eBay Exec Compensation, Compliance & Ethics Changes Revealed In 2024 Proxy Statement

Liz Morton
Liz Morton


eBay released their 2024 Proxy Statement today, revealing executive compensation and changes to compliance and ethics programs as part of their annual report.

CEO Jamie Iannone earned total compensation of $21,560,669 in 2023, up from $16,950,325 in 2022, mostly due to stock and option awards plus non-equity incentive plan compensation.

Source: eBay 2024 Proxy Statement
Source: eBay 2023 Proxy Statement

That puts Iannone's compensation ratio compared to that of the average eBay employee ($160,007) at 135:1.

While there is not much new in this proxy statement, one section in particular stood out - eBay says they separated internal management of ethics and compliance in 2023 and that new Chief Compliance Officer Ryan Jones is reporting to Chief Financial Officer Steve Priest, when that role previously reported to Chief Legal Officer Marie Oh Huber.

It's also noteworthy that eBay now says they have a Chief Ethics Officer but does not name the individual who currently holds this role or specify to whom this role reports.

In 2023, we separated internal management of ethics and compliance and consolidated several areas of compliance under our Chief Compliance Officer, who reports to our Chief Financial Officer.

Our Chief Compliance Officer periodically reviews with the Risk Committee the major risks under its oversight and the steps management has taken to detect, monitor and actively manage those risks within the agreed risk tolerance...

...Our Audit Committee has an annual cadence to review the risks included in its remit, including quarterly meetings regarding ethics programs with our Chief Ethics Officer.

What that section doesn't say is that Jones took over the Compliance Officer role in August 2023, meaning this change did not occur until almost 3/4 of the way through the year.

Jones' hiring and the decision to split up internal management of compliance and ethics were likely driven by negotiations eBay was undertaking with the Department of Justice to work out a deferred prosecution agreement in connection to the 2019 cyberstalking of journalists Ina and David Steiner of EcommerceBytes.

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The deal hit the company with the maximum fine of $3 Million dollars and will require enhanced compliance monitoring for 3 years, including a specific focus on Mergers and Acquisitions due diligence, disclosure and risk management.

That part of the agreement raised the question - what does cyberstalking have to do with M&A due diligence and compliance?

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The shocking corporate plot sought to change the content of the Steiners' reporting through intimidation and to gain their assistance to unmask the identity of Fidomaster/unsuckEBAY, a frequent commenter and source who also sparked the ire of top executives at the company.

Senior Director Security Jim Baugh, Director of Global Resiliency David Harville, Security Manager Philip Cooke, Senior Manager of Global Intelligence Stephanie Popp, Senior Manager of Special Operations Brian Gilbert, Global Intelligence Manager Stephanie Stockwell and security analyst Veronica Zea all pleaded guilty and have either been sentenced or are awaiting sentencing for their roles in the crimes.

The Steiners have also filed a civil case against the criminal defendants plus ex-CEO Devin Wenig, ex-Communications Chief Steve Wymer, Ex-SVP Global Operations Wendy Jones, eBay Inc. and security company Progressive F.O.R.C.E Concepts - alleging communications from the very top of the c-suite directed and egged on the harassment.

While not named in either the criminal or civil cases, Oh Huber was copied on several emails that have been released as part of this ongoing litigation, including the now infamous "Whatever. It. Takes" email from Wymer.

The email that Wymer sent on August 7, 2019...was written in response to an earlier email that an in-house eBay attorney sent to Wymer, Huber, and Mr. Baugh, about the limited options for addressing...tweets about eBay, which the company believed were connected to, or provoked by, the Newsletter [EcommerceBytes].

The full thread makes clear that Huber and Aaron Johnson in eBay’s legal department requested that Mr. Baugh regularly update the company’s senior executives about “any news/developments on [his] end.”...

...During a lengthy discussion by email about @unsuckebay...Mr. Baugh reported to Wenig, Wymer, and Huber that the security department was working to gather “information regarding [the poster’s] identity and location”.

In the same thread, Wymer mentioned corporate and legal efforts to “get [@unsuckebay] killed.”

Source: USA v. Baugh 1:20-cr-10263 Doc 79

The email chain started with Wenig expressing his desire to see the unsuckEBAY Twitter account shut down - assigning the task to Baugh, with Oh Huber and Wymer copied.

Source: USA v. Baugh 1:20-cr-10263 Doc 79 Exhibits C & D

Wymer confirmed he had previously discussed the issue with Baugh and explored all angles with Twitter but had been unable to get the account killed.

Source: USA v. Baugh 1:20-cr-10263 Doc 79 Exhibits C & D

Oh Huber echoed the frustration, but her and another member of eBay legal, Aaron Johnson, advised there wasn't a strong claim to appeal to Twitter to take action.

Source: USA v. Baugh 1:20-cr-10263 Doc 79 Exhibits C & D
Source: USA v. Baugh 1:20-cr-10263 Doc 79 Exhibits C & D

Baugh appeared to be trying to placate his bosses by offering that his team had been investigating for weeks and were close to discovering the identity and location of unsuckEBAY.

Source: USA v. Baugh 1:20-cr-10263 Doc 79 Exhibits C & D

Oh Huber accepted that answer with a smiley face emoji, saying she would hold off on pursuing further legal steps in light of Baugh's investigation.

Source: USA v. Baugh 1:20-cr-10263 Doc 79 Exhibits C & D

The next day Wymer expressed he was "utterly vexed" by the situation and that any effort to "solve" the problem should be explored...Whatever. It. Takes.

Source: USA v. Baugh 1:20-cr-10263 Doc 79 Exhibits C & D

Oh Huber remained in her role after these events (only recently announcing she will be departing the company this year) and, as a result of eBay's internal investigation, the Safety & Security unit was moved to the Legal Department from the Global Operations division, putting the entire security apparatus at eBay under her purview.

Molly Finn, who was VP & Chief Compliance Officer at the time, was also copied on several related emails, according to redacted privilege logs included in court filings.

Finn also still works at eBay, though she supposedly moved out of the compliance role in December 2021 (2+ years after these events) to become Vice President, Deputy General Counsel M&A and Securities - a position which she still holds today.

Were there red flags and holes in eBay's ethics and compliance procedures that were missed, allowing these criminal acts to occur on her watch?

Unfortunately, much of her correspondence in this matter is likely to remain out of the public record under attorney work product privilege, so we may never know what she knew or how she responded to emails related to these events.

Public records show the Securities and Exchange Commission sent a letter on September 20, 2022 with some pointed questions about eBay's April 21, 2022 Proxy Statement - including directly asking for disclosure as to whether or not eBay had a Chief Compliance Officer at that time and, if so, to whom that person reported.

Notably, it was Molly Finn who responded, using her title of Vice President, Deputy General Counsel (leaving off the M&A part), and she completely glossed over the Compliance Officer question, neither explicitly stating she no longer held that title nor confirming whether or not eBay had anyone in that role at that time.

Per the SEC's request, eBay addressed these questions in "future proxy disclosures" with the Proxy Statement filed on April 28, 2023 purporting to lay the matter to rest by stating "Our Audit Committee has an annual cadence to review the risks included in its remit, including quarterly meetings regarding ethics programs with our Chief Compliance Officer (who reports to our Chief Legal Officer, with direct access to the Audit Committee Chair)."

But who was the Chief Compliance Officer reporting to Chief Legal Officer Marie Oh Huber and supposedly having quarterly meetings with the Audit Committee at this time since eBay did not hire Ryan Jones until August 2023?

Was Molly Finn still acting in this capacity even though her title had been changed in December 2021 and if so, why was that not disclosed anywhere? If someone else occupied that role, who was it and why were they not named?

The scope of the compliance monitoring, coupled with a historic $59 Million settlement with the DEA and ongoing litigation brought by the EPA, suggests the Department of Justice and other Federal regulatory bodies may be concerned about a wide variety of business practices, opening eBay's entire operation up to additional scrutiny.

Those concerns may include apparent due diligence and disclosure failures in eBay's October 2022 acquisition of trading card marketplace TCGPlayer, which led to the formation of the first US labor union in eBay's history and the sudden departure of Chief Accounting Officer Brian Doerger last year.

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When Iannone first embarked on his grand plan to bring authentication in-house at eBay, very little attention was given to the major change in strategy it represented or the risks this strategy could pose to the company (and investors).

As unsuckEBAY noted at the time, it was a "significant step-change" for the company as it departed from the asset light, "just a venue" model that had previously protected it from unionization efforts which have targeted competitors like Amazon.

eBay should have been able to anticipate and prepare for the possibility of facing unionization efforts following the acquisition, given that the agreement initially allowed Founder Chedy Hampson and other management personnel to remain in an environment with a documented history of "strained" labor relations which led to a previous union drive in March 2020 that received national media attention and public support from Senator Bernie Sanders.

Source: NLRB Case Number 03-RC-258061

However, eBay chose not to reveal the potential risks that unionization efforts could bring to investors until February 23, 2023 in a 10-K filing with the SEC.

Molly Finn directly oversaw the TCGPlayer acquisition in her role as VP Deputy General Counsel M&A and Securities and would have been responsible for key due diligence and risk assessment - including whether there had been a history of organizing activity or prior labor issues at the company eBay intended to acquire.

If Finn was still acting as Chief Compliance Officer between December 2021 and August 2023, while also holding the title of Vice President, Deputy General Counsel M&A and Securities, that would represent a significant conflict of interest.

The Chief Compliance Officer typically serves a crucial function in the due diligence and risk assessment process and keeping the company's compliance efforts independent from its business strategies would be critical to ensure transparency reporting, regulatory filings, and stakeholder communication were handled properly both pre and post merger.

Allowing the same person to serve as both VP of M&A and CCO could potentially create conflicts that may affect the accuracy of financial disclosures and the effectiveness of internal controls.

Could the fact that Molly Finn was Chief Compliance Officer at the time of the cyberstalking scandal and is now Deputy General Counsel M&A and Securities have something to do with the DOJ's interest in having M&A due diligence explicitly called out for additional monitoring?

If so, it's very interesting indeed that eBay has explicitly stated in this proxy statement that they separated internal management of ethics and compliance in 2023 and even more interesting that they did not disclose who the Chief Ethics Officer is and to whom that person reports.

Perhaps eBay is getting their ducks in a row and their story straight in case the SEC should have any questions about the apparent due diligence failures and conflicts of interest in the TCGPlayer deal or the current state of eBay's ethics and compliance programs.


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Liz Morton is a seasoned ecommerce pro with 17 years of online marketplace sales experience, providing commentary, analysis & news about eBay, Etsy, Amazon, Shopify & more at Value Added Resource!