Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
2021 Base Salary
On January 19, 2021, the Board of Directors (the "Board") of AppFolio, Inc. (the
"Company"), upon recommendation of the Compensation Committee of the Board (the
"Committee"), approved an adjustment to the base salaries of Ida Kane, the
Company's Chief Financial Officer, and Johnathan Walker, the Company's Chief
Technology Officer. The adjustment to Ms. Kane's base salary was an increase
from $340,000 for fiscal year 2020 to $390,000 for fiscal year 2021, effective
as of January 10, 2021. The adjustment to Mr. Walker's base salary was an
increase from $325,000 for fiscal year 2020 to $350,000 for fiscal year 2021,
effective as of January 10, 2021. The base salary of Jason Randall, the
Company's President and Chief Executive Officer, remains $360,000. (Mr. Randall,
Ms. Kane and Mr. Walker are referred to collectively herein as the "Named
Executive Officers.")
2021 Cash Bonus Plan
On the same date, the Board, upon recommendation by the Committee, adopted a
performance-based short-term cash incentive plan in which each of the Named
Executive Officers will participate and be eligible for cash bonus payments. The
short-term cash incentive plan is intended to reward the Named Executive
Officers for the Company's achievement relative to pre-established metrics
related to revenue for fiscal year 2021. 75% of the cash award is based on
consolidated net revenue and the remaining 25% is based on net new total
property manager units. The target cash bonus amount for each of the Named
Executive Officers is one times their respective base salaries, as set forth
above ("Target Cash Bonus Amount").
The actual cash bonus amount payable to each Named Executive Officer pursuant to
his or her short-term cash incentive award will be determined based on the
Company's achievement relative to certain performance targets. For performance
below 90% of the consolidated net revenue metric and 85% of the net new total
property manager units metric, no cash bonus will be earned. For performance
equal to 100% of the consolidated net revenue metric (target), 75% of the Target
Cash Bonus Amount will be earned. For performance equal to 100% of the net new
total property manager units metric (target), 31.25%, or 125% of 25%, of the
Target Cash Bonus Amount will be earned. For performance equal to or greater
than 150% of the consolidated net revenue metric or net new total property
manager units metric (maximum), 600% of the relevant portion of the Target Cash
Bonus Amount will be earned. For performance between 90% and 150% of the
consolidated net revenue metric, and 85% to 150% of the net new total property
manager units metric, the cash bonus will be determined by reference to a
sliding payout scale that was established by our Board based on the Target Cash
Bonus Amount.
2021 Overachievement Cash Awards
On the same date, the Board, upon recommendation of the Committee, adopted a
performance-based overachievement cash incentive plan in which each of the Named
Executive Officers will participate and be eligible for cash bonus payments. The
overachievement cash bonus plan is intended to reward participants for the
Company's achievement relative to a pre-established metric related to certain
specified net new property manager units for fiscal year 2021. The target
overachievement award amount is $300,000, $200,000, and $200,000 for Mr.
Randall, Ms. Kane, and Mr. Walker, respectively (the "Target Overachievement
Cash Bonus Amount").
The actual cash bonus amount payable to each Named Executive Officer pursuant to
his or her overachievement award will be determined based on the Company's
achievement relative to a certain performance target. For performance below 100%
of the certain specified net new property manager units metric, no cash bonus
will be earned. For performance equal to 105% of the certain specified net new
property manager units metric (target), 100% of the Target Overachievement Cash
Bonus Amount will be earned. For performance equal to 130% of the certain
specified net new property manager units metric (maximum), 350% of the Target
Overachievement Cash Bonus Amount will be earned. For performance between 100%
and 130% of the certain specified net new property manager units metric, the
cash bonus will be determined by reference to a sliding payout scale that was
established by our Board based on the Target Overachievement Cash Bonus Amount.
Long-Term Equity Incentive Award
On January 23, 2021, the Board, upon recommendation of the Committee, approved
the grant of 7,688 restricted stock units under the Company's 2015 Stock
Incentive Plan to Mr. Walker (the "RSU Award"). The RSU Award will vest upon the
determination of the Board, in consultation with the Company's Chief Executive
Officer, of Mr. Walker's achievement of certain pre-established individual
performance metrics ("MBOs") no later than December 31, 2021. These MBOs were
individualized to Mr. Walker due to the nature of his role at the Company, and
relate to his participation in and execution of the Company's strategy for
certain new technology offerings and evaluating and integrating senior talent,
as well as Mr. Walker's continued employment with the Company through such date.
The RSU Award will either vest in full or be forfeited depending on such
determination.

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