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  "documentTitle": "Legion One Span Presentation May 2021",
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  "documentKindSlug": "activist-deck",
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  "presentationDate": "2021-05-01 00:00:00",
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  "pageNumber": 126,
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  "notes": "The slide highlights a structural misalignment between accounting revenue recognition and executive performance incentives.",
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      "kind": "callout",
      "text": "Stockholders have witnessed OSPN management handsomely rewarded for Hardware outperformance despite Software underperformance, thus representing the opposite of the Company's long-term strategic objectives",
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      "text": "Hardware and perpetual licensing revenue and profits are recognized entirely upfront\nTerm-based licensing and SaaS revenue is recognized ratably over their contracts, but associated operating expenses are not, thus creating optically lower revenue and profitability in the near-term when shifting towards recurring revenue\nHowever, long-term value will be driven by an efficient shift towards recurring revenue as cumulative economic value earned should be equal or greater under these contracts as compared to legacy revenue streams\nBy failing to update the executive compensation programs’ performance metrics and weightings, we believe the Board has created a perverse incentive for management to push legacy revenue streams as much of their compensation remains weighted heavily towards GAAP revenue and Adj. EBITDA",
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      "kind": "other",
      "text": "Source: SEC Filings, Legion Partners' Estimates",
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      "kind": "paragraph",
      "text": "Due to the differing revenue recognition schedules between legacy Hardware and perpetual licensing vs. recurring revenue, antiquated performance metrics can fail to incentivize OneSpan's valuable transition",
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      "kind": "title",
      "text": "Compensation Programs Appear to Drive Perverse Incentives",
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