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Minutes | Special Meeting of the ICANN Board | 16 December 2021

A Special Meeting of the ICANN Board of Directors was held telephonically on 16 December 2021 at 15:00 UTC.

Maarten Botterman, Chair, promptly called the meeting to order.

In addition to the Chair, the following Directors participated in all or part of the meeting: Alan Barrett, Becky Burr, Edmon Chung, Sarah Deutsch, Avri Doria, Danko Jevtović, Akinori Maemura, Göran Marby (President and CEO), Mandla Msimang, Ihab Osman, Patricio Poblete, León Sánchez (Vice Chair), Katrina Sataki, and Matthew Shears.

The following Board members sent their apologies: Tripti Sinha.

The following Board Liaisons participated in all or part of the meeting: Harald Alvestrand (IETF Liaison), Manal Ismail (GAC Liaison), James Galvin (SSAC Liaison), and Kaveh Ranjbar (RSSAC Liaison).

Secretary: John Jeffrey (General Counsel and Secretary).

The following ICANN Executives and Staff participated in all or part of the meeting: Michelle Bright (Board Content Coordination Director), Xavier Calvez (SVP, Planning and Chief Financial Officer), Sally Newell Cohen (SVP, Global Communications and Language Services), John Crain (Chief Security, Stability, and Resiliency Officer), Samantha Eisner (Deputy General Counsel), Jamie Hedlund (SVP, Contractual Compliance & U.S. Government Engagement), Aaron Jimenez (Board Operations Specialist), Vinciane Koenigsfeld (VP, Board Operations), Elizabeth Le (Associate General Counsel), Amy Stathos (Deputy General Counsel), Gina Villavicencio (SVP, Global Human Resources), and Theresa Swinehart (SVP, Global Domains and Strategy).

  1. Main Agenda:
    1. Pre-Approval for Legal Expenditures relating to Dispute Resolution and Litigation
    2. Pre-Approval for Legal Expenditures relating to Dispute Resolution and Litigation
  2. Executive Session:
    1. President and CEO At-Risk Compensation for First Half of FY22

 

  1. Main Agenda:

    1. Pre-Approval for Legal Expenditures relating to Dispute Resolution and Litigation

      The Chair opened the meeting and introduced the agenda.

      Becky Burr, the Chair of the Board Accountability Mechanisms Committee (BAMC), briefed the Board on the proposed resolutions. Becky noted that the BAMC has evaluated the proposed resolutions and has recommended that the Board approve them.

      Edmon Chung and James Galvin recused themselves from the discussion noting potential conflicts of interest.

      Becky moved and León Sánchez seconded.  The Chair called for a vote and the Board took the following actions:

      Whereas, there has been, and will continue to be until conclusion, extensive activity in the [Redacted – Privileged & Confidential], resulting in significant outside legal counsel fees and IRP Panel fees.

      Whereas, ICANN organization and the Board Accountability Mechanisms Committee have recommended that the Board approve a tranche of money in the amount of [Redacted – Privileged & Confidential] in the [Redacted – Privileged & Confidential] to pay upcoming outside legal invoices and IRP Panel fees, and authorize the President and CEO, or his designee(s), to make disbursements up to this amount.

      Resolved (2021.12.16.01), the Board hereby approves a tranche of money in the amount of [Redacted – Privileged & Confidential] in the [Redacted – Privileged & Confidential] to pay upcoming outside legal fees and IRP Panel fees, and authorizes the President and CEO, or his designee(s), to make disbursements up to this amount and of any amount of fees and costs that exceeds this tranche unless they exceed or are expected to exceed an additional US$500,000 in the matters.

      Resolved (2021.12.16.02), specific items within this resolution shall remain confidential pursuant to Article 3, sections 3.5(b) and (d) of the ICANN Bylaws.

      Fourteen Directors voted in favor of Resolutions 2021.12.16.01 and 2021.12.16.02.  Edmon Chung recused himself from voting. Tripti Sinah was unavailable to vote on the Resolutions.  The Resolutions carried.

      Rationale for Resolutions 2021.12.16.01 – 2021.12.16.02

      When required, ICANN must engage outside legal counsel to help prepare for and defend against all types of disputes that are brought against ICANN. When those disputes become highly contentious, they often require significant involvement during a certain time period by outside counsel and that significant amount of time also results in significant fees and related expenses.

      Per ICANN's Contracting and Disbursement policy (https://www.icann.org/resources/pages/contracting-disbursement-policy-2015-08-25-en), if any invoice calls for disbursement of more than $500,000, Board approval is required to make the payment. In furtherance of the process for legal invoice approval developed to enhance transparency and predictability to the Board, the organization has provided the Board with an explanation of the upcoming activity in the [Redacted – Privileged & Confidential], including anticipated workload and expected billing amounts for the remainder of the proceedings. Accordingly, the Board has been asked by the organization to approve a tranche of money to pay estimated upcoming outside legal fees and certain related expenses in the [Redacted – Privileged & Confidential], which the Board Accountability Mechanisms Committee has reviewed and recommended. Since these matters are related to a new gTLD, the amounts paid for the fees and costs of these matters are covered by the new gTLD funds collected as part of the 2012 New gTLD Program application fees.

      The Board is comfortable that ICANN organization, including ICANN's General Counsel's Office, is properly monitoring the work performed and expenses incurred by outside legal counsel to ensure that all fees and costs are appropriate under the given circumstances at any given time. Therefore, the Board is comfortable taking this decision.

      Taking this Board action fits squarely within ICANN's mission and the public interest in that it ensures that payments of large amounts are reviewed and evaluated by the Board as appropriate in accordance with ICANN's Contracting and Disbursement Policy. This ensures that the Board is overseeing large disbursements and acting as proper stewards of the funding ICANN receives from the public.

      While this will have a fiscal impact on ICANN, it is an impact that was contemplated and is covered by the new gTLD funds collected as part of the 2012 New gTLD Program application fees. This decision will not have an impact on the security, stability or resiliency of the domain name system.

    2. This is an Organizational Administrative Function that does not require public comment.

    3. Pre-Approval for Legal Expenditures relating to Dispute Resolution and Litigation

      Becky Burr as the Chair of the Board Accountability Mechanisms Committee (BAMC) briefed the Board on the proposed resolutions. Becky noted that the BAMC has evaluated the proposed resolutions and has recommended that the Board approve them.

      Edmon Chung and James Galvin recused themselves from the discussion noting potential conflicts of interest.

      León Sánchez moved and Becky seconded.  The Chair called for a vote and the Board took the following actions:

      Whereas, there has been, and will continue to be until conclusion, extensive activity in the [Redacted – Privileged & Confidential], resulting in significant outside legal counsel fees and IRP Panel fees.

      Whereas, ICANN organization and the Board Accountability Mechanisms Committee have recommended that the Board approve a tranche of money in the amount of [Redacted – Privileged & Confidential] in the [Redacted – Privileged & Confidential] to pay previously unanticipated outside counsel legal fees and IRP Panel fees, and authorize the President and CEO, or his designee(s), to make disbursements up to this amount.

      Resolved (2021.12.16.03), the Board hereby approves a tranche of money in the amount of [Redacted – Privileged & Confidential] in the [Redacted – Privileged & Confidential] to pay existing and upcoming outside counsel legal fees and IRP Panel fees, and authorizes the President and CEO, or his designee(s), to make disbursements up to this amount, and of any amount of fees and costs that exceeds this tranche unless they exceed or are expected to exceed an additional US$500,000 in the matter.

      Resolved (2021.12.16.04), specific items within this resolution shall remain confidential pursuant to Article 3, sections 3.5(b) and (d) of the ICANN Bylaws.

      Fourteen Directors voted in favor of Resolutions 2021.12.16.03 and 2021.12.16.04. Edmon Chung recused himself from voting. Tripti Sinha was unavailable to vote on the Resolutions. The Resolutions carried.

      Rationale for Resolutions 2021.12.16.03 – 2021.12.16.04

      When required, ICANN must engage outside legal counsel to help prepare for and defend against all types of disputes that are brought against ICANN. When those disputes become highly contentious, they often require significant involvement during a certain time period by outside counsel and that significant amount of time also results in significant fees and related expenses.

      Per ICANN's Contracting and Disbursement policy (https://www.icann.org/resources/pages/contracting-disbursement-policy-2015-08-25-en), if any invoice calls for disbursement of more than $500,000, Board approval is required to make the payment. In furtherance of the process for legal invoice approval developed to enhance transparency and predictability to the Board, the organization has provided the Board with an explanation of the upcoming and previously unexpected activity in the [Redacted – Privileged & Confidential], including anticipated workload and expected fees for the remainder of the proceeding. Accordingly, the Board has been asked by the organization to approve another tranche of money to pay previously unexpected estimated upcoming outside legal fees and related expenses in the [Redacted – Privileged & Confidential], which the Board Accountability Mechanisms Committee has reviewed and recommended. Since this matter is related to a new gTLD, the amounts paid for the fees and costs of this matter are covered by the new gTLD funds collected as part of the 2012 New gTLD Program application fees.

      The Board is comfortable that ICANN organization, including ICANN's General Counsel's Office, is properly monitoring the work performed and expenses incurred by outside legal counsel to ensure that all fees and costs are appropriate under the given circumstances at any given time. Therefore, the Board is comfortable taking this decision.

      Taking this Board action fits squarely within ICANN's mission and the public interest in that it ensures that payments of large amounts for a matter are reviewed and evaluated by the Board as appropriate in accordance with ICANN's Contracting and Disbursement Policy. This ensures that the Board is overseeing large disbursements and acting as proper stewards of the funding ICANN receives from the public.

      While this will have a fiscal impact on ICANN, it is an impact that is covered by the new gTLD funds collected as part of the 2012 New gTLD Program application fees. This decision will not have an impact on the security, stability or resiliency of the domain name system.

      This is an Organizational Administrative Function that does not require public comment.

  2. Executive Session:

    The Board entered into a confidential session. The Board undertook the following actions during its confidential session:

    1. President and CEO At-Risk Compensation for First Half of FY22

      Whereas, each Board member has confirmed that he or she does not have a conflict of interest with respect to establishing the amount of payment to the President and CEO for the first half of FY22 at-risk compensation component.

      Whereas, the Compensation Committee recommended that the Board approve payment to the President and CEO for the first half of his FY22 at-risk compensation.

      Resolved (2020.12.16.05), the Board hereby approves a payment to the President and CEO for his annual at-risk compensation component for the first half of FY22.

      Resolved (2021.12.16.06), specific items within this resolution shall remain confidential as an action "relating to personnel or employment matters", pursuant to Article 3, section 3.5.b of the ICANN Bylaws.

      Rationale for Resolutions 2021.12.16.05 – 2021.12.16.06

      When the President and CEO was hired, he was offered a base salary, plus an at-risk component of his compensation package. This same structure exists today. Consistent with all personnel with the ICANN organization, the President and CEO is to be evaluated against specific goals, which the President and CEO sets in coordination with the Compensation Committee and the Board.

      The President and CEO provided to the Compensation Committee his self-assessment of his mid-year achievements towards his FY22 goals. After reviewing, the Compensation Committee discussed and agreed with the President and CEO's self-assessment. Following discussion, the Compensation Committee recommended that the Board approve payment to the President and CEO for his at-risk compensation for the first half of FY22. The Board agrees with the Compensation Committee's recommendation.

      Taking this decision is in furtherance of ICANN's mission and is in the public interest in that it helps ensure that President and CEO is sufficiently compensated in line with his performance in furtherance of the mission, and which reflects that his goals are consistent with ICANN's Strategic and Operating plans.

      While the decision to pay the President and CEO his at-risk compensation for the first half of FY22 will have a fiscal impact on ICANN, it is an impact that was contemplated in the FY22 budget. This decision will not have an impact on the security, stability or resiliency of the domain name system.

      This is an Organizational Administrative Function that does not require public comment.

    The Chair then called the meeting to a closed.

Published on 13 May 2022