DEF 14A of Sonos Inc, Jan 29, 2024

DEF 14A of Sonos Inc

Filed Jan 29, 2024 · FY20230000950170-24-008143

Open on EDGAR

  1. Director Nominees

    Director Nominees

  2. Director Nominees

    | Director Nominee | Director Since | Primary Occupation | Independent | Committee Memberships | | | | | | | | Audit | CPD&I | NCG | | Jonathan Mildenhall | January 2024 | CMO, Rocket Companies Inc. | √ | | √ | | | Patrick Spence | January 2017 | CEO, Sonos, Inc. | | | | |

  3. Director Nominees

    CPD&I = Compensation, People and Diversity & Inclusion Committee NCG = Nominating and Corporate Governance Committee

  4. BOARD OF DIRECTORS

    BOARD OF DIRECTORS Our Board is responsible for overseeing and providing advice and counsel to our Chief Executive Officer and senior leadership team in the conduct of operating our business and fostering the creation of long-term value for our stockholders. In accordance with our restated certificate of incorporation and our restated bylaws, our Board currently consists of seven directors and is divided into three classes, with staggered three-year terms. As further described below, the current leadership structure of our Board separates the roles of Chairperson and Chief Executive Officer, with Julius Genachowski serving as our Chairperson and Patrick Spence serving as our Chief Executive Officer. Our Board is composed of members with diverse professional backgrounds, experience, expertise and viewpoints who combine a strong professional reputation and knowledge of our business and industry with a reputation for integrity. Many of our directors have experience serving on board and board committees of other public companies, and have an understanding of corporate governance practices and trends and different business challenges and strategies.

  5. PROPOSAL ONE: ELECTION OF DIRECTORS

    PROPOSAL ONE: ELECTION OF DIRECTORS In accordance with our restated certificate of incorporation and our restated bylaws, our Board currently consists of seven directors and is divided into three classes, with staggered three-year terms. Directors in Class III will stand for election at the Annual Meeting. The terms of office of directors in Class I and Class II expire at our Annual Meetings of Stockholders to be held in 2025 and 2026, respectively. At the recommendation of our Nominating and Corporate Governance Committee, our Board proposes that each of the two nominees named below be elected as a Class III director for a three-year term expiring at our 2027 Annual Meeting of Stockholders or until such director’s successor is duly elected and qualified or until such director’s earlier death, resignation, disqualification or removal. There are no family relationships among our directors and executive officers.

  6. NOMINEES TO OUR BOARD OF DIRECTORS

    NOMINEES TO OUR BOARD OF DIRECTORS The nominees, their ages as of January 29, 2024, biographical information and lengths of service on our Board are set forth below.

  7. NOMINEES TO OUR BOARD OF DIRECTORS

    | Class III Director Nominees |

  8. NOMINEES TO OUR BOARD OF DIRECTORS

    | Jonathan Mildenhall Age: 56 Director since: January 2024 Committees: CPD&I Other Public Company Boards: Current: None Within the past five years: Peloton Interactive Northern Star Investment Corp. IV | Key Skills and Qualifications: Jonathan Mildenhall was selected to serve on our Board because of his deep expertise in consumer brand strategies, global marketing campaigns and initiatives, design, and advertising. Mr. Mildenhall has a long track record of driving innovative and successful approaches in each of these disciplines, and is also known for helping companies broaden their appeal to diverse audiences. Experience: Mr. Mildenhall is currently the Chief Marketing Officer of Rocket Companies Inc., a position he has held since January 2024. He is the Co-Founder and Executive Chairman of TwentyFirstCenturyBrand, a consumer brand strategy and marketing consultancy firm. He also serves on the board of Fanatics, Inc. and previously served on the board of Peloton Interactive, a connected fitness company, from February 2022 to December 2023 and the board of Northern Star Investment Corp. IV, a special purpose acquisition company, from March 2021 to September 2023. Prior to co-founding TwentyFirstCenturyBrand, Mr. Mildenhall served as Chief Marketing Officer of Airbnb from 2014 to 2018. Before Airbnb, Mr. Mildenhall led The Coca-Cola Company’s marketing initiatives as Senior Vice President of integrated marketing communication and design excellence from 2013 to 2014 and as Senior Vice President of global advertising strategy and content excellence from 2007 to 2013. Earlier in his career, Mr. Mildenhall served in various management positions in marketing and advertising. Mr. Mildenhall holds a Higher National Diploma in Business and Finance from The Manchester Metropolitan University. He completed the Advanced Management Program at Harvard Business School, and holds an Honorary Doctorate in Business Administration from The Manchester Metropolitan University. |

  9. NOMINEES TO OUR BOARD OF DIRECTORS

    | Patrick Spence Age: 49 Director since: January 2017 Other Public Company Boards: Current: Snap, Inc. | Key Skills and Qualifications: Patrick Spence was selected to serve as a member of our Board given his expertise in driving product innovation, strategic planning, leading consumer sales and marketing organizations, managing global operations, ESG matters, and in consumer technology policy and regulatory matters. Mr. Spence has held numerous senior leadership positions in the consumer technology sector and brings a unique perspective to the Board as our Chief Executive Officer. Experience: Mr. Spence has served as our Chief Executive Officer and as a member of our Board of Directors since January 2017, and as our President since July 2016. Previously, Mr. Spence served as our Chief Commercial Officer from June 2012 to June 2016. Prior to Sonos, he spent 14 years at Research In Motion Limited, a consumer electronics company and the developer of the BlackBerry device, in a variety of senior roles, including most recently serving as the Senior Vice President and the Managing Director of Global Sales and Regional Marketing from August 2011 until June 2012. Mr. Spence currently serves on the board of directors of Snap, Inc., a camera and social media company. Mr. Spence holds a B.A. in business administration from the Ivey Business School at the University of Western Ontario. |

  10. CONTINUING DIRECTORS

    CONTINUING DIRECTORS The directors who are serving for terms that end following the Annual Meeting, their ages as of January 29, 2024, biographical information and lengths of service on our Board are set forth below.

  11. CONTINUING DIRECTORS

    | Class I Directors | | | Karen Boone Age: 50 Director since: June 2017 Committees: Audit CPD&I Other Public Company Boards: Current: Peloton Interactive Rivian Automotive | Key Skills and Qualifications: Karen Boone was selected to serve as a member of our Board given her background as a C-Suite and finance executive in the retail and consumer sector, most recently at the leading premium home furnishings retailer, RH. Ms. Boone has extensive experience in strategic and financial planning, governance and risk oversight including cybersecurity and product safety and compliance, and global operations, overseeing financial, accounting, human resources, legal and investor relations functions. Ms. Boone is a seasoned director, serving on several public and private company boards and on the Audit Committee (as chair) of several public company boards. Experience: Ms. Boone most recently served as the President, Chief Financial and Administrative Officer of RH (formerly Restoration Hardware, Inc.), a home furnishings company, from May 2014 until August 2018, and as Chief Financial Officer from June 2012 to May 2014. Prior to that, from 1996 to June 2012, she held various roles at Deloitte & Touche LLP, a public accounting firm, most recently as an Audit Partner. She currently serves on the board of directors of Peloton Interactive, a connected fitness company, Rivian Automotive, an automotive technology company, and several private companies. Ms. Boone holds a B.S. in business economics from the University of California, Davis. |

  12. CONTINUING DIRECTORS

    | Joanna Coles Age: 61 Director since: February 2020 Committees: Audit CPD&I Other Public Company Boards: Current: Snap, Inc. Within the past five years: Bark, Inc. Northern Star Investment Corp. II Northern Star Investment Corp. III Northern Star Investment Corp. IV | Key Skills and Qualifications: Joanna Coles was selected to serve as a member of our Board given her media leadership, extensive experience in partnerships and in content across all forms of media, and expertise in brand development and marketing, including by reaching diverse audiences. Ms. Coles serves on a number of boards at the intersection of culture and commerce, helping Sonos tap into unique partnerships, and build a global brand. Experience: Ms. Coles currently serves on the board of directors of Snap Inc., a camera and social media company. Ms. Coles is the former Chief Content Officer of Hearst Magazines, overseeing editorial for Hearst’s 300 titles globally, and served in that role from September 2016 until August 2018. Prior to that she was Editor-in-Chief of Cosmopolitan, a role she started in September 2012. She edited Marie Claire magazine from April 2006 to September 2012. Ms. Coles worked for The Times of London from September 1998 to September 2001 and served as New York Bureau Chief for The Guardian from 1997 to 1998. She is on the boards of Grover, a privately-held consumer electronic rental service company, and KDC-One, a beauty manufacturing company. Ms. Coles has been a special advisor to Cornell Capital private equity since 2019 and has a TV development deal with Futureshack. She is also on the board of the non-profit Fallen Journalists Memorial Foundation. Previously, she served as Chair and CEO of Northern Star Investment Corp. Ms. Coles holds a B.A. in English and American literature from the University of East Anglia. |

  13. CONTINUING DIRECTORS

    | Class II Directors |

  14. CONTINUING DIRECTORS

    | Thomas Conrad Age: 54 Director since: March 2017 Committee: CPD&I Other Public Company Boards: None | Key Skills and Qualifications: Thomas Conrad was selected to serve as a member of our Board due to his expertise in the design, development and innovation of a diverse range of software-based and consumer-focused technology products and those involving audio content. Mr. Conrad also has extensive C-Suite experience, including at the CEO level, and experience leading and building product teams in the consumer technology and content industries. Experience: Mr. Conrad is currently the Chief Executive Officer of Zero Longevity Science, Inc. (formerly Big Sky Health), maker of the metabolic health app Zero, a position he has held since November 2021. He previously served as the Chief Product Officer of Quibi, a short form streaming service, from March 2019 to January 2021. Mr. Conrad was the Vice President of Product at Snap Inc., a camera and social media company, from March 2016 to March 2018. Prior to Snap, Mr. Conrad served as the Chief Technology Officer and Executive Vice President of Product of Pandora Media, Inc., a streaming music service company, from July 2004 to July 2014. Mr. Conrad holds a B.S.E in computer science from the University of Michigan. |

  15. CONTINUING DIRECTORS

    | Julius Genachowski Age: 61 Director since: September 2013, Chairperson since May 2023 Committees: Audit Nominating and Corporate Governance Other Public Company Boards: Current: Mastercard Incorporated Within the past five years: Sprint Corporation | Key Skills and Qualifications: Julius Genachowski was selected to serve on our Board due to his expertise in government and regulatory matters, including as Chairman of the Federal Communications Commission; experience as a C-suite executive, investor and board member in the technology, communications and media industries, including experience with consumer technology and content; his global perspectives and experiences in various roles; his finance and transactional experience as an executive and investor; and his risk oversight and corporate governance experience, including serving on the board of directors of public companies and on Audit (as chair) and Risk Committees. Experience: Mr. Genachowski is a Senior Advisor at The Carlyle Group, a global investment firm, a position he has held since January 2024; from 2014 through 2023 Julius was a Partner and Managing Director at Carlyle. He served as the Chairman of the U.S. Federal Communications Commission from 2009 to 2013. He has held senior executive positions at IAC/InterActiveCorp, an internet, e-commerce and media company. He currently serves on the board of directors of Mastercard Incorporated, a global technology company in the payments industry, where he chairs the Audit Committee and serves on the Risk and Human Resources & Compensation Committees. He previously served on the board of directors of Sprint Corporation, a communications company, from August 2015 until April 2020. He also served on the President’s Intelligence Advisory Board under President Obama, and has served on the staff of then-Representative Charles Schumer and on the staff of the U.S. House Select Committee on the Iran-Contra Affair. Mr. Genachowski holds a B.A. in history from Columbia University and a J.D. from Harvard Law School, and served as a law clerk to U.S. Supreme Court Justice David H. Souter. |

  16. CONTINUING DIRECTORS

    | Michelangelo Volpi Age: 57 Director since: March 2010, Chairperson from November 2010 to May 2023 Committees: Nominating and Corporate Governance Other Public Company Boards: Current: Aurora Innovation, Inc., Confluent, Inc., and Ferrari N.V. Within the past five years: Tishman Speyer Innovation Corp. II, Elastic N.V., Hortonworks, Inc., Fiat Chrysler Automobiles N.V., and Zuora, Inc. | Key Skills and Qualifications: Michelangelo Volpi was selected to serve on our Board because of his broad expertise in strategic planning and evaluating business strategies; his extensive experience as a C-suite executive, investor and board member in the technology industry; his finance experience as an executive and investor; his global perspectives and experiences in various roles; and his finance experience as an executive and investor. Mr. Volpi is a seasoned director, serving on several public and private company boards. Experience: Since July 2009, Mr. Volpi has served as a Partner at Index Ventures, a venture capital firm. Mr. Volpi has served as a director of Aurora Innovation, Inc., a self-driving technology company, which became a publicly-traded company in November 2021, Confluent, Inc., a data streaming platform, since April 2015, and Ferrari N.V., an automotive company, since April 2023, in addition to serving as a director for numerous private companies. Mr. Volpi has previously served as a director of various public companies, including Tishman Speyer Innovation Corp. II, a special purpose acquisition company, from February 2021 to December 2022, Elastic N.V., a search and data analysis company, from January 2013 to July 2022, Fiat Chrysler Automobiles N.V., an automotive company, from April 2017 to January 2021, Zuora, Inc., an enterprise software company, from November 2011 to June 2020, Hortonworks, Inc. (now a subsidiary of Cloudera, Inc.), a data software company, from October 2011 to January 2019, Pure Storage, Inc., an all-flash data storage company, from April 2014 to October 2018, and Exor N.V., a holding company, from April 2012 to May 2018. Mr. Volpi holds a B.S. in Mechanical Engineering, an M.S. in Manufacturing Systems Engineering, and an M.B.A. from Stanford University. |

  17. DIRECTOR COMPENSATION

    DIRECTOR COMPENSATION

  18. Director Compensation Table

    Director Compensation Table The following table presents the total compensation for each person who served as a non-employee director during Fiscal 2023. Mr. Spence is not included in the table below, as he is employed as our Chief Executive Officer and receives no compensation for his service as director. The compensation received by Mr. Spence as an employee is included in “Executive Compensation—Summary Compensation Table” below.

  19. Director Compensation Table

    | Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1)(2) | Total ($) | | Karen Boone | 85,000 | 198,018 | 283,018 | | Joanna Coles | 65,000 | 198,018 | 263,018 | | Thomas Conrad | 75,000 | 198,018 | 273,018 | | Deirdre Findlay (3) | 75,000 | 198,018 | 273,018 | | Julius Genachowski (4) | 116,027 | 198,018 | 314,045 | | Panos Panay (5) | 65,000 | 198,018 | 263,018 | | Michelangelo Volpi (6) | — | — | — |

  20. Director Compensation Table

    The amounts reported in this column represent the aggregate grant date fair value of the restricted stock units (“RSUs”) granted under our 2018 Equity Incentive Plan to our directors during Fiscal 2023, as computed in accordance with Financial Accounting Standard Board Accounting Standards Codification Topic 718 (“ASC 718”), excluding the effect of estimated forfeitures. The assumptions used in calculating the dollar amount recognized for financial statement reporting purposes of the equity awards reported in this column are set forth in Note 2 to our audited consolidated financial statements included in our Annual Report. See footnote (1) to the Summary Compensation Table. (2) Our non-employee directors held the following number of stock options and RSUs, each as of September 30, 2023:

  21. Director Compensation Table

    | Name | Shares Subject to Outstanding Stock Options | Shares Subject to Outstanding Stock Awards | | Karen Boone | 31,766 | 35,633* | | Joanna Coles | — | 10,011 | | Thomas Conrad | 31,766 | 22,841** | | Deirdre Findlay | — | 17,504*** | | Julius Genachowski | 54,376 | 35,633* | | Panos Panay | — | —**** | | Michelangelo Volpi | — | — |

  22. Director Compensation Table

    *Includes 10,011 RSUs that are unvested and 25,622 RSUs that are vested but for which such director has elected to defer settlement until a later date. **Includes 10,011 RSUs that are unvested and 12,830 RSUs that are vested but for which such director has elected to defer settlement until a later date. ***Includes 10,011 RSUs that are unvested and 7,493 RSUs that are vested but for which Ms. Findlay has elected to defer settlement until a later date. In connection with her resignation from the Board on October 3, 2023, Ms. Findlay’s outstanding 10,011 RSUs vested on a pro rata basis, with settlement of the 5,006 shares that vested deferred to a later date as elected by Ms. Findlay. **** In connection with his resignation from the Board on September 27, 2023, Mr. Panay’s outstanding 10,011 RSUs vested on a pro rata basis and Mr. Panay received 5,006 shares. (3) Ms. Findlay resigned from our Board, effective October 3, 2023, in connection with her acceptance of a position with us as Chief Commercial Officer. (4) Mr. Genachowski became our Chairperson in May 2023. Mr. Panay resigned from our Board, effective September 27, 2023. Mr. Volpi declined to accept any compensation for his service on our Board in Fiscal 2023.

  23. Non-Employee Director Compensation Arrangements

    Non-Employee Director Compensation Arrangements Pursuant to a policy adopted by our Board, we pay each non-employee director an annual retainer fee of $55,000 for service on our Board and additional annual retainer fees for services as follows: • $75,000 for the Board Chairperson; • $20,000 for the Chair of our Audit Committee and $10,000 for each of its other members; • $20,000 for the Chair of our CPD&I Committee and $10,000 for each of its other members; and • $20,000 for the Chair of our Nominating and Corporate Governance Committee and $10,000 for each of its other members. In addition, each non-employee director receives an annual equity grant of RSUs having a fair market value on the grant date equal to approximately $200,000 following each annual meeting of stockholders. Any non-employee director who is initially appointed to our Board receives an initial equity grant of RSUs having a fair market value on the grant date equal to approximately $200,000 at the time of appointment, subject to proration based on the date of appointment in the event that he or she is appointed other than on the date of the annual meeting of stockholders. In each case, the number of shares of our common stock subject to the grant of RSUs is determined by dividing $200,000 by the trailing 30 calendar day average of the closing price of our common stock on The Nasdaq Global Select Market. Each grant of RSUs will vest in full on the earlier of (i) the one-year anniversary of the date of grant and (ii) the date of the first annual meeting of stockholders following the date of grant, subject to the director providing services to us through the vesting date; provided, however, that in the event that a director ceases to provide services to us other than for Cause (as defined in the 2018 Equity Incentive Plan (the “2018 Plan”)), his or her outstanding RSUs will vest on a pro rata basis based on the last day of service. Non-employee directors are provided the opportunity to elect to defer settlement of all or a portion of the RSUs granted to them until a separation from service or a set date; in Fiscal 2023, each of Mses. Boone and Findlay and Messrs. Conrad and Panay elected to defer settlement of their annual equity grants. RSUs granted to non-employee directors under the policy described above will accelerate and vest in full in the event of a change of control, subject to the terms of our 2018 Plan. We also reimburse our directors for their reasonable out-of-pocket expenses in connection with attending meetings of our Board and committees.

  24. Executive Compensation Philosophy

    | WHAT WE DO | | | ✓ Link Pay for Performance | We link pay for performance and stockholder interests by heavily weighting compensation to short-term cash incentive awards and long-term equity awards that are tied to the value of our stock and our financial targets. | | ✓ Incentivize a Strong Ownership Mentality | Our primary compensation vehicle is our equity award program, which we use to motivate long-term performance and strongly align the interests of our executives with those of our stockholders. | | ✓ Maintain Rigorous Stock Ownership Guidelines | Executives are subject to stock ownership guidelines equal to a multiple of their annual base salaries (10x for our CEO and 5x for our other NEOs). | | ✓ Use an Independent Compensation Consultant | The Committee selects and engages its own independent compensation consultant. |

  25. Executive Compensation Philosophy

    | WHAT WE DON’T DO | | | ✗ Provide Single Trigger Acceleration | We do not provide for single trigger acceleration in connection with a change of control in employee equity awards. | | ✗ Provide Material Executive Perquisites | We do not provide material perquisites for executives, except in connection with a business-related relocation. | | ✗ Provide Tax Gross-Ups | We do not provide tax gross-ups for “excess parachute payments” or any other executive benefits in employee agreements, except in connection with a business-related relocation or commuting. | | ✗ Provide Excessive Executive Retirement Benefits | We do not provide any executive pension plan or supplemental retirement plans. | | ✗ Encourage Excessive or Inappropriate Risk-Taking | Our compensation programs are balanced in order to mitigate undue risks. | | ✗ Provide for Guaranteed Cash Severance | Our offer letters with our NEOs do not provide for guaranteed cash severance in the event of termination. |

  26. Elements of Fiscal 2023 Compensation

    | Elements of Pay | Structure | Highlights | | Base Salary (see page 47) | ■ Fixed cash compensation for expected day-to-day responsibilities. ■ Reviewed annually and adjusted when appropriate, based on scope of responsibility, performance, time in role, experience, and competitive market for executive talent. | ■ Base salaries for Mr. Bouvat-Merlin, Mr. Millington, and Mr. Siegel were increased at the beginning of Fiscal 2023 in connection with the Committee’s annual review; Fiscal 2023 salaries for each other NEO were unchanged at the start of the year. ■ Mr. Bouvat-Merlin’s base salary was also increased in April 2023 in connection with his promotion to Chief Product Officer. | | Annual Incentive Bonuses (see page 48) | ■ Variable compensation paid in cash. ■ Based on Fiscal 2023 performance against pre-established enterprise-wide financial measures (45% revenue and 45% Adjusted EBITDA margin) and diversity, equity, and inclusion (“DEI”) objectives (10%). ■ Performance metrics evaluated annually for alignment with strategy and market trends. | ■ Fiscal 2023 target bonuses were 65% of base salary for each NEO, including our CEO. Mr. Bouvat-Merlin’s target bonus increased from 55% to 65% of base salary in April 2023 in connection with his promotion to Chief Product Officer. ■ Based on achievement against the financial measures and DEI objectives, Fiscal 2023 annual incentive bonuses paid out at 20.1% of target. |

  27. Elements of Fiscal 2023 Compensation

    | Long-Term Incentives (see page 50) | ■ 50% of long-term incentives granted as part of the Fiscal 2023 long-term incentive program were granted in the form of restricted stock units (“RSUs”) that vest over three years. ■ 50% of long-term incentives granted as part of the Fiscal 2023 long-term incentive program were in the form of performance-based stock units (“PSUs”) that vest at the end of three years based on performance against each predetermined one-year performance goal (50% revenue and 50% Adjusted EBITDA margin). | ■ RSUs align NEOs’ interests with long-term stockholder value creation and encourage executive retention. ■ PSUs further link compensation directly to company performance. ■ All NEOs participated in the equity program for Fiscal 2023, with the exception of Mr. Lazarus who did not receive a grant in Fiscal 2023 after he received a special grant in connection with his appointment as interim CFO in September 2022. In addition, Mr. Bouvat-Merlin received an additional RSU grant in April 2023 in connection with his promotion to Chief Product Officer. ■ The Fiscal 2023 portion of the PSUs was earned at 16.8% of target based on revenue and Adjusted EBITDA margin achievement just above threshold. |

  28. Executive Pay Mix

    Executive Pay Mix In Fiscal 2023, a significant portion of executive compensation for our NEOs consisted of variable, at-risk compensation, with a focus on equity-based long-term incentives. As illustrated below, 91% of target CEO compensation for Fiscal 2023 was composed of variable compensation elements, and 80% of our other currently employed NEOs’ target compensation, on average, was composed of variable compensation elements. 1 The “All Other NEOs Average” pie chart includes only the NEOs that were employees of the Company for all of Fiscal 2023 and participated in all aspects of the ongoing compensation program. Mr. Siegel is excluded due to his departure during the fiscal year. In addition, Mr. Lazarus is excluded due to not participating in the long-term incentive grant for Fiscal 2023 after receiving a special equity award in Fiscal 2022 in connection with his appointment as interim CFO. 2 The pie charts reflect target levels of compensation. As described below, Mr. Bouvat-Merlin received an additional equity award in connection with his promotion to Chief Product Officer, which is included in the pie chart.

  29. CEO Target vs. Realizable Pay – Fiscal 2023

    CEO Target vs. Realizable Pay – Fiscal 2023 Target pay (or target total direct compensation) for Mr. Spence is equal to the salary and bonus paid during the year and the target value of RSUs and PSUs, as applicable (as shown in the “Annual Cash Incentive Plan” and “Fiscal 2023 Equity-Based Awards” sections below). Realizable pay is equal to the salary paid, the value of RSU grants based on the fiscal year-end share price, and the value of in-cycle Fiscal 2023 PSUs based on the fiscal year-end share price and actual financial performance through Fiscal 2023. These amounts do not correspond to values included in the "Summary Compensation Table" for Fiscal 2023. The PSUs are not considered granted for accounting purposes until the performance goals associated with such awards are established. As a result, the Summary Compensation Table reflects a portion of grants made in Fiscal 2021, Fiscal 2022, and Fiscal 2023 rather than reflecting only the grants made in the most recent year.

  30. Pay Positioning and Market Comparators

    Pay Positioning and Market Comparators The Committee considered competitive market practices when determining Fiscal 2023 compensation. Competitive market data, however, is only one of several factors considered by the Committee in setting executive compensation levels. The Committee also considers individual-specific factors, such as individual performance, scope of responsibilities, experience, level, company performance and economic conditions, as described in more detail below. The Committee does not use a formula or fixed target to determine compensation. In setting compensation, the Committee compares base salaries, annual incentive opportunities and long-term compensation (cumulatively, target total direct compensation) for the NEOs to comparable roles from survey data provided by the Radford technology survey. The Committee believes that the Radford technology survey provides a robust sample of similarly sized technology companies and reflects a broad array of companies against which Sonos competes to attract and retain talent.

  31. Annual Cash Incentive Plan

    Annual Cash Incentive Plan We maintain an annual cash incentive plan that is designed to serve as an incentive to drive financial performance for the entire organization. Target bonus levels are considered each year as part of the Committee's review process in the first quarter of the fiscal year. The target bonus levels of 65% of base salary for our NEOs were unchanged for Fiscal 2023. Mr. Bouvat-Merlin’s target bonus was increased from 55% to 65% of base salary in connection with his promotion to Chief Product Officer.

  32. Annual Cash Incentive Plan

    | Name | FY22 Target Bonus | FY23 Target Bonus | | Patrick Spence | 65% | 65% | | Edward Lazarus | 65% | 65% | | Maxime Bouvat-Merlin | 55% | 65% | | Nicholas Millington | 65% | 65% | | Shamayne Braman | 65% | 65% | | Matthew Siegel | 65% | 65% |

  33. Annual Cash Incentive Plan

    Each NEO, including our CEO, participated in our annual cash incentive plan for Fiscal 2023. Mr. Siegel was not eligible to receive a bonus at Fiscal 2023 year-end as he was no longer an employee of the Company when bonuses were paid. Consistent with prior years, the Committee approved a structured and formulaic annual incentive plan for Fiscal 2023 that explicitly links a significant portion of bonus funding to Company financial goals. In Fiscal 2023, the plan financial metrics were revenue and Adjusted EBITDA margin, each weighted at 45%, and a DEI objective metric, weighted at 10%. The Committee decided to continue using revenue, and made a determination to use Adjusted EBITDA margin, as the financial performance metrics under the annual cash incentive plan for Fiscal 2023 based on the belief that sustainable, profitable growth is an important driver of stockholder value creation. The financial metrics are set in the first quarter by the Committee based on our financial forecast for the year. For purposes of this plan, “Adjusted EBITDA margin” was defined as Adjusted EBITDA divided by revenue, with “Adjusted EBITDA” defined as net income (loss) adjusted to exclude the impact of depreciation, stock-based compensation expense, interest income, interest expense, other income (expense), income taxes, and other items that we do not consider representative of our underlying operating performance. For Fiscal 2023, the Committee decided to change the EBITDA-based metric from Adjusted EBITDA to Adjusted EBITDA margin as it and we believe that Adjusted EBITDA margin measures not just the success of our business in improving profitability but also our success in managing our cost base. The Committee believes that tying a portion of compensation to our DEI objectives further emphasizes the importance of “Our Behaviors” (Respect, Transparency, Collaboration, and Ownership) and holds management directly accountable in creating a more diverse and inclusive environment. The DEI metric applicable to our annual bonus program for Fiscal 2023 consisted of working towards (i) increasing Black and Latinx (underrepresented races and ethnicities) representation at all levels and across all functions, (ii) increasing women representation in technical roles across all levels, and (iii) encouraging executive leaders to champion DEI through sponsorship, inclusive leadership, and integration of DEI in their business. Performance against each of these metrics is assessed by the Committee at fiscal year-end as “missed,” “met,” or “exceeded.” Bonus payout opportunities range from 0% to 150% of target for DEI metrics and 0% to 200% of target for revenue and Adjusted EBITDA margin metrics. Payout for each metric is determined based on the table below using linear interpolation where performance is below the minimum payout level threshold.

  34. Annual Cash Incentive Plan

    | Revenue Target (in $ millions) 45% Weight | Adjusted EBITDA Margin Target (Margin Target %) 45% Weight | Bonus Payout | | $2,095 | 11.65% | 200% | | $1,985 | 11.40% | 150% | | $1,925 | 10.90% | 125% | | $1,875 | 10.65% | 110% | | $1,825 | 10.40% | 100% | | $1,785 | 10.15% | 90% | | $1,755 | 9.90% | 80% | | $1,705 | 9.65% | 50% | | $1,625 | 9.15% | 0% |

  35. Annual Cash Incentive Plan

    During Fiscal 2023, we achieved $1.655 billion in revenue, which represented an achievement of 18.9% of target, and Adjusted EBITDA margin (as defined for purposes of the annual incentive plan) of 9.3% ($153.9 million), which represented an achievement of 14.6% of target. For the DEI performance objectives, the Committee determined an achievement of 50% of the target objectives. The Committee landed on this attainment based on its evaluation of our results for Fiscal 2023. We met or exceeded three of the five representation objectives and continue to hold the executive leadership team to a high bar of accountability for driving inclusive leadership throughout the organization, as evidenced by annual engagement and belonging results. The combined achievement against the financial and DEI metrics resulted in a total annual incentive payout of 20.1% of target for our NEOs (other than Mr. Siegel).

  36. Fiscal 2023 Equity-Based Awards

    Fiscal 2023 Equity-Based Awards The majority of the target total direct compensation of our executive officers, including our NEOs, is provided through equity awards. By having a significant percentage of their target total direct compensation payable in the form of equity awards that vest over a number of years and therefore subject to more risk and longer vesting than our cash compensation program, we believe our executive officers are motivated to remain employed with Sonos and take actions that will benefit the Company and its stockholders over the long term. We make annual equity grants to our executive officers in order to align their interests with those of our stockholders and ensure appropriate incentives are in place to promote a focus on our long-term performance. The size of these awards is not determined based on a specific formula, but rather through the exercise of the Committee’s judgment after considering market data, the individual performance of each of the executive officers, the recommendations of our Chief Executive Officer (except with respect to his awards), the appropriate level of compensation for the position given the scope of responsibility, the need to hire or retain an individual in a particular position, the current unvested equity awards held by such individual and related vesting schedules, the level of each executive officer’s total target cash compensation (base salary plus target cash incentive opportunity), and the potential retentive value of the proposed awards. Beginning in Fiscal 2022, we expanded participation for performance-based equity (in the form of PSUs) to include all of our NEOs, with the exception of Mr. Millington, who first participated in performance-based equity in Fiscal 2023, after previously granting PSUs only to our CEO in Fiscal 2020 and 2021. Granting PSUs to our NEOs more broadly and directly links their long-term compensation with Company performance. The Fiscal 2023 NEO equity awards were granted 50% in the form of PSUs and 50% in the form of time-vested RSUs. We did not grant any equity awards to Mr. Lazarus in Fiscal 2023 because he received a $4,000,000 RSU grant in connection with his appointment as interim Chief Financial Officer in September 2022, which vested fifty percent on the first anniversary of the grant date and will vest fifty percent on the second anniversary of the grant date. The table below outlines the total target value of the equity awards our NEOs received in Fiscal 2023, assuming target performance in the case of PSUs. As a result, these values do not reflect the actual grant date fair value of the awards issued, as shown in the Grants of Plan-Based Awards table. The actual number of units granted was determined using a trailing-average closing stock price for the 30 calendar days prior to the date of grant.

  37. Fiscal 2023 Equity-Based Awards

    | Name | Total Target Value of RSUs ($) | Total Target Value of PSUs ($) | | Patrick Spence | $2,500,000 | $2,500,000 | | Edward Lazarus(1) | ― | ― | | Maxime Bouvat-Merlin | $1,350,000 (2) | $850,000 | | Nicholas Millington | $750,000 | $750,000 | | Shamayne Braman | $500,000 | $500,000 | | Matthew Siegel | $800,000 | $800,000 |

  38. Fiscal 2023 Equity-Based Awards

    (1) Mr. Lazarus did not receive an annual equity grant in Fiscal 2023 after he received a special grant in connection with his appointment as interim CFO in September 2022. (2) In addition to his annual equity grant, Mr. Bouvat-Merlin received an additional RSU grant in connection with his appointment as Chief Product Officer on April 17, 2023. The RSU grant had a target value of $500,000 based on market data (as represented by the survey data described above) and will vest in equal quarterly installments over three years. The target values reflected in the table above differ from the grant date fair values reflected in the Summary Compensation Table. This is because we determine the number of shares to grant to each executive based on a 30 calendar-day trailing average share price in order to limit the impact of market volatility on the number of shares underlying granted equity awards. In addition, the grant date value of PSUs for accounting purposes (and therefore for Summary Compensation Table reporting purposes) is not determined until the performance goals are established. Our PSUs have three one-year performance periods with performance goals established in the first quarter of each year of the three-year performance period. As a result of this structure, the share price used to determine grant date fair value on the performance goal approval date can vary significantly from the share price on the date used previously to determine the number of shares. The PSUs have both (i) time-based vesting conditions and time vest at the end of three years based on continued employment and (ii) performance-based vesting conditions and performance vest based on achievement against the revenue and Adjusted EBITDA margin goals measured over three one-year performance periods. The RSUs have time-based vesting conditions and will vest in equal quarterly installments over three years. Please see the “Outstanding Equity Awards at Fiscal Year-End Table” below for more information regarding the vesting schedule of each grant to our NEOs during Fiscal 2023. For the PSUs granted in Fiscal 2023, the Committee established a one-year performance goal at the beginning of year one (Fiscal 2023) and will establish subsequent, one-year performance goals at the beginning of year two (fiscal year 2024) and year three (fiscal year 2025). Each of the three, one-year goals applies to one-third of the total PSUs awarded. Depending on the Company’s performance, between 0% and 200% of the target number of PSUs can be earned. The Committee believes that granting a balance of RSUs and PSUs appropriately aligns our NEOs’ compensation with the achievement of the Company’s strategic goals and long-term stockholder value creation. The Fiscal 2023 performance goals for purposes of determining the number of PSUs earned for the first third of the Fiscal 2023 awards were the same as the financial goals under the annual incentive plan as disclosed above. Profitable growth is a key driver to creating stockholder value, and the Committee believes it is important to tie a portion of our long-term incentive to these metrics. As discussed above, achievement against the financial metrics for Fiscal 2023 was slightly above threshold performance for both revenue and Adjusted EBITDA margin. As a result, 16.8% of the target number of PSUs was earned for the first third of the Fiscal 2023 awards (except for Mr. Siegel’s award, which was not earned because he forfeited his unvested awards upon his termination of employment). The PSU achievement differs from the annual cash incentive plan achievement since PSU achievement does not include DEI objectives as a performance metric. Mr. Spence previously received a PSU grant in Fiscal 2021 and all NEOs (except Mr. Millington) received a PSU grant in Fiscal 2022, and all NEOs (except Mr. Lazarus) received a PSU grant in Fiscal 2023, with each grant including a one-year performance goal covering Fiscal 2023 performance. The performance goals for these grants were the same as the annual incentive plan goals disclosed above (other than the DEI objective metric). As a result, 16.8% of the target number of PSUs were earned for the portion of Fiscal 2021, Fiscal 2022 and Fiscal 2023 awards covering Fiscal 2023 performance for Mr. Spence and the portion of Fiscal 2022 awards covering Fiscal 2023 performance for Mr. Lazarus and Mr. Bouvat-Merlin, and a portion of the Fiscal 2023 awards covering Fiscal 2023 performance for all other NEOs (except Mr. Lazarus and Mr. Siegel (his award was not earned because he forfeited his unvested awards upon his termination of employment)). The chart below outlines the level of achievement of performance goals for completed one-year performance periods for outstanding PSUs: 1 Attainment = (50% * Revenue Achievement) + (50% * Adjusted EBITDA Margin Achievement) for Fiscal 2023 or Adjusted EBITDA Achievement for Fiscal 2022 and Fiscal 2021). The table below outlines the total value of the annual PSU awards the NEOs earned in Fiscal 2023 and the corresponding number of shares. The actual value of the shares delivered will depend on our stock price on the date that the PSUs vest based on continued employment (at the end of the three-year vesting period):

  39. Fiscal 2023 Equity-Based Awards

    | Name | Target Value of PSUs ($) | Target Number of PSUs (#) | Fiscal 2023 Attainment (%) | Earned Number of PSUs (#) | | Patrick Spence (1/3 of Fiscal Year 2021 PSU Award) | 461,786 | 26,942 | 16.80% | 4,526 | | Patrick Spence (1/3 of Fiscal Year 2022 PSU Award) | 428,157 | 24,980 | 16.80% | 4,197 | | Patrick Spence (1/3 of Fiscal Year 2023 PSU Award) | 919,732 | 53,660 | 16.80% | 9,015 | | Edward Lazarus (1/3 of Fiscal Year 2022 PSU Award) | 160,139 | 9,343 | 16.80% | 1,570 | | Maxime Bouvat-Merlin (1/3 of Fiscal Year 2022 PSU Award) | 145,570 | 8,493 | 16.80% | 1,427 | | Maxime Bouvat-Merlin (1/3 of Fiscal Year 2023 PSU Award) | 312,702 | 18,244 | 16.80% | 3,065 |

  40. Fiscal 2023 Equity-Based Awards

    | Nicholas Millington (1/3 of Fiscal Year 2023 PSU Award) | 275,920 | 16,098 | 16.80% | 2,704 | | Shamayne Braman (1/3 of Fiscal Year 2023 PSU Award) | 183,946 | 10,732 | 16.80% | 1,803 |

  41. Role of the Independent Compensation Consultant

    Role of the Independent Compensation Consultant The Committee has retained Semler Brossy as its independent compensation consultant. Semler Brossy is retained by and reports directly to the Committee. The Committee has analyzed whether the work of Semler Brossy as a compensation consultant raises any conflict of interest and has determined that the work of Semler Brossy has not created any conflict of interest. Semler Brossy reviews and advises on all principal aspects of our executive compensation program. Its main responsibilities include, as applicable to a particular fiscal year: ● Providing independent advice to the Committee on current trends and best practices in compensation design and program alternatives, and advising on plans or practices that may improve the effectiveness of our compensation program; ● Providing and discussing market comparators for competitive comparisons and based on this information, offering independent recommendations on NEO compensation, including our CEO and newly hired executives; ● Reviewing the Company’s equity plan and providing an assessment of total stock usage relative to market comparators; ● Reviewing the CD&A and other compensation-related disclosures in our proxy statement; ● Offering recommendations, insights, and perspectives on compensation-related matters; ● Assisting the Committee in designing executive compensation programs that are competitive and align the interests of our executives with those of our stockholders; and ● Providing the Committee with ongoing updates regarding trends and regulatory developments in the areas of executive compensation and human capital management. The Committee typically asks Semler Brossy to attend the Committee’s meetings. Semler Brossy communicates regularly with management to gather information and review proposals.

  42. Role of Management

    Role of Management Our CEO and our other executive officers do not set their own compensation, nor are they present when the Committee sets their specific individual compensation. Our CEO provides his evaluation of each executive officer’s performance to the Committee, and makes recommendations with respect to base salary, target annual incentives, and equity awards for each executive officer other than himself. Our CEO’s recommendation is considered by the Committee, which makes its own ultimate determinations. The human resources department provides additional analysis and guidance as requested by the Committee related to NEO compensation, including the following: Developing, summarizing and presenting information and analyses to enable the Committee to execute its responsibilities, as well as addressing specific requests for information from the Committee; Attending Committee meetings, as requested, to provide information, respond to questions and otherwise assist the Committee; and ● Assisting the CEO in making preliminary recommendations regarding base salary and annual and long-term incentive awards.

  43. Employment, Severance and Change in Control Agreements

    Employment, Severance and Change in Control Agreements We have entered into offer letters with each of our NEOs. Each of these arrangements provides for at-will employment and generally includes the NEO’s initial base salary and an indication of eligibility for an annual cash incentive award opportunity and for the grant of an initial equity award. In addition, each of our NEOs has executed a form of our standard confidential information and invention assignment agreement. Each of the stock options, PSU awards and RSU awards granted to our NEOs under our 2018 Plan, including in Fiscal 2023, contains a provision for the full acceleration of vesting upon an involuntary termination occurring within two months prior to, or within 12 months following, a change in control. In connection with a change in control, PSUs will vest at target for any PSUs for which the performance period has not been completed and based on the number of PSUs that have been earned by their terms for any performance period that has been completed. If an acquirer in a change in control transaction does not assume the PSUs, they will vest in connection with such transaction. Such benefits are intended to incentivize executives who might be involved in acquisition or merger discussions with another entity to make decisions that are in the best interest of Sonos and our stockholders, without being unduly biased by the impact of such a transaction on their personal situation.

  44. Summary Compensation Table

    Summary Compensation Table The following table provides information concerning the compensation of each of our named executive officers for each fiscal year in which they were a named executive officer during the last three fiscal years:

  45. Summary Compensation Table

    | | Fiscal Year | Salary ($) | Stock Awards ($) (1) | Non-Equity Incentive Plan Compensation ($) (2) | All Other Compensation ($)(3) | Total ($) | | Patrick Spence | 2023 | 550,000 | 4,568,856 | 71,858 | — | 5,190,714 | | Chief Executive Officer | 2022 | 550,000 | 7,837,371 | 24,578 | — | 8,411,949 | | | 2021 | 523,346(4) | 4,959,209 | — | — | 5,482,555 | | Edward Lazarus (5) | 2023 | 475,000 | 160,139 | 62,059 | 9,900 | 707,098 | | Former Chief Financial Officer | 2022 | 383,462 | 4,526,500 | 17,136 | 7,789 | 4,934,887 | | Chief Legal and Strategy Officer & Corporate Secretary | 2021 | 375,000 | 591,074 | 392,288 | 8,168 | 1,366,530 | | Maxime Bouvat-Merlin (6) Chief Product Officer | 2023 | 461,539 | 1,816,034 | 55,448 | 6,894 | 2,339,915 | | Nicholas Millington | 2023 | 450,000 | 1,103,679 | 58,793 | 9,846 | 1,622,318 | | Chief Innovation Officer | 2022 | 375,000 | 544,187 | 16,758 | 8,654 | 944,599 | | | 2021 | 375,000 | 752,271 | 392,288 | 8,380 | 1,527,939 | | Shamayne Braman (7) Chief People Officer | 2023 | 400,000 | 735,786 | 52,260 | 7,017 | 1,195,063 | | Matthew Siegel (8) | 2023 | 182,692 | 1,314,261 | — | 1,827 | 1,498,780 | | Former Chief Commercial Officer | 2022 | 450,000 | 1,044,542 | 20,109 | 8,317 | 1,522,968 | | | 2021 | 400,000 | 752,271 | 418,440 | 11,270 | 1,581,981 |

  46. Summary Compensation Table

    Reflects the aggregate grant date fair value of (a) the RSU awards granted under our 2018 Plan to our named executive officers during the fiscal years ended September 30, 2023 (other than Mr. Lazarus), October 1, 2022, and October 2, 2021 and (b) PSU awards granted to Mr. Spence during the fiscal year ended September 30, 2023, October 1, 2022 and October 2, 2021 and to our other named executive officers during the fiscal year ended September 30, 2023 and October 1, 2022, as further described below and all as computed in accordance with ASC 718, excluding the effect of estimated forfeitures. For PSU awards, the grant date fair value is based upon the probable outcome of the performance conditions associated with the awards, which assumes that target performance is achieved. PSU awards have a three-year vesting term generally based on continued employment, with three, one-year performance periods or tranches. The value of PSU awards is included in the Summary Compensation Table in the year when the applicable performance goals are set and the fair value of the PSUs is determinable under ASC 718 (and is determined based on the Company's closing stock price on the trading day immediately preceding such date). The 2023 amount for Mr. Spence includes one-third of his PSU award granted in Fiscal 2023, one-third of his PSU award granted in Fiscal 2022 and one-third of his PSU award granted in Fiscal 2021. The 2023 amount for Mr. Lazarus includes one-third of his PSU award granted in Fiscal 2022. The 2023 amounts for Mr. Bouvat-Merlin and Mr. Siegel include one-third of their PSU awards granted in Fiscal 2023 and one-third of their PSU awards granted in Fiscal 2022. The 2023 amounts for Ms. Braman, and Mr. Millington include one-third of their PSU awards granted in Fiscal 2023. All PSU awards are tranches of the awards for which performance goals were set in December 2022 (Fiscal 2023) for the Fiscal 2023 performance period. The grants to Mr. Siegel were forfeited in connection with his departure. The grant date fair value of the Fiscal 2023 PSU awards assuming maximum achievement of the performance conditions associated with the awards is: Mr. Spence, $3,619,351; Mr. Lazarus, $320,278; Mr. Bouvat-Merlin, $916,544; Mr. Millington, $551,839; Ms. Braman, $367,893; and Mr. Siegel, $862,622. Additional information regarding the assumptions used in calculating the dollar amount recognized for financial statement reporting purposes of the equity awards reported in this column is set forth in Note 2 to our audited consolidated financial statements included in our Annual Report. These amounts reflect bonuses earned by our named executive officers based upon achievement of financial objectives and, for Fiscal 2022 and Fiscal 2023, DEI goals. For more information on bonuses for Fiscal 2023, see “—Fiscal 2023 NEO Compensation Decisions” above. (3) These amounts reflect matching contributions made by us under our 401(k) plan. (4) In June 2020, in connection with uncertainty and challenges stemming from the COVID-19 pandemic and as part of a restructuring plan, our Board approved a temporary twenty percent (20%) reduction in the base salaries for all executive officers. These reductions applied for the period from July 1, 2020 to December 31, 2020 for Mr. Spence and July 1, 2020 to September 30, 2020 for the other NEOs. (5) Mr. Lazarus served as Interim Chief Financial Officer from September 1, 2022 to November 14, 2022 and as Chief Financial Officer from November 15, 2022 to January 21, 2024. Mr. Lazarus remained our Chief Legal Officer and Corporate Secretary during such periods and currently serves in such roles. Effective January 22, 2024, Mr. Lazarus was also appointed as our Chief Strategy Officer. Saori Casey has served as our Chief Financial Officer since January 22, 2024. See “Executive Officers” for further information. (6) Mr. Bouvat-Merlin was appointed as Chief Product Officer effective April 17, 2023 and as an executive officer of the Company, effective May 3, 2023. In connection with his appointment as Chief Product Officer, effective April 17, 2023, his base salary was increased by $25,000 annually, and his target bonus increased from 55% to 65% of base salary. (7) Ms. Braman was appointed as Chief People Officer in June 2022 and as an executive officer of the Company effective January 11, 2023. Mr. Siegel resigned as Chief Commercial Officer effective February 17, 2023.

  47. Grants of Plan-Based Awards in Fiscal 2023 Table

    Grants of Plan-Based Awards in Fiscal 2023 Table The following table presents information concerning each grant of an award made to the named executive officers during the fiscal year ended September 30, 2023 under any cash or equity incentive plan.

  48. Grants of Plan-Based Awards in Fiscal 2023 Table

    | | | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(2) | | | Estimated Future Payouts Under Equity Incentive Plan Awards | | | | | | Name | Type of Award | Grant Date (1) | Approval Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | All Other Stock Awards: Number of Shares of Stock or Units (#) | Grant Date Fair Value of Stock and Option Awards ($) (8) | | Patrick Spence | Cash | — | — | — | 357,500 | 697,125 | — | — | — | — | — | | | RSUs(3) | 11/15/2022 | 11/14/2022 | — | — | — | — | — | — | 160,979 | 2,759,180 | | | PSUs(4) | 12/19/2022 | 11/15/2020 | — | — | — | 6,736 | 26,942 | 53,884 | — | 461,786 | | | PSUs(5) | 12/19/2022 | 11/15/2021 | — | — | — | 6,245 | 24,980 | 49,960 | — | 428,157 | | | PSUs(6) | 12/19/2022 | 11/15/2022 | | | | 13,415 | 53,660 | 107,320 | — | 919,732 | | Edward Lazarus | Cash | — | — | — | 308,750 | 602,063 | — | — | — | — | — | | | PSUs(5) | 12/19/2022 | 11/15/2021 | — | — | — | 2,336 | 9,343 | 18,686 | — | 160,139 | | Maxime Bouvat- Merlin | Cash | — | — | — | 275,816 | 537,841 | — | — | — | — | — | | | RSUs(3) | 11/15/2022 | 11/14/2022 | — | — | — | — | — | — | 54,733 | 938,124 | | | RSUs(7) | 5/16/2023 | 5/16/2023 | — | — | — | — | — | — | 24,483 | 419,639 | | | PSUs(5) | 12/19/2022 | 11/15/2021 | — | — | — | 2,123 | 8,493 | 16,986 | — | 145,570 | | | PSUs(6) | 12/19/2022 | 11/15/2022 | — | — | — | 4,561 | 18,244 | 36,488 | — | 312,702 | | Nicholas Millington | Cash | — | — | — | 292,500 | 570,375 | — | — | — | — | — | | | RSUs(3) | 11/15/2022 | 11/14/2022 | — | — | — | — | — | — | 48,294 | 827,759 | | | PSUs(6) | 12/19/2022 | 11/15/2022 | — | — | — | 4,025 | 16,098 | 32,196 | — | 275,920 | | Shamayne Braman | Cash | — | — | — | 260,000 | 507,000 | — | — | — | — | — | | | RSUs(3) | 11/15/2022 | 11/14/2022 | — | — | — | — | — | — | 32,196 | 551,839 | | | PSUs(6) | 12/19/2022 | 11/15/2022 | — | — | — | 2,683 | 10,732 | 21,464 | — | 183,946 | | Matthew Siegel | Cash | — | — | — | 118,750 | 231,562 | — | — | — | — | — | | | RSUs(3) | 11/15/2022 | 11/14/2022 | — | — | — | — | — | — | 51,514 | 882,950 | | | PSUs(5) | 12/19/2022 | 11/15/2021 | — | — | — | 1,998 | 7,993 | 15,986 | — | 137,000 | | | PSUs(6) | 12/19/2022 | 11/15/2022 | — | — | — | 4,293 | 17,171 | 34,342 | — | 294,311 |

  49. Grants of Plan-Based Awards in Fiscal 2023 Table

    (1) For PSUs, the "grant date" is the date that the performance goals associated with the PSU awards were set by the CPD&I Committee, which is the date the fair values of such awards are determinable under ASC 718. (2) Reflects threshold, target and maximum bonus amounts for Fiscal 2023 performance under our Annual Cash Incentive Plan, as described in “—Fiscal 2023 NEO Compensation Decisions — Annual Cash Incentive Plan” above. Amounts actually received by the named executive officer are reported in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table. The shares subject to the RSU grant will vest in equal quarterly installments over three years following the vesting commencement date of November 15, 2022, generally subject to continued employment. The grants to Mr. Siegel were forfeited in connection with his departure. The amounts shown include one-third of the PSU grant granted in Fiscal 2021, which represents the tranche of the award for which performance goals were set in December 2022 (Fiscal 2023) for the Fiscal 2023 performance period, with the threshold, target and maximum columns reflecting the number of PSUs that can be earned based upon achievement of the pre-established Company performance goal for Fiscal 2023 at 25%, 50% and 200% of target, respectively. As discussed in “—Fiscal 2023 Equity-Based Awards” above, the CPD&I Committee determined achievement of the Fiscal 2023 performance goals at 16.8%. PSU awards have a three-year vesting term generally based on continued employment, and, to the extent earned, will vest upon CPD&I Committee approval of performance attainment at the end of the three-year term. The amounts shown include one-third of the PSU grant granted in Fiscal 2022, which represents the tranche of the award for which performance goals were set in December 2022 (Fiscal 2023) for the Fiscal 2023 performance period, with the threshold, target and maximum columns reflecting the number of PSUs that can be earned based upon achievement of the pre-established Company performance goal for Fiscal 2023 at 25%, 50% and 200% of target, respectively. As discussed in “—Fiscal 2023 Equity-Based Awards” above, the CPD&I Committee determined achievement of the Fiscal 2023 performance goals at 16.8%. PSU awards have a three-year vesting term generally based on continued employment, and, to the extent earned, will vest upon CPD&I Committee approval of performance attainment at the end of the three-year term. The grants to Mr. Siegel were forfeited in connection with his departure. (6) The amounts shown include one-third of the PSU grant granted in Fiscal 2023, which represents the tranche of the award for which performance goals were set in December 2022 (Fiscal 2023) for the Fiscal 2023 performance period, with the threshold, target and maximum columns reflecting the number of PSUs that can be earned based upon achievement of the pre-established Company performance goal for Fiscal 2023 at 25%, 50% and 200% of target, respectively. As discussed in “—Fiscal 2023 Equity-Based Awards” above, the CPD&I Committee determined achievement of the Fiscal 2023 performance goals at 16.8%. PSU awards have a three-year vesting term generally based on continued employment, and, to the extent earned, will vest upon CPD&I Committee approval of performance attainment at the end of the three-year term. The grants to Mr. Siegel were forfeited in connection with his departure. (7) The shares subject to the RSU grant will vest in equal quarterly installments over three years following the vesting commencement date of May 16, 2023, generally subject to continued employment. Reflects the aggregate grant date fair value of the awards granted under our 2018 Plan to our named executive officers during the fiscal year ended September 30, 2023, as computed in accordance with ASC 718. The assumptions used in calculating the dollar amount recognized for financial statement reporting purposes of the equity awards reported in this column are set forth in Note 2 to our audited consolidated financial statements included in our Annual Report. See footnote (1) to the Summary Compensation Table.

  50. Outstanding Equity Awards at Fiscal Year-End Table

    Outstanding Equity Awards at Fiscal Year-End Table The following table provides information regarding the outstanding equity awards held by our named executive officers as of September 30, 2023.

  51. Outstanding Equity Awards at Fiscal Year-End Table

    | | | Option Awards | | | | Stock Awards | | | | | Name | Grant Date (1) | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($)(19) | Equity Incentive Plan Awards: Number of unearned shares, units or other rights that have not vested (#) | Equity Incentive Plan Awards: Market or Payout value of unearned shares, units or other rights that have not vested ($) (21) | | Patrick Spence | 9/8/2016 (2) | 10 | — | 13.56 | 9/7/2026 | — | — | — | — | | | 11/7/2017 (2) | 151,736 | — | 15.03 | 11/6/2027 | — | — | — | — | | | 8/1/2018 (2) | 200,000 | — | 15.00 | 7/31/2028 | — | — | — | — | | | 11/19/2018 (2) | 874,999 | — | 15.44 | 11/18/2028 | — | — | — | — | | | 5/15/2020 | — | — | — | — | 49,343 (3) | 637,018 | 0 | 0 | | | 11/15/2020 | — | — | — | — | 81,029 (4) | 1,046,084 | 0 | 0 | | | 11/15/2021 | — | — | — | — | 32,299 (5) | 416,980 | 24,979 (6) | 322,479 | | | 11/15/2022 | — | — | — | — | 129,749(7) | 1,675,060 | 107,319 (8) | 1,385,488 | | Edward Lazarus | 2/15/2019 (2) | 200,000 | — | 11.12 | 2/14/2029 | — | — | — | — | | | 5/15/2020 | — | — | — | — | 21,711 (9) | 280,289 | 0 | 0 | | | 11/15/2020 | — | — | — | — | 11,114 (10) | 143,482 | 0 | 0 | | | 11/15/2021 | — | — | — | — | 12,081 (11) | 155,966 | 9,342 (6) | 120,605 | | | 9/1/2022 | — | — | — | — | 109,898(12) | 1,418,783 | 0 | 0 | | Maxime Bouvat- Merlin | 8/25/2016 (2) | 52,950 | — | 13.56 | 8/24/2026 | — | — | — | — | | | 5/22/2017 (2) | 22,328 | — | 13.56 | 5/21/2027 | — | — | — | — | | | 5/25/2018 (2) | 48,124 | — | 15.11 | 5/24/2028 | — | — | — | — | | | 8/1/2018 (2) | 28,000 | — | 15.00 | 7/31/2028 | — | — | — | — | | | 5/15/2020 | — | — | — | — | 6,375 (9) | 82,301 | 0 | 0 | | | 11/15/2020 | — | — | — | — | 15,712 (10) | 202,842 | 0 | 0 | | | 11/15/2021 | — | — | — | — | 10,983 (13) | 141,791 | 8,493 (6) | 109,645 | | | 11/15/2022 | — | — | — | — | 44,115 (14) | 569,525 | 36,489 (8) | 471,073 | | | 5/15/2023 | — | — | — | — | 22,443 (15) | 289,739 | 0 | 0 | | Nicholas Millington | 8/1/2014 (2) | 7,730 | — | 11.28 | 7/31/2024 | — | — | — | — | | | 7/7/2016 (2) | 156,842 | — | 13.56 | 7/6/2026 | — | — | — | — | | | 9/8/2016 (2) | 193,642 | — | 13.56 | 9/7/2026 | — | — | — | — | | | 11/14/2016 (2) | 19,948 | — | 13.56 | 8/11/2025 | — | — | — | — | | | 5/22/2017 (2) | 50,000 | — | 13.56 | 5/21/2027 | — | — | — | — | | | 5/25/2018 (2) | 64,000 | — | 15.11 | 5/24/2028 | — | — | — | — | | | 8/1/2018 (2) | 43,000 | — | 15.00 | 7/31/2028 | — | — | — | — |

  52. Outstanding Equity Awards at Fiscal Year-End Table

    | | 5/15/2020 | — | — | — | — | 27,632 (9) | 356,729 | 0 | 0 | | | 11/15/2020 | — | — | — | — | 14,145 (10) | 182,612 | 0 | 0 | | | 11/15/2022 | — | — | — | — | 38,924 (16) | 502,509 | 32,196 (8) | 415,650 | | Shamayne Braman | 11/15/2021 | — | — | — | — | 10,960 (17) | 141,494 | 0 | 0 | | | 2/15/2022 | — | — | — | — | 15,935 (18) | 205,721 | 0 | 0 | | | 11/15/2022 | — | — | — | — | 25,950 (19) | 335,015 | 21,464 (8) | 277,100 | | Matthew Siegel (20) | — | — | — | — | — | — | — | — | — |

  53. Outstanding Equity Awards at Fiscal Year-End Table

    All of the outstanding stock option awards were granted under our 2003 Plan, except for those with a grant date of August 1, 2018, November 19, 2018 and February 15, 2019, which were granted under our 2018 Plan. (2) The options were fully vested and immediately exercisable as of September 30, 2023. (3) 1/16th of the shares subject to the RSU grant vested on August 15, 2020 and an additional 1/16th vests quarterly thereafter, generally subject to continued employment. (4) Consists of (i) a grant of 80,827 RSUs, with 1/16th of the shares subject to the RSU grant vested on February 15, 2021 and an additional 1/16 vesting quarterly thereafter, and generally subject to continued employment, (ii) 51,244 shares earned under a PSU award based on the achievement of the pre-established Company performance goals for Fiscal 2021 at 190.2%, as determined by the CPD&I Committee, (iii) 0 shares earned under a PSU award based on the achievement of the pre-established Company performance goals for Fiscal 2022 at 0.00%, as determined by the CPD&I Committee, and (iv) 4,526 shares earned under a PSU award based on achievement of the pre-established Company performance goals for Fiscal 2023 at 16.8%, as determined by the CPD&I Committee. PSU awards have a three-year vesting term generally based on continued employment, and, to the extent earned, will vest upon CPD&I Committee approval of performance attainment at the end of the three-year term. (5) Consists of (i) a grant of 74,938 RSUs, vesting according to the following schedule: 6.25% of the shares subject to the RSU grant will vest quarterly in year one; 12.5% of the shares subject to the RSU will vest quarterly in year two; and 6.25% of the shares subject to the RSU grant will vest quarterly in year three, following the vesting commencement date of November 15, 2021 and generally subject to continued employment, (ii) 0 shares earned under a PSU award based on the achievement of the pre-established Company performance goals for Fiscal 2022 at 0.00%, as determined by the CPD&I Committee, and (iii) 4,197 shares earned under a PSU award based on the achievement of the pre-established Company performance goals for Fiscal 2023 at 16.8%, as determined by the CPD&I Committee. PSU awards have a three-year vesting term generally based on continued employment, and, to the extent earned, will vest upon CPD&I Committee approval of performance attainment at the end of the three-year term. (6) Consists of the target number of PSUs that may be earned based upon the achievement of pre-determined performance goals for Fiscal 2024, for which performance goals have not been set as of September 30, 2023. PSU awards have a three-year vesting term generally based upon continued employment, and, to the extent earned, will vest upon CPD&I Committee approval of performance attainment at the end of the three-year term. This PSU award is not shown in the Fiscal 2023 Summary Compensation Table because the performance goals associated with it were not established in Fiscal 2023. (7) Consists of (i) a grant of 160,979 RSUs, with 1/12th of the shares subject to the RSU grant vested on February 15, 2023 and an additional 1/12 vesting quarterly thereafter, and generally subject to continued employment, and (ii) 9,015 shares earned under a PSU award based on the achievement of the pre-established Company performance goals for Fiscal 2023 at 16.8%, as determined by the CPD&I Committee. PSU awards have a three-year vesting term generally based on continued employment, and, to the extent earned, will vest upon CPD&I Committee approval of performance attainment at the end of the three-year term. (8) Consists of the target number of PSUs that may be earned based upon the achievement of pre-determined performance goals for Fiscal 2024 and the fiscal year ending September 27, 2025, for which performance goals have not been set as of September 30, 2023. PSU awards have a three-year vesting term generally based upon continued employment, and, to the extent earned, will vest upon CPD&I Committee approval of performance attainment at the end of the three-year term. This PSU award is not shown in the Fiscal 2023 Summary Compensation Table because the performance goals associated with it were not established in Fiscal 2023. (9) 1/16th of the shares subject to the RSU grant vested on August 15, 2020 and an additional 1/16th vests quarterly thereafter, generally subject to continued employment. 1/16th of the shares subject to the RSU grant vested on February 15, 2021 and an additional 1/16th vests quarterly thereafter, generally subject to continued employment. Consists of (i) a grant of 28,027 RSUs, vesting according to the following schedule: 6.25% of the shares subject to the RSU grant will vest quarterly in year one; 12.5% of the shares subject to the RSU grant will vest quarterly in year two; and 6.25% of the shares subject to the RSU grant will vest quarterly in year three, following the vesting commencement date of November 15, 2021 and generally subject to continued employment, (ii) 0 shares earned under a PSU award based on the achievement of the pre-established Company performance goals for Fiscal 2022 at 0.00%, as determined by the CPD&I Committee, and (iii) 1,570 shares earned under a PSU award based on the achievement of the pre-established Company performance goals for Fiscal 2023 at 16.8%, as determined by the CPD&I Committee. PSU awards have a three-year vesting term generally based on continued employment, and, to the extent earned, will vest upon CPD&I Committee approval of performance attainment at the end of the three-year term. 1/2 of the shares subject to the RSU grant vested on September 1, 2023, and the remaining 1/2 vests on September 1, 2024, generally subject to continued employment. (13) Consists of (i) a grant of 25,479 RSUs, vesting according to the following schedule: 6.25% of the shares subject to the RSU grant will vest quarterly in year one; 12.5% of the shares subject to the RSU grant will vest quarterly in year two; and 6.25% of the shares subject to the RSU grant will vest quarterly in year three, following the vesting commencement date of November 15, 2021 and generally subject to continued employment, (ii) 0 shares earned under a PSU award based on the achievement of the pre-established Company performance goals for Fiscal 2022 at 0.00%, as determined by the CPD&I Committee, and (iii) 1,427 shares earned under a PSU award based on the achievement of the pre-established Company performance goals for Fiscal 2023 at 16.8%, as determined by the CPD&I Committee. PSU awards have a three-year vesting term generally based on continued employment, and, to the extent earned, will vest upon CPD&I Committee approval of performance attainment at the end of the three-year term. (14) Consists of (i) a grant of 54,733 RSUs, with 1/12th of the shares subject to the RSU grant vested on February 15, 2023 and an additional 1/12 vesting quarterly thereafter and generally subject to continued employment, and (ii) 3,065 shares earned under a PSU award based on the achievement of the pre-established Company performance goals for Fiscal 2023 at 16.8%, as determined by the CPD&I Committee. PSU awards have a three-year vesting term generally based on continued employment, and, to the extent earned, will vest upon CPD&I Committee approval of performance attainment at the end of the three-year term. (15) 1/12th of the shares subject to the RSU grant vested on August 15, 2023, and an additional 1/12th vests quarterly thereafter, generally subject to continued employment. (16)

  54. Outstanding Equity Awards at Fiscal Year-End Table

    Consists of (i) a grant of 48,294 RSUs, with 1/12th of the shares subject to the RSU grant vested on February 15, 2023 and an additional 1/12 vesting quarterly thereafter and generally subject to continued employment, and (ii) 2,704 shares earned under a PSU award based on the achievement of the pre-established Company performance goals for Fiscal 2023 at 16.8%, as determined by the CPD&I Committee. PSU awards have a three-year vesting term generally based on continued employment, and, to the extent earned, will vest upon CPD&I Committee approval of performance attainment at the end of the three-year term. (17) 1/4th of shares subject to the RSU grant vested on November 15, 2022, and an additional 1/16th vests quarterly thereafter, generally subject to continued employment. (18) 100% of the shares subject to the RSU grant will vest on February 15, 2025, generally subject to continued employment. (19) Consists of (i) a grant of 32,196 RSUs, with 1/12th of the shares subject to the RSU grant vested on February 15, 2023 and an additional 1/12 vesting quarterly thereafter and generally subject to continued employment, and (ii) 1,803 shares earned under a PSU award based on the achievement of the pre-established Company performance goals for Fiscal 2023 at 16.8%, as determined by the CPD&I Committee. PSU awards have a three-year vesting term generally based on continued employment, and, to the extent earned, will vest upon CPD&I Committee approval of performance attainment at the end of the three-year term. (20) Mr. Siegel did not hold any Sonos equity awards as of September 30, 2023. The market values of (i) RSU awards that have not vested, including PSU awards that have been earned based on the achievement of pre-established Company performance goals, and (ii) other PSU awards (at target) are calculated by multiplying the number of shares shown in the table by $12.91, the closing market price of shares of our common stock on September 29, 2023, the last trading day of Fiscal 2023.

  55. Fiscal 2023 Option Exercises and Stock Vested Table

    Fiscal 2023 Option Exercises and Stock Vested Table The following table provides information regarding the number of shares of common stock acquired and the value realized pursuant to the exercise of stock options and the vesting of RSUs during Fiscal 2023 by each of our named executive officers.

  56. Fiscal 2023 Option Exercises and Stock Vested Table

    | | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) (1) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) (2) | | Patrick Spence | — | — | 432,918 | 7,620,038 | | Edward Lazarus | — | — | 175,209 | 2,656,457 | | Maxime Bouvat-Merlin | — | — | 53,913 | 938,542 | | Nicholas Millington | 41,898 | 633,796 | 104,956 | 1,918,677 | | Shamayne Braman | — | — | 16,573 | 287,428 | | Matthew Siegel | 2,688 | 12,849 | 66,546 | 1,316,536 |

  57. Fiscal 2023 Option Exercises and Stock Vested Table

    (1) The value realized on exercise reflects the difference between the fair market value of our common stock at the time of exercise on the exercise date and the exercise price of the option. Amounts shown are presented on an aggregate basis for all exercises that occurred during Fiscal 2023. (2) The value realized on vesting is based on the number of shares underlying the RSU awards that vested during Fiscal 2023 multiplied by the closing market price of a share of our common stock on the applicable vesting date, except where such vesting date fell on a day that was not a trading day, in which case such value was calculated by multiplying the number of shares acquired on vesting by the closing market price on the trading day immediately prior to the applicable vesting date.

  58. Potential Payments upon Termination or Change in Control

    Potential Payments upon Termination or Change in Control We do not have contracts, arrangements or agreements with any of our named executive officers providing severance payments or benefits upon a termination of employment or change in control, other than the acceleration of vesting of unvested options, RSUs or PSUs under the terms of our 2018 Plan upon an involuntary termination of employment within a certain period of time prior to or following a change in control. See “—Employment, Severance and Change in Control Agreements” above for more details. The following table provides information concerning the estimated payments and benefits that would be provided in the circumstances described below for each of the named executive officers, other than Mr. Siegel. Except where otherwise noted, payments and benefits are estimated assuming that the triggering event took place on the last business day of Fiscal 2023, which was September 29, 2023, and that the price per share of our common stock was the closing price on The Nasdaq Global Select Market as of that date, which was $12.91 per share. There can be no assurance that a triggering event would produce the same or similar results as those estimated below if such event were to occur on any other date or at any other price, or if any other assumption used to estimate potential payments and benefits is not correct. Due to the number of factors that affect the nature and amount of any potential payments or benefits, any actual payments and benefits may be different. Mr. Siegel did not receive any payments or benefits in connection with his resignation effective as of February 17, 2023 and is not included in the table below given such resignation

  59. Potential Payments upon Termination or Change in Control

    | | Qualifying Termination Within Two Months Prior to, or Within Twelve Months Following, a Change of Control (1) | | Name | Acceleration of Equity Vesting ($) (2) | | Patrick Spence | 5,483,109 | | Edward Lazarus | 2,119,125 | | Maxime Bouvat-Merlin | 1,866,915 | | Nicholas Millington | 1,457,500 | | Shamayne Braman | 959,329 |

  60. Potential Payments upon Termination or Change in Control

    As used herein, a “Qualifying Termination” means either an involuntary termination of employment without cause or a voluntary resignation for good reason, in each case under the terms of the applicable award agreement. All options granted to our NEOs under the 2003 Plan and the 2018 Plan have fully vested. (2) The value for RSU awards is calculated by multiplying (i) the number of shares underlying unvested RSUs that would be subject to an acceleration of vesting by (ii) $12.91 (the per share closing stock price on September 29, 2023, the last trading date of Fiscal 2023). The value for PSU awards is calculated by multiplying (i) the number of shares underlying unvested PSUs that would be subject to an acceleration of vesting (determined as described in the parenthetical below) by (ii) $12.91 (the per share closing stock price on September 29, 2023, the last trading date of Fiscal 2023). If the acquirer in a change in control transaction does not assume the PSUs, the PSUs will vest in full on such transaction (at target for any PSUs for which the performance period has not been completed and based on the number of PSUs that have been earned by their terms for any performance period that has been completed).

  61. CEO Pay Ratio

    CEO Pay Ratio For Fiscal 2023, the median of the annual total compensation of all employees of our company (other than our CEO) was $165,333, and the annual total compensation of our CEO, Patrick Spence, was $5,190,714. Based on this information, for Fiscal 2023, the ratio of the annual total compensation of our CEO to the median of the annual total compensation of all employees was approximately 31 to 1. This ratio is a reasonable estimate calculated in a manner consistent with SEC rules. To identify the median of the annual total compensation of all of our employees and to determine the annual total compensation of the “median employee,” we used the following methodology and material assumptions, adjustments and estimates: • We selected September 30, 2023 as the date upon which we would identify our median employee. • As of September 30, 2023, our employee population consisted of approximately 1,879 individuals, of which 1,321 were in the United States and 558 were outside of the United States. In determining our employee population, we considered our worldwide employees as of September 30, 2023, including short-term employees and whether employed on a full-time, part-time, temporary or seasonal basis. • To identify our “median employee,” we looked at the total direct compensation for Fiscal 2023 for all active employees, which for this purpose included each such employee's Fiscal 2023 annual base salary (or, in the case of non-salaried employees, hourly rate multiplied by his or her Fiscal 2023 work schedule) plus his or her Fiscal 2023 target bonus plus the actual accounting value of his or her Fiscal 2023 equity awards, if any, and annualized the compensation of any employees who started after the first day of our Fiscal 2023. With respect to the annual total compensation of the “median employee,” we identified and calculated the elements of such employee’s compensation for Fiscal 2023 in accordance with the requirements of Item 401(c)(2)(x) of Regulation S-K, resulting in annual total compensation of $165,333. With respect to the annual total compensation for our CEO, we used the amount reported in the “Total” column of the “Summary Compensation Table” set forth above. Because SEC rules for identifying the median of the annual total compensation of all employees allow companies to adopt a variety of methodologies, apply certain exclusions and make reasonable estimates and assumptions that reflect their employee population and compensation practices, the pay ratio reported by other companies may not be comparable to our pay ratio, as other companies have different employee populations and compensation practices and may have used different methodologies, exclusions, estimates and assumptions in calculating their pay ratios.

  62. Pay Versus Performance

    Pay Versus Performance The following table and related disclosure below are provided in compliance with the requirements of Item 402(v) of Regulation S-K to summarize information regarding the relationship between “Compensation Actually Paid” (as calculated under applicable SEC rules) (“CAP”), for our Principal Executive Officer (PEO) and our non-PEO NEOs, on an average basis, and the Company’s financial performance for Fiscal 2023, Fiscal 2022, and Fiscal 2021. The methodology for calculating amounts presented in the columns “Compensation Actually Paid to PEO” and “Average Compensation Actually Paid to Non-PEO NEOs,” including details regarding the amounts that were deducted from, and added to, the Summary Compensation Table totals to arrive at the values presented for CAP, are provided in the footnotes to the table. A discussion of the relationship between CAP and the Company’s performance measures listed in the table below, including the measure that the Company has deemed most important in linking CAP during Fiscal 2023 to Company performance. The calculations and analysis below do not necessarily reflect the Company’s approach to aligning executive compensation with performance. For information concerning the Company’s compensation philosophy and how the Company aligns executive compensation with financial performance, refer to the Compensation Discussion and Analysis on page 41 of this Proxy Statement.

  63. Pay Versus Performance

    | | | | | | Value of Initial Fixed $100 Investment Based On: | | | | | Fiscal Year | Summary Compensation Table Total for PEO(1) | Compensation Actually Paid to PEO(2)(3)(4)(5) | Average Summary Compensation Table Total for Non-PEO NEOs(1) | Average Compensation Actually Paid to Non-PEO NEOs(2)(3)(4)(5) | Total Shareholder Return(6) | Peer Group Total Shareholder Return | Net Income ($000s)(7) | Adjusted EBITDA Margin (8) | | (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | | 2023 | $5,190,714 | $4,702,791 | $1,472,635 | $915,290 | $83.29 | $146.23 | ($10,274) | 9.3% | | 2022 | $8,411,949 | ($13,528,779) | $2,122,936 | ($2,666,086) | $89.68 | $102.04 | $67,383 | 12.9% | | 2021 | $5,482,555 | $32,271,135 | $1,365,007 | $10,146,753 | $208.13 | $139.60 | $158,595 | 16.2% |

  64. Pay Versus Performance

    NEOs included in the above compensation columns reflect the following:

  65. Pay Versus Performance

    | Fiscal Year | PEO | Non-PEO NEOs | | 2023 | Patrick Spence | Edward Lazarus, Maxime Bouvat-Merlin, Nicholas Millington, Shamayne Braman, and Matthew Siegel | | 2022 | Patrick Spence | Edward Lazarus, Matthew Siegel, Nicholas Millington, Brittany Bagley, and Anna Fraser | | 2021 | Patrick Spence | Edward Lazarus, Matthew Siegel, Nicholas Millington, and Brittany Bagley |

  66. Pay Versus Performance

    (2) Fair value amounts or change in fair value, as applicable, of equity awards in the Compensation Actually Paid columns were determined based on applicable SEC rules with respect to previously-granted RSUs and PSUs. For stock options, changes in fair value were calculated pursuant to a Black-Scholes model as of the last day of the applicable year. (3) For Fiscal 2023, the values included in the Compensation Actually Paid to PEO and Average Compensation Actually Paid to Non-PEO NEOs columns reflect the following adjustments from the values shown in columns (b) and (d), respectively. Numbers may not foot in the tables below due to rounding.

  67. Pay Versus Performance

    | | PEO | Average Non-PEO NEOs | | Total Reported in Fiscal 2023 Summary Compensation Table (SCT) | $5,190,714 | $1,472,635 | | Less: Value of stock awards reported in SCT | $4,568,856 | $1,025,980 | | Plus: Year-end value of stock awards granted in fiscal year that are outstanding and unvested | $1,787,671 | $347,095 | | Plus: Change in fair value (from prior year-end) of stock awards granted in prior years that are outstanding and unvested | ($152,408) | ($50,203) | | Plus: Fair Market Value (FMV) of awards granted this year and that vested this year | $690,336 | $140,302 | | Plus: Change in fair value (from prior year-end) of prior year stock awards that vested this year | $1,755,335 | $256,189 | | Less: Prior year-end fair value of stock awards granted in prior years that failed to vest this year | $0 | $224,749 | | Total Adjustments | ($487,923) | ($557,345) | | Compensation Actually Paid for Fiscal 2023 | $4,702,791 | $915,290 |

  68. Pay Versus Performance

    (4) For Fiscal 2022, the values included in the Compensation Actually Paid to PEO and Average Compensation Actually Paid to Non-PEO NEOs columns reflect the following adjustments from the values shown in columns (b) and (d), respectively. Numbers may not foot in the tables below due to rounding.

  69. Pay Versus Performance

    | | PEO | Average Non-PEO NEOs | | Total Reported in Fiscal 2022 Summary Compensation Table (SCT) | $8,411,949 | $2,122,936 | | Less: Value of stock awards reported in SCT | $7,837,371 | $1,709,400 | | Plus: Year-end value of stock awards granted in fiscal year that are outstanding and unvested | $846,343 | $795,978 | | Plus: Change in fair value (from prior year-end) of stock awards granted in prior years that are outstanding and unvested | ($14,655,694) | ($1,603,036) |

  70. Pay Versus Performance

    | Plus: Fair Market Value (FMV) of awards granted this year and that vested this year | $319,351 | $131,497 | | Plus: Change in fair value (from prior year-end) of prior year stock awards that vested this year | ($613,357) | ($1,337,309) | | Less: Prior year-end fair value of stock awards granted in prior years that failed to vest this year | $0 | $1,066,753 | | Total Adjustments | ($21,940,728) | ($4,789,023) | | Compensation Actually Paid for Fiscal 2022 | ($13,528,779) | ($2,666,086) |

  71. Pay Versus Performance

    For Fiscal 2021, the values included in the Compensation Actually Paid to PEO and Average Compensation Actually Paid to Non-PEO NEOs columns reflect the following adjustments from the values shown in columns (b) and (d), respectively. Numbers may not foot in the tables below due to rounding.

  72. Pay Versus Performance

    | | PEO | Average Non-PEO NEOs | | Total Reported in Fiscal 2021 Summary Compensation Table (SCT) | $5,482,555 | $1,365,007 | | Less: Value of stock awards reported in SCT | $4,959,209 | $523,904 | | Plus: Year-end value of stock awards granted in fiscal year that are outstanding and unvested | $11,845,193 | $826,259 | | Plus: Change in fair value (from prior year-end) of stock awards granted in prior years that are outstanding and unvested | $15,871,590 | $5,025,624 | | Plus: Fair Market Value (FMV) of awards granted this year and that vested this year | $543,055 | $211,775 | | Plus: Change in fair value (from prior year-end) of prior year stock awards that vested this year | $3,487,952 | $3,241,991 | | Less: Prior year-end fair value of stock awards granted in prior years that failed to vest this year | $0 | $0 | | Total Adjustments | $26,788,580 | $8,781,746 | | Compensation Actually Paid for Fiscal 2021 | $32,271,135 | $10,146,753 |

  73. Pay Versus Performance

    (6) For purposes of calculating peer group total shareholder return (“TSR”), the Nasdaq Computer Index was utilized pursuant to Item 201(e) of Regulation S-K and as is reflected in our Annual Report on Form 10-K for the fiscal year ended September 30, 2023. In accordance with applicable SEC rules, peer group TSR was calculated on a market capitalization weighted basis according to the respective issuers’ stock market capitalization at the beginning of each period for which a return is indicated. TSR for both the Company and the peer group is based on an initial $100 investment, measured on a cumulative basis from the market close on October 2, 2020, through and including the end of the fiscal year for which TSR is being presented in the table. TSR calculations reflect reinvestment of dividends. (7) The amounts reported in column (h) represent net income of the Company reported in our Annual Report on Form 10-K for the applicable fiscal year. We identified Adjusted EBITDA margin for Fiscal 2023 as our Company-Selected Measure that represents, in our view, the most important financial performance measure used to link Compensation Actually Paid in Fiscal 2023 to Company performance. Adjusted EBITDA margin was one of two of our financial performance measures used in the Company’s annual cash incentive program, as well as one of two of our equally weighted PSU measures, for Fiscal 2023. We define “Adjusted EBITDA margin” as Adjusted EBITDA divided by revenue, with “Adjusted EBITDA” defined as net income (loss) adjusted to exclude the impact of depreciation, stock-based compensation expense, interest income, interest expense, other income (expense), income taxes, and other items that we do not consider representative of our underlying operating performance. Adjusted EBITDA margin and Adjusted EBITDA are non-GAAP measures. See Annex A of this Proxy Statement for reconciliations of non-GAAP items, including Adjusted EBITDA margin and Adjusted EBITDA.

  74. Pay Versus Performance Additional Disclosure

    Pay Versus Performance Additional Disclosure We believe the Compensation Actually Paid in each of Fiscal 2023, Fiscal 2022, and Fiscal 2021 and over the three-year cumulative period are reflective of the Committee’s emphasis on “pay-for-performance.” The Compensation Actually Paid fluctuated year-over-year, primarily because of our (i) stock performance, (ii) varying levels of achievement against pre-established performance goals under our long-term incentive program, and (iii) varying levels of achievement against pre-established performance goals under our annual cash incentive program. In addition to reviewing this discussion and the Pay Versus Performance Table above, we encourage you to read the Compensation Discussion and Analysis section of this Proxy Statement, which explains our executive compensation philosophy and programs for our PEO and non-PEO NEOs.

  75. Chart 1: Compensation Actually Paid Versus Company and Peer Group Total Shareholder Return (TSR)

    Chart 1: Compensation Actually Paid Versus Company and Peer Group Total Shareholder Return (TSR) The Compensation Actually Paid values for our PEO and non-PEO NEOs over the three-year period of Fiscal 2021 through Fiscal 2023 generally aligns with the Company’s TSR performance over the same period. This is due primarily to the emphasis on at-risk, performance-based equity incentives in the compensation program design for our PEO and non-PEO NEOs. As depicted in the below chart, strong absolute TSR performance in Fiscal 2021 exceeded the peer group and drove an increase in the fair value of equity awards, which resulted in increased Compensation Actually Paid values. Weaker TSR performance in Fiscal 2022 resulted in a significant decrease in Compensation Actually Paid. Flatter TSR performance in Fiscal 2023 resulted in more modest Compensation Actually Paid values. The below chart also compares the Company’s TSR to the peer group TSR, in each case, measured on a cumulative basis from the market close on October 2, 2020, through and including the end of Fiscal 2023.

  76. Chart 2: Compensation Actually Paid Versus Net Income

    Chart 2: Compensation Actually Paid Versus Net Income SEC rules require that net income be presented as a performance measure in the Pay Versus Performance table. No portion of our compensation is directly tied to net income results.

  77. Chart 3: Compensation Actually Paid Versus Adjusted EBITDA Margin

    Chart 3: Compensation Actually Paid Versus Adjusted EBITDA Margin We identified Adjusted EBITDA margin as our Company-Selected Measure that represents, in our view, the most important financial performance measure used to link Compensation Actually Paid in Fiscal 2023 to our performance. Adjusted EBITDA margin was one of two financial performance measures used in our annual cash incentive program, as well as one of two of our PSU measures, for Fiscal 2023. Compensation Actually Paid for 2021 was positive, which is partially attributable to strong Adjusted EBITDA margin results relative to our incentive targets for that year and Adjusted EBITDA margin’s correlation with our stock price. Our Adjusted EBITDA margin results declined in Fiscal 2022 and Fiscal 2023, which partially contributed to negative Compensation Actually Paid in Fiscal 2022 and more modest Compensation Actually Paid in Fiscal 2023.