DEF 14A of Adobe Inc., Mar 3, 2023

DEF 14A of Adobe Inc.

Filed Mar 3, 2023 · FY20220000796343-23-000041

Open on EDGAR

  1. Digital Media

    Digital Media Digital Media is the combination of our Creative Cloud and Document Cloud business. In fiscal year 2022, we achieved Digital Media revenue of $12.84 billion, which represents 11% year-over-year growth. With Creative Cloud, we are Unleashing Creativity for creators of every skill level, giving them the tools to create, communicate, distribute and monetize their content. Content creation and consumption is exploding across every category, customer segment, surface, channel and media type. Our industry-leading applications, such as Photoshop, Lightroom, Illustrator, InDesign, Premiere Pro, After Effects and Substance 3D, continue to put us at the forefront of every creative category across imaging, photography, design, video, web and animation and 3D and immersive experiences. With newer offerings like Adobe Express, we are bringing the power and precision of our core products to deliver speed and ease to an even wider universe of customers. We are integrating collaboration workflows across our applications to enable customers to seamlessly co-create and manage reviews with a growing number of stakeholders. We are applying the power of our Adobe Sensei artificial intelligence (AI) and machine learning framework to help creators of all skill levels free themselves from mundane tasks and discover new superpowers. The total addressable market for Creative Cloud is projected to be approximately $63 billion in 2024. With Document Cloud, we are Accelerating Document Productivity across every device and platform as digital document workflows automate manual paper processes across our personal and professional lives. With trillions of PDFs in the world today, PDF has become the most ubiquitous file format. Our strategy to enable all common document actions, including editing, sharing, reviewing, scanning and signing across desktop, mobile and web is paying strong dividends. Our success converting the high volume of traffic and searches for PDF into Acrobat Web adoption continues to accelerate. We’re integrating value-added services like Adobe Sign and Share for Review across Acrobat surfaces and transforming Document Cloud into a multi-surface document ecosystem with deeper integrations across Creative Cloud and Experience Cloud. We are making PDF more intelligent with Adobe Sensei, automating workflows and enabling new levels of productivity for individuals, small businesses, nonprofits and enterprises. We are empowering developers to embed Adobe PDF and Sign capabilities into their existing products to unlock workflows through our APIs. The total addressable market for Document Cloud is projected to grow to approximately $32 billion by 2024.

  2. Our Board of Directors

    Our Board of Directors Our business is managed under the direction of our Board of Directors, which is currently composed of twelve members. Adobe’s stockholders elect our Board members annually. All of our current directors were elected by our stockholders, and all directors are serving a term that expires at the 2023 Annual Meeting. See the “Proxy Summary—Board Highlights” section for information on the composition of our Board. The following table highlights the number of our director nominees who share certain categories of attributes and experiences that uniquely qualify them to serve on our Board. We believe the diversity of experiences and qualifications represented by our directors is critical to Adobe’s success. We have narrowly tailored and defined these categories, although inclusion in certain categories will in many cases provide experience and expertise covered by other categories. For example, directors with Chief Executive Officer (“CEO”) experience will also have gained significant exposure to operational and regulatory issues.

  3. Our Board of Directors

    | Attributes and Experience of Director Nominees | | | | | | 12 | Executive Leadership | Directors who have served as a founder, CEO or CEO-equivalent, senior executive or business unit leader of a company with a deep understanding of company offerings and industry | | | 12 | Global Leadership | Directors with leadership experience in a global company overseeing non-U.S. operations, diverse economic landscapes and working with various cultures | | | 12 | Business Development & Strategy | Directors with expertise in strategic planning, mergers and acquisitions, growth strategies or business expansion | | | 3 | Technologist | Directors with extensive experience in software products, services, engineering or development, computer science, information technology, cybersecurity or technology research and development | | | 4 | Sales, Marketing & Brand Management | Directors with specific and extensive career experience focusing on sales management, marketing campaign management, marketing/advertising products and services or public relations | | | 11 | Finance or Accounting | Directors with a deep understanding of finance, accounting principles and methodologies, financial reporting, financial management, capital markets, financial statements, audit processes and procedures or internal financial controls | | | 5 | Legal or Regulatory | Directors with governmental policy, legal knowledge or experience with compliance and regulatory issues within a public company or a regulatory body, including any individual who has a CPA, JD or significant CFO experience | | | 12 | Operations | Directors having expertise in business operations management, supply chain management, integration or distribution | | | 8 | Public Company Board Service / Governance | Directors who currently serve, or have served, on other public company boards |

  4. Considerations in Evaluating Director Nominees

    Considerations in Evaluating Director Nominees The Board identified the following general criteria for consideration when evaluating Board member nominees and composition of the Board: •Exercises logical, thorough, objective, sound and rational judgment when representing the best interests of all Adobe stockholders •Possesses experience and expertise relevant to expanding the breadth of the Board’s collective knowledge, skill set and attributes •Demonstrates commitment to achieving Adobe’s long-term objectives by prioritizing and investing the attention necessary to fulfill Board membership-related duties, attendance obligations and responsibilities •Maintains and increases diversity in professional experience, personal experience, expertise, culture, race, ethnicity and/or gender among the Board members •Understands elements relevant to the success of a publicly-traded company, including the importance of best practices in corporate governance •Demonstrates integrity and ethics in such nominee’s personal and professional life

  5. Director Nominees

    Director Nominees for Election for a One-Year Term Expiring in 2024

  6. Director Nominees

    | Amy Banse | | | | Age: 63 Director since 2012. Other Public Company Boards: The Clorox Company Lennar Corporation On Holding AG | Committees: Executive Compensation (chair), Governance and Sustainability | | | | Biography: Ms. Banse is currently a partner at Mastry, Inc., an early stage venture capital firm. Previously, she held several roles at Comcast Corporation (“Comcast”), a global media and technology company, including Executive Vice President, Comcast Corporation, and Managing Director and Head of Funds, Comcast Ventures. Prior to that role, Ms. Banse was President of Comcast Interactive Media (“CIM”), a division of Comcast responsible for developing Comcast's online strategy and operating Comcast's digital properties, including Fandango, Xfinity.com and Xfinitytv.com. She joined Comcast in 1991 and spent the early part of her career at Comcast overseeing the development of Comcast's cable network portfolio. She received a B.A. from Harvard and a JD from Temple University School of Law. As the former Managing Director and Head of Funds for Comcast Ventures and Executive Vice President, Comcast Corporation, as well as her prior executive positions, including President of CIM, Ms. Banse has extensive executive leadership experience and extensive knowledge of financial and strategic issues. She also brings to the Board a deep expertise in global media and technology organizations in online business. | |

  7. Director Nominees

    | Brett Biggs | | | | Age: 54 Director since 2022. | Committees: Audit | | | | Biography: Mr. Biggs is the former Executive Vice President and Chief Financial Officer for Walmart Inc. In his role as Chief Financial Officer at Walmart Inc., in which he served from 2016 until June 2022, he was responsible for all finance functions as well as Global Procurement. Prior to the Chief Financial Officer role, Mr. Biggs held the roles of Chief Financial Officer for Walmart International, Walmart U.S. and Sam’s Club. Mr. Biggs also served as Senior Vice President for International Strategy, Mergers and Acquisitions and as Senior Vice President of Corporate Finance, as well as Senior Vice President of Operations for Sam’s Club. Before joining Walmart in 2000, Mr. Biggs held various M&A and corporate finance positions at Leggett & Platt, Phillips Petroleum Co. and Price Waterhouse. He holds a bachelor’s degree in accounting from Harding University and an MBA with Honors from Oklahoma State University. With his roles at Walmart and other prior executive positions, Mr. Biggs brings to the Board extensive executive experience and financial expertise, including in-depth knowledge of the complex financial and operational issues facing large global companies and an understanding of accounting principles and financial reporting rules and regulations. | |

  8. Director Nominees

    | Melanie Boulden | | | | Age: 50 Director since 2020. | Committees: Executive Compensation | | | | Biography: Ms. Boulden currently serves as Executive Vice President and Chief Growth Officer for Tyson Foods, Inc. responsible for all aspects of global brand marketing to foster the growth of the company’s portfolio of brands and products. Prior to her current role, from January 2021 to December 2022, Ms. Boulden was Chief Marketing Officer of the Coca-Cola North America responsible for a multibillion-dollar brand portfolio consisting of 20+ brands, including Coca-Cola, Sprite, smartwater and Minute Maid. Prior to becoming Chief Marketing Officer, Ms. Boulden was President of the Stills Business Unit at Coca-Cola North America from April 2020 to January 2021, leading the water, sports drinks, tea and coffee businesses, and was President and General Manager of Venturing and Emerging Brands from August 2019 to April 2020. Ms. Boulden also served as the Global Head of Marketing and Brand Management at Reebok from May 2018 to June 2019 and has held marketing and general management roles at Crayola, Kraft Foods and Henkel Consumer Goods. Ms. Boulden holds a B.S. in English from Iowa State University and an MBA with concentrations in marketing and finance from The University of Iowa. With her current role as Chief Growth Officer at Tyson Foods, Inc., together with her previous roles managing some of the world’s most well-known brands, Ms. Boulden brings to the Board extensive experience and deep expertise in global marketing and brand management. | |

  9. Director Nominees

    | Frank Calderoni Lead Director | | | | Age: 65 Director since 2012. Lead Director since 2020. Other Public Company Boards: Anaplan, Inc. (2017 to 2022) Palo Alto Networks, Inc. (2016 to 2019) | Committees: Governance and Sustainability (chair) | | | | Biography: Mr. Calderoni served as the Chairman and Chief Executive Officer of Anaplan, Inc., a planning and performance management platform provider, until June 2022. Prior to joining Anaplan in January 2017, he served as Executive Vice President, Operations and Chief Financial Officer at Red Hat, Inc. from June 2015 to December 2016. Until June 2015, he was an Executive Advisor at Cisco Systems, Inc. (“Cisco”), a designer, manufacturer and seller of IP-based networking and other products related to the communications and information technology industry. From 2008 to January 2015, Mr. Calderoni served as Executive Vice President and Chief Financial Officer at Cisco, managing the company's financial strategy and operations. He joined Cisco in 2004 from QLogic Corporation, a storage networking company where he was Senior Vice President and Chief Financial Officer. Prior to that, he was Senior Vice President, Finance and Administration and Chief Financial Officer for SanDisk Corporation, a flash data storage company. Before joining SanDisk, Mr. Calderoni spent 21 years at IBM, a global services, software and systems company, where he became Vice President and held controller responsibilities for several divisions within the company. Mr. Calderoni holds a B.S. in Accounting and Finance from Fordham University and an MBA in Finance from Pace University. As a result of his position at Anaplan, as well as his past service as chief financial officer of publicly traded global technology companies, Mr. Calderoni brings to the Board abundant financial expertise that includes extensive knowledge of the complex financial and operational issues facing large global companies and a deep understanding of accounting principles and financial reporting rules and regulations. He provides the Board with significant insight into the preparation of financial statements and knowledge of audit procedures. Through his senior executive positions, Mr. Calderoni has demonstrated his global leadership and business acumen. | |

  10. Director Nominees

    | Laura Desmond | | | | Age: 57 Director since 2012. Other Public Company Boards: DoubleVerify Holdings Inc. Capgemini SE (2019 to 2020) | Committees: Executive Compensation | | | | Biography: Ms. Desmond is currently Chief Executive Officer of Smartly.io, an advertising technology company. She is also the Founder and Chief Executive Officer of Eagle Vista Partners, a strategic advisory and investment firm focused on marketing and digital technology, and an Operating Partner in the Media & Technology Practice at Providence Equity Partners L.L.C., a private equity investment firm. Prior to this, she was the Chief Revenue Officer of Publicis Groupe, a group of global marketing, communication and business transformation companies from December 2016 to December 2017. From 2008 to December 2016 she was the Global Chief Executive Officer of Starcom MediaVest Group (“SMG”), a global marketing and media services company which is part of the Publicis Groupe. Prior to her appointment as Global Chief Executive Officer in 2008, Ms. Desmond was Chief Executive Officer of SMG - The Americas from 2007 to 2008 where she managed a network spanning the United States, Canada and Latin America. She was Chief Executive Officer of MediaVest, based in New York, from 2003 to 2007, and from 2000 to 2002 she was Chief Executive Officer of SMG's Latin America group. She holds a B.B.A. in Marketing from the University of Iowa. With her extensive experience as a strategist, consultant and investor working with global marketers, media companies and brands, including serving as Chief Revenue Officer of Publicis Groupe and Global Chief Executive Officer of SMG, Ms. Desmond brings to the Board a deep expertise in global media and marketing technology organizations, leadership capabilities and business acumen. In addition, her present and past service on other boards gives her valuable knowledge and perspective. As an expert in the marketing space, Ms. Desmond speaks frequently with Adobe’s management outside of scheduled board meetings to provide specific insight regarding Adobe’s Digital Experience business. | |

  11. Director Nominees

    | Shantanu Narayen Chairman | | | | Age: 59 Director since 2007. Chairman since 2017. Other Public Company Boards: Pfizer Inc. (lead independent director) | Committees: None | | | | Biography: Mr. Narayen currently serves as our Chief Executive Officer and Chairman of the Board. He joined Adobe in January 1998 as Vice President and General Manager of our engineering technology group. In January 1999, he was promoted to Senior Vice President, Worldwide Products, and in March 2001, he was promoted to Executive Vice President, Worldwide Product Marketing and Development. In January 2005, Mr. Narayen was promoted to President and Chief Operating Officer, and effective December 2007, he was appointed our Chief Executive Officer and joined our Board. In January 2017, he was named our Chairman of the Board. Mr. Narayen holds a B.S. in Electronics Engineering from Osmania University in India, an M.S. in Computer Science from Bowling Green State University and an MBA from the Haas School of Business, University of California, Berkeley. As our Chief Executive Officer, Chairman of the Board and as an Adobe employee for more than 20 years, Mr. Narayen brings to the Board extensive leadership and industry experience, including a deep knowledge and understanding of our business, operations and employees, the opportunities and risks faced by Adobe, and management’s current and future strategy and plans. In addition, his service on other boards gives him a strong understanding of his role as a director and a broad perspective on key industry issues and corporate governance matters. | |

  12. Director Nominees

    | Spencer Neumann | | | | Age: 53 Director since 2022. | Committees: Audit | | | | Biography: Mr. Neumann currently serves as the Chief Financial Officer for Netflix, Inc. Before joining Netflix, Mr. Neumann served as Chief Financial Officer for Activision Blizzard, Inc. from June 2017 to January 2019 and previously held several senior positions at The Walt Disney Company, including Chief Financial Officer and Executive Vice President of Global Guest Experience for Walt Disney Parks and Resorts from 2012 to 2017. Prior to that, he held roles at private equity firms Providence Equity Partners and Summit Partners. He holds a B.A. in Economics and an MBA from Harvard University. As a result of his position at Netflix, as well as his previous executive positions, Mr. Neumann brings to the Board extensive experience and financial expertise, including an in-depth knowledge of the complex financial and operational issues facing large global companies and a deep understanding of accounting principles and financial reporting rules and regulations. | |

  13. Director Nominees

    | Kathleen Oberg | | | | Age: 62 Director since 2019. | Committees: Audit (chair), Governance and Sustainability | | | | Biography: Ms. Oberg currently serves as Chief Financial Officer and Executive Vice President, Development for Marriott International, Inc. Beginning in 2013 and until January 2016, Ms. Oberg served as Chief Financial Officer for The Ritz-Carlton Hotel Company, L.L.C. From 2008 until she joined Ritz-Carlton in 2013, Ms. Oberg served as Marriott’s Senior Vice President, Corporate Development Finance and from 2006 to 2008, she served as Marriott’s Senior Vice President, International Project Finance and Asset Management for Europe, the Middle East and Africa, and as the senior finance executive for the region. Ms. Oberg’s career with Marriott began in 1999 where she served as a member of its Investor Relations group. Prior to initially joining Marriott, Ms. Oberg held various financial leadership positions with Sodexo, Sallie Mae Bank, The Goldman Sachs Group, Inc. and The Chase Manhattan Bank. Ms. Oberg holds a B.S. in Commerce with concentrations in Finance/Management Information Systems from the University of Virginia, McIntire School of Commerce and an MBA from the Stanford University Graduate School of Business. As a result of her position at Marriott and her past service in financial leadership positions, Ms. Oberg brings to the Board financial expertise, including an in-depth knowledge of financial reporting rules and regulations and accounting principles. Her deep understanding of the multifaceted financial and operational issues affecting large global organizations and leadership experience with development projects and merger and acquisition opportunities brings the Board and Audit Committee valuable insight into preparing long-range plans, annual budgets and capital allocation strategy. | |

  14. Director Nominees

    | Dheeraj Pandey | | | | Age: 47 Director since 2019. Other Public Company Boards: Nutanix, Inc. (2009 to 2020) | Committees: Audit | | | | Biography: Mr. Pandey is the Chairman and Chief Executive Officer of DevRev, Inc., a SaaS company that is focused on using AI and design to automate software and customer engineering workflows. Previously, he co-founded Nutanix, Inc. in 2009 and served as its Chief Executive Officer and as the Chairman of its board of directors until December 2020. Mr. Pandey also served as the President of Nutanix, Inc. from September 2009 until February 2016. Between September 2007 and September 2009, he served as Vice President (and Director) of Engineering at Aster Data Systems, Inc. (later acquired by Teradata Corporation), a data warehousing company. Prior to Teradata, Mr. Pandey served in software engineering roles at Oracle Corporation, Zambeel, Inc. and Trilogy Software, Inc. Mr. Pandey holds a Bachelor of Technology in Computer Science from the Indian Institute of Technology, Kanpur and a M.S. in Computer Science from the University of Texas at Austin. He was a Graduate Fellow of Computer Science in the University of Texas at Austin Ph.D. program. With his experience in the technology industry as a global executive leader and technologist, including co-founding and serving as Chief Executive Officer and Chairman of DevRev, Inc. and Nutanix, Inc. and as a software engineer at various companies over the course of nearly 20 years, Mr. Pandey brings to the Board engineering expertise, financial acumen, an in-depth understanding of the technology landscape and valuable insight on growing a company from a start-up to a publicly traded company. | |

  15. Director Nominees

    | David Ricks | | | | Age: 55 Director since 2018. Other Public Company Boards: Eli Lilly and Company (Chair) Elanco Animal Health, Inc. (2018 to 2019) | Committees: Executive Compensation | | | | Biography: Mr. Ricks currently serves as Chief Executive Officer of Eli Lilly and Company and became Chair of the Eli Lilly and Company board of directors in June 2017. Prior to January 2017, Mr. Ricks served as President of Lilly Bio-Medicines. From 2009 to 2012, he served as President of Lilly USA, LLC, Eli Lilly and Company’s largest affiliate. Mr. Ricks served as President and General Manager of Lilly China, operating in one of the world’s fastest-growing emerging markets, from 2008 to 2009. He was general manager of Lilly Canada from 2005 to 2008, after roles as Director of Pharmaceutical Marketing and National Sales Director in Canada. Mr. Ricks joined Eli Lilly and Company in 1996 as a Business Development Associate and held several management roles in U.S. marketing and sales before moving to Lilly Canada. Mr. Ricks earned a B.S. from Purdue University in 1990 and an MBA from Indiana University in 1996. As Chair and Chief Executive Officer of a large, innovation-focused, global company, Mr. Ricks brings to the Board executive leadership, marketing, sales and financial expertise, business acumen and relevant worldwide operational insight. | |

  16. Director Nominees

    | Daniel Rosensweig | | | | Age: 61 Director since 2009. Other Public Company Boards: Chegg, Inc. (Co-Chair) Rent the Runway Inc.* Time Inc. (2017 to 2018) | Committees: Governance and Sustainability | | | | Biography: Mr. Rosensweig is currently President, Chief Executive Officer and Co-chairman of the board of directors of Chegg.com, an online textbook rental company. Prior to joining Chegg.com in February 2010, Mr. Rosensweig served as President and Chief Executive Officer of RedOctane, a business unit of Activision Publishing, Inc., a developer, publisher and distributor of interactive entertainment and leisure products. Prior to joining RedOctane in March 2009, Mr. Rosensweig was an Operating Principal at the Quadrangle Group LLC, a private investment firm. Prior to joining the Quadrangle Group in August 2007, Mr. Rosensweig served as Chief Operating Officer of Yahoo! Inc., which he joined in April 2002. Prior to joining Yahoo!, Mr. Rosensweig was President of CNET Networks, Inc., an interactive media company, which he joined in October 2000. Mr. Rosensweig served for 18 years with Ziff-Davis, LLC, an integrated media and marketing services company, including roles as President and Chief Executive Officer of its subsidiary ZDNet, from 1997 until 2000 when ZDNet was acquired by CNET. Mr. Rosensweig holds a B.A. in Political Science from Hobart College. As a result of his current executive position at Chegg.com, as well as his former positions as a senior executive at global media and technology organizations, Mr. Rosensweig provides the Board with extensive and relevant executive leadership, worldwide operations and technology industry experience. | |

  17. Director Nominees

    | John Warnock Co-Founder | | | | Age: 82 Director since 1983. | Committees: None | | | | Biography: Dr. Warnock was a founder of Adobe and was our Chairman of the Board from April 1989 to January 2017. From September 1997 to January 2017, he shared the position of Chairman with the late Dr. Charles Geschke. Dr. Warnock served as our Chief Executive Officer from 1982 until December 2000. From December 2000 until his retirement in March 2001, Dr. Warnock served as our Chief Technical Officer. Dr. Warnock holds a Ph.D. in Electrical Engineering, an M.S. in Mathematics and a B.S. in Mathematics and Philosophy from the University of Utah. As a co-founder of Adobe and its former Chief Executive Officer, Chief Technical Officer and Chairman of the Board, Dr. Warnock has experience growing Adobe from a start-up to a large publicly traded company. His nearly 20 years of executive and technological leadership at Adobe provide the Board with significant leadership, operations and technology experience, as well as important perspectives on innovation, management development and global challenges and opportunities. As former Co-Chairman of the Board and Chairman of the board of Salon Media Group Inc., Dr. Warnock has a strong understanding of his role as a director and a broad perspective on key industry issues and corporate governance matters. | |

  18. Director Nominees

    * As reported on a Current Report on Form 8-K filed by Rent the Runway, Inc. on January 31, 2023, Mr. Rosensweig tendered his resignation from Rent the Runway’s Board of Directors to be effective as of April 1, 2023.

  19. Director Compensation for Fiscal Year 2022

    Director Compensation for Fiscal Year 2022 The following table sets forth information with respect to compensation awarded to, paid to or earned by each of Adobe’s non-employee directors during fiscal year 2022. As an employee director, Mr. Narayen does not receive compensation for service as a director. No stock options were granted to any directors during fiscal year 2022.

  20. Director Compensation for Fiscal Year 2022

    | Name | Fees Earned or Paid in Cash(1)(2) ($) | Stock Awards(3)(4) ($) | Total ($) | | John Warnock | 60,000 | 282,536 | 342,536 | | Amy Banse | 100,000 | 282,536 | 382,536 | | Brett Biggs(5) | 67,693 | 352,502 | 420,195 | | Melanie Boulden | 75,000 | 282,536 | 357,536 | | Frank Calderoni | 130,000 | 282,536 | 412,536 | | Laura Desmond | 75,000 | 282,536 | 357,536 | | Spencer Neumann(5) | 67,693 | 352,502 | 420,195 | | Kathleen Oberg | 110,000 | 282,536 | 392,536 | | Dheeraj Pandey | 80,000 | 282,536 | 362,536 | | David Ricks | 75,000 | 282,536 | 357,536 | | Daniel Rosensweig(6) | 71,127 | 282,536 | 353,663 |

  21. Director Compensation for Fiscal Year 2022

    _________________________ (1)Director fees were paid at the end of the quarter for which services were provided. (2)Mr. Biggs, Ms. Boulden, Mr. Calderoni, Ms. Desmond, Mr. Neumann, Mr. Pandey and Mr. Rosensweig each elected to defer all cash fees pursuant to Adobe’s Deferred Compensation Plan. For more information on this plan, see “Deferred Compensation Plan” below. (3)These amounts do not reflect the actual economic value realized by the director for these awards. In accordance with SEC rules, this column reflects the grant date fair value computed in accordance with the Financial Accounting Standards Board Accounting Standards Codification Topic 718 Compensation—Stock Compensation (“FASB ASC Topic 718”), disregarding estimates of forfeitures related to service-based vesting conditions. On January 7, 2022, Mr. Biggs and Mr. Neumann each received 137 RSUs with a grant date fair value of $510.70 per share for joining our Board, which fully vested on April 14, 2022. On April 14, 2022, each non-employee director received an annual grant of 672 RSUs with a grant date fair value of $420.44 per share, in accordance with the terms of the Board’s Fiscal Year 2021 and 2022 Non-Employee Director Compensation Policy (the “FY 2021 and FY 2022 Director Compensation Policy”) described below. As of 2022 fiscal year end, each non-employee director’s 672 RSUs remain unvested and outstanding. (4)Ms. Banse, Mr. Biggs, Ms. Boulden, Mr. Calderoni, Mr. Neumann, Mr. Pandey and Mr. Rosensweig each elected to defer 100% of their RSUs granted on April 14, 2022 pursuant to Adobe’s Deferred Compensation Plan. For more information on this plan, see “Deferred Compensation Plan” below. (5)Annual Board retainer and committee fees are prorated for Mr. Biggs and Mr. Neumann as they joined the Board effective January 7, 2022. (6)Committee fees for Mr. Rosensweig are prorated to reflect his transition from the Audit Committee to the Governance and Sustainability Committee effective January 14, 2022.

  22. 2023 Director Compensation

    2023 Director Compensation Following a review with Compensia of peer company board compensation trends in 2022, the Executive Compensation Committee recommended and our Board approved, effective December 3, 2022, the Fiscal Year 2023 and Fiscal Year 2024 Non-Employee Director Compensation Policy (the “FY 2023 and FY 2024 Director Compensation Policy”), consistent with the Board’s historical practice of approving a director compensation policy every two years. The FY 2023 and FY 2024 Director Compensation Policy increased the annual equity award value for fiscal years 2023 and 2024 from $300,000 to $315,000. Cash compensation remains the same for fiscal years 2023 and 2024 as in fiscal year 2022, except that our Lead Director’s annual retainer increased from $50,000 to $60,000 under the FY 2023 and FY 2024 Director Compensation Policy.

  23. Performance Share Program Changes

    Performance Share Program Changes Beginning in fiscal year 2022, in response to peer company practices and stockholder feedback that our Performance Share Program did not account for performance metrics that drive Adobe’s growth and value other than total stockholder return (“TSR”), the Committee approved the inclusion of a new financial metric in our Performance Share Program. In prior years, awards under our Performance Share Programs were solely based on total stockholder return (“TSR”) relative to companies in the Nasdaq 100 Index. The 2022 Performance Share Program has two separate equally weighted performance metrics: (1) relative TSR, measured over a three calendar year performance period and (2) a new financial Net New Sales metric that combines Digital Media net new annualized recurring revenue (“ARR”) and Digital Experience subscription revenue growth, measured over three consecutive fiscal years. The Committee added the Net New Sales metric to better align our NEOs’ financial incentives with the company’s financial performance, strategic priorities and objectives, including continued growth, and to allow the Committee to reward performance that may not be immediately reflected in the stock price. The Committee believes that annual performance goals under the Net New Sales metric, rather than a single goal for the entire three-year performance period, allows the Committee to set goals and measure performance in a manner that reflects the dynamic nature of our business and the company’s long-term trajectory over that three-year period. Together, the two metrics balance absolute performance (i.e., Net New Sales) with that of relative performance (i.e., TSR) to ensure that the company performs well relative to benchmark companies while also rewarding achievement of metrics that are strong indicators of the forward-looking health of Adobe’s business. The chart below shows the overlapping performance periods of the three Performance Share Programs active during fiscal year 2022 and the performance metrics and weighting applicable to each Performance Share Program.

  24. Performance Share Program Changes

    | | 2020 | 2021 | 2022 | 2023 | 2024 | | 2020 Performance Share Program | Relative TSR over 3 years (100%) | | | | | | | Vests after 3-year performance period | | | | | | | 2021 Performance Share Program | Relative TSR over 3 years (100%) | | | | | | | Vests after 3-year performance period | | | | | | | 2022 Performance Share Program(1) | Relative TSR over 3 years (50%) | | | | | | | Net New Sales over 1 year (16.67%) | Net New Sales over 1 year (16.67%) | Net New Sales over 1 year (16.67%) | | | | | Vests after 3-year performance period | | |

  25. Performance Share Program Changes

    (1) The Net New Sales goal is based on achievement determined and measured annually over each one-year period in three consecutive fiscal years, but no awards vest until the end of the full 3-year period. The TSR goal is based on achievement measured over a three calendar year period. The Committee will assess whether our NEOs achieve each performance metric independently of the other. In response to stockholder feedback and to better align executive pay with increasing stockholder value, the Committee also increased the target percentile rank needed for our CEO and other executive officers to realize 100% of the portion of their full award based on relative TSR performance from the 50th percentile to the 55th percentile among the companies included in the Nasdaq 100 Index. For further discussion of the 2022 Performance Share Program, see the section titled “Fiscal Year 2022 Compensation Program Design—Equity Incentives—2022 Performance Share Program” below.

  26. Cash Incentive Plan Changes

    Cash Incentive Plan Changes As in past years, awards under our annual, cash-based 2022 Executive Annual Incentive Plan (the “2022 Cash Incentive Plan”) are calculated based on (1) a corporate performance result, which is comprised of a financial performance result that the Committee may adjust up or down using a discretionary strategic performance adjustment, and (2) an individual performance result. Beginning in fiscal year 2022, the financial performance metric for the 2022 Cash Incentive Plan is based on GAAP revenue and non-GAAP EPS performance compared against our fiscal year 2022 operating plan (the “Operating Plan”) approved by our Board of Directors. The Net New Sales metric that was previously included in the financial performance result portion of our short-term Cash Incentive Plan was moved to our long-term Performance Share Program (as detailed in the section above). The Committee also increased the minimum GAAP revenue and non-GAAP EPS performance thresholds that must be achieved before any amounts are payable under the 2022 Cash Incentive Plan to 90% of target for fiscal year 2022 (up from 80% in fiscal year 2021) to add additional rigor and more closely align pay to performance. In fiscal year 2022, the Committee also added to each executive officer’s individual goals for determining their individual performance result a component focused on people, organization and culture, including diversity and inclusion. For more discussion of cash incentive awards, see the section titled “Fiscal Year 2022 Compensation Program Design—Cash Incentives” below.

  27. Summary of Changes

    | | 2021 Design | 2022 Design | | Long-Term Performance Share Program | Performance based on one metric: •relative TSR over a three-year performance period. | Performance based on two equally weighted metrics: •relative TSR over the three-year performance period; and •a Net New Sales metric, combining Digital Media net new ARR and Digital Experience subscription revenue growth compared against public guidance determined at the beginning of each fiscal year, over each of three one-year periods. | | Annual Cash Incentive Plan | Financial Performance Result determined by: •GAAP revenue and non-GAAP EPS performance against the fiscal year Operating Plan targets; and •a Net New Sales metric comprised of net new Digital Media ARR and subscription revenue growth in Digital Experience, as set forth in the Operating Plan. | Financial Performance Result determined by: •GAAP revenue and non-GAAP EPS performance against the fiscal year Operating Plan targets. |

  28. Compensation Approach in Fiscal Year 2023

    Compensation Approach in Fiscal Year 2023 In addition to taking stockholder feedback into account, the Committee evaluated a number of other factors discussed below in making decisions about our executive compensation approach. The Committee believes that both the cash incentive and equity compensation programs are creating the desired pay-for-performance incentives, and that these incentives have been driving the intended outcomes. As a result, the Committee determined not to make any significant design changes to our cash incentive plan and long-term equity compensation program for fiscal year 2023. In response to feedback from Compensia about market trends, for fiscal year 2023, the Committee approved annual RSU awards to our executive officers that vest quarterly over four years, rather than 25% on the first anniversary of the vesting commencement date and 6.25% quarterly thereafter. This revised vesting schedule applies to all annual RSUs granted to Adobe employees. Additional information regarding our fiscal year 2023 executive compensation programs is available in our Current Report on Form 8-K filed with the SEC on January 26, 2023.

  29. Continued Emphasis on Pay for Performance

    Continued Emphasis on Pay for Performance Approximately 88% of our CEO’s target total direct compensation in fiscal year 2022 was comprised of long-term equity awards, a substantial percentage (70%) of which is performance-based. The remaining awards granted are time-based RSUs that vest according to a four-year vesting schedule. Unless we achieve the target goals for the performance share awards, including a 55th-percentile relative TSR rank over the three-year performance period of the Performance Share Program, our CEO and other executive officers will not realize the full intended value of their long-term incentive compensation. Even if we achieve 100% of public guidance for Net New Sales, our CEO and other executive officers will only receive 90% of the target shares related to the Net New Sales metric. Further, because Adobe common stock underlies our equity-based compensation awards, the immediate value of these awards is subject to fluctuations in our stock price, strongly aligning the interests of our executive officers, including our CEO, with those of our stockholders. Our pay-for-performance philosophy is reflected in the pie charts below, which depict the composition of our CEO and other NEOs’ target total direct fiscal year 2022 compensation:

  30. CEO and Other NEOs’ Target Pay Mix(1)

    CEO and Other NEOs’ Target Pay Mix(1) (1) The mechanism for calculating target equity award values is described in detail under “Equity Incentives—Equity Compensation Mix.” The amounts shown for all other NEOs represent their average target pay mix. For the actual grant date fair value of equity awards, computed in accordance with stock-based compensation accounting principles, please see “Executive Compensation—Summary Compensation Table” as well as related discussion about the calculation of such amounts set forth below under “Accounting and Tax Considerations.”

  31. Executive Compensation Policies and Practices

    | What we do | | What we don’t do | | | ü | Our executives officers’ total compensation is designed to pay for performance and is comprised of elements that address both short-term and long-term financial performance, with appropriate caps on maximum amounts payable. | û | Our Insider Trading Policy, which applies to all employees, officers and directors, prohibits transactions involving pledging, hedging or short sales of Adobe equity. | | ü | Our Compensation Committee engages its own independent compensation consultant to advise on executive and non-employee director compensation matters. | û | We do not provide golden parachute excise tax gross-up payments. | | ü | Our Compensation Committee reviews the composition of our compensation peer group annually and makes adjustments to the composition of that peer group, if deemed appropriate. | û | We do not provide defined benefit pension plans, supplemental executive retirement plans or retiree health benefits for our executive officers. | | ü | We conduct an annual advisory vote on the compensation of our NEOs. | û | Our equity plans do not include an evergreen feature that would automatically replenish the shares available for issuance. | | ü | Our Compensation Committee is comprised 100% of independent directors. | | | | ü | We have a clawback policy for performance-based incentive compensation of our executive officers. | | | | ü | We have robust stock ownership requirements for our directors and officers at the senior vice president level and above. | | |

  32. The Role of the Compensation Consultant

    The Role of the Compensation Consultant The Committee engaged Compensia, Inc. as the Committee’s independent compensation consultant to review and provide independent advice concerning all of the components of Adobe’s executive compensation programs, on account of Compensia’s expertise in the software industry, its knowledge of our peer group and its geographical proximity. Compensia provided the following services on behalf of the Committee during fiscal year 2022: (1) reviewed and provided recommendations on the composition of our peer group and provided compensation data relating to executives at the selected companies in our peer group; (2) conducted a comprehensive review of the total compensation arrangements for all of our executive officers; (3) provided advice on our executive officers’ compensation; (4) assisted with executive equity program design, including analysis of equity mix, target grant levels and our 2022 Performance Share Program design; (5) assisted with development of our fiscal year 2022 Cash Incentive Plan; (6) provided updates on say-on-pay results and regulatory developments; (7) updated the Committee on emerging trends and best practices in the area of executive and director compensation; (8) conducted a detailed aggregate equity utilization survey relative to peer company practices; (9) conducted a comprehensive review of the total compensation arrangements for the non-employee members of the Board relative to peer companies and market best practices; and (10) reviewed the Compensation Discussion and Analysis for inclusion in our 2022 proxy statement. Our Employee Experience, Finance and Legal departments work with our CEO and Compensia to design and develop new compensation programs applicable to our NEOs and other executive officers, to recommend changes to existing compensation programs, to recommend financial and other performance targets to be achieved under those programs, to prepare analyses of financial data, to prepare peer group compensation comparisons and other Committee briefing materials and, ultimately, to implement the decisions of the Committee. Members of these departments and our CEO also meet with Compensia separately from the Committee to convey information on proposals that management may make to the Committee, as well as to allow Compensia to collect information about Adobe to develop its own proposals. The Committee conducted a formal review of Compensia’s independence and is satisfied with the qualifications, performance and independence of Compensia. The Committee also determined that the work of Compensia did not give rise to any conflict of interest. Other than providing limited guidance to our Employee Experience department regarding Adobe’s broad-based equity compensation design for all employees (as approved by the Committee), Compensia does not provide any other services to Adobe. Adobe pays for the cost of Compensia’s services.

  33. The Role of Peer Companies

    The Role of Peer Companies The Committee regularly reviews relevant market and industry practices on executive compensation. They do so to balance our need to compete for talent with the need to maintain a reasonable and responsible cost structure while aligning our executive officers’ interests with those of our stockholders. Each year, to assist the Committee in its deliberations on executive compensation, the Committee reviews and updates our list of peer companies used as points of comparison, as necessary, to ensure that the comparisons are meaningful. These peer companies are technology companies at which our NEOs’ positions would be analogous in scope and complexity, which operate in similar or related businesses to Adobe and with which Adobe competes for talent. In July 2021, the Committee, with input from management and Compensia, expanded our peer group for fiscal year 2022 and updated the revenue and market capitalization criteria to include both several larger companies as well as several smaller, emerging, high growth companies. The following table shows the updates to the criteria Compensia used to provide recommendations on the composition of our compensation “peer group” and changes compared to our criteria for fiscal year 2021:

  34. The Role of Peer Companies

    | | FY 2021 Criteria | FY 2022 Criteria | | Ownership | Public | Public | | Industry | Global U.S.-based or U.S.-listed multi-faceted software/Internet company | Global U.S.-based or U.S.-listed multi-faceted software/Internet company | | Revenue | ~0.5x to ~2.0x of Adobe | ~0.33x to ~3.0x of Adobe | | Market Cap | ~0.33x to ~3.0x of Adobe | ~0.25x to ~10.0x of Adobe | | Refinement Considerations | •profit margin within 0.5x to 2.0x of Adobe •comparable headcount •positive revenue growth •stockholder advisory firm names company as Adobe’s peer •companies naming Adobe as a peer | •talent competitors •positive revenue growth •companies naming Adobe as a peer |

  35. The Role of Peer Companies

    The updated peer group approved by the Committee for fiscal year 2022 is listed below.

  36. The Role of Peer Companies

    | Peer Group for Fiscal Year 2022 | | | | Activision Blizzard, Inc. | Alphabet Inc.* | Amazon.com, Inc.* | | Apple Inc.* | Autodesk, Inc. | Cisco Systems, Inc.* | | Docusign, Inc.* | Intuit Inc. | Meta Platforms, Inc.* | | Microsoft Corporation* | Netflix, Inc. | NVIDIA Corporation | | Oracle Corporation | PayPal Holdings, Inc. | salesforce.com, inc. | | SAP SE | ServiceNow, Inc. | Twilio Inc.* | | Twitter, Inc.* | VMware, Inc. | Workday, Inc.* |

  37. The Role of Peer Companies

    ________________________ * Added for fiscal year 2022. As a result of the foregoing criteria adjustments, eBay Inc., Electronic Arts Inc. and Booking Holdings Inc. were removed from the updated peer group. Compensia prepares a compensation analysis compiled from both executive compensation surveys and data gathered from publicly available information for our peer group companies. The Committee uses this data to compare the current compensation of our NEOs to that of the peer group and to determine the relative market value for each NEO position. However, compensation is not set at any particular target of compensation at the peer companies, but is rather used by the Committee for comparison purposes to inform its decisions.

  38. Compensation Elements and Objectives

    | | | Objectives | | | | Compensation Element | Description | Attract/Retain Key Performers | Reward Short-Term Performance | Reward Long-Term Performance | | Base Salary | Base salary provides market competitive compensation in recognition of role and responsibilities. | ü | | | | Annual Cash Incentives | Cash incentives are earned in full or in part only if (1) we achieve certain pre-established one-year company performance targets, (2) the recipient achieves individual performance levels or objectives and (3) the recipient remains employed with Adobe through the achievement certification date. | ü | ü | | | Long-Term Equity Incentives | Equity incentives are awarded upon hire and then typically annually thereafter. Awards are both performance-based and time-based, each vesting over multiple years, aligning employee interests with stockholder interests. | ü | | ü | | Employee Benefits and Limited Perquisites | Benefits programs for all eligible Adobe employees provide protection for physical, emotional and financial well-being. | ü | | |

  39. Compensation Elements and Objectives

    In setting the mix among the different elements of executive compensation, we do not target specific allocations, but generally emphasize performance-based compensation, both cash and equity. The total target cash compensation opportunity (base salary and target cash incentives) represents less of our executive officers’ total target compensation than the total target equity compensation opportunity. Our allocation between cash and equity reflects our belief that a significant portion of our NEOs’ compensation should be based on company and individual performance, as well as NEO service requirements, to increase alignment with our stockholders’ interests and motivate performance that creates sustainable long-term stockholder value. Since our actual performance can deviate from the predetermined target goals, our cash incentive opportunities and equity incentive awards have both upside opportunities and downside risks and the amount of compensation actually earned will likely differ from the target allocations. The percentage of “at risk” pay for Adobe’s management and other employees generally increases with job responsibility, reflecting our view of internal pay equity and the ability of a given employee to contribute to our results. We also generally align our compensation strategy with the practices of our peer group when possible and to the extent consistent with our business model. Our executive compensation programs focus on linking pay to performance and reinforcing the alignment of our executive officers’ interests with those of our stockholders. If results do not meet our expectations, our NEOs will receive compensation that is below target levels and may be below market in comparison to our peer group. Similarly, when superior results are achieved, our NEOs may receive compensation that is above target levels and above market. For more information, see the section titled “Fiscal Year 2022 Compensation Program Decisions and Results—Realizable Pay” below. The fiscal year 2022 target total direct compensation (base salary, target cash incentives and target equity value) (“TDC”) for each of our NEOs was set by the Committee based on a number of factors, including: competitive pay practices reflected in the peer group data; each executive officer’s contribution to Adobe; company and individual performance; anticipated future contributions; internal pay equity; pay trends; and historical pay levels. The Committee also reviewed the positioning of the total target cash and target equity elements of compensation against levels at our peer companies, but these individual elements of NEO compensation may vary based on the importance of the other factors noted above in any given year with respect to any given NEO. Because our fiscal year begins earlier than most of our peer companies, our target TDC attempts to anticipate what the competitive compensation positioning for each role will be for the coming fiscal year.

  40. Cash Incentives

    Cash Incentives

  41. Annual Cash Incentive Plan

    Annual Cash Incentive Plan In fiscal year 2022, our 2022 Cash Incentive Plan continued to be designed to align our NEOs’ annual cash incentives with the company’s financial performance. The Committee set the target annual cash incentive opportunity (expressed as a percentage of base salary) for each NEO early in the fiscal year. In setting the target levels, the Committee considered each NEO’s fiscal year 2022 target total cash opportunity against the peer group data provided by its independent compensation consultant, internal pay equity and the roles and responsibilities of each NEO. The Committee set the fiscal year 2022 target annual cash incentive opportunity for each NEO at the same percentage as their target opportunity for fiscal year 2021, as each of their target opportunities remained in our target range when compared with our peers. The maximum award for each participant is subject to adjustment based on our performance against our corporate priorities and objectives, as well as the individual’s performance against goals tailored to each executive participant. Two threshold goals set forth below must first be met before our NEOs are eligible to receive any cash incentive amounts under the 2022 Cash Incentive Plan. To earn any award, the company must first achieve two threshold goals: (1) exceed 90% of its annual GAAP revenue target and (2) exceed 90% of its annual non-GAAP EPS target, each as set forth in our Operating Plan. The dollar value of each participant’s award is calculated according to the below formula: ________________________ * Ranges from 0% to 150% ** Capped at 100% of target in the event the Financial Performance Result is below 90%. To earn any award, the company must achieve the two threshold goals set forth above. Corporate Performance Result The “Corporate Performance Result” (expressed as a percentage) is based on (1) the financial performance of the company in fiscal year 2022 (the “Financial Performance Result”) and (2) a discretionary strategic performance adjustment of up to 25 percentage points up or down based on the Committee’s assessment of the company’s performance against its corporate priorities and objectives during the performance period (the “Strategic Performance Adjustment”). The Financial Performance Result is based on our GAAP revenue and non-GAAP EPS performance against the Operating Plan targets for fiscal year 2022. The Committee and the company’s management believe that our Financial Performance Result metrics are strong indicators of the forward-looking health of Adobe’s business. A table showing the relationships between financial performance, as a percentage of the Operating Plan targets, and the funding results under the 2022 Cash Incentive Plan can be found in Exhibit 10.4 to the Current Report on Form 8-K Adobe filed with the SEC on January 27, 2022. Individual Performance Result The “Individual Performance Result” (expressed as a percentage ranging from 0% to 150%) is based on the Committee’s assessment of each participant’s individual performance including, without limitation, achievement of individual goals set by the Committee at the outset of the fiscal year relating to (1) strategy, innovation and execution; and (2) our people, organization and culture, including diversity and inclusion. The individual goals were selected by the Committee in consultation with our CEO (other than with respect to his own goals) at the outset of fiscal year 2022, and the Committee reviewed the achievement of such individual goals for each NEO to determine the NEO’s Individual Performance Result. For our CEO and other NEOs, the individual goals for fiscal year 2022 are also shown in the table below and were specifically tailored to the functions led by each NEO and aligned to the achievement of our overall Operating Plan.

  42. Annual Cash Incentive Plan

    | Executive Officer | Individual Performance Goals | | Shantanu Narayen | Drive growth and innovation for key strategic initiatives across Creative Cloud, Document Cloud and Digital Experience; drive strategies for new markets, technologies and categories; and focus on leadership bench, diversity and inclusion, and company culture. | | Daniel Durn | Drive strategic planning for Creative Cloud, Document Cloud and Digital Experience, including inorganic growth; improve operating velocity and planning agility; focus on leadership bench, diversity and inclusion, and company culture. | | Anil Chakravarthy | Drive critical product initiatives for Digital Experience, Adobe Experience Platform and connected applications; execute go-to-market strategies across solution and industry sales; develop leadership bench, increase diversity and invest in a culture of feedback. | | David Wadhwani | Drive critical product initiatives for Creative Cloud, Adobe Express and Document Cloud; execute go-to-market strategies focused on PLG, engagement and retention; develop leadership bench, increase diversity and invest in a culture of feedback. | | Scott Belsky | Execute critical product initiatives for Creative Cloud and Adobe Express; drive new categories including Frame.io and 3D and immersive; develop leadership bench, increase diversity and invest in a culture of feedback. |

  43. Annual Cash Incentive Plan

    Calculation of Awards Once each component described above is certified by the Committee, the award earned by each participant is determined using the formula above, provided that in no event will a participant’s award exceed 100% of the participant’s individual target award if the Financial Performance Result is not at least 90%. The Committee also determined that company performance must exceed 90% of our annual GAAP revenue target and 90% of our non-GAAP EPS target, each as set forth in the Operating Plan, in order for a participant in the 2022 Cash Incentive Plan to be eligible to earn any annual cash incentive award. If these thresholds are met, each participant would be eligible to earn a maximum award of up to 200% of the participant’s target annual cash incentive opportunity, based on performance results. Amounts paid under the 2022 Cash Incentive Plan are subject to recoupment from participants in accordance with our Clawback Policy. Fiscal year 2022 results and payouts are set forth below under “Fiscal Year 2022 Compensation Decisions and Results—Cash Incentives.”

  44. Other Cash Incentives

    Other Cash Incentives From time to time, the company may grant one-time signing bonuses to certain executive officers, in recognition of the need to attract top talent for key executive roles.

  45. Equity Incentives

    Equity Incentives

  46. Goals of Equity Compensation

    Goals of Equity Compensation We use equity compensation to motivate and reward strong corporate performance and to retain valued employees. We also use equity incentive awards as a means to attract and recruit qualified individuals. We believe that equity awards serve to align the interests of our NEOs with those of our stockholders by rewarding them for growing the value of the company.

  47. Equity Compensation Mix

    Equity Compensation Mix For our fiscal year 2022 equity program established in January 2022, the Committee continued to differentiate between the CEO target mix of equity incentive awards and that of our other NEOs, with the target mix of ongoing annual equity incentive awards to our CEO continuing to consist of 70% performance share awards and 30% time-based RSUs in order to align our CEO closely with the interests of our stockholders by having a large proportion of his target TDC vary with company performance. The target mix of equity incentive awards to our other NEOs also remained unchanged for fiscal year 2022 at 50% performance share awards and 50% time-based RSUs. The Committee determined that this mix of equity compensation would appropriately balance and meet our compensation objectives, as described in the table below. The Committee calculated the target values for equity awards to achieve this desired mix, based on a price of $515.79 per share, the trailing 10-day average of the closing price per share of our common stock as of January 21, 2022, the period just prior to the Committee’s approval of the equity compensation award recommendations. Based on this price per share, the total desired number of targeted shares was determined and then split, as applicable, between performance shares and time-based RSUs, each rounded up to the nearest whole share.

  48. Fiscal Year 2022 Mix of Annual Equity Incentive Awards

    Fiscal Year 2022 Mix of Annual Equity Incentive Awards

  49. Fiscal Year 2022 Mix of Annual Equity Incentive Awards

    | Type of Equity (Allocation Percentage) | Description | Objectives/Dilutive Effect | Vesting(1) | | Performance Share Awards (CEO ~70%, Other NEOs ~50%) | Stock-settled awards subject to performance- and time-based vesting conditions; three-year cliff performance period determines the total number of shares earned, with significant benefits for overachievement and significant consequences for underachievement, including the potential for no award being earned; no purchase cost to executive, so awards always have value if earned | Focus NEOs on both (i) a three-year performance goal tied to long-term stockholder returns and (ii) annual Net New Sales metrics, while also providing a strong retention incentive, requiring continuous employment to vest; provide significant incentive to grow our stock price and achieve revenue growth; and use fewer shares than stock options, so less dilutive | Performance shares vest upon the certification of all performance results following a three-year performance period | | Time-Based RSUs (CEO ~30%, Other NEOs ~50%) | Stock-settled awards subject to time-based vesting conditions; no purchase cost to executive, so awards always have value, if earned | Provide a strong incentive for our NEOs to remain employed with us, as they require continuous employment while vesting; provide moderate reward for growth in our stock price; and use fewer shares than stock options, so less dilutive | Vest over a period of four years; specifically, 25% on the first anniversary of the vesting commencement date and 6.25% quarterly thereafter for the remaining three years |

  50. Fiscal Year 2022 Mix of Annual Equity Incentive Awards

    (1) Our NEOs’ equity awards are also subject to certain accelerated vesting provisions as described under “Severance and Change of Control Compensation” and “Executive Compensation—Grants of Plan-Based Awards in Fiscal Year 2022—Narrative Summary to Summary Compensation Table and Grants of Plan-Based Awards in Fiscal Year 2022 Table—Effect of Death and Disability on Equity Compensation Awards.”

  51. 2022 Performance Share Program

    2022 Performance Share Program Shares may be earned under the 2022 Performance Share Program based on the achievement of both (1) objective relative TSR (the “TSR Goal”) and (2) a Net New Sales goal (the “Net New Sales Goal”). Each performance goal is weighted 50% and achievement of each goal is determined independently of the other. Participants can earn between 0% and 200% (the payout cap under the program) of the total target number of performance shares granted to them under the 2022 Performance Share Program. TSR Goal Achievement of the TSR Goal is based on the TSR of our common stock during a three-year performance period, comprised of calendar years 2022 through 2024, compared to that of companies that comprise the Nasdaq 100 Index as of January 1, 2022 (the “Index Companies”). The TSR of Adobe and each Index Company will first be measured as the 90 consecutive calendar day average closing sales price for the period ending on, and including, December 31, 2021 and then compared with the 90 consecutive calendar day average closing sales price for the period ending on, and including, December 31, 2024. No shares under the TSR goal will be awarded if Adobe’s TSR performance ranks below the 25th percentile for the performance period. Additionally, regardless of Adobe’s position with respect to the Index Companies, each NEO’s award with respect to the TSR Goal will be capped at 100% of target if Adobe has a negative absolute TSR over the performance period. This TSR metric creates accountability since the payout depends upon our stockholder return exceeding the stockholder return of other companies in the Nasdaq 100 Index, which the Committee and Adobe’s management believe represent the most relevant market benchmark for Adobe’s performance. The number of performance shares earned with respect to the TSR Goal is calculated based on the formula below, and will decrease by 2.07% for every percentile that Adobe’s TSR percentile rank is below the 55th percentile of the Index Companies, subject to the limitations in the chart below. The number of performance shares earned will increase by 2.86% for each percentile that Adobe’s TSR percentile rank is above the 55th percentile of the Index Companies, subject to the limitations in the chart below.

  52. 2022 Performance Share Program

    | Company Percentile Rank as Compared to Index Companies | Shares of Stock That May Be Earned as a Percentage of Target Shares (“Percentage Payout”) | | Below 25th (1) | 0% | | 25th | 38% | | 35th | 59% | | 55th (Target Percentile) | 100%(2) | | 75th | 158% | | 90th | 200%(3) | | 100th | 200% |

  53. 2022 Performance Share Program

    _________________________ (1) A threshold percentile rank of 25% is required before any performance shares can be earned. (2) The maximum number of performance shares that may be earned at the 55th percentile or higher is capped at 100% of target if Adobe’s absolute TSR is negative. (3) The maximum shares that may be earned is 200% of target, if Adobe’s absolute TSR is positive. Net New Sales Goal Achievement of the Net New Sales Goal is based on (1) net new annualized recurring revenue (“ARR”) in Digital Media and (2) subscription revenue growth in Digital Experience, determined and measured annually over a three-year performance period comprised of our fiscal years 2022 through 2024. The Net New Sales Goal will be determined annually by the Committee for each fiscal year in the performance period, and the level of achievement of the goal will be certified by the Committee following the applicable fiscal year. However, no amount certified as earned will be vested or payable until after the full three-year performance period has concluded. As described in our Annual Report on Form 10-K for the fiscal year ended December 2, 2022, we define Digital Media ARR as the sum of Creative ARR and Document Cloud ARR. We define Creative ARR as the sum of: (a) the annual value of Creative Cloud subscriptions and services, plus (b) the annual contract value of Creative Enterprise Term License Agreements. We define Document Cloud ARR as the sum of: (a) the annual value of Document Cloud subscriptions and services, plus (b) the annual contract value of Document Cloud Enterprise Term License Agreements. To earn any shares based on the Net New Sales metric, the company must either meet or surpass 70% of the public guidance provided at the beginning of the respective fiscal year. To align with market practice and better assess performance against Net New Sales targets, the Committee amended the 2022 Performance Share Program in January 2023 to provide that adjustments will automatically be made to the calculation of the Net New Sales metric for fiscal years 2023 and 2024 as the result of material mergers and acquisitions and foreign currency fluctuations, whether the impact is positive or negative. The exclusion of foreign currency exchange rate fluctuations is consistent with how we report ARR results which are based on currency rates set at the beginning of the fiscal year and held constant throughout the year for measurement purposes. Achievement of the Net New Sales Goal for fiscal year 2022 is calculated based on the following chart, which is set by the Committee each year, with interpolation applying for amounts falling within the percentages below. One-third of the total target shares attributable to the Net New Sales Goal can be earned for any single fiscal year in the performance period, based on the following chart (i.e., approximately 16.67% of the total target shares granted under the 2022 Performance Share Program to an NEO can be earned under the Net New Sales Goal for each fiscal year in the performance period, but any such shares will only be paid upon vesting after the third anniversary of the grant date):

  54. 2022 Performance Share Program

    | Net New Sales as a Percentage of Target for Fiscal Year 2022 (1) | Shares of Stock That May Be Earned for Fiscal Year 2022 (as a Percentage of Target Shares under the Net New Sales Goal applicable to each fiscal year) (“Percentage Payout”) | | Below 70% | 0% | | 75% | 15% | | 100% | 90% | | 150% | 200%(2) |

  55. 2022 Performance Share Program

    (1) Target is based on public guidance for the fiscal year. Percentages will be rounded to the nearest tenth of a percentile level. (2) The maximum shares that may be earned under the Net New Sales Goal in a fiscal year is 200% of target. Vesting and Payout The Committee will certify the actual performance achievement of each Net New Sales Goal after each fiscal year and will certify achievement of the TSR Goal after the end of the three calendar-year performance period for that goal. Earned performance shares will vest after the full three-year performance period has concluded. Accordingly, the performance shares align our NEOs’ interests with those of our stockholders over the long term while also providing key retention incentives, as the shares will only be awarded if an NEO continues to provide services to Adobe (or an affiliate) until the applicable vesting date. Moreover, the design of our Performance Share Program will strengthen our retention incentives for executive officers at times when the company is generating favorable stockholder returns and achieving financial goals that support our long-term corporate priorities. The Committee believes in the importance of balancing absolute performance (i.e., Net New Sales) with that of relative performance (i.e., TSR) to ensure that the company performs well relative to benchmark companies while also rewarding achievement of metrics that are strong indicators of the forward-looking health of Adobe’s business. Progress on the 2022 Performance Share Program is set forth below under “Fiscal Year 2022 Compensation Decisions and Results—Progress on 2022 Performance Share Program.”

  56. 2022 RSU Program

    2022 RSU Program Recognizing that a substantial portion of our NEOs’ compensation is performance-based, the Committee grants time-based RSUs to our NEOs in order to satisfy our retention objectives and promote continuity in our business. The RSUs granted in 2022 vest 25% on the one-year anniversary of the vesting commencement date and then 6.25% quarterly thereafter for the remaining three years of the award. Accordingly, our RSU program provides our NEOs with strong incentives to remain employed by Adobe, while providing additional rewards for growth in our stock price with less dilution to the company than time-based stock options, which were not granted by Adobe to any executive officer in fiscal year 2022.

  57. Base Salary

    Base Salary For fiscal year 2022, the Committee reviewed the base salaries of our NEOs, comparing their salaries to the base salary levels at the companies in our peer group, as well as considering the roles and responsibilities, performance and potential performance of the NEOs and their mix of other compensation elements (cash and equity incentives). The Committee increased Mr. Narayen’s base salary by $500,000 after a competitive market review of his role to better align his compensation with peer companies and in recognition of his contributions to the company over many years. This was Mr. Narayen’s first base salary increase since fiscal year 2016. Mr. Belsky’s base salary was increased to align his compensation with peer companies. The salary adjustments for Messrs. Narayen and Belsky became effective February 7, 2022. The Committee did not increase the salaries for Messrs. Durn, Chakravarthy and Wadhwani as the Committee continued to believe that they were appropriate given each individual’s role, capabilities and experience.

  58. Cash Incentives

    Cash Incentives

  59. Annual Cash Incentive Plan

    Annual Cash Incentive Plan At the outset of fiscal year 2022, the Committee approved the 2022 Cash Incentive Plan to drive revenue growth and profitability, encourage accountability, drive execution of short-term priorities tied to long-term strategy and annual operating plan objectives and recognize and reward the company’s executive officers upon the achievement of certain objectives. The Committee set threshold, target and maximum performance levels for these goals that were based on the Operating Plan. In fiscal year 2022, we achieved $17.61 billion of revenue and diluted earnings per share of $10.10 on a GAAP basis, and $13.71 on a non-GAAP basis, exceeding both threshold levels. (See Annex A for a reconciliation of GAAP diluted EPS to non-GAAP diluted EPS.) According to the matrix included as Exhibit A to the 2022 Cash Incentive Plan, as set forth in Exhibit 10.4 to our Current Report on Form 8-K filed with the SEC on January 27, 2022, the GAAP revenue and non-GAAP EPS performance resulted in a Financial Performance Result of 85%. The Committee applies a high degree of rigor when deciding to make a Strategic Performance Adjustment. In recent years, the Committee has only made downward adjustments, and made downward adjustments both for fiscal year 2021 last year and fiscal year 2019. However, due to the unusual macroeconomic conditions we experienced in fiscal year 2022, the Committee elected to exercise its discretion as permitted under the terms of the 2022 Cash Incentive Plan to make an upward Strategic Performance Adjustment for each of our NEOs. This upward adjustment was made to account for the impact of external factors, such as foreign exchange rates, tax rates and changes in macroeconomic conditions, the same factors that guided our downward adjustment last year. The Strategic Performance Adjustment for fiscal year 2022 resulted in a Corporate Performance Result of 95%. The Committee monitored each NEO’s performance on a periodic basis during the year and measured total achievement at year end. Based on the Committee’s assessment of each NEO’s individual performance during the fiscal year, including progress against the individual goals shown above, the Committee determined the individual performance assessment for the participants as shown in the table below.

  60. Annual Cash Incentive Plan

    | Name | Individual Performance Result | Corporate Performance Result | | Actual Award Payout (% of Target Award) | | Shantanu Narayen | 100%x | 95% | = | 95% | | Daniel Durn | 100%x | 95% | ‘= | 95% | | Anil Chakravarthy | 100%x | 95% | = | 95% | | David Wadhwani | 100%x | 95% | = | 95% | | Scott Belsky | 100%x | 95% | = | 95% |

  61. Annual Cash Incentive Plan

    The following table shows the calculation of the individual cash bonuses awarded by the Committee based on the formulas set forth above:

  62. Fiscal Year 2022 Cash Incentive Plan Bonus

    Fiscal Year 2022 Cash Incentive Plan Bonus

  63. Fiscal Year 2022 Cash Incentive Plan Bonus

    | Name | Weighted Base Salary(1) ($) | Target Cash Incentive (%) | Target Cash Incentive ($) | Actual Award Payout (%) | Actual Cash Incentive Earned ($) | | Shantanu Narayen | 1,410,714 | 200% | 2,821,428 | 95% | 2,680,357 | | Daniel Durn | 850,000 | 100% | 850,000 | 95% | 807,500 | | Anil Chakravarthy | 750,000 | 100% | 750,000 | 95% | 712,500 | | David Wadhwani | 750,000 | 100% | 750,000 | 95% | 712,500 | | Scott Belsky | 691,071 | 100% | 691,071 | 95% | 656,518 |

  64. Fiscal Year 2022 Cash Incentive Plan Bonus

    ________________________ (1) Base salary adjustments for Messrs. Narayen and Belsky took effect on February 7, 2022 and their target cash incentives were pro-rated from the effective date of the adjustments.

  65. Other Cash Incentives

    Other Cash Incentives In recognition of the need to attract top talent for key executive roles and the responsibilities of the positions and the experience of each individual, the Committee granted one-time signing bonuses to Messrs. Durn and Wadhwani upon them joining Adobe during fiscal year 2021. Mr. Durn’s signing bonus of $6,200,000 was payable in two equal installments, with one half paid upon commencement of his employment and the second installment paid on the first anniversary of his employment. Mr. Wadhwani’s signing bonus of $5,000,000 is payable in equal installments over three years, subject to Mr. Wadhwani’s continued employment on each payment date. Each installment is subject to reimbursement if either Mr. Durn’s or Mr. Wadhwani’s employment terminates within 12 months of a payment, with the amount reimbursable reduced by 1/12 for each full month of employment from the initial payment date with respect to the first installment and reduced by 1/12 for each full month of employment from the first or second anniversary of the initial payment date, as applicable, for the second and third installments.

  66. Equity Incentives

    Equity Incentives

  67. Target Values and Grants in Fiscal Year 2022

    Target Values and Grants in Fiscal Year 2022 For fiscal year 2022, the Committee, with input from its independent compensation consultant, management and our CEO, took a number of factors into account in determining the target value of the equity compensation opportunity for each of our NEOs. Among these factors were the individual performance of the executive officers, peer group positioning, internal pay equity, our employee retention objectives and the other factors for determining compensation discussed under the section titled “Compensation Philosophy and Objectives” above. The following table sets forth the total target value of equity awards for each NEO determined by the Committee, as well as the resulting number of performance shares (at target and maximum performance) and RSUs granted to each of our NEOs in January 2022. Note that this table reflects the values targeted by the Committee. With regard to peer group positioning, the Committee reviews the value of equity awards in the aggregate because of the different mix of equity awards granted by our peers and the aggregated manner in which this data is presented in the peer group analyses. The actual grant date fair values of these equity awards, computed in accordance with stock-based compensation accounting principles, are set forth in the section titled “Executive Compensation—Summary Compensation Table.” As discussed in the section “Accounting and Tax Considerations” below, the grant date fair values reported in the Summary Compensation Table for fiscal year 2022 differ from those below. For more information on equity awards granted during fiscal year 2022, see the “Executive Compensation—Grants of Plan-Based Awards in Fiscal Year 2022” table and accompanying narrative.

  68. Equity Awards Granted by the Committee During Fiscal Year 2022

    Equity Awards Granted by the Committee During Fiscal Year 2022

  69. Equity Awards Granted by the Committee During Fiscal Year 2022

    | | | Performance Share Program(1) | | | | Name | Total Target Value of Equity Award ($)(2)(3) | Target Award (#)(4) | Maximum Award (#) | RSU Award (#) | | Shantanu Narayen | 34,500,000 | 46,822 | 93,644 | 20,067 | | Daniel Durn | 10,000,000 | 9,694 | 19,388 | 9,694 | | Anil Chakravarthy | 10,000,000 | 9,694 | 19,388 | 9,694 | | David Wadhwani | 10,000,000 | 9,694 | 19,388 | 9,694 | | Scott Belsky | 10,000,000 | 9,694 | 19,388 | 9,694 |

  70. Equity Awards Granted by the Committee During Fiscal Year 2022

    _________________________ (1) Achievement of goals for performance shares granted in fiscal year 2022 will be certified by the Committee following the completion of the applicable three-year performance period. The amounts in the table reflect the total number of performance shares granted for the three-year performance period at target and maximum, and, therefore, are not the same as the amounts reported in the “Executive Compensation—Grants of Plan-Based Awards in Fiscal Year 2022” table, which are based on grant date fair value amounts as described in footnote 3. (2) Amount of performance shares and RSUs awarded to each NEO is based on the total target equity value for each NEO described above under “Equity Compensation Mix.” (3) Total target value reported in this table applies to the target value of the entire equity award granted to each NEO. The value differs from the grant date fair value amounts reported for the NEOs for fiscal year 2022 in the Summary Compensation Table under the “Stock Awards” column. Under financial accounting rules, the grant date fair value for a performance award is not determined until the fiscal year in which the performance metrics are established. Under the 2022 Performance Share Program, 50% of the total target performance share awards are subject to Net New Sales Goals that are annually determined by the Committee for each of the fiscal years 2022, 2023 and 2024. Accordingly, only the grant date fair value for the 2022 fiscal year is reflected in the Summary Compensation Table for this portion of the award. The grant date fair value for the portion of the performance share awards subject to relative TSR over the three-year performance period has been determined and, therefore, is reported in the Summary Compensation Table. Please see above under “Fiscal Year 2022 Compensation Program Design—2022 Performance Share Program” for a description of the program for the 2022 fiscal year and below under “Accounting and Tax Considerations” for a description of the calculation of grant date fair value awards for the performance shares. (4) 50% of the award will apply to the TSR Goal and 50% will apply to the Net New Sales Goal.

  71. 2020 Performance Share Program Results and Payouts

    2020 Performance Share Program Results and Payouts The three-year performance period under Adobe’s 2020 Performance Share Program closed at the end of our 2022 fiscal year. Under this program, shares were earned by eligible participants based on a single objective financial measure—relative TSR (compared against the companies in the Nasdaq 100 Index at the beginning of the performance period) over a three-year performance period. If Adobe’s absolute TSR is positive, the company's achievement of a percentile rank that exceeded the 50th percentile would increase the number of shares of stock that would be earned by increments of 2.5%, rounded up to the nearest whole percent, calculated using that formula and the table below.

  72. 2020 Performance Share Program Results and Payouts

    | Company Percentile Rank as Compared to Index Companies | Shares of Stock That May Be Earned as a Percentage of Target Shares (“Percentage Payout”) | | Below 25th (1) | 0% | | 25th | 38% | | 35th | 63% | | 50th | 100%(2) | | 75th | 163% | | 90th | 200%(3) | | 100th | 200% |

  73. 2020 Performance Share Program Results and Payouts

    _________________________ (1) A threshold percentile rank of 25% is required before any performance shares can be earned. (2) The maximum number of performance shares that may be earned at the 50th percentile or higher is capped at 100% of target if Adobe’s absolute TSR is negative. (3) The maximum shares that may be earned is 200% of target if Adobe’s absolute TSR is positive. At the end of the performance period, there were 94 (out of the initial 100) companies with measurable TSR remaining against whom relative TSR performance was calculated for the 2020 Performance Share Program. During the performance period, the average price of Adobe’s common stock increased from $282.05 to $315.73 (using the 90-calendar day averages preceding the beginning and end of the performance period), and Adobe achieved a total stockholder return of 12%. The Committee engaged an independent outside consultant to review the peer group data and calculate the results under our 2020 Performance Share Program. With this performance, our percentile rank among the 94 companies against whom relative TSR performance was compared as of December 2, 2022 was 35th, which resulted in each of the participants being awarded performance shares equal to 63% of the executive officer’s target number of shares. The target, maximum and actual shares earned and awarded to our NEO participants under the 2020 Performance Share Program, as certified by the Committee, are set forth in the table below:

  74. 2020 Performance Share Program Results

    2020 Performance Share Program Results

  75. 2020 Performance Share Program Results

    | Name (1) | Target Award (#) | Maximum Award (#) | Actual Achievement (%) | Shares Awarded (#) | | Shantanu Narayen | 65,579 | 131,158 | 63% | 41,314 | | Anil Chakravarthy | 14,413 | 28,826 | 63% | 9,080 | | Scott Belsky | 10,090 | 20,180 | 63% | 6,356 |

  76. 2020 Performance Share Program Results

    (1) Messrs. Durn and Wadhwani were not participants in the 2020 Performance Share Program because they were not employed by Adobe at the time the awards were granted.

  77. Progress on 2022 Performance Share Program

    Progress on 2022 Performance Share Program For fiscal year 2022, we achieved $1.91 billion in net new annualized recurring revenue in Digital Media. In Digital Experience, we achieved $3.88 billion in subscription revenue, representing 15% year-over-year growth or 18% adjusted year-over-year growth. As shown in the table below, comparison against public guidance for such amounts determined at the beginning of fiscal year 2022 resulted in 100.3% attainment for net new ARR in Digital Media and 93.3% attainment for subscription revenue growth in Digital Experience. After applying weighting to each of the two components based on the relative scale of the business units, total Net New Sales attainment was 98.7% on a constant currency basis.

  78. 2022 Performance Share Program – Net New Sales Goal Attainment During Fiscal Year 2022

    2022 Performance Share Program – Net New Sales Goal Attainment During Fiscal Year 2022

  79. 2022 Performance Share Program – Net New Sales Goal Attainment During Fiscal Year 2022

    | Net New Sales Component | Target from Public FY 2022 Guidance | Actual FY 2022 Results | Attainment (%) | | Digital Media Net New ARR ($ in millions) | $1,900 | $1,907 | 100.3% | | Digital Experience Subscription Revenue Growth* | 19% | 18% | 93.3% | | Total Net New Sales | | | 98.7% |

  80. 2022 Performance Share Program – Net New Sales Goal Attainment During Fiscal Year 2022

    * Digital Experience subscription revenue year-over-year growth rates presented above are adjusted to account for the extra week in first quarter fiscal year 2021 and to show growth rates in constant currency. A reconciliation of Digital Experience subscription revenue year-over-year growth rates on a GAAP basis to year-over-year growth rates on an adjusted basis, presented above, is included in Annex A. This will result in a future payout of 86% of target shares for fiscal year 2022 under the Net New Sales Goal for fiscal year 2022 (as shown in the table below). As discussed above, no portion of this amount is payable until the full three-year performance period has concluded and each NEO’s award is subject to such NEO’s continued employment until such date.

  81. 2022 Performance Share Program – Net New Sales Shares Earned During Fiscal Year 2022

    2022 Performance Share Program – Net New Sales Shares Earned During Fiscal Year 2022

  82. 2022 Performance Share Program – Net New Sales Shares Earned During Fiscal Year 2022

    | | January 2022 Award Net New Sales Shares for FY 2022 | | | | Name | Target Number of PSUs (#) | Payout (%) | Actual Number of PSUs Earned (#) | | Shantanu Narayen | 7,804 | 86% | 6,711 | | Daniel Durn | 1,616 | 86% | 1,389 | | Anil Chakravarthy | 1,616 | 86% | 1,389 | | David Wadhwani | 1,616 | 86% | 1,389 | | Scott Belsky | 1,616 | 86% | 1,389 |

  83. Realizable Pay

    Realizable Pay Realizable pay reflects the real value of equity awards and increases or decreases with fluctuations in market value. When determining the annual equity grants to our executive officers in January of each year, the Committee believes it is important to take into account not only the grant date fair values included in our Summary Compensation Table, but also to consider the effect of the year-end value of our stock on those awards over time. Given that approximately 88% of our CEO’s and 87% of our other NEOs’ target total direct compensation for fiscal year 2022 is equity-based, the Committee and the company consider it especially important to focus on realizable pay when evaluating the effectiveness of our pay for performance philosophy. For example, decreases in our stock price could cause stock-based awards to have realizable values that are less than what was targeted at the time of grant, including performance periods under our Performance Share Programs potentially closing with no value earned and no dilutive effect to the company. As discussed above, the Committee sets our CEO's target compensation every year in consultation with its external compensation consultant and with reference to peer company pay practices. Our equity compensation programs are designed to incentivize performance and drive stockholder returns. Equity awards constitute the bulk of our CEO’s target total direct compensation. The following chart demonstrates the relationship between the target and realizable values of our CEO’s total direct compensation and Adobe’s indexed TSR for the past five completed fiscal years. When our stock price increases and generates positive returns for Adobe’s stockholders, the increase impacts an executive officer’s realizable pay during the present fiscal year and for past fiscal years during which the executive officer received equity awards that are held or still subject to vesting. When our stock price decreases, the decrease similarly impacts an executive officer’s realizable pay in fiscal years and, as shown for fiscal year 2022 in the chart below, can result in realizable total direct compensation being less than target total direct compensation. The following chart demonstrates that our equity compensation programs have been working as intended by the Committee, providing meaningful incentives for Adobe’s executive officers to drive strong stockholder returns relative to our peer group over the long-term and demonstrating a direct correlation between our stock price and realizable pay. Target TDC: Target TDC is the sum of our CEO’s base salary as disclosed in the Compensation Discussion and Analysis sections of this and prior proxy statements, the target annual incentive amount (which is the target bonus percentage multiplied by the respective base salary) and equity award target grant date fair values. No other amounts are included. Realizable TDC: Realizable TDC is the sum of our CEO’s actual earned base salary, non-equity incentive plan compensation, equity award values of RSUs and performance shares granted (calculated for performance shares as described in the following sentence) with such equity award values multiplied by the closing stock price per share on the last day of fiscal year 2022 of $341.53, and all other compensation disclosed in the Summary Compensation Table for the applicable fiscal year. Equity award values for performance shares are based on: (i) for completed performance periods that began in fiscal years 2018, 2019 and 2020, the number of shares actually issued for the applicable performance period following certification of results and (ii) for performance periods that began in fiscal years 2021 and 2022 that are not yet complete, (x) target amounts under relative TSR (which was the only performance metric for performance shares in fiscal year 2021) and (y) for fiscal year 2022 for which annual Net New Sales Goals apply in addition to the relative TSR Goal, the earned amount for fiscal year 2022 under the Net New Sales Goal and target amounts under that goal for each of fiscal years 2023 and 2024. Indexed TSR: Indexed TSR is calculated by taking the stock price per share on the last day of fiscal years 2018 to 2022 of $250.89, $309.53 $477.03, $616.53 and $341.53, respectively, and dividing each by the stock price per share on the last day of fiscal year 2017 of $179.52.

  84. Employment Agreements

    Employment Agreements Each of our NEOs is employed “at will.” Except in limited circumstances, such as when an employment agreement that provides for severance is assumed or renegotiated as part of a corporate transaction, we only enter into agreements providing for severance benefits with our U.S. executive officers in relation to a change of control of Adobe or an executive transition plan.

  85. Severance and Change of Control Compensation

    Severance and Change of Control Compensation The Committee believes that change of control vesting of equity awards and severance payments and benefits, if structured appropriately, serve to minimize the distraction caused by a potential transaction and reduce the risk that an executive officer departs Adobe before an acquisition is consummated. The Committee and the company believe that a pre-existing plan will allow our executive officers to focus on continuing normal business operations and on the success of a potential business combination, rather than on seeking alternative employment. Further, a pre-existing plan ensures stability and will enable our executive officers to maintain a balanced perspective in making overall business decisions during a potentially uncertain period. To that end, Adobe provides certain change of control payments and benefits as described below. Each of our NEOs is a participant in our 2020 Executive Severance Plan in the Event of a Change of Control (the “Change of Control Plan”). The Change of Control Plan provides for severance payments and fully accelerated vesting of outstanding equity awards for our NEOs and other members of senior management upon an involuntary termination of employment upon or following a qualifying change of control. The terms of the Change of Control Plan are described below under “Executive Compensation—Change of Control”. We also maintain a Retention Agreement with Mr. Narayen, which provides similar benefits but does not require termination of his employment in order for him to receive the equity acceleration, as described below under “Executive Compensation—Change of Control.” Mr. Narayen’s original Retention Agreement, dated January 12, 1998, was amended February 11, 2008 based on his promotion to Chief Executive Officer and was further amended on December 11, 2010 and December 5, 2014 in order to clarify the manner of compliance with, or exemption from, Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”). The Change of Control Plan and the Retention Agreement with Mr. Narayen do not provide for reimbursements or “gross-ups” of excise tax amounts under Section 4999 of the Code. Rather, under both of these arrangements, benefits would be reduced if doing so would result in a better after-tax economic position for the affected executive officer. The Committee and the company believe this is an appropriate allocation of the tax cost of these arrangements between Adobe and the executive officer and is consistent with market practice. Our change of control arrangements are designed to be competitive with the pay practices of our peer group. The Committee periodically reviews the terms and conditions of our change of control arrangements and will make adjustments when and to the extent it deems appropriate. The Change of Control Plan will expire on December 13, 2023, unless extended by Adobe. Additional details regarding our Change of Control Plan and the Retention Agreement with Mr. Narayen, including estimates of amounts payable in specified circumstances as of the last day of fiscal year 2022, are disclosed in the section titled “Executive Compensation—Change of Control—Potential Payments upon Termination and/or a Change of Control”.

  86. Granting Guidelines for Equity Compensation

    Granting Guidelines for Equity Compensation Adobe has adopted written guidelines setting forth our grant practices and procedures for all equity awards. Pursuant to these guidelines: •the vesting commencement date for our annual equity awards granted to our executive officers, including the NEOs, is January 24 of fiscal year 2022 and prior fiscal years, unless another date is approved and documented by the Committee; under the guidelines, as amended effective December 3, 2022, the vesting commencement date for fiscal year 2023 awards is January 15 of the month in which the grant is made; •the effective grant date for non-executive officer new hire RSU awards is the 15th day of the month following the month of the employee’s hire date, or, if that is not a trading day, the first trading day thereafter; and •the effective grant date for promotion RSU awards is the 15th day of the month following the month of the employee’s promotion, or, if that is not a trading day, the first trading day thereafter. Because the foregoing grant dates are pre-established, the timing of the release of material non-public information does not affect the grant dates for equity awards, and Adobe does not time the release of material non-public information based on equity award grant dates. Pursuant to our practices for executive officers, the effective grant date for new hire RSU and performance share awards is the executive officer’s hire date. The Committee approves all grants made to our executive officers on or before the grant date, subject to the executive officer’s continued employment on the grant date. The Committee also has the authority to approve non-executive officer stock option, performance share and RSU awards. Our Board has also delegated to a Management Committee for Employee Equity Awards (consisting of the Chief Executive Officer and the Chief People Officer & Executive Vice President, Employee Experience) the authority to approve RSU and performance awards to non-executive officer employees in accordance with the granting guidelines described above and subject to Committee-approved vesting schedules and share limits. In addition, our Board has delegated to an Acquired Company & Retention Equity Awards Committee (consisting of the CEO in his capacity as a member of the Board) the authority to approve the assumption of outstanding awards in an acquisition and the granting of RSU awards to employees and consultants. Pursuant to its charter, the Committee has the authority to establish the terms and conditions of our equity awards; therefore, the Committee may make exceptions to Adobe’s granting guidelines. In the event we award stock options, all stock option awards would be granted with an exercise price equal to or greater than the closing price of the underlying stock on the effective grant date or, in accordance with the terms of our approved equity plans, the closing price of the underlying stock on the last trading day prior to the effective grant date, if an award is granted on a non-trading day.

  87. Accounting and Tax Considerations

    Accounting and Tax Considerations The Committee considers the financial accounting and tax consequences to Adobe of our compensation programs and the tax consequences to our employees. In determining the aggregate number and mix of equity grants in any fiscal year, the Committee and management consider the size and share-based compensation expense of outstanding and new equity awards. Unlike in prior fiscal years, the grant date fair values for the performance shares granted in fiscal year 2022 under the 2022 Performance Share Program are not yet fully reflected in the Summary Compensation Table for fiscal year 2022 and the Grants of Plan-Based Awards in Fiscal Year 2022 table because the Net New Sales Goal for fiscal years 2023 and 2024 were not determined in fiscal year 2022. Applicable financial accounting rules do not permit full recognition of grant date fair values for performance equity awards until the performance metrics are completely established. Accordingly, only the grant date fair value attributable to the portion of the performance share awards based on relative TSR for the 2022-2024 performance period and that attributable to the Net New Sales Goal for fiscal year 2022 are reflected in the Summary Compensation Table and the Grants of Plan-Based Awards in Fiscal Year 2022 table. As the Net New Sales Goals are established for future fiscal years, the grant date fair values associated with the related performance shares will be reflected in the Summary Compensation Table and the Grants of Plan-Based Awards table for the applicable fiscal year. The difference of as much as two years between Committee approval of the performance share grants and the future fiscal years when a grant date fair value applies to certain performance share awards subject to the Net New Sales Goal can result in significant deviations between the selected grant value that the Committee approved set forth above under “Fiscal Year 2022 Compensation Decisions and Results—Equity Incentives—Target Values and Grants in Fiscal Year 2022” and the grant date fair value reported in the Summary Compensation Table for the applicable year in which the grant date fair value is established. The Committee believes it is important to preserve flexibility in administering and designing compensation programs that are intended to attract, retain and motivate the best talent and be in the best interests of Adobe and its stockholders. Accordingly, we do not require that all compensation be deductible as corporate objectives may not always be consistent with the requirements for full deductibility.

  88. Summary Compensation Table for Fiscal Years 2022, 2021 and 2020

    Summary Compensation Table for Fiscal Years 2022, 2021 and 2020 The following table sets forth information regarding the compensation for services performed during fiscal years 2022, 2021 and 2020 awarded to, paid to, or earned by the NEOs, which include (1) our Chief Executive Officer, (2) our Chief Financial Officer and (3) our three other most highly compensated executive officers, as determined by reference to total compensation for fiscal year 2022, who were serving as executive officers at the end of fiscal year 2022.

  89. Summary Compensation Table for Fiscal Years 2022, 2021 and 2020

    | Name and Principal Position | Year | Salary (1) ($) | Bonus ($) | Stock Awards(2) ($) | Non-Equity Incentive Plan Compensation(3) ($) | All Other Compensation(4) ($) | Total ($) | | Shantanu Narayen | 2022 | 1,413,461 | — | 27,162,373 | 2,680,357 | 344,120 | 31,600,311 | | Chairman and Chief Executive Officer | 2021 | 1,019,231 | — | 32,499,671 | 2,180,000 | 429,823 | 36,128,725 | | | 2020 | 1,000,000 | — | 42,582,476 | 2,094,000 | 213,478 | 45,889,954 | | Daniel Durn (5) | 2022 | 850,000 | 3,100,000(7) | 8,502,393 | 807,500 | 29,821 | 13,289,714 | | Chief Financial Officer and Executive Vice President, Finance, Technology Services and Operations | 2021 | 114,423 | 3,100,000 | 28,674,470 | 117,373 | 788 | 32,007,054 | | Anil Chakravarthy | 2022 | 750,000 | — | 8,502,393 | 712,500 | 19,838 | 9,984,731 | | President, Digital Experience Business | 2021 | 759,615 | — | 9,039,706 | 812,212 | 9,528 | 10,621,061 | | | 2020 | 641,346 | 3,000,000 | 18,442,255 | 675,660 | 9,283 | 22,768,544 | | David Wadhwani (6) | 2022 | 750,000 | 1,666,667(7) | 8,502,393 | 712,500 | 17,455 | 11,649,015 | | President, Digital Media Business | 2021 | 360,577 | 1,666,667 | 17,223,679 | 381,206 | 9,070 | 19,641,199 | | Scott Belsky | 2022 | 691,346 | — | 8,502,393 | 656,518 | 9,504 | 9,859,761 | | Chief Strategy Officer and Executive Vice President, Design and Emerging Products | 2021 | 657,692 | — | 7,030,570 | 703,212 | 9,045 | 8,400,519 | | | 2020 | 613,462 | — | 8,577,610 | 641,863 | 8,790 | 9,841,725 |

  90. Summary Compensation Table for Fiscal Years 2022, 2021 and 2020

    ______________________________________ (1) Fiscal 2021 salaries were impacted by the extra week in fiscal 2021 which was a 53-week year compared with fiscal years 2022 and 2020 which were 52-week years. (2) These amounts do not reflect the actual economic value realized by the NEO. In accordance with SEC rules, this column represents the grant date fair value, computed in accordance FASB ASC Topic 718, of performance shares, assuming the probable outcome of related performance conditions, and RSUs. Pursuant to SEC rules, the amounts shown disregard the impact of estimated forfeitures. For additional information on the valuation assumptions, see Part II, Item 8 “Financial Statements and Supplementary Data” of our Fiscal Year 2022 Annual Report on Form 10-K and the Notes to Consolidated Financial Statements at Note 12, “Stock-Based Compensation.” For performance shares granted in fiscal year 2022, amounts include the grant date fair value of 50% of the target performance shares, related to the Relative TSR Goal, and the grant date fair value of 16.67% of the target performance shares, related to the Net New Sales Goal that was established in fiscal year 2022. The grant date fair value of the remaining target performance shares under the 2022 Performance Share Program will be reflected in the Summary Compensation Table in future fiscal years as the associated Net New Sales Goals are established. As shown above in the table titled “Equity Awards Granted by the Committee During Fiscal Year 2022,” in the Compensation Discussion and Analysis, performance share awards have a maximum payout of 200% of the target number of shares. Refer to “Grants of Plan-Based Awards in Fiscal Year 2022” for further details of performance share awards and RSUs, including the related grant date fair value. (3) These amounts consist solely of amounts earned under our Cash Incentive Plans. Such amounts are paid in the subsequent fiscal year. (4) For all NEOs, these amounts for fiscal year 2022 include matching contributions under the 401(k) Plan and life insurance premiums. The amounts also include the grossed-up value of the sales club trip of $11,144 for Mr. Narayen and $11,883 for Mr. Durn. Additionally, for Mr. Narayen, the amounts also include the incremental cost of personal use of our corporate jet, based on variable costs for fuel, crew, catering and airport fees, amounting to $315,000 and the cost of executive health concierge service in lieu of the executive physical. On occasion, guests of Mr. Narayen may accompany him on the corporate jet during business trips at a de minimis incremental cost to the company. (5) Mr. Durn joined the company in October 2021 and was not a named executive officer in fiscal year 2020. (6) Mr. Wadhwani joined the company in June 2021 and was not a named executive officer in fiscal year 2020. (7) For Messrs. Durn and Wadhwani, these amounts reflect the annual installments of signing bonuses paid upon commencement of their respective employment at Adobe.

  91. CEO Pay Ratio

    CEO Pay Ratio The fiscal year 2022 annual total compensation of our CEO was $31,600,311 and the annual total compensation of our median compensated employee was $170,679, based on the methodology presented in the Summary Compensation Table (which, as discussed in footnote 2 to the Summary Compensation Table, did not reflect the grant date fair value for the entirety of the performance shares granted to our CEO under the 2022 Performance Share Program as a result of accounting principles applicable to the reporting of the performance shares). This resulted in a ratio of 185 to 1. To identify the median employee, we took into account target annual base salary, target annual cash incentive bonus and grant date accounting value of RSU and performance share awards granted to our employees, excluding Mr. Narayen, as of December 2, 2022. We annualized this compensation for employees who did not work the entire year. For employees paid other than in U.S. dollars, we converted their compensation to U.S. dollars using the average foreign exchange rate for the fiscal year. The pay ratio reported above is a reasonable estimate calculated in a manner consistent with SEC rules based on our internal records and the methodology described above. The SEC rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s total annual compensation allow companies to adopt a variety of methodologies, to apply certain exclusions and to make reasonable estimates and assumptions that reflect their employee populations and compensation practices. Therefore, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies have different employee populations and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.

  92. Grants of Plan-Based Awards in Fiscal Year 2022

    Grants of Plan-Based Awards in Fiscal Year 2022 The following table shows all plan-based awards granted to the NEOs during fiscal year 2022. In accordance with SEC rules, this table presents performance awards as having been granted in the year in which the performance goals were established, and if an award has multiple performance periods, the portion relating to each performance period is treated as a separate grant. The equity awards granted in fiscal year 2022 identified in the table below are also reported in “Outstanding Equity Awards at 2022 Fiscal Year End.” For additional information regarding incentive plan awards, please refer to the “Cash Incentives” and “Equity Incentives” sections of our “Compensation Discussion and Analysis.”

  93. Grants of Plan-Based Awards in Fiscal Year 2022

    | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | | | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | | | All Other Stock Awards: Number of Shares of Stock or Units(3) (#) | Grant Date Fair Value of Stock and Option Awards(4) ($) | | Name | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | | Shantanu Narayen | — | — | 2,821,428 | 5,642,856 | — | — | — | — | — | | | 1/24/2022 | — | — | — | 10,067 | 31,215 | 62,430 | — | 16,734,356 | | | 1/24/2022 | — | — | — | — | — | — | 20,067 | 10,428,017 | | Daniel Durn | — | — | 850,000 | 1,700,000 | — | — | — | — | — | | | 1/24/2022 | — | — | — | 2,084 | 6,463 | 12,926 | — | 3,464,809 | | | 1/24/2022 | — | — | — | — | — | — | 9,694 | 5,037,584 | | Anil Chakravarthy | — | — | 750,000 | 1,500,000 | — | — | — | — | — | | | 1/24/2022 | — | — | — | 2,084 | 6,463 | 12,926 | — | 3,464,809 | | | 1/24/2022 | — | — | — | — | — | — | 9,694 | 5,037,584 | | David Wadhwani | — | — | 750,000 | 1,500,000 | — | — | — | — | — | | | 1/24/2022 | — | — | — | 2,084 | 6,463 | 12,926 | — | 3,464,809 | | | 1/24/2022 | — | — | — | — | — | — | 9,694 | 5,037,584 | | Scott Belsky | — | — | 691,071 | 1,382,142 | — | — | — | — | — | | | 1/24/2022 | — | — | — | 2,084 | 6,463 | 12,926 | — | 3,464,809 | | | 1/24/2022 | — | — | — | — | — | — | 9,694 | 5,037,584 |

  94. Grants of Plan-Based Awards in Fiscal Year 2022

    _________________________ (1) These columns represent awards granted under our 2022 Cash Incentive Plan for performance in fiscal year 2022. These columns show the awards that were possible at the threshold, target, and maximum levels of performance. Minimum performance under the 2022 Cash Incentive Plan could have resulted in a threshold amount equal to $0. Actual cash incentive awards earned in fiscal year 2022 by the NEOs under the 2022 Cash Incentive Plan are shown in the column titled “Non-Equity Incentive Plan Compensation” in the “Summary Compensation Table.” (2) These columns represent awards for which a grant date fair value applies that were granted under our 2022 Performance Share Program, which was adopted under our 2019 Equity Incentive Plan (the “2019 Plan”). These columns show the awards that are possible at the threshold, target, and maximum levels of performance. If the company does not achieve the threshold performance metric, zero shares will be earned. None of the performance shares can be earned until the performance period closes at the end of our 2024 fiscal year. See “Equity Awards Granted by the Committee During Fiscal Year 2022” in the “Compensation Discussion and Analysis” section of this proxy statement for additional discussion. (3) This column represents awards of RSUs granted under our 2019 Plan. (4) These amounts do not reflect the actual economic value realized by the NEO. In accordance with SEC rules, this column represents the grant date fair value, computed in accordance with stock-based compensation accounting principles, of each equity award. For additional information on the valuation assumptions, see Part II, Item 8 “Financial Statements and Supplementary Data” of our Fiscal Year 2022 Annual Report on Form 10-K and the Notes to Consolidated Financial Statements at Note 12, “Stock-Based Compensation.”

  95. Narrative Summary to Summary Compensation Table and Grants of Plan-Based Awards in Fiscal Year 2022 Table

    Narrative Summary to Summary Compensation Table and Grants of Plan-Based Awards in Fiscal Year 2022 Table The material terms of the NEOs’ annual compensation, including base salaries, cash incentives and equity awards, including equity values in proportion to total compensation are described under “Compensation Discussion and Analysis” in this proxy statement. Our equity award granting practices are described above and our severance benefits are described under “Change of Control” in this proxy statement. None of our NEOs have entered into a written employment agreement with Adobe. As discussed in greater detail in “Compensation Discussion and Analysis,” the fiscal year 2022 non-equity incentive awards were granted pursuant to the 2022 Cash Incentive Plan, with amounts earned based on the achievement of certain financial and strategic objective goals, as well as the individual performance applicable to each respective NEO. Cash incentives were fully vested when earned. As discussed in greater detail in “Compensation Discussion and Analysis,” the fiscal year 2022 performance share awards will be settled in stock, subject to the terms of our 2022 Performance Share Program. Actual awards earned under the 2022 Performance Share Program are based on achievement of relative TSR and Net New Sales Goals, each equally weighted at target and independently determined. Achievement of the relative TSR Goal is measured over the three-year performance period comprised of calendar years 2022 through 2024, and achievement of the Net New Sales Goals is based on annual achievement of such goals over each of fiscal years 2022 through 2024. No 2022 performance share awards will be paid until final certification by the Committee at the outset of our 2025 fiscal year, contingent upon each NEO’s continued service to Adobe at that time. The RSUs granted to our NEOs pursuant to our 2019 Plan at the outset of fiscal year 2022 vest over four years with 25% vesting on the first anniversary of the vesting commencement date, and then 6.25% vesting quarterly thereafter for the remaining three years of the grant subject to continued service through each applicable vesting date. There is no purchase price associated with performance share or RSU awards. We did not pay dividends on our common stock during fiscal year 2022.

  96. Outstanding Equity Awards at 2022 Fiscal Year End

    Outstanding Equity Awards at 2022 Fiscal Year End The following table sets forth information regarding outstanding equity awards as of December 2, 2022 for each NEO. All vesting is generally contingent upon continued employment with Adobe through the applicable vesting date and certain equity awards are subject to performance conditions, each as specified in the footnotes. Market values and payout values in this table are calculated based on the closing market price of our common stock as reported on Nasdaq on December 2, 2022, which was $341.53 per share. No stock options were outstanding as of December 2, 2022.

  97. Outstanding Equity Awards at 2022 Fiscal Year End

    | | Stock Awards | | | | | | Name | Award Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | | Shantanu Narayen | 1/24/2019 | 2,578(1) | 880,464 | — | — | | | 1/27/2020 | 8,783(2) | 2,999,658 | | | | | 1/27/2020 | — | — | 131,158(3) | 44,794,392 | | | 1/25/2021 | 11,762(4) | 4,017,076 | — | — | | | 1/25/2021 | — | — | 97,578(5) | 33,325,814 | | | 1/24/2022 | 20,067(6) | 6,853,483 | — | — | | | 1/24/2022 | | | 93,644(7) | 31,982,235 | | Daniel Durn | 10/18/2021 | 30,693(8) | 10,482,580 | — | — | | | 1/24/2022 | 9,694(6) | 3,310,792 | — | — | | | 1/24/2022 | — | — | 19,388(7) | 6,621,584 | | Anil Chakravarthy | 1/9/2020 | 11,019(9) | 3,763,319 | — | | | | 1/27/2020 | — | — | 28,826(3) | 9,844,944 | | | 1/25/2021 | 5,429(4) | 1,854,166 | — | — | | | 1/25/2021 | — | — | 19,302(5) | 6,592,212 | | | 1/24/2022 | 9,694(6) | 3,310,792 | | | | | 1/24/2022 | | | 19,388(7) | 6,621,584 | | David Wadhwani | 6/14/2021 | 21,261(10) | 7,261,269 | — | — | | | 1/24/2022 | 9,694(6) | 3,310,792 | | | | | 1/24/2022 | | | 19,388(7) | 6,621,584 | | Scott Belsky | 1/24/2019 | 774(1) | 264,344 | — | | | | 1/27/2020 | 3,153(2) | 1,076,844 | | | | | 1/27/2020 | | | 20,180(3) | 6,892,075 | | | 1/25/2021 | 4,222(4) | 1,441,940 | | | | | 1/25/2021 | | | 15,012(5) | 5,127,048 | | | 1/24/2022 | 9,694(6) | 3,310,792 | | | | | 1/24/2022 | | | 19,388(7) | 6,621,584 |

  98. Outstanding Equity Awards at 2022 Fiscal Year End

    _________________________ (1) RSUs granted pursuant to our 2003 Equity Incentive Plan (the “2003 Plan”). Four-year vesting with 25% vesting on the first anniversary of the vesting commencement date, and then 6.25% vesting quarterly thereafter for the remaining three years of the grant. RSUs fully vest on January 24, 2023. (2) RSUs granted pursuant to our 2019 Plan. Four-year vesting with 25% vesting on the first anniversary of the vesting commencement date, and then 6.25% vesting quarterly thereafter for the remaining three years of the grant. RSUs fully vest on January 24, 2024. (3) These amounts represent the maximum number of shares that could be earned under our 2020 Performance Share Program. The performance period ended at the end of fiscal year 2022, and the certification was completed thereafter. The earned awards vested as of January 24, 2023. (4) RSUs granted pursuant to our 2019 Plan. Four-year vesting with 25% vesting on the first anniversary of the vesting commencement date, and then 6.25% vesting quarterly thereafter for the remaining three years of the grant. RSUs fully vest on January 24, 2025. (5) These amounts represent the maximum number of shares that could be earned under our 2021 Performance Share Program. The performance period will end at the end of fiscal year 2023, and the certification will be completed thereafter. The earned awards will vest as of the later of January 24, 2024 or the certification date. (6) RSUs granted pursuant to our 2019 Plan. Four-year vesting with 25% vesting on the first anniversary of the vesting commencement date, and then 6.25% vesting quarterly thereafter for the remaining three years of the grant. RSUs fully vest on January 24, 2026. (7) These amounts represent the maximum number of shares that could be earned under our 2022 Performance Share Program. The three-year performance period for the relative TSR metric will end at the end of calendar year 2024 and the final performance period for the Net New Sale goal will end at the end of fiscal year 2024 (with interim annual performance periods for the Net New Sales goal ending at the end of fiscal years 2022, 2023 and 2024). Final certification will be completed after fiscal year 2024. The earned awards will vest as of the later of January 24, 2025 or the certification date. (8) RSUs granted pursuant to our 2019 Plan. Three-year vesting with quarterly vesting from the vesting commencement date. RSUs fully vest on November 15, 2024. (9) RSUs granted pursuant to our 2019 Plan. Three-year vesting with 1/3 vesting on each anniversary of the grant date. RSUs fully vest on January 9, 2023. (10) RSUs granted pursuant to our 2019 Plan. Four-year vesting with 25% vesting on the first anniversary of the vesting commencement date, and then 6.25% vesting quarterly thereafter for the remaining three years of the grant. RSUs fully vest on June 14, 2025.

  99. Option Exercises and Stock Vested in Fiscal Year 2022

    Option Exercises and Stock Vested in Fiscal Year 2022 The following table sets forth information regarding the vesting during fiscal year 2022 of time-based stock-settled RSUs and performance-based stock-settled awards granted under our 2019 Performance Share Program for each of the NEOs, on an aggregate basis. In January 2022, the Committee certified the results of our 2019 Performance Share Program at 200% of target. Because certification occurs in the year following the end of the three-year performance period, none of the awards under our 2020, 2021, or 2022 Performance Share Programs were eligible to be earned or vest in 2022. The value realized on vesting of stock awards is based on the closing market price of our common stock as reported on Nasdaq on the vesting date of the stock-settled awards. No stock options were outstanding or exercised as of December 2, 2022.

  100. Option Exercises and Stock Vested in Fiscal Year 2022

    | | Stock Awards | | | Name | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | | Shantanu Narayen | 182,402 | 92,348,829 | | Daniel Durn | 15,346 | 6,452,635 | | Anil Chakravarthy | 15,241 | 7,560,797 | | David Wadhwani | 9,664 | 3,584,957 | | Scott Belsky | 29,691 | 14,619,726 |

  101. Nonqualified Deferred Compensation in Fiscal Year 2022

    Nonqualified Deferred Compensation in Fiscal Year 2022 We originally adopted a Deferred Compensation Plan in December 2006, which has been amended from time to time, most recently in December 2019 to remove the ability of executive officer participants who are not directors to defer performance shares or RSUs granted after December 31, 2019. Under the terms of our Deferred Compensation Plan, eligible employees, including each of the NEOs, and directors may elect to defer the receipt of their cash compensation, and directors may elect to defer the receipt of a portion of their equity compensation they would otherwise have received when earned. Amounts deferred under the Deferred Compensation Plan are deemed invested in the investment funds selected by the participant with similar options as available under the 401(k) Plan. We do not contribute to the Deferred Compensation Plan on behalf of its participants, or match the deferrals made by participants, with the exception of situations in which an election to defer under the Deferred Compensation Plan would prevent a participant from receiving the full 401(k) company match. In those situations, we make a contribution to the Deferred Compensation Plan equal to the foregone 401(k) company match. Accordingly, amounts payable under the Deferred Compensation Plan generally are entirely determined by participant contributions and fund elections. Participants in the Deferred Compensation Plan may elect to contribute 5% to 75% of their base salary and 5% to 100% of other specified compensation, including commissions and bonuses. Members of our Board may contribute 100% of their RSU awards. Generally, participants may elect the payment of benefits with respect to cash and equity deferrals to begin on a specified date or upon termination of employment. Payment of cash deferrals may be made in the form of a lump sum or annual installments, subject to certain requirements. Payments of equity deferrals may only be made in the form of a lump sum. In addition, each participant elects whether to keep his or her account balance in the Deferred Compensation Plan or to receive a lump sum distribution upon a change of control. If a participant experiences an unforeseeable emergency during the deferral period, the participant may petition to receive a partial or full payout from the Deferred Compensation Plan. All distributions are made in cash, except that deferred equity awards are settled in Adobe stock. Other than Mr. Narayen, no other NEOs participated in, or had an accrued balance under, the Deferred Compensation Plan in fiscal year 2022. The following table shows accrued balances under the Deferred Compensation Plan as of the last day of our 2022 fiscal year:

  102. Nonqualified Deferred Compensation in Fiscal Year 2022

    | | Nonqualified Deferred Compensation(1) | | | | | | | Name | Aggregate balance at December 3, 2021 ($) | Executive contributions in fiscal 2022 ($) | Registrant contributions in fiscal 2022 ($) | Aggregate earnings fiscal 2022 ($) | Aggregate withdrawals/distributions in fiscal 2022 ($) | Aggregate balance at December 2, 2022 ($) | | Shantanu Narayen | 9,938,873 | 2,082,918 | — | (1,105,308) | — | 10,916,483 |

  103. Nonqualified Deferred Compensation in Fiscal Year 2022

    _________________________ (1) Executive contributions in this table are reflected in the Summary Compensation table for fiscal year 2022 and were reflected in prior years, as applicable. Aggregate earnings are not reflected in the Summary Compensation Table for fiscal year 2022 and were not reflected in prior years.

  104. Potential Payments upon Termination and/or a Change of Control

    Potential Payments upon Termination and/or a Change of Control The following table sets forth the estimated potential payments and benefits payable to each NEO under the Change of Control Plan (as in effect on December 2, 2022), and in the case of Mr. Narayen, his Retention Agreement, in the event of a termination of employment and/or a change of control (“COC”), as if such termination or COC event had occurred on December 2, 2022, the last day of fiscal year 2022. The value of the equity awards is based on the closing market price of our common stock as reported on Nasdaq on December 2, 2022, which was $341.53 per share. Each NEO must sign a release of claims to receive any of the benefits below except those for Death/Disability, COC Only (continued employment), or COC Only/Equity Not Assumed or Substituted.

  105. Potential Payments upon Termination and/or a Change of Control

    | Triggering Event | Target Bonus (1) ($) | Lump Sum Severance (2) ($) | Accelerated Performance Awards (3) ($) | Accelerated Restricted Stock Units ($) | Cont. Health Insurance Coverage (pres. val.) (4) ($) | Total (5) ($) | | Shantanu Narayen | | | | | | | | Death/Disability(6) | — | — | 38,836,060 | 8,063,525 | — | 46,899,585 | | Voluntary Termination/Involuntary Termination with Cause | — | — | — | — | — | — | | Involuntary Termination Without Cause/Resignation for Good Reason | — | — | — | — | — | — | | Involuntary Termination/Resignation for Good Reason upon COC(7) | 2,821,428 | 13,500,000 | 55,051,221 | 14,750,686 | 30,457 | 86,153,792 | | COC Only (continued employment)(8) | — | — | 55,051,221 | 14,750,686 | — | 69,801,907 | | COC Only/Equity Not Assumed or Substituted(9) | — | — | 55,051,221 | 14,750,686 | — | 69,801,907 | | Daniel Durn | | | | | | | | Death/Disability(6) | — | — | 1,103,483 | 6,689,549 | — | 7,793,032 | | Voluntary Termination/Involuntary Termination with Cause | — | — | — | — | — | — | | Involuntary Termination Without Cause/Resignation for Good Reason | — | — | — | — | — | — | | Involuntary Termination/Resignation for Good Reason upon COC(7) | 850,000 | 3,400,000 | 3,310,792 | 13,793,373 | 43,299 | 21,397,464 | | COC Only (continued employment)(8) | — | — | — | — | — | — | | COC Only/Equity Not Assumed or Substituted(9) | — | — | 3,310,792 | 13,793,373 | — | 17,104,165 |

  106. Potential Payments upon Termination and/or a Change of Control

    | Triggering Event | Target Bonus (1) ($) | Lump Sum Severance (2) ($) | Accelerated Performance Awards (3) ($) | Accelerated Restricted Stock Units ($) | Cont. Health Insurance Coverage (pres. val.) (4) ($) | Total (5) ($) | | Anil Chakravarthy | | | | | | | | Death/Disability(6) | — | — | 8,223,359 | 6,035,861 | — | 14,259,220 | | Voluntary Termination/Involuntary Termination with Cause | — | — | — | — | — | — | | Involuntary Termination Without Cause/Resignation for Good Reason | — | — | — | — | — | — | | Involuntary Termination/Resignation for Good Reason upon COC(7) | 750,000 | 2,972,877(10) | 11,529,370 | 8,928,279 | 43,299 | 24,223,825 | | COC Only (continued employment)(8) | — | — | — | — | — | — | | COC Only/Equity Not Assumed or Substituted(9) | — | — | 11,529,370 | 8,928,279 | — | 20,457,649 | | David Wadhwani | | | | | | | | Death/Disability(6) | — | — | 1,103,483 | 4,088,796 | — | 5,192,279 | | Voluntary Termination/Involuntary Termination with Cause | — | — | — | — | — | — | | Involuntary Termination Without Cause/Resignation for Good Reason | — | — | — | — | — | — | | Involuntary Termination/Resignation for Good Reason upon COC(7) | 750,000 | 1,511,458(10) | 3,310,792 | 10,572,056 | 43,299 | 16,187,605 | | COC Only (continued employment)(8) | — | — | — | — | — | — | | COC Only/Equity Not Assumed or Substituted(9) | — | — | 3,310,792 | 10,572,056 | — | 13,882,848 | | Scott Belsky | | | | | | | | Death/Disability(6) | — | — | 6,258,537 | 3,214,823 | — | 9,473,360 | | Voluntary Termination/Involuntary Termination with Cause | — | — | — | — | — | — | | Involuntary Termination Without Cause/Resignation for Good Reason | — | — | — | — | — | — | | Involuntary Termination/Resignation for Good Reason upon COC(7) | 691,071 | 2,800,000 | 9,320,354 | 6,093,921 | 43,299 | 18,948,645 | | COC Only (continued employment)(8) | — | — | — | — | — | — | | COC Only/Equity Not Assumed or Substituted(9) | — | — | 9,320,354 | 6,093,921 | — | 15,414,275 |

  107. Potential Payments upon Termination and/or a Change of Control

    (1) This amount represents the fiscal year 2022 target annual cash incentive opportunity under the 2022 Cash Incentive Plan. The cash incentive opportunity amount is pro-rated for the elapsed time in the current incentive period, assuming that all performance targets have been met; therefore, the amount reported is 100% of the target annual cash incentive opportunity. Actual fiscal year 2022 bonuses earned by each NEO are reported in the column titled “Non-Equity Incentive Plan Compensation” in the “Summary Compensation Table.” (2) Based on the base salary and target bonus on December 2, 2022. (3) This amount includes the full acceleration of the number of shares at 100% of target under the 2020, 2021 and 2022 Performance Share Programs. As of December 2, 2022, the 2020 Performance Share Program's performance certification by the Committee was not completed; the 2021 and 2022 Performance Share Programs had not yet completed each of their respective performance periods. For purposes of this disclosure, achievement of performance is assumed to be 100%, but actual achievement may vary. The Committee’s certification of achievement under the 2020 Performance Share Program was completed in December 2022. See the discussion in the “Compensation Discussion and Analysis” section of this proxy statement for actual achievement amounts. (4) Amounts reported represent the present value of 18 months of COBRA payments with an estimated 3% premium increase every 12 months. The present value is calculated by using 120% of the short term applicable federal rate of 5.4%. (5) In accordance with the terms of the Change of Control Plan and Mr. Narayen’s Retention Agreement, all of the benefits in this table are subject to a reduction in the event the amounts payable would constitute an excess parachute payment within the meaning of Section 280G of the Code, to the extent the reduced benefits would result in a better after-tax economic position for the effected NEO. See footnote 10 below regarding Messrs. Chakravarthy’s and Wadhwani’s benefits. (6) For an explanation of benefits to be received by our NEOs as a result of death or disability, see “Executive Compensation—Grants of Plan-Based Awards in Fiscal Year 2022—Narrative Summary to Summary Compensation Table” above. (7) For an explanation of benefits received by our NEOs as a result of an involuntary termination or resignation for good reason upon a COC, see “Change of Control” above. (8) Assumes that all equity awards were assumed or substituted by the hypothetical acquiring company. No benefits are payable to the NEOs pursuant to the Change of Control Plan and there is no accelerated vesting pursuant to the terms of the applicable equity award agreements if the NEOs’ employment continues after a COC; however, Mr. Narayen’s Retention Agreement provides that all outstanding equity awards (provided that, for performance shares, vesting is solely to the extent shares are credited at the change of control) accelerate in vesting in full upon a COC, regardless of whether his employment is terminated. (9) Assumes that equity awards were not assumed or substituted by the hypothetical acquiring company. Pursuant to the terms of the applicable equity plans, any unvested portions of any outstanding equity awards that are not assumed or substituted by the acquiring company are immediately vested in full as of the date immediately prior to the effective date of the COC. (10) Messrs. Chakravarthy’s and Wadhwani’s total payments exceed their respective Section 280G thresholds, and a cutback of severance payments would result in a better after-tax economic position. Therefore, Messrs. Chakravarthy’s and Wadhwani’s payments are subject to a reduction and Messrs. Chakravarthy and Wadhwani would receive a reduced severance payment.

  108. Election of Directors

    Election of Directors We currently have twelve members of our Board, all of whose terms will expire at the 2023 Annual Meeting. Stockholders will vote for the twelve nominees listed above in the section titled “Board of Directors and Corporate Governance—Director Nominees” to serve for a one-year term expiring at our 2024 Annual Meeting of Stockholders. Each director will serve until such director’s successor has been elected and qualified or until such director’s earlier death, resignation or removal. Under the terms of our Restated Certificate of Incorporation, all directors of Adobe are elected to one-year terms and stand for election annually. Each of the nominees is currently a director of Adobe and has previously been elected by our stockholders. There are no family relationships among our directors or executive officers. If any nominee is unable or declines to serve as a director, the Board may designate another nominee to fill the vacancy and the proxy will be voted for that nominee.