PayPal : Combined 2023 Proxy Statement / 2022 Annual Report

2023 Notice of Annual Meeting of Stockholders and Proxy Statement

2022 Annual Report

Our Two-sided Platform Serves Merchants and Consumers

Merchants

Power all aspects of digital checkout online and in store

Provide access to seamless credit solutions to enable growth

Protect against fraud and improve risk management

Offer tools and insights to attract new customers and increase sales

Consumers

Help people manage and move money domestically and internationally

Offer credit and installment pay services that are accessible and cost effective

Facilitate simple, secure payments across devices

Deliver flexibility with payment options globally, across platforms and merchants

Our Payment Solutions

CheckoutProcessing

Digital Wallets

Consumer Financial Services

					Bill Pay
Savings
	Credit and
				Debit Cards
Giving
Crypto

Shopping and Rewards

Rewards

Deals

Loyalty

Merchant Services

Risk Management

and Fraud Protection

Payouts

2022 Key Performance Metrics

Growing Payment Volume:
$1.36 Trillion of Total Payment Volume	9% from 2021
Increasing Activity:
22.3 Billion Payment Transactions	16% from 2021
Expanding Network Scale:

Active Accounts of 435 Million

2% from 2021

Message from Our President and CEO

Dear Colleagues, Customers, Partners and Stockholders:

In 2022, PayPal continued to navigate a global macroeconomic environment marked by high levels of disruption and uncertainty. A slowing economy, inflation and geopolitical unrest put significant pressure on both consumers and businesses around the world. Despite this backdrop, we again rose to every challenge and opportunity presented over the past year, and I could not be prouder of our team's work.

We have taken many essential steps to right-size our cost structure, streamline our operating model and sharpen our focus, and we believe this has set the stage for our next phase of growth. While some of these decisions have been difficult, we have made significant progress in our transformation efforts, and our fourth quarter results demonstrate that we hit a positive inflection point at the end of 2022. Although many of the challenges that we faced last year will continue into 2023, I'm more confident than ever that PayPal is poised to emerge from this period in a position of increased strength.

Looking Ahead

Looking forward to 2023 and beyond, I want to reiterate the key priorities that will ultimately enable us to better serve our customers, leverage our competitive advantages to increase our market share and deliver long-term, sustainable growth for our stockholders. First, branded checkout is at the core of what we do, and continually improving this experience will remain our highest priority. Next, we are building on the redesign of our digital wallets that we undertook last year to innovate and improve our current offerings - including Buy Now, Pay Later and Rewards - to provide even more value for our customers. We are also continuing our work to extend our platform into in-person contexts, so that customers have a seamless experience between our PayPal and Venmo branded cards and our apps. We are doubling down on Braintree, and fully ramping PayPal Complete Payments to provide powerful payment processing capabilities to merchants of all sizes. Lastly, we are continuing to strengthen foundational capabilities that enable and support our expanding value proposition for both consumers and merchants to ensure that our technical infrastructure and collaboration tools remain best-in-class.

My Retirement as CEO of PayPal

As I shared in early February, I informed the Board that I plan to retire as PayPal's President and CEO at the end of this year. I plan to devote more time to my passions outside of the workplace. When I joined PayPal in 2014 - then part of eBay - I was looking for a company with passionate, engaged employees who wanted to make a real difference. Looking back, it is incredible to reflect on the tremendous growth that we have achieved together since PayPal became an independent, publicly traded company. Since that time almost nine years ago, our revenues, total payment volume and cash flow have roughly tripled in size. We have launched countless products, partnerships and improvements to better serve our customers and expand into new markets.

Today, we are empowering hundreds of millions of consumers and merchants to join and thrive in the global economy, and we're contributing every day to expanding economic opportunity for customers and communities around the world. Together, we have established PayPal as the global leader in digital payments, one of the most trusted brands and a company that truly makes a difference in the world. The past year and a half has not been easy for our employees or shareholders as we adjusted to a more challenging macroeconomic environment and significant geopolitical uncertainty. Before I made the decision to move on to my next chapter, I wanted to be sure that PayPal had positive momentum and was well-positioned to deliver a strong year of performance. We have made considerable progress and I fully believe we have reached that point. I have complete trust in the Board to conduct a thorough search for the best possible leader and ensure a smooth, thoughtful transition - and I look forward to continuing to serve on the Board following the transition.

Profit and Purpose

PayPal is proof that profit and purpose go hand-in-hand and leading a company that delivers results for all of its stakeholders has truly been the highlight of my career. I am proud of the ways that we have leaned into the bold aspirations of our mission and our values to support our employees, customers and the broader communities in which we live, work and serve.

In the last year, we have continued to advance our employee financial wellness initiative to strengthen the financial security of our workforce. We provided financial wellness awards to hourly and entry-level employees and changed the vesting schedule of our restricted stock unit grants to give employees earlier and more frequent access to their shares. We introduced our Leadership Principles to help us grow as leaders and foster stronger connections between our teams - whether in-person or virtually. In 2023, we launched Global Collaboration Days where we regularly gather in our offices for formal and informal collaboration that complement our hybrid working model and preserves the flexibility that we know is important to our employees. Stronger connections between our teams, deep collaboration and professional development opportunities are all important elements to successfully executing against our strategic priorities.

We have also lived our mission and values, using the power of the PayPal platform and community to support our merchants, consumers and those in need. Since Russia invaded Ukraine more than one year ago, the PayPal community has rallied to provide aid to Ukrainians, and our own employees stepped up to expedite the expansion of PayPal services to Ukrainian customers. Over the past year, more than $600 million was donated on our platform to charities responding to the ongoing humanitarian crisis, and we have helped Ukrainian citizens receive and send more than $600 million in person-to- person payments and money transfers, for a total of $1.2 billion in monetary support facilitated through our platform. In the wake of the destructive earthquakes in Turkey and Syria, and the devastating effects of Hurricane Ian, we mobilized our customers and employees to launch disaster relief campaigns. In 2022 alone, we processed $20 billion for charitable organizations and causes, demonstrating the strength we have as a global community and the power of driving social impact through our core business.

Thank You

I want to extend my deepest gratitude to our talented employees - as well as the customers, partners, regulators and stockholders we work with every day - for their support over the past year and throughout my tenure at PayPal. It is an honor to lead this company and see the difference PayPal makes to expand opportunities within the global financial system and build a more inclusive digital economy. I am energized for the year ahead and excited to welcome a new leader, who I'm confident will build on all that we have accomplished over the years and continue to seize the immense opportunity ahead of us.

Thank you.

Dan Schulman

President and CEO, PayPal Holdings, Inc.

April 13, 2023

Message from Our Independent Board Chair

Dear PayPal Stockholders:

In 2022, the Board actively worked with management to navigate the difficult macroeconomic environment to help ensure PayPal is well positioned for future growth. We also continued to proactively engage with stockholders and responsibly oversee strategy and risks for the Company. This was a year of transformation for PayPal, as we increased our operating discipline while continuing to invest in innovation at scale.

Board Composition & Oversight

Our Board's balanced mix of diversity, skills and experience enables it to effectively perform its oversight responsibilities. In 2022, 50% of our Board members standing for election were women or from diverse ethnic groups. Our focus on diversity and inclusion extends to the Company's current executive officers, 50% of whom are women and/or from diverse ethnic groups. We continually review and assess the skills and knowledge of our Board members and provide ongoing opportunities for director education on emerging trends. The Board also exercised its responsibility to oversee PayPal's enterprise risk framework, including the evolution of its risk taxonomy in 2022. In addition, The Board continues to oversee PayPal's environmental, social and governance ("ESG") strategy and related risks and opportunities as a full Board and through its Board Committees.

Stakeholder Engagement

We regularly engage with our stockholders, customers, employees, regulators and other stakeholders to ensure that we understand and thoughtfully consider their perspectives and priorities. Throughout 2022, we engaged with investors as part of our extensive stockholder engagement program, reaching out to investors representing approximately 52% of our common stock, with 25% choosing to engage with PayPal throughout the year. These discussions provide the Board and management with invaluable perspectives, insights and feedback. We look forward to our continued dialogues with our stockholders and other stakeholders.

Succession Planning

In February, Dan Schulman announced his intention to retire as President and CEO at year-end. On behalf of the Board, I would like to acknowledge the positive and lasting impact Dan has made on PayPal and our people. Under his leadership, PayPal has become one of the world's most trusted brands and a leader in digital payments and commerce, delivering value for our stockholders and other stakeholders. We thank Dan for his nearly nine years of service and his commitment to supporting a smooth transition as we conduct a thorough and rigorous search to identify his successor. We look forward to Dan's continued service as a vital member of PayPal's Board of Directors, providing oversight of the persistent execution of our mission and vision.

On behalf of our Board, thank you for your investment in PayPal. I look forward to discussing these developments further with you at the 2023 Annual Meeting on May 24, which will be held via live webcast at www.virtualshareholdermeeting.com/PYPL2023.

Sincerely yours,

John J. Donahoe

Independent Board Chair

April 13, 2023