DEF 14A of Teradata Corp /De/
Filed Mar 27, 2025 · FY20240000816761-25-000093
PROXY SUMMARY
PROXY SUMMARY This summary highlights information contained elsewhere in the proxy statement that is being provided to you by Teradata Corporation (“Teradata,” the “Company,” “we,” or “us”) in connection with our 2025 annual meeting of stockholders. This summary is not a complete description, and you should read the entire proxy statement carefully before voting. This proxy statement contains important information about the 2025 annual meeting of stockholders, as well as information regarding the voting process, director elections, our corporate governance programs, executive and director compensation, and other environmental, social and governance (“ESG”) matters, among other things. We are furnishing this proxy statement together with our 2024 annual report and form of proxy and voting instruction card (“proxy card”). We intend to send a Notice Regarding the Availability of Proxy Materials for the annual meeting and make proxy materials available to stockholders (or for certain stockholders, and for those who request, a paper copy of this proxy statement and proxy card) on or about March 27, 2025. On behalf of the Teradata Board of Directors, we are requesting your proxy for the 2025 annual meeting of stockholders and any adjournments or postponements that follow. Business Overview At Teradata, we believe that people thrive when empowered with trusted information. We are focused on helping organizations improve business performance, enrich customer experiences, and integrate data across the enterprise. As such, we strive to innovate and deliver trusted solutions for their toughest data and analytics challenges. That is why we built our open and connected hybrid cloud analytics and data platform for artificial intelligence ("AI"). With our hybrid cloud platform, named Teradata Vantage, underpinned by our extensive patented workload management optimization technology, we are well positioned to help enterprises deliver business breakthroughs and solve business problems with our capabilities to provide harmonized data, trusted AI, and faster innovation, at scale. As companies embrace AI, they need data at scale. Data at scale is the foundation of agentic and generative AI applications, and data at scale is what Teradata provides. We believe our platform provides companies with: •Harmonized Data: We strive to empower our customers to make more confident decisions with integrated data using our hybrid platform that has the capability to support both cloud and on-premises environments and is designed to be efficient, flexible, and secure. •Trusted AI: We believe that our platform provides our customers with powerful, open, and connected analytics – from machine learning ("ML") and traditional analytics to enabling AI that is designed to provide actionable, differentiated insights, and enhance enterprise value. •Faster Innovation: Our platform is designed to fuel our customer’s growth opportunities with AI/ML innovation that’s cost-effectively operationalized at scale. Teradata Vantage is our open and connected platform that is designed to allow organizations to leverage all their data across an enterprise, in a hybrid environment. Whether in public or private clouds, in multi-cloud, or on-premises, and at scale, Teradata Vantage comprises deployment options that are designed to address the full span of data analytics and AI needs while providing optimized total cost of ownership and financial governance: •Teradata VantageCloud: Our flexible, connected, and modern cloud platform and includes Teradata VantageCloud Lake, which is built on our cloud-native lake architecture, and Teradata VantageCloud Enterprise for managed enterprise workloads. •Teradata VantageCore: Our on-premises platform offering, which seamlessly integrates with our cloud offerings to enable hybrid environments for which we see increasing demand. Key capabilities of Teradata Vantage across all deployments are: •ClearScape Analytics™: ClearScape Analytics encompasses the end-to-end analytics capabilities integrated into our platform and is designed to be a secure, highly concurrent, and resilient analytics offering. ClearScape Analytics provides robust in-database engine analytics functionality, open and connected integrations, and operationalization at scale for more effective data preparation, advanced analytics, and AI/ML performance.
PROXY SUMMARY
| 2025 PROXY STATEMENT | 1 |
PROXY SUMMARY
•Query Grid™: Query Grid is our "data fabric," a data integration and management layer included with our hybrid platform. Query Grid serves as the connective tissue in multi-cloud, as well as between cloud and on-premises environments. This technology innovation is designed to bring data together and enable consistent data access across the ecosystem, so that users can query data regardless of where it lies, thereby reducing data silos, and potentially saving the expense of moving data. With our data fabric, we enable data analytics integration across public clouds for a multi-cloud experience. Our data fabric is designed to provide our customers with the analytic capabilities to deliver trusted data—data that is secure and well governed—while controlling costs. 2024 Financial Highlights
PROXY SUMMARY
| $1.474B TOTAL ANNUAL RECURRING REVENUE (“ARR”)(1) | $609M PUBLIC CLOUD ARR(2) | $303M CASH FLOW FROM OPERATIONS | 85% RECURRING REVENUE AS A % OF TOTAL REVENUE | | $1.16 GAAP DILUTED EPS | $2.42 NON-GAAP DILUTED EPS(3) | $277M FREE CASH FLOW(3) | |
PROXY SUMMARY
(1)Total Annual Recurring Revenue (“ARR”) is defined as the annual value at a point in time of all recurring contracts, including subscription, cloud, software upgrade rights, and maintenance. Total ARR does not include managed services and third-party software. Teradata believes this is a useful metric to investors as it demonstrates progress toward achieving our strategic objectives as outlined in our periodic reports filed with the Securities and Exchange Commission (the "SEC"). (2)Public cloud ARR (included within Total ARR) is defined as the annual value at a point in time of all contracts related to public cloud implementations of Teradata VantageCloud and does not include ARR related to private or managed cloud implementations. Teradata believes this is a useful metric to investors as it demonstrates progress toward achieving our strategic objectives as outlined in our periodic reports filed with the SEC. (3)Non-GAAP Diluted EPS and Free Cash Flow are non-GAAP financial measures. Please refer to Appendix B to this proxy statement for definitions and reconciliations to the GAAP financial measures.
PROXY SUMMARY
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PROXY SUMMARY
Voting Methods – Your Vote is Important! Even if you plan to attend the 2025 annual meeting of stockholders virtually, we urge you to vote in advance of the meeting using one of these advance voting methods.
PROXY SUMMARY
| | | | | | By Internet: www.proxyvote.com | By Phone: 1-800-690-6903 | By Mail: 51 Mercedes Way Edgewood, NY 11717 | By Mobile Device: Scan the QR code on your Notice or Proxy Card |
PROXY SUMMARY
2025 Virtual Annual Meeting Information
PROXY SUMMARY
| Date and Time: | May 15, 2025 at 8:00 a.m. (Pacific Time) | | Format: | We will hold a virtual annual meeting. Stockholders will be able to listen, vote and submit questions from any location that has internet connectivity. We believe that this format provides the opportunity for broader stockholder attendance and participation, while reducing the costs and environmental impact associated with planning, holding, and arranging logistics for an in-person meeting. | | Record Date: | All common stockholders of record as of March 20, 2025 may vote. Each outstanding share of common stock is entitled to one vote on each matter to be voted upon at the annual meeting. | | Admission: | Attend the annual meeting online, including to vote and/or submit questions, at www.virtualshareholdermeeting.com/TDC2025. You will need to use your 16-digit Control Number provided in the Notice, proxy card or instructions that accompanied your proxy materials, to log in to this website and access the live audio webcast of the meeting. If you are a beneficial owner (and thus hold your shares in an account at a bank, broker, or other holder of record), you will need to contact the bank, broker, or other holder of record to obtain your control number prior to the meeting. Please refer to “Other General Information” for more information about attending the annual meeting. | | Logistics: | We encourage you to access the annual meeting prior to the start time. Please allow ample time for online check-in, which will begin at 7:45 a.m. Pacific Time. We will offer live technical support during the meeting. If you encounter any technical difficulties accessing the meeting, please call the number listed on the shareholder log-in page for technical support. | | Voting During Meeting: | Stockholders should follow the instructions to vote during the annual meeting at www.virtualshareholdermeeting.com/TDC2025. Shares held in your name as the stockholder of record may be voted electronically during the annual meeting. Shares for which you are the beneficial owner also may be voted during the annual meeting if you contact the nominee holding the shares before the meeting and obtain a control number for your shares. However, even if you plan to attend the virtual annual meeting, we recommend that you vote your shares in advance, so that your vote will be counted if you later decide not to attend the virtual annual meeting. | | Asking Questions: | Stockholders may submit questions online during the meeting at www.virtualshareholdermeeting.com/TDC2025. We will answer questions as time permits at the meeting. Rules governing the conduct of the annual meeting (including the question and answer session) will be posted on the virtual meeting platform along with an agenda. | | Post Meeting: | Following the meeting, we will post to the Investor Relations section of our website (www.teradata.com) a replay of the annual meeting (including the question and answer session). We will include the results of the votes taken at the meeting in a quarterly report on Form 10-Q or a current report on Form 8-K, as applicable, which will be filed with the Securities and Exchange Commission and also be posted to the Investor Relations section of our website. You may also find information on how to obtain a transcript of the meeting by writing to our Corporate Secretary at Teradata Corporation, 17095 Via Del Campo, San Diego, CA 92127. |
PROXY SUMMARY
| 2025 PROXY STATEMENT | 3 |
PROXY SUMMARY
Meeting Agenda
PROXY SUMMARY
| MATTER | | BOARD VOTE RECOMMENDATION | | Proposal 1 | Consider and vote upon the election of Messrs. Gianoni and McElhatton and Ms. Olsen to serve as Class III directors for three-year terms expiring at the 2028 annual meeting of stockholders and to hold office until their respective successors are duly elected and qualified | FOR each nominee | | Proposal 2 | Consider an advisory (non-binding) vote to approve executive compensation (a “say-on-pay” vote) | FOR | | Proposal 3 | Consider and vote upon the approval of the amended and restated Teradata 2023 Stock Incentive Plan | FOR | | Proposal 4 | Consider and vote upon the ratification of the appointment of our independent registered public accounting firm for 2025 | FOR |
PROXY SUMMARY
Board of Directors
PROXY SUMMARY
| NAME | CLASS | AGE | POSITION | | Daniel R. Fishback | I | 63 | Director | | Steve McMillan | I | 54 | President and Chief Executive Officer and Director | | Kimberly K. Nelson | I | 57 | Director | | Lisa R. Bacus | II | 61 | Director | | Timothy C.K. Chou | II | 70 | Director | | John G. Schwarz | II | 74 | Director | | Michael P. Gianoni* | III | 64 | Chairman | | Todd E. McElhatton* | III | 58 | Director | | Joanne B. Olsen* | III | 66 | Director |
PROXY SUMMARY
*Nominees for election Key Qualifications and Attributes
PROXY SUMMARY
| ●●●●●●●●● | 100% | ●●●●●●●●● | 100% | | Leadership Experience | | Financial / Accounting Literacy | | | ●●●●●●●●● | 100% | ●●●●●●●●● | 89% | | Cloud Technology, Data Analytics, Software Expertise | | Global Business Experience | |
PROXY SUMMARY
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PROXY SUMMARY
Governance Highlights Teradata has adopted many governance practices that establish strong independent leadership in our Boardroom and provide our stockholders with meaningful rights, including:
PROXY SUMMARY
| ✓ Independent Board •8 of 9 directors are independent •All Audit, Compensation, and Governance Committee members are independent | | ✓ Separate Chair and CEO Roles •Independent non-executive Chairman | | ✓ Regular Executive Sessions of independent directors at Board and committee meetings | | ✓ Active Board Oversight •Strategy •Risk and operational plans, including Cybersecurity and ESG matters | | ✓ Anti-Hedging/Pledging and Clawback Policies to prohibit hedging and pledging and to recover cash or equity incentive compensation based on financial results that were later restated and cancel outstanding equity awards and recover realized gains if executives are terminated for cause or engage in certain other harmful activity |
PROXY SUMMARY
| ✓ Qualified Board and Management •Extensive executive experience at global, public companies •Knowledge of software and technology industries, including cloud-based technologies •Diverse perspectives and backgrounds | | ✓ Board Refreshment and Succession Planning •2 new independent directors in the past 5 years •Ongoing succession planning by Governance Committee and the Board | | ✓ Independent Compensation Consultant engaged to advise on compensation of our executives and directors | | ✓ Robust Stock Ownership Guidelines for directors and executive officers | | ✓ Ongoing Stockholder Engagement results in impactful changes to executive compensation and corporate governance programs and informs ESG initiatives |
Board Independence
Board Independence 89% INDEPENDENT
Board Tenure
Board Tenure 7.9 YEARS AVERAGE TENURE
Board Tenure
| 2025 PROXY STATEMENT | 5 |
ELECTION OF DIRECTORS (Item 1 on Proxy Card)
ELECTION OF DIRECTORS (Item 1 on Proxy Card) The Board of Directors is currently divided into three classes. Directors are elected by stockholders for terms of three years and hold office until their successors are elected and qualified. One of the three classes is elected each year to succeed the directors whose terms are expiring. As of the 2025 annual meeting, the terms for the directors in Classes III, I, and II of the Board of Directors expire in 2025, 2026, and 2027, respectively. Messrs. Gianoni and McElhatton and Ms. Olsen are Class III directors whose terms are expiring at the 2025 annual meeting. Each of the Class III directors has been nominated by the Board for re-election through the 2028 annual meeting of stockholders and until their respective successors are elected and qualified. Proxies solicited by the Board will be voted for the election of the nominees, unless you instruct otherwise on your proxy. Each of the nominees is willing to serve if elected. The Board has no reason to believe that these nominees will be unable to serve. However, if any one of them should be unable to serve, the Board may further reduce the size of the Board or designate a substitute nominee. If the Board designates a substitute, shares represented by proxies will be voted for the substitute nominee.
ELECTION OF DIRECTORS (Item 1 on Proxy Card)
| | The Board of Directors recommends that you vote FOR the election of each of the Class III nominees as a director. |
ELECTION OF DIRECTORS (Item 1 on Proxy Card)
Election of each nominee requires the votes cast for such nominee’s election to exceed the votes cast against such nominee’s election. If a nominee does not receive a majority vote, he or she is required to tender their resignation for consideration by the disinterested members of the Board of Directors in accordance with our Corporate Governance Guidelines. Proxies solicited by the Board of Directors will be voted FOR each nominee, unless you specify otherwise in your proxy. Abstentions and shares that are the subject of a broker “non-vote” will be deemed absent and have no effect on the outcome of the vote. Director Qualifications and Attributes Our Board of Directors currently consists of nine members whom we believe are extremely well-qualified to serve on the Board and represent our stockholders’ best interests. As described under the caption “Selection of Nominees for Directors,” the Board and its Nominating and Governance Committee (the “Governance Committee”) select nominees with a view to establishing a Board of Directors that is comprised of members who: •have extensive business leadership experience, •bring diversity of experiences, expertise, and backgrounds, •are independent and collegial, •have high ethical standards as well as sound business judgment and acumen, and •understand and are willing to make the time commitment necessary for the Board to effectively fulfill its responsibilities. We believe that each of the director nominees and other directors bring these qualifications to our Board of Directors. Moreover, as reflected in the below qualifications matrix, they provide our Board with a diverse complement of specific business skills, experience, and perspectives, including: extensive financial and accounting experience, public-company board experience, knowledge of the technology and software industries and of Teradata’s business, including cloud-based technologies, experience with companies with a global presence and with growth and/or transformation strategies, and extensive operational and strategic planning experience.
ELECTION OF DIRECTORS (Item 1 on Proxy Card)
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ELECTION OF DIRECTORS (Item 1 on Proxy Card)
| | Stephen McMillan | Lisa R. Bacus | Timothy C.K. Chou | Daniel R. Fishback | Michael P. Gianoni | Todd E. McElhatton | Kimberly K. Nelson | Joanne B. Olsen | John G. Schwarz | | Qualifications and Expertise | | | | | | | | | | | Cloud technology, data analytics, and/or software expertise: Background in technology, data analytics, and software bring critical understanding of our industry and the trends and innovation that shape our products, go to market approach, and cloud and AI strategies. | | | | | | | | | | | | ● | ● | ● | ● | ● | ● | ● | ● | ● | | Leadership experience: Executive leadership experience provides a practical understanding of organizational dynamics, strategic planning, risk management, talent development, and succession planning and provides oversight in our transformation. | | | | | | | | | | | | ● | ● | ● | ● | ● | ● | ● | ● | ● | | Financial/Accounting literacy: Directors with strong financial acumen contribute to our board’s understanding of complex financial management, capital structure and allocation, financial markets, financing activities, and financial reporting and internal controls. | | | | | | | | | | | | ● | ● | ● | ● | ● | ● | ● | ● | ● | | Global business experience: Experience in, and exposure to, operating markets around the world, provides an understanding of diverse business environments, economic conditions, cultures, and regulatory frameworks, and a broad perspective on global challenges and market opportunities. | | | | | | | | | | | | ● | ● | ● | ● | ● | ● | | ● | ● | | Sales, marketing, or branding background: Experience developing or overseeing strategies to grow sales and market share, build brand awareness and equity, and evolve customer perception. | | | | | | | | | | | | ● | ● | ● | ● | ● | | | ● | ● | | Tenure and Independence | | | | | | | | | | | Tenure (as of annual meeting) | 4 | 10 | 8 | 8 | 10 | 2 | 5 | 6 | 14 | | Independent | | ● | ● | ● | ● | ● | ● | ● | ● |
ELECTION OF DIRECTORS (Item 1 on Proxy Card)
The Board believes that each of the director nominees and other directors have demonstrated outstanding achievement in his or her professional career, the willingness to participate actively in board activities and share policy-making and strategic thinking experiences, an ability to articulate independent perspectives, make analytical inquiries and take tough positions that challenge management, and a high degree of personal and professional integrity. The following biographies describe the key qualifications, business skills, experience and perspectives that each of our directors brings to the Board of Directors, in addition to the general qualifications and attributes described above. Based on all of these qualifications and attributes, we believe that the directors and nominees have the appropriate set and complement of skills to serve as members of the Board.
ELECTION OF DIRECTORS (Item 1 on Proxy Card)
| 2025 PROXY STATEMENT | 7 |
ELECTION OF DIRECTORS (Item 1 on Proxy Card)
2025 Director Nominees Class III — Current Terms Expiring in 2025:
ELECTION OF DIRECTORS (Item 1 on Proxy Card)
| | | Michael P. Gianoni | | | | Qualifications and Expertise Aligned to Our Strategy | | | | Mr. Gianoni is a seasoned technology and software executive who brings significant industry expertise and a proven track record of driving financial performance improvement to Teradata’s Board of Directors. As CEO of a global, publicly traded SaaS company, he provides international leadership experience and a C-Suite perspective on our management and organizational priorities. As our Independent Chair, Mr. Gianoni has helped lead Teradata through the successful execution of various strategic, operational, and financial milestones. Professional Experience •President and Chief Executive Officer of Blackbaud, a provider of cloud-based software and services specifically designed for nonprofit, education, and company organizations (2014 – Present); Vice Chairman (since 2024) •Executive Vice President and President of Financial Institutions at Fiserv, a global technology provider serving the financial services industry (2010 – 2013) •President of Investment Services at Fiserv (2007 – 2010) •Executive Vice President and General Manager of CheckFree Corporation, a leading provider of financial e-commerce solutions (2006 – 2007) •Various senior positions at DST Systems Inc., a global provider of technology-based services solutions (1994 – 2005) Public Company Board Experience •President and Chief Executive Officer and Director of Blackbaud (2014 – Present); Vice Chairman (since 2024) Education •Honorary Doctorate, University of New Haven •M.B.A., University of New Haven •A.S. in Electrical Engineering, Waterbury State Technical College •B.S., Charter Oak State College | | Age 64 | | | | Independent Chairman Joined in 2015 Committees Executive (Chair), Nominating and Governance (Chair) Expertise | | | | | Cloud Technology, Data Analytics and Software | | | | Leadership Experience | | | | Financial / Accounting Literacy | | | | Global Business | | | | Sales, Marketing or Branding Background | |
ELECTION OF DIRECTORS (Item 1 on Proxy Card)
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ELECTION OF DIRECTORS (Item 1 on Proxy Card)
| | | Todd E. McElhatton | | | | Qualifications and Expertise Aligned to Our Strategy | | | | Mr. McElhatton brings more than 20 years of corporate finance leadership in enterprise software, including experience as a public company CFO. His track record of accelerating enterprise growth and effective capital allocation oversight have been critical to assisting Teradata in achieving its long-term financial goals. Mr. McElhatton’s expertise in overseeing forecasting, planning, risk management, and driving operational efficiencies, including experience with pricing strategies, has significantly contributed to overseeing our financial objectives. He is also considered an audit committee financial expert. Professional Experience •Chief Financial Officer at Zuora, a cloud-based subscription management software company (2020 – Present) •Senior Vice President and Chief Financial Officer of the Cloud Business Group at SAP, a multinational software company (2018 – 2020) •Senior Vice President and Chief Financial Officer of SAP North America (2017 – 2018) •Vice President and Chief Financial Officer of Hybrid Cloud Business at VMware, a virtualization and cloud infrastructure solutions company (2014 – 2017) •Various senior positions at Oracle Corporation and Hewlett Packard Public Company Board Experience •N/A Education •M.B.A., University of Tennessee •B.A. in Business Administration, Southern Methodist University | | Age 58 | | | | Independent Director Joined in 2022 Committees Audit Expertise | | | | | Cloud Technology, Data Analytics and Software | | | | Leadership Experience | | | | Financial / Accounting Literacy | | | | Global Business | |
ELECTION OF DIRECTORS (Item 1 on Proxy Card)
| 2025 PROXY STATEMENT | 9 |
ELECTION OF DIRECTORS (Item 1 on Proxy Card)
| | | Joanne B. Olsen | | | | Qualifications and Expertise Aligned to Our Strategy | | | | With a track record of execution in the technology industry, Ms. Olsen brings extensive cloud transformation, professional services, and strategy expertise to Teradata. Following over three decades of experience in executive management positions across sales, global financing, and hardware, she has a proven ability to oversee best-in-class operations, coordinate partnerships across multiple business units, and drive transformative strategy changes, all of which have been critical to overseeing Teradata’s transformation. Professional Experience •Executive Vice President of Cloud Services and Support at Oracle Corporation, a global software and services company (2016 – 2017) •Senior Vice President and Leader of Oracle’s applications sales, alliances and consulting organizations in North America (2010 – 2016) •Various executive management positions across sales, global financing and hardware during her over 30 year career at at IBM Corporation Public Company Board Experience •Independent Director of Keysight Technologies (2019 – Present) •Independent Director of Ciena Corporation (2018 – Present) Education •B.A. in Mathematics, Economics and Accounting, East Stroudsburg University | | Age 66 | | | | Independent Director Joined in 2018 Committees Audit Expertise | | | | | Cloud Technology, Data Analytics and Software | | | | Leadership Experience | | | | Financial / Accounting Literacy | | | | Global Business | | | | Sales, Marketing or Branding Background | |
ELECTION OF DIRECTORS (Item 1 on Proxy Card)
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ELECTION OF DIRECTORS (Item 1 on Proxy Card)
Other Directors Class I — Current Terms Expiring in 2026:
ELECTION OF DIRECTORS (Item 1 on Proxy Card)
| | | Daniel R. Fishback | | | | Qualifications and Expertise Aligned to Our Strategy | | | | As the former CEO of a global, publicly traded SaaS company, Mr. Fishback brings significant management and leadership experience to Teradata’s Board of Directors. Mr. Fishback’s financial acumen, developed through his decades of experience serving in executive, director and advisor capacities at both public and private technology companies, provides unique oversight of our long-term strategy. His proven track record of driving financial growth, product development, and leading M&A has supported Teradata’s strategic priorities. Professional Experience •Co-CEO of UserZoom, a user behavior and analytics platform provider (2018 – 2022) and Chair of the Board (2015 – 2022) •President and CEO and Director of DemandTec, a provider of a cloud-based collaborative optimization network (2001 – 2013) •Vice President of Channels for Ariba, a provider of solutions to help companies manage their corporate spending (2000 – 2001) •Various sales and executive leadership positions at Trading Dynamics Company and Hyperion Solutions Corporation Public Company Board Experience •Independent Director of Qumu Corporation (2013 – 2023) •President and CEO and Director of DemandTec (2001 – 2013) •Independent Director of SPS Commerce (2011 – 2012) •Independent Director of CorVu (2005 – 2007) Education •B.A, in Business Administration, University of Minnesota-Duluth | | Age 63 | | | | Independent Director Joined in 2017 Committees Executive, Compensation and People (Chair) Expertise | | | | | Cloud Technology, Data Analytics and Software | | | | Leadership Experience | | | | Financial / Accounting Literacy | | | | Global Business | | | | Sales, Marketing or Branding Background | |
ELECTION OF DIRECTORS (Item 1 on Proxy Card)
| 2025 PROXY STATEMENT | 11 |
ELECTION OF DIRECTORS (Item 1 on Proxy Card)
| | | Stephen McMillan | | | | Qualifications and Expertise Aligned to Our Strategy | | | | Mr. McMillan is a seasoned technology executive with a track record of transforming enterprise product and services businesses into industry-leading cloud portfolio offerings. As our CEO, he brings a unique perspective on the Company’s operations, strategy, customers, and financial position. Through his decades of experience in leadership roles at cloud-based technology companies, Mr. McMillan has developed a collaborative leadership style, acute focus on operational execution, and dedication to customer success. Professional Experience •President and Chief Executive Officer, Teradata Corporation (2020 – Present) •Executive Vice President of Global Services at F5 Networks, a global application services and application delivery networking company (2017 – 2020) •Senior Vice President of Customer Success and Managed Cloud Services at Oracle Corporation, a multinational computer technology corporation (2015 – 2017) •Senior Vice President of Managed Cloud Services at Oracle (2012 – 2015) •Vice President of Strategic Outsourcing at IBM (2009 – 2012) •Vice President, CIO of Global Services at IBM (2007 – 2009) •Various senior management positions at IBM Corporation (1993 – 2007) Public Company Board Experience •N/A Education •B.S. in Management and Computer Science, Aston University | | Age 54 | | | | President and CEO Joined in 2020 Committees Executive Expertise | | | | | Cloud Technology, Data Analytics and Software | | | | Leadership Experience | | | | Financial / Accounting Literacy | | | | Global Business | | | | Sales, Marketing or Branding Background | |
ELECTION OF DIRECTORS (Item 1 on Proxy Card)
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ELECTION OF DIRECTORS (Item 1 on Proxy Card)
| | | Kimberly K. Nelson | | | | Qualifications and Expertise Aligned to Our Strategy | | | | An experienced public company CFO who brings over 20 years of senior executive leadership at cloud-based solutions companies, Ms. Nelson’s financial expertise has significantly contributed to Teradata’s long-term vision. Her experience overseeing financial and growth strategies through her roles in planning, analysis, investor relations, and forecasting is particularly helpful to overseeing Teradata’s strategy. She is also considered an audit committee financial expert. Professional Experience •Executive Vice President and Chief Financial Officer at SPS Commerce, a provider of cloud-based supply chain management solutions (2007 – Present) •Investor Relations and Senior Finance positions at Amazon (2000 – 2007) •Director, Finance at The Pillsbury Company, LLC, a subsidiary of General Mills, Inc. (1997 – 2000) Public Company Board Experience •Independent Director of Calyxt, Inc. (2019 – 2023) •Independent Director of Qumu Corporation (2012 – 2019) Education •M.B.A., University of St. Thomas •B.S. in Finance, Babson College | | Age 57 | | | | Independent Director Joined in 2019 Committees Executive, Audit (Chair) Expertise | | | | | Cloud Technology, Data Analytics and Software | | | | Leadership Experience | | | | Financial / Accounting Literacy | |
ELECTION OF DIRECTORS (Item 1 on Proxy Card)
| 2025 PROXY STATEMENT | 13 |
ELECTION OF DIRECTORS (Item 1 on Proxy Card)
Class II Nominees — Current Terms Expiring in 2027:
ELECTION OF DIRECTORS (Item 1 on Proxy Card)
| | | Lisa R. Bacus | | | | Qualifications and Expertise Aligned to Our Strategy | | | | With over 30 years of senior leadership experience at global Fortune 100 companies, Ms. Bacus brings decades of marketing expertise with focus on strategic planning and data analytics. Ms. Bacus’ unique understanding of relationship management, customer experience, operations, and international business have been critical to Teradata’s long-term strategy. Through her involvement in various organizations, including Prospanica and the Latino Corporate Directors Association, she is recognized as an advocate for sustainable business practices. Professional Experience •Executive Vice President and Chief Marketing Officer at Cigna Corporation, a global health care services company (2013 – 2019) •Executive Vice President and Chief Marketer at American Family Insurance Group, a personal and commercial property and casualty company (2011 – 2013); Vice President, Marketing (2008 – 2011) •Various executive leadership positions, including Executive Director of Global Market Research and Insights, Executive Director of Global Marketing Strategy, and head of marketing for Ford in Mexico at Ford Motor Company (1986 – 2008) Public Company Board Experience •Independent Director of Douglas Dynamics (2020 – Present) •Independent Director of Selective Insurance Group (2020 – Present) Education •M.B.A. in Global Business Administration, Duke University •B.S. in Management, B.A. in Spanish, Northern Arizona University | | Age 61 | | | | Independent Director Joined in 2015 Committees Nominating and Governance Expertise | | | | | Cloud Technology, Data Analytics and Software | | | | Leadership Experience | | | | Financial / Accounting Literacy | | | | Global Business | | | | Sales, Marketing or Branding Background | |
ELECTION OF DIRECTORS (Item 1 on Proxy Card)
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ELECTION OF DIRECTORS (Item 1 on Proxy Card)
| | | Timothy C.K. Chou | | | | Qualifications and Expertise Aligned to Our Strategy | | | | Through more than 30 years of leadership, technology operations, academia, and entrepreneurship, Dr. Chou brings extensive experience in SaaS and cloud computing with unparalleled expertise in both building and selling enterprise technologies and predicting future technology direction. His work with startups on workflow, analytic cloud-based applications, and AI are especially important to guiding Teradata’s cloud and AI strategies. Dr. Chou has been recognized as a thought leader on enterprise software, as an author on cloud computing and Internet of Things, and for his teaching on cloud computing and computer science in the U.S. and China. His 2004 landmark book, "The End of Software," foretold the rise of SaaS/cloud computing and featured four startups, including Salesforce, VMware and NetSuite. Professional Experience •President of Oracle On Demand, a division of Oracle Corporation, an American multinational computer technology corporation (1999 – 2005) •Chief Operating Officer of Reasoning, Inc., a pioneering application services provider (1996 – 1999); Chief Technology Officer (1994 – 1995) •Chairman of the Alchemist Accelerator, a leading enterprise software accelerator where he is focused on analytics, artificial intelligence and the Internet of Things (2013 – Present) •Lecturer at Stanford University (launching its first cloud-computing class) (1982 – Present) Public Company Board Experience •Independent Director of Blackbaud (2007 – 2023) •Independent Director of Embarcadero Technologies (2000 – 2007) Education •M.S. and Ph.D. in Electrical Engineering, University of Illinois (Urbana-Champaign) •B.S. in Electrical Engineering, North Carolina State University | | Age 70 | | | | Independent Director Joined in 2017 Committees Compensation and People Expertise | | | | | Cloud Technology, Data Analytics and Software | | | | Leadership Experience | | | | Financial / Accounting Literacy | | | | Global Business | | | | Sales, Marketing or Branding Background | |
ELECTION OF DIRECTORS (Item 1 on Proxy Card)
| 2025 PROXY STATEMENT | 15 |
ELECTION OF DIRECTORS (Item 1 on Proxy Card)
| | | John G. Schwarz | | | | Qualifications and Expertise Aligned to Our Strategy | | | | As a company founder as well as a former CEO of industry-leading business software firms, Mr. Schwarz’s deep understanding of technology, data science and analytics has been critical to overseeing Teradata’s strategic goals. With over 30 years of global experience overseeing complex and scaled operations, he provides an executive level perspective on organizational dynamics which has significantly assisted Teradata’s leadership team. He has also been recognized for his significant cybersecurity expertise and broad experience operating technology companies. Professional Experience •Co-founder and Chairman of Visier, a business analytics cloud-based software firm (since 2010); previously CEO of Visier (2010 – 2020) •Chief Executive Officer of Business Objects, a provider of business intelligence software (2005 – 2008), until its acquisition by SAP; Mr. Schwarz subsequently served as CEO of SAP Business Objects (2008 – 2010) •President and Chief Operating Officer of Symantec Corporation, a provider of infrastructure security and storage management (2001 – 2005) •President and Chief Executive Officer of Reciprocal, which provided business-to-business secure e-commerce services for digital content distribution over the Internet (2000 – 2001) •25 years at IBM Corporation with his last position being General Manager of IBM’s Industry Solutions unit, a worldwide organization focused on building business applications and related services for IBM’s large industry customers •Chairman of the Board of Mambu BD, a Netherlands-based cloud provider of core banking applications (2024 – Present) Public Company Board Experience •Independent Director of Synopsys (2007 – Present) •Independent Director of Avast plc (2011 – 2022); Chairman (2014 – 2022) •Independent Director of SuccessFactors (2010 – 2011) Education •Honorary Doctorate, Dalhousie University •B.S. in Computer Science, University of Manitoba | | Age 74 | | | | Independent Director Joined in 2010 Committees Compensation and People Expertise | | | | | Cloud Technology, Data Analytics and Software | | | | Leadership Experience | | | | Financial / Accounting Literacy | | | | Global Business | | | | Sales, Marketing or Branding Background | |
ELECTION OF DIRECTORS (Item 1 on Proxy Card)
No Family Relationships or Arrangements No family relationship exists among any of the directors, nominees or executive officers. No arrangement or understanding exists between any director, nominee, or executive officer and any other person pursuant to which any director, nominee or executive officer was selected as a director, nominee or executive officer of the Company.
ELECTION OF DIRECTORS (Item 1 on Proxy Card)
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DIRECTOR COMPENSATION
DIRECTOR COMPENSATION Teradata’s Director Compensation Program is designed to enhance our ability to attract and retain highly qualified independent directors and to align their interests with the long-term interests of our stockholders. The program consists of both a cash component, designed to compensate independent directors for their service on the Board and its committees, and an equity component, designed to align the interests of independent directors and stockholders. The compensation of the Company’s non-employee directors under the Director Compensation Program is reviewed on an annual basis by the Governance Committee with competitive benchmarking provided periodically by an independent compensation consultant retained by the committee. For 2024, the Governance Committee engaged Aon to conduct a competitive market analysis of Teradata’s director compensation levels compared to the Company’s peers, using Teradata’s executive compensation peer group at the time. Following this process and on the recommendation of Aon, the Governance Committee determined that the compensation levels were reasonable, aligned with current and best practices, and within market levels and, therefore, no changes were made to the director compensation levels. Annual Retainers The Director Compensation Program, for the 2024 – 2025 board year (the period between the Company’s annual stockholders’ meetings), includes the following annual retainers for service on the Board which remained unchanged from the prior board year:
DIRECTOR COMPENSATION
| Each non-employee director for board service | $60,000 | | Additional retainers: | | | Non-executive Chairman of the Board of Directors | $120,000 | | Each Audit Committee member (including the Chair) | $15,000 | | Each Compensation and People Committee member (including the Chair) | $10,000 | | Each Governance Committee member (including the Chair) | $5,000 | | Governance Committee Chair | $15,000 | | Audit Committee Chair | $35,000 | | Compensation and People Committee Chair | $25,000 |
DIRECTOR COMPENSATION
Prior to January 1 of each year, a director may elect to receive all or a portion of his or her annual retainer in Teradata common stock instead of cash. In addition, a director may elect to defer receipt of shares of common stock payable in lieu of cash. Payments for deferred stock may be made only in shares of Teradata common stock. Annual Equity Grant The Director Compensation Program provides that, on the date of each annual meeting of stockholders, each non-employee director will be granted restricted share units (“RSUs”) to purchase a number of shares of Teradata common stock in an amount determined by the Governance Committee and approved by the Board. For the 2024 – 2025 board year, each of the non-employee directors received an annual equity grant on May 14, 2024 consisting of RSUs with a total dollar value of $250,000. The RSUs vest over a one-year period in four equal quarterly installments, and directors may elect to defer receipt of their vested shares.
DIRECTOR COMPENSATION
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DIRECTOR COMPENSATION
Initial Equity Grant The Director Compensation Program also provides that upon initial election to the Board, each non-employee director will receive a grant of RSUs, with the same vesting schedule as the annual grant described above. For the 2024 – 2025 board year, the initial equity grant consisted of RSUs with a total dollar value of $75,000. Similar to the annual grant, a director may elect to defer receipt of the vested shares subject to the RSUs. No director received an initial equity grant in 2024. Mid-Year Equity Grant Under the Director Compensation Program, for directors that are newly elected to the Board after the annual meeting of stockholders, the Board has the discretion, based on the recommendation of the Governance Committee, to grant a mid-year equity grant in the form of stock options and/or awards of restricted shares or RSUs to such newly elected directors. A mid-year equity grant, if awarded, can be made in lieu of an annual equity grant for new directors who begin service after the annual grants described above are awarded and historically have been made to establish pay equity for directors. Mid-year equity grants made in the form of RSUs have the same vesting schedule and deferral alternatives as the annual grants described above. Option grants made in connection with a mid-year equity grant will be fully vested and exercisable on the first anniversary of the grant. No director received a mid-year grant in 2024. Director Compensation Limits As provided in our Teradata 2023 Stock Incentive Plan, there is an upper total limit on annual director compensation equal to the sum of any cash compensation and the value (determined as of the grant date in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, or any successor thereto) of awards granted to a director as compensation for services as a member of our Board during any fiscal year of $500,000. Benefits We do not provide any retirement or other benefit programs to our non-employee directors. 2024 Director Compensation Table The following table provides information on compensation paid to our non-employee directors in 2024.
DIRECTOR COMPENSATION
| NAME | FEES EARNED OR PAID IN CASH(1) ($) | STOCK AWARDS(2)(3) ($) | TOTAL ($) | | Lisa Bacus | 65,000 | 235,033 | 300,033 | | Timothy Chou | 70,000 | 235,033 | 305,033 | | Daniel Fishback | 95,000 | 235,033 | 330,033 | | Michael Gianoni, Chairman | 200,000 | 235,033 | 435,033 | | Todd McElhatton | 75,000 | 235,033 | 310,033 | | Kimberly Nelson | 110,000 | 235,033 | 345,033 | | Joanne Olsen | 75,000 | 235,033 | 310,033 | | John Schwarz | 70,000 | 235,033 | 305,033 |
DIRECTOR COMPENSATION
(1)Represents the annual cash retainers earned for 2024.
DIRECTOR COMPENSATION
| 2025 PROXY STATEMENT | 37 |
DIRECTOR COMPENSATION
(2)This column shows the aggregate grant date fair value, as determined in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation – Stock Compensation, of the (i) annual award of an RSU representing 6,927 shares of the Company’s common stock that were granted to our non-employee directors on May 14, 2024 for the 2024 – 2025 board year (the “Annual Director RSU”). See Note 7 of the Notes to Consolidated Financial Statements contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 (our “2024 Annual Report”) for an explanation of the assumptions we made in the valuation of these awards. The per share grant date fair value, which is the value reflected in the table above, of the Annual Director RSU is $33.93. The number of RSUs underlying the Annual Director RSU was determined by dividing $250,000 by $36.09, which stock price reflects the average of the closing per-share price of Teradata common stock for the 20 trading days immediately preceding the date of the equity award (the “20-Day Average”). The number of unvested RSUs outstanding as of December 31, 2024 for each of the non-employee directors is 3,464 for each of the directors. (3)There were no options granted to the non-employee directors for the 2024 – 2025 board year. In addition, none of our non-employee directors had any option awards outstanding as of December 31, 2024. Director Stock Ownership Guidelines Under the Board’s Corporate Governance Guidelines, each director should hold stock valued at no less than five times the amount of the $60,000 annual retainer paid to such director within five years after he or she is first elected to the Teradata Board of Directors. Stock or stock units beneficially owned by the director, for which beneficial ownership is not disclaimed, including stock or stock units held in a deferral account, are taken into account. As of December 31, 2024, all of our directors were in compliance with these ownership guidelines. NO INCORPORATION BY REFERENCE In our filings with the SEC, information is sometimes “incorporated by reference.” This means that we are referring you to information that has previously been filed with the SEC and the information should be considered as part of the particular filing. As provided under SEC regulations, the following “Compensation and People Committee Report on Executive Compensation” and the “Audit Committee Report” contained in this proxy statement specifically are not incorporated by reference into any other filings with the SEC and shall not be deemed to be “Soliciting Material” under SEC rules. In addition, this proxy statement includes several website addresses. These website addresses are intended to provide inactive, textual references only. The information on these websites is not part of this proxy statement.
DIRECTOR COMPENSATION
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Section 1: EXECUTIVE SUMMARY
Notes: The following defined terms apply to the above disclosure: •The impact of currency is determined by calculating the prior-period results using the current-year monthly average currency rates. See the foreign currency fluctuation schedule, which is used to determine revenue on a CC basis, on the Investor Relations page of the Company’s website at investor.teradata.com. This website is not incorporated by reference in this proxy statement. •Public Cloud ARR (included within Total ARR) is defined as the annual value at a point in time of all contracts related to public cloud implementations of Teradata VantageCloud and does not include ARR related to private or managed cloud implementations. •Total ARR is defined as the annual value at a point in time of all recurring contracts, including subscription, cloud, software upgrade rights, and maintenance. ARR does not include managed services and third-party software. •Non-GAAP Diluted EPS, Non-GAAP Operating Income, and Free Cash Flow are non-GAAP financial measures. Please refer to Appendix B of this proxy statement for definitions and reconciliations to the GAAP financial measures. •Continued Robust Stockholder Engagement Activities: Since 2015, we have regularly engaged with stockholders to solicit their input regarding our executive compensation program. This past year, we again sought feedback from our largest institutional investors, representing over 65% of Teradata’s outstanding shares. Our discussions with investors covered a number of executive compensation themes, including support for our following practices: •that a meaningful portion of the long-term incentive is allocated to equity awards that are based on long-term performance goals with a strong rationale and linkage to our business strategy; •use of Public Cloud ARR, Total ARR, Non-GAAP Operating Margin, and Free Cash Flow were appropriate performance measures for us to drive the short-term and long-term financial performance stockholders deem essential for our Company during 2024; and •being proactive and transparent in discussing our plans for changes beginning with our 2025 executive compensation program, including the introduction of a Rule of 40 (defined as total revenue growth plus EBITDA margin) performance measure, which is considered an important financial performance measure by our stockholders to assess the health of the Company.
Section 1: EXECUTIVE SUMMARY
| 2024 PERFORMANCE-BASED COMPENSATION PROGRAM COMPONENTS | | | | | PLAN | MEASURE | WEIGHTING | TIE TO PERFORMANCE AND STRATEGY | | Annual Cash Incentive Plan – 2024 Management Plan | Total ARR Growth(1),(4) | 30% | Drive annual recurring revenue growth | | | Public Cloud ARR Growth(2),(4) | 30% | Drive cloud growth strategy | | | Non-GAAP Operating Margin(3),(4) | 40% | Maintain focus on profitability while growing recurring revenue | | Long-Term Incentive Plan – 2024 – 2026 LTIP | 2026 Total ARR(1), (4),(5) | 40% | Drive recurring revenue over multi-year period | | | 2026 Total Public Cloud ARR(2), (4),(5) | 20% | Drive recurring revenue over multi-year period with a focus on our cloud growth strategy | | | 2024 - 2026 Free Cash Flow (4),(5),(6) | 40% | Focus on long-term cash-generating ability |
Section 1: EXECUTIVE SUMMARY
•Public Cloud ARR Performance Measures are used in our 2024 Management Plan and 2024 – 2026 LTIP to Address the Continued Importance of our Cloud Growth Strategy over both the Short- and Long-Term: Our transition to a cloud growth strategy has contributed meaningfully to our success and is expected to continue to contribute to our future growth. To align pay and performance that reflects our commitment to our cloud growth strategy over the short- and long-term, performance measures with a focus on cloud are included in both plans, with the 2024 Management Plan focused on Public Cloud growth during 2024 and the 2024 – 2026 LTIP focused on the amount of Total Public Cloud ARR as of the end of 2026. Use of Public Cloud ARR Growth and Total Public Cloud ARR performance measures also aligns with measures that we understand our stockholders use to evaluate our performance. •The Performance Measures in our 2024 Short- and Long-Term Plans are Designed to Measure and Reward for Different Aspects of our Cloud and Profitable Growth Strategies: ◦2024 Management Plan: Includes short-term growth metrics of 2024 Total ARR Growth and 2024 Public Cloud ARR Growth that are equally weighted to encourage a balanced focus on our Public Cloud ARR and Total ARR growth during 2024 since 2024 was another year where we needed to be focused on increasing the overall amount of Public Cloud ARR as part of our Total ARR composition. ◦2024 – 2026 LTIP: Includes long-term Total ARR and Total Public Cloud ARR performance measures that are each measured as of the end of a three-year performance period as of the end of 2026. The 2026 Total ARR performance measure is weighted at 40% and the 2026 Public Cloud ARR performance measure is weighted at 20%, which is designed to encourage the increase in the cloud portion of Total ARR over the three-year performance period, but also ensure we are focusing on providing the platform that the customer requires, whether on-premises, hybrid, or cloud over the long-term. Having Total ARR and Total Public Cloud ARR, each as of the end of 2026 in the 2024 – 2026 LTIP, with the Total ARR measure being weighted higher than Public Cloud ARR also helps us focus on our mix of revenue and the growth of the public cloud portion of our overall business over the 3-year performance period, but not to the detriment of Total ARR, particularly as the size of our cloud business continues to grow. ◦The Committee believes that having both Total ARR and Total Public Cloud ARR performance measures in each of the 2024 short- and long-term incentive plans reduces the risk that any actions would be taken to sacrifice long-term growth to meet annual targets or vice versa and to ensure we stay focused on growing our on-premises, hybrid, and cloud offerings while also continuing to grow overall in the short-term and over the long-term. In addition, the use of Total ARR and Total Public Cloud ARR performance measures also aligns with measures that we understand our stockholders use to evaluate our performance. •Our 2024 financial performance resulted in payouts under each of our 2024 Management Plan and our long-term incentive plan consisting of 3-year performance based restricted share unit awards for the 2022 – 2024 performance period (“2022 – 2024 LTIP”) of 80% and 72%, respectively. The specific measures, weightings and goals, actual performance, and achievement level for our 2024 Management Plan and 2022 – 2024 LTIP are detailed below. •As discussed in more detail in this CD&A, 2024 was a challenging year for Teradata, primarily due to elongated deal closing cycles and a shift in customer buying patterns. As a result, we had certain long-term incentive awards that were no longer performing. As described in more detail in the “Adjustment to Performance Goals: 2023 – 2025 LTIP and 2024 – 2026 LTIP” section of the CD&A, the Committee determined it was prudent and necessary to adjust the performance goals for the 2023 – 2025 performance-based RSUs ("2023 – 2025 LTIP") and the 2024 – 2026 LTIP to help ensure stability and retention of critical roles at Teradata and to continue to incentivize the achievement of the Company's revised long-range financial plan. The Committee viewed making adjustments as a better outcome to make these awards productive as opposed to not taking any action or offering one time grants or other costly and dilutive actions that would not be beneficial to our stockholders.
Section 2: COMPENSATION PHILOSOPHY AND GOVERNANCE
| Best Practices We Follow | | | | | ✓ ESTABLISH COMPETITIVE COMPENSATION LEVELS for our named executive officers within the technology industry | ✓ MAINTAIN A “DOUBLE TRIGGER” for change in control severance benefits and equity award vesting | ✓ MINIMIZE COMPENSATION RISKS by periodically reviewing our compensation program to confirm that our compensation policies and practices are not encouraging excessive or inappropriate risk-taking | ✓ MAINTAIN STOCK OWNERSHIP GUIDELINES in line with stockholder interests requiring robust ownership levels for executive officers | | ✓ MAINTAIN CLAWBACK AND HARMFUL ACTIVITY POLICIES to recover cash or equity incentive compensation based on financial results that were later restated and cancel outstanding equity awards and recover realized gains if executives are terminated for cause or engage in certain other harmful activity | ✓ RETAIN AN INDEPENDENT COMPENSATION CONSULTANT to provide expert objective, third-party advice regarding executive pay programs and competitive market practices | ✓ HOLD ANNUAL ADVISORY VOTE ON EXECUTIVE COMPENSATION AND ENGAGE WITH STOCKHOLDERS ANNUALLY to give investors the opportunity to express their views on pay on a regular basis | ✓ REVIEW OVERHANG LEVELS AND BURN RATES to confirm that our standards are consistent with industry norms and stockholder expectations | | x NO EXCISE TAX GROSS-UPS in Company severance plans | x NO HEDGING OR PLEDGING of Company stock by executive officers | x NO “REPRICING” of stock options or granting of discounted stock options | x NO FIXED TERM EMPLOYMENT AGREEMENTS OR DEFINED BENEFIT PLANS for our executive officers |
Section 3: CORE COMPENSATION PROGRAM
| ELEMENT | CHARACTERISTIC | PURPOSE | | Base Salary | A fixed amount, paid in cash and reviewed annually and, if appropriate, adjusted. | Provide a source of fixed income that is market competitive and reflects scope and responsibility of the position held. | | Annual Cash Incentive | A variable, short-term element of compensation, payable in cash based on achievement of pre-established annual financial goals. | Motivate and reward our executive officers for achievement of annual financial goals intended to drive the focus on our priorities and overall profitable growth. | | Long-Term Incentive | A variable, long-term element of compensation, provided in the form of: •60%: performance-based restricted stock units that is payable based on achievement of various financial goals at the end of a three-year performance period; and •40%: time-based restricted stock units that vest annually over three years. | Align the interests of our executive officers with our stockholders; encourage focus on long-term company performance measures that are deemed strategically and operationally important to our Company; promote retention of our executive officers; and encourage significant ownership of our common stock. |
Section 3: CORE COMPENSATION PROGRAM
Executive Compensation Process After the completion of the fiscal year, the CEO conducts annual performance evaluations for the prior year for each executive officer. After consulting with the Chief People Officer and the Compensation Consultant, the CEO provides the Committee with the performance assessments and recommendations with respect to the amount and form of compensation for such executives for the current fiscal year at the Committee's first meeting of the fiscal year. With regard to our CEO, the independent members of the Board conducts the CEO annual performance evaluation at the first Board meeting of the fiscal year. The Compensation Consultant meets with the independent members of the Board in executive session at this meeting to review compensation recommendations for the CEO for the current fiscal year. Neither the CEO nor the Chief People Officer provide input or recommendations with respect to his or her own compensation. At its first meetings of each fiscal year (in January and/or February), the Committee reviews and approves compensation for each of our executive officers for the current fiscal year (or the independent members of the Board with regard to our CEO's compensation), which generally includes: •changes, if any, to base salary; •for the annual cash incentive awards, setting (i) the target opportunity expressed as a percentage of base salary and (ii) performance measures, weightings, goals and performance adjustment events; and •for the long-term incentive awards, (i) setting the total long-term incentive opportunity amount for each executive officer, (ii) approving the allocation of the long-term incentive awards for service-based restricted stock unit awards; (iii) approving the allocation to the three-year performance restricted stock unit awards, including the performance measures, weightings, goals and adjustment events, and (iv) at the Committee's first meeting to
Section 3: CORE COMPENSATION PROGRAM
occur after the Company's year-end earnings are released, approves the grant of equity awards for each executive officer consistent with the long-term incentive opportunity amount previously approved for that person. In connection with the Committee's review and approval of executive officer compensation (or the independent members of our Board for CEO compensation), the Committee evaluates information regarding: •competitive market compensation data prepared by the Compensation Consultant based on the Company's peer group, including for base salary, total cash compensation, and total direct compensation; •scope, complexity, experience, and tenure of the executive officer’s position, individual contributions and performance, as well as internal pay equity; •prior and expected financial performance of the Company; and •the CEO recommendation for the form and amount of compensation for executive officers, other than the CEO. Throughout the fiscal year, the Committee receives updates on the anticipated performance of the annual cash incentive award and the outstanding long-term incentive awards. In addition, the Committee receives frequent updates on compensation trends from the Compensation Consultant and the compensation methods used by the Company's compensation peer group. At the end of the fiscal year, typically during its last meeting of the fiscal year, the Committee reviews proposed performance measures for the following year's annual incentive plan and long-term incentive plan. At the Committee's first regular meeting of the fiscal year, management presents a summary of, and the Committee certifies, actual performance as compared to the pre-established performance goals in the annual cash incentive plan and the outstanding long-term incentive plans. The Committee (or the independent members of the Board for CEO compensation) also approves the payouts of the awards under these plans, each subject to the release of the Company's year-end earnings, if such event had not yet occurred. Additional details of the executive compensation process by the Committee and Board, as applicable, are disclosed, as relevant, in the respective compensation element sections that follow. We do not have any formal policies for allocating compensation among base salary, annual cash incentive awards, and long-term incentive equity grants. Instead, the Committee exercises judgment to establish a total compensation program for each executive officer that is comprised of a combination of short- and long-term incentive compensation and cash and non-cash compensation, that the Committee believes is appropriate to achieve the goals of our executive compensation program and our profitable growth strategy. In addition, the Company does not generally grant stock options or stock appreciation rights and did not grant any of these instruments during fiscal 2024. The Committee grants other equity-based awards to our executive officers and other key employees on both an annual and as-needed basis, which is typically in connection with promotions. We do not time the disclosure of material non-public information for the purpose of affecting the value of executive compensation, and it is the Committee’s practice to generally avoid granting equity awards during periods in which there is undisclosed material non-public information about the Company. Summary of 2024 Compensation Decisions Base Salary We provide a base salary to retain and attract key executive talent and to align our compensation with market practices. Base salaries are reviewed and established by the Committee (or the independent members of the Board for CEO base salary) on a competitive basis each year commensurate with executives with similar experience levels and capabilities in the marketplace. In particular, the Committee or the Board, as relevant, takes into consideration the following factors in setting or reviewing base salaries for our executive officers: current base salary; positioning relative to competitive market compensation data; scope and complexity of the position; experience; tenure; historical and current levels of function, division and individual performance; future potential; recommendations from the CEO for executive officers other than the CEO; and internal pay comparisons. The base salary level for Mr. McMillan remained unchanged for 2024. Mr. Petley's base salary increased as a result of his promotion to Chief Revenue Officer in April 2024. The other named executive officers received a merit increase of between 3% to 4% for 2024.
Section 3: CORE COMPENSATION PROGRAM
Annual Cash Incentive Awards Our named executive officers participated in our 2024 annual cash incentive program under the 2024 Management Plan. At the end of the fiscal year, during its last meeting of the fiscal year, the Committee reviews proposed performance measures for the following year's annual incentive plan. Then, at the beginning of each fiscal year, during its first meetings of the fiscal year (in January and/or February), the Committee approves a target award expressed as a percentage of base salary for each executive officer (other than the CEO, as that amount is approved by the independent members of the Company's Board) and specific performance measures, weightings, goals and performance adjustment events, if any. For each performance measure, a threshold, target and maximum level of performance is defined, which have corresponding payout percentages. The target level set for each performance measure is aligned with our annual financial plan. Following the end of the fiscal year, at the Committee's first meeting of the fiscal year, management presents a summary of, and the Committee certifies, actual performance as compared to the pre-established goals together with a corresponding payout percentage, which is expressed as a percent of target performance. When determining the target award for each executive officer, the Committee (or the independent members of the Board for the CEO annual cash incentive) reviews competitive market compensation data for target total cash compensation (sum of base salary and target annual cash incentive) for the position in which such executive officer serves. In addition to considering the market data, the Committee also considers scope, complexity, experience, and tenure of the executive officer’s position, individual contributions and performance, CEO recommendation for executives, other than the CEO, as well as internal pay equity. Actual awards can range from 0% (if threshold levels of performance are not met) to 200% of the target award (if maximum levels of performance are met for all of the performance measures, and subject to an increase for the individual modifier described below) and the resulting competitiveness of total cash compensation will also vary accordingly. As a result, and without considering any potential use of the individual modifier described below, payouts of the annual cash incentive compensation to named executive officers cannot exceed 200% of their target opportunity. The 2024 target annual incentive opportunity for each of our named executive officers remained unchanged from 2023 levels as those targets where appropriate for the scope of their roles and aligned with the competitive market trends provided by the Compensation Consultant and reviewed by the Committee.
Section 3: CORE COMPENSATION PROGRAM
In designing the 2024 Management Plan, our Compensation Consultant performed a comparative review of our annual incentive compensation program. As part of that review, the Compensation Consultant advised the Committee that Teradata’s annual incentive compensation practices were aligned with common market practices within the approved peer group, particularly with regard to the types and number of performance measures used, the payout levels as a percent of the target level of achievement set for each of the threshold and maximum levels of achievement, and the payout percentage for each of the threshold, target and maximum levels of achievement. Total payouts under the 2024 Management Plan are based primarily on our achievement of three key financial measures: Total ARR Growth, Public Cloud ARR Growth, and Non-GAAP Operating Margin.
Section 3: CORE COMPENSATION PROGRAM
| 2024 MANAGEMENT PLAN PERFORMANCE AND RESULTS | | | | | | | | $ in millions | | | | | | | | FINANCIAL MEASURE | WEIGHTING (%) | 50% (THRESHOLD) ($) | 100% (TARGET) ($) | 200% (MAXIMUM) ($) | ACTUAL PERFORMANCE ($) | ACHIEVEMENT LEVEL (%) | | Total ARR Growth (CC)(1),(3) | 30 | 75 | 94 | 103 | (70) | — | | Public Cloud ARR Growth (CC)(1),(3) | 30 | 160 | 200 | 220 | 90 | — | | Non-GAAP Operating Margin(2),(3),(4) | 40 | 303 | 337 | 371 | 376 | 200 | | Total Payout Percentage | | | | | | 80 |
Section 3: CORE COMPENSATION PROGRAM
(1)No payout can be earned for Total ARR Growth or Public Cloud ARR Growth unless the Company achieved the threshold level of Non-GAAP Operating Margin. In addition, in order to fund each of Total ARR Growth and Public Cloud ARR Growth over target at a faster rate up to the maximum payout level, Non-GAAP Operating Margin must meet the target achievement. If the Non-GAAP Operating Margin target is not met, then Total ARR Growth and Public Cloud ARR Growth over target is calculated at a linear rate until the maximum payout is achieved. (2)Non-GAAP Operating Margin is a non-GAAP financial measure. Please refer to Appendix B of this proxy statement for definitions and reconciliations to the GAAP financial measures. (3)When establishing the performance objectives under the 2024 Management Plan, the Committee approved specific and typical adjustments, consistent with past practice, to actual performance for each performance measure, such that actual results would be increased or decreased, as applicable, for foreign exchange rate fluctuations, any significant acquisition or divestiture, and/or changes in applicable federal accounting standards. The adjustment for foreign currency for Non-GAAP Operating Margin is reflected in the reconciliation to the GAAP financial measure in Appendix B. (4)In 2023, the 2023 Non-GAAP Operating Margin actual amount of $332 million was adjusted by $12 million to provide for the typical foreign currency pre-approved adjustment event included as part of the 2023 Management Plan, which resulted in the amount used for purposes of determining the payout under the 2023 Management Plan for Non-GAAP Operating Margin of $344 million. The 2024 target of $337 million for Non-GAAP Operating Margin was set above the 2023 actual results of $332 million for Non-GAAP Operating Margin, without regard to the adjustment made for the foreign currency impact. Payouts of Annual Cash Incentive Compensation 2024 Management Plan Each named executive officer was eligible to receive a payout under our 2024 Management Plan. Based on Company performance relative to the financial measures described above, the overall payout achieved was equal to 80% of his or her target annual incentive opportunity. In addition, our 2024 Management Plan design provides the Committee an individual performance modifier that can adjust the company performance factor positively or negatively up to 25%. The plan design provides this feature to align our pay for performance culture and reward extraordinary contributions that may be made by individuals during the year. In evaluating performance and whether to use this permitted adjustment, the Committee considers contributions that are above and beyond what could have been planned or anticipated when the financial plan was established, in addition to where our named executive officers may have fallen short in their contributions during the year. The Committee did not approve any individual specific adjustments for 2024. As a result, each named executive officer received a payout of 80% of his or her target annual incentive opportunity. Mr. Petley’s award under the 2024 Management Plan was pro-rated based on his promotion date of April 5, 2024 consistent with the Company's policies. The 2024 Management Plan payment amounts are set forth in the Non-Equity Incentive Plan Compensation column of the Summary Compensation Table of this proxy statement. For more information on the 2024 Management Plan for our named executive officers, please refer to the “Grants of Plan-Based Awards” section of this proxy statement. 2024 Sales Incentive Plan Prior to his promotion to Chief Revenue Officer on April 5, 2024, Mr. Petley participated in the 2024 Sales Incentive Plan, with a target award opportunity equal to 100% of his base salary. The 2024 Sales Incentive Plan provides monthly payouts based on the extent to which certain annual financial quotas are achieved, including with respect to ARR growth (cloud
Section 3: CORE COMPENSATION PROGRAM
and non-cloud), contribution margin (cloud and non-cloud), booking of various services and attainment of certain sales quotas. The 2024 Sales Incentive Plan does not apply to executive officers of the Company, and therefore the Committee did not establish quotas under that plan for Mr. Petley. Based on performance results through April 4, 2024, Mr. Petley was entitled to an aggregate payout of $49,025 (£39,017) under the 2024 Sales Incentive Plan. Effective as of April 5, 2024, Mr. Petley ceased to participate in the 2024 Sales Incentive Plan and commenced participation in the 2024 Management Plan, as described above. Long-Term Incentives (Equity Awards) The total direct compensation levels for our named executive officers are heavily weighted to long-term incentive opportunities, which vest over a period of three years. This structure is intended to align executives’ interests with those of our stockholders, enhance our retention incentives, and focus our executives on delivering sustainable performance over the longer-term. The design of this program reflects the core performance metrics and incentive structure the Committee believes is necessary to drive our long-term success. The following chart includes a high-level summary of the elements of the performance-based and serviced-based RSU equity vehicles and performance criteria, as applicable, for our long-term incentive program since 2023. Long-Term Equity Program Evolution
Section 3: CORE COMPENSATION PROGRAM
| | 2023 | 2024 | 2025 | | Equity Vehicle and Weighting | Long-term incentive plan is majority weighted towards performance-based RSUs 60% performance-based RSUs 40% service-based RSUs | Long-term incentive plan is majority weighted towards performance-based RSUs 60% performance-based RSUs 40% service-based RSUs | Long-term incentive plan is majority weighted towards performance-based RSUs 50% performance-based RSUs 50% service-based RSUs | | Performance Measure for Performance- Based RSUs | 30% Total ARR (measured as the end of the 3-year period ending 12/31/2025) 30% Total Public Cloud ARR (measured as the end of the 3-year period ending 12/31/2025) 40% Free Cash Flow (compound over a 3-year period ending 12/31/2025) | 40% Total ARR (measured as the end of the 3-year period ending 12/31/2026) 20% Total Public Cloud ARR (measured as the end of the 3-year period ending 12/31/2026) 40% Free Cash Flow (compound over a 3-year period ending 12/31/2026) | 50% 2025 Total ARR (measured as the end 2025; vests pro-rata over 3-year period ending 12/31/2027) 25% Rule of 40 - 2025, 2026, and 2027 (Metrics set at beginning of 3-year performance period for each year; vests at end of 3-year performance period ending 12/31/2027) 25% Free Cash Flow - 2025, 2026, and 2027 (Metrics set at beginning of 3-year performance period for each year; vests at end of 3-year performance period ending 12/31/2027) | | Maximum Payout | 150% (decreased from 200%) | 150% (decreased from 200%) | 200% | | Grant Effective Date | March 2023 | February 2024 | March 2025 | | Performance Period | 2023 – 2025 | 2024 – 2026 | 2025 – 2027 |
Section 3: CORE COMPENSATION PROGRAM
the long-term incentive plans were at risk of no longer performing its important function of incentivizing our executive and senior leaders to drive performance as the levels of performance set in the 2023 – 2025 LTIP and 2024 – 2026 LTIP were no longer realistic goals for the Company. Further, because a significant portion of the compensation provided to our executive and senior leaders is tied to the performance under the long-term incentive plan, as each of the 2023 – 2025 LTIP and 2024 – 2026 LTIP were both projected to achieve performance near or below threshold, they were no longer serving as a retention tool for our top talent in a highly competitive market. The Committee recognized the seriousness of the Company's long-term incentive compensation situation, particularly given the Company is at a critical stage in its cloud transformation and for being able to capture the opportunity provided by the rapid proliferation of AI. The Committee determined that not taking any additional action was not a prudent option or in the Company's or its stockholder's best interests. As described more below, the Compensation Committee determined it was necessary to re-align the performance goals in the 2023 – 2025 LTIP and 2024 – 2026 LTIP to ensure the long-term incentive plans were able to motivate and retain the Company’s executive and senior leadership team talent at this critical stage in the Company’s cloud transformation, to capture the opportunity provided by the rapid proliferation of AI, and to drive the achievement of the revised financial and operational performance expectations. The Compensation Committee engaged in discussions, including with the Compensation Consultant, to assess the situation and determine the best course of action. As part of these discussions, the Committee considered additional incentives that could be added in the form of cash and/or equity but determined that these actions would increase the cost and the level of dilution under the long-term incentive plan, which would be counter to stockholder interests. Given the highly competitive market we operate in for leadership talent with enterprise software, cloud, and AI experience, the Committee determined action had to be taken to preserve the pay for performance alignment of the long-term incentive with the long-term financial plan while motivating and retaining the executive and senior leadership team. The various approaches considered by the Compensation Committee, in consultation with the Compensation Consultant and the Board, were as follows: •maintaining the 2023 – 2025 LTIP and 2024 – 2026 LTIP without any changes; •adjusting the performance measures in the 2023 – 2025 LTIP and 2024 – 2026 LTIP to align with the revised long-term financial plan; •issuing retention grants to specific executive and senior leaders considered critical to the Company's growth and innovation priorities; •increasing the value of the long-term incentive granted in future years; and •supplementing with cash compensation. Ultimately, the Committee determined that in order to align to our pay for performance philosophy and to provide proper incentive to achieve the Company's revised long-term financial plan the best course was to adjust the performance goals in the 2023 – 2025 LTIP and the 2024 – 2026 LTIP so that the target level of such plans aligned with the revised expectations in the Company's revised long-term financial plan. The Committee also determined that adjusting the performance goals was a better option for our stockholders as the other options considered were more costly and dilutive to our stockholders. As a result, the Committee determined that it was a prudent business decision to reset the target performance goals under the 2023 – 2025 LTIP and the 2024 – 2026 LTIP to align with the Company's revised long-term financial plan. In addition, the Committee also determined that it was appropriate to reduce the maximum payout level under both the 2023 – 2025 LTIP and 2024 – 2026 LTIP from 200% to 150% in conjunction with the adjustments to the performance goals to ensure that opportunity for our executive and senior leadership to benefit from the adjusted performance goals was necessarily limited. With the modifications to the target levels in the 2023 – 2025 LTIP and the 2024 – 2026 LTIP, the Compensation Committee believed that with ongoing strong execution, the long-term incentive plans would have a higher probability of achieving the target levels under each of the 2023 – 2025 LTIP and 2024 – 2026 LTIP with strong, consistent execution. The potential payouts with respect to the modified performance goals for the 2023 – 2025 LTIP and 2024 – 2026 LTIP are not guaranteed and remain subject to our future financial performance. The Committee understood that making any adjustments or taking any other compensation actions would be viewed negatively by proxy advisory firms and potentially by our stockholders. However, given the circumstances facing the Company, the Committee believed that by making these adjustments, as opposed to taking other compensation actions or taking no action all, it was taking the most prudent path to support the Company's continued growth, innovation, and transformation by enhancing the Company's ability to retain its key high-performing executives and senior leaders at a critical time for the Company, while also aligning incentive compensation with the Company's evolving financial
Section 3: CORE COMPENSATION PROGRAM
performance expectations. The Committee takes its commitment to paying for performance seriously and believed that it ultimately pursued the best option to facilitate and continue the Company's pay-for-performance philosophy. 2025 Compensation Plan Design Changes: 2025 – 2027 LTIP Historically, the Committee allocated 60% of the long-term incentive opportunity to performance-based RSUs and 40% to service-based RSUs. For our executive compensation program beginning with 2025, the Committee changed the allocation for the 2025 – 2027 LTIP so that the performance-based portion and the service-based portion are equally weighted to align with market data provided to the Committee by the Compensation Consultant, which reflected a more balanced approach among the peer group for providing awards that recognize service to the Company and financial performance, balance our retention and performance objectives, and have a long-term incentive plan that would be viewed positively in the highly competitive technology talent market. All of these factors were considered by the Committee when adopting the long-term incentive plan design for 2025. In addition, the Committee approved the following design for the 2025 – 2027 LTIP as the Committee continues to evolve our long-term incentive plan performance measures to align with stockholder performance expectations for the Company: •50% of the award payout is based on the extent to which we achieve a 2025 Total ARR target established at the beginning of 2025, with any shares earned vesting in three equal installments; •25% of the award payout is based on the achievement of certain Rule of 40 performance goals for each of 2025, 2026 and 2027 with the Rule of 40 performance goals for each of 2025, 2026, and 2027 established at the beginning of 2025, with any shares earned vesting after the 3-year performance period ending on December 31, 2027; and •25% of the award payout is based on the achievement of certain Free Cash Flow performance goals for each of 2025, 2026 and 2027 with the Free Cash Flow performance goals for each of 2025, 2026, and 2027 established at the beginning of 2025, with any shares earned vesting after the 3-year performance period ending on December 31, 2027. As noted in the "Investor and Stockholder Outreach" and the "2024 Financial Highlights and Key Compensation Decisions" sections, we previewed the changes to the 2025 compensation plan design with stockholders during our 2025 stockholder engagement activities and received support for such changes. 2024 – 2026 Performance-Based and Service-Based RSU Grants With regard to the executive compensation program that was granted during 2024, our Compensation Consultant performed a benchmark review of our long-term incentive compensation program. As part of that review, the Compensation Consultant advised the Committee that Teradata’s long-term incentive compensation practices were aligned with the peer companies with regard to the types and number of performance measures used, the payout levels as a percent of the target level of achievement set for each of the threshold and maximum levels of achievement, and the payout percentage for each of the threshold, target and maximum levels of achievement, and performance period. In addition, the data provided to the Committee reflected that the equity mix included as part of the Company's long-term incentive plan, with 60% allocated to the performance-based restricted stock units, was a higher percentage than what peer companies provided, however, the Committee maintained the 60% performance-based allocation for the 2024 – 2026 LTIP. In determining the size of the long-term incentive grants, the Committee considered market data, the scope and complexity of the executive’s position, experience, tenure, internal pay comparisons, function, division, CEO recommendations for executive officers, other than the CEO, and individual performance and historical targeted grant levels. In 2024, the Committee made long-term incentive grants that consisted of a grant of 2024 – 2026 LTIP and 3-year service-based RSUs (“Service RSUs”) to our named executive officers. The target opportunity for the aggregate of the 2024 – 2026 LTIP and Service RSUs for each named executive officer was as follows:
Section 3: CORE COMPENSATION PROGRAM
| NAME | 40% SERVICE RSUs ($) | 60% 2024 - 2026 LTIP ($) | TOTAL LONG-TERM INCENTIVE OPPORTUNITY ($) | | Stephen McMillan | 5,000,000 | 7,500,000 | 12,500,000 | | Claire Bramley | 2,000,000 | 3,000,000 | 5,000,000 | | Hillary Ashton | 1,480,000 | 2,220,000 | 3,700,000 | | Richard Petley(1) | 1,200,000 | 1,800,000 | 3,000,000 | | Michael Hutchinson | 1,200,000 | 1,800,000 | 3,000,000 |
Section 3: CORE COMPENSATION PROGRAM
(1)In connection with Mr. Petley's promotion in April 2024, the Committee approved an additional target award of $1,033,000 ("Promotion Grant"), which is consistent with his expanded role and additional responsibilities and is included in the amount set forth in the table above. In addition, the total for Mr. Petley reflects the long-term incentive opportunity granted to Mr. Petley during the annual award cycle. The long-term incentive opportunities for Mses. Bramley and Ashton and Mr. Hutchinson were increased by $500,000, $300,000, and $1,000,000, respectively, to recognize the increasingly complex and enterprise-wide impact of each of their roles, including the importance of their roles for facilitating the Company's transformation. In addition, for Ms. Bramley, the increase recognized the addition of the Company's Strategy team to her area of responsibility, and for Mr. Hutchinson, the increase was also made to better align his long-term incentive opportunity to compensation market trends provided by the Compensation Consultant for a Chief Customer Officer with an enterprise-wide and strategically critical role. The long-term equity incentive for Mr. Petley was increased to recognize his promotion in April 2024 into an executive officer position and to recognize that his position has an enterprise-wide scope that is critical to the Company's achievement of its financial objectives and strategy. The long-term incentive opportunity for Mr. McMillan remained consistent with the 2023 level as the Board viewed this level of compensation as appropriate for the scope of his role and the performance of the Company. Overall, the long-term incentive opportunities for the named executive officers align with the competitive trends as reviewed by the Committee based on the Compensation Consultant's independent analysis as part Committee's overview of competitive trends for talent. The 2024 – 2026 LTIP will be earned based on the extent to which Teradata achieves three financial goals during the 3-year performance period ending December 31, 2026. The Service RSUs vest in equal annual installments over three years and are designed to provide a meaningful retention incentive for our executives in line with competitive market practices.
Section 3: CORE COMPENSATION PROGRAM
| 2024 – 2026 LTIP PERFORMANCE MEASURES | RATIONALE | | 2026 Total ARR. 40% of the performance-based RSUs is subject to achievement of our Total ARR at the end of 2026. As such, the payout for this measure is based on the cumulative performance over the 3-year period as measured at the end of 2026. | We are focusing on our company's long-term growth overall. We have a cloud growth strategy, however, we need to ensure that we also continue to grow the company overall by providing customers with the platform they desire, such as hybrid and on-premises. | | 2026 Total Public Cloud ARR. 20% of the performance-based RSUs is subject to achievement of Total Public Cloud ARR at the end of 2026. As such, the payout for this measure is based on the cumulative performance over the 3-year period as measured at the end of 2026. | We maintain a cloud growth strategy. Consistent with our cloud growth strategy, this element is designed to focus executives on increasing the total ARR attributable to recurring revenue from our cloud-based platform, by incentivizing an increase in the amount of cloud-based revenue over the performance period. | | Free Cash Flow. 40% of the performance-based RSUs is subjected to the achievement of free cash flow over the 3-year period. | The free cash flow reflects our long-term ability to generate cash and profitability. |
Section 3: CORE COMPENSATION PROGRAM
| 2022-2024 LTIP PERFORMANCE AND RESULTS | | | | | | | | | 2022-2024 PERFORMANCE GOALS | | | | RESULTS AND PAYOUTS | | | FINANCIAL MEASURE (Millions) | WEIGHTING (%) | THRESHOLD (50% PAYOUT) ($) | TARGET (100% PAYOUT) ($) | MAXIMUM (200% PAYOUT) ($) | ACTUAL RESULTS ($) | PAYOUT PERCENTAGE (%) | | Free Cash Flow(1),(2),(3) | 40 | 1,064 | 1,182 | 1,300 | 1,130 | 78 | | 2022 Total Cloud ARR(3) | 20 | 328 | 360 | 376 | 365 | 133 | | 2023 Total Cloud ARR(3) | 20 | 499 | 555 | 583 | 524 | 73 | | 2024 Total Cloud ARR(3) | 20 | 655 | 728 | 764 | 620 | — | | Total Payout Percentage | | | | | | 72 |
Section 3: CORE COMPENSATION PROGRAM
(1)Free Cash Flow is a non-GAAP financial measure. Please refer to Appendix B of this proxy statement for definitions and reconciliations to the GAAP financial measures. (2)As previously disclosed in the 2023 Proxy Statement, in early 2023, in order to comply with sanctions, tariffs, and other challenges imposed on business conducted in Russia, Belarus, and China that were outside the control of management, Teradata ceased business operations in those countries (the “Russia and China Action”). Due to the unexpected and extraordinary nature of the Russia and China Action, its impact on Free Cash Flow, and because the impact was outside of management’s control, the Committee determined in early 2023 that it was appropriate to adjust the Free Cash Flow performance measures in the 2022 – 2024 LTIP by the total impact on our business as a result of the Russia and China Action. As a result of these actions, the Free Cash Flow target was reduced by $68 million, with corresponding reductions to the threshold and maximum targets as well and such reduction is reflected in the amounts in the table above. (3)When establishing the performance objectives under the 2022-2024 LTIP, the Committee approved adjustments to actual performance for each performance measure, such that actual results would be increased or decreased, as applicable, by the product of the impact of foreign exchange rates on revenue from pre-established plan rate levels. Based on the actual results for the 2022 – 2024 performance period relative to the goals outlined above, the weighted average payout percentage for each of the named executive officers was 72%.
Section 4: COMPENSATION CONSULTANT AND PEER GROUP
Section 4: COMPENSATION CONSULTANT AND PEER GROUP Compensation Consultant When setting 2024 compensation levels for the named executive officers, the Committee retained Aon's Talent practice, a division of Aon, plc (“Aon”) as its Compensation Consultant, reporting directly to the Committee and serving at the sole discretion of the Committee. During its engagement, the Compensation Consultant provided information to the Committee regarding peer group development, compensation pay level analysis, pay mix, overall design for the components of total direct compensation based on the pay practices of companies in our compensation peer group, as established by the Committee, and the compensation options available to the Committee to address the 2024 challenges discussed previously. In addition, our People organization purchased compensation surveys and reports from Aon during 2024 at a cost of approximately $76,720. With regard to other compensation services, the Compensation Consultant also advises our Board on its director compensation program. With regard to services that are not compensation related, Aon affiliates also provide to us insurance-related products and services, covering health and benefits, pension-related services, other insurance brokerage services and risk services to the business. The aggregate fees we paid to the Compensation Consultant for (i) its service as our independent executive officer and board of director compensation consultant was approximately $256,680 and (ii) for the additional services paid to various of its affiliates was approximately $575,500. Although the Committee was aware of the nature of the services performed by Aon affiliates, the Committee did not review and approve such services and insurance premiums and policies, as those were reviewed and approved by management in the ordinary course of business. The Compensation Consultant maintains certain policies and practices to protect the independence of the executive compensation consultants engaged by the Committee. In particular, the Compensation Consultant provides an annual update to the Committee on the financial relationship between the Compensation Consultant and the Company, and provides written assurances that, within Aon, the consultants who perform executive compensation services for the Committee have compensation determined separately from its other lines of business and from the other services it provides to the Company. These safeguards were designed to help ensure that the Committee’s executive compensation consultants continued to fulfill their role in providing independent, objective advice. In light of the foregoing, the Committee has assessed the independence of the Compensation Consultant pursuant to SEC rules and NYSE listing standards and concluded that there was no conflict of interest that would prevent the consulting firm from independently advising the Committee. Peer Group The Committee examines the compensation peer group on an annual basis, with input from management and the Compensation Consultant. In late 2020, with the selection of Aon as its new Compensation Consultant, the Committee undertook a thorough review process of our peer group and as a result revised the peer group’s framework and methodology to better reflect our growth strategy, business model, and market for executive talent. The revised peer group framework and methodology continues to be utilized in reviewing and approving the peer group on an annual basis. The peer group framework and criteria utilized are as follows: •Identify companies within the following sub-industries, based on the Global Industry Classification Standard: internet services and infrastructure; application software; systems software; and technology hardware, storage and peripherals; •From those sub-industries, focus on the following business areas: cloud and storage; analytics; and security; •Include companies with revenue generally above $900 million with a soft cap of $10 billion, with exceptions based on the market for executive talent; and •Consider market capitalization with a range of 0.3x to 3x of Teradata's 30-day average market capitalization.
Section 4: COMPENSATION CONSULTANT AND PEER GROUP
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Section 4: COMPENSATION CONSULTANT AND PEER GROUP
At the time that the peer group was reviewed and approved by the Committee for our 2024 executive compensation decisions, the Company was at the 38th percentile for revenues and the 10th percentile for market capitalization, which reflected an overall balanced peer group. In 2024, the Committee used an updated peer group, reflected below, that was created using the peer group framework and methodology when establishing base salary, annual cash incentive levels, and long-term incentive levels for our executives in 2024. The following chart lists the companies in our compensation peer group for 2024 compensation decisions:
Section 4: COMPENSATION CONSULTANT AND PEER GROUP
| COMPANY(1) | REVENUE (in millions) | APPROX. # OF EMPLOYEES | COMPANY(1) | REVENUE (in millions) | APPROX. # OF EMPLOYEES | | Alteryx, Inc. | $970 | 2,300 | Open Text Corporation | $5,770 | 22,900 | | Box, Inc. | $1,038 | 2,530 | Palo Alto Networks, Inc. | $8,028 | 15,289 | | Dropbox, Inc. | $2,548 | 2,204 | Pure Storage, Inc. | $2,831 | 5,600 | | Fair Isaac Corporation | $1,718 | 3,586 | Rackspace Technology, Inc. | $2,737 | 5,800 | | Fortinet, Inc. | $5,956 | 14,138 | Seagate Technology | $6,551 | 30,000 | | Gen Digital Inc. | $3,812 | 3,400 | Snowflake Inc. | $2,667 | 7,004 | | Guidewire Software, Inc. | $980 | 3,469 | Splunk Inc. | $4,216 | 8,000 | | Informatica Inc. | $1,640 | 5,200 | Teradata | $1,750 | 5,700 | | NetApp, Inc. | $6,268 | 11,800 | Verint Systems Inc. | $910 | 3,700 | | Nutanix, Inc. | $2,149 | 7,150 | Verisign, Inc. | $1,557 | 932 | | Okta, Inc. | $2,263 | 5,908 | | | |
Section 4: COMPENSATION CONSULTANT AND PEER GROUP
(1)When establishing the 2024 peer group, the Committee added Alteryx, Guidewire Software, and Informatica to enhance Teradata's alignment to the market and removed Citrix Systems and Mandiant due to acquisitions. After the establishment of the 2024 peer group, Alteryx and Splunk were acquired and are no longer public companies.
Section 4: COMPENSATION CONSULTANT AND PEER GROUP
| 2025 PROXY STATEMENT | 59 |
Section 5: SEVERANCE, CHANGE IN CONTROL AND OTHER BENEFITS
Section 5: SEVERANCE, CHANGE IN CONTROL AND OTHER BENEFITS Change in Control Severance Plan Each of our currently employed named executive officers participates in the Teradata Change in Control Severance Plan (the “CIC Plan”), the objectives and provisions of which are summarized below:
Section 5: SEVERANCE, CHANGE IN CONTROL AND OTHER BENEFITS
| Business Objectives | Increased Retention Incentives. The CIC Plan enhances our retention incentives by reducing the personal uncertainty that arises from the possibility of a future business combination and promotes objectivity in the evaluation of transactions that are in the best interests of our stockholders. Alignment with Market Practices. Based on information provided by the Compensation Consultant, change in control severance arrangements are used by a vast majority of the companies included in our compensation peer group, and the terms of our CIC Plan are consistent with corporate governance best practices, market trends, and aligned incentives. | | Severance Provisions | Severance Protections on Double Trigger. The CIC Plan provides for separation payments and benefits to our current named executive officers, which are reviewed annually by the Committee. The CIC Plan provides benefits on a “double trigger,” meaning that the severance benefits are paid, and equity awards vest, if our executives incur a qualifying termination in connection with a change in control. The threshold for an acquisition of Teradata stock that would constitute a change in control is an acquisition of 50% or more of the Company’s outstanding common stock or voting securities. No Excise Tax Gross Ups. The CIC Plan does not allow for “gross-up” payments related to excise taxes that may be imposed under Section 280G of the Internal Revenue Code. |
Section 5: SEVERANCE, CHANGE IN CONTROL AND OTHER BENEFITS
Under the CIC Plan, if a participating executive’s employment is terminated by us other than for “cause”, death or disability or if the executive resigns for “good reason” within two years after a “change in control” (or within six months prior to a change in control, if the executive can demonstrate that the termination occurred in connection with a change in control), then Teradata or its successor will be obligated to pay or provide the following benefits: •A lump sum payment equal to 2.0 times the executive’s annual base salary and annual incentive. For this purpose, annual incentive generally means the average annual incentive earned for the prior three years; •A lump sum payment equal to a pro-rata portion of the average annual incentive earned for the prior three years; •Continued medical, dental and life insurance coverage for two years; and •Continued outplacement and financial counseling services, if such services are offered at such time, for one year. The CIC Plan provides that upon termination of employment, each participant is prohibited from soliciting our employees for a 1-year period and is subject to confidentiality restrictions. Moreover, each participant is required to sign a release of all claims against the Company prior to receiving severance benefits under the plan. More information on the CIC Plan, including the estimated payments and benefits payable to the named executive officers, is provided under the “Potential Payments Upon Termination or Change in Control” section of this proxy statement. Executive Severance Plan The Company maintains the Teradata Executive Severance Plan (the “Executive Severance Plan”), in which each of our currently employed named executive officers participates (other than Mr. Petley, who resides in the United Kingdom and receives comparable severance benefits under a separate arrangement which is described below). This plan promotes retention incentives for our executives by establishing severance protections for participants that are consistent with both market levels and Teradata’s past practices, while eliminating the need to negotiate individual severance agreements in
Section 5: SEVERANCE, CHANGE IN CONTROL AND OTHER BENEFITS
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Section 5: SEVERANCE, CHANGE IN CONTROL AND OTHER BENEFITS
connection with an executive’s termination or at the time of hire. This approach also ensures pay practice consistency and fairness across the leadership team. For our participating named executive officers, the Executive Severance Plan provides severance protections, as described below, in the event of termination of employment by the Company without cause (and not because of the participant’s disability or death), and, in the case of Mr. McMillan only as a result of specifically negotiated provision upon his hiring, upon his resignation for good reason, in either case prior to (and not in connection with) a change in control of the Company. As described above, each of our current named executive officers participates in the CIC Plan, and in the event of a termination of employment by the Company without cause or by the participant for good reason in connection with a change in control, those participants would be entitled to receive severance benefits as provided under the CIC Plan. Each of our participating named executive officers would be entitled to receive the following benefits under the Executive Severance Plan in the event of a qualifying termination of employment outside of the change in control context:
Section 5: SEVERANCE, CHANGE IN CONTROL AND OTHER BENEFITS
| Severance Benefits | •Salary and target annual cash incentive continuation for one year; •A prorated target annual cash incentive opportunity under the Company’s Management Incentive Plan; •Continued medical, dental and visual care coverage, with the Company continuing to subsidize its share of the premium during the 1-year salary continuation period; •Outplacement services for up to one year; •Pro-rata vesting of service-based and performance-based RSUs (subject to achievement of applicable performance goals for performance-based RSUs); and •For all retirement-eligible participants (i.e., participants aged 55 or older), an additional year of vesting service for stock options and service-based RSUs (but not performance-based RSUs), and the opportunity to exercise vested stock options until the earlier of three years after termination or the original option expiration date. For this purpose, Ms. Bramley is deemed to have attained age 55 upon any qualified termination. •For Mr. McMillan only (as a result of specifically negotiated provision upon his hiring), enhanced vesting of any outstanding but unvested service-based or performance-based RSUs, such that he will be treated as receiving an additional year of vesting for both types of awards (with payout of any performance-based RSUs subject to actual performance results during the applicable performance period). |
Section 5: SEVERANCE, CHANGE IN CONTROL AND OTHER BENEFITS
As part of a previously announced organizational realignment, the position of Chief Product Officer held by Hillary Ashton was eliminated effective as of December 31, 2024. In connection with this termination, Ms. Ashton was entitled to severance benefits under the Executive Severance Plan. Mr. Petley participates in a comparable United Kingdom severance arrangement, which provides for the greater of (i) the notice of termination and other payments upon the terms, and subject to the conditions, of any required United Kingdom severance guidelines at the time of the qualified termination or (ii) separation benefits substantially equivalent to what an executive officer would be entitled to receive under the Executive Severance Plan. To receive severance benefits under the Executive Severance Plan, a participant must agree to a release of claims against the Company. As a condition of participation in the Executive Severance Plan, each eligible employee must also agree to comply with certain restrictive covenants, including non-competition, non-solicitation, non-disparagement and confidentiality provisions to the extent permissible under applicable law. The Committee does not consider post-employment compensation arrangements, including severance and change in control benefits described above, when making decisions regarding current compensation amounts. More information on the Executive Severance Plan, including the estimated payments and benefits payable to the named executive officers, is provided under the “Potential Payments Upon Termination or Change in Control” section of this proxy statement.
Section 5: SEVERANCE, CHANGE IN CONTROL AND OTHER BENEFITS
| 2025 PROXY STATEMENT | 61 |
Section 5: SEVERANCE, CHANGE IN CONTROL AND OTHER BENEFITS
Perquisites We provide a flexible workplace for our workforce. In connection with our flexible workplace, we provide an executive travel allowance policy to facilitate certain executive officer travel to San Diego based on business needs. While the travel allowance is provided to each executive officer, it is only used by those executive officers that do not live in San Diego or that have a role that does not require them to travel frequently to other geographic locations. The travel allowance is $12,500 per month for Mr. McMillan and $7,500 per month for Ms. Bramley. This monthly allowance is intended to cover airfare, lodging, and ground transportation when traveling to San Diego for business purposes. Ms. Ashton and Messrs. Hutchinson and Petley do not receive a travel allowance. In addition, Mr. Petley is entitled to a car allowance of $11,309 (£9,000) per year. In addition, we pay certain reasonable travel costs for spouses or partners of our executive officers in connection with certain off-site, business-related meetings in which it was appropriate for a spouse or a partner to attend. The amount we reimburse to our executive officers is adjusted to cover applicable taxes as spousal travel is considered a taxable benefit. Health and Well-being Benefits We believe that providing competitive health and well-being benefits at a reasonable cost is an important part of any employee’s compensation package and promotes employee health. Our U.S. executive officers participate in the same health and well-being benefits as our United States ("U.S.") based full-time salaried employees. Health-related benefits for fiscal 2024 included medical, vision, and dental insurance; life, accidental death and dismemberment insurance; and disability insurance. These benefits, including plan design and cost, are analyzed annually. In addition, to encourage and support employee well-being we provide the following benefits to our executive officers as well as our United States based full-time salaried employees: flexible time off, established well-being days, and birthday day off. Mr. Petley resides in the U.K. and is covered by the same health plans and programs as apply to U.K. employees. Retirement Benefits We believe that it is important to allow our U.S.-based employees, including our executive officers, the opportunity to save for retirement through our Teradata Savings Plan, a 401(k) plan (the “Retirement Plan”). Pursuant to the Retirement Plan, Teradata will match U.S.-based employee contributions dollar for dollar up to the first 4% of eligible pay and then will match 50¢ of the next 2% of eligible pay contributed each pay period. Employee contributions and the investment earnings on such contributions are always 100% vested and Teradata contributions and investment earnings become fully vested on the employee’s anniversary date after completing three full years of service at Teradata. Teradata contributions for fiscal 2024 to our Retirement Plan on behalf of our U.S.-based named executive officers can be found under the “All Other Compensation" column of the 2024 Summary Compensation Table in this proxy statement. As a resident of the United Kingdom, Mr. Petley is not eligible to participate in the Retirement Plan. Moreover, he elected not to participate in the pension plan that we maintain for employees in the United Kingdom. In lieu thereof, he receives an annual cash payment equal to 5% of his eligible compensation. For 2024, this benefit equaled $33,873 (£26,958). Charitable Giving We support charitable organizations for our employees through our global matching gift program. The program for our executive officers provides that a gift or gifts by an executive officer to one or more tax exempt 501(c)(3) charitable organizations in the U.S., or organizations with an equivalent status outside the U.S., will be matched by Teradata in an aggregate amount of up to $750 per year, as applicable.
Section 5: SEVERANCE, CHANGE IN CONTROL AND OTHER BENEFITS
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Section 6: OTHER COMPENSATION POLICIES AND PRACTICES
| Clawback and Harmful Activity Policies | We maintain a Clawback Policy under which we are required to recover cash and equity-based incentive compensation paid to a current or former executive officer with respect to the three years preceding a year in which we prepare an accounting restatement due to material noncompliance with any financial reporting requirement under the securities laws. The compensation recoverable is the amount in excess of the amount that would have been payable to the executive officer under the restated financial statements. The clawback must be applied regardless of whether the executive officer was responsible for the error that led to the accounting restatement and is effective as of October 2, 2023. The Clawback Policy is intended to comply with the applicable NYSE listing standards that were revised in response to the mandates under Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. In addition, cash or equity incentive compensation granted under the Stock Incentive Plan, including service-based RSUs and performance-based RSUs are subject to forfeiture and/or clawback of such compensation if the participant’s employment is terminated for Cause. In the event of a termination for Cause, in addition to all share units being automatically forfeited, the participant would also need to (i) return to Teradata all shares that were acquired under the Stock Incentive Plan in the two years prior to the date of termination and that had not yet been disposed and (ii) with respect to any shares acquired pursuant to plan during the two years prior to the date of termination of employment and that had been disposed of, pay to Teradata in cash the fair market value of such shares. “Cause” is defined in our Stock Incentive Plan to include convictions for felonies committed, dishonesty in the course of fulfilling duties, failure to substantially perform duties, a material violation of Teradata’s ethics and compliance program, or such other events as determined by the Committee. These policies support the accuracy of our financial statements and, in conjunction with our stock ownership guidelines, helps to align the interests of our named executive officers with those of our stockholders. In light of our pay-for-performance culture, we felt strongly that our executives and participants under the long-term incentive program should be held to this higher standard of accountability. |
COMPENSATION TABLES
| Name and Principal Position | Year | Salary(1) ($) | Bonus ($) | Stock Awards(2) ($) | Non-Equity Incentive Plan Compensation(3) ($) | All Other Compensation(4) ($) | Total ($) | | Stephen McMillan Chief Executive Officer | 2024 | 800,000 | — | 15,633,777 | 800,000 | 184,532 | 17,418,309 | | | 2023 | 800,000 | — | 12,789,835 | 950,000 | 192,914 | 14,732,749 | | | 2022 | 800,000 | — | 13,079,278 | 970,000 | 186,075 | 15,035,353 | | Claire Bramley Chief Financial Officer | 2024 | 504,538 | — | 6,057,245 | 416,000 | 105,082 | 7,082,865 | | | 2023 | 500,000 | — | 4,604,344 | 475,000 | 107,996 | 5,687,340 | | | 2022 | 500,000 | — | 3,662,168 | 412,250 | 107,465 | 4,681,883 | | Hillary Ashton Chief Product Officer | 2024 | 527,173 | — | 4,509,858 | 412,000 | 18,177 | 5,467,208 | | | 2023 | 500,000 | — | 3,478,860 | 475,000 | 38,429 | 4,492,289 | | | 2022 | 487,615 | — | 3,557,532 | 485,000 | 18,150 | 4,548,297 | | Richard Petley(5)(6) Chief Revenue Officer | 2024 | 525,721 | — | 3,428,500 | 365,350 | 76,793 | 4,396,364 | | Michael Hutchinson(5) Chief Operating Officer | 2024 | 413,722 | — | 3,359,568 | 341,120 | 10,811 | 4,125,221 |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL Background We have entered into agreements and maintain plans and arrangements that may require us to pay or provide compensation and benefits to our named executive officers in the event of certain terminations of employment or a change in control. For example, all of our currently employed named executive officers are participants in our CIC Plan, which provides “double-trigger” severance protections in the event that a participating executive’s employment is terminated under qualifying circumstances in connection with a change in control, and in our Executive Severance Plan, which provides severance protections in the event that a participant’s employment is terminated by the Company without cause (other than as a result of death, disability or a change in control), or in the case of Mr. McMillan, if he terminates his employment for good reason. Estimates of the amounts to be paid or provided to each of our named executive officers in connection with a termination of employment or a change in control are provided below. As part of the restructuring activities announced during 2024 and as a result of personal reasons, Teradata realigned the leadership of the Products Organization and eliminated the position of Chief Product Officer held by Hillary Ashton, effective as of December 31, 2024. As a result, Ms. Ashton was entitled to severance benefits under the Executive Severance Plan. For purposes of the following disclosure, for Ms. Ashton, the tables below show only what she received on her actual termination on December 31, 2024, and not under any other scenario. Estimated Payments to Named Executive Officers The estimates set forth below of the amounts payable to our named executive officers upon termination of employment or in connection with a change in control generally are based on the assumption that the various triggering events occurred on the last day of 2024, along with other material assumptions noted below. The actual amounts that would be paid to a named executive officer upon termination or a change in control can only be determined at the time the actual triggering event occurs. The estimated amount of compensation and benefits described below for our named executive officers generally does not take into account compensation and benefits that were already earned at the time of the applicable triggering event, such as equity awards that have previously vested in accordance with their terms or vested benefits otherwise payable under our compensation programs. As a result, the estimates below for our named executive officers do not provide information on the payout of 2024 incentive awards under the annual cash incentive program for our named executive officers, because those awards were earned as of December 31, 2024 for participating executives, subject to Committee approval, regardless of whether the executive terminated employment or a change in control occurred on that date. Please refer to the Summary Compensation Table for the annual incentives earned by our named executive officers in 2024. Mr. Petley is based in the United Kingdom and his cash compensation was paid in British pounds for the year ending December 31, 2024. The amounts presented in the narrative and tables in this section have been converted from British pounds to U.S. dollars using the closing exchange rate on December 31, 2024 of 1 GBP = $1.25651. Non-Change in Control Scenarios Executive Severance Plan Each of our currently employed named executive officers participates in our Executive Severance Plan (other than Mr. Petley, who resides in the U.K. and receives comparable severance benefits under a separate arrangement). The Executive Severance Plan generally provides severance benefits in the event of termination of employment by the Company without cause (but not as a result of the participant’s disability or death). In the case of Mr. McMillan, the Executive Severance Plan also provides severance benefits in the event of his termination of employment for good reason (because Mr. McMillan negotiated such provision upon his hiring). For this purpose, “good reason” for Mr. McMillan’s termination of his employment generally is defined to mean any of the following events or conditions: (a) a material reduction in his authority, duties and responsibilities (other than an isolated, insubstantial and inadvertent action that is not taken in bad faith); (b) any reduction in his annual base salary; (c) the Company’s failure to timely pay annual or long-term incentive compensation to which he is otherwise entitled; (d) a reduction of five percent or more in his “target” or “maximum” annual or long-term incentive opportunity (other than an across-the-board reduction applicable to senior
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
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POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
Teradata executives); (e) the Company’s failure to continue any equity compensation plan in which he participates (or a substantially equivalent alternative compensation plan), or the Company’s failure to continue his participation in any such equity compensation plan on substantially the same basis (other than as a result of any isolated, insubstantial and inadvertent action not taken in bad faith); or (f) the Company’s failure, unless otherwise required by law, to continue to provide employee benefits that are substantially equivalent, in the aggregate, to those provided under the Company’s qualified and nonqualified employee benefit and welfare plans of the Company (other than a reduction of less than 5% of the aggregate value of such benefits). Notwithstanding the foregoing, in the event of the termination of a participating named executive officer’s employment without cause or for good reason in connection with a change in control of Teradata, severance benefits generally would be provided under the CIC Plan, as discussed below. In the event of a qualifying termination of employment without cause (not in connection with a change in control), or a termination of employment by Mr. McMillan for good reason, our participating named executive officers would be entitled to receive the following severance benefits under the terms of the Executive Severance Plan. •Salary and target annual cash incentive continuation for one year; •A prorated target annual cash incentive payment for the year of termination under the Company’s Management Incentive Plan; •Continued medical, dental and vision care coverage, with the Company continuing to subsidize its share of the premium during the 1-year salary continuation period; •Outplacement services for up to one year; •Pro-rata vesting of service-based and performance-based RSUs (subject to achievement of applicable performance goals for performance-based RSUs); and •For retirement-eligible participants (i.e., participants aged 55 or older), an additional year of vesting service for any unvested stock options and service-based RSUs (but not performance-based RSUs), and the opportunity to exercise vested stock options (if any) until the earlier of three years after termination or the original option expiration date. For this purpose, Ms. Bramley is deemed to have attained age 55 upon any qualified termination. Additionally, for purposes of determining vesting of both his service-based RSUs and his performance-based RSUs, Mr. McMillan would be entitled to an additional year of vesting service, regardless of his age. Severance benefits under the Executive Severance Plan are conditioned upon the participant’s release of claims against the Company, as well as compliance with certain restrictive covenants, including non-competition, non-solicitation, non-disparagement and confidentiality provisions to the extent permissible under applicable law. Mr. Petley participates in a comparable U.K. severance arrangement, which provides for the greater of (i) the notice of termination and other payments upon the terms, and subject to the conditions, of any required United Kingdom severance guidelines at the time of the qualified termination or (ii) separation benefits substantially equivalent to what an executive officer would be entitled to receive under the Executive Severance Plan. Treatment of Equity Awards on Termination of Employment (not in Connection with a Change in Control) The following chart summarizes the standard vesting treatment of our equity awards in the event of termination of employment, other than termination in connection with a change in control, and other than special vesting terms for certain awards as further described below. The general vesting treatment described below is conditioned upon the participant’s compliance with non-competition and non-solicitation provisions, to the extent permissible under applicable law, for a 12-month period (or, if applicable law requires a shorter period, for the maximum period allowed under applicable law), as well as confidentiality restrictions. Our performance-based RSUs and service-based RSUs generally pay out upon vesting. None of our named executive officers have stock option awards.
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
| 2025 PROXY STATEMENT | 73 |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
| SITUATION | PERFORMANCE-BASED RSUs | SERVICE-BASED RSUs | STOCK OPTIONS | | Death and Long-Term Disability (“LTD”) | In the event of death or LTD during the performance period, a pro-rata portion of the award, calculated as of the date of death or LTD, will become vested based on actual results during the performance period. In the event of death or LTD after the end of the performance period and prior to payment, awards vest in full, to the extent earned, upon the date of death or LTD. | Awards vest in full upon the date of death or LTD. | Awards remain exercisable until the later of the expiration of the 10-year term or three years after death or LTD. | | Retirement (termination on or after age 55, with the consent of the Committee, where applicable) | Generally, a pro-rata portion of the award, calculated as of retirement, will become vested based on actual results during the performance period. | Generally, a pro-rata portion will become vested as of date of retirement. | Awards remain exercisable until the earlier of three years following retirement date or the expiration date. | | Termination without Cause | A pro-rata portion of the award, calculated as of the date of termination, will become vested based on actual results during the performance period. | A pro-rata portion will become vested as of the date of termination, and retirement-eligible participants (i.e., participants aged 55 or older) may be credited with an additional year of vesting service. | Awards generally remain exercisable until the earlier of the fifty-ninth day after termination or the expiration date. However, awards held by retirement-eligible participants (i.e., participants aged 55 or older) remain exercisable until the earlier of 3 years after termination or the original option expiration date. | | Voluntary Resignation (other than retirement, as described above) | Unvested awards are forfeited. | Unvested awards are forfeited. | Awards remain exercisable until the earlier of the fifty-ninth day after termination or the expiration date. |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
Notwithstanding the general equity vesting terms described above, certain of our equity awards are subject to special vesting terms, as described below: •Pursuant to his Offer Letter and the Executive Severance Plan, in the event of the termination of his employment by the Company without cause or by Mr. McMillan for good reason (and not in connection with a change of control), Mr. McMillan would be entitled to an additional year of vesting service for purposes of determining pro-rated vesting of his other service-based and performance-based RSUs (with performance-based awards vesting based on actual performance results for the entire performance period). •Pursuant to an Offer Letter and the Executive Severance Plan, in the event of the termination of employment by the Company without cause (and not in connection with a change of control), Ms. Bramley would be entitled to an additional year of vesting service for purposes of determining pro-rated vesting of her or his service-based RSUs. The tables below quantify the amounts that would be payable to our named executive officers in the event of termination of employment, other than termination in connection with a change in control.
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
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POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
Death or Disability We would have provided each named executive officer (or his or her beneficiary) with the following estimated payments or benefits had he or she died or become disabled on December 31, 2024.
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
| EXECUTIVE | LIFE INSURANCE ($)(1) | DISABILITY PAYMENTS ($)(2) | RESTRICTED SHARE UNITS ($)(3) | TOTAL ($) | | Stephen McMillan | 2,300,000 | 760,000 | 16,650,750 | 19,710,750 | | Claire Bramley | 3,540,000 | 573,324 | 5,836,852 | 9,950,176 | | Richard Petley | 2,133,598 | 667,511 | 3,179,574 | 5,980,683 | | Michael Hutchinson | 2,559,000 | 573,200 | 3,094,468 | 6,226,668 |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
(1)Proceeds would be payable by a third-party insurer. Benefits provided upon death depend on the individual level of benefits chosen by the named executive officer during the annual benefits enrollment process. The U.S.-based named executive officers receive the same Company-provided life insurance coverage as is generally offered to U.S.-based employees. The coverage generally is 200% of base salary for life insurance (but capped at $1,500,000). Each U.S.-based employee has the option of choosing a higher level of coverage at his own expense. Each participating U.S.-based named executive officer opted for core coverage for 2024, except for Mr. McMillan and Ms. Bramley, who opted for higher coverage. Mr. Petley receives the same Company-provided life insurance coverage as is generally offered to our U.K.-based employees. The coverage generally is 300% of actual compensation for life insurance. Each U.K.-based employee has the option of choosing a higher level of coverage at his own expense, but Mr. Petley did not elect to have such additional coverage. (2)Benefits provided upon disability generally depend on the individual level of benefits chosen by the named executive officer during the annual benefits enrollment process. The U.S.-based named executive officers receive the same short-term and long-term disability coverage as is generally offered to U.S.-based employees. The core coverage is (i) for short-term disability, 100% base salary for 12 weeks followed by up to 14 weeks at 66 2/3% of base salary, and (ii) for long-term disability, 50% of base salary (up to a maximum monthly payment of $15,000) for the duration of an employee’s long-term disability. Each U.S. employee has the option of choosing a higher level of coverage at his own expense. Each participating U.S.-based named executive officer opted for core coverage for 2024, except for Mr. McMillan and Mr. Hutchinson, who opted for higher coverage. The payments above assume maximum payout based on the named executive officer’s coverage election for 26 weeks of short-term disability plus two years of long-term disability. Mr. Petley receives the same sick leave and long-term disability coverage as is generally offered to U.K.-based employees. The core coverage for (i) sick leave, is dependent on length of service (Mr. Petley is eligible for 13 weeks), and (ii) for long-term disability, 50% of base salary for the duration of an employee's long-term disability. The payment above assumes maximum payout based on Mr. Petley's coverage election for 13 weeks of sick leave plus two years of long-term disability. (3)Equity valuations are based on a closing price of our stock on December 31, 2024 of $31.15, with performance-based RSUs for ongoing performance periods included at the “target” level. Retirement We would have provided each named executive officer with the following estimated payments if he or she had retired (with Committee consent, where applicable) on December 31, 2024.
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
| EXECUTIVE | RESTRICTED SHARE UNITS ($)(1)(2) | TOTAL ($) | | Stephen McMillan | — | — | | Claire Bramley | — | — | | Richard Petley | — | — | | Michael Hutchinson | 2,845,193 | 2,845,193 |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
(1)Equity valuations generally are based on a closing price of our stock on December 31, 2024 of $31.15. (2)Mr. Hutchinson was eligible for retirement (age 55 or older) on December 31, 2024. Committee consent generally would be required for retirement vesting of RSU awards.
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
| 2025 PROXY STATEMENT | 75 |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
Termination without Cause (not in Connection with a Change in Control) Each named executive officer would have been entitled to the following estimated payments and benefits if, on December 31, 2024 and not in connection with a change in control, we terminated the executive’s employment without cause (and not as a result of death or disability), or, in the case of Mr. McMillan, he terminated his employment for good reason. For Ms. Ashton, this table reflects the benefits that she received upon her termination on December 31, 2024.
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
| EXECUTIVE | CASH ($)(1) | RESTRICTED SHARE UNITS ($)(2) | WELFARE BENEFITS ($) | OUT-PLACEMENT COUNSELING ($) | TOTAL ($) | | Stephen McMillan | 1,800,000 | 20,296,618 | 14,313 | 18,000 | 22,128,931 | | Claire Bramley | 1,040,000 | 5,496,386 | 21,048 | 18,000 | 6,575,434 | | Hillary Ashton | 1,030,000 | 3,827,886 | 21,600 | 18,000 | 4,897,486 | | Richard Petley | 1,068,034 | 2,347,983 | 3,741 | 18,000 | 3,437,758 | | Michael Hutchinson | 852,800 | 2,969,825 | 21,048 | 18,000 | 3,861,673 |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
(1)The cash amounts reported in this column reflect cash severance benefits under the Executive Severance Plan, but do not reflect any pro-rata annual cash incentive payments for 2024 for any named executive officer. This is because we are required to assume a termination date of December 31, 2024, on which date 2024 annual cash incentive payments for named executive officers were already vested, regardless of termination of employment. Please refer to the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table for the amount of the 2024 annual cash incentives paid to each executive. (2)Equity valuations are based on a closing price of our stock on December 31, 2024 of $31.15, with performance-based RSUs for ongoing performance periods included at the “target” level. For Mr. McMillan, equity valuations reflect an additional 12 months of vesting service for his other service-based and performance-based RSU awards. For Mr. Hutchinson, who was retirement-eligible (age 55 or older) on December 31, 2024, the equity values reported above include an additional 12 months of vesting service for service-based equity awards. Pursuant to an Offer Letter and the Executive Severance Plan, in the event of the termination of employment by the Company without cause (and not in connection with a change of control), Ms. Bramley would be entitled to an additional year of vesting service for purposes of determining her pro-rated vesting of service-based RSUs. Change in Control Scenarios Change in Control Severance Plan We maintain the CIC Plan to help retain key executives by reducing personal uncertainty that may arise from the possibility of a change in control and to promote their objectivity and neutrality in evaluating transactions that may be in the best interest of the Company and its stockholders. This plan establishes objective criteria to determine whether a change in control has occurred and provides for severance payments and benefits on a “double trigger” basis, which also applies, under the Stock Incentive Plan, to our equity compensation awards. The “double trigger” design is intended to further our goals to retain key executives upon a change in control. Each named executive officer participates in the CIC Plan. Under the CIC Plan, if a participating executive’s employment is terminated by us other than for “cause”, death or disability or if the executive resigns for “good reason” within two years after a “change in control” (or within six months prior to a change in control, if the executive can demonstrate that the termination occurred in connection with a change in control), then Teradata or its successor will be obligated to pay or provide the following benefits: •A lump sum payment equal to 2.0 times the executive’s annual base salary and annual incentive. For this purpose, annual incentive generally means the average annual incentive earned for the prior three years; •A lump sum payment equal to a pro-rata portion of the average annual incentive earned for the prior three years; •Continued medical, dental and life insurance coverage for two years; and •Continued outplacement and financial counseling services, if such services are offered at such time, for one year.
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
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POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
The CIC Plan provides that upon termination of employment, each participant is prohibited from soliciting our employees for a 1-year period and is subject to confidentiality restrictions. Moreover, each participant is required to sign a release of all claims against the Company prior to receiving severance benefits under the plan. The CIC Plan does not provide for any “gross-up” payments related to excise taxes that may be imposed on an executive in connection with a change in control. For purposes of the plan, the term “cause” generally means the willful and continued failure to perform assigned duties or the willful engaging in illegal or gross misconduct that materially injures the Company. The term “good reason” generally means: (i) the assignment of duties inconsistent with the executive’s position, authority, duties or responsibilities as in effect prior to a change in control; (ii) a reduction in base salary; (iii) failure to pay incentive compensation when due; (iv) a reduction in target or maximum incentive opportunities; (v) a failure to continue the equity compensation plan or other employee benefit programs; (vi) a relocation of the executive’s office by more than forty miles (provided that it also increases the executive’s commute by more than 20 miles); or (vii) failure to require a successor to assume the plan. The term “change in control” generally means any of the following: (i) an acquisition of 50% or more of our stock by any person or group, other than the Company, our subsidiaries or employee benefit plans; (ii) a change in the membership of our Board of Directors, such that the current incumbents and their approved successors no longer constitute a majority; (iii) a reorganization, merger, consolidation or sale or other disposition of substantially all of our assets in which any one of the following is true—our old stockholders do not hold at least 50% of the combined enterprise, there is a 50%-or-more stockholder of the combined enterprise (other than as a result of conversion of the stockholder’s pre-combination interest in the Company), or the members of our Board of Directors (immediately before the combination) do not make up a majority of the board of the combined enterprise; or (iv) stockholder approval of a complete liquidation. Treatment of Equity Awards As described above, the Stock Incentive Plan provides for “double trigger” vesting of employee equity awards in connection with a change in control, meaning that, if the awards are assumed by the surviving entity in the change of control, vesting of the awards will not accelerate unless the executive also has a qualifying termination of employment (by the Company without cause or by the executive for good reason). In contrast, if the surviving entity does not assume the equity awards upon the change in control, unvested awards will become vested upon the occurrence of the change in control. The chart below generally summarizes how the unvested equity awards held by our current named executive officers on December 31, 2024 would be treated in connection with a change of control. None of our named executive officers holds any unvested stock options.
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
| PERFORMANCE-BASED RSUs | SERVICE-BASED RSUs | | If the award is not assumed by the surviving entity, then the award will vest in full, either at the “target” level (if the CIC occurs before the end of the applicable performance period) or based on actual performance (if the applicable performance period has been completed). | If the award is not assumed by the surviving entity, then vesting accelerates upon the CIC. | | If the award is assumed, then the award will continue to vest during the applicable performance period, either at the “target” level (if the CIC occurs before the end of the applicable performance period) or based on actual performance (if the applicable performance period has been completed). However, vesting accelerates if the executive’s employment is involuntarily terminated without “cause”, or on account of executive’s death or disability, or the executive resigns for “good reason,” in each case within 24 months after the CIC. | If the award is assumed, then the award will continue to vest during the applicable vesting period. However, vesting accelerates if the executive’s employment is involuntarily terminated without “cause”, or on account of executive’s death or disability, or the executive resigns for “good reason,” in each case within 24 months after the CIC. |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
The tables below quantify the amounts that would be payable to our named executive officers in the event of a change in control or in the event of termination of employment in connection with a change in control.
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
| 2025 PROXY STATEMENT | 77 |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
Qualifying Termination Within Two Years After a Change in Control Our named executive officers would have been entitled to the following estimated payments and benefits if a change in control occurred on December 31, 2024 and the executive’s employment was terminated without “cause” or the executive terminated his or her employment for “good reason” immediately following such change in control.
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
| EXECUTIVE | CASH ($)(1) | RESTRICTED SHARE UNITS ($)(2) | WELFARE BENEFITS ($) | OUTPLACEMENT AND FINANCIAL COUNSELING ($) | TOTAL ($) | | Stephen McMillan | 3,413,333 | 22,221,066 | 31,326 | 18,000 | 25,683,725 | | Claire Bramley | 1,900,587 | 7,985,620 | 43,968 | 18,000 | 9,948,175 | | Richard Petley | 1,987,724 | 4,409,283 | 13,895 | 18,000 | 6,428,902 | | Michael Hutchinson | 1,598,252 | 4,272,612 | 43,631 | 18,000 | 5,932,495 |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
(1)The cash amounts reported in this column reflect cash severance benefits under the CIC Plan, but do not reflect any pro-rata annual cash incentive payments for 2024. This is because we are required to assume a termination date of December 31, 2024. Each named executive officer employed on that date would have already earned a annual cash incentive for 2024 regardless of whether he or she terminated employment. Please refer to the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table for the amount of the 2024 annual cash incentive paid to each executive. (2)Equity valuations are based on the following assumptions: (i) a closing price of our stock on December 31, 2024 of $31.15; (ii) the awards are assumed in the corporate transaction and vest immediately prior to the change in control (at the “target” level, in the case of performance-based RSUs with ongoing performance periods as of December 31, 2024); and (iii) each named executive officer’s employment is terminated without “cause” or by the executive for “good reason” immediately after the corporate transaction. Change in Control and Equity Awards are not Assumed by Surviving Entity Our named executive officers would have been entitled to the following estimated payments and benefits in the event that a “change in control” occurred on December 31, 2024, and the named executive officer’s equity awards were not assumed by the surviving entity. If the awards were assumed by the surviving entity, then the awards would not vest on a change in control but would vest on a qualifying termination within two years after the change in control as illustrated in the table immediately above.
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
| NAME | RESTRICTED SHARE UNITS ($)(1) | TOTAL ($) | | Stephen McMillan | 22,221,066 | 22,221,066 | | Claire Bramley | 7,985,620 | 7,985,620 | | Richard Petley | 4,409,283 | 4,409,283 | | Michael Hutchinson | 4,272,612 | 4,272,612 |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
(1)Equity valuations are based on the following assumptions: (i) a closing price of our stock on December 31, 2024 of $31.15; and (ii) the awards are not assumed in the corporate transaction and as a result vest immediately prior to the change in control (at the “target” level, in the case of performance-based RSUs with ongoing performance periods as of December 31, 2024) and are cashed out.
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
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CEO PAY RATIO DISCLOSURE
CEO PAY RATIO DISCLOSURE We are providing the following information regarding the relationship of the annual total compensation of our CEO and that of our “median employee,” as required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of Regulation S-K. The pay ratio information provided below is a reasonable estimate calculated in a manner consistent with the pay ratio disclosure rules. For our 2024 fiscal year: •The estimated median of the annual total compensation of all of our employees, excluding the CEO, was $68,247; •The annual total compensation of Mr. McMillan, who was serving as our CEO on December 31, 2024, was $17,418,309, as reported in the Summary Compensation Table of this proxy statement; and •The ratio of the annual total compensation of our CEO to the median of the annual total compensation of all other employees was estimated to be 255 to 1. We have elected to identify our median employee every three years unless there is a significant change in employee population or employee compensation arrangements. In light of a reduction-in-force that was implemented in 2024, we decided that it would be appropriate to re-determine our median employee for the year, resulting in a new median employee. In determining the pay ratio information provided above, we identified our new median employee for 2024 by using the following methodology, as permitted by the SEC’s pay ratio disclosure rules: •December 31, 2024 was selected as the date upon which we would identify our employee population and median employee, and, from our tax and payroll records, we compiled a list of all full-time, part-time, and seasonal employees who were employed on that date, including employees working both within and outside of the United States. •Total cash compensation during the 2024 fiscal year was used as a consistently applied compensation measure to identify our median employee from the employees on the list. For this purpose, we define total cash compensation as the sum of base wages and target annual incentives payable in cash during the year. For employees working outside of the United States, total cash compensation was converted to U.S. dollars using 2024 exchange rates. •Applying the methodology described above, we determined that our median employee was a Manager - Individual Contributor located in Brazil. For fiscal year 2024, we calculated the annual total compensation of the median employee using the same methodology that we used to determine the annual total compensation of the CEO, as reported in the Summary Compensation Table of this proxy statement. It should be noted that the SEC’s pay ratio disclosure rules provide reporting companies with a great deal of flexibility in determining the methodology used to identify the median employee and the pay ratio. As such, our methodology may differ materially from the methodology used by other companies to prepare their pay ratio disclosures, which may contribute to a lack of comparability between our pay ratio and the pay ratio reported by other companies, including those within our industry.
CEO PAY RATIO DISCLOSURE
| 2025 PROXY STATEMENT | 79 |
PAY VERSUS PERFORMANCE
PAY VERSUS PERFORMANCE The information provided below is mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(v) of Regulation S-K, which require that we, among other things, report the amount of “compensation actually paid” to our named executive officers for the last three fiscal years and compare those amounts to certain mandated performance metrics. The “compensation actually paid” to our named executive officers is calculated in accordance with applicable SEC rules and does not reflect the actual amount of compensation earned by or paid to our named executive officers during each covered fiscal year. Please refer to the Compensation Discussion and Analysis section of this proxy statement for details regarding how the Compensation and People Committee links the compensation paid to our named executive officers to our corporate performance.
PAY VERSUS PERFORMANCE
| Year | Summary Compen- sation Table Total for PEO (Stephen McMillan) ($) | Summary Compen- sation Table Total for PEO (Victor Lund) ($) | Compen- sation Actually Paid to PEO(1) (Stephen McMillan) ($) | Compen- sation Actually Paid to PEO (Victor Lund) ($) | Average Summary Compen- sation Table Total for Non-PEO NEOs ($) | Average compen- sation Actually Paid to Non-PEO NEOs(2) ($) | Value of Initial Fixed $100 Investment Based on: | | Net Income (in millions)(6) ($) | Company- Selected Measure (Total Public Cloud ARR in millions)(7) ($) | | | | | | | | | Total Shareholder Return(4) ($) | Peer Group Total Shareholder Return(5) ($) | | | | 2024 | 17,418,309 | n/a | 6,943,270 | n/a | 5,267,915 | 2,307,880 | 116.36 | 286.10 | 114 | 609 | | 2023 | 14,732,749 | n/a | 19,889,549 | n/a | 4,331,385 | 5,759,776 | 162.50 | 210.90 | 62 | 528 | | 2022 | 15,035,353 | n/a | 10,958,172 | n/a | 4,123,973 | 2,642,464 | 125.74 | 134.82 | 33 | 357 | | 2021 | 11,570,638 | n/a | 19,339,239 | n/a | 6,081,512 | 8,485,757 | 158.65 | 172.92 | 147 | 202 | | 2020 | 14,329,531 | 1,064,957 | 15,652,678 | (400,670) | 4,516,638 | 3,241,121 | 83.94 | 142.21 | 129 | 106 |
PAY VERSUS PERFORMANCE
(1)Compensation actually paid (“CAP”) was calculated by beginning with the total amount reported in the Summary Compensation Table (the “SCT”) for the applicable year, (i) subtracting the grant date fair value of stock awards reported in the Stock Award column of the SCT (“Stock Awards”), and (ii) adding the change in fair value of stock awards for the applicable year. Fair value amounts were computed in a manner consistent with the fair value methodology used to account for share-based payments in our financial statements under generally accepted accounting principles. Mr. Lund is included in this table as CEO for 2020 and Mr. McMillan is included for all years. Following is a reconciliation of the SCT total and the CAP for 2024 for Mr. McMillan, who has been our CEO since June 8, 2020.
PAY VERSUS PERFORMANCE
| CEO: Stephen McMillan | | | | | | Year | SCT Total ($) | Subtract Grant Date Value of Stock Awards Granted Each Year as Disclosed in the SCT ($) | Add Change in Fair Value of Stock Awards ($) | CAP ($) | | 2024 | 17,418,309 | (15,633,777) | 5,158,738 | 6,943,270 |
PAY VERSUS PERFORMANCE
| 80 | |
PAY VERSUS PERFORMANCE
Following is a table that reflects the change in fair value of stock awards for Mr. McMillan for 2024.
PAY VERSUS PERFORMANCE
| CEO: Change in Fair Value of Stock Awards (S. McMillan) | | | | | | | | | Year | Year-End Fair Value of Stock Awards Granted in Covered Fiscal Year that Remained Unvested at the end of the Covered Fiscal Year ($) | Year-over- Year Increase or Decrease in Fair Value for Stock Awards Granted in Prior Years that Remained Unvested at the end of the Covered Fiscal Year ($) | Increase or Decrease in Fair Value of Stock Awards Granted in Prior Years that Vested in Covered Fiscal Year ($) | Fair Value of Stock Award Granted in Covered Fiscal Year that Vested in Covered Fiscal Year ($) | Adjustments for Stock Awards that Failed to Meet Performance Conditions ($) | Value of Dividends or Other Earnings Paid on Stock Awards not Otherwise Reflected in Fair Value ($) | Total Change in Fair Value on Stock Awards Included in CAP(3) ($) | | 2024 | 8,481,451 | (1,929,825) | (1,392,888) | — | — | — | 5,158,738 |
PAY VERSUS PERFORMANCE
(2)CAP for the other named executive officers was calculated in the same manner as described above for the CEO, except the amounts were averaged for each year. Following is a reconciliation of the average SCT total and the average CAP for the named executive officers, other than the CEO, for 2024. The non-CEO named executive officers included in the average for each year are as follows: a)2024: Claire Bramley, Hillary Ashton, Richard Petley and Michael Hutchinson b)2022 and 2023: Claire Bramley, Hillary Ashton, Todd Cione, and Margaret Treese c)2021: Claire Bramley, Mark Culhane (former CFO), Hillary Ashton, Todd Cione, and Kathleen Cullen-Cote d)2020: Mark Culhane (former CFO), Dan Harrington (former CSO), Hillary Ashton, Kathleen Cullen-Cote, and Scott Brown (former CRO)
PAY VERSUS PERFORMANCE
| Other Named Executive Officers | | | | | | Year | SCT Total ($) | Subtract Grant Date Value of Stock Awards Granted Each Year as Disclosed in the SCT ($) | Add Change in Fair Value of Stock Awards ($) | CAP ($) | | 2024 | 5,267,915 | (4,338,793) | 1,378,758 | 2,307,880 |
PAY VERSUS PERFORMANCE
Following is a table that reflects the average change in fair value of stock awards for the other named executive officers for 2024.
PAY VERSUS PERFORMANCE
| Other Named Executive Officers: Average Change in Fair Value of Stock Awards | | | | | | | | | Year | Year-End Fair Value of Stock Awards Granted in Covered Fiscal Year that Remained Unvested at the end of the Covered Fiscal Year ($) | Year-over- Year Increase or Decrease in Fair Value for Stock Awards Granted in Prior Years that Remained Unvested at the end of the Covered Fiscal Year ($) | Increase or Decrease in Fair Value of Stock Awards Granted in Prior Years that Vested in Covered Fiscal Year ($) | Fair Value of Stock Award Granted in Covered Fiscal Year that Vested in Covered Fiscal Year ($) | Adjustments for Stock Awards that Failed to Meet Performance Conditions ($) | Value of Dividends or Other Earnings Paid on Stock Awards not Otherwise Reflected in Fair Value ($) | Total Change in Fair Value on Stock Awards Included in CAP(3) ($) | | 2024 | 2,102,940 | (292,626) | 270,418 | — | (701,974) | — | 1,378,758 |
PAY VERSUS PERFORMANCE
(3)The fair value amounts were calculated using our stock price on the last day of each fiscal year or the date of vesting, as applicable, and the probable level of achievement of the performance goals as of the end of each year.
PAY VERSUS PERFORMANCE
| 2025 PROXY STATEMENT | 81 |
PAY VERSUS PERFORMANCE
(4)Teradata shareholder return (“TSR”) represents the cumulative investment return of an initial fixed $100 investment in our common stock on December 31, 2019, assuming reinvestment of all dividends. Teradata TSR reflected in the table above may not be indicative of future performance. (5)Peer group TSR represents the cumulative investment return of an initial fixed $100 investment in the S&P Information Technology Index on December 31, 2019, assuming reinvestment of all dividends. (6)Reflects net income, as reported in our Form 10-K for the applicable year. (7)Following is a list of the most important financial measures used by Teradata to link CAP to performance for the most recently completed fiscal year: a)Public Cloud ARR b)Total ARR Growth c)Non-GAAP Operating Margin d)Free Cash Flow Of the goals listed above, we consider Public Cloud ARR to be the most important financial performance measure (that is not otherwise required to be disclosed in the table) used to link CAP to company performance and therefore include it as the Company-Selected Measure in the table above. 1.TSR: Teradata vs. Peer Group
PAY VERSUS PERFORMANCE
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PAY VERSUS PERFORMANCE
2.CAP versus TSR 3.CAP versus Net Income
PAY VERSUS PERFORMANCE
| 2025 PROXY STATEMENT | 83 |
PAY VERSUS PERFORMANCE
4.CAP versus Company-Selected Measure (CSM)
PAY VERSUS PERFORMANCE
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