. The Compensation Committee approved the terms and value of these grants with consideration given to the competitive

For Mr. Lacerte, Mr. Rettig, and Mr. Aji, the target value of equity approved by the Compensation Committee was allocated 70% to time-vesting RSUs and 30% to performance-based PSUs. For Ms. Chung, the target value of equity approved by the Compensation Committee was allocated 100% to time-vesting RSUs in anticipation of her upcoming retirement. Upon joining our Company in September 2022, Mr. Padelford received awards structured as 70% RSUs and 30% PSUs, in amounts reflecting the value required to incentivize him to join us as a new hire. In all cases, the target award value was converted into shares based on the 30-trading day average closing price of our common stock through the period ending on the day prior to the date of grant. Details of the annual long-term incentive compensation awarded to our Named Executive Officers are as follows:

The RSUs granted to Mr. Lacerte, Mr. Rettig, and Mr. Aji vest in 16 equal quarterly installments, for a total four-year vesting period. The RSUs granted to Mr. Padelford vest as to 25% after one year and in 12 equal quarterly installments thereafter, for a total four-year vesting period. The RSUs granted to Ms. Chung vest in four equal quarterly installments, for a total one-year vesting period, reflecting her then-upcoming retirement.

The PSUs granted to our Named Executive Officers in fiscal 2023 were eligible to be earned based on our level of achievement of a Core Revenue metric, as described above. In addition, the number of shares earned were subject to a maximum equal to 100% of target if our fiscal 2023 Non-GAAP Net Income did not exceed a $45 million threshold during the year.

Core Revenue was selected as the key performance metric for the fiscal 2023 PSUs as well as our Fiscal 2023 Bonus Program because our Compensation Committee determined that one of the most important factors in increasing stockholder value in fiscal 2023 was Core Revenue growth. Our Compensation Committee considered a variety of factors, including our continued growth, our dynamic, highly competitive and fast-moving industry and the difficulty of predicting future performance in such an environment, and concluded that a one-year Core Revenue-based performance metric incentivized our executives to focus on achieving performance objectives directly connected to our growth plan and, as a result, aligned their success with the interests of our stockholders.

In August 2023, the Compensation Committee certified that our actual fiscal 2023 Core Revenue was $944.7 million and our fiscal 2023 Non-GAAP Net Income was $194.4 million.² As a result, the Compensation Committee determined that the fiscal 2023 PSUs were achieved at 77.3% of target. One-third of achieved shares vested on August 28, 2023, with remaining achieved shares to vest quarterly over the following two years subject to the executive’s continued service. The actual numbers of Fiscal 2023 PSUs that were achieved and eligible to vest for each of our Named Executive Officers (other than Ms. Chung) are set forth in the table below.

Our Compensation Committee continued to build upon our performance-based compensation program in fiscal 2024, awarding additional PSUs to our Named Executive Officers, increasing the percentage of total compensation represented by PSUs, and diversifying the vesting conditions by adding a three-year relative TSR performance goal as described above under “—Compensation Changes for Fiscal 2024”.

We have entered into offer letters with each of our Named Executive Officers other than Mr. Padelford, for whom we entered into an Employment Agreement, as is customary for Canadian employees. Each of these offer letters and agreements provide for at-will employment and generally include the Named Executive Officer’s initial base salary and an indication of eligibility for an annual cash incentive award opportunity. Each of our Named Executive Officers is also eligible to participate in our employee benefit plans, including health insurance, that we offer to our employees. In addition, each of our Named Executive Officers has executed a form of our standard confidential information, invention assignment agreement and indemnification agreement.

The Compensation Committee considers maintaining a stable and effective management team to be essential to protecting the best interests of BILL and our stockholders. Accordingly, we have entered into change in control and severance agreements with each of our Named Executive Officers. These agreements are intended to align with competitive market practice among peers and the broader software market. In addition, change-in-control benefits support continued retention and continuity with respect to their roles and responsibilities without the distraction that may arise from the possibility or occurrence of a change in control of BILL. The benefits under the change in control and severance agreements generally supersede all other cash severance and vesting acceleration arrangements. For detailed descriptions of the post-employment compensation arrangements, we maintain with our Named Executive Officers as well as an estimate of the potential payments and benefits payable under these arrangements, see “—Potential Payments upon Termination or Change in Control” below.

To further align the interests of our executive officers with those of our stockholders and to promote a long-term perspective in managing our Company, in October 2021, we adopted a stock ownership policy for our Chief Executive Officer, Chief Financial Officer and other executive officers (as defined in Rule 16a-1(f) promulgated under the Exchange Act), including each of our Named Executive Officers. Our stock ownership policy requires each executive officer to acquire and hold a number of shares of our common stock equal in value to a multiple of such executive officer’s annual base salary, in each case, until he or she ceases to be an executive officer. The multiple for our Chief Executive Officer is five times his annual base salary, the multiple for our Chief Financial Officer is three times his annual base salary, and the multiple for our other executive officers is two times his or her annual base salary. For purposes of our stock ownership policy, we only count directly and beneficially owned shares, including shares purchased through our 2019 ESPP or 401(k) Plan, if applicable, shares underlying vested RSUs that are held or deferred, shares received on exercise of stock options and shares held in trust. Each executive officer has until the last day of our fiscal year that includes the fifth anniversary of the later of his or her designation as an executive officer and the effective date of the policy to obtain the required ownership level. The Compensation Committee may make exceptions in situations where the stock ownership policy would cause a severe hardship.

In October 2021, our Board adopted a policy providing for the recovery of all or any portion of an executive officer’s incentive-based compensation in the event that we restate our financial results and such executive officer’s fraud or intentional misconduct contributed to the need for such restatement, and the compensation earned by such executive officer exceeds what could have been earned by such executive officer based on the restated financial results, in all cases as determined by our Compensation Committee.

In September 2023, our Board adopted a restated clawback policy providing for the recovery of all or any portion of an executive officer’s incentive-based compensation in the event that we restate our financial results in compliance with the final rules promulgated by the SEC under Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, Rule 10D-1 and the NYSE. The policy applies to our Chief Executive Officer, Chief Financial Officer, and other executive officers, including each of our Named Executive Officers. The recovery period extends up to three most recently-completed fiscal years prior to the date of the restatement, with respect to incentive-based compensation granted or received after the effective date of the SEC rules.

Under our Insider Trading Policy, we prohibit our employees, including our Named Executive Officers, and Board members, from hedging the risk associated with ownership of shares of BILL common stock and other securities.

Under our Insider Trading Policy, we prohibit our employees, including our Named Executive Officers, and Board members from pledging any BILL securities as collateral for a loan, except as specifically approved by our Chief Compliance Officer.

In fiscal 2023, our Named Executive Officers were eligible to receive the same employee benefits generally available to all of our full-time employees, subject to the satisfaction of certain eligibility requirements. This included medical, dental, and vision benefits, flexible spending accounts, short-term and long-term disability insurance, life insurance, and accidental death and dismemberment insurance. Our employee benefits programs are designed to be affordable and competitive to the market in which we compete for talent.

In addition, in fiscal 2023, we provided a tax equalization benefit for Mr. Padelford, a Canadian resident to address duplicative withholding in connection with his initial onboarding.

Our Compensation Committee takes the applicable tax and accounting requirements into consideration in designing and overseeing our executive compensation program.

Section 162(m) of the Internal Revenue Code of 1986, as amended (the Code), limits the amount that we may deduct from our federal income taxes for remuneration paid to our Named Executive Officers (other than our Chief Financial Officer) to $1 million dollars per executive officer per year.

In approving the amount and form of compensation for the Named Executive Officers, the Compensation Committee considers all elements of our cost of providing such compensation, including the potential impact of Section 162(m). The Compensation Committee believes, however, that our stockholder interests are best served by retaining its discretion and flexibility in awarding compensation, even though some compensation awards may result in non-deductible compensation expense.

We did not provide any executive officer, including any Named Executive Officer, with a “gross-up” or other reimbursement payment for any tax liability that he or she might owe as a result of the application of Sections 280G, 4999, or 409A of the Code during 2020, and we have not agreed and are not otherwise obligated to provide any Named Executive Officer with such a “gross-up” or other reimbursement.

We account for stock compensation in accordance with the authoritative guidance set forth in FASB ASC Topic 718, which requires companies to measure and recognize the compensation expense for all share-based awards made to employees and directors over the period during which the award recipient is required to perform services in exchange for the award. We determine both the grant date fair value and the service period based on applicable accounting standards. This calculation is performed for accounting purposes and reported in the compensation tables included in this Proxy Statement.

We sponsor a retirement plan intended to qualify for favorable tax treatment under Section 401(a) of the Code, containing a cash or deferred feature that is intended to meet the requirements of Section 401(k) of the Code. With certain exceptions, all employees who have attained at least 21 years of age are eligible to participate in the plan on the first day of the month occurring after the employee satisfies the eligibility requirements. Participants may make pre-tax contributions to the plan from their eligible earnings up to the statutorily prescribed annual limit on contributions under the Code. Participant contributions are held in trust as required by law. No minimum benefit is provided under the plan. An employee’s interest in his or her deferral contributions is 100% vested when contributed. We may make discretionary matching contributions, which contributions will be subject to vesting conditions.

Our Charter contains provisions that limit the liability of our directors for monetary damages to the fullest extent permitted by the Delaware General Corporation Law, or DGCL. Consequently, our directors are not personally liable to us or our stockholders for monetary damages for any breach of fiduciary duties as directors, except liability for:

Our Charter and Bylaws require us to indemnify our directors and officers to the maximum extent not prohibited by the DGCL and allow us to indemnify other employees and agents as set forth in the DGCL. Subject to certain limitations, our Bylaws also require us to advance expenses incurred by our directors and officers for the defense of any action for which indemnification is required or permitted, subject to very limited exceptions.

We have entered, and intend to continue to enter, into separate indemnification agreements with our directors, officers, and certain of our other employees. These agreements, among other things, require us to indemnify our directors, officers, and key employees for certain expenses, including attorneys’ fees, judgments, fines, and settlement amounts actually and reasonably incurred by these individuals in any action or proceeding arising out of their service to us or any of our subsidiaries or any other company or enterprise to which these individuals provide services at our request. Subject to certain limitations, our indemnification agreements also require us to advance expenses incurred by our directors, officers, and key employees for the defense of any action for which indemnification is required or permitted.

We believe that these provisions of our amended and restated certificate of incorporation, Bylaws, and indemnification agreements are necessary to attract and retain qualified directors, officers, and key employees. We also maintain directors’ and officers’ liability insurance.

The limitation of liability and indemnification provisions in our Charter and Bylaws or in these indemnification agreements may discourage stockholders from bringing a lawsuit against our directors and officers for breaches of their fiduciary duty. They may also reduce the likelihood of derivative litigation against our directors and officers, even though an action, if successful, might benefit us and other stockholders. Further, a stockholder’s investment may be adversely affected to the extent that we pay the costs of settlement and damage awards against directors and officers as required by these indemnification provisions.

Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended (Securities Act), may be permitted to directors, executive officers or persons controlling us, we have been informed that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

Certain of our directors and executive officers have adopted written plans, known as Rule 10b5-1 plans, in which they have contracted with a broker to buy or sell shares of our common stock on a periodic basis. Under a Rule 10b5-1 plan, a broker executes trades pursuant to parameters established by the director or executive officer when entering into the plan, without further direction from them. The director or executive officer may amend or terminate the plan in specified circumstances.

This report of the Compensation Committee is required by the SEC and, in accordance with the SEC’s rules, will not be deemed to be part of or incorporated by reference by any general statement incorporating by reference this Proxy Statement into any filing under the Securities Act or under the Exchange Act, except to the extent that we specifically incorporate this information by reference, and will not otherwise be deemed “soliciting material” or “filed” under either the Securities Act or the Exchange Act.

The Compensation Committee has reviewed and discussed the “Compensation Discussion and Analysis” section of this Proxy Statement with the Company’s management. Based on that review and those discussions, the Compensation Committee recommended to the Board that the “Compensation Discussion and Analysis” section be included in this Proxy Statement and incorporated by reference into the Company’s Annual Report on Form 10-K for its fiscal year ended June 30, 2023.

The following table provides information concerning compensation awarded to, earned by or paid to each of our Named Executive Officers for all services rendered to us during fiscal 2021, fiscal 2022 and fiscal 2023, as applicable: