☐ | Preliminary Proxy Statement |
☐ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
☒ | Definitive Proxy Statement |
☐ | Definitive Additional Materials |
☐ | Soliciting Material under §240.14a-12 |
☒ | No fee required. |
☐ |
☐ | Fee computed on table | |||||
1. | To elect each of the |
2. |
To ratify the selection by the Audit Committee of the Board of Directors of Deloitte & Touche LLP as our independent registered public accounting firm for |
3. | To conduct an advisory vote to approve the compensation of our named executive officers; and |
4. | To conduct any other business properly brought before the annual meeting. |
| The record date for the annual meeting is April 15, We intend to mail the Notice of Internet Availability of Proxy Materials on or about April 24, 2024, to all stockholders of record entitled to vote at the annual meeting. | |
| Important Notice Regarding the Availability of Proxy Materials for the interactive webcast at www.virtualshareholdermeeting.com/ | |
| The proxy statement and annual report to at http://materials.proxyvote.com. | |
| You are cordially invited to attend the virtual annual meeting. Whether or not you expect to attend the annual meeting, please complete, date, sign and return the proxy mailed to you, or vote over the telephone or the internet as instructed in these materials, as promptly as possible in order to ensure your representation at the annual meeting. Even if you have voted by proxy, you may still vote online if you attend the virtual meeting. Please note, however, that if your shares are held of record by a broker, bank or other nominee and you wish to vote at the annual meeting, you must obtain a proxy issued in your name from that record holder. | |
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1. | Election of each of the |
2. |
Ratification of selection by the Audit Committee of the Board of Directors of Deloitte & Touche LLP as our independent registered public accounting firm for |
3. | To conduct an advisory vote to approve the compensation of our named executive officers (our “Named Executive Officers”), as disclosed in this Proxy Statement (Proposal 3). |
ELECTION OF DIRECTORS | |||
Our Board of Directors is divided into three classes. Each class consists, as nearly as possible, of one-third of the total number of directors, and each class has a three-year term. Vacancies on the Board of Directors may be filled only by persons elected by a majority of the remaining directors. A director elected by the Board of Directors to fill a vacancy in a class, including vacancies created by an increase in the number of directors, shall serve for the remainder of the full term of that class and until the director’s successor is duly elected and qualified. | |||
There are three directors in the class whose term of office expires in 2023. | |||
Directors are elected by a plurality of the votes of the holders of shares present | |||
The following is a brief biography of each nominee and each director whose term will continue after the annual meeting, including their ages as of March 15, 2024. | |||
Nominees for Election for a Three-year Term Expiring at the | |||
David Hornik | |||
AGE: has served as | |||
Charles Meyers | |||||
AGE: has served as a member of our Board of Directors since |
| Vanessa Smith AGE: 48 has served as a member of our Board of Directors |
| | | | | |
| | The Board of Directors Recommends a Vote in Favor of Each Named Nominee. |
| | | | Artur Bergman AGE: has served as our Chief | |
| | | | | |
| | | | Paula Loop AGE: 62 has served as a member of our Board of Directors since July 2021. Ms. Loop previously served as an Assurance Partner at PricewaterhouseCoopers LLP, an international professional services accounting firm, where her career spanned over 30 years. At PwC she served on the Board of Partners as the Risk and Quality Committee chair and was the leader of PwC’s Governance Insights Center. She was also previously the New York Metro Regional Assurance Leader leading one of PwC’s largest Assurance practices. She has served as a director of APi Group, a construction equipment and services company, since March 2022 and Robinhood Markets, a financial services company, since June 2021. Ms. Loop holds a B.S. in Business Administration from the University of California at Berkeley. We believe that Ms. Loop is qualified to serve as a member of our Board of Directors because of her significant experience working with boards and audit committees across multiple markets and industry sectors on governance, accounting, sustainability, and SEC reporting matters. | |
| | | | | |
| | | | Christopher B. Paisley AGE: has served as a member of our Board of Directors since July 2018. Since January 2001, Mr. Paisley has served as the Dean’s Executive Professor of Accounting at the Leavey School of Business at Santa Clara University. Mr. Paisley also serves as lead independent director of Equinix, Inc., a provider of network colocation, interconnection, and managed services, | |
| | | | The Honorable Aida Álvarez AGE: 75 has served as a member of our Board of Directors since August 2019. Ms. Álvarez has led important financial and government agencies and served in the cabinet of U.S. President William J. Clinton as the Administrator of the U.S. Small Business Administration. Ms. Álvarez serves on the board of directors of HP Inc., a technology company, since June 2016, Stride, Inc., a for-profit education company, since April 2017, and Bill.com Holdings, Inc., a provider of automated, cloud-based software for financial operations, since April 2022. She has previously served on the board of directors of Wal-Mart Stores, Inc., a retail company, MUFG Americas Holdings Corporation, a banking corporation, Zoosk, an online dating company, PacifiCare Health Systems, Inc., and Oportun Financial Corporation, a financial services company. Ms. Álvarez was the founding Chair of the Latino Community Foundation, and currently serves as its Board Chair Emerita. Ms. Álvarez holds a B.A. from Harvard College. We believe that Ms. Álvarez is qualified to serve as a member of our Board of Directors because of her extensive experience in the technology and finance industries and her service on public company boards. | | |||
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| | | | Richard Daniels AGE: 69 has served as a member of our Board of Directors since November 2021. Mr. Daniels retired from Kaiser Permanente, an integrated managed care consortium, in 2020, where he was most recently Executive Vice President & CIO. He serves on the Board of CSAA Insurance Group and is on the Board of the Parkland Center for Clinical Innovation. Mr. Daniels has served on the Board of SVB Financial Group since October 2020. He also served on the Board of Playworks from December 2015 to January 2023. Before Kaiser Permanente, Mr. Daniels held technology leadership roles at Capital One and JPMorgan. Mr. Daniels holds a B.A.Sc. in Business Administration and Management from Texas State University. We believe that Mr. Daniels is qualified to serve as a member of our Board of Directors because of his leadership experience in technology roles, service as a member of the board of directors for other companies, and deep knowledge of information security risks. | | |||
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| | | Todd Nightingale AGE: 44 has served as our Chief Executive Officer and as a member of our Board of Directors since September 2022. Mr. Nightingale previously served as the Executive Vice President and General Manager of Enterprise Networking and Cloud at Cisco Systems, Inc. since March 2020. From June 2016 to March 2020, Mr. Nightingale served as the Senior Vice President and General Manager of Cisco Meraki. Prior to that he held various roles as a Vice President at Cisco Meraki. Mr. Nightingale holds a Bachelor of Science in electrical engineering and computer science from Massachusetts Institute of Technology as well as a Masters in engineering from Massachusetts Institute of Technology. We believe that Mr. Nightingale’s deep industry experience, including product engineering and business leadership roles in networking and cybersecurity, qualifies him to serve as a member of our Board of Directors. | | | |
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| | | Name | | | Audit | | | Compensation | | | Nominating and Corporate Governance | | | | | | | Name | | | Audit | | | Compensation | | | Nominating and Corporate Governance | | | | |||
| | | Aida Álvarez(1) | | | | | • | | | | | | Aida Álvarez | | | | | • | | | | ||||||||||||
| | | Artur Bergman(2) | | | | | | | | | | Artur Bergman(1) | | | | | | | | ||||||||||||||
| | | Joshua Bixby(2) | | | | | | | | | | Richard Daniels | | | • | | | | | | |||||||||||||
| | | Sunil Dhaliwal | | | • | | | | | | | | David Hornik(2) | | | | | • | | | • | | |||||||||||
| | | David M. Hornik | | | | | | | • | | | | Paula Loop | | | • | | | | | • | | |||||||||||
| | | Christopher B. Paisley | | | | | | | • | | | | Charles Meyers(3) | | | | | | | | |||||||||||||
| | | Gil Penchina(3) | | | | | • | | | • | | | | Todd Nightingale(1) | | | | | | | | ||||||||||||
| | | Kelly Wright | | | • | | | • | | | | | | Christopher Paisley | | | | | | | • | | |||||||||||
| | | Total Number of Meetings in 2019 | | | 7 | | | 3 | | | 4 | | | | Vanessa Smith | | | | | | | • | | ||||||||||
| | | | | | | | | Total Number of Meetings in 2023 | | | 11 | | | 5 | | | 4 | | |||||||||||||||
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• | | | Member | | | | | | | | | |
(1) |
Mr. Bergman and Mr. |
(2) | Mr. |
(3) | Mr. |
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* | Director from an underrepresented community means an individual who self-identifies as Black, African American, Hispanic, Latino, Asian, Pacific Islander, Native American, Native Hawaiian, or Alaska Native, or who self-identifies as gay, lesbian, bisexual, or transgender. |
| | | Business and Management | | | Customer Experience | | | International Business | | | Technology or Innovation | | | Cybersecurity, Information Security or Privacy | | | Operations | | | Finance and Capital Allocation | | | Strategic Transactions | | | Environmental and Social Responsibility | | |
| Aida Álvarez | | | ✔ | | | | | ✔ | | | | | | | | | ✔ | | | | | ✔ | | |||||
| Artur Bergman | | | | | ✔ | | | | | ✔ | | | ✔ | | | ✔ | | | | | | | | |||||
| Richard Daniels | | | ✔ | | | | | | | ✔ | | | ✔ | | | | | ✔ | | | | | | |||||
| David Hornik | | | ✔ | | | | | | | ✔ | | | | | | | ✔ | | | ✔ | | | | |||||
| Paula Loop | | | ✔ | | | | | ✔ | | | | | | | ✔ | | | ✔ | | | | | | |||||
| Charles Meyers | | | ✔ | | | ✔ | | | ✔ | | | ✔ | | | ✔ | | | ✔ | | | ✔ | | | ✔ | | | | |
| Todd Nightingale | | | ✔ | | | ✔ | | | ✔ | | | ✔ | | | ✔ | | | ✔ | | | | | | | | |||
| Christopher Paisley | | | ✔ | | | | | ✔ | | | | | | | | | ✔ | | | | | | ||||||
| Vanessa Smith | | | ✔ | | | ✔ | | | | | ✔ | | | | | ✔ | | | | | | | | |||||
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| | | | RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | | | | ||||||||
| | | | The Audit Committee of our Board of Directors has selected Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending December 31, | | | | ||||||||
| | | Neither our Amended and Restated Bylaws nor other governing documents or law require | | | | |||||||||
| | | The affirmative vote of the holders of a majority of the shares present | | | | | ||||||||
| | | | Principal Accountant Fees and Services | | | | | |||||||
| | | | The following table represents aggregate fees billed to the Company for the fiscal years ended December 31, | | | | |
| | | | | | | | | ||||||||||||||||||||
| | | | Fiscal Year Ended | | | | | | | | | Fiscal Year Ended | | | | ||||||||||||
| | | | 2019 | | 2018 | | | | | | | | | 2023 | | 2022 | | | | | |||||||
| | | | (in thousands) | | | | | | | | | (in thousands) | | | | ||||||||||||
| | | Audit Fees(1) | | $3,238 | | | $317 | | | | | | Audit Fees(1) | | $3,234 | | | $3,282 | | | | ||||||
| | | Audit-related Fees(2) | | 0 | | | 0 | | | | | | Audit-related Fees(2) | | $0 | | | $0 | | | | ||||||
| | | Tax Fees(3) | | 316 | | | 209 | | | | | | Tax Fees(3) | | $269 | | | $655 | | | | ||||||
| | | All Other Fees(4) | | 0 | | | 0 | | | | | | All Other Fees(4) | | $7 | | | $0 | | | | ||||||
| | | Total Fees | | $3,554 | | | $526 | | | | | | Total Fees | | $3,510 | | | $3,937 | | | | ||||||
| | (1) Consists of fees and expenses billed for professional services rendered in connection with the audit of our consolidated financial statements, reviews of our quarterly consolidated financial statements, related accounting consultations, and services provided in connection with our initial public offering and other regulatory filings. | | | | (1) Consists of fees and expenses billed for professional services rendered in connection with the audit of our consolidated financial statements and audit of internal control over financial reporting, reviews of our quarterly consolidated financial statements, related accounting consultations, and other regulatory filings. | | | | |||||||||||||||||||
| | (2) Consists of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of our consolidated financial statements and not reported under “Audit Fees”. | | | | | (2) Consists of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of our consolidated financial statements and not reported under “Audit Fees,” such as due diligence related to mergers and acquisitions. | | | | ||||||||||||||||||
| | (3) Tax Fees consist of fees for professional services for domestic and international tax advisory services for tax planning, compliance, and advice. | | | | | (3) Tax Fees consist of fees for professional services for domestic and international tax advisory services for tax planning, compliance, and advice. | | | | ||||||||||||||||||
| | (4) Consists of aggregate fees billed for services provided by the independent registered public accounting firm other than those disclosed above. | | | | | (4) Consists of aggregate fees billed for services provided by the independent registered public accounting firm other than those disclosed above. | | | | ||||||||||||||||||
| | All services rendered for these fees were pre-approved by the Audit Committee in accordance with the Audit Committee’s pre-approval policies and procedures. | | | | | All services rendered for these fees were pre-approved by the Audit Committee in accordance with the Audit Committee’s pre-approval policies and procedures. | | | | ||||||||||||||||||
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| | | Pre-Approval Policies and Procedures | | | | | |||||||
| | | | The Audit Committee has adopted a policy and procedures for the pre-approval of audit and non-audit services rendered by our independent registered public accounting firm, Deloitte & Touche LLP. The policy generally pre-approves specified services in the defined categories of audit services, audit-related services, and tax services up to specified amounts. Pre-approval may also be given as part of the Audit Committee’s approval of the scope of the engagement of the independent auditor or on an individual, explicit, case-by-case basis before the independent auditor is engaged to provide each service. The pre-approval of services may be delegated to one or more of the Audit Committee’s members, but the decision must be reported to the full Audit Committee at its next scheduled meeting. The Audit Committee has determined that the rendering of services, such as tax advice, other than audit services by Deloitte & Touche LLP is compatible with maintaining the principal accountant’s independence. | | | | | ||||||
| | | | | | |
| | The Board of Directors Recommends a Vote in Favor of Proposal 2. |
ADVISORY VOTE ON EXECUTIVE COMPENSATION | |||
We are asking our stockholders to vote to approve, on an advisory basis, the compensation of our Named Executives Officers for 2023 as disclosed in this Proxy Statement, in accordance with the requirements of Section 14A of the Exchange Act. As described in detail under the heading “Compensation Discussion and Analysis,” our executive compensation program is designed to drive and reward performance and align the compensation of our Named Executives Officers with the long-term interests of our stockholders. Please read the “Compensation Discussion and Analysis” and the compensation tables and narrative disclosure that follow for additional details about our executive compensation program, including information about the 2023 compensation of our Named Executives Officers. | |||
This proposal, commonly known as a “say-on-pay” proposal, gives our stockholders the opportunity to express their views on our Named Executives Officers’ compensation as a whole. This vote is not intended to address any specific element of compensation but rather the overall compensation of our Named Executives Officers and the philosophy, policies and practices described in this Proxy Statement. Our Board of Directors and our Compensation Committee believe that these policies and practices are effective in implementing our compensation philosophy and in achieving our compensation program goals. | |||
Following our 2023 annual meeting of stockholders we conducted an extensive outreach campaign to connect directly with our stockholders and get their feedback on various topics, including regarding the results of our most recent say-on-pay vote. In response to the feedback we received, we made meaningful changes to our executive compensation program. Our outreach initiatives, as well as the related changes to our executive compensation programs, are described in more detail below under the section titled “Compensation Discussion and Analysis — 2023 “Say-on-Pay” Advisory Stockholder Vote on Executive Compensation & Stockholder Engagement” | |||
Accordingly, we are asking our stockholders to vote “For” the following resolution: | |||
RESOLVED, that the stockholders hereby approve, on an advisory non-binding basis, the compensation paid to the Company’s Named Executives Officers, as disclosed in this Proxy Statement, pursuant to the compensation disclosure rules of the SEC, including the Compensation Discussion and Analysis, the compensation tables and the narrative discussions that accompany the compensation tables. | |||
Vote Required | |||
The approval of this advisory proposal requires the affirmative vote of a majority of the voting power of the shares of our common stock present online or by proxy at the annual meeting and entitled to vote on the matter. | |||
As an advisory vote, the outcome of the vote on this proposal is not binding. However, our management team, our Board of Directors and our Compensation Committee, which is responsible for designing and administering our executive compensation program, value the opinions expressed by our stockholders, whether through this vote or otherwise, and will consider the outcome of this vote when making future executive compensation decisions. | |||
We currently conduct annual advisory votes on executive compensation and expect to conduct the next advisory vote at our next annual meeting of stockholders in 2025. | |||
| |
The Board |
| | | Total Beneficial Ownership | | | | Total Beneficial Ownership | | |||||||||||||||||
| | | Class A Common Stock | | Class B Common Stock | | Voting Power | | | | Class A Common Stock | | |||||||||||||
| Name of Beneficial Owner | | Shares | | % | | Shares | | % | | % of Total Voting Power | | Name of Beneficial Owner | | Shares | | % | | |||||||
| 5% Stockholders: | | | | | | | | 5% Stockholders: | | | | | ||||||||||||
| Entities Affiliated with August Capital(1) | | | — | | — | | 5,304,855 | | 21.5% | | 16.7% | | Entities Affiliated with Vanguard(1) | | | 13,433,181 | | 9.8 | | |||||
| Entities Affiliated with Iconiq Strategic Partners(2) | | | 6,774,333 | | 9.5% | | — | | — | | 2.1% | | Entities Affiliated with FMR(2) | | | 11,515,587 | | 8.4 | | |||||
| Entities Affiliated with Amplify Partners(3) | | | — | | — | | 3,937,741 | | 15.9% | | 12.4% | | Entities Affiliated with Blackrock(3) | | | 11,333,297 | | 8.3 | | |||||
| Entities Affiliated with Abdiel Qualified Master Fund(4) | | | 8,452,987 | | 11.9% | | — | | — | | 2.7% | | Named Executive Officers and Directors: | | | | | |||||||
| Named Executive Officers and Directors: | | | | | | | | Aida Álvarez(4) | | | 41,724 | | * | | ||||||||||
| Aida Álvarez | | | — | | — | | — | | — | | — | | Artur Bergman(5) | | | 7,764,314 | | 5.7 | | |||||
| Artur Bergman(5) | | | — | | — | | 11,805,423 | | 46.1% | | 36.0% | | Richard Daniels(6) | | | 31,558 | | * | | |||||
| Joshua Bixby(6) | | | 1,562 | | * | | 808,565 | | 3.2% | | 2.5% | | David Hornik(7) | | | 205,488 | | * | | |||||
| Paul Luongo(7) | | | 101,851 | | * | | 365,840 | | 1.5% | | 1.2% | | Ronald Kisling(8) | | | 215,254 | | * | | |||||
| David Hornik(8) | | | 179,630 | | * | | 5,304,855 | | 21.5% | | 16.7% | | Paula Loop(9) | | | 33,832 | | * | | |||||
| Sunil Dhaliwal(9) | | | 103,687 | | * | | 3,937,741 | | 15.9% | | 12.4% | | Charles Meyers(10) | | | 33,832 | | * | | |||||
| Christopher Paisley(10) | | | — | | — | | 229,838 | | * | | * | | Christopher Paisley(11) | | | 236,370 | | * | | |||||
| Kelly Wright(11) | | | — | | — | | 226,838 | | * | | * | | Todd Nightingale(12) | | | 610,965 | | * | | |||||
| All executive officers and directors as a group (10 persons)(12) | | | 386,730 | | * | | 23,748,946 | | 86.3% | | 68.6% | | Brett Shirk(13) | | | 29,067 | | * | | |||||
| Vanessa Smith(14) | | | 34,324 | | * | | ||||||||||||||||||
| All current executive officers and directors as a group (10 persons)(15) | | | 9,165,937 | | 6.7% | |
* | Less than one percent. |
(1) |
(2) | Based solely on a report on Schedule 13G filed with the |
Based solely on |
Consists of |
(5) | Consists of (i) 5,739,331 shares of Class A common stock held by |
(6) | Consists of |
Consists of |
(8) | Consists of (i) 200,631 shares of |
(9) | Consists of 33,832 shares of common stock held by |
(10) | Consists of 33,832 shares of common stock held by Mr. Meyers. |
(11) | Consists of (i) |
(12) | Consists of |
Consists of 29,067 shares of common stock held by Mr. Shirk. |
(14) | Consists of 34,243 shares of common stock held by Ms. Smith. |
(15) | Consists of (i) |
| Name | | | Age | | | Position | |
| Artur Bergman | | | | | Chief | | |
| | | | | Chief Executive Officer and Director | | ||
| | | | | Chief Financial Officer | |
| | Ronald Kisling AGE: has served as our Chief Financial Officer since |
• | Limited Cash and Annual Incentive (bonus) Compensation Increases for 2023: The Committee did not make any changes to our Named Executive Officers’ base salaries for 2023. Except for Mr. Kisling’s target bonus opportunity which was increased to 25% of base salary (up from 15% of base salary), no changes were made to our Named Executive Officers’ target bonuses. |
• | Recalibrated Long term Incentive (“LTI”) Awards with shorter vesting period for certain non-CEO awards: The Committee reduced the size of |
• | Incentive outcomes paid out just below target: The annual incentive (bonus) and performance-based restricted stock units (“PSUs”) were achieved at 97.7% of target based on the financial goals established at the beginning of the year. |
| Topic Area | | | Stockholder Feedback | | | Company Response | |
| Mix of performance-based LTI | | | Stockholders expressed a preference for the performance-based LTI mix to be at least 50%. | | | We increased our CEO’s performance-based LTI mix to 60% in 2024, increasing his pay-for-performance orientation. The Compensation Committee will continue to assess the performance-based LTI mix of our other Named Executive Officers to ensure appropriate pay-for-performance alignment, to remain competitive with the market, and to support our talent strategy and compensation philosophy. | |
| Design of PSUs | | | Stockholders expressed a preference for diversified metrics and a multi-year performance measurement period for PSUs under the LTI program to differentiate from the annual incentive program. | | | We will continue to evaluate the metrics and performance periods for our PSUs to ensure that they align with our business priorities and needs. While we considered a variety of alternative designs, we maintained our existing PSU program design for now as the current design continues to align with our focus on revenue growth and profitability, and recognizes the need for strategic flexibility during a period of digital transformation for many of our current and potential customers. | |
| Enhancing stock ownership guidelines | | | Stockholders expressed a preference for more robust stock ownership guidelines for our Named Executive Officers. | | | As described below in “Additional Information–Stock Ownership Guidelines,” in February 2024, our Compensation Committee introduced more robust stock ownership guidelines for our Named Executive Officers, requiring our CEO to hold 6x his annual base salary (up from 3x), and other executive officers to hold 3x their annual base salary (up from 1x), encouraging even greater alignment of the interests of our Named Executive Officers and our stockholders. | |
| Link Pay to Performance | | | We link pay to performance by delivering a substantial portion of total compensation for our executive officers in the form of long-term equity awards. | |
| Engage with independent compensation consultant | | | Our Compensation Committee directly engages an independent compensation consultant to provide analysis for the annual executive compensation review and guidance on other executive compensation matters independent of management. | |
| Double-Trigger acceleration | | | Equity awards held by our Named Executive Officers provide for “double-trigger” acceleration meaning that vesting accelerates only in the event of a change in control of the Company plus a qualifying termination of employment. | |
| Robust Ownership Guidelines | | | We require our Named Executive Officers and non-employee directors to acquire and maintain a meaningful equity stake in the Company through robust ownership guidelines. | |
| Maintain a Clawback Policy | | | We maintain a clawback policy applicable to all Named Executive Officers for incentive compensation (cash and equity). | |
| Set rigorous and measurable performance goals | | | Certain of our Named Executive Officers are eligible for LTI opportunities based on rigorous and measurable performance goals. | |
| Annual Say-on-Pay Vote | | | Our stockholders are provided with the opportunity to cast a non-binding advisory vote on the compensation of our Named Executive Officers. | |
| Engage with stockholders on compensation and governance matters | | | Our Compensation Committee conducted stockholder outreach to discuss our executive compensation program, policies, and practices, and to solicit feedback to ensure that we received insight into the issues that were most important to our stockholders, including corporate governance practices and ESG matters. | |
| Consider Peer Group and Market Data | | | Our Compensation Committee, with support from our compensation consultant, reviews competitive market data and selects companies to include in our peer group. | |
| Provide Limited Perquisites | | | We do not generally provide perquisites or other personal benefits to our executive officers, including the Named Executive Officers. | |
| Compensation Element | | | Relationship to Business Objectives | |
| Base Salary | | | Base salaries are set to be competitive within our industry and are important in attracting and retaining talented executives. Base salaries may be adjusted based on numerous factors, including a change in a Named Executive Officer’s responsibilities, demonstrated performance or relevant competitive market data. During 2023, Mr. Bergman was eligible to reduce his base salary to a lesser amount (in no event lower than the applicable minimum wage) and receive an RSU award based on the amount of such reduction. Mr. Bergman elected to reduce his base salary to the applicable minimum wage. | |
| Annual Incentive | | | In 2023, our Named Executive Officers (excluding Mr. Shirk) were eligible for annual incentives tied to our level of achievement of annual revenue goals pursuant to our 2023 Bonus Program. Except for Mr. Nightingale, whose award was paid in cash, awards under the 2023 Bonus Program were paid as fully vested RSUs. In addition, Mr. Shirk was eligible to participate in our Commission Plan (as defined below), which tied his annual compensation directly to achievement of certain sales metrics. | |
| Annual Long-Term Incentive Equity | | | In our annual long-term incentive design, we primarily rely on a combination of PSUs and time-based RSUs. All of our Named Executive Officers, except for Mr. Bergman as our founder, received both PSUs and RSUs in 2023. The PSUs represent 50% of the LTI opportunity for Mr. Nightingale and 30% of the LTI opportunity for Mr. Kisling and Mr. Shirk, and reward executives for meeting certain financial performance requirements set up at the beginning of the year. The focus on revenue growth and profitability are key value creation metrics for our business. The RSUs represent 50% of the LTI opportunity for Mr. Nightingale, and 70% of the LTI opportunity for Mr. Kisling and Mr. Shirk and provide reasonable balance against the PSUs and support in the retention of executives critical to the Company’s ongoing success. Mr. Bergman received a combination of options and RSUs for 2023, which reflects his unique individual status as a founder and recent equity history (for more information, see “Fiscal 2023 Annual Long-Term Incentive Equity – Chief Technology Officer Long Term Incentive Equity” below). | |
| Benefits | | | We offer competitive health and welfare benefits, as well as participation in the ESPP, 401(k) plan for United States employees, and other employee benefit plans. | |
| | | |
| • | | | 8x8, Inc. (EGHT) | | | • | | | Momentive Global | |
| • | | | A10 Networks (ATEN) | | | • | | | Rapid7, Inc. (RPD) | |
| • | | | Alteryx (AYX) | | | • | | | Semrush Holdings, Inc. (SEMR) | |
| • | | | AppFolio, Inc. (APPF) | | | • | | | Smartsheet, Inc. (SMAR) | |
| • | | | BigCommerce Holdings, Inc. (BIGC) | | | • | | | Sumo Logic, Inc. (SUMO) | |
| • | | | BlackLine, Inc. (BL) | | | • | | | Tenable Holdings, Inc. (TENB) | |
| • | | | DOMO, Inc. (DOMO) | | | • | | | Varonis Systems, Inc. (VRNS) | |
| • | | | Everbridge, Inc. (EVBG) | | | • | | | Yext, Inc. (YEXT) | |
| • | | | JFrog Ltd. (FROG) | | | • | | | Zuroa, Inc. (ZUO) | |
| Executive | | | 2022 Base Salary | | | 2023 Base Salary | | | % Change | |
| Todd Nightingale | | | $600,000 | | | $600,000 | | | 0% | |
| Artur Bergman | | | $500,000 | | | $500,000 | | | 0% | |
| Ronald Kisling | | | $600,000 | | | $600,000 | | | 0% | |
| Brett Shirk(1) | | | $450,000 | | | $450,000 | | | 0% | |
(1) | Mr. Shirk served as our Chief Revenue Officer until December 1, 2023. The amount shown in this table is his 2023 annual base salary and does not reflect amounts actually paid prior to his termination of employment. |
| Executive | | | Target Bonus | |
| Todd Nightingale | | | $600,000 | |
| Artur Bergman | | | $165,000 | |
| Ronald Kisling | | | $150,000 | |
| Revenue Performance Goal | | | | | | ||||||||
| Threshold 50% Payout | | | Target 100% Payout | | | Max 150% Payout | | | Actual Achievement | | | Payout Factor | |
| $488M | | | $519M | | | $550M | | | $506M | | | 79.0% of Target | |
| Non-GAAP Operating Loss % of Revenue Goal | | | | | | ||||||||
| Threshold 50% Payout | | | Target 100% Payout | | | Max 150% Payout | | | Actual Achievement | | | Payout Factor | |
| -13% | | | -10% | | | -6% | | | -7.2% | | | 135.0% of Target | |
| Executive | | | PSUs at Target | | | PSU Value | | | RSU Grant | | | RSU Value | | | Option Grant | | | Option Value | |
| Todd Nightingale | | | 291,828(1) | | | $4,489,044 | | | 291,828(1) | | | $4,489,044 | | | — | | | — | |
| Artur Bergman | | | — | | | — | | | 301,169 | | | $4,960,253 | | | 602,338 | | | $6,619,695 | |
| Ron Kisling | | | 70,038 | | | $1,159,829 | | | 163,424 | | | $2,706,301 | | | — | | | — | |
| Brett Shirk | | | 46,692 | | | $773,220 | | | 108,949 | | | $1,804,195 | | | — | | | — | |
(1) | These figures reflect two separate grants made in March 2023 and May 2023 to encompass Mr. Nightingale’s total Annual LTI. |
| Executive | | | PSUs at Target | | | PSU Value | | | PSUs Actually Earned | |
| Todd Nightingale | | | 291,828(1) | | | $4,489,044 | | | 285,113 | |
| Ron Kisling | | | 70,038 | | | $1,159,829 | | | 68,426 | |
| Brett Shirk(2) | | | 46,692 | | | $773,220 | | | — | |
(1) | This figure reflects two separate grants made in March 2023 and May 2023. |
(2) | Mr. Shirk was ineligible to receive any portion of his PSUs because of his resignation. |
| Position | | | Ownership Guidelines | |
| CEO | | | 6x annual base salary | |
| Other Executive Officers | | | 3x annual base salary | |
| Non-Employee Directors | | | 4x annual cash retainer for Board of Directors and committee service | |
| Name and Principal Position | | | Year | | | Salary | | | Bonus(1) | | | Stock Awards(2) | | | Option Awards(3) | | | All Other Compensation(4) | | | Total | |
| Joshua Bixby | | | 2019 | | | $425,000(7) | | | $— | | | $2,052,885 | | | $— | | | $— | | | $2,477,884 | |
| Chief Executive Officer and Director(6) | | | 2018 | | | $425,000(7) | | | $— | | | $— | | | $749,480 | | | $— | | | $1,174,480 | |
| Artur Bergman | | | 2019 | | | $504,000 | | | $— | | | $5,930,567 | | | $— | | | $54 | | | $6,434,620 | |
| Chief Architect, Executive Chairperson and Director(5) | | | 2018 | | | $360,000 | | | $— | | | $— | | | $— | | | $54 | | | $360,054 | |
| Paul Luongo | | | 2019 | | | $450,000 | | | $15,285 | | | $1,824,778 | | | $— | | | $54 | | | $2,290,117 | |
| General Counsel and Senior Vice President, Trust | | | 2018 | | | $400,000 | | | $— | | | $— | | | $374,740 | | | $54 | | | $774,794 | |
| Name and Principal Position | | | Year | | | Salary ($) | | | Bonus ($) | | | Stock Awards ($)(1) | | | Options ($)(2) | | | Non-Equity Incentive Plan Compensation ($)(3) | | | All Other Compensation ($)(4) | | | Total ($) | |
| Todd Nightingale | | | 2023 | | | 600,000 | | | — | | | 8,978,088 | | | — | | | 586,200 | | | 1,180 | | | 10,165,468 | |
| CEO and Director | | | 2022 | | | 200,000 | | | 1,000,000 | | | 20,514,116 | | | — | | | 141,587 | | | 2,053 | | | 21,857,756 | |
| Artur Bergman(5) | | | 2023 | | | 500,000(6) | | | — | | | 5,269,622 | | | 6,619,695 | | | — | | | 26 | | | 12,389,342 | |
| Chief Technology Officer and Director | | | 2022 | | | 466,954 | | | — | | | 165,000 | | | — | | | — | | | 12,676 | | | 644,630 | |
| 2021 | | | 532,559 | | | — | | | 4,808,965 | | | — | | | — | | | 80 | | | 5,341,604 | | |||
| Ronald Kisling | | | 2023 | | | 600,000 | | | — | | | 4,016,131 | | | — | | | — | | | 1,180 | | | 4,617,311 | |
| Chief Financial Officer | | | 2022 | | | 600,000 | | | — | | | 6,708,641 | | | — | | | — | | | 1,173 | | | 7,309,813 | |
| 2021 | | | 261,364 | | | — | | | 10,194,160 | | | — | | | — | | | 1,660 | | | 10,457,184 | | |||
| Brett Shirk(7) | | | 2023 | | | 414,205 | | | — | | | 2,577,415 | | | — | | | 603,662 | | | 1,173 | | | 3,596,454 | |
| Former Chief Revenue Officer | | | 2022 | | | 450,000 | | | — | | | 4,847,229 | | | — | | | 890,965 | | | 1,173 | | | 6,189,367 | |
| 2021 | | | 385,417 | | | — | | | 10,460,200 | | | — | | | 239,056 | | | 2,460 | | | 11,087,133 | |
(1) |
Amounts shown in this column do not reflect dollar amounts actually received by our Named Executive Officers. Instead, in accordance with SEC rules, these amounts reflect the aggregate grant date fair value of |
Amounts shown in this column do not reflect dollar amounts actually received by our Named Executive Officers. Instead, in accordance with SEC rules, these amounts reflect the aggregate grant date fair value of stock option awards granted during |
(3) | Amounts reported in this column represent commissions for Mr. Shirk and cash incentive payments based on actual achievement for Mr. Nightingale pursuant to the 2023 Bonus Program. See “Compensation Discussion and Analysis—Principal Elements of Compensation—Commission Plan” and “Compensation Discussion and Analysis—Principal Elements of Compensation—Cash Annual Incentive.” |
(4) |
(5) | Mr. Bergman |
On April 4, 2024, Mr. |
(7) | On November 27, 2023, Mr. Shirk notified the Company of his decision to resign as Chief Revenue Officer effective December 1, 2023, and the amount in the Salary column reflects his salary earned for the partial year of service. The amount in the Stock Awards column includes the value of Mr. |
| | | | | Estimated Possible Payouts Under Non-Equity Incentive Plan Awards(1) | | | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | | | All Other Stock Awards: Number of Shares of Stock or Units (#) | | | All Other Option Awards: Number of Securities Underlying Options (#) | | | Exercise or Base Price of Option Awards ($/sh) | | | Grant Date Fair Value of Stock and Option Awards ($) | | ||||||||||||||
| Name | | | Grant Date | | | Threshold ($) | | | Target ($) | | | Maximum ($) | | | Threshold (#/$) | | | Target (#/$) | | | Maximum (#/$) | | ||||||||||||
| Todd Nightingale | | | 03/29/2023 | | | 300,000 | | | 600,000 | | | 900,000 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
| | | 03/29/2023 | | | — | | | — | | | — | | | 109,435 | | | 218,871(3) | | | 328,306 | | | — | | | — | | | — | | | 3,624,504 | | |
| | | 03/29/2023 | | | — | | | — | | | — | | | — | | | — | | | — | | | 218,871(4) | | | — | | | — | | | 3,624,504 | | |
| | | 05/04/2023 | | | — | | | — | | | — | | | 36,478 | | | 72,957(3) | | | 109,435 | | | — | | | — | | | — | | | 864,540 | | |
| | | 05/04/2023 | | | — | | | — | | | — | | | — | | | — | | | — | | | 72,957(5) | | | — | | | — | | | 864,540 | | |
| Artur Bergman | | | 02/13/2023 | | | — | | | — | | | — | | | — | | | — | | | — | | | 48,286(6) | | | — | | | — | | | 608,404 | |
| | | 11/02/2023 | | | — | | | — | | | — | | | $82,500 | | | $165,000(7) | | | $247,500 | | | — | | | — | | | — | | | 165,000 | | |
| | | 11/02/2023 | | | — | | | — | | | — | | | — | | | — | | | — | | | 301,169(8) | | | — | | | — | | | 4,960,253 | | |
| | | 11/02/2023 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 602,338(9) | | | 16.47 | | | 6,619,695 | | |
| Ronald Kisling | | | 03/29/2023 | | | — | | | — | | | — | | | $75,000 | | | $150,000(7) | | | $225,000 | | | — | | | — | | | — | | | 150,000 | |
| | | 03/29/2023 | | | — | | | — | | | — | | | 35,019 | | | 70,038(3) | | | 105,057 | | | — | | | — | | | — | | | 1,159,829 | | |
| | | 03/29/2023 | | | — | | | — | | | — | | | — | | | — | | | — | | | 163,424(4) | | | — | | | — | | | 2,706,301 | | |
| Brett Shirk | | | N/A | | | — | | | 450,000 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
| | | 03/29/2023 | | | — | | | — | | | — | | | 23,346 | | | 46,692(3) | | | 70,038 | | | — | | | — | | | — | | | 773,220 | | |
| | | 03/29/2023 | | | — | | | — | | | — | | | — | | | — | | | — | | | 108,949(4) | | | — | | | — | | | 1,804,195 | |
(1) | Amounts shown in this column represent the threshold, target, and maximum amount of possible cash incentive opportunities provided to Mr. Nightingale pursuant to our Bonus Plan. Based on achievement of 97.7% of the 2023 Objectives, Mr. Nightingale earned 65.1% of this Maximum possible bonus. This column also includes cash commission awards provided for Mr. Shirk pursuant to our Commission Plan. The Commission Plan does not provide for a threshold or maximum amount to Mr. Shirk. See “2023 Summary Compensation Table” above for amounts achieved under the Bonus Plan and Commission Plan. |
(2) | Our 2023 Bonus Program provided for payment of bonuses based on our achievement of the 2023 Objectives with amounts earned by the Named Executive Officers to be paid in the form of fully vested RSUs. For Messrs. Bergman and Kisling, the amounts shown in the “Estimated Future Payouts Under Equity Incentive Plan Awards” column of this table include the applicable dollar values of the bonus award, which was converted to a number of fully vested RSUs that were issued with respect to the bonuses earned under our 2023 Bonus Program (as determined by dividing the applicable dollar value of the bonus earned by the closing price of our common stock on February 23, 2024, of $14.21, rounded down to the nearest whole RSU. Additional information on the payment of the 2023 Bonus Program bonuses is set out in footnote 2 to the Summary Compensation Table and footnote 5 to this table. |
(3) | These awards were granted by our Compensation Committee in March 2023 and May 2023 and may be earned from 0% to 150% based on the achievement of certain pre-established performance goals during fiscal year 2023. Once earned, this award would be subject to time-based vesting, with 33% of the earned shares vesting on February 22, 2024, and 8.375% quarterly thereafter on May 22, August 22, November 22 and February 22, subject to the grantee continuing to provide services to us through each vesting date. 97.7% of the pre-established performance goals were met, and the grantees were eligible to receive 97.7% of the target number of shares. |
(4) | Consists of time-based vesting RSUs, which vested as to 1/16th of the shares on May 15, 2023, and are eligible to vest through the third anniversary of the vesting commencement date, subject to the grantee continuing to provide services to us through each vesting date. |
(5) | Consists of time-based vesting RSUs, eligible to vest in substantially equal quarterly installments beginning on May 15, 2026 and 1/4th quarterly thereafter, subject to Mr. Nightingale’s continuous service through each such date. |
(6) | RSUs granted as part of base salary reduction. |
(7) | Amounts in this row reflect the threshold, target and maximum bonus dollar amounts payable in the form of fully vested RSUs granted under the 2023 Bonus Program, as further explained in footnote 2 to this table and in footnote 2 to the Summary Compensation Table. |
(8) | Consists of time-based vesting RSUs, which vested as to 1/16th of the shares on February 15, 2024, and vest as to the remainder of the shares in 15 equal quarterly installments thereafter, subject to Mr. Bergman’s continuous service through each such date. |
(9) | Consists of nonstatutory stock options to purchase shares of our Class A common stock, which vested as to 1/16th of the shares subject to the option on November 15, 2023, and vest as to the remainder of the shares in 15 equal quarterly installments thereafter, subject to continuous service through each such date. |
| | | Option Awards(1) | | | Stock Awards(1) | | |||||||||||||||||||
| | | Vesting Commencement Date | | | Grant Date | | | Number of Securities Underlying Unexercised Options (#) Exercisable | | | Number of Securities Underlying Unexercised Options (#) Unexercisable | | | Option Exercise Price ($) | | | Option Expiration Date | | | Number of Shares or Units of Stock That Have Not Vested(#)(9) | | | Market Value of Shares or Units of Stock That Have Not Vested($)(2) | | |
| Artur Bergman | | | 3/3/2015 | | | 6/2/2015 | | | 918,834(3) | | | — | | | $1.15 | | | 6/1/2025 | | | — | | | $— | |
| | | 8/15/2019 | | | 8/7/2019 | | | — | | | — | | | — | | | — | | | 302,889(10) | | | 6,078,982 | | |
| Joshua Bixby | | | 10/28/2013 | | | 10/31/2013 | | | 12,500(5) | | | — | | | 0.3112 | | | 10/30/2023 | | | — | | | — | |
| | | 3/3/2015 | | | 3/3/2015 | | | 100,000(6) | | | — | | | 1.15 | | | 3/2/2025 | | | — | | | — | | |
| | | 7/11/2016 | | | 7/12/2016 | | | 250,000(4)(7) | | | 36,456 | | | 2.36 | | | 7/11/2026 | | | — | | | — | | |
| | | 7/1/2017 | | | 8/1/2017 | | | 200,000(4)(7) | | | 79,157 | | | 3.14 | | | 7/31/2027 | | | — | | | — | | |
| | | 12/19/2018 | | | 12/20/2018 | | | 160,000(4)(8) | | | 149,996 | | | 7.50 | | | 12/19/2028 | | | — | | | — | | |
| | | 8/15/2019 | | | 8/7/2019 | | | — | | | — | | | — | | | — | | | 104,846(10) | | | 2,104,259 | | |
| Paul Luongo | | | 3/3/2015 | | | 3/3/2015 | | | 144,999(4)(9) | | | — | | | 1.15 | | | 3/2/2025 | | | — | | | — | |
| | | 12/19/2018 | | | 12/20/2018 | | | 100,000(4)(8) | | | 74,998 | | | 7.50 | | | 12/19/2028 | | | — | | | — | | |
| | | 8/15/2019 | | | 8/7/2019 | | | — | | | — | | | $— | | | — | | | 93,196(10) | | | $1,870,444 | |
| | | Option Awards(1) | | | Stock Awards(1) | | |||||||||||||||||||||||||
| | | | | | | | | | | | | | | Restricted Stock Units | | | Performance-Based Restricted Stock Units | | |||||||||||||
| | | Vesting Commencement Date | | | Grant Date | | | Number of Securities Underlying Unexercised Options Exercisable (#) | | | Number of Securities Underlying Unexercised Options Unexercisable (#) | | | Option Exercise Price ($) | | | Option Expiration Date | | | Number of Shares or Units of Stock That Have Not Vested (#)(2) | | | Market Value of Shares or Units of Stock That Have Not Vested ($)(3) | | | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | | | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | | |
| Todd Nightingale | | | 9/1/2022 | | | 9/6/2022 | | | — | | | — | | | — | | | — | | | — | | | — | | | 978,261(4) | | | 17,413,046 | |
| | | 9/1/2022 | | | 9/6/2022 | | | | | | | | | | | 684,783(5) | | | 12,189,137 | | | — | | | — | | |||||
| | | — | | | 3/29/2023 | | | — | | | — | | | — | | | — | | | | | | | 328,306(6) | | | 5,843,847 | | |||
| | | 2/15/2023 | | | 3/29/2023 | | | — | | | — | | | — | | | — | | | 164,154(7) | | | 2,921,941 | | | — | | | — | | |
| | | — | | | 5/4/2023 | | | — | | | — | | | — | | | — | | | | | | | 109,435(6) | | | 1,947,943 | | |||
| | | 2/15/2026 | | | 5/4/2023 | | | | | | | | | | | 72,957(8) | | | 1,298,635 | | | | | | |||||||
| Artur Bergman | | | 2/18/2020 | | | 2/18/2020 | | | — | | | — | | | — | | | — | | | 6,815(9) | | | 121,307 | | | — | | | — | |
| | | 2/15/2021 | | | 2/14/2021 | | | — | | | — | | | — | | | — | | | 9,817(10) | | | 174,742 | | | — | | | — | | |
| | | 11/2/2023 | | | 11/2/2023 | | | — | | | — | | | — | | | — | | | 301,169(11) | | | 5,360,808 | | | — | | | — | | |
| | | 11/2/2023 | | | 11/2/2023 | | | 37,646(12) | | | 564,692 | | | 16.47 | | | 11/1/2033 | | | — | | | — | | | — | | | — | | |
| Ronald Kisling | | | 7/15/2021 | | | 9/15/2021 | | | — | | | — | | | — | | | — | | | 102,361(9) | | | 1,822,026 | | | — | | | — | |
| | | — | | | 2/11/2022 | | | — | | | — | | | — | | | — | | | — | | | — | | | 11,695(13) | | | 208,171 | | |
| | | 2/15/2022 | | | 2/11/2022 | | | — | | | — | | | — | | | — | | | 51,930(9) | | | 924,354 | | | — | | | — | | |
| | | 5/15/2022 | | | 5/16/2022 | | | — | | | — | | | — | | | — | | | 28,750(14) | | | 511,750 | | | — | | | — | | |
| | | 9/1/2022 | | | 9/20/2022 | | | — | | | — | | | — | | | — | | | — | | | — | | | 172,500(4) | | | 3,070,500 | | |
| | | — | | | 3/29/2023 | | | — | | | — | | | — | | | — | | | — | | | — | | | 105,057(6) | | | 1,870,015 | | |
| | | 2/15/2023 | | | 3/29/2023 | | | — | | | — | | | — | | | — | | | 122,568(7) | | | 2,181,710 | | | — | | | — | |
(1) | The unvested shares subject to these awards may be subject to accelerated vesting upon a qualifying termination of employment, see “Employment |
(2) | Represent RSUs granted under our 2019 Plan. |
(3) | The market values of the restricted stock unit awards that have not vested are calculated by multiplying the number of shares underlying the award by |
(4) |
| Tranche | | | Stock Price Hurdle* | | | Earliest Vest Date** | | | Percentage of Performance-Based Award | |
| 1*** | | | $17.25 | | | November 15, 2023 | | | 25% | |
| 2 | | | $23.00 | | | November 15, 2024 | | | 25% | |
| 3 | | | $34.50 | | | November 15, 2025 | | | 25% | |
| 4 | | | $46.00 | | | November 15, 2026 | | | 25% | |
* | For purposes of this PSU Award, a Stock Price Hurdle will be achieved when the average closing price of the Company’s common stock during a period of 60 consecutive trading days equals or exceeds the applicable Stock Price Hurdle. |
$17.25 on August 17, 2023, and therefore, 1/4th of the total shares subject to this |
(5) | 1/10th of the total 1,304,347 shares subject to this RSU award vested on November 15, 2022, and 1/10th vested on each of February 15, 2023, May 15, 2023, and August 15, 2023, 7.5% vested on each of November 15, 2023, February 15, 2024, and May 15, 2024, 7.5% will vest on August 15, |
(6) | 1/ |
(7) | The RSUs that remain subject to this award vest in substantially equal quarterly installments through the third anniversary of the vesting commencement date, subject to continuous service through each such date. |
(8) | 1/4th of the total shares subject to this RSU award will vest on each of May 15, 2026, and 1/4th quarterly thereafter, subject to continuous service through each such date. |
(9) | The RSUs that remain subject to this award vest in substantially equal quarterly installments through the fourth anniversary of the vesting commencement date, subject to continuous service through each such date. |
(10) | 1/8th of the total 31,413 shares subject to this RSU award vested on August 15, 2021 and 1/14th vest quarterly thereafter, subject to continuous service through each such date. |
(11) | 1/16th of the total shares subject to this RSU award vested on February 15, 2024 and 1/16th vest quarterly thereafter, subject to continuous service through each such date. |
(12) | 1/16th of the shares subject to this option award vested on November 15, 2023 and 1/16th vest quarterly thereafter, subject to continuous service through each such date. |
(13) | The RSUs that remain subject to this award vest in substantially equal quarterly installments through February 28, 2025, subject to continuous service through each such date. |
(14) | The RSUs that remain subject to this award vest in substantially equal quarterly installments through the second anniversary of the vesting commencement date, subject to continuous service through each such date. |
| | | Option Awards | | | Stock Awards | | |||||||
| Name | | | Number of Shares Acquired on Exercise (#) | | | Value Realized on Exercise ($) | | | Number of Shares Acquired on Vesting (#) | | | Value Realized on Vesting ($) | |
| Todd Nightingale | | | — | | | — | | | 869,933 | | | 14,196,650 | |
| Artur Bergman | | | — | | | — | | | 148,561 | | | 2,298,482 | |
| Ronald Kisling | | | — | | | — | | | 258,227 | | | 4,126,776 | |
| Brett Shirk | | | — | | | — | | | 187,432 | | | 3,116,506 | |
| Year | | | Summary Compensation Table Total for Artur Bergman(1) | | | Compensation Actually Paid to Artur Bergman(1)(2) | | | Summary Compensation Table Total for Joshua Bixby(1) | | | Compensation Actually Paid to Joshua Bixby(1)(2) | | | Summary Compensation Table Total for PEO (Todd Nightingale)(1) | | | Compensation Actually Paid to Todd Nightingale(1)(2) | | | Average Summary Compensation Table Total for Non-PEO NEOs(3) | | | Average Compensation Actually Paid to Non-PEO NEOs(3)(4) | | | Value of Initial Fixed $100 Investment Based On: | | | Net Income (millions) | | | Revenue (millions)(6) | | |||
| Total Shareholder Return | | | Peer Group Total Shareholder Return(5) | | |||||||||||||||||||||||||||||||||
| (a) | | | (b) | | | (c) | | | (b) | | | (c) | | | (b) | | | (c) | | | (d) | | | (e) | | | (f) | | | (g) | | | (h) | | | (i) | |
| 2023 | | | — | | | — | | | — | | | — | | | $10,165,468 | | | $36,942,933 | | | $6,867,702 | | | $12,229,373 | | | $88.69 | | | $210.85 | | | $(133.1) | | | $506.0 | |
| 2022 | | | — | | | — | | | $9,199,127 | | | $(3,892,017) | | | $21,857,756 | | | $20,179,714 | | | $4,066,505 | | | $(2,381,573) | | | $40.81 | | | $134.82 | | | $(190.8) | | | $432.7 | |
| 2021 | | | — | | | — | | | $10,151,111 | | | $(12,802,716) | | | — | | | — | | | $7,088,904 | | | $(1,602,130) | | | $176.63 | | | $189.64 | | | $(222.7) | | | $354.3 | |
| 2020 | | | $6,767,258 | | | $38,184,386 | | | $8,049,162 | | | $52,180,083 | | | — | | | — | | | $3,816,864 | | | $19,287,475 | | | $435.33 | | | $142.21 | | | $(95.9) | | | $290.9 | |
(1) | The dollar amounts reported in columns (b) are the amounts reported for Messrs. Bergman, Bixby and Nightingale, respectively, for each corresponding year in the “Total” column of the Summary Compensation Table. Mr. Bergman served as our Chief Executive Officer in 2020 through February 18, 2020, after which time he became our Chief Architect and Executive Chairperson. Mr. Bergman resigned from his role as Executive Chairperson effective April 2023. Mr. Bergman became our Chief Technology Officer in April 2024. Mr. Bixby served as our Chief Executive Officer effective February 19, 2020 through August 31, 2022. Mr. Nightingale has served as our CEO since September 1, 2022. The following individuals served as our PEOs for the following years: |
(2) | The dollar amounts reported in columns (c) represent the amount of CAP for Messrs. Bergman, Bixby, and Nightingale, respectively as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual amount of compensation earned by or paid during the applicable year. The Company deducted from and added to the Summary Compensation Table total compensation the following amounts to calculate compensation actually paid in accordance with Item 402(v) of Regulation S-K as disclosed in columns (c) and (e) for our PEO and Non-PEO NEOs in each respective year. As the Company’s NEOs do not participate in any defined benefit plans, no adjustments were required to amounts reported in the Summary Compensation Table totals related to the value of benefits under such plans. There are no material differences between the assumptions used to compute the valuation of the equity awards for calculating the compensation actually paid from the assumptions used to compute the valuation of such equity awards as of the grant date. |
| | | 2023 | | | 2022 | | | 2021 | | | 2020 | | |||||||||||||||||||
| | | Todd Nightingale | | | Average Non-PEO NEOs | | | Todd Nightingale | | | Joshua Bixby | | | Average Non-PEO NEOs | | | Joshua Bixby | | | Average Non-PEO NEOs | | | Joshua Bixby | | | Artur Bergman | | | Average Non-PEO NEOs | | |
| Total Compensation from Summary Compensation Table | | | $10,165,468 | | | $6,867,702 | | | $21,857,756 | | | $9,199,127 | | | $4,066,505 | | | $10,151,111 | | | $7,088,904 | | | $8,049,162 | | | $6,767,258 | | | $3,816,864 | |
| Adjustments for Equity Awards | | | | | | | | | | | | | | | | | | | | | | ||||||||||
| Grant date values in the Summary Compensation Table | | | -$8,978,088 | | | -$6,160,954 | | | -$20,514,116 | | | -$8,693,058 | | | -$3,413,192 | | | -$9,618,134 | | | -$6,566,179 | | | -$7,630,888 | | | -$6,139,403 | | | -$3,108,033 | |
| Year-end fair value of unvested awards granted in the current year | | | $12,012,366 | | | $8,733,232 | | | $17,440,430 | | | $2,475,829 | | | $1,422,184 | | | $3,480,020 | | | $3,051,217 | | | $17,168,729 | | | $12,525,014 | | | $7,009,724 | |
| | | 2023 | | | 2022 | | | 2021 | | | 2020 | | |||||||||||||||||||
| | | Todd Nightingale | | | Average Non-PEO NEOs | | | Todd Nightingale | | | Joshua Bixby | | | Average Non-PEO NEOs | | | Joshua Bixby | | | Average Non-PEO NEOs | | | Joshua Bixby | | | Artur Bergman | | | Average Non-PEO NEOs | | |
| Year-over-year difference of year-end fair values for unvested awards granted in prior years | | | $15,809,027 | | | $1,261,639 | | | $0 | | | -$2,985,352 | | | -$2,504,587 | | | -$12,631,447 | | | -$3,455,201 | | | $22,005,767 | | | $14,014,350 | | | $5,408,818 | |
| Fair values at vest date for awards granted and vested in current year | | | $897,541 | | | $832,627 | | | $1,395,644 | | | $445,932 | | | $303,043 | | | $793,071 | | | $596,255 | | | $6,473,673 | | | $5,520,156 | | | $3,978,822 | |
| Difference in fair values between prior year-end fair values and vest date fair values for awards granted in prior years | | | $7,036,619 | | | $1,270,861 | | | $0 | | | -$2,664,091 | | | -$1,221,449 | | | -$4,977,337 | | | -$2,317,126 | | | $6,113,639 | | | $5,497,011 | | | $2,181,281 | |
| Forfeitures during current year equal to prior year-end fair value | | | $0 | | | -$575,734 | | | $0 | | | -$1,670,404 | | | -$1,034,077 | | | $0 | | | $0 | | | $0 | | | $0 | | | $0 | |
| Dividends or dividend equivalents not otherwise included in the total compensation | | | $0 | | | $0 | | | $0 | | | $0 | | | $0 | | | $0 | | | $0 | | | $0 | | | $0 | | | $0 | |
| Total Adjustments for Equity Awards | | | $35,755,553 | | | $11,522,625 | | | $18,836,074 | | | -$4,398,086 | | | -$3,034,886 | | | -$13,335,693 | | | -$2,124,855 | | | $51,761,809 | | | $37,556,531 | | | $18,578,644 | |
| Compensation Actually Paid (as calculated) | | | $36,942,933 | | | $12,229,373 | | | $20,179,714 | | | -$3,892,017 | | | -$2,381,573 | | | -$12,802,716 | | | -$1,602,130 | | | $52,180,083 | | | $38,184,386 | | | $19,287,475 | |
(3) | The dollar amounts reported in column (d) represent the average of the amounts reported for the Company’s NEOs as a group (excluding our PEOs) in the “Total” column of the Summary Compensation Table Total in each applicable year. The following individuals were our Non-PEO NEOs in the respective years: |
(4) | The dollar amounts reported in column (e) represent the average amount of CAP to the non-PEO NEOs as a group, as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual average amount of compensation earned by or paid to the Non-PEO NEOs as a group during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, adjustments were made to average total reported compensation for the Non-PEO NEOs as a group for each year to determine the CAP, using the methodology described above in Note 2. |
(5) | The peer group is the following published industry index: S&P 500 Information Technology Index. |
(6) | While the Company uses numerous financial and non-financial performance measures for the purpose of evaluating performance for the Company’s compensation programs, the Company has determined that Revenue is the financial performance measure that, in the Company’s assessment, represents the most important performance measure (that is not otherwise required to be disclosed in the table) used by the Company to link compensation actually paid to the Company’s NEOs, for the most recently completed fiscal year, to Company performance. |
• | Non-GAAP Operating Loss(1) |
(1) | Please refer to Appendix A of this Proxy Statement for a reconciliation of non-GAAP financial measures to their corresponding U.S. GAAP measures. |
| 2023 CEO annual total compensation (Todd Nightingale) | | | $10,165,468 | |
| 2023 median employee annual total compensation | | | $245,071 | |
| Ratio of CEO to median employee annual total compensation (Todd Nightingale) | | | 41.5:1 | |
| Named Executive Officer | | | Involuntary Termination of Employment Without Cause ($) | | | Involuntary Termination of Employment or Voluntary Resignation for Good Reason Within 12 Months Following a Change of Control ($) | |
| Todd Nightingale | | | | | | ||
| Severance Payment | | | 1,350,000 | | | 1,800,000 | |
| Equity Acceleration(1) | | | 10,633,186(2) | | | 21,484,725(3) | |
| Company-paid premiums | | | 47,556 | | | 63,408 | |
| Total | | | 12,030,742 | | | 23,348,132 | |
| Artur Bergman | | | | | | ||
| Severance Payment | | | 199,558 | | | 211,078 | |
| Equity Acceleration(1) | | | 1,810,600(2) | | | 6,441,780(3) | |
| Company-paid premiums | | | 48,367 | | | 48,367 | |
| Total | | | 2,058,525 | | | 6,701,224 | |
| Ronald Kisling | | | | | | ||
| Severance Payment | | | 562,500 | | | 750,000 | |
| Equity Acceleration(1) | | | 3,807,829(2) | | | 6,763,288(3) | |
| Company-paid premiums | | | 7,760 | | | 10,346 | |
| Total | | | 4,378,089 | | | 7,523,634 | |
(1) | Represents the market value of the shares underlying the stock options and RSUs as of December 31, 2023, based on the closing price of our Class A common stock, as reported on the NYSE, of $17.80 per share on December 29, 2023, the last trading day in 2023 minus, in the case of stock options, the exercise price of the unvested stock option shares subject to acceleration. |
(2) | Represents 12 months of accelerated vesting of the total number of shares underlying outstanding and unvested time-based equity awards. For equity awards subject to performance conditions, the performance conditions have been deemed satisfied based on actual achievement. |
(3) | Represents 100% accelerated vesting of the total number of shares underlying outstanding and unvested time-based equity awards. For equity awards subject to performance conditions, the performance conditions have been deemed satisfied based on actual achievement. |
| Plan Category | | | Number of securities to be issued upon exercise of outstanding stock options (a) | | | Weighted-average exercise price of outstanding stock options (b)(2) | | | Number of securities remaining available for issuance under equity compensation plans (excluding securities reflected in column (a)) | |
| Equity compensation plans approved by stockholders(1) | | | 11,269,106 | | | $4.6838 | | | 14,565,154(3) | |
| Equity compensation plans not approved by stockholders | | | — | | | — | | | — | |
| Total | | | 11,269,106 | | | $4.6838 | | | 14,565,154 | |
| Plan Category | | | Number of securities to be issued upon exercise of outstanding stock options and restricted stock units (a) | | | Weighted- average exercise price of outstanding stock options (b)(3) | | | Number of securities remaining available for issuance under equity compensation plans (excluding securities reflected in column (a)) | |
| Equity compensation plans approved by stockholders(1) | | | 14,142,133(2) | | | $8.14 | | | 8,938,820(4) | |
| Equity compensation plans not approved by stockholders(5) | | | 37,591 | | | $13.81 | | | — | |
| Total | | | 14,179,724 | | | $6.12 | | | 8,938,820 | |
(1) | The equity compensation plans approved by security holders are described in Note 11 to our financial statements included in our Annual Report. |
(2) | Excludes |
(3) | Excludes 13,420,659 shares issuable upon vesting of outstanding awards of restricted stock units, as such shares have no exercise price. |
The reserve for shares available under |
(5) | In connection with our acquisition of Signal Sciences Corp., we assumed the Signal Sciences Corp. 2014 Stock Option and Grant Plan (the “Signal Sciences Plan”). |
| Name | | | Fees Earned or Paid in Cash | | | Stock Awards(1)(2) | | | Total | |
| Aida Álvarez | | | $21,250 | | | $160,399 | | | $21,250 | |
| Sunil Dhaliwal | | | 20,000 | | | — | | | 20,000 | |
| David Hornik | | | 21,875 | | | — | | | 21,875 | |
| Christopher Paisley | | | 26,875 | | | — | | | 26,875 | |
| Kelly Wright | | | 22,500 | | | — | | | 22,500 | |
| Gil Penchina(3) | | | 3,928 | | | — | | | 3,928 | |
| Name | | | Fees Earned or Paid in Cash | | | Stock Awards(1)(2) | | | Total | |
| Aida Álvarez | | | $45,000 | | | $199,994 | | | $244,994 | |
| Richard Daniels | | | $40,000 | | | $199,994 | | | $239,994 | |
| David Hornik | | | $63,352 | | | $199,994 | | | $263,346 | |
| Paula Loop | | | $43,750 | | | $199,994 | | | $243,744 | |
| Charles Meyers | | | $42,898 | | | $199,994 | | | $242,892 | |
| Christopher Paisley | | | $53,750 | | | $199,994 | | | $253,744 | |
| Vanessa Smith | | | $33,750 | | | $199,994 | | | $233,744 | |
(1) | Amounts shown in this column |
(2) |
| Name | | | Number of Shares Subject to Outstanding Options as of December 31, 2023 | | | Number of Shares Subject to Outstanding RSUs as of December 31, 2023 | |
| Aida Álvarez | | | — | | | 5,540 | |
| Richard Daniels | | | — | | | 5,540 | |
| David Hornik | | | — | | | 5,540 | |
| Paula Loop | | | — | | | 5,540 | |
| Charles Meyers | | | — | | | 5,540 | |
| Christopher Paisley | | | 69,424 | | | 5,540 | |
| Vanessa Smith | | | — | | | 5,540 | |
| Board Committee | | | Chairperson Fee | | | Member Fee | |
| Audit Committee | | | $20,000 | | | $10,000 | |
| Compensation Committee | | | 10,000 | | | 5,000 | |
| Nominating and Corporate Governance Committee | | | 7,500 | | | 3,750 | |
| Board Committee | | | Chairperson Fee | | | Member Fee | |
| Audit Committee | | | $20,000 | | | $10,000 | |
| Compensation Committee | | | $15,000 | | | $7,500 | |
| Nominating and Corporate Governance Committee | | | $7,500 | | | $3,750 | |
| | | Three months ended December 31, | | | Year ended December 31, | | |||||||
| | | 2023 | | | 2022 | | | 2023 | | | 2022 | | |
| Gross Profit | | | | | | | | | | ||||
| GAAP gross Profit | | | $75,774 | | | $62,583 | | | $266,328 | | | $209,781 | |
| Stock-based compensation | | | 3,278 | | | 2,938 | | | 11,656 | | | 12,050 | |
| Amortization of acquired intangible assets | | | 2,475 | | | 2,475 | | | 9,900 | | | 9,900 | |
| Non-GAAP gross profit | | | 81,527 | | | $67,996 | | | $287,884 | | | $231,731 | |
| GAAP gross margin | | | 55.0% | | | 52.4% | | | 52.6% | | | 48.5% | |
| Non-GAAP gross margin | | | 59.2% | | | 57.0% | | | 56.9% | | | 53.6% | |
| | | | | | | | | | | ||||
| Operating loss | | | | | | | | | | ||||
| GAAP operating loss | | | $(42,584) | | | $(48,462) | | | $(198,028) | | | $(246,199) | |
| Stock-based compensation | | | 35,156 | | | 31,418 | | | 134,316 | | | 142,763 | |
| Executive transition costs | | | 385 | | | — | | | 2,791 | | | 4,207 | |
| Amortization of acquired intangible assets | | | 4,775 | | | 5,050 | | | 19,926 | | | 20,791 | |
| Impairment expense | | | — | | | — | | | 4,316 | | | — | |
| Acquisition-related expenses | | | — | | | — | | | — | | | 1,970 | |
| Non-GAAP operating loss | | | $(2,268) | | | $(11,994) | | | $(36,679) | | | $(76,468) | |
| | | | | | | | | | | ||||
| Net loss | | | | | | | | | | ||||
| GAAP net loss | | | $(23,386) | | | $(46,653) | | | $(133,088) | | | $(190,774) | |
| Stock-based compensation | | | 35,156 | | | 31,418 | | | 134,316 | | | 142,763 | |
| Executive transition costs | | | 385 | | | — | | | 2,791 | | | 4,207 | |
| Amortization of acquired intangible assets | | | 4,775 | | | 5,050 | | | 19,926 | | | 20,791 | |
| Acquisition-related expenses | | | — | | | — | | | — | | | 1,970 | |
| Net gain on extinguishment of debt | | | (15,656) | | | — | | | (52,416) | | | (54,391) | |
| Impairment expense | | | — | | | — | | | 4,316 | | | | |
| Amortization of debt discount and issuance costs | | | 456 | | | 716 | | | 2,477 | | | 3,169 | |
| Non-GAAP net income (loss) | | | $1,730 | | | $(9,469) | | | $(21,678) | | | $(72,265) | |
| | | | | | | | | | | ||||
| Non-GAAP net income (loss) per common share—basic and diluted | | | $0.01 | | | $(0.08) | | | $(0.17) | | | $(0.59) | |
| Weighted average basic common shares | | | $131,843 | | | $123,587 | | | $128,770 | | | $121,723 | |
| Weighted average diluted common shares | | | $141,162 | | | $123,587 | | | $128,770 | | | $121,723 | |