DEF 14A of Pegasystems Inc, Apr 24, 2026

DEF 14A of Pegasystems Inc

Filed Apr 24, 2026 · FY20250001013857-26-000031

Open on EDGAR

  1. PROPOSAL 1 – ELECTION OF DIRECTORS

    PROPOSAL 1 – ELECTION OF DIRECTORS Our Board of Directors has nominated Rohit Ghai, Peter Gyenes, Richard Jones, Christopher Lafond, Dianne Ledingham, Sharon Rowlands, Alan Trefler, and Larry Weber for election to the Board of Directors. The persons named in the proxy card as proxies will vote to elect each of the nominees, unless you vote against the election of one or more nominees or abstain from voting on the election of one or more nominees, in each case, by affirmatively marking the proxy card to that effect (or through Internet or telephonic voting). Each of our nominees has indicated their willingness to serve, if elected. However, if any of the nominees shall become unable or unwilling to serve, the proxies, unless authority has been withheld as to such nominee, may be voted for the election of a substitute nominee designated by our Board of Directors, or the Board of Directors may reduce the number of directors. Proxies may not be voted for more than eight persons. There are no family relationships among any of our executive officers or directors, with the exception of Alan Trefler, our Chairman and Chief Executive Officer, whose brother, Leon Trefler, is our Chief of Clients and Markets. Unless otherwise noted, we refer to Alan Trefler as Mr. Trefler and Leon Trefler as Leon Trefler in this proxy statement. The Board of Directors recommends that you vote FOR the election of the nominees as directors.

  2. DIRECTOR QUALIFICATIONS

    DIRECTOR QUALIFICATIONS

  3. Board Qualifications and Experience

    Board Qualifications and Experience We aim to create and maintain a Board with a breadth of skills and attributes that is aligned with our current and anticipated strategic needs. Our candidates, as more fully described below, have experience in, among other areas: leadership, technology, international operations and growth, and sales and marketing.

  4. NOMINEES FOR ELECTION FOR A TERM OF ONE YEAR EXPIRING IN 2027

    NOMINEES FOR ELECTION FOR A TERM OF ONE YEAR EXPIRING IN 2027 Rohit Ghai, age 56 •Director since January 2025 •Qualifications and Relevant Experience: ◦More than two decades of leadership experience in the enterprise software industry, delivering profitable growth for large global organizations, including publicly traded companies in highly regulated markets ◦Expertise in operational and digital transformation, including SaaS, mergers and acquisitions, and go-to-market optimization ◦Combines deep cybersecurity expertise with executive-level leadership in AI-driven enterprise transformation •Career Highlights: ◦Chief Executive Officer and member of the Board of Directors of Barracuda Networks, Inc., a leading cybersecurity company providing protection against complex threats for businesses of all sizes (September 2025 – present) ◦Chief Executive Officer and member of the Board of RSA, a leading global cybersecurity company in enterprise identity security solutions (December 2016 – September 2025) ◦Previously held product development and leadership roles at Dell/EMC, and was general manager and vice president of engineering for the storage & availability management group at Symantec •Other Board Experience: ◦D-Wave Quantum Inc., a publicly traded quantum computing company (October 2024 – present) ◦MHC Automation, an AP automation and customer communications management company (January 2021 – present) ◦Everbridge, Inc., a formerly publicly traded company that focuses on critical event management and organizational resilience (January 2023 - July 2024) •Education: ◦Master’s degree in computer science from the University of South Carolina ◦Bachelor’s degree in computer science from the Indian Institute of Technology (ITT) Peter Gyenes, age 80 •Director since March 2009 •Qualifications and Relevant Experience: ◦Four decades of leadership experience in global technical, sales, marketing, and general management positions within the software and computer systems industries ◦Proven ability to bridge strategy with operational excellence ◦Experience with mergers and acquisitions ◦An active investor and board member focusing on technology market opportunities •Career Highlights: ◦Chairman and Chief Executive Officer of Ascential Software, as well as of its predecessor companies VMark Software, Ardent Software and Informix, and led its growth into the data integration market leader, from 1996 until it was acquired by IBM in 2005 ◦Previous experience as President and Chief Executive Officer of Racal InterLan, Inc. and executive positions at Data General Corporation, Encore Computer Corporation, and Prime Computer, Inc. ◦Trustee Emeritus of the Massachusetts Technology Leadership Council ◦Syncro, a leader in the managed service provider industry (Chairman from January 2025 – present) ◦RealPage, Inc., a formerly publicly traded leading global provider of software and data analytics to the real estate industry (January 2010 - April 2021) ◦Sophos plc, a global security software company (Chairman May 2006 - March 2020) ◦Information Builders, Inc., a leader in business intelligence, analytics, and data management solutions (November 2017 - December 2020) •Education and Awards: ◦B.A. in mathematics and M.B.A. from Columbia University ◦Awarded the 2005 New England Region Ernst & Young Entrepreneur of the Year award in Software Richard Jones, age 74 •Director since November 2000, Vice Chairman from September 2002 – July 2007 •Qualifications and Relevant Experience: ◦Two decades of executive management ◦Financial expertise and business acumen ◦Experience as Pegasystems’ President and Chief Operating Officer •Career Highlights: ◦Joined Pegasystems in October 1999, serving as President and Chief Operating Officer until September 2002, part-time employee from July 2002 – July 2007 ◦Previous experience in the financial services industry including Chief Asset Management Executive and member of the Operating Committee at Barnett Banks, Inc., Chief Executive Officer of Fleet Investment Services, Executive Vice President of Fidelity Investments, and principal with the consulting firm of Booz, Allen & Hamilton •Other Board Experience: ◦Resonantia, Inc. (September 2022 – present) ◦KaliVir Immunotherapeutics, Inc. (formerly Western Oncolytics Ltd.), a private company developing novel therapies for cancer (July 2014 – present) ◦Chairman of Jones Boys Ventures, a retailer (June 1995 – present) •Education: ◦Undergraduate degree from Duke University, with majors in both economics and management science ◦M.B.A. from the Wharton School of the University of Pennsylvania Christopher Lafond, age 60 •Director since April 2019 •Qualifications and Relevant Experience: ◦More than two decades of executive leadership experience working with large, publicly traded, multinational companies, developing and executing long range corporate initiatives while ensuring focus on the business models and strategic objectives that maximize value creation ◦Extensive leadership experience and financial expertise ◦Cybersecurity experience centered on executive oversight of secure content collaboration, data protection, and enterprise risk governance ◦Executive leadership in deploying AI-enabled software •Career Highlights: ◦Chief Executive Officer and member of the board of Insurity, Inc., a property and casualty insurance technology and services provider (August 2019 - January 2025), and Chief Financial Officer (November 2017 – August 2019) ◦Member of the Small Business Advisory Committee of the Financial Accounting Standards Board (FASB) (March 2019 – December 2023) ◦Previous experience as executive vice president and chief financial officer of Intralinks, a global leader in secure content collaboration software-as-a-service (SaaS) solutions, and different leadership positions at Gartner, Inc. •Other Board Experience: ◦Sunstar Insurance Group, a financial holding company that seeks to acquire majority equity ownership positions in independent insurance agencies (July 2025 – present) ◦SHARE Cancer Support, a national, peer-led 501(c)(3) nonprofit organization focusing on support and education with respect to breast and gynecologic cancer (April 2025 – present) ◦B.A. in Economics from the University of Connecticut ◦M.B.A. from the Columbia University Graduate School of Business Dianne Ledingham, age 63 •Director since September 2016 ◦One of Bain & Company’s most prominent leaders in commercial and sales excellence with experience across a range of industries and particular depth in technology and software ◦Founding global leader for Sales and Channel Effectiveness within Bain’s Customer Strategy and Marketing practice, leading that group for eight years •Career Highlights: ◦35-plus years at Bain & Company, Inc., currently as an Advisory Partner in Bain & Company’s Boston office and a leader in Bain’s Customer Strategy & Marketing practice and the firm’s Telecom, Media and Technology practice ◦Previously served on each of Bain’s governance committees including serving on Bain’s Board of Directors, Bain’s Global Compensation and Promotion Committee (including as elected Chair), and Bain’s Global Nominating Committee (including as elected Chair) ◦Harvard Business Fellow at the Harvard Business School (July 2024 – present) •Other Board Experience: ◦Edgio, Inc., a formerly publicly traded company (September 2022 – present) ◦City Year Boston, a 501(c)(3) nonprofit organization focusing on improved outcomes for students in under-resourced schools and the cultivation of the next generation of leaders (2009 – present) ◦Ventures for Hope, an umbrella organization that helps resource nonprofits creating job opportunities in economically disadvantaged communities (2014 – present) •Education: ◦Undergraduate degree in electrical engineering with honors from Brown University ◦M.B.A. with distinction from Harvard Business School

  5. NOMINEES FOR ELECTION FOR A TERM OF ONE YEAR EXPIRING IN 2027

    Sharon Rowlands, age 67 •Director since April 2016 •Qualifications and Relevant Experience: ◦More than 20 years' experience leading complex, multi-billion-dollar business services and software companies serving small- and medium-sized companies, financial markets, and enterprise customers ◦Executive and board-level expertise in cybersecurity ◦Focus on AI strategy and oversight •Career Highlights: ◦Chief Executive Officer (January 2019 – present) and President (2019 – 2021) of Newfold Digital, Inc. (formerly Web.com), a leading web and commerce technology company ◦President of USA Today Network Marketing Solutions at Gannett Co. (2017 – 2019) ◦Prior Chief Executive Officer positions include ReachLocal, Penton Media, Altegrity, and Thomson Financial •Other Board Experience: ◦Constant Contact, a digital email and marketing platform (February 2021 – present) ◦Sonihull, a company that provides ultrasonic anti-fouling solutions (as an advisor on the board March 2020 – 2024) ◦Everbridge, Inc., a formerly publicly traded company that focuses on critical event management and organizational resilience (January 2019 – July 2024) ◦The Glimpse Group, Inc., a publicly traded diversified Immersive Technology platform company providing enterprise-focused Immersive Technology, Spatial Computing and Artificial Intelligence driven software and services (October 2017 – December 2023) •Education: ◦B.A. in History from the University of Newcastle, Newcastle-Upon-Tyne ◦Postgraduate Certificate in Education from Goldsmiths, University of London Alan Trefler, age 70 •Founder of Pegasystems and Chief Executive Officer and Chairman of the Board of Directors since Pegasystems was organized in 1983 •Qualifications and Relevant Experience: ◦Extensive experience in the software industry ◦Guided Pegasystems from its founding to its position as a global leader in AI-powered enterprise solutions ◦Numerous accolades for his contributions to technology and business ◦Author of best-selling book, “Build for Change” ◦B.A. in economics and computer science from Dartmouth College Larry Weber, age 70 •Director since August 2012 ◦Extensive experience in the global marketing and public relations industry ◦Over the past 40 years, helped both global and emerging organizations become powerhouse brands ◦Thought leadership and commercialization perspective on AI’s societal and business impact •Career Highlights: ◦Executive Officer and Chairman of the Board of Racepoint Global, Inc., a digital marketing services ecosystem of marketing service companies organized to help chief marketing officers in their roles as builders of communities and content aggregators, since he founded the company in September 2004 ◦Co-founded the Massachusetts Innovation & Technology Exchange (MITX) in 1996, one of the largest interactive advocacy organizations in the world, and serves as its Chairman of the Board ◦Authored seven books on business, technology, and marketing •Education: ◦B.A. in English from Denison University, Ohio ◦M.F.A. in Writing and Literature from Antioch College, Oxford

  6. DIRECTOR COMPENSATION

    DIRECTOR COMPENSATION Our non-employee directors are paid an annual cash retainer of $50,000 and receive an annual equity grant valued at $250,000 (the “Annual Equity Grant”). The Annual Equity Grant is granted in the form of fifty percent common stock and fifty percent stock options, which are both fully vested when granted. Additionally, we pay an annual cash retainer to non-employee directors serving on committees: •$27,000 to the Audit Committee Chair •$15,000 to each Audit Committee member other than the Chair •$20,000 to the Compensation Committee Chair •$10,000 to each Compensation Committee member other than the Chair •$12,500 to the Nominating and Corporate Governance Committee Chair •$12,500 to the Risk Subcommittee Chair •$7,500 to each Risk Subcommittee member other than the Chair Directors do not receive compensation for service as non-Chair members of the Nominating and Corporate Governance Committee. In addition to the above, we also offer to reimburse non-employee directors for expenses incurred in attending Board, committee, or other Company meetings. Alan Trefler is our only director who is also an employee. He receives no compensation for his service as a director.

  7. Non-Employee Director Compensation

    Non-Employee Director Compensation The following table provides the total compensation earned by each non-employee director in 2025:

  8. Non-Employee Director Compensation

    | | Fees Earned or Paid in Cash | Stock Awards (1) | Option Awards (1)(2) | Total | | Rohit Ghai(3) | $98,459 | $177,490 | $177,439 | $453,388 | | Peter Gyenes | $65,000 | $125,015 | $125,015 | $315,030 | | Richard Jones | $60,000 | $125,015 | $125,015 | $310,030 | | Christopher Lafond | $84,500 | $125,015 | $125,015 | $334,530 | | Dianne Ledingham | $60,000 | $125,015 | $125,015 | $310,030 | | Sharon Rowlands | $70,000 | $125,015 | $125,015 | $320,030 | | Larry Weber | $95,000 | $125,015 | $125,015 | $345,030 |

  9. Non-Employee Director Compensation

    (1) These amounts reflect the dollar amount of the aggregate grant date fair value of awards granted in 2025, in accordance with Financial Accounting Standards Board Accounting Standards Codification (“FASB ASC”) Topic 718. (2) In addition, at December 31, 2025, each of our non-employee directors other than Mr. Ghai held outstanding stock options to purchase an aggregate of 55,304 shares of our common stock, and Mr. Ghai held outstanding stock options to purchase an aggregate of 7,350 shares of our common stock. (3) Mr. Ghai received a pro-rated cash retainer and pro-rated annual equity grant in January 2025 when he joined the Board and also received the full-year 2025 annual retainer and equity grant paid to the all non-employee directors.

  10. Competitive Compensation Program

    Competitive Compensation Program In making compensation decisions, management and the Compensation Committee consider the competitiveness of our executive officers’ compensation by comparing each element of compensation against compensation data from a peer group of the business-to-business software companies listed below, which the Compensation Committee believes compete with us for executive talent and that have similar present or projected revenue, are in a comparable industry, and/or are within our geographic market. The Compensation Committee also considers data from published compensation surveys including the Radford McLagan Compensation Database. In general, the Compensation Committee targets total compensation of our executive officers at above the median as compared to our peer group companies and compensation surveys. We used the companies listed below as our peer group for reviewing and evaluating our 2025 executive compensation program:

  11. Competitive Compensation Program

    | Atlassian Corporation | Okta, Inc. | | Dynatrace, Inc. | PTC Inc. | | Fair Isaac Corporation | Twilio, Inc. | | Guidewire Software, Inc. | Veeva Systems Inc. | | MongoDB, Inc. | |

  12. ELEMENTS OF COMPENSATION

    | | Objective | Fixed/Variable | | Base Salary | Attract and retain highly qualified leaders with market-competitive compensation structure. | Fixed | | Bonus – Corporate Incentive Compensation Plan | Link pay with our performance. Reward achievement of our financial and strategic goals. | Variable | | Additional Cash Incentives | Link pay with individual, business unit and/or corporate performance. Reward achievement of specific goals. | Variable | | Equity Awards (Stock Options, Performance-Based Stock Options, and Restricted Stock Units) | Link pay with our long-term performance. Reward stock price appreciation, promote long-term retention and permit executives to accumulate equity ownership. | Variable | | Other Perquisites | Retain talent by providing financial protection and security. | Fixed |

  13. Bonus – Corporate Incentive Compensation Plan (CICP)

    Bonus – Corporate Incentive Compensation Plan (CICP) Annual cash bonuses under our Corporate Incentive Compensation Plan, or CICP, for executive officers are intended to reward executive officers for the achievement of our financial and strategic goals. In 2025, the CICP performance goals were divided into two categories. The first category, in the aggregate weighted at 75% of total achievement, was corporate financial goals related to progress against our Rule of 40 targets, calculated as the sum of ACV growth and free cash flow margin, with full achievement at 39% or greater. The second category was key operational initiatives related to strategy and organizational effectiveness established by our senior management and approved by the Board of Directors as part of our annual strategic planning, with the strategic initiatives in the aggregate weighted at 25% of total achievement. Together, these two categories make up a single performance target under the CICP, or the Corporate Performance Target. The target bonus levels established for our executive officers represent management’s and the Compensation Committee’s assessment of a very high level of achievement of specific goals. Where target bonus levels relate to financial goals that are also the subject of our published financial guidance, these goals are generally established at levels that represent over-performance in relation to the guidance that we publish at the beginning of each calendar year. The percentage achievement of the Corporate Performance Target, or the Funding Percentage, determines the extent to which the CICP is funded. The CICP is funded with an amount equal to the aggregate target cash bonus amount multiplied by the Funding Percentage, except that if the Funding Percentage is less than 70% (“threshold funding”) then the CICP is not funded at all and no CICP bonuses are paid. For 2025, Pegasystems exceeded the Corporate Performance Target, resulting in a Funding Percentage of 120%. Once the Funding Percentage is determined and the pool of funds for CICP bonuses is established, the actual bonus payment for each executive officer is subject to adjustment to reflect each individual’s level of contribution to our strategic goals, as determined by the Compensation Committee. The Chief Executive Officer assesses each other executive officer’s contribution to the overall operational plan and to such executive officer’s specific functional unit, and the Compensation Committee has the discretion to modify individual payout amounts to reflect an individual’s performance. For 2025, based on each executive officer’s contributions and individual performance and in light of the Company’s over-performance of the Corporate Performance Target, the Compensation Committee approved the payment of CICP bonuses to our named executive officers as follows, expressed as percentages of their target CICP bonus: •Chief Executive Officer: 120% of target CICP bonus •Chief Operating Officer and Chief Financial Officer: 127% of target CICP bonus •Other named executive officers: 122% of target CICP bonus

  14. Additional Cash Incentives

    Additional Cash Incentives Additional cash incentives have historically been available to several executives other than our Chief Executive Officer based on the achievement of specific individual, business unit, and/or corporate performance goals established by our Chief Executive Officer. In 2025, Mr. Higgins and Leon Trefler were eligible to earn sales incentive commissions related to Global ACV Bookings. Because Pegasystems overachieved the 2025 goals for Global ACV Bookings, and Mr. Higgins and Leon Trefler received sales commissions representing 121% and 128%, respectively, of each executive’s target commissions.

  15. Equity Awards

    Equity Awards The Compensation Committee generally utilizes time-based stock options, performance-based stock options, and restricted stock units, or RSUs, to align the long-term interests of executives and shareholders and, in the case of performance-based stock options, incentivize the achievement of certain financial goals. All of our equity awards are granted under our 2004 Long-Term Incentive Plan, as amended and restated, or the “2004 Long-Term Incentive Plan.” Performance-Based Stock Options - 2024 In March 2024, the Compensation Committee granted our named executive officers, other than our Chief Executive Officer, and certain other employees stock options with vesting conditioned on the Company’s achievement of ACV growth and Rule of 40 targets in fiscal years 2024 and 2025 (2024 PSOs). The 2024 PSOs vested over two years based on the Company’s achievement of financial performance targets: (1) 25% on the first anniversary of the grant date based on the achievement of financial performance goals for the year ended December 31, 2024, and (2) 75% on the second anniversary of the grant date based on the achievement of financial performance goals for the year ended December 31, 2025 subject to adjustment for the actual level of achievement. For the year ended December 31, 2024, the Company achieved the performance metrics at a 100% level, and 25% of the shares originally subject to the 2024 PSOs vested on March 4, 2025. For the year ended December 31, 2025, the Company over-achieved the performance metrics at a 160% level, and an additional 120% of the shares originally subject to the 2024 PSOs vested on March 4, 2026. The chart below shows the performance metrics and achievement scale for the 2025 tranche of the 2024 PSOs. For the year ended December 31, 2025, Pegasystems’ ACV growth was 14% on a constant currency basis, and the Company’s financial results exceeded the Rule of 40.

  16. Equity Awards

    | 2024 PSOs: FY 2025 Achievement Scale | | | | ACV Growth (constant currency) | Rule of 40 | | | | 39+ | 38 | | 10% | 80% | 60% | | 11% | 100% | 80% | | 12% | 120% | 100% | | 13% | 140% | 120% | | 14% | 160% | 140% | | 15% | 180% | 160% |

  17. Equity Awards

    Performance-Based Stock Options - 2025 In March 2025, the Compensation Committee granted our named executive officers, other than our Chief Executive Officer, and certain other employees stock options with vesting conditioned on the Company’s achievement of ACV growth and Rule of 40 targets in fiscal years 2026 and 2027 (2025 PSOs). To help continue the Company’s momentum and reward executives for a strong fiscal year 2024 and to enhance the retention value of performance options, the Compensation Committee designed the 2025 PSOs with a longer performance period and vesting schedule than the 2024 PSOs. 50% of the shares originally subject to the 2025 PSOs are eligible to vest quarterly over two years beginning on the second anniversary of the grant date based on the achievement of financial performance goals for the year ending December 31, 2026, and 50% of the shares originally subject to the 2025 PSOs are eligible to vest quarterly over two years beginning on the third anniversary of the grant date based on the achievement of financial performance goals for the year ending December 31, 2027, in each case subject to adjustment for the actual level of achievement. Any shares subject to 2025 PSOs not earned for the applicable performance period are forfeited. CICP RSUs Executive officers and other employees may elect to receive 50% of their target incentive compensation under the CICP in the form of RSUs instead of cash. As an added incentive, the number of RSUs receivable by executive officers and other employees upon such election is determined by dividing 50% of their target incentive compensation by an amount equal to 85% of the closing price of our common stock on the date of grant. If elected pursuant to the CICP, the RSUs are granted in March and vest 100% on the first anniversary of the date of grant if the Funding Percentage is at least 70%, as described in the CICP - Bonus section above, and the executive or employee is employed by the Company and in good standing with satisfactory performance as of the vesting date. If these conditions are not met, the RSUs do not vest, and the award expires. Because the Funding Percentage for the 2025 CICP exceeded the 70% target, the CICP RSUs granted in March 2025 vested 100% in March 2026. RSUs and Stock Options with Time-Based Vesting In addition to the performance-based stock options and CICP RSUs described above, we also grant stock options with time-based vesting to all of our executive officers and RSUs with time-based vesting to our executive officers other than our Chief Executive Officer. We believe these time-based equity awards are an important retention tool, as the equity awards vest over a multiple-year period only if the executive continues to be employed by us on each vest date. The Compensation Committee grants stock options to incentivize and reward executives if the Company’s stock price increases over the exercise price of the options, while mitigating retention risk with RSUs, which have value even if the Company’s stock price declines. RSUs also help mitigate shareholder dilution, as an RSU award can provide equivalent value to the executive as a stock option but through the issuance of fewer shares. In 2025, the Compensation Committee granted a stock option with time-based vesting to our Chief Executive Officer and a mix of stock options and RSUs with time-based vesting to our other named executive officers. These stock options and RSU awards vest over four years based on continued employment.

  18. Equity Award Granting Practices

    Equity Award Granting Practices Newly hired employees typically receive an initial equity award of either time-based RSUs or a combination of time-based RSUs and options upon joining Pegasystems, and the Company’s practice is to grant these awards on the first business day of the first or second month following the employee’s start date. The Compensation Committee also makes periodic grants of time-based stock options and RSUs as well as grants of performance options to executive officers and certain employees, typically at the Compensation Committee’s regularly scheduled March meeting. We do not consider material nonpublic information or its release dates when determining the timing or terms of stock option grants, and we do not time the disclosure of material nonpublic information to affect the value of executive compensation. The exercise price of a newly granted option is the closing price of our common stock on the Nasdaq on the date of grant or, if the grant date falls on a non-trading day, the closing price of our common stock on the Nasdaq on the last trading day preceding the date of grant.

  19. SEVERANCE, RETENTION, AND CHANGE IN CONTROL BENEFITS

    SEVERANCE, RETENTION, AND CHANGE IN CONTROL BENEFITS We have entered into employment offer letters with Messrs. Stillwell and Higgins containing provisions for additional compensation upon termination of employment under certain circumstances. The agreement with Mr. Stillwell provides that, in the event his employment is terminated by us without cause, he will receive a severance payment equal to six months of then-current base salary, plus an additional month for each year of service with a maximum of 12 months’ total severance. In addition, in the event of a sale of Pegasystems and termination of his employment, all of Mr. Stillwell’s unvested stock options and RSUs would be subject to immediate full acceleration of vesting. Mr. Higgins’ agreement provides that, in the event of a sale of Pegasystems and termination of Mr. Higgins’ employment, all unvested stock options and RSUs granted as part of his new hire equity award would be subject to immediate full acceleration of vesting. Our primary rationale for these benefits is that we believe it is standard in our industry to provide a reasonable severance payment to certain high ranking executive officers in the event that they are terminated without cause, and that the absence of such arrangements might jeopardize our chances of hiring and retaining such executives. We limit such post-termination compensation arrangements to situations in which such executive officers are actually terminated, rather than those in which there is a mere change of control.

  20. POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL

    POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL The following quantifies the potential payments and benefits to Messrs. Stillwell and Higgins upon termination of employment or a change in control, assuming such event occurred on December 31, 2025. These numbers do not reflect the actual amounts that may be paid to such persons, which would only be known at the time that they become eligible for payment and would only be payable if the specified event occurs. Under the terms of the employment offer letters described above: •If Mr. Stillwell had been terminated without cause on December 31, 2025, he would have received a severance payment of $550,000. •In addition, if, on December 31, 2025, Mr. Stillwell had been terminated following a sale of Pegasystems, the value of his accelerated RSUs would have been $8,181,162, and the value of his accelerated stock options would have been $13,221,202, excluding out-of-the-money options. •If, on December 31, 2025, Mr. Higgins had been terminated following a sale of Pegasystems, the value of his accelerated RSUs would have been $220,128, and the value of his accelerated stock options would have been $0, as all of the options subject to acceleration were out-of-the-money. The value of accelerated unvested options as of December 31, 2025 is calculated by taking the difference between the closing price of our common stock on NASDAQ Global Select Market on the last trading day of the fiscal year ($59.72 on December 31, 2025) and the option exercise price and multiplying it by the number of shares subject to accelerated options. For RSUs, the value represents the closing price of our common stock on the last trading day of the fiscal year, multiplied by the number of accelerated units.

  21. CEO PAY RATIO

    CEO PAY RATIO We are providing the following information about the relationship between the annual total compensation of our employees and the annual total compensation of our Chief Executive Officer. For 2025, our last completed fiscal year: •The annual total compensation of our median employee, calculated in accordance with SEC rules was $113,833; •The annual total compensation of our Chief Executive Officer, as reported in the Summary Compensation Table of this proxy statement, was $8,332,032; and •The ratio of the annual total compensation of our Chief Executive Officer to the median employee was approximately 73 to 1. As permitted by SEC rules, we elected to use the same median employee in 2025 for comparison purposes as we used in 2023. In 2023, the median employee was identified using the following methodology: •We selected December 1, 2023, which is within the last three months of 2023, as the date upon which we would identify the median employee. •In determining the employee population to be used to calculate the compensation of the median employee, we included employees in all countries. •We compared the annual base salary, target bonus, sales commissions, and additional cash incentive compensation for the employee population for the 2023 calendar year. This is referred to as On-Target Earnings. •Based on the On-Target Earnings of each employee, we identified the Median Cohort, of approximately 547 employees consisting of the median employee and the employees 5% above and 5% below the median On-Target Earnings. •We examined the applicable payroll data of actual cash earnings for each employee in the Median Cohort, including base salary, bonus, sales commissions, additional cash incentive compensation and car allowance paid in calendar year 2023 and we identified the employee who earned the median cash earnings within the Median Cohort. That employee is our median employee. •A U.S. dollar exchange rate as of a date in December 2023 was applied to compensation reported in a foreign currency.

  22. EQUITY COMPENSATION PLAN INFORMATION

    EQUITY COMPENSATION PLAN INFORMATION The following table provides certain information with respect to our equity compensation plans in effect as of December 31, 2025:

  23. EQUITY COMPENSATION PLAN INFORMATION

    | (in thousands, except per share amounts) | (a) Number of Shares of Common Stock to be Issued Upon Exercise of Outstanding Stock Options and Vesting of RSUs(2) (3) | (b) Weighted-average Exercise price per Share of Outstanding Stock Options(4) | (c) Number of Shares of Common Stock Remaining Available for Future Issuance (excluding those in column (a))(5) | | Equity compensation plans approved by shareholders(1) | 30,030 | $33.14 | 21,706 |

  24. EQUITY COMPENSATION PLAN INFORMATION

    (1) We currently maintain two equity compensation plans: the 2004 Long-Term Incentive Plan and the 2006 Employee Stock Purchase Plan as amended (“2006 ESPP”). In addition to the issuance of stock options, the 2004 Long-Term Incentive Plan allows for the issuance of stock purchase rights and other stock-based awards, including RSUs. Our shareholders previously approved each of these plans and all amendments that were subject to shareholder approval. See “16. Stock-Based Compensation” in Item 8 of our Annual Report filed on Form 10-K for the year ended December 31, 2025 for additional information. (2) The number of shares of common stock issued upon exercise of vested stock options and vesting of RSUs will be less than the 30.0 million shown above because equity grants to our executive officers subject to Section 16 of the Exchange Act use the “net settlement” feature for stock options and RSUs. This feature enables the Company to withhold shares to cover the cost to exercise stock options and, if applicable, to cover taxes due (in the case of stock options and RSUs) based on the fair value of the shares at the exercise date (in the case of stock options) or vesting date (in the case of RSUs), instead of selling all the shares on the open market to satisfy these obligations. The settlement of exercised stock options and vested RSUs on a net share basis for our executive officers will result in fewer shares issued by the Company. In addition, the above indicated number of shares to be issued upon exercise of outstanding stock options and vesting of RSUs does not include 1.8 million shares reserved for issuance in the event of maximum achievement in connection with the 2024 and 2025 performance-based option awards. The number of shares of common stock remaining available for issuance have been reduced by the 1.8 million shares reserved in the event of maximum achievement in connection with the 2024 and 2025 performance-based option awards. (3) During 2025, the Company issued 8.6 million shares of common stock upon exercise of vested stock options and vesting of RSUs. (4) The weighted-average exercise price does not consider the shares issuable upon vesting of outstanding RSUs, which have no exercise price. (5) Includes approximately 1.6 million shares remaining available for issuance as of December 31, 2025 under the 2006 ESPP.

  25. SUMMARY COMPENSATION TABLE

    SUMMARY COMPENSATION TABLE The following table sets forth information required under applicable SEC rules about the compensation for 2025, 2024, and 2023 of our named executive officers:

  26. SUMMARY COMPENSATION TABLE

    | | Year | Salary | Bonus | Stock Awards(1) | Option Awards(2) | Non-Equity Incentive Plan Compensation(3) | All Other Compensation(4) | Total | | Alan Trefler Chairman and Chief Executive Officer | 2025 | $600,000 | $— | $— | $7,001,532 | $720,000 | $10,500 | $8,332,032 | | | 2024 | $571,731 | $— | $— | $6,499,454 | $600,319 | $10,350 | $7,681,854 | | | 2023 | $495,000 | $— | $— | $4,550,006 | $495,000 | $9,900 | $5,549,906 | | Kenneth Stillwell Chief Operating Officer and Chief Financial Officer | 2025 | $550,000 | $— | $2,258,459(5) | $3,206,202 | $330,343 | $10,500 | $6,355,504 | | | 2024 | $544,615 | $— | $2,396,175(5) | $2,805,817 | $247,721 | $10,350 | $6,004,678 | | | 2023 | $530,000 | $— | $2,181,866(5) | $1,539,691 | $185,500 | $9,900 | $4,446,957 | | Rifat Kerim Akgonul Chief Product Officer | 2025 | $491,262 | $— | $1,206,236(5) | $2,096,390 | $234,760 | $10,500 | $4,039,148 | | | 2024 | $463,154 | $— | $1,247,858(5) | $1,648,857 | $203,901 | $10,350 | $3,574,120 | | | 2023 | $450,000 | $— | $1,015,747(5) | $908,114 | $135,000 | $9,900 | $2,518,761 | | John Gerard Higgins Chief of Client and Partner Success(6) | 2025 | $520,841 | $293,540(7) | $1,143,530(5) | $2,096,390 | $170,103 | $12,386 | $4,236,791 | | | 2024 | $480,381 | $255,030(7) | $1,227,342(5) | $1,771,831 | $133,598 | $22,648 | $3,890,830 | | | 2023 | $472,372 | $156,522(7) | $988,164(5) | $1,002,264 | $118,093 | $— | $2,737,415 | | Leon Trefler Chief of Clients and Markets | 2025 | $415,000 | $523,629(7) | $1,000,059 | $2,096,390 | $252,467 | $10,500 | $4,298,045 | | | 2024 | $410,962 | $485,764(7) | $1,088,941 | $1,771,831 | $215,755 | $10,350 | $3,983,603 | | | 2023 | $400,000 | $324,198(7) | $999,621 | $1,059,451 | $200,000 | $9,900 | $2,993,170 |

  27. SUMMARY COMPENSATION TABLE

    (1) These amounts reflect the dollar amount of the aggregate grant date fair value of RSU awards granted in each of the fiscal years shown in accordance with FASB ASC Topic 718. The calculation of the fair value of RSU awards is set forth in "16. Stock-Based Compensation" in Item 8 of our Annual Report filed on Form 10-K for the year ended December 31, 2025 filed with the SEC on February 10, 2026. (2) These amounts reflect the dollar amount of the aggregate grant date fair value of stock option awards granted in each of the fiscal years shown in accordance with FASB ASC Topic 718. The assumptions used to calculate the value of option awards are set forth in “16. Stock-Based Compensation” in Item 8 of our Annual Report filed on Form 10-K for the year ended December 31, 2025 filed with the SEC on February 10, 2026. With respect to the performance-based options included in these amounts, the values were determined based on the expected performance at the time of grant. If the maximum level of performance is assumed for the performance-based options granted in 2025, the value of those performance based options would be $2,411,484 instead of $1,205,742 for Mr. Stillwell; $2,192,290 instead of $1,096,145 for Mr. Akgonul, Mr. Higgins, and for Leon Trefler. Alan Trefler did not receive performance based options in 2025. (3) Represents cash bonuses earned under the CICP in the year shown and paid in the following year. (4) Represents our 401(k) match for all named executive officers, with the exception of Mr. Higgins, during the years shown. For Mr. Higgins, these amounts represent company contributions and cash allowances in connection with our UK defined contribution pension plan. (5) These amounts include the named executive officer’s election to receive 50% of his target incentive compensation under the CICP in the year shown in the form of RSUs instead of cash. (6) Mr. Higgins’ salary, bonus, non-equity incentive plan compensation and all other compensation was converted from British Pounds to USD using the exchange rate as of December 31st of each applicable year. (7) Represents additional cash incentives for sales commissions earned during the years shown.

  28. GRANTS OF PLAN-BASED AWARDS

    GRANTS OF PLAN-BASED AWARDS The following table sets forth certain information with respect to the plan-based awards granted during or for the fiscal year ended December 31, 2025 to each of the named executive officers:

  29. GRANTS OF PLAN-BASED AWARDS

    | | | Estimated Future Payouts Under | | | | | | All Other Stock Awards: Number of Shares of Stock or Units | All Other Option Awards: Number of Securities Underlying Options | Exercise or Base Price of Option Awards | Grant Date Fair Value of Stock and Option Awards(2) | | | | Non-Equity Incentive Plan Awards(1) | | | Equity Incentive Plan Awards | | | | | | | | | Grant Date | Threshold | Target | Maximum (3) | Threshold | Target | Maximum | | | | | | Alan Trefler | | $420,000 | $600,000.00 | $— | | | | | | | | | | 3/4/2025 | | | | | | | | 450,018 | $38.82 | $7,001,532 | | Kenneth Stillwell | | $173,250 | $247,500(4) | $— | | | | | | | | | | 3/4/2025 | | | | 6,668 | 6,668(4) | 6,668 | | | | $258,418 | | | 3/4/2025 | | | | | | | 51,694 | | | $2,000,041 | | | 3/4/2025 | | | | | | | | 128,578 | $38.82 | $2,000,460 | | | 3/4/2025 | | | | 35,359 | 70,718(5) | 141,436 | | | $38.82 | $1,205,742 | | Rifat Kerim Akgonul | | $128,956 | $184,223(4) | $— | | | | | | | | | | 3/4/2025 | | | | 5,320 | 5,320(4) | 5,320 | | | | $206,177 | | | 3/4/2025 | | | | | | | 25,848 | | | $1,000,059 | | | 3/4/2025 | | | | | | | | 64,290 | $38.82 | $1,000,245 | | | 3/4/2025 | | | | 32,145 | 64,290(5) | 128,580 | | | $38.82 | $1,096,145 | | John Gerard Higgins (6) | | $91,147 | $130,210(4) | $— | | | | | | | | | | 3/4/2025 | | | | 3,702 | 3,702(4) | 3,702 | | | | $143,471 | | | 3/4/2025 | | | | | | | 25,848 | | | $1,000,059 | | | 3/4/2025 | | | | | | | | 64,290 | $38.82 | $1,000,245 | | | 3/4/2025 | | | | 32,145 | 64,290(5) | 128,580 | | | $38.82 | $1,096,145 | | Leon Trefler | | $145,250 | $207,500 | $— | | | | | | | | | | 3/4/2025 | | | | | | | 25,848 | | | $1,000,059 | | | 3/4/2025 | | | | | | | | 64,290 | $38.82 | $1,000,245 | | | 3/4/2025 | | | | 32,145 | 64,290(5) | 128,580 | | | $38.82 | $1,096,145 |

  30. GRANTS OF PLAN-BASED AWARDS

    (1) All awards were made pursuant to our 2025 CICP. (2) Reflects the dollar amount of the grant date fair value for the option and RSU awards, in accordance with FASB ASC Topic 718. The assumptions used in determining the grant date fair values calculations are set forth in “16. Stock-Based Compensation” in Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on February 10, 2026. (3) There is no maximum payout amount, as additional incentives can be earned for performance above targets, as determined by the Board of Directors in its discretion. (4) Reflects the named executive officer’s election to receive 50% of his target incentive compensation under the 2025 CICP in the form of RSUs instead of cash. The RSUs granted were determined by dividing 50% of the employee's annual Target Incentive Opportunity by 85% of the closing price of our stock on the date of grant, less the present value of expected dividends during the vesting period. The 15% discount to the closing price, which is used to calculate the number of RSUs granted, provides an additional incentive to employees to acquire our stock. If the performance conditions described in the CICP - Bonus section of Compensation Discussion and Analysis are achieved, then the RSU award vests 100% on the first anniversary of the grant date. If these conditions are not met, the RSUs do not vest, and the award expires. (5) Reflects performance stock options that vest as to 50% of the shares subject to the options quarterly over two years beginning on the second anniversary of the grant date based on the achievement of certain performance targets for the year ending December 31, 2026 and as to the remaining 50% of the shares subject to the options quarterly over two years beginning on the third anniversary of the grant date based on the achievement of certain performance targets for the year ending December 31, 2027. The maximum achievement of the performance targets is 200%. (6) Mr. Higgins’ Non-Equity Incentive Plan Awards are converted from British Pounds to USD using the exchange rate as of December 31, 2025.

  31. OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

    OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END The following table sets forth certain information with respect to the value of outstanding equity awards at December 31, 2025, previously granted to the named executive officers.

  32. OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

    | | Option Awards | | | | | Stock Awards | | | | | | Number of Securities Underlying Unexercised Options | | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options | Option Exercise Price | Option Expiration Date(1) | Number of Shares or Units of Stock That Have Not Vested | Market Value of Shares or Units of Stock That Have Not Vested(2) | 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(2) | | | Exercisable | Unexercisable | | | | | | | | | Alan Trefler | 265,818 | — | | $32.18 | 3/6/2029 | | | | | | | 220,850 | — | | $45.03 | 3/3/2030 | | | | | | | 162,314(3) | 8,542(3) | | $65.23 | 3/2/2031 | | | | | | | 360,046(3) | 120,014(3) | | $42.70 | 3/1/2032 | | | | | | | 483,272 | — | | $23.64 | 3/7/2033 | | | | | | | 219,850(4) | 282,664(4) | | $31.05 | 3/5/2034 | | | | | | | —(4) | 450,018(4) | | $38.82 | 3/4/2035 | | | | | | | | | | | | 2,498(3) | $149,181 | | | | Kenneth Stillwell | 110,426 | — | | $45.03 | 3/3/2030 | | | | | | | 74,914(3) | 3,942(3) | | $65.23 | 3/2/2031 | | | | | | | 110,784(3) | 36,928(3) | | $42.70 | 3/1/2032 | | | | | | | —(5) | 103,680(5) | | $16.95 | 11/2/2032 | | | | | | | 8,804(4) | 79,240(4) | | $31.05 | 3/5/2034 | | | | | | | —(6) | | 108,000(6) | $31.05 | 3/5/2034 | | | | | | | —(4) | 128,578(4) | | $38.82 | 3/4/2035 | | | | | | | — | — | 141,436(7) | $38.82 | 3/4/2035 | | | | | | | | | | | | 1,152(3) | $68,797 | | | | | | | | | | 11,754(3) | $701,949 | | | | | | | | | | 26,104(4) | $1,558,931 | | | | | | | | | | 39,620(4) | $2,366,106 | | | | | | | | | | 51,694(4) | $3,087,166 | | | | | | | | | | | | 6,668(8) | $398,213 | | Rifat Kerim Akgonul | 13,908 | — | | $29.48 | 3/5/2028 | | | | | | | 25,190 | — | | $32.18 | 3/6/2029 | | | | | | | 53,004 | — | | $45.03 | 3/3/2030 | | | | | | | 29,966(3) | 1,578(3) | | $65.23 | 3/2/2031 | | | | | | | 55,392(3) | 18,464(3) | | $42.70 | 3/1/2032 | | | | | | | 50,000 | — | | $26.24 | 6/5/2032 | | | | | | | 66,028(5) | 49,336(5) | | $16.95 | 11/2/2032 | | | | | | | 72,454 | — | | $23.64 | 3/7/2033 | | | | | | | 30,816(4) | 39,620(4) | | $31.05 | 3/5/2034 | | | | | | | 15,000(6) | | 81,000(6) | $31.05 | 3/5/2034 | | | | | | | —(4) | 64,290(4) | | $38.82 | 3/4/2035 | | | | | | | — | — | 128,580(7) | $38.82 | 3/4/2035 | | | | | | | | | | | | 462(3) | $27,591 | | | | | | | | | | 5,876(3) | $350,915 | | | | | | | | | | 11,392(4) | $680,330 | | | | | | | | | | 19,810(4) | $1,183,053 | | | | | | | | | | 25,848(4) | $1,543,643 | | | | | | | | | | | | 5,320(8) | $317,710 |

  33. OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

    | | Option Awards | | | | | Stock Awards | | | | | | Number of Securities Underlying Unexercised Options | | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options | Option Exercise Price | Option Expiration Date(1) | Number of Shares or Units of Stock That Have Not Vested | Market Value of Shares or Units of Stock That Have Not Vested(2) | 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(2) | | | Exercisable | Unexercisable | | | | | | | | | John Gerard Higgins | 11,970 | 630 | | $68.04 | 3/1/2031 | | | | | | | 60,440(9) | 3,180(9) | | $68.04 | 3/1/2031 | | | | | | | 8,664(10) | 2,888(10) | | $68.04 | 3/1/2031 | | | | | | | 5,802(11) | 4,746(11) | | $68.04 | 3/1/2031 | | | | | | | 48,468(3) | 16,156(3) | | $42.70 | 3/1/2032 | | | | | | | 100,000 | — | | $26.24 | 6/5/2032 | | | | | | | 77,152(5) | 52,384(5) | | $16.95 | 11/2/2032 | | | | | | | 106,454 | — | | $23.64 | 3/7/2033 | | | | | | | 30,816(4) | 39,620(4) | | $31.05 | 3/5/2034 | | | | | | | 17,500(6) | | 94,500(6) | $31.05 | 3/5/2034 | | | | | | | —(4) | 64,290(4) | | $38.82 | 3/4/2035 | | | | | | | — | — | 128,580(7) | $38.82 | 3/4/2035 | | | | | | | | | | | | 184(3) | $10,988 | | | | | | | | | | 920(9) | $54,942 | | | | | | | | | | 922(10) | $55,062 | | | | | | | | | | 1,660(11) | $99,135 | | | | | | | | | | 5,142(3) | $307,080 | | | | | | | | | | 11,392(4) | $680,330 | | | | | | | | | | 19,810(4) | $1,183,053 | | | | | | | | | | 25,848(4) | $1,543,643 | | | | | | | | | | | | 3,702(8) | $221,083 | | Leon Trefler | 48,764 | — | | $22.15 | 3/2/2027 | | | | | | | 46,654 | — | | $29.48 | 3/5/2028 | | | | | | | 53,164 | — | | $32.18 | 3/6/2029 | | | | | | | 53,004 | — | | $45.03 | 3/3/2030 | | | | | | | 24,972(3) | 1,314(3) | | $65.23 | 3/2/2031 | | | | | | | 55,392(3) | 18,464(3) | | $42.70 | 3/1/2032 | | | | | | | 100,000 | — | | $26.24 | 6/5/2032 | | | | | | | 148,028(5) | 49,336(5) | | $16.95 | 11/2/2032 | | | | | | | 112,528 | — | | $23.64 | 3/7/2033 | | | | | | | 30,816(4) | 39,620(4) | | $31.05 | 3/5/2034 | | | | | | | 17,500(6) | | 94,500(6) | $31.05 | 3/5/2034 | | | | | | | —(4) | 64,290(4) | | $38.82 | 3/4/2035 | | | | | | | — | — | 128,580(7) | $38.82 | 3/4/2035 | | | | | | | | | | | | 384(3) | $22,932 | | | | | | | | | | 5,876(3) | $350,915 | | | | | | | | | | 13,290(4) | $793,679 | | | | | | | | | | 19,810(4) | $1,183,053 | | | | | | | | | | 25,848(4) | $1,543,643 | | |

  34. OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

    (1) All stock options expire ten years after the grant date. (2) Market value is calculated using a share price of $59.72, the closing price of our common stock on the NASDAQ Global Select Market on December 31, 2025. (3) This equity award vests on a five-year schedule, with 20% vesting after one year and the remaining 80% vesting in equal quarterly installments over the remaining four years. (4) This equity award vests on a four-year schedule, with 25% vesting after one year and the remaining 75% vesting in equal quarterly installments over the remaining three years. (5) This stock option vests in equal quarterly installments over four years. (6) This stock option vests over two years based on the Company’s achievement of financial performance targets: (1) 25% on the first anniversary of the grant date based on the achievement of financial performance targets for the year ended December 31, 2024 and (2) 75% on the second anniversary of the grant date based on the achievement of financial performance targets for the year ended December 31, 2025 subject to adjustment for the actual level of achievement. The first tranche vested 100% based on the Company’s achievement of the 2024 financial performance targets, and the maximum achievement of the 2025 performance targets would result in 180% of the shares in the second tranche vesting. The number of shares in the Number of Securities Underlying Unexercised Unearned Options column reflects the maximum achievement of the 2025 performance targets; however, the actual level of achievement for the second tranche was 160%, as described in the Compensation Discussion and Analysis section of this proxy statement. (7) This stock option vests based on the Company’s achievement of financial performance targets: (1) 50% based on the achievement of financial performance targets for the year ending December 31, 2026 and (2) 50% based on the achievement of financial performance targets for the year ending December 31, 2027, with each tranche subject to adjustment for the actual level of achievement. If the financial performance targets for the first tranche are achieved, then that tranche will vest in equal quarterly installments over two years beginning on the second anniversary of the grant date. If the financial performance targets for the second tranche are achieved, then that tranche will vest in equal quarterly installments over two years beginning on the third anniversary of the grant date. The maximum achievement of the performance targets is 200%, and the number of shares in the Number of Securities Underlying Unexercised Unearned Options column reflects the maximum achievement of the performance targets for both tranches. (8) This RSU award was granted in connection with the named executive officer’s election to receive 50% of his target incentive compensation under the 2025 CICP in the form of RSUs instead of cash. The RSU award vests 100% on the first anniversary of the grant date if the performance conditions described in the CICP - Bonus section of Compensation Discussion and Analysis are achieved. (9) This equity award vests in equal quarterly installments over five years. (10) This equity award vests on a six-year schedule, with 20% vesting on the second anniversary of the grant date and the remaining 80% vesting in equal quarterly installments over the remaining four years. (11) This equity award vests on a seven-year schedule, with 20% vesting on the third anniversary of the grant date and the remaining 80% vesting in equal quarterly installments over the remaining four years.

  35. OPTION EXERCISES AND STOCK VESTED TABLE

    OPTION EXERCISES AND STOCK VESTED TABLE The following table sets forth certain information with respect to stock option exercises and restricted stock unit vestings for each of the named executive officers during the fiscal year ended December 31, 2025:

  36. OPTION EXERCISES AND STOCK VESTED TABLE

    | | Option Awards | | Stock Awards | | | | Number of Shares Acquired on Exercise | Value Realized on Exercise(1) | Number of Shares Acquired on Vesting | Value Realized on Vesting(2) | | Alan Trefler | — | $— | 12,776 | $602,336 | | Kenneth Stillwell | 564,866 | $17,052,102 | 74,154 | $3,485,887 | | Rifat Kerim Akgonul | 219,068 | $7,499,033 | 36,864 | $1,713,190 | | John Gerard Higgins | 80,000 | $2,742,400 | 38,994 | $1,831,919 | | Leon Trefler | 91,320 | $3,504,923 | 32,948 | $1,576,986 |

  37. OPTION EXERCISES AND STOCK VESTED TABLE

    (1) This amount is equal to the difference between the fair market value of the shares acquired on the exercise date less the exercise price, multiplied by the number of shares exercised. (2) This amount is the closing price per share of our common stock on the vesting date, multiplied by the number of shares vested.

  38. PAY VERSUS PERFORMANCE

    PAY VERSUS PERFORMANCE As described in greater detail in the “Compensation Discussion and Analysis” section, our executive compensation program reflects a variable pay-for-performance philosophy. The following table and related disclosures provide further “pay versus performance” disclosures with respect to our chief executive officer, also referred to as our principal executive officer (PEO), and our other named executive officers (NEOs), as contemplated by Item 402(v) of Regulation S-K.

  39. PAY VERSUS PERFORMANCE

    | | | | | | Value of Initial Fixed $100 Investment Based on: | | | | | Year | Summary Compensation Table Total to PEO(1) | Compensation Actually Paid to PEO(2) | Average Summary Compensation Table Total for Non-PEO NEOs(3) | Average Compensation Actually Paid to Non-PEO NEOs(2) | Company TSR(4) | Peer Group TSR(5) | Net Income (Loss)(6) | ACV Growth(7) | | (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | | 2025 | $8,332,032 | $21,544,886 | $4,732,372 | $12,751,275 | $90.49 | $154.55 | $393,437,000 | 14% | | 2024 | $7,681,854 | $26,286,687 | $4,363,308 | $15,331,839 | $70.48 | $147.08 | $99,189,000 | 11% | | 2023 | $5,549,906 | $9,282,305 | $3,174,076 | $6,770,951 | $36.90 | $117.75 | $67,808,000 | 11% | | 2022 | $7,448,708 | $(8,421,292) | $6,085,252 | $926,336 | $25.79 | $73.76 | $(345,582,000) | 16% | | 2021 | $7,517,898 | $3,999,210 | $2,050,969 | $977,576 | $83.99 | $115.29 | $(63,040,000) | 21% |

  40. PAY VERSUS PERFORMANCE

    (1) The dollar amounts in column (b) are the amounts of total compensation reported for Mr. Trefler (our Chief Executive Officer or PEO) for each corresponding year in the “Total” column of the Summary Compensation Table. Refer to “Executive Compensation – Summary Compensation Table.” (2) The dollar amounts reported in column (c) and (e), represent the amount of “compensation actually paid” (CAP) to Mr. Trefler and the average amount of CAP to the Non-PEO NEOs as a group, respectively, in the applicable year, as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual amount of compensation earned by or paid to the applicable persons during the applicable year. In accordance with Item 402(v) of Regulation S-K, the following adjustments were made to the compensation for Mr. Trefler, and the Non-PEO NEOs as a group, for each year to determine the “compensation actually paid”:

  41. PAY VERSUS PERFORMANCE

    | PEO | | | | | | Year | Summary Compensation Table Total | Reported Value of Equity Awards | Equity Award Adjustments | Compensation Actually Paid to PEO | | | | (a) | (b) | | | 2025 | $8,332,032 | $(7,001,532) | $20,214,386 | $21,544,886 | | 2024 | $7,681,854 | $(6,499,454) | $25,104,287 | $26,286,687 | | 2023 | $5,549,906 | $(4,550,006) | $8,282,405 | $9,282,305 | | 2022 | $7,448,708 | $(6,499,058) | $(9,370,942) | $(8,421,292) | | 2021 | $7,517,898 | $(6,791,448) | $3,272,760 | $3,999,210 | | Average for Non-PEO NEOs | | | | | | Year | Average Summary Compensation Table Total | Average Reported Value of Equity Awards | Average Equity Award Adjustments | Average Compensation Actually Paid to Non-PEO NEOs | | | | (a) | (b) | | | 2025 | $4,732,372 | $(3,775,914) | $11,794,817 | $12,751,275 | | 2024 | $4,363,308 | $(3,489,663) | $14,458,194 | $15,331,839 | | 2023 | $3,174,076 | $(2,423,730) | $6,020,605 | $6,770,951 | | 2022 | $6,085,252 | $(5,371,991) | $213,075 | $926,336 | | 2021 | $2,050,969 | $(1,380,855) | $307,462 | $977,576 |

  42. PAY VERSUS PERFORMANCE

    (a) Represents the grant date fair value of equity-based awards granted each year as reported in the “Stock Awards” and “Option Awards” column in the Summary Compensation Table for the applicable year. (b) The equity award adjustments for each applicable year include the addition (or subtraction, as applicable) of the following: (i) the year-end fair value of any equity awards granted in the applicable year that are outstanding and unvested as of the end of the year; (ii) the amount of change as of the end of the applicable year (from the end of the prior fiscal year) in fair value of any awards granted in prior years that are outstanding and unvested as of the end of the applicable year; (iii) for awards that are granted and vest in the same year, the fair value as of the vesting date; (iv) for awards granted in prior years that vest in the applicable year, the amount equal to the change as of the vesting date (from the end of the prior fiscal year) in fair value; (v) for awards granted in prior years that are determined to fail to meet the applicable vesting conditions during the applicable year, a deduction for the amount equal to the fair value at the end of the prior fiscal year; and (vi) the dollar value of any dividends or other earnings paid on awards in the applicable year prior to the vesting date that are not otherwise reflected in the fair value of such award or included in any other component of total compensation for the applicable year. The assumptions and calculations used to determine the fair values of unvested equity awards at each year end and the fair value of equity awards vested in the year were consistent with those disclosed in “16. Stock-Based Compensation” in Item 8 of our Annual Report filed on Form 10-K for the year ended December 31, 2025 filed with the SEC on February 10, 2026, except for the expected term assumptions for out-of-the-money option awards. For these options, the expected term was calculated as the remaining time to vest plus one-half of the remaining contractual life as of each calculation date. The amounts deducted or added in calculating the equity award adjustments are as follows:

  43. PAY VERSUS PERFORMANCE

    | PEO | 2021 | 2022 | 2023 | 2024 | 2025 | | Plus: Fair Value for Equity Awards Granted in the Covered Year that are Unvested at End of Year | $5,970,863 | $1,670,442 | $4,227,862 | $11,838,077 | $13,306,466 | | Change in Fair Value of Outstanding Unvested Equity Awards from Prior Year | $(3,176,116) | $(8,254,132) | $1,630,247 | $9,177,444 | $3,085,602 | | Change in Fair Value of Equity Awards from Prior Years that Vested in the Covered Year | $478,013 | $(2,787,252) | $2,424,296 | $4,088,766 | $3,822,318 | | Total Adjustment | $3,272,760 | $(9,370,942) | $8,282,405 | $25,104,287 | $20,214,386 | | Average for Non-PEO NEOs | 2021 | 2022 | 2023 | 2024 | 2025 | | Plus: Fair Value for Equity Awards Granted in the Covered Year that are Unvested at End of Year | $1,212,976 | $3,242,092 | $2,390,255 | $5,931,230 | $6,682,855 | | Change in Fair Value of Outstanding Unvested Equity Awards from Prior Year | $(1,003,521) | $(2,220,401) | $1,799,119 | $5,902,078 | $3,302,634 | | Change in Fair Value of Equity Awards from Prior Years that Vested in the Covered Year | $98,007 | $(808,616) | $1,831,231 | $2,624,886 | $1,809,328 | | Total Adjustment | $307,462 | $213,075 | $6,020,605 | $14,458,194 | $11,794,817 |

  44. PAY VERSUS PERFORMANCE

    (3) The dollar amounts reported in column (d) represent the average of the amounts reported for the Company’s named executive officers (NEOs) as a group (excluding Mr. Trefler, who has served as our CEO in each of the covered years) in the “Total” column of the Summary Compensation Table in each applicable year. The names of each of the NEOs (excluding Mr. Trefler) included for purposes of calculating the average amounts in each applicable year are as follows: (i) for 2025, 2024, 2023 and 2022, Kenneth Stillwell, Rifat Kerim Akgonul, John Gerard Higgins, and Leon Trefler and (ii) for 2021, Kenneth Stillwell, Rifat Kerim Akgonul, Michael Pyle, Hayden Stafford, and Leon Trefler. Refer to “Executive Compensation – Summary Compensation Table.” (4) Company TSR is calculated to show the cumulative shareholder return on our common stock during the covered period, assuming an investment of $100 on December 31, 2020 and the reinvestment of dividends. (5) The peer group used for this purpose is the following published industry index: The Standard & Poor’s North American Technology Sector – Software IndexTM. This is the same published industry index used in the stock performance graph and cumulative total stockholder return in Item 5 of our Annual Report filed on Form 10-K for the year ended December 31, 2025 filed with the SEC on February 10, 2026. Amounts reflect the Total Return Index of the Standard & Poor’s North American Technology Sector – Software IndexTM for each of the last five fiscal years, assuming an investment of $100 on December 31, 2020 (6) The dollar amounts reported represent the amount of net income (loss) reflected in our audited financial statements for the applicable year. (7) ACV growth is the percentage increase in ACV on a constant currency basis compared to the prior year.

  45. Relationship between Compensation Actually Paid and Performance Metrics

    Relationship between Compensation Actually Paid and Performance Metrics The following graph shows the relationship between the amount of compensation actually paid to Mr. Trefler and the average amount of compensation actually paid to the Non-PEO NEOs and the total shareholder return of Pegasystems and its peer group, as set forth in the Pay Versus Performance Table above. The following graph shows the relationship between the amount of compensation actually paid to Mr. Trefler and the average amount of compensation actually paid to the Non-PEO NEOs and Pegasystems’ net income (loss) for each fiscal year, as set forth in the Pay Versus Performance Table above. The following graph shows the relationship between the amount of compensation actually paid to Mr. Trefler and the average amount of compensation actually paid to the Non-PEO NEOs and Pegasystems’ ACV Growth, as set forth in the Pay Versus Performance Table above. We chose ACV Growth as our Company Selected Measure for evaluating Pay Versus Performance because it is a key metric used in our Corporate Incentive Compensation Plan and performance-based stock options.

  46. Pay versus Performance Tabular List

    Pay versus Performance Tabular List The following are our most important performance measures we use to link “Compensation Actually Paid” to our NEOs to our performance, over the year ended December 31, 2025:

  47. Pay versus Performance Tabular List

    | ACV Growth | | Rule of 40 |

  48. Pay versus Performance Tabular List

    The information contained above under the heading “Pay Versus Performance” shall not be incorporated by reference into any future filing under the Securities Act of 1933, as amended, or the Exchange Act except to the extent that we specifically incorporate it by reference in any such filing.