DEF 14A of Twilio Inc

Filed Apr 25, 2025 · FY20240001140361-25-015756

Open on EDGAR

Board of Directors
Board of Directors Our business and affairs are managed under the direction of a highly independent, experienced and qualified board of directors. Our board of directors, through our nominating and corporate governance committee, proactively evaluates its composition in the context of our company’s evolving business needs and has taken a thoughtful approach to board composition. Our board of directors and the nominating and corporate governance committee believe the skills, qualities, attributes, experience and backgrounds of our directors provide us with the right range of perspectives to effectively address our evolving needs and represent the best interests of our stockholders. Our board of directors also oversees our stockholder engagement program and reviews investor feedback, which allows us to better understand the perspectives of our stockholders and to take this feedback into account as we shape the composition of our board of directors. Our board of directors currently consists of nine directors. All of our board members, other than Mr. Shipchandler (and, during his time on our board of directors, Mr. Lawson), qualify as “independent” under the listing standards of the New York Stock Exchange. Our board of directors is divided into three classes of directors. At each annual meeting of stockholders, a class of directors will be elected for a three-year term to succeed the class whose term is then expiring. The effect that the management proposal to amend our certificate of incorporation to declassify the board of directors will have on the three director classes and their respective terms of office is described below under the heading “Proposal 4—Management Proposal to Amend Our Certificate of Incorporation to Declassify the Board of Directors.”
Board of Directors
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Board of Directors
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Board of Directors
The following table sets forth the names, ages as of March 31, 2025, and certain other information for each of the members of our board of directors with terms expiring at the Annual Meeting (who are also nominees for election as a director at the Annual Meeting) and for each of the continuing members of our board of directors.
Board of Directors
| | Class | Age | Director Since | Current Term Expires | Expiration of Term for Which Nominated | Independent | Audit Committee | Compensation and Talent Management Committee | Nominating and Corporate Governance Committee | | Directors with Terms Expiring at the Annual Meeting/Nominees | | | | | | | | | | | Donna Dubinsky | III | 69 | 2018 | 2025 | 2028 | | | | | | Deval Patrick | III | 68 | 2021 | 2025 | 2028 | | | | | | Miyuki Suzuki | III | 64 | 2022 | 2025 | 2028 | | | | | | Continuing Directors | | | | | | | | | | | Charles Bell | I | 67 | 2023 | 2026 | — | | | | | | Jeff Epstein | II | 68 | 2017 | 2027 | — | | | | | | Jeffrey Immelt | I | 69 | 2019 | 2026 | — | | | | | | Erika Rottenberg | I | 62 | 2016 | 2026 | — | | | | | | Khozema Shipchandler | II | 51 | 2024 | 2027 | — | | | | | | Andrew Stafman | II | 37 | 2024 | 2027 | — | | | | |
Board of Directors
| | Committee Chair | | Committee Member | | Independent Board Chair |
Board of Directors
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Board of Directors
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Board Skills and Experience Matrix
Board Skills and Experience Matrix Our nominating and corporate governance committee periodically evaluates the composition of our board of directors in the context of our company’s evolving business needs to ensure that our directors have the skillsets, experiences and backgrounds that collectively add value to the strategic decisions made by our company, that enable them to provide oversight of management, risk, business operations, and corporate strategy, and that allow our board of directors to best fulfill its responsibilities to the long-term interests of our stockholders. This has resulted in the addition of four new independent directors to our board of directors since the beginning of 2021. Summarized below are the skills and experience that we consider important for our directors in light of our business strategy, structure, and market dynamics. Our board of directors and the nominating and corporate governance committee believe the skills, qualities, attributes, experience and diversity of backgrounds of our directors provide us with a broad range of perspectives to effectively address our evolving needs and represent the best interests of our stockholders.
Board Skills and Experience Matrix
| | Bell | Dubinsky | Epstein | Immelt | Patrick | Rottenberg | Shipchandler | Stafman | Suzuki | | Technology and Software Industry Deep insight in the technology and software industries to oversee our business and the risks we face related to those industries. | | | | | | | | | | | Communications Industry Deep insight in the communications industry to oversee our business and the risks we face related to that industry. | | | | | | | | | | | Public Company Board Experience to understand the dynamics and operation of a public company. | | | | | | | | | | | Public Company Executive / Senior Leadership Experience in senior leadership positions at a public company to analyze, advise and oversee management in decision making, operations and policies. | | | | | | | | | | | Finance / Accounting / Audit Knowledge of financial markets, financing and accounting and financial reporting processes. | | | | | | | | | | | Sales and Marketing Sales and marketing experience to provide expertise and guidance to grow sales and enhance our brand. | | | | | | | | | | | Human Capital / Compensation / Employee Development and Training Experience attracting and retaining top talent to advise and oversee our people and compensation policies in our competitive environment. | | | | | | | | | | | Global Business Operations Experience and knowledge of global operations, business conditions and culture to advise and oversee our global business. | | | | | | | | | | | Risk Management Experience in risk oversight. | | | | | | | | | | | Regulatory / Government / Public Policy Experience in governmental and regulatory affairs. | | | | | | | | | | | Cybersecurity / Information Security / Privacy Expertise to oversee cybersecurity, information security, and privacy management. | | | | | | | | | | | Strategy / Business Development / M&A Experience creating long-term value through investment, acquisitions and growth strategies. | | | | | | | | | | | Corporate Governance Experience in corporate governance, compliance, policy, investor relations and creating long term sustainable value. | | | | | | | | | |
Board Skills and Experience Matrix
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Board Skills and Experience Matrix
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Board Skills and Experience Matrix
Nominees for Director
Board Skills and Experience Matrix
| Donna Dubinsky Age: 69 Director Since: 2018 Independent Committees: Nominating and Corporate Governance Other Public Company Board Experience within Last 5 Years: None | Experience: Ms. Dubinsky has served as a member of our board of directors since December 2018. From 2022 to 2023, Ms. Dubinsky served as a Senior Counselor to the U.S. Secretary of Commerce, Gina Raimondo. In 2005, Ms. Dubinsky co-founded Numenta, Inc. (“Numenta”), a machine intelligence company, where she served as Chief Executive Officer from 2005 to 2022 and as Board Chair from 2005 to 2024. Ms. Dubinsky also co-founded Handspring, Inc. (“Handspring”), a maker of personal digital assistants, and served as its President and Chief Executive Officer from 1998 to 2003 and as Acting Chief Financial Officer from 2002 to 2003. From 1992 to 1998, Ms. Dubinsky served as President and Chief Executive Officer of Palm Computing, Inc. (“Palm”), one of the first companies to develop and design handheld computers and smartphones. Since 2023, Ms. Dubinsky has served on the board of Natcast, Inc., a non-profit entity focused on semiconductor research, and she previously served on the board of Intuit Inc. and Yale University, including two years as Senior Fellow. Ms. Dubinsky holds a B.A. from Yale University and an M.B.A. from Harvard Business School. | | | Qualifications: With her extensive experience founding and managing technology companies, including Palm, Handspring, and Numenta, Ms. Dubinsky brings to our board of directors experience as a successful entrepreneur with demonstrated expertise and knowledge in business strategy, innovation, executive leadership growth, an in-depth understanding of the technology landscape and valuable insight on growing a company from a start-up to a publicly traded company. Her experience working with the federal government adds depth to her understanding of governmental and regulatory affairs. |
Board Skills and Experience Matrix
| Deval Patrick Age: 68 Director Since: 2021 Independent Committees: Nominating and Corporate Governance Other Public Company Board Experience within Last 5 Years: Toast Inc. (2021-present) Cerevel Therapeutics Holdings, Inc. (2021-2024) American Well Corporation (2015-2019, 2020-2024) Environmental Impact Acquisition Corp. (2021-2022) Global Blood Therapeutics, Inc. (2015-2019, 2020-2022) | Experience: Mr. Patrick has served as a member of our board of directors since January 2021. Since 2024, Mr. Patrick has served as Senior Partner at The Vistria Group, a leading impact investment firm, which he initially joined in 2024 as Senior Advisor. Since 2022, Mr. Patrick has served as the David R. Gergen professor of the practice of public leadership at the Harvard Kennedy School, where he also served as co-director of the Center for Public Leadership from 2022 until 2024. From 2021 to 2023, he served as a Senior Advisor to Bain Capital LLC (“Bain Capital”), where, from 2015 to 2019, he previously founded and served as Managing Partner of the Double Impact Fund, a growth equity fund focused on delivering competitive financial returns and positive social impact. Previously, from 2007 to 2015, Mr. Patrick served as Governor of the Commonwealth of Massachusetts. Mr. Patrick holds an A.B. from Harvard College and a J.D. from Harvard Law School. | | | Qualifications: With his extensive experience in leadership roles in both the public and private sectors, including as Governor as the Commonwealth of Massachusetts and as an advisor to Bain Capital, Mr. Patrick brings to our board of directors expertise in leadership, public policy, investment, and the economy. Mr. Patrick also has experience serving on boards of directors of public companies across the biopharmaceutical, healthcare and technology industries, which provides valuable insight into oversight of risk management and regulatory compliance. |
Board Skills and Experience Matrix
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Board Skills and Experience Matrix
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Board Skills and Experience Matrix
| Miyuki Suzuki Age: 64 Director Since: 2022 Independent Committees: Compensation and Talent Management Other Public Company Board Experience within Last 5 Years: Sandisk Corporation (2025-present) Western Digital Corporation (2021-2025) | Experience: Ms. Suzuki has served as a member of our board of directors since August 2022. From 2015 to 2021, Ms. Suzuki served in senior executive roles at Cisco Systems, Inc. (“Cisco”), a networking technology company, including as President, Asia Pacific, Japan and China from 2018 to 2021. From 2011 to 2015, Ms. Suzuki served as President and Chief Executive Officer of Jetstar Japan Co., Ltd, a low-cost airline. Prior to that, from 2007 to 2011, Ms. Suzuki served as President and Vice Chairman of KVH Co. Ltd. (“KVH Telecom”), a Japanese telecommunications and IT services company. Prior to that, from 2004 to 2006, Ms. Suzuki served as the Chief Executive Officer of Lexis Nexis Asia Pacific, a legal information company, and from 2002 to 2004, she served as an Executive Vice President and Head of Consumer Business of Japan Telecom Co. Ltd (“Japan Telecom”), which is now part of Softbank Telecommunications. Ms. Suzuki holds an honors degree in History from Oxford University. | | | Qualifications: With her extensive experience in management roles at multinational companies in the technology, telecommunication and networking industries, including as a senior executive at Cisco, KVH Telecom and Japan Telecom, Ms. Suzuki brings to our board of directors a critical understanding of our industry and the operational, regulatory and cybersecurity risks and challenges we face. Ms. Suzuki also has deep expertise in global operations and markets as well as experience managing a global workforce, all of which provides our board of directors with a valuable perspective as we continue to expand internationally. Ms. Suzuki also has a valuable understanding of public company governance from her public company board experience. |
Board Skills and Experience Matrix
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Board Skills and Experience Matrix
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Board Skills and Experience Matrix
Continuing Directors
Board Skills and Experience Matrix
| Charles Bell Age: 67 Director Since: 2023 Independent Committees: Audit Other Public Company Board Experience within Last 5 Years: None | Experience: Mr. Bell has served as a member of our board of directors since March 2023. Since 2021, Mr. Bell has served as Executive Vice President, Security, Compliance, Identity, and Management for Microsoft, Inc. (“Microsoft”), a global software and technology company. From 1998 to 2021, Mr. Bell served in several roles at Amazon.com, Inc. (“Amazon”), an e-commerce and cloud computing company, including as Senior Vice President of Utility Computing from 2016 to 2021, Vice President of Utility Computing from 2005 to 2016, Vice President of eCommerce Platform from 2003 to 2005, and Vice President of Infrastructure from 1998 to 2003. Mr. Bell holds a B.A. in Business Administration, Information Systems Concentration from California State University, Fullerton. | | | Qualifications: With his extensive experience in internet information technology, platform software, cloud computing and cybersecurity, including as Executive Vice President, Security, Compliance, Identity and Management at Microsoft, and as the former Senior Vice President of Utility Computing responsible for Amazon Web Services at Amazon, Mr. Bell brings a deep understanding of the technology industry and significant cybersecurity expertise to our board of directors. From his experience in executive leadership roles at multinational companies, Mr. Bell also brings a critical understanding of financial, operational, risk management, and regulatory compliance issues. |
Board Skills and Experience Matrix
| Jeff Epstein Age: 68 Director Since: 2017 Independent Committees: Audit (Chair) Compensation and Talent Management Other Public Company Board Experience within Last 5 Years: AvePoint, Inc. (2021-present) Okta, Inc. (2021-present) Couchbase, Inc. (2015-present) Poshmark, Inc. (2018-2023) Shutterstock, Inc. (2012-2021) | Experience: Mr. Epstein has served as a member of our board of directors since July 2017. Mr. Epstein is an Operating Partner at Bessemer Venture Partners, a venture capital firm, which he joined in 2011. Prior to Bessemer Venture Partners, Mr. Epstein served as Chief Financial Officer of several public and private companies, including Oracle Corporation (“Oracle”), an enterprise software company, and DoubleClick Inc. (“DoubleClick”), an internet advertising company, which was acquired by Google LLC. Mr. Epstein holds a B.A. from Yale University and an M.B.A. from Stanford University. | | | Qualifications: With his extensive experience as an investor, director and senior financial executive at public and private companies, including as Chief Financial Officer at Oracle and DoubleClick, and as Operating Partner at Bessemer Venture Partners, Mr. Epstein brings to our board of directors in-depth knowledge of the complex accounting, financial and operational issues facing large global companies, with particular expertise in the software industry, and an understanding of accounting principles and financial reporting rules and regulations. In addition, Mr. Epstein’s service on several boards of directors and audit committees of other publicly traded companies give him significant insight into the preparation of financial statements and knowledge of audit procedures as well as risk management oversight. |
Board Skills and Experience Matrix
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Board Skills and Experience Matrix
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Board Skills and Experience Matrix
| Jeffrey Immelt Age: 69 Director Since: 2019 Independent Committees: Compensation and Talent Management (Chair) Other Public Company Board Experience within Last 5 Years: NeueHealth, Inc. (formerly Bright Health Group, Inc.) (2020-present) Bloom Energy Corporation (2019-present) Desktop Metal, Inc. (2018-present) Hennessy Capital Investment Corp. V (2021-2022) Tuya Inc. (2021-2022) | Experience: Mr. Immelt has served as a member of our board of directors since June 2019. Mr. Immelt is a venture partner of New Enterprise Associates (“NEA”), a venture capital firm, which he joined in 2018. From 2001 to 2017, Mr. Immelt served as Chairman and Chief Executive Officer of General Electric Company (“General Electric”). Prior to being appointed Chief Executive Officer, Mr. Immelt held several global leadership roles at General Electric from 1982 to 2000. Mr. Immelt serves on the boards of directors of certain of NEA’s portfolio companies and previously served as a director of the Federal Reserve Bank of New York, as chairman of the U.S. Presidential Council on Jobs and Competitiveness and as a trustee of Dartmouth College. He holds a B.A. in Applied Mathematics from Dartmouth College and an M.B.A. from Harvard University. | | | Qualifications: With his extensive experience as a chief executive and director of global businesses, including as the former Chief Executive Officer and Chairman of General Electric, Mr. Immelt brings to our board of directors a deep expertise in global business and financing strategy, as well as insight into managing all aspects of a multinational business, including operations, sales and marketing, human capital management, executive compensation, and global markets. In addition, Mr. Immelt’s extensive public company board experience gives Mr. Immelt a strong understanding of his role as a director and a broad perspective on key industry issues and corporate governance matters. As a partner of a venture capital firm, Mr. Immelt also brings knowledge of the current landscape of emerging technologies and companies in our industry. |
Board Skills and Experience Matrix
| Erika Rottenberg Age: 62 Director Since: 2016 Independent Committees: Nominating and Corporate Governance (Chair) Other Public Company Board Experience within Last 5 Years: Wix.com Ltd. (2014-2020) | Experience: Ms. Rottenberg has served as a member of our board of directors since June 2016. From March 2022 to December 2023, Ms. Rottenberg served as a Strategic Advisor at the Chan Zuckerberg Initiative, a philanthropic initiative, after having served as its Vice President and General Counsel from 2018 to 2022. From 2008 to 2014, Ms. Rottenberg served as Vice President, General Counsel and Secretary at LinkedIn Corporation (“LinkedIn”), a professional networking company. From 2004 to 2008, Ms. Rottenberg served as Senior Vice President, General Counsel and Secretary at SumTotal Systems, Inc., a talent management enterprise software company. From 1996 to 2002, Ms. Rottenberg served in several roles at Creative Labs, Inc., a computer peripheral and digital entertainment product company, including as Vice President, Strategic Development and General Counsel. From 1993 to 1996, Ms. Rottenberg served as an attorney at Cooley LLP, a law firm, specializing in corporate and employment law. Ms. Rottenberg holds a B.S. in Special and Elementary Education from the State University of New York at Geneseo and a J.D. from the University of California, Berkeley School of Law, formerly known as Boalt Hall School of Law. | | | Qualifications: With her extensive experience as an executive and director of private and public technology companies, including as General Counsel of LinkedIn, Ms. Rottenberg brings to our board of directors expertise in corporate governance, risk management oversight, business operations, and legal and compliance matters, including privacy, security and intellectual property. Ms. Rottenberg has a deep understanding of the complex legal, regulatory and corporate governance issues that we face as a global, publicly traded technology company. |
Board Skills and Experience Matrix
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Board Skills and Experience Matrix
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Board Skills and Experience Matrix
| Khozema Shipchandler Age: 51 Director Since: 2024 Committees: None Other Public Company Board Experience within Last 5 Years: Smartsheet Inc. (2023-2025) | Experience: Mr. Shipchandler has served as our Chief Executive Officer and as a member of our board of directors since January 2024. Prior to that, Mr. Shipchandler served as our President, Twilio Communications from March 2023 to January 2024, as our Chief Operating Officer from 2021 to 2023, and as our Chief Financial Officer from 2018 to 2021. From 2015 to 2018, Mr. Shipchandler served as Chief Financial Officer and Executive Vice President of Corporate Development at GE Digital, an operational technology and infrastructure software company that is a division of General Electric, a multinational conglomerate. From 1996 to 2015, Mr. Shipchandler served in various executive roles at General Electric, including as Chief Financial Officer, Middle East, North Africa and Turkey from 2011 to 2013. Mr. Shipchandler holds a B.A. in English and Biology from Indiana University Bloomington. | | | Qualifications: With over 25 years of experience growing businesses and driving financial performance across global, public organizations, Mr. Shipchandler brings to our board of directors significant operational and financial leadership skills and expertise, particularly related to companies in the technology and software industry. He also brings a deep and valuable understanding of Twilio’s business, operations and culture, having served in key senior executive roles at Twilio since 2018. |
Board Skills and Experience Matrix
| Andrew Stafman Age: 37 Director Since: 2024 Independent Committees: Audit Other Public Company Board Experience within Last 5 Years: None | Experience: Mr. Stafman has served as a member of our board of directors since March 2024. Mr. Stafman has been a partner at Sachem Head Capital Management LP, a value-oriented investment management firm based in New York, since 2013. Prior to Sachem Head, Mr. Stafman worked as an Associate at Silver Lake Partners, a global private equity firm focused on technology-enabled investments. Mr. Stafman holds a B.S. in Economics, with a concentration in Finance, from The Wharton School at the University of Pennsylvania. | | | Qualifications: During his time at Sachem Head, Mr. Stafman has led prominent activist positions and software related investments. He previously worked in private equity at Silver Lake Partners. Mr. Stafman has extensive knowledge of corporate strategy in finance and corporate governance matters as a result of his investment and private equity background. |
Board Skills and Experience Matrix
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Board Skills and Experience Matrix
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Identifying and Evaluating Director Nominees
Identifying and Evaluating Director Nominees The board of directors has delegated to the nominating and corporate governance committee the responsibility of identifying suitable candidates for nomination to the board of directors (including candidates to fill any vacancies that may occur) and assessing their qualifications in light of the policies and principles in our corporate governance guidelines and the committee’s charter. The nominating and corporate governance committee uses a variety of methods for identifying and evaluating director nominees, including retaining a third-party search firm from time to time to identify and review candidates for membership on our board of directors. The nominating and corporate governance committee may gather information about the candidates through interviews, detailed questionnaires, comprehensive background checks or any other means that the nominating and corporate governance committee deems to be appropriate in the evaluation process. The nominating and corporate governance committee then meets as a group to discuss and evaluate the qualities and skills of each candidate, both on an individual basis and taking into account the overall composition and needs of the board of directors. Based on the results of the evaluation process, the nominating and corporate governance committee recommends candidates for the board of directors’ approval as director nominees for election to the board of directors. On March 2024, we entered into a cooperation agreement (the “Cooperation Agreement”) with Sachem Head Capital Management LP and certain of its affiliates (collectively, “Sachem Head”). Pursuant to the Cooperation Agreement, our board of directors appointed Andrew Stafman to the board of directors as a Class II director in March 2024 and Mr. Stafman was re-elected as a director by our stockholders at our 2024 annual meeting of stockholders. The Cooperation Agreement provides for customary director replacement rights, pursuant to which we and Sachem Head have agreed to cooperate to select a successor director in the event Mr. Stafman ceases to serve as a director. Our obligation with respect to the replacement of Mr. Stafman upon departure from the board of directors terminates in certain circumstances, including if Sachem Head’s aggregate net long position in the Company falls below 50% of its beneficial ownership of our outstanding shares of common stock as of the date of the Cooperation Agreement. The Cooperation Agreement will remain effective until the later of (i) 30 calendar days after the date on which Mr. Stafman (or any replacement director) has ceased to serve on our board of directors and (ii) one calendar day following the conclusion of the Annual Meeting. The foregoing description does not purport to be complete and is qualified in its entirety by reference to the Cooperation Agreement, a copy of which is filed as Exhibit 10.1 to our Current Report on Form 8-K filed with the SEC on April 1, 2024, and is incorporated by reference herein.
Non-Employee Director Compensation
Non-Employee Director Compensation
Non-Employee Director Compensation Policy
Non-Employee Director Compensation Policy We have adopted a compensation policy for our non-employee directors (as amended and restated from time to time, the “Non-Employee Director Compensation Policy”) to attract, retain and award these individuals and align their long-term interests with those of our company and our stockholders. Our non-employee directors are paid in the form of restricted stock units (“RSUs”) only and do not receive cash compensation. Employee directors receive no additional compensation for their service as a director. Decisions regarding the Non-Employee Director Compensation Policy are approved by our board of directors based on recommendations from our compensation committee. Our compensation committee conducts an annual evaluation of the design and competitiveness of our Non-Employee Director Compensation Policy in light of best practices, market trends and a competitive market analysis of data for our compensation peer group prepared by its compensation consultant, and makes appropriate recommendations to our board of directors with respect to the compensation of our non-employee directors. During 2024, our compensation committee engaged Compensia, Inc. (“Compensia”), a national compensation consulting firm, as its independent compensation consultant to advise on, among other things, non-employee director compensation matters. In doing so, our compensation committee reviewed and considered a peer group compensation data analysis prepared by Compensia to understand market non-employee director compensation practices. Following a review and consideration of market data, our compensation committee recommended to our board of directors, and our board of directors approved, that non-employee director compensation would continue to be paid solely in the form of RSUs and the value of such non-employee director compensation would remain unchanged from 2023 levels, except that our Non-Employee Director Compensation Policy was amended in light of our newly created independent board chair role to add an annual equity retainer for such role having a value of $75,000.
Non-Employee Director Compensation Policy
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Non-Employee Director Compensation Policy
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Non-Employee Director Compensation Policy
For purposes of the amounts described in this section, the values are calculated as set forth in the Non-Employee Director Compensation Policy. For the aggregate grant date fair value of the RSUs awarded to the non-employee directors in 2024, calculated in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 (“FASB ASC Topic 718”), please see “2024 Non-Employee Director Compensation Table” below. Annual Equity Grant and Annual Equity Retainer For 2024, our non-employee directors received compensation in the form of RSUs only. Pursuant to our Non-Employee Director Compensation Policy, each non-employee director who continues as a member of our board of directors following each annual meeting of stockholders receives a grant of RSUs having a value of $250,000 (the “Annual Equity Grant”). Each non-employee director also receives an annual equity retainer for board and committee membership, the values of which are as set forth below. The aggregate amount that each non-employee director receives for such director’s membership on our board of directors, as a member or chair of a committee, or as the independent board chair or lead independent director, is referred to as the “Annual Equity Retainer”.
Non-Employee Director Compensation Policy
| Annual Equity Retainer for Board Membership (the “Annual Board Retainer”)(1) | | $45,000 | | Additional Annual Equity Retainer for Independent Board Chair(1) | | $75,000 | | Additional Annual Equity Retainer for Lead Independent Director | | $30,000 | | Additional Annual Equity Retainer for Committee Membership: | Chair Retainer | Member Retainer | | Audit Committee | $26,000 | $13,000 | | Compensation and Talent Management Committee | $20,000 | $10,000 | | Nominating and Corporate Governance Committee | $12,000 | $6,000 |
Non-Employee Director Compensation Policy
| (1) In April 2025, our compensation committee conducted a review with Compensia of peer company board compensation trends, and our Non-Employee Director Compensation Policy was amended as follows: (i) the Annual Board Retainer was increased from $45,000 to $60,000 and (ii) the additional annual equity retainer for independent board chair was increased from $75,000 to $100,000. |
Non-Employee Director Compensation Policy
The Annual Equity Grant and Annual Equity Retainer are granted in four quarterly installments over the course of the year that commences on the date of each annual meeting of stockholders, with such grants to be made on each of September 15, December 15, March 15, and the earlier of (i) June 15 or (ii) the day that is immediately prior to the next subsequent annual meeting of stockholders (each such date, a “Quarterly Date,” and each such grant, a “Quarterly Grant”). The value of each Quarterly Grant is equal to the value of the portion of the Annual Equity Retainer and Annual Equity Grant applicable to the period beginning on the day after the immediately preceding Quarterly Date and ending on the then-current Quarterly Date (the “Quarterly Period”), based on the board and committee roles held by the non-employee director during such Quarterly Period. The number of RSUs granted for each Quarterly Grant is determined by dividing the applicable values by the average closing market price on NYSE of one share of our common stock over the trailing 30-day period ending five business days before the effective date of the applicable grant, rounded down to the nearest whole share. Each Quarterly Grant is fully vested upon the date of grant. Initial Equity Grants Our Non-Employee Director Compensation Policy during 2024 provided that, upon initial election to our board of directors, each non-employee director would be granted RSUs having a value of $575,000 (the “Initial Equity Grant”). The Initial Equity Grant vests in equal annual installments over three years, subject to continued service as a director through the applicable vesting dates; provided, however, that if a non-employee director is elected on a date other than at the annual meeting of stockholders, one-third of such value is pro-rated by the amount of time between such election and the next annual meeting of stockholders and such pro-rated portion vests on the day prior to the next annual meeting of stockholders (the “Initial Vesting Date”), with the other two-thirds vesting annually on the one and two-year anniversaries of the Initial Vesting Date over the following two years following such Initial Vesting Date.
Non-Employee Director Compensation Policy
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Non-Employee Director Compensation Policy
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Non-Employee Director Compensation Policy
During 2024, the number of RSUs for the Initial Equity Grant was determined by dividing the applicable value by the average closing market price on NYSE of one share of our common stock over the trailing 30-day period ending five business days before the effective date of the grant, rounded down to the nearest whole share. Other Non-Employee Director Compensation Terms Awards granted under our Non-Employee Director Compensation Policy are subject to full accelerated vesting upon a “sale event,” as defined in our 2016 Stock Option and Incentive Plan (as amended and restated, the “2016 Plan”). Our Non-Employee Director Compensation Policy also provides that, pursuant to the 2016 Plan, the aggregate amount of compensation, including both equity compensation and cash compensation but excluding expense reimbursement, paid to any non-employee director in a calendar year will not exceed $750,000 (or such other limit as may be set forth in the 2016 Plan or any similar provision of a successor plan). We also reimburse all reasonable out-of-pocket expenses incurred by our non-employee directors for their attendance at meetings of our board of directors or any committee thereof.
2024 Non-Employee Director Compensation Table
2024 Non-Employee Director Compensation Table The following table provides information regarding the total compensation that was earned by or paid to each of our non-employee directors in 2024, all of which was paid solely in RSUs. Neither Mr. Shipchandler nor Mr. Lawson, each of whom served as our Chief Executive Officer during his respective service on our board of directors, received any additional compensation for his service as a director. The compensation received by Mr. Shipchandler and Mr. Lawson, as named executive officers, is presented in “Executive Compensation—Summary Compensation Table.”
2024 Non-Employee Director Compensation Table
| Name | Stock awards ($)(1)(2) | Total ($) | | Charles Bell | 302,941 | 302,941 | | Donna Dubinsky | 301,890 | 301,890 | | Jeff Epstein | 391,167 | 391,167 | | Jeffrey Immelt | 313,756 | 313,756 | | Deval Patrick | 298,100 | 298,100 | | Erika Rottenberg | 312,998 | 312,998 | | Andrew Stafman(3) | 646,811 | 646,811 | | Miyuki Suzuki | 303,653 | 303,653 | | Byron Deeter(4) | 142,302 | 142,302 |
2024 Non-Employee Director Compensation Table
| (1) Stock awards consist solely of RSUs. Annual Equity Grants and Annual Equity Retainers vest immediately upon grant. Initial Equity Grants vest in equal annual installments over three years, subject to any pro-ration as described above. The amounts reported in this column represent the aggregate grant date fair value of the RSUs awarded to the non-employee directors in 2024, calculated in accordance with FASB ASC Topic 718. The valuation assumptions used in determining such amounts are described in the Notes to our Consolidated Financial Statements included in our Annual Report on Form 10-K filed with the SEC on February 26, 2025. As of December 31, 2024, each of Ms. Dubinsky and Messrs. Bell, Epstein and Patrick had elected to defer a portion of the RSUs issued pursuant to each of their Quarterly Grants, which DSUs are reflected in the table above for 2024 and in the total accumulated amounts in the table below. |
2024 Non-Employee Director Compensation Table
| (2) As of December 31, 2024, the non-employee directors who served on our board of directors during 2024 had the following outstanding equity awards, in addition to the DSUs set forth in the table below: Mr. Bell held 2,872 RSUs; Mr. Stafman held 6,376 RSUs; and Ms. Suzuki held 2,203 RSUs. |
2024 Non-Employee Director Compensation Table
| (3) Mr. Stafman was appointed to our board of directors on March 30, 2024 and received an Initial Equity Grant of 7,039 RSUs. |
2024 Non-Employee Director Compensation Table
| (4) Mr. Deeter did not stand for re-election at the 2024 Annual Meeting of Stockholders. Accordingly, his service as a director ended on June 6, 2024. |
2024 Non-Employee Director Compensation Table
The following table sets forth the aggregate number of DSUs accumulated in each director’s deferral account as of December 31, 2024 from deferrals of RSUs granted to them in 2024 or in prior years.
2024 Non-Employee Director Compensation Table
| Name | Accumulated DSUs | | Charles Bell | 11,502 | | Donna Dubinsky | 13,210 | | Jeff Epstein | 34,653 | | Deval Patrick | 12,897 |
2024 Executive Compensation Program Highlights
| • | Our 2024 PSU design featured a three-year performance period and new performance metrics: |
2024 Executive Compensation Program Highlights
2024 PSU grants vest based on the achievement of (i) three-year cumulative free cash flow targets (70% weighting) and (ii) our relative total stockholder return measured against the S&P 500 Index over a three-year period (30% weighting). No portion of these awards will be eligible to vest until 2027. These awards marked our transition away from the 2022 PSU design, which featured three separate annual performance periods.
2024 Executive Compensation Program Highlights
Following the first grants of performance-based cash awards in 2023, our compensation committee established a go-forward annual cash incentive plan for our executives and awarded 2024 target opportunities based on the achievement of (i) organic revenue growth targets (50% weighting) and (ii) non-GAAP income from operations targets (50% weighting). We decreased annual cash incentive opportunities for 2024 relative to 2023, and did not increase the base salaries of any of our named executive officers.
2024 Executive Compensation Program Highlights
| • | We continued to evolve our peer group to match our business profile and size: |
2024 Executive Compensation Program Highlights
We updated the peer group used to set 2024 compensation by adding more companies within the broader communications industry that also maintain software offerings to better align with our product offerings and removing several companies that significantly exceeded our market capitalization range to move us closer to the median on revenue and market capitalization, which had the effect of reducing our market compensation benchmarks. We continued this evolution for our 2025 compensation peer group, with updates designed in part to position us closer to the median of our peer group in terms of market capitalization and pursue overall balance between software companies and internet infrastructure and communications companies.
2024 Executive Compensation Program Highlights
The annual cash bonuses granted in 2024 paid out at 137.0% of target as a result of organic revenue growth of 8.7%, which was between target and maximum performance, and non-GAAP income from operations of $714.4 million, which exceeded maximum performance (performance for each metric was capped at 150%). The 2024 tranche of the PSUs granted in 2022 resulted in 0% payout due to organic revenue growth for 2024 of 8.7%, which was below the threshold amount.
2024 Executive Compensation Program Design
| Element | 2024 Design | Rationale | | Base Salary | No increases from 2023 levels | Our compensation committee believed our named executive officer base salaries were competitive and did not increase the base salaries of any of our named executive officers from their 2023 levels. | | Annual Cash-Based Incentive | Target awards set at 100% of base salary with 150% maximum payout under new go-forward annual cash bonus plan, with the following performance metrics: (i) organic revenue growth (50% weighting); and (ii) non-GAAP income from operations (50% weighting) | Annual cash bonuses were granted under our annual cash bonus plan adopted in late 2023. Target opportunities for 2024 were lower than the annual cash incentives awarded for 2023, consistent with our desire to transition cash compensation closer to market norms. These awards were intended to incentivize near-term performance on our key growth and profitability goals, which are critical to our long-term ability to create stockholder value, and further our retention objectives, as well as our desire to reduce stock-based compensation expense. | | Long-Term Incentive | PSUs with vesting tied to performance against three-year performance period: (i) free cash flow (70% weighting); and (ii) relative total stockholder return measured against the S&P 500 Index over the performance period (30% weighting) RSUs with four-year vesting period | We granted PSUs in 2024 as part of our transition to regular annual grants of long-term performance-based equity going forward, which is designed to foster alignment with our long-term performance results and stockholder interests. We also granted RSUs with a four-year time-based vesting period to encourage executive retention and further focus on creating long-term stockholder value. The Chief Executive Officer’s weighting of 60% PSUs and 40% RSUs reflects his role having the greatest impact among our named executive officers on our performance outcomes. The weighting of the equity awards granted to our other named executive officers in 2024, 40% PSUs and 60% RSUs, ties their incentives meaningfully to performance outcomes while emphasizing ongoing retention and stability. |
Executive Compensation Policies and Practices
| Element | Compensation Element | Objective | | Base Salary | Cash | Attract and retain highly talented executives by providing fixed compensation amounts that are competitive in the market. | | Short-Term Incentives | Annual cash bonus | Strengthen the performance-based core of our compensation program and enhance retention. Motivate executive officers to achieve annual performance goals that serve as the basis for long-term performance and stockholder value creation. Cash serves as an effective motivator in periods of market volatility while also reducing compensation-related stockholder dilution. | | Long-Term Incentives | Equity awards generally in the form of RSUs and PSUs | Align the interests of executive officers and stockholders by motivating our executive officers to achieve long-term stockholder value creation. Strengthen pay-for-performance and enhance retention. |
Executive Compensation Policies and Practices
| WHAT WE DO | WHAT WE DON’T DO | | Maintain an Independent Compensation Committee Our compensation committee consists solely of independent, non-employee directors. Retain an Independent Compensation Advisor Our compensation committee has engaged its own independent compensation advisor to provide information, analysis and other advice on executive compensation independent of management. Annual Executive Compensation Review Our compensation committee conducts an annual review of our compensation strategy, including a review of our compensation peer group used for comparative and benchmarking purposes. Annual Compensation-Related Risk Assessment Our compensation committee reviews, on an annual basis, our compensation-related risk profile. Stock Ownership Policy We maintain a robust stock ownership policy for our Chief Executive Officer, our other named executive officers and the non-employee members of our board of directors. Clawback Policy We maintain a compensation recovery (“clawback”) policy that complies with NYSE and SEC rules. | No Excise Tax Payments on Future Post-Employment Compensation Arrangements We do not provide any excise tax reimbursement payments (including “gross-ups”) with respect to payments or benefits contingent upon a change in control of our company. No Option Repricing We prohibit stock option repricing without stockholder approval. No Hedging We prohibit our employees, including our executive officers, and the non-employee members of our board of directors from engaging in hedging transactions or certain derivative transactions relating to our securities. No Pledging We prohibit our employees, including our executive officers, and the non-employee members of our board of directors from holding our securities in a margin account or pledging our securities as collateral for a loan. No Special Welfare or Health Benefits We do not provide our executive officers with any special welfare or health benefit programs, and participation in the employee programs that are standard in our industry sector is on the same basis as all of our full-time employees. |
Executive Compensation Philosophy
| • | effectively align our executive officers’ interests with the interests of our stockholders by heavily weighting long-term equity incentives that correlate with the growth of sustainable long-term value for our stockholders; and |
Executive Compensation Philosophy
| • | attract, motivate, incentivize and retain employees at the executive level by providing competitive compensation to those who contribute to our long-term success. |
Compensation-Setting Process
| • | our financial performance relative to our compensation peer group; |
Compensation-Setting Process
| • | the compensation levels and practices of our compensation peer group; |
Compensation-Setting Process
| • | our desire to retain experienced and talented executives in a highly competitive market, including consideration of the retentive value of our executives’ existing outstanding equity awards; |
Compensation-Setting Process
| • | the scope of each individual executive officer’s role compared to other similarly situated executives at the companies in our compensation peer group and in selected broad-based compensation surveys; |
Compensation-Setting Process
These factors provide the framework for compensation decision-making and final decisions regarding the compensation opportunity for each executive officer. No single factor is determinative in setting pay levels, nor was the impact of any factor on the determination of pay levels quantifiable. Our compensation committee reviews the base salary levels, short-term and long-term incentive compensation opportunities of our executive officers, including our named executive officers, each year at the beginning of the year, or more frequently as warranted. Long-term incentive compensation is granted on a regularly-scheduled basis, as described in “Other Compensation Policies and Practices—Equity Award Grant Policy” below.
Role of Compensation Consultant
Role of Compensation Consultant Our compensation committee engages an external independent compensation consultant to assist it by providing information, analysis and other advice relating to our executive compensation program and the decisions resulting from its annual executive compensation review. For 2024, our compensation committee engaged Compensia as its compensation consultant to advise on executive compensation matters, including competitive market pay practices for our executive officers, the selection of our compensation peer group, and data analysis. For 2024, the scope of Compensia’s engagement included:
Role of Compensation Consultant
| • | researching, developing and reviewing our compensation peer group; |
Role of Compensation Consultant
| • | reviewing and analyzing the compensation for our executive officers, including our named executive officers; |
Role of Compensation Consultant
| • | reviewing and providing input on the Compensation Discussion and Analysis section of our proxy statement for our 2024 annual meeting of stockholders; |
Role of Compensation Consultant
| • | reviewing and analyzing the compensation of the non-employee members of our board of directors; |
Role of Compensation Consultant
| • | reviewing short-term and long-term incentive compensation practices and considerations; |
Role of Compensation Consultant
| • | advising on executive severance and change in control practices; |
Role of Compensation Consultant
| • | reviewing our executive compensation philosophy; |
Role of Compensation Consultant
| • | conducting a compensation risk assessment; and |
Role of Compensation Consultant
| • | supporting other ad hoc matters throughout the year. |
Role of Compensation Consultant
The terms of Compensia’s engagement included reporting directly to our compensation committee and to the chair of our compensation committee. Compensia also coordinated with our management for data collection and job matching for our
Role of Compensation Consultant
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Role of Compensation Consultant
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Role of Compensation Consultant
executive officers and provided data and analyses in connection with the review of our equity strategy. In 2024, Compensia did not provide any other services to us. In April 2024, our compensation committee evaluated Compensia’s independence pursuant to the NYSE Listing Standards and the relevant SEC rules and determined that no conflict of interest had arisen as a result of the work performed by Compensia.
Use of Market Data
Use of Market Data For purposes of comparing our executive compensation against the competitive market, our compensation committee reviews and considers the compensation levels and practices of a group of peer companies. This compensation peer group consists of technology companies that are similar to us in terms of industry, revenue and market capitalization. Our compensation committee reviews our compensation peer group at least annually and makes adjustments to its composition if warranted, taking into account changes in both our business and the businesses of the companies in the peer group, and input from its compensation consultant. In developing the compensation peer group for 2024, the following criteria were evaluated in identifying comparable companies:
Use of Market Data
| • | similar industry and competitive market for talent; |
Use of Market Data
| • | within a range of 0.33x to 3.0x of our revenue for the last four fiscal quarters (as of August 2023); and |
Use of Market Data
| • | within a range of 0.25x to 4.0x of our then-trailing 30 day average market capitalization. |
Use of Market Data
In September 2023, our compensation committee reviewed our compensation peer group and upon the recommendation of its compensation consultant, taking into consideration the criteria noted above, removed Block, Inc., Palo Alto Networks, Inc., Paycom Software, Inc., ServiceNow, Inc., Shopify Inc., Synopsys, Inc., The Trade Desk, Inc., Veeva Systems Inc. and Workday, Inc., and added Akamai Technologies, Inc., AppLovin Corporation, Cloudflare, Inc., Dropbox, Inc., Dynatrace, Inc., GoDaddy Inc., HubSpot, Inc., Nutanix, Inc. and Ubiquiti Inc. Our compensation committee determined that these updates would add more companies within the broader communications industry that also maintain software offerings to better align with our product offerings and remove several companies that significantly exceeded our market capitalization range, and that the removal of these companies would appropriately reduce market compensation benchmarks. Our compensation committee also considered stockholder feedback that supported these updates. The peer group for 2024, which was approved by our compensation committee in September 2023, consisted of the following companies:
Use of Market Data
| Akamai Technologies, Inc. | CrowdStrike Holdings, Inc. | Hubspot, Inc. | Splunk Inc. | | Ansys, Inc. | DocuSign, Inc. | Nutanix, Inc. | Ubiquiti Inc. | | AppLovin Corporation | Dropbox, Inc. | Okta, Inc. | Zoom Communications, Inc. | | Arista Networks, Inc. | Dynatrace, Inc. | RingCentral, Inc. | | | Autodesk, Inc. | Fortinet, Inc. | Snap Inc. | | | Cloudflare, Inc. | GoDaddy Inc. | Snowflake Inc. | |
Use of Market Data
Our compensation committee uses data drawn from our compensation peer group, as well as data from the Radford Global Technology executive compensation survey (the “Radford Survey”), to evaluate the competitive market when formulating its recommendation for the total direct compensation packages for our executive officers, including base salary and long-term incentive compensation opportunities. The Radford Survey provides compensation market intelligence and is widely used within the technology industry. In addition, subsets of the Radford Survey were incorporated into the competitive assessment prepared by Compensia and used by our compensation committee to evaluate the compensation of our executive officers. Specifically, our compensation committee received a custom report of survey results reflecting only companies from our compensation peer group in addition to survey results tailored solely based on revenue. The Radford Survey data supplements the compensation peer group data and provides additional information for our named executive officers and other executive positions for which there is less comparable public data available.
Use of Market Data
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2025 Peer Group Changes
2025 Peer Group Changes In response to stockholder feedback received in 2024, our compensation committee further refined our peer group in September 2024 for reference in setting 2025 compensation, adding more cloud-based software companies that would improve our market capitalization positioning within our peer group to be closer to the median, while pursuing balance overall between software companies and those focused more on internet infrastructure and communications, and removing several companies that significantly exceeded our market capitalization range and one company that was acquired. The updates include removing Arista Networks, Inc., CrowdStrike Holdings, Inc. and Splunk Inc., and adding Informatica Inc., Teradata Corp. and UiPath, Inc.
Annual Cash Incentives
Annual Cash Incentives Annual Cash Bonus Plan We adopted an executive incentive compensation plan (“Cash Bonus Plan”) in late 2023 to formalize our use of annual cash incentives for 2024. We considered a number of factors in approving this transition to annual cash bonuses, including stockholder feedback and our objectives with respect to incentives, retention and reducing compensation-related stockholder dilution. For 2024, we reduced stock-based compensation expense as a percentage of revenue by over 700 basis points as compared to 2022. Pursuant to the Cash Bonus Plan, our compensation committee has discretion to approve target cash awards to be paid out based upon the achievement of performance goals, to be determined by the compensation committee, over a specified performance period. 2024 Cash Bonus Awards In connection with our Chief Executive Officer’s promotion in January 2024, and in April 2024 for our remaining named executive officers, our compensation committee approved target annual bonuses pursuant to the Cash Bonus Plan, expressed as a percentage of base salary, for each executive with payouts to be based upon financial performance goals achieved during the 2024 performance period. The 2024 target annual cash bonuses were approved upon consideration of a number of factors, including the importance of incentivizing our executives to achieve near-term results to support our long-term business objectives, and our desires to retain top executive talent and to reduce the dilutive impact of our executive compensation program, as well as stockholder feedback in favor of our annual cash bonus program. Each of our named executive officers had an initial target annual bonus opportunity equal to 100% of base salary and maximum payout opportunities capped at 150% of base salary. Our 2024 target annual bonuses reflected a year-over-year decrease in annual cash incentive compensation, aimed at transitioning our cash compensation levels closer to market norms while continuing to provide meaningful incentives focused on near-term performance on our key growth and profitability goals. Our compensation committee also considered our near-term retention objectives, market volatility and recent stock price performance as well as our desire to reduce stock-based compensation expense in establishing the target bonus opportunities. The target amounts of the 2024 annual cash bonuses for our named executive officers were as follows:
Annual Cash Incentives
| Named Executive Officer(1) | Target Bonus Opportunity (% Base Salary) | Target Bonus Opportunity | | Khozema Shipchandler | 100% | $1,100,000 | | Aidan Viggiano | 100% | $850,000 | | Dana Wagner | 100% | $600,000 |
Annual Cash Incentives
| (1) Mr. Lawson’s departure preceded the 2024 annual cash bonus awards. |
Annual Cash Incentives
After evaluation of multiple potential metrics, for 2024 our compensation committee determined that targets for (i) organic revenue growth (50% weighting) and (ii) non-GAAP income from operations (50% weighting) were the strongest incentive metrics for the 2024 cash bonuses, representing key measures of our long-term success that are closely followed by investors in assessing our performance outlook. In selecting organic revenue growth, our compensation committee considered, among other factors, that the measure serves as a forecastable near-term objective in furtherance of our growth objectives, as well as stockholder feedback and peer bonus plan structures. In selecting non-GAAP income from operations, our compensation committee considered, among other factors, that the measure is more correlated with stockholder value creation than either growth or profitability as standalone metrics, and serves as a near-term objective in furtherance of our profitability and free cash flow generation goals, as well as stockholder feedback and peer bonus plan structures. Our compensation committee determined to evenly weight the two measures consistent with our focus on profitable growth. In April 2024, our compensation committee approved the threshold, target and maximum performance levels for both metrics aligned to our external guidance announced in March 2024 of 5%-10% organic revenue growth and $550-600 million non-GAAP income from operations for 2024. These targets were based on our internal forecasts at the beginning of the year, which, relative to past performance, reflected macroeconomic volatility and an evolving operating environment while we took
Annual Cash Incentives
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Annual Cash Incentives
several steps to transition our business toward achieving durable, profitable growth. The targets were designed to be rigorous, requiring substantial year-over-year growth in organic revenue and non-GAAP income from operations and performance at or above the mid-point of our announced guidance ranges to achieve target payouts. Additionally, the maximum total payout was capped at 150% of the target bonus opportunity. The performance goals for the 2024 annual cash bonuses are as follows:
Annual Cash Incentives
| Performance Metric | Threshold Performance (50% Payout)(1) | Target Performance (100% Payout)(1) | Maximum Performance (150% Payout)(1) | Weighting | Rationale | | Organic Revenue Growth(2) | 5.0% | 7.5% | 10.0% | 50% | • Key measure of long-term success • Supports our growth objectives • Stockholder feedback | | Non-GAAP Income from Operations(2) | $550 million | $600 million | $700 million | 50% | • Key measure of long-term success • Supports our profitability and free cash flow generation objectives • Correlation with stockholder value |
Annual Cash Incentives
| (1) For each measure, no payout would be earned for such measure for achievement below the threshold indicated above. For performance at or above the threshold, the payout would be between 50% and 150% of the target bonus opportunity for each measure, interpolated on a straight-line basis between threshold and target and between target and maximum. The maximum total payout could not exceed 150% of the target bonus opportunity. |
Annual Cash Incentives
| (2) Organic revenue growth and non-GAAP income from operations are non-GAAP financial measures. See Appendix D for non-GAAP definitions and reconciliations. |
Annual Cash Incentives
In February 2025, our compensation committee certified achievement of the following levels of performance for 2024:
Annual Cash Incentives
| Performance Metric | Actual | Performance Goal Payout Percentage | | Organic Revenue Growth(1) | 8.7% | 124.0% | | Non-GAAP Income from Operations(1) | $714.4 million | 150.0% | | Total Performance Goal Payout Percentage | | 137.0% |
Annual Cash Incentives
| (1) Organic revenue growth and non-GAAP income from operations are non-GAAP financial measures. See Appendix D for non-GAAP definitions and reconciliations. |
Annual Cash Incentives
Based on the level of achievement of these performance objectives, in February 2025 our compensation committee approved the following payouts to our named executive officers:
Annual Cash Incentives
| Named Executive Officer(1) | Payout | Payout as % of Target | | Khozema Shipchandler | $1,507,000 | 137% | | Aidan Viggiano | $1,164,500 | 137% |
Annual Cash Incentives
| (1) Mr. Wagner’s employment ended on January 1, 2025 and as a result, he did not receive a cash bonus payout. |
Annual Cash Incentives
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Annual Cash Incentives
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Long-Term Incentive Compensation
Long-Term Incentive Compensation We view long-term incentive compensation in the form of equity awards as a critical element of our executive compensation program. The realized value of these equity awards bears a direct relationship to our stock price, and, therefore, these awards are an incentive for our executive officers, including our named executive officers, to create value for our stockholders. Equity awards also help us retain qualified executive officers in a competitive market. Long-term incentive compensation opportunities in the form of equity awards are granted by our compensation committee on a regularly-scheduled basis, as described in “Other Compensation Policies and Practices—Equity Award Grant Policy” below. All equity awards are settleable for shares of our Class A common stock. The amount and forms of such equity awards are determined by our compensation committee after considering the factors described in “Oversight of Executive Compensation Program—Compensation-Setting Process” above. The amounts of the equity awards are also intended to provide competitively-sized awards and resulting target total direct compensation opportunities that are competitive with the compensation opportunities offered by the companies in our compensation peer group and Radford Survey data for similar roles and positions for each of our executive officers, taking into consideration the factors described in “Oversight of Executive Compensation Program—Compensation-Setting Process” above. 2024 Annual Equity Awards In 2024, our compensation committee determined to grant annual equity awards (the “2024 Annual Equity Awards”) in the form of a combination of performance-based RSUs (the “2024 Annual PSUs”) and time-based RSUs (the “2024 Annual RSUs”). Our reintroduction of PSUs in 2024, now with a longer performance period and new performance metrics, was part of our continued adaptation of performance-based incentives to better align with stockholder expectations and industry standards. We expect the structure of our go-forward equity compensation program to have a similar structure as our 2024 Annual Equity Awards. In April 2024, our compensation committee awarded 2024 Annual PSUs to our named executive officers to support the successful execution of our profitable growth initiatives and to respond to stockholder feedback on our 2022 compensation program and PSU structure as described under “2022 Annual Equity Awards” below. Our 2024 Annual PSUs are part of our transition to regular annual grants of long-term performance-based equity going forward. The 2024 Annual PSUs have a three-year performance period from 2024-2026 and are scheduled to vest based on the achievement of (i) three-year cumulative free cash flow targets (70% weighting) and (ii) our relative total stockholder return measured against the S&P 500 Index over a three-year period (30% weighting), which structure reflects feedback from our stockholders. The S&P 500 Index was selected due to its breadth, maturity and financial characteristics. No portion of the 2024 Annual PSUs will be eligible to vest until 2027, to foster alignment with our long-term performance results and stockholder interests. Our compensation committee determined that free cash flow and relative total stockholder return were the most appropriate performance measures to drive long-term performance while aligning executive incentives with the significant changes we have made to our business aimed at delivering profitable growth. Our compensation committee evaluated multiple potential metrics when determining which performance metrics for the 2024 Annual PSUs best supported our profitable growth initiatives – including internal financial and operational metrics as well as external stock return metrics – and also considered stockholder feedback and industry standards. In addition to the 2024 Annual PSUs, each named executive officer received an award of 2024 Annual RSUs in February 2024. We believe time-based RSUs provide a strong retention incentive for our executive officers, align compensation realized by our executives with stockholder value creation, and motivate our executive officers to achieve long-term stockholder value. The 2024 Annual RSUs were granted in February 2024 and vest over four years in equal quarterly installments between March 31, 2024 and March 31, 2028, subject to the executive’s continued service through the applicable vesting date. In determining this vesting schedule, our compensation committee considered, among other factors, peer equity compensation practices as well as our combination of short-term and long-term executive retention and incentive goals. In determining the value and structure of Mr. Shipchandler’s 2024 Annual Equity Awards, in addition to the factors described under “Oversight of Executive Compensation Program—Compensation-Setting Process,” the compensation committee considered his promotion to Chief Executive Officer and the importance of incentivizing Mr. Shipchandler to successfully navigate this critical transformation period for our company, as well as peer Chief Executive Officer sign-on benchmarks, together with Mr. Shipchandler’s existing outstanding equity awards, and the cost of attracting a new external Chief Executive Officer. Mr. Shipchandler’s promotion was part of our long-term leadership development and succession planning strategy, The award was intended to immediately align Mr. Shipchandler’s interests with those of our stockholders, incentivize long-term
Long-Term Incentive Compensation
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Long-Term Incentive Compensation
stockholder value creation and provide strong retentive value, taking into account the retentive value of Mr. Shipchandler’s existing outstanding equity awards. The 2024 PSUs granted to Mr. Shipchandler were our first equity incentive grants tied to a multi-year financial and relative stockholder return performance period, which we believe represented a strong opportunity to closely align Mr. Shipchandler’s incentives as our new Chief Executive Officer with the key long-term business objectives that we are aiming to achieve under his leadership. The compensation committee determined to grant Mr. Shipchandler’s equity award in the form of 60% PSUs and 40% RSUs to recognize his role as having the greatest impact on the Company’s performance outcomes among our named executive officers. Following his promotional year in 2024, in 2025, the compensation committee determined that Mr. Shipchandler’s annual equity award would be reduced to $20,500,000 in approved target value for 2025, structured as 60% PSUs and 40% RSUs. The equity awards granted to our other named executive officers in 2024 were 40% PSUs and 60% RSUs. This design, and the magnitude of such awards, was in line with the compensation committee’s objective of promoting continuity and stability within our broader leadership team during this period of transition and transformation. Our compensation committee will continue to assess our incentive compensation structure in future award cycles in light of market conditions and our stock price performance. The following table sets forth the 2024 Annual Equity Awards that our compensation committee granted in February 2024 and April 2024 to our named executive officers as part of its annual executive compensation review.
Long-Term Incentive Compensation
| Named Executive Officer | PSUs (number of shares at target performance) | RSUs (number of shares) | Aggregate Grant Date Fair Value ($)(1) | | Khozema Shipchandler(2) | 245,716 | 139,344 | 24,388,514 | | Aidan Viggiano | 58,972 | 75,143 | 8,360,364 | | Dana Wagner(3) | 32,763 | 41,746 | 4,644,690 | | Jeff Lawson(4) | — | — | — |
Long-Term Incentive Compensation
| (1) The amounts reported in this column represent the aggregate grant date fair value of the PSUs and RSUs granted to the named executive officer in 2024, calculated in accordance with FASB ASC Topic 718. Such aggregate 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 may be realized from such awards. The amounts reported for the RSUs were calculated using the closing price of our common stock on the date of grant. The amounts reported for the PSUs assume the probable outcome of the applicable performance conditions on the date of grant. The valuation assumptions used in determining such amounts are described in the Notes to our Consolidated Financial Statements included in our Annual Report on Form 10-K filed with the SEC on February 26, 2025 and further described in footnote 1 to the “Summary Compensation Table” below. |
Long-Term Incentive Compensation
| (2) In connection with his promotion to Chief Executive Officer, we entered into an employment agreement with Mr. Shipchandler, which provided for an initial equity grant to Mr. Shipchandler as set forth in this table. |
Long-Term Incentive Compensation
| (3) Mr. Wagner’s employment ended on January 1, 2025 and as a result, his then unvested 2024 Annual Equity Awards were forfeited on such date. |
Long-Term Incentive Compensation
| (4) Mr. Lawson’s employment ended on January 12, 2024 and he did not receive any equity awards in 2024. |
Long-Term Incentive Compensation
The 2024 Annual PSUs vest based on the achievement over a three-year performance period covering 2024 through 2026 of (i) cumulative free cash flow targets (70% weighting) and (ii) our relative total stockholder return measured against the S&P 500 Index (30% weighting). Each metric operates and is measured independently. Targets were intended to be rigorous and require strong performance to achieve. Our relative TSR performance goals were designed to require outperformance against the broader market to achieve a target payout, and our free cash flow goals reflect consideration of internal forecasts at the time such goals were set and took into account macroeconomic volatility and an evolving operating environment while we took several steps to transition our business toward achieving durable, profitable growth. For reference, in May 2024 we announced external free cash flow guidance for 2024 of $585-$635 million. Vesting of these PSUs may range between 0% for below threshold performance and up to 200% of target based on levels of performance at or above threshold. Notwithstanding the foregoing, if our total stockholder return during the performance period is negative, then performance and vesting will be capped at 100% of the number of target shares subject to that performance goal, regardless of actual performance relative to the S&P 500 Index. The free cash flow goal would continue to scale independently up to 200% of its respective target shares.
Long-Term Incentive Compensation
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Long-Term Incentive Compensation
The free cash flow and relative total stockholder return levels for the 2024 Annual PSUs, which were approved by our compensation committee in April 2024, are set forth below.
Long-Term Incentive Compensation
| | 2024-2026 Performance Period | | | | | Performance Metric | Threshold (50% Payout)(1) | Target (100% Payout)(1) | Maximum (200% Payout)(1)(2) | Weighting | | Free Cash Flow(3) | $1.8 Billion | $2.1 Billion | $2.4 Billion | 70% | | Relative Total Stockholder Return(2) | 30th Percentile | 55th Percentile | 80th Percentile | 30% |
Long-Term Incentive Compensation
| (1) For each measure, no portion of the award will vest for achievement below the threshold indicated above. For performance at or above the threshold, vesting will be between 50% and 200% of the target award (subject, in the case of relative total stockholder return, to the limitation described in Note 2 below), interpolated on a straight-line basis for performance between threshold, target and maximum. Each performance goal scales independently. |
Long-Term Incentive Compensation
| (2) If our total stockholder return during the performance period is negative, then performance and vesting will be capped at 100% of the number of target shares subject to that performance goal, regardless of actual performance relative to the S&P 500 Index. The free cash flow goal would continue to scale independently up to 200% of its respective target shares. |
Long-Term Incentive Compensation
| (3) Free cash flow is a non-GAAP financial measure. See Appendix D for non-GAAP definitions and reconciliations. |
Long-Term Incentive Compensation
2022 PSUs – 2024 Tranche We first introduced PSUs in 2022 (the “2022 PSUs”) in an effort to incorporate additional long-term, performance-based incentives into our compensation structure, based in part on stockholder feedback. These awards were designed with a front-loaded multiyear performance component so as to provide meaningful retentive and incentive value amid a challenging and volatile macro environment. Consistent with the intended front-loaded design of this program, we did not grant annual PSUs in 2023, resuming PSU grants in 2024 as described above. The 2022 PSUs were scheduled to vest over a three-year period based on the annual achievement of organic revenue growth and, for the 2023 and 2024 performance period, non-GAAP income from operations performance targets. The performance goals were designed to be challenging, as evidenced by the fact that there was 0% payout for the 2023 and 2024 tranches due to the organic revenue growth target not being met. The 2024 tranche of the 2022 PSUs was scheduled to vest if both (i) the minimum organic revenue growth threshold and (ii) the non-GAAP income from operations threshold were achieved for 2024. If either metric did not meet threshold performance, the tranche would be forfeited. Vesting of these PSUs could range between 0% for below threshold performance and up to 200% of target based on levels of performance at or above threshold. The organic revenue growth levels for our 2022 PSUs’ 2024 performance period are set forth below. Additionally, at least one dollar of non-GAAP income from operations was required to be achieved.
Long-Term Incentive Compensation
| Payout Level | Organic Revenue Growth(1) | Non-GAAP Income from Operations(1) | Payout of (Percentage of Target Shares)* | | Maximum | 40% | ≥$1.00 | 200% | | Target | 30% | ≥$1.00 | 100% | | Threshold | 20% | ≥$1.00 | 50% | | | <20% | ≥$1.00 | 0% |
Long-Term Incentive Compensation
| * Subject to linear interpolation for performance between threshold, target and maximum. |
Long-Term Incentive Compensation
| (1) Organic revenue growth and non-GAAP income from operations are non-GAAP financial measures. See Appendix D for non-GAAP definitions and reconciliations. |
Long-Term Incentive Compensation
Organic revenue growth for 2024 was 8.7% and non-GAAP income from operations was $714.4 million which resulted in 0% payout for the 2024 tranche of the 2022 PSUs due to the organic revenue growth result falling below the threshold amount, evidencing the rigorous targets set by our compensation committee. Our compensation committee certified performance in February 2025 and any PSUs subject to the 2022 PSUs that had not vested as of such date were forfeited.
Long-Term Incentive Compensation
| 60 | 2025 Proxy Statement |
Long-Term Incentive Compensation
| | EXECUTIVE COMPENSATION Compensation Discussion and Analysis |
Long-Term Incentive Compensation
As noted above, the 2024 performance period was the third and final performance period that applied to the 2022 PSUs. The performance goals applicable to the 2022 PSUs were satisfied only in the 2022 performance period, resulting in a 98.5% payout (of target) for the first tranche of the 2022 PSUs, and overall, a less than 33% payout (of target) of the target number of shares subject to the 2022 PSUs, illustrating the challenging nature of the performance targets.
2025 Performance-Vesting Equity Update
2025 Performance-Vesting Equity Update Consistent with the structure of the 2024 PSUs, in February 2025, our compensation committee approved annual executive PSU awards (the “2025 PSUs”) that vest based on the achievement over a three-year performance period covering 2025 through 2027 of (i) cumulative free cash flow targets (70% weighting) and (ii) our relative total stockholder return measured against the S&P 500 Index (30% weighting). The performance targets for the 2025 PSUs, set forth below, were designed to be rigorous and reflect consideration of the Company’s growth momentum, margin expansion, and new product innovation.
2025 Performance-Vesting Equity Update
| • | Free Cash Flow (2025-2027): Threshold—$2.75 Billion (50% Payout); Target—$3.25 Billion (100% Payout); and Maximum—$3.5 Billion (200% Payout) |
2025 Performance-Vesting Equity Update
| • | Relative Total Stockholder Return (2025-2027): Threshold – 30% (50% Payout); Target—55% (100% Payout); and Maximum—80% (200% Payout) |
Former Chief Executive Officer Compensation
Former Chief Executive Officer Compensation Effective January 8, 2024, we appointed Khozema Shipchandler as our new Chief Executive Officer to lead the Company forward. In connection with the departure of our former Chief Executive Officer, we entered into a separation agreement with Mr. Lawson dated January 7, 2024 (the “Lawson Separation Agreement”). In determining the benefits and payments to Mr. Lawson in connection with his departure, our compensation committee intended to facilitate an effective and smooth transition of Mr. Lawson’s duties to Mr. Shipchandler in consideration of the significant strategic and operational changes underway, and to ensure access to Mr. Lawson and his institutional knowledge accumulated as the Company’s co-founder and longstanding Chief Executive Officer. The compensation committee believed this represented a reasonable outcome in light of the benefits to the Company provided by the Lawson Separation Agreement and to be in the best interests of the Company and our stockholders. The Lawson Separation Agreement contains a customary release of claims and as consideration for the agreement provides that Mr. Lawson (1) received a lump sum cash payment equal to $99,840, (2) had his outstanding and unvested equity awards covering 68,124 shares of common stock that were subject to time-based vesting immediately vest in full and, if applicable, become exercisable as to 100% of those awards, (3) received an extension of the exercise period of his vested stock options until the earliest to occur of: (i) the three-year anniversary of his separation date, (ii) the applicable expiration date of the applicable stock option, or (iii) such earlier date as provided or permitted under the applicable equity plan, and (4) received $45,949 representing cash payment equal to 18 months of the employer portion of Mr. Lawson’s monthly COBRA premiums. For additional information with respect to compensation paid to Mr. Lawson during 2024, see the “Summary Compensation Table” below. Also in connection with our Chief Executive Officer transition, we entered into an employment agreement with Mr. Shipchandler, which is described under “Executive Compensation Tables—Employment Agreements or Offer Letters with Named Executive Officers” below.
Post-Employment Compensation Arrangements
Post-Employment Compensation Arrangements We believe that having in place reasonable and competitive post-employment compensation arrangements is essential to attracting and retaining highly qualified executive officers. Our Chief Executive Officer participates in our CEO Severance Plan and our other current named executive officers participate in our Senior Executive Severance Plan (collectively, the “Executive Severance Plans”). The Executive Severance Plans, as discussed in more detail in “Executive Compensation Tables—Potential Payments Upon Termination or Change in Control—Executive Severance Plans” below, are designed to help ensure the continued service of key executive officers in the event of a potential acquisition, to provide reasonable compensation to named executive officers who leave our employ under specified circumstances and to align the interests of our named executive officers and our stockholders when considering our long-term future. We believe that the severance payments and benefits provided to our named executive officers under the Executive Severance Plans are appropriate in light of the post-employment compensation protections available to similarly-situated executive officers at companies in our compensation peer group and are an important component of each named executive officer’s overall compensation as they help us to attract and retain our key executives who could have other job alternatives that may appear to them to be more attractive absent these protections. We also believe that the occurrence or potential occurrence of a change in control transaction will create uncertainty regarding the continued employment of our named executive officers. In order to encourage them to remain employed with us during an important time when their prospects for continued employment following the transaction are often uncertain, we provide our named executive officers with the opportunity to receive additional severance protections during a change in control protection period. In addition, we provide additional payment and benefit protections if a named executive officer voluntarily terminates employment with us for good reason, because we believe that a voluntary termination of employment for good reason is essentially equivalent to an involuntary termination of employment by us without cause. The primary purpose of these arrangements is to keep our most senior executive officers focused on pursuing potential corporate transactions that are in the best interests of our stockholders regardless of whether those transactions may result in their own job loss. Reasonable post-acquisition payments and benefits should serve the interests of both the named executive officer and our stockholders.
Other Compensation Policies and Practices
Other Compensation Policies and Practices Equity Award Grant Policy Under our Amended and Restated Equity Award Grant Policy, we generally grant equity awards on a regularly scheduled basis to enhance the effectiveness of our internal control over our equity award grant process and to alleviate several of the burdens related to accounting for such equity awards, as follows:
Other Compensation Policies and Practices
| • | Any grants of equity awards made in conjunction with the hiring of a new employee or the promotion of an existing employee will generally be made, if at all, regularly (either monthly or quarterly) and will be effective on the date such grant is approved by our board of directors or our compensation committee or such future date as is approved by our board of directors or our compensation committee. In no event will the effective date of an equity award made in conjunction with the hiring of a new employee precede the date such grant is approved or the first date of employment. |
Other Compensation Policies and Practices
| • | Any grants of equity awards to existing employees (other than in connection with a promotion) will generally be made, if at all, on an annual or quarterly basis. Any such annual or quarterly grant will be effective on the date on which such grant is approved or such future date as is approved by our board of directors or our compensation committee. |
Other Compensation Policies and Practices
| • | All equity awards will be priced on the effective date of the award. The exercise price of all stock options will be equal to (or, if specified in the approval of the award, greater than) the closing market price on the NYSE of one share of our common stock on the effective date of grant, or, if no closing price is reported for such date, the closing price on the last day preceding such date for which a closing price is reported. If the grant of restricted stock, RSUs or PSUs is denominated in dollars, the number of shares of restricted stock, RSUs or PSUs that are granted will generally be calculated by dividing the dollar value of the approved award by the average closing market price on the NYSE of one share of our common stock over the trailing 30-day period ending five business days immediately prior to the effective date of grant, with such total number of shares to be granted per recipient rounded up to the nearest whole share. |
Other Compensation Policies and Practices
| • | Our board of directors or our compensation committee may delegate to our Chief Executive Officer and/or any other executive officer, or a committee comprising at least two of our executive officers, all or part of the authority with respect to the granting of certain equity awards to employees (other than to such delegates), subject to certain limitations and requirements. Our board of directors and compensation committee have currently delegated authority to a subcommittee to allow any two of our Chief Financial Officer or Principal Financial Officer, Chief People Officer and Chief Legal Officer, to grant, without any further action required by the compensation committee, equity awards to all employees who are designated as senior directors or below and are not members of the subcommittee or executive officers. The purpose of this delegation of authority is to enhance the flexibility of equity award |
Other Compensation Policies and Practices
administration and to facilitate the timely grant of equity awards to non-management employees, particularly new employees, within specified limits approved from time to time by the compensation committee. As part of its oversight function, the compensation committee reviews the grants made by the subcommittee on a quarterly basis. Our board of directors and compensation committee do not take material nonpublic information into account when determining the timing and terms of any stock option grant. We have not timed the disclosure of material nonpublic information for the purpose of affecting the value of executive compensation. We did not grant stock options to any of our named executive officers in 2024 and have never granted stock appreciation rights. Death Equity Acceleration Policy In December 2020, our compensation committee approved a policy providing that upon the termination due to death of an employee’s or non-employee director’s employment or other service relationship with us or any of our subsidiaries, any then outstanding equity awards held by the individual that vest solely based on continued employment or service will automatically receive two years of supplemental vesting. The policy applies both to awards granted prior to the adoption of the policy, as well as awards granted thereafter. Policy Prohibiting Hedging and Pledging of Equity Securities Our Insider Trading Policy prohibits our employees, including our executive officers, and the non-employee members of our board of directors from engaging in any short sale and from buying or selling puts, calls, other derivative securities or any derivative securities that provide the economic equivalent of ownership of any of our securities or an opportunity, direct or indirect, to profit from any change in the value of our securities or engage in any other hedging transaction with respect to our securities, at any time. In addition, our Insider Trading Policy prohibits our employees, including our executive officers, and the non-employee members of our board of directors from using our securities as collateral in a margin account or from pledging our securities as collateral for a loan. Stock Ownership Policy To further align the interests of our executive officers with those of our stockholders and to promote a long-term perspective in managing our company, we maintain our Stock Ownership Policy, which applies to our Chief Executive Officer and executive officers subject to Section 16 of the Exchange Act (“Section 16 Officers”), including each of our named executive officers. We most recently amended and restated the Stock Ownership Policy in March 2022. Our Stock Ownership Policy requires each named executive officer to acquire and hold a number of shares of our common stock equal in value to a multiple of such named executive officer’s annual base salary until he or she ceases to be our Chief Executive Officer or a Section 16 Officer, as applicable. The minimum value for our named executive officers is as follows:
Other Compensation Policies and Practices
For purposes of our Stock Ownership Policy, we only count directly and beneficially owned shares, including shares purchased through our ESPP or 401(k) Plan, if applicable, shares underlying vested RSUs, and shares held following settlement of PSUs and do not count vested but unexercised stock options. Each named executive officer has five years from the later of his or her designation as our Chief Executive Officer or Section 16 Officer, as applicable, or from the original effective date of the policy to obtain the required ownership level. As of December 31, 2024, all of our executive officers are in compliance with our Stock Ownership Policy or are within the five-year phase in period. Compensation Recovery Policy In November 2023, our compensation committee adopted a compensation recovery (“clawback”) policy in compliance with NYSE and SEC rules requiring public companies to recover excess incentive-based compensation from current and former executive officers in the event of an accounting restatement. Consistent with the requirements, this policy requires that if we are required to prepare an accounting restatement due to our material noncompliance with financial reporting requirements, we
Tax and Accounting Considerations
Tax and Accounting Considerations Deductibility of Executive Compensation Under Section 162(m) of the Internal Code (“Section 162(m)”), compensation paid to each of our “covered employees” that exceeds $1 million per taxable year is generally non-deductible. Although our compensation committee will continue to consider tax implications as one factor in determining executive compensation, it also looks at other factors in making its decisions and retains the flexibility to provide compensation for our executive officers in a manner consistent with the goals of our executive compensation program and the best interests of our stockholders, which may include providing for compensation that is not deductible by us due to the deduction limit under Section 162(m). Taxation of “Parachute” Payments Sections 280G and 4999 of the Code provide that executive officers and directors who hold significant equity interests and certain other service providers may be subject to significant additional taxes if they receive payments or benefits in connection with a change in control of our company that exceeds certain prescribed limits, and that our company (or a successor) may forfeit a deduction on the amounts subject to this additional tax. We have not agreed to provide any executive officer, including any named executive officer, with a “gross-up” or other reimbursement payment for any tax liability that the executive officer might owe as a result of the application of Sections 280G or 4999 of the Code. Section 409A of the Internal Revenue Code Section 409A of the Code imposes additional significant taxes in the event that an executive officer, director or service provider receives “deferred compensation” that does not satisfy the requirements of Section 409A of the Code. Although we do not maintain a traditional nonqualified deferred compensation plan for our executive officers, Section 409A of the Code does apply to certain severance arrangements, bonus arrangements and equity awards, and we have structured all such arrangements and awards in a manner to either avoid or comply with the applicable requirements of Section 409A of the Code. For our non-employee directors, we provide a Non-Employee Directors’ Deferred Compensation Program, which has been structured to comply with the applicable requirements of Section 409A of the Code. Accounting for Stock-Based Compensation We follow the Financial Accounting Standard Board’s Accounting Standards Codification Topic 718 (“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 of directors, including options to purchase shares of our common stock and other stock awards, based on the grant date fair value of these awards. This cost is recognized as an expense following the straight-line attribution method over the requisite service period. This calculation is performed for accounting purposes and reported in the executive compensation tables required by the federal securities laws, even though the recipient of the awards may never realize any value from such awards.
Summary Compensation Table
Summary Compensation Table The following table provides information regarding the total compensation, for services rendered in all capacities, that was paid to or earned by our named executive officers during 2022, 2023 and 2024.
Summary Compensation Table
| Name and principal position | Year | Salary ($) | Stock Awards ($)(1) | Option Awards ($)(2) | Non-Equity Incentive Plan Compensation ($) | All Other Compensation ($)(3) | Total ($) | | Khozema Shipchandler(4) Chief Executive Officer and Former President, Twilio Communications | 2024 | 1,100,000 | 24,388,514 | — | 1,507,000 | 214,949 | 27,210,463 | | | 2023 | 1,100,000 | 10,010,679 | — | 3,000,000 | 9,900 | 14,120,579 | | | 2022 | 1,100,000 | 28,552,689 | — | — | 8,304 | 29,660,993 | | Aidan Viggiano(5) Chief Financial Officer | 2024 | 850,000 | 8,360,364 | — | 1,164,500 | 13,460 | 10,388,324 | | | 2023 | 793,462 | 11,946,693 | — | 2,750,000 | 9,900 | 15,500,055 | | Dana Wagner(6) Former Chief Legal Officer, Chief Compliance Officer and Corporate Secretary | 2024 | 600,000 | 4,644,690 | — | — | 10,350 | 5,255,040 | | | 2023 | 600,000 | 5,005,406 | — | 1,500,000 | 9,900 | 7,115,306 | | | 2022 | 600,000 | 25,552,061 | — | — | 9,150 | 26,161,211 | | Jeff Lawson(7) Former Chief Executive Officer and Board Chair | 2024 | 2,443 | — | 5,139,601 | — | 4,283,533 | 9,425,577 | | | 2023 | 74,918 | — | — | — | 1,941 | 76,859 | | | 2022 | 134,000 | 49,228,812 | — | — | 14,657 | 49,377,469 |
Summary Compensation Table
| (1) The amounts reported in this column represent the aggregate grant date fair value of RSUs awarded to the named executive officers in 2022, 2023 and 2024, and PSUs awarded to the named executive officers in 2022 and 2024, calculated in accordance with FASB ASC Topic 718. Such aggregate 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 may be realized from such awards. The amounts reported for the RSUs were calculated using the closing price of our common stock on the date of grant. The amounts reported for the PSUs assume the probable outcome of the applicable performance conditions on the date of grant. The valuation assumptions used in determining such amounts are described in the Notes to our Consolidated Financial Statements included in our Annual Report on Form 10-K filed with the SEC on February 26, 2025 and the assumptions noted below. If the PSUs were instead valued based on the maximum outcome of the applicable performance conditions, the grant date fair value of the PSUs granted in this column (i) for 2022, would be as follows: Mr. Shipchandler: $43,321,190; Mr. Wagner: $19,691,651; Mr. Lawson: $74,827,768, and (ii) for 2024, would be as follows: Mr. Shipchandler: $27,128,782; Ms. Viggiano: $6,510,953; Mr. Wagner: $3,617,272. Mr. Lawson did not receive a 2024 PSU award. |
Summary Compensation Table
For the 2024 PSU awards, the fair value of the PSUs attributable to performance based on our relative total stockholder return was determined using a Monte Carlo simulation model using the following assumptions: (i) the expected term of 2.72 years was based on the time period from the grant date to the end of the performance period; (ii) the expected risk-free interest rate of 4.7% was based on the U.S. Treasury rates as of the grant date; and (iii) the expected volatility of 65.59% was based on the historical volatility of Twilio’s Class A common stock.
Summary Compensation Table
| (2) The amount reported in this column represents the incremental fair value associated with the extension of the exercise period of Mr. Lawson’s vested stock options pursuant to the Lawson Separation Agreement (as described below), calculated as of the modification date in accordance with FASB ASC Topic 718. Please see the section titled “—Potential Payments Upon Termination or Change in Control” below for information regarding the Lawson Separation Agreement and a description of the exercise period extension. |
Summary Compensation Table
| (3) The amounts reported in this column for 2024 represent (i) in the case of Mr. Shipchandler, (1) 401(k) matching contributions, (2) payments related to home security installation of $94,822 and (3) $113,293 for reimbursement of taxes associated with such home security installation; (ii) in the case of Ms. Viggiano, (1) 401(k) matching contributions and (2) a tax gross up of $5,066 on a hotel gift card provided to Ms. Viggiano; (iii) In the case of Mr. Wagner, 401(k) matching contributions of $10,350; and (iv) in the case of Mr. Lawson, (1) 401(k) matching contributions and (2) amounts paid to Mr. Lawson in connection with his departure in January 2025, including (x) a lump sum cash payment of $99,840, (y) $45,949, representing 18 months of the employer portion of Mr. Lawson’s COBRA premiums and (z) accelerated vesting of Mr. Lawson’s outstanding time-based RSUs and options, covering 68,124 shares of common stock, with an estimated value of $4,137,683 based on the closing market price of our common stock on January 12, 2024, the effective date of the acceleration. Mr. Shipchandler also utilized a parking space at the Company’s office building, to which the Company is entitled under its leasing arrangement and which was provided to Mr. Shipchandler at no additional cost to the Company. |
Summary Compensation Table
| (4) Mr. Shipchandler served as Chief Financial Officer from 2018 to 2021, Chief Operating Officer from October 27, 2021 until March 1, 2023, and President, Twilio Communications from March 1, 2023 until his appointment as Chief Executive Officer effective January 8, 2024. |
Summary Compensation Table
| (5) Ms. Viggiano served as Senior Vice President of Finance from 2021 until March 1, 2023, at which time she became our Chief Financial Officer. The amounts shown in this table for 2023 reflect an increase in Ms. Viggiano’s base salary and additional equity awards issued in connection with her appointment as Chief Financial Officer in March 2023. |
Summary Compensation Table
| (6) Mr. Wagner’s employment as our Chief Legal Officer, Chief Compliance Officer and Corporate Secretary ended on January 1, 2025 and he did not receive any non-equity incentive plan compensation for 2024. |
Summary Compensation Table
| (7) Mr. Lawson stepped down as our Chief Executive Officer and board chair effective January 8, 2024, and his employment with the Company ended on January 12, 2024. |
Summary Compensation Table
| 2025 Proxy Statement | 67 |
Summary Compensation Table
| Executive Compensation Tables | |
Grants of Plan-Based Awards Table
Grants of Plan-Based Awards Table The following table sets forth certain information with respect to all plan-based awards granted to our named executive officers during 2024.
Grants of Plan-Based Awards Table
| Name | Type of Award | Grant Date | Board Approval Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | | | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | | | All Other Stock Awards: Number of Shares of Stock or Units (#)(3) | All Other Option Awards: Number of Securities Underlying Options (#)(4) | Exercise or Base Price of Option Awards ($/Sh) | Grant Date Fair Value of Stock and Option Awards ($)(5)(6) | | | | | | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | | | | Khozema Shipchandler | RSUs | 2/20/2024 | 2/16/2024 | — | — | — | — | — | — | 139,344 | — | — | 7,898,018 | | | PSUs | 4/10/2024 | 4/10/2024 | — | — | — | 122,858 | 245,716 | 491,432 | — | — | — | 16,490,496 | | | Annual Bonus | — | — | 550,000 | 1,100,000 | 1,650,000 | — | — | — | — | — | — | — | | Aidan Viggiano | RSUs | 2/16/2024 | 2/16/2024 | — | — | — | — | — | — | 75,143 | — | — | 4,402,628 | | | PSUs | 4/10/2024 | 4/10/2024 | — | — | — | 29,486 | 58,972 | 117,944 | — | — | — | 3,957,736 | | | Annual Bonus | — | — | 425,000 | 850,000 | 1,275,000 | — | — | — | — | — | — | — | | Dana Wagner | RSUs | 2/16/2024 | 2/16/2024 | — | — | — | — | — | — | 41,746 | — | — | 2,445,898 | | | PSUs | 4/10/2024 | 4/10/2024 | — | — | — | 16,382 | 32,763 | 65,526 | — | — | — | 2,198,792 | | | Annual Bonus | — | — | 300,000 | 600,000 | 900,000 | — | — | — | — | — | — | — | | Jeff Lawson | — | — | — | — | — | — | — | — | — | — | 943,742 | — | 5,139,601 |
Grants of Plan-Based Awards Table
| (1) The amounts reported in this column reflect the 2024 annual cash bonuses, which were granted under the Cash Bonus Plan. For a description of the 2024 cash bonus awards, including information on the threshold, target, maximum and actual award level achievement, as well as descriptions of the performance goals, see the section titled “Executive Compensation—Compensation Discussion and Analysis—Individual Compensation Elements—Annual Cash Incentives—2024 Cash Bonus Awards.” |
Grants of Plan-Based Awards Table
| (2) The amounts reported in this column reflect the 2024 Annual PSUs, which were granted under the 2016 Plan. For a description of the 2024 Annual PSUs, including information on the threshold, target, and maximum award level achievement, as well as descriptions of the performance goals, see the section titled “Executive Compensation—Compensation Discussion and Analysis—Individual Compensation Elements—Long-Term Incentive Compensation—2024 Annual Equity Awards.” |
Grants of Plan-Based Awards Table
| (3) The amounts reported in this column reflect the 2024 Annual RSUs, which were granted under the 2016 Plan. For a description of the 2024 Annual RSUs, see the section titled “Executive Compensation—Compensation Discussion and Analysis—Individual Compensation Elements—Long-Term Incentive Compensation—2024 Annual Equity Awards.” |
Grants of Plan-Based Awards Table
| (4) The amount reported in this column represents certain of Mr. Lawson’s vested stock options as to which the exercise period was extended pursuant to the Lawson Separation Agreement (as described below). Please see the section titled “—Potential Payments Upon Termination or Change in Control” below for information regarding the Lawson Separation Agreement and a description of the exercise period extension. |
Grants of Plan-Based Awards Table
| (5) The amounts reported in this column represent the aggregate grant date fair value of the RSUs and PSUs granted to the named executive officers in 2024, calculated in accordance with FASB ASC Topic 718. Assumptions underlying the valuations are set forth in footnote 1 to the Summary Compensation Table above. These amounts do not reflect the actual economic value that may be realized from such awards. |
Grants of Plan-Based Awards Table
| (6) The amount reported in this column for Mr. Lawson represents the incremental fair value associated with the extension of the exercise period of Mr. Lawson’s vested stock options pursuant to the Lawson Separation Agreement (as described below), calculated as of the modification date in accordance with FASB ASC Topic 718. Please see the section titled “—Potential Payments Upon Termination or Change in Control” below for information regarding the Lawson Separation Agreement and a description of the exercise period extension. |
Grants of Plan-Based Awards Table
| 68 | 2025 Proxy Statement |
Grants of Plan-Based Awards Table
| | Executive Compensation Tables |
Outstanding Equity Awards at Fiscal Year-End Table
Outstanding Equity Awards at Fiscal Year-End Table The following table sets forth information regarding outstanding equity awards held by our named executive officers as of December 31, 2024. Except as described below, all stock options and RSUs are subject to certain vesting acceleration provisions as provided in the applicable Executive Severance Plan, and PSUs are subject to certain vesting acceleration provisions as provided in the applicable grant agreement. See the section titled “—Potential Payments Upon Termination or Change in Control” below for information regarding the impact of certain employment termination scenarios or a change in control on outstanding equity awards.
Outstanding Equity Awards at Fiscal Year-End Table
| | | Option Awards(1)(2) | | | | Stock Awards(1)(2) | | | | | Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($)(3) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($)(4) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | | Khozema Shipchandler | 11/01/2018(5) | 35,418 | — | 76.63 | 10/31/2028 | — | — | — | — | | | 2/22/2020(5) | 44,158 | — | 117.94 | 2/21/2030 | — | — | — | — | | | 2/25/2021(5) | 18,126 | — | 377.59 | 2/24/2031 | — | — | — | — | | | 11/11/2021(6) | 8,952 | 4,613 | 298.00 | 11/11/2031 | — | — | — | — | | | 11/11/2021(7) | — | — | — | — | 2,546 | 275,172 | — | — | | | 3/21/2022(8) | — | — | — | — | 14,882 | 1,608,447 | — | — | | | 3/21/2022(9) | — | — | — | — | — | — | 22,931 | 2,478,382 | | | 2/22/2023(10) | — | — | — | — | 67,821 | 7,330,094 | — | — | | | 2/20/2024(11) | — | — | — | — | 104,508 | 11,295,225 | — | — | | | 4/10/2024(12) | — | — | — | — | — | — | 319,431 | 34,524,081 | | Aidan Viggiano | 2/20/2020(5) | 4,066 | — | 126.71 | 2/20/2030 | — | — | — | — | | | 4/20/2021(13) | 2,008 | 44 | 367.65 | 4/20/2031 | — | — | — | — | | | 4/20/2021(14) | — | — | — | — | 70 | 7,566 | — | — | | | 11/11/2021(15) | — | — | — | — | 2,470 | 266,958 | — | — | | | 11/22/2021(16) | — | — | — | — | 924 | 99,866 | — | — | | | 3/21/2022(8) | — | — | — | — | 4,252 | 459,556 | — | — | | | 3/21/2022(9) | — | — | — | — | — | — | 7,297 | 788,660 | | | 2/22/2023(10) | — | — | — | — | 62,169 | 6,719,226 | — | — | | | 3/20/2023(17) | — | — | — | — | 27,667 | 2,990,249 | — | — | | | 2/16/2024(11) | — | — | — | — | 56,358 | 6,091,173 | — | — | | | 4/10/2024(12) | — | — | — | — | — | — | 76,664 | 8,285,802 | | Dana Wagner | 1/20/2022(18) | — | — | — | — | 17,139 | 1,852,383 | — | — | | | 3/21/2022(8) | — | — | — | — | 6,739 | 689,442 | — | — | | | 3/21/2022(9) | — | — | — | — | — | — | 10,423 | 1,126,518 | | | 2/22/2023(10) | — | — | — | — | 33,910 | 3,664,993 | — | — | | | 2/16/2024(11) | — | — | — | — | 31,310 | 3,383,985 | — | — | | | 4/10/2024(12) | — | — | — | — | — | — | 42,592 | 4,603,333 | | Jeff Lawson | 12/31/2015(5)(19) | 316,667 | — | 10.09 | 12/30/2025 | — | — | — | — | | | 2/10/2017(5)(19) | 163,890 | — | 31.96 | 2/9/2027 | — | — | — | — | | | 2/20/2018(5)(19) | 203,589 | — | 33.01 | 2/19/2028 | — | — | — | — | | | 1/31/2019(5)(19) | 110,697 | — | 111.32 | 1/30/2029 | — | — | — | — | | | 2/22/2020(5)(19) | 114,767 | — | 117.94 | 2/21/2030 | — | — | — | — | | | 2/25/2021(5)(19) | 34,132 | — | 377.59 | 2/24/2031 | — | — | — | — |
Outstanding Equity Awards at Fiscal Year-End Table
| (1) Equity awards were granted pursuant to our 2016 Plan. |
Outstanding Equity Awards at Fiscal Year-End Table
| (2) Unless otherwise described in the footnotes below, the vesting of each equity award on a vesting date is subject to the applicable named executive officer’s continued employment with us through such vesting date. |
Outstanding Equity Awards at Fiscal Year-End Table
| (3) This column represents the fair market value of a share of our common stock on the date of the grant, as determined by the administrator of our 2016 Plan. |
Outstanding Equity Awards at Fiscal Year-End Table
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Outstanding Equity Awards at Fiscal Year-End Table
| Executive Compensation Tables | |
Outstanding Equity Awards at Fiscal Year-End Table
| (4) The market values of the unvested RSUs and unearned PSUs are calculated by multiplying the number of unvested or unearned units, respectively, by the closing price of our common stock, as reported on the NYSE, of $108.08 per share on December 31, 2024. |
Outstanding Equity Awards at Fiscal Year-End Table
| (5) The shares subject to the stock option are fully vested. |
Outstanding Equity Awards at Fiscal Year-End Table
| (6) The shares subject to the stock option vest as follows: 33% of the shares subject to the stock option vest in equal quarterly installments between the first and second anniversaries of December 31, 2021, 33% of the shares subject to the stock option vest in equal quarterly installments between the second and third anniversaries of December 31, 2021 and 34% of the shares subject to the stock option vest in equal quarterly installments between the third and fourth anniversaries of December 31, 2021. |
Outstanding Equity Awards at Fiscal Year-End Table
| (7) The RSUs vest as follows: 33% of the RSUs vest in equal quarterly installments between the first and second anniversaries of December 31, 2021, 33% of the RSUs vest in equal quarterly installments between the second and third anniversaries of December 31, 2021 and 34% of the RSUs vest in equal quarterly installments between the third and fourth anniversaries of December 31, 2021. |
Outstanding Equity Awards at Fiscal Year-End Table
| (8) The RSUs vest as follows: 33% of the RSUs vest in equal quarterly installments between the first and second anniversaries of January 1, 2022, 33% of the RSUs vest in equal quarterly installments between the second and third anniversaries of January 1, 2022, and 34% of the RSUs vest in equal quarterly installments between the third and fourth anniversaries of January 1, 2022. In connection with the termination of Mr. Wagner’s employment as of January 1, 2025, all unvested RSUs held by Mr. Wagner as of that date were forfeited to us. |
Outstanding Equity Awards at Fiscal Year-End Table
| (9) The PSUs vest in three tranches subject to the achievement of certain performance metrics for 2022, 2023 and 2024. The 2024 tranche was eligible to vest if both (i) the minimum organic revenue growth threshold and (ii) the non-GAAP income from operations threshold were achieved for 2024. Vesting of these PSUs ranged up to 100% above the target based on levels of performance at or above threshold. This table shows the number of the 2024 tranche of PSUs eligible to vest at threshold performance. In February 2025, it was determined that none of the 2024 tranche of PSUs subject to these awards vested based on our performance for 2024. As a result, the following number of PSUs (at target) were outstanding as of December 31, 2024 but were forfeited in February 2025 based on our performance for 2024: 45,861 of these PSUs for Mr. Shipchandler and 14,593 of these PSUs for Ms. Viggiano. In connection with the termination of Mr. Wagner’s employment as of January 1, 2025, all unvested PSUs held by Mr. Wagner as of that date were forfeited to us. |
Outstanding Equity Awards at Fiscal Year-End Table
| (10) The RSUs vest as follows: 33% of the RSUs vest in equal quarterly installments between the first and second anniversaries of January 1, 2023, 33% of the RSUs vest in equal quarterly installments between the second and third anniversaries of January 1, 2023, and 34% of the RSUs vest in equal quarterly installments between the third and fourth anniversaries of January 1, 2023. In connection with the termination of Mr. Wagner’s employment as of January 1, 2025, all unvested PSUs held by Mr. Wagner as of that date were forfeited to us. |
Outstanding Equity Awards at Fiscal Year-End Table
| (11) The RSUs vest as follows: 1/16th of the RSUs vest on March 31, 2024, and 1/16th of the RSUs vest quarterly for the next 15 quarters on June 30, September 30, December 31 and March 31. In connection with the termination of Mr. Wagner’s employment as of January 1, 2025, all unvested RSUs held by Mr. Wagner as of that date were forfeited to us. |
Outstanding Equity Awards at Fiscal Year-End Table
| (12) The PSUs vest in a single tranche based on the achievement over a three-year performance period covering 2024 through 2026 of (i) cumulative free cash flow targets and (ii) our relative total stockholder return measured against the S&P 500 Index. Vesting of these PSUs will range between zero for below threshold performance and up to 200% of target based on levels of performance at or above threshold, subject to a limitation on overperformance in the case of negative total stockholder return. This table shows the number of PSUs eligible to vest at free cash flow target performance and relative total stockholder return maximum performance. In connection with the termination of Mr. Wagner’s employment as of January 1, 2025, all unvested PSUs held by Mr. Wagner as of that date were forfeited to us. |
Outstanding Equity Awards at Fiscal Year-End Table
| (13) The shares subject to this option vest as follows: 1/16th of the shares subject to the stock option vest on May 15, 2021, and the remaining shares subject to the stock option vest monthly through January 15, 2025 on the 15th day of the month. |
Outstanding Equity Awards at Fiscal Year-End Table
| (14) The RSUs vest as follows: 1/16th of the RSUs vest on May 15, 2021, and 1/16th of the RSUs vest quarterly for the next 15 quarters on February 15, May 15, August 15 and November 15. |
Outstanding Equity Awards at Fiscal Year-End Table
| (15) The RSUs vest as follows: 1/16th of the RSUs vest on November 20, 2021, and 1/16th of the RSUs vest quarterly for the next 15 quarters on February 15, May 15, August 15 and November 15. |
Outstanding Equity Awards at Fiscal Year-End Table
| (16) The RSUs vest as follows: 1/16th of the RSUs vest on February 15, 2022, and 1/16th of the RSUs vest quarterly for the next 15 quarters on February 15, May 15, August 15 and November 15. |
Outstanding Equity Awards at Fiscal Year-End Table
| (17) The RSUs vest as follows: 1/16th of the RSUs vest on August 15, 2023, and 1/16th of the RSUs vest quarterly for the next 15 quarters on February 15, May 15, August 15 and November 15. |
Outstanding Equity Awards at Fiscal Year-End Table
| (18) The RSUs vest as follows: 29.17% of the RSUs vest on February 15, 2023 and the remaining RSUs vest quarterly over the next eleven quarters on February 15, May 15, August 15 and November 15, with a final vesting of 2.08% of the RSUs on February 15, 2026. In connection with the termination of Mr. Wagner’s employment as of January 1, 2025, all unvested RSUs held by Mr. Wagner as of that date were forfeited to us. |
Outstanding Equity Awards at Fiscal Year-End Table
| (19) Pursuant to the Lawson Separation Agreement (as described below), Mr. Lawson received an extension of the exercise period of his vested stock options until the earliest to occur of: (i) the three-year anniversary of his employment termination date (or January 12, 2027), (ii) the applicable expiration date of the applicable stock option, or (iii) such earlier date as provided or permitted under the applicable equity plan. |
Outstanding Equity Awards at Fiscal Year-End Table
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Outstanding Equity Awards at Fiscal Year-End Table
| | Executive Compensation Tables |
Option Exercises and Stock Vested Table
Option Exercises and Stock Vested Table The following table presents, for each of our named executive officers, the shares of our common stock that were acquired upon the exercise of stock options and vesting of RSUs and PSUs and the related value realized during 2024.
Option Exercises and Stock Vested Table
| | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(1) | | Khozema Shipchandler | — | — | 88,472 | 6,442,132 | | Aidan Viggiano | — | — | 69,304 | 4,999,783 | | Dana Wagner | — | — | 49,152 | 3,533,991 | | Jeff Lawson | — | — | 56,518 | 4,137,683 |
Option Exercises and Stock Vested Table
| (1) The aggregate value realized upon the vesting and settlement of RSUs and PSUs is based on the number of shares underlying such awards that vested multiplied by the closing price of our shares of common stock on the NYSE on the vesting date or, if the vesting date was not a trading day, the closing price on the last trading day immediately preceding such vesting date. |
Potential Payments Upon Termination or Change in Control
Potential Payments Upon Termination or Change in Control
Other Change in Control Arrangements
| Year | Summary Compensation Table Total for PEO 1(1) | Compensation Actually Paid to PEO 1(2) | Summary Compensation Table Total for PEO 2(3) | Compensation Actually Paid to PEO 2(4) | Average Summary Compensation Table Total for Non-PEO NEOs(5) | Average Compensation Actually Paid to Non-PEO NEOs(6) | Value of Initial Fixed $100 Investment Based On: | | Net Income (Loss) (millions)(9) | Non-GAAP Income (Loss) from Operations (millions)(10) | | | | | | | | | Total Shareholder Return(7) | Peer Group Total Shareholder Return(8) | | | | (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | (k) | | 2024 | $9,425,577 | $3,248,458 | $27,210,463 | $65,586,042 | $7,821,682 | $17,386,888 | $110 | $300 | ($109) | $714.4 | | 2023 | $76,859 | $2,493,698 | — | — | $12,689,130 | $16,376,998 | $77 | $219 | ($1,015) | $533.0 | | 2022 | $49,377,469 | ($19,994,765) | — | — | $29,982,991 | ($1,557,065) | $50 | $139 | ($1,256) | ($4.5) | | 2021 | $14,625,745 | ($7,753,781) | — | — | $14,523,754 | ($2,409,804) | $268 | $194 | ($950) | $2.5 | | 2020 | $13,786,872 | $121,274,654 | — | — | $6,839,349 | $74,018,467 | $344 | $144 | ($491) | $35.7 |
Other Change in Control Arrangements
| (2) The dollar amounts reported in column (c) represent the amount of “compensation actually paid” to Mr. Lawson, as computed in accordance with Item 402(v) of Regulation S-K. The Company has not paid dividends historically and does not sponsor any pension arrangements; thus no adjustments are made for these items. The dollar amounts do not reflect the actual amount of compensation earned by or paid to Mr. Lawson during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to Mr. Lawson’s total compensation for the 2024 year to determine the compensation actually paid: |
Other Change in Control Arrangements
| Year | Reported Summary Compensation Table Total for PEO 1 | Reported Value of Equity Awards(a) | Equity Award Adjustments(b) | Compensation Actually Paid to PEO 1 | | 2024 | $9,425,577 | ($5,139,601) | ($1,037,518) | $3,248,458 |
Other Change in Control Arrangements
| Pay Versus Performance | |
Other Change in Control Arrangements
| (4) The dollar amounts reported in column (e) represent the amount of “compensation actually paid” to Mr. Shipchandler, as computed in accordance with Item 402(v) of Regulation S-K. The Company has not paid dividends historically and does not sponsor any pension arrangements; thus no adjustments are made for these items. The dollar amounts do not reflect the actual amount of compensation earned by or paid to Mr. Shipchandler during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to and Mr. Shipchandler’s total compensation for the 2024 year to determine the compensation actually paid: |
Other Change in Control Arrangements
| Year | Reported Summary Compensation Table Total for PEO 2 | Reported Value of Equity Awards(a) | Equity Award Adjustments(b) | Compensation Actually Paid to PEO 2 | | 2024 | $27,210,463 | ($24,388,514) | $62,764,093 | $65,586,042 |
Other Change in Control Arrangements
| | Pay Versus Performance |
Other Change in Control Arrangements
| (6) The dollar amounts reported in column (g) represent the average amount of “compensation actually paid” to the NEOs as a group (other than Mr. Lawson and, in the case of 2024, Mr. Shipchandler), as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual average amount of compensation earned by or paid to the NEOs as a group (other than Mr. Lawson and, in the case of 2024, Mr. Shipchandler) during the applicable year. The Company has not paid dividends historically and does not sponsor any pension arrangements; thus no adjustments are made for these items. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to average total compensation for the NEOs as a group (other than Mr. Lawson and Mr. Shipchandler) for 2024 to determine the compensation actually paid, using the same methodology described above in Note 2: |
Financial Performance Measures
| Pay Versus Performance | |
Relationship between Compensation Actually Paid presented in the Pay versus Performance Table and Other Table Elements
Relationship between Compensation Actually Paid presented in the Pay versus Performance Table and Other Table Elements As described in more detail in the section “Executive Compensation—Compensation Discussion and Analysis,” our executive compensation program reflects a variable pay-for-performance philosophy. While we utilize several performance measures to align executive compensation with company performance, all of those company measures are not presented in the Pay versus Performance table. Moreover, we generally seek to incentivize long-term performance, and therefore do not specifically align our performance measures with compensation that is actually paid (as computed in accordance with Item 402(v) of Regulation S-K) for a particular year. In accordance with Item 402(v) of Regulation S-K, we are providing the following descriptions of the relationships between information presented in the Pay versus Performance table. For purposes of the Pay versus Performance disclosure, we measure our TSR performance against the industry-focused index disclosed in the stock performance graph of our Annual Report on Form 10-K. The comparison assumes $100 was invested in our Class A common stock and in the S&P 500 Information Technology Index for the period starting December 31, 2019 and was held through the end of each year listed in the first table set forth above. All dollar values assume reinvestment of dividends paid by companies, where applicable, included in the S&P 500 Information Technology Index. Historical stock performance is not necessarily indicative of future stock performance.
Relationship between Compensation Actually Paid presented in the Pay versus Performance Table and Other Table Elements
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Relationship between Compensation Actually Paid presented in the Pay versus Performance Table and Other Table Elements
| | Pay Versus Performance |
Relationship between Compensation Actually Paid presented in the Pay versus Performance Table and Other Table Elements
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Relationship between Compensation Actually Paid presented in the Pay versus Performance Table and Other Table Elements
Equity Compensation Plan Information The following table provides information as of December 31, 2024 with respect to the shares of our common stock that may be issued under our existing equity compensation plans. We will not grant equity awards in the future under any of the equity compensation plans not approved by stockholders included in the table below.
Relationship between Compensation Actually Paid presented in the Pay versus Performance Table and Other Table Elements
| Plan Category | (a) Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights | (b) Weighted Average Exercise Price of Outstanding Options, Warrants and Rights | (c) Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) | | Equity compensation plans approved by stockholders(1) | 19,620,436(2) | $76.88(3) | 33,002,004(4) | | Equity compensation plans not approved by stockholders(5) | 88,011 | $35.46 | — | | Total | 19,708,447 | $74.15 | 33,002,004 |
Relationship between Compensation Actually Paid presented in the Pay versus Performance Table and Other Table Elements
| (1) Includes the following plans: our 2008 Plan, 2016 Plan, and our ESPP. We no longer make grants subject to our 2008 Plan. |
Relationship between Compensation Actually Paid presented in the Pay versus Performance Table and Other Table Elements
| (2) Consists of stock options, RSUs, PSUs and DSUs. The number of 2022 PSUs included in this amount for the 2024 performance period reflects the number of shares that would be earned assuming 100% of target level performance. However, in February 2025, upon certification by the compensation committee of performance for the 2024 performance period, no shares were earned. The number of 2024 PSUs included in this amount reflects the number of shares that would be earned assuming 100% of target level performance. |
Relationship between Compensation Actually Paid presented in the Pay versus Performance Table and Other Table Elements
| (3) Excludes shares issuable upon vesting of outstanding RSUs, PSUs and DSUs as of December 31, 2024, since they have no exercise price. |
Relationship between Compensation Actually Paid presented in the Pay versus Performance Table and Other Table Elements
| (4) As of December 31, 2024, a total of 23,292,678 shares of our common stock were reserved for issuance pursuant to the 2016 Plan. This number includes 3,783,548 shares of our common stock reserved and available for issuance under the SendGrid 2017 Plan that we assumed, which were approved by the stockholders of SendGrid, but not by a separate vote of our stockholders; such shares became available for issuance under our 2016 Plan, but awards using such shares may not be granted to individuals who were employed, immediately prior to the acquisition, by us or our subsidiaries. The 2016 Plan provides that the number of shares reserved and available for issuance under the 2016 Plan will automatically increase each January 1, beginning on January 1, 2017, by 5% of the outstanding number of shares of our common stock on the immediately preceding December 31 or such lesser number of shares as determined by our compensation committee. As of December 31, 2024, a total of 9,709,326 shares of our common stock were available for future issuance pursuant to the ESPP, including shares of our common stock subject to purchase during the current purchase period as of such date, which commenced on November 16, 2024 (the exact number of which will not be known until the purchase date on May 15, 2025). The ESPP provides that the number of shares reserved and available for issuance under the ESPP will automatically increase each January 1, beginning on January 1, 2017, by the lesser of 1,800,000 shares of our common stock, 1% of the outstanding number of shares of our common stock on the immediately preceding December 31 or such lesser number of shares as determined by our compensation committee. |
Relationship between Compensation Actually Paid presented in the Pay versus Performance Table and Other Table Elements
| (5) Includes shares of our common stock to be issued upon outstanding stock option and RSU awards under the following plans, which awards were assumed in connection with our acquisitions of SendGrid, Segment.io, Inc. (“Segment”) and Zipwhip Inc. (“Zipwhip”): SendGrid’s Amended and Restated 2012 Equity Incentive Plan and Amended and Restated 2017 Equity Incentive Plan; Segment’s Fifth Amended and Restated 2013 Stock Option and Grant Plan; and Zipwhip’s 2018 Equity Incentive Plan. No further grants may be made under any of these plans. |
Relationship between Compensation Actually Paid presented in the Pay versus Performance Table and Other Table Elements
| 82 | 2025 Proxy Statement |
Relationship between Compensation Actually Paid presented in the Pay versus Performance Table and Other Table Elements
Security Ownership of Certain Beneficial Owners and Management The following table sets forth certain information available to us with respect to the beneficial ownership of our capital stock as of March 31, 2025, for:
Relationship between Compensation Actually Paid presented in the Pay versus Performance Table and Other Table Elements
| • | each of our named executive officers; |
Relationship between Compensation Actually Paid presented in the Pay versus Performance Table and Other Table Elements
| • | each of our directors; |
Relationship between Compensation Actually Paid presented in the Pay versus Performance Table and Other Table Elements
| • | all of our current directors and executive officers as a group; and |
Relationship between Compensation Actually Paid presented in the Pay versus Performance Table and Other Table Elements
| • | each person known by us to be the beneficial owner of more than 5% of the outstanding shares of our common stock. |
Relationship between Compensation Actually Paid presented in the Pay versus Performance Table and Other Table Elements
We have determined beneficial ownership in accordance with the rules of the SEC, and thus it represents sole or shared voting or investment power with respect to our securities. Unless otherwise indicated below, to our knowledge, the persons and entities named in the table have sole voting and sole investment power with respect to all shares that they beneficially owned, subject to community property laws where applicable. We have based our calculation of percentage ownership of our common stock on 153,254,342 shares of our common stock outstanding on March 31, 2025. We have deemed shares of our capital stock subject to stock options that are currently exercisable or exercisable within 60 days of March 31, 2025 to be outstanding and to be beneficially owned by the person holding the stock option for the purpose of computing the percentage ownership of that person. We have deemed shares of our capital stock subject to RSUs for which the service condition has been satisfied or would be satisfied within 60 days of March 31, 2025 to be outstanding and to be beneficially owned by the person holding the RSUs for the purpose of computing the percentage ownership of that person. However, we did not deem these shares subject to stock options or RSUs outstanding for the purpose of computing the percentage ownership of any other person. Shares underlying DSUs are not included as beneficially owned. Unless otherwise indicated, the address of each beneficial owner listed in the table below is c/o Twilio Inc., 101 Spear Street, Fifth Floor, San Francisco, California 94105. The information provided in the table is based on our records, information filed with the SEC and information provided to us, except where otherwise noted.
Relationship between Compensation Actually Paid presented in the Pay versus Performance Table and Other Table Elements
| | Shares of Common Stock Beneficially Owned | | | Name of Beneficial Owner | # | | | Named Executive Officers and Directors: | | | | Khozema Shipchandler(1) | 177,566 | * | | Aidan Viggiano(2) | 18,674 | * | | Dana Wagner | 10,664 | * | | Jeff Lawson(3) | 6,676,114 | 4.3 | | Charles Bell | — | * | | Donna Dubinsky(4) | 9,451 | * | | Jeff Epstein(5) | 26,484 | * | | Jeffrey Immelt(6) | 31,237 | * | | Deval Patrick | 2,058 | * | | Erika Rottenberg(7) | 37,588 | * | | Andrew Stafman(8) | 3,669 | * | | Miyuki Suzuki | 12,476 | * |
Relationship between Compensation Actually Paid presented in the Pay versus Performance Table and Other Table Elements
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Relationship between Compensation Actually Paid presented in the Pay versus Performance Table and Other Table Elements
| Security Ownership of Certain Beneficial Owners and Management | |
Relationship between Compensation Actually Paid presented in the Pay versus Performance Table and Other Table Elements
| | Shares of Common Stock Beneficially Owned | | | Name of Beneficial Owner | # | | | All current directors and executive officers as a group (10 persons)(9) | 319,203 | * | | 5% Stockholders: | | | | The Vanguard Group(10) | 18,003,927 | 11.7 | | BlackRock, Inc.(11) | 10,512,625 | 6.9 |
Relationship between Compensation Actually Paid presented in the Pay versus Performance Table and Other Table Elements
| * Represents less than 1%. |
Relationship between Compensation Actually Paid presented in the Pay versus Performance Table and Other Table Elements
| (1) Consists of (i) 69,759 shares of Class A common stock held by Mr. Shipchandler, and (ii) 107,807 shares of Class A common stock subject to outstanding options that are exercisable within 60 days of March 31, 2025. |
Relationship between Compensation Actually Paid presented in the Pay versus Performance Table and Other Table Elements
| (2) Consists of (i) 8,735 shares of Class A common stock held by Ms. Viggiano, (ii) 6,118 shares of Class A common stock subject to outstanding options that are exercisable within 60 days of March 31, 2025, and (iii) 3,821 shares of Class A common stock issuable upon the settlement of RSUs that are releasable within 60 days of March 31, 2025. |
Relationship between Compensation Actually Paid presented in the Pay versus Performance Table and Other Table Elements
| (3) Consists of (i) 4,808,772 shares of Class A common stock held by Mr. Lawson and Erica Freeman Lawson, as trustees of the Lawson Revocable Trust dated 10/2/11, (ii) 1,022,705 shares of Class A common stock held by J.P. Morgan Trust Company, as trustee of the Lawson 2014 Irrevocable Trust dated 12/29/2014, and (iii) 844,637 shares of Class A common stock subject to outstanding options that are exercisable within 60 days of March 31, 2025. |
Relationship between Compensation Actually Paid presented in the Pay versus Performance Table and Other Table Elements
| (4) Consists of 9,451 shares of Class A Common stock held by Ms. Dubinsky, as trustee of the Shustek-Dubinsky Family Trust. |
Relationship between Compensation Actually Paid presented in the Pay versus Performance Table and Other Table Elements
| (5) Consists of 26,484 shares of Class A common stock held by Mr. Epstein, as trustee of the Epstein Family Revocable Trust. |
Relationship between Compensation Actually Paid presented in the Pay versus Performance Table and Other Table Elements
| (6) Includes 30,591 shares of Class A common stock held jointly with Mr. Immelt’s spouse. |
Relationship between Compensation Actually Paid presented in the Pay versus Performance Table and Other Table Elements
| (7) Consists of 37,588 shares of Class A common stock held of record by Ms. Rottenberg, as trustee of the Erika Rottenberg Revocable Trust dated 1/28/2016. |
Relationship between Compensation Actually Paid presented in the Pay versus Performance Table and Other Table Elements
| (8) Consists of 3,669 shares of Class A common stock held by Mr. Stafman. Pursuant to an arrangement between Mr. Stafman and Sachem Head Capital Management LP (“Sachem Head”), upon receipt of such shares, Mr. Stafman granted all right, title, interest, claims, and any other ownership interests in such shares to Sachem Head for no consideration. Uncas GP LLC (“SH Management”) is the sole general partner of Sachem Head, and Scott D. Ferguson is the managing partner of Sachem Head. Each of Mr. Stafman, Sachem Head, SH Management, and Mr. Ferguson may be deemed to share voting and investment control over such shares. |
Relationship between Compensation Actually Paid presented in the Pay versus Performance Table and Other Table Elements
| (9) Consists of (i) 201,457 shares of Class A common stock, (ii) 113,925 shares of Class A common stock subject to outstanding stock options that are exercisable within 60 days of March 31, 2025, and (iii) 3,821 shares of Class A common stock issuable upon the settlement of RSUs that are releasable within 60 days of March 31, 2025. |
Relationship between Compensation Actually Paid presented in the Pay versus Performance Table and Other Table Elements
| (10) Based on information reported by The Vanguard Group on Schedule 13G/A filed with the SEC on May 10, 2024. Of the shares of Class A common stock beneficially owned, The Vanguard Group reported that it has sole dispositive power with respect to 17,609,430 shares, shared dispositive power with respect to 394,497 shares and shared voting power with respect to 115,113 shares. The Vanguard Group listed its address as 100 Vanguard Blvd., Malvern, Pennsylvania 19355. |
Relationship between Compensation Actually Paid presented in the Pay versus Performance Table and Other Table Elements
| (11) Based on information reported by BlackRock, Inc. on Schedule 13G/A filed with the SEC on January 29, 2024. Of the shares of Class A common stock beneficially owned, Blackrock, Inc. reported that it has sole dispositive power with respect to 10,512,625 shares and sole voting power with respect to 9,486,684 shares. BlackRock, Inc. listed its address as 50 Hudson Yards, New York, New York 10001. |
Relationship between Compensation Actually Paid presented in the Pay versus Performance Table and Other Table Elements
| 84 | 2025 Proxy Statement |
Relationship between Compensation Actually Paid presented in the Pay versus Performance Table and Other Table Elements
Procedural Matters

DEF 14A of Twilio Inc

Board of Directors

Board of Directors

Board of Directors

Board of Directors

Board of Directors

Board of Directors

Board of Directors

Board of Directors

Board Skills and Experience Matrix

Board Skills and Experience Matrix

Board Skills and Experience Matrix

Board Skills and Experience Matrix

Board Skills and Experience Matrix

Board Skills and Experience Matrix

Board Skills and Experience Matrix

Board Skills and Experience Matrix

Board Skills and Experience Matrix

Board Skills and Experience Matrix

Board Skills and Experience Matrix

Board Skills and Experience Matrix

Board Skills and Experience Matrix

Board Skills and Experience Matrix

Board Skills and Experience Matrix

Board Skills and Experience Matrix

Board Skills and Experience Matrix

Board Skills and Experience Matrix

Board Skills and Experience Matrix

Board Skills and Experience Matrix

Board Skills and Experience Matrix

Board Skills and Experience Matrix

Board Skills and Experience Matrix

Board Skills and Experience Matrix

Board Skills and Experience Matrix

Identifying and Evaluating Director Nominees

Non-Employee Director Compensation

Non-Employee Director Compensation Policy

Non-Employee Director Compensation Policy

Non-Employee Director Compensation Policy

Non-Employee Director Compensation Policy

Non-Employee Director Compensation Policy

Non-Employee Director Compensation Policy

Non-Employee Director Compensation Policy

Non-Employee Director Compensation Policy

Non-Employee Director Compensation Policy

Non-Employee Director Compensation Policy

2024 Non-Employee Director Compensation Table

2024 Non-Employee Director Compensation Table

2024 Non-Employee Director Compensation Table

2024 Non-Employee Director Compensation Table

2024 Non-Employee Director Compensation Table

2024 Non-Employee Director Compensation Table

2024 Non-Employee Director Compensation Table

2024 Non-Employee Director Compensation Table

2024 Executive Compensation Program Highlights

2024 Executive Compensation Program Highlights

2024 Executive Compensation Program Highlights

2024 Executive Compensation Program Highlights

2024 Executive Compensation Program Highlights

2024 Executive Compensation Program Highlights

2024 Executive Compensation Program Design

Executive Compensation Policies and Practices

Executive Compensation Policies and Practices

Executive Compensation Philosophy

Executive Compensation Philosophy

Compensation-Setting Process

Compensation-Setting Process

Compensation-Setting Process

Compensation-Setting Process

Compensation-Setting Process

Role of Compensation Consultant

Role of Compensation Consultant

Role of Compensation Consultant

Role of Compensation Consultant

Role of Compensation Consultant

Role of Compensation Consultant

Role of Compensation Consultant

Role of Compensation Consultant

Role of Compensation Consultant

Role of Compensation Consultant