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Ceva Inc. – ‘DEF 14A’ for 5/27/21

On:  Friday, 4/16/21, at 4:05pm ET   ·   For:  5/27/21   ·   Accession #:  1437749-21-9132   ·   File #:  0-49842

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  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

 4/16/21  Ceva Inc.                         DEF 14A     5/27/21    1:890K                                   RDG Filings/FA

Document/Exhibit                   Description                      Pages   Size 

 1: DEF 14A     Definitive Proxy Statement                          HTML    517K 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A
(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION
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:

CEVA, Inc.

(Name of Registrant as Specified in Its Charter)

(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

Payment of Filing Fee (Check the appropriate box):

CEVA, INC.

15245 Shady Grove Road, Suite 400

Rockville, Maryland 20850

Notice of Annual Meeting of Stockholders
to be held on May 27, 2021

To the stockholders of CEVA, Inc.:

The annual meeting of stockholders of CEVA, Inc., a Delaware corporation, will be held on Thursday, May 27, 2021, at 10:30 a.m., Eastern Time, virtually via the Internet. Stockholders will be able to listen, vote, and submit questions from any remote location that has Internet connectivity via live webcast by logging in at: www.virtualshareholdermeeting.com/CEVA2021, There will be no physical location for stockholders to attend. The purpose of the annual meeting is to consider and vote upon the following matters:

Our board of directors presently has no knowledge of any other business to be transacted at the annual meeting.

The foregoing items of business are more fully described in the attached proxy statement.

On or about April 16, 2021, we will mail a Notice of Internet Availability of Proxy Materials to our stockholders of record on March 31, 2021. The notice will contain instructions on how to vote your shares and how to access an electronic copy of our proxy materials, including this proxy statement and our annual report to stockholders which contains our 2020 consolidated financial statements and other information of interest to you.

Holders of record of our common stock at the close of business on March 31, 2021 are entitled to receive the Notice of Internet Availability of Proxy Materials, this proxy statement and the 2020 annual report and to vote at the annual meeting.

The 2021 annual meeting will be held in a virtual meeting format only, via the Internet, with no physical in-person meeting. We urge you to attend the annual meeting virtually by logging into our live webcast at: www.virtualshareholdermeeting.com/CEVA2021. However, to ensure your representation at the annual meeting, please vote as soon as possible and refer to the specific instructions for voting on the Notice of Internet Availability of Proxy Materials.

April 16, 2021
Rockville, Maryland

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING: The notice, proxy statement and 2020 annual report are available at http://proxyvote.com.

CEVA, INC.

Proxy Statement

For the Annual Meeting of Stockholders
to be held on May 27, 2021

This proxy statement is furnished to you in connection with the solicitation of proxies by our board of directors for the annual meeting of stockholders to be held on Thursday, May 27, 2021, at 10:30 a.m., Eastern Time, virtually via the Internet,, including any postponements or adjournments thereof. You will be able to attend the annual meeting, vote, and submit questions via live webcast by logging at: www.virtualshareholdermeeting.com/CEVA2021. There will be no physical location for stockholders to attend.

A Notice of Internet Availability of Proxy Materials, this proxy statement, any accompanying proxy card or voting instruction form and our 2020 annual report to stockholders will be made available on or about April 16, 2021 to our stockholders of record on March 31, 2021 at http://proxyvote.com. Paper copies of the proxy materials may be obtained by following the instructions on the Notice of Internet Availability of Proxy Materials. The 2020 annual report incorporates our annual report on Form 10-K for 2020, including financial statements and financial statement schedules, but excluding exhibits, as filed with the Securities and Exchange Commission (the “SEC”). We will provide copies of the exhibits to our annual report on Form 10-K upon the written request of any of our stockholders as of the record date for the annual meeting and payment of a fee, which fee shall be limited to our reasonable expenses in providing such exhibits. Please address your request to CEVA, Inc., 15245 Shady Grove Road, Suite 400, Rockville, Maryland 20850, Attention: Corporate Secretary. Our annual report on Form 10-K, and the exhibits thereto, as well as our other filings with the SEC may be accessed, free of charge, at our website, www.ceva-dsp.com and on the SEC’s website at www.sec.gov, as soon as practicable after filing. Our website and the information contained therein or connected thereto are not intended to be incorporated into this proxy statement.

Notice of Internet Availability of Proxy Materials

Under rules adopted by the SEC, we may furnish our proxy materials to our stockholders over the Internet, rather than mailing printed copies of those materials to each stockholder. Each stockholder who receives a Notice of Internet Availability of Proxy Materials has the right to vote on all matters presented at the annual meeting. Our stockholders will not receive a printed copy of the proxy materials unless requested. Instead, the Notice of Internet Availability of Proxy Materials will provide instructions as to how a stockholder may access and review a copy of our proxy materials on the Internet, including this proxy statement and our 2020 annual report. Internet distribution of our proxy materials is designed to expedite receipt by stockholders, lower the cost of the annual meeting, and conserve natural resources. However, if a stockholder would prefer to receive paper copies of our proxy materials, please follow the instructions included in the Notice of Internet Availability of Proxy Materials. If a stockholder shares an address with another stockholder and has received only one Notice of Internet Availability of Proxy Materials, such stockholder may write to us at the following address to request a separate copy of these materials at no cost to such stockholder: CEVA, Inc., 15245 Shady Grove Road, Suite 400, Rockville, Maryland 20850, Attention: Corporate Secretary. Beneficial owners (i.e. holders of our common stock through a broker dealer, not in their own names) may contact their broker or other nominee to request a separate copy of these materials.

Voting of Proxies

Voting by Proxy Card. All shares entitled to vote and represented by properly executed proxy cards received prior to the annual meeting, and not revoked, will be voted at the annual meeting in accordance with the instructions indicated on those proxy cards.

Voting by Telephone or the Internet. A stockholder may vote his, her or its shares by calling the toll-free number indicated on the Notice of Internet Availability of Proxy Materials and following the recorded instructions or by accessing the website indicated on the Notice of Internet Availability of Proxy Materials and following the instructions provided. When a stockholder votes via the Internet or by telephone, his, her or its vote is recorded immediately. We encourage stockholders to vote using these methods whenever possible.

Voting by Attending the Meeting. A stockholder of record may vote his, her or its shares at the virtual annual meeting. Stockholders who attend the virtual annual meeting should follow the instructions at www.virtualshareholdermeeting.com/CEVA2021 to vote during the meeting, If your shares are held in “street name” or by a broker or nominee, you should follow the instructions at www.virtualshareholdermeeting.com/CEVA2021 to vote during the meeting.

Revocability of Proxies. Any proxy given pursuant to this solicitation may be revoked by the person giving it at any time before it is voted. If the shares of common stock are held in your name, you may revoke your proxy (1) by filing with our Corporate Secretary, before the taking of the vote at the annual meeting, a written notice of revocation or a duly executed proxy card, in either case dated later than the prior proxy relating to the same shares, or (2) by attending the annual meeting and voting at the meeting (although attendance at the annual meeting will not by itself revoke a proxy). Any written notice of revocation or subsequent proxy card must be received by our Corporate Secretary prior to the taking of the vote at the annual meeting. Such written notice of revocation or subsequent proxy card should be sent to CEVA, Inc., 15245 Shady Grove Road, Suite 400, Rockville, Maryland 20850, Attention: Corporate Secretary. In light of disruptions caused by the coronavirus, or COVID-19, if you intend to revoke your proxy by providing such a written notice, we advise that you also send a copy via email to ir@ceva-dsp.com. If your shares are held in “street name” or by a broker or nominee, you should follow the directions provided by your broker or nominee regarding how to revoke your proxy.

If no instructions are indicated on a properly executed proxy card, the shares represented by that proxy card will be voted as recommended by the board of directors.

If a stockholder indicates on a proxy that the shares should be voted “FOR” approval of the matters presented at the annual meeting, the proxy holders will have discretion to vote the shares on any other matters which are properly presented at the annual meeting for consideration, including a motion to adjourn or postpone the annual meeting to another time or place for the purpose of soliciting additional proxies, unless a stockholder expressly withholds authorization for the proxies to use their discretion. Gideon Wertheizer and Yaniv Arieli have been selected as proxy holders by our board of directors and currently serve as our executive officers, and Mr. Wertheizer is also a member of our board of directors.

Stockholders Entitled to Vote

Our board of directors has fixed March 31, 2021 as the record date for determination of stockholders entitled to vote at the annual meeting. Only holders of record of our common stock at the close of business on the record date are entitled to notice of and to vote at the annual meeting. On March 31, 2021, there were 22,811,090 shares of our common stock outstanding and entitled to vote. Each share of common stock will have one vote for each matter to be voted upon at the annual meeting.

Quorum; Votes Required

The holders of a majority of the shares of common stock issued and outstanding and entitled to vote at the annual meeting will constitute a quorum for the transaction of business at the annual meeting. Shares of our common stock held by stockholders present in person or represented by proxy, including shares held by stockholders that abstain or do not vote with respect to one or more of the matters presented for stockholder approval, will be counted for purposes of determining whether a quorum is present at the annual meeting. Virtual attendance at our annual meeting constitutes presence in person for purposes of quorum at the meeting. An automated system administered by Broadridge Financial Solutions Inc. will tabulate votes cast by proxy and a representative from Broadridge will act as inspector of elections to tabulate votes cast at the annual meeting.

Under the General Corporation Law of the State of Delaware, abstentions are included in determining the number of shares voted on the proposals submitted to stockholders (other than the election of directors) and will have the same effect as a “no” vote on such proposals. A broker “non-vote” occurs when a broker or nominee holding shares for a beneficial owner does not vote on a particular matter because such broker or nominee does not have the discretionary voting authority to vote the shares for which it is the holder of record with respect to a particular matter at the annual meeting and such broker or nominee has not received voting instructions from the beneficial owner. Broker “non-votes,” and shares as to which proxy authority has been withheld with respect to any matter, are generally not deemed to be entitled to vote for purposes of determining whether stockholders’ approval of that matter has been obtained. If you provide voting instructions, your shares will be voted as you direct. If you do not furnish voting instructions with respect to shares registered in the name of organizations that are not governed by NASDAQ Rule 2251, those shares will not be voted at the meeting because such organizations do not have discretionary voting power. If you do not furnish voting instructions to brokerage firms that are governed by NASDAQ Rule 2251, one of two things can happen, dependent on whether a proposal is “routine.” Under NASDAQ Rule 2251, brokerage firms, banks, broker-dealers and other similar organizations have discretion to cast votes on routine matters, such as the ratification of the appointment of an independent auditor, without voting instructions from their clients. Brokerage firms, banks, broker-dealers and other similar organizations are not permitted, however, to cast votes on “non-routine” matters, such as the election of directors or votes on the compensation of the Company’s named executive officers, without such voting instructions.

With respect to proposal 1 of this proxy statement, in an uncontested election, each director nominee will be elected by a majority of the shares present or represented by proxy and voting at the meeting with respect to his/her election (that is, the number of shares voted “for” that nominee exceeds the number of votes cast “against” that nominee). Virtual attendance at our annual meeting constitutes presence in person for purposes of the vote required under our bylaws. In an uncontested election, any nominee for director who fails to receive a greater number of votes cast “for” such individual’s election than votes cast “against” such election shall promptly tender his or her resignation to our board of diectors following certification of the stockholder vote. The nomination and corporate governance committee of the board will promptly consider the resignation offer and recommend to the board of directors the action to be taken with respect to such offered resignation. The board of directors will consider and act on the nomination and corporate governance committee’s recommendation. Thereafter, the board of directors will disclose promptly its decision whether to accept the director’s resignation and the reasons for the decision, if applicable, in a public filing with the Securities Exchange Commission within 90 days following the date of the certification of the annual meeting election results. Any director tendering a resignation under such circumstances will not participate in the decision-making by the nomination and corporate governance committee or the board of directors regarding whether or not to accept the resignation offer.

With respect to proposals 2 of this proxy statement, the affirmative vote of a majority of shares of our common stock present or represented and voted at the annual meeting is required for approval. With respect to proposal 3 of this proxy statement, the affirmative vote of a majority of shares of our common stock present or represented and voted at the annual meeting is required for approval, although such vote will not be binding on us. Abstentions will have no effect on the outcome of the election of the director nominees and will have the same effect as “no” votes on proposals 2 and 3. Broker “non-votes” will have no effect on any of the proposals. Virtual attendance at our annual meeting constitutes presence in person for purposes of the vote required under our bylaws.

Expenses of Solicitation

We will bear all expenses of this solicitation, including the cost of preparing and mailing this solicitation material. We may reimburse brokerage firms, custodians, nominees, fiduciaries, and other persons representing beneficial owners of common stock for their reasonable expenses in forwarding solicitation material to such beneficial owners. Directors, officers and employees of the company may also solicit proxies by telephone, letter, electronic mail, facsimile or other means of communication. Such directors, officers and employees will not be additionally compensated, but they may be reimbursed for reasonable out-of-pocket expenses in connection with such solicitation.

Security Ownership of Certain Beneficial Owners and Management

The following table sets forth information, as of March 31, 2021, regarding the beneficial ownership of shares of our common stock by (a) each person or entity known by us to own beneficially more than 5% of the outstanding shares of our common stock, (b) each of our “named executive officers,” as described in the 2020 Summary Compensation Table below, (c) each of our director and director nominee, and (d) our directors and executive officers as a group. The address of each of our directors and named executive officers is c/o CEVA, Inc., 15245 Shady Grove Road, Suite 400, Rockville, Maryland 20850.

Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission, and generally includes voting power and/or investment power with respect to the shares of common stock. The percentages are based on 22,811,090 shares of our common stock outstanding as of March 31, 2021. Shares of our common stock subject to equity-based awards currently exercisable or exercisable within 60 days of March 31, 2021 are deemed outstanding for purposes of computing the percentage beneficially owned by the person holding the options, but are not deemed outstanding for purposes of computing the percentage beneficially owned by any other person. Except as indicated by footnote, we believe that the persons named in this table, based on information provided by them, have sole voting and investment power with respect to the shares of common stock indicated.

Equity Compensation Plan Information

The following table sets forth certain information regarding our equity compensation plans as of December 31, 2020.

PROPOSAL 1—ELECTION OF NINE DIRECTORS

Unless otherwise instructed, the persons named in the accompanying proxy will vote to elect as directors the nine nominees named below, all of whom are currently directors of CEVA. Each director will be elected to hold office until the 2022 annual meeting of stockholders and until his or her successor is elected and qualified. Each of the nominees has indicated his or her willingness to serve on our board of directors, if elected; however, if any nominee should be unable to serve, the person acting under the proxy may vote the proxy for a substitute nominee designated by our board of directors. Our board of directors has no reason to believe that any of the nominees will be unable to serve if elected.

The following table sets forth certain information with respect to our directors as of March 15, 2021.

(1)         Member of audit committee.

(2)         Member of compensation committee.

(3)         Member of nomination and corporate governance committee.

CORPORATE GOVERNANCE

Corporate Governance Overview

Our board of directors is committed to strong and effective corporate governance, and, as a result, it regularly monitors our corporate governance policies and practices to ensure compliance with applicable laws, regulations and rules, as well as best practices.

Our corporate governance program features the following:

Board Leadership Structure

Our board of directors has a chairman who is a non-employee director. Our chairman is responsible for chairing board meetings and meetings of stockholders, assisting management in setting the agendas for board meetings, providing information to the board members in advance of meetings and between meetings and providing guidance to our Chief Executive Officer on corporate strategies. Our Chief Executive Officer joined as a member of our board in January 2010. Our Chief Executive Officer is responsible for implementing the strategic direction of the company and the day to day leadership and performance of the company. Our board of directors unanimously appointed our Chief Executive Officer to the board in consideration of the insights he brings to the board in light of his day to day leadership of the company and intimate knowledge of our business, operations, technology and sale channels.

The Board’s Role in Risk Oversight

Our board of directors utilizes an enterprise-wide approach to risk management, designed to support the achievement of business objectives, including organizational and strategic objectives, improve long-term organizational performance and enhance stockholder value. The involvement of the full board in setting our business strategy is a key part of its assessment of management’s plans to deal with business risks and determination of what constitutes an appropriate level of risk for the company. While our board has risk oversight responsibility, management is responsible for assessing and managing material risk exposures. Our board’s role in the company’s risk oversight process includes receiving regular reports from members of senior management on areas of material risk to the company, including operational, financial, legal and regulatory, cybersecurity, and strategic and reputational risks. While the full board has the ultimate oversight responsibility for the risk management process, various committees of the board also have responsibility for risk management. For example, financial, legal, IT, cybercurity and general business risks, including internal controls and oversight of management’s maintenance of the corporate risk register, are overseen by the audit committee. Risks that may be implicated by our executive compensation programs are overseen by the compensation committee and from time to time by the nomination and corporate governance committee. Upon identification of a risk, the assigned board committee or the full board discuss or review risk management and risk mitigation strategies. Additional review or reporting on enterprise risks is conducted as needed or as requested by the board or committee.

Director Independence

Our board of directors has determined that all members of the board, except Mr. Wertheizer, who is our Chief Executive Officer, are independent pursuant to the NASDAQ listing rules. In making this determination, our board of directors considered transactions and relationships between each director or his or her immediate family and the company and our subsidiaries, including those reported in the section below captioned, “Transactions with Related Parties.” The purpose of this review was to determine whether any such relationships or transactions were material and, therefore, inconsistent with a determination that the director is independent. As a result of this review, our board affirmatively determined that all of our directors, except Mr. Wertheizer, who is our Chief Executive Officer, are independent under the standards set forth by the NASDAQ listing rules.

Relationships among Directors or Executive Officers

There are no family relationships among any of our directors or executive officers.

Board of Directors Meetings

Our board of directors met four times in meetings or telephonically during 2020 and acted by written consent twice in 2020. All directors attended at least 75% of the meetings of our board of directors. It is the policy of our board that the independent directors shall meet separately with no members of management present in executive sessions on a routine basis, but no less than twice annually, to review and discuss, among other things, the company’s strategy, performance and management effectiveness.

Board Committees

Our board of directors has standing audit, compensation, and nomination and corporate governance committees – each of which operates under a charter that has been approved by the board. Current copies of each of the audit, compensation and nomination and corporate governance committee’s charters are posted on the corporate governance section of our website, www.ceva-dsp.com. Our board also has an ad hoc investment committee.

The primary purpose of the audit committee is to assist the board of directors in fulfilling its responsibility to oversee the accounting and financial reporting processes of CEVA and audits of the financial statements of CEVA. The members of the audit committee are Zvi Limon, Sven-Christer Nilsson and Louis Silver. Mr. Silver serves as the chairman of the audit committee. Mr. Nilsson has been determined as the audit committee financial expert. The audit committee met five times in meetings or telephonically during 2020. All of the members of the audit committee are independent as defined by the NASDAQ listing standards and as defined under the independence requirements of Rule 10A-3 under the Exchange Act.

The primary purposes of the compensation committee are to discharge the responsibilities of the board of directors relating to compensation of CEVA’s executive officers, to make recommendations with respect to new incentive compensation and equity-based plans and to make recommendations regarding director compensation and administration of CEVA’s equity compensation plans. The members of the compensation committee are Zvi Limon, Maria Marced and Lou Silver (effective from March 2021). Mr. Limon serves as the chairman of the compensation committee. Bruce Mann served as a member of the compensation committee until his retirement on February 15, 2021. The compensation committee met four times in meetings or telephonically in 2020 and acted by written consent four times in 2020. All of the members of the compensation committee are independent as defined by the NASDAQ listing standards.

The primary purpose of the nomination and corporate governance committee is to recommend to the board of directors the persons to be nominated for election as directors at any meeting of stockholders; develop and recommend to the board of directors a set of corporate governance principles applicable to CEVA and to oversee the evaluation of the board of directors and management. The members of the nomination and corporate governance committee are Sven-Christer Nilsson, Jaclyn Liu and Bernadette Andrietti (both effective from March 2021). Mr. Nilsson serves as the chairman of the committee. Bruce Mann served as a member of the nomination and corporate governance committee until his retirement on February 15, 2021. The nomination and corporate governance committee met two times in meetings or telephonically in 2020. All members of the nomination and corporate governance committee are independent, as defined by the NASDAQ listing standards.

Audit Committee

The audit committee’s responsibilities include:

Audit Committee Financial Expert

Our board of directors has determined that Mr. Nilsson qualifies as an audit committee financial expert, as defined by the applicable rules of the Exchange Act, pursuant to the fact that, among other things, he was the Chief Executive Officer and President of The Ericsson Group, and in those capacities had acquired the relevant experience and expertise and has the attributes set forth in the applicable rules as being required for an audit committee financial expert. Furthermore, each member of our audit committee has demonstrated that he is capable of (i) understanding generally accepted accounting principles (“GAAP”) and financial statements, (ii) assessing the general application of GAAP principles in connection with the accounting for estimates, accruals and reserves, (iii) analyzing and evaluating financial statements, (iv) understanding internal controls and procedures for financial reporting, and (v) understanding audit committee functions.

Compensation Committee

The compensation committee’s responsibilities include:

Nomination and Corporate Governance Committee

The nomination and corporate governance committee’s responsibilities include identifying individuals qualified to become board members and recommending to the board the persons to be nominated for election as directors and to each of the board’s committees. The committee assists the board in all matters relating to the establishment, implementation and monitoring of policies and processes regarding the recruitment and nomination of candidates to the board and committees of the board, and the development, evaluation and monitoring of our corporate governance processes and principles. The committee also is responsible for developing, implementing and monitoring compliance of our code of business conduct and ethics, and corporate guidelines and making recommendations to the board of revisions to the code and the guidelines from time to time as appropriate.

Director Annual Evaluation

It is important to the company that the board and its committees are performing effectively and in the best interest of the company and its stockholders. The board performs an annual self-assessment, led by the chair of the nomination and corporate governance committee, to evaluate its effectiveness in fulfilling its obligations. As part of this annual self-assessment, directors are able to provide feedback on the performance of other directors. The chair of the nomination and corporate governance committee then follows up on this feedback and takes such further action as he deems appropriate.

Director Candidates

The process to be followed by the nomination and corporate governance committee to identify and evaluate director candidates includes requests to board members and others for recommendations, meetings from time to time to evaluate biographical information and background material relating to potential candidates and interviews of selected candidates by members of the committee and the board.

In considering whether to recommend any particular candidate for inclusion in our board’s slate of recommended director nominees, the nomination and corporate governance committee only considers candidates who have demonstrated executive experience, have experience in an applicable industry, or significant high level experience in accounting, legal or an applicable technical field. Other criteria will include the candidate’s integrity, business acumen, knowledge of our business and industry, experience, diversity, diligence, conflicts of interest and the ability to act in the interests of all stockholders. The committee will not assign specific weights to particular criteria and no particular criterion is a prerequisite for each prospective nominee. We believe that the backgrounds and qualifications of our directors, considered as a group, should provide a composite mix of experience, knowledge and abilities that will allow the board to fulfill its responsibilities.

The nomination and corporate governance committee has adopted a policy of accepting recommendations from stockholders for consideration as potential director candidates. Stockholders who wish to submit a recommendation for potential director candidate for consideration should follow the procedures set forth under “Stockholder Proposals for 2022 annual meeting and Nominations of Persons for Election to the Board of Directors.” Assuming that appropriate biographical and background material has been provided on a timely basis, the committee will evaluate stockholder-recommended candidates by following substantially the same process, and applying substantially the same criteria, as it follows for candidates submitted by others. If the board determines to nominate a stockholder-recommended candidate and recommends his or her election, then his or her name will be included in our proxy materials for the next annual meeting.

Stockholders also have the right under our by-laws to directly nominate director candidates, without any action or recommendation on the part of the nomination and corporate governance committee or the board, by following the procedures set forth under “Stockholder Proposals for 2022 annual meeting and Nominations of Persons for Election to the Board of Directors.”

We have not received a director nominee recommendation from any stockholder (or group of stockholders) that beneficially owns more than five percent of our common stock.

Director Diversity

Our board of directors is committed to actively seek women and minority director candidates for consideration. One third of our board are comprised of women. Our board values diversity and diversity is one of the factors considered by our nomination and corporate governance committee in the director identification and nomination process. The nomination and corporate governance committee seeks to have a slate of candidates for election that represents a diverse set of views, experiences, professions, education, skills, geographic representation and backgrounds.

Leadership Succession

Our board of directors is committed to adding new directors to infuse new ideas and fresh perspectives in the boardroom. As part of our board’s succession planning, the nomination and corporate governance committee and our board regularly review the composition of the board and assess the balance of knowledge, experience, skills, expertise, tenure and diversity that is appropriate for the board and the company. In that regard, we added Ms.  Andrietti to our board in 2019 and Ms. Liu in 2021.

Our board of directors also plans for succession to the position of Chief Executive Officer. To assist the board with its review, our Chief Executive Officer periodically provides the board with an assessment of senior executives and their potential to succeed to the position of Chief Executive Officer. For example, the board appointed Mr. Boukaya as our Chief Operating Officer in April 2019 after years of mentoring by our Chief Executive Officer to prepare him for such a position. Our Chief Executive Officer also provides the board with an assessment of potential successors to key positions. In addition, Dana Maor Megiddo, a seasoned human resources executive with years of experience joined the company in 2020 and is helping to reshape the company’s processes for promotion of its employees, workforce training and the identification of the next generation of leaderships with in the company. Furthermore, through invitation to its meetings and access to key employees, our board of directors has the opportunity to meet with leaders of our company and conduct its own analysis of the company’s culture and employees.

Board Tenure

Our board of directors recognizes that its current members have served on the board of directors for various tenures, with the shortest tenure being less than one year, but with many other directors serving for 10 years or more. Our board of directors believes that the board represents a balance of industry, technical and financial experiences, which provide effective guidance and oversight to management. Our governance policies reflect our belief that directors should not be subject to term limits. While term limits could facilitate fresh ideas and viewpoints being consistently brought to the board, we believe they are counterbalanced by the disadvantage of causing the loss of a director who over a period of time has developed insight into our strategies, operations, and risks and continues to provide valuable contributions to board deliberations. Nonetheless, we have heard our stockholders’ desire for board refreshment. Our board of directors is committed to adding new directors to infuse new ideas and fresh perspectives in the boardroom. Our nomination and corporate governance committee assesses the continuing independence of long-tenured directors from management as part of its determination on whether to nominate an incumbent director for re-election. In addition to the retirement of Mr. Mann, we have undertaken various steps to augment our current board tenure, including the appointment of Ms. Andrietti to our board in 2019 and Ms. Liu in 2021. We will continue to monitor board tenure and consider changes as appropriate.

Stockholder Engagement

Our board of directors and management focus on creating long-term, sustainable stockholder value. Key to this goal is stockholder engagement at conferences and in one-on-one meetings to discuss our financial performance, corporate governance practices, executive compensation programs and other matters. Our conversations with stockholders allow us to better understand our stockholders’ perspectives and provide us with useful feedback to calibrate our priorities.

Since 2019, we undertake a comprehensive, annual stockholder engagement process to gain insights into our stockholders’ concerns and identify areas for improvement within our executive compensation program and corporate governance matters generally. In accordance with the importance that our board of directors places on stockholder engagement, the chair of our board of directors, Peter McManamon, conducts the stockholder outreach with assistance from management. In 2021, our chairman reached out to our 19 largest stockholders (who at the time owned approximately 62% of our issued and outstanding common stock) in a letter summarizing recent developments of the company and offered to listen to their perspectives and concerns, if any, in follow-up, individualized engagements. Stockholders, who at the time owned approximately 35% of our issued and outstanding common stock responded to Mr. McManamon’s letter and engaged with Mr. McManamon to provide him with their perspectives and viewpoints.

We welcomed the feedback we received during our engagement with our stockholders. The table below describes what we heard from our stockholders and how we implemented improvements to address our stockholders’ feedback.

Communicating with the Independent Directors by Stockholders

The board will give appropriate attention to written communications that are submitted by stockholders, and will respond if and as appropriate. The chairman of the nomination and corporate governance committee, with the assistance of our corporate secretary, is primarily responsible for monitoring communications from stockholders and for providing copies or summaries to the other directors as he considers appropriate.

Communications are forwarded to all directors if they relate to important substantive matters and include suggestions or comments that the chairman of the nomination and corporate governance committee or the corporate secretary considers to be important for the directors to know. In general, communications relating to corporate governance and long-term corporate strategy are more likely to be forwarded than communications relating to ordinary business affairs, personal grievances and matters as to which we tend to receive repetitive or duplicative communications.

Stockholders who wish to send communications on any topic to the board should address such communications to Board of Directors c/o Corporate Secretary, CEVA, Inc., 15245 Shady Grove Road, Suite 400, Rockville, Maryland 20850.

Prohibition on Pledging and Hedging of Company Securities

Pursuant to our insider trading policy, all employees of the company, including executive officers, as well as directors, are prohibited from engaging in short-term or speculative securities transactions with respect to the our common stock, such as short sales, puts, calls and other exchange-traded derivatives. Since the inception of the policy, no director or executive officer has pledged or hedged any company shares. Nonetheless, in 2020, the board of directors enhanced the policy to eliminate the availability of any waiver for pledging or hedging by directors and employees, including executive officers.

Code of Business Conduct and Ethics

Our board of directors adopted a code of business conduct and ethics. This code applies to all of our employees and is posted on the corporate governance section of our website at www.ceva-dsp.com. The code satisfies the requirements under the Sarbanes-Oxley Act of 2002, NASDAQ rules applicable to issuers listed on the NASDAQ Market and the Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework). The code, among other things, addresses issues relating to conflicts of interests, including internal reporting of violations and disclosures, and compliance with applicable laws, rules and regulations. The purpose of the code is to deter wrongdoing and to promote, among other things, honest and ethical conduct and to ensure to the greatest possible extent that our business is conducted in a legal and ethical manner. Any waivers to the code with respect to our executive officers and directors may be granted only by the audit committee. Any waivers to the code with respect to the remainder of the employees may be granted by the corporate compliance officer, which is currently our Chief Financial Officer. Any waivers to the code and any amendments to the code applicable to our Chief Executive Officer, Chief Financial Officer, principal accounting officer, controller or persons performing similar functions, will be posted on our website.

Our audit committee has also established procedures for (a) the receipt, retention and treatment of complaints received by us regarding accounting, internal accounting controls or auditing matters, as well as any other complaints, and (b) the confidential, anonymous submission via a third party vendor by our employees of concerns regarding questionable accounting or auditing matters, as well as any other complaints.

Environmental, Social and Governance (ESG)

We are committed to being a responsible corporate citizen in advancing environmental, social and governance initiatives. We recognize that certain ESG issues can have real financial impact over the long-term. This is why we are proactively working to better understand and manage ESG risks and opportunities that are relevant to our business. In that regard, our board of directors determined that the management and oversight of ESG matters are critical responsibilities of the board. In addition, we set up a taskforce within the company to oversee the creation of an ESG framework. Using the technology and communication sector (semiconductor industry) standards issued by the Sustainability Accounting Standards Board as a guidepost, our ESG framework addresses environmental controls, resource conservation and recycling, employee engagement, diversity and inclusion, employee health and safety, corporate governance and business ethics.

Environmental

We operate environmentally responsible practices within our business, recognizing our responsibility to our customers, stockholders, suppliers, employees and society at large. We are committed to protecting the environment and to operate our business sustainably. We strive to comply with regulatory and industry standards at all of our locations of business and expect all of our employees, vendors and visitors to act in an environmentally responsible manner and reduce carbon footprint. We recognize that this is a constant commitment and we endeavor to improve our operations through constant assessment with the goal of environmental sustainability in mind.

By the very nature of our business as an IP developer and licensor of low-power signal processing technologies, our operations have a lower impact on the environment than traditional semiconductor businesses. We do not manufacture any products or purchase harmful chemicals that might have a negative impact on the environment, such as ozone-depleting chemicals (ODCs). Instead, we provide our customers with the blueprints required to develop chips that are smaller, cheaper, require less power (in some cases battery-free and even energy-harvesting) and have a positive impact on the wider environment. In fact, our technologies are energy-saving by design, always seeking to be lower power than the existing or alternative solutions in the market.

Nevertheless, we recognize that our operations do have an impact on the environment through our energy consumption and general day-to-day office operations which generate waste and require water. We will continue to measure and endeavor to reduce our energy usage per capita at each of our sites and implement wasteful practices wherever possible.

The tenets of our environmental initiative are:

Social (Human Capital Management)

Our social commitment is reflected through our employees and our corporate culture. Our organization’s culture can be described as an open, interactive and team oriented work philosophy where everyone’s contribution is welcome and valued. We recognize that our employees are vital to the company success and we openly encourage our employees to develop their skills while working with the company. We endeavor to create a culture of innovation and inspiration where employees feel a strong sense of community and collective pride in the company’s success through policies that promote employee well being, encourage employee health and fitness, and promote personal and career development.

We have three main company values and these were developed to help us deliver commitments made to employees and customers:

Particularly, we are committed to equal opportunity and strive to reflect the diversity of the communities where we do business. We invest in building diverse talent pools and providing training to improve skill levels, where appropriate. We prohibit discrimination based on race, color, national origin, religion, religious creed, ancestry, sex, gender, gender identity, gender expression, sexual orientation, age, marital status, mental and/or physical disability, medical condition as defined by applicable law, military service or veteran status, genetic information, pregnancy, childbirth and related medical conditions, or any other category protected by applicable law. The electronic engineering sector in general performs poorly in terms of gender diversity. At CEVA, we are actively trying to improve gender diversity, both at Board level and within the workforce. Female representation on our board of directors is 33% (3 out of 9 directors), and female representation in our workforce overall is 21% as of December 31, 2020 (86 out of 404 employees). In 2020 compared to 2019 and overall in the last two years 2020 and 2019 combined, the run rate of hiring females at CEVA was higher than men. 16% and 21% for female, compared to 10% and 17% for men, both respectively We are committed to continuing to raise awareness amongst women, both inside and outside the company, about the exciting opportunities available to them at CEVA and to encourage them to embark on a career with us.

Our human capital successes are evident in the number and quality of hires we have made. Reinforcement of the culture we are building comes through engagement with our employees, the reward principles we apply to compensation and promotion decisions and through our various talent development initiatives. Our board of directors is actively engaged in human capital management. Our board periodically reviews management succession plans. More broadly, the board is regularly updated and consulted on key talent hires, as well as the company’s human capital strategy. This strategy is continuously refined based on business drivers and the overall environment for talent.

Governance

With respect to corporate governance, as noted in this proxy statement, our board of directors is composed of all independent directors except for our Chief Executive Officer. We have annual director election based on a majority voting standard. We have director and executive officer stock ownership requirement and a prohibition on pledging and hedging of our stock. Our board has executive sessions generally after all board meetings and our nomination and corporate governance committee conducts annual board evaluations. We have various stockholder protections, including voting rights for all shares, no poison pill and no supermajority voting provisions. Finally, we have a culture of high integrity and business ethics which starts with our code of conduct and business ethics. We have procedures to address compliance and ensure awareness of our policies and expectations for ethical behavior. We conduct quarterly communication meetings on a world-wide basis to update all employees on our financial, business and technology achivements and reinforce ourcorporate goals and values. See additional details about our corporate governance policies under the section titled “Corporate Governance Overview” as illustration of our board’s commitment to strong and effective corporate governance.

Our sustainable policy, which reflects our core values, is posted on the company section of our web site at www.ceva-dsp.com/sustainability.

Workforce and COVID-19

Our commitment to our employees and our organization’s culture became ever more important as we responded to the challenges of the COVID-19 pandemic. Like many companies around the world, we facilitated the majority of our employees to work from home and have since adopted a hybrid model that provides flexibility to each employee’s circumstances. At CEVA, we recognize all of our employees’ needs and concerns, and have adopted flexible working arrangements to ensure they remain in good health and secure in the knowledge that they have the full support of the company and its resources. We arranged for technical support and various office supplies to be delivered to employees to enable the best work-from-home environment to ensure productivity and wellbeing. We use a range of technologies, including Zoom, Microsoft Teams and Skype, to communicate with our employees, conduct welfare activities, provide online training and recruit new employees to CEVA. Through the hard work and dedication of our employees, our business has gone from strength to strength during this uncertain period.

Cybersecurity and Data Protection

We take various measures to ensure the integrity of our systems, including implementation of security controls and regular training of our employees with respect to measures we can take to enable us to thwart cybersecurity attacks. While the full board has the ultimate oversight responsibility, our audit committee review the risk management processes relating to cybercurity on a regular basis. Further, all of our employees are trained at least annually on our information security procedures.

Director Attendance at Stockholder Meetings

We have adopted a guideline providing that, in light of the geographic dispersion of our directors, the directors’ attendance at the annual meeting of stockholders is encouraged but not required. Our 2020 annual meeting of stockholders was conducted virtually due to COVID-19 travel restrictions and safety of the board memebrs and management, and was attended by all directors except Bruce Mann, whose absence related to time zone differences.

Transactions with Related Parties

One of our directors, Jaclyn Liu, is a senior partner of Morrison & Foerster LLP, our outside legal counsel. Agregate fees paid to Morrison & Foerster LLP for the year ended December 31, 2020 were approximately $462,000.

We have entered into indemnification agreements with each of our directors and executive officers. Such agreements require us to indemnify such individuals to the fullest extent permitted by Delaware law.

Review, Approval or Ratification of Transactions with Related Persons

We have adopted a written policy regarding related person transactions which is incorporated in the charter of the audit committee. Pursuant to this policy, our audit committee must review and approve any such transactions. There were no related party transactions in 2020.

Legal Proceedings

To our knowledge, no material proceedings exist to which any director, officer or affiliate of CEVA, any owner of record or beneficially of more than 5% of any class of voting securities of CEVA, or any associate of any such director, officer, affiliate of CEVA, or security holder is a party adverse to us or any of our subsidiaries or has a material interest adverse to us or any of our subsidiaries.

No Supermajority Vote on Approval of Mergers or Other Business Combinations

Our corporate governance documents do not contain a supermajority standard for the approval of a merger or a business combination. Such transactions require the affirmative vote of a majority of the outstanding shares.

Corporate Governance Guidelines

Our board of directors adopted a set of corporate governance guidelines which set forth the practices our board follows with respect to, among other things, the composition of the board and board committees, director responsibilities, director continuing education and performance evaluation of the board. The guidelines are posted on the IR section of our web site at www.ceva-dsp.com.

EXECUTIVE OFFICERS

The following table sets forth certain information with respect to our executive officers as of March 31, 2021.

EXECUTIVE COMPENSATION

Compensation Discussion & Analysis

Overview of Compensation Philosophy and Objectives

We operate in a very competitive, dynamic and challenging industry. The compensation committee, which establishes our compensation policy, seeks to achieve the following three broad goals in connection with our executive compensation program:

We believe that our executive officers’ compensation should not be based on the short-term performance of our stock, whether favorable or unfavorable, but rather that the price of our stock will, in the long-term, reflect our operating performance and ultimately the management of the company by our executive officers. Our policy for allocating between short-term and long-term compensation is to ensure adequate base compensation to attract and retain key personnel, while providing incentives to maximize long-term value for our company and our stockholders. We further believe that our executive officers’ total annual cash compensation should vary with the company’s performance and that the higher an executive officer’s level of responsibility within the company, the greater the percentage of such executive officer’s compensation should be tied to the company’s performance. However, notwithstanding the above principles, we rely upon judgment and not upon rigid guidelines or formulas in determining the amount and mix of compensation elements for each executive officer.

The compensation committee believes that the company’s executive compensation program closely links to the company’s business strategies, aligns pay with performance and reflects competitive practices regarding executive compensation.

The compensation committee, which is comprised solely of independent, non-employee board members, has the authority and responsibility to establish our overall compensation strategy, including reviewing, analyzing and approving the compensation structure for our Chief Executive Officer, our executive and non-executive officers and other key employees each fiscal year; and administer our incentive compensation and benefit plans, 401(k) plan, and equity incentive and purchase plans. The compensation committee regularly updates the board of directors with respect to its undertakings in establishing the company’s overall compensation strategy. Messrs. Limon and Mann, and Ms. Marced were the members of the compensation committee in 2020 with Mr. Limon as the chairman. Mr. Mann retired from our Board and Board committees on February 15, 2021. Mr. Silver replaced Mr. Mann on the compensation committee.

Executive Compensation Practices at a Glance

Role of Chief Executive Officer in Compensation Decisions

In its annual review of each executive officer’s total compensation, the compensation committee takes into consideration the assessment of the performance of each executive officer by Mr. Wertheizer, our Chief Executive Officer (other than his own performance, which is reviewed solely by the compensation committee), their accomplishments, and individual and corporate performance of each such executive officer, including Mr. Wertheizer’s recommendation with respect to salary adjustments and annual equity award amounts. Mr. Wertheizer’s recommendations are generally approved by the compensation committee.

Role of Compensation Consultants in Compensation Decisions

The charter of the compensation committee authorizes the committee to engage the services of consultants to assist in the determination of our executive officers’ compensation. The compensation committee engaged the services of Compensia, Inc., an independent compensation consultant, in 2019 to survey the latest trends and best practices in relation to the compensation of executive officers among the company’s peer group. The information provided by Compensia was considered by the compensation committee for purposes of setting the compensation of the executive officers of the company for 2020.

Compensation Consultant Independence

To ensure independence, the compensation committee, as needed, will directly engage a compensation consultant and determine its independence. The compensation committee determined that Compensia is independent under applicable SEC and Nasdaq rules, based on the committee’s review of the services provided to the company, and concluded that no conflict of interest existed that would prevent Compensia from independently advising the compensation committee.

2020 “Say on Pay” Advisory Vote on Executive Compensation

Our stockholders provide an advisory vote annually on executive compensation. At our 2020 annual meeting of stockholders, approximately 99% of the votes cast in the “say on pay” advisory vote were “FOR” approval of our executive compensation.

Principal Elements of Executive Compensation

Compensation of our executive officers consists of three principal components: base salary, annual cash award payable pursuant to a performance-based bonus plan and long‑term equity incentive compensation. In 2020, long-term equity incentive compensation to our executive officers consisted of restricted stock units (“RSUs”) and PSUs.

Base Salary. The base salaries of our executive officers are reviewed annually and are set by the compensation committee. Base salaries for executive officers, including the Chief Executive Officer, are generally determined on an individual basis by evaluating (i) the executive’s scope of responsibility and changes in job responsibility, performance, prior employment experience and salary history; (ii) our financial performance, including changes in our revenues and profits, during the year; (iii) competitive market conditions for executive compensation; and (iv) internal consistency within our salary structure. The base salaries of Messrs. Wertheizer, Arieli and Boukaya are denominated in New Israeli Shekel (NIS) in consideration that these executive officers reside in Israel. Mr. Ohana’s base salary is denominated in U.S. dollars, as he resides in the U.S. Each of Messrs. Wertheizer, Arieli and Ohana has not receivee any salary increase since 2018. Mr. Boukaya did not receive an increase in his base salary after his appointment as Chief Operating Officer in April 2019 but an increase of 4.6% effective Jaunary 1, 2021 was approved by the compensation committee in February 2021.

Annual Cash Award. The compensation committee believes that an annual performance-based cash award component for compensation to supplement base salaries of executive officers provides an important incentive to the achievement of corporate goals.

2020 Executive Bonus Plan

In February 2020, the compensation committee established a 2020 Executive Bonus Plan for each of Messrs. Wertheizer, Arieli and Boukaya, effective January 1, 2020 to December 31, 2020. The committee believed that the 2020 Executive Bonus Plan was an important part of maintaining the overall competitiveness of the company’s executive compensation program.

Parameters of the 2020 Executive Plan are as follows:

Under the 2020 Executive Bonus Plan, the target annual cash incentive award opportunities for each of Messrs. Wertheizer, Arieli and Boukaya are established as a percentage of each such executive officer’s base salary for 2020. The target and maximum award opportunities for Messrs. Wertheizer, Arieli and Boukaya for 2020 with respect to the Revenue Target and EPS Targets are as follows:

In addition to the above components for the 2020 Executive Bonus Plan representing 80% weighting, the goals below related to specific acheivements in the North America region, referred to as the North America Targets, have a weighting of 20% for the 2020 Executive Bonus Plan, but with payouts based on 100% of base salary rather than the applicable target percentage of base salary:

Payment of bonuses (if any) under the 2020 Executive Bonus Plan are made in 2021. Bonuses are paid in cash in a single lump sum, subject to payroll taxes and tax holdings. 

The compensation committee believes revenue and EPS goals are the appropriate targets to primarily base the 2020 Executive Bonus Plan because it reflects management’s efforts in determining new markets, developing new technologies and executing on initiatives to expand and grow the company. Such factors represent short term success or failure of the company and align management’s interests with that of stockholders. Moreover, the addition of North America Targets that represented 20% of the 2020 Executive Plan was to incentivize the executive officers to further diversify the company’s revenue streams and enhance the company’s growth beyond organic growth through internal research and development efforts, as well as various management efforts to penetrate new markets.

2020 Executive Bonus Plan Payments. In 2020, the company successfully achieved its 2020 Revenue Target and the 2020 EPS Target, specifically that the revenue target was exceeded by 6% and the EPS target was exceeded by 11%. However, only one component of the North America Targets, specifically the OEM Target, was partially achieved and the threshold for the other two components of the North America Targets were not met. Based on the parameters of the 2020 Executive Bonus Plan, bonuses of $438,735, $191,600 and $147,385 will be paid to each of Messrs. Wertheizer, Arieli and Boukaya under the 2020 Executive Bonus Plan.

Mr. Wertheizer’s bonus was calculated as follows:

Mr. Arieli’s bonus was calculated as follows:

Mr. Boukaya’s bonus was calculated as follows:

Compensation of Chief Executive Officer. The determination by the compensation committee of the remuneration of Mr. Wertheizer in 2020 generally was based upon methods consistent with those used for our other executive officers. The compensation committee believes that the salary and long-term incentive compensation paid to Mr. Wertheizer in 2020 were appropriate based on our compensation policy.

Compensation of Executive Vice President, Worldwide Sales. The annual cash compensation payable to Mr. Ohana is comprised of base salary, as determined in accordance with the criteria discussed above for all executive officers, and commission-based cash bonus payable quarterly based on the criteria discussed below.

2020 Incentive Bonus Plan for EVP, Worldwide Sales

The process for setting the annual revenue target for Mr. Ohana’s incentive plan begins with a discussion by our Chief Executive Officer and Chief Financial Officer of the strategic and operating plans for the relevant fiscal year. The compensation committee reviews such objectives and subject to any further adjustments, approves them. The annual revenue target set for Mr. Ohana’s incentive plan generally requires significant effort by Mr. Ohana to achieve.

In February 2020, the compensation committee approved a 2020 Incentive Plan (the “Ohana 2020 Plan”) for Mr. Ohana, effective as of January 1, 2020.

In accordance with the Ohana 2020 Plan, his bonus was comprised of two components: (1) a formula using a specified 2020 annual revenue target of $100 million multiplied by a specified commission rate, and (2) North America Targets, the same goals as those in the 2020 Executive Bonus Plan. The first component had a weighting of 80% and the second component had a weighting of 20%. A commission multiplier of 1.0 was applied to the commission rate based on 0% to 100% achievement of the 2020 annual revenue target. A commission multiplier of 1.5 was applied to the commission rate based on the achievement of the 2020 annual revenue target beyond 100%. Mr. Ohana’s bonus based on the achievement of the 2020 annual revenue target and the North America Targets was capped at $160,000. In addition, Mr. Ohana was eligible to receive an additional quarterly bonus of $5,000 each if specified quarterly revenue targets based on the 2020 annual revenue target are achieved. The quarterly revenue targets in 2020 were $24,000,000 for the first quarter of 2020, $24,000,000 for the second quarter of 2020, $25,000,000 for the third quarter of 2020 and $27,000,000 for the fourth quarter of 2020. Furthermore, Mr. Ohana was eligible to receive an additional bonus of $5,000 each time he successfully executes a license agreement with a specified strategic customer that exceeds one million dollars (not including prepaid royalties). The 2020 strategic account bonus was capped at $25,000 if the company failed to achieve the 2020 annual revenue target but Mr. Ohana would not be subject to any cap if the 2020 annual revenue target was achieved. The commission-based bonus was payable quarterly based on the criteria discussed above and was subject to payroll taxes and tax withholdings.

Based on the terms of the Ohana 2020 Plan, Mr. Ohana was paid an aggregate bonus of $162,000, comprised of: (i) an amount of $129,000 based on the annual revenue target, (ii) an amount of $8,2000 based on the North America Targets, (iii) an amount of $5,000 based on the quarterly revenue targets, and (iii) $20,000 based on the strategic alliance agreements the company executed with customers in 2020.

Equity Incentive Programs

We intend that our stock award program is the primary vehicle for offering long-term incentives and rewarding our executive officers and key employees. We also regard our stock award program as a key retention tool. In order to promote a longer term management focus and to provide an incentive for continued employment with us, we grant RSUs and PSUs to our executive officers and primarily RSUs to the rest of our employees. Under limited circumstances, we grant stock options and stock appreciate rights to certain employees and generally in small quantities. RSUs awards generally become exercisable over a three-year period. Certain PSU awards vest immediately upon achievement of the underlying performance goals, and other PSU awards vest over a three-year period even after achievement of the underlying performance goals. Stock options and SARs generally become exercisable over a four-year period, with the exercise price being equal to the fair market value of our common stock on the date of grant.

The size of the equity award made to each executive officer is based upon the following factors:

In 2020, the compensation committee granted RSUs and PSUs to each of Messrs. Wertheizer, Arieli, Ohana and Boukaya. With respect to the PSUs grants, the performance metrics were intended to align with the interests of our stockholders for both the short term and long term.

In consideration of Compensia’ materials and views of ISS and our institutional investors pursuant to engagements with them by the chairman of the board and certain management members, the compensation committee approved 2020 equity awards to the executive officers in the aggregate equity grant value set forth below and weighted the time-based RSUs and short-term PSUs as follows:

2020 Restricted Stock Unit Award to Executive Officers

Restricted Stock Unit Awards Granted. In February 2020, each of Messrs. Wertheizer, Arieli, Boukaya and Ohana received a grant of 11,363 RSUs, 6,818 RSUs, 6,818 RSUs and 7,670 RSUs based on the above equity value figures. One-third of the RSUs granted in 2020 vest annually commencing on the first year anniversary of the grant date.

Timing of Grants. Equity incentive awards to our executive officers and other key employees are typically granted annually in conjunction with the review of the individual performance of our executive officers. Equity incentive awards are not necessarily granted to each executive officer during each year. Grants of equity incentive awards to newly hired executive officers who are eligible to receive them generally are made at the next regularly scheduled compensation committee meeting following their hire date.

2020 Short-Term Performance-Based Restricted Stock Unit Award to Executive Officers

In establishing the performance metrics for the short-term PSU grants, the compensation committee the 2020 license and related revenues and relative total stockholder return against the S&P 500. The compensation committee determined that annual license and related revenue was the appropriate metric for a portion of the short-term PSU grant because, unlike royalty revenue which is dependent on a variety of factors outside of management’s control, license and related revenue is a measure that management can control through anticipating market need and determining market reach, setting technology milestones and achieving them, as well as attentiveness and focus on achieving the actual licensing design wins. License and related revenue also drives long term value creation. The compensation committee determined, in consideration of Compensia’s materials, that relative total stockholder return against the S&P 500 was the appropriate metric for the other portion of the short-term PSU grant because the S&P 500 is a widely known and accepted index representing broad investor base and generally consistent with performance of peers in the space.

In February 2020, each of Messrs. Wertheizer, Arieli, Boukaya and Ohana received short-term PSU grants with the target settlement amounts of 17,046 shares, 4,545 shares, 4,545 shares and 5,114 shares, respectively, based on the above equity value figures. Subject to achievement of the threshold levels for the below performance goals, one-third of the total number of shares of the common stock subject to the PSUs granted in 2020 vest annually, commencing on the first anniversary of the grant date.

The performance goals for the short-term PSU grants for 2020 with specified weighting are as follows:

Based on the achievement of performance goals, the 2020 short-term PSU grant for each of Messrs. Wertheizer, Arieli, Boukaya and Ohana became settlable for a total of 19,261 shares, 5,136 shares, 5,136 shares and 5,778 shares, respectively, as follows:

2020 Long-Term Performance-Based Restricted Stock Unit Award to Executive Officers

In establishing the performance metrics for the long-term PSU grants, the compensation committee used long term stretch performance goals in the form of a targeted non-GAAP earnings per share and a targeted future market capitalization to link a portion of our executive officers’ compensation to the financial performance of the company. The compensation committee approved 2020 long-term PSU grants to each of Messrs. Wertheizer, Ohana, Arieli and Boukaya in the aggregate equity grant values set forth below:

In February 2020, each of Messrs. Wertheizer, Arieli, Boukaya and Ohana received long-term PSU grants in the amount of 56,818 PSUs, 28,409 PSUs, 28,409 PSUs and 35,511 PSUs, respectively, based on the above equity value figures.

Subject to achievement of either of the two below performance goals, the PSUs would vest immediately:

The compensation committee considered the above goals stretch goals, as the company’s non-GAAP earnings per share in 2018 was $0.53 and tripling that amount would require considerable improvements in the company’s financial condition. In addition, the company’s market capitalization averaged approximately $660million over the course of the month prior to the approval of the goal in February 2020, so an achievement of a market capitalization in excess of $1 billion represented a significant increase. Further, from the time when CEVA began publicly trading in 2002, with an initial market capitalization of approximately $110 million, only once did the company’s market capitalization reach the $1 billion value.

Based on the parameters of the 2020 long-term PSU grant, each of Messrs. Wertheizer, Arieli, Boukaya and Ohana triggered immediate vesting of 56,818 PSUs, 28,409 PSUs, 28,409 PSUs and 35,511 PSUs, respectively, on February 17, 2021, as based on the market capitalization information set forth on Yahoo Finance, as of February 17, 2021, the company’s market capitalization had reached at least $1 billion for at least 30 days of trading.

Stock Ownership Guidelines for Executive Officers

In February 2016, the board adopted a set of stock ownership guidelines for our named executive officers so as to align this group’s interests with those of our stockholders. Pursuant to the guidelines, the named executive officers of the company, currently the Chief Executive Officer, the Chief Financial Officer and the Executive Vice President, Worldwide Sales, are required to own (personally and collectively with members of the executive officer’s immediate family or with family trusts) by February 2, 2021, an amount of common stock valued at its fair market value equal to at least two times the 2016 annual base salary for the Chief Executive officer or at least one time the 2016 annual base salary for each of the Chief Financial Officer and the Executive Vice President, Worldwide Sales. For purposes of this ownership guideline, vested in-the-money equity awards and common stock acquired pursuant to the company’s employee stock purchase plan are included in the minimum ownership calculation. All of our executive officers are in compliance with our stock ownership guidelines.

Anti-Pledge/Hedging Policy.

Pursuant to the company’s insider trading policy, all employees of the company, including executive officers, are prohibited from engaging in short-term or speculative securities transactions with respect to the our common stock, such as short sales, puts, calls and other exchange-traded derivatives. Since the inception of the policy, no executive officer has pledged or hedged any company shares. Nonetheless, in 2020, the board of directors enhanced the policy to eliminate the availability of any waiver for pledging or hedging by employees, including executive officers.

Retirement Benefits and Perquisites

We do not offer any retirement benefits to our executive officers located in Israel, except to the extent certain social benefits required pursuant to Israeli labor laws or are common practice in Israel, and such social benefits are applicable to all Israeli employees. Specifically, based on Israeli labor laws, an Israeli employee is entitled to severance pay upon termination of employment for any reason, including retirement, based on the most recent monthly salary of such employee multiplied by the number of years of employment of such employee. We make a payment of 8.333% of each employee’s monthly base salary to an insurance or pension fund to pay for this future liability payable to our employees upon termination of their employment. In addition, we make a payment of 6% of each employee’s monthly base salary to another insurance or pension fund, and this accrued amount may be withdrawn by the employee only upon retirement. We generally provide all of our Israeli employees with a car for business-related purposes and pay the associated expenses (excluding personal taxes on such benefit). Also, as is customary in Israel applicable to all Israeli employees, we provide our Israeli employees with a certain amount of monthly contributions (7.5% of their base salary) for the benefit of each employee’s study and training purposes. The amounts of the above referenced benefits contributed by us to each of Messrs. Wertheizer, Arieli and Boukaya in 2020 are specified in the 2020 All Other Compensation Table of this proxy statement.

In addition, we provide our U.S. employees, including Issachar Ohana, our only U.S.-based executive officer, with participation in our 401(k) plan. We provided a 100% match to any contribution made by participants to the 401(k) plan in 2020, subject to a maximum of 6% of the participant’s compensation and specified IRS limits. The matching amount contributed by us to Mr. Ohana is shown in the 2020 All Other Compensation Table of this proxy statement.

Employment Agreements and Post-Termination Protection

The compensation committee also recognizes that, from time to time, it is appropriate to enter into agreements with certain key employees to ensure that we continue to retain their services and to promote stability and continuity within our company. We have entered into employment agreements with our executive officers. The varied terms of their employment agreements reflect the importance of retaining their services and their potential contributions to the attainment of our long-term goals. None of the employment agreements with our executive officers provide for tax gross ups and none includes any “single trigger” change-in-control provisions.

Financial Restatements

The compensation committee has not adopted a policy with respect to whether we will make retroactive adjustments to any cash- or equity-based incentive compensation paid to executive officers (or others) where the payment was predicated upon the achievement of financial results that were subsequently the subject of a restatement. Our compensation committee believes that this issue is best addressed when the need actually arises, when all of the facts regarding the restatement are known.

Tax and Accounting Treatment of Compensation

Prior to the tax reform as noted below, Section 162(m) of the Internal Revenue Code of 1986, as amended, generally disallows a tax deduction to public companies for compensation over $1 million paid to its Chief Executive Officer and its four other most highly compensated executive officers resident in the U.S. Certain compensation, including qualified performance-based compensation, is not subject to the deduction limitation if certain requirements are met. The compensation committee reserves the right to use its judgment to authorize compensation payments that do not comply with the exemptions in Section 162(m) of the Internal Revenue Code when the committee believes that such payments are appropriate and in the best interests of our stockholders, after taking into account changing business conditions or the executive officer’s performance. In addition, the compensation committee cannot ensure that compensation intended to qualify for deductibility under Section 162(m) will in fact be deductible because: (1) a number of requirements must be satisfied in order for the compensation to qualify; and (2) uncertainties as to the application and interpretation surrounding this section currently exist. Section 162(m) is applicable only to Mr. Ohana as Messrs. Wertheizer, Arieli and Boukaya do not reside in the U.S.

However, on December 22, 2017, the U.S. federal government enacted the Tax Cuts and Jobs Act, which substantially modified the Code and, among other things, eliminated compensation deductibility under Section 162(m). As a result, going forward, any compensation amounts over $1 million paid to Mr. Ohana will no longer be deductible by it (or any other person subject to U.S. federal income tax). Our expectation is that this change will not have a material effect on our operating results or financial condition.

Compensation Policies and Practices and Risk Management

Our compensation committee considers potential risks when reviewing and approving the compensation programs for our executive officers and other employees. We have designed our compensation programs, including our incentive compensation plans, with specific features to address potential risks while rewarding employees for achieving long-term financial and strategic objectives through prudent business judgment and appropriate risk taking. The following elements have been incorporated in our programs available for our executive officers:

Compensation Committee Report

The compensation committee has reviewed and discussed the Compensation Discussion and Analysis set forth above with our management. Based on its review and discussions, the committee recommended to our board of directors that the Compensation Discussion and Analysis be included in this proxy statement.

Submitted by the Compensation Committee of the Board of Directors of CEVA, Inc.:

2020 Summary Compensation

The following table sets forth the total compensation awarded to, earned by or paid to our principal executive officer, principal financial officer and the only other executive officer whose total compensation in fiscal year 2020 exceeded $100,000 for the periods presented below. We refer to these executive officers as our “named executive officers.”

2020 All Other Compensation

The following table sets forth all other compensation awarded to, earned by or paid to each of our named executive officers during fiscal year 2020. The NIS amounts relating to the 2020 all other compensation for Messrs. Wertheizer, Arieli and Boukaya are translated into the U.S. dollar at the exchange rate of NIS into the U.S. dollars at the time of payment or accrual.

2020 Grants of Plan Based Awards

The following table sets forth the plan based awards granted to Messrs. Wertheizer, Arieli, Ohana and Boukaya in fiscal year 2020.