Our globally-scaled, highly secure cloud-based platform manages more than 270 million videos recorded per day, across 31 million devices worldwide in order to provide users real-time visibility, personalized insights and direct access to emergency services for total peace of mind at home, at work or on-the-go.

Our total addressable market consists of individuals and business owners who use app-based services to protect people and property. In the residential market, Arlo has consistently delivered award-winning solutions for homeowners, renters, vacation property owners, and other property managers to watch over their premise with app-based self-monitoring services, powered by AI- and CV-based analytics, or professionally monitored services that provide 24/7 expert protection. Beyond the home, we have seen adoption of our cellular enabled (LTE) services products in a variety of use cases outside of Wi-Fi networks, such as neighborhood watch, construction site monitoring, wildlife and outdoor trail surveillance and public event monitoring. We believe the small business, government and direct home monitoring channels provide growth areas for us in addition to our retail and e-commerce presence. Our Software as a Service (“SaaS”) solution includes Arlo Secure, a subscription plan that provides time-critical AI- and CV-based analytics, direct access to emergency services, and professional monitoring services; Arlo Safe, a personal safety app for on-the-go protection, including family tracking, direct emergency response, and automatic crash detection, and Arlo SmartCloud, a solution that delivers highly efficient and secure enterprise cloud services at scale. We believe we are well positioned to extend our current reach to the growing markets that deliver security solutions both within and beyond the home as we continue to launch new products and services on our connected smart security platform.

Over the past several years, we have been focused on growing our subscription-based business through expanded data and application-driven solutions offerings. This transition has been guided by our desire to enhance the customer experience and maximize the value proposition that we provide our customers. By transforming our business model and solutions portfolio to focus on data-driven insights and the application experience, we offer customers the value and convenience of a consolidated full stack solution, while providing stockholders with the confidence that accompanies an increasingly recurring and predictable revenue model. We believe the industry is just beginning the mass-market phase which provides a large runway for growth by efficiently executing on the delivery of smart-security solutions to homes and businesses.

We are driven to enhance our employee experience. We believe that in a customer centric organization such as Arlo, the employee experience and the customer experience are directly correlated. We know that great teams make great products, so we nurture our talent through carefully crafted processes that drive culture and purpose at Arlo. We have architected a value proposition for our employees that leads to greater employee engagement. We strive to build a talent rich organization based on key connect and protect principles that enable our employees to deliver business results. These principles together formulate our culture code and include tenets such as, to continually connect:

We believe that talent is a driver of competitive advantage for Arlo. Our talent strategy is our method of linking leadership, talent, and performance to sustain our development and success. Our leadership is fully invested into our talent strategy which provides every employee with a thriving inclusive experience and career, which is further underpinned by five key principles.

As we continue to develop the Arlo workforce for the future, we translate these pillars into our performance management and reward strategies. We aim to have the right people in the right roles at the right time to drive our business outcomes, ensuring top diverse talent for our critical roles. We strive to attract and retain exceptionally talented, diverse, and ethical employees, and we are proud of the culture that we have built.

As we continue to shape our desired experience in line with the promised employee value proposition and desired culture to drive engagement and high performance, our talented employees, located throughout the United States, Canada, Australia, Taiwan, India, and Ireland, communicate, connect, and work together to deliver a world-class end-to-end smart security solution. We believe that we maintain a great working relationship with our employees, as evidenced by our regular employee engagement surveys, and we have not experienced any material labor disputes. As of December 31, 2023, we had a total of 363 full-time employees, of which 64% were based in the United States and 36% were based in other global regions.

Diversity, Equity and inclusion (“DEI”) are deeply embedded into our culture. There are initiatives and interventions integrated into every aspect of our talent strategy. We plan to increase our organization’s diversity by ensuring attention to DEI in the employee lifecycle, from attraction to recruitment, selection, promotion, and development. We share our DEI goals and plans with our employees and are transparent in our sharing of progress and challenges.

Arlo is proud to be an equal opportunity workplace. We always strive to treat all employees and job applicants based on merit, qualifications, personality, and talent, and to draw from a diverse candidate pool as we recruit new talent across all levels. We deeply connect people from all backgrounds and beliefs and strive for a truly inclusive and collaborative working environment.

We have taken action alongside a group of more than 2,500 businesses in a collective commitment to make progress towards advancing diversity and inclusion in our workplace, communities, and country. We value diversity and integrate it into our business by striving to ensure that our company is representative of the customers we serve and that inclusion is at the core of our workplace culture. Our Senior Vice President of Human Resources is an active member of the 30 percent club, a business campaign to boost female representation at Board and C-Suite level in the World’s biggest companies. Our Chief Executive Officer has signed the CEO Action for Diversity & Inclusion pledge, the largest CEO-driven business commitment to advance diversity and inclusion within the workplace in order to underscore our commitment. By making the pledge, we go beyond accepting diversity and are committed to the following actions:

For the fourth year running, we are partnering with the GEM Consortium (“GEM”). GEM connects highly qualified students from underrepresented groups to STEM graduate programs with much-needed financial support that is often the deciding factor in pursuing graduate education. We have welcomed several GEM interns at Arlo, where they have contributed to and learned from our core stem functions such as data engineering, security, product management, and software and hardware engineering.

We host several events and days of observance with guests and internal speakers at Arlo. Each year, for example, we hold a “Month of Understanding” with speakers on key diversity and inclusion topics. These events provide a platform for dialogue and an opportunity for every employee to learn, discuss, and appreciate differences between colleagues as we grow to drive greater inclusion at Arlo and truly reflect the customers we serve. We invite employees to share with us, the ways in which the observances of culture, heritage, race, faith, belief, and other associations that are listed on our calendar of initiatives are meaningful to them, their families, or communities. In 2023, the following are some of the observances we recognized at Arlo: AAPI Heritage Month, Latino Heritage Month, Pride, International Women’s Day, Earth Hour, International Day of Persons with Disabilities, Yom Kippur, Lunar New Year, Black History Month, Ramadan, World Day of Social Justice, Mental Health Awareness, International Men’s Day, Diwali, Thanksgiving, and Christmas. In 2024 we added Dr Martin Luther King Day to our list of annual paid holidays.

We continually strive to be a deeply inclusive employer with diversity reflected in our teams. We encourage employees to truly be themselves and thrive in an environment where their voices matter, differences are understood and valued, and where they are supported to express their unique ideas openly. We aim to foster a highly engaged and energized workplace, where everyone is treated with dignity and respect and is excited to achieve more.

In addition to incorporating Inclusion into our performance review process, we are also diversifying interview teams by adding a greater number of employees into the decision-making process. Training on bridging diversity gaps has also been provided to employees to further drive an inclusive culture and build upon employee engagement.

Arlo’s allies and employee resource groups play a vital role in fostering DEI. The groups are led by employees and supported with executive sponsors. They serve as a safe place for groups to discuss and share on topics that are important to group members with shared experiences. They enhance employee engagement by providing platforms for connection and support and offer professional development through training and external speakers.

We believe that compensation should be competitive and equitable and should enable employees to share in our success while motivating them to achieve the right goals for our customers and stakeholders. We are committed to ensuring that our employees’ hard work and performance will be rewarded appropriately and linked to both group and personal success. We work hard to ensure the connection between our wins and those of our employees. We recognize our people are most likely to thrive when they

We are committed to protecting our team members everywhere we operate. We identify potential workplace risks in order to develop measures to mitigate possible hazards. We support employees with general safety, security and crisis management training, and by putting specific programs in place for those working in potentially high-hazard environments. Additionally, we work to protect the safety and security of our team members, visitors and customers through our global security team.

We believe that open and honest communication among team members, managers and leaders helps create a collaborative work environment where everyone can contribute, grow and succeed. Team members are encouraged to approach their managers with questions, feedback or concerns, and we conduct regular surveys that gauge employee sentiment in areas like career development, manager performance and inclusivity.

Arlo has an internal employee engagement platform we call ‘Arlo Connect’. This is an employee experience platform that simplifies internal communication and drives engagement.

We have seen significant improvements in our Employee Net Promoter score over the last number of years as we listen to our employees and make incremental improvements that align their contributions with the needs of our customers.

Arlo has been a finalist for a considerable number of prestigious awards which broadly cover the talent agenda, including Diversity Equity and Inclusion and Leadership Development.

We believe responsible and sustainable business practices support our long-term success. As a company, we are deeply committed to protecting and supporting our people, our environment, and our communities. We continually seek to improve and enhance our governance programs. This year, we are pleased to share with our stockholders an update on our Environmental, Social and Governance (“ESG”) efforts. While these practices help keep our communities and our environment vibrant and healthy, they also lead us to more efficient, resilient, and profitable business operations and help us to assist our customers in meeting their ESG targets. We believe that being an industry leader is not just about having talented employees or innovative products, but it is also about doing business the right way, every day. That is why our commitment to sound Corporate Social Responsibility (“CSR”), is deeply rooted in all aspects of our business.

We are committed to providing customers with high quality products, and to conducting operations in a socially responsible, ethical, and sustainable manner to protect the environment and promoting compliance with all relevant regulations, customer specifications, and environmental legislation. This commitment continues to be a driving force at our company, and a principle that is deeply ingrained in our values.

As we continue to further implement our ESG and Sustainability program, we have experienced an improvement in our management of our environmental practices. Our environmental programs have received low-risk ratings from ESG rating agencies as a part of our continued efforts to integrate ESG into our business. We strive for continuous improvement in reducing our carbon footprint. Additionally, our collaboration with the various stockholders including ESG rating agencies has enabled us to expand the scope of analysis in our annual ESG reporting to our external stakeholders.

We believe in fostering a culture of fairness and inclusion both within our company and throughout our supplier network. We prioritize open communication and collaboration with our employees and partners to address any concerns related to recruitment, working hours, compensation, discrimination, and the freedom to associate. By working closely together, we strive to create a welcoming and respectful work environment, both within our organization and beyond, which promotes equal, humane treatment within our company as well as at our suppliers. We host regular town-hall meetings with our employees, and our CEO hosts ‘fireside chats’ where employees are encouraged to ask questions and seek input. We work with our employees and partners closely to resolve any issues with respect to recruitment, working hours, compensation, discrimination, and freedom of association, hence ensuring a respectable working environment internally and externally.

We believe we can play a crucial role in driving positive social change in our commitment to humane treatment of employees globally. We have continued to administer our Conflict Mineral Program. All of our employees and our ODMs are expected to follow the requirements of the Conflict Minerals Program, improve employee practices and maintain tight control over supply chain relationships to ensure compliance in accordance with the Organization for Economic Co-operation and Development (“OECD”).

In addition, we have a zero-tolerance policy for both forced labor and human trafficking. In an effort to support the California Transparency in Supply Chains Act of 2010 (SB657), and to confront slavery, we have committed to assess risks related to our supply chain and our direct commercial suppliers and evaluate suppliers’ compliance with the Arlo Technologies Supplier Code of Conduct via periodic audits.

We are committed to fostering a diverse and inclusive workplace by implementing policies and programs that promote diversity in hiring, provide equal opportunities for career advancement, and create a supportive environment for underrepresented groups. Our commitment to inclusion and diversity has resulted in a significant increase in the total number of women in our workforce, a sizable uptick in the number of Women in Tech, and a meaningful rise in the number of women in leadership roles. We continue to seek opportunities to ensure we are bringing in diverse viewpoints to the conversation, because we believe those efforts support a long-term and sustainable track record of operational success. We prioritize the well-being of employees by offering comprehensive benefits, promoting work-life balance, providing mental health support, and fostering a culture that values employee health and professional development.

We believe another measure of success is having a positive impact on community stakeholders. Our leadership team and employees have made the commitment to work closely with local charities in their communities to support philanthropic initiatives such as fundraising for humanitarian crises and including an area of focus on working with young people with autism and other learning difficulties. Charitable giving, fundraising, and volunteering are core parts of our community outreach, and we expect to continue those efforts as we go forward. Another action we have undertaken in community empowerment is supporting minority businesses and local suppliers. We commit to supporting marginalized communities, including racial and ethnic minorities, LGBTQ+ individuals, refugees and immigrants, by advocating for their rights, providing resources and support, and amplifying their voices.

We are committed to providing customers with high quality products that are in compliance with laws, directives, standards and industry regulations. Our products go through rigorous testing and certification processes to achieve regulatory compliance.

Ethics is one of the key elements in our Corporate Social Responsibility (“CSR”) Program. Our Code of Ethics serves as a foundation of our corporate governance policy and provides guidance on standard business conduct for all of our employees and partners.

All of our employees are required to take and pass yearly training courses on Anti-Bribery and Anti-Corruption to ensure they understand the importance of following local laws and regulations with respect to those topics.

In addition, we and our Manufacturing Partners are committed to meeting ISO standards and maintaining ISO 9001 and/or ISO 14001 certifications. We also perform an annual CSR audit as well as anti-corruption audits of our ODM partners.

We commit to ethical practices in the development and deployment of technology, including responsible data handling and protection of user privacy.

Without an effective and efficient management system, we would not be able to optimize the value of the Corporate Social Responsibility Program and fulfill our responsibility as a loyal global citizen. Our program includes review of management systems in the areas of Ethics, Labor and Environment, and Health and Safety to help establish an organized framework for identifying, evaluating, and remediating issues as they arise.

Our Nominating and Corporate Governance Committee provides general oversight of significant ESG practices and initiatives, while our Compensation and Human Capital Committee provides oversight of human capital matters, including diversity, equity and inclusion, and our Cybersecurity and Privacy Committee provides oversight of data privacy matters.

Our Board reflects diverse perspectives, skills, experiences, and backgrounds, that represent the interests of our stakeholders. Our Board members have a broad range of experience in industries such as technology, telecommunications, network security, and finance. Four of our Board members currently have, or have had, experience serving on the boards of directors of other public companies. In addition, three members of our Board are women and two members of our Board self-identify as being from an underrepresented community.

Each of our executive officers serves at the discretion of the Board. The determination as to which of our employees qualify as executive officers was made by the Board in accordance with the rules of the SEC. Biographical information for our executive officers as of the date of this Proxy Statement is set forth below. The following table identifies our current executive officers, their age, and their respective offices and positions.

The Board adopted corporate governance guidelines to assure that it will have the necessary authority and practices in place to review and evaluate the business operations as needed and to make decisions that are independent of the management. The corporate governance guidelines are also intended to align the interests of directors and management with those of the stockholders. The corporate governance guidelines set forth the practices the Board intends to follow with respect to board composition and selection including diversity, board meetings and involvement of senior management, Chief Executive Officer performance evaluation and succession planning, and board committees and compensation. The corporate governance guidelines include a Majority Voting in Uncontested Elections Policy pursuant to which any nominee for director is required to submit an offer of resignation for consideration by the Nominating and Corporate Governance Committee if such nominee for director (in an uncontested election) receives a greater number of “Withhold” votes than votes “For” such election. In such case, the Nominating and Corporate Governance Committee will then consider all of the relevant facts and circumstances and recommend to the Board the action to be taken with respect to such offer of resignation. The Board will then act on the Nominating and Corporate Governance Committee’s recommendation. Promptly following the Board’s decision, we would disclose that decision and an explanation of such decision in a filing with the SEC or a press release.

The corporate governance guidelines, as well as the charters for each committee of the Board, may be viewed on the “Investor Relations” section of the website at www.arlo.com. The information on the website is not incorporated by reference into this Proxy Statement or our Annual Report.

As required under the New York Stock Exchange (“NYSE”) listing standards, a majority of the members of a listed board of directors must qualify as “independent,” as affirmatively determined by the board of directors. Our Board consults with our legal counsel to ensure that the Board’s determinations are consistent with relevant securities and other laws and regulations regarding the definition of “independent,” including those set forth in pertinent listing standards of NYSE, as in effect from time to time.

Consistent with these considerations, after review of all relevant identified transactions or relationships between each director, or any of his or her or their family members, and the senior management and independent auditors, the Board has affirmatively determined that the following six directors are independent directors under the applicable rules of the NYSE: Messrs. Faison, Aggarwal and Summers and Mses. Carter-Miller, Fallon and Rothstein. In making this determination, the Board found that none of our directors had a material or other disqualifying relationship with the Company. Mr. McRae is not considered independent because he is an executive officer of the Company.

The Nominating and Corporate Governance Committee manages an annual evaluation of the performance of the full Board and its Committees and reports on such evaluation to the Board. It is also responsible for establishing the evaluation criteria and implementing the process for such evaluation. The evaluation includes an assessment of each Committee’s compliance with the principles set forth in their respective charter, as well as recommendations for improving the Board’s and each Committee’s effectiveness in serving the best interests of Arlo and its stockholders, specific areas in which the Board and management believe that the performance of the Board and its Committees could be improved, and overall Board composition and makeup.

The Nominating and Corporate Governance Committee also oversees continuing education for directors. We sponsor, or make available, a number of educational programs including, but not limited to, accredited directors’ programs, Board education seminars, technical summits and product reviews. Board members meet the continuing education requirements of any applicable regulatory agencies.

One of the Board’s key functions is informed oversight of our risk management process. The Board does not have a standing risk management committee, but rather administers this oversight function directly through the Board as a whole, as well as through various Board standing committees that address risks inherent in their respective areas of oversight. In particular, our Board is responsible for monitoring and assessing strategic risk exposure, including a determination of the nature and level of risk appropriate for us. The Audit Committee has the responsibility to consider and discuss our major financial risk exposures and the steps our management has taken to monitor and control these exposures, including guidelines and policies to govern the process by which risk assessment and management is undertaken. The Audit Committee also monitors compliance with legal and regulatory requirements, in addition to oversight of the performance of our internal audit function. The Nominating and Corporate

Typically, the applicable Board committees meet at least annually with the employees responsible for risk management in the committees’ respective areas of oversight. It is the responsibility of the committee chairs to report findings regarding material risk exposures to the Board as quickly as possible.

The Board met four times (including regularly scheduled and special meetings) and acted by unanimous written consent four times during 2023. All directors attended at least 75% of the aggregate number of meetings of the Board and of the committees on which they served in 2023 during the period in which he or she or they served on our Board or the respective committees of our Board.

In fiscal year 2023, our independent directors met three times in an executive session at which Mr. Faison presided and only independent directors were present.

Stockholder engagement is an important dimension of effective corporate governance. Information exchange is critical to our success, and we meet with our stockholders frequently to discuss critical topics including business strategy, financial and operational performance, and our corporate governance philosophy. Stockholder engagement is not unilateral; we use those interactions with our investors to gather feedback on our performance, company perception, and additional opportunities to enhance stakeholder value. As a part of our outreach efforts, we continue to engage with stockholders several times throughout the year through various mediums including investor conferences, non-deal roadshows, analyst days, and industry events. Through these channels in 2023, we were able to capture feedback around varying areas of interest for investors including strategic partnerships, market valuation and capital allocation programs. We incorporated ideas from these discussions in our strategic Investor Relation plan and will continue to do so as we work with the Board to finalize our capital allocation program.

In addition, we host quarterly conference calls with the investment community to discuss our financial and operational results. This includes immediate follow-up discussions subsequent to the earnings call with all of the institutional analysts who cover our stock and five or six of our top stockholders. All of the published analyst reports and feedback from our top shareholders are shared with our Board and executive team to share additional insight on how the company is viewed.

We also engage with passive investors who are interested in maintaining an active dialogue. Some of these investors give direct feedback on business practices including compensation strategy, corporate governance, and our impact on the community including environmental and social issues. This regular engagement facilitates a better discussion and understanding of the stockholders’ priorities, perspectives, and challenges which helps position us to successfully deliver on our initiatives, programs, and goals. This continuous feedback loop provides information and insights that we can evaluate and share with our Board if necessary as we continue to progress our business practices and design effective disclosures.

The Board has adopted an Insider Trading Compliance Program that prohibits the executive officers, all other employees and non-employee directors as well as their family members from engaging in transactions in publicly-traded options, such as puts and calls, and other derivative securities with respect to Arlo stock. In addition, this prohibition extends to any hedging or similar transaction designed to decrease the risks associated with holding securities or pledging securities as collateral for loans or otherwise. We have appointed Brian Busse, the General Counsel and Corporate Secretary, as the Insider Trading Compliance Officer. In such capacity, Mr. Busse is generally responsible for the administration of our Insider Trading Compliance Program.

The Insider Trading Compliance Program may be viewed on the “Investor Relations” section of the website at www.arlo.com. The information on the website is not incorporated by reference into this Proxy Statement or our Annual Report.

Section 16(a) of the Exchange Act requires our directors and executive officers, and persons who own more than ten percent of a registered class of our equity securities, to file with the SEC initial reports of ownership and reports of changes in ownership of our common stock and other equity securities. Officers, directors and greater than ten percent stockholders are required by SEC regulation to furnish us with copies of all Section 16(a) forms they file.

To our knowledge, based solely on a review of the copies of such reports furnished to us and written representations from certain reporting persons that no other reports were required, during the fiscal year ended December 31, 2023, other than a Form 4 covering one transaction for Mr. McRae that was filed late on July 12, 2023 and a Form 4 covering one transaction for Mr. Binder that was filed late on October 3, 2023, all Section 16(a) filing requirements applicable to our officers, directors and greater than ten percent beneficial owners were complied with.

From time to time, we enter into transactions with entities in which the amounts involved exceeded or will exceed $120,000, and any of our directors, executive officers, or holders of more than 5% of our capital stock, or any member of the immediate family of, or person sharing the household with, the foregoing persons, had or will have a direct or indirect material interest. We believe that all of these transactions were on terms as favorable as could have been obtained from unrelated third parties.

We currently have written employment letters with our executive officers. For information about our employment agreements with our named executive officers, refer to “Executive Compensation - Agreements with our Named Executive Officers.”

We have granted stock options and RSUs (including performance-based RSUs) to our executive officers and options and RSUs to directors. For information about the equity awards granted to our named executive officers and our directors, refer to “Executive Compensation—Outstanding Equity Awards at Fiscal Year-End” and “Executive Compensation—Non-Employee Director Compensation.”

We have entered, and intend to continue to enter, into separate indemnification agreements with our directors and executive officers, in addition to the indemnification provided for in our amended and restated certificate of incorporation and amended and restated bylaws. These agreements, among other things, require us to indemnify our directors and executive officers for certain expenses, including attorneys’ fees, judgments, fines and settlement amounts incurred by a director or executive officer in any action or proceeding arising out of their services as one of our directors or executive officers or as a director or executive officer of any other company or enterprise to which the person provides services at our request. We believe that these provisions and indemnification agreements are necessary to attract and retain qualified persons as directors and officers.

The limitation of liability and indemnification provisions in our amended and restated certificate of incorporation and amended and restated bylaws may discourage stockholders from bringing a lawsuit against directors for breach of their fiduciary duties. They may also reduce the likelihood of derivative litigation against directors and officers, even though an action, if successful, might benefit us and our stockholders. A stockholder’s investment may decline in value to the extent we pay the costs of settlement and damage awards against directors and officers pursuant to these indemnification provisions.

We have a general policy that all material transactions with a related party, as well as all material transactions in which there is an actual, or in some cases, perceived, conflict of interest, will be subject to prior review and approval by our Audit Committee and its independent members, who will determine whether such transactions or proposals are fair and reasonable to us and our stockholders. In general, potential related-party transactions will be identified by our management and discussed with our Audit Committee at its meetings. Detailed proposals, including, where applicable, financial and legal analyses, alternatives and management recommendations, will be provided to our Audit Committee with respect to each issue under consideration, and decisions will be made by our Audit Committee with respect to the foregoing related-party transactions after opportunity for discussion and review of materials. When applicable, our Audit Committee will request further information and, from time to time, will request guidance or confirmation from internal or external counsel or auditors.

The Board has adopted a code of business conduct and ethics (“Code of Ethics”) which applies to all of our directors, officers and employees, including the principal executive officer, principal financial officer, principal accounting officer and persons performing similar functions. The Code of Ethics is available upon written request to the General Counsel and is located on the “Investor Relations” section of the website at www.arlo.com. If we amend or grant any waiver from a provision of the Code of Ethics that applies to our executive officers, we will publicly disclose such amendment or waiver on its website and as required by applicable law. The information on our website is not incorporated by reference into this Proxy Statement or our Annual Report.

Stockholders or interested parties who wish to communicate with the Board may do so by sending written communications addressed to the Corporate Secretary of Arlo Technologies, Inc., 2200 Faraday Ave., Suite #150, Carlsbad, California 92008. These communications will be reviewed by the Corporate Secretary of Arlo who will determine whether the communication is appropriate for presentation to the Board or the relevant director. The purpose of this screening is to allow the Board to avoid having to consider irrelevant or inappropriate communications (such as advertisements, solicitations, and hostile communications).

Arlo regularly reviews the Board’s leadership structure and the responsibilities and composition of its standing committees. The structure and composition of Arlo’s Board and its committees are intended to leverage the diverse perspectives of the Board members and promote effective oversight.

The Board believes its current leadership structure, in which the roles of Chair and CEO are separated, best serves Arlo’s overall corporate structure and the Board’s ability to carry out its roles and responsibilities on behalf of Arlo’s stockholders, including its oversight of management and corporate governance matters. The Board also believes that the current structure allows our CEO to focus on managing Arlo, while leveraging our independent Chair’s experience to drive accountability at the Board level.

The Board has an independent Chair, Mr. Faison, who has authority to call and preside over the Board meetings, to set meeting agendas and to determine materials to be distributed to the Board, among other things. Accordingly, the Chair has substantial ability to shape the work of the Board. We believe that separation of the positions of Chair and Chief Executive Officer reinforces the independence of the Board in its oversight of our business and affairs. In addition, we have a separate chair for each committee of the Board. The Chair of each committee is expected to report to the Board from time to time, or whenever so requested by the Board, on the activities of his or her committee in fulfilling that chair’s responsibilities as detailed in its respective committee charter or specify any shortcomings should that be the case. In addition, we believe that having a separate Chair creates an environment that is more conducive to objective evaluation and oversight of management’s performance, increasing management accountability and improving the ability of the Board to monitor whether management’s actions are in the best interests of us and our stockholders. As a result, we believe that having a separate Chair can enhance the effectiveness of the Board as a whole.

The Audit Committee was established by the Board in accordance with Section 3(a)(58)(A) of the rules under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), to oversee our corporate accounting and financial reporting processes, internal controls, independent auditor relationships, and audits of its financial statements. For this purpose, the Audit Committee performs several functions, including, among other things:

The Board has adopted a written Audit Committee charter that is available to stockholders on the “Investor Relations” section of the website at www.arlo.com. The information on our website is not incorporated by reference into this Proxy Statement or our Annual Report to Stockholders (the “Annual Report”).

The Board reviews the NYSE listing standards definition of independence for Audit Committee members on an annual basis and has determined that all members of the Audit Committee are independent (as independence is currently defined in Section 303A.07(a) of the NYSE Listed Company Manual).

The Board has also determined that Ms. Fallon and Mr. Aggarwal qualify as “audit committee financial experts,” as defined in applicable Securities and Exchange Commission (the “SEC”) rules. The Board made a qualitative assessment of their level of knowledge and experience based on a number of factors, including their formal education and previous and current experience in financial roles.

The philosophy of the Compensation and Human Capital Committee is to ensure that we use exceptional talent practices relevant to our size and industry and provide compensation to our executive officers in such a manner as to attract and retain the best available personnel for positions of substantial responsibility. The committee aims to oversee our management in its mission of creating a talent rich organization to ensure exceptional leadership, to provide incentives for such persons to perform to the best of their abilities and drive a highly ethical performance culture, and to promote the success of our business by delivering more sustainable returns and driving long-term value creation.

The Compensation and Human Capital Committee is comprised of four directors: Ms. Carter-Miller, who chairs the committee, and Messrs. Faison, Aggarwal and Summers. Our Board has determined that each of the members of our Compensation and Human Capital Committee are independent (as independence is currently defined in NYSE Listed Company Manual Section 303A.02 as applied to Compensation and Human Capital Committee members), and is a non-employee director, as defined in Rule 16b-3 promulgated under the Exchange Act. The Board has adopted a written Compensation and Human Capital Committee charter that is available to stockholders on the “Investor Relations” section of the website at www.arlo.com. The information on our website is not incorporated by reference into this Proxy Statement or our Annual Report.

The Compensation and Human Capital Committee acts on behalf of the Board to review, adopt or recommend to the Board for adoption, and oversee the compensation strategy, policies, plans and programs. For this purpose, the Compensation and Human Capital Committee performs several functions, including, among other things:

Typically, the Compensation and Human Capital Committee meets at least quarterly and with greater frequency, if necessary. The agenda for each meeting is usually developed by the Chair of the Compensation and Human Capital Committee, in consultation with management. The Compensation and Human Capital Committee meets regularly in executive session. However, from time to time, various members of management and other employees as well as outside advisors or consultants may be invited by the Compensation and Human Capital Committee to make presentations, to provide financial or other background information or advice or to otherwise participate in Compensation and Human Capital Committee meetings. The Chief Executive Officer does not participate in, and is not present during, any deliberations or determinations of the Compensation and Human Capital Committee regarding his compensation or individual performance objectives. The charter of the Compensation and Human Capital Committee grants the Committee the authority to retain and obtain, at our expense, advice and assistance from a compensation consultant, legal counsel or other advisers that the Committee considers necessary to assist it in the performance of its duties and responsibilities as set forth in the charter of the Compensation and Human Capital Committee. The Compensation and Human Capital Committee has direct responsibility for the oversight of the work of any advisers engaged for the purpose of advising the Committee. Under its charter, the Compensation and Human Capital Committee may form and delegate authority to subcommittees as appropriate, and, to the extent required by SEC and NYSE rules, this Committee may select, or receive advice from, a compensation consultant, legal counsel or other adviser to the Committee, other than in-house legal counsel and certain other types of advisers, only after taking into consideration six factors, prescribed by the SEC and NYSE, that bear upon the adviser’s independence; however, there is no requirement that any adviser be independent.

The Compensation and Human Capital Committee engaged Compensia, Inc. (“Compensia”) for the majority of 2023 as its independent compensation consultant. Compensia was retained to provide an assessment of our executive and director compensation programs in comparison to executive and director compensation programs at selected publicly-traded peer companies. As part of its engagement, Compensia was requested by the Compensation and Human Capital Committee to review its peer group of comparative companies and to perform analyses of compensation levels for that group. Compensia provided recommendations on the peer group used to determine appropriate executive compensation recommendations for the Compensation and Human Capital Committee for its consideration. In October 2023, Pay Governance LLP was retained to serve as the Compensation and Human Capital Committee’s independent compensation consultant and assist with reviewing Arlo’s peer group for 2024 compensation decisions.

The Compensation and Human Capital Committee typically holds one or more meetings during the first quarter of the year to discuss and make recommendations to the Board for annual compensation adjustments, annual bonuses, annual equity awards, and new corporate performance objectives. However, the Compensation and Human Capital Committee also considers matters related to individual compensation, such as compensation for new executive hires, as well as high-level strategic issues, such as the efficacy of the compensation strategy, potential modifications to that strategy and new trends, plans or approaches to compensation, at various meetings throughout the year. Generally, the Compensation and Human Capital Committee’s process comprises two related elements: the determination of compensation levels and the establishment of performance objectives for the current year. For executives other than the Chief Executive Officer, the Compensation and Human Capital Committee solicits and considers evaluations and recommendations submitted to the Committee by the Chief Executive Officer. In the case of the Chief Executive Officer, the evaluation of his performance is conducted by the Compensation and Human Capital Committee, which determines recommendations to the Board regarding any adjustments to his compensation as well as awards to be granted. As part of its deliberations for all executives and directors, the Compensation and Human Capital Committee may review and consider, as appropriate, materials such as financial reports and projections, operational data, executive and director stock ownership information, company stock performance data, analyses of historical executive compensation levels and current company-wide compensation levels, compensation data from comparative companies, compensation surveys and recommendations of any compensation consultant.

As stated above, the Compensation and Human Capital Committee currently consists of Ms. Carter-Miller and Messrs. Faison, Aggarwal and Summers. No member of the Compensation and Human Capital Committee has ever been an officer or employee of Arlo. None of our executive officers currently serves, or has served during the last completed fiscal year, on a Compensation and Human Capital Committee or board of directors of any other entity that has one or more executive officers serving as a member of our Board or Compensation and Human Capital Committee.

The Nominating and Corporate Governance Committee is responsible for identifying, reviewing and evaluating candidates to serve as our directors (consistent with criteria approved by the Board), reviewing and evaluating incumbent directors, selecting or recommending to the Board for selection candidates for election to the Board, making recommendations to the Board regarding the membership of the committees of the Board, assessing the performance of the Board and developing a set of corporate governance principles.

The Nominating and Corporate Governance Committee is comprised of three directors: Mr. Faison, who chairs the committee, and Mr. Aggarwal and Ms. Rothstein. Each of the members of the Nominating and Corporate Governance Committee are independent (as independence is currently defined in NYSE Listed Company Manual Section 303A.02). The Board has adopted a written Nominating and Corporate Governance Committee charter that is available to stockholders on the “Investor Relations” section of the website at www.arlo.com. The information on our website is not incorporated by reference into this Proxy Statement or our Annual Report. The functions of this committee include, among other things:

The Nominating and Corporate Governance Committee believes that candidates for director should have certain minimum qualifications, including the ability to read and understand basic financial statements, being over 21 years of age and having the highest personal integrity and ethics. The Nominating and Corporate Governance Committee also intends to consider such factors as possessing relevant expertise upon which to be able to offer advice and guidance to management, having sufficient time to devote to the affairs, demonstrated excellence in his or her field, having the ability to exercise sound business judgment and having the commitment to rigorously represent the long-term interests of the stockholders. However, the Nominating and Corporate Governance Committee retains the right to modify these qualifications from time to time. Candidates for director nominees are reviewed in the context of the current composition of the Board, the operating requirements and the long-term interests of stockholders. In conducting this assessment, the Nominating and Corporate Governance Committee typically considers diversity (including with respect to age and gender), age, skills and such other factors as it deems appropriate, given the current needs of the Board and the Company, to maintain a balance of knowledge, experience and capability. Although we do not have a formal policy on Board diversity, the Nominating and Corporate Governance Committee takes into account a broad range of diversity considerations when assessing director candidates, including individual backgrounds and skill sets, professional experience and other factors that contribute to our Board having an appropriate range of expertise, talents, experiences and viewpoints, and considers those diversity considerations, in view of the needs of the Board as a whole, when making decisions on director nominations.

In the case of incumbent directors whose terms of office are set to expire, the Nominating and Corporate Governance Committee reviews these directors’ overall service during their terms, including the number of meetings attended, level of participation, quality of performance and any other relationships and transactions that might impair the directors’ independence. In the case of new director candidates, the Nominating and Corporate Governance Committee also determines whether the nominee is independent for NYSE purposes, which determination is based upon applicable NYSE listing standards, applicable SEC rules and regulations and the advice of counsel, if necessary. The Nominating and Corporate Governance Committee then uses its network of contacts to compile a list of potential candidates, but may also engage, if it deems appropriate, a professional search firm. The Nominating and Corporate Governance Committee conducts any appropriate and necessary inquiries into the backgrounds and qualifications of possible candidates after considering the function and needs of the Board. The Nominating and Corporate Governance Committee meets to discuss and consider the candidates’ qualifications and then selects a nominee for recommendation to the Board by majority vote.

The Nominating and Corporate Governance Committee will consider director candidates recommended by stockholders. The Nominating and Corporate Governance Committee does not intend to alter the manner in which it evaluates candidates, including the

The Cybersecurity and Privacy Committee is comprised of four directors: Mr. Summers, who chairs the committee, Mr. Faison and Mses. Fallon and Rothstein. Each of the members of the Cybersecurity and Privacy Committee are “independent” under the applicable rules of the NYSE. The functions of this committee include, among other things:

The Board has adopted a written Cybersecurity and Privacy Committee charter that is available to stockholders on the “Investor Relations” section of the website at www.arlo.com. The information on our website is not incorporated by reference into this Proxy Statement or our Annual Report.

The Strategic and Capital Allocation Committee is comprised of three directors: Mr. Faison, who chairs the committee, and Mses. Carter-Miller and Rothstein. Each of the members of the Strategic and Capital Allocation Committee are “independent” under the applicable rules of the NYSE. The functions of this committee include, among other things:

The Board has adopted a written Strategic and Capital Allocation Committee charter that is available to stockholders on the “Investor Relations” section of the website at www.arlo.com. The information on our website is not incorporated by reference into this Proxy Statement or our Annual Report.

The Nominating and Corporate Governance Committee seeks to assemble a Board that, as a whole, possesses the appropriate balance of professional and industry knowledge, financial expertise and high-level management experience necessary to oversee and direct our business. To that end, the Nominating and Corporate Governance Committee has identified and evaluated nominees in the broader context of the Board’s overall composition, with the goal of recruiting members who complement and strengthen the skills of other members and who also exhibit integrity, collegiality, sound business judgment and other qualities that the Nominating and Corporate Governance Committee views as critical to effective functioning of the Board. The brief biographies below include information, as of the date of this Proxy Statement, regarding the specific and particular experience, qualifications, attributes or skills of each director or nominee that led the Nominating and Corporate Governance Committee to believe that the nominee should continue to serve on the Board. However, each of the members of the Nominating and Corporate Governance Committee may have a variety of reasons why such member believes a particular person would be an appropriate nominee for the Board, and these views may differ from the views of other members.

 

 

Under our non-employee director compensation policy (the “Director Compensation Policy”), our non-employee directors received the following compensation for the 2023 fiscal year:

All retainers are paid on a quarterly basis following the end of each quarter and are prorated, as needed, for partial service during such period.

Vesting of equity awards held by our non-employee directors will fully accelerate if we are subject to a “change in control” (as defined under our 2018 Equity Incentive Plan (the “2018 Plan”)).

We became a public company in August 2018, and in 2019 through 2023 we filed our proxy statements under the scaled-down executive compensation disclosure requirements generally available to emerging growth companies. As of December 31, 2023, we ceased to be an emerging growth company and, therefore, this year’s Proxy Statement includes additional detail regarding executive compensation that was previously not required, including (1) Compensation Discussion and Analysis, (2) additional compensation tables that provide disclosure on “Grants of Plan-Based Awards,” “Option Exercises and Stock Vested” and “Potential Payments upon Termination or Change in Control,” (3) an advisory vote on the compensation of our named executive officers, which is included as Proposal Three in this proxy statement; and (4) an advisory vote on the preferred frequency of advisory shareholder votes on the compensation of our named executive officers, which is included as Proposal Four in this proxy statement.

Our Compensation Discussion and Analysis (“CD&A”) includes a detailed discussion of compensation for our named executive officers for the year ended December 31, 2023, which consist of our principal executive officer, chief financial officer and our next most highly compensated executive officer as of December 31, 2023. We have no other executive officers who were serving as of December 31, 2023 or who served during 2023.

In fiscal year 2023, we accelerated the growth of our services business which drove outstanding results across all of our key metrics. Strong demand, increased subscriptions, higher average revenue per user (“ARPU”), and record gross margin are fueling Arlo’s trajectory of improving performance and profitability. Our strategy and excellent execution also produced a significant increase in the life time value (“LTV”) of our subscribers which expands stockholder value.

Our transformation from a hardware to a service business enabled us to deliver these strong operational results. Critical to this transformation was our management team executing a complete shift in pricing strategy, leveraging the hardware as a tool to drive more households into the Arlo ecosystem. As a result of this catalyst, paid accounts grew 51.1%, service revenue grew 47.4%, and ARR grew 52.5% year over year. Arlo’s keen focus on these critical key business metrics resulted in the company delivering operational excellence that is being recognized by the investment community which drove more than 170% increase in the value of our common stock during 2023 from a closing price of $3.51 per share on December 30, 2022 to a closing price of $9.52 on December 29, 2023.

Consistent with our philosophy, we pay our executive based on performance measures that drive long-term growth and value creation for our stockholders. We link executive compensation and our stockholder interests by structuring a meaningful portion of our executive officers’ annual target total direct compensation to be both “at-risk” and variable in nature. While we do not determine either “variable” or “fixed” pay for each executive officer with reference to a specific percentage of target total direct compensation, consistent with our “pay-for-performance” philosophy, generally, we seek to emphasize variable pay over fixed pay and equity compensation over cash compensation.

We accelerated our services business in fiscal 2023 which resulted in growth in paid accounts, ARR, and Non-GAAP operating income. As a result of this execution, Arlo stockholders have benefited from appreciation in our stock price of more than 170% since December 2022. Our executives have also positioned Arlo for future success by continuing to drive platform innovations and delivering additional smart security devices and services. These initiatives enable a further acceleration of subscriber growth, an opportunity to drive higher ARPU per customer, and allow us to form strategic partnerships in various adjacent markets. With these growth drivers in place, by 2030 we expect to at least double our paid accounts base, more than double our ARR, and grow operating margins by 1500 basis points.

We compete in an aggressive and dynamic industry and, as a result, we believe that hiring, motivating, and retaining quality employees, particularly senior managers, sales and technical personnel, are critical factors to our future success.

Our executive compensation program aims to balance a number of objectives, including attracting and retaining highly qualified executive officers, rewarding individual contributions, teamwork and integrity, supporting employee engagement and motivating management to achieve our corporate objectives and deliver returns for our stockholders. Our programs are intended to drive short- and long-term performance with the goal of increasing stockholder value over the long term.

In fiscal year 2023, the vast majority of the target total direct compensation granted to our executive officers consisted of variable pay consisting of long-term and short-term cash and equity incentive compensation. We utilize key short- and long-term operating objectives, such as growth of operating margins and cumulative paid accounts that we believe are critical to execution of our business strategy and stockholder value for both our cash incentive bonus program and our PSUs. This structure is intended to encourage our management team to achieve our short- and long-term corporate objectives while appropriately managing business risks and challenges.

As we continue to mature as a public company, we believe that the compensation elements provided to all of our executive officers, including our named executive officers, will continue to emphasize “at-risk” and variable pay that should enable us to provide a balanced set of incentives for our executive officers to meet our business objectives and drive long-term growth.

For the pay-versus-performance disclosure prescribed by SEC rules, which does not necessarily reflect the way our Compensation and Human Capital Committee views the alignment between our performance and our named executive officers’ compensation, see the section titled “Pay versus Performance”.

We believe the following practices and policies within our program promote sound compensation governance and are in the best interests of our stockholders and named executive officers:

Recruitment and retention of our named executive officers and other executive management require a competitive compensation package. Our Compensation and Human Capital Committee is responsible for overseeing and reviewing our general compensation strategy. In this capacity, our Compensation and Human Capital Committee approves the design of, and implements, reviews, and

Our Compensation and Human Capital Committee works with and receives information and analyses from management, including our legal, finance, and human resources departments, our independent compensation consultants, and our Chief Executive Officer, and considers such information and analyses in determining the structure and amount of compensation to be paid to our executive officers (other than his own compensation). Our Chief Executive Officer provides recommendations to the Compensation and Human Capital Committee regarding the compensation of all executive officers (other than himself) based on the overall corporate achievements during the period being assessed and his knowledge of the individual contributions to our success by each of the executive officers. The Compensation and Human Capital Committee takes these recommendations into consideration when determining the overall performance of the company and each of our executive officers individually, as demonstrated by progress measured against corporate goals and achievement of other corporate priorities.

From time to time, various other members of management and other employees as well as outside advisors or consultants may be invited by the Compensation and Human Capital Committee to make presentations, provide financial or other background information or advice, or otherwise participate in Compensation and Human Capital Committee or Board meetings.

Members of management, including our Chief Executive Officer, may attend portions of our Compensation and Human Capital Committee’s meetings; however, neither our Chief Executive Officer nor any other member of management is present during decisions regarding his or her own compensation.

Our Compensation and Human Capital Committee has the sole authority to retain compensation consultants to assist in its evaluation of executive compensation, including the authority to approve the consultant’s reasonable fees and other retention terms. For purposes of evaluating 2023 compensation for each of our executive officers and making 2023 compensation decisions, our Compensation and Human Capital Committee retained Compensia, Inc., or Compensia, to assist it in reviewing our executive compensation program and to ensure that our compensation program remains competitive in attracting and retaining talented executives. In October 2023, the Compensation and Human Capital Committee retained Pay Governance, LLC (“Pay Governance”) to serve as its compensation consultant. Pay Governance assisted with reviewing Arlo’s 2023 peer group in order to understand the peer group changes required for 2024 compensation decisions.

During 2023, Compensia assisted the Compensation and Human Capital Committee in selecting a group of peer companies to use as a reference in understanding the competitive market, evaluating current pay practices and philosophies, and considering compensation and corporate governance best practices. As described further below, Compensia also prepared an analysis of our compensation practices with respect to base salaries, annual bonuses and long-term incentive compensation compared to competitive market practices. Compensia reported directly to, and advised, our Compensation and Human Capital Committee. Compensia interacted with management to gain access to company information that is required to perform its services and to understand the culture and policies of our organization.

Our Compensation and Human Capital Committee has considered whether the work of Compensia and Pay Governance has raised any conflict of interest, taking into account the factors set forth in the SEC rules and the NYSE listing standards, and determined that that there is no conflict of interest resulting from retaining Compensia and Pay Governance currently or during 2023. Other than the services provided to our Compensation and Human Capital Committee, Compensia and Pay Governance has not performed any other work for us.

Because the Compensation and Human Capital Committee aims to attract and retain the most highly qualified executive officers in a competitive market for talent, it believes that it is important when making its compensation decisions to be informed as to the current practices of comparable public companies with which we compete for top talent. To this end, as described below, the Compensation and Human Capital Committee reviews data from a peer group of companies as a reference point in making executive compensation decisions.

In selecting the companies to include in the peer group, the Compensation and Human Capital Committee considered the following targeted selection criteria:

Our Compensation and Human Capital Committee’s general approach emphasizes setting total compensation for executives, which consists of base salary and benefits, annual incentive bonus, and equity-based incentives, at or near the median of the peer group. However, the use of peer company data is not formulaic, and the Compensation and Human Capital Committee considers market data as only one of the factors that informs its decisions, as described below under “Key Factors Used in Determining Executive Compensation.”

Our Compensation and Human Capital Committee sets the compensation of our executive officers at levels they determine to be competitive and appropriate for each named executive officer, with committee members using their professional experience and judgment. Our Compensation and Human Capital Committee believes that executive pay decisions require consideration of a multitude of relevant factors which may vary from year to year. Pay decisions are not made by using a formulaic approach or benchmark data. In making executive compensation decisions, our Compensation and Human Capital Committee generally takes into consideration the factors listed below:

During the first quarter of 2023, we reached out to several of our largest stockholders to gain a better understanding of their views regarding our executive compensation program as well as other corporate governance matters. Members of our management, and in some cases members of our Compensation and Human Capital Committee, held informative discussions with those stockholders who expressed interest in speaking with us which included our largest institutional stockholder holding approximately 15% of our outstanding common stock. Our stockholders who provided feedback generally expressed support for our continued use of performance-vesting awards and our overall executive compensation program. Considering this feedback, the Compensation and Human Capital Committee determined to maintain the same general structure of our compensation program for 2023. Our Compensation and Human Capital Committee will monitor and continue to evaluate our executive compensation program going forward in light of our stockholders’ views and our transforming business needs.

Our stockholders will have their first opportunity to cast an advisory vote to approve our named executive officers’ compensation at the 2024 Annual Meeting. In the future, we intend to consider the outcome of such say-on-pay vote and our stockholders’ views when making compensation decisions regarding our named executive officers.

Our executive compensation program aims to take a holistic approach to compensation and generally consists of, and is intended to strike a balance among, the following three principal components: base salary, performance-based incentive and long-term incentive compensation.

We also provide our executive officers with severance and change-in-control related payments and benefits, as well as benefits available to all our employees, including retirement benefits under our 401(k) plan and participation in various employee health and welfare benefit plans.

In evaluating our executive compensation policies and programs, as well as the short-term and long-term value of our executive compensation plans, we consider both company and individual performance and skills of each of our executives, as well as the

We do not have any formal policies for allocating compensation among salary, performance bonus awards and equity grants, short-term and long-term compensation or among cash and non-cash compensation. Instead, the Compensation and Human Capital Committee uses its judgment to establish a total compensation program for each named executive officer that is a mix of current, short-term incentive and long-term incentive compensation, and cash and non-cash compensation, that it believes appropriate to achieve the goals of our executive compensation program and our corporate objectives. However, a significant portion of the named executive officers’ total target compensation is comprised of performance-based bonus opportunities and long-term equity awards, in order to align the executive officers’ incentives with the interests of our stockholders and our corporate goals.

In making executive compensation decisions, the Compensation and Human Capital Committee generally considers each executive officer’s total target direct compensation, which consists of base salary, target bonus opportunity, which together with base salary we refer to as target annual compensation, and long-term equity awards (valued based on an estimate of grant date fair value).

Base salaries are generally reviewed and approved by the Compensation and Human Capital Committee each year. The Compensation and Human Capital Committee did not make any changes to our named executive officer base salaries for 2023 as compared to the prior fiscal year. The annual base salaries of our named executive officers for 2023 compared to those in place as of December 31, 2022, were:

The annual performance bonus program provides each named executive officer with the opportunity to earn annual incentive payments based upon the attainment of certain corporate financial or operational measures or objectives as appropriate for the year, based on such participant’s annual performance bonus opportunity, expressed as a percentage of base salary.

For 2023, Messrs. McRae, Binder and Busse had the opportunity to earn a target annual performance bonus equal to 100%, 70% and 50% of their annual base salary, respectively. The target percentages applicable to such named executive officers for 2023 were unchanged from 2022.

For 2023, the Compensation and Human Capital Committee established non-GAAP operating income (loss) as the corporate performance goal applicable to the 2023 plan year. The Compensation and Human Capital Committee chose this metric because it drives revenue growth and gives our executive officers the opportunity to manage and contain operating expenses. If we overachieve our target measure, the maximum payout any named executive officer could receive is 150% of the target bonus. Executives earn a payout of 10% of their target bonus upon achievement of the threshold level of achievement shown below, with payout increasing proportionately based on achievement against the target goal, up to a maximum bonus of 150% of the executive’s target amount for achievement at or above 150% of the goal. The full Board set the target measure at a level it felt was rigorous, but achievable with effort and represented a meaningful increase from our level of achievement in 2022.

After assessing our 2023 performance, the full Board determined that we had achieved a non-GAAP operating income of $25 million which equals a 70% achievement against our target and accordingly, each of our named executive officers received a performance bonus equal to 70% of their target bonus. The 2023 amounts reflected as Non-Equity Incentive Plan Compensation in the Summary Compensation Table for our named executive officers reflect the value of the bonuses earned for 2023 performance under Arlo’s 2023 executive bonus plan. These bonuses were paid in fully-vested RSUs issued in February 2024.

Since our IPO, we have granted equity compensation to our executive officers primarily in the form of RSU or PSU awards. We grant equity incentive awards to support long-term alignment between our executive officers and our stockholders, and to enable us to obtain and retain the services of highly qualified senior management team members, which we believe is essential to our long-term success.

During 2023, we granted each of our named executive officers annual time-based RSUs and performance-based RSUs as reflected in the table below. We did not grant equity awards to Mr. Binder in 2023 because he received meaningful equity incentive grants in September 2022 when he joined our company.

The Compensation and Human Capital Committee chose each named executive officer’s grant level based on the amount which they felt, in their judgment, was appropriate to retain and incentivize the named executive officers, while remaining reasonable within market standards. In making these determinations, the Compensation and Human Capital Committee considered each of the named executive officer’s current equity holdings, including vested and unvested holdings and the extent to which such holdings were “in-the-money,” the extent to which such holdings remained unvested and therefore continued to serve as a retention tool, the market data provided by Compensia reflecting equity value based on approximate grant date fair value, internal equity amongst the team, individual performance and length of service.

In August 2022, we adopted an Executive Retention Plan under which Messrs. McRae and Busse have the opportunity to earn cash and equity payouts upon achievement by us of certain Cumulative Paid Subscriber thresholds over a five-year performance period beginning in September 2022 and ending in September 2027.

For purposes of the Executive Retention Plan, Cumulative Paid Subscribers means, on a cumulative basis, ordinary course paid subscription accounts generated by us which collectively are expected to generate at least a blended 60% margin as reasonably determined in the sole discretion of the Board or the Compensation and Human Capital Committee. We implemented the Executive Retention Plan in recognition of the significant benefits to us in retaining and incentivizing such participants to continue their employment relationship with us. Compensation and Human Capital Committee chose CPS as the performance goal for the Executive Retention Plan because the paid account subscribers drives our service revenue growth that generate over 70% gross margin.

Upon achievement by us during the five-year performance period of each of the CPS Targets listed in the table below, each of Messrs. McRae and Busse is entitled to receive a cash payment and a PSU equal to, or calculated by reference to, such Participant’s base amount or base PSU as reflected below. The CPS Targets were set in 2022 at levels the Board felt would be challenging based upon our historical performance, internal forecasts at the time of approval and industry-wide conditions.

Messrs. McRae’s and Busse’s Retention Bonus Base Amounts are $2,000,000 and $200,000, respectively, and Messrs. McRae’s and Busse’s CPS Base PSU amounts are 1,000,000, and 100,000 shares, respectively. The CPS Base PSU was granted in 2022 and will vest upon achievement of the 2 Million CPS Target. Upon achievement of each CPS Target, the PSU award corresponding to the next CPS Target will be granted and eligible to vest upon achievement of such CPS Target.

Upon Mr. Binder’s joining us in September 2022, he was granted 750,000 PSUs that vests in three equal installments upon achievement of each of the 3 Million, 4 Million and 5 Million CPS Targets on or prior to the fifth anniversary of the grant date of the PSUs.

The Retention Bonus and CPS PSUs described above are eligible for acceleration or different vesting upon certain change in control or termination events as described below under “Potential Payments upon Termination or Change in Control”.

In May 2023, the 2 Million CPS Target was achieved; accordingly, each of Messrs. McRae and Busse received (1) the Retention Bonus ($2,000,000 and $200,000, respectively), (2) vesting of the CPS PSU (1,000,000 shares and 100,000 shares, respectively); and (3) grant of CPS PSUs (500,000 shares and 50,000 shares, respectively) that are eligible to vest upon the achievement of the 3 Million CPS Target.

In February 2024, the 3 Million CPS Target was achieved; accordingly, each of Messrs. McRae and Busse will receive in May 2024, (1) the Retention Bonus ($1,000,000 and $100,000, respectively), (2) vesting of the CPS PSUs (500,000 shares and 50,000 shares, respectively); and (3) grant of CPS PSUs (500,000 RSUs and 50,000 RSUs, respectively) that will vest upon achievement of the 4 Million CPS Target.

In 2022, Messrs. McRae and Busse were granted Cash Balance PSUs (“CB PSUs”) that vest based on achievement of a cash balance milestone at December 31, 2022. The CB PSUs goal was achieved and the resulting CB PSUs eligible to vest do so in three equal annual installments beginning January 2023, subject to continued service. Accordingly, Messrs. McRae and Busse became eligible to vest with respect to 88.88% of the target number of CB PSUs, subject to continuous service over the vesting period described above.

We have entered into employment letters with each of Messrs. McRae, Binder and Busse. The employment letters generally memorialize the executive officer’s initial base salary and target annual bonus, and participation in our employee benefit plans and programs. These individuals’ base salaries, annual bonus opportunities and any equity awards are reviewed annually by the Compensation and Human Capital Committee; the amounts effective for 2023 are described above in this Compensation Discussion and Analysis.

Regardless of the manner in which a named executive officer’s service terminates, the named executive officer is entitled to receive amounts earned during his or her or their term of service, including salary and unused vacation pay. Each of our named executive officers is eligible for payments or benefits in connection with certain types of involuntary terminations and/or a change in control event. None of our named executive officers are entitled to tax gross ups in connection with severance or change in control transactions. Our Compensation and Human Capital Committee periodically reviews the severance and change in control benefits that we provide, including by reference to market data, to ensure that the benefits remain appropriately structured and at reasonable levels. The Compensation and Human Capital Committee believes that severance protection benefits are necessary to provide stability among our executive officers, serve to focus our executive officers on our business operations, and avoid distractions in connection with a potential change in control transaction or period of uncertainty. A more detailed description of each of our named executive officer’s potential payments and benefits upon a termination or change in control is provided below under “Potential Payments upon Termination or Change in Control.”

Our named executive officers are currently eligible to participate in all of our employee benefit plans, including our medical, dental, vision, group life, disability and accidental death and dismemberment insurance plans, in each case on the same basis as our other employees. In addition, we provide a cash subsidy, which is $50 per pay period, to any employee, including a named executive officer, who does not elect coverage under our company-sponsored medical insurance plans. We also provide a 401(k) plan to our employees, including our named executive officers, as discussed in the section below entitled “401(k) Plan.” We do not provide any perquisites or personal benefits to our named executive officers not otherwise also provided to our other employees, and on the same basis as to our other employees. We do, however, pay the premiums for term life insurance and disability insurance for all of our employees, including our current named executive officers.

We currently maintain a defined contribution employee retirement plan (“401(k) plan”) for our employees. Our named executive officers are eligible to participate in the 401(k) plan on the same basis as our other employees. The 401(k) plan is intended to qualify as a tax-qualified plan under Section 401(k) of the Code. The plan permits us to make discretionary contributions, including matching contributions and discretionary profit-sharing contributions. In fiscal year 2023, we matched 50% of the contributions for employees that remain active through the end of the fiscal year, up to a maximum of $2,000. For fiscal year 2024, we changed our matching contribution maximum and will match 50% of the contributions for employees that remain active through the end of the fiscal year, up to a maximum of $4,000. The 401(k) plan currently does not offer the ability to invest in our securities.

As a general matter, the Compensation and Human Capital Committee reviews and considers various tax and accounting implications of compensation programs we utilize.

Under Section 162(m) of the Code (“Section 162(m)”), compensation paid to each of the Company’s “covered employees” that exceeds $1 million per taxable year is generally non-deductible, excluding certain performance-based compensation that qualifies for an exception pursuant to the transition relief provided by the Tax Cuts and Jobs Act.

We follow the Financial Accounting Standards Board’s Accounting Standards Codification Topic 718 (“ASC Topic 718”) for our stock-based compensation awards. ASC Topic 718 requires companies to calculate the grant date “fair value” of their stock-based awards using a variety of assumptions. ASC Topic 718 also requires companies to recognize the compensation cost of their stock-based awards in their income statements over the period that an employee is required to render service in exchange for the award. Grants of stock options and restricted stock units and performance-vesting restricted stock units under our equity incentive award plans are accounted for under ASC Topic 718. The Compensation and Human Capital Committee considers the accounting implications of significant compensation decisions, especially in connection with decisions that relate to our equity award programs. As accounting standards change, we may revise certain programs to appropriately align accounting expenses of our equity awards with our overall executive compensation philosophy and objectives.

We have maintained a Clawback Policy since August 2018. In October 2023, we amended the Clawback Policy to bring it into compliance with the final rules adopted by the SEC pursuant to Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the listing rules of NYSE. Accordingly, our updated Clawback Policy provides that we are generally required to recoup certain incentive compensation received on or after October 2, 2023, if we must restate our financial statements, irrespective of whether executive misconduct is involved in such restatement, subject to certain limited exceptions permitted by the SEC rules, listing standards and applicable laws.

The updated Clawback Policy supersedes and replaces the Company’s prior Clawback Policy for incentive-based compensation received on or after October 2, 2023. Under our prior Clawback Policy, which still applies to incentive compensation received by certain current and former covered officers between August 1, 2018, and prior to October 2, 2023, if we restate our financial statements, our Board generally may recoup the excess portion of cash and equity incentive compensation if our Board determines that an executive officer’s intentional misconduct, fraud and/or embezzlement contributed, in whole or in part, to such restatement.

In order to align the interest of our directors, executive officers, and employees holding a title of senior vice president or higher (collectively “Covered Individuals”) with those of our stockholders, we have adopted stock ownership guidelines (the “Guidelines”) that require, during their respective tenures, the Covered Individuals to maintain ownership of Eligible Shares (as defined below) with an applicable aggregate market value as set forth below:

The Guidelines must be achieved by each Covered Individual by the end of the calendar year in which occurs the date that is five (5) years after the later of (1) the effective date of the Guidelines (July 25, 2022) and (2) the date the individual became a Covered Individual (such period of time, the “Compliance Period”). After the Compliance Period, the Guidelines are revised whenever the base pay changes by 20% or more from the last base pay used to calculate the then-current Guidelines for such Covered Individual (each, an “Adjustment Date”), and such revised Guidelines must be achieved by the affected Covered Individual on or before the end of the calendar year in which occurs the date that is three (3) years after the Adjustment Date.

The following shares of common stock are “Eligible Shares” that shall be included in the calculation of a Covered Individual’s stock ownership, whether or not purchased on the open market or obtained through the exercise of stock options or vesting of equity awards granted by Arlo to such Covered Individual: (1) shares owned outright by the Covered Individual and by members of his or her immediate family (as defined in Rule 16a-1(e) under the Exchange Act) (“Family Member”); (2) shares held in trust for the benefit of the Covered Individual, or for the benefit of a Family Member of such Covered Individual; (3) vested shares under any deferred compensation plan; and (4) vested and unvested time-based restricted stock units, net of the estimated number of shares needed to pay the minimum tax withholding for those vested units. Shares of common stock underlying (i) unexercised options (whether vested or unvested) and (ii) unearned performance-vesting restricted stock units will not be considered Eligible Shares in determining whether a Covered Individual has met the applicable Guidelines.

If a Covered Individual fails to satisfy the Guidelines, the Board may take a number of actions as it determines appropriate, including prohibiting the Covered Individual from selling any shares acquired through the vesting or the exercise of stock awards, other than shares needed to pay applicable taxes and exercise prices, until the Guidelines are met.

As part of our Insider Trading Compliance Program (“Insider Trading Policy”), we require that our executive officers, directors and certain designated employees limit their transactions in our stock to defined time periods, subject to certain exceptions. We also require that executive officers, directors and certain designated employees notify, and receive approval from, a Company clearing officer prior to engaging in transactions in our stock and observe other restrictions designed to minimize the risk of apparent or actual insider trading. These restrictions apply to any entities or family members whose trading activities are controlled or influenced by such executive officer, director or employee.

Further, our Insider Trading Policy prohibits our directors and employees, including our executive officers, from engaging in short sales, transactions in put or call options, hedging of stock ownership positions, pledging Company stock as collateral for a loan, or other inherently speculative transactions with respect to our stock at any time.

Our Compensation and Human Capital Committee has reviewed our compensation policies and practices to assess whether they encourage our employees to take inappropriate risks. After reviewing and assessing our compensation philosophy, policies and practices, including the mix of fixed and variable, short-term and long-term incentives and overall pay, incentive plan structures, and the checks and balances built into, and oversight of, each plan and practice, our Compensation and Human Capital Committee has determined that any risks arising from our compensation policies and practices for our employees are not reasonably likely to have a material adverse effect on our Company as a whole. Further, our Compensation and Human Capital Committee believes that the mix and design of the elements of executive compensation do not encourage management to assume excessive risks; the mix of short-term compensation (in the form of base salary and an annual performance bonus opportunity, if any), and long-term compensation prevents undue focus on short-term results and helps align the interests of our executive officers with the interests of our stockholders.

The Compensation and Human Capital Committee has reviewed and discussed with management the Compensation Discussion and Analysis (the “CD&A”) contained in this proxy statement. Based on this review and discussion, the Compensation and Human Capital Committee has recommended to our Board of Directors that the CD&A be included in this proxy statement and incorporated into our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

The following table sets forth certain information regarding the compensation of our named executive officers for services rendered in all capacities to Arlo for the years ended as of December 31st as indicated.

The following table shows for the fiscal year ended December 31, 2023, certain information regarding grants of plan-based awards to our named executive officers: