Executive Incentive Pay Disclosures at Etsy, Inc.

Abstract

The financially savvy (fictional) protagonist in this case is an independent artist, intrigued with the possibility of becoming a seller on the Etsy, Inc., marketplace. As such, she is seeking to learn about the company—that is, its culture, recent history, and incentive compensation philosophy and practices for top executives. The case provides pertinent, publicly sourced information for exploring and discussing such issues.This case is suitable for an undergraduate, graduate, or non-degree executive education course where the focal topic is, in general, performance management, and more specifically, the use and design of executive incentive compensation plans. A valuable secondary objective is to introduce students to some of the company information disclosed in a publicly available corporate proxy statement. That document, filed with the SEC as Form DEF 14A, is filed in preparation for a public company's annual shareholder meeting. Excerpt UVA-C-2430 Dec. 6, 2019 Executive Incentive Pay Disclosures at Etsy, Inc. Betsy Jordaniske had been an artist for as long as she could recall. In fact, in fourth grade, she had won the first art contest she had ever entered. What was unique and unusual about her winning piece, and what was still true 20 years later, was that her paintings were three-dimensional, incorporating real materials from nature such as dried grasses, pebbles, twigs, grains, and even a little dirt once in a while. Such materials interplayed with the acrylics, the chalk, and the colored pencils she used in a truly captivating way. Her paintings were unique to say the least, and they often prompted observers to move closer, look longer, and reflexively smile just a little bit. For years, Jordaniske had been frustrated by not having enough time to devote to her art—she lived for that endeavor, and she worked as a bookkeeper to live. On the surface, her occupation and vocation seemed quite incongruous, but it was the symmetry of bookkeeping that had a certain appeal to her, just as the unlimited possibilities of a blank canvass never failed to kick-start the flow of artistic ideas in her head and heart. Formal schooling in accounting or art had not been a path Jordaniske had been able to take. Out of family necessity, she had gone to work right out of high school in her uncle's retail shop, doing the books in the back office, working the cash register out front, and helping customers when the shop got busy. It was in the evenings and on weekends, when the weather was nice, that she set up her portable, bare-bones studio in various natural, out-of-the-way settings around her Texas hometown. She let her surroundings speak to her—waiting to sense the urge to paint a certain scene, in a certain way. Inevitably, ideas easily and readily flowed. If she did not have all the material she needed while on site, she would simply add it later, with no loss of artistic wholeness, as the image she wanted was already finished in her mind's eye. It was this duality of her essence—the practical, yet artistic, enjoyment of a finite/prescribed bookkeeping system, as well as the unfettered possibilities/expressions of an artist's imagination—behind her decision to look into the Etsy, Inc., marketplace possibility. . . .