UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549​

SCHEDULE 14A​

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934

Filed by the Registrant ☒

Filed by a Party other than the Registrant ☐

​

Check the appropriate box:

☐

Preliminary Proxy Statement

​

☐

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

​

☒

Definitive Proxy Statement

​

☐

Definitive Additional Materials

​

☐

Soliciting Material under §240.14a-12

​

23andMe Holding Co.

(Name of Registrant as Specified In Its Charter)​

N/A

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)​

Payment of Filing Fee (Check the appropriate box):

☒

No fee required.

​

☐

Fee paid previously with preliminary materials.

​

☐

Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11.

​

 

23andMe Holding Co.

349 Oyster Point Boulevard
South San Francisco, California 94080

Notice of Annual Meeting of Stockholders
and Proxy Statement

 

July 15, 2022

TO OUR FELLOW STOCKHOLDERS:

We invite you to join us for the 2022 Annual Meeting of Stockholders (the “Annual Meeting”) of 23andMe Holding Co., to be held at 1:00 p.m., Pacific Time, on Thursday, August 25, 2022. The Annual Meeting will be held as a virtual meeting, to be conducted exclusively via live webcast at www.virtualshareholdermeeting.com/ME2022. Details regarding how to participate in the webcast of the Annual Meeting and the business to be conducted at the Annual Meeting are provided in the accompanying Notice of Annual Meeting of Stockholders (the “Notice”) and Proxy Statement.

Fiscal 2022 was a monumental year for 23andMe. We completed our business combination with VG Acquisition Corp., a special purpose acquisition company sponsored by Virgin Group, and became a public company trading on The Nasdaq Global Select Market beginning on June 17, 2021. We also made progress in our mission to help people access, understand, and benefit from the human genome by increasing the number of health reports in our Personal Genome Service® to over 80, growing our customer base to 12.8 million genotyped customers, and expanding our therapeutics pipeline to more than 50 active programs, including entering our first wholly-owned cancer therapy into a Phase 1 clinical trial.

In November 2021, we expanded our consumer business into telehealth services through our acquisition of Lemonaid Health, Inc. (“Lemonaid Health”), an on-demand platform for accessing medical care and pharmacy services online. Lemonaid Health’s medical and pharmacy services, including its team of physicians and nurse practitioners serving patients in all 50 states, will help position 23andMe to achieve our goal of making genetics-based personalized healthcare a reality.

We are taking all these steps with our customers and stockholders in mind, and we believe we have the tools that we need to continue this growth well into the future. We are thankful for your support and continued investment in 23andMe.

Whether or not you plan to join us for the Annual Meeting, it is important that your shares be represented. We encourage you to vote by telephone, by mail, or online by logging into www.proxyvote.com after reading the Notice and Proxy Statement.

Always Forward,

 

 

Notice of Annual Meeting of Stockholders

 

Items of Business

The Proxy Statement describes each of these proposals in detail. In addition, we will transact any other business that may properly come before the Annual Meeting, and at any adjournments, continuations, or postponements thereof.

Important Voting Information

Even if you plan to virtually attend the Annual Meeting, we urge you to vote as soon as possible in one of the following ways:

Participating in the Annual Meeting

Holders of Class A common stock and Class B common stock as of the record date are invited to attend the Annual Meeting by visiting www.virtualshareholdermeeting.com/ME2022. Our goal is to ensure that stockholders have the same rights and opportunities to participate in the Annual Meeting as you would at an in-person meeting. You will be able to attend the meeting online, examine a list of our stockholders, vote your shares electronically, and submit questions during the meeting. To do so, you will need the unique 16-digit control number printed in the box on your Notice of Internet Availability of Proxy Materials or proxy card. Please see page 69 for more information.

 

​	​	YOUR VOTE IS IMPORTANT	​	​
​	​	Please carefully review the proxy materials for the Annual Meeting and cast your vote.	​	​

Forward-Looking Statements

This proxy statement contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The words “believes,” “anticipates,” “estimates,” “plans,” “expects,” “intends,” “may,” “could,” “should,” “potential,” “likely,” “projects,” “predicts,” “continue,” “will,” “schedule,” and “would” or, in each case, their negative or other variations or comparable terminology, are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These forward-looking statements are predictions based on our current expectations and projections about future events and various assumptions. We cannot guarantee that we will actually achieve the plans, intentions, or expectations disclosed in these forward-looking statements and you should not place undue reliance on our forward-looking statements. These forward-looking statements involve a number of risks, uncertainties (many of which are beyond our control), or other assumptions that may cause actual results or performance to differ materially from those expressed or implied by these forward-looking statements. The forward-looking statements contained herein are also subject to other risks and uncertainties that are described in the Fiscal 2022 Form 10-K filed with the SEC on May 27, 2022 and in the reports subsequently filed by us with the SEC. The statements made herein are made as of the date hereof and, except as may be required by law, we undertake no obligation to update them, whether as a result of new information, developments, or otherwise.

 

Incorporation by Reference

Neither the Compensation Committee Report nor the Report of the Audit Committee included herein shall be deemed soliciting material or filed with the SEC and neither of them shall be deemed incorporated by reference into any prior or future filings made by us under the Securities Act or the Exchange Act, except to the extent that we specifically incorporate such information by reference.

In addition, this document includes several website addresses. These website addresses are intended to provide inactive, textual references only. The information on these websites is not part of this Proxy Statement.

Other Information

References in this Proxy Statement to “23andMe,” the “Company,” “we,” “our,” and “us” refer to 23andMe Holding Co., a Delaware corporation. References to “Fiscal 2022” refer to our fiscal year ended March 31, 2022, and references to “Fiscal 2023” refer to our fiscal year ending March 31, 2023. Further, references to “Fiscal 2021” refer to our fiscal year ended March 31, 2021, and references to “Fiscal 2020” refer to our fiscal year ended March 31, 2020.

23andMe was a special purpose acquisition company called VG Acquisition Corp. (“VGAC”) prior to the closing of the Business Combination on June 16, 2021. As used in the proxy statement, the term “Business Combination” represents the transactions contemplated by an agreement and plan of merger (the “Merger Agreement”) whereby a subsidiary of VGAC merged with and into 23andMe, Inc. For further information on the Business Combination, please refer to our Annual Report.

 

TABLE OF CONTENTS

 

 

Proxy Statement Summary

ABOUT 23ANDME

We are a mission-driven company dedicated to empowering customers to live healthier lives. Our mission is to help people access, understand, and benefit from the human genome. We believe that our premier database of genetic and phenotypic information crowdsourced from our millions of customers can revolutionize healthcare by enabling us to create insights into the origins of diseases, to use those insights to prevent, diagnose, and treat diseases, and to speed the discovery and development of novel therapies. We are committed to rigorous scientific, ethical, and privacy standards and to being one of the most trusted sources of genetic and health information.

We pioneered direct-to-consumer genetic testing, giving consumers unique, personalized information about their genetic health risks, ancestry, and traits. We are the only consumer genetic testing company with multiple U.S. Food and Drug Administration (“FDA”) authorizations for over-the-counter health reports. We were the first company to obtain FDA authorization for a direct-to-consumer genetic test, and we are the only company to have FDA authorization, clearance, or an exemption from premarket notification for all carrier status, genetic health risk, cancer predisposition, and pharmacogenetics reports offered to our customers. As of March 31, 2022, over 60 health reports were available to our customers in the U.S.

We acquired Lemonaid Health, Inc. (“Lemonaid” or “Lemonaid Health”) in November 2021 in an important step to achieve our goal of making personalized healthcare a reality. Lemonaid offers patients affordable and direct online access to medical care, from consultation through treatment, for a number of common conditions, using evidence-based guidelines and up-to-date clinical protocols to deliver quality patient care. When medications are prescribed by our medical professionals, patients can use our convenient online pharmacy for fast and free delivery.

CORPORATE CULTURE HIGHLIGHTS

Our Culture

Our Company is based on the foundation that all of us are linked by a shared thread, our DNA. We are all 99.5% genetically alike; our similarities are so much greater than any differences. It is a scientific fact.

We are on a journey to provide opportunity for all: our employees, our community, and our customers. Although that journey is far from over, we have been working tirelessly to make our product, our community, and our entire company more diverse, equitable, and inclusive.

 

Our Values

Recent Recognitions

We are proud to be recognized for our strong corporate culture and our employees’ workplace experience:

 

CORPORATE GOVERNANCE HIGHLIGHTS

Corporate Governance Practices

We consistently seek to follow best practices in corporate governance. Some highlights of our corporate governance practices include:

Board Refreshment and Qualifications

The independent directors of our Board of Directors (the “Board”) are charged with the responsibility of evaluating each director’s qualifications, performance, and ability to contribute productively to help ensure the appropriate composition and tenure of the Board.

While Board refreshment is an important consideration in the Board’s assessment of its composition, we believe the best interests of the Company are served by being able to take advantage of all available talent, and that the Board should not make determinations with regard to its membership solely on the basis of age. Accordingly, there are no established limits for retirement from the Board. Similarly, the Board does not believe it is appropriate to institute fixed limits on the tenure of directors because the Company and the Board would thereby be deprived of experience and knowledge. Accordingly, there are no established term limits for service on the Board.

Instead, our independent directors are committed to ensuring that the composition of the Board reflects the evolving needs of the Company. We believe that our directors bring to our Board a wide variety of skills, qualifications, and viewpoints that strengthen the Board’s ability to carry out its oversight role on behalf of our stockholders. The table below is a summary of the range of skills and experiences that each director brings to the Board, and which we find to be relevant to our business. Because it is a summary, it does not include all of the skills, experiences, and qualifications that each director offers, and the fact that a particular experience, skill, or qualification is not listed does not mean that a director does not possess it. All our directors exhibit high integrity, an appreciation for diversity of background and thought, innovative thinking, a proven record of success, and deep knowledge of corporate governance requirements and best practices.

 

 

Board Snapshot

* With the exception of Drs. Montgomery Rice and Hernández, who were appointed to the Board on June 16, 2021 and November 8, 2021, respectively, all of the directors were elected to the Board in connection with the Business Combination. As such, data relating to tenure includes board service on 23andMe, Inc. prior to the Business Combination.

Director Overview

 

Stockholder Engagement

We seek input from our stockholders and are committed to engaging in active and ongoing dialogues with our stockholders. In Fiscal 2022, we engaged with approximately 60% of our top ten actively-managed stockholders. As a matter of policy and practice, we foster and encourage engagement with our stockholders.

CORPORATE SOCIAL RESPONSIBILITY AND DE&I

Community Impact and Collaborations

We strive to positively impact communities affected by where we work and the work we do. We developed comprehensive Engagement Guidelines and a rubric for evaluating community organizations as we look to support more partnerships and events in the future. As we are committed to embedding diversity, equity, and inclusion (“DE&I”) in everything we do, these guidelines help to ensure that DE&I is a guiding tenet of our community involvement.

Environmental, Social, and Governance

Following the Business Combination, the Company has been working to create a meaningful Environmental, Social, and Governance (“ESG”) program. In Fiscal 2022, we took important steps to accomplish this.

Diversity, Equity, and Inclusion

We are committed to making our product, our community, and our entire company more diverse, equitable, and inclusive. We have developed four key pillars to hold our leadership, employees, and collaborators accountable:

 

EXECUTIVE COMPENSATION HIGHLIGHTS

For a detailed discussion of our executive compensation program, please see the “Compensation Discussion and Analysis” section of this Proxy Statement beginning on page 35.

Executive Compensation Practices

We intend to design our executive compensation program to (i) allow us to attract and retain highly qualified executive officers, and (ii) allow these executive officers the opportunity to own a portion of the Company. Consistent with this philosophy, we aim to attract and retain highly qualified, experienced executive officers who can make significant contributions to our long-term business success; reward executive officers for achieving business goals and delivering strong performance; and align executive incentives with stockholder value creation. The following compensation practices demonstrate how we believe our executive compensation program reflects best practices and reinforces our culture and values:

​	​	What We Do	​	​
​	​	Maintain an independent Compensation Committee ​	​	​
​	​	Retain an independent compensation consultant ​	​	​
​	​	Conduct an annual executive compensation review ​	​	​
​	​	Emphasize “at-risk” or variable compensation, including the implementation of a bonus program for NEOs in Fiscal 2023 ​	​	​
​	​	Establish multi-year vesting requirements ​	​	​
​	​	Maintain double-trigger change-of-control arrangements ​	​	​
​	​	Benchmark NEO pay against a reasonable set of similar-industry peer companies ​	​	​
​	​	Conservative compensation risk profile ​	​	​

​	​	What We Don’t Do	​	​
​	​	Excise tax gross-up payments ​	​	​
​	​	Derivatives or hedging of equity securities ​	​	​
​	​	Pledging of equity securities ​	​	​
​	​	Multi-year employment agreements with NEOs ​	​	​
​	​	Stock option re-pricing without stockholder approval ​	​	​
​	​	Executive retirement plans ​	​	​
​	​	Excessive perquisites ​	​	​
​	​	​	​	​
​	​	​	​	​

Fiscal 2022 Compensation Program Elements

The following table summarizes the compensation elements provided to our named executive officers (“NEOs”) in Fiscal 2022:

 

Recent Evolution of Our Executive Compensation Program

Following the completion of the Business Combination, the Board and the Compensation Committee have continued to review and evaluate our executive compensation practices and policies. In connection with our goals to align executive realizable pay outcomes to our performance over both the short- and long-term, in June 2022, the Compensation Committee adopted the Annual Incentive Plan, pursuant to which, beginning with the current fiscal year, Fiscal 2023, that began on April 1, 2022, the NEOs will be eligible to receive annual incentive bonuses in the form of cash or restricted stock units (“RSUs”), based upon the Company’s achievement of certain pre-established financial, operational, and strategic performance metrics. The Compensation Committee believes that the Annual Incentive Plan will serve as an important element of the Company’s executive compensation program, as the opportunity to earn variable, at-risk compensation will motivate and reward NEOs for achieving annual financial results. Moreover, the adoption of the Annual Incentive Plan represents the Compensation Committee’s commitment to a pay-for-performance compensation model.

VOTING MATTERS AND RECOMMENDATIONS

ADDITIONAL INFORMATION

Refer to the “Additional Information About Our Annual Meeting and Voting” section of this Proxy Statement beginning on page 67 for important information about the proxy materials, voting, the Annual Meeting, Company documents, communications, and the deadlines to submit stockholder proposals and other pertinent information.

 

PROPOSAL 1

Election of Directors

Our Board of Directors (the “Board”) currently consists of nine members and is divided into three classes, designated as Class I, Class II, and Class III. We are committed to strong corporate governance, and our Board regularly reviews our governance structure, including our classified board structure. Our Certificate of Incorporation divides our Board into three classes, with each class elected to serve a three-year term. Our Certificate of Incorporation also provides that the number of directors constituting each class will, as nearly as practicable, be equal. As a result, at each annual meeting of stockholders, approximately one-third of our directors are elected to serve for a three-year term. Our Board has periodically considered the continued appropriateness of this classified board structure and believes that our classified board structure provides important benefits, including:

•

Promoting Stability and Enhancing Institutional Knowledge. Our classified board structure enhances stability and continuity of leadership because our Board will always include directors with prior experience with our operating and regulatory environment, business, strategic goals, competition, trends, and risks.

​

•

Supporting Achievement of Long-Term Strategy. We believe that our classified board structure will help our Board maintain a long-term perspective, leading to decisions that are both in the long-term interests of our Company and stockholders and responsive to short-term needs and objectives.

​

•

Maximizing Stockholder Value. We believe that a classified board enhances our ability to achieve value for our stockholders in the event of an unsolicited takeover. Without a classified board, a potential acquirer could gain control of our Board at a single annual meeting by replacing a majority of directors with its own nominees without paying a premium to our stockholders.

​

•

Enhancing Director Independence. We believe that a classified board with three-year terms enhances non-management directors’ independence from special interest groups or other parties whose goals may not be in the best interests of all of our stockholders.

​

Our Board has nominated Roelof Botha, Patrick Chung, and Sandra Hernández for election to the Board at the Annual Meeting. If elected, each director nominee will serve as a Class I director with a term to expire at the 2025 annual meeting of stockholders. Each of the director nominees currently serves as a director of the Company.

The persons named as proxies will vote for each of the director nominees unless you instruct to withhold your vote for one or more of the director nominees. The director nominees have each agreed to serve if elected, and the Board has no reason to believe that any of the director nominees will be unavailable to serve. In the event that a director nominee is unable or declines to serve on the Board at the time of the Annual Meeting, then the persons named as proxies intend to vote for a substitute director nominee proposed by the Board, unless the Board decides to reduce the number of directors.

Under our Amended and Restated Bylaws (the “Bylaws”), the election of directors is determined by a plurality of the votes cast by the stockholders present in person or represented by proxy at the meeting and entitled to vote thereon. Votes may not be cumulated.

 

CLASS I DIRECTOR NOMINEES

Information regarding each director nominee is set forth below. In addition to the qualifications set forth below, we believe that each of the director nominees has a reputation for the highest character and integrity, works cohesively and constructively with the other members of our Board and with management of the Company, and demonstrates business acumen and an ability to exercise sound judgment.

 

 

CLASS II CONTINUING DIRECTORS

Information regarding each Class II director is set forth below. Each Class II Director has a term that expires at the 2023 annual meeting of stockholders. In addition to the qualifications set forth below, we believe that each of the Class II directors has a reputation for the highest character and integrity, works cohesively and constructively with the other members of our Board and with management of the Company, and demonstrates business acumen and an ability to exercise sound judgment.

 

 

CLASS III CONTINUING DIRECTORS

Information regarding each Class III director is set forth below. Each Class III Director has a term that expires at the 2024 annual meeting of stockholders. In addition to the qualifications set forth below, we believe that each of the Class III directors has a reputation for the highest character and integrity, works cohesively and constructively with the other members of our Board and with management of the Company, and demonstrates business acumen and an ability to exercise sound judgment.

 

 

Corporate Governance

The following section discusses our corporate governance, including the role of our Board and Board committees. Our Corporate Governance Guidelines, which were adopted to promote the effective functioning of the Board and Board committees and to reflect our commitment to high standards of corporate governance, are periodically reviewed by the Board to verify that they reflect the Board’s evolving corporate governance practices, policies, and procedures. In addition, we have a Code of Business Conduct and Ethics, which applies to all of the Company’s directors, officers, advisors, consultants, contractors, and employees. Our Corporate Governance Guidelines and Code of Business Conduct and Ethics are available on our corporate website at investors.23andme.com/corporate-governance/documents-charters. The Company will provide copies of its Corporate Governance Guidelines and Code of Business Conduct and Ethics to any stockholder, free of charge, upon written request to our Corporate Secretary at 349 Oyster Point Boulevard, South San Francisco, California 94080.

ROLE OF THE BOARD

The business and affairs of the Company are managed by, and under the direction of, our Board, which serves as the ultimate decision-making body of the Company, except for those matters reserved to our stockholders. Our Board is responsible for overseeing management, who is, in turn, responsible for the operations of the Company. Our Board’s primary areas of focus are strategy, risk management, corporate governance, corporate social responsibility, and compliance, as well as evaluating management and guiding changes as circumstances warrant. In many of these areas, significant responsibilities are delegated to Board committees, which are responsible for reporting to the Board on their activities and actions. Refer to the “Corporate Governance — Committees of the Board and Meeting Attendance” section of this Proxy Statement beginning on page 20 for additional information on the Board committees.

BOARD LEADERSHIP STRUCTURE

The current leadership structure of our Board consists of a combined Chair and Chief Executive Officer position that is held by Ms. Wojcicki. The Board has determined that combining the positions of Chair and Chief Executive Officer is most appropriate for the Company at this time, because Ms. Wojcicki in this combined position provides unified leadership and direction to the Company and valuable insight to the Board.

As the Chair, Ms. Wojcicki has the primary responsibility for presiding over meetings of the Board and meetings of stockholders. Additionally, the Chair is responsible for the agenda of all Board meetings and for previewing information sent to the Board as necessary and approving meeting schedules to assure that there is sufficient time for discussion of all agenda items.

Non-employee directors meet regularly in executive session without management present. Additionally, at least once a year, the Company schedules an executive session with only independent directors. The chair of the Audit Committee is responsible for presiding over such executive sessions.

BOARD INDEPENDENCE

Our securities are listed on Nasdaq, and we use the standards of  “independence” prescribed by rules set forth by Nasdaq. Under Nasdaq rules, a majority of a listed company’s board of directors must be comprised of independent directors. Under Nasdaq rules, a director will only qualify as an “independent director” if, in the opinion of that company’s board of directors, that person does not have a relationship that would interfere with the exercise of independent judgment in carrying out a director’s responsibilities. Our Board has determined that the following directors are independent under Nasdaq and SEC rules and regulations: Roelof Botha, Patrick Chung, Sandra Hernández, Neal Mohan, Valerie Montgomery Rice, and Peter Taylor. There are no family relationships among any of the current directors, director nominees, and executive officers of the Company.

 

Additionally, the Board has determined that each current member of the Audit Committee and Compensation Committee meets all applicable independence requirements under the Nasdaq rules and applicable SEC rules and regulations.

BOARD TENURE AND REFRESHMENT

It is the Board’s view that, while Board refreshment is an important consideration in the Board’s assessment of its composition, the best interests of the Company are served by it being able to take advantage of all available talent, and that the Board should not make determinations with regard to its membership solely on the basis of age. Accordingly, there are no established limits for retirement from the Board. Similarly, the Board does not believe it is appropriate to institute fixed limits on the tenure of directors because the Company and the Board would thereby be deprived of experience and knowledge. Accordingly, there are no established term limits for service on the Board.

At the same time, the Board recognizes that incumbent directors should not expect to be renominated automatically or continually. To this end, the Board is required to evaluate each incumbent director’s qualifications, performance, and ability to continue to contribute productively before nominating that director for an additional term. This evaluation includes a review of the results of the Board’s self-evaluation process and the Company’s needs at a particular point in time.

BOARD DIVERSITY

Our Board believes that, as a group, the directors should have diverse backgrounds and experiences. We believe that the members of the Board, as a group, have such diversity in terms of backgrounds and experiences, including varied race, ethnicity, nationality, gender, age, and other attributes. Our Corporate Governance Guidelines include a formal diversity policy that requires any search firm engaged to assist with director recruitment to include women and minority candidates in the pool from which the independent directors select director candidates.

The following diversity matrix sets forth information regarding the self-identification selections that our directors consented to be disclosed in the Proxy Statement:

 

The Board also believes that its members should be diverse in their qualifications and should represent a range of skills, areas of expertise, and depth of experience in areas that are relevant to and contribute to the Board’s oversight of the Company’s business, enterprise risks, and strategic priorities.

The Company has identified the following key experiences, qualifications, and skills from questionnaires completed by each of our directors. We believe that this reflects a balanced mix of experience, qualifications, and attributes of the Board as a whole. This high-level summary is not intended to be an exhaustive list of each director’s skills or contributions to the Board, and we believe that each of our directors has a broad array of knowledge, experience, and skills.

DIRECTOR NOMINATIONS

Identifying Director Candidates

Our independent directors are responsible for identifying and selecting qualified nominees for election or, in the case of a vacancy, appointment to the Board. Director candidates may come to the attention of the independent directors from a variety of sources, including current Board members, stockholders, and management. All candidates are reviewed in the same manner, regardless of the source of the recommendation.

The process for seeking and vetting additional director candidates is ongoing and is not dependent upon the existence of a vacancy on the Board. The Board believes that this ongoing pursuit of qualified candidates functions as an appropriate director succession plan. Pursuant to our Corporate Governance Guidelines, our independent directors have the authority to retain consultants and search firms to assist in the process of identifying and evaluating candidates. Any search firm that is engaged for a new director search must include women and minority candidates in its pool of candidates.

Director Time Commitment Considerations

In evaluating nominees to serve on our Board, the independent directors consider whether a director nominee has the ability to effectively fulfill his or her duties as a director of the Company, especially with regard to the director nominee’s expected time commitments with respect to his or her occupation and/or service as a director of other public companies.

Our Corporate Governance Guidelines set forth guidelines regarding the number of public company boards and audit committees on which members of our Board may serve. Unless the Board determines that the carrying out of a director’s responsibilities to the Company will not be adversely affected by the director’s other directorships:

 

•

Directors who also serve as executive officers of a public company may not serve on more than a total of two public company boards; and

​

•

Directors who are not executive officers of a public company may not serve on more than four public company boards in addition to the Company’s Board.

​

Additionally, if a member of the Company’s Audit Committee wishes to serve on the audit committees of more than a total of three public companies, the Board must approve such additional service, after determining whether such simultaneous service impairs the director’s ability to serve effectively on the Company’s Audit Committee, before the director accepts the additional position.

Our Board believes that each of our directors has demonstrated the ability to devote sufficient time and attention to Board duties and to otherwise fulfill the responsibilities required of our directors. However, we understand that certain of our stockholders and/or proxy advisory firms may deem Roelof Botha overboarded under their policies, as well as under our Corporate Governance Guidelines. After careful consideration, the Board believes that Mr. Botha has dedicated, and will continue to dedicate, sufficient time to carry out his duties as a member of the Board and the committees thereof. Additionally, the Board believes that his services with other public companies do not, and will not, negatively impact his service on our Board.

Stockholder Recommendations for Director Candidates

Stockholders may recommend director candidates for consideration by our independent directors by giving written notice of the recommendation to the Corporate Secretary of the Company at the Company’s principal executive offices at 349 Oyster Point Boulevard, South San Francisco, California 94080. In considering candidates recommended by stockholders, our independent directors will take into consideration the needs of the Board and the qualifications of each candidate. For additional information regarding stockholder nominations and recommendations, please see the “Stockholder Proposals and Nominations for the 2023 Annual Meeting” section of this Proxy Statement on page 66.

DIRECTOR QUALIFICATIONS AND CONSIDERATION OF DIRECTOR CANDIDATES

When considering candidates for the Board, our independent directors evaluate the entirety of each candidate’s credentials and do not have specific eligibility requirements or minimum qualifications that must be met by a candidate. Our independent directors do, however, believe that all members of the Board should have the highest character and integrity, a reputation for working constructively with others, sufficient time to devote to Board matters, and no conflict of interest that would interfere with performance as a director. As discussed above, all candidates are reviewed using the same criteria. Among the qualifications considered in the selection of candidates, the independent directors will consider the following attributes and criteria of candidates: experience, skills, expertise, diversity, personal and professional integrity, character, business judgment, time availability in light of other commitments, dedication, and conflicts of interest. Additionally, the independent directors consider a candidate’s independence. Depending on the current needs of the Board, our independent directors may weigh certain factors more or less heavily.

The Company believes that the Board as a whole should have competency in the following areas:

 

OTHER POLICES RELATED TO SERVICE AS A DIRECTOR

Directors Who Change Their Job Responsibility

When a director’s principal occupation or business association changes substantially from that which they held when originally invited to join the Board (including retirement), they will be required to tender a resignation as a director promptly to the Board. The Board will consider whether to accept or reject the tendered resignation, taking into consideration the effect of such change on the interests of the Company.

Directors Who Cease to be Independent

Each director is required to notify the Board of any change in circumstances that may put their independence at issue. If so notified, the Board will reevaluate, as promptly as practicable thereafter, such director’s independence. An independent director who ceases to qualify as such after election to the Board will be required to tender a resignation as a director promptly to the Board, which will consider whether to accept or reject the resignation, taking into consideration the effect of such change on the interests of the Company.

COMMITTEES OF THE BOARD AND MEETING ATTENDANCE

A total of five meetings of the Board were held during Fiscal 2022. During Fiscal 2022, the non-employee directors met alone without management present one time. The foregoing meeting counts do not include meetings held by the boards of directors of VGAC or 23andMe, Inc. prior to the Business Combination.

Each director attended 75% or more of the aggregate of  (i) the total number of meetings of the Board held during the time in which such director was a member of the Board and (ii) the total number of meetings held by all committees of the Board on which such director served during the period such director served as a member of such committee.

While we do not have a formal policy on director attendance at annual meetings, directors are expected to attend our annual meeting of stockholders. As this is our first annual meeting of stockholders, the Annual Meeting will be the first annual meeting of stockholders that our directors are eligible to attend.

Committees of the Board

The Board has two standing committees, each of which is described below. The responsibilities of each standing committee are set forth in a written charter. Each committee reviews its charter annually and makes recommendations for changes to the Board. The Board may form new committees, disband existing committees, and delegate additional responsibilities to a committee.

 

The Board’s standing committees and their current members are as follows:

​

Committee Chair

​

Member

​

Financial Expert

​

 

 

BOARD EVALUATION PROCESS

On an annual basis, the members of the Board and each Board committee conduct a confidential self-assessment of their performance. The Board believes it is important to assess its overall performance, the performance of the Board committees, and the individual performance of each director. In order to serve the best interests of our stockholders and position the Company for future success, the Board reviews its overall composition, including director tenure, Board leadership structure, diversity, and individual skill sets as part of the evaluation process.

BOARD ROLE IN RISK OVERSIGHT

The Board has primary responsibility for risk oversight and, in this capacity, oversees the management of risks related to the operation of our Company. The Board executes its oversight duties in part by assigning responsibility to committees of the Board to oversee the management of risks that fall within their respective areas. In performing this function, each Board committee has full access to

 

management, as well as the ability to engage advisors. The chair of each committee reports on the applicable committee’s activities at each Board meeting and has the opportunity to discuss risk management with the full Board at that time.

Cybersecurity Risk Oversight

Management of the Company manages cybersecurity as an enterprise risk and provides reports and updates to the Board. As part of the management of cybersecurity as an enterprise risk, we perform various internal and external information security risk assessments. These assessments include third-party penetration testing and secure code review, public bug bounty and vulnerability reporting programs, as well as independent audits of our information security management systems. Our employees are trained on cybersecurity matters on an ongoing basis. This training includes secure handling of customer and patient data, legally required privacy practices, and important emerging risks. We also conduct targets training throughout the year on topics such as physical security awareness, email phishing, etc.

ESG Risk Oversight

The Board has primary responsibility for ESG oversight and, in this capacity, oversees the management of risks related to ESG matters. Management is developing a robust ESG program and reports to the Board regarding such program and risks related to ESG. To that end, in Fiscal 2022, management formed a cross-functional ESG taskforce to lead the Company’s ESG efforts under the supervision of the Board.

 

COMMUNICATIONS WITH THE BOARD

Stockholders and other interested parties are invited to communicate with the Board, its committees, the Chair, or with non-employee and independent directors as a group by writing to: 349 Oyster Point Boulevard, South San Francisco, California 94080.

All such correspondence should identify the author as a stockholder or other interested party and clearly state the intended recipient. Communications received may be reviewed by the Corporate Secretary for the sole purpose of determining whether it is appropriate. In general, the following types of communication are not related to the duties and responsibilities of the Board and are therefore not appropriate: spam and similar junk mail and mass mailings, unsolicited advertisements or invitations to conferences or promotional material, product complaints, resumes or other job inquiries, and surveys.

CORPORATE SOCIAL RESPONSIBILITY AND DE&I

We are committed to good corporate citizenship, which means putting our employees first, striving to create positive impacts within our organization, and aiming to better the communities in which we conduct business. We strive to promote inclusion and diversity, enhance our community involvement, and foster our social stewardship.

Community Impact and Collaborations

We strive to positively impact communities affected by where we work and the work we do. We give back to the communities in which we live and work by providing support to organizations in the form of donations, volunteerism, and in-kind support. We developed comprehensive Engagement Guidelines and a rubric for evaluating community organizations as we look to support more partnerships and events in the future. As we are committed to embedding DE&I in everything we do, these guidelines help to ensure that DE&I is a guiding tenet of our community involvement.

In Fiscal 2022, we partnered with and supported:

 

ESG

Following the Business Combination, the Company has been working to create a meaningful and robust ESG program. In Fiscal 2022, we took important steps to accomplish this, including hiring a third-party ESG consultant to assist us in developing the Company’s ESG strategy and program. As discussed above, we also formed an ESG taskforce.

We are committed to being a transparent, socially responsible, and sustainable company. To that end, in Fiscal 2022, we began working on our first ESG report.

Human Capital Management

We strive to create a diverse, equitable, and inclusive workplace where employees can bring their whole self to work and activate their full potential. We believe that when our employees feel empowered to be their authentic self, we create a highly energized work environment which leverages diverse perspectives to create innovative solutions. Diverse perspectives and an inclusive culture produce a highly energized work environment and solutions driven community. We are committed to living this ideal in our workplace.

Workforce

As of March 31, 2022, we employed approximately 768 employees worldwide, of which approximately 728 were full-time employees and approximately 94% were U.S.-based employees.

DE&I

We strive to provide opportunity for all: our employees, our community, and our customers. We believe in welcoming and embracing various cultures and backgrounds, as we recognize the value of employing a workforce of unique and varying viewpoints and experiences.

As of March 31, 2022, 51% of our U.S. workforce are women and approximately 51% self-identify as ethnically or racially diverse.

 

Our DE&I strategy is focused on workplace, workforce, marketplace, and community, and is deeply ingrained in our organizational insights, employee data, and industry research and benchmarks. In Fiscal 2022, we achieved the following important milestones of our long-term DE&I strategy:

Hired a Director of Diversity, Equity, and Inclusion

​

Added three new Employee Resource Groups (“ERG”) to our existing seven groups to continue to provide a safe space for individuals to discuss issues that impact their shared community

​

Furthered our focus on supplier diversity by developing and implementing a supplier diversity survey to be utilized when sourcing new vendors for the organization

​

Utilized ERG members to make business decisions around product enhancements

​

Added two additional staff and resources to the DE&I Team

​

We aim to grow, learn, and shape our approach to DE&I for the betterment of our workforce and the communities we serve. To that end, we will continue to ensure we are creating an environment that welcomes uncomfortable conversations about issues that impact our workforce, customers, and the broader community.

Competitive Compensation and Benefits

We provide all benefit-eligible employees working at least 20 hours per week with a comprehensive benefit and compensation package, which includes:

Medical, dental, vision care, health savings account plus employer contribution, life insurance plus accidental death and dismemberment (“+ ADD”) coverage, voluntary life + ADD, short-term and long-term disability, a retirement plan with Company match, and a discount employee stock purchase program

​

Healthcare and dependent care flexible spending accounts, and commuter benefits plus a transit subsidy

​

Discounted gym membership, work-from-home internet stipend plus a one-time, work-from-home office-equipment reimbursement, and pet insurance

​

Employee assistance program, precision mental healthcare with free counseling sessions and unlimited digital mental health support, tuition reimbursement and student loan assistance, medical coverage for same and opposite gender domestic partners, company and floating holidays, paid volunteer time off and paid time off

​

Reimbursement of expenses for surrogacy, adoption, and infertility

​

Complimentary resource for personal legal questions and personal legal document generation and review, personal financial wellness platform, and access to fiduciary financial advisors

​

16 weeks of 100% paid parental leave following birth, adoption, or surrogacy for both parents

​

As a company, we offer postpartum and return-to-work assistance, which includes on-site lactation rooms and flexible work hours. For nursing moms who travel for work, we provide reimbursement for the shipment of breast milk back to their homes. We also offer back-up child and elder care. We offer one week of company paid family leave for employees who need to care for a family member who has a serious health condition and provide unlimited sick leave for COVID-related illness.

We firmly believe in investing in the health, well-being, and wellness of our employees. We provide complimentary health and fitness classes, including instructor-led yoga, pilates, cardio, strength, and meditation classes. We host individual and team wellness challenges that incorporate mental, emotional, physical, and nutritional elements of a healthy lifestyle. We provide an online navigation and advocacy service to find the right care and deal with medical bills questions.

 

Talent Development

Employee development is considered to be a strategic priority. We support employee growth and development by offering a variety of benefits. Our focus areas at this time are on leadership development, career development, DE&I and supporting hybrid teams/​leadership. Our flagship leadership program is for leaders at all levels (program, project, people, and/or team leaders), which ensures employees will be able to lead from any seat. During Fiscal 2022, over 16% of all employees participated in this four-month, cohort-based leadership program. We plan to continue to offer this program and support more employees through their leadership journey.

Other talent development benefits we offer are tuition reimbursement, department learning budgets, and internal mentorship programs. We recently launched our Company-wide BestYou@23andMe Framework, a performance management framework designed to support and foster career advancement. BestYou@23andMe encompasses three areas:

•

The What — job responsibilities, OKRs, Goals, DE&I;

​

•

The How — Core Values, DE&I, Team Behaviors; and

​

•

Impact — for DE&I, on the Business, on the Company, for your citizenship.

​

Our objective is to have a clear approach to career development, programs/benefits that allow employees to lead healthier lives, and the ability to participate in a community celebrating individuality. Our talent development programs are designed to support a work environment where employees are empowered to promote their unique perspectives.

RELATED PERSON TRANSACTIONS

Related Person Transaction Approval Policy

The Board has adopted the 23andMe Holding Co. Related Person Transaction Approval Policy (the “RPT Policy”). The RPT Policy applies to any transaction (each, a “Related Person Transaction”) in which:

•

23andMe or a subsidiary, partnership, joint venture, or other business association that is effectively controlled by 23andMe, directly or indirectly, is, was, or will be a participant in the transaction;

​

•

the amount of the transaction exceeds $120,000; and

​

•

a Related Person (as defined below) has, had, or will have a direct or indirect material interest in the transaction.

​

Under the RPT Policy, a “Related Person” is (i) any director or executive officer of 23andMe, (ii) any nominee for director (when the information called for by the rules and regulations of the SEC is being presented in a proxy or information statement related to the election of that nominee for director), (iii) any stockholder of 23andMe known to 23andMe to be the beneficial owner of more than 5% of any class of 23andMe’s voting securities (a “5% or Greater Holder”), and (iv) any immediate family member of any such person.

The Audit Committee is responsible for reviewing Related Person Transactions and approving, ratifying, revising, or rejecting Related Person Transactions in accordance with the RPT Policy. Company management is responsible for determining whether a transaction is a Related Person Transaction, including whether the Related Person has a material interest, based on a review of all facts and circumstances, which includes, without limitation, information provided to management in the annual director and officer questionnaires. Upon determination by management that a transaction is a Related Person Transaction and therefore requires review by the Audit Committee, the material facts respecting the Related Person Transaction and the Related Person’s interest in such Related Person Transaction are reported to the Audit Committee. The Audit Committee is entitled to rely on such determinations by management.

 

Fiscal 2022 Related Person Transactions

The following sets forth a summary of the Related Person Transactions during Fiscal 2022, all of which were approved by the Audit Committee in accordance with the RPT Policy.

 

Executive Officers

Information about Our Executive Officers

Our executive officers are appointed annually by our Board and serve at the pleasure of the Board. The following individuals are our current executive officers:

Anne Wojcicki

Information regarding Ms. Wojcicki is provided above under “Proposal 1 — Election of Directors.”

Steve Schoch

Mr. Schoch is our Chief Financial and Accounting Officer. He served as 23andMe, Inc.’s Chief Financial Officer from 2018 to June 2021. Prior to joining 23andMe, Inc., Mr. Schoch served as the Chief Executive Officer of Miramax Film NY, LLC (“Miramax”) from 2012 to 2017, while concurrently serving as Miramax’s Chief Financial Officer, a position he held beginning in 2010. From 2001 to 2010, Mr. Schoch held various senior financial positions at Amgen, Inc., including Corporate Controller and divisional Financial Vice President. He served as the Executive Vice President and Chief Financial Officer of eToys, Inc. from 1999 to 2001. Prior to eToys, Inc., Mr. Schoch held a variety of financial positions in the media industry, including at The Walt Disney Company and the Times Mirror Company. Mr. Schoch holds a B.S. in Civil Engineering degree from Tufts University and a M.B.A. degree from the Tuck School of Business Administration, Dartmouth College.

Kathy Hibbs

Ms. Hibbs is our Chief Administrative Officer and Secretary. She previously served as our Chief Legal and Regulatory Officer and Secretary from June 2021 to February 2022 and as the Chief Legal and Regulatory Officer of 23andMe, Inc. from 2014 to June 2021. Previously, Ms. Hibbs served as Senior Vice President and General Counsel of Genomic Health, Inc., a genetic research and cancer diagnostics company, from 2009 to 2014. Prior to that, from 2000 to 2009, Ms. Hibbs served as Senior Vice President and General Counsel of Monogram Biosciences Inc., and from 1995 to 1999, she was the Director of Legal Affairs at Varian Associates, Inc. followed by its successor, Varian Medical Systems, Inc. Ms. Hibbs served on the board of directors of Decipher Biosciences, Inc. (Nasdaq: DECI) until its acquisition. She also serves as a member of the Fast Company Impact Council and as a member of the board of directors of Cadex Genomics, Corp., a private company focused on molecular diagnostics tests to guide cancer treatment, and the board of directors of Sophia Genetics, a private AI platform company whose products are used by more than 1,000 healthcare institutions. Ms. Hibbs received her B.A. in Political Science from the University of California, Riverside, and her J.D. from the University of California, Hastings College of the Law.

Kenneth Hillan

Dr. Hillan is our Chief Therapeutics Officer. Dr. Hillan previously served as our Head of Therapeutics from June 2021 to February 2022 and as the Head of Therapeutics of 23andMe, Inc. from 2019 to June 2021. Previously, he served as the Chief Executive Officer of Achaogen, Inc. (“Achaogen”) from 2011 to 2019. Prior to that, from 1994 to 2011, he held progressively senior roles at Genentech, Inc., most recently serving as Senior Vice President and Head of Clinical Development and Product Development Strategy Asia-Pacific from 2010 to 2011 and Vice President, Tissue Growth and Repair, Product Development from 2006 to 2010. Dr. Hillan currently serves on the boards of directors of Sangamo Therapeutics, Inc. (Nasdaq: SGMO) and Zymeworks Inc. (NYSE: XYME).

 

He previously served on the boards of directors of Achaogen and Relypsa, Inc. (until it was acquired by Galenica AG in 2016). He holds an M.B. Ch.B. (Bachelor of Medicine and Surgery) degree from the Faculty of Medicine at the University of Glasgow, United Kingdom. He is a Fellow of the Royal College of Surgeons (FRCS, Glasg), and a Fellow of the Royal College of Pathologists (FRCPath). He has authored dozens of scientific publications and is a named inventor on almost 50 issued patents.

Paul Johnson

Mr. Johnson is our Chief Operating Officer, Consumer. He previously served as our Vice President, General Manager, Consumer from November 2021 to April 2022. Prior to joining 23andMe as part of the Lemonaid Health acquisition, Mr. Johnson founded and had numerous roles at Lemonaid Health, including as Chief Executive Officer from February 2018 until November 2021, Co-CEO from June 2015 until February 2018, and Chief Operating Officer from November 2013 until June 2015. From 2011 to 2013, Mr. Johnson was Head of Online at LloydsPharmacy and from 2010 to 2011, he was Zooplus AG’s Director, United Kingdom. He has a B.S., with honors, in IT and Business Management from the University of Worcester in the United Kingdom.

 

Director Compensation

The Board believes that compensation paid to our non-employee directors should (i) be competitive with our industry peers of comparable size and (ii) enable us to attract and retain individuals of the highest quality to serve as our directors. To align director interests with the long-term interests of our stockholders, non-employee directors receive a combination of cash and equity-based compensation for their service. Officers of the Company who are also directors do not receive any additional compensation for services rendered as a director.

Non-Employee Director Compensation Program

Effective upon the closing of the Business Combination, the Board approved the non-employee director compensation program (as amended, the “Non-Employee Director Compensation Program”). Under the Non-Employee Director Compensation Program, each non-employee director is eligible to receive annual cash retainers for their service on the Board and the Board’s committees (collectively, “Annual Board and Committee Fees”) as follows:

In addition, we reimburse reasonable expenses incurred by our non-employee directors in connection with attendance at Board or committee meetings. There are no per meeting attendance fees for attending Board meetings. The Annual Board and Committee Fees were paid quarterly, in arrears, for calendar quarters ended on or before June 30, 2022. Thereafter, the Annual Board and Committee Fees will be paid in a single payment as soon as administratively practical following each annual meeting of stockholders and will compensate each non-employee director for service through the date of the next annual meeting of stockholders.

Non-employee directors may elect on an annual basis to receive their Annual Board and Committee Fees in the form of RSUs, in accordance with the terms of the 23andMe Holding Co. RSU Conversion and Deferral Program for Directors (the “Deferral Program”).

In addition to cash retainers, under the Non-Employee Director Compensation Program, each non-employee director is entitled to an annual equity award of RSUs with a fair market value of  $175,000 (the “Annual Award”). Additionally, an individual who first becomes a non-employee director is entitled to receive an initial equity award of RSUs with a fair market value of  $350,000 (the “Initial Award”) on or as soon as reasonably practicable following the commencement date of such director service on the Board.

Each Annual Award vests in full on the earlier of  (a) the first anniversary of the date of grant or (b) the date of the subsequent year’s annual meeting of stockholders. Each Initial Award vests in full on the first anniversary of the date of grant; provided that any Initial Awards granted on or before December 31, 2021, vested in full on June 16, 2022. The vesting of all equity awards is subject to the non-employee director’s continued service to the Company through the date of vesting and the terms of the related award agreement. Notwithstanding the foregoing, all Annual Awards, Initial Awards, and Converted RSUs (as defined below) outstanding immediately prior to the effectiveness of a Change of Control (as defined in the 23andMe Holding Co. 2021 Incentive Equity Plan) shall be deemed to be vested and exercisable upon the effectiveness of such Change of Control.

Non-employee directors may elect to defer their Initial Award and/or Annual Award, or any RSUs awarded as a result of the director’s election to receive his or her Annual Board and Committee Fees in the form of RSUs (such RSUs, the “Converted RSUs”), in accordance with the Deferral Program.

 

Director Compensation Table

The following table summarizes the compensation paid to, awarded to, or earned by each individual who served as a non-employee director of the Company at any time during Fiscal 2022 for service on the Board.

​

(1)

Anne Wojcicki is not included in the table above since, as an officer of the Company, she receives no compensation for her services as a director of the Company. Ms. Wojcicki’s compensation is reflected in the “Summary Compensation Table” beginning on page 50 of this Proxy Statement.

​

(2)

Pursuant to policies of his employer, Mr. Lovell is unable to accept any compensation for his Board service.

​

(3)

Each of Messrs. Botha, Chung, Mohan, and Taylor and Drs. Montgomery Rice and Scheller were granted an Annual Award of RSUs covering 18,421 shares of Class A common stock on September 14, 2021. Dr. Hernández was granted an Annual Award of RSUs covering 18,115 shares of Class A common stock on December 3, 2021. Additionally, Mr. Taylor and Dr. Montgomery Rice were each granted an Initial Award of RSUs covering 36,842 shares of Class A common stock on September 14, 2021, and Dr. Hernández was granted an Initial Award of RSUs covering 36,231 shares of Class A common stock on December 3, 2021. The award grant date fair values shown in the table have been determined in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718, using the assumptions described in Note 14 to 23andMe’s Consolidated Financial Statements, which is included in our Annual Report.

​

As of March 31, 2022, each non-employee director held:

 

PROPOSAL 2

Non-Binding, Advisory Vote on the Frequency of Advisory Votes on Named Executive Officer Compensation (“Say-on-Frequency” Vote)

The Dodd-Frank Wall Street Reform and Consumer Protection Act requires that at least once every six years, companies ask their stockholders how often they would like to be presented with the “say-on-pay” advisory vote on named executive officer compensation: every year, every two years, or every three years. This non-binding, advisory vote is commonly referred to as a “say-on-frequency” vote.

The Board believes an annual frequency (i.e., one year) is the optimal frequency for the say-on-pay vote. A vote every year provides stockholders the opportunity to evaluate the Company’s compensation policies and procedures on a regular and more frequent basis. Specifically, because the Company makes its compensation decisions on an annual basis, we believe our stockholders should have an annual opportunity to provide advisory approval of these decisions. We also believe that an annual say-on-pay vote provides the highest level of accountability and direct communication with our stockholders.

Stockholders are not voting to approve or disapprove the Board’s recommendation. Instead, you may cast your vote on your preferred voting frequency by choosing any of the following four options with respect to this proposal:

•

One year;

​

•

Two years;

​

•

Three years; or

​

•

Abstain.

​

For the reasons discussed above, the Board recommends a vote for a frequency of  “one year” as set forth in the following resolution:

RESOLVED, that the advisory vote relating to compensation paid to the Company’s named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables, and narrative discussion, shall be conducted every ONE YEAR.

The Board and the Compensation Committee value the opinions expressed by stockholders and expect to take into account the outcome of the vote when considering the frequency with which future votes will be held regarding the Company’s executive compensation; however, as the say-on-frequency vote is advisory, it will not be binding on the Board and/or the Compensation Committee and may not be construed as overruling any decision by the Board or Compensation Committee.

In accordance with Section 14A of the Exchange Act, the next say-on-frequency vote will be held before or at our 2028 annual meeting of stockholders. In accordance with Instruction 4 to § 240.14A-21, which provides that a company that loses its emerging growth company status within two years of its initial public offering may postpone its initial say-on-pay vote until the third year following its initial public offering, we are not asking our stockholders to vote on a non-binding, advisory basis on the compensation paid to our named executive officers at the Annual Meeting. Accordingly, our first say-on-pay vote will occur at our 2023 annual meeting of stockholders.

 

Compensation Discussion and Analysis

This Compensation Discussion and Analysis provides important information on our executive compensation program and on the amounts shown in the executive compensation tables that follow. In this Proxy Statement, the term “named executive officers” or “NEOs” means the individuals named in the executive compensation tables that follow and who are listed below.

​

(1)

Ms. Hibbs served as our Chief Legal and Regulatory Officer from June 2021 to February 2022. In February 2022, Ms. Hibbs was promoted to Chief Administrative Officer.

​

(2)

Dr. Hillan served as our Head of Therapeutics from June 2021 to February 2022. In February 2022, Dr. Hillan was promoted to Chief Therapeutics Officer.

​

(3)

Mr. Johnson joined the Company in November 2021 in connection with the acquisition of Lemonaid Health. Mr. Johnson served as the Company’s VP, GM Consumer from November 2021 until he was promoted to Chief Operating Officer, Consumer in April 2022.

​

EXECUTIVE SUMMARY

Fiscal 2022 Business Highlights

Fiscal 2022 was a consequential year for 23andMe with several major milestones, including our entry into the public markets, raising $560 million, our acquisition of Lemonaid Health, and our first wholly-owned cancer drug entering a Phase 1 clinical trial. We believe these milestones, building on the foundation of genomic data and expertise, will enable us to use the power of genomic information to revolutionize the diagnosis, prevention, and treatment of human disease.

During Fiscal 2022, we continued to make progress in our mission to help people access, understand and benefit from the human genome. In Fiscal 2022, we increased the number of genotyped customers to 12.8 million. With our Personal Genome Service® (“PGS”), which now has over 80 health reports available to customers in the U.S., we have helped millions of people access and understand the human genome. More than 80% of our U.S. Health + Ancestry Service customers receive a genetically meaningful result. With the integration of Lemonaid Health’s telehealth and digital pharmacy services, the 23andMe Consumer business will be working to build genomic health services that focus on prevention and wellness to help people further benefit from the human genome.

Additionally, our Therapeutics group achieved a major milestone in Fiscal 2022: progressing 23andMe’s first wholly-owned cancer drug into a Phase 1 clinical trial. This is a tangible example of how we are using the world’s largest recontactable database of genetic and health survey information to speed the discovery and development of novel therapies. Our therapeutics pipeline now has more than 50 active programs with two in Phase 1 clinical trials. Studies have shown that therapeutic programs with a human genetic foundation are more than twice as likely to succeed. These unique insights help us understand human disease to deliver effective therapeutics. The power of genetics will also inform the recruitment of participants in clinical trials, increasing the odds of success to develop drugs tailored to patients’ needs. This is yet another way we are working to help people benefit from the human genome.

With the combination of our PGS, our new genomic health services, and our efforts to develop new therapeutics based on genetically validated targets, we believe we are poised to accomplish the full measure of our mission.

Recent Evolution of Our Compensation Program

Following the completion of the Business Combination, the Board and the Compensation Committee have continued to review and evaluate our executive compensation practices and policies. In connection with our goals to align executive realizable pay outcomes to our performance over both the short- and long-term, in June 2022, the Compensation Committee adopted the Annual Incentive Plan,

 

pursuant to which, beginning with the current fiscal year, Fiscal 2023, that began on April 1, 2022, the NEOs will be eligible to receive annual incentive bonuses in the form of cash or RSUs, based upon the Company’s achievement of certain pre-established financial, operational, and strategic performance metrics. The Compensation Committee believes that the Annual Incentive Plan will serve as an important element of the Company’s executive compensation program, as the opportunity to earn variable, at-risk compensation will motivate and reward NEOs for achieving annual financial results. Moreover, the adoption of the Annual Incentive Plan represents the Compensation Committee’s commitment to a pay-for-performance compensation model.

Fiscal 2022 Compensation Program Elements

The following table summarizes the compensation elements provided to our NEOs in Fiscal 2022:

​

(1)

In connection with the acquisition of Lemonaid Health, the Company agreed to retain the 2021 LBP (as defined below) and pay out any annual cash incentive awards earned by the participants based on Lemonaid Health’s achievement of certain pre-determined performance goals during Calendar Year 2021 (as defined below). Accordingly, Mr. Johnson’s compensation also included an annual cash incentive award.

​

Pay-for-Performance Compensation Model

As discussed above, we are committed to aligning the outcomes of our executive compensation programs with the Company’s performance and creation of long-term stockholder value. For our NEOs, the majority of their total compensation opportunity is at-risk, or contingent upon the appreciation in the market price of our Class A common stock. This is especially true with respect to our CEO’s compensation. As discussed below, Ms. Wojcicki receives minimal cash compensation, with the overwhelming majority of her compensation being in the form of stock options, so that the value of her compensation is almost entirely based on Company performance.

As depicted below, in Fiscal 2022, aggregate compensation for Ms. Wojcicki was approximately 0.2% fixed cash compensation (base salary) and 99.8% variable compensation (based on the grant date fair value of Ms. Wojcicki’s long-term equity compensation). Other NEOs’ compensation consisted of, on average, approximately 13.7% fixed cash compensation (base salary) and approximately 85.9% variable compensation (based on the grant date fair value of their long-term equity compensation). The chart below reflects details of the equity compensation for Ms. Wojcicki and the other NEOs (on average) in Fiscal 2022.

 

Say-on-Pay Results and Stockholder Feedback

As discussed in Proposal 2, in accordance with Instruction 4 to § 240.14A-21, which provides that a company that loses its emerging growth company status within two years of its initial public offering may postpone its initial say-on-pay vote until the third year following its initial public offering, we are not asking our stockholders to vote on a non-binding, advisory basis on the compensation paid to our named executive officers at the Annual Meeting. Accordingly, our first say-on-pay vote will occur at our 2023 annual meeting of stockholders. Thereafter, the Board and the Compensation Committee will review and consider the outcome of the “Say-on-Pay” vote in designing our executive compensation program and determining executive compensation.

Additionally, we are committed to engaging in active and ongoing dialogues with our stockholders and take stockholder feedback into consideration when reviewing and structuring our executive compensation programs. In Fiscal 2022, we engaged with approximately 60% of our top ten actively-managed stockholders.

EXECUTIVE COMPENSATION PHILOSOPHY, OBJECTIVES, AND HIGHLIGHTS

Key Objectives of the Compensation Program

We design our executive compensation program to (i) allow us to attract and retain highly qualified executive officers, and (ii) allow these executive officers the opportunity to own a portion of the Company. We believe that our ability to ensure that our executive officers are engaged and productive depends upon how we structure our compensation program. In addition, for us to be appropriately positioned to attract new talent, we must be prepared to be, and be perceived as, an employer that offers competitive compensation. We believe that providing our executive officers an opportunity to be partial owners in our business fosters their active engagement in our success, strengthens our retention objectives, and aligns their long-term interests with those of our stockholders. Consistent with this philosophy, we have designed our executive compensation program to achieve the following primary objectives:

•

attract and retain highly qualified, experienced executive officers who can make significant contributions to our long-term business success;

​

•

reward executive officers for achieving business goals and delivering strong performance; and

​

•

align executive incentives with stockholder value creation.

​

Executive Compensation Best Practices

We are committed to developing an executive compensation program that reflects best practices and reinforces the Company’s culture and values. The following compensation practices demonstrate how we believe our executive compensation program reflects best practices:

​	​	What We Do	​	​
​	​	Maintain an independent Compensation Committee ​	​	​
​	​	Retain an independent compensation consultant ​	​	​
​	​	Conduct an annual executive compensation review ​	​	​
​	​	Emphasize “at-risk” or variable compensation, including the implementation of a bonus program for NEOs in Fiscal 2023 ​	​	​
​	​	Establish multi-year vesting requirements ​	​	​
​	​	Maintain double-trigger change-of-control arrangements ​	​	​
​	​	Benchmark NEO pay against a reasonable set of similar-industry peer companies ​	​	​
​	​	Maintain a conservative compensation risk profile ​	​	​

​	​	What We Don’t Do	​	​
​	​	Excise tax gross-up payments ​	​	​
​	​	Derivatives or hedging of equity securities ​	​	​
​	​	Pledging of equity securities ​	​	​
​	​	Multi-year employment agreements with NEOs ​	​	​
​	​	Stock option re-pricing without stockholder approval ​	​	​
​	​	Executive retirement plans ​	​	​
​	​	Excessive perquisites ​	​	​

 

DETERMINATION OF EXECUTIVE COMPENSATION

Following the Business Combination, the Compensation Committee was charged with the responsibility of determining and administering the Company’s executive compensation program, as discussed below.

Role of the Compensation Committee

Our Board has delegated authority to the Compensation Committee to oversee and approve the overall compensation program for our executive officers. In making its decisions, the Compensation Committee takes into consideration a variety of factors, including the recommendations of management and the independent compensation consultant. The Compensation Committee has the authority to exercise discretion with respect to executive compensation awards and performance metrics and may authorize adjustments to targets and/or awards as it deems necessary or appropriate.

Role of Executive Officers

Our Chief Executive Officer, Ms. Wojcicki, provides input and makes recommendations to the Compensation Committee regarding our executive compensation program. She also reports to the Compensation Committee on individual NEO performance and provides recommendations regarding each NEO’s compensation (except with respect to her own compensation).

At the invitation of the Compensation Committee, Ms. Wojcicki may attend the Compensation Committee’s meetings; however, she does not attend any Compensation Committee meetings when her own compensation is being discussed or determined. The Company’s other executive officers and members of senior management also periodically attend meetings to present information, participate in discussions, and answer questions related to our executive compensation plans. No executive officer participates directly in the final deliberations and decisions regarding his or her own compensation. The Compensation Committee considers managements’ recommendations and exercises independent judgment in making any final decisions to approve NEO compensation.

Role of Compensation Consultant

As provided in its charter, the Compensation Committee has the sole authority to hire, terminate, and approve fees for compensation consultants, outside legal counsel, and other advisors as it deems necessary to assist in the fulfillment of its responsibilities. The Compensation Committee retained Compensia, Inc. (“Compensia”), a management consulting firm, as its independent compensation consultant for Fiscal 2022. Compensia provides research, market data, survey, proxy information, and design expertise in developing executive and director compensation programs. As requested by the Compensation Committee, Compensia provided the Compensation Committee with market data from proprietary surveys and databases and publicly available information to consider when making compensation decisions for the NEOs.

The primary Compensia executive compensation consultant attended several of the Compensation Committee meetings in Fiscal 2022 and advised the Compensation Committee on principal aspects of executive compensation, including the competitiveness of program design and award values and specific analyses for the NEOs and other executive officers. Compensia reports directly to the Compensation Committee, and the Compensation Committee reserves the right to replace the independent compensation consultant or hire additional consultants or advisers at any time. The Compensation Committee reviewed its relationship with Compensia and determined that there are no conflicts of interest pursuant to applicable SEC and Nasdaq requirements. Compensia did not provide any additional services unrelated to executive or director compensation consulting to the Company in Fiscal 2022.

Compensation Benchmarking and Setting Executive Compensation

Generally, the Compensation Committee targets NEO pay within the peer market range, subject to adjustment based on the Compensation Committee’s assessment of the Company’s and the NEO’s performance. The criteria used to select companies for the Fiscal 2022 proxy peer group (the “Peer Group”) included:

•

Public Ownership — Public companies only (job scope and pay models are typically different at private companies and private companies rarely disclose executive compensation)

​

 

•

Industry — Typically reflects potential labor market competition and jobs of similar scope; peers generally reflect healthcare technology, biotechnology, and broader technology companies identified by the Company as key industry competitors, with a focus on companies that are consumer-oriented and have technology-enabled products or services

​

•

Revenue — Revenue has the greatest influence on cash compensation levels; peers generally align between 0.5x to 2.5x our revenue at the time of our annual peer group update

​

•

Market Capitalization — Market capitalization has the greatest influence on equity compensation levels; peers generally align between 0.3x to 3.0x our market capitalization at the time of our annual peer group update

​

•

Secondary Factors — Screened for companies that are comparable in stage/time from initial public offering, based in California, and/or identified as key labor competitors (particularly at the executive level)

​

The Compensation Committee evaluated the actual pay of the NEOs with pay data drawn from proxy-disclosed pay information for the following publicly traded companies, which comprised the Peer Group:

For Fiscal 2022, the compensation paid to the NEOs was reviewed relative to compensation paid by the Peer Group to named executive officers of similar title and responsibility. By reviewing this publicly available information, as summarized for the Compensation Committee by Compensia, the Compensation Committee was able to analyze the market competitive pay for each NEO position. The Compensation Committee reviews each NEO’s compensation relative to the other NEOs, taking into account each NEO’s scope of tenure, existing equity holdings, responsibility, performance, and impact on our business results.

Additionally, there are several qualitative factors that are considered when assessing the reasonableness and competitiveness of the NEO compensation beyond benchmarked industry data. Other factors that are considered include:

•

Each NEO’s skills, experience, and tenure;

​

•

The NEO’s role and level of responsibility and influence to further the Company’s success against objectives and strategy;

​

•

Internal pay equity considerations;

​

•

Existing equity holdings and the strength of forward-looking retention;

​

•

NEO and overall team performance assessed by the CEO (aside from her own, which is assessed by the Compensation Committee); and

​

•

The competitive market for each NEO’s executive position and role, the cost and disruption to the business if such NEO would need to be replaced, and the scope and skills required of the role.

​

BASE SALARY

Base salaries are intended to provide a fixed component of cash compensation sufficient to attract and retain an effective management team, when considered in combination with the other components of the executive compensation program. In general, we seek to provide a base salary level designed to reflect each NEO’s position and scope of responsibility and accountability.

The Compensation Committee annually reviews the base salaries of the NEOs. The base salaries of the NEOs are determined based upon the individual NEO’s current base salary, job responsibilities, tenure, internal pay equity considerations, role in executing business strategy, individual performance, the competitive market for the NEO’s role, and base salaries for comparable positions within the

 

Peer Group. Based on the foregoing considerations, on February 9, 2022, the Compensation Committee approved certain merit-based increases to the base salaries of Messrs. Schoch and Johnson, Dr. Hillan, and Ms. Hibbs; such increases were effective March 1, 2022.

In light of her equity interests in the Company, Ms. Wojcicki historically has received base salary compensation significantly lower than that of the other NEOs. Base salaries in effect during Fiscal 2022 are shown in the table below:

​

(1)

Effective January 1, 2022, Ms. Wojcicki’s base salary was increased from $58,240 to $62,400 to comply with applicable California’s minimum salary laws.

​

(2)

Mr. Johnson joined 23andMe in connection with the acquisition of Lemonaid Health in November 2021; his actual base salary received in Fiscal 2022 is shown in the “Summary Compensation Table” on page 50 of this Proxy Statement.

​

(3)

On February 9, 2022, the Compensation Committee approved increases to the base salaries of Messrs. Schoch and Johnson, Dr. Hillan, and Ms. Hibbs; such increases were effective March 1, 2022.

​

LONG-TERM EQUITY

We provide annual long-term equity awards to the NEOs to promote retentions and to encourage the NEOs to create and sustain stockholder value. The realized value of our equity awards bears a direct relationship to our stock price and therefore helps us to incentivize our NEOs to create value for our stockholders by aligning the interests of our NEOs with those of our stockholders.

Annual Award Mix and Target Value

The Compensation Committee periodically evaluates its recommended NEO equity mix, considering factors such as need for durable retention and to minimize share usage. Except with respect to Ms. Wojcicki, the Compensation Committee approved annual long-term equity awards to our NEOs for Fiscal 2022 in the form of 50% time-based restricted stock units (“RSUs”) and 50% stock options.

Ms. Wojcicki’s annual long-term equity award consisted of 100% stock options. The Compensation Committee determined that Ms. Wojcicki’s annual equity award should be in the form of stock options only because stock options align entirely with stockholder interests, in that Ms. Wojcicki will profit only if the stock price increases to a level that is above the market price on the grant date. Additionally, based on Ms. Wojcicki’s significant prior investments via stock purchases, the Compensation Committee believes periodic awards of stock options provide the Company with the opportunity to receive material funding from future option exercises.

The following sets forth the aggregate target value of the annual equity awards for each NEO.

​

(1)

Ms. Wojcicki’s annual equity award was not based on a target dollar value. See below for a description of how the Compensation Committee determined Ms. Wojcicki’s annual equity award.

​

 

Ms. Wojcicki’s annual equity award was not based on a target dollar value. Instead, the Compensation Committee decided to grant to Ms. Wojcicki options to purchase 7.5 million shares of Class A common stock. In making this determination, the Compensation Committee considered a number of factors, including, among others: (i) Ms. Wojcicki’s total annual pay level relative to that of the CEOs of the Peer Group; (ii) the fact that she does not receive market-based annual cash compensation; and (iii) the importance of ensuring her retention and long-term commitment to increasing stockholder value. Additionally, the Compensation Committee noted that having the annual grant be in the form of 100% stock options was more rigorous than the Peer Group’s CEO annual equity mix, where 95% of the peer companies granted their CEOs time-based RSUs and only one peer company’s CEO grant was entirely comprised of stock options, and that the realizable pay for Ms. Wojcicki’s annual grant would be entirely tied to any growth in market value. Ultimately, this resulted in an annual equity grant that had a grant date fair value between the 75th and 90th percentile of the Peer Group, which the Compensation Committee felt was appropriate especially in light of the grant being entirely in the form of stock options.

Fiscal 2022 Restricted Stock Units

Except with respect to Mr. Johnson’s annual RSU award, time-based RSUs granted to the NEOs in Fiscal 2022 vest equally in 1/16 quarterly installments commencing on May 20, 2022. The vesting of the RSUs is subject to continued service for the Company, the terms and conditions of the applicable award agreement, and applicable tax withholding obligations. Each RSU represents the contingent right to receive one share of Class A common stock of the Company.

​

(1)

The number of RSUs granted to each NEO was determined by dividing (i) the NEO’s RSU award target value (ii) by $7.01 (the average closing price of the Class A common stock for all trading days occurring during the 90-consecutive-calendar-day period preceding (but excluding) the grant date).

​

(2)

The RSUs were granted on February 9, 2022, and amounts shown represent a grant date fair value of  $5.00.

​

(3)

Mr. Johnson’s RSUs vest 50% on February 20, 2025 and 50% on February 20, 2026. Mr. Johnson’s RSUs are subject to a different vesting schedule in light of the New Hire Award (as defined below) and to further encourage his retention.

​

Fiscal 2022 Stock Options

With the exception of Ms. Wojcicki’s and Mr. Johnson’s annual stock option awards, the stock options granted to the NEOs in Fiscal 2022 vest equally in 48 monthly installments commencing on March 9, 2022. The vesting of the options is subject to continued service for the Company, the terms and conditions of the applicable award agreement, and applicable tax withholding obligations.

​

(1)

With respect to Messrs. Schoch and Johnson, Dr. Hillan, and Ms. Hibbs, the number of stock options granted to each NEO was determined by dividing (i) the NEO’s stock option award target value (ii) by $3.29 (the option value on the grant date based on the Black-Scholes-Merton option valuation methodology).

​

(2)

With respect to Messrs. Schoch and Johnson, Dr. Hillan, and Ms. Hibbs, the stock options were granted on February 9, 2022, and amounts shown represent a grant date fair value of  $3.29. With respect to Ms. Wojcicki, the stock options were granted on March 29, 2022, and the amount shown represents a grant date fair value of  $2.65.

​

 

(3)

Ms. Wojcicki stock options vest equally in 1/48 monthly installments commencing on May 1, 2022.

​

(4)

Mr. Johnson’s stock options vest 50% on February 9, 2025, and 50% on February 9, 2026. Mr. Johnson’s stock options are subject to a different vesting schedule in light of the New Hire Award (as defined below) and to further encourage his retention.

​

New Hire Equity Award to Mr. Johnson

As discussed above, Mr. Johnson joined the Company in November 2021 in connection with the acquisition of Lemonaid Health. In connection with the commencement of his employment and to encourage his retention and long-term commitment to the Company, pursuant to his offer letter, Mr. Johnson was granted a new hire equity award with an aggregate target value of  $6,200,000 (the “New Hire Award”). The New Hire Award was in the form of 50% RSUs and 50% stock options and vests over a four-year period, with an initial 25% vesting on November 1, 2022, and the remainder vesting on a quarterly basis thereafter. The vesting of the New Hire Award is subject to continued service for the Company, the terms and conditions of the applicable award agreement, and applicable tax withholding obligations.