DEF 14A of Cerence Inc., Dec 31, 2024

DEF 14A of Cerence Inc.

Filed Dec 31, 2024 · FY20240000950170-24-141600

Open on EDGAR

  1. Board of Directors

    Board of Directors Our Board of Directors has a diverse mix of directors with complementary qualifications, skills, expertise, experience and attributes, which is essential to ensuring effective oversight of our business strategy and corporate governance practices. The members of the Board currently are:

  2. Board of Directors

    | | Arun Sarin Independent Board Chairman Former CEO, Vodafone Group Plc. | Seasoned global technology and telecommunications executive with significant global management experience. | | Sanjay Jha Former CEO GlobalFoundries, Inc., Motorola Mobility Devices and COO Qualcomm | Extensive knowledge and leadership of technology organizations. | | | Brian Krzanich President and CEO | Seasoned global public technology organization executive with significant expertise with retail automotive software supply, cloud computing and artificial intelligence. | | Marcy Klevorn Former CIO, Ford Motor Company and EVP and President, Ford Mobility | Extensive knowledge and leadership of automotive and mobility organizations with significant transformation leadership and corporate governance experience. | | | Thomas Beaudoin Former Chief Financial Officer | Abundance of executive, finance, and operational experience in global technology companies. | | Kristi Ann Matus Former CFO and COO, Buckle Agency | Finance and accounting expert with extensive enabled services experience. | | | Marianne Budnik Chief Marketing Officer, VAST Data | Seasoned technology marketing executive at high growth companies. | | Alfred Nietzel Former CFO, CDK Global Inc. | Finance and accounting expert with extensive experience in the automotive supplier market. | | | Douglas Davis Former Senior Vice President, Intel Corp. | Extensive knowledge and leadership of technology organizations with strong global strategic planning, research and development and business acquisitions experience in the automotive industry. | | | |

  3. Board of Directors

    All independent directors being nominated for re-election at the 2025 Annual Meeting have extensive professional experience relevant to their service on our Board. The chart below highlights specific areas in which we believe our independent directors have particularly deep experience relevant to such current profile and strategic needs.

  4. Board of Directors

    | Skills and Qualifications | | | | | | | | Board Diversity We are an organization benefiting from directors with a wide range of diverse experiences and backgrounds. | ✓ | ✓ | | ✓ | ✓ | | | Business/Industry Knowledge We are a software, solutions and professional services organization benefiting from experienced directors knowledgeable in the industry, markets and channel in which we operate. | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | | Financial We are a global publicly traded company conducting complex financial transactions requiring oversight of the processes associated with our financial management and the integrity of our financial results. | ✓ | | | ✓ | ✓ | ✓ | | Global/Emerging Markets Experience We are a global organization participating in both mature and emerging markets, and benefit from a Board with prior international exposure and experience. | ✓ | ✓ | ✓ | ✓ | | ✓ | | Leadership We are a complex, global organization benefiting from experienced oversight of our overall strategy and management, including assessing our strategies and operations. | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | | Technology/Innovation We are a leading provider of cognitive assistants using voice recognition and natural language understanding solutions in highly dynamic and competitive markets and benefit from experience in understanding market trends and disruptive technologies and solutions. | ✓ | ✓ | ✓ | ✓ | | |

  5. Inclusion of Director Nominees in Proxy Statement

    Inclusion of Director Nominees in Proxy Statement Our By-laws provide that a shareholder, or group of up to 20 shareholders, that has owned continuously for at least three years an aggregate of at least 3% of the outstanding Common Stock, may nominate and include in the Company’s proxy materials director nominees constituting up to the greater of two or 20% of the number of directors in office as of the deadline for such nomination, provided that the shareholder(s) and nominee(s) satisfy the requirements in the By-laws (a “proxy access nomination”). To be timely, a nomination notice and required information must be delivered to or mailed and received by the Company’s Corporate Secretary at our principal executive offices not less than 120 days nor more than 150 days prior to the anniversary of the date that the definitive proxy statement with respect to the preceding year’s annual meeting was first released to shareholders; provided, however, that in the event the date of the annual meeting is more than 30 days earlier or more than 60 days later than such anniversary date, notice by the shareholder to be timely must be so delivered or received no earlier than the 150th day prior to such annual meeting and not later than the close of business on the later of (1) the 120th day prior to such annual meeting or (2) the 10th day following the date on which we publicly announce the meeting date. Assuming the date of our 2026 Annual Meeting is not so advanced or delayed, shareholders who wish to include a director nominee in our proxy statement for the 2026 Annual Meeting must notify us no earlier than August 3, 2025 and no later than the close of business on September 2, 2025. Such notice must provide the information required by our By-laws. In addition, to comply with the universal proxy rules, shareholders who intend to solicit proxies in support of director nominees other than the Company’s nominees must provide notice that sets forth the information required by Rule 14a-19 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), no later than December 15, 2025 (i.e., the date that is 60 days prior to the anniversary date of the 2025 Annual Meeting).

  6. ELECTION OF DIRECTORS

    ELECTION OF DIRECTORS Our Board currently consists of nine members. At the 2025 Annual Meeting, seven directors will be elected to the Board. The Nominating & Governance Committee of the Board recommended, and the Board approved, Arun Sarin, Brian Krzanich, Marianne Budnik, Douglas Davis, Marcy Klevorn, Kristi Ann Matus and Alfred Nietzel, as nominees for election at the 2025 Annual Meeting as directors. Each person elected as a director will be elected for a one-year term expiring at the 2026 Annual Meeting. Directors hold office until their successors have been duly elected and qualified, or until their earlier death, resignation or removal. The Nominating & Governance Committee of the Board recommended, and the Board approved effective at the close of the 2025 Annual Meeting, that the size of the Board will be decreased from nine (9) to seven (7) authorized directors. Thomas Beaudoin and Sanjay Jha have not been nominated for re-election to the Board, and their respective terms on the Board will expire at the 2025 Annual Meeting. The names of and certain biographical information about the director nominees are set forth below. The information below also includes the specific experience, qualifications, attributes and skills that led to our Board’s conclusion that the nominees should serve as a director of Cerence. There are no family relationships among any of our directors or executive officers.

  7. Information Regarding the Nominees for Election as Directors

    Information Regarding the Nominees for Election as Directors

  8. Information Regarding the Nominees for Election as Directors

    | Board Nominee | Qualifications | | Arun Sarin Age: 70 Current Independent Chair of the Board Board Member since: October 2019 | Mr. Sarin served as Chief Executive Officer of Vodafone Group Plc from 2003 until his retirement in 2008. Mr. Sarin began his career at Pacific Telesis Group in 1984. He progressed through various management positions there and at AirTouch Communications Inc., from which Pacific Telesis spun off in 1994, and was named President and Chief Operating Officer of AirTouch in 1997. After AirTouch merged with Vodafone in 1999, Mr. Sarin was appointed Chief Executive Officer of Vodafone’s U.S./Asia-Pacific region. He left Vodafone in 2000 to become Chief Executive Officer of Bluecora (fka InfoSpace, Inc.), and from 2001 until 2003, he served as Chief Executive Officer of Accel-KKR Telecom. Mr. Sarin rejoined Vodafone in 2003 as its group Chief Executive Officer. After his retirement from Vodafone in 2008, he served as a senior advisor to Kohlberg Kravis Roberts & Co. for five years. Mr. Sarin currently serves as a director at The Charles Schwab Corporation, Accenture plc and Ola Electric. He previously served as a director for Cisco Systems from 2009 to 2020, for Safeway, Inc. from 2009 to 2015 and for Blackhawk Network Holdings, Inc. from 2009 to 2018. Mr. Sarin holds M.B.A. and Master of Science (Engineering) degrees from the University of California-Berkeley and a B.S. from the Indian Institute of Technology in Kharagpur, India. Because of his significant global, managerial and financial experience and background in technology and telecommunications, we believe Mr. Sarin is well qualified to serve as a member of our Board. |

  9. Information Regarding the Nominees for Election as Directors

    | Brian Krzanich Age: 64 Board Member since: October 2024 | Mr. Krzanich has served as our President and CEO since October 7, 2024. Mr. Krzanich is an engineer and business executive, best known for his tenure as the CEO of Intel Corporation. Mr. Krzanich’s technical expertise, combined with his leadership skills, led to various senior roles. In 2013, Mr. Krzanich was appointed CEO of Intel Corp. In this role, he faced the challenge of guiding Intel through a rapidly changing technology landscape, including the shift from PC-centric computing to mobile- and data-centric technologies. Mr. Krzanich focused on expanding Intel’s reach beyond traditional CPUs to areas like artificial intelligence, autonomous driving, and the Internet of Things, and was also known for championing diversity and sustainability initiatives, pledging to increase female and minority representation in Intel’s workforce, and committing the company to sourcing conflict-free minerals. In 2018, Mr. Krzanich joined CDK Global, a technology provider for the automotive industry, where he served as CEO from 2019 to 2022. During his tenure he led the technology company through a successful sale to investment firm Brookfield Business Partners. Mr. Krzanich holds a Bachelor's Degree in Chemistry from San Jose State University. With his extensive global technology leadership and significant experience in the automotive industry, Mr. Krzanich brings a deep understanding of AI and next-generation technologies, all of which we believe makes him well qualified to serve as a member of our Board. | | Marianne Budnik Age: 56 Nominating & Governance Committee Chair and Compensation Committee Member Board Member since: October 2019 | Ms. Budnik has served as Chief Marketing Officer for VAST Data since September 2023. Previously, she served as Chief Marketing Officer at Talon Cyber Security from March 2022 to August 2023 and Crowdstrike Holdings Inc. from December 2020 to March 2022. Prior to joining Crowdstrike, Ms. Budnik served as Chief Marketing Officer for CyberArk Software Ltd. from 2017 to 2020. Her prior experience also includes serving as the Chief Marketing Officer for SimpliVity Corporation (acquired by Hewlett Packard Enterprise) from 2014 to 2017, and as Chief Marketing Officer for Acme Packet, Inc. (acquired by Oracle Corporation) and CA Technologies. Ms. Budnik served as a director at Schibsted Media Group from 2016 to 2020. Ms. Budnik currently serves as a director of F5, Inc. Ms. Budnik holds an M.B.A. from Boston University Questrom School of Business, and a bachelor’s degree from Babson College. Ms. Budnik is a seasoned technology marketing executive, experienced in leading transformational marketing initiatives at high growth companies, and driving market disruption with some of the fastest growing B2B start-ups in the technology and telecommunications industries, all of which we believe makes her well qualified to serve as a member of our Board. | | Douglas Davis Age: 63 Nominating & Governance Committee Member Board Member since: May 2022 | Mr. Davis served in various positions at Intel Corporation from 1984 until his retirement in 2019, most recently serving as Senior Vice President of Intel’s Automated Driving Group from 2017 to 2019, which included responsibility for forming the company’s automated driving business, establishing Intel as a leading supplier of chip technology for autonomous vehicles, and leading the company’s acquisition of Mobileye. From 2015 until 2017, Mr. Davis served as Senior Vice President and General Manager of Intel’s Internet of Things group. Mr. Davis is currently a director for Oshkosh Corporation and Verra Mobility. Mr. Davis holds a M.B.A. from the Arizona State University W.P. Carey School of Business and a Bachelor’s Degree in Electrical Engineering from New Mexico State University. Mr. Davis is a technology industry veteran who brings to our Board strong global strategic planning experience and business leadership qualities, as well as valuable experience and relationships within the automotive, autonomous driving and IoT industries, which we believe makes him well qualified to serve as a member of our Board. |

  10. Information Regarding the Nominees for Election as Directors

    | Marcy Klevorn Age: 65 Compensation Committee and Nominating & Governance Committee Member Board Member since: June 2023 | Ms. Klevorn is a known and respected automotive and mobility industry leader, having spent 35 years at Ford Motor Company. During her tenure, she held varying executive and leadership roles within the company’s information technology organization, including global Chief Information Officer (“CIO”) and, previously, CIO of Ford Motor Company in Europe. Ms. Klevorn also served as EVP and President of Ford Mobility, where she oversaw Ford Smart Mobility LLC and its acquisitions and other investments that accelerated the company’s plans to design, build, grow, and invest in emerging mobility services. In this role, she also chaired the board of Ford Autonomous Vehicles LLC. Ms. Klevorn most recently served as the Chief Transformation Officer of Ford Motor Company, where she accelerated Ford’s transformation efforts by refining its corporate governance and fostering adoption of process improvements and agile teams. She also led partnerships with key technology partners and played a critical role in the company’s diversity, equity and inclusion efforts until her departure in 2019. Ms. Klevorn currently serves as a director of Northern Trust Corporation and Humana and on the Provost Advisory Committee at the University of Michigan. She holds a bachelor’s degree in business from the University of Michigan Stephen M. Ross School of Business. Ms. Klevorn has extensive automotive and mobility industry and transformation expertise as well as corporate governance and key leadership skills developed through her decades of experience, all of which we believe makes her well qualified to serve as a member of our Board. | | Kristi Ann Matus Age: 56 Audit Committee Chair Board Member since: September 2019 | Ms. Matus served as the CFO and COO of Buckle Agency LLC from 2020 to July 2022. From 2014 until 2020, Ms. Matus was an executive advisor to Thomas H. Lee Partners. From 2014 to 2016, Ms. Matus served as the Executive Vice President, Chief Financial and Administrative Officer at athenahealth, Inc. From 2012 to 2013, Ms. Matus served as Executive Vice President and Head of Governmental Services at Aetna, Inc. Prior to Aetna, she held several senior leadership roles at United Services Automobile Association, including Executive Vice President and Chief Financial Officer from 2008 to 2012. She began her career at Thrivent where she held various financial and operational roles for over a decade. Ms. Matus currently serves as a director at Ambac Financial Group, Inc., and she has previously served as a director of Alliance Bernstein Holding L.P., Equitable Holdings, Nextech Systems, Tru Optik Data Corp., and Jordan Health Services, Inc. Ms. Matus holds a B.S. degree from University of Wisconsin, Oshkosh. Ms. Matus has extensive management and financial expertise as well as corporate governance and key leadership skills developed through her decades of experience, all of which we believe makes her well qualified to serve as a member of our Board. | | Alfred Nietzel Age: 63 Compensation Committee Chair and Audit Committee Member Board Member since: October 2019 | Mr. Nietzel has been an independent consultant since 2017. From 2014 to 2017, Mr. Nietzel served as the Chief Financial Officer and Executive Vice President at CDK Global, Inc., a leading provider of software and information technology solutions to the automotive retail sector. Prior to CDK Global’s spin-off, Mr. Nietzel was with Automatic Data Processing, Inc. (“ADP”) since 2001 and served as Chief Financial Officer for the Dealer Services Division, Chief Financial Officer for the Employer Services Division and as ADP’s Corporate Controller. Prior to joining ADP, Mr. Nietzel served for 17 years with Proctor & Gamble Inc. in numerous financial management roles in the United States, United Kingdom, and Australia. Mr. Nietzel currently serves as the Chairman of the Board of One Span Inc. and as a director at Baxter Credit Union. Mr. Nietzel holds a B.S. degree from Eastern Illinois University. Mr. Nietzel led and orchestrated the financial and administrative execution of the spin-off creating CDK Global in 2014 and has extensive management and corporate experience and financial expertise, all of which we believe makes him well qualified to serve as a member of our Board. |

  11. Information Regarding the Nominees for Election as Directors

    THE BOARD UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE “FOR” THE ELECTION OF THE SEVEN NOMINEES LISTED ABOVE TO SERVE AS DIRECTORS.

  12. Consideration of Director Nominees

    Consideration of Director Nominees The Nominating & Governance Committee will consider properly submitted shareholder nominations for candidates for membership on the Board as well as candidates recommended for consideration by the Nominating & Governance Committee. Any shareholder nominations must comply with the requirements of the By-laws. In addition, shareholder nominations should be submitted within the timeframe as specified under Shareholder Proposals and Director Nominations for the 2026 Annual Meeting above for inclusion in the proxy materials or agenda, as appropriate, and addressed to: Cerence Inc., 25 Mall Road, Suite 416, Burlington, MA 01803, Attention: Corporate Secretary. A shareholder that instead desires to merely recommend a candidate for consideration by the Nominating & Governance Committee shall direct the recommendation in writing to Cerence Inc., 25 Mall Road, Suite 416, Burlington, MA 01803, Attention: Corporate Secretary, and must include the candidate’s name, home and business contact information, detailed biographical data and qualifications, information regarding any relationships between the candidate and the Company within the last three years and evidence of the nominating person’s ownership of Company stock. The Board believes that candidates for director should have certain minimum qualifications, including: (1) the highest personal and professional ethics and integrity; (2) skills that are complementary to those of the existing Board; (3) proven achievement and excellence in the nominee’s field; (4) relevant expertise upon which to be able to offer meaningful advice and guidance to management and make significant contributions to the Company’s success; (5) sufficient time to devote to affairs of the Company and contribute to the Company’s goals; (6) the ability to exercise sound business judgment; (7) the ability to meet other requirements as may be required by applicable rules, such as financial literacy or financial expertise with respect to Audit Committee members; and (8) an understanding of the fiduciary responsibilities that are required of a member of the Board and the commitment of time and energy necessary to diligently carry out those responsibilities.

  13. COMPENSATION OF NON-EMPLOYEE DIRECTORS

    COMPENSATION OF NON-EMPLOYEE DIRECTORS Our Compensation Committee is responsible for evaluating and recommending to the Board for approval our non-employee director compensation program. In carrying out this responsibility, the Compensation Committee periodically reviews and evaluates, in consultation with its independent compensation consultant, recent trends in director compensation, related corporate governance best practices, and comparable market data, including data from the peer group that the Compensation Committee uses for executive compensation purposes. The Board retains the ultimate authority to determine the form and amount of director compensation. Our non-employee director compensation program is intended to (i) ensure that our directors are compensated appropriately for their substantial time commitment and responsibilities given the size and complexity of our operations and the Board’s significant oversight and advisory responsibilities, (ii) enable us to attract and retain highly qualified directors, and (iii) be transparent and foster alignment with our shareholders. The elements of our non-employee director compensation for fiscal year 2024 are as follows:

  14. COMPENSATION OF NON-EMPLOYEE DIRECTORS

    | Fiscal Year 2024 Compensation Structure for Directors | | | Regular Retainers | | | Annual Base Retainer (TOTAL—Cash and Equity) | $235,000 | | Cash | $100,000 | | Stock Award | $135,000 | | Independent Board Chair Retainer | $80,000 | | Committee Chair Retainers | | | Annual Audit Committee Chair Retainer | $15,000 | | Annual Compensation Committee Chair Retainer | $12,500 | | Annual Nominating & Governance Chair Retainer | $10,000 |

  15. COMPENSATION OF NON-EMPLOYEE DIRECTORS

    In connection with ad hoc committees that may be formed from time to time, committee fees, if any, are determined by the Board upon the recommendation of the Compensation Committee with advice from its independent compensation consultant. During fiscal year 2024, the Chair of the Strategic Committee received a retainer of $15,000. The Strategic Committee was subsequently disbanded in fiscal year 2025. Annual equity grants to non-employee directors vest in full on the one-year anniversary of the date of grant subject to continued service through such date. Each newly appointed director (i.e., directors appointed prior to the annual shareholders’ meeting) is entitled to an annual grant upon appointment to the Board, which vests in full at the conclusion of the current annual vesting period. Non-employee directors are subject to stock ownership guidelines that require non-employee directors to hold equity with a value equal to three times the annual cash retainer for service on the Board and retention of 25% of the net shares received as a result of vesting of restricted stock units (“RSUs”) until the ownership guideline is attained.

  16. FISCAL YEAR 2024 DIRECTOR COMPENSATION TABLE

    FISCAL YEAR 2024 DIRECTOR COMPENSATION TABLE The following table sets forth a summary of the compensation earned by, or paid to, our non-employee directors in fiscal year 2024: The compensation for Mr. Beaudoin, who served as our Chief Financial Officer for a portion of fiscal year 2024, for his services as Chief Financial Officer and thereafter as a non-employee member of the Board, is reported in the Fiscal Year 2024 Summary Compensation Table below.

  17. FISCAL YEAR 2024 DIRECTOR COMPENSATION TABLE

    | Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1)(2) | Total ($) | | Arun Sarin | 188,306 | 114,992 | 303,298 | | Marianne Budnik | 101,694 | 114,992 | 216,686 | | Douglas Davis | 100,000 | 114,992 | 214,992 | | Sanjay Jha | 115,000 | 114,992 | 229,992 | | Marcy Klevorn | 100,000 | 114,992 | 214,992 | | Kristi Ann Matus | 115,000 | 114,992 | 229,992 | | Alfred Nietzel | 112,500 | 114,992 | 227,492 |

  18. FISCAL YEAR 2024 DIRECTOR COMPENSATION TABLE

    (1) Amounts reported in the Stock Awards column represent the grant date fair value of annual RSU awards granted to the non-employee members of the Board of Directors during fiscal year 2024, computed in accordance with Financial Accounting Standard Board Accounting Standards Codification Topic 718, Compensation-Stock Compensation (“FASB ASC Topic 718”) based on the closing market price of our Common Stock on the grant date of February 15, 2024 (which was $15.98 per share). The number of RSUs issued was based on the average closing market price of our Common Stock for the 20 days including and preceding the grant date. The use of an average of the closing market price for our Common Stock for purposes of converting these dollar value targets into shares was intended to smooth the impact of short-term stock price volatility, thereby mitigating the risk of a windfall or impairment to the award opportunity. As this average stock price differs from the closing market price on the grant date, the values reflected in this table differ from the target values. As of September 30, 2024, our non-employee directors held the following number of unvested RSUs: Mr. Sarin, 7,196 RSUs; Ms. Budnik, 7,196 RSUs; Mr. Davis, 7,196 RSUs; Mr. Jha, 7,196 RSUs; Ms. Klevorn, 7,196 RSUs; Ms. Matus, 7,196 RSUs; and Mr. Nietzel, 7,196 RSUs. Mr. Beaudoin’s outstanding equity awards as of September 30, 2024 are reported in the Outstanding Equity Awards at Fiscal Year-End table below.

  19. Key Fiscal Year 2024 Compensation Actions

    | Compensation Component | Link to Business and Talent Strategies | Key Fiscal Year 2024 Compensation Actions | | Base Salary | • Competitive base salaries help attract and retain executive talent. | • There was no base salary increase for Dr. Ortmanns or Mr. Beaudoin. • In connection with her promotion to Executive Vice President, Chief Administration Officer and General Counsel, Ms. Salinas was appointed as an executive officer with a base salary of $500,000. • In connection with his promotion to Executive Vice President, Product and Technology, Mr. Schanz was appointed as an executive officer with a base salary of $450,944. | | Short-Term Incentive Plan (“STIP”) | • Focus executives on achieving annual financial and non-financial results that are key indicators of annual financial and operational performance. | • For fiscal year 2024, STIP bonuses were earned at 33.89% of target for each NEO that was eligible to receive a bonus. | | Long-Term Equity Incentive Plan (“LTIP”) Compensation | • Long-term incentive awards (excluding new hire awards) are equity-based and consist of performance-based restricted stock units (“PSUs”) weighted at least 50% and RSUs weighted no more than 50%. • PSUs are earned based on achievement of revenue and Adjusted EBITDA margin (each weighted 50%) goals, which are key top-line and bottom-line performance indicators. • RSUs provide focus on stock price growth and serve our talent retention objectives. | • Dr. Ortmanns, Mr. Beaudoin and Ms. Salinas received Transformation Incentive Awards (“TIA”) in fiscal year 2023; accordingly, no fiscal year 2024 LTIP awards were granted to these executives. • Mr. Tempesta received LTIP awards as part of his new hire offer package; the award was forfeited in full in connection with his termination of employment. • Mr. Schanz and Mr. Arshad each received an annual LTIP award for fiscal year 2024. • The fiscal year 2024 performance tranches for outstanding PSUs were earned as follows: - Fiscal 2022 PSU Award (third tranche) – Below threshold performance resulted in zero payout. - Fiscal 2023 TIA PSU Award / Non-TIA PSU Award (second tranche) – Below threshold performance resulted in zero payout. - Fiscal 2024 PSU Award (first tranche) – Below threshold |

  20. Key Fiscal Year 2024 Compensation Actions

    | Compensation Component | Link to Business and Talent Strategies | Key Fiscal Year 2024 Compensation Actions | | | | performance resulted in zero payout. | | | | • The rigor of the Compensation Committee’s goal setting is evidenced by the fact that all three PSU performance tranches above resulted in zero payouts. |

  21. Our Executive Compensation Philosophy

    | Pay Component | Fixed vs. Variable | Role | Determination Factors | | Base Salary | Fixed Compensation | • Provides fixed portion of annual cash income | • Competitive market levels and executive’s overall experience, tenure, and responsibilities • Annual increases (if any) also consider performance and contribution | | STIP | Variable Compensation | • Provides variable portion of annual income • Focuses executives on annual objectives that support long-term strategy and value creation | • Target opportunities based on competitive market levels and skills and performance of executive • Actual payouts based on performance against pre-established annual corporate goals and individual contribution levels | | Long-Term Equity Incentive Compensation: • PSUs • RSUs | Variable Compensation | • Incentivizes financial performance to drive value creation • Aligns interests of executives with shareholders • Encourages equity ownership • Promotes retention | • Target awards based on competitive market levels and executive’s level of responsibility, criticality of role, retention considerations, individual performance and ability to contribute to the Company’s long-term success • Realized value based on actual performance against pre-established financial goals and stock price performance |

  22. Fiscal Year 2024 Compensation Program Changes

    Fiscal Year 2024 Compensation Program Changes Our compensation programs are intended to focus our leadership team on key areas that drive the business forward and align with the long-term interests of our shareholders. For fiscal year 2024, the Compensation Committee made the following changes to the short-term and long-term incentive programs to continue driving performance and reinforce our strategic objectives. Fiscal Year 2024 STIP Changes The fiscal year 2024 STIP consists of both financial measures and strategic objectives: • Bookings was replaced with Adjusted Free Cash Flow in fiscal year 2024 to focus on cash flow generation, while we continued to utilize revenue and Adjusted EBITDA to maintain focus on top-line and bottom-line performance; collectively the financial measures were weighted 85% (adjusted from 90% in fiscal year 2023); and • We continued to utilize a strategic scorecard to evaluate the achievement of critical strategic objectives, weighted 15% (adjusted from 10% in fiscal year 2023). Fiscal Year 2024 LTIP Changes As Dr. Ortmanns, Mr. Beaudoin and Ms. Salinas received TIA grants in fiscal year 2023 as described in the Company’s proxy statement for its 2024 Annual Meeting of Shareholders, they were ineligible for a fiscal year 2024 annual equity grant. • Mr. Tempesta, Mr. Schanz and Mr. Arshad received an annual equity grant consisting of PSUs (50% weighting) and time-based RSUs (50% weighting).

  23. Fiscal Year 2024 Compensation Snapshot

    | | Fiscal Year 2024 Total Direct Compensation Element | | | | | | | STIP | LTIP | | | | Base Salary | Annual Bonus | Performance- Based Restricted Stock Units | Time-Based Restricted Stock Units | | When Granted | Annually | Annually | Annually But no award in fiscal year 2024 for NEOs who received a fiscal year 2023 TIA | Annually But no award in fiscal year 2024 for NEOs who received a fiscal year 2023 TIA | | Form of Delivery | Cash | Cash | Equity | Equity | | Type of Performance | Short-Term Emphasis (Fixed) | Short-Term Emphasis (Variable) | Long-Term Emphasis (Variable) | Long-Term Emphasis (Variable) | | Performance Period | — | 1 year | Fiscal year 2023 TIA has pre-established 4-year annual goals, measured during each fiscal year Non-TIA has pre-established 3-year annual goals, measured during each fiscal year | — | | Vesting Period | — | 1 year | CEO fiscal year 2023 TIA PSUs – Cliff vesting 50% after year 3 and 50% after year 4 Other NEO fiscal year 2023 TIA PSUs (Mr. Beaudoin and Ms. Salinas) - 50% after year 2, 25% | Fiscal year 2023 TIA RSUs - 4-year ratable vesting Fiscal year 2024 RSUs – 3 year ratable vesting |

  24. Fiscal Year 2024 Compensation Snapshot

    | | Fiscal Year 2024 Total Direct Compensation Element | | | | | | | STIP | LTIP | | | | Base Salary | Annual Bonus | Performance- Based Restricted Stock Units | Time-Based Restricted Stock Units | | | | | after year 3 and 25% after year 4 Fiscal year 2024 PSUs (Mr. Tempesta, Mr. Schanz and Mr. Arshad) – 3 year ratable vesting | | | How Payout Is Determined | Compensation Committee Determination | Pre-Established Formula / Individual Performance Modifier | Pre-Established Formula | Value dependent on stock price at each vesting date | | Performance Measures | — | Revenue (35%), Adjusted Free Cash Flow (15%), Adjusted EBITDA (35%) and Strategic Scorecard (15%) | Revenue (50%) and Adjusted EBITDA margin (50%) | — |

  25. Compensation Governance

    | What We Do | | What We Don’t Do | | ✓ Pay for performance by providing a significant percentage of target annual compensation in the form of variable, at-risk compensation ✓ Pre-established performance goals that are aligned with creation of shareholder value ✓ Market comparison of executive compensation against a relevant peer group of companies ✓ Use of an independent compensation consultant reporting to the Compensation Committee and providing no other services to the Company ✓ Robust stock ownership guidelines ✓ Mitigate undue risk ✓ Compensation Recovery policy ✓ Annual say-on-pay vote | × | We do not allow single-trigger acceleration of equity awards upon a change of control | | | × | We do not have excise tax gross-ups | | | × | We do not allow repricing of underwater stock options | | | × | We do not allow hedging or short sales of our securities | | | × | We do not allow pledging of our securities |

  26. Compensation Peer Group and Market Data

    Compensation Peer Group and Market Data Developing an appropriate compensation peer group for Cerence is challenging because there are few automotive AI companies that are publicly-traded, stand-alone, U.S.-based and size-appropriate. While the Compensation Committee recognized that there is no “perfect peer group” for a company like Cerence, with the assistance of the compensation consultant they endeavored to identify 12 to 24 similarly-sized, high-growth, publicly-traded technology companies that would collectively provide appropriate market reference points for evaluating the competitiveness of our compensation program. We note that the below peer group was initially approved by the Compensation Committee in March 2021 and used for evaluating fiscal year 2022 compensation levels. Each year the Compensation Committee considers whether to invest the time and resources to update the peer group. As discussed in last year’s CD&A, the Compensation Committee decided not to update the peer group in fiscal year 2023 due to the ongoing macro uncertainties impacting the automotive industry and general market volatility; instead, the Compensation Committee concluded that maintaining a stable year-over-year peer group was preferable to making peer group revisions in reaction to uncontrollable macro events with unpredictable time horizons for normalization. With respect to fiscal year 2024, in light of the fact that the Chief Executive Officer and then incumbent senior executives were ineligible for fiscal year 2024 annual equity grants, the Compensation Committee determined that the time and expense of updating the peer group was not worth the limited use it might receive.

  27. Fiscal Year 2022 - 2024 Peer Group

    Fiscal Year 2022 - 2024 Peer Group

  28. Fiscal Year 2022 - 2024 Peer Group

    | 8x8 | Gentex | SPS Commerce | | Altair Engineering | Guidewire | Upland Software | | Aspen Technology | LivePerson | Varonis Systems | | Blackberry | PROS Holdings | Visteon | | Blackline | Rapid 7 | Yext |

  29. Fiscal Year 2022 - 2024 Peer Group

    Note: Everbridge was removed from the peer group following its acquisition by Thoma Bravo on July 2, 2024. For reference, the Company’s positioning as of fiscal year end on key financial metrics relative to the peer group is provided below:

  30. Fiscal Year 2022 - 2024 Peer Group

    | Revenue (trailing four quarters): 17th percentile | Market Cap: 8th percentile | | EBITDA (trailing four quarters): 61st percentile | |

  31. Fiscal Year 2022 - 2024 Peer Group

    Data Source: S&P CapitalIQ. Market capitalization calculated as of September 30, 2024 As an additional reference, our Compensation Committee also uses data from the Radford Global Technology executive compensation survey (the “Radford Survey”) to evaluate the competitive market when formulating its recommendation for, or approving, the total direct compensation packages for our executive officers. The Radford Survey provides compensation market intelligence and is widely used within the technology industry. The Compensation Committee does not review the specific companies included in the Radford Survey and the data presented to the Compensation Committee is general and not specific to any particular subset of companies. Due to the nature of our business, we also compete for executive talent with companies outside our peer group, including public companies that are larger and more established than we are or that possess greater resources than we do, and with smaller private companies that may be able to offer greater compensation potential. In setting compensation, the Compensation Committee considers each executive’s level and job performance, the executive’s duties and responsibilities at the Company compared to the duties and responsibilities of executive officers in similar positions at the peer group companies and in the survey data, and other circumstances unique to the Company, and evaluates whether the compensation elements and levels provided to our executives are generally appropriate relative to their responsibilities at the Company and compensation elements and levels provided to their counterparts in the peer group or within survey data. The Compensation Committee considers both objective and subjective criteria to evaluate Company and individual performance, which allows the Compensation Committee to exercise informed judgment and not rely solely on rigid benchmarks. Accordingly, the Compensation Committee does not formulaically tie compensation decisions to any particular range or percentile level of total compensation paid to executives at the peer group companies or survey data.

  32. Short-Term Incentive Plan

    Short-Term Incentive Plan The Compensation Committee has designed our executive compensation program to provide that a significant level of each executive officer’s compensation opportunity is performance-based. Accordingly, our NEOs are eligible to receive annual performance-based bonuses under our STIP based on the achievement of performance objectives established at the beginning of the fiscal year. The annual performance-based cash incentive that each NEO is eligible to receive is based on the individual’s target bonus, as a percentage of base salary. The Compensation Committee reviews the target annual bonus opportunities each year to ensure they are competitive. The target annual incentive opportunity as a percent of annual base salary for each of our NEOs for fiscal year 2024 was as follows:

  33. Short-Term Incentive Plan

    | | Fiscal Year 2024 Target Annual Cash Incentive as Percent of Base Salary (%) | Fiscal Year 2024 Target Annual Cash Incentive ($) | | Stefan Ortmanns | 100% | 603,246 | | Thomas Beaudoin (1) | 75% | 374,063 | | Daniel Tempesta (2) | 75% | 375,000 | | Nils Schanz (3) | 50% until July 31, 2024 and 75% thereafter | 244,412 | | Jennifer Salinas (4) | 50% until June 6, 2024 and 75% thereafter | 289,500 | | Iqbal Arshad (5) | 75% | 375,000 |

  34. Short-Term Incentive Plan

    (1) Mr. Beaudoin resigned as Executive Vice President, Chief Financial Officer as of March 17, 2024 and was not eligible for any bonus under the STIP for fiscal year 2024. (2) Mr. Tempesta resigned as Executive Vice President, Chief Financial Officer as of May 17, 2024 and was not eligible for any bonus under the STIP for fiscal year 2024. (3) Mr. Schanz’s STIP target as a percent of base salary was 50% until July 31, 2024 and was increased to 75% with his promotion to Executive Vice President, Product and Technology on August 1, 2024. (4) Ms. Salinas’ STIP target as a percent of base salary was 50% until June 6, 2024 and was increased to 75% with her promotion to Executive Vice President, Chief Administrative Officer and General Counsel on June 7, 2024. Mr. Arshad resigned as Executive Vice President, Chief Technology Officer as of July 5, 2024 and was not eligible for any bonus under the STIP for fiscal year 2024. The Compensation Committee undertakes a rigorous review and analysis to establish annual performance goals under the STIP. For fiscal year 2024, the Compensation Committee established the following goals and payout levels under the STIP:

  35. Short-Term Incentive Plan

    | Metric | Weighting | Rationale for Metric | Payout Range | | Revenue | 35% | Top line financial metric and a key metric for our investors | 50% – 200% | | Adjusted EBITDA | 35% | Adjusted EBITDA is reflective of our operating performance and a key metric for our investors | 50% – 200% | | Adjusted Free Cash Flow | 15% | Key business metric that represents the cash available for future investments | 50% – 200% | | Strategic Scorecard | 15% | Additional strategic metrics consisting of: Customer Satisfaction (C-Sat); Employee Satisfaction (E-Sat); Create an LLM architecture and build new technology partnerships | 50% – 200% | | Individual Contribution | — | Individual contribution is not a specifically weighted metric but is included as a component of the STIP in order to enable the Compensation Committee to differentiate actual payouts based on individual performance as reflected in each executive’s demonstrated leadership and decision making, effective communication, promotion of the Company’s strategic initiatives and values, business unit or functional accountabilities and commitment to excellence and work ethic. The Compensation Committee’s evaluation of an executive’s performance relative to these considerations is inherently subjective and is not based on any mathematical calculation or formula; rather, it relies on the collective business experience and judgment of the Compensation Committee to holistically consider the performance of each executive and such executive’s contribution to the overall success of the Company. | 70% – 130% adjustment factor Regardless of the adjustment factor (if any), the overall STIP payout is capped at 200% | | We define Adjusted EBITDA, which is a non-GAAP measure, as consolidated net income (loss), calculated in accordance with GAAP, excluding our stock-based compensation expense, amortization of intangible assets, restructuring and other costs (net), depreciation, total other income (expenses, net), goodwill impairment, and (benefit from) provision for income taxes. In addition, revenue and Adjusted EBITDA are adjusted for any positive or negative foreign exchange impact, to the extent that the actual impact differs from budgeted assumptions. We define Adjusted Free Cash Flow (“Adjusted FCF”), which is a non-GAAP measure, as cash flow from operations, minus capital expenditure, excluding restructuring cash payments, and excluding out of the ordinary course of business cash receipts or payments from litigation or intellectual property monetization events. | | | |

  36. Short-Term Incentive Plan

    The threshold, target and maximum performance and payout opportunities under the fiscal year 2024 STIP (subject to interpolation between points), along with the actual performance achieved and related payout percentage, are set forth below. When establishing the fiscal year 2024 goals the Compensation Committee considered fiscal year 2023 performance adjusted for one-time events that were anticipated to impact financial performance in fiscal year 2024. The goals were consistent with our initial earnings guidance for fiscal year 2024.

  37. Short-Term Incentive Plan

    | | Threshold | Target | Maximum | Actual* | Payout % | | Payout % | 50% | 100% | 200% | | | | Revenue (35%) ($M) | 333.86 | 370.95 | 408.05 | 330.57 | — | | Adjusted EBITDA (35%) ($M) | 94.56 | 105.07 | 115.58 | 79.90 | — | | Adjusted Free Cash Flow (15%) ($M) | 15.00 | 20.02 | 30.00 | 25.2 | 151.9 | | Strategic Scorecard** (15%) | Scorecard metrics were assessed holistically by the Compensation Committee and deemed achieved at 100% | | | | | | Weighted Average Payout: 37.79% Adjusted to 33.89% by Compensation Committee | | | | | |

  38. Short-Term Incentive Plan

    * Note: Actual performance is adjusted to align with the fiscal year 2024 STIP foreign exchange rate. ** Strategic scorecard consisted of the following metrics: Customer Satisfaction (C-Sat); Employee Satisfaction (E-Sat); and Create an LLM architecture and build new technology partnerships. Specific targets are not disclosed because they involve confidential commercial or financial information, the disclosure of which would result in competitive harm. However, the Compensation Committee set such goals at challenging levels that it believed were difficult to achieve and would require substantial and sustained performance in order to be achieved at target levels. The Compensation Committee exercised its discretion and reduced the NEO payout to 33.89% to align with the payout for all other employees. In addition the Compensation Committee considered the individual performance of the NEOs and determined that an individual modifier of 100% (i.e., no further positive or negative adjustment to the adjusted payout of 33.89%) for each NEO was appropriate. The annual STIP bonuses earned by our NEOs for fiscal year 2024 are set forth in the table below. Mr. Rodriquez is not listed because under the terms of the arrangement by which he served as Interim Chief Financial Officer, he was not eligible for STIP.

  39. Short-Term Incentive Plan

    | | Target STIP Opportunity ($) | Financial Metric Weighted Payout (%) | Fiscal Year 2024 Earned STIP ($) | | Stefan Ortmanns (1) | 603,246 | 33.89 | 204,440 | | Thomas Beaudoin (2) | — | — | — | | Daniel Tempesta (3) | — | — | — | | Nils Schanz (4) | 244,412 | 33.89 | 82,831 | | Jennifer Salinas (5) | 289,500 | 33.89 | 98,112 | | Iqbal Arshad (6) | — | — | — |

  40. Short-Term Incentive Plan

    (1) STIP for Dr. Ortmanns was paid in Euros. Dr. Ortmanns’ fiscal year 2024 STIP was €188,598. The listed amount for Dr. Ortmanns was based on an exchange rate of 1 Euro to 1.084 U.S. dollars. (2) Mr. Beaudoin resigned as Executive Vice President, Chief Financial Officer as of March 17, 2024 and was not eligible for any bonus under the STIP for fiscal year 2024. (3) Mr. Tempesta resigned as Executive Vice President, Chief Financial Officer as of May 17, 2024 and was not eligible for any bonus under the STIP for fiscal year 2024. (4) Mr. Schanz’s STIP target as a percent of base salary was 50% until July 31, 2024 and was increased to 75% with his promotion to Executive Vice President, Product and Technology on August 1, 2024. Ms. Salinas’ STIP target as a percent of base salary was 50% until June 6, 2024 and was increased to 75% with her promotion to Executive Vice President, Chief Administrative Officer and General Counsel on June 7, 2024. Mr. Arshad resigned as Executive Vice President, Chief Technology Officer as July 5, 2025 and was not eligible for any bonus under the STIP for fiscal year 2024.

  41. Long-Term Incentive Program

    Long-Term Incentive Program We provide long-term incentive compensation to our executive officers, including the NEOs, under our LTIP in the form of PSUs and RSUs. These awards are designed to align the interests of our executive officers with those of our shareholders, and to improve our long-term profitability and stability through the attraction and retention of superior talent. The Compensation Committee believes the approach of granting a balanced mix of performance-based and time-based equity awards enhances our ability to both drive performance and retain our executive officers by providing equity awards that will be fully earned only if they remain with us for several years. The value of equity awards granted to each NEO is intended to be market competitive and reflective of each executive’s skill set, experience, role, and responsibilities. Each executive officer generally has an annual long-term equity incentive target grant denoted in terms of a dollar value, which is allocated equally between PSUs and RSUs. The dollar value generally is converted into an equivalent number of RSUs and a target number of PSUs based on the average closing price of the Company’s Common Stock during the 20 trading day period preceding the grant date (closing price on grant date included). The use of an average Common Stock closing price for purposes of converting dollar value targets into shares is intended to smooth the impact of short-term stock price volatility, thereby mitigating the risk of a windfall or impairment to the award opportunity. As previously noted, because Dr, Ortmanns, Mr. Beaudoin and Ms. Salinas received TIAs in fiscal year 2023, they were not eligible to receive an annual equity award grant in fiscal year 2024.

  42. Mr. Tempesta’s, Mr. Schanz’s and Mr. Arshad’s Fiscal Year 2024 Awards

    Mr. Tempesta’s, Mr. Schanz’s and Mr. Arshad’s Fiscal Year 2024 Awards Mr. Tempesta’s fiscal year 2024 awards were established in connection with his hiring. As summarized in the table below, Mr. Tempesta’s fiscal year 2024 equity awards consisted of (i) a sign-on RSU award with a grant value of $3,000,000 vesting in equal installments in December 2024, December 2025 and December 2026, and (ii) an annual long-term incentive award with a grant value of $3,000,000, split evenly between PSUs and RSUs. Because Mr. Tempesta resigned before any portion of his equity awards vested, his equity awards were forfeited in their entirety upon his resignation. As Mr. Schanz and Mr. Arshad did not receive a TIA, they received a standard annual LTIP award for fiscal year 2024. Mr. Arshad’s unvested equity awards were forfeited upon his resignation.

  43. Mr. Tempesta’s, Mr. Schanz’s and Mr. Arshad’s Fiscal Year 2024 Awards

    | | PSU | | RSU (inclusive of sign-on award) | | | | Target Value ($) | Target Award (#)(1) | Award Value ($) | Award (#)(1) | | Daniel Tempesta | 1,478,452 | 102,599 | 4,435,355 | 307,797 | | Nils Schanz | 1,035,914 | 57,937 | 1,035,914 | 57,937 | | Iqbal Arshad | 1,553,879 | 86,906 | 1,553,879 | 86,906 |

  44. Mr. Tempesta’s, Mr. Schanz’s and Mr. Arshad’s Fiscal Year 2024 Awards

    As noted above, the target grant value of the PSUs and RSUs were converted into share equivalents based on the average closing market price of our Common Stock for the 20 days including and preceding the grant date (which was $14.62 for Mr. Tempesta and $17.26 for Mr. Schanz and Mr. Arshad). As this average stock price differed from the closing market price on the grant date (which was $14.41 for Mr. Tempesta and $17.88 for Mr. Schanz and Mr. Arshad), the target grant values specified in this table differ from the FASB ASC Topic 718 values that are reported for purposes of the Summary Compensation Table and Grants of Plan Based Awards Table below in accordance with SEC rules.

  45. LTIP Components, Metrics and Weighting

    LTIP Components, Metrics and Weighting Details on the types of equity awards granted in fiscal year 2024 are provided in the table below.

  46. LTIP Components, Metrics and Weighting

    | Equity Award | Rationale and Key Features | | PSUs | • Incentivize NEOs to achieve pre-established annual financial goals over a three-year performance period. • Earned shares range from 0% for below threshold performance to 200% of target for maximum performance. • PSU performance is measured annually and earned PSUs are subject to further vesting. • PSUs vest 33.33% per year, generally subject to continued employment through the date the Company publicly issues its earnings release. | | RSUs | • Align pay and Company performance as reflected in our stock price. • Encourage retention of our executive officers’ services and promote ownership by our executives in Company stock. • RSUs vest in equal annual installments following the grant date over a period of three years, generally subject to continued employment with the Company through the applicable vesting date. |

  47. LTIP Components, Metrics and Weighting

    The performance measures and weightings for the fiscal year 2024 PSU awards are as follows:

  48. LTIP Components, Metrics and Weighting

    | Performance Measures | Weighting | Description | | Revenue Adjusted EBITDA Margin* | 50% 50% | • Annual goals are pre-established at the beginning of the multi-year performance period o Achievement is formulaically measured on an annual basis for each completed fiscal year o When the performance threshold is met, payouts are interpolated on a straight-line basis for performance levels between threshold and target and between target and maximum • In selecting the metrics, the Compensation Committee considered the impact of overlapping metrics between the STIP and LTIP and noted the following: o With respect to the Adjusted EBITDA metric, there is differentiation between the STIP (which measures the metric on an absolute basis) and LTIP (which measures the metric on a profitability ratio basis) o With respect to the revenue metric, the STIP metric is based on a one-year performance period but the LTIP metric is based on pre-established multi-year goals Notwithstanding some overlap, because delivering on these two metrics is foundational to our transformation’s success, the Compensation Committee determined to hold management accountable for performance through both the STIP and LTIP. • While we do not disclose prospective multi-year revenue and Adjusted EBITDA margin goals because they involve confidential commercial or financial information, the disclosure of which would result in competitive harm, we provide complete and transparent disclosure of the goal levels and performance achievement following completion of each applicable performance year. The Compensation Committee set the multi-year revenue and Adjusted EBITDA margin goals at levels that are challenging to achieve and would require substantial and sustained performance in order to be achieved at target levels. | | * We define Adjusted EBITDA margin, which is a non-GAAP financial measure, as the adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) as a percentage of revenue, as reported by the Company in its earnings announcement for the applicable performance period. In addition, revenue and Adjusted EBITDA are adjusted for any positive or negative foreign exchange impact, to the extent actual impact differs from budgeted assumptions. | | |

  49. Outstanding PSU Awards

    Outstanding PSU Awards The following tables show the performance metrics, weighting and performance achievement with respect to the third and final tranche of the fiscal year 2022 PSUs, the second tranche of the fiscal year 2023 PSUs (including the TIA awards) and the first tranche of the fiscal year 2024 PSUs.

  50. Fiscal Year 2022 PSUs: Third Tranche Not Earned During Fiscal Year 2024 Performance Period

    Fiscal Year 2022 PSUs: Third Tranche Not Earned During Fiscal Year 2024 Performance Period

  51. Fiscal Year 2022 PSUs: Third Tranche Not Earned During Fiscal Year 2024 Performance Period

    | | Performance Range | | | Fiscal 2024 | Earned PSUs | Weighted Average Payout | | | Threshold | Target | Maximum | Actual* | (as % of Target) | (as % of Target) | | Revenue Growth (50%) | 8.4% | 20.4% | 32.4% | -44.0% | — | | | Adjusted EBITDA Margin (50%) | 31.5% | 35.0% | 38.5% | 24.2% | — | — |

  52. Fiscal Year 2023 PSUs (including TIA awards): Second Tranche Not Earned During the Fiscal Year 2024 Performance Period

    Fiscal Year 2023 PSUs (including TIA awards): Second Tranche Not Earned During the Fiscal Year 2024 Performance Period

  53. Fiscal Year 2023 PSUs (including TIA awards): Second Tranche Not Earned During the Fiscal Year 2024 Performance Period

    | | Performance Range | | | Fiscal Year 2024 | Earned PSUs | Weighted Average Payout | | | Threshold | Target | Maximum | Actual* | (as % of Target) | (as % of Target) | | Revenue (50%)($ millions) | 347 | 385 | 424 | 330.6 | — | | | Adjusted EBITDA Margin (50%) | 24.3% | 26.9% | 31.3% | 24.2% | — | — |

  54. Fiscal Year 2024 PSUs: First Tranche Not Earned During the Fiscal Year 2024 Performance

    Fiscal Year 2024 PSUs: First Tranche Not Earned During the Fiscal Year 2024 Performance

  55. Fiscal Year 2024 PSUs: First Tranche Not Earned During the Fiscal Year 2024 Performance

    | | Performance Range | | | Fiscal Year 2024 | Earned PSUs | Weighted Average Payout | | | Threshold | Target | Maximum | Actual* | (as % of Target) | (as % of Target) | | Revenue (50%) ($ millions) | 333.86 | 370.95 | 408.05 | 330.6 | — | —% | | Adjusted EBITDA Margin (50%) | 25.2% | 28.0% | 32.2% | 24.2% | — | |

  56. Fiscal Year 2024 PSUs: First Tranche Not Earned During the Fiscal Year 2024 Performance

    * Note that actual performance is adjusted to align with the fiscal year 2024 LTIP foreign exchange rate. The target number of PSUs and aggregate number of earned PSUs for the completed fiscal year 2022-2024 PSU cycle is set forth below. The PSUs granted to Mr. Tempesta and Mr. Arshad were forfeited upon their resignations and are therefore not presented in the tables below.

  57. Fiscal Year 2024 PSUs: First Tranche Not Earned During the Fiscal Year 2024 Performance

    | | Fiscal 2022-2024 Target PSUs (#) | Fiscal 2022-2024 Earned PSUs (#) | Fiscal 2022-2024 Earned PSUs as % of Target | | Stefan Ortmanns | 32,560 | — | — | | Thomas Beaudoin | 40,064 | — | — | | Jennifer Salinas | 8,598 | 1,432 | 16.7% |

  58. Fiscal Year 2024 PSUs: First Tranche Not Earned During the Fiscal Year 2024 Performance

    | | Target | Earned PSUs | | | | | Performance Period | PSUs in Each Tranche | First Tranche | Second Tranche | Third Tranche | Fourth Tranche | | Fiscal 2023—2026 (Fiscal year 2023 TIA PSUs) | | | | | | | Stefan Ortmanns | 86,306 | 124,521 | — | Fiscal Year | Fiscal Year | | Thomas Beaudoin | 35,961 | 51,885 | — | 2025 | 2026 | | Jennifer Salinas | 25,892 | 37,356 | — | Performance | Performance | | | | | | Period in | Period Not | | | | | | Progress | Started |

  59. Fiscal Year 2024 PSUs: First Tranche Not Earned During the Fiscal Year 2024 Performance

    | | Target | Earned PSUs | | | | Performance Period | PSUs in Each Tranche | First Tranche | Second Tranche | Third Tranche | | Fiscal 2023—2025 (Non TIA PSUs) | | | | Fiscal Year | | Nils Schanz | | | | 2025 | | | 12,946 | 18,677 | — | Performance | | | | | | Period in | | | | | | Progress |

  60. Fiscal Year 2024 PSUs: First Tranche Not Earned During the Fiscal Year 2024 Performance

    | | Target | | | | | Performance Period | PSUs in Each Tranche | First Tranche | Second Tranche | Third Tranche | | Fiscal 2024—2026 | | | | | | Nils Schanz | 19,312 | — | Fiscal Year | Fiscal Year | | | | | 2025 | 2026 | | | | | Performance | Performance | | | | | Period in | Period Not | | | | | Progress | Started |

  61. Promotion and Retention Bonuses

    Promotion and Retention Bonuses In conjunction with Ms. Salinas’ promotion to Executive Vice President, Chief Administrative Officer and General Counsel on June 7, 2024, she received a $500,000 cash award to incentivize her to take on additional responsibilities as Executive Vice President, Chief Administrative Officer and General Counsel. In conjunction with Mr. Schanz’s promotion to Executive Vice President, Product and Technology he received a €720,000 cash retention bonus in light of the criticality of the role. Fifty percent of Mr. Schanz's retention bonus was paid on September 27, 2024 and 50% will be paid within 30 days of July 1, 2025 (the "Retention Date") provided that Mr. Schanz remains continuously employed by the Company through the Retention Date. In the event his employment with the Company is terminated before the Retention Date, he will be obligated to repay the first installment within 30 days of his termination date and he will forfeit any right to the second installment. If prior to the Retention Date there is a “change of control” and during the change of control period Mr. Schanz’s employment is terminated by the Company other than for “cause” and for a reason other than due to his death or “disability” or (ii) he resigns for “good reason” (each as defined in his Change in Control Severance Agreement), then, subject to the provisions of his Change of Control and Severance Agreement, he will receive the second installment.

  62. Change of Control and Severance Agreements

    Change of Control and Severance Agreements The Company or one of its subsidiaries entered into a Change of Control and Severance Agreement and a Change of Control Equity Acceleration Agreement with Dr. Ortmanns and the Company entered into a Change of Control Severance Agreement with each of our other NEOs (collectively, the “NEO Severance Agreements”). The Compensation Committee believes that these severance benefits: (1) help secure the continued employment and dedication of our NEOs; (2) are protective of the Company, as severance payments are conditioned on a separation and release agreement in favor of the Company and compliance with confidentiality and restrictive covenant agreements; and (3) are important as a recruitment and retention device, as many of the companies with which we compete for executive talent have similar agreements in place for their senior management. Consistent with market practices, the NEO Severance Agreements do not include change of control-related tax gross-ups. As previously disclosed, each of Mr. Beaudoin, Mr. Tempesta and Mr. Arshad resigned during fiscal year 2024. We did not pay severance to any of these executives in connection with their employment termination. In accordance with the terms of the applicable award agreements, Mr. Beaudoin’s unvested RSUs and PSUs continued to vest after termination due to his continued service on the Board of Directors. Additional information regarding the NEO Severance Agreements, including a quantification of benefits that would have been received by each currently serving NEO, had the executive’s employment terminated on September 30, 2024, is provided under “Fiscal 2024 Potential Payments upon Termination or Change in Control.”

  63. Timing of Grants of Equity Awards

    Timing of Grants of Equity Awards Neither the Board nor the Compensation Committee takes material non-public information into account when determining the timing of equity awards and we do not time the release of material nonpublic information based on equity award grant dates. The Company did not grant awards of stock options, stock appreciation rights or similar option-like instruments during fiscal 2024. Accordingly, we have nothing to report under Item 402(x) of Regulation S-K.

  64. FISCAL YEAR 2024 SUMMARY COMPENSATION TABLE

    | Name and Principal Position | Year | Salary ($) | Bonus ($)(8) | Stock Awards ($)(9) | Non-Equity Incentive Plan Compensation ($)(10) | All Other Compensation ($)(11) | Total ($) | | Dr. Stefan Ortmanns (1) | 2024 | 603,246 | — | — | 204,440 | 54,048 | 861,734 | | Former President and Chief Executive Officer | 2023 | 580,191 | — | 13,256,602 | 573,183 | 28,757 | 14,438,733 | | | 2022 | 524,464 | 216,797 | 4,361,086 | 222,856 | 23,492 | 5,348,695 | | Antonio Rodriquez (2) | | | | | | | | | Interim Chief Financial Officer | 2024 | — | — | — | — | 283,500 | 283,500 | | Thomas Beaudoin (3) | 2024 | 291,577 | — | 1,698,797 | | 52,723 | 2,043,097 | | Former Chief Financial Officer | 2023 | 486,875 | — | 5,523,571 | 360,745 | 20,455 | 6,391,646 | | | 2022 | 195,481 | — | 2,484,209 | 56,412 | 88,105 | 2,824,207 | | Daniel Tempesta (4) | 2024 | 86,538 | — | 5,913,806 | — | 7,058 | 6,007,402 | | Former Chief Financial Officer | | | | | | | | | Nils Schanz (5) | 2024 | 403,642 | 390,240 | 2,071,827 | 82,831 | 15,324 | 2,963,864 | | EVP Product and Technology | | | | | | | | | Jennifer Salinas (6) | 2024 | 446,846 | 500,000 | — | 98,112 | 10,961 | 1,055,919 | | EVP, Chief Administrative Officer and General Counsel | | | | | | | | | Iqbal Arshad (7) | 2024 | 384,615 | — | 3,107,759 | — | 30,969 | 3,523,343 | | Former EVP and Chief Technology Officer | 2023 | 213,462 | — | 4,813,441 | 361,650 | 4,774 | 5,393,327 |

  65. FISCAL YEAR 2024 GRANTS OF PLAN-BASED AWARDS TABLE

    FISCAL YEAR 2024 GRANTS OF PLAN-BASED AWARDS TABLE The following table sets forth grants of plan-based awards to our NEOs during the fiscal year ended September 30, 2024.

  66. FISCAL YEAR 2024 GRANTS OF PLAN-BASED AWARDS TABLE

    | | | Estimated Possible Payouts Under Non-Equity Incentive Plan Awards(1) | | | Estimated Possible Payouts Under Equity Incentive Plan Awards(2) | | | All Other Stock Awards: Number of Shares | Grant Date Fair Value of Stock | | Name | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | of Stock or Units (#) (3) | Awards ($)(4) | | Stefan Ortmanns | | 301,623 | 603,246 | 1,206,492 | — | — | — | — | — | | Antonio Rodriquez | | — | — | — | — | — | — | — | — | | Thomas Beaudoin | | 187,031 | 374,063 | 748,125 | — | — | — | — | — | | | 4/30/2024 | — | — | — | — | — | — | 186,476 | 1,698,797 | | Daniel Tempesta | | 187,500 | 375,000 | 750,000 | — | — | — | — | — | | | 3/18/2024 | — | — | — | — | — | — | 307,797 | 4,435,355 | | | 3/18/2024 | — | — | — | 51,300 | 102,599 | 205,198 | — | 1,478,452 | | Nils Schanz | | 122,206 | 244,412 | 488,824 | — | — | — | — | — | | | 12/4/2023 | — | — | — | — | — | — | 57,937 | 1,035,914 | | | 12/4/2023 | — | — | — | 28,969 | 57,937 | 115,874 | — | 1,035,914 | | Jennifer Salinas | | 144,750 | 289,500 | 579,000 | — | — | — | — | — | | Iqbal Arshad | | 187,500 | 375,000 | 750,000 | — | — | — | — | | | | 12/4/2023 | — | — | — | — | — | — | 86,906 | 1,553,879 | | | 12/4/2023 | — | — | — | 43,453 | 86,906 | 173,813 | — | 1,553,879 |

  67. FISCAL YEAR 2024 GRANTS OF PLAN-BASED AWARDS TABLE

    (1) The amounts reported represent the threshold, target and maximum performance-based incentive payments the NEOs could earn pursuant to the STIP for fiscal year 2024, as described in “Compensation Discussion and Analysis– Fiscal Year Named Executive Officer Compensation – Short Term Incentive Plan” above. The actual amounts earned pursuant to the STIP for fiscal year 2024 are set forth in the “Non-Equity Incentive Plan Compensation” column in the Fiscal Year 2024 Summary Compensation Table above. Mr. Beaudoin, Mr. Tempesta and Mr. Arshad did not receive payment under the STIP for fiscal year 2024 due to their resignation from employment. During fiscal year 2024, Mr. Rodriquez was paid by a third party and was not eligible for a bonus under the STIP. (2) The amounts reported represent the threshold, target and maximum number of PSUs granted to NEOs in fiscal year 2024. These awards will vest and be earned only if certain performance goals are achieved as described in “Compensation Discussion and Analysis – Fiscal Year Named Executive Officer Compensation – Long Term Incentive Program” above. The values reported for the PSUs awarded in fiscal year 2024 represent the grant date fair values of such awards assuming the probable outcome of the performance conditions. The value of such awards assuming the maximum achievement of the applicable performance conditions is reported in footnote 9 to the Fiscal Year 2024 Summary Compensation Table above. (3) For Mr. Tempesta, the amount reported includes a new hire award with a grant date fair value of $2,956,903. Mr. Tempesta’s awards were forfeited in their entirety upon his termination of employment. In accordance with FASB ASC Topic 718, without taking into account forfeitures of equity awards, as required by the SEC rules, for Mr. Beaudoin, the amounts reported include the fair value as of the technical modification date of RSUs and PSUs that remained eligible for continued vesting based on his service as a member of the Board of Directors.

  68. OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

    OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END The following table sets forth all outstanding equity awards held by our NEOs as of September 30, 2024. The equity awards were all in the form of RSUs and PSUs. For purposes of valuing the outstanding awards, the amounts below are based on a per-share price of $3.15 for the Cerence Common Stock, the closing market price as reported on Nasdaq on September 30, 2024, the last business day of the fiscal year.

  69. OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

    | Name | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(1) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | | Stefan Ortmanns | 97,159 | 306,051(2) | — | — | | | 86,306 | 271,864(3) | — | — | | | 86,306 | 271,864(4) | — | — | | | 124,521 | 392,241(5) | 86,308 | 271,870(6) | | | — | — | 258,920 | 815,598(7) | | Antonio Rodriquez | — | — | — | — | | Thomas Beaudoin | 35,961 | 113,277(2) | — | — | | | 13,354 | 42,065(8) | — | — | | | 35,961 | 113,277(3) | — | — | | | 35,960 | 113,274(4) | — | — | | | 51,885 | 163,438(9) | — | — | | | — | — | 71,920 | 226,548(10) | | | — | — | 71,920 | 226,548(11) | | Daniel Tempesta | — | — | — | — | | Nils Schanz | 32,259 | 101,616(2) | — | — | | | 32,257 | 101,610(3) | — | — | | | 19,312 | 60,833(4) | — | — | | | — | — | 64,514 | 203,219(12) | | | — | — | 38,626 | 121,672(13) | | Jennifer Salinas | 20,127 | 63,400(2) | — | — | | | 17,261 | 54,372(3) | — | — | | | 17,261 | 54,372(4) | — | — | | | 37,356 | 117,671(9) | 51,784 | 163,120(10) | | | — | — | 51,782 | 163,113(11) | | Iqbal Arshad | — | — | — | — |

  70. OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

    (1) Based upon achievement of maximum performance for fiscal years 2025 and 2026 because fiscal year 2023 performance was above target (2) Represents RSUs vested on October 1, 2024. For Dr. Ortmanns, this amount includes 10,853 RSUs granted in fiscal year 2022 and 86,306 RSUs granted in fiscal year 2023. For Mr. Beaudoin this represents one fourth of the RSU award granted in fiscal year 2023, for Ms. Salinas this represents one third of the new hire award granted April 4, 2022 plus one fourth of the RSU award granted in fiscal year 2023, and for Mr. Schanz this represents one third of the annual RSU awards granted in fiscal years 2023 and 2024. (3) Represents RSUs scheduled to vest October 1, 2025 subject to continued service through the vesting date. For Dr. Ortmanns, Mr. Beaudoin, and Ms. Salinas this represents one fourth of the RSU award granted in fiscal year 2023 and, for Mr. Schanz, this represents one third of the annual RSU awards granted in fiscal years 2023 and 2024. (4) Represents RSUs scheduled to vest October 1, 2026 subject to continued service through the vesting date. For Dr. Ortmanns, Mr. Beaudoin, and Ms. Salinas this represents one fourth of the RSU award granted in fiscal year 2023 and for Mr. Schanz represents one third of the annual RSU awards granted in fiscal year 2024. (5) Represents PSUs granted in fiscal year 2023 and earned based upon fiscal year 2023 performance (revenue and Adjusted EBITDA margin) scheduled to vest upon the release of earnings for fiscal year 2025 subject to continued service through the vesting date. Represents PSUs granted in fiscal year 2023 that vest upon the release of earnings for fiscal year 2025 subject to the achievement of financial measures (revenue and Adjusted EBITDA margin) in fiscal year 2024 and fiscal year 2025 and continued service through the vesting date. The PSUs eligible for vesting based on fiscal year 2024 performance were forfeited because the threshold performance metrics were not achieved. Represents PSUs granted in fiscal year 2023 that vest upon the release of earnings for fiscal year 2026 subject to the achievement of financial measures (revenue and Adjusted EBITDA margin) in fiscal years 2024, 2025 and 2026 and continued service through the vesting date. The PSUs eligible for vesting based on fiscal year 2024 performance were forfeited because the threshold performance metrics were not achieved. (8) Represents RSUs granted to Mr. Beaudoin as a new hire award that vest May 5, 2025 subject to continued service through the vesting date. (9) Represents PSUs granted in fiscal year 2023 and earned based upon fiscal year 2023 performance (revenue and Adjusted EBITDA margin) scheduled to vest upon the release of earnings for fiscal year 2024 subject to continued service through the vesting date. (10) Represents PSUs granted in fiscal year 2023 that vest upon the release of earnings for fiscal year 2025 subject to the achievement of financial measures (revenue and Adjusted EBITDA margin) in fiscal year 2025 and continued service through the vesting date. (11) Represents PSUs granted in fiscal year 2023 that vest upon the release of earnings for fiscal year 2026 subject to the achievement of financial measures (revenue and Adjusted EBITDA margin) in fiscal year 2026 and continued service through the vesting date. (12) Represents PSUs granted in fiscal years 2023 and 2024 that vest upon the release of earnings for fiscal year 2025 subject to the achievement of financial measures (revenue and Adjusted EBITDA margin) in fiscal year 2025 and continued service through the vesting date. Represents PSUs granted in fiscal year 2024 that vests upon the release of earnings for fiscal year 2026 subject to the achievement of financial measures (revenue and Adjusted EBITDA margin) in fiscal year 2026 and continued service through the vesting date.

  71. FISCAL YEAR 2024 OPTION EXERCISES AND STOCK VESTED TABLE

    FISCAL YEAR 2024 OPTION EXERCISES AND STOCK VESTED TABLE The following table sets forth the stock awards that vested, and the value realized upon vesting, by the NEOs during fiscal year 2024. No options were outstanding or vested during fiscal year 2024.

  72. FISCAL YEAR 2024 OPTION EXERCISES AND STOCK VESTED TABLE

    | | Stock Awards | | | Name | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(1) | | Stefan Ortmanns | 125,443 | 2,522,771 | | Antonio Rodriquez | — | — | | Thomas Beaudoin | 65,046 | 1,168,365 | | Daniel Tempesta | — | — | | Nils Schanz | 40,639 | 767,155 | | Jennifer Salinas | 28,957 | 578,552 | | Iqbal Arshad | 72,288 | 1,375,834 |

  73. FISCAL YEAR 2024 OPTION EXERCISES AND STOCK VESTED TABLE

    (1) Value calculated by multiplying the number of shares vesting by the closing price of a share of Cerence Common Stock on the vesting date. The value reported includes the vesting of RSUs granted pursuant to the fiscal year 2023 STIP. For fiscal year 2023, the annual STIP bonuses were paid 75% in the form of RSUs and 25% in the form of cash.

  74. Pension or Non-Qualified Deferred Compensation Plans

    Pension or Non-Qualified Deferred Compensation Plans There were no pension or non-qualified deferred compensation plans in place for any NEOs in fiscal year 2024.

  75. POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL

    POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL

  76. Estimated Payment and Benefits Upon Termination or Change of Control

    Estimated Payment and Benefits Upon Termination or Change of Control The amount of compensation and benefits payable to each of our NEOs serving as of September 30, 2024, in various termination and change of control situations has been estimated in the tables below. The value of the equity vesting acceleration was calculated for each of the tables below based on the assumption that the change of control and the NEO’s employment termination occurred on September 30, 2024. The per share closing price of the Common Stock on Nasdaq as of September 30, 2024, the last trading day of fiscal year 2024, was $3.15, which was used as the value of a share of the Common Stock for the calculations below. The value of RSU vesting acceleration was calculated by multiplying the number of RSUs subject to vesting acceleration as of September 30, 2024, by the per share closing price of Common Stock as of September 30, 2024. Mr. Beaudoin, Mr. Tempesta, and Mr. Arshad did not receive any payments or benefits upon their termination of employment.

  77. Stefan Ortmanns

    | Executive Benefits and Payment upon Termination | Termination by Company Without Cause Not in Connection with a Change of Control ($) | Termination by Company without Cause or Resignation for Good Reason within 12 Months Following a Change of Control ($) | Termination Due to Death or Disability ($) | | Compensation: | | | | | Cash Severance | 2,412,984(1) | 3,016,230(2) | — | | Health Care Continuation | — | — | — | | Acceleration of Equity Awards | 970,155(3) | 1,785,753(4) | 1,242,020(5) | | Total | 3,383,139 | 4,801,983 | 1,242,020 |

  78. Nils Schanz

    | Executive Benefits and Payment upon Termination | Termination by Company Without Cause Not in Connection with a Change of Control ($) | Termination by Company without Cause or Resignation for Good Reason within 12 Months Following a Change of Control ($) | Termination Due to Death or Disability ($) | | Compensation: | | | | | Cash Severance | 1,128,462(1) | 1,913,278(2) | — | | Health Care Continuation | — | — | — | | Acceleration of Equity Awards | 101,616(3) | 426,504(4) | 264,058(5) | | Total | 1,230,078 | 2,339,782 | 264,058 |

  79. Jennifer Salinas

    | Executive Benefits and Payment upon Termination | Termination by Company Without Cause Not in Connection with a Change of Control ($) | Termination by Company without Cause or Resignation for Good Reason within 12 Months Following a Change of Control ($) | Termination Due to Death or Disability ($) | | Compensation: | | | | | Cash Severance | 1,250,000(1) | 1,687,500(2) | — | | Health Care Continuation | 29,691(3) | 44,537(4) | — | | Acceleration of Equity Awards | 181,071(5) | 452,932(6) | 289,815(7) | | Total | 1,460,762 | 2,184,969 | 289,815(8) |

  80. PAY VERSUS PERFORMANCE DISCLOSURE

    PAY VERSUS PERFORMANCE DISCLOSURE Pursuant to Section 953(a) of the Dodd-Frank Act and Item 402(v) of SEC Regulation S-K, we are providing the following information about the relationship between executive “compensation actually paid” (“CAP”) to the Company’s principal executive officer (“PEO”) and the Company’s non-PEO named executive officers (the “Non-PEO NEOs”) and certain aspects of the financial performance of the Company. The Compensation Committee does not utilize CAP as a basis for making compensation decisions. For further information concerning our compensation philosophy and how we align executive compensation with our performance, please see the Compensation Discussion and Analysis section of this Proxy Statement.

  81. Pay Versus Performance Table

    Pay Versus Performance Table

  82. Pay Versus Performance Table

    | | | | | | | | Value of Initial Fixed $100 Investment Based on:(4) | | | | | Fiscal Year(1) | Summary Compensation Table Total for Dr. Ortmanns PEO(2) | Summary Compensation Table Total for Mr. Dhawan PEO(2) | Compensation Actually Paid to Dr. Ortmanns PEO(3) | Compensation Actually Paid to Mr. Dhawan PEO(3) | Average Summary Compensation Table Total for Non-PEO NEOs(2) | Average Compensation Actually Paid to Non-PEO NEOs(3) | Cerence Total Shareholder Return | Peer Group Total Shareholder Return(5) | Net Income ($mil.)(6) | Revenue(7) ($mil.) | | 2024 | $861,734 | — | $(10,879,482) | — | $2,646,188 | $(1,457,744) | $6 | $136 | $(588) | $331 | | 2023 | $14,438,733 | — | $15,972,323 | — | $6,752,845 | $4,286,095 | $42 | $107 | $(56) | $291 | | 2022 | $5,348,695 | $9,512,933 | $(4,314,610) | $(17,453,566) | $2,775,483 | $(1,854,165) | $32 | $90 | $(311) | $341 | | 2021 | — | $7,465,574 | — | $41,323,599 | $1,803,823 | $10,285,852 | $197 | $144 | $46 | $385 |

  83. Pay Versus Performance Table

    (1) Dr. Ortmanns succeeded Sanjay Dhawan as PEO in fiscal year 2022 (on December 15, 2021). Mr. Dhawan served as the PEO for the entirety of fiscal year 2021. Our Non-PEO NEOs for the applicable fiscal years were as follows: • Fiscal year 2024: Antonio Rodriquez, Thomas Beaudoin, Daniel Tempesta, Nils Schanz, Jennifer Salinas, and Iqbal Arshad • Fiscal year 2023: Thomas Beaudoin, Prateek Kathpal, and Iqbal Arshad • Fiscal year 2022: Thomas Beaudoin, Mark Gallenberger, Marc Montagner, Prateek Kathpal, and Christophe Couvreur • Fiscal year 2021: Mark Gallenberger, Stefan Ortmanns, and Leanne Fitzgerald (2) Amounts reported in these columns represent (i) the total compensation reported in the Summary Compensation Table (“SCT”) for the applicable fiscal year in the case of our PEOs, Dr. Ortmanns and Mr. Dhawan, and (ii) the average of the total compensation reported in the SCT for the applicable fiscal year for our Non-PEO NEOs. Amounts reported in these columns represent (i) CAP for the applicable fiscal year in the case of our PEOs, Dr. Ortmanns and Mr. Dhawan and (ii) the average CAP for the applicable fiscal year for our Non-PEO NEOs; adjustments were made to the amounts reported in the SCT for the applicable fiscal year. A reconciliation of the adjustments made to the SCT amounts to calculate CAP for our PEOs, Dr. Ortmanns and Mr. Dhawan, and for the average of the Non-PEO NEOs in accordance with the requirements of Item 402(v) of Regulation S-K is set forth in the following table:

  84. Pay Versus Performance Table

    | | Fiscal Year 2024 | | Fiscal Year 2023 | | Fiscal Year 2022 | | | Fiscal Year 2021 | | | | Dr. Ortmanns PEO | Average Non-PEO NEOs | Dr. Ortmanns PEO | Average Non-PEO NEOs | Dr. Ortmanns PEO | Mr. Dhawan PEO | Average Non-PEO NEOs | Mr. Dhawan PEO | Average Non-PEO NEOs | | Summary Compensation Table Total | $861,734 | $2,646,188 | $14,438,733 | $6,752,845 | $5,348,695 | $9,512,933 | $2,775,483 | $7,465,574 | $1,803,823 | | Minus Change in Pension Value Reported in SCT for the Fiscal Year | $— | $— | $— | $— | $— | $— | $— | $— | $— | | Plus Pension Value Service Cost for the Fiscal Year | $— | $— | $— | $— | $— | $— | $— | $— | $— | | Minus Equity Award Value Reported in SCT for the Fiscal Year | $— | $2,132,030 | $13,256,602 | $6,059,259 | $4,361,086 | $9,329,311 | $2,450,148 | $5,806,759 | $955,131 | | Plus Year End Fair Value of Equity Awards Granted During the Covered Year that Remain Outstanding and Unvested as of Last Day of the Fiscal Year | $— | $50,695 | $14,842,886 | $3,379,689 | $854,690 | $1,881,873 | $536,461 | $10,606,123 | $1,684,584 | | Plus Year over Year Change in Fair Value as of the Last Day of the Fiscal Year of Outstanding and Unvested Equity Awards Granted in Prior Fiscal Years | $(11,741,216) | $(1,536,417) | $(52,694) | $(8,411) | $(6,984,598) | $— | $(1,346,670) | $21,363,485 | $6,688,566 | | Plus Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Fiscal Year | $— | $28,686 | $— | $318,036 | $— | $— | $— | $— | $— | | Plus Year over Year Change in Fair Value as of the Vesting Date of Equity Awards Granted in Prior Fiscal Years that Vested During the Fiscal Year | $— | $(43,243) | $— | $53,567 | $827,689 | $348,221 | $2,084 | $7,695,176 | $1,064,011 | | Minus Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Fiscal Year | $— | $471,620 | $— | $150,371 | $— | $19,867,283 | $1,371,374 | $— | $— | | Plus Value of Dividends or other Earnings Paid on Equity Awards Not Otherwise Reflected in Fair Value or Total Compensation for the Fiscal Year | $— | $— | $— | $— | $— | $— | $— | $— | $— | | Compensation Actually Paid | $(10,879,482) | $(1,457,744) | $15,972,323 | $4,286,095 | $(4,314,610) | $(17,453,566) | $(1,854,165) | $41,323,599 | $10,285,852 |

  85. Pay Versus Performance Table

    In the table above, the unvested equity fair values were calculated on each of the required measurement dates using assumptions based on criteria consistent with those used for grant date fair value calculations and in accordance with the methodology used for financial reporting purposes. For unvested awards subject to performance-based vesting conditions, the fair values were based on the probable outcome of such performance-based vesting conditions as of the last day of the fiscal year. (4) Total Shareholder Return (“TSR”) is cumulative for the measurement periods beginning on September 30, 2020 and ending on September 30 of each of 2024, 2023, 2022 and 2021, respectively. TSR is calculated by dividing the difference between the price of the Company’s common stock at the end and the beginning of the measurement period by the price of the Company’s common stock at the beginning of the measurement period. No dividends were paid by the Company during fiscal years 2021, 2022, 2023, or 2024. (5) Represents the weighted peer group TSR, weighted according to the respective companies’ stock market capitalization at the beginning of each period for which a return is indicated. Our peer group for these purposes is the S&P Software & Services Select Industry Index, which is the industry index used by the Company for purposes of compliance with Item 201(e) of Regulation S-K for all four fiscal years. (6) Reflects the Company’s net income (loss) reflected in the audited financial statements published in our Annual Report on Form 10-K for the applicable fiscal year. (7) Revenue is the company-selected measure. Values shown reflect revenue as calculated for purposes of our executive compensation program for the applicable reporting fiscal year based on the reporting fiscal year’s STIP foreign exchange rate. Performance Measures Used to Link Company Performance and CAP. The following is a list of performance measures, which in our assessment represent the most important performance measures used by the Company to link CAP to the NEOs for fiscal year 2024. Each metric below is used for purposes of determining payouts under either our annual incentive program or vesting of our PSUs. Please see the “Compensation Discussion and Analysis” section of this Proxy Statement for a further description of these metrics and how they are used in the Company’s executive compensation program. Revenue Adjusted EBITDA Adjusted EBITDA Margin Adjusted Free Cash Flow Relationship between CAP and TSR. The graph below illustrates the relationship between our TSR and the Peer Group TSR, as well as the relationship between our TSR and CAP for the PEO and average CAP for the Non-PEO NEOs. As shown in the graph below, CAP to our PEO and the average CAP for the Non-PEO NEOs is generally aligned with the Company’s TSR over the four-year period from October 1, 2020 to September 30, 2024, in large part because a significant portion of the compensation awarded to the Company’s NEOs is in the form of equity awards, the value of which is impacted by stock price changes. Relationship between CAP and GAAP Net Income. The graph below reflects the relationship between the PEO and average Non-PEO NEOs CAP and our GAAP Net Income. The Company does not use net income as a performance measure in its executive compensation program. Relationship between CAP and Revenue (our Company-Selected Measure). The graph below reflects the relationship between the PEO and average Non-PEO NEOs CAP and our revenue.

  86. CEO PAY RATIO

    CEO PAY RATIO Our compensation and benefits philosophy and the overall structure of our compensation and benefit programs are broadly similar across the organization to encourage and reward all employees who contribute to our success. We strive to ensure the pay of each of our employees reflects the level of their job impact and responsibilities and is competitive within our peer group. Compensation rates are benchmarked and are generally set to be market-competitive in the country in which the jobs are performed. Our ongoing commitment to pay equity is critical to our success in supporting a diverse workforce with opportunities for all employees to grow, develop and contribute. Under rules adopted pursuant to the Dodd-Frank Act, we are required to calculate and disclose the total compensation paid to our median paid employee, as well as the ratio of the total compensation paid to the median employee as compared to the total compensation paid to our Chief Executive Officer (the “CEO Pay Ratio”). The paragraphs that follow describe our methodology and the resulting CEO Pay Ratio. We identified the median employee by looking at base salary plus target bonus as of September 30, 2024 for all active employees as of that date. We did not perform adjustments to the compensation paid to part-time employees to calculate what they would have been paid on a full-time basis. In identifying the median employee, we did not exclude workers in non-U.S. countries and did not make any cost-of-living adjustments. Once the median employee was identified, we calculated the median employee’s annual total compensation in accordance with the requirements of the Summary Compensation Table. For fiscal year 2024: • the annual total compensation of the employee identified as our median employee (other than our CEO) was $71,971; and • Dr. Ortmanns’ annual total compensation as reported in the Fiscal Year 2024 Summary Compensation Table was $861,734. Therefore, our CEO Pay Ratio is approximately 12:1. This information is being provided for compliance purposes and is a reasonable estimate calculated in a manner consistent with SEC rules, based on our internal records and the methodology described above. The SEC rules for identifying the median compensated employee allow companies to adopt a variety of methodologies, to apply certain exclusions and to make reasonable estimates and assumptions that reflect their employee populations and compensation practices. Accordingly, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies have different employee populations and compensation practices and may use different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios. Neither the Compensation Committee nor management of the Company used the CEO Pay Ratio measure in making compensation decisions.