January 15, 2010
By
EDGAR Transmission
Securities
and Exchange Commission
Division
of Corporation Finance
100 F
Street, N.E., Mail Stop 3561
Washington,
DC 20549
Attn: H.
Christopher Owings
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Re:
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LivePerson,
Inc.
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Form
10-K for the Fiscal Year Ended December 31, 2008
Filed March 13,
2009
Definitive Proxy Statement on
Schedule 14A
Filed April 30,
2009
Forms 10-Q for the Fiscal Quarters Ended March 31, 2009 and June 30,
2009
Filed May 11, 2009 and
August 7, 2009
File
No. 000-30141
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Dear Mr.
Owings:
On behalf
of LivePerson, Inc. (the “Company”), we respectfully provide the following
responses to comments contained in the letter dated December 17, 2009 (the
“Letter”) from H. Christopher Owings of the Staff (the “Staff”) of the
Securities and Exchange Commission (the “Commission”) to Robert P. LoCascio, the
Company’s Chairman and Chief Executive Officer. The responses set
forth below are based upon information provided to Wilmer Cutler Pickering Hale
and Dorr LLP by the Company. The responses are keyed to the numbering
of the comments and the headings used in the Letter. Except where
noted otherwise, the Company intends to comply with the comments in all future
filings.
Securities
and Exchange Commission
January
15, 2010
Page
2
Definitive
Proxy Statement on Schedule 14A
Annual
Incentive Compensation, page 14
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1.
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We
note your response to comment four from our letter dated October 28, 2009.
We note that each officer’s annual incentive compensation is determined,
in part, on the
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“Company’s
performance against objectives, in the following four areas: actual revenue as
compared to target revenue; actual EBITDA per share as compared to target EBITDA
per share; actual revenue-to-payroll ratio as compared to target
revenue-to-payroll ratio; and consumer division actual revenue as compared to
consumer division target revenue.”
Please
quantify each goal, discuss your actual results under those goals, and how the
amount paid to each executive officer was ultimately
determined. Please state if the Compensation Committee exercised its
discretion and adjusted any named executive officer’s incentive
payout. With respect to the Executive Vice President of Marketing,
Executive Vice President and GM Technology Operations, please explain what
objectives you utilize to determine this executive officer’s annual incentive
compensation and explain how the objectives are weighted; provide similar
disclosure to what you have provided with respect to the other named executive
officers you discuss here. Please also discuss the circumstances
under which any discretion may be exercised in granting such awards absent
attainment of the stated performance goal. Please see Instruction 4
to Item 402(b) of Regulation S-K.
Response:
I. For
the Company’s Chief Executive Officer and its President/Chief Financial Officer,
the following metrics and discretion were applied in calculating 2008 bonus
payments. At the beginning of the year, the Compensation Committee
set the 2008 bonus target amount for each of these executives at $200,000, with
the potential to under- or over-achieve this bonus target based on performance
against four equally-weighted metric components as well as a discretionary
component enabling the Compensation Committee to adjust actual payout upward or
downward in its discretion. As demonstrated below, the metric
components of the incentive plan are structured such that the payout associated
with each metric has a non-linear correlation to percentage achievement of the
target for that metric. This is designed to reward over-achievement
of target performance and deduct for under-achievement of target
performance. In addition, for each metric there is a threshold
achievement level below which no bonus is earned. For the fiscal year
2008, actual achievements against the four metric components, and ultimate
payout of incentive compensation was determined as follows for both the
Company’s Chief Executive Officer and its President/Chief Financial
Officer:
Securities
and Exchange Commission
January
15, 2010
Page
3
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·
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With
respect to the metric component relating to the Company’s 2008 revenue,
the target for this component was achieved at 96%, which, per the
incentive plan for these executives, corresponded to a payout of 67% for
this component.
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·
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With
respect to the metric component relating to the Company’s 2008 EBITDA, the
target for this component was achieved at 91%, which, per the incentive
plan for these executives, corresponded to a payout of 80% for this
component.
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·
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With
respect to the metric component relating to the Company’s 2008 revenue to
payroll ratio, the target for this component was over-achieved at 108%,
which, per the incentive plan for these executives, corresponded to a
payout of 116% for this component.
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·
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With
respect to the metric component relating to the Company’s 2008 consumer
operations revenue, the target for this component was achieved at 70%,
which, per the incentive plan for these executives, failed to meet the
threshold achievement for this component and accordingly, corresponded to
a payout of 0% for this component.
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The
foregoing metric achievements, taken together, tallied to a bonus achievement of
66% of target (or $131,250) based on the metric components of the incentive
compensation plan, and further subject to the Compensation Committee’s
discretion to adjust payout pursuant to the discretionary component of the
incentive compensation plan. Upon review, the Compensation Committee
took into account the foregoing metric achievements under the individual
incentive compensation plan for these executives, as well as overall Company
performance against Company targets for 2008 (which ranged from 82% to 95%
achievement of targets), average percentage payout against bonus targets across
the employee base of the Company for 2008 (which averaged 82% of target), and
the Compensation Committee’s subjective evaluation of the overall performance of
each executive. Following its review, the Compensation Committee set
the actual 2008 bonus payout for each of these executives at 75% of target, or
$150,000, for each executive.
II. For
the Company’s Executive Vice President of Marketing, the 2008 bonus payment was
determined in the following manner: A bonus target amount was set at
beginning of the year in the amount of $70,000. Following the end of
the year, the Company’s Chief Executive Officer and its President/Chief
Financial Officer evaluated key performance areas and made a discretionary award
based on their subjective assessment of the individual’s performance in 3 key
areas for his role (equal weight was given to each component). These
areas were: lead generation to support sales efforts, product marketing to
support product development efforts, and marketing communication, public
relations and sales support. Based on their evaluation, the Company’s
Chief Executive Officer and its President/Chief Financial Officer recommended a
payout of $65,000 based on the executive’s individual performance against the
stated goals above, and taking into account the overall Company performance for
2008. The Compensation Committee, in its discretion, reviewed and
approved management’s recommendation for this executive’s 2008 bonus
payout.
III. For
the Company’s Executive Vice President and GM Israel Technology Operations, the
2008 bonus payment was determined in the following manner: A bonus
target amount was set at beginning of the year in the amount of 215,000 NIS1. The Company’s Chief Executive
Officer and its President/Chief Financial Officer evaluated key performance
areas and made a discretionary award based on their subjective assessment of the
individual’s performance in 4 key areas for his role (equal weight was given to
each component). These areas were: maximizing availability of hosted
services for customers within budget, maximizing effectiveness of customer
support help desk within budget, supporting R&D programming efforts, and
managing office administration for Israel operations within
budget. The Company’s Chief Executive Officer and its President/Chief
Financial Officer recommended a payout against bonus target of 100% based on the
executive’s individual performance against the stated goals and taking into
account the overall Company performance for 2008. The Compensation
Committee, in its discretion, reviewed and approved management’s recommendation
for this executive’s 2008 bonus payout.
1 As further detailed in the Company’s Definitive Proxy
Statement on Schedule 14A filing with respect to this period, this
executive is based in the Company’s Israel office and all payments are made in
New Israeli Shekels. A sample conversion to US Dollars based on an
average exchange rate for 2008 appears in the Company’s Definitive Proxy
Statement on Schedule 14A filing.
Securities
and Exchange Commission
January
15, 2010
Page
4
* * * * *
* * *
The
Company hereby acknowledges that:
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(i)
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it
is responsible for the adequacy and accuracy of the disclosure in the
10-K;
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(ii)
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Staff
comments or changes to disclosure in response to Staff comments do not
foreclose the Commission from taking any action with respect to the 10-K;
and
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(iii)
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the
Company may not assert the Staff comments as a defense in any proceeding
initiated by the Commission or any person under the federal securities
laws of the United States.
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If you
require additional information, please telephone the undersigned at (212)
937-7239. Thank you.
| Very truly yours, | |||
| /s/ Brian B. Margolis | |||
| Brian B. Margolis | |||
Enclosures
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cc:
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Robert
P. LoCascio (LivePerson, Inc.)
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Monica
L. Greenberg, Esq. (LivePerson,
Inc.)
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