UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

SCHEDULE 14A

(Rule 14a-101)

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934 (Amendment No.    )

Filed by the Registrant  ☑                             Filed by a Party other than the Registrant  ☐

Check the appropriate box:

FAIR ISAAC CORPORATION

(Name of Registrant as Specified In Its Charter)

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

Payment of Filing Fee (Check the appropriate box):

FAIR ISAAC CORPORATION

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD FEBRUARY 15, 2017,28, 2018,

AND PROXY STATEMENT

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

Please take notice that the 20172018 Annual Meeting of the Stockholders of Fair Isaac Corporation (“Annual Meeting”) will be held at the time and place and for the purposes indicated below.

181 Metro Drive, Suite 600

San Jose, California 95110

Executive Vice President, General Counsel and Secretary

January 11, 201726, 2018

Table of Contents

PROXY SUMMARY

This summary highlights information contained elsewhere in this proxy statement. This summary does not contain all of the information that you should consider, and you are advised to read the entire proxy statement carefully before voting.

20172018 Annual Meeting of Stockholders

Voting Methods

Voting Matters

Stockholders are being asked to vote on the following matters at the 20172018 Annual Meeting of Stockholders. Please see the corresponding page numbers for additional information regarding each proposal.

Our Director Nominees

Name		Age				Years as Director		Principal Occupation		Independent		Committee Memberships												Other Current Public Boards		Age				Years as Director		Principal Occupation		Independent		Committee Memberships						Other Current Public Boards
												AC(1)				GNEC(2)				LDCC(3)																AC(1)		GNEC(2)		LDCC(3)
Braden R. Kelly			46			4		Partner of Health Evolution Partners		Yes														—			47			5		Partner of Health Evolution Partners		Yes								—
A. George Battle			73			20		Former Chief Executive Officer and Chairman of Ask Jeeves, Incorporated		Yes														3			74			21		Former Chief Executive Officer and Chairman of Ask Jeeves, Incorporated		Yes								3
Mark W. Begor			58			<1		Managing Partner at Warburg Pincus		Yes														—			59			1		Managing Director and Partner at Warburg Pincus		Yes								—
James D. Kirsner																											74			11		Former Chief Financial Officer and head of Barra Ventures at Barra, Inc.		Yes								—
Greg R. Gianforte			55			4		Managing Director of Bozeman Technology Incubator		Yes														—
James D. Kirsner			73			10		Former Chief Financial Officer and head of Barra Ventures at Barra, Inc.		Yes														—
William J. Lansing			58			11		Chief Executive Officer of Fair Isaac Corporation		No														—			59			12		Chief Executive Officer of Fair Isaac Corporation		No								1
Marc F. McMorris			48			1		Managing Director andCo-Founder of Carrick Capital Partners, LLC		Yes														—			49			2		Managing Director andCo-Founder of Carrick Capital Partners, LLC		Yes								—
Joanna Rees			55			2		Managing Partner at West		Yes														1			56			3		Managing Partner at West		Yes								1
David A. Rey			66			6		Former Executive Vice President and Chief Client Relationship Officer of UnitedHealth Group		Yes														—			67			7		Former Executive Vice President and Chief Client Relationship Officer of UnitedHealth Group		Yes								—

  = Member          = Chair

Our Corporate Governance Facts

Our Compensation Facts

As administered by our Leadership Development and Compensation Committee (the “Committee”), our compensation program seeks to closely link the financial interests of our Company’s executives with those of our stockholders. In making compensation decisions at the outset of fiscal 20162017 and throughout the year, the Committee sought to reinforce the linkage between Company performance and executive compensation. In keeping with this objective, base salaries forare adjusted infrequently, with three named executive officers receiving salary adjustments in fiscal 20162017 while salaries for the remaining two named executive officers remained flat, with aflat. The Company continued its emphasis on long-term incentives and performance-based cash incentives and equity.

The Committee uses the following guidelines in our compensation program to help achieve this overarching goal.

20162017 Elements of Compensation

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Except as otherwise indicated, the following table and accompanying footnotes show information regarding the beneficial ownership of our common stock as of the record dateDecember 1, 2017 by:

As of the dates indicated in footnotes (3), (4), (5) and (4)(6) below, publicly available information indicated that certain stockholders were beneficial owners of more than 5% of the outstanding shares of our common stock. The information in the table below is as reported in their filings with the Securities and Exchange Commission (“SEC”). The percentages noted in the table are as provided by such beneficial owners as of the date of their filing and not as of November 30, 2016.December 1, 2017. Based on a review of such SEC filings, we are not aware of any other beneficial owner of more than five percent of our common stock.

Shares of common stock underlying options that are currently exercisable or exercisable within 60 days are considered outstanding and beneficially owned by the person holding the options for the purposes of computing the percentage ownership of that person, but are not treated as outstanding for the purpose of computing the percentage ownership of any other person. As of November 30, 2016, 30,928,439December 1, 2017, 30,009,474 shares of common stock were outstanding.

units pursuant to the preceding sentence are not deemed issued and outstanding for purposes of the percentage calculation with respect to any other stockholder.

Section 16(a) Beneficial Ownership Reporting Compliance

Directors and persons who are considered “officers” of the Company for purposes of Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and greater than 10% stockholders are required to file reports with the SEC showing their holdings of and transactions in the Company’s securities. Our employees generally prepare these reports on the basis of information obtained from each director and officer. Based on the information available to us, we believe that all reports required by Section 16(a) of the Exchange Act to be filed by the Company’s directors, executive officers, and greater than 10% owners during the last fiscal year were filed on time.

PROPOSAL 1: ELECTION OF DIRECTORS

Annual Elections

Directors are elected each year at our Annual Meeting of Stockholders to hold office until our next annual meeting or until a qualified replacement is duly elected. Our Bylaws specify that the Board of Directors will establish by vote how many directors will serve on the Board. The Board of Directors has currently set the number of directors at nine.eight.

Majority Voting Standard

To be elected, the number of votes cast “FOR” a director nominee must exceed the number of votes cast “AGAINST” that nominee. The Company requires that all nominees submit an irrevocable letter of resignation as a condition to being named as a nominee, which resignation will be effective if (i) the nominee fails to receive a sufficient number of votes to be elected and (ii) the Board accepts such resignation. Cumulative voting for the election of directors is not permitted.

Director Nominee Selection Process

Our Governance, Nominating and Executive Committee selects nominees on the basis of recognized achievements and their ability to bring various skills and experience to the deliberations of the Board, as described in more detail in the Corporate Governance Guidelines available on the “Investors” page of our website at www.fico.com. The Governance, Nominating and Executive Committee also strongly values diversity and seeks opportunities to promote diversity within the Company’s leadership. This viewpoint is reflected in our Corporate Governance Guidelines and our Governance, Nominating and Executive Committee Charter, both of which include diversity as a consideration, and the Governance, Nominating and Executive Committee takes this into account when assessing our incumbents and candidates.

All of the current nominees to the Board were recommended as nominees by the Governance, Nominating and Executive Committee, and the full Board voted unanimously to designate them as nominees for election at the Annual Meeting. All of the nominees are presently serving on our Board and all have been previously elected by our stockholders except for Mr. Begor.stockholders.

Stockholder-Recommended Director Candidates

Our Governance, Nominating and Executive Committee considers director candidates recommended by stockholders who are entitled to vote for the election of directors at the Annual Meeting and comply with the notice procedures described below. A stockholder who wishes to nominate a candidate must send a written notice to the FICO Corporate Secretary. Each notice must include the following information about the nominee:

Each notice must also include the following information about the nominating stockholder and any beneficial owner on whose behalf the nomination is made:

We may require any proposed nominee to furnish such other information as may reasonably be required by us to determine the eligibility of the proposed nominee to serve as a director.

Our Corporate Secretary must receive this information not less than 90 days nor more than 120 days prior to the anniversary date of the immediately preceding Annual Meeting. In the case of an Annual Meeting which is held more than 25 days before or after such anniversary date, in order for notice by the stockholder to be considered timely, it must be received no later than the close of business on the 10th day following the date of the first public announcement of the date of the Annual Meeting.

Director NomineesNominee Biographies

Set forth below is biographical information for each director nominee, as well as information regarding the particular experience, qualifications, attributes or skills of the nominees that led the Governance, Nominating and Executive Committee to conclude that they should serve as members of the Board. Each of these nominees is currently serving as a member of the Board.

Our Board of Directors has determined that Messrs. Kelly, Battle, Begor, Gianforte, Kelly, Kirsner, McMorris and Rey and Ms. Rees meet its independence standards, which are set forth in the Corporate Governance Guidelines on the “Investors” page of our website at www.fico.com. The Board defines an independent director as one who has no material relationship with the Company and its subsidiaries either directly or as a partner, stockholder or officer of an organization that has a relationship with the Company. In addition, independent directors must meet the requirements to be considered independent directors as defined under the current rules of the New York Stock Exchange (“NYSE”). Mr. Lansing is not independent, as he is employed by us as our CEO.

Each of the nominees has consented to being named in the proxy statement and to serve if elected. If any nominee becomes unavailable to serve, however, the persons named in the enclosed form of proxy intend to vote the shares represented by the proxy for the election of such other person or persons as may be nominated or designated by the Board of Directors, unless either they are directed by the proxy to do otherwise or the Board of Directors instead reduces the number of directors.

Braden R. Kelly.    Director since 2013 and Chairman of the Board of Directors since February 2016; Chair of the Governance, Nominating and Executive Committee; Member of the Leadership Development and Compensation Committee; Age 46.47.

Mr. Kelly has been a Partner at Health Evolution Partners, a private equity investment firm focused on the health care industry, since January 2015 and has served in various positions at Health Evolution Partners, including Investment Partner from June 2013 to December 2014 and Senior Advisor from August 2008 to May 2013. From August 1995 to December 2006, Mr. Kelly was an employee and then Partner and Manag-

ingManaging Director at General Atlantic Partners LLC, a global private equity investment firm focused on technology growth investing. Prior to joining General Atlantic Partners, Mr. Kelly worked in the investment banking division of Morgan Stanley & Co. as a member of the mergers, acquisitions and restructuring department. Mr. Kelly does not serve on any other public board nor has he served on any other public boards in the past five years. Mr. Kelly earned an undergraduate degree from the University of Notre Dame.

Mr. Kelly has a deep financial background and contributes a critical business and corporate development perspective to the Board of Directors through his extensive experience with strategic mergers and acquisitions, a key growth opportunity for the Company. Mr. Kelly’s extensive analysis of the technology and health care industries through his work as a private equity investor provides him with valuable insight into the business environments in which our Company and the companies in some of our key markets operate. The Board also benefits from Mr. Kelly’s significant experience as a strategic advisor to companies and his global experience working with growth companies in the United States, Europe and India.

A. George Battle.    Director since 1996; Chair of the Leadership Development and Compensation Committee; Member of the Governance, Nominating and Executive Committee; Age 73.74.

From January 2004 to August 2005, Mr. Battle served as Executive Chairman at Ask Jeeves, Inc., a provider of information search and retrieval services. From December 2000 until January 2004, Mr. Battle served as Chief Executive Officer at Ask Jeeves. From 1968 until his retirement in 1995, Mr. Battle was an employee and then partner at Arthur Andersen LLP and Andersen Consulting (now known as Accenture Ltd.), global accounting and consulting firms. Mr. Battle’s last position at Andersen Consulting was Managing Partner, Market Development, responsible for Andersen Consulting’s worldwide industry activities, its Change Management and Strategic Services offerings, and worldwide marketing and advertising. Mr. Battle is a director at the following public companies in addition to FICO: Netflix, Inc., Expedia, Inc., and Workday, Inc. Within the last five years, Mr. Battle served on the boards of Opentable, Inc. and LinkedIn Corporation, both public companies, and also served as a director of the Masters Select family of funds. Mr. Battle received an undergraduate degree from Dartmouth College and an M.B.A. from the Stanford University Business School.

Mr. Battle brings strong leadership, seasoned business acumen, and a long career of diverse experience to the Board of Directors. He is our longest serving director, has in the past sat on all of our standing Board committees, and has extensive historical knowledge about the Company’s business units, technologies, and culture. We value his more than 25 years as a business consultant with a national consulting firm and his prior experience as a chief executive officer. He also serves on a number of other public and private company boards, which provides us with important perspectives on corporate governance and other matters, as well as best practices enacted at other companies.

Mark W. Begor.    Director since March 2016; Member of the Leadership Development and Compensation Committee; Age 58.59.

Since June 2016, Mr. Begor has been a Managing Director and Partner at Warburg Pincus, a global private equity investment firm focused on industrial, business and financial services, health care, energy, technology and media growth investing. Prior to that, Mr. Begor spent 35 years at General Electric, a global industrial and financial services company, in a variety of operating and financial roles and as a Senior Vice President. From 2014 to 2015, he led GE’s Energy Management business. He also was GE’s Commercial Real Estate CEO from 2011 to 2014; GE’s Restructuring Operations CEO from 2008 to 2013; and led GE’s Retail Finance business from 2002 to 2011. Prior to that, Mr. Begor held a variety of senior operating and financial roles in GE including CFO and business development leader for NBC, Investor Relations leader for GE, GE Plastics Sourcing and Petrochemicals leader, and CFO and business development leader for GE Plastics Asia. He was also a member of GE’s Corporate Audit Staff and Financial Management Program. Mr. Begor does not serve on any other public boards and has not served on another public board in the last five years. He holds an undergraduate degree from Syracuse University and an M.B.A. from Rensselaer Polytechnic Institute.

Mr. Begor’s extensive operational and financial expertise from his 35 years at GE coupled with his broad industrial and financial services leadership experience, global operations, investor relations, and mergers

and acquisitions skills provides a strong compliment to the Board of Directors. His expertise in the consumer finance market from leading GE’s retail credit card business is a unique asset to our Board.

Greg R. Gianforte.    Director since 2013; Member of the Audit Committee; Age 55.

Since January 2012, Mr. Gianforte has served as Managing Director of Bozeman Technology Incubator, an organization dedicated to mentoring entrepreneurs in the technology industry. Mr. Gianforte founded RightNow Technologies, Inc., a cloud-based customer service and support solutions company, in 1997 and was the Chairman and Chief Executive Officer of RightNow Technologies until it was acquired by Oracle Corporation in January 2012. RightNow Technologies was Mr. Gianforte’s fifth softwarestart-up business. He began his career at AT&T Bell Laboratories. Within the last five years, Mr. Gianforte served on the board of the following public company: RightNow Technologies, Inc. Mr. Gianforte holds an undergraduate and master’s degree from Stevens Institute of Technology.

Mr. Gianforte brings to the Board of Directors more than 25 years of experience as an innovator in the software industry, with a particular focus on cloud-based solutions and the customer experience. He also contributes the operations, leadership, financial and strategic skills he acquired as the Chief Executive Officer of a public company in our industry. Mr. Gianforte’s financial background also qualifies him as an “audit committee financial expert” as defined under SEC guidelines, and as such, he serves on the Company’s Audit Committee.

James D. Kirsner.    Director since 2007; Chair of the Audit Committee; Member of the Governance, Nominating and Executive Committee; Age 73.74.

In 2001, Mr. Kirsner served as a consultant and interim Chief Operating Officer at Tukman Capital Management, an equity management firm. From 1993 until 2001, Mr. Kirsner was the Chief Financial Officer and head of Barra Ventures at Barra, Inc., an investment risk management services company. From 1967 until 1993, Mr. Kirsner was an audit professional with Arthur Andersen LLP, an international accounting and consulting firm. Mr. Kirsner was a partner in the firm from 1977 until his retirement in 1993. Within the last five years, Mr. Kirsner served on the board of the following public company: Advent Software, Inc. Mr. Kirsner received his undergraduate and master’s degrees from Wharton School of Business at the University of Pennsylvania.

Mr. Kirsner brings extensive financial and accounting expertise to the Board of Directors. He serves as Chair of the Company’s Audit Committee and is qualified as an “audit committee financial expert” as defined under SEC guidelines. His significant public accounting, public company CFO, investment, and audit committee experience provide Mr. Kirsner with the financial acumen and leadership skills necessary to serve as Chair of our Audit Committee. He has also served on the board of another publicly traded company in the software industry, which provides us with additional valuable perspectives on our industry and on issues affecting similarly situated publicly traded companies.

William J. Lansing.    Director since 2006; Age 58.59.

Since January 2012, Mr. Lansing has served as the Company’s Chief Executive Officer. From February 2009 to November 2010, Mr. Lansing served as Chief Executive Officer and President at Infospace, Inc. From 2004 until 2007, Mr. Lansing served as Chief Executive Officer and President at ValueVision Media, Inc. (now EVINE Live Inc.). From 2001 to 2003, he served as a General Partner at General Atlantic LLC, a global private equity firm. From 2000 to 2001, he was Chief Executive Officer at NBC Internet, Inc., an integrated Internet media company. From 1998 to 2000, he served as President, then as Chief Executive Officer at Fingerhut Companies, Inc., a direct marketing company. From 1996 to 1998, he was Vice President, Corporate Business Development at General Electric Company. In 1996, he was Chief Operating Officer/Executive Vice President at Prodigy, Inc. From 1986 through 1995, Mr. Lansing worked with McKinsey & Company, Inc. Within the past five years,In addition to serving on our Board, Mr. Lansing served onserves as chairman of the board of the following public company: RightNow Technologies,for Shutterfly, Inc. He holds an undergraduate degree from Wesleyan University and a J.D. from Georgetown University.

Mr. Lansing is the only member of management who serves on our Board of Directors. As our Chief Executive Officer, Mr. Lansing has extensive, first-hand knowledge of our corporate strategy, business units, operations, and employees, as well as the opportunities, risks, and challenges faced by our Company. Mr. Lansing brings to his roles as an executive officer and director an extensive background in management through his past chief executive officer and other senior management positions held at various companies. His experience in the technology industry, particularly in the areas of the Internet ande-commerce, provides significant value across several of our business units.

Marc F. McMorris.    Director since 2015; Member of the Audit Committee; Age 48.49.

Mr. McMorris has been Managing Director at Carrick Capital Partners, a private equity investment firm that heco-founded, since January 2012. From September 1999 to December 2011, Mr. McMorris served in various leadership positions at General Atlantic, LLC, a global private equity investment firm focused on technology growth investing, including Managing Director from 2003 to December 2011. Within the last five years, Mr. McMorris served on the board of the following public company: ServiceSource International, Inc. Mr. McMorris earned an undergraduate degree from the University of Pennsylvania and an M.B.A. from Wharton School of Business at the University of Pennsylvania.

Mr. McMorris’s extensive experience in evaluating companies in the financial services and technology industries, together with his mergers and acquisitions experience, provides a strong complement to our Board. He currently provides guidance to technology companies in several different areas, including software as a service (“SaaS”), an area of strong focus for the Company moving forward. He is also qualified as an “audit committee financial expert” as defined under SEC guidelines.

Joanna Rees.    Director since 2015; Member of the Leadership Development and Compensation Committee; Age 55.56.

Since June 2016, Ms. Rees has been a Managing Partner at West, a market creation company founded by the former head of marketing at Apple Inc., where she leads West’s investment activities. From 2012 to June 2016, Ms. Rees was a Managing Director of Soda Rock Partners, an investment and consulting firm, where she served as an investor, board member and senior advisor to several private high-growth companies. In 1996, Ms. Rees founded VSP Capital, a San Francisco-based venture capital firm, where she served as Managing Partner until 2011. During her tenure with VSP Capital, Ms. Rees served on the board of more than 25 private, venture-backed companies across a broad range of industries. From 1995 to 1996, Ms. Rees worked at Vrolyk & Company, a boutique merchant bank, and from 1993 to 1995, Ms. Rees worked at BA Securities, an investment banking subsidiary of Bank of America. Ms. Rees spent her early career in advertising and brand management. From 1984 to 1989, she held several senior marketing management positions with Groupe Danone, a $20+ billion global consumer products firm, with her last position as head of new product development. Ms. Rees began her career at Benton & BowelsBowles (now DMB&B), an advertising agency, working on multiple consumer brands. Ms. Rees was theco-creator of the Build Brand Value CEO forum, which she ran from 1997 to 2003 as part of VSP Capital. Ms. Rees is a director of Care.com, Inc., a public company. Within the last five years, Ms. Rees also served on the board of the following public company: Leapfrog Enterprises. Ms. Rees earned her M.B.A. from Columbia University and a B.S. from Duke University.

Ms. Rees’s leadership and experience in investing in, advising and building leading growth companies are valuable to the Company as it seeks to continue to grow its business and broaden its portfolio with innovative new product categories. Ms. Rees has deep connections across a wide range of industries, including the technology and education industries, and access to thought leaders worldwide.

David A. Rey.    Director since 2011; Member of the Audit Committee; Age 66.67.

From December 2008 to May 2011, Mr. Rey served as Executive Vice President and Chief Client Relationship Officer of UnitedHealth Group. From 1972 until 2008, Mr. Rey was an employee and then partner at Accenture Ltd. (previously Andersen Consulting and Arthur Andersen LLP), a global consulting firm. Mr. Rey served as both the Global Managing Partner of the healthcare industry practice and, as a

Senior Managing Partner, led Accenture’s large client relationship development program. Mr. Rey does not serve on any other public board nor has he served on any other public boards in the past five years. Mr. Rey holds an undergraduate degree from the University of California.

Mr. Rey brings financial reporting and accounting expertise to the Board of Directors, as well as global, cross-industry experience in developing and sustaining the kind of large client relationships that increasingly drive our Company’s business growth. Mr. Rey’s strong financial background qualifies him as an “audit committee financial expert” as defined under SEC guidelines, and as such, he serves on the Company’s Audit Committee. He has particular expertise with respect to analytic and other needs of the health care industry, which represents a key market opportunity for our Company.

Recommendation of the Board of Directors

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE ELECTION OF EACH OF THE NOMINEES LISTED ABOVE.

PROPOSAL 2: APPROVAL OF THE AMENDMENT TO THE 2012 LONG-TERM INCENTIVE PLAN

Background

On November 30, 2011, our Board of Directors adopted the Fair Isaac Corporation 2012 Long-Term Incentive Plan (as amended, the “2012 LTIP”), subject to stockholder approval. Our stockholders approved the 2012 LTIP at the annual meeting held on February 7, 2012. As adopted, the 2012 LTIP authorized the issuance of up to 6,000,000 shares of our common stock pursuant to awards granted thereunder. On December 17, 2013, and January 7, 2016, and December 8, 2016, our Board of Directors adopted amendments to increase the number of shares of our common stock authorized for issuance under the 2012 LTIP by an additional 4,100,000, 2,500,000 and 2,500,0002,000,000 shares, respectively, which our stockholders approved at the annual meetings held on February 11, 2014, and February 24, 2016, and February 15, 2017, respectively. Consequently, the 2012 LTIP currently authorizes the issuance of up to 12,600,00014,600,000 shares of our common stock pursuant to awards granted thereunder. Neither unused shares from predecessor equity plans nor any shares subject to awards made under predecessor equity awards that are forfeited or otherwise do not result in the issuance of shares are available for grants under the 2012 LTIP.

As of December 19, 2016,January 2, 2018, there were 2,352,0142,841,322 shares of our common stock remaining available for awards under the 2012 LTIP, which is the only plan under which equity awards can currently be made to our employees andnon-employee directors. Because of the importance we attach to providing competitive levels of equity-based compensation to our employees, the Leadership Development and Compensation Committee (the “Committee”) believes it prudent to adoptcontinue an annual cadence of requesting stockholder approval to increase the number of shares authorized under the plan. This approach also provides shareholdersstockholders with a more frequent opportunity to evaluate plan funding requests in the context of company performance and improves the efficacy of plan resources to support the dynamic needs of the business.

As a result, the Committee recommended, and on December 8, 20162017 our Board of Directors adopted, subject to stockholder approval, an amendment to increase the aggregate number of shares of our common stock authorized for issuance under the 2012 LTIP by an additional 2,000,0001,500,000 shares, to an aggregate of 14,600,00016,100,000 shares (the “Amendment”). The Amendment does not modify the 2012 LTIP in any other respect.

Stockholder approval of the Amendment is being sought in order to (i) satisfy the stockholder approval requirements of the New York Stock Exchange, (ii) obtain stockholderre-approval of the material terms of awards under the 2012 LTIP that are intended to qualify as performance-based compensation under Section 162(m) of the Internal Revenue Code (the “Code”), including the business criteria on which performance goals may be based and the maximum awards that may be made to any individual, and (iii)(ii) obtain stockholder approval of the increased number of shares that may be subject to incentive stock options under Section 422 of the Internal Revenue Code Section 422.(as amended, the “Code”).

Determination of Share Increase

The following table summarizes information regarding equity awards outstanding and available for future grant as of December 19, 2016January 2, 2018 after taking into account the annual equity awards granted and vested on December 8, 20162017 and equity awards vested on December 13, 2016:2017:

Outstanding Equity & Shares Available

(as of 12/19/16)01/02/18)

(2)	The 2012 LTIP is currently the only plan with shares available for grant to employees andnon-employee directors at FICO.

In making its recommendation to the Board of Directors to increase the 2012 LTIP’s share reserve by 2,000,0001,500,000 shares through the Amendment, the Committee considered the factors discussed below.

Importance of Long-Term Equity Incentives.    Long-term equity incentives play a critical role in our executive compensation program, motivating executives to make decisions that focus on creating long-term value for our stockholders, aligning executives’ interests with the interests of stockholders and serving as an effective employment inducement and retention device. The Committee considers our ability to continue to provide a competitive level of long-term equity incentives to be critical to our success.

Historical Burn Rate.    The Company is committed to managing its use of equity incentives prudently to balance the benefits equity compensation brings to our compensation program with the dilution it causes our stockholders. As part of its analysis when considering adoption of the Amendment, the Committee considered our “burn rate,” or the number of shares subject to equity awards granted in each of the past three fiscal years expressed as a percentage of the weighted average number of shares outstanding for each of those fiscal years.

The Committee noted that our three-year average burn rate percentage is below the suggested burn-rate benchmark published by Institutional Shareholder Services Inc., a leading proxy advisory service (“ISS”), for our industry classification. The Committee believes that our equity grant practices during those years have been in the Company’s and our stockholders’ best interests, noting in particular that our active sharestock repurchase program has elevated our burn rate percentage over the past several years. Over the course of fiscal 20152016 and 2016,2017, we have repurchased approximately 3.02.8 million shares of our common stock from the market (not counting shares delivered by employees in satisfaction of tax withholding obligations). Importantly, these sharestock repurchases have returned value to our stockholders and have mitigated the dilutive effect of our equity grants. However, the repurchases have increased our burn rate percentage by shrinking the number of shares outstanding (the denominator in the burn rate calculation) by approximately 9%8%. The Committee believes that the sharestock repurchase activity has been beneficial to our Company and its stockholders and that the benefits outweigh the inflation of our burn rate numbers.

ShareholderStockholder Value Transfer Test.    When deciding on an appropriate number of shares to add to the 2012 LTIP’s share reserve, the Committee engaged Compensia, Inc. to estimate the shareholderstockholder value transfer of the request. Compensia evaluated the value of available shares and plan awards as a percentage of the Company’s market capitalization and determined that the addition of 2,000,0001,500,000 shares to the 2012 LTIP share reserve was reasonable.

Expected Duration.    The Committee expects that the shares available for future awards, including the additional shares if the Amendment is approved, will be sufficient for currently anticipated awards under the 2012 LTIP at least through the next annual meeting of stockholders. Expectations regarding future share usage under the 2012 LTIP are based on a number of assumptions such as future growth in the population of eligible participants, including the need to make sizable inducement grants for hires made in the executive ranks and the consequences of acquiring other companies; the rate of future compensation increases; the rate at which shares are returned to the 2012 LTIP reserve upon awards’ expiration, forfeiture or cash settlement; the level at which performance-based awards pay out; and the future performance of our stock price. While the Committee believes that the assumptions it used are reasonable, future share usage will differ from current expectations to the extent that actual events differ from the assumptions utilized.

Description of the 2012 LTIP as Proposed to Be Amended

The major features of the 2012 LTIP as recently amended and as proposed to be amended are summarized below, and references to the “2012 LTIP” in the following discussion assume that the Amendment has been approved by our stockholders and becomes effective. The summary is qualified in its entirety by reference to the full text of the 2012 LTIP, a copy of which is filed herewith asExhibit A. A stockholder may also obtain a copy of the 2012 LTIP from the Company upon request.

Compensation Best Practices

The 2012 LTIP incorporates a range of compensation best practices, including the following key features:

Eligible Participants

All employees, consultants and advisors of our Company or any subsidiary, as well as allnon-employee directors of the Company, will be eligible to receive awards under the 2012 LTIP. As of December 8, 2016,2017, there were approximately 3,1703,360 persons employed by our Company and its subsidiaries, approximately 340 persons providing service to our Company and its subsidiaries as contractors, and eightsevennon-employee members of our Board of Directors, all of whom would be eligible to receive awards under the 2012 LTIP.

Administration

The 2012 LTIP is administered by the Committee. To the extent consistent with applicable law or stock exchange rules, the Committee may delegate its duties, power and authority under the 2012 LTIP to any of its

members, to officers of the Company with respect to awards to participants who are not directors or executive officers of the Company or, in connection withnon-discretionary administrative duties, to one or more agents or advisors.

The Committee has the authority to determine the persons to whom awards will be granted; the timing and size of any cash incentive award; the timing, type and number of shares covered by each equity award; and the terms and conditions of the awards. The Committee may also establish and modify rules to administer the 2012 LTIP, interpret the 2012 LTIP and any related award agreement, cancel or suspend an award or the exercisability of an award, or modify the terms of outstanding awards to the extent permitted under the 2012 LTIP. Unless an amendment to the terms of an award is necessary to comply with applicable laws or stock exchange rules, a participant who would be adversely affected by such an amendment must consent to it.

Except in connection with equity restructurings and other situations in which share adjustments are specifically authorized, the 2012 LTIP also prohibits the Committee from repricing any outstanding “underwater” option or SAR without prior approval of the Company’s stockholders. For these purposes, “repricing” includes amending the terms of an underwater option or SAR to lower the exercise price, canceling an underwater option or SAR and granting in exchange replacement options or SARs having a lower exercise price or other forms of awards, or repurchasing the underwater option or SAR.

Subject to certain limits in the 2012 LTIP, the Committee may also establish subplans or modify the terms of awards under the 2012 LTIP with respect to participants residing outside of the United States or employed by anon-U.S. subsidiary in order to comply with local legal requirements or meet the objectives of the 2012 LTIP.

Available Shares and Limitations on Awards

A maximum of 14,600,00016,100,000 shares of common stock are available for issuance under the 2012 LTIP, any or all of which may be the subject of incentive stock option awards. The shares of common stock to be issued under the 2012 LTIP are either authorized but unissued shares or treasury shares. Under the terms of the 2012 LTIP, the number of shares of common stock subject to options or SARs granted to any one participant during a calendar year may not exceed 1,000,000, and the number of shares subject to performance-based awards other than options or SARs granted to any one participant during any calendar year may not exceed 1,000,000. Further, the aggregate grant date fair value of awards granted during any calendar year to anynon-employee member of our Board of Directors (excluding awards granted at the election of suchnon-employee member in lieu of all or any portion of retainers and fees otherwise payable in cash) may not exceed $800,000. These share limitations are subject to adjustment for changes in the corporate structure or shares of the Company, as described below. Payouts of performance-based awards denominated in cash may not exceed $6,000,000 to any one participant during any calendar year.

Shares of common stock that are issued under the 2012 LTIP or that are potentially issuable pursuant to outstanding awards will reduce the maximum number of shares remaining available for issuance under the 2012 LTIP by one share for each share issued or issuable pursuant to an option or SAR award, and by 2.17 shares for each share issued or issuable pursuant to an award other than an option or SAR.

Any shares of common stock subject to an award under the 2012 LTIP that expires, is forfeited, is settled or paid in cash or otherwise does not result in the issuance of all or a portion of such shares will, to the extent of such expiration, forfeiture, settlement ornon-issuance, automatically again become available for issuance under the 2012 LTIP. Each share that again becomes available for issuance will be added back as (i) one share if the share was subject to an option or SAR granted under the 2012 LTIP, or (ii) as 2.17 shares if the share was subject to an award other than an option or SAR granted under the 2012 LTIP. However, any shares tendered or withheld to pay the exercise price or satisfy a tax withholding obligation in connection with any award, any shares repurchased by the Company using option exercise proceeds and any shares subject to a SAR that are not issued in connection with the stock settlement of the SAR on its exercise may not be used again for new grants.

Awards granted under the 2012 LTIP upon the assumption of, or in substitution for, outstanding equity awards previously granted by an entity acquired by our Company or any of its subsidiaries (referred to as “substitute awards”) will not reduce the number of shares of common stock authorized for issuance under the

2012 LTIP. Additionally, if a company acquired by our Company or any of its subsidiaries has shares available under apre-existing plan approved by stockholders and not adopted in contemplation of such acquisition, the shares available for grant pursuant to the terms of thatpre-existing plan may be used for awards under the 2012 LTIP and will not reduce the shares authorized for issuance under the 2012 LTIP, but only if the awards are made to individuals who were not employed by or providing services to our Company or any of its subsidiaries immediately prior to such acquisition.

Share Adjustment Provisions

If certain transactions with the Company’s stockholders occur that cause the per share value of the common stock to change, such as stock splits, spin-offs, stock dividends or certain recapitalizations (referred to as “equity restructurings”), the Committee will equitably adjust (i) the class of shares issuable and the maximum number and kind of shares subject to the 2012 LTIP, (ii) outstanding awards as to the class, number of shares and price per share, and (iii) award limitations prescribed by the 2012 LTIP. Other types of transactions may also affect the common stock, such as reorganizations, mergers or consolidations. If there is such a transaction and the Committee determines that adjustments of the type previously described in connection with equity restructurings would be appropriate to prevent any dilution or enlargement of benefits under the 2012 LTIP, the Committee will make such adjustments as it may deem equitable.

Types of Awards

The 2012 LTIP allows the Company to award eligible recipients stock options, SARs, restricted stock awards, stock unit awards, other stock-based awards and cash incentive awards. These types of awards are described in more detail below.

Options.    Employees of our Company or any subsidiary may be awarded options to purchase common stock that qualify as “incentive stock options” within the meaning of Section 422 of the Internal Revenue Code (the “Code”), and any eligible recipient may be awarded options to purchase common stock that do not qualify as incentive stock options, referred to as“non-statutory options.” The exercise price to be paid by a participant at the time an option is exercised may not be less than 100% of the fair market value of one share of common stock on the date of grant, unless the option is granted as a substitute award as described earlier. “Fair market value” under the 2012 LTIP as of any date means the closing sale price for a share of common stock on the New York Stock Exchange on that date. On December 8, 2016,2017, the closing sale price of a share of common stock on the New York Stock Exchange was $121.48.$157.31.

The total purchase price of the shares to be purchased upon exercise of an option will be paid by the participant in cash unless the Committee allows exercise payments to be made, in whole or in part, (i) by means of a broker-assisted sale and remittance program, (ii) by delivery to the Company (or attestation as to ownership) of shares of common stock already owned by the participant, or (iii) by a “net exercise” of the option in which a portion of the shares otherwise issuable upon exercise of the option are withheld by the Company. Any shares delivered or withheld in payment of an exercise price will be valued at their fair market value on the exercise date.

An option will vest and become exercisable at such time, in such installments and subject to such conditions as may be determined by the Committee, and no option may have a term greater than 10 years from its date of grant.

The aggregate fair market value of shares of common stock with respect to which incentive stock options granted to any participant may first become exercisable during any calendar year may not exceed $100,000. Any incentive stock options that become exercisable in excess of this amount will be treated asnon-statutory options.

Stock Appreciation Rights.    A SAR is the right to receive a payment from the Company, in the form of shares of common stock, cash or a combination of both, equal to the difference between (i) the fair market value of a specified number of shares of common stock on the date of exercise of the SAR, and (ii) the aggregate exercise price under the SAR of that number of shares. SARs will be subject to such terms and conditions, con-

sistentconsistent with the other provisions of the 2012 LTIP, as may be determined by the Committee. The Committee will have the sole discretion to determine the form in which payment of SARs will be made to a participant.

The exercise price per share of a SAR will be determined by the Committee, but may not be less than 100% of the fair market value of one share of common stock on the date of grant, unless the SAR is granted as a substitute award as described earlier. A SAR will vest and become exercisable at such time, in such installments and subject to such conditions as may be determined by the Committee, and no SAR may have a term greater than 10 years from its date of grant.

Restricted Stock Awards.    A restricted stock award is an award of common stock that vests at such times and in such installments as may be determined by the Committee. Until it vests, the shares subject to the award are subject to restrictions on transferability and the possibility of forfeiture. The Committee may impose such restrictions or conditions to the vesting of restricted stock awards as it deems appropriate, including that the participant remain continuously employed by, or in the service of, the Company or a subsidiary for a certain period or that the participant or the Company (or any subsidiary or business unit of the Company) satisfy specified performance criteria. Unless otherwise specified by the Committee, a participant who receives a restricted stock award will have all of the rights of a stockholder, including the right to vote the shares of restricted stock.

Stock Unit Awards.    A stock unit award is a right to receive the fair market value of one or more shares of common stock, payable in cash, shares of common stock, or a combination of both, that vests at such times and in such installments as may be determined by the Committee. Until it vests, a stock unit award is subject to restrictions on transferability and the possibility of forfeiture. Stock unit awards will be subject to such terms and conditions, consistent with the other provisions of the 2012 LTIP, as may be determined by the Committee.

Other Stock-Based Awards.    The Committee may grant awards of common stock and other awards that are valued by reference to and/or payable in common stock under the 2012 LTIP. The Committee has complete discretion in determining the terms and conditions of such awards.

Cash Incentive Awards.    The Committee may grant performance-based awards that are settled in cash or other forms of awards under the 2012 LTIP or a combination thereof. The Committee has complete discretion in determining the amount, terms and conditions of such awards.

Expiration and Vesting

Each award agreement will set forth the date of expiration of each award, which may not be more than 10 years from the grant date.

Awards that vest based solely on service-based vesting conditions will be subject to a vesting period of not less than one year from the grant date and awards with vesting subject to satisfaction of performance goals over a performance period will be subject to a performance period of not less than one year. These minimum vesting and performance periods will not, however, apply in connection with (a) a change in control, (b) termination of service due to death or disability, (c) a substitute award that does not reduce the vesting period of the award being replaced, (d) awards made tonon-employee members of our Board of Directors who elect to receive awards in exchange for cash compensation to which they would otherwise be or become entitled, and (e) awards involving an aggregate number of shares not in excess of 5% of the share reserve of 14,600,000.16,100,000.

Dividends and Dividend Equivalents

No dividends are payable on options or SARs. Any dividends or distributions paid with respect to unvested shares of restricted stock will be subject to the same restrictions as the shares to which such dividends or distributions relate, except for regular cash dividends on shares that are subject only to service-based vesting conditions. The Committee may provide that a recipient of a stock unit award or other stock-based award will be entitled to receive dividend equivalents on the units or other share equivalents subject to the award based on dividends actually declared on our outstanding common stock. Any dividend equivalents paid with respect to unvested units or share equivalents that are subject to performance-based vesting will be subject to the same restrictions as the units or share equivalents to which such dividend equivalents relate.

Term and Amendment of the 2012 LTIP

Unless terminated earlier, the 2012 LTIP will terminate on November 30, 2021. Awards outstanding under the 2012 LTIP at the time it is terminated may continue to be exercised, earned or become free of restriction, according to their terms. The Board of Directors may suspend or terminate the 2012 LTIP or any portion of it at any time. The Board of Directors may amend the 2012 LTIP from time to time, but no amendments to the 2012 LTIP will be effective without stockholder approval if such approval is required under applicable laws or regulations or under the rules of the New York Stock Exchange, including stockholder approval for any amendment that seeks to modify the prohibition on underwater option repricing discussed above.

Termination, suspension or amendment of the 2012 LTIP will not adversely affect any outstanding award without the consent of the affected participant, except for amendments necessary to comply with applicable laws or stock exchange rules.

Transferability of Awards

In general, no right or interest in any award under the 2012 LTIP may be assigned, transferred or encumbered by a participant, except by will or the laws of descent and distribution. However, the Committee may provide that an award (other than an incentive stock option) may be transferable by gift to a participant’s family member or pursuant to a qualified domestic relations order. Any permitted transferee of such an award will remain subject to all the terms and conditions of the award applicable to the participant.

Performance-Based Compensation Under Section 162(m)

The 2012 LTIP permits the Committee mayto grant restricted stock, stock unit, other stock-based awards or cash incentive awards under the 2012 LTIP to employees who are or may be “covered employees” that are intended to be “performance-based compensation” within the meaning of Section 162(m) of the Code as previously in order to preserve the deductibility of those awards for federal income tax purposes. Under current IRS interpretations, “covered employees” of a company are its chief executive officer and any other executive officer (other than the chief financial officer) who is among the three other most highly compensated executive officers employed by the company at a year end.effect. Participants are entitled to receive payment for a Section 162(m) performance-based award for any given performance period only to the extent thatpre-established performance goals set by the Committee for the performance period are satisfied. Options

The Tax Cuts and SARs granted under the 2012 LTIP need not be conditioned upon the achievement of performance goalsJobs Act enacted in order to constitute performance-based compensation forDecember 2017 revised Section 162(m) purposes.

Thepre-established performance goals set by the Committee must be based on one or more of the following performance criteria specified inCode to, among other things, eliminate the 2012 LTIP: revenue or net sales; gross profit; operating profit; net income; earnings before income taxes; earnings before one or more of interest, taxes, depreciation, amortization and other adjustments; profitability as measured by return ratios (including, but not limitedexception forperformance-based compensation beginning January 1, 2018, subject to return on assets, return on equity, return on investment and return on revenues or gross profit) or by the degree to which any of the foregoing earnings measures exceed a percentage of revenues or gross profit; cash flow; market share; margins (including one or more of gross, operating and net earnings margins); stock price; total stockholder return; asset quality;non-performing assets; operating assets; operating expenses; balance of cash, cash equivalents and marketable securities; improvement in or attainment of expense levels or cost savings; operating asset turnover; accounts receivable levels (including measured in terms of days sales outstanding); economic value added; improvement in or attainment of working capital levels; employee retention; customer satisfaction; implementation or completion of critical projects; and growth in customer base.

The Committee may select one criterion or multiple criteria for measuring performance, and the measurement may be expressed in absolute amounts, on a per share basis (basic or diluted), relative to one or more other performance measures, as a growth rate or change from preceding periods, or as a comparison to the performance of specified companies or a published or special index or other external measures, and may relate to one or any combination of Company, subsidiary, business unit or individual performance. The Committee will define in an objective fashion the manner of calculating the performance goals based on the performance criteria it selects to

use in any performance period and will establish such performance goals within the time period prescribed by, and will otherwise comply with the requirements of, Section 162(m). In determining the actual amount to be paid with respect to an individual performance-based award for a performance period, the Committee may reduce (but not increase) the amount that would otherwise be payable as a result of satisfying the applicable performance goals.

Approval of the Amendment to the 2012 LTIP at the Annual Meeting will be deemed to includere-approval of the material terms of awards intended to qualify as performance-based compensation under Section 162(m), including the business criteria on which performance goals are based and the maximum awards that may be made to any individual.certain transition rules.

Change in Control of the Company

For purposes of the 2012 LTIP, a “change in control” of our Company generally occurs if (i) a person or group acquires 30% or more of our Company’s outstanding stock, (ii) certain changes occur in the composition of the Board of Directors, or (iii) a reorganization, merger or consolidation of our Company, or a sale or disposition of all or substantially all of our Company’s assets, is consummated (unless our Company’s outstanding stock immediately prior to the transaction continues to represent over 70% of the outstanding stock of our Company or the surviving entity immediately after the transaction).

If a change in control of our Company occurs as a result of which our Company does not survive as an operating company or survives only as a subsidiary of another entity, then the consequences will be as described in this paragraph unless the Committee provides otherwise in an applicable award agreement. If any outstanding award is not continued, assumed or replaced by the successor entity in connection with such a change in control, the award will be canceled in exchange for a payment with respect to such award in an amount equal to the excess, if any, between the fair market value of the consideration to be received in the change in control for the number of shares remaining subject to the award over the aggregate exercise price (if any) for the shares remaining subject to such award (or, if there is no excess, such award may be canceled without payment). In the case of performance-based awards, the number of shares remaining subject to an award or the settlement amount of a cash incentive award will be calculated by deeming all performance measures to have been satisfied at targeted performance. If any outstanding award is continued, assumed or replaced by the successor entity in connection with such a change in control, the Committee may provide that such award will become fully vested and exercisable upon the involuntary termination of the participant without cause within a specified amount of time following the change in control.

In the event of a change in control of our Company other than as described in the previous paragraph, the Committee may provide that (i) any award will become fully vested and exercisable upon the change in control or upon the involuntary termination of the participant without cause within a specified amount of time following the change in control, (ii) any option or SAR will remain exercisable during all or some portion of its remaining term, or (iii) awards will be canceled in exchange for payments in a similar manner as described above with respect to a change in control as a result of which our Company does not survive as an operating company or survives only as a subsidiary of another entity.

Effect of Termination of Employment or Other Services

If a participant ceases to be employed by or provide other services for our Company and all subsidiaries, awards under the 2012 LTIP then held by the participant will be treated as set forth below unless provided otherwise in the applicable award agreement.

Upon termination for any reason other than death or disability, all unvested and unexercisable portions of any outstanding awards shall be immediately forfeited, and the currently vested and exercisable portions of options and SARs may be exercised for 90 days after such termination. However, if a participant is 65 or more years old or is 55 or more years old and has been an employee of or provider of other services to our Company for at least 10 years, then the currently vested and exercisable portions of options and SARs may be exercised for one year after such termination.

Upon termination due to death or disability, all outstanding options and SARs will become fully exercisable and will remain exercisable for one year after such termination, and all other awards will fully vest immediately.

U.S. Federal Income Tax Consequences

The following is a summary of the principal United States federal income tax consequences to the Company and to participants subject to U.S. taxation with respect to awards granted under the 2012 LTIP. This summary is not intended to be exhaustive and does not discuss the income tax laws of any city, state or foreign jurisdiction in which a participant may reside.

Non-Statutory Options.    If a participant is granted anon-statutory option under the 2012 LTIP, the participant will not recognize taxable income upon the grant of the option. Generally, the participant will recognize ordinary income at the time of exercise in an amount equal to the difference between the fair market value of the shares acquired at the time of exercise and the exercise price paid. The participant’s basis in the common stock for purposes of determining gain or loss on a subsequent sale or disposition of such shares generally will be the fair market value of our common stock on the date the option was exercised. Any subsequent gain or loss will be taxable as a capital gain or loss. The Company will generally be entitled to a federal income tax deduction at the time and for the same amount as the participant recognizes ordinary income.

Incentive Stock Options.    If a participant is granted an incentive stock option under the 2012 LTIP, the participant will not recognize taxable income upon grant of the option. Additionally, if applicable holding period requirements (a minimum of two years from the date of grant and one year from the date of exercise) are met, the participant will not recognize taxable income at the time of exercise. However, the excess of the fair market value of the shares acquired at the time of exercise over the aggregate exercise price is an item of tax preference income potentially subject to the alternative minimum tax. If shares acquired upon exercise of an incentive stock option are held for the holding period described above, the gain or loss (in an amount equal to the difference between the fair market value on the date of sale and the exercise price) upon disposition of the shares will be treated as a long-term capital gain or loss, and the Company will not be entitled to any deduction. If the holding period requirements are not met, the incentive stock option will be treated as one that does not meet the requirements of the Code for incentive stock options and the tax consequences described above fornon-statutory options will apply.

Other Awards.    The current federal income tax consequences of other awards authorized under the 2012 LTIP generally follow certain basic patterns. SARs are taxed and deductible in substantially the same manner asnon-statutory options. An award of nontransferable restricted stock subject to a substantial risk of forfeiture results in income recognition by a participant in an amount equal to the fair market value of the shares received (determined as if the shares were not subject to any risk of forfeiture) at the time the restrictions lapse and the shares vest, unless the participant elects under Section 83(b) of the Code to accelerate income recognition and the taxability of the award to the date of grant. Stock unit awards and cash incentive awards generally result in income recognition by a participant at the time payment of such an award is made in an amount equal to the amount paid in cash or the then-current fair market value of the shares received, as applicable. In each of the foregoing cases, the Company will generally have a corresponding deduction at the time the participant recognizes income, subject to Section 162(m) of the Code with respect to coveredcertain “covered employees.

Section 162(m) of the Code.” Section 162(m) of the Code denies a deduction to any publicly held corporation for compensation paid to certain “covered employees” in a taxable year to the extent that compensation to the covered employee exceeds $1,000,000, unless, among other exceptions, the compensation qualifies as “performance-based compensation.” The 2012 LTIP is designed to meet the requirements of Section 162(m), but awards other than options and SARs granted under the 2012 LTIP will only be treated as qualified performance-based compensation under Section 162(m) if the awards and the procedures associated with them comply with all other requirements of Section 162(m), including that the maximum amount of compensation a covered employee may receive is based on the satisfaction ofpre-established performance goals.$1,000,000.

Section 409A of the Code.    The foregoing discussion of tax consequences of awards under the 2012 LTIP assumes that the award discussed is either not considered a “deferred compensation arrangement” subject to

Section 409A of the Code, or has been structured to comply with its requirements. If an award is considered a deferred compensation arrangement subject to Section 409A but fails to comply, in operation or form, with the requirements of Section 409A, the affected participant would generally be required to include in income when the award vests the amount deemed “deferred,” would be required to pay an additional 20% income tax, and would be required to pay interest on the tax that would have been paid but for the deferral. The 2012 LTIP will be administered in a manner intended to comply with Section 409A.

Incentive Awards Under the 2012 LTIP

As of the date of this proxy statement, the Committee has not approved any awards in excess of the current share reserve under the 2012 LTIP and therefore has not approved awards in reliance on the Amendment. Because all awards under the 2012 Plan are granted under the discretion of the Committee, neither the number nor type of future 2012 LTIP awards to be received by or allocated to particular participants or groups of participants is presently determinable. Information regarding awards made to named executive officers under the 2012 LTIP during fiscal 20162017 is provided under the caption “Grants of Plan-Based Awards for Fiscal 2016”2017” of this proxy statement.

Required Vote

The affirmative vote of a majority of the shares of our common stock present or represented by proxy and entitled to vote on this proposal at the Annual Meeting is required to approve the Amendment. If stockholder approval is not obtained, then the Amendment to the 2012 LTIP will not become effective.

Recommendation of the Board of Directors

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” APPROVAL OF THE AMENDMENT TO THE FAIR ISAAC CORPORATION 2012 LONG-TERM INCENTIVE PLAN.

PROPOSAL 3: ADVISORY VOTE ON EXECUTIVE OFFICER COMPENSATION

Pursuant to Section 14A of the Exchange Act, the Company seeks anon-binding advisory vote from its stockholders to approve the compensation of our named executive officers as described under “Executive Compensation — Compensation Discussion and Analysis” and the tabular disclosure regarding named executive officer compensation (together with the accompanying narrative disclosure) in this proxy statement.

This proposal gives our stockholders the opportunity to express their views on the Company’s named executive officer compensation. Because your vote is advisory, it will not be binding upon the Board of Directors. However, the Leadership Development and Compensation Committee will take into account the outcome of the vote when making future executive officer compensation decisions.

As we discuss below in our Compensation Discussion and Analysis, we believe that our compensation policies and decisions are designed to deliver a performance-based pay philosophy, are aligned with the long-term interests of our stockholders and are competitive. The Company’s principal compensation policies, which enable the Company to attract, motivate and retain talented executive officers to lead the Company in the achievement of our business objectives, include:

As a result, we are presenting this proposal, which gives you as a stockholder the opportunity to vote on our named executive officer compensation as disclosed in this proxy statement by voting “FOR” or “AGAINST” the following resolution:

RESOLVED, that the stockholders approve the compensation of the Company’s named executive officers, as disclosed in the Compensation Discussion and Analysis, the compensation tables, and the related disclosure contained in the Company’s Proxy Statement for its 20172018 Annual Meeting.

Recommendation of the Board of Directors

THE BOARD OF DIRECTORS BELIEVES THAT THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS IS APPROPRIATE AND RECOMMENDS A VOTE “FOR” THE APPROVAL OF THE NAMED EXECUTIVE OFFICER COMPENSATION AS DISCLOSED IN THE COMPENSATION DISCUSSION AND ANALYSIS AND THE COMPENSATION TABLES AND OTHERWISE IN THIS PROXY STATEMENT.

PROPOSAL 4: ADVISORY VOTE ON THE FREQUENCY OF THE ADVISORY VOTE TO APPROVE OUR EXECUTIVE OFFICER COMPENSATION PRACTICES

The Company seeks anon-binding advisory vote from its stockholders regarding the desired frequency for holding anon-binding advisory vote to approve the compensation of our executive officers as described in our annual proxy statements.

This proposal gives our stockholders the opportunity to express their views as to whether thenon-binding advisory vote on our named executive officer compensation practices should occur every one, two, or three years. Because your vote is advisory, it will not be binding upon the Board of Directors. However, the Board of Directors will take into account the outcome of the vote when deciding the frequency of thenon-binding advisory vote on our future executive officer compensation decisions.

We recommend that anon-binding advisory vote to approve the compensation of our executive officers as described in our annual proxy statements occur every year. We believe that holding this vote every year will be the most effective timeframe because it will allow our Board of Directors and Leadership Development and Compensation Committee to engage with our stockholders following each such vote and to understand any concerns our stockholders may have. In addition, one aspect of our executive compensation philosophy is the alignment of our executive officers’ long-term interests with those of our stockholders, and a vote every year will provide stockholders with the opportunity to evaluate the effectiveness of our executive compensation philosophy as it relates to our performance. Nevertheless, although it is our current intention to hold such advisory vote every year, we may determine that a different frequency is appropriate, either in response to the vote of our stockholders on this Proposal or for other reasons.

While we believe our recommendation is appropriate at this time, the stockholders are not voting to approve or disapprove our recommendation, but are instead asked to provide an advisory vote on whether thenon-binding advisory vote on the approval of our named executive officer compensation practices should be held every one, two or three years. The option among those choices that obtains a plurality of votes cast by the shares present or represented by proxy and entitled to vote at the Annual Meeting will be deemed to have received the advisory approval of our stockholders.

Recommendation of the Board of Directors

THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS CAST THEIR ADVISORY VOTES IN FAVOR OF HOLDING THENON-BINDING ADVISORY VOTE TO APPROVE OUR NAMED EXECUTIVE OFFICER COMPENSATION PRACTICES EVERY YEAR.

PROPOSAL 5: RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

It is the responsibility of the Audit Committee to select and retain independent auditors. Our Audit Committee has appointed Deloitte & Touche LLP (“Deloitte”) as our independent auditors for the Company’s fiscal year ending September 30, 2017.2018. Although stockholder ratification of the Audit Committee’s selection of independent auditors is not required by our Bylaws or otherwise, we are submitting the selection of Deloitte to stockholder ratification so that our stockholders may participate in this important corporate decision. If not ratified, the Audit Committee will reconsider the selection, although the Audit Committee will not be required to select different independent auditors for the Company.

Representatives of Deloitte will be present at the Annual Meeting and will have an opportunity to make a statement and respond to questions from stockholders present at the meeting.

Audit andNon-Audit Fees

The following table presents fees for professional audit services rendered by the Company’s independent registered public accounting firm for the fiscal years ended September 30, 20162017 and September 30, 2015,2016, for the audit of our annual financial statements and fees for other services rendered by the firm during those respective periods.

Audit Fees.    Audit fees consisted of fees for services rendered in connection with the annual audit of our consolidated financial statements, quarterly reviews of financial statements included in our quarterly reports on Form10-Q, and the audit of internal control over financial reporting. Audit fees also consisted of services provided in connection with statutory audits, consultation on accounting matters and SEC registration statement services.

Audit-Related Fees.    Audit-related fees consisted principally of fees for audits of financial statements of employee benefit plans, vendor compliance audits, due diligence related to acquisitions, and fees related to financial andnon-financial attestation services (Service Organization Control).

Tax Fees.    Tax services consisted of fees for tax consultation and tax compliance services.

All Other Fees.    All other fees consisted of fees for access to an online library of accounting and financial reporting literature.

Our Audit Committee considers whether the provision of services other than for audit fees is compatible with maintaining our independent auditor’s independence, and has determined that these services for fiscal 20162017 and 20152016 were compatible. The services described above were approved by the Audit Committee pursuant to Rule2-01 of RegulationS-X under the Exchange Act.

Policy on Audit Committee Preapproval of Audit andNon-Audit Services of Independent Auditors

Our Audit Committee is responsible for appointing, setting compensation, and overseeing the work of the independent auditors. The Audit Committee has established a policy regarding preapproval of all audit and permittednon-audit services provided by the independent auditors. On an ongoing basis, management communicates specific projects and categories of service for which it requests the advance approval of the Audit Committee. The Audit Committee reviews these requests and advises management if the Audit Committee approves the engagement of the independent auditors. On a periodic basis, management reports to the Audit

Committee regarding the actual spending for such projects and services compared to the approved amounts. The Audit Committee may also delegate the ability to preapprove audit and permittednon-audit services to a subcommittee consisting of one or more members, provided that any such preapprovals are reported on at the next Audit Committee meeting.

Recommendation of the Board of Directors

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE RATIFICATION OF DELOITTE & TOUCHE LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 2017.2018.

REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS

The Audit Committee selects and retains an independent registered public accounting firm as the Company’s independent auditor and assists the Board in overseeing (1) the integrity of the Company’s financial statements, (2) the independent auditor’s qualifications and independence, (3) the performance of the Company’s internal audit function and independent auditor, and (4) the compliance by the Company with legal and regulatory requirements related to financial affairs and reporting. The Board of Directors has adopted a written charter for the Audit Committee that addresses the responsibilities of the Audit Committee. This charter is available on the “Investors” page of our website at www.fico.com.

While the Audit Committee has the responsibilities and powers set forth in its charter, it is not the duty of the Audit Committee to plan or conduct audits or to determine that the Company’s financial statements and disclosures are complete and accurate and are in accordance with generally accepted accounting principles and applicable legal and other requirements. These are the responsibilities of management and the independent auditor. Additionally, in performing its oversight function, the Audit Committee necessarily relies on the work and assurances of, and information provided by, management and the independent auditor.

Deloitte & Touche LLP (“Deloitte”) served as the Company’s independent auditor for the fiscal year ended September 30, 2016.2017. In fiscal 2016,2017, the Audit Committee met and held discussions with management and Deloitte on numerous occasions. In fulfilling its oversight responsibilities, the Audit Committee reviewed and discussed with management and Deloitte the Company’s quarterly consolidated financial statements prior to the filing of each Quarterly Report onForm 10-Q and the audited consolidated financial statements included in the Annual Report onForm 10-K for the fiscal year ended September 30, 2016.2017. The Audit Committee discussed with Deloitte matters required to be discussed by the applicable Public Company Accounting Oversight Board standards. Deloitte also provided to the Audit Committee the written disclosures required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant’s communications with the Audit Committee concerning independence, and the Audit Committee discussed with Deloitte the firm’s independence.

Based upon the Audit Committee’s discussions with management and the independent auditor, and the Audit Committee’s review of the representations of management and the report of the independent auditor to the Audit Committee, the Audit Committee recommended to the Board of Directors that the audited consolidated financial statements be included in the Company’s Annual Report onForm 10-K for the fiscal year ended September 30, 2016,2017, as filed with the SEC.

Submitted by the Audit Committee:

James D. Kirsner, Chair

Greg R. Gianforte

Marc F. McMorris

David A. Rey

CERTAIN RELATIONSHIPS AND RELATED PERSONS TRANSACTIONS

We maintain a written policy for the approval of any related person transactions. A “Related Person,” for purposes of our policy, means:

“Immediate family members” include children, stepchildren, parents, stepparents, spouses, siblings, mothers- andfathers-in-law, sons- anddaughters-in-law, brothers- andsisters-in-law and any other person (other than a tenant or employee) sharing the household of one of these individuals.

Under the Related Persons Transaction Policy, any transaction, arrangement or relationship between usin which the Company (including any of its subsidiaries) is or will be a participant and in which a Related Person has a direct or indirect interest (a “Related Persons Transaction”) must be reviewed by the Audit Committee, except that the following transactions, arrangements or relationships are exempt under the policy:

In determining whether to approve a Related Persons Transaction, the Audit Committee will consider the following:

We will only enter into a Related Persons Transaction if the Audit Committee determines that the Related Persons Transaction is beneficial to the Company, and the terms of the Related Persons Transaction are fair to the Company. No Related Persons Transactions occurred during fiscal 2016.2017.

CORPORATE GOVERNANCE

Board Leadership Structure

The Board of Directors does not have a policy with respect to the separation of the offices of Chairman of the Board and Chief Executive Officer. The Board of Directors believes that it is in the best interestsinterest of the Company for the Board of Directors to make a determination on this matter when it appoints a new Chief Executive Officer or Chairman. The Board of Directors has determined that, currently, the most effective leadership structure is to have a separate Chairman of the Board, a position held by Mr. Kelly since February 2016 (and previously held by Mr. Battle from 2002 to February 2016), and Chief Executive Officer, a position held by Mr. Lansing since January 2012, as it provides us the best access to the judgments and experience of both individuals while providing a mechanism for the Board’s independent oversight of management. As a result, the Chairman presides over the meetings of the Board of Directors and the stockholders, and the Chief Executive Officer is allowed more time to focus energies on the management of the Company’s business.

Board Risk Oversight Role

Our management is responsible for identifying the various risks facing the Company, formulating risk management policies and procedures, and managing the Company’s risk exposures. Our Board of Directors’ responsibility is to monitor the Company’s risk management processes by informing itself concerning our material risks and evaluating whether management has reasonable controls in place to address the material risks. The Audit Committee of the Board of Directors has been monitoring management’s responsibility in the area of risk oversight. Accordingly, our internal risk management team regularly reports to the Audit Committee on our major risk exposures and the steps management has taken to monitor and control such exposures, including our risk assessment and risk management policies. The Audit Committee, in turn, reports on the matters discussed at the committee level to the full Board of Directors.

Attendance at Board Meetings

During fiscal 2016,2017, the Board of Directors met four times. Each director, except for Mr. McMorris and Ms. Rees as well as Mr. Gianforte, a former director, attended at least 75% of the aggregate of the total number of meetings of the Board of Directors and the total number of meetings held by all committees of the Board on which such director served. With respect to the board and committee meeting attendance of Mr. McMorris and Ms. Rees, the Board takes director attendance very seriously. In the Board’s view, Mr. McMorris and Ms. Rees are both active, engaged and valuable members of the Board. Their attendance was close to but under 75%, which was compounded by the fact that we held only four board meetings in fiscal 2017. Mr. McMorris and Ms. Rees both have committed to attend at least 75% of the board and committee meetings in fiscal 2018.

Health permitting, all Board members are expected to attend our Annual Meeting. All directors serving on the Board at the time attended the 20162017 Annual Meeting with the exception of Duane White, who did not standexcept forre-election at the 2016 Annual Meeting. Mr. McMorris.

Our Corporate Governance Guidelines provide that independent directors will meet in executive session without the Chief Executive Officer or other management present at each regular Board meeting. Braden R. Kelly, the Chairman of the Board, is independent and presides at executive sessions held in accordance with our Corporate Governance Guidelines.

Annual Board Self-Evaluations

The Board of Directors and committees conduct annual self-evaluations to assess the qualifications, attributes, skills and experience represented on the Board and to determine whether the Board and its committees are functioning effectively.

Board Committees

Our Board has three standing committees: Audit; Leadership Development and Compensation; and Governance, Nominating and Executive. All of the members of the committees are independent directors under the applicable SEC rules and NYSE listing standards. Each committee’s charter expressly provides that the

committee has the sole discretion to retain, compensate, and terminate its advisors. Current copies of the charters of the three committees are available on the “Investors” page of our website at www.fico.com. The following sets forth membership of each of our committees as of January 11, 2017.January��26, 2018.

Audit Committee				Primary Responsibilities:
20162017 Meetings: 8 James D. Kirsner (Chair) Greg R. Gianforte Marc F. McMorris David A. Rey		•		Assists the Board in overseeing the integrity of our financial statements;
		•		Oversees the qualifications and independence of our independent auditor;
		•		Oversees performance of our internal audit function and independent auditor;
	•
		•		Oversees our company’s compliance with legal and regulatory requirements related to financial affairs and reporting;
	•
		•		Appoints, retains, compensates, and replaces the independent auditor; and
	•
		•		Reviews the audited financial statements with management, and on an annual basis it provides an Audit Committee Report wherein it states that it recommends to the Board that the audited financial statements be included in our Annual Report onForm 10-K.
				Independence:
	•
		•		Each member of the Audit Committee is independent as defined in Rule10A-3 adopted pursuant to the Sarbanes-Oxley Act of 2002 and in the NYSE listing rules; and
	•
		•		The Board determined that all members of the Audit Committee are “audit committee financial experts” under the SEC regulations and financially literate under NYSE listing rules.
Leadership Development and Compensation Committee				Primary Responsibilities:
20162017 Meetings: 87 A. George Battle (Chair) Mark W. Begor Braden R. Kelly Joanna Rees		•		Overall oversight responsibility for the directors’ and executive officers’ compensation plans and the compensation policies and programs of the Company;
		•		Reviews and approves the level and terms of the executive officers’ annual and long-term compensation;
	•
		•		Administers the 2012 LTIP, as well as makes recommendations to the Board of Directors regarding the adoption of other incentive plans;
	•
		•		Makes recommendations to the Governance, Nominating and Executive Committee with respect to the form and amount of director compensation, and, jointly with the Governance, Nominating and Executive Committee, recommends changes in director compensation to the Board; and
	•
		•		Monitors compliance by directors and officers with the Company’s stock ownership guidelines.
				Independence:
	•
		•		Each member of the Leadership Development and Compensation Committee is independent as required by the NYSE listing rules.

Governance, Nominating and Executive Committee				Primary Responsibilities:
20162017 Meetings: 54 Braden R. Kelly (Chair) A. George Battle James D. Kirsner		•		Reviews annually with the Board the composition of the Board, the requisite skills and characteristics of new Board members, and the performance and continued tenure of incumbent Board members;
		•		Seeks individuals qualified to become Board members for recommendation to the Board;
		•		Develops and recommends to the Board the criteria for identifying and evaluating director candidates, and recommends candidates for election or reelection to the Board;
		•		Establishes the agenda for each Board meeting in cooperation with the CEO and appropriate senior management;
		•		Recommends the membership of the Audit and Leadership Development and Compensation Committees;
		•		Reviews and assesses the adequacy of the Corporate Governance Guidelines and recommends any proposed changes to the Board for approval;
		•		Receives recommendations of the Leadership Development and Compensation Committee with respect to the form and amount of director compensation, and, jointly with the Leadership Development and Compensation Committee, recommends changes in director compensation to the Board;
		•		Takes action between meetings, subject to defined limits, with respect to investment, budget, and capital and exploratory expenditure matters arising in the normal course of the Company’s business; and
		•		Takes action between meetings, subject to defined limits, to sell, lease, pledge, mortgage or otherwise dispose of property or assets of the Company.
				Independence:
		•		Each member of the Governance, Nominating and Executive Committee is independent as required by the NYSE listing rules.

DIRECTOR COMPENSATION FOR FISCAL 20162017

The table below summarizes the compensation paid by the Company to eachnon-employee director for the year ended September 30, 2016.2017.

(8)(10)

Ms. Rees’Rees’s “Fees Earned or Paid in Cash” includerepresent the $30,000$75,000 annual retainer fees paid quarterly in the firstboard and second quarter of fiscal 2016 and the $60,000 annualcommittee retainer fees payable upon herre-election foregone by Ms. Rees to instead receive 2,0602,203 stock options. The amount recognized for financial statement reporting purposes in fiscal 20162017 with respect to such options, which was $65,735,$96,491, is excluded from the “Option Awards” column.

Non-Employee Director Compensation

The following compensation components are paid to ournon-employee directors:

Fiscal 2016.Our Program for fiscal 2016 is as described below. For a description of our compensation program in effect prior to this date, see last year’s proxy statement.

Under the Program, eachnon-employee director was entitled to receive annual retainer fees in the amounts set forth below and were paid in cash quarterly in arrears during their annual term commencing upon their election orre-election at each Annual Meeting of Stockholders. Such amounts werepro-rated for appointments made to the Board of Directors, Chair of the standing Board committee or Chairman of the Board between Annual Meetings.

The stock price used for purposes of all calculations made under the Program equaled the average closing price of a share of the Company’s stock for the trading days within the30-calendar-day period that ended on the eleventh calendar day before the date of grant.

Eachnon-employee director had the right, prior to the Annual Meeting, to elect to receive some or all of these annual retainer fees in the form of fully vested nonqualified stock options instead of cash. A director who elected to receive some or all of these annual retainer fees in the form of a stock option received an option to purchase a number of shares equal to the amount of the retainer or portion of the retainer being converted divided by the Black Scholes value of an option.

Upon initial election to the Board, eachnon-employee director was entitled to receive a number of nonqualified stock options subject to three-year ratable vesting equal to $460,000 divided by the Black Scholes value of a nonqualified stock option. The director was able to elect to convert either 50% or 100% of these stock options to restricted stock units subject to three-year ratable vesting. The number of restricted stock units was determined by dividing the aggregate Black Scholes value of the nonqualified stock options being exchanged by the value of a restricted stock unit.

Annual equity grants made tonon-employee directors who werere-elected at the 2016 Annual Meeting of Stockholders after serving on the Board at least since the previous Annual Meeting were in the form of stock options subject toone-year cliff vesting equal to $230,000 divided by the Black Scholes value of a nonqualified stock option, and each committee chair received an additional 750 nonqualified stock options annually. Each director was able to elect to convert either 50% or 100% of these stock options to restricted stock units subject toone-year cliff vesting. The number of restricted stock units was determined by dividing the aggregate Black Scholes value of the nonqualified stock options being exchanged by the value of a restricted stock unit. Equity awards granted upon an Annual Meeting that are subject to vesting will vest upon the dates of successive Annual Meetings.

Fiscal 2017.Our Program for fiscal 2017, effective upon the election of directors at the 2017 Annual Meeting of Stockholders, is unchanged from our Program for fiscal 2016, other the changes to the annual retainer fees and annual equity grants made tonon-employee directors described below.

Under the Program for fiscal 2017, eachnon-employee director will be entitled to receive annual retainer fees in the amounts set forth below and will be paid in cash quarterly in arrears during their annual term commencing upon their election orre-election at each Annual Meeting of Stockholders. Such amounts will bepro-rated for appointments made to the Board of Directors, Chair of the standing Board committee or Chairman of the Board between Annual Meetings.

The stock price used for purposes of all calculations made under the Program equaled the average closing price of a share of the Company’s stock for the trading days within the30-calendar-day period that ended on the eleventh calendar day before the date of grant.

Eachnon-employee director had the right, prior to the Annual Meeting, to elect to receive some or all of these annual retainer fees in the form of fully vested nonqualified stock options instead of cash. A director who elected to receive some or all of these annual retainer fees in the form of a stock option received an option to purchase a number of shares equal to the amount of the retainer or portion of the retainer being converted divided by the Black Scholes value of an option.

Upon initial election to the Board, eachnon-employee director was entitled to receive a number of nonqualified stock options subject to three-year ratable vesting equal to $460,000 divided by the Black Scholes value of a nonqualified stock option. The director was able to elect to convert either 50% or 100% of these stock options to restricted stock units subject to three-year ratable vesting. The number of restricted stock units was determined by dividing the aggregate Black Scholes value of the nonqualified stock options being exchanged by the value of a restricted stock unit.

Annual equity grants made tonon-employee directors who arewerere-elected at the 2017 Annual Meeting of Stockholders after serving on the Board at least since the previous Annual Meeting will bewere in the form of stock options subject toone-year cliff vesting equal to $230,000 divided by the Black Scholes value of a nonqualified stock option, and each committee chair will receivereceived an additional annual grant in the form of stock options subject toone-year cliff vesting equal to $30,000 divided by the Black Scholes value of a nonqualified stock option. Each director will bewas able to elect to convert either 50% or 100% of these stock options to restricted stock units subject toone-year cliff vesting. The number of restricted stock units will bewas determined by dividing the aggregate Black Scholes value of the nonqualified stock options being exchanged by the value of a restricted stock unit. Equity awards granted upon an Annual Meeting that are subject to vesting will vest upon the dates of successive Annual Meetings.

Our Program is expected to remain unchanged for fiscal 2018.

Director Stock Ownership Guidelines

Our policy requiresnon-employee directors to hold 10,000 shares within five years of beginning service on the Board. All of the directors currently meet the stock ownership guidelines or are making acceptable progress to their applicable level.

Director and Officer Liability Insurance Policies

Directors are covered under our director and officer liability insurance policies for claims alleged in connection with their service as directors. We have entered into indemnification agreements with all of our directors agreeing to indemnify them to the fullest extent permitted by law for claims alleged in connection with their service as directors.

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

Overview of Company Performance in Fiscal 20162017

During fiscal 2016,2017, our growth initiatives continued to generate significant free cash flow. We utilized our cash to enhance stockholder value through investments in long-term growth initiatives; acquisitions of relevant technologies and products that strengthen our portfolio and competitive position;initiatives and our sharestock repurchase programs.

WeWhile we continued to invest inofferon-premise solutions for many customers who prefer to install and run our growth initiatives that expandsoftwarein-house, we continued our addressable markets. We expanded our traditionalon-premises softwareexpansion into cloud-based solutions in our Applications and Decision Management Software (formerly “Tools”) segments to provide growth opportunities with customers that can benefit from the affordability and simplicity of these solutions. OurThe majority of our software solutions are available through the FICO^®FICO® Analytic Cloud, and during fiscal 2017, we are adding delivery via third-partyadded Amazon Web Services, Inc. (“AWS”) as our primary cloud environments, which are offered through large vendors in other geographic locations acrossinfrastructure provider. We have migrated several core applications, including the world. We continue to offer our solutionson-premises for many customers who prefer to install and run our softwarein-house. In addition, we introduced the FICO^®FICO® Decision Management Suite, 2.0 (“DMS”), which provides an easy wayto AWS and will migrate additional applications over the next three years. Our cloud bookings accounted for 24% and 26% of our total bookings during fiscal 2017 and 2016, respectively, directly demonstrating the willingness among our customers to evaluate, customize, deploy and scalestate-of-the-art analytics. The DMS allows customers to quickly integrateengage our tools and components with their data, helping organizations of all sizes realize the promise of advanced analytics and decision management in a cost-effective, scalable cloud oron-premise solution.cloud-based solutions.

For our Scores segment, our industry leadingbusiness-to-business FICO^®FICO® Scores expanded further into the larger, faster growing U.S. consumer market. The FICO^®FICO® Score Open Access program, which allows our participating clients to provide their customers with a free FICO^®FICO® Score along with content to help them understand the FICO^®FICO® Score their lender uses, continued its expansion during the current year. ThroughWe commenced this program wein 2014 and now have more than 180250 million consumersconsumer accounts with access to theira free FICO^®FICO® Score. The partnership agreement we launched in fiscal 2015 with Experian, a leading global information services provider, also continued to accelerate during the current year. This partnership provides consumers the FICO^® ScoresFICO® Score that lenders most commonly use in evaluating credit when determining applicant eligibility for new credit cards, car loans, mortgages or other lines of credit and can be accessed through Experian.com. During fiscal 2017, we announced the FICO Financial Inclusion Initiative, a global effort to increase access to affordable credit for consumers and businesses with limited or no credit history, through the use of alternative data. We have partnered and continue to pursue additional partners, to distribute the FICO^®FICO® Scores with their product offerings sold directly to consumers. In addition, we are pursuing opportunities to make FICO^®the FICO® Scores available to third-parties for affinity, white-labeled programs to further penetrate and expand the markets where our scores are available.

We continued to make acquisitions that deliver solutions to the financial services industry and adjacent vertical industries. Our acquisition of QuadMetrics, a provider of enterprise security assessment analytics, accelerates our efforts to provide a suite of complementary cyber-related analytics solutions to market.

With our strong portfolio of products now in place and the accelerating growth we are experiencing in our cloud-based offerings, we shifted some of our resources to distribution in our expanded market. During fiscal 2016, we expanded our distribution andgo-to-market for both the Applications and Decision Management Software segments, which include significant sales training and increasing sales resources to reach new market segments. In fiscal 2017, we expect to broaden our investment into product delivery, support and infrastructure operations.

We also returned significant cash to stockholders through our stock repurchase program. During fiscal 2016,2017, we repurchased approximately 1.31.5 million shares at a total repurchase price of $138.4$193.3 million. As of September 30, 2016,2017, we had $230.0$36.7 million remaining under our currentthen-current stock repurchase program.

Fiscal 20162017 was also a good year from the perspective of our stockholders, with continued strong returns illustrated by the chart below for the past three fiscal years.

FICO vs. Russell 30003-Year Indexed Total Stockholder Return

(10/1/1314 through 10/1/16)17)

Overview of Fiscal 20162017 Compensation Program

As administered by our Leadership Development and Compensation Committee (the “Committee”), our compensation program seeks to closely link the financial interests of our Company’s executives with those of our stockholders. The Committee uses the following guidelines in our compensation program to help achieve this overarching goal.

In making compensation decisions at the outset of fiscal 20162017 and throughout the year, the Committee soughtcontinued to reinforce the linkage between Company performance and executive compensation. In keeping with this objective, base salaries for executive officers in fiscal 2016 continued to remain flat as part of the continuedCommittee maintained its focus on prominently featuringperformance-based cash incentives andperformance-based equity.

While the targeted level ofshort-term cash incentive awards for each executive officer, expressed as a percentage of annual base salary, remained unchanged, actual short-term cash incentive award levels slightly increased overall in fiscal 2017 compared to fiscal 2016, as the actualshort-term cash incentive award levelsawards to Mr. Lansing, Mr. Huyard and Mr. Wehmann increased and the actualshort-term cash incentive awards to Mr. Pung and Dr. Wells were the same as those in fiscal 2016 compared to fiscal 2015.2016. At the beginning of the fiscal year, our Board of Directors approved an Adjusted Revenue target of $870$925.0 million and an Adjusted EBITDA target of $247$268.8 million. These performance metrics were used by the Committee to determine funding of the fiscal 20162017 cash incentive pools and to drive sustainabletop- andbottom-line growth, balancing both short and longer term considerations. Our fiscal 2016 result2017 results of $881.4$932.2 million in Adjusted Revenue and $256.7$278.6 million in Adjusted EBITDA exceeded target, resulting in funding under both theBroad-Based and Management Incentive Plans at 117%

119% of budgeted target. “Adjusted Revenue” means the Company’s GAAP Revenue adjusted at the Committee’s discretion to remove the impact of revenues related to acquisitions or events deemed by the Committee to have been out of Management’s control and occurring in the measurement year. “Adjusted EBITDA” means earnings before interest, taxes, depreciation, and amortization (“EBITDA”) as adjusted forstock-based compensation expense, restructuring andacquisition-related charges, and other items reflected in the Regulation G schedule published by the Company as an attachment to its quarterly earnings releases, and further adjusted for such adjustments as may be applicable.releases. In selecting these two financial metrics, both of which are used to determineshort-term cash incentive funding and Performance Share Unit earnings, the Committee relied on the fact that the Company is making significant investments in technology infrastructure, solution innovation and distribution which tend to sacrificeshort-term performance on certain other metrics (e.g., earnings per share) in favor of enablinglonger-term stockholder value creation. The Committee believes that these measures best balance the delivery of steady growth against the investments the Company makes. Further, usingone-year performance periods allows the Committee to reward performance for a time period over which the Company has better visibility. Setting goals over a longer term is made difficult due to the complexity and evolving nature of the business problems addressed by our solutions and would lead to an increased probability of setting inaccurate or inappropriate goals.

To align executive interests with the creation of stockholder value,equity-based incentive compensation represents a substantial portion of total compensation, and we have continued to maintain a diverse mix of equity award types which favor those that are performance based instead of simply time vested. This mix oflong-term incentive vehicles helps ensure the Company’s executive compensation program operates effectively across a wide variety of business scenarios.

Long-term incentive awards to executive officers in fiscal 20162017 were granted in December 20152016 as part of the Company’s annualyear-end performance review and compensation planning process.Two-thirds of the annuallong-term incentives were performance based, with onlyone-third time based. Specifically, the Committee grantedone-third of the targeted annuallong-term award value to top executives in the form of Performance Share Units (“PSUs”), which were designed to reward the achievement of established Adjusted Revenue and Adjusted EBITDA goals. Based on Company performance with respect to those metrics, 166.77%175.6% of targeted PSUs granted in fiscal 20162017 were earned. The Committee granted anotherone-third of targeted annuallong-term award value in the form of Market Share Units (“MSUs”). MSUs are earned based on the Company’s total stockholder return relative to the Russell 3000 index over performance periods of one, two and three years. Based on ourone-year total stockholder return from December 1, 20152016 to November 30, 2016, 181%2017, 118% of the target awards for the first performance period of the MSUs granted in fiscal 20162017 were earned. Based on ourtwo-year total stockholder return from December 1, 20142015 to November 30, 2016,2017, 200% of the target awards for the second performance period of the MSUs granted in fiscal 20152016 were earned. Based on ourthree-year stockholder return from December 1, 20132014 to November 30, 2016,2017, third period earnings for MSUs granted in fiscal 20142015 were equal to 200% of the total targeted units granted less those units earned in the first and second periods.

Our strong linkage of pay and performance is illustrated in the chart below. The dollar amounts shown for targeted total direct compensation figures reflect value at grant. The dollar amounts shown for realized total direct compensation figures reflect fiscal 20162017 realized PSUs at 166.77%175.6% of targeted earnings and fiscal 2016

2017 MSUs at 181%118% of first performance period target earnings with second and third performance periods earnings reflected at target.

Target v. Realized Compensation for Named Executive Officers in FY16FY17

Preview of Fiscal 20172018 Compensation Program

The Committee’s decisions made at the outset of fiscal 20172018 reflect a continuation of the philosophy employed during fiscal 2016.2017. Specifically, our emphasis onlong-term incentives continues and thelong-term incentive program continues to reflect a strong emphasis onperformance-based vehicles. As described more fully below, and as was the case in fiscal 2016,2017,two-thirds of the value of the annual equity awards made to executive officers in fiscal 20172018 is tied toperformance-based vehicles. In addition, the stock ownership guidelines have been updated, as described below, and will be in effect for fiscal 2018.

Named Executive Officers

Our named executive officers for fiscal 20162017 consist of the following persons:

Determination of Compensation

Committee Process

Members of executive management participate in the Committee’s meetings at the Committee’s request. Management’s role is to contribute input and analysis, which the Committee considers in making its decisions. The Committee is not bound by management’s recommendations, but the Committee relies on the insights of our CEO and Chief Human Resources Officer in determining compensation for the executive officers, other than the CEO. The Committee also consults with its outside compensation consultant during its review of executive officer compensation. Prior to making decisions impacting executive compensation, the Committee refers to comprehensive statements and reports prepared by its consultant and management that reflect the amount and elements of each executive’s total compensation.

The Committee leads an annual performance review of the CEO in connection with the determination of his compensation. As part of this process, one or more Committee members and/or the Chairman of the Board meet

with each senior executive to discuss the CEO’s performance using a structured interview approach. In addition, each Board member completes a written evaluation form for the CEO and submits it to the Committee. Based on

these interviews and written evaluations, as well as on its own determinations regarding the CEO’s performance, the Committee prepares a final performance review for the CEO. The Committee then submits a recommendation for the CEO’s compensation to the Board for discussion. Following such discussion, the Committee finalizes its determination of the CEO’s compensation and informs the CEO of such determination, together with the final performance review.

Peer Group Analysis

In connection with our fiscal 20162017 executive compensation program, the Committee reviewed summary reports prepared by its consultant and by management reflecting current and proposed base salary, cash incentive and equity award levels for our executives. Each element was analyzed relative to the Company’s compensation peer group. The peer group consisted of 1920 companies that were selected as being similar in size to the Company and operating in the application software, data processing and outsourced services, research and consulting services and communication equipmentsub-industries within the Global Industry Classification Standard (“GICS”) taxonomy.

The 1920 peer companies that were considered whenat the time that the Committee set compensation for fiscal 20162017 are as follows:

The composition of the peer group is reviewed annually at a minimum, with adjustments made that the Committee, with the assistance of its compensation consultant, believes are appropriate to maintain comparability within the employment marketplace and to reflect any mergers or acquisitions among the subject companies.

Specific information with respect to relative position follows, using values available at the time the compensation levels were being determinedpeer group was reviewed in November 2015:September 2016:

The Committee considered the peer group information in addition to the factors described above when setting the compensation levels for our executives for fiscal 2016.2017. The Committee does not benchmark total compensation or individual elements of compensation to particular percentiles but aims to create competitive pay packages that reflect the Company’s performance and that are generally intended to deliver above market median compensation iflong-term equity incentives pay out at or above target based on challenging required levels of performance.

Use of Consultants

The Committee uses an outside compensation consultant to assist it in analyzing our Company’s compensation programs and assessing market levels of compensation. For fiscal 2016,2017, the Committee engaged Compensia,

Inc. to provide competitive practice and market compensation data, advice regarding the design of compensation programs for outside directors and executive officers, input regarding specific compensation actions for executive officers, analysis of the constitution of our peer group, and analysis concerning the structure of and any needednecessary amendments to our 2012 LTIP.

Stockholder Vote

At our last Annual Meeting of Stockholders held on February 24, 2016,15, 2017, we asked our stockholders to approve, by advisory vote, the compensation of our named executive officers, as disclosed in the Compensation Discussion and Analysis, the compensation tables, and the related disclosures contained in our proxy statement for that Annual Meeting. The proposal was approved by our stockholders with approximately 73.8%98.1% of the votes cast being “for” approval (or 68.9%96.5%, including abstentions). This result was lower than the 98.6% result (or 96.8%, including abstentions) for fiscal 2014 compensation. The Committee believes that the Company received lower support due to specialone-timelong-term incentive awards to three named executive officers in fiscal 2015, in relation to particularly strong performance by those executives and the Company’s extraordinary performance as a whole in fiscal 2014. The Committee believes that a single proxy advisory firm recommended against the Company’ssay-on-pay proposal largely as a result of theseone-time awards. In light of this result, the Company engaged in discussions with certain of its largest stockholders, representing 34% of thethen-outstanding shares, regarding its compensation practices to obtain feedback from those stockholders. The Committee, with input from its independent compensation consultant, has carefully reviewed and considered the voting results and the feedback from its stockholders and continues to strive to understand the opinions of the Company’s stockholders regarding the Company’s executive compensation structure. In light of the approval of our executive compensation practices by our stockholders, the Committee has largely maintained its prior compensation practices over the past year. However, noone-time awards were made to executive officers in 2016. The Committee continues to evaluate and adjust the Company’s compensation practices as it deems appropriate to advance the best interests of the Company and its stockholders.stockholders, and the Company engages in periodic discussions with certain of its largest stockholders to obtain feedback on its compensation practices. In light of the high approval rate of our executive compensation practices by our stockholders at our last Annual Meeting, the Committee has largely maintained the existing compensation practices during fiscal 2017.

We also asked our stockholders to vote, on an advisory basis, on the frequency of the advisory vote on executive compensation at our last Annual Meeting. Our stockholders overwhelmingly voted in favor of an annual advisory vote on executive compensation. After considering these results, the Company determined to include an advisory vote on executive compensation in its proxy materials on an annual basis until the next vote on the frequency of such advisory vote.

Elements of Compensation

The fiscal 20162017 executive compensation program consisted of three key elements: (1) base salary;(2) short-term cash incentives; and(3) long-term incentives in the form of PSUs, MSUs and RSUs.

Compensation Element				Purpose and Philosophy
		•		Performance Share Units (“PSUs”) are earned based upon the extent to which annual Company financial targets are achieved with as few as zero and as many as 200% of targeted PSUs possible. Earned units are then subject tomulti-year vesting, promoting continued linkage to Company stock price while also promoting retention.
		•		Market Share Units (“MSUs”) use a performance measure that is based on relative total stockholder return overone-,two- andthree-year periods instead of annual financial performance metrics to integrate a longer,multi-year performance period into the Company’s equity compensation program.
		•		Restricted Stock Units (“RSUs”) represent a more stableequity-based compensation vehicle, ensuring linkage to Company stock price performance while promoting retention over amulti-year vesting period.

Base Salary in Fiscal 20162017

NoneThree of our named executive officers experiencedreceived an increase in base salary as part of the Company’s annualyear-end performance review and compensation process in November 2015.2016. These increases were due to strong individual performance and contributions to the Company’s overall performance and reflect the Committee’s market competitiveness analysis. Mr. Lansing, our Chief Executive Officer, received an increase in base salary from $675,000 to $750,000; Mr. Huyard, our Executive Vice President, Sales, Services and Marketing, received an increase from $420,000 to $500,000; and Mr. Wehmann, our Executive Vice President, Scores, received an increase from $450,000 to $500,000. Increases in base salary for our executive officers are infrequent; other than an increase in Mr. Wehmann’s base salary in fiscal 2015, it has been several years since the Committee approved any such increases. This conservative approach reflects the Committee’s continued commitment to favoremphasizing incentive compensation elements directly linked to the achievement of targeted financial goals and the creation of stockholder value.

Short-Term Cash Incentives in Fiscal 20162017

We offer ashort-term incentive opportunity in the form of cash incentive awards to all of our executive officers. These incentive awards are paid from a single, centralized pool that supportsshort-term cash incentive payments made to our executive officers under our Management Incentive Plan and to other eligible employees under ourBroad-Based Incentive Plan.

Cash incentives paid to our named executive officers under the Management Incentive Plan are intended to be qualifiedperformance-based compensation for purposes of Section 162(m) of the Internal Revenue Code.Code as in effect during fiscal 2017. For that purpose, the Committee establishes a formula to determine a maximum amount that may be paid to each of our named executive officers. The Committee has the discretion to pay amounts to the named executive officers under the Management Incentive Plan that are less than the maximum Section 162(m) payouts.

In fiscal 2016,2017, the Committee determined the named executive officers’ cash incentive payouts using the framework set forth below (which was the same for the named executive officers as for all other participants in the Management Incentive Plan andBroad-Based Incentive Plan):

As an illustrative example, a participant with an annual base salary of $400,000,$500,000, a Participant Target % of 50% of base salary, and a Participant Performance Factor of 100% would have had an allocated cash incentive amount of $234,000$297,500 for fiscal 20162017 (compared to a target payout of $200,000)$250,000).

The Committee establishes the size of the cash incentive pool by determining theCompany Budget and Performance Factor, which is equal to the amount of the budgeted level of bonus pool funding in the fiscal year’s operating plan divided by the aggregate amount of plan participants’target-level awards multiplied by the extent to which Adjusted Revenue and Adjusted EBITDA targets, each equally weighted, are achieved. The table below illustrates this calculation for fiscal 2016. While the Adjusted Revenue performance metric ramps upward from “target,” the Committee designed the Adjusted EBITDA metric to be constant above target in order to promote strategic business investments throughout the year aimed at fueling future growth.2017.

In accordance with this calculation, a Company Budget and Performance Factor of 117%119% was applied to the cash incentive pool and uniformly affected payouts made to all participants in the Management Incentive Plan andBroad-Based Incentive Plan. This fiscal 20162017 Company Budget and Performance Factor was slightly higher than in fiscal 2015,2016, whenbelow-target above-target Company performance yielded a multiplier of 62.0%117%.

TheParticipant Performance Factor is a function of the extent to which individual performance goals are achieved. These goals can includeCompany-wide metrics as well as business unit metrics and goals that are highly specific to the functions over which the individual has primary responsibility. The CEO’s goals are established by the Committee after considering input from each outside director, and the CEO’s individual performance evaluation is completed annually by the Committee. Individual performance goals for the executive officers other than the CEO are established by the CEO, and evaluations for those executives are completed annually by the CEO and discussed with the Committee. If an executive receives the lowest performance rating on athree-point scale (“Improvement Needed”), his award will generally be reduced to zero. Conversely, if an executive receives the highest overall performance rating (“Outstanding”), his Participant Performance Factor could be as high as 200%. Distribution guidelines applicable to these performance ratings ensure that participants in theshort-term cash incentive program are not all rated on the high or low end of the scale, but are instead distributed above and below the target levels. Discretion can be exercised to make adjustments within the performance scale.

The Participant Performance Factor values for the named executive officers in fiscal 2016,2017, along with key factors considered by the Committee and the CEO, as applicable, in making these valuations, were as follows: