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  "docId": "019dd923-622b-71dc-a6da-20e710622d80",
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  "documentTitle": "Box, Inc. (BOX)",
  "authorId": "03_Starboard_Value",
  "authorName": "Starboard Value",
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  "sourceTypeLabel": "Activist investor",
  "presentationDate": "2021-08-06 00:00:00",
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  "pageNumber": 104,
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  "notes": "Uses a comparison of proxy statement language from FY2018 and FY2021 to highlight the shift from cash to stock-based incentives.",
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      "text": "Box’s annual incentive plan structure raises many concerns",
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      "text": "Self-funded programs lead to the final cost of the incentive program being more apparent to stockholders, resulting in more management accountability, and ensuring that stockholders are not bearing an excessive portion of the compensation costs.\nIn recent years, while under pressure to show improved profitability, Box has made the decision to pay its annual incentive compensation in the form of fully-vested RSUs, which are effectively freely tradeable stock.\nConcerningly, one of the two target metrics for Box’s annual incentive compensation plan is non-GAAP operating income, which excludes stock-based compensation.\nAs such, it appears as if Box is artificially inflating its non-GAAP operating income by replacing cash compensation with freely tradeable stock.\nThis has the effect of 1) increasing bonus attainment and 2) further diluting common stockholders.",
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      "kind": "paragraph",
      "text": "Annual incentive plans are nearly universal in their design as “self-funded”, meaning that the full amount of the incentive payment is subtracted from any profitability goal of the incentive program.",
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      "text": "Source: Company filings.",
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      "text": "Comparison of FY2018 and FY2021 Non-Equity Incentive Plan Compensation descriptions from company filings.",
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      "kind": "title",
      "text": "The Annual Incentive Plan Is Paid in Equity",
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