DEF 14A of CrowdStrike Holdings, Inc.
Filed May 5, 2023 · FY20230001104659-23-056548
Proposal 1 Election of Directors
Proposal 1 Election of Directors The Board of Directors of CrowdStrike Holdings, Inc. (the “Board”) is divided into three classes, designated as Class I, Class II and Class III. Each class consists, as nearly as practicable, of one-third of the total number of directors constituting the entire Board, and each class has a three-year term. One class of directors is elected by the stockholders at each annual meeting to serve from the time of their election until the third annual meeting of stockholders following their election. Each director’s term shall continue until the election and qualification of his or her successor, or his or her earlier death, resignation, or removal. Any additional directorships resulting from an increase in the number of authorized directors will be distributed among the three classes so that, as nearly as possible, each class will consist of one-third of the directors. The Board currently has nine members. There are three directors in Class I whose term of office expires in 2023: Johanna Flower, Denis J. O’Leary and Godfrey R. Sullivan. The Board has nominated Johanna Flower, Denis J. O’Leary and Godfrey R. Sullivan for election as Class I directors at the Annual Meeting. Each of the three nominees is currently a director of CrowdStrike. The nominees were recommended for election by the Nominating and Corporate Governance Committee of the Board and the Board has approved such recommendation. If elected at the Annual Meeting, the nominees would serve until the 2026 annual meeting and until their respective successors have been duly elected and qualified, or, if sooner, until the director’s death, resignation or removal. Directors are elected by a plurality of the votes of the holders of shares present online at the meeting or represented by proxy and entitled to vote on the election of directors. The three nominees receiving the highest number of “FOR” votes will be elected.
Proposal 1 Election of Directors
| | THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” EACH NAMED NOMINEE. |
Proposal 1 Election of Directors
Nominees for Director and Continuing Directors The brief biographies below include information, as of the date of this Proxy Statement, regarding the specific and particular experience, qualifications, attributes or skills of the nominees for director. In addition, following the biographies of the nominees are the biographies of Class II and Class III directors containing information regarding each director continuing to serve on the Board. Our directors self-identify as set forth in the table below:
Proposal 1 Election of Directors
| Board Diversity Matrix | | | | | | | | | | | 2023 (as of February 28, 2023) | | | | 2022 (as of March 11, 2022) | | | | | Total Number of Directors: | 9 | | | | 8 | | | | | | Female | Male | Non-Binary | Did Not Disclose Gender | Female | Male | Non-Binary | Did Not Disclose Gender | | Directors | 3 | 6 | - | - | 2 | 6 | - | - | | Number of Directors Who Identify in Any of the Categories Below: | | | | | | | | | | African American or Black | - | - | - | - | - | - | - | - | | Alaskan Native or Native American | - | - | - | - | - | - | - | - | | Asian | - | 1 | - | - | - | 1 | - | - | | Hispanic or Latinx | - | - | - | - | - | - | - | - | | Native Hawaiian or Pacific Islander | - | - | - | - | - | - | - | - | | White | 3 | 5 | - | - | 2 | 5 | - | - | | Two or More Races or Ethnicities | - | - | - | - | - | - | - | - | | LGBTQ+ | 1 | | | | 1 | | | | | Did Not Disclose Demographic Background | - | | | | - | | | |
Proposal 1 Election of Directors
Class I Nominees for Election for a Three-Year Term Expiring at the 2026 Annual Meeting
Proposal 1 Election of Directors
| | Johanna Flower | | | | Background Ms. Flower, 48, has served on our board of directors since January 2023. ➢ From January 2022 to November 2022, Ms. Flower served as CrowdStrike’s Chief Marketing Officer, a role she previously held from November 2014 to August 2020. ➢ From June 2000 to June 2014, Ms. Flower served in various executive roles at Websense Inc., a cybersecurity software company now known as Forcepoint, LLC, where she served most recently as Senior Vice President and Chief Marketing Officer. ➢ Ms. Flower currently serves on the boards of directors of Freshworks, Inc., a provider of modern Software-as-a-Service products; ForgeRock, Inc., a digital identity technology company, and several privately held companies. | | | Education | | Qualifications | | • Ms. Flower holds a B.A. in Business Administration from University of Brighton, United Kingdom. | | Ms. Flower brings to the Board extensive cybersecurity, go-to-market and modern governance experience, and knowledge of our company. |
Proposal 1 Election of Directors
| Chair Nominating and Corporate Governance Committee | Denis J. O’Leary | | | | Background Mr. O’Leary, 66, has served on our board of directors since December 2011. ➢ Mr. O’Leary has been a private investor since January 2016. ➢ From September 2009 to February 2016, he served as co-managing partner of Encore Financial Partners, Inc., a company focused on the acquisition and management of banking organizations. ➢ From June 1978 to April 2003, Mr. O’Leary was with JPM Chase & Co., an investment bank and financial services company, where he served in various executive roles, including Corporate Treasurer, CIO, and Head of Retail and Small Business Banking. ➢ Mr. O’Leary currently serves on the board of directors of Ventiv, Inc., a privately held software company. ➢ Mr. O’Leary previously served as a director and chairman of the board of directors of Fiserv, Inc., a public provider of financial services technology. | | | Education | | Qualifications | | • Mr. O’Leary holds a B.A. in Economics from the University of Rochester and an M.B.A. from New York University. | | Mr. O’Leary brings to the Board and the Nominating and Corporate Governance Committee extensive investment and financial experience, executive experience with global businesses, and knowledge of our company. |
Proposal 1 Election of Directors
| Audit Committee | Godfrey R. Sullivan | | | | Background Mr. Sullivan, 69, has served on our board of directors since December 2017. ➢ From September 2008 to November 2015, he served as President and Chief Executive Officer of Splunk, Inc., a provider of machine data analytics software, and served on the board of directors of Splunk, Inc. from 2011 to 2019. ➢ From 2001 to 2004 he served as President and Chief Operating Officer, and from 2004 to 2007 as President, Chief Executive Officer and a member of the board of directors of Hyperion Solutions, an enterprise financial analytics company. ➢ Mr. Sullivan currently serves on the board of directors of Marqeta, Inc., a modern card issuing company and GitLab, Inc., a DevOps software company. ➢ He previously served on the board of directors of Citrix Systems, Inc., an enterprise software company; Informatica Corporation, an enterprise data management company; and RingCentral, Inc., a provider of cloud-based communications and collaboration solutions. | | | Education | | Qualifications | | • Mr. Sullivan holds a B.B.A. from Baylor University. | | The Board believes Mr. Sullivan’s perspective and experience as a former chief executive officer of other publicly traded companies and his experience as an executive and as a member of the board of directors of other companies in the enterprise software industry benefits the Board and the Audit Committee. |
Proposal 1 Election of Directors
Continuing Directors In addition to the director nominees, CrowdStrike has six other directors who will continue in office after the Annual Meeting with terms expiring in 2024 and 2025. The following includes a brief biography of each continuing director with terms expiring as shown, with each biography including information regarding the experiences, qualifications, attributes or skills that caused the Nominating and Corporate Governance Committee and the Board to determine that the applicable director should serve as a member of our Board. Class II Directors Continuing in Office Until the 2024 Annual Meeting
Proposal 1 Election of Directors
| Chair Audit Committee | Roxanne S. Austin | | | | Background Ms. Austin, 62, has served on our board of directors since September 2018. ➢ Ms. Austin has served as President of Austin Investment Advisors, a private investment and consulting firm, since January 2004, and has also served as chair of the U.S. Mid-Market Investment Advisory Committee of EQT Partners, a private equity group. ➢ Ms. Austin currently serves on the boards of directors of AbbVie Inc., a biopharmaceutical company; Freshworks, Inc., a provider of modern Software-as-a-Service products; and Verizon Communications, a telecommunications company. ➢ She previously served on the board of directors of Abbott Laboratories, a provider of pharmaceuticals, medical devices and nutritional products; Teledyne Technologies Incorporated, an industrial conglomerate; LM Ericsson Telephone Company, a networking and telecommunications company; and Target Corporation, a department store retailer. | | | Education | | Qualifications | | • Ms. Austin holds a B.B.A. in Accounting from the University of Texas at San Antonio. • Ms. Austin is a member of the California State Society of Certified Public Accountants and the American Institute of Certified Public Accountants. | | Ms. Austin’s extensive management and operating experience with global companies in innovative industries, financial expertise including financial statements, corporate finance and accounting matters, and corporate governance experience make her instrumental to our Board and Audit Committee. |
Proposal 1 Election of Directors
| Chair Compensation Committee | Sameer K. Gandhi | | | | Background Mr. Gandhi, 57, has served on our board of directors since August 2013. ➢ Mr. Gandhi is currently a partner for Accel, a venture capital firm that he joined in June 2008, where he focuses on consumer, software and services companies. ➢ Mr. Gandhi currently serves on the board of Freshworks, Inc., a provider of modern Software-as-a- Service products, as well as on the board of directors of several privately-held companies. | | | Education | | Qualifications | | • Mr. Gandhi holds a B.S. and an M.S. in Electrical Engineering and an M.S. in Computer Science from the Massachusetts Institute of Technology and an M.B.A. from the Stanford Graduate School of Business. | | The Board believes Mr. Gandhi’s extensive knowledge of our company and his experience as an investor, including more than twenty years of investing experience in cybersecurity companies and other technology and media companies that have significant worldwide operations, brings specific expertise to the Board and the Compensation Committee. |
Proposal 1 Election of Directors
| Audit Committee Nominating and Corporate Governance Committee | Gerhard Watzinger | | | | Background Mr. Watzinger, 62, has served as Chairman of our board of directors since April 2012. ➢ From April 2013 to September 2013, he served as the Chief Executive Officer for IGATE Corporation, an IT services company. ➢ Mr. Watzinger served as the Executive Vice President for Corporate Strategy and Mergers & Acquisitions of the McAfee business unit of Intel Corporation (“Intel”) a designer and manufacturer of digital technology platforms, until his resignation in March 2012. ➢ Mr. Watzinger joined Intel in February 2011 upon Intel’s acquisition of McAfee. ➢ Mr. Watzinger joined McAfee in November 2007 upon McAfee’s acquisition of SafeBoot Corporation, a global leader in data protection software, where he served as Chief Executive Officer from February 2004 to November 2007. ➢ He currently serves on the board of directors of Mastech Digital, Inc., a digital transformation and information technology services company and Absolute Software Corporation, a persistent software company. ➢ He previously served on the board of directors of KnowBe4, Inc., a security awareness technology company. | | | Education | | Qualifications | | • Mr. Watzinger holds an advanced degree in Computer Science from the University of Applied Sciences in Munich. | | Mr. Watzinger brings to the Board, the Audit Committee, and the Nominating and Corporate Governance Committee deep operational expertise in the cybersecurity and IT industries, including experience as a chief executive officer and board member of several information technology companies, as well as extensive perspective and operational insight as our current Chairman. |
Proposal 1 Election of Directors
Class III Directors Continuing in Office Until the 2025 Annual Meeting
Proposal 1 Election of Directors
| Compensation Committee | Cary J. Davis | | | | Background Mr. Davis, 56, has served on our board of directors since July 2013. ➢ Mr. Davis is a Managing Director at Warburg Pincus, which he joined in October 1994, where he focuses on investments in the software and financial technology sectors. ➢ Prior to joining Warburg Pincus, he was Executive Assistant to Michael Dell at Dell Inc., a multinational computer technology company, and a consultant at McKinsey & Company, a worldwide management consulting firm. ➢ Mr. Davis currently serves on the boards of directors of Clearwater Analytics Holdings, Inc., a Software-as-a-Service investment data platform company and several privately-held companies. | | | Education | | Qualifications | | • Mr. Davis holds a B.A. in Economics from Yale University and an M.B.A. from Harvard Business School. | | Mr. Davis brings to the Board and the Compensation Committee extensive business and investment expertise and his knowledge of our company and our industry. |
Proposal 1 Election of Directors
| | George Kurtz | | | | Background Mr. Kurtz, 52, is one of our co-founders and has served as our Chief Executive Officer, President and a member of our board of directors since November 2011. ➢ From October 2004 to October 2011, Mr. Kurtz served in executive roles at McAfee, Inc., a security technology company, including as Executive Vice President and Worldwide Chief Technology Officer from October 2009 to October 2011. ➢ In October 1999, Mr. Kurtz founded Foundstone, Inc., a security technology company, where he served as its Chief Executive Officer until it was acquired by McAfee, Inc. in October 2004. ➢ Since November 2017, he has also served as Chairman and as a board member for the CrowdStrike Foundation, a nonprofit established to support the next generation of talent and research in cybersecurity and artificial intelligence through scholarships, grants, and other activities. ➢ He served on the board of directors of Hewlett Packard Enterprise, an enterprise information technology company from June 2019 until April 2023. | | | Education | | Qualifications | | • Mr. Kurtz holds a B.S. in Accounting from Seton Hall University. • Mr. Kurtz also holds a CPA license from the State of New Jersey with an inactive status. | | The Board believes Mr. Kurtz provides valuable insight to the Board as a security industry pioneer with more than 30 years of experience in the security space, a technology business leader, and as an accomplished entrepreneur who has accumulated extensive perspective, operational insight, and expertise as our co-founder, Chief Executive Officer and President. |
Proposal 1 Election of Directors
| Nominating and Corporate Governance Committee | Laura J. Schumacher | | | | Background Ms. Schumacher, 59, has served on our board of directors since November 2020. ➢ From December 2018 to December 2022, Ms. Schumacher served as the Vice Chairman, External Affairs and Chief Legal Officer of AbbVie, Inc. ➢ Prior to that, Ms. Schumacher served as Executive Vice President, External Affairs, General Counsel and Corporate Secretary of AbbVie, Inc. since 2013. ➢ Prior to AbbVie’s separation from Abbott Laboratories, Ms. Schumacher served in various leadership positions at Abbott, including as Executive Vice President, General Counsel from 2007 to 2012. ➢ Ms. Schumacher currently serves on the board of directors of General Dynamics Corporation, a global aerospace and defense company; the Board of Trustees for Ronald McDonald House Charities; and the Notre Dame Law School Advisory Board. | | | Education | | Qualifications | | • Ms. Schumacher holds a B.B.A. from the University of Notre Dame and a J.D. from the University of Wisconsin at Madison. | | Ms. Schumacher brings to the Board and Nominating and Corporate Governance Committee extensive experience with respect to risk management and the types of legal and regulatory risks facing public companies, as well as an important understanding of corporate governance matters and complex corporate transactions. |
Information Regarding the Board of Directors and Corporate Governance
Information Regarding the Board of Directors and Corporate Governance Independence of the Board of Directors As required under Nasdaq listing standards, a majority of the members of a listed company’s board of directors must qualify as “independent,” as affirmatively determined by the board. Our Board consults with CrowdStrike’s counsel to ensure that the Board’s determinations are consistent with relevant securities and other laws and regulations regarding the definition of “independent,” including those set forth in pertinent listing standards of Nasdaq, as in effect from time to time. Under the rules of Nasdaq, subject to specified exceptions, each member of a listed company’s audit, compensation and nominating and corporate governance committees must be independent. Under the rules of Nasdaq, a director will only qualify as an “independent director” if, in the opinion of that company’s board of directors, that person does not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. Compensation committee members must not have a relationship with us that is material to the director’s ability to be independent from management in connection with the duties of a compensation committee member. Additionally, audit committee members must also satisfy the independence criteria set forth in Rule 10A-3 under the Securities Exchange Act of 1934 (the “Exchange Act”). In order to be considered independent for purposes of Rule 10A-3, a member of an audit committee of a listed company may not, other than in his or her capacity as a member of the board of directors or a committee of the board, accept, directly or indirectly, any consulting, advisory or other compensatory fee from the listed company or any of its subsidiaries or be an affiliated person of the listed company or any of its subsidiaries. Our Board has undertaken a review of the independence of each director and considered whether each director has a material relationship with us that could compromise his or her ability to exercise independent judgment in carrying out his or her responsibilities. Based upon information requested from and provided by each director concerning their background, employment and affiliations, including family relationships and as a result of this review, our Board determined that each of Roxanne S. Austin, Cary J. Davis, Sameer K. Gandhi, Denis J. O’Leary, Laura J. Schumacher, Godfrey R. Sullivan and Gerhard Watzinger, representing seven of our nine directors, does not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director and is an “independent director” as defined under the applicable rules and regulations of the Securities and Exchange Commission (the “SEC”) and the listing requirements and rules of Nasdaq. Due to Johanna Flower’s previous employment with the Company, Ms. Flower is not currently independent under applicable Nasdaq listing rules. In making this determination, our Board considered the current and prior relationships that each non-employee director has with our company and all other facts and circumstances our Board deemed relevant in determining their independence, including the beneficial ownership of our capital stock by each non-employee director. Board Leadership Structure Our Board has an independent Chair, Mr. Watzinger, who has authority, among other things, to call and preside over Board meetings, including meetings of the independent directors, as well as the authority to call special meetings of the stockholders. Accordingly, the Chair of the Board has substantial ability to shape the work of the Board. We believe that separation of the positions of the Chair and Chief Executive Officer reinforces the independence of the Board in its oversight of the business and affairs of the Company. In addition, we believe that having an independent Chair creates an environment that is more conducive to objective evaluation and oversight of management’s performance, increasing management accountability and improving the ability of the Board to monitor whether management’s actions are in the best interests of the Company and its stockholders. As a result, we believe that having an independent Chair can enhance the effectiveness of the Board as a whole. We believe that the leadership structure of our Board, including Mr. Watzinger’s role as Chair, as well as the strong independent committees of our Board, is appropriate and enhances our Board’s ability to effectively carry out its roles and responsibilities on behalf of our stockholders. Role of the Board in Risk Oversight Risk is inherent with every business, and we face a number of risks, including strategic, financial, business and operational, cybersecurity, legal and compliance, and reputational risks, in the pursuit and achievement of our strategic objectives. We have designed and implemented processes to manage risk in our operations. Management is responsible for the day-to-day oversight and management of strategic, operational, legal and compliance, cybersecurity, and financial risks, while our Board, as a whole and assisted by its committees, has responsibility for the oversight of our risk management framework, which is designed to identify, assess, and manage risks to which our Company is exposed, as well as foster a corporate culture of integrity. Consistent with this approach, our Board regularly reviews our strategic and operational risks in the context of discussions with management, question and answer sessions, and reports from the management team at each regular board meeting. Our Board also receives regular reports on all significant committee activities at each regular board meeting and evaluates the risks inherent in significant transactions. In addition, our Board has tasked designated standing committees with oversight of certain categories of risk management. Our Audit Committee assists our Board in fulfilling its oversight responsibilities with respect to risk assessment and risk management, including the Company’s policies and practices pertaining to financial accounting, investment, tax, and cybersecurity matters, and discusses with management the Company’s major financial risk exposures. Our Compensation Committee reviews and assesses risks arising from the Company’s employee compensation policies and practices and whether any such risks are reasonably likely to have a material adverse effect on the Company. The Nominating and Corporate Governance Committee monitors the effectiveness of our corporate governance guidelines and policies. Our Board believes its current leadership structure supports the risk oversight function of the Board. Family Relationships There are no family relationships among the directors and executive officers. Meetings of the Board of Directors The Board met eight times during fiscal 2023. Each Board member attended 75% or more of the aggregate number of meetings of the Board and of the committees on which he or she served that were held during the portion of the last fiscal year for which he or she was a director or committee member. We do not currently have a policy relating to director attendance, but the Company’s directors are encouraged to attend our annual meetings of stockholders. All of our then-directors attended our 2022 Annual Meeting of Stockholders. Information Regarding Committees of the Board of Directors The Board has three committees: an Audit Committee, a Compensation Committee and a Nominating and Corporate Governance Committee.
Information Regarding the Board of Directors and Corporate Governance
Each committee has authority to engage legal counsel or other experts or consultants, as it deems appropriate to carry out its responsibilities. The Board has determined that each member of each committee meets the applicable Nasdaq rules and regulations regarding “independence,” that each Audit Committee member meets the applicable rules for financial literacy under the rules and regulations of Nasdaq and the SEC, and that each member is free of any relationship that would impair that member’s individual exercise of independent judgment with regard to the Company. Our Board has also determined that Roxanne S. Austin qualifies as an “Audit Committee financial expert” as defined in the SEC rules and satisfies the financial sophistication requirements of Nasdaq.
Information Regarding the Board of Directors and Corporate Governance
| Audit Committee | Meetings in FY2023: 8 | | Members | | | ➢ Roxanne S. Austin, Chair ➢ ➢ Godfrey R. Sullivan ➢ Gerhard Watzinger | Our Audit Committee is comprised of Roxanne S. Austin, Godfrey R. Sullivan, and Gerhard Watzinger, each of whom meets the requirements for independence under Nasdaq listing standards and SEC rules and regulations. | | Principal Responsibilities | | | The Audit Committee is responsible for, among other things: • selecting and hiring our independent registered public accounting firm; | | | • evaluating the performance and independence of our registered public accounting firm; • approving the audit and pre-approving any non-audit services to be performed by our registered public accounting firm; • reviewing the integrity of our financial statements and related disclosures and reviewing our critical accounting policies and practices; • reviewing the adequacy and effectiveness of our internal control policies and procedures and our disclosure controls and procedures; • evaluating the performance of our internal audit function; • overseeing procedures for the treatment of complaints on accounting, internal accounting controls or audit matters; • reviewing and discussing with management and the independent registered public accounting firm the results of our annual audit, our quarterly financial statements and our publicly filed reports; • establishing procedures for employees to anonymously submit concerns about questionable accounting or audit matters; • assessing and managing risks, including with respect to financial accounting, investment, tax, and cybersecurity matters; • reviewing and approving in advance any proposed related-person transactions; and • preparing the Audit Committee report that the SEC requires in our annual proxy statement. | | | Our Audit Committee operates under a written charter that satisfies the applicable rules and regulations of the SEC and the listing standards of Nasdaq. A copy of the charter for our Audit Committee is available on our website at ir.crowdstrike.com. | |
Information Regarding the Board of Directors and Corporate Governance
Report of the Audit Committee of the Board of Directors The Audit Committee has reviewed and discussed the audited financial statements for the fiscal year ended January 31, 2023 with management of the Company. The Audit Committee has discussed with the Company’s independent registered public accounting firm, PricewaterhouseCoopers LLP, the matters required to be discussed by the Public Company Accounting Oversight Board (“PCAOB”) and the SEC. The Audit Committee has also received the written disclosures and the letter from PricewaterhouseCoopers LLP required by applicable requirements of the PCAOB regarding the independent accountants’ communications with the Audit Committee concerning independence and has discussed with PricewaterhouseCoopers LLP the accounting firm’s independence. Based on the foregoing, the Audit Committee recommended to the Board that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2023. Respectfully submitted by the members of the Audit Committee of the Board. Roxanne S. Austin Godfrey R. Sullivan Gerhard Watzinger This report of the Audit Committee is required by the SEC and, in accordance with the SEC’s rules, will not be deemed to be part of or incorporated by reference by any general statement incorporating by reference this Proxy Statement into any filing under the Securities Act of 1933, as amended (the “Securities Act”), or under the Exchange Act, except to the extent that we specifically incorporate this information by reference, and will not otherwise be deemed “soliciting material” or “filed” under either the Securities Act or the Exchange Act.
Information Regarding the Board of Directors and Corporate Governance
| Compensation Committee | Meetings in FY2023: 7 | | Members | | | ➢ Sameer K. Gandhi, Chair ➢ Cary J. Davis | Our Compensation Committee is comprised of Sameer K. Gandhi and Cary J. Davis, each of whom is a non-employee director and meets the requirements for independence under the current Nasdaq listing standards and SEC rules and regulations. | | Principal Responsibilities | | | The Compensation Committee is responsible for, among other things: • determining, or recommending to the board for determination, the compensation of our executive officers, including our Chief Executive Officer; • overseeing and setting compensation for the members of our Board; • administering our equity compensation plans; • reviewing matters related to human capital resources, including employee development, engagement and wellbeing; • overseeing our overall compensation policies and practices, compensation plans, and benefits programs; and • reviewing management succession planning. | | | In addition, the Compensation Committee reviews with management the Company’s Compensation Discussion and Analysis. Our Compensation Committee operates under a written charter that satisfies the applicable rules and regulations of the SEC and the listing standards of Nasdaq. A copy of the charter for our Compensation Committee is available on our website at ir.crowdstrike.com. | | | The Compensation Committee has also delegated authority to our Chief Executive Officer and Chief Financial Officer to grant equity awards to employees subject to certain limitations established from time to time by the Compensation Committee. | |
Information Regarding the Board of Directors and Corporate Governance
Compensation Committee Interlocks and Insider Participation None of our executive officers currently serves or served during fiscal 2023 as a director or member of the Compensation Committee (or other board committee performing equivalent functions) of any entity that has or had, at the relevant time, one or more executive officers serving on our Compensation Committee or our Board.
Information Regarding the Board of Directors and Corporate Governance
| Nominating and Corporate Governance Committee | Meetings in FY2023: 4 | | Members | | | ➢ Denis J. O’Leary, Chair ➢ Laura J. Schumacher ➢ Gerhard Watzinger | Our Nominating and Corporate Governance Committee is comprised of Denis J. O’Leary, Laura J. Schumacher, and Gerhard Watzinger, each of whom meets the requirements for independence under Nasdaq listing standards and SEC rules and regulations. Gerhard Watzinger joined the committee in April 2022. | | Principal Responsibilities | | | The Nominating and Corporate Governance Committee is responsible for, among other things: • evaluating and making recommendations regarding the composition, organization and governance of our Board and its committees; • reviewing and making recommendations with regard to our corporate governance guidelines and compliance with laws and regulations; • reviewing conflicts of interest of our directors and corporate officers and proposed waivers of our corporate governance guidelines and our code of business conducts and ethics; • reviewing our environmental, social and governance policies, programs and progress to support the sustainable growth of our business; and • evaluating the performance of our Board and of our committees. | | | Our Nominating and Corporate Governance Committee operates under a written charter that satisfies the applicable Nasdaq listing standards. A copy of the charter for our Nominating and Corporate Governance Committee is available on our website at ir.crowdstrike.com. | |
Information Regarding the Board of Directors and Corporate Governance
Considerations in Evaluating Director Nominees Our Nominating and Corporate Governance Committee uses a variety of methods to identify and evaluate director nominees. In its evaluation of director candidates, our Nominating and Corporate Governance Committee considers the current size and composition, organization, and governance of our Board and the needs of our Board and the respective committees of our Board. Some of the qualifications that our Nominating and Corporate Governance Committee considers include, without limitation, issues of character, integrity, judgment, business experience, and diversity, and with respect to diversity, such factors as gender, race, ethnicity, differences in professional background, education, skill and other individual qualities and attributes that contribute to the total mix of viewpoints and experience represented on the Board, potential conflicts of interest and other commitments. Nominees must also have the highest personal and professional ethics and the ability to offer advice and guidance to our Chief Executive Officer and other members of management based on proven achievement and leadership in the companies or institutions with which they are affiliated. Director candidates must understand the fiduciary responsibilities that are required of a member of our Board and have sufficient time available in the judgment of our Nominating and Corporate Governance Committee to perform all Board and committee responsibilities. Members of our Board are expected to prepare for, attend, and participate in all Board and applicable committee meetings. Our Nominating and Corporate Governance Committee may also consider such other factors as it may deem, from time to time, are in our and our stockholders’ best interests. Our Board conducts an annual evaluation of the performance of individual directors, the Board as a whole, and each of the Board’s standing committees, including an evaluation of the qualifications of individual members of the Board and its committees. The evaluation is conducted via a list of questions that are provided to each director. The results of the evaluation and any recommendations for improvement are provided orally to our Board and the other standing committees of the Board either by the Chair of the Board or our outside counsel. The Nominating and Corporate Governance Committee considers the suitability of each director candidate, including current directors, in light of the current size and composition of our Board. Although we do not maintain a specific policy with respect to board diversity, our Board believes that our Board should be a diverse body, and our Nominating and Corporate Governance Committee considers a broad range of backgrounds and experiences. In making determinations regarding nominations of directors, our Nominating and Corporate Governance Committee may take into account the benefits of diverse viewpoints. Our Nominating and Corporate Governance Committee also considers these and other factors as it oversees the annual director and committee evaluations. Our Nominating and Corporate Governance Committee also considers applicable laws and regulations, including those relating to gender diversity and representation from underrepresented communities. After completing its review and evaluation of director candidates, our Nominating and Corporate Governance Committee recommends to our full Board the director nominees for election. Stockholder Nominations to the Board of Directors The Nominating and Corporate Governance Committee will consider director candidates nominated by stockholders so long as such nominations comply with our amended and restated certificate of incorporation, amended and restated bylaws, and applicable laws, rules and regulations that govern stockholders making nominations. Our Nominating and Corporate Governance Committee will evaluate such candidates in accordance with its charter, our amended and restated bylaws and our policies and procedures for director candidates, as well as the regular director nominee criteria described above. There is no difference in the evaluation process of a candidate recommended by a stockholder as compared to the evaluation process of a candidate identified by any of the other means described above. This process is designed to ensure that our Board includes members with diverse backgrounds, skills, and experience, including appropriate financial and other expertise relevant to our business. Eligible stockholders wishing to nominate a candidate to our Board should contact the Chief Legal Officer — Proxy at CrowdStrike Holdings, Inc., 206 E. 9th Street, Suite 1400, Austin, Texas 78701. To be timely for the 2024 Annual Meeting of Stockholders, nominations must be received by our Chief Legal Officer observing the same deadlines for stockholder proposals discussed below under “Questions and Answers about these Proxy Materials and Voting — When are stockholder proposals and director nominations due for next year’s annual meeting?” Stockholder Communications with the Board of Directors Our relationship with our stockholders is an important part of our corporate governance program. Engaging with our stockholders helps us to understand how they view us, to set goals and expectations for our performance, and to identify emerging issues that may affect our strategies, corporate governance, compensation practices or other aspects of our operations. Our stockholder and investor outreach includes investor road shows, analyst meetings, and investor conferences and meetings. We also communicate with stockholders and other stakeholders through various media, including our annual report and SEC filings, proxy statement, news releases and our website. Our conference calls for quarterly earnings releases are open to all. These calls are available in real time and as archived webcasts on our website for a period of time. Interested parties wishing to communicate with non-management members of our Board may do so by writing and mailing the correspondence to Chief Legal Officer — Proxy at CrowdStrike Holdings, Inc., 206 E. 9th Street, Suite 1400, Austin, Texas 78701. Each communication should set forth, as relevant (i) the name and address of the stockholder, as it appears on our books, and if the shares of our common stock are held by a nominee, the name and address of the beneficial owner of such shares, and (ii) the class and number of shares of our common stock that are owned of record by the record holder and beneficially by the beneficial owner. Our legal department, in consultation with appropriate members of our Board as necessary, will review all incoming communications and, if appropriate, such communications will be forwarded to the appropriate member or members of our Board, or if none are specified, to the Chair of our Board. Communications are distributed to the Board, or to any individual director as appropriate depending on the facts and circumstances outlined in the communication. In that regard, the Board has requested that certain items which are unrelated to the duties and responsibilities of the Board should be excluded. In addition, material that is unduly hostile, threatening, illegal or similarly unsuitable will be excluded, with the provision that any communication that is filtered out must be made available to any non-management director upon request. Every effort has been made to ensure that the views of stockholders are heard by the Board or individual directors, as applicable, and that appropriate responses are provided to stockholders in a timely manner. Stockholder Engagement We value the views of our stockholders. We believe stockholder engagement helps us understand stockholder perspectives and priorities and gives us an opportunity to take stockholder viewpoints into account as we review and evolve our practices and disclosures.
Information Regarding the Board of Directors and Corporate Governance
We initiated our stockholder engagement program in late 2021. Since our 2022 annual meeting of stockholders, as part of this process, we sought meetings with or met with 95% of our top 20 investors, excluding our affiliates. Through this program, our team met with governance professionals from active and passive funds as well as portfolio managers from active funds. Topics discussed included, but were not limited to: • Environmental disclosures; • Executive compensation; • Human capital matters, including diversity, equity and inclusion; and • Corporate governance. Senior representatives from CrowdStrike’s human resources, investor relations and legal teams attended these meetings and communicated stockholder feedback to our Board members for them to take into account as appropriate. We expect to continue to expand our engagement program to maintain an open dialogue and ensure that we have an understanding of our stockholders’ perspectives. Aside from our stockholder engagement program, we also engage with stockholders via quarterly earnings calls, analyst meetings, investor road shows, industry conferences and company-hosted events. Corporate Governance Guidelines and Code of Business Conduct and Ethics Our Board has adopted Corporate Governance Guidelines that address items such as the qualifications and responsibilities of our directors and director candidates, including independence standards, and corporate governance policies and standards applicable to us in general. In addition, our Board has adopted a Code of Business Conduct and Ethics that applies to all our employees, officers and directors, including our Chief Executive Officer, Chief Financial Officer and other executive and senior financial officers. The full text of our Corporate Governance Guidelines and our Code of Business Conduct and Ethics is posted on our website at ir.crowdstrike.com. We will post amendments to our Code of Business Conduct and Ethics or any waivers of our Code of Business Conduct and Ethics for directors and executive officers on the same website or in filings under the Exchange Act. Environmental, Social and Governance CrowdStrike believes creating positive, global impact begins with us and that starts with our responsibility to our customers because protecting our customers means protecting the integrity and securing the infrastructure of businesses across the globe. It not only requires strengthening our commitment to fighting adversaries every single day but the courage to hold ourselves accountable to being the change we want to see in the world. Our social impact efforts are led by our executive leadership team and are reviewed by the Nominating and Corporate Governance Committee of our Board of Directors. We are proud to earn recognition for our efforts through accolades such as being named to the 2023 Fortune 100 Best Companies to Work For®, 2022 Fortune Best Workplace for Women™, 2022 Great Place to Work’s Best Workplaces™ for Parents lists, and receiving a perfect score on the Human Rights Campaign Foundation’s 2022 Corporate Equality Index for two consecutive years. Sustainability As an organization that allows for both remote and hybrid working arrangements, we can hire the best and the brightest wherever they are. This helps reduce our environmental footprint by decreasing long commutes and the impact that comes with operating a large number of physical offices. Furthermore, a majority of our leased offices larger than 2,000 square feet are located in buildings that have received environmental certifications, including Leadership in Energy and Environmental Design (LEED), Building Research Establishment Environmental Assessment Method (BREEAM) and Energy Star certifications. We have focused our efforts for CrowdStrike data centers with environmental considerations in mind. We have chosen locations with more sustainable power with a lower carbon footprint and have provided funds to partially offset our data center emissions. We also have chosen servers whenever possible with lower power demands and we adjust power to our servers based on demand to minimize energy utilized. We are working to systematize our metrics and reporting to ensure we are following best practices and so we can measure our impact over time. We are also developing additional plans to optimize our carbon footprint and are working with ClimeCo to reduce our business travel footprint, continuing to provide funds to offset the environmental impact of business flights in fiscal 2023 for the third consecutive year. In addition, in connection with Earth Day 2022, we hosted various employee volunteer events to support environmental efforts in our local communities and contributed to several environmental nonprofit organizations, including the Surfrider Foundation, Environmental Volunteers and the World Wildlife Fund. Diversity, Equity and Inclusion We are committed to fostering a work environment and culture where employees are able to be their best selves, be productive and be empowered to succeed. We believe a diverse, equitable, and inclusive culture fuels creativity and innovation and promotes an environment where people can do their best work. Over the past few years, we have implemented and built upon a number of initiatives to celebrate differences and to foster inclusivity, including supporting eight employee resource groups, providing resources and championing training on inclusion, understanding bias, and increased cultural competence while creating networking opportunities for all to come together to collaborate, build community and create opportunities for development. By prioritizing diversity, equity and inclusion within our mission and core values, we strive to improve the way we operate as a global company, not only as an employer but also among our suppliers and community. CrowdStrike is proud to partner with small businesses including companies owned by BIPOC, LGBT*, veterans and women. Accessibility CrowdStrike takes accessibility of its products very seriously, with dedicated accessibility specialists on staff as part of a program of continuous education on accessible design and engineering for those working on our customer-facing user-interfaces. In particular, we focus on screen reader compatibility for visually impaired users and color/contrast configurability to optimize our experience for various classes of color-blindness. Our quality assurance team is also trained and equipped to assist with testing for accessibility and we work with external accessibility auditors to help identify any deficiencies. We aim to ensure that the majority of our product portfolio is Web Content Accessibility Guidelines 2.0-AA / Section 508 compliant and we have invested and intend to continue to invest in continuously improving the accessibility of our products for differently abled users. Governance We strive to maintain high governance standards. Our commitment to effective corporate governance is illustrated by the following practices: • Seven out of nine of our directors are independent. • The Chairperson of our Board is independent. • All of our Board committees are comprised of independent directors. • Our Board and Board committees perform annual self-assessments. • The leadership structure of our Board is reviewed annually. Our independent directors regularly meet in executive session. Our Board and Board committees may hire outside advisors independently of management. • Our insider trading policy contains anti-hedging and anti-pledging provisions. • We have not adopted a “poison pill” stockholder rights plan. Data Privacy and Protection
Information Regarding the Board of Directors and Corporate Governance
At CrowdStrike, we are in the business of data protection. We have a dedicated privacy team that partners with our security and legal teams to maintain a comprehensive program. We believe that cybersecurity is fundamental to data protection, and proper data protection is critical for all. We stop breaches and understand profoundly how critical cybersecurity is, not only to compliance but to protecting privacy. This is why we: • Uphold the privacy principles of lawfulness, fairness and transparency, purpose limitation, data minimization, accuracy, and accountability. • Incorporate Privacy-by-Design into the development of our offerings. • Provide strong data protection commitments to our customers in our Global Data Protection Agreement. • Require annual privacy training for all of our employees. • Provide data processing transparency through our offerings and customer documentation. • Mandate strict privacy commitments from our vendors and suppliers. • Incorporate privacy considerations into our technology strategy and business decisions. • Maintain global privacy notices designed to inform our employees and our customers of our commitments. Information Security The CrowdStrike information security program is made up of industry experts from varied technology specialties and located throughout the world. The multidisciplinary team is organized into multiple sub-teams focused on defensive measures or simulated attacks and engaged in a continuous communication feedback loop, designed with the same guiding security principles and industry-leading tooling that we bring to all of our customers. Some information security program highlights include: • We maintain a 24x7x365 staffing program, resulting in rapid security incident response times and resolution. • Through heavy utilization of automation, our security teams are able to effectively scale security operational presence across the organization, reducing human error and freeing up staff to focus on higher value, higher-priority work. • Zero Trust security framework principles are applied to our user access security model, continuously assessing and validating configurations and security posture before granting access to sensitive applications and data. • Our teams engage in cross-organization exercises to ensure response plans are clearly established. • All CrowdStrike personnel, including contractors, must undergo background checks. • Our programs and systems undergo rigorous audits (including SOC II and FedRAMP) by independent organizations which help validate the security posture. • The Security Architecture team is embedded in key processes across the organization to promote secure business growth. • Our internal security testing team engages with external parties to validate our external and internal security posture through bi-annual penetration testing led by top-tier security firms as well as actively engaging with the researcher community via the CrowdStrike Bug Bounty program. All CrowdStrike employees are required to take annual information security and compliance training. Securing our Future We are committed to protecting local and global communities by investing in programs that keep our industry secure, help advance important causes and that nurture the next generation of talent. CrowdStrike funds a variety of scholarships and grants to help develop the next generation of talent and resources in cybersecurity and artificial intelligence (“AI”) across the globe through the CrowdStrike Foundation, corporate-directed giving and corporate-matching. Major programs include: • NextGen Scholarship Program for undergraduate and graduate students studying cybersecurity and/or AI. • Philanthropic investments in our communities through our support of more than 200 nonprofits globally, including: Operation Motorsport Foundation, Arkwright Engineering Scholarships program, India STEM Foundation, University of Texas WiSTEM, Code.org, Learning for All, and Fundación Balia por la Infancia. • Paid time off through our CrowdStrike Cares program to support local communities through philanthropy, volunteering, and other activities. During fiscal 2023, CrowdStrike donated to support the advancement of women and underrepresented groups, including donations to the Thurgood Marshall College Fund, Dream Girl Foundation, NPower and more. CrowdStrike also provided select nonprofit organizations with access to its Falcon platform pro bono.
Director Compensation
Director Compensation The Compensation Committee evaluates the appropriate level and form of compensation for non-employee directors and recommends compensation changes to the Board when appropriate. Under our Outside Director Compensation Policy (as amended, the “Policy”), our non-employee directors receive equity awards and cash retainers as compensation for service on our Board and its committees. This Policy is intended to enable us to attract qualified directors, provide them with compensation at a level that is consistent with our compensation objectives and, in the case of equity-based compensation, align their interests with those of our stockholders. The Policy was updated in fiscal 2023. Under this Policy, non-employee directors receive the following annual cash retainers, payable in quarterly installments: • Non-executive board chair: $50,000 • Board member: $40,000 • Audit committee chair: $25,000 • Audit committee member: $10,000 • Compensation committee chair: $19,000 • Compensation committee member: $9,500 • Nominating and corporate governance committee chair: $10,000 • Nominating and corporate governance committee member: $5,000 Non-employee directors may elect to receive such annual cash retainers in the form of shares of Class A common stock. Non-employee directors also receive equity-based compensation in the form of RSUs with respect to shares of Class A common stock granted pursuant to our Amended and Restated 2011 Equity Incentive Plan (“2011 Plan”) and our 2019 Equity Incentive Plan (“2019 Plan”). Each non-employee director will be automatically granted the following awards upon first joining our Board: • an initial RSU award with a grant date fair value of $375,000, vesting annually over three years, subject to continued service on the Board; plus • an annual RSU award with a grant date fair value of $230,000, pro-rated based on the director’s length of service prior to the next annual meeting of stockholders. This award will vest on the earlier of (i) the date of the next annual meeting of stockholders held after the director first joins the Board or (ii) the date on which the other directors’ annual awards described below for such year vest, subject to continued service on the Board. On the day of the Annual Meeting, each continuing non-employee director will be granted: • an annual RSU award with a grant date fair value of $230,000, vesting in full on the earlier of (i) the one-year anniversary of the date of grant or (ii) the date of the next annual meeting of stockholders held after the date of grant, in each case, subject to continued service on the Board. In the event of a change in control (as defined under the 2019 Plan), all of our non-employee directors’ equity awards will become fully vested, subject to such non-employee director’s continuous service through the date of such change in control. In addition, we reimburse all our directors for their reasonable travel expenses incurred in attending meetings of our Board or committees as well as pre-approved out of pocket expenses to attend director continuing education events. Our non-employee directors may also be eligible to receive other compensation and benefits, including reasonable personal benefits and perquisites such as health insurance coverage, as determined by us from time to time. Our 2019 Plan contains maximum limits, which were approved by our stockholders prior to our 2019 Plan becoming effective, on the aggregate amount of cash compensation and equity awards that can be paid, issued or granted to each of our non-employee directors in any fiscal year, but those maximum limits do not reflect the intended size of any potential payments or grants or a commitment to make any payments or equity award grants to our non-employee directors in the future, other than as set forth in the Policy. The following table reflects information regarding the compensation of our non-employee directors for fiscal 2023.
Director Compensation
| Name | Fees Earned or Paid in Cash ($) (1) | Stock Awards ($) (2) | Option Awards ($) | All Other Compensation ($) (3) | Total Compensation ($) | | Roxanne S. Austin | 61,875 | 229,954 | - | 18,220 | 310,048 | | Cary J. Davis | 45,958 | 229,954 | - | - | 275,912 | | Johanna Flower (4) | 3,333 | 440,966 | - | - | 444,299 | | Sameer K. Gandhi | 54,625 | 229,954 | - | - | 284,579 | | Denis J. O’Leary | 47,292 | 229,954 | - | - | 277,245 | | Laura J. Schumacher | 41,875 | 229,954 | - | - | 271,829 | | Godfrey R. Sullivan | 47,292 | 229,954 | - | - | 277,245 | | Gerhard Watzinger | 101,208 | 229,954 | - | 18,220 | 349,381 |
Director Compensation
(1) Non-employee directors may elect to receive their annual cash retainer in the form of shares of Class A common stock. The following table provides the number of shares of Class A common stock received in lieu of cash by each non-employee director for fiscal 2023:
Director Compensation
| Name | Shares of Class A Common Stock Received | | Cary J. Davis | 93 | | Johanna Flower | 25 | | Sameer K. Gandhi | 111 | | Denis J. O’Leary | 94 | | Laura J. Schumacher | 84 | | Gerhard Watzinger | 197 |
Director Compensation
(2) The amounts in this column reflect the grant date fair values of the restricted stock units granted to our non-employee directors during fiscal 2023, calculated in accordance with FASB ASC Topic 718, excluding the effect of estimated forfeitures and the value of restricted stock units granted in lieu of the director’s annual cash retainer as described in footnote 1 above. The actual value, if any, realized by our non-employee directors for these awards is a function of the value of the shares underlying these awards if and when they vest. For additional information on how we account for equity-based compensation, see Note 7 to our audited consolidated financial statements included in our Annual Report on Form 10-K for fiscal 2023, which was filed with the SEC on March 9, 2023. (3) Each entry represents the value of health insurance benefits provided to the respective director during the fiscal year. (4) Ms. Flower joined the Board of Directors effective as of January 18, 2023. As of January 31, 2023, the aggregate number of shares subject to outstanding equity awards held by our non-employee directors was:
Director Compensation
| Name | Shares Underlying Stock Awards (1) | Shares Underlying Options (2) | | Roxanne S. Austin | 1,307 | 127,188 | | Cary J. Davis | 1,307 | | | Johanna Flower (3) | 4,366 | | | Sameer K. Gandhi | 1,307 | | | Denis J. O’Leary | 1,307 | | | Laura J. Schumacher | 2,123 | | | Godfrey R. Sullivan | 1,307 | | | Gerhard Watzinger | 1,307 | |
Director Compensation
(1) Each entry represents the number of shares underlying any outstanding unvested restricted stock unit award. (2) Each entry represents the aggregate number of any shares underlying unexercised options and any unvested shares acquired upon early exercise of options. Ms. Flower joined the Board of Directors effective as of January 18, 2023.
Compensation Philosophy
Compensation Philosophy At the core of our compensation philosophy, we aim to design our executive compensation programs to attract, motivate and retain the key executives who drive our success while also aligning with company performance and the long-term interests of our stockholders. We believe that a performance-based culture is crucial to our continued growth and success and we achieve our objectives through an executive compensation program that: • Provides a competitive total pay opportunity for top talent who possess the skills, experience and leadership required to drive and grow our business in a dynamic, innovative and extremely competitive environment; • Delivers a significant portion of our executive’s pay through performance-based incentives that are based on the achievement of rigorous financial and operating goals and the performance of our stock price; and • Emphasizes long-term performance, retention and stockholder alignment by significantly weighting our executives’ compensation towards long-term equity incentives, multi-year vesting and challenging performance requirements. In fiscal 2023, we continued to enhance the alignment of our executive compensation programs with our compensation philosophy by delivering a significant portion of our NEOs’ annual compensation through performance-based and long-term incentives. On average, 92% of our NEOs’ annual compensation was tied to long-term incentives. 50% of our NEO’s annual long-term incentive equity awards consisted of performance-based stock units (“PSUs”) and vesting of these PSUs require the achievement of rigorous financial targets. In addition, half of our NEOs’ total compensation is performance-based, with payout or vesting based on the achievement of performance targets. The payout of both annual cash and long-term equity incentive awards are based on achievement of pre-established financial performance goals that place an emphasis on “top-line” revenue growth.
Executive Compensation Practices & Policies
| Summary of Key Compensation Practices | | | | What We Do | | Pay-for-Performance Philosophy. We align pay and performance by awarding a substantial portion of the compensation paid to our executives in the form of “at-risk” performance-based compensation linked to achievement of rigorous performance goals. | | | | Balanced Short-Term and Long-Term Compensation. We grant compensation that discourages short-term risk taking at the expense of long-term results. | | | | Maintain an Independent Compensation Committee. Our Compensation Committee is comprised solely of independent directors with extensive industry experience. | | | | Maintain an Independent Compensation Committee Advisor. The Compensation Committee engages its own independent compensation consultant. | | | | Conduct Annual Compensation Review. The Compensation Committee conducts a review at least annually of our executive compensation philosophy and strategy, including a review of the compensation peer group used for comparative purposes. | | | | Perform Annual Compensation-Related Risk Assessment. We have strong risk and control policies, we take risk management into account in making executive compensation decisions, and we conduct an annual risk assessment of our executive and broad-based compensation programs to promote prudent risk management. | | What We Don’t Do | | | | | | No Special Executive Retirement Plans. We do not offer pension arrangements or retirement plans or similar arrangements with our NEOs that are different from or in addition to those offered to our other employees. | | | | No Excise Tax “Gross-Ups”. We do not provide any “gross-ups” for excise taxes that our employees might owe as a result of the application of Sections 280G or 4999 of the Internal Revenue Code of 1986, as amended (the “IRC”). | | | | No “Single-Trigger” Change in Control Arrangements. Since the time of our IPO, we have not provided for “single-trigger” acceleration of compensation or benefits solely upon a change in control. | | | | No Excessive Perks. We generally do not provide any excessive perquisites to our NEOs. | | | | Do Not Permit Hedging. We prohibit directors and employees, including our NEOs, from hedging CrowdStrike securities. | | | | Do Not Permit Pledging. We prohibit employees, including NEOs, from pledging CrowdStrike securities without the consent of our Legal Department. |
Peer Group Used for Fiscal 2023 Executive Compensation Analysis
Peer Group Used for Fiscal 2023 Executive Compensation Analysis On an annual basis, the Compensation Committee reviews and approves the composition of the peer group used for compensation comparison purposes. In determining if any changes were necessary for fiscal 2023, the Compensation Committee, with the assistance of its independent compensation consultant, Compensia Inc. (“Compensia”), considered the following peer group selection criteria: • Companies in the technology industry, with a preference for “software-as-a-service” (SaaS) and Internet/network security software companies to reflect CrowdStrike’s competition for executive talent • Annual revenue of between approximately 0.5x – 2x of CrowdStrike’s projected fiscal 2023 revenue • Market capitalization between approximately 0.25x – 4x of CrowdStrike’s market capitalization • High-growth companies with strong revenue growth and market capitalization as a multiple of revenue Based on the selection criteria and the Compensation Committee’s assessment: Coupa Software, MongoDB, Paycom Software, RingCentral and Splunk were removed. Slack was also removed due to its acquisition by Salesforce. • Palantir Technologies, Roblox, ServiceNow, Twitter and Zoom Video Communications were added.
Fiscal 2023 Peer Group
Fiscal 2023 Peer Group
Fiscal 2023 Peer Group
| Atlassian | Fortinet | Palo Alto Networks | The Trade Desk | Zoom Video Communications | | Cloudflare | Hubspot | Roblox | Twilio | Zscaler | | Datadog | Okta | ServiceNow | Twitter | | | DocuSign | Palantir Technologies | Snowflake | Unity Software | |
Fiscal 2023 Peer Group
Our continued strong growth trajectory is reflected in our performance relative to our peer group. The following chart shows CrowdStrike’s position within the peer group on three screening criteria, based on each peer company’s publicly reported trailing four quarters financial data as of January 31, 2022.(1)
Fiscal 2023 Peer Group
| | 25th Percentile | 50th Percentile | 75th Percentile | CRWD | | Revenue ($M) | $1,202 | $1,731 | $3,217 | $1,452 45th Percentile | | 1-Year Revenue Growth | 40% | 46% | 59% | 66% 85th Percentile | | Market Cap ($B) | $30.7 | $36.4 | $47.9 | $41.4 61st Percentile |
Fiscal 2023 Peer Group
(1) Financial data per S&P Capital IQ as of January 31, 2022. Market Cap based on the 30-day average as of January 31, 2022.
Compensation-Setting Process
Compensation-Setting Process When determining recommendations for our NEOs’ fiscal 2023 compensation levels, the Compensation Committee considered how our NEOs compared to the compensation levels for comparable positions in the peer group. In addition to referencing data from proxy statements and current reports on Form 8-K filings of our peer group, the Compensation Committee also reviewed survey data drawn from Radford custom peer group surveys as a supplemental data source. The Compensation Committee establishes base salaries, annual cash incentive awards and long-term equity-based incentive awards on a case-by-case basis for each NEO taking into consideration: • Individual performance, role expertise and experience • Company performance • Competitive market conditions • Succession planning • Retention and external opportunities potentially available to our executives • Internal equity among internal peers • Unrealized equity gains • Best compensation governance practices While the Compensation Committee considers a multitude of factors in its deliberations, it places no formal weighting on any one factor. The Compensation Committee does not tie individual compensation to specific target pay percentiles but rather makes a determination based on inputs from the CEO (except with respect to his own compensation), as well as the directors’ knowledge and judgment in assessing the various factors that would best further the principles and objectives of our executive compensation program.
Performance-Based Pay and Goal Setting
| Performance-Based Pay Component | Metrics | Rationale | | Annual Cash Incentive (Corporate Incentive Plan) | Non-GAAP Operating Income Net New ARR Net Retention Rate | Motivates NEO to achieve short-term business objectives that drive growth of the Company Performance-based, not guaranteed | | Performance-Based Stock Units | Revenue Growth Percent Non-GAAP EPS | Aligns our NEOs’ interests with those of our stockholders by focusing on the creation and maintenance of long-term stockholder value |
Annual Cash Incentive Awards
Annual Cash Incentive Awards We use cash incentive awards to motivate our NEOs to achieve our short-term financial objectives while making progress towards our longer-term growth and value creation. Target annual cash incentive opportunities are defined as a percentage of base salary. For fiscal 2023, Mr. Kurtz and Mr. Podbere were eligible to participate in the Company’s Corporate Incentive Plan (“CIP”). Mr. Henry did not participate in the CIP but instead participated in the CrowdStrike Commission Plan (“Commission Plan”). The Compensation Committee determined that given his role and his focus on driving sales and supporting customer needs, Mr. Henry should have short-term incentive opportunities that more closely align with those of his team.
Fiscal 2023 Corporate Incentive Plan (CIP)
Fiscal 2023 Corporate Incentive Plan (CIP) Under the fiscal 2023 CIP, each of Mr. Kurtz and Mr. Podbere had the opportunity to earn between 0% and 150% (subject to the Net Retention Rate modifier, as described below) of their target annual opportunity based on performance against the following three financial targets:
Fiscal 2023 Corporate Incentive Plan (CIP)
| Performance Metrics | Description | | Non-GAAP Operating Income | Profitability Threshold. Non-GAAP operating income is an indicator of profitability that eliminates the effects of events that either are not part of our core operations or are non-cash as well as the impact of income taxes. | | | The CIP is only funded if at least 85% of target is met within the performance period. | | Net New Annual Recurring Revenue (ARR) | Revenue is a primary financial indicator of our growth and stockholder value creation. It is what our investors look to as measures of our success at selling our solutions, innovating and competing in the marketplace. Specifically for the CIP, we focus on net new ARR. | | | The CIP is only funded if at least 80% of our net new ARR target is met within the performance period. Specifically, funding under the CIP as a percentage of our net new ARR target is determined in accordance with the following table: |
Fiscal 2023 Corporate Incentive Plan (CIP)
| Achievement Against Target | Payout | | Less than 80% | No payout | | 80% – 100% | 25% – 100% payout (with linear interpolation between 80% – 100% achievement levels) | | Greater than 100% up to 110% | 1.5x multiplier on over target achievement | | Greater than 110% | 2x multiplier on over-target achievement, capped at 150% payout |
Fiscal 2023 Corporate Incentive Plan (CIP)
| Net Retention Rate | Net Retention Rate is an important indicator of our ability to retain and expand customers and our business health and is used as a modifier to determine the final payout under the CIP. For fiscal 2023, our Net Retention Rate target was 120%. The Committee could exercise discretion to make upward or downward adjustment to the CIP funding by applying a modifier of up to 10%, based on whether the 120% Net Retention Rate target was met. |
Fiscal 2023 Corporate Incentive Plan (CIP)
For fiscal 2023, all three financial targets were measured and the awards under the CIP were paid out on a quarterly basis. Quarterly targets were set by the Compensation Committee in accordance with the process described in “Performance-based Pay and Goal Setting” section. The Compensation Committee believes that these particular metrics and cadence of measurement are most in line with our business cycle, drive performance and more rapidly foster the growth of our business. After considering the market analysis conducted by Compensia and taking into consideration factors described in the “Compensation Setting Process” section, the Compensation Committee recommended to the Board to approve adjusting Mr. Kurtz’s target annual cash bonus opportunity from 100% to 122% and adjusting Mr. Podbere’s target annual cash bonus opportunity from 75% to 100% for fiscal 2023. For fiscal 2023, CrowdStrike exceeded the non-GAAP operating income profitability threshold hurdle of 85% of target for each quarterly performance period.(5) On average, CrowdStrike achieved 110.5% of the quarterly non-GAAP operating income profitability targets during the fiscal year. The aggregate non-GAAP operating income target for the four quarters of fiscal 2023 was $324.0 million. On average, CrowdStrike achieved 98.8% of the quarterly target net new ARR goals during the fiscal year. The aggregate net new ARR target for the four quarters of fiscal 2023 was $848.2 million. Our net retention rate was 125.5%; 127.6%, 127.6% and 125.3% for the first, second, third and fourth quarter of fiscal 2023, respectively, exceeding the target 120% each quarter. The Committee exercised discretion in three quarters, applying a positive adjustment to the final CIP funding amount in such quarters by an average of 8.6%. We are not disclosing the non-GAAP operating income threshold, target net new ARR or funding levels for any quarter because these amounts represent confidential financial information, the disclosure of which would result in competitive harm (for example, by providing insight into our forecasting practices and sales strategies). Non-GAAP operating income is defined as GAAP loss from operations excluding stock-based compensation expense, amortization of acquired intangible assets (including purchased patents), acquisition-related expenses, mark-to-market adjustments on deferred compensation liabilities, and legal reserve and settlement charges. The following table shows Mr. Kurtz and Mr. Podbere’s target bonus opportunity and actual bonus earned for fiscal 2023.
Fiscal 2023 Corporate Incentive Plan (CIP)
| | Fiscal 2023 Targets | | Fiscal 2023 Actuals | | | Name | Target Bonus % of Base | Target Bonus ($) | % Bonus Achieved of Target | Actual Bonus Earned ($) | | Mr. Kurtz | 122% | $1,100,000 | 94.3% | $1,037,307 | | Mr. Podbere | 100% | $600,000 | 94.3% | $565,804 |
Mr. Henry’s Commission Plan Metrics
| Performance Metrics | Description | | ACV Cross-Sales from Service Bookings | Net new platform sales cross-sold from a services engagement during the fiscal year | | ACV Services Booking | Sales of professional services offerings | | ACV of New Logo Sponsor Bookings | New logo subscription bookings closed during the fiscal year sourced directly by Mr. Henry |
Mr. Henry’s Commission Plan Metrics
Target annual quotas were set for each goal, along with a base annual commission rate for bookings up to the target annual quota, to closely align Mr. Henry’s target annual cash incentive opportunity with his role and focus on driving sales and supporting customer needs. The commission rate for bookings in excess of the target annual quota increased based on a sliding-scale of up to 250% of the base commission rate specified for achievement above 110% of the target annual quota. In October 2022, Mr. Henry’s role was updated from “President, CrowdStrike Services and Chief Security Officer” to “Chief Security Officer” as Mr. Henry’s services-related responsibilities were transitioned to another newly promoted executive as a part of and in the context of greater organizational growth, allowing Mr. Henry’s responsibilities to be focused on security matters. As a result, starting in October 2022 Mr. Henry ceased to be credited for ACV Cross-Sales from Services Bookings and ACV Services Bookings, resulting in lower commission payouts than in prior years and relative to Mr. Henry’s target payout. For fiscal 2023, Mr. Henry’s target annual cash incentive opportunity remained unchanged at 100% as a percentage of base salary. The table below sets forth the actual amount of commission incentives earned by Mr. Henry under the Commission Plan for fiscal 2023.
Mr. Henry’s Commission Plan Metrics
| | Fiscal 2023 | | | | Name | Target Bonus Percentage (%) | Target Bonus Payout ($) | Total Actual Bonus Earned ($) | | Mr. Henry | 100% | $600,000 | $445,693 |
Long-Term Equity Incentive Compensation
Long-Term Equity Incentive Compensation Consistent with our philosophy of pay-for-performance, the majority of our NEOs’ annual compensation is provided in the form of long-term equity incentives that emphasizes long-term stockholder value creation and the retention of a strong executive leadership team through a balanced mix of performance-based stock units (PSUs) and service-based RSUs. For fiscal 2023, the PSU performance metrics and weighting between PSUs and RSUs under our long-term equity incentive program remained the same as we believe the current design will align the interests of our NEOs with the interests of our stockholders in creating long-term value. The table below summarizes our fiscal 2022 and fiscal 2023 long-term equity incentive compensation program design.
Long-Term Equity Incentive Compensation
| | FY 2022 and FY 2023 Elements / Metrics / Weightings | | | Performance Stock Unit | Revenue Growth Percentage Non-GAAP EPS | 50% | | Service-based RSU | Four-year graded vesting | 50% |
Long-Term Equity Incentive Compensation
Performance-Based Stock Units Equity awards with performance-based vesting are a substantial, at-risk component of our NEO’s compensation that is tied to CrowdStrike’s business performance. Under the fiscal 2023 PSU plan, the number of PSUs earned depends entirely on CrowdStrike’s actual achievement against two equally weighted metrics — Revenue Growth Percentage (RGP)(6) and non-GAAP EPS measured over a one-year performance period. The thresholds for both performance metrics have to be met before payout begins and there is a cap on the maximum payout at 200%. In fiscal 2023, the threshold achievement for our RGP metric was increased from 35% to 45%. As referenced in the “Performance-based Pay and Goal Setting” section, the targets for our PSUs are intended to be challenging but attainable. As noted in the chart below, relative to our peer group, our RGP metric threshold is above the 25th percentile of our peer group, and the maximum goals are above the 75th percentile of our peer group’s aggregate one year revenue growth. For fiscal 2023, we increased the maximum payout from 150% to 200% in an effort to incentivize and reward superior performance. In addition to performance requirements, the PSUs are subject to service-based vesting. Earned PSUs will vest as follows subject to the NEO’s continued employment with the Company through each applicable vesting date: (i) 25% of the Earned PSUs will vest upon the one year anniversary of the applicable vesting commencement date and (ii) the remaining 75% of the Earned PSUs will vest in equal installments quarterly over the next three years. Service-Based RSUs RSU awards with service-based vesting align the interest of our NEOs with the interests of our stockholders by promoting the stability and retention of high-performing executive team members over the longer term. The RSUs generally vest over a four-year period in sixteen equal quarterly installments, provided the NEO remains employed with the Company though each applicable vesting date. Fiscal 2023 Annual Equity Incentive Awards Taking into consideration the factors described in the “Compensation Setting Process” section, the Compensation Committee recommended the Board approve the following RSU and target PSU awards to our NEOs in fiscal 2023. The Board approved the awards with respect to RGP is defined as the percentage increase of fiscal 2023 revenue relative to fiscal 2022 revenue, excluding the effect of acquisitions. the dollar amounts below, and the actual number of RSUs and target PSUs granted to each NEO was determined by reference to the average closing price of our Class A common stock as reported on the Nasdaq for each of the trading days in the month of March 2022.
Fiscal 2023 Equity Incentive Awards — Annual Awards(1)
Fiscal 2023 Equity Incentive Awards — Annual Awards(1)
Fiscal 2023 Equity Incentive Awards — Annual Awards(1)
| Name | RSUs ($) | Target PSUs ($) | Total ($) | | Mr. Kurtz | $12,500,000 | $12,500,000 | $25,000,000 | | Mr. Podbere | $7,500,000 | $7,500,000 | $15,000,000 | | Mr. Henry | $5,000,000 | $5,000,000 | $10,000,000 |
Fiscal 2023 Equity Incentive Awards — Annual Awards(1)
(1) The above amounts do not represent the actual economic value that may be realized by the NEOs. For more information on the equity incentive awards granted to the NEOs in fiscal 2023, please see the “Grants of Plan-Based Awards Table for Fiscal 2023” below. The table below shows the applicable fiscal 2023 PSU performance metrics and our achievement against them:
Fiscal 2023 Equity Incentive Awards — Annual Awards(1)
| Fiscal 2023 PSU Targets and Results | | | | Metric | Min — Max Achievement Range | Fiscal 2023 Actual Achievement | | Non-GAAP EPS (1) | $1.04 — $1.27 | $1.55 | | Revenue Growth Percentage | 45% — 80% | 54.4% | | Overall payout as a percentage of target | — | 157.3% |
Fiscal 2023 Equity Incentive Awards — Annual Awards(1)
(1) Non-GAAP EPS is defined as (i) GAAP net loss attributable to CrowdStrike excluding stock-based compensation expense, amortization of acquired intangible assets (including purchased patents), acquisition-related expenses, amortization of debt issuance costs and discount, mark-to-market adjustments on deferred compensation liabilities, legal reserve and settlement charges, losses (gains) and other income from strategic investments, gains on deferred compensation assets, the tax costs for intellectual property integration relating to acquisitions, and the effect of acquisitions during the performance period divided by (ii) the weighted-average number of shares outstanding, which includes the dilutive effect of potentially dilutive common stock equivalents outstanding during the period.
Fiscal 2022 Multi-Year Awards
Fiscal 2022 Multi-Year Awards In fiscal 2022, Mr. Kurtz and Mr. Podbere were each issued a multi-year PSU award to recognize the instrumental roles they continue to play in driving the Company’s growth and performance in this critical period as an early-stage public company. The multi-year PSU awards are comprised of four equal tranches of PSUs, each of which will be earned and will vest upon the satisfaction of both a performance-based vesting condition and a service-based vesting condition. The performance condition applicable to the multi-year PSU awards will be earned based on the Company’s achievement of specified stock price hurdles and subject to anti-dilution adjustments, during the performance period beginning on the date of grant and ending on January 31, 2027. For more information on the multi-year PSU awards, please see “Executive Compensation Discussion and Analysis — Long-Term Equity Incentive Compensation — Multi-Year PSU Awards” included in our proxy statement filed with the SEC on May 6, 2022. As of the date hereof, none of Mr. Kurz and Mr. Podbere’s multi-year PSU awards have vested since the applicable performance-based vesting condition has not been satisfied.
Offer Letters, Employment Agreements and Change in Control Arrangements
Offer Letters, Employment Agreements and Change in Control Arrangements Offer Letters We have entered into employment agreements or offer letters with each of our NEOs which generally provide for at-will employment with no specified employment terms, as well as severance protections in certain circumstances, as described in more detail in the “Potential Payments Upon Termination or Change in Control” section below. In addition, as a condition of their employment, we also require that our employees, including our NEOs, sign and comply with an At-Will Employment, Confidential Information, Invention Assignment and Arbitration Agreement which requires, among other provisions, the assignment of certain intellectual property rights to the Company, and non-disclosure of Company proprietary information. Kurtz Change in Control and Severance Agreement On September 1, 2021, the Company entered into a change in control and severance agreement with George Kurtz, the Company’s President and Chief Executive Officer (the “Change in Control and Severance Agreement”) which supersedes and replaces the severance pay and benefits provided under Mr. Kurtz’s existing employment agreement with CrowdStrike, Inc., dated as of November 11, 2018. The terms of the Change in Control and Severance Agreement are described in detail below under “Potential Payments upon a Termination or Change in Control.”
Tax and Accounting Considerations
Tax and Accounting Considerations Deductibility of Executive Compensation Section 162(m) of the IRC (Section 162(m)) generally imposes a $1 million cap on the federal income tax deduction for compensation paid to our “covered employees” (including our CEO) during any fiscal year. Under certain transition relief provided under Section 162(m), as an early-stage public company, compensation paid pursuant to a compensation plan that was in existence before the effective date of our IPO will not be subject to the $1 million limitation under Section 162(m) until the earliest of: (i) the expiration of the compensation plan, (ii) a material modification of the compensation plan (as determined under Section 162(m)), (iii) the issuance of all the employer stock and other compensation allocated under the compensation plan, or (iv) the first meeting of stockholders at which directors are elected after the close of the third calendar year following the year in which the IPO occurs. Notably, while Section 162(m) was amended by the Tax Cuts and Jobs Act of 2017 (“TCJA”), which, among other things, generally eliminated this IPO transition relief, because our IPO occurred before December 20, 2019, we may still avail ourselves to the IPO transition relief under Section 162(m). While the Compensation Committee considers the deductibility of awards as one factor in determining executive compensation, the Compensation Committee also looks at other factors in making its decisions, and, in the exercise of its business judgment and in accordance with its compensation philosophy, the Compensation Committee retains the flexibility to award compensation even if the compensation is not deductible by us for tax purposes, and to modify compensation that was initially intended to be tax deductible if it determines such modifications are consistent with our business needs. Accounting for Stock-Based Compensation The Compensation Committee takes accounting considerations into account in designing compensation plans and arrangements for our NEOs and other employees. Chief among these is the Financial Accounting Standard Board’s Accounting Standards Codification Topic 718 (FASB ASC Topic 718), the standard which governs the accounting treatment of stock-based compensation awards. We follow FASB ASC Topic 718 for our stock-based compensation awards. FASB ASC Topic 718 requires us to measure the compensation expense for all share-based payment awards made to our employees and non-employee members of our Board, including RSUs and PSUs, based on the grant date “fair value” of these awards. This calculation is performed for accounting purposes and reported in the executive compensation tables below, even though the recipient may never realize any value from such awards. For performance units, stock-based compensation expense recognized may be adjusted over the performance period based on interim estimates of performance against pre-set objectives.
Pay Ratio Disclosure
Pay Ratio Disclosure In accordance with the requirements of Section 953(b) of the Dodd-Frank Act and Item 402(u) of Regulation S-K (which we collectively refer to as the “Pay Ratio Rule”), we are providing the following estimated information for fiscal 2023: • the median of the annual total compensation of all our employees (excluding our CEO) was $206,034; • the annual total compensation of our CEO was $36,532,681; and • the ratio of these two amounts was 177 to 1. We believe that this ratio is a reasonable estimate calculated in a manner consistent with the requirements of the Pay Ratio Rule.
Fiscal 2023 Summary Compensation Table
Fiscal 2023 Summary Compensation Table The Summary Compensation Table and notes show all compensation paid to or earned by each of our NEOs for the fiscal years ended January 31, 2023, 2022 and 2021.
Fiscal 2023 Summary Compensation Table
| Name and Principal Position | Year | Salary ($) | Stock Awards ($) (1) | Non-Equity Incentive Plan Compensation ($) (2) | All Other Compensation ($) (3)(4) | Total ($) | | George Kurtz Chief Executive Officer, President and Director (5) | 2023 | 900,000 | 33,386,337 | 1,037,307 | 1,209,037 | 36,532,681 | | | 2022 | 750,000 | 146,123,040 | 815,588 | 7,118 | 147,695,746 | | | 2021 | 550,000 | 19,377,034 | 587,881 | 3,096 | 20,518,011 | | Burt Podbere Chief Financial Officer | 2023 | 600,000 | 20,031,482 | 565,804 | 17,343 | 21,214,629 | | | 2022 | 500,000 | 25,059,510 | 407,794 | 8,658 | 25,975,962 | | | 2021 | 400,000 | 11,626,162 | 256,530 | 3,096 | 12,285,788 | | Shawn Henry Chief Security Officer (6) | 2023 | 600,000 | 13,354,321 | 445,693 | 14,062 | 14,414,076 | | | 2022 | 600,000 | 10,085,360 | 1,312,415 | 7,331 | 12,005,106 | | | 2021 | 550,000 | 11,989,600 | 1,358,609 | 3,096 | 13,901,305 |
Fiscal 2023 Summary Compensation Table
(1) The amounts disclosed represent the grant date fair value of the RSUs and PSUs granted to our NEOs during the relevant fiscal year as computed in accordance with FASB ASC Topic 718. These grant date fair values do not take into account any estimated forfeitures related to service-vesting conditions. These amounts do not reflect the actual economic value that will be realized by the NEO upon the vesting of the RSUs and PSUs or the sale of any common stock acquired under such RSUs or PSUs. Other than with respect to Mr. Kurtz and Mr. Podbere’s multi-year PSU awards, the amounts disclosed for the PSUs included in this column were calculated based on the probable outcome of the performance condition as of the grant date, consistent with the estimate of aggregate compensation cost to be recognized over the service period determined as of the grant date under FASB ASC Topic 718. The following are the values of the PSU awards granted to our NEOs in fiscal 2023 as of the grant date assuming attainment of the maximum level of performance: Mr. Kurtz ($26,392,361), Mr. Podbere ($15,835,163), and Mr. Henry ($10,556,776). As described in “Executive Compensation Discussion and Analysis — Long-Term Equity Incentive Compensation — Multi-Year PSU Awards” included in our proxy statement filed with the SEC on May 6, 2022, Mr. Kurtz and Mr. Podbere were granted multi-year PSUs, which vest based on the achievement of certain stock price hurdles and continued service. The grant date fair value of each of Mr. Kurtz’s and Mr. Podbere’s multi-year PSU awards is calculated based on Monte-Carlo simulation. For additional information on how we account for equity-based compensation, see Note 7 to our audited consolidated financial statements included in our Annual Report on Form 10-K for fiscal 2023, which was filed with the SEC on March 9, 2023. (2) For Messrs. Kurtz and Podbere, the amounts reported for fiscal 2023 reflect the bonus payments received by such NEOs under the CIP in respect of fiscal 2023 performance. For Mr. Henry, the amounts reported for fiscal 2023 reflect the commission incentives earned by Mr. Henry under the Commission Plan for fiscal 2023. (3) These amounts represent supplementary benefits including the dollar value of employer costs for life and disability insurance, executive supplemental health benefits and a 401(k) match. These amounts also include, where we incur incremental costs under such arrangements, airfare and hotel expenses paid by the Company for guests to travel with our executives from time to time. For Mr. Kurtz, the amount for fiscal 2023 also includes approximately (i) $104,922 for costs related to personal security for Mr. Kurtz and his family at his residences and during personal travel pursuant to Mr. Kurtz’s overall security program and (ii) $1,089,243 for costs related to personal usage of private aircraft. For purposes of reporting the value of personal usage of private aircraft in this table, we use incremental costs attributable to Mr. Kurtz’s personal usage, as provided by the applicable third party service provider, which include passenger fees, fuel, crew, and catering costs. (4) As part of our sales and marketing activities, we sponsor a CrowdStrike-branded professional racing car, which Mr. Kurtz drives in some races at no incremental cost to us and in lieu of us hiring a professional driver. As we do not pay any amounts to Mr. Kurtz under these arrangements, it is not reflected in the above table. (5) Mr. Kurtz serves on our Board but is not paid additional compensation for such service. Mr. Henry was also President, CrowdStrike Services until October 2022.
Grants of Plan-Based Awards for Fiscal 2023
Grants of Plan-Based Awards for Fiscal 2023 The following table sets forth certain information regarding grants of plan-based awards to our NEOs for fiscal 2023 under our compensation programs and plans.
Grants of Plan-Based Awards for Fiscal 2023
| | | Estimated Possible Payouts Under Non-Equity Incentive Plan Awards (1) | | | Estimated Possible Payouts Under Equity Incentive Plan Awards (2) | | | All Other Stock Awards: Number of Shares of Stock (#) (4) | Grant Date Fair Value of Stock and Option Awards (5) | | Name | Grant Date | Threshold ($) (3) | Target ($) | Maximum ($) | Threshold Performance Shares (#) | Target Performance Shares (#) | Maximum Performance Shares (#) | | | | George Kurtz | 04/06/2022 | 275,000 | 1,100,000 | 1,650,000 | - | - | - | - | - | | | 04/06/2022 | - | - | - | 15,619 | 62,476 | 124,952 | - | 20,190,157 | | | 04/06/2022 | - | - | - | - | - | - | 62,476 | 13,196,181 | | Burt Podbere | 04/06/2022 | 150,000 | 600,000 | 900,000 | - | - | - | - | - | | | 04/06/2022 | - | - | - | 9,371 | 37,485 | 74,970 | - | 12,113,900 | | | 04/06/2022 | - | - | - | - | - | - | 37,485 | 7,917,582 | | Shawn Henry | 04/06/2022 | - | 600,000 | - | - | - | - | - | - | | | 04/06/2022 | - | - | - | 6,248 | 24,990 | 49,980 | - | 8,075,933 | | | 04/06/2022 | - | - | - | - | - | - | 24,990 | 5,278,388 |
Grants of Plan-Based Awards for Fiscal 2023
(1) For Messrs. Kurtz and Podbere, these columns reflect the bonus opportunities under the CIP for fiscal 2023. No CIP bonus is payable to our NEOs if performance is achieved below the threshold performance level. Estimates above for Messrs. Kurtz and Podbere do not include any potential upward/ downward discretionary adjustments by the Compensation Committee based on performance against Net Retention Rate metric. For Mr. Henry, these columns reflect the commission incentive opportunities under the Company’s Commission Plan for fiscal 2023. (2) The amounts in these columns reflect the PSUs granted to the NEOs under the Company’s 2019 Equity Incentive Plan during fiscal 2023. The PSUs granted on April 6, 2022 reflect the right to receive between 0% and 200% of the target number of PSUs granted to the NEO and are earned based on the Company’s achievement of a specified revenue growth metric and non-GAAP earnings per share metric. In the event that revenue growth for fiscal 2023 is less than 45% or the specified non-GAAP earnings per share threshold is not met, the PSUs will be forfeited in their entirety. The earned PSUs service-vest over a four-year period, with 25% of the PSUs service-vesting on the first anniversary of the applicable vesting commencement date and the remaining 75% of the PSUs service-vesting on a fiscal quarterly basis thereafter, in each case provided the NEO remains employed with the Company though each vesting date. (3) No amount will be paid out with respect to any annual bonus opportunity if performance is below threshold. (4) The amounts in this column reflect the RSUs granted to the NEOs under the 2019 Plan during fiscal 2023. These RSUs service-vest over a four-year period, with one sixteenth (1/16) of the RSUs vesting quarterly, in each case provided the NEO remains employed with the Company though each vesting date. The amounts in this column for the RSUs and PSUs reflect their aggregate grant date fair values, calculated in accordance with FASB ASC Topic 718, excluding the effect of estimated forfeitures. The amounts in this column for the April 6, 2022 PSUs were calculated based on the probable outcome of the performance condition as of the grant date, consistent with the estimate of aggregate compensation cost to be recognized over the service period determined as of the grant date under FASB ASC Topic 718. The following are the values of such PSU awards as of the grant date assuming attainment of the maximum level of performance: Mr. Kurtz ($26,392,361), Mr. Podbere ($15,835,163) and Mr. Henry ($10,556,776). For additional information on how we account for equity-based compensation, see Note 7 to our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended January 31, 2023, which was filed with the SEC on March 9, 2023.
Outstanding Equity Awards at 2023 Fiscal Year-End
Outstanding Equity Awards at 2023 Fiscal Year-End The following table summarizes the number of securities underlying outstanding equity awards for each of our NEOs as of January 31, 2023.
Outstanding Equity Awards at 2023 Fiscal Year-End
| | | Option Awards (1) | | | | | Stock Awards (1) | | | | | Name | Grant Date | Number of Securities Underlying Options Exercisable (#) | Number of Securities Underlying Options Unexercisable (#) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares, Units or other Rights That Have Not Vested (#) | Market Value of Shares, Units or Other Rights That Have Not Vested ($) (2) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout of Unearned Shares, Units or Other Rights That Have Not Vested ($) (2) | | George Kurtz | 10/09/18 (3) | 351,989 | - | - | 11.13 | 10/9/2028 | - | - | - | - | | | 10/23/18 (4) | - | - | - | - | - | 615,981 | 65,232,388 | - | - | | | 04/09/20 (5) | - | - | - | - | - | 41,025 | 4,344,548 | | | | | 04/09/20 (6) | - | - | - | - | - | 63,112 | 6,683,561 | - | - | | | 04/07/21 (7) | - | - | - | - | - | 41,550 | 4,400,145 | | | | | 04/07/21 (8) | - | - | - | - | - | 29,028 | 3,074,065 | - | - | | | 08/28/21 (9) | - | - | - | - | - | - | - | 540,000 | 57,186,000 | | | 04/06/22 (10) | - | - | - | - | - | - | - | 98,274 | 10,407,217 | | | 04/06/22 (11) | - | - | - | - | - | 50,762 | 5,375,696 | - | - | | Burt Podbere | 04/09/20 (5) | - | - | - | - | - | 24,617 | 2,606,940 | - | - | | | 04/09/20 (6) | - | - | - | - | - | 37,867 | 4,010,115 | - | - | | | 04/07/21 (7) | - | - | - | - | - | 18,007 | 1,906,941 | - | - | | | 04/07/21 (8) | - | - | - | - | - | 12,580 | 1,332,222 | - | - | | | 01/12/22 (9) | - | - | - | - | - | - | - | 115,000 | 12,178,500 | | | 04/06/22 (10) | - | - | - | - | - | - | - | 58,963 | 6,244,182 | | | 04/06/22 (11) | | | | | | 30,457 | 3,225,396 | | | | Shawn Henry | 09/25/18 (12) | 3,125 | | - | 11.13 | 9/25/2028 | - | - | - | - | | | 06/11/19 (13) | - | - | - | - | - | 782 | 82,814 | - | - | | | 04/09/20 (5) | - | - | - | - | - | 24,617 | 2,606,940 | - | - | | | 04/09/20 (6) | - | - | - | - | - | 1,954 | 206,929 | - | - | | | 04/09/20 (6) | - | - | - | - | - | 37,867 | 4,010,115 | - | - | | | 04/07/21 (7) | - | - | - | - | - | 18,007 | 1,906,941 | - | - | | | 04/07/21 (8) | - | - | - | - | - | 12,580 | 1,332,222 | - | - | | | 04/06/22 (10) | - | - | - | - | - | - | - | 39,309 | 4,162,823 | | | 04/06/22 (11) | - | - | - | - | - | 20,305 | 2,150,300 | - | - |
Outstanding Equity Awards at 2023 Fiscal Year-End
(1) Each of the outstanding equity awards was granted pursuant to our 2011 Plan or 2019 Plan. (2) The market values of the awards were calculated by multiplying the number of shares underlying the awards by $105.90, which was the last closing price per share of our common stock as of January 31, 2023. (3) The option is subject to an early exercise provision and is immediately exercisable. Shares subject to the option vest as follows: 351,989 shares of Class B common stock vest in 24 equal monthly installments beginning on November 1, 2022, subject to continued service through the applicable vesting date. As of January 31, 2023, this award remains unvested as to 307,991 shares of Class B common stock that are subject to the option’s early exercise provision. (4) The RSUs vest in eight equal quarterly installments beginning on December 20, 2022, subject to continued service through the applicable vesting date. 25% of the PSUs vest on March 20, 2021, and 1/16 of the PSUs vest quarterly thereafter subject to continued service through the applicable vesting date and achievement of the applicable revenue growth performance goal for fiscal 2021. Following the end of fiscal 2021, the Compensation Committee determined that the performance goal applicable to the PSUs was achieved at 130% of target as of January 31, 2021 (which such achievement is reflected in this table). 25% of the RSUs vest on March 20, 2021, and 1/16 of the RSUs vest quarterly thereafter subject to continued service through the applicable vesting date. (7) 25% of the PSUs vest on March 20, 2022, and 1/16 of the PSUs vest quarterly thereafter subject to continued service through the applicable vesting date and achievement of the applicable performance goal for fiscal 2022. Following the end of fiscal 2022, the Compensation Committee determined that the performance goal applicable to the PSUs was achieved at 143% of target as of January 31, 2022 (which such achievement is reflected in this table). (8) The RSUs vest in 16 equal quarterly installments beginning on June 20, 2021, subject to continued service through the applicable vesting date. (9) See the discussion under “Executive Compensation Discussion and Analysis — Long-Term Equity Incentive Compensation — Multi-Year PSU Awards” included in our proxy statement filed with the SEC on May 6, 2022 for a description of the vesting terms of these PSUs. (10) 25% of the PSUs vest on March 20, 2023, and 1/16 of the PSUs vest quarterly thereafter subject to continued service through the applicable vesting date and achievement of the applicable performance goal for fiscal 2023. Following the end of fiscal 2023, the Compensation Committee determined that the performance goal applicable to the PSUs was achieved at 157% of target as of January 31, 2023 (which such achievement is reflected in this table). (11) The RSUs vest in 16 equal quarterly installments beginning on June 20, 2022, subject to continued service through the applicable vesting date. (12) Shares subject to the option vest in 48 equal monthly installments beginning on October 25, 2018 subject to continued service through the applicable vesting date. (13) 25% of the RSUs vest on March 20, 2020, and 1/16 of the RSUs vest quarterly thereafter subject to continued service through the applicable vesting date.
Option Exercises and Stock Vested During Fiscal 2023
Option Exercises and Stock Vested During Fiscal 2023 The following table presents, for each of our NEOs, the shares of our common stock that were acquired upon the exercise of vested stock options and the vesting of RSUs and the related value realized during fiscal 2023.
Option Exercises and Stock Vested During Fiscal 2023
| | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) (1) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) (2) | | George Kurtz | - | - | 624,128 | 105,137,327 | | Burt Podbere | 19,923 | 2,139,929 | 85,975 | 14,423,042 | | Shawn Henry | 25,824 | 4,188,672 | 88,319 | 14,841,790 |
Option Exercises and Stock Vested During Fiscal 2023
(1) Calculated by multiplying the number of corresponding shares acquired by the difference between the exercise price and the market price of the underlying common stock at the time of exercise. (2) Calculated by multiplying the number of corresponding shares acquired by the closing price of our Class A common stock as reported on the Nasdaq on the vesting date (or on the last trading day prior to the vesting date if the vesting date was not a trading day).
Potential Payments Upon Termination or Change in Control
Potential Payments Upon Termination or Change in Control In the event of a qualifying termination of employment and/or the occurrence of a change in control of the Company, each of our NEOs are entitled to certain payments and benefits under their employment agreements, offer letters and/or their outstanding equity incentive awards. For a detailed summary of these payments and benefits, see the narrative description that follows the table below. The table below sets forth the amounts of the payments and benefits that each NEO would have been entitled to receive upon a qualifying termination of employment by the Company and/or the occurrence of a change in control, in each case assuming the relevant event occurred on January 31, 2023. The values reflected in the table below relating to the acceleration of equity awards are based on the last closing price of our Class A common stock as reported on the Nasdaq on January 31, 2023 ($105.90 per share) (in the case of options, minus the applicable exercise price) and, with respect to PSUs, are based on achievement of performance goals for the applicable period as determined by the Compensation Committee. In addition to the amounts set forth in the table below, upon any termination of employment, each executive would also be entitled to receive all payments generally provided to salaried employees on a non-discriminatory basis on termination, such as life insurance proceeds (for any termination caused by death) and 401(k) plan distributions. If the termination of employment is the result of the executive’s death or disability, then under the Company’s current policy, the Company will typically provide for incremental accelerated vesting of outstanding equity awards such that an additional 12 months of the participant’s awards will vest (with awards subject to performance conditions that have not yet been determined being deemed earned at target). Certain special awards, including the multi-year PSU awards granted to Mr. Kurtz and Mr. Podbere in fiscal 2022, and certain specially-targeted performance-based awards are excluded from this policy.
Potential Payments Upon Termination or Change in Control
| Name | Benefit Description | Termination without cause by Company or for good reason by executive NOT in connection with a Change in Control ($) | Termination without cause by Company or for good reason by executive in connection with a Change in Control ($) | Change in Control without any termination event ($) | | George Kurtz | Cash severance | 1,350,000 (1) | 3,000,000 (2) | - | | | Accelerated vesting of equity awards (3) | 72,305,669 | 128,705,926 | 94,420,695 | | | Continuation of health benefits (4) | 44,232 | 44,232 | - | | Burt Podbere | Cash severance (5) | 150,000 | 150,000 | - | | Shawn Henry | Cash severance (6) | 200,000 | 200,000 | - |
Potential Payments Upon Termination or Change in Control
(1) Represents a lump-sum cash severance payment of 1.5 times Mr. Kurtz’s annual base salary as of January 31, 2023. (2) Represents a lump-sum cash severance payment of 1.5 times Mr. Kurtz’s annual base salary and annual target bonus as of January 31, 2023. (3) Mr. Kurtz holds (i) 307,991 unvested stock options covering shares of our common stock and (ii) unvested restricted stock unit awards and performance-based stock units covering 939,732 shares of our common stock, in each case which were outstanding as of January 31, 2023 and accelerate in full or in part pursuant to the terms of the corresponding award agreements granted to Mr. Kurtz and Mr. Kurtz’s Change in Control and Severance Agreement. (4) Represents the cost of 18 monthly COBRA premiums. (5) Represents a lump-sum cash severance payment of 3 months of Mr. Podbere’s base salary as of January 31, 2023. (6) Represents a lump-sum cash severance payment of 4 months of Mr. Henry’s base salary as of January 31, 2023.
Pay versus Performance
Pay versus Performance The following table sets forth the compensation for our Principal Executive Officer (the “PEO”) and the average compensation for our other named executive officers, both as reported in the Summary Compensation Table and with certain adjustments to reflect the “compensation actually paid” to such individuals, as defined under SEC rules, for each of fiscal 2023, fiscal 2022 and fiscal 2021. The table also provides information on our cumulative total shareholder return (“TSR”), the cumulative TSR of our peer group, net income and non-GAAP operating income.
Pay versus Performance
| Year (a) | Summary Compensation Table Total for PEO ($) (1) (b) | Compensation Actually Paid to PEO ($) (2) (c) | Average Summary Compensation Table Total for Non-PEO NEOs ($) (1) (d) | Average Compensation Actually Paid to Non-PEO NEOs ($) (2) (e) | Value of Initial Fixed $100 Investment Based on: | | Net Income ($) (in thousands) (h) (4) | Non-GAAP Operating Income (in thousands) (i) (5) | | | | | | | Total Shareholder Return ($) (3) (f) | Peer Group Total Shareholder Return ($) (3) (g) | | | | FY2023 | $36,532,681 | $(111,653,036) | $17,814,353 | $(2,496,643) | $173.35 | $146.16 | $(183,245) | $355,622 | | FY2022 | $147,695,746 | $34,920,193 | $14,958,880 | $1,012,573 | $295.69 | $173.37 | $(234,802) | $196,175 | | FY2021 | $20,518,011 | $494,146,208 | $12,938,574 | $57,336,913 | $353.25 | $137.13 | $(92,629) | $62,352 |
Pay versus Performance
(1) Compensation for our PEO reflects the amounts reported in the “Summary Compensation Table” for the respective years. Average compensation for non-PEOs includes the following NEOs: a. Our fiscal 2023 non-PEO NEOs were Burt Podbere and Shawn Henry and b. Our fiscal 2022 and fiscal 2021 non-PEO NEOs were Burt Podbere, Shawn Henry, Colin Black and Michael Carpenter. (2) Compensation “actually paid” for the PEO and average compensation “actually paid” for our non-PEO NEOs in fiscal 2023, fiscal 2022 and fiscal 2021 reflects the respective amounts set forth in columns (c) and (e), adjusted as follows in the table below, as determined in accordance with SEC rules. These dollar amounts do not reflect the actual amount of compensation earned by or paid to the PEO and our other NEOs during the applicable year. For information regarding the decisions made by our Compensation Committee in regard to the PEO’s and our other NEOs’ compensation for fiscal 2023, see the “Executive Compensation and Analysis” section above.
Pay versus Performance
| | PEO FY2023 | PEO FY2022 | PEO FY2021 | Non-PEOs FY2023 | Non-PEOs FY2022 | Non-PEOs FY2021 | | Summary Compensation Table Total | $36,532,681 | $147,695,746 | $20,518,011 | $17,814,353 | $14,958,880 | $12,938,574 | | Less Stock Award Value Reported in Summary Compensation Table for the Covered Year | $(33,386,337) | $(146,123,040) | $(19,377,034) | $(16,692,902) | $(13,828,898) | $(11,717,022) | | Plus Fair Value for Unvested Awards Granted in the Covered Year, Determined as of the Covered Year End | $15,782,992 | $87,263,550 | $71,909,977 | $7,891,412 | $10,330,474 | $43,145,930 | | Change in Fair Value of Outstanding Unvested Awards from Prior Years, Determined based on Change in Fair Value from Prior Year End to Covered Year End | $(123,933,087) | $(64,658,071) | $376,330,048 | $(11,510,233) | $(3,502,961) | $7,365,995 |
Pay versus Performance
| | PEO FY2023 | PEO FY2022 | PEO FY2021 | Non-PEOs FY2023 | Non-PEOs FY2022 | Non-PEOs FY2021 | | Plus Fair Value for Awards Granted in the Covered Year that Vested in the Covered Year, Determined as of the Vesting Date | $1,747,714 | $2,285,751 | - | $873,775 | $918,503 | - | | Change in Fair Value of Awards from Prior Years that Vested in the Covered Year, Determined based on Change in Fair Value from Prior Year End to the Vesting Date | $(8,396,999) | $8,456,257 | $44,765,206 | $(873,048) | $85,951 | $5,603,435 | | Less Fair Value of Awards Forfeited during the Covered Year | - | - | - | - | $(7,949,377) | - | | Plus Fair Value of Incremental Dividends or Earnings Paid on Stock Awards | - | - | - | - | - | - | | Less Aggregate Change in Actuarial Present Value of Accumulated Benefit Under Pension Plans | - | - | - | - | - | - | | Plus Aggregate Service Cost and Prior Service Cost for Pension Plans | - | - | - | - | - | - | | Compensation Actually Paid | $(111,653,036) | $34,920,193 | $494,146,208 | $(2,496,643) | $1,012,573 | $57,336,913 |
Pay versus Performance
Fair values set forth in the table above are computed in accordance with ASC 718 as of the end of the respective fiscal year, other than fair values of awards that vest in the covered year, which are valued as of the applicable vesting date. (3) The columns “Total Shareholder Return ($)” and “Peer Group Total Shareholder Return ($)” are calculated based on a fixed investment of $100 in CrowdStrike and the S&P Information Technology Index respectively from the beginning of the earliest year in table through the end of each applicable year in the table, assuming reinvestment of dividends, as calculated in accordance with Item 201(e) of Regulation S-K. (4) Reflects “Net Income” in the Company’s Consolidated Statements of Operations included in the Company’s Annual Reports on Form 10-K for each of the fiscal years ended January 31, 2023, 2022 and 2021. (5) Non-GAAP operating income is defined as GAAP loss from operations excluding stock-based compensation expense, amortization of acquired intangible assets (including purchased patents), acquisition-related expenses, mark-to-market adjustments on deferred compensation liabilities, and legal reserve and settlement charges. The following table sets forth an unranked list of the performance measures which we view as the “most important” measures for linking our NEOs’ compensation to performance, as specifically listed below.
Pay versus Performance
| Performance Measure | | Non-GAAP Operating Income | | Net New Annual Recurring Revenue (ARR) | | Net Retention Rate | | Revenue Growth Percent | | Non-GAAP EPS |
Pay versus Performance
For more details on how our Compensation Committee uses these metrics to assess the performance of the PEO and other NEOs, see “Executive Compensation Discussion and Analysis” included in this Proxy Statement.