DEF 14A of Veeva Systems Inc, May 9, 2017

DEF 14A of Veeva Systems Inc

Filed May 9, 2017 · FY20170001193125-17-164170

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  1. Board Nominees (page 3)

    Board Nominees (page 3) There are two nominees for election to the Board.

  2. Board Nominees (page 3)

    | Name | Age | Veeva Director Since | Independent | Committee Membership | | Paul E. Chamberlain | 53 | 2015 | Yes | Audit Committee | | Paul Sekhri | 59 | 2014 | Yes | Nominating and Governance Committee |

  3. Corporate Governance (page 11)

    Corporate Governance (page 11)

  4. Executive Compensation (page 19)

    Executive Compensation (page 19) Since our initial public offering in October 2013, our Board and Compensation Committee have maintained a simple structure for our executive compensation programs. We have paid our named executive officers cash compensation that is below the cash compensation levels paid by our peers, and we have emphasized long-term equity compensation in the form of stock options and restricted stock units (“RSUs”). Our Board and Compensation Committee have adhered to this executive compensation approach because they believe it is effective and is consistent with our compensation philosophy.

  5. PROPOSAL ONE: ELECTION OF DIRECTORS

    PROPOSAL ONE: ELECTION OF DIRECTORS Our Board unanimously recommends a vote “FOR” each of the Class I nominees. Our Board may establish the authorized number of directors from time to time by resolution. Our Board is currently comprised of six members who are divided into three classes with staggered three-year terms. A director serves in office until his respective successor is duly elected and qualified or until his earlier death or resignation. Our restated certificate of incorporation and amended and restated bylaws that are currently in effect authorize only our Board to fill vacancies on our Board until the next annual meeting of stockholders. Any additional directorships resulting from an increase in the authorized number of directors would be distributed among the three classes so that, as nearly as possible, each class would consist of one-third of the authorized number of directors. Your proxy cannot be voted for a greater number of persons than the number of nominees named in this Proxy Statement.

  6. Information About Nominees and Incumbent Directors

    Information About Nominees and Incumbent Directors

  7. Nominees for Election at the Annual Meeting (Class I)

    Nominees for Election at the Annual Meeting (Class I) Two Class I directors have been nominated for election at the Annual Meeting for three-year terms, each expiring in 2020. Upon the recommendation of our Nominating and Governance Committee, our Board has nominated Paul E. Chamberlain and Paul Sekhri for election as Class I directors. Each of them was recommended as a nominee by the Nominating and Governance Committee. The term of office of each person elected as director will continue until such director’s term expires in 2020, or until such director’s successor has been duly elected and qualified.

  8. Nominees for Election at the Annual Meeting (Class I)

    | Name | Age | Principal Occupation and Business Experience | | Paul E. Chamberlain | 53 | Mr. Chamberlain has served as a member of our Board since December 2015. Since January 2015, Mr. Chamberlain has operated his own strategic and financial advisory firm, PEC Ventures. From July 1990 to January 2015, Mr. Chamberlain worked at Morgan Stanley, during which time he served as Managing Director for 18 years and as the Co-Head of Global Technology Banking for ten of those years. He also served as a member of the Investment Banking Division’s Operating Committee. Mr. Chamberlain spent the majority of his Morgan Stanley career in the firm’s Menlo Park, California office where he led account teams on financing and strategic transactions for its technology clients. He also serves on the board of directors of ServiceNow, Inc. since October 2016 and TriNet Group, Inc. since December 2015. Mr. Chamberlain earned a Bachelor of Arts in History, magna cum laude, from Princeton University and a Master of Business Administration from Harvard Business School. He serves as Chairperson of the Strategic Advisory Committee of JobTrain, a non-profit organization based in Menlo Park, California that provides vocational and life skills training, and served on its board of directors for over ten years. Mr. Chamberlain currently serves on our Audit Committee. Qualifications Our Board determined that Mr. Chamberlain should serve as a director based on his extensive experience working with high technology and high growth firms and his financial expertise. |

  9. Nominees for Election at the Annual Meeting (Class I)

    | Name | Age | Principal Occupation and Business Experience | | Paul Sekhri | 59 | Mr. Sekhri has served as a member of our Board since July 2014. Since February 2016, Mr. Sekhri has been Operating Partner at Highline Therapeutics, a biotech incubator launched by Versant Ventures. Concurrently and since February 2015, Mr. Sekhri has been President and CEO of Lycera Corp., a biopharmaceutical company. Prior to joining Lycera, Mr. Sekhri was Senior Vice President, Integrated Care at Sanofi S.A., a multinational pharmaceutical company headquartered in France, from April 2014 to January 2015. From May 2013 to March 2014, Mr. Sekhri was Group Executive Vice President, Global Business Development and Chief Strategy Officer at Teva Pharmaceutical Industries, Ltd., a global pharmaceuticals company focusing on the manufacture of generic and proprietary pharmaceutical products headquartered in Israel. From January 2009 to May 2013, Mr. Sekhri was Operating Partner and Head, Biotech Ops Group at TPG Biotech, the life sciences venture arm of the global private investment firm TPG Capital, where he was responsible for a portfolio of more than 50 life sciences companies. From December 2004 to January 2009, Mr. Sekhri was President and CEO of Cerimon Pharmaceuticals, Inc., a pharmaceutical company focusing on auto-immune diseases and pain management. Mr. Sekhri has served as a director of numerous private and public company boards, including Nivalis Therapeutics, Inc. since February 2016, Pharming N.V. since April 2015, Enumeral Biomedical Holdings, Inc. since December 2014, Tandem Diabetes Care Inc. from May 2012 to May 2013, MacroGenics, Inc. from January 2010 to May 2013 and Intercept Pharmaceuticals, Inc. from January 2008 to September 2012. Mr. Sekhri completed post-graduate studies in clinical anatomy and neuroscience at the University of Maryland, School of Medicine and received a Bachelor of Science degree in Zoology from the University of Maryland. Mr. Sekhri currently serves on our Nominating and Governance Committee. Qualifications Our Board determined that Mr. Sekhri should serve as a director based on his extensive business experience as an executive in the life sciences industry and venture capital experience with respect to the life sciences industry. |

  10. Directors Whose Terms Expire at the 2018 Annual Meeting (Class II)

    Directors Whose Terms Expire at the 2018 Annual Meeting (Class II)

  11. Directors Whose Terms Expire at the 2018 Annual Meeting (Class II)

    | Name | Age | Principal Occupation and Business Experience | | Timothy C. Barabe | 64 | Mr. Barabe has served as a member of our Board since September 2015. He retired in 2013 as Executive Vice President and Chief Financial Officer of Affymetrix, Inc. Previously, from July 2006 until March 2010, he was Senior Vice President and Chief Financial Officer of Human Genome Sciences, Inc. Mr. Barabe served as Chief Financial Officer of Regent Medical Limited, a U.K.-based, privately owned, surgical supply company, from 2004 to 2006. He was with Novartis AG from 1982 through August 2004, where he served in a succession of senior executive positions in finance and general management, most recently as the Chief Financial Officer of Sandoz GmbH, the generic pharmaceutical subsidiary of Novartis. Mr. Barabe serves on the board of directors of ArQule, Inc., Opexa Therapeutics, Inc., and Selecta Biosciences, Inc. Mr. Barabe also serves on the board of directors of Vigilant Biosciences, a private medical device company, and Project Open Hand, a non-profit organization. He received his Bachelor of Business Administration degree in Finance from the University of Massachusetts (Amherst) and his Master of Business Administration from the University of Chicago. Mr. Barabe currently serves on our Audit Committee and Nominating and Governance Committee. Qualifications Our Board determined that Mr. Barabe should serve as a director based on his extensive executive experience in the life sciences industry and his experience as a finance executive. |

  12. Directors Whose Terms Expire at the 2018 Annual Meeting (Class II)

    | Name | Age | Principal Occupation and Business Experience | | Gordon Ritter | 52 | Mr. Ritter has served as a member of our Board since May 2008 and serves as chairman of our Board. Mr. Ritter has been a General Partner at Emergence Capital Partners, a venture capital firm he founded, since June 2002. Prior to founding Emergence, Mr. Ritter was co-founder and Chief Executive Officer of Software As Service, Inc., a web services platform company. Prior to founding Software As Service, Mr. Ritter served as Vice President of the IBM Global Small Business division. Prior to IBM, Mr. Ritter was co-founder and President of Whistle Communications, Inc., an internet appliance and services platform for small and medium-sized businesses, which was acquired by IBM. Before Whistle, Mr. Ritter was co-founder and President of Tribe, Inc., a networking infrastructure company. Prior to Tribe, Mr. Ritter was Vice President of Capital Markets at Credit Suisse First Boston Inc. Mr. Ritter earned a Bachelor of Arts degree in Economics from Princeton University. Mr. Ritter currently serves on our Compensation Committee. Qualifications Our Board determined that Mr. Ritter should serve as a director based on his extensive business experience in the software and web services industries and his experience in venture capital. |

  13. Directors Whose Terms Expire at the 2019 Annual Meeting (Class III)

    Directors Whose Terms Expire at the 2019 Annual Meeting (Class III)

  14. Directors Whose Terms Expire at the 2019 Annual Meeting (Class III)

    | Name | Age | Principal Occupation and Business Experience | | Ronald E.F. Codd | 61 | Mr. Codd has served as a member of our Board since February 2012. Mr. Codd has been an independent business consultant since April 2002. From January 1999 to April 2002, Mr. Codd served as President, Chief Executive Officer and a director of Momentum Business Applications, Inc., an enterprise software company. From September 1991 to December 1998, Mr. Codd served as Senior Vice President of Finance and Administration and Chief Financial Officer of PeopleSoft, Inc., a provider of enterprise application software. Mr. Codd has served on the board of directors of a number of information technology companies, including FireEye, Inc. since July 2012, Rocket Fuel Inc. since February 2012, ServiceNow, Inc. since February 2012, DemandTec, Inc. from February 2007 to February 2012, Data Domain, Inc. from October 2006 to July 2009, Interwoven, Inc. from July 1999 to April 2009 and Agile Software Corporation from August 2003 to July 2007. Mr. Codd holds a Bachelor of Science degree in Accounting from the University of California, Berkeley and a Master of Management in Finance and Management Information Systems degree from the Kellogg Graduate School of Management at Northwestern University. Mr. Codd currently serves on our Audit Committee and Compensation Committee. Qualifications Our Board determined that Mr. Codd should serve as a director based on his management and software industry experience, including his experience in finance, which gives him a breadth of knowledge and valuable understanding of our industry. |

  15. Directors Whose Terms Expire at the 2019 Annual Meeting (Class III)

    | Name | Age | Principal Occupation and Business Experience | | Peter P. Gassner | 52 | Mr. Gassner is one of our founders and has served as our Chief Executive Officer and one of our directors since January 2007. Prior to joining Veeva, Mr. Gassner was Senior Vice President of Technology at salesforce.com, inc., a provider of enterprise cloud computing solutions, from July 2003 to June 2005, where he led the development effort to extend the Salesforce Platform to the enterprise. Prior to his time with salesforce.com, Mr. Gassner was with PeopleSoft from January 1995 to June 2003. At PeopleSoft, he served as Chief Architect and General Manager responsible for development, strategy, marketing and deployment of PeopleTools, the architecture underlying PeopleSoft’s application suite. Mr. Gassner began his career with International Business Machines Corporation (IBM). At IBM, Mr. Gassner conducted research and development on relational database technology, including the DB2 database. Mr. Gassner has served on the board of directors of Guidewire Software, Inc. since June 2015 and Zoom Video Communications, Inc. since November 2015. Mr. Gassner earned a Bachelor of Science degree in Computer Science from Oregon State University. Qualifications Our Board determined that Mr. Gassner should serve as a director based on his position as one of our founders and as our Chief Executive Officer, his extensive experience in general management and software and platform development and his experience in the software industry. |

  16. Directors Whose Terms Expire at the 2019 Annual Meeting (Class III)

    There are no family relationships among any of our directors or executive officers.

  17. Director Compensation

    Director Compensation The following table sets forth information about the compensation of the non-employee members of our Board who served as a director during fiscal 2017. Other than as set forth in the table and described more fully below, during fiscal 2017, we did not pay any fees to, make any equity awards or non-equity awards to or pay any other compensation to the non-employee members of our Board. Mr. Gassner, our Chief Executive Officer, receives no compensation for his service as a director and is not included in the table below.

  18. Director Compensation

    | Name | Fees Earned or Paid in Cash ($) (1) | Stock Awards ($) (2)(3)(4) | Total ($) | | Timothy C. Barabe | 50,000 | 174,988 | 224,988 | | Paul E. Chamberlain | 50,000 | 174,988 | 224,988 | | Ronald E.F. Codd | 57,083 | 212,472 | 269,555 | | Gordon Ritter | 60,417 | 225,000 | 285,416 | | Paul Sekhri | 47,500 | 150,000 | 197,500 |

  19. Director Compensation

    | Includes the annual retainers paid to each director.(1) |

  20. Director Compensation

    | Represents the aggregate grant date fair value of RSUs and stock options granted to the director during fiscal 2017, computed in accordance with FASB ASC Topic No. 718. See note 10 of the notes to our consolidated financial statements included in our annual report on Form 10-K filed on March 30, 2017 for a discussion of the assumptions made by us in determining the grant date fair values of our equity awards.(2) |

  21. Director Compensation

    | As of January 31, 2017, the above-listed non-employee directors held outstanding options to purchase shares of our Class A common stock as follows: Mr. Barabe — 0; Mr. Chamberlain — 0; Mr. Codd — 40,000; Mr. Ritter — 40,000; and Mr. Sekhri — 60,000. As of January 31, 2017, Mr. Codd also held an outstanding option to purchase 139,250 shares of Class B common stock which represents the unexercised and vested portion of an option granted in March 2012 for 312,500 shares of Class B common stock.(3) |

  22. Director Compensation

    | As of January 31, 2017, the above-listed non-employee directors held outstanding RSUs under which the following number of shares of our Class A common stock were issuable upon vesting: Mr. Barabe — 2,584; Mr. Chamberlain — 2,584; Mr. Codd — 3,137; Mr. Ritter — 3,322; and Mr. Sekhri — 2,215.(4) |

  23. Non-Employee Director Compensation Plan

    Non-Employee Director Compensation Plan Amended Compensation Plan Effective September 9, 2015 for Messrs. Barabe and Chamberlain and effective at the 2016 annual meeting of stockholders for Messrs. Codd, Ritter and Sekhri, each non-employee member of the Board receives an annual cash retainer of $50,000, paid quarterly. Non-employee members of the Board also receive issuances of RSUs under the 2013 Equity Incentive Plan. On the date of each annual meeting of our stockholders, each non-employee director who is serving on the Board as of such date will be issued RSUs valued at $150,000 of our Class A common stock. In addition, the non-executive chairman or lead independent director will receive an additional issuance of RSUs valued at $50,000 of our Class A common stock. Non-employee members of the Audit Committee and Compensation Committee will be issued RSUs valued at $25,000 and $12,500, respectively, of our Class A common stock with the chairs of those committees issued RSUs valued at $50,000 and $25,000, respectively, of our Class A common stock. Such annual grants vest quarterly over one year and are valued on the grant date. New directors will receive cash and equity compensation on a pro-rated basis to coincide with our annual director compensation period, which begins in the month of our annual meeting of stockholders. Prior Compensation Plan Prior to the amendment of our Non-Employee Director Compensation Plan in September 2015, each non-employee member of our Board received an annual cash retainer of $40,000 paid quarterly and the non-executive chairman or lead independent director received an additional annual cash retainer of $20,000 paid quarterly. Non-employee members of the Audit Committee, Compensation Committee, and Nominating and Governance Committee received an annual cash retainer of $9,000, $7,000, and $4,000, respectively, paid quarterly with the chairs of those committees receiving an annual cash retainer of $20,000, $15,000, and $7,500, respectively, paid quarterly. Additionally, non-employee members of our Board also received grants of non-statutory stock options under the 2013 Equity Incentive Plan both upon joining the Board and on the date of each annual meeting of stockholders. The initial grant would be in an amount and with a vesting scheduled determined by our Board and with an exercise price equal to the fair market value of our Class A common stock on the grant date. The annual grant would be for 20,000 shares of our Class A common stock, vesting in full on the one-year anniversary of the grant date and having an exercise price equal to the fair market value of our Class A common stock on the grant date. We have a policy of reimbursing directors for their reasonable out-of-pocket expenses incurred in attending Board and committee meetings.

  24. Executive Summary

    Executive Summary Since our initial public offering (“IPO”) in October 2013, our Board and Compensation Committee have maintained a simple structure for our executive compensation programs. We have paid our NEOs cash compensation that is below the cash compensation levels paid by our peers, and we have emphasized long-term equity compensation in the form of stock options and RSUs. Our executive officers have been paid nearly identical annual base salaries since our IPO, and, other than the officer holding the position of Senior Vice President, Global Customer Services, none of our executive officers have been paid short-term cash incentive bonuses. Our Board and Compensation Committee have adhered to this executive compensation approach because they believe it is effective and is consistent with our compensation philosophy as described below.

  25. Executive Compensation Philosophy, Objectives and Components

    Executive Compensation Philosophy, Objectives and Components We operate in the software/technology industry and face a highly competitive environment for top-level executive talent. It is critical to accomplishing our business objectives that we are able to attract and retain talented executives whose skills and experience enable them to contribute to our long-term success. As such, the principal objectives and philosophy of our executive compensation programs are to attract, fairly compensate, appropriately incentivize, and retain our executives in a manner that aligns their long-term interests with those of our stockholders. In fiscal 2017, the primary components of our compensation programs for our NEOs were base salary and stock options and, with respect to certain NEOs, RSUs. Our Senior Vice President, Global Customer Services was also eligible to receive variable cash compensation. As discussed in more detail below, beginning in our fiscal year ending January 31, 2018 (“fiscal 2018”), none of our executive officers are eligible for variable cash compensation.

  26. Role of Compensation Committee, Management and Compensation Consultant

    Role of Compensation Committee, Management and Compensation Consultant Role of Compensation Committee. Our Board has established a Compensation Committee to discharge its responsibilities relating to our executive compensation policies and programs. Our Compensation Committee evaluates the performance of our Chief Executive Officer and determines his compensation. The Compensation Committee also determines the compensation of our other executive officers in consultation with our Chief Executive Officer. In making its decisions, our Compensation Committee considers such matters as the members deem appropriate, including our financial and operating performance, the performance of our Class A common stock, factors specific to individual officers such as their individual achievements and retention concerns, our operational goals, and the comparative compensation data described below. From time to time, our Board approves equity grants to our executive officers upon the recommendation of the Compensation Committee, although our Compensation Committee is also authorized to approve such grants. Our Compensation Committee has delegated authority to our Chief Executive Officer to make certain routine equity award grants, as described below. For additional information on the Compensation Committee, see “Board Committees — Compensation Committee” elsewhere in this Proxy Statement. Role of Management. Members of management, including our Chief Executive Officer, Chief Financial Officer, and General Counsel, work with our Compensation Committee and often attend the Compensation Committee meetings. Members of management also make presentations to our Compensation Committee regarding our historical equity grants and the adequacy of the remaining equity pool to achieve retention objectives. Although our Chief Executive Officer participates in the discussion and decisions relating to the compensation of our other executive officers, he does not participate in the decision-making process with respect to his own compensation. Our Chief Executive Officer comprises the Non-Executive Equity Committee, to which our Compensation Committee has delegated authority to make routine equity award grants to newly-hired, non-officer-level employees, as well as promotional and refresh equity award grants to non-officer-level employees, all within certain share parameters established and reviewed from time to time by the Compensation Committee. Role of Compensation Consultant. Our Compensation Committee has the authority to engage its own advisors to assist it in performing its duties, and we pay the fees charged by such advisors. Compensia has been engaged to assist the Compensation Committee in its decision-making process by providing information on competitive market compensation practices, identifying a peer group against which to compare our compensation programs, providing information including market data on our outside director compensation program, and supplying such other information and recommendations as the Compensation Committee may from time to time request.

  27. Peer Group and Competitive Data

    Peer Group and Competitive Data In making compensation decisions for our NEOs for fiscal 2017, our Compensation Committee considered data supplied by Compensia on the compensation of executives at the peer companies listed below. Our Compensation Committee believes it is useful to review this comparative data when evaluating our executive compensation programs and making compensation decisions for our NEOs. While it uses this data as a reference point, the Compensation Committee does not feel it necessary at this stage to mirror the compensation provided by these other companies or to target any specific percentile or range of percentiles for cash, incentive, equity or total compensation for our executive officers relative to these peer companies. At the end of fiscal 2014, Compensia recommended a peer group, which our Compensation Committee accepted. Compensia evaluates our peer group annually, and the only change to peer group since fiscal 2014 is to remove Concur Technologies due to its acquisition by SAP in December 2014. Our Compensation Committee considered the peer group’s compensation practices data for compensation decisions during and with respect to fiscal 2017. The peer group consisted of the following companies, which our Compensation Committee has determined are appropriate based upon industry, revenue, market cap, profitability, and headcount:

  28. Peer Group and Competitive Data

    | Aspen Technology | athenahealth | CommVaultSystems | Cornerstone OnDemand | | Guidewire Software | Infoblox (1) | Medidata Solutions | NetSuite (1) | | Palo Alto Networks | Qlik Technologies (1) | ServiceNow | SolarWinds (1) | | Splunk | Tableau Software | The Ultimate Software Group | Workday |

  29. Peer Group and Competitive Data

    | Infoblox, Netsuite, Qlik Technologies, and SolarWinds have been acquired. However, compensation information was available at the time of Compensia’s evaluation for fiscal 2017 so they were included in our peer group for fiscal 2017 determinations.(1) |

  30. Principal Elements of Compensation

    Principal Elements of Compensation The compensation of our NEOs for fiscal 2017 consisted of base salary and stock options (including stock options granted in prior fiscal years that continued vesting during fiscal 2017) and, with respect to certain NEOs, RSUs and variable cash compensation. The relative proportion of these components have not been dictated by any particular formula, and the mix and amount of compensation elements has been and will continue to be within the discretion and business judgment of our Compensation Committee. With respect to our Chief Executive Officer and our Chief Financial Officer, as well as an additional executive officer and co-founder who is not an NEO for fiscal 2017, our Compensation Committee purposefully emphasized long-term incentive compensation in the form of stock options to align the officers’ long-term interests with those of our stockholders. Prior to completing our IPO in October 2013, our Compensation Committee determined to maintain through the IPO and for some time thereafter a straight-forward executive compensation program for these executives that would continue to foster an ownership mentality by emphasizing long-term equity compensation, in the form of stock options, over cash compensation. We do not currently provide these executive officers any form of compensation other than base salary, which is the same for each of these executives, and the stock options granted prior to our IPO. To date, our Compensation Committee is of the view that this compensation approach is appropriate for these most senior executive officers. Compensation for our other NEOs consists of base salary, stock options, and, with respect to certain NEOs, RSUs. Our Senior Vice President, Global Customer Services was also eligible to receive a cash bonus based on the achievement of profitability goals. Our Compensation Committee has structured these compensation programs to attract new senior executives, provide competitive levels of more liquid and less volatile compensation through base salary and RSUs, continue to foster an ownership mentality and alignment with the long-term interests of stockholders through the use of RSUs and stock options, and encourage the achievement of key operational goals. Base Salary. We provide base salaries to our NEOs to compensate them for services rendered on a day-to-day basis and to provide sufficient fixed cash compensation to allow them to fund their personal and household expenses while remaining focused on their responsibilities to Veeva. Since our IPO, Veeva has maintained a largely flat annual base salary structure for our executive officers. For fiscal year 2017, our Compensation Committee increased the base salary level for most of our executive officers from $275,000 to $300,000. This action was taken after observing that the total cash compensation for most of our NEOs fell below the 50th percentile of our peer group, even after factoring in the likely cash equivalent impact of RSUs vesting during the year. The one exception to this policy was Mr. Lequient. Due to the variable cash incentive bonus associated with his role as Senior Vice President, Global Customer Services, Mr. Lequient received a base salary of $275,000. In March 2017, our Compensation Committee increased Mr. Lequient’s annual base salary from $275,000 to $300,000 and eliminated his variable cash incentive bonus in order to standardize the base salaries of all of our executive officers. Therefore, all of our current NEOs have an annual base salary of $300,000 for the remainder of fiscal 2018. Base salaries paid to our NEOs for fiscal 2017 are reflected in the Summary Compensation Table below. We expect that our Compensation Committee will continue to review base salary levels annually and may review them more frequently, for example in connection with a promotion. Annual Cash Incentive Bonuses. With one exception, we have not offered a short-term cash incentive bonus program to our NEOs since our IPO, and our Compensation Committee again determined for fiscal 2017 not to offer such a program. Rather, our Board and Compensation Committee continue to believe that our reliance on equity compensation adequately facilitates the achievement of corporate operational goals and aligns each NEO with long-term stockholder interest. Accordingly, except as described below, none of our NEOs were paid any cash incentive bonus for fiscal 2017. The one exception to our policy of not offering short-term cash incentive bonuses has been for the executive officer in the role of Senior Vice President, Global Customer Services. Our Compensation Committee believed that to be competitive and to provide appropriate incentive to maintain a profitable professional services business, it was advisable to offer annual variable compensation to the executive in this role. For fiscal 2017, Mr. Defesche, who held this position until he was succeeded by Mr. Lequient in March 2016, was paid an aggregate of $32,180 in variable cash compensation, which is equal to 1.0% of global professional services profit for the first quarter of fiscal 2017 (pro rated for his time in the role during the quarter). Global professional services profit for purposes of this variable compensation calculation is non-GAAP professional services net income, which is calculated by excluding professional services income associated with certain new product lines from GAAP professional services net income. Mr. Lequient, who replaced Mr. Defesche in the role of Senior Vice President, Global Customer Services, was paid aggregate cash variable incentive bonuses totaling $138,590 for fiscal 2017, which is equal to 1.0% of global professional services profit for the first quarter of fiscal 2017 (pro rated for his time in the role during the quarter) and 0.55% of global professional services profit for the remainder of fiscal 2017. The global professional services profit for Mr. Lequient’s variable compensation was calculated on the same basis as described above for Mr. Defesche. Information about the variable cash compensation paid to the Senior Vice President, Global Customer Services for fiscal 2017 is included in the Summary Compensation Table below. In March 2017, our Compensation Committee, in consultation with our management, determined that the executive in the Senior Vice President, Global Customer Services role could be adequately incentivized through stock options and RSUs similar to our other NEOs. Therefore, starting in fiscal 2018, the short-term cash incentive bonus for our Senior Vice President, Global Customer Services, currently Mr. Lequient, was suspended. Equity Awards. We grant stock options and RSUs from time to time to employees, including our NEOs, under our stock plans. Stock options allow our executive officers to purchase shares of our common stock at a price per share equal to the fair market value of our common stock on the date of grant. Our options typically have a five-year vesting schedule. Our Compensation Committee believes that options are inherently performance-based because the holder benefits only if our stock price increases following the option grant date, aligning the option holder’s interest closely with those of our stockholders. In addition, our RSU awards provide shares that will be issued upon satisfaction of service period vesting conditions, typically over a four-year vesting schedule. Our Compensation Committee believes that a grant of RSU awards serves as an effective retention tool for our executive officers because unvested awards are forfeited if an executive officer voluntarily leaves us before the awards have vested and because they have a more readily ascertainable cash value and provide greater liquidity than stock options. We believe that the combination of stock options and RSUs in our long-term equity program emphasizes an ownership culture and rewards our executives for growing our business.

  31. Deductibility of Executive Compensation

    Deductibility of Executive Compensation Section 162(m) of the Code, will limit the amount that we may deduct from our federal income taxes for remuneration paid to our executive officers to one million dollars per executive officer per year, unless certain requirements are met. Section 162(m) provides an exception from this deduction limitation for certain forms of “performance-based compensation,” as well as for the gain recognized by executive officers upon the exercise of qualifying compensatory stock options. Gain from settlement of restricted stock units and bonus payments to executives may not be tax deductible. While our Compensation Committee is mindful of the benefit to us of the full deductibility of compensation and will consider deductibility when analyzing potential compensation alternatives, our Compensation Committee believes that it should not be constrained by the requirements of Section 162(m) where those requirements would impair flexibility in compensating our executive officers in a manner that can best promote our corporate objectives. Therefore, our Compensation Committee has not adopted a policy that requires that all compensation be deductible. In fiscal 2017, there was no limitation in the deductibility of compensation to our executive officers under Section 162(m).

  32. Accounting Treatment

    Accounting Treatment We account for stock compensation in accordance with the authoritative guidance set forth in ASC Topic 718, which requires companies to measure and recognize the compensation expense for all share-based awards made to employees and directors, including stock options and RSUs, over the period during which the award recipient is required to perform services in exchange for the award (for executive officers, generally the four- or five-year vesting period of the award). We estimate the fair value of stock options granted using the Black-Scholes option-valuation model “fair value” of these awards. This calculation is performed for accounting purposes and reported in the compensation tables below.

  33. Summary Compensation Table

    Summary Compensation Table The following table provides information concerning the compensation paid to our NEOs for fiscal 2017.

  34. Summary Compensation Table

    | Name and Principal Position | Year | Salary ($) | Bonus ($) (1) | Stock Awards ($) (2) | Option Awards ($) (2) | Total ($) | | Peter P. Gassner | 2017 | 297,917 | — | — | — | 297,917 | | Chief Executive Officer | 2016 | 275,000 | — | — | — | 275,000 | | | 2015 | 275,000 | — | — | — | 275,000 | | Timothy S. Cabral | 2017 | 297,917 | — | — | — | 297,917 | | Chief Financial Officer | 2016 | 275,000 | — | — | — | 275,000 | | | 2015 | 275,000 | — | — | — | 275,000 | | Frank Defesche (3) | 2017 | 300,000 | 32,180 | 785,600 | — | 1,117,780 | | Senior Vice President and General Manager, Vault QualityOne | 2016 | 300,000 | 214,626 | 210,960 | — | 725,586 | | Josh Faddis | 2017 | 297,917 | — | 196,400 | — | 494,317 | | Senior Vice President, General Counsel and Corporate Secretary | 2016 | 275,000 | — | 205,600 | — | 480,600 | | | 2015 | 272,917 | — | — | — | 272,917 | | Frederic Lequient (4) | 2017 | 275,000 | 138,590 | 874,440 | 1,178,040 | 2,466,070 | | Senior Vice President, Global Customer Services | | | | | | | | Alan V. Mateo | 2017 | 297,917 | — | 392,800 | — | 690,717 | | Executive Vice President, Global Sales | 2016 | 221,058 | — | 944,650 | 6,266,000 | 7,431,708 | | E. Nitsa Zuppas | 2017 | 297,917 | — | 196,400 | — | 494,317 | | Chief Marketing Officer | 2016 | 275,000 | — | 848,560 | — | 1,123,560 |

  35. Summary Compensation Table

    | Messrs. Defesche and Lequient received variable cash compensation as described in “Principal Elements of Compensation—Cash Incentive Bonuses.”(1) |

  36. Summary Compensation Table

    | The amounts reported in these columns represent the aggregate grant date fair value of RSUs and options to purchase shares of our Class A common stock, as applicable, computed in accordance with FASB ASC Topic No. 718. See note 10 of the notes to our consolidated financial statements included in our annual report on Form 10-K filed on March 30, 2017 for a discussion of the assumptions made by us in determining the grant date fair value of our equity awards. These amounts do not purport to reflect the value that will be recognized by the NEOs upon sale of the underlying securities.(2) |

  37. Summary Compensation Table

    | Effective March 23, 2016, Mr. Defesche ceased to be an executive officer in the role of Senior Vice President, Global Customer Services. He is included in this table pursuant to SEC rules because he was an executive officer during a portion of fiscal 2017.(3) |

  38. Summary Compensation Table

    | Mr. Lequient joined Veeva in February 2016 and became an executive officer effective March 23, 2016.(4) |

  39. Fiscal 2017 Grants of Plan-Based Awards

    Fiscal 2017 Grants of Plan-Based Awards The following table sets forth certain information regarding each plan-based award granted to our NEOs during fiscal 2017.

  40. Fiscal 2017 Grants of Plan-Based Awards

    | Name | Grant Date | All Other Stock Awards: Number of Shares of Stock or Units (#) | All Other Option Awards: Number of Securities Underlying Options (#) | Exercise or Base Price of Option Awards ($/share) | Grant Date Fair Value of Stock and Option Awards ($) (1) | | Peter P. Gassner | — | — | — | — | — | | Timothy S. Cabral | — | — | — | — | — | | Frank Defesche | 3/23/2016 | 32,000(2) | — | — | 785,600 | | Josh Faddis | 3/23/2016 | 8,000(2) | — | — | 196,400 | | Frederic Lequient | 2/29/2016 | 36,000(2) | — | — | 874,440 | | | 3/3/2016 | — | 100,000(3) | 25.70 | 1,178,040 | | Alan V. Mateo | 3/23/2016 | 16,000(2) | — | — | 392,800 | | E. Nitsa Zuppas | 3/23/2016 | 8,000(2) | — | — | 196,400 |

  41. Fiscal 2017 Grants of Plan-Based Awards

    | The amounts reported represent the aggregate grant date fair value computed in accordance with FASB ASC Topic No. 718. See note 10 of the notes to our consolidated financial statements included in our annual report on Form 10-K filed on March 30, 2017 for a discussion of the assumptions made by us in determining the grant date fair value of our equity awards. These amounts do not purport to reflect the value that will be recognized by the NEOs upon sale of the underlying securities.(1) |

  42. Fiscal 2017 Grants of Plan-Based Awards

    | RSUs vest quarterly over four years, with 1/16th vesting per quarter, following the vesting commencement date of March 1, 2016.(2) |

  43. Fiscal 2017 Grants of Plan-Based Awards

    | Mr. Lequient’s stock options vest over five years, with 20% of the shares subject to the award vested on March 1, 2017, and 1/20th of the total shares vesting equally on a quarterly basis thereafter.(3) |

  44. Outstanding Equity Awards at Fiscal 2017 Year-End

    Outstanding Equity Awards at Fiscal 2017 Year-End The following table sets forth information regarding all unexercised options and unvested RSUs held by each of our NEOs as of January 31, 2017. The vesting schedule applicable to each outstanding award is described in the footnotes to the table below.

  45. Outstanding Equity Awards at Fiscal 2017 Year-End

    | | Grant Date | Option Awards | | | | Stock Awards | | | Name | | Number of Securities Underlying Unexercised Options Vested (#) | Number of Securities Underlying Unexercised Options Unvested (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock that Have Not Vested (#) | Market Value of Shares of Stock that Have Not Vested ($) (1) | | Peter P. Gassner | 3/10/2013 | 1,277,777 | 2,055,556(2) | 3.92 | 3/9/2023 | — | — | | Timothy S. Cabral | 2/24/2010 | 45,000 | — | 0.13 | 2/23/2020 | — | — | | | 3/10/2013 | 86,777 | 555,556(2) | 3.92 | 3/9/2023 | — | — | | Frank Defesche | 3/10/2013 | — | 122,500(2) | 3.92 | 3/9/2023 | — | — | | | 3/23/2015 | — | — | — | — | 4,500(3) | 190,485 | | | 3/23/2016 | — | — | — | — | 26,000(4) | 1,100,580 | | Josh Faddis | 9/28/2012 | 81,500 | 50,000(5) | 1.54 | 9/27/2022 | — | — | | | 3/10/2013 | — | 100,000(2) | 3.92 | 3/9/2023 | — | — | | | 3/25/2015 | — | — | — | — | 4,500(3) | 190,485 | | | 3/23/2016 | — | — | — | — | 6,500(4) | 275,145 | | Frederic Lequient | 2/29/2016 | — | — | — | — | 29,250(4) | 1,238,153 | | | 3/3/2016 | — | 100,000(6) | 25.70 | 3/2/2023 | — | — | | Alan V. Mateo | 5/1/2015 | 66,401 | 324,999(7) | 26.99 | 4/30/2025 | — | — | | | 5/1/2015 | — | — | — | — | 22,750(8) | 963,008 | | | 3/23/2016 | — | — | — | — | 13,000(4) | 550,290 | | E. Nitsa Zuppas | 3/26/2013 | 25,466 | 46,666(9) | 3.92 | 3/25/2023 | — | — | | | 3/15/2014 | 55,000 | 45,000(10) | 32.26 | 3/14/2024 | — | — | | | 3/25/2015 | — | — | — | — | 4,500(3) | 190,485 | | | 4/27/2015 | — | — | — | — | 13,500(3) | 571,455 | | | 3/23/2016 | — | — | — | — | 6,500(4) | 275,145 |

  46. Outstanding Equity Awards at Fiscal 2017 Year-End

    | Computed in accordance with SEC rules as the number of unvested RSUs multiplied by the closing market price of our Class A common stock at the end of fiscal 2017, which was $42.33 on January 31, 2017 (the last trading day of fiscal 2017).(1) |

  47. Outstanding Equity Awards at Fiscal 2017 Year-End

    | The stock options vest monthly over a five-year period following the vesting commencement date. The vesting commencement dates for the option grants are February 1 of 2014, 2015, 2016, and 2017 for Messrs. Cabral, Gassner, Defesche, and Faddis, respectively.(2) |

  48. Outstanding Equity Awards at Fiscal 2017 Year-End

    | RSUs vest quarterly over four years, with 1/16th vesting per quarter, following the vesting commencement date of March 1, 2015.(3) |

  49. Outstanding Equity Awards at Fiscal 2017 Year-End

    | RSUs vest quarterly over four years, with 1/16th vesting per quarter, following the vesting commencement date of March 1, 2016.(4) |

  50. Outstanding Equity Awards at Fiscal 2017 Year-End

    | Mr. Faddis’ stock options vest over five years, with 20% of the shares subject to the award vested on September 17, 2013, and 1/60th of the total shares vesting equally on a monthly basis thereafter.(5) |

  51. Outstanding Equity Awards at Fiscal 2017 Year-End

    | Mr. Lequient’s stock options vest over five years, with 20% of the shares subject to the award vested on March 1, 2017, and 1/20th of the total shares vesting equally on a quarterly basis thereafter.(6) |

  52. Outstanding Equity Awards at Fiscal 2017 Year-End

    | Mr. Mateo’s stock options vest over five years, with 20% of the shares subject to the award vested on April 13, 2016, and 1/60th of the total shares vesting equally on a monthly basis thereafter.(7) |

  53. Outstanding Equity Awards at Fiscal 2017 Year-End

    | Mr. Mateo’s RSUs vest quarterly over five years, with 1/20th vesting per quarter, following the vesting commencement date of April 13, 2015.(8) |

  54. Outstanding Equity Awards at Fiscal 2017 Year-End

    | Ms. Zuppas’ stock options vest over five years, with 20% of the shares subject to the award vested on March 18, 2014, and 1/60th of the total shares vesting equally on a monthly basis thereafter.(9) |

  55. Outstanding Equity Awards at Fiscal 2017 Year-End

    | Ms. Zuppas’ stock options vest monthly over a five-year period following the vesting commencement date of April 1, 2014.(10) |

  56. Fiscal 2017 Option Exercises and Stock Vested

    Fiscal 2017 Option Exercises and Stock Vested The following table shows the number of shares NEOs acquired upon exercise of options and vesting of RSUs during fiscal 2017.

  57. Fiscal 2017 Option Exercises and Stock Vested

    | | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) (1) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) (2) | | Peter P. Gassner | — | — | — | — | | Timothy S. Cabral | 260,000 | 8,524,775 | — | — | | Frank Defesche | 97,500 | 3,408,701 | 8,000 | 306,890 | | Josh Faddis | 87,500 | 3,801,030 | 3,500 | 130,280 | | Frederic Lequient | — | — | 6,750 | 264,915 | | Alan V. Mateo | 108,600 | 1,760,029 | 10,000 | 371,735 | | E. Nitsa Zuppas | 22,868 | 700,063 | 9,500 | 344,510 |

  58. Fiscal 2017 Option Exercises and Stock Vested

    | The value realized is based on the fair market value of our Class A common stock on the date of exercise minus the exercise price.(1) |

  59. Fiscal 2017 Option Exercises and Stock Vested

    | The value realized on vesting is calculated by multiplying the number of RSUs vesting by the fair market value of a share of our Class A common stock on the vesting date.(2) |

  60. Fiscal 2017 Potential Payments Upon Termination or Change in Control

    Fiscal 2017 Potential Payments Upon Termination or Change in Control We have entered into offer letters with each of Messrs. Gassner, Cabral, Defesche, Faddis, Lequient, and Mateo and Ms. Zuppas, none of which provide a right to receive severance in the event of a termination of their employment. Other than Mr. Faddis, none of our NEOs is currently eligible for any change in control-related benefits. Mr. Faddis’ offer letter provides that if he is terminated without cause or resigns for good reason within 60 days prior to or 18 months following a change in control, then he will vest in all of his then-outstanding equity awards to the same extent as if he had remained employed for an additional 24 months from the date of such termination or resignation. Assuming Mr. Faddis’ employment was terminated as of January 31, 2017 and such termination was within 60 days prior to or 18 months following our change in control, Mr. Faddis would have been eligible to receive option and RSU acceleration pursuant to his offer letter in the amount of $3,850,511. This value was calculated by multiplying the number of unvested option and RSU shares eligible for acceleration by $42.33, the closing price of our Class A common stock on January 31, 2017, the last trading day of fiscal 2017, or, in the case of his options, by the difference between that price and any applicable exercise price.